Understanding the Implications: Accounting Reports and Disclosure Practices

• In Event: Banks, Loans, and Goodwill

Abstract

Small and Medium Enterprises (SMEs) are the cornerstone of today’s economy. They are the engine of employment generation, in particular in the regional and rural areas. Therefore, survival and growth of SMEs in regional and rural areas is paramount in sustainability of regional economies. The need for strong financial information is essential in any business, as it is surely the key to success. Small enterprises, however, often find that the time and money required to create financial reports can be a rather large inconvenience (Keasey & Short, 1990 as cited by Sian & Roberts, 2009, p. 289). Despite the importance of small businesses and accounting information, little research focus has been dedicated towards the use of financial reports of rural SMEs. The influence of accounting reports in decision making and the importance of small and medium sized enterprises within the economy are the driving forces behind the need for a better understanding of how the two concepts relate to one another. This study examines the varying factors influence the decision on whether to use or not use accounting reports within a small or medium sized enterprise by using data collected through a sample survey in Alberta, Canada. It also investigates how accounting reports can enhance the management control systems.

Author

• Kalinga Jagoda, University of Guelph