Proposals to introduce a separate set of accounting rules for small businesses will be of little practical use to entrepreneurs, the Association of Chartered Certified Accountants (ACCA) has warned.
The International Accounting Standards Board (IASB) has unveiled a consultancy document on plans to introduce accountancy regulations specifically for small firms.
ACCA said that while it welcomed the discussion on accounting rules for small firms, it was concerned that the proposals will be of little use to businesses and won’t help them develop.
The accountancy body claimed that the standards will not be relevant to many companies because they will be adaptations of international standards which apply to multi-national listed firms with different needs and resources.
Professor Robin Jarvis, head of ACCA’s small business unit, said that while he welcomed the discussion paper, he was concerned that the end document will be of little use to the intended audience.
“Part of the concern is focussed on the fact that IFRS is written for listed companies which account for less than one per cent of all enterprises.
“Rather than try to adapt these, in an ideal world, we would prefer to see a ‘bottom up’ approach where standards were written with small firms very much in mind.
“ACCA also wants to see a clear definition of the term SME within the discussion paper. When IASB refers to SMEs, is it referring to unlisted companies – which could be huge concerns – or is it really addressing the needs of small companies, which make up more than 99 per cent of all enterprises,” he said.
