SMEs’ Financial and Differential Reporting- A Review of Publications

Abstract

The purpose of this paper was to evaluate publications about Small and Medium Enterprises’ (SMEs) financial and differential reporting and formulate suggestions for its progression.  Based on desk-based research, the paper employed a literature-based analysis and critique of 100 selected publications about financial and differential reporting for SMEs. The paper only considered selected studies over the period 1985 to 2014. All financial and differential reporting literature of SMEs that was publicly available was  incorporated (see also, Eierle and Schönefeldt, 2010). This method was employed because of the scattered nature of articles on financial and differential reporting for SMEs. From this, a descriptive analysis of the characteristics of the literature was discussed. Thereafter, a conceptual analysis of the reviewed publications was conducted to provide the basis for suggestions for possible future directions of this body of research. The descriptive analysis highlighted that among the research studies reviewed several interesting patterns emerged concerning SMEs’ financial and differential reporting research. Contrary to what had been argued in previous reviews, studies of developing countries had started to increase in this body of research since 2009. When the focus of the literature was considered, the “scrutinization of differential reporting” was the area of most focused interest especially after the release of IFRS for SMEs. The main implications of this paper are that, the focus of published literature had been in line with IASB’s project of the development of IFRS for SMEs. This paper provides several important insights in order to highlight policy development, especially to the steering bodies such as IASB. Moreover, the paper identifies possible areas for further research.