Competency Building of SMEs in Emerging Milieu: IFAC Perspective

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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. 1. Competency Building of SMEsin Emerging Milieu: IFACPerspectiveGiancarlo Attolini, Chair. Small andMedium Practices (SMP) CommitteeICAI International ConferenceChennai, IndiaJanuary 7, 2012 Page 1 | Confidential and Proprietary Information
  2. 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.” Page 2 | Confidential and Proprietary Information
  3. 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 Page 3 | Confidential and Proprietary Information
  4. 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 Page 4 | Confidential and Proprietary Information
  5. 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 Page 5 | Confidential and Proprietary Information
  6. 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 Page 6 | Confidential and Proprietary Information
  7. 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 Page 7 | Confidential and Proprietary Information
  8. 8. Page 8 | Confidential and Proprietary Information
  9. 9. Page 9 | Confidential and Proprietary Information
  10. 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 Page 10 | Confidential and Proprietary Information
  11. 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 Page 11 | Confidential and Proprietary Information
  12. 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 Page 12 | Confidential and Proprietary Information
  13. 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 Page 13 | Confidential and Proprietary Information
  14. 14. Thank youwww.ifac.org/smp Page 14 | Confidential and Proprietary Information

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