ABSTRACT
The project is a comprehensive study of the changes in
Accounting standard, the impact on financial statement with a study of Guinness
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 statement 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 organizational setting from the conclusion
of the study, it can be observed that there will be serious potentials for
misunderstanding 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 applied 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.
TABLE
OF CONTENTS
Title
page
Approval
page..........................................................................i
Certification
page....................................................................ii
Dedication
...........................................................................iii
Acknowledgement..................................................................iv
Abstract..............................................................................v
Table
of contents...............................................................vi
CHAPTER ONE
INTRODUCTION
....................................................................1
1.1
Background
of the study ...............................................1
1.2
Statement
of problem...............................................3
1.3
Purpose
of the study.......................................................4
1.4
Research
Question .....................................................5
1.5
Research
hypothesis....................................................5
1.6
Significance
of the study............................................6
1.7
Scope
/ delimitation of the study.....................................7
1.8
Definition
of terms...................................................7
CHAPTER TWO
Review of Related Literature......................................9
2.1
Introduction
..............................................................9
2.2
Theoretical
framework ................................................10
2.3
Models
and Theories Relevant to the research question............28
2.4
Current Literature review..............................................30
CHAPTER THREE
RESEARCH METHODOLOGY............................................31
3.1
Research
Design ...........................................................31
3.2
Area
of the study.....................................................31
3.3
Population
of the study...........................................31
3.4
Sample
and sampling techniques of the study.................31
3.5
Instrument
for data collection ...................................32
3.6
Validity
and reliability of Instrument ......................33
3.7
Distribution
and retrieval of instrument........................33
CHAPTER FOUR
DATA
PRESENTATION AND ANALYSIS
4.1 Data presentation and interpretation ......................35
4.2 Findings ........................................................43
4.3 Discussion of findings .................................................44
CHAPTER FIVE
Summary, conclusion and Recommendation
...............45
5.1
Summary
of findings .............................................45
5.2
Conclusion ..........................................................46
5.3
Recommendation ..................................................47
References........................................................48
Appendix
A ....................................................50
Appendix
B.................................................51
Questionnaires ...........................................52
CHAPTER ONE
INTRODUCTION
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
1
13 in issue of the
international financial reporting standard (IFRS) issued by IASB from 2001
2
29 is issue of
international accounting standard (IAS) issued by IAS before April 2001.
3
15 in issue of
interpretations originated from the internation financial reporting standard
international committee (IFRSIC)
4
11 in issue of the
standard interpretation committee (SIC) statement, issued before April 2001.
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
operation.
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
What impact has
this standard made on Nigeria
economy?
2
How adequate is
this accounting standard that is been applied in the financial statement
helping to provide information to its users?
3
How necessary is
the adopting of the accounting standard in the preparation of financial
statement?
4
Of what importance
is the extent of compliance in the preparation of the financial statement of an
organization
5
To what extent has
the change in the accounting standard help to harmonize and improve the
accounting standard?
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.
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