Tag (SQ): Public Sector Accounting
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+ past questions and counting.
- 20 Marks
PSAF – L2 – Q11.1- Preparation and Presentation of Financial Statements for Central Government
Prepare 2023 financial performance statement for Republic of Zamara Consolidated Fund.
Question
(a) Prepare the Republic of Zamara Consolidated Fund Account: Statement of financial performance for the year ended 31st December 2023.
(b) Prepare the Republic of Zamara Consolidated Fund Account: Statement of financial position as at 31st December 2023.
(c) Prepare the Kwevadum District Assembly: Statement of financial performance for the year ended 31st December 2024.
(d) Prepare the Kwevadum District Assembly: Statement of financial position as at 31st December 2024.
(e)Prepare the Kwevadum District Assembly: Statement of changes in net assets for the year ended 31st December 2024.
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- 16 Marks
PSAF- L2 – Q10.4 – International Public Sector Accounting Standards
Determine recoverable amount of three intangible assets for Nandom Technical University.
Question
The following information relates to three intangible assets in respect of Nandom Technical University.
| Brands (GHC) | Software (GHC) | Trade Marks (GHC) | |
|---|---|---|---|
| Carrying amount | 200,000 | 300,000 | 240,000 |
| Net realisable value | 220,000 | 250,000 | 200,000 |
| Value in use | 240,000 | 260,000 | 180,000 |
Required:
(a) What is the recoverable amount of each asset?
(b) Calculate the impairment provision for each of the assets.
(c) Explain the treatment of impairment losses.
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- 10 Marks
PSAF – L2 – Q10.3 – International public sector accounting standards
Account for the treatment of a property reclassified as investment property in 2024 financial statements of the National Retirement Oversight Agency.
Question
The National Retirement Oversight Agency acquired a property on 1 January 2021 at a cost of GHc40,000,000 and immediately occupied it as office premise. On acquisition, it was estimated to have a useful life of 50 years. Subsequent to its acquisition, the asset was measured at depreciated cost until 1 October 2024 when management decided to use the building mainly for rentals. Following this decision, the property was fair valued at GHc38,000,000. The National Retirement Oversight Agency adopted the fair value model for subsequent measurement. At 31 December 2024, it was fair valued at GHc39,000,000.
Required:
Account for the treatment of this property in the 2024 financial statements of The National Retirement Oversight Agency.
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- 10 Marks
PSAF – L2 – Q10.2 – International public sector accounting standards
Prepare financial statement extracts for a new technology acquisition by the Office of Business Registry for 2023 and 2024, considering delayed deployment.
Question
The Office of Business Registry has successfully acquired a new technology that will transform the landscape of business registration in the Republic of Zamara and make the Republic of Zamara a preferred destination for business.
The cost of the technology is GHc375 million. Professional advisers charged GHc5 million for providing advice in the acquisition of the technology which was estimated to have a useful life of 20 years effective from 1 January 2023.
Delay for the construction of the supporting infrastructure meant that the new technology could not be deployed until 1 January 2024.
Required:
Show extracts of the financial statements of the Office of Business Registry for the years ending 31st December 2023 and 2024.
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- 20 Marks
PSAF – L2 – Q5.3 – Public Expenditure and Financial Accountability
Discuss how professional skepticism and judgement assist in evaluating a hospital's operations for resource misuse and poor procurement.
Question
You have been appointed as an independent assessor to evaluate the operations of a major regional hospital, which has recently been in the news for significant misuse of resources and poor procurement practices.
Required:
Discuss how professional skepticism and judgement assist in the assignment in the hospital.
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- 20 Marks
PSAF – L2 – Q5.2- Ethical Principles in Public Sector Accounting
Discuss breach of confidentiality by an audit officer sharing audit evidence on a messaging group.
Question
(A) You are a Junior Internal Audit Officer of a regulated entity, and you have conducted an internal audit of some sensitive operations of the entity. The audit covers allowances and bonuses paid or due for payment to the Council Chairperson and other members of the board of governors, including the Managing Director. The transactions and events indicate profligacy and corruption, given the current financial difficulties the entity faces. You took a snapshot of the audit evidence with your phone camera and posted it on your private messaging group to support a claim of corruption you made. This has attracted a lot of traffic to your post, and one of the group members, who is a journalist, decided to spark a bigger debate on the matter in the mainstream media. Your post went viral within 24 hours.
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (B)
In early December 2022, your District Council received an unplanned visit from top political figures who claimed to be on a political campaign and decided to pay a “courtesy call” on the District Administrator and the Council. The District Administrator quickly asked that a financial package (brown envelope) be prepared for them. The amount was significant but unbudgeted. The visitors left the Council with high commendation from the District Administrator. Thereafter, he asked the Finance Manager to process the necessary documentation to support the brown envelope transactions. The Finance Manager expressed some misgivings about the transactions but advised the accountant to record the brown envelope transaction as “goods and services” under “travel and transport,” which he did without objection.
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (C)
A Finance Manager of a regulated entity has been at his post for the last two years, and it has become an open secret in the entity that he does not know his job. Since his assumption, the entity has not been able to submit the required quarterly and annual public accounts to the Controller and National Auditor. Auditors have raised many audit observations indicting the entity for poor accounting practices. The financial records are in shambles, the financial statements are in disarray, and the cash management is unfortunate. He secured the job based on his political activism rather than accounting professionalism.
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (D)
The Finance Manager was touted as the smartest accounting person in Zamara by the Managing Director of the entity. He claims that he always covers for him and delivers him from the corrupt league of public officers. He brags: “This Finance Manager, I have yet to meet his kind of accountant. He understands the language; just discuss it with him, and it is done. Whatever you want. The guy is the smartest of the smart. Even the National Auditor himself can audit him and the report will be clean. I just love this guy because he knows how to cook the books well.”
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario.
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- 15 Marks
PSAF – L2 – Q4.1- International Public Sector Accounting Standards
Discuss five roles of IPSASB in global financial reporting.
Question
The International Public Sector Accounting Standards Board (IPSASB) plays a critical role in regulating public sector accounting and reporting practices worldwide.
Required:
(a) Discuss five roles played by the IPSASB in the financial reporting space globally.
(b) Discuss the position of the Government of Kapania on the IPSAS.
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- 20 Marks
L2 – Q73 – Cash Budgets and Master Budgets
Prepare a cash budget for Ministry of Commerce for April–June 202X, showing monthly and quarterly totals.
Question
On 31st March 202X the bank balance in the books of the Ministry of Commerce was GHC 900,000. The department provides you with the information below.
| Month | IGF GHC’000 | Govt releases GHC’000 | Donations GHC’000 | Salaries GHC’000 | Goods and services GHC’000 | Office equipment GHC’000 | Advances GHC’000 |
|---|---|---|---|---|---|---|---|
| Jan | 4,100 | 2,000 | 1,200 | 1,000 | 600 | 50 | |
| Feb | 900 | 500 | 320 | 300 | 40 | ||
| March | 1,300 | 500 | 400 | 320 | 400 | 50 | |
| April | 1,200 | 600 | 200 | 620 | 320 | 40 | |
| May | 1,000 | 600 | 550 | 220 | 60 | ||
| June | 1,000 | 600 | 200 | 660 | 420 | 500 | 50 |
Relevant notes to the data:
(i) The Internally Generated Funds (IGF) are made up of 70% cash receipts and 30% receivables. The receivables are collected as follows: 60% in the month following the service delivery and remaining 40% in the second month following the service delivery. The department is entitled to retention of 80% of the IGF collected and the remaining 20% is payable into the National Treasury (the central government fund) in the month in which the money is collected.
(ii) The department also enjoys budget allocation and Government promises to follow schedule.
(iii) The department anticipates some donations as shown in the table above. It is expected that 30%, 40%, and 70% of donations in March, April, and June respectively will be in cash. The remaining portions are expected to come in the form of materials.
(iv) The staff salaries will be paid at the end of each month.
(v) Goods and services are paid for one month in arrears.
(vi) The office equipment acquired in January will be paid for in the third month following the purchase, and the one to be acquired in June will be paid for immediately.
(vii) The office equipment is to be depreciated at 2.5% per month.
(viii) From January 20X0, staff of the department will be granted advances under an advance scheme approved by the government. The advances will be recovered in four equal monthly instalments, beginning in the month following the month in which the advances are granted (i.e. advances in January will be repaid in four equal monthly instalments beginning in February). Estimated advances are shown in the table above.
Required:
(a) Prepare a cash budget for the department for the Second Quarter of 202X (April – June 202X) showing the cash forecast for each individual month and the total for the quarter as a whole.
(b) Advise management based on the outcomes obtained in question (a) above.
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