Explain the concepts fiscal and operational accountability and the basis of accounting used to capture each concept.

Fiscal accountability is based on the short-term cash distribution or on the short-term use of government resources; organizational obligations concentrate on effective and productive use of government resources.

Different accounting principles are used to capture these various types of accountability. Fiscal responsibility is achieved by means of the adjusted accrual accounting system where the revenue is recognised in the period measured and available for revenues and expenditures (not expenses) are accepted as needing to be charged out of existing financial capital.

Operational accountability in accounting rules is captured. The emphasis of accrual accounting is on the transfer of economic resources, which allows the identification of revenues and expenses when there is an exchange in economic resources.