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Spotlight

The Institute’s regulatory and disciplinary function is central to maintaining trust and integrity in who we are and what we do. The regulatory landscape faced by the profession has changed beyond recognition over the last two decades. For Chartered Accountants Ireland, this landscape is made even more complex by the fact that we have regulatory obligations in two jurisdictions, and it is likely that one of those will soon be outside the European Union (EU).  While much of the discourse around regulation of the profession in recent years has focused on implementation in Ireland and the UK of the EU audit reform package, remember also that the Institute’s regulatory functions extend beyond statutory audit to insolvency, investment business, anti-money laundering supervision and ATOL licensing (UK travel agents) – all of which is supervised by a variety of State agencies. And this is all underpinned by various regulations of our own, compliance with which goes hand-in-hand with being a Chartered Accountant. Our regulatory stakeholders in Ireland include the Irish Auditing and Accounting Supervisory Authority (IAASA), the Department of Justice, Equality and Reform, and the Central Bank. In the UK, the Financial Reporting Council (FRC), Financial Conduct Authority, the Insolvency Services (one in Great Britain and one in Northern Ireland) and HM Treasury – all providing State oversight or supervision of the Institute’s exercise of its regulatory obligations. More recently, the role accountants in practice can play in the prevention of money laundering has come under particular scrutiny with EU legislation imposing specific requirements for external accountants/auditors to have in place appropriate measures (client due diligence and so on) to mitigate money-laundering risks. In Ireland and the UK, legislation requires the professional bodies to supervise compliance with this regime. Indeed, in the UK there is likely to be established shortly a State agency – the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) – whose role will be to oversee how the accountancy and other professional bodies supervise their members’ AML compliance. The regulatory field is truly a crowded place. All such regulators have similar but different supervisory requirements and needs; all requiring to some extent regulatory plans, periodic reporting, appropriate processes and procedures. It is not surprising, therefore, that over the last quarter of a century, Institute members and practitioners have witnessed the evolution of a suite of bye-laws and regulations necessary to allow the Institute to carry out these regulatory functions. To say that Chartered Accountants work with a complex regulatory framework is an understatement. Why do this at all? A look back at Institute’s Royal Charter provides an insight into the thinking behind what it means to be a Chartered Accountant. This states that the Institute exists to ensure that there are professional accountants with the integrity, skills, expertise and judgement necessary to support the economy and society. It describes the tasks of the then “public accountant” as “difficult” and “important”, requiring observance of “strict rules” of conduct as a condition of membership. The various rules and regulations now applicable to Institute members are of course unrecognisable when compared to what existed some 128 years ago. Nevertheless, the essence of the message these rules conveyed is equally relevant to today’s Chartered Accountant. Our new president, Shauna Greely, recently captured this succinctly: “Integrity and ethics are right at the core of what it means to be Chartered Accountants”. Maintaining trust and confidence in our profession and having regard to the public interest remain key components of the Institute’s mission. Strategy 2020 reaffirmed our commitment in this regard, stating that a key element of the Institute’s aim is to maintain our role as regulator of all Chartered Accountants, so public confidence in the profession is maintained and enhanced. Our commitment to maintain the regulation of our members as Chartered Accountants holds true in the context of the transfer of the regulation of PIE (Public Interest Entities) auditors to IAASA. It is a principle that in the first instance, regulation should be supportive of members in their day-to-day professional lives, backed with stringent but appropriate discipline. In practical terms, the Institute’s regulation and disciplinary functions are central to providing assurance to members and other stakeholders equally that the Institute takes this seriously. The frameworks governing how these functions are delivered, however, have changed significantly over the years. We are no longer a self-regulating body which supervises the performance of many of the core activities traditionally performed by Chartered Accountants such as statutory audit work, investment business services or UK insolvency work. The Institute’s own regulatory obligations in these areas is overseen by the above-referenced State agencies with significant powers to review, instruct, investigate and sanction professional accountancy bodies. In practical terms, this means that the Institute is regularly reviewed/inspected by such agencies; reports of findings are issued; and recommendations made are followed up to ensure implementation – in many respects, such a process will be familiar to many practitioners. A key difference is that the Institute could possibly be subjected to a number of different reviews/inspections, findings and closing meetings annually. Such change in the regulatory landscape governing our profession is an essential element in maintaining confidence in what we do; the Institute has long acknowledged this. For example, the recent transfer of responsibility to IAASA for the supervision and inspection of audits of so-called public interest entities (PIEs) has been long supported by the Institute as a critical element in reaffirming confidence in statutory audit. To answer the “Why do it?” question above, I do believe that the Institute continues to be well-placed to play an important role in the delivery of regulation and discipline. Current arrangements allow members in practice, in particular, to carry on a range of activities (those regulated by statute) that would otherwise require them to be regulated/supervised separately by a number of different State regulators whereas, at present, in this regard the Institute provides a single point of reference and regulation. Change and challenge Undoubtedly, the most significant change to the Institute’s regulatory framework has resulted from the transposition in Ireland and the UK of the EU’s statutory audit reform package, which took effect from the middle of last year, with Ireland due to complete certain aspects of the transposition later this year via a Companies (Statutory Audits) Act. In transposing this legislation, the UK and Ireland could have put the professional bodies out of the audit regulation business, full stop! Instead, both jurisdictions have opted to avail of a “delegation approach” which permits State competent authorities (IAASA and the FRC) to delegate certain audit regulatory activities back to the professional accountancy bodies, but subject to specific terms and conditions. This regime is now live in the UK between the FRC and the recognised bodies and is currently being discussed in Ireland between IAASA and the recognised accountancy bodies (RABs). In Ireland, while the general consensus may have been that these new regimes will actually mean a certain degree of ‘de-risking’ by the accountancy bodies, given that IAASA has now assumed responsibility for supervision of PIE audits, there are aspects of the current legislative proposals, particularly relating to the supervision and investigation of auditors from other EEA states, which will require further scrutiny. It is also proposed that the RABs will retain responsibility for investigating complaints concerning PIE audits which have not arisen as a result of an IAASA inspection (nobody said this was simple!) Ultimately, as with any scenario where the Institute is being asked to assume regulatory responsibilities, whether by statute or otherwise, Council of the Institute decides on whether these delegation terms and conditions are acceptable, taking account of costs, resource needs, risks to the Institute and advantages/disadvantages to members and firms. The Institute has already signed up to a similar delegation structure in the UK. And assuming it does likewise in Ireland (with IAASA), we embark on a new relationship with our two key regulators in terms of the supervision of statutory audit. And while the scope of responsibilities of IAASA and the FRC differ somewhat, the new regimes provide a platform that will also require positive relationships to deliver on a shared agenda of promoting confidence in the profession, albeit acknowledging the need for a certain degree of healthy tension that, by necessity, must exist between all concerned. The Institute, of course, has an ongoing imperative to deliver its regulatory functions in a manner that is efficient and fair. I would add to that ‘proportionate’ and ‘balanced’. An ongoing challenge for regulators, I believe, is to achieve an approach to regulation which, as well as assuring compliance with relevant regulatory and professional requirements, also adds value and encourages and recognises high standards and quality. Practitioners, in particular, already face significant challenges in serving the needs of clients. So where we can provide assistance in addressing the requirements of what often seem difficult and complex professional requirements, we should. Members in business too are obviously subject to the Institute’s range of bye-law and regulatory requirements, particularly with regard to Continuing Professional Development (CPD). Note that while the quantum of CPD is important (whether input or output-based), a popular misconception that exists is that this must be primarily in core areas such as financial reporting. What is important is that CPD undertaken is relevant to the day job, be that marketing, compliance, HR, IT and so on. CPD in so-called softer skills also constitutes relevant CPD. Of course, where there is alleged misconduct, the Institute is obliged to ensure that this is dealt with in accordance with appropriate processes and procedures. Undoubtedly, the adversarial nature of a regulatory or disciplinary process can be difficult for all parties involved – and it is! The only certainty with regard to the regulatory environment in which the profession operates is that it will continue to change. Revised audit exemption thresholds introduced finally by the Companies (Accounting) Act, 2017 in Ireland may well result in more firms deciding that they no longer require an audit licence. Indeed, where firms are not providing services requiring any form of statutory oversight by the Institute, the need for continued membership may be questioned given there continues to be an inequitable regime in Ireland and the UK on the recognition of the term “accountant” or the provision of accountancy services (although there would continue to exist a requirement for supervision under AML legislation). Recognition of the term “accountant” was one issue raised recently at a meeting between the Institute president and Minister Mitchell-O’Connor. In Ireland and the UK, we may see amendments to the investment business licencing regimes as a result of transposition of the EU Insurance Distribution Directive, due for transposition next year. We can also expect further enhancements to AML requirements. So it’s not just about statutory audit. The Institute’s  regulatory/disciplinary function is one component of the Institute’s key strategic priority of promoting and maintaining trust and integrity in who we are and what we do. As identified in Strategy 2020, our underlying challenge is to perform our regulatory responsibilities in a manner that has the confidence of external stakeholders and our members. Anything else? Did someone mention Brexit? Aidan Lambe FCA is Director of Professional Standards at Chartered Accountants Ireland.

Jun 01, 2017

The website will be offline between 6 am and 8 am tomorrow the 26 July 2017 for essential maintenance.

Jul 25, 2017
Press release

The Salary Survey press release issued on Wed June 28, below. Annual Salary Survey shows accountants in Leinster earning €106k average, newly qualified earning €56k-€58k Louise O'Leary, The Panel search and selection with Oliver Holt, Leinster Society Chairman The average salary package (base salary + car or car allowance + bonus) for a Chartered Accountant in Leinster is over €100,000 for the fifth year in a row, according to new research published today. The 2017 average salary package is €106,500, at similar levels to 2016 and reflects significant demand for Chartered Accountants at all levels. The survey of more than 1,700 Chartered Accountants was carried out by Chartered Accountants Leinster Society in association with The Panel search and selection consultancy. The research reveals that eight out of ten Chartered Accountants have seen their salary increase by at least 10% over the last three years. The average salary package for a Chartered Accountant working in industry in their first year post-qualification now stands at €56,800. Those in their first year post-qualification in financial services are earning slightly more with an average package of €58,800. The survey also indicates a healthy level of career progression within the Chartered Accountancy profession, with 45% of those surveyed having been promoted in the last three years. This is up from 41% for the same period in 2016. Chartered Accountants also reported feeling confident about their employment prospects, with 89% finding the jobs market positive. 23% of them reported moving to a new job in the last 12 months.   The salary survey also shows that most Chartered Accountants in Leinster currently work in industry, business and financial services, with 68% working in these sectors all together, while 21% work in an accountancy practice and 11% are in public service. The survey also points to the other benefits enjoyed by Chartered Accountants. 24% of respondents either have a company car (5%) or receive a car allowance (19%).  19% of respondents receive share options.   Commenting on the results of the salary survey, Oliver Holt, Chairman of Chartered Accountants Leinster Society said: “The 2017 Leinster Society salary survey shows a profession much in demand, with considerable career opportunities, whether in financial services, public practice or industry. “I would like to thank the 1,700 Leinster Society members for contributing to one of the most detailed and representative of such studies in Ireland. “As well as benchmarking salaries, satisfaction, career progression and non-monetary compensation were also measured, making it valuable not just for members and employers, but also for those contemplating a career as an accountant. Chartered Accountancy remains the largest single employer of new graduates in Ireland. “For these potential Chartered Accountancy students, we are seeing more training vacancies available in businesses and practices across Ireland for graduates of all backgrounds, and the Institute is championing more flexible entry-routes into the profession for talented people. The survey demonstrates why Chartered Accountancy remains the leading accountancy qualification in Ireland due to its attractive rewards, international opportunities, and rapid career progression.” Paul McArdle, Managing Partner of The Panel, who assisted in analysing the survey results said: “The survey points to a buoyant jobs market where there is real competition for talent. Almost 80% of our survey respondents have seen their salary increase by more than 10% in the last three years. Employers are clearly keen to retain that talent and the survey points to an appetite for greater work/life flexibility as a key priority for these highly skilled finance professionals. It also demonstrates the importance of Chartered Accountants in the current climate and the range of roles they hold.” Full details of the Annual Salary Survey of Chartered Accountants Leinster Society in association with The Panel can be viewed at www.charteredaccountants.ie/Leinster/Salary-Survey The PowerPoint slides from the salary survey breakfast briefing are available online.--> To find out more about becoming a Chartered Accountant, visit www.charteredaccountants.ie/study Key Findings: Average Salary Package (base salary + car or car allowance + bonus) for a Chartered Accountant in Leinster is €106,544. (Salaries were surveyed as at 31 January 2017) The Average Salary Package for a Chartered Accountant in their first year post-qualification taking a position in industry stands at €56,800. The Average Salary Package for a Chartered Accountant in their first year post-qualification taking a position in financial services is €58,800. 79% of respondents have seen their salary increase by at least 10% over the last three years. The salary survey also shows that most Chartered Accountants in Leinster currently work in industry, business and financial services, with 68% working in these sectors, while 21% work in an accountancy practice and 11% are in public service. 45% of respondents have been promoted in the last three years (2016: 41%). Members are more confident than ever with 89% finding the jobs market positive. 23% reported moving to a new job in the last 12 months. “How was your bonus calculated?” 1,164 members responded to this question with personal performance being a criteria for 70% of respondents; company performance was a criteria for a similar percentage with one in five respondents citing team performance as a criteria. “What value do you place on work / life balance and flexible working arrangements?”  82% of respondents said that they would sacrifice 5% of their salary for a better work / life balance (45% said they would give up 10% of their salaries, such was the importance of flexibility to them). Ends Note to Editors: Download Annual Salary Survey report here View presentation slides from breakfast briefing Chartered Accountants Leinster Society is a district society of Chartered Accountants Ireland, representing 12,500 Chartered Accountants throughout Leinster. Chartered Accountants Ireland is the largest, longest established and fastest growing professional accountancy body in Ireland with over 25,500 members in 93 countries around the globe.   Average salary package is the total of the basic salary plus bonus and car allowance or car (valued at €12,000 for the purpose of the survey) The survey was conducted by the Leinster Society from 1 to 12 June 2017. Reference:  Bryan Rankin, Marketing Manager, Chartered Accountants Ireland T: (01) 637 7268 / bryan.rankin@charteredaccountants.ie

Jun 28, 2017

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