The New Government Accounting System: Issues in Public Audit 1 Introduction Historically, the growth of government auditing and accounting in the Philippines was greatly influenced by the administrative practices in the United States, so much so that during the time that the General Accounting Office in the United States was responsible for the government’s accounting, that concept was similarly introduced in the Philippines. Unfortunately, by the time the practice was abandoned in the United States in favor of a better system, the Philippines has then become independent and hence the change was not followed here.2 COA Promulgates New Accounting System Unlike in the United States where accounting standards are formulated by the Federal …show more content…
It has, among others, updated many aspects in public accounting to keep in step with the current development in governance. This writer, however, doubts whether the design, development and installation of the accounting system for agencies of government is a proper function of the Commission on Audit, being at the same time their external auditor. Firstly, it is not among the stated functions of COA under the law; and secondly, it violates the generally accepted government auditing standards. Assuming arguendo that COA has legal basis to undertake such function, yet the New Government Accounting System (NGAS) contains some components that ignore, if not violate certain accounting provisions prescribed by existing laws. In support of this position, this writer offers the following: A. Developing accounting system is not a function of COA. The functions of the Commission on Audit are clearly stated in Section 25 of the Government Auditing Code of the Philippines, and there is nothing in the enumeration about developing accounting systems. Of course the function of COA “to promulgate accounting rules and regulations” appears, as also mentioned in the Constitution6, but such authority is not analogous to the function ‘to formulate accounting system’. There is an accepted distinction between a “system” and a “regulation”. The term “system” is defined as a regularly interacting or
Accounting is the methodical and full recording of financial transactions relating to a business, and it also denotes to the procedure of briefing, examining and evaluating these transactions to cross checking agencies and tax collection agencies. Accounting is one of the key purposes for nearly any company. It may be done by an auditor and accountant at small businesses or by substantial finance subdivisions with lots of employee’s at
Another outcome of the law is, Public Company Accounting Oversight Board (PCAOB), a public agency was created .This agency act as auditors of the public company .Their area of work is overseeing, regulating and inspecting accounting firms. The act also deals with issues such as auditor independence, internal control assessment, corporate governance and enhanced financial disclosure. The non-profit arm of Financial Executives International, Financial Executive Research Foundation completed a thorough research studies to help support in the foundation of the
By adding the auditing process to line-item budgeting, government management focuses on expenditures, thus creating a type of accountability that confronts corruption, helps discourage public employees deviating from strict instructions, and enhances tighter control over the employees’ behavior. For these reasons, most governments utilize some form of line-item budgeting at some level within their organization” (Smith & Lynch, 2004).
In 2015, the Legislative Joint Auditing Committee audited Hector School District. In the Summary of Auditor’s Results and Financial Statement Findings, the auditors did indicate a material weakness in internal control. Here, the specific requirement noted that management is where the responsibility falls for implementing sound accounting policies and maintaining internal control over financial procedures that are consistent with their own assertions found in the financial statements. The stated condition for this material weakness was that the district failed to segregate financial duties among qualified employees. Instead, one sole employee was in charge of all of the financial accounting duties. Thus, the school
Legitimacy in accounting practices is ensured by the check and balance of having independent auditors from registered public accountant firms reviewing financial practices. The report features eleven sections and these sections pertain to accounting overview, independence of auditors to reduce interest conflicts, corporate responsibility, financial disclosures, tax returns, criminal fraud and various elements of white collar criminal activity (107th Congress
16. Which of the following federal officials is a "principal" of the Joint Financial Management Improvement Program who considers and approves or disapproves accounting and reporting standards recommended by the Federal Accounting Standards Advisory Board?
The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board (PCAOB) to assume the responsibility of overseeing the auditors of public companies. The PCAOB is a private-sector, non-profit corporation. It was established to "protect the interests of investors and further the public interests in the preparation of informative, fair, and independent audit reports". (The PCAOB) Although the PCAOB is a private sector organization, it has many government-like regulatory functions. The PCAOB was created in response to an increasing number of accounting restatements by public companies during the 1990s and a series of recent high-profile scandals like Enron and WorldCom. Prior to the PCAOB, the audit industry was self-regulated
The act endorses companies to change the practice and regulations of accounting and auditing. It required them to maintain good financial recorded which were different than the past. The management team is held personally liable for the reliability and accuracy of the financial statements. All publically listed companies must establish a system of internal controls which must be evaluated by management at least quarterly and external auditors are required to conduct independent assessments of company’s in –house internal controls as well as report any fault or fraudulent acts they observe.
According to the Association of Chartered Certified Accountants, the United States has been generally regarded as being advanced in PFM, offering practices ranging from sophisticated fiscal and policy frameworks and a focus on performance management to the production of the accrual‐based, audited, consolidated whole of government accounts for the public sector. Empirical evidence is not readily available however, the insufficient number of appropriately qualified finance personnel working in the public sector, including accounting technicians, is generally recognized, and is of concern, as it severely affects countries’ ability to achieve effective PFM (2010). These factors our co-hort discussed over our three weeks of study within the course of Fiscal Management however, there are more factors in complications within public fiscal management to consider that has impacted my writing and
This report provides information about the Public Company Accounting Oversight Board for Dr. Mack. The information includes the history and creation of the PCAOB, its structure, and its duties in today’s accounting world.
donations that must be kept intact, but whose income must be used to beautify parks
establishment of an independent Public Company Accounting Oversight Board (Public Company Accounting Oversight Board, PCAOB), the audit of listed companies supervision ;
The Public Company Accounting Oversight is a nonprofit corporation which, in 2002, Congress granted power to inspect, investigate, establish auditing guidelines and set standards for public accounting firms who provide independent auditing reports. The purpose is to create guidelines and rules to protect all stakeholders who would utilize financial reports, especially the general public and investors. An increase in transparency and accountability grants
Regulation is defined as a set of rules that is designed to control and govern conduct by authority (Deegan 2009, p.59). On the basis of this definition, Deegan (2009, p.59) has defined regulations relating to financial accounting as rules that are developed by independent authoritative body to govern the preparation of financial statements which are accounting standards. Since decades ago, there have been arguments for and against the existence of accounting regulations. With a stance of pro-regulation, this essay is going to examine the reasons that financial accounting and reporting should be regulated and the merits of accounting regulations.
An important function of the accounting field is to provide external users of financial statements with assurance that the financial information being presented is both reliable and accurate. This basic function of accounting is so important that there is an entire field of experts, called auditors, dedicated to assuring its proper performance. Throughout history there have been many instances in which the basic equilibrium between an institution and current/potential investor has been threatened due to a lack of accountability and trust between the two parties. This issue has been the catalyst for many discussions regarding the proper procedures a firm should follow in order to provide