Challenges of Implementing the International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs) within the Start-up Ecosystem in Algeria

Abstract

This article analyzes the challenges associated with the potential implementation of the International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs) within the Algerian start-up environment—a context characterized by recent emergence, heavy reliance on digital innovation, and operational volatility. The study is guided by a central research question: To what extent can IFRS for SMEs be adapted and applied to Algerian start-ups, and what factors hinder or support its adoption within the national accounting system (SCF)?. To address this question, the article examines the conceptual framework and accounting specificities of start-ups, then assesses the compatibility of the Algerian accounting system with international requirements. It further compares the Algerian experience with successful international cases to draw relevant lessons. The findings indicate that implementation faces several institutional, professional, and digital challenges, most notably the absence of a clear legal framework, limited accounting expertise, and insufficient digital tools for financial disclosure. Conversely, the standard offers significant opportunities to enhance financial reporting quality and investor confidence. The article concludes by emphasizing the need for a gradual and flexible approach to adapting IFRS for SMEs to the specific needs of start-ups to support Algeria's knowledge-based economy.