n Meditari : Research Journal of the School of Accounting Sciences - An examination of the due process in South Africa which led to the adoption of the draft International Financial Reporting Standard for Small and Medium-sized Entities

Volume 18, Issue 2
  • ISSN : 1022-2529


Differential reporting was introduced in South Africa with the enactment of the Corporate Laws Amendment Act 24 2006. Since it was urgent that the standard-setters provide limited interest companies with interim guidance as to the preparation and presentation of financial statements, South Africa adopted the International Accounting Standards Board's International Financial Reporting Standard for Small and Medium-sized Entities in its draft form.

This study looks at the development of accounting standards for small and medium-sized entities in South Africa. It also examines analyses of prior research on differential reporting and the due process of the International Accounting Standards Board on this topic, as well as the due process of the South African standard-setter. The paper provides a contextual analysis of the unique reporting environment of South African companies and concludes that adopting the draft IFRS for SMEs may have been the best option for the standard-setting body in providing relief for limited interest companies from the cost of complying with the International Financial Reporting Standards while still enabling auditors to express an opinion on the financial statements.

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