Annual Congress of the European Accounting Association Seville

The way in which little GAAP has emerged in the UK suggests that policy makers have taken an arbitrary and piecemeal approach to reform, and this is reflected in the number of changes to disclosure requirements and the frequency with which qualifying size thresholds are revised. This seems surprising, since the accounting profession has spent almost a decade in developing a conceptual framework for financial reporting. The government‟s rationale for regulatory relaxation for smaller entities is based on reducing the cost burden, rather than any theoretical considerations. Moreover, reforms are being made without evidence of the needs of the directors of small companies, who are the main users of the accounts. The aim of the study is to provide generalisable evidence of the utility of the statutory financial statements of small companies to the directors. It took the form of a postal questionnaire survey of the directors of a tranche of 385 companies meeting the 1999 EC size criteria for a small company. These are the companies that are most likely to be affected by proposals to lift the UK size thresholds that qualify companies to apply littl