A successful flotation is a major milestone for any ambitious company but the path to IPO-readiness is paved with challenges and careful preparation is crucial, write Ciara O’Callaghan Crehan and Eimear McDermott The public markets are a bellwether for economic confidence at any point in time and we have witnessed a challenging period for equity performance and new issuances recently.  While the public markets offer just one source of potential funding for a business, an Initial Public Offering (IPO) is seen by many as a particularly significant milestone for promising businesses and IPO activity as an indicator of wider economic health.  There are numerous reasons why companies may want to list on a stock exchange. These include access to a new pool of capital to help take them to the next level, enhanced profile and prestige, a clearly defined business valuation and a route to exit for founders and shareholders. Raising capital through the public markets takes time and lots of preparation, however, particularly in a period of prolonged economic uncertainty.  Current IPO market conditions The current IPO drought has persisted for more than 18 months, but this doesn’t mean pre-IPO companies should be inactive. Rather, we would suggest taking advantage of the current lull to prepare now for a public offering further down the line. Already, we are starting to see the first green shoots of recovery. The third quarter of 2023 produced 36 IPOs that raised a combined total of about $8 billion. This was the same amount of proceeds raised for the full year in 2022 and was led by the largest tech offering in years, ARM, which raised approximately $4.9 billion. In particular, we are seeing a growing number of large corporates opting to consolidate their market listings on – or undertake a general move to – US markets. While this is not good news for stock exchanges in Ireland or Europe, it demonstrates the continued dominance of the US capital markets for access to funding.  The next wave of IPOs will be led by those companies that do the hard work of preparation today, readying themselves for amplified scrutiny and accountability and working to make the necessary corrections big and small. Choosing the right stock exchange Many factors play into the decision on where to list a company, including: Access to capital, which is critical – in many cases companies will decide to list on multiple exchanges to broaden their investor base; Market visibility and the reputation of the exchange, which may be known for a particular focus area; Liquidity and trading volumes; Regulatory requirements, which differ significantly across markets – the US capital markets are the most onerous from a compliance perspective but are more attractive to many stakeholders, from suppliers to employees and particularly to investors; and Expansion into new markets and peer group comparison. What it takes for a successful IPO  Any successful IPO needs a compelling equity story. In the current environment, IPO candidates need to be able to demonstrate a resilient trading performance and compelling strategy for future growth to tempt investors.  It is also important that the valuation expectation is reasonable. With a particular focus on the US market, some of the key steps in a successful IPO journey include: Ensuring you have a first-class management team and advisors; Getting your IT systems and control environment in order; Improving your financial reporting and getting audit-ready; Addressing change through a people-centric transformation programme; and Addressing environmental, social and governance-related performance and strategy upfront. It’s a team game The path to becoming a public company depends on a coordinated team effort by management and external advisors. In our experience, which spans both sides, we believe there are several critical ingredients to success: An experienced management team, ideally with some IPO experience that can build a strong equity story during the roadshow; External advisors with IPO credentials, contacts and industry experience; and A structured transformation of the people, processes (with a particular focus on technology) and culture of the company. IT capacity and controls Companies should not overlook or underestimate the ‘heavy lift’ needed for readying their IT systems ahead of a planned IPO. Some of the IT systems and tools commonly used by private companies in many cases cannot scale to meet the technology requirements of a public company.  Many companies face fundamental challenges in understanding their existing IT landscape and the interdependencies that exist between the different elements therein.  This is particularly important because you cannot expect to achieve a robust internal control framework for financial reporting without a strong partnership between the IT and finance teams.  It takes a coordinated approach – with informed, experienced leadership – to break down silos and ensure that everyone is speaking the same language. Getting the governance right at the outset is a prerequisite for successfully establishing and embedding your control framework. Companies that have not historically invested in technology and tools for financial reporting and business operations might struggle with the limitations of their existing technology if this is not addressed as a priority at the outset.  Assessing IT across people, processes and systems is critical. Taking a risk-based approach – and strategically sequencing your transformation initiatives – is equally important.  Early in the preparation phase is the time to get the fundamentals right, and to ensure that each step of your transformation is aligned to your IPO target state.  Companies should be incorporating audit and control requirements into their procurement decisions when looking at investment, alongside business, information security and other assessment criteria.  Financial reporting and audit The level of auditor scrutiny on public companies is high and ever-increasing. Therefore, getting your company’s historical accounting and controls in order is essential pre-IPO.  As already mentioned, it is critical to have the right technology in place here alongside the right people – and to give them sufficient lead time to do the work needed. In preparing for the rigours of an IPO, an auditor may have to re-audit parts of prior years’ accounts and update procedures to meet the higher standards expected of a public company. They will likely have to update controls and processes and document all key controls.  It is an arduous process and one that cannot be rushed. Early engagement with the audit team is important.  In our experience, bringing your auditor into the fold at agreed milestones can be hugely valuable in ensuring continuous alignment and avoiding any unexpected curveballs as you navigate the IPO journey. Tailored people-centric approach An IPO journey will have its challenges. It requires major transformation involving upgrading technology, improving financial reporting processes and implementing governance, risk and compliance capability. All are critical.  So too is a people strategy that sets out the vision for a collaborative and supportive post-IPO culture incorporating diversity, equity and inclusion as well as helping to guide how the business plans to achieve its environmental, social and governance (ESG) goals.  And finally, ESG As ESG continues to gain momentum, it is becoming a fundamental consideration for companies making strategic decisions in areas including funding.  Integrating ESG reporting into the equity story has become key for investors and, consequently, it is an increasingly important aspect of the IPO readiness plan for issuers.  This is especially true in Europe where regulatory requirements for listed companies will become mandatory as the European Union’s Corporate Sustainability Reporting Directive (CSRD) comes into effect. An ESG strategy is now a must-have for any company considering an IPO.  Becoming a public company and raising funding on the capital markets has always required lots of work and preparation.  Alongside a company’s equity story, financials and governance, there is now a broader focus on technology, culture and people strategy as well as ESG commitments and performance. The current market lull could provide just the ‘pause’ some companies need to prepare thoroughly for a successful flotation and future growth.  Ciara O’Callaghan Crehan and Eimear McDermott are co-founders and directors of Odyssey Consultants, a boutique risk and management consultancy for helping companies at all stage of their journey reach new horizons

Jonathan Wilson talks us through his career from his training in Belfast in the nineties through to his current role as Managing Director, Chief Internal Auditor with Barclays Europe In the 30 years since he began his training contract in 1993 with BDO Stoy Hayward in Belfast, Jonathan Wilson has carved out an accomplished career in internal audit in banks ranging from National Australia Bank and Danske to NatWest and now Barclays. Here, he tells Accountancy Ireland why he chose to specialise in audit and the decisions, opportunities and lessons that have helped him progress his career to date. Do you remember when and why you decided to train as a Chartered Accountant? When I was ten or 11, it seemed like all the kids around me wanted to be pilots or astronauts. I wanted to be an accountant. My uncle was an accountant, and I had a genuine interest in business – in particular, business performance – from a young age.  That’s why, when I finished at Methodist College in Belfast, I chose to study economics at Queen’s and, from there, to join BDO Stoy Hayward in 1993 to train as a Chartered Accountant. I got great training with really broad experience and, at an early stage, decided I wanted a career in industry rather than practice.  I started to focus on internal audit and risk management and joined Northern Bank in Belfast as a Senior Auditor in 1999.  Because National Australia Bank owned Northern Bank at that time, I got the opportunity to move to Melbourne in 2002 as a Senior Audit Manager working across areas ranging from corporate banking to retail services, finance and risk. That role also allowed me to work in New Zealand and in Asia and, when Northern Bank was taken over by Danske Bank in Ireland, I was asked to come back to help manage the transition as its Head of Internal Audit in the North and south. After five years, I was given responsibility for Danske Banks’ Internal Audit in new markets including Sweden, Norway, Finland, Russia, Poland and the Baltics. I then had a brief period as Group Chief Auditor with the Irish Bank Resolution Corporation followed by 18 months as Head of Audit with AIB. I joined NatWest as Chief Auditor in 2014 and started in my current role with Barclays in January 2023.  Are you glad you decided to qualify as a Chartered Accountant? Has the qualification helped or hindered your career? Being a Chartered Accountant can open up so many professional opportunities. You need a lot of discipline, patience and perseverance to earn the qualification in the first place and this experience has helped me enormously in my career since. Chartered Accountants can work in a really broad range of environments – from all kinds of businesses to practice or the public sector – you name it. This scope has given me a strong grounding in understanding how business works, not just from a financial point of view, but also in a broader sense. Tell us about your current role as Chief Internal Auditor with Barclays Europe. When I joined Barclays, it had been in Ireland for more than 30 years, but it was facing a new set of very exciting opportunities in the wake of the Brexit vote.  I now lead a very experienced team of audit professionals based in Dublin, Paris and Frankfurt. The organisation is incredibly diverse, not just geographically but also in terms of the people I work with every day. I am ultimately responsible for the quality of the assurance work our team provides and I am lucky to have a team of strong directors working with me. As well as our assurance work, we are expected to add real value to the business in terms of risk management and systems of internal control. What are the biggest trends and developments you have seen in your profession and the wider market since starting out? Traditionally, auditing was very manual with lots of paper records stored in Lever Arch files and big, heavy briefcases. Audit software was only just beginning to emerge at the start of my career and it’s amazing to reflect now on how much this whole area has since evolved. Today, we are dealing with metadata and approaching the operating audit with a much greater emphasis on digital tools. Auditors nowadays need to be digitally enabled and we are also beginning to look at how we can use artificial intelligence in our work in the future. When I did my MBA with Manchester Business School, my specialist topic focused on the various financial crises we have experienced going right back to the Wall Street Crash of 1929. In the years since, the time lag between financial crises has narrowed dramatically. We used to get one every 50 years, but now we are finding ourselves in a crisis every five or ten years. I have experienced a number of these crises working in internal audit, and my international experience has given me a good perspective on how best to deal with them. Is there anything in particular you have learned in your career that has stood you in good stead? When I was with National Australian Group, Mark Martinelli was the Chief Auditor. He was a big influence on me. He taught me to ask the simple question: “If it doesn’t make sense, why doesn’t it make sense?”  We can get carried away, agonising over complex and difficult tasks and challenges. Sometimes, the best approach is to return to your key audit principles and ask this one simple question – and keep hold of it until you get the answer. Audit standards have been developed and refined over the years, but the core principles are the same today as they were when I was starting my career. Our role is about providing assurance and gathering sufficient audit evidence; it’s about our control objectives. Asking the simple questions is vital. What career advice would you offer your younger self if you had the opportunity? Don’t narrow your horizons. Keep your aspirations broad and try to work across as many different companies and countries as you can.  Also, do things you like to do and enjoy what you are doing. My son once considered a career in medicine, but he’s now an accountant – somewhat to my surprise!  When he told me he had taken a job with a film company making documentaries for Netflix, Disney and Amazon, I had some concerns given the insecure nature of the industry. Then I thought, “Actually, that sounds really exciting”. In the end, I told him to go for it – he would have anyway! I suppose my advice is that you shouldn’t make choices in your career to please anyone else. Do the things you want to do for yourself and don’t be afraid of failure. Finally, what are your career plans from here on in? I love the job I have right now. I’ve only been with Barclays for a short time and I have the ‘fuel in the tank’ to expand and develop in this role. It is a big challenge, but it’s very enjoyable. Another aspect of my career as a Chartered Accountant I find really rewarding is the scope it has given me to apply my skills volunteering as a trustee with various charities and sporting organisations.  I have done a lot of volunteering outside my ‘day job’ and my background in Chartered Accountancy has been incredibly valuable here. When eventually I am no longer working full-time, I hope to be able to continue in non-executive board positions and to continue to use my skills and experience where it may be required.

The EU Commission’s new enlargement package sets out ambitious plans for expansion but the rule of law and defence must govern any future accession negotiations, writes Judy Dempsey It was reminiscent of 1 May 2004, when the countries of Central and Eastern Europe joined the European Union (EU).  For their citizens, that day almost 20 years ago was not just a euphoric occasion, it was about returning to Europe – an aspiration that must have seemed remote while they were under the communist yoke from 1945 to 1989. Now, the opportunity for Ukraine and Moldova to join the EU is very real, following Ursula von der Leyen’s decision to unveil an ambitious enlargement package last month. The President of the European Commission announced on 8 November that the EU would open accession negotiations with Ukraine, Moldova and Bosnia and Herzegovina, while also granting Georgia candidate country status.  It will take several years for these countries to join the EU. Leaving aside how the war in Ukraine might end, significant issues will need to be addressed in all four: corruption, the role of the oligarchs, human trafficking and the weak independence of the judiciary, for example.  EU leaders will have to give von der Leyen’s plan the green light during their December summit.  Some will baulk at how Bosnia and Herzegovina will be able to begin accession talks despite ongoing misrule and ethnic tensions among leaders of the Serb community. Backed by Russia and its neighbour Serbia, it has long sought to have its own autonomous region. Yet, for all these problems, this next enlargement should be a chance for the EU to tackle two big issues that undermine the union’s credibility.  The first is how several countries, led by Hungary and Poland, have blatantly flouted the rule of law. For several years, Budapest and Warsaw have run roughshod over the judiciary, the media and the appointment of chief prosecutors.  Hungary’s Prime Minister Viktor Orbán has misappropriated EU funds in addition to promoting his own appointees loyal to the governing Fidesz party, to universities and other educational institutions.  And this is just the tip of the iceberg. In Poland, the judiciary, media, education and private sectors have been subject to interference from the governing conservative/nationalist party.  The Law and Justice party lost the recent parliamentary elections, however, so there is a chance that the centrist Civic Coalition party may put the country back on the path of the rule of law.   This is important for countries trying to make their way into the union.  Imagine sitting in Kyiv and seeing judges intimidated or sacked in an EU member state because they don’t toe the governing party line?  Civil society activists in Ukraine and Moldova have been campaigning for many years to root out corruption and establish a transparent court and judicial system free of state interference, lobbies and oligarchs. The second issue facing the EU is how, as a bloc, it cannot defend itself.  With the current instability along Europe’s eastern borders and its southern neighbourhood, the EU lacks the capacity to defend its citizens and provide them with the security they need and which, until now, had been provided by the NATO alliance.  Soft power takes precedence over any kind of hard power despite what is happening in Ukraine. These two issues – the rule of law and defence – are about the credibility of the EU and making the bloc ready for the next round of enlargement.  Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe

Mike Hanrahan, FCA and Chair of Sustain.Life, tells Accountancy Ireland why carbon accounting capability is becoming a must-have for suppliers to big corporations  Wexford-born Chartered Accountant Mike Hanrahan is Chair and co-founder of Sustain.Life, the innovative tech start-up behind a software-as-a-service platform that helps companies decarbonise their operations. Sustain.Life combines environmental, sustainable and governance (ESG) and carbon accounting tools so companies of all sizes can better manage and mitigate carbon emissions while also cutting costs. Based in New Jersey in the US, Hanrahan launched Sustain.Life in 2021 with co-founders Annalee Bloomfield and Patrick Campagnano, and is now gearing up to scale the company globally. Here, he talks to Accountancy Ireland about the professional path that has taken him from Ireland to London and the US, and from a career in accounting to banking and finance, e-commerce and, now, sustainable entrepreneurship. Tell us about Sustain.Life. How did the company come about?  Before I established Sustain.Life, I co-founded the e-commerce company Jet.com in the US with two guys, Marc Lore and Nate Faust.  By that stage, I had moved to the US, but before that I worked in London having trained as a Chartered Accountant with PwC in Ireland.  I started working in The City in the mid-nineties when I was in my early twenties and moved from risk management into technology, building risk and trading systems for banks. Marc Lore was my boss while I was working at Credit Suisse. He became a great mentor and, when he moved to the US to set up his first e-commerce start-up, I agreed to move over as well to work with him. We subsequently set up Jet.com together. I was the company’s Chief Technology Officer and when we sold Jet.com to Walmart in 2013, I became Chief Executive of Walmart’s Intelligent Retail Lab. That’s where I met Annalee Bloomfield and Patrick Campagnano. Annalee was Head of Product and Customer Experience and Patrick was Head of Engineering. We had all this expertise in building scalable, accessible technologies that could meet market needs and we could see the challenges Walmart’s suppliers were facing trying to adhere to its ESG standards and requirements.  We wanted to make sustainability more accessible – to democratise it – for smaller companies in the supply chain. Climate change is humanity’s greatest threat and, together, SMEs account for a significant amount of the greenhouse gas emissions contributing to climate change. We need the tools to enable more organisations to take meaningful climate action – and we need them quickly. That’s what Sustain.Life is all about. How does Sustain.Life work? How does the platform make it easier for SMEs to be more sustainable?  Big corporations like Walmart tend to have the resources they need to invest in sustainability programmes whereas SMEs don’t.  It’s much more difficult to introduce carbon accounting and climate action programmes in a small company where you have less money and fewer people. That was our starting point for Sustain.Life and the sizable market need we are addressing with the platform. Sustain.Life gives SMEs who don’t have in-house expertise the tools they need to start measuring the environmental impact of their internal operations and supply chains.  It helps them understand how to manage and reduce their emissions by introducing operational changes in areas like energy, water and waste. The platform is also designed to help them comply with reporting frameworks, even as they are evolving in different jurisdictions, and allows them to report their sustainability progress to customers, investors and employees using verifiable data.  Tell us about your interest in sustainable business, and in using technology to help combat climate change.  I have been passionate about sustainability for a long time, really since I first moved to the US in 2010. Prior to that, I hadn’t really understood some of the psychology around climate change and the power of the fossil fuel industry on people’s thinking here in the US. It was so different to what I had experienced in Europe. I found that quite a lot of people here didn’t take climate change seriously and didn’t see it as a critical threat. That was very worrying. Climate change is barrelling at us really quickly and we need to act now.  Back then, I think there was still wider optimism that climate change was a problem we could solve relatively easily. It’s not. Energy is at the heart of our entire global economy and fossil fuels power a large percentage of our energy. The threat is enormous and it is complex. We need to find solutions to electrify the global economy and that is going to take many years.  We have to invest money now and start to move very quickly if we are going to get ourselves into a position where we can stop the rot and figure out how to reduce greenhouse gas emissions through carbon capture and other means. What is the state-of-play now in the US regarding efforts to curb climate change and where does Sustain.Life fit in?  When we were starting Sustain.Life, we saw two big potential drivers in the US for a carbon accounting platform: sustainability in the supply chain and regulation, either at state or federal level. Both predictions are starting to materialise. In October, a new law was approved in California requiring big corporations with annual revenues of over $1 billion to report greenhouse gas emissions. We have also recently started to see some of the biggest Fortune 500 companies introduce new policies requiring companies in their supply chain to be able to report on, and set goals for, their own carbon emissions. Amazon, Microsoft and Costco have all now introduced these policies. We already had experience of this at Walmart, which introduced Project Gigaton back in 2017 with the aim of reducing or avoiding one billion metric tonnes of greenhouse gasses from its global value chain by 2030. When we were out raising money for Sustain.Life, we were telling the venture capitalists that smaller companies supplying the Big Fortune 500 corporations like Walmart, Amazon and Costco would be out of business within a few years if they were unable to report on their carbon emissions.  It’s wonderful to see that sea change starting to happen in reality. You launched Sustain.Life in November 2021. Tell us about the development of the business so far. The version of the platform that went live in late 2021 was our MVP. Our revenue function kicked in early in the second quarter of 2022 and that’s really when we were ready to start selling into enterprises. For most of 2022, if you were to ask me what was keeping me up at night – it was wondering if we had timed the company right. We knew companies would need this technology, but you still have those questions: Are we too early? Is this demand going to materialise as we had anticipated? Now, I feel really good about both how our product and our market is developing. We’re able to go toe-to-toe with our competitors and that’s really important because our market is extremely competitive. There are new entrants nearly every week and we’re up against big enterprise players offering solutions in this space like Microsoft and Salesforce. We come up against these guys all the time and we seem to be able to beat them out. The market opportunity is massive and we’re ready to scale. We already have US customers in sectors like food and beverage, electric vehicles and fintech. We also work a lot in the US with accounting firms. We have some great accounting partners. What is the plan now for Sustain.Life? What is your strategy for the company over the next 12 months?  Our biggest focus right now is on internationalisation and tailoring the platform for the needs of different markets. It’s a complex process because you need to be able to support different currencies and units of measurement. Calculating carbon emissions requires a lot of different data sets – but we’re ready.  Our product is mature, as is our team, so our main focus now is on sales and building strong partner channels in different markets. Our first test market will be Australia, where we already have salespeople. Once our model is bedded down there, the plan is to copy it very quickly in other markets. In Europe, a big focus for us will be the Corporate Sustainability Reporting Directive and Ireland – in particular, Ireland’s accounting sector – is very much in our sights. *Interview by Elaine O’Regan

The introduction of the Corporate Sustainability Reporting Directive marks a pivotal moment in the evolution of corporate reporting in the EU, but it will bring challenges for all involved, writes Daniel O’Donovan In an era where businesses are increasingly being scrutinised for their impact on the environment, society and their governance practices, the European Union (EU) has taken a leading role internationally by introducing the Corporate Sustainability Reporting Directive (CSRD).  The CSRD is due to be transposed into Irish law before mid-2024. Following its transposition, mandatory reporting requirements will become effective for, among others, financial years commencing on or after: 1 January 2024 for public interest entities in scope of EU non-financial reporting rules (with more than 500 employees); 1 January 2025 for other larger companies and public interest entities (with more than 250 employees); and 1 January 2026 for listed public interest SMEs, with ‘opt out’ possible until 2028. This is a pivotal moment in the evolution of corporate reporting across the EU, bringing with it significant challenges for all involved, not least for reporting entities, their audit committees and assurance providers. What are the key challenges?  While the CSRD is a welcome framework for enhancing transparency and accountability in corporate sustainability reporting – reflecting the EU’s commitment to fostering sustainable and responsible business practices – it introduces three significant challenges for business: First, the breadth of information that relevant businesses will be required to report under the 12 European Sustainability Reporting Standards (ESRS) introduced by the CSRD; Second, the need to implement the systems required to gather and record reliable sustainability data and information; and Third, the need to provide assurance over the sustainability reports required by the CSRD. Breadth of information to be reported The ESRS, developed by the European Financial Reporting Advisory Group (EFRAG), aim to enhance the consistency, comparability and reliability of sustainability reporting among European reporting entities.  The scope of the ESRS is expansive, encompassing various elements that collectively contribute to a comprehensive understanding of an organisation’s environmental, social and governance (ESG) performance.  The key components driving the breadth of information required in this reporting are the: sustainability topics;  reporting boundary; double materiality concept; and  number of datapoints for disclosure within the ESRS. Sustainability topics The ESRS require disclosures about the following topics: climate change, pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy, own workforce, workers in the value chain, affected communities, consumers and end-users, and business conduct. As can be seen from this list, these are broad topic areas. The ESRS standards for each of these topics specify further subtopics in respect of which disclosures must be given. Furthermore, in respect of each of the topics and subtopics, disclosure is required about aspects of the topics as shown in the table below.  Reporting boundary The reporting boundary required by the ESRS is in stark contrast to what reporting entities are familiar with in the context of the financial reporting boundary used to produce annual financial statements, being within the reporting entity or group. The ESRS, however, require a reporting boundary that considers the entire value chain, from suppliers to end consumers, as shown in the figure below: This inclusive perspective ensures that the environmental and social impacts of a business are accurately captured, providing stakeholders with a complete picture of the organisation’s sustainability efforts, but it places a demanding requirement on reporting entities from a data collection standpoint. Double materiality Reporting entities in scope of the CSRD will be required to report on a double materiality basis. This means that they will have to report on impacts on and risks to them from a changing climate and other ESG matters (referred to as “financial materiality” as it is consistent with what entities report in the financial statements). In addition, they will report on the impact the entity itself might have on climate and other ESG matters (referred to as “impact materiality”). When compared with reporting in the financial statements, this concept doubles the challenge for reporting entities as all ESG topics must be considered from both perspectives. Gathering and assessing information and data about the reporting entity’s impact on the breadth of ESG topics is a new frontier for corporate reporting and one that the majority in the corporate reporting ecosystem have no experience of. Datapoints for disclosure It is clear that the scope of the information to be disclosed under the ESRS is far broader than the information to be reported in the financial statements. However, to underline this, the ESRS outline specific datapoints that reporting entities should disclose to provide transparency and facilitate comparability. As recently as October, EFRAG released a draft List of ESRS datapoints – Implementation Guidance, which includes all 1,178 disclosure requirements in the sector-agnostic ESRS published to date. The datapoints are standardised metrics that allow for consistency in reporting and enable stakeholders to assess the sustainability performance of different reporting entities. For instance, in the environmental domain, entities may report on their carbon footprint, energy consumption and waste generation. Social datapoints could include diversity and inclusion metrics, employee turnover rates, and health and safety performance. This new frontier of corporate reporting will generate tangible benefits for society at large and result in greater public interest therein but will not be without data capture challenges in the near future.  Sustainability information systems Given the significance of the breadth of sustainability information to be reported, the transposition of the CSRD into Irish law will have a profound impact on the information systems of entities within its scope. Moreover, the scale of the endeavour for those entities that will be required to report in early 2025 on the calendar year ended 31 December 2024 is enormous in terms of what must be achieved within a timeframe that is less than 18 months away.  Such entities need to determine what sustainability matters are material using the double materiality concept and are therefore required to be included in their sustainability report and start gathering, collating, aggregating and sorting the data in relation to 2024, which will be reported in early 2025.  Reporting entities will need to establish or enhance integrated data systems that allow for the collection and management of sustainability data. This could involve integrating sustainability data within existing enterprise resource planning (ERP) systems to ensure data consistency and accuracy. Additionally, tools may be needed, such as a materiality assessment tool to help systematically evaluate the importance of various sustainability information.  As stakeholder engagement is a crucial part of a materiality assessment, systems or tools that can help track and manage interactions with stakeholders, ensuring that their perspectives and concerns are considered in the reporting process, will be necessary. Developing or strengthening internal controls and policies related to sustainability reporting information systems will be essential. Reporting entities will need to create processes and controls to ensure the accuracy, completeness and reliability of sustainability data, which will be sourced from all areas of the organisation and well beyond the finance function.  Reporting entities that are successful in achieving this will be better positioned to facilitate an independent assurance provider’s examination of their sustainability report. Assurance over sustainability reports Initially, the CSRD requires an independent assurance provider to express an opinion based on a limited assurance engagement as regards the compliance of the sustainability reporting with the requirements of this Directive, including compliance with the ESRS, the process carried out by the undertaking to identify the information reported pursuant to the ESRS, and compliance with the requirement to electronically tag the sustainability report. In later years, after an initial period, reasonable assurance over the sustainability report may be required. For reporting entities, facilitating a limited assurance engagement in the year of implementation of such a significant suite of sustainability reporting standards will require additional resources and does not come without the increased possibility of qualification given the complexity of the ESRS and the potential immaturity of reporting systems. The challenge for independent assurance providers is that at present no assurance standard is in existence that governs the performance of such an engagement.  The International Audit and Assurance Standards Board (IAASB) is developing a standard and has released an exposure draft – International Standard on Sustainability Assurance 5000 – that seeks to address the performance of limited and reasonable assurance engagements over sustainability information.  The exposure daft is open for comment at present and a final standard is not expected until the second half of 2024.  While the development of the standard is welcome, the timeframe is extremely tight, and it is widely acknowledged that the exposure draft does not provide sufficient clarity in relation to the performance expectation of an independent assurance practitioner when performing a limited assurance engagement compared with a reasonable assurance engagement.  In the face of such unprecedented uncertainty, independent assurance providers may struggle to deliver high quality limited assurance engagements.  Challenges ahead The rate of recent extreme weather events in Ireland and elsewhere in Europe, and their impact on supply chains, provides a clear mandate to take better care of our environment. Most people are therefore likely to welcome the intent behind the CSRD’s introduction of sustainability reporting.  Sustainability reporting by entities will be on a basis far broader than financial statements. Additional resources will be needed to address the challenges outlined in this article, but time is running out fast; the time to act on these challenges is now.  Furthermore, the successful implementation of the CSRD regime in Ireland and across the EU requires considerable pragmatism and support from policymakers, standard-setters and regulators.  The new “gold rush” in which companies will seek to lead will be a race to capture data, integrate systems and assure sustainability reports. Undoubtedly, this marks a new frontier in corporate reporting – the ESG Rush! Daniel O’Donovan is a partner with KPMG and leads the firm’s Audit and Assurance Methodology team. He is also Chair of the Chartered Accountants Ireland Assurance and Audit Technical Committee

The publication of the National Philanthropy Policy will mark an important milestone in the evolution of this type of proactive giving in Irish society With a new National Philanthropy Policy due to be published later this month, the Department of Rural and Community Development will set out plans to create an ‘enabling environment’ for philanthropy in Ireland. For Philanthropy Ireland (PI), the representative body for the sector here, the policy’s publication marks a very important milestone in the evolution and perception of this type of proactive giving in Irish society on the cusp of the New Year. PI defines philanthropy as the act of giving money, goods, time or effort to support a charitable cause, usually over an extended period of time and in regard to a defined objective. “Irish philanthropy comes in different shapes and sizes, from small community grants to men’s sheds and new mothers’ groups to larger advocacy projects with a national remit,” explains Eilis Murray, Chief Executive of Philanthropy Ireland. “No matter what it looks like, philanthropy has touched every corner of Ireland, but it is still a relatively new concept here because our wealth is relatively new.  “Irish people are generous and support many social causes, but compared to the UK and Europe, philanthropy here is underdeveloped. Greater support from the State and public awareness can change that. “For context, there are about 8,000 grant-making organisations in the UK whereas, in Ireland, there are only around 100.” For Philanthropy Ireland, which has been working with Minister Joe O’Brien and the Department of Rural and Community Development to create the new National Policy on Philanthropy, its publication will be a welcome development. “We hope it will encourage more people with wealth to give and, equally, encourage those advising them to consider the potential of philanthropic giving or leaving a legacy,” says Murray.  For Liam Lynch, Tax Partner with KPMG and past President of Chartered Accountants Ireland, one of the biggest benefits of philanthropy is its potential to bring about positive change with real and lasting social impact. “Philanthropy provides the critical risk capital for projects and initiatives that benefit society and improve opportunities and outcomes for those who are disadvantaged in various ways,” Lynch says. “Some people are of the view that philanthropy shouldn’t exist and, instead, the State should administer all the money needed to fund good causes through the tax system. I don’t agree.  “There is a point of view and perspective philanthropy brings to the table that promotes innovation in a way the State and local government are just not set up to do. “There are services the State should be providing as standard to support social good. Philanthropy is about building on this in a strategic, outcome-driven way that can have a very positive impact on society.” For those who decide to become involved in philanthropic giving, it is often a deeply personal endeavour and one that reflects their personal convictions and values, according to PI. “Philanthropy can make a difference in so many areas, from tackling educational disadvantage and supporting employment opportunities, to health-focused initiatives – mental health, children’s or older people’s health, for example,” says Lynch. “Philanthropic giving can go towards promoting sustainability and the environment or protecting Irish culture and the arts. This is just the tip of the iceberg. The potential is enormous.  “That is why I would like to see more awareness and discussion of philanthropy, and philanthropists, in Ireland. I think we are generally very aware of the role of philanthropy internationally.  “My question is, why don’t we celebrate our own philanthropists as much and make a concerted effort to recognise the goodwill they are putting into doing good in society?” Frank Gannon – Lynch’s colleague at KPMG Ireland and a Partner in the firm’s Financial Services Group – sees similar benefits in philanthropic giving.  “For me, philanthropy means fulfilling the wish to give something meaningful to those who will benefit,” he explains. “Many people associate philanthropy with monetary donations, but there is much more to it than that.” Chartered Accountants Ireland’s members and trainees are well-placed to get involved in different types of philanthropic giving, Gannon says.  “Our members and trainees have all been educated to a certain level. Sharing our knowledge, information and know-how with those who have not had the same opportunities – and, in particular, those in socially deprived areas – can be a powerful tool,” he says.   “Social capital matters and a lot of Chartered Accountants have large networks of contacts. These networks can be leveraged to transform lives. Giving someone from a deprived area the opportunity to interview for a job could change the trajectory of their life with the positive knock-on effect extending to their family and wider community.”  For those whose philanthropic interest lies in monetary giving, meanwhile, Philanthropy Ireland offers a wealth of advice and information on what you need to know to get started. “There are many forms of monetary philanthropy, which is often considered within the overall context of wealth management and estate planning,” it advises. “Individuals, families and corporates often set up their own foundation or they link in with an intermediary philanthropic organisation that can support them in their grant-making decisions and provide governance and compliance support.” To find out more about Philanthropy Ireland, the organisations and initiatives it supports and the different philanthropic options on offer, log on to philanthropy.ie

As Chartered Accountants prepare for 2024, Ross Boyd outlines key measures to stay one step ahead in a challenging climate Whilst the dawn of a New Year brings with it a sense of hope and often optimism, accountants across the world should brace for a difficult 2024.  I established my practice over a decade ago, having earned my stripes for about 15 years before that, but in all that time I’ve never experienced such volatility and uncertainty.  The year that’s gone has presented the most complex economic test of a generation with the impact of two wars, Brexit and the pandemic completely transforming the business landscape.  I commend my fellow Chartered Accountants for powering through and continuing to do their best for their clients, and their own teams.  Chartered Accountants across the island will already be preparing for a tough 2024, aware of the implications of the current economic climate. The accountancy sector faces additional hurdles, including a skills shortage, retention issues, the continued rise of artificial intelligence and digital tools, and ongoing consolidation across the sector.  While changing business taxation is a big issue in the North, talent and technology are two common themes facing businesses across the island on the cusp of the New Year. Change continues at a relentless pace, and we must pause, embrace and adapt to remain relevant. Here are the key areas I recommend you focus on now, so that you can grow your business and continue to provide trusted and expert counsel to your clients.  Talent Labour shortages, paired with the capacity pressures these shortages cause, are likely to be the most pressing issues restricting growth across many sectors in 2024. Unfortunately, the war on talent is a trend our own sector will continue to battle too.  To put it bluntly, the sector’s image needs reinvention if it’s to continue attracting and retaining talent.  And to put it even more bluntly, investing in human capital is non-negotiable – after all, talent and growth are entirely correlated. As employers, we must adopt a two-pronged approach here.  First, we must invest in existing employees to support their continued contribution to the sector. I would advise any practice to objectively assess their employees’ skill sets and put the necessary plans in place to help them develop.  These development plans should look beyond ‘number crunching’ and financial recording to include a broader set of responsibilities, such as analysing forecasts, identifying emerging trends and networking.  It is crucial we ensure that the role of the Chartered Accountant isn’t limited or constrained, and that it is clearly positioned as that of strategic advisor. Second, we must focus on creating the type of organisation – and providing the kind of leadership – people want today.  Organisations that prioritise diversity, inclusion and flexibility are proven to have higher employee retention, and this is becoming even clearer post-pandemic as Gen Z becomes more present in the workplace.  Now aged between 11 and 26, this generation will account for 27 percent of the workforce by 2025.  At RBCA, we have spent a lot of time developing our graduate programme so that we can give our trainee recruits every opportunity to thrive, including supporting their interpersonal development. We also recently invested in a new office in Belfast to provide a physical environment that supports productivity and learning, and our annual Away Days continue to be invaluable to the culture of RBCA.  Technology  We have all come to understand the importance of digital tools in recent years and it is critical that, in 2024, we continue to use technology to improve both efficiency and security.  At RBCA, we moved to cloud computing in 2011 and we recently invested in new cloud technology, successfully tackling our tech stack. Some ill-advised pundits would argue that accountancy’s future is limited in our increasingly digital world, but our experience is that new accounting technologies have been complementary to our work.  Technology will never replace our profession, however. Why? Because, in my opinion, people will always buy into people.  Relationships and quality communications are the greatest tools at the disposal of today’s Chartered Accountant, providing that crucial competitive edge.  Often, we are so focused on our clients’ businesses and their success that we don’t focus enough on the resilience of our own, but it’s vital that we harness the passion and commitment that exists across the sector to thrive in the New Year.  Ross Boyd is founder and director of RBCA, a Belfast-based Chartered Accountancy 

From education and the next generation, advances in technology and the evolving role of the accountant, to business and the economy, what can we expect in the New Year? As we look ahead to the New Year and the opportunities and challenges it will bring for society and the economy, our District Society Chairs give us their take on what lies ahead for the profession in 2024. Brendan Brophy, Chair of the Young Professionals Committee The accountancy profession is poised for transformative developments in 2024 and young professionals will find themselves at the forefront of this dynamic landscape.  The coming year promises a paradigm shift in the role of accountants in business.  Beyond the traditional domains of financial reporting and compliance, there is a growing emphasis on strategic financial management. Young professionals are expected, not only to interpret financial data, but also leverage their insights to drive business decisions. Our ability to communicate financial information in a clear and compelling manner is becoming as crucial as the technical expertise itself. In Ireland, where the business ecosystem is marked by resilience and innovation, the role of accountants is expanding to encompass a broader spectrum of advisory services.  Accountants are increasingly being called upon to provide strategic insights that guide organisations through economic uncertainties and market fluctuations. The expectation is for accountants to be proactive contributors to organisational growth, acting as trusted advisors who understand the intricacies of both finance and business operations. Advancements in technology continue to reshape the profession and we can expect to see this trend accelerate in the year ahead.  Automation and artificial intelligence are streamlining routine tasks, allowing accountants to focus on higher-value activities such as analysis, interpretation and strategic planning. As a young professional, staying abreast of these technological developments and embracing them as tools for efficiency will be paramount. Morna Canty Ahern, Chair, Chartered Accountants Ireland Midwest Society An accountant will always have a seat at the table and, for some, the shift in the traditional role of accountant is the ghost of Christmas past. Currently, we find ourselves as a profession in high demand but facing a lack of supply.  The many routes to qualify as an accountant – along with the Government’s renewed focus on apprenticeships – means that our sector can now actively address the skill shortage we face and meet the demand for high-quality professionals through education.  Education is the ‘gateway to the future’ in building the Chartered brand, but it does not end with our qualification. Education is a cycle, a continuous process of learning and acquiring knowledge pre- and post-qualification. Chartered Accountants are always seeking opportunities to learn and our education must emphasise and support the reality of our role today, and not the traditional role of the ghost of Christmas past. Through technology, our role now is to provide leadership in business, rather than simply counting costs.  Despite this, fewer young people are choosing a career in accountancy and this is because the role of the modern accountant is not accurately portrayed to students at second and third level.  We welcome the commitment by the Department of Education to review the second-level accounting syllabus.  A focus on promoting the true working life of today’s accountant through educational campaigns by our members will help the next generation to visualise a future in our profession. Becoming an accountant is a commitment to lifelong learning and, as we approach 2024, we need to develop educational access programmes in partnership with third-level institutions so we can engage and encourage younger generations to become accountants.  Our members are natural mentors, often contributing at many levels to their local economy and offering support to their communities.  A renewed focus in 2024 on engagement with the Institute and our District Societies will help to deepen these relationships and strengthen the value attributed to the role of the Chartered Accountant in communities around the country.  As a profession, we are not just ‘about numbers’; our unique ability to strategically shape organisations through trusted advice and guidance contributes far beyond the balance sheet. James Fox, Chair, Chartered Accountants Ireland Cork Society It has been great to see the theme of #NextGen at the forefront of Chartered Accountants Ireland in 2023, building on previous discussions with national policymakers regarding the potential changes required to the Leaving Cert accounting syllabus. I see this process as being a key driver for promoting the profession, keeping up to date with advances in technology and encouraging younger generations to pursue a career in accountancy. The future of accountancy as a career is a hot topic and one I expect to see further discussion on in 2024.  Having spoken to many students and second-level teachers since I became Chair of our Cork Society, I can see that there is still work to be done to change perceptions of what a career in accountancy is really like. In 2024, I will continue to listen to our members, to key stakeholders in second- and third-level education and to the next generation themselves, to see how Chartered Accountants Ireland can remain not just relevant, but at the forefront of shaping the national dialogue and influencing policymakers. It is important that we clearly demonstrate how Chartered Accountants continue to play a crucial role in industry, practice and many other sectors, and in the midst of rapid developments in technology. A career as a Chartered Accountant is varied, interesting and dynamic, and the academic curriculum and internship programmes on offer to the younger generation must reflect this. I would also hope, in 2024, that further light is shone on the supports small-to-medium sized practices need as we move forward. They play a vital role at a local and national level and are at the coalface of our profession, supporting entrepreneurs and training new members. It is vital that these practices get sufficient support to grow and thrive in the future, particularly with regard to technology, and I hope that this is high on the agenda nationally in 2024. Des Gibney, Chair of Chartered Accountants Ireland Leinster Society Despite the economic impact of COVID-19 and the negative impacts of high inflation, soaring energy costs, rising interest rates and over €2 billion in warehoused Revenue debt, business insolvencies in Ireland remain at the same level as 2019, which itself marked a historic low. The sectors bearing the brunt of these economic pressures currently include construction, hospitality and retail. I predict that the commercial property sector in Ireland will also come under significant pressure over the next 12 to 18 months due to a combination of higher interest rates and the prevalence of hybrid working. Between 2012 and 2018, insolvencies averaged 1,000 per annum. Recent figures indicate that we can expect 600 corporate insolvencies this year, so we are not faring too badly, relatively speaking, despite the macro-economic situation worsening since 2018. I believe there is a combination of reasons for the low level of corporate insolvencies we are currently seeing, including uptake of formal restructuring procedures such as the Small Company Administrative Rescue Process (SCARP) and examinership. Generous Government supports made available over the COVID period have helped.   The Government has also played its part by providing struggling SMEs with the SCARP option, which can save a company where it is insolvent but has a viable business. It is a cheaper and faster process than examinership. However, since the legislation was enacted in 2021 there have been approximately 50 SCARP appointments. Thirty companies were approved, nine failed and the balance were restructured outside the process. This level of uptake is disappointing. However, SCARP is still in the early stages and we must remember that uptake of the examinership legislation brought in back in the nineties was also initially very low. Having advised companies on insolvency and restructuring matters for decades, my experience has been that owners and directors tend to put off taking formal action until they are left with no other option. In some regards, particularly in the case of family-owned businesses, I understand this reluctance. The most common source of corporate pressure comes from either a creditor or the prospect of the company imminently running out of cash and being unable to meet their wage bill. Once matters reach this stage, the options available to the company reduce significantly.  To avoid this, my advice to business advisors, directors and shareholders is to understand the statutory responsibilities of directors when the company is approaching insolvency and the implications this may have for their other business interests or employments.  The next step is to explore the options available to the company by seeking advice early from an experienced insolvency practitioner. Marion Prendergast, Chair of Chartered Accountants Ireland Northwest Society The prospects for the Northwest region in 2024 are undeniably positive, drawing on my first hand experience as a member of the Northwest Society and my role in the regional public sector. In the wake of the COVID-19 pandemic, there has been a notable influx of professionals choosing the Northwest for work across diverse industries, setting the stage for robust economic growth. As Chair of the Northwest Society, I’ve had the privilege of connecting with numerous members who have either returned from overseas or opted to move here from bustling urban areas.  The common thread in these decisions is the pursuit of better work-life balance, reduced commuting times and a focus on family support – benefits the Northwest region provides. In my role as Head of Finance at Sligo University Hospital, I’ve witnessed the successful recruitment of highly skilled expatriates choosing to return home. Unlike in the past, when we might have competed with larger city hospitals, the appeal of the Northwest is now a major draw for individuals relocating to the region and contributing to the local economy. Nevertheless, like any region, the Northwest faces challenges that demand attention. Our road and rail networks require substantial investment, with the N17 urgently needing upgrading as the main connection to Ireland West Airport. Additionally, improved road connections to Northern Ireland and faster rail links to the capital are essential for accommodating the needs of remote workers effectively. Addressing the housing shortage, particularly for families, requires increased investment. While these challenges are widely acknowledged and are high on the Government’s agenda, their resolution is crucial for the Northwest to retain its appeal to high-calibre talent. As members of Chartered Accountants Ireland, we are well-equipped to play a pivotal role in finding solutions. Our diverse membership spans various industries and functions, and our local District Societies serve as vital connectors, especially for those engaged in remote work.  The view from London The members of the London Society Committee were pleased to see an increased appetite for in-person events throughout 2023 and we expect this trend to continue, writes Michael Gilmartin, Chair of Chartered Accountants Ireland London Society. In 2024, however, we expect demand for in-person events to be driven not by pent-up demand post-COVID but by a softer labour market in which companies may start to mandate more compulsory days in-office. The UK economy is forecast to grow by a modest one percent in 2024 and there remains much uncertainty globally.  Given the financially challenging times, it is vitally important that we continue to be a force for good within the Irish community in and around London. Our biggest challenge is trying to engage with members who are based in the Greater London Area.  This isn’t unique to the London Society, but with a population in excess of 9.5 million people in Greater London, we will always face intense competition vying for our members’ attention. The interests of our members continue to evolve to reflect those of wider society and we will continue to offer novel, less traditional events in 2024.  Michael Gilmartin is Transformation Director, Dentsu International The view from Northern Ireland There’s a lot to be positive about in Northern Ireland, particularly when it comes to the creativity, innovation, drive and resilience in the business community, writes Paul Millar, Chair of Chartered Accountants Ireland Ulster Society. We have entrepreneurs who have a positive vision for Northern Ireland and who have the drive to realise this vision.  There are significant sectoral strengths in areas such as digital and ICT, life and health science, advanced manufacturing, fintech, agri-food and the creative industries – and we have great renewable energy potential. Twenty-five years on from the Good Friday/Belfast Agreement, there is also a great level of interest from US investors in supporting businesses in Northern Ireland. In recent months, we’ve seen the US Special Envoy to Northern Ireland, Joe Kennedy III, lead a trade mission of 50 US executives to Northern Ireland.  There is a clear message that Northern Ireland has something to offer – growth potential, a skilled workforce and unique dual market access to the UK and EU. We could be on the verge of something special. The US is Northern Ireland’s largest source of foreign direct investment, supplying 45 percent of projects in the last 20 years. One-third of all foreign direct investment and 51 percent of the jobs created have come from the US.  A growing interest in further investment could be a great sign. It could be a catalyst to boost everything else within our society, from health and education to housing and wellbeing. Of course, there are challenges. The cost-of-living crisis, and the cost of doing business, continue to be difficult for everyone. Just about every sector is facing a skills shortage and when we need leadership the most, we continue to face a democratic deficit at Stormont. Public services are in a difficult position. There are substantial pressures on public sector finances and significant budget overspends to deal with. We need a devolved administration back up and running at Stormont to deal with these issues. At the time of writing, there have been positive signs that perhaps the Executive and Assembly suspension could end soon. We urgently need this to be the case. Paul Millar is Chief Executive of Whiterock Finance

Accountancy Europe Board Member Shauna Greely tells us about the organisation and its work and priorities for the year ahead  Accountancy Europe is a representative body based in Brussels at the heart of the European Union and I am a Vice President and Board Member. Our focus is to give a unified voice to the accountancy profession in Europe, including Chartered Accountants across the island of Ireland, and to ensure that your perspectives, priorities and insights are heard by the policy makers, regulators and standard-setting bodies operating at a European level. For me, this is particularly important because Ireland is a proud member of the EU and I am proud to be able to represent members of Chartered Accountants Ireland in Europe. Accountancy Europe is heavily engaged with accounting standard setters, such as the European Financial Reporting Advisory Group, the International Accounting Standards Board and other key stakeholders involved in the interests of the accountancy profession. Accountancy Europe helps inform European policy debate in areas such as sustainability, SMEs, tax, reporting and audit – and promotes high-quality financial reporting, auditing and ethical standards.  One of our biggest priorities right now is combatting climate change and the crucial role sustainability reporting has to play in reducing carbon emissions and ensuring that companies are operating as sustainably as they can. I am concerned about climate change and the impacts this is starting to have on all our lives. I hope that Accountancy Europe and the profession as a whole can play its part in raising awareness about climate change impacts and sustainability, so that we can bring about positive change. It is vital that we get this right and that the right level of reporting is introduced for organisations, both large and small, across the EU.  Sustainability reporting brings to mind the saying, “What gets measured gets done”. It has such an enormously important role to play in combatting climate change and puts the accountancy profession front and centre in these efforts. This is all the more important because the younger generation of professionals coming into the workplace have a social conscience. They want to do good in their lives and in their work, and they want to be part of professions and organisations that are doing good and can attest to it. The accountancy profession is at the coalface of climate reporting and Accountancy Europe ensures that this pivotal role is represented as one voice to the European Parliament, the European Commission and the policy makers in Brussels who are shaping the future of the EU. Shauna Greely is a Senior Finance Business Partner with Ulster Bank and past President of Chartered Accountants Ireland  

IFAC Board Member Joan Curry tells us about the organisation and its work and priorities for the year ahead  The International Federation of Accountants (IFAC) is the global voice for the accountancy profession. I describe it as the members’ body for members’ bodies.  IFAC was established in 1977 at the 11th World Congress of Accountants in Germany. At that time, there was recognition that the profession needed a global voice and perspective. Now, IFAC represents 180 member and associate organisations in 135 jurisdictions, including Chartered Accountants Ireland. Its reach extends to millions of accountants worldwide.  At this high level, IFAC represents the public interest by advocating for, and amplifying, the relevance, reputation and value of our profession globally. We operate across three pillars: supporting the development, adoption and implementation of international standards; ensuring the highest-quality education for the profession; and looking to the future to identify and respond to emerging developments so that we can ensure the profession is future-ready. I joined the IFAC Board in November 2019 and am one of 23 Board Members from around the world. We govern and oversee the operations of IFAC, ensuring that its mission and vision are progressed through its organisational structures. Coming into 2024 and as the world becomes ever more connected and integrated, our priority is to ensure the continuation and enhancement of trust and confidence in the accountancy profession. This is our North Star, both at a global level and in every jurisdiction in which our members operate. To this end, we have introduced a set of reforms in recent years to help maintain the independence of standard setting. There is now a structure that allows standard setting to be developed and delivered in an independent arena, rather than under the banner of IFAC.  In creating this new structure, IFAC supports, monitors, promotes and advocates for the work of the standard-setting boards in developing independent standards across audit, assurance and ethics. These standards are directed towards the areas of greatest public interest and underpin trust and confidence in the profession. This is important in every sense but especially so given the global drive to develop sustainability reporting standards so that the profession can play its part in tackling climate change. IFAC represents the profession in supporting the delivery of the G20’s Sustainable Development Goals and ensures our voice is heard on issues with global impact, such as climate change. We will continue to be future-focused and to ensure that issues of importance to all accountants, including the younger generation, are at the heart of IFAC’s mission and vision.  We recognise the diversity of thought and inclusion required to maintain the relevance of the profession into the future and the importance of our role in envisioning how the profession will evolve and the impact we can make in the years ahead. Joan Curry is Head of Finance at the Department of Transport and a member of the Council of Chartered Accountants Ireland

Minister for Finance Michael McGrath outlines his expectations for the Irish economy and business in 2024 Over the past number of years, our economy and society have weathered multiple unprecedented challenges: Brexit, a once-in-a-century pandemic followed by the Russian invasion of Ukraine, and the associated impact on energy prices and inflation.  Yet despite all these headwinds and reinforced by Government support, our economy has proven remarkably resilient, with our labour market essentially at full employment and public finances on a positive trajectory. As we look ahead to 2024, I am encouraged by the strength our economy has demonstrated in the wake of so many external shocks.  Next year, Modified Domestic Demand (MDD) – my preferred measure of the domestic economy – is forecast to grow by 2.2 per cent. While this is lower than the growth we have experienced in recent years, it compares favourably with the outlook for many of our competitors. The increase in financing costs facing businesses because of this monetary policy tightening is unfortunately a challenge Irish business will continue to contend with in 2024.  This greater burden comes at a time in which businesses are already facing inflation at multi-decade highs.  Thankfully, there is some evidence that we have now turned a corner on inflation. Inflation is expected to continue to ease over the coming months with the rate projected to fall just below three percent next year.  It is important to note that the outlook for ‘core’ inflation – which excludes energy and unprocessed food – has proven to be more persistent as inflationary pressures have become broader.  Looking at the international picture, the balance of risk is very much tilted towards the downside.  A small, open economy like Ireland is particularly vulnerable to global economic developments. Geopolitical tensions and further changes to monetary policy are key risks facing our economy over the coming period. As Minister for Finance, one of my priorities is to ensure that businesses have the support they need amidst all these challenges.  In the lead-up to Budget 2024, I examined the tax reliefs and supports available to Irish businesses and met with, and listened to, the views of stakeholders from across the country.  Based on this, I announced a wide-ranging package of measures to support enterprise in Budget 2024.   Among these measures, I am increasing the Research and Development (R&D) Tax Credit from 25 percent to 30 percent. The first-year payment threshold is also being doubled from €25,000 to €50,000, which will provide valuable cashflow support to companies engaged in smaller R&D projects.  These amendments will ensure that Ireland remains competitive in attracting employment and investment in R&D.  I am also introducing a new targeted Capital Gains Tax relief that will allow angel investors to benefit from a reduced 16 percent rate of CGT when they dispose of a qualifying investment for gains up to twice the value of their investment.  This relief aims to encourage investment in this important sector of our economy, helping these enterprises access the necessary capital to grow and develop. In the same vein, I am also enhancing the Employment Investment Incentive Scheme by standardising the investment period to four years for all investments, and doubling the amount an investor can claim relief on for four-year investments to €500,000.  Further changes are also being made to the scheme to ensure that it is compliant with the new EU General Block Exemption Regulation.  To support Irish SMEs in engaging key employees, I have recently commenced the outstanding Finance Act 2022 amendments to the Key Employee Engagement Programme, following receipt of State aid approval from the European Commission.  This includes an extension of the scheme to the end of 2025 and doubling the amount of issued, but unexercised, qualifying shares a company can hold from €3 million to  €6 million.  In my engagement with stakeholders, a clear message has emerged: businesses find the administrative requirements of tax supports and schemes to be complex.  To examine this issue, Revenue will be establishing a subgroup of the Tax Administration Liaison Committee (TLAC).  This group will examine Revenue-administered tax schemes and reliefs for business, with a focus on identifying any opportunities to simplify and modernise the administration of business supports. It will report on its findings in the course of 2024.  My department will also undertake several reviews in 2024 to further examine how specific enterprise support reliefs and schemes can work better for Irish business.  I am very optimistic for the future of business in Ireland. The suite of enterprise tax measures announced in Budget 2024 is a sign of our commitment to ensuring that Ireland is an attractive location for start-ups and scale-ups across a range of sectors.  Michael McGrath, FCA, is Minister for Finance and a TD for Cork South Central

The objectives of the National Action Plan Against Racism will be implemented within the Institute, and among members and students, under a recently unveiled Ethnicity Network Group initiative At Chartered Accountants House on a recent evening in late October, members of the Ethnicity Network Group (ENG) announced their plans to implement the objectives of the National Action Plan Against Racism (NAPAR) within the Institute. The ENG is committed to supporting the implementation of NAPAR recommendations within the Institute both as a professional body and employer, explains Deborah Somorin, ENG founder and Co-Chair.  “The National Action Plan Against Racism will be a catalyst for creating more equitable, diverse and inclusive workplaces for people from ethnic minority backgrounds in Ireland,” says Somorin, who is Manager, People Advisory Services, EY Ireland. “Organisations will now acknowledge that racism exists in Ireland and hopefully put in place policies to create authentically anti-racist environments where everyone has fair access to opportunities to gain employment and grow in their careers.” As well as supporting the implementation of NAPAR recommendations within the Institute, Somorin and her ENG colleagues are also committed to supporting members and students who want to implement the recommendations within their own organisations. This is especially important given the recent rise in anti-immigration narratives in Ireland – and the profession is not immune, explains Somorin’s ENG Co-Chair Aisling McCaffrey, Director of Sustainability and Financial Services Advisory at Grant Thorton. “A recent Chartered Accountants Ireland survey found that 43 percent of members and 66 percent of students have personally witnessed or heard someone else being discriminated against in the workplace,” says McCaffrey.  “The survey also found 28 percent of people who identified as being an ethnicity other than white felt their ethnicity had a negative impact on their career as a Chartered Accountant. Only three percent of people who identified as being white responded the same.” The development of NAPAR This isn’t the first time Ireland has attempted to tackle the issue of racism. The country’s first National Action Plan Against Racism was introduced in 2005. When it ended in 2008, however, it was not renewed, leaving “an important vacuum contributing to a ‘normalisation’ of racism”, according to a report by the European Commission against Racism and Intolerance, published in 2019. The UN High Commissioner for Human Rights issued guidelines on creating a new National Action Plan Against Racial Discrimination in 2014. In turn, Ireland – with a mandate established under the Irish Human Rights and Equality Commission Act – created the Irish Human Rights and Equality Commission in 2014. Its purpose was to “protect and promote human rights and equality in Ireland and build a culture of respect for human rights, equality and intercultural understanding in the State”. An Anti-Racism Committee was subsequently established in 2020 by then Minister of State at the Department of Justice and Equality, David Stanton TD.  The committee was given the mandate to conduct research on racism in Ireland, research best practice in other countries and come up with recommendations to tackle racism here. “We did a number of interviews and consultation processes with different departments and ministers, agencies and bodies,” explains Dr Bashir Otukoya, Anti-Racism Committee member, law lecturer and Higher Executive Officer for the Courts Service.  Dr Otukoya took part in a panel discussion at the October launch of the ENG’s NAPAR initiative at Chartered Accountants House. “We had hundreds of written submissions from members of the public, and we put all of that together to end up with NAPAR,” he says. “Each of the board and community members have their own expertise in different fields, like human rights, anti-discrimination and equality law – and [we have] members of communities that are affected by racism. We went at it from an angle of experience and knowledge.” For ENG member Reabetswe Moutlana, Audit Manager at EY, one of the most important aspects of NAPAR is the momentum it creates for collective action. “NAPAR recognises that the journey towards an inclusive society is a collective journey and, therefore, puts the onus on everyone – the State, private actors, organisations and individuals – to work together to make Ireland a safe place for all,” says Moutlana. “The Action Plan also focuses on a victim/minority-centred approach. The key principle of the plan is that ‘affected groups should participate in the development and oversight of all government policy initiatives and targeted measures to address racism…This essentially means that this is a plan created by affected persons, for affected persons.” NAPAR and the Ethnicity Network Group Established in 2022, the mission of the Ethnicity Network Group within Chartered Accountants Ireland is to promote a sense of belonging and inclusion for people who belong to Traveller, Black, Asian and other minority ethnic groups within the profession. “As such, we see it as our role to promote awareness of NAPAR, provide suggestions for key actions across the profession and assist with its implementation where possible,” says Deborah Somorin. Both Somorin and Dr Otukoya recognise that the strengths of the plan are its five key objectives, comprising very specific action points and target dates. The plan also acknowledges the intersectionality between racism and other forms of oppression, and that the required actions and remedies cannot follow a one-size-fits-all approach.  “We were very careful with how we set the objectives in NAPAR,” explains Dr Otukoya. “We wanted it to be relatable to everyday citizens. So, objectives like being seen, being equal, being heard, and being counted were [designed to be] persuasive and in plain language, usable and implementable by anyone.” NAPAR awareness Even though NAPAR was launched on 21 March 2023, few members present at the ENG event at Chartered Accountants House in October were aware of it, according to McCaffrey.  “This could indicate a lack of awareness around the plan, which means that it is more difficult to keep those in charge of it accountable for the actions proposed, especially as this is more of a short to longer-term plan,” she says. “We want as many people as possible to know about NAPAR and become allies towards creating a safe and equal environment while also promoting it. It’s important that the responsibility for raising awareness and promoting NAPAR does not solely rest on affected persons. This is a collective journey.” NAPAR and the Institute The Ethnicity Network Group has devised a four-step plan to integrate NAPAR into the operations of the Institute, explains Somorin: We will support Chartered Accountants Ireland in its role as an employer, in creating an anti-racist working environment by implementing relevant NAPAR actions; We plan to work with decision-makers to implement NAPAR actions related to Chartered Accountants Ireland’s role as a professional educational body; We will develop members’ and students’ awareness and understanding of NAPAR and how they can implement it within their organisations; and We plan to roll out the industry’s first Ethnicity Pay Gap report. NAPAR can positively influence the world of work, not just for employees, but also employers, Somorin believes. “As noted in NAPAR, inclusive communities are vital to ensure that minority ethnic groups feel a sense of safety, connection and belonging,” she says.  “For employees, we believe that being part of an inclusive workplace, where the impacts of racism are acknowledged and addressed, creates an enabling environment for individuals to reach their highest potential.  “For employers, I believe that embedding key considerations linked to NAPAR will lead to improved retention of staff and, in turn, increase access to a more diverse talent pool.  “This increase in diversity enables companies to relate better to all customers and clients, promotes balanced internal discussion and challenges thinking, which often results in driving innovation – all of which is good for business.” *Written by Liz Riley Northern Ireland Racial Equality Strategy 2015–2025 In Northern Ireland, The Racial Equality Strategy 2015–2025 was launched in December 2015. Alfie Wong, MBE, is Head of Racial Equality Delivery at The Executive Office, Northern Ireland Civil Service (NICS) Race and Ethnicity Champion, founder of NICS Race and Ethnicity Network and Chartered Accountant. Here, he outlines the key outcomes of the strategy: - Outcome 1: Equality of service provision People from a minority ethnic background can access and benefit from all public services equally. - Outcome 2: Elimination of prejudice, racism and hate crime Effective protection and redress are provided against all manifestations of racism and racist crime, and a victim-centred approach is promoted. - Outcome 3: Increased participation, representation and belonging People from minority ethnic backgrounds participate, and are represented fully, in all aspects of life – public, political, economic, social and cultural – and enjoy a shared sense of belonging. - Outcome 4: Cultural diversity is celebrated The rights of people from minority ethnic backgrounds to maintain their culture and traditions in line with human rights norms – and to pass them on to subsequent generations – are recognised and supported.

Retailers face escalating cyber security challenges during peak events such as Cyber Monday. Will O’Brien outlines four steps to protect customer data this holiday season In the retail sector, cyber security often lags behind other sectors regardless of the retailer’s size or value. In the short-term, this can lead to some initial minor inconveniences, but if left unattended, it can manifest into serious issues that impact the organisation’s brand, reputation and customer loyalty. The security challenge During the peak Christmas consumer events of Black Friday and Cyber Monday, the retail sector sees a sharp uptake in business. As a result, its value to malicious actors also increases. To leverage this busy period, cybercriminals use unsophisticated phishing campaigns to gain access and steal data. when a retailer’s ‘accounts and billing’ function is in full swing during the holiday season, for example, they are more likely to fall victim to a phishing attack. While some retailers have reasonable controls in place to protect against these attacks, many rely heavily on insecure third parties to fulfil critical business functions. According to PwC’s 2023 Digital Trust Insights Survey, supply chain risks have become a big focus for regulators and organisations, with senior executives in Ireland identifying increased regulatory scrutiny as one of the top five impacts on their business since 2022. Without conducting the correct level of cybersecurity due diligence on third parties, retailers can open themselves up to cyber-attacks by providing third parties with access to their data. If these third parties fall victim to cyber-attacks, the organisation’s data – through payroll, accounts and shipping, for example – may be at risk. Despite the third party being at fault, the data controller (the organisation) is subject to fines and reputational impact. Defending consumer data Organisations can protect their digital assets by understanding the retail-specific cyber threats and associated remediation activities. 1. Education and awareness  Your people are your first line of defence against phishing campaigns. All staff should be educated on security procedures and aware of attack methods. A robust cybersecurity education and awareness programme is the best way to achieve this. You should tailor this programme for your organisation by identifying the critical threats and customising the content to address these threats. 2. Third-party risk management Third-party risk management (TPRM) is the process of analysing and minimising the cybersecurity risks associated with outsourcing to third-party vendors or service providers. It involves effective selection, due diligence, contracting, ongoing monitoring and the correct termination processes. 3. Malware and ransomware prevention Anti-malware and ransomware detection technologies can help to reduce the risk of a severe cyber attack likely to cause operational, reputational and financial damage to your organisation. Detection and response tools can be used to identify malware and limit the blast radius of the attack, for example. 4. Incident management and response With organisations facing more regulations than ever, the capacity to respond to a data breach quickly and effectively has never been so important. Senior executives should test their incident response capabilities and muscle memory with simulated strategic and tactical tabletop exercises. Incident response plans should be enhanced based on the learnings from these exercises. This documentation can include communication statements, runbooks for technical responses to ransomware, and breach notification processes for notifying the Data Protection Commission of a personal data breach. Implementing these controls can help to mitigate the financial and reputational impact of a security breach. Prioritisation You cannot eliminate cyber risk, but prioritising retail-specific cyber threats can help to mitigate the potential risks and damage. An effective cybersecurity programme will ensure that you can prepare, withstand, recover and learn from malicious attacks and security events online. Will O’Brien is Director of Cyber Practice at PwC

Gender allyship can help to support workplace equity, but only when it is genuine and meaningful. Andrea Dermody offers her advice on how to embed a culture of true support and allyship Harvard Business Review defines gender allyship as the purposeful collaboration of dominant group members (men) with women to actively promote gender equality and equity in their personal lives and the workplace through supportive and collaborative relationships, acts of sponsorship, and public advocacy to drive systemic change. While allyship can be a powerful tool for creating inclusive and equitable environments, however, there are instances in which it might not be as effective as intended. Research has suggested a stark perception gap between what men think they are doing to support women versus what they are actually doing.  The recent Allyship-In-Action study of more than 1,400 men and women found 78 percent of men said they had personally given a woman credit for her contributions and ideas in a meeting in the previous year. Just 49 percent of the women in the study reported witnessing such behaviour during that period. Despite good intentions, the effectiveness of men’s allyship efforts may be limited by several factors, including: Superficial engagement: Some allyship efforts may lack genuine commitment and understanding of the issues at hand.  Tokenism and performative actions: Both can create an illusion of support without leading to meaningful change. Lack of accountability and measurement: Allyship efforts can lack direction and fail to produce tangible outcomes without clear accountability and measurable goals. Resistance to change and inclusivity: Resistance from certain individuals or groups within the organisation can hinder effective allyship efforts.  In short, allyship is more than just ‘talking the talk’. It’s about fundamentally changing attitudes and behaviours. Simply calling yourself an ally to any person of an underrepresented group misses the point of allyship altogether.  Steps to successful allyship The secret to successful, long-lasting allyship lies in the combination of interpersonal action (developing awareness and motivation) and public action to create accountability and transparency. Here are five steps you can take to help allyship succeed in your organisation.  Educate yourself: Don’t ask people from marginalised backgrounds to take on the emotional, psychological and physical burden of educating you. Take responsibility for yourself. This list of resources from the University of Kent is a great place to start. Listen: Actively listen and amplify the voices of the communities for which you are trying to be an ally. Without listening, you have the danger of venturing into ‘saviour’ territory, where you assume you know more about what marginalised groups need than those in that group. Your actions become self-serving, and you benefit more than the groups you are trying to help.  Reflect on your privileges: The word “privilege” can be polarising, but it is essential to recognise the privileges you have to be an ally for others. Use your voice to make the voices of marginalised people heard. Use your privilege and influence to advocate for change and promote inclusivity. Stand up against discriminatory practices, biases and systemic injustices.  Mentor others: As an ally, showing your support through mentoring programmes is a great idea. By getting to know your mentee as an individual, you can learn about their experiences and perspectives. The more you know and understand, the better equipped you will be to help. See something, say something: Speak out in support of marginalised groups and actively challenge discriminatory behaviours and policies within your sphere of influence. If you see someone being discriminated against, support them at that moment, not later. Intervene even if the targeted individual or community is not present. By demonstrating that you don’t find it appropriate, you can help change the culture and create a more inclusive and equitable society.  Remember, though, that allyship is an ongoing journey that requires continuous self-reflection, learning and active engagement – it’s playing the long game for success. Andrea Dermody is a diversity and inclusion consultant, speaker and coach at Dermody

New approaches to infrastructure investment will be essential if Northern Ireland is to leave a positive economic and climate legacy for future generations, writes Kaine Lynch Infrastructure is a fundamental building block of society. It brings us together, protects the environment and supports economic growth. The benefits of enhanced infrastructure are more important today than ever before, given the need to boost the economy in Northern Ireland (NI) and meet legislative obligations concerning climate change. NI’s neighbours are making significant headway in relation to infrastructure. Earlier this month, the National Infrastructure Commission (NIC) in London published its second National Infrastructure Assessment (NIA) while the Irish Government unveiled plans for an Infrastructure, Climate and Nature Fund. In contrast, NI’s Department of Finance (DoF) recently commenced a consultation on potential revenue-raising measures necessitated by extreme pressures on public finances. NI’s lack of wastewater infrastructure constrains development, demand for social housing is outstripping supply, public transport usage lags behind the rest of the UK and the road network is deteriorating rapidly. These issues won’t resolve themselves. If we don’t act, NI’s infrastructure will continue to deteriorate, and our children will inherit an even larger infrastructure deficit.  However, there are several actions NI can take to address this. Long-term strategy Critical to the success of any endeavour is a plan. While there are several infrastructure-related strategies, NI does not have a cross-sectoral one akin to the UK’s National Infrastructure Strategy or the National Development Plan in Ireland. Like the approach adopted by the NIC, the development of a plan must begin with a clear understanding of NI’s current baseline and relevant sectoral priorities. This evidence-based approach will allow the region to push beyond time horizons associated with political cycles and focus on the legacy we leave for the next generation. Prioritisation framework Given NI’s infrastructure deficit, it is inevitable that the development of an infrastructure plan will identify a longlist of challenges and an unaffordable list of potential interventions. Challenges must be systemically triaged to arrive at a realistic shortlist. The process should consider the maintenance, renewal and resilience of NI’s aging assets and constructing new ones. The process of triaging will require a single set of carefully developed criteria that identify relative priorities across the programme. It will also be necessary to apply the criteria strictly and consistently. Without this uniform approach, it will be impossible to robustly make difficult decisions to invest in one thing over another. The analysis will, of course, also identify lower priorities. Existing projects aimed at addressing these should be carefully considered. Continuing to develop lower priority projects will result in fewer remaining resources to focus on addressing those of higher importance. Commercial models In addition to prioritisation, there is a need to critically examine how NI’s financial envelope for infrastructure can be expanded. The recently published NIA identifies that private sector investment will account for around 50 percent of total infrastructure investment over the next two decades. However, NI remains heavily reliant on public sector funding. Opportunities exist to chart a new course and better leverage private sector investment, whether it be to develop NI’s electric vehicle charging network or increase housing stock. The potential introduction of revenue-raising measures as outlined by the DoF would pave the way for reduced reliance on the public purse and unlock potential lending opportunities to support ‘invest to save’ initiatives. The UK Infrastructure Bank, established in 2021, presents an opportunity for the Executive and councils to temporarily expand their financial envelope. The Executive can also access Reinvestment and Reform Initiative borrowing at even more competitive rates. Delivery structures NI has immensely talented infrastructure professionals. Individuals are limited, however, and expertise is dispersed across the public sector. These factors make it difficult to deploy the right skills to the right place at the right time, reducing the likelihood of project success. The UK Government Commercial Function and the Infrastructure and Projects Authority are models in which skills and resources are held centrally but deployed to departments to support delivery. Implementing a similar approach in NI would allow the pooling of limited skilled resources, develop deep infrastructure delivery expertise and deploy resources to where they are needed most while ensuring funding departments retain overall accountability and control. Kaine Lynch is Director of Government and Infrastructure Advisory at EY. You can read more here.

The consolidation underway in the global accountancy sector is set to continue in the New Year, driven by several factors, writes Mark Butler The global accountancy sector is experiencing a wave of consolidation driven by advances in technology, regulatory developments, succession challenges and the need for firms to enhance their service offering. Larger firms are seeking to increase their market share and capabilities by merging with or acquiring smaller, specialised operators. Hence, we are seeing more consolidation driven partly by the need to embrace digital transformation. This means that the traditional model of individual client acquisition is giving way to a more interconnected, specialist-driven model. Embracing digital tools and diverse distribution channels is becoming increasingly important for accountancy firms that want to stay competitive.  In 2024, we can expect to see a further rise in strategic mergers and greater emphasis on cultural alignment post-merger. Cultural alignment in mergers Merging firms must prioritise cultural alignment to ensure a smooth transition and harmonious collaboration. The success of a merger hinges on the compatibility of organisational cultures, values and work styles. This is especially true in Ireland, where the close-knit business community values relationships and a shared ethos. Client-first approach In Ireland’s accountancy sector, engagement and expertise are crucial for clients and younger professionals seeking to build their career. Being part of a firm where decisions are made locally provides a sense of identity and contributes to the long-term commitment of the merging partners. This trend is particularly evident as younger professionals seek alignment with firms that share their values. Strategic mergers for career growth Younger accounting professionals in Ireland are increasingly aware of the options available to them for career progression, and the potential impact mergers can have on their career trajectory. A merger with the right firm can help to enhance career prospects, leverage a broader client base, and access additional resources. Access to an international network is key to forward-thinking firms keen to ensure they retain clients as they in turn need access to global support.    Leadership trends In addition to digitalisation, consolidation and strategic mergers, firms also need to prioritise the recruitment of leaders who have the multifaceted skills to adapt to the evolving needs of the accountancy sector. Recruiting multifaceted leaders Accountancy firms should actively recruit leaders who have additional skills over and above core technical requirements – such as business development and innovation, for example. The ability of professionals to be willing and open to widening their skill base can help to ensure a firm's agility and adaptability in a rapidly changing environment. Cultivating leaders To drive ongoing growth, a clear view of the market is essential to ensure real, meaningful engagement with a firm’s target market. This targeted leadership approach ensures a deep understanding of evolving client needs and industry trends and, when done well over a sustained period of time, can yield significant benefits. Business development Emphasising business development as a core requirement for professionals leading specific functions within the firm is crucial. Growth doesn’t happen accidentally. Firms focusing on effective pipeline management for recurring revenue and project work tend to maximise opportunities, aligning business development strategies with growth objectives. Thriving in an evolving landscape The accountancy sector is undergoing transformation, led by consolidation, strategic mergers and digitalisation. Professionals and firms that prioritise cultural alignment and strategic growth strategies will likely thrive in this evolving landscape. Embracing change and investing in the right talent and technologies will be essential to navigating the challenges and opportunities that lie ahead and ensuring sustained success for accountancy practices in the future. Mark Butler is Managing Partner at HLB Ireland

Geopolitical uncertainty is reshaping boardroom priorities and acquiring the right expertise is crucial for strategic resilience, writes Dan Byrne Geopolitical risk: Is your board talking about it? If so, do they know how to handle it? The harsh reality is that many companies can’t do so properly. However, stakeholders are rarely patient when it comes to geopolitics. When something happens, they want a response from your corporate leadership.  The last thing your board needs to be is unaware of how to handle a situation, what to say, and how to adapt your strategy to changing global events. The challenge is processing that it’s all happening at once.  The news cycle is now dominated by the Israel-Hamas war. Before this started, the spotlight was on the Russian invasion of Ukraine and, before that, the chaotic US withdrawal from Afghanistan.  Meanwhile, we’ve got tensions between the West and China, the right-wing backlash against Brazilian and US elections, and unresolved Brexit issues – not to mention the protracted conflicts that are now so ingrained in the fabric of modern geopolitics. Every geopolitical crisis begins a new chapter of geopolitical pressure in corporate playbooks. The importance of geopolitical risk Assessing geopolitical risk is essential. It’s not going away and, depending on your company, it could be crucial to your strategy.  This doesn’t have to be direct – your company’s stance on a particular issue, for example. It can also be indirect – such as the businesses you work with within your supply chain. Many American companies have been shifting their manufacturing from China to other locations, such as Vietnam, out of fear that Chinese authorities could disrupt their business at the drop of a hat. Corporate leaders will be prodded by investors wanting to know if their company can survive through sanctions or consumers wanting to see their response to escalating conflict. The storm of questions will come; the challenge is how best to weather it. Expertise needed Experts in geopolitical risk will have the following skills: A deep understanding of corporate strategy and risk; Knowledge of global affairs, new or potential conflicts with global impacts, the intricacies of trade sanctions and the knock-on effects of government changes on international relations; and The ability to navigate through substantial geopolitical fallouts. The hard part is finding this expertise. Finding the right candidate to fill a board seat depends on multiple factors, like the availability of talent, training, networks, and an alignment of values. In some situations, this is a heavy ask.  It’s also worth noting that the market for geopolitical expertise is highly active right now as companies realise that they need to be prepared. Playing the long game Organisations should realise that the quest for geopolitical experience for your board may be a long game.  It can take time to find the talent that works well for your business – and it’s time that stakeholders may not always give you, pushing you for an answer and refusing to accept that you might need more time. That’s why it is essential to start now on geopolitical expertise if you haven’t already. If it feels like you’re playing catch-up, bear in mind that this won’t always be the case. Eventually, you will have the solid knowledge you need on your board to help you develop thorough answers to complex questions.  In reality, the world always moves faster than corporate governance is comfortable with, so it’s better to get ahead. Dan Byrne is a content writer at The Corporate Governance Institute

Navigating the intricate blend of personal and professional dynamics in family businesses presents unique challenges. Emma Richmond explores effective strategies for success and harmony By their nature, family businesses are a unique blend of personal dynamics and professional responsibilities. When an employee complains that the CEO’s daughter has been bullying them or an uncle has given himself a secret pay raise, it can become a significantly bigger issue for a family business than for any other. While allegations of bullying and financial impropriety can arise in any business, dealing with them in a family business can be particularly tricky – as you try to address the issues while also attending the annual family picnic, for example. There are many positives to a family business, however, such as shared values, deep trust, and long-term commitment. Still, we cannot deny that they face unique and added challenges. Being prepared for these challenges and putting in place the right structures can help to strike a balance and ensure the overall success of your family business. Here’s how to do it: Family versus professional roles One of the most common challenges in family businesses is distinguishing between family and professional roles. It can be difficult for an older brother to take instruction from a younger sister or an aunt to take instruction from a nephew. The very dynamic of a family business means that members wear multiple hats, serving as both relatives and employees or managers. These overlapping roles can lead to blurred boundaries and potential conflicts of interest. Establishing clear guidelines and communication channels that foster professionalism and respect is crucial, ensuring that personal relationships do not overshadow business decisions. It is also important to clearly document roles and responsibilities in employment contracts so that there is clarity on all sides. Succession planning and leadership Succession planning is critical in family businesses. Determining who will take over leadership roles and ensuring a smooth transition requires careful consideration. Emotions and family dynamics can complicate this process, leading to disagreements, power struggles, and potential talent gaps. Creating a structured succession plan that includes objective criteria for selecting successors, open communication, and opportunities for non-family members to contribute to the company’s growth is essential. As with all recruitment and promotions, a clear and transparent process can help to avoid conflicts. Managing performance and meritocracy Maintaining a fair and merit-based performance evaluation system is crucial for the long-term success of any business. However, in family businesses, there can be a perception of favouritism or nepotism, particularly if family members receive preferential treatment or promotions based on their surname rather than their abilities. Implementing transparent performance evaluation processes and detailing this in a policy, providing developmental opportunities for all employees, and actively encouraging a culture of recognition can help mitigate such concerns. Conflict resolution and communication Conflicts are inevitable in any workplace, but they can be especially complex in family businesses due to existing personal relationships. Disagreements among family members can quickly escalate, affecting work dynamics and family harmony. Effective conflict resolution strategies, such as regular family meetings, mediation, and open and honest communication, can help to address conflicts promptly and maintain a harmonious work environment. Retaining and attracting non-family employees Family businesses often face challenges in attracting and retaining non-family employees. These employees may perceive limited growth opportunities or feel excluded from key decision-making processes. To counter this, family businesses should: foster a culture that values and respects the contributions of non-family employees; ·offer competitive compensation packages; provide opportunities for career growth; and establish transparent promotion processes based on merit rather than familial ties. More often than not, non-family employees will embrace the culture of trust and shared values as demonstrated by the family members themselves, which can in itself create a very loyal employee. Maintaining balance Managing issues in family businesses requires a delicate balance between preserving family dynamics and fostering a professional work environment. By addressing the challenges of family roles, succession planning, performance evaluation, conflict resolution, and employee retention, family businesses can navigate these issues effectively and thrive in the long term. Clear employment contracts and policies will go a long way to maintaining a healthy and successful balance between family and business in these unique organisations. Emma Richmond is a partner with Whitney Moore

Seasonal corporate gifting is standard in business but can it be done responsibly? Feena Kickhamm outlines her advice on sustainable gift-giving for Irish businesses this Christmas Sustainable corporate gifting is an excellent opportunity to demonstrate a company’s sustainability commitments, including environmental and social responsibility. Businesses can inspire their employees, build a positive brand image, and contribute to a better world by choosing sustainable gifts. There are several issues to bear in mind when trying to keep your gifting green. Define your values: Clarify the criteria most important for your corporate gifts, e.g. environmental impact, supporting local communities or fair trade. Local sourcing: Support local SMEs and social enterprises. This supports the local economy and reduces carbon emissions from shipping. Eco-friendly materials: Choose gifts with a good environmental footprint, such as made from recycled or upcycled materials and consider reusable or recyclable packaging.   Education: Raise awareness with information about the sustainability and ethics of your chosen gift to recipients.   There is a wealth of small, creative, and sustainable businesses to choose from in Ireland. Here are several that are worthy of your support this holiday season: Social Enterprises We Make Good has products that are designed by some of Ireland’s best designers and made by people facing social challenges who have been supported to develop valuable skills and gain employment.   Rediscovery Centre is an eco store providing a wide range of upcycled and reused circular economy products.   ReThink Ireland contains a directory listing social enterprises you can support in Ireland.   Going green Ireland currently recycles 31 percent of all plastics, which needs to increase to 50 percent by 2025 under EU Legislation. There are shops that can help us reach this goal. Reuzi, Faerly, and Pax are just some of the zero-waste businesses in Ireland providing a range of gifting solutions to encourage minimal-waste living.  Jimmy Eco Toys is a toy company retailing and distributing eco-friendly toys. Hometree plants native woodland in Ireland to help with land regeneration and biodiversity. You can pledge or donate for trees planted in Ireland.  Of course, you can also give e-gift cards, experience gifts or donations to a local charity to guarantee your gift doesn’t end up in a landfill. Ethical food Coffee and chocolate production are often linked to environmental and human rights challenges, but there are many companies actively working to overcome these issues. Moyee Coffee offers fair chain coffee, meaning more value stays in coffee-growing countries through the creation of quality employment and provision a living income for farmers. Tony's Chocolonely is a Dutch chocolate brand committed to eradicating child labour in the global chocolate supply chain.   Imbibe Coffee is organic, socially conscious coffee that is giving back. One percent of its coffee sales go to Women’s Aid, one percent to projects at coffee origins they buy from and a further one percent is shared among its staff.  Making the effort Sourcing sustainable and ethical corporate gifts may take time and have a slightly higher upfront cost, but it demonstrates your commitment to responsible business practices and can have a real positive impact on smaller businesses.   We recognise there are many more great small businesses and social enterprises not listed here, and we encourage companies to expand their corporate gifting search a little this year to support as many as possible. Feena Kickhamm is Sustainability Adviser at Business in the Community Ireland 

As the winter sets in and temperatures drop, your staff may become more vulnerable to illness. Gemma O’Connor explains how to help reduce the spread of infection in your workplace While you can’t stop staff from getting sick, you can take steps to lower the risk of employee illness impacting your operations. The following steps can help keep your business up and running all winter. Clamp down on presenteeism While absenteeism causes its own problems, it’s a good idea to let staff know that it is okay to be ill. Many employees continue going to work while they’re unwell and infectious out of fear that not turning up will have a negative impact on their prospects with the organisation. This “presenteeism” (i.e. the pressure to be present at work) can be very damaging for you and your employee, however. Employees who continue working while ill will likely struggle to perform, prolong their illness, and pass it on to others. So, while you don’t have to manage without an absent employee in the short term, you could end up having more people off work sick in the weeks following their illness. Ventilate your workplace As a general rule, you should make sure your workplace is well-ventilated – especially in enclosed areas. If your staff work in a poorly ventilated enclosed space, it’s far more likely that infectious illnesses will spread. Ensuring your workplace has access to fresh air will help reduce the transmission risk. If you can’t open windows, you should have an air conditioner installed. The Health and Safety Authority has recently released a Code of Practice for Indoor Air Quality that goes into greater detail on how to maintain acceptable indoor humidity levels. Encourage staff to maintain a clean working environment Maintaining good hygiene practices at work will also help to reduce the risk of viruses spreading. It’s important to remind staff to be responsible for their hygiene by washing hands, covering their mouths when sneezing or coughing, and keeping surfaces clean. You could put signs around the office to remind staff to practise good hygiene, leave hand sanitiser on desks or provide a communal sanitiser, and offer protective equipment to staff. Review your sickness and absence policy If you don’t currently have a sickness and absence policy, you must set one up to comply with the Sick Leave Act 2022. Whether you have a standalone policy for sickness – or one policy outlining how you deal with all types of absences – it’s essential to have it in writing and to communicate it to staff. Having a policy gives you and your staff a process to follow if they think they might not be well enough to work. In your policy, you should outline: how to report a sickness absence; how often you’ll be in touch while your employee is off work; how you support employees who are returning to work after a sickness absence; and your statutory sick pay policy as required under the Sick Leave Act 2022. For 2023, your staff have a statutory entitlement to three days of paid sick leave. This entitlement is scheduled to increase to five days of paid sick leave in 2024. Your sick leave policy should set out the minimum payments for periods of certified sick leave, which is 70 percent of the employee’s usual daily earnings up to a maximum of €110 a day. Gemma O’Connor is Head of Service at Peninsula Ireland

Brexit has been with us for quite some time, yet challenges remain for businesses trading with the UK. Janette Maxwell outlines the practical considerations for Irish importers and exporters Recent CSO figures show imports from Britain to Ireland fell by 14 percent to €1.8 billion in August 2023 compared to August 2022, and exports from Ireland to Britain fell by 15 percent to €1.3 billion in August 2023 compared to August 2022. With imports and exports in decline, it’s hard not to look to Brexit and the challenges it has brought as the culprit. Here are some practicalities to consider when trading with Britain. Irish-based businesses unwilling to act as importers of record Where an Irish-based business sources goods from outside the EU, it may not be willing to take on the responsibilities associated with the importation. To secure these sales, the foreign supplier seeks an Irish VAT registration and an EU Economic Operators Registration and Identification (EORI) number to act as the importer of record on the basis the sales are subject to the incoterm, delivered duty paid. The foreign supplier is then responsible for the importation of the goods into Ireland and pays the import VAT and any customs duty arising from the importation. The subsequent sale of the goods by the foreign supplier is subject to Irish VAT, which is returned on the foreign supplier’s Irish VAT return, with the import VAT being claimed as input VAT. Subject to authorisation from the Irish Revenue, it may be possible for the foreign supplier to use postponed VAT accounting for the imports. Postponed VAT accounting for imports An Irish VAT-registered business may apply to the Irish Revenue for authorisation to use postponed accounting for imports. Where this is granted, an importer does not pay import VAT on the clearing of the goods through customs. Instead, the import VAT is included as output VAT in the Irish VAT return, with the importer claiming input VAT in the same return subject to the deductibility provisions. There is a requirement to include the customs value of the goods in the PA1 field of the VAT return and in the appropriate fields of the annual return of trading details, i.e. PA2 and PA3 or PA4. EORI numbers A business acting as the declarant when importing or exporting goods from the EU must have an  EORI number, enabling the EU Customs administrations to deal with customs-related procedures. An Irish-established business can obtain its EORI by applying to the Irish Revenue. However, a non-EU established business should request its EORI from the EU member state in which it first lodges a customs declaration or applies for a customs decision. Contracts that would result in a UK VAT registration obligation Should the Irish business sell goods on delivered duty paid (DDP) terms to a customer in Britain, the Irish business would have to deal with the importation of goods into Britain. Where DDP terms apply, the Irish business must appoint a UK-established agent and obtain a British EORI number. The Irish company would also have to register for UK VAT to pay over the UK import VAT arising and to charge UK VAT on the domestic supply of the goods to the customers in Britain. Postponing the UK import VAT Import VAT is typically payable at the point of importation into Britain. UK import VAT is liable on goods at the same rate which would apply to the goods had the supply occurred in the UK – i.e. 20 percent.   Like Ireland, the UK government introduced a measure allowing importers to operate a postponed method of accounting for the UK VAT. This means that the payment of import VAT can be delayed until the next VAT return following the date of importation. The Irish business would self-account for import UK VAT and – subject to the standard VAT recovery rules in the UK and its VAT recovery entitlement – would be entitled to claim a corresponding VAT deduction, potentially providing a cash-neutral position for the Irish business. It is important to remember that customs duty may also arise, which is non-recoverable and represents an absolute cost for the business. What’s ahead At the contract negotiation stage, it is vital that the Irish business understands the impact of the commercial terms to which they are agreeing and, if possible, negotiates more favourable terms which may avoid a UK VAT registration and the associated registration and compliance responsibilities. It is also essential to keep up to date with VAT legislative developments in the UK and seek UK VAT advice as required, in addition to Irish VAT advice. Janette Maxwell is a Director of Tax with Grant Thornton Ireland