Determinants in Accounting Regulation for Micro-Entities-a Romanian Perspective

AbstractAt the European level the European Commission is aware that the smallest firms face the greatest costs complying with regulation, including accounting regulation. Compliance with legislation stemming from the regional, national or European level will always be more burdensome for the smaller enterprise. The process of reduction of accounting and financial reporting requirements for micro-entities in order to reduce unnecessary administrative burdens is presented in this paper. We outline the concept of “Micro-entity” and how the reduction of excessive and unnecessary administrative burdens was analysed at European level. The Romanian case is presented further. The evolution of Romanian companies in the last years will present the economic reality of our country. The modification of European accounting directive can and will affect all accounting regulations through European countries. Considering the fact that more then 92% of the Romanian companies could be classified as “Micro-Entities” we believe that a differential accounting reporting will be the future in order to comply with the EU's strategy for the coming decade