If you walk down 'main street' in any country around the world, you are likely to come across numerous small businesses, from retail outlets to small manufacturing companies to professional service providers. Undoubtedly, you will also see the signage for the office of a professional accountant. This landscape reflects the scope of small businesses, the magnitude of their role in today's global economy and the very important role that accountants play in contributing to the viability and sustainability of small and medium-sized enterprises (SMEs.)
The accountancy profession is inextricably linked to the development of SMEs. Whether working for, or as a consultant to, an SME, accountants' expertise helps to keep SMEs on sound financial and strategic footing and better enables them to achieve their future potential with greater clarity. The International Federation of Accountants (IFAC) and its 157 member organisations around the world have long recognised this link. They have made it a priority to take a leadership role in addressing SME issues and to support small and medium-sized accounting practices (SMPs) in delivering high-quality services to these entities.
Specialised committee
While many of IFAC's activities support SMPs and SMEs, it also has a dedicated group, the Small and Medium Practices Committee, that specifically focuses on identifying and addressing the issues of greatest importance to these constituencies.
In particular, the SMP Committee works to help shape the form and content of international standards, largely by providing direct input to the standard-setting process, including that of the International Auditing and Assurance Standards Board, the International Ethics Standards Board for Accountants and the International Accounting Standards Board (IASB). The committee's goal is to enhance the relevance and proportionality of international standards to SMEs and SMPs. Among other issues, the SMP Committee supported IFAC in providing significant input to the development of the IASB's International Financial Reporting Standard for Small and Medium-Sized Entities. This is a key development in the convergence of financial reporting by small business. It also promises to provide a more tailored information set to the users, lenders included, of SMEs' financial reports.
Regulatory agenda
IFAC's SME and SMP initiatives extend beyond standard setting. SME issues are also on IFAC's regulatory and policy-making agenda. In two letters that IFAC submitted to the G-20 countries, it called on the G-20 to address the needs and realities of SMEs in the formulation and implementation of policies and financial reforms.
Tools and resources
With regard to practical support for SMPs and SMEs, the SMP Committee provides implementation materials and web-based information resources and tools. The goals of these materials are to help enhance the capacity of SMPs to efficiently and consistently implement international standards, to help SMPs remain competitive and client focused, and to strengthen the ability of SMPs to proficiently operate and manage their practices.
Key implementation resources include the Guide to Using International Standards on Auditing in the Audits of Small and Medium-Sized Entities and the Guide to Quality Control for Use by Small and Medium-Sized Practices, both of which may be downloaded at no cost from the IFAC bookstore (www.ifac.org/store). A third implementation resource, the Guide to Practice Management for Use by Small and Medium-Sized Practices, will be available in 2010.
International forum
IFAC's website (www.ifac.org) features the International Center for Small and Medium Practices (the Center). The Center provides access to the IFAC KnowledgeNet - a multilingual global search engine for accountants - a discussion board, and an archive of SMP eNews, a free quarterly electronic newsletter about the SMP Committee's work and other relevant SMP/SME initiatives from around the world. Individuals may subscribe to this eNews through the IFAC home page.
In addition, links to extensive resources for SMEs and SMPs are provided in the financial crisis section of the IFAC website (http://www.ifac.org/financial-crisis/smp-sme-resources.php). Included are links to guidance, alerts and other documents produced by national accountancy bodies, regulators, standard-setters and various international organisations.
Although the financial crisis remains a major concern, IFAC, together with its members, is urging SMPs and SMEs to not lose sight of longer term strategic issues, such as competition and regulatory complexity. Addressing these issues is critical to helping SMEs to keep their doors on 'main street' open.
