A Research On Local Government Debt And Government Accounting Reform

With the rapid growth of our economy, a growing phenomenon drew us attention: localgovernment debt default crisis appeared repeatedly. In order to develop local economy andchange the appearance of city, local government raised funds by borrowing from bank andissuing local bonds. It formed lots of local government debt. In process of keeping localeconomic development, funds of local government debt played a positive role and made greatcontributions to local construction. However, with the constant growth of local governmentdebt, some local government debt scale has exceeded the ability of local finance, whichhidden huge fiscal risk and financial risk. The national audit office issued No.35announcement in2011，it shows that by the end of2010, the local government debt reachedas high as10.717491trillion yuan. Local government debt management has become animportant task in economy.Information of local government debt should be provided mainly by governmentaccounting. But there are many problems about local government debt accounting, it can notprovide the required information of local government debt management, and restrict localgovernment debt management in our country. Therefore, the situation of our localgovernment debt objectively asks for reforming our government accounting.Based on the above background, this dissertation researches local government debtproblems and government accounting reform together. This dissertation references theexperience of United States’ government accounting, and proposes some possible paths ofour government accounting system reform. It mainly includes structuring governmentaccounting system, establishing fund accounting, and establishing local government debtreport system.