Enhancing Financial Reporting Practices: Implementing Accounting Standards for Micro, Small, and Medium Enterprises (MSMEs)

Abstract

The Indonesian government is actively working to strengthen the national economy by promoting Micro, Small, and Medium Enterprises (MSMEs), which are commonly known as home industries. Notwithstanding government assistance, MSMEs face multiple obstacles when it comes to filing financial reports. The objective of this study is to examine the compliance of Micro, Small, and Medium Enterprises (MSMEs) with the Financial Accounting Standards for MSMEs as they prepare their financial reports. Both primary and secondary information sources were used, employing a descriptive method. Analysis procedures involve the process of reducing information, presenting facts, and forming conclusions. The findings indicate that MSMEs have not fully adhered to the mandated Entity, Micro, Small, and Medium Entity Financial Accounting Standards in their financial reporting processes. This underscores the necessity for improved compliance with standardised financial reporting methods in the MSME sector.