Cormac Lucey helps you turbo-charge your ability to identify and absorb relevant information in three easy steps. A close friend of mine is a retired journalist. We were in school together for several years in the 1970s. He went into journalism; I went into accountancy. In sixth year, our school won the Leinster Senior Schools cup in rugby for the first time in decades. My pal kept a copy of the following day’s Irish Independent, complete with match coverage. It disappeared under the mountain of detritus we are all at risk of gathering. Then it re-emerged after both parents had died, and the family home was put up for sale. What struck Peter, in the early part of this century, was just how thin that 1978 edition of the Independent was compared to the bulky newspapers we have today. Ironically, our newspapers are bigger and better than ever before, even as they face going down under the online onslaught. In 1978, nobody was at real risk of information overload. If anything, we suffered from information poverty back then. Today, however, we are forced to deal with an abundance of information. Separating the informational wheat from the chaff is critically important today, as each of us could be submerged in the flow of information pouring our way. I read a lot – both online and in print – and have three key rules for managing the information flow I face. Rule 1: Learn to speed read and put it into practice The average best-seller we might take with us on holidays has about 400 words on each page. It is said that President John F. Kennedy could read 2,000 words per minute, equivalent to five pages per minute. I find that hard to believe. But with a disciplined approach, it should be possible to read at speeds of 500-600 words per minute regularly. What are the core elements of speed-reading? Here is a speed speed-reading course: a) Develop the good habit of reading in a smooth rhythm; abandon the bad habit of disrupting that rhythm by occasionally going back to reread a passage; b) Instead of visually absorbing single words, get into the habit of absorbing several (three to five) words with each glance; c) Measure your reading speed when you’re reading a book and focus on getting that speed up; and d) Practice reading some trashy material at an incredibly fast pace. Then, when you read regular content, you’ll find yourself chomping at the bit speed-wise, just like when you come off the motorway and chomp at the bit at the outrageously slow speed limits then imposed. Rule 2: Focus When you read something, you are reading it for a purpose. Be deliberate about that purpose. If I’m reading a newspaper, I want useful information and I want entertainment. I also want to limit the amount of time I devote to reading the paper. I am certainly not going to read all of it. The paper owes you a duty – you owe the paper no duty. Similarly, just because you have started to read a book does not mean you are duty-bound to complete it. Our time and attention are limited. If a book is boring, tedious or just getting you down, discard it and choose another. That book may deserve the dismissive review: “Once I put it down, I couldn’t pick it up!” Rule 3: Discriminate among preferred providers I follow several financial websites closely: RTE.ie – click on “Business”, “Broker Reports” and “Goodbody” and you will be directed to a comprehensive review of the previous day’s business and economic news refracted through the prism of its implications for corporate value. Google “McKinsey on finance” and you will be directed to the website of the management consultants’ quarterly report on corporate finance themes. Each quarter, five or six issues are considered in a succinct and intellectually well-founded manner with a focus on drawing actionable conclusions. Google “Damodaran online”, and you will land at the website of Aswath Damodaran, Professor of Finance at the Stern School of New York University. This site features models, including lots of detailed valuation models; data, including important sectoral cost of capital data; and Damodaran’s blog, where he analytically considers important current financial topics. Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

With advice comes responsibility as almost all advice has consequences, writes Des Peelo. As a Chartered Accountant, whether in professional or commercial life, our qualification is relied on by others for knowledge and experience when we provide advice. Advice brings responsibility, as almost all advice has consequences. A course of action undertaken, an investment made, a decision taken, a matter rectified, a risk addressed, and so on. The accountant can sometimes be unaware that somebody has interpreted a comment or course of action as advice. Even responding to a casual enquiry can be an everyday hazard in a complicated and regulatory world. Letter of engagement I, in common with other professional advisers, have experienced clients or circumstances where it is later claimed that advice was wrong or inadequate. Thankfully, none developed into legal claims – though I have acted as an expert witness in many such cases. Common factors in these claims included allegations that the client subsequently raised an issue that was not within the original remit, or did not take the advice, or varied its implementation to suit a different purpose. It may not always be possible in everyday commercial situations, but it is invariably wise to have a clear letter of engagement (LOE) signed as accepted by the client in advance of undertaking the work. The real relevance is that the LOE can avoid any later claim of misunderstanding or ambiguity. The LOE can also state in advance what is to be excluded in the advice, as explained below. Create clarity In my experience, it is increasingly necessary to ensure that the recipient understands what the advice is not, as well as what it is. For example, that it is not legal advice, that it is not tax advice as may arise, or that the advice cannot be taken as reassurance to a third party (such as a bank or fellow investors) as to the standing or validity of the circumstances relating to the advice. The advice is for the recipient alone, and there is no responsibility to third parties. The subsequent written advice to the client may then state: “This advice is provided in accordance with the signed letter of engagement (LOE), dated 1 April 2020. For good order, a copy of the LOE is attached to this letter”. Chinese walls Experience suggests that most professional indemnity claims for negligence arise through allegations of omission. In other words, some aspect was overlooked or understated by the adviser and should have been appropriately addressed. This, of course, enters into the grey area of opinion of which there is little legal definition beyond a simplistic analysis as to what your peer group would have done in the circumstances. In the ordinary course of events, a Chartered Accountant is unlikely to face a conflict of interest in giving advice – although a wary eye is necessary for Ireland’s relatively small business network. Others may, however, experience conflicts of interest in a different way, as explained by a straight-faced story from the rarefied world of high art dealings. In a frank memoir, a retired director of a major auction house in London explained  ‘Chinese walls’ as follows: on one side of the auction house, the potential seller of a painting is reassured as to this being the best time to sell a painting. On the other side, in the same auction house, the potential purchaser is reassured as to the wisdom of investing to future advantage in the same painting. Be brave Good advice is always worth it, but the advice might be unexpected. A senior politician, for example, battered by the vagaries of the world, remarked to me that if you are ‘being an eejit’, the best advice sometimes comes when the adviser tells you so in plain terms. And how much should one charge for all this great advice? A wise PR lady, not entirely tongue-in-cheek, once told me that advice should always be reassuringly expensive. Des Peelo FCA is the author of The Valuation of Businesses and Shares, which is published by Chartered Accountants Ireland and now in its second edition.

Richard Day and Alannah Comerford explain how Chartered Accountants can enhance their organisations’ data transformation capabilities using Alteryx. With the recent changes to the FAE syllabus, which now includes Tableau, Alteryx and UIPath, the new crop of qualified Chartered Accountants will bring these skills into the workplace. In this article, we will discuss the advantages of using a data processing tool such as Alteryx. The Institute has recognised the value that Alteryx provides, and the onus is now on all of us to leverage the skills and knowledge our bright new crop of young accountants will bring to the workplace. Reflect on the tasks we are required to complete regularly as part of our role as a modern-day Chartered Accountant. Many of us would find that, despite not considering ourselves to be data experts, we cleanse, filter, summarise, append and cross-reference datasets – even if we don’t think of our actions in these terms. We often turn to spreadsheets to do these data-heavy tasks. Many of us have picked up a spreadsheet which has multiple tabs, complex formulae, thousands of rows of data and found it challenging to figure out what is happening. Also, these complex transformations and calculations often have undocumented steps, can be slow to update, require manual effort to repeat, and generally could be better controlled. Alteryx is a data processing tool that facilitates data transformations and calculations in a controlled and repeatable manner and can revolutionise how we process and analyse data.  Given the user-centric design and functionality, all accountants should be able to pick up Alteryx and get started. In Alteryx, steps in a process are represented graphically in a format called a “workflow”. It should, therefore, be far easier for a colleague to view such a workflow and figure out what is happening than if they were to pick up a spreadsheet, as described above.  Repeatable data transformation Take the simple scenario where we need to carry out a task that requires information from two or more systems. We typically export information from each system into separate files and then transfer these files to tabs in a single spreadsheet to carry out the task by summarising information from one tab and looking it up in the other. In an ideal world, with fully integrated systems perfectly tailored to all of our needs, this would be possible to do automatically on the systems themselves. However, this level of integration is not a reality for most of us and as a result, we regularly spend our time on these data transformation tasks. In many cases, data manipulation often represents a significant proportion of the time taken and does not leave much time for the accountant to review and consider the results. Alteryx can help with the data transformation and processing elements of such tasks. It provides the accountant with a way to build a workflow to complete each of the required steps each time such analysis is performed. It would then be a matter of refreshing the input files as needed and running the workflow, eliminating almost all of the time associated with the transformation of the data (see Figure 1). Similarly, Alteryx offers excellent value to an accountant by cleansing the data. In a world with imperfect and unintegrated systems, there may be data quality issues as well as inconsistent data across different systems. We have become used to removing leading zeros in an account or reference number, correcting misspelt names, or translating names of customers or products, so they match across systems. Alteryx allows us to build these data cleansing routines into a workflow to ensure that they are automatically performed the same way any time a file of this type is processed, unlocking real efficiencies. Where we need to perform tasks such as sorting, manipulating or joining files of any reasonable scale, Alteryx comes into its own. Standard steps that are performed regularly are prime targets for Alteryx. This affords excellent opportunities for Chartered Accountants to begin using this tool, as they should have an exceptional understanding of the activity required and the associated inputs and outputs. Robust data processing While many of the functions discussed above would be possible with other tools, Alteryx also has the added advantage of allowing the user to make the data transformation process more robust. While at first, it may be slightly more challenging to use Alteryx rather than filtering, sorting and using copy and paste in a spreadsheet, a Chartered Accountant will quickly become familiar with the tool given its graphical nature. Also, the rigour that is brought to a process by a user deliberately building specific steps into a workflow lends itself to robust processing. In Alteryx, it is also possible and recommended to build in controls to provide comfort over the completeness and accuracy of the information being manipulated at critical stages of the process, assuring that all required data is included and that the result is accurate. The processing is a little more opaque since it generally sits in data files rather than yet another tab on a spreadsheet. You should, therefore, build in the ability to browse the interim data at various stages of your process so you can troubleshoot or review how it looks and check that the different steps are performing as expected. When performing calculations or analysis in a spreadsheet, a small change can cause an error in a set of calculations, and it can be challenging to identify where the error is occurring. There may be hundreds or even thousands of iterations of a formula. As a result, we often see data anomalies fixed with hard-coded values. This is much better in Alteryx as good design will allow errors to be identified and a user cannot revert to hard-coding values, which may not be appropriate for future iterations of a calculation. It is also easier with Alteryx to ensure that inputs are used as provided. It provides a mechanism to revert to the source data when required, which also contributes to the robustness of a process.  Processing at scale In Alteryx, tasks can also be carried out using large volumes of data that would only have been attempted by the bravest of spreadsheet proponents, making tasks that were previously tricky (or in some cases, impossible) more feasible. Some spreadsheets have an outer limit of up to one million lines, but in many cases, the practical limit is much lower since adding formulae to files with only thousands of records can cause them to slow down drastically. Alteryx can handle the bigger datasets we now encounter. In addition, making changes to calculations in spreadsheets can be time-consuming and many have encountered spreadsheet files crashing. Alteryx generally allows changes to be made and re-run quickly. Many workflows will run in seconds while processing simple transformations for millions of records should only take a few minutes. This is a huge advantage when building a workflow, as it enables the user to experiment efficiently and add additional functionality with ease. Documentation The ability to review a workflow and the controls built into it affords management excellent oversight of calculations that may drive critical outputs. Detailed documentation of processes is something that is not always present, especially for data-heavy tasks that began as an ad hoc exercise but are now embedded in everyday activities. Performing data transformation in a tool such as Alteryx and adding annotations to workflows has the added benefit of encouraging the user to define and document what is happening in a process. Outputs The outputs from Alteryx workflows can be produced in a range of formats. It may be that the most convenient output from your Alteryx workflow is a spreadsheet, such as debtors who are over their credit limit. It is also possible for visualisations, such as those covered in previous articles, to be refreshed automatically with data files produced from Alteryx. This can help Chartered Accountants provide significant value to their businesses. Significant value Alteryx may not be required when you are working with easy-to-manipulate data on a once-off basis. In an increasingly regulated and controlled business environment, however, the benefits associated with repeatable, efficient and documented data transformations are of significant value. As we are supported by our soon to be qualified Chartered Accountants on our data analytics journey, we encourage you to share your experiences within your teams. Knowledge-sharing and an open attitude to the improvements technology can bring will breed success.   Richard Day FCA is Partner, Data Analytics & Assurance, at PwC Ireland. Alannah Comerford ACA is Senior Manager, Data Analytics & Assurance, at PwC Ireland.

Eimear McGrath explores some of the key impacts of the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019 and asks to what extent they will widen the financial reporting and filing obligations for partnerships. Signed into law at the end of November 2019, the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019 (S.I. No. 597/2019) (the 2019 Regulations) came into operation on 1 January 2020. The effect of these Regulations is to bring the statutory financial reporting and filing obligations of certain “qualifying partnerships” more in line with those of companies formed and registered under the Companies Act 2014 (the 2014 Act), the main aspect being the requirement for qualifying partnerships to file and make public their financial statements. This article explores some of the key impacts of these Regulations on such qualifying partnerships in respect of their financial reporting and filing obligations. It may be of particular interest to professionals that organise their business as a partnership. What were the financial reporting and filing obligations of partnerships until now (under the 1993 Regulations)? Prior to the commencement of the 2019 Regulations, the European Communities (Accounts) Regulations 1993 (as amended) (the 1993 Regulations) set out the scope of partnerships that were subject to requirements for the preparation, audit and filing of financial statements that were generally equivalent to those applying to companies under the 2014 Act. In summary, the requirements of the 1993 Regulations applied to any partnership (both general partnerships established under the Partnership Act 1890 and limited partnerships established under the Limited Partnerships Act 1907), all of whose partners – and, in the case of a limited partnership, all of whose general partners – were limited corporate bodies or other entities whose liability was limited. It also required that such partners or general partners that were limited corporate bodies, or other entities whose liability was limited, were registered in an EU member state. Therefore, for example, such partnerships using limited companies registered in the Isle of Man or the Channel Islands did not have to file their financial statements. These 1993 Regulations are revoked by the 2019 Regulations, except to the extent that they relate to the financial years of a “qualifying partnership” commencing before 1 January 2020. What is a qualifying partnership under the 2019 Regulations? The 2019 Regulations introduce a new definition for a “qualifying partnership”, which is set out in Regulation 5. The definition does not ultimately change the previous requirement in the 1993 Regulations of bringing certain partnerships whose members enjoy the protection of limited liability into scope for the preparation, audit and filing of financial statements. However, it does extend the definition in the 1993 Regulations and has been reworded to address the other entity types as defined in the 2014 Act. It incorporates partnerships (both general, established under the Partnership Act 1890 and limited, established under the Limited Partnerships Act 1907), all of whose partners and, in the case of a limited partnership, all of whose general partners, are: limited companies; designated unlimited companies (designated ULCs); partnerships other than limited partnerships, all of the members of which are limited companies or designated ULCs; limited partnerships, all of the general partners of which are limited companies or designated ULCs; or partnerships including limited partnerships, the direct or indirect members of which include any combination of undertakings referred to above, such that the ultimate beneficial owners of the partnership enjoy the protection of limited liability. Regulation 5(2) also further extends the above list to include any Irish or foreign undertaking that is comparable to such a limited company, designated ULC, partnership or limited partnership. However, the reference to such foreign undertakings having to be registered in an EU member state has been removed. It is worth explaining some of this in further detail. A limited company is any company or body corporate whose members’ liability is limited. Designated ULCs are defined in Section 1274 of the 2014 Act and include, amongst other entity types, unlimited companies that have a limited liability parent. Such designated ULCs are not exempt from the requirement to file financial statements with their annual return. In considering whether an undertaking is “comparable”, Regulation 5(3) sets out certain guiding principles that would suggest comparability while Regulation 5(6) states that in making the assessment, regard should be had to whether the liability of persons holding shares in the undertaking is limited. The reference to shares is cross-referenced to Section 275(3) of the 2014 Act, which sets out the interpretation of the meaning of “shares” and mentions that, in the case of an entity without share capital, the reference to shares is to be interpreted as a reference to a right to share in the profits of the entity. Regulation 5(5) defines “ultimate beneficial owner” as meaning “the natural person or persons who ultimately own or control, directly or indirectly, the partnership or undertaking”. The concept of “ultimate beneficial owner” is also referred to in Section 1274 of the 2014 Act, which provides that certain designated ULCs must prepare and file statutory financial statements with their annual return. The types of entities that fall under the definition of a designated ULC in Section 1274 are clearly set out and the definition specifically includes a guiding principle whereby if the ULC’s ultimate beneficial owners enjoy the protection of limited liability, they will fall under the definition of a designated ULC. There is, however, no definition of “ultimate beneficial owner” provided for in the 2014 Act. It has generally been interpreted to incorporate not only natural persons, but also orphan entities that directly or indirectly enjoy the benefits of ownership. It is clear from the definition in the 2019 Regulations that the “ultimate beneficial owner” must be a natural person. Whether the definition of “ultimate beneficial owner” in the 2019 Regulations carries through to the interpretation of “ultimate beneficial owner” in Section 1274 of the 2014 Act in the context of ULCs will need to be further considered. What are the consequences of being a qualifying partnership in respect of financial reporting and annual return filing obligations? Qualifying partnerships will apply Part 6 of the 2014 Act, which addresses the accompanying documentation, including financial statements, required to be annexed to the annual return. Existing partnerships that fall within the scope of the 1993 Regulations have generally been required to meet such obligations. However, the extension of the definition of qualifying partnerships means that many more partnerships (such as those using limited companies registered in a non-EEA member state, for example) will now be required to file financial statements and make them publicly available. The application of Part 6 of the 2014 Act to qualifying partnerships is addressed in Part 4 of the 2019 Regulations. The general principle of the 2019 Regulations, as stated in Regulation 7, is to apply Part 6 of the 2014 Act to a qualifying partnership as if they were a company formed and registered under that Act, subject of course to any modifications necessary to take account of the fact that the qualifying partnership is unincorporated. Part 4 further goes on to modify or dis-apply certain provisions of Part 6 of the 2014 Act for qualifying partnerships. Some notable modifications and dis-applications are discussed below. Interpretation of terms Regulation 8 outlines certain terms in Part 6 of the 2014 Act pertaining to “companies” that should be construed differently for the purposes of qualifying partnerships. Where Part 6 of the 2014 Act refers to the directors, secretary or officers of a company, it should be construed as a reference to members of a qualifying partnership (i.e. in the case of a partnership, its partners and in the case of a limited partnership, its general partners). Any duties, obligations or discretion imposed on, or granted to, such directors or the secretary of a company should be construed as being imposed on, or granted to, members of the qualifying partnership. Where such duties, obligations etc. are imposed on, or granted to, such directors and the secretary jointly, they shall be deemed to be imposed on, or granted to (i) two members of the qualifying partnership, where it is not a limited partnership; and (ii) in the case of limited partnerships, if there is only one general partner, that partner; or if there is more than one general partner, two such partners. References to the “directors’ report” of a company should be construed as references to the “partners’ report” of a qualifying partnership, unless otherwise provided. The date of a company’s incorporation will be construed as the date on which the qualifying partnership was formed. Any action that is to be, or may be, carried out at a general meeting of the company will be deemed to be any action that is to be, or may be, carried out at a meeting of the partners, or otherwise as determined in accordance with the partnership agreement. Dis-application of certain provisions in Part 6 of the 2014 Act in respect of financial statements The 2019 Regulations dis-apply certain provisions that are contained in Part 6 of the 2014 Act to the financial statements of qualifying partnerships. Amongst these are: the general obligation to maintain and keep adequate accounting records and the statement in the directors’ report pertaining thereto; and the requirement for Companies Act financial statements to comply with applicable accounting standards, to provide a statement of such compliance, and to disclose information in relation to departures from such standards. In reality, these dis-applications arise as a result of a legal technical issue. Regulations brought into law by virtue of a Statutory Instrument are often used to implement EU Directives. Such Statutory Instruments may not include provisions that do not form part of the underlying EU Directive. The purpose of the 2019 Regulations is to give further effect to Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings (the 2013 EU Accounting Directive). The general obligation to maintain and keep adequate accounting records and the requirement for Companies Act financial statements to comply with applicable accounting standards did not derive directly from that 2013 EU Accounting Directive. However, since qualifying partnerships are required to prepare statutory financial statements that give a true and fair view, it stands to reason that they will need to maintain adequate accounting records to support the preparation of such financial statements, and will also need to comply with applicable accounting standards in order for the statutory financial statements to give a true and fair view. There are additional dis-applications arising from the fact that certain provisions will not apply in the case of a qualifying partnership, such as the requirement to provide details of authorised share capital, allotted share capital and movements therein, the requirement to disclose information on financial assistance for purchase of own shares, and the requirements in the directors’ report to disclose directors’ interests in shares and interim/final dividends, among other items. The relevant dis-applications and modifications are set out in detail in Part 4 of the 2019 Regulations. Application of other company law to qualifying partnerships Part 7 of the 2019 Regulations provides for the application of the European Union (Disclosure of Non-financial and Diversity Information by certain large undertakings and groups) Regulations 2017 [as amended by the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) (Amendment) Regulations 2018] to qualifying partnerships as if they were companies formed and registered under the 2014 Act. Part 6 of the 2019 Regulations also imposes the requirements of Part 26 of the 2014 Act in respect of payments made to governments on certain qualifying partnerships.  These are subject to any modifications necessary to take account of the fact that the qualifying partnership is unincorporated. Annual return filing obligations The requirements in relation to the obligation to make an annual return are set out in Regulation 21 of the 2019 Regulations, which state that the annual return of a qualifying partnership is to be in the form prescribed by the Minister for Business, Enterprise and Innovation. Qualifying partnerships will be required to submit to the Companies Registration Office (the CRO) their annual return accompanied by financial statements, and by a partners’ report and auditor’s report, where relevant, for each financial year-end. The CRO notes that the relevant form for filing the annual return is Form P1, which requires details of the partnership name and its principal place of business. The annual return form required to be filed by companies is Form B1, which requires additional information such as authorised and issued share capital, members and their shareholdings, for example. Conclusion So, what actions should members of the Institute take?  Members should familiarise themselves with the requirements of the 2019 Regulations. While this article explores some of the financial reporting and filing provisions in the Regulations, it does not touch on other aspects such as those regarding the audit of financial statements and reporting by auditors. It is clear, for example, given the extension of the definition of qualifying partnerships by the 2019 Regulations, that Institute members should check whether partnerships they are involved with, either in an employment or in an advisory capacity, will now be required to file and make public their financial statements, with effect from financial years commencing on or after 1 January 2020. Failure to comply with this, and other specified provisions of the 2014 Act will result in an offence being committed and therefore, legal or professional advice should be sought where necessary. Eimear McGrath is Associate Director at the Department of Professional Practice  in KPMG.

Kim Doyle considers the best course of action for businesses that are strained financially as a result of the impact of COVID-19. COVID-19, a term that was not part of most members’ vocabulary a mere two months ago, is now the unwanted commandeer of conversations. Self-isolation, social distancing, WFH (working from home) and CC (conference call) have become part of our basic business language. But we must not forget to keep talking about the old reliable, tax. Continue to talk to Revenue, as early as possible, if you are now experiencing timely tax payment difficulties. This is one of their key messages. The other is to get tax returns in on time. At the time of writing, Revenue’s message to businesses strained financially as a result of the impact of COVID-19 is that they will work to resolve tax payment difficulties. Viable businesses that experience cash flow difficulties have long been encouraged by Revenue to engage with them as early as possible. Often, entering a phased payment arrangement is the appropriate practical step to deal with outstanding tax payments. In fact, at the end of 2019, over 6,300 business had such arrangements in place covering €73 million in tax debt, according to Revenue. Revenue will only agree to a phased payment arrangement provided the relevant tax returns are filed with them, the tax due is fully calculated, the business is viable and there is early and honest engagement. Applications for such an arrangement can be made via the Revenue Online Service (ROS). Supporting documents will be required; the volume of documentation depends on the level of outstanding tax payments. A down-payment must be made, which can range from 25-40% of the total tax payment, which may include interest. Agents can apply on behalf of their clients via ROS. Applications are typically responded to within two weeks; in many cases, arrangements are up and running in a matter of days. Responding to the difficulties arising from the impacts of COVID-19, Revenue has implemented specific measures for small- and medium-sized enterprises (SMEs) experiencing trading difficulties. Perhaps the most important being that interest will not be applied to late tax payments of VAT for the January/February period (due by 23 March) or employer PAYE liabilities for the months of February and March. Any future similar suspension will be considered at the relevant time, Revenue say. For other businesses experiencing temporary cash flow or trading difficulties, the advice from Revenue is to contact the Collector-General’s office directly or the appropriate Revenue division. Revenue has also suspended all debt enforcement activity, for now. Current tax clearance status is expected to remain in place for all businesses over the coming months.  And in an effort to ease the burden on households, Revenue also announced the deferral of certain local tax payments (annual Debit Instruction/Single Debit Authority) to 21 May from 21 March. As of now, there is no statement from Revenue on dealing with other taxes such as corporation tax. In this unprecedented turbulent environment, protecting the tax receipts must be one of the priorities for Government. It is hoped that any dip in tax receipts will be confined to 2020. However, as long as we continue to talk about COVID-19 and suffer the impacts, we must also continue to talk to Revenue. Kim Doyle FCA, AITI-CTA, is Tax Manager at Chartered Accountants Ireland.

Economic forecasting can be a difficult business, especially when you consider the ‘unknown uncertainties’ the world is currently facing, writes Annette Hughes.  Businesses do not like uncertainty but, at present, that is the prevailing economic theme. An uncertain political situation, ongoing Brexit negotiations and the recent coronavirus outbreak remind us how vulnerable the economy can be to external shocks. Those in the business of economic forecasting understand this vulnerability very well. The purpose of an economic forecast is to measure the impact of ‘known uncertainties’ on future economic performance, but the future is unpredictable and this is further complicated by the ‘unknown uncertainties’ we now face.  Economists, in making their projections for economic growth in 2020, would not have been aware of the coronavirus outbreak until the first reports of a cluster of cases were identified on 31 December 2019 in Wuhan, China. The rapid and continuing escalation of COVID-19 has led economists to revise their economic forecasts downwards, as the initial output contractions in China begin to be felt around the world. It remains unclear what the full effects will be on the movement of people and goods, and economic activity, while the response of policymakers is evolving on a daily basis. Global economy In early March, the OECD reported on the considerable human suffering and major economic disruption that had resulted from COVID-19. OECD global growth in 2020 was revised downwards, by around 0.5 percentage points to 2.4%, from an already weak forecast of 2.9%. The adverse impacts on confidence, financial markets, the travel sector and disruptions to supply chains were all factors contributing to the downward revision. However, without knowledge of the full impact of the virus, the OECD acknowledged that, should the outbreak be more intense and last longer than predicted, global growth could drop to 1.5%. Economists at Oxford Economics believe that the virus will result in Q1 2020 being the first global contraction since Q1 2009, with overall growth of 2% for the year, the slowest pace in the last decade. Irish economy The OECD forecast for economic growth in the euro area was revised downwards by 0.3 percentage points to 0.8% in 2020, although, given that the spread to Europe did not materialise until February, this forecast is likely to be subject to further downside risks.  Ireland has an open economy reliant on international trade and global markets to support economic growth. Ireland and its economy accounts for just 0.4% of global GDP and 0.06% of the world’s population. However, it still remains vulnerable to the impact of the COVID-19 virus.  Economic growth in Ireland will definitely be weaker than projected should the virus spread for an extended period. The main impacts are likely to be felt through supply chain disruptions, travel and tourism restrictions, and reduced mobility (affecting consumer spending and workers staying at home). There have already been reports of delays in the delivery of imported products in the construction sector, according to the Ulster Bank Construction Confidence Index. It has been acknowledged that Ireland will likely follow a pattern seen in other European countries and the Taoiseach’s measures to minimise the spread of COVID-19 could be significant, but much less than the economic and social consequences of acting too late. The flexibility that Irish businesses have demonstrated in dealing with evolving economic, political and social trends are acknowledged in EY’s February 2020 Economic Eye. EY Chief Economist, Neil Gibson, correctly pointed to the coronavirus outbreak as likely to damage global growth in 2020, but as a rapidly evolving situation, it is difficult to predict the full economic impact on the island of Ireland. The closure of many public institutions and private businesses in the Republic of Ireland will no doubt further slow growth across the island, but the sectoral and regional impact will vary greatly. It important to remember, however, that this is first and foremost a human crisis, and we must think about people first. Moving away from GDP numbers, we must look at what business, governments and individuals can do together to help get us get through this incredibly difficult period.  Clearly, these are unprecedented times and taking such developments into account makes economic forecasting a difficult business.   Annette Hughes is a Director at EY-DKM Economic Advisory.

While support for diversity and inclusion is welcome, it is now time for business leaders to instigate meaningful change, writes Rachel Hussey. In the past ten years, diversity of all kinds – but gender diversity in particular – has become an area of focus for almost all business leaders. In what can be interpreted in many ways as progress, the 30% Club, which I currently chair, has been asked more frequently if 30% is a sufficiently ambitious goal. 30% Club Ireland is a group of Chairs and CEOs of 260 Irish organisations who agree with our goal to ensure that 30% of board members and senior management in Irish businesses are women. The Club was founded in the UK in 2010 by Helena Morrissey, and the Irish chapter was established in 2015. The 30% title was adopted because 30% is the critical mass that a minority must reach in a group to have an effective voice. And 30% is very much a floor and not a ceiling in terms of our goals and ambitions. I am a lawyer, but law firms and advisory and accounting firms face the same challenges around inclusion and diversity. In this rapidly changing world, with new careers emerging all the time, professional services firms have to find ways to stay attractive to graduates (both men and women) and to retain them once they have been trained. In other words, diversity may be a moral imperative, but it is also a necessity for business. Today’s graduates expect to find diversity where they work. That wasn’t the case in the 1990s when I started in practice. There was no discussion about diversity in business back then. There was a concept of ‘equality’, which was confined mainly to pay and conditions. The feminist movement was a social one, focused on issues like contraception. The Women’s Political Association was advocating for more women in politics, but the business world was separate to all of that. And I think many of the women who were in that business world either didn’t focus on the lack of diversity or were too isolated to speak up in any meaningful way. I was, of course, aware of the social movements while I was in college, but I assumed that the world was mostly a fair place and that if you were good enough, you could do whatever you wanted to do. Women were very well represented in the top of my class in Trinity. I didn’t even notice when I was doing a master’s degree at Harvard Law School that only a quarter of my class were women. After I qualified, however, a few incidents surprised me. When I attended an event with my then-boss, and we met his sister, she asked me how long I had been my boss’ secretary. When I was pregnant with my first child and was the primary breadwinner, I realised that I was going to have to rely on social welfare payments to survive. And then I had to make – and saw other women having to make – career decisions that weren’t decisions, as there was no choice. Spurred on by all of this, my women partners and I came together in 2008 and came up with plans to empower the women in our firm. And when I saw Helena Morrissey speak in Dublin in 2013, I knew the 30% Club was a real game-changer because it had clear goals, was business-led and – most importantly of all – included men, without whom no real change will ever be possible. There has been some progress, but perhaps we in professional services firms need to take some bolder steps now – for our men and women. We need to recognise the needs of a more modern workforce and find ways to integrate family life and absences into a career path rather than separate to, or an exit from, a career path. That includes better career planning built around family absence and greater recognition and accommodation of the needs of men in their desire to play an equal part in family life.  We need to recognise the potential for 24-hour demands in a digital age and become more agile in how we work and how we rest – as individuals, as parents, as carers and as human beings – and we need to demonstrate and practise this, starting from the top. We all state our commitment to diversity and equality of opportunity. It’s now time to prove our commitment. Rachel Hussey is Chair of 30% Club Ireland and a Partner at Arthur Cox.  

The resourceful con artist has now moved to online scams, but old advice still holds, writes Des Peelo. Confidence and a presence are often perceived as necessary for business or personal success. This resonates with me in the context of recognising con artists, better described as fraudsters, whom I have encountered. The most outstanding was an approach from a gentleman, intending to be my client, who lived in a suite in one of the great London hotels. Of indeterminate nationality, his occupation – or the source of his apparent wealth – was not evident. Happily, I withdrew from involvement early in the saga but became aware of subsequent events. A mine of false information This gentleman was promoting an opportunity for investment, which was highly confidential, in newly discovered vast ore resources adjacent to a previously worked-out mine in Ireland. The geological studies and supporting paperwork (all forged) was there. The scam worked for nearly £3 million. British aristocracy and London financiers, amongst others, came on board. Subsequently, this gentleman was arrested in the UK. He was refused bail as the police said they found nine passports in his suite. After one year on remand in a London prison, the charges were inexplicably dropped, though an accomplice and a UK solicitor were subsequently jailed. No monies were recovered. During that year in prison, my almost-client managed to have meals delivered from the hotel, paid monthly in advance. He also started a charismatic movement and a choir. On learning of his imminent release, he called the hotel manager, who reportedly said something like “wonderful news; we will send a car” and he moved back into his suite. That was not the end of the story. Some years later, on watching an investigative programme on UK television, there was my almost-client being named for a stunt involving investors and coffee futures in Central America. This time, still based in London, he allegedly had a prestigious commodities brokerage office in Miami. A load of beeswax Older readers may recall the origin of the description ‘widget’. It was first used in an amusing film, loosely based on a real event in the 1950s, about a Texas con artist launching a widget company on Wall Street. None of the financiers knew what a widget was or wouldn’t admit they didn’t know, but the word was that the oil industry was very excited about it. Hence the contemporary use of the word ‘widget’ when nobody understands the product. The modern equivalent of a widget, on occasion, might be a ‘tech disrupter’. My possible ‘widget’ moment involved another gentleman from London. He arrived in Ireland sporting impressive achievements, connections and qualifications (all bogus), including being a medical doctor. His business card showed an address on the famous medical Harley Street in London (which turned out to be a temporary post-box). Accompanied by a self-described titled lady, he rented a country mansion near Dublin and quickly entertained his way into the bloodstock and racing fraternity. He claimed to be developing a product akin to Viagra, long before it was invented. The connection with Ireland was that the magic ingredient could only be sourced from the blood and urine of top-bred horses. State agencies expressed interest, impressive international names were mentioned as possible directors, suitable sites were inspected, and so on. All that was missing, of course, was the millions necessary to bring it all together. Fortunately, shortly before substantial monies changed hands, a sceptical stud farm owner and the IIRS (then a State scientific agency) analysed a prototype unbeknownst to the bogus doctor. It was largely beeswax. The gentleman concerned managed to depart Ireland in time, leaving large unpaid bills. He was last heard of as being in Lebanon, again something to do with horses. Don’t be fooled The world has now changed for the con artist. The old scams are easily identified with instant access to history, profiles and technical information. However, the resourceful con artist has now moved to online scams. If an investment is too good to be true, it is. This adage has never changed. Des Peelo FCA is the author of The Valuation of Businesses and Shares, which is published by Chartered Accountants Ireland and now in its second edition.

Peter Vale and Christopher Crampton outline some expected changes to international taxation in the coming year. 2020 is set to be a busy year for international tax. For Ireland, it’s a key period. While international tax reform to date has been good for the country, the changes being looked at in 2020 pose challenges.   Global tax changes – Pillars One and Two The outcome of meetings in January are key to the OECD’s plans to reach consensus on both the Pillar One and Pillar Two proposals. While the Department of Finance expects the ultimate outcome to be a reduction in Irish corporate tax receipts by up to €2 billion, it’s a very difficult one to call. Pillar One examines a reallocation of profits to market jurisdictions. While this does impact on our corporate tax base, it should not prove fatal on its own. However, recent pronouncements from the US suggest that getting consensus on the Pillar One changes could be difficult. Pillar Two looks at a global minimum effective tax rate and is, perhaps, of more danger to Ireland. A tax rate of 12.5% was suggested by the French Finance Minister in December. While at first glance this would look positive from an Irish perspective, the devil is in the detail.   The most recent OECD draft proposals look at an allocation of profits to individual countries based on a group’s consolidated financial statements. This could provide a distorted result for groups with large intellectual property (IP) migrations to Ireland, in particular, and potentially lead to an effective tax charge significantly lower than 12.5%.  The early months of the year should provide key signals as to the direction of travel on both Pillars, with the outcome critical to the relative attractiveness of our corporate tax regime in the future. We should not rule out the EU taking matters into its own hands, particularly if reaching a consensus looks like being a protracted affair. Transfer pricing Finance Act 2019 saw the introduction of OECD 2017 guidelines into Irish tax legislation. One of the biggest impacts of the guidelines will be more onerous documentation requirements in 2020 for Irish companies, although many will already be maintaining similar documentation on a group-wide basis. At first glance, this might seem to cause disruption for Irish subsidiaries of US multinationals with significant IP in Ireland. While these groups typically have significant substance here, many of the IP functions are carried out outside Ireland; often in the US. Another key change in Finance Act 2019 was the introduction of transfer pricing for Irish small- and medium-sized enterprises (SMEs). While it is expected that the documentation requirements will be more relaxed for SMEs, the extension of transfer pricing will create further administrative requirements on Irish businesses. On the positive side, the extension of transfer pricing to SMEs is subject to Ministerial Order, which we might see later in 2020. Any transfer pricing requirements will apply from that date or later; they should not be retrospective to 1 January 2020. For businesses within the scope of transfer pricing now, more focus from Revenue in 2020 can be expected.   IP migrations 2020 will see the final year of “double Irish” migrations, with 31 December 2020 marking the end for groups with IP currently housed offshore in Irish incorporated non-resident entities. After that date, those entities become regarded as Irish tax resident. While many groups have already moved their IP onshore (much of it to Ireland), a significant number of groups have yet to do so. Hence, we expect many IP migrations to take place in 2020. When an IP migration takes place, the market value of the IP determines the amount of tax allowances available in Ireland. This number is often large, and so we expect to see Revenue examine these IP valuations closely. Interestingly, when these tax allowances expire then, all other things being equal, a significant increase in Ireland’s corporate tax receipts at some point in the future would be expected. However, a lot could happen in the intervening years! Revenue audit focus Aside from the focuses identified above, we don’t expect significant change in the nature of Revenue audit activity in 2020. We expect Revenue’s focus to remain on PAYE and VAT for SMEs, which tend to be the areas of greatest non-compliance.   On the corporation tax side, we have seen Revenue increasingly look for back-up supporting tax losses carried forward, which can prove challenging where the losses were generated some time ago but are being used presently. Businesses should be aware of this when considering document retention policies. Budget 2021 While Budget 2020 has just passed, it’s worth noting that this Budget was based on a more negative outlook than now appears to be materialising. This could mean we finally see more meaningful movement on our high marginal income tax rates later in the year, or possibly a reduction in capital taxes. Of course, a lot can happen between now and then, including a new government, further global tax changes, and six months of known unknowns! And, that’s all without mentioning Brexit. In summary, another year of significant developments on the international tax front looks likely, with the outcome critical for Ireland. Peter Vale FCA is a Tax Partner at Grant Thornton. Christopher Crampton ACA is an Associate Director at Grant Thornton. Brass Tax -- new year, new tax rules by Leontia Doran Since we’re fast approaching a new tax year in the UK (from 6 April 2020), let’s take a look at what is on the horizon for practitioners. IR35 rules From 1 April 2020, the IR35 rules in the public sector are being extended to the private sector with an exemption from the rules only available to “small” businesses. The IR35 legislation is designed to combat avoidance by individuals who are supplying their services to businesses via an intermediary (such as a company) but who would be an employee if the intermediary wasn’t used. Making Tax Digital From 1 April 2020, the UK will join the ranks of France, Italy, Austria, Turkey and Malaysia when it introduces its own digital services tax.  Making Tax Digital (MTD) for VAT continues. Some businesses are now able to apply for an extension to meet the digital links requirement once the one-year soft-landing period ends on either 1 April 2020 or 1 October 2020. However, the criteria to do so is strict, as set out in the updated VAT notice.  Corporation tax The rate of corporation tax is also legislated to fall from 19% to 17% from 1 April 2020. However, the Government has stated that it will remain at 19%. As it’s already on the Statute books, legislation will be needed to reverse this.  And therein lies the rub. The next UK Budget isn’t taking place until 11 March, which means the related Finance Act likely won’t be enacted until several months later. Retrospective legislation is never a good thing. Leontia Doran FCA is UK Taxation Specialist at Chartered Accountants Ireland.

Cormac Lucey argues that accountants need to discuss one of the most unjust outcomes of Government profligacy – the over-taxing of the State’s high earners. The UK electorate recently faced a general election where, under the leadership of an Islington Marxist, the British Labour Party was offering its most left-wing proposals for a generation. It proposed raising the rate of income tax on earnings above £125,000 (equivalent to €146,000) to 50%. With the 4% UK rate of PRSI, that would have required Britain’s top earners to pay a marginal rate of deduction of 54%. In the Republic, those of us of a right-of-centre political disposition are lucky not to have to face the prospect of barely diluted Marxism as a real policy prospect. Here, government control switches pretty seamlessly between right-of-centre Fine Gael and right-of-centre Fianna Fáil-led administrations. That’s the theory. The reality is something very different. Down south, top earners must already face a 52% (income tax 40%, universal social charge 8% plus 4% PRSI) rate of deduction on income above €70,000. Indeed, if a person is self-employed, they face a marginal rate of 55% on income above €100,000. In terms of top tax rates, high earners in Ireland already face marginal rates of deduction in excess of 50% at incomes of around twice the national average that the UK Loony Left was only contemplating applying on incomes of about four times that average. Largely unnoticed, the contours of the Irish tax system have changed very substantially since 2007. Income tax receipts are up €9.3 billion, or 68%, from 2007 levels. They have risen from 29% of total tax receipts to an expected 40% this year. Thirteen years ago, income tax proceeds were slightly lower than VAT receipts. Last year, they exceeded VAT receipts by 52%. The Organisation for Economic Co-operation and Development (OECD) has concluded that Ireland has the second most progressive income tax system among its 36 member countries and the most progressive among its EU members. In other words, high earners pay disproportionately more in income tax here than in nearly every other developed country in the world. Revenue’s Budget 2020 Ready Reckoner document reveals that the top 1% of income earners (those earning more than around €250,000) contribute more than a fifth of all income tax receipts, while the top 5% of income earners (those earning more than about €125,000) contribute more than 40% of total receipts. By contrast, the bottom 75% of income earners (those earning around €55,000 or less) contribute a mere 18% of total income tax proceeds. The top 1% lose an average of 42% of their income in State deductions while the bottom 75% lose an average of 9%. One might accept this dramatic soaking of high earners if it was required to save the State from imminent insolvency, but the Troika left town in 2013. Large rises in tax revenues since then have been used to fund dramatic increases in State spending rather than to reduce the national debt. When the Government first officially forecast total 2018 Government spending, it expected a total spend of €60.3 billion (according to the 2014 Stability Programme Update). In reality, the Government ended up spending €76.8 billion in 2018, 27% more than its original forecast. High earners are being soaked, not to save the State from bankruptcy or to secure minimum levels of State spending but, rather, to indulge a fiscally incontinent and gruesomely inefficient Government apparatus. It strikes me that we (as a profession) and Chartered Accountants Ireland (as a representative body) should speak more loudly about the clear errors and short-sightedness of this approach.  Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

As the new UK Government has been formed by the Conservative party with a significant majority, its policies will set the tax agenda for 2020 and the following four years. Claire McGuigan summarises the main proposals. Business taxes In Finance Act 2016, the rate for corporation tax for 2020/21 was set at 17%. As this rate is set in legislation, it is the rate (excluding the UK banking corporation tax surcharge of 8%) that companies must use for their deferred tax calculations. However, during the election campaign, the Conservative party pledged to maintain the rate at 19%. Therefore, once this change is enacted, businesses will need to revisit their deferred tax calculations. The Chancellor is expected to stick to the existing plans to introduce restrictions to payable research and development (R&D) tax credits from April 2020 to reduce the scope for tax avoidance by small- and medium-sized enterprises (SMEs). However, the Conservatives have pledged to increase the value of the R&D expenditure credit (RDEC) for larger companies from 12% to 13% and review the project qualifying criteria to establish if it can be widened to include R&D on cloud computing and data. They also committed to increasing the relief available under the new structures and buildings allowance to 3% a year. Both of these changes are likely to take effect from 1 April 2020. The Conservative party confirmed its commitment to introduce a Digital Services Tax (DST) from April 2020, although it is not clear if there will be enough time to finalise the necessary legislation by then. Also, at the time of writing, the OECD has asked the UK to postpone implementation of this tax to allow for a standard approach to be considered across all countries. During the election campaign, all three main parties promised to review the impact that the IR35/off-payroll labour changes will have on private sector businesses. Given that these changes were longstanding Conservative party policy, it is unlikely that they will be abandoned entirely. However, delaying the changes until 2021 or committing to a ‘post-implementation review’ may feature in the Budget. Similarly, the outcome of the Loan Charge Review is expected. Again, for the Government to abandon this tax enforcement action seems unlikely, but the Chancellor may announce much more flexible payment terms for individuals facing the charge. Finally, for business taxes, the Conservative party manifesto contained a promise not to raise the rate of VAT during the next parliament. Brexit The promise to “get Brexit done” was central to the Conservatives’ election campaign. With a transitional period operating until 1 January 2021, most operational laws and cross-border arrangements will remain in place until that date. During 2020, the new Government will aim to negotiate a post-Brexit trade deal with the EU that will take effect from 1 January 2021. However, some uncertainty will continue: in the election campaign, the Prime Minister promised not to extend the transition period beyond 1 January 2021 so, theoretically, there may still be a ‘no-deal’ Brexit if a trade deal is not agreed. Alternatively, an extension to the transition period may be possible if a post-Brexit deal takes longer to agree. Employer issues Although the Conservative party committed to ending freedom of movement on Brexit day, under the transitional rules, EU citizens would be able to come to the UK to live and work without any formal application process. If those individuals wish to remain in the UK after 31 December 2020, they can apply for “temporary leave to remain” in the UK which, if granted, will allow them to continue living and working in the UK for 36 months from the date it is granted. From 2021 onwards, the Conservatives plan to introduce a points-based immigration system. Despite the national insurance contributions (NIC) changes for individuals, the Conservatives pledged not to increase NIC for employers and, to help small employers, they also plan to increase the NIC employment allowance from £3,000 to £4,000. Employers should prepare for a significant increase in the national minimum wage (NMW) from April 2020. The Conservative party has pledged to increase it in stages to £10.50 over five years – this equates to a 5% increase from April 2020 and each subsequent year of the parliament. Personal taxes During the election campaign, all the main parties proposed changes to capital gains tax, although the Conservative party proposals were the least radical. The Conservative manifesto did pledge to “review and reform” entrepreneurs’ relief (ER). While it is perhaps unlikely that the valuable ER rules will be immediately repealed, there may be some interim changes to the rules announced in the Budget, pending the outcome of a more fundamental review during 2020/21. The Conservatives intend to raise the annual NIC starting threshold for employees to £12,500 over the next parliament, with an immediate increase to £9,500 from April 2020. The rates of NIC will be frozen for the duration of the new parliament. The Prime Minister also made an election commitment not to increase income tax rates during the new parliament. Past political controversy over pension tax relief perhaps influenced politicians not to make specific commitments on the topic during the election campaign. However, because of the impact the annual allowance charge is having on senior NHS clinicians, the Government has already announced temporary measures to ensure that where they take on additional hours, such individuals would not lose out overall. The ‘quick fix’ compensation arrangement announced during the election campaign is unlikely to be sustained for the long-term, and a review of the underlying rule is likely to be announced in the Budget as it can trigger tax charges for many workers in the public sector (and private sector). On tax avoidance, they propose a new package of measures including doubling the maximum prison term to 14 years for individuals convicted of the most serious types of tax fraud and creating a new HMRC Anti-Tax Evasion Unit.   We await the Government’s first budget, scheduled for 11 March 2020, with anticipation. Claire McGuigan is Director, Corporate Tax, at BDO Northern Ireland.

The ability to judge the mood music of society could be our greatest asset in shaping how the profession is perceived, writes Dr Brian Keegan. If you happen to be an auditor and are of a sensitive disposition, look away now. Apparently, you are not a member of a profession. This is just one of the suggestions of the Brydon review into the quality and effectiveness of audit, which was published at the end of last year. Brydon’s work was prompted by public disquiet over high-profile business collapses in the UK, where it was believed that the auditors should have done better. The standard response of politicians everywhere to topics that make them uncomfortable is to commission a review. In that way, action is seen to have been taken and the discomfort is spread around. There are many reasons, of course, why Brydon is wrong about auditing not being a profession. An audit is, after all, about the exercise of intellectual skill and knowledge. It is an unfortunately flippant conclusion in a study that otherwise has a lot going for it. Worse, in the court of public opinion, many people won’t necessarily make a distinction between what an auditor is and does, and what an accountant is and does. It is therefore inevitable that the profession often finds itself in the uncomfortable position of having to explain itself. It doesn’t matter that our most immediate stakeholders – board members and investors – know perfectly well the contribution of the audit and the role of the auditor. Government policy in any area is not exclusively formed by listening to, and then following, the views of knowledgeable stakeholders. The perception of the accountancy profession can be contradictory. Surveys conducted by Edelman (admittedly commissioned by this Institute) report that the level of confidence in accountants among financial decision-makers is high relative to the level of confidence in other professions. Yet public opinion is all too willing to jump on the bandwagon when they think we get it wrong. For instance, the response to the exclusion of the former Chair of Anglo Irish Bank, Mr Sean Fitzpatrick, from Chartered Accountants Ireland was heavily skewed. Much of it focused on the length of time our proceedings appeared to take. No one seemed interested that the Director of Public Prosecutions wanted the State’s actions in the matter to conclude first, hence a seven-year delay. Understanding this lack of interest is important because the effective communication of what the profession is and does relies heavily on the receptiveness of the public audience. There are lessons here from politics. Prime Minister “Get Brexit Done” Johnson and President “Make America Great Again” Trump are widely lauded for their communication skills, but that misses the point. The genius of the messaging of Prime Minister Johnson and President Trump is not in their capacity for articulation – it is in their capacity to read the mood of the public. During the recent hustings in the Republic of Ireland, the major political parties would have fared better using slogans like “give people homes” or “hospital beds, not trolleys” instead of plaintive murmurings about futures we can look forward to, or an island for all. Like the more successful politicians, the accountancy profession has to get better at reading public opinion and responding to that mood. If we fail to get across the ethical value and the competency involved in the work that accountants do, and the wider contribution made to society by virtue of that, future government policy towards accountants and auditors will be shaped by the negativity that is already out there. Much is made of the challenge to the profession from things like artificial intelligence and robotic process automation. You can add to that list the suspicion with which the profession is viewed. We now know that some don’t even consider that auditing is a profession at all. Dr Brian Keegan is Director, Advocacy & Voice, at Chartered Accountants Ireland.

Against a backdrop of underinvestment, housing will remain a key economic concern for the new Government, writes Annette Hughes. With 2020 well under way, some of us have already broken our New Year’s resolutions and had our focus shifted to the plethora of election resolutions and promises which emerged over the past four weeks. With the election now behind us, political leaders will need to focus on delivering on those election promises.  Governments generally have a five-year term to fulfil their promises, but experience tells us that some of the policy commitments promised in party manifestos may never be implemented. The new Government faces both challenges and opportunities in steering a sustainable economic path as it embarks on a new term. One of its key functions is to administer public policy and deliver high-quality public services and infrastructure across a range of areas including housing, health, education and transport. Notably, housing was the topic that received the most attention during the election campaign and it remains the Government’s number one priority. There continues to be underinvestment in both private and social housing, and the demand for housing significantly exceeds the current supply. Much has been made of the doubling of housing stock from 2016 to 2019 with 21,000 new homes, however the national annual housing supply requirement is closer to 35,000. We were informed during the election campaign that 6,000 new social housing units were built in 2019. Yet, data from the Department of Housing, Planning and Local Government shows that there were 2,003 new social housing units built in the first nine months of 2019, or 2,229 units when local authority vacant units brought back into the stock are included. Adding acquisitions (1,533), units leased from the private sector (630), households supported under the Housing Assistance Payment (12,853) and the Rental Accommodation Scheme (717), implies that a total of 17,962 social housing households were accommodated in the first nine months of 2019. This may be in the region of 24,000 for the full year. This total is in a year in which the latest assessment of housing need reported that there were 68,693 households across the State (43.2% in Dublin) on the social housing waiting list.  In the meantime, the shortage of affordable accommodation to rent and buy continues to create challenges for Irish policy makers, notably, the escalating homelessness problem, and rising rents and property prices, although the rate of growth has moderated in recent months.  Some of the solutions proposed included building more social and affordable homes, preferably on State-owned lands, which has implications for the level of capital investment on housing (€2.03 billion in 2020), the second largest allocation after transport (€2.5 billion). Other measures included rent regulations, which have proved to have a range of unintended consequences for tenants, including a negative impact on new and existing supply, as well as the potential for lower quality stock. The issue of the decade will undoubtedly be climate change and this too will impact on housing stock. With an estimated two million residential properties across the country, the potential cost of retrofitting to improve energy efficiency could be in the region of €10,000 to €30,000 per home, depending on its age and quality.   The one consensus during the election campaign by all parties was that there needs to be a substantial and fundamental change in housing policy, given the failure by all to address a number of issues over the past decade. The new Government clearly has its work cut out. Annette Hughes is a Director at EY-DKM Economic Advisory.

Becoming a partner in the firm is often the goal when accountants go into practice, but it’s not a walk in the park. Jackie Banner outlines four key steps on the road to making partner. Making partner is the end goal for many who go into practice. The status, financial compensation, and endorsement of one’s skills and expertise are all obvious draws to progressing to this level. Then there is the opportunity to effectively become a ‘business owner’ with responsibility and influence over how the firm is run. This latter piece sounds simple in theory but requires the right considerations and capabilities to execute.  We can’t gloss over the technical competency that is required to make it to partner. Possessing exceptional domain knowledge in your chosen area of expertise is fundamental to any move upwards. Eagle-eyed attention to detail and a holistic view of the business as a whole are also required to consider yourself technically sound. With a rapidly changing business landscape, the burden of knowledge is significant, and can lead a potential partner to focus too heavily on the technical side alone.  The most common missteps that senior level accountancy professionals make in the race to partner have to do with the investment in their own leadership ability,  relationship management and ability to think like someone who’s running a business or a profit-and-loss account. Here’s how to tackle these key steps to making partner. Invest in your leadership ability Over the last six decades, leadership scholars have conducted more than a thousand studies to determine the definitive characteristics and personality traits of great leaders. Out of all the research, not one unanimous, best practice leadership archetype has emerged. Prevailing opinions on the best leadership styles are replaced as quickly as the latest iPhone. However, there are some common through lines in many of them that you can draw from. Whether it’s Six Sigma, values-led leadership, contingency theory (which in itself says there is no one ideal leadership style), communication methods, humble leadership or any number of other theories and best practices, be sure to establish a combination of leadership qualities that best align with you as a person and as a leader.  Signalling that you have the right level of ambition necessary is also required. This is demonstrated by how you carry yourself, your communication style, and interactions and relationships with colleagues and clients. Combine these with that aforementioned oft-ignored investment in yourself to build your own definitive leadership style.  Vision and strategy The most common piece of feedback we hear from nomination committees or hiring partners about unsuccessful final interviews is that the candidate lacked vision in their pitch. At this level, technical competency is assumed. You will be speaking to peers who are equally, if not more skilled than you. They want a business leader to sit alongside them; someone with a new perspective that can bring energy and excitement that will contribute to business growth.  Presenting a forward-thinking, clear vision that will grow not only your business unit but add to the company is perhaps the most valuable thing you can do to be perceived as someone ready to make partner. In practical terms, that vision should translate to an actionable business plan.  When preparing, think strategically about how you’re going to generate earnings, develop a client pipeline, and hit the figures that justify your being chosen as an equity partner. A partner needs to ascertain what those expected figures are for the firm with which they are interviewing. This means crafting a realistic three-year plan to grow revenues at a level that a partner needs to be commercially viable, which is firm dependent.  Relationship management We all need a sounding board to bounce ideas off of or to go to for advice. Therefore, your network and your professional relationships should be a priority on the road to partner. Partners, no matter what age or level of seniority, should have a mentor.  As Chris Outram discusses in his book, Making Strategy Work, you need ‘co-conspirators’ on whom you rely to give their support when it comes to internal decisions and information-sharing across business units. This extends to stakeholder management both inside and outside your firm.   Putting it all together In an increasingly “what have you done for me lately?” world, contextualising the human side of the job is key. Trust your team to deliver while driving them towards a coherent vision by demonstrating effective leadership and building a sustainable pipeline of business.  Sounds easy when you put it on paper, right? There is no doubt it is a huge challenge to make the leap but having a clear idea of what is required and how it should be presented is the first step on the road to partner.    Top tips on the road to partner 1. Have a plan – Set targets and milestones for yourself to track your progress and professional development. Decide what you want out of your career and then work towards achieving it.    2. Invest in upskilling – Find opportunities to develop your technical and soft skills. Invest in as many areas as are available to you.     3. Specialise your skill set – Practice experience is broad and often provides exposure to a wide range of skills and experience, which is great. However, drill down and become a subject matter expert where possible. Be the go-to person in your network for a particular subspecialty.   4. Be flexible – In any business, targets move, circumstances in your or your clients’ business can change quickly. When unexpected events arise or a strategy or project scope moves, always think of yourself as a support for change and not a barrier.   5. Say “yes” – There will always be an element of a job or a particular client you’d rather steer clear from, but don’t. Always say “yes” when asked to take on something new or different.   6. Define your client portfolio and market opportunity – The more distinct your client portfolio is from your peers or your partners, the more likely you are to become a destination for referrals, hold client relationships, and see significant fee income potential in line with expectations for equity partner level.   7. Find a mentor – Find a peer who you admire and who has made choices you respect. Someone who is willing to be your sounding board and provide advice on how to achieve what you want in your career.  Jackie Banner leads Practice Recruitment for Azon Recruitment Group.

Please be advised that Regulatory Fees for the year 2020 will be issued during the month of January 2020.  Notification will be sent from Professional Standards when these are available for payment.

Akriti Gupta, Advocacy and Voice writes: There are less than eight weeks to go to the 31 October Brexit deadline. According to recent reports, 70 per cent of smaller businesses believe that Brexit will adversely impact their business, affecting not only on trade, but business sentiment and investment as well. Ireland is a small open economy, heavily reliant on the UK market as its trade-testing ground. Small businesses that trade with the UK will be affected by supply chain disruption, currency risk, trade tariffs and the requirement to operate within dual regulatory frameworks; the principal risk is the disruption of any continued trade post-Brexit. Practitioners need to liaise with their clients on Brexit-related issues now if they have not already done so. With Brexit timelines still not established and future business models remaining unclear, smaller businesses and their professional advisers are strongly advised to consider the following five points:  1. Assess and develop customs capacity We are encouraging businesses across Ireland and the UK which are currently trading with each other to ensure that they can continue to do so post-Brexit. To do this, they must understand the rules that will apply for importing and exporting. While some businesses have experience of the customs formalities required to import and export outside of the EU, for many, particularly the smaller business, it will be their first exposure to them. All business should first apply for a customs registration, i.e. an Economic Operator Registration and Identification Number (EORI). It takes between three and five minutes online to acquire this (see below). Statistics from Revenue and HMRC suggest that thousands of small businesses on the island of Ireland have not applied for one; such business should be encouraged to acquire this without delay. Regardless of whether customs duties apply to goods moving between Ireland and the UK and the UK and the EU, customs declarations must be submitted to Revenue and HMRC respectively. Businesses should also use the time between now and 31 October to improve their knowledge of customs procedures, and close off any gaps in their customs knowledge that could prevent them from completing customs returns and declarations necessary to keep goods moving. Businesses will need to have customs expertise and relevant software to file these declarations, or should hire an agent to do this on their behalf. It is important to remember that tax authority officials will check that the proper declarations are in place; goods will be detained at ports and borders if they are not. There are various government supports to help do all of this. 2. Review your supply chain and market Tariff barriers and border control will cause delayed investment and barriers to trade for small businesses. Businesses must conduct a SWOT analysis of their existing supply chain and consider alternative suppliers and markets outside the UK. We would also recommend speaking to all customs agents and goods transport services as there will also be changes to transportation and logistics between Ireland, the UK and other EU countries. Post-Brexit, businesses that use the “landbridge” will face new rules when using the customs transit procedure, causing delays that will especially impact goods with a short shelf-life. Businesses should consider applying to Revenue/HMRC to avail of customs supports which may allow goods to be moved in an easier manner.  3. Review all your certification, regulation and licencing It is essential that businesses check that their products or services are fully compliant with all relevant regulation for sale on the UK or EU market post-Brexit. Businesses in highly regulated sectors such as medical device manufacturing, construction and transportation must be particularly sure that their registrations, certifications and licensing are still valid. Where appropriate, they will need to ensure that their UK supplier has appointed an EU-based authorised regulator, as EU registrations issued to UK companies prior to Brexit may no longer be valid.  4. Manage currency and cash flow Volatility in currency markets, particularly around the euro/sterling exchange rate, will present a key challenge for businesses post-Brexit. It is imperative for both importers and exporters to assess their currency exposure. Both importers and exporters should hedge their future transactions to give themselves certainty and a concrete base from which to price their goods and services. Businesses should also be availing of government supports to help manage cash flow and mould their business plans accordingly. One such government support is the Brexit loan schemes; however, only ten per cent of these loan schemes have reportedly been accessed. The Irish Government is now communicating via emails, letters and customs workshops to smaller businesses to encourage them to avail of this facility in order to help them prepare. In the UK, HMRC has stated that it will issue EORI numbers to most VAT-registered businesses, while also making available additional funding to support businesses with the costs of making customs declarations. Businesses based in, or with a branch in, the UK can apply for this funding ahead of the UK leaving the EU. 5. Protect and inform staff The responsibility to check potential visa requirements for staff, and the recognition of professional qualifications and licences required to practice, remains with the employer. Where relevant, businesses must account for these requirements and keep their staff informed of any developments. With a talent shortage in many areas, businesses must invest in learning and development for staff as a priority. In addition to taking the above steps, smaller businesses and their professional advisers are strongly encouraged to attend all possible government events and working groups, and ensure that they are maximising government-run Brexit preparation programmes and supports. Read all our updates in our Brexit web centre at https://www.charteredaccountants.ie/brexit and our page dedicated to no-deal Brexit planning at https://www.charteredaccountants.ie/knowledge-centre/brexit/no-deal-Brexit-planning.

Charities in Northern Ireland may have to provide more detail to the Charities Commission in the near future, but any initiative that restores the public’s trust is to be welcomed. By Angela Craigan On 27 August 2019, the Charity Commission for Northern Ireland opened a public consultation in respect of new questions charities must answer in their annual returns plus additional information that organisations applying for charitable registration online must answer. The proposed questions cover topics such as safeguarding, data protection, loans and payments to related parties, and the use of commercial fundraising partners. The Charity Commission NI advises that the questions are designed to help it gather important information on individual charities and the charity sector as a whole. The format of the proposed new questions requires each charity to reveal if any trustee owes money to it, whether any of the charity’s assets are leased from a trustee, and whether a trustee has been paid for carrying out their role. These questions are already asked in the annual monitoring return, but will now be asked when applying for registration. The Charity Commission NI also intends to ask charities if they have reported a data breach to the Information Commissioners Office in the past year. It will also collect information on what percentage of charitable expenditure relates to charitable purposes for organisations of less than £250,000 a year. All of the new and revised questions Charity Commission NI propose to include in the registration application and the Annual Return Regulations 2019 are available to view in the consultation document. The public consultation will focus on the most significant questions, and will allow an opportunity to voice opinions on the proposed changes. The consultation process will run for eight weeks, closing on Tuesday 22 October 2019. The changes will be of particular interest to members working in the charity sector and those who are trustees of Northern Ireland charities. The consultation has arisen as a result of increased risks within the charity sector including safeguarding, cybercrime and fraud. These increased risks have had a negative impact on the public’s perception of the charity sector. A key role of the charity commission is to increase public trust and confidence in charities. The commission is of the opinion that the additional questions will increase transparency and, as a result, public confidence in charities. The recent safeguarding failures in some high-profile charities have highlighted the importance of trustees being aware of their responsibilities and the safeguarding standards expected of them. The commission has added questions in relation to the ‘expression of intent’ form that is completed by those waiting to be called forward for registration. The commission also proposes to add more questions to the classification section of the charity registration form. In this section, applicants describe their charitable purpose, the focus of the charity and the beneficiaries of the organisation. It is important that trustees understand their responsibilities in respect of the information filed with the Charity Commission. Trustees may delegate the task of submitting an application or annual monitoring form, but they cannot delegate the responsibility of making sure they are accurate and submitted on time. If an annual monitoring form is late, the register of charities shows them as being in default. Once submitted, the register will read “Due documents received late”. This is of increased importance as funders are now using the register to check if forms are being returned late and will look less favourably on charities that file late when awarding grants. As an advisor to a large number of local charities, and as a trustee of Action Mental Health and New Life Counselling, I firmly believe that this sector is invaluable. I therefore welcome any move to increase public confidence in the charity sector.  Angela Craigan FCA is a Partner with Harbinson Mulholland, the accountancy and business advisory firm.

Work-life balance can have enormous value in any organisation,  but meeting the needs of a broad spectrum of employees is more art than science. By Ed Heffernan For well over a decade now, work-life balance has been part of the conversation. The 2019 Leinster Society Salary Survey cited, perhaps unsurprisingly, that 86% of respondents said it was a key factor when considering an external move. Surprisingly, however, some 52% of respondents cited they would sacrifice up to 10% of their financial reward for better work-life balance. What is this mysterious, evasive thing that the majority of accountants would take a pay cut for? How is work-life balance defined? Sometimes things are more easily defined by what they are not, rather than what they are. Here’s an example: Work-life balance does not mean equality between work hours and non-work hours; Work-life balance does not necessarily mean working fewer hours than you are working now; Work-life balance is not a one-size-fits-all matter; it means different things to different people and will have a varied meaning over time for each individual; and Work-life balance means different things to different generations; for some, it’s a nice-to-have while for others, it’s an expectation. More often than not, work-life balance comes down to three things – flexibility, achievement and enjoyment. Flexibility is doing your job at the times that work for you. We all have different commutes and different responsibilities outside of work; the employers that recognise this as a fact of life are the ones who retain their people for longer and get more return for their people’s time. For example, some employers will: Allow some degree of flexibility on start and finish times to allow for commutes, family responsibilities, sports commitments or even to make sure that when someone needs to finish a little early, they feel that they can; Allow people to work from “not the office” and trust that they will. Numerous studies suggest that the worst possible place for employee productivity is the workplace – there are just too many distractions. Enabling certain types of work, especially the type of work that requires uninterrupted focused activity, to be conducted outside of the office can lead to substantial  increases in productivity; and Giving a little can mean gaining a lot. If one of your team has a medical appointment or another one-off event, allowing them the freedom to be away from the desk without deducting the time from their holidays, or stating that they have to make the time up, can have enormous reciprocal effects in the future. Small, random acts of kindness are more powerful than any policy. There is a catch, though. Even if a company does manage to create a flexible working environment, it is still not going to please all of the people all of the time. When it comes to flexibility, some people at certain stages in their life will need a little more; others a little less. Implicit to the flexibility component of work-life balance is that it means different things to different people at different stages. Companies that create a culture of flexibility as opposed to enforcement often get the best results. Achievement is the cornerstone of human ambition. Everyone needs to have a clear understanding of what they need to achieve in their role and to be recognised when this achievement occurs. This can be weekly, monthly or even annually. It must be measurable in some way and it must be recognised, either intrinsically (for example, a simple ‘thank you’ for a job well done) or extrinsically (for example, some type of financial reward – a token, an unexpected gesture, a bonus, or even a salary increase). Everyone needs to feel that they are achieving something in their role and it is ultimately up to their direct manager to ensure that achievements are recognised. Those who feel they are achieving something tend to feel like they have work-life balance and in many cases, they feel this way regardless of the hours they work. Enjoyment is a less tangible, but equally important, part of work-life balance. Enjoyment does not just mean having fun – that’s only part of it. Enjoyment has a much wider definition when it comes to work-life balance. It’s how you feel about what you do; it’s how it feels to work in your team; it’s feeling that you are working towards a shared goal; it’s respecting and learning from the people you work with; it’s celebrating success and learning from failure with your colleagues; it’s the opportunity to help others learn; it’s the opportunity to work in a business that you believe in for a cause you admire; and it’s a whole lot more. Flexibility and achievement are the easy ones to define and create a policy for – enjoyment is the piece that is really personal, and the piece that many managers often get wrong. Work-life balance can have enormous value in any organisation. Get the mix of flexibility, achievement and enjoyment right, and your people will work harder, be happier, be more productive and will stay longer. Get it wrong these days, and you will end up with the opposite. It’s that easy. Why authentic leaders listen For some people, it isn’t the work component that creates the imbalance; it’s the life component. At certain times, we all come under stresses that have nothing to do with work. Some people make work the escape from these stresses; other people bring these life stresses into the workplace with sometimes devastating consequences. People don’t change without reason. If someone on your team begins to submit work that isn’t up to their usual standard, uncharacteristically misses multiple deadlines or just seems ‘off form’ in the office, don’t get annoyed – get curious. Sometimes it might just be listening; sometimes it might be arranging some extra flexibility or a reduced workload on a temporary basis. Regardless of the situation, every time you engage and, where you can, offer to take action, you will not only make a difference for that person, but you will create longer lasting, deeper bonds between yourself and your team. You can create the space your people need when life causes an imbalance. And from experience, that’s where the real magic happens. It’s easy to ignore the problem, but it takes bravery to ask the question. Which type of leader are you?   Ed Heffernan is Managing Partner at Barden Accounting and Tax.

A new report proposes measures for the sustainability of owners’ management companies and lays the foundation for a more structured approach to managing apartment complexes or managed estates. By David Rouse In a professional audit or reporting capacity, Chartered Accountants may encounter owners’ management companies (OMC). Readers living in an apartment complex or managed estate may even have been asked to serve as an OMC director. OMCs, while in form incorporated typically as companies limited by guarantee (CLG), are in substance hybrid entities. They sit at a corporate crossroads between not-for-profit companies, property management businesses and residents’ associations (see Figure 1). Many readers will be familiar with the legacy construction and financial issues facing these companies. High-profile cases such as Priory Hall and Longboat Quay, as well as other less prominent estates, have featured in the press in recent years while corporate governance failings in OMCs receive periodic attention in court reporting. The country’s largest OMCs have multi-million euro annual service charge budgets. And yet, the stewardship of these companies is entrusted to unpaid, untrained directors (the term “volunteer director” is deliberately avoided, as in law, there is no such thing – a director is a director). There is as yet no firm handle on the number of OMCs in the country. However, it is estimated that the upper limit is likely to be about 8,000 companies. New report A recent independent report titled Owners’ Management Companies – Sustainable Apartment Living for Ireland considers issues that will be familiar to those with even a passing knowledge of managed estates and OMCs. The report was jointly commissioned by the Housing Agency and Clúid Housing. The Housing Agency works with the Department of Housing, Planning and Local Government, local authorities, and approved housing bodies (AHB) in the delivery of housing and housing services. Clúid is the State’s largest AHB, managing  just over 7,000 homes across the country. The inadequacy of annual service charges, failure to provide for building maintenance (sinking) funds, and the persistent problem of mounting debtors are just some of the topics assessed. International best practice is examined, and Ontario and New South Wales are among the comparator jurisdictions featured. The future demand for high-density housing is signalled in the context of new Government policy, such as the National Planning Framework and the Climate Action Plan. To audit or not to audit? Recommendations for reform across a range of relevant regulatory systems are proposed. Of interest to the accountancy profession will be the recommendation for the removal of the audit exemption currently available to OMCs, most of which, as noted earlier, are incorporated as CLGs. Companies Act 2014 provides the audit exemption for CLGs. In this way, small not-for-profit companies without shareholders may benefit from a reduced financial and administrative burden. (It should be noted that under sections 334 and 1218 of the Companies Act, any one member of the CLG may in effect demand an audit.) However, while OMCs are not-for-profit, they are responsible for multi-million euro property assets in the form of estate common areas. Considering the centrality of OMCs to property values, good title, and quality of living spaces, the value of an audit to members in terms of assurance, transparency, and governance cannot be overstated. Finance and governance The creditworthiness of OMCs in the context of current under-funding is also considered. Regulation over and above corporate compliance enforced by the ODCE is recommended. Dispute resolution outside of the courts is advocated, as are more cost-effective avenues for service charge debt recovery. Personal insolvency practitioners will be aware that OMC service charge debt is an “excludable debt” under the Personal Insolvency Act 2012. Only with the consent of the creditor (i.e. the OMC) may management fee balances be reduced or written off in a Personal Insolvency Arrangement. The report’s other recommendations include mandatory training for OMC directors, the standardisation of accounts to a format prescribed for OMCs, and enhanced insurance obligations. Reform may be some way off. In the meantime, practitioners should be aware that the Institute’s practice toolkit, Owners’ Management Company PQAs, was updated in 2018. This replaces the 2011 version. As the Institute’s product catalogue notes, and as may be recognised from sectoral weaknesses highlighted in this commentary, although OMCs can be small in size, they may be higher-risk clients. Future regulation of the sector could mitigate a number of the risks identified.   David Rouse FCA is an advisor with the Housing Agency, a director of the Apartment Owners’ Network CLG, and a director of one of the country’s largest OMCs.

Claire Fitzpatrick FCA looks back on her career, from trainee auditor to the frontier of blockchain technology innovation. What’s wrong with me?” For someone who has enjoyed a varied and successful career in professional services and large corporations, it might come as a surprise to learn that Claire Fitzpatrick asked herself that very question in her 30s as she watched her peers move into senior roles. “You just need to get on the track,” she was told – a less than subtle reference to the perceived linear path to CFO/CEO roles. But as Claire readily admits, this isn’t how she operates. The Dublin native has made serendipitous career moves since leaving PwC in 2000 to work with one of her audit clients, Point Information Systems, but the draw has never been status or salary. Instead, her career has been guided by two things – people and culture. Venturing out While working as a PwC Audit Senior with Point Information Systems, Claire saw the culture she wanted to work in – ambitious, fast-changing and transformative. “I remember coming back after a year and the company had changed completely, whereas some other companies I audited would be the same year-on-year,” she said. “It was evolving at pace and the energy there just stood out for me.” Claire joined the company and her role expanded her knowledge base in a variety of new disciplines from engineering to sales and marketing. This diverse exposure would be of great benefit to her later in her career, not least when she returned from a working holiday with Nestlé in Australia and New Zealand to a role in O2. The company was in expansion mode at the time and Claire managed to experience the full life-cycle from early adoption to the sale of the business, which she was centrally involved in. From there, Claire moved to Wayra, Telefónica’s start-up accelerator, to accelerate digital embryonic businesses. As Claire recalls, it was a move that raised some eyebrows at the time. “A lot of my peers thought it was a step down for me in career terms, but I really wanted to get involved in the innovative digital space,” she said. “It reminded me of the energy and pace I felt in Point Information Systems and I had experience of both start-up and corporate environments, so I was able to bring a lot to the table.” Start-up life In her first three weeks in Wayra, Claire met with hundreds of entrepreneurs and developers across the tech ecosystem and this intensity continued unabated for three years. The hub was a success, investing €6 million in the Irish start-up ecosystem including 33 equity investments while returning the same amount. “For early-stage start-ups, that’s a great return,” she said. However, following the sale of O2 to Three in 2014, Telefónica ultimately closed its Wayra hub in Ireland and Claire decided to take on a new challenge.  The idea of starting her own business had never entered her mind, but the closure of Wayra meant that Claire and her two colleagues faced a fork in the road. “We saw real value in what we were doing at Wayra, and we were good at it,” she said. “So, we decided to set up Red Planet and to flip the accelerator model on its head. We started with the corporate to understand the problem it was trying to solve, and then sourced the best start-up talent to solve that particular problem.” The venture was successful and it achieved what Claire describes as “the holy grail” for start-ups – being sold to a large corporate. Red Planet was acquired by Deloitte in 2017 and Claire continued to work with the firm for 18 months. “Selling our start-up was a tough decision, but the right one. Deloitte was really good at the strategy piece and identifying the challenges facing their clients, while Red Planet was able to find the solutions in the start-up world and develop them to scale. We were very good at curating diamonds in the rough.” Blockchain calling At this stage in her career, Claire faced an inflection point. Not content to simply go with the flow, she began plotting her next move when an opportunity arose to join a new blockchain venture headed by the co-founder of Ethereum, Joseph Lubin. The company was founded in 2014 and was at the forefront of Ethereum blockchain technology innovation. It needed someone to establish its base in Dublin and build its team, and the company ultimately chose Claire as its Director of Strategic Operations. The Dublin hub, which is known as ConsenSys Ireland, is developing the products that will enable society and enterprises to advance to the next level of blockchain adoption. Claire is very excited about the bigger picture. “In the future, you won’t even know you’re interacting with blockchain. It will be just like the Internet where nobody really thinks about or considers the infrastructure or protocols – they just see the applications,” she said. “Blockchain will be as transformational as mobile telecommunications was 25 years ago. We are part of a new industry, a new technology, new products, and a market which we have to create and educate. That’s a big challenge, but a very exciting one.” Leadership style But amid the excitement and potential lies ambiguity, and it takes a certain type of person to thrive in an ambiguous environment according to Claire. “Given the nascent nature of blockchain technology, we’re continually refining our vision and new industries are constantly wanting to explore new directions with the technology. So, although everyone in the company has goals to achieve, some are set in stone and some evolve to meet the needs of our clients,” she said. “That’s no different to a traditional organisation but we do differ in that we could have to tell staff to drop projects and pivot in a new direction at a moment’s notice – and some people find that challenging.” Luckily for Claire, working in a maturing industry adds to the allure of her new role in ConSensys – one she believes will contribute to a decentralised, democratised future for individuals. “It’s a rollercoaster, but with experience and age comes perspective and balance,” she said. “And the most important thing for me, throughout my career, has been the people I work with. My colleagues today are not necessarily wired like me but we work well together in the good times, and the challenging times, to make something great happen. That’s what it’s all about.”   Claire’s advice for Chartered Accountants Chartered Accountants will have a central role in the deployment of blockchain technologies and rather than wait for mass adoption, Claire believes the time to upskill is now. “The conversation around blockchain has moved from proof of concept to pilot schemes so when we’re talking to clients, we’re discussing real systems as opposed to hypothetical ideas,” she said. “So, I wouldn’t recommend waiting to start blockchain projects because we will reach the point of mass proliferation quicker than most people expect.” “The first step for all Chartered Accountants is education. There are free educational resources through ConsenSys Academy and Blockchain Ireland is working to raise awareness of what’s coming down the tracks,” Claire added. “But it’s vital that Chartered Accountants realise that anyone can quickly become a laggard in this dynamic environment.” “Finally, I would stress the point that Chartered Accountants don’t need to worry about losing their heads in the weeds trying to understand the programming and coding side of things,” she said. “They should educate themselves with regard to the characteristics and applications that they can see for blockchain in their business.”