The effectiveness of GAPSE on Maltese businesses and its impact on the accountancy profession

Abstract

Purpose: GAPSE is a newly incorporated financial reporting framework for smaller entities. It was introduced in order to reduce the financial reporting burden placed on local SMEs when adopting IFRSs. This dissertation aimed to examine the effectiveness of GAPSE in terms of how well it has integrated into the local SME scene and the positive or negative impact it has had on the accountancy profession. Design: The study commenced with a survey which had the main purpose of achieving a take-up rate which would be applicable to the local SME population as a whole. Interviews were then carried out with GAPSE specialists, audit firms, GAPSE adopters and non-adopters, in order to accomplish the objectives of the study. Findings: The study exposed several findings, some of which included: (i) a low take-up rate; (ii) a high rate of unawareness of the existence of GAPSE; (iii) a GAPSE product which targets SMEs at the higher end of the size spectrum, with micro-entities not being greatly affected; (iv) a bigger impact on smaller rather than larger audit firms; and finally that (v) the success of GAPSE has been affected by certain inherent problems in the local accountancy profession. Conclusions and Implications: The study reaches the conclusion that the success of GAPSE must be assessed in the context of the barriers it faces. Although the take-up figure is a low one, when all the findings of the study are taken into account, it can be concluded that GAPSE has so far been relatively successful. However, the study also explains that if certain issues are resolved, the adoption of GAPSE would be enhanced.