Small accounting firms have competitive edge
Overregulation and the removal of the audit function for certain companies by new corporate legislation are serious threats to the continued existence of small audit and accounting firms.
Yet Chartered Accountants (SA) who anticipate this eventuality and take appropriate action will not only survive but thrive, says Nazeer Wadee, Chief Operating Officer of the South African Institute of Chartered Accountants (SAICA).
"The CAs (SA) involved in the audits of small firms may feel threatened; yet I can assure them they will never become extinct. Far from it; the intensive training, business discipline and extensive experience of South African CAs(SA) handsomely equip them to offer a wide range of invaluable business advisory services over and above the straight audit function. "The growing sophistication of people owning and running small businesses means that they are acutely aware of the need for the type of expert guidance that only a CA (SA) can offer."
Wadee maintains that all businesses need accurate financial and business information in order to grow and prosper and strongly suggests that chartered accountants are ideally suited to provide such information.
"I am not the first to characterise qualified CAs(SA) as the general practitioners of the financial world, since they offer the expert knowledge and integrity to provide all organisations, large and small, with high quality advice on all aspects of running a business."
Wadee says that SAICA aims to support its members in small and medium practices to address legislative issues and other business challenges. This is being done through countrywide consultative workshops with CAs (SA) in small accounting and auditing firms.
"SAICA is aware that government's objective is to simplify the regime of SME regulation and make it less costly," says Wadee, who points out that one of government's intentions is to vigorously promote entrepreneurship. "This creates opportunities for skilled business advisors to effectively advise and guide entrepreneurs and larger businesses alike over and above the conventional auditing service. So, in essence, CAs(SA) are more than just trusted auditors and are really trusted business advisors"
Wadee says that SAICA continuously reviews and updates its education and training model to ensure that CAs remain relevant to local and global business environments.
Wadee regards the essence of professionalism of CAs(SA) as an attitude – a commitment to high standards. He cites the distinguishing characteristics of the accounting profession:
Mastery of a particular intellectual skill, acquired by education and training;
Acceptance of duties to society as a whole, in addition to duties to the client and employer;
An essentially objective outlook;
Rendering personal services to a high standard of conduct and performance; and
"It is the adherence to these professional characteristics and the fundamental principles contained in the profession's Code of Conduct that enhances the status of the Chartered Accountant. In my experience, every canny small business proprietor is well aware of the quality and ethic of a CA (SA)."
Beyond that, Wadee stresses that a CA (SA) is capable to take a small business to a different level.
"With high interest rates and a global recessionary watch, this is more critical now than ever. Entrepreneurs struggling to keep their head above water would be well advised to regard CAs(SA) as advisors of choice, not only in the micro sense of helping them to run a tight financial ship but also in the macro sense of advising on the general economic outlook.
"The current economic environment also renders it particularly difficult to raise business finance. Justifying a loan or any other form of funding is a great deal easier if the accompanying business plan has been prepared by a CA(SA)."
In this context, he emphasises that small accounting firms specialise in advising SMEs and entrepreneurs; business entities that need to be effectively structured in light of significant changes to company and tax legislation over the last few years.
"Ultimately, the successful small business relies on advice from experts who intimately understand their operations; experts able to do audits, offer accounting expertise, assist with the budget process and help manage fixed and variable costs. It is here that the CA(SA) can partner with a business to ensure its long-term sustainability."
Source: The South African Institute of Chartered Accountants