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.

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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14. Thank you
www.ifac.org/smp
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