Audit and SMPs: There is a Way!
By Prof Dr Michel De Wolf, DGST Réviseurs d’entreprises
As you may know, IOSCO and its worldwide “monitoring group” overseeing the world audit and ethical standard setting process, are focusing on audit standards for public-interest entities, with no interest for “SMEs”. This is, of course, of special concern for all non-Big-Four audit practices. Meanwhile, IAASB is launching a project around the question of the scalability of ISAs, which could lead to an “ISA for SME”.
And there are many other challenges having a special relevance for SMPs, like the consequences of digitalisation, artificial intelligence and big data: these are more challenging for SMPs than for Big Fours, because of the huge needs in investment and training.
In this short article, I would like to recommend that non-Big-Four audit practices unite at national level.
Please think about the benefits of uniting SMPs at national level.
In Belgium, we have established an umbrella for SMPs within the audit industry called “Centre belge de concertation des réviseurs d’entreprises” (CBCR) in French and “Belgisch overlegcentrum der bedrijfsrevisoren” (BOBR) in Dutch. More or less one third of all Belgian registered auditors are members.
The membership fee is small (no more than EUR 176 per year, depending on the number of auditors within the practice). The organisation has a political role, but also supports its members in terms of staff training, standard audit programmes and other services.
At the political level, we have concluded a political agreement with the Big Fours and the mid-tiers not represented by us (Mazars and BDO mainly), in order to jointly lead the offcial Institute of Registered Accountants (IRE/IBR). For instance, there is a share of the 14 seats within the Council of the IBR / IRE: seven for us, seven for the Big Fours, one for Mazars and one for BDO. And we keep a rotation at the level of the chairmanship of the offcial Institute: three years of chairmanship by a Big Four, and then three years of chairmanship by a non-Big Four.
This good balance ensures that the SMP voice is duly heard within the offcial Institute and, at the same time, that this Institute may advocate externally for the whole profession and with the support of the entire profession.
Maybe this experience can be useful to other members of the GGI alliance. The author is happy to share additional details, if required. Please contact Prof Dr Michel De Wolf directly using the contact details.
Prof Dr Michel De WolfDGST Réviseurs d’entreprises, Brussels, Namur, Verviers, Belgium
T: +32 2 660 63 43
DGST Réviseurs d’entreprises promises its clients to deliver accurate, independent and effective advice. The core business of their audit services is statutory audits and assurance engagements. For DGST, auditing is not just about checking figures, but involves risk anticipation and enhanced risk awareness.
Prof Dr Michel De Wolf is an auditor, lawyer and honorary chairman of the Belgian Institute of Auditors. He specialises in high-level tax advice, financial analysis, IAS / IFRS, company law and consolidation. He has proven experience as an auditor and advisor, particularly in various non-profit organizations and public-sector entities. Prof Dr De Wolf is current chairman of CBCR/BOBR, the umbrella organisation for audit SMPs in Belgium. He is also a member of the accounting standard setter in Belgium, and a part-time judge. He is honorary dean of the Louvain School of Management.
Publsihed: Auditing, Reporting & Compliance Newsletter, No. 01, Spring 2019 l Photo: adisa - stock.adobe.com