EFAA Latest From Brussels | October 2019 N° 17

EFAA's President Activities
74ª Congress 25-26 September de L’Ordre des Experts-Comptables, Paris, France Salvador Marin was invited to attend the 74ª Congress CSOEC as representative of EFAA for SMEs. He had the opportunity to share relevant information on the future of the SMPs and of our profession in general with the President of CSOEC and President of CNCC

Meetings with SKWP and PIBR 26-27 September, Warsaw, Poland Salvador Marin, President of the EFAA for SMEs, had two working meetings in Warsaw, one with the president and team of PIBR and one with the President and team of SKWP. In both meetings the strategic lines of the future of EFAA for SMEs were presented. They also discussed the need to continue working for the social recognition of the accounting profession and for the SMPs in general, their importance at local and European level, as well as the high quality of services that they develop in their daily relationship with millions of SMEs.

APFM 11 October, Baku, Azerbaijan
Salvador Marin spoke at the APFM VI Eurasian Forum of Accountants and Auditors about how SMEs can gain from voluntary audit and the need for simpler separate audit standard for SMEs. Marin also shared with the delegates EFAA’s research insights into the nature and extent of reporting of non-financial information (NFI) by SMEs. EFAA is a leading advocate for the voluntary provision of NFI on issues such as climate change. Integrated Reporting offers a framework for the provision of such information.

DG COMP, 2 October, Brussels Salvador Marin, Johan De Coster, EFAA Board member, and Paul Thompson, EFAA Director, met with senior staff of DG COMP Director Valentza. DG COMP is presently looking into the nature and extent of market failures in access to finance by SMEs. Marin stressed the role of SMPs in advising SMEs on access to finance and emphasized they are often key to SME awareness of special finance schemes. Marin shared an EFAA response to the DG COMP survey and underlined their need to engage SMPs when changing or developing schemes. In Q1 2020 DG COMP will compile feedback to this survey and present proposed solutions to any identified market failures.

For more information: Please contact Salvador Marin

German and Slovenian Languages Added to Digital Competency Rating Tool
The German and Slovenian languages have been added to EFAA’s Digital Competency Maturity Model - DCMM™, a tool to help SMPs rate and improve their digital competency. Launched on 2 September 2019 the tool was originally only available in English, Portuguese and Spanish. French, Flemish and Italian languages will likely be available by the end of 2019. The tool can be accessed from the EFAA home page (see picture on left). In his conference presentation project leader Noël De Rudder from EFAA’s Belgian member the Institute of Accountants and Tax Advisors (ex IEC-IAB) explained the value of the tool.

For more information: Please contact Paul Thompson

Developments in International Standard-Setting

Global Adoption & Implementation IFAC has released a new report detailing how and where international accountancy standards — which focus on audit and assurance, ethics, education, and private and public sector accounting — are being adopted and implemented globally. The International Standards: 2019 Global Status Report, which includes data from the more than 170 professional accountancy organizations that comprise IFAC’s membership, reveals that over 90% of jurisdictions examined use International Standards on Auditing (ISA), ternational Financial Reporting Standards (IFRS), and the International Code of Ethics for Professional Accountants while over 80% of jurisdictions examined have monitoring & enforcement mechanisms for quality assurance (QA) and investigation and discipline (I&D). The report (pages 17-19) also reveals that adoption levels are higher (37%) than any other region and higher for each category of standards (QA review system, IES, ISA, International Code of Ethics, I&D, IPSAS and IFRS).

Audit and Assurance The IAASB, which recently published its public report Foundation for the Future summarizing the Board’s achievements from 1 January 2016 to 30 June 2019, met on 16-20 September 2019. The agenda material is here. At this meeting the IAASB discussed their strategy and work plan for 2020-23 and approved ISA 315, Identifying and Assessing the Risks of Material Misstatement which will now go to the Public Interest Oversight Board (PIOB) for final approval before being issued. In EFAA’s recent response to the IAASB’s Discussion Paper (DP), Audits of Less Complex Entities: Exploring Possible Options to Address the Challenges in Applying the ISAs the response is also here on the IAASB website #38) EFAA urged the Board to develop a new stand-alone audit standard for SMEs / LCEs. See IAASB Board Meeting - September 20, 2019 Podcast and IAASB September 2019 Meeting Highlights. In the debate over joint audit ACCA and Mazars remain at odds. In addition this article looks at the future of audit in the UK and notes how SMPs are being squeezed by audit exemption thresholds, fee pressure and technical stringency of ISAs. And finally, a global alliance of accounting organisations including ACCA has found that firms that offer both audit and non-audit services are best positioned to deliver robust and reliable assurance. The report, Audit Quality in a Multidisciplinary Firm, draws its findings from leading academic literature, views of policy experts, and an in-depth study of how regulators worldwide manage risk.

Ethics The IESBA met on 16-19 September. The agenda material is here. At this meeting the IESBA agreed the terms of reference for its Tax Planning and Related Services Working Group the objectives being: gather an understanding of regulatory, practice and other developments in corporate and individual tax planning by professional accountants in business (PAIBs) and professional accountants in public practice (PAPPs); to identify and analyse the ethical implications of those developments and determine whether there is a need for enhancements to the Code or further actions; and develop a report and recommendations to the IESBA. IESBA deferred consideration of the issue of an ED on Non-Assurance Services until its December 2019 meeting. See IESBA Board Meeting - September 19, 2019 Podcast.

For more information: Please contact Paul Thompson

EFAA Participates in SMEunited ECOFIS Committee Meeting
Sara Zambelli participated at SMEunited’s ECOFIS Committee meeting. The economic policy agenda of President-elect Ursula von der Leyen’s European Commission was the key focus with discussions concentrated on the Green Deal and the upcoming challenges related to the new bank regulation. Moreover, the overall economic scene for European SMEs still shows that the downward trend continues, but less so than expected, as confirmed by the SMEunited Barometer results. The committee members agreed that SMEs had a better performance than expected last semester but that they still suffer from the uncertain overall climate, including trade agreements and Brexit.

For more information: Please contact Sara Zambelli

Guidance: Enhancing Firm Credit Control and Fee Collection
Effective credit control and collection practices are critical to successfully managing an SMP. This article urges SMPs to consider some fundamental rules and offers tips for resolving fee conflicts.
For more information: Please contact Paul Thompson

Guidance: Preparing for a No Deal Brexit
In early October the UK Borders Delivery Group in charge of no deal preparations was in Brussels to engage with national and European business federations to discuss the changes that would take place and to identify the key actions they need to take in critical areas in the event of no deal. On the UK website: https://www.gov.uk/brexit and more specifically: http://bit.ly/BrexitTradingwUK businesses and citizens can find much useful information that is constantly being updated. A presentation with all the key information is available on request from EFAA. This information is very useful for advising SME clients that trade with the UK or have operations there. Crucially, if the UK leaves the EU without a deal, there will be no system of mutual recognition of professional qualifications between the EU and the UK. The UK will, however, maintain GDPR.

For more information: Please contact Paul Thompson

Integrated Reporting for SMEs
The slides and recording from the webinar ‘SMEs and Integrated Reporting’ cohosted by IFAC, the IIRC and OIBR on 17 September 2019 can be accessed here. The webinar was focused on integrated reporting for SMEs, exploring the benefits for SMEs, guidance on implementation, and case study examples, Readers are reminded of two key resources, Integrated Reporting for SMEs: Implementation Guidance and the article Creating Value for SMEs through Integrated Thinking. EFAA recently was part of a consortium of universities across the EU whose ERASMUS+ Strategic Partnership proposal “INTEREST - INTEgrated REporting for SMEs Transparency” successfully secured a grant from the Hungarian ERASMUS+ Agency to develop education and training materials for integrated thinking and reporting for SMEs. EFAA has previously published the article Integrated Thinking and Reporting for SMEs: The Why and How.

For more information: Please contact Paul Thompson

EFAA Director Presents on Future of the Profession
At a conference on the future of the profession organized by ODCEC, the Reggio Emilia chapter of CNDCEC, Italy on 27 September Paul Thompson presented on EFAA’s initiatives to help future proof SMPs in Europe. Thompson went on to explain how the global accountancy profession needs to adapt the education and training of accountants to ensure the future relevance of the profession. Thompson spoke alongside Judith Redi, who was a keynote speaker at EFAA International Conference 2019, who showed how artificial intelligence was being used in accountancy.

For more information: Please contact Paul Thompson

Upcoming events
2019
20-22 October: 42nd German tax Adviser Conference – Berlin, Germany
24 October: EFAA-Accountancy Europe Joint Event - Brussels (Members Only)
24 October: EFAA 2019 Exraordinary General Meeting and Celebrations of its 25th Anniversary – Brussels (Members Only)
25 October: CAFR Congress of the Romanian Audit Profession – Bucharest
30 October – 1 November: UNCTAD-ISAR 36th Session – Geneva
7 November: 3rd WICI Europe International Policy Conference - Brussels
20-21 November: Forum of the Future - Brussels
28 November: EFRAG Conference - IFRS & Regulation: Searching for Common Ground - Brussels [NEW]

2020
27-29 May: 43rd EAA Annual Congress – Bucharest, Romania
25 June: EFAA 2020 International Conference – Berlin, Germany
26 June: EFAA 2020 Annual General Meeting – Berlin, Germany (Members Only)

Please note hyperlinked text to further information. If you have any events to add please email Sara Zambelli

EFAA digital recommended reading
Guidance – How SMEs and SMPs Can Address Cyber Security
At the EFAA 2019 International Conference, a speaker from ENISA outlined the emerging cyber security threats and the role of SMPs in helping SMEs combat them. Cyber-attacks are proving increasingly costly for SMEs. This article reports survey data that shows some 24% of UK SMEs surveyed had been victims of cyberattacks in 2018 and encourages SMEs to not only review their crisis preparedness, but also to assess their ability to survive. As part of the European Commission’s Horizon 2020, a cybersecurity firm has received a grant to bring its technology offering, a file-based attack protection that offers defense against cyberattacks, to an SME audience. The grant, as explained here, enables SMEs to access all functionalities through affordable subscriptions. Accounting firms are often the first line of defense for SMEs: in the US they make up 30% of leading cybersecurity consultants. SMPs can find out how their firm stacks up by assessing your practice area and deepening your knowledge. To help raise awareness the AICPA invites SMPs to take this quick quiz to test your knowledge.

AI and Audit
Tin this article a partner Moore Kingston Smith, a mid-sized practice, talks about the benefits of using technology and the future of the audit industry.

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      • Actualité internationale
      • EFAA