IFRS for SMEs: Views from IFAC

Thank-you Mr. Chairman. Good morning ladies and gentlemen.
 
Before I start I would just like to say what a privilege and a pleasure it is for me to be able to participate on this panel. I wish to share with you today the significant points that IFAC is likely to make in the comment letter to the IASB. I will also outline some of the key findings from a micro-entity financial reporting research project. And finally I will spend a few minutes on assurance services for SMEs.
 
Let me frame my comments with some observations. In the recent past, issues impacting small- and medium-sized entities (SMEs) and small-and medium-sized practices (SMPs) have rose to the top of the agenda - of the regulators, professional accountancy bodies, standard setters, and IFAC. The IASB’s project to develop an SME accounting standard is testimony to this. It seems the main spur for this emphasis on SME/SMP is concern over regulatory overload, overload that is stifling the ability of small business to innovate, grow and compete. This regulation, including standards of accounting, auditing, and ethics, was often tailored to suit large business. It’s no surprise it is ill fitting for small business. The standards sometimes lack relevance to SME/SMP. And SME/SMP often lack the capacity to efficiently implement and comply with them.