Tag (SQ): General purpose

(a) Financial reporting is an obligation of every entity; however, “it is not an end in itself but a means to an end.”

Required:

Discuss the statement “it is not an end in itself but a means to an end,” relating it to the objectives of financial reporting in the public sector.

(b) Unity Hospital is a regional public hospital established by an Act of Parliament and operated under the National Health Services. It serves the health needs of the region as a referral hospital. The hospital raises money for its operations from the Government of Unity subvention, user charges, bank facilities, and foreign donors, including the Universal Fund, which always requires customised financial reports on a quarterly basis. Its accounts are audited annually by the Auditor General, who reports findings to Parliament. Due to the critical role of the hospital, the media and civil society organisations pay serious attention to its activities and frequently report on their performance. The hospital also has a very proactive labour union.

Required:

(i) Identify and explain the information needs of four primary users of the financial reports of Unity Hospital.

(ii) Discuss the application of general purpose financial reporting and special purpose financial reporting in Unity Hospital.