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    Private management differs from public management in its goals, accounting practices, and focus on owners and shareholders. It uses budgets to forecast revenues and expenses to estimate profit, aims to reduce costs and increase revenue to maximize profit, and follows generally accepted accounting principles governing financial statements. Both private and public sectors require auditing to verify accurate financial reporting, though private audits focus on profitability and stability while public audits ensure accurate expense portrayal.

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    Private management differs from public management in its goals, accounting practices, and focus on owners and shareholders. It uses budgets to forecast revenues and expenses to estimate profit, aims to reduce costs and increase revenue to maximize profit, and follows generally accepted accounting principles governing financial statements. Both private and public sectors require auditing to verify accurate financial reporting, though private audits focus on profitability and stability while public audits ensure accurate expense portrayal.

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    12 views2 pages

    As Compared To Public Management, Private Management Has

    Uploaded by

    IGnatiusMarieN.Layoso
    Private management differs from public management in its goals, accounting practices, and focus on owners and shareholders. It uses budgets to forecast revenues and expenses to estimate profit, aims to reduce costs and increase revenue to maximize profit, and follows generally accepted accounting principles governing financial statements. Both private and public sectors require auditing to verify accurate financial reporting, though private audits focus on profitability and stability while public audits ensure accurate expense portrayal.

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    of 2

    Financial Management (Ed M 609)

    Instructor Erwin G. Tiberio, PhD


    Reporters Ignatius Marie N. Layoso and Herjean D. Pagdato

    Private Management

    as compared to public management, private management has

    • Different goals
    • Follow different accounting practices

    • Targets the areas of concerns for company owners and shareholders

    Planning

    • private sector uses budgets to predict operating results

    (public sector budget matches expenditures on mandated assets and services with
    receipts of public money such as taxes and fees. If a public sector budget doesn't balance,
    you have to cut services, raise taxes or borrow the difference.)

    • it forecasts revenues and expenses to estimate how much profit the company will
    make

    (If your profit is too low, you can cut costs or increase the marketing budget and predict
    higher sales.)

    Objective

    - to reduce costs and increase revenue to maximize profit


    (Financial success is spending the amount authorized in the budget to provide the projected
    services. The objective is to meet the budgeted numbers.)

    Success is to exceed the profit forecast

    Accounting

    - it follows generally accepted accounting principles that govern how assets and
    liabilities are shown in the balance sheet of the company.
    (The emphasis is on determining how much profit the company has made and how
    financially stable it is.)

    Audit

    Both public- and private-sector organizations require auditing to verify the accuracy of
    their financial management. Public government organizations are audited by the government
    office responsible for the verification of government accounts. Other public agencies and
    private-sector organizations may provide financial statements audited by accounting
    professionals or accounting companies licensed to carry out this work.

    Private corporations have to prepare annual audited financial statements for their
    shareholders. While the auditing process is similar for the public and private sectors, the material
    audited differs, because public-sector audits establish that expenses are accurately portrayed,
    while private-sector audits show that the profitability and financial stability of a company are
    presented correctly.

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