It is necessary to perform financial analyses on all types of organizations to ensure successful operations. There is a great need for accountability in government organizations because their activities are accountable to their constituents. “Rising cost and declining revenues have hampered the financial affairs of state governments, forcing many to curtail services, reduce employee benefits, and trim the workforce, calling into question the fiscal sustainability of many state governments” (Thorton, 2012). Therefore, it is necessary to complete an analysis of the organization’s finances. The comprehensive annual financial report (CAFR) can be used to show accountability to an organization’s stakeholders through transparency. This type of financial report helps communicate an organization’s financial situation to the stakeholders and analysts.
In class, it was discussed that there are several guidelines and standards by which organization have to follow in regards to their financial statements and operations. For example, organizations have to abide by Generally Accepted Accounting Principles (GAAP) and the Governmental Accounting …show more content…
For example, the Government Finance Review’s (2013) article emphasizes the need for local governments to adhere to set accounting guidelines. The article highlights the need for accurate and comprehensible by describing the negative effects on transparency and involvement from stakeholders. Therefore, many local government entities can improve on the way their budgeting information is presented in financial report formats (Kinnersely, 2011). By doing so, organizations and analysts can maximize their financial success. Overall, analysts can use the CAFR to help improve an organization’s financial position by reviewing all relevant funding factors, which will then provide managers with the ability to create more accurate financial statements in the
In class, it was discussed that there are several guidelines and standards by which organization have to follow in regards to their financial statements and operations. For example, organizations have to abide by Generally Accepted Accounting Principles (GAAP) and the Governmental Accounting …show more content…
For example, the Government Finance Review’s (2013) article emphasizes the need for local governments to adhere to set accounting guidelines. The article highlights the need for accurate and comprehensible by describing the negative effects on transparency and involvement from stakeholders. Therefore, many local government entities can improve on the way their budgeting information is presented in financial report formats (Kinnersely, 2011). By doing so, organizations and analysts can maximize their financial success. Overall, analysts can use the CAFR to help improve an organization’s financial position by reviewing all relevant funding factors, which will then provide managers with the ability to create more accurate financial statements in the