With international tax reform progressing at unprecedented speed, Susan Kilty explains why Irish businesses must continue to participate actively in the discussion. With all the global uncertainty that Ireland is facing due to COVID-19 and Brexit, there is a risk that the OECD global tax reforms – the other major threat to Irish business and the economy – will be pushed further down the corporate agenda. But to do so would be very risky. Ireland must engage with this process now, at both the political and corporate level. The world of international tax is in a state of extreme flux as governments grapple with changes in the way multinationals do business. It is worth reiterating that Ireland has attracted healthy levels of foreign direct investment (FDI) over the past 30 years, and the multinational community has contributed significantly to our economic success. According to the OECD, Ireland received more foreign direct investment in the first half of this year than any other country. Along with Ireland’s near-iconic 12.5% tax rate, a crucial element in our continuing ability to attract international investment is the stability and transparency of the corporate tax regime here. Investors from abroad who establish activities in Ireland tend to be quite sensitive to changes in the taxation system. They like certainty and stability in a tax code, which is why Ireland presents such an attractive proposition. Ireland cannot afford to lose FDI as a result of turbulence in the global tax landscape at this time. As corporation tax accounts for almost 18% of Ireland’s total tax take, any change to the regime threatens to seriously undermine the attractiveness of our FDI model and negatively impact our revenue-raising ability. The crux of the matter is that we, and many other countries, apply 20th century tax systems to 21st century e-commerce business models. Businesses have an increasingly digital presence, and many no longer trade out of brick and mortar locations. This is not limited to so-called technology companies, but can be seen across industries and in businesses of all sizes. Businesses sell freely across borders without ever needing to set up operations abroad. This new digital way of trading is not always captured in our analogue tax rules, and the rules must be realigned with the reality of modern e-commerce. However, to tax a multinational business, you need a multinational set of rules. This is where the OECD comes in, but the uncertain shape that the new rules might take brings more uncertainty for businesses at a time when it is least needed. Many clients cite the changing international tax environment as one of the top threats to potential revenue growth. And although countries now face enormous bills for COVID-19, one sure thing is that BEPS, OECD and tax reform will not go away. International corporate tax reform is happening, and it will impact many businesses and our economy. Companies need to stay on top of these changes and prioritise the issues that will affect them. OECD proposals The OECD proposals offer a two-pillar solution: one pillar to re-allocate taxing rights and ensure that profits are recorded where sales take place, and a second pillar to ensure that a minimum tax rate is paid. At the time of writing, a public consultation is open for stakeholders to share their views with the OECD on the proposals that were recently summarised by way of two “blueprint” documents, one for each pillar. Pillar One seeks to give market jurisdictions increased taxing rights (and, therefore, increased taxable income and revenues). It aims to attribute a portion of the profits of certain multinational groups to the jurisdictions in which their customers are based. It does this by introducing a new formulaic allocation mechanism for profits while ensuring that limited risk distributors take a fair share of profits. Several questions remain as to how the Pillar One proposals, which constitute a significant change from the current rules, will be applied. Pillar Two, on the other hand, seeks to impose a floor for minimum tax rates across the globe. This proposal is very complicated. It is much more than a case of setting a minimum rate of tax. It is made up partially of a system that requires shareholders of companies that pay low or no tax to “tax back” the profits to ensure that they are subject to a minimum rate. At the same time, rules will apply to ensure that payments made to related parties in low-tax-paying or no-tax-paying countries are subject to a withholding tax. Finally, it can alter the application of double tax treaty relief for companies in low-tax-paying or no-tax-paying countries. Agreeing on the application and implementation of this pillar will be incredibly difficult from a global consensus point of view. Several supposed “safety nets” in Pillar Two are also likely to be of limited application. For example, assuming that the minimum tax rate is set at 12.5%, this does not mean that businesses subject to tax in Ireland will escape further tax. Similarly, assuming that the US GILTI (global intangible low-taxed income) rules are grandfathered in the OECD’s proposal, this does not mean that the US GILTI tax applies as a tax-in-kind tax for Pillar Two purposes. Pillar Two poses a significant threat to Ireland, as it reduces the competitiveness of our 12.5% rate to attract FDI and, coupled with the Pillar One profit re-allocations, could reduce our corporate tax take. The OECD estimates that once one or both of the pillars are introduced, companies will pay more tax overall at a global level, but where this tax falls is up for negotiation – and this is why early engagement by all stakeholders is critical. While the new proposals will undoubtedly have an impact, it is not certain that Ireland’s corporation tax receipts will fall off a cliff. Ireland has already gained significantly in terms of investment from the first phase of OECD tax reform, and this has helped to drive a significant increase in corporate tax revenue. But the risks must nevertheless be addressed. There is, of course, the risk that the redistribution of tax under the rules directly under Pillar One and indirectly via Pillar Two will impact our corporate tax take. But even if the rules have no impact on a company’s tax bill, they could still impose a considerable burden from an administrative perspective, and the complexity of the rules cannot be overestimated. At a time when businesses are grappling with other tax changes, led by the EU and domestic policy changes, this would be a substantial additional burden on the business community. The OECD is progressing the rules at unprecedented speed in terms of international tax reform. The momentum behind the process comes from a political desire for a fair tax system that works for modern business. However, does this rapidity risk the international political process marching ahead of the technical tax work? This is where Ireland, both government and corporate, needs to play a vital role. While the consultation period on both pillars is open, the focus for stakeholders should be on consulting with the OECD on the technical elements of its plan. Considering the OECD’s stated objective to have a political consensus by mid-2021, this could be one of the last opportunities for stakeholders to have a say in writing the rules. The interplay between the OECD and the US Treasury cannot be ignored when considering the OECD’s ability to get the proposals over the line. The US Treasury decided to step away from the consultation process with the OECD for a period in mid-2020. This, of course, raised questions around whether the OECD proposals could generate a solution that countries would be willing to implement. Added to this, the OECD has always positioned Pillar One and Pillar Two as an overall package of measures and has stressed that one pillar would not be able to move forward without the other. The “nothing is decided until everything is decided” basis of moving forward is a risky move, but the OECD recently rowed back on this stance. If the OECD fails to reach a political consensus by 2021, we could very well see the EU act ‘en bloc’ to introduce a tax on companies with “digital” activities. This could result in differing rules within, and outside of, the EU. It would also increase global trade tensions, all of which would not be good for our competitiveness. As a small open economy, Ireland will always be susceptible to any barriers to global trade. A multilateral deal brokered by the OECD therefore remains the best option – the last thing we want to see is the EU accelerating its own tax reform or, worse still, countries taking unilateral action. For the Irish Government, providing certainty where possible about the future direction of tax is critical. Where we have a lead is in how we provide that stability and guidance where we can. The upcoming Corporate Tax Roadmap from the Department of Finance will be an opportunity to give assurances in these uncertain times. Next steps for business The public consultation will be critical for businesses to have their say in shaping the rules. Ireland Inc. must continue to engage constructively with the OECD to try to shape the outcome so that we maintain a corporate tax system that is fit for purpose, is at the forefront of global standards, and works for businesses located here. Doing so would ensure that we articulate the position of small open economies like our own. Each impacted business must take the opportunity to comment on the proposals, as this may be the last chance to have a say. Indeed, what comes out of the consultation period may be the architecture of the rules for the future. We know that difficult decisions must be made at home and abroad in terms of the new tax landscape, and made with additional pressures we could not have foreseen 12 months ago. Although it may seem that much is out of our control, Irish businesses must continue to participate actively in the discussions and ensure that their concerns are heard. The game may be in the final quarter, but the ball is in our hands. Susan Kilty is a Partner at PwC Ireland and leads the firm’s tax practice. Point of view: Fergal O'Brien Since the start of the BEPS process in 2013, Irish business has recognised the importance of the work to our business model and the country’s future prosperity. At its core, BEPS has seen a further alignment of business substance and tax structures at a global level. This has resulted in an often under-appreciated surge in business investment, quality job creation and, ultimately, higher tax revenue for the Irish State. With its strong history as a successful location for foreign direct investment, and substance in world-class manufacturing and international services, Ireland was well-placed to benefit from the new global order. The boom in business investment, which last year reached over €3 billion every week, and increase in the corporate tax yield from €4 billion in 2013 to €11 billion in 2019, are evidence of the further embedding of business substance in the Irish economy. The current round of BEPS negotiations will have further significant implications for the Irish economy, and particularly for the rapidly growing digital economy. Ibec is working directly with the OECD to ensure that any further changes to corporation tax recognise the central role of business substance and locations of real value creation. Fergal O’Brien is Director of Policy and Public Affairs at Ibec.  Point of view: Norah Collender The OECD’s proposals to address the challenges of the digitalised economy will have a disproportionate negative impact on small, open exporter economies like Ireland. Earlier consultation papers issued by the OECD on taxing the digitalised economy suggested that smaller economies could benefit from international tax reform emanating from the OECD. However, the OECD now openly admits that bigger countries stand to benefit from its proposals more than smaller countries, and the carrot has turned into the stick in terms of what will happen if smaller countries do not support the OECD. Ireland is acutely aware of the dangers ahead if countries take unilateral action to achieve their vision of international tax reform. But that does not mean that countries like Ireland should be rushed into accepting international tax rules that fundamentally hamstring Irish taxing rights. Genuine consensus must be reached to ensure that international tax reform is sustainable in the long-term. Likewise, the new tax rules must be manageable from the multinational’s perspective and from the perspective of the tax authority tasked with administrating the rules. A rushed outcome to the important work of the OECD will make for tax laws that participating countries, tax authorities, and the all-important taxpayer may not be able to withstand in the long-term. Norah Collender is Professional Tax Leader at Chartered Accountants Ireland. Point of view: Seamus Coffey How Pillar One and Pillar Two of the OECD BEPS Project will ultimately impact Ireland is uncertain. One sure thing, however, is that there will be changes to tax payments. This will be a combination of a change in the location of where taxes are paid and perhaps also an increase in tax payments in some instances. But there will likely be both winners and losers. From an Irish perspective, there might have been some comfort in that the loser could have been the residual claimant – the country at the end of the chain that gets to claim taxing rights on the profits left after other countries have made their claim. As US companies are the largest source of Irish corporation tax revenue, it might have been felt that most of the losses would fall on the US. However, significant amounts of intellectual property have been on-shored here. Ireland, therefore, has become a residual claimant for the taxing rights to some of the profits of these companies. At present, Ireland is not collecting significant taxes from these profits as capital allowances are claimed. If BEPS results in a significant reallocation of these profits, we might never collect much tax on them. Seamus Coffey is a lecturer in the Department of Economics in University College Cork and former Chair of the Irish Fiscal Advisory Council.

Six Chartered Accountants assess the events of the past year and consider what could lie ahead as the New Year approaches.2020 has changed the trajectory of many lives. Some have seen their careers go in unexpected directions while others have adjusted to the new working world around them. No-one can say that they have escaped unscathed by the events of this year, personally or professionally. Patrick O’Sullivan Greene, Jude Fay, Declan Walsh, Fiona Byrne, Henry Duggan and Jennifer Harrison explain their challenges and triumphs from 2020, the changes to their personal and professional lives during the pandemic, and their predictions for the New Year. Remote working goes mainstream For Patrick O’Sullivan Greene, author and activist shareholder, 2020 has taken him away from the office, colleagues, family and friends, but a changing business world had prepared him for remote working. When COVID-19 announced itself on the world, I had already been a member of the remote working community for a number of years. When I started working in my native Killarney after returning from London, I was able to take advantage of the strong communication network in Kerry, the two direct flights a day to London and a good rail connection to Dublin. As a director of an activist fund that has invested in quoted companies across Europe and being involved in a number of early-stage businesses in Ireland and France, I was still able to conduct business from a distance.  Remote working, of course, has now become more mainstream. This has been facilitated by the rapid growth in shared office providers across the country and the ‘internationalisation’ of rural Ireland. The opening of the Box CoWork space in Killarney, combined with an emerging coffee culture in the town, has given me access to a community of similar-minded people. The enforced lockdowns have brought a major change to my work life; no office, no travel, no coffee. Of course, this is a minor inconvenience next to the impact the pandemic has had on many other people’s lives. But, COVID-19 has not just impacted negatively on my work life. I have not met some close friends and colleagues in nearly ten months, including the parents of one of my godchildren, and I am unlikely to meet them for another six.  However, there have been compensations. I was able to put the final touches to my first book – Crowdfunding the Revolution: The First Dáil Loan and the Battle for Irish Independence, the story of the founding and funding of the well-known start-up called Ireland. Going forward, I expect some structural changes in the post-pandemic world; more remote working, less international travel and a greater appreciation for the environment. Humans are social animals and we will adapt as necessary.  It is important that the Government continues to provide support to SMEs, in particular the retail, pub, restaurant and wider tourism sector. We need to ensure those businesses make it through to the other side. Embrace transformation Jude Fay, a psychotherapist and supervisor in private practice in Co. Kildare, considers the challenges and opportunities faced by the mental health sector this year and outlines the important changes she plans to make in the years ahead. Previously, psychotherapy services, therapist training and CPD were mostly delivered in person. Like other industries, we have had to adapt to providing services online. Psychotherapy can be delivered online, but it is not the same. We lose some of the visual clues, such as body language. However, the transformations are not all bad. There is greater awareness of the importance of mental health. For some, online access makes it easier to engage, both practically and emotionally. Services online do not rely on physical proximity. For practitioners or clients in rural areas, this offers greater choice. But since the pandemic began, I have been very aware of a free-floating grief, and hear others in the profession saying the same. A sense of confidence and certainty has been lost. While, intellectually, we know the future is always uncertain, the pandemic has brought that uncertainty much closer. COVID-19 losses are not just the obvious ones. I believe this pandemic is an opportunity to reflect on what is important, to look at where our lives have become unmanageable and take action to change that. Personally, the biggest impact has been the inconvenience and a restriction of my normal movements. A couple of friends contracted the virus but, thankfully, I have not lost anyone to it. A good friend died in April, and I was unable to attend the funeral. My mother was hospitalised shortly before, and again during, the lockdown, and the family was unable to visit her. Those experiences were very hard.  On a lighter note, I turned 60 this year and had many plans for celebrating, most of which had to be shelved. I should be preparing to travel to South America, but clearly that’s not going to happen! Going forward, I will look for the joy in each day and be mindful of my many blessings. I will connect more with loved ones, let small things go, and appreciate my good health.  Adjust accordingly Declan Walsh, founder of Deferno Solutions, the Chartered Accountants Northwest Society and The Neurology Support Centre, reflects on the drastic changes the charity sector was forced to undertake in 2020 and what all organisations should look forward to in 2021. COVID-19 has, and will continue to, negatively impact the charity sector. Not only has it had an impact on the charities’ ability to fundraise, but the more direct impact has been on the actual provision of services to the end user. Over the next 12 months, charities will have to think differently about how services can be provided. New service delivery platforms will become the new short-term norm. While not ideal, the move to online service provision is becoming necessary and differing skillsets are needed. At the Neurology Support Centre, we have just launched, in conjunction with Spectrum Life, an online counselling and wellbeing service for users and their families, which provides 24/7 confidential access to a range of services. Strategic planning, both from a business and charity perspective, has been turned upside down over the past year. The five-year plan is now often replaced by a five-month or five-week plan. However, it is critical that board and management teams review their long-term goals and make sure that the short-terms goals are equally aligned. The near future will continue to be uniquely challenging as we emerge slowly from COVID-19 restrictions, restart the economy, and deal with Brexit. However, this change to a new norm has, in many cases, provided time to reflect on what may be a person’s main motivator in life. Ultimately, it is all about people, connecting directly, listening, understanding and being more empathic and, perhaps, relegating the necessary, but invisible, forms of instant communication and social media to a more secondary place. Whether as the founder of a charity, or as a financial advisor, the same rules apply. You must not only listen, but also hear what is being said, and adapt accordingly. Find value in community relationships Fiona Byrne, Director of James Byrne & Company, has found that, while this year has presented challenges, it has also strengthened her relationships with her clients, community and colleagues, and given her a better work-life balance. Our industry was transformed overnight – the move to remote working has definitely been the most significant challenge. The majority of our team had previously operated entirely from the office, so there was an immediate need for IT infrastructure to be mobilised to our teams’ homes. This added to the uncertainty and stress at the time. Luckily, we had already begun the process before COVID-19 hit. It is incredible how people across the age spectrum and industries have been able to adapt and demonstrate an agility that, perhaps, we knew we had but never truly tested before.  Despite this, we all miss the social aspects of the traditional office environment, of course. Although technology keeps us in touch, the lack of daily in-person contact has been tough and I am very conscious of the mental health and wellbeing of our team. Assuming this is the new normal, we need to work on how we can continue to build our office culture while taking in these new ways of working. The current circumstances have really demonstrated the value in relationships, and I take great pride in the fact that my company has offered support to both our clients and community.  Looking at my own life, remote working allows for additional flexibility, less time is spent commuting and more time is spent with my family. I have noticed that as our professional and personal worlds have become blurred, people were extremely accepting and understanding. At the end of the day, we all have various family commitments and the fact that everyone went through this together meant that we all learned a little bit more about each other.  2021 looks challenging but, hopefully, the New Year will bring a fresh sense of optimism and new ideas. As we approach Christmas, I am mindful that we will need to be focused on people taking a break – it is clear we all need to refresh.  On the whole, the combination of virtual working and people’s adaptability is a positive development for our industry, and new innovative ideas will emerge that allow us to be fully compliant and work more efficiently. I believe remote working is here to stay and, if used properly, will allow accountants to become more efficient and have a better work-life balance.  Secure a different future Jennifer Harrison, sole practitioner at Jennifer Harrison Chartered Accountants, left the security of a “guaranteed monthly income” to set out on her own in September, leading her to walk down a more fulfilling professional path. The pandemic has probably been one of the biggest life-changing events for me professionally. Like many others, 2020 started full of optimism, working in full-time employment with the opportunity of promotion in sight. This pandemic threw a spanner in the works with cutbacks, increased workload and home-schooling. I was forced to re-evaluate the priorities in my life, allowing me the opportunity to see a different future professionally. I was a firm believer that security was in the form of a guaranteed monthly income, but this year has proven that nothing is guaranteed. Life is full of curve balls and we need to learn to change and adapt as they come.   This change in perspective encouraged me to set up my own practice. It has only been a few months since I opened my doors, but I can already see the benefits along with a steady increase in interest and commitment from new and future clients. Although the pandemic has prevented the face-to-face interaction with clients, it has allowed many clients to experiment with online communication, expanding my customer base. It has also allowed me to work alongside some amazing organisations, offering online support to businesses in Donegal. This is something I really enjoy doing and now, I hope to expand my business to include online training and support as a standard service (but it’s early days).   I have to say, this year has been challenging personally. Restricting movements, fear for the health of my loved ones, reducing my social life and so on, but it has taken me down another, more fulfilling path professionally. This is a big step for me, which is scary and exciting all at once. Utilise the tools you have Henry Duggan, Managing Director of EMEA Financial Services at FTI Consulting, has found that the agile nature of his job was ready-made for remote working, leading to greater collaboration and creativity on his team. COVID-19 has highlighted the need for flexible solutions to meet client demands. My work primarily focuses on sensitive, multi-jurisdictional investigations relating to money laundering, terrorist financing and breaches of international sanctions. My organisation has been extremely proactive in exploring how technology can facilitate such investigations during the current pandemic and been very successful in that respect. My team is leading multiple remote investigations across many jurisdictions, and COVID-19 has emphasised the need to embrace new ways of working and think about more creative tools and solutions. I relocated from the Middle East in March, so I have worked from home since then. FTI Consulting has invested in forensic technology, which has ensured that I (and my team) have been able to continue conducting our investigations work since then. Notwithstanding the inability to socialise and travel, I have found that my ability to respond to client needs has been unaffected due to advances in this firm’s forensic technology. And, while normal face-to-face interaction has been lost during the pandemic, I have found that many colleagues have embraced virtual meetings, and this has led to greater collaboration and creativity. Sure, the casual coffee chats and unexpected catch-ups have been lost, but productivity has increased in my view. Personally, given the agile nature of the work that I conduct, I don’t anticipate any major changes in the coming year. The biggest change that I have experienced so far is in relation to conferences and seminars. Previously, I would travel to other countries to deliver lectures on financial crime and money laundering. However, the increased prevalence of webinars has been refreshing and has reinforced the importance of distance and blended learning. The tools are there if you’re prepared to adapt and use them.

Julia Rowan answers your management, leadership, and team development questions. Nine months after we started to work from home, I’m beginning to worry that my team is becoming fragmented. How can I stop that happening? Since September, I have noticed a significant change. Up to the end of the summer, lots of people were delighted that they didn’t have to commute or buy expensive lunches. Now, many long to be with their colleagues and have those informal catch-ups that knit teams together. They want to ‘go home’ rather than ‘be at home’. We have mostly defaulted to online options but meeting outside for a ‘walk and talk’ meeting (guidelines permitting) is still possible. Some find that the change in setting and activity can lead to deeper conversation and connection. If online is the only (or primary) option, think about how you can create a connection. Online picnics, coffees, or beers are nice – but think about your scheduled meetings and make space for people to talk about how they are doing. You want real discussion as opposed to ‘false positive’ engagement, which can be stressful. And the leader goes first because being honest about your experience permits the team to be honest about theirs. Don’t get stressed about the things you can’t fix. You can create a connection, and you can listen. Your one-to-one meetings are also important, so make sure that the ‘How are you?’ conversation is always high on the agenda. I was recently put in charge of a team. I love the extra responsibility, but I hate giving feedback. How can I shake this fear? Being in a position where you are leading, making decisions, distributing work, and giving feedback is both exciting and challenging. Remember that your team members have a right to know how they are doing. Their development is important, and your feedback counts. One reason why managers don’t give feedback is that they feel they don’t have permission. So, here is a framework for a conversation that can help you do just that: Context: provide the rationale for giving feedback. For example, “You’ve taken on some challenging projects” or “There is a lot of change happening” or “It’s going to be particularly busy coming up to year-end”. Conversation: outline the conversation you want to have. For example, “For that reason, it will be important for us to stay close; to talk about what’s working well and adding value, and what’s not working well and could be changed”. Consent: clear the path to provide your feedback. For example, “Would that be okay with you?” Your team members want, expect, and have a right to feedback. Reflect on how sharing feedback will be useful for both of you, and find the positives. Intention always wins out! Julia Rowan is Principal Consultant at Performance Matters, a leadership and team development consultancy. To send a question to Julia, email julia@performancematters.ie 

Torunn Dahl and Glenn Gillard share the secrets to purposeful inclusion, which in these challenging times is more important than ever. Good leadership has never been easy. If it were, we would all be good leaders most of the time and organisations would not need to spend millions each year developing leadership skills. In reality, leadership is always a delicate balance of making the best decisions possible given the information to hand while taking into account the context, the strategic imperatives of the organisation, and the stakeholders involved in or impacted by the decisions being made. Operating in an environment of enormous unpredictability, wrought by a pandemic, makes this challenging task even harder. Never before has that well-worn phrase from financial services advertisements, ‘past performance does not guarantee future success’, been truer. There is no quick guide to leadership for these times. We can choose many possible routes to survive or thrive in the period ahead, as we learn to operate in an environment of ongoing uncertainty and volatility. This article will outline some steps you can take to ensure the route you choose is one of inclusive leadership, to the benefit of all your key stakeholders. A new social contract In the August issue of Accountancy Ireland, our colleagues outlined how people at the start of their accountancy careers seek a broad sense of purpose in the work they do. Similarly, in society, we have seen a significant change in people’s awareness of – and lack of tolerance for – the inequalities that exist in society. There is an opportunity to reset the path we are on as a society, to reduce systemic inequalities and become more purpose-led. Last year, 200 global CEOs, including Punit Renjen of Deloitte, signed a statement of purpose. It confirmed that a corporation’s purpose is to serve all its stakeholders – employees, clients and society. The COVID-19 pandemic and the Black Lives Matter movement have reinforced the message from the general public that business cannot be a neutral bystander. Business should, and can, be at the heart of this new social contract, and business leaders need to embrace this change. This reset to how society operates and meets the expectations of its citizens will require different types of leaders to navigate and drive the changes. In addition to the critical skills associated with good leaders such as strategic thinking, commercial acumen, decisiveness and effective communication, leaders will need to understand how to be genuinely inclusive in a broad sense. They will need to understand how a change to the social contract could impact their talent pipelines, customer relationships and supply chains. How will the decisions they make today impact their ability to retain customers, attract staff, reduce their carbon impact and sustain their business viability into the future? A model of inclusive leadership provides a framework for leaders to think about the thought process and the actions they need to consider to navigate the difficult decisions they now face. In the section below, we outline the six signature traits of an inclusive leader, as identified by Deloitte, and some suggested practical steps a leader can take to operate inclusively. The six signature traits Inclusive leadership is about treating people fairly and leveraging the thinking of diverse groups of people. While leaders must treat their people fairly, a genuinely inclusive leader in a new social contract will seek to ensure that people outside the organisation are also treated fairly. They will do this by providing opportunities for them to join the organisation or sell their goods/services to the organisation on fair terms. The examples below focus on what an inclusive leader can do inside their organisation. 1. Commitment. Highly inclusive leaders are committed to the inclusion agenda because these objectives align with their personal value systems and because they believe in the business case and moral case for inclusion. Practical steps: Put inclusion on the agenda at your meetings and hold people to account on actions agreed. Set targets, and encourage debate and discussion around what the right targets are and how to meet them. Attend diversity and inclusion events within and outside your organisation. Share new knowledge with your teams and outline the actions you will take. Reference an inclusion story or moment as part of every presentation you make. 2. Courage. Highly inclusive leaders speak up and challenge the status quo. They don’t walk past inequality; they challenge it. They are willing to admit to their own vulnerabilities and remain humble about their strengths and weaknesses. Practical steps: Speak up and challenge any inappropriate behaviour you see or hear. Others may feel equally uncomfortable and are likely watching to see whether you condone (through silence) or challenge the behaviour. Apply a diversity lens to everything you do – use a checklist if necessary as a prompt. Think about your next event or meeting. Who is talking? What images are being presented? Which metrics are being used? Do they all support an inclusive environment? 3. Cognisance. Highly inclusive leaders are aware that they, and everyone else, have biases that impact their judgement. They seek to ensure that processes are put in place to manage and overcome these blind spots and to create fairer opportunities for all. Practical steps: Seek to identify your own biases. Take the Harvard Implicit Association Test or pay attention to who you naturally gravitate towards and with whom you feel less comfortable. Pay attention to your inner voice and initial judgements and ask yourself whether biases are coming into play. We all have them! Use structured processes and criteria when making decisions that relate to people (hiring, promotions or performance, for example) to ensure objective criteria are used rather than generalised impressions. 4. Curiosity. Highly inclusive leaders keep an open mind and have a desire to learn more about others. They want to understand how they view and experience the world. They also demonstrate tolerance for ambiguity and change. Practical steps: Seek out someone on your team you don’t know well or who has a different background to yours. Put in time for coffee to connect and learn more about them. They could be the perfect person for your next project or have valuable perspectives on a problem you’re grappling with. Invite different people to present to your team or organisation to broaden everyone’s perspective. Remember to suspend judgement when listening to other perspectives; seek to listen actively and understand. Acknowledge what they are saying and respect their viewpoint. 5. Cultural intelligence. Highly inclusive leaders are confident and effective in cross-cultural interactions. They may feel uncomfortable in the situation but are willing to move out of their comfort zone and focus on learning, seeking to build their cultural intelligence. Practical steps: Start by focusing on a culture or area that interests you. Search for articles and podcasts that will broaden your understanding and seek out people who can answer your questions and build on what you have learnt. Encourage people within your teams and organisation to build out their cultural intelligence, supporting mobility opportunities where relevant. 6. Collaboration. Highly inclusive leaders empower individuals to deliver their best, in addition to working across diverse groups of people to drive better solutions built from a diversity of thought. Practical steps: Let others speak first. Ensure that you have heard from everyone in the group, actively encouraging people to contribute if they haven’t already done so. Find common ground and articulate a shared purpose and objective for the group that everyone can rally around. Create physical and/or virtual opportunities for interactions that encourage sharing and collaboration. Purposeful inclusion in a pandemic The COVID-19 pandemic presents both challenges and opportunities in building an inclusive culture and following-up on commitments our businesses have made to be more inclusive. The last few months have stretched everyone and how we act as leaders, now and in the months ahead, will influence how well our organisations, our people, and we personally come through this pandemic. It may be tempting to take a short-term view and focus solely on profits and cash flow to the detriment of suppliers, employees and the local community. But those who take a longer and more inclusive view are likely to reap the rewards, as will their communities. As organisations transition to being more purpose-led than solely profit-focused, their ability to navigate the current environment inclusively to the benefit of society more broadly will be a real test of their authentic commitment to this cause. Using the traits above, we will now explore some of these challenges and opportunities. Commitment: In the short-term, it is easy to step away from the commitments we have made. Many organisations have implemented, or are looking at, measures such as reducing headcount, suspending bonuses and promotions, and deferring hiring decisions. It is important to consider these decisions in the context of inclusion and look at how these measures are implemented and affect the future shape of the organisation. During the last recession, we saw a significant reversal of some of our key diversity measures, as women stepped away from the workforce to work in the home and as many employers reverted to traditional talent pools for staff. Cognisance: Biases can quickly step back into our thinking when faced with tough decisions or working under pressure. In the working from home environment, anecdotal research already indicates biases towards female participation. As women are traditionally viewed as the primary home-maker the risk of ‘killing with kindness’ escalates as individuals make assumptions as to whether someone can handle the workload or should be given specific work because of their family situation. While having progressive policies to support people during the pandemic has been important, this must be monitored so that it does not feed through to future decisions around performance, promotion and recognition. We must recognise, and seek to work through, these potential biases. Collaboration: During this pandemic, many organisations have reported increased engagement from staff and a greater sense of belonging. However, as the lockdown measures persist and remote working is more prolonged, maintaining a sense of ‘team’ and keeping people connected becomes a more significant challenge. Through organisation-wide collaboration, new models and methods for engagement, networking and social interaction can be developed. Indeed, there is a real opportunity to break away from our default methods of corporate social interaction in Ireland, which focus heavily on the dinner and pub scene and favour those willing (and able) to socialise after hours. Capturing new ways of interacting and building them into a new, more inclusive culture is an opportunity to redefine the workplace for many that traditionally felt excluded. Courage: Undoubtedly, the forced working from home arrangement arising from the pandemic presents a real opportunity to rethink how we look at biases around presenteeism, flexible working, and the office culture, and to re-imagine fundamentals like the daily commute and international travel. While these benefits seem obvious at this point, it will require courage to stay the course and implement the necessary changes so that these benefits can be retained as we move out of the pandemic. For example, if we are to move to more hybrid models with a greater level of remote working mixed with in-office teams, maintaining the inclusiveness of a meeting for those in-office and those at home will need to be supported by real leadership. The fear that we fall back into the old ways, where if you are not in the room you are not really participating, is already being expressed by many as they assess whether they could continue to work remotely into the future. Redefined leadership The relationship between community, employees and businesses has changed, and as leaders, we will be held accountable by our people. Truly inclusive leaders will thrive in this environment and make an impact not just within their own business, but across the community. The pandemic has challenged the way we look at the world and our role within it. We now need to seize the opportunities presented, and avoid the pitfalls, to create more inclusive organisations.  Torunn Dahl is Head of Talent, Learning and Inclusion at Deloitte. Glenn Gillard is a Partner at Deloitte and member of Council at Chartered Accountants Ireland.

Rachel Hussey explains how well-defined and inclusive work allocation practices can boost your colleagues’ career potential. One of the most common and unconscious ways in which old hierarchies are preserved in professional services firms is through the allocation of work, often at the early stage of careers. A well-defined work allocation process ensures a balanced portfolio of experience for future progression. But suppose a person is consistently allocated more challenging projects involving novel issues or premium clients. In that case, their career path is likely to take quite a different course to that of a person assigned more routine tasks, which can result in tremendous and unintended damage to the career paths of individuals. Research conducted by McKinsey in the UK in 2012 across professional services firms found that a man was three times more likely to be made a partner in an accountancy firm than a woman and ten times more likely in a law firm. McKinsey made several recommendations to address the imbalance, one of which was that women have equal access to the right career development opportunities through a systematic work allocation process based on objective criteria, such as competencies or experience. Work allocation goes to the very heart of the operation of a professional services firm. Changes to work allocation practices are hard to implement, but can have a considerable impact on the progression of female talent. McKinsey conducted follow-up research in 2015 and found that work allocation was an ongoing challenge. 70% of women in both law and accounting firms said that their firm’s work allocation process was unfair, and 86% of law firms had no formal work allocation process in place. In the absence of a systematic process, work allocation is a subtle concept that can be difficult to do in a way that promotes diversity and creates a level playing field for men and women. In deciding to whom work should be allocated, partners can make assumptions about women’s desire or capacity to do certain kinds of work or transactions. The result can be to ‘kill women with kindness’ by allocating the more challenging work to men on the team so as not to put too much pressure on a woman. A woman can ultimately end up with less experience, weaker client relationships, and lower revenue – all of which are career-limiting in a professional services firm. This phenomenon is also referred to as unconscious benevolence. Research conducted by the 30% Club in Ireland across 14 of the top Irish professional services firms in December 2019 contained some fascinating findings. For example, 21% of equity partners in accountancy firms are women, and that figure is 40% at the non-equity partner level. The research found that only four of the 14 firms that participated in the research had a formal work allocation process in place. On foot of that research, the 30% Club recommends that where firms have not adopted work allocation policies, they should pilot the introduction of such policies. They should also review work allocation practices to ensure that equal opportunities to gain expertise and experience are available to all. Finally, it urges firms to ensure that family-related absence does not impact work allocation and recognise leaders who successfully manage work allocation on their teams. Across professional services firms internationally, work allocation processes are becoming more formal and technology-enabled. Many resource management consultancies provide services and systems to firms to assist in this critical aspect of a firm’s work. Formal processes can have a significant impact on the development of female talent in firms and should, therefore, be considered as part of a firm’s diversity strategy.     Rachel Hussey is Chair of 30% Club Ireland and a Partner at Arthur Cox.

A lot of work today simply can’t be done well without high-touch collaboration – a challenge when many people are working from home. New tools are helping, though, write Ryan Kaiser, David Schatsky and Robin Jones. The pandemic, with an impact lasting far longer than initially expected, is forcing organisations to rethink how their teams can collaborate from a distance. Some widely used digital tools make certain forms of collaboration – such as sharing and editing documents – easy. But other, critically important types of collaboration remain challenging when colleagues are not sharing physical space, or even time zones. Organisations can experiment with a newer breed of tools, some still experimental, that aim to support remote, high-touch collaboration. In view but out of sync “Did he hear what I just said?” “Was that a smirk?” “She’s looking down – is she texting?” It’s safe to assume that these questions cross the minds of many workers during days of endless video calls. The concentration required to process these virtual interactions can be taxing, leaving workers exhausted. But with so many professionals working from home due to the pandemic, it’s imperative that organisations find effective ways for remote workers to collaborate. New technologies are answering this call: from immersive environments to virtualised offices that facilitate casual interactions, organisations may soon have many more options for helping their teams collaborate effectively at a distance. Collaboration is key, but challenged by remote work Most organisations accept that effective collaboration is essential for high performance. Apple leaders considered collaboration to be so important that they designed its headquarters building to promote creativity and collaboration. Even workers’ perceptions that they are working collectively, according to a 2014 study, can enhance their performance. Thus, collaboration activities are pervasive in the modern office. Indeed, some researchers believe “collaboration is taking over the workplace”, with time spent by managers and employees in collaborative activities increasing by 50% or more in recent years. It’s no surprise that collaboration is among the soft skills that employers seek most. But with the pandemic forcing millions of people to work from home, collaboration has become more challenging. Remote working obscures body language and distorts verbal cues that can be crucial to understanding intent. Formal, scheduled video calls – or more frequent instant messages or texts – are no substitute for quick, spontaneous exchanges of information. Professionals working in sales, customer service, management, design, and other roles in which impromptu and collaborative interactions are integral to the job may be particularly challenged. Some workers feel isolated. Managers are struggling to onboard, integrate, and teach office norms to new staffers, and building and sustaining an organisation’s culture has rarely been more difficult. Even when the crisis is behind us, the need for better remote collaboration will persist. High-touch collaboration still works best in person Of course, many, even most collaborative activities don’t require face-to-face interaction. A wide range of digital communication and project management tools support sharing files, editing documents, and communicating project status. But other valuable collaborative activities – scrum meetings for coordinating software development, brainstorming sessions to generate product ideas, hallway conversations to quickly exchange useful information – have tended to rely on face-to-face interactions. We call such activities high-touch collaboration. High-touch collaboration activities are typically synchronous, spontaneous, or sensory. Synchronous means two or more people are present in the moment when the activity is conducted, allowing for a free-flowing exchange of information. Spontaneous means unscheduled, low-overhead interactions that may occur outside the confines of a formally scheduled meeting. Some of the best ideas, and even businesses, started as impromptu thoughts or interactions between colleagues. Sensory refers to the non-verbal communication or body language we unconsciously decipher when interacting with others. Arm positions, posture, and tone of voice can influence how or when others choose to engage with or respond to us. Leaders can use this simple three-S model to identify the high-touch collaboration activities in their organisation that remote working arrangements may impair. Below are some common examples. They are important in our work and the work of many of our clients – and they can be difficult to perform when collaborators are just faces on a screen. Structured, interactive sessions. Some types of workshops or labs, employing techniques such as design thinking, aim to solve complex problems or help a group achieve consensus on a designated topic. In addition to typically needing a skilled facilitator, participants often need to read the room to assess group understanding, alignment, and engagement. Example: a lab may be used to forge consensus about the vision of a new firm-wide initiative. Ideation and co-creation. Many workers need to brainstorm and exchange information spontaneously, typically in a shared space with a visual aid such as whiteboards or sticky notes. Example: co-creation may be useful for brainstorming new product features to include in future releases. Spontaneous information exchanges. Employees may need to exchange information directly outside a formally scheduled meeting – perhaps as quickly and casually as poking one’s head in an office to ask a brief question. Example: spontaneously exchanging information with colleagues can be helpful when finalising an important client presentation. Informal connections. Conversations that typically take place in the elevator, office kitchen, or other common areas can foster a sense of connection and community; walking the halls can help cultivate relationships with clients and co-workers. Informal connections tend to rely on interpreting sensory and contextual information. Example: managers may informally check in with teams during a stressful time period to gauge well-being and engagement. To bolster collaboration among remote workers, we need tools that provide better support for these kinds of activities. Collaboration tools are proliferating A new crop of digital collaboration tools has emerged in response to the needs of companies with remote workforces. Vendors launched or enhanced at least 100 digital remote collaboration products in the first eight months of 2020, compared to the 24 product introductions we tallied in the fourth quarter of 2019. Established collaboration vendors are rapidly rolling out new features in response to user requests, and some have released free versions of products in an effort to gain market share. Some of this activity involves familiar categories of collaboration tools such as video-conferencing. Other types of tools – such as digital whiteboards, virtual offices, and immersive environments – may be less familiar, but they can provide crucial support to synchronous, spontaneous, and sensory collaboration activities. We scanned the offerings of hundreds of vendors and spoke with more than a dozen of them to learn more about their capabilities. Video-conferencing. When the COVID-19 pandemic forced millions of workers to work from home, many companies responded by substantially increasing their use of video-conferencing Google, Microsoft, and Zoom have all reported a surge in usage of their platforms. Allowing colleagues, clients, and partners to see each other over video can mitigate the feeling of isolation that some remote workers feel and can build and maintain the rapport crucial for collaborative efforts. Recent innovations in this category include the use of artificial intelligence to frame a caller’s face, background obfuscation to prevent distractions, and the use of avatars. But video-conferencing has its drawbacks. Not all work interactions occur in the confines of a formal meeting. Any given video-conference likely includes at least one participant battling audio and video quality issues, including lags that can jumble non-verbal cues and distracting background noise – especially for people sharing space with partners and children. Workers also report feeling exhausted at the end of a day filled with numerous video calls due to the mental focus required to concentrate on a grid of colleagues. Ideation and whiteboarding. Because it supports problem-solving, design, and strategic planning, ideation can be a critically important collaboration activity. A classic setting features a blank whiteboard, markers, and a team with ideas to share. Vendors such as Microsoft, Miro, and Mural offer digital tools that aim to provide the benefits of in-person ideation in a remote environment. Such tools typically feature an interactive workspace designed for visually oriented ideation and problem-solving. They are best suited for co-creation and ideation activities but can also be used to facilitate labs and similar sessions. A variety of features help spur thinking. For example, users may have access to templates or frameworks tailored to a variety of meeting types such as a scrum call or a design thinking session, time-keeping features to keep a group focused, virtual sticky notes to jot down ideas, and polling to streamline the decision-making process. These tools share little contextual information about users, however, making it hard for facilitators to read a room and determine how to best engage participants. Legibility can sometimes be difficult, and employees may need to consider a touchscreen, stylus, or other peripheral to maximise their capabilities. Virtual offices. Other types of tools attempt to replicate office spaces on your computer screen. Virtual offices are intended to run continuously in the background, showing in real-time what your colleagues are doing through the medium of digital aerial views of office floor plans, avatars, or even 3D worlds. And they aim to emulate the natural, rapid types of interactions that frequently take place in a physical workplace like tapping someone’s shoulder to ask a question. These platforms display context about colleagues – are they meeting with a client right now, or are they listening to music? – and they provide multiple pathways by which co-workers can informally connect. Sample virtual office vendors include Pragli, Sococo, Virbela, and Wurkr. Virtual offices typically allow significant customisation (avatars, floor layout, branding, etc.) and integrate with a growing list of social and collaboration applications one might use throughout the workday, such as Microsoft Teams, Slack, and Spotify. These vendors also enable informal interactions through emotive digital gestures such as high-fives or dance movements, allow users to tap each other to instantly join a virtual meeting room, and offer the ability to lock spaces for more private conversations. Many also allow screen-sharing and the uploading of files. Some virtual offices currently lack the ability to integrate with common office software such as Google or Microsoft and may lack common ideation mediums such as whiteboards. Some tools use much of a laptop’s processing power when rendering a 3D office, potentially affecting other applications. Immersive environments. This is an emerging category of tools that aim to enable workers to connect, share experiences, and participate in simulated real-life scenarios using augmented or virtual reality (AR/VR) technologies. Some studies have shown that VR is a promising medium for remote collaborative work. Users experience a 3D shared environment where they can see representations of themselves and colleagues and conduct meetings. Immersive environments are best suited for interactive sessions and co-creation/ideation. The virtual environments provided by tools such as Arthur, HoloMeeting, and Spatial can range from basic rooms to non-cubical architecturally complex spaces that expand creative possibilities. Some vendors make it possible for users to take a selfie and upload and wrap the image around an avatar for a personalised, life-like presence. Combined with spatial audio and visible mouth or hand movements, these technologies can give one the impression of being in the same space as a colleague. Interacting with the environment and accessing menus using one’s hands or controllers is highly intuitive. Typical features include 2D or 3D whiteboarding options, 3D process flows, and the ability to access content from the web, including images and 3D models. While some platforms are accessible by smartphones and laptops, the full experience is typically only available with the use of an AR/VR headset – a factor that may limit adoption in the near term. Early-stage tools may suffer from distracting latency – or lags in refreshing the display – or lack integration with other applications, which limits the type of work one can do, such as co-edit a PowerPoint slide, and most have smaller capacities (usually under 20 participants) when compared to virtual offices. What to watch The descriptions above are a snapshot of a rapidly moving market. Progress in the underlying technology of AR/VR, and increasingly affordable hardware, will likely boost the appeal of immersive environments over the next couple of years, for instance. Other developments in the domain of remote collaboration are worth watching. New features. With so many workers affected by the pandemic, collaboration vendors are quickly responding to user needs and rolling out new features. For instance, Microsoft recently deployed ‘Together mode’, using AI to place meeting participants side-by-side as if they were sitting in a virtual auditorium. Other advances include attention tracking, which alerts a host if an attendee goes more than a few seconds without having an application open; intelligent capture, which can make a person’s video image transparent so users can see content being written or drawn on a whiteboard as it happens; and real-time translation. Organisations should take note of this rapid pace and consider product road maps when evaluating tools. New mediums and uses. Remote collaboration tools are evolving, and organisations are likely to experiment with them in various ways. Some executives have used popular video games such as Animal Crossing, Grand Theft Auto, and Minecraft to conduct meetings, for instance. While some may not be inclined to use video games for collaboration or are unfamiliar with the format, others feel they help people think differently and bond with colleagues. The education sector may be another testing ground as teachers, students, and parents around the globe are now being forced to learn how to use virtual collaboration tools. Other formats are likely to emerge. New insights. Collaborating via software enables novel analytical applications not possible with conventional in-person conversations. For example, Gong uses speech recognition and natural language understanding technology to transcribe, annotate, and analyse data from sales calls to coach salespeople toward better performance. YVA.ai uses artificial intelligence to predict burnout and enhance employee engagement. Talent leaders may want to consider how data within these tools can help inform their talent strategies or improve employee performance. New shortcomings. Improved tools may eventually solve the video-conference fatigue problem, but it’s possible that emerging remote collaboration technologies may give rise to other unpleasant technology-induced side effects such as the dizziness or nausea that can accompany immersive environments. When choosing a collaboration tool, organisations should take these into account and design mitigation strategies such as time limits where applicable. New risks. As workers migrated to home networks and personal devices after the onset of the pandemic, firms faced an increase in hacking attempts, and many are enhancing their cybersecurity posture accordingly. The amount and type of information generated by remote collaboration tools could be especially sensitive, and companies should strive to ensure that such data is secure while meeting workers’ reasonable expectations of privacy. Preparing for a (somewhat more) remote future Many workers will not return to the office or may work from a company office only part of the time. According to a June 2020 Fortune/Deloitte CEO survey, CEOs expect 36% of their employees on average to still be working remotely by January 2022, three times as many as before the pandemic. One forecast suggests that through 2024, around 30% of all employees currently working remotely will permanently work at home. Many organisations are likely to need effective remote collaboration tools and approaches. Managers, particularly those in industries where remote working is already familiar, such as technology, financial services, and business and professional services, should begin exploring the use of remote high-touch collaboration tools, especially for collaborative activities that are synchronous, spontaneous, or sensory. As workers’ exposure to, and comfort with, these tools varies, organisations should consider implementing effective training and adoption strategies as well as policies guiding effective use. It may be helpful to think of remote collaboration as more than just a way of coping with the pandemic. To be sure, the pandemic triggered a surge of interest in remote collaboration and a burst of activity in the market for remote collaboration tools. But even after the crisis subsides, the need to support high-touch collaboration for remote workers will likely remain. This trend may carry the seeds of new opportunities. It may bring greater flexibility to talent models, offer workers new opportunities to balance professional and personal needs, help reduce the carbon footprint of work, and enable entirely new business models and industries. The development of remote collaboration could eventually change how we work in surprising and beneficial ways. Ryan Kaiser is a senior manager in Deloitte’s US Innovation group, where his efforts focus on digital transformation, strategy, and product/solution incubation. David Schatsky, Managing Director of Deloitte US, analyses emerging technology and business trends for Deloitte’s leaders and clients. Robin Jones is a Principal in Deloitte’s Workforce Transformation division, with 22 years of organisation and workforce transformation consulting experience.

As the global accountancy profession began adapting to the COVID-19 pandemic and its consequences, the International Federation of Accountants convened a series of round-table discussions to understand the implications of the pandemic for professional accountants and leaders. Kevin Dancey and Alta Prinsloo outline the findings. Crises inevitably demand that difficult decisions be made. Yet, the preferred conditions for making such decisions – time to deliberate or a clear sense of focus, for example – are in short supply. Countless small business owners, CEOs, government leaders and more confronted this reality in 2020. For many of them, professional accountants were there as trusted advisors when there was no semblance of certainty. Like every profession, accountancy will emerge from COVID-19 changed. We will be accustomed to digital processes we once thought impossible. Our change management abilities will be sharper than ever. How we anticipate the future will be informed by an experience many of us never imagined would happen. Right now, the profession has the opportunity to transform for the benefit of business, government, and society. It is also a critical moment to nurture existing talent and attract new talent. We must achieve this progress collectively, with clear and measurable goals. Through it all, the pandemic highlighted the importance of future-proofed skills that can anticipate challenges and opportunities, and are agile in a new world where professional accountants are established as strategic leaders. A shock to the system In the Netherlands, virtual work has been commonplace for more than a decade. When COVID-19 forced lockdowns, professional accountants were ready. In other regions, the transformations were not as simple. In South Africa, workers embraced change very quickly, but the more remote areas of the country found it difficult to find immediate solutions. In China, meanwhile, the shift to remote work was rapid. In the US and many other countries, new systems took root overnight, but with them came new-found concerns about security and the availability of technology. 94% of the global workforce live in areas where workplaces closed in 2020 due to lockdowns, according to the International Labour Organisation. These challenges impacted governments, businesses, and employees. In our new hybridised workplaces, preserving the tenets of trust and integrity while also embracing opportunities that virtual environments introduce is key. For example, when firms are not bound to a physical office, hiring more diverse talent from different geographies is possible. Educators and students were also disrupted and had to manage through a wide range of trials. On the one hand, universities and professors moved faster than ever to online instruction and, in some jurisdictions, had to overcome legal limitations in administering examinations online. On the other, students had not only to navigate internet bandwidth challenges, but also the mental health toll, personal economic hardships, and more, which the pandemic inflicted. One silver lining of remote learning is that classes not bound to a physical classroom can capitalise on the connective power of technology. In academia, as in the workforce, it has become clear that much of the accountancy profession’s infrastructure needed to transform – not just for the immediate future, but also the long-term. While the core skills of the professional accountant have not drastically changed due to COVID-19, the profession is changing. This crisis cast a spotlight on anticipation and agility, making it clear that the profession must take the opportunity now to rethink our curricula, our business models, and how professional accountants maintain their competency and relevancy so that they are ready for anything. Evolving technology, regulations and standards In early 2020, digital transformation was either in progress or identified as a strategic growth driver across businesses, accounting firms, governments, and beyond. Through the crisis, however, technology and data have been imperative not only to stay operational, but also to inform new and evolving strategies and ways of working. In a Deloitte survey, more than one-third of financial services industry firms in the US said technology upgrades were the top priority emerging from COVID-19. Meanwhile, more than half cited digitising client interactions as the first imperative. Across all industries, according to PwC, more than 60% of global CEOs acknowledge that they need a more digital business model for the future and that working outside of an office is here to stay. The way businesses everywhere operate is altered forever, and that reality has shifted how professional accountants engage with stakeholders. Professional accountants are the custodians of information that drives long-term strategy and, as businesses transform to stay relevant, professional accountants must be at the centre of that transformation. With change comes uncertainty, both for professional accountants and our stakeholders – especially the public. In this moment, the profession must align around clear goals for our members so we can collectively meet the changing demand around us. This is critical as we aim to leverage technology in new ways, and as we continue to champion trust and transparency in businesses and governments worldwide. As a profession, we cannot passively accept change; we must seize the opportunities change creates while also anticipating and mitigating risks. We have the guiding principles to do this and international standards for financial reporting, audit and assurance, ethics, public sector, and, hopefully soon, sustainability, will continue to help the profession evolve. Even regulators are being challenged to adapt to how accountancy work has changed, especially in light of 2020. In round-table sessions, we discussed how accounting firms should consider advocating for a way forward by partnering with regulators on the latest approach to financial reporting and auditing in a digital-first world. This will also serve us well as we align ourselves with a shared vision of the role sustainability reporting, focused on environmental, social, and governance (ESG)-related matters, will play in the future of the accountancy profession and our stakeholders. Accountancy is directly tied to prosperity, and a more holistic view of how people and planet fit into our profession is imperative. According to many stakeholders, sustainability is now an indisputable necessity. A long-term strategy rooted in sustainability helps guarantee any organisation’s place in the future. Indeed, two-thirds of global respondents in a recent BCG study on how the pandemic heightened awareness of environmental challenges agreed that economic recovery plans should prioritise environmental concerns. To that end, we must evolve our mindsets and reporting, and perhaps most importantly, our curricula for future talent. In particular, the students we spoke with were passionate about a much larger focus on ESG in the accountancy profession. As one student from Hong Kong said, “We are not prepared to handle ESG because there are no strict standards to hold us accountable”. For the future of the profession, transparency and accountability concerning ESG and long-term sustainability must be ingrained in high-quality reporting and assurance practices globally. IFAC is committed to advocating for new sustainability standards that would offer a reliable and assurable framework relevant to enterprise value creation, sustainable development, and evolving expectations. This is an opportunity for accountancy to evolve and to offer the next generation of professional accountants, many of whom identify as global citizens and environmental advocates, a strong foundation to make a difference. The important marriage of technical and professional skills Change management and sharp communications: From every region, discipline, and position, one skill was referred to more often than any other in every round-table we convened in the past three months: change management. We were in a rapid state of evolution before COVID-19. At the start of 2020, McKinsey & Co. noted that nine in ten business managers said skills gaps existed in their organisations or soon would. That reality has only become more evident. Accountancy is not a profession operating in a static world, and the skills learned have to reflect an equal measure of agility. There is a clear need for well-rounded skillsets that combine technical skills and professional skills that are rooted in relationship-building and communication. Doing so means placing more emphasis on stronger, trust-based relationships with key partners. This requires a focus on interdisciplinary skills when engaging with colleagues and in our strategic discussions with clients. Stronger communication skills will help professional accountants manage risks and garner buy-in for solutions. Scenario planning and storytelling: Professional accountants are dynamic thinkers with an aptitude for proactive planning. We are trusted partners in times of change and uncertainty, and we must be prepared for that demand to continue. We have to maintain the momentum 2020 created and the renewed trust imparted on our profession. Many round-table discussions spent significant time on the importance of accountants continuing to build in the areas of professional skills and focusing on new techniques for analysing and interpreting data in differing circumstances, and aptitudes for strategising on increasing priorities such as ESG. Our stakeholders agreed that the profession must become better storytellers, able to effectively show how all the pieces fit together and how the finance function bolsters resiliency and growth. The basics of this can be taught in classrooms, but this skill will largely be shaped on the job. Upskilling: How we compete in the learning and development space – with dynamic curricula, more agile credentialing and continuous learning models that are suited to a hybrid world – will be a differentiator moving forward. “Professions that invest [in education] now are going to come out of this with a competitive advantage,” said one academic leader. We have to show aspiring accountants and those who might be upskilling during their career that the profession is anticipating, adapting with agility, and remaining a step ahead. Affirming the need for agile, future-proofed skills, one professional accountancy organisation CEO said, “I’ve worked through three pretty major crises in my career, and the common theme through all of them is that you must use it as an opportunity for change. A crisis gives you license to adapt”. Defining the accountant of the future Professional accountants are, and will continue to be, strategic partners in any setting, be it in the private or public sector. The pandemic tested our capacity as business drivers, and we rose to the occasion. This is a pivotal moment for the accountancy profession, one where we will change old paradigms and embrace new skills for the digital and rapidly evolving world in which we live. How we act in this moment will define the future of the profession, and the opportunity for positive change is immense. Right now, societies and economies around the world are trying to find a way to move forward from a crisis-laden year. Professional accountants are the highly strategic and collaborative problem solvers who will help businesses and governments, large and small, move forward. In the round-tables IFAC conducted in recent months, CEOs, auditors, academics, students and more from around the world shared a clear vision: we, as a profession, must accelerate new ways of working, embrace technology, align our work to new and evolving societal demands and, above all, ensure we are investing in the right balance of skills that will fortify the profession for whatever the future holds.   Kevin Dancey is Chief Executive at IFAC, and Alta Prinsloo is Chief Executive at the  Pan African Federation of Accountants and former Executive Director at IFAC. The research process The International Federation of Accountants (IFAC) spent the past three months engaging with dozens of people associated with the accountancy profession across more than 20 countries with a range of perspectives. They included chief executives of professional accountancy organisations, chief executives in business, chief financial officers, audit committee members, auditors general, accounting firm leaders, academics and students.  By convening these various stakeholders, IFAC set out to understand the implications of the pandemic for professional accountants and leaders, and how their experiences will affect the future of accountancy and, more specifically, accountancy skills. The global COVID-19 pandemic has accelerated change and forced us to reconsider the role of professional accountants. We heard from our stakeholders about the transformation of organisations, the agility of business, and the resilience of professional accountants managing through unanticipated change.

The changing of the US political guard has been broadly welcomed internationally, and by Irish commentators in particular. However, a Biden presidency may not have an immediate impact on Irish companies, writes Barry Flanagan. Fans of Malcolm Gladwell’s Revisionist History podcast will know the answer to this one immediately: who is the only NBA player to score 100 points in a single game? LeBron James may have just won his fourth NBA Championship, but his career high is 61. Michael Jordan, widely regarded as the greatest of all time, once hit 69. The extraordinary Kobe Bryant sits second on the all-time list with 81 – 19 short of that magic 100. I’m not sure how many NBA fanatics read Accountancy Ireland, so it’s probably best if I share the answer now – it’s Wilt Chamberlain, who achieved the feat back in 1962. What is extraordinary about Chamberlain’s record is not just the number but, as Gladwell explains, how it was achieved. Chamberlain, a notoriously poor free-shot taker with a mid-40% success rate, had that season resolved to abandon the standard overhand free-shot technique used by all professional players. Instead, he used the underhanded or ‘granny shot’ method. It worked. Chamberlain’s 28 from 32 that night (87.5% success rate) doubled his average and endures as the NBA record – which is what made Chamberlain’s next move so surprising. Despite the new technique bringing him that historic record, the next season, Chamberlain went back to the old, inconsistent and trajectorially challenged overhand shot. Even though he knew it would cost him points and his team matches, he couldn’t stomach being seen as a “sissy”. The overhand technique was revived, and predictably his percentage dropped – perception over payoff. Donald Trump used that same overhand technique that when throwing out paper towels to a bewildered Puerto Rican press corps in the aftermath of Hurricane Maria, which devastated the island. Just like Chamberlain, Trump was far more concerned about looking good than making a difference. In fact, handing out paper towels in the aftermath of a hurricane could be emblematic for Trump’s entire presidency: ineffective and often damaging policies, enacted without any real concern for consequences but with a very real emphasis on how he was perceived while implementing them. Protectionism is probably the best example from a trade perspective. Protectionism and the pandemic There is little doubt that Trump’s protectionism cost America economically, but the policy was never about winning. Imposing tariffs and bringing the US to the brink of a trade war with China over the last two years was always more about how it would be perceived by his supporter base than the economic benefit. ‘America First’ was the slogan that propelled him to The White House in 2016, convincing Rust-Belters that he could protect and regenerate industrial jobs. It also demolished the ‘Blue Wall’ and delivered Michigan, Wisconsin and Pennsylvania in the process. Trump’s failure to fulfil those promises over the past four years is the reason those states flipped back. Whether that was because Trump’s tariffs rendered Chinese steel too expensive for rust-belt industries (Trump imposed tariffs on roughly three-quarters of everything China sells to the US) or because the COVID-19 pandemic swept away the economic gains of the last three years is moot. The interaction of those two factors – protectionism and the pandemic – will shape American economic policy for the next two years at least. Those expecting a Biden administration to implement any quick reversals to US foreign trade policy will be disappointed. Several agents are impacting, with none at present favouring a dramatic swing. Economic priorities For starters, students of Bidenomics will know that, like the candidate himself, pragmatism and prudence are valued over radical change. Biden has been an elected official for 47 years and like most career politicians, his innate inertia would counter any reactionary instincts. His tax plan seeks to raise taxes only on the top 2% who earn more than $400,000 per annum. Second, and perhaps more pertinently, both his own and the Democratic party’s views on protectionism are far closer to Trump’s than outside observers may realise. Don’t be fooled by the toxicity of US political ‘debate’. Republicans mock the Democrats as being ‘globalist socialists’, but the Democratic party is well aware which side its bread is buttered on. The Pew Research Centre revealed last year the depth of the consensus across the American political divide on this very topic. ‘Protecting the jobs of American workers’ was ranked as the second-highest bi-partisan priority out of the 30 options presented (only ‘preventing terrorist attacks’ is rated higher by the political establishment). Republicans and Democrats alike are keenly aware that their electability depends on both the perception and reality of protecting jobs. Third, notwithstanding that he may not wish to change much in this regard, the likelihood of a Republican-controlled Senate may stymie any change Biden does want to make (we will know more after the Georgia run-offs in January). While it is true that presidential executive orders can be used to effect change unilaterally, any such orders will likely focus on the more polarising issues facing the US Executive such as the perennial battleground of healthcare, Biden’s own cause célèbre of renewable energy and, most immediately, the domestic stimulus package that has eluded agreement so far. Lastly, as Biden and the impressive and progressive Vice President, Kamala Harris, clearly signalled in their victory speeches, getting the pandemic under control will be the first and only priority for the new administration. The administration’s focus will initially be internal, and Biden has pledged to avoid any new trade agreements “until we’ve made major investments here at home, in our workers and our communities.” All of this provides Irish companies with little reason for optimism, but there will be opportunities in the Biden era. The renewable energy, infrastructure regeneration, and healthcare industries will undoubtedly benefit from this regime change, and further trade deals will eventually follow. While Biden is by no means a globalist, the rest of the world can at least look forward to the Trumpian trend towards isolationism being halted with some moderate reversals deliberately deployed early. Biden has repeatedly stated his intention to re-join the Paris Accord on his first day in office. He has also indicated his intention to re-join the World Health Organisation, which Trump distanced the US from this year. Although Biden may reverse travel bans on Muslim countries and enact some degree of immigration reform, meaningful progress in these areas will depend on Republican consent, which will be hard-won. Irish opportunities From an Irish perspective, a particular area of interest will be the US corporate tax rate and any potential changes to US tax policy. Trump targeted tax inversion by US companies that relocated internationally by dramatically cutting corporate tax from 35% to 21% back in 2017, effectively eroding the delta a company gained by shifting its headquarters to Ireland to take advantage of the country’s 12.5% rate. Biden has proposed raising the corporate tax rate back up to 28% from 21%, reversing half of Trump’s cut. Such a move would again increase Ireland’s attractiveness as a destination for foreign direct investment, but it would be unwise to expect too much too soon. Tax reform in the US is notoriously slow. Trump’s Tax Cuts and Jobs Act was probably his signature accomplishment, but the parties had broadly agreed the basis for it before the 2016 election. A reduced corporate rate would therefore have been delivered in any event, regardless of the election’s outcome. Brían O’Cuiv, Tax Partner at PwC San Francisco, foresees opportunities for Irish companies independent of tax reform. “The reality is that US companies continue to be among the most innovative in the world. And with a seemingly endless supply of venture funding available, we will see new businesses with global ambitions emerge,” he said. “Irrespective of any changes to the US tax system, companies will need to establish operations overseas to access foreign markets and tap into the local knowledge base. Jurisdictions that position themselves as an attractive location for inward investment and provide some degree of certainty are likely to continue to benefit disproportionately from this trend.” Finally, once he assumes office on 20 January 2021, President Biden’s close ties to Ireland will at least deliver the perception of increased opportunity, even if his control over the payoff is not as strong as Ireland Inc. would like it to be. Ireland and Biden In 2016, Biden wrote in his ‘Letter to Ireland’ that “When I die, Northeast Pennsylvania will be written on my heart. But Ireland will be written on my soul”. A testament to this close relationship is the fact that An Taoiseach, Micheál Martin, was one of the first political leaders Biden contacted after his projected win. During their 20-minute call, they covered the global economic recovery, relations with the EU, and tackling climate change. Most tellingly, they also discussed the importance of a Brexit outcome that respects the Good Friday Agreement and ensures no return of a physical border on the island of Ireland. Ireland’s profile will benefit exponentially from having a US president that is favourably disposed to the country, which Trump most certainly was not. The annual St Patrick’s Day summit in the White House may not restart until 2022, and a presidential visit to Ireland is unlikely before 2023. That said, the negativity towards Ireland will cease almost immediately and in terms of Brexit, to use Biden’s favourite quote from Yeats, “all changed, changed utterly”. Cummings and goings The next few weeks will tell more, but it is already possible that almost two months before he has even been sworn in, we may have already witnessed the first effects of a Biden presidency on the global stage. The UK Conservative government courted Trump shamelessly and desperately hoped that a Republican-controlled government could deliver the holy grail of a US/UK trade deal. They hoped that it could be achieved in advance of any EU deal and sold to the British public as a significant victory. That hope has been utterly dashed. The resignations of Dominic Cummings and Lee Cain may signal a seismic shift in the UK’s Brexit strategy. Cummings had served as campaign director of the ‘Vote Leave’ campaign in 2016 and is credited with the memorable (if potentially misleading) slogan, “Take back control”. Cain had been tipped as Johnson’s next chief of staff, an important position as it would effectively have given Cain control over access to Johnson. Their departure may be the most immediate macro consequence of Biden’s election on the global economy. The likelihood now is that Johnson and Britain will be forced back to the negotiating table with the EU. At the time of writing, the chance of a last-minute UK/EU deal had increased, and this may be the most immediate payoff from Biden’s presidency. In terms of how that presidency might benefit Ireland, it might also be the most important. Barry Flanagan is President of US Operations and acting Global Head of Customer Engagement at Immedis. The importance of the Georgia run-off While the US waits for President Trump to accept the results of the presidential race, the focus of the political world has already shifted to Georgia where two run-off elections set for early January will determine which party has control of the Senate. The current state of play is 50-48 in favour of the Republicans, so the Democrats must win both to draw level. The result of the contests, which will take place two weeks before Biden’s inauguration, could lead to two distinct outcomes. On the one hand, two Democrat victories could re-centre power to the Democrats by giving Harris, as the new vice president, the casting vote. This would provide Biden with broad power to carry out his policy agenda and push through nominations as he sees fit. On the other hand, a Republican win could cement Republican control, thereby allowing Mitch McConnell to remain as Speaker with the power to continue his policy of obstructionism that was so effective during President Obama’s second term. Georgia may have flipped Blue for the first time in 28 years, but the margin of victory was a tiny 14,000 votes or 0.3% of votes cast. Accordingly, anticipating a double defeat for down-ballot Republicans who outperformed Trump is not advisable.

Cormac Lucey explains why, as societal fissures and inequality grow, we must no longer be satisfied with unduly simple answers to complex questions. The biblical story of the Tower of Babel explains how humans across the world speak different languages. In the generations following the Great Flood, humans spoke a single language and migrated to the land of Shinar, where they decided to build a tower tall enough to reach heaven. Unhappy at this impudence, God intervened so that humans spoke several different languages, were unable to understand each other and were thus unable to build their idolatrous tower. Today, it is not different languages, but several other aspects of life, that risk pulling us apart. Specialisation has been one of the key ingredients of dramatic economic growth in recent centuries. But growing vocational differences and technical specialisation make it more and more difficult for national leaderships comprised of generalists to manage and control a society increasingly comprised of technical specialists. Consider the economic disaster of the financial crash just over a decade ago, and the failure of the Central Bank of Ireland and the Financial Regulator to take corrective action. Consider the current lockdown and reflect on the fact that, if everyone in the Republic contracted COVID-19 and we suffered the median fatality rate estimated by the World Health Organisation (0.23%), the resulting fatalities would equal around one-third of total fatalities that we suffered from all causes in 2019. Another serious societal fissure is growing economic inequality and the increasing role of education in determining an individual’s earning capacity. Here in Ireland, we are lucky that income inequality has not grown over recent decades. But it has grown substantially in the US. We can see the political polarisation that has followed and, increasingly, political affiliation in the US follows education. This pattern was very evident when the UK voted for Brexit. The political and media establishments may dismiss those who dared to vote for Brexit or Trump. But if the pandemic has taught us one thing, it is that in an ever more complex world, our fates are increasingly interdependent. In such a world, it makes little sense to dismiss large blocs of fellow citizens as if they are fools. Yet that is what has happened. This sneering reaction feeds another fissure, that which separates insiders from outsiders. We can see this in the rise and rise of monopolies and quasi-monopolies in the US. A paper published recently by two Federal Reserve economists found that the concentration of market power in a handful of companies lies behind several disturbing trends in the US economy such as a falling share of national GDP going to labour, a rising share going to capital, increasing inequality, rising financial leverage, and an increase in financial instability. Here in Ireland, we are confronted by a different monopolistic power, that of the State. At the end of Q2 this year, average weekly earnings in the Irish public sector exceeded those in the private sector by 32.6%. In the UK in 2019, (pre-pension) public and private sector earnings were approximately equal with public sector earnings 3% ahead before consideration of bonuses and 3% behind after their consideration. The stark public/private gap in Ireland arouses little public commentary, but feeds the fissures in our society. What can we do as we face this increasingly divided world? We should be careful of those who suggest simple answers to complex questions that generally don’t have yes/no answers but, rather, difficult trade-offs. Independence of judgement matters just as much for our public life as it does for our auditors. Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland.

2020 was nothing short of a disaster for many people, but a constellation of emerging factors can give us hope for 2021 – from an economic standpoint at least, writes Annette Hughes. For the Irish population, COVID-19 has in many ways been a double-edged sword over the past nine months. The recent transition from levels two and three to a nationwide level five lockdown caused a significant number of businesses to close once more and pushed the number of those in receipt of government wage support through the Pandemic Unemployment Payment (PUP) up by 50% month-on-month from 228,858 on 11 October to 342,505 on 9 November. However, this is still well below the 5 May peak of 598,000. EY’s labour market forecasts suggest that, for November, this represents approximately 14% of those in employment. Kerry and Donegal suffer most, with about one in five workers in receipt of PUP at present, possibly due to their dependence on tourism. The reality for the fortunate segment of the population that managed to hold on to employment is quite different. The Central Bank of Ireland has reported that household deposits increased by 10.9% year-on-year in September 2020. This is indicative of a general trend of reduced consumption and increased savings since the beginning of the pandemic, as the measured savings ratio reached an unprecedented 35.4% in Q2 2020 with a quarterly increase in savings of €10 billion for Q2 2020. This suggests that there is a section of Irish society that is broadly unaffected, has money, and is merely waiting to spend. Results from a recent survey conducted by EY indicate that the world mood is anything but black and white. The impact of COVID-19 on consumer behaviour has led to diverse spending patterns globally. In the October release of our Future Consumer Index, 26% of consumers noted that they were unaffected and unconcerned for the future, while 31% stated the antithesis, commenting that they were struggling and worried about what is yet to come. A lack of job security, family health, and discomfort around a premature return to societal norms are foremost in the minds of those who believe the COVID-19 impacts will remain in the medium- to long-term. The remaining consumers surveyed classed themselves as either okay but adapting (30%) or hard-hit but optimistic (13%). Retail in Ireland is a mixed bag of late. The CSO release for September proves the lockdown ‘banana bread, work-from-home, DIY’ hypothesis with sales of hardware, paint and glass up 31.3% year-on-year while food, beverages and tobacco also increased by 12.4%. Meanwhile, sales for fuel have reduced by 10.2%, with stationery, books and newspapers also down by 11.6% as large swathes of workers, particularly those working in multinational companies, no longer commute to Ireland’s urban centres. EY expects that economic recovery will resume in 2021, with GDP forecast to rise by 3.5% after a 3.9% contraction in 2020. The current accumulation of deposits, which are earning meagre interest in the banks, combined with reduced reliance on PUP and projected employment growth of 6.5% should significantly support consumer spending next year and act as a catalyst for increased economic activity. Annette Hughes is a Director at EY-DKM Economic Advisory.

Leigh Harrison outlines the practical issues, for both the auditor and management, that may arise when applying the revised going concern standard. As auditors rapidly approach the start of ‘busy season’ and management near the end of the financial year, one of the biggest challenges that will impact on both the auditor and management are the changes to the going concern auditing standard. The revised standard, applicable for periods beginning on or after 15 December 2019, increases the auditor’s work effort, which includes expanded risk assessment procedures over going concern, increased scrutiny over management’s going concern assessment and enhanced reporting requirements in the auditor’s report. The directors’ responsibility for going concern is seated in company law, with the duty to prepare financial statements that give a true and fair view, in accordance with the applicable financial reporting framework. The accounting standards require the preparation of a going concern assessment, taking into account all available information about the future, for a period of at least 12 months. The financial statements are prepared on a going concern basis unless management determines that they intend to liquidate the entity, cease trading, or have no realistic alternative but to do so. Complexities in the current year The world is now a very different place than it was at the start of 2020. In a matter of months, COVID-19 swept across the globe. The pandemic subsequently led to travel restrictions, business closures, cancelled events, and lockdowns. Governments responded with a range of financial supports in an attempt to support jobs and businesses. During this time, management will have had to revisit their business plans, forecasts and cash flows in response to the ever-changing economic environment. Meanwhile, calls for better climate change reporting and the end to the Brexit transition period compound the complexity. Practical issues for management Although the directors are ultimately responsible for the assessment of going concern, in many cases, they may delegate the preparation of the assessment to management. The directors will need to possess the skills and knowledge to understand and challenge the assessment prepared by management and have a robust governance, oversight and approval process to challenge and validate management’s assessment. For management in smaller businesses, where an assessment of going concern may not have been formally prepared and documented in previous years, the requirement in the current year is likely to be a step-change. In some ways, the continually changing economic environment in which businesses currently operate will have prepared management for the preparation of their going concern assessment as they continuously re-assess the impact of change on their business. Ahead of year-end, management should engage with their auditor to agree on the expected audit deliverables and ensure that they have the processes in place and resources required to perform the assessment. Remote working may add further complications as inputs required for the assessment are likely to be prepared across the finance function, and team members may be on furlough. Management will need to factor in additional time for scenarios where, for example, additional funding is required or waivers of covenants must be negotiated and agreed, as credit approval may be delayed due to the impact of bank staff working remotely. Management will need to have specific processes in place, including a risk assessment process to identify, assess and address risks facing the business relating to going concern. Management will also need to explain to the auditor how they measure and review financial performance, use their information systems to identify and capture events or conditions that may impact the going concern assessment, and how management identified the relevant method, data and assumptions used within their going concern assessment. The assessment must be prepared and documented by management in all cases and should be tailored and right-sized for the business. For some non-complex businesses with high levels of cash reserves, management’s assessment may not require detailed cash flow forecasts. A memorandum detailing management’s analysis and considerations may suffice. In contrast, more complex entities will require a thorough assessment of current and future risks, forecasted cash flows, consideration of current funding available, and the identification and assessment of plans to address identified risks. The area management must consider when preparing their assessment is wide-ranging and includes risks facing the business (both internal and external, current and future), the business environment, developments in the industry, and future prospective plans. The purpose of the assessment is to determine whether certain events or conditions may cast significant doubt on going concern and whether those events result in a material uncertainty to exist. In preparing and documenting their assessment of going concern, the auditor might expect to see the following: Analysis of the core operations of the business as they relate to going concern, including the business model, types of investments or disposals planned, how the business is financed and so on. Analysis of the current financial position compared to the prior year, considering key metrics such as net current assets/liabilities, operating cash inflow/outflow for the year-to-date, funding arrangements in place and related covenants, and so on. Analysis of the results post-year-end compared to the prior year, including revenue, profits, and status of funding. Details of events or conditions identified by management that may cast significant doubt on going concern and may affect the future performance of the business. For example, changes in demand for products or liquidity challenges. Where events or conditions are identified by management, management should document their plans to address those events. When management consider that a detailed assessment is required, they should document the model, assumptions and source of data used in their assessment. Management may find it useful to prepare a sensitivity analysis, where there are several potential assumptions or actions. The assumptions and data used in the assessment of going concern must be consistent with those used elsewhere in the business – when considering the valuation of goodwill, for example. Practical issues for the auditor In the planning phase, the auditor will need to ensure that the team has the resources and experience necessary to perform the required procedures. Where the new requirements present a step-change for clients, it will be particularly important for the auditor to engage early. Doing so will help clients better understand the extent of audit evidence expected, and the level of input that will be required from management throughout the audit process to assist the auditor in their enquiries and procedures. There is no prescribed methodology for management to use when preparing their assessment of going concern. In scenarios where management has determined that detailed forecasts and cash flows are not required, the auditor will need to use their professional judgement to determine whether they consider the assessment to be appropriately detailed. This may lead to difficult conversations. At the other end of the scale, management’s assessment may include, for example, detailed forecasted cash flows that are built on complex models with multiple assumptions and sources of data. In these situations, the auditor will need to obtain a detailed understanding of the model, and careful consideration will be required to determine which assumptions and sources of data are critical to the assessment. Professional judgement will be needed when designing the required audit procedures, which may include evaluating the design, implementation, and testing management’s controls over the process for preparing the assessment. For 2020 year-ends, more entities will likely face liquidity issues given the continuing impact of COVID-19 on business. As such, management’s plans may include seeking reliance on group support. Auditors of components within groups will need to get a ‘big picture’ view of the group’s ability to provide the support required. More than ever, there is a greater need for the auditor to maintain their professional scepticism, challenge management throughout the audit process, and evidence that on the audit file. Conclusion For some businesses, the implementation of the revised going concern standard will be a step-change that will result in changes to processes, controls, oversight arrangements and increased management input to prepare management’s assessment of going concern. For the auditor, greater audit effort will be required, resulting in additional time input throughout the audit process. The auditor will need to exercise their professional judgement when evaluating management’s assessment, identifying the critical assumptions and data, considering whether sufficient appropriate audit evidence has been obtained, and concluding on going concern in the audit report.  Leigh Harrison is Director at KPMG’s Department of Professional Practice.

Tony Buckley shares eight tips to help businesses plan for a bright post-Brexit future and explains how Ireland could ultimately emerge from the mayhem as a nation of international market-making traders. Well, now we know – or do we? We are getting used to the new reality of the UK as a third country, but the UK’s relationships will continue to evolve and the changes to our way of doing business will take some time to show their impact fully. The process of realising and adjusting to change is, in many ways, just beginning. The Brexit process has taken us through some unprecedented scenes, scarcely believable public debates, and commentary that veered from “it won’t change anything” to apocalyptic descriptions of “cliff-edge” and “crash-out” and invocations of the spirit of the Blitz. In fairness, confusion and a lack of clarity were inevitable. Never before, outside of wartime, was there an attempt to consciously create a full border in the middle of an integrated and prosperous market. With it comes the risk of re-imposing all the impediments to trade so successfully lifted by the Single Market and, going back even further, the customs duties and quotas that were eliminated in 1973. Borders and their accompanying strictures usually develop over a very long period, and the countries on either side grow with, and adapt to, the border as a simple reality of life and business. Brexit proposed to dismantle a vast number of accepted and profitable practices and trading structures and reform them for a new and ill-defined reality. Daily life was going to change, but no-one could provide a full and detailed picture. The best that could be concluded was that the short-term effects would not be good. Setting the political framework was imperative so that the legal, regulatory and administrative structures and systems could be developed in good time. Unfortunately, due to various factors, the political process took up almost all of the time available and resulted in uncertainty up to the last minute. It is only fair to say, however, that with something of this scale, some lack of preparedness is unavoidable, leaving much to be resolved in the ‘live’ environment of EU-UK separation. Trade tends to find a way through. In modern Western Europe, where the benefits of free-flowing trade and commerce are so visible, all governments regard the facilitation of trade as a critical priority. We can see that in the solutions that have been created to keep trade flowing in January 2021. Without the urgency of Brexit, some of the changes, especially for Ro-Ro, would have taken years of negotiation and planning. So, not everything is in place, and the practical administration has not bedded down into the smooth operating models that will emerge. Teething troubles are expected in any new system, and this is an enormously complicated situation. Nevertheless, we can be sure that by the end of 2021, the new reality will be as well understood as was the old. At that stage, we will be able to properly take stock, count the cost, seek the benefit, and adjust our future planning. At the moment, many businesses are shouldering significantly increased cost to ensure that goods continue to move across borders in the short-term. The agents, freight forwarders and express carriers who can navigate the new rules and systems are not cheap. The generally accepted estimate is that customs will add about 4% to the cost of traded goods. For most of 2021, and possibly beyond, this is likely to be an underestimate for Irish and UK businesses, which are struggling with a shortage of expertise and capacity in customs and trade support services, not to mention long-standing supply chains and agreements that are no longer fit for purpose. The way forward will be different for each entity. The following is not intended as a full guide, but as a small collection of tips that appear to apply to most businesses. 1. Don’t be hasty The new systems and rules are permanent. They therefore represent a quantum shift in the operating parameters of business – not just for traded goods, but for all businesses directly or indirectly affected by Brexit (which is virtually all Irish businesses). For that reason, don’t rush. It may be worthwhile to incur very high costs in early 2021 for the benefit of breathing space. This will, in turn, allow you to design and tailor suitable long-term arrangements. 2. Understand the changes Costs must be managed. For those that cannot change their prices, the question is whether the margin reduction can be minimised and made sustainable. If not, the wisest course is to change direction early. There are many options to reduce costs or find off-setting benefits, but the first requisite is that the business planners (owners and advisors) fully understand the rules of the game. Customs and international trading rules are, and will remain, central considerations in planning any business involving, or connected to, the UK. We are well used to the need to understand tax exposure. We now need to become familiar with the complexities of international trade, which have not been relevant to European trade since 1993. 3. Nothing is untouchable Established structures, devised for a variety of reasons from tax efficiency to comparative cost advantage to administrative preference, must be reappraised. One of the most common challenges encountered by those advising on Brexit preparation is the insistence that existing structures and practices cannot be changed. This position usually stems from a failure to appreciate the cost of failing to optimise the supply chain. 4. Supply chains must change Commercial agreements must reflect the new reality. Many of the goods sold in Ireland arrive here via UK distributors. It makes no sense to pass goods through two sets of customs and market regulations. Standing agreements will not be easy to renegotiate, but the alternative is a significant impact on cost. 5. Check the small print Irish companies are, on average, smaller than their UK trading partners and a higher proportion of Irish companies depend on the trade. Irish companies must resist the strong temptation to agree to dictated trading terms without fully understanding the costs involved. 6. Manage expectations Consignments will get bigger on average, and for a good reason. Just-in-time and small deliveries are disproportionately expensive when compared to less frequent full loads. Test your customers’ tolerance for less demanding delivery schedules. 7. Invest in your market For a UK-based business, buying goods and components from a UK producer is preferable as the producer retains responsibility for standards, quality and customer rights. Purchasing from an Irish (or other EU) producer transfers all the producer’s responsibilities to the importer. For this and other logistical reasons, serious consideration should be given to establishing in the UK if significant and long-term business is planned there. 8. Look for opportunities Don’t overlook the unique position that has been accorded to Northern Ireland. While the operation of the Protocol on Ireland/Northern Ireland is complicated, its possibilities are likely to repay close exploration. More generally, be aware that the advantages enjoyed by UK business – free access and large scale, for example – are significantly reduced in their effectiveness in a post-Brexit world. The competitive position of Irish business has therefore improved in the Irish and EU markets. These points may appear to be an extreme reaction. A common belief (or hope) is that the adjustment can be made with minimal cost – just an addition to variable cost that can be passed on. The reality is that, while some will struggle on without adaptation for some time, their costs will ultimately leave them uncompetitive with those who read the writing on the wall and adapt accordingly. Services have not been extensively dealt with in the EU-UK talks so far. The result is that, broadly speaking, services to and from the UK will operate similarly to any other non-EU country. The principles outlined above also apply here. There is a new reality, with national borders inhibiting the free movement of services. A similar reappraisal and planning exercise must be conducted. We are, I believe, looking forward to a new awareness of international trade in Ireland that will significantly benefit our ability to operate in world markets. Traditionally, only the largest companies in Ireland had those skills. The vast majority of Irish importers and exporters dealt only with the UK or within Europe and failed to develop the skills and knowledge that would have enabled them to become market-makers. That is changing, and I look forward to the prospect in a few years of Ireland as a nation of international traders. In summary, we are entering a critical period for Ireland’s traded goods and services sectors. If we adapt well, as we have the ability to do, we may find ourselves stronger, more agile, and a better place for small enterprise to flourish. This is not to minimise the inevitable prospect of business failure and job losses that will follow the economic and social turmoil caused by COVID-19. We must, however, look to better times ahead – and I believe that they are attainable. Tony Buckley is former Head of Revenue’s Customs division and Programme Lead for Chartered Accountants Ireland’s Certificate in Customs and Trade. Point of view: Crona Clohisey The UK is entering a new world, standing aside from Europe amid promises that it will have greater control over its destiny. Brexit could be an opportunity for Britain to reinvent itself, to cast itself off from Europe and thrive in the world on its own. But one must ask: can Brexit work? Britain’s place in this new world will not be determined on 1 January 2021; it will emerge in the months and years ahead. Indeed, some studies suggest that that Brexit will boost economic output by 7% while others say it will be reduced by almost 20%. The opportunities afforded by Brexit are often overlooked. The UK will remain an attractive place to do business and will also be free to forge new trade deals. That said, there will initially be disruption and challenges for businesses in Ireland and the UK, particularly for those dealing with customs administration for the first time. The Irish economy will remain heavily exposed to the UK, and a working UK-Ireland relationship must continue beyond Brexit. The Protocol on Ireland/Northern Ireland will avoid the need for a land border on the island of Ireland. However, trade barriers between Northern Ireland and the rest of the UK must not result. Cróna Clohisey is Public Policy Lead at Chartered Accountants Ireland. Point of view: Jason McIntosh Preparations for Brexit began shortly after the referendum result – particularly for businesses located near to, or trading across, the border between Northern Ireland and the Republic of Ireland. Information and support have recently increased in availability. With the terms of a future trading relationship still unclear just weeks before the deadline, businesses have found industry resources (Chartered Accountants Ireland’s recent webinars, for example) hugely beneficial. A central pillar of successful Brexit preparation is the involvement of all relevant departments, from finance and purchasing to HR and communications, in a business. Such a collaborative approach allows for detailed impact analysis and the drafting of a robust action plan, which must have the buy-in of senior management. The impacts of Brexit extend beyond the import and export of goods. For businesses located on the island of Ireland, for example, employees might cross the EU border for work. While the risk of delays at the border for people seems to be subsiding, there will continue to be taxation and employment law impacts to consider. Taking advice will, therefore, be crucial.  Jason McIntosh is Finance Manager at Seagate Technology.

When it comes to sustainability, the problem is not that there are no standards. Rather, there are too many of them, writes Dr Brian Keegan. In the current abnormal news cycle, something has to be really strange to stand out. One such item in October was a report that UK authorities were to permit the opening of a coal mine in the north-east of England. This runs counter to most of the prevailing trends. True, the rehabilitation of coal was an element of Donald Trump’s first presidential campaign, but that has not prevented its decline in the US in favour of cleaner natural gas and more sustainable sources like wind and solar. Coal from this new British mine is not for energy production. It is apparently to be used in the manufacture of steel. It is also being used in the manufacture of jobs for the impoverished north-east. Job creation tends to rattle sustainability priorities and seems to have been the consideration that swayed the local council into granting permission. The incident does highlight, however, the elusiveness of sustainability because “Decent Work and Economic Growth” is Goal 8 of the 17 sustainability goals promoted by the United Nations. While these goals have garnered considerable traction in the sustainability debate, having 17 goals impedes progress because, in practice, the goals can be contradictory. Goal 13, for example, is “Climate Action”, which is at right angles to opening coal mines in some quarters. This vagueness has conflated the sustainability debate with the already nebulous concept of corporate social responsibility. Corporate social responsibility should be looked upon with suspicion. All too often, HR initiatives to boost staff morale, marketing initiatives claiming green credentials for a particular product or service, or even support for the pet charity of the chief executive are folded in under an ersatz comfort blanket of social responsibility. Claiming sustainable practices or having corporate social responsibility champions won’t cut it. There has to be a concerted drive to come up with broadly acceptable standards to measure genuine corporate progress on sustainability issues. The current problem is not that there are no standards, but rather, that there are too many of them. The current custodians of standards- and ethics-setting, the International Federation of Accountants (IFAC), recently proposed that a new sustainability standards board be established, which would exist alongside the IASB under the IFRS Foundation. This new sustainability standards board should pull together existing expertise and the work of some existing sustainability reporting initiatives. The resulting framework could then be passed to the International Audit and Accounting Standards Board to develop the best assurance processes. This IFAC initiative differs from many other governance initiatives. Too often in the past, ‘solutions’ were provided, for which there was no demand. One of the legacies of this pandemic will be a greater awareness of sustainable practices.  There is demand from investors for comparable and dependable data on environmental, social and governance factors and this form of reporting offers a value-added opportunity for accountants. On the other hand, the initiative carries the risk of becoming hijacked by environmental activism, leading to reporting requirements that would fail a cost/benefit analysis within the SME sector. Earlier this year, Harvard Business Review suggested that the chief financial officer should become the most prominent climate activist in their organisation. There is still some distance to go before this becomes a reality, but in an era when western governments are contemplating opening coal mines, nothing can be ruled out. Dr Brian Keegan is Director of Advocacy & Voice at Chartered Accountants Ireland.

Dr Patrick Buckley and Dr Elaine Doyle explain how gamification can enhance accounting education, and why experienced professionals might rail against the concept. Human beings are hard-wired to play. Games are an integral part of our personal, social and cultural identities. Games provoke powerful emotional responses of joy, anger, satisfaction and frustration. Science is discovering deep, complex relationships between our brains, neural systems, learning and game-play. A feature of the modern world is the rise of the video game, from Minecraft to Mass Effect. In 2019, the number of active video game players worldwide was 2.47 billion. For children and young adults, computer games have become a dominant form of media consumption. It is self-evident that computer games have a powerful effect on behaviour. The observation that the mechanics and dynamics used in games can affect motivation and behaviour has led to the concept of gamification. As is often the case with new ideas, there are several competing definitions. Broadly speaking, however, gamification can be seen as a suite of techniques and psychological prompts connected by their association with games and play. More specifically, gamification involves the use of elements traditionally associated with games (such as structured rules, competition, points and leaderboards, for example) in non-game contexts to prompt specific behaviours or emotional responses in individuals. Gamification in practice While gamification is a new term, using game mechanics to solve problems and gain an advantage in the real world is far from novel. For example, consumer loyalty points programmes leverage at least some of the elements and characteristics associated with games. In recent years, interest in gamification has been accelerated by: The ever-increasing pervasiveness of smart devices, such as phones and watches, that provide a platform for gamified activities; and The rise of the ‘attention economy’, where attention is individuals’ scarcest resource. The ability of gamification to attract and hold the attention of consumers, employees and other stakeholders is of significant interest to organisations. Many of us are now very familiar with fitness tracker devices and related apps, the experience of which is grounded in gamification. A variety of goals are set out (steps per day, calories burned and so on). Constant feedback and reminders are received (“Did you move enough this hour?”). Daily targets achieved are celebrated, and badges are awarded for more significant milestones. Fitness trackers also allow goals and achievements to be shared with friends, motivating us and encouraging competition. In business, activities such as marketing, customer relationship management and innovation are especially suitable for gamification. Other potential applications include personal productivity management and health management. The global market value of companies developing and deploying gamified activities and processes is expected to be $12 billion in 2021. Gamification also has the potential to make a difference in education and training. Capturing the attention of students, engaging them, and sustaining their interest has always been a challenge. Many educators feel their work has become more challenging as an ever-increasing array of digital distractions compete for attention. With its promise of positively engaging students and mediating their behaviour, gamification is a valuable tool that can be used to appeal to the digital generations. Gamification in accounting education From one perspective, education has always been gamified to a degree. A final grade can be seen as an external representation of how much you have learned relative to the content of your course. Tests and quizzes provide feedback on how much students have learned, both in absolute terms and relative to their peers. However, many educators are now becoming far more systematic about applying gamification to the design and delivery of their courses. When thinking about how gamification can be applied in educational and learning contexts, it is useful to think of it in terms of engendering particular classes of behaviour in students. For example, a teacher may decide that prompting competition will be effective in motivating students. To attain this goal, a traditional quiz may be adapted. When a student completes the quiz, for example, they will not just be told if they are correct or incorrect, but also how they performed relative to their classmates for each question. A more extreme version would publish results on a leaderboard for everyone to see how they did relative to the rest of the class. Conversely, a teacher may wish to promote collaboration, allocating badges (like ‘Best Explainer’) to a student who helps other students with explanations, using an online forum or a similar collaboration tool. These awards are often valuable in terms of demonstrating valued personal skills and attributes to potential employers. Demonstrated collaborative actions in learning contexts could be integrated into such schemes. Another teacher may wish to prompt creativity. Rather than create a test, the teacher would instruct students to develop a test themselves as a learning exercise, with marks allocated for how well the test meets and tests the learning outcomes of the course. This approach compels students to ask meta-questions about their course, such as: “What am I being asked to learn?” and “How will I know if I’ve learned it?” Extending this approach, students could be asked to take, evaluate and improve on the tests other students create, again prompting collaboration and engagement. Benefits of gamification Gamification is not a one-size-fits-all approach. It requires consideration and careful design to be used effectively and, as with many teaching techniques, it has its advantages and disadvantages. In the context of the teaching of accounting and tax, we have observed interrelated benefits of using gamification. The first and key benefit is improved motivation. Gamified activities are seen as being fun, interesting and engaging, and an improvement on more traditional ‘chalk and talk’ forms of content delivery and assessment. This is particularly the case for younger students, arguably because, having grown up with video games, they are more comfortable with games in general. Improved motivation then explains the other positive effects of gamification we have observed. In general, students tend to be more satisfied with courses that include gamified elements and activities. Students prefer and perform better in courses they are engaged and interested in, and gamification serves that end. More importantly, the learning outcomes for courses, as measured by grades, tend to be better in courses that contain gamified activities. Challenges of gamification In our experience, using gamification in an educational context also involves potential risks and requires careful consideration of at least three key challenges: The most significant challenge is the need for careful contextualisation of gamification. Time and again, we have noticed that different participants respond very differently to gamified activities. One of the most important variances is in how individuals react to competition. Some people are temperamentally inclined to be motivated by competition, while others find it objectionable in an educational setting. This variance seems to occur regardless of the gamification intervention used – some find badges motivating, while others see them as patronising, and so forth. A particular schism we have observed is that undergraduate students tend to respond far more positively to gamification than postgraduate students. From informal conversations, we have inferred that postgraduate students, who have paid significant fees for courses and are much more focused on grades, feel gamified activities are a ‘gimmicky’ distraction. Therefore, we expect that resistance to gamification would similarly be found in professional and continuing education contexts. Gamification works by creating extrinsic motivation like badges, points and leaderboards, as opposed to the intrinsic motivation of learning for the sake of learning. There is a significant body of research that shows how extrinsic motivators can temporarily shift behaviours, but that this shift will be short-lived. Unless the motivators are reinforcing, cumulative, and continually increasing, individuals will become satiated with external motivation, ultimately undermining its long-term impact. The old saying, “You get what you measure”, sums up a final challenge. A well-recognised risk of offering rewards linked to behaviour is that unless the reward is very tightly tied to the desired behaviour, the provision of rewards may encourage behaviours that are not desired by the game designer, but which are more effective at accruing a reward. Conclusion Gamification has attracted much interest as a way of creating more engaging educational experiences. It aligns with the media consumption habits of digital natives. It leverages the power of the pervasive information systems that are now integral to our lives. It offers a framework to address the motivational issues often associated with online learning, particularly useful in the new learning environment forced upon us by COVID-19. It also brings challenges and raises questions. Gamification is perhaps best thought of as a technique to inform the design of content delivery. As with any approach to education, it will be most successful when the learner’s abilities, needs and characteristics are placed at the heart of course design. Dr Patrick Buckley is a lecturer in information management at the Department of Management and Marketing, Kemmy Business School, University of Limerick. Dr Elaine Doyle is a lecturer in taxation at Kemmy Business School, University of Limerick. The business case for gamification ‘Gamification’ is the use of the dynamics and mechanics traditionally associated with computer games to affect behaviour in other contexts. As a generation of children and young adults who have engaged with computer games from their early years enter education and the workforce, educators and employers must understand how gamification can be used effectively to motivate and manage these individuals. This article looks briefly at the strengths and weaknesses of gamification as an educational tool to help facilitate individuals in developing their knowledge and professional skills. Gamification can improve motivation, satisfaction and assist in the achievement of learning outcomes. However, care must be taken to ensure that gamification matches students’ needs and does not obscure the value of learning with badges, leaderboards and the like. As with any tool, it must be used carefully. Nevertheless, the synergy between gamification and the lived experience of young people means its importance is likely to increase over time.

Welcome to a new edition of Accountancy Ireland, the last in what has been an extraordinarily difficult year for most. The best-laid plans made last December are by now  unrecognisable after months spent adapting to shifting realities. Chartered Accountants Ireland started the year with the presumption that Brexit would be the main issue for members in their external environment. Although a global pandemic overshadowed it, the Institute has worked throughout the year to support members on Brexit-related matters and to advocate on their behalf. As we approach the end of the Brexit transition period, our events and updates have continued. We recently opened registration for the third intake of students for our Certificate in Customs and Trade and, in the final quarter of the year, launched a new Brexit Digest e-newsletter full of practical guidance for businesses in Ireland and Northern Ireland. In recognition of Chartered Accountants’ critical role in driving the sustainability agenda, the Institute also recently published the Sustainability for Accountants guide, along with a Sustainability Hub on our website. The fight against climate change is now a corporate imperative. Moving our gaze west, Americans have gone to the polls and the New Year will bring a new administration. In this edition, we look ahead to what the next four years might bring. Change is also afoot in global tax, and Accountancy Ireland looks at the OECD’s proposed reform of the global digital and corporation tax system. Closer to home again, the Institute has endeavoured to respond quickly and effectively to meet the needs of members during the COVID-19 pandemic. Our primary focus has been on providing timely, helpful and practical support to members as they serve their clients and steer their organisations. As an educator, we are acutely aware of the challenges facing students during these months. Our education provision has evolved dramatically over the last year and our CAP1, CAP2 and FAE programmes successfully launched on our new online education platform. Producing the highest-calibre finance professionals is more important than ever for our economy. This festive season will be very different, but I’d like to wish members and students a peaceful, safe and enjoyable Christmas. For those who find themselves in particular difficulty, remember that assistance is available from CA Support. You can find details on our website. Thank you to the committees, volunteers, management and staff of the Institute for their efforts during 2020. I hope that we can make a return to a more normal way of life in the New Year. Paul Henry President

If you want to work beyond the State retirement age, preparation is key. Des Peelo outlines what needs to be done to guarantee an active professional life post-retirement. Do you intend to continue working into active old age? What is the definition of old age? Current longevity can mean an active life to age 80+. Age 65 has historically been seen as retirement age, though one-in-six of the current workforce is aged over 65. There is also the regular commentary as to 60 being the new 50, 70 being the new 60 and so on. Working after first retirement is now referred to as a ‘second act’ of working life. Professional life may be another indicator of working into old age. Self-employed professionals across all professions frequently practice well into later life. However, retirement is currently compulsory at age 60-62 in most large legal and accounting firms. The retirement age in professional firms in the UK can be as low as 55. There is also a reported trend in the UK towards a tapering role for seniors/partners over the five years from 55 to 60. Commercial life does not generally encourage working past the late 50s/early 60s, despite the debate about ageism and inadequate pensions. There is a perception that older workers are expensive. The reason for mentioning the above is that there can be a mindset in successful mid-career, at senior level, that options to continue working into later life will be readily available. I have witnessed many expressed beliefs that offers of non-executive directorships, consultancy, advisory roles or dispute resolution will all be there when the time comes. However, this expectation is a fallacy. Your contacts and relevance to current developments and trends will age with you. It is a truism in professional life, maybe less so in commercial life, that you carry out much of your business with people aged five years or so either side of your own age. It may also be that your contacts are particular to your role and job, and not to you personally. If work continuity into older age is your aspiration, how might you plan for it? The primary underpinning is to keep your knowledge and skills relevant. This means actively continuing your business/professional development. Membership of professional and industry/sector associations – and regular involvements and attendances – is important. Speaking at, and attending, seminars and conferences is always good value in developing wider recognition. An industry focus can create good possibilities for continued work, as compared to occasional assignments. For example, a knowledge of tourism carries through to many different aspects and opportunities in transport, hospitality and leisure. Food, construction and communications are other sectors with broader prospects. Financial/accounting skills alone are not in demand unless linked to a particular sector like the ones mentioned above. There is a wide range of part-time opportunities in the not-for-profit sector. These can range from charities to health service providers and cultural institutions. While there isn’t usually remuneration in the not-for-profit sector, it does give you continued contacts and involvement. It is a useful idea to pursue these opportunities in the decade before retirement, as it creates a separate identity that can continue post-retirement and can look good on a prospective CV. It also has the satisfaction of contributing to wider society. The ‘second act’ will not happen without preparation. Des Peelo FCA is the author of The Valuation of Businesses and Shares, which is published by Chartered Accountants Ireland and now in its second edition.

Growing older can be challenging, doubly so during a global pandemic where nothing is certain. How, then, do we cope with this transition? Dr Eddie Murphy gives sage advice on navigating midlife and restoring meaning and passion to our lives. Psychologist Elliot Jaques coined the term “midlife crisis” in a 1965 article referring to a time when adults reckon with their mortality. However, most people do not develop classic midlife crises. Some individuals develop conditions such as depression and anxiety, but not everyone. Rather than the doom and gloom associated with a midlife crisis, use this period for taking stock instead. A time of transition Midlife is the central period of a person’s life, spanning from approximately age 40 to 60. It is a time of transition. We can all struggle with times of transition – bereavements, unemployment, illness and so on. Many people come to feel discontented and restless as they struggle with ageing, mortality, and holding onto a sense of purpose. Other challenges also occur during this transition: an empty nest, financial concerns, a clearer sense of mortality, and growing unhappiness with the daily grind. For some, the temptation of ‘far away fields’ or a red sports car can look persuasive. At this point in life, it is easy to tally failures and disappointments with an overly negative focus. People struggle with their life’s purpose, but here are some ways you can find your life passion and true purpose. 1. Explore the things you love to do We are all born with a deep and meaningful purpose that we have to discover. Your purpose is not something you need to decide – it’s already there. You can begin to discover your passion or your purpose by exploring two things: what you love to do, and what comes to you easily. Work is required, but suffering is not. If you are struggling and suffering, you are probably not living your purpose. 2. Decide where you want to go Decide where you want to go by clarifying your vision. Then, lock in your destination through goal development, positive affirmations, and visualisation, and start taking actions that will move you in the right direction. 3. Focus on your legacy Think about the legacy you want to leave behind once you’re gone. How are your relationships? How is your health? How do you want those things to be remembered? Once you are focused on what you want, the ‘how’ will show up right when you need it. 4. The Passion Test Developed by Chris and Janet Attwood, The Passion Test is a simple, yet elegant process. You start by filling in the blank at the end of the following statement 15 times with a verb: “When my life is ideal, I am ___.” Once you’ve created 15 statements, you identify the top five by comparing the statements against one another to determine which is most important. Take the winner of that comparison and decide whether it’s more or less important than the next statement until you’ve identified the passion that is most meaningful to you. Repeat the process with the remaining statements to determine your next four passions. Next, create goals for each of your top five passions so that you can look at your life and easily tell whether you are living that passion. It can be tough work to understand your passions truly. But once you know how to create action plans, you can turn your dreams into reality. Dr Eddie Murphy is a clinical psychologist, mental health expert and author. Can you give a gift and change a life this Christmas? Our community has had to deal with job loss, sudden illness, the loss of a loved one or high levels of stress, anxiety or depression. To continue to provide ongoing support to those in need, we urgently require your help. Donations big and small could help to change a life. Click to donate today or see more about CA Support and how we can help you.

It’s Monday morning, and you’re already exhausted at the thought of having to attend yet another video call. How can we cope with ‘Zoom fatigue’? Annette Clancy gives guidance on how to deal with this exhaustion, as well as tips on alternatives to video calls. Since COVID-19 hit, more of our time is spent on video calls. If you have found yourself exhausted at the end of a workday on Zoom, you aren’t alone. Recent research has established that ‘Zoom fatigue’ is real, and searches on Google for the phenomenon have increased steadily since March. Why are video calls so much more tiring than real meetings? Non-verbal communication Being on a video call requires much more focus than face-to-face conversations. We must listen more intently to pick up on information and give out obvious cues to callers to let them know that we are interested in the conversation. Our feelings and moods are typically conveyed through body language and non-verbal communication. Keeping sustained eye contact to let the other speaker know that we are actively listening – in the absence of other non-verbal cues – can take much effort. Being ‘always on’ When we meet people face-to-face, or even when we speak on the phone, we are used to looking away occasionally. Video calls require us to stare continuously at the screen or camera. How often would you stand close to a colleague in the workplace and look them directly in the eye over a sustained period? Probably never. It would feel profoundly uncomfortable and be very tiring. On top of that, when we are on camera, we may feel nervous about being watched and begin to experience the associated anxieties around performance. This causes our energy to deplete. On-screen distraction Research has shown that when on a video call, we spend most of the time distracted by ourselves, and other people’s faces and backgrounds (there are even social media accounts dedicated to rating and ranking Zoom bookshelves and backgrounds). If you are in a meeting with ten others, it can feel like you are in 10 different rooms. This is additional data for your brain to process, which contributes to fatigue. Talking to the TV As working from home enters its ninth month, the boundaries between work and personal life may start to blur. Video calls are now the norm for both socialising and working, and many spend too much time ‘on-screen’ and not enough with family. Video calls have become the default mechanism of communication and, as a result, we are meeting everybody outside of our immediate family circle via video calls. This means that nearly all our relating is taking place in an emotionally exhausting environment, and we are not getting enough time to rest and replenish our energies. How can we recover from Zoom fatigue? Video calls are not going away, but we can limit our exposure by asking if a video call is always necessary. Although it has become the default, by suggesting an alternative, you may find that a colleague is pleasantly surprised that you have taken the initiative. Sometimes a well-crafted email will work just as well. And there is always the good old-fashioned telephone. If you are spending too much time on video calls at work, then opting out of a group invitation to spend more personal time by yourself or with family can only be a good thing and a healthy alternative. Dr Annette Clancy is Assistant Professor at UCD School of Art, History and Cultural Policy.

The Temporary Wage Subsidy Scheme has ceased as of August 2020, but what does this mean for employers and their employees in terms of tax liabilities? Olive O’Donoghue explores the different options available. While the Temporary Wage Subsidy Scheme (TWSS) ceased at the end of August 2020, there are three main projects to be completed before the scheme will be fully closed off:  Revenue’s reconciliation; finalisation of employer compliance checks; and payment of employee taxes. The main objective of the reconciliation process is to ensure Revenue recoup any excess subsidy paid to employers. While the expectation would be that most overpayments occurred in the Transitional Phase of the TWSS (mainly because, for the first few weeks, employers received a flat €410 per eligible employee per week irrespective of the amount due), it is possible that overpayments may also have occurred for other reasons. For example, a clawback of subsidy would also be required where an employer has paid an employee more than their average revenue net weekly pay. All employers who availed of the TWSS should have already submitted details of subsidies paid to employees over the course of the scheme. Following receipt of these files, we understand that the reconciliation process is underway. While we expect this process to be finalised by the end of 2020, a fixed date has not yet been provided by Revenue. The employer compliance checks continue and, while many employers have already received the letters from Revenue, a number are still issuing. Throughout the operation of the TWSS, Revenue stated that it would adopt a pragmatic approach in assessing an employer’s eligibility for the scheme, and the experience with compliance checks supports this. It is worth noting that Revenue is utilising the compliance check process as an opportunity to raise queries/concerns on PAYE real time reporting issues, so employers should be mindful of this as they move through the compliance process. The tax treatment of subsidies payable under the TWSS has been a contentious issue amongst employers and employees, mainly due to the impact this treatment has to an eligible employee’s overall net pay position for 2020. While there has been significant push back from various bodies and interested parties over the last few months, unfortunately Revenue’s position remains that the TWSS will be subject to income tax and USC. In January, all eligible employees will receive a preliminary end of year statement from Revenue via Revenue’s MyAccount. This will show an employee’s estimated tax liability for 2020 – or, in some cases, a refund. The employee may wish to claim additional reliefs, such as medical expenses, additional pension contributions, etc. Once the final liability is determined, the employee can choose how they would like it to be settled. The employee may choose to settle the liability in full, directly with Revenue, make a part-payment to Revenue upfront with the balance being paid by way of reduced tax credits over four years from 2022, or elect for the full liability to be settled by way of reduced credits over four years from 2022. Recently, Revenue helpfully issued an update advising employers that they can settle the employees’ tax liabilities arising from the TWSS without a gross-up being required through payroll. The guidance notes that employers can make a payment to each employee to settle their liability directly with Revenue or, alternatively, an employer may choose to amend their last payroll submission for 2020 to capture the additional income tax and USC due by the employee. Further details on this can be found on revenue.ie. Olive O’Donoghue is a Director of Tax in KPMG.

With many of us working remotely for now, it is imperative that Irish tax rules around the 'normal' place of work, as well as expenses, are re-evaluated. Colin Smith explains. The Department of Business Enterprise and Innovation (DBEI) recently published the results of its remote working consultation held in August. While submissions to the DBEI covered a wide range of topics, nearly 200 of the 520 submissions raised tax and financial remote work-related concerns. The CCAB-I was among the submissions to outline tax problems in the context of remote working. A special interdepartmental group has been set up to take over for the DBEI to work on the Programme for Government’s promise to develop a remote working strategy. Current measures As outlined by the Minister on Budget Day, there are tax measures in place, to some extent, to support remote workers: Employers can contribute up to €3.20 per day to cover the employee’s additional costs of working from home, such as electricity, heat and broadband, without triggering a charge to benefit-in-kind (BIK). Many employers cannot afford to make such a contribution in the current economic climate. In the UK, the Government provides tax relief of £1.20 per week to lower-rate taxpayers and £2.40 per week to higher-rate taxpayers, when workers are required to work from home due to COVID-19 restrictions. The UK measure is modest, but it’s easy to claim the relief and it recognises that workers are out of pocket due to the restrictions. A similar measure should be considered by the Irish Government. Employees not in receipt of a contribution from an employer can make a claim for tax relief directly from Revenue of 10% of the cost of electricity and heat as apportioned over the number of days worked at home over the year. Revenue recently announced that it will also allow a claim for 30% of the cost of broadband apportioned over the number of days worked at home over the year. An employee working from home cannot claim tax relief for the purchase of work-related equipment such as computers and office furniture. However, the employer can provide such equipment to the employee and a BIK charge will not arise so long as private use is minimal. Employees can make a claim for tax relief directly from Revenue for other vouched expenses incurred “wholly, exclusively and necessarily” in the performance of the duties of their employment. Revenue applies a strict interpretation on the meaning of wholly, exclusively, and necessarily based on case law: an employee can only claim a deduction where the expense is incurred entirely in the performance of their duties, the employee is required to incur the expense in the performance of their duties, and they could not have carried out their duties without incurring the expense. These are complex rules and the odds of making a successful claim are stacked against the employee in the context of working from home. Fairer and more accessible tax rules must be developed as part of an effective strategy for remote working. ‘Normal’ place of work As set out in the CCAB-I’s submission to DBEI, an employee’s normal place of work is central to the tax treatment of travel and subsistence reimbursements to employees. Revenue holds the position that an employee’s home does not qualify as a normal place of work other than in exceptional circumstances and this brings complexity to what should be a straightforward matter. Employees and employers have risen to the challenge of new work practices as necessitated by COVID-19, and Irish tax rules must now align with these practices by re-evaluating what is a ‘normal’ place of work for tax purposes and the rules for tax deductible expenses of employment. Colin Smith is a Tax Partner at PwC and member of CCAB-I Tax Committee South.

The government has recently announced details of a new support scheme for businesses, but it has limitations that need to be addressed. Paul Dillon outlines the role Chartered Accountants must play to raise awareness of these limitations. Details of the COVID Restrictions Support Scheme (CRSS), announced as part of Budget 2021, were recently published by Revenue and registration for the scheme has officially opened. By offering a support of up to €5,000 per week, the scheme will be very valuable to businesses impacted by Government health and safety restrictions. However, the biggest hurdle for businesses will be meeting the many terms and conditions necessary to qualify. To begin with, the guidance issued by Revenue is over 45 pages long. While detailed guidance is always helpful, the length of the guidance speaks volumes about the complexity of the scheme. Further, it piles more paperwork on businesses already struggling to stay on top of the demands of operating under lockdown conditions. These same businesses continue to grapple with paperwork for the Temporary Wage Subsidy Scheme (TWSS) by having to respond to compliance check letters and reconciliations for Revenue, which all 66,000 employers who benefited from the scheme must prepare. The CRSS is only available to businesses operating from premises that restricts customers from access due to COVID-19 restrictions. This means that the scheme benefits retailers, restaurants, pubs and entertainment venues, but it cannot be accessed by the many suppliers of these businesses, even though these suppliers are equally impacted by the negative effects of the Government’s COVID-19 restrictions. For example, wholesalers supplying to restaurants, pubs and hotels do not qualify for the CRSS under the current terms of the scheme. Sound engineers who supply their services to the live entertainment sector do not qualify for this subsidy, and all the businesses who provide services to theatres and shows are also excluded from CRSS. Mobile businesses not tied to a fixed premise are also precluded from accessing the scheme. This includes taxis and businesses operated from stalls, such as markets or trade fairs. It is puzzling why the Government has chosen to exclude these businesses from qualifying for the CRSS, especially given the fact that on Budget Day, Minister Donohoe said, “The scheme is designed to assist those businesses whose trade has been significantly impacted or temporarily closed as a result of the restrictions as set out in the Government’s ‘Living with Covid-19’ Plan.” This messaging gave hope to many businesses; however, those hopes were dashed when further details revealed the condition that only businesses operating from a fixed premises with restricted customer access could benefit from the scheme. As Government restrictions to control the spread of COVID-19 are likely to be a feature of life in Ireland in 2021, it is essential that proper supports are in place to help all businesses impacted by the restrictions, like the wholesalers and businesses supplying services to restaurants and hotels. The CRSS will be a lifeline to many businesses and its only fair that the scheme should apply to all businesses impacted. While Government has demonstrated a willingness to revise and refine supports, like the TWSS, it is only when the issues are brought into the public domain by informed commentary. That is why, as Chartered Accountants, we have a role to play in raising awareness of the limitations of the CRSS and lobbying for change. Paul Dillon is Deputy Chair of the Tax Committee South of the CCAB-I and Taxation Partner in Duignan Carthy O'Neill.