Title: Does the International Financial Reporting Standard for small and medium-sized entities suit private firms? Fieldwork case-study vignettes for Taiwan

Authors: Yu-Lin Hsu; Gavin C. Reid

Addresses: Department of Accounting and Finance, University of Strathclyde, Level 3, Stenhouse Wing, 199 Cathedral Street, Glasgow, G4 0QU, UK ' School of Economics and Finance, University of St Andrews, St Andrews, KY16 9AR, UK; Centre for Business Research at Cambridge Judge Business School, University of Cambridge, Cambridge, CB2 1AG, UK; ESSCA Management School, 49000 Angers, France

Abstract: This paper challenges policy makers' claims that the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) is 'fit for purpose' in private firms, using the mixed method and fieldwork evidence from Taiwanese companies. We exploit a unique research window during 2012-2016, when the Taiwanese accounting regulators considered adopting IFRS for SMEs, but finally chose a new hybrid standard: the Enterprise Accounting Standards (EAS), involving elements of IFRS and IFRS for SMEs. We find that companies' attitudes towards IFRS for SMEs were strongly influenced by their plans and strategies (e.g., being acquired), and the accounting standard used by their parent companies. Hence, while introducing IFRS for SMEs or EAS seems a sound policy, accounting regulators should beware of their challenges to private firms (e.g., no ambitions to go public). Compliance costs could be attenuated by providing firms with clear accounting choices, whilst ensuring adequate financial reporting comparability.

Keywords: IFRS for SMEs; private firms; case-studies; corporate group; GAAP; mixed-method.

DOI: 10.1504/IJAAPE.2023.132392

International Journal of Accounting, Auditing and Performance Evaluation, 2023 Vol.19 No.2, pp.161 - 184

Received: 30 Apr 2021
Accepted: 23 Mar 2022
Published online: 19 Jul 2023 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article