Pifra Guidelines Pakistan

Handbook of Accounting

Handbook of Accounting Guidelines

Issued: 13-Feb-99

Page: 1

hbook1.doc

Handbook of Accounting

Table of Contents
1 INTRODUCTION 2 OVERVIEW 3 THE LEGISLATIVE FRAMEWORK
3.1 The Constitution of Pakistan 3.2 Audit and Accounts Order

4 5 7
7 8

4 THE BUDGET
4.1 Introduction 4.2 General budget classification 4.3 Budgetary Procedure

9
9 9 10

5 THE ACCOUNTING FRAMEWORK
5.1 Introduction 5.2 Manual of Accounting Principles 5.3 Basis of Accounting 5.4 Features of modified cash accounting 5.5 Financial Reporting Manual 5.6 Chart of Accounts 5.7 Classification of Funds 5.8 Overview of Administrative Arrangements

12
12 13 13 17 20 22 23 24

6 ACCOUNTING RECORDS AND SYSTEMS
6.1 Introduction 6.2 General Ledger 6.3 Journal entries 6.4 Subsidiary Ledgers and Registers 6.5 Permanent Accounting Records

28
28 29 29 29 29

Issued: 13-Feb-99

Page: 2

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Handbook of Accounting
6.6 Maintenance of Accounting Records 6.7 Computerised Accounting Systems 30 30

7 CORE ACCOUNTING PROCESSES AND CONTROLS
7.1 Accounting Policies and Procedures Manual 7.2 Internal Control 7.3 Receipts 7.4 Expenditures 7.5 Inter-entity Transactions and Other Adjustments 7.6 Project Accounting 7.7 Bank Reconciliation

31
31 31 32 32 35 36 37

8 OTHER FINANCIAL MANAGEMENT PROCESSES
8.1 Introduction 8.2 Cashflow Forecasting and Analysis 8.3 Purchasing 8.4 Asset Management 8.5 Liabilities

40
40 40 42 42 44

9 APPENDIX A - TABLE OF ACCOUNTING ENTRIES

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Issued: 13-Feb-99

Page: 3

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Handbook of Accounting

1

Introduction
1.1.1 This handbook provides an introduction to the accounting systems and processes of the Government of Pakistan. It is intended as a general introduction to the subject for use by Government employees or anyone interested in understanding the legal and accounting framework under which the Government of Pakistan operates. The first three chapters describe the legal