Technical

AI Extra

After a questionable entrance to the Conservatives’ Party conference, Theresa May still couldn’t tie up a Brexit deal. WORDS BY CRÓNA CLOHISEY ACA In possibly the most important speech of her political career, Prime Minister Theresa May danced onto the stage of the Conservative Party’s conference to an ABBA favourite in early October, declared “austerity is over” after eight years of tax increases and spending cuts, and vowed to scrap the cap on council borrowing to fix the housing market.   As expected, and after the dancing, Brexit underpinned many aspects of the speech, with Ms May warning that a split in the party risked derailing the UK’s departure from the EU. Ms May reiterated that a no-deal Brexit would be a bad outcome for both sides and that the introduction of tariffs and checks at the borders would be “hard”. While she delighted in repeating her mantra that the UK will not accept a border in the Irish Sea, she offered no solution on how to overcome the issue of a hard border on the island of Ireland.  Despite ongoing speculation about her future as Prime Minister, and with only a matter of days left to reach a Brexit deal, the UK leader appeared to be sticking to her guns about her Brexit plans. Emphasising that many livelihoods depend on a strong Brexit and that, in her opinion, the UK has everything it needs to succeed, she said, “if we stick together and hold our nerve, I know we can get a deal that delivers for Britain.” This was never more evident than when the UK leader subsequently refused to sign off on a draft agreement reached by her own negotiating team because it would mean the UK would have to stay within the EU Customs Union indefinitely. While reports are sketchy in terms of the detail of the draft agreement, EU chief negotiator Michel Barnier tweeted that despite “intense” last minute efforts, agreement was not reached on the backstop to avoid a hard border, the main sticking point being the EU’s backstop plan and the UK’s requirement for a definite end-date.  A no-deal Brexit is “more likely than ever before,” European Council President Donald Tusk warned in a letter to EU leaders after the backstop plan caused talks to devolve.  This latest development means that there’s likely to be a summit this month to progress the talks, one way or another.

Nov 01, 2018
Technical

The Education Department, in conjunction with the Head of Ethics and Governance, will launch a series of videos about the importance of ethics in your education and the future of the profession. WORDS BY NIALL FITZGERALD FCA “In looking for people to hire, look for three qualities: integrity, intelligence and energy. If they don’t have the first, the other two will kill you.” – Warren Buffett This statement, which captures the importance of integrity, can also be extended to the importance and relevance of ethics in all things, especially the accountancy profession.  The Head of Ethics and Governance and the Education Team at Chartered Accountants Ireland have produced a series of short videos that aim to educate students to the importance of ethics in the accountancy profession. The videos will present students with examples of ethical dilemmas they may encounter during their studies and exams, an overview of the Chartered Accountants Ireland Code of ethics and insights on how ethics will impact on their training and future careers.  Ethics misconceptions The first misconception with ethics is that it is something reserved only for the philosophical; most people, however, will have endured a difficult ethical dilemma. Stress, sleep deprivation, fear and concern over whether you have done or are doing the right thing does not strike only the most conscientious, but most of us at some moment in our life or career. Ethics is real.  The second misconception is that ethics is something contained solely in a code. Ethics has a lot to do with the values we live and how we behave, which is more than a defined rule or hard-coded version of right and wrong. Our values develop from a very young age and continue to evolve throughout our lives. We are influenced by peers, friends, media, role models, religion and society. We mould, shape and reshape our values to evolve into conventionalist or principled individuals. To say that you have no values is to state that you are amoral, a virtue shared, according to sociologists, by new born babies and psychopaths.  Every day ethics The Royal Charter, which underpins the remit and existence of Chartered Accountants Ireland and members’ role in the accountancy profession, recognised the public benefit as one of the fundamental basis for there being a profession in the first place. The public, which includes the employers and stakeholders we serve, expect and will hold us, as professional accountants, accountable, for the decisions, judgements, actions and behaviour exhibited in performing our duties. Earning public trust is not to be taken lightly and will involve, regardless of your level of technical knowledge, meeting the public’s basic expectation for you to perform your duties in an ethical fashion.  Ethics is understandably one of the important pillars of our profession and this is the basis for its inclusion across the entire syllabus in training to be a Chartered Accountant. There are ethical dimensions to any area of decision-making. While developing a strong professional ethical mind-set will earn you valuable marks in the exams, it will also prepare you for the real life ethical dilemmas you are likely to encounter over your professional career. The four short videos will be a very useful starting point to get you thinking about this important pillar of the profession as you continue your journey to becoming a qualified Chartered Accountant.

Nov 01, 2018
AI Extra

Instead of fighting against new disruptive technologies, companies are now taking a ‘symphonic’ approach and fundementally reshaping how work gets done. By Simon Murphy The renowned German conductor, Kurt Masur, once noted that an orchestra full of stars can be a disaster. Though we have no reason to believe the maestro was speaking metaphorically, his observation does suggest something more universal: without unity and harmony, discord prevails. The many companies competing in markets that are being turned upside down by technology innovation are no strangers to discord. Today, digital reality, cognitive technology, and blockchain — stars of the enterprise technology realm — are redefining IT, business, and society in general. In the past, organisations typically responded to such disruptive opportunities by launching transformation initiatives within technology domains. For example, domain-specific cloud, analytics, and big data projects represented bold, if single-minded, embraces of the future. Likewise, C-suite positions such as Chief Digital Officer or Chief Analytics Officer reinforced the primacy of domain thinking. But it didn’t take long for companies to realise that treating some systems as independent domains is suboptimal at best. Complex predictive analytics capabilities delivered little value without big data. In turn, big data was costly and inefficient without cloud technology. Everything required mobile capabilities. After a decade of domain-specific transformation, one question remains unanswered: how can disruptive technologies work together to achieve larger strategic and operational goals? We are now seeing some forward-thinking organisations approach change more broadly. They are not returning to ‘sins’ of the past by launching separate, domain-specific initiatives. Instead, they are thinking about exploration, use cases, and deployment more holistically, focusing on how disruptive technologies can complement each other to drive greater value. For example, blockchain can serve as a new foundational protocol for trust throughout the enterprise and beyond. Cognitive technologies make automated response possible across all enterprise domains. Digital reality breaks down geographic barriers between people, and systemic barriers between humans and data. Together, these technologies can fundamentally reshape how work gets done, or set the stage for new products and business models. Symphonic enterprise Deloitte’s recent Tech Trends report focuses on the symphonic enterprise, an idea that describes strategy, technology, and operations working together, in harmony, across domains and boundaries by looking at digital reality and the next phase in the augmented reality and virtual reality revolution; the new no-collar workforce that is merging tech and human jobs; and the new core functions of finance and supply. The below trends could offer opportunities and challenges across industries during the next 18-24 months: No-collar workforce: the rise of automation, artificial intelligence and cognitive technologies will impact jobs and job families. The organisation of the future must rewire talent management for the new hybrid human-machine workforce — simultaneously retraining augmented workers and pioneering new HR processes for managing virtual workers. Blockchain to blockchains: blockchain is moving rapidly from exploration into mission-critical production scenarios. Advanced use cases and increased adoption drives the need to coordinate, integrate and orchestrate multiple blockchain initiatives within a large organisation, potentially across multiple blockchains across a value chain.  Digital reality: in the next phase of augmented reality and virtual reality’s evolution, companies are focusing less on the novelty of devices, and are focusing instead on developing strategies and impactful enterprise use cases. As this trend unfolds, IT leaders will work to tackle persistent challenges in core integration, cloud deployment, connectivity and access.  A different angle The message is clear and important:  organisations need to look at emerging technologies from a different angle. When technologies act in unison, we no longer see the enterprise vertically (focused on line of business or isolated industries) or horizontally (focused on business processes or enabling technologies).  In the symphonic enterprise, the old lines become blurred, creating a diagonal view that illuminates new business opportunities and creative ways of solving problems. Of course, some domain-specific approaches remain valuable. Core assets still underpin the IT ecosystem. Cyber and risk protocols are as critical as ever. CIO strategies for running “the business of IT” are valuable and timeless. Yet we also recognise a larger trend at work, one that emphasises the unified “orchestra” over individual advances in technology. “Tech Trends 2018, The Symphonic Enterprise can be read here. Simon Murphy is Partner and Head of Technology Consulting in Deloitte

Jul 03, 2018
Technical

A round-up of recent announcements in the world of accountancy. FRC issues Non-Financial Reporting Directive Factsheet The Financial Reporting Council (FRC) has published a factsheet on non-financial reporting that provides an overview of the new regulations implementing the EU Directive on non-financial and diversity information. The regulations apply to companies and qualifying partnerships with financial years beginning on or after 1 January 2017. Download the factsheet here. New IFAC guidance helps organisations navigate the complicated terrain of accountancy regulation Navigating the national regulatory environment is a crucial part of establishing and developing an effective professional accountancy organisation (PAO). The right accountancy regulation model is vital to ensuring a well-functioning profession that produces high-quality financial information, supports economic growth and development, and is relevant to professional accountants and their clients. In light of regulatory evolution in recent years and the ongoing need for PAOs to adapt to, and actively influence, their environment, the International Federation of Accountants (IFAC) has released new guidance to support PAOs in these efforts. “There is no ‘one-size-fits-all’ solution for accountancy regulation; there are many different models in place around the world that work effectively,” said IFAC Executive Director, Alta Prinsloo. “Understanding the key principles of accountancy regulation, and how they function in practical terms, helps PAOs and their key constituents ensure the profession’s long-term sustainability, and their ability to continue to function in the public interest.” Download the guidance here. IAASA publishes feedback paper on consultation on Proposal to Revise ISA (Ireland) 250 Section A On 31 March 2017, IAASA published its consultation on Proposal to Revise ISA (Ireland) 250 Section A – Consideration of Laws and Regulations in an Audit of Financial Statements, the purpose of which was to obtain the views of stakeholders with regard to IAASA’s proposal to issue a revised version of ISA (Ireland) 250 Section A – Consideration of Laws and Regulations in an Audit of Financial Statements. IAASA has noted the points raised in the responses to its consultation and has published a feedback paper. The revised ISA (Ireland) 250 Section A (effective for the audits of financial statements for periods commencing on or after 15 December 2017) will be published when finalised on www.iaasa.ie. Integrated thinking and reporting helps SMEs drive value Thinking beyond the financial elements of an organisation to other key areas of value creation can help small- and medium-sized entities (SMEs) develop a better understanding of their business and provide key insights for the future. Today, it is critical for organisations to think broadly about performance and strategy, and improve communication to shareholders, investors, customers and suppliers on what drives value for the organisation. Creating Value for SMEs through Integrated Thinking: The Benefits of Integrated Reporting, published by IFAC and the International Integrated Reporting Council (IIRC), highlights how SMEs — and the professional accountants serving them — can benefit from integrated thinking and reporting. “As the engines of economic development, SMEs are critically important to the world’s economy,” said Sylvia Tsen, IFAC Executive Director. “They have significant value beyond the financial, which integrated thinking and reporting helps uncover. An integrated approach can help SMEs, including not-for-profits, increase their impact because it encourages an inclusive view of operations, risks and opportunities, and future outlook.” FRC notes evidence of improving audit quality Leadership of audit firms’ focus on, and investment in, improving audit quality, together with promoting a culture of continuous improvement, is beginning to pay off – particularly for audits of larger companies where the FRC has targeted improvement. In the audit regulator’s second annual Developments in Audit report, the FRC sets out evidence from its own and delegated audit quality reviews, thematic reviews and from audit committee and investor feedback. However, the picture is not consistent across all firms, market sectors and audit procedures. High profile accounting failures, as well as the results of audit monitoring, continue to highlight cases where auditors have not met expectations. While there is evidence of greater professional scepticism, this is also the area where the FRC finds the greatest number of issues. Download the Developments in Audit report here or alternatively, download a summary of the report here.

Sep 01, 2017