Articles
DOI DOI: 10.5281/zenodo.18435534

Financial Reporting Alignment and Tax Compliance in Small and Medium-Sized Enterprises A Two-Year Case Study Based on IFRS for SMEs in Kosovo (2024–2025)

Arjeta Rexhepi1
  1. 1 University of Gjilan “Kadri Zeka” adress, Zija Shemsiu Street No. 183, 60000 Gjilan, Kosovo

Abstract

The aim of this paper is to examine the practical application of SME accounting
within the institutional framework and regulatory context in (KKRF/KCFR),
the IFRS for SMEs Accounting Standard, as well as in state tax reporting
requirements. Based on a 2-year financial reporting case (2024-2025), the paper
prepares the set of general purpose financial statements: statement of financial
position, statement of comprehensive income, statement of changes in equity and
cash flow statement. The focus of the analysis is on reconciliation of accountingbased measures of income with taxable income, emphasizing the distinction
between traceability and numerical identity in accounting–tax conformity. With
respect to the methodology, an important contribution lies in the handling of
partial accounting data, more particularly missing opening cash balances. Through
the classification of the balancing item as owner withdrawals, with statement that
this treatment is made for purposes of faithful representation, comprehensibility
and adherence to IFRS for SMEs principles without compromising reported
profitability, the research shows how these objectives – faithful representation
and internal consistency, in particular - do not have to be sacrificed. The results
suggest that disclosure-oriented reporting and formal reconciliation processes
considerably improve the reliability, comparability, and inspection desirability
of SME financial statements. The paper provides pragmatic implications for
transition economies, in which institutional barriers and lack of documentation
often impede the quality of financial reporting.

How to Cite

Rexhepi, A. (2026). Financial Reporting Alignment and Tax Compliance in Small and Medium-Sized Enterprises A Two-Year Case Study Based on IFRS for SMEs in Kosovo (2024–2025). Transnational Academic Journal of Economics, 3(1), 52–65. https://doi.org/10.5281/zenodo.18435534
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