ACC 308 — Public Sector Accounting & Reporting: Lecture Note

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LA-NET | ONLINE LEARNING VIDEO PLATFORM FOR POST-SECONDARY & HIGHER INSTITUTION STUDENTS

LA-NET | ONLINE LEARNING VIDEO PLATFORM FOR POST-SECONDARY & HIGHER INSTITUTION STUDENTS COURSE CODE:ACC 308 COURSE TITLE: Public Sector Accounting & Reporting COURSE UNIT LOAD:(3 Units C: LH 30; PH 45) SERIES LIST • Series 1: Concepts, Principles, and Frameworks of Public Sector Accounting • Series 2: Planning, Budgeting, and Medium-Term Expenditure Frameworks • Series 3: Reporting, Auditing, and Accountability in the Public Sector • Series 4: Financial Statements, Bases of Accounting, and International Standards • Series 5: Public Procurement, Ethics, and Comparative Sector Reporting Outline for Series 1 Part 1.1 Concept and Scope of Public Sector Accounting • Definition and scope of public sector accounting • Importance and objectives of public sector accounting • Distinction between public sector and private sector accounting Part 1.2 Principles and Standards in Public Sector Accounting • Generally Accepted Accounting Principles (GAAPs) in the public sector • Professional pronouncements from international bodies (e.g. UN, International Committee for Public Sector Financial Management) • Role of International Public Sector Accounting Standards (IPSAS) Part 1.3 Constitutional, Legislative, and Regulatory Frameworks • Finance (Control and Management) Act of 1958 (as amended) • Financial regulations for federal and state governments • Financial memoranda for local government councils • Fiscal Responsibility Act, 2010 Part 1.4 Accountability and Oversight in Public Sector Accounting • Roles of oversight bodies such as EFCC, ICPC, Code of Conduct Bureau, Code of Conduct Tribunal, and Public Accounts Committee • Importance of accountability and probity in public office

LA-NET | ONLINE LEARNING VIDEO PLATFORM FOR POST-SECONDARY & HIGHER INSTITUTION STUDENTS Introduction – Series 1: Concepts, Principles, and Frameworks of Public Sector Accounting Public sector accounting provides the foundation for transparency, accountability, and effective management of public resources. Unlike private sector accounting, which focuses on profit generation, public sector accounting is concerned with stewardship of funds, compliance with laws, and ensuring that government activities are properly recorded and reported. This Series sets the stage for your study of public sector accounting by introducing the concepts, principles, and frameworks that underpin the discipline. The aim of this Series is to equip you with a clear understanding of the basic concepts, principles, and regulatory frameworks of public sector accounting, and to highlight the importance of accountability and oversight in managing public resources. We shall commence this Series by examining the concept and scope of public sector accounting, including its objectives and distinctions from private sector accounting. Next, we will explore the principles and standards that guide public sector accounting, with emphasis on GAAPs and international pronouncements. Following that, we will consider the constitutional, legislative, and regulatory frameworks that shape public sector accounting in Nigeria. Finally, we will conclude with a discussion of accountability and oversight, focusing on the roles of institutions established to ensure probity in public office. Series Learning Outcomes – Series 1: Concepts, Principles, and Frameworks of Public Sector Accounting Upon completing this Series, you should be able to: • SLO 1.1 define the concept and scope of public sector accounting, • SLO 1.2 explain the objectives and importance of public sector accounting in relation to stewardship and accountability, • SLO 1.3 analyse the principles and standards guiding public sector accounting, including GAAPs and international pronouncements, • SLO 1.4 evaluate the constitutional, legislative, and regulatory frameworks that shape public sector accounting in Nigeria, and • SLO 1.5 discuss the roles of accountability and oversight institutions in promoting probity in public office. 1.1 Concept and Scope of Public Sector Accounting 1.1.1 Definition and scope Public sector accounting refers to the process of recording, classifying, summarising, and reporting financial transactions carried out by government and public institutions. Its scope includes all levels of government: federal, state, and local councils. Unlike private

LA-NET | ONLINE LEARNING VIDEO PLATFORM FOR POST-SECONDARY & HIGHER INSTITUTION STUDENTS sector accounting, which focuses on profit, public sector accounting emphasises stewardship, accountability, and compliance with laws and regulations. In-text question: Public sector accounting emphasises __________, accountability, and compliance with laws and regulations. Box 1.1 Scope of public sector accounting Caption: Explanation of the coverage of public sector accounting across federal, state, and local governments. 1.1.2 Objectives of public sector accounting The objectives of public sector accounting include: • Ensuring transparency in the use of public funds, • Providing information for decision-making and planning, • Demonstrating accountability to citizens and oversight bodies, and • Supporting compliance with constitutional and legislative frameworks. In-text question: One objective of public sector accounting is to ensure __________ in the use of public funds. Figure 1.1 Objectives of public sector accounting Caption: Diagram showing the key objectives of public sector accounting. 1.1.3 Distinction between public and private sector accounting While both systems involve recording and reporting financial transactions, their focus differs. Private sector accounting is profit-oriented, designed to measure performance and return on investment. Public sector accounting, on the other hand, is service-oriented, designed to ensure that resources are used efficiently and in line with legal and constitutional requirements. In-text question: Private sector accounting is __________-oriented, while public sector accounting is service-oriented. Table 1.1 Distinction between public and private sector accounting Caption: Comparison of objectives, focus, and reporting requirements in public and private sector accounting. ” Pilot questions 1.1 1. Public sector accounting emphasises __________, accountability, and compliance with laws and regulations. a) Stewardship b) Profit c) Investment d) Competition 2. One objective of public sector accounting is to ensure __________ in the use of public funds. a) Transparency b) Profitability c) Competition d) Investment 3. Private sector accounting is __________-oriented, while public sector accounting is service-oriented. a) Profit b) Transparency c) Accountability d) Compliance

LA-NET | ONLINE LEARNING VIDEO PLATFORM FOR POST-SECONDARY & HIGHER INSTITUTION STUDENTS 4. Public sector accounting covers financial transactions at __________ levels of government. a) Federal, state, and local b) Private and corporate c) International only d) Non-governmental 5. Which of the following is NOT an objective of public sector accounting? a) Ensuring transparency b) Demonstrating accountability c) Maximising profit d) Supporting compliance 1.2 Principles and Standards in Public Sector Accounting 1.2.1 Generally Accepted Accounting Principles (GAAPs) Generally Accepted Accounting Principles (GAAPs) are a set of rules and standards that guide the preparation and presentation of financial statements. In the public sector, GAAPs ensure consistency, transparency, and comparability of financial information across government entities. They provide a framework for recording transactions, recognising revenues and expenditures, and reporting financial performance. In-text question: GAAPs ensure __________, transparency, and comparability of financial information across government entities. Box 1.2 GAAPs in public sector accounting Caption: Explanation of GAAPs and their role in ensuring consistency and transparency in public sector accounting. 1.2.2 International pronouncements and professional guidance International bodies such as the United Nations (UN) and the International Committee for Public Sector Financial Management issue pronouncements and guidelines to strengthen public sector accounting practices. These pronouncements promote harmonisation of accounting standards globally and encourage governments to adopt best practices in financial reporting. In-text question: International pronouncements promote __________ of accounting standards globally. Figure 1.2 International pronouncements in public sector accounting Caption: Diagram showing the role of international bodies in shaping public sector accounting standards.” 1.2.3 International Public Sector Accounting Standards (IPSAS) International Public Sector Accounting Standards (IPSAS) are issued by the International Public Sector Accounting Standards Board (IPSASB). They provide guidance on recognition, measurement, presentation, and disclosure of financial information in the public sector. IPSAS aims to improve the quality of financial reporting, enhance accountability, and facilitate comparability across countries. In-text question: IPSAS aims to improve the quality of financial reporting and enhance __________ in the public sector.

LA-NET | ONLINE LEARNING VIDEO PLATFORM FOR POST-SECONDARY & HIGHER INSTITUTION STUDENTS Table 1.2 Key features of IPSAS Caption: Summary of IPSAS features including recognition, measurement, presentation, and disclosure. Pilot questions 1.2 1. GAAPs ensure __________, transparency, and comparability of financial information across government entities. a) Consistency b) Profitability c) Competition d) Investment 2. International pronouncements promote __________ of accounting standards globally. a) Harmonisation b) Profitability c) Competition d) Investment 3. IPSAS are issued by the __________. a) IPSASB b) IMF c) World Bank d) WTO 4. IPSAS aims to improve the quality of financial reporting and enhance __________ in the public sector. a) Accountability b) Profitability c) Competition d) Investment 5. Which of the following is NOT a feature of IPSAS? a) Recognition b) Measurement c) Profit maximisation d) Disclosure 1.3 Constitutional, Legislative, and Regulatory Frameworks 1.3.1 Finance (Control and Management) Act of 1958 The Finance (Control and Management) Act of 1958, as amended, provides the legal foundation for managing public funds in Nigeria. It outlines procedures for authorising expenditure, controlling revenue, and ensuring accountability in government financial operations. This Act remains a cornerstone of public sector financial management. In-text question: The Finance (Control and Management) Act of 1958 provides the legal foundation for managing __________ funds in Nigeria. Box 1.3 Finance Act of 1958 Caption: Summary of the Finance (Control and Management) Act of 1958 and its role in public financial management. 1.3.2 Financial regulations for federal and state governments

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