An analysis of problems encountered by auditors of small, medium and micro enterprises in Botswana

Abstract

Auditing is acclaimed as lending credibility to financial statements of enterprises. However, small enterprises see little importance in maintaining proper books of accounts and preparing financial statements. The Republic of Botswana has committed itself to the promotion of small enterprises in Botswana. But, small enterprises are said to have characteristics that pose difficulties to auditors. This suggests auditors will become more involved with small enterprises as a result of the expected growth and expansion of small enterprises. This study sought to establish the characteristics of small enterprises in Botswana, problems small enterprise auditors in Botswana face, frequency of occurrence of the problems, and their impact on auditing.

The findings suggest that characteristics of small enterprises in Botswana are the same as those of small enterprises in other countries. Most of twenty-seven problems suggested to auditors rarely occurred, or occurred only occasionally. However, these problems are significant, as they are considered to have an important effect on auditing.

KEY WORDS:

• Internal controls
• small
• medium and micro enterprises
• auditing standards
• accounting standards