T
he framework provides the basis of
reducing the number of alternative
accounting treatments permitted by IFRS
and also to assist the national standard setting bodies in developing domestic standards that are aligned with international
standards.
The financial information of a firm is of
great interest to a wide range of users who
seek different information about a company for varying purposes.
A well-presented accounting standard
therefore needs to articulate balanced information that is accepted across the board.
Sierra Leone has taken this path to create a
reliable investment market that meets international investors’ needs.
What Will International Investors Look
For Within a Domestic Firms Financial
Statements?
Investors want to see the risk capital of an
entity, to make proper valuations of any
investment plans, especially when their
operations are spread in various locations
around the world. The introduction of the
IFRS framework has positioned the country to meet the thirst of investors interested
in Sierra Leone.
The IAS/IFRS standards were developed
through an international due process that
involved accountants, financial analysts,
users of financial information, the business
community (i.e. stock exchanges, regulators and legal authorities and academics)
and other interested individuals and organizations from across the globe. It therefore gives a broad view of its suitability and
consistency.
In Sierra Leone, the conceptual frameworks
that were previously applied to present financial statements were the SSAP (Statement of Standard Accounting Practice),
ad-hoc standards and the GAAP (General
Accepted Accounting Practice). The difference between the GAAP and the IAS/IFRS
is that the GAAP is a dynamic concept that
changes constantly as new local legislations
are introduced into the system.
A legislation may be relevant to only one
country; in this case, if a multilateral company applies the GAAP standards and practice, it will be difficult to harmonize the financial reports simply because one country
may apply a national legislation that may
not be in line with other countries.
The IAS/IFRS standards however is rigid
and comprehensive and designed to suit
national legislations, regulators, business
communities, academics, interested individuals and organizations t