Discussion On The Structuring Of Conceptual Framework For Governmental Financial Accounting

On February 15,2006, Ministry of Finance issued a series of integrated,coherent and harmonious new corporation accounting standard. This is the third and the most important milestone of our accounting reform. However, the reform of the governmental accounting, unlike the successful corporation accounting reform, is sluggish, and need to be processed as following focus of our accounting reform.There were some disunity about concept and inconsistent logic in the former process to constitute the corporation accounting standard due to lack of Conceptual Framework for Financial Accounting. According to this, we must to adequately study the governmental accounting theory first, then direct our governmental accounting reform practice rightly only if we apprehend inside out the theory. In the stepwise process of our governmental accounting reform, we must learn a lesson from corporation accounting standard reform and refer to the international experience, basing on governmental financial accounting objectives, to structure a Conceptual Framework for Governmental Financial Accounting and direct the construction and implementation of governmental accounting standard.Base on this cognition, this paper discusses on the constitution of Governmental Financial Accounting Framework in order to provide academic sustain by structuring our Conceptual Framework for Governmental Financial Accounting.The paper uses canonical disquisitive methods such as logic analytical method, historical analytical method, induction method, deductive method, and comparative analytical method. Taking new public management theory, public financial theory, public accountability theory as theoretical fundation, this paper constructed our Conceptual Framework for Governmental Financial Accounting by referring to international advanced experience and integrating particular situation of our country.This paper firstly reviews the disquisitive state of Conceptual Framework for Governmental Financial Accounting study internationally. It shows that there are some conceptual cognitive mistakes in our Conceptual Framework for Governmental Financial Accounting, and this was derived from unscientific and unsound governmental accounting system.The current governmental accounting system, is constructed according to implementation of budgetary funds and organization classification, It includes financial general budgetary accounting, administrative unit accounting, enterprise unit accounting and some budgetary accounting embranchment. This leads to problems for chaos in our current governmental accounting system, budgetary accounting unconformity, lack of systemic and integrated governmental accounting expense information, and lack of internal management accounting etc. Therefore, this paper put forward that we must accordingly construct the system based on governmental accounting essence and function, seting up governmental financial accounting, introducing governmental cost accounting and governmental management accounting, optimizeing governmental financial management system and governmental audit system. Budgetary accounting, to some extent, is governmental financial accounting special lateral content. It’s objective is to strengthen budget management and control, but to reflect governmental financial condition. Since it lies on the speciality of government’ function, budgetary accounting should separate from governmental financial accounting in governmental accounting system. Correspondingly, we should aim at budgetary accounting particularity while studying Conceptual Framework for Governmental Financial Accounting, not intermixing it in ecumenic governmental financial accounting, in this way we can clarify universality and consider particularity.Base on that, this paper put forward that our governmental financial accounting objectives should include budgetary accounting objectives and general governmental financial accounting objectives, and should be build up by stages for different accounting basis and functions. Take the objectives as guide, we should respectively define account entity and report entity in terms of achieving financial accountability, effectively controlling budget, enhancing government financial resource management, and improving government efficiency. On one hand, in order to ensure budgetary capital to achieve special funds for special purpose and to restrict budget ,we should inextenso count and supervise each budget according to expenditure cycle by applying fund accounting mode and take each type of fund as accounting entity and report entity; on the other hand, we need take each level of governments as financial report entity to disclose financial information on governmental financial condition and operating situation etc. The accounting information quality is the precondition to ensure the realization. of accounting objectives, This paper constructed governmental financial accounting qualitative information system by using for reference of corporation financial accounting and integrating governmental particularity. Governmental accounting elements and objects should also submit to accounting objectives. This paper define governmental budget accounting objects as budget fund movements, including four mutual coherent phases that is appropriation, commitment, verification and payment. Corresponding budgetary accounting elements comprises appropriate funds, payout obligation, accrual expenditure and cash payout. But the objects of general governmental financial accounting which reflects governmental financial coditions and operating situations should refer to certain fund movement or value movement in the course of governmental activity. On cash basis, the corresponding accounting elements should comprise cash recievement, cash payment and cash balance. On accrual basis the accounting elements should include five elements which are assets, liabilities, net asset, revenue and expense. Governmental financial reporting system is the most direct mean and mode to attain governmental financial accounting objectives. Our governmental financial accounting should adequately use for reference duplicate angle report model adopted in American governmental accounting. Governmental budget accounting should establish governmental fund accounting mode base on cash basis and offer self-governed governmental fund accounting reporting system. and for general governmental financial accounting, we should provide governmental lay ecumenic governmental financial accounting report forms system basing on modificatory accrual basis or accrual basis and non-financial information such as report forms annotations and administrative management discussion and analyse etc in the same time, consequently to realize governmental financial accounting objectives.