Accounting

Name: Phelisa Blake

Grade: 12 A
School: Vere Technical High
Candidate Number:
Subject: Accounting
 Acknowledgement

In successfully completing this project, many people have helped me. I would like to thank

all those who are related to this project.

Primarily, I would thank God for being able to complete this project with success. He gave

me the strength I needed and the will power to not give up.

I would also like to express my special thanks of gratitude to my teacher Miss Dawkins who

gave me the golden opportunity to do this project on the topic ‘to determine the benefits of

using Internal Accounting Standards in the preparation of financial statements at Value

Mart’.

My sincere thanks go to Mrs. Boothe, her support and guidance for the completion of this

project has been astonishing and appreciated.

In the end, I would like to thank my parents. Without their continuous comfort and support, I

would not have been able to complete this project.

Table of Content
 Introduction

AIM: To
determine the benefits of using Internal Accounting Standards in the preparation of financial
statements at Value Mart.

OBJECTIVES:
 Why the IAS was created.
 To determine if IAS is used in the preparation of financial statement
 The advantages of using the IAS to prepare Financial Statements.
 How IAS improved the accuracy and productivity of the financial statements.
 Literature Review

The international accounting standards are a set of international agreed principles and

procedures relating to the way companies present their accounting information. The concept

of accounting standard was an initial attempt to converge focus on harmonization or reducing

the differences among the accounting principles used in markets throughout the world. The

development of unified high quality international accounting standards used was developed

with the interest of the public to be understandable and enforceable to provide transparent and

comparable information.

In continuing, according to IASCF (2010), “The demand for international accounting

standards has increased rapidly and the economies rely on these international transactions.

They seek investment opportunity. Such transactions were not applicable because of the

difference in the national standards used in each countries and therefore it was risky to use

different standards to prepare financial institutions. The standards assist in these issues by

creating internationally recognized sets of accounting standards that is accountable and

efficient to financial markets around the world. Financial statements have incredible

importance to both investors and shareholders. Many of these shareholders base their

decisions on the data provided by the statements prepared, so it is exceedingly essential that

the statement presented reflects a true representation of the company status and the IAS

ensure that these statements are factual. This in general helps our investors to identify

opportunities and risk across the world.

Accurate and proactive financial statements can make a vast difference to a country.

Auditors use the standards set in place. A quality audit begins with high quality accounting
standards. The standards act as a dictator which lay down the terms and conditions for

accounting principles and practices. The rules and guidelines are mandatory and to be

followed by every company. It governs the whole manner of preparing financial statements or

standards so when auditors ensure that these guidelines are followed through, they can easily

verify that all financial statements ae true. Andrew Latham (2018), noted that Fraud is a

global problem to which investors have been victims to but with the introduction of IAS,

fraud is becoming less likely. A company can multiple methods to make the financial

statements more desirable, this can lead to the manipulation of revenues or expenses which

encourage fraud. Management of an organization cannot manipulate the financial statements

or data given because of the accounting principles that was set down by the IAS. These

Accounting Principles enforce systems that makes it difficult for managers to misrepresent

any financial information.

IAS Presentation of financial statement sets out the overall requirements for financial

statements included how they should be structured. The IAS is to prescribe the basis for

presentation of general-purpose financial statements to ensure comparability both with

current and previous periods and with the financial statements of other entities. Using IAS to

prepare financial statements would allow organizations to reduce the amount of time spent on

preparing the statements. There would be less cost associated since there are no more

multiple standards and regulations to follow.

Unity is a practice of requiring organization to prepare financial statements in accordance to

the relevant accounting framework and accounting standards. The use of accounting

standards will enable business to assess performances. By doing so they can compare and

contrast their businesses performances with other companies. It further helps a business to see

strength and weaknesses. Using the financial statements. The IAS facilitates uniform

preparation of general purpose financial statements published for the benefits of the
shareholders, creditors and the public. They are extremely important to investors and other

external groups who desire to assess the progress and prospect of the business. (Sampson

Quain 2018)

IAS promotes the country’s economy, increase stocks, provide a legal environment and

political economic system. The globalization of securities within markets has challenged the

regulators around the world to adapt to meet the needs of marketers or potential investors

while maintaining a high level of security for users.

Questionnaire
Data Collection
 Presentation of Data and Analysis

High Quality
Standards

Increase
better
Investors
Information
confidence

International
Accounting
Standards

Greater
Better Financing
Transparency

Accuracry
improved
Figure 1 illustrate the benefits involved in the operation of the International Accounting

Standards.

Table representing the stages involved in the preparation of financial

statements in compliance to the International Accounting Standards at
Value Mart.

STAGE 1 Review of the specific character of the accounting conditions

STAGE 2 Collect primary information, detection of the transactions

STAGE 3 Adaptation of the financial statements transformation to the specific features

of the company and data input

STAGE 4 Detection of transactions, which shall be corrected according to the

international standards and their corrections

STAGE 5 Correction of the transactions between associate legal entities

STAGE 6 Preparation of the final forms for the financial statements

STAGE 7 Prepare the final report

Figure 2 illustrate the stages involved in the process of using IAS to prepare financial

statements. Seven stages were developed in order for the financial statements to be in

compliance to the International Accounting standards.

Diagram representing the international investment made over the last 7

years at Value Mart

investment
investment

1200

1000

800
Axis Title

600

400

200

0
2014 2015 2016 2017 2018 2019 2020 2021 2022

Axis Title

Figure 3 convey the investments made over the last seven years because of the

implementation of the IAS to prepare financial statements. The data provides shows a sudden

decrease in investments in the year 2019 and a sudden growth in the years of 2020-2021.
 Interpretation of Results

For companies to secure financing they need to hire workers, build plants, and invest in

research and development, they must report financial information in a way that investors find

useful. Figure 1, examined whether the using of the IAS is effective in creating

financial productivity and accuracy. The research results identified six (6)

benefits of using the IAS at Value Mart. These benefits are; high quality

standards, better information, better financing, improved accuracy, greater

transparency and increase investors’ confidence. According to the China

Journal of Accounting Research- 2013 Edition: Transparent and relevant

information helps investor to make better decisions about where to put their

money with confidence. The 2013 journal also notes that investors, recognizing

the value of high quality financial information, support an objective and

inclusive standard-setting process.

Another key reflection from this research are the seven (7) critical stages

involved in preparing financial statements at Value Mart. These stages are all

adopted in compliance to the IAS. The data findings suggest that when using
these stages to prepare financial statements, it reduce the amount of time spent

in preparation as the same process is applied to all statements. The company

therefore has more room to provide for more investors. The implementation of

these stages also extends benefits such as: investors trust; as the stages are used

globally and not just limited to the company, employee flexibility; the company

has the ability to move staff with IAS knowledge and experience to various

parts of the organization and regulatory safe; the IAS sets a unified code of

accounting ethics, using the IAS, the company is not worried about sanctions

from the government and investors complains.

The results from the research also highlights the high level of investment

growth that has taken place at Value Mart since the adoption and

implementation of the IAS. The company adopted the IAS in 2015. From the

research it was revealed that it took, effort, time and finance to train accounting

professionals and educate investors about the changes. However, between the

year 2015 and 2021 the company has seen an overall impeccable amount of

growth as it relates to the increase in investments and financial growth.

In conclusion the single noted disadvantage related to the use of the IAS at

Value Mart is the effort, cost and time needed to change from previous systems

and practices; and both investors and accounting professionals might need help

to understand how the information they are receiving has changed. However,
the research highlights overwhelming evidence of the significant benefits and

advantages gained from using the IAS both for investors and the company.

Evaluation
Conclusion