Big GAAP/Little GAAP: Will The Debate Ever End?

Wright, Gail B.; Fernandez, D. P.; Burns, Jeremy C.; Hawkins, Ryan; Hornsby, Christina; Patel, Sunny

doi:10.19030/jber.v10i5.6981

Cited by 2 publications

(8 citation statements)

References 3 publications

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“…On the other hand, there are much criticism in the world concerning its arrangement and several authors point out the difficulty of finding the comparability intended by the new standard (Herman, 2010;Neag et al, 2009;Pacter, 2009). Other authors criticize the adverse cost-benefit ratio of this standard (Neag et al, 2009;Wright et al, 2012;Litjens et al, 2012) and also the negative impact of the need for accounting education compatible with the new standard, something which requires qualification for accounting assessment at fair value (Herman, 2010;Bertoni & De Rosa, 2010;Wright et al, 2012;Lenormand, Poulard, & Touchais, 2012). Besides, there is criticism related to the strong culture of using statements with a view to mere fiscal record by SMEs (Lenormand et al, 2012).…”

Section: Ifrs For Small and Medium-sized Entitiesmentioning

confidence: 99%

“…However, it was also possible to observe, in the literature, some doubts about the need to establish an international accounting standard for SMEs, among them: (i) disproportionate implementation costs of a new standard (Neag, Masca, & Pascan, 2009;Wright et al, 2012;Litjens, Bissessur, Langendijk, & Vergoossen, 2012); (ii) technical capacity of SME accountants and the other stakeholders regarding the interpretation and opinion on standards based on concepts and principles (Herman, 2010;Bertoni & De Rosa, 2010;Wright et al, 2012;Lenormand, Poulard, & Touchais, 2012); (iii) need for comparability of financial statements (Herman, small and medium-sized entities (CPC-SMEs) in Brazil and the cost of credit granted by financial institutions?…”

Section: Introductionmentioning

confidence: 99%

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Adoção do Padrão Contábil Internacional nas Pequenas e Médias Empresas e seus Efeitos na Concessão de Crédito

Riva

Salotti

2015

Rev. contab. finanç.

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This research examines the relationship between the adoption of the international accounting standard by small and medium-sized entities in Brazil and the cost of credit granted by financial institutions. The literature about this subject discusses accounting regulation as a response to the existence of environments having information asymmetry and the Disclosure Theory studies the phenomenon of accounting disclosure, from the viewpoint of its causes and effects. The International Accounting Standards Board (IASB) suggests that an accounting standard with higher information quality tends to reduce the funding cost for small enterprises and, thus, this paper has as its main aim investigating whether the adoption of the international accounting standard has caused some effect on the cost of banking credit. The investigation was conducted through a theoretical and empirical approach, where the statistical analyses involved a sample of 179 enterprises subject to the Brazilian Technical PronouncementAccounting for Small and Medium-Sized Entities (CPC-SMEs), which underwent descriptive analysis, sample means testing, panel data analysis, and quantile regressions, with data from financial statements for three years (2009 to 2011). Evidence suggests a weak association between measures of the accounting information quality (disclosure and exposure of the adoption of the accounting standard based on the CPC) and the cost of banking credit for these enterprises. However, such evidence did not prove to be consistent over time and, furthermore, through regression analysis, the variables were not significant. So, it is possible to observe only a slight influence of accounting information in the sector under analysis, at least at this very first moment of changes in the accounting standards, on the cost of banking credit. Thus, this study contributes to examine the relationship between accounting information quality and the cost of banking credit among small and medium-sized entities.

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Section: Ifrs For Small and Medium-sized Entitiesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Adoção do Padrão Contábil Internacional nas Pequenas e Médias Empresas e seus Efeitos na Concessão de Crédito

Riva

Salotti

2015

Rev. contab. finanç.

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“…A company has public accountability if: its debt or equity instruments are traded in a public market, or it is in the process of issuing such instruments for trading in a public market, or it holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses (Fitzpatrick and Frank, 2009). According to the IASB"s definition, SMEs do not include non-profit or governmental entities (Wright et al, 2012).…”

Section: Framework Of Smesmentioning

confidence: 99%

“…Similarly, the Canadian Institute of Chartered Accountants' (CICA) undertook an examination of three alternative models: a single set of GAAP without exclusions, two sets of GAAP (Big GAAP and Little GAAP), and a single set of GAAP with exclusions from certain standards for SMEs (Wright et al, 2012). The CICA proposed and adopted the third model, by which SMEs are required to prepare financial statements based on standardized accounting rules so as to reduce SMEs" compliance burden (Wright et al, 2012). Wright, Fernandez et al (2012) explained different differential reporting models in different countries.…”

Section: An Overview Of Differential Reportingmentioning

confidence: 99%

“…In July 2009, the International Accounting Standard Board (IASB) issued International Financial Reporting Standards (IFRS) for SMEs, designed to simplify reporting requirements and achieve harmonization. IFRS for SMEs is a stand-alone set of accounting and reporting standards that contains simplified reporting and disclosure requirements, based on a cost-benefit analysis of the financial reporting needs of companies that are non-publicly accountable (Wright et al, 2012). Simplicity of IFRS for SMEs is argued on the omissions of topics not relevant for SMEs, such as earnings per share, interim financial reporting and segment reporting, easier options of accounting policy choices, such as no option to revalue property, equipment, or intangibles, simplicity of recognizing and measuring assets, liabilities, income and expenses, fewer disclosures required, clear and easily translatable language, and revisions are limited to once every three years (IASB, 2014).…”

Section: Introductionmentioning

confidence: 99%

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SMEs’ Financial and Differential Reporting- A Review of Publications

Mkasiwa

2014

ijafr

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The purpose of this paper was to evaluate publications about Small and Medium Enterprises" (SMEs) financial and differential reporting and formulate suggestions for its progression. Based on desk-based research, the paper employed a literature-based analysis and critique of 100 selected publications about financial and differential reporting for SMEs. The paper only considered selected studies over the period 1985 to 2014. All financial and differential reporting literature of SMEs that was publicly available was incorporated (see also, Eierle and Schönefeldt, 2010). This method was employed because of the scattered nature of articles on financial and differential reporting for SMEs. From this, a descriptive analysis of the characteristics of the literature was discussed. Thereafter, a conceptual analysis of the reviewed publications was conducted to provide the basis for suggestions for possible future directions of this body of research. The descriptive analysis highlighted that among the research studies reviewed several interesting patterns emerged concerning SMEs" financial and differential reporting research. Contrary to what had been argued in previous reviews, studies of developing countries had started to increase in this body of research since 2009. When the focus of the literature was considered, the "scrutinization of differential reporting" was the area of most focused interest especially after the release of IFRS for SMEs. The main implications of this paper are that, the focus of published literature had been in line with IASB"s project of the development of IFRS for SMEs. This paper provides several important insights in order to highlight policy development, especially to the steering bodies such as IASB. Moreover, the paper identifies possible areas for further research.

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Big GAAP/Little GAAP: Will The Debate Ever End?

Abstract: ABSTRACT

Cited by 2 publications

References 3 publications

Adoção do Padrão Contábil Internacional nas Pequenas e Médias Empresas e seus Efeitos na Concessão de Crédito

Adoção do Padrão Contábil Internacional nas Pequenas e Médias Empresas e seus Efeitos na Concessão de Crédito

SMEs’ Financial and Differential Reporting- A Review of Publications

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