The Economic Consequences Of The Small Business Accounting Standards

As it is the fact that fish need water, various business activities cannot be separated from the accounting work in the society. It is prerequisite for the normal functioning of the social economy. However, accounting standard is the guarantee for the accounting work working in an orderly manner. Accountant could provide reliable accounting information to the public with accounting standard as theoretical basis. SMEs play a crucial role in national economy in our country. According to incomplete statistics, about97%of registered enterprises are SMEs. Their total assets approximated42%, accounting for more than half of GDP, and the total exports also reached62%, which fully reflects that SMEs play a significant role in economic management. Therefore, formulating and implementing accounting standards for SMEs is the requirement of development model of market economy. Moreover, a thorough accounting standard for SMEs have positive impact on the order of market economy and development of economy.The particularity of small businesses determines that this type of subject will usually face difficulties when they apply general accounting standards. Many countries and related international organizations have been or are setting accounting standards for small businesses. In November2011, the Ministry of Finance issued the "small business accounting standards", which was required to begin to implement on January1,2013. It is thought to be an important step to improve the system of accounting standards of enterprise in our country.According to the nature of the accounting standards, the accounting profession is divided into two factions:the academic faction and the practice faction. Accounting standard cannot be influenced by the external factors in the view of technology. It is considered to be a kind of technical specification, because it is in pursuit of perfect. Although accounting information is only made up by simple figure and text, it is indeed a technical specification. Moreover, accounting information reflects the intricate relationship of interest among those interest groups, and accounting information is generally hidden in different accounting standards. Thus the distribution of the interest among each interest group will be influenced by the accounting standards. Economic consequence, as the characteristic of accounting standard, could affect the economic interests of different subjects. The economic consequence brought by the implementation of new accounting standards changes with the development of the social economy. Taking the particularity of SMEs into consideration, studying the economic consequences of accounting standards of SMEs’will have far-reaching significance and value on long-term development of our market economy.The paper is divided into four parts. First, I will introduce the situation of the small business accounting standards and the studying of economic consequences at home and abroad. Second section will introduce some related concepts and theories about the problem of "economic consequences". I will analyze the economic consequences and their causes during process of the formulation and implementation of small business accounting standards. Finally, I will draw the conclusion by analyzing the economic consequences of small business accounting standards.