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Article
Publication date: 1 April 2001

Shifei Chung and Ramesh Narasimhan

As a territory of the UK (until 1 July 1997), Hong Kong followed the UK accounting and auditing standards quite closely, in most cases mirroring the requirements. However…

2183

Abstract

As a territory of the UK (until 1 July 1997), Hong Kong followed the UK accounting and auditing standards quite closely, in most cases mirroring the requirements. However, there was a departure regarding the elimination of the statutory audit of small private companies in the UK in 1994, but this was not followed in Hong Kong. An audit is not required for small private companies in the USA either. This study evaluates the perceived value of the small companies’ audit in the opinion of two interest groups that are most affected by this requirement: small private limited companies and small audit firms. Results indicate that both groups of respondents consider the audit to be a valuable experience. While this result is not unexpected from the partners/proprietors of small audit firms, who benefit most from the mandatory audit requirement, it is a surprise from the small companies’ perspective.

Details

Managerial Auditing Journal, vol. 16 no. 3
Type: Research Article
ISSN: 0268-6902

Keywords

Open Access
Article
Publication date: 12 February 2018

Siming Liu and Len Skerratt

Since the UK Companies Act 1981, different reporting standards have developed for different classes of company to reduce the reporting burden on non-listed companies

2786

Abstract

Purpose

Since the UK Companies Act 1981, different reporting standards have developed for different classes of company to reduce the reporting burden on non-listed companies. There are now different regimes for listed, large private, medium-sized, small and micro companies. This strategy raises the issue of whether earnings quality across the different classes of company is comparable. The paper aims to discuss this issue.

Design/methodology/approach

The paper uses the smoothness of earnings to measure reporting quality across the different types of companies from 2006 to 2013, based on 514,000 observations. Smoothness is an indicator of poor quality.

Findings

The authors find that listed companies have the highest earnings quality, closely followed by small and micro companies. In contrast, large private and medium-sized companies have much lower earnings quality. Overall, the authors find companies which switch between reporting regimes have lower earnings quality. The authors also find that earnings quality is not affected by the small company exemption from audit.

Research limitations/implications

Companies filing abbreviated accounts are excluded since they do not file an income statement. The recent revisions to UK GAAP (FRS 102 and FRS 105) are not examined due to insufficient data.

Practical implications

The Financial Reporting Council’s (FRC) strategy of reducing the financial reporting and auditing obligations for small companies seems not to have significantly affected earnings quality. However, the FRC may need to review the reporting requirements of large private and medium-sized companies and also the option of companies to switch between reporting regimes; in these settings earnings quality appears to be weaker.

Originality/value

The paper studies the effect of earnings quality across the different reporting regimes in the UK. Novel and important features of the study are that the sample covers a wide variety of small and micro companies which have not been analyzed previously; the results are disaggregated by year, for assurance that the results are not driven by a single rogue year; and the authors also address the small company exemption from audit, and the flexibility of non-listed companies to switch between regimes.

Details

Journal of Applied Accounting Research, vol. 19 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 1 June 2000

Sha’ri M. Yusof and Elaine Aspinwall

TQM is a philosophy mainly dominated by large companies. Small businesses are lagging behind larger ones when it comes to introducing and adopting new managerial…

7439

Abstract

TQM is a philosophy mainly dominated by large companies. Small businesses are lagging behind larger ones when it comes to introducing and adopting new managerial philosophies and advanced technology. Many small companies have stopped at quality system certification, such as ISO 9000, in their quality journey rather than pursuing further continuous improvement efforts through TQM. Small businesses must understand the need to go beyond the quality system stage and work towards a total approach for quality. Only through this total approach will their quality effort be a success. Discusses the various issues confronting small businesses when embarking on TQM. First, reviews the subject of TQM and the quality initiatives undertaken by small businesses (which are treated as small‐ to medium‐sized enterprises (SMEs)) such as ISO 9000 and TQM. The small business characteristics are also examined. Second, presents a case study conducted in a small manufacturing company. Culminates with conclusions and discussions drawn from both the review and the case study with suggestions for future research directions.

Details

International Journal of Operations & Production Management, vol. 20 no. 6
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 1 August 2002

Hernan Riquelme

Earlier research studies predicted that it would be small and medium‐sized businesses that were more likely to adopt and benefit from the use of the Internet because of…

3157

Abstract

Earlier research studies predicted that it would be small and medium‐sized businesses that were more likely to adopt and benefit from the use of the Internet because of their greater flexibility. Anecdotal evidence appears in the literature to support this claim; however, little systematic empirical research has been done among SMEs to test this speculation. A sample of 248 companies in Shanghai, China, was divided into small, medium and large groups. The statistical analysis indicates that there are significant differences between large and small companies. Large companies have benefited considerably more from the Internet than small companies not only in their increased sales (derived from the Internet) but also from cost savings. Although the whole sample confirms the main reason for establishing an Internet connection, to gain a competitive advantage, companies also think that the Internet does not work equally for all players.

Details

Internet Research, vol. 12 no. 3
Type: Research Article
ISSN: 1066-2243

Keywords

Article
Publication date: 1 June 2002

Jill Collis and Robin Jarvis

This research is drawn from a survey of 385 private limited companies in the UK that fall within the 1999 EU size thresholds for a small company. Examines the use of…

9432

Abstract

This research is drawn from a survey of 385 private limited companies in the UK that fall within the 1999 EU size thresholds for a small company. Examines the use of financial information in small companies, as financial management is critical to their success and survival. The purpose of the research was to identify the sources and utility of financial information used and the results show that the majority of small companies adopt practices that include formal methods of planning and control. There is a strong emphasis on controlling cash and monitoring performance in the context of maintaining relationships with the bank. The most widely used and most useful sources of financial information are the monthly/quarterly management accounts and cash flow information in various forms. Multivariate analysis reveals that the utility of the periodic management accounts is contingent upon the size of the business and the receipt of management advice from the auditor/accountant. The findings of this research have important managerial implications for the directors and their advisers.

Details

Journal of Small Business and Enterprise Development, vol. 9 no. 2
Type: Research Article
ISSN: 1462-6004

Keywords

Article
Publication date: 1 February 1995

Anna Brady

What can big business learn from small business? Plenty. But beware—the same mistakes can kill any company, any size.

Abstract

What can big business learn from small business? Plenty. But beware—the same mistakes can kill any company, any size.

Details

Journal of Business Strategy, vol. 16 no. 2
Type: Research Article
ISSN: 0275-6668

Article
Publication date: 13 March 2009

Chris Ellegaard

The literature holds few contributions regarding purchasing practices of small companies, despite the impressive size of this customer segment. Hence, this paper seeks to…

2249

Abstract

Purpose

The literature holds few contributions regarding purchasing practices of small companies, despite the impressive size of this customer segment. Hence, this paper seeks to identify the purchasing orientation of small company owners.

Design/methodology/approach

The study applies an interpretive qualitative case based approach. Small company owners describe their purchasing practices in a language void of theoretical concepts and by the continuous use of examples. Some practices are more or less unconscious. Interpretation is needed in order to discover patterns across the cases.

Findings

Small company owners down‐prioritize purchasing and spend few resources on developing their purchasing capabilities. They emphasize operational security from suppliers – covering quality and delivery as well as service and problem‐solving capabilities. Price is a minor issue. They are extremely loyal customers, who rarely meet suppliers, but still manage to maintain trusting relationships with them. Reliability from suppliers is essential.

Research limitations/implications

This research concerned manufacturing firms. Earlier contributions as well as this study indicate that studies of small company purchasing in other sectors (trade for instance) could produce different findings.

Practical implications

Companies selling to small companies should build service capabilities in their sales organization. The investigated small customers emphasize operational security, problem‐solving, informal attitudes, reliability, and they are highly loyal. Selling companies capable of mastering this behavior can expect a higher profit and enjoy close, long lasting customer relationships with these customers.

Originality/value

The paper identifies the small manufacturing company as a distinct customer segment, with characteristics that differ from the large company. The identification of small company owner purchasing orientation helps sales professionals understand this segment and provides a basis for optimizing selling behavior, organization etc.

Details

Journal of Business & Industrial Marketing, vol. 24 no. 3/4
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 1 February 1979

David Ford and Tim P. Rowley

Introduction This paper is the result of a research project into the use of concepts and ideas from the marketing literature by small companies operating in industrial…

Abstract

Introduction This paper is the result of a research project into the use of concepts and ideas from the marketing literature by small companies operating in industrial markets. The research was based on ideas generated by one of the authors in consultancy and research and by the other in the day‐to‐day management of a small company.

Details

Management Decision, vol. 17 no. 2
Type: Research Article
ISSN: 0025-1747

Article
Publication date: 1 February 1970

Frank Broadway

Because you are a small company, don't think that you are too small for the spending of a little time, and maybe money, on the process of streamlining your organizational…

Abstract

Because you are a small company, don't think that you are too small for the spending of a little time, and maybe money, on the process of streamlining your organizational techniques. The revision of your management structure, your accounting or production systems could well give you the sound basis for development which you need and will certainly make you an attractive proposition for interested companies later on

Details

Management Decision, vol. 4 no. 2
Type: Research Article
ISSN: 0025-1747

Abstract

Details

Talent Management in Small Advanced Economies
Type: Book
ISBN: 978-1-78973-450-8

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