The effects of the financial crisis continue to be felt by small businesses, according to the small- and medium-sized accountancy practitioners recently polled by the International Federation of Accountants. Economic uncertainty is still the biggest challenge facing small- and medium-sized entities (SMEs), said the largest group of respondents—nearly 30%—while the burden of regulation was a close second. Regulations and standards challenge small- and medium-sized accounting practices (SMPs) as well: over 40% said that keeping up with regulations and standards is the most important issue now facing their practice.
Despite the prevalence of economic uncertainty, nearly 40% of SMPs expect their practices to perform better this year than last year. Only slightly more (43%) expect business to be even with 2010, and 19% expect business to shrink in 2011.
SMPs continue to generate the largest proportion of their revenue from traditional compliance-based services. Nearly 45% of respondents indicated that audit and assurance is their biggest source of revenue, followed closely by accounting and and compilation (40%). Tax and advisory/consulting services comprised only 15% combined.
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