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Manual of Accounting Principles

Manual of Accounting Principles

Issued 13-Feb-99

Page 1

Mastermap.doc

Manual of Accounting Principles

Table of Contents

TABLE OF CONTENTS 1 OVERVIEW - PURPOSE AND SCOPE OF THE MANUAL1.1 Purpose of the Manual 1.2 Structure of the Manual 1.2.2 Reader guidance 1.3 Authority, applicability, distribution and maintenance of the Manual 1.3.1 Authority 1.3.2 Effective date 1.3.3 Coverage 1.3.4 Compliance 1.3.5 Distribution, maintenance and update 1.3.6 Explanatory note

1.11.2 1.3 1.3 1.4 1.4 1.4 1.4 1.5 1.5 1.5

2 ACCOUNTING CONCEPTS2.1 Consolidated Fund and Public Account 2.1.1 Introduction 2.1.2 Certain funds and accounts to be kept by Governments 2.1.3 Consolidated Fund 2.1.4 Public Account 2.1.5 Explanatory note 2.2 Accounting Model 2.2.1 Introduction 2.2.2 Accounting elements 2.2.3 Revenues 2.2.4 Expenditure and commitments 2.2.5 Assets 2.2.6 Liabilities 2.2.7 Equity 2.2.8 Double entry book keeping 2.2.9 Classification of transactions 2.2.10 Explanatory note 2.3 Internal Control 2.3.1 Introduction 2.3.2 Definition 2.3.3 Explanatory note 2.4 Budgeting 2.4.1 Introduction 2.4.2 Budgeting 2.4.3 Explanatory note

2.12.2 2.2 2.2 2.2 2.2 2.2 2.5 2.5 2.5 2.5 2.5 2.6 2.7 2.7 2.7 2.7 2.8 2.12 2.12 2.12 2.12 2.13 2.13 2.13 2.13

Issued 13-Feb-99

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3 ACCOUNTING POLICIES3.1 Accounting period 3.1.1 Introduction 3.1.2 Accounting period 3.1.3 Explanatory note 3.2 Accounting records 3.2.1 Introduction 3.2.2 Definition 3.2.3 Making of proper entries 3.2.4 Errors omission and corrections 3.2.5 Maintenance of accounting records 3.2.6 Minimum periods for retention 3.3 Accounting elements 3.3.1 Introduction 3.3.2 Assets 3.3.3 Liabilities 3.3.4 Equity 3.3.5 Revenues 3.3.6 Expenses 3.3.7 Explanatory note 3.4 Banking 3.4.1 Introduction 3.4.2 Banking 3.5 Reporting 3.5.1 Introduction 3.5.2 Reporting 3.5.3 Explanatory note 3.6 Inter entity transactions 3.6.1 Introduction 3.6.2 Inter entity transactions

3.13.2 3.2 3.2 3.2 3.3 3.3 3.3 3.3 3.3 3.3 3.4 3.5 3.5 3.5 3.6 3.6 3.7 3.7 3.8 3.11 3.11 3.11 3.13 3.13 3.13 3.13 3.16 3.16 3.16

4 ORGANISATION OF FINANCIAL AND ACCOUNTING RESPONSIBILITIES4.14.1 Financial and accounting responsibilities of the Public Accounts Committee 4.1.1 Responsibilities 4.1.2 Constitution 4.1.3 Accountability 4.2 Financial and accounting responsibilities of the Auditor-Generals Office 4.2.1 Responsibilities 4.2.2 Legislative requirements 4.2.3 Accountability 4.3 Financial and accounting responsibilities of the Accountants-Generals Offices 4.3.1 Responsibilities 4.3.2 Accountability 4.2 4.2 4.2 4.2 4.3 4.3 4.3 4.4 4.5 4.5 4.5

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4.3.3 Explanatory note

4.5

4.4 Financial and accounting responsibilities of the Ministry of Finance - Finance Division (Federal) / Department (Provincial) 4.6 4.4.1 Responsibilities 4.6 4.4.2 Accountability 4.6 4.5 Financial and accounting responsibilities of the Central Board of Revenue 4.5.1 Responsibilities 4.5.2 Accountability 4.5.3 Explanatory Note 4.6 Financial and accounting responsibilities of the State Bank of Pakistan and its agent/s 4.6.1 Responsibilities 4.6.2 Explanatory note 4.7 Financial and accounting responsibilities of centralised accounting entities. 4.7.1 Responsibilities 4.7.2 Determination of entities to be included in Schedule 1 & 2 of this Manual. 4.8 Financial and accounting responsibilities of Schedule 1 entities 4.8.1 Responsibilities 4.8.2 Determination of entities to be listed in Schedule 1 4.7 4.7 4.7 4.7 4.8 4.8 4.8 4.9 4.9 4.9 4.10 4.10 4.10

5 FINANCIAL AND ACCOUNTING RESPONSIBILITIES OF ADMINISTRATIVE FINANCIAL AND ACCOUNTS OFFICERS 5.15.1 Financial and accounting responsibilities of financial officers 5.2 Financial and accounting responsibilities of Principal Accounting Officers 5.2.1 Position 5.2.2 Definition 5.2.3 Responsibilities 5.2.4 Accountability 5.2.5 Explanatory note 5.3 Financial and accounting responsibilities of the Financial Adviser 5.3.1 Position 5.3.2 Definition 5.3.3 Responsibilities 5.3.4 Accountability 5.3.5 Explanatory note 5.4 Financial and accounting responsibilities of Finance and Accounts Officers 5.4.1 Position 5.4.2 Definition 5.4.3 Responsibilities 5.4.4 Accountability 5.5 Financial and accounting responsibilities of Internal Audit Officer 5.5.1 Position 5.5.2 Definition 5.2 5.3 5.3 5.3 5.3 5.3 5.3 5.4 5.4 5.4 5.4 5.4 5.4 5.5 5.5 5.5 5.5 5.5 5.6 5.6 5.6

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5.5.3 Responsibilities 5.5.4 Accountability 5.6 Financial and accounting responsibilities of Project Director 5.6.1 Position 5.6.2 Definition 5.6.3 Responsibilities 5.6.4 Accountability 5.7 Financial and accounting responsibilities of Auditor-General of Pakistan 5.7.1 Position 5.7.2 Definition 5.7.3 Responsibilities 5.7.4 Accountability 5.7.5 Explanatory note 5.8 Financial and accounting responsibilities of Accountants-General 5.8.1 Position 5.8.2 Definition 5.8.3 Responsibilities 5.8.4 Accountability

5.6 5.6 5.7 5.7 5.7 5.7 5.7 5.8 5.8 5.8 5.8 5.8 5.8 5.10 5.10 5.10 5.10 5.10

6 SCHEDULE 1 - SELF ACCOUNTING ENTITIES6.1 Schedule of self accounting entities

6.16.2

7 SCHEDULE 2 - EXEMPT ENTITIES7.1 Schedule of exempt entities

7.17.2

Issued 13-Feb-99

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Manual of Accounting Principles

Overview

1 Overview - purpose and scope of the Manual

Issued 05/01/2002

Page1.1

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Manual of Accounting Principles

Overview

1.1

Purpose of the Manual 1.1.1.1 The purpose of this Manual is to: set out the accounting principles to be used in accounting for the transactions of centralised and self accounting entities within the control of the Federal and Provincial Government. It excludes exempt entities as defined in Schedule two of this manual outline the roles and accountability of specified organisations and officers of the centralised accounting and self accounting entities

1.1.1.2

This manual will cover the Principles, Policies and Procedures in relation to Centralised Accounting Entities and will only lay down the Principles for Self Accounting Entities because the Policies and Procedures for Self Accounting Entities are covered by their individual rules and regulations. This Manual defines the framework within which accounting transactions are to be treated and recorded, and accounting and financial responsibilities are to be assigned. Detailed accounting policies and procedures are contained in the Accounting Policies and Procedures Manual. Reference should be made to the Accounting Policies and Procedures Manual, Financial Reporting Manual, Chart of Accounts, Manual of External Reporting Requirements in determining the rules and procedures for the treatment and recording of specific transactions. Documents relevant to accounting and financial management of centralised accounting and self accounting entities include: Chart of Accounts Delegation of Financial Power under the Financial Rules Rules of Business Accounting Policies and Procedures Manual General Financial Rules Federal/Provincial Treasury Rules Financial Reporting Manual Manual of External Reporting Requirements

1.1.1.3

1.1.1.4

1.1.1.5

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Manual of Accounting Principles

Overview

1.2

Structure of the Manual 1.2.1.1 1.2.1.2 This Manual is in three parts. The first part of this Manual, comprising section 1, provides an overview of the purpose and scope of this Manual. The second part of this Manual, comprising sections 2 and 3, sets out the accounting principles to be used by centralised accounting and self accounting entities and upon which the detailed policies and procedures contained in the Accounting Policies and Procedures Manual are based. The third part of this Manual, comprising sections 4 and 5, outlines the financial and accounting responsibilities of specified organisations and financial officers There are two Schedules attached to this Manual. Schedule 1 is a list of all self accounting entities. Schedule 2 is a list of all exempt entities.

1.2.1.3

1.2.1.4

1.2.1.5 1.2.1.6 1.2.1.7 1.2.2

Reader guidance The organisation of the sections, headings and sub headings is shown in the Table of Contents at the front of this Manual. The layout of each page within this Manual is standardised. The title of the Manual and the name of the chapter are displayed in the top left and right corners of each page respectively. The footer for each page contains the issue date, page number and file reference. Each section of this Manual has the principles appearing at the front of the section. Any detailed or additional explanation and guidance is contained in the Explanatory notes subsection. Principles should not be interpreted without first making reference to the explanatory notes.

1.2.2.1

1.2.2.2

1.2.2.3

Issued 05/01/2002

Page1.3

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Manual of Accounting Principles

Overview

1.3

Authority, applicability, distribution and maintenance of the Manual 1.3.1 Authority This Manual is issued to set out the accounting principles in accordance with which the accounts of the federation and the provinces shall be kept, in pursuance of article, 170 of the Constitution of Islamic Republic of Pakistan.

1.3.1.1

1.3.2

Effective date The effective date for application of this Manual is the date