Complex regulatory changes and the increasing demand for sustainability reporting are among the key challenges facing the UK’s SME and their accounting firms.
A report by the British Accounting and Finance Association Financial Accounting and Reporting Special Interest Group (FARSIG) also highlighted the complexity of integrating cloud-based systems and the training of current staff as challenges facing the sector.
The report was launched at the 2024 FARSIG symposium entitled ‘The Future of Finance Reporting’, where speakers highlighted the burdens that increasing regulations on financial and non-financial reporting impose on accounting firms as well as SMEs and private businesses in the UK. The symposium worked to make suggestions for regulators on how to reduce the severity of these burdens.
It said that while the emerging trend in private business to move to cloud accounting offered numerous benefits to SMEs, the symposium also discussed the increasing concerns about data ownership and how these tools expose smaller enterprises to cybersecurity risks.
“The symposium examined the ESG challenges that SMEs and private corporations face, with the increasing importance that ‘thinking and acting sustainably’ has for businesses,” the report said.
“All of these pressures highlight the existence of important gaps between accounting education and the skills that are needed in the accountancy profession.”
Silvia Gaia, Professor of Accounting at the University of Essex, said: “By debating the future trends and challenges in SMEs’ and private businesses’ corporate reporting, the symposium aimed to attract the attention of regulators and practitioners on these issues.
“In doing so, it also provides valuable contributions to the current project undertaken by the IASB aimed at reviewing IFRS for SMEs by supporting the need for more simplification and reduced disclosure requirements.”
A new edition of IFRS for SMEs issued by IFAC is expected in the second half of 2024.
“By debating the future trends and challenges in SMEs’ and private businesses’ corporate reporting, the symposium aimed to attract the attention of regulators and practitioners on these issues.
Silvia Gaia, Professor of Accounting, University of Essex
