School of Accountancy
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Browsing School of Accountancy by Author "Jasper, Zuleka"
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Item Open Access Die openbaarmaking van finansiële instrumente in die finansiële state van mikro-gelduitleners(University of the Free State, 2000-05) Jasper, Zuleka; Van Wyk, H. A.English: Since 1992 the micro lending industry experienced significant growth. The industry is now in the position where it forms an integral part of the financial sector in South Africa. Very little formal research has been undertaken in die micro lending industry. It appears that no research what so ever has been done with respect to the financial presentation by micro lenders. It is very important to understand the micro lending industry. A short overview of the industry, as well as an overview of the regulatory body: the MicIO Finance Regulatory Council, are presented in this thesis. The purpose of financial reporting is to provide information to the stakeholders of an entity. In the South African context the King report is the most important document that defines and addresses the term stskeholder. In chapter 12 of the King report it defines stakeholders as /I any person, entity OI interest gIOUp that has some association with the en terprise," It was found necessary to identify the most important stakeholders of micro lending entities due to the wide span of the term stakeholders. The following stakeholders were identified as being the most important: o The owners o The suppliers of long term funds o The loan debtors o The employees. Stakeholders need sufficient information to make informed decisions. The quality of this information is imperative. Financial statements are the main source of information. It is important that the information in these financial statements are of outstanding quality. A number of business types are found in the micro lending industry. This study has shown that the most important and often used types are the close corporation and the company. Both the Company's Act and the Close Corporation's Act refer to Generally Accepted Accounting Practice (GAAP) as the basis for financial presentation. However, the interpretation of the term does not necessarily mean that statements on GAAP need to be applied. Fortunately this position is changing. This thesis was thus based on the assumption that reference to GAAP in die Company's Act and Close Corporation's Act means that statements on GAAPhave to be applied. The core of the study involves a discussion of the presentation requirements regarding the financial instruments that have been identified during the empirical study. Special reference was given to AC12S - Financial instruments: disclosure and presentation. The definitions in this document were detailed as it was used as a measure to identify the financial instruments included in the financial statements of micro lenders. The following financial instruments were identified: o Bank and cash balances o Debtors (other than loan debtors) o Loan debtors o Long term loans ,0 Creditors. In view of all relevant statements, legislation and corporate requirements a wide-ranging summary including all relevant presentation requirements regarding financial instruments have been incorporated. In the second section of the thesis the scope and results of the empirical study are discussed. The empirical study was performed on a sample of close corporations and companies that have been registered or provisionally registered with the Micro Finance Regulatory Council. The selected micro lenders' financial statements were analysed to establish the degree of compliance with the proposed financial reporting requirements. The writer thoroughly believes that the micro lenders' financial statements do not comply to the prescribed financial reporting requirements and leave much to be desired. Substantial enhancement is of crucial importance before these entities will effectively address the needs of all their stakeholders.