SMP eNews: December 2011

    Filter By

     
     

    Newsletters & eNews

    Dec 06, 2011
    New York, New York

    English

    SMP Committee

     

    Find more news & events related to:
    SMP/SME

    Keep Updated
    Get the latest news delivered to your inbox.

    Get the latest updates delivered straight to your inbox
     

    SMP eNews: December 2011

    In This Issue:

    1. Fourth SMP Quick Poll now open!
    2. Third SMP Quick Poll Reveals Increasing Optimism Among Small Practices
    3. SMP Committee Welcomes New Members

    Resources and Tools

    4. Updated Guides Support SMPs in SME Audits and Practice Management
    5. IFAC Launches New Website: Key Pages for SMPs
    6. Articles for SMPs: Tips for Success; Building a Business Advisory Practice

    Meetings and Events

    7. Upcoming Small and Medium Practices Forum
    8. Recent SMP Committee Speeches

    Standards and Guidance

    9. IFAC Comments on European Commission Proposed Legislation
    10. SMP Committee Contributes to Standard Setting
    11. FEE Issues Briefing Paper on Proportionality of ISAs
    12. Final Report from IESBA SME/SMP Working Group
    13. PAIB Committee Proposes Guidance on Internal Control
    14. IIRC Discussion Paper on Integrated Reporting: Last Chance to Comment!
    15. IFRS for SMEs: New Draft Q&As and Micro-Entities

    New Report for SMEs

    16. AICPA, CICA, CIMA Release Report on SMEs and Sustainability

    1. Fourth SMP Quick Poll Now Open!

    Are you a practitioner in a small- or medium-sized (SMP) practice? Then take the November/December SMP Quick Poll now! The poll, now available in seven languages, should take only three minutes to complete and the results will be highlighted in a composite report for 2011.  Polling will close on December 19, 2011.


    2. Third SMP Quick Poll Reveals Increasing Optimism Among Small Practices

    The third SMP Quick Poll elicited 798 responses from practitioners who operate in small- to mid-sized practices (SMPs) from all regions of the world over a month-long period (August 8, 2011 to September 9, 2011). Results showed an increase in optimism among SMPs since the last poll was conducted; nearly 40% of practitioners expect business to be better this year than it was last year, compared to just 23% in April. The poll also showed that burden of regulation continues to be the largest challenge faced by practitioners’ small- and medium-sized entity (SME) clients. Similarly, when asked about the most important issue facing their practices right now, the largest group of respondents once again indicated keeping up with regulations and standards (35%), followed by attracting and retaining clients (26%).

    The third edition of the poll included questions on the trend toward SMPs providing business advisory services. Results showed that even though more SMPs are now offering business advisory services, traditional accountancy-based services continue to generate the largest portion of SMPs’ fee revenue.

    The IFAC SMP Quick Poll aims to take a snapshot of the key issues confronted by SMPs and their SME clients. Thank you to everyone who participated in our first three polls and to those member bodies and regional organizations that published the polls in their newsletters, or otherwise helped promote them. We hope you’ll do the same with the November/December poll, now open (see above and www.ifac.org/SMP).

    3. SMP Committee Welcomes New Members

    At the end of December, the committee will bid farewell to SMP Committee Chair Sylvie Voghel. Since taking the helm of the newly formed committee in January 2006 (previously the SMP Permanent Task Force), Sylvie has steered the committee to considerable growth and progress. We thank Sylvie for her dedicated service and exceptional leadership, and wish her every success in her future endeavors. The committee also wishes to thank outgoing committee members for their outstanding service and commitment: Hechmi Abdelwahed (Tunisia), Alex Hilman (Israel), Bernard Scicluna (Malta), Masum Turker (Turkey), and Ye Xin (China).

    In January 2012, the committee will welcome six new members: Abdulwahid Aboo (Kenya), Philip Cowperthwaite (Canada, currently IAASB member), Cemal Ibis (Turkey), Chen Longwei (China), Nnamdi Okwuadigbo (Nigeria), and Mats Olsson (Sweden). Current Deputy Chair Giancarlo Attolini will take the helm as SMP Committee chair, with Brian Bluhm as the deputy chair.

    Resources and Tools

    4. Updated Guides Support SMPs in SME Audits and Practice Management

    The SMP Committee recently released an updated Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities (ISA Guide). Now in its third edition, this comprehensive implementation guide is intended to help practitioners understand and efficiently apply the International Standards on Auditing (ISAs) to audits of small-and medium- sized entities (SMEs). This edition features a number of refinements to the technical content and presentation. As with the second edition, volume 1 covers the basic concepts of a risk-based audit in conformance with the ISAs; volume 2 contains practical guidance on performing SME audits, including two illustrative case studies—one of an SME audit and one of a micro-entity audit.

    The second edition of the Guide to Practice Management for Small- and Medium-Sized Practices (PM Guide) will be available in the coming weeks and includes minor technical updates, including guidance on cloud computing and updated further reading resources. The PM guide is intended to help improve practice management by providing guidance in a broad variety of areas, from strategic planning and risk management to succession planning and information technology. Comprised of eight standalone modules, this guide includes a number of practical features, including an extended case study, a sample office procedures manual, and numerous checklists and other worksheets.

    Visit the SMP Committee’s Resources and Tools page for access to the guides and related resources from IFAC member bodies and others. Translations of the guides have recently been completed in French, Italian, and Dutch. See the IFAC Translations Database for more details.

    5. IFAC Launches New Website
    Key Pages for SMPs

    IFAC’s recently launched website features a clean and modern design, a more intuitive architecture, expanded content, and topical and timely issues and insights, including SMP and SME issues. From the home page, visitors can select, “I am an SMP/SME,” from a drop-down list to go directly to the SMP Committee’s landing page. Alternatively, visitors can select SMPs & SMEs under Issues & Insights (in top navigation), to learn more about SMP issues, navigate to the SMP Committee page, and access recently released resources for SMPs.

    The SMP Committee pages feature numerous improvements, including better integration of social media: the SMP Discussion Board now features prominently on the landing page and the SMP Twitter handle feeds live to a call-out box on the top right. On the SMP Resources and Tools page, we’ve consolidated resources from IFAC, our member bodies, and other organizations within three main categories: Implementation Guidance, Practice Management Support, and Business Advisory Practice Development. Call-out boxes on the right-hand side of the page highlight selected resources and provide access to a dedicated Relevant Links page for each of these three areas.

    The new website also gives registered users more control over managing their account and subscription preferences, including selecting all newsletters and press releases, or just those in their area of interest. Finally, IFACnet, our custom accountancy search engine, is accessible from the search box at the top of every page for easier access. IFACnet is powered by Google and searches selected websites from leading accountancy organizations from around the world in addition to the IFAC site.

    6. Articles for SMPs: Tips for Success; Building a Business Advisory Practice

    How to Make Your Small Practice a Big Success, a short article developed by SMP Committee Deputy Chair Giancarlo Attolini and IFAC staff, suggests seven simple measures that SMPs can take to improve the management of their practice and increase their chances of success.

    How to Build Your Business Advisory Practice, developed by SMP Committee member Stuart Black and IFAC staff, examines the business case for SMPs to develop a business advisory practice and offers tips for getting started.

    IFAC staff and SMP Committee members regularly develop articles for IFAC member bodies to publish in their local magazines and journals to support their SMP constituents. These articles are offered exclusively to member bodies for a period of 60 days. After this time, IFAC will publish the articles on its website and/or newsletter(s). See the Practice Management Relevant Links and Business Advisory Relevant Links pages on our website for access to additional free resources for SMPs in these areas.

    Meetings and Events

    7. Upcoming Small and Medium Practices Forum

    The next IFAC Small and Medium Practices Forum will be held on March 19, 2012 in Singapore. At this annual event for SMPs, delegates from around the world will convene to listen, learn, debate, and collaborate on the unique opportunities and challenges facing SMPs and their small- and medium-sized entity (SME) clients. Co-hosted with the Institute of Certified Public Accountants of Singapore, this year’s day-long event will feature a keynote address by IFAC Deputy President Warren Allen and plenary sessions with panelists from international standard-setting bodies, organizations representing small business in Southeast Asia, and the donor community. During break-out sessions in the afternoon, delegates will be invited to provide input to the SMP Committee’s Work Plan, while sharing best practices and ideas on selected topics.

    A formal letter of invitation will be sent to all IFAC member bodies in mid-December. Each member body may send up to 10 representatives. Presentations and videos from last year’s event are available at www.ifac.org/2011SMPForum.

    8. Recent SMP Committee Speeches

    New slides from two of the SMP Committee members’ recent speaking engagements are now available:

    In December, Florin Toma, SMP Committee member, spoke at the Orden Dos Técnicos Oficiais de Contas (OTOC) and European Federation of Accountants and Auditors for SMEs (EFAA) Conference on the future of micro-entity financial reporting (see slides).

    In October, SMP Committee Deputy Chair Giancarlo Attolini spoke at the New York State Society of CPAs (NYSSCPA) IFRS Conference on the IFRS for SMEs, including IFAC’s role in the development of the standard and the importance of proper adoption and implementation (see slides).

    Standards and Guidance

    9. IFAC Comments on European Commission Proposed Legislation

    Earlier this month, IFAC commented on the European Commission (EC)’s proposed legislation issued in November. IFAC supports initiatives to continually improve audit quality, enhance the role of audit, and safeguard auditor independence, and believes that innovation and evolution are essential for this vital service to maintain its relevance and meet the needs of investors and other stakeholders. See IFAC’s press release and more information on the proposed reforms on the EC’s website.

    10. SMP Committee Contributes to Standard Setting

    The SMP Committee has submitted the following comment letters to the International Auditing and Assurance Standards Board (IAASB) on the scalability of standards and other key issues of relevance to SMPs:

    A) Proposed International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information (see the SMP Committee’s Comment Letter); and

    B) Enhancing the Value of Auditor Reporting: Exploring Options for Change (see the SMP Committee’s Comment Letter).


     11. FEE Issues Briefing Paper on Proportionality of ISAs

    The Federation of European Accountants (FEE) recently issued a Briefing Paper on the proportionality of the International Auditing and Assurance Standards Board (IAASB)’s clarified International Standards on Auditing (ISAs). The paper makes the case that the ISAs are not overly burdensome for SMPs and SMEs and that the standards were developed for use by entities of all sizes with involvement from SMPs and SMEs. See the Briefing Paper, Proportionality and the International Standards on Auditing, on the FEE website.

    12. Final Report from IESBA SME/SMP Working Group

    At their last meeting in October, the International Ethics Standards Board for Accountants (IESBA) received the final report from the IESBA SME/SMP Working Group, formed to help address the unique and challenging issues faced by this constituency in complying with the IESBA Code of Ethics for Professional Accountants (the Code).

    The Working Group’s recommendations covered the following: knowledge and understanding of the Code; application of safeguards in an SMP/SME environment including appropriate safeguards available to sole practitioners and smaller SMPs; suggestions regarding future expansion of the Code; and ongoing consideration of SMEs and SMPs in the standard-setting process. The IESBA will consider the recommendations of the Working Group at its February 2012 meeting. See more information in the IESBA’s Meeting Summary.

    13. PAIB Committee Proposes Guidance on Internal Control

    The IFAC Professional Accountants in Business (PAIB) Committee recently issued proposed International Good Practice Guidance, Evaluating and Improving Internal Control in Organizations, for public comment. The aim of this guidance is to establish a benchmark for good practice in maintaining effective internal control in response to risk, and help PAIBs and their organizations create a cycle of continuous improvement for their internal control systems.

    The proposed guidance is directed at professional accountants in business working for organizations of all types and sizes, including SMEs, as all organizations, no matter their size or structure, private or public, should have an appropriate internal control system in place. SMPs may wish to refer to the guidance when advising their SME clients on how to improve their internal control. Practitioners operating in SMPs and SMEs are encouraged to respond to the proposed guidance.

    14. IIRC Discussion Paper on Integrated Reporting: Last Chance to Comment!

    The International Integrated Reporting Council (IIRC) recently released its Discussion Paper, Towards Integrated Reporting: Communicating Value in the 21st Century. The paper presents the rationale for integrated reporting, offers initial proposals for the development of an international integrated reporting framework, and outlines next steps toward its creation and adoption.

    Of most relevance to SMEs and SMPs is question four on the applicability of integrated reporting to SMEs and the initial focus of integrated reporting on larger companies. Comments can be submitted to dpresponses@theiirc.org or through www.theiirc.org by December 14, 2011. Tell us what you think by responding to this question on the SMP Committee Discussion Board.

    15. IFRS for SMEs: New Draft Q&As and Micro-Entities

    In November, the International Accounting Standards Board (IASB)’s SMP Implementation Group released two additional question-and-answer (Q&A) publications for public comment: Recycling of Cumulative Exchange Differences on Disposal of a Subsidiary and Fallback to IFRS 9 Financial Instruments. Comments on both are due by January 31, 2012.

    The SMP Implementation Group, on which SMP Committee member Ricardo Rodil and Technical Advisor Robin Jarvis participate, assists the IASB on implementation matters related to the IFRS for SMEs, including developing guidance to address specific questions that arise from those implementing the standard. The group has additional Q&As for public consultation and one final Q&A. To learn more, see the IASB website.

    The IASB has been asked by some national standard setters to develop standards for micro-entities with fewer than 10 employees for whom IFRS for SMEs may still be too complex. Should the IASB provide guidance on financial reporting by micro-entities? Please let us know what you think by responding on the SMP Committee Discussion Board.

    New Report for SMEs

    16. AICPA, CICA, CIMA Release Report on SMEs and Sustainability

    The American Institute of Certified Public Accountants (AICPA), the Canadian Institute of Chartered Accountants (CICA), and the Chartered Institute of Management Accountants (CIMA), recently issued a compilation of case studies from small- and medium-sized entities that demonstrate how smaller companies can implement sustainable business practices. SMEs Set Their Sights on Sustainability shows how SMEs take very different approaches to the same core issues and highlights the findings of the organizations’ 2010 survey, which emphasized the growing emphasis SMEs are placing on every aspect of sustainability.

     

    For more news on global developments in the SMP/SME sector, follow the SMP Committee on Twitter.

    Copyright © December 2011 by the International Federation of Accountants (IFAC). All rights reserved. Permission is granted to make copies of this work provided that each copy bears the following credit line: “Copyright © December 2011 by the International Federation of Accountants (IFAC). All rights reserved. Used with permission of IFAC.”

    Prepared by IFAC's Communications Department. Contact communcations@ifac.org for further information.

    If you would like to subscribe to IFAC's wide range of newsletters, please go to our online registration page. If you already have an account, log in to manage your subscription preferences.

     

    Related Resources

     
     
     
 

Important Note: Please read our website Terms of Use.

ALL RIGHTS ARE RESERVED. You may not reproduce, store or transmit in any form or by any means, electronic or otherwise, including photocopying, recording, or storage in any type of reference or information retrieval system, nor may you translate, modify or create derivative works or adaptations based on the text of any file, or any part thereof, without the prior written permission of the International Federation of Accountants (IFAC). Please direct permission requests to permissions@ifac.org. See also Permissions Information.