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ACCOUNTANCY EUROPE Business has now announced to carry out a study into the consequences of easing the audit obligation. Risks of audit exemption for SMEs Exempting SMEs from audit increases a number of risks to the economy. The Swedish report has highlighted in particular the risk of accounting errors, tax evasion and economic crime. Accounting errors As demonstrated by the Swedish example, without audit, SMEs tend to have more errors in their accounting. This undermines the reliability of their financial statements and reduces users’ trust in them. Negative impact on Tax collection The Swedish assessment indicates that exempting SMEs from the audit obligation may increase tax evasion and impair the ability of authorities to detect such crime. Without being audited, companies run a smaller risk that tax evasion will be discovered. It is easier for companies to deliberately report lower economic activity and so reduce the profit to lower their tax. Fraud, corruption, money laundering and terrorist financing Audit serves as a deterrent to fraudulent and criminal behavior. For instance, it helps deter crime such as fraud, corruption and money laundering in companies. Given today’s heightened risk of terrorism in Europe, the deterrence effect of audit is critical in particular for SMEs as it reduces the risk that they are used for terrorist financing. Business insolvency SMEs have a corporate responsibility to third parties such as their suppliers, creditors, investors, employees and the state itself. If a company is not audited, these stakeholders’ confidence in the financial statements and accuracy of business performance diminishes. Subsequently, the lack of confidence makes it more difficult for SMEs to operate and flourish. Limitations on access to funding Access to credit/loans and financing enables SMEs to grow, which is in every country’s interest. According to a European Central Bank’s survey 4 , in recent years, SMEs’ demand for external financing has been increasing in Europe. However, the availability of this financing still poses a challenge to SMEs. This challenge might become even greater if a company has not had an audit which provides more credibility to its financial statements. Conclusion There are diverging national policies and views on SME audit. Given this backdrop, it is interesting to see countries like Sweden and Denmark taking an empirical facts-based approach to evaluate the effectiveness of reforms abolishing the SME audit requirement. Policy-makers will further discuss the policy implications of the assessment findings. The Swedish example is a good practice of sound policy-making. It is important to be pragmatic in policymaking and to be able to adapt or even revert a policy if it proves unsuccessful or worse, counterproductive. In the context of SME audit, we encourage all policymakers to take informed decisions based on facts and evidence and to consider the benefits of SME audit, both for SMEs themselves and for other stakeholders. Accountancy Europe has formed a group of experts to enhance the debate at European level on how best to respond to the challenges of SME audit. We will also keep analysing national developments in the area of SME audit policy. About Accountancy Europe Accountancy Europe unites 51 professional organisations from 37 countries that represent 1 million professional accountants, auditors and advisors. They make numbers work for people. Accountancy Europe translates their daily experience to inform the public policy debate in Europe and beyond. Accountancy Europe is in the EU Transparency Register (No 4713568401-18). Many SMEs enjoy the privilege and protection of a ‘limited liability’. This poses a risk for creditors in case a limited liability company cannot pay its debts. Audit may reduce this risk and provide more security to creditors and other users of the financial statements. Without audit, this counterbalance disappears. 4 Survey on the Access to Finance of Enterprises in the euro area; available at https://www.ecb.europa.eu/pub/pdf/other/ecb.accesstofinancesmallmediumsizedenterprises201705.en.pdf?17da4ff2a730b7ababea4037e4ce8cae 32 Spring 2018
PREPARED TO GO FURTHER? We are looking for a CORPORATE SERVICES TEAM LEADER TIME TO REACH YOUR POTENTIAL Alter Domus is strengthening its Senior Management team. Do you have what it takes? We are looking for a talented, experienced, appropriately skilled and qualified professional to lead a team of employees working on a portfolio of high profile local clients. Amongst others, your responsibilities will include: • Acting as a strong team leader by showing sound judgement and organisational skills to lead a team of 6-10 employees who need guidance and coaching to grow and evolve • Guarantee all operational aspects and accuracy in the administrative, fiscal and legal maintenance of the client accounts together with quality control • Manage relationships with other key players in the industry including auditors, law firms, custodians and prime brokers • Drive a number of internal strategic projects for our office in Malta Visit www.alterdomus.jobs to apply online and to know more about these vacancies or send your CV together with a cover letter to the HR Senior Manager Amanda Cini on Amanda.Cini@alterDomus.com YOUR CAREER, OUR PROMISE.
Page 1 and 2: SMALL AND MEDIUM ENTERPRISES The im
Page 3 and 4: CONTENTS spring 2018 | theaccountan
Page 5 and 6: MIA NEWS MIA NEWS Women’s day Con
Page 7 and 8: 25th May 2018 MIA NEWS 08:15 - 17:0
Page 9 and 10: LOOKING TO GROW? Career Opportuniti
Page 11 and 12: ECONOMY Growth in the number of sma
Page 13 and 14: COVER STORY www.mazarscareers.com/m
Page 15 and 16: DIRECTORS DIRECTORS AND SMALL COMPA
Page 18 and 19: GDPR Getting ready for GDPR MATINA
Page 20 and 21: MANAGING TALENT Managing Talent wit
Page 22 and 23: MANAGING TALENT “SMEs can provide
Page 24 and 25: DIGITAL SMES GOING DIGITAL the way
Page 26 and 27: BUSINESS PLAN Is Business Planning
Page 28 and 29: INVESTING WISELY INVESTING WISELY D
Page 30 and 31: ACCOUNTANCY EUROPE REDISCOVERING TH
Page 34 and 35: PROJECT MANAGEMENT The Start-Up Jou
Page 36 and 37: COMMERCIAL LEASE document at this s
Page 38 and 39: PENSIONS Looking beyond the Governm
Page 40 and 41: PENSIONS A. Should be registered fo
Page 42 and 43: GETTING IT RIGHT GETTING IT RIGHT R
Page 44 and 45: VAT VAT for small business: existin
Page 46 and 47: VAT to charge their customers VAT w
Page 48 and 49: INSURANCE The Insurance Distributio
Page 50: INSURANCE 1. Re/ insurance intermed
Page 53 and 54: THE POWER OF BEING UNDERSTOOD AUDIT
Page 55 and 56: IFRS
Page 57 and 58: BITCOIN BUSTING THE BITCOIN MYTHS I
Page 60 and 61: MALTA ENTERPRISE Recent amendments
Page 62 and 63: MALTA ENTERPRISE of three consecuti
Page 64 and 65: LIFESTYLE Elaine Marie Debono share
Page 66 and 67: LIFESTYLE Apart from helping at the
Page 68: www.pwc.com/mt Finding true value W

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