Management’s Perceptions of Annual Financial Reporting
Maher, Craig S.
Sohl, Shannon N.
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The Governmental Accounting Standards Board (GASB) was established in 1984 as the second operating arm of the Financial Accounting Foundation (FAF), to serve as the authoritative accounting standard setting body for state and local governmental entities in the United States.1 In 2009, GASB began the third phase of Economic Condition Reporting: Financial Projections and issued guidelines for Service Efforts and Accomplishments Reporting (aka SEAs) in 2010. To date GASB has issued 70 Statements, with the most recent (No. 67 & No. 68) pertaining to accounting for and reporting of pensions. By far, No. 34 (issued in 1999) was the most significant change GASB made in its history. The ever-increasing evolution of our economy, governmental service provisions, and financing options help explain the continued changes in financial reporting and disclosures. In 2012, the Center for Governmental Studies reviewed dozens of comprehensive annual financial Management’s Perceptions of Annual Financial Reporting An International City/County Management Association (ICMA) white paper Written by: Dr. Craig S. Maher, Associate Professor, Northern Illinois University, teaches public budgeting and financial management in the Division of Public Administration. His research emphasizes fiscal federalism and fiscal condition analysis. Dr. Shannon N. Sohl, CPA, is a Research Associate at Northern Illinois University’s Center for Governmental Studies. Her current research and projects focus predominantly on developing a roadmap, strategies, and tools for improving governmental financial reporting. reports (CAFRs) from a variety of projects and found that those municipal CAFRs generally ranged from 110 pages to more than 250 pages, depending on the size of the community and its service offerings.2 Additionally, this survey revealed that it can take approximately six months for some entities to complete the CAFR, rendering the data stale when introduced. Furthermore, new standards often require additional resources and system changes, and can add to the length of the CAFR and annual close. Yet, to describe the well-known, complex state of public sector financial reporting without taking action is of no use.