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How SMPs are Adapting to Change through New Service Offerings and Better Practice Management
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How SMPs are Adapting to Change through New Service Offerings and Better Practice Management

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Presentation by Simant Prakash, IFAC SMP Forum June 2013

Presentation by Simant Prakash, IFAC SMP Forum June 2013

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  • To contain the rising inflation and weakening shilling, the Government took appropriate policy action by combination of tight monetary policy and fiscal restraint. The Central Bank of Kenya raised the Central Bank Rate (CBR) from 6.25% in May to 18.00% by December 2011.

How SMPs are Adapting to Change through New Service Offerings and Better Practice Management How SMPs are Adapting to Change through New Service Offerings and Better Practice Management Presentation Transcript

  • How SMPs are Adapting to Changethrough New Service Offerings andBetter Practice ManagementPresenter: Simant PrakashPartner Designate,RSM Ashvir
  • REVIEWCOMPILATIONASSURANCEENGAGEMENTSAUPASSURANCE REPORT STANDARDLIMITEDASSURANCECONCLUSION(NEGATIVEASSURANCE)ISRE 2400NO ASSURANCE NO CONCLUSION(REPORT ONCOMPILATION)ISRS 4410NO ASSURANCE NO CONCLUSION(REPORT ONFACTUALFINDING)ISRS 4400REASONABLE ORLIMITEDASSURANCEOPINION/CONCLUSIONISAE 3000, 3402,3410,3420
  • Reviews - ISRE 2400Apply when practioner is NOT the independent auditorof the entityLimited assuranceEvidence gathering to support the conclusion (evidencebased review)Primarily consists of inquiries and analyticsExistence of reliable accounting system and anacceptable financial reporting frameworkIn some cases required by law or regulations when anaudit is not required
  • Compilations - ISRS 4410No assuranceAssisting management with preparation andpresentation of financial information in accordancewith an applicable financial reporting frameworkUseful in SMEs which have external financial reportingrequirements e.g. to financiers/revenue authoritiesPractitioners involvement increases the userconfidence
  • Agreed Upon Procedures – ISRS 4400No assuranceFactual findings from performing specifiedproceduresUseful alone or in conjunction with compilations tomeet specific user needs
  • Assurance engagements International Framework on Assurance engagementsISAE 3000 – Other than audit or review of historicalinformation ISAE 3402 – Assurance reports on controls at serviceorganisation ISAE 3410 - Assurance reports on Green House GasStatements (New*)ISAE 3420 - Assurance Engagements to Report on theCompilation of Pro Forma Financial Information (PFI)Included in a prospectus (New*)
  • OpportunityRegulatory trends (rotation of audit firms,Independence/conflict of interest) Meet specific needs of SMEs. Buildingpanels/associations to source skill gapsLeveraging technology to provide cost effective servicestailored to needs of SMEsScalability from no assurance to reasonable assuranceConsolidationInvolvement with policy setters in the country
  • ChallengesRegulatory trends (Audit thresholds,Independence/conflict of interest) Building knowledge specialisation (understandingaccounting framework, industry information andbenchmarking, techniques for alternative offering)Audit scaling (Practioners performing more proceduresthan required)Fee levels (balancing quality and profitability)Availability and retention of quality staff
  • Better Practice Management Approachibility Confidentiality Understand the drivers of demand for your services (strongbrand, quality work, efficiency, competitive fees) Understand the drivers of price for your services (qualityperception, availability of competitors)Leveraging technology Building the human capital of your firm Understand your client mix and opportunities for increasingyour share of annual client spend
  • Better Practice ManagementProbabilityoftechnicalsuccessPEARL BREAD AND BUTTERHigh rewardLow reward-but no brainer projectsi.e. low time costOYESTER WHITE ELEPHANTSGood fees but low likelihood of technicalsuccess. Technical breakthrough will paveway for solid fees.Low technical success and low fees.High time cost and difficult to kill theproject in time. Can send companybroke.NPV (Reward)
  • This slide presentation has been prepared for general guidance only, and does not constitute professionaladvice. You should not act upon the information contained in these slides without obtaining specific professionaladvice. Accordingly, RSM Ashvir, its associates and its employees and agents accept no liability, and disclaim allresponsibility, for the consequences of anyone acting, or refraining from acting, in reliance on the informationcontained in these slides or for any decision based on it, or for any consequential, special or similar damageseven if advised of the possibility of such damages.The guidance reflects personal views of the presenter.RSM Ashvir is a member firm of RSM International, a worldwide network of accounting and consulting firms.RSM International does not offer professional services in its own name. Each member firm of RSM Internationalis a legally separate and independent national firm and is not a member of one international partnership, andmember firms are not legal partners with each other. One member firm is not responsible for the services or actsof any other member firm.
  • THANK YOU