Whole of government accounts: why bother?
Posted by Christie Malry on November 30, 2011 at 9:27 am
As a chartered accountant, I get a certain excitement that lesser mortals cannot fathom when opening a set of accounts. Accounts are intriguing; they tell a story and sometimes contain secrets if you're smart enough to unravel them.
So, a day after flipping through the audited Whole of Government Accounts, I'm scratching my head trying to work out just what these accounts are for.
There are two main schools of thought when it comes to accounts. The dominant theory, currently preferred by the main standard setters, including IASB and FASB, is that accounts should contain information useful to enable ordinary people to decide whether to buy or sell shares in the reporting entity. The other theory, which has fallen out of favour but still has some high profile advocates, is that accounts should supply information to owners sufficient to allow them to exercise stewardship over their company.
Neither of these really fits WGA. You can't sell your 'shares' in the UK; even selling the closest thing you've got to a share - your vote - is illegal. So the notion of WGA in informing a buy/sell decision is ludicrous. And the accounts are so long and complex that they're very unlikely to factor significantly in individuals' voting decisions in 2015.
There's a further, and worse, problem. These accounts relate to the year to March 2010. That's nearly two years ago, and relates to the previous, Labour government. The qualifications in the auditor's opinion, referred to in yesterday's blog post, cover decisions going back into the previous decade. So how meaningfully are these going to make government more accountable?
It's good that government has made the effort, and that it has tried to follow a stern set of accounting standards. But these accounts do leave one wondering: just what is the point?
Leave a Reply