Government Accounting Research

Since the 30 years of the reform and opening up, China's economic and social cause has been experiencing a rapid development, the accelerated industrialization and urbanization has leaded to a rapid growth of sub-national constructive financing needs. Especially, since the State promulgated the "massive increase in government investment, the implementation of total 4 trillion investment plan for two years" in November of 2008, in order to match the huge investment plan of 4 trillion, the sub-national governments raised the substantial funds so quickly through the "local government financing platform" that the debt proportion surged and the financial risks highlighted in some areas. However, the situation that sub-national government borrowed the debt in a large scale was not open but hidden. The main reasons are that:sub-national government can neither borrow from financial institutions and issue bonds directly nor offer guarantee externally according to Chinese laws and regulations; sub-national government does not want to publicly disclose the actual debt situation; Chinese current government accounting system does not require recording and disclosuring such debts. A small part of sub-national government debt is reflected and recorded in our government accounting at present. The fact that debt financing in sub-national government is too large and contains a potential risk has become indisputable. Strengthening sub-national debt management, preventing and resolving financial risks, ensuring economy and society sustainable, stable and healthy development has become a major event of economic work in China. On March 5th,2010, at the third meeting of the Eleventh National People's Congress, Premier Wen pointed out "enhancing the governmental debt management, strengthening the internal and external binding and effectively preventing and resolving potential financial risks", which is taken from the Government Work Report. Comprehensive, reliable and timely sub-national government debt information is the effective foundation and prerequisite for sub-national debt management, which sub-national government debt risk assessment, prevention and resolution base on. Sub-national debt information should be provided mainly by government accounting. But there are many problems about local government debt accounting that can not provide the required information of sub-national government debt management and therefore restrict sub-national government debt management in China. This shows that the grim situation of our sub-national government debt objectively asks for reforming our current government accounting as soon as possible. Providing the necessary accounting information for sub-national government debt management is a top priority. This article starts from the inherent relationship between sub-national government debt management and government accounting, analyzes the reasons and characteristics of the Chinese sub-national government debt, systematically analyzes shortcomings of our government accounting and their impact on sub-national government debt management. On the basis of relevant international experience, this article probes how to reform and improve our government accounting in order to provide the comprehensive, reliable and timely sub-national government debt information with higher quality, which is needed for realizing sub-national government debt management objectives.The main contents are as follows:Chapter I is the introduction. This chapter describes the research background and the theoretical and practical significance of the topic, comprehensively discusses the research results from the overseas and domestic scholars on sub-national government debt management and the issues related to government accounting, describes the research methods, research ideas and structural arrangement, points out the innovations and shortcomings.Chapterâ…¡is about sub-national government debt management and government accounting. This chapter explains the basic theory of sub-national government debt management and government accounting, discusses and analyzes the relationship between them, which offer the theoretical support for the reform of sub-national government debt management. Sub-national government debt management should base on the relevant data supplied by government accounting. One of government accounting objects is sub-national government debt. And a main objective of government accounting is to serve for government debt management. The development of sub-national government debt management requires government accounting to renovate accordingly.Chapter III describes current situation of sub-national government debt management in China. This chapter traces the development process of Chinese sub-national government debt, systematically analyzes the causes of Chinese sub-national government debt and the existing problems in the management process. Among them, this chapter emphatically analyzes the causes, functions and risks of sub-national government debt on the sub-national government financing platform, and then points out that current government accounting is an important limiting factor in sub-national government debt management.Chapter IV is about government accounting in Chinese sub-national government debt management. This chapter combs past and present situation about the recognition, measurement and reporting of sub-national government debt in current government accounting, and then systematically analyzes existing problems about recognition, measurement and reporting of sub-national government debt in current government accounting and the effect on sub-national government debt management.Chapter V discusses sub-national government debt management and government accounting in foreign countries. This chapter not only reviews the recognition, measurement and reporting of sub-national government debt in sub-national government debt management practices and government accounting of the U.S. and France, but also analyzes the situation about International Public Sector Accounting Standards on recognition, measurement and reporting of government debt. On this basis, this chapter obtains the beneficial enlightenment for related reform in China.Chapter VI analyzes relevant order and objectives in Chinese government accounting reform. This chapter makes the following discussions:First, this chapter, from the perspective of laws and regulations, studies how to put sub-national government borrowing behavior in the sun in order that the government accounting can justifiably reflect and measure related contents. Secondly, on this basis, this chapter explores ways of strengthening supervision of sub-national government's direct borrowing behavior. Finally, this chapter proposes objectives of government accounting reform according to the needs of sub-national government debt management.Chapter VII states related ideas about Chinese government accounting reform. The reform concept about recognition, measurement and reporting of sub-national government debt in Chinese government accounting is the focus and purpose of this research. This chapter makes a specific, detailed reform and perfection program on the recognition and measurement of Chinese sub-national government debt, outlines the overall framework of sub-national government debt reporting system and designs specific action plans.Strengthening sub-national government debt management and preventing debt risk is the most urgent, important work in Chinese current economic work. Probing government accounting reform to adapt to the needs of sub-national government debt management is a new research field. Looking at the full text, innovations of this article are as follows:1. Study Chinese government accounting from the perspective of sub-national government debt management, discuss inherent relationship between government accounting and Chinese sub-national government debt in theory.2. Analyze the causes of creation or existence of various sub-national government debt, debt status and problems in the debt management more comprehensively and systematically.3. Combine past and present situations about the recognition, measurement and reporting of sub-national government debt more comprehensively and systematically for the first time. Analyze major problems and causes of the recognition, measurement and reporting of sub-national government debt in Chinese current government accounting thoroughly, as well as the impact on sub-national government debt management. Among them, this research conducts a comprehensive, in-depth analysis of the problems that related information which sub-national government borrow debts through the "local government financing platform" is not recorded and reported in current government accounting.4. Propose relevant orders and objectives of Chinese government accounting reform from the actual conditions in China.5. Present a general idea of reforming and improving the recognition, measurement and reporting of sub-national government debt in Chinese government accounting systematically and comprehensively; design specific operational programs of recognition and measurement of various sub-national government debts; outline a general framework of sub-national government debt report system and design the concrete operation schemes. These can provide references for the government accounting and debt management in theory and practice.