The new Board of Directors of your company met with the external auditors to consider and approve the financial statements for the year ended 31st December  2019.

Some of the directors have argued that the use of the accounting concepts, conventions, standards/principles and the underlying assumptions issued by theInternational Financial Reporting Standards (IFRS) and adopted/applied both by theInstitute of Chartered Accountants (Ghana) and your company in the preparationof the financial statements is waste of time andresources and have outlived theirusefulness as they provide little or no room for management and accountants someflexibility in treating certain items/transactions in their own way in the financialstatements as well as their inclusion in the Auditor’s Management Letters underthe heading “deficiency”. You are the only accountant among the seven (7)member board of directors and serves as a chairperson of the Finance andAdministration Committee.

REQUIRED:

Write a report to the Chairman of the main board of directors of the company discussing thesentiments of the directors proffering reasons for the relevance of such accounting principlesadopted/used in the preparation of the financial statements.

Answer rating: 100% (QA)

Ans Generally accepted accounting principles GAAP refer to a common set of accounting principles sta... View the full answer