Public accounting is the branch or modality of accounting focused on the analysis, measurement and economic decision making in public areas. It is common in the State Administration and public companies.
As with its private modality, public accounting is characterized by the deep accounting analysis of a company through which subsequent actions related to decision making are consolidated.
In this way, this economic practice concentrates the accounting responsibility of public bodies and the management of their resources by managers or leaders.
Main purposes of public accounting
As with the role played by accounting in its management facet of private companies , the public modality pursues a series of key objectives:
- To know with great precision the state of the national accounting and the accumulation of existing resources, since it must ensure the correct accounting of the financial statements of the national territory, or of the scope of action of the public companyin particular.
- It allows establishing a calculation between the capital needed to undertake public measures or projects and how many of them are available. In that sense, it should be noted that capital investment is a basic factor to consider in public organizations.
- It will serve as a management element for the Administration or the leaders in charge of existing public companies in various economic sectors, but also as a tool for control and detection of bad practices or corruption.
- At the same time, it must serve as a key element when configuring economic policiesadapted to the needs and nature of the public sphere.
Public accounting as a transversal practice
It is important to emphasize that public accounting work is not only carried out in state settings or administrations in the form of civil servants, for example.
Public accounting can be carried out perfectly by individuals or external economic entities and from the private sector (such as the management of important consultants in tasks of analysis of public accounts or projects of the State).