UK small owner-managed businesses

accounting and financial reporting needs

Suki Sian, Clare Roberts

Research output: Contribution to journalArticle

35 Citations (Scopus)

Abstract

Purpose – In recent years there has been a growing interest in the provision of financial information by small business entities. In the UK, regulation has taken the form of the Financial Reporting Standard for Small Enterprises (FRSSE) and internationally UNCTAD has issued its own reporting guidelines for small enterprises ahead of the International Accounting Standards Board's (IASB's) standard on the subject. Despite this international interest, academic research investigating the accounting and financial reporting needs of small enterprises remains relatively scarce. This UK-based study aims to assess the potential demand for and usefulness of reporting guidelines specifically designed for small owner-managed enterprises (SoMEs).

Design/methodology/approach – Using postal questionnaires, data were gathered from accountants providing services to SoMEs and the owners of such enterprises.

Findings – It was found that most SoMEs produce accounting records, often based on computerised packages. However, financial awareness varies significantly and there is evidence that most small enterprise owners rely on their accountants to prepare their financial statements and are often left bewildered by the complexity of the information provided. With UK and the future IASB standards being designed to meet the needs of the largest small and medium-sized enterprises (SMEs), there does appear to be a relatively high level of agreement that specific guidance for much smaller entities would be desirable. However, many of the accountants felt that some aspects of existing regulations, such as the UNCTAD level 3 guidelines, were too complex, indicating that regulators need to carefully consider the contents of regulations for the smallest entities.

Origniality/value – The findings of this study have implications for regulators who are now considering the possibility of developing guidance for the smallest business entities.
Original languageEnglish
Pages (from-to)289-305
Number of pages17
JournalJournal of Small Business and Enterprise Development
Volume16
Issue number2
DOIs
Publication statusPublished - 2009

Fingerprint

Financial reporting
Owners
Small enterprises
Accountants
Small business
Guidance
International Accounting Standards Board
Questionnaire
Financial information
Design methodology
Usefulness
Academic research
Small and medium-sized enterprises
Financial statements

Cite this

UK small owner-managed businesses : accounting and financial reporting needs. / Sian, Suki; Roberts, Clare.

In: Journal of Small Business and Enterprise Development, Vol. 16, No. 2, 2009, p. 289-305.

Research output: Contribution to journalArticle

@article{0d3568ad6d6040a6af43960e690627e5,
title = "UK small owner-managed businesses: accounting and financial reporting needs",
abstract = "Purpose – In recent years there has been a growing interest in the provision of financial information by small business entities. In the UK, regulation has taken the form of the Financial Reporting Standard for Small Enterprises (FRSSE) and internationally UNCTAD has issued its own reporting guidelines for small enterprises ahead of the International Accounting Standards Board's (IASB's) standard on the subject. Despite this international interest, academic research investigating the accounting and financial reporting needs of small enterprises remains relatively scarce. This UK-based study aims to assess the potential demand for and usefulness of reporting guidelines specifically designed for small owner-managed enterprises (SoMEs). Design/methodology/approach – Using postal questionnaires, data were gathered from accountants providing services to SoMEs and the owners of such enterprises. Findings – It was found that most SoMEs produce accounting records, often based on computerised packages. However, financial awareness varies significantly and there is evidence that most small enterprise owners rely on their accountants to prepare their financial statements and are often left bewildered by the complexity of the information provided. With UK and the future IASB standards being designed to meet the needs of the largest small and medium-sized enterprises (SMEs), there does appear to be a relatively high level of agreement that specific guidance for much smaller entities would be desirable. However, many of the accountants felt that some aspects of existing regulations, such as the UNCTAD level 3 guidelines, were too complex, indicating that regulators need to carefully consider the contents of regulations for the smallest entities. Origniality/value – The findings of this study have implications for regulators who are now considering the possibility of developing guidance for the smallest business entities.",
author = "Suki Sian and Clare Roberts",
year = "2009",
doi = "10.1108/14626000910956065",
language = "English",
volume = "16",
pages = "289--305",
journal = "Journal of Small Business and Enterprise Development",
issn = "1462-6004",
publisher = "Emerald Group Publishing Ltd.",
number = "2",

}

TY - JOUR

T1 - UK small owner-managed businesses

T2 - accounting and financial reporting needs

AU - Sian, Suki

AU - Roberts, Clare

PY - 2009

Y1 - 2009

N2 - Purpose – In recent years there has been a growing interest in the provision of financial information by small business entities. In the UK, regulation has taken the form of the Financial Reporting Standard for Small Enterprises (FRSSE) and internationally UNCTAD has issued its own reporting guidelines for small enterprises ahead of the International Accounting Standards Board's (IASB's) standard on the subject. Despite this international interest, academic research investigating the accounting and financial reporting needs of small enterprises remains relatively scarce. This UK-based study aims to assess the potential demand for and usefulness of reporting guidelines specifically designed for small owner-managed enterprises (SoMEs). Design/methodology/approach – Using postal questionnaires, data were gathered from accountants providing services to SoMEs and the owners of such enterprises. Findings – It was found that most SoMEs produce accounting records, often based on computerised packages. However, financial awareness varies significantly and there is evidence that most small enterprise owners rely on their accountants to prepare their financial statements and are often left bewildered by the complexity of the information provided. With UK and the future IASB standards being designed to meet the needs of the largest small and medium-sized enterprises (SMEs), there does appear to be a relatively high level of agreement that specific guidance for much smaller entities would be desirable. However, many of the accountants felt that some aspects of existing regulations, such as the UNCTAD level 3 guidelines, were too complex, indicating that regulators need to carefully consider the contents of regulations for the smallest entities. Origniality/value – The findings of this study have implications for regulators who are now considering the possibility of developing guidance for the smallest business entities.

AB - Purpose – In recent years there has been a growing interest in the provision of financial information by small business entities. In the UK, regulation has taken the form of the Financial Reporting Standard for Small Enterprises (FRSSE) and internationally UNCTAD has issued its own reporting guidelines for small enterprises ahead of the International Accounting Standards Board's (IASB's) standard on the subject. Despite this international interest, academic research investigating the accounting and financial reporting needs of small enterprises remains relatively scarce. This UK-based study aims to assess the potential demand for and usefulness of reporting guidelines specifically designed for small owner-managed enterprises (SoMEs). Design/methodology/approach – Using postal questionnaires, data were gathered from accountants providing services to SoMEs and the owners of such enterprises. Findings – It was found that most SoMEs produce accounting records, often based on computerised packages. However, financial awareness varies significantly and there is evidence that most small enterprise owners rely on their accountants to prepare their financial statements and are often left bewildered by the complexity of the information provided. With UK and the future IASB standards being designed to meet the needs of the largest small and medium-sized enterprises (SMEs), there does appear to be a relatively high level of agreement that specific guidance for much smaller entities would be desirable. However, many of the accountants felt that some aspects of existing regulations, such as the UNCTAD level 3 guidelines, were too complex, indicating that regulators need to carefully consider the contents of regulations for the smallest entities. Origniality/value – The findings of this study have implications for regulators who are now considering the possibility of developing guidance for the smallest business entities.

U2 - 10.1108/14626000910956065

DO - 10.1108/14626000910956065

M3 - Article

VL - 16

SP - 289

EP - 305

JO - Journal of Small Business and Enterprise Development

JF - Journal of Small Business and Enterprise Development

SN - 1462-6004

IS - 2

ER -