Adoption of Sustainable Accounting Practices Among Croatian SME’s

Abstract

Small and medium-sized enterprises (SMEs) are of great importance to the Croatian economy. As recently as 2015, 99.7 percent of total registered companies in Croatia were SMEs, accounting for 54 percent of total revenues and collectively exhorting great impact on the society, the national economy, and the environment. Regarding socio-economic representation, they are the key players in achieving sustainability. Considering the fact that sustainability accounting plays a pivotal role in every economy, it is essential to understand how smaller business entities are taking actions on adopting sustainable practices and their corresponding sustainable accounting tasks. It is therefore the objective of this paper to analyze the current awareness, needs, and existing approach to sustainable accounting and reporting practices of SMEs in Croatia and identify the main knowledge gaps between the current and the optimal situation. For the purposes of this analysis, a survey was conducted on a sample of 42 respondents between February and March of 2018. The results show that the level of awareness among SMEs regarding socially responsible reporting is particularly low in Croatia, mostly due to the lack of SME’s field-related knowledge, skills, and experience, as well as the unfamiliarity with reporting advantages. Finally, this paper provides an overview of the lack of knowledge in order to identify the competence and skills needed to successfully implement non-financial reporting among small and medium enterprises. Keywords: sustainable accounting, SMEs, survey, Croatia