SMPs provide a broad range of high-quality professional services, from the traditional audit, accounting, and tax services, to value-adding business advisory, to meet the needs of their clients who are typically small- and medium-sized entities (SMEs). SMEs are crucially important to the health and stability of the global economy. They account for the majority of private-sector GDP, employment, and growth globally, and, moreover, hold the key to the global economy’s recovery from one of the deepest economic downturns in modern times. IFAC recognises that addressing the needs of SMPs and SMEs is important. And its members echo this sentiment.
The most recent IFAC Global Leadership Survey, which polls the presidents and chief executive officers of IFAC member bodies, found that addressing the needs of SMPs and SMEs is the second most important issue facing the global accountancy profession in 2012.
Our global research, as summarised in the IFAC information paper The Role of SMPs in Providing Business Support to SMEs, has indicated that SMEs look to SMPs for a range of professional services for various reasons, most notably their reputation for competency and trust, responsiveness, and geographical proximity.
The role of IFAC’s SMP Committee
In recognition of the importance of SMPs, especially in supporting SMEs, IFAC created the SMP Committee in 2006. Since then IFAC, largely at the behest of its member bodies, has increased its commitment to helping cultivate robust SMPs. Today the SMP Committee supports SMPs in various ways. It does this primarily through IFAC member bodies, helping them support their SMP stakeholders. The committee develops guidance and tools, and works to ensure the needs of the SMP and SME sectors are considered by standard setters, regulators, and policy makers. The committee also speaks out on behalf of SMPs to raise awareness of their role and value and the importance of the small business sector overall.
Changes in the SMP global landscape
The global economy has changed a lot in the past few years and the accounting industry has not escaped these changes. Hence, it’s no surprise to find that SMPs are facing a changed economic and regulatory landscape – one characterised by significant challenges, but also with great opportunities if the results of the fourth quarter IFAC SMP Quick Poll are anything to go by. The poll revealed that regulatory burdens and economic woes continue to top the list of challenges faced by SMPs and their small business clients. Of course, the overall results mask some significant regional variations. But a key lesson, if there is one, for SMPs is that they are best placed to thrive in the new global economy by changing with the times.
[breakoutbox][breakoutbox_title]IFAC resources[/breakoutbox_title][breakoutbox_excerpt]The following resources (all free of charge) are accessible via IFAC’s SMP Committee website.
The following resources (all free of charge) are accessible via IFAC’s SMP Committee website.
Publications
Guide to Using ISAs in the Audits of Small- and Medium-Sized Entities (ISA Guide)
Guide to Quality Control for Small- and Medium-Sized Practices (QC Guide)
The Role of SMPs in Providing Business Support to SMEs
Other resources
Quarterly eNews and Resources and Tools for access to relevant links in these areas: Business Advisory, Practice Management, and Implementation.
Visit www.ifac.org/SMP to learn more about the IFAC SMP Committee and its support for SMPs through collaboration with IFAC member bodies.
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The key challenges for SMPs
The fourth quarter IFAC SMP Quick Poll pulled in over 2400 responses from around the world thanks to the promotion efforts of many IFAC member bodies. In all regions barring Europe, burden of regulation ranked as the top challenge faced by practitioners’ small- and medium-sized entity clients. Meanwhile, economic uncertainty ranked as the top challenge in Europe. When accountants were asked to name the biggest challenge facing their practices, keeping up with new standards and regulations ranked first, followed by attracting and retaining clients in almost all regions (in Asia, these top two were reversed).
