Financial Reporting for Micro Small and Medium Enterprises Towards Industrial Revolution Era 4.0
Financial reporting is a very important process that must be carried out by every business, including micro, small and medium enterprises (MSMEs), so that with having the information of financial statements, the owner and stakeholders can monitor and evaluate their business performance and making decisions more accurately in order to increase its competitive advantage and its business sustainability. Facing the era of digitalization in the indu trial revolution era 4.0 and using the internet, or internet of things (IOT), in running all activities including businesses and financial reporting, in practice, most of MSMEs still need several phases to arrive at a readiness stage to adopt information technology advances in helping their business process.
The purpose of this study is to examine the extent to which the MSMEs actors understand financial reporting and the extent to which the readiness in using information technology advances in financial reporting. The research methodology is a case study on UMKM PT Marawis Almadinah Raya (PT MAR) located at Jalan Pahlawan Bogor Selatan. Data is collected during April until June 2018 through in-depth interviews and observations of the practices of financial reporting.
The results show that PT MAR has financial statements compiled starting from recording, classifying, summarizing, journalizing with double entry systems and using Ms Excel software. However, PT MAR's financial statements has not been in accordance with the financial accounting standards for micro, small, and medium-sized entities (SAK EMKM) and the financial statements have not been accurately presented so that the financial statements have not provided optimal usability in helping to assess performance and decision making. This is mainly due to the owners and accounting staff not having sufficient knowledge of financial reporting so that there are many errors in the management of transaction evidence, classification, application of accounting methods, and presentation of accounts in financial statments. In addition, PT MAR's financial statements were not verified and not audited by an independent auditor. The findings of this study suggest that MSMEs need to get adequate socialization and training on accounting and financial reporting purposes, the application of SAK EMKM, increase the ability to use MsExcel before moving on to the next phase using mobile accounting applications and integrated systems using the internet and cloud computing.
Keywords: Accounting, Financial Reporting, Microsoft Excel, SAK EMKM