The biggest challenges facing small- and medium-sized accounting practices (SMPs) worldwide are complying with regulations and standards and attracting new clients, according to the 2014 IFAC^® Global SMP Survey. Conducted annually, the Global SMP Survey provides unique insights into the challenges and opportunities facing SMPs around the world.

“IFAC is committed to building the capacity of SMPs worldwide, and the findings from our SMP Survey are critical to that mission,” commented IFAC CEO Fayezul Choudhury. “Understanding the challenges that SMPs and their clients face, both on a regional and global scale, helps IFAC and our member organizations better serve this important constituency and accurately represent them in our interactions with regulators, standard setters, and policy makers.”

The key findings from the 2014 IFAC Global SMP Survey include:

Challenges Facing SMPs

• Keeping up with regulations and standards (57%) and attracting new clients (58%) were identified as the two greatest challenges facing SMPs worldwide. Pressure to lower fees (51%), rising costs (50%), and differentiating from the competition (50%) were nearly tied as the next biggest challenges.
• Attracting new clients was found to be a key concern in the Middle East (80%), but much less of a concern in North America (33%) and Australasia/Oceania (36%).  
• Regulatory concerns ranked highly at firms in Central and South America (68%), the Middle East (65%), and Europe (63%).

Challenges Facing SME Clients

• Rising costs (67%) and economic uncertainty (66%) were identified as the top two challenges facing SME clients.
• This was especially apparent in the Middle East and Africa, where these challenges were ranked higher than any other region.

Percentages in the above represent respondents rating these challenges as a “high challenge” or “very high challenge.”

Performance and Outlook

• SMPs show promising economic growth, with 72% of firms maintaining or growing the previous year’s practice fee revenues (31% reported that practice fee revenues stayed the same, 37% reported a moderate increase, and 4% reported a substantial increase).
• Australia/Oceania (63%), North America (56%), and Africa (55%) ranked as the top three regions reporting moderate to substantial growth in practice fee revenues.
• Tax (48%) and advisory/consulting services (50%) were projected to be the two biggest sources of revenue growth for the year ahead. (Percentages represent respondents rating these services as “increase moderately” or “increase substantially.”)

“It is encouraging to see SMPs maintaining or growing their revenues as they are a crucial part of the global economy,” said SMP Committee Chair Giancarlo Attolini. “With solid performance this past year, and optimism regarding revenue growth in the coming year, SMPs reflect the current state of the global economy and the spectrum of opportunities for small businesses.”

The year-end 2014 survey, which is being undertaken in collaboration with lead researchers from the University of Dayton in the US, received 5,083 responses from 135 countries, and was conducted in 21 languages. For full results of the IFAC Global SMP Survey, expected in March 2015, please visit and subscribe to SMP updates from: www.ifac.org/SMP. Due to different response rates in different geographic areas, results may not be statistically representative of global or regional populations of SMPs. IFAC wishes to thank the many member and regional organizations that helped with translation and distribution of the survey.

About the SMP Committee
The SMP Committee of the International Federation of Accountants (IFAC) represents the interests of professional accountants operating in small- and medium-sized practices (SMPs). The committee develops guidance and tools and works to ensure the needs of the SMPs 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, especially in supporting SMEs, and the importance of the small business sector overall.

About IFAC
IFAC is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of more than 175 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The SMP Committee submitted this comment letter to the IESBA in response to their Exposure Draft: Proposed Changes to Certain Provisions of the Code Addressing the Long Association of Personnel with an Audit or Assurance Client

Note: Deadline extended until December 22, 2014. 

The International Federation of Accountants (IFAC), the global organization for the accountancy profession, has launched its 2014 IFAC Global SMP Survey (www.surveygizmo.com/s3/1800424/IFAC-GLOBAL-SMP-SURVEY-2014) to investigate current opportunities and challenges faced by small- and medium-sized practices (SMPs) in the accounting profession worldwide. Available in 21 languages, the survey is open through December 15, 2014, and takes less than 10 minutes to complete.

Conducted annually, the survey tracks prominent trends and developments and generates an overview of the financial health of SMPs in the industry. This year, survey questions were designed with the assistance of several academics and lead researchers at the University of Dayton in the US.

Results from the survey, which will be published by IFAC in early 2015, will help IFAC to better understand the country-specific and industry-wide needs and challenges of SMPs, and shape future programs and initiatives. 

The SMP Committee submitted this comment letter to the IAASB in response to their Exposure Draft: Proposed Changes to the International Standards on Auditing (ISAs): Addressing Disclosures in the Audit of Financial Statements.

IFAC^® SMP Committee Chair, Giancarlo Attolini, spoke at the Conferência Brasileira de Contabilidade e Auditoria Independente, hosted by IBRACON, about IFAC’s activities to support small- and medium-sized practices (SMPs), including:

• supporting the implementation of international standards;
• providing input to the development of international standards; and
• contributing to the content and strategy for the Global Knowledge Gateway.

He also shared insights from the last IFAC SMP Quick Poll, which is conducted annually in over 15 languages to take a snapshot of the issues, trends, and current state of SMPs and their small business clients.

The SMP Committee submitted this comment letter to the International Ethics Standards Board for Accountants in response to their Exposure Draft, Proposed Changes to Certain Provisions in the Code Addressing Non-Assurance Services for Audit Clients. 

The IFAC Small and Medium Practices (SMP) Committee supports the implementation of international standards by developing comprehensive guides and supplementary resources to help SMPs and other practitioners provide high-quality services, including:

• Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities
• Guide to Quality Control for Small- and Medium-Sized Practices
• Guide to Review Engagements

As part of its future strategy, the Committee is considering what additional resources could most assist practitioners in efficiently and effectively implementing some of the other standards from the International Auditing and Assurance Standards Board, including:

• Agreed-Upon Procedures (AUP)—ISRS 4400, Engagements to Perform Agreed-Upon Procedures Regarding Financial Information
• Other Assurance Engagements—International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information
• Compilation Engagements—International Standard on Related Services (ISRS) 4410, Compilation Engagements

Do you need comprehensive guides, case studies or other support material? Please take the SMP Committee’s short poll to rank the need and demand for potential new guidance in these areas by August 15 in the Global Knowledge Gateway: "Supporting the Implementation of International Standards—What’s Next?" 

Part I explains the rationale and underlying theories that support the switch from hourly to value pricing.

Part II discusses early challenges and practical steps to take when beginning to transition your accounting practice to a pricing model based on value. 

Part III outlines the 8 steps an accounting practice or firm should take to implement value pricing. Accompanying exhibits include practical checklists and forms.

Articles by Ronald J. Baker. This three-part series of articles were excerpted, and adapted, from his latest book, Implementing Value Pricing: A Radical Business Model for Professional Firms, published by John Wiley & Sons, Inc., 2011

This presentation from Dawn McGeachy, Member, IFAC SMP Committee, includes: an overview of recent international and national audit quality developments and a practical review of the relevant Intenational Standards on Auditing (ISAs) and International Standard on Quality Control (ISQC) 1.  

This presentation from Dawn McGeachy, Member, IFAC SMP Committee, includes: an overview of the IFAC SMP Committee and recent activities including the results of the 2013 year-end IFAC SMP Quick Poll, and the implications of the growing demand for business advisory services from SMPs' small business clients.