The Role of EFAA and of SMPs In Early Warning for SMEs

This article, co-written by Salvador Marín, EFAA President, Morten Møller, Coordinator of the Early Warning Europe Network and Paul Thompson, EFAA Director, set some guidelines on the role small- and-medium-sized accountancy practices can play while advising their SME clients.

What you will learn

EFAA’s article explains the role SMPs can play and sets out some early warning signs which SMEs and their SMP advisors should be looking out for.
Business owners, with help from specialists like an SMP, should monitor their businesses closely and, if they start to present any of the warning signs, take corrective action immediately. The article lists some of the signs including inadequate cash reserves, poor cash-flow management and the inability to access finance.

>>> The full article is available here.

About EFAA

Focusing on SMEs through SMPs

The European Federation of Accountants and Auditors for small and medium-sized enterprises (EFAA for SMEs) is an umbrella organisation for national accountants and auditors' organisations whose individual members provide professional services primarily to SMEs within the European Union and Europe as a whole. It was founded in 1994.EFAA for SMEs has 13 members throughout Europe representing over 350,000 accountants, auditors and tax advisors.EFAA for SMEs is a member of the association of crafts and SMEs (SMEunited) and a founding member of the European Financial Reporting Advisory Group (EFRAG).

Small and medium-sized accounting practices (SMPs) are European SMEs' most important business advisors. They help entrepreneurs gain access to finance, and they provide valued business advice allowing them grow their businesses sustainably.

SMEs have a number of specificities. An important characteristic is that most of their business relations are based on very close personalised cooperation and mutual trust. Hence, their accountants and auditors need to provide targeted services to accommodate the individual needs of SMEs and of the users of their financial statements.

Most of the accounting and auditing rules and standards are set up at EU or international level, and are often inspired by large companies and oriented towards their needs. This is why EFAA for SMEs, the big voice for small business, strives to redress this imbalance and better represent SMEs' and SMPs' interests by providing the regulators with an in-depth knowledge and perspective of small businesses.

Source :EFAA, 26 February 2021, The Role of EFAA and of SMPs In Early Warning for SMEs