International Federation of Accountants

IFAC’s Role in Supporting SMPs

Robert Bunting, IFAC President

SMP Forum

Beijing, China

October 28, 2009

The Credit Crisis

IFAC SMP Forum

• Raising the profile of SMPs and SMEs

• Collaboration with others

• IFAC’s global voice

Agenda

IFAC SMP Forum

• 42 million in China – 99.9%

• 68% of exports

• 75% of new jobs created

• More than 65% of China’s patents

• However – 67,000 ceased operations in first half of 2008 (source: NDRC)

Importance of SMEs

IFAC SMP Forum

• Financial, tax, accounting and assurance services

• Regulatory compliance

• Strategic and business sounding board/advisor

• IT and financial reporting systems support

• Risk management, fraud prevention, HR and more

• Credibility and communications with banks and outside stakeholders (FT Banker Survey)

SMPs - Helping SMEs Survive and Thrive

IFAC SMP Forum

• Guide to use of ISAs on SME audits

• Guide to Quality Control for SMPs

• Practice Management for SMPs

• Advocacy of IFRS for SMEs

• Promotion of “Train the Trainer” for IFRS for SMEs

IFAC Support for SMPs

IFAC SMP Forum

• IAASB alternative assurance project

• Participation in IFAC Boards and Committees

• SMP Review initiative

• Primary placement in the IFAC “global voice” initiative

IFAC Support for SMPs

IFAC SMP Forum

• Conducted by FT Banker magazine

• Focused on SME lending and SMP services

• Represents marketplace validation for

– Impact of credit crisis on SMEs

– Critical role of professional accountant in accessing credit

• Other opportunities for SMPs

– Assisting with private capital raising

– Support for public listing

• The Banker Survey is available at this conference

IFAC Support for SMPs – FT Banker Survey

IFAC SMP Forum

• World Bank initiative announced in July 2009

• Objective is “coordinated and sustained capacity building for the profession”

• Working together:

– IFAC

– World Bank, Regional Development Banks, Bilateral Agencies

– Member Bodies

– Regional Organizations

• Long-term work in progress

Collaboration with Others

IFAC SMP Forum

• Threats

– Credit availability

– Shrinking SME population

– Loss of innovation and source of growth

– Re-regulation of the financial markets

The Global Voice and SMPs

IFAC SMP Forum

• Opportunities

– Accounting and auditing are important issues

– SMEs are recognized as necessary to growth and innovation

– The accounting and auditing profession has received less criticism than in the past

– We can help shape the future – using our “Global Voice”

The Global Voice and SMPs

IFAC SMP Forum

• How?

– G-20 Forum (and others)

– Common voice – nationally and globally

– Featuring the importance of helping the SME (SMP) sector – “Think small first”

The Global Voice and SMPs

International Federationof Accountants

www.ifac.org