© joëlle le vourc’h ESCP EUROPE ACCOUNTANCY EDUCATION for micro, small and medium size enterprises

© joëlle le vourc’h ESCP EUROPE

ACCOUNTANCY EDUCATION for micro, small and medium

size enterprises

ACCOUNTANCY EDUCATION for micro, small and medium

size enterprises


SUMMARYSUMMARY

Experiences

Role of accounting/accountant in MSME

What profile ? profiles?


3 stories 3 stories

1973Coopers and Lybrand (now PWC)

1991Central Accounting and reporting : the

World Bank

2009Financial statements ESAA (Algerian School

of Business)


19731973

Master in Business AdministrationWith top grades in Accountancy

First supervisor evaluation:

« technical knowledge : weak »


1991 1991

Central Accounting and reporting : the World Bank

Recruitment : March 13Complexity of activity: 123 currencies…Year end : June 30

Financial statements: issued: July 14 Approved by the board: July 21….

…..Vacation: july 25


20092009ESAA (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 board february 2009 (end of 2007 cumulated since the creation)

FS as of december 2008 presented to the board: january 2010


The main objective of accounting is to provide financial information to help the

users

to take better decisions

Explanation 1


Internal users

versus

External users


Objectives of a MSMEObjectives of a MSME

creating and registering the business

being in accordance with law

developing the activity

paying tax as low as possible


Accounting in MSME Accounting in MSME

Quite often accounting not the priority and often oriented towards

external users


Difficult for internal users to take decisions

as no formal information available

Accounting in MSME


At least 185 systemsAt least 185 systems


Accounting systems shaped by the environment

variables such as :

Legal system• Code law • Common law

Relationship between businesses and providers of capital

History Political and economic ties Size and complexity of enterprises Culture and religion


Bookeeping

Accounting

Financial Reporting

ACCOUNTING EDUCATION


Local rules in code laws countries

Accounting principles

IFRS

Bookeeping

Accounting

Financial Reporting

ACCOUNTING EDUCATION


Harmonization of accounting and of education

Harmonization of accounting and of education

As accounting is influenced by culture It cannot be changed by a decree nor a law

Often taught (especially in codes countries) on « how to do » with no much « thinking »


Comparison of accounting text books in different countries

Comparison of accounting text books in different countries

As accounting is influenced by culture

The approach of introduction to accounting very different in the textbooks

Major problems when using textbooks of other countries


Accounting is at the end of the process.

If the process is not well organized and documented

It is impossible to have sound accounting information

Explanation 2


In MSME?In MSME?

Quite often very informal (or non existent) at start

Then necessity to comply with laws and tax ….

Recruting a bookeeper or contracting with an external accountant


BookeeperBookeeper

If the processes well organized and documented:

Limited to financial accounting on a day to day basis

No budget, no managerial information

No or low analysis

Often need of an external accountant for the closing


External accountantExternal accountant

Compliance

Knowledge of all regulations

No need to deal with paperwork

Confidence of third parties


CONCLUSIONACCOUNTING EDUCATION

CONCLUSIONACCOUNTING EDUCATION

The smallest, the company….

the largest, the accountancy role

The broader should be the education(management, organization, processes, IT

etc…)

…in general the contrary


CONCLUSIONGENERAL MANAGEMENT EDUCATION


Why not education specialized for MSME?

Covering administration and finance




And « marketing » to non accountants and entrepreneurs the importance of

larger role of « accountancy »

for developing a sound business

Documents

© joëlle le vourc’h ESCP EUROPE ACCOUNTANCY EDUCATION for micro, small and medium size enterprises