The adoption of the IFRS for SMEs has also been essential in ensuring

The adoption of the ifrs for smes has also been

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The adoption of the IFRS for SMEs has also been essential in ensuring comparability, in the preparation and presentation of financial statements. This has led to convergence of the standards used for the purpose of accounting for small and medium enterprises. The convergence and harmonization of the practices and principles of accounting has led increased participation of the SMEs in the global trade. The increased adoption of IFRS for SMEs has led to increased awareness by entrepreneurs with the aim of developing corporations. Majority of entrepreneurs hold onto cultural and attitudes towards the IFRS, as majority of the companies express the IFRS as overly complex. The high cost in terms of subscriptions fees and other requirements involves high costs to the entrepreneurs (Madawaki, 2011). In addition, the organizations will have to hire new qualified staff for the purposes of accounting in the organization. Different countries also employ different fiscal policies, which affect the manner in which profits are described. Different accounting systems also involve disproportionate costs allocations involved in the double accounting 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 of the revenues and costs around the globe (Philip et al, 2011). According to various studies there 28
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have been increased concerns on the need to develop sound accounting systems in SMEs for the purpose of increasing financial management by the organizations. Adoption of the IFRS for SMEs has a direct impact on the accounting skills and financial management of the managers and owners of the businesses. This have been attributed to the continued practice of the right practices and principles in accounting. Compliance to the IFRS requires the entrepreneurs to be members of the regulatory bodies operating in their respective countries (Brookfield, 2001). A complete set of financial statements should include a statement of financial position; a statement of changes in equity; a statement of cash flows; notes to the financial statements and a single statement of comprehensive income which can be replaced by the statement of income and retained earnings in cases where the only movements in equity for the period relate to profit and loss, dividends, errors and changes in accounting policy. It enables an entrepreneur understand that the concepts and theories used in accounting practice are recognized in international financial reporting standards when preparing financial statements either for small and medium enterprises or for general accounting practice. For example, the concept of consistency is an essential concept, which ensures that, irrespective of the changes in the business environment consistent accounting methods are applied consistently. The going concern concept also acts as an assurance that the business will continue to be in operations over a long period of time. These
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