A compliance nightmare looms for small business
Accounting standards: A compliance nightmare looms for small business
New Zealand’s small businesses would be crippled by across the board adoption of international accounting standards, according to leading accounting and business advisory group Hayes Knight NZ.
“Across the board adoption of international accounting standards is unnecessary and irrelevant for over 80% of New Zealand’s business community,” Matthew Bellingham, Director of Hayes Knight said today.
Mr Bellingham is responding to recent commentary by the CEO of the NZSE and other leading finance figures calling for across the board adoption of international accounting standards.
Mr Bellingham instead called for a sensible two-tiered approach to adopting international accounting standards.
“It is reasonable that full international standards should apply to listed companies. However very considerable exemptions must be available to allow a simpler reporting format for other enterprises,” Mr Bellingham said.
“There is no question that forcing small businesses to comply with international accounting standards would dramatically increase their compliance costs.
“Our small business community is already struggling with an enormous compliance burden. We should be focussing on reducing the red tape so they can focus on running their business.
“SMEs simply won’t benefit from the level of complex accounting disclosure required to meet the international accounting standard. The cost/benefit equation of these accounting requirements just doesn’t fall in their favour. Placing this pressure on SMEs could potentially see businesses going out of business.
“International harmonization of accounting standards is important for those businesses that would benefit from international harmonization. For the rest, it represents more paperwork.
“SMEs simply cannot afford to be burdened with the compliance costs that would result from across the board adoption of international accounting standards,” Mr Bellingham said.