MSMEs Bookkeeping Capabilities for Accounting Information Transparency

Journal Title: International Journal of Current Science Research and Review - Year 2024, Vol 7, Issue 09

Abstract

MSMEs contribute 60% to gross domestic income, MSMEs also absorb labor and collect investment. However, of the total percentage of banking credit, MSMEs only get 20%. Banks experience difficulties in disbursing credit due to a lack of information on debtors who are worthy of financing. Difficulties are caused by the absence of financial reports as a parameter for credit worthiness. Through accounting transparency, it will be easy for MSMEs to know the policies that will be and have been taken. Transparency means the availability of sufficient, accurate and timely information about accounting policies and reporting. It is hoped that this research will be able to provide considerations for MSMEs to improve their accounting capabilities in accordance with SAK EMKM. The research was conducted in Denpasar, involving 100 questionnaire respondents and 10 informants in FGD. The data analysis technique used in this research is interpretive descriptive qualitative analysis technique. As a result, MSMEs do not yet have the capability to prepare financial reports. MSMES players consider that the important aspects in starting a business are capital, skills and innovation or products, not accounting. Low accounting capability has an impact on neglecting the preparation of financial reports. Transparency can increase funding opportunities from banks or investors as well as opportunities for collaboration. There are still many MSMEs that have not prepared financial reports due to limited human resources and costs. However, MSMES players want to prepare financial reports. MSMEs in the medium business category have prepared financial reports in accordance with SAK EMKM, only some in the small business group and not in the small business group. SAK EMKM requires a statement of financial position at the end of the period (balance sheet), a profit and loss statement for the period and notes to the financial statement. MSMEs focus more on recording expenses and income for profit and loss projections but ignore the balance sheet and Calc. The compiled profit and loss is still not relevant, there are still many accounts that have not been taken into account. Preparing a complete report in accordance with SAK EMKM will provide much more relevant and credible information.

Authors and Affiliations

Desak Rurik Pradnya Paramitha Nida, I Wayan Chandra Adyatma, Riza Edwindra,

Keywords

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  • EP ID EP745208
  • DOI 10.47191/ijcsrr/V7-i9-40
  • Views 54
  • Downloads 0

How To Cite

Desak Rurik Pradnya Paramitha Nida, I Wayan Chandra Adyatma, Riza Edwindra, (2024). MSMEs Bookkeeping Capabilities for Accounting Information Transparency. International Journal of Current Science Research and Review, 7(09), -. https://www.europub.co.uk/articles/-A-745208