Financial reporting regulation: valuable or burdensome? An exploratory test-case for micro-entities

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

Abstract

Although the literature suggests there are incentives for companies to voluntarily disclose all their financial information, in the reality it seems that companies typically do not disclose more than regulation requires. One reason for this is that disclosing information is costly for the company, whereas the benefits are mainly incurred by the public. Regulation may be justified to ensure a certain level of transparency to protect those stakeholders who don't have the power to extract information from the company. Although there are both arguments for and against regulation, it remains largely an empirical question whether there should be disclosure regulation and to what extent. Limited research exists on the costs and benefits of financial reporting regulation, especially in a small private context. The aim of this paper is therefore to explore the costs and benefits of financial reporting regulation for SMEs. In the light of the current developments and deregulation debate, an exploratory test-case was conducted on the costs and benefits of financial reporting for micro-entities. This might be interesting since the net benefits are likely to be less evident for the smallest companies because of the higher cost of compliance and the proportionately lower public interest in micro-entities.
Original languageEnglish
Title of host publicationEuropean Financial reporting Research Group (EUFIN), Prague
Publication statusUnpublished - 6 Sep 2012
EventUnknown -
Duration: 6 Sep 2012 → …

Conference

ConferenceUnknown
Period6/09/12 → …

Keywords

  • financial reporting
  • SMEs
  • micro-entities
  • financial reporting regulation

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