Comprehensive Annual Financial Report Briefing Essay

The purpose of this apprize is to educate the newly take mount members on authorities accounting system. Beca design the new circuit card members be businesspeople from the community, they need to pull in why governance accounting is non the aforesaid(prenominal) as for-profit pecuniary accounting. The skeleton will comp argon governing body accounting to for-profit fiscal accounting, describe the prefatory establishment reporting entity, and value the Management word and Analysis office of the super one- course pecuniary name (CAFR) for the bea of Alabama. The dry land of Alabamas fiscal year terminationed family 30, 2011 will be used in the evaluation of the MD& adenineA scratch ( might of the subject Comptroller, 2011). establishmental bill vs. For-Profit financial Accounting administrational accounting is not the same as for-profit financial accounting. in that respectfore, it is necessary that individuals busy in political relation entities h ave a good understanding of budgeting and accounting.Governments and for-profits have contrary purposes, activities that generate revenues, stakeholders, financial objectives, and desire to survive. stop accounting and financial reporting standards ar necessary because users of financial reports of governments and for-profits do not have the same needs (GASB, 2012). Governments are essential to be accountable for the use of resources in their operating environment, unlike for-profit businesses. Governmental resources are acquired from the guaranteed payment of taxes paid by individual taxpayers. The taxes paid have no direct relationship to the services the taxpayer received. Therefore, taxpayers mensurate the value received from the resources they have provided to government. As a result, political accounting and financial reporting standards strive to help stakeholders evaluate if public resources are properly expensed and if the skill of services improved or worsen from the previous year (GASB, 2012).Government insurance coverage EntityIdentifying the accounting entity is one of the most primal accounting issues. The financial reporting entity is the direct government and its component units. The firsthand government sack be either a state, local, or special government. Component units are official separate organizations in which elected officials of the primary government are held financially accountable. A component unit and a primary government are mutually beneficial to one another. Their relationship is necessary to underwrite that the reporting entitys financial literary arguments are not misleading or broken (Copley & vitamin A Engstrom, 2011). read and local governments are advised to prepare a Comprehensive Annual financial Report (CAFR). A CAFR should cover all farm animals and activities of the primary government and its component units.The CAFR consists of troika part introductory, financial, and statistical. The Intr oductory Section of the CAFR includes the table of contents, earn of transmittal from the governments pay Director, list of government officials, and an organizational map (Copley & adenine Engstrom, 2011). The financial section includes an self-directed auditors report, concerns discussion and analysis, government-wide financial disputations, fund financial statements, financial statements notes, and any other required supplementary financial training. Last, the statistical section includes additional financial, economic, and demographic information (Office of Financial Management, 2012). By combining all three sections into one comprehensive report, the CAFR reveals the state governments financial and operating activities that unsex its financial condition.Managements word of honor and AnalysisIn June 1999, the GASB issued a statement requiring government entities to include the Management raillery and Analysis (MD&A) within the CAFR. The MD&A discusses issues rela ted to government entities, such as financial performance, smashing resources, and budget trends, in regard to its financial position. The MD&A gives the government an opportunity to present an overview of its financial activities. This section contains most of the basic financial statements. Auditors are responsible for reviewing the financial material to ensure that the information is correct (Copley & Engstrom, 2011). The State of Alabamas MD&A provides useful financial highlights to CAFR users and the public. At the end of September 30, 2011, Alabamas net assets increased by $335 one thousand million and exceeded liabilities by $24.1 billion at the end of the fiscal year.By reviewing the financial highlights, a user can gather information about the states sise major funds that operate the government for Alabama. The General Fund and Education religion fund were prorated by 15 and 3 percent, respectively because collection did not foregather the projections out lined in the budget. Users also can access the states basic financial statements, which consist of government-wide financial statements, fund financial statements, and notes to the financial statements. Because the MD&A performs its analysis using financial conditions based on the balance sheet, statement of revenues, expenditures, and changes in the funds balance, the CAFR is more comprehendible to its users (Department of Finance Office of the State Comptroller, 2011). refinementThe CAFR is an annual financial statement issued by a state or local government to represent its financial position. There are noteworthy differences between for-profit and governmental accounting. Understanding these differences is fundamental when measuring managements performance and the financial victor or failure of the entity. The organization is accountable for its success or failures because of the information presented in the organizations CFAR. Furthermore, the MD&A provides a more compre hendible outline of managements segmentation and impacts of governmental activities on the financial line of the organization.ReferencesCopley, P., & Engstrom, J. (2011). Essentials of accounting for governmental and not-for-profit organizations (10th ed.). newly York, NY McGraw-Hill. Department of Finance Office of the State Comptroller. (2011). Comprehensive Annual Financial Report for the Fiscal Year ended September 30, 2011. Retrieved from http//comptroller.alabama.gov/pdfs/CAFR/CAFR.Ala.2011.pdf GASB. (2012). Why Government Accounting and Financial Reporting is and should be- Different. Retrieved from http//www.gasb.org/white_paper_full.pdf Granof, M. H., & Wardlow, P. S. (2011). Core Concepts of Government and Not-for-Profit Accounting (2nd ed.). New York, NY Wiley & Sons. Office of Financial Management. (2012). Comprehensive Annual Financial Report. Retrieved fromhttp//www.ofm.wa.gov/cafr/