Warren Allen - Setting the Scene: SME and SMP Landscape

Session 1: Setting the Scene:SME and SMP LandscapeWarren Allen, IFAC Deputy PresidentIFAC SMP ForumSingaporeMarch 19, 2012 Page 1 | Confidential and Proprietary Information

Singapore—Developing into a Global Hub Page 2 | Confidential and Proprietary Information

Importance and Value of SMPs and SMEs A Public Interest Issue Key to Recovery Choice & from Competition Financial Crisis Page 3 | Confidential and Proprietary Information

2011 Global Leadership SurveyHighest Priority Service Areas for IFAC70% 61%60% 48%50% 39% 38%40% 28%30% 22% 19%20% 13% 12% 11% 10%10% 0% IESBA Integrated Reporting/IIRC SMP Committee Translations & PAIB Committee Public Policy and Compliance Advisory IPSASB PAO Development IAESB IAASB Permissions Regulation Committee Panel Page 4 | Confidential and Proprietary Information

0% 10% 20% 30% 40% 50% 60% Reputation and credibility 53% of the profession Needs of SMPs and 52% SMEs The difficult global 52% financial climate Issues related to the European Union (EU) 44% draft legislation Public sector financial management and 38% 2011 Global Leadership Survey sovereign debt issues Increased regulation 34% Global regulatory 30% convergence Auditor independence 28% 40% 44% 48% 52% 56% Role of PAIB 28% Corporate governance 21% Integrated reporting and 20% sustainability 53% Profession Attracting new talent to Reputation and 18% the profession Credibility of the IT and innovation in 15% accounting and auditing Micro-entity financial 14% reporting The competency of 52% SMEs financial statement 13% preparers Anti-money Needs of SMPs and 13% laundering/anti-corruption Most Significant Issues Facing Profession in 2012 Changing role of PAOs 12% What it means to be a professional and belong 9% to a profession 52% International taxation 5% policy differences Financial ClimatePage 5 | Confidential and Proprietary Information The Difficult Global

0% 10% 20% 30% 40% 50% 60% 70% Reputation and credibility 60% of the profession Needs of Small and 45% Medium Practitioners… Public sector financial 43% management and… The difficult global 37% financial climate Auditor independence 27% Global regulatory 24% convergence 2011 Global Leadership Survey Role of the professional 24% accountant in business Integrated reporting and 23% sustainability The competency of 23% financial statement… Attracting new talent to 23% the profession 0% 10% 20% 30% 50% 60% 70% 40% Corporate governance Changing role of 22% 19% professional… 60% Increased regulation Audit firm market 18% 17% structure and… Micro-entity financial reporting What it means to be a professional and… 45% Profession Anti-money laundering/anti-corruption Audit firm rotation Public Policy Areas IFAC Should Speak Out On Restriction of non-audit services 43% Information technology and innovation in… Needs of SMPs 13% 11% The Difficult Role of audit committees Joint audits 6% 37% International taxation 4% policy differencesPage 6 | Confidential and Proprietary Information Reputation and Credibility of the17% Financial SMEs 11% 10% 10%Global Financial Public Sector 15% and Management and Sovereign Debt Is

IFAC’s Support for SMPs• SMP Committee• Standard Setting – IESBA SME/SMP Implementation Group – Input from the SMP Committee• Public Policy and Regulation – PPP 2 Page 7 | Confidential and Proprietary Information

Changing Global Landscape Challenges Opportunities Increase Economic Marketing Efforts Uncertainty to Win New Clients Develop a Reduced Audit Business Requirements Advisory Practice Page 8 | Confidential and Proprietary Information

Changing Global Landscape Challenges Opportunities Join International Internationalization Network or of SMEs Association of Practices Increased Embrace Competition and Fee Technology, Including Pressure Cloud Computing Page 9 | Confidential and Proprietary Information

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Warren Allen - Setting the Scene: SME and SMP Landscape

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