Accounting

Opinion on the Article Beyond the Numbers
In his article Ken Schermann has spoken in great favor of Statement 34 which is a Governmental Accounting Standard. Statement 34 emphasizes the importance of management reporting as part of the financial reporting for government organizations.

As mentioned in the article, Statement 34 mentions eight different areas which should be incorporated in a managements discussion and analysis. These areas add considerable value to the information being provided to the reader of it for instance comparison of totals in financial statements of the current year with the previous year along with valid explanations will enable to user to properly understand the reason behind any decrease or increase.

The explanation provided by Ken in the case of a government system legally adopting a budget is quite valid since the rationale behind this explanation is to help readers overcome any ambiguity they might come across when dealing with the budget information in the financial statements.

Explanation of any material activity in capital assets or long term liabilities is essential since these areas are of grave concern to the users. Users are very much interested in the leverage an entity is facing or an increase in its non-current assets which reflect initiatives towards progress or growth.

Ken has rightly pointed out that the information provided should not only mention what happened but also determine the course of the future as a result of those activities, probably because this will provide the readers of the MDA an appropriate direction of where the organization is heading to.

Furthermore, the proposition of the Chief Financial Officer (CFO) behind the writing of MDA is well place since heshe is the one with the requisite financial knowledge of a government system. However whether the CFO will be able to present it in a manner which is easily readable for even a college student is questionable (Schermann, n.d.).