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The one major fiscal area where generally accepted accounting principles and independent accountants have remained rare is in government. Indeed, a century later, most state governments, while often requiring their creatures to adhere to GAAP, do not do so themselves. And the federal government–the largest fiscal entity on earth–still keeps its books in much the same way as it did in the nineteenth century. With no countervailing forces, such as the Wall Street banks and the Stock Exchange, to exert the needed pressure, the “managers” of government–the legislators, governors, and presidents–have been able to put their self-interests ahead of those of the “stockholders”.
The above quote, from author John Steele Gordon in his book “An Empire of Wealth“, written in 2004, pretty fairly describes the way our U.S. governments keep their books, and who benefits from the “loose” accounting found everywhere these days.