Business advice by accountants to SMEs: relationship and trust

Blackburn, Robert, Carey, Peter and Tanewski, George (2014) Business advice by accountants to SMEs: relationship and trust. In: 27th Annual Small Enterprise Association of Australia and New Zealand (SEAANZ) Conference 2014: Enhancing SME Success in the Digital Economy; 16-18 Jul 2014, Sydney, Australia. (27th Annual Small Enterprise Association of Australia and New Zealand (SEAANZ) Conference Proceedings)

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Abstract

Accountants are the most frequently used source of business advice by SMEs. Yet there is little theoretical understanding of this relationship. In this paper we investigate the influence of relationships and trust on decisions by SMEs to purchase non-compliance advice from their external accountants, drawing upon Mayer, Davis and Schoorman’s (1995) model of trust. In-depth interviews with accountants and SME owner-managers support the proposition that relationships and trust are necessary conditions for enabling latent business advice demand. Integrity and empathy are two dimensions of trust, and both qualities appear fundamental to the accountant’s ability to retain SME clients. But they do not directly influence SME decisions to purchase subsequent business advice. The analysis shows it is the specific competence of the external accountant that directly influences the SME’s business-advice purchase decision. SME managers and principals with less trusting natures require accountants to clearly demonstrate their competence, usually following a significant business challenge, before business advice is sought. SME owner-managers with more trusting natures are more open to buying business advice, but the market is competitive. Overall, the a priori assumption that an already established relationship developed through compliance services will lead an SME to buy business advice is not supported.

Item Type: Conference or Workshop Item (Paper)
Event Title: 27th Annual Small Enterprise Association of Australia and New Zealand (SEAANZ) Conference 2014: Enhancing SME Success in the Digital Economy
Organising Body: Small Enterprise Association of Australia and New Zealand
Research Area: Business and management studies
Faculty, School or Research Centre: Faculty of Business and Law
Faculty of Business and Law > Small Business Research Centre
Depositing User: Robert Blackburn
Date Deposited: 14 Nov 2014 12:19
Last Modified: 14 Nov 2014 12:19
URI: http://eprints.kingston.ac.uk/id/eprint/29617

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