Canada has introduced a set of DIFFREP standards for SMEs. Rennie and Senkow (2009) analysed the response letters to the Canadian DIFFREP Exposure Draft (ED). Their study also produced evidence that lenders are the main users of SME financial accounts.
In their study the response regarding implementation of a special set of DIFFREP reporting standards for SMEs was overall positive. There was only one response from a “user” of SME financial accounts. He was classed as an investor. That respondent disapproved of special accounting standards for SMEs because it reduced comparability.
This single response suggests that the attempts of empirical research to identify user needs may be failing to recognise true user needs, if research is based on company directors’ and accountants’ opinions of DIFFREP and SME reporting, the overall response being favourable to DIFFREP. Suggesting that more investigation of actual users is needed.
Maingot and Zeghal (2006) created a questionnaire survey on SME reporting in Canada. Their questionnaire was directed toward SME account preparers (i.e., accountants). The results agree with other surveys that identify the main SME financial report users as
- Banks/Lenders
- Tax authorities, and
- Internal Management.
Extrapolating from their questionnaire responses, they conclude that users of SME financial reports prefer one set of GAAP with exemptions for SMEs because full GAAP is: