Academics examine future trends and challenges in SMEs’ and private businesses' reporting regime
Private firms and small and medium enterprises (SMEs) and their accounting firms face four key challenges according to a report by the British Accounting and Finance Association Financial Accounting and Reporting Special Interest Group (FARSIG).
The 2024 FARSIG symposium the Future of Finance Reporting–- held virtually with the support of ACCA – identified major issues for SMEs as:
Speakers’ presentations and the panel discussions highlighted the burdens that increasing regulations on financial and non-financial reporting impose on accounting firms as well as SMEs and private businesses in the UK. The symposium worked to make suggestions for regulators on how to reduce the severity of these burdens.
While the emerging trend in private business to move to cloud accounting offers numerous benefits to SMEs, the symposium also discussed the increasing concerns about data ownership and how these tools expose smaller enterprises to cybersecurity risks.
The symposium examined the ESG challenges that SMEs and private corporations face, with the increasing importance that ‘thinking and acting sustainably’ has for businesses.
All of these pressures highlight the existence of important gaps between accounting education and the skills that are needed in the accountancy profession. The symposium offered views on how these gaps could be closed.
As well as a panel discussion and question and answer session, FARSIG also heard from
Christof Beuselinck, professor of accounting and head of the accounting group at France’s Institute of Scientific Economics and Management (IESEG) School of Management. Presenting an overview of the reporting on private firms through a review of mainly European academic literature of the past 35 years, he concluded that corporate reporting landscape and disclosures are shaped by determinants grounded in agency theory, debt-contracting theory and information asymmetry (or ‘information failure’).
At the heart of all these debates is financial and non-financial reporting which remains a priority for FARSIG. Silvia Gaia, professor of Accounting, University of Essex, said: ‘By debating the future trends and challenges in SMEs’ and private businesses' corporate reporting, the symposium aimed to attract the attention of regulators and practitioners on these issues. In doing so, it also provides valuable contributions to the current project undertaken by the IASB aimed at reviewing IFRS for SMEs by supporting the need for more simplification and reduced disclosure requirements.’ A new edition of IFRS for SMEs issued by IFAC is expected in the second half of 2024.
Sharon Machado, Head of Sustainable Business, Policy and Insights, ACCA, said: ‘The symposium’s discussion and ACCA’s research insights paint a complex picture for organisations to reflect upon in their investing, finance and operations decision-making. The picture includes a melee of geopolitics, monetary challenges, and technological, societal and environmental matters, all of which test the accountant’s capability for producing the good-quality information that is the necessary underpinning of equally good decisions.’
The 2024 FARSIG symposium the Future of Finance Reporting – held virtually with the support of ACCA – debated the trends and challenges of private companies’ and SMEs’ reporting.
See here for more on FARSIG and to read the symposium’s Future of Finance Reporting
For media enquiries, contact:
ACCA News Room
E: newsroom@accaglobal.com
Twitter/X: @ACCANews
accaglobal.com
About ACCA
We are ACCA (the Association of Chartered Certified Accountants), a globally recognised professional accountancy body providing qualifications and advancing standards in accountancy worldwide.
Founded in 1904 to widen access to the accountancy profession, we’ve long championed inclusion and today proudly support a diverse community of over 247,000 members and 526,000 future members in 181 countries.
Our forward-looking qualifications, continuous learning and insights are respected and valued by employers in every sector. They equip individuals with the business and finance expertise and ethical judgment to create, protect, and report the sustainable value delivered by organisations and economies.
Guided by our purpose and values, our vision is to develop the accountancy profession the world needs. Partnering with policymakers, standard setters, the donor community, educators and other accountancy bodies, we’re strengthening and building a profession that drives a sustainable future for all.
Find out more at: www.accaglobal.com