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A report published by Chartered Accountants Australia and New Zealand, the Association of Chartered Certified Accountants and the International Federation of Accountants has shown compelling evidence that “the presence of multidisciplinary firms in a large and evolving corporate reporting system fills a valuable market need” and, simultaneously, commends how the rules that have evolved over the past two decades “mitigate risks associated with audit firms providing non-audit services to some audit clients.”  The report, Audit Quality in a Multidisciplinary Firm, draws its findings from leading academic literature, views of policy experts, and an in-depth study of how regulators worldwide manage risk. It is meant to contribute constructively to the international debate on the multidisciplinary firm business model and auditors providing non-audit services.  The report notes that high quality audits require “a diverse skill base” and that “the multidisciplinary model is one of the best mechanisms to develop the skills, expertise and consistency needed for quality audits.”  You can read the report here. (Source: IFAC)

Sep 26, 2019
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Understanding the purpose behind marketing can be tough when you’re not seeing the return on investment. Niamh O' Connor breaks down what you can do to make your marketing strategy work for your business. There’s no topic that incites views from everyone around the board table quite like marketing. Everyone has a view on it! And therein lies the problem when it comes to marketing spend decisions. The critical question being asked at the decision-making tables is: “What’s the purpose of marketing?” The ultimate purpose of marketing is to generate more profitable fee income/revenue so clients will choose your business and refer you to others, and buy more from you, faster, and at higher prices. It’s critical that all investment decisions are made with this core qualification question in mind. The commercial objectives  Firms have an exciting opportunity to set clear commercial objectives when it comes to marketing. Is your objective to acquire new clients in a new or existing market, cross-selling or client retention? ‘Brand awareness’ and ‘we always sponsor it’ do not qualify as commercial objectives! Is your overall brand positioning clear? Does it clearly and effectively communicate how you are different from competitors? Do you have a visual identity that brings your brand to life in a consistent and impactful way that attracts and engages clients? Getting clarity on these areas is key to embedding an effective brand infrastructure that helps drive growth. The campaign Once your core brand assets are in place, who are you talking to and what are you saying? Identify your key customer segments: who exactly are your customers? What are their job titles? What challenges and opportunities do they face and, in this context, what do they value? What content or activities will you use to engage them in the year ahead? How are you mobilising your team to discuss and share this content with your clients? Despite the pressure to deliver immediate results, leading marketers typically allocate 60% of their budgets to long-term (>6 months) marketing campaigns. These campaigns are more effective at increasing marketing share, revenue and profit. The channels Press releases, events, thought-leadership, sponsorships, website and social media make up the typical activity-mix for professional services firms. The best marketing professionals don’t typically spend more on marketing; their focus is on optimising channel-mix based on where their clients are engaging. To ensure you maximise marketing activity, it is also useful to look the cost of funding it. For example, if your profit margin is typically 20% and your event costs €20,000 to run, you need to generate €100,000 in fee income to fund it. When it comes to professional service firms, most of the time and effort is typically spent running activities rather than on maximising outcomes. The big opportunity here is to switch the focus to the amount of new contacts and clients you want to get from your event. How can you engage them before, during and after the event to maximise relationship-building opportunities? The measurement According to the latest Deloitte Chief Marketing Officer (CMO) survey, just 35% of US B2B companies can quantitatively prove the impact of marketing actions on financial outcomes. Most focus on easy-to-measure ‘vanity’ metrics (e.g. impressions, likes, shares, etc.) instead of critical indicators linked to firm value and cash flow. The lack of financially valid and agreed metrics for evaluating brand and marketing is a big underlying reason why 78% of CMOs have historically suffered from a credibility gap with CEOs, boards and CFOs. Niamh O' Connor is the Senior Account Director at The Pudding, a commercial and creative brand company.

Sep 22, 2019
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Open plan offices get a bad rap, but with a few simple changes to the way you work, they can be great for team collaboration and communication, says Moira Dunne. Most organisations have moved away from individual offices to create open plan working spaces. These spaces minimise boundaries between people and promote collaboration and teamwork. Teams can stay in touch easily and deal with issues informally as they arise. This helps to increase productivity and work throughput. But for all the advantages of open plan offices, there can be down sides, too. Some common issues that can cause distraction and upset if not well managed include increased noise levels, frequent desk-visits by colleagues and noisy technology alerts. There are visual distractions too that tap into our natural curiosity  – if you are working hard but spot your teammates laughing, you want to know what’s going on. All of this makes it hard to stay focused. To be productive in open plan offices we need to make some changes. Take control Take control by identifying the specific things that cause you to be distracted. Identify where you can make changes. Here are five tips to help you. Create a virtual wall Use headphones to block out the noise around you. However, listening to music or podcasts can be equally distracting; invest in headphones that are specifically designed to block noise. As noise-cancelling headphones effectively cut you off from the world around you, it is important to agree this with your boss. Consult your colleagues, as well, if you share responsibilities for answering phones or queries. Offer to take turns using headphones and cover for each other so that everyone gets some uninterrupted time to get important work done. Have a clear plan Planning is key to staying focused. Work in time blocks and set small targets. You are less likely to be distracted by conversations if you have a clear list of tasks to achieve. It’s about taking control: when you have a deadline to meet, you choose to stay focused; when the pressure is off, you choose to catch up with colleagues. Match task to noise level Examine all your work. Some tasks require a higher level of concentration than others. Plan to work on low-focus tasks when the office is at its noisiest (usually Friday afternoons!). Batch up these tasks and crack through them, while keeping on top of the general chat around you. Plan to do your high-focus work when you know the office will be quieter. Organise the space If you have any flexibility in this regard, try to maximise how your office space is used. Creating functional areas can increase concentration and reduce distraction, such as: A collaboration table or desk An equipment and supplies zone A quiet corner for solo working Aim to reduce the amount of traffic passing individual work areas. Which areas are noisiest with lots of passers-by?  Can all the equipment, such as printers and photocopiers, be positioned near the coffee station or the stationery cupboard? Pool together ideas to give your manager so that, during the next office upgrade, the team productivity can be considered. Embrace distractions There will be things that you can’t control or change, but what you can control is your reaction. If we allow ourselves to react poorly to a constant noise, we can end up working in a state of permanent annoyance. Accept the issue. Embrace it. Work around it. Use off-peak hours when you can. Book a meeting room. Take control, and own your time and your reactions. Staying productive in open plan spaces is about taking control. Moira Dunne is the Founder of beproductive.ie

Sep 22, 2019
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Bullying and harassment are thought of as an HR and management problem, but often presents very real ethical dilemmas for the people observing the behaviour. Matt Kavanagh outlines how observers and mediators can appropriately deal with the ethical burden of bullying and harassment. According to the Professional Accountants in Ireland and Northern Ireland Ethics Research Report, 94% of professional accountants reported observing or encountering some level of unethical behaviour during their professional career. Bullying and harassment was reported to be the most commonly observed unethical conduct, with 72% of professional accountants reporting to having observed or encountered it during their professional career. Bullying and harassment can come from a number of sources – a boss with poor people skills, a frustrated colleague under pressure, or even just a person with poor self-awareness as to their own behaviour. Not only is the bully’s behaviour affecting the target but it also affects the people around them who are observing the bullying and harassment. It presents itself as an ethical dilemma when a person is faced with a difficult choice on what to do if they have observed such conduct. Should the individual intervene? Should the person report the matter to others in their organisation? Does the person ignore the behaviour by rationalising the conduct and suggesting that maybe it wasn’t ‘too bad’? What you can do as an observer There are, of course, a number of potential actions that could be taken to ease the ethical burden: Check with the target to see how they feel about the encounter. If the target is upset by the other person’s conduct, they may wish to contact human resources to discuss things further, or to make an informal or formal complaint. You can support them in this decision. If you know the person who appears to be bullying or harassing their colleague, it may be useful to speak with them informally and reflect back what you believe you observed. This can be a very difficult conversation, but it could be a good opportunity to stop the harassment by making them aware that their behaviour is being observed. Consider discussing what you observed with a trusted colleague, friend or family member. This can help you to decide what you should do. If a direct approach to the bully is not an option, consider whether your organisation’s Dignity at Work Policy allows for, or obligates you to, report it as a witness. Staying ethical while investigating Where you have been asked to investigate or mediate a possible case of bullying and harassment, it is important to consider your own ethical stance. These obligations include: Carrying out your work with an open mind and in an impartial manner; Afford each party fair procedure; Take time to understand fully what is being alleged; Consider the degree of seriousness based on both the facts and the perspective of the target; and Carefully fully consider the responses from the person who was alleged to have carried out the bullying. Matt Kavanagh BL MBA M.Comm (Corporate Governance) is a governance, business and human resources consultant. A webinar, Bullying and Harassment – Dealing with the Ethical Dilemma, will be hosted by Chartered Accountants Ireland on 16 October 2019.

Sep 22, 2019
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The Governing Council of the European Central Bank (ECB) today decided to introduce a two-tier system for reserve remuneration, which exempts part of credit institutions’ excess liquidity holdings (i.e. reserve holdings in excess of minimum reserve requirements) from negative remuneration at the rate applicable on the deposit facility. This decision aims to support the bank-based transmission of monetary policy while preserving the positive contribution of negative rates to the accommodative stance of monetary policy and to the continued sustained convergence of inflation to the ECB’s aim. All credit institutions subject to minimum reserve requirements under Regulation ECB/2003/9 will be eligible for the two-tier system. The two-tier system will apply to excess liquidity held in current accounts with the Eurosystem but will not apply to holdings at the ECB’s deposit facility. The volume of reserve holdings in excess of minimum reserve requirements that will be exempt from the deposit facility rate – the exempt tier – will be determined as a multiple of an institution’s minimum reserve requirements. The multiplier will be the same for all institutions. The Governing Council will set the multiplier such that euro short-term money market rates are not unduly influenced. The multiplier may be adjusted by the Governing Council in line with changing levels of excess liquidity holdings. Any adjustment to the multiplier will be announced and will apply as of the following maintenance period after such decision is made. The size of the exempt tier is determined on the basis of average end-of-calendar-day balances in the institutions’ reserve accounts over a maintenance period. The exempt tier of excess liquidity holdings will be remunerated at an annual rate of 0%. The non-exempt tier of excess liquidity holdings will continue to be remunerated at zero percent or the deposit facility rate, whichever is lower. The two-tier system will first be applied in the seventh maintenance period of 2019 starting on 30 October 2019. The multiplier that will be applicable as of that maintenance period will be set at six. The remuneration rate of the exempt tier and the multiplier can be changed over time. (Source: European Central Bank)

Sep 18, 2019
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The Committee on Budgetary Oversight has called for measures which will protect the stability of the local property tax (LPT) revenue, while minimising the exposure of residential property owners to possible increases in the valuation of their properties. In advance of the proposed November 1 revaluation date, an inter-departmental group was established to examine LPT in the context of property price developments. The Minister for Finance has postponed the revaluation process to allow for further consultation. The next revaluation date is now November 1, 2020.  The Committee’s report noted that the Minister for Finance has deferred the revaluation process on two occasions to date, and that this approach is not in line with the recommendations of the Inter-Departmental Review Group.  The Committee’s report explored the scenarios for revaluation in detail, and made recommendations as a means to future-proof the LPT system from the volatility of property prices.  The Committee report also recommends that consideration be given to increasing the deferral income threshold from €15,000 to €18,000 for a single person, and from €25,000 to €30,000 for a couple. Exemptions The Committee endorses the recommendation made by the Review Group to remove the exemptions currently in place for unsold trading stock of builders/developers in May 2013 or properties sold by them between January 2013 and October 2019, and properties purchased by “first-time buyers” in the period between January 2013 and October 2013. The Committee also endorses the recommendation to regularly review all exemptions and to keep the range of exemptions to a minimum.  This will help to maintain a broad revenue base and reduce inequalities. (Source: Oireachtas.ie)

Sep 18, 2019