Dr Annette Clancy explains why the granting or withholding of control over employees’ working conditions has a knock-on effect on their physical and mental wellbeing. Do you go to work in an office? Or, perhaps you sit behind a desk in a large space divided up into cubicles. Do you have a large desk or a small one? Is there a window in your office? Or, perhaps an air conditioning unit? Do you display photographs of your family or does management supply posters with pithy quotes such as “the only way to guarantee failure is to never try”? You might wonder why these questions matter, but in recent years psychologists have become interested in why some office  designs make workers happy and others do not. Organisational psychologists are increasingly interested in how work environments affect performance. Research suggests that the size of our desks, how we decorate our workspace and the amount of privacy we have or, if we have a desk at all, contribute to contentment, comfort and productivity. Office optimisation Office design is not a new concept. In the early 20th century, an American engineer named Frederick Taylor conducted a study of efficiency at the Bethlehem Iron and Steel Company. His published study, The Principles of Scientific Management, has become so influential in management studies that it is still widely practised and cited today. He invented the concepts of piece rates, assembly lines and time and motion studies. He was also a proponent of optimising workplaces for efficiency – extraneous equipment, people and furniture had to be moved out of the manufacturing or work area in order to achieve maximum productivity. These principles have been adopted for today’s work environment, in which large spaces can be quickly reorganised by partitions into cubicles or dispensed with completely through hot-desk systems. In 2010, two researchers at the University of Exeter – Alex Haslam and Craig Knight – became interested in office design. They focused specifically on cubicles, investigating how much freedom workers had to design their own spaces and whether the look of the cubicle influenced the work that got done. To conduct the research, they designed four different layouts and asked people to do an hour’s worth of work in each. The layouts were as follows: The first was the ‘lean’ office – a spartan space with a bare desk, swivel chair, pencil and paper; The second was ‘enriched’, which had all of the basics and was decorated with plants and art; The third was ‘empowered’, in which people could rearrange the plants and art any way they wished; and The fourth was ‘disempowered’, in which the respondents were allowed to decorate, and then researchers undid all the personal touches. Office customisation The findings from the research are interesting. A pleasant work environment is important, but on its own it is not enough. People in the ‘enriched’ office worked about 15% faster than those in the ‘lean’ office. Productivity and wellbeing increased by about 30% in the workspaces that people customised themselves. When people’s choices were overridden (in the disempowered office), their performance and wellbeing dropped to the same levels as those in the lean office. The findings from the study show that autonomy to customise the work environment is even more important than the physical environment itself. The bigger issue highlighted in the study is one of control. Granting or withholding control over employees’ working conditions has a knock-on effect on the physical and mental wellbeing of employees. Whether it is shared offices, cubicles or hot-desking, what appears to be a simple exercise in space-saving or cost reduction may also result in productivity issues if not considered collaboratively with employees. Dr Annette Clancy is Assistant Professor at UCD School of Art, History and Cultural Policy. Annette’s research focuses on emotions in organisations.

Visualisation tools and techniques can help Chartered Accountants unlock the value in a company’s data. By Richard Day and Alannah Comerford Excel has been the tool of choice for Chartered Accountants for the last two decades. While it has served us well so far, the capabilities of newer tools and the proliferation of data requires us all to look beyond our love/hate relationship with Excel. We have all experienced Excel hell in the form of crashing spreadsheets, combing through countless rows of data in the search for an anomaly or the seemingly endless wait to refresh pivots or charts created on large datasets for management reporting. The importance of data and the vital part it plays in the role of a modern-day accountant has been recognised by Chartered Accountants Ireland through the inclusion of data analytics in the new FAE syllabus. This is an acknowledgement that engagement with data is essential if Chartered Accountants are to keep pace with technological advancements in business. It also ensures that accountants maintain their central role in the business community. This syllabus will bring the new crop of qualified Chartered Accountants into contact with Tableau, Alteryx and UiPath. It is fitting that this series of articles begins with the visualisation opportunities provided by tools such as Tableau. Beyond Excel Companies are gathering more data than before, and the need to consume and analyse this data is changing the business landscape. As a result, accountants need to adapt. Proficiency in Excel is no longer enough to derive value from data. The concept of data visualisation has the power to overcome some of the challenges in handling large volumes of data and can have a transformative effect when applied successfully. Many accountants fear that data analytics and visualisation are relevant only to IT or data professionals, and that advanced technical skills are required. This is not the case. Many of the market-leading tools are user-centric to allow citizen-led development. The interface is easy to understand and there is a large library of default charts, allowing users to quickly develop interactive dashboards. Data visualisation tools make possible, with a few clicks of a mouse, what previously would have required advanced knowledge of coding in Excel. A relatively modest amount of digital upskilling and time commitment can unlock significant gains. A game-changer There are countless benefits to using data visualisation, but it essentially facilitates the focused and targeted analysis of information by allowing the user to customise what they see. The power of data visualisation is such that a user can create an analysis using a simple dataset – a list of invoices, for example – and visualise this information using any attribute present in the data. One could view the data by period, day, product, customer, approver, or any other characteristic present. Some of this is possible in Excel, using charts or your favourite pivot table. The difference with using a visualisation tool is that if you pick a specific period or approver, for example, all of the other data as visualised would update dynamically to show the information for that period or approver. The knock-on effect is that unusual trends or items tend to be relatively easy to find. In a data-rich world with countless reports, where we may not know specifically what we’re looking for, these analyses really do change the game. Unlocking value Data visualisation can be used to re-invent management reporting and capture insights visually, thereby enhancing the stakeholder experience. It also brings the benefit of repeatability, allowing delivery of reports in a consistent and efficient way using template dashboards that are refreshed with new data. Interactive dashboards provide the ability to drill down into the data and facilitate root cause analysis. From an audit perspective, it has a clear use in enabling full populations rather than sample-based approach to testing. It also allows the user to generate insights and take a more proactive role in suggesting meaningful improvements or courses of action. Chartered Accountants are valued in the workplace as problem-solvers with an ability to analyse business problems and produce effective solutions; this can now be achieved through visualisation using a data-led approach. While visualisations can unlock the value in a company’s data, the quality of a dashboard is only as good as the data used to create it. An awareness of data quality and data governance is therefore essential, and this should align well to the skills and training of Chartered Accountants.   Richard Day is Partner, Data Analytics & Assurance, at PwC Ireland. Alannah Comerford is Senior Manager, Data Analytics & Assurance, at PwC Ireland.

Michael Kavanagh summarises the key points in ESMA’s recently published statement on European common enforcement priorities for 2019 IFRS financial statements. As we reach the end of 2019, it is timely that the European Securities and Markets Authority (ESMA) has issued its annual public statement highlighting the common areas that European national accounting enforcers will focus on when reviewing listed companies’ 2019 IFRS financial statements. Why should I care? Financial reporting plays an essential role in securing and maintaining investors’ confidence in financial markets. Effective financial reporting depends on appropriate and consistent enforcement of high-quality financial reporting standards. Within the EU, individual national accounting enforcers – such as the Irish Auditing and Accounting Supervisory Authority (IAASA) in Ireland and the Financial Reporting Council (FRC) in the UK – enforce financial reporting standards. European accounting enforcers are required to include ESMA topics in their examination of companies’ 2019 year-end financial statements. As such, the ESMA statement is essential reading for those within the remit of an EU accounting enforcement regime. It will also be of interest to others involved in any aspect of financial reporting. The priorities The common enforcement priorities related to 2019 IFRS financial statements include: Specific issues related to IFRS 16 Leases, especially the need to exercise significant judgement in its application, particularly in determining the lease term and the discount rate; Specific issues related to the application of IFRS 9 Financial Instruments for credit institutions relating to expected credit losses and assessing a significant increase in credit risk, and IFRS 15 Revenue from Contracts with Customers for corporate issuers, which should be in focus when revenue recognition is subject to significant assumptions and judgements; and The application of IAS 12 Income Taxes regarding deferred tax assets arising from unused tax losses (including the application of IFRIC 23 Uncertainty over Income Tax Treatments). The statement also highlights topics related to other parts of the annual report outside the financial statements. These include key non-financial information issues and alternative performance measures (APMs), the new European Single Reporting Format (ESEF) and disclosures around Brexit. Application of IFRS 16 Leases 2019 is the first year in which all entities mandatorily apply IFRS 16. To foster its consistent application, ESMA recommends that issuers monitor the discussions at the IFRS Interpretations Committee (IFRS IC) closely and highlights some of the recent IFRS IC agenda decisions. ESMA encourages issuers to assess whether these decisions have any impact on their application of IFRS 16 and, where applicable and relevant, provide specific information in their accounting policies, increase the level of transparency of the significant judgements made, and/or disclose the potential impacts. The statement goes on to discuss recent IFRS IC tentative decisions and discussions on lease terms and discount rates, and the impact they may have on financial reporting. ESMA also outlines its expectations concerning presentation and disclosure aspects of IFRS 16. The statement outlines that disclosable judgements may include, in particular, determining the lease liability (e.g. lease term, the discount rate used) as well as assessing whether a contract meets the definition of a lease under IFRS 16. Application of IFRS 15 and IFRS 9 The 2018 financial period was the first time IFRS 15 and IFRS 9 became applicable. IFRS 15 Revenue from Contracts with Customers led to major changes in the methodology used by companies in recognising revenue. ESMA states clearly that, in its view, the disclosures provided by entities need to be further improved. This is of importance in industries where revenue recognition is subject to significant assumptions and judgements. In particular, ESMA feels that: The disclosure on accounting policies needs to be detailed, entity-specific and consistent with the information provided in the other parts of the annual financial report; Financial reports should provide adequate information on the significant judgements and estimates made – such as regarding the identification of performance obligations and the timing of their satisfaction, whether the issuer is a principal or an agent under the contract, the determination of the transaction price (including the judgements related to variable consideration) and the allocation to the performance obligations identified (and notably the amount allocated to the remaining performance obligation); and Disclosure of disaggregated revenue could be improved and should take into account both their activities and the needs of users. The introduction of the new impairment model under IFRS 9 Financial Instruments had a significant impact on the financial statements of credit institutions. ESMA reiterates that the estimate of credit losses should be unbiased and probability-weighted based on a range of possible outcomes. Furthermore, this estimate should take into account forward-looking information that is reasonable, supportable and available without undue cost or effort. The statement outlines various messages around the requirements relating to the assessment of whether the credit risk has increased significantly since initial recognition, the disclosure requirements concerning the expected credit losses, disaggregation, sensitivity analysis etc. Accounting for taxation The statement provides certain messages around accounting for deferred tax assets arising from the carry-forward of unused tax losses and the application of the IFRIC 23 Uncertainty over Income Tax Treatments, which is applicable for the first time in 2019. Readers should note the recently published ESMA Public Statement on the deferred tax for such losses carried forward and ESMA’s expectation in this regard. Other matters The statement also highlights topics related to other parts of the annual report outside the financial statements. These include key non-financial information issues and APMs. ESMA also highlights the principles of materiality and completeness of disclosures, which should guide the reporting of non-financial information, including the importance of reporting information in a balanced and accessible fashion. This should include disclosures of non-financial information focusing on environmental and climate change-related matters, key performance indicators, and the use of disclosure frameworks and supply chains. Also, ESMA highlights specific aspects related to the application of the ESMA Guidelines on Alternative Performance Measures. In particular, companies are reminded of the importance of providing adequate disclosures to enable users to understand the rationale for, and usefulness of, any changes to their disclosed APMs, especially regarding changes due to the implementation of IFRS 16. New European harmonised electronic format ESMA expects issuers to take all necessary steps to comply with the new European Single Reporting Format (ESRF) for requirements that will be applicable for 2020 annual financial statements. Brexit Finally, ESMA once again highlights the importance of disclosures analysing the possible impacts of the decision of the UK to leave the EU. Conclusion ESMA and European national accounting enforcers will monitor and supervise the application of the IFRS requirements, as well as any other relevant provisions outlined in the statement, with national authorities incorporating them into their reviews and taking corrective actions where appropriate. ESMA will collect data on how EU-listed entities have applied the priorities and will report on findings regarding these priorities in its report on the 2020 enforcement activities. The ESMA public statement is available at www.esma.europa.eu   Michael Kavanagh is CEO of the Association of Compliance Officers in Ireland (ACOI) and a member of the Consultative Working Group, which advises the European Securities and Markets Authority’s Corporate Reporting Standing Committee.

In this era of multi-GAAP, it was particularly useful for Irish accountants to hear the latest from both the FRC and the IASB. By Terry O'Rourke & Barbara McCormack Chartered Accountants Ireland recently hosted presentations by representatives from the UK Financial Reporting Council (FRC) and the International Accounting Standards Board (IASB) on current developments in their respective accounting standards – UK/Irish GAAP and IFRS. Given that Irish and EU listed groups are required to use IFRS, and many other Irish companies (particularly Irish subsidiaries of EU listed groups), also do so, while most other Irish companies use UK/Irish GAAP as required by Irish company law, these developments will affect a significant number of Irish accountants. The FRC presenters were Anthony Appleton, Director of Accounting and Reporting Policy; Jenny Carter, Director of UK Accounting Standards; and Phil Fitz-Gerald, Director of the Financial Reporting Lab. The IASB presenter was Board member, Gary Kabureck. FRC and UK/Irish GAAP The FRC presentation reminded us of the most recent overhaul of the accounting aspects of FRS 102, which is mandatory for 2019 but was permitted to be adopted in advance of 2019. The main changes made by the FRC to FRS 102 in that Triennial Review arose from requests by stakeholders for simplifications and clarifications in several areas. The areas amended are set out in Table 1. Unsurprisingly, two of the main changes resulted in a relaxation of accounting for loans and financial instruments as these were aspects of FRS 102 that many companies, particularly SMEs, found quite challenging. The FRC noted too that FRS 102 and FRS 105 had also been amended to reflect the enactment in Irish company law of the small and micro companies regimes for financial reporting respectively. The FRC confirmed that the question of whether the more recent IFRS Standards should be incorporated into UK/Irish GAAP will be a topic for future consideration but is not on the immediate agenda. FRC monitoring of compliance with relevant regulatory reporting requirements In addition to its role as the accounting standard setter for both the UK and the Republic of Ireland, the FRC also monitors the financial statements of UK listed companies for compliance with relevant regulatory reporting requirements, including IFRS and UK GAAP, and engages with UK companies when it identifies concerns in this regard. Accordingly, the FRC presentation included pointers on the areas of most frequent concern in the reports of IFRS reporters identified by the FRC in this monitoring activity. These areas are set out in Table 2. It is notable that the top two areas relate to narrative aspects of the annual report – the information provided on judgments and estimates underlying the financial statements, and the strategic report provided by the board of directors. The FRC noted that a greater level of sensitivity analysis was desirable in providing adequate information on accounting estimates. Alternative Performance Measures (APMs) was the next area of concern and, as noted later in this article, the IASB plans to introduce greater discipline in relation to the inclusion of non-GAAP numbers by management. Impairment of assets continued to be a concern, as did accounting for income taxes. The FRC presentation noted basic errors in cash flow statements, often tending to overstate the amount of cash generated by the entity’s operating activities. In relation to the use by companies of reverse factoring or supplier finance, the FRC noted that insufficient detail and explanations were provided on this source of finance. The FRC also noted inconsistencies between the information provided by the directors in the front half of the annual report and the financial information provided in the financial statements. The FRC also reviewed compliance with the more recent IFRS Standards, IFRS 9 with its expected loss approach to loan impairment and IFRS 15 on revenue recognition. The FRC considered there was generally high-quality disclosure on impairment among the larger banks with a more mixed level of information being provided by non-banking corporates. On IFRS 15, the FRC found disclosure generally good, but with some accounting policy descriptions not sufficiently specific and often not easily matched to discussions of activity in the narrative reports. For 2019, compliance with IFRS 16 and the inclusion of all leases on the balance sheet for the first time is the main new challenge for many IFRS users. The FRC examined a number of 2019 interim accounts for the transitional disclosures on IFRS 16. Among the weaknesses it identified was a need for clearer descriptions of the key judgments made and better reconciliations of IFRS 16 lease liabilities and the previous IAS 17 operating lease commitments information. The FRC also suggested that care is needed in discussing year-on-year performance where prior year lease numbers have not been fully restated. Brexit and IFRS In relation to the accounting standards to be used by UK listed companies after Brexit, the FRC explained that the existing IFRS Standards would continue to be used and any new or amended IFRS Standards would be considered for adoption in the UK by a new UK Endorsement Board, using criteria very similar to those used by the EU for endorsing IFRS. FRC Financial Reporting Lab The FRC took the opportunity to outline the work of its Financial Reporting Lab, as this is an area of relatively less awareness in Ireland. The Lab was launched in 2011 and aims to help improve the effectiveness of corporate reporting. It is intended to provide a safe environment for companies and investors to work on improving disclosure issues. Areas on which the Lab had previously issued reports include business model reporting and risk and viability reporting. It recently issued a report on climate-related corporate reporting and is currently working on a workforce reporting project, looking particularly at the information companies might provide to show how the board is engaging with these critical areas. The FRC encouraged interested executives to look out for calls to participate or indeed, to contact the Lab for a discussion on its activities. The FRC reminded us of the requirements of the EU Regulation that most listed companies in the EU will be required to make their annual financial reports available in xHTML from 2021, with annual financial reports containing consolidated IFRS financial statements needing to be marked up using XBRL tags. The relevant EU Regulation is the European Single Electronic Format (ESEF) Regulation. IASB presentation Primary financial statements project The IASB presenter explained that a key issue being considered in this project relates to the statements of financial performance, particularly the income statement/profit and loss account, having regard to the concerns expressed by users and the possible means of remedying those concerns. First, users consider that the statements of financial performance are not sufficiently comparable between different companies. The IASB will propose the introduction of required and defined subtotals in those statements. The proposed changes would also provide users with more precise information through a better disaggregation of income and expenses. Users also consider that non-GAAP measures such as adjusted profit can provide useful company-specific information, but their transparency and discipline need to be improved. The IASB will propose specific disclosures on Management Performance Measures (MPMs), including a reconciliation to the relevant IFRS measure. MPMs are those that complement IFRS-defined totals or subtotals, and that management consider communicate the entity’s performance. These proposals will also require MPMs presented to be those that are used by the entity in communications with users outside the financial statements and that they must faithfully represent the financial performance of the entity to users. Goodwill and impairment The IASB has been exploring whether companies can provide more useful information about business combinations in order to enable users to hold management to account for their acquisition decisions at a reasonable cost. Users have commented that the information provided about the subsequent performance of acquisitions is inadequate, that goodwill impairments are often recognised too late, and that reintroducing amortisation should be considered. Preparers contend that impairment tests are costly and complex, and that the requirement to identify and measure separate intangible assets can be challenging. The IASB plans to issue a discussion paper in the coming months. Its tentative views to date are that amortisation should not be introduced, that it is not feasible to make impairment tests significantly more effective, and that separately identifiable intangible assets should continue to be recognised. However, the IASB considers that additional disclosures should be required about acquisitions and their subsequent performance, and that an amount for total equity before goodwill should be presented. It may also propose some simplifications in impairment testing. IBOR reform The IASB noted that it recently finalised a revision to IFRS 9 and IAS 39 on the potential discontinuance of interest rate benchmarks (IBOR reform) in order to facilitate the continuation of hedge accounting. (The FRC also plans to amend UK/Irish GAAP in this regard.) Amendments to IFRS 17 Insurance Contracts The IASB has proposed amendments to IFRS 17, particularly a one-year deferral of its effective date to 2022, as well as amendments to respond to concerns and challenges raised by stakeholders as IFRS 17 is being implemented. Other topics The IASB has taken on board the concerns raised about its discussion paper on accounting for financial instruments with characteristics of equity, and is considering refocusing that project to clarify aspects of IAS 32 as well as providing examples on applying the debt and equity classification principles of IAS 32. Given the diversity of views on how deferred tax relating to leases and decommissioning obligations should be accounted for, and the potential increase in differences arising due to the inclusion of all leases on the balance sheet under IFRS 16, the IASB has issued an exposure draft proposing to amend IAS 12. The IASB plans to respond to the absence of IFRS requirements on accounting for business combinations under common control by issuing a discussion paper in 2020, probably specifying a form of predecessor accounting. Conclusion A key feature of the presentations by both the FRC and the IASB on amendments to their accounting standards was the level of diligence applied by both standard setters in listening to the views and concerns of their various stakeholders and considering the most balanced and appropriate response to those concerns. This emphasis by the accounting standard setters on carefully considering the views of stakeholders while developing high-quality accounting standards is most reassuring and bodes well for the future of accounting standards. Terry O’Rourke FCA is Chairperson of the Accounting Committee of Chartered Accountants Ireland. Barbara McCormack FCA is Manager, Advocacy and Voice, at Chartered Accountants Ireland. 

Martina Keane explains how new technologies are helping auditors work better, smarter and faster than ever before. New technologies have always changed the way that companies do business, exposing them to new risks and opportunities. Not so long ago, the auditor’s role involved scrutinising stacks of ledgers and communicating by fax or post. Yet today, we are moving towards digital reporting and a paperless profession. When I started my career, the use of robots in the workplace would have seemed like science fiction. Now robotic process automation (RPA) – the use of software robots to simplify business process delivery – is widely used in our clients’ businesses and within the audit process itself. These changes have altered how we work, how we audit and the skills we need to recruit for. What’s different about the next wave of innovation is the growing sophistication of technology, the proliferation of data and the escalating pace and appetite for change. If futurists such as Ray Kurzweil and Gerd Leonhard are correct, we can expect to witness more change in the next 20 years than in the previous 300. For auditors, new technologies, tools and techniques are helping us to work better, smarter and faster than ever before. Our ability to capture and mine data more effectively allows us to provide more depth of challenge, richer insights and even greater levels of assurance within an increasingly complex world.  Data analytics has transformed audits across the financial services industry, allowing audit professionals to analyse larger or even entire datasets. Testing data across a full population presents a more comprehensive story than might otherwise have been achieved through sampling. This in turn leads to greater insights and a deeper understanding of our clients’ businesses, making it easier to identify risks and deliver enhanced quality. Robotic process automation RPA utilises software robots (programs) designed to replicate the actions and behaviour of a human working on a computer in a business environment. RPA is a rule-based system that executes processes without the need for constant human supervision. It can be used to automate some audit procedures that do not include judgement and are data intensive, repetitive in nature, high frequency and rule driven. The main benefits of RPA are that it reduces the time spent by the audit team on repetitive high-volume, low-risk audit procedures, thereby allowing them to focus on areas that really matter. It also helps to eliminate human error and reduce the administrative burden for both clients and audit teams due to fewer data and evidence requests. Data analytics audit tools EY has developed a global suite of data analytics tools, which are quickly becoming an integral element in the delivery of audits. Along with general ledger analysers, a suite of industry-specific technology solutions has been developed to support our financial services clients. Within Asset Management, for example, EY’s pioneering global data analytics platform captures data from multiple clients and sources (regardless of the geography of the underlying systems). Once data has been captured, it is then transformed within the platform into a standardised data format. This in turn enables a large-scale automation process that produces an audit-ready suite of work papers and client dashboards. Meanwhile, across our banking and insurance clients, a variety of analysers support the audit of mortgages, consumer loans, corporate loans, investments and claims. In many cases, this has allowed EY to embed predictive analytics within its audits. The ability to deploy data analytics tools on larger populations of data provides greater confidence in financial reporting, revealing more patterns and trends in clients’ financial data. Analysis of larger or full populations of audit-relevant data presents a fuller picture of the business activities and helps direct our investigative effort in the right areas, while relevant feedback and insights help clients improve their business processes and controls. Artificial intelligence and the audit of financial services EY is beginning to embed emerging technologies such as artificial intelligence (AI) in the audit process. Seen as the next big disruptor, AI tools provide consistent reasoning with high precision, objectivity and accuracy. When applied to the audit, the chances of human error are decreased while quality and value are increased. AI covers a range of technologies including data mining, speech/image recognition and machine learning. These technologies — particularly machine learning — enhance the audit by allowing us to analyse data with advanced pattern recognition, identifying exceptions and anomalies. Machine learning can be used to assess the internal control framework and data integrity relating to trading activity and related income. It helps us understand transaction statistics, assess data quality in front office systems and perform a critical review of key processes and controls. It can also be used to automatically code accounting entries and detect anomalies in journal entries, analyse a larger number of payment transactions, lending contracts and invoices, which in turn improves fraud detection. Deep learning technology – a form of AI that can analyse unstructured data including emails, social media posts and conference call audio files – is also impacting the audit. Mining this data provides supplementary audit evidence on a scale that was impossible to gather in the past. New skills  The impact of these new technologies will change much more than the way we audit. To fully harness the power of this next wave of innovation, we must rethink the skills we require from the next generation of auditors. Traditional accounting and auditing skills will not suffice – they must be combined with a deep understanding of AI, predictive analytics, machine learning, smart automation and blockchain. These tools are all about data and, consequently, auditors must be able to interrogate that data, understand what it is telling us and use that information to enhance audit quality. As audit professionals become more proficient in utilising the technological tools at their disposal, they must also develop the ability to interpret the data and tell the data’s story. Furthermore, audit committees must understand how these tools and technologies can be used to enhance transparency, minimise risk and provide unrivalled insights. They need to ask the right questions and have the necessary knowledge to understand the answers. Soft skills are increasingly important, too. As automation removes labour-intensive, routine tasks like account reconciliation and report generation, audit professionals can instead focus on providing insights into company performance, devoting more time to shaping business strategy and providing added value. By combining a more strategic approach with the traditional values of our profession – integrity, independence and professional scepticism – we can expect the role of audit professionals to evolve to that of a trusted business advisor. Interpersonal and influencing skills will be critical to such a business partner-style approach. As the business landscape continues to transform, the auditor of the future will be increasingly required to look beyond the numbers and provide a clear and concise narrative for clients, the audit team, audit committees and other stakeholders. Martina Keane FCA is Head of Assurance at EY Financial Services.

Níall Fitzgerald explains how to achieve consensus, do your duty, and be yourself as a charity or non-profit trustee. There is something exceptional about those who volunteer their time, skill and expertise to a board, or sub-committee, for the benefit of a cause they feel passionate about. As Nelson Mandela put it, “there can be no greater gift than that of giving one’s time and energy to help others without expecting anything in return”. But being a board or sub-committee member (trustee) for a charity or not-for-profit organisation is not without its challenges. These challenges can present themselves around the board table in the form of disagreement or frustration as you strive to get things done. People skills and leadership skills will be called on in order to listen effectively and convey concern, constructively challenge and support the ideas of other trustees in order to achieve consensus. Difficult dilemmas Achieving consensus is not always easy, especially when resource constraints (financial or otherwise) impact the organisation’s ability to realise its strategic objectives. Difficult dilemmas can be tabled at board meetings, which can present challenges for the organisation and test the core values that compelled each trustee to volunteer in the first place. A classic example involves proposals to suspend services in one area to the detriment of some beneficiaries in order to ensure continuity in another. An avalanche of conflicting priorities around the board table can result in an impasse. Challenges like these can make a trustee grateful for a good governance framework. Such a framework can provide clarity on their duties and responsibilities to the organisation, including the various stakeholders it serves. There can be comfort in understanding the policies and procedures that ensure the collation and adequate flow of accurate information from the front-line service providers (both staff and volunteers) and senior management to the board. Such information results in better decision-making that is in the best interests of the organisation as opposed to any individual or group of trustees. Such a framework will also provide a welcome format for effective and well-chaired discussion at the board, and ensure that the right level of diversity, skills and expertise are enabled to inform the decision-making process. Rule of law But what about the rule of law regarding the trustee’s duties and responsibilities? An understanding of these rules will help channel a thought process towards what is important for the organisation. A trustee does not need a law degree to understand these requirements. Rather than feel overwhelmed, it is useful to first understand the organisation (including its vision, mission and values), its legal structure (e.g. company, trust, unincorporated etc.) and the area within which it operates. This process will highlight the laws and regulations that are most relevant for consideration. Figure 1 illustrates the types of legal and regulatory duties that apply to trustees. Notice that some overlap and they have a common design to ensure that the organisation is always the focus of consideration. Being involved as a trustee can be the gift that keeps on giving for the individual and the organisation. Challenges present opportunities for trustees to exercise values, apply skills, provide expertise, assess problems and inform decisions in a different way – for example, through the lens of life-changing consequences. A good governance framework and adherence to the rule of law will provide another useful lens to guide, rather than impede, trustees towards consensus on trickier dilemmas.