Post on 13-Jan-2016
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ACCOUNTANCY EDUCATION for micro, small and medium
size enterprises
ACCOUNTANCY EDUCATION for micro, small and medium
size enterprises
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SUMMARYSUMMARY
Experiences
Role of accounting/accountant in MSME
What profile ? profiles?
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3 stories 3 stories
1973Coopers and Lybrand (now PWC)
1991Central Accounting and reporting : the
World Bank
2009Financial statements ESAA (Algerian School
of Business)
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19731973
Master in Business AdministrationWith top grades in Accountancy
First supervisor evaluation:
« technical knowledge : weak »
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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
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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
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The main objective of accounting is to provide financial information to help the
users
to take better decisions
Explanation 1
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Internal users
versus
External users
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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
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Accounting in MSME Accounting in MSME
Quite often accounting not the priority and often oriented towards
external users
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Difficult for internal users to take decisions
as no formal information available
Accounting in MSME
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At least 185 systemsAt least 185 systems
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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
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Bookeeping
Accounting
Financial Reporting
ACCOUNTING EDUCATION
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Local rules in code laws countries
Accounting principles
IFRS
Bookeeping
Accounting
Financial Reporting
ACCOUNTING EDUCATION
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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 »
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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
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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
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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
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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
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External accountantExternal accountant
Compliance
Knowledge of all regulations
No need to deal with paperwork
Confidence of third parties
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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
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CONCLUSIONGENERAL MANAGEMENT EDUCATION
CONCLUSIONGENERAL MANAGEMENT EDUCATION
Why not education specialized for MSME?
Covering administration and finance
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CONCLUSIONGENERAL MANAGEMENT EDUCATION
CONCLUSIONGENERAL MANAGEMENT EDUCATION
And « marketing » to non accountants and entrepreneurs the importance of
larger role of « accountancy »
for developing a sound business