An Aduiting Model Based On Functional Cost Accouting For Pubic Institutions In China

This paper develops a new accounting method– Functional Accounting Method, namely, the various function cost of an institution is accounted according to the function cost structure which is formed by dividing the total expenditure of a higher learning institution into different function divisions. The basic logic for this method is that the institution's mission determines institution's function division, the function determines the institution's behavior and specific activities, and the operational cost is determined by the consumed resources of various activities. This dissertation accounts the institution's cost with a new method guided by this logic.The steps of this method are as follow. First, the mission of the higher education institution is studied, and the functions of the institution are classified into function division according to the mission, and then the institution's function division is divided into three layers: basic function, functional behavior, and specific activity. The cost of every business activity and operational behavior could be accounted, and therefore, while tracing back according to the cost division structure, the total functional cost could be accounted. It is indeed onerous to classify the institution's activities and behavior; however, the computer software designed for financial accounting that has been employed by all the national higher education institutions since 2000 could be helpful. Because with the financial software specifically designed for Functional Accounting Method, the cost of each business activity and institutional behavior could be assembled into proper function cost item, it is convenient to operate.This innovation of this method lies in two aspects. First, it accounts the higher education institution's total expenditure from the angle of functional cost structure.Second, it changes the basic unit for cost accounting from function categories which are much broader into specific operational activities. This method that is based on the function attribute of every operational activity can achieve more precise accounting results. Therefore, with this new method, the result could be more scientific, and more precise.This method can be applied to assess the efficiency of various cost of a higher learning institution, and also can be used to guide the resources allocation so as to improve the efficiency in the use of resources for the higher education institutions.In order to demonstrate the theory, logic, operation and result of the new method, this dissertation especially employs the method to account the cost of a public comprehensive university of China with the real accounting data. The author argues that principally this method could be applied to all public higher education institutions of China.