The Effect of Adopting International Financial Reporting Standards of Small and Medium Enterprises in Mongolia

다국어 초록 (Multilingual Abstract)

This study examines that the effect of the adoption of International Financial Reporting Standards (IFRS) by Small and Medium Enterprises (SMEs) in Mongolia in the reaction of the respondents of SMEs. The study applied to characteristic measures of accounting quality; faithful representation, comparability, timeliness, understandability and value relevance to find out whether the adoption of IFRS has led to improvements in accounting reports quality of SMEs in Mongolia.
Our data shows that the adoption of IFRS for SMEs is 41% of all SMEs. The feelings that IFRS is bad and stressful are highest percentage between respondents. The highest percentage concerning the difficulties that were encountered at the first time adoption is 72% which says that IFRS has training difficulty and high cost. Our result is consistent with IFRS for the SMEs are more costly and any training can’t meet real needs of accountants (Bolormaa B, 2014). The outcome for the qualitative characteristics: understandability, timeliness, faithful representation and relevance shows less average results that are related to the low quality of financial reporting for SMEs (ROSC, 2008). Also the results shows that the mean difference between SMEs adopted IFRS for SMEs and SMEs not adopted is significantly for understandability, comparability, timeliness, and relevance and insignificantly for faithful representation for SMEs. At last the result shows that IFRS adoption improves the quality financial statement which is consistent with the “benefits of IFRS adoption”.
Our findings suppose the results of study of Bolormaa B (2014) to consider for systematic policy with the state participation, adapting the legal framework and practical implementation.

목차 (Table of Contents)

• 1. Introduction
• 2. Empirical Literature Review
• 3. The Quality of Financial Reporting: the Qualitative Characteristics
• 4. Financial Reporting of SMEs of Mongolia
• 5. Data Analysis
• 6. Summary