Latest from The European Federation of Accountants and Auditors for SMEs (EFAA)
2020-04-13 - 10:44
Source: EFAA
Foreword from the President - Salvador Marín
Dear Members and Friends of EFAA,
As we all know too well, the whole world is currently in the middle of a global pandemic that has fundamentally changed the way we live and work, possibly forever and perhaps we will experience the most severe economic repercussions since World War II. We live in unprecedented times. Our personal and professional lives have been interrupted and continue being interrupted even as I am writing this text. In turbulent times like these, companies and society seek an anchor and a safe harbour.
The accounting profession and in general our SMPs has and can continue to provide that much-needed anchor and a safe harbour in the form of a calm, safety, being a competent partner for those SMEs and self-employed workers, most in need. In this sense, through this crisis, we, EFAA, its member organizations and their members, are serving the public interest before ours. This is our professional obligation and I believe that we are fulfilling it well, in fact while SMPs are impacted by the coronavirus they are an invaluable source of guidance and expertise on financial, business, tax, accountancy and economic management for SMEs. Many if not most SMEs are under financial and general economic stress right now and likely to be for some time, so advice on this management is crucial. We are a calming force for our clients around the EU, thanks so much for it. We are proud because in these difficult times our SMPs, that know very well at their customers, mainly SMEs, are working without rest.
In this way and to help you to achieve the goals, I invite you to check this LFB8. In this issue, as in the rest of LFBs published since 12 March, you can find specific information, resources, advises for SMPs and ways of how they may help their clients, mainly SMEs, because, as I have emphasized, these are heavily impacted by the economic consequences of the restrictions introduced by COVID-19.
On the other hand, I would like to emphasize that in this moment, EFAA is and will continue supporting all our member organizations, developing our role as big voice for SMPs in Europe in our field of activity, providing information, best practices and advocating at the EU level for more and better measures to help the EU economies and to help specifically our SMPs/SMEs.
As usual, we remind at your total disposal
Yours sincerely,
Salvador Marin
EFAA President
SMEunited Welcomes Scheme to Help SMEs
SMEunited says the SURE instrument proposed by the European Commission is a welcome act of solidarity with those Member States most impacted by the COVID-19 crisis. In particular SMEunited is pleased with the focus of the instrument being on keeping workers and self-employed in business, the latter according to Bruegel the hardest hit and least supported, explaining: “…..supporting short-term working schemes and income compensation for self-employed and micro businesses can contribute to stabilise the economic situation throughout the crisis and immediately after for the restart.” The European Commission has also unlocked €1 billion to serve as a guarantee to the European Investment Fund (EIF), allowing the EIF to issue special guarantees to incentivise banks and other lenders to provide liquidity to at least 100,000 European SMEs and small mid-cap companies for an estimated available financing of €8 billion.
SMPs are an invaluable source of guidance and expertise for SMEs and the self-employed. Most SMEs are under enormous financial stress right now, and likely will be for some time. Most accountants are responding, offering advice, sometimes free, to SMEs to help them survive this crisis. This advice includes general guidance on sound financial management, especially liquidity and cash flow, and specific advice on how to take advantage of EU and government initiatives such as those mentioned above. In due course as economies and societies exit the crisis SMPs will be expected to help SMEs get back to normal, in some cases restart their operations, and perhaps operate differently with greater use of digital technologies for remote working and online provision of goods and services.
Commission Extends Deadline for NFRD Consultation and Launches Consultation on Sustainable Finance
The European Commission has extended the deadline of the online public consultation on the review of the Non-Financial Reporting Directive until 11 June. EFAA was one of the 78 respondents and to the roadmap in late February 2020 (see response here). Meanwhile, on 8 April 2020 the Commission opened its extended consultation (to 15 July 2020) on the renewed sustainable finance strategy. The strategy will provide a roadmap with new actions to increase private investment in sustainable projects and activities to support the different actions set out in the European Green Deal and to manage and integrate climate and environmental risks into the EU’s financial system. The initiative will also provide additional enabling frameworks for the European Green Deal Investment Plan.
Supporting their SMP Members
Member Focus: How NBA is Supporting Members
EFAA member organization NBA has a COVID-19 resource center here providing up to date information and other resources for members including FAQs. NBA have also started a new project called NBA Helps to provide members with answers to COVID-19 related questions. NBA is closely monitoring policy developments regarding the Dutch financial action plan in the wake of the COVID-19 outbreak. NBA’s technical experts have been trying to cover most of the general questions related to those financial measures by publishing them on the NBA website. For SMP members, who are working very hard to support SMEs that have been seriously affected by the crisis, NBA have established a separate webpage with FAQs. For more detailed advice NBA members can contact a helpdesk by phone or email. Furthermore, NBA has a dedicated podcast to discuss technical issues related to the coronavirus-outbreak. Finally, NBA is pleased to find its members helping each other through the NBA LinkedIn group.
EFAA Member Organisations
Here is how EFAA member organizations are responding to the crisis:
- CGE-ECONOMISTAS Coronavirus Information
- DStV - Corona: Informationen für Steuerberater und ihre Mandanten
- ITAA Mesures suite au coronavirus | Institute for Tax Advisors and Accountants
- NBA The Royal Netherlands Institute of Chartered Accountants
- OCC - Notícias - COVID 19 - Legislação e informações úteis
- SCAAK – PAO response to COVID-19: The case of SCAAK.
AICPA Response
The AICPA is the world’s largest PAO and has over 40,000 ‘practice units’, the vast majority SMPs. In this article AICPA CEO Barry Melancon explains how the AICPA is supporting the accounting and finance community, including SMPs, amid COVID-19.
IFAC Members Share Experiences and Lessons
In late March 2020 IFAC convened a Zoom videoconference of some 25 representatives from 13 different jurisdictions and the Interamerican Accounting Association to discuss their strategies and plans for the crisis. In this article IFAC shares the challenges, ideas, and solutions discussed and hopes these will help other PAOs determine how best to support their members at this difficult time. And in this article IFAC sets out steps for PAOs to consider in preparing to work virtually should it become necessary.
Guidance for SMPs Coping with the Crisis
General
- This webpage, COVID-19 Resources from IFAC’s Network, has essential resources, guidance and advice from IFAC member organizations and other stakeholders to help support professional accountants including SMPs.
- This resource centre, AICPA Coronavirus Resource Centre, has virtual learning (some free for non-members), learning resources and more, much of it relevant to SMPs. This podcast talks through these resources.
Practice Management
- This article advises on steps to take to preparing SME clients and protect the practice.
- This webcast (archived) conducted on 1 April 2020 shows how finance professionals can manage the uncertainty of COVID19, discusses the critical issues facing leaders and shares practical suggestions to navigate the crisis.
- This article explains 5 software services to help keep your practice running through the COVID-19 pandemic.
- This IFAC article sets out a few tips to help make the virtual connection manageable. Other guidance on remote working includes: this podcast explains how to quickly become comfortable in an home office; this video provides guidance on managing remote workers; this article provides 4 tips on remote working; this article shares four strategies for managing remote workers, including onboarding and engagement; this article looks at how individuals can help their team work remotely; and this article suggests how to preventing strangers ‘gatecrashing’ meetings.
- This article stresses the need for SMPs to have a crisis management plan.
- This article considers what condition practices will be in when they emerge from the coronavirus crisis.
- In this article managers and leaders of SMPs can use seven principles to lead their team through this crisis.
Advisory
- ACCA’s Global SME Forum shares recommendations on how they have been responding to Covid-19 in terms of running their own businesses and working with SMEs. ACCA says that “SMPs are at the forefront of supporting SMEs, best placed to help SMEs rapidly transform and adapt to the changing circumstances e.g., helping clients apply for financial support being made available by many governments.”
- This article highlights 4 moves SMPs providing consulting services should make including on marketing and leadership planning.
- This article looks at how SMPs can minimize the damage from the predicted 19% contraction worldwide in the consultancy industry's revenue in 2020.
- Tools and guidance that SMPs can use to advise their SME clients include: this online financial management toolkit that helps SMEs better manage their finances; this article that summarizes the key factors for SMEs to survive in a time of crisis; and this checklist that sets out best practices for SMEs including financial management.
- In this article US SMPs explain how they are meeting the advisory needs of their clients.
- This article outlines outlines ways to promote the fiscal health of your team and business while responding to effects and implications of the coronavirus.
- This article explains how accountants are helping SMEs problem solve during the crisis, from managing cash flow through to accessing government financial support.
Auditing
- This statement emphasises the important areas in view of Covid-19 impact on audits of financial statements.
- The IAASB COVID-19 webpage contains useful guidance, messages and links, including to relevant national auditing standard setters (NSS) pronouncements. The IAASB has also posted the first staff alert on COVID-19 related considerations here.
- General guidance for auditors is provided here, specific guidance on audit issues is available here and joint guidance for companies (preparers) and auditors accessible here.
- This article summarizes the various challenges auditors face as they work through the coronavirus pandemic and signposts guidance on handling those challenges.
- This free webcast, led by IAASB Board Member Bob Dohrer, looks at conducting remote audits and discusses remote auditing considerations, including which areas need extra attention.
- In this article Dohrer sets out going concern tips for auditors during the pandemic.
- This article describes a few ways auditors can obtain sufficient appropriate evidence of inventory / stock even when they are unable to make a physical site visit.
Accounting
- The IASB has published education materials to support the consistent and robust application of IFRS 9 during the current uncertain period.
- In this podcast learn how preparers are addressing subsequent events, going concern considerations and inventory observation are creating challenges for CPAs during the coronavirus pandemic.
- Guidance for companies and auditors is available here.
Developments in International Standard Setting
Ethics
The IESBA has extended by one month to June 4, 2020 the comment period on the Exposure Drafts (EDs) Proposed Revisions to the Non-Assurance Services Provisions of the Code and Proposed Revisions to the Fee-related Provisions of the Code so as to give stakeholders experiencing disruption due to the pandemic additional time to comment. For additional information about the Eds please see these archived webinars that highlight key aspects of the proposals.
Assurance and Quality Management
On 3 April 2020 the IAASB released International Standard on Related Services (ISRS) 4400 (Revised), its revised standard for performing agreed-upon procedures (AUP) engagements. In an AUP engagement, the practitioner performs the procedures that have been agreed upon by the practitioner and the engaging party, and the practitioner communicates those procedures and the related findings in the AUP report. A wide range of stakeholders use AUP reports for a variety of reasons; for example, regulators, funding bodies, creditors and others ask for AUP reports to support or complement information, such as audited financial statements or loan or grant applications. In its response to the Exposure Draft and in this article EFAA highlighted the potential for growth in demand for AUP. Some of the significant enhancements to ISRS 4400 (Revised) include: broadening the scope of the standard to meet demand for AUP engagements; introducing requirements and application material to clarify whether or not the practitioner is required to comply with independence requirements; and clarifying how professional judgment is exercised in an AUP engagement. ISRS 4400 (Revised) will be effective for AUP engagements for which the terms of engagement are agreed on or after 1 January 2022. The IAASB also released an ISRS 4400 (Revised) Fact Sheet to provide implementation support to help practitioners apply the revised standard.
The IAASB COVID-19 webpage contains useful guidance, messages and links, including to relevant national auditing standard setters (NSS) pronouncements. The IAASB has also posted the first staff alert on COVID-19 related considerations here. The IAASB now has a LinkedIn page here as well as a Twitter presence here. The IAASB Chair also has a Twitter account here.
EFRAG Update
On 27 March 2020 EFRAG sent this letter to the IASB requesting the Board to consider extending some of the consultation periods on recent or soon to be issued publications, providing constituents with additional time to work through the consultation documents and obtain the required feedback as explained here. Later the same day the IASB published a message on the coronavirus and the Foundation’s work announcing: that the time line for IFRS 17 and IBOR phase 2 will be kept as both are time-sensitive projects; the publication of narrow-scope amendments will be postponed to May; and the IASB Board will discuss further specific messages during its April 2020 meeting. The IASB also published education materials to support the consistent and robust application of IFRS 9 during the current uncertain period. Finally, EFRAG issued this article on the networking stakeholder event on 18 February 2020.
