Conal Kennedy, Head of Practice Consulting, writes:
As we are going to print, both the Republic of Ireland and the UK are beginning the process of re-emergence from lockdown. The stages of the process have been published, and businesses are starting to plan for the first steps needed.
The COVID-19 pandemic has struck hard at many sectors of business, north and south of the border, and Chartered Accountants in practice are in the forefront of helping business clients to plot a route through and out of the crisis. Some practitioners have found that most of their time since the lockdown in mid-March has been spent firefighting. Clients have needed their expertise in financial planning, accessing finance, restructuring businesses, and applying for state aid. Just as importantly, accountants have been a source of reassurance and trust in uncertain times.
A priority for the Institute has been to put in place a range of information for accountants in practice, working with our Advocacy and Voice team to obtain clarifications and highlight inconsistencies on the government supports available. As always, we in Practice Consulting are at the end of the telephone for you and we have been in continuous contact with members since the start of the crisis. Most of the Institute’s online resources specific to the crisis are now to be found in the COVID-19 Hub. The resources range from guidance on taxation and technical issues to health and wellbeing, and most recently, sources of finance. There is a lot of information in the web pages, and more to be found in our webinars, both live and recorded. We are continuing an active programme of live webinars, many of which are free. All of these are recorded and are immediately made available in what is fast becoming an impressive array of COVID-19 related guidance. In our webinar programme, our range of speakers and experts speak with authority and candour, focused on your needs as a member. In Practice Consulting, we have run six webinars on the response of practices to the crisis and the auditing and accounting issues arising from it. The COVID-19 Hub can be found on the Institute’s website at https://www.charteredaccountants.ie/knowledge-centre/covid-19-hub.
Most businesses will find a way through the crisis through a combination of perseverance, innovation, and ingenuity. However, most will need finance, and access and availability of adequate and timely finance will be crucial to the economic recovery going forward. Recognising this, we have recently introduced Government Supports pages in the Key Resources area of the COVID-19 Hub. Here, we explain the Temporary Wage Subsidy Scheme and the Corona Virus Job Retention Scheme in ROI and NI respectively. See further information regarding these in the taxation section below. We also provide a guide to the broad and growing range of capital supports available to businesses available to business in both jurisdictions. Of note are the recently introduced schemes whereby businesses can defer or warehouse tax debt, which are further discussed in the tax section. Other schemes offer working capital loans or grants. Some schemes are for industry sectors particularly hard hit by the crisis.
Accountants will need to develop an expertise and a familiarity with these resources if they are to help their clients most effectively. A source of finance will effectively meet a client’s needs if the application process is not overly complex or fraught with delays, and it results in timely and targeted funding.
What has been your experience of assisting your clients to accesses sources of government funding, or indeed, in accessing these on your own practice’s behalf? We need your feedback so that we can more effectively help you and, where necessary, to lobby on your behalf. Please participate in our surveys, and of course we welcome hearing from you directly.
One aspect of many offers of finance is that the application process includes a request for an accountant to report on the financial affairs of the business or person. Confirmation requests often take the form of a standard form for the accountant to complete and sign. Accountants should approach such requests with caution. It may be necessary to obtain a separate engagement letter. The Institute advises members to avoid signing such forms where they incorporate a broad and open ended statement, including such matters as confirmations of the client’s ability to repay borrowings or confirming the impact of the COVID-19 crisis on the client’s business. Also avoid using language such as “we certify”, “correct”, “accurate” or “we have ensured” since it implies a level of certainty which cannot necessarily be given. See Helpsheet E19 Reporting to Third Parties in the Members in Practice area of the website at this link: https://www.charteredaccountants.ie/Members/In-Practice/Helpsheets. See also Technical Release 11/2016 Third Party Letters of Confirmation, available in Chariot, which contains a pro-forma wording for a letter to a third party in connection with a request for confirmation.
And of course, sources of finance are of little use unless there are viable businesses to support. There is much that government can do to smooth the path of commerce and industry, and much that you as an adviser can do to guide and support, but the road ahead is still fraught with uncertainty. What is certain to be next for accountants is more change, further challenge, and spurs to innovation. It will be a different profession that emerges from this crisis.
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