7 The status of financial accounting standards for SMEs in Japan and the Philippines

The purpose of this study is to examine how the financial accounting standards for SMEs are constituted in these two countries with different characteristics from the perspective of the concepts of a standards model and the approaches to standards setting. This research perspective is not new. The concepts of a standards model were discussed in terms of the ‘Big GAAP versus Little GAAP’ until the 1990s. Moreover, the arguments involving standards setting are similar to recent discussions on whether the standards should be set within the framework of the generally accepted accounting principles (GAAP) or not.