Developments at the United Nation’s 27th climate conference will have far-reaching implications for financial professionals and businesses worldwide. Susan Rossney digs into the details COP27, the international climate summit, concluded on 20 November after two weeks of negotiations. While last year’s COP saw the International Financial Reporting Standards (IFRS) Foundation announce an International Sustainability Standards Board (ISSB), this year had less reporting-specific news.  One headline was the commitment by CDP (formerly the Carbon Disclosure Project) to incorporate ISSB’s IFRS S2 Climate-related Disclosures Standard into its global environmental disclosure platform—another step towards greater comparability and coherence of global standards and reporting. On a macro level, though, COPs have a huge importance for businesses worldwide. ‘COPs’—Conferences of the Parties—are summits attended by the nearly 200 countries which have signed the United Nations Framework Convention on Climate Change (UNFCCC).  At COPs, these countries discuss their existing efforts and future plans to deal with climate change and its effects. Any new agreements made at COP tend to be named after the host city, e.g. the ‘Paris Agreement’ (2015), the ‘Glasgow Climate Pact’ (2021). This year we have the ‘Sharm el-Sheikh Implementation Plan’, named after the Egyptian city in which it took place. This plan set up a new loss and damage fund for vulnerable countries most severely impacted by the effects of unpreventable climate change (floods, drought, desertification, and land loss due to rising sea-levels). The inclusion was a landmark moment in global climate politics as it acknowledged that the world’s richer countries—and biggest carbon emitters—are responsible to the developing world for the harm caused by global warming. How to finance this loss and damage, specifically how finance would be channelled to the developing world, was a dominant and contentious topic at COP27. The scale of the finance required is truly enormous. At least $2 trillion a year will be needed by developing countries to enable them to transition from fossil fuels, invest in renewable energy and other low-carbon technology, and cope with the impacts of extreme weather. The final figure is likely to be multiples of that. Although COPs have been criticised as political talking shops, divorced from the lived experience of most citizens and businesses, they have a considerable impact. Close to 200 countries gathering to debate a global response to climate change keeps alive an issue that affects all citizens, albeit not equally.  It restates the importance of holding global warming to the levels agreed upon at the Paris Agreement—i.e. well below 2°C and preferably 1.5°C above pre-industrial levels (we are currently at 1.1–1.2°C). What is decided at COP filters down to organisations through legislation and policy, like Europe’s ‘Fit for 55’ package, Ireland’s Climate Action Plans and sectoral targets, and through investors’ continued demands for projects that are aligned to climate targets to meet their own portfolio requirements.  Ireland will come under continued pressure from the EU to act on measures such as developing our renewable energy and tackling our carbon emissions. Changes are required across all sectors, and all businesses, including SMEs, will have to make changes. Accountants, as their trusted advisers, will need the knowledge to help businesses adapt and thrive in this new reality.   Susan Rossney is Sustainability Officer at Chartered Accountants Ireland

Moves underway globally to reform the audit process should reduce the likelihood of corporate collapses and internal fraud, writes Paul Kilduff Whenever there is a sudden company collapse, a shocking fraud or a financial scandal, the details make the front pages of the newspapers and news sites, and the shareholders and the public rightly ask: ‘And where was audit?’ Work is presently underway to address this vital question. In the US, the Public Company Accounting Oversight Board (PCAOB) oversees the audits of public companies in order to protect investors. There are quality control standards in place covering personnel, ethics, engagement performance and client acceptance, but the chair of the PCAOB accepts that these are outdated and do not adequately promote audit quality.  The PCAOB’s plan is to close the gaps by updating the rules for how firms should police their audit work. It recently issued its 2022–2026 Strategic Plan for public comment, so these planned developments will take time. In the UK, the Financial Reporting Council (FRC) develops and maintains auditing and assurance standards. The most recent annual report from the FRC on the quality of audit in the UK found that 33 percent of all audits reviewed needed improvement. This was an unacceptably high number of audits, according to the accounting watchdog. Of the 147 audits inspected by the FRC, 41 required ‘further improvements’ and seven needed ‘significant changes’.  The Institute of Internal Auditors believes the FRC findings underline the need for urgent audit reform and robust measures designed to increase audit quality. One solution is to put the FRC audit regulator on a statutory footing with enough new legal powers to do its job effectively. Sadly, the problem of audit quality remains, and it has impacted the work of the auditor for years. High-profile scandals When Nick Leeson single-handedly destroyed Barings Bank, I was an internal audit manager with HSBC in London. My first reaction was one of relief that the calamitous events had not occurred at our bank. My second reaction was one of concern that the bank’s internal audit team and external auditors in Singapore had not discovered the £869 million trading loss hidden by Leeson. Leeson outfoxed audit. When internal audit arrived from the London head office, he met them on the chaotic trading floor of SIMEX, he told them he was very busy, and he avoided the office and all meetings with the auditors. When external audit from a Big 4 firm asked him for a confirmation for a large bogus option trade, Leeson manufactured the confirmation from a page of headed bank notepaper, using scissors, glue, and a photocopier. The audit team was none the wiser as to his deceit. Wirecard AG, a Munich-based electronic payments provider, once valued at €24 billion, went kaput in 2020. The accounts of this listed company included a bank deposit in Singapore of €1.9 billion, which simply did not exist. The Financial Times reported that, instead of obtaining confirmation of the deposit directly from the bank, the auditors relied on documents and screenshots provided by a third-party trustee and by Wirecard staff.  This audit failure happened not once, but at three successive year-ends from 2016 to 2018. I qualified as an ACA many years ago, but even then, obtaining independent confirmation of bank deposits was covered in day one of audit training. The head of the German financial watchdog BaFin was critical of the audit work performed and said the Wirecard scandal was ‘a complete disaster’, adding: ‘It starts with looking at a complete failure of senior management and it goes on to the scores of auditors who couldn’t dig up the truth.’ In the UK, there are recent examples of previously robust companies, which had been audited by leading UK accounting firms, suddenly failing. The demise of retail chain BHS, travel agency Thomas Cook and construction giant Carillion had a major impact on the UK economy, costing the taxpayer millions. The Institute of Internal Auditors believes that stronger governance and audit can help to prevent such collapses occurring in the future, protecting jobs, pensions, investors and incomes. Necessary reform The necessary improvements to audit must deliver on several fronts. The audit profession must ensure that it attracts capable individuals with strong product knowledge, an inquiring mindset, and a character strong enough to deal with any management obstruction.  The improved audit approach must be documented in revised policies and procedures, which must be ingrained in audit work. Quality Assurance functions must be set up or enhanced in firms to ensure standards are met. The cost of implementing these audit reforms must be reasonable to bear, whether the auditor is in an internal audit function, a Big 4 audit firm or a small audit firm with a more limited budget. There is an expectation that audit reform must use all available technology to improve the quality and scope of audit work. In the past, audit sampling may have been acceptable, but with advanced Computer Assisted Audit Techniques (CAATs), 100 percent auditing is the likely optimal solution. Global audit reform must also consider the changing nature of work, and the associated risks. Few auditors thought three years ago that so many employees would now be working on a hybrid basis, relying on remote systems access for client verification, payments processing and other critical tasks.  When reform does arrive, there should be international convergence, so that the audit quality rules in the US, UK and other jurisdictions are consistent and align with international standards, thereby avoiding unnecessary differences and costly duplication that could weaken audit effectiveness.  In the meantime, accountancy bodies are providing new guidance to members.  New guidance  In the UK, the Institute of Accountants in England and Wales recently reported on the significant resources devoted to fraud-related activities within audit firms. It also acknowledged the public perception that auditors can and should be doing much more to deter and detect fraud and to prevent the unexpected failure of large companies due to fraud. It was Lord Justice Lopes who famously summed up the auditor’s duty in the case of Kingston Cotton Mills Co., where the company directors had fraudulently overstated the value of stock, by proclaiming: ‘An auditor is not bound to be a detective. He is a watchdog, but not a bloodhound.’  Lopes opined that the auditor cannot be liable for any wrongdoings they had no reason to suspect were taking place, but that landmark legal judgement was handed down in 1896. The expectation placed on both internal and external auditors is significantly higher today.  The auditor is not specifically expected to search out any fraud or deception in their audit, but if there are warning signs that all is not well, the auditor must investigate these to reach a satisfactory conclusion regarding the audit opinion.  While writing my latest banking book, I researched the case of Joseph Jett, a former bond trader with Kidder Peabody in New York, who created $350 million of phantom trading profits on the bank’s computer systems.  The subsequent post-mortem report stated that the internal auditors learnt that Jett had booked billions of dollars of unusual transactions, but no auditor followed up on this anomaly. The auditor had to explain his work in court, as audit workpapers were produced with hand-written annotations without evidence of action. This is not a situation any auditor would wish to defend.  I also came across Sir Allen Stanford and his Stanford Financial Group, based in Antigua, which was later revealed to be a giant Ponzi scheme. His bank at the time had a value of $8 billion, but it was audited by a small Antiguan audit firm with just ten staff. This should never have been acceptable. When corporate disaster does strike, it is easy to point the finger at the auditor, but this is often unfair. Every auditor comes to work with the intention of doing a good job. The aim of audit reform is to assist and guide the auditor in their work, rather than to make their work more onerous. The global audit reform process is underway, and it must deliver improvements to reduce the likelihood of further high-profile corporate disasters, which damage the reputation of the auditor. In the meantime, the auditor at large would do well to maintain a healthy sense of scepticism.  Paul Kilduff B.Comm FCA is an author and banker, who has worked with HSBC, Bank of Ireland, Bank of America, Barclays and Citibank. His eighth book, Stupid Bankers: The World’s Worst Banking Disasters Revealed, is available exclusively on Amazon UK in paperback and Kindle format

Irish Government finances are in surplus and Ireland’s debt-to-GDP ratio has stabilised, so why are there calls for higher taxes? asks Dr Brian Keegan It’s hard to avoid concern fatigue setting in. What with the war in Ukraine, the cost-of-living crisis, the continued Northern political stalemate, multiple dire warnings amplified at COP27 over climate change and another possible COVID-19 surge—the list of concerns seems particularly endless at the moment.   Some time ago, the commentator Marc Coleman projected that population growth—and, by implication, skills growth—would drive prosperity in Ireland. Coleman’s ideas have been given additional credence by the current situation in the UK. Chancellor Jeremy Hunt’s November budget looks towards an extended period of economic stagnation. British productivity has not grown in line with government spending in recent years. In the moribund British economy, there is a record low level of people out of work while the number of job vacancies is at a record high.   There is a straightforward, one-to-one relationship between economic growth and the growth in tax yield, which permits more government spending without further borrowing. When the growth in gross domestic product (GDP) stalls, so too do the tax figures.   In his book The Best is Yet to Come, Coleman pointed out some of the links between more workers, growth and greater resources for public services and benefits. Though the timing was unfortunate (the book was published just months before the 2008 financial crisis), Ireland is now indeed in a better place, at least economically, than it has been for many years. Government finances are in surplus and the debt-to-GDP ratio, at around 50 percent, is back under control.   Unlike the British situation where a Budget bordering on the austere was required to meet existing public spending commitments, without an intolerably high borrowing requirement, the recent Irish Budget took a cost-of-living crisis in its stride, with grant aid against soaring energy bills for households and businesses alike being met through current tax receipts. Nevertheless, a narrative has emerged that the burden of taxation in Ireland will have to increase.   Why this should be the case is not always specified. There are unquestionably problems with housing, health, and education, but it does not automatically follow that these problems arise from underinvestment. At the time of writing, close to half a billion euros set aside in 2022 for local authority housing remains unspent. This points to management or capacity problems, not funding challenges.   The much-heralded report of the Commission on Taxation and Welfare has not had a huge impact on the political debate. This may be because it presents solutions in search of a problem. As research from the Irish Fiscal Advisory Council has pointed out, “its work was not framed around any specific shortfall in funding that needed to be filled. Instead, it was guided by a broad intention to generate additional revenue”.   Even government politicians, who are rarely scathing about the output of an expert group, which the government itself commissioned, were dismissive of the recommendations. Clearly, there are some areas of the economy where additional tax funding will be required, if not immediately, in the medium-term.   Unless there is an unforeseen level of immigration of people of working age, the ratio of workers to pensioners is going in the wrong direction. Climate change management, ironically being driven more by energy security concerns than global altruism, will come with a price tag. The sustained high corporation tax take may have peaked. In Britain, the urgent need for higher taxation has been unanswerable. In Ireland, there needs to be a clear business case for any form of new or additional taxation. We have enough to be concerned about without the prospect of unnecessary taxes. Dr Brian Keegan is Director of Advocacy and Voice at Chartered Accountants Ireland

Chartered Accountant Eamonn Hughes is playing a leading role in Bank of Ireland’s Responsible and Sustainable Business Strategy. Hughes tells Accountancy Ireland about the four-year plan and his goals as Chief Sustainability and Investor Relations Officer  Before joining Bank of Ireland Group in February as Chief Sustainability and Investor Relations Officer, Chartered Accountant Eamonn Hughes had a longstanding career as a sell-side market analyst with more than 25 years’ experience in capital markets and domestic banking.  Having worked most recently with Goodbody, the stockbroking firm, as Irish Banks and Insurance Sector Analyst and, before that, Head of Research, Hughes also had a clear view of the swift rise in environmental, social and governance (ESG) to the top of the financial agenda worldwide. “I could see that ESG was becoming hugely important in capital markets and the financial sector. The climate crisis, in particular, is a critical threat, but also a significant opportunity,” said Hughes. “For our planet, there is no Plan B, but the discussion about sustainability is not just about climate change. It is also about creating a more sustainable business model. Our vision at Bank of Ireland is to be the national champion in Ireland, to use our balance sheet and resources to drive positive change for a better, fairer society and improve the environment. “This gives me a very strong framework to think about my role, because, if we can deliver on our ESG strategy, we can ultimately deliver a more sustainable business model for all stakeholders and positive returns for investors. “The ESG agenda also involves regulators, so disclosure and risk management are very important—and there are reporting frameworks in place, but they are evolving very quickly. This is one of the challenges we face and is also why transparency and the availability of clear data is so important.  “With my background in capital markets, I can clearly see the mobilisation in capital, and I think the banking sector has a very obvious supporting role to play in society’s sustainability transition.” Investing in tomorrow Bank of Ireland published its Responsible and Sustainable Business Strategy in March 2021, a year before Hughes joined the group.  Bank of Ireland’s four-year Investing in Tomorrow strategy set out its own goals to support the green transition, alongside two additional pillars: enabling colleagues to thrive; and enhancing customers’ financial wellbeing. The Investing in Tomorrow green transition pillar included the setting of science-based targets aligning the bank’s lending portfolios with the Paris Agreement. The international treaty on climate change, adopted in 2015 at COP 21, set out a goal to limit global warming to 1.5 degrees Celsius, compared to pre-industrial levels. “Data is key across all three pillars, because reporting is essentially an output of what we are doing in support of climate change, colleagues, customers and the organisation as a whole,” said Hughes. “We need to focus on how we interact with our stakeholders internally and externally and, in my role, investors are obviously a key priority. As investors now have to produce more disclosures themselves, they will need to engage more with us in terms of what we are doing on our own ESG journey.” Clear reporting strategy How Bank of Ireland communicates with, and reports to, stakeholders on the progress of its ESG strategy is a priority for Hughes in his role as Chief Sustainability and Investor Relations Officer. “Ultimately, we need to explain how we are meeting the targets set out in our strategy, and it is incumbent upon us to develop the capacity and skill sets we need to support reporting and strategy delivery,” he said. “My role is to support in delivering across all three pillars, which involves a lot of data-gathering internally, particularly from a regulatory and reporting perspective.” Detailed progress reports on ESG will now be a core part of Bank of Ireland’s annual reporting cycle. “We need to be able to demonstrate clearly that we are creating a sustainable business strategy, enabling colleagues to thrive in the organisation and enhancing financial well-being among customers, in addition to supporting the sustainable transition,” said Hughes. “Transparency is hugely important. There are a lot of differentials in this space, so we need to standardise our reporting; to be able to explain clearly and cohesively what we are doing and why.” Commercialisation is becoming increasingly important as Bank of Ireland continues to implement Investing in Tomorrow, Hughes said. “Like many banks, we are in the commercialisation phase of our ESG strategy with the creation of sustainable finance solutions for, and increasing engagement with, customers. We are supporting and incentivising customers through competitive rates to buy or build an energy efficient home or to retrofit their home or business to make it more energy efficient.” Sustainable finance fund Bank of Ireland recently announced a €3 billion increase in its Sustainable Finance Fund, which will bring it to €5 billion by 2024. The fund covers green propositions, including mortgages, home improvement loans and business  loans.  Bank of Ireland’s inaugural standalone Responsible and Sustainable Business Report, published in June, tracked the progress of its ESG strategy in 2021. More than €1.8 billion in mortgages, home improvement loans and business loans had been drawn down from the Sustainable Finance Fund by the end of the year, the report stated. Thirty-five percent of all mortgages provided by the bank in 2021 were green, rising to 48 percent in the first half of 2022.  Bank of Ireland was also the largest provider of wholesale finance for electric vehicles in 2021, providing finance to 13 of the 15 car manufacturer franchises. The publication of the Responsible and Sustainable Business Report marked a significant “step-change in the tracking and transparency” of the bank’s ESG reporting, Hughes noted.  “Our stakeholders—including customers, shareholders, and regulators—are demanding far greater transparency as to how we are meeting our ESG commitments,” he said. “This report provides insight into our strategic approach, appraisal of our progress to achieve our purpose, and information on the key focus areas we plan to progress in the years ahead. Being clear on ESG, and showing how you are delivering what you sign up to, is now a commercial imperative for all lenders, including Bank of Ireland.” Science-based targets Bank of Ireland has also committed to setting science-based targets across portfolios and operations to align lending practice with the low carbon ambitions set out in the Paris Agreement. “We completed two successful green bond issuances in 2021, raising €1.25 billion with the capital used to finance green buildings, renewable energy projects and clean transportation,” said Hughes. “Thirty-five per cent of the mortgages we provided in 2021 were green and we have also launched a green mortgage product in the UK.” Bank of Ireland is providing finance for the development of at least 750 megawatts of renewable wind capacity across the island of Ireland. The bank is also in the process of decarbonising its own operations—reducing absolute emissions by 88 percent between 2011 and 2021. Social and governance Although supporting the green agenda is a major part of Investing in Tomorrow, the strategy also sets goals for investing in colleagues and enhancing customers’ financial wellbeing. “We recognise the supporting role we can play in Ireland’s response to the climate crisis, but the ‘S’ and ‘G’ are equally important when we consider ESG,” Hughes said. “We have a strategy to improve the financial wellbeing of our customers and to foster a financially inclusive society.” Bank of Ireland was, Hughes said, supporting customers to become more financially confident, while also working to simplify processes, so that the “financially marginalised have easier access to banking services.” Financial health and inclusion  Bank of Ireland is one of 28 banks around the world that have signed the Commitment to Financial Health and Inclusion published in December 2021 under the United Nations Principles for Responsible Banking (PRB). A first-of-its-kind initiative aimed at promoting universal financial inclusion and health in the banking sector, its launch closely followed the publication of the UN’s PRB Collective Progress Report. The report identified financial inclusion as the third most pressing sustainability challenge facing signatory banks, behind climate mitigation and adaptation. “This UN initiative is particularly important in an environment in which we have a cost-of-living crisis and customers are facing major challenges in the medium- to long-term. The question for us is, ‘how can we deliver this particular skill set and support our customers at a time when they really need it?’” said Hughes. Bank of Ireland is also helping customers to “live more sustainably” with the recent announcement of the roll out of bio-sourced debit and credit cards. Launched in October, the initiative will over time replace all plastic debit and credit cards issued by the bank, to help support the reduction of single-use plastic. “If we are to live in a more sustainable way, we need to do things differently, including through our everyday banking. The introduction of bio-sourced cards is a very practical way we can help our customers to reduce their environmental footprint,” Hughes said. “As a bank, we are working very closely with our customers on the sustainability transition. As they deliver, we deliver. It is a symbiotic relationship and an exciting place to be.”  

Martin Moloney, Secretary General of the International Organisation of Securities Commissions, outlines his priorities for the year ahead Irishman Martin Moloney is Secretary General of the International Organisation of Securities Commissions (IOSCO). Headquartered in Madrid, Spain, the international body brings together the world’s securities regulators and is recognised as the standard setter for the securities sector worldwide. IOSCO develops, implements, and promotes adherence to internationally recognised standards for securities regulation, working closely with the G20 and the Financial Stability Board (FSB) on global regulatory reform. Accountancy Ireland sat down with Moloney to discuss his goals, priorities, and concerns for the year ahead. Q: What are the biggest risks facing investors around the world right now and how is IOSCO working with securities regulatory agencies to address these risks? The risks that investors face never really change. There are some fundamentals. You can hire the wrong advisers, you can pay them too much, you can choose the wrong times to get in or out of markets, and you can invest in the wrong things. These risks are the core risks for investors, and they have been for as long as financial markets have existed. The difficulty is that financial markets are constantly changing. New asset classes like crypto are emerging, and there are new ways in which intermediaries work on your behalf, but also earn fees for themselves. This creates new risks for investors. Also, as we saw from recent events in the UK, markets can go into sudden periods of stress and crash. We do our best, working with others, to try to make markets as resilient as they can be, to ensure that these episodes are few and far between insofar as we can. These are the big issues facing us currently. Really, it all comes down to integrity—being able to trust the price you see when you invest in the markets and ensuring that you are not being fooled by people who are trying to cheat you out of your money. Q: You have described the rise of cryptocurrency as an area fraught with risk, requiring “a lot of work” on the part of regulators. Can you tell us more? There is no doubt in my mind that we have reached a turning point in relation to crypto. This is not because of the so-called ‘Crypto Winter’. The value of crypto might go up or down, but that is not really the issue. The point that we all have to observe and recognise is that crypto has survived and has continued to survive over a number of years. It is reasonable to assume that it is not going away and, therefore, it has to be regulated. I am delighted to say that, since I have joined IOSCO, the organisation has moved forward with its policy in this area and is now very quickly developing a set of guidelines for the market on how different jurisdictions should regulate crypto and the common standards they should aim to achieve in doing so. We are seeing a number of regions, notably the United States and Europe, now moving towards developing legal frameworks. I have no doubt that this is far from the end of the matter, however—it is just the beginning. Crypto is going to evolve and change as people get on top of the technology and new opportunities emerge. The most important thing we must all keep an eye on here is the outcome for the investor. In the first years of crypto, a huge number of people lost money through fraud. Other people, who may not even have been aware of it, lost money through market manipulation, insider trading and various other dubious activities we know well. Very often, this has been driven by conflicts of interest. If you dig down into the principles articulated by IOSCO for financial markets many years ago, you will find us warning against many of the phenomena we are now seeing in crypto markets. Theft does not change. It might happen in a different location, but theft is still theft. Bad management is still bad management, no matter where it happens. It is up to us to re-articulate these very simple, but really important, ideas and explain how they can apply in the crypto space. It is also important for the crypto sector itself to come up with good solutions and technologically enabled solutions, so that its work can be supervised and that it can reach the same standard of regulation as the rest of the financial sector. There are a number of individuals, I think, within the crypto sector who have come to understand that they need to move positively towards a strong regulatory framework in order to bottom out their businesses and remain stable. If we do not start to see self-regulation within the crypto sector, then I think we will see more jurisdictions banning crypto. It is just not sustainable over the medium term to try to avoid the regulatory frameworks that apply to everyone else. It is one thing to see yourself as a different asset class. It’s quite another to see yourself as an entirely different industry when you are effectively doing the same thing. Q: So, you do believe that cryptocurrency has a long-term future provided that there is robust regulation in place across the board? I think there is some potential for this asset class, but it is going to become more challenging. I don’t have a crystal ball, so I try not to predict the future. I see some very interesting new products developing in the decentralised finance space, and I wonder if this is ultimately where crypto is going to go. We are all used to a simple model in which you get quite non-functional assets like Bitcoin being traded and people making money primarily out of the bubbles in Bitcoin. The use cases for crypto continue to be worked on extensively, however. So, every time you have one of those bubbles, what is actually happening is that money is being raised to allow people to invest in new potential use cases. There are now so many use cases that have come and gone, and failed ideas that have been touted and promoted, you could be forgiven for thinking that there are no use cases left for crypto—but that is probably wrong. I think people will continue trying to figure out good use cases for crypto. I don’t think it’s going away any time soon. Q: You have spoken recently about the greenwashing risk facing securities regulators—what can be done to address this? We put out a couple of reports in 2021 where we looked at the greenwashing issue in great detail, listing the different ways in which this phenomenon occurs. We had to acknowledge, however, that it is not just about ‘evil intent’. Activity that might be described as greenwashing often happens, because the market structures needed to adequately support sustainable finance are not yet in place. Sometimes, you do get people who are frankly trying to fool investors by issuing misleading information, but, equally, the markets as they stand are just not built for sustainable financing. Having identified the problem and having asked the industry to work as hard as possible to reduce the amount of greenwashing that now exists, we have had to acknowledge that the system itself needs to change. Regulators have to do it, governments have to do it, standard-setters have to do it—to create a better system to achieve true sustainable finance. If, for example, I am proposing an investment that has a strong impact in terms of reducing carbon emissions, I should get a better price on the market and a better investment price for that security than someone who comes to market with a security for a carbon-emitting project. We want the market to be sensitive to the environmental impact of different proposals, companies and products. They must have access to information that is reliable; that has been independently audited; and that brokers can bring together to compare stocks from different parts of the world and determine differential pricing based on their impact on the environment. Getting all of this right would be an incredibly hard job, so we have broken the job down into a number of elements. We will be progressively working on putting these building blocks in place over the next couple of years, in order to make sure that the process can be regulated and that people who don’t do the right thing can be held to account on the basis that they could have done the right thing and chose not to. Q: As the move to establish standards for environmental, social and governance (ESG) reporting gathers pace, what is your take on the current efforts underway? We have a very close relationship with the International Sustainability Standards Board (ISSB). We effectively oversee its work and, if we like what it is doing, we will endorse its standards, and recommend those standards to individual regulatory securities agencies around the world, so that these jurisdictions can adopt the standards as they see fit. The fundamental issue we are all facing is that a sustainable financial marketplace has to be a global marketplace. If you have fragmentation and you don’t have the same information sets available in different parts of the world, you cannot have a true comparison between different securities, and capital cannot flow to the best projects. It is no good for anyone if Europe is pristine, while the rest of the world is working in a different way. What happens in the Amazonian rainforest matters to all of us. Capital, therefore, has to flow from those places where it is abundant, such as Europe and North America, to locations in which the opportunities exist to do the right thing. What IOSCO has said to the countries we work with around the world is, “do this any way you want, but use the ISSB standards as a baseline and build your own approach on that foundation”. Put simply, you can do all you want in the ESG space, but unless we have a common core, we cannot create a global financial market that will bring about any real change. Q: Can you tell us about the work you are doing with the Financial Stability Board in relation to investment funds? This is a very big project for us. Investment funds are a crucial mechanism all around the world for people to get access to markets on a collective basis, but they can have a concerning impact on markets in periods of crisis. We have been doing work in this area since 2016. We have done a lot already, but there is more to do. A major focus for us next year will be trying to make sure that the kind of funds both ordinary individual investors and the more risk-averse institutional investors choose are safe in a crisis. We are trying to ensure that, if you are investing in a product that is riskier, it will be clear to you that it is more difficult to get your money out of it; that these kinds of investment funds are not the equivalent of a bank account. This is a typical example of what we do, but there are lots of others. We do a lot of work on cyber-resilience, and we are also very interested in the change in the behaviour of retail investors and their vulnerability to scams. One of the problems we face at the moment is that, while technology has made it easy or cheap for people to invest in the markets, it has also made it easy or cheap for fraudsters to get at many thousands of people. We need to figure out better and better ways to stop these fraudsters and prevent them in their designs. About Martin Moloney Prior to joining IOSCO as Secretary General in September 2021, Martin Moloney was Director General of the Jersey Financial Services Commission and, before that, he worked as a Special Adviser on Risk and Regulation to the Central Bank of Ireland, where he served for 16 years, previously heading up the Markets Policy, Markets Supervision, and Legal and Finance Divisions. Moloney began his early career working in industry with Barclays Bank and Bank of Ireland in London, before returning to Ireland to work with the Department of Justice, Department of Finance, the Irish Competition Authority. Born in Dublin, he has a master’s degrees in Business Law and Economic Policy, both from Trinity College Dublin.

Elaine Coughlan, one of Ireland’s most successful venture capital investors, tells us how her experience in accountancy and audit led to a high-flying career in technology Since qualifying as a Chartered Accountant and cutting her teeth in audit in the 1990s, just as the first wave of tech entrepreneurs in Ireland were beginning to access US capital markets, Elaine Coughlan has carved out an illustrious career in venture capital. Dublin-born Coughlan is the co-founder and joint Managing Partner of Atlantic Bridge, the global growth technology fund with more than €1 billion in assets under management across nine funds. For Coughlan, her career is a testament to both her training in finance and the power of human connection in business the world over. “Atlantic Bridge has over 35 companies we have successfully sold or ‘IPOed’ and I am immensely proud of that,” she says. “The wins drive you on because you can see what’s possible and those Irish entrepreneurs become role models for the next generation. I’m proud of the assets we have under management, and that Atlantic Bridge now has people in Dublin, London, Paris, Munich and Palo Alto in Silicon Valley. That is a truly global footprint, and it really helps us to scale our companies.” Early connections Coughlan credits the professional connections she made at an early stage in her career at Ernst & Young with setting her on the path to professional success. “Some of the people I met back in the nineties, our clients at the time, were hugely influential on me,” she says. Among those clients was Smurfit (now Smurfit Kappa), already a long-established industry leader in paper packaging production. “I was seconded from Ernst & Young to work with Smurfit when it was probably the number one Irish company in terms of market capitalisation and really blazing a trail in Irish business,” she says. “It is still a phenomenal company today, but for me at that time, Smurfit was just so ambitious and far-reaching in its approach to mergers and acquisitions, and the capital markets. I worked on fundraising and acquisitions with them and had early exposure to some of their senior executives—people like Gerry Fagan, their then-CFO.” Coughlan forged other crucial connections at the time with Bill McCabe, founder of CBT, the e-learning group, and Iona Technologies’ Chris Horn. “Bill and Chris were the first entrepreneurs in Ireland to float tech companies on the Nasdaq and, if you look at what they had in common with Smurfit, it was really that they were all entrepreneurial,” she says now. Coughlan would leave Ernst & Young to join Iona ahead of the company’s Initial Public Offering. “I knew then that practice probably wasn’t for me. That’s not to say that you can’t be entrepreneurial in practice, but the cut and thrust of the tech business pulled me in,” she says. “I remember traveling over to the US with CBT back in 1993 and that was it for me. There was such a sense of possibility.” Coughlan went on to join Parthus, the semiconductor IP company co-founded by Brian Long, and the pair formed an abiding partnership, co-founding both Atlantic Bridge and GloNav, the GPS company acquired in 2007 for $110 million. “All these years later, I am still in business with the same people, and they were the people that had an impact on me starting out. They were the people I learned from and the people who were generous with their time and their knowledge, and willing to give me experience and opportunities,” she says. For young Chartered Accountants starting out in their career, Coughlan has this advice: “Above all else, nurture your connections. These young professionals will already be well-qualified and proven in their ability and resilience, because training to become a Chartered Accountant is challenging in itself,” she says. “The question they have to ask themselves is ‘what differentiates me beyond that?’ It comes down to being able to combine your knowledge with strong relationships in ways that bring about better outcomes.” As Coughlan sees it, building solid sustainable relationships in business isn’t simply a case of networking and ‘transactional interactions’. “It’s about finding people who share your values and ethics, whose accomplishments and abilities you admire, and who have the ability to lead and inspire. You always have to be thinking long-term, not just about your next connection on LinkedIn,” she says. Supporting start-ups Coughlan’s commitment to supporting start-ups and advancing Ireland as a leading hub for technology development was recognised at this year’s Irish Accountancy Awards, at which she won the prize for outstanding contribution to the profession. “When we started Atlantic Bridge in 2004, we wanted to help tech companies in Ireland to scale successfully. Ireland is a small island and a small economy, so there are two things tech companies here need to scale—they need to move beyond the island to reach customers and they need access to capital,” she says. “We wanted to cross the Atlantic to the US, because it is the largest market in the world in terms of customers and capital markets. At the time, Ireland had a VC market of less than €100 million. It’s 10 times that size now, but back then, it was really small.” The primary focus for Atlantic Bridge today continues to be “deep tech” innovators in the business-to-business (B2B) space. “We’re not after instant gratification or overnight success. These are businesses with defensible research-intensive technologies that are primed to scale when the time is right,” says Coughlan. “Our investors are patient. They are looking for strong long-term returns, and we are very proud to have reached the stage where we have raised nine funds, because that is not an easy thing to do in this industry.” Coughlan warns, however, that we are entering a “new investment cycle”, in which surging inflation, rising interest rates, and the risk of recession, are all making investors more risk averse. “The outlook for Atlantic Bridge in the short-term will be cautious and tactical, but beyond that, we are optimistic and deeply committed to the technology trends we are seeing today that will make a difference in the future,” she says. “A lot of the technologies we’re investing in now are in climate change action—low-power, low-carbon enablers—and in medical technology and the digitisation of health, where we can meet unmet needs. We’re focusing on technologies like Artificial Intelligence and semiconductors—the fundamental building blocks that will be built into new products over the next three to five years.” Research and development As the economy enters uncertain terrain, Coughlan is urging the Government to continue investing in research and development (R&D). “Ireland has to continue to invest in R&D. We need to hold our nerve in continuing to invest in the best and brightest people and start-ups, because they will drive the next generation of growth,” she says. “Today, we are investing about 1.25 percent of GDP in R&D. We need to get that up to between 2.5 percent and three percent. The future economy will be knowledge-intensive and that requires knowledge-intensive people.” Coughlan is equally committed to the advancement of her profession, and proud of her own achievements as a Chartered Accountant. “The ‘bean counter’ perception is one too many people have of accountants, but I would probably be the last person you’d ask to do a P&L statement,” she says. “I can tell you if it is right or wrong though, because I understand the numbers and what they mean. I can interrogate and interpret any set of numbers and that is because I am a Chartered Accountant. All business now is run on data and our profession gives us a really strong grounding in using data to make decisions—and that is the future. “There are doors that are opened to you when you train as an accountant. You learn about process, structure, deadlines, and relationships. All of these skills are incredibly important. “You come out of it battle-hardened and resilient, and with all these options: to stay in practice; to focus on technical work; to go into consultancy; financial services; or business and entrepreneurship. The opportunities are phenomenal.” Growing up in Beaumont in north Dublin in the recession-hit 1980s, however, Coughlan had envisaged a different career for herself. It was a chance encounter that set her on the path to accountancy and a high-flying career in venture capital. Early career path “I was good at numbers at school and I studied accountancy for the Leaving Cert, but I wouldn’t say I was destined to be an accountant. I fully recognise now that it was my accountancy and audit experience that led me into the technology industry, but my real interest growing up was people,” she says. “I wanted to work in a people-focused environment, so I applied to study marketing and languages at DCU and went for a summer job at a small accountancy firm to keep me going in the meantime.” Coughlan didn’t get the summer job, but she was contacted by her interviewer and urged instead to consider accountancy as a full-time career. “It was 1989, unemployment in Ireland was something like 15 percent and so many people were emigrating to find work in the UK and the US,” she says. “I didn’t know anything about becoming a Chartered Accountant, but I wrote to the Institute and was offered a training contract with Ernst & Young. Here was this opportunity to have my fees paid and earn a wage with guaranteed work in a really tough economy. It was a great deal. That’s why I always say to this day, ‘what’s meant for you won’t pass you by’.”

Welcome to this week’s Technical Roundup. In developments this week, the European Financial Reporting Advisory Group have issued reports about feedback received from participants during three roundtables held on the International Accounting Standards Board’s tentative decisions to change the Exposure Draft General Presentation and Disclosures; the UK Financial Intelligence Unit, part of the National Crime Agency, has issued its latest Suspicious Activity Reports (SARs) Reporter Booklet highlighting how law enforcement agencies are utilising SAR intelligence to initiate investigations and inform new ones. Read more on these and other developments that may be of interest to members below. Auditing The FRC has published a policy paper that outlines the regulator’s approach to competition in the audit market.    The paper sets out the need for a market that consistently delivers high quality audit and is resilient. It makes clear the need for the package of measures proposed by the Government in its response to the consultation on Restoring Trust in Audit and Corporate Governance.  It also looks at recent developments in the market that suggest that increased competition and choice has more recently tailed off, and that more entities tendering for an auditor are struggling to identify firms willing to bid. The top four audit firms still dominate the market, resulting in limited choices for businesses and ongoing concerns about resilience.  The paper sets out how the FRC is seeking to progress the Government's seven competition policy proposals, and how it proposes to deliver on the operational objective for ARGA to promote effective competition in the market for statutory audit.  The FRC has already started to address issues in the market through measures such as operational separation and its recently published draft standard for audit committees. However, legislation is needed to make a significant difference by providing ARGA the powers to implement all seven proposals.   Financial Reporting The European Financial Reporting Advisory Group (EFRAG) have issued reports about feedback received from participants during three roundtables held on the International Accounting Standards Board’s (IASB) tentative decisions to change the Exposure Draft General Presentation and Disclosures. The purpose of these roundtables is to assess whether some of the tentative decisions made by the IASB will function as intended and achieve an appropriate balance of cost and benefit. The IASB has voted to retain an impairment-only approach for goodwill accounting. The IASB will next consider whether to publish these proposals in an exposure draft. The IASB has proposed accelerated narrow-scope amendments  to IAS 12 Income Taxes. This proposes a temporary exception from accounting for deferred taxes arising from the OECD Pillar Two model rules for domestic implementation of a 15% global minimum rate of corporate tax as well as targeted disclosure requirements for affected companies. The IASB expects to publish an exposure draft in January 2023 in relation to this. The IASB has issued its November 2022 update which highlights preliminary decisions made at its meeting on 22-24 November. IFAC has issued a new report with insights from its Professional Accountancy Organisation Development and Advisory Group. This discusses how professional accountancy organisations can act today to prepare their current and future members to seize opportunities in emerging trends. The trends discussed include sustainability-related reporting, anti-corruption efforts, sound public financial management and technological change Insolvency Earlier this week, the Institute held a webinar on SCARP - what we know so far on with guest speakers Des Gibney of McStay Luby and Hilary Larkin of Mazars. The webinar discussed the SCARP process, how to prepare for it, what to look out for and key matters to be aware of when considering it. It explored some practical issues including how SCARP is working in practice, dealing with creditors and what your balance sheet may look like before entering the process versus afterwards. A recording of the webinar is available here. The UK Government has recently issued its Statutory Debt Repayment Plan Consultation response which received over 80 responses and raised significant challenges and concerns, relating to both the design of the statutory debt repayment plan (SDRP) and the timing of its implementation. The government has decided not to progress regulation at the moment and will base further decisions on the future of the SDRP on the outcomes of the government’s review of the personal insolvency framework, led by the Insolvency Service. You can read the government’s webpage information here and access the consultation response here. Anti-money laundering The UK FIU, part of the National Crime Agency has issued its latest Suspicious Activity Reports (SARs) Reporter Booklet highlighting how law enforcement agencies are utilising SAR intelligence to initiate investigations and inform new ones. The booklet contains case studies and gives a sanitised summary of feedback from law enforcement agencies on their use of SARs and includes pertinent information and updates from the UKFIU. You can access a copy of the booklet here . Sustainability The Council of the EU has given its final approval to the Corporate Sustainability Reporting Directive (CSRD). This will replace the current Non - Financial Reporting Directive (NFRD) when it is adopted. The CSRD will for the first time put financial and sustainability reporting on an equal footing and will require companies in scope to report on sustainability matters such as environmental rights, social rights, governance factors and human rights. These in scope companies will be required to disclose information on the impact on society and the environment connected with their own operations and with their value chain. Read more about it here. Accountancy Europe have also published a very informative FAQ document which gives a good overview of the directive. Crypto news The Deputy Governor of the Bank of England recently gave an interesting speech entitled “Reflections on DeFi [which is decentralised finance, an umbrella term for financial services on public blockchains], digital currencies and regulation”. In it he referenced the recent crypto turbulence. He said unbacked crypto assets are highly volatile, given that they have no intrinsic value. While crypto was born in unregulated space in recent years it has broadened to encompass a range of financial services. The experience of the past year has demonstrated that it is not a stable ecosystem and is very prone to the risks that regulation in the conventional financial sector is designed to avoid. He still advocates nonetheless to continue to bring these activities and entities within regulation to protect consumers and investors, protect financial stability and to foster innovation. Other parts of his speech reference several consultations next year and their work on the issuance by the Bank of England of a digitally native pound sterling. You can read the full speech here. Meanwhile the Chief Operating Officer and Executive Director of Authorisations of the UK Financial Conduct Authority (FCA) spoke recently on matters including crypto and its regulation.  At present, the FCA’s role is largely limited to making sure that crypto firms that want to register in the UK are abiding by anti-money laundering rules. She said that the FCA found that only 5% of Crypto applications received were of high quality and could demonstrate that they understood the Money Laundering Regulations (MLRs) and how they would meet these. A further 30% needed material extra work. The FCA engaged with the firms to address concerns about capability, business models and controls. Almost half were subsequently registered. The remaining 65% of applications were very poor, and none of the firms were registered. Many could not explain how the MLRs would be satisfied in the business model proposed – some of them even struggled to explain their business models. You can read her speech including the comments on the Crypto sector here. Other news Readers may be interested in the Irish Government’s recent agreement to extend the mandate of Local Enterprise Offices (LEOs). They can now go further in helping local job creation by allowing them to provide direct grants to businesses with more than 10 employees operating in the manufacturing and internationally traded services sectors. They are also putting in place the structures to enable a seamless transition from LEO to Enterprise Ireland. The press release says, “The strategy also commits Enterprise Ireland to working with the LEOs, to ensure that companies of all sizes are assisted on their development journey, maximising their growth and job creation potential”. You can read all the details here. Readers will know that the Irish Charities Regulator recently held its Charity Trustees Week (14-18 November 2022). There are a number of interesting webinar recordings now available on their website: “Money Laundering and Terrorist Financing”, “the Charites Governance Code in Practice “and “an Introduction to Classification”. Click here to go their webpage from where the webinars can be accessed. Access to the Registry of Beneficial Ownership for Companies (RBO) has been suspended following a recent judgment by the European Court of Justice. The RBO is working on providing access for designated persons. Please see more here.  Readers may find useful a new free data protection guide for NGOs which McCann FitzGerald LLP solicitors recently launched in association with Public Interest Law Alliance (PILA). The guide, which was developed by McCann FitzGerald’s data protection team, provides an overview of data protection law and its application to the charity / not-for-profit sector. You can read more about it and follow a link to download a copy of the guide on the PILA webpage here. Readers might be aware of a new Consumer Rights Act which was passed by the Irish government this year. It was commenced recently and you can find out more about it on the Competition and Consumer Protection Commission website. For further technical information and updates please visit the Technical Hub on the Institute website. 

Roundup 25 November 2022 Welcome to this week’s Technical Roundup. In developments this week, the European Financial Reporting Advisory Group has announced that it has delivered the first set of draft European Sustainability Reporting Standards (ESRS) to the European Commission. These standards were approved at EFRAG’s meeting on 15 November. The International Sustainability Standards Board have issued their November 2022 update and this includes details of items discussed at their meeting in Frankfurt on 15-16 November. Read more on these and other developments that may be of interest to members below. Auditing IAASA has published its Work Programme for the period 2023 - 2025. IAASA has recently redefined its mission as upholding quality corporate reporting and an accountable profession.  The programme builds on IAASA’s work to date towards achieving that mission across its broad spectrum of activities. The strands of the work programme encompass regulation, promotion of high standards and maximising our impact, and the programme builds strategies around each of these strands and also around the enablers that support the strategies. Commenting on the programme, Chief Executive Kevin Prendergast expects that the Corporate Sustainability Reporting Directive is likely to permeate many aspects of the Authority’s work over the lifetime of the programme, but he is confident that the Authority can deliver on these challenges. The Financial Reporting Council (FRC) has today published a new report setting out examples of good practice to improve auditor scepticism and challenge. Financial Reporting The European Financial Reporting Advisory Group (EFRAG) has announced that it has delivered the first set of draft European Sustainability Reporting Standards (ESRS) to the European Commission (EC). These standards were approved at EFRAG’s meeting on 15 November and will now be considered for adoption by the EC. The ISSB have issued their November 2022 update. This includes details of items discussed at their meeting in Frankfurt on 15-16 November. This update is also available via podcast. The Financial Reporting Council (FRC) have issued amendments to the application guidance to FRS 100. These amendments were consulted on earlier this year, via FRED 80. The amendments to the application guidance to FRS 100 provide guidance on how Irish intermediate parents with a UK parent can assess equivalence of consolidated financial statements when applying section 300 of the Companies Act 2014. Similarly, the amendments provide application guidance on equivalence when applying section 401 of the Companies Act 2006 in the UK. The FRC has published its “Review of Stewardship Reporting”. This report, which looks at the quality of stewardship reporting in 2022 and expectations for 2023 found improvements in multiple areas when compared to 2021. Insolvency A reminder that the Institute is hosting a webinar on SCARP – what we know so far now scheduled for Thursday, 1 December 2022 at 10am. Des Gibney of McStay Luby and Hilary Larkin of Mazars along with Laura-Michelle Moore from Chartered Accountants Ireland will discuss the SCARP process, how to prepare for it, what to look out for and key matters to be aware of when considering it. We will explore some practical issues including how SCARP is working in practice, dealing with creditors and what your balance sheet may look like before entering the process versus afterwards. This is a free event and open to all to attend. Sustainability EFRAG has submitted the first set of draft European Sustainability Reporting Standards (ESRS) to the European Commission in its role as technical adviser to the European Commission. This first set, approved by the EFRAG Sustainability Reporting Board, supported by the EFRAG SR Technical Expert Group, takes into consideration the input from the public consultation on the draft ESRS Exposure Drafts.  See EFRAG's advice package here which includes the ESRSs, and appendices with a TCFD-EFRAG comparative analysis, a comparison of ESRS to IFRS Sustainability Reporting Standards  and final CSRD requirements for ESRS. Accountancy Europe has published some FAQs showing some of the key changes that the Corporate Sustainability Reporting Directive (CSRD) will bring. The Financial Conduct Authority in the UK has announced the formation of a group to develop a Code of Conduct for Environmental Social and Governance (ESG) data and ratings providers. It refers to the increasing reliance on third party ESG data and ratings services by financial services firms as they integrate ESG into their activities and expand their ESG-focussed products. Click here to go to the FCA website to read the background and next steps. The Association for Financial Markets in Europe (AFME) in collaboration with EY, has recently published ‘ESG and the Role of Compliance’, which sets out observations on how compliance functions can support their firms in robustly and transparently managing the regulatory risks associated with Environmental, Societal and Governance (ESG). The landing page describes how the report covers seven themes around the topic of how compliance functions address ESG, including: strategy, organisation and coverage, compliance risk management framework, systems and capabilities, regulatory environment, data and key performance/key risk indicators. You can click here to access a copy of the report. Anti-money laundering/Sanctions Beneficial ownership registers The Court of Justice of the European Union (ECJ) recently held invalid the provisions of fourth (as amended by the fifth) Anti Money Laundering Directive which require information on the beneficial ownership of corporate and other legal entities incorporated within the territory of Member States to be accessible in all cases to any member of the general public. You can read here the press release from the ECJ. Readers may be aware that in order to fulfil its obligations under the Directives Ireland in recent years has introduced a number of registers on which ownership details must be recorded. For example, the register of beneficial ownership of corporate entities, trusts register, register of certain financial vehicles and very recently the register of safe deposit boxes bank and payment accounts .These registers do not give public access to all the information .For example the register of beneficial ownership of corporate entities gives access to all information on the register to certain entities such as law enforcement but restricted access to others .It remains to be seen what effect the ECJ ruling will have on registers already put in place by member states . Central Bank (CBI) The Deputy Governor delivered a speech recently, entitled “Breaking new ground: regulating for emerging risks “at the Annual Irish Funds UK Symposium. She spoke about a number of areas of interest in the sector including sustainable finance and digital assets. On ESG CBI is concerned about the risks to regulated firms’ sound functioning, and more broadly to financial stability and to ensure that investors are fully informed and not misled. On digital assets she said there are many black boxes and clearly not all of them are fully understood.  She said this asset class has done real harm to retail investors in the last year and the digital assets ecosystem is not a suitable or safe space for retail investors. You can read the full contents of her speech here. Other news Companies House in the UK has published a useful article on filing accounts and are encouraging users to file early and file online. Accountancy Europe has published a paper which explores the different corporate governance systems based on a survey of 17 European countries. It identifies significant differences in national legislation and practice to lay the groundwork for EU sustainable corporate governance initiatives to be well integrated into the national corporate structures. New rules have been introduced from 1 December 2022 as to how employers will have to share tips, gratuities and service charges amongst employees. It will also be illegal for employers to use these to form part of the basic wages. Please click here to read some useful information from the Workplace Relations Commission website on key features such as what is a “tip or gratuity” ,what is a mandatory service charge and what happens if an employee is not satisfied with the way tips and gratuities are distributed. The National Cyber Security centre in the UK has issued some good advice on how to stay secure online. Please click here for some tips on keeping your e mail secure, two actions to instantly help to protect-a strong and different password and turning on 2-Step Verification. There are also some other tips for other ways to stay secure online and keep your devices safe. For further technical information and updates please visit the Technical Hub on the Institute website. 

The Financial Reporting Council (FRC) have issued amendments to the application guidance to FRS 100. These amendments were consulted on earlier this year, via FRED 80.  The amendments to the application guidance to FRS 100 provide guidance on how Irish intermediate parents with a UK parent can assess equivalence of consolidated financial statements when applying section 300 of the Companies Act 2014. Similarly, the amendments provide application guidance on equivalence when applying section 401 of the Companies Act 2006 in the UK. In addition to the amendments, the FRC has also issued a revised edition of FRS 100. This incorporates all changes to the standard since the previous edition was issued in 2018.

Welcome to this week’s Technical Roundup. In developments this week, a reminder that the Institute is hosting a webinar on SCARP – what we know so far now scheduled for Thursday, 1 December 2022 at 10am. Des Gibney of McStay Luby and Hilary Larkin of Mazars along with Laura-Michelle Moore from Chartered Accountants Ireland will discuss the SCARP process, how to prepare for it, what to look out for and key matters to be aware of when considering it; and the European Financial Reporting Advisory Group (EFRAG) is seeking comments on its draft endorsement advice on amendments to IFRS 16 by 9 January 2023. Read more on these and other developments that may be of interest to members below. Auditing The Financial Reporting Council (FRC) has published a set of principles that it will use to assess whether the public interest is best served by carrying out regulatory, supervisory and enforcement work that is outside of its primary regulatory perimeter as it transitions to the Audit, Reporting and Governance Authority (ARGA). The International Auditing and Assurance Standards Board (IAASB) has published new guidance to help users understand the impact on the International Standards on Auditing (ISAs) due to narrow-scope amendments made to International Accounting Standard (IAS) 1, Presentation of Financial Statements by the International Accounting Standards Board (IASB). While the IAASB remains framework neutral when developing the ISAs, it considers financial reporting framework developments that may affect the ISAs, such as changes to the International Financial Reporting Standards (IFRS). Amendments to IAS 1 and the Impact on the ISAs: Disclosure of Material Accounting Policy Information, among other matters, provides users with guidance on how to address the effect of the amendments on a number of illustrative auditor reports throughout the ISAs that assume, as part of the fact pattern, that the financial statements are prepared by the management of the entity in accordance with IFRSs Financial Reporting On Thursday 17 November the FRC Directors of Strategy and Change, Stakeholder Engagement and Corporate Affairs and the FRC Lab explored via a webinar recently published set of principles that they use to assess whether the public interest is best served by carrying out regulatory, supervisory and enforcement work that is outside of their primary regulatory focus. The IFRS Foundation has published Proposed Update 1 General Improvements and Common Practice, which amends the IFRS Accounting Taxonomy 2022. The proposed changes aim to improve the quality of tagged data and to make the IFRS Accounting Taxonomy easier to use. The European Financial Reporting Advisory Group (EFRAG) is seeking comments on its draft endorsement advice on amendments to IFRS 16. Comments are requested by 9 January 2023. The International Accounting Standards Board will host a research forum in November 2023. The purpose of this forum is to give researchers the opportunity to give recommendations on the projects researchers look into. The deadline for the submission of research papers is 31 March 2023. Insolvency A reminder that the Institute is hosting a webinar on SCARP – what we know so far now scheduled for Thursday, 1 December 2022 at 10am. Des Gibney of McStay Luby and Hilary Larkin of Mazars along with Laura-Michelle Moore from Chartered Accountants Ireland will discuss the SCARP process, how to prepare for it, what to look out for and key matters to be aware of when considering it. We will explore some practical issues including how SCARP is working in practice, dealing with creditors and what your balance sheet may look like before entering the process versus afterwards. This is a free event and open to all to attend. Sustainability The ISSB have released a podcast which discusses their highlights from COP27. The Irish Central Bank  recently hosted a seminar on the Sustainable Finance Disclosures Regulation (SFDR) for the asset management sector. Comments made by the Deputy Governor are reported on the Central Bank website. She said that they are placing significant emphasis on supporting delivery of the sustainable finance agenda through the implementation of related legislative initiatives. She referred to CBI role at ESMA, where the CBI has helped shape and develop the organisation’s ambitious agenda in the ESG/sustainability area and to the Sustainable Finance Roadmap 2022-2024 published in February by ESMA. She also referred to CBI domestic focus, the dedicated Climate Change Unit and legislative implementation and supervision of the new requirements in this area – including the SFDR, Taxonomy Regulation and the amendments to UCITS / AIFMD for management companies. You can read her comments in full at the link above. Also, in November 2022 the Central Bank issued an information note entitled Sustainable finance and the asset management sector: Disclosures, investment processes & risk management. You can read the Information Note here. Anti-money laundering/Sanctions The UK Office of Financial Sanctions Implementation HM Treasury has published its annual review for dates April 2021 to August 2022.In the review OFSI director refers to the extra focus  given to the first 6 months of the invasion of Ukraine to provide context and clarity on what he says is OFSI’s critical  work on sanctions which he says  continues to be integral to the UK’s ability to respond to geo-political issues. Please also click here for the associated HM Treasury news story which reports that the new figures released reveal the full effect of UK sanctions on Russia – with over £18 billion frozen and reported to OFSI. In November 2022 HM Treasury in the UK issued an updated Advisory Notice: High Risk Third Countries. The notice refers to Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No.3) Regulations 2022 and states that the statutory instrument will come into force on 7 November 2022 and substitute the list of high-risk third countries specified in Schedule 3ZA of the Money Laundering Regulations with a new list. This list will continue to mirror both the Financial Action Task Force’s (FATF) ‘Jurisdictions under increased monitoring’ and ‘High-risk jurisdictions subject to a call for action’ documents. Click here to read the advisory notice. Central Bank Readers may know about Irish regulations passed in February 2022 which provided for a central database of information to be supplied by credit institutions to the Irish Central Bank on safe-deposit boxes and bank and payment accounts. The regulations were brought into force to give further effect to the EU fourth and fifth Anti-Money Laundering Directives. In recent weeks the Irish Central Bank has launched a webpage Ireland Safe Deposit Box Bank and Payment Accounts Register (ISBAR) which  sets out the information to be contained on the register and says that the register ensures that flows of money can be properly traced to individuals, entities and illicit networks at an early stage .Technical guidance documents, a reporting template and some FAQs are also accessible on the page. Please also click here for a recent Institute news item on the register. Other news The Irish Companies registration office has in  recent weeks publicised on its website the Christmas 2022 deadline for company incorporations, change of name, re-registration and company name reservations which readers should take note of. The CRO says that it cannot guarantee that submissions received after the dates set out below will be processed before the Christmas break. Fé PHRAINN ONLINE SCHEME 14 December 2022 A1 ORDINARY ONLINE SCHEME 8 December 2022 CHANGE OF NAME 8 December 2022 REREGISTRATIONS 8 December 2022 COMPANY NAME RESERVATIONS 16 December 2022 Readers may recall that earlier this year, the Institute, as part of CCAB-I, responded to a public consultation from the Dept of Enterprise, Trade and Employment on new legislation for the co-operative sector. The Government has now approved the drafting of what is billed as ground-breaking legislation for the sector. Please click here for more details contained in the press release and here to go to the page with a link to the General Scheme of the Co-operative Societies Bill 2022. You can also click here to read the submissions made to the Department in February  2022 including the CCAB-I response. This week the Tánaiste announced the introduction of a national living wage. It will be set at 60% of the hourly median wages in line with the recommendations of the Low Pay Commission. It will be introduced over a four-year period and will be in place by 2026, at which point it will replace the National Minimum Wage. Readers can find  more details in the Dept. news  here . The latest InterTradeIreland Business Monitor (Q3 2022) more details on which, including a Q3 2022  infographic, you can find here, reveals that while businesses are still expanding, the pace of growth is starting to flatten. The latest data shows that while sales and profits remain relatively buoyant, quarter-on-quarter, a pattern of slowing growth is emerging as rising costs pile on the pressure. Last week the Pensions Authority published information for group pension schemes that are subject to the 1 January 2023 compliance deadline for pension schemes, and it has issued a video reminder of it this week. You can click here for the press release and to access the video. The Companies House in the UK has published its  annual report and accounts for the period 1 April 2021 to 31 March 2022. The companies register had grown to holding information on around 4.9 million incorporated companies at the end of March 2022. NI Charity regulator opens a consultation: Joint consultation on draft Strategic Plan 2023-2026 and Engagement Strategy The Commission is developing a new strategic plan alongside a new engagement strategy, both of which are being undertaken following the Independent Review of Charity Regulation commissioned by the Minister for Communities in January 2021. The draft strategic plan will set out the Commission’s priorities over the next three years as it responds to the review of charity regulation, the new Charities Act (Northern Ireland) 2022 and delivers charity regulation in Northern Ireland. The engagement strategy will set out how the Commission will become more outward facing and actively engage with stakeholders. This engagement is designed to support charities in complying with charity law while also educating and raising awareness of the Commission’s work amongst the public, including those who support, work for or avail of the services offered by charities. For further technical information and updates please visit the Technical Hub on the Institute website. 

Roundup 11 November 2022 Welcome to this week’s Technical Roundup. In developments this week, the European Financial Reporting Advisory Group (EFRAG) has issued its October 2022 edition of the EFRAG Update. This summarises public technical discussions held and decisions taken during the month; the Irish Pensions Authority published information this week for group pension schemes that are subject to the 1 January 2023 compliance deadline where these pension schemes must meet the full requirements of the Pensions Act, 1990, as amended, including the new requirements of the IORP II Directive, from 1 January 2023 onwards. Read more on these and other developments that may be of interest to members below. Auditing The Financial Reporting Council (FRC) has launched a consultation on its draft proposal for a minimum standard for audit committees.  This follows the UK Government's Response to its consultation on Restoring Trust in Audit and Corporate Governance, which set out its intention to give ARGA statutory powers to mandate minimum standards for audit committees in their role on the external audit. The FRC are holding a webinar entitled “Effective and Transparent Regulating” on 24 November. This will provide an update of the work of the FRC in 2022 and a look ahead to 2023. Financial Reporting The European Financial Reporting Advisory Group (EFRAG) has issued its October 2022 edition of the EFRAG Update. This summarises public technical discussions held and decisions taken during the month. EFRAG and the IASB are holding a joint online roundtable for preparers, users and auditors on Primary Financial Statements on Tuesday 15 November. The International Forum of Accounting Standard Setters (IFASS) have released a report with their key messages from their September 2022 meeting.               The IASB has published a user feedback newsletter on the IFRS for SMEs Accounting standard update. This newsletter explains how the IASB has responded to feedback from users of SMEs’ financial statements and describes the proposals the IASB published in its recent Exposure Draft. On 7 December 2022, EFRAG will hold its conference "Where is Corporate Reporting heading?" in Brussels to celebrate its 21-year anniversary and discuss EFRAG's major accomplishments, past and future. It will be an occasion to debate the new trends in corporate reporting following the Environmental, Social and Governance (ESG) revolution and the connectivity with financial reporting. Insolvency The Institute is hosting a webinar on SCARP – what we know so far now scheduled for Thursday, 1 December 2022 at 10am. Des Gibney of McStay Luby and Hilary Larkin of Mazars along with Laura-Michelle Moore from Chartered Accountants Ireland will discuss the SCARP process, how to prepare for it, what to look out for and key matters to be aware of when considering it. We will explore some practical issues including how SCARP is working in practice, dealing with creditors and what your balance sheet may look like before entering the process versus afterwards. This is a free event and open to all to attend. Sustainability The European Parliament has this week adopted the Corporate Sustainability Reporting Directive (CSRD) with 525 votes in favour, 60 votes against and 28 abstentions. The CSRD was originally proposed by the European Commission in April 2021, and it will make companies more accountable by obliging them to disclose information on their societal and environmental impact. This will now go forward to the Council of the European Union for adoption of the proposal on 28 November 2022. The first new sustainability reporting standards will be adopted by the Commission in 2023 with these becoming mandatory over the next few years, beginning in 2024 for the very large companies. Please see the press release and the text of the CSRD adopted by the EU Parliament for further information. CDP, the not-for-profit which runs the global environmental disclosure platform for corporations, and the IFRS Foundation have announced that CDP will incorporate the International Sustainability Standard Board’s (ISSB) IFRS S2 Climate-related Disclosures Standard [IFRS S2] into its global environmental disclosure platform, in a major step towards delivering a comprehensive global baseline for capital markets through the adoption of ISSB standards. The ISSB have also made some other announcements in the past week, including; Details of discussions held on the reference to other standards to support interoperability with other sustainability related standards November 2022 supplementary update A summary of its main achievements, in the year following its creation at COP 26 in November 2021. Announcement of implementation steps that will help jurisdictions prepare for its implementation. The Irish government this week launched a report outlining the skills required by the domestic retail financial services sector to finance Ireland’s net zero transition. You can read the press release here. The report highlights how education and training in sustainable finance to date has concentrated on the financial and capital markets, such as green bonds, regulatory developments, and sustainable investment funds, with a greater focus on the Irish retail financial services sector talent development a next key step. Click here for a copy of the report. In its recently released report “Getting to Net Zero: A Global Review of Corporate Disclosures” the International Federation of Accountants (IFAC) have highlighted the inconsistency and incomparability of target disclosures and have highlighted that COP27 is the perfect time to dig into what is being disclosed and to explore how emission disclosures can become more decision-useful. Anti-money laundering The latest edition of the UK Financial Intelligence Unit (UKFIU)'s SARs Reporter Booklet is now available on the NCA website and can be accessed here. It is a product for reporters of Suspicious Activity Reports (SARs) and readers are reminded that if you are making a SARs report you must use a glossary code, details of which are set out in the booklet. Chartered Accountants Ireland Professional Standards has recently issued the UK AML Supervision Report 2021/2022 in accordance with Reg 46A of the Money Laundering Regulations 2017 (as amended). The report reflects the significant efforts of Chartered Accountants Ireland in meeting its anti-money laundering (AML) supervisory obligations for the year to 5 April 2022. It also provides details of firm inspection activity for the year and the results arising from this. Readers can access a copy of the report here . Other news A reminder to readers that Charity Trustees’ Week is taking place from 14 - 18 November 2022.It is hosted in partnership by the Charities Regulator, Boardmatch Ireland, Carmichael, Charities Institute Ireland, Dóchas, Pobal, The Wheel, and Volunteer Ireland. The Charities Regulator has put up a calendar of events on its website and you can click here to get further information on those events. The Pensions Authority published information this week for group pension schemes that are subject to the 1 January 2023 compliance deadline where these pension schemes must meet the full requirements of the Pensions Act, 1990, as amended, including the new requirements of the IORP II Directive, from 1 January 2023 onwards. Please click here to see the press release on the Authority’s website. The Irish government recently amended the Work Life Balance Bill and approved the integration of the right to request remote work for all workers into the Work Life Balance and Miscellaneous Provisions Bill. This bill is expected to be delivered by the end of the year. Under the new legislation employees will have a legal right to request remote working from their employer. In addition, employers will now be required to have regard to a code of practice when considering requests. The principal differences in the integrated Bill compared with the original Right to Request Remote Working Bill are in the grounds for refusal and the right to redress.  Readers can find out further information on this development in the press release here . The latest blog from the Governor of the Central Bank may be of interest to some readers. It discusses the sector of non -banks, their growth, vulnerabilities, and the need for well-developed macroprudential policy for non-banks. You can read the blog here. The Minister for Public Expenditure and Reform this week issued interim guidance for public bodies and prescribed persons on the Protected Disclosures Act. Amending legislation will commence on 1 January 2023.The interim guidance has been prepared to assist public sector employers and prescribed persons in implementing the new requirements of the amended legislation as regards the establishment and operation of internal and external reporting channels. Following commencement, this interim Guidance will be issued as formal Statutory Guidance. Please  click here for the press release and click here and scroll to bottom of the page  for a copy of the interim guidance. The UK FCA Chief Data, Information and Intelligence Officer, spoke recently on the area of regulation and risk management of Artificial Intelligence in financial services. Topics included the central role of the governance framework for AI and the key question for financial services of whether AI can be managed through fine-tuning the existing regulatory framework, or whether a new approach is needed. Here she made reference to the FCA and Bank of England’s AI Discussion Paper which can be accessed from within the speech. Access to the contents of the speech can be found here. The UK Charity Commission have provided some guidance on their new way of engaging with charities via their “My Charities Commission Account”. The Charity Commission in Northern Ireland has released a report on its Independent Review of Charity Regulation. The report contains 93 recommendations on changes that could be considered to improve the delivery of services and the operation of the regulatory framework. For further technical information and updates please visit the Technical Hub on the Institute website. 

The Department of Housing, Local Government and Heritage has published an infographic outlining the timeline and processes for the implementation of the Residential Zoned Land Tax (RZLT). The first phase commenced 1 November 2022 when local authorities published draft maps showing lands that will be subject to RZLT. Landowners and others have until 1 January 2023 to make a submission to their local authority regarding the inclusion/exclusion of their lands from the draft maps, or to request a change of zoning of land. The RZLT will apply from 2024 to relevant land at a rate of 3 percent of market value. Considered by government to be an important component of the pathway to increasing new housing supply, contained in the Housing for All plan to 2030, the aim of the tax is to activate land for residential development rather than to raise revenue. Welcoming the publication of the Draft Residential Zoned Land Tax Maps, Minister Donohoe said: “This is an important step in the RZLT implementation process whereby land within scope of the tax has been identified by local authorities. Landowners whose land is included on a draft map should now review the map and consider if their land meets the criteria for inclusion and make submissions to their local authority accordingly. Residential properties, while they might be on the map, are not liable for the tax if they are subject to LPT. In the course of 2023, supplemental and final maps will be prepared by local authorities identifying the land within scope; the final map will be revised annually from 2025 onwards. Ireland requires increased housing supply to meet our housing needs. The RZLT aims to incentivise landowners to activate existing zoned and serviced residential development land for housing on identified lands and lead to the building of more homes.” Further details are included in the Department of Finance press release.

The October Exchequer figures show that tax revenues were €6.4 billion ahead of profile and €13 billion up on the same period last year. Contributing to this was the strong performance of corporation tax receipts, which were nearly €4.8 billion higher than profiled. The annual increase is, in part, flattered by Covid-19 restrictions that were in place in the early part of last year. Corporation tax receipts of €2.3 billion were reported in the October tax revenues. This is €1.2 billion higher than profiled. The Department of Finance press release on the publication of the October Exchequer figures, notes that it is not expected that such a high level of receipts will be repeated in future years. The Minister for Finance discussed the continued uncertainty within the corporation tax base despite the 12-month rolling Exchequer surplus of €7.3 billion, as such revenues may prove transitory. Commenting on the figures, the Minister for Finance, Paschal Donohoe T.D. said: “Today’s figures show that tax receipts remain strong at the start of the fourth quarter. However, the strength of potentially volatile corporate tax receipts continue to provide an artificially positive picture of the public finances. As I have warned on many occasions, while these receipts are welcome, it is imperative that that Government does not build up permanent fiscal commitments on the basis of revenues that may prove transitory.   Budget 2023 was, of course, a ‘Cost of Living Budget’ focused on mitigating inflationary pressures. The Government has aimed to strike a delicate balance between providing assistance to those suffering the most but without adding fuel to the fire of inflation, while ensuring that we retain sufficient firepower to respond to further challenges over the coming years.   That is why I allocated €2 billion to the National Reserve Fund this year, with a further €4 billion to be transferred next year.  This policy instrument is aimed at further enhancing the resilience of the public finances and will enable the Government to respond in a pro-active manner should risks materialise over the coming period.” Further details are included in the Fiscal Monitor October 2022.    

Welcome to this week’s Technical Roundup. In developments this week, the IFRS Foundation has issued a summary of the recent World Standard Setters Conference held on 26-27 September. This includes updates on recent, ongoing and upcoming work by the IASB and ISSB and the European Securities and Markets Authority (ESMA) and the EU’s financial markets regulator and supervisor, has recently published its latest edition of its Spotlight on Markets Newsletter. Read more on these and other developments that may be of interest to members below. Financial Reporting The Financial Reporting Lab is launching a project to understand how companies develop, assess and use materiality and to consider how enhancements to disclosure about materiality processes might assist investors. The project is expected to cover financial and non-financial reporting. The IASB have released the final instalment of its Dynamic Risk Management (DRM) webcast series. These webcasts explain the DRM project based on the IASB’s tentative decisions to date. The IFRS Foundation has issued a summary of the recent World Standard Setters Conference, held on 26-27 September. This includes updates on recent, ongoing and upcoming work by the IASB and ISSB. The FRC will be holding a webinar on Structured digital reporting – improving quality and usability on 8 November. This will cover some of the key points raised in the FRC Lab’s recent report on Structured Digital Reporting. The FRC will also be holding a webinar on this year’s Annual Review of Corporate Reporting on 2 November. EFRAG has released its educational session on the Primary Financial Statements project. Audit - Quality Management IAASA over recent weeks has published a series of videos designed to provide information on the new suite of Quality Management Standards in Ireland. The full series is available here. To accompany the video series, IAASA has published a factsheet for each Quality Management Standard available here. The new standards apply to periods from 15 December 2022. See our QM resource pages for links to the standards and further guidance. Anti-money laundering, sanctions Click here for the “Inside FCA Podcast: Fighting Financial Crime” where the FCA Executive Director of Markets speaks at the Financial Crime Summit in London. Also see the remarks by the  interim Chair of the FCA and Chief Executive of the FCA delivered recently at the FCA's 2022 Annual Public Meeting. The UK National Crime Agency’s latest edition of SARs in action is now available. It includes items on the red alert issued by the Joint Money Laundering Intelligence Taskforce in July 2022 on Russia elite and enablers, non-fungible tokens and money laundering and trade-based money laundering. Please click here to access the October issue. Other The Corporate Enforcement Authority, (CEA), has drafted an Information Note concerning the European Union (Preventive Restructuring) Regulations 2022. The Note will provide a list of potential early warning indicators which may help directors to identify that the company is approaching financial difficulties. It will also give information on the restructuring options available to companies facing financial difficulties, but which may otherwise have a reasonable prospect of survival. CEA is inviting interested parties to submit their views on the draft Information Note by 5pm on 1 November 2022.Readers can access the draft information note here. Revenue has announced a 12-month extension to the Debt Warehousing Scheme to continue to support businesses. Under the scheme, businesses with warehoused debt were due to enter into an arrangement with Revenue to deal with that debt by the end of the year - or by 1 May 2023 for those subject to an extended deadline.  But given the current economic uncertainty, Revenue said it was now extending that timeline to 1 May 2024. Th Minister for Business, Employment and Retail recently introduced draft legislation, the Employment Permits Bill 2022 which if enacted will help modernise the Employment Permit system in Ireland. You can read the press release and access the draft bill on this page. The Deputy Governor of Central Bank of Ireland recently spoke at Climate Finance Week 2022 on the topic of addressing Climate Risk in the Financial System today. She talked about prioritising climate risk at the Central Bank and how firms should identify and manage climate risks. You can click here to read the speech. Announcing the Northern Ireland Charity Commission’s first public meeting since pre COVID-19, Chief Charity Commissioner, Nicole Lappin, highlighted the event as an important opportunity for the charity sector, and for the Commission itself.  The event will include an overview of the Commission’s work and development in recent years, the changes brought in following new Charities Act (Northern Ireland) 2022 as well as the regulator’s plans for the future. Date: Wednesday 16 November 2022 Time: 10am – 12.30pm (registration from 9.45am, refreshments will be available) Venue: Chestnut Suite, Lagan Valley Island, Lisburn The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has recently published its latest edition of its Spotlight on Markets Newsletter. For further technical information and updates please visit the Technical Hub on the Institute website. 

The Tax Appeals Commission (TAC) has published a catalogue of the TAC determinations published since its establishment in 2016 up to 3 October 2022. TAC determinations are catagorised by tax head and are accessible here.

Prior to the introduction of the Special Assignee Relief Programme (SARP) there was an expatriate-based tax relief available under section 825B Taxes Consolidation Act 1997 to individuals who were not Irish domiciled and who, before they came to the State, were living and working in a country with which Ireland had a double taxation agreement. As the latest tax year in which the relief could be claimed was 2015, Revenue has removed Tax and Duty Manual Part 34-00-08 as it is no longer relevant.

Welcome to this week’s Technical Roundup. In developments this week, IAASA has published a paper setting out information requests that it has raised with companies on their climate-related disclosures in their annual financial reports and did you know about the European Commission’s podcasts? Short episodes are released at the same time as the monthly EU Commission Finance Newsletter on topics related to banks, capital markets, insurance, digital or sustainable finance, anti-money laundering, sanctions, etc. Read more on these and other developments that may be of interest to members below. Financial Reporting In their latest edition of “Insight from SME accountants” series, Accountancy Europe looks at how sustainability matters for the new generation of accountant. The IASB has produced a series of eight webcasts to explain the Dynamic Risk Management project to date. The FRC Lab has published a report on the disclosure of net zero commitments. This provides tips for companies on how to consider when disclosing their commitments. IAASA has published a paper setting out information requests that it has raised with companies on their climate-related disclosures in their annual financial reports. Anti-Money laundering, sanctions On 6 October 2022 the European Union announced its eighth package of sanctions. Click here for a press release on the eighth package of sanctions and please also visit our sanctions webpages “Europe & International” for more details of what the eighth package consists of. HMRC in the UK has recently issued an economic crime supervision annual self-assessment report for the period  1 April 2021 to 31 March 2022 which it says  analyses the extent to which HMRC is meeting its obligations under the Money Laundering Regulations 2017, as well as comparing it to the standards set for professional body anti-money laundering supervisors. The National Cyber Security Centre Ireland has a quick guide to phishing to help to avoid being phished, spotting the giveaway signs of phishing e-mails, and what to do if you think you’ve already clicked the attacker’s bait. Other The Minister for Public Expenditure and Reform recently signed the commencement order for the Protected Disclosures (Amendment) Act 2022 to set 1 January 2023 as the date on which the Act will commence in its entirety. Readers may be aware that the new legislation will substantially amend the Protected Disclosures Act 2014. It will expand the categories of protected person to include protections for volunteers, shareholders, board members and job applicants for the first time. It also expands the wrongs in respect of which a protected disclosure can be made. It imposes requirements on organisations to put internal whistleblowing procedures in place and a new Office of the Protected Disclosures Commissioner will be established. You can read more in the Department’s press release on its website here and we will provide more information to members in due course on this topic. The Department of Enterprise, Trade and Employment has published its October's Enterprise Newsletter. This includes information about Budget 2023 helping businesses and families with escalating energy costs, the Cross-Government launch of a new National Implementation Plan for the Sustainable Development Goals 2022-2024, and EU trade sanctions in response to situation in Ukraine. There are also details of a new pay agreement providing pay increases and wage structure for early learning and childcare workers, publication of the Final Report of the LEEF High-Level Working Group on Collective Bargaining, and public consultation on the Single Market Emergency Instrument. The newsletter can be found here. The Pensions Authority has published the results of a survey conducted on trustees’ IORP II preparedness. The survey provides information on pension scheme trustees’ progress since a similar survey was carried out in 2020. The survey findings indicate that while significant progress has been made by scheme trustees to meet the requirements of the Act, there is still work to be done by trustees to ensure compliance ahead of the 1 January 2023 deadline. The survey findings also indicate that most DB scheme trustees surveyed intend to continue their scheme, while almost half of the DC trustee respondents noted an intention to wind up their scheme and move to a master trust. Further information and the results can be found here. Did you know about the European Commission’s podcasts? Short episodes are released at the same time as the monthly EU Commission Finance Newsletter on topics related to banks, capital markets, insurance, digital or sustainable finance, anti-money laundering, sanctions, etc. The latest one “the on about Anti Money laundering dated 29 September 2022 can be accessed now. Please also click here to read the European Commission’s latest Banking and Finance newsletter where DG FISMA's Director-General talks about topics including the energy crisis and  sanctions, and includes a short discussion about cryptocurrencies, the current ‘crypto winter’, and the digital euro. Cathy Shivnan, the Corporate Enforcement Authority’s (CEA) Director of Insolvency Supervision, sat down recently with Graham Kenny of Eversheds Sutherland LLP to talk about the role of the newly established CEA. The CEA is now the competent authority in Ireland for the investigation of breaches of the Companies Acts and the taking of necessary enforcement actions. You can listen here. For further technical information and updates please visit the Technical Hub on the Institute website. 

The FRC Lab has published a report entitled "Net zero disclosures". This report, which highlights examples of current practice, discusses some of the key considerations for investors who use net zero disclosures and the elements of net zero disclosures that investors want to understand. The report builds on three key elements of net zero disclosures (commitments, impacts and performance) and discusses areas of consideration and challenge within these topics. The report provides some useful guidance for preparers seeking to navigate the difficult area of reporting on their greenhouse gas emission reduction commitments.

Dawn Leane examines the main barriers to success experienced by women and what organisations can do to break the career inhibitors down In workshops organised after the publication of the research study carried out by Fiona Dent and Viki Holton for their book Women in Business: Navigating Career Success, women were asked to identify factors they believed had hindered their progress. Their responses are broadly categorised as follows: Limiting beliefs; Family issues; Work colleagues; Personal style and skills; Lack of organisational support; Gender issues; Taking the wrong career path; and Politics and bureaucracy. The most frequently mentioned issues focus on self-doubt and limiting beliefs. As this is a nuanced subject, it is important to distinguish between limiting beliefs and confidence.  Limiting beliefs vs confidence Beliefs are assumed truths developed over time from our direct experiences and observations. They usually don’t exist as explicit propositions. We may barely be aware of them, but they influence what we think, say, and do.  When they manifest self-doubt, they become limiting beliefs. An example of a limiting belief may be ‘I can’t handle conflict’, which could lead to a lack of assertiveness or the tendency to give in to others. Limiting beliefs can have a significantly negative impact on our ability to achieve our full potential. Confidence, however, can be significantly influenced by workplace culture. Women are regularly told that they should be more confident, which is particularly unhelpful as it puts the responsibility firmly back on women, as opposed to examining the environment as a contributing factor. One way in which the office environment can impact confidence is ‘backlash avoidance mechanism’, whereby women feel uncomfortable self-promoting due to perceived social consequences. Feedback and career development In the workshop, 59 percent of participants believed that men and women are judged unequally, particularly when it comes to feedback and development in the workplace. This is supported by the Women in the Workplace study—a study of US women in the workplace conducted by LeanIn.Org and McKinsey & Company—which found that women report receiving feedback much less frequently than their male co-workers. In fact, women are more than 20 percent less likely than men to receive difficult feedback, which is essential to improving performance. One reason cited by managers is their fear of an emotional response, which is less of a concern when giving feedback to male employees. Further, the feedback that women receive is often vague and non-specific. In their Harvard Business Review article, ‘Research: Vague Feedback is Holding Women Back’, Shelly J. Correll and Caroline Simard advised that “women are systematically less likely to receive specific feedback tied to outcomes, both when they receive praise and when the feedback is developmental.” They also found that when women did receive feedback, it was largely focused on their style of communication. Family issues While it is widely accepted that family issues can be a barrier to success, most participants in Dent and Holton’s research recognised that decisions made in relation to family life require compromise—and that it was typically the woman in the relationship who compromised out of personal choice. Many women accepted this as an inevitable consequence of motherhood and feel obliged to take responsibility and be available for their children. Managing employee long-term success The overarching message from these pieces of research is that what happens early in a woman's career significantly impacts her long-term success. It is important that both the career accelerators and inhibitors discussed in this series are considered by organisations when developing talent management and career development programmes. You can read the first two articles in this series: Empowering women for better balance in the workplace Four success factors for women in the workplace Dawn Leane is Founder of Leane Leaders and Leane Empower. 

Welcome to this week’s Technical Roundup. In developments this week, the IFRS Foundation has published its September 2022 monthly news summary which highlights the news and events from the past month and in a recently released episode of the International Accounting Standards Board podcast, Chair Andreas Barckow and Executive Technical Director Nili Shah, talk through the highlights from the September 2022 IASB meeting. Read more on these and other developments that may be of interest to members below. Financial Reporting IAASA has published its annual Observations paper highlighting matters that those charged with governance should consider when preparing their financial statements for 2022. The Financial Reporting Council (FRC) Lab have issued their September 2022 news roundup. EFRAG, the European Financial Reporting Advisory Group has published its September 2022 update. In its September 2022 podcast, the ISSB discuss the highlights from its recent board meeting. The IASB have also released its September 2022 podcast. The IFRS Foundation has published its September 2022 monthly news summary which highlights the news and events from the past month. The FRC has published a report on Navigating barriers to senior leadership for people from minority ethnic groups in FTSE 100 and FTSE 250 companies.  Auditing and Assurance The Financial Reporting Council (FRC) has opened a post implementation review of the auditing standard (ISA) (UK) 540 (Revised December 2018) Auditing Accounting Estimates and Related Disclosures. This ISA became effective for audits of accounting periods beginning on or after 15 December 2019. Interested stakeholders are also invited to attend one of two roundtables to support the call for feedback. These are being held on: Wednesday 23 November 2022, 14:00-15:00 (online) Thursday 24 November 2022, 11:00-12:00 (in person at the FRC’s offices) To RSVP for the roundtables please email stakeholderengagement@frc.org.uk. The call for feedback is open until 13 January 2023. Accounting In a recently released episode of the IASB podcast, Chair Andreas Barckow and Executive Technical Director Nili Shah talk through the highlights from the September 2022 IASB meeting. Ethics and the Ukraine Conflict The Staff of the International Ethics Standards Board for Accountants have released the Staff Alert, The Ukraine Conflict: Key Ethics and Independence Considerations. The publication draws the attention of professional accountants in business and in public practice, including firms, to a number of important provisions in the International Code of Ethics for Professional Accountants (including International Independence Standards) with which they must comply in carrying out their work as they navigate the unprecedented challenges and risks arising from the Russia-Ukraine war. Other The Pensions Authority has published its Annual Report and Accounts for 2021. The Annual Report and Accounts for 2021 and an accompanying statement from the Pensions Regulator, Brendan Kennedy, can be read here. Also in Pensions Authority news, they recently published information in relation to exit charges, trustee annual reports and audited accounts for one member arrangements (OMAs) migrating into a master trust. You can read more details from their website here. The Pensions Authority has also published an update for trustees in relation to trustee annual reports and audited accounts for group schemes with less than 100 active and deferred members transferring to a master trust or PRSAs. The UK Financial Conduct Authority has published research showing that a quarter of consumers it surveyed would withdraw pension savings earlier to cover cost of living – making them vulnerable to scammer ‘misdirection’. It has recently launched its latest ScamSmart campaign aimed at giving consumers the knowledge and tools to avoid pension scams and you can read more about it here. The Central Bank has recently announced a review of the Consumer Protection Code 2012 (“Code”) to modernise it and ensure it is fit for purpose. The Code is a set of principles and rules that regulated financial firms must follow when they sell financial products and services, give financial information or advice, advertise financial products or services and handle complaints of consumers. A discussion paper has been published and you can click on the link to access the discussion paper and complete the survey. The Central Bank published its final Quarterly Bulletin of 2022 and  you can read the press release here. Chartered Accountants Ireland Western Society was pleased to co-host the launch of the Bulletin in the Galmont Hotel Galway on 6 October 2022. The event was an opportunity to discuss the general outlook for the Irish economy and the Bulletin which noted that energy-driven inflation is causing uncertainty and challenges for domestic growth. Following a short presentation, attendees were invited to ask questions from the panel moderated by Dr Brian Keegan, Director of Advocacy and Voice, Chartered Accountants Ireland.  The panel included Robert Kelly, Director of Economics and Statistics, Ireland; Tara McIndoe-Calder – Senior Economist, Central Bank of Ireland and Cathal O'Donoghue – Established Chair, Social and Public Policy, National University of Ireland, Galway. Please click here to access a podcast by Europol on Ransomware. A number of cybercrime specialists speak about how law enforcement dealt with a cybercriminal network selling ransomware services. Also in Ireland on this topic, the National Cyber Security Centre and the Garda National Cyber Crime Bureau this week launched a joint public awareness campaign for European Cyber Security Month. The campaign this year is focused on the twin themes of phishing and ransomware, urging vigilance and outlining their potential impacts on the everyday lives of Irish citizens and businesses. You can read more in the Dept. of Justice press release here. On Wednesday of this week there was a cross government launch of  the new National Implementation Plan for the Sustainable Development Goals 2022-2024. Its purpose is to  increase Ireland’s ambition and strengthen implementation structures to achieve the Sustainable Development Goals (which are set out in the plan). The Minister of State at the Department of Finance with special responsibility for Financial Services, Credit Unions and Insurance, Seán Fleming, recently launched an update of the Ireland for Finance strategy. This update charts the future development of the international financial services sector in Ireland to the end of 2026. Under the updated strategy the government has a target to grow employment in the sector by 5,000 net new jobs. You can read the press release here and access the updated strategy by clicking here and clicking the Updated Ireland for Finance Strategy. For further technical information and updates please visit the Technical Hub on the Institute website.