Insights from the 2014 IFAC Global SMP Survey: A Comparison of Uganda and the Rest of the World

Dr. Hajj Twaha Kigongo Kaawaase | November 2, 2015 | 1

Published earlier this year, my paper Successes and Tribulations of SMPs in Uganda utilizes the 2014 IFAC Global SMP Survey data to analyze the key challenges and opportunities for small- and medium-sized practices (SMPs) in Uganda and compare them with the rest of the world. In my paper, I highlight those findings that can help determine and design initiatives to better support SMPs as well as explain how professional accountancy organizations like mine (the Institute of Certified Public Accountants of Uganda (ICPAU)) can leverage IFAC resources and tools.

The IFAC survey was conducted online globally in 21 languages between November 3 and December 29, 2014 (the 2015 survey is currently underway) and received 5,083 responses from 135 countries. Uganda accounted for 148 responses, higher than the vast majority of countries. The survey asked practitioners operating in SMPs a number of questions about the challenges they face; the market factors and technologies most likely to affect them in the future; the consulting services they provide; and their performance, both past and projected. In addition, respondents were asked about their small- and medium-sized entity (SME) clients, including questions around the challenges they face, exposure to financial crimes, access to finance, and the extent of their international operations.

Methodology

In analyzing the data, I used a quantitative approach to cross-tabulate findings at a global level with those specific to Uganda within the same data set.

Key Findings

SMPs in Uganda expect to see stronger revenue growth across all main service lines as compared to their counterparts globally. However, while corporate advisory services are a significant revenue source in the rest of the world (they are the second most commonly provided type of business advisory/consulting service), this type of service offering is much less prevalent in Uganda (see Table 1). This calls for more research to examine the country specific factors that are limiting growth of this revenue source to Ugandan SMPs.

Table 1:  Business Advisory and Consultancy Services by SMPs

 

Global

Uganda

 

n

%

n

%

Tax planning

3871

76.2

116

78.4

Business development (strategy, marketing, benchmarking, budgeting)

2123

41.8

83

56.1

Human resources / employment regulations

1775

34.9

71

48.0

Enhanced organizational reporting (integrated reporting, sustainability reporting, corporate social responsibility reporting)

1315

25.9

 

63

 

42.6

Information technology

1093

21.5

51

34.5

Corporate advisory (mergers, legal, valuations, financing)

3120

61.4

46

31.1

Succession planning / business transfers

1541

30.3

29

19.6

Health & safety / environmental legislation

322

6.3

19

12.8

Pension planning

622

12.2

15

10.1

Other, please specify

561

11.0

21

14.2

None

387

7.6

8

5.4

Source: 2014 IFAC Global SMP Survey
** Global figures are inclusive of Uganda figures


Table 2 shows that the top five challenges facing SMPs in Uganda are broadly similar to those of their peers globally—namely, pressure to lower fees, rising costs, managing cash flows / late payments, attracting new clients, and serving clients operating internationally—except that keeping up with new regulations and standards, the most acute challenge globally, is lowly rated in Uganda

Table 2: Percentage of respondents considering the issue to be a high or very high challenge

 

Global (%)

Uganda (%)

Experiencing pressure to lower fees

51

70

Rising costs

50

77

Managing cash flow and late payments

43

55

Attracting new clients

58

54

Serving clients operating internationally

42

52

Differentiating from the competition

50

45

Succession planning

30

44

Attracting new  and retaining existing staff

39

42

Keeping up with new technology

46

40

Enabling employee work-life balance

35

39

Keeping up with new regulations and standards

57

22

Retaining existing clients

36

17

Other, please specify.

15

25

Source: 2014 IFAC Global SMP Survey
** Global figures are inclusive of Uganda figures


Looking to the future SMPs in Uganda, Table 3 demonstrates that technological developments, competition, and globalization are the factors likely to have the strongest impact on them: this contrasts with the global picture where the regulatory environment is on top while globalization is lowly ranked.

Table 3: Factors that will have a high or very high impact on SMPs in the next 5 years

Influence

Global (%)

Uganda (%)

Technology developments

49

69

Competition

57

69

Globalization

34

65

Mergers, acquisitions, and consolidation in the accountancy industry

33

50

Regulatory environment

61

47

Perceived trust and credibility of the profession

46

47

Political instability

41

46

Capability to adapt to new client needs

45

38

Other, please specify.

16

19

Source: 2014 IFAC Global SMP Survey
** Global figures are inclusive of Uganda figures

 

In this article I have provided a snapshot of what I cover in my paper and highlighted how a comparison of a particular jurisdiction’s survey results with the global results can help determine and design initiatives to better support SMPs

Dr. Hajj Twaha Kigongo Kaawaase

Partner, Sejjaaka, Kaawaase & Co.

Dr. Hajj Twaha Kigongo Kaawaase CPA, is a Fellow of the Association of Chartered Certified Accountants (ACCA) and is also a member of the Institute of Certified Public Accountants of Uganda (ICPAU). He holds a PhD in Auditing from the University of Dar Es Salaam (Tanzania). Dr. Kaawasse is a partner at Sejjaaka, Kaawaase & Co. and is a senior lecturer at Makerere University Business School. In January 2014 he was nominated by the ICPAU as a Technical Advisor to the IFAC Small and Medium Practices Committee representing Brazil.  See more by Dr. Hajj Twaha Kigongo Kaawaase

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Stephen Kwiri November 19, 2015

Dr. Hajj Kaawsase, thank you so much for that great insight on the SMP practices in Uganda as compared to others globally. CPA Stephen Kwiri

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