There is an idea that the financial statements are prepared for the accountants. While the financial statements are prepared by accountants, they are not prepared for accountants.

The financial statements are prepared for those people that have an interest a particular entity. People usually have an interest in another entity because they provided them with money (or other resources) and want to know if that money, or other returns like interest or dividends, will be repaid.

In the public sector, government and its entities receive money from taxpayers, ratepayers, lenders, donors and other governments. There is a wide group of users interested in government’s financial statements. Government provides the infrastructure necessary to provide basic goods and services necessary to operate in a modern society – water, electricity, sanitation, healthcare, education, security and more. Because of the range of people who give money to government and the number of people who rely on government’s services, there are so many people who are interested in government’s financial statements.

So, if the financial statements are prepared for specific people to use, if those people don’t use the financial statements, they are worthless! This why it is so important for us at the ASB to ensure that the information in the financial statements can be used.

Reflecting on the definition of a “user”,  it is a person that operates something, and for us, users ‘operate’ the financial statements. Most importantly though, the legal definition of a user means there is right that is enjoyed. As the ASB we support users’ rights to transparent, credible information about government and its finances. This information enables citizens to ensure (a) there is an equitable allocation of resources across the country, and (b) government delivers on its obligations in law.

The ‘users’ we are targeting in this initiative are citizens, and those who represent citizens in oversight structures such as Parliament, Provincial Legislatures, and Municipal Councils. We hope to provide users with an explanation of the various line items in the financial statements and notes, and this helps citizens hold officials accountable and make financial, policy and other decisions. The financial statements are also an important tool to use, when combined with performance information, to understand what services were provided by government. The financial statements can be a key tool when participating in government’s democratic processes when voting nationally and at a municipal level.