For small- and medium-sized entities, a different set of accounting standards from large-sized entities are needed, because the financial statements which show the real situation of small- and medium-sized entities more properly could contribute social creditability. In this situation, there are need for a set of conceptual framework to set a consistent set of accounting standards. In the United States of America, The American Institute of Certified Public Accountant issued “Financial Reporting Framework for Small- and Medium- Sized Entities” in 2013, which is a set of conceptual framework to set a consistent set of accounting standards for small- and medium-sized entities. Just like as the AICPA’s conceptual framework, the purpose of this paper is to propose the best conceptual framework for Japanese small- and medium-sized entities accounting.

　There are two accounting standards for SMEs in Japan. One is “The Guidelines of Accounting for SMEs” and the other is “The Basic Guidance of Accounting for SMEs”. The aims for establishing these two standards were the one related to business management that manager figure out the financial conditions of their own company, and the one related to funding that managers make use of the standards for the fund-raising from the financial institution (banks, etc.).

　In this study, hearing surveys with tax accountants, financial institutions, and Credit Guarantee Corporation were conducted. From the results of the surveys, the usability of submitting financial statements, which the accounting standards for SMEs were applied, in the fund-raising of SMEs was studied. The present situations that “The Guidelines of Accounting for SMEs” was hardly used and the only “The Basic Guidance of Accounting for SMEs” was applied, and that the SMEs tend to apply the accounting standards for SMEs only to receive the discount of the guarantee charge from Credit Guarantee Corporation were illustrated. Further, the scoring in financial institutions and the contents of the “Financial Inspection Manual (supplement)” by Financial Service Agency were explained. The usability of “The Basic Guidance of Accounting for SMEs” in the scoring and the Financial Inspection Manual (supplement) and the benefits of “The Basic Guidance of Accounting for SMEs” in the judgement of guarantee by the Credit Guarantee Corporation were illustrated.

　The Japanese accounting system is divided by large entities and SMEs. Large entities are required to prepare financial statements in accordance with Japanese Generally Accepted Accounting Standards (J-GAAP), IFRS, U.S.GAAP or Japan’s Modified International Standards (JMIS) . The General Standards for SMEs and the Accounting Guidelines for SMEs will be applied for SMEs. The Review Group on SME Accounting established by the Small and Medium Enterprise Agency and the Financial Services Agency has issued the General Standard for SMEs in February 2012. This standard, along with the Accounting Guidelines for SMEs, can be applied in any of the SMEs by management’s decision. In order to ensure the reliability of financial statements that are prepared in accordance with these accounting standards, large entities can use an accounting auditor system. On the other hand, there are two kinds of systems have been developed for assurance services of financial statement for SMEs: the Accounting Counselor System and the Document Attachment System. But both of the two systems were not widely adopted. In light of this situation, and considering that the accounting standards for SMEs have been developed, it is necessary to establish an assurance system for SMEs. From these considerations, this study purposes to clarify the necessity of the assurance services in SMEs, and tries to establish an assurance model for SMEs in Japan. In conclusion, this study argues that we should take into account the needs of both SMEs and users of their financial statements, and it has a need to set assurance services other than audit to be appropriate for SMEs. Therefore, this study suggests that audit should be applied to large entities, review engagements should be applied to medium sized entities, and compilation engagements should be applied to small sized entities.

　Accounting for SMEs in Japan that have been built and operated as a growth development model for SMEs is the greatest feature. Accounting of Japan’s SMEs to enhance the reliability of the financial statements, and to improve the reliability between the financial institutions and SMEs, and that want to raise funds when needed, to meet the needs for small business owners.

　In this study, focusing on the effect of reliability improvement by utilizing the relationship monthly management and actual financial statements by financial institutions to create is on the SMEs, funding than originally accounting of Japan’s SMEs that it has been built with an emphasis on that, and SMEs for financial statements is to clarify what has been how to use in the examination for financial institutions, centered on the relationship between small business owners and financial institutions, we were examined something to do with improving the reliability of the direction of the financial institutions that take advantage of the SMEs accounting should be.

　As a result, the financial statements that conform to the correct accounting rules, financial institutions have played an important role as the creation of basic data for actual financial statements to be created for the corporate rating, financial institutions to focus for future cash flow information, monthly management such as timely monthly closing and budget management, it has been emphasized from the viewpoint of improving the reliability of SMEs and financial institutions.

　Improving the reliability of financial statements itself (take advantage for such compilation) and construction of accurate and timely performance management system with a focus monthly management and, on whether the mechanism can be constructed for appropriate rating for SMEs for financial institutions.

　Recently, in which enterprises such as large, small and medium-sized entities, and publicly and closelyheld companies is multi-layered, the bases of accounting are double-tracking. This situation, for small and medium-sized entities (SMEs), what has become unclear whether the generally accepted accounting principles.

　Therefore, there is significance to study accounting standards required for SMEs. Preparing accounting books are required for which the management power of SMEs is built up. Since the concept of corporate accounting principles is included in the new document presenting guidelines for SMEs, it should be widespread. However, since the tax law standards are used in the new document presenting guidelines for SMEs, it is included a most basic standards of accounting disposition generally recognized as just and proper.

　Then, since financial statements are generally prepared based on the general tax law standards, it is considered that provisions combining the new document presenting guidelines for SMEs with the corporate tax laws are firstly established.

　In this paper, by examining the transition of the discussions on Small and Medium-sized Entities accounting, clarify the structure of the current small and medium-sized entities accounting, was intended to examine the positional relationship between the large company accounting.

　The verification result, discussion of small and medium-sized entities accounting in Japan, three phases (the embryonic phase, the induction phase and the influx phase) can be divided into, the structure has changed in each phase.

　In the embryonic phase, bookkeeping, audit and law in the need to distinguish large and small companies have been recognized.

　In the introductory phase, large entities and small and medium-sized entities, the need to distinguish the characteristics of the entities has been recognized in accounting. The idea of a single standard and double standard has been discussed as a way to partition.

　In the influx phase, small and medium-sized entities accounting is two-phased by approach in top-down and bottom-up is used, it became a structure that called a hybrid type in which both are used in single standard and double standard ideas.

　However, in the structure called a hybrid type, it is not possible to distinguish clearly the small and mediumsized entities itself. Therefore, it is desirable to unify the small and medium-sized entities accounting. In the discussion of small and medium-sized entities accounting, “Importance of Book Entrys” are claimed consistently from embryonic phase. To achieve this claim, with a deductive approach to build a framework through the concept derived by the “characteristics of small and medium-sized entities”, it is required way to configure the accounting standards for small and medium-sized entities.