Chapter+5+HW+Solutions+to+Cases

Chapter+5+HW+Solutions+to+Cases - Chap 5 Solutions to Cases...

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Chap 5 Solutions to Cases 5-1. a . Discuss with students various methods of obtaining financial statements and getting “benchmark” data to make comparisons across entities. Professional associations such as the Government Finance Officers Association, National Association of State Auditors, Controllers and Treasurers and Association of School Business Officials publish “best practices” for various areas of public finance, accounting, and financial reporting. Since students will have a different list of cities, ask them to compare their results with other students and look for patterns in which types and sizes of governments make similar choices in accounting methods, particularly, in this case, regarding choice of infrastructure asset accounting methods. b. An important communication skill for students to master is to convey technical financial accounting information in an effective way so that decision makers find the information useful for making informed decisions. You may wish to ask students to show their memo or essay to a finance director of a city and get the director’s opinion about whether the student has captured the fundamental issues relating to infrastructure and communicated it in a professional and informative manner. c. During the implementation years of GASBS 34 , the GFOA and some state auditors released policy statements indicating to governments that they did not have to capitalize infrastructure assets to meet minimum standards for the GFOA’s Certificate of Achievement for Excellence in Financial Reporting or the states’ reporting compliance regulations. Despite such statements, most governments that sought a “clean” audit opinion voluntarily developed inventories of infrastructure and followed GAAP for infrastructure reporting. For most general purpose governments, omitting infrastructure assets would cause their statement of net assets to be materially misstated resulting in a qualified or adverse audit opinion—likely the latter. A government receiving an adverse
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This note was uploaded on 06/21/2011 for the course BUS-A 335 taught by Professor Trax during the Summer '11 term at IUPUI.

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Chapter+5+HW+Solutions+to+Cases - Chap 5 Solutions to Cases...

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