Accounting Application for Small and Medium Enterprises and Compatibility with EMKM Standards: A Case Study in Jakarta, Indonesia

Abstract

In Indonesia, micro, small, and medium enterprises contribute 60% to domestic economic growth and employ approximately 90% of the country’s productive workforce. These companies also serve as a buffer for the national economy in a crisis. The Indonesian Institute of Accountants asserted that the majority of micro, small, and medium enterprises experience difficulty in accessing assistance from banks and other funding sources. This difficulty for micro, small, and medium enterprise financial reports, whose completion is part of the standards implemented in the financial industry. This research explored the idea of accomplishing financial reports on the basis of EMKM (Entity or Micro, Small and Medium) standards in Jakarta. Primary data were collected using a descriptive quantitative questionnaire. The results showed that the application of accounting in several districts of Jakarta deviated from the Financial Accounting Standards of Indonesia. This deviation was due to the lack of knowledge and training among micro, small, and medium enterprise owners. Therefore, this research has a contribution for researchers, entrepreneurs, academics, as well as other interested parties.