(1) It is the policy of the state of Montana that all governmental accounting systems be established and maintained in accordance with:
(a) generally accepted accounting principles that are nationally recognized as set forth by the governmental accounting standards board or its generally recognized successor; or
(b) a small government financial reporting framework that is defined by the department and derived from the generally accepted accounting principles referenced in subsection (1)(a).
(2) The codifications, pronouncements, and interpretations of the governmental accounting standards board or its generally recognized successor must be recognized as the primary authoritative reference for governmental accounting.