IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria. The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This is a presentation by Paul Thompson, Director, European Federation of Accountants and Auditors for SMEs.

1. 31st May 2017 Accountants Under Pressure 1/10
Accountants Under Pressure
Paul Thompson
EFAA Director
CFRR – IFAC Regional SMP Forum
Vienna, Austria
May 31

2. 9th February 2017 Accounting and Ethics 2/22
Who We Are
SMPs as Trusted Advisors of SMPs 2/20
★ EFAA is an organisation of 17 national accounting and auditing
associations
★ Representing more than 370.000 professionals
★ Supporting professionals working as SMPs and mainly servicing
SMEs
★ Twitter - @EFAAforSMEs Website – www.efaa.com

3. 9th February 2017 Accounting and Ethics 3/22
 Assists member organisations in their efforts to strengthen SMPs and
SMEs in professional public affairs
 Over twenty years experience and focuses primarily on engaging with
the European Institutions, European SMP / SME accounting and
auditing stakeholders and IFAC
What We Do
European
Stakeholders
SMPs as Trusted Advisors of SMPs 3/20

4. 31st May 2017 Accountants Under Pressure 4/10
About the Survey
★ Report: http://www.efaa.com/publications/studies/index.html
★ Pressure defined as contrary to professional ethics and / or to tax
and accounting legislation
★ 664 respondents from 23 countries with vast majority having over
10 years’ experience of being accountants, auditors, tax advisors,
consultants and academics
★ Employed across practice, business, government bodies and
education
★ 44% female - 56% male

5. 31st May 2017 Accountants Under Pressure 5/10
Pressure
How common is it? Who exerts it? Is this an issue only for the
accountancy profession? Is it entity / role specific?
★ 64% of respondents said that they had been put under
pressure with majority noting they had been under pressure
5 times or more
★ Pressure was exerted as follows: Client (highest), Owner,
Director, Line Manager, Colleague (lowest)
★ Role specific: auditors and tax advisors
★ Accountants – more pressure when dealing with limited
liability entities
★ In 72% of cases pressure was exerted by a person who was
NOT responsible for financial accounting matters

6. 31st May 2017 Accountants Under Pressure 6/10
Rewards / Threats
★ No obvious reward promised for “doing what was asked”
★ Evident obvious “threats” if action was not undertaken
★ What form did the threats take?
⭐ Loss of income (practice / practitioner)
⭐ Loss of employment of accounting professional
⭐ Termination of relationship

7. 31st May 2017 Accountants Under Pressure 7/10
What were People Asked to Do?
★ Postpone recognition of costs and expenses
★ Manipulate value of inventories
★ Categorise personal expenses as expenses of entity
★ Overstate expenses
★ Deliberately account for items in a manner that changed
way they were treated for tax

8. 31st May 2017 Accountants Under Pressure 8/10
How did Respondents React?
★ 68% DID NOT succumb to pressure
★ 32% DID succumb to pressure
★ More likely to succumb if an employee of organisation
★ Consequences of resisting pressure were mixed:
⭐ Employment or engagement terminated
⭐ Bullying
⭐ Stronger relationship
⭐ Weaker relationship
⭐ None

9. 31st May 2017 Accountants Under Pressure 9/10
Role of Consultation
★ 51% consulted
★ Impact of consultation is unclear but ability to consult
seems of value with 85% of respondents considering it
helpful in that it provided:
⭐ support to the conclusion
⭐ third party view
⭐ much needed challenge / sounding board
★ Those that did not consult cited:
⭐ no need
⭐ confidentiality

10. 31st May 2017 Accountants Under Pressure 10/10
Stakeholders / Recommendations
★ Professional accountancy organisations
★ Regulators / legislators / standard setters
★ Business community
★ Accounting and business ethics