A critical analysis of the contents of the IFRS for SMEs - a South African perspective

Schutte, Danie; Buys, Pieter

doi:10.4102/sajems.v14i2.61

Cited by 15 publications

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“…Their understanding appeared to be based on their individual dealings with SMEs. This is in line with existing literature, which indicates that a variety of definitions may be ascribed to the term 'SME' (DTI 2008b;IASB 2015a;Schutte & Buys 2011b;South Africa 1996;Tudor & Mutiu 2008).…”

Section: Undervaluing Of the International Financial Reporting Standards For Small And Medium-sized Entities By South African Practitionesupporting

confidence: 89%

“…None of the interviewees suggested that a specific topic in IFRS for SMEs was either misplaced or irrelevant in respect of serving the needs of the SME sector, further emphasising the appropriateness of the standard for SMEs. Prior studies have also shown that the content of IFRS for SMEs is suitable for the South African environment (Schutte & Buys 2011a, 2011b.…”

Section: Contents Of the International Financial Reporting Standards For Small And Medium-sized Entitiesmentioning

confidence: 97%

“…This provided the platform to shape the way in which SMEs report on financial information (Mackenzie 2009). However, as cited by Schutte and Buys (2011b), two months after the adoption of IFRS for SMEs, the South African Institute of Chartered Accountants (SAICA) reported to the IASB that further simplification of the standard was needed, given the level of knowledge of both those drafting financial statements and the needs of users.…”

Section: The Adoption Of the International Financial Reporting Standards For Small And Medium-sized Entities In South Africamentioning

confidence: 99%

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The perceptions of South African accounting practitioners on the post-implementation of IFRS for SMEs in an institutionalised environment

Mohamed

Yasseen

Omarjee

2019

Journal of Economic and Financial Sciences

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Small and medium-sized entities (SMEs) play a crucial role in the South African economy. The financial reporting framework applicable to SMEs may contribute to the success of the SME. This study was exploratory in nature and followed an interpretive approach to seek an in-depth understanding of the application of the International Financial Reporting Standards for Small and Medium-Sized Entities (IFRS for SMEs) in South Africa.Research purpose: This article explores the perceptions of South African accounting practitioners regarding the post-implementation of the IFRS for SMEs in the South African SME sector.Motivation for the study: South African research on IFRS for SMEs is scarce. This study was designed to contribute to the scarce body of literature on IFRS for SMEs and will benefit both the South African and international accounting profession.Research approach/design and method: In-depth semi-structured interviews with 21 accounting practitioners were carried out during 2017 and 2018. An interpretive approach was adopted to analyse the data into themes providing the insight into the perceptions of South African practitioners. Main findings:Overall, there appears to be an approval of IFRS for SMEs. The uniformity associated with IFRS for SMEs is one of the significant advantages, while factors such as the age of the practitioners, the use of automated software systems and South African legislative requirements affect the relative merit of using the standard.Practical/managerial implications: The use of the interpretive style will assist professional accounting organisations, standard setters and regulators in understanding the various benefits and drawbacks of the IFRS for SME framework. Contribution/value-add:This article is the first to explore the in-depth views of accounting practitioners after IFRS for SMEs was adopted in South Africa. The article also highlights the challenges faced by accounting practitioners in developing economies that service SMEs.

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Section: Undervaluing Of the International Financial Reporting Standards For Small And Medium-sized Entities By South African Practitionesupporting

confidence: 89%

Section: Contents Of the International Financial Reporting Standards For Small And Medium-sized Entitiesmentioning

confidence: 97%

Section: The Adoption Of the International Financial Reporting Standards For Small And Medium-sized Entities In South Africamentioning

confidence: 99%

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The perceptions of South African accounting practitioners on the post-implementation of IFRS for SMEs in an institutionalised environment

Mohamed

Yasseen

Omarjee

2019

Journal of Economic and Financial Sciences

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“…Moreover, literature reported that capital market investors, in particular, required a more transparent and high-quality financial report that would make the comparability of financial statement possible (Amiram, 2012;Matthew, 2009;Schutte & Buys, 2011;Shima & Yang, 2012).…”

Section: Background To the Studymentioning

confidence: 99%

The effect of the adoption of International Financial Reporting Standards on foreign portfolio investment in Africa

Omotoso

Schutte

Oberholzer

2021

South African Journal of Accounting Research

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1994 to 2015 on total foreign portfolio investments in liabilities (equity and debt) were collected.Panel data regression analysis incorporating pooled regression, fixed-effects, and random-effects models was estimated. Also, the generalised method of moment estimator was employed to address the problem of endogeneity, usually associated with panel data analysis and as a robustness check for the model. The logit regression model was used to examine the determinant factors of IFRS adoption.Various statistical tests were estimated, such as the diagnostic test, using the histogram and Jarque-Bera statistics, difference-in-difference (DID) test, the unit root test, and the cross-sectional dependence test. The Hausman's chi-square was estimated to determine the best alternative technique between the fixed-effects and random-effects models. Also the Arellano-Bond estimator autocorrelation 〈1〉 and 〈2〉 was used to evaluate the validity of the variable instruments in the model. Besides, the average marginal effect (AME) was estimated for the effect of each covariate on the result. Certain covariates were estimated as control variables in the model.The statistical results show a significant and positive effect of the adoption of IFRS on FPI inflows after the adoption and implementation of IFRS in adopting countries. Equally, the finding further indicates a significant difference in the volume of FPI inflows after the adoption of IFRS than before the adoption, in adopting countries. The statistical estimates also reveal a positive and significant effect of IFRS adoption on FPI in adopting countries, compare with non-adopting IFRS countries where it shows a negative and non-significant relationship. It shows that countries that adopted IFRS experience more inflows in FPI compare with the non-adopting countries in Africa.Furthermore, the logit regression results show that culture, the legal system, political system, investor protection, market capitalisation, and tax were found to be positively significant with the probability of adopting IFRS in the logistic model. This thesis, therefore, suggests that the adoption of IFRS is justified in the selected countries in Africa since the results indicated a positive and significant effect of IFRS adoption on FPI in these countries. Hence, substantiated the assumption of IFRS proponents that adoption will enhance the flow of FPI in adopting countries for economic development. Policies measure to monitor the activities of listed firms and to enforce compliance with IFRS rules and regulations are warranted.These policies would further enable IFRS adopting countries to enhance more flow of FPI.

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“…The debate around the new standard involves several factors, including: the comments on the IASB's Discussion Paper (Evans et al, 2005) and the Exposure Draft ‗IFRS for Small and Medium-Sized Entities' (Di Pietra et al, 2008); the different perspectives of acceptance among users, preparers and European Countries (Quagli & Paoloni, 2012); and the factors influencing countries' adoption of the IFRS for SMEs (Kaya & Koch, 2015). A number of contributions have referred to country-specific perspectives, such as those of the Czech Republic (Albu et al, 2013;Nerudova & Bohusova, 2008;Pàlka & Svitàkovà, 2011), Estonia (Alver et al, 2014), Germany (Eierle & Haller, 2009;Kreipl et al, 2014), Ghana (Aboagye-Otchere & Agbeibor, 2012), Greece (Mandilas et al, 2010) Italy (Baldarelli et al, 2007;Cisi, 2008), the Netherlands (Litjens et al, 2012), Romania (Albu et al, 2010;Gîrbină et al, 2012), South Africa (Schutte & Buys, 2011;Stainbank, 2008;van Wyk & Rossouw, 2009), Spain (Milanés Montero et al, 2011), Turkey (Arsoy et al, 2007;Atik, 2010;Kiliç et al, 2016;Turegun & Kaya, 2014), the United Arab Emirates (Kumar, 2014) and the USA (Jermakowicz & Epstein, 2010). Nevertheless, despite some prior studies having analysed similarities and differences between the IFRS for SMEs and certain accounting settings -namely, the EU Accounting Directives (EFRAG, 2010), local GAAP (Albu et al, 2010;Buculescu & Velicescu, 2014;Cisi, 2008;EFAA, 2010;Girbina et al, 2012), and full IFRS as well …”

Section: Introductionmentioning

confidence: 99%

Differences between National Reporting Practices and IFRS for SMEs Presentation and Disclosure Requirements: Evidence from Italy

Valentinetti

Rea

Basile

2016

ijafr

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The aim of this paper is to assess the differences between the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) requirements and national financial reporting practices. For this purpose, the IASB's checklist was applied to a sample of financial statements prepared in Italy by non-listed manufacturing companies. The results reveal the major differences existing in the presentation of financial statements, as well as in narrative disclosure practices in management commentary and notes. Furthermore, econometric analysis suggests that the differences are influenced by certain exploratory ISSN 2162-3082 2016 factors, namely, profitability, leverage, size and parent company relationship. This study offers new insights into the roles of certain exploratory factors that are likely to influence the movement towards the application of the IFRS for SMEs. International Journal of Accounting and Financial Reporting

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A critical analysis of the contents of the IFRS for SMEs - a South African perspective

Cited by 15 publications

References 15 publications

The perceptions of South African accounting practitioners on the post-implementation of IFRS for SMEs in an institutionalised environment

The perceptions of South African accounting practitioners on the post-implementation of IFRS for SMEs in an institutionalised environment

The effect of the adoption of International Financial Reporting Standards on foreign portfolio investment in Africa

Differences between National Reporting Practices and IFRS for SMEs Presentation and Disclosure Requirements: Evidence from Italy

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