profession is at a crossroads and practitioners are being faced
with a myriad of challenges and opportunities. These were explored
at the European Federation of Accountants SME/SMP congress in
Denmark this month. Carolyn Canham reports.
In today’s world, globalisation is a reality to even the
smallest businesses. Facing the challenges and embracing the
opportunities is key to businesses’ success. This was the consensus
from a European congress for SMPs in Denmark this month.
The importance of being able to offer SME clients a complete
range of high quality services, through both specialising and
building referral networks, was held to be key, while the question
of whether audit is a suitable tool for small businesses was
debated.
The congress chair, KPMG Denmark partner Henry Heiberg,
illustrated the extent of globalisation for SMEs and SMPs. In the
Nordic countries even the Big Four offices are SMPs – Heiberg’s
KPMG office in the West of Denmark has about 45 people and many SME
clients.
“One of my clients is a two-person business and all their
production is in China and Korea, but all the sales are in
Denmark,” Heiberg explained. “Have the accountants kept track of
these developments?”
The modern SME expects the same level of knowledge and support
from their SMP that larger entities get from larger practices. This
includes risk management, IT and succession planning, according to
Sylvie Voghel, chair of the International Federation of Accountants
(IFAC) SMP Committee.
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By GlobalData“Specialisation is imperative because if you do everything, you
do nothing very well,” she said.
Rudd Wolffensperger, a member of the European Federation of
Accountants’ (Fédération des Experts Comptables Européens – FEE)
SME/SMP working party and a partner in a regional Dutch audit firm
with two partners and five employees, agreed.
“You do not have to know everything, but you need to be able to
refer,” he said. “It is vital for an accountant to be able to say
‘I don’t know the details of doing business in the Ukraine, but I
know someone who does’.”
Wolffensperger said a recent Dutch study asked SMEs how they
select their accountants and five main criteria arose:
interpersonal relationship; price/quality ratio; reputation of the
practice; availability of a network; and specialisation.
The networking between delegates looking to form referral
networks was a particularly interesting element of the congress,
Heiberg tells The Accountant, adding that he made a number
of contacts at the event. The KPMG partner told the congress that
in many ways it is harder for a Big Four SMP office to deal with
the internationalisation of clients than it is for non-Big Four
SMPs.
“Other SMPs can join networks of similar size practices with
similar size clients, however for international work I often can’t
refer to KPMG because in most countries they don’t have an SME
practice. So please don’t leave me out of the networking,” he
said.
The audit of SMEs was one particularly hotly-debated topic, with
contrasting opinions as to whether different audit standards are
needed for different size companies, or whether audit is actually a
suitable tool for small companies.
Hurvé Puteaux, the France-based chief executive of accounting
organisation JPA International, said there is no need for different
audit standards for different size companies.
“An audit is an audit,” he said. “If you want things to be
easier and easier, then one day it will be so easy that no one will
need us anymore.”
In contrast, the Danish Institute of State Authorised Public
Accountants (Foreningen af Statsautoriserede Revisorer – FSR) is
currently in the process of preparing a draft set of simplified
audit standards. The institute’s president, Kurt Gimsing, said he
believes the use of the ISA framework for SME audits is overkill.
He said this is not just the belief of auditors, but also of
clients and the business community, and predicted that the
statutory audit threshold in Denmark is likely to change
considerably because political players see a very complex,
one-size-fits-all structure that is used from micros up to the
largest companies.
Gimsing suggested that using the review model rather than an
audit was often not sufficient as it can only provide a negative
conclusion. However, his compatriot, Heiberg, disagreed: “In my
book, we have to stick to the conclusion that an audit is an audit
and a review is a review and we should not have any ‘audit light’
as this would mean that we no longer could agree on what an audit
is internationally.
“As I see it, we would end up in something that could seem like
what is due practice in Denmark is different to what is due
practice [in other jurisdictions]. As far as I can see, we had to
find the solution for the SMEs within the framework that we know,”
he said.
Heiberg said he is personally not in favour of retaining a
statutory audit for all companies, regardless of size.
“I don’t think it is okay that someone has to buy audit when
they don’t need it,” he said.
In retrospect
FEE president-elect Hans van Damme tells The Accountant
he is a “happy man looking back to the conference”. The federation
is considering whether to continue to hold the event on an annual
basis or move to bi-annual.
“But we certainly need to continue doing events for the SME/SMP
practice because it is an important part of our constituency,” van
Damme says. “The beauty of such events is also getting the
practitioners together – not only the acting auditors or acting
accountants, but also business advisors and in certain cases
entrepreneurs who are trained as auditors, but are no longer
working as accountants and therefore doing different business
practices.
“I think the exchange of information between those and also
between the nationalities is a great benefit to a large group of
our constituency.”
The event was staged by FEE and the Nordic Federation of
Accountants. There were almost 300 delegates from 22 countries.
