Issuu on Google+








Invest in energy efficiency Save money and reduce your company’s tax bill

The Accelerated Capital Allowance (ACA) scheme is a tax incentive that enables your company to write down 100% of the cost of qualifying energy efficient products, against your profit in the first year of purchase. To find out more visit

The Sustainable Energy Authority of Ireland (SEAI) is partly financed by Ireland’s EU Structural Funds Programme co-funded by the Irish Government and the European Union.




The clouds may not have cleared entirely, but 2014 is kicking off with definite outbreaks of optimism. Ireland is a country that is hugely dependent on exports – one of the largest exporters of pharmaceuticals, medical devices and software-related goods and services in the world. The weak global demand of recent years affected Ireland badly. But, with its key markets showing signs of improving economies, it looks like good news for Irish exports in 2014. Figures from the Central Statistics Office showed a rise in exports in August, after a sluggish first half of year. Being the only English-speaking country in the eurozone means Ireland has an advantage in attracting multinationals. It was recently named as one of the top locations in the world for business services investments. As the demand for outsourcing grows, Ireland is in pole position to capitalise on this. In this month’s edition, we look at the outsourcing sector. We have a series of articles which look at the evolution of this industry in Ireland and how those looking to provide or use the service are helping to drive it forward. If the drive of the sector is coupled with the ability and commitment of the workforce, the outsourcing sector is sure to have a very bright future. Meanwhile, I’m sad to say that our Ireland editor Donal Nugent, after four years of expertly weaving the magazine together, has moved on to new opportunities. I’d like to thank him for his contribution and hard work. We have a new editor who will be introduced next month. Over the year, we aim to fill the magazine’s pages with interesting and useful content that will help you grapple with the challenges you face, and boost your own career. 
I wish you a fulfilling and prosperous 2014. Chris Quick, editor-in-chief,




The leading monthly magazine for finance professionals, available in six different versions: China, Ireland, International, Malaysia, Singapore and UK. There are different ways to read AB. Find out more at

ON PAPER Free to ACCA members. Annual non-member subscription £85


Download searchable iPad editions from the iTunes App Store

ON DESKTOP The latest edition and archive, dating back to 2009

View our special edition at


View our special edition at



Webinars on a raft of topics such as forecasting



Sign up for our weekly news and technical bulletin at

View our twice-yearly research and insights journal at


Look out for links in the magazine and see our monthly previews

Access the magazine for ACCA Qualification and Foundation-level students at


Search thousands of job vacancies and sign up for customised job alerts at


Accounting and Business tweets at @ACCA_ABmagazine




AB IRELAND EDITION JANUARY 2014 VOLUME 5 ISSUE 1 Editor-in-chief Chris Quick +44 (0)20 7059 5966 Design manager Jackie Dollar +44 (0)20 7059 5620 Designer Robert Mills Production manager Anthony Kay Advertising John Sheehan +353 (0)1 289 3305 Bryan Beasely +353 (0)1 289 3305 London advertising Richard McEvoy +44 (0)20 7902 1221 Head of publishing Adam Williams +44 (0)20 7059 5601 Printing Wyndeham Group Pictures Corbis ACCA President Martin Turner FCCA Deputy president Anthony Harbinson FCCA Vice president Alexandra Chin FCCA Chief executive Helen Brand OBE ACCA Connect Tel +44 (0)141 582 2000 Fax +44 (0)141 582 2222

ACCA Ireland President Diarmuid O’Donovan FCCA Deputy president Anne Keogh FCCA Head – ACCA Ireland Liz Hughes Tel +353 (0)1 447 5678 Fax +353 (0)1 496 3615


6 News in pictures A different view of recent headlines

Accounting and Business is published by ACCA 10 times per year. All views expressed within the title are those of the contributors. The Council of ACCA and the publishers do not guarantee the accuracy of statements by contributors or advertisers, or accept responsibility for any statement that they may express in this publication. The publication of an advertisement does not imply endorsement by ACCA of a product or service. Copyright ACCA 2014 Accounting and Business. No part of this publication may be reproduced, stored or distributed without the express written permission of ACCA.

8 News round-up A digest of all the latest news and developments


12 Interview: Michael Brosnan HedgeServ MD on the company’s growth


Accounting and Business Ireland is published by IFP Media, 31 Deansgrange Road, Blackrock, Co Dublin, Ireland. +353 (0)1 289 3305

16 Jane Fuller We need to tackle complacency in audit committee reports

ACCA Ireland 9 Leeson Park Dublin 6 +353 (0)1 447 5678

17 Sustainable recovery John Ihle celebrates Ireland’s leap forward Audit period July 2012 to June 2013 154.625


18 Martin Turner Members are making a difference, says the ACCA president




Reading this magazine to keep up to date contributes to your nonverifiable CPD. Learning something new and applying it in some way contributes to your verifiable CPD, as do the online questions related to certain articles on the technical pages, provided that they are relevant to your development needs.


33 Improved approach Governments are beginning to embrace the adoption of accruals 35 Graphics Taxes 36 Carbon countdown The risk of stranded assets 38 Big data Finance professionals should embrace the data bonanza


19 The view from Crevan Higgins and snapshot on outsourcing 20 The future is bright according to Capita Asset Services 22 Improving efficiences Microsoft and Accenture’s partnership led to standardised processes 26 Outsourcing for SMEs The decision to entrust an external body with key business processes is not one to take lightly

40 On a big scale Are global business services the next big thing? 43 Careers Dr Rob Yeung on giving feedback, and ACCA members’ survey 45 A fresh start What are your goals for 2014? 46 Profile-raiser Honing your marketing strategy 48 The acceleration game Month-end reporting


52 Technically speaking Aidan Clifford on new developments

28 Outsourcing in the public service The Public Service Reform Plan contains a number of actions to drive alternative models of service delivery

54 Tax – an update

30 BPO – opportunities for growth The Irish BPO sector has grown significantly in the past five years


31 Realising effective outsourcing Models for US companies


57 The view from Michael Murray, Murray, Cloney & Associates 62 Events 63 CPD 64 International Assembly 66 News





AIG announces a five-year sponsorship deal with Dublin GAA which is worth over E4m


South Africa is coming to terms with the death of former president Nelson Mandela, who died in December aged 95





Some 17 art installations, including a trail of light, featured during the DerryLondonderry City of Culture 2013 celebrations


Ireland remembered the 50th anniversary of the death of John F Kennedy, including mass in his great-grandfather’s native parish


Ryanair’s Michael O’Leary announced the company saw a 6% rise in passenger numbers in November, carrying 5.2m people


After 27 years with PwC, Unilever has switched auditor to KPMG. The move follows regulatory and market pressure to change company auditors more often




News round-up This month’s stories include KPMG recruiting 330 new people, Ireland’s tax system being the most efficient in Europe and Irish exporters reporting a rise in sales last year RSA CALLS IN PWC

PwC has been appointed to conduct a comprehensive review of RSA Insurance’s Irish operations, including its claims and finance functions and revenue recognition practices. It will also review the business’s reporting controls. RSA announced that pending the outcome of the review, it was suspending its chief executive, Philip Smith, its chief finance officer, Rory O’Connor, and its claims director, Peter Burke. Days later Philip Smith resigned, rejecting any suggestion of wrongdoing or error on his part. Apparent anomalies were discovered in the accounts during a routine internal audit. PwC was due to report back to RSA’s main board before the end of 2013, but after AB went to press.


KPMG will recruit 330 people this year for new roles in audit, tax and advisory, to fill 60 senior and 270 graduate trainee positions in its Dublin, Belfast, Cork and Galway offices. Shaun Murphy, managing partner, said: ‘Signs of domestic growth

and Ireland’s continued reputation as the location of choice for foreign direct investment mean that the demand for our services is growing in a number of areas.’ Meanwhile, EY announced in September that it intends to recruit 80 new staff to executive positions and will be looking for more than 160 graduates this year.


The International Integrated Reporting Framework has been released, representing an important milestone in the market-led evolution of corporate reporting. The framework will be used to accelerate the adoption of integrated reporting globally, following successful trials of it in more than 25 countries. Details of the framework were not available as AB went to press.


PwC has agreed to acquire leading global consultancy business Booz & Co. The firms have not revealed the agreed price, but it is rumoured to be $1bn. Dennis Nally, chairman of PwC International, said the

merger ‘would give CEOs the opportunity to work with a global consulting team that could provide services from strategy development right through to execution’. The acquisition is subject to approval of a partner vote, which had not taken place as AB went to press.


Chambers Ireland warns that local government reform may increase business costs. Seán Murphy, Chambers Ireland’s deputy chief executive, said: ‘We have concerns about areas where town councils are to be abolished and replaced by municipalities to be integrated into county councils which have higher rates… local government reform is very welcome. For many years it has been the business community that has shouldered the responsibility for funding local services through the rates system. Reform must ease this burden rather than add to it.’


Ireland is to change company residence rules to eliminate opportunities for companies to become

DANSKE WITHDRAWS Danske Bank is withdrawing services to small firms and personal customers. The bank said it will ‘refocus its business in Ireland towards its corporate and institutional clients, where the bank’s international reach, market-leading technology and specialist advisory services gives Danske Bank a competitive edge’. It has stopped offering personal and business banking products to new customers.


‘stateless’ in terms of tax residence and liabilities. The commitment was made in the ‘Ireland’s International Tax Strategy’ document, published by the Department of Finance. The change will be included in the Finance Bill, being considered by the Oireachtas. The strategy also supports an extension of countryby-country reporting and pledges to assist developing countries increase domestic tax revenues through international action to clamp down on tax avoidance.


Ireland’s tax system is the most efficient in Europe and is the sixth most effective in the world, according to the latest PwC/World Bank Paying Taxes report. The assessment is based on the level of bureaucracy and administrative burden imposed on taxpayers. Where Irish businesses spend an average 80 hours a year dealing with taxes, in Germany the average is 218 hours. The report found that Ireland has an effective corporate tax rate of 12.3%, compared to an average 12.9% in the EU and 16.1% globally.


There was a strong welcome by business representative bodies to the announcement in Budget 2014 of capital gains tax rollover relief for reinvestments by entrepreneurs and small firms. The Small Firms Association’s chairman AJ Noonan said this ‘will play



a key role in contributing to growth’. It also welcomed the retention of the 9% rate for the hospitality sector and an increase in the cash receipts VAT threshold to €2m from May. But it expressed unhappiness with increases in excise duties.




Grant Thornton has been appointed as auditor of the IFRS Foundation, following a competitive tendering process. Seven firms tendered for the contract, which was previously held by BDO. However, BDO continues to provide the foundation with corporate tax services in the UK and the US.

More investment

Building new networks



Reduce costs



KPMG has launched its first global investment fund, KPMG Capital. The fund will focus on data and analytics businesses, making acquisitions and forming partnerships. Mark Toon, CEO of KPMG Capital and global lead for KPMG’s data and analytics practice, said: ‘With more data produced and stored in the last two years than in the rest of human history, many businesses are looking for strategic and practical solutions to manage the volume, velocity and variety of this data revolution. KPMG Capital will enable us to develop or acquire opportunities in data and analytics quickly.’ The fund will be managed in London.


KPMG has been appointed the new auditor of Unilever, winning one of the world’s largest audit contracts. PwC previously conducted the audits, but was not allowed to participate in the competitive tender for the new contract. Unilever

66% Monthly 7% Annual basis 20% Quarterly 1% Other measures 4% Six-monthly 1% Other HAS ACCESS TO FINANCE IMPROVED SINCE LAST YEAR?

Recruit local person for new markets


Improve communications and marketing 21%

New product development/brand


Target new markets


Focus on one market

62% Yes 38% No





Most Irish exporters report a rise in sales last year – but most also report no improvement in access to finance. Exporters used a growth in overseas markets to compensate for weak domestic demand, according to the Export Ireland Survey, 2013, conducted by the Irish Exporters Association and Grant Thornton. Some 62% of exporters reported a growth in exports during 2013, against 58% reporting an increase in 2012. Almost 80% expect export growth this year. But 62% of exporters reported that access to finance did not improve in 2013.





what transfer pricing documentation would be required, the accounting requirements and what other information would be needed to produce a template for it.

EU ACCOUNTS CONCERNS The European Union’s accounts for 2012 have been signed off by the European Court of Auditors (ECA), but the auditors expressed concern that the accounts still fail to fully comply with European legislation. The ECA said there should now be a rethink of EU spending rules and recommended simplifying the legal framework. It wants EU programmes to focus more on achieved value than on expenditure. There was an error rate on spending of 4.8% in 2012, up from 3.9% in 2011.

acted in anticipation of possible changes in law in the Netherlands that would enforce audit rotation. PwC had been Unilever’s auditor for over quarter of a century.


Within five years there will be just two or three truly global networks of accountancy firms because of the accelerating pace of consolidation, says BDO. It made the prediction as it announced its first global results following its UK merger with PKF. BDO completed other mergers in national territories, including with PKF firms in Australia and New Zealand. The enlarged BDO reported turnover of $6.45bn in the year ending September, a 7.3% rise over the previous year.


Regulators are relying on their own assessments of banks’ expected losses in reviewing capital adequacy, rather than banks’ reported impairment charges, says Fitch Ratings. Regulators appear to believe that IFRS provides a delayed and unreliable recognition of likely losses. Fitch says that third-quarter earnings announcements illustrated the differences between


banks’ financial reporting of impairments and regulators’ assessments of expected losses. RBS’s creation of an internal bad bank led to £4bn to £4.5bn of additional impairments and reported losses, but will not materially change the assessed capital adequacy situation. Regulators had already provided for the potential losses in their assessments. Meanwhile Swiss regulators have required UBS to set aside additional risk capital for likely future provisions.


Corporates no longer need to report as profits those gains that are caused by a worsening in their credit risk status, under reforms to hedge accounting approved by the IASB. The change can be adopted by entities immediately, without waiting for other amendments to IFRS 9, Accounting for Financial Instruments, to come into effect. Other changes agreed to IFRS 9 will allow entities to better reflect their risk management activities in their financial statements. The previously proposed mandatory implementation date of January 2015 for the amended IFRS 9 has been removed, allowing entities a longer transition period.



The OECD is considering the issues associated with country-by-country reporting in what could be a precursor to its support for the principle. The move by the OECD follows the endorsement earlier last year by the G20 of the OECD’s Action Plan on Base Erosion and Profit Shifting (BEPS). The OECD is now assessing

Accounting Dictionary, a new mobile app, had more than 15,000 downloads in its first three months. The app was developed by Lancaster accountant Mark Ellis FCCA and builds on the successful www. website. Ellis said: ‘I set out to create an accessible collection of accountancy terms and abbreviations to assist students, accountants and finance staff, together with business owners trying to understand what accountants are talking about, or indeed anyone with an interest in finance.’ ■

TRENDS 15.3% Sligo 14.8% Leitrim 14.1% Galway 14.0% Dublin 9.7% Wexford 9.7% Meath 9.2% Westmeath 9.0% Kerry VACANCY RATES

Sligo and Leitrim have the most vacant commercial properties in Ireland at the moment, according to GeoView. Kerry has the least amount of vacant commercial lots with a 9% vacancy rate.

PwC Manual of accounting series 2014 Expert financial reporting guidance – whichever framework you report under! Fully up-to-date with the latest standards and packed full of practical worked and real life examples, the PwC Manual of accounting series 2014 provides comprehensive and reliable guidance on IFRS and the new UK GAAP from one of the world’s most respected names in accounting. Whether you are reporting under UK GAAP, IFRS or both, we have a cost effective pack for you. For details of the books included in each pack, visit Global guidance on IFRS

For those reporting under IFRS in the UK

Manual of accounting: IFRS 2014 Pack

Manual of accounting: IFRS for the UK 2014 Pack

• ISBN: 978 1 78043 306 6 • Price: £120 • Pub date: Dec–13

• ISBN: 978 1 78043 307 3 • Price: £130 • Pub date: Dec–13

For those reporting under IFRS in the UK

For those reporting under new UK GAAP and IFRS in the UK

IFRS reporting 2014 Pack

UK financial reporting 2014 Pack

• ISBN: 978 1 78043 308 0 • Price: £170 • Pub date: Dec–13

• ISBN: 978 1 78043 474 2 • Price: £180 • Pub date: Dec–13

For those reporting under new UK GAAP

Manual of accounting: New UK GAAP Pack • ISBN: 978 1 78043 473 5 • Price: £60 • Pub date: Oct–13

Order your pack today at

and make sure that your financial reporting guidance is up to date with the latest standards.



SERVES YOU WELL Michael Brosnan FCCA talks to AB Ireland about award-winning fund administrator HedgeServ, a global tech-focused success story with Irish expertise at its core


Whiteboard Managing director of HedgeServ, Michael Brosnan FCCA was part of the company’s founding team in 2008 and helped establish its offices in Dublin which, as well as complementing its key New York presence, provides fund accounting, investor services, middle office services, private equity services, IT support and client relationship management. ‘The idea with HedgeServ was that we would open with a clean slate. In effect, we had a whiteboard of all the things we wanted the company to deliver,’ Brosnan reflects. Leasing 33,000 sq ft of prestigious St Stephen’s Green real estate was a clear statement of intent with regard to future positioning, and today HedgeServ employs close to 400 people in Dublin, with a second office in Cork, which opened in April 2013, expanding rapidly. Establishing any new business in Ireland in 2008 might have seemed a brave move, given the turbulence in the



Part of the founding management team for HedgeServ.



he story of Ireland’s development as an international hub of fund administration is frequently told side by side with its success in attracting direct foreign investment; so much so that the two can seem inextricably bound together. No one doubts the global nature of the fund industry, but after two decades of success in attracting the industry’s major players into Ireland, there are clear indications that the next stage of development will have a more home-grown flavour. This will be driven, not just by the attractiveness of Ireland as a location to do business, but by the determination and ambition of the first home-grown generation of talent to flourish in the sector. Those looking for signs of things to come need look no further than HedgeServ. Established in 2008, HedgeServ’s founding expertise centres on Dublin, and the company has put Ireland at the heart of its narrative of success from day one. In just a few years, the company has gone from standing start to industry pacemaker, combining a commitment to cutting-edge technology – in particular, its determination to offer real-time data sharing and reporting – with a strong emphasis on a customer-centric approach. Boasting more than $180bn in assets under administration, HedgeServ’s rapid coming of age was confirmed in 2013, when it was named overall winner of Institutional Investor’s Alpha Awards for hedge fund administrators, as well as best performer across all service categories.

Joins International Fund Services (Ireland), rising to the position of managing director, head of Accounting.


Becomes a member of ACCA.


Moves to Dublin, taking up position in PFPC Global Fund Service.

economy at the time, but Brosnan says the company’s unique selling points overrode any concerns about domestic issues. ‘Our clients come to us for our global service offering capabilities. What we were offering was a fresh approach, around technology in particular, so we never really took the view that HedgeServ was particularly exposed to what was going on in the Irish economy.’ The motivation to set up HedgeServ was, he says, a broad dissatisfaction with the prevailing ‘black box’ service model across the sector, particularly in relation to data accessibility and transparency. ‘Generally, what was happening was administrators were starting with accounting-only information that, although solid and reliable, required further consolidation with information from other systems, such as middle office and risk, to create an aggregate picture. The problem is that this is inefficient, as it requires further reconciliation, and is error-prone and subject to delay. We could see that moving from that, to a real-time system, would give us much more flexibility around data that was not just net asset value (NAV)-specific, and would ultimately give us a key advantage.’ HedgeServ’s distinctive offering, then, is built on a green field technology platform with what it says is a new perspective. ‘What we wanted to do was to shift our emphasis to the front office world, meaning our clients have the option to see their portfolio, live and ticking, in real time. So, rather than starting with an accounting system and trying to







HedgeServ is ranked number one in all 10 categories of Institutional Investor’s Alpha Awards.

is used, how much is automated and how much requires manual intervention. We’ve given a lot of thought to our data model, and how to access information, and have created a core database that allows us to reach in and pull out different slices of information.’ The company’s client base has been a mixture of established managers transitioning from other administrators and new fund launches. ‘What’s been very fortunate for us is that the number-one referral for new business is existing clients,’ says Brosnan. ‘A close second are audit firms and tax advisers, people who really benefit from the fact that we get it right for our clients.’ This emphasis on ‘getting it right’ is a critical selling point for the company: ‘Since the inception of the firm, we’ve had 100% NAV accuracy. We’ve never had to restate a NAV due to any fund accounting error. That’s a unique differentiator.’





The company sets up offices initially in Dublin and New York, and subsequently in London, Boston, Chicago, Grand Cayman and Cork.


Employee numbers rise to 250 in Dublin and assets under administration increase 103% over a 12-month period.


HedgeServ opens new offices in Cork and has more than $180bn in assets under administration.

make everything else fit in, as many legacy systems do, we started in our clients’ world and built our tool set around that.’ The credibility of the new company would be tied into its ability to deliver on this and, Brosnan says, there were a number of elements to meeting this challenge. ‘As a group of professionals, we had a long history in the alternative space and a track record of customising our own technology solutions.’ Not surprisingly, however, a good deal of the early time was also invested in ensuring that the new technology was rolled out successfully. ‘We had a lot of end users heavily involved in the development process. I certainly gained a good understanding of what it takes to develop a technology platform, not just in terms of ensuring that it works but in the nuances around creating new applications and new products, quality-assuring them and rolling them out to production following detailed user-acceptability testing.’

Growth While the aftermath of the international banking crisis has brought a new focus on regulation and transparency, Brosnan says none of this was news to the company founders. ‘Long before the crisis, we were firmly of the view that increased regulation was on the way. Obviously the crisis exacerbated that, but we had seen, for quite a while, that this was becoming a more regulated space.’ The success of the new technology platform was, he argues, further propelled by a sense that power has shifted significantly towards the investor over the past few years. ‘Administration is no longer a “check the box” exercise. Both managers and investors are now looking to get greater value from the administrator relationship. They increasingly demand clarity in the processes involved, what system


Married with three children, Brosnan is from Kerry, and has been living in Dublin since he began working in financial services in 1994. He studied ACCA in Limerick and completed these studies in his first job with PFPC International in Dublin’s newly emerging financial services sector. ‘Back then, the whole area of fund accounting and fund administration was relatively new in Ireland. Coming from Limerick to Dublin, I wouldn’t have had a huge awareness of the opportunities that were emerging at the time,’ Brosnan explains. A subsequent move to IFS represented, he recalls, a significant gear shift as the company grew rapidly in the years that followed, bringing a host of opportunities to Brosnan and his colleagues. ‘As the company was growing, we were growing with it.’ IFS was sold to State Street in 2002 and Brosnan left in 2008. ‘Having spent most of my career in a dynamic entrepreneurial company that was growing rapidly, and very technology-focused, I was excited by the opportunity to do that again with HedgeServ.’ As a young company, Brosnan defines HedgeServ’s corporate culture as centring on ‘creating an environment of excellence where people can progress and can see opportunity clearly. We look for people who are intelligent, obviously, but also ambitious and not afraid to work hard. When you create that kind of culture, you find people respond to it and perform. They are happy to put in the work, and the feedback we get through our clients is hugely positive.’

Professionalism Five years on from its establishment, Brosnan says the company’s decision to locate in Ireland has been well rewarded. The time zone advantage is, firstly, difficult to overstate. ‘When our US clients come to their offices in the morning, we are five hours ahead and that allows us to complete a lot of our control processes, so when they access our applications first thing, they are working with quality information. That’s a huge advantage, and always has been.



▌▌▌‘LONG BEFORE THE CRISIS, WE WERE FIRMLY OF THE VIEW THAT INCREASED REGULATION WAS ON THE WAY’ But it’s not the only reason we are here – the quality of the Irish graduate is also a key factor. There is a fantastic work ethic in Ireland and we feel we are going to create more and more opportunities over the next few years. In our second location in Cork, we already have 50 people and we have space for 200 there, which we believe we will fill easily over the next few years, more than likely leading to a third location.’ The strong customer-service element that the company prides itself on is also linked to the scale of its investment in Ireland. ‘The culture we’ve built here is a problem-solving one and, no matter what business you’re in, if you come across someone who’s willing to help you solve a problem, you don’t forget it. We want to make sure that when our clients speak to their fund accountant that it’s a very positive experience. It links directly back into our ACCA profile and that’s very important to us.’ ACCA, in fact, forms a key part of the company’s careers story. ‘You will find, in the most complex financial products, concepts that link directly back to things you have studied, ranging from fair value of a financial security

to consolidation of a multi-tier corporate structure. ACCA is geared to the practical as well as the theoretical and if you have someone going through the ACCA process, what you are getting is a logical thought process, with well developed management skills and professionalism. We are very supportive of our employees pursuing this path and expect that the number choosing to do so will continue to grow.’

Milestones With regard to the risk that comes with starting again from scratch, Brosnan says, ‘My own personal view was that I was young enough to do it, and I wasn’t afraid of the hard work that came with it. The reward is this fantastic sense of being part of something that you see growing from the ground up.’ While the milestones along the way have been impressive, Brosnan is in no doubt that the best is yet to come. ‘You need to be at a certain critical mass before you can attract and interest the larger clients. At more than $180bn, we are definitely at that point. We feel we are a good story in Ireland and we feel we are creating very good careers here: highly technical jobs with great room for progression. This is a hugely exciting time for us and we wide open to growing in Ireland.’ ■ Donal Nugent, journalist




Must do better The investor looking for informative and intelligent commentary on a company would do well to look virtually anywhere other than the audit committee report, says Jane Fuller If company boards are to set themselves a New Year’s resolution, improving the quality of audit committee reporting should be it. This is not just because the UK Competition Commission has recommended an advisory shareholder vote on the audit committee report. It is because this central part of the independent directors’ job must be better explained. Wearing my CFA UK hat, representing users of accounts, I read several audit committee reports last year and gave feedback to the FRC’s Financial Reporting Lab, which published guidance in October. If I had received £10 for every mention of the word ‘review’ to describe what these committees do, I’d be rich. With some honourable exceptions – Barclays has been in the vanguard – these reports tended to be bland and complacent. One of the challenges for audit committees is that other contributors to annual reports have upped their game. Remuneration committees have been under constant pressure to disclose more. On the executive side, various initiatives on narrative reporting have fed through into more intelligent discussions of strategy and business models. The financial crisis has prompted better reporting of top or emerging risks, with mitigating action explained. Take Debenhams’ report for the year to 31 August 2013: there’s a Q and A on the market context and an independent expert’s view on the changing nature of retail. Michael Sharp, chief executive, is asked how he is tackling declining store profitability and why he thinks it is worth opening more stores in an internet age. Key performance indicators and their link to remuneration are spelt out. The CFO’s report is always a mustread. Debenhams’ explains capital allocation and has a table that links the main cashflow movements to the change in net debt.


After all that, the audit committee report is an anti-climax. The description of its role and activities has no distinguishing features. No shareholder would be any the wiser about significant financial reporting issues and how they were addressed.

This is not unusual and it indicates massive scope for improvement. A good example comes from Ashmore Group, the emerging markets investment manager. With a year-end of 30 June, it set out to modernise its audit and risk committee report – the same applied to the auditor’s report by KPMG. ‘Significant accounting matters’ in the audit committee report include whether carrying values for goodwill and other intangibles should have been impaired. The committee ‘critically reviewed the analyses performed by management’. The auditor talked about ‘headroom’ and the sensitivity of the outcome to the assumptions used. The issue was declared ‘a key audit risk’. Now that does give investors a good prompt for questions. It also shows how the audit committee and the auditor can produce complementary reports. Committee chairman Nick Land, an FRC board member, is deliberately taking a lead. Gareth Horner, at KPMG, has spotted an area where value can be added by embracing proposed reforms – at national and international level – to auditing standards. One of the trickiest tasks in the wake of the Competition Commission’s insistence on five to 10-year tendering is to reassure users about the audit committee’s ability to run that process. Schroders had a good try but was stumped when its first choice, KPMG, belatedly discovered it did not meet all the regulatory rules for independence. The difficulty lies in convincing shareholders that the audit committee is really seeking out an auditor that will mount a robust challenge to management when the client is the company being scrutinised. As the pivot between shareholders and management, the committee has to demonstrate that it is, above all, representing the former’s interests. ■ Jane Fuller is former financial editor of the Financial Times and codirector of the Centre for the Study of Financial Innovation think-tank



Sustainable recovery needs growth Jon Ihle celebrates some of the leaps forward that Ireland has seen in recent years – though he warns that, to be sustainable, further positive changes depend on growth For the first time since 2010, Ireland has entered the new year as an economically sovereign nation. The contrast between then and now could not be starker. Four years ago, Ireland was in economic turmoil. Growth had collapsed, unemployment was rapidly increasing and there was no end in sight to the losses piling up in the under capitalised banking sector. This year, it appears as if conditions are finally improving. To start with, Ireland is comfortably back in the capital markets and has built up a cash reserve in excess of E20bn.

Notwithstanding the government’s decision to do without a precautionary credit line from the bailout partners, the treasury’s liquidity position looks good. Investors seem to agree: Ireland’s bond yields have remained well below 4% for three quarters, even during periods of heightened volatility, such as when US Federal Reserve chairman Ben Bernanke hinted he would start tapering quantitative easing policies. Employment is beginning to bounce back, too, with the official rate hitting 12.5% to close out 2013. Corporate profits have been strong following years of tough balance sheet

restructuring. Meanwhile, the country has absorbed massive budgetary adjustments. Even the banks appear to be stable (although not yet profitable). Despite all these undoubtedly positive changes, though, massive challenges remain. The chief among them? Growth. This may not be a novel insight, but it is worth emphasising: without growth, Ireland’s recovery is unsustainable. The economy came out of recession for the third time last year, with GDP nudging just into positive territory. But growth of under 1% is hardly going to put a dent in the huge national debt. And households will continue to struggle without the kind of increases that lead to pay rises. Unfortunately, there are still a lot of risks about, both at home and abroad. Domestically, the banks have to pass the ECB’s stress tests this year. A positive result is not a foregone conclusion, as last month’s balance sheet assessments by our own Central Bank revealed. Irish lenders still have a massive stock of mortgage arrears and bad business debts to work through. Until that happens, credit will remain scarce and growth will be constrained. Within the eurozone, Ireland was actually a standout performer in 2013, but that says more about the currency zone’s continuing problems. If conditions deteriorate again, Ireland could find itself in difficulty through no fault of its own. The real bright spot for Ireland, though, is the improvement in both the country’s main trading partners: the US and the UK. Both economies exited 2013 on a strong improving trend. If history repeats itself, Britain and the US could once again be the engine of  Irish outperformance. ■ Jon Ihle is a financial journalist based in Dublin. Email




Focusing on the years ahead At ACCA’s International Assembly in London, the message was that the organisation is in good shape to meet the challenges of the future, says ACCA president Martin Turner I hope that the next 12 months see growth for your own organisations and for those which rely on your advice, support and services. I know that our membership has made a huge contribution to economic recovery in many parts of the world and I am sure that will continue and expand to other markets. The new year is a time to plan for the future – and that is exactly what ACCA has been engaged in. At the end of 2013, ACCA held its International Assembly (IA), when over 70 delegates from around the world travelled to London to discuss strategy beyond 2015, consider challenges and opportunities facing the profession and debate with ACCA’s Council the important role our profession plays in providing leadership. Assembly members, who come from members’ advisory committees or networks and represent their views, looked at future trends facing the profession and analysed ACCA’s current and future positions. It was clear from this that ACCA is in good shape, but that competition will get tougher. The IA also gave feedback on ACCA’s strategy to 2020, and looked at how ACCA will design and deliver the qualification in future, and the value of membership. The IA and Council also saw the presentation of honorary members to Ian Ball, former CEO of the International Federation of Accountants, for his contribution to the development of the global profession and for championing the improvement of financial management in the public sector, and to Professor Bob Eccles of Harvard Business School for his contribution to developing the thinking behind integrated reporting. Accepting his honour, Ian Ball said: ‘The way in which ACCA managed to pursue its objectives and be successful, while maintaining a commitment to public value, has enhanced your reputation around the world,’ while Professor Eccles said: ‘I am delighted to get this award from the one truly global professional accountancy body in the world. ACCA is a remarkable organisation, as it is truly global it has a great respect from the profession.’ That shows the regard ACCA is held in – and my Council colleagues and I remain committed to ensuring we maintain and enhance that hard-earned reputation, to support you in your career in 2014 and the years ahead. ■ Martin Turner FCCA is a management consultant in the UK health sector




The view from

THE BUSINESS HAS ADAPTED EXTREMELY WELL TO THE CHALLENGES PRESENTED BY THIS SECTOR AND CONTINUES TO EVOLVE TO THE CHANGING NEEDS OF OUR CLIENTS AND THE MARKET.’ CREVAN HIGGINS, FINANCIAL CONTROLLER AT CERTUS My role in Certus centres on the delivery of robust financial analysis and insight to the business through the full business cycle. It’s very much a ‘value add’ role in assessing new business opportunities, forecasting and planning, pricing for new business, reporting on business performance as well as identifying ways to enhance income opportunities. This is backed up by robust financial performance data, delivered through a combination of strong systems and a solid relationship with other business areas. As clients increasingly adapt to an outsourced environment, they expect more than a replacement of existing services in a more cost- or performance-efficient way. They look to us to proactively deliver added value to their business model. Those outsourcers that stand still and do not look beyond current practice will be passed by their competitors or, indeed, will lose clients who seek innovation and efficiencies as they drive their own businesses forward. As a three-year-old business, we are still relatively new to outsourcing; however, it’s fair to say that the business has adapted extremely well to the challenges presented by this sector, and continues to evolve to the changing needs of our clients and the market. For a number of our clients, this also is a relatively new world, and their needs and expectations, from us, continue to evolve as they better understand the possibilities they can derive through outsourcing.

Recently, we have begun to focus more on measuring the impact of what services we offer to existing or new customers. How we identify these opportunities and measure them is vital to any growing business and directly influences the shape of the future business. We are constantly seeking new opportunities and actively encourage innovation from within the business. A key challenge for 2014 will be the smooth integration of new contracts, while continuing to look for further opportunities to generate revenue streams from either existing clients or new business. As a finance unit, we continue to shift the focus of our planning, performance reporting and partnering to reflect the relative impact of the changes that this new business brings. The most important thing that I have learnt over the last few years is never to take anything for granted. Possibilities are endless, and only limited by either lack of imagination or the energy to both pursue and develop new ideas. It’s so important to enjoy what you do and maintain a hunger to add value to everything that you do… that’s what makes us succeed. When I’m not working, I like to spend time with my family who, it’s fair to say, do not see enough of me during the week. I generally start off the day with a 6.30am visit to the gym. I find my love of kickboxing great for unwinding. ■

SNAPSHOT: OUTSOURCING Ireland’s unemployment rate has dropped to 12.5%, according to the latest figures from the Central Statistics Office. It’s the lowest in three and a half years. Much of Ireland’s road to recovery from recession has been thanks to a shift towards service provision. The construction boom is long gone, and in the fields of pharmaceuticals and IT, giants such as Pfizer and Intel are still at large in Ireland. However, snapping at the heels of the pharmaceutical and IT industries are the services and outsourcing sectors. Many larger companies, including banks, have used outsourcing as a means of reducing overheads. Ireland, in turn, has built a reputation as a worldwide leader in providing quality services, which are the foundations of the outsourcing sector. As the outsourcing industry continues to evolve, Ireland must build on its current reputation as being one of the top five locations in the world for business services investments. Outsourcing delivers tangible and measurable results. If Ireland is to build a world-leading reputation as a hub for outsourcing, it must ensure its young, trained and educated workforce is a key part of this.




The ‘future is bright’ for outsourcing in Ireland Ireland was recently named as one of the top locations in the world for business services investments, writes Siobhan Farragher, Capita Asset Services

▲ FIRE AND WATER Fireworks on River Liffey



Each year, more and more organisations are outsourcing a growing range of activities to thirdparty service providers within the same jurisdiction. In Tholans 2013 Top 100 Outsourcing Destinations, Ireland was ranked ninth in the world, and was the highest-ranked European country. Since the industrial revolution, businesses have been challenged as to how they can exploit their competitive advantage to increase their markets and their profits. To this end, many large companies developed a strategy of focusing on their core business, identifying critical processes and deciding which could be outsourced. Traditionally, companies’ efforts to attain these advantages were confined to simply ‘offshoring’ elements of their business that could benefit from the significant labour cost savings such strategies achieved, by moving these elements to developing countries such as India. While the ceding of control of these processes may not automatically sit well with European corporate strategy, such offshore

outsourcing did enable them to develop an awareness of the greater potential of outsourcing to thirdparty service providers in the same jurisdiction. Business Process Outsourcing (BPO) proved to deliver results, for many companies. In BPO, an entire business function is provided by a third party – including process expertise, technology, operations and support. A flexible, committed outsourcing partner can transform and manage existing services and bring tangible and measurable service improvements. Outsourcing is an enabler to enhance service efficiency, quality and flexibility to increase customer satisfaction and loyalty – and all at an agreed cost.

Trends and future development The outsourcing industry continues to evolve, both globally and in Ireland, with continued growth in IT, financial services and business process outsourcing. A governmentsponsored marketing campaign touts the Irish labour force’s ability to work at all levels of the business process, from factory floor to executive suite. It highlights Ireland’s success at becoming a knowledgebased economy.


Capita Asset Services anticipates great growth opportunities in Ireland with a target focus in the following areas: Public-sector outsourcing: predicted as a key growth area due to increasing pressure on governments to control spiralling costs and inefficiencies. The July 2009 McCarthy Report on public-sector expenditure recommended outsourcing as one method of achieving these objectives, and its use was acknowledged in the Public Service Agreement 2010-2014. Financial services outsourcing: activity in this area has always been high in Ireland and, given the current economic pressures on the financial services sector and potential cost savings offered by outsourcing, it is set to continue. Market research indicates that many outsourcing decisions may have been put on hold in the more turbulent financial climate of 2008/09 and are likely to come on stream again from 2012 onwards. Multisourcing: as the outsourcing market increases in sophistication, it is becoming more common for Irish businesses to divide different aspects of a single process or activity between multiple providers to diversify risk, reduce costs and access best-of-­breed suppliers. ■




Siobhan Farragher is director of debt solutions, Capita Asset Services, Maynooth, Ireland




Improving efficiencies Microsoft’s award-winning outsourcing initiative with Accenture has cut its finance operating costs by over a third, thanks to a solid partnership between the two companies Six years ago, Microsoft partnered with Accenture to standardise processes for its finance, accounting and procurement functions globally, with the aim of improving efficiencies. From its genesis in Ireland, this award-winning business process outsourcing (BPO) initiative – called OneFinance – has become one of the biggest in the world, spanning 105 countries and has been lauded at home and abroad for its transformational approach to outsourcing. Accenture’s relationship with Microsoft in Ireland dates back 25 years and, today, employees are directly involved in Microsoft projects across its European Operations Centre

In taking the decision to outsource, Microsoft’s main aim was to create a world-class financial organisation. It felt a BPO model would be the best way of achieving this, allowing experts outside the organisation to handle functions that weren’t necessarily core to its operations. ‘We wanted to create a highperformance global financial organisation and, while cost savings were included in the business case, we were also focused on improving services, increasing compliance and, importantly, freeing up employees to focus on more strategic activities. We looked for a partner that could transform processes across our

▌▌▌IN DUBLIN, THE ENTIRE WORKFORCE EITHER HOLDS A PROFESSIONAL QUALIFICATION, SUCH AS ACCA, OR IS WORKING TOWARDS ONE in Dublin. Given the longevity of the relationship here, it’s probably not surprising that Ireland is the location from which one of the world’s largest BPO initiatives was developed. Back in 2006, Microsoft set out with an ambitious goal to standardise its finance, accounting and procurement functions globally, with aims to reduce costs and complexity, improve services and compliance, and focus internal roles on more strategic activities. To assist with this, Microsoft partnered with Accenture and, within the first 18 months, the partnership designed and implemented a global set of standardised processes across 92 countries, delivered a reduction of 35% in finance operating costs and cut the time and resources spent by Microsoft controllers on transactional activities and compliance from 75% to 23%. Today, the contract spans 105 countries with over 35 languages, and services more than 110 Microsoft subsidiaries from delivery centres located around the world.


operations and we felt Accenture had the best domain expertise as well as the global scale,’ says Alan Byrne, EMEA, Americas service delivery director.

One team Both parties claim that one of the main reasons for the project’s success is down to the partnership approach; the two companies operate by a mantra of ‘together’ and actually coined the project OneFinance to reflect their commitment in this regard. ‘We are married,’ says Byrne. ‘We have to work together because together we own the delivery and together we own any problems. I think the concept of together drives a lot of the success we have.’ Microsoft and Accenture set up a mirrored governance structure, meaning that everyone has a counterpart in the other organisation. The mirrored structure facilitates effective communication and conflict

resolution at the lowest possible level. The organisation structure is divided along two main focus areas. The team that ‘manages for today’ is focused on the daily delivery of the service, while the team that ‘manages for tomorrow’ drives change for the future.

Career of choice Another major reason for the success of OneFinance is the commitment to attracting, retaining and motivating talent. One manifestation of this commitment is training and development, something that Accenture’s Dublin team is particularly proud of. ‘We promote and support a culture of learning and study; be that formal education or practical experience. As such we strongly commit to developing our team through the provision of time and financial subsidy to pursue professional exams, supporting them in gaining qualifications and career development and opening up new opportunities across the company,’ says Andrew Cheung, OneFinance managing director, Accenture. In Dublin, the entire workforce either holds a professional qualification, such as ACCA, or is in the process of gaining one. Accenture is also very supportive of graduate employment, offering young people the chance to build their career from scratch, working alongside experienced accountants as well as receiving sponsored education. What’s more, employees – and ultimately Microsoft – benefit from the fact that Accenture’s BPO operation sits alongside the company’s global shared service centre in Dublin, giving them the opportunity to gain experience and expertise in both operations. ‘There’s no doubt that our success is down to our people. Both graduates and experienced hires have been attracted to pursue a career path with us because they get a window to the world from a desk in Dublin,’ adds Cheung.




Taoiseach Enda Kenny, Microsoft founder Bill Gates and minister for foreign affairs Eamon Gilmore during Ireland’s presidency of the EU

At a practical level, the OneFinance staff engagement strategy seeks to get the best out of employees. For example, a scheme called ‘we@Accenture’ rewards people for contributing ideas which result in process improvements or cost savings and there are also People Advocate Leads who champion people-focused programmes

to improve engagement across the workforce.

Transformational change Ongoing innovation is built into the project through an annual transformation programme and both companies have significantly invested in people and technology to make its processes leading edge.

Microsoft Dynamics is used across the board, but other software has been introduced specifically for OneFinance. For example, a controllers’ portal was developed in order to to provide insight into the financial processes operated by OneFinance. A governance workspace provides a dashboard into BPO service delivery and Microsoft governance.






Dublin’s annual Web Summit highlights the city’s role as a technology hub

Microsoft’s ability to deploy new processes is greatly enhanced through the outsourcing model and the project acts as a showcase for Microsoft technologies. The OneFinance ‘utility’ has allowed Microsoft to assimilate new business/functions in the model. For example, when Microsoft acquired Skype in 2011, the company’s central processing allowed for a seamless integration of the other business, which wouldn’t have been possible otherwise.

Bigger picture Every year, Accenture and Microsoft agree the objectives of the BPO contract in the form of annual commitments or service level agreements (SLA). But they are also focused on the bigger picture, and not long after the original contract was signed, they realised the need to be more forward looking and jointly instigated a three-year vision to define the longer-term goals. According to Accenture research, excellence in service level delivery is


one of the characteristics of highperforming BPO relationships; however, in longer-term arrangements, such as OneFinance, the provider seeks to go beyond ‘sea of green’ performance reports, to drive the right behaviours that matter most to the business. ‘Accenture has a responsibility to deliver on its contractual obligations in terms of SLAs, but we also put emphasis on making sure we drive the right end-to-end results. Microsoft cares more about Accenture resolving its service requests and issues than say, responding to an email in a given time period, so we are constantly reexamining our SLA,’ says Cheung. Beyond SLAs, there are several other mechanisms in place which define the success of OneFinance. For example, customer satisfaction is measured through an annual financial controller and procurement community survey and in FY13, Accenture scored an 86% satisfaction rate. There is also a continuous transformation programme, focussed on driving process improvements and step changes to the service operations.

To date, over 700 ideas have been logged by Accenture personnel. Over and above delivery, the governance model is considered second to none. ‘Governance is the key. It doesn’t matter how good you are in delivery; if you don’t have good governance then your delivery will die out in a short time frame,’ says Byrne. Both parties claim to have benefitted hugely from the OneFinance relationship and to date, the project has won 12 awards. Only this November, it was named Outsourcing Partnership of the Year at the Irish Contact Centre Service and Shared Services Awards 2013. What’s more it is heralded far and wide as a best-in-class example of onshore BPO. ‘The OneFinance BPO arrangement with Accenture is truly different and sets the tone in Accenture and Microsoft. OneFinance is an excellent example of what a successful BPO operation looks like and is often one held up by other organisations as an example of what they should aspire to, so we are very proud of its success,’ says Byrne. ■

25 11




Outsourcing for SMEs The decision to entrust an external body with key business processes is not one any organisation takes lightly. Stewart Dunne of BDO Ireland looks at what to consider Experience shows that, when effectively implemented, outsourcing can deliver major benefits, from reducing costs and improving quality control and compliance, to creating the environment for a host of service delivery innovations. Over the last decade, outsourcing in Ireland has evolved into a sophisticated and dynamic business sector with global reach and reputation. Today, a hugely diverse range of companies, both indigenous and international, delegate key back-office functions to trusted partners in Ireland, allowing them to focus their resources on core business activities. Indeed, engaging with an effective outsourcing partner has proven to be a critical component in the successful upscaling and expansion of many world-renowned companies in recent years. Companies outsource for a variety of reasons – and outsource a variety of functions. The most successful understand that outsourcing can only be part of an effective growth strategy when it involves a service provider for whom a culture of operational excellence, flexibility, accountability and innovation are second nature – in other words, an outsourcing partner as passionate about growing their business as they are. There are three vital issues to address for any small and mediumsized enterprises (SMEs) considering the outsource route: what and how many services to outsource, what to look for in a provider and, crucially, what benefits outsourcing brings.

Potential benefits

1 Cost savings The most obvious benefit that outsourcing can offer is demonstrable cost savings. This is achieved through scalability and flexibility; standardisation; and transparent pricing models. The outsourcing service you choose should be tailored to provide you with access to the knowledge, expertise and capacity you need, when you need it.


2 Focus on the core business Outsourcing resource-intensive backoffice functions can allow you to free up time for your core business, and focus on growing your business in new and existing markets. 3 Access to knowledge and expertise Effective outsourcing is not just a process but should be viewed as a relationship – one that should provide you with access to evolving industry knowledge, best practice and new ideas. A genuine outsourcing partnership will facilitate a continuous stream of improvement that will, costeffectively and measurably, outperform any internal back-office function. 4 Improved compliance and budgetary control Outsourcing can provide greater control over your costs and transparency in processes and compliance issues.

Clearly, there can be many benefits to choosing the outsourcing route; however, there are many service providers. What are the key questions an SME should ask when considering one provider over another?

Key considerations

whether they understand * Ask your business and, ideally, have a proven track record and specific sector expertise. Get assurance that their services, processes, controls and resources meet the highest standards of quality that can be easily corroborated by appropriate certification and client references. Know that effective outsourcing is a ‘partnership’ that involves building relationships akin to those that you would find in a highly efficient and



▌▌▌THE MOST OBVIOUS BENEFIT THAT OUTSOURCING CAN OFFER IS DEMONSTRABLE COST SAVINGS 5 Risk mitigation Outsourcing allows you to share an element of the risk with your outsourcing partner, rather than take all the risk alone. 6 Continuity and scalability You have greater security in your business continuity and the ability to scale up in tandem with your business growth. You can tailor your outsourcing to meet your specific needs, evolving over time to agreed key performance indicators and servicelevel agreements. 7 Access to supplier network Outsourcing with the right partner can put you in the company of many world-class businesses. A business-focused outsourcing partner will support strategic introductions that may evolve into new business relationships.

productive team/department within any successful organisation. Is this their mentality, too? Ensure there is a ‘smart’ plan for the transition of the in-house processes to the outsource provider. Choose a partner that invests heavily in their people, processes and IT platforms. Use initial discussions to identify how the outsource provider can add value to your business and agree a framework for how improvements identified can be implemented. Understand the cost savings and synergies that can be gained by employing a single multiservice outsource provider for services such as accounting, payroll, tax and VAT compliance, financial reporting, and company secretarial etc.

* *





with an outsource provider * Engage that can scale the services they provide to you as you grow. Now you have considered the potential benefits and evaluated the criteria by which you will assess potential providers, the final key question is how much (or how little) to outsource.

Outsource options

Payroll Companies generally operate payroll as a standalone process and it can therefore be easily transferred to an outsource provider. Third-party providers will keep up to date with the often numerous changes in legislation, and the costs of staff training and systems maintenance will be borne by the provider. This is generally a cost-effective solution as it’s based on a cost per transaction. Also, it’s easily scalable as your company grows. Accounting/bookkeeping It’s often difficult to employ resources in-house that exactly match your requirements and can be labour intensive and expensive with downtime during low-activity periods. It often involves high staff training costs, both ongoing and when introducing new systems. Outsourcing provides access to a pool of skills not necessarily available in-house. The outsource provider’s experience of dealing with other clients in similar businesses can also be a benefit for best practice around processes/procedures/controls. Financial reporting Using an outsource provider will free up management time used in the preparation of routine reports and instead give more time for review and interpretation of management information and any actions required. An independent external provider that improves the quality of management reporting should provide enhanced assurance to stakeholders. It can assist in developing a more streamlined approach that will enable more timely reporting, while you can

benefit from use of the most up-todate reporting tools and models. Tax and VAT compliance The outsourcing of tax and VAT compliance replaces the requirement to have specialist compliance staff available in-house. The onus for preparing and filing of returns lies with the outsource provider, which can often heighten this priority and avoid unnecessary costs such as fines/ penalties and interest on late payment. Engaging an outsource provider with VAT/tax expertise can bring significant cost savings to a company looking to grow their business, eg international

tax/VAT compliance (domestic, European Union and outside EU); transfer pricing; research and development tax credits etc. This has obvious advantages when companies are looking to manage their compliance obligations for VAT and other taxes across multi-jurisdictions when doing business outside Ireland. ■ Stewart Dunne is partner and head of outsourcing, BDO Ireland. BDO is a leading provider of high-value outsourcing services to both Irish SMEs and some of the world’s leading companies




Service delivery in the public sector An increasing number of public services are being delivered externally, a trend that is set to increase thanks to the Public Service Reform Plan, as Kevin Daly explains The Public Service Reform Plan contains a number of actions to drive alternative models of service delivery, including outsourcing, across the public service. These actions are increasing efficiency, improving customer service, promoting innovation and allowing public servants to focus on delivering core activities. Although the level of outsourcing of public services is not as high as some other OECD countries, there are already a significant number of public services being delivered by the private and voluntary sectors, with more under way. The current programme for government contains commitments to identify and eliminate non-priority


The DSP plans to use outsourced providers of employment services to deliver the new Jobpath programme to assist the long-term unemployed


programmes and outsource, where appropriate, non-critical functions. It also makes a commitment that the government will open up the delivery of public services to a range of providers. In June 2012, an external service delivery unit was established within the reform and delivery office in the Department of Public Expenditure and Reform to lead on outsourcing initiatives across the public service. In 2012, the government also decided that all new services must first be tested for external delivery before any approval to deliver the service internally will be granted. The term ‘external service delivery’ covers a number of different sourcing models where external assistance

is used to help deliver a service. These models include insourcing, cosourcing and outsourcing. These models range from basic managed services, through parallel private sector delivery through to full outsourcing of services to third parties. These can include not only private enterprises and voluntary organisations but also less common structures such as mutuals, social enterprises and joint ventures. In all cases government is still accountable for the delivery of the service as the contracting authority. The Public Service Reform Plan contains commitments to strengthen commercial capability across government and consider alternative sourcing models.


External service delivery decisions within the public service are not based on any ideologies vis-à-vis the merits of the private sector versus the public service or vice versa. Instead, a pragmatic, evidence-based approach is being taken to these decisions. The public service acknowledges the risks involved with outsourcing and our approach is to manage these risks rather than avoid them. There is also growing acceptance of the potential benefits, including: cost and efficiency savings arising from better work and management practices and from enhanced performance measurement; greater potential for innovation in business practices through access to a wider set of skills, knowledge and technologies; improved services by having specialist suppliers focus on a function which may be non-core for the public service; and the external delivery of peripheral services also provides an opportunity for greater focus of scarce resources on core activities. Prior to the Public Service Reform Plan being published in 2011, a wide range of government services were already being delivered in partnership with private sector providers. Notable examples include eFlow, the National Roads Authority’s toll operation on the M50 motorway; the Bovine Traceability System used by the Department of Agriculture, Food and the Marine; and the HSE outsourcing of some facilities management (including portering, catering, security, cleaning and linen) services. Although much of the focus is on central government and its agencies, outsourcing has been used extensively in local government. The sector has already seen significant change, has lost large numbers of staff and has been forced to do things differently. High-profile outsourcing initiatives have included projects such as the municipal waste collection in Dublin City Council area. Other outsourced activities in the local government sector include facilities, accommodation, security and cleaning; environmental protection (testing, inspections, enforcement etc); household charge; and maintenance (including vehicles, public lighting and traffic lights). The

* * * *

experience with these initiatives shows that partnership with the private sector can deliver positive outcomes for all participants, including the state and the general public. Non-commercial state bodies, such as National Roads Authority, National Transport Authority, the Personal Injuries Assessment Board, the Railway Procurement Agency and the National Development Finance Agency are also recognised as being particularly strong in outsourcing and contract management. For example, the NTA has a core of around 80 staff and manages approximately 30 outsourced contracts. In recent years, An Bord Pleanála, Environmental Protection Agency, the Housing Finance Agency, the Private Residential Tenancies Board, the Companies Registration Office, Health Information and Quality Authority, the Food Safety Authority of Ireland, the Road Safety Authority, the National Standards Authority of


of long-term unemployed people. Central Statistics Office (CSO) – quarterly national household survey call centre. The CSO is currently examining the option of engaging an outsourced call centre to conduct telephone interviews as part of the quarterly national household survey. Health and Safety Authority (HSA) – finance function. The HSA is currently concluding a competitive dialogue process to outsource its entire finance function to a thirdparty provider. The Department of Social Protection (DSP) – contracting medical services. The DSP is contracting providers of medical services to supplement DSP’s existing medical review and assessment service capacity. Multiple bodies – debt management. There are currently a wide variety of public service bodies collecting receipts (such as fees, charges,





▌▌▌THE SECTOR HAS SEEN SIGNIFICANT CHANGE, HAS LOST LARGE NUMBERS OF STAFF AND HAS BEEN FORCED TO DO THINGS DIFFERENTLY Ireland, the National Consumer Agency, Failte Ireland and CORU have all implemented significant outsourcing initiatives. In central government, Revenue successfully outsourced the Local Property Tax call centre in 2013 within a very challenging timeframe. Several public service bodies are currently in the midst of outsourcing projects. A brief sample includes: The Department of Social Protection (DSP) – labour market activation (Jobpath). DSP will use a new form of service delivery when it rolls out Jobpath, a new approach to assisting the long-term unemployed to find work. The department will contract private/third-party providers of employment services to complement DSP’s existing public employment service and community-based local employment services. This will provide new and additional support to target longterm unemployment. Jobpath will operate on a payment-by-results basis, thus incentivising providers to find work for the maximum number


rents, fines and overpayments) from various organisations and individuals. In most cases, each individual body carries out these collection functions, including pursuing arrears and bad debts, inhouse. The processes surrounding the recovery of monies, which have not been paid by their due date, have been reviewed and several bodies are now considering which elements of this function can be outsourced to the private sector. While a large number of functions have been outsourced by the public service over the past decade, particularly in the non-commercial agencies and in local government, there is room for more to be done. A key strategy over the coming years will be to use skills in the wider public service to help the civil service to deliver more successful outsourcing projects. ■ Kevin Daly is responsible for outsourcing priorities with the Department of Public Expenditure and Reform




BPO – opportunities for growth The Irish business process outsourcing sector has seen a boom in the past five years, but there is room for further expansion, writes Leo McAdams The number of people employed by the business process outsourcing (BPO) sector in Ireland has grown by 70% in the last five years. Approximately half of these people work for Irish-owned businesses. Nevertheless, the number employed in outsourcing activities in Ireland is lower than would be expected from comparisons with the UK or the US, and there is significant scope for mor growth, both from export markets and key sectors such as the public sector, financial services and the base of multinationals in Ireland. Lower growth in the Irish market during the economic slowdown post2008 created an imperative for Irish BPO companies to develop sales in export markets. Companies such as OSG and SouthWestern have been successful in selling added value solutions into the UK to customers in sectors such as insurance and the public sector. Eishtec in Waterford, set up out of the ashes of the TalkTalk closure, is a leading supplier to the UK’s largest mobile telecoms company, EE. Success in the UK market is evidence of Irish suppliers having a strong competitive advantage as the UK has a large base of suppliers in Scotland and Northern Ireland, and a lower cost base. Multilingual technology and financial services support is a key strength for Irish BPO firms. Dublin and Cork’s attraction as a location to work for young European graduates has enabled companies such as Voxpro in Cork and CPL’s outsourcing division, Interaction, to win business with multinationals in Europe and the US, and to support Europe-wide product and service roll-outs. Rigney Dolphin in Waterford is building a strong reputation in the US healthcare sector


and has established partnerships with leading US healthcare providers such as the Cleveland Clinic. US companies indicate that it is the Irish companies’ ability to combine bestin-class operations and customer care with a highly entrepreneurial and customer-focused management approach that singles them out from larger, Tier 1 competitors. In the Irish market, companies are winning new business from the public sector by building platform-based solutions that incorporate a high level of process innovation. Abtran in Cork has grown strongly on the back of a series of contract wins with organisations such as Irish Water and the RSA. Fexco in Kerry, best known for its payment businesses, is also a significant supplier of outsourced services to a range of sectors, including utilities. Maintaining competitiveness in the face of low-cost rivals in Eastern Europe and Asia is a constant

challenge for all BPO companies, although the flow of work to Asia, at least in customer-facing services, seems to be partially reversing as companies review the customer service implications of a focus on cost alone. As well as a shift to highervalue services, Enterprise Ireland (EI) has noticed an increased uptake by the sector in its support for lean transformation projects. This, and the development of blended cost models with investment outside Ireland, will help accelerate Irish companies’ export growth. BPO customers are increasingly sophisticated users of data generated from their own operations and external data gathering exercises. According to Donald Black, BPO senior development adviser, EI: ‘There is a significant opportunity for Irish BPOs to develop competitive advantage in this area and EI is currently reviewing how it can support the industry to accelerate the development of its analytics capability.’ A major development in 2013 has been the establishment of an industry cluster. A dozen companies have developed plans to raise awareness of the capabilities of the Irish BPO sector and identify new opportunities in Northern Europe (including the UK) and the US. EI is working with the cluster to ensure that its offices in these markets are aligned to maximise support for this activity. EI’s ambition for the sector is that, by 2017, Ireland will be recognised internationally as the best location in Europe from which to source addedvalue outsourced services in a number of key service areas. ■ Leo McAdams, manager, BPO and financial services department, Enterprise Ireland



Realising effective outsourcing Outsourcing can provide greater organisation efficiency at lower costs, with many companies outsourcing human resources and accounting, writes Brian Harrison An enduring strength of the Irish economy over recent decades has been that of foreign direct investment. Today, Ireland is home to more than 700 US companies, which account for over 26.5% of Ireland’s GDP. The impact of these companies is well understood, and the fact that they employ more than 115,000 people directly is a huge benefit to Ireland. There are, however, many further benefits to Ireland from hosting world-class companies from industries too, such as ICT, online media, financial services and life sciences. In addition to the direct employment, US companies support many tens of thousands of jobs in a range of support industries, with many companies using outsourcing services to support their business. This trend has emerged in recent years as global companies have adapted their business models to focus solely on doing what they do best. This is the same for Irish subsidiaries of US companies as it is for any other large company. Be they a pharmaceutical company or large software firm, the opportunity is the same: outsourcing can provide greater organisation efficiency at lower costs. Among many areas outsourced by US companies here are human resources, legal services and accounting. The American Chamber of Commerce Ireland is the representative body for


Ireland’s taoiseach Enda Kenny speaks to the Irish Business Organisation in New York

these companies and so supporting members to realise effective outsourcing models is among its priorities. To facilitate cross-sector networking, the American Chamber has an established business process outsourcing forum comprising representatives of its member companies. The forum provides an in-camera opportunity to exchange views and discuss challenges with peers within US multinationals in Ireland. The chamber’s group has dealt

with matters such as business partner relationships and metrics. One constant focus is managing quality control and compliance with outsourced suppliers. The group continues to engage with many other outsourcing-related topics such as benchmarks, structure and governance and transactional, FTE, hybrid models. ■ Brian Harrison, American Chamber of Commerce


How do you turn data from a billion trades into a buying opportunity?

With next-generation infrastructure and services, Dell, together with Intel, is helping the world’s leading financial institutions securely manage hundreds of billions of pounds’ worth of transactions, every day. To see how we can help solve your most important business challenges, visit or call 0844 444 3580 Call lines open Monday to Friday 8am to 8pm and Saturdays 9am to 6pm.

Dell Products, Registered in Ireland. Reg. No. 191034 c/o P.O. Box 69, Bracknell, Berkshire RG12 1RD. Intel and the Intel logo are trademarks of Intel Corporation in the U.S. and/or other countries. ©2013 Dell Inc. All rights reserved.



Edging towards better accounting Most governments are still using cash-based accounting, but more are adopting accruals to improve accountability and decision-making, says PwC partner Patrice Schumesch The financial crisis and sovereign debt crisis have created a direct challenge for governments to improve management of resources and report high-quality information to their stakeholders, such as citizens and parliament, investors in government bonds and financial markets. While sound and transparent public accounting does not in itself lead to high-quality public finance management, it is a necessary component. Better accounting leads to better reporting, which provides the information necessary for better decision-making, which in turn should lead to better use of resources. Public sector entities and their stakeholders need to understand the full and long-term impacts of their decisions on financial performance, financial position and cashflows. PwC’s global survey of government accounting practices, Towards a new era in government accounting and reporting, shows that only one in four central governments surveyed apply accrual accounting in preparing their financial statements. Most use cash-based accounting practices, which fail to capture information on public sector assets and liabilities, and present a very short-term view of public finances. However, the landscape is evolving. Of the 100 countries surveyed, 37 intend to adopt accrual accounting over the next five years. The trend is particularly pronounced for developing countries, primarily in Africa, Asia, and Latin America. International and supranational organisations such as the IMF and World Bank contribute to the adoption of accrual accounting and International Public Sector Accounting Standards (IPSAS) by laying down reporting requirements for their members or funding recipients. In Europe, there is a clear political consensus on the need to apply harmonised accrual accounting standards to improve the quality of statistical data, which is used in the

PUBLIC SECTOR CONFERENCE Patrice Schumesch was among leading figures speaking at ACCA’s International Public Sector Conference, which was held on 5 December and which you can watch online. The conference explored the direction of public sector reporting, and rebuilding public trust through improved financial reporting. Other speakers included Carla Moody of Monitor UK, Zinga Venner of the World Bank, and Professor Michael Parker of Henley Business School. Watch it at www.accaglobal. com/ab37

context of the budget surveillance mechanism and fiscal monitoring and policy decision-making. The European Commission has embarked on a project to implement EPSAS (European Public Sector Accounting Standards), with IPSAS as an indisputable reference and based on a strong EU governance system. Moving to an internationally recognised accruals-based accounting framework requires a clear vision and strong political commitment to strengthen public institutions, develop high-quality standards and practices, enhance skills and build capacity. The conversion to accrual accounting principles based on IPSAS or similar standards represents a multi-year transformation project that extends well beyond the finance function. Our survey identifies training and adapting information systems and processes as the biggest challenges. The governments surveyed also indicate a desire to improve their finance function, reporting the following key areas for improvement: fixed asset management, cost

accounting, performance management, and long-term planning and forecasting. The full benefits of accrual accounting can be captured as part of a wider finance reform. By introducing high-quality accrual requirements, governments demonstrate their desire for greater transparency and accountability, and also better information for decisionmaking. This is essential to the democratic accountability process and to ensure the long-term sustainability of public finances. ■ Patrice Schumesch is PwC global public finance and accounting partner and chair of PwC’s global IPSAS technical working group FOR MORE INFORMATION:

Towards a new era in government accounting and reporting is at IPSAS in a nutshell, from principles to practice is at



Unlike some, ACCA accountants are properly grounded in all areas of business and finance including reporting, taxation and audit. This ensures truly forward looking ‘business ready’ finance professionals who can help grow your business.

Find out more at The global body for professional accountants




Economies around the world are adopting a range of policies as they strive to strike a balance between raising revenues and encouraging growth, according to the Paying Taxes 2014 report by the World Bank Group and PwC. The graphic at the top of this page lists the 14 countries of the 189 covered with the lowest rates of business tax; most have kept the same ranking as last year, although Oman and the UK both moved up two places.































Labour taxes Profit taxes Other taxes

Labour taxes Corporate income tax Consumption taxes

Labour taxes Profit taxes Other taxes





spends 268 hours on tax

The Central Asia and Eastern Europe region has been the biggest reformer over the nine years of the study, recording the biggest fall in time to pay (down to 220 hours) and number of payments (25.1), and the second biggest drop in total tax rate (down to 39.5%).





9.2% Middle East

Profit taxes





Labour taxes Other taxes

Asia Pacific 8.8%




Central Asia and Eastern Europe




12.9% EU and EFTA




19.5% North America

pays a total tax rate of 43.1%

and makes 26.7 tax payments

Since the study first began nine years ago corporate income taxes have consistently fallen. Consumption taxes now account for most tax compliance time (38%) and tax payments (39%), although labour taxes are the largest element of the tax cost, accounting for 38% of the total tax rate.








22.8% Central America and Caribbean




16.1% World average






16.4% South America


18.2% Africa


Paying Taxes 2014: The global picture compares tax systems in 189 economies. It covers the period between 2004 and 2012 (from boom through slump to slow recovery) and can be viewed at




BURSTING THE CARBON BUBBLE Fossil fuel companies should start accounting for the risk that their vast reserves may ultimately end up as stranded assets, says ACCA’s Rachel Jackson


here is growing attention focused on the threat posed to future economic stability by the risk of carbon assets being ‘stranded’ by the imposition of carbon budgets designed to limit climate change. Assessment of such risks is likely to become an increasingly important element of investors’ capital allocation decisions. The Generation Foundation, which is dedicated to supporting sustainable capitalism, makes a strong case for investor action in its October 2013 white paper, Stranded Carbon Assets: Why and How Carbon Risks Should be Incorporated in Investment Analysis. It warns that failure to account properly for the risk inherent in carbon-intensive assets will cause the ‘carbon bubble’ to grow until the artificially high valuation levels can no longer be sustained. It encourages investors to take steps such as engaging company boards on their plans for mitigating and disclosing carbon risks, and divesting fossil fuel-intensive assets in order to reduce or eliminate carbon-related risks. The need for investors to become more ‘climate-literate’ is also highlighted in a recent report by ACCA and Carbon Tracker, Carbon avoidance? Accounting for the emissions hidden in reserves. It finds that extraction sector companies typically do not disclose material information on carbon risk despite the multiple standards and regulations covering financial statements, industry reserves reporting, listings rules and greenhouse gas (GHG) emissions reporting. Existing reporting frameworks therefore need to be enhanced and aligned to require companies to provide the information and commentary that investors need.

A review of the financial statements of companies in the extraction sector shows how substantially their current disclosures vary in terms of the quality and quantity of information they provide on GHG emissions and climate change. Some are experimenting with integrated reporting and beginning to link current and future company performance with sustainability issues, but the implications for the reporting and valuing of reserves are not being pursued. Current strategies laid out in annual reports talk of growth that is incompatible with emissions limits and there often seems to be a lack of balance in the consideration of future corporate viability. Even companies that claim to support action on global warming do not always articulate how their business model is adapting to the changes required in the energy sector.

Accounting action required Reserves accounting is a key area needing improvement. Although fossil fuel reserves are often recognised in financial accounts, this is typically on the basis of associated costs rather than current value. The approach assumes the future will repeat the past, not allowing for declining demand for fossil fuel products. Impairment tests are applied in the attempt to identify where the expected value of an asset may not be realised, with ‘reasonable assumptions’




being applied. However, the expectation that demand for energy-intensive energy sources will be sustained appears increasingly unreasonable. The assumption of impairment therefore needs to include prudent analysis of factors such as national and global policies to limit climate change, and trends in technology that support environmentally friendly energy generation. Financial reporting standard setters could take action to address these weaknesses. The International Accounting Standards Board (IASB) could, for example, issue guidance to interpret existing standards so that preparers of reports and accounts consider the need to include information on the carbon viability of reserves. They could also investigate how the use of fair value accounting could reflect the potential impact of carbon-constrained markets on the value placed on reserves.

Multi-pronged effort


TAKE THE CARBON LEAD ‘The accountancy profession can and should take the lead in ensuring the carbon in reserves can be assessed and reported on. Accounting rules and treatments should be reviewed to support greater transparency and understanding of asset values. ‘One approach is to state coal or oil reserves at current values. This can help companies and investors to respond better to climate change uncertainty. Integrated reporting should complement accounting standards by providing companies with a structure to highlight relevant and forward-looking information, particularly on climate risk.’

Achieving the necessary change isn’t the sole responsibility of financial reporting standard setters. The potential also exists to strengthen oil, gas and mining industry standards, Warren Allen is president of the International under which reserves are primarily assessed on geological Federation of Accountants (IFAC) and economic viability. Other factors such as environmental considerations may also be taken into account, but the key issue of emissions limits affecting the market for products within industry, particularly accountancy professionals, are is not explicitly included as yet. encouraged to work in tandem with all the standard setters There are weaknesses in the carbon reporting and other key parties shaping the reporting frameworks that requirements of stock market regulators and listing support financial markets. An integrated effort is required authorities. They could require disclosure in annual reports to ensure that reporting requirements – whether financial, and prospectuses of the emissions potential of reserves, listings-based, industry-linked or GHG-focused – fully meet and the assumptions made about future emissions in market needs. The ultimate aim must be to provide investors determining corporate strategy. with information to help them assess carbon risks before There is scope to improve GHG reporting standards, determining capital allocations. ■ too. GHG metrics, for example, need to deal with material, forward-looking issues around the stocks of carbon being Rachel Jackson is ACCA head of sustainability built up, as well as the annual flows of GHG emissions from industrial activity. The continued development of integrated reporting could also improve the linkage between carbon risk, business strategy and corporate performance. Companies must play their part in meeting investors’ carbon-risk information needs, not just focusing on achieving basic compliance with standards and reporting requirements, but going beyond the minimum through understanding investor needs. For example, information that shows reserves and resources converted into potential carbon dioxide emissions would help investors understand future risks. So would sensitivity analysis of reserves levels in different price or demand scenarios. Investors would also benefit from companies providing clear discussion of the implications of such data when explaining their capital FOR MORE INFORMATION: expenditure strategy and the risks to the Carbon avoidance? Accounting for the emissions hidden in reserves is at business model. Senior executives The Stranded Carbon Assets white paper is at




THE FILTER KINGS Finance professionals are the ones with the skills to analyse vast datasets and distil information, thus providing a critical new business service, says Ng Boon Yew


ize matters. The amount of data the world produces is growing so fast that we will soon run out of words to quantify it. Each day our photographs, personal location records, phone signals, online searches, social data, video clips and other digital output expand the total by an estimated 2.5 quintillion bytes. And as the technology needed to collate, manage and analyse all of this becomes increasingly accessible and affordable, big data is starting to transform the business landscape. A new ACCA and IMA (Institute of Management Accountants) report, Big data: its power and perils, which draws on input from ACCA’s Accountancy Futures Academy, demonstrates how it’s also starting to transform the finance profession. While the new technology can commoditise some traditional aspects of the profession, it also provides an opportunity for finance professionals to move upstream to a more strategic, decision-making role within businesses. The earliest exploiters of big data were some of the world’s largest and most innovative technology companies. Big data is behind Amazon’s targeted product recommendations and Google Mail’s ability to progressively reduce the amount of spam that finds its way into your inbox. Now venture capital is flying in the direction of tech start-ups that are creating tools to help big and small organisations in all sectors to explore and exploit the possibilities.

Searching for patterns Innovative organisations and individuals are already using big data to unlock value from vast data sets, to innovate in business models, products and services, to support, automate and improve decision-making, to boost operating margins, to identify and reduce risks, and to gain competitive advantage. Analytics for big data is also being built into the software that accountants are used to having at their fingertips, such as accounting and finance systems and business intelligence tools. So the next phase of exploitation seems likely to take big data into the mainstream, as businesses seek ways to use this new resource both tactically and strategically. But getting this right will be as much about people as it is about bits and bytes, because exploiting big data will demand individuals with data mining and interpretation skills, who know which questions to ask to gain insight and appreciate that high-quality data is as important as access to vast amounts of it.


WHAT IS BIG DATA? The vast amounts of structured and unstructured data that we now refer to as ‘big data’ are being heaped up by the shift to digital, converging trends such as cloud computing and social technologies, widespread mobile device adoption, and the increase in internet-connected systems and devices. Big data already comprises a massive amount of contextual relationship, information and raw data. As more physical objects connect to the internet (to create what is often called the internet of things or the internet of everything), so their ‘exhaust data’ will increase the amount by unimaginable proportions. Big data is not just about data. It has three main characteristics: the data itself, the analysis of that data, and the presentation of the results of the analytics – plus the associated products and services. Market intelligence firm IDC defines big data as: ‘A new generation of technologies and architectures, designed to economically extract value from very large volumes of a wide variety of data by enabling highvelocity capture, discovery and/or analysis.’ Because big data is part of a more fundamental technology-driven shift in business trends and practices, the term probably has a limited shelf life and will fall out of use, as our understanding of it evolves and it is supplanted by new words for more specific technology-driven processes and applications.

Big data shrinkers Accountants could play a valuable role here. The structural and analytical skills commonplace in accounting can be used to great effect on big data. Finance professionals are well placed to distil vast amounts of information into actionable insights, and make big data smaller. Members of the profession wanting to reposition themselves to take advantage of the big data bonanza will need to embrace change. The report from the Accountancy Futures Academy predicts that the most successful will be those who differentiate themselves by adding new skills, developing new ways of thinking and forming new collaborations and partnerships.



New skills To differentiate themselves and turn big data to their advantage, accountants and finance professionals will need to: develop new methods and services for valuing data – and extend their role in compliance and internal control to encompass the ethical and effective stewardship of data assets use big data to offer more specialised decision-making support – often in real time – and decide when data can most usefully be shared with internal and external stakeholders or monetised as new products use big data tools to identify risks in real time, improve forensic accounting and evaluate the risks and rewards of long-term investment in new products and markets. The accountant’s role will be increasingly important, as more companies look for ways of developing new products and services from data they generate and own, particularly given growing concerns about privacy and ethical data usage. Accountants are already responsible for integrity in reports and accounts and ACCA members are bound by a code of ethics, so their role in stewardship and quality control may grow. As the scale of collection, storage and trading of sensitive data ramps up, individuals, organisations and entire countries are recognising the dangers and risks of data misuse. Accountants may need to step up and act as custodians of large non-financial datasets and ensure that the information in them is robust and reliable, as well as valuable and marketable.


* *

Preparing for the downside Despite big data’s potential for creating a bright sunny future for finance professionals, there are thunderclouds on the horizon. Some once valued skills will become commoditised, as has already happened in other professions, while skills that were previously misunderstood or overlooked could become more valued.

FINANCE’S NEW ROLE? Ian Betts, data manager upstream and projects and technology at Shell, says: ‘Shell is moving towards managing information and data in an ever more integrated way. This requires control and assurance skills that sit naturally with the finance function. ‘A key part of our role is to explain the value of good-quality data for all of our business processes. We work on the basis that correcting a data error costs about 10 times as much as getting it right first time. Our vision is for the finance function to provide efficient and effective data quality assurance that unlocks business value at appropriate cost.’

One software developer is already using aggregated data from business and finance transactions and processes to find trends and benchmarks that it can use to create new services for accountants and businesses. The profession will need to follow suit.

Ng Boon Yew FCCA is chair of ACCA’s Accountancy Futures Academy and chairman of Raffles Campus, Singapore FOR MORE INFORMATION:

The Big data: its power and perils report is available at





They’re the next big thing in delivering back-office transactional functions, but what are global business services and why should CFOs care? Deborah Kops explains


ssentially, global business services, or GBS, represent the next phase in outsourced or shared service models. GBS aggregates key functions such as finance, HR, IT, customer care, property and facilities – and sometimes vertical business processes such as claims processing – into one organisational structure and governance model, providing business support across the entire enterprise. It sounds like the mother of all shared services arrangements and in a sense it is. Whether delivered through internal operations or outsourcing relationships, GBS becomes the corporate back-office entity. With a single governance structure and reporting lines that span all functions, feeding into one corporate leader often with a seat at the management table, it turns the responsibility for delivery of finance upside down. In a mature GBS model, processes take precedence over functions. Traditional functional silos are broken down and transactional processes are managed end to end. CFOs may react in one of two ways to news of the ‘next big thing’ in finance delivery – by punching the air in delight or rolling their eyes in exasperation. But for CFOs in organisations with the aspiration to move to a GBS model, their ability to harness shared service and outsourcing models has become a double-edged sword. Given the evolution of the finance function compared to other corporate functions (more than 70% of Fortune 500 companies have already consolidated some part of the finance function at a country, regional or global level), finance becomes a key GBS building block. Look under the covers of the majority of GBS organisations, and you’ll find that the transformed finance function serves as the foundation. The model is predicated on the realisation that finance not only touches every aspect of the business, but has been taken to the next level through consolidation and transformation. At the very least then, CFOs should understand how the GBS model works and its implications. With this in mind, we

have produced an ACCA report, Global business services: a game changer for the finance organisation? that discusses GBS and its potential impact on the finance function.

Is it worth it? The overarching question for the CFO is whether GBS is worth doing. The advantages of finance moving to a GBS model are that it may be just the opening for the CFO to prove how finance touches almost every corporate function, and may deliver hitherto unimagined insights to enhance business performance across the enterprise. In a mature GBS model, finance resources are unleashed and refocused to perform higher-level tasks, giving greater business impact through cross-functional collaboration.



GBS makes it conceivably possible to harness the power of analytics through a more collaborative, end-to-end process delivery model at scale, linking, for example, finance data to customer and sales data. No longer is finance positioned as the bill payer or rules maker, but a real source of insight that drives business growth. In theory, GBS will deliver more business model agility, quicker market entry and business integration. With better insights, organisations should also be able to increase efficiencies that show up in the bottom line. And there’s no arguing with a streamlined administrative cost structure with all enabling functions linked together and housed in one corporate organisation. The downside of moving to GBS is that it could become an expensive and time-consuming distraction. It may also mean an uncomfortable rethink of the finance function, calling into question what the CFO must control and what finance can consume as a customer of GBS. Since the



VIEWS FROM THE COAL FACE ‘If GBS is about operating effectively by looking at processes end-to-end, it necessitates evaluating the old structures. It also begs an interesting question: what parts of finance are no longer finance?’ Liz Ditchburn, relationship leader, Kimberly-Clark ‘To be honest, I think the traditional finance career probably died a few years ago with the advent of outsourcing and shared services.’ Colm D’arcy, former director of finance operations, Hertz ‘The retained team will deliver a very pure form of business partnering. But it means finance becomes a narrow specialist/high-end discipline and the rest of finance disappears or is subsumed under a process.’ John Ashworth, global head of finance transformation, Pearson

GBS leader, not the CFO, is directly responsible for finance process delivery, some processes that have traditionally fallen under the finance remit may no longer be considered part of finance under a new model. GBS also represents an enormous cultural shift for finance, particularly for those organisations that have not moved to shared services or outsourcing models. It will change the way the finance function operates at almost every level and place new demands on finance professionals. In the GBS construct, retained finance interacts closely with other functions, which requires finance professionals to

be adept at working cross-functionally with a broad business perspective. GBS demands that finance professionals think differently and deploy a wider range of business skills than many have at the moment. The use of finance delivery models as a basis for GBS by many organisations begs the question: to whom should GBS report? The knee-jerk answer is the CFO, given his or her track record of successful transformation via shared services and/or outsourcing. But would GBS, which is essentially the organisation’s enabling factory, be better placed under an operations leader such as a COO, or even a chief administrative officer? The GBS model will not be right for everyone. It represents a major organisational change and investment. Some organisations are simply too small to benefit, while others will find that moving to GBS is too big a political challenge. But for organisations that have embraced process delivery through shared services or outsourcing, or a combination of the two, the trend toward GBS will be difficult to ignore. The question is whether these organisations would be better served by extending their investment in shared services or outsourcing, or by embracing GBS. It is early days for GBS, but it could be a game changer for finance, finally providing a leadership opportunity to add demonstrable strategic value beyond risk management across the enterprise. It remains to be seen how many organisations will take the leap. Each CFO will have to answer the question: is GBS the friend or foe of the finance function?


Deborah Kops is managing principal, Sourcing Change




CAREER-LIMITING OR ROLE-PROMOTING? ACCA’s Jamie Lyon looks at the significant implications that a move to a global business services model could have for the career paths of finance professionals A move to GBS may result in a shift in focus for the retained team away from managing processes – even in a shared services or outsourced model – and toward business partnering and corporate finance. Finance professionals in a GBS structure may see their responsibilities shift from managing single functions to managing across functions. Is GBS good for the finance professional? Finance’s move to a GBS model could be viewed as providing another step on the finance professional’s career arc. In all respects, the change started some years ago, as finance departments segregated strategic, management and execution finance tasks, and then industrialised rules-based transactions work by consolidating it into delivery centres. The implementation of GBS will call into question the role of the retained finance team, including those embedded in the business. It may change responsibilities, reallocating roles previously under the purview of the CFO’s team. If, for example, transactional finance processes shift out of the control of the CFO, the traditional career path upward may be more limited; it will certainly be disrupted because the linear functional relationship between transactional finance and the rest of the finance organisation ceases to exist. The finance professional may not be able to gain sufficient technical experience unless there is a defined path through GBS, and this may not necessarily route them back through the finance function; at the same time, the finance leaders in the retained finance organisation may be further removed from transactional finance process delivery.


GBS further stratifies career paths. The greatest career benefit of GBS may accrue to the retained team. Implemented fully, it may free finance professionals to spend more time with the business. For the ‘top end’ of finance, GBS theoretically provides better data and one version of the truth across the business. This should result in less rework and facilitate the development of capabilities in business partnering, corporate finance and strategic planning. Without the distraction of running shared services or governing outsourcing, the retained team’s

career paths are any indication, there will be limited movement between GBS and retained finance. Even though the shared services – and GBS – experience gives finance professionals unique skills, allowing them to operate in virtual, global environments and manage large teams, finance career paths have not yet been designed to take full advantage of shared services rotations. As a result, GBS finance professionals are unlikely to move into retained and ultimately CFO roles, whereas those in the retained team may be better placed to take up GBS

▌▌▌GBS FINANCE PROFESSIONALS MAY NO LONGER OCCUPY FINANCE LEADERSHIP ROLES remit becomes more focused. The retained team may also have further advantages for career advancement, with more focus on building the commercial skills and capabilities increasingly prized for finance leadership roles. Implications for career paths do not stop at the retained team. At the operational level GBS offers new opportunities for finance professionals, particularly given its focus on end-to-end processes. Professionals in GBS organisations may find they no longer occupy finance leadership roles, but rather take responsibility for end-to-end processes. They will be presented with the opportunity to master new technologies, improve workflows, and develop new process solutions. Will GBS open up new career paths to the top for finance talent or will it limit opportunity? If the effects of shared services for finance

roles, then transition back out. Could GBS challenge the development of a robust finance talent pipeline? Will high-end finance be defined so narrowly that true finance experts – those who do not care to pursue mastery of broader business skills – feel they are shut out of rewarding career opportunities? Will there be sufficient career path movement within GBS for finance professionals who have no interest in cross-functional opportunities or the attainment of broader business skills? ■ Jamie Lyon FCCA is ACCA head of corporate sector FOR MORE INFORMATION:

Global business services: a game changer for the finance organisation? is at www.



TICKET TO THE TOP ACCA’s latest careers survey reveals an aspirational membership searching for, finding and making the most of opportunities to scale the career ladder


hree-quarters of ACCA members have a clear idea of where they want to get to in their career – and expect to reach their goal within the next four years, according to ACCA’s latest careers survey. The online survey of more than 4,000 members around the world clearly shows the ACCA Qualification’s career benefits. Many expect to move quickly up the career ladder, to travel and to gain experience in many different sectors. The results highlight not only the ambitions of ACCA accountants – 73% said that they expect to achieve their career ambitions in the next four years – but the changing nature of an accountant’s career. Today’s accountants expect to move jobs, work abroad and to work for multiple employers (and often for themselves) during their career. Sixty-three percent have already worked in more than one sector. The most common move is from practice to corporate, although 57% of members in not-for-profits have also worked in the corporate sector. One in three intends to remain with their current employer for more than three years. The survey also found that frequent job changes have become the norm; 31% have moved jobs in the previous 12 months, half within the same organisation and a third gaining a promotion. This year, for the first time, the survey included personal career goals. Some have already achieved their ambition (as shown in the graphic on this page) while others are working towards it; 61% are aiming for a more senior position and 32% plan to start their own business eventually. All have set themselves challenging deadlines to achieve their ambitions; 73% aim to reach their goal within the next four years. Just over half of those who have seen a pay increase in the past 12 months said that it was the result of a companywide pay rise, while for 15% the increase was a reward for additional responsibility or promotion. The survey showed a wide variety in hours worked per week. The average globally was 44 hours, with accountants in the corporate and financial sectors typically exceeding that. Members in the not-for-profit and public sectors recorded the shortest working week, at 42 hours. The biggest variation was geographic, with members in Russia and Pakistan reporting the longest working week (49 hours), followed by the UAE, Singapore and Malaysia (all 48 hours). ACCA members in the UK, Ireland and Canada recorded an average of 42 hours. A strong theme is members’ desire to make a difference, from inspiring more women to join the profession to nurturing younger talent or even setting up their own NGO.



Working in a specialist finance role (eg tax)


Working in another country


Continuing in my area in a more senior position


Working in a different sector


Working in a different finance area/service line


Starting my own business


Working in a non-finance/accounting role


Moving into consultancy


‘This year’s survey shows just how aspirational our members are,’ says Neil Stevenson, ACCA’s executive director – brand. ‘A lot of them believe working abroad is key to expanding their career horizon: 66% because of the opportunity to gain additional skills and knowledge, and 62% because they want to experience another culture. This ties in very well with ACCA’s core values of opportunity and diversity. Having a diverse career, as many of our members do, shows just how adaptable our financial professionals are to the tasks that are assigned to them.’ ■ Liz Fisher, journalist FOR MORE INFORMATION:

ACCA members’ career survey 2013 is at




Career boost Give the gift of feedback, urges our talent doctor Dr Rob Yeung. Plus what not to wear to work, the distracting power of social media, and more

TALENT DOCTOR: FEEDBACK When was the last time you criticised or complimented someone? Or perhaps more importantly, can you think of any occasions on which you could or should have said something to a colleague but didn’t? Being able to give feedback is one of the most useful but underused or abused skills we can deploy in the workplace. Few people enjoy giving negative feedback, but managers should learn to think of feedback as a gift. If you don’t criticise someone, then that person could continue making the same mistake or carry on doing things more slowly than they might otherwise. Think about it this way: if you were doing something wrongly or poorly, wouldn’t you want someone to give you the gift of insight and let you know? And, of course, not all feedback has to be negative. Positive feedback – praise or recognition – is just as important for telling colleagues they’re doing a good job. So how can we get better at giving effective feedback? Here are three simple principles: Begin by asking yourself why you want to give someone feedback. You should only ever speak up for one of two reasons: either to reinforce good behaviour or to help someone change ineffective behaviour. Any other reason and perhaps you shouldn’t say anything. Too often, people give feedback even when the recipient already knows there is a problem; in such cases the aim is really to say ‘I told you so’. That only creates resentment, so don’t do it. Specify only the behaviour you observed. You can’t know how someone was feeling. So don’t say ‘you were angry’. The feedback recipient can easily retort ‘no I wasn’t, I was passionate’ or ‘I was only being insistent’. By debating someone’s intent, you get diverted from your goal in giving feedback. Instead, report only the words you heard or the behaviour you saw – for example ‘you shook your head and spoke much more loudly than you usually do’ or ‘you hardly spoke during that meeting at all’. By describing not only what was said but also how it was said, you can keep things factual and dispassionate. Explain the impact the behaviour had on you. Say ‘I felt shocked by how loudly you spoke’ or ‘I felt disappointed that you didn’t say more’ or whatever else you thought or felt. The benefit of saying ‘I felt…’ or ‘I thought…’ is that it can’t be debated. The recipient of your feedback simply can’t argue about your personal thoughts or feelings.


When giving positive feedback, simply sharing a positive message with a colleague is enough. If, however, your feedback is negative, then the two of you are going to need to work out how to handle such a situation in future. But following the three principles outlined here will allow you to raise the issue in as nonconfrontational a way as possible. And that is a better start than most people manage to make when it comes to criticising others. Dr Rob Yeung is a psychologist at leadership consulting firm Talentspace and author of over 20 bestselling career and management books including E is for Exceptional: The New Science of Success (Pan Books). He also appears frequently as a business commentator on the BBC and CNN. FOR MORE INFORMATION: @robyeung



Fired for being ‘too hot’, claimed Lauren Odes, a now ex-worker of a US lingerie company. A blacksequined, figure-hugging dress was apparently too steamy. Odes wouldn’t have stood a chance at Newsweek, after new owner IBT Media released an employee handbook that, as well as forbidding staff from discussing working conditions or criticising their employer, includes a detailed list of sartorial stipulations. Much of it is of no great surprise – no denim, tracksuits, trainers or flip-flops. But it also warns that halter tops, camisoles, ‘or anything else that is deemed unprofessional or excessively distracting’ are ‘inappropriate business attire’, while ‘shaggy, messy, and neglected hair is not permissible regardless of length’.


Social media is the top distraction at work, according to Middle Eastfocused recruiter Bayt. With employees using more screens at their desks, the temptation to check social media and breaking news is apparently too much, but some are happy to blame the work environment. The recent audience survey found that 30% of workers believed a more professional workplace would help eliminate distraction. Or perhaps stop updating your Facebook status every minute – people don’t need to know you’re having a sandwich, or that Britney Spears followed you on Twitter. Search for the longer story on


Following the Training Needs Analysis survey, ACCA has worked together with BPP



Predicting the future can be a fool’s errand. So fantasising about a perfect year is just plain delusional. Yet no matter how much of a cynic you may be, a new year always invokes a sense of renewal – even if it starts for many with tired eyes and blurry memories of fireworks and song. In ACCA’s 2013 member career survey, we asked: ‘What is the single most important goal you would like to achieve?’ The responses were varied and ambitious, with leadership, inspiration and advancement being common themes. But what really stood out was a common desire to make a difference – from being a role model to female accountants to setting up an NGO. Elsewhere in the survey we found that 61% of members had a pay rise in 2013, with over half receiving bonuses, and many more regarding career mobility as a key value of their ACCA Qualification. So with this in mind, for ACCA members, 2014 looks promising.

THE BIG BREAK KATARINA KASZASOVA FCCA Social uprising and regime change are usually associated with revolution, not career change. Kaszasova had just started a degree in chemical engineering when former Czechoslovakia’s peaceful 1989 Velvet Revolution paved the way for the switch from socialist state to democratic market economy. After switching to accounting and working for KPMG, she moved to the public sector, where she’s a high-flyer in Slovakia’s Ministry of Finance. Read her full interview at’s Success Stories.

Kaszasova’s top soft skills:

How do you cope with stress?
For longterm stress, such as preparing the state’s financial statements, I do more intensive sport activities and sleep. What’s the first thing you look for in a potential employee?
Willingness to learn and the flexibility to cope with a dynamically changing environment. How can you acquire new soft skills?
By observing more experienced colleagues, comparing experiences and trial and error.

and CrossKnowledge to produce some great value learning packs on the topics members requested for further development. Produced by the best authors and business professors from around the world, the packs focus on finance and business management, leadership

What’s the secret to succeeding in the public sector?
Remain professional at all times, even though you’re risking your position by telling the truth instead of what your superiors want to hear. Is it enough to have a first class academic record? You have to add something extra – a positive approach to learning new things, courage to say ‘I don’t know, but I’ll try to find out’, and a professional manner, along with a sincere smile.

and vision, communication, change management and negotiation. See link below for more information.

This page is compiled and edited by Neil Johnson, editor, FOR MORE INFORMATION:

For more on the learning packs, visit





Marketing strategy

Get verifiable CPD units by answering questions on this article at:

Opening a new series of articles on key business concepts for finance professionals, Dr Tony Grundy looks at marketing strategy My previous series of articles covered competitive strategy, financial strategy and management theories. This fourth series, on marketing strategy, offers readers coverage of the sort of topics that would be found in an MBA. Marketing is the third most important discipline covered in an MBA course, yet it is one that may not be well understood by many accountants, particularly

Indeed, some people joke that the MBA acronym stands for Masochist of Business Administration. While it is true that doing an MBA is more easily said than done (at Cass it took me 170 evenings and three weekends – after 150 evenings, you just want it to end), it is also true that it can be a very mind-expanding experience. Also, if you ever want to be an FD, move into general

concepts, ideas and tools to add to your existing, more technical skills. My next series will look first at marketing (three articles) and then at people and organisation (two articles). Finally, there will be another five articles on international and corporate management.

Series overview But let’s turn to the subject of this series, marketing. In


James Dyson, shown here with his Air Multiplier fan, delivered marketing strategy success with his bagless vacuum cleaner

What is marketing strategy? Marketing strategy is the process of deciding which markets to compete in, which customers to prioritise, and what customer value to target, and to decide how that will be delivered through products, service and the marketing mix in order to beat competitors. This definition provides for the following: determining what businesses to be in – and not to be in how to compete across the matrix of those businesses by customer segment some idea of being genuinely better than competitors a view of the mechanisms for taking the product to market: the marketing mix, things like the product itself, price, promotion and the place where it will be offered and how you will get it there (the ‘Ps’). To evolve an effective marketing strategy requires a lot of thought. Indeed, true marketing strategies in the complete sense are something of a rarity: many of the key ingredients are invariably missing. So why is marketing strategy of interest to the accountant? Because it will not only drive the future value of a company but it will also direct (and possibly misdirect) resources and thus costs. The latter will happen both directly and indirectly, too – for example through

* * * *

those with more limited experience. In due course we will no doubt fill in more of the content of an MBA – for example, international management. Few accountants do an MBA, put off perhaps by the thought of doing another 1,000 hours or more of study on top of what they needed to do to qualify as an accountant and probably after a first degree as well.


management or become a consultant, then having an MBA as well as being an accountant should give you a real career edge. Even if you decide that doing the full MBA is not advantageous to you, it’s still worth dipping into some of the really key elements of that knowledge. In time, just reading these series of articles can at least give you some familiarity with the key

this series we will be looking at the following: marketing strategy (article 1) marketing, product and channel mix (article 2) customer value and competitive positioning (article 2) branding strategy (article 3) turning marketing strategy into economic value (article 3).

* * * * *


the spend on the marketing mix, including not just advertising, promotion and selling costs, but also in digital support for investments in place – for example in retail sites. It will also affect the cost of customer service, logistics and staff training, and will sometimes even involve culture and organisational changes, and quality systems. In the past I have

value analysis * customer competitor analysis * value chains * portfolio tools like the * General Electric grid, or the BCG grid, mapping relative growth rates and relative market shares life cycle analysis the Ansoff grid of existing versus new products and markets Ansoff’s gap analysis. What has happened is that the marketing industry

* * *

Goliath. In 1995 he stole the show in The Money Programme from Hoover, Electrolux and Panasonic, suggesting that they were unable to compete with him due to his patents and because many of them were unable to ‘think differently’. The then marketing director of Hoover went on the record, saying: ‘I do wish that (when Dyson offered the bag-less technology to us), we had bought the

▌▌▌MARKETING STRATEGY WILL NOT ONLY DRIVE A COMPANY’S FUTURE VALUE BUT WILL ALSO DIRECT (AND POSSIBLY MISDIRECT) RESOURCES AND THUS COSTS described marketing strategy as the ‘competitive software’ that makes the organisational engine move smoothly forward, just like the oil in a car’s engine. It has a subtle effect – unless it all goes wrong. As I explained in my five articles last year, mainstream strategy within the business (sometimes known as the competitive strategy) typically consists of a number of elements: marketing strategy operations strategy IT strategy financial strategy HR/organisational and people strategy. What is interesting here is that of all of these there is most overlap between competitive strategy and marketing strategy. Indeed, one can be forgiven for thinking that marketing strategy and competitive strategy are the same thing. For instance, a typical marketing strategy book would almost certainly contain the following: SWOT analysis PEST analysis Porter’s five competitive forces

* * * * *

* * *

has latched onto the new techniques that have been invented by strategy over the past 60 years. Well, marketeers can be expected to be successful in marketing the discipline of marketing, can’t they? What value then does marketing strategy bring to the business? To answer that question, let’s take a look at an example.

Dyson Dyson entered the carpet vacuuming market in the mid-1990s and rapidly overtook Hoover as market leader. Dyson’s simple value proposition (ie a distinctive way of adding value to the customers) was to ‘say goodbye to the bag’. Hoover, instead of countering Dyson with a bagless technology, acted like a rabbit frozen in the headlights. Dyson also brought design into the marketing mix with a rather art deco design and initially selling its products in a bright yellow livery. A key plank of Dyson’s initial marketing strategy was the part that founder James Dyson played in the media as a David versus

technology off him. We would have put it on the shelf, we would have left it on the shelf, and it would not have been used.’ From 1994 to around 1999 Dyson’s marketing strategy was based around the distinctive quality of being more convenient than a bagged machine as no bags were needed. Dyson was more innovative, had premium pricing (there was a certain ‘snob’ value to the Dyson) and enjoyed free media coverage driven by the founder’s colourful personality. Dyson did not spend lavishly on advertising but relied on word of mouth and positive media coverage to create its own competitive space. The rewards of this marketing strategy were very high returns at the operating profit level and UK brand leadership. Between 1999 and 2002 the company began to


be challenged by bagless vacuum cleaners from its competitors around the time that it began to export internationally: product lifecycle effects and imitation were starting to set in in what was fast becoming a mature market. There was a profit wobble around 2002 to 2003 when Dyson decided to move production to Asia Pacific, generating adverse press commentary and some loss of customers. There were clear warning signs then that its marketing strategy lacked lustre. Dyson fought back, not by fundamentally changing its marketing strategy (eg by shaving its price premium) but by boldy investing heavily in R&D, which allowed it to secure quality and image advantage again. Moreover its US strategy began to pay off and by the 2010s Dyson had a turnover of over £1bn on its international business, and had restored its very high profit levels. Dyson’s example demonstrates that a business’s marketing strategy needs to be responsive to competitive change yet also requires consistency of direction combined with renewal. Never assume that however docile your competitors may be that this will always be the case. An effective marketing strategy is key to superior financial performance. ■ Dr Tony Grundy is an independent consultant and trainer, and lectures at Henley Business School FOR MORE INFORMATION: Previous Tony Grundy articles on strategy and management theories, visit




Fast month-end reporting Month-end reporting is not the time for spring cleaning, it is a time for arriving at a true and fair view quickly. David Parmenter begins a three-part series that explains how If each month-end is a disaster waiting to happen, full of last-minute adjustments negating the ‘quality assurance’ (QA) work you performed earlier and leaving the month-end exposed to a late error, then you and your team need some therapy. Here are the changes you need to make. 1 Get the CEO’s support Do a brief calculation on the costs of month-end reporting, then approach the CEO and say: ‘We have just done some calculations that estimate we will spend between £8m and £10m over the next 10 years reporting results after the horse has bolted. I want to undertake a project to speed up monthend reporting, giving you access to numbers much quicker and saving over £5m in the next 10 years. Can I count on your support?’ There is not a CEO on the planet who will not respond: ‘How can I help?’ Ask the CEO to phone those responsible for major breaches of procedures and issue a one-minute reprimand making it clear that full cooperation is expected in future and noncompliance will be careerlimiting. All breaches should be reported weekly to the CEO – invoices over £10,000 with no raised order, nonreceipting of goods and services over £10,000, budget-holders with over three months of outstanding expense claims, etc. 2 Set rules for the finance team Accountants are all artists: we sculpt a month-


end result and there is no such thing as a ‘right’ number, only a ‘true and fair ‘number. The finance team need only do enough to arrive at a ‘true and fair’ view and stick to some rules: We will not delay for detail. Hunting for the perfect number is now unacceptable. The final report will have extensive QA checks. Reporting will cover only major revenue and cost categories, with account code analysis left to a drill-down tool. 3 Ban spring cleaning Month-end reporting is not the time for spring cleaning, no matter how tempting it may be. This discipline requires a re-education within the finance team and with budget holders. One of the most important practices is to catch all material adjustments in an ‘overs and unders’ spreadsheet that traps major adjustments – say, over £5,000, £20,000 or £50,000, depending on the size of the organisation. The accountants enter

* * * *

NEXT STEPS 1 Sell the change to the CEO using their emotional drivers (see my earlier article The magic of marketing, available at 2 Get all the finance team to sign up to your new rules – I will send you a draft copy of the rules if you email me ( 3 Set up and operate an ‘overs and unders’ schedule every month-end.

all adjustments on the spreadsheet, which resides on a shared drive on the local area network. In most months you may need to process just one or two adjustments as the rest will offset each other and can be processed in the quiet time the following month. 4 Avoid late adjustments Clever organisations ban all inter-company adjustments at month-end except for major internal profit adjustments. They have automatic interfaces with inter-group transactions

where one party does the transactions for both general ledgers. When there is a difference, lay down a rule that the accounts payable (AP) or accounts receivable (AR) ledger is always right, and adjust accordingly, leaving the inter-company parties to sort it out the following month. This change will require a CEO directive to all subsidiaries.

David Parmenter is a writer and presenter on measuring, monitoring and managing performance FOR MORE INFORMATION:




Get verifiable CPD units by answering questions on this article at:

The European Securities and Markets Authority (ESMA) has recently published its annual statement defining the European common enforcement priorities for 2013 financial statements. The aim is to try to foster transparency and the consistent application of IFRS (International Financial Reporting Standards) to help the financial markets function. With the help of European national enforcers, ESMA has identified several financial reporting topics that should be considered in the preparation of the financial statements of listed companies for the year ending 31 December 2013. Those topics are: 1 impairment of nonfinancial assets 2 measurement and disclosure of postemployment benefit obligations 3 fair value measurement and disclosure 4 disclosures related to significant accounting policies, judgments and estimates 5 measurement of financial instruments and disclosure of related risk with relevance to financial institutions. Not surprisingly, ESMA says that national regulators may also focus on additional relevant topics. It issued a similar statement a year ago and post-employment benefit obligations appears on both listings. ESMA builds on its 2012 statement by emphasising the need for transparency

Transparent and consistent Transparency and the consistent application of IFRS in financial reporting are key to making financial markets work smoothly and the importance of appropriate and consistent application of recognition, measurement and disclosure principles. ESMA and the European national enforcers will monitor and assess the application of IFRS requirements relating to the items in this statement. These European common enforcement priorities will be incorporated into the reviews performed by national enforcers. The guidelines are not statutory, but ESMA hopes that awareness campaigns will lead national regulators to take account of the new priorities. The watchdog will also monitor national regulators’ application of the priorities and will

▌▌▌ENTITIES SHOULD DISCLOSE APPLICABLE POLICIES ONLY AND FOCUS ON ENTITY-SPECIFIC INFORMATION RATHER THAN QUOTING EXTENSIVELY FROM IFRS publish progress reviews to encourage national regulators to comply. Users of financial statement have expressed concerns over the use of ‘boilerplate’ disclosures for transactions that are not relevant or are immaterial to the entity. The view is that entities should disclose only applicable accounting policies and focus on entityspecific information rather than quoting extensively from IFRS.

Impairment of nonfinancial assets Continued slow economic growth in Europe could

indicate that non-financial assets will continue to generate lower than expected cashflows especially in those industries experiencing a downturn in fortunes. In 2012, ESMA suggested paying particular attention to the valuation of goodwill and intangible assets with indefinite life spans. This year, it has again included the impairment of non-financial assets in the common enforcement priorities with a focus on certain specific areas. These areas are cashflow projections, disclosure of key assumptions and judgments, and appropriate

disclosure of sensitivity analysis for material goodwill and intangible assets with indefinite useful lives. In measuring value-inuse, cashflow projections should be based on reasonable and supportable assumptions that represent the best estimate of the range of future economic conditions. IAS 36, Impairment of Assets, points out that greater weight should be given to external evidence when determining the best estimate of cashflow projections. IAS 36 says entities should assess the reasonableness of the assumptions on which






Get verifiable CPD units by answering questions on this article at:

Fair value

▌▌▌DISCLOSURES RELATED TO FAIR VALUE NEED TO BE MADE, PARTICULARLY WHEN THE MEASUREMENT IS BASED ON SIGNIFICANT UNOBSERVABLE INPUTS cashflow projections are based. Each key assumption should be consistent with external sources of information, or how these assumptions differ from experience or external sources of information should be disclosed. ESMA considers that disclosures made by entities are often uninformative because they are only provided at an aggregate level and not at the level of the cashgenerating unit. Financial statements generally are not providing disclosures that are entity-specific or appropriately disaggregated. ESMA has reviewed 2012 financial statements, and the disclosures relating to the sensitivity analysis of goodwill or other intangible assets with indefinite useful lives are poor. IAS 36 requires disclosures on the sensitivity of the key assumptions to change when determining the recoverable amount. Entities have regularly


used the assertion that ‘no reasonable possible change in a key assumption would result in an impairment loss’. ESMA believes that this disclosure does not give users sufficient detail to allow them to assess sensitivity properly.

Measurement of post-employment benefit obligations IAS 19, Employee Benefits, requires the discount rate applied to post-employment benefit obligations to be determined using market yields based on high-quality corporate bonds. ‘High quality’ reflects absolute credit quality and not that of a given collection of corporate bonds. The policy for determining the discount rate should be applied consistently over time and a reduction in the number of high-quality corporate bonds should not normally result in a change to this policy. The International Accounting Standards

Board (IASB) has tentatively decided to amend IAS 19 to clarify that the depth of the bond market should be assessed and this should be at the currency level and not at the country level. In jurisdictions where there is no deep market in these bonds, the standard requires that market yields on government bonds should be used. ESMA expects issuers to use an approach consistent with this amendment. There is an additional reminder by ESMA regarding the importance of disclosing the significant actuarial assumptions used in determining the present value of the defined benefit obligation and the related sensitivity analysis. The discount rate is a significant actuarial assumption, the details of which should be disclosed together with any disaggregation information on plans and the fair value of the plan assets where the level of risk of those plans is different.

ESMA has indicated that entities should assess the impact of the requirements of IFRS 13, Fair Value Measurement. In particular, the effect of non-performance risk should be reflected in the value of a liability. As an example, the fair value of a derivative liability should incorporate the entity’s own credit risk. ESMA emphasises the need for proper recognition of counterparty credit risk when determining the fair value of financial instruments and providing relevant disclosure. IFRS 13 requires all valuation techniques to maximise the use of relevant observable inputs, which should be consistent with the asset or liability’s characteristics. In some cases, a premium or discount to the market value may be applied but it should be consistent with the nature of the asset or liability. ESMA stresses the need to provide disclosures related to fair value, particularly when the measurement is based on significant unobservable inputs (level 3). The more unobservable the data, the more important that uncertainties are clearly identified. Further, IFRS 13 (and ESMA) requires entities to categorise measurements into each level of the fair value hierarchy.

Significant accounting policies, judgments and estimates ESMA expects issuers to focus on the quality


and completeness of disclosures relevant to the entity’s financial statements. These should be entity-specific and not boilerplate. ESMA believes that disclosures could be improved in the following areas: significant accounting policies, judgments made by management, sources of estimation uncertainty, going concern, sensitivities, and new standards issued but not yet effective. Significant accounting policies and management judgments could be included in the financial statements in order of materiality and significance. IAS 1, Presentation of Financial Statements, requires disclosure of estimation uncertainties with a significant risk of being adjusted in the next year. ESMA reiterates that disclosure of new standards that have been issued but are not yet effective (IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors) is relevant where the new standard could have a material impact on the financial statements.

Topics related to financial instruments Transparency and comparability of financial reporting of financial institutions is in the interest of market participants. ESMA states that issuers should ensure that they meet the requirements of IFRS 7, Financial Instruments: Disclosures, for qualitative and quantitative disclosures and assess whether there is objective evidence of impairment while disclosing sufficient detail to provide a comprehensive picture of the liquidity risk and funding needs of the entity.

Disclosures should enable users to evaluate the nature and extent of risks, and the elements related to the valuation of financial instruments, the latter reflecting economic reality. Experience during the financial crisis showed diverging accounting


treatments in relation to forbearance practices. Forbearance occurs where the terms of the loan are modified due to the borrower’s financial difficulties. ESMA expects issuers to provide quantitative information on the effects of forbearance, enabling investors to assess the level of impairment of financial assets. ESMA also expects disclosure of the accounting policies applied to financial assets that have been assessed individually for impairment but for which no objective evidence of impairment was available. The purpose of this disclosure is to allow users to assess credit risk. Entities should also disclose the time bands in the maturity analysis and include maturity analysis of financial assets held for managing liquidity risk. ESMA is attempting to foster consistent application of accounting standards while ensuring the transparency and accuracy of financial information. As noted above, ESMA and the national regulators will monitor the application of the IFRS requirements outlined in the priorities, with national regulators incorporating them into their reviews and taking corrective actions where appropriate. Auditors and issuers ignore the guidance at their peril. ■ Graham Holt is director of professional studies at the accounting, finance and economics department at Manchester Metropolitan University Business School FOR MORE INFORMATION:

European common enforcement priorities:




Technically speaking Aidan Clifford rounds up some recent changes that accountants need to be aware of, including IAS1, ESMA enforcement decisions, credit union audits and an IFRS update

IN THIS ARTICLE: 1 Presentation of information in the income statement comes under scrutiny by IAASA 2 ESMA publishes more case studies in accounting 3 Consultation on directors’ remuneration by FRC 4 Credit union 2013 audits likely to be the first to use new-style audit reports 5 Financial sanctions 6 IFRS update 7 Significant issues for Ryanair


IAASA has performed a desktop review of compliance with IAS 1, Presentation of Financial Statements, and prepared commentary on the areas where divergent, but not necessarily noncompliant, approaches have been adopted in practice. IAASA has noted that such divergent treatments reduce the comparability of financial statements and expressed the view that users be made aware of this. IAS 1 sets out the overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. The key findings and messages are: Users of issuers’ financial statements, such as investors and other finance providers, are advised to critically evaluate reported headline items and the income statement presentation adopted by issuers The relevant accounting standard is not prescriptive in nature and issuers have adopted




alternative presentation methodologies, which appear to comply with the accounting standard. Particular attention should be directed towards the items titled ‘operating profit’ and ‘exceptional items’. These terms are not defined by the relevant accounting standard but their use is particularly prevalent among Irish and UK entities. Users should consider the related explanatorynote disclosures, including the definitions used and the accounting policy adopted (if any) in respect of these items. More details are at




The European Securities and Markets Authority (ESMA) has published a 14th extract from its database of enforcement decisions on financial statements. These 14 publications have now built up into a valuable learning and teaching tool where

particular issues in financial reporting are addressed and the correct treatment is set out. The 14th extract is best accessed through the IAASA website at


The Financial Reporting Council (FRC) is consulting on three specific proposals: clawback arrangements; whether nonexecutive directors who are also executive directors in other companies should sit on the remuneration committee; and what actions companies might take if they fail to obtain, at least, a substantial majority in support of a resolution on remuneration. There is no presumption on the FRC’s part as to the outcome. If changes to the Code are ultimately proposed, they will be subject to consultation in the first quarter of 2014. The new Code would then apply to accounting periods beginning on or after 1 October 2014. More details at


The first application of ISA 700 (Revised) and use of bulletin 1(I)-style audit reports will most likely be for credit union 2013 year ends. The newstyle audit reports are applicable for accounting periods beginning on or


after 1 October 2012 – the first day of a credit union accounting year. The bulletin has an example audit report for a credit union, although the example is already out of date; the statutory reference in the example should be to the Credit Union Acts 1997 to 2012. See Bulletin 1(I) at for the example audit report.

5 FINANCIAL SANCTIONS Sanctions are restrictive measures imposed on individuals, entities or countries in an effort to curtail their activities and to exert pressure and influence on them. The Central Bank of Ireland (CBI) is responsible for

the administration and enforcement of certain financial sanctions, but there are also trade sanctions, restrictions on travel or civil aviation restrictions. Financial sanctions are primarily concerned with curtailing the movement of payments and capital. An updated list of all restrictive measures and financial sanctions in force is available from


The October edition of IASB Update e-zine is available from The newsletter discusses developments in the accounting for revenue recognition, financial

instruments and a number of other areas.


An interesting matter has arisen in Ryanair’s accounts. In summary, the accounting for an associate versus the accounting for an investment boils down to whether the investor has ‘significant influence’ or not. Ryanair says it doesn’t have any influence over Aer Lingus and treats its ownership interest as an available-for-sale investment. The competition regulator in the UK disagrees and says that Ryanair does have influence. If Ryanair did have a significant influence, it would be required to treat the ownership interest as


an associate. While it is an academically interesting accounting dilemma, clearly the real issue is a difference in the definition of ‘significant influence’, with a higher threshold required by IFRS compared to the UK competition regulator . However, because Aer Lingus is profit making, treating the ownership interest as an associate rather than an available-for-sale investment would be earnings positive for Ryanair, but proof positive for the competition Authority of their ‘influence’ over Aer Lingus. ■ Aidan Clifford is advisory service manager, ACCA Ireland. Email aidan.




Tax – an update The Irish Tax Institute rounds up some of the changes of which practitioners should be aware


R&D tax credit * Various amendments to

Update on Budget 2014 and Finance Bill measures. No change to pay and file deadline for 2014. Reminder of PRSI changes taking effect from 1 January 2014


At the time of writing, the Finance (No.2) Bill 2013 was making its way through the Oireachtas, with a view to enactment before the end of 2013. The Finance Bill gives effect to the tax measures announced on Budget Day, 15 October, and some additional measures not initially presented as part of  the Budget. The key features of Budget 2014 and the subsequent Finance Bill were as follows: A new tax package building business and creating jobs. An international tax strategy statement, setting out Ireland’s objectives and commitments in relation to international corporate tax issues. No changes to income tax rates, bands or basic credits, but a range of other revenue-raising measures. Some of the main elements of this package were the following: Capital gains tax (CGT) relief for reinvestment: a new CGT relief will apply where an individual makes an investment in assets for use in a new productive trading activity in the period


1 January 2014 to 31 December 2018, and subsequently disposes of this investment no earlier than three years after the date of investment. The CGT payable on the disposal of this new investment will be reduced. The commencement of this measure is subject to EU state aid approval. Start your own business incentive: an exemption from income tax, up to a maximum of €40,000 income per annum, will be provided for a period of two years to individuals who set up a qualifying unincorporated business, having been unemployed for a period of at least 12 months prior to establishing the business. Employment and investment incentive and high earners’ restriction: the initial 30% relief available for investments under the employment and investment incentive, which has until now been subject to the high earners’ restriction, is being removed from the High Earners’ Restriction for investments made on or after 16 October 2013, and on or before 31 December 2016.

* *





the R&D tax credit are proposed: The limit on the amount of expenditure on R&D outsourced to third parties which can qualify for the R&D tax credit is being increased from 10% to 15%. The amount of expenditure eligible for the R&D tax credit on a full-volume basis (without reference to the 2003 base year) is being increased from €200,000 to €300,000. It was announced that it is intended that ultimately the base year will be phased out entirely over time. Some changes were also made in the Finance Bill to the ‘key employee’ relief element of the credit. VAT The annual VAT cash receipts basis threshold is being increased from €1.25m to €2m with effect from 1 May 2014. The reduced rate of 9% VAT for tourism-related goods and services is being retained. Living city initiative: the living city urban regeneration initiative is being extended to include residential properties constructed up to and including 1914, and certain areas of the cities of Cork, Galway, Kilkenny and Dublin. Home renovation incentive: a new home renovation incentive scheme is being introduced. Homeowners

who carry out renovation and improvement work on their principal private residence between 25 October 2013 and the end of 2015 will be able to avail of an income tax credit of 13.5% on qualifying expenditure. Relief will be available on qualifying expenditure over €5,000 up to a maximum of €30,000. Work qualifying for relief includes building extensions, window fitting, plumbing, tiling and plastering carried out by tax-compliant builders. The credit will be split over the two years following the year in which the work is carried out.




* * *




On Budget Day, the minister also announced the publication of an International Tax Strategy Statement which sets out Ireland’s objectives and commitments in relation to international corporate tax issues. The Finance Bill also introduces a change to company tax residence rules. The change has effect where an Irish incorporated company is managed and controlled in another Treaty State or EU Member State (i.e. a relevant territory), and is not regarded as tax resident in any territory. This arises because: It is not resident in the other relevant territory, as it is not incorporated there, and It is not resident in Ireland because it is not managed and controlled here.

* *


In this case, the company will be regarded as resident in Ireland for tax purposes. The amendment applies from: 24 October 2013 for companies incorporated on or after that date; and 1 January 2015 for companies incorporated before 24 October 2013.

* *


Together with the package of tax incentives outlined above, the Budget and Finance Bill also contained a range of revenue-raising provisions, including the following: The DIRT rate increases from 33% to 41% from 1 January 2014. The Standard Fund Threshold for pensions is being reduced from €2.3m to €2m from 1 January 2014. Individuals with pension rights in excess of this new lower limit on 1 January will be able to claim a personal fund threshold subject to a maximum of €2.3m. From 16 October 2013, tax relief for medical insurance premiums is restricted to the first €1,000 per adult insured and the first €500 per child insured. The current 0.6% pension levy is to increase to 0.75% in 2014. This levy will be abolished from 31 December 2014 but a levy of 0.15% on pension funds will apply in 2015.

* *




On 11 October, the department of finance launched a consultation on proposed changes to the income tax pay and file deadline. The department suggested that changes are required ‘in order to provide increased certainty around the annual tax take

and are required as a result of the move to an earlier Budget Day’. Strong opposition to the proposed changes was expressed by small business groups and tax practitioners. The concerns outlined included the detrimental cashflow impact of an earlier payment deadline, time pressure during the busy summer months (particularly for seasonal businesses), the possible clash with the corporation tax filing deadline, and some doubt over the necessity for a change in the context of already highly accurate tax forecasting by the department of finance. On 20 November, the minister announced that there would be no change to the pay and file regime for 2014. It was noted, however, that the minister’s intention to bring annual pay and file dates forward remains, but

it has been decided that it would be more appropriate to make any necessary changes by means of the Finance Bill 2014. These would then take effect, at the earliest, from 2015. We will continue to update readers on any further developments in this area.


The Social Welfare and Pensions Bill 2013, which was published in October, provides that, from 1 January 2014, unearned income of certain employed contributors and occupational pensioners will become liable to PRSI at 4%. This will apply where all of the following conditions are satisfied: 1 The individual is either an employed person or an occupational pensioner (whether the pension income arises from the individual’s


own previous employment or that of a spouse or civil partner), and 2 The individual is aged 16 years or over, but under the age of 66, and 3 The individual has unearned income, i.e. income other than income from a trade, profession or partnership (e.g. investment income or rental income), and 4 That unearned income is the individual’s only additional income aside from his/her employment or pension income, and 5 The individual is a chargeable person, as defined in section 959A TCA 1997. Readers should note that Revenue Tax Briefing 62 deals with the definition of ‘chargeable person’ and states that: ‘An individual who is in receipt of income chargeable to tax under the PAYE system but who is also in receipt of income from other non-PAYE sources will not be regarded as a ‘chargeable person’ if the total gross income from all non-PAYE sources is less than €50,000 and the net assessable income is less than €3,174, and the income is coded against PAYE tax credits.’ Readers are also reminded that the rate of employer PRSI for all jobs that pay up to €356 per week will be increased from 4.25% to 8.5% from 1 January 2014, although there is no reference to this measure in this year’s Bill. The rate had been halved under the Jobs Initiative, but is scheduled to revert to 8.5% from 1 January 2014, as set out in the Social Welfare and Pensions Act 2011. ■ Deirdre Daly is tax manager, Irish Tax Institute. Email




NI tax update Glenn Collins, ACCA UK’s head of technical advisory, provides a monthly round-up of the latest developments in tax of interest to Northern Ireland practitioners ENTERTAINERS

Revenue & Customs Brief 29/13, National Insurance contributions: HM Revenue & Customs’ position following the Court of Appeal decision in the case of ITV Services Ltd v Commissioners for HMRC, states that the decision reached in earlier tribunals has been upheld by the Court of Appeal. The decision upheld that where actors’ contracts provided for remuneration by way of salary there was liability for Class 1 National Insurance Contributions (NICs) on all the remuneration payable under the contract. Revenue & Customs Brief 35/13 National Insurance Contributions (NICs): Repeal of the Social Security (Categorisation of Earners) Regulations 1978 (‘the Regulations’) in respect of entertainers from 6 April 2014 highlights the ITV case and the current NICs position for entertainers until 5 April 2014 but also the future NICs position for entertainers from 6 April 2014. It states that the ‘proposed change is that entertainers will no longer be included in the provisions of the Regulations. This in turn means that entertainers’ earnings will no longer be brought within Section 6 of SSCBA 1992 (which places a Class 1 NICs charge on them) from this date.’ It summarises this by stating: ‘From 6 April 2014, producers engaging your performance services will not be required to deduct Class 1 NICs


contributions from any payments they make to you. This includes additional use payments such as royalties. Your engager will make payments to you gross of tax and NICs and you must declare these earnings as part of your normal self-employed SelfAssessment return.’ Further details can be found at www.accaglobal/ advisory


You can find links to HMRC helpline numbers at www.accaglobal/advisory

CIS REPAYMENT CLAIMS CIS repayments continue to impact on business cashflow. This has been recognised and HMRC is issuing guidance to try to help speed up the process for all concerned (also see last month’s Accounting and Business). You can find a link to Construction Industry Scheme (CIS) Repayment claims for limited company subcontractors at www. accaglobal/advisory It states that before claiming a repayment of CIS deductions you should ensure that: the company has registered as a subcontractor by calling the CIS helpline the company is set up with a PAYE scheme (or its existing PAYE scheme has been set up to include CIS), by calling the New Employer helpline form 64-8 has been completed to allow the

* *


SELF-ASSESSMENT DEADLINE HMRC has brought into place information that aims to help agents manage the self-assessment deadline: On the page you can find: Keeping informed – latest news Submitting online tax returns for your clients Registering for self assessment Agent authorisation Self-assessment liabilities and payment General information to help you fill in tax returns Toolkits to help reduce common errors Agent services – who to contact More useful links.

* * * * * * * * *

company’s agent, if it has one, to act on its behalf for CIS and PAYE the company has kept all of its payment and deduction statements received from contractors. each payment statement shows the correct Unique Tax Reference (UTR) for the company and the correct amount of  payment and deductions

* *

told your contractors * you about setting up the company if you were originally engaged as a sole trader or partnership. It also highlights links to HMRC contacts and provides answers to common questions such as: ‘What information will I need to provide to have my repayment set off against other liability?’ ■



The view from


My role centres on developing the practice. This begins with identifying our strengths and weaknesses, and using this understanding as the basis to develop and maintain a strong public image. I recognise the need to involve ourselves in professional discussion groups, in the chamber of commerce and with local community groups. We have a very competent staff with specialised skillsets. It is important our clients are aware of these competencies, as well as the skillsets of the partners. Potential clients need to be aware of the services we offer. What’s changing in our business at the moment is Ireland has gone through the deepest recession since the Great Depression of the 1930s. As a result, we’ve begun to focus a lot more on making sure potential clients are aware of the value in our ACCA quality assurance mark, so that we can be a beacon of light going forward and not merely a compliance agent. Our professional qualifications, together with our years of experience, set us apart from the non-qualified practioner, and my focus is on getting this message out there as clearly as possible. Our greatest challenge this year is to be on top of cashflow management for clients. As ever, ‘cash is king’. Second, from a compliance agent point of view,

we expect compliance deadlines to be moved forward, so we need to get our planning right so as to adjust for this and to ensure clients continue to get a quality service. The most important thing I have learned over the last few years is that my staff are my future. We need to invest in them and build their skillsets. We need to trust them with clients and yet maintain control. I am sometimes reminded of the Oliver Goldsmith poem, The Village Schoolmaster – that one small head could carry all he knew. The professional accountant in practice accepts that he or she can’t be an expert in everything. More and more clients expect their accountant to be the answer to all questions in terms of business planning, tax heads, cashflow management, auditing and compliance. Our role is something like that of a GP, and we should be prepared to bring in consultants and expertise in specific fields as and when required. When I’m not working I like to play tennis. I also swim a bit, play golf badly and go to rugby and hurling matches. I am involved in the local chamber of commerce and discussion groups, and enjoy a pint on a Friday night. But, mostly, my children are my life and any time with them is time in heaven. ■

SNAPSHOT: PAY AND FILE CHANGE? Revenue has consulted representative organisations on a range of proposed changes to its pay and file tax deadline. The proposals are: Move the pay and file date to 30 June; Move the pay and file date to September; Move the date to September, but introduce an arrangement to allow taxpayers to mandate from state payments such as the single farm payment. The change sets out to bring certainty to the state finances, but ACCA told Revenue, in a submission on the matter, that the proposed options will not achieve this objective and that the preferred option is better forecasting techniques, rather than a date change. The Revenue’s options lack an implementation plan and could not be considered until such a plan is published. ACCA has consistently called for tax to be ‘easier to pay and not just easier to collect’. All of the options in the consultation make tax more difficult to pay and to collect. The proposals are also unsympathetic to the taxpayer and tax practitioner, as they will incur undue and unnecessary cost and inconvenience. Revenue took consultation submissions on board and has decided to defer the decision.

* * *




Getting into shape Continuing their series on building a sustainable and successful practice, Andrew Jenner and Phil Shohet look at developing more effective financial management Sound financial management is essential to underpin the stability and long-term success of any accountancy practice, as without it any firm can fail. There are a number of building blocks: deciding whom of the partners should be responsible for financial management; reviewing key performance indicators and financial measurement; reporting what matters; ensuring cash is king; and benchmarking profitability. All this requires getting partner disciplines into shape, organising operations and getting the best out of people. With limited top-line growth there is an added imperative to improve the profit line and how this can be grown,

Keep it simple It follows that firms should keep financial reporting as simple as possible and focus on clarity and accuracy. Reporting in many practices is either too simple or is over-complicated, but to test the effectiveness of each report partners should ask simple questions: Does this report tell us what we need to know about what is happening or is likely to happen in our business and indicate what action we should take? If not, then why do we produce it? Do we ever use it? Which reports that should be vital to our business are not being produced? A key case in point is assessment of working capital levels, which should

* * * *

▌▌▌PARTNERS CANNOT ARGUE: ‘I DON’T DO FINANCE’; THEY NEED TO HAVE A FAR BETTER UNDERSTANDING OF WHICH LEVERS TO PULL concentrating on improvements to efficiency, client management, client quality and best use of time. Partners cannot argue: ‘I don’t do finance’; they need to have a far better understanding of which levers to pull to drive the firm’s financial results. Partners concentrate primarily on service to the client and making sure that the end product is delivered satisfactorily and produces an acceptable fee. But in terms of their own business they must also focus on the internal structures, checks and balances that allow them to do this. Financial performance requires measuring and reporting on what matters, and imparting clear and accurate knowledge of what is happening or is likely to happen. Without this there can be no valid analysis, and appropriate solutions cannot be devised to ensure remedial action is taken. Decisions should be made based on known facts and not on assumptions.


be calculated based on what is needed to finance best-practice levels of work in progress and debtors. Within the accountancy profession, work in progress (WIP) and debtor days are too high, with a median of 120 days. Why are partners satisfied with this? Why not aim for 90 days or fewer? Partners’ capital should not be used to support financial underperformance. WIP is a risk factor and procedures to manage the situation will need

extending as far as possible through all the service lines. Job budgets are fundamental – agreement should be made with clients for monthly or interim billing, and any variation in the fee should be agreed with the client before invoicing. Aged WIP should be monitored promptly to ensure meeting realistic and achievable targets. If terms of business are not agreed and recorded at this stage then it is likely that there will be a cash management problem throughout the client relationship, which may then impact on the client relationship itself. Partners and other fee earners should have procedures in place to carry out client vetting/credit checks, agree credit limits, agree payments on account, agree interim billing and frequency of billing, agree payment terms and ensure that all of these are incorporated into client engagement letters. Debtor management requires similar disciplines: monitoring the debtor age profile, reviewing debtors to ascertain whether they will be paid, ensuring partners speak to clients about payment, applying the firm’s creditcontrol systems effectively and agreeing partner cash collection targets. In fact, optimising cash management means that managing partners will have answered two key questions: What is our firm’s current working capital requirement? How much less would this be if  we were more effective at cash management?

* *

KEY QUESTIONS FOR MANAGING PARTNERS we measure the financial performance of each service line and * Do department of our firm? not, how should we go about it? * If Which parts of our firm generate good cashflow or soak up cash? * How much working capital do we really need? * Do we know how much profit each service line is making? * If not performing, will this part of the firm ever be profitable? If not, * then why do we keep it? * Can we assess the profitability of our services to our clients?



at around 35%-40% of turnover – and control of time and productivity is still fundamental, even where firms have ‘fixed fees’. If work is increasing, then partners should not immediately seek to take on more staff, as the likelihood is that within the firm there will be existing capacity to do the work and improve staff utilisation levels to 80%. While partner chargeable hours will vary depending on the size of firm and individual role, for the sole practitioner – who will undertake work, manage the business, be the key marketeer and the interface with clients – the expectation would still be around 50% chargeable. When all is said and done, the success or failure of financial control falls onto the partners. They must be fully accountable to do whatever is required to be compliant. This is the real challenge if accountancy firms are to achieve a higher level of financial performance. ■

Maintain sanity Cash is sanity and the managing partner will check that the firm is capable of consistently keeping within its banking arrangements. He does not want a cash call on partners at any stage, but does wish to make distributions from last year’s profits – and pay the tax bill! Many firms and partners compound their profitability problems firstly by discounting prices, then discounting further by not fully recording all their chargeable time, and then triple discounting by writing off time when billing. The cumulative effect on profitability can be a disaster. A simple test is to ask (and not be surprised by the results!):


By how much would fees increase and profits grow if charge rates were increased by, say, £10 per hour across the board, and that rate increase was recovered when billing? By how much would fees grow if each fee earner recorded an additional 30 minutes chargeable time per day? By how much would fees increase if the billing write-offs were reduced by 50%? The majority of client work is recurring and can be planned on a 12-month cycle. Efficient work planning and fast turnaround allows prompt billing and collection. Time is still the most precious resource – professional staff costs being the largest single overhead

Andrew Jenner FCCA and Phil Shohet FCCA are directors, Kato Consultancy FOR MORE INFORMATION:


‘Supercharge your firm’, November/December 2013:


‘Strategy for success’, October 2013: ‘Time for a change’, September 2013: Kato Consultancy:


acca careers 2014 RECRUITMENT MARKET


The global recruitment market is a mixed bag. For many looking to get on or move up the ladder, macroeconomic conditions will continue to shape a tight, competitive environment. Yet there is a continued scramble for talented candidates, with many employers bemoaning a lack of people with the desired communication skills, commercial awareness and ability to think strategically. Use your ACCA Qualification to set yourself apart, expand your skill-set, network, become a social media maverick. Just look at all the jobs and companies recruiting through ACCA Careers – ACCA members are in demand and 2014

It’s no surprise the most in demand people on ACCA Careers are the hardest to find – members, senior professionals, often called ‘passive jobseekers’, a slightly contradictory term suggesting opportunism over necessity.

Neil Johnson Editor, ACCA Careers

Employability This is understandable; the status of membership means, for many, opportunity comes knocking. The number of students registered on ACCA Careers outweighs members by over 3 to 1, while jobs listed on the site for members outweighs those for students by over 4 to 1.

Opportunities Since launch, ACCA Careers has posted in excess of 18,700 jobs to a talent pool of 11,400 members. This means that for every member

MeMBers IN BUsINess

registered on ACCA Careers, we’ve provided 1.6 jobs – a very favourable ratio, thankfully inconsistent with the wider labour market.

Practice and industry Also interesting is the split between the popular sectors and the sectors actually hiring. Unsurprisingly accounting practices are the biggest recruiters and also the most popular sector among ACCA candidates. Beyond practice, the biggest opportunities lay in the retail, financial services, manufacturing, banking and technology sectors. While the sectors being sought by members are heavily skewed towards finance and banking. The opportunities available to members on ACCA Careers are only growing and the variety of employers and recruiters makes it a unique resource for your career.


WHaT recrUITers WaNT

Visit ACCA Careers’ new Post-Graduate portal. Why? Because ‘the prestigious degree is your key for a career switch, a top management position and 100% salary increase on average,’ according to the FT in 2013.

PsYcHOMeTrIc TesTING: HOW WOULD YOU Fare? Psychometric tests are designed to measure aspects of your mental ability or your personality and are increasingly used as part of the recruitment or selection process. Visit to find out more.

TesTIMONIaL “I came across AIMS on the ACCA website and attended an introductory meeting which was very informative and that led me set up my own practice using their model. The initial training given to all accountants is an important tool and helped me to enhance the technical knowledge and an overall development. I can proudly say that I am an entrepreneur, who is in full control of my career and quality of life. Thanks to AIMS. It just works!”

TO aDVerTIse caLL THe saLes TeaM ON +44 (0) 20 7902 1210 TO aPPLY FOr aNY OF THe POsITIONs BeLOW PLease VIsIT WWW.accacareers.cOM Or scaN THe qr cODe



This new role is critical to the continuing financial success of the business, acting as the main financial lead on Network revenues, cash collection and commercial finance support to the Strategic and Trading Directors.

Our client is a leading global Financial Services organization, they are currently seeking an individual to join the organization as a Complex Pricing Manager at AVP level.

IreLaND | reF: JO-1310-272821

DUBLIN | reF: JM-J1230



The successful applicant will be responsible for the efficient and effective operation of the capital asset management function (ÂŁ33.1 million 2013/2014) of the Falkland Islands Government a large multi-disciplinary organisation.

As a key member of the GDTA (Global Distribution Support & Transfer Agency) product team, the key responsibilities of the role holder include product development and maintaining the GDTA product proposition.

FaLkLaND IsLaNDs | reF: FIG_ca001

DUBLIN | reF: JM-J1181

Fs aUDIT seMI-seNIOr

accOUNTs receIVaBLe

An exciting opportunity has arisen within an international accountancy firm in Dublin City Centre. The role of audit semi-senior will offer excellent exposure to a strong client base in predominantly in the asset management and financial services industries.

My Client is looking to recruit an experienced Accounts Receivable Specialist for a new opportunity within their busy AR department. This is an ideal position for a candidate with aspirations of career progression.

DUBLIN | reF: 908412_1384530703

DUBLIN | reF: JO-1311-275393

cOMMercIaL aNaLYsT

cOLLaTeraL MaNaGer aVP

The position liaises with sales, marketing and supply chain management and provides analysis, commentary and opinion on commercial decisions ranging from pricing, through ROI on promotions to product launches.

A leading global bank, is currently seeking a Collateral Manager to join the organisation at AVP level.

DUBLIN | reF: sOB11/13_1384857873

DUBLIN | reF: JM-J1205



Making a difference ACCA Ireland held the Leinster Members’ Network chairman’s Christmas lunch to raise money for the Make-a-Wish Foundation Brian Carey, chairman of the Leinster Members’ Network, hosted a business lunch for 370 members and guests at the Four Seasons Hotel in Dublin on Friday 6 December. Members and guests filled the main ballroom in the luxury venue. Guest speaker Joe Schmidt, head coach of the Irish Rugby Football Union (IRFU), spoke of the current strategy for the Ireland team in advance of the Six Nations. He answered a number of questions from the audience, many of which focused on Ireland’s near miss in the New Zealand game recently. He gave a good insight into the level of

training and teamwork it takes to reach the top of any field. Over €9,000 was raised for the Make-a-Wish Foundation – a national charity which supports seriously ill children and their siblings.


Joe Schmidt, head coach IRFU (left) and Brian Carey, chairman of the Leinster Members’ Network


Some 370 people attended the event

UPCOMING EVENTS ACCA Ireland runs a programme of events across the country featuring high-profile speakers and offering networking and CPD opportunities


6 February 18.15 – 20.15 Leinster Members’ Network Various Speakers Hilton Hotel, Charlemont Place Two CPD Units


(Left to right) Aidan Clifford, ACCA, Conor O’Leary, IBM and Ronan O’Connell, IBM

MIND THE GAP ACCA Ireland ran a CPD event at the IBM Technology Campus in Mulhuddart, Dublin, on 21 November. Over 170 members and guests attended the event, which was filled to capacity, to hear the speakers discuss subjects including an introduction to Irish GAP, the power of big data and smarter commerce.



5 February 18.00 – 20.00 Connaught Members’ Network Liam Kenny, Finbar O’Connell, Frank Walsh, Grant Thornton Menlo Park Hotel Two CPD Units



ACCA partnership with Mercia Luke Brockie looks at the breadth of training on offer to members – from audit workshops to CPD conferences – through ACCA’s partnership with Mercia In recent months, we have strengthened our relationship with Mercia in Ireland to provide practitioners with a wider choice of CPD speakers and topics. Members will be very familiar with the Mercia lecturing team as they have presented on ACCA courses for many years. Headed by Brian Mailey, managing director and Brendan Howard, director, Mercia is Ireland’s longest established training organisation for the accountancy profession and has been providing training and compliance services throughout Ireland since 1995. Mercia consultants visit up to 500 practices annually,

‘MANY THANKS FOR THE COURSE; IT WAS WITHOUT DOUBT THE BEST AND THE MOST USEFUL CPD COURSE I HAVE BEEN ON FOR A LONG NUMBER OF YEARS.’ LIAM SOMERVILLE, PARTNER, GANNON KIRWAN SOMERVILLE, DUN LAOGHAIRE to carry out compliance reviews and advise on compliance and technical issues. Commenting on the partnership, Mercia’s director of training, Brendan Howard FCCA, a well-known CPD lecturer on the ACCA circuit, said: ‘Mercia is thrilled to be associated with ACCA in this way and looks forward to a continuation of the arrangement for many years to come. As a member of ACCA myself, I always

enjoy the opportunity to meet with other members, some of whom I first met at courses as far back as the early 1990s.’

included two-day audit workshops in Dublin and Limerick, as well as fullday CPD conferences in Limerick, Cork and Belfast.



ACCA is planning to present more courses in 2014 in association with Mercia and we look forward to continuing to develop links between both organisations throughout 2014 and beyond. ■ Luke Brockie is head of members services, ACCA  Ireland

SET YOURSELF NEW LEARNING GOALS FOR 2014 January is a great time to reflect on your past year’s CPD activity. Did you find yourself cramming your development into the last few months? It could be useful to plan earlier this year if you are to gain the most value from your CPD activity. As a new year begins, why not set yourself new learning or career goals for 2014? Remember, CPD is not just courses and events; there are plenty of other methods for acquiring learning that count towards your CPD such as work-based or e-learning, being a workplace mentor to an ACCA trainee and even reading publications or technical articles. To access a wide range of learning and development opportunities, visit My Development ( and start planning your CPD. If you are a new ACCA member, use ACCA’s interactive coaching tool to learn more about CPD; you’ll find it at For members who submitted an Option B declaration in 2013, the i-guide also offers guidance on how to rectify a CPD shortfall and convert it into an Option A declaration. If you have not yet made your 2013 CPD declaration, you should do so immediately.




Taking the long view ACCA’s recent International Assembly turned its attention to the future, and how the finance team can show leadership and add value to their organisations ACCA’s 2013 International Assembly, gathering finance leaders from around the world, looked into the future while also focusing on current challenges. With the theme of ‘Beyond 2015’, ACCA leaders and conference delegates considered how accountants can show financial leadership and deliver high performance within their organisations.

‘In an increasingly global, competitive and connected world, we have to be ready to take opportunities and face the challenges presented by a new business landscape,’ Helen Brand, ACCA chief executive, told delegates. She stressed ACCA’s focus on delivering value – to members, students, employers, learning partners and society –

while also highlighting ACCA’s recent successes in growing its membership and maintaining healthy finances. ‘Our reputation and influence continue to grow,’ Brand said. ‘For ACCA, the connections we make with employers, policymakers, governments and national bodies around the world mean we can and do influence outcomes.’

ETHICS ‘A key role for today’s accountants is to act as a guardian of integrity in their businesses. By showing ethical leadership and embodying the values of integrity, objectivity and professional care, accountants help maintain and strengthen the reputation of the Martin Turner, ACCA president business they work for, while at the same time protecting the public interest. ‘Regulation, codes of conduct and compliance policies may not be enough in themselves to create a climate of ethical and responsible behaviour. Given that all important business decisions are ultimately made by people rather than systems, behavioural factors are crucial in determining how any business acts. ‘So while it is essential to have an ethical culture led from the top, it is also important to have people in positions of authority, especially in the finance function, who can be relied on to make decisions in the right way and for the right reasons.’


She also highlighted ACCA’s complete finance professional concept, launched in 2013 and based on research into the competencies that business leaders require from aspiring finance professionals. ‘We are committed to ensuring that the ACCA Qualification will continue to comprehensively cover the skills and behaviours required by organisations in all sectors,’ she said. Subsequent conference sessions focused on the future: opportunities and threats for ACCA and the accountancy profession, ACCA’s draft strategy to 2020 and its growth ambitions. The future of the ACCA Qualification was also considered, as well as the value of ACCA membership.

Four lines of sight During a joint session with ACCA Council, finance leaders shared their views on the challenges CFOs face when striving to provide finance leadership in their organisations and create high-performing finance teams. Jeff Thomson, president and CEO of IMA (Institute of Management Accountants), ACCA’s


global strategic partner, explained that as CFOs evolve from ‘bean counting to bean sprouting’, they need wider vision. ‘In their expanded role in strategy and sustainable growth, the CFO’s line of sight is fourfold: hindsight, oversight, insight and foresight.’ Hindsight involves ‘looking back to learn from history’, to point the organisation in the right direction for achieving growth, Thomson explained. Oversight is ‘a traditional CFO role in terms of financial performance and resource monitoring and ensuring a healthy financial profile. ‘Insight is where we begin to move into the expanded skillset that professional associations must help address. Business partnering starts where business analytics takes over. Reporting the numbers is vitally important, but turning information into insight and ultimately intelligence is what often distinguishes good companies from great companies.’ Finally, foresight is where the CFO plays a leading role in helping to shape a successful future for their organisation, through developing a ‘curious and adaptable mindset’.

Virtual teams Teuta Bakalli, former CFO of financial services business Pepper Europe, identified one particular trend that has changed the skills needed by finance professionals – the development of shared and outsourced services. ‘Being able to manage virtual teams has become extremely important,’ she said. ‘Managing a team when you are not in the same location requires a different skillset. Technical skills are always necessary, but outsourcing creates new


PUBLIC SECTOR SKILLS ‘Public sector professionals face a range of challenges, and need to develop and exercise financial leadership skills. ‘ACCA-commissioned research on how professional accountants were responding to the challenges of austerity found an improved understanding of the cost basis of services and more challenge of the underpinning costs. Support services had been stripped out through outsourcing and shared services. Multi-year budgeting was commonplace, and there was greater emphasis on financial modelling and improved analytical approaches. ‘These are notable achievements, but the research also Anthony Harbinson, highlighted areas for future development. It identified a ACCA deputy president lack of long-term vision. There is a continued focus on making blanket cost reductions across all services, whereas there could be greater prioritisation. There is also a perceived lack of strategic management skills. ‘Given these findings, it is increasingly important that we as a professional accountancy body work closely with public sector employers and members to support skills development.’

challenges in terms of how you integrate your team when people are based in different time zones, with different language barriers.’ Effective communication is the only ‘silver bullet’ for managing such situations, she said.

New skills To ensure the finance team adds value, organisations are recognising the need to develop new finance capabilities. ‘We have seen a much greater focus on ensuring finance professionals have access

to the right development opportunities in many businesses, to coaching, mentoring and experimental learning programmes,’ said Yvonne Yang, finance director for Asia Pacific at MSC Software. She added: ‘And we have seen a better understanding of the importance of developing transparent career paths across the organisation so that professional accountants understand how they can develop their careers and the necessary skills and capabilities they will need.’

This is why diversity in its broadest sense is becoming much more important, Yang pointed out. ‘Globalisation is causing increasing complexity of business operations and in particular of the finance function, which has to support businesses as they enter emerging markets. ‘Tapping into local knowledge and dealing with many local regulations requires diversity of understanding and experience in finance.’ ■ Sarah Perrin, journalist


Alexandra Chin, ACCA vice president

‘Every CFO I have ever spoken to essentially has three goals for their finance function: they want to reduce cost and improve finance processing efficiency, they want to ensure appropriate control and compliance, and they want finance to be a more effective partner to the business to help drive and create value. ‘So the questions they have are around finance capabilities. How do they develop the skills and capabilities in their people to deliver this in a global environment? How do they bring in people with the necessary diversity of skills and experiences? How do they bring in new ways of thinking?’




INSIDE ACCA 64 International Assembly 63 News Partnership with Mercia; and CPD 62 ACCA Ireland Leinster lunch 18 ACCA president


Percentage of ACCA members who expect to achieve their career ambitions within the next four years, according to an online survey of 4,000 members around the world. See page 43.

ABOUT ACCA ACCA is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We support our 162,000 members and 428,000 students throughout their careers, providing services through a network of  89 offices and active centres.


Honorary membership Former CEO of IFAC and Harvard lecturer awarded honorary membership of ACCA for their contributions to profession Two giants of the accountancy profession have been awarded honorary membership of ACCA. Ian Ball, former CEO of the International Federation of Accountants (IFAC) and Professor Bob Eccles, senior lecturer at Harvard Business School, were presented with their honorary memberships at a joint ACCA Council and International Assembly dinner at the Royal Society of Arts in London. ACCA president Martin Turner said that Ball gained the honour for his contribution to the development of the global profession and championing the cause of improving financial management in the public sector.


Bob Eccles (left) helped to develop integrated reporting while Ian Ball (right) has championed public sector financial improvements Eccles gained his award for his contribution to developing the thinking behind integrated reporting. Turner said: ‘Both have made significant contributions to the

development of the profession around the world. They have progressed and promoted the profession, while also forging ahead with new thinking on accountancy and business.’

OPTIMISTS FINALLY OUTNUMBER PESSIMISTS Confidence in the global economic recovery among finance professionals is the strongest it has ever been since ACCA began its Global Economic Conditions Survey of members in 2009. More than half (53%) the 2,000 respondents to the 2013 Q3 survey believe conditions are improving or about to do so, up from 47% in Q2. Those expecting stagnation or deterioration fell from 50% in Q2 to 43% in Q3. It is the first time in the history of the survey that optimists have outnumbered pessimists. Global business confidence also continued to rise, albeit at a slower pace, with 28% saying they were more confident about the prospects of their own businesses than they had been three months earlier, up from 26% in Q2. The survey is jointly carried out by ACCA and IMA (Institute of Management Accountants). More information at

ACCA SYLLABUS ENHANCED Improvements have been made to the ACCA Qualification to meet the needs of employers by updating the content of the global syllabus and ensuring newly qualified members have the skills and knowledge to be complete finance professionals. A wide range of changes have been made across the syllabus in such key areas as professionalism and ethics, strategy and innovation, financial management, corporate reporting, sustainable management accounting and audit. More details at


THE NEW 129 G/KM XF R-SPORT. It’s natural to think that the Jaguar XF R-Sport shouldn’t be on your company car list. Think again. With prices from £33,995* on the road, or £226.27 per month** in BIK for company car drivers paying higher rate tax, isn’t it time you put the XF R-Sport at the top of your list? For more information, contact our Business Sales Specialist team on 0845 366 1574. WWW.JAGUAR.CO.UK/BUSINESS


Official fuel economy figures for the XF 14MY range in MPG (l/100km): Urban 16.7–48.7 (16.9–5.8). Extra Urban 32.8–64.2 (8.6–4.4). Combined 24.4–57.7 (11.6–4.9). CO2 Emissions 270–129 g/km. The figures provided are as a result of official manufacturer’s tests in accordance with EU legislation. A vehicle’s actual fuel consumption may differ from that achieved in such tests and these figures are for comparative purposes only. *On the road price is the manufacturer’s Recommended Retail Price, plus First Registration Fee and Delivery Pack. £33,995 refers to XF 2.2 163PS R-Sport saloon. All details are correct at time of publication and are subject to change without notice. **Based on an XF 2.2 163PS R-Sport with no options for a 40% tax payer. Vehicle shown fitted with 18” dealer fit accessory wheels.


Get verifiable cpd units by reading technical articles






AB IE – January 2014