INTEgrated REporting for SMEs Transparency Erasmus Project

Project Title

INTEgrated REporting for SMEs Transparency

Project Key Action

This project related with these key action: Cooperation for innovation and the exchange of good practices

Project Action Type

This project related with this action type : Strategic Partnerships for vocational education and training

Project Call Year

This project’s Call Year is 2019

Project Topics

This project is related with these Project Topics: Enterprise, industry and SMEs (incl. entrepreneurship); Cooperation between educational institutions and business; New innovative curricula/educational methods/development of training courses

Project Summary

BBS and its partners have been working for several years on research-based curriculum development projects aimed at helping SMEs to cope with the continuous renewal of social and economic challenges of the society. Major projects, mostly supported by the EU, went on, and are still going on, in diverse fields from classic knowledge-competence-skill development of SMEs to handling generational changes, from family businesses to SME-mentor training developments or from legal-corporate support to sustainability issues. Not only have the topics varied in this project chain but also pedagogical approaches have overarched traditional classroom training, e- and b-learning courses, and mentor supports by internationally certified mentors. The genesis of each project could be found in the precursors and the ramifications of each project gave birth to new project ideas.
One of the important fallouts of the mentioned cooperation chain was that accountability of the SMEs leaves much to be desired in general and that reporting practices hardly go beyond financial reporting in particular. In fact, more integrated reporting, incorporating the process of integrated thinking, on capabilities (knowledge, competences, skills, experience, etc.) is needed.
The decision on this new proposal was preceded by drawing up an overview of the state of play of IR of companies in Europe and SMEs in particular. This preparatory activity was carried out together with the members of the partnership. The selection of these partners went on the basis of their readiness to participate in this work and also on their track record in the field of Non-Financial Reporting (NFR). It appeared that large international consortia are currently pursuing in-depth research in the field (for instance: IIRC, International Integrated Reporting Council and IFAC, International Federation of Accountants in the Description and more in the Annexes). We have also realised that the recent and ongoing projects focus on comparative research and on bringing alignment to corporate reporting in the world, among the multiple different and conflicting reporting frameworks. In order to avoid replication of these consortia our partnership contacted several of them (and invited two of them to be partners) and wish to use their results to achieve our clearly distinguished goals: to develop practical and educational support services for SMEs in Integrated Reporting (IR).
The partners realised that large/international companies are much more advanced in complex corporate reporting on their value creation processes than SMEs. The international network EFAA, European Federation of Accountants and Auditors for SMEs (invited into the project partnership) pursued investigation on the ‘trickle down’ effect from practices of large companies to smaller ones. This gave our partnership rich background material for the conceptualisation of this project.
One approach of the large companies is to prepare their reports on the basis of 6 capitals which is still considered a relatively new but evolving field. One of the objectives of this project is to develop a proposal for the SMEs’ reporting from the experience of the large undertakings. Direct application is not working so the goal is to develop an adaptation scheme of the 6-capital-based integrated reporting to SMEs. An intellectual output in form of a Guide will produce an easily digestible suggestion for SMEs on how to prepare their Integrated Reports and develop an integrated thinking approach to value creation and decision making processes. Another intellectual outcome will be a mixture of face-to-face, e-learning and work based learning modular training material for SMEs, SME accountants and students on IR, based on the 6 capitals. While the VET trainings will be subjected to institutional or national vocational qualifications, the courses targeting the students will be accredited through ECTS. The hidden purpose is to transform the mind-sets of SME senior management, accountants and students by adopting integrated thinking on the whole value creation process of an SME.
Another task set out by the partnership is to elaborate on possible incentives to encourage SMEs to adopt IR. Meeting the information needs of investors, finance providers and other stakeholders is only one of the most convincing arguments. Others include better decision making, enhanced reputation and trustworthiness, and finally a focus on the longer-term sustainability of SMEs. We intend to point out how the practice of IR can help improve the economic, social and environmental performance of an SME.

EU Grant (Eur)

Funding of the project from EU: 328999 Eur

Project Coordinator

BUDAPESTI GAZDASAGI EGYETEM & Country: HU

Project Partners

• UNIVERSITATEA BABES BOLYAI
• UNIVERSITA DEGLI STUDI DI UDINE
• MAC-Team aisbl
• LEEDS BECKETT UNIVERSITY
• HOCHSCHULE RHEIN-WAAL-HSRW RHINE-WAAL UNIVERSITY OF APPLIED SCIENCES
• Fédération européenne des comptables et auditeurs pour les petites et moyennes entreprises
• UNIWERSYTET EKONOMICZNY WE WROCLAWIU