IFAC SMP Committee
Meeting
Summary
IFAC SMP Permanent Task Force
Tunis, Tunisia, May 3-4, 2007
Chennai,Paul
India,
January 10-11,
2007
Contact:
Thompson
(paulthompson@ifac.org)
Chennai, India, January 10-11, 2007
This meeting summary of the IFAC Small and Medium Practices
Chennai, India, January 10-11, 2007
(SMP) Committee has been prepared for information purposes only.
Decisions reported are tentative and reflect only the current status of
Chennai, India, January 10-11, 2007
discussions on projects which might change after further deliberation
by the SMP Committee.
Chennai, India, January 10-11, 2007
Strategic Review
Chennai, India, January 10-11, 2007
The committee opened the meeting by discussing and approving its
Chennai,and
India,
January 10-11,
2007
Strategic
Operational
Plan for
the years 2007-2010. The
committee agreed to continue its current two-pronged strategy of
Chennai,to
India,
January 10-11,
2007
inputting
international
standard
setting, to help ensure the
relevance of these standards to SMPs and small and medium entities
Chennai,and
India,
Januarypractical
10-11, 2007
(SMEs),
providing
support to help raise the capacity of
SMPs to apply these standards and to remain competitive. The plan
Chennai, India,
January
recognizes
the need
to get10-11,
SMPs2007
and SMEs more engaged in the
international standard-setting process.
Chennai, India, January 10-11, 2007
Input to IAASB Standard Setting
Chennai, India, January 10-11, 2007
The committee agreed to continue to devote a large proportion of its
Chennai,
India, January
10-11, 2007
time
and resources
to providing
input to the International Auditing
and Assurance Standards Board’s (IAASB) standard-setting process
Chennai,
India,
January 10-11,
2007
with
the goal
of ensuring
that SMP
and SME issues are reflected in
its standards. In 2007 and 2008, the emphasis will be on inputting to
Chennai,
India,
January
10-11, 2007
the
IAASB’s
project
to improve
the clarity of its standards. The SMP
Committee expressed broad satisfaction with progress on the IAASB
Chennai,
India, January 10-11, 2007
Clarity
project.
Chennai,
India, January
10-11,
2007
Input
to IESBA
Standard
Setting
The
committee
and agreed
Chennai,
India,discussed
January 10-11,
2007 the content of a comment letter
on the exposure draft (ED) of proposed revisions to the independence
sections
the Code
of Ethics
Professional Accountants issued by
Chennai,ofIndia,
January
10-11,for2007
the International Ethics Standards Board for Accountants (IESBA)
The
letter,India,
a jointJanuary
submission
with
the Developing Nations
Chennai,
10-11,
2007
Committee, questioned whether some proposals, especially
mandatory
partner
rotation
for audits
Chennai, India,
January
10-11,
2007 of entities of significant public
interest and new restrictions on the provision of non-assurance
Chennai, India, January 10-11, 2007
Chennai, India, January 10-11, 2007
Chennai, India, January 10-11, 2007
services, would result in over-regulation of SMEs and so be
detrimental to the public interest.
The committee also discussed the need for clarification on the
application of the new network firm definition.
Input to IASB Standard Setting
The committee discussed a draft IFAC comment letter on the ED of
the proposed International Financial Reporting Standard for Smalland Medium-sized Entities (IFRS for SMEs) issued by the
International Accounting Standards Board (IASB). The committee
has been charged with leading the drafting of the IFAC response. The
committee is highly supportive of this project and is assisting the
IASB with research and consultation including helping with the
planned ISAB field tests.
Micro-Entity Research Project
At its meeting, the SMP Committee discussed progress on the second
phase of its research project on micro-entity financial reporting. The
first phase culminated in the release in December 2006 of an
information paper entitled Micro-Entity Financial Reporting:
Perspectives of Preparers and Users.
The second phase is investigating whether the proposed IFRS for
SMEs will meet the needs of users of financial reports of microentities. It comprises interviews and surveys of users and preparers of
micro-entity reports in various countries. Field work has already been
completed in the United Kingdom and Kenya and is well underway in
Poland, Italy, Uruguay, Malaysia, and India. The research findings
will likely be summarized in an information paper as well as used in
the IFAC response to the IFRS for SMEs ED.
ISA Guide
The committee received an update on the project to develop a nonauthoritative explanatory guide to the use of International Standards
on Auditing (ISAs) on SME audits (ISA Guide) by the Canadian
Institute of Chartered Accountants. The guide is intended to help
practitioners around the world understand, comply with, and apply
ISAs in SME audits.
The committee will shortly review a final draft of the guide and hopes
to make the final guide available through the IFAC website in the
final quarter of 2007. IFAC is also exploring ways to promote the
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development of local adaptations and products derived from the
guide, such as audit software, checklists, and questionnaires.
Quality Control Guide
The open request for proposal (RFP) for the development of a Quality
Control Guide elicited nine submissions, five from IFAC member
bodies and the remainder from commercial publishers. The guide is
intended to help SMPs understand and implement International
Standard on Quality Control 1.
The committee plans to analyze the submissions and decide on the
preferred supplier at its third and final meeting of 2007.
Practice Management Guide
The committee discussed a draft RFP to commission the development
of a Practice Management Guide. The guide would seek to improve
the operational efficiency of SMPs and make them more responsive
to the needs of their clients. It was agreed to issue the RFP in the
coming few months.
IFACnet
IFACnet, the global, multilingual accountancy search engine
developed by IFAC and its member bodies, recently expanded its
resources, particularly for SMPs. The committee discussed how to
develop IFACnet (www.ifacnet.com) so as to best serve SMPs and
advised on what additional organizations with information of interest
to SMPs should join IFACnet in the coming months.
Outreach and Collaboration
The committee agreed to hold a one-day SMP Forum on October 30
in conjunction with its third and final meeting of 2007 in Malta. The
forum will follow a similar format to that used in Hong Kong in July
2006.
Next Meeting
The next meeting of the SMP Committee will take place on
November 1-2, 2007 in Malta.
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