In the recording of costs of general capital assets, a certain city finance officer instructed the staff:
a) To ignore items costing under $5,000.
b) To ignore all special assessment costs for street paving, curbs, gutters, and sidewalks.
c) To ignore all assets acquired under lease agreements.
For each of the three practices listed above, state whether you believe the practice is in conformity with generally accepted accounting principles. Defend your answers.© BrainMass Inc. brainmass.com March 5, 2021, 12:47 am ad1c9bdddf
From the position of ethics, integrity, and sound business practices, none of this makes sense. It completely lacks transparency, and provides a false sense of the state of the city form a budget and taxpayer standpoint.
A) To ignore costs less than $5000 could potentially skew the budget and recognition of payments by many thousands of dollars, (depending upon how many items under $5000 we are ignoring). Neither is it an acceptable accounting practice to ignore expenses ...
Transparency in government operations is paramount when budgeting and reporting fiscal responsibility to taxpayers. This is a review of factors and an example of how this transparency should work in a real life scenario.