ST.

AUGUSTINE UNIVERSITY OF TANZANIA

SCHOOL OF LAW

COURSE NAME : ACCOUNTING FOR LAWYERS

COURSE CODE : SLW 426
COURSE INSTRUCTOR : MR MASANJA S
GROUP NUMBER : GROUP NO 11
NATURE OF WORK : GROUP ASSIGNMENT
YEAR OF STUDY : 2024/ 2025
SUBMISSION DATE : 11TH APRIL, 2025
CLASS : LLB 4 stream TWO
01 ROGERS RAYMOND M LLB 80908
02 MALLEY, EDWARD I. LLB/2021/3294
03 LUGWISHA, STELLAH JOSEPH LLB/2021/2194
04 MAGEME, NGEMELO KANUDA LLB/2021/3233
05 MWASHALULA, DIANA JOSEPHAT LLB/2021/2407
06 RAMADHANI, ASWILA TWAHA LLB/2021/2688
07 LUZIGA, NASSORO ADAM LLB/2021/2728
08 RASTON, CRIS FESTO LLB/2021/2920
09 MKWAMA, CHUCKNORRIS LLB/2021/2216
10 MOHAMMED, HASSAN A. LLB/2021/3138
12 MSANGI, SHAFII A. LLB/2021/2485
13 SHAYO ROSE BARTAZARI. LLB/2021/2277
14 NDONGO PERUZI JOHN. LLB/2021/2869
15 MGESI FARAJA JOHN. LLB/2021/3580

QUESTION

By referring the CAG report of 2022/2023 In Tanzania, looking on some Public Companies that
Suffers the Loss and How could they use and Apply the principle of Going Concern so as to
Secure those Companies’ Life.

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 TABLE OF CONTENTS
1.0 INTRODUCTION................................................................................................................... 1

2.0 MAIN BODY.......................................................................................................................... 1

2.1 TANZANIA NATIONAL OIL COMPANY LIMITED (TANOIL)........................................1

2.2 Air Tanzania Company Limited (ATCL).................................................................................3

2.3 Tanzania Telecommunication Corporation (TTCL).................................................................4

3.0 CONCLUSSION..................................................................................................................... 5

BIBLIOGRAPHY......................................................................................................................... 6

i
1.0 INTRODUCTION
Principle of Going concern Refers to the Accounting principle over the Company which relies
on assumption that an entity will remain in business for the foreseeable future 1. The principle
requires the Company or Entity to continue with it is business without Coming to an end due to
factors like gross loss suffer by the company due to risks that the company face. The principle
requires the Company to be prepared with the Risks on it is businesses by arranging proper or
good Risks management that will ensure the Company to exist currently and at the nearby future
as it is prepared on how to manage all risks that will face the company at the future (Fore seeable
future). Through the going concern principle the Company will Continue with the business at in
both Hard time condition period and At the Normal Condition period as the Company will use it
is Assets in the most effective manner possible.

2.0 MAIN BODY

By referring the CAG report of 2022/2023 In Tanzania, the followings are some Public
Companies that Suffers the Loss and How could they use and Apply the principle Of Going
Concern so as to Secure those Companies’ Life.

2.1 TANZANIA NATIONAL OIL COMPANY LIMITED (TANOIL)

It is a Tanzania Petroleum Development Corporation's Subsidiary company that undertakes oil
trading business2. TANOIL represents the Government’s interests on behalf of TPDC in all Oil-
related mid and downstream activities and projects along the petroleum value chain. 3

The CAG report of 2022/2023 provide that the Company suffer the loss of Tsh 76.56 Billion
compared to loss of Tsh 68.72 Billion suffered by the company in the previous year. The report
further more Elaborated that the loss of the company increasing due to Stuck of the imported
Caused by failure of the company to pay their sellers thing that increase the Storage Costs also
lowered the Collections of the Companies’ revenue due to decrease in the Sales of the
Companies’ oil. By making analysis of the report it could be discovered the Company Suffer the
losses due to inadequate of the Company Management as proved in various misconducts of the

1
https://www.accountingtools.com/articles/the-going-concern-principle
2
https://tpdc.co.tz/tanoil
3
Ibid
1
company such as failure to pay the Company's sellers and others. By considering the Corporate
governance principles such as Transparency and Responsibilities principles.

The Government should undertake the following measures as to obey the Accounting principle
of Going Concern that required the company being continuing to be operated for the Foreseeable
future.

The Management of the Company should be reshaped by overthrowing the Current management
officials and Introduce new management officials who should be responsible for securing the
Companies’ life. The overthrower officials should be legally Accountable for their Actions they
lead to the loss of the Company.

The new Management Should Impose the various Measures so as to secure the Companies’ life
like: -

a) Establishment of the Special Committee responsible for Risk Management in the Company,
The imposed committee should be responsible for the Imposing policies that could help the
company to overcome the loss that occurred and also The committee should be the one to Impose
the Mitigating factors for the Foreseeable Risks that could face the Company hence to overcome
those risks before they occurred to the company and report each and everything to the general
management of the Company.

b) The new Management of the Company Should be Responsible adequately in ensuring the
Company Operating well all and undertaking all of it is activities within the time So as to ensure
the Normal cashflow of money within the Company.

c) The new management of the company Should ensure the proper Interior operation of the
company by emphasizing Transparency and responsibilities to among the Companies’ official as
through Transparency and Responsibilities of the company's officials will promote the good
governance of the Company and the Company to perform it is activities well so as to generate
enough profit and continue to exist.

d) The Company Management should prepare the financial Statements of the Company and
disclose the important information’s concerns Risks that ought to face the company and the

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measures and plans to Combating those risks as to make the Company not suffer losses from
those risks.

Through those Measures that TANOIL could take so as to ensure the life of the Company to be
secured then they were relied to the Accounting principle of Going Concern as the Company
should operate by looking on foreseeable future so that the company could continue it is
operation.

TABLE OF CONTENS SHOWING THE FINANCIAL STATUS OF TANZANIA

NATIOPNAL OIL COMPANY LIMITED(TANOIL)

YEAR PROFIT LOSS

2021/2022 ---------------- 68,720,000,000/=
2022/2023 -------------- 76,560,000,000/=

2.2 Air Tanzania Company Limited (ATCL)

This is the Tanzanian National Airline that provide the Services of air transportation in Tanzania
and outside Tanzanian Territory4. The Company as the other public Companies that reported to
suffer the losses at the 6 consecutive years by which within the 2022/2023 Report the company
Reported to suffer the loss of about Tsh 56.64 Billion which is an increase of loss from Tsh 31.5
Billion from the previous year. The Company reported to suffer that loss although it receives the
Subsidies from the government in every year by which Still the Company having great Operating
Costs than what it Collect as the revenue of the Company. The company suffer that losses due to
reasons such as High running Costs as occurred due to Breaking down of the Plane Airbus A200-
300 that affect the business Activities of the Company such as Cutting down some Company
routes which lead to decrease in Corporate incomes also the inevitable Costs of Renting and
insured the Air plane A220-300. All of that reasons Lead the Company to suffer the losses year
to year. The Company suffer the losses in every year as its failure to comply with going concern
principle that requires the Company to be operated by the foreseeable future. The Company
should employ the following Strategies that will make it apply Going Concern principle of
Accounting so as to make it having proper risk management.

4
https://www.airtanzania.co.tz/about-us
3
a) The Company should employ The Expertise on making Air plane Crafts services and
Repairing so as to ensure that all the Planes owned by the company was at the good conditions
all the time.

b) The Company should ensure the service of the Air planes was Conducted by following the
expertise advices within the reasonable time so as to avoid risks of Breaking down for the planes.

c) Management of the Company should ensure Responsibilities Accountability and

Transparency in all Operating Activities of the Company such As responsibilities to company
officials and employees, Accountability to those company officials and other employees who
misconducts within the Company and also Transparency in all economic Or Monetary activities
of the company so as to ensure the company incomes used for the development of the company.

d) The Company Management should formulate the Special Committee with expertise in risks
management so as to manage the risks currently suffered by the company and also who should
impose the Mitigating factors and all measures so as to avoid any risks to be suffered by the
company at the future. The Committee also should be responsible in making assessment of the
Companies’ activities so as to avoid any risks to the Company.

TABLE OF CONTENTS SHOWING FINANCIAL STATUS OF AIR TANZANIA

COMPANY LIMITED (ATCL)

YEAR PROFIT LOSS

2021/2022 ---------------- 31,500,000,000/=
2022/2023 -------------- 356,600,000,000/=

2.3 Tanzania Telecommunication Corporation (TTCL)

As was established by the Tanzania Telecommunications Company Incorporation Act of 1993 5

and commenced operation on 1 January 1994 and is fully owned by the government of United
Republic through the office of Treasury Registrar. The company is specialized in fixing
telecommunication in Tanzania Mainland and Zanzibar and as a company it owns and operate

5
Act No. 12 of 2017
4
the public switched telephone network. The company also offer mobile money services through
TTCL PESA Limited.

From the CAG’S report of 2022/2023; the company has incurred loss in two consecutive years;
in the financial year of 2022/2023 a loss of Tanzania Shillings 894 million and in the year of
2021/2022 a loss of Tanzania shillings 19.23 billion. This can be seen as a positive change as the
company has managed to reduce the loss for about 94% comparing to last financial year. This
shows the ability of the company to influence the market compared to the last financial year.

In relation to the going concern principle the Company has the ability and will continue to run its
businesses for foreseeable future because of the reduction of losses due to the increase of profit
for about Tanzania shillings 8.05 which shows the ability of the company to have influence in
the market. The increase in profit is also influenced by the decrease of the sale costs for 12.58
Tanzania shillings billion and administration cost for Tanzania Shillings 6.22 billion. The
company has proved to have technology advantages and it has increased in operational
efficiency.

The gross profit margin has also increased from TZS 72,641 million in the financial year
2021/2022 to TZS 74,507 million in the financial year 2022/2023 which is estimated to be the
increase TZS 1,866 million equivalent to 3%. This cement the principle of going concern
principle as it shows entity’s operational efficiency as result from the decrease in the cost of sale.

TABLE OF CONTENTS SHOWING FINANCIAL STATUS OF TANZANIA

TELECOMMUNICATION CORPORATION (TTCL)
YEAR PROFIT LOSS
2021/ 2022 ---------------- 19,230,000,000/=
2022/ 2023 -------------- 894,000,000/=

3.0 CONCLUSSION
As the Accounting principle of going concern proving to be effective in securing the life of the
companies and all entities engaging in business activities it is recommended to all companies
both public and private companies to apply this principle and involving it in the management of
their companies so as to make their companies being operating in foreseeable future as to impose

5
proper management of risks that facing or ought to face their companies and making their
companies secured their lives.

BIBLIOGRAPHY
STATUTE:

Telecommunications Company Incorporation Act No 12 of 1993.

WEBSITES:
https://www.accountingtools.com/articles/the-going-concern-principle
https://tpdc.co.tz/tanoil
https://www.airtanzania.co.tz/about-us