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Small GAAP: A Large Jump for the IASB

10th Annual Conference for Financial Reporting and Business Communication, Cardiff, July 2006

32 Pages Posted: 31 Jul 2008 Last revised: 15 Aug 2008

Carolyn J. Cordery

Aston University; Victoria University of Wellington - School of Accounting and Commercial Law

Rachel F. Baskerville

Victoria University of Wellington - School of Accounting and Commercial Law

Date Written: July 6, 2006

Abstract

In the last fifteen years, many national standard setters have introduced differential reporting for small and medium enterprises (SMEs). Internationally, SMEs are a diverse and dynamic group which are described under broad characteristics in different countries. Acceptance and imposition of International Accounting Standards (IASs) has reignited the debate on differential reporting, especially since the International Accounting Standards Board (IASB) issued a discussion document in June 2004 on SME reporting. The prevalence of an unsubstantiated view that SMEs are 'small entities on the way to becoming large entities' overshadows the argument on whether and how SMEs should be offered relief from highly technical IAS. Unique SME factors, including close-knit agency relationships, and a tendency to aim for survival and stability over profit maximisation and growth suggest a distinctly different focus to the IASB conceptual framework is required. It is the objective of this paper to provide a review of the diversity in jurisdictional approaches to resolve conceptual and standard-setting issues. This research has been motivated by the absence in academic literature of sufficient studies examining the underlying issues fundamental to redefining the balance between the accountability and decision-usefulness functions of general purpose financial reporting. To achieve this objective, this paper considers relevant academic and practitioner literature before undertaking an analysis of the issues this literature raises.

Keywords: Small GAAP, SMEs, IASB, FRSSE

JEL Classification: K22, M41

Suggested Citation

Cordery, Carolyn J. and Baskerville, Rachel F., Small GAAP: A Large Jump for the IASB (July 6, 2006). 10th Annual Conference for Financial Reporting and Business Communication, Cardiff, July 2006. Available at SSRN: https://ssrn.com/abstract=1179082 or http://dx.doi.org/10.2139/ssrn.1179082

Carolyn J. Cordery

Aston University ( email )

Aston Business School
Aston Triangle
Birmingham, B4 7ET
United Kingdom

Victoria University of Wellington - School of Accounting and Commercial Law ( email )

Faculty of Commerce and Administration
PO Box 600
Wellington
New Zealand

Rachel F. Baskerville (Contact Author)

Victoria University of Wellington - School of Accounting and Commercial Law ( email )

Faculty of Commerce and Administration
PO Box 600
Wellington
New Zealand
006444636951 (Phone)
006444635076 (Fax)

HOME PAGE: http://www.victoria.ac.nz/sacl/staff/rachel-baskerville.aspx

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