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Does Size Influence the Suitability of the IFRS for Small and Medium-Sized Entities? -- Empirical Evidence from Germany

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  • Brigitte Eierle
  • Axel Haller

Abstract

This study is set within the context of the IASB's initiative to develop an IFRS for small and medium-sized entities (SMEs). It is based on a questionnaire survey of small and medium-sized entities in Germany exploring the suitability of the IASB's proposed SME standard for entities of different size classes. Quantitative size criteria are used in many national jurisdictions to differentiate financial reporting requirements between entities. However, there is very little empirical evidence on the question whether the economic size of an entity has an impact on the economic issues that should be regulated by accounting rules and on management's preferences for specific accounting methods. This paper addresses these deficiencies by exploring to what extend an entity's economic size has an impact on its international exposure, the relevance of specific accounting issues and preparers’ perceptions on costs and benefits associated with the application of selected accounting methods. Our findings are ambiguous. Size effects are revealed with regard to the structure of entities, their international exposure and to a large extent to the relevance of particular accounting issues. Cost and benefit assessments of accounting methods also differ within and between the size clusters investigated, albeit a generalisation of size as a factor determining the cost-benefit considerations of firms with regard to particular accounting treatments and methods is not supported by the study's results.

Suggested Citation

  • Brigitte Eierle & Axel Haller, 2009. "Does Size Influence the Suitability of the IFRS for Small and Medium-Sized Entities? -- Empirical Evidence from Germany," Accounting in Europe, Taylor & Francis Journals, vol. 6(2), pages 195-230, December.
  • Handle: RePEc:taf:acceur:v:6:y:2009:i:2:p:195-230
    DOI: 10.1080/17449480903115779
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    Cited by:

    1. Vassili Joannides & Nicolas Berland & D. T. Wickramasinghe, 2010. "Post-Hofstede diversity/cultural studies: what contributions to accounting knowledge?," Post-Print hal-00676570, HAL.
    2. Vassili Joannides & Nicolas Berland & Danture Wickramasinghe, 2010. "Post-Hofstede diversity/cultural studies: what contributions to accounting knowledge?," Post-Print hal-01661685, HAL.
    3. Flauzeliton José Aparecido Gonçalves & André Aroldo Freitas De Moura & Fabio Yoshio Suguri Motoki, 2022. "What influences the implementation of IFRS for SMEs? The Brazilian case," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2947-2992, June.
    4. Hana Bohušová & Veronika Blašková, 2012. "In what ways are countries which have already adopted IFRS for SMEs different," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(2), pages 37-44.
    5. Vassili Joannides & Nicolas Berland & D. T. Wickramasinghe, 2010. "Post-Hofstede diversity/cultural studies: what contributions to accounting knowledge?," Grenoble Ecole de Management (Post-Print) hal-00676570, HAL.
    6. Fülbier, Rolf Uwe & Klein, Malte, 2013. "Financial accounting and reporting in Germany: A case study on German accounting tradition and experiences with the IFRS adoption," Bayreuth Working Papers on Finance, Accounting and Taxation (FAcT-Papers) 2013-01, University of Bayreuth, Chair of Finance and Banking.
    7. Vassili Joannides & Nicolas Berland & Danture Wickramasinghe, 2010. "Post-Hofstede diversity/cultural studies: what contributions to accounting knowledge?," Grenoble Ecole de Management (Post-Print) hal-01661685, HAL.
    8. Fazeena Fazneen Hussain & Priyashni Vandana Chand & Prena Rani, 2012. "The Impact Of Ifrs For Smes On The Accounting Profession: Evidence From Fiji," Accounting & Taxation, The Institute for Business and Finance Research, vol. 4(2), pages 107-118.
    9. Marcela Žárová, 2012. "Accounting and Reporting Regulation of Micro-entities [Regulace účetnictví a výkaznictví mikrosubjektů]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2012(3), pages 42-51.
    10. Robert Rieg, 2018. "Tasks, interaction and role perception of management accountants: evidence from Germany," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 29(2), pages 183-220, August.

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