8/4/2019 Audited Accounts Too Burdensome for MSMEs-FINAL[1] Edited

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The MSME Alliance is an umbrella organization comprising 35 Business Associations and other organizations representing more than 300,000

micro, small and medium sized enterprises in Jamaica.

NEWS RELEASE

DATELINE: January 31, 2011

Why insist on Audited Accounts for Small Business?

Recently, a member of the Jamaica Wood Products and Furniture Association tried to renew a National ContractsCommission (NCC) certificate required to access school furniture contracts, now a lifeline for small furnitureproducers in this sluggish economy. The furniture producer was surprised to hear that unaudited accounts, whichhave been accepted in the past, are no longer being accepted. The furniture producer and her family are now facinga real dilemma because she just cannot afford to pay the accounting and audit fees which can run in excess of

$100,000.00. Without any collateral, she cannot afford to pay the high interest rates (typically 30-50% per annum)that Microfinancing institutions charge for a loan. If she has collateral, she may not qualify for a loan to pay theauditor so (since?) some commercial banks also require audited accounts. What a dilemma!!!

Mortimer McPherson, President of the Jamaica Wood Products and Furniture Association (JaWFA), is outraged andsees this as “another serious blow to the furniture industry,” and another demonstration of a government out of thecontrol of the Jamaican people. Last year June, a project to assist the furniture producers to attain industry standardwas pulled without discussion with the JaWFA and reassigned to JBDC. To date the JaWFA, that was an integrapart of the project, has received no formal information about the project under the new arrangement despite severalefforts to meet with Minister Samuda to discuss the status of the project.

Dion Chance, President of the National Council of Taxi Operators, is also displeased with the requirement by theTransport Authority that Taxi Associations, typically non-profit organizations, submit audited accounts.

The Seventh Schedule (s.4) of the Companies Act (2004) offers small businesses an exception in providing auditedaccounts that are required under the Act. Small businesses, however, are required to “present accounts inaccordance with accounting principles that are appropriate to its circumstances …” (s.5). Our legislators in theiwisdom have provided this exception, why should the NCC and Transport Authority not act accordingly? 

The MSME Alliance supports the use of appropriate accounting standards as provided in the Companies Act forsmall businesses to satisfy all statutory and other organisations’ risk requirements. Where higher standards, such asaudited accounts, are required, we insist that a “period of adjustment” must be granted with adequateresources provided to assist MSMEs to attain these higher standards.

In the absence of such measures, the requirement of audited accounts will negatively impactdestroy the viability omany MSMEs that are struggling to survive in the context of low consumer demand, high JPS bills and othersburdensome realities facing MSMEs today. Yet another case of onerous and arbitrary abuse of raw power! 

- END -

Contact: 

Professor Rosalea Hamilton, President, The MSME Alliance Tel: 876-881-9269 / 833-2545

Mortimer McPherson, President, Jamaica Wood Products & Furniture Association Tel: 876-474-1629 

Dion Chance, President, National Council for Taxi Operators Tel: 876-368-8774

The MSME Alliancec/o Suite 16, Technology Innovation Centre, University of Technology, Jamaica

237 Old Hope Rd., Kingston 6

Tel: 977-6232; 289-9807 Telefax: 754-9041

Email: msmealliance@yahoo.com, msmealliance@gmail.com 

8/4/2019 Audited Accounts Too Burdensome for MSMEs-FINAL[1] Edited

http://slidepdf.com/reader/full/audited-accounts-too-burdensome-for-msmes-final1-edited 2/2

The MSME Alliance is an umbrella organization comprising 35 Business Associations and other organizations representing more than 300,000

micro, small and medium sized enterprises in Jamaica.