Government accounting has been viewed historically as a key element in the movement from absolute power, (i.e., the government or a king or emperor) to relative power (i.e., a shared model of government). Under the shared model of government, government accounting was used by a parliament to limit the king's power to (1) spend public money, (2) raise taxes to cover the expenditures, and (3) determine the purpose of the expenditure. The use of governmental accounting remained unchanged during the evolution into modern democratic systems.

Thus government accounting requires the executive to (1) state the amount, nature, and purpose of the planned expenditure and the taxes needed to fund it, (2) ask for and obtain approval from the legislature, and (3) comply with the expenditure authority—that is, appropriation— granted by the legislature and demonstrate such compliance. Under government accounting, the legislature is allowed to steer and control the behavior...