Financial reporting for micro-entities: Valuable or burdensome? The case of Belgium

Research output: Chapter in Book/Report/Conference proceedingConference paper


In Europe, the debate over the simplification or outright abolishment of reporting requirements for small companies is raging. The government's rationale for simplification of financial reporting requirements is mainly based on reducing the administrative burden. Although it is important to assess the costs small companies incur, it is as important to assess the benefits they encounter from financial reporting. While the research stream into SME financial reporting has increased, still very little academic research exists on the value of financial reporting for the smaller companies, especially micro-entities. This paper contributes by empirically exploring whether financial reporting is valuable for micro-entities. We focus on who the users of micro-entities' financial statements are and what the perceived costs and benefits are according to the (owner-) managers of micro-entities. Our questionnaire survey of 93 Belgian micro-entities reveals that the major users of micro-entities' financial statements are banks and tax authorities. The results also show that although the majority of respondents are in favour of an exemption of the financial reporting requirements for micro-entities - mainly because of the cost and time aspect-, still a large part of the respondents are against it. The financial statements are for the latter not only an important internal tool in managing the company, but are also used in evaluating the financial position of other companies.
Original languageEnglish
Title of host publicationInternational Accounting and Auditing Conference Amsterdam
Publication statusPublished - 2012
EventUnknown -
Duration: 1 Jan 2012 → …


Period1/01/12 → …


  • micro-entities
  • financial reporting
  • users


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