ANALYSIS OF FINANCIAL REPORTING PRACTICES BASED ON SAK-EMKM FOR BUSINESS DEVELOPMENT: A CASE STUDY OF THE “MURNI” FRIED SHALLOT HOME INDUSTRY IN TRENGGALEK, INDONESIA

Abstract

Financial reporting plays an important role in supporting the sustainability and development of Micro, Small, and Medium Enterprises (MSMEs). However, many MSMEs in Indonesia still experience difficulties in preparing financial statements in accordance with the Financial Accounting Standards for Micro, Small, and Medium Entities (SAK-EMKM). This study aims to analyze the preparation of financial statements and identify the obstacles and solutions related to the implementation of SAK-EMKM in the “Murni” Fried Shallot Home Industry owned by Bu Wati in Karangan Village, Trenggalek Regency. This research employed a qualitative descriptive approach. Data were collected through interviews, observations, and documentation and were analyzed descriptively to obtain a comprehensive understanding of the financial reporting practices within the business. The findings reveal that the enterprise still applies a simple and manual recording system that mainly focuses on sales, purchases, profits, employee salaries, and operational expenses. Financial statements have not yet been prepared in accordance with SAK-EMKM due to limited knowledge regarding accounting accounts, depreciation measurement, and financial reporting procedures. The study also found that the owner and employees lack adequate accounting knowledge and have not received sufficient training regarding SAK-EMKM implementation. Therefore, participation in accounting training programs organized by government agencies and self-learning through various educational resources are recommended to improve the quality of financial reporting. The implementation of SAK-EMKM is expected to enhance financial accountability, support business decision-making, and promote sustainable business growth.