An objective of business enterprise financial reporting is to provide “information about an enterprise’s performance provided by measures of earnings and its components.” City governments, how-ever, are not concerned with “earnings.”One of the financial reporting objectives cited by the GASB regarding governments is that reporting should show whether current- year revenues were sufficient to pay for current- year services. Based on these objectives, comment on the following assertions:
a. Accrual accounting is not necessary in governmental financial reporting.
b. Financial reporting alone is insufficient for measuring governmental performance; there is also a need for reporting on program efficiency and effectiveness.