Norah Collender, Professional Tax Leader at Chartered Accountants Ireland, speaks to the OECD’s Pascal Saint-Amans about tax reform, climate change, and supporting growth beyond the COVID-19 crisis. First of all, it has been a busy 2021 on the tax front. Aside from the historic agreement for BEPS 2.0 Pillar 1 and Pillar 2, what are the highlights for you? There is no other; that is the highlight. It was the culmination of years of work and has cannibalised the overall tax agenda. To say that the agreement of 137 jurisdictions and the agreement by G20 nations to international tax reform spearheaded by the OECD is momentous is an understatement. The theory of Pillar 1 and 2 is taking shape. However, nations are now turning to the logistics of the agreement. When do you realistically see Pillar 1 and Pillar 2 rule changes being implemented at national level? There is a timeline that the political masters have set, so I can only repeat what you will find in the implementation plan as endorsed by the Inclusive Framework and the G20 leaders and finance ministers. The aim is to get all of this into force in 2023, which means that we need to come up with model rules for the implementation of Pillar 2 by the end of November this year and have a multilateral convention ready for signature by the first half of 2022. Then, the nations must get down to business and look at the multilateral instrument and how they can reflect it in their national legislation. The multilateral convention doesn’t have to be reflected in domestic legislation because it is an international instrument. It depends on whether you are a monist or pluralist, but fundamentally, the need to ratify this instrument is more about Pillar 2, which must be translated into domestic legislation. We expect the European Union to move this year fast. We already know that the French presidency of the European Union aims to get this approved in the first quarter of 2022. Yes, the European Commission has been very supportive and is moving ahead with it. Can you comment on the relationship between the OECD and the EU and what involvement the OECD might have in assembling the EU Directive to give effect to Pillar 1 and Pillar 2? And do you think that the EU may go beyond the principles agreed at OECD level? First, you cannot put Pillar 1 and Pillar 2 in the same basket. As I indicated, Pillar 1 will be translated by multilateral convention, so it’s not about a directive. Nobody is thinking of that. Second, as regards Pillar 2, the agreed way forward is that the OECD will develop model legislation. The EU will probably turn this into a directive that countries will have to implement. It’s not expected that the EU will depart from what has been agreed with the OECD; I don’t think that the European Commission intends to do such a thing. And countries like Ireland made it clear that they will make sure that the directive is fully compliant with the OECD agreement, so there is no worry or concern on that front because that is the common understanding. Following that same topic of the logistics of large-scale international tax reform, has the OECD carried out any up-to-date costings on how much investment hubs like Ireland could gain or lose in tax revenues on implementing the reform measures? Yes, we have. We have done a detailed piece of work, but the estimates belong to the members. We have not communicated on the country-specific estimates coming out of our impact assessments, and I will not start now because these belong to the members, and we have done the work with them. The only exception is when countries that have not joined the agreement claim that it didn’t bring any money to them. We had to say that this position was incorrect, and we gave the figure for Kenya and Nigeria, but we haven’t shared the detailed figure. We have also provided the overall figure, which is $150 billion of additional revenue for Pillar 2 and $125 billion of shifting of the tax base for Pillar 1. Ireland has the estimates from the OECD, but Ireland also has its own estimates. The estimates from the OECD for Pillar 1 are based on the macroeconomic approach, which may no longer be relevant. Countries have much more granular information. What we try to do at the OECD is provide countries with a common methodology to allow for a common approach and a shared understanding of the issues. So the other reason we have not communicated the granular data on a country-by-country basis is because it may need some updating. Pillar 1 implementation requires treaty adjustment via a multilateral instrument. How realistic is it that countries which are slow to make new treaties, particularly the US, will adopt the multilateral instrument in a reasonable timeframe? Is it difficult? Yes, it is difficult. It would be extremely naïve to pretend that getting the US Senate to ratify a multilateral dimension related to tax is an easy task. But just because it’s difficult doesn’t mean it can’t happen. Everybody thought that the deal would never land, that there would never be a political agreement. We delivered the political agreement. Everybody thinks that we cannot deliver a multilateral convention, but I am confident that we will deliver a multilateral instrument within the timeline. Everybody says that the US would never ratify, and that’s not the working assumption. The working assumption with this administration and the previous administration, which was a Republican administration, has been that Pillar 1 would require a multilateral convention, and that was the working assumption of the Trump administration when they negotiated Pillar 1. So, is it difficult? Yes, obviously. Is the US a country with a separation of power almost unique in the world, making it very difficult to translate into domestic legislation the political agreement reached by the Executive? Yes, absolutely. Is it impossible? No, it’s not impossible, and we will try to meet all the conditions to make it not only possible but done. And I think the odds have never been more positive to get ratification.  And what if Congress doesn’t support President Biden? Is the agreement strong enough to survive without the US? I would make two different responses. One is that it’s not the working assumption. We don’t work on the assumption that the deal is impossible because the US might not ratify it. The second answer, on a more personal note, is the international tax system needs a fix. This, I think, is the last nail to fix it after BEPS. My take is that whether it is ratified in the next six months or nine months or not doesn’t change the fact that this reform, one day or another, will be implemented. There is no way back to the old world. There will be challenges with the implementation of Pillar 1 and 2 at national level. Businesses within the scope of Pillar 1 and Pillar 2 also face substantial challenges in resourcing reporting obligations and corresponding systems changes – and, of course, increased tax bills. When Pillar 1 and 2 are in place, can business get any assurance that this is it for the foreseeable future in terms of international tax reform or are more changes on the horizon? I don’t see more changes on the horizon, frankly speaking. Precisely for the reasons we’ve seen. It’s a big deal, it took a lot, its aim is to stabilise the system. I don’t buy the stuff about increasing the cost of compliance. It will reduce the spend on expensive tax lawyers to make tax functions a profit centre, so if companies were slightly more reasonable, they could save a lot of money. The increased cost is due to the fact that these companies have aggressively planned and have located their rent in countries where it didn’t really belong. And that’s the cost, but that’s precisely what governments said is no longer acceptable, and that’s why you have this move. When you look at the end result and not the narrow-minded tax perspective of tax lawyers always trying to find the new game in town, they should understand that the world has changed. They will be better off investing in compliance rather than trying to find the loophole and then claim that all of that is extremely expensive. That is a little old-fashioned, I think. Members of Chartered Accountants Ireland supported Pillar 1 but found the implications of Pillar 2 in terms of the loss of tax sovereignty very concerning. The OECD is not a democratically elected body and has taken its mandate from the G20 to design tax rules that erode the tax sovereignty of small open countries like Ireland. What is your response to these concerns on loss of tax sovereignty and the role played by the OECD? First, I think there are two serious flaws in what you have said. One, the OECD is an international organisation made of members who are sovereign and who agree roles in a sovereign manner. Second, we don’t take mandates from the G20. The G20 can mandate us, but it is first and foremost the OECD itself that decides what it does, whether the G20 asks for it or not. So, I think we need to be clear. If we want to talk about sovereignty and mandates, we need to get it right. If we move on to the more political approach, for the past 30-40 years, you have had globalisation without any form of tax regulation. So, the international tax rules were developed one century ago in an economy where you had tax sovereignties in closed economies. And that’s when Keynes did his theory, which works in closed economies. The world has changed. We’ve had globalisation, it was a political choice. But what didn’t go with globalisation was some form of tax regulation, which means that the countries kind of gave up their tax sovereignty because in an open economy, if you don’t have any tax regulation, countries lose their sovereignty to those who are more competitive like Ireland, Luxembourg, the Netherlands, Singapore, and some others. And these countries were absolutely right to get in that game, because that is what the system was designed for. Now, when you have a global financial crisis waking up countries and waking up people against globalisation, the taxing countries realised that their sovereignty had gone. But nominally, they could still exercise it and they decided to go back to exercising their sovereignty. You have two ways of exercising your sovereignty in times of crisis. One is to shut down the borders and implement withholding taxes, terminate your tax treaties, and take unilateral measures against others. Or if your tax treaties don’t allow you to do so, implement transaction taxes and such because they are sovereign – like Ireland is sovereign. So that is the non-cooperative game, which is really bad for everybody. Or you try to find a cooperative game, telling those who took a lot of advantage over the tax competition – they were the winners of the unregulated game – “Listen, we need to rebalance this and do it in a cooperative manner, meaning a common set of rules”. And this is what has happened. The countries that agreed implicitly to give up their sovereignty because they are high-tax countries and benefited from globalisation at some point said: “We are no longer benefiting from globalisation. Not only are we no longer benefiting from it enough, but we are also facing a political crisis of confidence in globalisation”, which explains why you have populist movements here and there. The response was either some form of tax war or some form of tax cooperation. It is true that in that dimension, those who benefited from unregulated globalisation will benefit less. And that’s a serious issue for Ireland and the small open economies, but that’s the reality of the game and you perfectly know it. We do have an entitlement to design our own tax rules, however. But you are, and other countries are. You remind me of the conversation with the Swiss when we started attacking bank secrecy. They said: “We are entitled to do what we want”. Yes, you are. And the French or the Germans or the Americans are entitled to put an end to that tax treaty with you. They’re not obliged to have a tax treaty, nor are they obliged to let money go to Switzerland without a withholding tax. They’re entitled. When you’re sovereign and when you claim your sovereignty, you better recognise the sovereignty of the others. You cannot have your cake and eat it. Either you are sovereign, and you recognise that the others are sovereign also, or you recognise that you better regulate these frictions between sovereigns. It’s not only the big countries dictating their laws to the small countries. The small countries had their say, participated, and helped shape it. Given the intense focus on climate change, what role will tax play in helping the world meet the COP26 climate goals? As we are talking about tax, the link between tax and climate change is the price of carbon. Climate change is largely due to carbon emissions, and carbon emissions today are not priced. Now, the price of carbon emission can be determined through tax or an emission trading system (a market mechanism). There are markets and so be it, and there are some taxes, but clearly when you combine them both, more than half of carbon emissions are not taxed, are not priced. And that’s clearly extremely worrying. What we can expect in the years to come is that countries will have – if they really want to fight climate change – to put a price tag on carbon. And we know that the price tag is not €4 (I mention €4 because that is the average price of the emissions that are priced). A bit more than half of them are not priced, and for what is priced, the average is €4. I think the minimum economists would agree on is at least €60 per tonne. So, to respond to your question, the role of tax will probably be to help price carbon emissions, and this is something that is extremely difficult politically. The French know about that with the Yellow Vests. We can see price hikes in energy prices today and telling those who struggle to heat their house or to fill the tank of their car that it will increase further because of a carbon tax is extremely difficult, but necessary. The real question on that front, I think, is how do you organise the political economy of that reform? And the second big question is the competitive impact on economies. That is the question of the EU, which wants to move towards more carbon pricing through a combination of tax and an emissions trading system. But if you have a country, or a group of countries, with a high level of price for carbon, then you have a risk of leakage. So, you have on the one hand the social impact of the reform on the political economy and on the other hand, the competitive dimension and the risk of leakage, which drives you to think of a carbon border adjustment mechanism, which itself can trigger some trade tensions. We are in the following conundrum: climate change is happening. It’s urgent to address it. It will not be addressed without pricing carbon. Pricing carbon means either tax or market, but tax will be part of the equation. However, taxing carbon is extremely difficult, both domestically and internationally. And that’s why we at the OECD think that we must provide a platform, an inclusive framework, to talk about that, to bring countries together and to find a common path forward while not preventing those countries willing to move faster from moving faster. It isn’t carbon tax for the sake of it, however. It must be to drive behavioural change. Is there any role for the tax system to incentivise, subsidise, and help develop new technologies? Is the OECD looking exclusively at the carbon tax, or is anything being considered on the incentive side? That’s a good question, and one I don’t have the answer to. We clearly need to work on that. Tax incentives to facilitate technological innovation is indirectly part of carbon pricing and is probably something to explore. But if we go back to the basic economic mechanism, as long as you don’t internalise the negative externalities – that is the mantra of the economists – but as long as you don’t factor the negative impact of carbon into the price of goods, the related prices will not send the right signal. Therefore, the long-term investment in less intensive carbon products will not be made. So, you can do tax expenditure to facilitate investment in carbon-free technology, but if the price of plastic imported from China does not reflect the intensity of carbon, that may just be a wasteful tax incentive. You really need to adjust the price in the long-term, and I think that’s the main challenge. The OECD recently published a report titled Tax and Fiscal Policies After the COVID-19 Crisis. Ireland, like other countries, has amassed substantial debt to fund public spending on supports throughout the crisis. Ireland is following OECD advice by not increasing taxation and maintaining supports for as long as needed. What tax policies should an economy like Ireland put in place to support inclusive and sustainable growth beyond the COVID-19 crisis? That’s a very good question. The OECD can advise governments and can give some sense, but the basic line is that it is for the governments to decide what is best for them. We do a lot of tax policy advice, but I am always humble and cautious in what we can tell countries. It is very easy from Paris to say you should do this or that, but the political economy of reforms is extremely difficult. I see two or three challenges from the outside. One is the impact of COVID-19 on the debt level, even though our line is don’t rush to fiscal consolidation to pay the COVID-19 debt because that will not make it. The best way to pay back the COVID-19 debt is to have growth, so don’t kill growth with overly aggressive tax policies. Second, you need to take advantage of the COVID-19 crisis to address the fundamentals of the economy. Ireland also has an ageing population. That is a serious challenge in the long-term and is something you need to incorporate into tax policies. The fact is that the contribution from labour will decrease, and pensions will become more expensive to bear as a cost for the State. And there is also what we’ve just discussed, which is the climate change dimension. In Seamus Coffey’s report, you also had the advice not to be overly dependent on corporate income tax revenue. I think that’s absolutely true, so that would definitely be one of the recommendations. There is room for manoeuvre in Ireland and moving towards a more environmentally friendly tax environment, which we have discussed, is important. But again, the political economy of these reforms is difficult. The workload isn’t slowing down for the OECD. You are working on introducing a digital transformation maturity model and that’s going to be a benchmarking system for developing countries. Is this linked with Tax Inspectors Without Borders? Is the desire to support developing economies in implementing a proper tax structure? You’re very well informed. Yes indeed, the work is done through the Forum on Tax Administration (FTA) and what we call the maturated model, which is a way to allow members (tax administrations) benchmark themselves without going public to say this country is doing well and that one is not. We try to provide a matrix with which they can evaluate where they are advanced, where they are lagging, and draw on best practices. That’s true for developed tax administrations because you have very different approaches, and they can take advantage of what is done better elsewhere. But you are absolutely right. Developing countries can benefit from that, especially as developing countries are experiencing interestingly a move from a paper-based administration to what we call ‘Administration 3.0’ where everything can be on an app, including the payments. That’s an opportunity and yes, we are thinking of possibly using Tax Inspectors Without Borders (TIWB) to assist developing countries, even though it’s not the core business of TIWB, but we may use TIWB to provide a better service. TIWB works pretty well by the way, and Ireland helps on a couple of cases. Yes, the Irish tax authority is involved and is a forerunner in the digitalisation of tax technologies, collection, and administration. In our view, measures like this will contribute to the tax justice agenda for developing countries, so it is a good development. Thank you for your time, Pascal. Thank you also.

Aon’s Nicholas Hatherley explains why risk is the key word for trustees today, and outlines how the risk management toolkit for Irish trustees is growing. Life has become a lot more complicated since most defined benefit (DB) schemes were first established back in the 1960s and 1970s. Back then, interest and inflation rates were persistently high, longevity was relatively stable, scheme members’ rights were quite restricted, and people tended not to move roles very often. Almost none of that is true today, and DB scheme trustees have to contend with various risks that barely featured on the agenda just a few decades ago. “Risk is the key word for trustees today,” says Nicholas Hatherley, Senior Investment Consultant and Actuary – Retirement & Investment at Aon. “That’s been the case for around ten years now. Falling interest rates have made it much more expensive for DB schemes to provide the promised benefits, even against a backdrop of strong equity and bond returns. Interest rates have been falling through the floor, and we now have negative rates in Europe. Fortunately, the risk management toolkit for Irish trustees is growing, with our market following the UK in the approach to locking down risks.” Increased longevity is one of the key factors driving up the cost of benefits. “One of the big issues over the last number of years is how everyone is generally living longer,” Hatherley notes. “That’s good news for those involved, but not so good news for their pension schemes, which will need to fund pensions for longer. This represents a risk, even though the rate of improvement in life expectancy has slowed a little in recent years.” The other big challenge is falling interest rates, which have depressed bond yields and driven up the cost of pension provision. In some cases, the cost has risen to such a level that it is no longer feasible for schemes to provide benefits on an ongoing basis, and trustees have decided on closure. “The first step many sponsors take is to close the scheme to future accrual,” says Hatherley. “Existing members retain their accrued benefits, with future contributions diverted to a defined contribution (DC) scheme, which new employees also join. At the more extreme end, companies have closed down schemes completely. Smaller schemes are winding up at a fairly steady rate. The number of DB schemes in Ireland now stands at around 550. Five years ago, there were more than 700.” According to Hatherley, closure to future accrual is a strategy seen across the Aon client base. “But by moving future contributions to a DC arrangement, the risk transfers from the sponsor to the member.” Interestingly, the statutory minimum funding standard (MFS) is no longer seen as fit-for-purpose in many cases. Its assumption of a 6% interest rate for those yet to retire means that even schemes that meet the standard may not be in a position to meet their liabilities. “We have been working with trustees and sponsoring employers to look beyond the MFS and focus on the longer-term. They have to decide if they want to continue paying out pensions until members die, or if they want to de-risk the scheme by buying them out before then.” In that regard, many schemes will emerge from funding proposals agreed with the Pensions Authority over the next few years. Longer-term planning will need to begin now for many of them. “They have to balance the short-term hurdle of meeting the MFS against the long-term needs of the scheme.” Of course, trustees must also pay attention to equity markets. “The bull run on equity markets has been quite phenomenal over the past ten years. And that includes the quite dramatic fall of more than 20% at the outset of the COVID-19 pandemic in 2020. As Aon forecast, markets bounced back very quickly. On the other hand, liabilities are increasing due to falling bond yields. We encourage trustees to buy more bonds to help match liabilities while investing in growth assets where required to fill any deficit. The investment journey evolves as schemes mature, and trustees should re-evaluate it every three years at least.” Trustees are also adopting other methods to manage risk. One of these is the buyout of pensioner members’ benefits through the purchase of an insurance policy. This effectively sees the insurance company taking on longevity and other risks. It makes no practical difference to members, but trustees must decide if the insurance company is as financially sound as the scheme’s sponsoring employer. In some cases, where schemes are in difficulty, the trustees can use the Section 50 mechanism to reduce the pension benefit payable to members. “Buyouts are quite strategic,” says Hatherley. “Schemes with big pension liabilities on their books can shift a large amount of risk to an insurance company, often at a lower value than they are reserving for. As a result, they are no longer exposed to market or longevity risk for the group of members concerned.” Some schemes are also seeking to offer deferred members enhanced transfer values to remove further liability from the books. While many sponsors are considering this option, the role of the trustees is to facilitate the process rather than encourage it, according to Hatherley. “Typically, enhancements vary from scheme to scheme. It depends on how willing sponsors are to get the liabilities off the scheme’s books. Success tends to be dictated by member take-up and the effectiveness of the communication exercise.” A buy-in has the same key objectives as a buyout but works differently. Instead of shifting the pension liability to an insurance company, the scheme purchases an insurance policy to match some or all of the scheme’s liabilities. Pension payments from the scheme to covered members are exactly matched by a payment from the insurance company to the scheme for as long as those members live. The asset and the liability remain on the books. This can be simpler from an accounting perspective, and therefore more attractive for sponsors. Aon carried out research with its DB clients in recent months to explore what they are doing to manage pension scheme risk. Many are considering closure to future accruals, others are considering buyouts and buy-ins, while investment risk is also being addressed. “From our perspective, we are encouraging trustees to be ready for opportunities that may arise to manage risk better,” Hatherley concludes. “For example, if investment markets move in their favour, as they did earlier this year, that they are prepared, they can move quickly and nimbly to take advantage and reduce risk, often at a lower cost than would otherwise be possible. We are seeing many trustees putting automated frameworks in place to cater for that, and this is very encouraging.” For more information, visit www.aon.com/ireland Nicholas Hatherley is Senior Investment Consultant and Actuary – Retirement & Investment at Aon.

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

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

Welcome to this week’s Technical Roundup. In developments this week, the Financial Reporting Council and Financial Conduct Authority have jointly written to CEOs of UK issuers who are required to start producing their 2021 annual financial reports in a structured electronic format; the Committee of European Auditing Oversight Bodies has issued revised “CEAOB guidelines on the auditors’ involvement on financial statements in European Single Electronic Format (ESEF)”. They replace the initial guidelines issued by the CEAOB in 2019. Read more on these and other developments that may be of interest to members below. Financial Reporting The Financial Reporting Council (FRC) have published a staff factsheet on climate related matters to assist preparers of annual reports under FRS 102 The factsheet provides guidance on how climate-related matters may impact a set of financial statements. The first part of this factsheet outlines the ways in which climate related matters may impact a set of financial statements prepared under FRS 102 and the second part summarises current and proposed legislative requirements applicable to companies in the UK in relation to climate and associated matters. The FRC and Financial Conduct Authority (FCA) have jointly written to CEOs of UK issuers who are required to start producing their 2021 annual financial reports in a structured electronic format. The letter reminds such entities of their obligations and of the FRC and FCA’s quality expectations. The European Financial Reporting Advisory Group (EFRAG) have issued a detailed five-month status report outlining the progress to date for the elaboration of sustainability reporting standards following the recommendations of the Project Task Force on European sustainability reporting standards. The International Accounting Standards Board have announced that they expect to publish the Exposure Draft Non-current Liabilities with Covenants on 19 November 2021. The UK Endorsement Board (UKEB) has published its [Draft] Endorsement Criteria Assessment: IFRS 17 Insurance Contracts and welcomes stakeholders’ views on the potential adoption of IFRS 17 for use in the UK. The comment period runs to 3 February 2022.    The UKEB has also launched a survey on subsequent measurement of goodwill and are keen to hear views. You can take part in the survey until 26 November here. The UKEB invites stakeholders to attend a series of upcoming roundtables as it develops its response to the following IASB consultations: Post Implementation Review – IFRS 9 Financial Instruments, Classification & Measurement ED/20212/7 Subsidiaries Without Public Accountability: Disclosures Auditing A new report from the UK Financial Reporting Council (FRC) has set out the key elements required by audit firms to ensure they are delivering high quality audit. The Committee of European Auditing Oversight Bodies (CEAOB) has issued revised “CEAOB guidelines on the auditors’ involvement on financial statements in European Single Electronic Format (ESEF)”. They replace the initial guidelines issued by the CEAOB in 2019.  ESEF is the new electronic reporting format for annual financial reports published by issuers whose securities are admitted to trading on a regulated market in the European Union for financial years beginning on or after 1 January 2021. Other Areas of Interest The Pensions Authority has published FAQs on  investment and borrowing for one-member arrangements under the Pensions Act, 1990, as amended. It has also given notice of forthcoming information on  final Code of Practice and guidance for one-member arrangements (OMAs) during this week, instructions on outsourcing notification, guidance for the public and employers about the minimum standards they should expect from master trust vehicles and a findings report from the Authority’s engagements with master trust, DB and DC schemes during December .We will bring you details when published. The organisation, Irish Rule of Law International (a joint initiative of the Law Societies and Bars of Ireland and  Northern Ireland), is running a commercial law conference on November 25th.Readers may be interested in the paper on “Recent Developments Concerning Auditors Liability” by Gerard Sadlier and spoken to by Michael Coonan of McCann FitzGerald LLP. Tickets cost from €10-€30 euro and the conference can be booked here . The Public Interest Law Alliance together with a number of law firms is promoting Pro Bono week from 22nd to 26th November. Readers may be interested in the session on Implementing the Charities Governance Code on Wednesday, November 24 2021 - 12:00pm to 1:15 pm where legal professionals will discuss the Code, the organisational role played by trustees, the essential elements of good governance, the key legal duties of charity trustees, and provide tips to NGO's for compliance. The Decision Support Service (DSS) has launched a number of consultations recently as part of its preparations for the commencement of the Assisted Decision-Making (Capacity) Act 2015. One of the consultations is on the code of practice for financial professionals and financial service providers. This code will provide guidance for financial professionals and financial service providers on how to engage with and advise customers who are relevant persons under the 2015 Act. It also provides guidance on working with decision supporters and interveners.   You can access the draft code here. Feedback can be given by completing the online questionnaire or by downloading the questionnaire. The DSS asks that the financial professional draft code be read alongside the main  Code of Practice on Supporting Decision-making and Assessing Capacity. The consultation closes at 5pm on Friday 7 January 2022.   The Central Bank Governor recently spoke at a round table event focused on the changing landscape of the financial system, including issues such as the impact of climate change, technology and the need for firms and regulators to be future-ready. He said greenwashing was an area of concern as ‘green’ market practices are currently almost exclusively based on voluntary principles and standards, which leaves a lot of room for different interpretations. The Central Bank Director of Financial Regulation also spoke about climate change in his recent speech delivered at Irish Association of Corporate Treasurers (IACT) Annual Conference. In other Central Bank news, feedback on a consultation paper on engaging with stakeholders  from earlier in the year is now available .Also, the Central Bank recently published its Anti Money laundering bulletin focussing on Fund and Fund Management companies . For further technical information and updates please visit the Technical Hub and the Covid-19 Hub on the Institute website. 

Welcome to this week’s Technical Roundup.  In developments this week, the FRC has published the annual review of corporate reporting which outlines the top ten areas where improvements are needed, IAASA has published a video briefing for audit committees and the EFRAG has released it’s third of three podcasts on “good practices in reporting the business model, sustainability risks and opportunities”. The Financial Reporting Lab has published a report to help companies prepare for mandatory TCFD reporting. Read more on these and other developments that may be of interest to members below. Financial Reporting The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting, which outlines the FRC’s ‘top ten’ areas where improvements to reporting are required. These include reporting on judgements and estimates, revenue and cash flow statements. https://frc.org.uk/news/october-2021/frc-to-focus-on-climate-related-reporting-as-new-d The IASB has prepared a series of five bitesize webcasts on the Exposure Draft Management Commentary. This has been produced to address frequently asked questions about the International Accounting Standards Board’s proposals for a new framework for preparing management commentary. The European Financial Reporting Advisory Group (EFRAG) released it’s third of three podcasts on “good practices in reporting the business model, sustainability risks and opportunities”. This third and final episode in the series highlights the current and potential role of technology in sustainability reporting. FRC publishes oversight responsibilities and independent supervisor reports The FRC has also published its annual report to the Secretary of State for Business, Energy, and Industrial Strategy (BEIS) on how the FRC has discharged its oversight responsibilities in 2020/21 and its Report of the Independent Supervisor on Auditors General. The Financial Reporting Lab (the Lab) has published a report to help companies prepare for mandatory TCFD reporting.  It includes practical advice and examples that better address aspects of TCFD reporting from those companies already adopting the framework on a voluntary basis. https://frc.org.uk/news/october-2021/preparing-for-mandatory-tcfd-reporting,-including Auditing IAASA have published videos for those who would like to view their recent Audit Committee Briefing. Sustainability 57 organizations have released an open letter for the European Union to act on ESG disclosure standards. They encourage the European Commission to promote a global baseline set of standards through supporting the IFRS Foundation on the launch of the International Sustainability Standards Board (ISSB). The Irish Central Bank Deputy Governor Sharon Donnery was a panellist at the recent awards ceremony for G20 Tech Sprint 2021 on green and sustainable Finance  where the central banks’ mandate and roles in the area was discussed including the dedicated climate change units. Fraud and money laundering The UK Government recently published a fraud sector charter containing an assessment of fraud threats in the accountancy sector.  This voluntary charter sets out actions to tackle fraud in the accountancy sector including improving information regarding fraud and enhancing Companies House data. The UK National Economic Crime Centre has launched a campaign aimed at raising awareness of payment diversion fraud. The aim is to help small and medium sized businesses and home-buyers protect themselves. Click here to read more about the campaign. The European Data Protection Supervisor recently issued its latest newsletter  which contains information on the EDPS views on matters such as  the European Commission’s proposed Anti-Money Laundering legislative package  which it supports but suggests improvements to protect individuals’ personal data.  Other Areas of Interest The Department of Enterprise Trade and Employment has published the revised work safely protocol recently. Entitled the “COVID-19 National Protocol for Employers and Workers” it has been reviewed by employers and employee representative groups following the most recent public health advice received by Government.  On 20 October 2021, a guidance note was published by the Labour Employer Economic Forum, which supports the guidance set out in the Protocol. Following on from its recent Annual Conference 2021 - Opportunities and Aspirations for the Assisted Decision-Making (Capacity) Act 2015, the National Disability Authority has added presentations and other resources to their website. Also, recordings of the conference sessions can be watched via the NDA Youtube channel. The Property Services Regulatory Authority (PSRA) issued its Annual Report which presents an overview of the activities and outputs of the Authority in 2020. For further technical information and updates please visit the Technical Hub and the Covid-19 Hub on the Institute website. 

Welcome to this week’s Technical Roundup.  In developments this week, the UK Financial Stability Board has welcomed the publication of the 2021 status report by the industry-led Task Force on Climate-related Financial Disclosures; Public trust and confidence in charities research has recently been published by the Charity Commission for Northern Ireland. According to new research 87% of respondents marked 'doing what they say they will do' as a major factor that influences their trust in a charity. Read more on these and other developments that may be of interest to members below. Financial Reporting The Financial Reporting Council (FRC) has published the findings of its review into IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’, which has been identified as a recurrent problem area by the FRC.  The International Accounting Standards Board (IASB) is currently consulting on proposals for a new accounting standard that would permit eligible subsidiaries to apply IFRS Standards with reduced disclosure requirements in their financial statements. The comment period is open until 31 January 2022. The IASB recently released a short video which introduces the board’s proposals set out in the exposure draft. The European Financial Reporting Advisory Group (EFRAG) released it’s second of three podcasts on “good practices in reporting the business model, sustainability risks and opportunities”. In this second podcast, Giuseppe Milici, Task Force member and Sustainability Services Senior Manager at Deloitte Italy, provides insights on the good practices identified in the report’s supplement, the selection process set by the Task Force, observed common threads among the identified good practices and the challenges encountered by the Task Force. The UK Endorsement Board secretariat has published its survey on IASB Exposure Draft ED/2021/3 Disclosure Requirements in IFRS Standards – A Pilot Approach (the Disclosure Pilot). The ED proposes replacing today’s mandatory disclosure regime with a series of disclosure objectives, giving companies more freedom to decide what should be disclosed to meet the objectives. Read more here. Q&A We have published a number of Questions & Answers to answer some of the most common questions members and other stakeholders have in relation to audit and assurance engagements financial reporting and insolvency. Other Areas of Interest The Financial Stability Board (FSB) has welcomed the publication of the 2021 status report by the industry-led Task Force on Climate-related Financial Disclosures (TCFD), which reports on the further progress in TCFD-aligned disclosures by firms. The Irish Pensions Authority recently published information on trustees obligations to notify the Authority of outsourcing arrangements. From 1 December 2021, trustees must notify the Authority when they enter an outsourcing arrangement for the provision of the internal audit and risk management key functions. Trustees who have entered these arrangements since 22 April 2021 must also notify the Authority. As part of Charity Trustees’ Week  on 15-19 November 2021 the Irish Charities’ Regulator together with Boardmatch Ireland, Carmichael, The Wheel, Volunteer Ireland, Charities Institute Ireland, Pobal and Dóchas, have put together a timetable of diverse events to suit trustees from every type of charity such as the Charities Governance Code Workshop for Small Non-Complex Charities on 18 November 2021 and the Charities Governance Code Workshop for Registered Charities on the 19 November. Places are limited so register now if interested. Public trust and confidence in charities research published by the Charity Commission for Northern Ireland. According to new research from the Charity Commission for Northern Ireland, 87% of respondents marked 'doing what they say they will do' as a major factor that influences their trust in a charity. Fraud and Money laundering The ICAEW has produced a useful insights article on payment diversion fraud. It outlines what it is and how businesses can avoid it for example by training and vigilance. It also provides advice  on what to do if it happens to your business and a link to the NCA brochure. HMRC has recently updated its guidance “Help and support for money laundering supervision”. There are a series of webinars on its pages on money laundering supervision containing information for all businesses and sectors including Accountancy Service Providers and Trust or company service providers registered with HMRC . For further technical information and updates please visit the Technical Hub and the Covid-19 Hub on the Institute website. 

The details of the procedure for accountants in exceptional difficulty to make an arrangement with Revenue for the income tax deadline are set out in our Irish tax developments, along with confirmation from Revenue that arrangements for accountants reporting turnover for VAT Form 56A continue to apply. On the UK front, read this week’s updates on HMRC administered COVID-19 supports and we also bring you news of a new economic crime levy. While in international news, with Ireland signing up to the OECD global minimum tax agreement, 136 jurisdictions including all EU Member States and OECD members have agreed the two pillar plan.     Ireland Revenue set out the process for accountants in exceptional difficulty for the upcoming income tax deadline to seek to put an arrangement in place. Long-standing arrangements for accountings to support a client’s VAT Form 56A application continue to be recognised by Revenue. UK           Read this week’s updates on HMRC administered COVID-19 supports. HM Treasury has published more information on a new economic crime levy on professional firms and financial institutions. International The OECD two pillar plan on international tax reform is agreed by 136 jurisdictions, including Ireland. Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax Newsletter by updating your preferences in MyAccount. 

Welcome to this week’s Technical Roundup.  In developments this week, the recently published Companies (Corporate Enforcement Authority) Bill 2021 (the Bill) establishes the Office of the Director of Corporate Enforcement (ODCE) as a standalone statutory body with a commission structure, to be called the Corporate Enforcement Authority (CEA); In its third quarterly podcast, the IFRS Interpretations Committee Chair and Vice-Chair of the International Accounting Standards Board Sue Lloyd joined Technical Staff Member Patrina Buchanan to talk about recent activities to support the consistent application of IFRS Standards during the third quarter of 2021 Read more on these and other developments that may be of interest to members below. Auditing The International Auditing and Assurance Standards Board (IAASB) has issued a proposed International Standard on Auditing of Financial Statements of Less Complex Entities. The consultation is open until 31 January 2022. The Institute's Audit and Assurance Technical Committee is considering this proposal in detail. To keep our members informed and updated on this important development we have published a webpage where members can access the consultation papers and submit their comments to us. IAASA have issued a revised version of ISA (Ireland) 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements. The main changes to the standard are designed to provide increased clarity about the auditor's obligations to detect material fraud and enhance the requirements for the identification and assessment of the risk of material misstatement due to fraud and the procedures to respond to those risks. Read more here. Financial Reporting In its third quarterly podcast, the IFRS Interpretations Committee Chair and Vice-Chair of the International Accounting Standards Board Sue Lloyd joined Technical Staff Member Patrina Buchanan to talk about recent activities to support the consistent application of IFRS Standards during the third quarter of 2021. Topics discussed in the podcast included; Non-refundable VAT on lease payments Accounting for warrants that are financial liabilities on initial recognition Demand deposits with restrictions on use Cash received via electronic transfer as settlement for a financial asset. The FRC’s Lab published a report that supports companies in the move towards high-quality digital reporting. The Lab report sets out key considerations and tips for companies covering: how to set up the structured reporting process; how to enhance the usability of structured reports; and common tagging issues to avoid. The Financial Reporting Council (FRC) has published the findings of its review into IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’, which has been identified as a recurrent problem area by the FRC. In it’s latest podcast, the European Financial Reporting Advisory Group (EFRAG) provided an insight into the European Lab Project Task Force on the reporting of non-financial risks and opportunities and the linkage to the business model (PTF-RNFRO) report : Towards Sustainable Businesses: Good Practices for Business Model, Risk and Opportunities, Reporting in the EU and Supplementary Document: Good Reporting Practices. Other Areas of interest The recently published Companies (Corporate Enforcement Authority) Bill 2021 (the Bill) establishes the Office of the Director of Corporate Enforcement (ODCE) as a standalone statutory body with a commission structure, to be called the Corporate Enforcement Authority (CEA). Listen to the Association of Compliance Officers’ podcast series. Compliance files- Season 2, Episode 1.This week they speak with Ian Drennan, Director of Corporate Enforcement, on the role and powers of his Office, the implications of the Hamilton Report and the Implementation Plan which can be found on the Department of Justice website. One of the strands is the Advisory Council one of the key responsibilities of which will be developing Ireland’s first multi annual strategy for combatting crime and economic corruption. The director also makes reference to the above Bill which he says the legislature hope to have in force by year end, so a recent priority of his office has been work in this area to have the CEA ready to go by January 2022. As part of European Cybersecurity Month ISME are hosting a webinar on cybercrime with Department of Justice and  An Garda Síochána on protecting your business from cybercriminals.    The free webinar is on 28 October, and you can register by clicking the link above. The Department of Enterprise Trade and Employment has issued a Budget day newsletter with a link to the department’s Budget 2022 allocation. The newsletter gives details of some of the business focused measures contained in Budget 2022 such as enhanced tax arrangements for remote working and funding for digital and green funds. The Central Bank’s Director General Derville Rowland spoke recently at  the A&L Goodbody Corporate Crime and Regulation Summit about the evolution of enforcement at the Central Bank. She referred to  areas such as establishing and maintaining the credible threat of enforcement by the Central Bank and also about the proposed Individual Accountability Regime under the General Scheme of the Central Bank (Individual Accountability Framework) Bill 2021 making reference also to the UK experience in relation to this. HMRC has issued its October edition of its  bi-monthly magazine for employers and agents giving them the latest information on topics and issues that may affect them. Also, in the anti-money laundering supervision area, HMRC has recently updated its Guidance on Understanding risks and taking action for Trust or Company Service Providers. Sustainability Sustainable Finance Ireland in conjunction with the UN-convened FC4S, has launched Ireland's Sustainable Finance Roadmap, in collaboration with public and private stakeholders across Ireland including the Department of Finance, Skillnet Ireland, and internationally. Developing sustainable finance talent will be prioritised as a key pillar of the roadmap. In launching the report, the Minister for Finance Paschal Donohoe said the roadmap was a priority Action Measure under the Ireland for Finance Action Plan 2021, demonstrating sustainable finance’s increasing prominence as a priority for Ireland and an essential tool in addressing the climate crisis. For further technical information and updates please visit the Technical Hub and the Covid-19 Hub on the Institute website. 

Susan Rossney, Public Policy Officer, writes: It seems that everyone is talking about sustainability nowadays. Accountants in SMPs are watching the news and listening to the debate. You may well be asking questions like: “What can I do in the face of a global issue?” “How will this affect my practice and my clients’ businesses?” “What questions will my clients ask me next?” “ What expertise should I be developing now?” “How will sustainability work for me?” The sense of urgency to address climate change across the world is intensifying. Droughts, floods and wildfires are increasing, ecosystems are collapsing, and in response people are calling for change. But climate change is part of a broader sustainability challenge – one that can be summed up as ‘environment, social and governance’, or ESG. The responsibility to meet this challenge falls on all businesses and firms, including small ones. As ESG continues its rise up the political and corporate agenda, smaller businesses now more than ever need to meet certain ESG criteria so they can access finance, win contracts or be part of larger companies’ value chains. Clients and consumers also expect businesses to have a positive impact on the environment and to be doing their part to contribute to change. Companies that want to prosper in the future will have little choice but to become sustainable. Small businesses have a crucial role in the transition to more sustainable economies and societies. Accountants are key financial advisors for those businesses, but also need to understand and implement sustainability practices for their own businesses. This article discusses the opportunities for small businesses – and their advisors – in embracing sustainability. “Practices who want to engage particularly with the next generation of staff and clients need to be able to take sustainability seriously and need to be able to demonstrate that” Conal Kennedy, Head of Practice Consulting, Chartered Accountants Ireland Environmental, social and economic issues present huge risks for businesses. Examples include: losing out to competitors; having reduced access to capital; developing weaknesses in supply chains; developing succession risks; and failing to meet the requirements of stakeholders, including consumers, clients, banks, business partners, staff and regulators. Accountants can identify and quantify these risks for their own practices, and develop policies for themselves and their clients to address them. But managing risks against ESG factors can also benefit businesses directly. As this article will show, if properly addressed, it impacts employee welfare, improving employee experience and leading to greater output; it affects ability to access finance; it enhances an organisation’s reputation, helping to attract new business and staff; and it can help companies comply with supply chain requirements of their larger clients. Preparers and auditors of financial statements will also need to consider these issues going forward. Generating new business Many accountants are now adding “sustainability consulting” to their services to clients. As trusted advisors, they can play a key role in helping SME clients think about their potential sustainability risks, and leverage opportunities offered by the sustainable transition. For example - Accountants can help clients to: assess sustainability impact and risks improve efficiencies reduce costs avail of grants acquire finance identify opportunities to expand their range navigate the changes Sustainability is also an increasingly important factor in tendering for contracts with larger organisations which have stricter sustainability goals. Some of these large organisations perform assessments of potential suppliers. Others also carry out regular risk screenings of existing supply-chain suppliers, and/or conduct internal audits and onsite supplier audits to verify that their supply chain suppliers are conforming to their policies. Accountants have a huge role to play in helping companies prepare this information, and in doing so themselves if they are part of these supply chains or are tendering for contracts. Accessing Finance Embracing sustainability is working towards ensuring the financial future of accountants’ businesses or their clients’ businesses. Investors are actively looking to invest in sustainable projects, and are screening out certain sectors or companies (like those heavily reliant on fossil fuels, for example). Businesses seeking this investment benefit from being able to collect and report on their sustainability-related activities against a recognised standard. Many banks are also adopting sustainability criteria and may require proof of sustainable practices from companies looking to avail of finance. There are also business grants as well as support schemes and tax incentives available for organisations looking to transition to more sustainable practices. Again, accountants have a huge role to play in guiding clients through this. Savings Operating in a sustainable manner saves costs. While there may be short-term costs associated with transitioning to a sustainable business model, businesses can recoup the investment they make and can also reduce their business costs by introducing more sustainable ways of working. According to the Sustainable Energy Authority of Ireland (SEAI), the average SME can save up to 30% on its energy bill by becoming more energy efficient. A business with an engaged and motivated team is also less likely to experience high employee-turnover and associated costs. In a drive to decarbonise Ireland’s economy, the rate of carbon tax increased by €7.50 in October 2020 from €26 to €33.50 per tonne/CO2. Reducing your carbon emissions will reduce your cost. Ultimately, though, any costs associated must be reframed as the cost of compliance or risk management. The greater costs are the costs of not being sustainable. Reputation With social media increasing access to companies, there are very few places to hide for organisations which are falling short of sustainability-related expectations. Staff expect it, and customers demand it. Companies not being transparent about their sustainability achievements, or their goals, will be called out by their customers and staff. Likewise, there is little patience for companies that are ‘green-washing’, i.e. presenting a false or misleading green public image. “64 percent of customers are ‘belief-driven buyers’ who will choose, switch, avoid or boycott a brand based on its stand on societal issues.” 2019 Edelman Trust Barometer Special Report: In Brands We Trust? Mobile Survey Attracting clients On the flip side, though, organisations that do embrace sustainability are in a strong position to attract clients. They can do this by becoming more visible in their community. Supporting local literacy or numeracy projects, participating in local charities or sports clubs, or engaging in local-tree planting initiatives not only increases brand awareness of a firm or business: it builds trust with a community. Remember – not everyone may be doing this, so you will have a first-mover advantage if you do. As a greater number of large companies are either required to or decide to report on human rights, diversity and climate-related policies, a greater number of local businesses supplying those companies will also be obliged to disclose their own sustainability practices, and will need help from a financial advisor to do so. Accountants who are experienced in offering clients this support may attract more clients looking to comply with the sustainability requirements of large organisations. Attracting & retaining talent Candidates are actively seeking jobs in companies with strong ESG credentials and are rejecting jobs in those companies not aligned with their own values. What was identified by McKinsey in 1997 as the ‘war for talent’ is as fierce as ever within the professional services sector, and organisations are going to great lengths to recruit talent. These same companies are now including their commitment to ESG values as a competitive differentiation. This is a trend seen by Karin Lanigan, Head of Member Experience in Chartered Accountants Ireland: “I have worked in recruitment for more than 20 years and in recent years, I have noticed a growing trend whereby candidates have become more and more discerning about types of organisations they’ll work for. They are not just considering salary and package; they are looking at the sector, at the reputation of an organisation, and asking themselves ‘will I feel proud if I’m out with my friends on a Friday night to say that I work with whatever the organisation is or whatever the sector is that they are in?’ They want to have sense of pride in their place of work.” Remember: a commitment to ESG does not have to mean having a large sustainability department or running an eco-business. It can also mean being a firm or company that looks after its employees, provides good training and promotion opportunities, and is active in its local community. “With ‘measurements’ everyone thinks of ‘carbon footprint’. But it doesn’t have to be. You can measure staff satisfaction through surveys. You can measure employee-turnover and retention or absenteeism. Encourage staff to measure the number of hours they spend giving back to others in the community.” Teresa Campbell, PKF FKM Impact on Financial Statements Preparers and auditors of financial statements should consider the impact on sustainability and climate change on every entity. Quoted companies, and some categories of larger companies have defined obligations to report on the impact of environmental matters on the companies’ businesses. These specific reporting requirements do not apply to private limited companies reporting under FRS 102. However, climate change and sustainability are major and developing issues that cannot be ignored by anyone. Both IAASA and the FRC have recently commented on matters that they expect to see considered in financial statements. Whilst their comments were largely made in the context of the IFRS framework, much of what they have said is directly applicable to financial statements prepared under FRS 102. Accountants should consider and report on how climate change has impacted on the assets and liabilities of the company, what additional risks have emerged and whether new or increased provisions are necessary. How has climate change impacted on the estimates and judgements applied, and do these need to be disclosed? Consider such matters as the useful lives of property, plant and equipment. Consider also the impact on impairment assumptions. Does the entity have an obligation to remediate environmental damage caused by any of its activities? Have any of its contracts become onerous, or are they likely to? The financial statements, taken as a whole, should contain sufficient information to be useful to stakeholders, and preparers should avoid the use of non-specific boilerplate. See IAASA’s recent observations on published financial statements. The Institute will cover these areas in more detail in future issues of Practice Matters, broadcasts of Practice News, and CPD courses. Some member resources Find more on the Institute’s Sustainability Hub with resources from articles, podcasts and webinars to a glossary explaining the acronyms and terms. You can also find tips in the Institute’s guide on Sustainability for Accountants. This free guide for accountants describes what to do – and where to start – to operate sustainably, successfully and cost-effectively.  

Has a friend ever said "my life is just worthless"? You may be strong and grounded and able to cope, and you may be able to offer support to others. You may have a friend, a client, a relative or a colleague who tells you that s/he is considering suicide. Let us consider this and how you might response to such a disclosure. How do you respond? Take the disclosure very seriously. Do not try to cheer them up and ‘take them out of themselves’. Ask the direct question if s/he even obliquely mentions suicide, saying something like: “My life is just worthless", "Sometimes I think that I just cannot go on”, “My family would be better without me". The direct question you should ask is “Are you thinking of taking your own life?” If the answer is “No”, then you should listen empathetically to how s/he is feeling and notice and name the feelings s/he seems to be describing. Do not deny how s/he feels. For example, if s/he tells you s/he feels worthless and useless, do not tell them that s/he should not feel like that with their beautiful family, fantastic job, and gorgeous house. Accept that s/he feels like that and let them stay with those feelings and talk about them. You just listen. If the answer is “Yes, I have thought of suicide”. You should accept this calmly and hear the depth of the dark place s/he is in. You should then ask if s/he has a plan and let him talk about it if they have a plan. Again, you should give time and listen empathetically. It is important to respect how s/he feels and not to provide your own experience or answers. Having given time and space to allow for the discloser’s feelings to be unpacked, ask what options s/he thinks are available to him. Do not produce your own solutions – listen to the potential ways forward and encourage development of those ideas. However, it is important that someone who is suicidal seeks professional help and you should guide them to that conclusion if it is not emerging. Tell them you will support them as s/he moves along the journey to recovery. Make sure that you stay connected and arrange for your next meeting /conversation to support them as s/he takes the journey they have outlined. Contact them if you have not heard within the time you have agreed. Make sure you are supported yourself, as this kind of disclosure can be difficult for you. CA Support has a confidential listening service. Feel free to get in touch if you need support during this time. We can be contacted by email at casupport@charteredaccountants.ie or call us on (353) 86 024 3294. Article written for CA Support by Prof. Patricia Barker, Dip. Couns., MPhil, PhD, FCA

In Irish tax developments, Business Resumption Support Scheme guidelines are now available. On the UK front, HMRC provides an update in response to issues with the 30-day CGT reporting service for residential property disposals. While in international news, the European Commission has extended the scope of certain aid measures under the General Block Exemption Regulation. Ireland Revenue recently published guidelines for the Business Resumption Support Scheme which will support businesses significantly impacted throughout the COVID-19 pandemic, even during periods when restrictions were eased.  A copy of the CG50A certificate is now available in the ROS inbox of the filer of the CG50 applications. UK              HMRC has published further details of the temporary solution to issues with the 30-day residential property disposal service. HMRC has issued a reminder that individuals can claim working from home expenses quickly and easily online.   International   The European Commission has extended the scope of the General Block Exemption Regulation which will allow Member States to implement certain aid measures without prior Commission scrutiny.   Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter.