Accounting and Financial Reporting Practices of SMEs: Bangladesh Perspective

Abstract

This article presents an empirical investigation of accounting and financial reporting practices of SMEs of Bangladesh. The primary data were collected from the total number of 100 Accountants/ managers using a structured questionnaire. This study reveals that 44% of SMEs keep accounting records which are mainly Profit and loss Account, Bank Statement, Balance Sheet, Cash Flow statement etc respectively and the main purpose of keeping records is to track the receivables and payables, to support in accessing credit/finance and to evaluate performance.56% of SMEs do not keep accounting records because they perceive that it is difficult to maintain the system as well as unnecessary even It makes the enterprise to pay more tax. However, they also provide suggestion to improve the accounting practices by Educate managers/owners on the need to keep accounting records, Motivate managers/owners to adopt accounting records, strengthen monitoring and supervision by the Government. The firms which maintain Accounting and financial records have an effect on the financial performance (ROI). Therefore, in order to improve the accounting and financial practices of SMEs, the concerned authority needs to implement the suggestions put forward by the respondents without any further delay.