Accounting Is Important For Growth Sustainabilityâ€Free Samples

Question: What is the importance of financial reporting among the SMES in Jaipur, India? Answer: Introduction Accounting is very important for the growth and sustainability of both old as well as new businesses globally. The financial books, therefore, need to be in top shape every year in order for other activities to run smoothly and improve profitability. Moreover, proper accounting of financials of the businesses enhances the future trends of the business in terms of making decisions (Guthrie and Parker, 2014). This calls for efficient and long-term plans in terms of accounting for a business because the accounting needs are likely to increase as the business grows. In this case, the international financial reporting framework needs to be adopted because it is associated with several merits (Jorissen et al., 2017). Project Objective To determine the effectiveness of financial accounting report statements in SMEs in Jaipur, India. Project Scope The importance of financial accounts in the businesses cannot be underestimated. The scope of this study will be to focus on non listed private limited liability entities in the financial sector such as banks and other privately owned firms and companies. The SMEs will thus be selected from this class of businesses and their financial statements analyzed. Literature review Accurate financial reporting also gives the investors the willingness and confidence to invest in the business. Moreover, accurate finance reports lead to low costs of capital and ensure that the resources in a business are allocated wisely on the basis of economic development (Suddaby et al., 2015). This calls for the internationally recognized accounting standards to be used because they are of top quality. Another advantage of the global accounting standards in a business is that they can be shared, understood and embraced by several setters of standards globally. Although there are some domestic setters of financial standards, but they need to be in agreement with global setters. In this case, the basic theory of financial standards is not just theory but should be based on support. Since there are very many global standards which act as a financial to global accounting and auditing, the standards adopted should be able to achieve some results. Be hiring a reputable company to ta ke care of the accounting needs of a business, it could be possible to be moving in the right direction in terms of accounting. This makes it possible to fill in some gaps which exist in global accounting which could lead to enhanced business performance. There are some functions of business transactions such as payrolls and ledger books which are almost a daily part of any business (Armstrong et al., 2015). These transactions are carried out on the basis of a set routine and protocol which do not necessarily require expertise in business. In some cases, this can be very dangerous to the company because global accounting standards are very crucial in minimizing errors. In this case, a research will be carried out to determine the use of SMEs in Jaipur city in India. Lack of proper accounting in business is identified with various problems which can negatively affect the continuity and overall performance of a business. For instance, inappropriate accounting makes it difficult for a business to open operations in new markets (Guthrie and Parker, 2014). With increasing varied needs for various market segments, the financial companies face a lot of pressure in an effort to meet the clients' needs. As the shortage of labor increases, so does the companies become in need of talents for its employees. With the young generation adopting technologies, when they retire from service, it becomes important for a company to get other talented people so that they can create plans for the future business operations (Kaya and Koch, 2015). Moreover, there are challenges in creating a team of internal employees who can demonstrate leadership abilities. Such leaders are very crucial for the continuity of the business upon retirement. However, the challenges being faced by businesses in terms of financial accounting and auditing create problems. If some talented leaders would be trained, they would become experts in solving some of the problems that the business might face in the course of its operations (Van Auken and Carraher, 2013). Such motivated and talented employees who possess the best qualities for business operations can thus be an asset because they determine the way in which the customers, employees, and investors perceive the company (Leuz and Wysocki, 2016). However, if the resources are not appropriately allocated due to poor financial reporting, then it becomes difficult for the business to obtain external help in molding the team of next generation leaders who would build the reputation of the business. Justification There are several problems which are associated with lack of proper financial accounting among the SMEs. Most of these classes of business do not adopt the international accounting standards and may mostly rely on their accountants. This could lead to improper decision making which affects the profitability of the business due to failure in meeting the requirements of the business. Another problem which emanates from improper financial reporting is that there are problems with regards to adoption of technology. Some businesses are so reluctant in coping and keeping abreast with the ever-changing trends in technology in order to meet the needs of the customers. Moreover, poor financial reporting could make it difficult to handle the expectations of the clients. This is because nearly every client expects to receive top quality services so that the problems that they are facing can be solved within a short time. It becomes wise that financial reporting companies maintain the customers who are of the same type in terms of meeting their expectations. Secondary research questions Based on the initial aim of determining the level of use of the financial reporting systems in Jaipur, the following research questions will be addressed: Which SMEs are the largest users of financial statements? What are the various ways in which the financial statement reports are used? What is the level of independence in terms of carrying out audits are various SMEs subjected to? Are there any merits or demerits associated with the use of financial statements in accounting? Are there any variations in terms of the quality of the financial reports generated by the SMEs? Research design and methodology Since there are variations and varied arguments on whether to use the qualitative or quantitative methods, this study will adopt the mixed methods. The mixed method will apply many data collection methods in terms of interviews and questionnaire surveys. This will allow the detailed investigation of financial reporting among the SMEs in India by use of several perspectives, a step which will increase the confidence of the researcher on the obtained data and results. The use of multiple sources will enhance a complete and holistic form of data collection for this research. As a result, elements of both the qualitative as well as the quantitative data collection methods will be used. This is because there is a wide range of research questions which needs to be answered to meet the requirements of this research. Some of these research questions are more of descriptive and exploratory, necessitating the use of mixed methods. Qualitative research More specifically, the inclusion of the qualitative aspects of data collection, will make it possible to understand the complex nature of the aspects that are being studied and hence a clear understanding. Since the accounting processes involve the human behaviors, the mixed research will help in gaining an understanding of the nature of usage of accounting information. The qualitative research will therefore use a detailed questionnaire which will have both open ended as well as closed ended questions. Therefore, the concurrent triangulation research approach will be used such that the quantitative and qualitative data collected will be analyzed separately but interpreted together. Quantitative research For the quantitative methodology, well structured interviews will be conducted to the same number of respondents on phone as well as face to face. This will ensure that each of the interviews will have the same set of questions. As such, comparisons between various types of SMEs will be easily made based on the aggregation of the obtained answers. Sample size In this case, all people of 18 years and above will be included in this study. This will be done in order to ensure that the perceptions of social media marketing in financial institutions were covered throughout all ages. More so, the various SMEs in Jaipur city will be interviewed in order to get their reactions and views concerning financial accounting and auditing in decision-making processes (Vander Bauwhede et al., 2015). Having identified the population, it is important for the researcher to draw a sample from the population. This sample is representative of the population being studied and hence the findings of the sample population can be interpreted on to represent the study population (Charan Biswas, 2013). In this research, the sample size will be 150,000 SMEs in Jaipur city of India. Sampling In this study, simple random sampling technique will be used to interview respondents, answer the research questions and test the hypothesis. A pilot study will be carried out before the main study in order to determine the effectiveness of the data collection tool before the main survey. Variables The variables in this research will be classified as dependent (that the researcher is interested in) and independent (affects the dependent variables). The dependent variables will include age, gender of the respondents. The independent variables will include the nature of the business, whether they use the standard financial accounting standards, level of effectiveness of the financial statements, nature of the business and whether they file the tax returns. Data collection Having chosen the sample for this study, forms of informed consent will be sent to the study participants electronically and by hand delivery. The purpose of the study will be explained to the participants and responses will be promised to be confidential and only compiled together with the views of other participants to make a general conclusion and recommendation. The questionnaires will be sent to the respondents via their email addresses while others will be delivered by hand by the research assistants. The participants will be asked to submit the filled questionnaires back to the researcher after three days. The responses received from the questionnaires and interviews will be entered in Microsoft excel, edited and coded as appropriate. The data will be exported into SPSS version 17 data analysis software, analyzed and data presented using descriptive statistics such as means, mode percentages, 5-likert scale and standard deviations. The summaries of the results will be visually presented in forms of tables, charts, and graphs. Moreover, multilinear regression model will be used to find out the use of financial accounting in SMEs. Data analysis The responses received from the questionnaires will be entered in Microsoft excel, edited and coded as appropriate. The data will then be exported into SPSS version 17 data analysis software, analyzed and data presented using descriptive statistics such as means, mode percentages, 5-likert scale and standard deviations. The summaries of the results will be visually presented in forms of tables, charts, and graphs. Moreover, multilinear regression model will be used to find out the effectiveness of financial reporting for SMEs. While the multi-linear regression controls the effects on independent variables, it will also offer information concerning the effects of independent variables. Conclusion It is expected that most of the SMEs that uses financial reporting are banks, tax authorities and some management entities. For the case of large SMEs, the financiers are the biggest users of accounting (Brouwer and Hoogendoorn, 2017). Since the directors form the majority of the shareholders of the SMEs, several sources of information are used for the purposes of decision making. In this case, the SMEs statements are expected to be the biggest source of information for the purpose of decision making. There is a likelihood of using both internal as well as external sources of financial accounting reporting standards (Valentinetti et al., 2016). Most of the tax liability by the directors of the SMEs can be estimated using financial statement. Reliability and validity The use of mixed methods in research is associated with threats to the validity and reliability of the results obtained. For the primary data a test for validity and reliability will be conducted to find out whether the same results can be reproducible. However, for secondary data, there will be no need of carrying out the test because the data will have already been published and signed as passed in the financial statements of various SMEs. Research limitations Some of the limitations of the methodology in this research will be in terms of the long time and effort required. Moreover, the research will require more resources in order to collect enough information to answer the set-out research questions. While many sources of information will be used in order to be confident with the research findings, most likely some of the information obtained might not be collaborative and hence there could be a possibility of the discrepancy of results. Most of the respondents who will be considered in this research are those who have sound business enterprises. Since some of the respondents who will be out of reach will be sent the questionnaires, there might be a possibility of bias in terms of ability to read, write or use internet services. Time plan Activity/ time 2016 May June July August Sept Literature search Proposal preparation Data collection Data analysis Thesis writing Thesis submission Reference List Armstrong, C., Guay, W.R., Mehran, H. and Weber, J., 2015. The role of information and financial reporting in corporate governance: A review of the evidence and the implications for banking firms and the financial services industry. Brouwer, A. and Hoogendoorn, M., 2017. The role and current status of IFRS in the completion of national accounting rulesEvidence from the Netherlands. Accounting in Europe, pp.1-13. Charan, J., Biswas, T. (2013). How to calculate sample size for different study designs in medical research?. Indian journal of psychological medicine, 35(2), 121. Guthrie, J. and D. Parker, L., 2014. The global accounting academic: what counts!.Accounting, Auditing Accountability Journal,27(1), pp.2-14. Jorissen, A., Britton, A., van Mourik, C., Hoogendoorn, M. and Alexander, D., 2017. International Financial Reporting and Analysis. Kaya, D. and Koch, M., 2015. Countries adoption of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs)early empirical evidence. Accounting and Business Research, 45(1), pp.93-120. Leuz, C. and Wysocki, P.D., 2016. The economics of disclosure and financial reporting regulation: Evidence and suggestions for future research. Journal of Accounting Research, 54(2), pp.525-622. Mulvey, G. J. (2015). Ethics in research. Bulletin of the American Meteorological Society, 96(3), 477-479. Suddaby, R., Saxton, G.D. and Gunz, S., 2015. Twittering change: The institutional work of domain change in accounting expertise.Accounting, Organizations and Society,45, pp.52-68. Valentinetti, D., Rea, M.A. and Basile, C., 2016. Differences between national reporting practices and IFRS for SMEs presentation and disclosure requirements: Evidence from Italy. International Journal of Accounting and Financial Reporting, 6(2), pp.146-174. Van Auken, H. and Carraher, S., 2013. Influences on frequency of preparation of financial statements among SMEs. Journal of Innovation Management, 1(1), pp.143-157. Vander Bauwhede, H., De Meyere, M. and Van Cauwenberge, P., 2015. Financial reporting quality and the cost of debt of SMEs. Small Business Economics, 45(1), pp.149-164.