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 1 500,000,000 Internally generated fund 2 280,000,000 Donation and grants 125,000,000 905,000,000 Expenses Compensation for employees 3 300,000,000 Goods and Services 4 100,000,000 Capital Expenditure (CAPEX) 5 600,000,000 Interest 40,000,000 Subsidies 2,000,000 Other expenditures 13,000,000 1,055,000,000 Operational Deficit (150,000,000) Statement of Financial Position 2022 Non-current asset Property plant and equipment 6 0 Investment 55,000,000 55,000 Current Asset Inventory 30,000,000 Receivables 67,000,000 Fixed Deposit 15,000,000 Cash and Cash equivalent 25,000,000 137,000,000 137,055,000 Liabilities and Fund Payables 36,000,000 Bank Loans 64,000,000 100,000,000 Funds Accumulated Fund 142,000,000 Deficit (150,000,000) (8,000,000) 92,000,000 Notes to the Financial Statements Notes 1: Decentralised Transfer District Assembly Common Fund 200,000,000 Salary subventions 220,000,000 District development facility 75,000,000 Other grants 5,000,000 500,000,000 Notes 2: Internally Generated Fund Licences 80,000,000 Fees and Charges 150,000,000 Rates 30,000,000 Sanitation grant from the central government 10,000,000 Investment Interest 6,000,000 Rent 4,000,000 280,000,000 Note 3: Donations Concerned Citizens Network made the donation to the Assembly Note 4: Compensation for employees Established post salaries 200,000,000 Non-established post salaries 40,000,000 Travel allowances 30,000,000 Travel and Transport 10,000,000 Assembly members sitting allowance 15,000,000 Pensions 5,000,000 300,000,000 Note 5: Use of goods and Services Car maintenance allowances 12,000,000 Repairs and Maintenance 18,000,000 Office expenses 20,000,000 Computers for the Office 40,000,000 Training, Seminars and Conferences 10,000,000 100,000,000 Note 5: Capital Expenditure (CAPEX) Construction of new market 120,000,000 Purchase of motor vehicles 80,000,000 Access roads 200,000,000 Furniture and refurbishment. 150,000,000 Plant and Machinery 50,000,000 Page 3 of 10 600,000,000 Note 6: Property Plant and Equipment Property, Plant and Equipment are accounted for in the Statement of Financial Performance. 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. 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. 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. d) Provide recommendations for improvement based on your reviews.