Public Sector Accounting and Finance

In: Business and Management

Submitted By Edwin10
Words 2482
Pages 10
PUBLIC SECTOR ACCOUNTING AND FINANCE

1.0. Introduction:
One of the main distinguishing factors between public and private sector organisations lies in their objectives and sometimes funding structure. While public sector bodies have a more social objective and focus more on the allocation or distribution of public goods and services within the country, private sector bodies have the main objective of increasing the wealth of their shareholders (IFAC, 2011).
However, both private and public sector bodies face similar operational and business challenges brought on by the economic environment and climate. A crucial question therefore is how to account for the activities of private sector bodies and public sector bodies in a way that reflects the operational structure of the organisation and yet their varying objectives (Barton, 2000).
There exist two main schools of thought on the nature of accounting in the public sector, each of which is formulated by the view of the role of the public sector within the economy (Evans, 1995). The traditional method of accounting within public sector organisations has often advocated the use of the cash basis of accounting, with larger emphasis rather placed on compliance with the rules and regulations governing the sector (Wynne, 2003). However, weaknesses in public sector management have brought to the fore the importance of efficiency and hence the adoption of the accrual method of accounting within the public sector.
According to Alexander, Britton and Jorissen (2011), the accrual basis of accounting recognises income and expenditure from transactions at the point of occurrence rather than when the cash for the transactions is either received or paid. On the other hand, the cash basis of accounting is more concerned with when the actual cash is received for the transactions. As such, the divide in opinion in public…...

Similar Documents

Public Sector Accounting

...Introduction to Public Sector Accounting Public sector is the government organizations which are set up to governance the activity of citizens and power to set up the rule to enable the citizens can live with harmony and also help them to resolve the problem more efficiency. Public sector accounting is the information system that records, analysis, classifies, summarizes and communicates public sector entity financial and economic events, and their impacts, in term both which are emphasis in proper accounting maintenance of books and all records, compliance with the related laws, rules and regulations and comprehensive and accurate reports to help the related parties to make decision. (Syed Soffian Syed Ismail, 2011) Private sector is the organizations that are develop by individuals which purpose is to get profit and is not state controlled. The private sector is included all for profit business that is not operating by the government and not more social responsibility. Private sector accounting is consists of three basic activities that is identifying, recording and communication the economic event of a company. That is identify economic event such as transactions and investments, uses bookkeeping to systematic record the economic event and also use the financial statement to present their report to the people who are using that accounting information. (Roslyn Frenz) Differences between Public Sector Accounting and Private Sector Accounting | Public Sector......

Words: 938 - Pages: 4

Public Sector Accounting

...PUBLIC SECTOR ACCOUNTING Assignment 5 ------------------------------------------------- Melina Subastian / 296511 Number 3: Based on five public sector accounting techniques, which one do you prefer as the best to be applied? Explain your answer! First of all, I think it is necessary to observe the five techniques that can be applied in public sector accounting in order to decide which one is the best to be applied. 1. Budget Accounting. This technique presents the budgeted amount and the actual amount recorded in pairs (double entry). 2. Commitment Accounting. This accounting technique recognizes transactions and records them at the time the order was issued. This can be used in conjunction with cash accounting and accrual accounting. 3. Fund Accounting. The technique is performed with the concept of fund. It treats a working unit as an accounting entity and budget entity which stands alone. 4. Cash Accounting. In this technique, revenues are recorded when cash is received, and expenses are recorded when cash is removed. 5. Accrual Accounting. This technique differentiates between cash revenues and rights to earn cash, and cash expenditures and obligations to pay cash. In my opinion, accrual accounting technique is the best technique to use for public sector organizations. In this technique, revenues and expenses are recognized when earned or incurred, regardless of whether cash is received or spent. The use of the accrual basis in the public sector is one...

Words: 619 - Pages: 3

Need of Forensic Accounting Skills in Public Sector

...Forensic accounting may not be a new field in accounting. However it becomes so important recently and has been an interest to various stakeholders, from the government, investors, and practitioners to regulatory bodies. In public sector, the increment in frauds, money laundering, corruptions, illegal or unethical acts and other wrongdoings are the main factors to support the needs of forensic accounting skills in public sector working environment especially in public sector accountants. The need for forensic accountant has been ascribed to the fact that the audit system in an organization had failed to detect certain errors in the system.Demand for Forensic Accountants (FAs) is growing fast because of the use of information technology to commit crimes, growing corruption, and harsh economic times that are making some workers to steal from their employers or assets of organization. In more recent years, Accountants (FAs)who worked in public practice were often called after owners suspected that fraud had been committed.This research is to study the needs of good forensic skills in public sector working environment especially within public sector accountant. | Problem Statement | The public sector constitutes the largest sector of the economy of any nation, It employs the largest population of the labor force and controls the bulk of financial resources of any country. It therefore calls for a proper financial resources management to ensure proper use of......

Words: 1012 - Pages: 5

Public Finance

...Public Finance Methods in Nigeria The Federal Republic of Nigeria is comprised of 36 states located in West Africa geographically bound by the Republic of Niger to the north, the Gulf of Guinea (on the Atlantic Ocean) to the south, the Republic of Cameroon and Chad on the east and Republic of Benin on the west. Since gaining full independence from the British in 1960, Nigeria has gone from a Parliamentary system of government (modeled after the British Parliament), the Biafran Civil War, and numerous dictatorships to the current Democratic system of government. Widely described as the most populous country in Africa (accounting for over half of West Africa’s population alone[i]), the US State Department estimated in 2010 a population of approximately 152 million people of 250 Ethnic groups with the largest ethnic groups comprising of Hausa-Fulani (north), Igbo (south-east), Yoruba (south-west) and Kanuri (north). The religions practiced in Nigeria are Islam, Christianity and indigenous African traditional worship. The Hausa’s are from the northern part of the country and are predominantly Muslims, the Yoruba are from the south west and are predominately an even mix of Christians and Muslims, the Igbos are from the southeast and are predominately Christians. The official language of Nigeria is English in addition to other local dialects. Nigeria’s commercial capital (and former political capital), Lagos, is located in the southwestern part of the country while the......

Words: 2474 - Pages: 10

Source of Finance for Public Sector

...Source of finance for public sector organistaion 1.direct changes of services Postal services such as selling stamps,savings and traavel insurance 2.government govt school and hospitals get financial support from the central govt funded from the tax revenue of the govt 3.donations Sources of finance for business strategy 1.purpose of finance Short term (improving working capital /day today running)-overdraft Longer term (buying expensive equipments or replacement of fixed assets –hire purchases 2.costs-consider not only purchase cost but also associated cost such as administative charges service and maintanance charges and short and long term consideration of interest rates.managers also have to bear in mind the opportunity cost of their final choice 3.amount required Large amount:issue shares,secured loans firm financial institution Small amount:overdraft 4.time Long period (for purchase of new buildings) -mortgages as debentures Short term :trade credit 5.stages and size of the firm A well known and large mnc will find it much easier to raise finance from a wider range of sources than a sole trader.in addition large organization are able to obtain finance cheaper due to financial economies of scale 6.financial situation of a firm poor cashflow makes it difficult for the firm to raise finance as they represent a higher risk to investor and landers.landers will assess their gearing (longterm external borrowing as a percentage to capital......

Words: 260 - Pages: 2

Sector Public Accounting

...Manajemen harus bersifat proaktif dalam melakukan penghematan biaya 4. Keseriusan manajemen puncak (top manager) merupakan penentu efektifitas program pengurangan biaya karena pada dasarnya manajemen biaya strategik merupakan tone form the top * Cost reporting. Tahap terakhir adalah memeberikan informasi baiay secara lengkap kepada pimpinan dalam bentuk internal report yang kemudian diintegrasikan ke dalam suatu laporan yang akan disampaikan kepada pihak eksternal. Informasi manajemen hendaknya dapat mendeteksi adanya pemborosan yanbg masih berpotensi untuk diefisiensikan serta mencari metode atau teknik untuk penghematan biaya. Akuntansi manajemen hendaknya dapat mendukung dan memperkuat pelaksanaan prinsip value for money dan public accountability organisasi sektor publik Penilaian Investasi Akuntansi manajemen dibutuhkan pada saat organisasi sektor publik handak melakukan investasi, yaitu untuk menilai kelayakan investasi secara ekonomi dan finansial. Akuntansi manajemen diperlukan dalam penilaian investasi karena untuk dapat menilai investasi diperlukan identifikasi baiya, resiko dan manfaat atau keuntungan dari suatu investasi. Dalam penilaian suatu investasi, faktor yang harus fdiperhatikan oleh akuntansi manajemen adalah tingkat diskonto, tingkat inflasi, tingkat resiko dan ketidakpastian serta sumber pendanaan untuk investasi yang akan dilakukan. Penilaian invesatasi pada organisasi sektor publik dilakukan dengan menggunakan analisis biaya – manfaat (cost......

Words: 7945 - Pages: 32

Abc in the Public Sector

...Activity Based Costing in the Public Sector By: Brandy Medina Public sector organizations at all levels and of all types are facing intense pressure to do more with less. Governments at all levels in almost all the countries in the world are feeling some kind of pressure. The pressure on spending comes from many sources, i.e. from politicians aiming to win taxpayers’ approval. There is pressure from the competition with other cities to attract homebuyers or with other counties, states or nations to attract businesses. In the United States, the cities don’t just compete against other cities – each city competes against its own suburbs, and the suburbs often have an advantage in attracting residents and businesses. They may offer lower taxes, better schools and less crime. As residents and businesses relocate, the cities and towns they departed from lose a little more of their tax base. Less money is available unless tax rates are raised. Additional pressure may come from declining demand, regardless of the reasons. An example is rural road maintenance. In these cases, economies of scale are less easily achieved, and the final costs become more expensive. In the United States, the federal government is shifting some responsibilities to state and local governments but providing only limited funding to fulfill those obligations. Regardless of where the pressure is coming from, the message is: better, faster, cheaper – hold the line on taxes, but don’t let service slip.......

Words: 4153 - Pages: 17

Elements of a Theoretical Framework for Public Sector Accounting

...Framework for Public Sector Accounting............................................................ 1 16 September 2014 ii ProQuest 第 1 个文档,共 1 个 Elements of a Theoretical Framework for Public Sector Accounting ProQuest 文档链接 摘要: The development of a concept of community assets (used to describe government-managed assets of an infrastructural, cultural, or environmental nature) can contribute to the development of a new theoretical framework for public sector accounting and potentially for private sector accounting as well. An important feature of this framework is that recognition of assets based on common property alongside private property lends greater visibility to the communitarian perspective, with its emphasis on shared values and common life, and to social as well as technical concerns. In addition, by distinguishing what management can control from what they cannot control, a concept of community assets as distinct from ordinary fixed assets could permit a fairer system of accountability and clarify the controversial issues of depreciation in the public sector. 链接: Check local library holdings 全文文献: Despite the ancient origins of governmental accounting (Normanton, 1966; Chatfield, 1974) and the size and significance of governmental activity in modern times, the subject was, until recently, ignored by academics and practitioners alike. After a period of unwarranted neglect (see Perrin, 1981), the 1980s witnessed an upsurge of interest in public sector......

Words: 10977 - Pages: 44

Public Sector Auditing

... UNIVERSITY FOR DEVELOPMENT STUDIES SCHOOL OF BUSINESS AND LAW DEPARTMENT MANAGEMENT AND ADMINISTRATION COURSE CODE: IBS 411 COURSE: PUBLIC SECTOR ACCOUNTING GROUP 10 28TH NOVERMBER, 2014 GROUP 10 ID NUMBER SIGNATURE IBS/1562/11 ………………………. IBS/1528/11 ………………………. IBS/1593/11 ………………………. IBS/1552/11 ………………………. IBS/1538/11 ………………………. IBS/1487/11 ………………………. IBS/1592/11 ………………………. IBS/1450/11 ………………………. IBS/1550/11 ………………………. IBS/1460/11 ………………………. IBS/1595/11 ……………………… IBS/1586/11 ……………………… IBS/1467/11 ……………………… Question 1 Evaluate the steps in the preparation of a local government budget. The term budget is derived from the French word "Budgette" which means a "leather bag" or a "wallet". In simple terms, budget shows the income and expenditure of government or an organization for a specified period. Budgeting on the other hand is the process of preparing a budget. An annual budget, sometimes referred to as the operating budget, is the document that details the financial plan of the local government or school district for a fiscal year. The annual budget is perhaps an entity’s most vital......

Words: 1253 - Pages: 6

Public Sector Information System

...Identify three things that you found important in Public-Sector Information Systems and briefly explain why they are important. Answer: Upon study and research there are a number of things which I found very important and fundamental to the Public-Sector Information Systems. 1. The Human Dimension: The Information Technology and Human Knowledge go hand-in-hand and the connection, correlation and the interdependence between the two will lead to improved learning, better decision making, and stronger problem solving skills. Adding the human dimension will make the Public Sector Information Systems truly the people oriented services. 2. Build Organization Resource: Understand the data, draw related information and realize the true benefits by converting it to an organization resource. Distinguishing properly between the Transaction Processing Systems & DSS and treat information accordingly. 3. Distinguish Information: Understand the information, derive the knowledge and distinguish between the structured and the unstructured knowledge. Segregate the concrete information from the abstract and irrelevant information. At the same time it is also very important to ensure ethical use of information. 4. Technological know-how: Collecting and understanding data and deriving information is one aspect of Information System Management. Alongside it is also very important to be technically skilled enough (using IT languages or using the Data Management Tools) to communicate......

Words: 1049 - Pages: 5

Abc in Public Sector

...4, 2014 Emmanuel K. Oseifuah (South Africa) Activity based costing (ABC) in the public sector: benefits and challenges Abstract Peter Drucker (1986), in “Management: Tasks, responsibilities, and practices” states that business enterprises and public-service institutions, are organs of society which do not exist for their own sake, but to fulfil a specific social purpose and to satisfy need of society, community, or individual. To achieve the above objectives, managers of these institutions must plan, control and make decisions about the resources entrusted to their care. A key element of efficient organizational decision making is to use reliable information, both operational and managerial accounting data for analysis and decision support. This can be achieved by using activity-based costing (ABC) method. The underlying premise of ABC is that resources are consumed by activities to produce outputs or products and services (US General Services Administration, 2006). It focuses on the allocation of indirect costs to products and services, which was traditionally done on arbitrary basis. ABC is useful in two situations: areas with large and growing indirect and support costs (Krumwiede, 1998a; Becker, Bergener and Räckers, 2010), and areas with a large variety in products, customers and processes (Cooper, 1988a, 1988b; Groot, 1999). The unique characteristic of public sector organizations as overhead-intensive service entities, therefore, is amenable to the......

Words: 5188 - Pages: 21

Public Finance

...PUBLIC FINANCIAL MANAGEMENT AND CONTROL LAW FIRST PART General Provisions FIRST SECTION Purpose, Scope and Definitions Purpose Article 1- The purpose of this Law is to regulate the structure and functioning of the public financial management, the preparation and implementation of the public budgets, the accounting and reporting of all financial transactions, and financial control in line with the politics and objectives covered in the development plans and programs, in order to ensure accountability, transparency and the effective, economic and efficient collection and utilization of public resources. Scope Article 2- This Law covers the financial management and control of public administrations within the scope of general government, encompassing public administrations within the scope of central government, social security institutions, and local administrations. Without prejudice to the provisions of international agreements, the utilization and control of European Union funds and domestic and foreign resources allocated to public administrations shall be subject to the provisions of this Law. (Amendment: 22.12.2005 - 5436/10-b art.) Regulatory and supervisory agencies are subject only to the Articles 3, 7, 8, 12, 15, 17, 18, 19, 25, 42, 43, 44, 47, 48, 49, 50, 51, 52, 53, 54, 68 and 76, 78 of this Law. Definitions Article 3- Particularly, in the enforcement of this Law; a) Public administrations within the......

Words: 19492 - Pages: 78

Public Sector

...The old debate on the public versus the private sector— which one of the two is better for the growth of Indian economy—has been long alive. It has assumed increased importance with India’s recent impressive performance in all fields—from IT to computer software, from telecommunications to health, from generation of energy to manufacturing of industrial goods. While the popular belief is that most of the public sector undertakings are white elephants—a drain on the Indian economy, the fact remains that many public sector undertakings, mainly in the field of telecommunications and petroleum and gas explorations such as the Bharat Sanchar Nigam and the National Thermal Power Corporation, have outperformed most of the private sector undertakings in the same fields and registered more profits than them.In telecommunications, the Bharat Sanchar Nigam continues to lead from the front leaving many big and reputed private players such as Bharti Mobile, Bharti Telenet, BTA Cellcom, Escotel Mobile Communication, Tata Internet Services and Hutchison Telecom East far behind. Where the private players have even made losses, the Bharat Sanchar Nigam has made huge profits. In the banking sector, too, public sector undertakings remain far ahead vis-a-vis most of the private players in the business. In the finance sector, predominantly banking, public sector undertakings have accounted hugely for the aggregate net profits compared to private sector undertakings. The situation......

Words: 806 - Pages: 4

Public Sector Accounting

...quality of public sector financial information? • Should we improve public sector reporting? 4 Presentation outline… Quality of reporting - Africa IPSAS…why, what , adoption Role of the Profession Zimbabwe Conclusion Quality of financial information in Africa… PFM …. Key dimensions per PEFA Budget credibility Comprehensiv eness and transparency Policy-based budgeting Six critical dimensions of PFM system performance Effective audit and External scrutiny Accounting, recording and reporting Control and stewardship in budget execution 7 PEFA Assessments results..Africa (Oct 09) Link to economic growth… 8 PEFA overall results… Significant variability in average scores. Africa Region PEFA Scores (October 2009 data) 3.50 3.00 2.50 2.00 1.50 1.00 0.50 9 What about financial reporting? PEFA – Accounting Performance Indicators Indicator Description P1 22 Timeliness and regularity of accounts reconciliations P1 24 Quality and timeliness of in-year budget reports P1 25 Quality and timeliness of annual financial statements P 1 26 Scope, nature and follow up of external audit 10 c. Performance in other areas External audit time, standards, AG issues Size of reports Completeness of information: standards 11 So, what should we do? …adopt IPSAS International Public Sector Accounting Standards Board (IPSASB) Objective: ..high-quality public......

Words: 767 - Pages: 4

Public Finance

...ASSIGNMENT OF PUBLIC FINANCE ON The importance of broadening the Income Tax Base SUBMITTED TO Tanvir M H Arif, MIBM (UWL/TVU, UK); MBA (CU, BD) Assistant Professor, Department of Finance and Banking. University of Chittagong, Chittagong, Bangladesh. Ex-Asst. Professor, FBA, USTC ; Ex-Lecturer, AUB, Dhaka. And CEO, Corporate Trainer and Consultant (CTC), Chittagong, Bangladesh. UK Experiences: Adjunct Faculty of BRIT College, London Ambassador College and Nelson College. SUBMITTED BY GROUP D Group Profile| SERIAL NO.|NAME DETAILS|CLASS ID|E-MAIL ID| 01|SHAMIN JAHAN SHAWN|09303020|shahjahanh53@gmail.com[->0]| 02|JEWEL SHIL|09303036|takenfromlife@ymail.com[->1]| 03|TAMA SAHA|09303050|tama_cu@yahoo.com[->2]| 04|KUSHUM AKTER SOMA|09303056|Kushumsoma@yahoo.com[->3]| 05|DIPA BARUA|09303060|| 06|SHAMIM AKTHER|09303063|Shamim_cufb_17@yahoo.com| 07|HERO AKTER|09303085|hiruakter@gmail.com[->4]| 08| K. A.M. ATAUL ISLAM|09303111|hassanmrhridoy@ gmail.com| 09|MOHAMMAD JAMIR UDDIN |09303113|Jamir_cu@yahoo.com[->5]| 10|MEJBAH UDDIN AHMED|09303118|mejbah118@gmail.com[->6]| 11|BIBI JOYNUB CHOWDHURANI|09303126|| CONTENTS Chapter -1| Introductory Part| 1.1 Introduction1.2 Aims and Scope of the study1.3 Methodology of the study1.4 Vision of the study1.5 Limitations of the study| Chapter -2| Income Tax Background| 2.1 History of Income Tax2.2 Importance of Income Tax2.3 Drawback of Income Tax| Chapter -3| Tax...

Words: 13801 - Pages: 56

Lieqi (25) | The Guardian APK Modded | Bailey Knox: Fucked The DJ Video