ETHIOPIAN DEFENCE UNIVERSITY

DEPARTMENT OF ACCOUNTING AND

FINANCE ASSESSEMENT ACCOUNTING
AND REPORTING PRACTICE OF ETHIOPIAN
DEFENCE UNIVERISTY
PRINCIPAL INVESTIGATOR NAME:- ALEMAYEHU FITANI
ID.0009/12

ADVISOR: MAHELET, D

DATE----------------------
BISHOFTU, ETHIOPIA
 APPROVAL SHEET
ASSESSEMENT OF ACCOUNTING AND REPORTING PRACTICE

ETHIOPIAN DEFENCE UNIVERISTY

PRINCIPAL INVESTIGATOR: ALEMAYEHU FITANI

ID. 0009/12

APPROVED BY THE COMMITTEE OF EXAMINER

MAHELET, D

Examiner Signature

ASSESSMENT OF ACCOUNTING AND REPORTING PRACTICE IN THE CASE

AREA OF ETHIOPIAN DEFENCE UNIVERISTY
APPROVAL BY THE COMMITTEE OF EXAMINERS

DEPARTMENT OF HEAD __________________________

ADVISOR ----------------------------------------

INTERNAL EXAMAINER --------------------------------------

EXTERNAL EXAMAINER -----------------------------------------

ACRONYMS

AABE Auditing accounting board of Ethiopia

E.C. Ethiopian calendar

FDRE Federal democratic republic of Ethiopian

FASB Financial accounting standards board

IASB. International accounting standards board

IFRS. International financial reporting standards

LLB Bachelor of degree Law

MSEs. Micro small enterprises

NGO'S. National governmental organization

SMEs. Small micro enterprises

TVT. Technical and vocational training

IPSAS international public sector accounting

ACCA American certified accountants

FGECA Federal government of Ethiopian chart of account

 TABLE OF CONTENT

Chapter one

Acronyms-----------------------------------------------------------------------------------
-----------i

Contents-------------------------------------------------------------------------------------
------ii-iii

Abstract
----------------------------------------------------------------------------------------------------------------
---IV

.I Introduction
-----------------------------------------------------------------------------------------------------------1

1.2 Background of the

organization----------------------------------------------------------------------------1

1.3 Statement of the

problem--------------------------------------------------------------------------------------3

1.4 Basic research questions

-----------------------------------------------------------------------------------4

1.5 Objectives of the

study----------------------------------------------------------------------------------------4

1.5.1 General
objectives---------------------------------------------------------------------------------4

1.5.2 Specific
Objective----------------------------------------------------------------------------------4

1.6 Scope of the Study

---------------------------------------------------------------------------------------------8

1.7 Significant of the

study---------------------------------------------------------------------------------------8

1. 8 operation terms
-------------------------------------------------------------------------------------------------9

1.8.1
Accounting------------------------------------------------------------------------------------9
 1.8.2 Operation accountant
duties---------------------------------------------------------9

1.8.3
Auditing--------------------------------------------------------------------------------------10

1.9 organization of the

study----------------------------------------------------------------------------------10

Chapter two

2. Related Literature
Review------------------------------------------------------------------------------11

2 .1 Theoretical
literature-------------------------------------------------------------------------------------11

2 .2 Empirical
literature----------------------------------------------------------------------------------------12

2.3 international Accounting

Principles-----------------------------------------------------------------16

2.3.1 Basic
Assumptions----------------------------------------------------------------------------16

2.3.2 Basic
Principles---------------------------------------------------------------------------------17

2.4 The Accounting

process-----------------------------------------------------------------------------------19

2.5 Recording business transactions and events---------------------------------------------------19

2.6 The cash and accrual basis of accounting-------------------------------------------------------

19

2.7 Double entry

system-----------------------------------------------------------------------------------------19
2.8 Accounting
period-------------------------------------------------------------------------------------------20

2.9 Accounting
cycle----------------------------------------------------------------------------------------------20

2.10 Conceptual
Framework-----------------------------------------------------------------------------------20

2.11 Elements of Financial

Statements-------------------------------------------------------------------21

2.12 Importance of good

record------------------------------------------------------------------------------21

2.13 Cost of
capital-------------------------------------------------------------------------------------------------22

2.14
Investment---------------------------------------------------------------------------------------------------
---22

2.15 Budget
fund-----------------------------------------------------------------------------------------------------23

2.16 Budget
preparation------------------------------------------------------------------------------------------23

2.17 Primary financial

statement----------------------------------------------------------------------------23

2.18 Annual financial

reporting--------------------------------------------------------------------------------24

Chapter three

3. Research
Methodology-----------------------------------------------------------------------------------25

3.1 Research
Design----------------------------------------------------------------------------------------------25
3.2 Data type & its
source--------------------------------------------------------------------------------------25

3.3 Sampling design and sample

size-------------------------------------------------------------------25

3.4 Methods of data

collection------------------------------------------------------------------------------26

3.5 Data analysis

method--------------------------------------------------------------------------------------26

Appendix one__________________________________________________---------
___27-29

Appendix two__________________________________________________------------
____30

Sources------------------------------------------------------------------------------------------------------
----31
Abstract

The research is planned to be conducted by titling it “The assessment of accounting & reporting
practice the case area of Ethiopian Defence University the research proposal will be carried out to
evaluate the accounting and reporting practice with the prior established principles and concepts.
The study is proposed to be carried out with the general objective of assessing the accounting and
reporting practice of the university. Further the study will specified at assessing the verifiability and
timeliness of the financial reports. It will also evaluate if the Ethiopian defence university followed the
accounting and reporting practice throughout its Operation .The methodology section of this
proposal contains research design, data type, data source, sampling technique and data collection
technique. The study is classified as research since it will possess combine Abstract the probability
sampling techniques. Various data collection techniques will be applied.

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 Chapter One
1. Introduction
Accounting to the process of analyzing, recording, summarizing, evaluating and interpreting an
organizations financial activity and stated and communicating the result to the users.
Organizations are generally classified into for- profit (commercial or business) organizations and non-
profit (Not-for- profit) organizations. Non-profit organizations are in surn classifieds into
governmental and non-governmental organizations based on their objectives. Government
organizations include federal, state, local government agencies, Ethiopian Defence University is one
non-profit organization then the Researchers are also interested in accounting and reporting practice
for interpretation. Research Scholars aims of accounting information, being a mirror of the financial
performance of organization, is of immense value to the research scholar who wants to make a
study into the financial operations of a particular firm. To make a study into the financial operations
of a particular firm, the research scholar needs detailed accounting reporting practice information
relating to purchases, , expenses, cost of materials used, current assets, current liabilities, fixed
assets, long-term liabilities and which is available in the accounting record maintained by the firm.
The management of the organization necessitates the making of plans, the formulation of judgment
and the issuing of instructions. To be trust worthy these plans judgments and instructions must be
based on accurate and comprehensive information, and this information must be obtained in large
part from the accounting and statistical records. Not only must such records be kept, but the
information they contain must be analyzed, presented and interpreted, if proper judgment is to be
made and proper action to be taken. To this end an organization must be set up and made
responsible for its accomplishment.

1.2 Back ground of the organization

The study's primary goal will to be evaluate the challenges and practices of running Ethiopian
Defense University and to offer solutions to the issues the researcher discover. The three
colleges under Defense University receive a copy of the study.

Defense Health College, Defense Resource Management College and Defense Engineering College
are these Defense University. Every successful institutional end eavor result from the
application of imaginative leadership toward some broadly agreed-upon feasible goals.

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On the other side, poor leadership can be a major factor in the collapse of organizations,
especially institutions of higher learning. As instructional programs are implements in higher
education settings, good leadership is crucial at this level.

Because success in any educational institution depends much on effective and sound
leadership, inadequate leadership at the higher education level is the one that negatively
impacts the advancement of education.

Every nation's development and empowerment start with education. It is essential for
comprehending and engaging in daily life in the modern world. It strengthens one's character
and is crucial in passing on one's culture, ideas, and values to others in the community.

Therefore, education is more important than ever to provide the next generation with the
skills and knowledge necessary for a living as well as to in still in them a sense of social
awareness, an independent spirit, and a scientific mindset, all of which are crucial for them to
become responsible citizens (Hoy, W.K., 2000).

To support this claim, Full an, M. (2006) notes that education has gained prominence in
recent years because it encourages participation from a wide range of people. It is also
inextricably linked to human life. Both genders should pursue education.

A nation's development depends greatly on its level of education. A nation may fall behind
other nations that promote education if it does not have adequate education.

The most significant institution supporting and promoting rapid socioeconomic development
is the educational system, notably higher education. Similar to other organizations,
educational institutions have objectives to meet.

The Ethiopian National Defense Forces were established as an institution in accordance with
proclamation number 27/88, and since that time, they have strengthened their unit through
extensive training across a variety of disciplines in institutions grouped as the Defense
University College and, later, the Defense University.

Additionally, a number of military training facilities will build to improve the Defense
Forces' technical prowess, military prowess, and capability.

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 Likewise, Defense University will contribute significantly to the Ministry of National Defense
by developing professionals and experts in the domains of civil and military engineering,
health, resource management, and other technology fields Ministry of National Defense.

Ethiopian Defense University is structurally arranged within the Federal Democratic

Republic of Ethiopia's Ministry of National Defense.

The University is primarily found to do research, community service, and teaching-learning

activities, all of which allow it to play a significant role in developing human resources for
the Ministry of Defense and the entire nation.

These include the colleges of engineering, human resource and health. Currently, the three
colleges and the administration building are located in Debrezeyit town, some 45 kilometers
outside of Addis Ababa.

The university plays a significant role in achieving the institution's goals, and it must be
successfully and efficiently organized, rehearsed, and well-structured.1.11 o the

1.3 Statement of the problem

-It is expected that Ethiopian defense University have a formal way of record keeping and fair
presentation of financial affairs based on the accounting theory practices set for non-
profit organizations. Most governmental organization faces some problems in implementing
and applying the theories and practices of by using timely accounting and reporting practice
and appropriate budget accounting systems.
- If promised budget is not obtained to finalize the report of financial and reporting practice?
- The variation between budgeted and actual and their consequence in the accounting and
Reporting practice?
-- Inconsistency in implementing and applying the principles set by FASB in relation to
governmental organization accounting?
--Not preparing financial reports covering all budget and financial transaction during the
period?
As a result of these possible problems, the study will attempt to answer the following basic
Question.

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1.4 BASIC RESEARCH QUESTIONS

1. How does registration and control work ? Do all financial departments have complete human
resources and qualified professionals?
2. Registration and control is done based on all source documents?
3. Which programming system are you using? If it is manual or ibex
Programming, it will read all the ledgers separately?
4. Monthly report is submitted on time? Additional report covers all account categories i.e.
income, expenses, payables, account receivables bank account and whether a read report is
provided?

1.5 Objectives of the study

1.5.1 . General of objective

The general objective of the study is to assess the accounting and reporting practice of
Ethiopian Defence University.

1.5.2. Specific objectives

-To evaluate whether it has accounting manual or not and its consistency with the FASB
standard.
- To check whether the report includes all financial statements?
- To assess the reliability, relevance and time lines of the report?
- To check the preparation of financial statements are according to the standard or the need of
The user because of the organizations mainly gets its budget from government?

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Using account of reporting purpose according to governmental organization

BALANCE SIDE
Code Description Debit Credit

1 4008 – 01 Transfer (salary) ###

2 4008 – 02 Transfer other ###
3 1000--1799 Revenue ###
4 5000-5999 Payables ###
5 6000-6999 Expenditure ###
6 4210-01/02 Receivables ###
7 4101 Cash at safe ###
8 4103 Cash at bank ###
9 6111 Civil salary ###
10 6112 Military salary ###
11 6113 Contract employee salary ###

12 6121 Contract ###

13 6122 Military ###

14 6123 Contract ###

15 5004-01 Payables of salary (civil) ###

16 5004-02 Payables of military salary ###

17 5004-03 Payables of civil (contract) ###

18 5004-04 Payables of contract ###

19 5004-05 Payables of military ###

20 5004-09 Payables of contract ###

21 5052 Payables of court case ###

Balance
### ###

N.B. the table are shown only components

of code 4008-01/02

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Transaction cycle of accounting and reporting practice

Transfer Fund

Debit Credit

4101/03-----------------------------
4008/01/02-------------------------------

Recording to Journal voucher (JV)

Debit Credit

6111--------------------------------------
6112--------------------------------------
6113--------------------------------------
6121--------------------------------------
6122--------------------------------------
6123--------------------------------------
5004/01---------------------------------------
5004/02---------------------------------------
5004/03---------------------------------------
5004/04---------------------------------------
5004/05---------------------------------------
5004/09---------------------------------------

Recording to Payment sub class

Debit Credit

4210-01/02----------------------------
4103/01-----------------------------

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 Returns of payroll

Debit Credit

5004-01--------------------------------
5004-02--------------------------------
5004-03--------------------------------
5004-04---------------------------------
5004/05---------------------------------
5004/09---------------------------------

4210-01/02----------------------------------

When time returns cash

Debit Credit

4101/03-----------------------------------------
5004/01-------------------------------------
5004/02-------------------------------------
5004/03-------------------------------------
5004/04-------------------------------------
5004/05-------------------------------------

FGF Chart of account

A . Chart of temporary Accounts

-items of domestic revenue using account codes 1000-1799

-External assistance using account codes 2000-2999

-External loans using account codes 3000-3999

-Transfers using code numbers 4000 through 4099 and

-Items of expenditure using account code 6000-6999

B . Chart of permanent Accounts

-Assets using code numbers 4100 through 4999

-Liabilities using code numbers 5500-through 5499

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-Letters of credit using code number 5500 through 5599

-Net Assets/Equity using code number 5600-through 5699

Format of accounting trial balance

NO CODE OF ACCOUNT DISCRIPTION BALANCE

1 1000-1799 Domestic Revenue ###

2 2000-2999 External assistance ###̻̻

3 4000-4999 Transfers ###

4 4100-4999 Asset ###

5 5000-5499 Payables ###

6 5500-5599 Letter of credit ###

7 5600-5699 Net asset/Equity ###

8 6000-6999 Expenditure ###

9 4210-01/02 Receivables ###

10 4101 Cash at safe ###

11 4103 Cash at bank ###

1 .6 Scope of the study

The study tried to discuss the accounting practice of governmental organization of (NOT
PROFIT ORGNAIZATION) in general. Specifically it focused the evaluation of accounting
practice record keeping, reporting mechanism and internal control system at the defence
university

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1.7 Significance of the study

This study will examine the accounting and reporting practice of Ethiopian Defence University, in
order to provide meaningful insight and contribute to the efforts aimed to link the theory and
practice of the accounting and reporting practice information and practitioners in the university and
to exploit the usability of the information generated by how used their actual budget and the
accounting information. Therefore the study will have the result of linking the theory and the
practice of accounting information and for an advanced use of accounting practice.

It directs the organizations the way how theories of accounting are being practiced and show the
degree of similarity or correspondence between the theories of accounting and there practical
applications by taking some method. To perceive the drawback resulted from the deviation between
the theory and practical application of accounting.

1.8 OPERATION TERMS

1.8.1 ACCOUNTING

Accounting practice is the recording of the day –to- day financial operations of entity
necessary to produce the legally required financial statements. Operational accounting
(also known as cost accounting) joins several other popular, lucrative accounting
specializations .the field focuses on financial concerns related to entity operation across
three key areas planning, directing, and controlling companies, operating costs. Financial
accounting and operational accounting have some similarities and a few key differences.
financial accountants report company data externally to shareholder, tax authorities, and
creditors .by contrast, operational accountants track a company‘s spending they also
provide detailed insight into areas where financial efficiency could improve.

1.8.2 Operations accountant duties

Operation accountants plan, direct and control an organization’s finances. they are while
job specifics vary among employers and industries, an operational accountant’s job
description typically includes the following responsibilities

. Preparing Revenue and Expense

. Creating operational budgets
. Making financial projections
. Creating operational budgets

Key hard skills for operational accounting

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 Specialized licenses and certification –Securities and Exchange Commission

Deep understanding of core accounting principles—master key of accountants.

Auditing knowledge—they need a strong working knowledge of auditing principles and

processes

Proficiency with accounting technologies ---deliver advanced functionality

Communication skills---backgrounds well developed oral and written communication skill can
provide a helpful performance boost

Collaborative personality –strong collaboration skills make these interactions easier and more
efficient

Professional commitment—to professional development and skills enhancement helps accountants

stay sharp.

1.8.3 Auditing
Auditing specializations focus on the systematic, detailed examination of financial records and
accounting practice .external auditors ensure that originations meet compliance standards and tax
obligations. Auditors typically earn concentrated accounting degrees. They can also purse optional
certifications like certified internal auditor.

.common job titles

. Internal auditor

.audit manager

.audit executive

Managerial accounting also focuses on internal analysis and financial planning graduates of
specialized management accounting programs often transaction into careers as operations
accountants ,given the similarities beet ween the roles .some operational accountants hold CPA
licenses

1.9 organization of the study Paper

The research paper has three chapters. The first chapter consists of introduction, background of the
study, research problem, research question, objective, significance, scope and the study operation
terms, and organization of the study. Chapter two discuses or deals with all related documents
about accounting and reporting practice of related to entities. The third chapter presents/discusses
about research methodology of, research design, source of data, sampling design, and sample size,
methods of data collection techniques, data analysis and method.

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CHAPTER TWO
2. Related Literature Review
2.1 Theoretical Review
According to warren (2019) accounting is the method and procedure for collecting,
Classifying, summarizing and reporting, a business financial and operating Information In
addition it also defined as an information system that provides report to stockholders about
economic activities and conditions of business. The purpose of accounting is to provide
financial information about an economic entity. This accounting information, which is called
financial statement provided by the accounting system, is required by the activity of the
organization. accounting Information has many users including customers, employees,
stockholders, creditors, Supplier’s government, local community and the general public. An
accounting Information system collects and processes transaction data and then
disseminates. The financial information to interested parties. Accounting information
systems vary widely from one business to another. Various factors shape these systems: the
Nature of the business and the transactions, in which it engages, the size of the firm, the
volume of data to be handled, and the informational demands that management and others
require. Investors are interested in financial reporting because it provides Information that
is useful for making decisions (S. Warren, et al, 2018). The accounting profession has
attempted to develop a set of standards that are generally accepted and universally
practiced. Otherwise, each company would have to develop its own standards. Further,
readers of financial statements would have to familiarize themselves with every company’s
peculiar accounting and reporting practices. It would be almost impossible to prepare
Statements that could be compared. For many years, many nations have relied on their own
standard-setting organizations. For example, Canada has the Accounting Standards Board,
Japan has the Accounting Standards Board of Japan, Germany has the German Accounting
Standards Committee, and the United States has the Financial Accounting Standards Board
(FASB). The standards issued by these organizations are sometimes principles-based, rules-
based, tax-oriented, or business based. In other words, they often differ in concept and
objective. Starting in 2000, two major standard-setting bodies have emerged as the primary
standard-setting bodies in the world. One organization is based in London, United Kingdom,
and is called the International Accounting Standards Board (IASB). The IASB issues
International Financial Reporting Standards (IFRS), which are used on most foreign
exchanges. These standards may also be used by foreign companies listing on U.S. securities
exchanges. As indicated earlier, IFRS is presently used in 120 countries and is rapidly gaining
acceptance in other countries as well. It is generally believed that IFRS has the best potential

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to provide a common platform on which companies can report and investors can compare
financial information. As a result, our discussion focuses (E. Kieso etal 2019).

Accounting standards in Ethiopia

International Financial Reporting Standards (IFRS) is a single set of accounting and financial
reporting standards developed by International Accounting Standards Board (IASB). The
standards are intended for global use by entities in all types of Economies from developing
countries to emerging markets to well established industrialized nations (IASB, 2016).
Ethiopia mandatorily adopted IFRS and has then become part of Ethiopian Law after the
House of Peoples Representative of Ethiopia has enacted Financial Reporting Standards
Proclamation No.847/2014 which was effective on the 5th of December 2014. Thus, Ethiopia
is the most recent participant in the IFRS adoption chain when the Accounting and Auditing
Board of Ethiopia (AABE) announced its road-map after the issuance of Regulation
No.332/2014 which became effective on the 14th January, 2015. Ethiopia at a country level
has chosen the adoption approach of IFRS to replace the previous inconsistent local
standards. To ensure transparency in financial reporting aimed at Building confidence in the
minds of investors, and local and foreign direct investors; Ethiopia as a nation has to ensure
a globalization of world trade desire to adopt IFRS.
In December 2014, the House of Peoples‟ Representatives of Ethiopia gave approval for
financial reporting standards issued in Proclamation No. 847/2014 which was made effective
on the 5th of December 2014. The purpose this Proclamation is to establish a sound,
transparent and understandable financial reporting system applicable to entities in private
and public sectors. Having uniform financial reporting standards enhances transparency and
accountability by centralizing the previous decentralized financial reporting structures of the
country (FDRE, 2014, p.7714).

2 .2 Empirical literature reviews

Agir 2019 examined the accounting practices of SMEs as well as the challenges they face and
the effect of these challenges on SMEs in Makurdi Metropolis Benue State - Nigeria. A
Survey research design was adopted for the study and a likert-scale type questionnaire was
the main instrument used for data collection. Simple percentages, tables and cut-off mean
were deployed for data analysis. The study found that SMEs in Makurdi Metropolis keep
sales & purchase daybook and that SMEs in Makurdi Metropolis are faced with challenges of
accounting practices and these challenges have a significant effect on their operations. M.
Lakew, 2019 examined Accounting and Reporting Practice of Micro and Small Enterprises in
West Oromia Region, Ethiopia. The finding indicated that the majority of MSEs did not keep
regular accounting record and prepare periodic financial report. The main reasons
mentioned by the respondents includes: smallness of the business, expensiveness of

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qualified accountants and lack of awareness about the benefits of accounting Yohannes
Fekadu 2019 assessed the usage of management accounting Practice being used & to
examine its effect on performance of Ethiopian cement Companies using mixed research
approach. The study result indicates that costing Practice is the most highly used
management accounting practice followed by budgeting practice by Ethiopian cement
companies. The rest management accounting practices (performance evaluation,
information for decision making and strategic analysis) have been given less attention by
respondent companies. The study results further indicate that the independent variables;
Cost Management Practices, Budget Management Practices, Performance Evaluation
Management Practice, Information for Decision Making Management Practice and Strategic
Analysis Management Practice are significant in explaining the performance of Ethiopian
cement companies. As large and medium scale enterprises are a significant component of
the economy and there is a lack of empirical evidence along with the gap between the
theory and the practice considering their accounting practice and its effect in large business
enterprises in Debremarkos. Therefore, this study assessed category a tax payer large
business enterprise accounting Practice in Debremarkos to provide empirical evidence of
this gap

BACK GROUND of Acc0Rding to (IPSASs)

.the development of the IPSAS has its origins in the accounting profession as a way to
improve the transparency and accountability of government and their agencies by
improving and standardizing financial reporting.
The IPSASB is an independent standard setting board supported by IFAC
The IPSASB issues IPSAS, guidance, and other resources for use by the public sector
including not profit organization. Around the world
The IPSASB (and its forerunner, the IFAC public sector committee) has been developing and
issuing accounting standards for the public sector in since 1997.
As a transaction are generally common across both the private and public sectors, there has
been attempt to have IPSAS converged with the equivalent international financial reporting
standards (IFRS)
The IPSAS are also development for financial reporting issues that are either not addressed
by adapting an IFRS or for which no IFRS has been developed.
The IPSASB considers the development of its own conceptual framework to underpin its
standards-setting activities to maintain its credibility in understanding to the unique aspects
of the public sector and to meet the financial reporting needs of entities in the sector the
increasing importance of IPSAS

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.IPSAS are being developed by the IPSASB, which focuses on the accounting and financial
reporting needs of government and public sector entities and not for profit organizations

These public sector accounting standards set out

Recognition measurement presentation and disclosure requirement dealing with
transaction and event in the general –purpose financial statements of all public sector
entities Currently the IPSASs are the only international recognized set off public sector
accounting standards. They are developed on the basis of the IFRS, which are generally
applied in the real economy
Hence, the IPSAS aims are
To improve financial management
To improve the quality of financial reporting
To increase the transparency and to achieve a higher credibility of financial reports.

Literature review of international public sector accounting

(IPSAS)

Theoretical Review aspects

Scope and authority of international public sector accounting standards. IPSASB develops
(Ipsas) which Apply to the accrual basis of accounting and IPSAS which apply to the cash
basis of accounting IPSAS set out requirements dealing with transactions and other events in
general Purpose financial reports. Ipsas are designed to apply to public sector entities that
that meet all the following Criteria Are responsible for the delivery of service to benefits the
public and /or to redistribute income and wealth.
Mainly finance their activities directly or indirectly, by means of taxes and /or Transfer from
other levels of government social contributions, debt or fees, and. Do not have primary
objectives to make profits. Within each jurisdiction regulation may govern the issue of
general purpose financial reports by public sector entities. These regulations may be in the
form of Statutory reporting requirements, financial reporting directives government and
instructions and /or accounting standards promulgated by government regulations bodies
and /or Professional accounting bodies in the jurisdictions concerned. The IPSASB believes
that the adoptions of IPSAS, together with disclosure of Compliance with them will lead to
significant improvement in equality of general Purpose financial reporting by public sector
entities The IPSAS strongly encourages the adoptions of Ipsas and the harmonization’s of
national requirements with IPSAS The IPSASB acknowledges the right of government and

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national setters to establish accounting standards and guidelines for financial reporting in
their jurisdictions.

Components of financial statements

Statements of financial position
Statements of financial performance
Cash flow statements
When the entities makes publicly available its approved budgets and a comparison of
budget and actual amounts
Notes comparisons a summary of significant accounting polices

INTERNATIONAL PUBLIC SECTOR ACCOUNTING (IPSASs)

Empirical literature Review

1. Research study -accrual accounting in Italian universities technical perspectives.
Purpose of study-Examine the impact of full accrual accounting on the Italian public
Universities how some technical accounting problems typical of the public sector
/Recognition and valuation issues) have been addressed and the role of IPSAS in Helping to
overcome these technical accounting issues
Method used -Technical analysis was carried out on the financial reports of sample of
universities, the sample was composed of six universities that Adopted accrual Accounting
voluntarily.
Key finding- The analysis show that Ipsas don’t provide accrual accounting to the Public
sector

1 Public financial magnet reforms the role of IPSAS in Latin American and Russian

Purpose of study- the article aims to cleaning the situation IPSAS implementation in the
Latin American context as well as the stimuli for and effect of their implementation
Method of study- semi-structure interviews with four key actors in public sector accounting
standards setters of Colombia and Peru were conducted

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Key finding- the analysis show that there is an emerging by international trend to adopt
IPSAS in Latin American countries although at the same time there is evident obstacles to
achieving reform goals

2.3 International accounting principles

2.3 1 .BASIC ASSUMPTIONS

1. Economic entity assumptions

The economic entity assumptions activities can be identified with particular units of
accountability company keeps its activities separate and distinct from its owners and Any
other business unit the business entity concept assumes that each businesses has an
existence separate from its owners, creditors, employees, customers, interested parties and
other businesses. For each business such as a horse stable or a fitness center the business
not the business owners is the accounting entity

2. Going concern assumptions

Despite numerous business failures most companies have fairly high continuance Rate as a
rule we expect companies to last long enough to fulfill their objectives and Commitments
the going concern principle assumes that any organization will continue to operate its
business for the foreseeable future .the principle purports that every decision in accompany
is taken with the objective in mind of running the business rather than that of liquidating it.
Going concern concepts assumes that business will run its operations for foreseeable future.
Accompany is a Going concern if no evidence is available to cease its operation in
foreseeable future

3. Monetary unit assumptions

In accounting money is monetary unit is the most effective means of expressing to
Interested parties changes in capital and exchanges of goods and service. monetery unit
assumption states that only transactions which can be measured in monetary terms are
recorded in company’s book of accounts. If a transaction cannot be expressed in dollar
value, it should not be included in the company‘s financial books. Under the monetary unit
assumption, an asset purchased for $12000 in 2003 and another asset purchased for $12000
in 2016 would have the same depreciation charge for accounting purposes.
4. Periodicity assumption

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In accounting companies must report information periodically the periodicity (time Period)
assumptions implies that accompany can divide its economic activities into artificial time
periods these time periods vary the period assumption or periodicity assumption is a key
part of financial accounting and reporting. This assumption states that businesses should
report their financial position, results of operations and cash flows at regular intervals.
theses intervals are typically monthly, quarterly and yearly. Principle of periodicity reporting
of revenue is divided by standard accounting period such as fiscal quarters or fiscal years.
Principle of materiality financial reports fully disclose the organization’s monetary situation
the periodicity concept of accounting states that the life of the entity is unlimited so for
better comparison its life should be divided into the equal duration of artificial period and
then accordingly financial statements can be prepared for that period and that will states
the financial of the entity

5. Accrual basis of accounting

Accrual basis of accounting means that transactions that changes accompany financial
statements are recorded in the periods in which the events occur. accrual basis accounting
is one of two leading accounting methods and the preferred bookkeeping method for
providing an accurate financial picture of a company’s business operations accrual basis
accounting recognizes business revenue and matching expenses when they are generated
not when money actually changes hands .
Key takeaways; Accrual accounting is an accounting method where revenue or expenses
are recorded when a transaction occurs vs. when payment is received or made. the method
follows the matching principle ,which says that revenues and expenses should be recognized
in the same period
The full accrual basis of accounting recognizes the financial effect of events that impact an
entity during the accounting period regardless of whether cash was received or spent

2.3 .2 Basic principles

1. Measurement principles
The most commonly measurement are based on historical cost and fair value the measuring
is an informal method for finding the minimum security price target for traders the
measuring principle allows traders to determine a stock’s price target by weighting
movements on chart patterns against each other. the measurement principle is the
phenomenon that is used as the basis of a measurement. the measurement principle can be
a physical chemical or biological phenomenon. There are four basic principles of financial
accounting measurement (1) objectivity, (2) matching, (3) revenue recognition, and (4)
consistency. A special method, called the equity method, is used to value certain long term

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equity investments on the balance sheet. What are the measurement basis in accounting (a)
Historical cost (b) current cost (c) Realizable (settlement) value and (d) present value?

2. Revenue recognition principle

Revenue refers to increases in economic benefits during the accounting period in the Form of
enhancements of assets or decreases of liabilities that result in increases in Equity other than those
relating to contributions from equity participants. revenue recognition is an aspect of accrual
accounting that stipulates when and how businesses recognize or record their revenue the principle
requires that businesses recognize revenue when its earned (accrual accounting) rather than when
payment is received (cash accounting).what are the five steps of the revenue recognition principle
(1)identify the contract with customer (2) identify the performance obligation in the contract (3)
Determine the transaction price (4) Allocate the transaction price (5) Recognize revenue when the
entity satisfies a performance obligation. In this instance ,revenue is recognized when all four of
the traditional revenue recognition criteria are meet (1) the price can be determined (2)
collection is probable,(3) there is persuasive evidence of an arrangement ,and (4) delivery
has occurred.

3. Expense recognition principles

Expense refers to decreases in economic benefits during the accounting period in the form
of out flows or depletions of assets or incurrence of liabilities that result in decreases in
equity, other than those relating to distributions to equity participants. The expense
recognition principle is a concept that outlines when a business’s expenses are recognized in
the company’s financials. Typically, the expense recognition principle involves expenses
being recognition and recorded in the same period as the revenue associated with those
expenses (under accrual accounting) if the business uses cash basis accounting, an expense
is recognized when the business pays for a good or service under the accrual system, an
expense is recognized once it is incurred According to the matching principle expenses and
the income they produce within the same period must be matched. Revenues are recorded
when earned, not only when paid; it’s a crucial component of adjusting.

4. Full Disclosure principles

In deciding what information to report companies follow to be general practice of providing
information that is of sufficient importance to influence the judgment and Decisions of
informed users. Full disclosure principle refers to the concept that suggests the a business
should report all the necessary information in the financial statements, so that the users
who are able to read the financial information are in a better position to make important

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decisions regarding the company. The principal of adequate disclosure demands full
disclosure of all material matters that can affect financial statements and are of interest to
users of accounting information. This principal requires the disclosures of appropriate
changes in financial statements that can be useful and not misleading to users.

2 .4 Accounting process
Accounting is a process that helps in recording the financial transactions which are
Necessary for the business. This process includes summarizing, analyzing, reporting the
transactions to given an Overview to the agencies, regulations and tax collection
entities .basic phase of accounting there are four basic phases of accounting recording
classifying ,summarizing and interpreting financial data. Communication may not be
formally considered one of the accounting phases but it is a crucial step as well accounting
process (1)analyze and record transaction (2) post transaction to the ledger (3) prepare an
unadjusted trial balance (4) prepare adjusting entries at the end of the period (5) prepare
an adjusted trial balance (6) prepare financial statements. A business must use three
separate types of accounting to track its income and expenses most efficiently. These
include cost, managerial, and financial accounting each of which we explore below. there
are two primary method of accounting –cash method and accrual method .the alternative
bookkeeping method is a modified accrual method ,which is a combination of the two
primary methods .cash method –income is recorded when it is received ,and expenses are
recorded when they are paid

2.5 Recording business transactions and events

Transactions are those businesses under taking that have a direct or indirect impact on the
finances of the company an event alludes to the a business organizations due to
transactions that can be expressed in monetary terms

2.6 The cash and accrual basis of accounting

Cash accounting reflects business transactions on company’s financial Statements when the
cash flows in to or out of the business accrual accounting recognizes revenues when it is
earned and expense’s when they are incurred Regardless of. When money actually changes

2. 7 Double entry system

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Double entry bookkeeping also knows as a double entry accounting is method of
Bookkeeping that relies on two sided accounting entry to maintain financial Information
every entry to an account require a corresponding and opposite entry.
Double entry refers to accounting concepts where by ASSET= Liabilities +owner's Equity in
the double entry system transaction are recorded in terms of debits and Credits.

2 .8 Accounting period

An accounting period is any time frame used for financial reporting transactions that falls
within a given date range from part of the statements or reports for that accounting period
an accounting period, or reporting period often 12 months. An accounting period, also
known as a financial period or reporting period, is a specific time frames during which
accompany records, tracks, and reports its financial transactions.

2.9 Accounting cycle

The accounting cycle consists of the steps from recording transaction to generating financial
statements for an accounting period. The operating cycle is a measure of time between
purchasing inventory, selling the inventory as a product and collecting cash from the sales
transaction defining the accounting cycle with steps (1) financial transactions (2) journal
entities (3) posting to the ledger (4) trial balance period, and (5) reporting period with
financial reporting and auditing.

First four steps in the accounting cycle are

1 . Identify and analyze transactions
Identifying transaction means determining if a transaction exists and whether or not it is
relevant to the business after the transaction has been identified ,it is then analyzed .the
analysis decides which business account will be affected and how they will be affected and
how they will be affected. It means determining what transaction to record ,i.e. to identity
events which are to be recorded. It involves observing activities and selecting those events
that are of considered financial character and relate to the organization
2. Record transactions to journal
Here are the three steps to journalizing transaction in accounting (1)classify business
transaction by account (2) determine the account type that involved (3) apply the
fundamental accounting equation to the transaction (4) journalize the transaction

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3. Post journal information’s to a ledger
Posting is the process of transaction the entities from the book of original entry (journal) to
the ledger in other words ,posting means grouping of all the transaction in respect to a
particular account at one place foe meaningful conclusion and for further accounting
process

4. Prepare an unadjusted trial balance

The unadjusted trial balance is prepared by compiling a list of all the general ledger account
balances as of a certain date. This can be done manually or using a software program. Once
the list is complied ,the totals for debit columns and credit columns should be balanced an
adjusted trial balance is a list of all the business account that are set to have balance
account at the end of an accounting period ,before any adjusting entries are made. it’s
essentially a report that lists all account balances in the general ledger at a given point in
time .the unadjusted trial balance consists of three columns includes account names , the
second column represents debits, and the third column represents credits. The account are
generally listed following the balance sheet order with assets and liabilities before and
expenses

2.10 Conceptual frame work

The accounting conceptual frame work is a theory that detail the basis reasoning under
writing the financial statements and financial reporting in general the ACF clearly definition
the objectives and users of the financial statements.

2.11 Elements of financial statement

Financial statements are used to provide the financial information’s and determined the
profitability of accompany .to best understand financial statements its improvement to
understand the five elements of financial statements which are assets, liabilities equity
revenues and expenses
(Asset) present economic resources controlled by the entry as a result of past events
An economic resource is right that has the potential to produces economic benefits.
(Liabilities) A present obligation of the entity to transfer an economic resource as a result of
past events.
(Equity) The residual interest in the asset of the entity after deducting lists of liabilities.
(IN COME) Increases in assets, or decreases in liabilities that result in increases in equity.
Other than those relating to contribution from holders of equity claims.

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(EXPENSES) decreases in asset or increases in liabilities that results in decreases inequity
other than those relating to distribution to holders of equity class

2.12 Importance of Good Records

Authorities in bookkeeping and accounting procedures have provided some importance of good
records keeping to include the fact; unless your business is accounting or bookkeeping, keeping
financial records is probably not what you do best. Most likely, you would rather spend your time
selling your product or service. However, if you are going to run a successful business, accurate and
timely financial information is a must. again, provide some reasons for a good financial record
keeping to include:

- How to monitor the success or failure of your business.

- It is hard to know how a business is doing without a clear financial picture.

- Is the business bringing in enough money?

- Are sales increasing?

- Are expenditures increasing faster than sales?

- Which expenses are too high based on levels of sales?

Furthermore, accounting Longneck and Moore; (1988) evaluating the financial consequences is part
of every business decision made. Without accurate records and financial information, it may be hard
to know the financial impact of a given course of action.

They go on to say that, a bank will usually want to see financial statements for the most current and
prior years, as well as your projected statements showing the impact of the requested loan. A bank
may even want to see some bookkeeping procedures and documents to verify whether the business
is being run in a sound and professional manner .Smith assert that if a business has reached the
point where there is the need to take in a partner, any prospective partner will want to become
intimately familiar with the financial picture of the business. If it needed a capital and taking in an
outside investor, a lot of financial information need to be produced. Even suppliers and other
creditors may need certain financial records. Such information may be produced by an outside
accountant preparing income tax return whether a business is a sole proprietorship or corporation it
must file an income tax return and pay income taxes. With good records, preparing an accurate tax
return will be easier and it is more likely to be able to be on time. Poor records may result in
underpaying or overpaying taxes and/or filing late (and paying penalties). If the accountant prepares
the income tax return, poor records will almost certainly result in paying higher accounting fees. If
the business is a partnership, not only will it have to prepare a partnership tax return, but
partnership return amounts will pass directly to the tax return of each partner. So record keeping
will directly affect the tax return of each partner

2.13 Cost of capital

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It is defined as "the opportunity cost of all capital invested in an enterprise." The Opportunity cost is
what you give up as a consequence of your decision to use a scarce resource in a particular way, that
is all capital invested is the total amount of cash invested into a business. In an enterprise this refers
to the fact that we are measuring the opportunity cost of all sources of capital which include debt
and equity

2.14 Investment
It is defined as "the opportunity cost of all capital invested in an enterprise." The Opportunity cost is
what you give up as a consequence of your decision to use a scarce resource in a particular way, that
is all capital invested is the total amount of cash invested into a business. In an enterprise this refers
to the fact that we are measuring the opportunity cost of all sources of capital which include debt
and equity

2.15 Budget Fund

The general characteristics of the budgeting process in non-profitable organizations are similar to
that in for profit one, but these are significant difference in emphasis.

Budget is a plan expressed in monetary terms. As the general purpose of anon profit organization is
to provide as much service as it can with available resource.

The annual budgetary process involves three steps; preparations, adoption and execution. The
preparation phase of the budgetary process is usually are possibility of the chief executive and is
accomplished by the correlation of financial data produced by the accounting system and the project
program requirements of the various functions and activists.

2.4. Characteristics of non profit organization

2.16 Budget preparation

Service to society: NPOs often render services to society as a whole. The members of this society
may range from a limited No of citizens in a community almost the entire population of a city, states
or nation. No profit maturation: NPOs do not operate in the objective of earning a profit
consequently NPOs generally are exempted from federal and state income taxes. Financing by the
citizenry Most NPOs depend on the general population for a substantial portion of their support,
because revenues from charges for their service are not intended to cover all their operating costs.
Stewardship for resources because of a substantial portion of the resources of a non-profit
organizations is donated, the organization must account for the resources on a stewardship basis.
The stewardship requirement make fund accounting appropriate for many NPOs. Importance of
budget: the four preceding characteristics of NPO caused there annual budget to be as important as
for governmental entities. 2.5. Accounting for non –profit organizations

A non- profit organization is a legal and accounting entity which is operated for the benefit of society
as a whole rather than for the benefit of an individual preparation or a group of partners or share
holders thus, the concept of net income is not meaning full for a NPO instead like the internal service
fund, A NPO strives only to obtain revenue sufficient to cover its expenses. Until recent years, the

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accounting standards practices which constitute IFRs were not considered to be entirely applicable
to NPOs

2.17 Primary Financial Statements

The objective of general purpose financial reporting is to provide financial information about the
reporting entity that is useful to existing and potential investors, lenders and other creditors in
making decisions about providing resources to the entity. Those decisions involve buying, selling or
holding equity and debt instruments, and providing or settling loans and other forms of credit. Many
existing and potential investors, lenders and other creditors cannot require reporting entities to
provide information directly to them and must rely on general purpose financial reports for much of
the financial information they need. Consequently, they are the primary users to whom general
purpose financial reports are directed.

General purpose financial reports do not and cannot provide all of the information that existing and
potential investors, lenders and other creditors need. Therefore those users need to consider
pertinent information from other sources. Other parties, such as regulators and members of the
public other than investors, lenders and other creditors, may also find general purpose financial
reports useful. However, those reports are not primarily directed to these other groups.

In order to meet their objectives, financial statements are prepared on the accrual basis of
accounting. Accrual accounting depicts the effects of transactions and other events and
circumstances on a reporting" entity’s economic resources and claims in the periods in which those
effects occur, even if the resulting cash receipts and payments occur in a different period. This is
important because information about a reporting " entity’s economic resources and claims and
changes in its economic resources and claims during a period provides a better basis for assessing
the entity’s past and future performance than information solely about cash receipts and payments
during that period. the financial statements are normally prepared on the assumption that an entity
is a going concern and will continue in operation for the foreseeable future.

2.18 The Annual financial report

At the end of fiscal year, every NGO unit should prepare and publish a comprehensive
financial report covering all fund and financial transactions of the unit during the year. This
report represents cumulation of all accounting process carried out during the year and is
one of the prime documents in the entire life and total operations for any nit. It is a major
responsibility of the chief finance officer, who should make every effort to insure that the
report reflects IFRS and financial reporting applicate to NGO entities. Although the report
will be formally addressed to the chief executive and governing body of the NGfO unit to
which it applies, it must also functions to meet the needs of all persons and groups who
have and total operations for any nit. It is a major responsibility of the chief finance officer,
who should make every effort to insure that the report reflects IFRSs and financial reporting
applicate to NGO entities. Although tsi report will be formally addressed to the chief
executive and governing body of the NGfO unit to which it applies, it must also functions to
meet the needs of all persons and groups who have The second and third sections, by

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contrast, must be segregated by separator sheets titled, respectively, “ Financial Section”
and “ statistical section.”

Chapter Three
3. Research methodology
3.1 Research design
To achieve the objectives set in the study required through explanation of all operations has
been done according to methodology the study will be conducted by combining quantitative
and qualitative research approach. By means of employing this combined approach, the
researcher is able to obtain the advantage of both quantitative and qualitative approaches
and can overcome their limitations. The selection of the quantitative approach is to respond
for research questions requiring numerical data, the qualitative approach for research
questions that requires textural data. The data is collected by using two instruments that
are questioner and semi structured interviews. The target populations are Ethiopian
Defense University which is located in bishoftu Ethiopian. The collected data is analyzed
manually by using descriptive research methodology.
This study is basically a descriptive study. Descriptive research is conducted for detailed
description of specific situation(s) using interviews, observations and document review.
Accordingly, the study deals with clearly defining the problem related with accounting
practice.

3.2 Data types and its source

To meet the general objective of assessment of accounting and reporting practice of
Ethiopian defense University the researcher tried to assess the reliabilities of periodic
financial Reports by using primary and secondary source of data to obtain relevant
information for analysis In order to meet the general objective this study, data were
collected through both Questionnaire and document analysis. Descriptive research can be done
relying on secondary research such as reviewing available literature or data, or primary qualitative
approach such as formal or informal approach to accountants or managers. In the case of this study
both primary and secondary data are used. The primary data is obtained from accountants and
managers of the Ethiopian defense university located at bishoftu the secondary data is attained by
reviewing literature on the accounting practice and related topics.

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3.3 Sampling design and sample size
In order to have a better understanding on the study the researcher used judgmental sampling
method to select the interviewees. The interviewees was conducted with selected officials of the
institutions for the information which was not confirmed in the financial statements this
judgmental sampling was taken based on who provided the best information of the study.
The target populations of the research are staff members and office workers Information
obtained in the study, the researcher was used judgmental sampling techniques for
gathering Primary source of data. Only one accounting officer/manager was selected in each
sampled to constitute the sample size

3.4 Methods of data collection

The questionnaires were distributed to each accounting officer/manager and Workers in
each sample selected for the study. As noted earlier, this is descriptive study based on primary
and secondary data. The primary data is collected through survey using structured questionnaires
for the first three research question and semi structured interview for the last objective of the
research question. The questionnaire has both close ended and open ended questions are included
in the questionnaires to find out the accounting practice of Ethiopian Defense University. The study
considers the theoretical background of modelling the variables of our interest depending on the
explanatory variables that determine them. In this regard as our variables of interest are accounting
practices the theoretical framework is dependent to the International Accounting Standard Board,
there are minimum reporting standards for explaining the actual practice of accounting

3.5. Data Analysis Techniques

The data analyzed and interpreted by using descriptive methods. This method help to describe the
findings and the results from the data collected. Descriptive method is used to analyze the
accounting practice of defense university , located at bishoftu Ethiopian as percentage and
frequency is use to investigate which accounting theory has been practice Qualitative data take the
form of words and also un structured interviews lend them Selves to qualitative analyses

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Appendics
Defence University School of Graduate Studies

Department of Accounting and Finance

This questionnaire is prepared by Defence University student who is working on the topic
"Accounting and reporting practice in the case area Ethiopian defence university". The researcher
will kindly request your cooperation to respond for the questions given below. The question has
been designed purposely to source information on accounting practice of Defence University. The
information will be treated in utmost confidential and used mainly for academic purpose.

Your honest and objective answers to the following question will be highly appreciated and
acknowledged. This is the questionnaire to be filed by accountants or managers of the organization.

So your genuine frank, timely response is vital for the success of the study.

Therefore I kindly request you to respond to each question carefully.

Please answer the following questions accordingly;

 Where alternative answers are given, choices and cercal the letter where necessary

 please give more alternative and for some questions there is space provided you

Thank You, for your cooperation and timely response in advance.

Name of your organization_________________________________________(Optional)

Part one personal data

1. AGE ̻ 20-30 ̻ 31-40 ̻ 41-50 ̻ 50 AND ABOVE ̻

.
2 Gender male ̻ female ̻
3. Education college diploma ̻ DEGREE ̻ PhD / MD ̻ MASETERS ̻
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 Other please specify__________________________________________

4. Name of the department of that you are currently working

__________________________

5. What is your current position in the organization

__________________________________

6. Area of your specialization

A. Accounting and finance

B Purchasing department

C HR/payroll department
Other please specify_______________________________________________

7. For how long have you been working in your current position?

1- < 3 ̻ 3- <6 ̻ 6- <9 ̻ 9 and above ̻

8. Years of working experience in the accounting profession?

1 -< 3 ̻ 3-<6 ̻ 6-<9 ̻ 9 and above ̻

Part two
Questions on accounting professions
1. Do you have a clear understanding of accounting practice of your organization?
A. Yes B. No
2. Does your financial report cover all funds and financial transactions?

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 A. Yes B. No
3. Does your organization reconcile and update its record timely?
A. Yes B. No
4. Does each transaction reliable, valuable and clear?
A. Yes B. No
5. How do you proof the reliability of each transaction?
Please specify _________________________________________________________
6. Do you have a clear understanding about the reporting practice of your organization?
A. YES B. No
7. What type of financial statement do you produce?
A. Balance sheet B. Income statement C. Statement of retained earning
8. Do you use a standard format for reporting financial segment?
A. Yes B. No
9. is your financial statement reliable and relevant?
A. Yes B. No
10. Does the system produce and report financial statement timely?
A .YES B . No
11. Do you use budgets for a given period of time?
A. Yes B. No
If NO can you mention some reason? _________________________________
12. Do variation exit between budgeted and actual amount?
A. Yes B. No
13. Do variation (if any) effect on reporting practice?
A. Yes B. No
14. Does your organization use different method of designing and implementing control
System?
A. Yes B. No

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15. If agree (above Q14) if any have an effect on your accounting treatment?
A. Yes B. No

16. Do your organization prepare its financial statement according to financial accounting
standards Board (FASB) statement?
A. Yes B. No
17. Does your organization maintain formal accounting system?
A. Yes B. No
18. If your answer is yes which accounting system is implemented?
A. Manual
B. Computerized
c. Partly computerized
D. partly computerized and manual

Interview Questions
1. What is your roll in the organization?
2. What is legally expected to your activities in the organization?
3. What are their practices regarding to their financial report?
4. Have you ever suggest anything to improve the quality of financial information?
5. What are the limitations of their reports?
6. From your experience for what purpose does your organization use their financial
information?

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7. Who are the users of the financial information?
8. Does they require auditor’s approval of financial information?
9. How to control cash balance at bank?
10. How to control cash balance at book?
11. How to record cash receipt and cash disepersement in daily activities?
12. How to manage daily transaction report?

Sources
1. Agir (2019). Examined the accounting practice of SMEs
2. Assessed category of A Tax payer large business enterprise accounting practice
In Debremarkos.
3. As result of, our discussion focuses (E.kieso et al2019).
4. International journal of research in economics and social sciences
5. M .Lakew (2019).examined accounting and reporting practice of MSEs in east
Oromia region
6. Yohannes. Fekadu (2018).assessed the usage of mgmt. accounting and practice.

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