engleski

The Features of SMEs as the Variables of Influence onto Global Accounting Standards Implementation in Croatia

The globalisation processes make pressure to reach worldwide accounting systems harmonised. That’ s why International Accounting Standards Board makes efforts to increase the possibility of wider acceptance of International Accounting Standards. The willingness to implement them varies over countries, requiring or allowing their implementation entirely or partially, for all the entities or only those with international dimensions. The success of their implementation in a given country depends on the environmental factors influencing its accounting system, but also on enterprises’ internal factors that may together with the external influences, affect the accounting standard application. This paper analyses the latter ones, presenting a brief overview of identified factors in the literature and attempting to extend them by our recent findings. The empirical analysis of potential influences onto IASs implementation was performed in 2005/06 at the sample of Croatian SMEs since they presented the majority of Croatian business entities (98%) and had serious problems with direct implementation of the entire set of IASs as required by the Accounting Act in the period 1993-2006. The goal was to identify the reasons of diverse intensity of the standards implementation among the enterprises of distinctive characteristics, or, more precisely, to find out the internal factors that could possibly be of influence onto the particular IASs implementation in Croatian SMEs. As the results of logit regressions, we found significant association of the enterprise’ s legal form and IASs implementation (IASs 8, 10, 24) ; its size (IASs 7, 20, 24) ; the number of employees (IASs 21, 38) ; relation to business abroad (IAS 2) ; accounting function organisation (IASs 1, 16, 17, 18, 38) ; frequency of accounting information use (IAS 7) ; management’ s participation in selection and adoption of accounting policies (IAS 23) ; cost-benefit considerations of the accounting information preparation and use (IASs 1, 38) and accrual accounting preference (IASs 10, 12, 18, 38). So, 9 out of 11 hypotheses set up, were accepted proving the positive relation of given variables onto the probability of IASs implementation. For IAS 36, no relationship with potential variables of influence was proved, so none hypotheses was accepted. We have also found significant negative association of the type of accounting information users and IASs implementation (IASs 2, 16, 18, 23, 24) as well as of the management function performance (IAS 10, 17). The reasons of such a relation should be interpreted considering the fact of joined management and owner function in most SMEs or even where they were separated, the owners apparently weren’ t the outsiders and had all the information disposable. Also, after owners and managers, the most important financial statements user was considered to be the government, so tax rules were followed in the first place with IASs application marginalized. There was no such widespread ownership or potential investors’ interest that would be typical external users related to IASs implementation, with banks as primary financial source. There were also some variables with expected positive association with some standards proved, turning into the negative relation with other standards, like it was the case with the frequency of accounting information use and IAS 21 implementation ; the relation to the business abroad and IASs 10 and 38 ; management’ s participation in selection and adoption of accounting policies and IAS 38 ; enterprise’ s size and IAS 12. The research brings to the conclusion that there is a pattern of IASs implementation followed by Croatian SMEs that should be clearly identified and analyzed in order to develop the guidelines towards effective accounting harmonisation as the prerequisite of globalisation processes and competitiveness on European and global markets. Our findings do not tend to be generalized over countries, given Croatian SMEs particularities, but may induce some similar researches that could, gathered together, become useful to accounting standards setters enabling their better understandings of application of the standards once they have been introduced in the real practice.

globalisation; international accounting standards; SMEs

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