Journal of Business & Financial Affairs

Financial Management or Accounting: A Theoretical Analysis of the Benefits and Limitations of Developing a ‘True’Financial Management Approach within Government Agencies in Australia

Abstract

Anne C Walters and Vikash Ramiah*

Government financial management has long focused on accountability and transparency as a means of demonstrating the efficient and responsible use of taxpayer funds. Within Australian Government agencies, financial management practices have become increasingly efficient and effective in communicating financial information through financial statements and reports. However, there is considerable anecdotal evidence to suggest that such practices are more appropriately defined as accounting, rather than as financial management. This paper discusses the practices that are currently used by Government agencies, the limitations of this approach, and provides a theoretical look at the potential benefits that financial management approaches provide to Government agencies.