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Finance, Accounting and Business Analysis 
Volume 3 Issue 2, 2021 

http://faba.bg 

Determinants of Bounded Rationality Theory to The Use of Indonesian 

Accounting Standards for Non-Publicly-Accountable Entities in SMEs 

Siti Maghfiroh, Dona Primasari*  

Jenderal Soedirman University, Indonesia 

Info Articles  
 

Abstract 

Keywords:  
Indonesian Accounting Standards for 
Non-Publicly-Accountable Entities, 

SME, bounded rationality theory  

 

  
The long term purpose of this research is to enrich the development of knowledge, 
especially the development of SMEs related to the adoption of Indonesian 
Accounting Standards for Non-Publicly-Accountable Entities using the concept of 

bounded rationality theory. The specific purpose of this research is to figure out the 
factors influencing the Indonesian Accounting Standards for Non-Publicly-
Accountable Entities in SMEs in Banyumas Regency. The research data were 
collected by distributing questionnaires through online media to the SME actors in 
Banyumas as the research respondents.  A random sampling technique was used to 
collect the samples. The data were then analyzed using the Statistical Product and 

Service Solution (SPSS) version 22.0. The research results have empirically proved 
that the concept of bounded rationality theory can explain the factors influencing 
the adoption of Indonesian Accounting Standards for Non-Publicly-Accountable 
Entities in SMEs in Banyumas Regency. 

 

  

   

*Address Correspondence:   

E-mail : dona_primasari@yahoo.com 

 
 

 

 



Finance, Accounting and Business Analysis 3 (2) 2021 

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INTRODUCTION 

 
Small and Medium Enterprises (SMEs) have an important role in Indonesian economy. Based on 

the data from the Ministry of Cooperatives and SMEs, there were more than 40 million SMEs or more 

than 90% of total business units. These segments have absorbed the workforce of 90 million people or 

more than 95% of the total workforce. Moreover, the Indonesian Chamber of Commerce and Industry has 
predicted that the SMSEs and cooperatives still grew 20%-25% during 2019 enhancing the investment 

growth (Bisnis Indonesia, 2019). 

Having a strategic role, developing SMEs is not easy. SMEs have quite complex problems. Dodge 
& John, Xeeli & Allan, (2009), and Barbara et al. (2009), stated that problems in the field of financial 

transaction records and management greatly influence the development of SMEs. The financial 

transaction records in SME business activities deal with understanding the standards used in the financial 

records of SME operational activities. In 2009, The Institute of Indonesia Chartered Accountants (known 
as IAI/Ikatan Akuntan Indonesia) has published “Indonesian Accounting Standards for Non-Publicly-

Accountable Entities (known as SAK ETAP/ Standar Akuntansi Keuangan untuk Entitas Tanpa Akuntabilitas 

Publik)”. This Indonesian Accounting Standards for Non-Publicly-Accountable Entities is expected to 

facilitate SMEs in arranging their reports.  
The essential obstacle to reach success for a new system implementation is poor attention to 

behavioral factors during the implementation. Besides, there were only few studies paying attention to the 

behavioral factors during the implementation stage of a new system and their influences to satisfaction and 
performance (Cavallozo and Ittner, 2004).  

 

Review of Theory 

 

Bounded rationality theory 
Simon's theory of bounded rationality (1957) explains why humans fail to think fully rationally. 

This is due to, 1. limited ability to obtain information, 2. use of judgmental heuristics. Heuristics are basic 

rules or shorthand ways that a person uses to simplify the processing of information into memory (brain). 

There are two kinds of judgmental heuristics, namely the tendency to base on information in memory 
(availability heuristics) and the tendency to judge something based on what he already knows 

(representativeness heuristics). The fundamental principle of cognition states that our actions are 

determined by mental representations of the situation, not by the situation directly. The implications of the 
framing effect in making decisions, like other cognitive activities, all depend on the view of the situation 

we face ourselves, that is, our perception of the situation will determine our behavior. 

 

Small and Medium Enterprises (SMEs) 

According to Law no. 20 of 2008 the definition of SMEs is as follows:Small business is a 

productive economic business that stands alone, which is carried out by individuals or business entities 
that are not subsidiaries or branches of companies that are owned, controlled or become a part either 

directly or indirectly of medium or large businesses. 

 

Indonesian Accounting Standards for Non-Publicly-Accountable Entities 

According to IAI in SAK ETAP 1.1 (2009), Accounting Standards for Entities Without Public 

Accountability (SAK ETAP) are intended for use by entities without public accountability. Financial 
Accounting Standards for Entities Without Public Accountability (SAK ETAP) or The Indonesian 

Accounting Standards for Non-Publicly-Accountable Entities, and was approved by DSAK IAI on May 

19, 2009. 
The bounded rationality theory developed by Simon (1997) explained why humans failed to 

completely think rationally. The causes include: 1). Limited ability to obtain information and 2). Using the 

judgmental heuristics. Heuristic is the basic rule or the shortcut used by someone to simplify processing 

information to the memory (brain). There are two judgmental heuristic types: tendency based on the 
information existing in the memory (availability heuristic) and tendency valuing something based on what 

he/she has known before (representativeness heuristic). 

This research tried to apply an alternative model expected to possibly explain the implementation 

process phenomena of Indonesian Accounting Standards for Non-Publicly-Accountable Entities in SMEs 
in Banyumas Regency.  

According to the mentioned theoretical and conceptual framework and based on the study’s 

problem, questions and objectives, our hypotheses are placed as follows: 
H1 :  concept of rationality  has an affects to the implementation of SAK ETAP on SMEs in Banyuma 

Regency 



Finance, Accounting and Business Analysis 3 (2) 2021 

173 

 

H2 :  limitations of obtaining information has an affect  to the implementation of SAK ETAP on SMEs in 
Banyumsa Regency 

H3 : availability heuristics and representativeness heuristics has an  affect to the implementation of SAK 

ETAP on SMEs in Banyumas Regency 

 

RESULTS AND DISCUSSION 

 

The Influence of rationality concept on the implementation of Indonesian Accounting Standards for 

Non-Publicly-Accountable Entities 

The results of data analysis showed that rationality concept influenced the implementation of 
Indonesian Accounting Standards for Non-Publicly-Accountable Entities.  It means that the higher the 

rationality attitude of SME actors to the benefits of Indonesian Accounting Standards for Non-Publicly-

Accountable Entities, the greater the influence on its acceptance to the use of Indonesian Accounting 
Standards for Non-Publicly-Accountable Entities in managing the finance of SMEs in Banyumas Regency. 

The SME actors in Banyumas Regency felt that the easiness in learning and using the Indonesian 

Accounting Standards for Non-Publicly-Accountable Entities can facilitate the efforts to manage their 

business finance. The easiness felt by the SME actors increased the confidence of SME actors in Banyumas 
Regency to use the Indonesian Accounting Standards for Non-Publicly-Accountable Entities. 

The result of this research was in line with the concept of bounded rationality theory previously 
conducted by Perrin et al. (2001), Mclntosh (2003) explained that framing in bounded theory influenced 

someone’s decision since an individual perceived the profit and loss differently depending on conditions.  

This research supported the study conducted by Candra (2009) analyzing the influence of individual 

investor’s competencies on investor’s trading behaviors in the stock markets, and that conducted by 

Irwandi (2019) revealing the influence of rational thinking on auditor’s ability in detecting fraud. 
 

The influence of limited information to the implementation of Indonesian Accounting Standards for 

Non-Publicly-Accountable Entities  

The results of data analysis showed that limited information negatively influenced the 
implementation of Indonesian Accounting Standards for Non-Publicly-Accountable Entities.  The bounded 

rationality theory developed by Simon (1997) explained why humans failed to completely think rationally. 

One causing factor is someone’s limitation to obtain information.  That result was in accordance with the 

facts found in the field experinced by the SME actors in Banyumas Regency. Most SME actors in 

Banyumas Regency have not understood what the Indonesian Accounting Standards for Non-Publicly-
Accountable Entities is. Thus, it is greatly necessary to socialize the Indonesian Accounting Standards for 

Non-Publicly-Accountable Entities. The SME actors have not completely understood that the 

implementation of Indonesian Accounting Standards for Non-Publicly-Accountable Entities in arranging 

the SME financial reports will provide various benefits to the business management. One of the facilities is 
easiness in obtaining capital from the external parties (financial institutions) or investors. The limited 

information related to the Indonesian Accounting Standards for Non-Publicly-Accountable Entities will 

inhibit the implementation processes of Indonesian Accounting Standards for Non-Publicly-Accountable 
Entities.   

The result of this research supported the study conducted by Wulandari (2011), Prasetyani (2011) 

mentioning that the Indonesian Accounting Standards for Non-Publicly-Accountable Entities has not been 

implemented as the guidance in arranging the SME financial reports in Batik Laweyan Kampong areas. 
SMEs have not been able to present the financial reports in accordance with the Indonesian Accounting 

Standards for Non-Publicly-Accountable Entities because SMEs have not known about the existence of 

Indonesian Accounting Standards for Non-Publicly-Accountable Entities regulating the financial report 
standards for their managed entities. 

 

The influence of availability and representative heuristic factors to the implementation of Indonesian 

Accounting Standards for Non-Publicly-Accountable Entities 

The results of data analysis showed that availability and representative heuristic influenced the 

implementation of Indonesian Accounting Standards for Non-Publicly-Accountable Entities.  This was in 
accordance with the concept of bounded rationality theory developed by Simon (1997) explaining the use 

of judgmental heuristics. Heuristic is the basic rule or the shortcut used by someone to simplify processing 

information to the memory (brain). There are two judgmental heuristic types: tendency based on the 
information existing in the memory (availability heuristic) and tendency valuing something based on what 

he/she has known before (representativeness heuristic). 

The tendency of availability and representative heuristic on SME actors in Banyumas Regency 

will support the acceptability of implementation proseses of Indonesian Accounting Standards for Non-



Finance, Accounting and Business Analysis 3 (2) 2021 

174 

 

Publicly-Accountable Entities.  The higher the tendency perception of availability and representative 
heuristic on SME actors in Banyumas Regency related to the Indonesian Accounting Standards for Non-

Publicly-Accountable Entities, the higher the positive attitudes to use the Indonesian Accounting 

Standards for Non-Publicly-Accountable Entities belonging to those SMEs. The SME actors in Banyumas 

Regency felt that the easiness in learning and using the Indonesian Accounting Standards for Non-
Publicly-Accountable Entities can facilitate their efforts to manage the business finance. The easiness felt 

by the SME actors increased the positive attitudes of SME actors in Banyumas Regency to use the 

Indonesian Accounting Standards for Non-Publicly-Accountable Entities. The result of this research 
supported the concept of bounded rationality theory developed by Simon (1997). 

 

 

CONCLUSION  

 
Theoretically, the research results have proven that the concept of bounded rationality theory 

influences the intention in using the Indonesian Accounting Standards for Non-Publicly-Accountable 

Entities in Banyumas Regency. The results of this research support the concept developed by Simon 

(1997). The use of Indonesian Accounting Standards for Non-Publicly-Accountable Entities has proven 

not completely understood by the SME actors in Banyumas regency, due to their lack of understanding in 
arranging the financial reports and minimum information related to the Indonesian Accounting Standards 

for Non-Publicly-Accountable Entities. 

This research suggests that the government, especially the Workforce, Cooperative, and SME 
Offices should actively play their important role in socializing the benefits of Indonesian Accounting 

Standards for Non-Publicly-Accountable Entities to the SME actors in Banyumas Regency. This study was 

only conducted in the Banyumas Regency area, so it cannot be generalized. In addition, the COVID-19 

pandemic situation has resulted in difficulties in communicating directly with the respondents. 
 

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