Financial Reporting by Small Privately-held Corporations: Exploring Stakeholder Rights to Accountability in the US and the UK.

This paper compares the US and UK financial reporting frameworks for small privately-held limited liability companies to explore stakeholder accountability. While public accountability is controversial in the US, the view in the UK is that the price of limited liability is the publication of accounts. In terms of stockholder accountability, the UK Companies Act 2006 requires all limited liability entities to prepare financial statements for members. US private company reporting requirements are governed by State legislation, and as no research has ever comprehensively reviewed these, this paper contributes to the literature by assessing them against nine key accounting metrics. In contrast to the UK, no US State requires public filing, with 27% even lacking a requirement for private corporations to produce periodic financial statements for owners. The study has important implications for stakeholders of US private companies, and highlights issues with present accounting arrangements. [ABSTRACT FROM AUTHOR]