About AARC

AARC provides a vibrant environment for researchers working on national and international projects. The focus is on research that examines contemporary issues in accounting, auditing, financial reporting and corporate governance.  The objectives of AARC are:

• To encourage collaborative studies at national and international level
• To obtain external funding for research and policy papers
• To disseminate the research findings via journal articles, conferences and seminars
• To foster relationships with the accountancy profession, government departments, standard setters and other national and international stakeholders.

Themes tend to reflect current issues in accounting and therefore they will change over time. At present, the main themes are: the capital market effects of financial reporting under International Accounting Standards and US Generally Accepted Accounting Principles; factors driving the accounting and auditing choices of smaller entities; value of the statutory financial statements of SMEs to users; the effect of voluntary audit on earnings quality and capital structure in small and micro-companies. Specialist areas include the impact of the continued deregulation of accounting and auditing on the preparers, auditors and users of the financial statements of small and micro-companies in the UK and other EU Member States.

Members of AARC disseminate their research through a wide range of publications that include academic journals, refereed research reports for the accountancy bodies and government, and professional magazines. Members of the research centre have recently published papers in the following journals:

• Accounting and Business Research
• Accounting Auditing and Accountability Journal
• Accounting in Europe
• European Accounting Review
• International Journal of Auditing
• International Small Business Journal
• Journal of Accounting, Auditing and Finance
• Journal of Information Sciences
• Journal of International Accounting Research
• Journal of Marketing Management

Recent research grants include awards from:

• International Association for Accounting Education and Research
• Institute of Chartered Accountants in Scotland
• International Federation of Accountants

AARC provides opportunities for experienced and emerging researchers. Projects range from archival capital markets research, where the focus is on the effect of International Reporting Standards on large listed companies, to empirical studies of SMEs based on interviews and survey data. Some projects are funded by external research grants from the accountancy bodies, international organizations or other stakeholders; many involve collaboration with colleagues abroad.

Staff and PhD students present their work-in-progress at one of the monthly research seminars. This provides timely feedback, encourages discussion of key issues and promotes collegiality. In turn, this can lead to higher quality proposals, conference papers and articles. AARC also holds research seminars with guest speakers from institutions in the UK and abroad. The capstone of the events hosted by AARC is the annual Brunel Accounting Symposium, which provides continuing professional development for academics and fosters relationships with the accountancy profession, standard setters and other national and international stakeholders.

Evidence from a body of research on reducing the burden of accounting and auditing regulation for small private companies supported policy-making in the UK’s Companies Act 2006 in which a ‘think small first’ approach was taken to reducing administrative burdens. Subsequently:

• Size thresholds were raised in 2008 for accounting and auditing for small and medium-sized private companies bringing them to the EU maxima
• The government used the research to respond to the EC’s proposal and subsequent creation of a new category of micro-entity and exempt such entities from the requirements of the Fourth Accounting Directive
• Denmark, Sweden, Norway and Finland used the research as the basis for their regulatory impact assessments on introducing  auditing exemption
• Accountants received evidence-based information that will ultimately benefit their small company clients when weighing up the costs and benefits of their accounting and auditing options.

The foundation of this body of research was the Collis Report (2003), Directors’ Views on Exemption from the Statutory Audit (available from http://www.berr.gov.uk/files/file25971.pdf). This reported the findings of a survey commissioned by the Department of Trade and Industry as part of the Regulatory Impact Assessment on the likely effects of raising the turnover threshold for audit exemption to £1m.

A follow-up survey, Collis (2008), Directors’ Views on Accounting and Auditing Requirements for SMEs (available from http://www.bis.gov.uk/files/file50491.pdf), was commissioned by the Department for Business, Enterprise and Regulatory Reform as part of the Regulatory Impact Assessment on the actual effect of having raised the turnover threshold for audit exemption to £1m and the likely effects of raising all the size tests for audit exemption, filing abbreviated accounts and adopting the FRSSE to the EU maxima. In addition, it assessed views on the EC’s proposals on reducing regulatory burdens for micro-entities, small and medium-sized companies.

The research instrument developed by Collis was subsequently used as the basis for the regulatory impact assessments in Denmark, Sweden, Norway and Finland. Collis (2010), Audit exemption and the demand for voluntary audit – a comparative analysis of the UK and Denmark (available from http://onlinelibrary.wiley.com/doi/10.1111/j.1099-1123.2010.00415.x/abstract), took theory developed in the UK, where audit exemption had been a choice since 1994, and tested it in Denmark, where the Danish government was proposing to make it an option for the first time.

Kitching, Kašperová, Blackburn and Collis (2010), Small company abbreviated accounts: A regulatory burden or a vital disclosure? (available from http://www.icas.org.uk/site/cms/contentviewarticle.asp?article=7529) was funded by the Institute of Chartered Accountants of Scotland. It provided insights into the trade-off between reducing the regulatory burden on small companies and improving the transparency of financial information. It was disseminate to members of the accountancy body, regulators and other stakeholder groups.

Collis (2012), Determinants of Voluntary Audit and Voluntary Full Accounts in Micro- and Non-micro Small Companies in the UK, made an important contribution to understanding of the accounting and auditing needs of micro-companies. It developed theory on the demand for filing voluntary full accounts by micro-companies and the link with demand for voluntary audit in the context of the EC proposals to reduce regulatory burdens for micro-entities and subsequent European Accounting Directive.