The first task of John Nyamah, a newly appointed Assistant Accountant of Azadagli Municipal Assembly, is to prepare the 2022 financial statements of the Assembly in compliance with the International Public Sector Accounting Standards (IPSAS), the Public Financial Management Act 2016 (Act 921) and the current Chart of Accounts of the Republic of Ghana. Nyamah submitted on 5th March 2023 the draft financial statements, presented below, to the Director of Finance for review. Statement of Financial Performance for 2022 Revenues Decentralised Transfers Internally generated fund Donation and grants Expenses Compensation for employees Goods and Services Capital Expenditure (CAPEX) Interest Subsidies Other expenditures Operational Deficit 1 2 3 300,000,000 4 100,000,000 5 600,000,000 40,000,000 2,000,000 13,000,000 500,000,000 280,000,000 125,000,000 905,000,000 1,055,000,000 (150,000,000) Statement of Financial Position 2022 Non-current asset Property plant and equipment Investment Current Asset Inventory Receivables Fixed Deposit Cash and Cash equivalent Liabilities and Fund 6 0 55,000,000 55,000 137,000,000 137,055,000 100,000,000 (8,000,000) 92,000,000 Payables Bank Loans Funds Accumulated Fund Deficit (150,000,000) Page 1 of 10 30,000,000 67,000,000 15,000,000 25,000,000 36,000,000 64,000,000 142,000,000

Notes to the Financial Statements Notes 1: Decentralised Transfer District Assembly Common Fund Salary subventions District development facility Other grants Notes 2: Internally Generated Fund Licences Fees and Charges Rates Sanitation grant from the central government Investment Interest Rent Note 3: Donations Concerned Citizens Network made the donation to the Assembly Note 4: Compensation for employees Established post salaries Non-established post salaries Travel allowances Travel and Transport Assembly members sitting allowance Pensions Note 5: Use of goods and Services Car maintenance allowances Repairs and Maintenance Office expenses Computers for the Office Training, Seminars and Conferences Note 5: Capital Expenditure (CAPEX) Construction of new market Purchase of motor vehicles Access roads Furniture and refurbishment. Plant and Machinery 200,000,000 220,000,000 75,000,000 5,000,000 500,000,000 80,000,000 150,000,000 30,000,000 10,000,000 6,000,000 4,000,000 280,000,000 200,000,000 40,000,000 30,000,000 10,000,000 15,000,000 5,000,000 300,000,000 12,000,000 18,000,000 20,000,000 40,000,000 10,000,000 100,000,000 120,000,000 80,000,000 200,000,000 150,000,000 50,000,000 Page 2 of 10

600,000,000 As a Senior Accountant of Azadagli Municipal Assembly, you are to review and provide recommendations for improvement to the financial statements. Required: a) Discuss the extent to which the financial statements presented comply with the components of financial statements required under IPSAS1: Presentation of Financial Statements. (10 marks) b) Discuss, with evidence, the extent to which the financial statements presented reflect the qualitative characteristics of general-purpose financial statements under Chapter 3 of Conceptual Framework of Financial Reporting in the Public Sector. (10 marks) c) Under no more than five headings (categories), discuss the shortcomings you have observed in the financial statements presented, if any. Note that you must categorise the observations. (10 marks) d) Provide recommendations for improvement based on your reviews. (5 marks) (Total: 35 marks)