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Public Versus Private Sector Accounting

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Running Head: GOVERNMENT REPORTING MODEL 1
Government Reporting Model
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Instructor
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GOVERNMENT REPORTING MODEL 2
Defend your choice of accounting practices; why are the differences you identify
importantly?
Public sector entities reporting focuses on reporting recorded financial statements to the
concerned stakeholders with much emphasis on tracking funds that are generated from a wide
variety of revenue sources such as tax revenues and related expenditures allocated or
appropriated to particular functions (Budding, Grossi & Tagesson, 2014). Indeed, to address the
varied needs in public sector accounting, the management may go outside predefined accounting
methodology such as non-use of accrual accounting to report certain activities that need an
accurate reflection of cash position of an organization, particularly when the institutions are
meant to be spending resources more than generating the resources. On the other hand, private
sector entities reporting is strictly following accepted accounting principles or defined
methodology in accounting business transactions (Budding, Grossi & Tagesson, 2014)
Explain why the differences matter in their respective (private- and public-sector) contexts.
Explain why each difference in accounting practice is proper and necessary in its context,
or critique any current practice that is not proper for its context.
The practice of accounting differs due to the contexts and the environment of reporting.
In public sector reporting, the environment for reporting is to the public whereas in private sector
it reports to a section of people who are currently stakeholders as well as potential investors. It is
therefore important that organizations that do private sector reporting to understand the
environment so that they can apply appropriate accounting principles that communicate the
intended and required information. Cash-based accounting may be preferred in most public

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Running Head: GOVERNMENT REPORTING MODEL Government Reporting Model Name Instructor Institutional Affiliation Date 1 GOVERNMENT REPORTING MODEL 2 Defend your choice of accounting practices; why are the differences you identify importantly? Public sector entities reporting focuses on reporting recorded financial statements to the concerned stakeholders with much emphasis on tracking funds that are generated from a wide variety of revenue sources such as tax revenues and related expenditures allocated or appropriated to particular functions (Budding, Grossi & Tagesson, 2014). Indeed, to address the varied needs in public sector accounting, the management may go outside predefined accounting methodology such as non-use of accrual accounting to report certain activities that need an accurate reflection of cash position of an organization, particularly when the institutions are meant to be spending resources more than generating the resources. On the other hand, private sector entities reporting is strictly following accepted accounting principles or defined methodology in accounting business transactions (Budding, Grossi & Tagesson, 2014) Explain why the differences matter ...
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