The Social Construction on Financial Reporting of Small and Medium Scaled Production House
Abstract
This study investigates the role of financial reporting in small and medium-sized film production houses, focusing on its economic significance and the social construction surrounding its practices. Utilizing a constructivist approach with grounded theory methodology, the research comprises in-depth interviews, observations, and documentation, further analyzed through triangulation. The findings reveal that these production houses view financial reporting as essential for business sustainability, with stakeholder theory explaining the need for both financial and non-financial information to meet internal and external requirements. Specifically, financial reports typically include simple income statements, cash flows, and balance sheets with tangible assets and trade payables, alongside non-financial data. These results offer a foundation for further studies and insights for financial reporting regulations within the film industry. However, the research scope is limited to specific regional practices and a narrow observational timeframe.
Keywords: SMEs, production house, grounded theory, financial reporting, business sustainability
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References
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Aboagye‐Otchere, F., & Agbeibor, J. (2012). The International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMES). Journal of Financial Reporting and Accounting, 10(2), 190–214. https://doi.org/10.1108/19852511211273723
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Antonelli, V., D’Alessio, R., & Francesca, C. (2016). Beyond Stakeholder Theory: Financial Reporting and Voluntary Disclosure in Italian SME According to A Unitary Perspective. Business and Management Sciences: International Quarterly Review, 7(4).
Bakr, S. A., & Napier, C. J. (2022). Adopting the international financial reporting standard for small and medium-sized entities in Saudi Arabia. Journal of Economic and Administrative Sciences, 38(1), 18–40. https://doi.org/10.1108/JEAS-08-2018-0094
Bank Indonesia. (2015). Profil Bisnis Usaha Mikro, Kecil, dan Menengah (UMKM).
Banks, M., Calvey, D., Owen, J., & Russell, D. (2002). Where the art is: defining and managing creativity in new media SMEs. Creativity and Innovation Management, 11(4), 255–264.
Beaver, G. (2002). Small Business, Entrepreneurship and Enterprise Development. Prentice Hall.
Bekraf. (2018). Ekonomi Kreatif Outlook 2019.
Bhattacherjee, A. (2012). Social science research: Principles, methods, and practices.
Borin, E., Donato, F., & Sinapi, C. (2018). Financial sustainability of small-and medium-sized enterprises in the cultural and creative sector: The role of funding. Entrepreneurship in Culture and Creative Industries: Perspectives from Companies and Regions, 45–62.
Bourdieu, P. (1993). Sociology in question (Vol. 18). Sage.
Cascino, S., Clatworthy, M., García Osma, B., Gassen, J., Imam, S., & Jeanjean, T. (2014). Who uses financial reports and for what purpose? Evidence from capital providers. Accounting in Europe, 11(2), 185–209.
Corbin, J. M., & Strauss, A. (1990). Grounded theory research: Procedures, canons, and evaluative criteria. Qualitative Sociology, 13(1), 3–21.
Ferracuti, E., & Stubben, S. R. (2019). The role of financial reporting in resolving uncertainty about corporate investment opportunities. Journal of Accounting and Economics, 68(2–3), 101248.
Flayyih, H. H., Mohammed, Y. N., & Talab, H. R. (2019). The role of accounting information in reducing the funding constraints of small and medium enterprises in Iraq. African Journal of Hospitality, Tourism and Leisure, 8(4), 1–10.
Fraser, S., & Lomax, S. (2011). Access to finance for creative industry businesses. Department for Business and Innovation & Skills (BIS) and Media and Sport (Dcms) and Department for Culture (Final Report May 2011).
Freeman, R. E. (1999). Divergent stakeholder theory. Academy of Management Review, 24(2), 233–236.
Friis, I., & Hansen, A. (2015). Line-item budgeting and film-production. Qualitative Research in Accounting & Management, 12(4), 321–345. https://doi.org/10.1108/QRAM-01-2015-0016
Fritzke, L. (2008). An examination of the impact of records on the value of artworks. Records Management Journal, 18(3), 221–235.
Gephart, R. P. (1993). The textual approach: Risk and blame in disaster sensemaking. Academy of Management Journal, 36(6), 1465–1514. https://doi.org/10.2307/256819
Goulding, C. (1998). Grounded theory: the missing methodology on the interpretivist agenda. Qualitative Market Research: An International Journal, 1(1), 50–57.
Guerreiro, M. S., Rodrigues, L. L., & Craig, R. (2008). The preparedness of companies to adopt International Financial Reporting Standards: Portuguese evidence. Accounting Forum, 32(1), 75–88.
Hasan, H., & Gould, E. (2001). Support for the sense-making activity of managers. Decis. Support Syst., 31, 71–86.
Hasanah, N., Armeliza, D., Muliasari, I., & Wahyuningrum, I. (2020). Accounting Application for Small and Medium Enterprises and Compatibility with EMKM Standards: A Case Study in Jakarta, Indonesia. Journal of Southwest Jiaotong University, 55. https://doi.org/10.35741/issn.0258-2724.55.5.4
HOTN. (2000). The Heart of The Nation: A Cultural Strategy for Aotearoa New Zealand.
Husin, M. A., & Ibrahim, M. D. (2014). The role of accounting services and impact on small medium enterprises (SMEs) performance in manufacturing sector from East Coast Region of Malaysia: A conceptual paper. Procedia-Social and Behavioral Sciences, 115, 54–67.
IASB. (2009). International Financial Reporting Standards.
Iriyadi, I., Maulana, M. A., & Nurjanah, Y. (2018). Financial Reporting for Micro Small and Medium Enterprises Towards Industrial Revolution Era 4.0. International Conference On Accounting And Management Science 2018, 32–38.
Jeacle, I. (2009). “Going to the movies”: accounting and twentieth century cinema. Accounting, Auditing & Accountability Journal, 22(5), 677–708. https://doi.org/10.1108/09513570910966333
Kianto, A., Shujahat, M., Hussain, S., Nawaz, F., & Ali, M. (2019). The impact of knowledge management on knowledge worker productivity. Baltic Journal of Management, 14(2), 178–197.
Kiliç, M., Uyar, A., & Ataman, B. (2016). Preparedness of the entities for the IFRS for SMEs: an emerging country case. Journal of Accounting in Emerging Economies, 6(2), 156–178. https://doi.org/10.1108/JAEE-01-2014-0003
Kushnir, K. (2010). A Universal Definition of Small Enterprise: A Procrustean Bed for SMEs?
Lantto, A.-M. (2022). Obtaining entity-specific information and dealing with uncertainty: Financial accountants’ response to their changing work of financial reporting and the role of boundary objects. Critical Perspectives on Accounting, 85, 102277.
Libby, R. (1979). The impact of uncertainty reporting on the loan decision. Journal of Accounting Research, 35–57.
Madurapperuma, M. W., Thilakerathne, P. M. C., & Manawadu, I. N. (2016). Accounting record keeping practices in small and medium sized enterprise’s (SME’s) in Sri Lanka. Journal of Finance and Accounting, 4(4), 188–193.
Matheson, B. (2006). A culture of creativity: design education and the creative industries. Journal of Management Development, 25(1), 55–64.
Muslichah, M., Sunarto, S., Kusnanto, A. A., Indrawati, S., & Hariyanto, H. (2020). The Adoption of Financial Accounting Standards for Small Medium Enterprises by Muslim Entrepreneurs. Journal of Accounting, Business and Management (JABM), 27(1), 54–65.
Nwobu, O., Faboyede, S. O., & Onwuelingo, A. T. (2015). The role of accounting services in small and medium scale businesses in Nigeria. Journal of Accounting, Business and Management (JABM), 22(1).
Nyathi, K. A., Nyoni, T., Nyoni, M., & Bonga, W. G. (2018). The role of accounting information in the success of small & medium enterprises (SMEs) in Zimbabwe: A case of Harare. Journal of Business and Management (DRJ-JBM), 1(1), 1–15.
Okoli, B. E. (2011). Evaluation of the accounting systems used by small scale enterprises in Nigeria: The case of Enugu-South East Nigeria. Asian Journal of Business Management, 3(4), 235–240.
Perera, D., & Chand, P. (2015). Issues in the adoption of international financial reporting standards (IFRS) for small and medium-sized enterprises (SMES). Advances in Accounting, 31(1), 165–178. https://doi.org/https://doi.org/10.1016/j.adiac.2015.03.012
Perera, D., Chand, P., & Mala, R. (2023). Users’ perspective on the usefulness of international financial reporting standards for small and medium-sized enterprises-based financial reports. Meditari Accountancy Research, 31(5), 1133–1164. https://doi.org/10.1108/MEDAR-03-2020-0809
Quagli, A., & Paoloni, P. (2012). How is the IFRS for SME accepted in the European context? An analysis of the homogeneity among European countries, users and preparers in the European commission questionnaire. Advances in Accounting, 28(1), 147–156. https://doi.org/https://doi.org/10.1016/j.adiac.2012.03.003
Reddaway, M., Goodman, S., & Graves, C. (2011). The role of accounting information in the management of winery SMEs: a review of the broader existing literature and its implications for Australia’s wine industry. 6th AWBR International Conference, 1, 1–13.
Rutherford, B. A. (2003). The social construction of financial statement elements under Private Finance Initiative schemes. Accounting, Auditing & Accountability Journal, 16(3), 372–396.
Saddha, O. (2018). Merangkum Batas Perfilman di Solo. Solopos.
Samuelsson, J., Andersén, J., Ljungkvist, T., & Jansson, C. (2016). Formal accounting planning in SMEs. Journal of Small Business and Enterprise Development, 23(3), 691–702. https://doi.org/10.1108/JSBED-12-2015-0167
Sandalgaard, N., & Nielsen, C. (2018). Budget emphasis in small and medium-sized enterprises: evidence from Denmark. Journal of Applied Accounting Research, 19(3), 351–364. https://doi.org/10.1108/JAAR-08-2016-0087
Santos, J. L. (2015). Social construction theory. The International Encyclopedia of Human Sexuality, 1115–1354.
Shorthose, J., & Strange, G. (2004). The new cultural economy, the artist and the social configuration of autonomy. Capital & Class, 28(3), 43–59.
Silaen, P., & Tulig, S. (2023). The Role of Accounting in Managing Micro, Small and Medium Enterprises (MSMEs): The Case of Indonesia. Australasian Accounting, Business and Finance Journal, 17(2), 113–121.
Tambunan, T. (2011). Development of small and medium enterprises in a developing country: The Indonesian case. Journal of Enterprising Communities: People and Places in the Global Economy, 5(1), 68–82.
Townley, B., Beech, N., & McKinlay, A. (2009). Managing in the creative industries: Managing the motley crew. Human Relations, 62(7), 939–962.
Vogel, H. L. (2005). Movie industry accounting. A Concise Handbook of Movie Industry Economics, 59–79.
Wa-Mbaleka, S. (2020). The Researcher as an Instrument BT - Computer Supported Qualitative Research (A. P. Costa, L. P. Reis, & A. Moreira (eds.); pp. 33–41). Springer International Publishing.
Zotorvie, J. S. T. (2017). A study of financial accounting practices of small and medium scale enterprises (SMEs) in Ho Municipality, Ghana. International Journal of Academic Research in Business and Social Sciences, 7(7), 29–39.
Aboagye‐Otchere, F., & Agbeibor, J. (2012). The International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMES). Journal of Financial Reporting and Accounting, 10(2), 190–214. https://doi.org/10.1108/19852511211273723
Ahmad, K., & Mohamed Zabri, S. (2015). Factors explaining the use of management accounting practices in Malaysian medium-sized firms. Journal of Small Business and Enterprise Development, 22(4), 762–781. https://doi.org/10.1108/JSBED-04-2012-0057
Antonelli, V., D’Alessio, R., & Francesca, C. (2016). Beyond Stakeholder Theory: Financial Reporting and Voluntary Disclosure in Italian SME According to A Unitary Perspective. Business and Management Sciences: International Quarterly Review, 7(4).
Bakr, S. A., & Napier, C. J. (2022). Adopting the international financial reporting standard for small and medium-sized entities in Saudi Arabia. Journal of Economic and Administrative Sciences, 38(1), 18–40. https://doi.org/10.1108/JEAS-08-2018-0094
Bank Indonesia. (2015). Profil Bisnis Usaha Mikro, Kecil, dan Menengah (UMKM).
Banks, M., Calvey, D., Owen, J., & Russell, D. (2002). Where the art is: defining and managing creativity in new media SMEs. Creativity and Innovation Management, 11(4), 255–264.
Beaver, G. (2002). Small Business, Entrepreneurship and Enterprise Development. Prentice Hall.
Bekraf. (2018). Ekonomi Kreatif Outlook 2019.
Bhattacherjee, A. (2012). Social science research: Principles, methods, and practices.
Borin, E., Donato, F., & Sinapi, C. (2018). Financial sustainability of small-and medium-sized enterprises in the cultural and creative sector: The role of funding. Entrepreneurship in Culture and Creative Industries: Perspectives from Companies and Regions, 45–62.
Bourdieu, P. (1993). Sociology in question (Vol. 18). Sage.
Cascino, S., Clatworthy, M., García Osma, B., Gassen, J., Imam, S., & Jeanjean, T. (2014). Who uses financial reports and for what purpose? Evidence from capital providers. Accounting in Europe, 11(2), 185–209.
Corbin, J. M., & Strauss, A. (1990). Grounded theory research: Procedures, canons, and evaluative criteria. Qualitative Sociology, 13(1), 3–21.
Ferracuti, E., & Stubben, S. R. (2019). The role of financial reporting in resolving uncertainty about corporate investment opportunities. Journal of Accounting and Economics, 68(2–3), 101248.
Flayyih, H. H., Mohammed, Y. N., & Talab, H. R. (2019). The role of accounting information in reducing the funding constraints of small and medium enterprises in Iraq. African Journal of Hospitality, Tourism and Leisure, 8(4), 1–10.
Fraser, S., & Lomax, S. (2011). Access to finance for creative industry businesses. Department for Business and Innovation & Skills (BIS) and Media and Sport (Dcms) and Department for Culture (Final Report May 2011).
Freeman, R. E. (1999). Divergent stakeholder theory. Academy of Management Review, 24(2), 233–236.
Friis, I., & Hansen, A. (2015). Line-item budgeting and film-production. Qualitative Research in Accounting & Management, 12(4), 321–345. https://doi.org/10.1108/QRAM-01-2015-0016
Fritzke, L. (2008). An examination of the impact of records on the value of artworks. Records Management Journal, 18(3), 221–235.
Gephart, R. P. (1993). The textual approach: Risk and blame in disaster sensemaking. Academy of Management Journal, 36(6), 1465–1514. https://doi.org/10.2307/256819
Goulding, C. (1998). Grounded theory: the missing methodology on the interpretivist agenda. Qualitative Market Research: An International Journal, 1(1), 50–57.
Guerreiro, M. S., Rodrigues, L. L., & Craig, R. (2008). The preparedness of companies to adopt International Financial Reporting Standards: Portuguese evidence. Accounting Forum, 32(1), 75–88.
Hasan, H., & Gould, E. (2001). Support for the sense-making activity of managers. Decis. Support Syst., 31, 71–86.
Hasanah, N., Armeliza, D., Muliasari, I., & Wahyuningrum, I. (2020). Accounting Application for Small and Medium Enterprises and Compatibility with EMKM Standards: A Case Study in Jakarta, Indonesia. Journal of Southwest Jiaotong University, 55. https://doi.org/10.35741/issn.0258-2724.55.5.4
HOTN. (2000). The Heart of The Nation: A Cultural Strategy for Aotearoa New Zealand.
Husin, M. A., & Ibrahim, M. D. (2014). The role of accounting services and impact on small medium enterprises (SMEs) performance in manufacturing sector from East Coast Region of Malaysia: A conceptual paper. Procedia-Social and Behavioral Sciences, 115, 54–67.
IASB. (2009). International Financial Reporting Standards.
Iriyadi, I., Maulana, M. A., & Nurjanah, Y. (2018). Financial Reporting for Micro Small and Medium Enterprises Towards Industrial Revolution Era 4.0. International Conference On Accounting And Management Science 2018, 32–38.
Jeacle, I. (2009). “Going to the movies”: accounting and twentieth century cinema. Accounting, Auditing & Accountability Journal, 22(5), 677–708. https://doi.org/10.1108/09513570910966333
Kianto, A., Shujahat, M., Hussain, S., Nawaz, F., & Ali, M. (2019). The impact of knowledge management on knowledge worker productivity. Baltic Journal of Management, 14(2), 178–197.
Kiliç, M., Uyar, A., & Ataman, B. (2016). Preparedness of the entities for the IFRS for SMEs: an emerging country case. Journal of Accounting in Emerging Economies, 6(2), 156–178. https://doi.org/10.1108/JAEE-01-2014-0003
Kushnir, K. (2010). A Universal Definition of Small Enterprise: A Procrustean Bed for SMEs?
Lantto, A.-M. (2022). Obtaining entity-specific information and dealing with uncertainty: Financial accountants’ response to their changing work of financial reporting and the role of boundary objects. Critical Perspectives on Accounting, 85, 102277.
Libby, R. (1979). The impact of uncertainty reporting on the loan decision. Journal of Accounting Research, 35–57.
Madurapperuma, M. W., Thilakerathne, P. M. C., & Manawadu, I. N. (2016). Accounting record keeping practices in small and medium sized enterprise’s (SME’s) in Sri Lanka. Journal of Finance and Accounting, 4(4), 188–193.
Matheson, B. (2006). A culture of creativity: design education and the creative industries. Journal of Management Development, 25(1), 55–64.
Muslichah, M., Sunarto, S., Kusnanto, A. A., Indrawati, S., & Hariyanto, H. (2020). The Adoption of Financial Accounting Standards for Small Medium Enterprises by Muslim Entrepreneurs. Journal of Accounting, Business and Management (JABM), 27(1), 54–65.
Nwobu, O., Faboyede, S. O., & Onwuelingo, A. T. (2015). The role of accounting services in small and medium scale businesses in Nigeria. Journal of Accounting, Business and Management (JABM), 22(1).
Nyathi, K. A., Nyoni, T., Nyoni, M., & Bonga, W. G. (2018). The role of accounting information in the success of small & medium enterprises (SMEs) in Zimbabwe: A case of Harare. Journal of Business and Management (DRJ-JBM), 1(1), 1–15.
Okoli, B. E. (2011). Evaluation of the accounting systems used by small scale enterprises in Nigeria: The case of Enugu-South East Nigeria. Asian Journal of Business Management, 3(4), 235–240.
Perera, D., & Chand, P. (2015). Issues in the adoption of international financial reporting standards (IFRS) for small and medium-sized enterprises (SMES). Advances in Accounting, 31(1), 165–178. https://doi.org/https://doi.org/10.1016/j.adiac.2015.03.012
Perera, D., Chand, P., & Mala, R. (2023). Users’ perspective on the usefulness of international financial reporting standards for small and medium-sized enterprises-based financial reports. Meditari Accountancy Research, 31(5), 1133–1164. https://doi.org/10.1108/MEDAR-03-2020-0809
Quagli, A., & Paoloni, P. (2012). How is the IFRS for SME accepted in the European context? An analysis of the homogeneity among European countries, users and preparers in the European commission questionnaire. Advances in Accounting, 28(1), 147–156. https://doi.org/https://doi.org/10.1016/j.adiac.2012.03.003
Reddaway, M., Goodman, S., & Graves, C. (2011). The role of accounting information in the management of winery SMEs: a review of the broader existing literature and its implications for Australia’s wine industry. 6th AWBR International Conference, 1, 1–13.
Rutherford, B. A. (2003). The social construction of financial statement elements under Private Finance Initiative schemes. Accounting, Auditing & Accountability Journal, 16(3), 372–396.
Saddha, O. (2018). Merangkum Batas Perfilman di Solo. Solopos.
Samuelsson, J., Andersén, J., Ljungkvist, T., & Jansson, C. (2016). Formal accounting planning in SMEs. Journal of Small Business and Enterprise Development, 23(3), 691–702. https://doi.org/10.1108/JSBED-12-2015-0167
Sandalgaard, N., & Nielsen, C. (2018). Budget emphasis in small and medium-sized enterprises: evidence from Denmark. Journal of Applied Accounting Research, 19(3), 351–364. https://doi.org/10.1108/JAAR-08-2016-0087
Santos, J. L. (2015). Social construction theory. The International Encyclopedia of Human Sexuality, 1115–1354.
Shorthose, J., & Strange, G. (2004). The new cultural economy, the artist and the social configuration of autonomy. Capital & Class, 28(3), 43–59.
Silaen, P., & Tulig, S. (2023). The Role of Accounting in Managing Micro, Small and Medium Enterprises (MSMEs): The Case of Indonesia. Australasian Accounting, Business and Finance Journal, 17(2), 113–121.
Tambunan, T. (2011). Development of small and medium enterprises in a developing country: The Indonesian case. Journal of Enterprising Communities: People and Places in the Global Economy, 5(1), 68–82.
Townley, B., Beech, N., & McKinlay, A. (2009). Managing in the creative industries: Managing the motley crew. Human Relations, 62(7), 939–962.
Vogel, H. L. (2005). Movie industry accounting. A Concise Handbook of Movie Industry Economics, 59–79.
Wa-Mbaleka, S. (2020). The Researcher as an Instrument BT - Computer Supported Qualitative Research (A. P. Costa, L. P. Reis, & A. Moreira (eds.); pp. 33–41). Springer International Publishing.
Zotorvie, J. S. T. (2017). A study of financial accounting practices of small and medium scale enterprises (SMEs) in Ho Municipality, Ghana. International Journal of Academic Research in Business and Social Sciences, 7(7), 29–39.
Published
2024-02-06
How to Cite
AZZAHRA, Safiera F.; FALIKHATUN, Falikhatun.
The Social Construction on Financial Reporting of Small and Medium Scaled Production House.
Jurnal Ilmiah Akuntansi dan Bisnis, [S.l.], v. 19, n. 1, p. 1-18, feb. 2024.
ISSN 2303-1018.
Available at: <https://ojs.unud.ac.id/index.php/jiab/article/view/103204>. Date accessed: 28 apr. 2024.
doi: https://doi.org/10.24843/JIAB.2024.v19.i01.p01.
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