• Current students
      • Student centre
        Enrol on a course/exam
        My enrolments
        Exam results
        Learning Hub data privacy policy
      • Course information
        Students FAQs
        Student induction
        Course enrolment information
        Key dates
        Book distribution
        Timetables
        FAE elective information
      • Exams
        Exam Info: CAP1
        E-assessment information
        Exam info: CAP2
        Exam info: FAE
        Access support/reasonable accommodation
        Extenuating circumstances
        Timetables for exams & interim assessments
        Interim assessments past papers & E-Assessment mock solutions
        Committee reports & sample papers
        Information and appeals scheme
        JIEB: NI Insolvency Qualification
      • CA Diary resources
        Mentors: Getting started on the CA Diary
        CA Diary for Flexible Route FAQs
      • Admission to membership
        Joining as a reciprocal member
        Conferring dates
        Admissions FAQs
      • Support & services
        Recruitment to and transferring of training contracts
        CASSI
        Student supports and wellbeing
        Audit qualification
        Diversity and Inclusion Committee
    • Students

      View all the services available for students of the Institute

      Read More
  • Becoming a student
      • About Chartered Accountancy
        The Chartered difference
        What do Chartered Accountants do?
        5 Reasons to become a Chartered Accountant
        Student benefits
        School Bootcamp
        Third Level Hub
        Study in Northern Ireland
        Events
        Blogs
        Member testimonials 2022
        Become a Chartered Accountant podcast series
      • Entry routes
        College
        Working
        Accounting Technicians
        School leavers
        Member of another body
        International student
        Flexible Route
        Training Contract
      • Course description
        CAP1
        CAP2
        FAE
        Our education offering
      • Apply
        How to apply
        Exemptions guide
        Fees & payment options
        External students
      • Training vacancies
        Training vacancies search
        Training firms list
        Large training firms
        Milkround
        Recruitment to and transferring of training contract
        Interview preparation and advice
        The rewards on qualification
        Tailoring your CV for each application
        Securing a trainee Chartered Accountant role
      • Support & services
        Becoming a student FAQs
        Who to contact for employers
        Register for a school visit
    • Becoming a
      student

      Study with us

      Read More
  • Members
      • Members Hub
        My account
        Member subscriptions
        Annual returns
        Application forms
        CPD/events
        Member services A-Z
        District societies
        Professional Standards
        Young Professionals
        Careers development
        Diversity and Inclusion Committee
      • Members in practice
        Going into practice
        Managing your practice FAQs
        Practice compliance FAQs
        Toolkits and resources
        Audit FAQs
        Other client services
        Practice Consulting services
        What's new
      • In business
        Networking and special interest groups
        Articles
      • Overseas members
        Home
        Key supports
        Tax for returning Irish members
        Networks and people
      • Public sector
        Public sector news
        Public sector presentations
      • Support & services
        Letters of good standing form
        Member FAQs
        AML confidential disclosure form
        Institute Technical content
        TaxSource Total
        The Educational Requirements for the Audit Qualification
        Pocket diaries
        Thrive Hub
      • Member benefits
        Member benefits
    • Members

      View member services

      Read More
  • Employers
      • Training organisations
        Authorise to train
        Training in business
        Manage my students
        Incentive Scheme
        Recruitment to and transferring of training contracts
        Securing and retaining the best talent
        Tips on writing a job specification
      • Training
        In-house training
        Training tickets
      • Recruitment services
        Hire a qualified Chartered Accountant
        Hire a trainee student
      • Non executive directors recruitment service
      • Support & services
        Hire members: log a job vacancy
        Firm/employers FAQs
        Training ticket FAQs
        Authorisations
        Hire a room
        Who to contact for employers
    • Employers

      Services to support your business

      Read More
☰
  • Find a firm
  • Jobs
  • Login
☰
  • Home
  • Knowledge centre
  • Professional development
  • About us
  • Shop
  • News
Search
View Cart 0 Item

News

  • Home/
  • News for RSS feed 3
☰
  • News
  • News archive
    • 2022
    • 2021
  • Press releases
    • 2022
    • 2021
  • Newsletters
  • Press contacts
  • Media downloads
  • Podcasts Chartered Accountants Ireland
  • Budget day news
Tax
(?)

Tax receipts remain strong to end-November 2022

With November being the most important month of the year for tax receipts, the Minister for Finance noted that the recent November Exchequer figures indicate that “[t]he ongoing strength in income tax, in particular, is a positive signal of the continued momentum in the labour market”. The Exchequer surplus stood at €6.2 billion, on a 12-month rolling basis. However, it is concerning that if the recent windfall corporation tax receipts are excluded, there is an underlying deficit of approximately €5 billion on a 12-month rolling basis. November is a VAT-due month, it is the deadline for self-employed income tax payments, and the month in which the largest payments are made for corporation tax. Total tax receipts for the month of November amounted to €13.6 billion. Corporation tax receipts in November amounted to €5 billion, which is 25 percent higher than November last year. However, some of these receipts are expected to be once-off in nature and will not reoccur next year. Income tax receipts of €4.4 billion in November are 16 percent ahead of November 2021 and reflect continued increases in earnings as well as also the strength of self-employed income. VAT receipts for the month of November are up 19 percent on the same period last year, with almost €3.1 billion being collected, reflecting the recovery in consumer spending. Commenting on the figures, the Minister stated: “Our economy has recovered remarkably well from the shock caused by the impact of Covid-19. This is due to the careful management of our public finances during what was a testing period for the country. I fully appreciate that for so many the rising cost of living, and in particular, the cost of energy is a real challenge. The Government has and will continue to help citizens and businesses deal with these rising costs but we must ensure that the support we provide is sustainable and does not put our public finances on an unsustainable path. By delivering a budget surplus and putting aside these potentially transient corporation tax receipts it will ensure that we are in a position of strength to deal with unforeseen challenges that may yet be around the corner as well as the more longer-term challenges that we need to make progress on too.” See the Fiscal Monitor November 2022 for further details.

Dec 05, 2022
READ MORE
Professional Standards
(?)

Institute publishes revised Audit Regulations, UK

The Institute has issued revised Audit Regulations, UK (effective 5 December 2022), replacing the 1 January 2021 edition of those Regulations.  The revisions to the Audit Regulations, UK primarily reflect the new registration arrangements with the FRC for firms that audit UK public interest entities (PIEs) and which also take effect on 5 December 2022. The FRC consulted in these processes earlier this year and issued their final Regulations and Guidance in July 2022. The link for this can be found on the FRC website. The Institute’s Professional Standards Department is writing directly to the audit compliance principal at each Institute audit firm with UK audit registration with more detail regarding the changes to Audit Regulations, UK. Institute firms with audit registration in both the UK and Ireland comply with both the Audit Regulations, UK and the Audit Regulations, Ireland.   The guidance document comparing the Audit Regulations in the two jurisdictions, is available on the Institute’s website, and has been updated to reflect the revised Audit Regulations, UK. Further changes are expected to be made to the Audit Regulations, UK in 2023 which are likely to reduce the differences between the Audit Regulations Ireland and Audit Regulations UK.

Dec 05, 2022
READ MORE

Making better business decisions in uncertain times (sponsored)

Business leaders are facing uncertain times ahead, but there are plenty of steps they can take to mitigate the risks, writes Rachael Ingle, CEO, Aon Ireland Over the course of the last few months, businesses across Ireland and beyond have faced into some of the most challenging conditions seen in recent decades. While many organisations have just come to terms with the post-pandemic world of work and altered business landscape, new risks have rapidly appeared on the horizon. From geopolitical instability through to inflation and the spectre of a possible global recession, business leaders are looking to prepare themselves for the impact of a more difficult economic outlook here in Ireland.  According to the results of Aon’s latest Business Decision Maker Pulse survey, Irish business leaders clearly recognise the growing array of economic risks they now face and the impact these risks are likely to have, not only on their own business, but also on the sector in which they operate.   Emerging risks  Our research, which surveyed 228 senior business leaders in Ireland at companies employing more than 250 people, has found that economic slowdown is now seen as the top risk facing Irish companies, followed by inflation and failure to attract or retain top talent.  The growing unease concerning today’s emerging risks, including inflation and rising energy costs, is having a tangible impact on Irish businesses and their plans for the coming months.  Over half of leaders across Ireland believe that rising energy prices will hinder their ability to grow within the next six months. Meanwhile, five-in-ten leaders expect low economic growth, with 41 percent anticipating a recession in Ireland.  Although significant, the number of business leaders in Ireland anticipating recession is lower than the number of business leaders globally, 79 percent of whom expect a recession this year, according to a comparative global survey carried out by Aon.  This points towards the underlying strengths of the Irish economy. With Ireland’s strong focus on innovation, digital transformation, a pro-business outlook and unemployment at record lows, Irish businesses are well positioned to weather the economic downturn that is ahead.  Mitigating economic risk From engaging with leaders across many sectors of the economy, CEOs and CFOs are now actively considering ways in which they can manage costs while continuing to build a workforce that attracts the very best talent. Indeed, one-in-two senior business leaders say their company is currently experiencing difficulty in attracting and retaining talent.  With the increasing likelihood of a global recession, however, economic risk is becoming the driving factor in how Irish leaders will make business decisions in the near future.  To manage the impacts of these risks, half of the Irish businesses surveyed by Aon are considering cutting day-to-day spending to mitigate the impact of inflation on their finances, while one-in-three are considering reducing headcount to navigate the current economic climate.  Emerging risks are also affecting other areas of business, with just 18 per cent of business leaders willing to consider progressing with a merger or acquisition in the next two years due to rising inflation. As many of these risks become more pressing, it is vital that business leaders focus on protecting their organisations’ resilience and finding growth opportunities in the face of heightened volatility.  Being prepared  To help Ireland’s C-Suite leaders navigate the new risks they face, our team at Aon Ireland has pinpointed four fundamental factors that will shape future success.   Embrace risk First, embracing risk is now the only option open to Irish businesses. The most prepared leaders agree that their company’s appetite to address risk has increased in response to the current macroeconomic conditions. For companies to feel prepared heading into a possible recession, addressing risk isn’t a choice - but a necessity. Listen to stakeholders Second, Irish businesses must place ever greater emphasis on listening to their customers and people, as well as putting data at the heart of decision making. Our global research found that well-prepared leaders are nearly twice as likely to say that they value the counsel of an external advisor to improve their company’s ability to make good decisions and deal with risk. Confident leaders also resist the urge to slow hiring despite challenging economic conditions.  Understand risk Third, Irish business leaders need to understand that risks are interconnected and can rapidly evolve. Our experience of the COVID-19 pandemic highlighted, above all, how a public health risk in one part of the world can transform into an unprecedented, global pandemic, which can fundamentally reshape how we live, work and do business. Irish leaders can take confidence in knowing that the pandemic has better prepared them to respond quickly to the unexpected. Think long-term Fourth, with one eye on the future, leaders need to remain focused on the long-term business opportunities and societal challenges that lie ahead. This requires continual investment in disruptive technologies and in combatting climate change. It’s clear from our global research that the most prepared leaders entering this period of economic uncertainty are still spending a greater amount of time considering climate change than those that are unprepared.  Making better decisions As we look to the weeks and months ahead, and seek to manage growing volatility, it is crucial that business leaders reinforce their preparedness in the face of current and future risks affecting their organisations.  At Aon Ireland, our team of over 750 experts are helping to provide Irish businesses with clarity and confidence to make better decisions that protect their organisations and help them to unlock new growth opportunities in the months ahead. Through our commercial risk, health, human capital and wealth solutions, we are here to support business leaders to cut through the complexity of the current economic landscape and focus on the decisions that will reinforce their organisations’ resilience and agility. Whether it is embracing calculated risk-taking or seeking ways in which to continue attracting the very best talent, business leaders can mitigate the challenges that lie ahead while also creating new opportunities, helping their business to grow, and continuing to enrich the lives of their people and their customers. This article is sponsored by Aon.

Dec 02, 2022
READ MORE
Personal Impact
(?)

The coach's corner: December 2022

Julia Rowan answers your management, leadership and team development questions Q: My team is positive, proactive and eager to learn more. My company doesn’t invest much in training and won’t give me a budget because ‘nothing is broken’. How can I keep them motivated? There is a lot you can do to motivate and upskill your team. First, think about how you would describe your team. Is it strategic? Independent? Collaborative? The words you select will guide the way you direct them. The next step is to consider the way you engage with your team. Set yourself up so that your conversations become a learning experience. Coach and listen. Trust the team enough to share your challenges and see what ideas they have. Here are a few ideas to get started: Start a pool of resources – books, articles, podcasts, webinars – where everyone is able to access the same material. Schedule protected time to discuss and share ideas, allowing team members to choose the material and chair the discussion. Organise an away day (even if you are on company premises) and scope out a small number of business projects that will move the team forward and give them learning opportunities. Small groups could work on individual projects and report back regularly to the wider team, making sure that all retain ownership. Ask them to report back on the ‘what’ (what we are doing), the ‘how’ (the process) and the learning (what went well and what could be improved on). Make your team meeting a place where people can share their learning about their everyday experience. This can be done in very simple ways: like opening with a ‘check-in’ (what are you proud of achieving this week? What has your biggest challenge been?), but also by asking team member to make presentations around projects, tasks or initiatives that they have undertaken, and sharing their learning. Seek out cross-functional projects that your team can get involved with.If you put together a business case with learning objectives, outputs and impacts, your company might give you a budget. Q: At meetings, my contribution is often overlooked, but I’m often the only person who has prepared. There is lots of aimless discussion. When my ideas are heard, they are often taken up but attributed to others. This is a common problem, very frustrating and exacerbated by online communication. To address the issue long-term, talk to the meeting owner, explain your challenge, and suggest that they do a ‘go-around’ from time to time, hearing from each individual. Meet the main movers and shakers one-to-one to discuss challenges and share ideas – this puts you on their radar. Some tactics: sit close to the Chair so that it’s easy to get their attention. Quieter people often contribute tentatively, in short sentences. Note the points you want to make so that you can be deliberate when you speak. I’ve devised a structure that quieter clients have found useful: ‘Signal, State, Suggest’. Preface your contribution with a ‘signal’ that gets people’s attention: “reflecting on what I’ve heard, there are two ways to tackle this”. State (give your input): “we could either do A or B”. Suggest (a way of moving on): “Given current circumstances, I suggest we”. It’s not easy to enter the melee– but your meetings will be better for it. If you read one thing... Coaching for Performance – The Principles and Practice of Coaching and Leadership by Sir John Whitmore. An accessible and practical book about coaching. The updated 25th anniversary edition has recently been published. Busy managers often direct. Coaching creates a conversational space for learning through everyday experience.

Dec 02, 2022
READ MORE
Membership
(?)

Member perspectives: looking to the future

As the year draws to a close, we talk to three members about the challenges of the past 12 months and their hopes for the future Pamela McCreedy Chief Operating Officer Police Service of Northern Ireland The most recent economic forecasts make for sobering reading—a perfect storm of powerful geo-political and economic currents ushering in a period of profound economic uncertainty and, most likely, recession.  Combined with the most recent Northern Ireland Fiscal Council report, which points to a perilous public finance landscape and a growing cost-of-living crisis, it is perfectly understandable that hope and optimism are in short supply. Reform of Northern Ireland’s public sector has been a matter of significant discussion for decades, but the public finance landscape will necessitate a return to difficult first principle discussions about how we operate public services, to what standard and how these might be prioritised. There is a consensus that painful choices lie ahead. In stark choices, however, there are also opportunities. Service redesign, especially on the scale the public sector will need to embrace, often offers a chance to think and do things differently. In my own organisation, which faces unprecedented budgetary pressures, we have embarked on a demand and capacity analysis. While the circumstances necessitating this innovation are regrettable, it will provide a more evidence-based, outcomes-orientated approach to policing service delivery. But there are chinks of light that leaders can cling onto when looking ahead to next year. In the first quarter of 2022, Northern Ireland’s economic output was at a 15-year high. According to the Northern Ireland Statistics and Research Agency, over the last three years, we have grown strongly, with output up by 4.8 percent compared to GDP growth of 1.3 percent in the UK. This is not to diminish the challenges that lie ahead for families and local communities—rather, simply to make the point that, with the right combination of public policy and leadership, we can overcome these challenges and thrive as an economy and a society. This year has seen our society emerge from the most difficult public health crisis of our time. While we are glad to begin leaving that behind, perhaps one positive has been our renewed sense of concern for our neighbours and a reminder of the importance of people in any organisation.  As we emerge from one crisis, however, we enter another. Behind these stark economic indicators are real families who are struggling now, many of whom work in our respective organisations.  As we move into 2023, we will need to rediscover that sense of solidarity in helping our people through another crisis year. Brian Murphy Audit & Assurance Partner, Deloitte  It has been another year that wasn’t quite what we imagined it would be, as we spun from one crisis to the next. Looking towards the New Year, it’s clear uncertainty will once again prevail.  Inflationary pressures have resulted in weakening consumer and business sentiment. Of the 23 countries surveyed in Deloitte’s most recent Global Consumer Tracker, consumers in Ireland were the most concerned about inflation. We are in an energy supply crisis while the climate emergency continues to heighten. There’s no doubt that businesses are approaching the New Year with caution. Deloitte’s bi-annual CFO survey found that just 32 percent of CFOs are forecasting an increase in revenue over the next 12 months—down from 61 percent six months ago.  Businesses are also facing a huge talent shortage. In fact, according to the same survey, 96 percent of Irish CFOs feel that retaining and attracting the right talent is one of the biggest risks they will face in the coming year.  Through our work with clients, we are seeing more focus on upskilling the existing workforce and ensuring workplace settings and policies meet the needs of employees to help them navigate the changing terrain.  The pandemic implemented new ways of working that are here to stay, and I believe businesses that continue to offer employees flexible working patterns, and invest in programmes that meet employee needs, will stand out in the year ahead.  All this considered, there have also been great opportunities in the Irish business landscape this year. One of the highlights for me was taking the helm of Deloitte’s Best Managed Companies programme. What set our winning companies apart in 2022 were the innovations that allowed them to endure and drive profitability, a distinct focus on local communities, and putting people at the heart of their organisations. I expect and look forward to seeing this continue in 2023.   David W Duffy Co-founder and CEO, The Corporate Governance Institute We are facing a high level of global uncertainty. The challenges of post-COVID-19 recovery for businesses, like a possible recession, inflation and the war in Ukraine, are all contributing to feelings of uncertainty—not to mention the recent cryptocurrency meltdown.  As we head into 2023, our organisation is looking to build on what has been a very fast growth trajectory. To capitalise on this, we launched our first online and accredited Diploma in environmental, social and governance (ESG) in November, which has had a significant uptake globally. The challenge in 2023 will be identifying and addressing the risks to our business. Thankfully, we are developing a global footprint using a variety of distribution channels, which will diversify risk.  The other challenge for a fast-growing business is attracting and retaining talent. The tech slowdown can only help us. I think, in planning for 2023, organisations will need to be cautious and take as much risk off the table as is appropriate. Investment decision-making will be influenced by the variables in the environment they operate in, and many will only be made on the back of positive data. 2022 has been good to us in our second year of business. We have built a great and diverse team with an amazing culture. One of our key values is that everyone has a licence to think and experiment—and we back their judgement. So far, it’s working.

Dec 02, 2022
READ MORE
Ethics and Governance
(?)

Roadmap to Corporate Sustainability Reporting

The roadmap for the EU Commission’s milestone Corporate Sustainability Reporting Directive is taking shape and now is the time to start preparing for a brave new era in non-financial reporting, writes Conor Holland With the Corporate Sustainability Reporting Directive (CSRD) now approved by the European Council, entities in the EU must begin to invest significant time and resources in preparing for the advent of a new era in non-financial reporting, which places the public disclosure of environmental, social affairs and governance matters (ESG) matters on a par with financial information. Under the CSRD, entities will have to disclose much more sustainability-related information about their business models, strategy and supply chains than they have to date. They will also need to report ESG information in a standardised format that can be assured by an independent third party. For those charged with governance, the CSRD will bring further augmented requirements. Audit committees will need to oversee new reporting processes and monitor the effectiveness of systems and controls setup. They will also have enhanced responsibilities. Along with monitoring an entity’s ESG reporting process, and evaluating the integrity of the sustainability information reported by that entity, audit committees will need to: Monitor the effectiveness of the entity’s internal quality control and risk management systems and internal audit functions; Monitor the assurance of annual and consolidated sustainability reporting; Inform the entity’s administrative or supervisory body of the outcome of the assurance of sustainability reporting; and Review and monitor the independence of the assurance provider. The CSRD stipulates the requirement for limited assurance over the reported information. However, it also includes the option for assurance requirements to evolve to reasonable assurance at a later stage. The EU estimates that 49,000 companies across the EU will fall under the requirements of the new CSRD Directive, compared to the 11,600 companies that currently have reporting obligations. The EU has confirmed that the implementation of the CSRD will take place in three stages: 1 January 2024 for companies already subject to the non-financial reporting directive (reporting in 2025 for the financial year 2024); 1 January 2025 for large companies that are not presently subject to the non-financial reporting directive (reporting in 2026 for the financial year 2025); 1 January 2026 for listed SMEs, small and non-complex credit institutions, and captive insurance undertakings (reporting in 2027 for the financial year 2026). A large undertaking is defined as an entity that exceeds at least two of the following criteria: A net turnover of €40 million A balance sheet total of €20 million 250 employees on average over the financial year The final text of the CSRD has also set timelines for when the Commission should adopt further delegated acts on reporting standards, with 30 June 2023 set as the date by which the Commission should adopt delegated acts specifying the information that undertakings will be required to report. European Financial Reporting Advisory Group In tandem, the European Financial Reporting Advisory Group (EFRAG) is working on a first set of draft sustainability reporting standards (ESRS). These draft standards will be ready for consideration by the Commission once the Parliament and Council have agreed a legislative text. The current draft standards provide an outline as to the depth and breadth of what entities will be required to report. Significantly, the ESRS should be considered as analogous to accountancy standards—with detailed disclosure requirements (qualitative and quantitative), a conceptual framework and associated application guidance. Readers should take note—the ESRS are much more than a handful of metrics supplementary to the financial statements. They represent a step change in what corporate reporting entails, moving non-financial information toward an equilibrium with financial information. Moreover, the reporting boundaries would be based on financial statements but expanded significantly for the upstream and downstream value chain, meaning an entity would need to capture material sustainability matters that are connected to the entity by its direct or indirect business relationships, regardless of its level of control over them. While the standards and associated requirements are now largely finalised, in early November 2022, EFRAG published a revised iteration to the draft ESRS, introducing certain changes to the original draft standards. While the broad requirements and content remain largely the same, some notable changes include: Structure of the reporting areas has been aligned with TCFD (Task Force on Climate-Related Financial Disclosures) and ISSB (International Sustainability Standards Board) standards – specifically, the ESRS will be tailored around “governance”, “strategy”, “management of impacts, risks and opportunities”, and “metrics and targets”. Definition of financial materiality is now more closely aligned to ISSB standards. Impact materiality is more commensurate with the GRI (Global Reporting Initiative) definition of impact materiality. Time horizons are now just a recommendation; entities may deviate and would disclose their entity-specific time horizons used. Incorporation of one governance standard into the cross-cutting standard requirements on the reporting area of governance. Slight reduction in the number of data points required within the disclosure requirements. ESRS and international standards By adopting double materiality principles, the proposed ESRS consider a wider range of stakeholders than IFRS® Sustainability Disclosure Standards or the US Securities and Exchange Commission (SEC) published proposal. Instead, they aim to meet public policy objectives as well as meeting the needs of capital markets. It is the ISSB’s aim to create a global baseline for sustainability reporting standards that allows local standard setters to add additional requirements (building blocks), rather than face a coexistence of multiple separate frameworks. The CSRD requires EFRAG to take account of global standard-setting initiatives to the greatest extent possible. In this regard, EFRAG has published a comparison with the ISSB’s proposals and committed to joining an ISSB working group to drive global alignment. However, in the short term, entities and investors may potentially have to deal with three sets of sustainability reporting standards in setting up their reporting processes, controls, and governance. Key differences The proposed ESRS list detailed disclosure requirements for all ESG topics. The proposed IFRS Sustainability Disclosure Standards would also require disclosure in relation to all relevant ESG topics, but the ISSB has to date only prepared a detailed exposure draft on climate, asking preparers to consider general requirements and other sources of information to report on other sustainability topics. The SEC focused on climate in its recent proposal. The proposed ESRS are more prescriptive, and the number of disclosure requirements significantly exceeds those in the proposed IFRS Sustainability Disclosure Standards. Whereas the proposed IFRS Sustainability Disclosure Standards are intended to focus on the information needs of capital markets, ESRS also aim to address the policy objectives of the EU by addressing wider stakeholder needs. Given the significance of the directive—and the remaining time to get ready for it—entities should now start preparing for its implementation. It is important that entities develop plans to understand the full extent of the CSRD requirements, and the implications for their reporting infrastructure. As such, they should take some immediate steps to prepare, and consider: Performing a gap analysis—i.e. what the entity reports today, contrasted with what will be required under the CSRD. This is a useful exercise to inform entities on where resources should be directed, including how management identify sustainability-related information, and what KPIs they will be required to report on. Undertaking a ‘double materiality’ analysis to identify what topics would be considered material from an impact and financial perspective—as required under the CSRD. Get ‘assurance ready’—entities will need to be comfortable that processes and controls exist to support ESG information, and that the information can ultimately be assured. The Corporate Sustainability Reporting Directive represents a fundamental change in the nature of corporate reporting—the time to act is now and the first deadline is closing in.

Dec 02, 2022
READ MORE
Ethics and Governance
(?)

Whistleblowing policy and process – what you need to know

Companies preparing for the commencement of the Protected Disclosures (Amendment) Act 2022 in the New Year will need to overhaul whistleblowing policies and processes, but the effort will bring clear benefits, writes Gráinne Madden Encouraging people in an organisation to speak up about their concerns should be a no-brainer. Why would an organisation not want to know about a potential risk? Why would an organisation want an employee to feel the need to go to an external body, such as a regulator or the media, to highlight internal problems? International research repeatedly reinforces that there are two main reasons why people fail to speak up about their suspicions of wrongdoing. First, there is the fear of retaliation. Current Irish and UK law is seeking to address this by offering protection. The second reason people fail to speak up about their suspicions of wrongdoing in an organisation is fear of futility. This is the fear that nothing will be done, even if they do speak up—and this is why having clear policies and processes in place is so important.  The absence of a whistleblowing policy and process in an organisation will certainly send the message that the organisation does not really want to hear about any problematic issues that may exist or arise.  As it stands, in Ireland and the UK, workers are entitled to legal protection against dismissal, or other reprisal from their employer or colleagues, when disclosing concerns about certain issues. Until now, however—except in certain sector-specific areas—most organisations have not been required to put a whistleblowing policy or procedures in place, or to follow up on such disclosures.  The EU Whistleblowing Directive will, however, bring major changes to which organisations operating in EU jurisdictions must now respond. In Ireland, the Protected Disclosures (Amendment) Act 2022 will commence on 1 January 2023, giving effect to the EU Directive. New requirements for organisations There are several key additional requirements that will apply to organisations under the new Act, which are considered below. Employee thresholds For workplaces with more than 50 employees, there will be a requirement to have formal channels and procedures for receiving and, crucially, following up on disclosures. Workplaces with between 50 and 249 employees have until December 2023 to comply, and 250-plus employee workplaces must comply at commencement.  However, all organisations operating in certain sectors will be required to comply at commencement, even those employing fewer than 50 people. This includes:  public bodies; companies subject to EU laws in the areas of financial services, prevention of money-laundering and terrorist financing; transport safety; and protection of the environment (offshore oil and gas installations and operations only). The 2022 Act states that the Minister for Public Expenditure and Reform may, by order, reduce the threshold of 50 employees for specified classes of employers, subject to a risk assessment and public consultation.  Change of definitions and burden of proof Under the new Act, the scope of protected persons will be extended to include non-executive members, shareholders, volunteers, and ‘pre-contractual’ employees, such as candidates applying for a job during the recruitment process before the work-based relationship even begins. Further, retaliation will be more broadly defined. In respect of alleged detriment (be it an act or omission) caused to a person because of the making of a protected disclosure, the employer will have to prove that the detriment complained of was not in retaliation for, or because of, the person having made a protected disclosure.  Administration and staff Confidentiality regarding whistleblowing must be respected by all reporting systems and access to data by non-authorised staff prevented. For staff who are authorised, appropriate training must be given in respect of the handling of reports. Finally, records must be kept of all reports, as well as ensuring follow-up and feedback regarding these reports within certain timeframes.  Blending culture with policy The required process management will mean that many organisations will need to implement issue management systems. Simply having a policy and process in place isn’t, however, going to be an encouragement for nervous employees. Creating a culture in which people feel safe in speaking up—and feel that their concerns are welcomed—is far more important.  So, in addition to having a sound policy and process in place, what other steps should employers consider? Here are seven recommendations: Train managers and team leads to recognise when an issue could be a protected disclosure and, most importantly, to receive reports of potential issues in a calm and welcoming way. Word can spread very quickly about managers not being open to bad news. Think about how whistleblowing is discussed in the organisation and consider whether it is healthy or whether the narrative needs to be changed. Any pejorative language in connection with whistleblowing or speaking up needs to be identified and stamped out. The focus must be on recognising that people who bring risks to our attention are doing the organisation a great favour. It is worth highlighting that research demonstrates that the people who blow the whistle tend to be the most loyal employees who care greatly about the organisation. Ensure that the confidentiality regime is well- communicated and respected so that employees can be confident their identity will not become known if they disclose an issue. Do not become complacent if the whistleblowing policy is not used—rather than indicating a spotless organisation, it could be signalling a poor work culture where people either fear speaking up or just don’t care enough to bother. Remove any ‘good faith’ requirement from policies. The focus should be on the issue reported, not the motivation of the person reporting. Furthermore, there is no ‘good faith’ obligation under Irish or UK law or the directive. Make sure that penalisation is not tolerated. State this clearly in the whistleblowing and speaking-up policy, making sure there are clearly defined processes for reporting claims of penalisation and for following up on claims of penalisation. Provide feedback to a discloser on any action taken in response to their disclosure. The ability to do this will depend on the nature of the issue and the rights to confidentiality of other parties. At the very least, a discloser should be reassured that their concerns have been dealt with appropriately. It is likely that most organisations will need to overhaul their whistleblowing policies and processes in response to the Protected Disclosures (Amendment) Act 2022. The requirements may seem daunting, but help and advice on good practice is available. The benefits are clear, not just in terms of risk management and protection of brand and reputation, but also for the common good.

Dec 02, 2022
READ MORE
Management
(?)

2022 All-Member Survey

Brendan O’Hora reports on the findings of the 2022 All-Member Survey Research is conducted to discover new information or reach a new understanding of something, so the Institute’s biennial membership survey is crucial. These have been two years of significant change, and as a membership organisation, it has never been more important for us to act on the findings in a comprehensive, targeted way for the benefit of 31,000 members globally.  The survey was conducted in May and June with over 1,800 members by independent research agency, Coyne Research. This level of participation helps us to build a very accurate picture of the member experience and is much appreciated. It allows us to make the most of this opportunity to check in with members, and to ascertain how we will respond and act on the findings.  This year, we also conducted qualitative research via eight focus groups. This exercise gave us a deeper understanding of member sentiment and reinforced that we are operating in very unusual times.  The operating environment The pandemic may be in retreat, but its effects persist. An ongoing adjustment to hybrid working, declining levels of resilience after extended periods of pressure, and changing priorities among younger members, many of whom qualified or spent their early years in a virtual environment, have had an impact. Compounding this are growing cost-of-living pressures.  The top challenge emerging from the survey for businesses was, unsurprisingly, the competition for talent, up significantly on 2020. Following this is inflationary pressure and increased labour costs. What is resonating with members  Looking at our membership as a whole, the qualification is very highly regarded and a source of great pride. The letters mean a lot to our members, and that pride also extends to the robustness and quality of the education provided.  In reviewing the findings, Bernie Coyne at Coyne Research noted that members are broadly positive about the way the Institute has responded over the last two years to the pandemic.  She said: “As in previous years, members were invited to rate a range of services, based on their experience and degree of satisfaction, with sentiment remaining consistent. Over seven in 10 members rated the webinars and online CPD options as good, with a 20 percent increase in those who experienced them since 2020. The range of specialist qualifications was also rated highly, as was Accountancy Ireland magazine, the weekly Tax News circular, and the knowledge hubs on the Institute’s website.”  The research also pointed to an increase in the number of members who have communicated with the Institute by phone and email since 2020. Roughly seven in 10 rate their experience in communicating positively. While there was strong uptake of the virtual alternatives on offer during the pandemic, there is confidence in returning to face-to-face events. Indeed, the research points to a desire, particularly among younger members, to engage and learn about how they can make their membership work for them and derive the greatest value from it.  Consistent with many of our peers globally, we have seen drops in key member metrics, such as satisfaction and relevance as well as likelihood to recommend the qualification. While, unsurprising, given these unusual times, it is an important alert for the Institute that is already prompting action.   How we are responding to the findings In a changed external environment, and armed with considerable insights, our challenge now is to reposition how we engage with members, with a particular focus on younger members at the start of their career, to optimise their experience of the profession. We are working closely with the Chartered Accountants Student Society of Ireland (CASSI) and the Young Professionals Committee in so doing.  Our members are some of the strongest advocates for the profession, and, at a time when there is a continuing shortage of qualified accountants, it is incumbent upon us to ensure the membership experience is a positive, rewarding, and relevant one for these most important advocates.  One of the ways we will be doing this in the coming weeks and months will be through a campaign to put the tools into members’ hands to make their membership work for them. It will feature real members speaking about how they’ve made the most of their membership and will be accompanied by an updated member section on the website to help users better access and understand what is available, from membership details to Continuing Professional Development, conferences, social events, and supports. Our focus is on giving more control of their experience to our members, so that this experience can be tailored and made to work for the individual.   In closing, I want to return to a theme I touched on at the outset—resilience in the face of sustained pressure. One-in-two respondents reported that COVID had a negative impact on their mental health, compared to 2020. Younger members were less likely to be aware of the Institute’s member support service CA Support, and we will be working to increase awareness of this important resource.  Brendan O'Hora is Director, Members, at Chartered Accountants Ireland

Dec 02, 2022
READ MORE
Member Profile
(?)

Distilling the dream

Jennifer Nickerson left a successful career in Dublin to co-found a whiskey distillery in rural Tipperary. She tells Accountancy Ireland about her inspiration, ambitions and lessons learned along the way When Jennifer Nickerson co-founded Tipperary Boutique Distillery in 2014, the Aberdeen-born Chartered Accountant had already risen through the ranks at KPMG in Dublin to become an associate director in the tax department just seven years after joining as a trainee. Tipperary Boutique Distillery is now exporting worldwide and employs seven people in south Tipperary with further plans for expansion. Here, Nickerson tells us about what inspired her move into entrepreneurship and her experiences establishing and growing a small business with global reach. Q: Tell us about your life and career prior to co-founding Tipperary Boutique Distillery—what prompted you to become a Chartered Accountant? I grew up in Scotland and my dad, Stuart, was a master distiller. He managed and worked as a consultant for some of Scotland’s best scotch producers, such as Glenfiddich, Balvenie and William Grant & Sons. You could say I grew up in the industry. I loved it, especially the passion the people working in it had. I went to college in Edinburgh for six years, studying Veterinary Medicine initially and then switching to Accountancy. I decided I didn’t want to work outside in the cold and wet.  I wanted to work in an office and I had this perception that a job in accountancy would be “nine-to-five”.  I was wrong about that, but after meeting my husband Liam and moving to Ireland to train, I found I really enjoyed the problem-solving aspect of the work. Numbers make sense. There is a “right answer” and that can be very satisfying.  I worked in the tax department at KPMG and did a lot of advisory work. The hours were long but there was great camaraderie and that makes for a really nice working environment. Q: So you had settled into this new career in Dublin and you were enjoying it. What prompted you to up sticks and move to rural Ireland to set up a whiskey distillery? I married a farmer—but I did tell him that I wouldn’t be moving to Tipperary unless there was work there that would interest me as much as what I was doing with KPMG in Dublin. We talked it through and my dad had already mentioned during a visit to Ballindoney, Liam’s family farm near Clonmel, that it would be the ideal setting for a whiskey distillery. We could grow grain, we had the land to build a distillery on, there was good quality water in Tipperary and good conditions for maturing whiskey as it’s a little bit warmer than Scotland. He really just mentioned it in passing, but it struck a chord. I’d had lots of experience putting together business plans and I was lucky that Liam had a steady job working for the county council. It was a calculated risk and we could afford to do it, so we went for it. Q: What was your vision for Tipperary Boutique Distillery starting out in 2014? Ultimately, we wanted to produce a world-class whiskey from grain to glass here on Ballindoney Farm.  We knew we had everything we needed, but we also knew it would take time, because distilleries are expensive and there is also the cost of laying down spirit for at least three years before it can be sold as whiskey. It wasn’t until 2020 that we finally had the funding raised, the facility built and the equipment installed to open our own distillery. We had started outsourcing Irish whiskey casks from other distilleries cut to bottling strength with water from our farm and released our very first expression way back in March, 2015.  After that, we started taking our own grain from the farm, having it malted and distilled by my dad at other facilities. Now, we are able to do everything apart from malting here in our own distillery. We grow our own grain, we mill, we mash, we ferment, we distill, we mature and we bottle here on the farm.  Q: Tell us about your markets? What countries do you sell to and where do you have the healthiest trade? We sell into Belgium, France, Canada, into several states in the US, and a little in Korea and Singapore. We were selling to Russia, but obviously not any more, and we were in discussions with distributors in Ukraine and Poland, but the impact of the war has scuppered both. Germany is our biggest market, Italy is great, and Belgium is a surprisingly steady little market as well.  In Ireland, we sell online ourselves at tipperarydistillery.ie and through Irishmalts.com, James J Fox, The Celtic Whiskey Shop, and through local retailers around the country. Q: What was it like moving from a successful career as a tax advisor in a Big 4 environment into the cut and thrust of entrepreneurship? Was it a good experience? It was massively humbling to be honest, but also incredibly rewarding. At the start, I did miss having colleagues to talk to and bounce ideas off. I really felt I was on my own and it took me a while to find my feet. My background in accountancy definitely helped a lot with the ‘form filing’—understanding bills and applying for licenses, things like that. At the same time, there were lots of things I didn’t know about, like where to get a barcode or source seals for bottles. It was a massive learning curve. Q: What are the most important lessons you have learned so far running your own business? I had no idea starting out how vitally important sales are. That sounds like a ridiculous statement, but it took a long time for me to shift my mindset away from numbers and deadlines to just getting out there and going after sales.  What I know now is that you can’t give up. It’s no good just sending out an email to a potential customer and waiting for them to come back to you. You have to keep trying and telling literally everyone you can how great your product is and why. That can be really hard because it’s very different to sitting in front of a computer as an accountant and working to a deadline. You have to be willing and able to stand up on a stage and say, “this is what we’re doing, we’re amazing and our product is the best”.  There is a theory that 80 percent of all sales in any business come from 20 percent of costumers. Based on my own experience, I’d have to agree with that. There’s really no point in chasing one-off sales. It’s far more important to focus on valued relationships than driving around trying to get a bottle into every bar in the country. On the other side of the coin, you have to chase your bills just as much. If you’re not getting paid, you’re in trouble. Q: How has the COVID-19 pandemic and the more recent war in Ukraine affected your business and how have you responded? As soon as the Pandemic hit, our orders from overseas plummeted. We had two pallets due to go to a distributor in a country that was very badly impacted by the pandemic and they ended up having to wait six months to take delivery. Irish people are brilliant though. They started buying more Irish whiskey during the pandemic and that really saved our business. Russia’s invasion of Ukraine had a massive impact as well, because it caused major supply chain issues for us and other producers. We had to change our glass suppliers, and we had really big delays with cork supplies, the capsules for the top of the bottle seals, cardboard for packaging deliveries—you name it, everything was disrupted. Most of our suppliers I tried to keep, because we have good relationships with them and that’s really important in business. We were also probably lucky that we are quite a small operation, so we have been able to adapt more quickly than bigger producers. Q: The Irish whiskey industry has grown enormously in recent years—do you think there is room for further growth and what are your own plans from here? When we started back in 2014, there were something like six craft distilleries in Ireland, but by the time our own distillery was up-and-running in 2020, the number had risen to around 40.  The market grew so much in that time. There is a lot more competition now and a lot more diversity in the sector, but there are also a lot more customers buying Irish whiskey in Ireland and overseas. I think there is still scope for some growth in the market. Forty distilleries sounds like a lot, but Scotland has around 100. What we are seeing is that, as the market matures, there is less focus on cost and greater focus on quality. Each producer has to know their niche and communicate it well to the marketplace. For Tipperary Boutique Distillery, our plan now is to continue to sell in Europe, and expand our presence in America and Asia. We want to continue to grow sustainably and one day—hopefully soon—open our own visitor centre at our distillery here on Ballindoney Farm.

Dec 02, 2022
READ MORE
Comment
(?)

The heavy cost of defeat

Wavering over support for Ukraine’s defence against Russia is not an option. The stakes are too high for Europe’s stability and unity, writes Judy Dempsey Russia’s war against Ukraine is approaching its tenth month. Despite Russian President Vladimir Putin’s original aim of conquering Ukraine within days after his 24 February invasion, Russian troops have been forced to withdraw from strategic areas in eastern Ukraine.  It’s too difficult to speculate how and when this war will end, but there is already a sense of war fatigue among some governments and political parties in Europe and the United States—ignoring the fact that Russia has been escalating this war over the past few months and Ukraine must continue to fight for its independence. There is even some suggestion that Ukrainian president Volodymyr Zelensky should be persuaded to negotiate with Putin.  This would be a mistake.  Understandably, several EU countries—especially the Baltic States, Poland, the Czech Republic and Slovakia—do not trust Putin’s intentions. They want Ukraine to continue regaining occupied territory and then negotiate from a position of strength. This kind of victory for Ukraine would have several outcomes for the region and the EU. A Ukrainian victory could deter Russia from spreading its military and political influence in Moldova, Georgia and Armenia. Such a victory would be a fillip to pro-European political movements in these countries.  As for Belarus, there is little chance that the political future of Alexander Lukashenka, who has imprisoned many Belarussians since their failed uprising over two years ago and repressed any kind of opposition, would survive.   A Ukrainian defeat, on the other hand, could encourage the Kremlin to extend its influence over Eastern Europe and consolidate Lukashenka’s regime which would, in the short-term, increase his grip on power. In the long term, this ‘stability’ based on repression would lead to instability.  In short, a victory by Ukraine could increase the stability of Eastern Europe. A Russian victory would lead to instability in the region. As for the EU, a return to Russia exerting its political and economic influence over Eastern Europe would have several consequences.  First, it would lead to new divisions on the European continent.  Second, as many EU countries have taken in Ukrainians, an unstable Eastern Europe would lead to new flows of refugees. Populist movements could exploit such a development.  Third, it would lead to deeper divisions inside the EU. The Central European countries would oppose any negotiations that would allow Putin to save face. Germany and France might be tempted to restore relations with the Kremlin—indeed, neither Berlin nor Paris have called unambiguously for Ukraine to win this war.  Fourth, given these differences, it is hard to see how the EU could ever agree to a strong and united foreign, security and defence policy. Russia’s war against Ukraine has exposed the level of distrust between the Central European and big EU member states. Small EU countries matter. Perhaps, for example, Ireland, Finland and Denmark, could form coalitions of the willing with the Central Europeans to maintain political, military and economic support for Ukraine.  Wavering over support for Ukraine is not an option. The stakes are too high for Europe’s stability and unity. Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe

Dec 02, 2022
READ MORE
Strategy
(?)

Harnessing the human advantage

Attracting, retaining and upskilling their people will be a top priority for Ireland’s chief financial officers in 2023. Colin Kerr reports As Irish businesses approach another year of uncertainty, Ireland’s chief financial officers (CFOs) are looking to workforce upskilling as a major “investment opportunity” in the 12 months ahead. The latest Deloitte CFO survey benchmarked the sentiment of 1,151 CFOs in 15 countries in Europe. Published in mid-November, the bi-annual survey sought the views of 75 senior finance executives in Irish business, in sectors ranging from construction, healthcare, and manufacturing, to retail, tourism and transport.  Seventy-two percent said upskilling was a major priority for them currently, while 96 percent identified attracting and retaining skilled talent as one of the biggest risks they would face in 2023. “This outweighs their assessment of other risks, such as the economic outlook for Ireland, the geopolitical outlook, supply chain logistics, and cyber risk,” said Danny Gaffney, Partner, Deloitte Ireland. “The survey also highlighted the point that a lot of CFOs are recognising the multiple benefits of upskilling at a macro level. As Irish businesses upskill their teams, it creates capacity within those teams and CFOs see the importance of that given the constrained talent market.” Businesses in Ireland are refocusing their workforce policies and planning talent attraction and retention, according to Deloitte’s findings. Eighty-five percent are looking at rolling out flexible working patterns, while 69 percent are reviewing their reward offering.  Sixty-eight percent, meanwhile, are investing in wellbeing and assistance programmes, and 59 percent are investing in sustainability initiatives, such as measures to reduce their carbon footprint. “Wellbeing and assistance programmes are actually getting leveraged to a greater degree. Going back to the hybrid discussion, the usual supports that are available onsite are not always available when you are working in a hybrid environment,” said Gaffney. “Having in place good wellbeing and assistance programmes is very useful to organisations in the hybrid environment where CFOs and their teams are not as well-connected as they would be onsite.” Gaffney advised that CFOs put a clear strategy in place when considering how best to upskill their team. “What we need are practical solutions where team members continue in their roles and can upskill around the working day, either in person or online,” he said. “At Deloitte, we are working with clients to help them meet this challenge, including an increasing focus on digital technologies. Personally, I would encourage CFOs to look at training as a better use of their internal capital than focusing on external resources, as a means to allow them to do some of the challenging things they are not doing at present.” The pursuit of digital finance strategies is one of the challenges facing CFOs. Upskilling existing employees can help to meet this challenge. “Getting upskilling right is essential. If you don’t get it right, it falls by the wayside and the business, the CFO and the internal teams all lose out as a result,” said Gaffney. “The biggest trap CFOs can fall into is making upskilling too complicated. The three pillars I would identify are: Show, Support, Assess. CFOs need to be sure the people on their teams are getting the specific training and development they need.” Communication is equally important, as is commitment, according to Gaffney. “It is a two-way street and both the CFO and their team need to be open, upfront and honest in advance of committing to training and upskilling,” he said.  “The business needs to understand the team motive and the individual team members, who are being upskilled, need to understand the business motive behind the process. Commitment is also key because—if we are talking about businesses trying to generate capability to create business value going forward—they need to be committed to ensuring the right conditions are in place for their teams to excel during and after the upskilling.” The growing trend towards hybrid working among businesses in Ireland offers its own potential opportunities. “Remote and online training is much more commonplace now than it was two or three years ago,” said Gaffney.  “With hybrid working, the big challenge a lot of businesses and organisations have faced, and continue to face, concerns connectivity. They can say, ‘we mandate you to be in the office on particular days each week,’ and that can lead to a reaction that may be very negative.  “On the other hand, there are workplaces that are more employee-led in terms of when people are required to come into the office. The challenge in this scenario is that these employees can feel disconnected from the organisation.  “Training is a brilliant way to make people feel connected. When training is made available to me through work, I feel that I am valued and more aligned to my role. This is because I can see that both my organisation and I understand what it takes for me to be successful.” The foremost challenge for many organisations is their CFO’s capacity to “absorb costs”, both new and existing, Gaffney said. “Rates of inflation will remain higher for a longer period of time, as the cost of debt rises and the appetite for risk declines, and organic growth is more of a focus for the CFOs over merger and acquisition (M&A) activity. “Reducing M&A activity may seem like something CFOs would look to do, but they should look at longer-term investments to mitigate current risks.”

Dec 02, 2022
READ MORE
Innovation
(?)

Unlocking the value of the cloud

To get ahead in digital transformation, companies must embrace cloud technology—and the CFO has a key role to play. Donal Óg McCarthy explains why Successful companies have long had a common trait—resilience. Surviving and thriving in these current, very uncertain, times makes this resilience more necessary than ever.  Companies are being forced to reimagine their businesses, often through changes to their technology estate. Why? Some want to automate processes, scale capacity, and create new growth opportunities. Others are simply seeking the cost savings and greater efficiency needed to bring their enterprise spend under control. While some enterprises have risen to the occasion, others have struggled, and as leaders emerge, there is a common thread that unites them—they are embracing the power of the cloud as the foundation of the digital core, which is key to business reinvention. The hard truth, however, is that many in the boardroom are feeling underwhelmed by their company’s cloud experiences to date, leaving leaders wondering why new ways of delivering and consuming IT services have fallen short of expectations.  From the chief executive’s perspective, the accelerated innovation might not have happened at the desired pace. More control and better governance may have proved elusive for the chief operating officer. The chief technology officer could still be waiting for the technology to deliver on transformation. The chief financial officer (CFO), meanwhile, may be wondering why there is no sign of a boost to the bottom line. While the significant benefits to be gained from cloud technology remain, leaders’ experiences have, in many cases, been tarnished by the challenges they have experienced along the way. What has become clear is that success in adopting cloud calls for a new type of boardroom mindset—and a conversation that goes far beyond the technology itself.  And while finance leaders may recognise the potential of the cloud, they are not always equipped with what’s needed to realise the full benefits.  A study carried out by Accenture in 2021, The Cloud First CFO, found that 32 percent of CFOs regarded a lack of cloud skills within the finance function as a major barrier to doing their jobs. In that same year, 35 percent of the global executives polled by Accenture in its 2021 research, How to Unleash Competitiveness on the Cloud Continuum, highlighted a misalignment between IT and business as one of the top pain points in cloud adoption.  Unleashing the potential of the cloud Although the cloud landscape continues to undergo a fast-paced evolution, many organisations still struggle to generate maximum value. No matter what industry or area of the business you work in, adopting cloud services as a core part of your overall business strategy is the first step toward gaining a competitive advantage. The value case for the cloud must be examined in a more holistic way, moving beyond the financial lens and looking at areas such as sustainability, better customer and employee experience, talent re-skilling and innovation—all of which will deliver ‘360-degree value’. CFOs can quickly build on their own function’s experience of digital transformation to unlock more strategic priorities using better data-driven insights and forecasting to support the business.  CFOs are also uniquely positioned to significantly influence the technology choice and direction that will enable business strategy. Accenture’s Global CFO Research, Catalyst of the Future Corporate Value, indicates that 73 percent of CFOs are retooling finance with the latest technology for the specific purpose of extending influence across the enterprise. At the same time, finance teams might be disappointed to discover that the potential of the cloud to make expenditure more predictable is by no means guaranteed. The reality for many organisations is that complex consumption plans from big vendors, and prices that keep changing, often result in runaway costs and ‘bill shock’.  Optimising value and performance, and successfully transitioning from capital expenditure to operational expenditure models, requires a different mindset and a cultural shift across the entire organisation. Adopt a Cloud FinOps approach The new financial management discipline Cloud FinOps—shorthand for ‘cloud financial operations’—involves bringing greater financial accountability to managing the variable spend model of the cloud. It is a methodology that advocates for a collaborative working relationship between technology, finance, and business teams, resulting in the iterative, data-driven management of cloud spending.  When closer collaboration has been established under the Cloud FinOps umbrella, unit economics and value-based metrics demonstrate business impact. Teams begin taking accountability for cloud usage/cost and become empowered to manage their own usage in line with their budget.  Enterprises of all shapes and sizes are being asked to evolve their cloud organisations to adapt to this new financially focused mindset. This will drive business value through their cloud estate, especially as they increasingly seek to go ‘cloud native’ and utilise multiple cloud service providers.  With the right processes, capability and tooling in place, an organisation’s spend on the cloud can be significantly reduced and wider qualitative benefits unlocked. These benefits can improve the organisation’s competitive position in the market through increased speed to market, on-demand scalability and employee engagement.  Build your cloud fluency  For CFOs, this is evolution rather than revolution. It’s not about finance people mastering technology, or tech teams starting to become finance people. It is about a meeting of minds and closer collaboration, understanding each other’s motivations and complementing our respective skills.  All of this is achievable with a FinOps capability set up at the centre of the organisation. With real-time visibility of cloud expenditure, IT and finance can work together and become more proactive, identifying potential overruns before they become an issue.  This structure can also bring better governance to the wider organisation, helping develop a culture that empowers other business teams to take ownership of their decisions and understand the cost implications.  Top of the agenda for the CFO is to make sure they have a key role in driving the cloud journey. They must be directly involved with cloud adoption—not just making sure the numbers add up, but also learning about and understanding the cloud. No one expects high levels of technical expertise, but the CFO will need enough knowledge to make informed decisions about their organisation’s future technology partnerships.  Wherever possible, an organisation needs to nurture its existing talent, upskilling people to contribute to the cloud journey. This will help to ensure that everyone in the enterprise feels part of the project from the outset—always the best recipe for success.  The complexity of the cloud, however, means that internal skillsets will need to be supplemented with external expertise. Be prepared to forge partnerships with third parties who understand your business and can provide a good cultural, as well as technical, fit.  Cloud journeys might appear long and complex at the outset, but with a new boardroom mindset and cross-department collaboration, cloud value can become eminently attainable and a critical enabler of business transformation.  Make the leap, take the lead Leaders in enterprise technology have extended their advantage in the last few years by doubling down on their investments with a more aggressive cloud-enabled technology strategy.  There is a new group emerging, however, that is outpacing its peers by re-platforming to the cloud, adopting an innovation-led mindset and expanding access to technology across functions. These organisations are leapfrogging their competitors and breaking through previous performance barriers to get ahead.  This group does so by moving to the cloud at scale, with computational flexibility and strategic agility enabled by the world-class technology capabilities of cloud service providers. Virtually overnight, you can accelerate software development cycles, change business processes, and build new capabilities into your organisation. Crucially, there will also be more opportunities to innovate and experiment—something that was difficult in the past when resources were focused on firefighting and supporting ‘business as usual’.  Look at the process holistically: the multiple steps now involve getting to the cloud, utilising the power of the cloud, and operating across the cloud continuum, offering a range of capabilities from public to private to edge computing. This reframing allows you to flip IT budget spend and put more into innovation-related activity than operations.    By expanding access to technology across different business functions, organisations can focus on widening business priorities, touching on issues like employee reskilling, well-being, and sustainability.  Ultimately, taking the lead in cloud adoption will catalyse change adoption, advance digital transformation, and promote growth through innovation. The three As for cloud success The differentiating factor among cloud leaders is their focus on three things when it comes to their teams—alignment, adoption and ability. Alignment With a shared strategic vision across the c-suite, and alignment in execution between IT and the business, companies will be able to move faster in the race to the cloud and derive the most value. Ability By building up leadership competencies, upskilling and recruiting talent, and by ensuring digital fluency skills trickle out across the whole enterprise, a culture can be created to drive continuous learning and keep the business at the leading edge. Adoption Having re-platformed in the cloud, reframed the business through the optics of FinOps, and extended its reach with new scale and agility, the door is open for adopting new ways of working and innovation practices that will make the business more resilient.

Dec 02, 2022
READ MORE
...21222324252627282930...

The latest news to your inbox

Useful links

  • Current students
  • Becoming a student
  • Knowledge centre
  • Shop
  • District societies

Get in touch

Dublin HQ

Chartered Accountants
House, 47-49 Pearse St,
Dublin 2, D02 YN40, Ireland

TEL: +353 1 637 7200
Belfast HQ

The Linenhall
32-38 Linenhall Street, Belfast,
Antrim, BT2 8BG, United Kingdom

TEL: +44 28 9043 5840

Connect with us

Something wrong?

Is the website not looking right/working right for you?
Browser support
CAW Footer Logo-min
GAA Footer Logo-min
CCAB-I Footer Logo-min
ABN_Logo-min

© Copyright Chartered Accountants Ireland 2020. All Rights Reserved.

☰
  • Terms & conditions
  • Privacy statement
  • Event privacy notice
  • Sitemap
LOADING...

Please wait while the page loads.