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Cfm 307-Public Sector Finance Question Paper

Cfm 307-Public Sector Finance

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2009

1
UNIVERSITY EXAMINATIONS: 2009/2010
THIRD YEAR STAGE 2 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CFM 307-PUBLIC SECTOR FINANCE (EVENING CLASS)
DATE: DECEMBER 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer Question ONE and Any other TWO Questions
QUESTION ONE
a) Discuss the characteristics of a good tax system ( 5 Marks)
b) Discuss the rationale for the existence of the public sector in any economy ( 10 Marks)
c) Discuss in detail how the public sector is audited in Kenya ( 5 Marks)
d) What are the pitfalls of the incremental budgeting in the public sector ( 5 Marks)
e) Discuss the merits and demerits of direct taxes ( 10 Marks)
QUESTION TWO
a) Discuss why many governments and public sector organizations are adopting the planning
program budgeting (5 Marks).
b) Many governments strive to create balanced budgets. Discuss this two concepts and indicate
the merits and demerits of balanced budget (5 Marks).
c) Discuss ways in which the government can redeem public debt (5 Marks)
d) Discuss the factors that plague government audit in third word countries (5 Marks).
2
QUESTION THREE
a) Many governments have abolished the sales tax on the grounds that it was working against
development. Discuss critically if you think there was sufficient grounds for the abolition of
the sales tax ( 10 Marks)
b) A country in latin America is in the process of introducing performance budgeting to replace
the incremental budgeting they have been using since independence. Assuming they have hired
you as a consultant for this exercise, present arguments in favour of performance budgeting
(10 Marks)
QUESTION FOUR
a) During the financial year 2009/10 , the government of Kenya faces a budget deficit of Kshs 109
billion. The government hopes to fill this gap by way of local borrowing and foreign borrwing
from world bank and other international bodies and governments. Discuss the implications for
this type of budget. ( 10 Marks)
b) Discuss the merits and demerits of zero base budgeting ( 5 Marks)
c) It has been argued that a land tax could provide a lot of revenue for a government. Discuss the
implications for this type of budget (5 Marks)
QUESTION FIVE
a) The progressive tax system has been praised for bringing an element of equity in the tax
system. However critics maintain it may not be a good system after all. Discuss whether people
casting aspersions on this tax system have any valid point ( 10 Marks)
b) Discuss the objectives of fiscal policy ( 10 Marks)

Cfm 307-Public Sector Finance Question Paper

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