At its meeting last week in New York City, the Board of the International Federation of Accountants (IFAC) agreed to assist the International Accounting Standards Board (IASB) in obtaining feedback on its proposed International Financial Reporting Standard (IFRS) for Small and Medium-sized Entities (SMEs)through field testing and other means. In addition, it agreed to strengthen collaboration with regional accountancy organizations to encourage greater alignment with the IFAC strategy. The Board also discussed the need to more effectively engage various stakeholders in the convergence process, work more closely with the investment community, proactively address small and medium practice (SMP) and SME issues, and communicate more consistent global messages about the value and integrity of the profession. An approach for translating key sections of the IFAC website was also approved. During the meeting, Professor Stavros Thomadakis, Chairman of the Public Interest Oversight Board (PIOB), commented on the PIOB's progress in overseeing IFAC's public interest activities and expressed its satisfaction to date with the cooperation it is receiving from IFAC and its independent boards. A major portion of the meeting was devoted to strategic planning issues. As part of that process, regulatory, standard setting and business leaders provided insights and views to help shape the Board's priorities and future agenda. Guest speakers were:

• Mark Olson, Chairman of the U.S. Public Company Accounting Oversight Board (PCAOB), who highlighted the importance of standards setters, such as the PCAOB and the International Auditing and Assurance Standards Board, continuing to closely monitor each other's work and agendas;
• Professor Robert Kaplan of the Harvard Business School and co-author of the Balanced Scorecard, who spoke on the implications of the balanced scorecard for enhanced business reporting; and
• Paul Pacter, IASB Director of Standards for Small and Medium-sized Entities, who outlined the proposed IFRS for SMEs.

Among other matters, Mr. Pacter urged all Board members and regional accountancy organizations to encourage responses from their respective constituencies on the proposed standard and perceived challenges to its adoption. IFAC President Fermín del Valle stated, "IFAC is highly supportive of this project and recognizes the considerable progress made. To ensure that the final standard meets the needs of the SMP/SME marketplace, it is crucial that IFAC and its members help the IASB seek out and capture the views of all relevant constituents, primarily SMEs, SMPs, and users of SME financial statements." The Board meeting followed a meeting with more than 30 chief executives of national accounting organizations in over 25 countries, which was designed to bring those organizations' perspectives to the deliberations of IFAC's planning. IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. Through its independent standard-setting boards, IFAC sets ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

Good morning ladies and gentlemen, distinguished guests. Before starting my presentation I would like to express my sincere thanks to the Institute of Chartered Accountants of India and its President for inviting me to speak at this conference. It is a real pleasure to be here in India. India certainly lives up to the promise of the Incredible India! Tourist adverts! Delegates, the object of my presentation is to explain how the International Federation of Accountants, and in particular its Small and Medium Practices (SMP) Committee, seeks, in collaboration with IFAC member bodies, to help SMPs in Chennai, Tamil Nadu, India, and elsewhere. Before describing our activities let me open with a few introductory words on the SMP Committee.

The International Federation of Accountants (IFAC) has released a new information paper that explores the needs of users and preparers of the financial reports of micro-entities. Entitled Micro-Entity Financial Reporting: Perspectives of Preparers and Users, the paper comprises a review of the existing research on the topic, a survey of the legal status of micro-entities in different countries, and the various definitions that exist in different jurisdictions.The International Federation of Accountants (IFAC) has released a new information paper that explores the needs of users and preparers of the financial reports of micro-entities. Entitled Micro-Entity Financial Reporting: Perspectives of Preparers and Users, the paper comprises a review of the existing research on the topic, a survey of the legal status of micro-entities in different countries, and the various definitions that exist in different jurisdictions.

The research was prompted by a concern that the International Accounting Standards Board's (IASB) proposed accounting standard for SMEs, International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs)*, may not be suited to micro-entities, which for the purpose of this study are defined as those with less than ten employees. The IASB's proposed IFRS for SMEs is expected to be released as an exposure draft in late December 2006 or January 2007.

Key challenges and findings with respect to micro-entities include the following:

• The cost/burden implications of new regulation on the smallest entities;
• The issue of enforcing such regulations;
• The increasing demands of users of micro-entity reports; and
• Issues of literacy and training in some developing countries.

The research contained in the paper was undertaken by Dr. Suki Sian of the Cardiff Business School, Wales and Professor Clare Roberts of the University of Aberdeen, Scotland. In their findings, the researchers state, "Very little research has been previously conducted looking specifically at micro-entities as these tend to be subsumed in the term SME. Furthermore much of the published literature is restricted to studies conducted in developed countries and does not reflect the very different environment in which micro-entities operate in developing, emerging or transition economies." They conclude that "This gap in the literature indicates that this is an area that is ripe for further in-depth examination and research."

IFAC is considering undertaking further research in this area, in particular, to investigate whether the proposed IFRS for SMEs is likely to meet the needs of users of financial reports of micro-entities. IFAC is also encouraging its member bodies and regional accountancy organizations to respond to the IASB's exposure draft on IFRS for SMEs.

Micro-Entity Financial Reporting: Perspectives of Preparers and Users may be downloaded free-of-charge from the IFAC website.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets standards on auditing and assurance, ethics, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

* Note to Editors: For more information on the IASB's International Financial Reporting Standard for Small and Medium-Sized Entities, see the IFRS Foundation website.

This information paper presents the findings of research into the preparers, users, and user information needs of micro-entity financial reports. The Small and Medium Practices Committee hopes the paper will inform the debate on whether the proposed International Financial Reporting Standard for Small and Medium-Sized Entities will suit micro-entities.

Distinguished guests, ladies and gentlemen, friends and colleagues, good afternoon. Before I begin I would just like to say what a pleasure it is for me to be asked by FEE and AMA (Mediterranean Association of Auditors) to present the activities and views of the IFAC Small and Medium Practices (SMP) Committee today. For the benefit of those not familiar with the SMP Committee a few words of introduction.

The SMP Committee started life as a Working Group of the IFAC Board in 2000. Under the chairmanship of my countryman Angelo Casas it quickly progressed to being a task force, then a permanent task force, and, in January of this year, a full standing committee of IFAC. On its promotion to being a committee, Sylvie Voghel took over the reins. Our vital statistics read as follows: 18 members from 17 countries, 6 from the EU; a full time technical manager; an annual forum; and an ambitious and expanding work program centered on inputting to standard-setting - accounting, education, ethics, but most especially audit - and providing practical support to SMPs.

Earlier this month, over 130 people from 35 countries attended the International Federation of Accountants' (IFAC's) first global forum focused entirely on small- and medium-sized entities (SMEs) and small and medium accounting practices (SMPs). Co-hosted by the Hong Kong Institute of Certified Public Accountants and the Confederation of Asian and Pacific Accountants, the forum provided an opportunity for national and regional accountancy organizations, representatives of SMEs and SMPs, and international standard setters, among others, to discuss the challenges and opportunities facing SMEs and SMPs and programs and initiatives that could best support them.

Participants identified two significant challenges facing SMEs and SMPs: SMEs need financial reporting standards that are appropriate for their users' needs and reduce the associated cost of compliance; and, in an increasingly globalized economy, SMPs should continue to explore new ways to support the growth and accountability of SMEs.

"Small- and medium-sized enterprises drive economic growth, foster innovation and provide employment in developed and developing countries around the world. IFAC fully recognizes this role and is committed to supporting them at an international level," emphasizes IFAC President Graham Ward. "The outcomes of the forum will be considered at the IFAC Board meeting in September so that we can proceed with acting on the recommendations that were presented."

IFAC SMP Committee Chair Sylvie Voghel, who also chaired the forum, outlined IFAC's approach to supporting SMPs. "The SMP Committee is taking a two-pronged approach to helping SMEs and SMPs converge and comply with international auditing and accounting standards. On the one hand, we are helping to shape the form and content of those standards and on the other, we are dedicated to providing practical assistance to SMPs and SMEs that have to use them."

Current projects include publishing an International Standards on Auditing Guide for SMEs and developing a web-based knowledge resource for SMPs. Additionally, IFAC regularly responds to exposure drafts of international standard setters where an SMP or SME focus is needed. For more information about IFAC initiatives to support SMPs and SMEs, visit its website at www.ifac.org. All presentations made at the SMP Forum are also available from the IFAC website through the SMP Committee home page.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high-quality performance by professional accountants in business.

I am delighted to be here and to have the privilege to speak to you today and I am heartened by the warm welcome that Ann, my wife, and I have received. There is no question that the accountancy profession has a unique, critical and practical role to play in building stronger and more stable economies around the globe. In order to carry out this role fully, however, we need to continue to enhance confidence in our profession and to build public trust. Investor confidence and public trust empowers our profession. Without it, the credibility of the information we produce, indeed the future of our profession itself, is put at risk. Wherever we work we cannot afford to take this risk.

I am delighted to be here and to have the privilege to speak to you today and I am heartened by the warm welcome that Ann, my wife, and I have received. There is no question that the accountancy profession has a unique, critical and practical role to play in building stronger and more stable economies around the globe. In order to carry out this role fully, however, we need to continue to enhance confidence in our profession and to build public trust. Investor confidence and public trust empowers our profession. Without it, the credibility of the information we produce, indeed the future of our profession itself, is put at risk. Wherever we work we cannot afford to take this risk.

I am delighted to be here and to have the privilege to speak to you today and I am heartened by the warm welcome that Ann, my wife, and I have received. There is no question that the accountancy profession has a unique, critical and practical role to play in building stronger and more stable economies around the globe. In order to carry out this role fully, however, we need to continue to enhance confidence in our profession and to build public trust. Investor confidence and public trust empowers our profession. Without it, the credibility of the information we produce, indeed the future of our profession itself, is put at risk. Wherever we work we cannot afford to take this risk.

Good morning ladies and gentlemen. I am delighted to be with you here in Hong Kong today to discuss the International Federation of Accountants’ commitment to small- and medium-sized accounting practices (SMPs) and to small and medium entities (SMEs). It is a commitment which our entire organization, including the officers, board, other committees and staff, take very seriously indeed and one which we believe will lead to meaningful, practical and unprecedented international support.