Whistleblowers in Ireland will benefit from a raft of new protections laid out in an EU directive that is among the farthest reaching and most significant ever to be adopted by the bloc, writes Minister Michael McGrath. The benefits of protecting people of conscience who speak up about wrongdoing are clear — for both society and democracy. Whistleblowers play a crucial role in preventing corruption in both the public and private sectors, and workers are usually the first to recognise wrongdoing in the workplace.  An Association of Certified Fraud Examiners 2020 Report to the Nations found that 43 percent of fraud was detected through tip-offs. This compared to 15 percent through internal audit and just two percent through law enforcement.  More than half of these tip-offs came from people in a work-based relationship with the organisation they suspected of fraudulent activity.  Members of the accountancy profession can often be the first people to detect wrongdoing through their roles in industry, regulation, or audit. That is why all members of the profession must be aware of the EU Whistleblowing Directive, one of the farthest-reaching and most significant pieces of legislation ever to be adopted by the bloc.  The Protected Disclosures (Amendment) Bill will transpose the EU Whistleblowing Directive into law, setting out new legal obligations relevant to the profession in addition to the reporting requirements already applying under their professional codes. It will encourage, support, and protect workers in Ireland who speak up about wrongdoing in the workplace, bringing about significant changes to the legal obligations applying in both the public and private sectors. Protected Disclosures Act 2014 Many of the EU Whistleblowing Directive provisions are already in place in Ireland, thanks to the Protected Disclosures Act. The 2014 Act was an innovative piece of legislation for its time and remains highly regarded as one of the strongest whistleblower protection laws in the world.  A global study of whistleblower protection laws published last year by the International Bar Association and the Government Accountability Project ranked Ireland joint second in the world for the strength of its legislation.  The 2014 Act prohibits any form of retaliation against a worker who makes a protected disclosure. It establishes channels through which a disclosure can be made – to an employer, an independent regulator known as a prescribed person, a Minister (in the case of public sector workers), and, subject to more stringent criteria, through public disclosure.  The Act provides for redress for workers who are penalised for making a protected disclosure with the option to pursue it, either through the Workplace Relations Commission or the Courts. It also protects workers from civil and criminal liability for any disclosure of information necessary to report a wrongdoing. In most instances, a worker will make a report to their employer, the employer will address the wrongdoing, and the case will be closed. In Ireland, four out of every five workers who report wrongdoing do not suffer retaliation as a consequence of doing so.  Devastating consequences As the testimony given to the Joint Committee on Finance, Public Expenditure and Reform during pre-legislative scrutiny of the draft Bill last year made so clear, where retaliation does occur, and the protections of the legislation are broken, the consequences for whistleblowers and their families can be devastating. I am currently bringing The Protected Disclosures (Amendment) Bill that will transpose the EU Whistleblowing Directive before the Houses of the Oireachtas. This Bill will include provisions to address issues with our existing legislation as were committed to in the Programme for Government and will build upon and strengthen our existing legislative foundation by: widening the scope of persons entitled to protection for speaking up, to include volunteers, shareholders, board members and job applicants; requiring private-sector employers with more than 50 employees to establish formal channels and procedures for their workers to report concerns about wrongdoing. This will come into effect for companies with 250 or more employees initially and for companies with 50 or more from December 2023. Companies in certain sectors and public bodies are already required to have formal reporting channels in place; requiring the recipients of disclosures to follow a specific process and timelines to acknowledge, follow up on, and provide feedback to reporting persons;  requiring prescribed persons to be more proactive in promoting their role as external recipients of protected disclosures, making their reporting channels more transparent and accessible to workers who wish to report concerns about wrongdoing in the sectors they regulate; and establishing an Office of the Protected Disclosures Commissioner within the Office of the Ombudsman to take on the role of directing reports to the most appropriate persons to address the wrongdoing raised and take responsibility for a report if there is no appropriate person to deal with it. The Bill will clarify the interaction between protected disclosures and interpersonal grievances. For individual cases of bullying, for example, there are very clear employer obligations under employment law.  However, if a culture of bullying or intimidation exists within an organisation, this could represent the basis for a protected disclosure. Far from making the current system weaker, this Bill will make this distinction much clearer for an impacted worker.  Crucially, it will enhance the protections that will apply if a reporting person suffers retaliation for having made a protected disclosure. In civil proceedings concerning allegations of penalisation, we are reversing the burden of proof so it will fall to the employer, not the worker, to prove that the alleged act of penalisation did not occur because the worker made a protected disclosure. The provision of interim relief will be expanded to cover dismissal and other acts of penalisation. This is a significant development as it will allow workers who suffer serious detriment to obtain urgent relief where this is necessary. Criminal penalties will apply to persons who penalise or hinder reporting by whistleblowers or take vexatious proceedings against a reporting person, as well as for breaches of the duty to keep the identity of the reporting person confidential. Timeline for enactment Unfortunately, it was not possible to enact the new legislation before the transposition deadline of 17 December 2021. However, the necessary time must be taken to ensure that this critical legislation is right in providing protections for workers who report wrongdoing. I am confident the legislation will be in place in the near future. Strong legislation is an important component in any ecosystem designed to support and protect whistleblowers. It is also crucial to have the right organisational culture, however — one that encourages workers to speak up without fear of reprisal.  This will do more than any new legislation, policies or procedures to support and protect whistleblowers.  Driving cultural change in organisations is challenging, but it is something I, as Minister for Public Expenditure and Reform, am committed to doing in public sector organisations.  The wide reform programme my department is rolling out will support open, transparent and accountable organisations. Preparing for the new bill I would like to encourage all employers impacted by the Protected Disclosures (Amendment) Bill not to wait for the enactment of this new legislation before they respond.  There are some straightforward steps you can take now to prepare. My advice is to review and update your existing reporting channels and procedures, asking the following questions: Is there a designated, impartial person (or persons) responsible for their operation?  What new training do they need? Are the channels sufficiently secure? Are there published procedures for whistleblowing? Are these procedures easily accessible and understood by all workers? Do they provide for acknowledgement, follow-up and feedback within the timelines of the new Bill? How best can I communicate the new changes to all staff? My department is available to respond to questions and will be issuing further guidance material in the coming weeks. More information and the text of the Bill can be found online at: https://www.gov.ie/en/publication/e20b61-protected-disclosures-act-guidance-for-public-bodies/#eu-whistleblowing-directive Michael McGrath is Minister for Public Expenditure & Reform, a TD for Cork South Central, and a Fellow of Chartered Accountants Ireland.

The unsettling effect of the pandemic on the job market is being felt as much in the US as in Ireland, as employers grapple to attract candidates with the skills they need to stay competitive, writes Dr Brian Keegan. People are harder to manage. It’s a stark realisation, expressed by a very senior Irish Chartered Accountant at a Fortune 500 company.   The pandemic may have been the great leveller across the world, but the process of recovery will not be as homogenised.   Just as in Ireland, the US has been scarred socially and commercially by the misery of COVID-19.  Within some sectors of American industry, huge resources are being devoted to little else besides hiring.   The unsettling effect of the pandemic on workers is prompting, not just career change, but location change. From the employer perspective, the traditional skill sets, which might once have automatically qualified people for well-paid employment, are changing.   Anecdotally at least, from the many members I spoke to during the Institute’s St Patrick’s day delegation to the US, led by our President Paul Henry, the most sought-after skill is project management — with specialisation in finance or data analysis an added bonus.   Educational establishments are already picking up on this shift. One Ivy League university is developing micro-certification, which is an accreditation for completing very short courses in high-demand skill sets like data mining. This isn’t merely reflecting the state of the job market, but changes in corporate strategies. Progressive industries have had a digital strategy as a priority for several years. This is now morphing into a “mobile first” strategy.  The pandemic has fostered recognition that consumer and brand loyalty is not merely built by online capability but by ease of access. This means getting your customer order capture and service delivery platforms onto mobile phones.   There is less sense of urgency over resolving supply chain issues. The prevailing sentiment is that, if the pandemic proved anything from a commercial standpoint, it is that supply chain issues can be worked out no matter how severely they appear to have been disrupted in the first instance.   Efficiencies in purchasing and supply need the clever use of data, and data usage brings risks and challenges all its own. There seems to be a view that systems don’t have to be 100 percent secure, just more secure than those of competitors.   As one US-based member in a national leadership role in IT suggested, every system is breakable. The trick is to ensure that yours isn’t the easiest one to break. Despite the staffing challenges, the common thread running through all these observations is relentless expansion. The ‘animal spirits’ which the great economist JM Keynes credited as the prime mover of economic activity are being boosted by an overwhelming sense of relief that the pandemic may now, in fact, be over.   This sense of relief is dangerous. Tragically, we have jumped out of the frying pan of the pandemic into the fire of war in Europe.   Not to diminish the horrible loss of life, the evil and unjustifiable attack by Russia on Ukraine may well cause even greater economic disruption across Europe than the pandemic.  Grain will be scarcer because Ukraine was the breadbasket of central Europe. The worldwide shortage of microprocessors will be exacerbated because key elements in their manufacture, notably Neon, were major exports from a stable and increasingly prosperous pre-war Ukraine.   The West has correctly chosen to punish Russia for its actions with sanctions, but effective sanctions cut both ways. The commercial priorities we had planned as we recover from the pandemic will have to change to reflect the invasion of Ukraine. The only saving grace is that people, though they may well indeed be harder to manage, are adaptable. Dr Brian Keegan is Director of Advocacy and Voice at Chartered Accountants Ireland.

Mairead McGuinness, EU Commissioner for Financial Services, Financial Stability and Capital Markets Union, talks to Elaine O’Regan about her role in implementing sanctions to stop the “Kremlin war machine”, her ongoing contribution to the future of sustainable finance  and her role in laying the foundations for the Capital Markets Union. You’re 18 months into your role as EU Commissioner. What do you see as your most important achievements so far, and what are your priorities now? I am responsible for sanctions and their implementation by the Commission and this is top of my agenda right now, given the terrible war in Ukraine and the need to respond to Russian aggression. We want to cut off funding to the Kremlin war machine.  We’ve listed hundreds of individuals, including Vladimir Putin, his Foreign Minister Sergey Lavrov and dozens of oligarchs, which means their assets are frozen. They can’t be provided with funds, and they are also subject to travel bans.  We’ve cut Russian access to EU capital markets, including a full asset freeze on three Russian banks with strong links to the Russian state, excluding seven key Russian banks from Swift, and blocking Russia’s EU-held foreign exchange reserves.  We also have measures on energy, transport, dual-use technologies, trade, visas for diplomats and disinformation. And, we have sharpened sanctions against Belarus, so it cannot be used by Russia to evade our sanctions.  At the same time, we’ve been working closely with our partners, including the US, Britain, Canada, Australia, Japan and others, to impose comprehensive and complementary measures that ensure Russia’s illegal actions bear a high cost. The focus now is on making sure that the sanctions are properly implemented so they are as effective as possible – and we stand ready to put more sanctions in place as the situation evolves. Beyond this, over the past 18 months my work on sustainable finance and the contribution of finance to tackling climate change has been important, as well as work on building up the Capital Markets Union to give companies across the EU better access to finance.  I’m also passionate about using my role to highlight the importance of financial literacy. People should understand how the financial system works, how they can make the best use of their money, and be confident enough to ask the right questions about their personal finances. The Ukraine invasion has placed energy supply at the forefront of the EU agenda. How do you expect the situation in Ukraine, and its impact on the flow of energy supply globally, to influence the policy initiatives laid out in the EU Green Deal?  Russia’s aggression against Ukraine makes a rapid transition to clean energy more urgent than ever. We’re too dependent on Russian gas. We must have a reliable, secure, and affordable supply of energy for Europe.  We already have the Green Deal indicating where we need to go, but Russia’s aggression has brought into very sharp focus our vulnerabilities and why we need to accelerate the transition to a more sustainable economy.  The Commission adopted a plan in March – REPowerEU – with new ways to ramp up green energy production, diversify supplies, and reduce demand for Russian gas.  The financial system has a key role to play in the Green Deal. The goal is both “to green finance” and “to finance green” to help the financial sector become sustainable and to make sure that the financial sector provides the money for business to become sustainable.  We’ve put clear and consistent rules in place, namely the EU Taxonomy, a disclosure regime for non-financial and financial companies; and investment tools, including benchmarks and standards like the European Green Bond Standard.  We are now increasingly moving to the implementation phase to make sure these rules are effective.  How far along is the Taxonomy at this point, and what are the next steps in the pipeline for the year ahead? What do companies operating in the EU need to know? The Taxonomy helps signpost the way for private investment to contribute to our climate goals: it provides clear definitions for sustainable economic activities. Companies can use it to plan their transition and to show the market what they are doing.  Last year, we adopted the first rules on activities that make a substantial contribution to adapting to and mitigating climate change.  They cover 170 economic activities, representing about 40 per cent of listed companies in the EU, in sectors responsible for around 80 per cent of direct greenhouse gas emissions in Europe.  The rules are applicable from January 2022. We have also specified how market players should disclose the extent that their activities are taxonomy-aligned. We’ve put forward proposals for how gas and nuclear can make a contribution to the transition to sustainability. We have not designated gas and nuclear as “green”, but we have recognised the specific role certain nuclear and gas activities can play in the transition to full sustainability, subject to very strict conditions and phase-out periods. This proposal is now under scrutiny by the European Parliament and the Member States. We have work to do on including more sectors in the Taxonomy and we will be preparing details on the four remaining environmental objectives – water quality, circular economy, biodiversity, and pollution prevention. The International Sustainability Standards Board (ISSB) is expected to put its first set of standards to public consultation later this month. How do you foresee the EU Commission working with the ISSB to progress the wider ESG reporting agenda?  The EU has been the global leader on sustainable finance. We are ahead when it comes to the contribution of the financial system to tackling climate change. So, we’ve gone further than others, and we’ve done that faster – which is important given the urgency of the climate challenge. But, of course, the climate challenge is global, and markets are global too. So, we are fully engaged in efforts on global standards. EU sustainability reporting standards have shown the way, to a great extent, and informed the international context.  We see global standards as a common baseline that allow us to go further to meet the ambition set out in the EU Green Deal.  At a practical level, the body that drafts EU accountancy and sustainability standards – the European Financial Reporting Advisory Group (EFRAG) – has established close cooperation with the ISSB. The CSRD proposal – and the reporting standards that will be part of it – will ensure that corporates disclose sustainability information that underpin the rest of the sustainable finance agenda.  EU standards must be coherent with the EU’s political ambitions and with our existing framework for sustainable finance, including the Taxonomy and the Sustainable Finance Disclosure Regulation.  From the beginning, EU standards will cover all ESG topics under a double materiality perspective – companies will have to report about how sustainability issues affect them and about their own impact on society and the environment.  In contrast, the standards set by the ISSB only look at risks to companies, but not at the impact of companies, and in the first instance they are focusing on climate.  EU standards will build on and contribute to global standardisation initiatives. We should build on what exists, and seek as much compatibility as possible, while also meeting Europe’s specific needs. At the recent IIF Sustainable Finance Summit, UBS Chairman Axel Weber said “banks can be a facilitator of channelling money into the right uses for a carbon transformation of the economy, but it’s not a banking issue.” What’s your take on this stance? All financial institutions, including banks, but others too, need to play their part in the transition to climate neutrality and improve their environmental performance as part of their financing, lending, and underwriting activities.  Financial institutions should integrate EU sustainability goals into their long-term financing strategies and investment decision-making processes.  We will help them accelerate their contribution to the transition, by reinforcing science-based target setting, disclosure and effectiveness of decarbonisation action, but also monitoring the financial sector’s commitments. The Corporate Sustainability Reporting Directive (CSRD) is being viewed as a crucial step in bringing sustainable reporting on par with financial reporting. It will require assurance on non-financial statements, however. Who do you foresee this responsibility falling to? The CSRD proposal requires statutory auditors to give an opinion on sustainability reporting – the idea is to ensure that the sustainability information disclosed is credible.  This will require statutory auditors to have the necessary skills in the assurance of sustainability reporting, helping to ensure that financial and sustainability information is connected and consistent.  We are mindful of the potential risk that the audit market could become even more concentrated, however. That’s why the proposal allows Member States to accredit independent assurance service providers to verify sustainability reporting. The proposal for the EU Green Bond Standard was published by the European Commission in July 2021 as part of the Strategy for Financing the Transition to a Sustainable Economy. Tell us about this proposed regulation.  Green bonds offer a great opportunity for financial markets to directly support the transition to a climate-neutral economy. They bring issuers reputational benefits and sometimes also a lower cost of funding.  They give investors transparency about how companies allocate their money. So green bonds make business sense as well as climate sense — and the market is booming. Last year, after many years of on average 40 percent growth, issuance increased by another 65 percent compared to the previous year.  However, there are some challenges. As new issuers enter the market, there is less consensus on what is green. This means more effort for issuers to prove their green credentials, and more work for investors to check them.  Companies acting as external reviewers of green bonds help investors navigate this complex landscape, but the wide range of methodologies they use can also be a source of confusion.  That’s why in July 2021, the Commission adopted a legislative proposal for a European green bond standard, as part of its work to guide investors towards greener investments. The overall aim is to create a new gold standard available to all green bond issuers on a voluntary basis.  While building on market best practice on reporting and external review, this standard would add two important new elements. First, full alignment with the EU Taxonomy, to ensure that funds raised by these bonds are spent on economic activities that are sustainable. Second, supervision by ESMA of external reviewers that provide opinions on the alignment with the standard.  There is already a lot of interest from both issuers and investors. But, in the end, success depends on whether we keep the environmental ambition high, and the unnecessary burden on issuers low. Negotiations are ongoing in the European Parliament and the Council, and we are hoping that an agreement can be reached as soon as possible.   You recently indicated that a bill to introduce a digital euro may be tabled in the EU in early 2023, providing a legislative framework for the ongoing work of the European Central Bank on a digital version of the euro. What are the potential benefits of introducing this digital euro? A digital euro would be to complement cash – which remains vital – and other means of payment provided by the private sector.  A digital euro would provide a digitalised form of money backed by a central bank, which would be designed to allow everyone to use it, from the tech savvy to those excluded by the financial system. How exactly it should be designed to meet those goals is currently being examined.  Other countries are working on or are already issuing central bank digital currencies, and the use of stablecoins is increasing. A digital euro would strengthen the EU’s ability to determine its own course and maintain the autonomy of EU monetary policy.  The digital euro raises challenges, but also opportunities. This is why we are working hand in hand with the ECB and listening to all stakeholders on this key project.  The ECB would be responsible for issuing any digital euro, while the Commission would need to put forward the legislative framework to allow the ECB to do so.  Currently, we are looking at early 2023 to introduce the proposal to give time for the Parliament and EU Member States to work before the ECB would decide how and whether to issue a digital euro. The EU is responding to the need for improved online security for cryptocurrencies with the Markets in Crypto-Assets Regulation and Digital Operational Resilience Act. What do you see as the biggest risks in this area? Unfortunately, the level of operational resilience in the crypto-asset space is not good enough. There are also a lot of hacks and thefts.  The Markets in Crypto-Assets Regulation (MiCA) will bring crypto into the regulated space and will mean that crypto service providers are covered by financial services legislation.  MiCA will put in place consumer protection measures and limit the risk of fraudulent behaviour in the market.  The Digital Operational Resilience Act (DORA) is for the whole of the financial services sector, to ensure ICT risks are better managed by financial companies. When MiCA enters into force, crypto service providers will have to adhere to the highest levels of operational resilience, as they will also be covered by DORA. DORA and MiCA are currently part of negotiations between the EU institutions. 

Russia’s invasion of Ukraine has dampened the global economic outlook, prompting predictions of spiralling price hikes not seen since the 1980s and looming recession. But, is it too soon to predict with any accuracy what really lies ahead? Professor Anthony Foley investigates. After two years of economic uncertainty because of the pandemic, Russia’s invasion of Ukraine, and its associated sanctions, have unsettled our markets once again, lowering projected GDP growth rates and increasing global inflation rates in 2022 and, to a lesser extent, in 2023.  However, the exact scale of the impact is as yet uncertain. It will depend on several factors, including the duration of the conflict, developments in economic sanctions — both in terms of impositions on Russia and its own retaliative measures — and the nature of any possible peace deal.  Together, Russia and Ukraine comprise a relatively small part of the global economy, making up about two percent of GDP internationally. They are important players in the markets for certain products, accounting for about 30 percent of global exports of wheat, 20 percent of corn, roughly 20 percent of fertilisers, 20 percent of natural gas and 11 percent of oil.  Both countries also have substantial uranium reserves and are significant suppliers of the inert gases used to make semiconductors and the titanium sponge used in aircraft manufacturing.  On top of that, Russia is a major supplier of the palladium used in the catalytic converters for cars and the nickel used in batteries and steel, while Ukraine is among the world’s foremost producers of sunflower oil and sugar beet. Mechanisms of the economic impact of war There are several mechanisms through which war has an economic impact. Trade flows are suppressed, hitting integrated global supply chains. The rising cost of commodities like gas, fertiliser and oil upends business cost models and lowers real consumer income.  Even had there been no response from the rest of the world to the Russian invasion, Ukraine would still be unable to maintain existing supplies of products, such as wheat and minerals, to the global market. This alone would result in supply chain disruption and price hikes for certain products.  Uncertainty, in general, suppresses economic growth, muting confidence and lowering consumer spending and enterprise investment — and this is especially true of the current situation in Ukraine. The intervention of the West thus far, through economic sanctions imposed on Russia and Belarus, has increased the economic impact of the war by limiting trade engagement with Russia.  Russia may retaliate against these sanctions by restricting gas supplies or defaulting on sovereign debt, which would further deepen the economic impact.  Energy prices were rising even before the Ukraine invasion, but the war has now accelerated the rate of inflation. Even if a country has no direct trade link with Russia, it will be affected by ongoing global price hikes.  Countries with trade links to Russia will have lower growth rates, curtailing their capacity to trade with other countries – even those with no direct trade links to Russia — triggering further global economic impact. Hundreds of western companies have opted to cut business ties with Russia, even if not required by official sanctions, including big brand names like Coca-Cola, McDonald’s and Nike. In addition, there are implications for the public finances of those countries taking refugees from and sending aid to Ukraine. If a peace settlement is reached, there will then be the cost of rebuilding Ukraine.  Irish trade with Ukraine & Russia Ireland exported goods worth €627 million to Russia in 2021 (just 0.4% of its total exports) and imported goods worth €598.1 million from Russia. In the same period, goods exported to Ukraine totalled €91.7 million, while imports came to €70.2 million.   The imports of goods are dominated by petroleum and petroleum products (€231 million), coal and coke (€140 million) and fertilisers (€134 million). These three imports are 84 percent of total Irish imports from Russia.  The value of services traded with Russia is much higher, however. Ireland’s service exports to Russia were valued at €3,242 million in 2020 (i.e. 1.3% of total service exports). The value of services imported to Ireland from Russia in the same year was €360 million. The main services exported to Russia were computer services (€1,840 million), operational leasing (€926 million), financial services (€81 million) and insurance (€27 million). The main service imports from Russia were business services. Service exports to Ukraine were €647 million in 2020, and imports were €49 million. Impact on economic growth and inflation There is significant uncertainty about the magnitude and duration of the economic impact of the war. However, the OECD, the National Institute of Economic and Social Research in the UK and the European Central Bank (ECB) have all recently attempted to quantify the economic impact.  The OECD estimates that in 2022, the war will reduce global growth by about one percent, from 4.5 percent to 3.5 percent. Global 2022 inflation will increase by 2.5 percent from 4.2 percent to 6.7 percent.   The Euro area economic growth will drop by about 1.4 percent from 4.3 percent to about 2.9 percent. Euro area inflation will increase from 2.7 percent to about five percent in 2022. The estimated impact on the US is almost one percent off the growth rate and 1.5 percent on the inflation rate. The assessment by the National Institute of Economic and Social Research in the UK is a little more optimistic but broadly similar to that of the OECD. Global growth this year may fall by 0.5 percent, while inflation could rise by about three percent.  Next year’s impact will not be as drastic, but it is something to watch out for. In 2023, we will see about one percent less in growth and an added two percent on the inflation rate. Euro area growth this year will fall by 0.9 percent, and inflation will rise from 3.1 percent to 5.5 percent. Euro area growth would be about 1.5 percent lower in 2023, and inflation would be about 0.8 percent higher.  Three economic scenarios The ECB recently undertook a detailed analysis of the economic impact and presented three scenarios (Table 1). In December 2021, the ECB forecast a GDP growth rate of 4.2 percent and 3.2 percent for the Euro area in 2022. These figures were revised in March, following the Russian invasion, to GDP growth of 3.7 percent and inflation of 5.1 percent.  This “baseline projection” assumes that current disruptions to energy supplies and suppressed confidence are temporary and that global supply chains are not significantly affected.  The ECB also produced forecasts based on two more negative but possible scenarios.  The adverse scenario assumes a worsening in all three impact mechanisms of trade, prices and economic confidence. The severe scenario assumes a more significant and prolonged increase in commodity prices, leading to second-round inflation and financial system impacts.  The differences between the severe scenario and the pre-war forecasts here are substantial. The growth rate drops by almost half from 4.2 percent to 2.3 percent, and the inflation rate more than doubles from 3.2 percent to 7.1 percent.  Of course, we do not yet know what the eventual impact of the Russian invasion of Ukraine will be. We can be sure there will be lower growth, and inflation will rise. On the most extreme assumptions, growth could almost halve, and inflation could more than double compared with the forecasts for the Euro area before the invasion. The ECB has also considered the potential longer-term impact of the Ukraine invasion on growth and inflation in the Euro area into 2023 (Table 2).  The news here is relatively positive, in that growth is closer to the ECB’s pre-war forecast of 2.3 percent on the severe assumptions, compared to 2.9 percent in December 2021. The same is true for inflation — 2.7 percent on the severe assumption compared to 1.8 percent in December 2021. Possible economic impact on Ireland Before the Russian invasion of Ukraine, the economy was expected to perform well in 2022. The Stability Programme Update, published by the Department of Finance in April 2021, forecast GDP growth of five percent this year, followed by 3.5 percent in 2023.  Modified domestic demand was expected to grow by 7.4 percent this year and 3.8 percent next. Inflation was expected to be 1.9 percent in 2022 and 1.5 percent in 2023. Up until the invasion of Ukraine, this forecast was expected to be exceeded.  The forecasts underestimated the rise in inflation, however – the October 2021 budget forecast Irish inflation rates of 2.2 percent in 2022 and 1.9 percent in 2023.  Using the relativities of the severe ECB scenario, Ireland might face a growth rate of about 3.5 percent instead of around six percent in 2022 and inflation of eight percent instead of four percent.  The good news is that growth is still likely in Ireland and the Euro area because of the relatively high growth rates before the effects of the war.  Of course, particular sectors face a more daunting situation. Ireland’s aircraft leasing sector has high exposure to Russia, and it is uncertain how this will play out in terms of aircraft recovery.  International tourism was expected to rebound after COVID-19 in 2022, but the war may have a dampening effect, particularly in the case of US tourists. Many enterprises in Ireland have had to pause or end their business activities in, and trade contacts with, Russia. Ireland must now cope with the financial requirements of taking in possibly 100,000 Ukrainian war refugees. However hard this may be, consider the position of Poland with millions of refugees to support. The major immediate economic problem is the very high inflation rate to which the war has contributed but is not entirely responsible. How will consumers and producers cope with the price increases? To what extent can the Government shield households from the effects of rising energy prices?  It is already clear that the economic impact of the war is substantial, and the scale and duration of the impact are still unclear, but, as of now, we should be able to avoid recession. Over the longer term, the economic impact will depend on whether there is a return to the pre-war normal (which is unlikely) and what the new normal will be in terms of trading blocs, continuing sanctions, higher defence spending, cyberwar, political tensions and bank payment systems. Anthony Foley is Emeritus Associate Professor of Economics at Dublin City University Business School.

Private companies that fail to think long-term about ESG reporting risk losing out on funding opportunities. Andrea McAvoy explains why. One of the advantages of a private company structure is greater autonomy over governance. Theoretically, private companies face a lighter burden of bureaucracy than their publicly listed peers, allowing them to be nimbler. Nor do they have to cater to the demands of public shareholders increasingly focused on environmental, social and governance (ESG) factors. Even without these external pressures, however, private companies need to start thinking carefully about their ESG strategy and what it will mean for their long-term future. Times are changing and, in the past year alone, three separate developments have shunted ESG to the forefront of the SME agenda. 1. Regulatory changes The assumption that only listed companies will be subject to increasing ESG regulation is outdated. While ESG regulations introduced by the European Union, such as the Corporate Sustainability Reporting Directive (CSRD) and EU Taxonomy Regulation, will impact large private companies by 2023, their scope will expand to include all small- and medium-sized enterprises (SMEs) by 2026. These new regulations will also have an indirect impact on SMEs, because they will influence their business relationships with listed customers and suppliers. The requirement for ESG data disclosures — in particular, climate-related information — will only continue to grow. 2. Funding requirements ESG is now part of the lexicon of most private fund providers – from private equity to debt and beyond. According to the Pitchbook 2021 Sustainable Investment Survey, 81 percent of general partners are either already evaluating ESG risk factors or will be focusing more on ESG risk factors in the near future. The integrity and diligence of such pre-investment ESG reviews may vary. However, at a minimum, private companies should develop an ESG narrative to prevent excluding themselves from funding opportunities. While most private equity (PE) firms include ESG as a non-financial risk for reviewing investment decisions, some also use it to help identify opportunities for value creation during the deal life cycle. Ensuring that ESG is addressed in all forms, and integrated into a company’s long-term strategy, can help private companies maximise exit value, compete for capital against listed peers, and align with increasing listing requirements. More than 50 percent of the global stock exchanges published ESG reporting guidance last year, compared to just 15 percent in 2015. 3. Commercial longevity In a rapidly evolving world, where the operating landscape is adapting constantly to sudden events — emerging pandemics, climate disasters and social disruptions, for example — a focus on ESG could help SMEs mitigate future risk. Developing a genuine ESG narrative can also support key stakeholder relationships with customers, employees, and communities. Some elements of this narrative will be aligned with immediate outcomes (i.e., how short-term expense will impact the bottom line). Others will relate to the cost of capital or the ease of doing business over the long term. Applying an ESG lens to business strategy can bring broader benefits, however, helping SMEs shift the strategic focus from short- to long-term value creation, measured not just by profit, but also by environmental and social value. Andrea McEvoy is Climate Change and Sustainability Services Senior Manager at EY.

Welcome to this week’s Technical Roundup.  In developments this week, the Chartered Governance Institute UK & Ireland recently published a very useful summary of company law changes including some changes to the Companies Act 2014. The provisions of the Companies (Corporate Enforcement Authority) Act 2021 have not yet been commenced but that is expected very shortly and the Financial Reporting Council has issued the first in-depth assessment of the quality of reporting from private companies who have chosen to follow the Wates Principles. The report, which was conducted with the University of Essex, shows that the Wates Principles are the most widely adopted corporate governance code used by large private companies. Read more on these and other developments that may be of interest to members below. Financial Reporting The European Financial Reporting Advisory Group (EFRAG) invites users and preparers to complete either or both of its online questionnaires on Non-current Liabilities with Covenants and Supplier Finance Arrangements by 4 March 2022. EFRAG has issued a Feedback Statement on the post implementation review of IFRS 9 classification and measurement. This feedback statement summarises constituents' feedback on EFRAG's Draft Comment Letter and explains how EFRAG considered this feedback in developing its Final Comment Letter. The UK Endorsement Board (UKEB) has published its draft Due Process Handbook on the UKEB website. It sets out the due process the Board plans to apply to its activities, enabling it to uphold its guiding principles of accountability, independence, transparency and thought leadership when fulfilling its statutory functions. Auditing The International Auditing and Assurance Standards Board (IAASB) have released a First-time Implementation Guide for ISA 220, Quality Management for an Audit of Financial Statements. The guide will help stakeholders understand the standard and properly implement its requirements as intended. Insolvency The Companies Registration Office has confirmed that from 1 March 2022 certain forms which includes certain insolvency forms will be become mandatory online filings only. The list of forms for mandatory online filing are available here and it is noted that forms received by post after this date will be returned for online submission. Other Areas of Interest The Institute recently responded to Phase II of a consultation by the Decision Support Service (DSS). The DSS’s new statutory service will include the replacement of wardship for adults. As part of the new arrangements a circuit court can make an order appointing a suitable person to the role of decision-making representative (DMR) from a panel of experts. A DMR’s role is to make certain decisions on behalf of a person if they are unable to make those decisions themselves. As a DMR can be appointed to make decisions about property or money matters, accountants may be required to sit on this panel. In Phase II, the DSS consulted on a number of codes including the draft Code of Practice for Decision-Making Representatives. The Institute responded to the consultation, highlighting matters of potential concern to members who may be appointed a DMR including potential conflicts of interest issues and record keeping requirements. Companies are embracing the spirit of the Wates Principles.  The Financial Reporting Council has issued the first in-depth assessment of the quality of reporting from private companies who have chosen to follow the Wates Principles. The report, which was conducted with the University of Essex, shows that the Wates Principles are the most widely adopted corporate governance code used by large private companies. The Chartered Governance Institute UK & Ireland recently published a very useful summary of company law changes including some changes to the Companies Act 2014. The provisions of the Companies (Corporate Enforcement Authority) Act 2021 have not yet been commenced but that is expected very shortly .You can read the summary of changes by following the link here. Readers interested in crypto assets might be interested in a recent report of the Financial Stability Board (FSB) “Assessment of Risks to Financial Stability from Crypto-assets“. FSB is an international body that monitors and makes recommendations about the global financial system. The report provides the FSB’s view on recent developments in crypto-asset markets and their implications for global financial stability. You can also click here to hear an interview on Times Radio by FSB Secretary General Dietrich Domanski who explains the FSB's assessment of risks arising from crypto-assets. The Department for Digital, Culture, Media and Sport in the  UK has recently published its Cyber Security Sectoral Analysis 2022 Research report. The Cyber Security Sectoral Analysis project has helped to track the growth and performance of the UK’s cyber security sector since 2018.The report builds on previous reports and contains information about the UK cyber security sector, including the number of businesses, the sector’s contribution to the UK economy, the number of people employed and the products and services offered by these firms. The Central Bank Governor recently addressed the European Financial Forum speaking on Trends and Transitions: an Irish perspective on global and European regulation. He spoke on some familiar themes including  economic resilience, the green transition and  digital transition and also the changing financial system with large growth in the financial sector outside the traditional banking system and open economic and financial strategic autonomy with the aim of boosting the role of the European Union on the world stage. In other Central Bank activity, the Director of Financial Regulation spoke recently to the Compliance Institute about evolving financial regulation and how effective regulation supports economic activity. He also spoke about the individual accountability regime and consumer protection. On Thursday 24 February the Irish Commissioner for Data Protection launched the Irish Data Protection Commission’s Annual Report for 2021.You can read the press release here and details of the report here including figures for complaints ,queries and breach notifications and the inquiries and investigations carried out . Readers may be interested in the Low Pay Commission Consultation on the National Minimum Wage 2023.The Low Pay Commission makes recommendations to the Minister for Enterprise, Trade and Employment designed to set a minimum wage that is fair and sustainable. It is currently looking for views on the National Minimum Wage rate for 2023.The consultation is open from 23 February to 23 March 2022. Companies have been urged to take advantage of Local Enterprise Week across the country. Free online and physical events are being hosted by enterprise offices from 7 to 11 March supported by local authorities and Enterprise Ireland. Some of the topics include “Future Proofing Your Small Business”, “Internationalising Your Business”, “Going Green” and “Show Me the Money”. Click here for the press release and here for more information on the events and how to register. For further technical information and updates please visit the Technical Hub on the Institute website. 

Welcome to this week’s Technical Roundup.  In developments in recent weeks, the Financial Reporting Council has issued January 2022 editions of UK and Ireland accounting standards. These editions reflect the amendments made since the previous editions were issued in 2018, as well as changes in Irish company law, resulting in a single up‑to‑date reference point for each standard; in the first International Accounting Standards Board podcast episode of 2022, IASB Chair Andreas Barckow and Vice-Chair Sue Lloyd join Executive Technical Director Nili Shah to discuss the main topics from the January 2022 International Accounting Standards Board (IASB) meeting. Read more on these and other developments that may be of interest to members below. Financial Reporting The Financial Reporting Technical Committee of Chartered Accountants Ireland (FRTC) has responded to the International Accounting Standards Board’s (IASB) request for information as part of the post-implementation review of IFRS 9. In its response, the FRTC highlighted the importance of providing guidance on how to treat financial assets with sustainability linked features which are beginning to emerge in practice. The FRTC has also responded to the IASB’s Exposure Draft Subsidiaries without Public Accountability : disclosures. This exposure draft sets the proposal for a new IFRS standard which would permit certain subsidiaries to apply reduced disclosure requirements when applying IFRS standards. Whilst the FRTC were supportive towards what the IASB are trying to achieve, they were not in agreement with the approach adopted. Rather than the standard setting out the required disclosures, the FRTC noted that a more appropriate approach would be to draft a list of disclosures that are not required when applying the standard. Such an approach would be similar to the approach set out under FRS 101 and would, in the opinion of the FRTC, be easier to compile and less costly for preparers. The FRC has issued January 2022 editions of UK and Ireland accounting standards. These editions reflect the amendments made since the previous editions were issued in 2018, as well as changes in Irish company law, resulting in a single up‑to‑date reference point for each standard. In the first IASB podcast episode of 2022, IASB Chair Andreas Barckow and Vice-Chair Sue Lloyd join Executive Technical Director Nili Shah to discuss the main topics from the January 2022 International Accounting Standards Board (IASB) meeting The International Accounting Standards Board (IASB) has issued its January 2022 update. Following the IASB's January 2022 meeting, the IASB work plan has been analysed to see what changes have resulted from the meetings and other developments since the December meeting. The IASB has also compiled a summary of its main news items in January 2022. The European Financial Reporting Advisory Group (EFRAG) has issued its January 2022 update. This summarises public technical discussions held and decisions taken during the month. EFRAG has asked for views on the Exposure Draft Non-current Liabilities with Covenants and Supplier Finance Arrangements. Questionnaires to facilitate this request are available to view on the EFRAG website and can be completed by 4 March 2022. EFRAG is seeking comments on their discussion paper “Better Information on Intangibles – Which is the best way to go?” Comments are requested by 30 June 2022. EFRAG has completed its due process regarding the initial application of IFRS 17 and IFRS 9- Comparative Information (amendment to IFRS 17) and has submitted its endorsement advice letter to the European Commission. As a result, EFRAG has also updated its Endorsement Status Report.` The UK Endorsement Board has published its Draft Comment Letter in response to IASB’s Exposure Draft - Supplier Finance Arrangements: Proposed amendments to IAS 7 and IFRS 7 and is seeking feedback on this by 4 March 2022. The IFRS Foundation, CDP and the Climate Disclosure Standards Board (CDSB) have completed the consolidation of the CDSB into the IFRS Foundation. Resources from the CDSB will transfer to the IFRS Foundation and provide intellectual property and technical assets which will support the International Sustainability Standards Board (ISSB). Auditing New research with Audit Committee Chairs reinforces the case for developing standards for Audit Committees. Independent research commissioned by the Financial Reporting Council which builds on similar research in 2020, reinforces the case for developing standards for Audit Committees to help promote a more consistent approach to audit quality. The research, conducted by YouGov, was based on in-depth interviews with Audit Committee Chairs (ACCs) discussing how they carry out their role. A link to the full research can be found here. Insolvency The Institute is hosting a free one hour webinar on 10 February on practical considerations for the small company administrative rescue process (SCARP). The process, how to prepare for it, what to look out for and key matters to be aware of when considering it will be discussed as well as exploring some practical issues including dealing with creditors and the pros and cons of a company entering the process. Fraud/Anti money laundering/Economic Crime Europol has recently issued its report “Cryptocurrencies: tracing the evolution of criminal finances”. It analyses the criminal use of cryptocurrencies, and the report contains core definitions, case examples, and details of the challenges authorities face in combating the illicit use of cryptocurrency. Also, in its press release Europol debunks some myths .It says that overall number and value of cryptocurrency transactions related to criminal activities still represent only a limited share of the criminal economy when compared to cash and other forms of transactions .It also states that cryptocurrencies are not anonymous and while privacy coins and a number of services and techniques may hinder law enforcement investigations, transactions are traceable. The UK Financial Conduct Authority recently published guidance on competency and capability for heads of compliance and money laundering reporting officers (MLROs) of firms authorised and registered by it. The FCA says it should help firms decide if an individual candidate is suitable. The guidance  is  based on FCA  experience of approved applications and gives details of what successful applicants had for example in the way of training and experience. The Treasury Committee of UK Parliament recently published a report on fraud, scams and economic crime. It has called for additional Government action to combat fraud and scammers. The report urges legislation against online fraudulent adverts and for the government to seriously consider whether online giants should reimburse those who fall victim to scams on their platforms. It makes recommendations such as appropriate resourcing and whether a single law enforcement agency would be more effective. Other Areas of Interest In recent days the Irish government launched a new national digital strategy, Harnessing Digital – The Digital Ireland Framework, to drive and enable the digital transition across the Irish economy and society. You can read more details and download the strategy from this page . The strategy was welcomed by regulators, the Broadcasting Authority of Ireland , Competition and Consumer Protection Commission (CCPC), Commission for Communications Regulation (ComReg) and the Data Protection Commission (DPC) . The UK government launched its Cyber Security Strategy this week. It sets out the government’s approach to building a cyber resilient public sector and to ensuring that core government functions are resilient to cyber-attack. Following a consultation last year, the Central Bank this week published its Guidance on the Use of Service Companies for Staffing Purposes in the Insurance Sector due to the potential of these staffing arrangements, if not effectively managed, to threaten the operational resilience of undertakings regulated by the Central Bank. The Guidance expects that where an undertaking uses such staffing arrangements, this should not impair the quality of its system of governance, unduly increase operational risk, impair the ability of the Central Bank to monitor compliance of the undertaking with its obligations, or undermine service to policyholders. This week the Central Bank also published its Regulatory Service Standards Performance Report for the second half of 2021. The document sets out the Central Bank’s performance against service standards that it has committed to in respect of (a) authorisation of investment funds and financial service providers, (b) processing of Pre-Approval Controlled Function Individual Questionnaire  applications and (c) contact management. There are 44 service standards against which the Central Bank sets performance targets. The report documents that during the period, there were 12 service standards which were not relevant and of the 32 which were, 27 of these were either met or exceeded. The Companies Registration Office (CRO) has announced that it will introduce mandatory online filing for 18 of its Companies Office forms from 1 March 2022. These include forms for winding up resolutions and  appointment of liquidators and receiver. Click here to see the list of affected forms. Any forms, which are mandatory online filings, received on or after 1 March 2022 will be returned for re-submission online. Users are advised to familiarise themselves with the CRO’s CORE system to avoid unnecessary delays.   The Department of Enterprise, Trade and Employment (DETE) recently  launched a Public Consultation on Reform and Modernisation of Legislation regarding Co-operative Societies. Work is nearing completion on proposed legislation to repeal the Industrial and Provident Societies Acts 1893-2021 and provide a modern and effective legislative framework suitable for the diverse range of organisations using the co-operative model in Ireland. This consultation outlines a number of issues and asks specific questions to assist the DETE prior to finalising legislative proposals. The DETE is also taking the opportunity to give stakeholders a general overview of the proposed legislation. It is seeking responses from interested parties by 25 February 2022.The press release regarding the consultation can be found here. The Institute is responding to this consultation and we welcome comments from members. Please use the form here to send us your views on this proposed reform.  Following relaxation of many public health measures, including the requirement on public health grounds, to work from home, the Tánaiste recently published the Transitional Protocol, a guidance document which was developed in consultation with business representative groups and unions. It sets out best practice for keeping the workplace safe and to help employers and their employees return to work safely. The DETE has recently published its latest newsletter .It contains information on a number of matters including the Transitional Protocol mentioned in the preceding paragraph and the publication of the Competition (Amendment) Bill 2022 which, if passed, will give  more powers to the competition authority to protect consumers. The European Commission is running its annual event EU Industry Days from 8 – 11 February 2022.You can register and join online. It is a four day event with one day casting a spotlight on the EU tourism ecosystem and other days holding discussions across industrial ecosystems on their green and digital transition, in support of strengthening the resilience of EU companies (including SMEs).It will also hold a special youth programme  focusing  on some of the most urgent concerns for young Europeans today: social equality, youth unemployment and precarious work, and the urgent call for sustainable and socially responsible business models. Details of the programme including the special youth programme on 10 February 2022 can be found here. Speakers include Ursula Von Der Leyen President of the European Commission and Maroš Šefčovič, Vice President. A podcast series is also available on the website where industry insiders, civil society representatives, academics, and many others have a say about the trends, challenges and  opportunities that the green, digital, and resilient transition brings for European industry.

In an update of our earlier news item, the Government has today published a draft Scheme of the Right to Request Remote Working Bill 2022.Under it an employee who has completed at least 26 weeks of continuous service can submit a request for remote working. The employer must give the request due consideration but may decline if the proposal requested is not suitable on business grounds. The draft legislation outlines 13 non-exhaustive potential business grounds for an employer to refuse the request. Refusals can be appealed to the Workplace Relations Commission. Every employer will be required to establish and maintain a written statement of remote working policy. The Tánaiste said today that he wanted the legislation published by Easter and passed by the Oireachtas by the summer recess.

As we embark on shaping the next phase of work, there is a mix of concern and excitement about getting the transition right. Kevin Empey explores what leaders can do with this once-in-a-generation opportunity to mould the future of work here and now. After overseeing the most dramatic shift to work in modern history over the last two years, leaders are now centre stage again with the expectation to guide and lead organisations through an even more complex and tricky phase of work design. As many have remarked in recent months, it was one thing to get people out of the office against the backdrop of a pandemic and a standard set of rules and guidelines for everyone; it is quite another to get people back to a new model of work that is complicated by choice and continuous comparison with what everyone else is doing. Three work phases Most organisations moving to a hybrid or more blended model (remembering that there are thousands of jobs where remote working is not an option) typically agree that we are looking at progressing through at least three phases: Experimental: a tentative, almost experimental type experience that is currently underway for many, influenced by the changing realities of COVID-19. Transitionary: a more deliberate, test and learn and strategic phase, with a transition to different ‘target’ working models that are more sustainable and hopefully free of the constraints and concerns around COVID-19. Most agree that we are also not likely to get this transition perfectly right the first time. Bedding-down: the realities, lived experience and outcomes from the transition to new target models are truly revealed, understood, and implemented over the next couple of years. On the back of these three phases, leaders need to consider two things: The operational and logistical challenge of getting people safely through these phases; and The strategic challenge of creating a new work model, associated people processes, and a leadership approach and culture that is ultimately successful and purpose-built for the organisation and its future. Strategic agility The exact sequencing of these three phases and two workstreams will differ from organisation to organisation. However, there is one foundational quality that will maximise the success of this change-management experience and prepare the organisation and workforce for further inevitable disruption into the future. That quality is strategic agility. Strategic agility is a complex, ambiguous, vulnerable leadership challenge for everyone: organisational leaders, managers, human resources, and employees. But the transition to the next phase of work is also an invaluable case study of agility in action – a case study that we can learn from, experiment with, and embed into our ways of working. The longer-term prize for leaders and employees Over the next 6 to 12 months, the potential prize for organisations is not just a safe and successful transition to a new, post-COVID-19 work model. It is also about using the learning and experience of this transition (along with the lived experience of leaders and employees over the last 22 months) to help organisations develop and embed more agile ways of working, leading and thinking for the future. Being deliberate about developing these skills over the coming months will give us the ability to deal with any change, uncertainly and disruption. Importantly, it means our leaders and our workforces will be able to flourish and thrive in the longer-term future of work and not just respond and cope from one disruption to the next. Conscious development of the sustained and deliberate capability of agility at an organisational, team and individual level will be the long-lasting legacy of COVID-19. And this prize can be won through our combined work over the next year as we go through the experience of co-creating new, successful working models and working lives. Kevin Empey is the Founder and Managing Director of WorkMatters. He is also the author of Thrive in the Future of Work, published in 2021.

The CCAB-I Insolvency Committee has today published Technical Alert 04/2021 Register of Beneficial Ownership of Companies and Industrial Provident Societies – Guidance for Insolvency Practitioners. This Technical Alert highlights the features of the Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies which are of particular importance to insolvency practitioners.  This guidance has been prepared on a practical basis and is intended to be of a practical nature.  This Technical Alert is available on our website.

Welcome to this week’s Technical Roundup.  In developments this week, the Financial Reporting Council has published a revised Audit Enforcement Procedure (“AEP”) and feedback statement. This follows consideration of the responses received to the consultation launched on 22 July 2021 regarding proposed amendments to the AEP; on Friday 10th December, EFRAG along with BusinessEurope and the IASB are holding a joint webinar entitled “Future of IFRS disclosure requirements: What we learnt from the field test with European preparers” Read more on these and other developments that may be of interest to members below. Auditing IAASA has published a thematic paper discussing the use of data analytics in Ireland’s statutory audit market. This 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 and discusses challenges faced by auditors when using data. The FRC has published a revised Audit Enforcement Procedure (“AEP”) and feedback statement. This follows consideration of the responses received to the consultation launched on 22 July 2021 regarding proposed amendments to the AEP. A link to the revised AEP is available here.  The FRC has announced its areas of supervisory focus for 2022/23, including priority sectors, for corporate reporting reviews and audit quality inspections.  The FRC’s Supervision Corporate Reporting Review team will supplement its routine reviews of corporate reporting with six thematic reviews. These reviews will identify scope for improvement, as well as examples of better practice, in areas of key stakeholder interest. The FRC’s Supervision Audit Quality Review team will pay particular attention in its reviews to areas including climate-related risks, fraud risks, and cash and cash flow statements. The FRC has published a Collection of Perspectives, following the FRC Culture Conference held in June 2021 that brought together a wide range of international experts to explore the important link between culture and high-quality audit.   Financial Reporting The IASB has issued a proposed IFRS Taxonomy Update, 'IFRS Taxonomy 2021 Proposed Update 2 — Technology Update'. The Financial Reporting Council (FRC) has announced its areas of supervisory focus for 2022/23, including priority sectors, for corporate reporting reviews and audit quality inspections. On Friday 10th December, EFRAG along with BusinessEurope and the IASB are holding a joint webinar entitled “Future of IFRS disclosure requirements: What we learnt from the field test with European preparers”. In his address to delegates at the AICPA and CIMA conference on 7th December in Washington, Andreas Barckow, chair of the IASB discussed sustainability, the IASB’s current and future work programme and convergence. The FRC has issued FRED 79- FRS 101 Reduced Disclosure Framework – 2021/22 cycle, which proposes no amendments to FRS 101 as a result of its latest annual review. Comments on FRED 79 are requested by 1 March 2022. Insolvency The Companies (Rescue Process for Small and Mirco Companies) Act 2021, which provides for the Small Company Administrative Rescue Process (SCARP) was commenced on Tuesday, 7 December 2021. The commencement order, associated regulations and prescribed forms will be available on the Department of Enterprise, Trade and Employment’s website in the coming days. Further information about the process can be found on the Department of Enterprise, Trade and Employment’s website. Other Areas of Interest In February 2021, the International Valuation Standards Council (IVSC) published a perspectives paper 'Challenges to Market Value' that looked at the challenges in relation to the availability of market information in a pandemic world. A broad range of feedback was received in relation to the paper that has prompted the IVSC to publish a second paper in the series. The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published its latest edition of its Spotlight on Markets Newsletter. The Pensions Regulator recently made a presentation to IAPF Governance Conference on the Authority’s Code of Practice. They talked about pension scheme governance, the Code of Practice and why it is needed and that it sets out the Pension Authority’s expectation of trustees .You can read a copy of the presentation here and click here for the Code of Practice. The Department of the Environment, Climate and Communications recently published Cyber Security Baseline Standards and associated implementation guidelines for use by Public Service Bodies. The main goal of the standards is to improve the resilience and security of information and communications technology infrastructure and systems (ICT) in Public Service Bodies. Follow this link to the publication and read Minister Ossian Smyth’s comments on the publication here . A salutary lesson from the UK shows how organisations must ensure they get the basics of their data security correct. Due to tight timescales and a new IT system in the UK Cabinet Office, a mistake was made which resulted in the disclosure of hundreds of postal addresses online. There was no specific or written process in place at the time to sign off documents and content containing personal data prior to being sent for publication. The error resulted in a fine of £500,000 by the UK Information Commissioner’s Office (ICO) the ICO commenting that the Cabinet Office’s complacency and failure to mitigate the risk of a data breach meant that hundreds of people were potentially exposed to the risk of identity fraud and threats to their personal safety. You can read here what the ICO said and here for details of the monetary penalty notice. The Minister for Enterprise Trade & Employment recently announced that the interim period of the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 is extended to 30 April 2022. The Act makes temporary amendments to the Companies Act 2014 and the Industrial and Provident Societies Act 1893 to address issues arising as a result of Covid-19. It allows companies and industrial and provident societies in Ireland to hold their AGMs and general meetings online, increases the period of an examinership to 150 days and increases the threshold at which a company is deemed unable to pay its debts to €50,000. The Dept of Enterprise Trade & Employment has recently published its December newsletter. Topics covered include the commencement of SCARP legislation, a reminder of the National Minimum Wage increase on 1 January 2022,a masterclass on 14 December next held by Enterprise Ireland (registration required) for those looking to upskill for export growth and who want access to development of  selling skills and a webinar on 11 January 2022 on patenting trends. In its recent article entitled “Sustainability reporting: Why should SMEs care”, Johan Baros, EU Policy Manager at Accountancy Europe discusses the role of the SME and how they should prepare for sustainability reporting. On December 6th, the International Federation of Accountants (IFAC) published its vision for high-quality assurance of sustainability information—calling out best practices identified during its year-long, global engagement campaign related to the State of Play in Sustainability Assurance. This vision addresses the importance of global standards, regulation that supports decision-useful disclosure, and the value of an interconnected approach to sustainability and financial information reporting and assurance. FATF recently held a conference on environmental crime which included as participants heads of international organisations such as the UN’s Office on Drugs and Crime (UNODC) and the UN Environment Programme. FATF President Dr. Marcus Pleyer called for a global push to take the illicit profits out of environmental crimes and participants discussed how to develop partnerships to tackle the dirty money that helps fuel environmental crimes. You can follow the link here to view videos of various speakers. For further technical information and updates please visit the Technical Hub and the Covid-19 Hub on the Institute website. 

Welcome to this week’s Technical Roundup.  In developments this week, over the recent months, the Institute of Chartered Accountants in England and Wales published a series of reviews of major standards looking at the differences between International Financial Reporting Standards and International Public Sector Accounting Standards and the suitability of each in public sector financial reporting. The fourth and final part of the series has now been released; EFRAG, Business Europe, and the IASB will host a joint webinar on 10 December 2021 on the IASB’s exposure draft 'Disclosure Requirements in IFRS Standards—A Pilot Approach (Proposed amendments to IFRS 13 and IAS 19)'. Read more on these and other developments that may be of interest to members below. Financial Reporting The International Accounting Standards Board (IASB) has published the exposure draft 'Supplier Finance Arrangements (Proposed amendments to IAS 7 and IFRS 7)' to enhance the transparency of supplier finance arrangements and their effects on a company’s liabilities and cash flows. The deadline for submitting comments is 28 March 2022. The IFRS Foundation has issued a monthly news summary for November 2021. EFRAG has completed its due process regarding amendments to IAS 12 and has submitted its Endorsement Advice Letter to the European Commission, recommending it’s endorsement. The Amendments revise IAS 12 to require entities not to apply the IAS 12 initial recognition exemption to transactions that, on initial recognition, give rise to equal and taxable temporary differences. The objective of the Amendments is to reduce the diversity that currently exists in practice. EFRAG, BusinessEurope, and the IASB will host a joint webinar on 10 December 2021 on the IASB’s exposure draft 'Disclosure Requirements in IFRS Standards—A Pilot Approach (Proposed amendments to IFRS 13 and IAS 19)'. In Accountancy Europe’s recent podcast entitled “Sustainability will never do without Governments”, senior manager Paul Gisby discussed sustainability reporting standards for the public sector and where this might lead to in the future, including the potential role of the accountant. The European Banking Authority (EBA) has published a report summarising the findings arising from the monitoring activities on the IFRS 9 implementation by EU institutions. EBA notes significant efforts in IFRS 9 implementation by EU institutions, but cautions on some of the observed accounting practices, especially in the context of the COVID-19 pandemic. IFAC’s Professional Accountants in Business (PAIB) Advisory Group has compiled insights on how accountants are contributing to value creation and sustainability in their organizations in both the private and public sectors in a new report, The Role of Accountants in Mainstreaming Sustainability. A study published as part of the working paper series of the European Banking Institute (EBI) looks at COVID-19 disclosures in half-year and year-end financial statements 2020 of European banks. ESMA, EBA, IOSCO and IASB communicated in the second quarter of 2020 their expectations on disclosure regarding the pandemic’s impact in order to meet the objective of the IFRS to provide decision-useful information to stakeholders. Over the recent months, the Institute of Chartered Accountants in England and Wales (ICAEW) published a series of reviews of major standards looking at the differences between International Financial Reporting Standards (IFRS) and International Public Sector Accounting Standards (IPSASB), and the suitability of each in public sector financial reporting. The fourth and final part of the series has now been released. Auditing The FRC has published a Collection of Perspectives, following the FRC Culture Conference held in June 2021 that brought together a wide range of international experts to explore the important link between culture and high-quality audit.     The Collection of Perspectives includes contributions from academics, audit firms, directors, regulators, culture change experts and other parties within the audit ecosystem.   The publication serves to highlight consensus between contributors, as well as thoughts on best practice to encourage learning and continuous improvement in developing a culture to improve audit quality.   The full Collection of Perspectives is available here. A summary from the FRC’s Culture Conference is available here. FRC encouraged by reporting by applicants on Stewardship FRC has published ‘Effective Stewardship Reporting: Examples from 2021 and expectations for 2022’ which analyses reports from the first signatories to the revised Code published in September 2021. There continues to be high quality of disclosures in the areas of governance, resourcing, and the integration of stewardship and ESG factors with investment. However, there is still room for improvement in explaining how they manage stewardship-related conflicts of interest, how managers review and assure their stewardship activities, and how they monitor and hold to account service providers operating on their behalf. Insolvency The Irish network of The International Women’s Insolvency & Restructuring Confederation (IWIRC) is hosting its first webinar ‘A look back on key restructuring and insolvency developments in 2021’ on Thursday, 9 December. Anti-Money laundering, Fraud and Cybercrime The Institute of International Finance and Deloitte have recently published a White Paper which highlights four focus areas where continued reform can build on progress already underway globally to help improve the effectiveness of the anti-financial crime framework: 1. the use of financial intelligence; 2. risk prioritization; 3. technology and innovation; and 4. international cooperation and capacity building. This paper also highlights important instances of ongoing systemic improvements, how similar efforts can be deployed across jurisdictions, and how policymakers could prioritize international cooperation and coherence. The paper is entitled “The effectiveness of financial crime risk management -reform and next steps on a global basis”. Read also Grant Thornton’s recently available report on The Economic Cost of Cybercrime Ireland 2021.  The Financial Action Task Force has recently published its Annual Report 2020-2021   . Read about FATF’s achievements under the first year of its German Presidency including the publication of two reports analysing the opportunities and challenges of new technologies, a report into money laundering from environmental crime, which concluded that most countries are failing to assess this area as part of national or money laundering risk assessments and a report on ethnically or racially motivated terrorist financing. Members may be interested in a webinar FATF is holding on Proliferation Financing Risk Assessment and Mitigation on 16th December. Proliferation Financing is financing for the malicious use of chemical, biological, radiological and nuclear materials and weapons. Other Areas of Interest The Pensions Authority has previously advised that from 1 December 2021, trustees must notify the Authority when they enter an outsourcing arrangement for the provision of the internal audit and risk management key functions. Trustees who have entered these arrangements since 22 April 2021 must also notify the Authority. The Authority has now issued instructions on how to notify  it of the arrangements. The Pensions Authority has also recently issued an information note on various regulations signed by the Minister for Social Protection on 25 November 2021. The regulations make amendments to existing regulations under the Pensions Act 1990, as amended, in relation to disclosure, scheme registration, trustee investment qualifications, funding standard, cross-border requirements, and bulk transfers; and revoke and replace the existing investment-related regulations under that Act. Click here for the link to the website which gives further information and links to the regulations. The Central Bank recently issued its Cross Industry Guidance on Operational Resilience. The pandemic has put firms’ operational resilience to the test and highlighted the importance of being more operationally resilient. The guide applies to regulated financial service providers and communicates how to prepare for, respond to, recover and learn from an operational disruption that affects the delivery of critical or important business services. It is also to communicate the Central Bank’s expectations in this regard. The Central Bank recently published its second financial stability review of 2021 which outlines key risks facing the financial system and the Central Bank’s assessment of the resilience of the economy and financial system to adverse shocks. Findings show that economic recovery has continued over the past six months, but more medium-term vulnerabilities have been building up. You can read full details of the review here  and the Central Bank Governor’s remarks on the publication here. HMRC recently issued its Modern slavery statement. This statement details the work HMRC is currently undertaking to eliminate modern slavery in supply chains and to ensure modern slavery risks are identified and managed. The Government has recently agreed that the Dept. for Public Expenditure and Reform undertakes a review of the statutory framework for ethics in public life before it brings forward proposals for legislative reform in 2022.The Dept. has issued a consultation document entitled “Reform and Consolidation of Ireland’s Statutory Framework for Ethics in Public Life” which gives background to the current framework and a proposed policy approach. The Dept is seeking views on a number of questions in the consultation document .Please follow the link to the consultation and document. Submissions can be made up to 5pm on Thursday 23rd of December 2021. A short informative video is now available to view from the A &L Goodbody Corporate Crime Regulation Summit 2021 .Here Ian Drennan of the ODCE talks to Kenan Furlong of ALG  about the ODCE’s work and the imminent establishment of the Corporate Enforcement  Authority which is expected to be established by year end .Ian Drennan talks about the resourcing increase for the new Authority, new powers (which will come on stream over time ) and the important part that technology plays in their work. The European Data Protection Supervisor recently issued its monthly newsletter .It announces its proposed summer 2022 Data Protection conference, “the future of data protection: effective enforcement in the digital world”, it highlights a report on “Biometric And Behavioural Mass Surveillance In EU Member States”  and it comments on a European Digital Identity Wallet. For further technical information and updates please visit the Technical Hub and the Covid-19 Hub on the Institute website. 

Dave Riordan ACA, Recruitment Specialist & Career Coach, Chartered Accountants Ireland Careers Team, writes: Recruitment into practices, large and small, is a challenge in the current climate. We know this. So what can we do to make our recruitment processes easier and more effective? Here are some tips that I deem essential to attracting and onboarding suitable additions to your team: The senior management team should incorporate into their Practice Strategy some core objectives and KPI’s on the firm’s candidate attraction (and retention) approach. This needs to be a permanent fixture in quarterly management meetings for the firm and constantly updated. Conduct one comprehensive, all encompassing, interview that allows you make a quick decision about the candidate – no second interview needed. This way you have a time advantage and first mover advantage versus competing practices. As well as traditional jobs boards, use social media channels to get the word out LinkedIn, Instagram, Facebook, Twitter etc. Align your message across each and post simultaneously to each platform for full reach to your audience on the same day. Develop your Practice Brand as an employer of choice in the practice-sphere. This will mean differentiating your firm to increase attractiveness. Train your own – take the longer term view and hire trainees to grow them in your culture. Hire Part-time/ flexible workers – the world is shifting towards the ‘gig-economy’ mindset, so why not employ FCAs who are seeking part-time roles? This way, you can benefit from the vast experience they can bring to the role, and they benefit too as they can balance their role with wider family needs. Many members are now very focused on work-life balance and, even if they are nearing retirement, they could be in a position to contribute some of their best years to your firm. Many FCA’s with 30 years+ experience would be delighted to contribute a wealth of experience to a role in practice for a few days a week, and it doesn’t necessarily need to be at a senior level. Flexible core hours or work to facilitate school drops and pickups are another obvious element in this. Consider ‘Returners’ (members who have been off work travelling or developing home life for a few years). They may often be a ‘little’ flexible on salary to get a foot back on the ladder that then enables them to restart their career. Returners not only have a wealth of experience to bring to a role, but they also have maturity and life experience that can be hugely beneficial. If it’s hard to find the Audit and Tax people you are seeking, why not start to build a branded presence on LinkedIn. Raise the profile of your firm so that ACA’s are aware of it and how good your practice is to work for from an early stage in their career. This will ensure you tap into a pool of passive candidates and attract interest over a period of time. Offer different elements in your remuneration package: e.g. gym membership, social Fridays each month, pension, commission structure, phone paid etc. Often a well run internal candidate-referral reward scheme can be a highly effective way of incentivising current employees to bring in ACA’s that they feel would be a fit for your firm. Done well, this can extend your reach into the market for candidates significantly and also help maintain a consistent culture. Use a highly regarded recruitment agency. Partnering with an agency closely can be very advantageous in the market if you do it right! Some tips on this: Meet the consultant you are working with; Have a regular scheduled update call (e.g. weekly); Accept speculative CVs from the agent; Be flexible on the fee rate. If you get an exceptional candidate they can be worth it and remember it’s contingency based, so no fee is applicable if the process is incomplete; Keep updating the agent about the news in your firm; Offer to work exclusively with the recruitment firm, but ask what steps they will go through to find/headhunt the right candidate for you; Make sure you have created an excellent job spec and offer to assist with the advert text; Recruiter fees can appear high on the face of it, but a good recruiter can allow you get on with the day job of billing clients while they streamline the candidate selection process saving you time and money; Make the partnership a positive one where you share background (but always confidential) information with the recruiter, ensuring you are on the same page & wavelength regarding the person and role; If you trust your recruiter to know what you are looking for and he/she recommends a candidate that does not look like an obvious fit on paper, give the recruiter the benefit and trust their judgement and meet them. I would also be generally open minded on applications. For example, if a candidate is not a right fit for your current active role, consider whether they might be suited to your firm in a different role where they will add value, or perhaps consider them as a short-term contract addition to the team if that could alleviate a work backlog for you. Candidates in the practice market in 2021/22 are savvy and have built shortlists of their preferred employers that match their career pathway. You need to be on their shortlists as an employer of choice. As an interviewer, be clear and well-practiced in the selling points and differentiators of your firm and communicate them warmly during the meeting. Refine your interview techniques and get honest feedback on them to ensure the interview experience for the candidate is a positive professional reflection of the organisation. As an additional guide I can highly recommend a Chartered Accountants publication by Mary E Collins – “Recruiting Talented People”if you are looking for additional detail. I always recommend looking for opportunities each quarter/year to stay close to the Institute, and so partnering with the Careers Team in Chartered Accountants Ireland for your recruitment needs is a good idea to ensure you are attuned to the market, and first in line for ACA candidates who prefer to tentatively explore a practice career move with the confidentiality and assurance of their own Institute. If you would like to speak to the Chartered Accountants Ireland Careers Team, please email us at careers@charteredaccountants.ie.  

Julia Rowan answers your management, leadership, and team development questions. My team works hard and to a high standard, but a couple of people on my team turn every team meeting into a moan about the company. I’m worried that this will affect new team members. The company is a pretty decent employer. What can I do? A. It seems that there are two issues here. First, dealing with the moaning (I will use your word here) and second, making sure that it does not affect new team members. Let’s deal with them separately. When team members moan, our natural tendency can be to jump in, explain, defend, etc. And sometimes that may be the right thing to do, but there is often a “yes but” no-win game being played. There are a couple of things you could do. You could just listen, thank the team member and move on without comment. Or you could listen and ask, “who do you need to talk to about this?” or “who needs to know this?” Or you could have a one-to-one with the moaning team member and try to get under the issue. Only do this if you can be genuinely curious. You could ask questions like “how does that affect how you show up?” and “how can I support you here?” Many people work hard and moan hard, in which case I would praise them for working hard despite their misgivings. If you have a good conversation, you could share your concern that their negativity affects new team members. Loud complainers can create a strong gravitational pull, and you are right to be concerned about their impact on new team members. Make sure to spend plenty of one-to-one time with the new team members, opening up a two-way dialogue, establishing a good feedback relationship, meeting with them regularly, talking about their development, etc. The manager-employee relationship is the most important relationship at work – make sure it’s a good one. I feel my team regressed in the last work from home period. Now we’re working from home again, what can I do to hold the team together? A. Leadership is so important when people are working remotely, as everything is moving online. Five-minute conversations in the canteen often turn into 30-minute Zoom conversations. And you only see your own team and key stakeholders, with none of that easy connection with ‘corridor friends’. Be proactive here. Bring the team together and take some time to review the learning from the last lockdown (what worked well, what worked less well) and invite them to create a set of guidelines (sometimes called a team charter or ground rules) to help them navigate this period. Make this a live document. Check whether it is working and ask, “what else can we do to make this easier for everyone?” You can’t fix this on your own; step back so that the team can lean in. Create a ‘social only’ meeting once a week and get it into people’s diaries. If your team is large, put people into small breakout rooms of two to four people for 15 minutes to give time for connection. If budget permits, send a small gift from time to time. One-to-one check-ins are critical too. Julia Rowan is Principal Consultant at Performance Matters, a leadership and team development consultancy. To send a question to Julia, email julia@performancematters.ie.

A successful COVID-19 vaccine roll-out, a growing economy and shifting priorities – 2021 may not have been the year we expected, but it has definitely delivered change and opportunity. Four members review the challenges they overcame, the surprises they faced and their hopes for the future.  Thady Duggan Senior Manager of CFO & Enterprise Value in Accenture At the beginning of 2021, I was expecting the impact of the pandemic to diminish faster than it did. Given the success of working from home and the fact that we proved, by and large, that many of us can do our job from home, I did not think things would return exactly to the way they were, but I did expect to be in our offices and our client offices more often. The biggest challenge, however, was home schooling. My sister is a teacher and I used to tease her about her holidays – she deserves them! However, professionally, it was continuing to work remotely. We have great collaboration tools and have become smooth at remote workshop facilitation, but there is something to be said for the personal touch. Conversely, because I was working from home, I was able to work on some global projects that I might not otherwise have had the opportunity to do. Under normal circumstances, a portion of my work could be in the UK or, to a lesser degree, Europe, but this year I was able to work with our US team on one of the world’s largest M&A deals. In 2021, I have been pleasantly surprised at how quickly we have galvanised around sustainability and climate. Work was clearly being done over previous years but there seems to be momentum, certainly from individuals and businesses, around these topics that were not there previously. I am also probably a little surprised that the rate of change we saw in the second half of 2020 has not slackened.  After the last year, I take more joy from smaller things and focus on the benefits small actions can have. I have probably done less socially over the past 12 months, but I try to enjoy each activity more. I hope COVID-19 peters out into just being like flu season, and we get back to having face-to-face client engagements again. Stephen Prendiville Head of Sustainability at EY I really didn’t know what to expect of 2021. For a while it was hard to see beyond the next week, not to mind the coming year. But when EY globally stepped out at Davos early in the year and committed to being net-zero in line with science-based targets for 2025, I knew the year was going to be dominated by the pursuit of that commitment. Over the course of 2021, we also became carbon negative, offsetting and removing more carbon than we emit.  On a personal level, it was a year of change. My family and I moved closer to extended family in Donegal and I took on the role of Head of Sustainability. Taking on the role came with a dual purpose: pursuing and supporting our internal sustainability goals at EY, but also structuring our teams to respond to the ever-increasing and challenging focus on the broad concept of sustainability and decarbonisation.  A professional highlight for me this year was representing EY and Irish business at COP26. While the climate diplomacy of COP can be difficult to appreciate, in the wings I had the opportunity to meet people at the cutting edge of technology and business that really do speak to the vastness of our new economic prospects. Prior to COP26, I would have considered that Irish business had a lot of common ground with the Irish Government. What I now see is that both the Irish Government and Irish business have more in common with the climate activist compared to our peers. Ireland can be a great disruptor. When we speak, people listen. We need to use that power not only to help the planet, but also to position ourselves in the new forthcoming global economy. In 2022, we need more dialogue. We need to get deeper on climate action. With the carbon budgets now in place, and the Climate Action Plan 2021 setting a sense of tone of direction, I think 2022 will nurture a great national dialogue and step-change in action for Irish business in particular.  Chalene Gallagher Regulatory Data Senior Associate at the Federal Reserve Bank of New York With everything that happened in the United States last year that served to highlight the inequities faced by minority groups throughout US history, it felt even more important for me to do more in the diversity, equity and inclusion (DE&I) space. The murders of Ahmaud Arbery, George Floyd, Breonna Taylor and too many others felt personal to me. Although I did not grow up in the US, as a black woman, the situations that led to their deaths could just as easily happen to me, a member of my family, or a friend.    The effects of the pandemic also served to compound disparities, as the loss of life and livelihood was felt most by communities of colour and by women who were the predominant employees working in the most impacted industries and who now had to take on more care-giving roles. Although the US and global economies are in recovery mode, it is by no means equitable, creating a K shaped recovery that further serves to highlight the struggles faced by minority groups.    My perspective really changed during the year in that instead of focusing on the feelings of frustration felt in 2020, in 2021, I chose to focus on action. Although I had been balancing my day role as a Regulatory Data Specialist with supporting people and culture-related efforts within the Bank, I personally felt the need to do more. So, I worked with my manager at the start of the year when I became the Vice President of the Women’s Employee Resource Network to intentionally split my time between regulatory reporting analysis and DE&I. Raising awareness, having tough conversations and trying to meet people where they are on their DE&I journey to help move the needle has been a challenge and an emotional investment. But is has been worth it.   Although there is still a lot of work to be done, I feel like we’re moving in the right direction.  For 2022, I hope we can continue to keep these topics at the forefront of the conversations we have in public and behind closed doors so that we can keep the momentum going and make real, tangible and sustainable change.  Sinead Fitzmaurice CEO of TransferMate Global Payments The COVID era has applied pressure to companies’ capital and cash flows, but those who experienced a surge in demand needed immediate information on cash flow and supply chain aspects. As we entered 2021, I expected to see a rise in demand from CFOs for the modernisation of payments infrastructure via digital platforms, and that theme has indeed dominated 2021.   The challenge is always the same: it’s about striking the right balance between personal and professional lives. They are both joined at the hip, like it or not, and both can be stressful in their own way. Striking the right balance is dependent on the talent you surround yourself with, and I am honoured to work with such a talented team at TransferMate who help us achieve our corporate goals daily.  I am always surprised at the resilience of the human spirit and our adaptability in the face of adversity and change. This has been tested to the extreme over the past 20 months in our personal and professional lives. We have a philosophy at TransferMate: “it is our people who make us who we are”. I can honestly say that I am inspired every day by our teams. They consistently rise to any challenge and deliver with utmost professionalism time and time again, regardless of the circumstances. The events of the past 12 months (20 months, actually) have been dominated by COVID-19 and for most of us, our lives have been put ‘on hold’. Yes, we have carried on as best we can within tight constraints, but we still have never really felt completely free. If nothing else, I have come to appreciate the freedoms we had taken for granted – the freedom to interact with people the way I want to, the freedom to travel, etc. In 2022, I hope we emerge from the pandemic for the better; we never forget the sacrifices that people have made as we wrestled with defeating it. I hope we learn not to be complacent about the possibilities of new threats rising and be prepared to defend ourselves when they do. On a professional level, 2022 promises to be a breakout year for my organisation. My goal will be to execute the plan flawlessly and blow through every milestone along that journey to the end of the year for everyone at the company.

Despite persistent and difficult challenges, Dawn McLaughlin is bullish on the north-west’s prospects for 2022 and beyond. This time of year is often a natural time to reflect and contemplate what has happened over the past 12 months. 2021, for all its challenges and difficulties, has been a greater whirlwind than the preceding year in many ways. While still profoundly challenging, businesses have got to grips with issues like the pandemic and the Northern Ireland Protocol, adapting to the challenges before them and seeking new ways of working to meet their customer needs and obligations. I have witnessed the hardship and listened to stories of decimation and uncertainty. But I have also been heartened by how businesses reacted to the crisis, putting their people before themselves. As we look towards 2022 and consider all that it may bring, it is important to look at the challenges we have faced, what we have achieved, how we have progressed, and what still needs to be done. For the north-west, it has been a year of optimism and positivity as well as change and progression. February saw the heads of terms signed off on the £250 million Derry and Strabane City Deal, an investment package that will see 7,000 jobs created over the next decade and an extra £210 million in GVA (gross value added) generated in our regional economy annually. It is difficult to overstate the transformative potential this deal could have for our region – a part of the island that has historically been underfunded, underdeveloped, and under-prioritised. If we get this right, there is an opportunity to carve out the north-west as a leading location in Western Europe for technology, health and life sciences, diagnostics, artificial intelligence, and other emerging industries that will become increasingly important to the global economy over the next decade. It has been a joy to finally see future doctors and consultants training in the city, with the opening of Derry’s new School of Medicine in September. The further expansion of Ulster University’s Magee campus is something that City partners are committed to making a reality, and we will continue to work collaboratively towards this goal. We have welcomed new Executive ministers this year, new MLAs in Foyle, and new party leaders. Ahead of the next Assembly election in Spring 2022, we have been working hard to get our message out there and tell our local candidates precisely what they must support to see our region flourish and prosper. We hope that issues like our regional connectivity and infrastructure, the expansion of our local university, job creation, attracting new investment, and skills development will be front and centre for our elected representatives in May. Specific issues still linger as we look ahead to 2022. Continuing disagreement over the Northern Ireland Protocol does no one any favours, especially businesses. Companies crave certainty, and they thrive when things are stable. While the Protocol is by no means perfect and difficulties are still to be ironed out, these are not insurmountable. Both sides can come to a positive conclusion through committed dialogue, and Northern Ireland can begin to take serious advantage of access to both the UK and EU markets. With growing inflation, a squeezed labour market, and rising costs of materials, services, and utilities, businesses face persisting challenges as we go into the New Year. However, I have spoken regularly about my optimism for the north-west throughout the past 12 months. This optimism has not abated, and I still believe 2022 will be a year of opportunity and prosperity for our region. Dawn McLaughlin FCA is Founder of Dawn McLaughlin & Co. Chartered Accountants  and President of Londonderry Chamber of Commerce.

A recent global compliance study of 890 senior compliance professionals in 25 countries highlights an increasing emphasis on compliance as a value creator. Mairéad Divilly analyses how compliance professionals are factoring in this shift, the benefits to business, and the challenges ahead. Following a year of economic uncertainty arising from the COVID-19 pandemic, businesses worldwide are considering how to extract more value from their operations. The compliance function is no exception. In the past, companies tended to commoditise global compliance, seeing it purely as an overhead. More recently, there is growing evidence that businesses increasingly appreciate both the tangible and intangible values of good global compliance. Analysis of the global compliance survey results suggests that businesses are now much clearer on the benefits and opportunities of good compliance. According to the survey, 58% of compliance professionals now view global compliance as an opportunity to create value rather than an obligation that results in a net cost, as indicated by 37% of respondents. More specifically, 65% of respondents feel that good compliance increases investor confidence, while 64% say it increases client and customer trust and 61% say it helps build a good reputation. The benefits of good global compliance Recognition that good compliance brings returns in the form of a stronger reputation and greater revenue is increasingly evident, particularly when we consider that compliance failures carry significant repercussions. Compliance leaders know the considerable risks of falling short, with 77% saying their business has faced accounting and tax compliance-related issues somewhere in the world during the last five years. These consequences most commonly include reputational damage, internal disciplinary action, and fines. Pivoting from obligation to opportunity Squeezing extra mileage out of good compliance requires businesses to shift their approach from purely tactical to one that sees compliance as a strategic investment. It requires more engagement by top executives to drive real efficiencies, increase opportunities, and become more competitive. It’s an approach not lost on our survey respondents where compliance is seen as a core function of modern businesses, with C-suites devoting more time and attention to proactively managing it. According to the survey, the executive committees and boards engage with compliance at least once a quarter in 75% of businesses, and 39% engage monthly or more. Compliance as a commercial priority featuring more regularly on the calendars of senior leaders is validated by 44% of respondents who say the main reason decision-makers engage is to explore new insights or business opportunities. Only 28% say their senior people primarily focus on compliance to deal with an urgent issue or crisis. So again, we see compliance emerging as a business imperative that drives opportunities and not something seen as low priority or as a reaction to external developments. Reflecting this shift of top management focus is the continued growth of compliance funding, with three in five businesses having increased funding for global compliance over the last year and 68% planning to increase funding in the next five years. Regarding specific funding projects, 73% of respondents predict investment in developing new skills and capacities within teams, while 34% see monitoring external developments in accounting and tax as significant areas for investment. However, the biggest beneficiary of funding will be new technology to achieve compliance goals and drive future improvements, with over 78% of businesses looking to invest in new accounting and tax compliance technology in the next five years and 42% planning a major new investment, according to the survey. This focus on technology is not surprising as 39% of respondents say effective technology is the biggest factor in meeting their compliance goals today. In addition, 45% say new accounting and tax compliance technology will be the most significant factor in the compliance function’s improved performance in five years. Of those who plan to invest in technology, 49% of compliance leaders say artificial intelligence (AI) and machine learning (ML) are their biggest priorities for investment in the next five years. Robotic process automation (RPA) and blockchain are the top priority for 25% and 24%, respectively. Regarding specific compliance function technology-related investments, 38% state that tax compliance will be their priority, while 28% plan to explore the potential of risk management tools. Navigating the challenges ahead Despite this shift to global compliance being viewed as a strategic investment, companies face significant challenges in developing a strategy that takes them to the next level. While 82% of respondents express a high level of confidence in meeting compliance obligations now and in the near future, there is an acknowledgement that the increased complexity of tax rules, new compliance legislation, and the aftermath of COVID-19 will test abilities and compliance functions to the max. According to the survey, some 38% expect the ongoing impacts of the pandemic and increased complexity of compliance to be the two toughest challenges ahead. Meanwhile, 36% expect new legislation in the countries they already operate in to be one of their biggest challenges and 35% cite expansion into new countries. Political disruptions such as those connected to Brexit are also a factor, but are seen as a less likely disruptor with only 23% of respondents citing it as one of their most pressing challenges. Challenges compliance leaders expect to face In contrast, COVID-19 has raised new global challenges with over 75% of compliance leaders saying it has had an impact. The biggest challenge here is remote working, with 52% of respondents citing moving to home environments for work, particularly when in a different country to their employer’s location, has increased compliance needs, adding more pressure on the tax and accounting compliance functions. There is also an acceptance that new legislation and standards are leading to stricter compliance. Over the last few years, compliance reporting obligations not only doubled and sometimes tripled in size, but changes have been complex and fast-moving. As well as seeking the help of experts, the survey highlights that, as discussed above, businesses are investing in technology to leverage compliance functions and meet the need for real-time reporting obligations. While these are welcome improvements, the rise in cybercrime presents an additional risk that needs to be factored in when introducing any technology. Nor are automated and integrated compliance tools risk-free. Machines and algorithms are only as good as the information they are fed. Lack of knowledge remains a significant challenge in meeting compliance obligations, with 42% of respondents citing the need to develop the knowledge and skills of their compliance teams. The combination of skills shortages and the introduction of new technology can often add a new and unexpected layer of risk to the compliance function. Pockets of success lead the way forward The study does, however, highlight pockets of success in navigating the challenges of global compliance. COVID-19, for example, is seen as having a positive impact on individual employees by giving them more flexibility and forcing compliance leaders to become more vigilant. Additionally, while not a new phenomenon, more companies have begun to surpass legislative requirements on tax transparency. Over two-thirds of organisations (70%) voluntarily publish more than the law requires, 45% choose to publish some extra information, while a quarter publishes extensive, detailed information well above what is required by law. Tax transparency is now seen as a microcosm of the broader compliance story. Over one-third (36%) of compliance leaders cite building trust with tax authorities, politicians, and regulators as a key benefit of publishing extra information about the taxes their business pays. Plus, a third say improving their organisation’s public reputation is a crucial benefit of enhanced tax transparency. A further measure we see implemented by businesses that goes above and beyond is the inclusion of compliance strategies in annual reports. This sends a strong message to regulators and clients that can help improve company reputations. Looking ahead, we can expect tax transparency to evolve and measures like publicly available country-by-country reporting to become the norm. While large multinationals are likely to take the lead, tax transparency appears high on the agenda of all businesses irrespective of size and location, according to the survey. The global findings demonstrate that compliance professionals are also aware of the future direction of travel. Compliance-related demands on businesses will increase, leading to the dedication of more resources to meet compliance goals. At the same time, over half of businesses expect meeting compliance requirements to be more challenging in the future. Next steps In terms of the next steps, businesses should review and refresh their organisational setup and compliance functions to adapt to changing circumstances. This will include focusing on regulation as well as management processes to reduce risk and seize opportunities. Anticipating new laws and having the ability to react is vital. In particular, firms must understand their limitations to mitigate the risks linked to compliance. Nurturing agility will allow leaders to anticipate changes so their teams can keep up with global compliance rather than being hindered by it. The return on compliance investment may often be indirect and hard-won, but it should never be underestimated given its importance to growing businesses. Technology can also help companies with global compliance, but the development of skills and knowledge has to be addressed simultaneously. Using internal and external expertise to find the right balance between humans and technology is essential. With over a third of international respondents citing a more complex global compliance landscape as a significant challenge over the next five years, it’s clear that increased complexity will be a feature for years to come. As a result, businesses planning to expand globally will need to be secure in their ability to comply with employment, taxation, payroll, and company legislation in other jurisdictions. As the study demonstrates, when global compliance is done well, it builds investor confidence, increases client and customer trust, and shapes a positive reputation with the outside world. Shifting compliance from an obligation to an opportunity is something all businesses should now explore. Mairéad Divilly is Lead Partner, Outsourcing and Compliance Services, at Mazars Ireland.

Dr Brian Keegan explains why less is often more when it comes to the written word, despite the innate tendency to elaborate rather than edit. The first draft standard from the International Sustainability Standards Board (ISSB) was published last month. Dealing with climate, it runs to a mere 39 pages. But then you have to add on the appendices, which run to well over 500 pages. Even though it is still in draft, that’s a lot of material for people to get their heads around. There will be changes before it is finalised, and I wouldn’t bet that those changes will make it shorter. James Joyce rarely cut sentences when he edited his own work; he just added more words. Many of us subscribe to the Joycean approach. The business and regulatory environment has undoubtedly become more complex. That has a bearing on the volume of information we need to process, but it is not the only reason. Annual reports are growing in length; witness the growth in the size of the published accounts the Leinster Society considers and awards each year. Senior figures in the profession are now predicting the emergence of a more narrative form of assurance on corporate results. More reporting reflects business complexity and stakeholder expectations, of which the new ISSB draft standard is a paradigm example. Much of what we write shows a desire to be seen to have written rather than showing that we want to be read. We may literally be the authors of our own misfortune. Copy and paste functions aid and abet the blossoming of word counts. In this age of email and social media, it is trivial to point out that it is easier to send than to receive; it is certainly quicker. By tolerating this growth, we all do ourselves a disservice. One distinguished senior member and non-executive director put it succinctly to me earlier in the year, as he glumly surveyed yet another multi-volume set of board materials. The bigger the pile of papers, the more it suggested to him that the board didn’t trust management, that management didn’t trust the board, and that everyone assumed that everyone else had too much time on their hands. Even if none of that was true, it would be hard to disprove given the evidence. The tide may be turning, at least in some quarters. Many websites and journals now advertise the length of time it will take to read an article. This tactic is not without its risks either, as it insults fast readers and panics slow ones. Yet, we communicate best when the reader is minded to hear what we have to say. An assurance that the communication won’t take up too much of their time is a good way of getting an audience onside. The French philosopher, Blaise Pascal, is credited with first making the excuse for something he wrote being too long – because he had no time to make it shorter. Time cutting the verbiage is time well spent; the reader is much more likely to hear the message, but it’s not easy. We need to stop hiding behind executive summaries and elevator pitches and instead manage better what we write in the first place. I propose to lead by example. This column is supposed to be 600 words long, but it will be a little shorter this month. I hope the editor is okay with that. I hope you are too. Dr Brian Keegan is Director of Advocacy and Voice at Chartered Accountants Ireland.

In Irish tax developments Revenue is issuing ROS notifications to employers about EWSS payments and PRSI credits made in error between 18 and 28 October, and 10,000 more Form 11s were filed on the November 2021 income tax deadline compared to last year. On the UK front, HMRC has published updated guidance on the tax treatment of COVID-19 supports and tax administration and maintenance day is due to take place next week. While in international news, OECD and Eurasian officials discuss the BEPS Inclusive Framework. Ireland Revenue will issue ROS notifications to employers who claimed Employment Wage Subsidy Scheme (EWSS) payments and PRSI credits in error between 18 and 28 October. Revenue is also in the process of deregistering another cohort of employers not actively claiming EWSS. Revenue told Chartered Accountants Ireland that the number of Form 11 returns filed for 2020 is 560,267 which is 10,000 higher than last year. Revenue is processing requests from 137 tax agents seeking extensions for approximately 3,400 clients under Revenue’s exceptional circumstance facility. UK                 Read HMRC’s updated guidance on the tax treatment of COVID-19 supports. Tax administration and maintenance day is due to take place next week. International Eurasian Countries recently discussed the development and monitoring of international tax standards with the OECD. Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount.

Updated 28 February 2022 to include the response from chartered Accountants Ireland.  Corporate reporting by listed companies is the bedrock of capital markets as it gives investors the essential information they need to make sound investment decisions such as information about the financial situation of companies. Moreover, it enables stakeholders to hold companies accountable on, for instance, sustainability issues. The quality and reliability of public reporting by listed companies rely on three main mutually reinforcing pillars: (i) corporate governance in these companies; (ii) statutory audit; and (iii) supervision and enforcement by public authorities. Several recent failures of companies in Europe (e.g. Wirecard, Carillion) suggest that the three pillars that underpin the quality and reliability of corporate reporting by listed companies have not fully played their intended role. European Commission has initiated a broad review on the three core pillars of corporate reporting for large companies. This review will directly feed into an impact assessment that the Commission will prepare in 2022 with a view to: assessing problems with the quality of corporate reporting; and comparing possible options to remedy these problems. Five-part consultation The consultation is divided into five parts seeking views about the overall impact of the existing EU framework for the three pillars of high-quality and reliable corporate reporting: corporate governance, statutory audit and supervision. It also seeks views about the interaction between the three pillars: The first part seeks views about the overall impact of the EU framework on the three pillars of high quality and reliable corporate reporting - corporate governance, statutory audit and supervision. It also seeks views about the interaction between the three pillars. The second part of the questionnaire focuses on the corporate governance pillar, as far as relevant for corporate reporting. It aims to get your feedback in particular on the functioning of company boards, audit committees and your views on how to improve their functioning. The third part focuses on the statutory audit pillar. The first questions in this part aim at getting views on the effectiveness, efficiency and coherence of the EU audit framework. It focuses in particular on the changes brought by the 2014 audit reform. Subsequently, the questions aim to seek views on how to improve the functioning of statutory audit. The fourth part asks questions about the supervision of PIE statutory auditors and audit firms. Finally, the consultation will ask questions about the supervision of corporate reporting and how to improve it This consultation, which runs until 4 February 2022, will directly feed into an impact assessment that the Commission will prepare in 2022 with a view to possibly amend and strengthen the current EU rules. What the Institute is doing A working party from the Institute's committees will be reviewing the consultation, debating the issues and submitting a consultation.  We welcome comments from members interested in the project. Please send any comments to us via email. UPDATE: You can read the Institute's response here.  The three pillars of corporate reporting Corporate governance The consultation questionnaire seeks feedback on the effectiveness, efficiency and coherence of key features of the EU corporate governance framework relevant to corporate reporting. These include board responsibilities for reporting; internal control, fraud prevention obligation to establish an audit committee. Statutory audit The bulk of the consultation document is centred on audit, in particular the impact of the changes brought about by the 2014 EU audit reform package, focused on public interest entities (PIEs). The Commission’s last market monitoring report issued earlier this year had already revealed a number of deficiencies with audit quality (based also on inspection reports) and divergent use of the country options allowed under EU audit rules. General questions are raised on independence, firm rotation, the content of the audit and audit reporting, the provision of non-audit services, transparency rules and the internal governance of firms. Specific questions also ask for feedback on whether joint audits for PIEs should be incentivised or mandated; whether caps on auditor liability should be increased or removed; and whether a passporting system should be established to ease the cross-border provision of audit services.  Supervision Reflecting a number of concerns with the supervision of corporate reporting – the third pillar of the consultation document – feedback is also sought on deficiencies in the EU’s supervisory framework. These address the roles and responsibilities of national authorities, the exchange of information between authorities, the need for greater enforcement powers, as well as the role of the European Securities and Markets Authority. Background High quality and reliable corporate reporting are of key importance for healthy financial markets, business investment and economic growth. The EU corporate reporting framework should ensure that companies publish the right quantity and quality of relevant information allowing investors and other interested stakeholders to assess the company’s performance and governance and to take decisions based on it. High quality reporting is also indispensable for cross-border investments and the development of the capital markets union. In the context of this consultation, corporate reporting comprises the financial statements of companies, their management report that includes the non-financial and corporate governance statements, and sustainability information pursuant to the proposed Corporate Sustainability Reporting Directive. The consultation takes into account the outcomes of the 2018 consultation on the EU framework for public reporting by companies and the 2021 Fitness Check on the EU framework for public reporting by companies. This current consultation focuses on companies listed on EU regulated markets that is a subset of the companies subject to public reporting requirements under EU law. Find out more Commission consultation page and questionnaire ESMA letter to Ms Mairead McGuinness Commissioner in charge of Financial services, financial stability, and Capital Markets Union following Wirecard: Microsoft Word - ESMA32-51-818 Letter to EC on next steps following Wirecard (europa.eu) The European Commission’s second audit market monitoring report which takes stock of changes to the European audit market several years after the implementation of the 2014 audit reform package.