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ACCOUNTING AND BUSINESS IRELAND 06/2013

BUILDING BOON THE IRISHWOMAN SUPPORTING ACCENTURE’S GEOGRAPHIC SERVICES

RUFFLING FEATHERS TRANSACTION TAX TROUBLES

CLOUDED JUDGMENT ON THE RISE DYNAMIC ADVISER TALKING STRATEGY TOP OF THE CLASS 21ST CENTURY SUCCESSS


reserved. reserved. All rights All rights Accenture. Accenture. Š2013 Š2013


3

Editor’s choice

With the Dancing House, Prague (see cover) part of her remit, Pauline Archbold FCCA talks to AB about her global role supporting Accenture’s geographic services

STEPPING FROM THE SHADOWS Few would dispute the fact that we live in a fast-paced world. We expect progress, we expect it quickly and we expect it relayed to us immediately. Yet, many of the articles in this month’s issue of AB Ireland suggest this idea of progress is, in some cases, something of an illusion. Our decision-making processes are, more often than not, advancing at a painfully slow pace, still largely informed by the sense that we are living in the aftermath of 2008. Whether it’s the EU’s proposed financial transaction tax, the reform of audit or the introduction of personal insolvency legislation, there can be no doubt what shadow darkens the mood of national and global finance. All well and good until we remind ourselves that half a decade has now passed since the collapse of Lehman Brothers. In similar amounts of time, Europe has endured world wars, and rebuilt itself from them. With rumblings from the IFSC that a culture of overregulation is threatening its future, if not about to fundamentally undermine it, the time for a revisioning is fast approaching. There is no doubt that action still needs to be taken on many fronts, but so long as we do so with eyes fixed on the recent past, we will not move decisively from it. Donal Nugent, donal.nugent@accaglobal.com

DIRECTIVE CHANGE The repercussions of the proposed reporting amendments from Brussels Page 18

CLOUDED JUDGMENT A new report shows adoption of the cloud is on the rise in Irish business Page 51

RESEARCH AND INSIGHTS APP

The new release of our app explores finance function transformation, in particular shared services and outsourcing. To download it, visit www.accaglobal.com/riapp, or just search for ‘ACCA Insights’ in the iTunes App Store

BIG AMBITIONS?

For your next move, check out www. accacareers.ie


AB IRELAND EDITION CONTENTS JUNE 2013 VOLUME 4 ISSUE 6 Ireland editor Donal Nugent donal.nugent@accaglobal.com +353 (0)1 289 3305 Editor-in-chief Chris Quick chris.quick@accaglobal.com +44 (0) 20 7059 5966 Design manager Jackie Dollar jackie.dollar@accaglobal.com +44 (0) 20 7059 5620 Designers Robert Mills, Barry Sheehan Production manager Ciaran Brougham ciaran.brougham@accaglobal.com +353 (0) 1 289 3305 Advertising John Sheehan john@ifpmedia.com +353 (0) 1 289 3305 Bryan Beasley bryan.beasley@accaglobal.com +353 (0) 1 289 3305 London advertising Richard McEvoy rmcevoy@educate-direct.com +44 (0)20 7902 1221 Head of publishing Adam Williams adam.williams@accaglobal.com +44 (0) 20 7059 5601 Printing Boylan Print Group Pictures Corbis ACCA President Barry Cooper FCCA Deputy president Martin Turner FCCA Vice-president Anthony Harbinson FCCA Chief executive Helen Brand OBE 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 info@accaglobal.com 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 2013

Accounting and Business. No part of this publication may be reproduced, stored or distributed without the express written permission of ACCA. Accounting and Business Ireland is published by IFP Media, 31 Deansgrange Road, Blackrock, Co Dublin, Ireland +353 (0)1 289 3305 www.ifpmedia.com

12 Geography class Pauline Archbold talks about her role as head of geographic services with Accenture 16 Ruffling feathers Could the EU’s controversial financial transaction tax trigger a credit crunch?

ACCA Ireland 9 Leeson Park Dublin 6 tel: +353 (0)1 447 5678 www.accaglobal.com/ireland

Features

Audit period July 2011 to June 2012 148,106

18 Directive change The repercussions of the proposed reporting amendments from Brussels


Worldwide

There are six different versions of Accounting and Business: China, Ireland, International, Malaysia, Singapore and UK. See them all at www.accaglobal.com/ab

Regulars BRIEFING 06 News in pictures A different view of recent headlines 08 News in graphics We show a story as well as tell it using innovative graphs 10 News round-up A digest of all the latest news and developments

VIEWPOINT 21 Perfect pairing Why the alliance between a small business and its accountant is good for both 22 Outlook for audit reform The challenge audit reform presents to the Irish presidency of the EU

TECHNICAL

YOUR CAREER

33 NI notes Changes and updates of relevance to Northern Ireland practitioners

54 E-learning is flexi-learning A flexible, convenient and cost-effective way to gain knowledge

34 Technically speaking Aidan Clifford rounds up the changes accountants need to be aware of

56 Dealing with discord Confronting conflict in the workplace

36 Becoming a PIP The route to becoming a personal insolvency practitioner 40 Negotiating with creditors on behalf of distressed debtors A difficult balancing act

58 Bridging the gap Educational opportunities of interest 60 Top of the class Being a successful finance professional in the 21st century

46 CPD Equity accounting

Your sector

51 Clouded judgment Adoption of the cloud is on the rise in Irish business

23 PRACTICE

43 CPD Theoretically speaking

23 The view from Dan McInerney FCCA 24 Dynamic adviser Maria Pinelli Ernst & Young’s global vice chair of strategic growth markets

29 PUBLIC SECTOR 29 The view from Sammy Wilson MP and MLA 30 Lessons from Pakistan How corruption has damaged a poverty alleviation scheme

CPD

Accounting and Business is a rich source of CPD. If you read it to keep yourself up to date, it will contribute to your non-verifiable CPD. If you read an article, learn something new and apply that learning in some way, it will contribute to your verifiable CPD. Each month, we also publish an article or two with related questions to answer. If they are relevant to your development needs, they can also contribute to your verifiable CPD. One hour of learning equates to one unit of CPD. For more, go to www.accaglobal.com/members/cpd

ACCA NEWS 63 Diary 63 News


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News in pictures

01

Celtic drumming fails to lift Ireland’s Ryan Dolan from last place in the 2013 Eurovision final

02

Local communities will be asked to contribute up to half of the cost of repairs to their roads as part of a government scheme

03

Sir Alex Ferguson is retiring after 26 years managing Manchester United Football Club. This year the English club became the first sports team in the world to be valued at US$3bn


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04

Representatives from 55 Irishbased companies take part in a two-day business mission to London in May, the largest ever organised by Dublin Chamber of Commerce

05

Apple has raised US$17bn in the biggest corporate bond sale ever. The move will help the company avoid the tax costs of bringing its overseas cash back to the US, say commentators

06

An â‚Ź80m biopic of Irish king Brian Boru is announced, with filming mooted to take place at the Cliffs of Moher among other locations

07

Ryanair shares jumps sharply after it reports after-tax profits of â‚Ź569m for the year to the end of March


News in graphics

8 YOUNG GUNS

A recent BDO survey of young Irish accounting graduates captures a generation that remains focused on success in the face of adversity

CTATIONS GREAT EXPE ur salary

e yo What are/weronce qualified ns io at ct expe 5,000 £40,001 – £4 0,000 us £25,000 – £3 pl £45,001 5,000 £30,001 – £3 Other 0 0,00 £35,001 – £4 ms ing mediu the follow effective t Which of s o nd the m do you fi hing from jobs? rc a e s n e wh obs.ie) g. www.IrishJ Job boards (e ) (eg. Facebook Social media es ci en ag Recruitment th Word of mou s er ap Newsp

Other

Would you be willing to relocate for the right role? Yes

No to relocation

How long would you be willing to work on contract to gather good experience? Up to 6 months Up to 12 months Up to 18 months

Only relocate nationally

Up to 24 months 24 months plus


9 DIGITAL CONVERSATIONS AND THE C-SUITE

PwC’s 5th Annual Digital IQ Survey shows that strong executive leadership and collaboration are crucial to building lasting value from information technology. The results show that those companies with strong relationships between the CIO and other C-suite members are four times as likely as those with less collaborative teams to be top performers (respondents who said they are in the top quartile of margin growth, revenue growth and innovation).

WHAT IS DIGITAL IQ?

KEY:

Digital IQ is a measure of how well companies understand the value of technology and weave it into the fabric of their organisation.

Yes No Don’t know

COLLABORATORS

Strong collaborators think differently and act differently and were often found to achieve stronger results than other respondents in the survey.

17% 16% 30% Public cloud infrastructure

24% 21% 37% Public cloud applications

39% 32% 45% 54% 47% 56% 35% 25% 31% Private Mobile Mobile cloud technologies technologies applications for employees for customers

46% 37%

39% 30%

Others 61% 51%

46% 37%

Strong collaborators

36% 24%

37% 29% 31% Social media for external comms

18%

32% 26% 33% Social media for internal comms

Asia Pacific

32%

Europe

43% 32%

Americas

59% 26% 16% Other

A strong collaborator’s roadmap links business and IT efforts. The study asked if a single, multi-year roadmap for the overall business strategy existed in the firms surveyed?

32% 30%

KEY:

75% 19% 5% Strong collaborators

37% 36% 43% Data mining and analysis

Strong collaborators are more likely to be investing in emerging technologies in areas like mobile, social, cloud and big data. Which of these technologies are you currently investing in?

KEY:

Americas Europe Asia Pacific More than 1,100 senior executives were surveyed in the PwC study. 48% are based in the Americas, 30% in Europe, and 22% in Asia Pacific. Visit http://tinyurl.com/aw7pqpu for the full survey.


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News round-up

FRIEL STAFFORD ALLIANCE

Friel Stafford Corporate Recovery has formed an alliance with the UK restructuring and recovery firm FRP Advisory. Commenting on the alliance, Jim Stafford, managing partner of Friel Stafford, said: ‘The Irish economy continues to restructure with both banks and companies seeking to recover value from more than a decade of investments in what was then an Emerald Tiger economy, which spilled over into the UK. Increasingly Friel Stafford’s recovery work involves significant elements of UK related investment restructuring and unwinding.’

YOUTH UNEMPLOYMENT

According to a United Nations’ agency report, youth unemployment in Ireland is significantly higher than the global average. This is especially striking, the report says, as the world average is fast approaching its record peak. It

also found that men were a third more likely to be unemployed than women in Ireland, while a mismatch between skills and available jobs is a growing trend, caused by over-education as well as under-education. The UN’s International Labour Organisation has warned the issue is set to increase for young people, with young people aged between 18 and 29 almost three times more likely to be unemployed than other adults.

CLOUD COVER

Over half of public and private organisations in Ireland have adopted cloud technology, where some of the software that the company uses is based on a server that can be accessed through the internet. Small businesses are increasingly using cloud computing to scale their companies, for email and document sharing as well as giving mobility to employees on new devices. The main reason for

Sajjad Karim MEP at a roundtable discussion hosted by ACCA USA in New York in April, at which audit regulation was debated

EU COMPROMISES ON MANDATORY AUDIT ROTATION

Under new controls proposed by the EU’s Legal Affairs Committee, 14 years would be the maximum term a firm could carry out the audit for a client. Under specified exemptions, firms would be able to undertake a client’s audit for up to 25 years. The European Commission had proposed a six-year audit rotation requirement. ‘Big Four only’ requirements in contracts would also be banned. The measure will need to be approved by the Council of Ministers to be adopted by the EU. ‘We need to win back the confidence of investors, who are looking for high-quality and independent auditing to give them the assurance that they need when investing in Europe’s companies,’ said Sajjad Karim MEP, who is responsible for the audit reform package. The compromise was welcomed by ACCA as achieving a ‘laudable balance’ between different interests. Sue Almond, ACCA’s technical director, said: ‘Future legislation needs to be workable for businesses while enhancing investors’ confidence.’

using cloud technology however, is that it is cost effective and Cathriona Hallahan FCCA, managing director of Microsoft Ireland, says that Ireland is in the perfect position to become a global hub for cloud technology (see full report page 51).

BUDGET TARGETS

IBEC has warned the Irish government that further tax increases are not the best way to deal with meeting this year’s €3.1bn budget target. Instead, it says that public sector pay cuts must continue to be on the to-do list. Chief economist at IBEC, Fergal O’Brien, said that the government must press ahead with public-sector expenditure reform, but taking more money from the economy was the wrong way to go about it. O’Brien also stated that the consumer has to see that there is an end in sight before they will start spending again.

GLANBIA JOBS

Glanbia Ingredients Ireland has announced that it will be creating 1,600 jobs directly and 450 jobs around the construction of its Belview dairy facility over the next five years. The facility, which will be located on the Kilkenny/ Waterford border, is to process more than 700,000m litres of milk and will produce 100,000 tonnes of dairy powders a year. Glanbia chairman, Liam Herlihy, said the investment was a significant vote of confidence in the future of Glanbia and Ireland’s dairy farmers. The plant will be entirely focused on export markets and will be supplying a range of nutritional powders to an increasing number of regions including the Middle East, Africa, Central America and Asia.

INSOLVENCY SERVICE

The government has launched its new personal insolvency service, designed to help overburdened borrowers to reach an agreement with their creditors. As reported in last month’s AB Ireland, the Insolvency Service of Ireland has also published guideline’s for reasonable expenditure. For a single working adult, living alone, the new guidelines suggest a monthly food allowance of


11

€247.04, while €125.97 is included in the guidelines for social inclusion and participation. However, the Irish Mortgage Holders Organisation has estimated that up to a third of the new insolvency debt deals for consumers are likely to fail. It believes Ireland will have a similar failure rate to Britain, which has had a collapse of 30 to 40% of insolvency arrangements.

TAX ONSLAUGHT ‘HITS GROWTH’ Economic growth could be constrained by reputational damage incurred by government criticisms of tax planning, a New York conference of tax advisers has been told. Frédéric Donnedieu de Vabres, chairman of Taxand, warned of the dangers of focusing on the immoral rather than the illegal. ‘This has led some people to believe that any sort of supply-chain planning is now a thing of the past,’ he said, adding that these attacks could backfire ‘by curtailing investment, thwarting growth and compressing innovation across the globe’. Robert N Lowe, CEO of conference host Alvarez & Marsal Taxand US, said that governments are increasingly interested in transfer pricing as a way of combating the ever increasing tax planning efforts being undertaken by multinationals.

PADDY POWER UP

Bookmaker Paddy Power is up 20% in revenue this year as a consequence of a 29% growth in online revenue and 8% growth in retail. The company has opened six new shops in Ireland and 17 new shops in the UK in the year to May.

DEFICIT TO RISE

The European Commission has increased its forecast for Ireland’s exchequer deficit for this year, partly due to the higher than expected cost of liquidating Irish Bank Resolution Corp. The deficit will now be 7.5% instead of the forecast 7.3%. The Commission expects the deficit to narrow to 4.3% next year as the government pushes on with austerity measures, and also predicts growth of 1.1% in the economy. As part of the liquidation of the bank, the Central Bank exchanged promissory notes previously held by IBRC for €25bn in Irish government bonds, which brought Ireland’s total outstanding government debt to €115.4bn.

IRELAND DROPS RENT

Ireland has dropped to 40th place in rankings for the most expensive markets for retailers to lease space. Ireland had been 15th most expensive in the world in the boom, but according to a new survey, it has improved in competitiveness since then. Rents are down more than 50% since 2007 according to the report by real-estate company CBRE.

SME LOANS INCREASE

Bank of Ireland says its loans to SMEs have increased by 25%, and it expects to comfortably beat its

government imposed lending targets of €4bn. Approval rates for loans are at about 85%, and, while lending has been up this year, Mark Cunningham, head of small business lending, said that demand for loans is still down.

INSURANCE MARKET CONTRACTS

The Irish insurance market continued to shink in the first quarter of 2013, according to insurance company FBD. However, the company added that its own business was performing slightly ahead of last year. While domestic demand has stabilised it says significant growth is unlikely in the short-term.

WORLDSPREADS SUES EY

Ernst & Young is being sued over its audits of Dublin-headquartered Worldspreads, which is being administered by KPMG. Jane Moriarty, special administrator of Worldspreads and restructuring partner at KPMG, said: ‘The appointment of administrators to Worldspreads followed the discovery of accounting irregularities… Following our initial review of this data and consultation with legal counsel, we

have decided to take action against the firm’s auditors to protect the position for clients and creditors.’ EY does not accept that it is liable for any losses suffered by Worldspreads or any related party and said it would ‘vigorously defend’ any proceedings. The firm added that an accurate audit is only possible if the auditor is ‘supplied with full, accurate and complete information’.

NON-FINANCIAL REPORTING BOOST The European Commission intends to amend two accounting directives to assist with greater non-financial disclosure by companies. The measures would affect about 18,000 businesses in the EU and improve reporting transparency on social and environmental issues. The move was welcomed by the International Integrated Reporting Council. Its chief executive, Paul Druckman, said: ‘The Commission’s proposals are an intelligent and logical milestone on the continuing journey towards integrated reporting as part of the evolution in corporate reporting globally.’


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Interview


13

GEOGRAPHY CLASS Pauline Archbold FCCA on how membership of ACCA set the groundwork for her role as global finance lead for Accenture’s geographic services

F

irst impressions count and never more so than when you step into the office of a service provider. Whether it’s a global organisation or something of a more boutique variety, the chances are that, if the company takes itself seriously at all, someone has put a great deal of thought into just what that experience will be like. For a global consulting firm, it goes without saying that the goal is to make it as meaningful as possible for clients and staff alike, with the emphasis not just on the look and feel of any individual building but on how they work collectively, across different markets and segments. In Accenture, responsibility for the financial planning and management of this task lies with Pauline Archbold FCCA, senior manager – global finance lead geographic services. ‘Geographic services provides the infrastructure support to the organisation,’ Archbold explains. ‘The team looks after the internal mechanics of the experience of visiting or working in an Accenture building; everything from the office space, lighting and technology, to the images and branding you see, right down to the seats you sit in. My job then is to collaborate with each of the different areas, to ensure that we have the financial capacity to make and maintain the investment, as well as ensuring we do this while operating within our corporate governance model.’ Accenture has offices in over 50 countries around the world, making it all the more impressive that the global finance function is handled by a relatively small team of seven in Dublin, and an additional three in India, where Accenture has seen a surge in growth over the last number of years. While

there’s no emblematic office that sets the standard that others follow, Archbold points to Dancing House in Prague as one of the stand-out buildings in the firm’s portfolio. ‘We lease the building so we can’t take credit for the architecture but it has great appeal because it is obviously such a superb building. More generally, there are a number of different factors that come into play when investing in the portfolio, including location, market and the environment, as well as the role of the different workforces. Cost, of course, is always a key consideration, and our job is to act as the financial filter before any decisions are made.’

Governance Accenture’s presence in Dublin spreads over two office spaces, Grand Canal Square and Grand Canal Plaza, similarly named but in separate parts of the city. Geographic services is based in the older plaza building, which is also the location for Accenture’s shared services centre. ‘We’ve certainly grown over the last couple of years and have seen expansion both within this building and in our consulting practice. Grand Canal Plaza, in particular, has grown and flourished over that time as the core of our shared services,’ she notes. The remit of geographic services goes far beyond managing space, however, and incorporates technology support, personnel mobility and local marketing in its brief. Archbold’s role is to give each its due resources. ‘We set the governance model at the global level and then work with the local teams to comply with that directive, taking into consideration any local requirements. It takes a lot of focus but I’m very good at multitasking and at working with a number of moving

pieces,’ she says. ‘There’s always going to be an issue or a new model that has to be put in place, so while a good deal of your time would be spent managing the work place or real estate, everything else has to be kept in view as well.’

Structure Joining the team in 2008, Archbold has helped steer it through a rapidly changing economic environment where shifting priorities are a given. ‘When I joined in 2008, HR and finance were part of the Geographic Services group and they have now moved to become their own corporate functions. That has given us the ability to focus more on the core, what you would call infrastructure support, whether it’s the workplace or technology.’ As the team has been tasked with the challenge of delivering greater efficiencies, what’s evolved notably over this period, she adds, is the ability ‘to stand back, evaluate what we do and ask whether there is a better way of doing it. We’re always looking at how we can organise our teams most effectively in a location, to get the best from our people as well as the best from our investment.’ In line with that, geographic services has become much more involved in strategic planning. ‘We are very heavily involved in the question of where we are going as an organisation, where we need to be and being part of the solution.’ Advances in IT play a role in the drive for efficiency and Archbold points to the progress of voice over IP as an example of the kinds of change that can meaningfully impact on an organisation’s bottom line. ‘Traditional landlines obviously cost a lot of money, so we implemented


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Interview

The CV 2002

Joins ESG Reinsurance Ireland as a financial accountant.

2006

Becomes a member of ACCA.

2006

Joins Accenture as a global finance specialist.

2008

Appointed global finance manager geographic services.

2012

Becomes senior manager – global finance lead geographic services.

voice over IP through our internal Microsoft system. Now, every time you have a group meeting it’s through Office Communicator. So these are areas where we see efficiencies being achieved, leveraging the technology that we would then obviously promote to clients as well.’ The use of video conferencing as an alternative to face-to-face meetings has also been promoted though, she acknowledges, this can take getting used to. ‘It does change the dynamic slightly of course, you can lose a little bit of the personal side, but when you weigh up the benefits, from a professional point of view, you are still getting what you need. Implementation is always a little bit challenging because you’re always trying to train people to do things differently, but that’s like any process of change any organisation will go through. People will

The Dancing Building in Prague is home to Accenture still travel when they need to, but we have become much more effective at using the tools available to us.’ With geographic services deemed a back-office function, Archbold notes that a further advance over the last few years has been addressing the attitude that ‘when you’re back office, you’re not generating money. We’ve begun to bring our perspective to that conversation because every cost an organisation generates has an impact on its revenues. As an organisation, you have to bring everyone into the discussion about how to do things differently to better manage or reduce costs.’

Career From Newbridge, Co. Kildare, Archbold studied business in DCU, taking work experience in ESAT, and, more specifically, its accounts payable department. This, in turn, led to her

getting her first job in ESG Reinsurance after graduating in 2002. She began to study ACCA in the second year of the job, a decision that would focus her career on financial accounting in spite of initially intending to work in marketing. ‘It was probably the environment that I was in that encouraged me to do it,’ she reflects. ‘I knew that, from my general career prospectus, it would create a lot more opportunities. I felt that ACCA gave a much broader sense of the accounting world and I wasn’t limiting myself to just audit or tax. I could have gone on to specialise in either but ACCA was broad enough to offer lots of other options.’ Upon becoming a member of ACCA, she also decided the timing was right to look for a new challenge. Accenture provided this opportunity and she joined as a global financial specialist. It


15

The basics 1989

Anderson Consulting is founded.

2001

Accenture adopts its current name, signifying ‘accent on the future’.

2009

Accenture is incorporated in Ireland.

2013

Accenture is named as one of the top 100 companies to work for globally.

was a change of gear that didn’t come without challenges. ‘You’re in an environment where there is lots of change. Accenture is the kind of company that doesn’t stand still and it can take getting used to. We joke about this, in fact, that if you don’t like change you shouldn’t work here because there’s a constant process of transformation or reorganisation. However, you do soon realise that the change process happens as we continuously look to do things more effectively and efficiently. What we’re providing for clients is quite often what we’ve tested on ourselves.’ The career move happened at a time when Dublin was becoming increasingly prominent in Accenture’s global plan. ‘You could definitely get the sense that Accenture in Dublin was changing; you could feel that kind of buzz in the air. I think it was the skills we offered and

the types of resources we had,’ she reflects. ‘The fantastic thing about Dublin is that we can attract lots of people here from all across the world and so we are able to offer a skill set that maybe other geographies can’t.’

Solutions Archbold was not entirely done with the insurance market, however, and an offer she couldn’t refuse saw her play the role of financial accountant with a mortgage insurance firm for a year. Leaving just a few months before the property crash, she was head hunted back to Accenture and, returning to the fold, found she flourished in her new role. ‘As manager, you have the opportunity to drive change and to formulate solutions. You get to be part of that decision-making process. Coming back, I felt that I was entering at the right level and could take my

place at the table.’ Promoted to her current position in September last year, Archbold says that what she loves about her job is that she ‘gets to deal with so many people, with different experiences, from different cultures and environments, which influences me to think differently. If you had told me four years ago I would be working with somebody from the environment team on how to address energy efficiency, I wouldn’t have believed that could be part of a finance job.’ She notes that membership of ACCA has helped in developing the right approach to these kinds of challenges. ‘ACCA sets a kind of precedent in the sense that you have to do things in the right way. So, when you are putting change into place, you also take into account that you have a core set of values and principles that you have to apply. ACCA gives you that grounding, you find you constantly go back to that.’


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T

o listen to opposing sides in a polarised debate, 14 February 2013 could go down as a St Valentine’s Day Massacre of Europe’s capital markets or the start of a love affair with regulation that could help prevent speculative trading turning boom to bust. Presented on that date, the European Commission’s revamped draft directive for a financial transaction tax (FTT) in 11 participating EU member states is expected to generate as much as €57bn annually for the EU and the ‘FTT zone’ countries as they deal with the economic fallout for which many EU politicians blame the financial sector. In the real economy, it has led to warnings of a credit crunch with consequences beyond the FTT zone nations – Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal,

treasury companies, pension funds, and other nonfinancial sector entities with a significant average value of financial transactions. The risks extend to other nations because any entity falling into these definitions would be taxed on transactions with parties based in the FTT zone or for transactions in financial instruments issued there. It would also apply, with some exceptions, to each link in a chain of transactions – for example when parties use a blend of instruments (contracts-for-difference, swaps, futures,

‘IF THE PROPOSALS GO AHEAD AS FRAMED, I THINK THERE WILL BE CAPITAL FLIGHT FROM THE EU AND SERIOUS PROBLEMS IN RAISING CAPITAL’ Slovakia, Slovenia and Spain – if it comes into effect as proposed in January 2014. The proposed FTT would tax transactions in equities, bonds, fund units and derivatives at minimum rates of 0.1% for bonds and shares and 0.01% on the value of derivatives. Superficially, these rates look low, but the devil is in the detail of what Ernst & Young has dubbed ‘the tiny tax with big effects’. In a recent alert to clients, EY describes how the tax would apply to buyers and purchasers where each was defined as a financial institution (FI). The definition is broad and, in EY’s view, will probably encompass

options, etc) to cover risks involved in price movements. EY highlights the financial risks inherent in FTT provisions on liability to pay. Each party to a transaction, including non-FIs, would be jointly and severally liable for unpaid FTT. So a seller paying FTT could also be liable if the purchaser did not. New compliance systems will be needed to pay the FTT on the same day the liability arises (three days in the case of paper transactions). In practice, EY says, compliance will mean separating financial transactions by location, counterparty status (FI/ non-FI), and place of issuance of the financial instrument. It will also require

systems to report to, and account to, tax authorities in the participating member states. Tax authorities in different states could set different FTT rates (though the proposed rates are the minumim permissible) and implementation procedures. EY reckons that FIs will pass on some €35bn (US$45bn) annually in FTT costs. The likely results are higher borrowing and hedging costs, lower returns on pension and investment fund assets, and higher energy and commodity costs. Alarming predictions have been made about the effect on the market for repurchase agreements (repo), where banks raise short-term funding and put up government bonds as collateral. The FTT as currently framed could see repo in Europe contract by at least 66%, says a study for the International Capital Market Association (ICMA). Repo and securities lending should be exempt from the FTT, according to Richard


17

RUFFLING FEATHERS

The EU’s controversial financial transaction tax has led to warnings that if it comes into force as currently framed it could trigger a credit crunch that goes far beyond the 11 countries pledged to implement it Comotto of the ICMA Centre, who authored the study. ‘Some corporate treasuries invest cash in the repo market either directly with borrowers or through third parties and that would stop,’ Comotto says. ‘There are doubts about whether there would be any other money market instruments left but unsecured deposits.’ He foresees lending to companies drying up because FTT zone banks get their funding through the repo market and from large money market depositors such as corporate treasuries and mutual funds which, if they invest with banks at all, prefer to do so via repo because it is collateralised. ‘An FTT zone company seeking to invest cash would probably set up a subsidiary abroad to invest in markets outside the zone and to issue company bonds and shares which would otherwise be subject to the FTT. If the proposals go ahead as framed, I think there will be capital flight from the EU and serious problems in raising capital.’ The City of London Corporation,

which provides local government for the heart of the UK’s financial epicentre, has warned that the FTT could increase the cost of issuing sovereign debt because purchasers would demand higher interest on government bonds to compensate for the FTT. While companies and the accounting profession ponder change, the FTT has fuelled robust academic debate. Some focus on likely economic benefits to the FTT zone nations. The EU FTT would be ‘minuscule relative to the impact of the austerity measures currently pursued by some EU governments’, according to UK professors Philip Arestis and Malcolm Sawyer in a soon-to-be-published paper. ‘GDP could even increase once the potential positive effects of the FTT

materialise – like, for example, preventing crises by reducing speculative activities. To the extent that the proceeds of the FTT are properly reinvested by the relevant governments, a positive impact on GDP could very well materialise.’ Some academics believe the FTT is a blunt instrument that needs refining. ‘The EU is taking the wrong path in designing the FTT, given that it is not calibrated on any assessment on the relative toxicity of the different financial instruments (at which it is aimed),’ says professor Donato Masciandaro of Bocconi University, Italy. While arguments continue, FDs and accountants cannot ignore what is happening. ‘Although there is a growing anti-FTT lobby, businesses shouldn’t assume the FTT will automatically go away,’ says Rod Roman, London-based partner in the global tax services team at EY. ‘Many large financial institutions are working through the detail to see how it will specifically affect them, their customers and the overall financial landscape. If the starting gun does ever get fired, it has put them ahead of the game when it comes to commercial and operational impact.’ EY’s checklist for non-FI companies is: review banking relationships, including with London, New York and Singapore branches of FTT zone banks; consider FTT’s impact on treasury, financing vehicles and pension funds; review contracts with banks to see where FTT liability sits, bearing in mind joint and several liability; consider your hedging strategy for interest rate, currency and commodity risks – all will be taxable if executed with FTT zone counterparties.

* * * *

Robert Stokes, journalist


18

DIRECTIVE CHANGE

Brussels now wants environmental and social information disclosed by large companies. We investigate the repercussions of the proposed reporting amendments

J

ust as the International Integrated Reporting Council (IIRC) was launching its consultation on the draft international integrated reporting framework in London, the European Commission in Brussels was pushing for large companies to disclose information on social and environmental matters. The European Union’s internal market commissioner Michel Barnier tabled on 16 April an amendment to the EU’s fourth (78/660/EEC) and seventh (83/349/EEC) directives on annual and consolidated accounts. The reforms will oblige firms with over 500 employees to disclose information on policies, risks and results regarding environmental, social and employee aspects, respect for human rights, anti-corruption and bribery issues, and diversity on boards of directors. The proposals have been made because existing legislation only asks companies to provide non-financial information in their annual reports ‘where appropriate and to the extent necessary for an understanding of the company’s development, performance or position’. Meaning it is optional and Brussels thinks not enough companies have been playing ball. ‘The requirements of the existing legislation have proved to be unclear and ineffective and applied in different ways in different member states,’ an EC statement acknowledges, noting that fewer than 10% of the largest European companies disclose nonfinancial information regularly. Barnier, a Frenchman, thinks this is a bad thing: ‘This is about providing useful information for companies,

investors and society at large – much demanded by the investor community,’ he says, noting that companies which report on both financial and nonfinancial performance ‘have lower financing costs, attract and retain talented employees and, ultimately, are more successful.’

Logical milestone Carmel Dunne, a spokesperson at the EC, says the proposal was not directly inspired by the work of the IIRC. But Brussels was following it closely, she adds. And the IIRC seems to be keeping an eye on the EU: ‘We believe the Commission’s proposals are an intelligent and logical milestone on the continuing journey towards integrated reporting as part of the evolution in corporate reporting globally,’ says Paul Druckman, IIRC CEO.

All this aside, Brussels is still avoiding a rigid accounting law on non-financial reporting. It wants flexibility and ‘non-intrusiveness’ about how companies can report their nonfinancial information. ‘Companies may use existing national or international reporting frameworks and will retain their margin of manoeuvre to define the content of their policies, and flexibility to disclose information in a useful and relevant way,’ says an EU memorandum. The proposals say reporting guidelines that can be followed include those of the UN Global Compact, the International Organisation for Standardisation’s sustainability standard ISO 26000, or the German Sustainability Code, among others. Companies will also only have to report information relevant to their business. ‘When companies consider

‘THE EXISTING LEGISLATION HAS PROVED TO BE UNCLEAR AND INEFFECTIVE AND APPLIED IN DIFFERENT WAYS IN DIFFERENT MEMBER STATES’ ‘The production by businesses of non-financial information is the essential first step in equipping providers of financial capital with the data they need to make efficient and effective capital allocation decisions.’ he continues, adding: ‘For investors to have confidence in the resilience of the business model, companies need the right reporting framework to enable them to integrate processes and decision-making, reduce silos and trigger board discussions that reduce risks and improve the long-term prospects of the business.’

that some policy areas are not relevant for them, they will be allowed to explain why this is the case, rather than being forced to produce a policy,’ the Commission’s memorandum explains. ‘All efforts have been made to avoid an undue administrative burden,’ says the EC. This explains why small and medium-sized enterprises (SMEs) have been spared by this proposal. ‘The costs for requiring…SMEs to apply the new rules could outweigh the benefits,’ explains Barnier. Investors have welcomed Barnier’s announcement as a step in the right


MORE ON IIRC CONSULTATION DRAFT, AB, MAY EDITION

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www.accaglobal.com/framework

Bright tomorrow? Larger companies may be forced to assess how social and environmental factors will affect their business going forwards

direction. ‘Pressuring companies to provide investors with more transparent information on sustainability is an important step in putting sustainable development at the heart of capital markets,’ says Steve Waygood, chief responsible investment officer at Aviva Investors and member of the EC’s expert group on narrative reporting. ‘We believe that it’s really a positive push and good management practice,’ Ilse Moens, director at PwC Belgium, tells Accounting and Business. She believes such reporting prepares companies for the future, forcing them to assess how different social and environmental elements can affect their business. This prompts companies to develop strategies beyond reacting to markets, she adds. ‘Companies are thus looking at risks that are not materialised today, but can be in the next five to 10 years and be prepared.’ ‘We have a lot of companies that have gone through this type of reporting,’ adds Marc Daelman, PwC Belgium partner. And once they do, they start seeing the added value, he says. ‘In the past they had more silo thinking, with departments focusing on the environmental or social side.’ Holistic reporting requires corporate maturity, he believes. ‘Some companies are afraid of being more transparent, putting quantitative measures on social and environmental issues – are we not shooting ourselves in the foot because

we don’t meet those objectives, although for good reasons?’ According to Moens and Daelman, the costs of reporting will be minimal for most companies, although it will take investment, say the two executives. Executives will also need to work to convince doubters: ‘Some company leaders can prove that it has a positive effect, and others equally say that it doesn’t have any impact,’ Moens says.

Burden not benefit And indeed, some companies only see added administrative burdens, not added value. ‘The proposed regulatory approach to corporate social responsibility [CSR] is running the risk of demotivating all companies that have embarked on genuine CSR activities on their own, says Jürgen R Thumann, president of BusinessEurope, which represents both small and large European companies. ‘Instead of applying a ticking-thebox approach, the business-driven purpose of CSR – to contribute to business goals by addressing social and environmental challenges over and above what is required by law – must be safeguarded,’ he adds. Wim Bartels, KPMG sustainability partner at KPMG Advisory in the Netherlands, adds: ‘The proposed legislation by the EC will imply an additional burden for those big companies who haven’t paid much

attention yet to the topics referred to in the legislation.’ And he predicts the legislation will not convince sceptical companies of non-financial reporting benefits. ‘They will treat [it] largely as a compliance requirement and will not see any additional benefit.’ However, he welcomes the opt-out for companies not having to provide information for areas where they have no policy. And it will help already supportive companies, says Bartels, as they ‘will be able to demonstrate their efforts and focus now, supported by formal legislation, and can showcase their leading position’. The cost-benefit ratio depends on each company’s profile and strategy, he adds, predicting some companies will use the new reporting requirement to promote organisational change. ‘All other companies who follow their peers in reporting only, or believe reporting is ‘just needed to keep up the image’, already suffer from current reporting practice,’ Bartels notes. The legislation will now be debated by the European Parliament and the EU Council of Ministers. If passed, the proposal should force 18,000 companies to undertake non-financial disclosure, with their 2017 annual reports being the deadline. Carmen Paun, journalist based in Brussels


A good MBA improves your business network ‘This MBA improved my confidence in my ability and made me re-think how the work I present is received in the business world. It taught me that the story behind the numbers you produce is just as important to senior management as the numbers themselves. And studying online was a very efficient way of learning while I was holding down a full-time job.’

Richard Waring finance manager – strategic support, O2

www.accaglobal.com


ACCOUNTANTS FOR SMALL BUSINESS www.accaglobal.com/ smallbusiness

Perfect pairing

[

The alliance between a small business and its accountant is good for both – and for the economy, says ACCA president Barry Cooper

While the role of the CFO in the major listed company or the work of the auditor in a multinational company may be the areas which dominate the headlines, ACCA has never lost sight of the fact that the work thousands of our members do in helping the development of SMEs is hugely significant for the health and growth of all economies around the world. With 45% of our members having at some point worked for an SME, the finance professional clearly plays a major role in this sector. As a body which has long called on regulators and standard setters to ‘think small first’, we’re now focusing our attention on small businesses themselves to make them aware of the value of the professional accountant. Our ‘Accountants for small business’ campaign also aims to raise awareness of how new or young businesses can build professional finance teams and why there is such a need for complete finance professionals who can develop with these businesses. ACCA will also be working to build partnerships with business associations, government agencies and service providers to provide practical resources and support for SMEs looking to invest in internal finance functions. There is a wider benefit to this campaign that goes beyond ACCA’s desire to ensure that businesses are aware of the skills our members can bring them. The campaign will emphasise the importance and benefits of having more formalised businesses in driving economic development, particularly in emerging markets, where a growth in such businesses will enable governments not only to achieve predictable revenues but also to develop and implement policy more effectively because such businesses have a greater voice and presence. The accountancy profession is a natural ally in this process. ACCA wants to play its role fully by ensuring that stakeholders in SMEs, whether they are business owners and management, finance providers, government agencies or employees, have the information they need presented in a way they understand to enable them to take the right action. I have seen at first hand the work that our members do for SMEs and I know they can meet the challenges and take the opportunities that this new campaign will bring. Professor Barry J Cooper is head of the School of Accounting, Economics and Finance at Deakin University, Australia

Comment

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Comment

The outlook for audit reform

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Aidan Clifford on the challenge audit reform presents to the Irish presidency of the EU

The accountancy profession is fond of using Lord Justice Tope’s assertion that ‘the auditor is a watchdog not a bloodhound’. Whatever the characteristic of the animal, the European Commission has decided that audit in Europe is not fit for purpose and has set out on a torturous road of taking it to heel. As part of our EU presidency obligations, it now falls to Irish ministers and civil servants to lead the debate with their EU colleagues on the Commission’s proposals. In a properly functioning business environment, audit is good for business, good for jobs and, yes, even good for small and medium-sized enterprises. However, we recognise that we don’t live in a perfect world, and that parts of the model could be improved. In this context, the Irish presidency starts with a flawed set of proposals, built on flawed judgment rather than business reality and, because of this, has a real challenge ahead.

Proposals Brussels, among a number of other proposals, wants to place restrictions on the provision of additional non-audit services; provide for audit only firms; require audit firm rotation after a fixed period; and encourage more crossborder audit firms. Some proposals are more laudable than others, but

they are all lacking empirical evidence supporting how much they might contribute to audit quality. The proposals from the EU would change the role of the auditor from watchdog to something of a watchdog/ bloodhound cross, but ACCA argues that this is not enough. In many of the high-profile audit failures of late, there have been marked deficiencies in the operation of the audit committee and directors. Any new proposals would need to task the audit committee with communicating with the auditors on areas of audit risk, attach more responsibility to report directly to shareholders on the performance of the audit, and to assist in the appointment of the auditors. This is something ACCA strongly supports

and is something that is happening in well-governed companies already.

Empowerment ACCA would like to see the directors and audit committees fully trainedup and competent to discharge their side of the audit function, with both the legal empowerment to perform the function and legal responsibility for failure to perform. The European Commission is attempting to retrain the dog when, in fact, at least some of the focus should be on retraining the owner. Aidan Clifford FCCA is advisory services manager, ACCA Ireland. Email aidan.clifford@accaglobal.com


Practice

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The view from: Kildare: Dan McInerney FCCA, Active Accountants Q What business lessons have I learned? A I’ve learned that at the heart of each and every business there is a core, which an accountant must find. In the SME sector, it often revolves around the owner themselves and their business vision. Many other layers of complexity may exist, but by understanding the core of the business, its heart, then all the other layers can be placed in perspective. The accountant has an obligation to provide the best service possible to the business owner, and this includes being able to communicate bad news as well as good news in business. In my experience, the majority of business owners want to be alerted to bad news early, so they can deal with the issues promptly. Q What business tips would you pass on to others? A Treat your client’s business as you would your own. While, ultimately, the business decisions are theirs, they will usually recognise and appreciate the extra effort you make to be there as support for them, and to help them through the business cycle, rather than just crunching the numbers. I also read a very important piece of advice recently, namely to constantly review your client base, and always retain the option to drop difficult or problem clients. The last thing you want is for a difficult client to drain your resources and impact on the quality of services you provide to your other clients. Q What are the key challenges you face for the rest of the year? A One of the main challenges for clients this year is to continue improving their competitiveness by keeping a close eye on performance, given that we are not yet seeing the end of the economic pressures. As a relatively new firm, the key challenges for me are to continue to establish the firm

and its range of client services, and to grow our professional network. My objective is to partner fully with clients at all times. I am also conscious of a potential upturn in the near future, and want to be poised to take advantage of this. Q Tell us about Active Accountants? A Active Accountants is a small practice based in Kildare. It has developed from the previous firm Dan McInerney FCCA. We provide a range of accounts and tax services, primarily to the SME sector. We work on a fixed-fee model, and provide regular interaction with our clients, as part of a continuous and tailored service agreed with each client in advance. I have been hearing-impaired for many years but it has not stopped me from pushing ahead with my business, starting my firm and then rebranding it to Active Accountants. From a personal perspective, doing business despite this impairment has trained me to always seek creative solutions to any problem.

24 Dynamic adviser 29 The view from Sammy Wilson and Lessons from Pakistan

Kildare

*FAST FACTS *

Could not live without My Blackberry

*

Currently reading What about the big stuff? By Richard Carlson

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Holidays this year Short trip to Europe in late summer or early autumn (destination undecided).

WE WANT YOUR VIEW If you’d like to feature on this page get in touch at donal.nugent@accaglobal.com


24

Practice

Dynamic adviser When it comes to working with entrepreneurs, Maria Pinelli, Ernst & Young’s global vice chair of strategic growth markets, knows how to make a difference Maria Pinelli is sitting in Ernst & Young’s global headquarters on London’s South Bank with the Thames and the Palace of Westminster glittering behind her. It’s the ideal backdrop for a woman who is the perfect global citizen. She is clearly very bright, is fluent in three languages (English, French and Italian) and has an encyclopaedic knowledge of entrepreneurial markets around the world, not to mention the ability to rattle off a string of impressive statistics at the drop of a hat. But what is most striking is her obvious passion for entrepreneurial businesses. Her eyes light up as she talks about them, the way most people’s do when they are describing their children (of which, incidentally, she has two – plus a grandchild). ‘You are operating in and on the business rather than as an outside adviser,’ she explains. ‘It really is a labour of love.’ Now, Pinelli holds the illustrious title of EY’s global vice chair of strategic growth markets. But her career was not necessarily destined to head in that direction. By her own admission, she ‘didn’t fall into accounting easily’ despite being good at mathematics and having strong analytical skills. And as a newly qualified accountant, she seriously considered leaving the world of practice for a plum job in industry because she wanted more strategic work and a change from audit. In the end, however, she heeded the advice of her mother whose philosophy was: ‘Never sell the farm in winter’. So instead she took on a special assignment that involved the acquisition of a business, negotiating the final purchase price and helping to create the financing behind it. ‘It was one of the most exciting assignments I had been on,’ Pinelli recalls. ‘I’m so glad I stayed with Ernst & Young. I’ve learned some of the most critical operational and

process skills that are so important to understanding business.’

Top of the ladder To say that Pinelli hasn’t looked back since making that formative decision is an understatement. She has notched up 26 years with EY and that special assignment was the first rung on a career ladder that has taken her to the top of the advisory world for highgrowth businesses. Over the years, she has helped entrepreneurs to expand internationally, undertake capital transactions and carry out initial public offerings in Canada, China, the UK and the US. She was made partner in 1997, less than 10 years after joining, and in 2006 left Canada to take up the role of EY’s Americas leader – strategic growth markets, based in New York. Here, she had responsibility for the firm’s North American, South American and Israeli entrepreneurial practices, a role she describes as ‘working with tomorrow’s market leaders today’. Since 2011, she has been based in London with a global remit. The turnover among the constituents of the indices listing the world’s most valuable companies is surprisingly high. More than 55% of the global Forbes 2000 list (the pre-eminent ranking of the world’s biggest public companies) turns over every five years while the FTSE 350 has turned over 50% since 2008 and in Bombay the top public companies turn over at a rate in excess of 90%. ‘The market leaders of today are not the leaders of tomorrow and change is inevitable,’ observes Pinelli. EY’s strategic growth markets practice is focused on working with new entrants to indexes around the world before they become market leaders. Many of the internet giants that feature in Fortune magazine’s Most Admired companies list are clients that the firm has nurtured to date.

Working with entrepreneurial companies, often in emerging markets, sounds pretty exciting (and it generally is) but it is also a challenge. ‘We have to think globally and act locally,’ says Pinelli. ‘We can’t lose sight of the fact that our business is done every day on the ground in communities, with people and with clients.’ Entrepreneurs also face myriad challenges themselves, as Pinelli points out. They want to maintain their entrepreneurial spirit and innovation while sustaining their growth and building processes, infrastructure and controls to support that growth. Then there are the questions of where and how to grow ‘because the choices are abundant’. She cites access to capital and the right use of capital as particular issues in the current economic climate. Then there is the search for talent – people who will bring with them industry expertise and the ability to take innovative ideas and turn them into actionable services and products.

Cultural sensitivity Entrepreneurs from developed markets also have plenty of hurdles to jump when looking to expand their businesses into the developed world. ‘It’s naïve to think a Western company can just drop into an emerging market and teach it about the Western way to be successful,’ observes Pinelli. ‘Everything from research and development, to customer insight, to the business model has to be developed with a local lens.’ She believes that Western entrepreneurs have plenty to learn from their peers in the developing world, not least techniques for delivering products and services to the masses at a low price. ‘How they innovate is different,’ she says. ‘It’s a concept we call frugal innovation.’ And expansion into new markets doesn’t just work in one direction. ‘Emerging markets are coming into


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Practice

The CV 2011

Appointed global vice chair of strategic growth markets at EY, based in London.

2006

Moved to New York to take up the role of Americas leader – strategic growth markets.

1997

developed markets and taking over,’ says Pinelli. ‘Already we are seeing the influence of the emerging market buyer in the big brands now.’ She says the countries to watch in future are the BRIC economies of Brazil, Russia, India and China, as well as the next tier of emerging markets including Indonesia, Vietnam, Thailand and Turkey, which are showing excellent growth projections. ‘Africa is a very hot market,’ she points out. ‘Seven African countries are among the 10 fastestgrowing economies.’ Turning to the business sectors that are set to perform best over the next decade, Pinelli says: ‘We are very bullish on real estate and infrastructure. In the developed economies, we are seeing those markets come back. We are also bullish on healthcare and the need for more innovative services.’ She points out that retirement facilities are set to become big business in China where the one-child policy means that families can no longer take care of ailing parents. She also says that technology is important because it will drive innovation in financial services and mobile, while clean technology and sustainability will impact on energies. Pinelli oversees EY’s prestigious Entrepreneur Of The Year programme, which was established in 1986 to

celebrate successful entrepreneurs, so that they could share their stories, inspire others and receive the recognition they deserve. Globally, EY commits more than US$100m annually to entrepreneurship. ‘We are committed to advising, guiding and recognising the world’s best entrepreneurs,’ says Pinelli, ‘because they use their fresh thinking and hard work to create positive social change – bringing new concepts and products to market, and creating jobs and wealth.’ In 2008, Pinelli founded EY’s Entrepreneurial Winning Women programme after noticing that few women ever featured in Entrepreneur Of The Year. A keen advocate of encouraging women to achieve in business (on a personal level, she supports quotas to get more women onto company boards), she’s surprised that it took her many years to get round to it. ‘I don’t know what took me so long,’ she reflects now.

Drive, determination, passion Female entrepreneurs tend to have drive, determination, passion and vision, notes Pinelli. They are also more willing than men to give up the economic comfort of certainty to aspire to something uncertain. ‘Women entrepreneurs do very well. They tend

Made a partner in the Canadian practice of Ernst & Young (Worked in Hamilton, Toronto and Vancouver).

1986

Joined Clarkson Gordon, an Ernst & Young predecessor firm, in Hamilton, Ontario after studying commerce and French at McMaster University. to pay down debt quicker, hire more and, according to some early research, be more transparent,’ she adds. By 2028, women will control around 75% of discretionary spend worldwide and they already own approximately a third of all businesses in the world, nearly half of which are in developing markets. Over the next decade, the impact of women on the global economy (as producers, entrepreneurs, employees and consumers) will be at least as significant as that of the huge populations of China and India, if not more so. Tapping into women’s economic potential would be the equivalent of having an extra billion individuals in business and in the workforce, contributing to the global economy and stimulating growth, Pinelli explains. But the challenge for women comes with building scale. ‘They don’t think big,’ Pinelli observes. ‘And they need to think big. They need to work on the business, not in the business. That’s a key mind shift.’


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‘WOMEN TEND TO PAY DOWN DEBT QUICKER, HIRE MORE AND, ACCORDING TO SOME EARLY RESEARCH, BE MORE TRANSPARENT’ Entrepreneurial Winning Women is now in its sixth year. Through the programme, EY identifies a select group of female entrepreneurs with established, successful businesses and clear potential to scale – and then helps them to do it. ‘Women who have been part of our programme have grown their sales by an average of 50% a year,’ Pinelli reveals with obvious satisfaction. ‘By providing the right information, networks and guidance, we’re able to help these talented women access mentors, networks and capital. If women started businesses with the same capital as men, we would have six million more jobs in the US alone.’ She continues: ‘We’ve had some phenomenal stories. We’ve had scientists and women in trucking, hazardous waste, energy and consumer products.’ Pinelli is a keen user of social media and has over 1,000 followers on Twitter. She describes the site as her main ‘source of news’. ‘I love the fact that I can get my news in 140 characters,’ she says. ‘It’s good for my breadth of

The tips * * *

‘Always keep a positive attitude. Fear, uncertainty and doubt can kill your spirit.’ ‘Have a passion for what you do, but never let perfect get in the way of great.’ ‘If you’re an entrepreneur, have a plan but know that plan will change. Make sure that innovation is at the core of everything you do so that you can differentiate.’

*

‘If your business fails, try again because it’s important to fail. Most people don’t make it on their first try.’

*

‘Surround yourself with the right mentors. When choosing advisers, make sure that they can understand your plan.’

knowledge.’ Her advice for other users is to ‘communicate something that’s worth communicating about’. Meanwhile, there’s no doubt that Pinelli herself has plenty to say. In fact, she’s a fountain of knowledge on entrepreneurs and owners of high-growth businesses would probably struggle to find a more passionate adviser.

The basics ENTREPRENEURS AND EY

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In 2012, EY’s international network enjoyed combined revenues of US$24.4bn and employed over 167,000 people around the world.

* * *

In 2012, the firm launched its Global Centre for Entrepreneurship and Innovation. It has committed US$100m annually to helping entrepreneurs. The Entrepreneur of the Year programme is held in more than 140 cities and over 50 countries worldwide. The awards cover 94% of the global economy.

‘Someone once said to me that you can make a difference just by how you show up,’ she reflects. And you can’t help getting the feeling that Maria Pinelli is a woman who has made a big difference over the years. Sally Percy, journalist


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Public sector

The view from: Belfast: Sammy Wilson MP and MLA, Northern Ireland finance minister

Q What’s the financial relationship with London like? A Fairly good considering the things we have dealt with over the past three years. We were given an extra £200m for the police budget because of security uncertainties. After the government stopped carrying over underspends, which would have created difficulties with managing the budget, we negotiated a carryover of £60m to £70m a year. Air passenger duty has been devolved for long-haul flights after we made the case that Northern Ireland was in a different position from Great Britain. Q Would you like greater fiscal devolution? A I am reluctant to have full devolution of fiscal policy. I don’t think we have the maturity to take some of the decisions that greater tax powers would create and we find it difficult to say no to lobbyists. As a unionist I don’t want to see a reduced link to the UK. I am disappointed that corporation tax was not devolved. It would be a massive risk with a reduction in our block grant – our case to Westminster is that we are taking the risk – but we have to do it to get our economy moving. Q What do you think of Northern Ireland secretary Theresa Villiers’ offer of economic aid if there is faster progress towards a shared society?

A I am not happy. I have not seen any economic package on offer. She has not defined what she wants us to do. What will bring stability to Northern Ireland is a stable economy. Any help from Westminster to build the economy is more likely to build that stable society.

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23 The view from Dan McInerney and Dynamic adviser 30 Lessons from Pakistan

Belfast

Q What do you do with your free time? A I spend it in the garden and am an avid reader.

*FAST FACTS Spending by Northern Ireland government departments 2013/14: £18.9bn Annual financial subvention from UK: £10.5bn

WE WANT YOUR VIEW If you’d like to feature on this page get in touch at donal.nugent@accaglobal.com


30

Public sector

LESSONS FROM

PAKISTAN

Nida Naeem ACCA looks at how corruption, poor governance, lack of accountability and transparency have damaged a poverty alleviation scheme in Pakistan and affected public trust

T

here are several definitions of governance in use but the following, provided by the Audit Commission UK (2009), seems to be the most appropriate and up-to-date definition for the public sector: ‘Ensuring the organisation is doing the right things, in the right way, for the right people, in a timely, inclusive, open, honest and accountable manner.’ In the public sector, poor governance, corruption and fraud have a serious impact on the cost and quality of service provision, resulting in the depletion of precious resources and the loss of public trust. This is why fighting fraud and corruption is a priority for most governments, particularly given that two thirds of countries surveyed by Transparency International’s Fraud Barometer showed a high propensity for fraud and corruption (see box overleaf). The poor, whether in developing or highly industrialised countries, suffer most from corruption. They are also more pessimistic about the prospects for less corruption in the future. In Pakistan, poverty alleviation remains a pressing issue. According to

the Human Development Index, 60.3% of Pakistan’s population lives on under US$2 a day, compared with 47% in nearby India. Wealth distribution in Pakistan is highly uneven, with the top 10% of the population earning 26.1% and the bottom 10% earning only 4.4% of the income. According to the United Nations Human Development Report, Pakistan’s human development indicators, especially those for women, fall significantly below those of countries with comparable levels of per-capita income. In Pakistan, several state-run poverty alleviation programmes are being funded by official ‘Zakat’ collections. Zakat is an obligation for Muslims to give a specific amount of their wealth to the poor and needy. In existence for over 1,400 years as a personal charity obligation, this was formalised by the government of Pakistan in 1980 as the Zakat and Ushr Tax. Under this programme, Zakat is deducted at source by commercial banks in the Islamic month of Ramadan and credited in the Central Zakat Council’s (CZC) account maintained at the State Bank of Pakistan. Disbursements are made

through district level local Zakat committees in the form of subsistence allowances and through educational, health and social welfare institutions and Islamic schools or mudarassahs. About 40% of the Zakat funds are retained by CZC and are transferred to the national medical, educational and welfare institutions, bait-ulmal fund and some are distributed in emergencies among the people affected by flood, earthquakes and other natural calamities. In Pakistan, where Muslims account for 95% of the population, a stateadministered system of Zakat can be a big source of welfare spending with potentially less incidence of evasion due to its religious nature; nonetheless, a vast majority of Zakat is paid informally without going through any governmental channel. To understand the potential for Zakat to alleviate poverty, the amount of Zakat that can be collected in the economy must be estimated. As Zakat was introduced some 1,400 years ago, Islamic scholars today have different opinions about the assets on which Zakat is deductible. In The principle of socio-economic justice in the contemporary fiqh of


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(Top) A Hindu boy and family living under a bridge in Karachi and (above) a mother and children in their house in a slum on the outskirts of Islamabad highlight the fact that poverty alleviation remains a real problem in Pakistan

Zakah (1987), Monzer Kahf used three opinions on the Zakat base (ranging from liberal to the strictest) to estimate the average Zakat rate as a percentage of GDP for a sample of eight countries. In Role of Zakat and Awqaf in poverty alleviation (2004), Habib Ahmed estimated that using the lower rate (if Zakat accounts for 1.8% of the GDP), the incomes of 8.2% of the poor in Pakistan can be increased by US$1 per day, whereas 3% of the poor can have an increase in income of $2 per day. If the higher average Zakat rate as a percentage of GDP, ie 4.3%, is used, potentially 19.7% of the poor population of Pakistan can have an increased income of $1 per day, or 7.2% can see their incomes increased by US$2 per day. Poverty elimination through potential Zakat collection in the OIC-member countries, produced by Nasim Shah Shirazi, Md Fouad Bin Amin and Talat Anwar in 2009, estimated that in Pakistan, additional resources to the value of 1% of GDP can eliminate poverty under US$1.25 a day where elsewhere the shortfall of resources to eliminate poverty under US$2 a day is 6.77% of GDP. The report estimates that the potential Zakat collection, if administered properly, would be between 1.57%-4.31% of

GDP. If this were achieved, no one in Pakistan would live under US$1 a day and a substantial portion of the poor population would be lifted from poverty under US$2 a day. However, repeated corruption, embezzlement and misappropriation scandals have damaged the credibility of the government’s Zakat programme. In fiscal year 2011, the Zakat and Ushr Ministry spent Rs69.21m on advertising in violation of the Zakat

Pakistan, 14% of the committee members are corrupt and 13% give Zakat funds to their friends and acquaintances. In 10% of cases, it was found that the money recorded as disbursed in committees’ registers was more than what was actually disbursed. In addition, Zakat funds are often used for political purposes. Beneficiaries have complained of infrequent payments, bureaucratic red tape, extortion and bribery.

A STATE-ADMINISTERED SYSTEM OF ZAKAT CAN BE A BIG SOURCE OF WELFARE SPENDING WITH POTENTIALLY LESS INCIDENCE OF EVASION and Ushr Ordinance and Rs286.1m on the ‘administrative expenses’ of Zakat committees in Punjab that were not functional, according to the auditor general of Pakistan. The report Pakistan: A Profile of Poverty, published in the Journal of Economic Cooperation Among Islamic Countries, shows that acquaintanceship or other association with the local Zakat committee chairman or members have commonly been cited as the reason for being on the list of Zakat beneficiaries. The same report shows that in

Philanthropic nation The public is thus hesitant to contribute Zakat into an official pool and prefers to pay it directly to beneficiaries. Interestingly, while people are averse to giving Zakat through government channels, Pakistan leads South Asian countries in philanthropic giving as a percentage of GDP. In 1998, Pakistan received Rs6bn in foreign aid grants, while the public gave Rs30bn as money for charitable purposes. A possible explanation for Zakat payers’ preference for using informal


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Corporate Public sector

A boy collects plastic goods from a pile of garbage in the main sewerage area in Lahore. According to the Human Development Index, 60.3% of Pakistan’s population lives on under US$2 a day

channels may be that Zakat paid to the state can be used to estimate personal wealth. Although Zakat is a religious obligation, which is rarely evaded, tax evasion is widespread in the country – in 2011, the tax to GDP ratio in Pakistan was 9.1%. The lack of a proper information system deters efficient operation of the state’s Zakat programme. The government of the largest province – Punjab – on its website admits difficulty in detecting fraud and to the need for an online database of beneficiary information. Also, for the public to hold public sector programmes and organisations to account, information needs to be accessible and timely. Improvements in governance and administration are vital to turn the programme around. Public disclosure of annual plans for the receipts and expenditure of Zakat institutions as well as audited accounts would go a long way in increasing transparency, building public trust and improving financial management. In addition, a robust monitoring and accountability

mechanism to identify and penalise violations of protocols, checks and balances (such as spot checks conducted by district officials at village level), and independent audits would aid transparency and accountability, while deterring politicisation and misappropriation. Accountants and auditors have a critical role in helping to prevent and detect fraud. On the other hand, effective accountability based on disclosure and reporting is likely to require some level of training in financial and management skills for the public at large or (in the case of Pakistan where a majority of population is illiterate) for those undertaking a representative or advocate role (eg elected officials). Similarly, practices of disclosure and reporting, while retaining accuracy and precision, should be communicated with the non-specialist in mind. Nida Naeem ACCA is chairperson, subcommittee for the public sector, Members Network Panel, ACCA Pakistan

*GOING CONCERNS

Transparency International (2009) has identified the following concerns: About one in 10 people around the world had to pay a bribe in the previous year and reported bribery had increased in some regions, such as Asia Pacific and south-east Europe. Bribery was particularly widespread in interactions with the police, the judiciary and registry and permit services. The general public believed political parties, parliament, the police and the judicial/legal system are the most corrupt institutions in their societies. Half of those interviewed – and significantly more than four years ago – expected corruption in their country to increase in the next three years. Half of those interviewed also thought that their government’s efforts to fight corruption were ineffective.

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Northern Ireland tax notes Gift aid Guidance has been published on how the scheme works and the conditions that apply. The scheme: * allows eligible charities and Community Amateur Sports Clubs (CASCs) to claim top-up payments on up to £5,000 of small cash donations in a tax year; * applies to cash donations of £20 or less; * applies to cash donations received after 6 April 2013; and * has simplified record-keeping requirements. The guidance can be found at http:// tinyurl.com/hmrc-gift

Class 2 NIC HMRC is sending payment requests for outstanding Class 2 National Insurance contributions. HMRC states that ‘the payment requests also say that not paying may mean HMRC will collect the debt through their PAYE code from April 2014 or pass it to a private debt collection agency for recovery.’ It also states that ‘if you’re an agent whose client is no longer self-employed they may not owe HMRC Class 2 National Insurance contributions. Check your clients’ payment requests and let HMRC know if they’re wrong.’

Repairs and renewals HMRC has issued Revenue and Customs Brief 05/13, Direct tax: Guidance on repairs and renewals of assets, its draft guidance on what is a repair for direct tax purposes. HMRC states that the guidance will be included in the Business Income

Manuals (BIMs) later in the year and that it will also issue further guidance for tax professionals. The draft changes to BIMs can be found at www. accaglobal.com/uk/members/technical

Residence A series of articles is available for you to take and use. They provide guidance on the following: * the new legislation on residence and domicile; * the abolition of the concept of ordinary residence and its continued relevance; * what qualifies as a remittance; and, * the relevance and use of double tax agreements. They can be found at www.accaglobal. com/uk/members/technical

Insolvency HMRC has reissued Notice 700/56, Insolvency. It explains HMRC’s treatment of insolvent businesses and the procedures it asks insolvency practitioners to follow. The notice is effective now and replaces the short-lived March 2013 edition. The changes are a rewording of section 17 which refers to Law of Property Act (LPA) receivership. Details at www.accaglobal.com/uk/members/ technical

IHT quoted securities Where an estate includes quoted securities and they are sold within a 12-month period after the death, the value, if less, can be substituted. The list of recognised stock exchanges has

been updated and the following have been added: * With effect from 25 April 2013 the ICAP Securities & Derivatives Exchange Ltd (ISDX) * With effect from 18 January 2013 the European Wholesale Securities Market A full list of recognised stock exchanges and details of interaction with other tax areas can be found at http://tinyurl.com/hmrc-sec

SDLT TOGC claim Following the Tax Tribunal decision in Robinson Family Ltd [2012] UKFTT 360 (TC), TC02046, HMRC issued Revenue & Customs Brief 30/12 (see www.accaglobal.com/uk/members/ technical) and invited claims. It has now issued Revenue & Customs Brief 08/13 which provides guidance on the adjustment of Stamp Duty Land Tax (SDLT). HMRC states that ‘there may be situations where for a variety of reasons, not just those discussed in Brief 30/12, tax was charged on the grant of an interest in land when in fact the transaction qualified as the transfer of a going concern (TOGC), and no VAT was chargeable. This would have resulted in SDLT being assessed on a VAT-inclusive value rather than a VAT-exclusive one. If a business believes that it has overpaid SDLT on such a transaction, it may make a claim for overpayment relief.’ Glenn Collins, head of technical advisory, ACCA UK


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Technically speaking [

ACCA’s Aidan Clifford rounds up some of the changes Irish accountants should be aware of

IN THIS ARTICLE:

* 01 More IFRS accounting case studies from ESME. * 02 Family Support Agency gives more time to prepare audited accounts. * 03 Auctioneers, estate agents and property service agents license renewal process confirmed. * 04 Solid Fuel Carbon Tax. * 05 Estimating the costs of becoming a PIP. * 06 Shared-based payments. * 07 Charity accounting issues clarified in FRS 102. * 08 New audit requirement for unincorporated charitable entities will clean up irregularities in the sector. * 09 Business Tax Compliance

01 FINANCIAL REPORTING SUPERVISION

The European Securities and Markets Authority (ESMA) has published its 13th extract from its database of enforcement decisions taken by EU national supervisors of financial reporting that participate in the European Enforcer Coordination Sessions (EECS). Further details can be accessed at www.iaasa.eu/news/ index.htm

02 FAMILY SUPPORT AGENCY

Following representation from ACCA, the Family Support Agency has confirmed that its deadline for receipt of audited accounts from entities applying for funding is now five months after the year end. The deadline was previously three months.

03 PSRA LICENCE RENEWAL PROCESS

ACCA, along with the Consultative Committee of Accountancy Bodies Ireland, has been in discussions with the Property Services Regulatory Authority with regard to the accountant’s report to be submitted as part of Property Service Providers’ (PSP) licence renewal applications. The prescribed report formats are available on www.nprsa.ie The deadline date for renewal applications, including the accountants report attaching to the renewal application, is 24 May 2013 for those PSPs with a renewal date of 6 July 2013.

04 SOLID FUEL CARBON TAX

Aidan Clifford FCCA, advisory services manager, aidan.clifford@accaglobal.com

As announced in Budget 2013, solid fuel carbon tax (SFCT) is being introduced with effect from 1 May 2013. The tax will apply to coal and peat and will be chargeable per tonne of product. Revenue has responsibility for administering the tax. Any person carrying on a business in the state

who brings in or produces solid fuel and supplies it onward in the state will be liable to pay SFCT. As the tax will be charged at the earliest point of supply within the state, the majority of persons registering for and returning the tax will be the main fuel suppliers and producers.

05 BECOMING A PIP

A personal insolvency practitioner (PIP) is likely to be needed in most towns in Ireland and many members in practice are considering this business opportunity. Tom Murray FCCA provides an outline of the requirements to become a PIP on page 37. Here is a summary of the direct costs: ACCA members must complete a two-day PIP course and exam costing €650 (this course is currently taking place, future course dates to be announced); application fee of €1,500 (renewal is €1,000); professional indemnity insurance of €1m for any one claim and €1.5m in aggregate; specialist software to track payments; an independent client money accountants report annually; and a tax-clearance certificate. There will also be some training costs for back-office bookkeeping staff. As reported in the media, there appears to be no formal fee structure with 15% and 11% of recoveries mentioned by two commentators and the UK average fee of £3,500 mentioned by others. The fee is likely to be decided by the creditors and to be dependent on the complexity of the case. VAT is chargeable on the fee. The fee is likely to be paid out of the funds available for creditors on a monthly basis over five to six years, although some may be paid on a different basis depending on circumstance. If the PIP is a member of ACCA they will need to have a practicing certificate from us, but they will not be subject to monitoring of their PIP work by ACCA; the insolvency service will


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monitor this work. See www.isi.gov.ie for full details.

06 SHARE-BASED PAYMENTS

What do Black–Scholes, binomial and Monte Carlo methods all have in common? They are all allowed to be used by accounting standards to value share-based payments and all produce the wrong ‘wages’ figure when used in private companies. The inputs are estimates, the assumptions are just that: assumptions; and just because there is some hard maths involved, it does not make the result correct. Often the end result is described as a ‘made-up number’, with even Revenue demanding that it be written back in the tax computation. Some small entities have sought to avoid this accounting standard by making private deals with senior employees to sell them shares privately at a reduced/nominal cost, rather than issuing formal share options in the company concerned. This, however, is arguably a capital contribution by the owner, and still caught by the standard. The issue remains, though, that share options are a form of wages and should somehow be reflected in the financial statements if those financial statements are to show the true cost of labour. The Financial Reporting Council is conducting a research project to consider whether the recognition and measurement of equity-settled share-based payments provides useful information to the users of ‘standalone’ private companies, focussing primarily on employee share options. It would welcome views from preparers, users and auditors of financial statements, and other relevant stakeholders. The Research Bulletin, which sets out the initial findings from a preliminary review and the invitation to comment, is available at www.frc.org.uk

07 CHARITIES AND PUBLIC BENEFIT

FRS 102, the replacement accounting standard for the existing FRSs and SSAPs currently making up UK GAAP, has a number of sections with specific Public Benefit Entity application notes. To date, UK charities have used the UK Charity SORP, and the more progressive Irish charities use the Irish relevant sections of the UK SORP on a voluntary basis. The UK SORP is not strictly applicable in Ireland but considered best practice. FRS 102 has taken much of the requirements of the UK Charity SORP and incorporated them into FRS 102 and prefixed the Public Benefit Entity paragraphs as ‘PBE’. Many aspects of the UK Charity SORP have effectively become a requirement, and not just best practice in Ireland. Some of the PBE areas dealt with in FRS 102 are: * government and other grants, including donations of free labour and services and items of insignificant value (e.g. second hand clothes); * business combinations including the use of merger accounting and combinations at under or over value (where goodwill or negative goodwill might arise in a commercial transaction); * concessionary loans at nil interest both given and received and the application of fair value requirements; * funding commitments and whether and when they become liabilities; * impairment of assets and the use of ‘service potential’ and depreciated replacement cost when calculating value use; and, * accounting for property held for social benefit. The clarification will be welcomed by most charities. Application of FRS 102 is from 2015, but early application is allowed.

08 CHARITIES AND PUBLIC BENEFIT ENTITY REGULATION The government is mid way through a consultation with the charity sector on commencing the rest of the Charity Act. The main uncommenced provisions of the Act are about public accountability, proper oversight and audit and independent controls. There are 8,000 charities registered in Ireland and 4,000 of these are entities formed under the companies Act and already subject to audit and oversight. The remaining 4,000, and many more that are unregistered charities, are formed by trust or are religious groups etc. and have no required public oversight or reporting. The better managed unincorporated charities are already undergoing voluntary audits or reviews, but the results are not always publicised. When the remaining sections of the Charity Act are commenced, many additional entities will be subject to audit for the first time and many do not realise the implications of this. The 4,000 charities that are already subject to audit include most of the household name charities and their financial statements are fully transparent and available to download from www.cro.ie This issue is with the other 4,000 unincorporated charities that are registered with Revenue and have obtained a CHY number.

09 BUSINESS TAX COMPLIANCE CCAB-I colleague Brian Keegan is carrying out independent research as a postgraduate student at the University of Limerick into business tax compliance behaviour. Could you spare a few minutes of your time to complete his survey and let him know what you think? http://tinyurl. com/olzsq74


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37 Becoming a PIP Tom Murray FCCA on the route to becoming a personal insolvency practitioner There is a lot of interest amongst practicing accountants about the opportunities to become a personal insolvency practitioner (PIP) under the Personal Insolvency Act 2012. PIPs will be responsible for helping people to apply for protective certificates and prepare proposals for debt settlement arrangements (DSA) or personal insolvency arrangements (PIA). PIPs will also be responsible for calling creditors’ meetings and for administering the payments and other arrangements agreed to as part of the DSA or PIA.

Regulations Detailed regulations will be issued by the Insolvency Service of Ireland (ISI) in relation to authorisation and supervision of PIPs and also the maintaining of accounts and related matters. At time of writing, these regulations have not been finalised but are expected to cover qualifying criteria, regulatory standards and requirements, fees and charges and advertising and marketing. In particular, detailed guidance will be given on the books and records required to be kept and the safeguarding of client funds.

Becoming a PIP In order to become a PIP, an individual needs to make an application to the

ISI. Individuals making an application need to have one of a number of specified professional backgrounds. Being a qualified accountant and a member of a prescribed accountancy body is one of the qualifying requirements. Potential PIPs will also need to attend an approved course of study and pass an examination on the law and practice generally, as it applies in the state, relating to the insolvency of individuals and the Act. ACCA, in conjunction with the CPA and CIMA, is providing a course to members which satisfies the requirements of the ISI. It is anticipated that the first PIPs will be coming on stream in June 2013.

Application process In order to become a PIP, individuals will need to complete an application form, which will need to be accompanied by: A statutory declaration from the applicant, stating that they have answered all the questions truthfully, and that they are aware that it may be an offense to provide false or misleading information. The applicant must also undertake to notify the ISI of details of any changes in the information provided.

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Technical

best deal for his/her client within these parameters. The sustainable repayment capacity of the debtor is key to establishing the point at which bankruptcy becomes preferable. Current practice suggests this trends at 30%-40% of after-tax income for incomes at or above the average industrial wage. At higher income levels, a greater proportion of after-tax income should be available to repay creditors. Advisers should review the level of disposable income remaining with their client and consider if it allows for an acceptable standard of living. Qualitative factors should also be considered in determining what is acceptable to a debtor. These may include the length of time over which the debtor must make repayments, the debtor’s willingness to move away from the family home and the consequences of appearing on registers maintained by the Insolvency Service of Ireland. The realisable value of any security held less costs of realisation or the potential outcome from other recovery measures are the key metrics against which a creditor will measure the feasibility of debtor proposals. An experienced adviser will understand not only the creditor’s estimation of this value but also the creditor’s expectation of an outcome over and above it. If creditors doubt the honesty of a debtor or do not trust the debtor’s adviser, they will be far more likely to seek control through enforcement measures or legal action.

Understanding the circumstances Prior to formulating any proposals to present to creditors, advisers should ensure that all relevant information has been obtained from the debtor to allow a complete understanding of the debtor’s financial position and

circumstances. This should include a review of all balance sheet assets and liabilities and contingent liabilities, noting which assets are encumbered and the level of exposure to different financial institutions as well as any personal guarantees. A legal review should also be undertaken to understand the debtor’s exposure and to identify any weaknesses in the security upon which a secured creditor may rely.

Classify and prioritise creditors In an informal restructuring process, advisers should seek to agree arrangements with creditors who have the greatest negotiating power first. This will minimise the amount of renegotiation required if creditors further down the line seek variations. In ascertaining the order of priority the following factors may be considered: Security held; Preferential status; Voting rights in a PIA or DSA; Amount of debt; Interest rate and repayment terms on loans; Strategic/duress creditors; Strength/flaws in security; and, ‘Performing’ status and level of impairment of loans.

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Communication Proposals should be submitted to creditors in writing along with an offer to meet and discuss the proposals in more detail if required. The initial proposals should be structured to allow some flexibility to respond to counter proposals. The tone of any subsequent discussions should be positive and professional and every effort should be made to establish credibility and trust with the bank/creditor representative. At this stage the adviser’s role is that of skilled persuader and in selling the

proposals he/she must present the terms in the most favourable light. Advisers must be aware of the limited authority with which the creditor’s representative may be operating. Ideally, you will seek to negotiate with someone who can agree a deal. However, in financial institutions the relationship manager is often required to seek approval from the bank’s credit committee before a proposal is accepted. Still, it is unlikely a proposal will be presented to the credit committee unless the relationship manager believes it will be approved. Accordingly, the adviser must arm the relationship manager with everything they need to convince a credit committee the proposals represent a good deal. In this regard, the bank will almost certainly require up-todate financial and commercial information, a sworn statement of affairs, details of any asset transfers and a detailed business plan. The debtor and adviser should seek to maintain and build on existing relationships and goodwill. It will be fatal to the negotiation if the creditor loses confidence, so advisers must be experienced, reputable and at all times thoroughly prepared. Creditors do not like surprises and if there are set backs the best approach is to inform the creditor early.

Completion If a compromise agreement is reached it is important that all heads of terms are clear and unambiguous, that the debtor understands fully the obligations being undertaken and is confident of his/her ability to fulfill them. Finally, an adviser should ensure all terms are properly reflected in the agreement document. Niall Ledwidge is senior manager, RSM Farrell Grant Sparks. Email Niall.Ledwidge@rsmfgs.ie


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units on the web

Theoretically speaking In the first of a series of five articles on management theories, Dr Tony Grundy looks at the role these theories play generally, before kicking off with competitive strategy theory

Accounting is merely one strand of the management of any business, and there are many others, including strategy, marketing, economics, operations, technology and organisation. While the training of accountants increasingly looks beyond the narrower borders of accounting, it is still not as broad as, say, an MBA. Most business issues and problems have many dimensions and can be looked at from a variety of perspectives. Management theories can help us to open up the ways in which we see things: it can thus be both important and useful to draw

in decline, not helped by tight capital constraints that inhibited renewal. This example is useful because it highlights the need to be eclectic in the use of management theories, and also because a theory may cease to apply as the situation changes.

The theories We explore some of the most prevalent and informative theories in this series of five articles. The theories are grouped as follows: strategic – already partially covered in a five-article series in Accounting and Business last year (available at

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MOST BUSINESS ISSUES AND PROBLEMS HAVE MANY DIMENSIONS AND CAN BE LOOKED AT FROM A VARIETY OF PERSPECTIVES from such theories to solve problems. An example of an earlier theory in performance management was financial ratio analysis. In the 1970s, the conglomerate GEC in the UK practised a tight system of financial control based on a hierarchical series of financial ratios that are still a key part of management accounting today. Ratios such as return on capital employed (ROCE) put great emphasis on conserving capital and helped produce efficiencies. For well over a decade, GEC was very successful financially until its markets and products were in late maturity and

www.accaglobal.com/abcpd) and now developed more here; performance management, eg the balanced scorecard; knowledge-based, eg brainstorming, systems thinking; operations management, eg Six Sigma, lean management; leadership, eg organisational transformation. First let us take a brief look at the role that management theories play in business, and the issue of whether they always add value or not. In my own management career of over 30 years, I have seen the rise, maturity

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and sometimes the decline of theories such as: total quality management (TQM); business process re-engineering (BPR). Many CEOs and management teams believe that theory is a panacea for an organisation’s issues and offers quick fixes. They seem to believe that they can be applied like a paint roller and that as long as there is a superficial effect, then that is good enough. But these theories come and go, and we need robust, sustainable management theories instead, which are elusive. For instance, in my research for these articles I came across a rather interesting paper on management theories, Bad Management Theories are Destroying Good Management Practices, by Sumantra Ghoshal, a one-time management guru. Ghoshal suggests that there can be a strong element of faddism in management theory and that this can lead to malpractice. He blames business schools for putting out these management products without sufficient empirical testing to ensure they do what they are supposed to do. In particular, Ghoshal criticises the naive adoption of theories from the traditional natural sciences which are based on very deductive thinking. For instance, in BPR organisational inflexibility is attributed to business process complexity and is curable with a series of techniques of processsimplification, badged ‘re-engineering’.

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44 GET VERIFIABLE CPD UNITS

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He suggests that such overly mechanistic theories really do not do justice at all to the fact that any management issue is embedded in a very rich context. Thus, generic treatments alone through a single, set-piece management framework are unlikely to be effective. Indeed, in the wrong hands and with inexperience they could be positively dangerous. I agree totally with Ghoshal, who sadly is no longer with us. Incidentally, I do remember that about 10 years ago I was doing a strategy lecture on a US company, broadcast live globally by satellite. You couldn’t see your audience, but the audience could see you. Ghoshal had done the talk before me. He had arrived to be told that the organisational issues he thought existed didn’t really apply: he tore up his talk and spent the entire night redoing it to focus on the real ones; that was a man after my own heart. He did look ragged the next day, though!

Strategic thinking Coming back to our first set of theories, strategic theory, in the series of articles last year we made the general points that: strategy is about how you move from where you are now to where you wish to be in the future; that move needs to be innovative and something that could be characterised as ‘a cunning plan’; to develop an effective strategy, one needs to know where one is now

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(strategic positioning) and also to develop some key strategic options to get there; this should be arrived at not just by brainstorming, but by a more systematic look at the different ‘degrees of freedom’ or ‘lines of enquiry’ available, in order to open up many more strategic options; these options should be evaluated systematically using clear and predefined decision criteria (eg the Strategic Option Grid).

rivalry; * competitive (products or services); * substitutes supplier power. *We introduced these in the article ‘Unpeel your competitive onion’ last year, but now develop further. Where these forces are favourable, it generally increases operating profit margin, ROCE and economic value added (see the series on the latter). So in determining strategy it is crucial to look at the five forces past, present and future. Other things being equal, one

AS SOMEONE SAID OF SCENARIO STORYTELLING: ‘WHY THINK ABOUT THE FUTURE? BECAUSE WE ARE GOING TO SPEND THE REST OF OUR LIVES IN IT’ Three kinds of strategy theory The rest of this article will now look at: competitive strategy theory; blue and red ocean theory; scenario theory and game theory. Competitive strategy is a term first coined in 1980 by Harvard professor Michael Porter, who was an economist. In his work Competitive Strategy, Porter looked at a number of different industries and their structures and found that some were inherently more profitable (and thus attractive) to be in than others. He identified five ‘forces’ that were the key indicators of superior performance: the bargaining power of the buyers, ie customers; entry barriers;

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should migrate out of markets or areas of a market that do not look attractive or which are worsening, vis-à-vis Porter’s five indicators.

Multicoloured oceans In 1985 Porter’s second major work (both of which still rank as classics) was Competitive Advantage. Here he addresses the issue that ‘other things are not equal’, especially companies’ competitive positions. Porter’s two books thus highlight two key variables that determine strategic position (past, present and future): A ‘inherent market attractiveness’ – mainly the five forces; B relative competitive position – roughly speaking, strategic


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attractiveness = A plus B, or the sum of these two variables. This is interesting to accountants because strategic attractiveness is a strong indicator of ROCE longer term. HMV would be a graphic case of a business failure waiting to happen on account of these two factors becoming seriously adverse. Later theorists have tried to surpass Porter’s forces by suggesting that the best strategy should be to bypass competitive intensity altogether through identifying market opportunity where there is uncontested space. Quite simply, these are markets where either ‘no one is doing it’ or ‘no one is doing it well’, often in an emergent state. Craftily, these are called ‘blue oceans’ to suggest clear space, in contrast to ‘red oceans’ (Blue Ocean Strategy, Kim and Mauborgne), which are mature markets with lots of sharks and blood. This simplicity appeals to many managers. This colour analogy may seem catchy and appealing, but where exactly is this new space to be found? Maybe 5% tp 10% of the economy at best is of that nature, so for the majority of us that isn’t very helpful. And isn’t much of that idea already wrapped up in the notion of the ‘cunning plan’ that I emphasised last year – for example, through finding new and clever ways to compete? Having just two market states also seems a rather crude division. Indeed, in my book, Demystifying Strategy, I

suggested three other oceans: green, brown and black: green: new markets, old forms of competing; brown: mature markets, aggressive players, profitable; black: perfect competition in contracting market conditions (HMV-land!). So what kind of market is your business in – blue, green, brown, red or black – and does your strategy deal with it well? Again, it is necessary to be watchful of oversimplifications of reality in management theory.

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Scenarios and game theory The final branches of strategy theory are scenarios and game theory. Scenarios are simply self-consistent storylines of the future. They are not projections, but focus on market dynamics, such as new entrants, changes in regulations, product maturity, and shifting methods of competition and distribution. Scenarios are useful for planning over the horizon – for instance, to help support cashflow projections for long-term business valuations (eg for terminal value). Without them, there should be real concerns around sustainable shareholder value creation. Scenarios are constructed around: assumptions about the future, particularly those that are very uncertain or of high importance and thus unstable;

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events that take you from * particular one state of the world to another – the transitional events;

with a chain of events and * storylines a cause-and-effect process; *Inrole-playing. the case of role-playing, this brings in game theory, which combines economics and maths through probabilities and payoffs. For example, one might well need to imagine oneself as a new entrant to the market, or the regulator, or maybe as a key customer, and one by one, the key competitors in the market. Here, one has to imagine actually being those competitors. Without going overboard on the maths, one can actually get some very interesting insights from scenarios – especially ones informed with very simple role-playing from game theory. If you want to learn more, see my Demystifying Strategy, particularly on the scenario dealing with the next London riots – suitably updated for new organisational strategies and tactics by the rioters! I did take the precaution of sending this to the Met police. As someone once said of scenario storytelling: ‘Why think about the future? Because we are going to spend the rest of our lives in it.’ So maybe we should account for that management theory at the very least. Dr Tony Grundy is an independent consultant and trainer, and lectures at Henley Business School www.tonygrundy.com


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Answer questions about this article online Studying this article and answering the questions can count towards your verifiable CPD if you are following the unit route and the content is relevant to your development needs. One hour of learning equates to one unit of CPD

Equity accounting: where’s it at? With IAS 28 now in force, it’s a good time to consider how it affects you. But be prepared – not everything in the standard is as cut and dried as might be hoped, says Graham Holt

In May 2011, the International Accounting Standards Board (IASB) issued a new version of IAS 28, Investments in Associates and Joint Ventures, that requires both joint ventures and associates to be equityaccounted. The standard is effective from 1 January 2013 and entities need to be aware of its implications, although the EU has endorsed IAS 28 from 1 January 2014. An associate is an entity in which the investor has significant influence, but which is neither a subsidiary nor a joint venture of the investor. ‘Significant influence’ is the power to participate in the financial and operating policy decisions of the investee, but not to control those policy decisions. It is presumed to exist when the investor holds at least 20% of the investee’s voting power. If the holding is less than 20%, the entity will be presumed not to have significant influence unless such influence can be clearly demonstrated. A substantial or majority ownership by another investor does not preclude an entity from having significant influence.

Loss of influence An entity loses significant influence over an investee when it loses the power to participate in the financial and operating policy decisions of that investee. The loss of significant influence can occur with or without a change in absolute or relative ownership levels. A joint venture is defined as a joint arrangement where the parties in joint

control have rights to the net assets of the joint arrangement. Associates and joint ventures are accounted for using the equity method unless they meet the criteria to be classified as ‘held for sale’ under IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. On initial recognition, the investment in an associate or a joint venture is recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition.

Investments in associates or joint ventures are classified as non-current assets inclusive of goodwill on acquisition and presented as one-line items in the statement of financial position. The investment is tested for impairment in accordance with IAS 36, Impairment of Assets, as single assets, if there are impairment indicators under IAS 39, Financial Instruments: Recognition and Measurement. The entire carrying amount of the investment is tested for impairment as a single asset – that is, goodwill is not tested separately. The recoverable

A SUBSTANTIAL OR MAJORITY OWNERSHIP BY ANOTHER INVESTOR DOES NOT PRECLUDE AN ENTITY FROM HAVING SIGNIFICANT INFLUENCE IFRS 9, Financial Instruments, does not apply to interests in associates and joint ventures that are accounted for using the equity method. Instruments containing potential voting rights in an associate or a joint venture are accounted for in accordance with IFRS 9 unless they currently give access to the returns associated with an ownership interest in an associate or a joint venture. An entity’s interest in an associate or a joint venture is determined solely on the basis of existing ownership interests and, generally, does not reflect the possible exercise or conversion of potential voting rights.

amount of an investment in an associate is assessed for each individual associate or joint venture, unless the associate or joint venture does not generate cashflows independently. IFRS 5 applies to associates and joint ventures that meet the classification criteria. Any portion of the investment that has not been classified as held for sale is still equity-accounted until the disposal. After disposal, if the retained interest continues to be an associate or joint venture, it is equity-accounted. Under the previous version of the standard, the cessation of significant interest or joint control triggered


TO GET THE QUESTIONS GO TO www.accaglobal.com/framework

remeasurement of any retained investment even where significant influence was succeeded by joint control. IAS 28 now requires that any retained interest is not remeasured. If an entity’s interest in an associate or joint venture is reduced but the equity method continues to be applied, then the entity reclassifies to profit or loss the proportion of the gain or loss previously recognised in other comprehensive income relative to that reduction in ownership interest.

Consolidation parallels The IASB states that many of the procedures appropriate for equity accounting are similar to those for consolidation of entities and the concepts used in accounting for the acquisition of a subsidiary are also applicable to the acquisition of an associate or joint venture. However, it is not always appropriate to apply IFRS 10, Consolidated Financial Statements, or IFRS 3, Business Combinations. There is disagreement over whether equity accounting is a one-line consolidation or a valuation approach. When an associate is impairment-tested, it is treated as a single asset and not as a collection of assets as would be the case under acquisition accounting. Additionally as associates and joint ventures are not part of the group, not all of the consolidation principles will apply in the context of equity accounting.

There is no definition of the cost of an associate or joint venture in IAS 28. There is debate over whether costs should be defined as including the purchase price and other costs directly attributable to the acquisition such as professional fees and other transaction costs. It might be appropriate to include transaction costs in the initial cost of an equity-accounted investment, but IFRS 3 would require these to be expensed if they relate to the acquisition of businesses. IFRS 9 includes directly attributable transaction costs in the initial value of the investment. IAS 28 states that profits and losses resulting from ‘upstream’ and ‘downstream’ transactions between an investor (including its consolidated subsidiaries) and an associate or joint venture are recognised only to the extent of the unrelated investors’ interests in the associate or joint venture. Upstream transactions are sales of assets from an associate to the investor and downstream transactions are sales of assets by the investor to the associate.

Elimination There is no specific guidance on how the elimination should be carried out but generally in the case of downstream transactions any unrealised gains should be eliminated against the carrying value of the associate. In the case of upstream transactions any unrealised gains could be eliminated either against the


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carrying value of the associate or against the asset transferred. The standards are currently unclear on whether this elimination also applies to unrealised gains and losses arising on transfer of subsidiaries, joint ventures and associates. An example would be where an investor sells its subsidiary to its associate and the question would be whether part of the gain on the transaction should be eliminated. There is an inconsistency between guidance dealing with the loss of control of a subsidiary and the restrictions on recognising gains and

venture should be partially recognised. However, any gain or loss arising from the sale of an asset that does constitute a business between an investor and its associate or joint venture should be fully recognised. IFRS 3 defines a business as an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return directly to investors or other owners, members or participants. Under the equity method, the investment is initially recognised at cost and adjusted to recognise the

THERE IS DISAGREEMENT OVER WHETHER EQUITY ACCOUNTING IS A ONE-LINE CONSOLIDATION OR A VALUATION APPROACH losses arising from sales of nonmonetary assets to an associate or a joint venture. IFRS 10 requires recognition of both the realised gain on disposal and the unrealised holding gain on the retained interest. In contrast, IAS 28 requires gains or losses on the sale of a non-monetary asset to an associate or a joint venture to be recognised only to the extent of the other party’s interest. The IASB accordingly issued an exposure draft in December 2012 stating that any gain or loss resulting from the sale of an asset that does not constitute a business between an investor and its associate or joint

investor’s share of the profit or loss and other comprehensive income (OCI) of the investee. Additionally, the investment is reduced by distributions received from the investee. However, IAS 28 is silent on how to treat other changes in the net assets of the investee in the investor’s accounts, which might include: issues of additional share capital to parties other than the investor; buybacks of equity instruments from shareholders other than the investor; writing of a put option over the investee’s own equity instruments to other shareholders;

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units on the web

or sale of non-controlling * purchase interests in the investee’s

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subsidiaries’ equity-settled share-based payments.

Inconsistent The IASB proposed in an exposure draft issued in November 2012 that an investor’s share of certain net asset changes in the investee should be recognised in the investor’s equity. The draft contains an alternative view by one board member who believes the amendment to be inconsistent with the concepts of IAS 1 and IFRS 10, and would cause serious conceptual confusion. This board member believes this short-term solution would not improve financial reporting and would undermine a basic concept of consolidated financial statements. The draft notes that an investor may discontinue the use of the equity method for various reasons including where the investment in the investee becomes a subsidiary or a financial asset. The draft proposes that an investor should reclassify to profit or loss the cumulative amount of other net asset changes previously recognised in the investor’s equity when an investor discontinues the use of the equity method for any reason. Graham Holt is associate dean and head of the accounting, finance and economics department at Manchester Metropolitan University Business School


VISITORS’ REPORT CLOUD APPLICATIONS ARE CHANGING HOW BUSINESSES WORK, INCLUDING THEIR BUILDING SECURITY PROCEDURES, AS FRANCIS COOGAN EXPLAINS It all started one day with a conversation about strangers in a building. Have you ever wondered about the person in the hi-vis jacket or the person with the clipboard walking around your office watching everything? Who are they, what are they doing here and, more importantly, who let them in? Most large organisations have implemented access control and ID badges for staff but still allow non-staff entry through use of a sign-in book or undocumented casual wave-through. The first problem with this, as we saw it, was that once past the entry point, there is no way to correctly identify non-staff and, therefore, impossible to determine the genuine visitor from the intruder.

ENTRY POINT

This was the starting point for the development of the IIVerify ‘Advanced Visitor Management’ solution, a cloud-hosted solution that would enable organisations to track and report on visitors and all non-employees (service partners, contractors and suppliers, etc.) that enter an organisation’s buildings. The ‘advanced’ tag came from our decision to develop a cloud-hosted solution, as this enabled us to design some unique features, the most significant being information sharing. As a cloud-hosted solution, we could allow both parties have access to the entry/exit information. The real value in this was that service providers could now see client verified enter/exit timings for their workforce and this, in turn, eliminated issues regarding payment for services delivered. We then extended the participation of the third-party companies with responsibility sharing, whereby an organisation could sponsor a third-party company onto the

system to enable them to self manage their employee IDs. This removed the burden of managing non-employee access IDs from organisations and allowed the third-party companies to create a single ID that could be validated at every organisation using the IIVerify solution.

EFFECTIVE MANAGEMENT At this point, IIVerify had evolved to allow for client-based workforce management, but this only became apparent when we stopped and looked at IIVerify from a service provider’s point of view. We could now provide service provider companies with a system for the effective management of their workforce on client sites. Put simply, at any of their client locations, where they deploy IIVerify, the captured information can accurately report on all daily entry/exit activities of their workforce personnel and can, therefore, be utilised for payroll information and can be cross-referenced against SLA and maintenance agreements substantiating the on-site attendance and the associate costs for all services with each client. And there’s more – IIVerify will evolve again – we are currently working on additional functions to allow IIVerify to work within another marketplace that we have identified and researched. We believe that our continued evolutionary development and expansion into further markets has only been possible due to our initial decision to create a cloud-hosted solution. Francis Coogan is managing director of Anutech Systems. Find out more at www.iiverify.com


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Clouded judgment The second annual Microsoft/ Amárach Cloud Index shows awareness and adoption rates to be rising in Ireland

The annual Microsoft/Amárach Cloud Index focuses on tracking the adoption of cloud computing amongst organisations in both the public and private sector in Ireland. The second Microsoft/Amárach Cloud Index stands at 3.6 out of 10, up from 3.2 last year. This is based on the mean score for all responses to a question relating to those organisations’ current adoption

of cloud computing. Particularly pronounced is the increase in the average score among organisations with between five and 50 employees, which has moved from 2.4 last year up to 3.8 this year.

Counting the cost Launching the findings of the Microsoft/Amárach Cloud Index in May, Cathriona Hallahan FCCA,

managing director, Microsoft Ireland, said it showed a great deal of evidence that the Irish discourse about the cloud is maturing. ‘An encouraging 40% of those who haven’t adopted the cloud yet are planning to pilot it in areas such as email and document storage.’ The Index found that cost reduction remains the number one reason given for switching to the cloud – as well as

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Clouded judgment The second annual Microsoft/ Amárach Cloud Index shows awareness and adoption rates to be rising in Ireland

The annual Microsoft/Amárach Cloud Index focuses on tracking the adoption of cloud computing amongst organisations in both the public and private sector in Ireland. The second Microsoft/Amárach Cloud Index stands at 3.6 out of 10, up from 3.2 last year. This is based on the mean score for all responses to a question relating to those organisations’ current adoption

of cloud computing. Particularly pronounced is the increase in the average score among organisations with between five and 50 employees, which has moved from 2.4 last year up to 3.8 this year.

Counting the cost Launching the findings of the Microsoft/Amárach Cloud Index in May, Cathriona Hallahan FCCA,

managing director, Microsoft Ireland, said it showed a great deal of evidence that the Irish discourse about the cloud is maturing. ‘An encouraging 40% of those who haven’t adopted the cloud yet are planning to pilot it in areas such as email and document storage.’ The Index found that cost reduction remains the number one reason given for switching to the cloud – as well as


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workforce mobility, efficiency and ease of maintenance. The trend within private sector firms of all sizes and in the public sector is unquestionably towards even greater cloud computing usage. Key findings of the 2013 survey include: 54% of IT decision makers at those firms said they had deployed cloud solutions in their organisations, up from 37% last year. 64% of cloud-adopters said their expectations had been met by the technology. An increase in uptake was particularly evident among companies with between five and 50 employees, where 53% are now using the cloud – up from just 21% one year ago. IT decision makers overwhelmingly said the top benefit of adopting the cloud is the cost saving it allows, followed by greater workplace mobility and efficiency. 67% said that cloud computing could help them address the

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external and business challenges they are facing – up from 55% in 2012. Among those who haven’t deployed the cloud in their organisations, four in 10 intend to engage in a pilot programme within the next nine months. Cloud-based email and document sharing are the primary solutions organisations are considering adopting. 45% said government guidelines would help them as they contemplate cloud adoption.

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Asked to determine the primary barrier to cloud deployment, 57% of IT decision makers pointed to security concerns and 29% to privacy, demonstrating a significant increase on last year’s findings of 39% and 25% respectively. The Index also revealed that 48% of those surveyed see the cloud as a business imperative, rather than simply as an IT solution. This

number reflects the fact that the cloud is now enabling businesses that operate in areas that are completely removed from the IT sector to achieve efficiencies and operate in a superior way. The index highlights that the cloud is also creating new business opportunities. For example, big data is an emerging field linked to cloud computing, which is following a similar path to the cloud; that is, from being a highly specialised service used by a few select technology-oriented firms to a democratised tool deployed by a wide sweep of businesses. A further pointer to the future is the fact that 39% of IT decision makers are already using data analytics, and six in 10 of these believe that it could be improved if it was delivered as part of an existing or new cloud service used by their organisation. Source: Amárach Research


TIME TO BOARD THE BIG RED CLOUD CATHERINE LOCKHARD ON WHY THE CLOUD IS GETTING BIGGER AND BETTER FOR ACCOUNTANTS SMEs are getting a unique chance to grow and expand their business with cloud computing, an emerging computing technology using the internet and central remote servers to maintain data and applications. Software as a service (SaaS) is giving business the flexibility to pick and choose applications – from basic email to whole disk encryption – without requiring an extensive IT department, and the option to roll out more services as and when they are needed. What’s more, with the services being hosted offsite, there is no need for additional hardware investment, and maintenance fees are low to non-existent.

SIMPLE

In a cloud computing system, there’s a significant workload shift. Local computers no longer have to do all the heavy lifting when it comes to running applications. The network of computers that make up the cloud handles them instead. Hardware and software demands on the user’s side decrease. The only thing the user’s computer needs to be able to run is the cloud computing system’s interface software, which can be as simple as a web browser, and the cloud’s network takes care of the rest. There’s a good possibility that you have already used some form of cloud computing. If you have an email account with a web-based email service like Hotmail, Yahoo! Mail or Gmail,

then you’ve had some experience with cloud computing. Instead of running an email program on your computer, you log in to a web email account remotely. The software and storage for your account doesn’t exist on your computer – it’s on the service’s computer cloud.

APPLICATION

One such cloud application is Big Red Cloud – the new Big Red Cloud application is designed to make your accounts even easier to manage and more mobile than ever. You can now log on and view your clients accounts for free from anywhere and almost any device. This simple and easy to use software will allow you to manage your clients invoicing, purchases and VAT in the click of a button and will produce a full trading, profit and loss and balance sheet. Big Red Cloud is hosted on Microsoft’s platform as a service called Windows Azure. Windows Azure is a comprehensive set of storage, computing, and networking infrastructure utilising the Microsoft Azure cloud. Big Red Cloud provides the software for customers to manage their own data. Even though you upload your data onto our service you retain the ownership of that data and are responsible for its accuracy. Catherine Lockhart is sales manager, Big Red Cloud/Book. Email clockhart@bigredbook.com


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LOOKING FOR A NEW JOB? www.accacareers.com/international

E-learning is flexi-learning Undertaking e-learning via the My Development CPD hub is a flexible, convenient and cost-effective way to gain knowledge, as ACCA members who’ve done so can testify We’re constantly improving our member resources to bring relevant solutions to your development needs. Our CPD hub, My Development, brings a range of CPD learning opportunities together in one place including AB articles, CPD articles with multiple-choice questions, e-learning courses, face-to-face events, podcasts, webinars and qualifications from our partners. Here we talk to some ACCA members about their experiences of e-learning and My Development courses.

Cris Blanco

Maryam Morounkeji Maadan

Cris Blanco FCCA Blanco is a director – internal audit at COCESNA in Honduras and used e-learning last year to improve his knowledge in specific areas as well as for CPD units. What are the benefits of e-learning? ‘For me, the main benefit with all e-learning is convenience – being able to access study materials and presentations at the best time for you without the need to travel, or be away from work or family for any length of time. You can also study at your own pace and gain new information which will improve the quality of your work. If you are committed to learning, and hunger for new knowledge, then you can easily get the information and understanding you need through an e-learning course. ‘I find e-learning to be a much more cost-effective way to keep abreast of new developments. The presenters are mainly experts in their field, and the materials and recordings are also often available after the presentations.’

Maryam Morounkeji Maadan ACCA Maadan works at the Central Bank of Nigeria as assistant manager in the macroprudential and trend

analysis division of the financial policy and regulation department. The range of topics offered through My Development allow her to enjoy a varied learning experience while meeting her development needs. What courses have you taken? ‘I have taken e-learning courses on International Financial Reporting Standards, which were open to ACCA members following the unit route for their CPD. I’ve also viewed related ACCA webcasts even though I was unable to see them live due to my work schedule. ‘I’m also making use of e-learning materials on financial risk management provided by Kesdee and I’m planning to enrol on two accountingcpd.net courses, one on grammar and effective writing for accountants, and the other on communicating complex ideas.’

Lamin N’jai FCCA N’jai is a finance officer at a leading international health financing institution in Geneva, Switzerland, focusing on grants to tackle HIV/AIDS, malaria and TB. The demands of his job make it impossible for him to attend classroom-based CPD courses.

Lamin N’jai

What should ACCA members consider when choosing e-learning? ‘As a gentle introduction to e-learning, read the CPD articles in the digital edition of Accounting and Business. Even though these count for only a few CPD units they give you a taste of what e-learning is all about. Then go to one of the main e-learning providers who offer a range of cost-effective courses.’

A final word?

Blanco: ‘It does not matter if you are at home, at work or travelling – all you really need is access to the e-learning site, the chance to focus and listen, and the ability to take notes.’ Maadan: ‘E-learning has been very successful for me and I would advise other members new to e-learning to consider using it because of the benefits it offers, especially in terms of convenience.’ N’jai: ‘I would advise members to look for courses which give you the chance to access archived learning materials or retrieve sessions to review at a later date, as this is a valuable benefit.’ Why not give My Development a try? Visit www.accaglobal.com/CPD


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Dealing with discord [

Many people are uncomfortable with confrontation but just turning a blind eye to conflict in the workplace may lead to simmering resentment and dissatisfaction spreading throughout the business

Handling and resolving conflicts that arise in the workplace is one of the biggest challenges any business can face. Efforts at resolution often produce disastrous results, exacerbating rather than mitigating the situation. This affects the way the business is run, and ultimately its profitability and competitiveness. So is there any way to resolve conflict, or turn it into an opportunity for creativity and enhanced performance?

Identifying trouble spots Workplace conflict doesn’t happen overnight. There are usually contributory circumstances. One of these is the presence of different generations in one environment. Lai Tak Ming, group HR and administrative director of Malaysian construction company Gamuda, says: ‘Businesses are moving towards hiring new, younger graduates. We often see a clash of generational opinions. Younger employees want their opinions to be heard, and older employees often don’t take this kindly. It is sometimes perceived as being disrespectful of someone more senior, or dismissive of his/her more extensive experience.’ Either way, intergenerational conflict is not so detrimental to the business, and can be resolved by helping both older and younger staff to recognise that there is room for different perspectives to exist and to be accommodated. New ideas can work, and the diverse experiences that can be gained only through many years are a good base on which to implement new approaches to old problems. ‘It’s professional and work styles that come more into conflict,’ says Ananthan Chelliah, who runs his own accounting practice in Malaysia. ‘This happens in any environment, and can occur among staff at any level.’

He adds that there have been instances where the same employee has been the cause of the conflict, several times. It is not possible to please everyone all the time but if the concerns of serial conflict-causers are not addressed, it could be detrimental to the business. Dissatisfaction, he says, has a way of spreading throughout the organisation, regardless of whether it is justified or otherwise. One possible solution to a situation like this, he says, could be annual appraisals. Indeed, this is one route many HR practitioners take. It is also a solution that has become more sophisticated, with not just an

can really impact negatively on the business. The major difficulty here primarily involves priorities, resources and the respective perspectives of what is and isn’t important. ‘When departments have to share resources, there will be challenges because every unit has its own priorities and will require the resources to deal with these accordingly,’ Lai says. ‘But resources, being finite, may not be available at the precise time or place when they are needed. Conflict may arise if one department perceives another as having better access to these resources, and thus able to do a better job.’

‘BE OPEN AND ABOVE BOARD; DON’T CONSPIRE TO SABOTAGE OR STIFLE DISCUSSION – THAT’S SETTING YOURSELF UP FOR FAILURE’ appraisal done by the employee’s supervisor, but also the application of what is usually referred to as the ‘360-degree approach’, where a number of subordinates and peers rate an employee on workplace professionalism and engagement. ‘Another way would be to remind employees of the organisation’s goals and aspirations,’ Chelliah suggests. ‘Employees will start to realise if they are aligned to the goals or not, and if being in conflict is helping or hurting. Having clearly defined organisational policies – like staff and workflow policies – and a certain level of red tape sometimes does help resolve conflict as well.’

Departmental discord Intergenerational conflict can be disruptive, but it pales in comparison to internal department problems and cross-departmental rivalry as these

Departmental sensitivities are another point of consideration. If one department perceives itself sidelined in favour of another in the area of resource allocation, for example, this could lead to simmering resentment that will manifest itself in conflict. However, not all conflict is bad. While bad conflict is detrimental to business and the employees embroiled in it, good conflict can impact positively on the firm, particularly if it results in creative, imaginative resolution.

Keep it professional Both Lai and Chelliah point out one important factor: workplace conflict should be confined to professional performance, and personal issues should not come into the picture. Unfortunately, it doesn’t always work that way; it can be difficult to separate personality from performance, and objectivity may be lost.


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‘The people involved in the conflict should be self-aware, to maintain their objectivity,’ explains Lai. ‘If they are, and recognise their roles in resolving it, the problems can be solved. But if they don’t realise what part they are playing, they could exacerbate the conflict or maybe even become the basis of another issue.’ If the problem escalates and the situation becomes untenable, the parties involved may even have to resort to counselling, which will take more effort and resources. Some degree of irrationality is human and therefore to be expected, says Chelliah, but most conflict in the workplace is rational, so there is room for amicable resolution. ‘Generally speaking, it is better to have internal resolution, rather than third-party intervention,’ he says. ‘It takes less time and is less disruptive to the business.’

A question of culture He adds that ideally conflicts should be resolved as soon as they arise. In the Asian context at least, this is not always possible because of a generally non-confrontational culture, and the notion of ‘face’. Not everyone is vocal, and Asian reticence, coupled with a reluctance to articulate problems, may actually mask years of dissatisfaction and simmering resentment. The resolution to conflict stemming from this sort of situation takes substantially more understanding, Lai emphasises. ‘It has to be carefully managed because it probably has a higher degree of emotional disagreement, which tends to lead to more emotional disagreement, in a vicious cycle,’ he says. ‘The alternative is to create a virtuous cycle, which starts with concentrating on things you can agree on.’ Advising the conciliatory approach,

he says that ‘need’ should be distinct from ‘concern’. ‘Need is the rational, practical aspect of the conflict. Concern is less obvious, but it is actually the manifestation of fear and uncertainty,’ he says. ‘You have at least to allay these fears, or there will be no trust – and consequently, no credibility – in the resolution. Sit down, talk about it. One on one is best; don’t pretend the issues don’t exist. Confront them, but quietly, calmly and in a mature manner. ‘Simultaneously, understand the issues, needs and concerns of the parties involved in the conflict. Address and verbalise the underlying concerns – this is often the factor that holds back successful resolution. Even if you cannot fully resolve these concerns, acknowledging them will at least contextualise them and make them manageable.’ In all things, Lai stresses, communication is key. ‘We often shy away from confrontation and think conflict is bad. But this is not necessarily so. Sometimes the Asian culture of “saving face” ends up sweeping things under the carpet, and nothing is resolved. But we can sit down and listen; we don’t have to be blunt and brutal. We can have open discussions in a polite, respectful manner that is mindful of other people’s sensitivities and concerns. Listen first, and understand

the root of the conflict. ‘Show appreciation of others’ opinions, and don’t close your mind to possibilities. Be open and above board; don’t conspire to sabotage or stifle discussion on the subject – that’s setting yourself up for failure. You can confront or concede, but you should never constrict or conspire.’ Majella Gomes, journalist


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Bridging the gap The Institute of Bankers offers a number of educational opportunities of interest to accountants later this year


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The Institute of Bankers in Ireland is the largest professional institute in Ireland with 40 corporate members and over 33,000 individual members working in banking and international financial services in Ireland. The Institute is a centre of excellence in the provision of education in the theory and practice of banking and financial services. It provides the largest continuing professional development (CPD) management system in Ireland, with over 20,000 registered members. Founded in 1989, the Institute is one of the oldest banking institutes in the world. The Institute is a recognised college of University College Dublin (UCD). All educational programmes are offered through its School of Professional Finance, and members who successfully conclude a School of Professional Finance programme receive their academic award from UCD. The School of Professional Finance is offering in September 2013 a number of programmes of particular relevance to accountants. Masters in Risk * Executive Management (Ex MRM) This programme was specifically developed to meet the need to increase the supply of well qualified risk management professionals in Ireland. It covers a broad technical curriculum encompassing the conceptual and quantitative foundations of risk management, and engenders in students a critical understanding of the challenges facing senior management. The programme aims to develop risk professionals with a holistic perspective of the wider implications of risk and risk management. The Ex MRM is accredited by the Professional Risk Managers’ International Association (PRMIA). Graduates of the Ex MRM qualify for significant exemptions from PRMIA’s Professional Risk Manager Certification (PRM™) exams at levels I and II.

Certificate in * Professional Accounting for Financial Instruments This programme consists of two modules delivered in semester two (February to May) of the academic year 2013/14. It examines the valuation of financial instruments and their susceptibility to market risk. It focuses specifically on financial reporting requirements related to derivatives, securitisation and special purpose vehicles, and draws upon theory and practice to evaluate current trends in reporting requirements and critiques potential developments. It is ideal for accountants who wish to develop their skill and competence in this specialist field.

Diploma in * MSc/Graduate Sustainable Investment & Finance This new programme is being offered for the first time in September 2013. It will provide participants with the multidisciplinary skills required in the rapidly developing world of managing and investing in sustainable projects in renewable energy, water, waste management, and sustainable transport. It will address the financial, technical and policy risks underpinning sustainable investment in an integrated way and will link individual projects with the wider policy and institutional environment.


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Careers

Top of the class [

What makes someone a successful finance professional in the 21st century? At a recent event on success hosted by ACCA and Deloitte, we get some top tips from those who have made it to senior roles

Celebrity hairdresser Vidal Sassoon once observed that ‘the only place where success comes before work is in the dictionary’. Indeed, it is difficult to dispute the correlation between success and work, however you earn your living. Most people would agree that hard work is an important ingredient of success, but it is not – as a litany of self-help books remind us – the only ingredient. People who have climbed to the top of the ladder in their field also tend to have defining qualities, ranging from technical expertise to communication skills and, perhaps most vital of all, a positive attitude. Many finance professionals are ambitious and they measure their success by the speed and extent of their career progression. How much

*SECRETS OF SUCCESS

Besides working hard, what can you do to further your career? Add value – Look outside your current role and responsibilities and be proactive. How can you help your organisation to achieve its goals? Build relationships – Keep in touch with as many colleagues and peers as possible as they move on in their careers. They may turn out to be useful contacts or a future employer. Learn constantly – Don’t be afraid to try new things. You’ll be amazed by what you can do. Be different – Find a way to stand out from the crowd, whether that’s through voluntary work or an interesting hobby. Get a mentor – They can bring a fresh perspective to business problems and let you develop.

* *

* * *

responsibility do they have? How prestigious is their firm or company? Have they made partner by the age of 30? If the CFO were to leave tomorrow, would their name be on the shortlist as a replacement? As finance professionals tend to have a natural affiliation with money, they can also associate success with the size of their house, the amount of cash in the bank and the make of their car. But there are other individuals who see success in simpler terms, perhaps as managing to stay married to the same person after a long career involving late nights, lots of stress and interrupted family holidays. Whatever your definition of success, there are some important things to bear in mind as you map out your career in finance. First of all, you need to understand where you fit into the bigger picture within your organisation and work out how you can leverage that to your advantage. ‘Finance is not just about churning out numbers,’ said Mary Reilly, a senior partner in Deloitte’s consumer business division and a panellist at a recent event on success in finance hosted and organised by Tracey Johnson of ACCA and Rosica Solunova of Deloitte. ‘If you do it properly, you can add real value to a business.’ You must also continually invest in your relationships with colleagues and peers both inside and outside your workplace. The proverb ‘it’s not what you know, it’s who you know’ is as applicable to finance as any other business function. ‘The relationships that you build are real currency,’ said Kay White, a communication expert and author of The A to Z of Being Understood, who also spoke at the event. ‘You need to build the relationships as you go along rather than on the day that you need them. And you never know who’s going to be

your next boss so keep yourself on people’s radars.’ It is essential for ambitious finance professionals to have a good awareness of the opportunities presented by their ACCA Qualification and the transferability of their skills. ‘You should never underestimate how valuable your qualification is,’ says Debbie Thomas, a senior advisory partner at Deloitte and another panellist at the event. Meanwhile, ACCA Council member and fellow panellist Sharon Burd believes that to succeed finance professionals must be open to new ideas and prepared to challenge. ‘Don’t just accept what someone has told you at face value,’ she said. ‘Know that through that you are growing.’

Self-examination To make the most of your full potential, there will inevitably be occasions when you need to take a good, hard look at yourself to identify areas that require improvement. Be honest: what are your strengths and weaknesses? Which skills can you build on to make yourself more successful in future? ‘There’s a theory that a constant learner is a high earner,’ White explained. ‘Be prepared to invest in yourself rather than wait for corporate training.’ ‘If there’s an area that you know you are weak at – for example, if you’re afraid of public speaking – take advantage of coaching and mentoring to help gain those skills,’ said Tara Ridgeway FCCA, finance director of Guoman Hotels, who chaired the success event. ‘Otherwise people will bypass you just because they have superior communication skills and can manage relationships better.’ It’s not easy finding a good mentor, but mentoring can make a significant difference to your career progression. The key is to find someone who is at


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Panellists at success in finance event: (from left to right) Sharon Burd, Debbie Thomas, Tara Ridgeway, Kay White and Mary Reilly

‘IF THERE’S AN AREA THAT YOU KNOW YOU ARE WEAK AT, TAKE ADVANTAGE OF COACHING AND MENTORING TO HELP GAIN THOSE SKILLS’ the right level to advise you at this point in your career and with whom you have personal chemistry. ‘I’ve been a mentor with young people,’ said Burd. ‘Sometimes it works; sometimes it doesn’t. But you can get a lot out of it.’

Out of hours Being successful in your career isn’t just about what you do in a professional context. What you achieve outside the office has an important bearing as well. Do you make time for voluntary or community work? Are you involved in any clubs and societies? Do you have an interesting hobby? By leading a fulfilling life outside the workplace, you will become a broader person and stand out from your peers. ‘Having

depth differentiates you,’ said White. Thomas said that when she’s interviewing graduates for the training scheme at Deloitte, she focuses on candidates who are different. ‘I’ve hired graduates who worked on a gap year and spent time in a mine driving trucks.’ She also noted that the graduates who are most proactive tend to be those who go furthest at the firm. ‘Some just float along. Others really take charge and are hungry to get to the next level and better themselves.’ There are lots of pointers to bear in mind when planning for career success. But as you scale the ladder, it is worth reflecting on what success means to you. You may find that what mattered when you were 25 matters less 15 years

later. In 2005, Eugene O’Kelly, the former CEO of the US firm of KPMG, died from a brain tumour aged 53. In Chasing Daylight, the book he wrote during his last days and which was published posthumously, he reflected on some of the experiences he missed out on during his pursuit of corporate glory. O’Kelly was a very successful man, but he only had lunch with his wife on a weekday twice in a decade. As Rabbi Harold Kushner once noted: ‘Nobody on their deathbed has ever said, “I wish I had spent more time at the office”.’ Event co-organiser Rosica Solunova, Sally Percy, assistant journalist manager, Deloitte


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A recent BDO survey of young Irish accounting graduates captures a generation that remains focused on success in the face of adversity

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ACCA news Make it yours

Diary

Help shape the integrated framework to move business reporting forward

BELFAST

With the consultation deadline less than two months away, ACCA is urging business leaders and investors around the world to help shape the future of corporate reporting by responding to a new draft framework for integrated reporting. The International Integrated Reporting Council (IIRC) is keen for as many organisations as possible to respond to the consultation draft of the framework by 15 July to ensure the final framework reflects the needs of an increasingly complex and demanding global market. ACCA believes the framework will be a significant step forward in corporate reporting because of its focus on communicating how an organisation creates value for the long term. This will mean organisations reporting more widely on how they employ various capitals, including financial, human, natural and societal, which is essential to help explain how 21st-century organisations can be run as sustainable businesses. Investors should also note the emphasis in the framework on communicating information about those factors that might affect future performance, as well as on materiality assessments. ACCA says that this can foster the credibility of company reporting by ensuring that the issues addressed in reports are those most material to a full understanding of the organisation’s performance and prospects. ACCA chief executive Helen Brand, a member of the IIRC Council, said: ‘Having already produced our own annual report last year using the integrated reporting principles, we have seen the value this can bring to us as an organisation and to those who rely on our reporting. We believe integrated reporting provides an opportunity for leadership and innovation in the accountancy profession. But it is equally important that reporting organisations and the investor community play a significant role in the consultation since they can ensure their views are heard and that key issues which they might identify can be addressed at an early stage.’ The new framework was extensively covered in last month’s Accounting and Business. For more, go to www.accaglobal.com/framework

NON-FINANCIAL REPORTING ACCA and Deloitte have teamed up with consultancy Lodestar and the Global Reporting Initiative (GRI) to host the Non-Financial Reporting Conference 2013 in London on 28 June. The conference will examine the development of integrated reporting, consider the changing role for finance professionals, and explore the legal consequences of more integrated and transparent disclosures. Details at www. nfrconference.co.uk

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Practitioners Conference 2 8 June 9.30 – 16.00 Practitioners’ Members’ Network Various Speakers Radisson Blu Hotel Seven CPD Units

CORK Business Breakfast 14 June 7.30 – 9.00 Munster Members’ Network Michael McGrath, Spokesperson on Finance, Fianna Fáil Clarion Hotel Two CPD Units

DUBLIN The Changing Role of the Financial Controller 27 June 18.15 – 20.15 Leinster Members’ Network Roger Wallace, Ernst & Young Radisson Royal Blu Two CPD Units


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ACCA news

SME SPECIAL OUT NOW

(From left) chairman of the ACCA Ulster Members’ Network Joan Ballantine; Everest adventurer and motivational speaker Ian Woodall; and Joanne Bloomer from Brightwater, sponsors of ACCA Ulster Members’ Network Chairman’s Lunch in the Ulster Hall, Belfast

SMEs accessing finance easier Research outlined at the ACCA Ulster Members’ Network Chairman’s Lunch has indicated that Northern Ireland’s business owners are finding it easier to access finance than their counterparts in Britain. However, despite the apparent greater success in securing loans and overdrafts, bosses of small and medium-sized enterprises in the region are the least optimistic about their prospects for growth this year, according to a recent BORC Continental survey.

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The critical role played by the finance function in the growth of small and medium-sized enterprises (SMEs) is among the issues explored in a new, special edition of Accounting and Business focusing on the sector. AB.SME also looks at what support is needed to help small businesses further internationalise their activities. Other articles focus on the support that small and medium-sized accountancy practices (SMPs) can offer SMEs, the role of capital markets and sustainability. Sector experts from around the world are among the contributors. ACCA’s head of small business Rosana Mirkovic said: ‘AB.SME looks at some of the important opportunities that remain largely untapped by policymakers and SME owners alike, highlighting the important role of the profession in supporting the potential for further growth, from business support to increasing financial skills and capabilities within SMEs.’ The publication is available at www. accaglobal.com/smallbusiness, along with other resources to help SMEs.


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ACCA news

Inside ACCA 63 Diary 65 News

Connaught Members’ Network event At the ACCA Ireland Connaught Members’ Network event in The Ardilaun Hotel on 16 May are (left to right) Michael Coyle, CEO of Galway Chamber of Commerce; invited guest speaker Noel Smyth, MD of Alburn; and Aengus Burns, chairman of ACCA Ireland Connaught Members Network. Mr Smyth spoke about the challenges of dealing with the financial crisis and the ‘teenager characteristics’ Ireland adopted in its management of the crisis, as well as his hope that Ireland would grow into a ‘mature adult’ and learn from the mistakes of the past. He also spoke about the work of the charity 3Ts, Turn the Tide of Suicide, which he co-founded. The 3Ts is calling for the formation of a suicide prevention authority, based largely on the model of the Road Safety Authority, and is inviting people to visit the www.3ts.ie website, which contains a petition asking the government to adopt a new approach to suicide prevention.

Bill Prasifka, financial services ombudsman, addresses ACCA members and guests at the ACCA Ireland Business Leaders’ Forum on Thursday 9 May 2013 in the Westbury Hotel


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