Public Sector Accounting Essay Example | Topics and Well Written Essays - 2000 words

overt Sector Accounting - Essay ExampleIn order to bear witness the differences an governance from each celestial sphere has been taken. The chosen universal field organization is The Royal mail Holdings Plc and the publicly listed company is Aviva Plc. Royal Mail is a 100% UK Government owned organization involved with the postal function throughout UK, Ireland and Europe (Royal Mail Group Ltd, 2012). Aviva is a UK-based largest global insurance company and realisms sixth largest (Aviva, 2012). The third section demonstrates the effect of the objectives of public sector accounting and the rules and regulations governing public sector organizations in the form of differences and similarities in the format, style and accounting policies in the annual reports of Royal Mail and Aviva. The fourth section deals with the role of auditor in both the organizations. Overall the four sections in the get a line analyze if the differences between the two sectors accounting practices ar e prominent or if there is any decline in their differing frameworks. Accounting Needs & Objectives The public sector encompasses all the organizations that are not owned or operated by head-to-head organizations. The organizations control lies in the hands of the Government, either national or local. Public sector in UK is diverse and includes nationalized industries, Government agencies and public service organizations. Nationalized industries are commercial organizations that sell goods to market tho are mainly governed by government-appointed boards and ministers rather than markets or shareholders. The surplus generated from their operations is expected to enable stand-in investment. The government agencies include welfare services and taxation body. These agencies are required to deliver satisfactory services to the claimants and taxpayers by using the resources at their disposal. The public service organization provides health, policing and defence services on behalf of key or local government. These services are financed from the tax revenues and therefore not charged from the public directly. opposed the private sector with a clear objective of profit-making, the public sector has a complex compound of objectives and demands. It is primarily concerned with serving the general public. The importance of public sector accounting and disclosures, and their differences from the private sector accounting is due to the following reasons Lack of making Profits The ultimate objective of a private organization if profit making and/or creating wealth for its shareholders. However a public sector organizations objective is not considered profit making. Sometimes this suggests the possibility of inefficient use of resources or absence seizure of commitment to provide good service to the clients due to no profit-making. Lack of Competition A private sector organization usually operates in an industry with direct competitors and subject to regulations by ove rsight regulative bodies. Contrary to this the public sector organizations are not subject to disciplines of the markets and lack the comparability with other firms. Public Interest There is a corporate governance framework and audit rules for private organizat