Balance Sheet and Public Sector Reform Essay Example for Free

Balance shred and Public Sector Reform EssayFinancial lead1.1 Assess the relationship(s) betwixt a m acetary system or function and other systems or functions in an organisation Answer Information and records be of critical importance to the functioning and workling of systems in general, including organisational systems. Given the central importance of tuition and records to systems operation, including man sector organisations and the societies they exist to g overn, we should non be surprised to learn that public sector reform efforts that sink the information component often fail to meet their immediate objectives and the longer-term goal of establishing a framework for intimately governance. Efforts to improve the solicitude of public sector records in many countries have been hampered by a kerfuffle mingled with the field narrative and the disposals record-creating departments.The result has been that most of the records in the custody of the Archives be over forty course of studys old, while the records in government departments re principal(prenominal) unmanaged. Some National Archives have inspecting powers, but in that location are few professionals trained to manage current records. Moreover, there are rarely systems in place to ensure that semi-current and non-current records are transferred to secure accommodation or suitably destroyed. The introduction of computerized systems, often a key part of public sector reform projects, is compounding quick record-keeping problems. These computerized systems are using information that may be seriously flawed and based on collapsed paper-based systems.It is beca hire rough-and-ready management of records is so crucial to achieving public sector reform objectives, which lead to good governance, that restructuring must handle the management of records. Restructuring of records and archives management processes must be seen as an integral part of the restructuring of core governmen t processes to ensure the success of public sector reform efforts. 1.2 Describe the systems of accounts and pecuniary statements used to keep back a financial system Answer Financial statements are the primary means of communicating financial information to parties outside the business organization. The four basic financial statementsBalance SheetIncome resignmentStatement of exchange FlowsStatement of Retained EarningsACCOUNTING SYSTEMSIn small enterprises there sess be incompatible kinds of write up systems much(prenominal) as external, indispensable and tax report. Annex 3 summarises data per Member State concerning accounting system requirements for small enterprises. On the origination of this data, the following descriptions of accounting systems are given inborn accountingInternal accounting, likewise called management accounting is based on the enterprises internal accounting procedures and recorded accounting information. Internal accounting is intended for man agers within organizations, to provide them with the economic priming coat to make informed business decisions that would allow them to be better equipped in their management and control functions.For example, managers may want to be able to assess the contribution or the profitability of different products or services that they supply by comparing the revenues and costs that they generate. Un same external accounting information, internal accounting is usually confidential and it is accessible tho to the management. In most cases, small enterprises do not use internal accounting at all due to their size. Internal accounting is conveningly not governed by national legislation. However, in some Member States internal accounting is compulsory even for small enterprises. away accountingExternal accounting, excessively called financial accounting is concerned with the preparation of financial statements for decision makers, such as the owners, suppliers, banks, governments and its a gencies, customers and other stakeholders outside the enterprise. External accounting makes use of the accounting information from the internal accounting system. In the preparation of the external accounting, the small enterprise may be governed by local 1.3 crumple financial information contained in a set of accounts or financial statements Answer The two main sources of data for financial abbreviation are a companys residuum tag and income statement. The quietus stable gear outlines the financial and physical resources that a company has available for business activities in the future. It is grave to note, however, that the balance sheet simply lists these resources, and makes no judgment about how well they will be used by management.For this reason, the balance sheet is more useful in analysing a companys current financial position than its expected operation. The main elements of the balance sheet are assets and liabilities. Assets generally include both current asse ts ( cash in or equivalents that will be born-again to cash within one year, such as accounts receivable, inventory, and prepaid expenses) and noncurrent assets (assets that are held for more than one year and are used in running the business, including fixed assets like property, plant, and equipment long-term investments and intangible assets like patents, copyrights, and goodwill). Both the total amount of assets and the makeup of asset accounts are of interest to financial analysts. The balance sheet in any case includes two categories of liabilities, current liabilities (debts that will come due within one year, such as accounts payable, short-term loans, and taxes) and long-term debts (debts that are due more than one year from the date of the statement).Liabilities are important to financial analysts because businesses have same obligation to pay their bills regularly as individuals, while business income tends to be less certain.Long-term liabilities are less important to analysts, since they lack the urgency of short-term debts, though their heraldic bearing does indicate that a company is strong enough to be allowed to borrow money. The balance sheet also commonly includes stock-holders virtue accounts, which detail the permanent capital of the business. The total equity usually consists of two move the money that has been invested by shareholders, and the money that has been retained from profits and reinvested in the business. In general the more equity that is held by a business, the better the ability of the business to borrow additional funds. In contrast to the balance sheet, the income statement provides information about a companys performance over a certain period of time.Although it does not reveal much about the companys current financial condition, it does provide indications of its future viability. The main elements of the income statement are revenues earned expenses incurred, and net profit or loss. Revenues consist mainly of sal es, though financial analysts may also note the inclusion of royalties, interest, and extraordinary items. Likewise, run expenses usually consist primarily of the cost of goods sold, but put forward also include some unusual items. Net income is the bottom line of the income statement. This figure is the main forefinger of a companys accomplishments over the statement period.Read more http//www.answers.com/topic/financial-analysisixzz1uKymsDuW 2.1 As a manager you necessitate to totaly understand your role in the cypherary process. It is the most basic financial planning and control tool. Every manager asks to know what costs are associated with their department, and how in relation are they doing to that work out. You cleverness achieve your departmental goals, but if you go over budget in order to achieve those goals, you have financial problems for the company and jeopardize your own job performance brushup. In most cases, part of your performance appraisal will be bas ed on whether or not you were within budget for the year.Budgets need to be realistic. You cant just say at a whim you need 20 new people, just as upper management cant say you have only $10 for a years worth of training classes. Budgets are used to investigate variances, whether you went over or under budget, and address the reasons for the variances. You need to always look at ways to control those variances by positive costs. By being on top of your budget, you might be able to make changes before its too late and you end up having to reduce staff or eliminate a split up of your department. There are basically two types of budgets, a capital expenditure budget and operating budget1. Capital expenditure (also known as Capex) relates to costs associated with plant and equipment. This is equipment that generally lasts for more than a year such as a copy machine.2. Operating budget, which is related to the normal day-to-day operations and expenditures such as payroll, supplies, and miscellaneous. There are two types of budgets within an operating budget, sales budgets and expense budgets Sales budget is associated with comparison and variance of the developed revenue brought with the projected revenue. Expense budget applies to all areas incurring operating expenses, including the sales department. This is the budget we will focus on.CASH BUDGET FOR 90 DAYSBeginning cash balance $ 320,000 AddEstimated collections on accounts receivable750,000Estimated cash sales 250,000 $1,320,000 DeductEstimated payments on accounts payable $ 800,000 Estimated cash expenses 150,000 contr unquestionable payments on long-term debt 150,000 Quarterly dividend 50,000 $1,150,000 Estimated ending cash balance $ 170,0002.2 Budgetary Control is defined as the establishment of budgets, relating the responsibilities of executives to the requirements of a policy, and the continuous comparison of actual with budgeted results either to secure by individual fill the objective of that po licy or to provide a base for its revision. 2. Salient featuresa. Objectives Determining the objectives to be achieved, over the budget period, and the policy (ies) that might be adopted for the achievement of these ends. b. Activities Determining the variety of activities that should be undertaken for achievement of the objectives. c. Plans Drawing up a plan or a scheme of operation in note of each class of activity, in physical as well as monetary terms for the full budget period and its parts. d. Performance Evaluation Laying out a system of comparison of actual performance by each person section or department with the relevant budget and termination of causes for the discrepancies, if any.e. Control Action Ensuring that when the plans are not achieved, corrective actions are taken And when corrective actions are not possible, ensuring that the plans are revised and objective achieved. Budgetary Control is an integral part of management. It consists in comparisons between the r esults of actual performance and budgeted performance. Central to this kind of comparison is Standard Costing and Variance synopsis. The purpose of this name is to clarify simply to the leaner, reader, and others peoples who related with accounts, budgets, costing department.01. Variance AnalysisIn a well-run organization the comparison between actual and budget is used as the basis for deciding the appropriate action. This document sets out how the analysis is used to highest effect. The procedure is actually part of the normal control process. Any variation from expected performance, in terms of budgets, where income or expenditure did not move on as expected. Variance analysis is the act of find out the drivers for those variations. Variances are noted and accounted for. A decision can be made to reduce expenses or reallocate resources.This technique greatly reduces the need for comprehensive review cycles. 2.3 Budget and Budgetary control, both at management and operationa l level looks at the future and lays down what has to be achieved. Control verifies whether or not the plans are understood, and puts into effect corrective measures where deviation or underperformance is occurring. This article Techniques of Budgetary Control examines how budget and budgetary control can impact on the performance of the organizationsTechniquesBudgetary Control is an integral part of management. It consists in comparisons between the results of actual performance and budgeted performance. Central to this kind of comparison is Standard Costing and Variance Analysis. The purpose of this article is to clarify simply to the leaner, reader, and others peoples who related with accounts, budgets, costing department. What variance analysis is all about, avoiding pure technicalities and the terminology of accountants? check is confined to costs and cost variances in this article. A similar dealing of revenue and revenue variances would also be compulsory to acquire a proper perspective. Following explained The Budgetary Control Techniques01. Variance AnalysisIn a well-run organization the comparison between actual and budget is used as the basis for deciding the appropriate action. This document sets out how the analysis is used to highest effect. The procedure is actually part of the normal control process. Any variation from expected performance, in terms of budgets, where income or expenditure did not occur as expected. Variance analysis is the act of determining the drivers for those variations. Variances are noted and accounted for. A decision can be made to reduce expenses or reallocate resources. This technique greatly reduces the need for comprehensive review cycles.