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The European Securities Markets Authority (ESMA) has published a report entitled Enforcement and Regulatory Activities of Accounting Enforcers in 2016, which sets out the enforcement and regulatory activities of accounting enforcers within the EU in 2016. The report provides an overview of the activities conducted at European and national levels with respect to examining compliance of financial information of listed issuers on regulated markets with the applicable reporting framework. It also outlines other activities conducted with the objective of contributing to supervisory convergence in the area of financial reporting, and, in particular, with respect to IFRS in the European Economic Area (EEA) during 2016. The report is based on the activities of ESMA and European accounting enforcers. It provides a description of the main supervisory convergence activities that were coordinated at European level during 2016, information on enforcement activities and ESMA’s contribution to the financial reporting standard setting process. The Irish Auditing & Accounting Supervisory Authority (IAASA) is an active participant in the ESMA-sponsored European Enforcers’ Co-ordination Sessions (EECS). The objective of EECS is to coordinate European enforcement activities in order to increase convergence among European national accounting enforcers and contribute to fostering investor confidence. IAASA has stated that further details of IAASA’s participation at EECS will be included in the organisation’s forthcoming 2016 annual report. The ESMA 2016 Report can be accessed here.

In the never-ending hunt to cut the costs of business, Irish company InShip has come up with a solution that fits the bill. By Cian Molloy There is just one requirement to move to InShip’s automated accounts payable solution. Your suppliers just email you your invoices. No scanning needed. "We’ve researched this area and it will save you up to €2 per invoice," says the company’s founder and CEO, Adrian Kelehan, who is an accountant by profession. For more than 20 years, Kelehan thought that the traditional way we deal with suppliers’ bills and statements is too cumbersome and costly. According to a number of studies, the cost of generating and processing a paper invoice can be as large as €6 from the day it is generated to the day it is shredded six years later. "I thought there had to be an easier way. So Dr Kevin Casey, Glenn Murphy and myself, with help from Enterprise Ireland, developed InShip – a web-based accounts payable solution." Works with any accounts package "If you are using an accountancy package like Sage, Quickbooks, Xero, TAS, Big Red Cloud or Surf, for example, you can just bolt Inship on to that," he added. "We have developed InShip to integrate with all major accounts packages and during the development process, we worked closely with accounts companies – even forming a partnership with Big Red Books. InShip is flexible enough to be adapted to all accounts packages imaginable. "You can even use it as a stand-alone creditors’ ledger if you are a small business." As InShip is a cloud system, users can also access their records from anywhere in the world. Full flexibility The first time InShip receives an email from a supplier, the customer decides what data they wish to extract from that supplier’s invoices along with defining rules on how they wish to process that suppliers invoices. Statements are automatically reconciled Every subsequent email will then be automatically processed by the system, allowing you to avail of InShip’s many features throughout: PO matching, statement reconciliation, auto-forwarding for approval and electronic archiving. "Traditionally, processing a paper-based invoice was a 10 step process," says Kelehan. "With InShip, it’s a one step process – an invoice is submitted and InShip takes over automatically." Watching for price increases The system will generate automatic alerts if it detects unauthorised price increases or if an invoice is short and you are being billed for goods or services that have not been delivered. InShip is also fully scalable and can perform within almost any business size, be it large or small. “Our typical customers are bricks and mortar outlets with a regular supplier base. Some of our clients have as little as 30 invoice a month but we also have clients that are processing more than 1,000 invoices a day automatically with InShip.” No capital expenditure InShip is software as a service, and is paid for with a monthly subscription based on a client’s usage volume. A small business using InShip to process 100 documents or less will pay just €20 a month whereas a large corporate processing 500 documents a month will pay €80 a month plus a 15c per document overage charge. “We currently have more clients in Ireland than anywhere else, although some of our larger clients are based in the UK ,” says Kelehan. “Our clients have been really appreciative of InShip. They love how everything is in one place; no need to look for missing invoices, no need to chase up invoices to be approved and as for audits and tax inspection, everything is just a click away. "Within many companies, if you want to find a paper invoice processed in the last two years, you need to grab a ladder to go looking through stacks of drawers in the back room, I’ve experienced that.” says Kelehan. “With InShip, you can find an invoice in seconds. It’s not just a question of cost, InShip is also about reducing the hassle and the headaches."

Billy O’Connor FCA draws on his experience as an executive coach to share some words of wisdom for his fellow Chartered Accountants. As a Chartered Accountant and executive coach, do you see a shift in the areas of management and leadership? There’s a story that Einstein was once asked by his assistant why he had set the exact same exam papers for the third year in succession. His reply was that the answers were different. Clever! I would say the same of coaching and mentoring managers and business owners today. It’s generally the same broad issues and challenges, except the answers are completely different in this period of unprecedented change. Competition, technology and knowledge are not just exponentially growing, but are feeding off of one another and this multiplier effect is what’s causing such a changed environment and stressing business owners. What common problems or failings do you encounter time and time again, and how can they be remedied? I can safely say that the lack of a proper staff and team performance appraisal system can often be the root cause of what I find when I am carrying out my diagnosis. When you think about it, business survival and growth is really pretty simple. It’s about four things: you need to find more of your ideal clients; you have to get them to buy more; and you’ve got to watch your margins and pricing like a hawk. Lastly, if you don’t have proper systems and procedures and, in particular, clarity about what each person is expected to deliver, all of the additional business that you’re trying to generate cannot be managed. That’s why, for example, franchise operations are far more successful than other start-ups... systems, systems, systems! You refer to “hard” and “soft” management skills. Why is it important to know the difference? In fact, I would put it more like having three hard and three soft resources at our disposal every day. As managers, we’re expected to be competent and skilled in the three “hard” technical areas. For example, as a Chartered Accountant, managing the three hard resources of finance resource and all that entails; knowing your products and services resource and everything about them; and our physical/tangible resources like fixed assets, IT and so on. There is a general weakness across organisations in the three “soft” resources These are people, time and – probably one of the most important resources of all – culture and values (also known as “how we do things around here”). I often see investment being made in resources that do not need investment at all, and these are generally on the hard side. It’s like strengthening a link in a chain that doesn’t need strengthening. I often ask owners of businesses: ‘What is your greatest resource?’ They invariably point to “my staff”. However, when I ask them how much time and money they actually invest in their staff, I find slight flushing around the gills from embarrassment! Your firm uses a patented methodology and a unique toolkit. At a high level, how do they work? One of the other big gaps I come across in businesses today is the absence of a strategic thinking and planning process. Okay, medium and larger companies often have three-year budgets and the like. However, these are not strategic plans. They are budgets. We have a process called 2143 (why it’s 2143 and not 1234 is for another day!) and suffice to say it’s four steps that can be used by any individual, team or company to get a simple strategic plan on paper. Try it out for your own career. It must be done in the order of 1, 2, 3 and 4 as follows: Establish where you are exactly today internally with your company and team and externally with your clients. Be courageous; Look back on the road that you have travelled – not to beat yourself up, but simply to identify what went well and not so well. This will ensure you avoid the mistakes of the past; Spend time thinking about what it is you want to “be and do and have” in, say, three years’ time with as much clarity as you can; and Once step three is completed, establish clear focus areas, strategic goals and tactical plans with people’s names and dates and responsibilities attaching as action items in order to achieve what you want to “be and do and have” in the timescale set out. What is the one piece of advice you would share with your fellow Chartered Accountants? Everybody knows that you’re competent and skilled in the world of finance. You have proven it with your qualification and have earned your stripes. Now, if you’re working as an in-house accountant, don’t hide behind your desk – get out among them, understand what is really going on in the business, check the pulse and get to know everyone. If you’re in practice, build the relationship with the clients out in their premises, encourage them to focus on their people, their performance, and get them thinking about the future. So many clients complain to me about their professional advisers forever looking in the rear-view mirror. Remember, all they want to talk about is the road ahead. Introduce the concept of strategic planning to them and they will thank you for it. People buy people, not reports and accounts. Billy O’Connor FCA is Managing Partner at The Discovery Partnership.

More needs to be done if real and sustained improvement in audit quality is to be achieved, according to a report published by the Financial Reporting Council. The Financial Reporting Council (FRC) has called on audit firms to improve quality control procedures by building on examples of good practice identified in its latest thematic review. One-third of the audits sampled for the review required more than just limited improvements, suggesting that the quality control procedures adopted by the firms had not been effective. All firms have procedures and dedicated resources to ensure audit quality, some of which go beyond those required by standards. However, the number of audits that required more than just limited improvements shows the firms’ audit quality procedures were not sufficiently robust. Faster improvements in – and greater consistency of – audit quality, strong leadership and the right culture in audit firms is required according to the FRC. The Audit Quality Thematic Review identified several areas of good practice: Half of the firms have a dedicated board or committee that oversees all matters relating to audit quality, bringing all the elements together and ensuring that audit quality has specific prominence and focus in the firm’s leadership agenda; Two firms have set out their audit quality procedures in a ‘three lines of defence’ model, helping to understand how these audit quality procedures interact to achieve audit quality and minimise the risk of inconsistency; and Initiatives to achieve consistent audit quality, identify areas for improvements and monitor the effectiveness of training in specific areas requiring improvement. Focus for improvements Audits with a higher level of partner and director involvement had a greater likelihood of achieving a high quality outcome prior to issue of the audit report. The FRC also identified procedures by some audit firms that should be a focus for audit quality improvements. These include:    The appropriate involvement of specialists in the audit with sufficient reporting of their work where this was important to achieve audit quality; and That firms should consider whether there are any insights arising from their root cause analysis where their quality control procedures could be enhanced to further improve audit quality. According to Melanie McLaren, FRC’s Executive Director for Audit and Actuarial Regulation, “There is evidence of audit quality being of greater focus at firms’ leadership level. However, it requires more effort on the basic quality control procedures if real sustained improvement is to be achieved.” The FRC reviewed six of the largest audit firms in its review. 26 audits were selected from FTSE 100, FTSE 250 and other listed companies to look at key aspects of the audit quality control systems used by firms to support their audit teams in delivering quality audits.   Read the full report here.

Lord Jonathan Hill, Former UK EU Commissioner for Financial Stability, Financial Services and the Capital Markets Union has said that the Brexit vote was not ‘an accident or a fluke’ and dismissed outright the idea of a second vote on the issue. Lord Hill was being interviewed jointly with the Irish Minister for Financial Services, Eoghan Murphy TD, in the House of Lords ahead of speaking at a Brexit Briefing in London for over 200 financial services sector attendees hosted by leading Irish law firm, Matheson. Commenting on the issue during the same interview, Minister Murphy described London as remaining strong as a financial centre and Ireland as ‘the natural location of choice’ for UK companies or companies currently using the UK as a gateway in to the European Union. On the same day that the House of Lords is debating Article 50, Lord Hill, Minister Murphy and Matheson Managing Partner Michael Jackson were interviewed about their views on Brexit, its impact on the Financial Services sector and the importance of the Irish-UK relationship post-Brexit. Lord Hill also described a shifting mood in the UK capital saying that, in his opinion "people don’t want to leave London". While businesses have to make decisions in their interest, it wouldn’t be like "a switch flicking" and the City of London wouldn’t suddenly "migrate to Paris, Frankfurt or elsewhere". Minister Murphy strongly reasserted Ireland’s commitment to the European Union in the course of the interview and stated that "London will continue to be a strong global financial services centre and that this is in the EU’s interest". He also set out the levels of investment and planning being undertaken by the Irish Government to prepare for any opportunities arising from Brexit and cited common language and legal systems, talent availability and tax and regulatory provisions as being the basis for Ireland as the "natural location of choice" for UK companies, or those based in the UK, who wanted a gateway in to the EU post-Brexit. Matheson’s Managing Partner, Michael Jackson commented on the importance of the Irish-UK relationship particularly as it relates to business to business engagement. He said that "Ireland’s approach differs from others" and it is "welcomed by the clients we talk to in London". He said that the approach was based on "partnership rather than predatory engagement". Jackson also went on to note that the two-year window to negotiate a deal once Article 50 has been triggered is less than the average time it takes for an EU Directive to pass through the legislative process – and significantly shorter than the average time it takes to negotiate international trade deals. Concluding the interview Lord Hill said that "we’ve got to get on with our life and Europe has to get on with its life" and that the quicker that happens "the better it will be for Europe, Britain and for business".

Three years after publication of the International Integrated Reporting Framework for companies to adopt a forward-looking, broader approach to their corporate reporting aligned to long-term value creation, the global coalition supporting the transition is launching a worldwide call for feedback on its implementation. The International Integrated Reporting Council (IIRC) has announced a two-month comment period aimed at businesses, investors, regulators, policy-makers and other key stakeholders. Focus groups will be held in over 10 countries around the world and public feedback is invited via a dedicated webpage. Commenting on the launch of this comment period, Richard Howitt, CEO, IIRC said: “Integrated Reporting has caught the imagination of business leaders globally – it has prompted them to change their approach not only to reporting, but also to thinking and planning for the future of their business. “We have seen 1,500 global companies adopt Integrated Reporting around the world, with its implementation already becoming mainstream in countries such as Japan and South Africa. This rapid adoption demonstrates the market view of the International <IR> Framework as a ground-breaking and beneficial tool. It’s now time for us to further assess how this tool is being used to assist the quality of the reporting, reinforce its relevance to new challenges and ensure it remains fully in tune with market needs. “Few could have anticipated that within three years, so many business leaders would turn to Integrated Reporting to manage issues such as short-termism, climate risk and loss of trust in business. We are in constant touch with practice through the globally active Integrated Reporting Business Network, technical advice to business – which we provide throughout the year – and through regular surveys and analysis of integrated reports. “This new exercise is not intended to be a review of the Framework but a specific exercise in seeking feedback – from those who prepare the reports and those who do not yet do so – so that we can all learn from experience.” Focus groups are planned for Australia, India, Italy, Japan, the Netherlands, Malaysia, Singapore, Spain, the UK and the United States with other locations to be announced in due course. Feedback can also be submitted online via the IIRC’s website. Feedback is requested by 30 April 2017.