A friend of yours has decided to start her own home decorating business. She has decided to establish the business as a sole proprietorship and to operate out of her home for now. Because she already owns a computer and all the required design software, she thinks she will be able to run the business initially without any outside financing. She is trying to decide how to prepare her financial statements and has come to you for advice. She asks you to explain what type of accounting system to use. Specifically, she is not sure if she needs to follow IFRS (“Whatever that is!" she says) or GAAP, or if she can just track the cash flow in her bank account. To help her out, first outline the differences in the accounting approaches that she has identified and any other approaches that you think might be appropriate. Then briefly explain the advantages and disadvantages of each system for her particular business and recommend one.