Surgimed Ghana Ltd. operates in the medical supply industry and specializes in sales and installation of medical equipment and devices such as hospital furniture, medical equipment, electronic equipment, local area networking with a station monitoring and general telecom networking. The company is noted for installation of Sterilization Units, X-Ray machines and Ultrasound scanners, Installation of Medical Gas Pipe Lines and Operation Theater Requirements around the country. At the end of the 2020 financial year, the directors of the company were not sure whether they have treated the following transactions in their financial statements ending 31st December, 2020 correctly. Transaction A Surgimed’s board of directors aimed at ensuring the highest standard of transparency and accountability to all stakeholders. As a result, they require the executive management to fully disclose every financial transaction in the financial statements as separate items. However, the company’s accountant who is a member of the Institute of Chartered Accountants Ghana disagrees citing the issue of materiality thresholds required under the conceptual framework. IAS 1 Presentation of Financial Statements requires the disclosure of material transactions as a means of achieving relevance, accountability and transparency. The International Accounting Standards Board (IASB) helps in this regard by further defining the nature of materiality in the Conceptual Framework. Required Discuss the nature of materiality to the directors of Surgimed Ghana Ltd. Do you think practicing accountants should use similar principles as preparers of financial statements when making judgements in applying the concept of materiality to financial statements?
CASE STUDY
Surgimed Ghana Ltd. operates in the medical supply industry and specializes in sales and installation
of medical equipment and devices such as hospital furniture, medical equipment, electronic
equipment, local area networking with a station monitoring and general telecom networking. The
company is noted for installation of Sterilization Units, X-Ray machines and Ultrasound scanners,
Installation of Medical Gas Pipe Lines and Operation Theater Requirements around the country. At
the end of the 2020 financial year, the directors of the company were not sure whether they have
treated the following transactions in their financial statements ending 31st December, 2020 correctly.
Transaction A
Surgimed’s board of directors aimed at ensuring the highest standard of transparency and
accountability to all stakeholders. As a result, they require the executive management to fully disclose
every financial transaction in the financial statements as separate items. However, the company’s
accountant who is a member of the Institute of Chartered Accountants Ghana disagrees citing the
issue of materiality thresholds required under the conceptual framework.
IAS 1 Presentation of Financial Statements requires the disclosure of material transactions as a means
of achieving relevance, accountability and transparency. The International Accounting Standards
Board (IASB) helps in this regard by further defining the nature of materiality in the Conceptual
Framework.
Required
Discuss the nature of materiality to the directors of Surgimed Ghana Ltd.
Do you think practicing accountants should use similar principles as preparers of financial
statements when making judgements in applying the concept of materiality to financial
statements?
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