Date of Award

1989

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Accounting

First Advisor

Bart P. Hartman

Abstract

Since the energy-crisis days of the early 1970's, the United States' economy has been gradually moving from reliance on manufacturing operations to a reliance on service industries. This shift has lead to an abundance of opportunities in the area of small business development. In response to these opportunities, the small business sector has undergone substantial growth. One problem associated with this growth is the procurement of financing for small business startups. Since most entrepreneurs do not have the financing options available to large corporations, the majority of small business startups involve owner bank borrowing, often with the assistance of the Small Business Administration (SBA). Many SBA loans fail. Although the reasons for failure are as diverse as the businesses themselves, one reason often cited is that small business owner/managers do not understand the informational content of accrual based financial statements. As a result, they are not able to react to the changes taking place within their businesses which are communicated to them through their balance sheets and income statements. The purpose of this study was to test whether a training intervention for financial statement risk identification could help small business owners to better understand their financial statements. A sample of 80 small business owner/managers were invited to attend a small business seminar. The sample was divided into two groups. The experimental groups received training, while the control group received a placebo treatment. A pretest-posttest experimental design was used. Attitudinal and demographic data was also gathered to determine what effect these factors had on success in training. Results of the experiment indicated that the experimental group which received the training had a significantly higher level of financial statement understanding as measured by the posttest scores. The analysis of the demographic data indicated that the training was effective across all levels of age, income, race, social background and years of management experience gathered. Of the attitudinal variables measured, only the "job involvement" was a significant predictor of success in training. The results of this study suggest that perhaps training in financial statement analysis should be a prerequisite to SBA lending.

Pages

186

DOI

10.31390/gradschool_disstheses.4705

Download

Share

COinS