SMP eNews: October 2012

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    Oct 16, 2012
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    SMP eNews: October 2012

    Welcome to IFAC's Small and Medium Practices (SMP) Committee eNews

    In This Issue:

    1. SMP Quick Poll—Mid-Year Results and Upcoming Poll
    STANDARDS AND REGULATION
    2. IAASB Issues Revised Standard on Review Engagements
    3. SMP Committee Leads IFAC Response to Consultation on IFRS for SMEs
    4. Additional Input to Standard Setters
    RESOURCES AND REPORTS
    5. Article Highlights the Value of Compilation Engagements
    6. Coping with Fee Pressure: 7 Tips for SMPs
    7. Coming Soon: Third Edition of Practice Management Guide
    8. Now Available: Business Advisory Video Series                 
    9. Sustainability-Focused eNews Published by PAIB, SMP Committees
    10. Newly Translated SMP Resources
    MEETINGS AND EVENTS
    11. 2013 IFAC SMP Forum
    12. Recent Global Speaking Engagements by SMP Committee Members

     

     

    1. SMP Quick Poll—Mid-Year Results and Upcoming Poll

    SMPs and their small business clients face similar challenges, according to the SMP practitioners who responded to the May-June SMP Quick Poll. Topping the list of challenges were complexity and pace of change of regulations, in particular tax requirements. Sharing the same challenges may be one of the reasons why SMPs are able to understand and relate to the needs of small- and medium-sized entities (SMEs), making them well suited to serve them.

    The poll also included questions on business drivers and outlook. For nearly half the respondents, business from new clients is the main driver of growth by a wide margin with less than half as many respondents citing increased revenue from existing clients as their main driver of growth. However, when asked about performance expectations, the largest portion of practitioners expects no change in business in the current year compared with 2011.

    In November, IFAC will open the year-end SMP Quick Poll to find out if business performance met expectations and to check in on the current challenges facing SMPs and their clients, among other topics. To see the complete results of the last poll and participate in the next one, see the SMP Committee home page.

     

    STANDARDS AND REGULATION
     

    2. IAASB Issues Revised Standard on Review Engagements

    In September, the International Auditing and Assurance Standards Board (IAASB) released International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements.

    The revised standard is intended to help meet increasing market demand for assurance services other than audits that meet the needs of small- and medium-sized entities (SMEs) and users of their financial information. It provides a globally accepted benchmark for undertaking review engagements, promotes better clarity for users about the nature of a review and the level of assurance it provides, and should fill an emerging need in jurisdictions that currently do not have national standards addressing reviews of financial statements. The revised standard is effective for reviews of financial statements for periods ending on or after December 31, 2013. An At a Glance publication provides an overview of the revised standard.

    With the aim of helping IFAC member organizations support their SMP constituents, the committee will issue an article on review engagements that will discuss key features of the standard. The article will be offered exclusively to IFAC members organizations to publish in their journals and/or websites before being published on the IFAC website. To join the mailing list for this advance release, email communications@ifac.org. At its October meeting, the SMP Committee will consider how it may best develop guidance on conducting review engagements, particularly for SMEs, in compliance with the revised standard. In addition to providing implementation support, the committee recognizes that guidance is needed to increase awareness and understanding of review engagements as a client service offering.

     

    3. SMP Committee Leads IFAC Response to Consultation on IFRS for SMEs

    In June, the International Accounting Standards Board (IASB) issued a Request for Information (RFI) as a starting point for its review of the International Financial Reporting Standard for SMEs (IFRS for SMEs). First released in 2009, the standard is now being used in approximately 80 jurisdictions around the world, and the IASB is seeking public views to ascertain if amendments to the standard are needed.

    The SMP Committee is leading the drafting of IFAC’s response to the RFI, and will submit a comment prior to the November 30, 2012 deadline. The SMP Committee encourages SMP practitioners around the world to consider responding as well.

    In addition, the IASB is developing a stand-alone guide to help micro-sized entities apply the IFRS for SMEs. See progress in the September IFRS for SMEs Update.

     

    4. Additional Input to Standard Setters

    The SMP Committee submits comment letters to the International Auditing and Assurance Standards Board (IAASB) and International Ethics Standards Board for Accountants (IESBA) on the scalability of standards and other key issues of relevance to SMPs:

    A) Improving the Auditor’s Report, IAASB Invitation to Comment—See the SMP Committee’s Comment Letter.  

    B) Responding to a Suspected Illegal Act—The SMP Committee will respond to the IESBA before the December 15 deadline and encourages IFAC member organizations and individual SMPs to respond as well.

    C) The International Accounting Education Standards Board has Exposure Drafts on three International Ethics Standards (IESs) open for comment. The SMP Committee encourages IFAC member organizations and individual SMPs to respond.

     

    RESOURCES AND REPORTS
     

    5. Article Highlights the Value of Compilation Engagements

    The article “ISRS 4410: The Standard for Today’s Compilation Engagements” highlights the versatility of the revised International Standard on Review Engagements (ISRS) 4410 and explains many of its key features. Recognizing that for many SMPs, compilation is a core service provided to their clients, the article was developed to help SMPs become familiar with the standard and help them meet the growing demand for compilation services. See the 2012 IAASB Handbook for access to ISRS 4410 (Revised), which was released by the International Auditing and Assurance Standards Board (IAASB) in March 2012.

     

    6. Coping with Fee Pressure: 7 Tips for SMPs

    In the May-June SMP Quick Poll, the largest group of practitioners (27%)—especially those from Europe and Asia—cited pressure to lower fees as the number one challenge facing their practice. The article “How to Cope with Pressure to Lower Fees,” developed by SMP Committee Chair Giancarlo Attolini and Deputy Director Paul Thompson, discusses the reasons for the continued downward pressure on fees for SMPs’ professional services. As this pressure is likely to continue long after the recovery of the global economy, the article provides seven tips for SMPs in coping with this pressure including adopting new approaches to pricing, leveraging technology, stressing value to clients, and tackling overheads. Member organizations are invited to translate and/or reproduce the article in their journals/magazines by emailing communications@ifac.org.

     

    7. Coming Soon: Third Edition of Practice Management Guide

    The third edition of the Guide to Practice Management for Small- and Medium-Sized Practices (PM Guide) will be available by the end of the year and will include updated references and readings and enhanced guidance on areas such as business advisory, practice development, pricing, and marketing using social media. 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 stand-alone modules, this guide includes a number of practical features, including an extended case study, sample office procedures manual, numerous checklists and other worksheets, and extensive references and further readings.

    Visit the SMP Committee’s Resources and Tools page for access to all of the SMP Committee’s guides and related resources from IFAC member bodies and others. For translations of the guides, visit Publications and Resources and filter by language or see the IFAC Translations Database.

     

    8. Now Available: Business Advisory Video Series

    To help SMPs that are considering building or expanding their professional services offerings, the SMP Committee has developed a series of videos on business advisory featuring interviews with SMP Committee members Florin Toma, CPA (Romania) and Stuart Black, FCA (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.

     

    9. Sustainability-Focused eNews Published by PAIB, SMP Committees

    A special edition of eNews, The Role of Professional Accountants in the Sustainability of Small Businesses, was recently published by the Professional Accountants in Business (PAIB) and Small and Medium Practices (SMP) Committees. The issue highlights the activities of IFAC member organizations that are increasingly addressing small- and medium-sized entities (SMEs), sustainability, and the role of accountants. In sharing these activities—including reports, guidance, surveys, events, and award programs—the committees look to facilitate information sharing and promote how professional accountants can work with SMEs to improve their environmental, social, and governance (ESG) performance.

     

    10. Newly Translated SMP Resources

    See additional translations of the SMP Committee’s publications in the Translations Database

     

    MEETINGS AND EVENTS

     

    11. 2013 IFAC SMP Forum

    The next IFAC SMP Forum will be held in Kampala, Uganda, on June 5, 2013. At this annual event, leaders of the accounting profession from around the world will meet to discuss how to address the unique challenges and opportunities facing SMPs and their SME clients. The event will be co-hosted with the Institute of Certified Public Accountants of Uganda (ICPAU) and the Pan African Federation of Accountants (PAFA).

    IFAC members are invited to send up to 10 delegates, as space is limited. If you are a member of an IFAC member organization, please register your interest with your organization. More information will be posted at 2013 IFAC Small and Medium Practices Forum as it becomes available. To learn more about the event, see the presentations, videos, and highlights from the 2012 Forum.

     

    12. Recent Global Speaking Engagements by SMP Committee Members

    In September SMP Committee Chair Giancarlo Attolini presented SMP Committee—Strategic Initiatives to the IFAC Board on the recent and upcoming activities of the committee. The activities are categorized by strategic focus area: input to standard setting, input to public policy and regulation, adoption and implementation, and development and quality.

    In June, several IFAC representatives attended the REPARIS Ministerial Conference in Vienna. To complement the event, IFAC co-hosted with the World Bank the Central and South East Europe Regional Forum for Professional Accountancy Organizations the day following the conference. IFAC President Göran Tidström gave a presentation on the role of the accountancy profession in supporting competitiveness and financial stability. IFAC staff Paul Thompson and Sylvia Tsen presented Supporting the Provision of Effective Business Support to Small- and Medium-sized Enterprises and Building Capacity to Add Value to Business Enterprises respectively. 

     

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