Certified Government Financial Manager (CGFM) Practice Exam 2025 – Your All-in-One Guide to Exam Success!

Question: 1 / 875

What is one objective of financial reporting for government entities?

To generate profit

To assist users in evaluating operating results

The objective of financial reporting for government entities is centered around providing relevant information that enables users to evaluate the operating results and financial position of the government. Unlike private-sector entities, which primarily focus on profitability, government financial reporting emphasizes accountability and transparency to the public.

By assisting users in evaluating operating results, financial reporting helps citizens, legislators, and other stakeholders to understand how efficiently and effectively government resources are being used. It provides insights into the financial health of the entity and informs decision-making processes regarding public policies, allocation of resources, and future budgeting. This objective aligns with the overarching principles of public financial management, which prioritize accountability to the public rather than generating profit or soliciting donations.

Get further explanation with Examzify DeepDiveBeta

To maintain transparency with media

To encourage public donations

Next Question

Report this question

Download Certified Government Financial Manager (CGFM) Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy