Question Tag: Accountability

Search 500 + past questions and counting.
Professional Bodies Filter
Program Filters
Subject Filters
More
Tags Filter
More
Check Box – Levels
Series Filter
More
Topics Filter
More
  • 5 Marks

PSAF – Nov 2018 – L2 – Q1d – The context of public financial management

Explain five reasons why public sector accounting is useful in any national economy

A public sector organization is an entity that is owned and operated by the government for non-profit goals. The public sector is made up of different organizations, and as such requires an effective accounting framework to ensure transparency and accountability.

Required:
Explain FIVE (5) reasons why Public Sector Accounting is useful in any national economy.

Reasons why Public Sector Accounting is useful in any national economy include:

  • Demonstrates Accountability: Public sector accounting enables governments to demonstrate accountability for public resources to the citizens, ensuring that funds are used for their intended purposes.
  • Supports Decision Making: Public sector accounting provides useful information that supports social, economic, and political decision-making by the government, aiding in the effective allocation of resources.
  • Efficient Resource Allocation: It is a tool that enables the efficient allocation of public resources to the priorities of the government, ensuring that public funds are used where they are most needed.
  • Control and Monitoring: Public sector accounting serves as a tool used by the government to control its plans, programs, and activities, ensuring that they are executed as intended.
  • Performance Measurement: It helps measure the performance of the government in terms of economy, efficiency, and accomplishments, providing a basis for evaluating how well public funds are being managed.
  • Legal Compliance: Public sector accounting is a means of meeting legal requirements for public accounts to be presented quarterly and annually, ensuring compliance with statutory obligations.
  • 10 Marks

PSAF – May 2019 – L2 – Q5a – Public expenditure and financial

Describe the composition of the Audit Committee and explain its role in enhancing public financial governance.

a) In an effort to strengthen public financial accountability, the Public Financial Management (PFM) Act, 2016 (Act 921) has introduced an Audit Committee in the covered entities as part of the public financial governance infrastructure to replace the Audit Report Implementation Committee (ARIC). Many experts hold the view that ARIC did not perform well due to lack of independence and legal framework. To address these lapses, the PFM Act paid attention to the composition of the Audit Committee and empowers the Minister of Finance to issue regulations for the effective functioning of the committee. A good number of Audit Committees have since been inaugurated and operational.

i) Describe the composition of the Audit Committee and explain how the structure of the committee could enhance the effectiveness of public financial governance. (5 marks)

ii) Explain THREE (3) responsibilities of the Audit Committees as enshrined in the PFM Act and the related guidelines issued by the Minister of Finance. (3 marks)

iii) Suggest TWO (2) ways by which the effectiveness of Audit Committee can be enhanced. (2 marks)

i) The Audit Committee is made of five members as follows:

  • Three of the members nominated by the Institute of Chartered Accountants, Ghana, and the Internal Audit Agency. These members should be independent of the operation of the covered entity.
  • Two members nominated by the Principal Account Holder of the covered entity. These should exclude Principal Account Holder, Deputy Minister, and the Principal Spending Officers.
  • The Chairman of the committee shall be selected among the three independent members. The Principal Spending Officer or Principal Account Holder, in consultation with the AC, shall appoint a person to provide secretariat support to the committee.
  • The Principal Account Holder shall appoint all the members and the Chairman.

How the structure of the committee could enhance the effectiveness of the committee:

  • The structure of AC may improve effectiveness in the following ways:
    • Independent of majority of members, including Chairman will enhance the work of the committee by minimizing the opportunity of influence and likely victimization of outspoken members. This affords the committee free hands to operate.
    • Finance expertise on the Committee is also enhanced as the majority of members are from accounting, finance, and audit backgrounds. This enhances individual effectiveness on the Committee.

ii) Statutory responsibilities:

  • The Audit Committee shall ensure that the head of a covered entity pursues the implementation of recommendations contained in internal audit reports, Parliament’s decisions on the Auditor-General’s report, Auditor-General’s Management Letter, and report of an internal monitoring unit in the covered entity particularly, in relation to financial matters raised.
  • The Audit Committee shall ensure that the head of a covered entity prepares an annual statement showing the status of implementation of recommendations contained in internal audit reports, Parliament’s decisions on the Auditor-General’s report, Auditor-General’s Management letter, report of internal monitoring unit in the covered entity particularly, in relation to financial matters raised; and any other related directives of Parliament.

Advisory role and responsibilities:

  • Providing advice on sound, transparent, and reliable financial management practices.
  • Ensuring the risk management process is comprehensive and effective.
  • Helping achieve organization-wide strong and effective internal controls in the covered entity.
  • Reviewing corporate policies relating to compliance with laws and regulations,
    ethics, conflicts of interest, and investigations of misconduct and fraud.
  • Reviewing current and pending corporate governance related litigation or
    regulatory proceedings to which the covered entity is a party.
  • Ensuring the internal auditors’ access to the Audit Committee, encouraging
    communication beyond scheduled Committee meetings.
  • Reviewing internal audit plans, internal audit charters, risk (including fiscal risk)
    assessment reports.
  • Ensuring the development, approval and update of the code of conduct. The
    Committee should also ensure that all employees receive the code of conduct,
    understand it, and obtain appropriate training regarding it.
  • Follow up on significant issues, investigations, and disciplinary actions.
  • Reviewing audit reports for assurance on efficiency, effectiveness and economy in
    the administration of programmes and operations of the covered entity.

iii) The effectiveness of AC can be enhanced by:

  • Offering training for members to equip them with the current knowledge on the working of AC. This will enhance members’ effectiveness.
  • Regular review and monitoring of the AC should be carried out by the ICAG and Internal Audit Agency. This will ensure assessment of the AC and those not performing will be worked upon.
  • Collaboration with other institutions of accountability such as the Public Accounts
    Committee and Auditor General to promote effective financial governance.
  • 5 Marks

PSAF – May 2020 – L1 – Q5b – The context of public financial management

State and explain the areas where Parliament is expected to provide oversight responsibilities under the Public Financial Management Act 2016 (Act 921).

Parliament of the Republic of Ghana performs several functions such as the enactment of laws, securitization of law, approval of the national budget, among others. However, in reference to section 11(1) of the Public Financial Management Act 2016 (Act 921), Parliament shall also provide oversight responsibilities in several areas. In achieving this, the Speaker of Parliament may assign responsibilities under this to a committee of Parliament or an Office established by Parliament.

Required:
State and explain FIVE (5) areas you expect Parliament of the 4th Republic to provide these oversight responsibilities.
(5 marks)

Areas of Parliamentary Oversight Responsibilities under the Public Financial Management Act 2016 (Act 921)

  1. Matters relating to budget and finance
    Parliament is responsible for overseeing the preparation, approval, and monitoring of the national budget, ensuring that public funds are allocated and used in accordance with national priorities.
  2. Government expenditure
    Parliament monitors government spending to ensure that expenditures are made in accordance with the approved budget and that funds are used effectively and efficiently for their intended purposes.
  3. Performance reporting
    Parliament reviews performance reports from government entities to assess whether they are achieving their objectives and delivering public services effectively.
  4. Post-legislative scrutiny
    Parliament ensures that laws passed are implemented effectively and that their intended outcomes are being achieved, taking corrective actions where necessary.
  5. Impact of financial policy measures on the economy
    Parliament evaluates the impact of financial policies on the overall economy, ensuring that such policies contribute to economic growth, stability, and the welfare of the citizens.
  • 6 Marks

May 2019 – L2 – Q1b – General purpose financial reporting framework

Explain the objectives of financial reporting in public sector organizations.

One objective of Public Sector Accounting is accountability. Accountability requires that government justifies how public resources are raised and utilized by means of Financial Reporting. Financial Reporting helps to improve the performance of, and trust in, the public sector.

Required:
Explain FOUR (4) other objectives of Financial Reporting in public sector organizations.
(6 marks)

The objectives of Financial Reporting in public sector organizations include:

  • Statutory/Legal Requirement: Financial reporting ensures compliance with legal frameworks such as the 1992 Constitution and the Financial Administration Act, thereby assuring the public of conformity to the law.
  • Compliance and Stewardship: It provides assurance to responsible authorities and users that there is adherence to legal and mandatory requirements in the use of resources.
  • Viability: Financial reporting allows for monitoring and evaluating the performance and predicting the economic conditions of public sector organizations, ensuring their continued operation.
  • Planning and Authorization Information: It serves as a basis for planning future policies and activities and provides the necessary support for decision-making.
  • Full Disclosure: Ensures transparency by fully disclosing the financial results of public sector activities.
  • Effective Control: Provides adequate financial information needed for management purposes and ensures accountability for all funds and assets.
  • Integration: Ensures suitable integration of departmental accounting with central accounting operations.

Take control of your business data with insight and in-depth understanding by taking this course. 

Services

Contact Info

  • +233203701923
    +233543919232
  • info@noohrabusiness.com

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope