International Federation of AccountantsInternational Federation of Accountants

IFAC SMP Committee Strategic and IFAC SMP Committee Strategic and Operational Plan 2009-2012Operational Plan 2009-2012

Paul Thompson, Senior Technical ManagerPaul Thompson, Senior Technical ManagerIFAC SMP Forum 2008IFAC SMP Forum 2008

Abuja, Nigeria, October 13, 2008Abuja, Nigeria, October 13, 2008

ContentContent

• IFAC Strategic Plan 2009-2012IFAC Strategic Plan 2009-2012• SMP Committee SMP Committee • Critical IssuesCritical Issues• Input to Standard SettingInput to Standard Setting• Provision of Practical SupportProvision of Practical Support• How Can You Get Involved?How Can You Get Involved?

IFAC Strategic Plan 2009-2012IFAC Strategic Plan 2009-2012

• Four strategic themes are:Four strategic themes are:

1. Be recognized as the international setter standard in the 1. Be recognized as the international setter standard in the areas of auditing and assurance, education, ethics and areas of auditing and assurance, education, ethics and governmental financial reporting.governmental financial reporting.

2. Actively support the adoption of, and assist in, the 2. Actively support the adoption of, and assist in, the implementation of international standardsimplementation of international standards

3. Continually enhance the relevance of the profession3. Continually enhance the relevance of the profession

4. Be the international voice of the accountancy profession4. Be the international voice of the accountancy profession

IFAC SMP CommitteeIFAC SMP CommitteeOverviewOverview

•Canada•USA

•Brazil

•Finland•Germany• Italy•Malta•Spain•Turkey•UK

•Nigeria•Tunisia

Chair – Sylvie Voghel (Canada)18 members

Resources – one full-time senior technical manager

Budget of US$ 475k (2008)

• Israel

•China•Hong Kong SAR• India•Malaysia

IFAC SMP CommitteeIFAC SMP CommitteePurpose and ConstituentsPurpose and Constituents

• Purpose:Purpose:“…“….to identify and represent the needs of the constituents and, .to identify and represent the needs of the constituents and, where applicable, to give consideration to relevant issues where applicable, to give consideration to relevant issues pertaining to SMEs/SMPs.” pertaining to SMEs/SMPs.”

• Constituents:Constituents:

“…“…SMPs who provide accounting and assurance services SMPs who provide accounting and assurance services principally but not exclusively to clients who are small and principally but not exclusively to clients who are small and medium enterprises (SMEs). In so far as they provide services medium enterprises (SMEs). In so far as they provide services to SMEs other professional accountants are included as to SMEs other professional accountants are included as constituents.” constituents.”

Critical IssuesCritical Issues

• Limited awareness we exist let alone what we do!Limited awareness we exist let alone what we do!• Definition of SMPs – large firm in small country?Definition of SMPs – large firm in small country?• Impact of risk and redrafted ISAs on SME auditImpact of risk and redrafted ISAs on SME audit• Some calls for differential auditing standardsSome calls for differential auditing standards• Trend towards exempting SMEs from audit – loss of Trend towards exempting SMEs from audit – loss of

valuable revenue stream & need to diversifyvaluable revenue stream & need to diversify• Complexity of regulation is driving consolidationComplexity of regulation is driving consolidation• SMPs lack recognizable brand…SMPs lack recognizable brand…• …….but highly respected source of business support.but highly respected source of business support

IFAC SMP CommitteeIFAC SMP Committee SMP Committee Strategic and Operational Plan 2009- SMP Committee Strategic and Operational Plan 2009-

2012 2012

Four main issues facing SMPs (& SMEs):Four main issues facing SMPs (& SMEs):1.1. Relevance & proportionality of international standards to Relevance & proportionality of international standards to

SME/SMPSME/SMP

2.2. Capacity of SMP/SME to efficiently implement these Capacity of SMP/SME to efficiently implement these standardsstandards

3.3. Ability of SMPs to remain competitive & client-focusedAbility of SMPs to remain competitive & client-focused

4.4. Ability of SMPs to proficiently operate & manage their Ability of SMPs to proficiently operate & manage their practices practices

IFAC SMP CommitteeIFAC SMP CommitteeSMP Committee Strategic and Operational Plan 2009-SMP Committee Strategic and Operational Plan 2009-

20122012

• Two-pronged approach to helping SMPs (& SMEs) Two-pronged approach to helping SMPs (& SMEs) tackle these issues:tackle these issues:

1. 1. Helping to shape form & content of international Helping to shape form & content of international standardsstandards through direct input to standard-setting through direct input to standard-setting ((Session 3Session 3))

2. 2. Providing practical support to SMPs Providing practical support to SMPs through, for through, for example, provision of implementation materials & web-example, provision of implementation materials & web-based information resources/tools (based information resources/tools (Session 4Session 4))

Input to Standard SettingInput to Standard SettingIAASB/IESBA IAASB/IESBA

• Comments on draft material & advocates at high-Comments on draft material & advocates at high-level level

• SMP Committee welcomes IAASB/IESBA plans to:SMP Committee welcomes IAASB/IESBA plans to:– Impact assessment of proposed future changesImpact assessment of proposed future changes

– Implementation effectiveness review Implementation effectiveness review

– Stability in standards/Code Stability in standards/Code

– Increased focus on implementation assistance Increased focus on implementation assistance

– Alternative assurance for SMEsAlternative assurance for SMEs

• Need to get more SMPs/SMEs involvedNeed to get more SMPs/SMEs involved

Input to Standard SettingInput to Standard SettingIASB IASB

• Support Support IFRS for Private Entities IFRS for Private Entities (formerly IFRS (formerly IFRS for SMEs) projectfor SMEs) project

• Assisting IASB find optimal solution:Assisting IASB find optimal solution:– Encouraging SME/SMP participation in debate Encouraging SME/SMP participation in debate

– IFAC comment letter (SMP Committee led drafting):IFAC comment letter (SMP Committee led drafting):– More simplification required More simplification required

– Standard needs to be truly standalone Standard needs to be truly standalone

– Micro-Entity Financial Reporting Research Project:Micro-Entity Financial Reporting Research Project:– Proposed standard (ED) much too complex for micro-entitiesProposed standard (ED) much too complex for micro-entities

– Promote IASCF’s ‘train the trainer’ initiativePromote IASCF’s ‘train the trainer’ initiative

Provision of Practical SupportProvision of Practical SupportImplementation Materials - OverviewImplementation Materials - Overview

• Vision – Vision – develop and facilitate development of range of high develop and facilitate development of range of high quality materials at low (nil) cost to end usersquality materials at low (nil) cost to end users

• IFAC to develop material only in specific instancesIFAC to develop material only in specific instances• Focus is on high level implementation guides Focus is on high level implementation guides

Provision of Practical SupportProvision of Practical SupportImplementation Materials - GuidesImplementation Materials - Guides

• ISA Guide - ISA Guide - to help practitioners efficiently, effectively and to help practitioners efficiently, effectively and economically apply ISAs to SME audits (Q4 2007: Q4 2009)economically apply ISAs to SME audits (Q4 2007: Q4 2009)

• Quality Control Guide – Quality Control Guide – toto help SMPs operate a QC help SMPs operate a QC system in compliance with ISQC 1 (Q1 2009)system in compliance with ISQC 1 (Q1 2009)

• Practice Management Guide – Practice Management Guide – toto help SMPs proficiently help SMPs proficiently operate and manage their practice (Q4 2009)operate and manage their practice (Q4 2009)

• IESBA Implementation Materials for SMPs – IESBA Implementation Materials for SMPs – toto help help SMPs apply independence section of Code of Ethics (2009)SMPs apply independence section of Code of Ethics (2009)

Provision of Practical SupportProvision of Practical SupportImplementation Materials – GuidesImplementation Materials – Guides

• Member bodies free to use materials as is, adapt, Member bodies free to use materials as is, adapt, translate, reproducetranslate, reproduce

• Guides intended to be ‘platform’ product from which Guides intended to be ‘platform’ product from which derivative products (e.g., training material, forms, derivative products (e.g., training material, forms, software) can be logically developedsoftware) can be logically developed

• IFAC IFAC facilitatingfacilitating development & dissemination, by development & dissemination, by member bodies and others, of high quality derivatives member bodies and others, of high quality derivatives at reasonable cost to end usersat reasonable cost to end users

Provision of Practical SupportProvision of Practical SupportImplementation Materials - FutureImplementation Materials - Future

• Possible future developments: Possible future developments: – Develop ‘train the trainer’ & other CPD materials based Develop ‘train the trainer’ & other CPD materials based

on core content of guideson core content of guides

– Certification of products asserting compliance with IFAC Certification of products asserting compliance with IFAC standards/guidancestandards/guidance

– IFAC and/or member body branded online professional IFAC and/or member body branded online professional education center (offering online courses)education center (offering online courses)

– Guidance on how SMPs can support SMEs – to profile Guidance on how SMPs can support SMEs – to profile role of SMP & signal business opportunitiesrole of SMP & signal business opportunities

• SeeSee http://www.ifac.org/SMP/ for: for:– IFACnet portalIFACnet portal

– NewsNews

– Resources (relevant links, free publications, discussion Resources (relevant links, free publications, discussion board, etc.);board, etc.);

• Possible future developments:Possible future developments:– Global firm directory Global firm directory

– Online networking between SMPs (& SMEs) Online networking between SMPs (& SMEs)

Provision of Practical SupportProvision of Practical SupportWeb-based Resources – International Center for SMPsWeb-based Resources – International Center for SMPs

Provision of Practical SupportProvision of Practical SupportWeb-based Resources - IFACnetWeb-based Resources - IFACnet

• See See http://www.ifacnet.com• Customized web search engine providing access to Customized web search engine providing access to

resources of IFAC, its member bodies, and othersresources of IFAC, its member bodies, and others• Possible future developments:Possible future developments:

– Menu of key search termsMenu of key search terms

– Improved language capability Improved language capability

How Can You Get Involved?How Can You Get Involved?

• Effective communication is Effective communication is criticalcritical to SMP to SMP Committee achieving its strategic objectivesCommittee achieving its strategic objectives

• Visit our website and sign up for our eNewsVisit our website and sign up for our eNews• Raise awareness of our activities:Raise awareness of our activities:

– To other accountancy bodies; To other accountancy bodies;

– To other SMPs and SMEs; To other SMPs and SMEs; andand

– To others – students, donor agencies, regulators etc To others – students, donor agencies, regulators etc

• Help promote and disseminate our project outputHelp promote and disseminate our project output• Provide feedback on our project outputProvide feedback on our project output

QuestionsQuestions