Is Harmonization of SMEs Reporting Really Necessary? A Case of Central and Eastern European Countries.

Abstract

The Small and Medium Enterprises (SMEs) can play an important role in
the international business environment provided these enterprises display
flexibility in improving their accounting practices and are willing to adopt
the International financial accounting standards. Business enterprises that
have already adopted the International Financial Reporting Standards
(IFRS) have witnessed improvement in the comparison of financial
information and also in the flow of communication with their external
stakeholders. In other words adoption of IFRS has helped in reducing
investor’s uncertainty, cost of capital and risk mitigation. This paper
highlights the challenges of applying IFRS in emerging Central and Eastern
European countries (CEE countries), i.e. Czech Republic, Slovakia, Poland
and Ukraine. It also discusses the impact of IFRS adoption on the tax burden
and administrative costs of SMEs.