The relevance of international financial reporting standards for small and medium sized entities (IFRS for SMEs) in Swaziland

The purpose of this study is to explore the relevance of imposing IFRS for SMEs in Swaziland so as to determine if IFRS for SMEs can be the answer to better reporting by local SMEs. There has been a growing need for different reporting standards for small firms and big firms over the years due to the unique challenges and attributes they face especially in the area of financial reporting as well as the increasingly significant roles they play in the economies of most countries. SMEs all over the world need a financial accounting and reporting framework which would be simple, understandable and user-friendly. This research is based on a statistical analysis of questionnaires completed by accountants from SMEs in Swaziland as well as other stakeholders who have a direct or indirect interest in the financial statements of SMEs. These stakeholders included audit firms and the financial institutions. The population consisted of 600 hundred SMEs which are along the Manzini-Matsapha-Mbabane corridor. The sampling rate of 10% was applied across each industry to come-up with a sample of 60 SMEs. Furthermore, a 100% sampling rate on the other stakeholders was applied. These were 9 financial Institutions and 8 audit firms. The findings from the study revealed that SMEs in Swaziland are having challenges with the current reporting framework but to some extent, the framework is suitable. However, it has also been established in the study that the SMEs are not aware of IFRS for SMEs. Therefore, the accounting profession, particularly the Swaziland Institute of Accountants (SIA) has a big role to play in training Auditors and Accountants in the country. Overall, IFRS for SMEs is applicable in Swaziland.