Main Article Content

Abstract

Business growth in a developing economy is largely depending on the extent of the deployment and utilization of their resources human, capital and otherwise in order to maximise profit of the firm. The change in company’s income (profit) from year to year  has influence on the differences in the approaches adopted by accounting practitioners in reporting business income and thereby influencing reported income. The difference accounting policies, approaches and procedures adopted by accounting practitioners and preparers of financial statements create differences in the measurement, assessment and interpretation of business income through provision and loopholes in International Financial Reporting Standards (IFRSs) that lead to manipulation of financial numbers usually within the letter of the law and accounting Standards. Creative accounting practice employed by preparers of financial statements increase or decrease of depreciation, stock valuation method, and lease recognition; for tax purpose, smoothening income et al has created wide gap in the measurement and assessment of business income and performance due to the selfish interest of few stakeholders to the detriment of the larger society. Cash flow should be used to access and measure entities performance because it is more reliable and more difficult to manipulate than statement of financial performance.

Article Details