The influence of harmonization of IFRS on financial performance of small and medium enterprises

Accounting and financial reporting are getting more and more globalized because enterprises are becoming more and more multinational, and the volume of trade and investments which is performed among enterprises from different countries is increasing. These factors strengthen the need for quality financial reports which will be internationally comparable and consistent. Comparability and consistency are achieved through application of international standards of financial reporting which are becoming a reliable base for making business decisions and ensure unhindered functioning of financial markets. Because of participation of small and medium enterprises on international market, which is getting bigger and bigger, the need to harmonize financial reporting for this sector emerged. Result of harmonization should be improvement of business performance of these enterprises and easier inclusion on developed international market.