The Development of Standards for Governmental Accounting

Date of Submission


Document Type


Degree Name

Master of Science in Accounting




Michael J. Rolleri


Finance, Public--United States--Accounting

Call No. at the Univ. of New Haven Library

AS 36 .N29 Acc. 1986 no.6


Governmental accounting has lagged way behind financial accounting in the development of standards. Long considered "the neglected stepchild"of the profession it has only begun to receive the attention that is its due during the past fifteen years. Governmental entities have long held a significant place in the nation's economic life. By the late 1970's state and local governments employed over twelve million people. In 1978 alone they issued $50 billion worth of bonds and other debt securities and had expenditures of more than $200 billion. This represented almost 11 percent of the gross national product.

Increasing numbers of people with diverse information needs now have a vested interest in the financial status of state and local government. If the financial information provided is to be useful it must be in a standard, uniform format. Developing acceptable standards is the first major problem and is being addressed by the newly created Governmental Accounting Standards Board (GASB). The second problem is enforcement. State and local governments enjoy a degree of autonomy that precludes the creation of an outside standard setting authority. Mandates can only come via the legislative process which is often lengthy and geared to compromise rather than objectivity. It is to be hoped that, with the creation of the GASB, standards will be developed which will be acceptable to enough of those involved in government finance and accounting for them to voluntarily implement standards. Enough pressures currently exist to encourage an increasing degree of acceptance and compliance.