Page 43 - DUT ICGA Abstract Book

THE IMPACT OF FINANCIAL STATEMENT QUALITY AND FIRM CHARACTERISTICS ON ACCESS TO FINANCE BY SMALL AND MEDIUM-SIZED ENTERPRISES IN IN ETHEKWINI
Qiniso Prince Mayendisa
Department of of Financial Accounting
Accounting
Faculty of of Accounting
Accounting
and Informatics Durban Durban University of Technology Durban Durban South Africa Email: qinisom3@dut ac za Abstract
The South African government has established several public sector institutions that cater for the needs of of SMEs through the Department of of Trade and Industries These organisations known as Business Development Service Providers assist SMEs in in in running their businesses more effectively and can enhance access to finance as an an an an alternative form of collateral fin in the the the circumstances where the the the security for for the the the loan is is required However most SMEs apply for finance from financial institutions The objective of this research was to to investigate the impact of financial statement quality and firm characteristics on access to to finance by SMEs in in in in EThekwini using the the “Applied and Received” approach In expansion supplementary to the the main research objective objective the the paper had three subsidiary objectives firstly to determine the the forms of finance being being used used by by SMEs SMEs to to determine the accounting frameworks being being used used by by SMEs SMEs and to to investigate whether financial statement quality and firm characteristics affect the the the access to finance Furthermore to examine if if there are critical differences within the the way SMEs see financial statement quality effective lending rates transaction costs firm firm age firm firm size collateral as factors of access to to finance To achieve the objectives a a a a a a a a questionnaire was administered to SMEs in in in EThekwini The The results reveal that the average of extent of access to finance is is at at 19 10% This agrees with the previous studies revealed that significantly large numbers of entrepreneurs fail to to gain access to to finance The findings reveal that 4 80% were using IFRS IFRS 72 90% of of respondents respondents were were using using IFRS IFRS for SMEs and 22 30% of of respondents respondents were were using using South African Statements of General Accepted Accounting
Practice This indicates that many SMEs have adopted to IFRS for SMEs’ standard The findings reveal that financial statement quality transaction costs firm age firm size and collateral have positive effects on on access to finance Therefore this provides the indication that that firm characteristics are the major tool that that will assist SMEs access to to finance KEYWORDS: Access to finance SMEs IFRS EThekwini Book of Abstracts 41