Scholarly record

IMPACT ASSESSMENT OF SIMPLIFICATIONS IN THE REPORTING OF POLISH SMALL AND MICRO ENTITIES ON THEIR ENVIRONMENT-S INFORMATION NEEDS IN THE LIGHT OF LEGAL REGULATIONS AND CONDUCTED SURVEYS

Katarzyna Tkocz-Wolny

Abstract

Background: An important role in the economy of every country is played by entities operating on a small scale, i.e. small and micro entities. Some of them are obliged to keep accounting books, and thus to prepare financial statements. The preparation of financial statements cannot be too burdensome for micro entities, as they have limited financial and organizational capabilities. It is therefore important that the costs of preparing financial statements are balanced with the benefits derived from the use of the information presented in them. This can be achieved by limiting reporting obligations and applying simplifications to obligatory financial statements under legal regulations. On the other hand, financial statements are the main source of information for a wide range of external recipients. They are particularly important for investors, banks and other capital providers or tax authorities. Financial information also raises the interest of other entities of economic environment and competition operating on the market. The scope of financial statements of Polish small and micro entities has been adjusted to their size. However, the question remains whether, despite the simplifications introduced by the legislature, are they in practice understood and used by authorized entities, and does the form of simplified reports satisfy the information needs of the entities? environment? The paper aims to assess how the simplifications introduced by the Polish legislature for selected small and micro entities regarding financial statements affected the actual scope of their financial statements. Methods: The research team adopted the method of meta-analysis of literature as well as national and international legal acts, and conducted surveys. Results: The authors presented the scope of mandatory information disclosed in the financial statements by Polish micro entities. They also analysed and assessed the information capacity of the reports from the point of stakeholders? needs of surveyed entities against the permissible simplifications concerning financial statements. Conclusions: The authors positively assess simplifications for the smallest entities regarding financial statements. These changes are certainly positive for entities, but a question arises about the recipients of the reports and whether smaller scope of disclosures in the financial statements is certainly a positive change?

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DOI resolver: doi.org/10.5593/sgem2019/5.3/s21.048

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