64 Record keeping responsibility for SMEs The record keeping function is

64 record keeping responsibility for smes the record

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6.4 Record keeping responsibility for SMEs The record keeping function is important in determining the accuracy and timeliness of tax information. Figure 6.2 shows that more SME operators undertook the record keeping functions themselves, compared to those who used paid assistance and/or family members. The relatively high number using paid assistance indicates a low level of accounting proficiency and a general disinterest towards record keeping. The low number of family members used did not align with the high number of collectivistic Asian, Maori and Pacific operators in this study. Comparatively more Asians in this research undertook the record keeping function themselves because they were fairly knowledgeable in tax (see Appendix 10). More Maori and Pacific operators in this sample used paid assistance due to their lack of knowledge and interest in record keeping, as discussed earlier in sections 6.2.3 and 6.2.4. More Europeans in this research shared their record keeping function with family members, as five of the nine businesses were jointly operated by both spouses. However, contrary to prior literature, collectivistic Maori in this sample could not access their family members to assist with their record keeping function. Twenty eight of the 36 operators undertook the record keeping function for dual purposes to satisfy tax compliance requirements and for business management purposes (see Appendix 6, interview question 3b). More of the European and Asian operators in this sample were using accounting information to manage their business whereas the remaining eight operators (predominantly the Pacific and Maori operators) admitted to using the information solely for tax purposes as shown in the next page.
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100 Person responsible for business record keeping 0 1 2 3 4 5 6 7 Europeans Asians Maori Pacific Peoples Number Do it themselves Family member(s) Pay others to do it Figure 6.2: Person(s) responsible for the business record keeping function by ethnicity “I definitely do it for management reports so that I can see what the business is doing. I look for trends and every month I have a one page report with all graphs. I will sit down with my manager and explain to him as to what is going on with the business. By doing that, we can make changes to the business where needed like the weak areas . . . We also use the financial statements as we are in the process of selling half of the business.” (E8) “Like if we have generated income for the business, we will continue with the business and if we are running a loss, we will close down the business. I also look for trends.”(A3) “To be honest, I do the bookwork mainly to get everything right for tax.” (M4) “To be quite honest, I do all the record keeping to keep up with the tax compliance, but then again I know now as I get more business savvy that I need to know a lot more.” (P3) The findings show that some SME operators under-valued the importance of accounting information, particularly those from the Maori and Pacific sample, and they did not take
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  • Fall '16
  • tax compliance, SME Operators

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