Presentation by the chair of the IFAC Small and Medium Practices Committee in January 2012 at the Institute of Chartered Accountants in India International Conference.
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Competency Building of SMEs in Emerging Milieu: IFAC Perspective
1. Competency Building of SMEs
in Emerging Milieu: IFAC
Perspective
Giancarlo Attolini, Chair. Small and
Medium Practices (SMP) Committee
ICAI International Conference
Chennai, India
January 7, 2012
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2. IFAC’s Mission
“… is to serve the public interest by: contributing to the
development, adoption and implementation of high-quality
international standards and guidance; contributing to the
development of strong professional accountancy
organizations and accounting firms, and to high-quality
practices by professional accountants; promoting the
value of professional accountants worldwide; and
speaking out on public interest issues where the
accountancy profession’s expertise is most relevant.”
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3. IFAC and ICAI
• ICAI is one of IFAC’s largest and most influential members
• ICAI brings much SMP expertise and insights, greatly
assisting SMP Committee projects
• ICAI is strong advocate for SMP issues within IFAC
• ICAI is one of founding members of SMP Committee
• IFAC supports ICAI’s efforts to build capacity of SMPs and
PAIB in SMEs, especially CCBCAF and SMP
– Consolidation of practices, empowerment of SMPs, upgrading knowledge
and skills, develop practice areas, etc.
– Many initiatives complement IFAC SMP Committee activities
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4. IFAC’s Key Policy Statements
• Single set of auditing standards
– ISAs are designed for audit of entities of all sizes; can be applied in a
manner proportionate with size and complexity of entity
– It’s in the public interest that users of financial statements have confidence
that audits are performed to same high standard
– Improved audit quality and efficiency, but possible additional costs
• Does not support further prohibition of non-audit services
• Recognizes that SMEs hold key to economic growth
• Recognizes need for strong SMP sector; improve choice
and competition in market for assurance and advice
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5. SMP Committee’s Objectives
• Helping IFAC member bodies support their SMPs
• 18 members from 18 countries spanning all regions
• ICAI member is presently Uttam Prakash Agarwal
(previously Sunil Goyal and Kamlesh Vikamsey)
• Became committee in January 2006
• Meets 3 times a year
• Annual SMP Forum
• 2 full-time equivalent staff in support
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6. SMP Committee’s Objectives
• Participate in policy-making and regulatory dialogue
– Relevant, stable and proportionate for SMEs and SMPs
– European Commission Green Paper on Audit Policy, G-20, etc.
• Input to development of international standards
– Relevant, stable and proportionate for SMEs and SMPs
– IESBA: SME/SMP Working Group, WG’s recommendations to Board, CAG
representation
– IAASB: Letters, CAG representation, staff liaison etc. – Clarity
ISAs, implementation monitoring, audit quality, ISRE 2400 (review
engagements), ISRS 4410 (compilations)....
– IFRS for SMEs: regular input and now representation on SME
Implementation Group
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7. SMP Committee’s Objectives
• Raise awareness of importance of SME sector and role of
SMPs (voice and visibility)
– SMP Quick Poll
– Member body articles
– SMP eNews, Twitter, Discussion Board….
– Annual SMP Forum
• Provide practical support to SMPs (all free!)
– Helping member bodies to help their SMPs provide high quality
professional services
– Website - www.ifac.org/smp
– Guides - ISA, Quality Control and Practice Management
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10. SMP Quick Poll
• Quarterly global poll started in Jan/Feb 2011
• 2,500 SMPs responded to Q4 poll (full results soon)
• Some of key findings
– Regulatory burden and keeping up with new regulations and standards
consistently top concern for SMEs and SMPs respectively through 2011
(especially in Asia)
– Pace of change is main source/reason for burden
– Economic uncertainty and difficulties accessing finance are also major
concerns for SMEs
– In Asia attracting/retaining clients and adapting to changing client needs
are top challenges for SMPs
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11. SMP Quick Poll (cont…)
• Some of key findings
– SMPs think 2012 will be better than 2011 (especially Asia)
– Top drivers of practice growth in 2012 are additional revenue from existing
clients and revenue from new clients
– Accounting and compilation main revenue earner
– Advisory growth impeded by ‘partner time’ and ‘marketing services to
clients’
– New advisory clients driven primarily by existing client relationships
– Tax consulting biggest area of business advisory
• Polling will continue in 2012 with more regional analysis:
please support us
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12. Future Challenges
• IFAC and member bodies facing financial constraints
• Effective collaboration with member bodies
• Catering to a diverse SMP constituency
• Help SMPs adapt to change
– Competition from unqualified & non-accountants
– Growth of business advisory
– Sustainability agenda
– IT developments – cloud computing
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13. IFAC Upcoming Events: SMP Forum
Listen
Learn
Debate
Collaborate
Regarding the unique
opportunities and
challenges facing SMPs
and their small- and
medium-sized entity
(SME) clients
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