Study on Integrated Accounting

Running head: INTEGRATED ACCOUNTING
Integrated accounting
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INTEGRATED ACCOUNTING
Research Topic: Development of IFRS for Small and Medium Sized Enterprises (SMEs)
Introduction
The primary purpose of the current research is to deliver insight into recent developments in
different issues of financial accounting and aims to concentrate on the overall influence of the
international financial reporting standards on small as well as medium sized enterprises
(SMEs). In essence, this current research provides a modern-day evaluation of the overall
successes and difficulties of adoption of IFRS by SMEs.
The International Accounting Standards Board has particularly followed a very strong
schedule in current years in order to a formulate a simplified set of International Financial
Reporting Standards for specifically non-publicly liable small as well as medium sized
enterprises (SMEs). Essentially, IFRS for particularly SMEs declared during the year 2009
was draw from the entire IFRS with considerably condensed recognition and measurement
rules. In the records of accounting regulation setting procedures of the IASB, directives of
IFRS for particularly SMEs was essentially the first ever set of directives that were designed
for small as well as medium sized business concerns. Basically, IFRS regulations for SMEs
has received great deal of attention and different accounting regulatory units counting IASB
are always monitoring the process of adoption and the execution of the regulation throughout
the world.
Particularly, small as well as medium enterprises play a crucial role in economic as well as
social development in both developed and developing nations. However, it can be observed
that the segment of small and medium sized business concerns can be considered as the
largest provider of employment in several nations, specifically from the perspective of
employment generation. Moreover, the contribution of diverse SMEs to specifically

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economic output, innovation, strategy and technological advancements is also widely
identified. However, the IASB presents the view that the adoption of IFRS for small as well
as medium sizes business concerns can certainly augment the accessibility of the SMEs to
international finance by means of utilization of harmonizes and at the same time superior
quality financial information. Thus, this switch over can be considered to be a major step
forward for SMEs in case if the perceived advantages are aptly identified by nations.
Background of the study
The notions of worldwide convergence of accounting standards dates back to the year 1950s
that is during the time when the economic assimilation as well as cross border trading started
to flourish post the second world war (Hellman et al., 2015).
Research Aims and Objectives
The primary aim of the current research is to undertake a detailed evaluation of the
conceptual as well as practical concerns associated to convergence of IFRS for different
SMEs and to recommend feasible ways to resolve the issues (Kajüter & Nienhaus, 2017).
The objectives of the research is
- To analytically evaluate IFRS for particularly SMEs counting the development as
well as implementation procedure of the directives and to present thorough insight
into the process of assumption of IFRS for particularly SMEs.
- To critically assess whether financial accountants are capable of distinguishing
between different principles of recognition as well as measurement of full IFRS and
that of the IFRS regulations for SMEs at the time of exercising judgements
(Valentinetti et al., 2016).

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INTEGRATED ACCOUNTING
- To critically analyse the overall influence of the reduced directions and regulations of
IFRS for particularly SMEs on the specialized judgement of accountants.
- To examine perceptions of users regarding effectiveness of financial assertions that
are prepared and presented in conformation with regulations of IFRS for particularly
SMEs.
Research Questions
The research questions that are framed for the current study are as mentioned below:
- What is the impact of IFRS for mainly SMEs taking into consideration the
development as well as implementation procedure of the directives?
- Can the financial accountants distinguish between different principles of recognition
and measurement of specifically full IFRS and from that of the IFRS regulations for
mainly SMEs at the time of carrying out judgements?
- What are the impacts of the reduced directions as well as directives of IFRS for
particularly SMEs on the specific judgement of accountants?
- What are the perceptions of different users regarding usefulness of financial assertions
that are prepared and presented in compliance with directives of IFRS for mainly
SMEs?
Links to the present literature
The current section elucidates in detail prior literature that helps in explaining development
of IFRS for small and medium sized enterprises, certain IFRS provisions for small as well as
medium sized enterprises. In addition to this, this segment also helps in understanding the
implementation of IFRS for SMEs in diverse nations, theoretical framework, and emerging
matters in the process of IFRS for diverse SMEs (Markelevich et al., 2015). The existing

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literature also illustrates in detail different jurisdictions of IFRS and gaining linkages to
existing literature explaining accounting regulatory structure for different small and medium
enterprises (SMEs) (Uyar & Güngörmüş, 2013).
Rossi & Hanni (2016) asserts that small as well as medium sized corporations in diverse
jurisdictions are recently gaining enormous attention and have also stepped into worldwide
accounting reporting field as an outcome of the opening of the International Financial
Reporting Standards (IFRS) for small as well as medium enterprises. In particular, this
current study analytically assesses IFRS for specifically SMEs, counting the development
along with execution procedure of the standards. In addition to this, this applies the structure
of decision usefulness theory as well as pecking order theory for evaluating concerns
pertaining to both development as well as execution of IFRS for small and medium sized
enterprises. In addition to this, this study also delivers substantiation that IFRS for
particularly SMEs have been a difficult proposition for non-publicly liable units to adopt. In
addition to this, there are also numerous conceptual as well as practical concerns with
regulations of IFRS for mainly SMEs (Kordecki & Bullen, 2014). Again, the evaluation and
deep insights provided by the current study will have severe insinuations for revising IFRS
for particularly SMEs and will help in addressing future complications in the process of
convergence (Kordecki & Bullen, 2014).
Accounting regulatory structure for SMEs
Graham et al., (2017) asserts that explicit accounting information directs the way towards
successful management of a particular business, regardless of the size of the firm.
Fundamentally, SMEs are let off from statutory audit necessities and are necessarily subject
to diverse simplified accounting principles (Rossi & Hanni, 2016). However, with the entire
set of IFRS implemented for diverse publicly accountable business entities, numerous

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arguments were raised by different small sized business entities regarding the intricacy of
application of the entire IFRS. Thus, the requirement for simplified set of accounting
regulations fitting for SMEs was widely appealed by several jurisdictions. Subsequently, the
IASB declared IFRS for particularly SMEs during the period 2009 with the intention that
they would be implemented by SMEs around the world (Liu & Lee, 2014).
It is identified that the directives of IFRS augment the overall comparability of pecuniary
information of diverse business units across the entire world. Again, publicly accountable
business entities that are traded in diverse public capital markets, SMEs normally do not have
the liability of the current superior quality comparable financial information for diverse users
(Uyar & Güngörmüş, 2013). Nevertheless, the IASB is primarily of the opinion that SMEs
can acquire advantage of accessing competitive loans from mainly transnational financial
lenders in case if the financial assertions between the nations were comparable. Essentially,
the main aim of introducing the directive is to deliver financial reporting relaxation and
lessen the managerial burden of business concerns that necessarily do not have public
liability, however, prepare and present general purpose financial statements for diverse
external users (Wagenhofer, 2016). Again, the IASB also believes that the straightforward
version can replicate the overall requirement of diverse users of small and medium business
concerns’ financial assertions and the cost benefit factors of SMEs. Abdullah et al., (2017)
mentions that the objective of IASB to introduce a novel accounting structure for small as
well as medium sized enterprises necessarily embraces the entire notion of user oriented
financial assertion. In particular, the attention on specific decision effectiveness in IFRS
mainly includes assessment of pecuniary information. Again, then attention on decision
effectiveness in IFRS for mainly SMEs can be considered to be paradigm shift from mainly
traditional focus of financial assertions of small and medium enterprises. Nassar et al., (2014)
asserts that the theory on decision usefulness presupposes that the primary aim of accounting