The Behavior of Indonesian SMEs in Accepting Financial Accounting Standards without Public Accountability
Abstract: Having important roles in a country's economy, SMEs still encounter financial problems. Since SMEs' financial reports are not harmonized with the Financial Accounting Standards without Public Accountability (SAK-ETAP), SMEs have difficulty in accessing loans from financial institutions. The objective of study is to understand the behavior of SMEs in accepting new accounting standards. This study also attempts to test the inclusion of government support in the TAM. By employing extended TAM, the study includes perceived usefulness (PU), perceived ease of use (PEU), subjective norm, and intention to use as endogenous variables. Government support, perceived risk, and education are exogenous variables. The intention to use SAK-ETAP mainly depends on government support and SME association. High commitment of related parties is required to disseminate SAK-ETAP to SMEs. Keywords: TAM, Financial Accounting Standards without Public Accountability, SAK-ETAP, SMEs INTRODUCTION The roles of Small and Medium Enterprises (SMEs) are important in the global economy both in developed and developing countries (Wright and Etemad, 2001). For example, SMEs have an important role in improving the economy of China albeit their problems in accessing loan from financial institution (Okura, 2009). Likewise, SMEs also dominate the Indonesian economy as indicated by their contributions on GDP. In 2006 the number of SMEs in Indonesia was more than 99.9% of all enterprises and contributed more than 53.3% of GDP (Tambunan, 2011). Moreover, SMEs have pivotal roles in increasing a country's economic growth (Supriyati and Wulanditya, 2012) and absorbing more than 96% of the workforce in Indonesia (Tambunan, 2011). Being a major player in Indonesian Economy, SMEs are still facing significant problems in finance, marketing, and human resources (Suliyanto, Suroso, and Jati, 2013; Tambunan, 2011). These problems could arise sequentially meaning that limited human resource capacity could affect both finance and marketing problems. In this case, the roles of training and education are critical to improve quality of human resource (Abdullah, Uli, and Ismail, 2009). Even though standardized financial reports using Financial Accounting Standards without Public Accountability (SAK-ETAP) should have been implemented in January 2010, SMEs still experience difficulties to prepare financial reports based on these standards. Inappropriate infrastructures of accounting (Haryani, 2012), human resources and education (Supriyati and Wulanditya, 2012) hamper the process of preparing standardized financial reports. On the other hand, completing financial reports is an important requirement for SMEs to access loans from financial institutions. Therefore the study aims at understanding the behavior of SMEs in accepting SAK-ETAP. Accepting a new technology or an innovation is closely related to manager's or owner's decision. Nevertheless, decision made by an individual is a result of complicated process (Suartana, 2010). Understanding the behavior of SMEs in accepting SAK-ETAP is strategically important as a basis for building capacity of SMEs in Indonesia. Accounting is an applied science that is classified as a soft technology (Suwardjono, 2005). Therefore, to understand the behavior of SMEs in accepting SAK-ETAP, the study employs the Technology Acceptance Model (TAM) developed by Davis (1989) as an underpinning theory. The original model consists of three variables i.e. perceived usefulness (PU), perceived ease of use (PEU), and intention to use. Other studies found that subjective norm is an important variable affecting intention to use (Ajzen, 1991; Chiou, 1998; Teo, 2012; Yang, 2009). TAM contends that PU, PEU, and subjective norm are exogenous variables that affect behavioral intention to use. This study uses an extended TAM by including some antecedent variables. For example, Supriyati and Wulanditya (2012) found that business practitioners' education could influence the adoption of SAK-ETAP. …