Question

2. Why bother with the details of handling money or assets and liabilities? 3. How does public finance administration relate to other aspects of public administration? Personnel, information systems, intergovernmental re- lations, and urban governance?

Answer 1

1. Assets in the form of Short & Long Term investments and Cash or Cash Equivalents, and the Liabilities like Short & Long Term Borrowings, Tax liabilities, etc. require an utmost attention from the Management to formulate the Financials for the particular financial year;

• Time in which the Assets or Liabilities have been incurred or accrued.
• Maturity and Liquidity of Investments.
• Off Balance sheet Borrowings and Grants.
• Expenses Written Off.
• Depreciation of long term assets and methods used.
• Unaccounted Indirect Holdings of Stakeholders or the Owners.

The above are few of the main challenges while maintaining the Financial of the company and the details of which require validation and accurate estimation.

2. Public Finance is of such a nature that its study cannot be separated from that of other industrial functions. Public Financing is related to other business functions in a variety of ways. In fact, financing underpins many of those functions in a very real way, not all of which are immediately apparent.

• First, financing relates to other business functions through its role in establishment. Without financing, the business most likely would not exist, to say nothing of other business functions. Financing is what enables the purchase of the equipment, the leasing of the property, the buying of materials, employee’s salaries, marketing, etc.
• The principles which underlie a study of expenditures and revenues have a dependence upon Political Science second only to that which they have upon Economics. The form of government under which the citizens live and the officials work is of the utmost importance. Differences in the method of conducting fiscal affairs would necessarily be found in states of autocratic, democratic, socialistic, or individualistic governmental tendencies.
• Financing enables production in anticipation of demand. This is a necessary aspect of many businesses. For example, a store has products on its shelves, not merely a storefront with catalogs. Likewise, a carpenter does not wait until he gets a project to buy his tools.
• Financing enables opportunities, which can arise at any time. Without financing, a company cannot take advantage of those opportunities.
• Public Finance at present is inseparably related to social reforming. No longer is the individual held entirely responsible for bettering social conditions, but the various governmental units have adopted this activity as one of their primary functions.
• Relationship of Information Technology (IT) and Public Financing is focused too much on accountants. Adopting a contingency perspective, investigates the relationship between IT and corporate financial reporting.