The Difference Between an SME & a Large Corporate

http://www.allaboutcareers.com/articles/post/management-consulting-business-admin/culture-shock-the-difference-between-an-sme-a-large-corporate.htm

"Objectives vs. demands…

In a large corporate, you’re protected by a hierarchy, which is wrapped in ‘HR policy’ and cushioned by process. By this, I mean you’re given very clear objectives, you have a fair timeframe in which to achieve them, and your manager is on standby to oversee, guide and advise. Moreover, ‘the way things are done’ tends to involve a certain amount of diplomacy:  nobody really says what they think because they’re so busy wrapping it up as ‘developmental feedback’ in accordance with the training they’ve received. It’s a very safe environment.

By contrast, in an SME (small and medium-sized enterprise), the CEO knows everybody and is aware of every activity. He doesn’t care about hierarchy because their probably isn’t one. If he wants something, he will come straight to you and, because time is so precious and clients are so demanding, you can often kiss goodbye to your weekend in delivering what he needs. It’s all hands to the pump and you all need to earn your salary.

An SME is much more efficient in its delivery, but a corporate is much kinder about it. Consequently, you need tough skin if you’re going to work in an SME because you're often in the direct firing line. However, you need patience in a large corporate because the process and procedures can often slow you down a tad.

Master of all trades, jack of none…

In a large corporate, you’ll often have a role profile and a set of five or six key objectives to deliver. You’ll have a personal development plan and training options. You’ll have a mentor, a manager and a coach. You’ll be in a team and a department with a certain focus and a specific area of expertise and you’ll learn the knowledge, skills and experience needed to add value to that department. To advance, you’ll need to master your topic. You’ll follow processes and track performance against key KPIs (key performance indicators).

In an SME, however, you will literally know, see and do anything and everything. You’ll learn faster, harder and in more depth than you would do in a corporate. Cross-fertilisation of knowledge and virtual working on projects is the norm. You’re very unlikely to ever do the same thing twice because everything is so bespoke and client-driven. It’s what my boss would call ‘on-demand hierarchy’, meaning the best person for the job gets the job on the day.

Obviously, the cons of this are: insecurity, randomness and the difficulty of outperforming against objectives because you probably won’t have any! However, you do get to see, touch and learn about every aspect of running a business; you become an all-round consultant (that awful C-word). You can get involved in finance, marketing, bids, PR, events management etc. Consequently, when it comes to your next interview, you can give yourself the job title that suits the role to which you’re applying. Bingo!

Sink or swim…

In a large corporate, you have such a thing as ‘performance management’, whereby you’re measured objectively against your specific core objectives (something you’ll rarely have in an SME). If you’re doing well, you get praised and maybe even promoted. If you’re not doing so well, you get mentored, guided and trained in a lengthy performance management process, which will help bring you back on track. It’s all very fair and drawn out, and it can lead to complacency.

In an SME, on the other hand, if you’re no good, you’re out the door! An SME can’t afford to carry ‘dead wood’, and so if you’re not adding value, you’re going to get your marching orders.

Consequently, in a large corporate, you can afford to have an off-month and coast through your role for a little while. You can let others in the team pick up the slack because you’re hidden to a large extent and protected by HR to an even larger extent. In an SME, however, somebody will notice the second you put your pen down, because it’s all hands to the pump and there is little luxury by way of hierarchy, HR and ‘corporate buffer’.

Having worked in both arenas, I can say that I learnt a great deal in both. I felt safe in my large corporate and I felt on edge in my SME. I learnt a lot about specific aspects of business in my large corporate, but I learnt a lot about running a business in general in my SME. A ‘win’ in a large corporate was expected, but a ‘win’ in an SME was a celebration.

Therefore, go into both areas of business with your eyes open and with an open mind. Each option has an entirely different package to offer you, and one is not necessarily better than the other; they’re just different and different can always be a shock to the system.

Written by Lisa Bean"

Double Irish With a Dutch Sandwich

I find a very good explanation for this tax avoidance concept. The following is from zephyrxt.com:

"以下总结提炼自以下两则新闻：“避税天才”：苹果海外收入税率仅3.3%避税？

Google、微软同样都是高手

避税目的

从高税国家向低税国家转移利润以减少企业所得税

避税原理

转让定价（Transfer Pricing），指的是关联企业之间通过销售货物、提供劳务、转让无形资产等定价巧妙的交易，进行资金的转移。

具体操作手法

高税国企业向其低税国关联企业销售货物、提供劳务、转让无形资产时制定低价；低税国企业向其高税国关联企业销售货物、提供劳务、转让无形资产时制定高价。这样，利润就从高税国转移到低税国，从而达到最大限度减轻其税负的目的。

以“双爱尔兰”和“荷兰三明治”为例

四个前提

1.爱尔兰的企业所得税非常低，只有12.5%，远低于美国和其他欧盟国家

2.爱尔兰和荷兰都规定，欧盟成员国公司之间的交易，免缴所得税

3.在爱尔兰注册的公司，只要其母公司或总部设在外国，就被认定为外国公司

4.荷兰税法以公司注册地而不是总部所在地来认定公司的国籍

于是 就有以下三个公司 简称爱A 爱B 荷A

爱A：爱尔兰本土注册 本部为爱尔兰

爱B：爱尔兰本土注册 本部为避税天堂加勒比群岛 拥有知识产权等无形资产

荷A： 荷兰本土注册 本部为荷兰

操作流程

爱A负责接受欧盟所有销售利润，但利润的绝大部分是需向爱B公司支付的知识产权等专利费用；

但爱A不能直接向爱B公司直接转移利润，因为在爱尔兰看来这就是欧盟国家向非欧盟国家转移利润，需要缴纳高昂税费

所以，必须通过荷A公司中转，幸好有前提2，所以中转利润只需在荷兰缴纳低廉的交易税。

荷A再向爱B公司转移利润时则适用前提4，所以荷A向爱B公司之间转移利润属于欧盟公司之间转移，所以不需要缴纳所得税；

结果，爱B公司得到中转过后的利润，最后向本部加勒比群岛转移。在爱尔兰看来这就属于外国公司的内部操作（前提3），所以税费极其低廉；"

This is the picture of google, apple, and other large multinational American companies' tax avoidance scheme, but many people probably think it hell has nothing to do with me. I can't give any persuasive idea whether this is good or bad for most of people in the Country. Let me investigate more, if I choose this topic as project.

Further Info.:

http://www.pearse-trust.ie/blog/bid/86105/US-Companies-Their-Use-Of-The-Double-Irish-Dutch-Sandwich

Experience of auditing brain in real life

Through my working experience and studying life of auditing nowadays, I found that people who have worked as the auditor got the habit of keeping evidence, even in non-auditing work area, for instance, he/she have a brain of making copy of each document, email cc boss for everything he/she did, idea of "maintain the original site", etc.

I do think this a kind of sophisticated behaviour in work and it does help and protect you in some bad situation you may come across, but what I want to mention is, for example, the habit of cc boss everything you did, in my opinion you have to judge by yourself whether this email or business really need to inform him/her, besides, it is preferable if you can know his/her character or attitude about information, because some bosses prefer to know everything in the business, but some, especially higher level bosses don't want to know that they think "teeny-tiny thing", or  they actually don't have the time to read your email. Just imagine, a busy higher level boss has a whole day meeting and he/she didn't do anything he/she supposed do in that day, when he/she opened the email box, a list of mails are from you, and all about the "teeny-tiny thing" which maybe your intention is to tell him/her that you did this, it is probable this will drive him/her nuts and this is the adverse impact of your auditing brain.

Critically evaluate the extent to which contemporary audit practice contributes to achieving the objective of corporate audit

The main purpose of the audit is to determine and judge the reliability of the financial statement and the supporting accounting records of a particular financial period, in order to make sure the information of the FS is true and fair, and there is also some expectations that the auditor should detect main fraud and error of the financial statement. But in contemporary audit, there exists some flaws in audit practice, such as the threat of independence of audit; commercialisation of audit firms which denote they chase the profit and market share maximisation; in-transparency in how the auditors are appointed and how they operate the audit, etc.

Independence is a vital character in auditing, but in reality, the audit model is flawed since it makes auditors financially dependent on their clients. The independence can be destroyed by three ways:

by auditors having a financial interest in the company, namely the self-interest threat, advocacy threat, etc. which defined in the IFAC. It is quite common that audit firms also provide non-audit services, such as tax service, and they dependent on companies and their directors for fees and profits. For instance, the case of Enron.

by the auditors being controlled in the broadest sense by the company, such as self-interest threat, familiarity threat, management threat, etc.

if the work which is being done in fact work which has been done previously by the auditors themselves acting as accountants. mainly this refers to the self-review threat, which questions whether the auditor would find it easy to criticise a system they have put in themselves.

The commercialisation of the audits imply the audit firms to maximise their market share, which results in the auditors dependent on the fees of clients, and may not be able to retain sufficient distance to deliver independent audits.

It is easy to explain why we need audit due to agency theory, but it didn't explain how auditors might be appointed, and in theory, the auditors should be appointed by shareholders, but in reality, individual shareholders are rarely  have the time and inclination to directly recruit auditors, and this is done by directors which leads to the problem of auditor appointment.

An examination of the social and organisational context of auditing should be a key element of any exploration of audit quality, but this is rarely the case. The audit quality goes down as a result of:

more junior auditors involved in auditing which for cost saving by firm

inadequate time budgets by premature sign-off and other forms of audit quality reduction behaviour

diluted stringent liability

There are also some changes in environment, such as appearance of complex financial instruments, transformations in capitalism where tangible things are increasingly replaced by intellectual property. Traditionally auditors have tended to verify financial statements by referring to a variety of evidence ranging from invoices, contract notes, market value etc., but these practices are increasingly problematised by the above reasons.

So in summary, there are some flaws in contemporary audit practice, such as independence of auditing, commercialism of audit firm, the way to appoint auditors, inadequate time and more junior auditors for saving cost which result to the low audit quality, and some challenge of new complex financial instruments etc. to have impacts of the auditing. For some possible solutions for the problems may government appoints auditors, and training the auditors in order they have the up to date knowledge and skill for investigating the companies to show the true and fair view of their financial information.