Tag Archives: SMP

Impact de la pandémie de Covid sur les petites et moyennes pratiques en Afrique de l’Est (Published)

La pandémie de Covid-19 (« Covid ») a provoqué la fermeture ou la contraction substantielle de petites et moyennes entreprises (PME) en 2020 et 2021. Ces PME constituent plus de 95 % des entreprises dans la plupart des pays du monde. En tant que conseillers commerciaux de confiance des PME, il y avait un besoin unique de découvrir comment les petites et moyennes pratiques (SMP) elles-mêmes ont été affectées par la pandémie. En octobre 2021, un échantillon représentatif de 197 SMP du Burundi, du Kenya, du Rwanda, de la Tanzanie et de l’Ouganda avait répondu au questionnaire fermé abrégé. Dans une étude précédente achevée en 2019 (en adoptant un questionnaire beaucoup plus large), un total de 409 SMP du Kenya, de la Tanzanie et de l’Ouganda avaient répondu. Les SMP ont diminué en termes d’emploi. Les SMP comptant moins de 10 employés sont passés de 34 % à 38 %. Les SMP n’ont utilisé que 12 jours pour le développement/la formation (référence = 20 jours) et le taux d’utilisation n’était que de 52 % (référence > 70 %), ce qui implique que la pandémie a désorganisé le travail d’équipe et le moral du personnel. Sur une note positive, les taux de charge ont légèrement augmenté de 2% à 264 USD par jour. Les clients facturés avaient augmenté de 20% à 79 par an, mais les frais moyens par client ont diminué de 6% alors que les clients tentaient de réduire leurs coûts en raison de la pandémie. Malgré cela, le revenu moyen par SMP a augmenté de 28% pour atteindre 296 000 USD par an, ce qui implique que les SMP (en tant que bloc d’entreprises) ont bénéficié pendant la période de pandémie.. L’étude était purement quantitative, d’où les aspects qualitatifs de la façon dont les SMP en Afrique de l’Est ont réussi à faire face aux blocages n’ont pas été capturés. Deuxièmement, cette étude s’est limitée au côté des revenus (en raison de sa sensibilité plus faible) mais la pérennité des SMP peut aussi dépendre de leur niveau de charges d’exploitation, de rentabilité et des tirages des partenaires. Les SMP en Afrique de l’Est devraient comparer leurs pratiques individuelles à ces résultats de recherche. Les preuves montrent que de plus en plus de SMP sont agréés chaque année, d’où la concurrence pour les frais est susceptible d’augmenter dans les années à venir.Cette étude a contribué à la littérature sur la pandémie de Covid et son influence sur les SMP et la méthodologie peut être adaptée à d’autres régions d’Afrique.

Keywords: Capital humain, Compétitivité, Pandémie de Covid, SMP

Financial reporting dilemmas for retirement benefit schemes: Evidence from the Uganda (Published)

Purpose: Firstly, to determine the state of compliance by Ugandan retirement benefit schemes with the financial reporting guideline issued by the Uganda Retirement Benefits Regulatory Authority (the regulator) in June 2017. Secondly, in regard to adoption of International Financial Reporting Standard (IFRS 9 – Financial Instruments) which became effective in 2018. Thirdly, with regard to the external auditor’s disclosure in the Independent Auditor’s report under International Standards on Auditing (ISA 701 – Key Audit Matters) which became effective in 2016. Methodology: A sample of 50 of a population of 63 retirement benefit schemes in Uganda was selected. The sample comprised 37682 contributing members with average assets of US$ 8.35million per Scheme and annual average income of US$ 1.07million per Scheme. Audited financial statements for the years 2017 and 2018 were examined and specific quantitative data extracted. A questionnaire was also administered to the partners who signed off the opinions in the Independent Auditor’s report of the sampled retirement benefit schemes. Results: There was 100% compliance in regard to some of the information guided by the regulator. This was the need to present the statement of changes in net assets, statement of net assets and statement of cash flows in the given format. 88% complied with the format for the statement of cash flows. However, the biggest challenge was on the five-year financial trend of the Scheme where only 40% complied. The other was only 50% complied with IFRS 9 – Financial Instruments (both in terms of accounting policies and disclosures). 82% of the Independent Auditors’ reports disclosed Key Audit Matters. Significance of study: This study is timely for any gaps to be corrected for the financial year 2019. Whilst the regulator attempted to standardize the financial reporting, a specialized area of expected credit losses under IFRS 9 requires attention. In particular, Schemes can be provided with the assumptions to be used in their IFRS 9 model given that the economic condition in Uganda are the same for all of them. In addition, there should be a consensus on the applicability of ISA 701 for retirement benefit schemes and whether they are publicly accountable entities. Future research:  A survey approach can be adopted in which a sample of members of retirement benefit schemes can participate in commenting on the good and challenges they have faced with the financial statements and the independent auditor’s reports.

Keywords: Big-4, Financial Reporting, SMP, retirement benefits

Determinants of External Auditors’ Remuneration: Evidence from the Ugandan Insurance Sector (Published)

There is perception in Uganda that the gap between the auditors’ remuneration paid to the Big-4 (Deloitte, EY, KPMG and PwC) and that for the Small and Medium-sized Practices (SMPs) has continued to grow but little is known of what is causing the disparity. There are 100 companies in the insurance sector in Uganda yet there are 230 licenced audit firms at end of 2018 leading to an excess of supply over demand. A sample of 74 insurance players in Uganda was used for this longitudinal study based on selected data extracted from audited financial statements for the years 2014-2017. The study revealed that the client’s annual income and total assets have a statistically significant influence on the auditor’s remuneration. The auditor’s size (SMP or Big-4) also had statistically significant influence on the auditor’s remuneration – the client size influenced the choice of the auditor. The smallest insurance player had total assets of only USD 7,079 while the largest had USD 58.2million. In terms of income, the largest earned USD 34.6million per annum. Big-4 earned a premium of USD 17,235 on their remuneration per client per annum by virtue of their size and reputation. Given these three determinants, the auditor’s remuneration was USD 23,189 per client for Big-4 compared to USD 2,422 per client for the SMPs. Whereas SMPs held 66% of the number of insurance audits in Uganda, their market share of the auditor’s remuneration was 17%. This translates into a Concentration Ratio (CR4) of auditor’s remuneration of 83% held by the Big-4. The estimated size of the auditor’s remuneration in the insurance sector in Uganda is USD 822,000 per annum of which the SMP’s share is approximately USD 150,000 per annum. The implications for accountancy practice, especially SMPs in Uganda, are that the gap can only be reduced through acquisition of medium and larger insurance players who would then be able to afford higher auditor’s remuneration. Future research could include a qualitative dimension of in-depth interviews of selected insurance players to understand their criteria for audit firm choice and auditor’s remuneration budget

Keywords: Auditor’s Remuneration, Big-4, Concentration, Insurance, SMP