Question Tag: Transparency

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  • 5 Marks

FR – Nov 2016 – L2 – Q5b -Professional and Ethical Issues in Financial Reporting

Discuss the ethical considerations for partners and accountants in the amalgamation process.

Amalgamating two or more firms into one presents ethical challenges.

Required:
Discuss TWO ethical considerations that the partners and their accountants should take into account in the process of the amalgamation of the partnerships.

The amalgamation of partnerships presents several ethical issues. Two key considerations that the partners and their accountants should be mindful of include:

  1. Integrity and Transparency:
    • The partners must ensure that all financial information is disclosed accurately and fully. Misrepresentation or withholding of financial data, such as debts or contingent liabilities, could mislead the other parties involved in the amalgamation. This includes ensuring that the valuation of assets and liabilities is fair and reasonable. Ethical accountants are expected to provide honest, transparent advice that promotes trust and integrity in the process.
  2. Fair Treatment of Stakeholders:
    • Partners must consider how the amalgamation will affect employees, creditors, customers, and other stakeholders. Ethical conduct demands that all stakeholders are treated fairly, and decisions should not only serve the interests of the partners but should also take into account the broader impact of the amalgamation on these stakeholders. This ensures that the process of amalgamation is equitable and respectful of all parties involved.
  • 4 Marks

PSAF – Nov 2016 – L2 – Q3c – Public expenditure and financial accountability framework.

Discuss four policy objectives ensuring adherence to public accountability principles by government institutions.

Public accountability requires clear definition of responsibilities of public officials and a clear understanding of relationships between public officials and stakeholders on the need for transparency and accountability.
Required:
Discuss FOUR policy objectives of government that ensure that government institutions adhere to the principles of public accountability. (4 marks)

i) Government institutions must define their vision, mission, and annual and longer-term objectives and agree or establish plans to achieve them.
ii) Government institutions must oversee the delivery of planned results by monitoring performance against strategic objectives and targets and ensure corrective action when necessary.
iii) Government institutions must ensure that there is the appointment, development, and succession of their management staff.
iv) Government institutions must ensure the formal approval and adoption of a monthly and annual report of the entity, including the financial statements.
v) Government institutions must protect all public property and control public resources entrusted to them.

  • 4 Marks

PSAF – Nov 2016 – L2 – Q4a – Public Procurement

Discuss four benefits for an MDA of following due process in public procurement.

Discuss FOUR benefits that an MDA will derive if it follows the due process in public procurement.
(4 marks)

Benefits of Due Process in Public Procurement
i) The entity will safeguard its public funds and assets
ii) It will improve its system of fiscal management through more efficient and effective use of public monies.
iii) It will enhance transparency and accountability in its management and
procurement processes.
iv) It will be able to build public confidence in its financial activities.
v) It will practice efficient use of resources through competitive bidding and value for money.
vi) It will improve its financial planning system.
(4 points for 4 marks)

  • 10 Marks

CSEG – Nov 2015 – L2 – Q4c – Corporate governance framework

Explain five issues typically contained in corporate governance reports.

Reporting on corporate governance is one way of ensuring transparency. Based on recent corporate governance concerns, explain FIVE (5) issues that are contained in corporate governance reports. [10marks]

Issues contained in corporate governance reports.

All corporate governance reports (included Ghana’s Code of Best Practices in Corporate Governance) state that board directors should explain their responsibility for preparing accounts. They should report that the business is a going concern, with supporting assumptions and qualifications as necessary.

In addition, further statements required include:

  1. Information about the board of directors: the composition of the board in the year, the role and effectiveness of the board, information about the independence of the non-executives, frequency of, and attendance at, board meetings, how the board’s performance has been evaluated. For example, the South African King Report suggests a charter of responsibilities should be disclosed.
  2. Brief report on the remuneration, audit and nomination committees covering terms of reference, composition and frequency of meetings.
  3. Information about relations with auditors, including reasons for change and steps taken to ensure auditor objectivity and independence when non-audit services have been provided (Ghana’s code requires that audit and non-audit fees are disclosed).
  4. A statement that the directors have reviewed the effectiveness of internal controls, including risk management. Also sufficient disclosures should be given for shareholders to understand the main features of the risk management and internal control processes. Board should also give details of, or at least confirm, any action taken to remedy significant failings or weaknesses. (This is required by Ghana’s Code).
  5. A statement on relations and dialogue with shareholders.
  6. A statement that the company is a going concern. (This is required by Ghana’s Code).
  7. Sustainability reporting, defined by the King Report as including the nature and extent of social, transformation, ethical, safety, health and environmental management policies and practices.
  8. A business review
  9. A statement detailing the compliance by the organisation with corporate governance, legal and statutory requirements. (This is required by Ghana’s Code)
  10. Ghana’s Code of Best Practices in Corporate Governance also requires the following disclosure:

The board should also ensure that information is disclosed on the following matters in the annual report insofar as they are relevant to the period under review –

(a) All management fees paid by the corporate body with details of the names of the parties and their relationship to the compote body;

(b) The identities and percentage holdings of substantial shareholders;

(c) significant cross shareholding relationships;

(d) Related party transactions;

(e) Details of incentive schemes, such as stock option scheme;

(f) The fees paid to the auditors of the corporate body for audit and non-audit related work; and

(g) Any other material issues concerning employees and other stakeholders such as creditors and suppliers.

  • 10 Marks

AAA – Dec 2023 – L3 – Q4a – Government External Audit and Public Accountability

Discuss the principles under INTOSAI-P 12 that Supreme Audit Institutions (SAIs) should follow to strengthen accountability, demonstrate relevance, and lead by example.

Governments, through Parliament, levy and collect taxes from the citizens of their countries. The taxes collected must be used in providing services to the citizenry. The taxpayer must be assured that taxes paid are used and accounted for transparently. Supreme Audit Institutions (SAIs) are set up under their countries’ constitutions to carry out audits of public funds on behalf of the citizens. According to INTOSAI-P 12: The Value and Benefits of Supreme Audit Institutions – making a difference to the lives of citizens, the extent to which a SAI is able to make a difference to the lives of citizens depends on the SAI:

i) Strengthening the accountability, transparency, and integrity of government and public sector entities;
ii) Demonstrating ongoing relevance to citizens, Parliament, and other stakeholders; and
iii) Being a model organisation through leading by example.

Required:
Discuss THREE (3) principles under each of the headings (i-iii). (10 marks)

i) Strengthening the Accountability, Transparency, and Integrity of Government and Public Sector Entities

  1. Independence of SAIs: SAIs must operate independently from the government and any other entity they audit. This independence ensures that audits are conducted objectively and without undue influence, thereby strengthening the accountability of government and public sector entities.
  2. Public Reporting: SAIs should report their findings to Parliament and the public in a timely and transparent manner. This ensures that the outcomes of audits are available for public scrutiny, which enhances transparency and promotes accountability in the use of public funds.
  3. Audit Scope and Mandate: SAIs should have a broad audit mandate that includes financial audits, compliance audits, and performance audits. This comprehensive approach ensures that all aspects of government and public sector operations are reviewed, leading to a more robust assessment of accountability and integrity.

ii) Demonstrating Ongoing Relevance to Citizens, Parliament, and Other Stakeholders

  1. Stakeholder Engagement: SAIs should actively engage with citizens, Parliament, and other stakeholders to understand their concerns and expectations. By doing so, SAIs can ensure that their work is relevant and addresses the most pressing issues related to public sector accountability.
  2. Timeliness of Audits: SAIs must conduct and complete audits in a timely manner. Timeliness ensures that audit findings are relevant and can be acted upon promptly, which helps maintain the trust and confidence of stakeholders.
  3. Adaptability and Innovation: SAIs should continuously adapt to changes in the public sector environment and adopt innovative audit techniques. This adaptability ensures that SAIs remain relevant in a rapidly changing world and continue to address new and emerging risks effectively.

iii) Being a Model Organisation Through Leading by Example

  1. Ethical Standards: SAIs must adhere to the highest ethical standards in all their operations. By setting a strong ethical example, SAIs reinforce the importance of integrity and ethical behavior in the public sector.
  2. Professional Development: SAIs should invest in the continuous professional development of their staff. A highly skilled and knowledgeable workforce ensures that audits are conducted effectively and that the SAI maintains its credibility as a model organization.
  3. Internal Accountability: SAIs must have robust internal controls and accountability mechanisms in place. By demonstrating accountability within their own operations, SAIs set a standard for the public sector entities they audit and promote a culture of accountability across the public sector.
  • 10 Marks

BMIS – March 2024 – L1 – Q3b – Management and leadership

Describe five effective leadership practices that can improve organizational performance in African businesses facing below-average results.

Some organisations in Africa are experiencing below average performance as a result of poor leadership practices. Business strategists have the opinion that this below average performance can only be rectified if effective leadership practices are developed and implemented.

Required: Describe FIVE (5) of these practices. (10 marks)

Effective Leadership Practices

  • Foster effective relationship with subordinates: The effective leader should be able to foster effective relationship with subordinates. This will require that the leader becomes abreast with the concerns of those who are being led.
  • Encourage effective participation: The leader should involve all subordinates in the decisions which affect them. Such participation will encourage subordinates to refrain from the feeling that decisions are imposed on them.
  • Transparency: The leader should be transparent to subordinates in all affairs concerning the operations of the organisation. When subordinates are told the truth they will comply with all directives given by the leader.
  • Credibility: The leader should be credible in terms of behaviour. A leader who demonstrates to subordinates that he/she is trustworthy will be able to get most decisions through and lead effectively.
  • Lead by example: The leader should be able to lead by example. The leader should be able to demonstrate to subordinates how they should behave by he/she taking a lead in such behaviour which will then make subordinates to be willing to comply with all directives irrespective of their difficulties.
  • Interdependency: The leader should have an attitude that exhibits interdependence between the leader and the subordinates. This will show that they are moving towards the achievement of a common goal and see each other as equal contributors to the achievement of that goal.
  • 10 Marks

AAA – Nov 2023 – L3 – Q4a – Government External Audit and Public Accountability, Public Sector Audit

Discuss ways in which the Auditor-General can adopt standards and processes that are objective and transparent, and how the Audit Service can operate economically, efficiently, and effectively.

a) Accountability and transparency are two important elements of good governance. Transparency is a powerful force that, when consistently applied, can help fight corruption, improve governance, and promote accountability.

Accountability and transparency are not easily separated: they both encompass many of the same actions, for instance, public reporting. The concept of accountability refers to the legal and reporting framework, organisational structure, strategy, procedures, and actions. The notion of transparency refers to timely, reliable, clear, and relevant public reporting on its status, mandate, strategy, activities, financial management, operations, and performance. In addition, it includes the obligation of public reporting on audit findings and conclusions and public access to information about the Government audit.

An important principle set out in INTOSAI-P 20: Principles of Transparency and Accountability is that SAIs should adopt audit standards, processes, and methods that are objective and transparent.

Required:

i) Discuss FIVE (5) ways in which the Auditor-General can adopt standards, processes, and methods that are deemed objective and transparent. (5 marks)

ii) Discuss FIVE (5) ways the Audit Service can operate economically, efficiently, effectively, and in accordance with laws and regulations. (5 marks)

i) Ways in which the Auditor-General can adopt standards, processes, and methods that are objective and transparent:

  • Legal Obligation Compliance: The Auditor-General must ensure that their operations meet legal obligations with respect to their audit mandate and required reporting.
  • Adoption of International Standards: The Auditor-General should adopt standards and methodologies that comply with INTOSAI’s fundamental auditing principles as set out in ISSAIs.
  • Communication of Standards: The Auditor-General should communicate what those standards and methodologies are and how they comply with them.
  • Audit Scope Communication: The Auditor-General should communicate the scope of audit activities they undertake under their mandate, based on their risk assessment and planning processes.
  • Engagement with Audited Entities: The Auditor-General should communicate with the audited entity about the criteria on which they will base their opinions, keeping them informed about audit objectives, methodology, and findings.

(5 points @ 1 mark each = 5 marks)

ii) Ways the Audit Service can operate economically, efficiently, effectively, and in accordance with laws and regulations:

  • Sound Management Practices: The Audit Service should employ sound management practices, including appropriate internal controls over financial management and operations, which may include internal audits and other measures.
  • Financial Transparency: The Audit Service should make its financial statements public and subject to external independent audits or parliamentary reviews.
  • Operational and Performance Assessment: The Audit Service should assess and report on its operations and performance in all areas, such as financial audits, compliance audits, jurisdictional activities, performance audits, and program evaluations.
  • Skill Development: The Audit Service should maintain and develop the necessary skills and competencies required to perform work to achieve its mission and meet responsibilities.
  • Budget Reporting: The Audit Service should publicly report on its total budget, the origin of financial resources, and how those resources are used. This includes measuring and reporting on the efficiency and effectiveness with which funds are used.

(5 points @ 1 mark each = 5 marks)

  • 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.

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