Abstract

This study examines the conceptual framework for financial reporting by public sector entities which was developed and approved by the International Public Sector Accounting Standards Board(IPSASB), and compares it with the provisions for financial reports of Korea government. We find that important concepts in IPSASB’s conceptual framework also exist in the provisions for financial reports of Korea government. However, the basis for conclusion or recommended practice guideline are not identified because of the inherent attribute of legal system. Regarding this, this study makes the following suggestion in order to adopt the conceptual framework for financial reporting by public sector entities. First, it needs to identify the users of government financial report. And then, the objective and scope of financial reporting should be determined by information needs of these users. Second, it needs to outline the desired qualitative characteristic of information included in government financial report to provide structure and direction to financial accounting and reporting. Third, while benchmarking the IPSASB’s conceptual framework, unique government policy and practice of Korea should be considered. Firth, communication of the conceptual framework to information users would be key for success of the plan. Fifth, it needs to set out the concepts applicable to the presentation of footnote in government financial reports. Finally, the basis for conclusion or recommended practice guideline should be included. Government can serve the public interest by setting high－quality accounting standards and facilitating the implementation of these. In meeting this objective, This study suggests that it needs to adopt the conceptual framework for financial reporting by public sector entities, and makes practical suggestion. We expect that this study can contribute to the literature and practice by providing useful implication for enhancing the quality of government financial reporting.

Keywords

• Government financial reporting
• Conceptual framework
• Financial reporting by public sector entities
• International public sector accounting standards

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