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Public Sector Accounting

In: Business and Management

Submitted By sien0411
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Chapter 1 Introduction to Public Sector Accounting
Public sector is the government organizations which are set up to governance the activity of citizens and power to set up the rule to enable the citizens can live with harmony and also help them to resolve the problem more efficiency.
Public sector accounting is the information system that records, analysis, classifies, summarizes and communicates public sector entity financial and economic events, and their impacts, in term both which are emphasis in proper accounting maintenance of books and all records, compliance with the related laws, rules and regulations and comprehensive and accurate reports to help the related parties to make decision. (Syed Soffian Syed Ismail, 2011)
Private sector is the organizations that are develop by individuals which purpose is to get profit and is not state controlled. The private sector is included all for profit business that is not operating by the government and not more social responsibility.
Private sector accounting is consists of three basic activities that is identifying, recording and communication the economic event of a company. That is identify economic event such as transactions and investments, uses bookkeeping to systematic record the economic event and also use the financial statement to present their report to the people who are using that accounting information. (Roslyn Frenz)
Differences between Public Sector Accounting and Private Sector Accounting | Public Sector Accounting | Private Sector Accounting | Component | * Federal Government * State Government * Federal Statutory Bodies * State Statutory Bodies * Islamic Council of Malaysia | * Board of Director * Top management | Objective | It is accountable to the public which to ensure that the accounting prepare by public sector is reliable and accountability. | It is accountable to the shareholders and also potential investor who are interest to do investment. | Prepare by | Public sector accounting is prepare by the Treasury which issues instructions and direction on accounting matters and procedures, monitor that proper systems of accounts are established and ensure that procedures comply with generally accepted accounting principles and standards. | Private sector accounting is prepare by the accounting department of the company who accountants is employed by the company. | Accounting Year | Is start from 1st January- 31st December | Is according to the year incorporation. For example, a company incorporates in 1st April, so the accounting year is start from 1st April-31st March. | Accounting Basic | Review attachment 1 | Accrual Accounting | Budget Preparation | It is mandatory for the public sector to prepare the budget. For example, every year will be a speech of budget which are held by the prime minister. | It is voluntary for the private sector to prepare the budget. For example, they will prepare budget as there are activity such as they want to tender for a project. | Appointment of Auditor | Regulated in Federal Constitution | Board of Directors during the Annual General Meeting | Accounting System | Review attachment 2 | Based on the system that the company has creates, outsources or buy in. | Achievement | Differing goals such as protect the citizens welfare, protect the economic environment and ensure country development is efficiency and effective. | Only one goals that is gain profit. |

(Negara, 2012)
From the above graph show that the cycle of accounting of public sector accounting. The fund of public sector is get from the tax government, deposit, money that receive from lend and lending from country or outside the country. Its show that all the fund will be integrated to the ‘Kumpulan Wang Pembangunan’ and will transfer to the ‘Kumpulan Wang Penjelasan’.
However, the private sector accounting profit is get from their sales, investment and etc. When doing the accounting first it starts from: 1. Analyze and journalize the transactions 2. Post the journal entries to the general ledger accounts 3. Prepare the trial balance 4. Journalize and post the adjusting entries 5. Prepare an adjusted trial balance 6. Prepare financial statements 7. Journalize and post the closing entries 8. Prepare a post-closing trial balance

Attachment 1 Component | Accounting Basic | Federal | Modified Cash Basic | State | Modified Cash Basic | Local Government | Modified Accrual Accounting | Statutory Bodies | Accrual Accounting | Islamic Council Of Malaysia | Modified Accrual Accounting |

Modified Cash Accounting- Transaction and other events are recognized on a cash basic during the year. Any unpaid accounts and receivables are taken into account for a month after the year end. (Datuk Wan Selamah binti Wan Sulaiman, 2011)
Accrual Accounting- Economic events are recognized when they occur regardless of when cash transaction occur, meaning economic events are recognized by matching revenues to expenses at the time in which the transaction occurs rather than when payment is made or received. (Datuk Wan Selamah binti Wan Sulaiman, 2011)
Modified Accrual Accounting- Transaction and other events are recognized on accrual basis, but certain classes of assets or liability are not recognized. For example, the expensing of all non-financial assets at the time of purchase. (Datuk Wan Selamah binti Wan Sulaiman, 2011)

Attachment 2 Components | Accounting System | Federal | Government Financial and Management Accounting System(GFMAS) | State | State Government’s Standard Computerised Accounting System(SPEKS) | Local Government | Standard Accounting System for Government Agencies(SAGA) | Statutory Bodies | Standard Accounting System for Government Agencies(SAGA) | Islamic of Councils | Standard Accounting System for Government Agencies(SAGA) |
(Datuk Wan Selamah binti Wan Sulaiman, 2011)

Bibliography
Datuk Wan Selamah binti Wan Sulaiman, A. G. (2011).
Negara, J. A. (2012). Jabatan Akauntan Negara. Retrieved from http://portal.anm.gov.my/en/main.php?Content=vertsections&SubVertSectionID=27&VertSectionID=3&CurLocation=3&IID=&Page=1.
Roslyn Frenz, e. C. (n.d.). eHow. Retrieved from http://www.ehow.com/info_8120801_business-accounting.html.
Syed Soffian Syed Ismail, E. I. (2011). Public Sector Accounting and Financial Management in Malaysia. Pearson Malaysia Sdn Bhd.

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