The perception on GAPSE of Maltese sole practitioners : a study

Abstract

Recently, a critical issue was about whether financial reporting standards should be equally applicable by all companies, irrespective of their size. Global standards are usually criticized, by small entities in particular, because they seem very costly and burdensome. Thus, like what happened internationally in developing FRSSE and IFRS SME, the Accountancy Board and the MIA came up with GAPSE to replace IFRSs, given that the companies in question satisfy the eligibility criteria. However, this has mainly focused on reducing burdens from small entities without considering the effect and opinion of sole practitioners. This study's objective, being to analyse sole practitioners' perception towards GAPSE, which was approved by the Cabinet of Ministers on 2nd February 2009, was achieved through a survey questionnaire. Generally, sole practitioners agreed with this development and believe that it will eventually reduce burdens for smaller entities. However, a significant part of practitioners are of the opinion that GAPSE will then impose burdens on auditors themselves. Their agreement with GAPSE was such that only few stated that most probably they will reject clients preparing GAPSE financial statements. In addition, a considerable number of sole practitioners stated that a similar development should happen with regards to auditing, in that a simplified auditing standard should be developed.