International Financial Reporting Standards for small and medium-sized entities: A survey showing insights of South African accounting practitioners

Abstract

Orientation: The International Financial Reporting Standards (IFRS) for small and medium-sized entities (SMEs) was adopted in South Africa in 2009 to reduce the complex burden of financial reporting for SMEs. Research purpose: The purpose of the article is to explore the insights of accounting practitioners a decade after introducing the IFRS for SMEs. Motivation for the study: The article increases the body of research into decision usefulness in relation to IFRS for SMEs, drawing attention to the possible benefits and challenges of the practical use of the IFRS for SMEs as an acceptable reporting framework. Research approach, design and method: The article uses prior literature on the application of IFRS for SMEs in South Africa to construct a structured questionnaire which was completed by 103 qualified accounting practitioners operating in South Africa. Main findings: Overall, the insights of accounting practitioners demonstrated reduced scepticism, as compared to previous research, concerning the extent to which the IFRS relieve the burden of financial reporting in the SME sector. Practical/managerial implications: The design of an accounting framework affects its use by accounting practitioners. Decisions usefulness theory demonstrates that standard setters should familiarise themselves with the challenges faced by accounting user groups to improve the relevance and reliability of financial statements. Contribution/value-add: This article will be useful to policymakers in debates regarding the appropriateness of IFRS for SMEs as a reporting framework and whether amendments are required. More specifically, whether amendments are required in relation to reducing the burden of financial reporting even further for smaller-scale SMEs.

Keywords

• financial reporting
• ifrs
• smes
• south africa