Accounting Principals

IFRS – International Financial Reporting Standards

IFRS Principles :

➔ Accrual- transactions are recorded when they occur, not when the cash has been settled.

➔ Ongoing concern- the business operates with the presumption that it will continue operating in the future.

➔ Materiality- information recorded should be relevant to the decision making of the users of the financial statements.

Financial statements must be :

1. Understandable – comprehensible to the users.

2. Comparable – from one year to the next, and from one company to another.

3. Reliable – financial statements should be presented accurately and fairly.

GAAP- Generally Accepted Accounting Principles

Prudence- financial recording should be conservative and not understated or overstated in any way.
Historical cost- all assets of the business are to be recorded at the price for which they were originally acquired.
Business Entity rule- the business operates independently to its owners.

SAICA - South African Institute for Chartered Accountants.

- Accounting body that regulates the standard of accounting procedures in South Africa.

Ethics

Moral beliefs about right and wrong.

Businesses employ a professional code of conduct to ensure all employees adhere to a set of rules which elicit ethical behavior in the workplace.

Each business will have a code of ethics that outlines the appropriate professional behaviour for employees to practice.

Ethical behaviour can be determined by evaluating :

➢ Fairness

➢ Transparency

➢ accountability,

➢ Sustainability,

➢ confidentiality

➢ and the integrity of the situation and actions carried out by the party in question.

References

Anon., 2007. The Answer series: Grade 11 Accounting. 2007 ed. Cape Town: The Answer.
Anon., 2019. Investopedia. [Online]. Available at: https://www.investopedia.com/ [Accessed 3 October 2019].
Doctor, K., 2015. FLIPHTML5. [Online]. Available at: http://fliphtml5.com/fkul/mgtf/basic [Accessed 1 October 2019].
T Hall, D. W. P. S. A. A. P. G. P. F., 2017. Accounting Study Guide. 2016 ed. Musgrave: New Generation Publishers .

Neha Pillay (2019)