ANALYSIS OF BUSINESS ACTORS’ PERCEPTIONS AND UNDERSTANDING OF THE IMPORTANCE OF FINANCIAL STATEMENTS FOR MSMES IN PUPUAN DISTRICT

Abstract

Micro, Small, and Medium Enterprises (MSMEs) have an important role in supporting economic growth in Indonesia. However, many MSME owners still do not prepare proper financial statements because they believe financial reporting is difficult and unnecessary for small businesses. This study aims to analyze the effect of business actors’ perceptions and understanding on the importance of financial statements for MSMEs in Pupuan District. The research used a quantitative approach with a causal research design. Data were collected through questionnaires distributed to 120 MSME owners in Pupuan District. The data were analyzed using SPSS version 26 through validity tests, reliability tests, classical assumption tests, multiple linear regression analysis, t-tests, F-tests, and coefficient of determination tests. The results show that business actors’ perceptions have a positive and significant effect on the importance of financial statements with a significance value of 0.001. Business actors’ understanding also has a positive and significant effect on the importance of financial statements with a significance value of 0.000. Simultaneously, perceptions and understanding significantly influence the importance of financial statements among MSMEs in Pupuan District with an F-count value of 42.671 and significance value of 0.000. The Adjusted R Square value of 0.548 indicates that perceptions and understanding explain 54.8% of the variation in the importance of financial statements. This study shows that positive perceptions and better accounting understanding encourage MSME owners to prepare financial statements more consistently. Financial reports are considered useful for controlling business finances, evaluating business performance, and supporting decision-making.