The Implementation of Financial Accounting Standards for Micro, Small, and Medium Entities (MSME) on the Quality of MSMEs Financial Statements in Medan City

Abstract

This study aims to determine the level of implementation of the Financial Accounting Standards for Micro, Small, and Medium Entities (MSME), assess the quality of MSMEs' financial statements, and analyze the effect of MSME implementation on the quality of MSMEs' financial reporting. This study employed a descriptive quantitative research approach. The study population consisted of approximately 1,408 MSMEs. The sample was determined using the Slovin formula with a 10% margin of error, resulting in 93 respondents. Data were collected through questionnaires distributed to MSME owners and analyzed using statistical techniques, including validity testing, reliability testing, classical assumption testing, simple linear regression analysis, the t-test, and the coefficient of determination (R²). The results of the simple linear regression analysis indicate that the implementation of SAK EMKM has a significant effect on the quality of financial statements. Therefore, improving MSMEs' understanding and ensuring the consistent implementation of SAK EMKM are essential strategies for enhancing the quality of MSMEs' financial reporting.