Abstract

This study examines the financial reporting practices of Jenang Teguh Raharjo, a micro, small, and medium-sized enterprise (MSME) in Ponorogo, Indonesia, in relation to the Financial Accounting Standards for MSMEs (SAK EMKM). Specifically, it investigates: (1) the process by which the enterprise compiles its financial statements, (2) the challenges encountered during preparation, and (3) the extent of the enterprise’s understanding of financial presentation aligned with SAK EMKM. Employing a qualitative descriptive approach, data were collected through observation, interviews, and document analysis. The findings indicate that the enterprise has not yet adopted SAK EMKM and currently prepares its financial reports based on personal interpretation rather than formal accounting standards. Moreover, the enterprise recognizes that its financial statements do not accurately reflect business performance or growth. These results underscore the need to promote accounting literacy and the application of standardized financial practices among MSMEs to improve transparency, financial decision-making, and long-term sustainability.