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The adoption of the IFRS for SMEs has also been essential in ensuring comparability, in thepreparation and presentation of financial statements. This has led to convergence of the standardsused for the purpose of accounting for small and medium enterprises. The convergence andharmonization of the practices and principles of accounting has led increased participation of theSMEs in the global trade. The increased adoption of IFRS for SMEs has led to increasedawareness by entrepreneurs with the aim of developing corporations. Majority of entrepreneurshold onto cultural and attitudes towards the IFRS, as majority of the companies express the IFRSas overly complex. The high cost in terms of subscriptions fees and other requirements involveshigh costs to the entrepreneurs (Madawaki, 2011). In addition, the organizations will have to hirenew qualified staff for the purposes of accounting in the organization. Different countries alsoemploy different fiscal policies, which affect the manner in which profits are described. Differentaccounting systems also involve disproportionate costs allocations involved in the doubleaccounting relative to the needs and revenues of small and medium enterprises (SMEs).Adoption of the IFRS for SMEs will contribute to an equality and uniformity in recognition ofthe revenues and costs around the globe (Philip et al, 2011). According to various studies there28
have been increased concerns on the need to develop sound accounting systems in SMEs for thepurpose of increasing financial management by the organizations. Adoption of the IFRS forSMEs has a direct impact on the accounting skills and financial management of the managersand owners of the businesses. This have been attributed to the continued practice of the rightpractices and principles in accounting. Compliance to the IFRS requires the entrepreneurs to bemembers of the regulatory bodies operating in their respective countries (Brookfield, 2001).A complete set of financial statements should include a statement of financial position; astatement of changes in equity; a statement of cash flows; notes to the financial statements and asingle statement of comprehensive income which can be replaced by the statement of income andretained earnings in cases where the only movements in equity for the period relate to profit andloss, dividends, errors and changes in accounting policy. It enables an entrepreneur understandthat the concepts and theories used in accounting practice are recognized in internationalfinancial reporting standards when preparing financial statements either for small and mediumenterprises or for general accounting practice. For example, the concept of consistency is anessential concept, which ensures that, irrespective of the changes in the business environmentconsistent accounting methods are applied consistently. The going concern concept also acts asan assurance that the business will continue to be in operations over a long period of time. These