SMP eNews: May 2012

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    May 09, 2012
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    SMP eNews: May 2012

     
     

    IN THIS ISSUE

    1.  May 2012 SMP Quick Poll Now Open!

    RESOURCES AND REPORTS
    2. Implementation Companion Manual and Orientation Slides Now Available
    3. Good Practice Checklist for Small Business Published
    4. IFAC Releases Annual Report; Includes Activities of SMP Committee
    5. Additional Resources Coming Soon

    MEETINGS AND EVENTS 
    6. SMP Leaders Convene in Singapore for 2012 IFAC Small and Medium Practices Forum
    7. SMP Committee Representatives Speak at International Events

    STANDARDS AND REGULATION
    8. Revised IFAC Policy Position Paper Supports Single Set of Auditing Standards for All Audits, Including SMEs
    9. IAASB Prioritizes Auditor Reporting; Strengthens Standards on Compilations and Using Work of Internal Auditors
    10. Update on IESBA
    11. SMP Committee Comments on IFAC Statements of Membership Obligations
    12. SME Financial Reporting Update

     
     
     

     

    1. May 2012 SMP Quick Poll Now Open!
                             
    Are you a practitioner in a small- or medium-sized (SMP) practice? Then make sure your voice is heard by taking the May/June 2012 IFAC SMP Quick Poll. This edition of the poll is being conducted in 15 languages thanks to the generous translation support provided by SMP Committee members and IFAC member bodies.

    The poll should take only three minutes to complete and is being conducted semi-annually by IFAC in 2012 to take a snapshot of the key issues confronting SMPs and their small- and medium-sized (SME) clients. Polling will close on June 14, 2012. Look for the results in the next issue of the SMP eNews (register and subscribe here).

    See the results from previous polls on our website: 2011 IFAC SMP Quick Polls and Round-Up.

     
     

     

    Resources and Reports

    2. Implementation Companion Manual and Orientation Slides Now Available

    IFAC has released the first edition of a Companion Manual to accompany the Guide to Quality Control for Small- and Medium-Sized Practices, 3e (QC Guide) and the Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities, 3e (ISA Guide), both of which illustrate how international standards may be applied proportionately and efficiently in an SMP environment. The Companion Manual explains how member bodies and other professional accountancy organizations can make the best use of the Guides, including adapting, translating, or incorporating them into CPD courses and/or training programs.

    In addition, see QC Guide—Orientation, a PowerPoint presentation that introduces readers to the topics covered in the QC Guide as well as the key features and structure of the guide. A complementary set of slides on the ISA Guide, ISA Guide—Orientation, will be available this week . Member bodies are invited to use the slides in their orientation trainings and seminars. Email permissions@ifac.org to adapt or translate the slides or Companion Manual.

     
     

     

    3. Good Practice Checklist for Small Business Published
                             
    The Good Practice Checklist for Small Business is a multi-part checklist that features standalone sections on financial tasks, strategic management tasks, and regulatory requirements, among others. Adapted with permission from a similar checklist developed by CPA Australia, this resource can be used both by small businesses, to ensure they are applying good business practices to their operating procedures and to determine what advice they may need from an accountant, and/or by SMPs, as a marketing or diagnostic tool to help them determine the advice a small business client may need. Access this and more related resources from the Business Advisory Relevant Links page.

     
     

     

    4. IFAC Releases Annual Report; Includes Activities of SMP Committee

    IFAC recently released its 2011 Annual Report, which includes IFAC’s service delivery report, financial statements, a joint message from IFAC President Göran Tidström and Chief Executive Officer Ian Ball, as well a report from Public Interest Oversight Board Chair Eddy Wymeersch. The report includes contributions by the SMP Committee to IFAC’s four service delivery areas: standards and guidance, support for adoption and implementation, quality and development, and representation.                      

     
     

     

    5. Additional Resources Coming Soon
                            
    The following resources have been released exclusively to IFAC member bodies to give them an opportunity to adapt, reproduce, and distribute them to their own members. They will be available to the general public in the coming weeks at www.ifac.org/SMP. To access and request permission to adapt these resources, email permissions@ifac.org.

    Interview with SMP Committee Chair on Helping SMPs Meet the Challenges and Seize the Opportunities of Tomorrow—In this article, IFAC SMP Committee Chair Giancarlo Attolini discusses the importance and value of SMPs, the current global business environment, and how SMPs can overcome the immediate challenges of today to maintain and grow their practices in the future. At least 15 member bodies have reproduced, adapted, or translated the article to date.

    Business Advisory Videos—To help SMPs who are considering building or expanding their professional services offerings, the IFAC SMP Committee has developed a series of videos on business advisory featuring interviews with SMP Committee members Florin Toma (Romania) and Stuart Black (Australia). The interviewees share their insights on how to market and position a business advisory practice, the biggest challenges in building a business advisory practice, and the keys to the success of their own practices, among other topics.

     
     

     

    Meetings and Events

    6. SMP Leaders Convene in Singapore for 2012 IFAC Small and Medium Practices Forum
                             
    Over 200 delegates from 40 professional accountancy organizations in 36 countries met in Singapore for the sixth annual IFAC Small and Medium Practices (SMP) Forum on March 19, 2012. Co-hosted with the Institute of Certified Public Accountants of Singapore (ICPAS), this year’s event featured a keynote address by Ms. Jessica Tan, Chairman of the Government Parliamentary Committee for Finance and Trade & Industry in Singapore, and speakers from the Singapore Business Federation and the Accounting and Corporate Regulatory Authority of Singapore.

    A number of speakers noted that SMEs are integral to the global economic recovery and that SMPs are playing a key role in providing SMEs with the professional services necessary for them to grow. The agenda and presentations are available at 2012 IFAC Small and Medium Practices Forum.

     
     

     

    7. SMP Committee Representatives Speak at International Events
                            
    SMP Committee member Phil Cowperthwaite and Deputy Director Paul Thompson spoke recently at the Malaysian Institute of Accountants Conference, Auditing Micro-entities Efficiently and Effectively, on the role of the Committee, the challenges facing SMPs, and the International Auditing and Assurance Standards Board (IAASB)’s standard, International Standard on Related Services (ISRS) 4410 (Revised), Compilation Engagements. View their presentations on the IFAC website: The SMP Committee: Supporting and Vocalizing the Needs of SMPs and ISRS 4410 (Revised), A Standard for Today’s Financial Reporting Needs

     
     

     

    Standards and Regulation

    8. Revised IFAC Policy Position Paper Supports Single Set of Auditing Standards for All Audits, Including SMEs

    IFAC recently released a revision of Policy Position Paper 2, A Single Set of Auditing Standards: Audits of Small- And Medium-Sized Entities, first issued in 2008. The paper, which the SMP Committee helped revise, reinforces IFAC’s support for a single set of high-quality auditing standards for all entities, whether small or large, simple or complex. The main revisions to the position paper include updated references to the Clarified International Standards on Auditing (ISAs); other standards that the IAASB has issued and that are relevant to small and medium practitioners; and tools and guidance made available to practitioners by IFAC and the IAASB. The paper also highlights the IAASB’s commitment to designing standards that can be applied in a manner proportionate to the size and complexity of an entity and addressing the needs of SMEs and SMPs.

     
     

     

    9. IAASB Prioritizes Auditor Reporting; Strengthens Standards on Compilations and Using Work of Internal Auditors
                             
    Auditor Reporting—The IAASB has committed to move rapidly over the next two years on a top-priority project to enhance the communicative value and relevance of auditor reporting. The SMP Committee will monitor developments closely and contribute via its representation on the IAASB Task Force’s Building Blocks subcommittee. The scope and focus of the IAASB project is based on the results of a 2011 Consultation Paper, Enhancing the Value of Auditor Reporting: Exploring Options for Change, which received more than 80 responses from a wide range of stakeholders, including the IFAC SMP Committee (view comment letter). See also the IAASB’s Auditor Reporting project page and its 2011 Annual Report, which highlights its work to improve the relevance and value of auditor reporting. At its next meeting in June 2012, the IAASB expects to approve for release a Consultation Paper, to which the SMP Committee will respond. Practitioners operating in SMPs and SMEs are encouraged to respond individually as well.

    Compilation Engagements—IAASB recently released ISRS 4410 (Revised), Compilation Engagements, which clarifies the practitioner’s role and responsibilities in a compilation engagement and matters that need to be considered when accepting such engagements. Compilations have traditionally been a core service for many SMPs and, as increasing numbers of SMEs around the world are becoming exempt from statutory audit requirements, compilation services represent a growth area for SMPs, as evidenced by the results of a 2011 SMP Quick Poll. The revised standard is effective for compilation engagement reports dated on or after July 1, 2013.

    Using the Work of Internal Auditors—The IAASB released ISA 610 (Revised), Using the Work of Internal Auditors, which deals with the external auditor’s responsibilities if using the work of an internal audit function to obtain audit evidence, together with conforming changes to ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment. Both revised ISAs (610 and 315) are effective for audits of financial statements for periods ending on or after December 15, 2013.

    For more information on these and other projects, see the IAASB’s project pages on www.iaasb.org.

     
     

     

    10. Update on IESBA 
                            
    The International Ethics Standards Board for Accountants (IESBA)’s SME/SMP Working Group is preparing a synopsis of the Code of Ethics for Professional Accountants (the Code) as well as Q&As on two areas of the Code’s independence provisions: the provision of accounting services and the definition of a network. These initiatives, intended to help SMEs and SMPs address the challenges of applying the Code to their particular circumstances, are due to be completed later this year. See the highlights from the most recent SMP Committee and IESBA meeting summary to learn more.

     
     

     

    11. SMP Committee Comments on IFAC Statements of Membership Obligations                      

    The SMP Committee recently submitted a comment letter to the IFAC Board on the proposed revisions to the Statements of Membership Obligations (SMOs) released for public consultation in December 2011. The SMOs form the basis of the IFAC Member Body Compliance Program and serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

     
     

     

    12. SME Financial Reporting Update          

    Global—SME reporting was one of the many topics covered in a panel discussion hosted by the American Institute of Certified Public Accountants in New York in late April. Three former standard setters—Sir David Tweedie (former chair of the International Accounting Standards Board [IASB] and current president of the Institute of Chartered Accountants of Scotland); Bob Herz (former member of the US Financial Accounting Standards Board); and Paul Cherry (former member of the Canadian Accounting Standards Board)—talked at length about the US adoption of International Financial Reporting Standards (IFRSs), SME reporting standards, integrated reporting, and the political pressure that standard setters can face. See the highlights in an article from the Journal of Accountancy.

    The IASB plans to initiate a post-implementation review of the IFRS for SMEs, which was issued in 2009, starting with a public consultation mid-2012. The consultation will invite comments on whether there is a need to amend the IFRS for SMEs to incorporate issues that were addressed in the Q&As; to reflect new and amended IFRSs that have been approved since the IFRS for SMEs was issued; and to address any other identified issues. The SME Implementation Group recently published four final Q&As and does not plan to publish any more before the review is completed. Following the review, the IASB will consider amendments to the IFRS for SMEs approximately every three years. Learn more in the April IFRS for SMEs Update.

    New Zealand—The New Zealand Institute of Chartered Accountants has begun to develop a financial reporting framework SMEs in New Zealand, as well as guidance on compilation, assurance, and tax engagements; solvency test requirements; and other matters relevant to SME financial statements.

     

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