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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.

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.

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.

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.

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.

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.

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.

This paper aims to focus on economic consequences of audit outcomes by investigating the concept of audit quality operationalised as seven components of audit benefits to owner-managers of small companies.

The authors analyse survey data collected in 2013 from 642 small private companies above the audit exemption threshold in Finland.

No significant association was found between engagement of a Big 4 auditor (proxy for audit quality) and any of the audit benefits tested. However, the results provide consistent evidence of a positive relationship between the owner-manager’s perception of the competence and reliability of the external accountant and the perceived benefits of audit. It was also found that companies which do not incorporate e-processes in the accounting system are more likely to value the internal control benefits provided by audit.

Small business surveys suffer from poor response rates. To some extent, the authors overcame this problem by using two focused sampling frames and reminders. Care must be taken when generalising the results, as the definition of “small” varies across jurisdictions.

By focusing on small private companies, the research contributes to the audit quality literature. Contrary to studies of listed companies, the authors conclude that use of a Big 4 auditor is not a sufficient surrogate for audit quality in small companies. The authors go beyond aggregate measures of audit quality used in previous studies and identify specific audit benefits.

This empirical research paper draws evidence from a database of UK independent private companies (n=250) and reports on the financial aspirations of owner‐managers of family firms with respect to the flotation route. Following a brief review of the literature, the paper proceeds with an introduction of the UK survey into the financial development of private SMEs. Then evidence is presented on the perceived factors that influence the decision of owner/directors of family companies to consider the flotation option. Phase A employs univariate statistical analysis to contrast financial philosophies of the owner‐managing directors (OMDs) of family firms against those of their mainstream private counterparts. Phase B employs cluster analysis to categorise sample family companies into four generic groups that evidently highlight that the PLC route is not always tailored to financial issues. The empirical results demonstrate that the financial strategies of family companies are more or less in line with the behavioural issues shaping all private companies irrespective of family control. Finally, the paper concludes with a set of tentative policy implications. To encourage the public equity development of smaller privately held companies, particularly family firms, there is scope for more policy initiatives that are tuned to the “socio‐behavioural‐cultural” ethos of private‐OMDs as they master their corporate and entrepreneurial odyssey.

The purpose of this article is to study how two different managerial environments of the state‐controlled economy in Belarus – “private small business management” and “state or privatized large enterprise management” – influence middle managers' implementation of decisions. Two kinds of data are analyzed: “should” option or presented data, and “would” option or managers' preferred in reality option of activity.

The research was completed in two stages: survey research based on open‐ended questions and face‐to‐face structured interviews based on the principle of controllable projection. A total of 193 decisions are analyzed.

Managers of large and state enterprises should present an appearance of active tactics, but in reality they would prefer tactics of delay or no‐action. Managers of small private businesses should present all varieties of tactics except a tactic of inaction. In reality, they would prefer to act directly, or less often, to wait or not act at all.

The effect of other organizational factors than the size and form of ownership should be subjects of future research. The comparison of decision implementation tactics of mid‐level managers in large and small organizations, in state‐owned and private companies in countries with different economies should also be studied.

The findings of this paper have managerial implications for companies willing to open subsidiaries or establish partnership with enterprises from countries with a state‐controlled economy.

The paper is original research that proves the influence of the business environment and characteristics of a company on a middle manager's behavior.

While recently introduced EU regulation on the statutory audit of public interest entities (PIEs) aims to improve audit competition and quality, its success and impact depends on the definition of a PIE applied across the various EU Member States. In the UK, even though little is known about their auditing choices, these changes will not apply to most private companies despite their importance to the wider economy. The purpose of this paper is to provide an in-depth analysis of the private company audit market and examine the lobbying behaviour of the accounting profession around the definition of a PIE in the UK.

Using a large panel of independent private company audits in the UK and a textual analysis of submitted comment letters to a government consultation on the new regulation, this paper presents a comprehensive analysis of the audit market for private companies by measuring supplier concentration using four different measures of market share, and of the lobbying behaviour of the accounting profession.

There are two main findings. First, the private company audit market is characterised by low auditor switching rates along with a tight oligopoly of the largest independent private company audits maintained by the Big Four audit firms. Second, the lobbying behaviour of accounting and audit firms sought, and succeeded, to limit the scope of the definition of a PIE in the UK, consistent with the theoretical predictions of monopoly capitalism and the theory of professions.

The paper shows that the definition and scope of a PIE needs revisiting both within the UK and across all EU Member States, with a view to including more of these economically important private companies and highlights the policy challenge of increasing competition and choice in a concentrated audit market.

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.

As China is transforming from a planned economy a market‐oriented economy, private enterprise plays a prominent role in China's economy today. This paper introduces the status of private enterprise and focuses on its records management. By explaining the changes in China's policy towards the private sector, it deals mainly with practice in both archive administration and the records management of private companies. Government archives administration changed along with national policy from serving only the public sector to serving both public and private sectors evenly. For the private sector, archival consciousness is the key element in its fledging stage of records management. The paper also analyzes the characteristics of private companies that are different from state‐owned ones and the advantages and disadvantages of records management, and predicts some aspects of its development.

Russia's size – both in terms of population and geography, spanning 11 time zones, 89 oblasts (states or regions) and autonomous republics and its privatization program, encompassing some 100,000 small-scale enterprises, 25,000 medium to large firms, and 300 or so of its largest firms, made its privatization program the largest sale/transfer of assets conducted among the transition economies, with the possible exception of China. Comparisons by many of the program's critics, and there are many, to Poland, Hungary, or the Czech republic are invidious, especially the latter two countries whose populations are similar to just that of greater Moscow.