Professor Robin Jarvis Head of SME Affairs

ACCA’s International Research projects

Banks, SMEs and Accountants Regulation: Comparisons of the UK with Australia Work-in-progress Presentation

Countries/regions surveyed: Germany, Spain, UK, US and Hong Kong Reasons for choosing these countries/regions Banking structures Banking relationships Types of finance used Cost of raising finance The role of the accountant Banks, SMEs and Accountants 1

Methodology: 200 telephone interviews with SMEs Focus Groups with accountants 61% of SMEs had a turnover less than £1m Banks, SMEs and Accountants 2

Banks as a source of finance Respondents were asked if they had sought to raise external finance in the last three years Only 22% said yes Banks were the main source (53%) with exception of SMEs with a turnover between £50k - £250k 84% of applications were successful Highlight and overwrite dummy text with your titles and texts. Restrict yourself to a maximum of 6 points per slide. If you require more points on a specific topic use as many following slides as necessary. Do not change the fonts or sizes used in the blanks. If you require more of any slide, go to the ‘Slide Sorter View’, click on the required slide and hit ‘Control D’, this can be repeated to create as many duplicates as required.

%AllUKGERESPHKUSA Finance sought (in last 3 yrs) From Main Bank Other Source Both Successful in Full Successful in Part Refused by Financier(s) Refused by SME Did not know

Accountants advice in negotiations with banks AllUKGermanySpain Hong KongUS Advice on finance%%% Yes No Do not need n= Active role n= Percentage of those who advise70%44%69%83%90%52% Percentage of total sample34%16%36%56%42%22%

Why is the issue regulation so prominent in Australia and the UK? Regulation

AUSTRALIAN AND UK CONTEXT Australia 9 th and the UK 6 th easiest place to ‘do business’ (World Bank 2008) UK administrative burden = £19.7bn per annum (1.6% GDP) Australian administrative burden = estimates between AU$11bn and AU$17bn per annum (1.3% GDP)

Survey of Australian and UK owner managers and accountants Sample sizes: UK = 515 SMEs and 273 practicing accountants Australia = 250 SMEs and 130 practicing accountants Slight bias in both samples towards firms employing between 50 and 249 people and against firms employing less than 10 people METHODOLOGY

REGULATIONS ARE REASONABLE Excluding ‘Don’t knows’ and ‘Not Applicable’ answers

Accountants as Providers of Support and Advice to SMEs: an Asian-Pacific study The Roles of Competence, Trust and Professional Ethics in the Supply of External Financial Advice to SMEs Income and reward: understanding self- employment decisions Work in Progress