Reflections on the Theoretical Underpinnings of the General Purpose Financial Reports of Australian Government Departments

Significant agendas of reform have been implemented in the Australian public sector including the adoption of accrual accounting. The public sector general purpose financial reporting model, like the private sector, is grounded in a ?decision-useful? framework. This model is premised on the existence of dependent users who are reliant on general purpose financial reports to make economic decisions. However, there have been doubts cast on the appropriateness of this premise for public sector organisations. This research determines the appropriateness of the model to government departments by empirically identifying users of government department general purpose financial reports and their information requirements. This research uses a survey methodology to directly access users of government department general purpose financial reports. The findings of this research are that general purpose financial reports are used to satisfy accountability needs rather than ?decision-useful? needs. These findings have important implications for policy makers since the choice of an accounting framework has the capacity to affect the information content of reports ? what is reported and how it is measured, and thus have a direct impact on the operations of government.