SME perceptions of the independent review and accounting skills on bank financing: South African perspective

Access to bank financing is regularly rated as one of the biggest obstacles to SME sustainability. With the introduction of the independent review as an alternative to the statutory audit, banks may have inevitably lost their risk assessment reassurance that audits provided. Previous research found that banks have adjusted to this situation by no longer insisting on audited financial statements. The research undertaken in this study aims to, firstly, investigate SME owner/managers' perceptions about what banks require when assessing bank loan applications; and, secondly, to gauge SME owner/manager's attitudes towards the value they perceive accounting may contribute to their sustainability. It was found from an SME perspective, that although an independent review is the current way to go, many SME owner/managers consider their own accounting skills, as the language of business, to be lacking. This could potentially have repercussions in inadvertently promoting further asymmetric financial information, and thereby limiting successes in obtaining finance.