The International Federation of Accountants® (IFAC®) has once again released the results of its global annual survey of accountants from small- and medium-sized practices (SMPs), only this time around, there were even more respondents. Over 6,700 from some 169 countries responded, 32% more than last year, making this perhaps the largest such survey of accountants working in practice. The number of respondents to the survey is a clear signal that SMPs are acutely aware of the significant role they play in business and society; and the results signal that the profession needs to be alert to the many opportunities and threats they face right now and in the future.
Relentless, and ever faster, changes in technology, globalization, competition, and regulation are together making business more and more complex. This significantly impacts the nature of clients’ needs and what they expect of their accountants and how accountants deliver services, as well as the environment in which professional engagements—from assurance through advisory and everything in between—are conducted. While SMPs are pervasively affected by these changes, not all SMPs are affected equally. Differences in size have a major bearing on how SMPs can address challenges and take advantage of new opportunities.
Because SMPs are very diverse in size—from sole practitioners to medium-sized practices with many offices—how they respond to the changing demands of their clients, in terms of what services they provide and how their practice is organized, will vary widely, as well.
Compared with their larger counterparts, SMPs are distinct in certain ways. They are usually intimately involved in their clients’ matters, generally owner-managed small- and medium-sized entities (SMEs), who engage SMPs as the main source of technical and managerial advice. SMPs are also typically characterized by team stability, flexibility, tailored solutions, and specialized knowledge.
There are many challenges facing SMPs. Below I analyze how practice size affects the perception of, and response to, these many challenges.
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