Academic journal article The Government Accountants Journal

The Governmental Accounting Standards Board's Reporting Model: A User's Perspective

Academic journal article The Government Accountants Journal

The Governmental Accounting Standards Board's Reporting Model: A User's Perspective

Article excerpt

The Winter 1997 issue of The Government Accountants Journal contained an article by Pete Rose reviewing the proposed reporting model for state and local governments, produced courtesy of the Governmental Accounting Standards Board (GASB or the board). The article provided a brief history of the proposal, several possible directions the board might proceed and the author's personal opinions on what the new model should contain.

One of the fundamental points of the article was the "lack of consensus within the state and local government community" on what the new model should be and how this diversity of opinion may allow the board "to be in a position to do pretty much as it pleases..." However, I noticed that there was little discussion about what the accounting profession's customers, namely the users, think about the proposed model.

Mr. Rose-along with many others that have written responses to the GASB regarding its various due process documents for the reporting model projectmakes certain claims about what users' needs are. Many times these are personal opinions about what users do and do not want to see in financial reports and are not as objective as they could be. Understandably, Mr. Rose's opinions appear to be based on the likes and dislikes of the legislators he deals with. However, GASB considers "users" to include a much broader audience than just elected officals. For the last several years, the board has attempted to collect opinions directly from selected groups of users of governmental financial statements via the focus groups it has sponsored. The overall results are that the informational needs that attestors and preparers attribute to users tend to conflict with what the selected groups of users said they wanted. The purpose of this article is to provide the history of some of the focus group evidence and to respond to points raised by Mr. Rose.

focus Groups

Many readers are probably aware that the GASB has been conducting focus group sessions since 1994, using judgmental samples of users and potential users of governmental annual financial statements. For those unaware of this technique, focus groups have been used in the business sector for decades to obtain input from known and potential customers on how to improve existing and proposed new products.

They were also used by the American Institute of Certified Public Accountants (AICPA) in a report on the future of financial reporting, commonly referred to as the Jenkins Committee Report. While statistically meaningful projections should not be made from these sessions, they can and do provide extremely useful suggestions when properly conducted. The standard process starts with the selection of a sample of customers with either a known or expected interest in the product under study. The total sample is assigned into groups of four to 10 individuals. A predetermined set of (generally) open-ended questions is asked in each group session, ideally by a moderator with no personal interest at stake. The group discussion can be directed, with each person asked to offer answers, or spontaneous, with individuals in the group responding as desired, or a combination of both. The standard practice is to promise total confidentiality to the participants so they are not inhibited in any manner in their responses.

The major risks of the technique are that discussions will ramble away from the desired issues and that a minority of the group will dominate the discussion. Both risks can be controlled by proper moderation. The main strength of the technique is the depth of analysis that can be obtained, improving the validity of the responses. For comparison sake, in research using personal interviews, individual participants are asked to answer a set of questions. Participants rarely "back up" to change their answer to a prior question because of something they thought of subsequently In a focus group session, it is common for a participant to change an earlier answer in response to a point made by another group member. …

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