Governments are elected through a democratic process to be granted constitutional or devolved rights, powers, and responsibilities. These responsibilities require broad accountability to the public and their elected representatives. Government and their institutions use public resources and may have been given delegated powers and responsibilities that also demand broad accountability to the public.

Public accountability is an overriding feature of public sector entities and ensuring the availability of information to demonstrate such accountability is the primary objective of public sector reporting.

Public accountability typically encompasses:

• A conferred responsibility;
• An obligation to report back on the discharge of that responsibility;
• Monitoring to warrant accountability; and
• Potential sanctions for non-performance.

• Provide service;
• Facilitate resource reallocation; and/or
• Undertake policy development.

The rights and responsibilities of governments provide them with the ability to directly and indirectly affect the economy and society they operate in. The rights and responsibilities may vary by level of government.

Governments can, for example:

• Tax and set fiscal policy;
• Penalize and fine;
• Set monetary policy;
• Make and enforce laws and regulations.

In exchange, governments have the responsibility to, for example:

• Meet their constitutional or devolved duties;
• Set policies to manage the socio-economic issues of the jurisdiction in an efficient, effective, sustainable, and transparent manner through the stewardship and application of the public resources entrusted to them;
• Deliver services and reallocate resources;
• Be accountable for the efficient, effective, sustainable, and transparent stewardship and use of the public resources entrusted to them.

Public sector entities must operate within and illustrate their compliance with legal requirements.

Transparent and public accountability against the policy objectives and policies set out in legislation underlies public sector reporting.

Most governments prepare and make publicly available their financial budgets. The budget documents are often extensively distributed and referenced.

The budget mirrors the financial elements of the government's plans for the forthcoming period. It is the key tool for financial management and control, and is the central component of the process that provides for government and legislative oversight of the financial dimensions of operations.