Search results

1 – 10 of 562
Article
Publication date: 3 May 2016

Merve Kiliç, Ali Uyar and Başak Ataman

The purpose of this paper is to determine the preparedness of the small- and medium-sized enterprises (SMEs) for the International Financial Reporting Standard (IFRS) for SMEs in…

1562

Abstract

Purpose

The purpose of this paper is to determine the preparedness of the small- and medium-sized enterprises (SMEs) for the International Financial Reporting Standard (IFRS) for SMEs in Turkey; and to analyze the effect of several firm characteristics on such preparedness.

Design/methodology/approach

The preparedness of the SMEs was determined via a questionnaire survey. The effect of several characteristics of the SMEs (i.e. size, age, independent auditing, internationality, and the existence of an accounting department) on their preparedness was examined by employing non-parametric tests and logistic regression.

Findings

This study found that the preparedness of the SMEs for IFRS for SMEs is low in Turkey. Several firm characteristics including, size, independent auditing, and internationality have a significant impact on the preparedness of the SMEs.

Research limitations/implications

This study has some implications for several parties, including national and international standard setting authorities, entities, managers, and accounting professionals. SMEs are one of the most important actors in the adoption process of the IFRS for SMEs. Their preparedness level for IFRS for SMEs will present important clues to sustain an effective and successful adoption process. The results of this study show the profile of entities which are prepared for IFRS for SMEs that will be useful for standard authorities and regulatory bodies. The findings of this study will also be useful for other emerging countries’ standard authorities because they will face similar problems in their adoption process.

Originality/value

This research makes a significant contribution to the existing literature because there are only a few studies that analyze the preparedness for IFRS for SMEs, especially in emerging countries.

Details

Journal of Accounting in Emerging Economies, vol. 6 no. 2
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 18 May 2022

Dinuja Perera, Parmod Chand and Rajni Mala

The International Accounting Standards Board (IASB) has justified the simplification of International Financial Reporting Standards (IFRS) for small- and medium-sized enterprises …

Abstract

Purpose

The International Accounting Standards Board (IASB) has justified the simplification of International Financial Reporting Standards (IFRS) for small- and medium-sized enterprises (SMEs) in several ways, but no effective justification for this simplification has been made based on the information needs of users. This study aims to provide empirical evidence of the decision usefulness of IFRS for SMEs from a prominent user group of SME financial statements – the banks.

Design/methodology/approach

This study uses a mixed-method approach. First, a survey was conducted on commercial bank lending officers to assess the usefulness of different disclosure items included in the SME financial statements. Second, semi-structured interviews were conducted with commercial bank lending officers to gain an in-depth insight into the appropriateness and economic consequences of the requirements of IFRS for SMEs on their lending decisions.

Findings

The findings show that commercial bank lending officers did not consider all the disclosure requirements presented to them to be equally important. Hence, to facilitate the actual needs of the users’ decision usefulness, it is imperative that when given the opportunity, users participate in the development of accounting standards.

Originality/value

The findings of this study will be of interest to accounting regulators for evaluating the successful implementation of IFRS for SMEs and planning the next review of IFRS for SMEs. The IASB and SME Implementation Group are presently considering ways to increase user involvement for the next review of IFRS for SMEs, and the findings of this study signify the need for user involvement in the standard setting process.

Details

Meditari Accountancy Research, vol. 31 no. 5
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 1 April 2009

H.A. van Wyk and J. Rossouw

According to generally accepted accounting practice, the objective of financial statements is to provide useful information to the primary user groups of such statements…

1651

Abstract

According to generally accepted accounting practice, the objective of financial statements is to provide useful information to the primary user groups of such statements, regardless of the size of the entity. The primary users of the financial statements of SMEs are the owners, South African Revenue Services (SARS) and bankers. The recognition, measurement and disclosure requirements of full IFRSs do not result in cost‐effective and useful information being provided to the users of the financial statements of SMEs (non‐listed companies, close corporations and other small entities, irrespective of their legal form), because these users do not need the extensive and complex information provided in general purpose financial statements. Consequently, an accounting standard is required to differentiate between general and limited purpose financial statements. The International Accounting Standards Board (IASB) issued an exposure draft (ED 222) on IFRS for SMEs in February 2007. These stipulated modifications relating mainly to relaxed disclosure requirements and are more applicable to medium‐sized entities. According to a survey among preparers of financial statements in June 2007, these developments may not be adequate for the purposes of smaller entities, irrespective of their legal form. Accordingly, the study recommends that a formal, separate set of simplified differential reporting standards be developed for smaller entities.

Article
Publication date: 18 June 2020

Sara Abdullah Bakr and Christopher J. Napier

The paper investigates attitudes towards and perceptions of the adoption of the International Financial Reporting Standard (IFRS) for small and medium-sized entities (SMEs) in…

Abstract

Purpose

The paper investigates attitudes towards and perceptions of the adoption of the International Financial Reporting Standard (IFRS) for small and medium-sized entities (SMEs) in Saudi Arabia, immediately before and during the period of adoption.

Design/methodology/approach

The study adopts an interpretive approach, using a new institutional theory framework, drawing on concepts of institutional isomorphism and institutional logics. Research was undertaken using extensive interviews of business owners and managers, accountants, auditors, regulators and others. Interviewees were identified using snowball sampling, and the paper discusses the appropriateness of this method for research in management in MENA countries.

Findings

The adoption of IFRS, and in particular IFRS for SMEs, in Saudi Arabia can be understood best as an example of mimetic isomorphism, as many respondents suggested that the country adopted these standards in order to emulate other countries in the Gulf Cooperation Council and the G20 group of countries.

Practical implications

The study examines issues relating to the adoption of IFRS for SMEs in an emerging economy where adoption was not imposed by international financial institutions.

Originality/value

In addition to being the first study of the adoption of IFRS for SMEs in Saudi Arabia, the paper examines snowball sampling as a particularly useful method in MENA countries.

Details

Journal of Economic and Administrative Sciences, vol. 38 no. 1
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 28 June 2021

Nisansala Wijekoon, Grant Samkin and Umesh Sharma

This paper aims to extend the literature by examining the need for International Financial Reporting Standards (IFRS) for Sri Lankan small and medium entities (SMEs) and…

Abstract

Purpose

This paper aims to extend the literature by examining the need for International Financial Reporting Standards (IFRS) for Sri Lankan small and medium entities (SMEs) and investigating the institutional pressures that drove the adoption of the IFRS for SMEs in a developing country, Sri Lanka.

Design/methodology/approach

The theoretical framework adopted in this study draws on insights from new institutional sociology theory. An interview-based qualitative research was conducted with accountants and owners of SMEs, representatives from government agencies and the accounting standards-setting authority of Sri Lanka.

Findings

The emphasis on the need for international accounting standards for SMEs due to international structures and activities is not a priority for Sri Lankan SMEs. Sri Lankan SME owners do not receive requests to provide internationally comparable financial statements from their trade partners and international activities such as foreign exports, borrowings and ownerships are irrelevant business activities for them. Hence, findings reveal that the decision to adopt the IFRS for SMEs was in response to institutional pressures rather than alleged benefits of internationally comparable financial information. It appears from the results that the influence of local users’ needs and the government interference on the development of accounting standards does not exist in Sri Lanka.

Research limitations/implications

The research is limited to a single country. The data were collected from SMEs in Sri Lanka, as intended by the research boundary.[AQ1] The study has implications for policy makers, and standard setters charged with developing and implementing an appropriate financial reporting framework for SMEs.

Originality/value

The extant literature on IFRS for SMEs is sparse and mostly conducted through questionnaire surveys with a single user group of SME financial information.

Details

Meditari Accountancy Research, vol. 30 no. 5
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 24 November 2022

Nesrine Sassi and Salma Damak-Ayadi

The purpose of this study is to examine the indirect relationship between the mandatory adoption of International Financial Reporting Standards for small and medium-sized…

Abstract

Purpose

The purpose of this study is to examine the indirect relationship between the mandatory adoption of International Financial Reporting Standards for small and medium-sized enterprises (IFRS for SMEs) and the corporate governance index (CGI) by checking the mediating effect of the quality of financial statements (QFS) on this relationship.

Design/methodology/approach

The main objective of the IFRS for SMEs standard is to meet the specific needs of SMEs in transition and developing economies. Here, the authors used the structural equation method to investigate SMEs in countries that mandate the application of IFRS for SMEs for the years 2010 (pre-adoption) and 2016 (post-adoption). The final sample covered two emerging countries: the Dominican Republic and El Salvador.

Findings

The results show a positive association between the adoption of IFRS for SMEs, CGI and QFS. Furthermore, the findings confirm that the relationship between IFRS for SMEs adoption and CGI is under the control of the QFS.

Originality/value

This study provides standard setters and managers of SMEs with an overview of the importance of QFS on the significance of this relationship in emerging countries. The study contributes to the literature by examining the indirect relationship between IFRS for SMEs and CGI and building a CGI that integrates a set of governance practices linked to SMEs.

Details

Journal of Accounting in Emerging Economies, vol. 13 no. 5
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 28 January 2020

Salma Damak-Ayadi, Nesrine Sassi and Moujib Bahri

The purpose of this study is to identify the influence of environmental and institutional factors on the adoption of the International Financial Reporting Standard for small and…

1332

Abstract

Purpose

The purpose of this study is to identify the influence of environmental and institutional factors on the adoption of the International Financial Reporting Standard for small and medium-sized entities (IFRS for SMEs). This study used the neo-institutional theory and the economic theory of networks to explain why countries choose to adopt IFRS for SMEs.

Design/methodology/approach

This study is based on logistic regression analysis to investigate 177 countries, including 77 jurisdictions that adopted IFRS for SMEs between 2009 and 2015.

Findings

The findings confirm that the adoption of IFRS for SMEs is significantly related to law enforcement quality, culture, trading networks and economic growth. At the institutional level, coercive and normative isomorphism was found to be positively associated with IFRS for SMEs adoption. The results show also that the quality of the audit has no significant effect on the adoption of IFRS for SMEs. However, the joint effect of the quality of audit and quality of law enforcement is significantly related to the adoption of IFRS for SMEs.

Practical implications

The study contributes to a better understanding of the factors influencing the implementation of IFRS for SMEs standard across the globe and could be used to predict a country’s decision to adopt this standard.

Originality/value

This study contributes to the literature on international accounting harmonization by examining both environmental and institutional factors that influence the adoption of IFRS for unlisted private companies.

Details

Journal of Financial Reporting and Accounting, vol. 18 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 19 October 2012

Francis Aboagye‐Otchere and Juliet Agbeibor

The purpose of this paper is to assess the suitability of the International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMES) for small businesses…

3947

Abstract

Purpose

The purpose of this paper is to assess the suitability of the International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMES) for small businesses (micro entities and SMEs) in Ghana by assessing their need for the IFRS for SMEs and the appropriateness of the IFRS for SMEs as the accounting standard of choice for small businesses in Ghana. The paper also aims to investigate the firm characteristics likely to influence small businesses' need for the Standard and the appropriateness of the Standard for small businesses.

Design/methodology/approach

The survey method was used. A questionnaire survey of 305 small businesses was conducted, from which 149 useable questionnaires were returned.

Findings

It was found that small businesses in Ghana have limited international structures and activities which do not result in a need for internationally comparable financial reporting information. Small businesses also do not receive requests to provide such information. In total, 19 of the 27 issues addressed by the Standard and assessed in the study were found to be irrelevant to small businesses in Ghana. Size, legal form and number of owners influence the suitability of the Standard for small businesses in Ghana.

Originality/value

The paper provides some of the early empirical evidence on the final version of the IFRS for SMEs in Africa. The study also brings a fresh perspective by applying institutional theory to the adoption and implementation of the IFRS for SMEs.

Details

Journal of Financial Reporting and Accounting, vol. 10 no. 2
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 30 September 2019

Rebecca Warren, David Bernard Carter and Christopher J. Napier

The purpose of this paper is to investigate an element of the internal politics of standard setting by reference to the International Accounting Standards Board’s (IASB) movement…

1248

Abstract

Purpose

The purpose of this paper is to investigate an element of the internal politics of standard setting by reference to the International Accounting Standards Board’s (IASB) movement to the International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs). The authors examine the politics of the IASB’s expertise in technocratic governance by focussing on how the IASB defined SMEs, gave the standard a title and issued a guide for micro-entities.

Design/methodology/approach

The narrative case study focusses on central “moments” in the development of IFRS for SMEs. The authors employ Laclau and Mouffe’s condensation, displacement and overdetermination to illustrate embedded politics in articulating IFRS for SMEs.

Findings

The authors extend literature on the internal politics of standard setting, such as agenda setting, by examining the condensing of disagreements between experts and political pressures and processes into central decision moments in IFRS for SMEs. The authors illustrate these moments as overdetermined, manifesting in an act of displacement through the production of a micro-entity guide. This form of politics is hidden due to the IASB’s attempt to protect their technocratic neutrality through fixing meaning.

Originality/value

The authors make three contributions: first, overdetermination through condensation and displacement illustrates the embedded nature of politics in regulatory settings, such as the IASB. Second, the authors provide a theoretical explanation of the IASB’s movement from listed entities to IFRS for SMEs, drawing on Laclau and Mouffe. Third, the authors reinforce the necessity of interrogating the internal politics of standard setting to challenge claims of technocracy.

Details

Accounting, Auditing & Accountability Journal, vol. 33 no. 1
Type: Research Article
ISSN: 0951-3574

Keywords

Book part
Publication date: 1 January 2008

Ronita D. Singh and Susan Newberry

Purpose – Corporate governance requirements imposed internationally as part of the New International Financial Architecture (NIFA) include compliance with International Financial…

Abstract

Purpose – Corporate governance requirements imposed internationally as part of the New International Financial Architecture (NIFA) include compliance with International Financial Reporting Standards (IFRS). The appropriateness of applying IFRS in developing countries has long been controversial. Recently, the International Accounting Standards Board (IASB) extended its project on IFRS for Small and Medium Entities (SMEs) to include developing countries. This paper provides a history of the controversy over IFRS in developing countries and examines the SMEs project as it affects developing countries.

Design/methodology/approach – This paper uses an agenda-setting theoretical framework and document analysis to analyse IASB's published documents as part of its formal due process.

Findings – The controversies surrounding the application of IFRS in developing countries seem likely to continue. The public submission process may be ineffective and too late for those seeking to influence IFRS developments. The findings suggest that those seeking IFRS for developing countries may need to both devise an acceptable solution and obtain inside access to the standard-setting process to achieve this aim.

Research limitations – The research is limited to literature review and documentary analysis and therefore subject to the known limitations of published project documentation in accounting standard-setting.

Originality/value – Contributes to understanding of international accounting standard-setting, including why developing country issues seem likely to continue.

Details

Corporate Governance in Less Developed and Emerging Economies
Type: Book
ISBN: 978-1-84855-252-4

1 – 10 of 562