Accounting standard for SMEs poorly constructed

Tax campaigner Richard Murphy launched a stinging attack on draft regulation on accounting standards for small and medium companies at the 23rd annual UN meeting of accounting standards experts this week.

Murphy attended the meeting to discuss issues on corporate responsibility and corporate governance on behalf of the Publish What You Pay charities coalition.

He said the draft, likely to be in force by August 2008, proposes a standard that is hopelessly inappropriate for most UK small businesses.

'It assumes the reporting requirements of all companies are the same, whatever their size. The result is a standard that will be over 200 pages long.

'Worse, it is not designed for the needs of a small business… simply cut down version of the standards used by larger companies,' said Murphy.

In addition, Murphy criticises the standard for being created by a team dominated by the Big Four, who assume, he says that the normal SME has at least 50 employees.

'That represents well under 10% of SMEs, showing how absurd the approach is,' said Murphy.

For more go on Murphy's review of the meeting, click here.