January 11, 2008
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In This Issue:
1. IFAC Releases Guide to Using International Standards on SME Audits
IFAC's SMP Committee has released a new implementation guide to assist SMPs and other practitioners in applying International Standards on Auditing (ISAs), developed by the International Auditing and Assurance Standards Board, to the audit of small and medium entities (SMEs). The publication, Guide to Using ISAs in the Audit of Small- and Medium-sized Entities, provides a detailed analysis of all ISAs issued as of December 31, 2006 and their requirements in the context of an SME audit. It also features an in-depth case study based on a typical SME audit. The guide can be downloaded free-of-charge from the IFAC online bookstore (http://www.ifac.org/store).
2. New Paper Examines Suitability of IFRS for SMEs to Micro-Entities
As part of its ongoing project on micro-entity financial reporting, the SMP Committee has released a report on research into whether the proposed International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs), developed by the International Accounting Standards Board (IASB), is suitable for micro-entity financial reports. The research was developed based on focus group interviews of users and preparers of micro-entity financial reports in developed and developing countries. The findings in the paper, entitled Micro-Entity Financial Reporting: Some Empirical Evidence on the Perspectives of Preparers and Users, were considered in the development of the IFAC comment letter on the IFRS for SMEs exposure draft (see item 6 below).
3. SMP Committee Releases Strategic Plan; Seeks Additional Feedback
The SMP Committee is seeking feedback on its Strategic and Operational Plan 2007-2010, which sets out the direction and priority for the committee's activities over the four-year period. This input will assist the SMP Committee in making further modifications to the plan during the first half of 2008. Comments may be sent to Paul Thompson, SMP Committee Senior Technical Manager, by email to paulthompson@ifac.org.
IFAC member bodies can obtain an article summarizing the plan, which they can publish in their newsletters or journals, by contacting Paul Thompson.
4. Committee to Develop Guides on Quality Control and Practice Management
Following the release of the ISA Guide (see item 1), the SMP Committee has undertaken a project to develop guidance to assist SMPs in implementing International Standard on Quality Control 1. Final publication is tentatively scheduled for the third quarter of 2008. For more information, see the request for proposal.
The SMP Committee has also received three proposals to develop a guide to help SMPs improve their operational efficiency and make them more responsive to the needs of their clients. Further details on the practice management guide, which is tentatively scheduled for release in early 2009, are available at http://web.ifac.org/download/Practice_Management_Guide_RFP.pdf.
5. IFAC Survey Finds Supporting SMPs/SMEs a Top Global Issue for 2008
Over 90 percent of respondents to IFAC's first annual Global Leadership Survey said that supporting SMPs and SMEs would be an important issue for the accountancy profession globally in 2008. IFAC conducted this survey of the Presidents and Chief Executives of its member bodies and associates to determine the issues impacting economic growth and those affecting the accountancy profession worldwide over the next year. Survey respondents also selected "growth of SMEs" as the number two issue contributing to economic development in their countries in the next year. For the complete survey results, visit the IFAC website at http://www.ifac.org/globalsurvey.
6. IFAC Comments on Proposed IFRS for SMEs
IFAC has provided a comment letter to the IASB on its proposed IFRS for SMEs in which IFAC emphasizes its strong support of the project. This support included assisting the IASB with research and consultation, as well as promotion of its field testing of the proposed standard. However, the IFAC letter calls for further simplification of the proposed standard. For more information on the project and to view comment letters, visit the IASB website.
7. Outcomes of 2007 SMP Forum
More than 120 delegates from 37 countries attended the 2007 IFAC SMP Forum in St. Julians, Malta on October 30. Forum discussions focused on addressing the challenges and opportunities facing SMPs and SMEs, particularly those in the Mediterranean, Middle East and Central Asia. Presentations made at the Forum, as well as a summary of outcomes, are available at http://www.ifac.org/SMP/2007_speeches.php.
8. SMPs and SMEs Encouraged to Comment on Proposed International Standards
The International Auditing and Assurance Standards Board (IAASB) is seeking comments on a number of exposure drafts issued as part of its project to improve the clarity of ISAs. SMPs and SMEs are encouraged to review the exposure drafts and to assess their impact on SME audits. The exposure drafts can be viewed at http://www.ifac.org/eds.
The IAASB expects to complete the redrafting of all 35 ISAs by the end of 2008. Further information on the IAASB's work program is available at http://www.iaasb.org.
9. CICA Launches Website on Transition to International Standards
The Canadian Institute of Chartered Accountants (CICA) has launched a new website that focuses on the upcoming changes to international standards in Canada, including implementation of ISAs and IFRSs. The website features a range of materials, including self-study options, information on seminars, links to international resources, publications, and other tools to help Canadian accountants and other financial reporting professionals in implementing the standards. The CICA has also issued a bulletin that features an article on the adoption of ISAs.
10. UK Board Releases New Guidance on Smaller Entity Audit Documentation
The United Kingdom Auditing Practices Board has issued new guidance on how the special considerations of a smaller entity audit impact the working papers that an auditor needs to prepare. The guidance, entitled Smaller Entity Audit Documentation, is directed at auditors of companies that are exempt from the audit requirement but which choose to have a voluntary audit. It can be downloaded at http://www.frc.org.uk/apb/publications/pub1405.html.
11. European Congress Focuses on SMP/SME Issues
In September 2007, the Fédération des Experts Comptables Européens (FEE) held its Third Annual European SMP/SME Congress. Entitled New Opportunities for SMPs and SMEs: Transparency, Finance and Simplification in a European Context, the Congress sought to address a wide range of accounting and auditing issues affecting SMEs and SMPs. Presentations and other materials can be viewed on the FEE website at http://www.fee.be/news/default.asp?library_ref=2&category_ref=214&content_ref=667.
12. Future SMP Committee Meetings
The next meetings of the SMP Committee will be held in São Paulo, Brazil on January 23-24, 2008 and in New York City on June 19-20, 2008. Highlights of previous meetings can be viewed at http://www.ifac.org/SMP/Meetings.php.
For more information about any of the items mentioned above or other information about the IFAC, please contact pr@ifac.org or visit the multilingual International Center for SMPs at http://www.ifac.org/smp.
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. IFAC is comprised of 157 members and associates in 123 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business those working in small and medium practices.