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ACCOUNTANCY EDUCATION for micro, small and medium size enterprises

ACCOUNTANCY EDUCATION for micro, small and medium size enterprises. SUMMARY. Experiences Role of accounting / accountant in MSME What profile ? profile s ?. 3 stories . 1973 Coopers and Lybrand ( now PWC) 1991 Central Accounting and reporting : the World Bank 2009

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ACCOUNTANCY EDUCATION for micro, small and medium size enterprises

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  1. ACCOUNTANCY EDUCATION for micro, small and medium size enterprises

  2. SUMMARY Experiences Role of accounting/accountant in MSME What profile ? profiles?

  3. 3 stories 1973 Coopers and Lybrand (now PWC) 1991 Central Accounting and reporting : the World Bank 2009 Financial statements ESAA (Algerian School of Business)

  4. 1973 Master in Business Administration With top grades in Accountancy First supervisorevaluation: « technicalknowledge : weak »

  5. 1991 Central Accounting and reporting : the World Bank Recruitment : March 13 Complexity of activity: 123 currencies… Year end : June 30 Financial statements: issued: July 14 Approved by the board: July 21…. …..Vacation: july 25

  6. 2009 ESAA (Algerian School of Business): 100 students in Msc and 50 in EMBA (created in 2005) Recruitment: april 2009 First and only Financial Statements (FS) presented to the boardfebruary 2009 (end of 2007 cumulatedsince the creation) FS as of december 2008 presented to the board: january 2010

  7. Explanation 1 The main objective of accountingis to providefinancial information to help the users to takebetterdecisions

  8. Internalusers versus Externalusers

  9. Objectives of a MSME

  10. Accounting in MSME Quiteoftenaccounting not the priority and oftenorientedtowards externalusers

  11. Accounting in MSME Difficult for internalusers to takedecisions as no formal informationavailable

  12. At least 185 systems

  13. Accountingsystemsshaped by the environment variables such as : Legal system Code law Common law Relationship between businesses and providers of capital History Political and economicties Size and complexityof enterprises Culture and religion

  14. ACCOUNTING EDUCATION Bookeeping Accounting Financial Reporting

  15. ACCOUNTING EDUCATION Local rules in code laws countries Accountingprinciples IFRS Bookeeping Accounting Financial Reporting

  16. Harmonization of accounting and of education As accountingisinfluenced by culture It cannotbechanged by a decreenor a law Oftentaught (especially in codes countries) on « how to do » with no much « thinking »

  17. Comparison of accountingtext books in different countries As accountingisinfluenced by culture The approach of introduction to accountingverydifferentin the textbooks Major problemswhenusingtextbooks of other countries

  18. Accountingisat the end of the process. If the processis not wellorganized and documented It is impossible to have soundaccounting information Explanation 2

  19. In MSME? Quiteoftenveryinformal (or non existent) atstart Thennecessity to complywithlaws and tax …. Recruting a bookeeper or contractingwith an externalaccountant

  20. Bookeeper If the processeswellorganized and documented: • Limited to financialaccounting on a day to day basis • No budget, no managerial information • No or lowanalysis • Oftenneed of an externalaccountant for the closing

  21. Externalaccountant • Compliance • Knowledge of all regulations • No need to deal withpaperwork • Confidence of third parties

  22. CONCLUSIONACCOUNTING EDUCATION The smallest, the company…. the largest, the accountancyrole The broadershouldbe the education (management, organization, processes, IT etc…) …in general the contrary

  23. CONCLUSIONGENERAL MANAGEMENT EDUCATION Why not educationspecialized for MSME? Covering administration and finance

  24. CONCLUSIONGENERAL MANAGEMENT EDUCATION And « marketing » to non accountants and entrepreneurs the importance of largerrole of « accountancy » for developing a sound business

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