Accountants: SMEs’ Best Friends

CIPE Pakistan office director Moin Fudda, left, speaking at the forum discussion co-hosted with the Pakistan chapter of the Association of Chartered and Certified Accountants. (Photo: CIPE)

Generally, the media focuses on corruption and bribery scandals related to government, public corporations and large private companies. Not many consider that corruption is also a large burden on Small and Medium Enterprises (SMEs). Often with their limited resources, when survival remains the key objective, most SMEs get sucked in to the spiral of corruption and bribery. One of the key reasons for getting into this is their inability to keep their financial records in order.

SMEs need to consider that one of the ways to stay clean is by engaging professional accountants, so that abasic framework for effective recording and reporting is prepared and implemented. To discuss the role of Accountants in Helping SMEs, the Association of Chartered and Certified Accountants (Pakistan Chapter) recently organized a discussion forum in Karachi. Moin Fudda, CIPE Country Director in Pakistan, was one of the panelists at the discussion forum. He said that SMEs often lack understanding about corruption; their ability to invest in quality human resources is also a major issue that makes them defenseless in front of corrupt officials.

Tajamul Hussain, a practicing accountant, commented that the trust factor is a major hurdle between professional accountants and SME owners. He was of the view that most SME owners still live in silos and follow old practices learned from their elders and their way to protect business interest is by concealing information. Also , owners believe that sharing financial and other records with accountants may damage their financial standing.

Participants agreed that despite these issues, accountants have greater opportunities in the SME sector due to the sheer number of them; according to Pakistan’s Small and Medium Business Development Authority, there are around 3 million SMEs in the country.

Fudda also stressed the need to encourage women accountants to work with the growing number of women entrepreneurs in Pakistan and help them become resilient organizations that these small entrepreneurs follow best business practices and do not indulge  bribery and corruption. He said that chambers and associations can also play an active role in promoting professional accounting in their member companies.

Published Date: December 18, 2010