Boards and their advisors will need to consider how the spread of coronavirus will affect the governance and operations of their business including risk, internal controls, financial reporting, audit and assurance and other regulatory and corporate reporting requirements. The extent of the risk arising and the impact it may have will vary depending on the company’s specific circumstances and exposure.  Over recent weeks, much has been issued in terms of advice from regulators, and commentary, regarding various financial reporting considerations related to the spread of coronavirus. The challenge is to stay ahead of what is a very fast-moving situation. We are regularly producing webinars and articles bringing relevant updates and expert insights to our members. For example, our Covid-19 crisis: Advice to boards and organisations webinar scheduled on 1 April. We have assembled below some information that we have come across that may be of assistance to members. Commentary should not be taken as advice or as a comprehensive analysis of all aspects. This is a rapidly evolving situation. When reading information at the links below, due care should be taken of the date of issue and any developments in the interim that may not be reflected in the material published, such as updated statements from regulators etc.  Our members’ expertise, judgement and experience are now invaluable to guide each organisation on their unique journey through this crisis. We encourage all our members to remember that your first responsibilities are to yourself and ensure that you stay well. Take some time to review the member resources offered by Chartered Accountants Ireland in relation to wellbeing and building personal resilience at CA Support.  In the meantime, remember that your Institute are here to help you. If there are specific issues where you need help, or if you want to share ideas or insights, please contact us at either ethicsgov@charteredaccountants.ie or +353 1 637 7382. From the regulators  Link  UK Financial Reporting Council (FRC), Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) announced a series of actions (26 March 2020) to ensure that information continues to flow to investors and to support the continued functioning of the UK’s capital markets.  Joint Statement UK FRC Guidance for companies on Corporate Governance and Reporting (Company Guidance Update March 2020 (COVID-19)) – contains guidance on corporate governance matters such as risk management an internal controls, management information, estimates and forecasts, dividends and capital maintenance, Directors/strategic report, viability statement and going concern and some key financial reporting considerations.   Corporate governance and reporting guidance European Securities and Market Authority (ESMA) issued a public statement Actions to mitigate the impact of COVID-19 on the EU financial markets regarding publication deadlines under the Transparency Directive.    ESMA Public Statement  The Irish Government’s Department of Business, Enterprise and Innovation have produced a business continuity planning checklist of preparatory actions in responding to Covid-19.   Business Continuity Planning Checklist The Irish Data Protection Commission and the UK Information Commissioner’s Office highlight some important considerations regarding data protection in the Covid-19 crisis.   ROI Data protection considerations UK Data protection considerations European Banking Authority (EBA) have issued a statement on actions to mitigate the impact of COVID-19 on the EU banking sector.    EBA statement of actions Charities Regulator (Republic of Ireland) have published answers to several frequently asked questions around regulatory reporting and governance matters affecting Charities during the Covid-19 crisis    Charities Regulator Frequently Asked Questions The Charity Commission for Northern Ireland have published updates on regulatory reporting, advice regarding charity meetings, serious incidents reports and accounting matters    The Charity Commission for Northern Ireland update Chartered Accountants Ireland are engaging with government agencies, regulators and the Revenue authorities, North and South, around the impact of the COVID-19 outbreak, and potential issues with filing deadlines, payments etc. Their responses and links to information are regularly updated on our technical and business updates section.    Technical and business updates From professional bodies/organisations    Guidance issued on guidance on Annual General Meetings (AGMs) in the UK and impact of Covid-19. The guidance was produced by law firm Slaughter and May and The Chartered Governance Institute, with the support of the Financial Reporting Council, GC100, the Investment Association and the Quoted Companies Alliance.    Covid-19 AGM Guidance Chartered Accountants Ireland have assembled some information relating to the financial reporting implications of Covid-19. This may be of assistance to board members, audit committees, finance committees and advisors.    Financial reporting implications of Covid-19 Articles and other resources to assist boards and their advisors are available on Chartered Accountants Ireland’s Governance Resource Centre and Webinars microsite.   Governance Resource Centre Webinars Accountancy Europe published (20 March 2020) Coronavirus crisis: implications on reporting and auditing, exploring going concern, post balance sheet events reporting, impact on estimates and judgements and implications for the audit report.    Coronavirus crisis: implications on reporting and auditing Other related information   Ireland’s national association of community and voluntary organisations, charities and social enterprises, The Wheel, have compiled details of several fundraising resources for Irish non-profits and community groups.    Fundraising information and resources for non-profits during Covid-19 This page was last updated on: 27 March 2020

Last evening (Thursday 26 March) legislation was passed in the Dáil to provide for the operation of a Wage Subsidy Scheme for employers.  The legislation provides that key aspects of eligibility for the scheme are largely to be determined by Revenue guidance, and this guidance was published late last evening.  In the interests of delivering a rapid economic recovery after the current crisis we are recommending that our members examine closely and if appropriate avail of the scheme for their own and/or their clients’ businesses. The eligibility for the self-assessment scheme depends on ‘significant negative economic disruption on the employer due to Covid-19’. A qualifying employer must declare that it is significantly impacted by the crisis. According to Revenue this means that the employer’s turnover is likely to decrease by 25 per cent for quarter 2, 2020; that the business is unable to meet normal wages or normal outputs. That a business has significant cash reserves will not necessarily disqualify it from the scheme. According to Revenue, eligibility will initially be determined, largely on the basis of self-assessment and declaration by the employer concerned, combined with a risk focused follow up verification by Revenue. The Scheme is available to employers across all sectors excluding the Public Service and Non-Commercial Semi-State Sector. Key indicators of ‘significant negative economic disruption’ are that the employer’s expected turnover is likely to decrease by 25 per cent for quarter 2, 2020. Revenue outline that the employer is best placed to determine this and may base this judgement on the decline in orders in March 2020, in comparison to February 2020, or the likely turnover for the quarter compared to Q1 or if appropriate Q2, 2019, or on any other basis that is reasonable. The scheme is confined to employees who were on the employer’s payroll at 29 February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020. Employees who were laid off after 29 February 2020 may be taken back onto the payroll for the purposes of this scheme. Read Revenue’s guidance here and Revenue’s FAQ document may be useful. Revenue’s other information and advice for taxpayers and agents is available here. We will continue to advise all members using the appropriate communication channels as soon as further clarifications and updates are received.     

Practice Consulting writes With the impact of the COVID-19 pandemic, an urgent issue facing auditors of entities with March year-ends, and thereafter, is attendance at stocktakes. Non-attendance may result in the inability to obtain sufficient appropriate audit evidence, which may impact upon the audit opinion in the current and subsequent years. The purpose of this article is to provide guidance regarding stocktake attendance for audits of small and medium-sized entities with financial years ending on or after 31 March 2020 in the circumstances of the COVID-19 pandemic.  The measures announced by the UK government and devolved administrations on 23 March 2020 and the recommendations of the Irish government to combat COVID-19 mean that travelling to and from work is only permitted or recommended where this is absolutely necessary and where the work cannot be done from home. Obviously, this has major implications for many businesses and their auditors. Reference to an International Standards on Auditing (ISA) below should be read as referring to the equivalent ISA (UK) or ISA (Ireland) as appropriate. Requirements of ISAs for attendance at stocktake The requirements for attendance at stocktakes are set out in ISA 501 Audit Evidence - Specific Considerations for Selected Items. If inventory is material to the financial statements, ISA 501 requires the auditor to obtain sufficient appropriate audit evidence regarding the existence and condition of inventory, including “attendance at physical inventory counting, unless impracticable”. If stock is counted at a date other than the date of the financial statements, in addition to attendance at the stocktake, the auditor is required to perform audit procedures to obtain audit evidence about whether changes in inventory between the count date and the date of the financial statements are properly recorded. If the auditor is unable to attend physical inventory counting due to unforeseen circumstances, the auditor shall make or observe some physical counts on an alternative date, and perform audit procedures on intervening transactions. If attendance at physical inventory counting is impracticable, the auditor shall perform alternative audit procedures to obtain sufficient appropriate audit evidence regarding the existence and condition of inventory. If it is not possible to do so, the auditor shall modify the opinion in the auditor's report in accordance with ISA 705. Circumstances where attendance at the stocktake may not be practicable There are two main scenarios where it may be impracticable to attend the stocktake – The entity does not conduct a stock take at the year-end; or The entity conducts a stock take and the auditor considers whether it is practicable to attend. You should firstly contact the business to see whether management intends to conduct a stocktake and establish what plans are in place.  The entity does not conduct a stock take at the year-end Since the start of the measures to combat COVID-19, a year-end stocktake may not be carried out by many businesses - The business may be required to be closed, and thus a stocktake may be unfeasible. In this case, you should gain an understanding of the reasons, consider whether you agree, and document why the stocktake is not being held, together with details of any alternative plans that are to be put in place. Alternatively, the business may not be required to close, but decides not to conduct a stocktake for reasons of employee welfare. You should carefully evaluate the reasonableness of management’s rationale for not performing the count and whether you agree, and document why the stocktake is not being held, together with details of any alternative plans that are to be put in place.   However, if you conclude that management’s explanations do not appear to be reasonable in the circumstances, then you should consider whether you need to request management to perform a stocktake. If they refuse, you should consider how this will impact upon your audit, including the risk assessment, including the risk of fraud, and your ability to obtain sufficient appropriate audit evidence.You should also consider whether there may be a requirement to report to any regulator or third party. Note that it may be possible for the entity to conduct (and the auditor to attend) a stocktake if restrictions are lifted and the entity re-opens before completion of the audit.  Stock movement may have been largely frozen during the closure or it may be possible to perform procedures which roll back the stock to the year-end. You should discuss this possibility with the entity, to ensure that you receive sufficient notice of the stocktake to allow you to attend. If this happens, please note the requirements of paragraph 5 of ISA 501 to perform audit procedures to obtain audit evidence about whether changes in inventory between the count date and the date of the financial statements are properly recorded. This would include appropriate cut-off tests. The entity conducts a stock take and the auditor considers whether it is practicable to attend Generally, when stock is material and a stocktake is held, the auditor attends the stocktake, unless it is impracticable to do so.  In some circumstances, the auditor may conclude that it is practicable to attend, even in the current climate, but making sure to take into account that health and safety considerations are paramount. You may also consider taking the opportunity to carry out other audit procedures that need to be carried out at the premises, such as physical verification of fixed assets, bearing in mind that it may be difficult to subsequently gain physical access before the end of the audit. In other circumstances, you may conclude that attendance is not practicable, especially of this consideration is due to health and safety issues. The application material to ISA 501 states that “In some cases, attendance at physical inventory counting may be impracticable. This may be due to factors such as the nature and location of the inventory, for example, where inventory is held in a location that may pose threats to the safety of the auditor. The matter of general inconvenience to the auditor, however, is not sufficient to support a decision by the auditor that attendance is impracticable.” It further states that “the matter of difficulty, time, or cost involved is not in itself a valid basis for the auditor to omit an audit procedure for which there is no alternative or to be satisfied with audit evidence that is less than persuasive”. It may be the case that you consider that restrictions on travel or staff safety make it impractical to attend, or indeed you may be prohibited from attending. In particular, it may be that certain members of your staff are in vulnerable categories and should not be asked to attend. You should carefully consider the facts and circumstances when assessing whether it is impracticable to attend the stocktake. If this is the case, you should document your reasons in your audit working papers.  In some circumstances, it may be possible to observe the stocktake using remote technology, such live video-streaming and/or the use of drones or similar technology.  This, along with other aspects of the issue around attendance at stocktakes in the current COVID-19 climate, is discussed in an Institute for Chartered Accountants of Scotland (ICAS) paper available at https://www.icas.com/professional-resources/coronavirus/icas-updates/icas-issues-guidance-for-auditors-on-attendance-at-stocktakes-during-the-coronavirus-outbreak. The limitations and risks attendant on using technology in place of actual attendance should be carefully considered. Alternative procedures If a stocktake was not attended, then ISA 501 requires you to perform alternative procedures to obtain sufficient appropriate audit evidence.  The application material to ISA 501 suggests as an example that “inspection of documentation of the subsequent sale of specific inventory items acquired or purchased prior to the physical inventory counting, may provide sufficient appropriate audit evidence about the existence and condition of inventory”. Other alternative procedures may be available.  In other cases, however, it may not be possible to obtain sufficient appropriate audit evidence regarding the existence and condition of inventory by performing alternative audit procedures. In such cases, ISA 705 (Revised June 2016) Modifications to the Opinion in the Independent Auditor's Report requires the auditor to modify the opinion in the auditor's report as a result of the scope limitation. Implications for the audit opinion At the end of the audit, you will need to consider the impact of non-attendance at the stocktake on your auditor’s report, in particular whether you have obtained sufficient appropriate audit evidence.  If you conclude that you have not, a qualified opinion or disclaimer of opinion may be appropriate. Please refer to ISA (UK) 705 (Revised June 2016) Modifications to the Opinion in the Independent Auditor's Report. This standard addresses the implications of limitations on the scope of the audit.  In the circumstances described above, a limitation on the scope of the audit may arise from circumstances beyond the control of the entity (such as when you conclude that a stocktake is not feasible, or that it is not practicable for you to attend) and limitations imposed by management (such as when a stocktake does not take place and you disagree with management’s decision not to conduct a count, or to prevent you from attending). This matter may also interact with other audit issues, such as other scope limitations and uncertainties, such as going concern, which may further impact the auditor’s report.

Companies and their advisors will need to consider how the spread of coronavirus will affect their business and how these effects should be reported in their financial statements and directors report. The extent of the risk arising and the impact it may have will vary depending on the company’s specific circumstances and exposure. The company’s year-end date, and the information available from the rapidly evolving situation will also affect how the impact will be reported in the financial statements. Over recent weeks, much has been issued in terms of advice from regulators, and commentary, regarding various financial reporting considerations related to the spread of coronavirus.  We have assembled below some information that we have come across that may be of assistance to members. Commentary should not be taken as advice or as a comprehensive analysis of all aspects. This is a rapidly evolving situation. When reading information at the links below, due care should be taken of the date of issue and any developments in the interim that may not be reflected in the material published, such as updated statements from regulators etc. There is also a need to be cognisant of the accounting framework being applied by an entity (e.g. FRS 102, IFRS etc.), and the jurisdiction, in considering the relevance of any of the information below. From the accounting standard setters/regulators: The FRC has published guidance for companies (26 March 2020) preparing financial statements (‘Company Guidance Update March 2020 (COVID-19)’) and a bulletin for auditors covering factors to be taken into account when carrying out audits during the current Covid-19 crisis. Previously the FRC had issued advice for companies and auditors on disclosure of risks and other reporting consequences arising from the emergence and spread of COVID-19 (18 February 2020). IAASA has published news articles noting the issuing of: the ESMA public statement (27 March 2020) promoting co-ordinated action by National Competent Authorities regarding issuers’ obligations to publish periodic information for reporting periods ending on or after 31 December 2019 in the context of the COVID-19 outbreak (see below); the ESMA public statement (25 March 2020) on the financial reporting implications of the COVID-19 outbreak on the calculation of expected credit losses in accordance with IFRS 9 Financial Instruments (see below); and an earlier ESMA public statement addressing actions that market participants have to take in relation to the COVID-19 outbreak in order to preserve investor protection, the integrity of markets and financial stability (12 March 2020). From professional bodies/organisations: The Institute’s Practice Consulting Team recently held a webinar to assist members in practice (24 March 2020) on ‘Accounting Issues Arising from the COVID-19 Outbreak’, and the link will be available here. ICAEW’s guide, ‘The financial reporting implications of coronavirus under UK GAAP’ (9 March 2020), is aimed primarily at entities preparing financial statements in accordance with FRS 102. ICAS’s article ‘Coronavirus and its impact on financial reporting’ (18 March 2020) summarises some of the areas to be considered by entities when producing their financial statements in this uncertain period, referring to both FRS 102 and IFRS. In their publication ‘Coronavirus crisis: implications on reporting and auditing’ (20 March 2020), Accountancy Europe explores coronavirus’ effects on accounting and reporting for companies as of 31 December 2019 and accounting and reporting for companies with year-ends in 2020. Material from some of our member firms or their international networks: Several of the Institute’s member firms have produced material on the financial reporting implications of Coronavirus. The following is a selection: Deloitte’s ‘Need to know — Accounting considerations related to coronavirus disease 2019’ (20 March 2020) highlights some of the key issues to be considered by entities in preparing their financial statements applying IFRS Standards for periods ending on or after 31 December 2019. EY's ‘Responding to Covid-19’ resource centre includes material looking at IFRS accounting considerations of the COVID-19 outbreak (24 March 2020), with links to two publications, ‘Applying IFRS - IFRS accounting considerations of the Coronavirus outbreak – February 2020’ (which highlights considerations when preparing IFRS financial statements for the year ended 31 December 2019), and ‘Applying IFRS - Accounting considerations of the coronavirus outbreak - Updated March 2020 (highlighting accounting considerations for the financial effects of the coronavirus outbreak when preparing IFRS financial statements for annual or interim reporting periods ending in 2020). KPMG’s Resource centre on the financial reporting impacts of coronavirus includes FAQs on potentially significant accounting and disclosure implications for companies. This resource centre focuses on the potential financial reporting impacts for 2020 period ends. PWC’s ‘Accounting implications of the effects of coronavirus: PwC In depth’ (26 March 2020) considers the impact on financial statements for periods ending after 31 December 2019 of entities whose business is affected by the virus. Their ‘Accounting implications of coronavirus: PwC In brief’  (12 February 2020) looks at the accounting implications of the coronavirus for December 2019 year ends in the context of IAS 10, ‘Events after the reporting period’. Other related information The FCA, FRC and PRA have announced a series of actions (26 March 2020) to ensure that information continues to flow to investors and to support the continued functioning of the UK’s capital markets. ESMA, the EU’s securities markets regulator, has issued a Public Statement (27 March 2020) on the implications of the COVID-19 pandemic on the deadlines for publishing financial reports which apply to listed issuers under the Transparency Directive. ESMA has issued a public statement (25 March 2020) on the financial reporting implications of the COVID-19 outbreak on the calculation of expected credit losses in accordance with IFRS 9 Financial Instruments. ESMA is issuing this statement in order to promote consistent application of IFRS in the European Union and avoid divergence in practice on the application of IFRS 9 in the specific context of the COVID-19 outbreak. The European Banking Authority (EBA) has also issued a related Statement (25 March 2020) regarding the prudential framework and accounting implications of COVID-19.   This page was last updated on: 27 March 2020

ROI ESMA have announced actions to mitigate the impact of COVID-19 on the EU financial markets regarding publication deadlines. UK A new report from the Financial Reporting Council (FRC) highlights that audit firms have invested considerably in the infrastructure required to efficiently capture, collate and organise data. Auditors are however dependent on whether companies have a robust IT infrastructure that allows data to be extracted in a useable form to challenge management. The FRC has launched a consultation on the proposed adoption in the UK of International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other Than Audits or Reviews of Historical Financial Information.  ISAE 3000 was developed by the International Auditing and Assurance Standard Board (IAASB) and contains requirements and application and other explanatory material specific to reasonable and limited assurance attestation engagements, other than audits or reviews of historical financial information. The FRC has issued a discussion paper on Technological Resources: Using technology to enhance audit quality.  Building on the FRC’s recent thematic review, The use of technology in the audit of financial statements, the FRC is seeking further insight into the use of technology and its potential impact on audit quality. International The IASB has released a podcast, featuring IASB Vice-Chair Sue Lloyd, to discuss the de­lib­er­a­tions at the March meeting. The IASB have recently published for public comment Discussion Paper DP/2020/1 on Business Combinations – Disclosures, Goodwill and Impairment. Comments can be submitted to the IASB until 15 September 2020. The IFRS Foun­da­tion has announced that the annual pub­li­ca­tion formerly known as the 'Red Book' is now available. IFRS 17 podcast on March 2020 IASB meeting is now available.

Actions to mitigate the impact of COVID-19 on the EU financial markets regarding publication deadlines under the Transparency Directive While recognising the importance of timely and transparent disclosure of financial reports, ESMA is of the view that the burdens on issuers associated with the COVID-19 outbreak should be taken into account by NCAs – in Ireland’s case, the Central Bank of Ireland in a coordinated way. This is in the interest of investor protection and contributes to the integrity of financial markets in the Union. ESMA therefore, in coordination with NCAs and considering that issuers may be prevented from fulfilling the requirements due to COVID-19, expects NCAs during this specific period not to prioritise supervisory actions against issuers in respect of the upcoming deadlines set out in the TD regarding:  (a) annual financial reports referring to a year-end occurring on or after 31 December 2019 but before 1 April 2020 for a period of two months following the TD deadline; and  (b). half-yearly financial reports referring to a reporting period ending on or after 31 December. See the full statement from ESMA here 

The UK Government announced the details of its new self-employment income support scheme yesterday. However, the first payments won’t be made under the scheme until the beginning of June 2020. We will continue to engage with HMRC on members behalf in respect of this scheme and other business and employer supports in relation to COVID-19. For further guidance on the Coronavirus job retention scheme, you can visit check if you are covered by the scheme, and the claim for wage costs page.   What is it? The Self-employment Income Support Scheme (“SEISS”) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month. HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June. Who is eligible? To be eligible for the scheme the taxpayer must meet all the criteria below: Be self-employed or a member of partnership; Have lost trading/partnership trading profits due to COVID-19; File a tax return for 2018-19 as self-employed or a member of a trading partnership (those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so); Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021; and Have trading profits of less than £50,000 and more than half of total income comes from self-employment.  This can be with reference to at least one of the following conditions: Trading profits and total income in 2018/19 Average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19. How is the scheme accessed? Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account. HMRC is urgently working to deliver the scheme; grants are expected to start to be paid out by beginning of June 2020. For eligible individuals who have not submitted their returns for 2018-19, they will have 4 weeks’ notice from the date of the announcement to file their returns and therefore become eligible for this scheme. When can the scheme be accessed? HMRC is urgently working to deliver the scheme; grants are expected to start to be paid by the beginning of June 2020. According to HMRC, this time is necessary to ensure that the scheme is both deliverable and fair. In the interim the self-employed will still able eligible for other government support including universal credit and business continuity loans. For self-employed businesses which employ workers, the coronavirus job retention scheme may also apply.  

  Given the latest COVID-19 developments, the EU and UK called off their second round of negotiations last week, originally scheduled to take place in London from 18-20 March 2020, leaving future Brexit talks uncertain. With Chief EU negotiator, Michel Barnier testing positive for COVID-19, his negotiation team and UK counterpart, David Frost are now under self-isolation. The revelation that the two main players in the Brexit talks are out of action raises further questions over whether a deal can be struck before the current deadline of 31 December 2020. The UK is currently in a transition period until the end of the year, with the hopes of negotiating a new partnership with the EU.   Read further updates on our Brexit web centre.

  This week, in Irish stories, take a look at updates to Revenue’s guidance on e-working relief for COVID-19. In UK stories, take a look at the latest information on the advice and supports for businesses and employers impacted by the COVID-19 pandemic. While in International news, read about the European Commission adoption of a Temporary Framework on State Aid rules.     Ireland Read about the updates to Revenue’s guidance on e-working relief for COVID-19 Revenue has confirmed that the stamp duty on credit cards will not be collected until 1 July 2020. Read more   UK Read our latest update on the supports for businesses and employers impacted by the COVID-19 pandemic Finance Bill 2019-2020 has been published International The European Commission has adopted a Temporary Framework on State Aid rules in response to the COVID-19 pandemic

The current emergency situations in Ireland and the UK undoubtedly give rise to heightened risks and challenges to Institute firms and their compliance with their anti-money laundering (AML) obligations in both jurisdictions. Our colleagues in ICAEW have prepared useful information and guidance on the implications of the COVID-19 situation and AML issues.  While this material is written in a UK context, the guidance it sets out is also relevant to Ireland.  The ICAEW information can be accessed here.

  The Financial Conduct Authority (FCA), Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) issued a joint statement in which they announced a series of actions to ensure that information continues to flow to investors and to support the continued functioning of the UK’s capital markets.   These will be of particular relevance to our members in the UK and those with UK based clients. The actions include an announcement by the FCA of a two-month extension to the filing deadline. Currently, under the Transparency Directive, companies have 4 months from their financial year-end in which to publish audited financial statements and so for December year ends that is now extremely close.  Under the temporary relief announced on 26 March the FCA will forbear from suspending the listing of companies if they publish financial statements within 6 months of their year-end.   This will be a welcome relief to listed companies and their auditors who need extra time to complete their annual reports.  To further support the markets the FRC have issued guidance for companies on some of the issues presenting challenges across the board. This is complemented by guidance from the PRA regarding the approach that should be taken by banks, building societies and PRA-designated investment firms in assessing expected loss provisions under IFRS9. Audit firms play a key role in the flow of information to the markets and the current unprecedented situation is causing practical difficulties for many auditors both in preparing accounts and carrying out audits which could add to the delays on company reporting.  The FRC has issued a Bulletin for audit firms reminding them of the need to obtain sufficient, appropriate audit evidence in order to be able to give an opinion that is not subject to a disclaimer or qualification due to a scope limitation.  This Bulletin also highlighting that it is likely that the current circumstances lead to more modified opinions in auditor’s reports, than would typically be the case.       

The Institute is in constant contact with the various Government departments and regulators on all matters relating to Covid-19. The focus of our contact since Tuesday has been on the Wages Subsidy Scheme administered by Revenue. We are relaying members’ concerns on the operation of the scheme and the need for clarification, because of the impact on payroll run timing and decisions on staff retention.  Some points have now been answered in the Revenue FAQ document which was published today, which provides additional information for employers and agents on the operation of the Wage Subsidy Scheme.  The scheme is provided for in Part 7, section 26 of the Emergency Measures in the Public Interest (Covid-19) Bill 2020 . The Bill is scheduled for Committee Stage debate around 5pm today and to pass the Dáil after that . It is expected to pass the Seanad tomorrow, Friday, and go to the President for approval by signature.  It is likely to be enacted over the weekend.   Section 26(3) and (19) of the Bill provides that Revenue will publish guidelines on how employers qualify for the scheme and how to satisfy the legislative requirement that there “will occur in the period of 14 March 2020 to 30 June 2020 at least a 25 per cent reduction either in the turnover of the employer’s business or in customer orders being received by the employer.” We are told that guidelines are being developed now by Revenue and will cover the 25 per cent reduction in turnover/customer orders criteria. We do not expect these guidelines to be published earlier than next Monday, March 30. Until such time that the guidelines are available it may be prudent to defer running any payroll or making any decisions on workforce reduction.  Revenue’s other information and advice for taxpayers and agents is available here. We will continue to advise all members using the appropriate communication channels as soon as further clarifications and updates are received.  Click here for more advice and information from the Institute on COVID-19 and keep an eye out for our eNews bulletin tomorrow and our Tax eNews bulletin Monday for further updates.

The speed at which the Covid-19 crisis is continuing to escalate is testing the resilience of organisations in ways that are unprecedented. Boards and executive management need to work together to stay informed about the rapidly changing situation, ensure the continuity of business and the wellbeing of employees, customers and suppliers. Decision-making and management styles need to adapt to effectively manage the uncertainty and disruption caused by this pandemic. Strong and effective leadership is required, and it is important to distinguish the roles expected of the board and executive management in this regard. The board has an important oversight role: monitoring, reviewing and ensuring executive management are taking appropriate actions in response to the crisis. At the same time, the board should be a source of advice and counsel to executive management, guiding and supporting their decision-making. While the board remains ultimately responsible for the organisation, the CEO and executive management are responsible for managing the day-to-day responses to the crisis, for managing the resources to ensure business continuity. In recent days, I have discussed the present crisis with a number of executive and non-executive board members from organisations in various sectors of the economy, from charities sector to multinational corporations, and have summarised their experiences and insights under the four headings below. 1. Putting business continuity plans into action While all board members interviewed said their organisation have a business continuity plan (BCP) in place, these range from a recently developed ‘to-do list’ in a charity to a sophisticated crisis-management process that is tested annually by a global financial services organisation. No plan survives the battlefield and all acknowledged that their BCP is not static. It is evolving in response to imperfections exposed on execution. Some organisations seem to have underestimated the work and facilities required to enable employees to work remotely. The availability of hardware has been a big challenge. A board member of a large private company with a relatively mobile global workforce familiar with working from home on occasion, said they underestimated the additional challenges that arise when all employees are suddenly asked to do so five days a week. Challenges included ensuring staff have correct ergonomic guidance (e.g. desk and chair set up) and managing productivity expectations at a time when employees are being asked to manage both the priorities of work and the priorities of home. Board members from organisations operating in a global marketplace shared insights from how they have been dealing with the crisis since its origins in December 2019. With parts of their operations either controlled directly in or outsourced to other parts of the world, they are closely monitoring what is happening globally. There is an additional challenge for these organisations to update their crisis response plans to respond according to the latest informed intelligence for each jurisdiction they operate in and ensure that the updates are disseminated and acted upon. All see agility and innovation as being key to resilience and survival in these times. Examples from the charities sector include creating online funding campaigns to replace foregone income from street and corporate collections on national fundraising days, and redeploying people facing volunteers to reach out to vulnerable people by phone.  2.  Don’t be a board in isolation Though one board thought it best to cancel its meeting to allow management time and space to deal with the crisis (a decision it quickly reversed), all organisations reported regular and ongoing engagement between the board and executive management, including meetings, updates and liaison with individual board members. All board members interviewed are becoming increasingly familiar with video conferencing technologies such as Microsoft Teams, Zoom and Skype. Some board members highlighted that while there are benefits to holding meetings digitally, there are new challenges, such as how to chair an online board meeting, prioritising the agenda to defer non-urgent (but important) management reports and presentations, and ensuring appropriate discipline in faster-paced decision making. A global financial services organisation is providing more regular updates to its board during the crisis. Maintaining a focus on governance is vital amid the noise and haste. It already has strong governance and regulatory frameworks in place to deal with the pace of change in financial markets and for making big decisions. What is different now is the nature of these decisions, and this is where the depth and breadth of the board’s composition and skills come to the fore. The work of governance functions including audit and risk management remains important and many organisations are virtually engaged with their statutory auditors and other external advisors. 3.  Ask the right questions Our instinctive flight or fight response and natural desire to get past pain and discomfort can quickly, without a calming influence, lead to careless solo runs, wild decisions and poor judgement. There will be elements of the decision-making process during this crisis that will require collective input from the board, internal and external experts, as well as the executive management team. Having access to a diversity of ideas will improve the quality of the organisation’s responses. As a board member of a food distribution company put it, the risks they have to manage in ensuring that supply chains remain open and products can be sourced, that there are sufficient employees available to work, and that employee and public safety concerns are addressed, were front and centre at their last meeting until another board member raised the question of reputational risk. This led to a discussion and concrete actions decided to ensure that measures, already in place, to prevent opportunistic practices such as price gouging, stockpiling, dealing with disreputable suppliers, bribery and corruption, were augmented and enhanced. Executives and non-executive board members alike highlighted the benefits of a calming voice on the board and someone that cuts to the chase and focuses what is within the control of the organisation to action and influence. 4.  The post-pandemic world Even if in survival mode, boards must acknowledge that firefighting alone will not ensure continuity and that opportunities for future benefits must be actively sought out. At this early stage, it is possible speculate on the changes the post-pandemic world will bring for businesses. For example, some organisations will revisit their business models by exploring online trading channels and changing payment handling/processing (card vs cash). More flexible working-from-home arrangements are likely to facilitate greater job satisfaction, employee retention widen the geographical net for recruiting talented people. Each person I spoke to said that they will see at least one significant change in their business in the aftermath of the pandemic crisis, for example: The shared experience of pulling together and surviving this will mean that kindness, solidarity, empathy and social responsibility will become stronger elements of organisational culture. The availability of clear evidence, e.g. improved air quality, will support decisions in relation to the environmental and social impact of working from home, curbing non-essential travel, virtual trading, etc. The social contract is being rewritten and the risk of sudden job losses arising from global ‘black swan’ events resulting in unprecedented state intervention will influence future government policy and taxation. We are in uncharted territory and we should expect changes in business and society now and when we come through this crisis. As the crisis unfolds, new and important information is becoming available from various sources. Chartered Accountants Ireland regularly publishes relevant content on its website, as webinars, articles and checklists, for example collating pronouncements from government, regulators, Revenue/HMRC, listing authorities and registrars. There are also be regular updates relevant to the impact on members’ businesses of the Covid-19 outbreak. Níall Fitzgerald FCA, Head of Ethics and Governance, Chartered Accountants Ireland Download a pdf of the article

The National Crime Agency (NCA) have uploaded the latest UKFIU SARs In Action magazine.  Click here for access.

Chartered Accountants Ireland is continuing to monitor the evolving COVID-19 situation.  The health and wellbeing of our students, staff and lecturers is our primary concern and forms the basis of our decision-making process.  Communications have issued today (Monday 23 March 2020) to all students and training firms The notice to students and to training firms is summarised as follows, but impacted students should consult the Institute’s communication in detail. Face-to-face lectures postponed Following consultations with member firms and student representatives, Chartered Accountants Ireland has announced that it has suspended all face-to-face classes for the remainder of the 2019/2020 education programme.  Students are being directed to existing pre-recorded sessions available on the Institute website.   A number of additional recorded sessions and webinars will be made available to students over the remainder of the programme.  FAE integrated case days will be offered by way of remote learning through a combination of videos and webinars. Examinations Chartered Accountants Ireland’s exam dates for the 2019/20 academic cycle are being rescheduled due to the evolving COVID-19 situation. These exam date changes are as follows. Mock exams: there is no change to our CAP1 Mocks which are offered on a self-directed basis.  Chartered Accountants Ireland will not run physical mock examinations for CAP2 or FAE.  All CAP2 and FAE students will be provided with mock exam papers through the student portal and asked to complete the exam at home.  Mock scripts for CAP1, CAP2 and FAE will not be marked but tutorial sessions reviewing mocks will be provided.  Main exams: The CAP1 main exams originally scheduled for May will now be held on the week commencing 31 August 2020.  The same exam timetable will apply as scheduled for the May exam. The CAP2 main exams that were to be held in June will now be held on the week commencing 10 August 2020.  The same exam timetable will apply in August as planned for the June exam. The FAE main exams will still be held on the week commencing 17 August 2020 as originally planned.   No date has been finalised as yet as to when CAP1/CAP2 Re-sit exams will take place.  The FAE Re-sit exams will still take place as scheduled for the week commencing 4 January 2021.  Study leave: It has been agreed that for students operating within a training contract the available study leave will be split between a period in line with the original planned study leave, and a period prior to the examinations.  This split is designed to balance the needs of students and employers in a fair way.  The quantum of study leave does not change.  The exact timing and split of the study leave should be discussed with employers.   Commencement of the 2020/21 education programme: No date has been finalised as yet as to when the 2020-21 education programme will take place. Enrolment closing dates will be notified once finalised.  Education contacts: Lecture queries: Please do contact us with any queries you might have, preferably by email, as we are working remotely in the main.  CAP1@charteredaccountants.ie / CAP2@charteredaccountants.ie / FAE@charteredaccountants.ie / Studentqueries@charteredaccountants.ie Exams:  CAP1Exam@charteredaccountants.ie / CAP2Exam@charteredaccountants.ie / FAEExam@charteredaccountants.ie.  Chartered Accountants Ireland professional development programmes All participants on classroom sessions of Specialist Qualifications have been contacted and are now being facilitated online.  All scheduled assessments for these programmes will be conducted online.  The situation will be reviewed on an ongoing basis in line with HSE and Department of Health guidance. Participants on any of these programmes who need assistance should contact diplomas@charteredaccountants.ie.  Finally, as noted at the start of this message the Institute’s primary concern is for the safety of its students, members, lecturers, staff and all other partners.

The Finance Bill 2019-2021, which will become the Finance Act 2020, was published last week. The Bill was introduced to the House of Commons and given its First Reading on Tuesday 17 March 2020. This stage is formal and takes place without any debate. MPs will next consider the Bill at Second Reading. The date for second reading has not yet been announced.

In his columns this week, Dr Brian Keegan discusses the impact of the COVID-19 outbreak on businesses in Ireland. In Sunday’s Business Post, Dr Keegan says that for many companies facing tax bills this week, the advice is simple: make sure your VAT return is made to Revenue, and that your PAYE is up to date. In the Irish Examiner, he discusses the extent to which the coronavirus pandemic has changed the ground rules for business.

Chartered Accountants Ireland is constantly engaging with government agencies, regulators and the Revenue authorities, North and South, around the impact of the COVID-19 , and potential issues with filing deadlines, payments etc. We will continue to do so. We will be advising members as soon as we make any progress on any front.  Updates are posted to our website.  

Tax and Duty Manual (Part 04-08-08 ) has been updated to confirm that neither capital allowances nor Case V losses forward can be deducted from Case V income before USC is charged.  

Revenue has confirmed that the stamp duty on credit cards will not be collected until 1 July 2020.  The stamp duty of €30 per year on credit card accounts is generally charged 1 April.  This charge has been deferred to 1 July 2020.   Individual credit card account holders do not need to take any action. The collection date will be changed automatically by financial institutions.