Public Sector Accounting

AF307

Dr. Ilimotama Cawi., CPA, CFAS

School of Accounting & Finance
Faculty of Business & Economics
University of the South Pacific
Overview
• Course Outline
• Public Sector Accounting: An
introduction
Introduction
Public Sector
• ‘Public sector organizations’ are entities that
have been formed to manage the policy and
operating requirements that enable a
government to achieve its goals of public
governance.
• (G. Callender, in International Encyclopedia of
the Social & Behavioral Sciences, 2001). 
Public Sector
• Owned and operated by government
• Examples of public sector organisations
(Government Departments):
 Education
 Health
 Police
 Infrastructure, etc.
Public Sector
• Not a profit seeking organisation
• Main objectives - providing goods and services
Public Sector
Characteristics of Government
Organizations
Levels of government
• Three levels:
1. Federal or National
2. Regional (State or Provincial)
3. Local (Municipal or County)
 Objectives of Financial Reporting

“Accountability is the cornerstone of all financial

reporting in government… Accountability requires
governments to answer to the citizenry—to justify
the raising of public resources and the purposes for
which they are used.”
-GASB Concepts Statement No. 1
Objectives of Financial Reporting for
State and Local Governments
Objectives of Financial Reporting for
the Federal Government
Governance
• Governance encompasses the system by which
an organisation is controlled and operates, and
the mechanisms by which it, and its people, are
held to account.
• Ethics, risk management, compliance and
administration are all elements of governance.
• (https://www.governanceinstitute.com.au/resourc
es/what-is-governance/)
Ethics
• Moral principles that govern a person’s
behaviour or the conducting of an activity.
• The discipline concerned with what is morally
good and bad and morally right and wrong.
• (https://www.britannica.com/topic/ethics-
philosophy)
Ethics
Ethics
Ethics
(a) Integrity
A professional accountant should be
straightforward and honest in all professional and
business relationships.
Ethics
(b) Objectivity
A professional accountant should not allow bias,
conflict of interest or undue influence of others to
override professional or business judgments.
Ethics
(c) Professional Competence and Due Care
A professional accountant has a continuing duty to maintain
professional knowledge and skill at the level required to
ensure that a client or employer receives competent
professional service based on current developments in
practice, legislation and techniques. A professional
accountant should act diligently and in accordance with
applicable technical and professional standards when
providing professional services.
Ethics
(d) Confidentiality
A professional accountant should respect the confidentiality
of information acquired as a result of professional and
business relationships and should not disclose any such
information to third parties without proper and specific
authority unless there is a legal or professional right or duty
to disclose. Confidential information acquired as a result of
professional and business relationships should not be used
for the personal advantage of the professional accountant
or third parties.
Ethics
(e) Professional Behavior
A professional accountant should comply with
relevant laws and regulations and should avoid
any action that discredits the profession. Each of
these fundamental principles is discussed in more
detail in Sections 110 – 150.
Ethics
2 types of independence:
a)Independence of mind
b)Independence in appearance
Ethics
Independence means
(a) Independence of mind - the state of mind that
permits the provision of an opinion without being
affected by influences that compromise
professional judgment, allowing an individual to act
with integrity, and exercise objectivity and
professional scepticism;
Ethics
(b) Independence in appearance - the avoidance
of facts and circumstances that are so significant a
reasonable and informed third party, having
knowledge of all relevant information, including
any safeguards applied, would reasonably
conclude a Firm’s, or a member’s, integrity,
objectivity or professional scepticism had been
compromised.
(APES 215)
Summary
Public Sector Accounting