SMEs Specific Stakeholders Needs on Financial Reporting: The Czech Republic and Romania

In the context of the international drive to simplify the SMEs’ financial reporting, one may identify a stringent call for the identification and serious analysis of the SMEs’ specific users of information and their needs. It appears that these needs are not sufficiently developed at present, through market research and accounting literature, so that they can play a useful part in the accounting regulators current actions. Main objective of this paper is to identify and rank the users and their needs, within the European area and for emergent economies, taken into consideration the fact, that especially in these areas, there are few such analyses. There is made analysis of current documents regarding SMEs’ financial reporting (IFRS for SMEs and EU 4^th Directive) and there is engaged sectional analyses through survey-inquiries with the aim to establish an identification and raking scheme for users and their needs. There is also discussed the impact of users needs upon the financial reporting regulations’ methods of elaboration. The assessments in the literature and our own investigations, including the determination of SMEs’ overheads, are going to justify the opportunity of developing a stand-alone accounting standard, which will contain a conceptual framework, and adequate recognition, valuation and disclosure criteria.

The identification of the stakeholders and their needs will be done based on the stakeholders’ theory, adapted to SMEs. These characteristics bring about typical stakeholders and their needs adapted to the SMEs’ working environment. We will combine the regulatory and instrumental approach of the stakeholders’ theory. The first one will lead to outlining some normative assumptions regarding the variables that define the stakeholders’ domain (Mitchell et al., 1997). The second one will reflect the manner in which the company is taking into account the impact of the stakeholder to which it links its performance-aimed actions (see Donaldson and Preston, 1995; Polonsky and Scott, 2005). We will also refer to the property rights theory and to the classical theory of the shareholder-manager, endorsed by Jensen and Meckling (1976) quoted by Foss et al. (1999), respectively by Alchian (1991). This last group of theories will help us in distinguishing between the shareholder-manager – present in the majority of SMEs - and the other stakeholders of SMEs. Within the stakeholders’ theory, we share the ideas of Mitchell et al. (1997) that offer a flexible, adaptable scheme to any environment framework for the attributes needed to identify the stakeholders (power, legitimacy and urgency).