Nikolina Dečman

The influence of accounting regulation simplification on the financial reporting of micro entities – the case of Croatia

The specifics of the business of micro entities highlight, in particular, the complexity of the problem of accounting regulations for this segment of the economy. The paper starts from the basic research question of whether the simplification of accounting regulations is necessary or not, particularly for those micro entities where ownership and management functions are integrated into the same person. In order to achieve the research objectives, the effects of accounting regulations simplification on decision-making processes in micro entities were tested. Empirical research has confirmed that the simplification of accounting regulation is justified, because it would have effects on the cost reduction, while the information quality base will not be diminished.

Guidelines and Recommendations for Improving the Micro Entities Model of Financial Reporting

Abstract In most countries, micro entities have a predominant share in the total number of registered entities. Administrative relief for micro entities is lately one of the most common requirements regarding their financial reporting practices. This subject is particularly actualized with recent amendments to new accounting directive (2013/34/EU). In this context, the creation of a more appropriate financial reporting model, customized for micro entities, represents a current scientific and professional challenge. Comparing the existing financial reporting solutions in the EU and Croatia it has been noticed that for now in Croatia there is no space for simplifying regulations even though the results of empirical research confirm the need for simplification of financial reporting model for micro entities.