Empirical Evidence Examining the Accounting Information Systems and Accounting Reports of Small and Micro Business in Australia

This paper examines the nature and type of accounting information system kept by small and micro businesses in Australia. Small and micro businesses are under no legal obligation to produce accounting reports, but must comply with taxation provisions. The present study reports on the findings from 121 small and micro businesses, and results show that micro businesses rely more heavily on manual methods, while small businesses are more likely to use computerized systems. In terms of accounting reports, results show the profit and loss statement is produced by 65% of micro businesses and 80% of small businesses, yet significantly more small businesses produce a balance sheet. The finding that not all small and micro businesses produce accounting reports has implications for owners and the accounting profession.