IAASA has published a thematic paper discussing the use of data analytics in Ireland’s statutory audit market, available here. IAASA’s paper provides an overview of the areas where auditors perform data analytical audit procedures and supports in place for auditors in using data analysis tools. IAASA’s paper also discusses challenges faced by auditors when using data analytics and looks at plans for further development and roll out of data analytics in audit. IAASA’s paper identifies key considerations for audit committees and sets out the focus of audit regulators with regard to data analytics, both from an international and an Irish perspective. The appendices to IAASA’s paper provide some examples of data analysis supports and the use of data analysis in audit areas. IAASA’s YouTube channel also now includes a video that shares key observations set out in the paper, available here. IAASA has also published some factsheets summarising insights from this paper. The factsheets on data analytics are available here.

As you head towards qualification as a Chartered Accountant it is time to start to planning your new career as a professional and so here are some key actions you might consider for 2024. Start now and don’t leave it too late since it could be hard to predict what the jobs market will look like next year.    As a ‘newly qualified’ facing into the market in 2024 you will need to be proactive, agile, career focused and very attuned to what the market is doing so you don’t miss the boat. Hopefully the market remains strong for ACA’s in 2024 but to give you an edge we have put together this checklist that you can incorporate into your activities in the months ahead : LINKEDIN : Tick the ‘open to new opportunities’ check box in my LinkedIn settings Get my LinkedIn profile up to 100% completion  Follow companies of interest on LI  Send a polite connection request with message to 10 targeted profiles in LinkedIn each day. Review the profiles of my peers and predecessors on LinkedIn to see what steps their career paths have taken. Join groups on LinkedIn like Chartered Accountants Ireland and sector/skillset relevant groups MARKET MAPPING : Market map the sectors that appeal to you Set up job alerts messages on relevant job websites such as Irishjobs and LinkedIn Open a spreadsheet to track your applications and to facilitate following up on them Check the Irish times 1000 list of companies and examine each sector Research the companies and sectors that are of interest to you Make a list of sectors that interest you and are currently offering job opportunities Consider contract and interim roles Send 5 speculative applications per week to organisations of interest. NETWORKING : Review back issues of Accountancy Ireland or other business publications as research and for networking suggestions Reconnect with the practice where you trained; partners may have clients with requirements now Brainstorm a personal network list of contacts to go through and reconnect with in the weeks ahead Create a spreadsheet of potential contacts to keep track of your progress Analyse closely the organisations and business parks your locality to see what organisations might be recruiting Check the websites of IDA and Enterprise Ireland, Chamber of commerce and others Are the Big 4 firms doing Breakfast networking meetings online now that you could attend? List out the top 10 Buoyant sectors in the current market and research employment opportunities CV : Create a few different versions of my CV. Short / long, sector-specific etc Tweak my CV each week and save new version as I research specs. Seek feedback on my CV from a number of professional sources RECRUITERS : Research 3 reputable recruiters to partner with and build relationships Seek recommendations of recruiters to approach and get a warm introduction where possible Check in with your recruiter regularly for an update either by mail or brief call PERSONAL DEVELOPMENT: Use the Chartered Accountants Ireland Career Pathway tool to clarify your development needs Select a CPD or upskill course to start soon. Speak to my mentor and discuss plan / Get an independent experienced mentor. Review the Chartered Accountants Ireland website for articles and webinars Use the time to get devise a clear plan that reflects what is important to me in terms of a career roadmap and preferences in relation to: salary / location / work life balance / benefits / bonus / hours flexibility / WFH / promotion prospects. INTERVIEW PREPARATION : Start practicing your interview technique F Build a one page bulleted ‘strengths and weaknesses’ skill-set list Develop a bank of examples that you can outline in interview that will showcase your skills and competencies (use the STAR format) SELF -CARE AND WELLBEING :  Allocate time to connect with family and friends F Build exercise and relaxation into your weekly schedule Try to make some time for your own hobbies and interests each week. As always your Careers Team is here for you now that you are embarking on qualification so get in touch with me for CV advice, Interview prep, Career Consultation or any of the above info. Dave Riordan (ACA)  [ dave.riordan@charteredaccountants.ie ] Recruitment Specialist & Career Coach | Careers Team – Chartered Accountants Ireland Chartered Accountants House | 47 Pearse St, Dublin 2, Ireland Phone: +353 1 637 7251 | Mobile: +353 87 9674285                 

As relations with the West continue to cool, China is facing economic challenges reminiscent of the Irish economy in 2008, writes Cormac Lucey Tensions are growing between the China and the US as the latter leads the West in a sharp reversal of a policy of openness and commercial integration, which continued despite concerns about military espionage and intellectual property theft.  Now, the US is reducing its interactions with China, and a wave of reshoring/friendshoring is underway in the West. Under current President Xi Jinping, China has been picking territorial fights with its neighbours and Xi has reportedly asked his military to complete preparations by 2027 to seize Taiwan by force.  Meanwhile, senior Chinese political and business leaders are disappearing suddenly with alarming frequency and non-Han ethnic minority groups, such as the Uyghurs and Tibetans, have been subject to terrible oppression.  The Chinese economy is not faring much better. When I look at China’s economic position, I think we may now be witnessing ‘peak China’.  First, the country’s enormous property/debt bubbles are beginning to deflate. Coming into 2024, China is in a similar position to Ireland circa 2008. Its economic underpinnings are dangerously fragile, the first tremors of deflation are being felt and the authorities are insisting that everything is okay.  Over the past 15 years, China’s total debt levels (public plus private) have doubled relative to economic output (GDP).  According to Numbeo, a website that analyses the cost of living across different countries, rent yields in Beijing range from 1.45 percent (city centre) to 1.69 percent (suburbs). These yields are way below the lowest levels witnessed in Ireland at the peak of our property bubble.  They are lower than Chinese interest rates, meaning that buy-to-let landlords using debt to fund their purchases will face interest charges that exceed their rental income (negative carry).  Thanks to its now defunct ‘one child per family’ policy, which ran from 1979 to 2015, China faces a demographic implosion over the coming decades. The UN forecasts that its population will decline from 1.4 billion this year to 1.3 billion by 2050 – and below 800 million by 2100.  Today, China faces the same demographic and debt-deflation challenges that confronted Japan three decades ago.  For all the messiness and dysfunction of the West, democracy does force a society’s problems onto the political agenda rather than allow them to be suppressed, and it facilitates innovation over stagnation.    Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland

Introduction The agri-food industry operates in a rapidly changing and dynamic business environment, where farmers and food producers, from multinational to artisan, are continually required to innovate and adapt. Events such as the COVID-19 pandemic and the war in Ukraine have increased complexity, disrupting food-supply chains and threatening food security. These circumstances have an impact on food production processes and consequently require a focus on sustainability. Sustainability is a key challenge facing all business sectors, not least the agriculture and food production industries. At a national and international level there is a huge focus on developing a sustainable food supply for a growing worldwide population. The United Nations (UN) forecasts a 34% increase in world population by 2050 and that an increase of 70% in food production will be required. Despite this, the UN reports that 30% of all food produced globally is lost or wasted. Greenhouse gases (GHG) emissions globally have increased by more than 60% between 1990 and 2022. The impact on climate change has been well documented, including increases in the frequency of flooding, droughts and wildfires. Such climate-change effects have serious consequences on food production and necessitate collaboration between all sectors of society to address the challenges presented. In Ireland, the economic importance of agriculture is clear. According to the Department of Agriculture, Food and the Marine, the agri-food sector accounted for 9% (€18.78 billion) of total exports in 2022 and 6.5% of total employment or 164,900 jobs, mostly in rural areas. Farms and farmers also provide valuable sources of environmental assets (e.g. hedgerows, wetlands and woodlands) and contribute to preserving natural habitats and biodiversity. However, from an environmental sustainability perspective there is much debate about the high level of GHG emissions generated by the Irish agricultural industry and how this issue needs to be addressed. In this article, I do not debate the extent to which the agricultural industry contributes to Ireland’s GHG emissions problem, but rather focus on acknowledging that farmers and food producers need to be included in determining a solution.  I also believe that the accounting profession has a key role to play in assisting farm enterprises, and small and micro agri-food businesses, to create more sustainable enterprises and to contribute to a sustainable food supply.  Environmental sustainability in agriculture Environmental sustainability is at the forefront of national and international policy development in agriculture and food production. This is primarily driven by the UN Sustainable Development Goals, as several of them relate to agriculture and food production.  At EU level, the European Green Deal, through its “Farm to Fork Strategy”, has set out plans on how to improve sustainability and the environmental impact of the agri-food industry. These are being incorporated into reform of the common agricultural (CAP).  At a national level, the Climate Action and Low Carbon Development (Amendment) Act 2021 introduced a framework of sectoral GHG emissions (‘carbon’) budgets, to be subsequently developed and proposed by the Climate Change Advisory Council (CCAC). In July 2022 (after much debate) the sectoral emissions ceiling for agriculture was set at a level requiring an ambitious 25% reduction by 2030. Stakeholders acknowledge the fundamental challenge that environmental sustainability presents for the industry. They also acknowledge the key role that the industry must play in addressing the national environmental sustainability challenge. A financial perspective on sustainability in agriculture Sustainability in agriculture is multidimensional and is broadly comprised of three main pillars:  environmental sustainability,  social sustainability, and economic sustainability. Environmental sustainability refers to how agriculture and food production processes impact our environment, and is the most widely discussed pillar of sustainability, the contribution of the industry to GHG emissions attracting significant debate.  Social sustainability in agriculture relates to farming communities, and the many challenges they face, and how the industry’s sustainability affects wider society.  Economic sustainability is generally viewed as economic viability, i.e. whether a farming system can survive financially in the long term in a changing economic context. It is perhaps to the economic sustainability of agriculture that the role and contribution of accountants is most relevant.  The National Farm Survey (NFS) is conducted annually by Teagasc, the Agriculture and Food Development Authority. Highlighting the economic vulnerability of many farm enterprises in Ireland, the 2022 report classes 43% of Irish farms as economically ‘viable’, 32% as ‘sustainable’, and 25% as ‘vulnerable’. At the root of this economic vulnerability is rising inflation and increases in the cost of farm inputs (e.g. fuel, fertiliser and feed), reducing the profit margins of food producers.  The challenge for farm and food production enterprises is to balance economic with environmental and social sustainability. A phrase used in the industry is “it’s hard to be green when in the red”. The NFS statistics reveal a situation of economic vulnerability for many farm enterprises. Therefore, financial viability may understandably be their top priority, with environmental and social sustainability of secondary importance.  However, despite the uncertainty of economic conditions in the short term, the long-term focus on environmentally sustainable food production and its positive social impact should not be forgotten. When a holistic perspective is brought to the concept of sustainability, we realise that the pillars of economic, environmental and social sustainability are intertwined and cannot be simply viewed in isolation.  While there are many scientific solutions (e.g. soil and grassland management, fertiliser use, changes to feed additives, alternative energy sources, shorter animal-to-slaughter periods, etc.) proposed to farmers on how to reduce GHG emissions, there appears to be little known about, or consideration of, the financial impact of such changes to farm practices.  The onus of identifying the changes required to farm practices to reduce GHG emissions on farms is placed on individual farmers, and farm advisory services are available to assist in this regard. However, many of the scientific solutions to reduce on-farm emissions require investment and involve a cost to farmers when making the transition. There appears to be little focus from the advisory services on assisting farmers to assess the economic cost or benefit for them when implementing such changes to farm practices.  Though many farmers want to adapt their work practices to contribute to a reduction in GHG emissions, many experience a knowledge gap regarding the financial impact on their livelihoods. This is an area where improvement in advisory services is required. Bringing a focused financial perspective to sustainability, accountants can contribute to bridging this knowledge gap. I contend that the accounting profession must collaborate with stakeholders in the agriculture industry and lead the way in helping to create sustainable farm and food production enterprises.  A financial management perspective acknowledges that economic sustainability cannot be sacrificed, and is crucial for the survival of farming and food production. Rather, work practices need to change to meet the ‘triple-bottom-line’ agenda of economic, environmental, social sustainability. Farmers and food producers need to be supported and advised to achieve this more complex and yet balanced objective. The role of the accountancy profession It is paramount that farmers and food producers are educated about what sustainability means and the financial implications for their business. Accountants are one of the primary sources of trusted advice for small business owners, including farmers. Therefore, the accounting profession has the potential, and an existing platform, to lead on how farmers and food producers can improve their sustainability, in the broadest sense.  Accountants are unique in having a wide range of knowledge about sustainable work practices from dealing with a varied client base across multiple industries. They can share this with farmers and small agri-business owners.  Accountants could assist farmers and food producers by: identifying the business opportunities for farmers presented by the sustainability transition; conducting cost–benefit analyses of implementing environmental sustainability initiatives (e.g. alternative energy sources); calculating the payback or return on investments that reduce the GHG emissions of enterprises;  helping business owners to avail of financial supports available to meet the cost of sustainability initiatives; advising farmers on how to develop sustainable work practices in a cost-efficient manner; sharing knowledge gained from SMEs and larger companies (e.g. on how to conduct sustainability audits).  Resources are available to support accountants to work with clients in this regard. For example, Chartered Accountants Ireland provide online resources in its Sustainability Centre, where free-to-access publications such as Sustainability for Small Businesses – A Guide provide practical insights. Conclusion There are many ways the accountancy profession can contribute to assisting farmers and food producers meet sustainability targets. These insights are not only important for food and agricultural businesses but are equally relevant and transferrable to how the accounting profession could rise to the challenge of assisting businesses in other sectors of the economy meet the increasing demand to strive for improved sustainability.  Dr Michael Hayden, FCA, is an Assistant Professor of Accounting at Maynooth University  

In the transformative era of 1920s Ireland, the Institute’s benevolent fund emerged as a pillar of aid. Now celebrating 95 years, CA Support remains a vital resource for Chartered Accountants facing hardship The 1920s was a time of immense significance, upheaval and formation in Ireland’s history. With the country’s independence in its infancy, this was a time when many important structures, proclamations, institutions, organisations and charities were born, including Chartered Accountants Ireland’s benevolent fund.  Founded in 1928, a time when there was no state welfare or support, benevolent funds were originally set up to assist those who worked within industries or professions who needed financial help for themselves and their families. In former decades, grants were primarily offered to widows to help them care for children and afford daily necessities. And while society has evolved and shifted, after 95 years, CA Support has proven to be as relevant today as it was then by continuing to be a trustworthy and reliable support system for thousands of Chartered Accountants and their families. It could be you It is a common misconception that financial professionals are always in good financial health due to their professional background. Like anyone in society, accountants come from all walks of life and can struggle financially for many reasons. Those who bravely contact CA Support are dealing with extreme hardships and burdens. Some common issues people present to CA Support with are:  redundancy; critical illness; bereavement of a loved one; marriage breakdown; domestic violence impacts; childcare and back-to-school costs;  household bills; and cost-of-living pressures. CA Support provides financial relief to about 100 beneficiaries every year. These are real people who are your professional peers, colleagues, friends and family who have found themselves in situations that have cost them their livelihood, financial security and family safety through no fault of their own.  Unfortunately, we can’t foresee what lies ahead in life, and for CA Support’s beneficiaries, it was almost inconceivable that they would ever need such support. Strengthening CA Support’s future Like most registered charities, CA Support relies on the generosity and goodwill of the Chartered Accountancy community. Without the kindness of members and organisations on the island of Ireland, CA Support would simply not be celebrating this milestone.  With your continued backing, CA Support hopes to support all those in our community for another hundred years.  If you are able to do so, you can donate to CA Support:  Online via the Chartered Accountants Ireland website or iDonate page at: idonate.ie/cause/casupport; By credit/debit card over the phone on 01 5233949/ 01 6377342 or 086 0243294; or By posting a cheque made out to CA Support at Chartered Accountants Ireland, 47–49 Pearse Street, Dublin 2.

Julia Rowan answers your management, leadership and team development questions I joined a new practice recently and now manage a team of six people. Everybody on the team is polite to me and each other. The work gets done, but there is little collaboration. Almost all communication is by email. Nobody speaks at team meetings. I have tried to find out what is wrong – but nobody will tell me. I find this exhausting. I work from the perspective that ‘everything is feedback’. And feedback is coming your way, loud and clear. The behaviour you are experiencing suggests that trust has broken down somewhere – most likely between team members.  Start to record what it is that you find exhausting about this situation. Do things take longer than they should? Are reasonable quality standards only being met with your input? You need to be able to be specific.  You also need to take a dual approach. First, let the team know that you need something different from them. Be very careful about your language – make observations (“I notice I’m being included in emails”) rather than judgements (“this isn’t good enough”).  Second, you need to start ‘calling out’ the tasks you find yourself doing that are not part of your job and handing each one back to the person who owns it. Conflicts like this can take a long time to get sorted, so it is especially important to be polite, patient and persistent.  I moved from a large consultancy firm to a smaller practice for lifestyle reasons some years ago. It’s been a good move, but I miss the variety, intensity and impact of the work I used to do. The work I do here is much more humdrum than in my previous roles and I feel like the other partners haven’t accepted me. They have worked together for a long time and are of one mind. My ideas are rejected.  I remember coaching a guy years ago who felt like an outsider on the team he managed and with his peers on the senior leadership team. He told me he was “very good at pretending to listen”.  And therein lay his problem: there are some things we can’t fake. Relationships are built on sincerity. So, I wonder what it is like for this practice to have invited you in … a person who finds the work “humdrum”. Do they sense your judgement?  I think the first thing you need to do is work out a way to engage with this practice sincerely. Write down the most honest observations you can make about your experience working there – to yourself, your peers and your team.  Write about how you feel about the practice, your ambitions and what you have lost by joining. Then (and only if you are sincerely interested), find a way to engage with your peers about what they have built and how they built it. What were their hopes, challenges and successes? What are they proud of?   It might also be helpful to look at your language. When stressed, we go to that very definite language (e.g. “they are all on the same page”). And the danger is that we start believing our thoughts.  Might it be more truthful to say, “they are often on the same page” or “many of them are on the same page”?  While that may sound trivial, it can change our perspective.  Once you’ve done this work, you should organise one-to-ones with your peers over lunch or coffee and try to connect with them genuinely. When people feel accepted, they find it easier to accept others. Julia Rowan is Principal Consultant at Performance Matters Ltd, a leadership and  team development consultancy. To send a question to Julia, email julia@performancematters.ie

As we prepare to usher in the New Year, three Chartered Accountants tell us about the biggest changes and challenges they have faced in their professional lives over the past 12 months Michelle Hawkins  Head of Business Advisory FPM 2023 has certainly been an interesting year!  As Head of Business Advisory at FPM, I support both public sector and private clients as they navigate these difficult times. A key challenge in 2023 has undoubtedly been the unprecedented rise in interest rates, resulting in difficulties accessing and servicing finance.  Clients increasingly require support in this area. To address this, our organisation established a dedicated Funding Solutions Division designed to help clients renegotiate their banking and loan commitments. The talent shortage and skills gap that our clients have experienced in the past year has been among the biggest in history.  It’s hard to believe that, in the current economic climate, lack of available talent is the number one challenge keeping businesses from growing and innovating. In response, we launched a Virtual Finance Function to support businesses that need to strengthen or fully outsource their finance department.  Another challenge this year has been the need to help businesses prepare for the impact of the Windsor Framework, which came into force in October. We are fortunate to have customs experts within the AAB Group with which we recently merged, whose knowledge and skills have greatly supported clients adapting to the new regime. John Morgan  CFO Dale Farm Coop I will most certainly view 2023 as a pivotal year in my career.  After spending 20 enjoyable years in a plc environment with BT, I took a leap into the unknown, joining Dale Farm Coop as Chief Financial Officer – switching not just to a different business model but also a very different sector.  Cash management has been crucial in both roles. During my time working with a plc, good cash management was about ensuring that we delivered our quarterly cash commitments to the city.  At Dale Farm, it’s about ensuring that our debt levels are controlled while paying a milk price that’s as competitive as possible. On reflection, the main challenge so far in this role has been managing the balance between profit and milk price. As a coop, our primary objective is to pay our members the most competitive milk price we can.  To achieve this objective, we need to generate a certain profit level to fund working capex/capex requirements and ensure we pay a competitive milk price over the long term. Managing this balance is critical to the role of CFO at Dale Farm.  Communicating directly with our board, leadership team and members to explain why we need to make a certain level of profit has been a key focus for me in 2023.  My second biggest priority since joining Dale Farm has been the management of interest costs and working capital levels.  Due to our investment strategy, debt levels have increased and, as interest rates have doubled over the last 12 months, this has required greater attention on working capital management. Educating the business on the parameters and importance of working capital has been a priority for me.  I would advise anyone considering a move between industries and business models to embrace the opportunity. I’ve found the change invigorating and I’m pleasantly surprised at how the core skillset of a Chartered Accountant can be applied so well in such different environments. Brian McNamara  Managing Director SwiftFile Customs When the post-Brexit trading environment kicked in almost three years ago, much of the initial focus was on keeping goods moving whereas ensuring compliance was not necessarily given the same level of attention by importers unfamiliar with customs obligations.  After a relatively relaxed initial approach from the Revenue Commissioners, 2023 has seen a significant increase in the number of companies selected for customs audits. With this, we have certainly seen a heightened awareness of the importance of managing customs risk. With Revenue audits now becoming the norm for importers and the potential fines and penalties that go with them, this is a trend I expect to see continue. October 2023 also saw the introduction of the Carbon Border Adjustment Mechanism (CBAM), the EU carbon tax on imports.  While not a core customs issue, the CBAM reporting requirements for importers of iron, steel and cement (initially) are particularly onerous.  Staffing continues to be a challenge in our industry. The economy has slowed in 2023, and there have been some high-profile job losses in the technology industry. As with other sectors, however, there are industry-specific reasons for staffing challenges in customs clearance.  Thirty years of single market membership has meant a shortage of customs professionals. Now that the UK has left the EU, it will take time to build the knowledge base on customs in Ireland. In the meantime, we address this issue by providing comprehensive in-house training.  Thankfully, everything stops moving over the Christmas period. This will allow us all to take a well-earned break and come back ready to meet challenges as they present themselves in 2024.

The launch of a consultation on a new national financial literacy strategy for Ireland is welcome and accountants will be key as gatekeepers of financial knowledge, writes John Nolan Making financial decisions and navigating the world of finance is an unavoidable part of life, from setting up your first savings account to planning for your retirement and everything in between.  However, increasing numbers of people in society struggle with such tasks and these difficulties are further exacerbated by the ongoing digitisation of financial services.  ‘Financial literacy’ is the ability to engage with the financial system and to effectively manage your finances. While the concept is hardly new, it has received notable academic and political attention in the years since the onset of the global financial crisis in 2008.  That period was an inflection point that highlighted the financial struggles of many households and small businesses and the implications for the broader economy and society. o Since then, the financial experiences of many during the recent COVID-19 pandemic and the current period of high inflation and interest rates have heightened the focus on this issue at a government policy level. Low levels of financial literacy Research by the Organisation for Economic Co-operation and Development (OECD) has shown that financial literacy levels are worryingly low across the world. In the EU, a 2023 survey found that just 18 percent of respondents have high levels of financial literacy, with Ireland only marginally better at 19 percent.  These findings are a big concern for public policymakers because financial literacy improves our financial resilience and ability to deal with financial shocks, it increases our financial wellbeing and it contributes to the stability of the financial sector overall.  European Commissioner Mairead McGuinness is leading a policy initiative focused on financial literacy and encouraging European Union (EU) member states to develop national strategies aimed at ensuring a coordinated approach to financial education.  This comes on the back of over a decade of work by the OECD International Network on Financial Education (OECD/INFE) in establishing best practice guides for the development of national strategies and the measurement of financial literacy within populations.  A national financial literacy strategy In Ireland, Minister Michael McGrath recently announced plans by the Department of Finance to develop a national financial literacy strategy.  This is a welcome move and one that a variety of stakeholders have been calling for, including the Central Bank of Ireland, Social Justice Ireland and the Competition and Consumer Protection Commission (CCPC).  The new strategy will help to ensure Ireland is compliant with the G20/OECD High-Level Principles on Financial Consumer Protection and the OECD Recommendation on Financial Literacy.  We have been behind the curve in this area, with the Retail Banking Review published in 2022 by the Department of Finance noting that Ireland is one of just four EU member states that does not have a national strategy for financial literacy.  While some important studies and reports have been undertaken in an Irish context – by the National Adult Literacy Agency (NALA) and by the CCPC, for example – there is no coordinated national approach to financial literacy.  There remains a need for an overall framework for financial education initiatives, funding for research to develop baseline measures for financial literacy across the population and to support evidenced-based interventions, and a clear set of objectives to guide stakeholders. The decision to engage with stakeholders to develop a national strategy is perhaps the easiest step to take. The devil will be very much in the detail as we progress to the substance of what such a strategy might entail and where the focus and investment should go.  Three issues illustrate this complexity – and this is by no means an exhaustive list: Where to start? First, one critical decision is which groups in society should be targeted initially to ensure the most effective use of resources and that true value is derived from financial education initiatives.  The G20/INFE High-Level Principles suggest that focusing on specific (or vulnerable) groups for financial literacy interventions makes sense for many countries.  Research by both the OECD and EU has shown that there are some cohorts within populations that tend to have consistently lower financial literacy levels.  The recent launch by Commissioner McGuinness of a joint EU/OECD-INFE financial competence framework for children and young people highlights one relevant group that might be a natural starting point for any national strategy.  A focus on young people’s financial literacy – and embedding this in education systems to facilitate a culture of financial conversation early in life – seems logical.  Research has identified numerous other groups with consistently lower levels of financial literacy, including the elderly, low-income households, migrants and those with low digital literacy, for whom financial literacy interventions would be particularly beneficial.  One additional group is of particular relevance to accountants and it is under-researched in the context of financial literacy – entrepreneurs and small business owners.  The transition from the personal to the entrepreneurial in the context of financial literacy is significant.  The additional scale, responsibilities and complexity of the financial landscape for small businesses can overwhelm their owners.  The absence of financial literacy in the indigenous business sector has the potential to be just as damaging to the economy as a lack of personal finance skills among the general population. Financial literacy as a social practice Financial literacy is a social, rather than just a technical, practice. It is a social and human-centred practice in the sense that it is heavily influenced by peers, family and social institutions.  It is a much more complex issue than a mere ‘skill gap’ to be solved through financial education interventions.  Taboos surrounding personal finances, and discussion on the topic, can have a significant impact on how people view its importance and the need to upskill in the first place.  An appreciation of the complexity of financial literacy and how it fits within the social and cultural fabric of communities will be a serious consideration for any new national strategy. Clear concepts and terminology Discussing financial literacy and developing a strategy is further complicated by how its key concepts and terms have changed over the past two decades.  For example, the UK’s national strategies have evolved from a Financial Capability Strategy for the UK in 2015, which was replaced by the UK Strategy for Financial Wellbeing in 2020.  While traditionally associated solely with knowledge, ‘financial literacy’ has evolved to encapsulate skills, behaviours and attitudes, which is closely aligned to the concept of ‘financial capability’. The terms are now often used interchangeably.  The table below presents some of the key terms currently used in this area, and how they have been defined.  The overarching goal of achieving ‘financial wellbeing’ is itself difficult to define and will mean different things to different people.  Thus, in the context of any new national strategy, it will be important to clearly articulate the objectives and what is meant by the terminology that is used. Finance is a sector whose jargon can overwhelm people, so it will be essential that any new strategy avoids this. Public interest The evolving policy focus on financial literacy should be of interest to accountants. A commitment to the public interest is one of the hallmarks of the profession.  Given the emerging evidence of the impact that poor financial literacy has on wealth inequality, financial exclusion and other adverse financial outcomes, addressing this issue is clearly in the public interest.  Accountants occupy a crucial position in society as gatekeepers of financial knowledge. We have a responsibility to utilise this position for good, both at an individual level in our interactions with clients, colleagues and the community and at a collective level in terms of support for the new national financial literacy strategy.  This is not just a policy for individuals and households; it is also for entrepreneurs and micro, small and medium-sized enterprises. Accountants, as trusted business advisors with financial expertise, have a key role to play in shaping and applying this policy. Financial literacy is about our relationship with money, which is, whether people like it or not, a core part of society. Promoting a culture of positive engagement with the financial sector and discussing finance from an early age is vital for a functioning economy and society.  Individuals and businesses rely heavily on financial services every day; at a minimum they should be confident and capable of accessing and engaging with what they need.  While financial literacy is likely something most accountants take for granted, for many in society it is a significant challenge. This is something we will be hearing a lot more about from a policy perspective in the coming months and years. Dr John Nolan, ACA, is a lecturer in corporate finance and financial reporting at the University of Galway

A successful flotation is a major milestone for any ambitious company but the path to IPO-readiness is paved with challenges and careful preparation is crucial, write Ciara O’Callaghan Crehan and Eimear McDermott The public markets are a bellwether for economic confidence at any point in time and we have witnessed a challenging period for equity performance and new issuances recently.  While the public markets offer just one source of potential funding for a business, an Initial Public Offering (IPO) is seen by many as a particularly significant milestone for promising businesses and IPO activity as an indicator of wider economic health.  There are numerous reasons why companies may want to list on a stock exchange. These include access to a new pool of capital to help take them to the next level, enhanced profile and prestige, a clearly defined business valuation and a route to exit for founders and shareholders. Raising capital through the public markets takes time and lots of preparation, however, particularly in a period of prolonged economic uncertainty.  Current IPO market conditions The current IPO drought has persisted for more than 18 months, but this doesn’t mean pre-IPO companies should be inactive. Rather, we would suggest taking advantage of the current lull to prepare now for a public offering further down the line. Already, we are starting to see the first green shoots of recovery. The third quarter of 2023 produced 36 IPOs that raised a combined total of about $8 billion. This was the same amount of proceeds raised for the full year in 2022 and was led by the largest tech offering in years, ARM, which raised approximately $4.9 billion. In particular, we are seeing a growing number of large corporates opting to consolidate their market listings on – or undertake a general move to – US markets. While this is not good news for stock exchanges in Ireland or Europe, it demonstrates the continued dominance of the US capital markets for access to funding.  The next wave of IPOs will be led by those companies that do the hard work of preparation today, readying themselves for amplified scrutiny and accountability and working to make the necessary corrections big and small. Choosing the right stock exchange Many factors play into the decision on where to list a company, including: Access to capital, which is critical – in many cases companies will decide to list on multiple exchanges to broaden their investor base; Market visibility and the reputation of the exchange, which may be known for a particular focus area; Liquidity and trading volumes; Regulatory requirements, which differ significantly across markets – the US capital markets are the most onerous from a compliance perspective but are more attractive to many stakeholders, from suppliers to employees and particularly to investors; and Expansion into new markets and peer group comparison. What it takes for a successful IPO  Any successful IPO needs a compelling equity story. In the current environment, IPO candidates need to be able to demonstrate a resilient trading performance and compelling strategy for future growth to tempt investors.  It is also important that the valuation expectation is reasonable. With a particular focus on the US market, some of the key steps in a successful IPO journey include: Ensuring you have a first-class management team and advisors; Getting your IT systems and control environment in order; Improving your financial reporting and getting audit-ready; Addressing change through a people-centric transformation programme; and Addressing environmental, social and governance-related performance and strategy upfront. It’s a team game The path to becoming a public company depends on a coordinated team effort by management and external advisors. In our experience, which spans both sides, we believe there are several critical ingredients to success: An experienced management team, ideally with some IPO experience that can build a strong equity story during the roadshow; External advisors with IPO credentials, contacts and industry experience; and A structured transformation of the people, processes (with a particular focus on technology) and culture of the company. IT capacity and controls Companies should not overlook or underestimate the ‘heavy lift’ needed for readying their IT systems ahead of a planned IPO. Some of the IT systems and tools commonly used by private companies in many cases cannot scale to meet the technology requirements of a public company.  Many companies face fundamental challenges in understanding their existing IT landscape and the interdependencies that exist between the different elements therein.  This is particularly important because you cannot expect to achieve a robust internal control framework for financial reporting without a strong partnership between the IT and finance teams.  It takes a coordinated approach – with informed, experienced leadership – to break down silos and ensure that everyone is speaking the same language. Getting the governance right at the outset is a prerequisite for successfully establishing and embedding your control framework. Companies that have not historically invested in technology and tools for financial reporting and business operations might struggle with the limitations of their existing technology if this is not addressed as a priority at the outset.  Assessing IT across people, processes and systems is critical. Taking a risk-based approach – and strategically sequencing your transformation initiatives – is equally important.  Early in the preparation phase is the time to get the fundamentals right, and to ensure that each step of your transformation is aligned to your IPO target state.  Companies should be incorporating audit and control requirements into their procurement decisions when looking at investment, alongside business, information security and other assessment criteria.  Financial reporting and audit The level of auditor scrutiny on public companies is high and ever-increasing. Therefore, getting your company’s historical accounting and controls in order is essential pre-IPO.  As already mentioned, it is critical to have the right technology in place here alongside the right people – and to give them sufficient lead time to do the work needed. In preparing for the rigours of an IPO, an auditor may have to re-audit parts of prior years’ accounts and update procedures to meet the higher standards expected of a public company. They will likely have to update controls and processes and document all key controls.  It is an arduous process and one that cannot be rushed. Early engagement with the audit team is important.  In our experience, bringing your auditor into the fold at agreed milestones can be hugely valuable in ensuring continuous alignment and avoiding any unexpected curveballs as you navigate the IPO journey. Tailored people-centric approach An IPO journey will have its challenges. It requires major transformation involving upgrading technology, improving financial reporting processes and implementing governance, risk and compliance capability. All are critical.  So too is a people strategy that sets out the vision for a collaborative and supportive post-IPO culture incorporating diversity, equity and inclusion as well as helping to guide how the business plans to achieve its environmental, social and governance (ESG) goals.  And finally, ESG As ESG continues to gain momentum, it is becoming a fundamental consideration for companies making strategic decisions in areas including funding.  Integrating ESG reporting into the equity story has become key for investors and, consequently, it is an increasingly important aspect of the IPO readiness plan for issuers.  This is especially true in Europe where regulatory requirements for listed companies will become mandatory as the European Union’s Corporate Sustainability Reporting Directive (CSRD) comes into effect. An ESG strategy is now a must-have for any company considering an IPO.  Becoming a public company and raising funding on the capital markets has always required lots of work and preparation.  Alongside a company’s equity story, financials and governance, there is now a broader focus on technology, culture and people strategy as well as ESG commitments and performance. The current market lull could provide just the ‘pause’ some companies need to prepare thoroughly for a successful flotation and future growth.  Ciara O’Callaghan Crehan and Eimear McDermott are co-founders and directors of Odyssey Consultants, a boutique risk and management consultancy for helping companies at all stage of their journey reach new horizons

Jonathan Wilson talks us through his career from his training in Belfast in the nineties through to his current role as Managing Director, Chief Internal Auditor with Barclays Europe In the 30 years since he began his training contract in 1993 with BDO Stoy Hayward in Belfast, Jonathan Wilson has carved out an accomplished career in internal audit in banks ranging from National Australia Bank and Danske to NatWest and now Barclays. Here, he tells Accountancy Ireland why he chose to specialise in audit and the decisions, opportunities and lessons that have helped him progress his career to date. Do you remember when and why you decided to train as a Chartered Accountant? When I was ten or 11, it seemed like all the kids around me wanted to be pilots or astronauts. I wanted to be an accountant. My uncle was an accountant, and I had a genuine interest in business – in particular, business performance – from a young age.  That’s why, when I finished at Methodist College in Belfast, I chose to study economics at Queen’s and, from there, to join BDO Stoy Hayward in 1993 to train as a Chartered Accountant. I got great training with really broad experience and, at an early stage, decided I wanted a career in industry rather than practice.  I started to focus on internal audit and risk management and joined Northern Bank in Belfast as a Senior Auditor in 1999.  Because National Australia Bank owned Northern Bank at that time, I got the opportunity to move to Melbourne in 2002 as a Senior Audit Manager working across areas ranging from corporate banking to retail services, finance and risk. That role also allowed me to work in New Zealand and in Asia and, when Northern Bank was taken over by Danske Bank in Ireland, I was asked to come back to help manage the transition as its Head of Internal Audit in the North and south. After five years, I was given responsibility for Danske Banks’ Internal Audit in new markets including Sweden, Norway, Finland, Russia, Poland and the Baltics. I then had a brief period as Group Chief Auditor with the Irish Bank Resolution Corporation followed by 18 months as Head of Audit with AIB. I joined NatWest as Chief Auditor in 2014 and started in my current role with Barclays in January 2023.  Are you glad you decided to qualify as a Chartered Accountant? Has the qualification helped or hindered your career? Being a Chartered Accountant can open up so many professional opportunities. You need a lot of discipline, patience and perseverance to earn the qualification in the first place and this experience has helped me enormously in my career since. Chartered Accountants can work in a really broad range of environments – from all kinds of businesses to practice or the public sector – you name it. This scope has given me a strong grounding in understanding how business works, not just from a financial point of view, but also in a broader sense. Tell us about your current role as Chief Internal Auditor with Barclays Europe. When I joined Barclays, it had been in Ireland for more than 30 years, but it was facing a new set of very exciting opportunities in the wake of the Brexit vote.  I now lead a very experienced team of audit professionals based in Dublin, Paris and Frankfurt. The organisation is incredibly diverse, not just geographically but also in terms of the people I work with every day. I am ultimately responsible for the quality of the assurance work our team provides and I am lucky to have a team of strong directors working with me. As well as our assurance work, we are expected to add real value to the business in terms of risk management and systems of internal control. What are the biggest trends and developments you have seen in your profession and the wider market since starting out? Traditionally, auditing was very manual with lots of paper records stored in Lever Arch files and big, heavy briefcases. Audit software was only just beginning to emerge at the start of my career and it’s amazing to reflect now on how much this whole area has since evolved. Today, we are dealing with metadata and approaching the operating audit with a much greater emphasis on digital tools. Auditors nowadays need to be digitally enabled and we are also beginning to look at how we can use artificial intelligence in our work in the future. When I did my MBA with Manchester Business School, my specialist topic focused on the various financial crises we have experienced going right back to the Wall Street Crash of 1929. In the years since, the time lag between financial crises has narrowed dramatically. We used to get one every 50 years, but now we are finding ourselves in a crisis every five or ten years. I have experienced a number of these crises working in internal audit, and my international experience has given me a good perspective on how best to deal with them. Is there anything in particular you have learned in your career that has stood you in good stead? When I was with National Australian Group, Mark Martinelli was the Chief Auditor. He was a big influence on me. He taught me to ask the simple question: “If it doesn’t make sense, why doesn’t it make sense?”  We can get carried away, agonising over complex and difficult tasks and challenges. Sometimes, the best approach is to return to your key audit principles and ask this one simple question – and keep hold of it until you get the answer. Audit standards have been developed and refined over the years, but the core principles are the same today as they were when I was starting my career. Our role is about providing assurance and gathering sufficient audit evidence; it’s about our control objectives. Asking the simple questions is vital. What career advice would you offer your younger self if you had the opportunity? Don’t narrow your horizons. Keep your aspirations broad and try to work across as many different companies and countries as you can.  Also, do things you like to do and enjoy what you are doing. My son once considered a career in medicine, but he’s now an accountant – somewhat to my surprise!  When he told me he had taken a job with a film company making documentaries for Netflix, Disney and Amazon, I had some concerns given the insecure nature of the industry. Then I thought, “Actually, that sounds really exciting”. In the end, I told him to go for it – he would have anyway! I suppose my advice is that you shouldn’t make choices in your career to please anyone else. Do the things you want to do for yourself and don’t be afraid of failure. Finally, what are your career plans from here on in? I love the job I have right now. I’ve only been with Barclays for a short time and I have the ‘fuel in the tank’ to expand and develop in this role. It is a big challenge, but it’s very enjoyable. Another aspect of my career as a Chartered Accountant I find really rewarding is the scope it has given me to apply my skills volunteering as a trustee with various charities and sporting organisations.  I have done a lot of volunteering outside my ‘day job’ and my background in Chartered Accountancy has been incredibly valuable here. When eventually I am no longer working full-time, I hope to be able to continue in non-executive board positions and to continue to use my skills and experience where it may be required.

The EU Commission’s new enlargement package sets out ambitious plans for expansion but the rule of law and defence must govern any future accession negotiations, writes Judy Dempsey It was reminiscent of 1 May 2004, when the countries of Central and Eastern Europe joined the European Union (EU).  For their citizens, that day almost 20 years ago was not just a euphoric occasion, it was about returning to Europe – an aspiration that must have seemed remote while they were under the communist yoke from 1945 to 1989. Now, the opportunity for Ukraine and Moldova to join the EU is very real, following Ursula von der Leyen’s decision to unveil an ambitious enlargement package last month. The President of the European Commission announced on 8 November that the EU would open accession negotiations with Ukraine, Moldova and Bosnia and Herzegovina, while also granting Georgia candidate country status.  It will take several years for these countries to join the EU. Leaving aside how the war in Ukraine might end, significant issues will need to be addressed in all four: corruption, the role of the oligarchs, human trafficking and the weak independence of the judiciary, for example.  EU leaders will have to give von der Leyen’s plan the green light during their December summit.  Some will baulk at how Bosnia and Herzegovina will be able to begin accession talks despite ongoing misrule and ethnic tensions among leaders of the Serb community. Backed by Russia and its neighbour Serbia, it has long sought to have its own autonomous region. Yet, for all these problems, this next enlargement should be a chance for the EU to tackle two big issues that undermine the union’s credibility.  The first is how several countries, led by Hungary and Poland, have blatantly flouted the rule of law. For several years, Budapest and Warsaw have run roughshod over the judiciary, the media and the appointment of chief prosecutors.  Hungary’s Prime Minister Viktor Orbán has misappropriated EU funds in addition to promoting his own appointees loyal to the governing Fidesz party, to universities and other educational institutions.  And this is just the tip of the iceberg. In Poland, the judiciary, media, education and private sectors have been subject to interference from the governing conservative/nationalist party.  The Law and Justice party lost the recent parliamentary elections, however, so there is a chance that the centrist Civic Coalition party may put the country back on the path of the rule of law.   This is important for countries trying to make their way into the union.  Imagine sitting in Kyiv and seeing judges intimidated or sacked in an EU member state because they don’t toe the governing party line?  Civil society activists in Ukraine and Moldova have been campaigning for many years to root out corruption and establish a transparent court and judicial system free of state interference, lobbies and oligarchs. The second issue facing the EU is how, as a bloc, it cannot defend itself.  With the current instability along Europe’s eastern borders and its southern neighbourhood, the EU lacks the capacity to defend its citizens and provide them with the security they need and which, until now, had been provided by the NATO alliance.  Soft power takes precedence over any kind of hard power despite what is happening in Ukraine. These two issues – the rule of law and defence – are about the credibility of the EU and making the bloc ready for the next round of enlargement.  Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe

Mike Hanrahan, FCA and Chair of Sustain.Life, tells Accountancy Ireland why carbon accounting capability is becoming a must-have for suppliers to big corporations  Wexford-born Chartered Accountant Mike Hanrahan is Chair and co-founder of Sustain.Life, the innovative tech start-up behind a software-as-a-service platform that helps companies decarbonise their operations. Sustain.Life combines environmental, sustainable and governance (ESG) and carbon accounting tools so companies of all sizes can better manage and mitigate carbon emissions while also cutting costs. Based in New Jersey in the US, Hanrahan launched Sustain.Life in 2021 with co-founders Annalee Bloomfield and Patrick Campagnano, and is now gearing up to scale the company globally. Here, he talks to Accountancy Ireland about the professional path that has taken him from Ireland to London and the US, and from a career in accounting to banking and finance, e-commerce and, now, sustainable entrepreneurship. Tell us about Sustain.Life. How did the company come about?  Before I established Sustain.Life, I co-founded the e-commerce company Jet.com in the US with two guys, Marc Lore and Nate Faust.  By that stage, I had moved to the US, but before that I worked in London having trained as a Chartered Accountant with PwC in Ireland.  I started working in The City in the mid-nineties when I was in my early twenties and moved from risk management into technology, building risk and trading systems for banks. Marc Lore was my boss while I was working at Credit Suisse. He became a great mentor and, when he moved to the US to set up his first e-commerce start-up, I agreed to move over as well to work with him. We subsequently set up Jet.com together. I was the company’s Chief Technology Officer and when we sold Jet.com to Walmart in 2013, I became Chief Executive of Walmart’s Intelligent Retail Lab. That’s where I met Annalee Bloomfield and Patrick Campagnano. Annalee was Head of Product and Customer Experience and Patrick was Head of Engineering. We had all this expertise in building scalable, accessible technologies that could meet market needs and we could see the challenges Walmart’s suppliers were facing trying to adhere to its ESG standards and requirements.  We wanted to make sustainability more accessible – to democratise it – for smaller companies in the supply chain. Climate change is humanity’s greatest threat and, together, SMEs account for a significant amount of the greenhouse gas emissions contributing to climate change. We need the tools to enable more organisations to take meaningful climate action – and we need them quickly. That’s what Sustain.Life is all about. How does Sustain.Life work? How does the platform make it easier for SMEs to be more sustainable?  Big corporations like Walmart tend to have the resources they need to invest in sustainability programmes whereas SMEs don’t.  It’s much more difficult to introduce carbon accounting and climate action programmes in a small company where you have less money and fewer people. That was our starting point for Sustain.Life and the sizable market need we are addressing with the platform. Sustain.Life gives SMEs who don’t have in-house expertise the tools they need to start measuring the environmental impact of their internal operations and supply chains.  It helps them understand how to manage and reduce their emissions by introducing operational changes in areas like energy, water and waste. The platform is also designed to help them comply with reporting frameworks, even as they are evolving in different jurisdictions, and allows them to report their sustainability progress to customers, investors and employees using verifiable data.  Tell us about your interest in sustainable business, and in using technology to help combat climate change.  I have been passionate about sustainability for a long time, really since I first moved to the US in 2010. Prior to that, I hadn’t really understood some of the psychology around climate change and the power of the fossil fuel industry on people’s thinking here in the US. It was so different to what I had experienced in Europe. I found that quite a lot of people here didn’t take climate change seriously and didn’t see it as a critical threat. That was very worrying. Climate change is barrelling at us really quickly and we need to act now.  Back then, I think there was still wider optimism that climate change was a problem we could solve relatively easily. It’s not. Energy is at the heart of our entire global economy and fossil fuels power a large percentage of our energy. The threat is enormous and it is complex. We need to find solutions to electrify the global economy and that is going to take many years.  We have to invest money now and start to move very quickly if we are going to get ourselves into a position where we can stop the rot and figure out how to reduce greenhouse gas emissions through carbon capture and other means. What is the state-of-play now in the US regarding efforts to curb climate change and where does Sustain.Life fit in?  When we were starting Sustain.Life, we saw two big potential drivers in the US for a carbon accounting platform: sustainability in the supply chain and regulation, either at state or federal level. Both predictions are starting to materialise. In October, a new law was approved in California requiring big corporations with annual revenues of over $1 billion to report greenhouse gas emissions. We have also recently started to see some of the biggest Fortune 500 companies introduce new policies requiring companies in their supply chain to be able to report on, and set goals for, their own carbon emissions. Amazon, Microsoft and Costco have all now introduced these policies. We already had experience of this at Walmart, which introduced Project Gigaton back in 2017 with the aim of reducing or avoiding one billion metric tonnes of greenhouse gasses from its global value chain by 2030. When we were out raising money for Sustain.Life, we were telling the venture capitalists that smaller companies supplying the Big Fortune 500 corporations like Walmart, Amazon and Costco would be out of business within a few years if they were unable to report on their carbon emissions.  It’s wonderful to see that sea change starting to happen in reality. You launched Sustain.Life in November 2021. Tell us about the development of the business so far. The version of the platform that went live in late 2021 was our MVP. Our revenue function kicked in early in the second quarter of 2022 and that’s really when we were ready to start selling into enterprises. For most of 2022, if you were to ask me what was keeping me up at night – it was wondering if we had timed the company right. We knew companies would need this technology, but you still have those questions: Are we too early? Is this demand going to materialise as we had anticipated? Now, I feel really good about both how our product and our market is developing. We’re able to go toe-to-toe with our competitors and that’s really important because our market is extremely competitive. There are new entrants nearly every week and we’re up against big enterprise players offering solutions in this space like Microsoft and Salesforce. We come up against these guys all the time and we seem to be able to beat them out. The market opportunity is massive and we’re ready to scale. We already have US customers in sectors like food and beverage, electric vehicles and fintech. We also work a lot in the US with accounting firms. We have some great accounting partners. What is the plan now for Sustain.Life? What is your strategy for the company over the next 12 months?  Our biggest focus right now is on internationalisation and tailoring the platform for the needs of different markets. It’s a complex process because you need to be able to support different currencies and units of measurement. Calculating carbon emissions requires a lot of different data sets – but we’re ready.  Our product is mature, as is our team, so our main focus now is on sales and building strong partner channels in different markets. Our first test market will be Australia, where we already have salespeople. Once our model is bedded down there, the plan is to copy it very quickly in other markets. In Europe, a big focus for us will be the Corporate Sustainability Reporting Directive and Ireland – in particular, Ireland’s accounting sector – is very much in our sights. *Interview by Elaine O’Regan

The introduction of the Corporate Sustainability Reporting Directive marks a pivotal moment in the evolution of corporate reporting in the EU, but it will bring challenges for all involved, writes Daniel O’Donovan In an era where businesses are increasingly being scrutinised for their impact on the environment, society and their governance practices, the European Union (EU) has taken a leading role internationally by introducing the Corporate Sustainability Reporting Directive (CSRD).  The CSRD is due to be transposed into Irish law before mid-2024. Following its transposition, mandatory reporting requirements will become effective for, among others, financial years commencing on or after: 1 January 2024 for public interest entities in scope of EU non-financial reporting rules (with more than 500 employees); 1 January 2025 for other larger companies and public interest entities (with more than 250 employees); and 1 January 2026 for listed public interest SMEs, with ‘opt out’ possible until 2028. This is a pivotal moment in the evolution of corporate reporting across the EU, bringing with it significant challenges for all involved, not least for reporting entities, their audit committees and assurance providers. What are the key challenges?  While the CSRD is a welcome framework for enhancing transparency and accountability in corporate sustainability reporting – reflecting the EU’s commitment to fostering sustainable and responsible business practices – it introduces three significant challenges for business: First, the breadth of information that relevant businesses will be required to report under the 12 European Sustainability Reporting Standards (ESRS) introduced by the CSRD; Second, the need to implement the systems required to gather and record reliable sustainability data and information; and Third, the need to provide assurance over the sustainability reports required by the CSRD. Breadth of information to be reported The ESRS, developed by the European Financial Reporting Advisory Group (EFRAG), aim to enhance the consistency, comparability and reliability of sustainability reporting among European reporting entities.  The scope of the ESRS is expansive, encompassing various elements that collectively contribute to a comprehensive understanding of an organisation’s environmental, social and governance (ESG) performance.  The key components driving the breadth of information required in this reporting are the: sustainability topics;  reporting boundary; double materiality concept; and  number of datapoints for disclosure within the ESRS. Sustainability topics The ESRS require disclosures about the following topics: climate change, pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy, own workforce, workers in the value chain, affected communities, consumers and end-users, and business conduct. As can be seen from this list, these are broad topic areas. The ESRS standards for each of these topics specify further subtopics in respect of which disclosures must be given. Furthermore, in respect of each of the topics and subtopics, disclosure is required about aspects of the topics as shown in the table below.  Reporting boundary The reporting boundary required by the ESRS is in stark contrast to what reporting entities are familiar with in the context of the financial reporting boundary used to produce annual financial statements, being within the reporting entity or group. The ESRS, however, require a reporting boundary that considers the entire value chain, from suppliers to end consumers, as shown in the figure below: This inclusive perspective ensures that the environmental and social impacts of a business are accurately captured, providing stakeholders with a complete picture of the organisation’s sustainability efforts, but it places a demanding requirement on reporting entities from a data collection standpoint. Double materiality Reporting entities in scope of the CSRD will be required to report on a double materiality basis. This means that they will have to report on impacts on and risks to them from a changing climate and other ESG matters (referred to as “financial materiality” as it is consistent with what entities report in the financial statements). In addition, they will report on the impact the entity itself might have on climate and other ESG matters (referred to as “impact materiality”). When compared with reporting in the financial statements, this concept doubles the challenge for reporting entities as all ESG topics must be considered from both perspectives. Gathering and assessing information and data about the reporting entity’s impact on the breadth of ESG topics is a new frontier for corporate reporting and one that the majority in the corporate reporting ecosystem have no experience of. Datapoints for disclosure It is clear that the scope of the information to be disclosed under the ESRS is far broader than the information to be reported in the financial statements. However, to underline this, the ESRS outline specific datapoints that reporting entities should disclose to provide transparency and facilitate comparability. As recently as October, EFRAG released a draft List of ESRS datapoints – Implementation Guidance, which includes all 1,178 disclosure requirements in the sector-agnostic ESRS published to date. The datapoints are standardised metrics that allow for consistency in reporting and enable stakeholders to assess the sustainability performance of different reporting entities. For instance, in the environmental domain, entities may report on their carbon footprint, energy consumption and waste generation. Social datapoints could include diversity and inclusion metrics, employee turnover rates, and health and safety performance. This new frontier of corporate reporting will generate tangible benefits for society at large and result in greater public interest therein but will not be without data capture challenges in the near future.  Sustainability information systems Given the significance of the breadth of sustainability information to be reported, the transposition of the CSRD into Irish law will have a profound impact on the information systems of entities within its scope. Moreover, the scale of the endeavour for those entities that will be required to report in early 2025 on the calendar year ended 31 December 2024 is enormous in terms of what must be achieved within a timeframe that is less than 18 months away.  Such entities need to determine what sustainability matters are material using the double materiality concept and are therefore required to be included in their sustainability report and start gathering, collating, aggregating and sorting the data in relation to 2024, which will be reported in early 2025.  Reporting entities will need to establish or enhance integrated data systems that allow for the collection and management of sustainability data. This could involve integrating sustainability data within existing enterprise resource planning (ERP) systems to ensure data consistency and accuracy. Additionally, tools may be needed, such as a materiality assessment tool to help systematically evaluate the importance of various sustainability information.  As stakeholder engagement is a crucial part of a materiality assessment, systems or tools that can help track and manage interactions with stakeholders, ensuring that their perspectives and concerns are considered in the reporting process, will be necessary. Developing or strengthening internal controls and policies related to sustainability reporting information systems will be essential. Reporting entities will need to create processes and controls to ensure the accuracy, completeness and reliability of sustainability data, which will be sourced from all areas of the organisation and well beyond the finance function.  Reporting entities that are successful in achieving this will be better positioned to facilitate an independent assurance provider’s examination of their sustainability report. Assurance over sustainability reports Initially, the CSRD requires an independent assurance provider to express an opinion based on a limited assurance engagement as regards the compliance of the sustainability reporting with the requirements of this Directive, including compliance with the ESRS, the process carried out by the undertaking to identify the information reported pursuant to the ESRS, and compliance with the requirement to electronically tag the sustainability report. In later years, after an initial period, reasonable assurance over the sustainability report may be required. For reporting entities, facilitating a limited assurance engagement in the year of implementation of such a significant suite of sustainability reporting standards will require additional resources and does not come without the increased possibility of qualification given the complexity of the ESRS and the potential immaturity of reporting systems. The challenge for independent assurance providers is that at present no assurance standard is in existence that governs the performance of such an engagement.  The International Audit and Assurance Standards Board (IAASB) is developing a standard and has released an exposure draft – International Standard on Sustainability Assurance 5000 – that seeks to address the performance of limited and reasonable assurance engagements over sustainability information.  The exposure daft is open for comment at present and a final standard is not expected until the second half of 2024.  While the development of the standard is welcome, the timeframe is extremely tight, and it is widely acknowledged that the exposure draft does not provide sufficient clarity in relation to the performance expectation of an independent assurance practitioner when performing a limited assurance engagement compared with a reasonable assurance engagement.  In the face of such unprecedented uncertainty, independent assurance providers may struggle to deliver high quality limited assurance engagements.  Challenges ahead The rate of recent extreme weather events in Ireland and elsewhere in Europe, and their impact on supply chains, provides a clear mandate to take better care of our environment. Most people are therefore likely to welcome the intent behind the CSRD’s introduction of sustainability reporting.  Sustainability reporting by entities will be on a basis far broader than financial statements. Additional resources will be needed to address the challenges outlined in this article, but time is running out fast; the time to act on these challenges is now.  Furthermore, the successful implementation of the CSRD regime in Ireland and across the EU requires considerable pragmatism and support from policymakers, standard-setters and regulators.  The new “gold rush” in which companies will seek to lead will be a race to capture data, integrate systems and assure sustainability reports. Undoubtedly, this marks a new frontier in corporate reporting – the ESG Rush! Daniel O’Donovan is a partner with KPMG and leads the firm’s Audit and Assurance Methodology team. He is also Chair of the Chartered Accountants Ireland Assurance and Audit Technical Committee

The publication of the National Philanthropy Policy will mark an important milestone in the evolution of this type of proactive giving in Irish society With a new National Philanthropy Policy due to be published later this month, the Department of Rural and Community Development will set out plans to create an ‘enabling environment’ for philanthropy in Ireland. For Philanthropy Ireland (PI), the representative body for the sector here, the policy’s publication marks a very important milestone in the evolution and perception of this type of proactive giving in Irish society on the cusp of the New Year. PI defines philanthropy as the act of giving money, goods, time or effort to support a charitable cause, usually over an extended period of time and in regard to a defined objective. “Irish philanthropy comes in different shapes and sizes, from small community grants to men’s sheds and new mothers’ groups to larger advocacy projects with a national remit,” explains Eilis Murray, Chief Executive of Philanthropy Ireland. “No matter what it looks like, philanthropy has touched every corner of Ireland, but it is still a relatively new concept here because our wealth is relatively new.  “Irish people are generous and support many social causes, but compared to the UK and Europe, philanthropy here is underdeveloped. Greater support from the State and public awareness can change that. “For context, there are about 8,000 grant-making organisations in the UK whereas, in Ireland, there are only around 100.” For Philanthropy Ireland, which has been working with Minister Joe O’Brien and the Department of Rural and Community Development to create the new National Policy on Philanthropy, its publication will be a welcome development. “We hope it will encourage more people with wealth to give and, equally, encourage those advising them to consider the potential of philanthropic giving or leaving a legacy,” says Murray.  For Liam Lynch, Tax Partner with KPMG and past President of Chartered Accountants Ireland, one of the biggest benefits of philanthropy is its potential to bring about positive change with real and lasting social impact. “Philanthropy provides the critical risk capital for projects and initiatives that benefit society and improve opportunities and outcomes for those who are disadvantaged in various ways,” Lynch says. “Some people are of the view that philanthropy shouldn’t exist and, instead, the State should administer all the money needed to fund good causes through the tax system. I don’t agree.  “There is a point of view and perspective philanthropy brings to the table that promotes innovation in a way the State and local government are just not set up to do. “There are services the State should be providing as standard to support social good. Philanthropy is about building on this in a strategic, outcome-driven way that can have a very positive impact on society.” For those who decide to become involved in philanthropic giving, it is often a deeply personal endeavour and one that reflects their personal convictions and values, according to PI. “Philanthropy can make a difference in so many areas, from tackling educational disadvantage and supporting employment opportunities, to health-focused initiatives – mental health, children’s or older people’s health, for example,” says Lynch. “Philanthropic giving can go towards promoting sustainability and the environment or protecting Irish culture and the arts. This is just the tip of the iceberg. The potential is enormous.  “That is why I would like to see more awareness and discussion of philanthropy, and philanthropists, in Ireland. I think we are generally very aware of the role of philanthropy internationally.  “My question is, why don’t we celebrate our own philanthropists as much and make a concerted effort to recognise the goodwill they are putting into doing good in society?” Frank Gannon – Lynch’s colleague at KPMG Ireland and a Partner in the firm’s Financial Services Group – sees similar benefits in philanthropic giving.  “For me, philanthropy means fulfilling the wish to give something meaningful to those who will benefit,” he explains. “Many people associate philanthropy with monetary donations, but there is much more to it than that.” Chartered Accountants Ireland’s members and trainees are well-placed to get involved in different types of philanthropic giving, Gannon says.  “Our members and trainees have all been educated to a certain level. Sharing our knowledge, information and know-how with those who have not had the same opportunities – and, in particular, those in socially deprived areas – can be a powerful tool,” he says.   “Social capital matters and a lot of Chartered Accountants have large networks of contacts. These networks can be leveraged to transform lives. Giving someone from a deprived area the opportunity to interview for a job could change the trajectory of their life with the positive knock-on effect extending to their family and wider community.”  For those whose philanthropic interest lies in monetary giving, meanwhile, Philanthropy Ireland offers a wealth of advice and information on what you need to know to get started. “There are many forms of monetary philanthropy, which is often considered within the overall context of wealth management and estate planning,” it advises. “Individuals, families and corporates often set up their own foundation or they link in with an intermediary philanthropic organisation that can support them in their grant-making decisions and provide governance and compliance support.” To find out more about Philanthropy Ireland, the organisations and initiatives it supports and the different philanthropic options on offer, log on to philanthropy.ie

From education and the next generation, advances in technology and the evolving role of the accountant, to business and the economy, what can we expect in the New Year? As we look ahead to the New Year and the opportunities and challenges it will bring for society and the economy, our District Society Chairs give us their take on what lies ahead for the profession in 2024. Brendan Brophy, Chair of the Young Professionals Committee The accountancy profession is poised for transformative developments in 2024 and young professionals will find themselves at the forefront of this dynamic landscape.  The coming year promises a paradigm shift in the role of accountants in business.  Beyond the traditional domains of financial reporting and compliance, there is a growing emphasis on strategic financial management. Young professionals are expected, not only to interpret financial data, but also leverage their insights to drive business decisions. Our ability to communicate financial information in a clear and compelling manner is becoming as crucial as the technical expertise itself. In Ireland, where the business ecosystem is marked by resilience and innovation, the role of accountants is expanding to encompass a broader spectrum of advisory services.  Accountants are increasingly being called upon to provide strategic insights that guide organisations through economic uncertainties and market fluctuations. The expectation is for accountants to be proactive contributors to organisational growth, acting as trusted advisors who understand the intricacies of both finance and business operations. Advancements in technology continue to reshape the profession and we can expect to see this trend accelerate in the year ahead.  Automation and artificial intelligence are streamlining routine tasks, allowing accountants to focus on higher-value activities such as analysis, interpretation and strategic planning. As a young professional, staying abreast of these technological developments and embracing them as tools for efficiency will be paramount. Morna Canty Ahern, Chair, Chartered Accountants Ireland Midwest Society An accountant will always have a seat at the table and, for some, the shift in the traditional role of accountant is the ghost of Christmas past. Currently, we find ourselves as a profession in high demand but facing a lack of supply.  The many routes to qualify as an accountant – along with the Government’s renewed focus on apprenticeships – means that our sector can now actively address the skill shortage we face and meet the demand for high-quality professionals through education.  Education is the ‘gateway to the future’ in building the Chartered brand, but it does not end with our qualification. Education is a cycle, a continuous process of learning and acquiring knowledge pre- and post-qualification. Chartered Accountants are always seeking opportunities to learn and our education must emphasise and support the reality of our role today, and not the traditional role of the ghost of Christmas past. Through technology, our role now is to provide leadership in business, rather than simply counting costs.  Despite this, fewer young people are choosing a career in accountancy and this is because the role of the modern accountant is not accurately portrayed to students at second and third level.  We welcome the commitment by the Department of Education to review the second-level accounting syllabus.  A focus on promoting the true working life of today’s accountant through educational campaigns by our members will help the next generation to visualise a future in our profession. Becoming an accountant is a commitment to lifelong learning and, as we approach 2024, we need to develop educational access programmes in partnership with third-level institutions so we can engage and encourage younger generations to become accountants.  Our members are natural mentors, often contributing at many levels to their local economy and offering support to their communities.  A renewed focus in 2024 on engagement with the Institute and our District Societies will help to deepen these relationships and strengthen the value attributed to the role of the Chartered Accountant in communities around the country.  As a profession, we are not just ‘about numbers’; our unique ability to strategically shape organisations through trusted advice and guidance contributes far beyond the balance sheet. James Fox, Chair, Chartered Accountants Ireland Cork Society It has been great to see the theme of #NextGen at the forefront of Chartered Accountants Ireland in 2023, building on previous discussions with national policymakers regarding the potential changes required to the Leaving Cert accounting syllabus. I see this process as being a key driver for promoting the profession, keeping up to date with advances in technology and encouraging younger generations to pursue a career in accountancy. The future of accountancy as a career is a hot topic and one I expect to see further discussion on in 2024.  Having spoken to many students and second-level teachers since I became Chair of our Cork Society, I can see that there is still work to be done to change perceptions of what a career in accountancy is really like. In 2024, I will continue to listen to our members, to key stakeholders in second- and third-level education and to the next generation themselves, to see how Chartered Accountants Ireland can remain not just relevant, but at the forefront of shaping the national dialogue and influencing policymakers. It is important that we clearly demonstrate how Chartered Accountants continue to play a crucial role in industry, practice and many other sectors, and in the midst of rapid developments in technology. A career as a Chartered Accountant is varied, interesting and dynamic, and the academic curriculum and internship programmes on offer to the younger generation must reflect this. I would also hope, in 2024, that further light is shone on the supports small-to-medium sized practices need as we move forward. They play a vital role at a local and national level and are at the coalface of our profession, supporting entrepreneurs and training new members. It is vital that these practices get sufficient support to grow and thrive in the future, particularly with regard to technology, and I hope that this is high on the agenda nationally in 2024. Des Gibney, Chair of Chartered Accountants Ireland Leinster Society Despite the economic impact of COVID-19 and the negative impacts of high inflation, soaring energy costs, rising interest rates and over €2 billion in warehoused Revenue debt, business insolvencies in Ireland remain at the same level as 2019, which itself marked a historic low. The sectors bearing the brunt of these economic pressures currently include construction, hospitality and retail. I predict that the commercial property sector in Ireland will also come under significant pressure over the next 12 to 18 months due to a combination of higher interest rates and the prevalence of hybrid working. Between 2012 and 2018, insolvencies averaged 1,000 per annum. Recent figures indicate that we can expect 600 corporate insolvencies this year, so we are not faring too badly, relatively speaking, despite the macro-economic situation worsening since 2018. I believe there is a combination of reasons for the low level of corporate insolvencies we are currently seeing, including uptake of formal restructuring procedures such as the Small Company Administrative Rescue Process (SCARP) and examinership. Generous Government supports made available over the COVID period have helped.   The Government has also played its part by providing struggling SMEs with the SCARP option, which can save a company where it is insolvent but has a viable business. It is a cheaper and faster process than examinership. However, since the legislation was enacted in 2021 there have been approximately 50 SCARP appointments. Thirty companies were approved, nine failed and the balance were restructured outside the process. This level of uptake is disappointing. However, SCARP is still in the early stages and we must remember that uptake of the examinership legislation brought in back in the nineties was also initially very low. Having advised companies on insolvency and restructuring matters for decades, my experience has been that owners and directors tend to put off taking formal action until they are left with no other option. In some regards, particularly in the case of family-owned businesses, I understand this reluctance. The most common source of corporate pressure comes from either a creditor or the prospect of the company imminently running out of cash and being unable to meet their wage bill. Once matters reach this stage, the options available to the company reduce significantly.  To avoid this, my advice to business advisors, directors and shareholders is to understand the statutory responsibilities of directors when the company is approaching insolvency and the implications this may have for their other business interests or employments.  The next step is to explore the options available to the company by seeking advice early from an experienced insolvency practitioner. Marion Prendergast, Chair of Chartered Accountants Ireland Northwest Society The prospects for the Northwest region in 2024 are undeniably positive, drawing on my first hand experience as a member of the Northwest Society and my role in the regional public sector. In the wake of the COVID-19 pandemic, there has been a notable influx of professionals choosing the Northwest for work across diverse industries, setting the stage for robust economic growth. As Chair of the Northwest Society, I’ve had the privilege of connecting with numerous members who have either returned from overseas or opted to move here from bustling urban areas.  The common thread in these decisions is the pursuit of better work-life balance, reduced commuting times and a focus on family support – benefits the Northwest region provides. In my role as Head of Finance at Sligo University Hospital, I’ve witnessed the successful recruitment of highly skilled expatriates choosing to return home. Unlike in the past, when we might have competed with larger city hospitals, the appeal of the Northwest is now a major draw for individuals relocating to the region and contributing to the local economy. Nevertheless, like any region, the Northwest faces challenges that demand attention. Our road and rail networks require substantial investment, with the N17 urgently needing upgrading as the main connection to Ireland West Airport. Additionally, improved road connections to Northern Ireland and faster rail links to the capital are essential for accommodating the needs of remote workers effectively. Addressing the housing shortage, particularly for families, requires increased investment. While these challenges are widely acknowledged and are high on the Government’s agenda, their resolution is crucial for the Northwest to retain its appeal to high-calibre talent. As members of Chartered Accountants Ireland, we are well-equipped to play a pivotal role in finding solutions. Our diverse membership spans various industries and functions, and our local District Societies serve as vital connectors, especially for those engaged in remote work.  The view from London The members of the London Society Committee were pleased to see an increased appetite for in-person events throughout 2023 and we expect this trend to continue, writes Michael Gilmartin, Chair of Chartered Accountants Ireland London Society. In 2024, however, we expect demand for in-person events to be driven not by pent-up demand post-COVID but by a softer labour market in which companies may start to mandate more compulsory days in-office. The UK economy is forecast to grow by a modest one percent in 2024 and there remains much uncertainty globally.  Given the financially challenging times, it is vitally important that we continue to be a force for good within the Irish community in and around London. Our biggest challenge is trying to engage with members who are based in the Greater London Area.  This isn’t unique to the London Society, but with a population in excess of 9.5 million people in Greater London, we will always face intense competition vying for our members’ attention. The interests of our members continue to evolve to reflect those of wider society and we will continue to offer novel, less traditional events in 2024.  Michael Gilmartin is Transformation Director, Dentsu International The view from Northern Ireland There’s a lot to be positive about in Northern Ireland, particularly when it comes to the creativity, innovation, drive and resilience in the business community, writes Paul Millar, Chair of Chartered Accountants Ireland Ulster Society. We have entrepreneurs who have a positive vision for Northern Ireland and who have the drive to realise this vision.  There are significant sectoral strengths in areas such as digital and ICT, life and health science, advanced manufacturing, fintech, agri-food and the creative industries – and we have great renewable energy potential. Twenty-five years on from the Good Friday/Belfast Agreement, there is also a great level of interest from US investors in supporting businesses in Northern Ireland. In recent months, we’ve seen the US Special Envoy to Northern Ireland, Joe Kennedy III, lead a trade mission of 50 US executives to Northern Ireland.  There is a clear message that Northern Ireland has something to offer – growth potential, a skilled workforce and unique dual market access to the UK and EU. We could be on the verge of something special. The US is Northern Ireland’s largest source of foreign direct investment, supplying 45 percent of projects in the last 20 years. One-third of all foreign direct investment and 51 percent of the jobs created have come from the US.  A growing interest in further investment could be a great sign. It could be a catalyst to boost everything else within our society, from health and education to housing and wellbeing. Of course, there are challenges. The cost-of-living crisis, and the cost of doing business, continue to be difficult for everyone. Just about every sector is facing a skills shortage and when we need leadership the most, we continue to face a democratic deficit at Stormont. Public services are in a difficult position. There are substantial pressures on public sector finances and significant budget overspends to deal with. We need a devolved administration back up and running at Stormont to deal with these issues. At the time of writing, there have been positive signs that perhaps the Executive and Assembly suspension could end soon. We urgently need this to be the case. Paul Millar is Chief Executive of Whiterock Finance

Accountancy Europe Board Member Shauna Greely tells us about the organisation and its work and priorities for the year ahead  Accountancy Europe is a representative body based in Brussels at the heart of the European Union and I am a Vice President and Board Member. Our focus is to give a unified voice to the accountancy profession in Europe, including Chartered Accountants across the island of Ireland, and to ensure that your perspectives, priorities and insights are heard by the policy makers, regulators and standard-setting bodies operating at a European level. For me, this is particularly important because Ireland is a proud member of the EU and I am proud to be able to represent members of Chartered Accountants Ireland in Europe. Accountancy Europe is heavily engaged with accounting standard setters, such as the European Financial Reporting Advisory Group, the International Accounting Standards Board and other key stakeholders involved in the interests of the accountancy profession. Accountancy Europe helps inform European policy debate in areas such as sustainability, SMEs, tax, reporting and audit – and promotes high-quality financial reporting, auditing and ethical standards.  One of our biggest priorities right now is combatting climate change and the crucial role sustainability reporting has to play in reducing carbon emissions and ensuring that companies are operating as sustainably as they can. I am concerned about climate change and the impacts this is starting to have on all our lives. I hope that Accountancy Europe and the profession as a whole can play its part in raising awareness about climate change impacts and sustainability, so that we can bring about positive change. It is vital that we get this right and that the right level of reporting is introduced for organisations, both large and small, across the EU.  Sustainability reporting brings to mind the saying, “What gets measured gets done”. It has such an enormously important role to play in combatting climate change and puts the accountancy profession front and centre in these efforts. This is all the more important because the younger generation of professionals coming into the workplace have a social conscience. They want to do good in their lives and in their work, and they want to be part of professions and organisations that are doing good and can attest to it. The accountancy profession is at the coalface of climate reporting and Accountancy Europe ensures that this pivotal role is represented as one voice to the European Parliament, the European Commission and the policy makers in Brussels who are shaping the future of the EU. Shauna Greely is a Senior Finance Business Partner with Ulster Bank and past President of Chartered Accountants Ireland  

IFAC Board Member Joan Curry tells us about the organisation and its work and priorities for the year ahead  The International Federation of Accountants (IFAC) is the global voice for the accountancy profession. I describe it as the members’ body for members’ bodies.  IFAC was established in 1977 at the 11th World Congress of Accountants in Germany. At that time, there was recognition that the profession needed a global voice and perspective. Now, IFAC represents 180 member and associate organisations in 135 jurisdictions, including Chartered Accountants Ireland. Its reach extends to millions of accountants worldwide.  At this high level, IFAC represents the public interest by advocating for, and amplifying, the relevance, reputation and value of our profession globally. We operate across three pillars: supporting the development, adoption and implementation of international standards; ensuring the highest-quality education for the profession; and looking to the future to identify and respond to emerging developments so that we can ensure the profession is future-ready. I joined the IFAC Board in November 2019 and am one of 23 Board Members from around the world. We govern and oversee the operations of IFAC, ensuring that its mission and vision are progressed through its organisational structures. Coming into 2024 and as the world becomes ever more connected and integrated, our priority is to ensure the continuation and enhancement of trust and confidence in the accountancy profession. This is our North Star, both at a global level and in every jurisdiction in which our members operate. To this end, we have introduced a set of reforms in recent years to help maintain the independence of standard setting. There is now a structure that allows standard setting to be developed and delivered in an independent arena, rather than under the banner of IFAC.  In creating this new structure, IFAC supports, monitors, promotes and advocates for the work of the standard-setting boards in developing independent standards across audit, assurance and ethics. These standards are directed towards the areas of greatest public interest and underpin trust and confidence in the profession. This is important in every sense but especially so given the global drive to develop sustainability reporting standards so that the profession can play its part in tackling climate change. IFAC represents the profession in supporting the delivery of the G20’s Sustainable Development Goals and ensures our voice is heard on issues with global impact, such as climate change. We will continue to be future-focused and to ensure that issues of importance to all accountants, including the younger generation, are at the heart of IFAC’s mission and vision.  We recognise the diversity of thought and inclusion required to maintain the relevance of the profession into the future and the importance of our role in envisioning how the profession will evolve and the impact we can make in the years ahead. Joan Curry is Head of Finance at the Department of Transport and a member of the Council of Chartered Accountants Ireland

Minister for Finance Michael McGrath outlines his expectations for the Irish economy and business in 2024 Over the past number of years, our economy and society have weathered multiple unprecedented challenges: Brexit, a once-in-a-century pandemic followed by the Russian invasion of Ukraine, and the associated impact on energy prices and inflation.  Yet despite all these headwinds and reinforced by Government support, our economy has proven remarkably resilient, with our labour market essentially at full employment and public finances on a positive trajectory. As we look ahead to 2024, I am encouraged by the strength our economy has demonstrated in the wake of so many external shocks.  Next year, Modified Domestic Demand (MDD) – my preferred measure of the domestic economy – is forecast to grow by 2.2 per cent. While this is lower than the growth we have experienced in recent years, it compares favourably with the outlook for many of our competitors. The increase in financing costs facing businesses because of this monetary policy tightening is unfortunately a challenge Irish business will continue to contend with in 2024.  This greater burden comes at a time in which businesses are already facing inflation at multi-decade highs.  Thankfully, there is some evidence that we have now turned a corner on inflation. Inflation is expected to continue to ease over the coming months with the rate projected to fall just below three percent next year.  It is important to note that the outlook for ‘core’ inflation – which excludes energy and unprocessed food – has proven to be more persistent as inflationary pressures have become broader.  Looking at the international picture, the balance of risk is very much tilted towards the downside.  A small, open economy like Ireland is particularly vulnerable to global economic developments. Geopolitical tensions and further changes to monetary policy are key risks facing our economy over the coming period. As Minister for Finance, one of my priorities is to ensure that businesses have the support they need amidst all these challenges.  In the lead-up to Budget 2024, I examined the tax reliefs and supports available to Irish businesses and met with, and listened to, the views of stakeholders from across the country.  Based on this, I announced a wide-ranging package of measures to support enterprise in Budget 2024.   Among these measures, I am increasing the Research and Development (R&D) Tax Credit from 25 percent to 30 percent. The first-year payment threshold is also being doubled from €25,000 to €50,000, which will provide valuable cashflow support to companies engaged in smaller R&D projects.  These amendments will ensure that Ireland remains competitive in attracting employment and investment in R&D.  I am also introducing a new targeted Capital Gains Tax relief that will allow angel investors to benefit from a reduced 16 percent rate of CGT when they dispose of a qualifying investment for gains up to twice the value of their investment.  This relief aims to encourage investment in this important sector of our economy, helping these enterprises access the necessary capital to grow and develop. In the same vein, I am also enhancing the Employment Investment Incentive Scheme by standardising the investment period to four years for all investments, and doubling the amount an investor can claim relief on for four-year investments to €500,000.  Further changes are also being made to the scheme to ensure that it is compliant with the new EU General Block Exemption Regulation.  To support Irish SMEs in engaging key employees, I have recently commenced the outstanding Finance Act 2022 amendments to the Key Employee Engagement Programme, following receipt of State aid approval from the European Commission.  This includes an extension of the scheme to the end of 2025 and doubling the amount of issued, but unexercised, qualifying shares a company can hold from €3 million to  €6 million.  In my engagement with stakeholders, a clear message has emerged: businesses find the administrative requirements of tax supports and schemes to be complex.  To examine this issue, Revenue will be establishing a subgroup of the Tax Administration Liaison Committee (TLAC).  This group will examine Revenue-administered tax schemes and reliefs for business, with a focus on identifying any opportunities to simplify and modernise the administration of business supports. It will report on its findings in the course of 2024.  My department will also undertake several reviews in 2024 to further examine how specific enterprise support reliefs and schemes can work better for Irish business.  I am very optimistic for the future of business in Ireland. The suite of enterprise tax measures announced in Budget 2024 is a sign of our commitment to ensuring that Ireland is an attractive location for start-ups and scale-ups across a range of sectors.  Michael McGrath, FCA, is Minister for Finance and a TD for Cork South Central

The objectives of the National Action Plan Against Racism will be implemented within the Institute, and among members and students, under a recently unveiled Ethnicity Network Group initiative At Chartered Accountants House on a recent evening in late October, members of the Ethnicity Network Group (ENG) announced their plans to implement the objectives of the National Action Plan Against Racism (NAPAR) within the Institute. The ENG is committed to supporting the implementation of NAPAR recommendations within the Institute both as a professional body and employer, explains Deborah Somorin, ENG founder and Co-Chair.  “The National Action Plan Against Racism will be a catalyst for creating more equitable, diverse and inclusive workplaces for people from ethnic minority backgrounds in Ireland,” says Somorin, who is Manager, People Advisory Services, EY Ireland. “Organisations will now acknowledge that racism exists in Ireland and hopefully put in place policies to create authentically anti-racist environments where everyone has fair access to opportunities to gain employment and grow in their careers.” As well as supporting the implementation of NAPAR recommendations within the Institute, Somorin and her ENG colleagues are also committed to supporting members and students who want to implement the recommendations within their own organisations. This is especially important given the recent rise in anti-immigration narratives in Ireland – and the profession is not immune, explains Somorin’s ENG Co-Chair Aisling McCaffrey, Director of Sustainability and Financial Services Advisory at Grant Thorton. “A recent Chartered Accountants Ireland survey found that 43 percent of members and 66 percent of students have personally witnessed or heard someone else being discriminated against in the workplace,” says McCaffrey.  “The survey also found 28 percent of people who identified as being an ethnicity other than white felt their ethnicity had a negative impact on their career as a Chartered Accountant. Only three percent of people who identified as being white responded the same.” The development of NAPAR This isn’t the first time Ireland has attempted to tackle the issue of racism. The country’s first National Action Plan Against Racism was introduced in 2005. When it ended in 2008, however, it was not renewed, leaving “an important vacuum contributing to a ‘normalisation’ of racism”, according to a report by the European Commission against Racism and Intolerance, published in 2019. The UN High Commissioner for Human Rights issued guidelines on creating a new National Action Plan Against Racial Discrimination in 2014. In turn, Ireland – with a mandate established under the Irish Human Rights and Equality Commission Act – created the Irish Human Rights and Equality Commission in 2014. Its purpose was to “protect and promote human rights and equality in Ireland and build a culture of respect for human rights, equality and intercultural understanding in the State”. An Anti-Racism Committee was subsequently established in 2020 by then Minister of State at the Department of Justice and Equality, David Stanton TD.  The committee was given the mandate to conduct research on racism in Ireland, research best practice in other countries and come up with recommendations to tackle racism here. “We did a number of interviews and consultation processes with different departments and ministers, agencies and bodies,” explains Dr Bashir Otukoya, Anti-Racism Committee member, law lecturer and Higher Executive Officer for the Courts Service.  Dr Otukoya took part in a panel discussion at the October launch of the ENG’s NAPAR initiative at Chartered Accountants House. “We had hundreds of written submissions from members of the public, and we put all of that together to end up with NAPAR,” he says. “Each of the board and community members have their own expertise in different fields, like human rights, anti-discrimination and equality law – and [we have] members of communities that are affected by racism. We went at it from an angle of experience and knowledge.” For ENG member Reabetswe Moutlana, Audit Manager at EY, one of the most important aspects of NAPAR is the momentum it creates for collective action. “NAPAR recognises that the journey towards an inclusive society is a collective journey and, therefore, puts the onus on everyone – the State, private actors, organisations and individuals – to work together to make Ireland a safe place for all,” says Moutlana. “The Action Plan also focuses on a victim/minority-centred approach. The key principle of the plan is that ‘affected groups should participate in the development and oversight of all government policy initiatives and targeted measures to address racism…This essentially means that this is a plan created by affected persons, for affected persons.” NAPAR and the Ethnicity Network Group Established in 2022, the mission of the Ethnicity Network Group within Chartered Accountants Ireland is to promote a sense of belonging and inclusion for people who belong to Traveller, Black, Asian and other minority ethnic groups within the profession. “As such, we see it as our role to promote awareness of NAPAR, provide suggestions for key actions across the profession and assist with its implementation where possible,” says Deborah Somorin. Both Somorin and Dr Otukoya recognise that the strengths of the plan are its five key objectives, comprising very specific action points and target dates. The plan also acknowledges the intersectionality between racism and other forms of oppression, and that the required actions and remedies cannot follow a one-size-fits-all approach.  “We were very careful with how we set the objectives in NAPAR,” explains Dr Otukoya. “We wanted it to be relatable to everyday citizens. So, objectives like being seen, being equal, being heard, and being counted were [designed to be] persuasive and in plain language, usable and implementable by anyone.” NAPAR awareness Even though NAPAR was launched on 21 March 2023, few members present at the ENG event at Chartered Accountants House in October were aware of it, according to McCaffrey.  “This could indicate a lack of awareness around the plan, which means that it is more difficult to keep those in charge of it accountable for the actions proposed, especially as this is more of a short to longer-term plan,” she says. “We want as many people as possible to know about NAPAR and become allies towards creating a safe and equal environment while also promoting it. It’s important that the responsibility for raising awareness and promoting NAPAR does not solely rest on affected persons. This is a collective journey.” NAPAR and the Institute The Ethnicity Network Group has devised a four-step plan to integrate NAPAR into the operations of the Institute, explains Somorin: We will support Chartered Accountants Ireland in its role as an employer, in creating an anti-racist working environment by implementing relevant NAPAR actions; We plan to work with decision-makers to implement NAPAR actions related to Chartered Accountants Ireland’s role as a professional educational body; We will develop members’ and students’ awareness and understanding of NAPAR and how they can implement it within their organisations; and We plan to roll out the industry’s first Ethnicity Pay Gap report. NAPAR can positively influence the world of work, not just for employees, but also employers, Somorin believes. “As noted in NAPAR, inclusive communities are vital to ensure that minority ethnic groups feel a sense of safety, connection and belonging,” she says.  “For employees, we believe that being part of an inclusive workplace, where the impacts of racism are acknowledged and addressed, creates an enabling environment for individuals to reach their highest potential.  “For employers, I believe that embedding key considerations linked to NAPAR will lead to improved retention of staff and, in turn, increase access to a more diverse talent pool.  “This increase in diversity enables companies to relate better to all customers and clients, promotes balanced internal discussion and challenges thinking, which often results in driving innovation – all of which is good for business.” *Written by Liz Riley Northern Ireland Racial Equality Strategy 2015–2025 In Northern Ireland, The Racial Equality Strategy 2015–2025 was launched in December 2015. Alfie Wong, MBE, is Head of Racial Equality Delivery at The Executive Office, Northern Ireland Civil Service (NICS) Race and Ethnicity Champion, founder of NICS Race and Ethnicity Network and Chartered Accountant. Here, he outlines the key outcomes of the strategy: - Outcome 1: Equality of service provision People from a minority ethnic background can access and benefit from all public services equally. - Outcome 2: Elimination of prejudice, racism and hate crime Effective protection and redress are provided against all manifestations of racism and racist crime, and a victim-centred approach is promoted. - Outcome 3: Increased participation, representation and belonging People from minority ethnic backgrounds participate, and are represented fully, in all aspects of life – public, political, economic, social and cultural – and enjoy a shared sense of belonging. - Outcome 4: Cultural diversity is celebrated The rights of people from minority ethnic backgrounds to maintain their culture and traditions in line with human rights norms – and to pass them on to subsequent generations – are recognised and supported.

The International Accounting Standards Board (IASB) has launched a consultation on improved accounting requirements for financial instruments with characteristics of debt and equity. In the exposure draft, the IASB proposes; to clarify the underlying classification principles of IAS 32 to help companies distinguish between debt and equity; to require companies to disclose information to further explain the complexities of instruments that have both debt and equity features; and to issue new presentation requirements for amounts—including profit and total comprehensive income—attributable to ordinary shareholders separate to the amounts attributable to other holders of equity instruments. The consultation remains open until 29 March 2024.