Small company reporting and the relevance gap
Article Abstract:
Accounting standards, traditionally focused on large companies, fail to recognize the reporting requirements of small companies. Standards such as SSAP 13, SSAP 25, SSAP 16, FRS 1, SSAP 3 and FRS 3have incohesively and inconsistently addressed the disclosure needs of small private businesses. As a result, accountants find difficulty in applying standards to clients with turnover of not more than 2.8 million pounds sterling. Furthermore, small firms are being compelled to disclose even irrelevant and useless information to shareholders. In contrast to other agencies that released the hardly applicable standards, the Dept of Trade and Industry (DTI) has actively provided concessions for small size businesses in the 1981 Companies Act and the 1989 Companies Act although the 1985 Companies Act could use further revisions. The Accounting Standards Board and the Accounting Practices Boards should cooperate closely with DTI to address the needs of small companies.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1993
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SAS 130 and the smaller company
Article Abstract:
Several initiatives aimed at reducing the reporting requirements imposed on small companies have been launched since 1993. For one, the UK government has given small companies an exemption from several disclosure provisions contained in the Companies Act. The UK government has also reduced the number of audit requirements faced by small companies. However, this relief from audit regulation is still not far-reaching enough because many smaller companies are still required to have a yearly audit. Unfortunately, these smaller companies not eligible for the small audit exemption are also expected to face the tighter regulatory regime being imposed on bigger firms The effect of this new regime shall be felt in full in late 1995 when the Auditing Practices Board releases over 20 new statements that must be applied on all UK company audits.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1995
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Small company audits have got to go
Article Abstract:
The imposition of the small company audit has long been opposed by the many family-run enterprises that form the bulk of the small business sector. These businesses rightfully contend that the small company audit serves little purpose as its only discernable function is to assure shareholders that management has not been remiss in its stewardship of a company's assets. Since small business owners are often the managers of their own companies, the small company audit is seen by many to be a redundant mechanism that serves little purpose other than to increase business costs. The stringent requirements of the new audit regime will only serve to complicate matters for many small businesses as it is likely to increase the audit costs borne by hard-pressed small business owners.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1992
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