PUBLIC SECTOR

ACCOUNTING (8555)
Maleeha Imran
Student ID : 18PGA11160
Program : M.Com
Assignment # I ,
Semester : Spring ,2023
Submitted To :Noor Ul Ain

AUGUST 22, 2023

QUESTION NO.1

What is public sector accounting model? Discuss in detail.

Answer:
Public Accounting Sector

In light of the nature of public sector accounting, attempts are made to define public sector
accounting. but in this guide or chapter, we are going to consider about four ways to define
public sector accounting, Several ideas of defining public sector accounting that come to mind
include:

1. Public Sector Accounting is an information system designed to measure financial

information (transactions) of public sector organizations for purposes of the planning,
appraisal, reporting, evaluation and management of the organizations.
 2. A financial system designed to capture all transactions involving government funds,
allow for comparison of actual and budge Led results, give government timely
information about revenue and expenditure, and provide information useful to assess the
efficiency of government programs.
3. The totality of methods and procedures necessary for accounts keeping producing the
desired results of the objectives of government programs and activities.
4. A set of methods and procedures adopted by public sector organizations to manage the
financial business of the organizations.
5. Public sector accounting is concerned with recording, controlling, analyzing,
classifying, summarizing, measuring and reporting the financial flows of government. It
involves the receipt, custody and disbursement of public and trust monies as required by
law.

The purpose is to demonstrate fiduciary stewardship that is to show that government resources
have been approved and handled properly by ensuring that government monies are applied
honestly, using proper procedures, within budgeted levels and legal limits.
All the definitions sound convincing although the last description of public sector accounting
appears to be more comprehensive. The main points we need to know, however, are that public
sector accounting is:
 • A dynamic financial information system.
• It is broad-based and limited only to the needs of the information user.
• It is based on laws, rules, regulations, policies, methods and procedures.
• To determine that the information produced is analyzed and communicated in a timely
way.
• To ensure that stewardship and accountability to the public are major hallmarks of the
system.

Several developments in recent decades have made the subject of Public Sector Accounting an
important part of accounting studies the world over. Firstly, the size of the government budget
and the contribution to the Gross Domestic Product (GDP) are very enormous, especially in
developing countries of public expenditure.

Secondly, an analysis of the concept and techniques of accounting applied to public sector
accounting and general commercial accounting shows that there is only a thin line between the
two accounting systems, mainly in the area of accounting methods and management principles.

Thirdly, accounting as an information system is very dynamic and its transformation, storage,
retrieval and reporting very much depends on new and emerging technologies and information
systems. These new computerized systems are developed to apply to both general commercial
accounting organizations and public service organizations with virtually very little or no
modifications.

For example, several ledger systems, payroll systems, and pension administration vary little.
Fourthly, governments throughout the world have quasi-commercial or sometimes purely
commercial, state-owned enterprises.

Accountancy training must, therefore, be comprehensive enough so that a professional

accountant can apply his knowledge and skills in a wide range of organizations whether
commercial, quasi commercial or a governmental unit.
 ➢ THE IMPORTANCE OF PUBLIC SECTOR
ACCOUNTING
Whenever a state exists, and the government exercises coercive power by collecting taxes
(revenue) and spending the money (disbursements) for the maintenance of law and order or a
form of state activity some form of public sector accounting, whether primitive or rudimentary,
would be practiced. It can also be said that modern states cannot function effectively without
public sector accounting. The reason is simple.

All government decisions, even in primitive societies where barter is practiced, have to be
ultimately broken down into financial terms. In recent years, however, a major effort has been
made in several countries especially in the United States, Great Britain and Canada to bring
modern techniques of management and financial analysis to bear on public sector accounting.

In the nineties, a major reform initiative called PUFMARP was launched to bring public sector
accounting in Ghana in line with modem international financial reporting and management
practices.

LEGALITY
The responsibility for the custody, safety and integrity of the Consolidated Fund, appropriation
of government and public funds has by law, been placed in the hands of the Controller and
Accountant General who is also the Chief Accounting Officer of government and the head of
government treasury.

The treasury is very much concerned with the legality of transactions-be its expenditure or
revenue. This requirement is essential because the consolidated fund which is the receptacle for
all government revenue, and out which all expenditure are met was created by law.

Transactions therefore must conform to rules and regulations laid down in the FAA, Finance
Ministry, and Treasury Circulars, etc. Non-conformity of transactions to the rules and regulations
are labeled as “IRREGULAR”. Irregular transactions are claims or documents tainted with
illegality which must be disallowed or queried.

MAGNITUDE OF THE BUDGET

A very large chunk of national income of Ghana flows through the national budget.
Poverty reduction strategies, job creation policies, the security of the state, developments in
infrastructure, education, health, energy, water, and others, are affected by decisions made in the
budget.

Besides, in Ghana, the government is the largest employer. The contribution or limitation of
public sector accounting reports is crucial in determining the effects of the budget on the general
populace – financial inputs, budget outcomes, etc.

LINKAGE BETWEEN THE BUDGET AND ACCOUNTING

By our financial laws, budgeting and accounting are closely linked. Public sector
accounting is principally concerned with revenue and expenditure control, through the treasury
system. In the same vein, the national budget has an impact on the total spending of the
economy, how public funds are to be raised, and decisions on the projected deficit or surplus.
Other areas where the national budget and public sector accounting are closely linked are:

(1) Consistency in accounting and budget classifications;

(2) Synchronization between accounting and budget classifications and organizational structure
(of cost centres); and

(3) Support of the budget justifications by information on performance, programs and activities,
costs by cost centres (spending units).

MACROECONOMIC MANAGEMENT
Apart from what may be described as policy mix or fusion between accounting and
budgeting in Ghana, it has been recognized increasingly that the success or otherwise of macro-
economic management of the national economy depends very importantly on treasury control of
public expenditure by spending agencies. This is because uncontrolled spending by the Central
Government, Public Institutions, MDA’S and MMDA’S, and commitments could derail the
policies for the macro-economic management of the country.

COMPARISON BETWEEN PUBLIC SECTOR

ACCOUNTING AND PRIVATE SECTOR
ACCOUNTING
The principal differences between the system of accounting used by central governments and
that found in the private sector are as follows:

i) With a central government, the ‘fund’ system of accounting is in operation whereas in the
private sector we find the ‘entity’ or ‘proprietorship’ approach. The distinguishing feature of
‘fund accounting’ lies In the fact that we find within one organization many independent
accounting entities with a self-balancing set of accounts reflecting monies voted to the fund,
receipts and expenditures.

(ii) The system of accounting utilized by a central government is based on cash payments and
receipts. In the private sector, there are adjustments for debtors and creditors at year-end to bring
the correct expenses or revenue into the accounts for the year. Due to how a central government
raises its finance on an annual basis, any cash not paid out soon after the year-end is lost to the
department concerned, and the creditor will haw to be paid out of the following year’s allocation.

ii In central government accounting, there is no comparison of expenses with revenue raised.

Many services yield no or very little income. Therefore, the matching concept is not applied in
its conventional sense. Instead, expenditure is compared with the funds voted by Parliament and
a summary statement, the Appropriation Account is drawn up at the end of the year.

1. iv) In private sector accounting, the prime summary accounts for the year are the Profit
and Loss Account and the Balance Sheet. Neither is found in the central government
system. Instead, the main summary statement is the receipts and payments and statement
of Assets and Liabilities.
2. v) In central government accounting, capital assets are not recorded separately as part of
the double-entry system, and neither is depreciation charged. Accordingly, expenditure
on assets is charged wholly in the year of acquisition along with all other expenditure.
The contents of the financial statements produced by companies are dictated by legislation, the
CompaniesCode. For other commercial organizations, the form of the financial statements is
similar but adapted to meet investors’ requirements and management’s needs.
Both public and private sector organizations will produce financial statements comprising an
Income Statement and Balance Sheet.
In financial statements prepared using the accrual basis, that is, those for the vast majority of the
private sector and some public sector bodies, the income statement will be the Trading and Profit
and Loss Account. An Income and Expenditure Account of Receipt and Payment Account are
the income statement for those organizations using cash accounting.

The Balance Sheet for an organization using accrual accounting will include all its assets and
liabilities.

On the other hand, the Balanced Sheet prepared using the cash basis will only record those assets
and liabilities relating to cash transactions. There will be no fixed assets, provisions or debtors
and creditors (except those relating to loans made or received).

Even though the characteristics of public sector organizations are often very different from
private sector organizations, there are more common areas than is generally recognized.

All organizations follow the same basic principles of double-entry bookkeeping and need
appropriate records of assets, liabilities, revenues and expenses. Many of the existing differences
in accounting are in terminology, form and procedure rather than in substance.

All organizations have the same desire to control costs to be efficient and to make work

Productive, and face similar challenges in meeting the needs.

All organizations have the same need to justify the use of resources when required to do so, to be
socially responsible and to be subjected to performance tests as much as possible.

Both the public and private sectors need to perform well if society is to function properly.

Besides the above, financial information reporting will provide the government with the
following advantages:

° Improvement of government organization, information, and management system;

° Development of new information systems to provide the president with needed performance
and other data;

° Improvement of governmental budgeting and accounting and financial reporting; and

° Improvement of governmental budgeting and accounting methods and procedures.

 SUMMARY OF DIFFERENCES BETWEEN
COMMERCIAL AND PUBLIC

SECTOR ORGANISATIONS
Differences Commercial Public Sector

Accounting cash, modified cash, commitment, accrual,

Accrual
concept modified accrual

Liquid Assets, Purchase of Fixed Assets are

written off within the year. State-Owned and
Balance Sheet Assets and liabilities
quasi – state-owned Enterprises however have
fixed Assets.

Elected representatives, Board of Directors/

Management Board of Directors
commissioners.

Profit motive This is the Social motive Services are provided to meet
Purpose measure of efficiency and social needs. State-owned enterprises have a
effectiveness profit motive

Regulations Company Laws,

Financial Administration Act and Regulations
Sources of Partnership Laws etc.

Sale of goods and

Financing services, Equity, Loans Taxes and other funds,
etc

Continued Financial The political will of the electorate

Existence success or the government.

USERS OF PUBLIC
SECTOR FINANCIAL
INFORMATION

Users Information Needs

whether organizational objectives are pursued, and plans and

Donor Community
targets are attainable
 how government financial information impacts on all aspects of
Media
society

Economic whether government financial information is

Planners Adequate and received timely for planning purposes?

The consequences of Government spending, whether they will

Taxpayers result in improvements in their living standards and/ or increase
taxation or inflation?

The financial position of government especially its ability to pay

Bankers and Lenders to loans and interest thereon and government’s ability to borrow
Government Regulator} money. Whether government spending meets legal requirements
bodies and whether financial controls are adhered to by spending
agencies?

Governments whether there is a deficit or surplus on current accounts

Economic the quantum, and whether to borrow or mop up

long term Authorities Liquidity in the economy?

Budget Analysts, the trends of current monthly accounts and

Managerial historical costs to help predict the future financial

Accountants And Investors and economic position of tine economy

Revenue and other Monitor the financial position of government as a basis

Finance related for structuring managerial and employees

Agencies of government the rewards system, such as bonuses for staff

INFORMATION TO REPORT BY PUBLIC SECTOR

ENTITY
As discussed earlier on, public sector entities have different reasons for their existence and
produce different types of information both to the government that created them and to other
users of their information.
Again the information they produce is by no means static. Indeed financial information produced
by public sector entities has varied with time.

The information has been limited only to the needs of the user, whether it is an internal user or an
external user. The language may also differ about whether it is for planning evaluation of
performance, or it is a requisition for government or donor funding. In general, we may
categorize the different types of information generated by public sector entities as:

Statutory Information Financing Reporting Planning Reporting ° Budgetary Information Control

Information Fiscal Reporting

An MDA shall prepare monthly accounts in a form prescribed and at a period set by the CAG in
the Accounting Manual and prepare, sign and submit within three months after the end of the
year, to the Minister, the Auditor General and the CAGD annual departmental accounts in the
form prescribed by the CAGD in consultation with the Auditor General.

The above example is a rule in the Financial Administration Regulations which compels MDA’S
to produce monthly, quarterly and annual reports of their financial and other operations.

Indeed, the FAR and the laws establishing various spending agencies stipulate various
mandatory reports which are expected to be produced by the spending agencies and
communicated to the appropriate regulatory authorities regularly.

FUNDING REQUIREMENTS
Donor and other funding agencies demand financial reporting according to a format agreed upon.
Often they require information on key accountability indicators, the impact of performance or
activities on the community, guidance on appropriate courses of future actions, objectivity on the
public interest of the programs.

PLANNING REQUIREMENTS
Planning by spending agencies in Ghana is based on a medium-term expenditure
framework (MTEF) which operates on a cash basis normally for three years.
All spending agencies are expected to prepare their budgets on this planning model and report on
the progress of their planning, programming and budgeting schemes. The use of budgetary
reserve and increases in cash limits will require the approval of Parliament, normally through a
supplementary estimate.

The exceptions are where the expenditure is contingent on but not covered by an estimate, such
as allocations for much of local authority capital expenditure in waste management. Pending this
approval, the Government can use a contingencies fund for urgent expenditure, subject to certain
restrictions.

Penalties for exceeding limits are largely moral, though there are financial penalties too. If
supply estimates are exceeded, there will be an excess vote, and, depending on the reasons,
recriminations from the Public Accounts Committee. In the (rare) cases where a cash limit is
exceeded, there will be an investigation into the reasons, and the amount set aside for the next
year will usually be reduced.

BUDGETARY INFORMATION
Budgetary information relate to the utilization of budgets as instruments of national
economic management, communicating the resource constraints to spending departments,
reducing gaps between planned and actual expenditures and achieving better control of public
expenditures.

The budget circular, for instance, whilst is mentioned in existing law explains policy objectives
of the government, areas to be controlled, methods of control and checks and balances in the
system as they relate to financial management.

CONTROL INFORMATION
Central control and monitoring of expenditure during a year are done by the treasury,
which provides regular reports on what has been spent and the estimated outturn for the year.

Departments draw up a quarterly profile of expected expenditure, which is agreed with the
Treasury. Much information for monitoring comes each month from the (analysis of
expenditure) records of receipts and payments to the Consolidated Fund maintained by the
treasury.

Further information on half-yearly estimated expenditure is given by departments, each of which

has an internal monitoring system, together with any revisions to budgets believed to be
necessary.

These figures are used to give estimated outturn figures in the main published documents on
expenditure.

Control is also exercised through cash limits that provide a system of government control of
expenditure during a financial year; that is, where policy has already determined entitlement to
payments.

Flexibility to meet unexpected events is nevertheless available during the year. First, for public
expenditure as a whole, there is the reserve, which is an amount set aside at the beginning of the
year to cover unforeseen items of expenditure and those items that cannot be properly quantified
when estimates are published.

This applies even to those elements that are cash limited, where there is some flexibility.

Cash limits can be revised during the year, and not infrequently are, though like all revisions,
they will have to be approved by the Treasury.

QUESTION NO.2

Discuss in detail the function and responsibilities of AGPR &

AGP.

Answer:
As of my last update in September 2021, the term "Accountant General Pakistan Revenues"
(AGPR) seems to refer to the office or department responsible for managing the financial
transactions and accounts related to government revenues in Pakistan. However, please note that
my information might not be up-to-date, and I recommend verifying this information with
official and current sources.

In general, the functions and responsibilities of an office like the Accountant General Pakistan
Revenues could include:

o Revenue Management: AGPR is likely responsible for managing and

maintaining accurate records of all government revenue collections. This involves
receiving revenue from various sources, such as taxes, fees, and other income, and
properly recording and accounting for these transactions.

o Accounting and Financial Reporting: AGPR would handle the accounting

for government revenues and ensure that financial records are accurate, up-to-date, and
compliant with relevant accounting standards and regulations. This office would likely be
involved in preparing financial statements and reports related to government revenues.

o Treasury Management: AGPR may be responsible for managing the

government's treasury operations, including the disbursement of funds to various
government departments and agencies based on approved budgets and allocations.

o Internal Controls: The office would implement internal control measures to

prevent errors, fraud, and mismanagement of government revenues. This could involve
processes for verifying the accuracy of transactions, authorizations, and approvals.

o Auditing: AGPR might conduct or facilitate audits to ensure that government

revenue transactions are accurately recorded, properly authorized, and in compliance with
applicable laws and regulations.

o Data Compilation and Reporting: The office would likely compile data
related to government revenues and generate reports for various stakeholders, including
government officials, policymakers, and the public.
 o Compliance: AGPR would work to ensure that all financial and accounting
activities related to government revenues adhere to legal and regulatory requirements.

o Technology and Systems: The office might use modern accounting systems and
technology to streamline processes, improve efficiency, and enhance transparency in
revenue management.

o Coordination: AGPR could collaborate with other government departments,

financial institutions, and agencies to ensure seamless revenue collection, reporting, and
distribution.

Please note that the specific functions and responsibilities of the Accountant General Pakistan
Revenues could have evolved or changed since my last update. If you're seeking accurate and up-
to-date information, I recommend visiting the official website of the Pakistan government or
related government entities for the most current details about the AGPR's role and
responsibilities.

Functions of the AGP

AGP performs the following functions:

Determining, with the approval of the President, such forms, principles and methods in which the
accounts of the Federation and of the Provinces shall be kept,

Certifying the accounts, compiled and prepared by the Controller General of Accounts or any
person authorized on that behalf for each financial year, showing under the respective heads the
annual receipts and disbursements for the purpose of the Federation, each Province and each
District,

Submitting the certified accounts with such notes / comments or recommendations as he may
consider necessary to the President or the Governor of a province or the designated district or
any authority,

Preparing reports relating to the accounts of the Federation / Provinces and submit them to the
President / Governor, who shall cause them to be laid before the National / Provincial
Assemblies
Scope and Jurisdiction of AGP

Scope and jurisdiction of AGP emanates from Article 170 (2) of the Constitution of Pakistan.
The Constitution mandates Auditor General of Pakistan to audit the accounts of the Federal and
of the Provincial Governments and the accounts of any authority or body established by, or under
the control of, the Federal or a Provincial Government. This jurisdiction is further elaborated in
AGP ordinance 2001 Section 08 and 09 that the Auditor General shall

Audit all expenditures from the Consolidated Fund and Public Accounts of the Federation and
each Province.

Audit all receipts which are payable into the Consolidated Fund or Public Accounts of the
Federal Government and of each Province and in the accounts of each district; and to provide
assurance that these were payable, have been properly and correctly deposited; and internal
controls are in place for their proper assessment and collection;

Audit accounts of stores and stock kept in any office or department of the Federation or of a
Province or of districts.

Audit all trading, manufacturing, profit and loss accounts, balance sheets and other subsidiary
accounts in any Federal or Provincial department and public-sector enterprises;

Audit the accounts of anybody or authority substantially financed by loans or grants from the
Consolidated Fund of the Federal or Provincial or District Government and to provide assurance
as to the fulfillment of the conditions subject to which such grants or loans were given.

QUESTION NO.3

What are the general policies to be followed for budgeting in the

public sector accounting offices?

Answer:
 Budgeting in the public sector involves a set of policies and practices designed to allocate
resources, manage expenditures, and achieve the objectives of government agencies and
organizations. While specific policies can vary depending on the country, jurisdiction, and
organization, there are some general principles and policies that are commonly followed in
public sector budgeting:

Transparency and Accountability:

• Public sector budgeting must be transparent, with clear documentation of revenue

sources, expenditure allocations, and the rationale behind budget decisions.
• Budgeting processes should be accountable to the public, elected officials, and oversight
bodies. This often involves regular reporting and auditing to ensure funds are used as
intended.

Fiscal Responsibility:

• Budgets should be realistic and balanced, avoiding excessive deficits or unsustainable

debt accumulation.
• Long-term fiscal sustainability should be considered, taking into account the economic
conditions and future obligations.

Strategic Planning:

• Budgets should align with the strategic priorities and goals of the government or
organization.
• Resources should be allocated to initiatives and projects that contribute to the overall
mission and objectives.

Performance-Based Budgeting:

• Budget decisions should be informed by the expected outcomes and performance metrics
of programs and projects.
 • Funding should be prioritized for activities that demonstrate effectiveness and contribute
to desired outcomes.

Incremental Budgeting vs. Zero-Based Budgeting:

• Incremental budgeting involves making adjustments to the previous year's budget to

account for changes and new priorities.
• Zero-based budgeting requires departments to justify every expense from scratch,
focusing on the necessity and value of each expenditure.

Participation and Consultation:

• Stakeholders, including citizens, elected officials, and relevant agencies, should be

consulted during the budgeting process to ensure diverse perspectives are considered.

Flexibility and Contingency Planning:

• Budgets should have flexibility to respond to unexpected events or changing

circumstances.
• Contingency plans should be in place to address emergencies or unforeseen
developments.

Ethical and Fair Resource Allocation:

• Budget decisions should be fair and equitable, distributing resources across different
sectors and regions to prevent inequities and disparities.

Multi-Year Planning:

• Long-term budgeting and planning should consider multi-year cycles to facilitate

consistent funding for longer-term projects and initiatives.

Debt Management:
 • Public sector entities should have policies in place for managing debt, including
guidelines for borrowing, repayment, and interest management.

Communication and Education:

• Budget information should be communicated clearly to the public, allowing citizens to

understand how their tax dollars are being used.
• Educational efforts can help citizens make informed decisions and participate in the
budgeting process.

Budget Monitoring and Evaluation:

• Regular monitoring and evaluation of budget implementation and performance help

ensure that goals are being met and resources are being used efficiently.

Remember that these policies can vary significantly based on the specific context and the
country's governance structure. Local laws, regulations, and the political environment also
play a role in shaping public sector budgeting policies and practices.

QUESTION NO.4

What are the accounting policies for recording rescript/

revenues in the public sector bodies?

Answer:
Accounting policies are the specific procedures implemented by a company's management team
that are used to prepare its financial statements. These include any accounting
methods, measurement systems, and procedures for presenting disclosures. Accounting policies
differ from accounting principles in that the principles are the accounting rules, and the policies
are a company's way of adhering to those rules.
Accounting policies for recording receipts and revenues in public sector bodies are essential to
ensure accurate financial reporting, transparency, and accountability. These policies may vary
based on the specific accounting standards used in a particular country or jurisdiction. However,
here are some common accounting policies that are often followed for recording receipts and
revenues in the public sector:

Accrual Basis Accounting:

• Public sector bodies typically use accrual basis accounting, where revenues are
recognized when they are earned or realizable, regardless of when the cash is received.

Revenue Recognition:

• Revenues are recognized when they are earned and the public sector entity has
substantially fulfilled its obligations to provide goods or services.
• Revenue should be measurable with a reasonable degree of certainty.

Classification of Revenues:

• Revenues are often categorized based on their nature, such as taxes, fees, fines, grants,
donations, etc.
• Different revenue categories may have specific accounting treatments.

Measurement of Revenues:

• Revenues are generally recorded at their fair value, which is the amount at which the
exchange of goods or services would take place between knowledgeable, willing parties.

Cash vs. Non-Cash Revenues:

• Cash receipts are recorded when cash is received.

• Non-cash revenues, such as donated assets or services, are recorded at their fair value.

Unearned Revenues:
 • Unearned revenues, such as advances or deposits, are initially recorded as liabilities and
recognized as revenue when the related obligations are fulfilled.

Use of Fund Accounting:

• Public sector entities often use fund accounting to segregate different types of revenues

QUESTION NO.5

Discuss in detail the year end accounting polices followed in the

public sector bodies.

Answer:
Year-end accounting policies in public sector bodies are crucial for ensuring accurate
financial reporting, compliance with regulations, transparency, and accountability. These policies
help in summarizing financial activities for a given fiscal year and presenting the financial
position, results of operations, and cash flows. Below, I'll discuss the key aspects of year-end
accounting policies typically followed in the public sector:

Accrual Basis Accounting:

• Most public sector bodies use accrual basis accounting, which means that transactions are
recorded when they occur, not when cash is received or paid.
• Revenues are recognized when earned, and expenses are recognized when incurred,
regardless of when cash changes hands.

Period-End Closing Procedures:

 • At the end of the fiscal year, public sector entities perform various closing procedures to
ensure accurate financial reporting. These might include adjusting entries, accruals, and
reclassifications.
• Closing entries involve transferring temporary accounts (revenues and expenses) to
permanent accounts (balance sheet accounts).

Fixed Asset Reconciliation:

• Public sector bodies reconcile their fixed asset records with physical assets to ensure
accuracy in the asset register.
• Any adjustments or disposals of assets are recorded, and depreciation for the fiscal year is
calculated and recorded.

Inventory Valuation:

• If the entity holds inventory, an inventory valuation process is carried out to assess the
value of inventory on hand.
• The cost of goods sold is calculated, and adjustments are made to account for any
obsolescence or changes in value.

Accruals and Prepayments:

• Accruals involve recognizing expenses that have been incurred but not yet recorded.
• Prepayments involve recognizing expenses that have been paid in advance but relate to
the next fiscal year.

Revenues and Receivables:

• Revenues that have been earned but not yet received are recorded through accruals.
 • Accounts receivable balances are reviewed, and any necessary adjustments or allowances
for doubtful accounts are made.

Liabilities and Payables:

• Liabilities are reviewed to ensure accuracy, and any unrecorded liabilities are accrued.
• Accounts payable balances are reviewed, and adjustments are made as necessary.

Depreciation and Amortization:

• Depreciation and amortization expense for fixed assets and intangible assets is calculated
and recorded.
• The appropriate methods and useful lives are applied, following accounting standards.

Government Grants and Contributions:

• Government grants and contributions received are reviewed to ensure they have been
appropriately recognized and accounted for.
• Compliance with any grant conditions is assessed.

Financial Statement Preparation:

• Public sector entities prepare financial statements, including the balance sheet, income
statement, cash flow statement, and notes to the financial statements.
• These statements provide a comprehensive view of the entity's financial position and
performance.

Audit Preparation:

• Year-end activities also involve preparing for external audits or internal reviews.
 • Documentation, supporting schedules, and reconciliations are organized to facilitate the
audit process.

Disclosure and Transparency:

• Public sector entities must ensure that all financial information required by accounting
standards and regulations is disclosed in the financial statements.

It's important to note that specific year-end accounting policies can vary depending on the
country's accounting standards, the nature of the public sector entity, and any regulatory
requirements. These policies help ensure the accuracy and reliability of financial information,
facilitating informed decision-making by stakeholders and demonstrating accountability to the
public.