1. © joëlle le vourc’h ESCP EUROPE ACCOUNTANCY EDUCATION for micro, small and medium size enterprises

2. © joëlle le vourc’h ESCP EUROPESUMMARY Experiences Role of accounting/accountant in MSME What profile ? profiles?

3. © joëlle le vourc’h ESCP EUROPE 3 stories 1973 Coopers and Lybrand (now PWC) 1991 Central Accounting and reporting : the World Bank 2009 Financial statements ESAA (Algerian School of Business)

4. © joëlle le vourc’h ESCP EUROPE1973 Master in Business Administration With top grades in Accountancy First supervisor evaluation: « technical knowledge : weak »

5. © joëlle le vourc’h ESCP EUROPE1991 Central Accounting and reporting : the World Bank Recruitment : March 13 Complexity of activity: 123 currencies… Year end : June 30 Financial statements: l issued: July 14 l Approved by the board: July 21…. …..Vacation: july 25

6. © joëlle le vourc’h ESCP EUROPE2009 ESAA (Algerian School of Business): 100 students in Msc and 50 in EMBA (created in 2005) Recruitment: april 2009 First and only Financial Statements (FS) presented to the board february 2009 (end of 2007 cumulated since the creation) FS as of december 2008 presented to the board: january 2010

7. © joëlle le vourc’h ESCP EUROPE The main objective of accounting is to provide financial information to help the users to take better decisions Explanation 1

8. © joëlle le vourc’h ESCP EUROPE Internal users versus External users

9. © joëlle le vourc’h ESCP EUROPE Objectives of a MSME creating and registering the business being in accordance with law developing the activity paying tax as low as possible

10. © joëlle le vourc’h ESCP EUROPE Accounting in MSME Quite often accounting not the priority and often oriented towards external users

11. © joëlle le vourc’h ESCP EUROPE Difficult for internal users to take decisions as no formal information available Accounting in MSME

12. © joëlle le vourc’h ESCP EUROPE At least 185 systems

13. © joëlle le vourc’h ESCP EUROPE Accounting systems shaped by the environment variables such as : v Legal system Code law Common law v Relationship between businesses and providers of capital v History v Political and economic ties v Size and complexity of enterprises v Culture and religion

14. © joëlle le vourc’h ESCP EUROPE Bookeeping Accounting Financial Reporting ACCOUNTING EDUCATION

15. © joëlle le vourc’h ESCP EUROPE Local rules in code laws countries Accounting principles IFRS Bookeeping Accounting Financial Reporting ACCOUNTING EDUCATION

16. © joëlle le vourc’h ESCP EUROPE Harmonization of accounting and of education As accounting is influenced by culture It cannot be changed by a decree nor a law Often taught (especially in codes countries) on « how to do » with no much « thinking »

17. © joëlle le vourc’h ESCP EUROPE Comparison of accounting text books in different countries As accounting is influenced by culture The approach of introduction to accounting very different in the textbooks Major problems when using textbooks of other countries

18. © joëlle le vourc’h ESCP EUROPE Accounting is at the end of the process. If the process is not well organized and documented It is impossible to have sound accounting information Explanation 2

19. © joëlle le vourc’h ESCP EUROPE In MSME? Quite often very informal (or non existent) at start Then necessity to comply with laws and tax …. Recruting a bookeeper or contracting with an external accountant

20. © joëlle le vourc’h ESCP EUROPE BookeeperBookeeper If the processes well organized and documented: l Limited to financial accounting on a day to day basis l No budget, no managerial information l No or low analysis l Often need of an external accountant for the closing

21. © joëlle le vourc’h ESCP EUROPE External accountant l Compliance l Knowledge of all regulations l No need to deal with paperwork l Confidence of third parties

22. © joëlle le vourc’h ESCP EUROPE CONCLUSION ACCOUNTING EDUCATION The smallest, the company…. the largest, the accountancy role The broader should be the education (management, organization, processes, IT etc…) …in general the contrary

23. © joëlle le vourc’h ESCP EUROPE CONCLUSION GENERAL MANAGEMENT EDUCATION Why not education specialized for MSME? Covering administration and finance

24. © joëlle le vourc’h ESCP EUROPE CONCLUSION GENERAL MANAGEMENT EDUCATION And « marketing » to non accountants and entrepreneurs the importance of larger role of « accountancy » for developing a sound business