Surgimed’s board of directors aimed at ensuring the highest standard of transparency and accountability to all stakeholders. As a result, they require the executive management to fully disclose every financial transaction in the financial statements as separate items. However, the company’s accountant who is a member of the Institute of Chartered Accountants Ghana disagrees citing the issue of materiality thresholds required under the conceptual framework. IAS 1 Presentation of Financial Statements requires the disclosure of material transactions as a means of achieving relevance, accountability and transparency. The International Accounting Standards Board (IASB) helps in this regard by further defining the nature of materiality in the Conceptual Framework.

Discuss the nature of materiality to the directors of Surgimed Ghana Ltd. Do you think practicing accountants should use similar principles as preparers of financial statements when making judgements in applying the concept of materiality to financial statements?

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As per IAS 1 each material class of similar items must be presented separately in the financial stat... View the full answer