ABSTRACT
This chapter aims to contribute research on the development of small and medium-sized enterprises (SMEs) in Sweden and internationally by focusing on the topic of banks’ risk assessment, which is an essential step in the growth and survival of a small firm. It discusses existing research on the provision of advisory services to SMEs by banks and auditors, the loan assessment process for SMEs, and the importance of audited financial information and auditors’ assurance in this process. The chapter explains when and why SMEs both need and use support/advisory services and what the most common sources of support are for SMEs. It provides an overview of the loan assessment process for SMEs and discusses the different factors that loan officers need to take into account. The chapter also discusses the role of financial information in general and provides an overview of research relating to the value of auditor assurance in the credit granting context.
