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Financial reporting for small business entities (SBEs) has been the subject of much debate and concern by the accounting bodies (institutes) in Canada, the United States, the United Kingdom, Ireland, Australia, New Zealand, and other countries. The main issue for the standard setters is whether they should have one set of standards for all companies or two sets of standards (one for big companies and one for SBEs). The main objective of our study is to examine whether SBEs in Canada should have their own new set of Generally Accepted Accounting Principles (GAAP) or should they continue to use big GAAP used by public companies. To address this issue in the Canadian environment, we sent out a questionnaire to a sample of managers and owners of small businesses, preparers, auditors, and users of small business accounts. These stakeholders were asked to identify the purposes of SBE financial statements, their levels of satisfaction or dissatisfaction with the present accounting standards for SBEs, the burdens imposed on the preparers of the financial statements, and the weaknesses of the present standards. Furthermore, they were asked to give the expected advantages of adopting new standards, after having ranked four models of financial reporting of SBEs. The results are quite interesting. Stakeholders indicated that financial statements of SBEs are prepared mainly for taxation purposes and borrowing. They are not satisfied with the present standards because they are costly to comply with and very complex. The burden of producing SBE financial statements can be reduced by simplifying the present standards. The new standards would mean a shorter and simpler form of financial statements. It is hoped that the results of this study will provide the standard setters in Canada and other countries with an indication of the future direction for SBE reporting and accounting.*We greatly appreciate the helpful comments of the associate editor Howard Van Auken and the two anonymous reviewers. We also thank the CGA Accounting Research Centre at the University of Ottawa for its financial support.Michael Maingot is professor of accounting, School of Management, University of Ottawa. Daniel Zeghal is professor of accounting, School of Management, University of Ottawa.

Managing by performance indicators (PIs) is an important and controversial issue for many stakeholders concerned with higher education in the university systems all over the world. This study analyzes the voluntary disclosures of PIs by Canadian universities. The sample consisted of the 44 universities used by Maclean's Canadian Universities ranking, which divide the universities into Primarily Undergraduate, Comprehensive, and Medical-Doctoral. We were able to identify 123 PIs which were regrouped in 18 categories. The top two categories were disclosures about research and finance which are not surprising since research and the financing thereof appear to be the mission of most universities. The larger universities in the Medical-Doctoral category appear to engage in a much higher level of disclosure of PIs than the Comprehensive and Primarily Undergraduate categories. According to our results, voluntary disclosure of PIs is positively affected by university size and mission. These results seem to be consistent with disclosure theories, particularly political cost theory and legitimacy theory and with previous results in the corporate sector. They are relevant to different stakeholders concerned with higher education.

This study examines the historical development of the auditor's report in Canada. The auditor's report has been significantly influenced by British and U.S. legislation and practices. The English Joint Stock Companies Act of 1844 required compulsory audits and the British audit report was introduced in North America shortly after the introduction of this Act. The legislature prescribed an audit but it did not determine the form and content of the auditor's report; these were left to the individual practitioner. The British influence was strong in Canada up to the 1930s. However, from this time onward, the U.S. influence began to grow. The impact of the landmark case of Ultramares v. Touche on third‐party liability and consequent change in the auditor's report is analyzed. The paper uses institutional theory to explore reasons for the similarities of the auditor's report under British influence and under American influence. Specifically, the paper examines how the mechanisms of mimetic, coercive, and normative isomorphism led to institutional change in the accounting profession as organizations adapted their auditors' reports to achieve greater legitimacy.

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