Economic effect to poor accounting practice and affect the growth and solvency of the business in pandemic era

Abstract

This paper aims to know about a great number of firms in Indonesia that help the advancement and development of a country's economy. In 2017, there were 33,577 companies in medium large industries, not considering micro, small, and medium enterprises, which also exist to support Indonesia's development. Large and registered firms normally have a recording system that demonstrates the company's income or growth, but difficulties with the recording process are common, especially in organizations that do not become public or can be referred to as family businesses, indicating the presence of poor accounting. The methods of this research are qualitative methods. The result of this research is the practices such as equating cashflow to profits, ignoring small bills and payments, combining personal and business finances, delaying tax payment, failing to track labor, not keeping financial documents, not hiring professionals, and not using appropriate accounting software are all examples of poor accounting practices. Accounting is a tool that used to deliver information to parties in need, such as regulators and the government in taxing, creditors in deciding whether or not to provide loans, and investors in providing money to help a company grow.