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ACCA and the IAAER (International Association for Accounting Education & Research) held a roundtable on 12 January in Brussels to discuss the issue of business reporting for small and medium-sized enterprises (SMEs).

The event was part of an international research-driven forum seeking to debate this key issue and was attended by standard setters, technical experts, EU policy makers, senior academics, as well as representatives of businesses and of the financial services institutions.

The aim of the event was two fold:

    * to develop an understanding of the value and impact of reporting by private entities
    * to contribute to the international research agenda in identifying a number of suitable questions about access to finance. A roundtable in New York has been held already and a further roundtable will be held in South Africa. The outcomes of the three roundtables will enable ACCA – in collaboration with IAAER – to commission an internationally-focused research study.

Discussions – lead by Professor Robin Jarvis, ACCA’s head of small business affairs who chaired the meeting and Richard Martin, ACCA’s head of financial reporting – revolved around:

    * the perception of participants relating to the quality of financial reporting in Europe, the link between financial reporting and financial management
    * the various information needs of user groups and the benefits (or otherwise) of IFRS for SMEs over national accounting requirements
    * the question of the Commission’s controversial proposal to exempt micro-entities from accounting requirements was also raised.

Paul Pacter, director of standards for SMEs at IASB, highlighted that ‘the new proposal consists of a SME specifically designed and internationally recognised simplified IFRS’.

Pacter also gave a detailed overview of the nature and scope of the IFRS for SMEs as well as the benefits it can bring to beneficiaries, including improved access to capital and an improved quality of reporting as compared to existing national GAAP.

Prof. Dr. Brigitte Eierle, chair of international accounting and auditing at the Bamberg University (Germany) provided the audience with the state of play of empirical research in the field of SME financial reporting, showing that there is a significant gap in the literature on the topic compared to capital markets and that the vast majority of studies focus on the SME managers rather than on users, with users’ studies being mainly restricted to banks.

She stressed that ‘further research is required on micro-entities and on external users’ information needs’, and called for ‘the improvement of the comparability of data, partly due to the lack of uniform definitions for SMEs amongst countries’, which was echoed by many participants.

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