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Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–3
Introduction (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–4
Introduction (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–5
Introduction (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–6
Accountants and the Public
Sector
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–7
Accountants and the Public
Sector (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–8
Accountants and the Public
Sector (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–9
Accountants and the Public
Sector (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–10
IPSAS Conceptual Framework
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–11
IPSAS Conceptual Framework
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–12
IPSAS Conceptual Framework
(cont.)
MPSASs
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–14
IPSAS Conceptual Framework
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–15
IPSAS Conceptual Framework
(cont.)
Information Needs of
Service Recipients and
Compliance
and
stewardship
Resource Providers
Fact and Basis of
figures planning
Reasons for
financial
reporting in the
public sector ;
Statement of Performance
achievement evaluation
Quality of
services
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–16
IPSAS Conceptual Framework
(cont.)
Non-exchange Transactions
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–17
IPSAS Conceptual Framework
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–18
Basis of Accounting
revenues that are recorded on the date cash is received; revenues and expenses are recorded on the date they
and expenses are recorded on the date cash is paid. are occurred whether there is exchange of cash or not
Not accurate contains more accurate and timely transactions
compared to cash accounting
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–19
Basis of Accounting (cont.)
Modified Modified
Cash Full accrual
cash accrual
accounting accounting.
accounting accounting
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–20
Basis of Accounting (cont.)
Cash Basis
The cash basis - an accounting basis that only reports
on cash balances and cash flows (inward and outward).
It measures cash flows at the time accounting
transactions actually take place.
This basis does not follow the matching concept.
Depreciation of assets is not provided for, which causes
cash accounting to tend to hide basic information e.g.
missing information relating to fixed assets, debtors and
creditors.
Assets are written off in the year of purchase.
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–21
Basis of Accounting (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–22
Basis of Accounting (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–24
Basis of Accounting (cont.)
It has limited basis for determining fiscal strategy, limited
product or service pricing and has limited disincentives
against fraud and corruption
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–25
Basis of Accounting (cont.)
Accrual Accounting
In accrual accounting, revenues and expenses are
recorded when they are earned, regardless of when the
money is actually received or paid.
a well-accepted method of accounting worldwide and is
mainly used in the private sector. Increasingly, the public
sector is also moving towards accrual accounting as it
helps governments to obtain a better picture of the
performance of their policies.
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–26
Basis of Accounting (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–27
Basis of Accounting (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–28
Basis of Accounting (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–29
Basis of Accounting (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–30
Fund Accounting System
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–31
Fund Accounting System
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–32
Fund Accounting System
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–33
Fund Accounting System
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–34
Fund Accounting System
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–35
Fund Accounting System
(cont.)
Revenue
Trust Account Loan Account
Account
The Consolidated Account
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–36
Fund Accounting System
(cont.)
• Adjustment deposits -
temporary accounts that
are used before payments
or adjustments are made
to actual accounts
(Accountant General’s
Department, 2016).
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–38
Fund Accounting System
(cont.)
Consolidated Fund
All government revenues and moneys received have to
be accounted for into a fund, known as the
Consolidated Fund.
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–39
Fund Accounting System
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–40
Fund Accounting System
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–41
Fund Accounting System
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–42
Fund Accounting System
(cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–43
Accounting Systems in the
Malaysian Public Sector
An integrated centralized
Starting from accounting system to further
1 June 2018 Develop accrual accounting
at the national level.
An accounting system
that was used by the
Accountant General’s
Department since
Developed to further
2006.
strengthen the government’s
Capable of facilitating payment process and also to
financial planning, account for government
iGFMAS
budget control and revenue collections
government more efficiently
accounting.
GFMAS
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–44
Accounting Systems in the
Malaysian Public Sector (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–45
Accounting Systems in the
Malaysian Public Sector (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–46
Accounting Systems in the
Malaysian Public Sector (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–47
Accounting Systems in the
Malaysian Public Sector (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–48
Accounting Systems in the
Malaysian Public Sector (cont.)
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–49
Federal vs State Accounting
System
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–50
Federal vs State Accounting
System
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–51
Federal vs State Accounting
System
Public Sector Accounting Governance and Accountability in the Malaysian Context All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2019 5–53