The burden of standards and regulations is the most significant issue facing small and medium-size accounting practices (SMPs) worldwide, an International Federation of Accountants (IFAC) survey suggests.
Forty-one percent of the 2,441 SMP respondents in the IFAC SMP Quick Poll for the fourth quarter of 2011 said keeping up with new regulations and standards was the most important issue their practice faced. That outpaced the second-biggest issue: attracting and retaining clients. Twenty-five percent of respondents said that was their top priority.
The majority of respondents in the poll came from Europe (62%); 16% were from Africa or the Middle East; 10% were from North America; 9% were from Central or South America or the Caribbean; and 3% were from Asia. Released earlier this week, the poll was conducted in seven languages, and 77% of respondents were either sole practitioners or members of staffs with five or fewer professionals.
Among North American respondents, 48% listed keeping up with new regulations and standards as their practice’s most important issue.
Forty-five percent of sole practitioners said keeping up with new regulations and standards was their most important issue, while just 26% of those at firms with professional staffs of 21 or more were most concerned with new regulations and standards.
In each of the three previous quarterly polls in the survey, which was started in the first quarter of 2011, keeping up with new regulations and standards was rated as SMPs’ most important issue.
Poll results also show that the burden of regulation ranked first among the biggest challenges faced by practitioners’ small and medium-size entity (SME) clients, named by 29% of respondents. Economic uncertainty ranked second, named by 28% as the biggest challenge clients faced.
The poll indicated that there wasn’t much change overall in business in 2011 compared with 2010. Forty-eight percent indicated business in 2011 was about the same as in 2010. Twenty-nine percent said business in 2011 was better than in the previous year; 23% said business was worse in 2011.
Looking ahead, accountants expect more of the same in 2012. Forty-four percent of respondents predicted that business would be about the same in 2012 as in 2011; 31% expected business to improve in 2012; and 25% predicted a decline in business this year.
—Ken Tysiac ( firstname.lastname@example.org ) is a JofA senior editor.
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