ICAG adopts new standards for financial and audit reporting for SMEs

The Deputy Minister of Finance and Economic Planning, Mr Seth Tekper, on Wednesday launched the simplified versions of the International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISAs) for use by Small Scale Entrepreneurs (SMEs) in the country.

The publications would help businesses and companies conform to global and comparable standards, make their financial statements easily understood in the global marketplace; enhance credibility to their financial statements prepared locally and facilitate consolidation of financial statements.

It was organised by the Institute of Chartered Accountants (ICAG) Ghana.

The World Bank in the ROSC A&A Report issued in 2004 pointed to some short comings in the auditing standards applied in Ghana, hence, Ghana’s adoption of the international standards on auditing to be applied in carrying out auditing and assurance engagements.

Mr Tekper noted that the massive international flow of investment capital across national boundaries to support globalisation and economic growth had added new Impetus to the adoption of IFRS and ISAs.

“This is because investors now prefer financial statements to be prepared not only on timely basis, but to conform to global and comparable standards. The use of the international standards is being promoted as a solution to the crisis that can erupt from these flows.”

The Deputy Minister noted that the Government was concerned about the implication of the adoption on government’s fiscal policy especially with profit tax revenue generation and called on ICAG , accountancy firms, Ghana Revenue Authority and Taxable Entities to dialogue to ensure that all contentious issues were resolved during the transition period.

He entreated ICAG Ghana, Audit Service, Internal Audit Agency and the Auditing firms to collaborate to build capacity to strengthen audit practice in Ghana.

Mr Tekper implored ICAG, Controller and Accountant General’s Department, Ghana Audit Service, Internal Audit Agency, and accounting firms to collaborate and liaise with the Ministry of Finance to expedite the adoption process.

Mr Joseph Blankson, President of ICAG, explained that the IFRS for SMEs was a modification and that it was meeting the needs of private company financial reporting users and easing the financial reporting burden on private companies through a cost benefit approach.

He said the Institute would collaborate with the Association of Ghana Industries (AGI), Ghana Revenue Authority and Auditing firms to ensure the successful application of the standards.

Nana Owusu-Afari, President of AGI, said SMEs in Ghana constituted over 80 per cent of businesses and contributed to a high percentage of the country’s GDP but admitted that majority of them fell short when preparing and presenting basic financial statements, let alone embracing best accounting practices.

He requested for training programmes on the new standards for accountants and auditors of AGI and urged stakeholders and accounting fraternity to facilitate the process with requisite structures and legislation to migrate associated challenges.

“We are hopeful that the ICAG would provide a help desk to address some of the challenges that may come up with the adoption of the new standards”.

Source: GNA

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