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2004 March Report of the Auditor General of Canada Insert 6.1—Accrual accounting-An initiative to improve decision making
2004 March Report of the Auditor General of Canada
March 2004 Report—Chapter 6
Insert 6.1—Accrual accounting—An initiative to improve decision making
Accrual accounting can help improve decision making within departments, for example, as follows:
- Managers increase their focus on the stewardship of assets because all assets are recorded in the financial accounts of the department. Managers become more aware of the assets under their control and the need to consider such issues as maintenance requirements, replacement policies, the identification and disposal of excess assets, risks such as loss caused by theft or damage, and the full impact of assets on service delivery.
- Managers increase their attention to the management of liabilities under their control because existing and potential liabilities are recognized. Managers become more aware of their responsibility for these liabilities and the need to develop plans for managing them, including identifying the impact of existing liabilities on future resources. If liabilities are not recognized, there is less reason for managers to consider certain issues and effectively manage those liabilities.