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SMEs are crucial for the functioning and growth of the EU economy, representing 99,8% of all non-financial companies. Audit ensures that a company’s financial information is reliable, which is indispensable to instil confidence and trust in this part of the economy. However, policy-makers seem to focus on audit of large or listed companies rather than SMEs. In some countries such as Sweden and Denmark, they have even introduced an audit exemption for SMEs.
Sweden has just evaluated the impact of abolishing the SME audit requirement, concluding that this reform was unsuccessful as its costs outweigh the benefits. This has prompted Denmark to start a similar investigation. These countries’ empirical facts-based approach is a good practice of sound policy-making. We encourage all policy-makers to follow such an approach and to consider the benefits of SME audit.
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. They will also keep analysing national developments in the area of SME audit policy.