At the present time we are faced with extremely rapid changes taking place in the economy. A huge part of the economy is made by small and medium enterprises. In Croatia is registered even 99.7% of small and medium-sized enterprises, of total registered entities. They make a breakthrough in the economy and are increasingly gaining in importance, so they need special attention. Conditions and procedures for the establishment of small and medium-sized businesses in this time are more and simpler, as it is evidenced by the existence of e-business, which allows the establishment of the company within 24 hours. The most common legal forms of organization of small and medium-sized enterprises are crafts, company and Limited Liability Company. The behaviour of businesses is determined by various laws, regulations and standards. Code of conduct and presentation of financial statements are provided in the normative framework consisting of accounting principles, accounting standards and legislation. As for the legislation, an important role in preparing the financial statements has the Accounting Act, and it regulates operations of the company. For small and medium-sized enterprises were adopted specific standards of financial reporting, and these are the Croatian Financial Reporting Standards (CFRS). The major emphasis in the small and medium enterprises is on the process of harmonization of accounting regulations and the most important instrument of harmonization is the standardization of accounting. Accounting information is becoming increasingly important tool by which management manages the company. To make accounting information useful, it must be obvious to users, reliable and neutral in the sense that favourable interest. Modern life requires the application of modern information communication technology, and it is therefore necessary to timely adopt new trends and thereby gain competitive advantage over other companies. To successfully functioning company, all of its elements should be harmonized, and because business often occur deviations from pre-set rules, it is important to control the introduction of such a mechanism that will ensure the high-quality of company's business.