Public Sector Accounting System - A Conceptual Analysis

Abstract

Public sector accounting is the system of accounting that involves recording and maintenance of books of accounts by the government authorities on their financial performance. There are three categories of organisations normally working in any environment: public, private and non-profit concerns. Each of these organisations is working on a different motive, for instance, private sector organisations run for making more profit for their long-existence, public organisations or governments work for socioeconomic sustainable development of the country, whereas NGOs are for rendering the services to the society at large. If this is the reality, it is clear that the financial transactions of each of these organisations are different from each other. So it is not possible to record their transactions as per single accounting standard. Hence, it is necessary to have different accounting standards applicable to these organisations individually. Government accounts must be available to the public in a transparent manner. To ensure this, it is necessary to have standards which are applicable to the public sector to account for their financial transactions. The present paper is intended to analyse the public sector accounting system at the global level and in the Indian context.