THE ROLE OF ACCOUNTING STANDARD IN THE DEVELOMENT OF ACCOUNTING THEORY
An accounting standard is a role or principle that governs current accounting practice and that is used as a reference to determine the appropriate treatment of complete transaction. Also accounting standard is a role or set of rule which prescribes the method by which account should be prepared and presented. These working regulation are used in by a national and international body of the accounting profession in Nigeria such standard are called statement of accounting standards (SAS) and formulated and issued by the Nigeria accounting standard board (NASB). The roles which accounting standard plays in the development of accounting theory is that accounting standard is a principle which is form through the prickets of the accounting profession which also lead to the development of accounting theory which is the discipline of study which examines methodologies, assumption and framework. Financial accounting principle is also assumption and application of financial principle. The study of accounting theory involves a review of both the historical foundation of accounting practice a well as way in which accounting practice are verify and added the regulatory framework that govern financial statement and financial reporting. (ASC) was set up in 1970 to review the standard of financial accounting report and develop appropriate accounting standard observation of which should be mandating for all member of ASC which were:
ICAE-Institute of Chartered Accounting of England
ICAS- Institute of Chartered Accounting of Scotland
ICAI-Institute of Chartered Accounting of Ireland
CACA-Chartered Association of Certified accounting
ICMA- Institute of Cost and Management accounting
CIFPFA-chartered institute of public finance and accounting
- STATEMENT OF THE PROBLEMS
The problem is to know truly whether accounting theory is built up from accounting standard or to know whether the accounting standard is the bedrock of accounting theory and also know whether truly the development of accounting theory is emanated from accounting standard.
- OBJECTIVE OF THE STUDY
The purpose or objective of the study is meant to
- know on how accounting standard has help in the development of accounting theory and to see the rules that are lay down by the various accounting practices today. This will also fulfill the research requirement of scholars to
- predict the future and form an addition to the body of knowledge
- To current error and improve validity of existing practice.
- RESEARCH QUESTION
- is it a must that annual financial statement must be prepared in accordance with the provision of CAMA1990 and statement of accounting standard(SAS)
- Is it an offence for any company to comply with the provision CAMA1990?
- Is it mandatory that every company must keep accounting records, prepare financial statement annually and appoint an auditor to audit the financial statement
- RESEARCH HYPOTHESIS
HO: it is not mandatory for every company to keep accounting records prepare financial statement annually and appoint an auditor to audit such financial statement.
HI: it is mandatory for every company to keep accounting records, prepare financial statement annually and appoint an audit or to audit such financial statement.
HO: annual financial statement must not be prepared in accordance with the provision of CAMA 1990 and statement of accounting standard (SAS).
HI: annual financial statement must be prepared in accordance with the provision of CANA 1990 and statement of accounting standard (SAS)
HO: it is not an offence for any company that does not comply with the provision of CAMA 1990
HI: it is an offence for any company that does not comply with the prison of CAMA 1990.
- SIGNIFICANCE OF THE STUDY
The significance of this study are based on the important and benefit to users and prepares of accounting statement to predict the future, self-actualization, explanation of practices, correct of error and validity of existing practice and to the body of knowledge such as investors both individual and corporate, multinational companies, tax authorities and large international accounting firm would also benefit as accounting and auditing would be much easier. The accounting statement should guide highly risky moderately risk and leak risk business and it should also guide the user in environment reporting to show the effect of alternative of reporting method on overall economic actuates
- SCOPE OF THE STUDY
This study is hinted to examining the role of accounting standard in the development of accounting theory. However it will be restricted to investigation carried out on institute of chartered accounting of Nigeria (ICAN) Uyo District.
- LIMITATION OF THE STUDY
- TIME: due to the time constraints, the researcher had a limited time given for the completion of the research work.
- FINANCE: as a result of high cost of transportation and finance constrain the researcher was unable to make this project complete to a maximum level.
- INFORMATION: this possesses some constraints to the researcher as the state and school libraries lack appropriate reference books for the completion of this study.
1.9 DEFINITION OF TERMS
- Accounting: this involve recording, classifying, processing, summarizing, analyzing and interpretation of financial transaction.
- Theory: this is a body of rules, ideas and principle and teaching that apples to a particular subject.
- Accounting theory: is a discipline study which examine methodologies, assumption and frame work of financial accounting principle or accounting theory. This is a logical of reasoning, in the form of a set of board principle that provides a general frame of references by which accounting practice can be evaluated and guides the development of new practice and procedures.
- Accounting standard: this is principle that governs current accounting practice and that is used as a reference to determin the appropriate treatment of complete transaction.
- Development this can be defined as the levels of advancing and increasing in valve in an organization.
Cooperate governance: this is the principle and valves that guide a company in the conduct of its day to day business and how stake holed interact among one another or has to do with the management of co-operate organization through the process of defining the relationship between stake holders- shareholder, directors and managers.