Preparers’ Perceptions on Consequences of Introducing IFRS for SMEs—Evidence from German Small and Medium Sized Entities

• In Event: Accounting in SMEs

Abstract

In July 2009 the International Accounting Standards Board published its financial reporting standard for Small and Medium Sized Entities, IFRS for SMEs. Since then debates have taken place whether this accounting standard is suitable for an introduction throughout Europe. We add to the debate by presenting the results of an online survey between German Small and Medium Sized Entities. In the study we focus on finding out whether the IFRS for SMEs is suitable for SMEs, whether it makes international comparability possible and finally, which impact is to be expected from controversial disclosures in the notes. Finally, we ask for an overall judgment of all issues mentioned in the survey. Drawing on the partially least square method, we then provide a causal analysis which clarifies how the different answers account for the overall judgment about IFRS for SMEs as exposed in the questionnaire and relate them to cultural and environmental features of Germany. Our results provide evidence that from the viewpoint of the majority of the SMEs the standard is suggested to be neither suitable nor comparable. Furthermore, most of the controversial disclosures of the notes are intensively rejected.

Authors

• Markus Grottke, University of Passau

• Thomas Späth, University of Passau

• Felix Haendel, Ernst & Young Munich