In a corporation, the blue return has spread through about 90% of corporation. Therefore, the booking for which a blue return system asks may be able to do the thing I have realized mostly and to consider. If that is right, since it was attained, you should abolish the purpose of the blue return system. By the way, about the relation of the obligation of book-keeping requirement and accounts in a blue return , it seems that I am cut as booking and accounts now when the tax reform in 1968 is taken into consideration. When booking dealings, I am related to calculation of taxable income by what kind of accounting treatment I hold. Probably, the accounting treatment not only based on booking being performed formally but accounts and entry will be required for a blue return system, when based on the circumstances introduced for the purpose of realizing proper taxation in the basis of a self-assessment taxation system. The substance of booking will be obtained by it. Among corporations filing a blue return, about small and medium-sized entities , when accounting treatment and booking carry out by “the basic point about the accounts of small and medium-sized entities”, it is possible to obtain not only the formality of booking but substance. Such correspondence agrees also for the purpose of the blue return system introduced for the purpose of realizing proper taxation in the basis of a self-assessment taxation system.

Therefore, I consider a desirable direction.

The role of the accounts of a blue-form report on business income and the future subject in small and medium-sized entities.

　There is a problem of how to guarantee the reliability of financial statements in small and medium-sized enterprise (SMEs) accounting (Kawasaki 2016;2017). This paper deals with cases in the UK and the US. We outline the situation and auditing of SMEs in both countries. We also consider the situation of accounting professionals who provide services to SMEs.

　As a result, we believe that SMEs in the UK and US account for the majority of economic activity. Regarding the auditing of SMEs, although small companies in the UK are excluded from this process, auditing is generally mandated by the Companies Act 2006, and the general-purpose financial statements a company is required to produce.

　In the US, companies other than registered companies do not need to comply with the accounting standards published by the Financial Accounting Standards Board (FASB) unless they are audited. Among the small companies, “Financial Reporting Framework for SMEs” (FRF for SMEs) and “Other Comprehensive Basis of Accounting financial statements” (OCBOA) are applied. The financial statements based on these standards are referred to as financial statements of special purpose. In order to ensure the reliability of financial statements, reviews and audits are conducted based on AU-C800 (AS3305).

　There is much opposition to the introduction of compulsory auditing of SMEs. However, in order to ensure the reliability of accounting information of SMEs, accounting professionals also provide services to SMEs in various forms other than auditing.

　The purpose of this paper is to examine the current situation of the cost accounting and cost management practices in the Japanese SMEs based on the questionnaire surveys in the three industrial accumulation areas, Niigata Tsubame-Sanjou, Tokyo Ota-ku, and Higashi-Osaka.

　The primary results of analysis are as follows.

　- Many companies have introduced some cost accounting and/or cost management practices.

　- However, considerable number of companies haven’t introduced cost accounting and/or cost management practice even though they give “manufacturing cost reduction” and/or “company-wide cost management” as their management challenges.

　- A statistically significant relation is present between the state of implementation of cost accounting, and that of corporate budget. Considerable number of companies introducing some partial budgets, namely, business units, products/services and/or sections level ones as well as corporate-level one have introduced the product/service level cost accounting as well as one for preparing financial statements.

　- A statistically significant relation is present between the state of implementation of cost management, and that of cost accounting. Considerable number of companies haven’t introducing any cost management have introduced only the cost accounting for preparing financial statements.

　This present paper discusses the possibility that the audit will be contributed to by two distinct kinds of accounting standards for small and medium enterprises (SMEs).

　Firstly, it is questionable whether accounting standards for SMEs are validated in the presence of corporate accounting standards. Therefore, it is discussed whether each of these two standards contradicts the other, based on the relationship of accounting standards for SMEs to the Financial Instruments and Exchanging Act, Corporate Law and Tax Law.

　Secondly, since “auditing of accounting for SMEs(SME Audit)” is defined as “adjustment of books” and “the authenticity of the financial statements”, it is discussed whether the two kinds of accounting standards for SMEs serve the purpose of auditing both entities: financial institutions and SMEs.

　Thirdly, with “the position of accounting standards for SMEs in the whole accounting standards system” in mind, this paper examines “compliance (with accounting standards for SMEs)” and “appropriateness (of them in the respect that they show transactions properly, are consistent with the overall descriptions and contain the statements that they should contain).”

　In conclusions, “compliance” is found out to be what both “the Guideline of Accounting for SMEs” and “the Basic Guidance of Accounting for SMEs” correspond to. But, it is necessary to be pointed out that the concept of “considerable depreciation” inherent in “the Basic Guidance” will compel us to reconsider it in respect of “appropriateness” in auditing. It is also suggested that the reconsideration of “considerable depreciation,” too, is a future issue when appropriateness is an essential requirement for the “SME Audit.”

　Companies cannot grow and develop without funds. Problems related to financing are dominant in especially early stages of SMEs growth.

　In recent years, despite the improvement in the financial environment surrounding SMEs, it is said that financial situation of SMEs is still severe. SMEs in Japan are characterized by low capital ratio and high debt ratio. It is not easy for SMEs to get funds without effective guaranty. Therefore, SMEs are also attempting the try new methods of fund.

　This paper tries to introduce the methods of financing that may be applied to SMEs which is taken up in “New Approaches to SME and Entrepreneurship Financing: Broadening the Range of Instruments” published by the OECD (Organisation for Economic Co-operation and Development). With increasing the diversification of financing methods, this paper emphasizes the importance of disclosure of information including not only financial information but also non-financial information and prospective financial information. And with the disclosure of information, a problem of reliability assurance arises. This paper aims to present one direction from the viewpoint of institutional design.