Plenary Lecture
Quo Vadis Financial Reporting Harmonization for SMEs (Perceptions of Czech Accounting Professionals)
Dr. Jirí Strouhal
Department of Business Economics
University of Economics Prague
Czech Republic
E-mail: strouhal@vse.cz
Abstract: SMEs play an important role in the global economy and their accounting issues are recently under debate, especially after the issuance of the IFRS for SMEs by the IASB in 2009. The comparative analysis between the national regulations and the IFRS for SMEs provided evidence that there are differences between the accounting systems and that the magnitude of the differences between the national regulations and the IFRS for SMEs would influence the cost of a possible adoption of the standard.
The IFRS for SMEs is considered to be “a significant development which may have strong impact on accounting and auditing practice in the future, but the attitude of national regulators and standard-setters is crucial in establishing the limits of this possible impact” (Jermakowicz and Epstein, 2010). The interviews with the representatives of the main actors involved in the accounting process (preparers, auditors, professional bodies, regulators, academics, users) revealed their perception about the characteristics of SMEs and SMEs accounting, the costs and benefits of a possible implementation of the standard.
Interviewees considered Czech Republic as a typical representative of emerging economy from CEE area with the traditional linkage of accounting system to tax system and application of prudence principle in accounting. Interviewees also points out that the fair value approach could not be widespread in the Czech Republic due to the less efficiency of financial markets.
Summarizing the results of the interviews there shall be highlighted following issues:
• professional accountants hope that the major benefit of the IFRS for SMEs adoption will be elimination of duplicate accounting, unification of the accounting system within international groups and the higher comparability of accounting data,
• elimination of the linkage of national accounting system to tax system or preparation of such improvements of tax legislation that will make IFRS for SMEs capable to apply as a reporting framework,
• professional accountants and regulator are aware of the higher initial costs linked to shift of reporting frameworks,
• professional accountants and regulator are for sensitive use of fair value approach,
• professional accountants and regulator believe that the major users of financial statements based on IFRS for SMEs will be capital providers and potential investors.
Brief Biography of the Speaker: Jirí Strouhal graduated from the University of Economics Prague in 2003 and finished his doctoral studies in 2005. In 2006 he became an accounting expect (Czech accounting profession certification scheme based on British ACCA curricula). In the period 2007 – 2009 he was member of the Committee for Education and Certification of Accountants Czech Republic and Executive Board member of the Chamber of Certified Accountants (Union of Accountants CR). From 2011 he is President of Chamber of Certified Accountants Czech Republic and member of Accreditation Committee of this professional organization.
He is reputed academician and practitioner; he published more than 400 research outputs, from which could be stated 25 monographers in the area of accounting and corporate finance, more than 40 research papers published in reputed databases (ISI, SCOPUS – important piece of them in WSEAS/NAUN research journals). His ISI H-index is 1, SCOPUS H-index is 7 and Google Scholar H-index is 10. His major is corporate financial reporting, partially focused on international accounting harmonization and financial securities reporting.
He was a plenary speaker of DEEE 2010 conference in Tenerife, E-ACTIVITIES 2011 conference in Jakarta, and conferences in Harvard (ICBA 2012) and Cambridge (EDUCATION 2012). Also did organized special sessions focused on measurement issues in finance and accounting at WSEAS conferences in Timisoara (EMT 2010), Iasi (AEBD 2011), Angers (EMT 2011), Harvard (ICBA 2012), Porto (AEBD 2012), Prague (ECC 2012), Harvard (MMF 2013) and Chania (ICFA 2013). He was a chair of Zlin conferences which were held in September 2012 at Tomas Bata University in Zlin, Czech Republic.