The burden of accounting standards for small and medium enterprises. A suggestive solution

Abstract

Anglo-Saxon accounting literature has traditionally connected the U.S. stock market crisis of the late 1960s and the consequent proliferation of complex and detailed accounting standards with the origin of a complex problem, commonly known as “accounting standards overload”, that can be defined along two different but correlated perspectives: 1. the question of comparing costs and benefits of complying with accounting standards by small and/or privately held entities; 2. the competitive disadvantage for public accountants (CPAs) who serve these entities. This paper begins with a background and purposes of the study (par. 1) followed by the analysis of the main literature of the general phenomenon of accounting standard overload (par. 2). Paragraph 3 focalizes on the cost-benefit analysis of complying with accounting standards by small and medium entities and then paragraph 4 describes the solutions adopted in the main Anglo-Saxon countries (par. 4.1), with a particular reference to the “Non-reporting entity” concept (par. 4.2). Finally, the authors share their personal observations (par. 5).