The perceptions of South African accounting practitioners on the post-implementation of IFRS for SMEs in an institutionalised environment

Abstract

Orientation: Small and medium-sized entities (SMEs) play a crucial role in the South African economy. The financial reporting framework applicable to SMEs may contribute to the success of the SME. This study was exploratory in nature and followed an interpretive approach to seek an in-depth understanding of the application of the International Financial Reporting Standards for Small and Medium-Sized Entities (IFRS for SMEs) in South Africa.

Research purpose: This article explores the perceptions of South African accounting practitioners regarding the post-implementation of the IFRS for SMEs in the South African SME sector.

Motivation for the study: South African research on IFRS for SMEs is scarce. This study was designed to contribute to the scarce body of literature on IFRS for SMEs and will benefit both the South African and international accounting profession.

Research approach/design and method: In-depth semi-structured interviews with 21 accounting practitioners were carried out during 2017 and 2018. An interpretive approach was adopted to analyse the data into themes providing the insight into the perceptions of South African practitioners.

Main findings: Overall, there appears to be an approval of IFRS for SMEs. The uniformity associated with IFRS for SMEs is one of the significant advantages, while factors such as the age of the practitioners, the use of automated software systems and South African legislative requirements affect the relative merit of using the standard.

Practical/managerial implications: The use of the interpretive style will assist professional accounting organisations, standard setters and regulators in understanding the various benefits and drawbacks of the IFRS for SME framework.

Contribution/value-add: This article is the first to explore the in-depth views of accounting practitioners after IFRS for SMEs was adopted in South Africa. The article also highlights the challenges faced by accounting practitioners in developing economies that service SMEs.