TOPIC: INTRODUCTION TO PUBLIC SECTOR ACCOUNTING BASES OF PUBLIC SECTOR ACCOUNTING, ACCOUNTING CONCEPTS AND REGULATORY FRAMEWORK

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1 ICAN PUBLIC SECTOR ACCOUNTING AND FINANCE SKILLS LEVEL TOPIC: INTRODUCTION TO PUBLIC SECTOR ACCOUNTING BASES OF PUBLIC SECTOR ACCOUNTING, ACCOUNTING CONCEPTS AND REGULATORY FRAMEWORK WEEK ONE QUESTIONS NOV 2016 Kindly go through chapter 1 in the video lecture before you attempt the questions because the topics have been simplified and analyzed for easy understanding STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 1

2 QUESTION 1 1a. Government financial reporting helps to satisfy the information needs of a variety of users. State any TWO principal uses of government financial reports. b. Itemize TWO internal and external Users of public sector accounting information. c. List six accounting concepts usually adopted by public sector accountants d. List FIVE factors hindering the effectiveness of Government accounting system in Nigeria. QUESTION TWO 2a. Outline the Constitutional and Regulatory Framework of Public Sector Accounting. STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 2

3 2b. Public Sector Accounting is governed by the regulatory frameworks such as Nigerian Constitution Outline some specific sections of the 1999 constitution and their specific provisions. 2c. Mention FIVE bodies that come within the umbrella of public sector 3. The following extracts of administration and general expenses are from the books of Rehoboth State Housing Corporation for the year ended 31 st December 2005 =N= Personnel costs 45,721,350 Travelling and Transport 14,040,072 Telephone Services 811,350 Stationery & Printing 3,852,720 Maintenance of Equipment 15,750,000 STARRY GOLD ACADEMY , , Page 3

4 Maintenance of Vehicle & capital assets 22,500,630 Entertainment & Hospitality 1,350,000 Miscellaneous Expenses 2,161,305 Electricity & water 7,410,834 Insurance of Property 1,350,000 Consultancy services 7,560,000 The General Manager is worried about the huge overhead costs and you try to allay his fear on the premise that cash basis was used instead of accrual basis. You explained further that some of the expenses include capital items. The following are the examples highlighted during the discussion: i. Personnel costs include N15,300,000 paid to the Expatriate consultants who were to design low cost housing, using local materials in the first quarter of STARRY GOLD ACADEMY , , Page 4

5 ii. Stocks of stationery : 1/01/ 2005 N810,000; 31/12/2005 N1,512,000 iii. Maintenance of vehicles includes 2 Peugeot 504 Station Wagons purchased at a total cost of N6,375,150 for the use of the consultants who were to design low cost housing. iv. Insurance covers the operation up to 31/03/2006. Based on your explanations above, the General Manager asked you to prepare a revised administration and general expenses cost profile, using the appropriate basis of accounting for the consideration of the Board at the next meeting. You are required to submit this report in a memorandum form. 4. Modified accrual basis of accounting is the alternative to non-acceptance of accrual basis of accounting in government. i. Explain what is meant by modified accrual basis of accounting ii. What factors militate against the acceptance of accrual basis of accounting. STARRY GOLD ACADEMY , , info@starrygoldacademy.com, Page 5

6 iii. Enumerate three (3) other basis upon which financial accounting can be prepared. iv. Mention and explain two concepts that are peculiar to public sector and two concepts that are applicable in both private and public sector. v. ''A Fund is an accounting entity as well as fiscal entity''. Discuss this statement with reference to government accounting principles STARRY GOLD ACADEMY , , Page 6