Does Simplified Accounting Limit Small and Micro Companies' Access To Bank Financing?

Enterprises that use simplified accounting can provide less information to lenders, thereby possibly hampering risk analysis. In this paper I investigate whether simplified accounting is a barrier for Polish Small and Medium-sized Entities (SMEs) enterprises to access financing resources, or makes funding more expensive for them. Telephone interviews with managers of banks and a review of statistical data are used to show that simplified accounting methods may influence the cost of capital of Polish SMEs, but it does not create a barrier to accessing external sources of financing.