- 20 Marks
PSAF – March 2024 – L2 – Q1 – Accrual Basis Challenges and Measurement Objectives
Discuss the challenges in adopting accrual basis accounting and the objectives and bases of measurement in public sector financial reporting.
Question
a) Changing from cash accounting to accrual accounting is necessary to improve financial reporting and transparency in the public sector. However, it is not going to be without systemic and structural challenges.
Required:
i) Explain FIVE (5) challenges involved in adopting Accrual Basis Accounting. (5 marks)
ii) Explain FIVE (5) measures Ghana can put in place to successfully implement Accrual Basis Accounting. (5 marks)
b) Measurement of assets is a very important aspect of financial reporting. Preparers of financial statements should always consider the objective of measurement to ensure that the financial statements provide information that is useful to users for accountability and decision-making purposes.
Required:
i) Explain the objectives of measurement in financial reporting of public sector entities. (4 marks)
ii) Explain FOUR (4) bases of measurement of assets and provide in each situation where it is applied in financial reporting. (6 marks)
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