The Institute of Certified Public Accountants of Uganda (ICPAU) conducted a financial literacy training for journalists from the Nation Media Group (NMG) on 26 February 2020. The training was organised to equip business reporters and editors with financial literacy skills, to help them improve the quality of business news reporting.
The areas of focus were: contemporary issues in finance and accounting, accounting and financial reporting, interpreting financial statements, and corporate taxation.
CPA Henry Nabaasa, a Quality Assurance Officer at ICPAU advised journalists to consider materiality (items of foremost significance) when interpreting financial statements. He noted that the 2 most significant financial statements are the Statement of Financial Position and the Statement of Profit or Loss. CPA Nabaasa, however, cautioned journalists against ignoring the Statement of Cash flows, as the statement portrays an organisation’s ability to meet its day-to-day operations and obligations. He further advised journalists to review the Notes to financial statements, to obtain details of the figures presented.
“Consider the variations in figures. Do not ignore sharp discrepancies in figures, as therein lies your big story,” CPA Nabaasa said.
CPA Mark Omona noted that accounting is important because it provides vital information which helps company directors to make informed decisions. He emphasized that accounting is concerned with 2 important issues, the financial condition and the financial performance of an organisation in a given period.
To help them appreciate the dynamics of accounting, journalists were taken through the fundamental principles that guide the preparation of financial statements. These are: economic entity assumption (separation of the entity from the owner), monetary unit assumption (currency of operation), measure specific time period assumption (accounts are prepared for a specific time), cost principle, full disclosure (disclose of all relevant principles), Going Concern principle (business should be seen to be operation for the foreseeable future), Matching principle (Match revenues and corresponding expenditure), Revenue recognition principle (record revenue after they have been realised), Materiality principle (operations must be able to influence decisions), Conservatism principle (not overstating or understating revenues).
Sam Settumba, the Business Editor at NMG thanked the ICPAU team for the training. “Thank you very much for this training. We will now have more informative reporting,” Settumba said.
The accountancy profession is one of the professions that is being affected by disruptions, such as the 4th industrial revolution. Accountants are preparing themselves by acquiring relevant skills, such as digital and soft skills, so that they meet the requirements and demands of the fast-moving world.
Other facilitators at the training were: CPA Charles Lutimba (Manager – Standards and Technical Support at ICPAU) and Mr. Robert Dhuule (Quality Assurance Officer at ICPAU). The training was held at the NMG offices.