Explaining Accounting Policy Choices of SME’s: An Empirical Research on the Evaluation Methods

Abstract

Analyzing accounting issues relative to small and medium sized entities (SMEs) we found the influence of taxation as the main leitmotif in the Romanian literature. However, weak empirical evidence is provided to sustain this argument. In this paper we investigate the accounting policy choices of SMEs, particularly those related to the evaluation methods. Our purpose is to find some "pattern" in these decisions and to identify the main factors that trigger them. Data for the study was collected through a survey in which respondents were requested to indicate the degree to which each of the factors listed in the questionnaire influenced their choice of accounting methods. After controlling for size, we applied the principal component analysis technique in ascertaining the impact of factors. Our results though consistent with the reviewed literature, are still surprising. This is in the sense that while taxation seems to remain the strongest influence factor, the weakest happens to be the true and fair view (TFV) consideration. In finding some possible explanations to this, we leave this question open: is it possible that the overwhelming academic concept of TFV is an empty vessel for practitioners?

On the tax-accounting linkage in the European emerging context

“…As for the CEE area, studies such as Ristea (1995), Feleagă (1999) or Paliu-Popa and Ecobici ( 2007) bring arguments concerning the distortion of accounting information as a result of a strong influence of taxation over accounting in Romania. Bosnyak (2003) quoted by Fekete et al (2010) shares the same idea while analyzing the case of SMEs in Hungary.…”

“…Albu et al (2013) synthesize the perception of some representatives of CECCAR, who show that Romanian financial statements render a fiscal image, and that professional accountants work for the interest of the public authority, even if they are paid by the companies. Investigating the fiscal influence over Romanian accounting, Fekete et al (2010) find that taxation was the most powerful influential factor which determines the variation in the choices made by professionals in what concerns accounting decisions.…”

"The Relationship Between Accounting And Taxation Insight The European Union: The Influence Of The International Accounting Regulation "

“…Since the integration approach in the European Union, the national regulations were oriented over the implementation of European Directives, similar case with other countries from CEE (Borbely and Evans, 2006;Strouhal, 2007;Fekete et al, 2008;Deaconu and Cuzdriorean, 2011); the harmonization process, leading to the implementation of IFRS, after the adheration of Romania to the EU. As for any of the above mentioned Member States, the implementation process was not an easy one, the Romanian's case din not distinguish (Ionaşcu et al, 2007;Deaconu and Cuzdriorean, 2011).…”

A influência da fiscalidade sobre a contabilidade a partir do julgamento dos contabilistas certificados portugueses

“…O referido instrumento de coleta foi aplicado aos CC, considerados os principais intervenientes no processo de preparação das demonstrações financeiras, tal como os estudos sobre a definição de políticas contabilísticas e, mais especificamente, na análise da relação entre a contabilidade e a fiscalidade conduzidos, designadamente, por Foo (2008), Fekete et al (2010) e Figueiredo (2016)1. A população-alvo deste estudo corresponde, mais especificamente, aos CC com inscrição ativa na Ordem dos Contabilistas Certificados (OCC). Segundo o último relatório (intercalar) emitido pela OCC, relativo ao primeiro semestre de 2019, existe a indicação de um número inferior a 70.000 membros (OCC, 2019).…”