Improving the financial reporting of a burial stokvel

Abstract

This research aims to contrast widely accepted financial reporting frameworks against the records maintained by a burial stokvel. This will be the basis of the recommendations made to improve their financial reporting. Ratios are also recommended to better inform members’ financial decisions about the stokvel. A qualitative single-case study method was employed. This method of research examines events in a real-life context and is useful when investigating complex social phenomena that are under-researched, as are stokvels. Given the limited prior literature, an informative case study approach is followed which does not aim make generalizations. The Burial Stokvel does not prepare accounts but instead maintains record of transactions and decisions. As a result, they were unable to identify fraud and error, use evidence to set benchmarks or determine their financial position. The proposed accounting principles and ratios aim to resolve these problems. There are no studies specifically investigating how burial stokvels record transactions and decisions. This research forms the initial steps towards reducing the gap in prior literature as stokvels are significant to the South African context. The recommendations provided will equip members with the tools to improve their financial education and reduce the likelihood of fraud