Problem
Government organizations and not-for-profit organizations (NPOs) are largely governed by their budgets, not the marketplace. Consequently, the budget, not the financial statements, is the most significant financial document. Nonetheless, most financial reports do not present much detail on the budget.
1. How, in your opinion, can the budget be described as important, but comprise a small component of the governmental financial reports?
2. Do you think the coverage of the budget in the financial statements is adequate? Why?
3. Which stakeholders might be more interested in the budget rather than the financial statements? Why?