Accounting Practices in Nepal Sundar Shrestha Gobinda Bhandari  Concept  Accounting Information System  Accounting Practices in Nepal.

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Presentation transcript:

Accounting Practices in Nepal Sundar Shrestha Gobinda Bhandari  Concept  Accounting Information System  Accounting Practices in Nepal

Concept Accounting is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. It reveals profit or loss/ surplus or deficit for a given period, and value and the nature of a firm's assets, liabilities and owner's equity.

Accounting Information System  Input - Transactions or Events  Process - Principles, Procedures and accounting basis  Output - Financial Statement

Process Principles  Money measurement concept  Matching concept  Going Concern Concept  Double Entry/ Dual Effect  Cost Concept  Accounting Period  Realization Concept  Business Entity Concept

Process Procedures  Transactions  Recording  Classification  Summarizing  Interpretation and Evaluation  Communication

Process Basis  Cash Accounting Basis  Accrual Accounting  Hybrid Accounting Basis

Output Financial Statement  Balance Sheet  Income Statement  Cash Flow Statement  Statement of Changes in Equity  Notes, comprising a summary of significant accounting policies and other explanatory notes.

Income Statement (Aarthik Bibaran) of GoN  Income Statement will prepare (Aarthik Bibaran) of  Revenue  Expenditure  Deposit  Inventory  Others  Types of Income Statement  Aarthik Bibaran  Integreted Aarthik Bibaran  Central Aarthik Bibaran  Subsidiary Aarthik Bibaran  (Revenue: Tax Revenue and other revenue and Expenditure: Recurrent, Capital and Financing)  Approved budget- Budget release – Expenditure = Balance Expenditure = Budget release

Treasury Single Account  TSA is a unified structure of a government bank accounts that gives a consolidated view of government cash resources based on the principle of unity of cash and the unity of treasury, a TSA is a bank account or set of linked accounts through which is the government transactions all its receipt and payments. This system was started from Bhaktapur district.

Features of Accounting system of GoN  Double Entry System  Cash Basis  Budgetary Control over expenditure  Uniform Chart of accounts  Operating and central level

Features of Accounting system of GoN  Easy to maintain  Does not require substantiality skilled people

Weaknesses /shortcomings of government accounting system  Treats advance as either income or expenses  Non cash financial transaction do not pass through the formal book keeping system and accounting system  Ignores contingencies liabilities and assets  Does not support assets  Inter fund transactions are not properly treated  Activities costing is not possible under this accounting

Auditing Sundar Shrestha Gobinda Bhandari  Concept  Objectives  Approach  Process  Types

Concept Auditing is defined as a systematic and independent examination of data, statement, records, operations and performance of an organization for a specified purpose.

Objectives  Verify the accuracy of the books of account  Verify the validity of the documentary evidence of the transactions  Verify the system of internal check and control  Verify the assets and liabilities  Prevent errors and fraud  Detect errors and fraud

Auditing Approach  Compliance Audit Financial Statement Audit  Financial Statement Audit  Performance Audit

Audit Process  Notification  Planning  Examination  Documentation  Reporting  Follow Up

Types of Audit  Pre Audit  Internal Audit  Final Audit