Committee on Concepts of Accounting Applicable to the Public Sector, 1970-71.

The article highlights the report of the Committee on Concepts of Accounting Applicable to the Public Sector, 1970-71 of the American Accounting Association. The charge to this committee is to prepare a report that identifies the accounting concepts and standards applicable to public sector programs and organizations, including those related to internal management as well as to external reporting. There are many characteristics of public-sector organizations that distinguish them from business enterprises. Governments are often granted power to tax the earnings of those whose employment is within their jurisdiction. Appropriations may be made for specific amounts of money, or they may be in unspecified amounts. The reconciling difference between accrued expenditures and accrued cost is the amount recorded as assets having some future service potential. As long as the public sector was considered to be a necessary evil and government outputs were deemed to be of limited value, it may have made sense to emphasize control over inputs only. In conclusion, it would appear that the greatest challenges for accountants in the public sector lie in finding ways to implement the concepts of effort and accomplishment so that meaningful relationships may be disclosed for managerial decision-making as well as for public accountability on the part of all public officials.