Chapter 16, Problem 1Q

To determine

Explain how users get impacted with the development of accounting principles for state and local government units.

Explanation of Solution

There is a contradictory and complex way to get information about local or state government by any groups or individuals. There are mainly three user groups identified as:

• Oversight and legislative bodies
• citizens and
• Creditors and investors.

All expectations of these users are not satisfied with single accounting principles and financial statements. Governmental accounting mainly focus on diverse users, in other words satisfy needs of diverse users is the major challenge.