SMEs Need for Management Accounting and the Role of SMPs (Research Paper Sample)

SMEs Need for Management Accounting and the Role of SMPs Research proposal Executive Summary The study aims to get a knowledge of the management accounting (MA) demands of owner of SMEs as well as the role that small and medium accounting practitioners (SMPs) play in satisfying these needs. SMPs are also a significant category in economies as well as the accounting profession internationally and locally. SMEs constitute an important part of the economy in both industrialized and emerging nations across the world. According to study, the great majority of SMEs fight for continuity and survival. Given these conditions, MA and control systems play a vital role in SMEs. Inappropriately, the provision of MA services by SMPs is meaningfully missing, and this research calls for a greater and collective participation of SMEs, researchers, and the accounting practitioners in the process of identifying, understanding, and meeting the MA needs of SMEs. The skill sets that SMPs possess position them well for more practical responsibilities in areas like as management of cost, price choices, information systems, financial planning, and strategic management procedures, in addition to the everyday compliance work that they are responsible for. To gain an understanding of the forces that cause SMEs to have a desire for MA information as well as the role that SMPs play in the supply of such services, institutional theory will be utilized. This field study intends to get a deep comprehension of the MA demands of SMEs owner in addition to the role that SMPs play in satisfying those needs qualitatively. The primary method of collection of data will consist of interviews with owner-managers of the SME and their public accountants. These interviews will be complemented by archival data gathered from sources both external and internal to the organizations that will be investigated. This study is intended to provide in-depth intuitions into issues that SMPs and SMEs face in general, and more precisely in relation to the broader, management data and recent financial requirements of SME owner-managers and prospects for SMPs. It is anticipated that these insights will be provided as a result of the study. In conclusion, the research ought to give researchers, the accounting profession, and its members with information on opportunities, difficulties, and future directions related to the larger accounting demands of SMEs. Introduction The term "small and medium enterprises (SMEs) refers to businesses that have between one and four hundred employees. The overwhelming majority, on the other hand, has challenges in terms of survival and continuity (Mitchell, 2000; Mitchell, 1998). In light of these considerations, the information derived from management accounting plays a significant part in the process of keeping track of and exercising authority over the operations of SMEs. SMPs are the most numerous subgroups within the accounting profession. They are also an essential cog in the economic machinery of both the international and locally. Regardless of the social and economic significance of SMEs and small and medium-sized companies, management accounting research projects and the distribution of MA information to SMEs by SMPs have been noticeably missing. In point of fact, these provide difficulties for the accounting researchers, accountants in practice, and the accounting profession as a whole. Research Objectives 1 Understand the significance of MA information for SMEs owner-managers 2 Find specific MA needs of SME owner-managers; 3 Discuss the capability of SMPs to meet SMEs MA needs. An overview of the literature According to research, SMEs managers expect, in addition to routine acquiescence services, advice on a variety of general and specialized aspects of their businesses. These aspects include financial planning, MA and information systems, succession planning, forensic accounting, pricing decisions and cost reduction (Kirby 1997; Arnold, 1986; Marriott 2000; Nandan 2007; Ciccotosto 2005; Alam 2007). SMPs do not have considerable experience in the provision of the aforementioned services, despite the fact that they possess the knowledge and abilities necessary to deliver the bulk of those services. In addition to this, it would appear that SMPs haven’t been proactive in expanding beyond their core service areas of acquiescence (Kirby 1997; Arnold, 1986;). Satisfaction with a restricted service compliance-based, unwillingness to step out of their coziness zone, and a lack of resources –intellectual, financial and human – are some of the potential causes that may have played a role in such a choice (Marriott 2000; Alsharari, 2015). SMEs have the impression that SMPs are overworked, unorganized, extremely fee-conscious, and without the necessary training to deliver management accounting services (Kirby, 1997; White, 1983). This opens the door for additional professions, like as attorneys and information technology specialists, as well as financial institutions like banks, to provide MA services to SMEs Particularly in the context of Fijian business, there is a paucity of written material concerning the MA requirements of SMEs and the function that professional accountants play. The majority of those that have been published up to this point concentrate on the US and UK, whereas there is almost no mention of Fiji. Because of space limitations, the findings of the relevant published research will only be discussed in passing in the following paragraphs (Hopwood, 1987). A study conducted by Kirby (1997) in the North East of England discovered that there was "a mismatch in the expectations of the two groups." Despite the fact that SMPs believe they have a mutually beneficial relationship with their clients, this is not the case. Managers who own their own companies often blame their accountants' lack of industry knowledge and experience rather than the service's high price. Accounting professionals, according to Kirby (1997), frequently simply offer guidance when asked for it, and they don't take on any duty for the SMB sector beyond contractual requirements for compliance-related operations. Marriott (2000) discuss their findings within the context of the United Kingdom concerning the demand for MA information by SMEs and the competence of public accounting consultants, namely SMPs, to provide those needs. However, the advice on acceptable software and systems came from sources other than accountants in the majority of the situations, even though all fifteen of the organizations that were questioned utilized computers to create accounting reports. The data also show that the fees that are charged for the services that are rendered are fairly steep, which is especially true when the owner-managers are responsible for providing all of the information that is necessary to generate accounting reports that are acceptable to the tax office. The most of owner-managers were of the opinion that they might benefit from MA information; however, they were hesitant to request the same information from SMPs due to the possibility that doing so would result in increased fees. This impression held by SMEs is a barrier to SMPs being requested to provide management accounting services for SMEs (Ribeiro, 2006). Holmes (1989) brought attention to the fact that owner-managers of Australian SMEs seldom acquire or prepare thorough accounting information, with the exception of the information required for statutory returns. Methodology Following the identification of the organizations that will be participating, the archive data that is openly accessible with regard to those organizations will be collected. Annual reports and any other relevant publications will be requested from the participating organizations at the appropriate time. The researcher will acquire a deeper grasp of the nature of the accounting profession and the organizations that participated in the study thanks to this process. This research, in contrast to those that came before it that were based on surveys, will use a qualitative technique to gather, analyze, and present rich data gathered from the field. At the very least 10 owner-managers from ten distinct SMEs and accountants will be selected, and they will come from a variety of locations. It is intended to conduct a total of fifteen interviews, with each session scheduled to run for around an hour. The interviewees will be asked for their permission to record the interview before it takes place, and once the research assistant has transcribed the interviews, a copy will be given to the interviewees to ensure that everyone has a common understanding of the issues at hand and to allow for the addition of any information that may have been missed. In light of the fact that there is a possibility that the technology can malfunction, the research assistant will also make backup notes in order to make the transcribing process more productive and user-friendly. Timelines After the grant has been accepted, the application for the research to be authorized by the University will be submitted. Though some preliminary relationships have already been created via prior research and meetings, formal contacts are going to be made with the organizations that are going to be taking part in the study as soon as the authorization for the research is given. As early as January 2023, we will begin the process of identifying potential interviewees and sending out invitations to take part in our research. It is anticipated that the interviews would begin around the middle of February 2023. By the end of June 2023, it is anticipated that all of the archive and interview data will have been analyzed. The write-up of the project will take place over the course of the following three to six months. By December 2023, the final report will be finished, and graded Journals that are part of the ABDC publishing program will be soug...