International Financial Reporting Standards (IFRS) into the World of Small and Medium Enterprises (SMES) - A Study pertaining to Australia and India

The Small and Medium Enterprises (SMEs) comprising of manufacturing, infrastructure, service industry, food processing, packaging, chemicals, and IT, has emerged as the most vibrant and dynamic engine of growth of Indian economy over the past few decades. The number of SMEs are estimated to be at 42.50 million, registered & unregistered together. A staggering 95% of the total industrial units in the country employs about 106 million, 40% of India’s workforce, next only to the agricultural sector and produces more than 6000 products. SMEs constitute 45% of the total Indian manufacturing output and 40% of the total exports. In India SME's contribution to GDP is presently 17% which is likely to go up to 22% by 2020. Further SMEs in India employs over 81 million people in 36 million units, and is estimated to create one million jobs every year. Despite such laudable contribution, SME sector does not get requisite financial aid from concerned Government departments, Banking sector, financial institutions and corporate sector. SME sector is derelicted by private banks and financial institutions, while public sector banks meet mandatory lending requirements. One of the reasons for this state of affairs is SMEs bring-out financial statements that are useful only for owner-managers/tax authorities/government authorities. Financial statements thus produced are neither comparable nor carry enough credibility. Only very little attention is given by the policy makers, academicians and researchers on this connection in India as well as in the world. The IFRS for SMEs was developed to address the reporting needs of SMEs worldwide. Likewise when it comes to the integration of these harmonized accounting standards in curriculum in India, no serious efforts have been found. But as IFRS is the future reporting standards it should be integrated to the curriculum at the earliest, and we have to make aware of the concerned authorities about this to reap the benefits without fail. In this context, the proposed study aims at the aforementioned objectives, where the vigorous attention is required from the academicians, researchers and policy makers.