I've been dedicating some time to small business accounting on this blog of late, and since I intend to do so for some time yet I thought it worth justify why I think it important to do so.

First of all, without reliable accounts, prepared on a consistent basis and in accordance with an agreed conceptual framework for reporting there will be misreporting of income for taxation purposes by small businesses, irrespective of whatever attempts some such businesses make of their own volition to misrepresent their results. I think the former important, and the latter less likely if that agreed framework exists.

Secondly, I am firmly of the view that no accounting data has relevance for any purpose, be it for management, owners, stakeholders (including taxation authorities) or other regulators unless it is comparable. Many people know that the ultimate answer to the ultimate question is reported to be 42, the only problem being that no one knows what the question is, which does of course prove that no figure is relevant without a context in which it might be interpreted. So it is with accounts. Relevant standards provide the context in which accounting data makes greater sense.

Thirdly, accounting data is important; so important in fact that the Tax Justice Network would like all limited liability entities in all countries in the world to place their annual report and accounts on public file for open inspection by anyone who wishes to see them. We believe that this is an essential feature of the transparency required to ensure open and fair competition that increases the lot of human society, and which is always harmed by secrecy. It is for the same reason that we also favour the approach adopted in some Scandinavian countries of also placing all tax returns on public record.

Finally, we think that if consistent standards are adopted there is greater prospect of professional service providers working to those standards and as result meeting the needs of their clients in the SME community.

In summary, appropriate accounting standards can improve the sum of human well-being. That's why I think they're important.