EFAA | Latest from Brussels | January 2019 N° 2

EFAA Panel Discussion on NFI for SMEs: REGISTER NOW!
As this IFAC Gateway article explains there are growing pressures for businesses to explain how their activities impact the environment and society at large. Small and medium-sized enterprises (SMEs) account for most of the private-sector GDP, employment, and environmental and social impact so it is no surprise that increasingly the general public demands to know more about such impacts. With this in mind, EFAA hosts on 19 February 2019 a panel discussion on the reporting of non-financial information by SMEs at the Press ClubBrussels Europe. Panelists, including MEPs Wolf Klinz (ALDE) and Philippe Lamberts (Group of the Greens), Veronique Willems (SMEunited former UEAPME), Bodo Richardt (EFAA President) and Jonathan Labrey (Chief Strategy Officer, IIRC), will discuss whether SMEs should disclose more non-financial information (NFI) as well as become more sustainable.As places are limited please register now here.
For more information: Please contact Sara Zambelli

Non-Financial Disclosures: Developments from DG FISMA
DG FISMA has announced that the Technical Expert Group (TEG) on Sustainable Finance has published its report on climate related disclosures. This report contains recommendations for the update of the Commission’s non-binding guidelines on non-financial reporting that accompany the Non-Financial Reporting Directive (Directive 2014/95/EU) and which may be voluntarily adopted by SMEs, specifically with respect to climate-related issues and to align those guidelines with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Stakeholders are invited to provide their comments on the report by 1 February 2019 here. The TEG will give the Commission services a summary of these comments to be considered in the update of the guidelines. The services of the European Commission will subsequently consult stakeholders on the update of the non-binding guidelines on non-financial disclosure before their planned adoption in June 2019.
For more information: Please contact Paul Thompson

Edinburgh Group’s New SMP Research Report
The Edinburgh Group, a coalition of 16 accountancy bodies from across the world including EFAA, ACCA and NBA, has just published a global research report ’The SMP of the Future in a Changing World’ that sets out recommendations as to how SMPs and the professional accountancy organisations that support them should prepare together for a rapidly evolving future. SMPs need to be proactive in seeking out new markets for their services and consider growth and diversification of their service offerings. Meanwhile PAOs need to ensure training and development is available to SMP members to help them to adapt to a changing world. The report is based on a survey of 1 906 SMP respondents from 52 countries, interviews with key staff in Edinburgh Group PAOs and a series of SMP case studies. During the IFAC SMP Committee meeting in London in October 2018, there was a panel discussion in which panelists shared their ideas and insights on how SMPs can transform into the “Practice of Tomorrow”.
For more information: Please contact Paul Thompson

Importance of International Growth to SMEs Revealed in ACCA Report
EFAA member ACCA has released a new study looking into how SMEs grow. ‘Scale-up Success: What do SMEs need to supercharge their growth?’ involved companies with 250 employees or less and considered how to approach the management and governance of aiding their future growth. The study highlights the importance of seeking external advice as critical to realising an SME’s long-term growth potential. Jamie Lyon, interim director of professional insights says: “Use external advice to develop what you have—SMEs can help improve their resilience by developing relationships with relevant sources of external advice”. SMPs should take note as they are often regarded as the most reputable source of such advice.
For more information: Please contact Paul Thompson

Tax Update: Qualified Majority Voting, EU VAT Legislative Changes & Making Tax Digital
The European Commission recently published a communication ‘Towards a more efficient and democratic decision making in EU tax policy’ in which it invites views on the possibility of a gradual progression towards decision making based on qualified majority voting (QMV) in four steps. SMEunited is seeking the opinion of its members, including EFAA, as to if – and to what degree – SMEunited should support this initiative. Please email us your remarks by the end of February. Based on input SMEunited will duly consider whether to develop a position paper. Readers may also wish to refer to this Accountancy Europe fact sheet that provides a useful overview of the EU VAT legislative changes agreed and in progress until the definitive regime in January 2022. Finally, this Accountancy Age article argues that new legislation to make tax digital presents many opportunities for accountants and tax advisors to enhance the services they provide.
For more information: Please contact Paul Thompson

Developments in International Standard-Setting: IAASB and IESBA
The International Audit and Assurance Standards Board (IAASB) has appointed Willie Botha as its new Technical Director. Most recently he served as Senior Executive, Assurance and Practice, with the South African Institute of Chartered Accountants (SAICA). The IAASB has just issued this short presentation on the key changes to help practitioners implement ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures. Meantime IFAC is exploring if new or additional initiatives could better assist SMPs in efficiently and effectively implementing the ISAs - make your voice heard here. This IFAC Gateway article (also available in French and Spanish) looks at the International Ethics Standards Board for Accountants’ (IESBA) recently updated Code of Ethics for Professional Accountants and examines the key areas of focus for SMEs and SMPs. IFAC, the IAASB and IESBA are planning to host an event in Paris on 16-17 May 2019 to discuss audit, assurance and ethics standards for SMEs.
For more information: Please contact Paul Thompson

No Deal Brexit Poses Serious Challenge to SMEs
According to SMEunited Europe’s SMEs are very concerned about a no-deal Brexit, the likelihood of which seems to have increased since Prime Minister Theresa May’s proposed deal was overwhelmingly rejected by the British Parliament. A no-deal Brexit would be disastrous for SMEs in the UK and pose major challenges for SMEs in the rest of European Union. Hence, European SMEs need to urgently intensify efforts to be prepared in case of a no-deal scenario. Recently Bruegel's director Guntram Wolff testified in the Bundestag EU Committee on the possible consequences of a no-deal Brexit and the EU's preparation for this eventuality: read the Policy Contribution based on the testimony here. Guntram Wolff and senior Bruegel fellow Zsolt Darvas discuss the possibilities and probabilities inherent in a no-deal Brexit scenario here.
For more information: Please contact Paul Thompson

Member Feedback and Contributions
Please share this newsletter with colleagues. Members are welcome to translate and reproduce extracts from this newsletter for their own communication purposes while acknowledging this newsletter as the source. The next issue is slated for mid February 2019. We welcome feedback on how to improve this newsletter as well as contributions from our members, especially initiatives that other EFAA members might be keen to know about. Please contact Sara Zambelli / Paul Thompson

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