Press Releases/News Alerts
IFAC Poll: Economic Uncertainty Poses Biggest Challenge to Small Businesses
The effects of the financial crisis continue to be felt by small businesses, according to the small- and medium-sized accountancy practitioners recently polled by the International Federation of Accountants. Economic uncertainty is still the biggest challenge facing small- and medium-sized entities (SMEs), said the largest group of respondents—nearly 30%—while the burden of regulation was a close second. Regulations and standards challenge small- and medium-sized accounting practices (SMPs) as well: over 40% said that keeping up with regulations and standards is the most important issue now facing their practice.
Despite the prevalence of economic uncertainty, nearly 40% of SMPs expect their practices to perform better this year than last year. Only slightly more (43%) expect business to be even with 2010, and 19% expect business to shrink in 2011.
SMPs continue to generate the largest proportion of their revenue from traditional compliance-based services. Nearly 45% of respondents indicated that audit and assurance is their biggest source of revenue, followed closely by accounting and compilation (40%). Tax and advisory/consulting services comprised only 15% combined.
With the aim of taking a snapshot of the key issues confronted by SMPs and their SME clients, the IFAC SMP Quick Poll will be issued quarterly throughout 2011 in the SMP eNews, IFAC’s free newsletter for SMPs. The first Quick Poll collected 425 responses from all regions of the world over a 14-day period (January 27, 2011 to February 9, 2011). To subscribe to the SMP eNews, and participate in our next poll, sign up here.
IFAC wishes to thank those member bodies and regional organizations that published the poll in their newsletters, or otherwise helped promote it. The full survey results are available here.
IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.