The project is a comprehensive study of the changes in Accounting standard, the impact on financial statement with a study of Guiness Nigeria Plc Benin Branch, Edo state. This project is aimed at determining the impact of Accounting standard on the users of financial statement and also the needs of the Accounting standard. Data were collected, through primary and secondary sources. The finding revealed that the changes in Accounting standard play a vital role of the financial statment of the companies that adopted the change. Therefore, the impact of Accounting standard cannot be over emphasized hence it depends on the conferment of a given organizaitonal setting from the conclusion of the study, it can be observed that there will be serious potentials for misunderstaniding and suspicious resulting form information based on mix of conflicting accounting policies. It is therefore recommended that since international financial reporting standard has come to stay with thirteen standards already to its credit. Therefore one would except that the standard should be aplied on small scale business that are not quoted, and also non-compliance with accounting standard should not be seen only as a statutory offence but also as a criminal offence which can probably lead to closure of such business.
THE CHANGES IN ACCOUNTING STANDARDS ITS IMPACT ON FINANCIAL STATEMENT
TABLE OF CONTENTS
Background of the study
Statement of problem
Purpose of the study
Significance of the study
Scope / defimitation of the study
Definition of terms
Review of Related Literature
Models and Theories Elevant to the research qustion
Current interative review
Area of the study
Population of the study
Sample and sampling techniques of the study
Instrument for data collection
Validity and reliability of Instrument
Distribution and retrieval of instrument
DATA PRESENTATION AND ANALYSIS
4.1 Data presentation and interpretation
4.3 Discussion of findings
Summary, conclusion and Recommendation
Summary of findings
THE CHANGES IN ACCOUNTING STANDARDS ITS IMPACT ON FINANCIAL STATEMENT
1.1 BACKGROUND OF THE STUDY
In recent years, there has been a lot of criticism about accounting standard and the impact of the recent changes in financial report they prepare. A lot of people have led to question the validity of the profit measuring procedures applied in arising at the profit disclosed in published accounting. Quite a number of proposal have been made in an attempt to reform the methods generally in used.
This has resulted in coming together of different countries with a view to working out modalities for the standardization of these profit measuring and reporting procedures.
The international accounting standard committee (IASC) produces international accounting standards (IAS) to be followed by all member countries, of which Nigeria is one of them. Also they also produce additional statement to accounting standard (SAS) in an attempt to make the international standard meet with the local condition with the aid of globalization and increasing demand for transparency. The (IASC) as reconstructed in 2001 by creating the international accounting standard board (IASB) among other changes.
A new set of rules, which would align Nigeria with other countries and also improve investors confidence was formed in May 2011 known as international financial reporting standards (IFRS) which was issued out by international accounting standard boards which is globally accepted specially IFRS are defined in comprise
The 13 IFRS in issue are:
IFRS 1 – First time adoption of IFRS
IFRS 2 – Share based payment
IFRS 3 – Business combination
IFRS 4 – Insurance contract
IFRS 5 – Non-current asset held for sale and discontinued
IFRS 6 – Exploitation for and evaluation of mineral resources
IFRS 7 – Financial instruments disclosure
IFRS 8 – operating segments
IFRS 9 – Financial instrument
IFRS 10 – Consolidated financial statement
IFRS 11 – Joint arrangements
IFRS 12 – Disclosure of interest in other entities
IFRS 13 – Fair value measurement.
This work intends to analyze and examine the impact of these standards, the financial statement with particular emphasis on Guinness Nigeria Plc Benin, Edo state.
1.2 STATEMENT OF THE PROBLEM
Good accounting practice means that the account must be in accordance with the international financial reporting standard (IFRS), and the international accounting standard (IAS). The impact of accounting standard in the finance statement of an organization cannot be over emphasizes.
Moreover, the problem can be summarized below:
a Lack of personnel with adequate knowledge of accounting standard is a major issues affecting the changes.
b Lack of infrastructures and equipment which help to obtain most accurate information and report.
c Inadequate accounting standard applied on financial statement to provide information for its users.
d The problem of poorly designed accounting system in organization
e The effect if faulty financial statement and report and the analysis produced by the management towards the achievement of the organizational goal.
f The effect of financial statement and report which are not prepared at the appropriate tine.
g Ineffectiveness of financial statement due to its improper application.
1.3 OBJECTIVE OF THE STUDY
The objective of this research work is intended to do the following:
A To revealed that the changes in accounting standard play a vital role on the financial statement of the companies that adopted the changed.
B To determine information about the changes in the net resources of the business organization
C To find out if accounting standard is cumbersome and create problem.
D To determine whether accounting and financial statement enhance accountability, transparency and improve quality to financial results of the organization.
1.4 RESEARCH QUESTION
The following are research questions postulates to guide the study.
1.5 RESEARCH HYPOTHESIS
The following hypothesis were formulated in order to determine the validity and reliability of the study.
a HO: The changes in accounting has no impact on the financial statement.
Hi: The changes in accounting has impact on the financial statement.
b Ho: Adoption of the accounting standards does not help in the standardization are harmonization of financial statement
Ho: Adoption of the accounting standards help in the standardization are harmonization of financial statement
c Ho: it is of no importance to determine the extent of compliance of some organization in the preparation of the financial statement.
1.6 SIGNIFICANCE OF THE STUDY
The accounting standards are developed to ensure higher degree of standardization in the published of financial statement. They provide the necessary information about how accounting information should be presented in order to enhance the value of its content and facilitated through understanding.
The significance of this study to the academic world cannot be over emphasized. It is of benefit to all users of accounting information who need to interprets and use proper understanding of the financial standard and the information so derived in making management decision for the interest of the organization.
Another most importance of the study is to reveal to the management of (Guinness Nigeria Plc Benin, Edo state) on the standards in financial statement and also an accounting guides to staff of the organization
Lastly, this study would also serve as reference literature to further researchers on the changes and impact of accounting standards.
1.7 SCOPE / DELIMITATION OF THE STUDY
Despite the fact that the study is based on the impact of accounting standards in financial statement. It also covers the importance of the standard, application, compliance thus the need for the standards and also the main aim of this standardization.
The limitation is as a result of limited time, insufficient fund available with the researcher and limited source of material. Restriction of some vital information about the company with a response of confidential issue.
1.8 DEFINITION OF TERMS
A Standards: The simply means the regulations governing the use of financial statements.
B Changes: This simply means the process of becoming different form he former state.
C Fair values: The price that would be received to see and asset or paid to transfer a liability in an orderly transaction between market participants at the measurement data
D Financial statements: These are statements used in recording financial transaction of any balance sheet of business.
E Joint Arrangement: An arrangement of which two or more parties have joint control.
F Financial instrument: A document that has a monetary value or represents a legally enforceable agreement between two parties e.g shares.
G Accounting: The development and use of a system for recording and analyzing the financial transactions and financial status of a business or other organization.