ab ie (irish edition) – may 2012

ABIETHE MAGAZINE FOR BUSINESS AND FINANCE PROFESSIONALS ACCOUNTING AND BUSINESS IRELAND 05/2012

HIGH-FLYING CFOSHOW TO BE AN ONLINE SENSATION

REACH FOR RECOVERY TOM MURRAY FCCA ON HIS YEAR IN OFFICE

CORPORATE PSYCHOLOGY COMPANIES ON THE COUCHSALARY NEGOTIATIONS DOS AND DON’TS

FUNDS INDUSTRY LOOKING TO GROWTH

PROFIT DOCTORSSOCIAL MEDIA STRATEGIES

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NEW INSIGHTS FROM ACCA

BIN THE CLUTTER CLARITY IN REPORTINGCLEAR VIEWS THINK CLOUD COMPUTING

DIRECTORS’ 101 COMPANY ESSENTIALS

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In this issue of AB Ireland, the impending fl otation of Facebook provides the backdrop to a look at the distinctive role played by CFOs in social media businesses, while incoming ACCA Ireland president Tom Murray talks about the career path that has made him one of Ireland’s foremost insolvency practitioners

BACK TO BASICS ON COMMUNICATIONS A few years ago, when talk of ‘smart government’ and the ‘smart economy’ peppered conversations about the future of Ireland’s economy, increased use of the internet in meeting our tax compliance issues was a given. It is not often that one can accuse the government of moving too fast on an issue but its management of the Household Charge showed, at the very least, a talent for putting the cart before the horse.

The move to online payment of taxes is gaining momentum, and rightly so. Just recently, Revenue announced that, as of June 2012, all VAT returns must now be done online rather than by paper. However, the government’s approach to the Household Charge failed to recognise that, thanks to the PAYE system, the vast majority of people have little to no experience of the bureaucracy around their tax obligations, whether on paper or online. The challenge, then, was not simply that all householders would be paying a tax on property for the first time since the 1970s, but that they would have to take the lead in managing it themselves. In constructing the payment method and the information around it, little thought seems to have been given to those who are not frequent internet users or who do not have access to broadband. Contrast the paucity of information on the charge to the extensive information campaigns around issues such as the change from analog to digital TV and the lack of foresight becomes all the more puzzling.

With a recent announcement by the government that annual statements of account are to be sent to every taxpayer, outlining their contribution to the exchequer and how it is being spent, there is a sense of a government more aware, and appreciative, of the taxpayers’ vital contribution to the delivery of essential public services. A pity then that such considerations were not in evidence as it planned the first of the many new contributions that will be expected from the public in the coming years.

Donal Nugent, [email protected]

RECOVERY MANACCA Ireland president Tom Murray FCCA talks about a career that has taken him to the fore in insolvency practicePage 12

SOCIAL CFOsWith Facebook soon to make its floatation on the stock exchange, a look at what makes the CFO of social media companies special Page 16

UK TAX CHANGESThe UK budget and the introduction of the UK Finance Bill 2012 brought about changes of interest to Irish practitioners 4

GOOD ADVICEMark Westlake offers his perspective on why Irish financial advisers need to take a fresh look at how to best serve their clients Page 36

DIRECTORS 101Offering some essential advice and practical tips for first-time directors, Conor Sweeney looks at the pitfalls to be avoided Page 38

Editor’s choice 3

RECOVERY MAN SOCIAL CFO

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Audit period July 2009 to June 2010138,255

Features12 Reach for recovery ACCA Ireland president Tom Murray FCCA on lessons from the Celtic Tiger and where we are in economic recovery

16 How to be an internet sensation What it takes to be a social media or internet CFO

19 Global economic conditions survey A global assessing of business sentiment undertaken by ACCA

VOLUME 3 ISSUE 5

Ireland editor Donal [email protected] +353 (0)1 289 3305

Editor-in-chief Chris [email protected] +44 (0) 20 7059 5966

Design manager Jackie [email protected] +44 (0) 20 7059 5620

Designers Robert Mills, Barry Sheehan

Production manager Ciaran [email protected] +353 (0) 1 289 3305

Advertising John [email protected] +353 (0) 1 289 3305

Bryan [email protected] +353 (0) 1 289 3305

London advertising James [email protected] +44(0)20 7902 1224

Head of publishing Adam [email protected] +44 (0) 20 7059 5601

Printing RV International

Pictures Corbis

ACCAPresident Dean Westcott FCCADeputy president Barry Cooper FCCAVice-president Martin Turner FCCAChief executive Helen Brand OBE

ACCA IrelandPresident Ronnie Patton FCCADeputy president Tom Murray FCCAVice-president Diarmuid O’Donovan FCCAHead - ACCA Ireland Liz HughesTel +353 (0)1 498 8900 Fax +353 (0)1 496 [email protected]@[email protected]

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 2012

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

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AB IRELAND EDITIONCONTENTS MAY 2012

AB_May_2012.indd 4 24/04/2012 10:58

CPDAccounting and Business is a rich source of CPD. If you read it to keep yourself up to date, it will contribute to your non-verifi able CPD. If you read an article, learn something new and apply that learning in some way, it will contribute to your verifi able 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 verifi able CPD. One hour of learning equates to one unit of CPD. For more, go to www.accaglobal.com/members/cpd

BRIEFING06 News in pictures A different view of recent headlines

08 News in graphicsWe show a story as well as tell it using innovative graphs

10 News round-upA digest of all the latest news and developments

VIEWPOINT21 Landscape painting Dean Westcott on divining the future

22 Into uncharted waters Sean Kelly on the new Personal Insolvency Bill

23 PRACTICE25 The view from Padraig Irwin FCCA

24 The profi t doctors Making effective use of social media

31 CORPORATE27 The view from Carmel M. Burke FCCA

28 Corporate psychology Your company on the couch

YOUR CAREER51 Website revamp showcases CPD

53 Diary

54 Dos and don’ts in salary negotiations

57 The power of public speaking

Regulars

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

Your sector

TECHNICAL30 Technically speaking Aidan Clifford rounds up the changes accountants need to be aware of

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

33 Tax diary Some important tax deadlines ahead

34 Irish and UK tax changes – a round-up

36 Advising the advisers A fresh look at serving clients

38 Essential advice for directors What a new company director needs to know

40 CPD Bin the clutter

44 CPD Weighing up your options

47 Cloud busting Getting up on cloud computing

50 Accounting solutions Advice from PwC experts

ACCA NEWS59 Diversity in the fi nance function

60 Opportunity in the funds industry

62 Future of accountants

64 Election to Council

65 Council notes

66 News

YOUR CAREER

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News in pictures6

01The MS Balmoral arrives in Cobh,

Co. Cork, following the path of the Titanic, to mark the 100th anniversary of the sinking of the ship

02A survey finds that Catholic

Church teaching on sexuality is ‘irrelevant’ to almost three quarters of respondents

03 A piece of toast spat out by One

Direction’s Niall Horan on Australian TV raises almost AUS$100,000 for charity when auctioned on eBay

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7

04 Berliners call for action by the

German government to seize vacant sites at Checkpoint Charlie controlled by Mayo property developers Michael and Cathal Cannon

05The government announces

the creation of Water Ireland, under the auspices of Bord Gáis

06 Ireland is set to play a central

role in the development of China’s first national equine facility (see page 11)

07Dublin’s Christchurch

cathedral appeals for a new generation to join its bell ringing volunteers

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News in graphics8

THIS IS IRELAND – CENSUS 2011 RESULTSFigures from the 2011 census show that Ireland’s population has continued to grow strongly since 2006, increasing by 348,404 to 4,588,252

MORE WOMEN THAN MEN

BORN ABROADResidents born outside Ireland, at 766,770, account for 17% of the population

A MULTI-LINGUAL COUNTRYTop 10 foreign languages spoken in Ireland in 2011, by number of speakers

Biggest nationality increases since 2006 are:

Romanians(+110%)

Polish 119,526

Spanish 22,446

German 27,342

Chinese 15,166

Indians(+91%)

French 56,430

Russian 21,640

Arabic 11,834

Lithuanians (+40%)

Polish(+83%)

Lithuanian 31,635

Romanian 20,625

Italian 10,344

Latvians (+43%)

Men 100 Women 100

Men 98.1 Women 100

2006 sex ratio

2011 sex ratio

Rise in number of divorced people

2002 35,059

2006 59,500

2011 87,770

Source: CSO

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9

KEY: High risk Moderate risk Little or no risk Don’t know

MIND YOUR STEPThe banana skins index, a measure of anxiety levels in the financial sector, is at its highest since it began 13 years ago. Survey respondents say that the greatest threat facing the sector is the fragility of the world economy. The Banking Banana Skins 2012 survey is produced by the Centre for the Study of Financial Innovation and PwC. Figures for 2010 are in brackets.

MOVING ON UP The role of in-house finance teams is under the microscope again as CFOs look to expand their level of influence and encourage innovation and growth. Although the CFO’s role has developed in recent years, most believe that their focus over the next two years must revolve around day-to-day operations and greater engagement with external stakeholders. Respondents to KPMG’s survey From Keeping Score to Adding Value indicate that a number of challenges stand in the way of creating a more forward-looking and integrated finance department.

Organisational complexity

Professional staffing

Finance IT

Ability to respond to change from within

Ability to respond to change from outside

Relationship with other company groups

FEEL THE HEATAsian cities are challenging the top spots in the rankings for most competitive global city, in a survey by the Economist Intelligence Unit for Citigroup, Hot Spots: Benchmarking Global City Competitiveness. Singapore was the highest ranked Asian city out of a field of 120 global markets. US and European cities however remain the world’s most competitive, despite concerns over ageing, infrastructure and large budget deficits.

RANK 1 (4)MACRO

ECONOMIC RISK

1: NEW YORK 2: LONDON 3: SINGAPORE =4: PARIS =4: HONG KONG6: TOKYO 7: ZURICH 8: WASHINGTON 9: CHICAGO 10: BOSTON

RANK 2 (2)CREDITRISK

RANK 3 (5)LIQUIDITY

RANK 7 (–)PROFITABILITY

RANK 8 (7)DERIVATIVES

RANK 9 (12)CORPORATE

GOVERNANCE

RANK 10 (8)QUALITY OF RISK MANAGEMENT

RANK 4 (6)CAPITAL

AVAILABILITY

RANK 5 (1)POLITICAL

INTERFERENCE

RANK 6 (3)REGULATION

18

102

27% 50% 23% 1%

22% 56% 22% 1%

22% 53% 25% 1%

19% 54% 26% 1%

10% 41% 48% 1%

21% 53% 26% 0%

7

3

=4=4

69

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BDO IRELAND EXPANDSBDO Ireland announced in April that it has appointed seven new partners and added 60 new staff in total to its businesses in Dublin and Limerick. The seven partners will lead teams in the company’s corporate recovery and restructuring, corporate finance, consulting, audit, taxation and risk advisory areas, and includes former ACCA Ireland president Brian McEnery FCCA. The announcement brings the total number of BDO’s partners in Ireland to 33 and its total staff number to over 320. Commenting on the expansion, BDO Ireland’s managing partner Derry Gray said: ‘This announcement comes at a time when BDO globally is experiencing record growth. The areas we are focused on are ones our clients have identified as essential to their business needs.’

OPPORTUNITIES INCREASEIrish professional job opportunities increased by 18% in Q1 2012 compared to Q1 2011 according to the Morgan McKinley Irish Employment Monitor. The monitor recorded a month-on-month increase of 9% in the number of new professional job vacancies coming on to the market in March 2012 and an increase of 8% in the number of professional job opportunities

compared to the same month last year. In addition, compared to the same time last year, there was a 57% rise in the number of professionals seeking new job opportunities.

CREDIT GUARANTEE BILL The minister for Jobs, Enterprise and Innovation, Richard Bruton, has published the Credit Guarantee Bill 2012 and announced the appointment of an operator for the Temporary Partial Credit Guarantee Scheme. The Bill, which was agreed by government in April, will provide for the establishment of a targeted Temporary Partial Credit Guarantee Scheme. The next step is its introduction to the Oireachtas, where it is expected to be enacted shortly. The scheme aims to provide credit to job-creating SMEs that are currently struggling to get finance from the banks and will facilitate up to €150m of additional lending per annum, in addition to the lending targets set for the pillar banks.

SENTIMENT RISESThe KBC Bank Ireland/ESRI Consumer Sentiment index rose to 60.6 in March, up from 57 in February. Representing a third monthly gain in a row, the latest figures show consumer sentiment standing at its highest level

since October 2011. However, KBC said its survey findings showed that Irish consumer sentiment remains dampened by perceived obstacles to a return to solid growth in the economy. Meanwhile, the Ulster Bank Construction Purchasing Managers’ index showed continued decline in activity levels in the construction sector in March. However, the rate of decline in activity slowed on the previous month, with new business largely unchanged. Most positively, business sentiment was found to be at its highest since January 2007.

MORE CUTS NEEDEDThe OECD believes that Ireland will need to find up to €13bn more in tax and spending cuts if it is to ease its debt burden significantly. However, even with adjustments of this scale implemented, it will take a generation to bring debt levels down to the 60pc of GDP, as set out in the the new eurozone fiscal compact. In a recently published economic policy paper, the OECD argues that, where tax burdens are already high, spending cuts may do less damage to growth. While Ireland’s required adjustments would be one of the biggest among advanced economies, it says the UK’s requirement is broadly the same.

€50M FOR NEW MARKETSThe government has announced a €50m investment in two new funds to help businesses expand into overseas markets. Under the Development Capital Scheme, the funds will be managed by Enterprise Ireland and, with the additional support of investors, are expected to be worth €150m within a few months. The minister for Jobs, Enterprise and Innovation, Richard Bruton commented, at the launch of the scheme, that: ‘Mid-sized, high-growth Irish companies often do not grow to their potential, often because of a lack of access to the right kind of finance.’

EIRCOM FIRSTEircom’s recent move into examinership is the first of its kind in Europe and the

10 News round-up

BRICS TO USE OWN CURRENCIES The BRICS nations – Brazil, Russia, India, China and South Africa – have agreed to use national currencies for their trade and loan transactions. The decision marks a further move away from dollar dependency by emerging nations, with China’s renminbi becoming increasingly powerful. The move could particularly benefit Africa, which trades extensively with China and for whom transaction costs will now be cut. Standard Bank predicts $100bn a year in Chinese-African trades will be settled in renminbi by 2015; China has announced that the renminbi will be fully internationally convertible by then. China’s trade with India grew by 25% last year and with Russia by 42%.

AB_May_2012.indd 10 24/04/2012 10:59

biggest corporate insolvency, to date, in Europe this year, and the experience offers lessons for all telecoms investors in Europe, according to ratings agency Moody’s. Describing the insolvency of Eircom as a first for a dominant telecoms’ player anywhere in Europe, Moody’s report comments that ‘unlike banks, telecoms do not have systemic importance and are less likely to be bailed out or nationalised in times of stress’.

€500M EIRGRID PLANEnergy infrastructure company EirGrid has announced details of a €500m plan to link electricity supplies between Kildare and Munster, creating a high voltage network that will pass through up to 12 Irish counties. Stretching to at least 250km and supported by pylons every 4km, the proposals will link Cork and Kildare via Wexford. Chief executive of EirGrid Dermot Byrne said the new link was vital and will ‘enable Ireland to shift from a heavy reliance on imported fossil fuels to more sustainable sources of energy’.

WIND FUNDINGThe Irish wind energy industry will require investment of €600m a year for the next eight years if it is to deliver on agreed EU targets. That’s according to Kenneth Matthews, chief executive of the Irish Wind Energy Association, who told a recent conference that institutional investors, among them pension and venture capital funds, are now looking seriously at investing in the sector both in Europe and Ireland. For Ireland to meet the green energy targets agreed with the EU, it will need to grow capacity by 3,750 to 4,000 megawatts between now and 2020, at a cost of approximately €2m per megawatt. ‘There is a clear appetite to invest in wind infrastructure being seen from pension funds, insurance companies and sovereign wealth funds,’ he said.

€100 TO LIVE ONA survey by the Irish League of Credit Unions has offered a glimpse of the hardships being endured by householders across the country,

with a finding that some 47% of Irish householders have only €100 available to spend once bills are paid. The income tracking survey also found that nearly two-thirds of people have less to spend than they did at the same time last year. Other key findings include the fact that 28% of homeowners said they could not afford to pay the household charge and 45% saying they found it difficult to cover the cost of having a car. In all, 57% of people who found it difficult to pay their bills said they were ‘living to work’ rather than ‘working to live’.

HORSES FOR CHINAIreland has won a central role in the development of China’s horse racing industry with the announcement of a €40m export deal as part of the development of the country’s first national equine facility, in Tianjin. The Tianjin Equine Culture City is a €1.5bn project, expected to generate €40m for Ireland over the next three years. The deal is the first Chinese government overseas joint venture in horse racing and breeding.

NORTHERN DECLINENorthern Ireland’s flagging private sector suffered a further setback in

March as latest figures from Ulster Bank’s Purchasing Managers’ Index (PMI) showed an across the board deterioration in business conditions. The PMI measures the performance of local manufacturing, service, construction and retail/wholesale sectors and highlighted a ‘steep and accelerated decline’ in the local private sector, with a fall in sales orders and business activity leading to further job losses.

CENTRAL BANK BUY ANGLOThe Central Bank is reputed to have agreed to buy the half-completed headquarters of the former Anglo Irish Bank on Dublin’s North Wall Quay for approximately €8m. The concrete shell, which is seen by some as an eyesore and others as a symbol of Ireland’s banking and property crash, is being sold by NAMA. While the purchase decision was not official at time of going to press, it is linked to the rapid growth of staff numbers in the Central Bank since the beginning of the banking crisis. Central Bank governor Patrick Honohan said, earlier in the year, that the growing body of staff could no longer be accommodated at the bank’s head office on Dame Street.

11

INSURANCE STANDARD A MUSTThe International Accounting Standards Board (IASB) must prioritise the production of a new insurance standard, argues KPMG. The latest financial reports from global insurers show significant variations in the accountancy practices used, says the firm. ‘The current lack of consistency in the way insurers report their financial results makes it difficult for analysts and investors to analyse and compare insurers’ performance,’ said Mary Trussell, insurance partner at KPMG. ‘In an era where there is tough competition for capital, the complexity and lack of comparability of insurers’ financial reports puts the industry at a disadvantage to other sectors.’ The firm says that convergence ‘is urgently needed in 2013’.

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12 Interview

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REACH FOR RECOVERYWith a career focused on corporate recovery, president of ACCA Ireland Tom Murray FCCA takes up his latest role with timing on his side. He talks to Donal Nugent

As the election of Michael D. Higgins reminded us late last year, presidents of Ireland have the opportunity

to pinpoint a theme for their term of office when they start out. Invariably, these will reflect concerns that have guided their careers and have become, for whatever reason, emblematic of the times. Presidents of ACCA Ireland may have a smaller franchise, but the sense of theme is no less important, particularly with just a year to leave their mark.

With a career at the forefront of corporate recovery, Tom Murray FCCA has the authority of experience to make his voice heard on some of the biggest issues facing our economy today. But insolvency, and the ongoing fallout from the property boom, is far from the only issue that will occupy him in his term of office and he promises a broad and inclusive remit. ‘My goal, over the year, will be to focus on good practice and education, both in our organisation and our profession, and on ensuring ACCA members are resourced to support Irish businesses through these difficult times. I want to make sure that there is a continued throughput of ideas that allows us to give the best possible advice to our clients.’

OpportunityJoining Friel Stafford in 2003, Murray brought an impressive CV – with small practice, Big Four and corporate banking experience – to the table. However, he had never specifically worked in the insolvency or corporate

recovery fields before. It was area that he subsequently ‘took to like a duck to water’ he recalls, but it was, perhaps, an unusual choice for an ambitious professional at the time, given the fact that insolvency, while always an undertow in business life, was far from a headline concern as the economy entered the final, and, as would later become apparent, phoniest, stage of the boom. It was a desire to get back to working with people, rather than any prescience for what lay ahead, that drove Murray to make his choice. ‘I enjoyed what I had been doing up to then, but I wanted to get into consulting and get back to dealing with clients. One of the key strengths I see myself as having is that I am a people person. So I knew I wanted to work for myself, to be client facing and to be, in some way, specialised.’

Getting married and turning 30 in the same year provided a spur for action and Friel Stafford ‘ticked all the boxes,’ he says. ‘I was joining a market leader in a specialised area. It was something that I enjoyed, and I had the opportunity to grow with the firm. The size of the market, at the time, didn’t worry me. Although the number of companies going into liquidation was relatively small, there were still companies that needed specialist advice.’

GrowthNine years later, while Friel Stafford is more than double the size it was then, with some 18 staff members, Murray says the company still sees itself as a boutique firm. ‘Our strategy has always

been to focus on what we do well, and that is working with accountants and bankers, and we’ve grown organically. The vast majority of what we do is in corporate recovery but we’ve been able to develop the business in other ways as well, for example forensic accounting and personal bankruptcy.’ Murray is quick to challenge the misconception that insolvency is the gloomiest end of the gloomy science and says the reality of engagement with clients is that it can often be not only positive, but cathartic. ‘When people set up a business, it becomes a part of their lives. If that business fails, they can find creditors on the phone every day, as well as onerous employee and legal responsibilities to manage. Every day is about fire fighting. When they come to us, it can be like releasing a valve and finding some light at the end of the tunnel.’

That said, the insolvency practitioner is rarely dealing with people at career highpoints and Murray says that managing this, on a daily basis, requires professionalism. ‘There are a number of personality traits that you have to have as an insolvency practitioner and a key thing is not taking people’s problems home with you. As a professional, you also have to be absolutely focused on giving the right advice. It may not be palatable to them, to the bank or, sometimes, even to your own business, but, if you do that, you can be true to the people that you’re working with.’

Positive outcomes are also much greater than people generally realise, he adds. Over the years, up to two-thirds of the companies that have been clients of Friel Stafford have not gone

13

AB_May_2012.indd 13 24/04/2012 10:59

into liquidation. ‘It’s slightly skewed in the current market, for obvious reasons, but a significant proportion don’t have to go down the route of insolvency, because there are other options.’ Reflecting back to the boom years, Murray says that, had people been more honest with themselves, many more businesses would probably have failed earlier, but done so with far less drastic consequences. ‘A lot of what went on through the Celtic Tiger was, unfortunately, not built on solid foundations. There were companies that should have failed much earlier, but were rescued by directors borrowing money on inflated personal assets, which they put back in the company.’ Another issue that has since come home to roost was owner/managers simply expecting too much out of their business. ‘What you often saw was a second generation coming into a business that was booming and, suddenly, it was funding two families – with two generations taking MD salaries out of it.’

14

The CV2012

President, ACCA Ireland

2008Becomes a partner in Friel Stafford.

2003 Joins Friel Stafford.

1997Becomes a member of ACCA.

1990First accountancy job with Howlin O’Rourke & Co.

AB_May_2012.indd 14 24/04/2012 10:59

While some behaviour can seem almost inexplicable now, he points to a culture that put enormous pressure on individuals running businesses to succeed and to be seen to succeed, and a culture of groupthink where hard questions were ignored. ‘Some individuals took on the roles of directors without fully appreciating what that would mean. In the vast majority of cases that we have encountered, directors were honest in their dealings, but whether they were responsible is another matter. It may have been lack of information, lack of education or lack of awareness of what the role actually involved, but I think it is something that, as professional advisers, accountants should perhaps reflect on. There are individuals out there who maybe didn’t get the quality of advice they needed and didn’t know the extent of their responsibilities.’

Off shootsAs the market for corporate recovery services has grown, so too has the competition. Murray welcomes the provisions of the new Companies Consolidation and Reform Bill, whereby, to become an insolvency practitioner, you must be an accountant, a solicitor or be shown to have relevant experience. ‘One of the issues at the moment is individuals taking up appointments with no experience. They think insolvency is straightforward and soon realise it is not. Appointing people who don’t know what they’re doing is a false economy that can end up costing creditors dearly.’

The proposed changes to Ireland’s Victorian bankruptcy legislation are also broadly welcomed by Murray, but he has his concerns. ‘The three-year bankruptcy period is a welcome change from the old 12 years, but I believe a lot of people will still say “we can drive 90 minutes up the road and it is only 12 months”, so I don’t think it is enough to combat forum shopping.’ The €3m

The basics: FRIEL STAFFORD

2008Tom Murray becomes partner in the firm.

2000www.frielstafford.ie is launched, offering insolvency and corporate recovery information.

1998The firm establishes a free confidential helpline for professionals dealing with insolvency.

1994Set up by managing partner Jim Stafford as a niche corporate recovery and insolvency boutique.

limit on the personal insolvency arrangements will also prove to be inadequate, he argues. ‘I think if you acknowledge that €3m was the price of a couple of sites in certain parts of Dublin only a few years ago, you see how limited it is. I would have thought €8-9m would be more appropriate.’ That said, he acknowledges ‘you are not going to get a solution that suits all sectors – accountants, bankers or debtors, and, all in all, the provisions are largely positive.’

CareerOriginally from Portmarnock, north Co. Dublin, Murray had an interest in accounting from an early age but, throughout his school years, saw his career developing in quite a different direction. ‘I wanted a career in art, but talent and ambition are two entirely different things. I didn’t have a real focus and just enjoyed it.’ The more pragmatic option of accounting emerged through his first summer job after leaving school. Joining Howlin O’Rourke & Co. for a few months in 1990, he found he had an aptitude for the role and enjoyed it, and ended up staying there for four years. It was during his time with Howlin O’Rourke, that he commenced his ACCA exams. Murray’s involvement on the organisational side began in 1997 when he joined the Leinster Society. Having been part of the Practitioners’ Network for the last four years, Murray has seen, close up, the level of participation and interest in ACCA events and, as ACCA Ireland president, he is looking forward to interaction with members throughout the country. ‘It is a stated goal of mine that I want to spend time with all the regional societies and meet as many members as I can throughout the 32 counties, and understand what they want from ACCA.’

While he will, undoubtedly, be called on to reflect on the economic

challenges ahead, Murray says that, if anything encourages him, it is the extent to which the companies that come to him are focused not just on survival but growth. ‘There is an appetite to see what skills their businesses are lacking and to develop them.’ If his extensive experience can be distilled into any single piece of wisdom, it is surely to act early, he says. ‘A significant proportion of companies that come to us don’t go into liquidation because of this. The great thing is, if you don’t hit the right solution first time, because you have acted quickly, you can possibly get a second or third go at trading your way out of difficulties. When you have clarity on what you are doing, you can understand how to do it better and that’s where we accountants, as business advisers, come in.’

15

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Facebook is going public. In an IPO that could value the company at a possible $100bn, the social media giant is set

to cease being a private company and have its shares traded publicly.

For investors the flotation, expected in May, is one of the most eagerly anticipated launches in years and the event will place new strains on the company’s management, including Mark Zuckerberg, its wunderkind founder and CEO.

Attention tends to focus on the heads of internet and social media enterprises. Facebook’s genesis and Zuckerberg’s character have been dissected in a Hollywood movie, but many of the others have had reams written and said about them. Larry Page and Sergey Brin of Google, Reid Hoffman of LinkedIn, Yahoo!’s Jerry Yang and David Filo have all been subjected to intense media attention and analysis. How did they do it, where did they come from, what do they know? All questions associated with trying to understand how these internet and social media businesses got up and running, and proved to be so successful.

But they didn’t do it alone. At some point even computer nerds need the help of someone who knows about finance, someone who can do the financial modeling and who will understand how much money the company will need and where to get it. Enter the chief financial officer.

Potential differenceYes, every dotcom needs a finance chief. But, with their high reliance on advanced technologies, youthful

cultures, unique insight into the behaviour of their customers, their stratospheric growth rates and tendency to target, or even create, hitherto unexploited markets, dotcoms have the potential to be very different in nature from more traditional companies. That could mean a CFO has to be of a different sort too, willing to work in a different way to finance leaders in mainstream companies.

Christian Jennings, finance director at moonpig.com, says: ‘Every business is fundamentally the same in terms of its principles. You create a product or service that consumers buy. However, the dynamic of a dotcom is very different.’ Bearing that in mind, it’s

worth taking a look at the background of CFOs at some of the most high-profile internet and social media companies to see where they come from. After all, it is their experience that will provide the career springboard into these top dotcom jobs.

What stands out immediately is that internet experience is not a prerequisite for occupying the finance chair at a company based online. A quick glance at Facebook, Google, LinkedIn and Yahoo! reveals CFOs that have very mixed backgrounds. Indeed, only one, Steve Sordello at LinkedIn, is steeped in the world of dotcoms with time spent as CFO at TiVo and Ask Jeeves, the internet search engine.

The others come from quite diverse backgrounds. Yahoo!’s Tim Morse, was at Altera Corp, which makes chips and components for computers. Of the four, Patrick Pichette at Google comes from the biggest former employer, having once been vice president in charge of finance and other functions at Bell, the Canadian telecommunications giant providing traditional landline and mobile phone infrastructure, and internet services.

Perhaps most interesting is David Ebersman, CFO at Facebook, who at only 41 is already Zuckerberg’s senior by 14 years. Ebersman comes from a biotech background, having previously been CFO at Genentech, the maker of cancer drugs, among other medicines.

All would have had a heavy focus on research and development and knowing how to understand it’s cost and when

HOW TO BE AN INTERNET SENSATIONWhether it’s a giant like Facebook or a small online startup in its infancy, every dotcom needs a fi nance chief, but what does it take to be a social media or internet CFO?

‘THERE ARE PEOPLE WHO ARE INCREDIBLYTALENTED IN LARGE COMPANIES WHO AREDISASTROUS IN SMALL COMPANIES. THOSE PEOPLEDON’T PERFORM WELL WITH FREQUENT CHANGE’

16

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17

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it will make a return. And almost all would have had public company experience, essential for an ambitious internet company looking to go public.

It’s important because the demands on CFOs in internet-based companies come in two parts. The early fast-growth stage, followed by a more mature stage in which flotations happen and when expansion will not only be about organic growth, but also acquisitions.

It is this nascent stage where many finance chiefs begin. Francis Costello, chief operating officer at the San Diego-based StockTwits, a kind of Twitter for stock market investors, is a former management consultant who also runs the finance department. His lack of a formal accounting qualification is not uncommon among internet businesses.

‘We are not terribly financially complicated, so you don’t need the high-powered pure CFO,’ he says.

Keep it runningHowever, finance is high on his agenda. Core to the finance expert’s brief is ensuring there is enough money to keep the business running as it grows its user base and customers.

‘You’ve got to make sure that raising capital is aligned with business strategy. The most important thing is having a financing plan that matches the operating plan,’ says Costello.

For a more traditional bricks-and-mortar business that would sound like stating the obvious. After all, business plans might be set for three to five years at a time. But for the young business (StockTwits was founded in 2008), business plans can be redrawn at frequent intervals as the startup learns more about its market and how its consumers behave with its service.

‘The velocity of change is how frequently you tear up the plan and rewrite it,’ says Costello. ‘That could be dramatically rewriting plans every six months.’

Costello suggests, however, that revision of the plan can happen even quicker, possibly even every 60 days, depending on accounting periods. It means, of course, that when adjustments come around so often,

forecasting becomes a deadly serious business for the finance chief.

Headhunters tasked with finding the next generation of CFOs also recognise the demands they face. Kate Butler, a specialist with recruitment experts Russell Reynolds in placing technology CFOs, says many skills are required by finance leaders for internet companies that become big publicly quoted businesses, including knowledge of governance and acquisitions. But some of the key demands remain the same.

Evolving environment‘It’s about working in a fast environment that is constantly evolving,’ she adds. ‘You will be working with entrepreneurial people who are prepared to take a risk and back their idea with money.’

She insists that finance chiefs are moving to internet companies from more traditional companies because dotcoms and social media outfits simply cannot find enough talent within their own ranks.

But it takes work to adapt and some changes have to be taken on the chin. Cultural differences mean

dotcoms require quite a different approach. ‘People just muck in and take responsibility whatever their core job description and don’t get obsessed with job titles,’ says Butler. She adds that moving to a dotcom is about ‘being shifted from working with a huge team and budget to being very hands on, but also being strategic.’

Impressing internet employers is therefore not about how many people were on your team and the structures you created, but your knowledge of the business and its drivers.

‘You need to talk about the numbers and show your understanding of the business, in terms of the challenges. As opposed to talking about managing a large team with a financial controller,’ concludes Butler.

Francis Costello sums it up. ‘There are people who are incredibly talented in large companies who are disastrous in small companies. Those people don’t perform well with frequent change or by doing stuff themselves and being more resourceful, instead of doing things by the book.’

Gavin Hinks, journalist

Patricia Forde ACCA is finance manager for SkillPages, an international website designed to make finding people with particular skills easier. The company has its European headquarters in Dublin.

‘In the current environment, working in finance in a social media company is a very dynamic and exciting marketplace to be in,’ she comments. ‘Social media finance is a more varied area to work in than more traditional accounting sectors, which tend to focus on processes and historic financial transactions.’

Forde adds that, although finance roles in social media/internet companies do involve traditional accounting methods, ‘they can also focus on the performance management of the business as a whole. The finance team plays a significant part in the strategic direction of the company and, overall, tends to be involved in all parts of the business and not just the core financial areas’.

The nature of online businesses also means they ably fulfil the accountant’s desire for clarity in at least one respect: ‘With digital, everything can be measured and accounted for, so it all comes down to metrics. You can adapt your spend according to what works very easily, because you have the evidence of what works and where your consumers are interacting.’ In terms of job satisfaction, Forde says ‘every day is different and ever-changing. It’s a great space to work within and being a member of ACCA really helps me in my role on a daily basis’.

*DOWN TO METRICS

18

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19Taking the pulse of the global economy

In his regular quarterly report, ACCA’s Manos Schizas sees a new-found optimism among professional accountants around the world

When the results for the third anniversary edition of the Global Economic Conditions Survey came in last week, I must admit I was sceptical. The share of respondents reporting confidence gains in their own organisations had nearly doubled from 16% to 29%, and while the majority (54%) still believed that the global economy was deteriorating or stagnating, that figure was down from 73% in the previous quarter. Fearing embarrassment, I started ticking off objections.

Turns out that the rise in confidence was not due to biases in the sample. Nor was it skewed by one or two days of positive newsflow; it was based not only on perceptions but also on fundamental improvements in demand, business dynamism and access to finance. It was reflected in rising investment and employment. It was consistent across regions and industries, although the Americas and Western Europe seemed to have benefited the most, as did manufacturers and distributors, particularly in the high-tech sectors. Business dynamism has risen the most in the Americas and Asia Pacific, while Africa, still ahead of the rest on

A NEW-FOUND DYNAMISM CANBE SEEN IN MANY DEVELOPING AND TRANSITION ECONOMIES

the confidence scoreboard, seems to be losing ground.

Governments have helped too, even though members generally think that many major economies, including both the US and its straight man, China, are over-spending. On the other hand, policymakers hoping to deliver growth despite austerity in Western Europe and elsewhere have been frustrated in their efforts.

Much more encouraging is the fact that a new-found dynamism can be seen in many developing and transition economies, with businesses securing new orders where previously they would not have. In the Asia Pacific region and the Americas this has led to a bounce in investment and new hires. This is a very welcome trend; investment has been subdued since the end of the ‘green shoots’ stage of the global recovery, which lasted from mid-2009 to mid-2010.

This investment is focusing on two kinds of opportunities in particular. Customer insights, namely the need to understand and benefit from spending decisions under new constraints, is one; the other is supply chain optimisation through deepening relationships and a stronger focus on quality.

It’s as though iPad sales were driving the entire world economy. I’m not even sure they don’t any more.

The dark side of this new-found dynamism, however, is rising input prices. If even this very timid recovery is accompanied by rising inflation, then a full-blown recovery is likely to provide a challenge for central banks and other policymakers. And when interest rates are forced up again, both business and sovereigns had better be ready.

*THE VIEW FROM IRELANDThe last quarter saw business confidence rise faster in Ireland than elsewhere in Europe. The share of respondents reporting confidence gains doubled to 25%. However, austerity is worrying accountants. Only 22% believe government will get spending over the next five years ‘right’, down from 40% three months ago.

Most (58%) believe that government will spend less than necessary, up from 44%. Financing problems and poor demand have taken their toll on cashflow, with most respondents reporting concerns about late payment (51%) and customers going out of business (57%). Both are more common here than in any other major ACCA/IMA market.

*THE VIEW FROM *THE VIEW FROM *

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20

-13THE DANGER DOWNPOINT

THE ACCA/IMA GLOBAL ECONOMIC CONDITIONS SURVEY – HOW TO TAKE PART

-13THE DANGER DOWNPOINT

GLO

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1 REVENUES FALLING2 GLOBAL ECONOMY SEEN AS

MAKING PROGRESS3 NEW ORDERS FALLING4 VERY GOOD POLICIES5 VALUE-ADDED BUSINESS

OPPORTUNITIES6 AUSTERITY7 SECTOR-SPECIFIC FACTORS8 POOR POLICIES9 ACCESS TO GROWTH CAPITAL10 BUSINESS SIZE11 UNSTABLE CUSTOMERS

The views of ACCA members are highly valued and receive widespread media coverage. The Q4 2011 survey was quoted in the press around the

world more than 500 times. So why not have your say when the next quarterly survey opens on 11 May? Everyone can participate – simply look for the link

in AB Direct or watch out for the email invitation. The survey is carried out in association with the US-based Institute of Management Accountants (IMA).

WHAT INFLUENCES CONFIDENCE?

302010

0-10-20-30-40-50-60-70-80

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012

0-10-20-30-40-50-60-70-80

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012

THE ACCA CONFIDENCE INDEXBusiness confi dence remains in negative territory. The graphics show the percentage of respondents saying they have gained business confi dence, minus those who have lost it.

The ACCA Confidence Index correlates strongly with economic growth globally. A reading of below -13 suggests the economies of the developed world are contracting and the global economy is slowing to a halt.

Mor

e si

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TAKING THE GLOBAL TEMPERATUREBreaking down the ACCA Confidence Index geographically reveals some striking variations, with members in Africa still showing most confidence.

The ACCA/IMA Global Economic Conditions Survey follows 38 different indicators of trading conditions and firms’ responses to them, as well as two indices of business confidence and perceptions of the global economy. In the list of factors shown here, we’ve used statistics in order to tease out the effects of different aspects of the business environment, both positive and negative, on confidence.

GLO

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-3G

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4

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TAKING THE GLOBAL TEMPERATUREGLOBAL TEMPERATUREGLOBALBreaking down the ACCA Confidence Index geographically reveals some striking variations, with members in Africa still showing most confidence.

Total Q1 2009–Q1 2012 sample: 20,881 responses from ACCA members around the world

1 REVENUES FALLING2 GLOBAL ECONOMY SEEN AS

MAKING PROGRESS3 NEW ORDERS FALLING4 VERY GOOD POLICIES5 VALUE-ADDED BUSINESS

OPPORTUNITIES6 AUSTERITY7 SECTOR-SPECIFIC FACTORS8 POOR POLICIES9 ACCESS TO GROWTH CAPITAL10 BUSINESS SIZE11 UNSTABLE CUSTOMERS

WHAT INFLUENCES CONFIDENCE?

Mor

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flue

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on c

onfi

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ce

The ACCA/IMA Global Economic Conditions Survey follows 38 different indicators of trading conditions and firms’ responses to them, as well as two indices of business confidence and perceptions of the global economy. In the list of factors shown here, we’ve used statistics in order to tease out the effects of different aspects of the business environment, both positive and negative, on confidence.

AB_May_2012.indd 20 24/04/2012 10:59

21

Landscape painting

[Divining the business landscape of the future is a tricky art, but ACCA’s global forums can help, says president Dean Westcott

Near the back of this edition you will find an article from ACCA’s new Accountancy Futures Academy, which looks at what will shape the professional landscape of the future and what we need to do to ensure we and our businesses are prepared.

It is critical that an organisation like ACCA has a means of bringing together expert opinion to provide a long-range forecast of the business climate, and the academy, along with the other global forums, has a vital role to play in highlighting the key trends along with the driving forces and ideas that will shape our profession.

We can make some educated guesses about the future. We know that there is a shift in economic influence from west to east and from north to south. Technological advances could result in core accounting functions being automated, meaning that accountants will need to be well placed to offer more analysis and judgment on the information which is produced.

The first symposium for all global forum chairs, which took place in London recently, addressed the pressing challenges and opportunities facing us. Forum chairs said that the profession needs to restore public trust and confidence, as well as avoid being so overwhelmed by the need for regulatory compliance that it loses the ability to contribute to business performance.

These challenges show the way to opportunities. In the corporate sector, for example, there is an opportunity to redefine the role of the finance professional, with accountants having the potential to take a lead role in areas such as risk management and corporate governance.

By drawing on ACCA’s longstanding core values, the global forums will make major contributions to a number of debates and will not only reflect on but influence policy and remind the public, businesses and government of the enduring value that accounting professionals bring to the table.

Articulating this value is not easy when the profession is under stress. It will mean challenging the forces which are pushing accountants towards over-emphasis on compliance. But I am sure that the forums will help us meet this challenge and will support us in setting out how much public value we bring to the table.

Dean Westcott, ACCA president and interim CFO, West Essex Clinical Commissioning Group, UK

Comment

AB_May_2012.indd 21 24/04/2012 10:59

22 Comment

Into uncharted waters [While there is much to welcome in the new Personal Insolvency Bill, it needs

greater consideration before being enacted, according to Sean Kelly

The new Personal Insolvency Bill is a far-reaching, radical and innovative development for dealing with personal insolvency and bankruptcy in Ireland. It has novel and unexpected aspects that will have considerable implications for the economic life of the country. The most controversial of the new relief concepts is the Personal Insolvency Arrangement (PIA), which is tailored particularly for mortgage holders with substantial arrears on their loans and who are in negative equity. A number of significant issues need to be considered in relation to the PIA before the legislation is enacted.

Rights erodedSecured transactions, that is mortgages, have always been viewed as a system of law that endeavours to assure that the debt will be fully paid. Secured lending is concerned with maximising the value of the particular secured property of the debtor for the benefit of an individual creditor, i.e., the bank. Historically, the way to recover secured debt such as home loans was to seize and

repossess the property and to force the borrower into bankruptcy, if deemed necessary, to recover the outstanding indebtedness. The introduction of the PIA will bring banks and the Irish legal system into unchartered waters as it will result in the rights of secured creditors being eroded. However, the current reality is that the public interest now demands that this be done. In addition, the banks will, in effect, have a right of veto over the arrangement as the debtor will need 75% of his or her creditors to agree to the arrangement. Many would claim that the proposed PIA merely constitutes the legal enforcement of existing individual private agreements that are being made between mortgage holders and their banks. So, why force the individual into a lengthy six-year legal arrangement? This period seems unduly protracted and offers little incentive for the borrower to go for a lengthy period of economic hardship, particularly as the 12-year term of bankruptcy has been reduced to three.

ConsiderationThe government appears to believe

that there is a strong desire among a majority of insolvent homeowners to keep their homes regardless of their financial circumstances. However, this may not necessarily be the case as a result of increasing taxation and costs, reduced services and the rise in negative equity. In these circumstances, it is likely that a substantial number of borrowers may actually wish to lose their homes and the accompanying mortgages. Many borrowers may prefer to use their income to rent an alternative property rather than to put it into a six-year-long scheme of arrangement. The proposed new PIA provides the outlines of a potential solution to the huge problem of personal mortgage debt by creating an environment in which deals can be done and bankruptcy avoided, but considerable further thought needs to be given to this proposal before the legislation is enacted.

Sean Kelly is director, restructuring and insolvency department, RSM Farrell Grant Sparks. Email [email protected]

AB_May_2012.indd 22 24/04/2012 10:59

24 The profi t doctors Effective use of Twitter and Facebook

27 The view from Carmel M Burke and corporate psychology – your company on the couch

23Practice

The view from:Athlone: Padraig Irwin FCCA, Patrick J Irwin & Co.

Q What lessons have you learned about business?A Whether it is in our DNA or our training, I think a lot of accounting professionals are reluctant to embrace change and differing perspectives. Clients, today, need reassurance and guidance as they try to restore stability and growth to their businesses. Accountants can be at the core of that process and, without impinging on our independent ethical responsibilities, I think it is important for those of us in practice to build closer working relationships with our clients. Such advisory activity must not focus just on the numbers, but also on the processes required to deliver sustainable business activity and profitability. That fact will almost certainly require us to engage with service providers other than our clients on a more regular and in a more congruent manner.

Q What tips would you pass on to others?A Don’t be a slave to the billable hour. By helping clients through difficult times there are opportunities for value-added fees in such areas as debt restructuring, taxation and business restructures, revenue payment negotiations and the nuts and bolts of guiding a business back to profitability. There comes a time when a client’s business is at the end of the road. Ultimately, it is best if they make a timely cessation decision but you can assist by giving your opinion on the futility of flogging a dead horse.

Otherwise, it ends up costing more for all involved. The entrepreneurial survival instinct of the traditional SME owner is very strong. Many will admirably, dust themselves down and get going again.

Q What do you see as your key challenges for the year ahead?A Securing new clients and business to replace those that, unfortunately, have not survived to date, while also continuing to build closer relationships with existing clients, while trying to selectively network to attract new clients. I firmly believe one of the greatest challenges most people in the country will face in the coming years is the issue of taxation in all its guises. The widening tax base and increase in overall tax rates is already with us. However, the increased power given to Revenue in recent years is an issue most of us have not even begun to contemplate.

Q Tell us about Patrick J Irwin & Co.?A I am a sole practitioner with a small but fairly diverse client base. Being a sole practitioner is hard work and can be a lonely existence, so I am very grateful for the support and camaraderie of the ACCA network. That said, I would like to think that most of my clients view me as someone who helps them to get solutions to some of the issues they face on a day-to-day basis and to deal with future planning issues.

The profi t doctors

AB_May_2012.indd 23 24/04/2012 10:59

Q I run a mid-sized accounting firm and am trying to expand my business. Everyone seems to be talking about social media, but I’m reluctant as I’ve heard both good and bad things. My main concern is that I don’t want to appear frivolous and unprofessional.

JULIA Social media is just one element of digital marketing. Digital or online marketing is an essential part of every company’s business plan. Without doubt, people are researching professional services companies online before deciding which one to use.

DAVID A good place to start is to find out whether people are talking about you. Type your company’s name into

a search engine (such as Google or Bing) to see what, if anything, people are saying about your firm. Then type in a generic industry word for your company and your area (eg ‘accountancy, Orpington’) to see how you stack up against competitors.

If you do not appear on the first few pages of the search engine’s hits, you may want to invest in SEO (search engine optimisation) to improve your position in the listings. Another route is PPC (pay per click) advertising, which lets you place adverts on relevant websites to attract prospects to your site. Your website is your company’s online face, but to be seen it needs visitors. Your goal is to drive traffic.

The profi t doctorsJulia Payne and David Bowler of Incisive Edge explainhow to make effective use of Twitter and Facebook, and harness social media in your digital marketing

JULIA With social media, remember that you are talking to real people, in real time. It lets you listen to and engage with your target audience. It’s about creating a relationship and building trust with both your prospective and actual client base.

The upside here is that you have a potential audience of millions just waiting to engage; the downside is that you need to think before you type. If you’re a celebrity, people may well be interested in your innermost thoughts, but if you’re not, then your content must be appropriate and interesting, attracting individuals to find out more.

Preparation can be time-consuming and returns may not be immediate, but if you get it right, social media can be

Q: SHOULD WE BE USING SOCIAL MEDIA? A: YOU’D BE MAD NOT TO

24 Practice

AB_May_2012.indd 24 24/04/2012 11:00

25

Q: AM I BEING A TWIT ON TWITTER? A: TWEET AS A PERSON, NOT AS A BUSINESSQ I can’t seem to get the hang of Twitter. What am I doing wrong?

David Bowler and Julia Payne, the profit doctors, are co-founders of Incisive Edge – revenue generation specialists delivering results-led strategy, sales, marketing and digital expertise for ambitious companies. www.incisive-edge.com

DAVID Congratulations on being one step ahead of most of your competitors. Even though everyone’s talking about Twitter, not everyone is tweeting or, if they are, they’re not tweeting effectively. Yet it’s such an easy thing to do. It is currently an underused B2B tool, although it will not remain that way for long. Persist and get the hang of it now, so you’re one step ahead of your competitors.

JULIA Set goals. If you are using Twitter as part of a marketing initiative, make sure there is a strategy, however simple. Tactical attempts at social media – for example, just tweeting randomly – don’t add significant value to your audience and are usually too company-focused.

Your social strategy needs to put your clients at its heart, centring on their needs rather than yours. Begin by understanding how both your clients and relevant influencers use social media. Do you know who they are, what they like and what inspires them? Remember, people come first.

DAVID A personality in social media is a must. People buy from people, not companies. Work to engage with others on Twitter, and write as a person rather than as a business. Nobody is interested in jargon, terminology or brand-speak, no matter how exciting you may find it. If your tweets are relevant, concise, helpful and regular, others will look out for them and will

a cost-effective (and hugely successful) marketing and lead-generation machine. Effective strategies can generate significant results in weeks.

DAVID As tempting as it may be to tell everyone how wonderful your company is, the most successful social media campaigns are subtle and interactive. Share information simply to be helpful. Linkedin, Twitter, Google and Facebook are all B2B tools. Spend time setting up your profile on each, focusing on getting the tone right and then have fun. Start by targeting your local audience and then broaden out. Engage, listen, assist and inform, while gently reminding your audience of the merits of your firm. When they next need help, your name may be the one that springs to mind.

‘retweet’ (forward your tweets on to their audience), and recommend you.

JULIA Relevance is vital. Ensure you tie your content back to what’s going on in your local market and the wider industry. The Holy Grail of social media is to become a thought-leader in your industry. Lead from the front with your opinion, but remember: not all publicity is good publicity, so stay on the right side of controversial.

DAVID Social media is also the ideal tool to engage with existing clients. They are very well informed about the services your company offers and can also offer their personal insights, which may help prospects decide in your favour. Assuming that you have

delivered on your promises, existing clients should also be disposed to buying more of your services, so there can also be an opportunity to up-sell and cross-sell.

DAVID Twitter, as with any form of social media, is only truly valuable in providing return on investment when it is both tracked and measured. While financial analysis may require commercial tools, at the very least set key performance indicators, so you can compare the viability and success of your social media campaign, not only as part of your marketing strategy but as part of your overall company strategy. If you don’t know your Klout score, you should.

THE HOLY GRAIL OF SOCIAL MEDIA IS TO BECOME ATHOUGHT LEADER IN YOUR PARTICULAR INDUSTRY

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28 Corporate psychology – your company on the couch

23 The view from Padraig Irwin and The profi t doctors – effective use of Twitter and Facebook

The view from:Dublin: Carmel M Burke FCCA, director, Laztech

Q What lessons have you learned about business?A Timing and strategy are crucial. A new product or service idea may be just what the market needs, but the market may not be ready. Very often the second to market steals the show. They have learned from the ice breaker’s experiences and the market is now more accepting that the product or service is just what they need. Being aware of what your competitors are doing is ‘past tense’, you need to be ahead of what they are planning to do. Regular consideration of innovation and rejuvenation will keep you on top of a product brand war.

Q What tips would you pass on to others?A Listen to everything your clients say and create a culture where everyone in your company listens to all comments and feedback accurately and quickly. People rarely make passing comments – they expect a reaction to their views. Missing out on this information on a regular basis will lead to a perceived lack of commitment. Openness is the foundation of a strong sense of community in the workplace. Where there is a perceived or real ‘golden circle’ there will be discontent.

Q What do you see as your key challenge for the year ahead?A We plan to continue to super serve our clients. As this recession hits our clients, we understand their IT infrastructure cannot let them down. Downtime is critical. Our current client retention ratio is 99%, we plan to maintain this and to steadily grow our core services, our cloud-based services and our engineering staff. Where our existing clients experience real financial difficulty, we plan to continue to support them. We believe this strategy will provide continued loyalty and, even if the client does terminate, we believe they will be back in another form. Once an entrepreneur – always an entrepreneur!

Q Tell us about LaztechA Laztech is the IT department to our clients. We provide peace of mind through our award-winning IT support services, cloud-based services, disaster recovery, backup strategies, hardware and software and consulting services. While our engineers are highly trained and experienced, they talk to our clients in terms that they understand.

27Corporate

28 Corporate psychology

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For most organisations faced with an insoluble problem there tend to be two main options: look to in-house resources to tackle the problem or engage an external expert, usually a management consultant, to help.

Most business problems – a flawed process, say, or poor management communication – can be solved by one of these two approaches. However, consider the following problem: business manager Sarah Smith isn’t performing satisfactorily and her line manager is unsure how to proceed.

‘If you can be certain that Sarah is dysfunctional in the role and her poor performance has nothing to do with what’s going on around her, then you can probably call someone in who’s an expert in managing performance, because you can see what the problem

is and where it resides,’ says Steve Whiddett, managing director of WHE UK and chair of the UK’s Association of Business Psychologists.

‘However, if there are several people who are displaying similar behaviour to Sarah, and if she didn’t show any of those behaviours when she joined, it would suggest something else is going on. And if the management can’t confidently put their finger on what that is, then a business psychologist [BP] may be able to help,’ he adds.

Planning and problemsTypically, there are two reasons business psychologists are brought in. First, an organisation might be planning positively for the future. ‘I recently worked with a company that was preparing itself for a takeover,

working with a strategic delivery team to look at how they went about delivering strategy,’ says Whiddett. ‘So we asked how they needed to change. It was very successful, they were targeted for acquisition, and their private equity owners made a great return. But with a lot of organisations, we’re usually there to focus on the other side, where things aren’t going well and they want to correct them.’

Fuelled by a growing cynicism over the effectiveness of the management consultancy industry (promising lots, delivering less), Whiddett and his fellow BPs (and occupational psychologists) are increasingly popular. But he’s at pains to point out what exactly BPs can do – and what they can’t.

‘In effect, a good BP ought to be able to see beyond the presenting issue and

Companies on the couchForget management consultants – organisations faced with seemingly intractable people problems are starting to turn to business psychologists instead

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BUSINESS PSYCHOLOGISTS APPLY SCIENTIFICRIGOUR AND DEDUCTIVE REASONING TO GOBEYOND SIMPLY TREATING THE SYMPTOMS

help the organisation understand what it could do to prevent those issues recurring,’ he advises.

In most cases, a general management consultant will be focused elsewhere, specifically on solving a predefined problem. Companies often know what the problem is, but don’t have the skills in-house to solve them and, as a result, go to a craftsman with the skills to solve the problem. Or the business can also go down the route of training people in-house to tackle the issue, or simply buy an off-the-shelf solution.

‘But in those last two cases, you need to know what the problem is and what skills are necessary to solve it,’ says Whiddett. ‘BPs are often called in for those problems, but there is an issue where some of them have got themselves into a situation where HR sees them as an extra pair of hands to be called on to do a bit of assessment or performance guidance or coaching. But that underplays the value of business psychology, which is much more holistic.’

More of the same?BPs presented with a company having difficulty in recruiting will typically ask the business why it is having to recruit so much, why people are leaving, and whether turnover is high. Only once you’ve asked those questions, Whiddett says, ‘can you start to look at whether there are problems built into the job that make it difficult for individuals to perform well, in which case you can look at job redesign. Ultimately, the real difference is between buying a spare pair of hands and bringing in someone to ask some pertinent and intelligent questions.’

Whiddett tells his clients that rather than offering a quick-fix solution, BPs apply scientific rigour and deductive reasoning to go beyond simply treating the symptoms. ‘A lot of people who look at people-related issues are often tempted to look at symptoms because, ultimately, they are displayed by people,’ he says.

However, while somebody who doesn’t deliver on an objective can be

blamed for that failure, it may be that a look under the surface will reveal unrealistic deadlines, a poor brief and so on. ‘So what I would do is look at the whole thing and suggest how the whole process can be improved, aligned with goals and values, and ensuring that the systems and processes are right,’ says Whiddett.

Mike Gibney is one senior executive who has benefited from employing a business psychologist. As deputy director of HR and organisational development at NHS Merseyside, which

is made up of a cluster of four primary care trusts in the north-west of England, his biggest challenge is redesigning the organisation so it is fit for purpose under the new Health Bill. ‘We’re undergoing transformation through the changes in the way commissioning happens in the NHS, so we were looking to a transformational change programme, not an evolutionary one,’ he explains.

‘In order to achieve that we needed to change a number of things – most importantly, staff behaviours. As an organisation that has a £2.1bn (€2.6bn) spend, it’s a whole new landscape – which means the people I manage have to make a huge change, focusing on different aspects of the job with less resource. It’s not just about what they do, but how they do it.’

First research, then solutionBPs will work in a variety of ways. In some cases, where symptoms have to be addressed quickly, they will intervene immediately. ‘If, say, someone was losing large numbers of staff from a department, then you might go straight in asking questions and using the evidence you find to change things,’ explains Whiddett.

‘But a lot of the work I do will involve research up front before any solution can be found. Usually, the presenting

issue is symptomatic, and until the work has been done to find out what the cause is, you can’t go forward to solve it.’

As an example, Gibney’s work at NHS Merseyside is founded on an imperative to change. They know what they don’t want to be, and they have the prospect of massive NHS reforms hanging over them that will change the way in which they operate.

‘So the emphasis will now be on delivery and customer satisfaction. What we need is someone to come in

to identify the behaviours we need, to set a framework for our values. As part of that, we’ll need new recruitment and talent management policies, particularly focusing on the way we appraise our staff,’ says Gibney.

‘And a change is necessary because if we don’t maintain good relationships with the commissioning groups, then they will soon be able to look beyond us to the broader market. So we have transformed how we do it,’ he adds.

As part of his work with the NHS, Whiddett’s team interviewed staff and conducted focus groups to assess current behaviours and arrive at strategies for change. ‘And using scientifically qualified people also gave us credibility in our dealings with clinicians and GPs,’ says Gibney. ‘Whiddett also spoke to private sector providers of healthcare to find out the skillsets they employ that we haven’t got. This will help us achieve a more commercial approach.’

Ultimately, the proof of the effectiveness of the approach will only be evident years down the line, but it’s fair to say that business psychology has opened up another front in the war against inefficiency and poor performance. The question now is who is brave enough to use it.

Christian Doherty, journalist

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Aidan Clifford FCCA, advisory services manager, [email protected]

30

Technically speaking

IN THIS ARTICLE:

• 01 Engagement letters for accounting practices need updating.

• 02 Ireland’s most charitable practice?

• 03 IAASA review.• 04 Audit monitoring update.• 05 Revisions to the standard audit

report wording proposed by the Auditing Practices Board.

• 06 Central Bank publishes its plan to strengthen protection of client assets.

• 07 Fitness and probity requirements take effect.

• 08 Loan advice pack launched.• 09 Changes to defined-benefit

pensions.• 10 A 100 thoughts.

01 ENGAGEMENT LETTERS A number of recent updates in legislation should be reflected in engagement letters for practitioners. Anti-money laundering references used to be in relation to the Criminal Justice Act 1994, but should now refer to ‘Criminal Justice (Money Laundering & Terrorist Financing) Act 2010’. An additional reporting requirement should also be added as follows: ‘Under the Criminal Justice Act, 2011, we also have a duty to report certain offences set out in the schedules to the Act to an Garda Síochána’.

02 MOST CHARITABLE PRACTICE?Are you in the running for ‘the most charitable practice in Ireland’? Before you say no, consider if any of these client categories rings a bell. If so, you may be eligible for this hotly-contested competition.

• ‘Will lose audit exemption’ category This is the limited company client who

you just did the accounts for because they would lose audit exemption and they could not afford an audit, even though they have not paid you for last year and are unlikely to pay for this year either.

• ‘About to go into liquidation’ category Finishing off the audit for a company

that is about to go into liquidation, even though you have not been paid and will not be paid for the work.

• ‘They need it in a hurry’ category Centres on getting the current year’s

work done to a ridiculously short timetable, in the hope that this might encourage the client to pay last year’s fees.

• ‘I don’t want to lose the client’ category

A traditional category among smaller practices, involving clients who are endlessly supported even when they refuse to pay more than 50% of the cost of the work done.

• ‘They will be a big client someday’ category

Similar to the previous, but note the full title is: ‘They will be a big client for another practice someday’.

03 IAASA REVIEW IAASA has published the findings of a review conducted on the quality of selected debt and fund issuers’ fair value and risk disclosures, as contained within those issuers’ 2010 annual financial reports. See www.iaasa.ie for further details.

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

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04 AUDIT MONITORING Audit monitoring on a non-audit client sounds like an oxymoron. Some members, however, have expressed confusion on this issue, as the monitoring procedures may differ, depending on which accounting body you seek your audit registration from. To confirm, ACCA do not monitor audit exempt files in the same way that they monitor audit files. The current ACCA procedure is that a number of audit-exempt client files will be selected during audit monitoring and will be reviewed to ensure that they are correctly audit exempt and contain the basic structure appropriate to an accounts compilation assignment.

05 APB PROPOSAL The Auditing Practices Board (APB) has published a proposed revision to the following International Standards of Auditing (UK and Ireland):• ISA (UK and Ireland) 700 ‘The

auditor’s report on financial statements (revised);

• ISA (UK and Ireland) 705 ‘Modifications to the opinion in the independent auditor’s report’; and,

• ISA (UK and Ireland) 706 ‘Emphasis of matter paragraphs and other matter paragraphs in the independent auditor’s report’.

The changes will lead to a change to audit report wordings and how audit qualifications are worded.

06 CENTRAL BANK RESPONSE The Central Bank of Ireland has published its plan to strengthen the protection of client assets and published the Review of the Regulatory Regime for the Safeguarding of Client Assets. See www.centralbank.ie

07 FITNESS AND PROBITY The new Central Bank fitness and probity requirements for controlled functions (CF) in the financial services sector have started to have an impact. CF would be most customer-facing roles and pretty much every role an ACCA member might take. All new staff in CF already need to sign and abide by quite comprehensive fitness and probity requirements. Existing staff will need to be compliant by the end of this year. Financial institutions need to track and manage this process themselves internally. Of concern for some is the financial soundness requirements, given the current financial position of many in the financial services industry. The requirement would deem a person who is bankrupt or who defaults on a payment schedule agreed after a compromise with their creditors to be ‘not fit and proper’ and not an appropriate person to hold a CF position. Other requirements include reference to ‘any disciplinary action’ by a professional body and there are also on-going training and CPD obligations required by the code. Further details are on the CBI website www.centralbank.ie

08 BUSINESS LOANS AIB has prepared a resource pack on how to prepare your SME business credit application. Details are at www.aib.ie/business/business-banking/start-ups/SME

09 PENSIONS 2012The Social Welfare and Pensions Bill 2012 includes some changes to defined-benefit (DB) pension schemes. Sections 8 to 26 provide for amendments to the Pensions Act 1990

to provide for the introduction of a risk reserve into the funding standard. It is proposed that the funding standard, which has been in abeyance for some time, will be restored and will provide an allowance for the purchase of sovereign annuities and bonds. In addition, there is a new requirement to provide for a risk reserve to take effect from 1 January 2016. The introduction of a risk reserve is a ‘buffer’ to assist schemes to absorb shocks such as financial downturns and a fundamental change to the way DB pension provision currently operates, but pensions scheme will be given a period of up to 11 years to comply.

10 A 100 THOUGHTS… • Do €100 more billable work a

day – and bill it.• Travel 100km less a week.• Do 100 minutes of exercise a

week.• Pay the €100 household charge

(non-payment of tax is a breach of ethical rules).

• Write the first 100 pages of your novel - we all have one in us apparently.

• Take 100 uninterrupted minutes a day for yourself.

• Spend less than 100 minutes a day on your smart phone.

• Spend 100% more time with your family than last year.

• Make a list of 100 things that make you happy.

• Go 100 days without any chemical stimulation – including alcohol, tobacco and coffee.

• Live to 100 but be able to afford to enjoy the last 40 years.

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Finance billIn the 2012 Budget, the chancellor challenged business to invest and export in order to build the economy.

In return, he set out the actions the government will take in order to help build the appropriate environment. It will provide:• A stable economy.• A fairer, more efficient and simple

tax system.• Reforms to support growth.

So has business received the help it needs?

The Finance Bill runs to 227 clauses and 38 schedules, and business has been promised a number of consultations on key areas.

The clauses and schedules detail:• Basic information like the tax rate

changes.• Support for business, including

patents, research and development and real estate investment trusts.

• Three enterprise initiatives – Seed Enterprise Investment Scheme (SEIS), venture capital trusts and the Enterprise Investment Scheme. These are useful changes to help encourage further investment in business. For example, the SEIS provisions provide that the investment relief is a reduction of income tax calculated as 50% of the amount the investor subscribes for shares. This is subject to an overall limit of 50% of £100,000 on the amount of relief that can be received in any one year.

• The changes to capital allowances.• Schedule 48 highlights employer

asset-backed pension contribution changes, which apply retrospectively and have been highlighted in earlier issues of Accounting and Business.

• There are highly significant changes impacting on property businesses and transactions in property.For more details on the changes, go to www2.accaglobal.com/tax

The progress of the bill can be followed at:

http://services.parliament.uk/bills/2010-12/financeno4.html

Explanatory notes can be found at www.hm-treasury.gov.uk/d/fb2012_explanatory_notes.pdf

Arbitration serviceHM Revenue & Customs’ alternative dispute resolution (ADR) service seems to be one of its best kept secrets. There is no doubt that arbitration is a good, well recognised and valuable form of dispute resolution. While there were initially some doubts about the independence of the service, the practitioners who have used ADR say it works well. If you have dismissed ADR, it might be worth another look.

As highlighted last month, HMRC states that ADR provides ‘small and medium enterprise customers with an alternative way of resolving tax disputes in compliance checks’. It covers VAT and direct taxes and doesn’t affect the taxpayers’ review and appeal rights. It works by involving an ‘independent person from HMRC (a “facilitator”)’, who will to try to broker an agreement between the taxpayer and HMRC officer. The aim of ADR is to resolve tax disputes quickly and efficiently. Suitable cases for HMRC’s ADR pilot can be found at www.hmrc.gov.uk/adr/appendix-a.pdf

Please let use know if you have used the service and how you found the process. Email [email protected]

Real time informationHMRC’s Employer and Agent Strategy Team has provided updates on payroll cleansing in advance of Real Time Information (RTI), FAQs on RTI and legislative links on RTI. The team provides informal highlights as a result of listening to employer feedback and working in partnership with

stakeholders. The recent updates are not a surprise as we are now one year’s payroll away from RTI.

There is some concern over payroll data and whether it will be correctly picked up. HMRC is asking employers to make sure the data they hold and provide is correct. They highlight in the support documentation that ‘before joining RTI, employers and pension providers will need to go through a payroll alignment process to help ensure that information on their payroll can be matched efficiently to the correct individual record. Improving data quality is important preparation for a successful transition to RTI’. View the support material at www.hmrc.gov.uk/rti/dip/get-payroll-right.htm

As ACCA has previously highlighted, you should ask your payroll software provider if they are ready for the changes and also make sure that there are no changes in the information that you will need to provide them with.

The FAQs have been updated with a number of new questions. These include RTI and BACS, pension providers, student loans and individual employees. The FAQs can be found at www.hmrc.gov.uk/rti/employerfaqs.htm

Engagement lettersYou can find an update and details of the revised ACCA engagement letters at www2.accaglobal.com/uk/members/technical/practice/practice_management/accapractice_tools/acca_res/engagement_letters, including how to obtain them. The letters cover client management, terms and conditions, audit, non-audit, taxation and other services, for example, management accounts preparation, forecasts and payroll services. They also include pro forma policies.

Glenn Collins, head of technical advisory, ACCA UK

Northern Ireland notes

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MAY 2012

General

1 Carbon taxesEffective date for Budget 2012 increases in carbon tax on home heating oil.

1 VATDue date for extension of VAT reverse charge mechanism to supplies of construction services between connected persons.

14 PAYEP30 monthly return and payment for April 2012. (ROS extension to 23 May 2012).

14 PSWTF30 monthly return and payment for April 2012. (ROS extension to 23 May 2012).

19 VATBi-monthly VAT3 return and payment for the period March/April 2012 (ROS extension to 23 May 2012).

19 VAT4-monthly VAT3 return and payment for the period January-April 2012 (ROS extension to 23 May 2012).Companies

14 Dividend Withholding TaxReturn and payment of DWT for distributions in April 2012

21 Corporation TaxReturn and final payment for accounting periods ended 31 August 2011. (ROS extension to 23 May).

21 Corporation TaxPreliminary tax for accounting periods ending 30 June 2012. (ROS extension to 23 May).

21 Corporation TaxFirst instalment of preliminary tax for ‘large’ companies for accounting periods ending 30 November 2012. (ROS extension to 23 May).

31 Form 46G – Return of Third Party InformationForm 46G for accounting periods ended 31 August 2011.

JUNE 2012

General

14 PAYEP30 monthly return and payment for May 2012. (ROS extension to 23 June 2012).

14 PSWTF30 monthly return and payment for May 2012. (ROS extension to 23 June 2012).

30 NPPR chargePayment of €200 NPPR charge (Irish residential properties that are not principal private residences) for 2012.

Companies

14 Dividend Withholding TaxReturn and payment of DWT for distributions in May 2012.

21 Corporation TaxReturn and final payment for accounting periods ended 30 September 2011. (ROS extension to 23 June).

Tax diary21 Corporation TaxPreliminary tax for accounting periods ending 31 July 2012. (ROS extension to 23 June).

21 Corporation TaxFirst instalment of preliminary tax for ‘large’ companies for accounting periods ending 31 December 2012. (ROS extension to 23 June).

30 Form 46G – Return of Third Party InformationForm 46G for accounting periods ended 30 September 2011.

Information supplied by the Irish Tax Institute. Disclaimer: This is a calendar of the main tax compliance deadlines but is not intended to be an exhaustive list. While every effort has been made to ensure the accuracy of this information, the Irish Tax Institute does not accept any responsibility for loss or damage occasioned by any person acting, or refraining from acting, as a result of this material.

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34 Technical

reliefs, a cap will be set at 25% of income.As part of its exploration of long-term reforms of the personal tax system, the government will launch a detailed consultation on integrating the operation of income tax and National Insurance contributions. In response to proposals put forward by the UK’s Office of Tax Simplification, a new cash basis for calculating tax for small unincorporated businesses will be introduced in April 2013. A consultation will be launched on the details of the scheme, including the possibility of extending eligibility to businesses with turnover up to the VAT registration threshold of £77,000.In line with the government’s commitment to simplicity and transparency, in 2014-15 approximately 20m taxpayers will receive a new personal tax statement. The statement will show the income tax and National Insurance contributions the individual has paid, their average tax rates, and how their tax contributes to public spending.A new stamp duty land tax rate of 7% applies from 22 March 2012 for residential properties worth over £2m.A consultation will be launched with a view to introducing a general anti-avoidance rule in Finance Bill 2013. Following the delivery of the Budget, the UK’s Finance Bill 2012, and the accompanying explanatory, notes, were also published. These documents are available on HMRC’s website.

02 NPPR charge dueIf you are the owner of a residential property that is not your only or main residence, you may be liable to pay the Non Principal Private Residence (NPPR) charge for 2012. Liability to pay the charge for 2012 is based on ownership of the property at 31 March 2012. The charge is set at an annual rate of €200 per non-principal private residence and must be paid on or before 30 June 2012 in order to avoid late payment fees. Further details on the charge, and details of how to pay, are available on the dedicated NPPR website (www.nppr.ie). Owners of multiple residential properties should note that both the NPPR charge and the Household Charge are payable in respect of each of their non-principal private residences.

Irish and UK tax changes – a round-up

In this article:1 UK Budget 2012, changes of

interest in Ireland.2 NPPR charge falls due.3 Revenue makes pay and file

announcements.4 ROS pay and file extension

confirmed.5 Guidance on USC and capital

allowances. 6 Finance Bill 2012 is enacted.

01 UK Budget changesThe UK Budget 2012 was delivered on 21 March and it contained a number of measures that may be of interest to Irish readers.The main rate of corporation tax is reduced from 26% to 24% in April 2012. The rate will fall again to 23% in April 2013, with a further drop to 22% in April 2014. The top rate of income tax will be reduced from 50% to 45% in April 2013. The reduction in this rate was prompted by a HMRC report, which showed that the higher rate ‘is a distortive and economically inefficient way of raising revenue, and that the behavioural response has been larger than expected’. The government concluded that ‘it is neither efficient nor fair to maintain a tax rate that is not effective at raising revenue from high earners and risks damaging growth’.A limit is being introduced on certain income tax reliefs, similar to Ireland’s high earners’ restriction. For taxpayers seeking to claim more than £50,000 of

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35Technical

03 Mandatory e-filing Revenue has announced that the next phase of their mandatory e-filing programme will be implemented this summer. Returns and payments due on or after 1 June 2012 must be made via Revenue’s On-Line Service (ROS) by all VAT registered taxpayers and by self-employed taxpayers who avail of certain reliefs and exemptions. The reliefs and exemptions in question are listed in Revenue eBrief 17/12 and they include:• various reliefs for pension

contributions;• business expansion scheme relief;• seed capital scheme relief;• film relief; and,• interest relief on loans to acquire

shares in a company/partnership.Revenue will be writing to taxpayers and

not deductible in arriving at the amount of income chargeable to the Universal Social Charge (USC). Revenue states that:Capital allowances incurred for trading purposes on the provision of plant and machinery, business vehicles, and certain types of building, e.g. factories and farm buildings, are deductible in computing USC. Capital allowances due to individuals who do not actively carry on a trade are not deductible. Therefore, lessors and other passive investors such as non-active partners in a partnership trade must pay USC on gross income. Apart from farm buildings, capital allowances that are written off over accelerated seven-year periods are not deductible. Further details on capital allowances for buildings are available in Appendix C to Revenue’s frequently asked questions on the USC, which is available on Revenue’s website.

06 Finance Bill signed into lawFinance Bill 2012 completed its passage through the Oireachtas and became law when it was signed by the President on 31 March. At the time of writing, the full text of Finance Act 2012 has not yet been published. However, Revenue has published guidance notes on the Finance Act 2012 changes to VAT, which are available on its website.

Cora O’Brien is director of technical services, Irish Taxation Institute. Email [email protected]

agents to inform them of the obligations that will apply from 1 June 2012. The regulations in relation to this phase have not yet been published. However, the related explanatory note is available on Revenue’s website.

04 ROS pay and file Revenue has confirmed an extension of the return filing and tax payment date to 15 November 2012 for certain self-assessed income tax payers and for taxpayers liable to gift tax or inheritance tax (Capital Acquisitions Tax).The extended deadline of 15 November applies to taxpayers who use ROS to file their income tax return for 2011 and make the following payments:• Preliminary tax for 2012; and, • Balance of income tax due for

2011.For taxpayers who received gifts or inheritances in the year ended 31 August 2012 and who make their Capital Acquisitions Tax return and the appropriate payment through ROS, the due date is also extended to 15 November 2012.It is very important to note that, in order to avail of the extension, taxpayers must both pay and file using ROS. Where only one, or neither, of these actions is completed through ROS, the pay and file deadline is 31 October 2012.

05 USC and capital allowancesTo assist taxpayers in filing income tax returns for 2011, Revenue has issued eBrief 12/12, setting out their view as to when capital allowances are and are

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Advising the advisersMarc Westlake on why Irish fi nancial advisers need to

take a fresh look at how to best serve their clients

The former chairman of the UK Financial Services Authority, Sir Howard Davies, wrote in 2003: ‘The biggest disappointment of my time at the FSA has been the failure of firms, and particularly their senior management, to learn the lessons of past mis-selling...Unfortunately, much of the industry remains focused on short-term gain from shifting product. Indeed many firms are happy to see themselves described as “product providers”, terminology which in itself distances them from their customers, many of whom assume that they are being given advice that takes their personal circumstances into account and who see their relationship with their bank or life insurance company as one for the long term and not solely transaction-based.’

The events of the last few years have presented new challenges for accountants offering financial services to their clients. In the face of continued change in the financial services industry, it can be enormously helpful to step back for a moment and assess exactly where the industry is now and the direction it is most likely to go.

Wealth managementIn Ireland, we are seeing a rise in the number of firms offering ‘wealth management’. However, when you dig a little deeper, many seem to be pushing the same old transactional commission-based services under a new label. This is leading to a new wave of disenchantment among clients, a sad but inevitable by-product of the shifting landscape within the retail advice sector, as more firms hitch themselves to this bandwagon without first looking at some fairly fundamental issues.

Acting as a fiduciaryPeople looking for help managing their money will rightly ask a lot of questions, but perhaps the best question a prospective client can ask of an adviser is ‘do you act as a fiduciary?’

In simple terms, acting as a fiduciary means that your customers’ interests must always come first. The client and advice to the client are at the centre of a fiduciary relationship, not the interest of

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37

the adviser or their firm. So, if a client is looking for impartial financial advice, how can they be sure that they will receive it?

Most advisory firms have an infrastructure to handle transactional solutions for clients. Typically, the packaged, off-the-shelf solutions from a product provider are sold, following research and chased through the process to completion, with delivery of the policy documents and receipt of the commission as the end objective.

This is the dominant business model in Ireland, so let’s consider some regulatory comment on the subject:

‘Consumers rely heavily on advice from intermediaries, although they have almost no understanding of the costs of obtaining this, and are unable to gauge its quality. Moreover the advice itself is often compromised by the incentive effects of commission paid by product providers.’ Sandler review into medium and long-term savings, July 2002.

‘The present distribution system is distinguished by a focus on business volume rather than quality.’

‘Consumers are not always advised on transactions which fail to remunerate the adviser, or which offer little by way of commission to the adviser.’

‘I am struck by the prevalence of examples of providers managing demand – up or down – by adjusting commissions which can lead to less suitable or even unsuitable sales.

Quotes from the Gleneagles Savings & Pensions Industry Leaders’ summit in September 2006.

Conflict of interestThe bottom line is that commission-based advisers get paid a different amount depending on the course of action they recommend to their client. They then get paid a different amount depending on the type of product they suggest and even the actual product provider they select as being the most appropriate.

With this system, where the client wants the best advice, yet the adviser could be paid significantly more for providing inappropriate recommendations, there is inevitably a conflict of interest between the client

and the adviser.In short, commissions are an

inducement to sell products and the bigger the commission, the bigger the inducement. The conflict of interest this creates would be obvious to most consumers, which is perhaps why too many financial advisers disguise their charging structures. To have confidence in any advice or recommendations being given by a financial adviser, the client must know that the adviser is acting solely in their best interests and does not have a financial incentive to recommend a course of action that is not the most appropriate. This can only be achieved on the basis of a transparent fee, where the client understands and agrees at outset on the level of charges and these charges are not dependent on the sale of a product. This is the basis of the retail distribution review in the UK.

Trusted advisersAccountants should be well positioned to operate on the basis of a professional fee and should be seen by many of their clients as their trusted adviser. However, it can be argued that the current distribution model distorts this relationship, leading many firms to select pension and investment products from a relatively limited range of product providers without giving full

consideration to all of the options available internationally.

For example, it is ironic that three of the biggest fund management groups in the world run their European fund ranges from Ireland and between them manage in excess of $5tr, yet, hardly anyone in Ireland invests in these funds as (on the whole) they do not pay commissions to intermediaries.

In today’s competitive environment, professional advisers know that they have to impress their clients consistently if they want to earn their loyalty. Many advisers are looking for ways to differentiate themselves in an increasingly crowded marketplace.

With this in mind, a small but rapidly growing group of fee-based advisers are now using an established outsourcing model from the United States known as a turnkey asset management programme, or TAMP, in order to better service their clients. This allows accountancy firms to more efficiently access low-cost institutional class investment funds for their clients and to devote more time to building a wealth management that makes them indispensable to their clients.

Marc Westlake is an independent financial planning consultant. Email [email protected]

AB_May_2012.indd 37 24/04/2012 11:00

their own or others’ use, unless authorised by the members of the company or the constitution of the company.

• Not to fetter discretion, unless permitted by the constitution or entered into in the company’s interests.

• To avoid conflicts of interest, unless released by members.

• To exercise care, skill and diligence.• To have regard to the interest of its

members.• To have regard to the interest of its

employees. The Companies Acts also set out

statutory obligations that directors must comply with and these can be characterised as the ‘ten director commandments’.1. Ensure that the requirements of the

Companies Acts are complied with.2. Keep proper books and records

(accounts) pursuant to Sec 202 CA, 1990.

3. Prepare annual accounts and have an annual audit performed.

4. File an annual return and accounts at the CRO every year.

5. Lay accounts before the members at an AGM each year.

6. Maintain statutory registers and minute books.

7. File statutory forms with the CRO to

reflect any changes in the company.8. Disclose your interests in shares or

debentures or in contracts. 9. Do not breach laws regarding

directors’ transactions (loans).10. Wind up an insolvent company in a

timely and correct manner.

Meetings and recordingThe Companies Acts give directors the power to meet and dispatch their duties as and how they see fit. This allows flexibility to directors in how they run the company, as every company is different. However, if decisions are to be made, they should be made at properly-held directors or members meetings. The articles of association set out the rules regarding holding valid meetings. Any decisions made at the meetings should be recorded and signed by the chairperson as this is the prima facie evidence that a decision was made. If a dispute occurs, the courts will rely on the minutes as proof of what was decided. In practice, the recording of minutes is ad hoc at best and directors could avoid costly legal bills or prosecution if they held valid meetings and recorded their decisions.

InsuranceThe Companies Acts allow a company to purchase and maintain directors and

Essential advice for directorsConor Sweeney on what a new company director really needs to know

Every director agrees to ‘act in the best interests of the company at all times’ and, if they stick to this principal every time they make a decision, then they will not have too much to fear from company law. When a company is formed it becomes a completely separate entity from the shareholders and directors of the company.

The Companies Acts seeks to regulate the activities of directors so that they do not abuse their power of privilege and cause an action that may not be in the best interests of the company. The following are the sources of directors duties and responsibilities: Companies Acts; common law; memorandum and articles of association; and shareholders’ agreement. The new Companies Consolidation & Reform Bill has provided some clarity to the area of directors’ duties and has codified directors’ fiduciary duties into the following:• To act in good faith in what the

directors consider to be in the best interests of the company.

• To act honestly and responsibly. • To act in accordance with the

company’s constitution (memorandum and articles of association) and to exercise powers only for lawful purposes.

• Not to use company property for

38 Technical

AB_May_2012.indd 38 24/04/2012 11:00

39

officers insurance. Directors and officers liability insurance protects against losses arising from claims made against directors during the policy period because of any allegation of a wrongful act committed in their capacity as a director or officer.

BreachesThere are over 300 offences in the Companies Acts and about 140 of these are reportable, indictable offences. An auditor is required to report any breach of indictable offences to the Office of the Director of Corporate Enforcement (ODCE). The ODCE usually seeks voluntarily rectification of any breach that is reported to them but can bring prosecutions against companies and directors that do not rectify the breach or if the offence is deemed more serious. The most common offences reported to the ODCE are:• Breach of rules regarding loans to

directors and connected persons.• Failure to keep proper books of

account.• Failure to hold an AGM.

If a company is placed into liquidation, a liquidator is required to report to the ODCE on the reasons for the company going into liquidation and the role the directors played in the insolvency of the company. If the ODCE

does not grant relief to the liquidator, the liquidator is required to bring restriction proceedings against the directors in the High Court. In order to avoid a restriction order being handed out by the court, each director must prove they acted honestly and responsibly. If the director is restricted they cannot act as a director or secretary of a company for the period of the restriction (usually five years), unless the company is capitalised to a certain amount. Directors may also be disqualified from acting or even managing a company for the period of the disqualification. This is a far more serious penalty. Directors may be disqualified for fraud or dishonesty, acting while restricted or, most commonly, when there were directors of a company when it was struck off involuntarily and the company had outstanding debt.

Personal liability One of the misconceptions about directors is that they possess limited liability. Only the shareholders in a limited liability company have limited liability; the directors may be found personally liable for some or all of the debts due to their actions. The three main ways a director may be found personally liable are: reckless trading;

fraudulent trading; and failure to keep proper books and records. The level of proof required to impose personal liability on a director is very high, which has resulted in only a few cases being taken against directors. However, in one one case, in 2009, a director was found personally liable for €1.6m and guilty of reckless and fraudulent trading, while, in 2008, another director was found personally laible for €425,000 of the debts of a limited company for failure to keep proper books and records.

Essential tipsIf you are a director of a company that is facing difficult trading conditions, considering the following points may assist you with complying with your duties as a director:• Hold frequent board meetings to

assess the situation.• Ensure up-to-date key financial and

trading information is available.• Take financial and legal advice.• Keep creditors informed.• Document all key decisions made

and advice received.• Don’t put off difficult decisions.

Conor Sweeney is director of OmniPro Corporate Consultants. Email [email protected]

AB_May_2012.indd 39 24/04/2012 11:00

The effects of clutter have typically come in for little consideration by the preparers of annual reports, but the phenomenon is increasingly under discussion, with initiatives recently launched to combat it.

The Financial Reporting Council (FRC) in the UK is one organisation that has called for a reduction in clutter in annual reports. And the International Accounting Standards Board (IASB) commissioned the Institute of Chartered Accountants in Scotland (ICAS) and the New Zealand Institute of Chartered Accountants (NZICA) to make cuts to the disclosures required by a group of International Financial Reporting Standards (IFRSs), and to produce a report.

Clutter in annual reports can be a problem for users. It obscures relevant information and makes it more difficult for users to find the key points about the performance of the business and its prospects for long-term success. The main observations of a discussion paper, called Cutting Clutter, that was published by the FRC were:

* There is substantial scope for segregating standing data in a separate section of the annual report (an appendix) or putting it on the company’s website.

* Immaterial disclosures are unhelpful and should not be provided.

* The barriers to reducing clutter are mainly behavioural.

* There should be continued debate about what materiality means from a disclosure perspective.

It is important for the efficient operation of the capital markets that annual reports do not contain unnecessary information. It is equally important that useful information is presented in a coherent way so that users can find what they are looking for and gain an understanding of the company’s business and the opportunities, risks and constraints that it faces.

However, a company must treat all its shareholders equally in its provision of information. It is for each shareholder to decide whether to make use of that information. It is not for a company to pre-empt a shareholder’s rights by withholding information.

Too many rules?A significant cause of clutter in annual reports is the vast array of requirements imposed by laws, regulations and financial reporting standards. Regulators and standard setters have a key role to play in cutting clutter both by cutting the requirements they themselves already impose and by not imposing unnecessary new disclosures. A listed company may have

to comply with listing rules, company law, IFRS, the corporate governance codes and (if it has an overseas listing) any local requirements, such as those of the Securities and Exchange Commission (SEC) in the US. A major source of clutter is that different parties require differing disclosures for the same matter.

For example, an international bank in the UK may have to disclose credit risk under IFRS 7, Financial Instruments: Disclosures, the Companies Acts, the Financial Services Authority’s disclosure and transparency rules, the SEC rules and Industry Guide 3 as well as the requirements of Basel II’s pillar 3. One problem is that different regulators have different audiences in mind for the requirements they impose. Their attempts to reach more actual or potential users can lead to a loss of focus and structure in reports.

There may be a need for a proportionate approach to the disclosure requirements for small and mid-cap quoted companies that take account of the needs of their investors, as distinct from those of larger companies. This may be achieved by different means. For example, a principles-based approach to disclosures in IFRS, specific derogations from requirements in individual IFRSs or the creation of an

Technical

Bin the clutterClutter in annual reports obscures relevant information and makes it harder for users to identify the key points about a business’s performance, says Graham Holt

GET VERIFIABLE CPD UNITSAnswer questions about this article onlineStudying this article and answering the questions can count towards your verifi able 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

40

AB_May_2012.indd 40 24/04/2012 11:00

41

TIME AND COST PRESSURES CAN LEAD TO DEFENSIVE REPORTING AND A PREFERENCE FOR EASY OPTIONS, SUCH AS REPEATING MATERIAL

adapted local version of IFRS for SMEs. Time and cost pressures can lead to defensive reporting by smaller entities and to a preference for easy options, such as repeating material from a previous year, cutting and pasting from the annual reports of other companies and including disclosures that are of marginal importance only.

Behavioural barriersThere are behavioural barriers to reducing clutter. The threat of criticism or litigation is one. The risk of future litigation may outweigh any benefits from eliminating catch-all disclosures. As a result, preparers of annual reports are likely to err on the side of caution and include more detailed disclosures than strictly necessary to avoid challenge from auditors and regulators. Removing disclosures is seen as creating a risk of adverse comment and regulatory challenge. Disclosure is the safest option and therefore often the default position. Preparers and auditors may be reluctant to change this unless the risk of regulatory challenge is reduced. There is also

a tendency for companies to repeat disclosures simply because they were in the annual report last year.

However, while explanatory information may not change from year to year its inclusion remains necessary to an understanding of aspects of the report. There is merit in a reader of an annual report being able to find all of

this information in one place. If the reader of a hard copy report has to go to a website to gain a full understanding of a particular point, it heightens the risk of making the report less accessible. And even if the standing information is kept in the same document but relegated to an appendix, that may not be the best place to facilitate a quick understanding of a point. A new reader may be disadvantaged by having to hunt in the small print for what remains key to a full understanding of the report.

Preparers wish to present balanced and sufficiently informative disclosures and may be unwilling to separate out relevant information in an arbitrary

manner. The suggestion of relegating all information to a website assumes that all users of annual reports have access to the internet, which may not be the case. A single report may best serve the investor, by putting all the information in one reference document rather than scattering it across a number of delivery points.

Yet shareholders are increasingly unhappy with the substantial lengthening of reports in recent years. This has not resulted in more or better information but more confusion as to the reason for the disclosure. A review of companies’ published accounts will show that large sections such as the statement of directors’ responsibilities and the audit committee report are almost identical.

Materiality should be seen as the driving force of disclosure, as its very definition is based on whether an omission or misstatement could influence the decisions made by users of the financial statements. The assessment of what is material can be highly judgmental and can vary from user to user. One problem may be that disclosures are being made because a disclosure checklist suggests they may need to be made, without assessing whether disclosure is necessary in a company’s particular circumstances. However, the whole point of such

41 TO GET THE QUESTIONS GO TO www.accaglobal.com/clutter

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AB_May_2012.indd 41 24/04/2012 11:00

CPDunits on the web

42 Technical CPDunits on the web

IN A WELL-ORGANISED REPORT, USERS WILL BE ABLE TO BYPASS MUCH OF THE INFORMATION THEY CONSIDER UNIMPORTANT

checklists is to include all possible disclosures that could be material. Most users of these tools will be aware that the disclosure requirements apply only to material items, but often this is not stated explicitly for users.

One of the biggest challenges is the changing audience for the annual

report. Its original purpose was to report to shareholders, but preparers now have to consider many other stakeholders including employees, unions, environmentalists, suppliers, customers, etc. The disclosures required to meet the needs of this wider audience have contributed to the increased volume of disclosure. The growth of previous initiatives on going concern, sustainability, risk, the business model and others identified by regulators as key has also expanded the size of the annual report.

Big but perfectly formedIt is not necessarily the length of the report that is the problem but the way in which it is organised. The inclusion of immaterial disclosures will usually

make this problem worse but, in a well-organised report, users will be able to bypass much of the information they consider unimportant especially if the report is online. It is not the length of the disclosure of accounting policies that is itself problematic, but the fact that new or amended policies can be

obscured in a long note running over several pages. A further problem is that accounting policy disclosure is often boilerplate, and provides little detail of how companies apply their general policies to particular transactions.

IFRS requires disclosure of ‘significant accounting policies’. In other words, it does not require disclosure of insignificant or immaterial accounting policies. Omissions in financial statements are material only if they could, individually or collectively, influence the economic decisions that users make. In many cases, they would not. Of far greater importance is the disclosure of the judgments made in selecting the accounting policies, especially where a choice is available.

A reassessment of the whole model will take time and may entail changes to law and other requirements. For example, clutter could be removed by not requiring the disclosure of IFRS in issue but not yet effective. Currently, disclosure seems to involve listing each new standard in existence and each amendment to a standard, including separately all those included in the annual improvements project, regardless of whether there is any impact on the entity. The note is then a list without any apparent relevance.

The IASB has asked for comment on its forward agenda in which it acknowledges that stakeholders have said that disclosure requirements are too voluminous and not always focused in the right areas. However, the drive by the IASB has been to increase disclosure to address comparability between companies. Therefore, in the short to medium term, a reduction in the volume of accounting disclosures does not look feasible, although the IASB will be considering this area for its post-2012 agenda.

Graham Holt is an examiner for ACCA, and associate dean and head of the accounting, finance and economics department at Manchester Metropolitan University Business School

AB_May_2012.indd 42 24/04/2012 11:00

Assets in green investment funds managed out of Ireland have more than doubled in the past two years to reach €2.3bn, according to recent PwC research, and there are currently 24 asset managers based out of Dublin who are managing more than 30 international green funds, from water to wind energy.

The talent base we have across all the different sectors in the IFSC can be fully geared towards meeting the future demands of the green economy. That’s according to Stephen Nolan, executive co-ordinator of the Green IFSC. We’re trying to supplement the existing talent base with specific green finance and carbon management education.

The Summit Finuas Network worked closely with both the Green IFSC initiative and Dublin City University (DCU) to create Ireland’s first Postgraduate Certificate in Sustainable Finance. The course was launched in September 2011 and the first participants will graduate later this year.

Over 20 people are taking part in this programme, from a range of international financial services and green enterprise companies.

The course is highly applied as all participants are already experts in finance, law or project management. The programme allows participants to leverage the new learning to explore business opportunities. Participants develop a strategy and business plan for a sustainable business, product technology or finance vehicle. In this way the programme plays a key role in enabling the development of the Green IFSC strategy.

One of the strongest outputs of the programme to date is the community of practice that is emerging. While an early stage cluster of green finance activity does exist in the IFSC, most of the companies and executives working in the area have been doing so in isolation. Now, as a result of the programme, a real network of expertise is developing. Programme participants are legal experts, domestic and

DEPARTMENT OF

EDUCATIONA N D S K I L L S

A N R O I N N

OIDEACHAISAGUS SCILEANNA

The Summit Finuas Network is an enterprise-led network dedicated to providing specialised training to the International Financial Services (IFS) sector. We are currently accepting applications on our 2012 course programme. Courses are available in the areas of Funds, Investment Management, Banking, Insurance, Project Management and Executive education.

The network is also offering places on our open course programme to unemployed participants who meet both the networks and individual course eligibility requirements. Where available these places are offered free of charge.

Full information on all courses and on the network is available at:

www.summitfinuasnetwork.com

email: [email protected]

The Summit FINUAS network is funded by member companies and the Finuas Networks Programme, managed by Skillnets Ltd. funded from the National Training Fund through the Department of Education and Skills.

Programme Provider Dates/No of Days Non-Member Fee

Member Fee

PRINCE 2 Conversion to Practitioners Trigraph 2nd - 4th May/ 3 days €850 €600

Money Market Funds Quickstep 3rd May/ 1 day €563 €450

UCITS Compliance Quickstep 4th May/ 1 day €494 €395

PMP Exam Preparation Trigraph 9th – 11th May/ 3 days €850 €600

Derivatives Quickstep 9th May/ 1 day €494 €395

Accounting for Derivatives under IFRS Quickstep 10th May/ 1 day €600 €480

IFRS for Investment Funds Quickstep 15th May €600 €480

Derivatives – Growing Importance within Financial Markets

Institute of Bankers - School of Professional Finance

16th & 17th May/ 2 days €1000 €700

Coaching for Performance Institute of Bankers - School of Professional Finance

16th & 17th May/ 2 days €1000 €700

Governance in International Financial Services


21st & 22nd May/ 2 days €1000 €700

US GAAP for Investment Funds Quickstep 23rd May/ 1 day €600 €480

Accounting for Derivatives under US GAAP

Quickstep 24th May/ 1 day €600 €480

Practical Project Management Trigraph 28th & 29th May/ 2 days €636 €450

international finance experts, project managers, entrepreneurs, fund managers and investment analysts. All are from companies exploring business opportunities in green finance.

As a result of the success of the first programme, the recognition of the development opportunity is growing across the IFSC. The DCU Graduate Certificate in Sustainable Finance will run again in September 2012 with a new cohort of participants. Later this year the Summit Finuas Network, in association with the Green IFSC and DCU will expand their skills development strategy by launching a new Masters Degree in Sustainable Finance.

The Summit Finuas Network is a national network of companies operating in the International Financial Services industry in Ireland. Since it was set up in 2009, 162 companies have joined the network and over 20,000 training days have been delivered to almost 2100 participants.

Assets in green investment funds managed out of Ireland have more than doubled in the past two years to reach €2.3bn, according to recent PwC research, and there are currently 24 asset managers based out of Dublin who are managing more than 30 international green funds, from water to wind energy.

The talent base we have across all the different sectors in the IFSC can be fully geared towards meeting the future demands of the green economy. That’s according to Stephen Nolan, executive co-ordinator of the Green IFSC. We’re trying to supplement the existing talent base with specific green finance and carbon management education.

The Summit Finuas Network worked closely with both the Green IFSC initiative and Dublin City University (DCU) to create Ireland’s first Postgraduate Certificate in Sustainable Finance. The course was launched in September 2011 and the first participants will graduate later this year.

Over 20 people are taking part in this programme, from a range of international financial services and green enterprise companies.

The course is highly applied as all participants are already experts in finance, law or project management. The programme allows participants to leverage the new learning to explore business opportunities. Participants develop a strategy and business plan for a sustainable business, product technology or finance vehicle. In this way the programme plays a key role in enabling the development of the Green IFSC strategy.

One of the strongest outputs of the programme to date is the community of practice that is emerging. While an early stage cluster of green finance activity does exist in the IFSC, most of the companies and executives working in the area have been doing so in isolation. Now, as a result of the programme, a real network of expertise is developing. Programme participants are legal experts, domestic and

DEPARTMENT OF

EDUCATIONA N D S K I L L S

A N R O I N N

OIDEACHAISAGUS SCILEANNA

The Summit Finuas Network is an enterprise-led network dedicated to providing specialised training to the International Financial Services (IFS) sector. We are currently accepting applications on our 2012 course programme. Courses are available in the areas of Funds, Investment Management, Banking, Insurance, Project Management and Executive education.

The network is also offering places on our open course programme to unemployed participants who meet both the networks and individual course eligibility requirements. Where available these places are offered free of charge.

Full information on all courses and on the network is available at:

www.summitfinuasnetwork.com

email: [email protected]

The Summit FINUAS network is funded by member companies and the Finuas Networks Programme, managed by Skillnets Ltd. funded from the National Training Fund through the Department of Education and Skills.

Programme Provider Dates/No of Days Non-Member Fee

Member Fee

PRINCE 2 Conversion to Practitioners Trigraph 2nd - 4th May/ 3 days €850 €600

Money Market Funds Quickstep 3rd May/ 1 day €563 €450

UCITS Compliance Quickstep 4th May/ 1 day €494 €395

PMP Exam Preparation Trigraph 9th – 11th May/ 3 days €850 €600

Derivatives Quickstep 9th May/ 1 day €494 €395

Accounting for Derivatives under IFRS Quickstep 10th May/ 1 day €600 €480

IFRS for Investment Funds Quickstep 15th May €600 €480

Derivatives – Growing Importance within Financial Markets


16th & 17th May/ 2 days €1000 €700

Coaching for Performance Institute of Bankers - School of Professional Finance

16th & 17th May/ 2 days €1000 €700

Governance in International Financial Services


21st & 22nd May/ 2 days €1000 €700

US GAAP for Investment Funds Quickstep 23rd May/ 1 day €600 €480

Accounting for Derivatives under US GAAP

Quickstep 24th May/ 1 day €600 €480

Practical Project Management Trigraph 28th & 29th May/ 2 days €636 €450

international finance experts, project managers, entrepreneurs, fund managers and investment analysts. All are from companies exploring business opportunities in green finance.

As a result of the success of the first programme, the recognition of the development opportunity is growing across the IFSC. The DCU Graduate Certificate in Sustainable Finance will run again in September 2012 with a new cohort of participants. Later this year the Summit Finuas Network, in association with the Green IFSC and DCU will expand their skills development strategy by launching a new Masters Degree in Sustainable Finance.

The Summit Finuas Network is a national network of companies operating in the International Financial Services industry in Ireland. Since it was set up in 2009, 162 companies have joined the network and over 20,000 training days have been delivered to almost 2100 participants.

Finuas 192x260.indd 1 23/04/2012 09:32:11

AB_May_2012.indd 43 24/04/2012 11:01

Technical

Weighing up your optionsThis month Dr Tony Grundy demonstrates how to get the most out of strategic thinking by creating and evaluating strategic options for the business

demonstrates how to get the most out of strategic thinking by creating and evaluating strategic options for the business

These variables can be refined or added to – for example, brand and pricing options could be included.

Let’s explore the potential of the optopus through the Virgin Galactic.

Essentially, the idea behind Galactic was to develop a technology capable of delivering paying passengers into space for a suborbital flight. Travelling at a height of around 50 miles above the Earth these passengers would then see the planet from a distance in all its glory and in a state of weightlessness at a ‘budget’ price of $200,000.

The reusable spacecraft would be so light (and could fold its wings to create extra drag) that it could dispense with a heavy heat shield to prevent it burning up on re-entering the atmosphere. And with a fin to act as a sail, it wouldn’t need so much fuel.

I visited Virgin Galactic’s HQ in 2008, taking with me around 90 strategic business ideas generated from the optopus, including:

* market sectors: corporates (eg acquisition deal meetings), governments (eg to promote ecological awareness)

* customer segments: business millionaires (by industry), celebrities/wives (footballers/pop stars, etc), the not-so-rich (by sponsorship or lottery), groups of friends

* value-creating activities: astronauts club/season ticket holders, as a present (a very big one!), differential pricing (premiums seats/service), two or three flights at once, 50-mile-high club, weddings

* value delivery: TV channels (eg

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The strategic option grid

Criteria

Strategic attractiveness

Financial attractiveness*

Implementation difficulty

Uncertainty and risk

Acceptability (to stakeholders)

Option 1 Option 2

Attractiveness score: 3=high 2=medium 1=low

* benefits less costs – net cashflows relative to investment

Option 3 Option 4

44

The third in this series of five articles examines a crucial phase of the strategy development process: generating and evaluating strategic options (defined as alternative strategies in the first article in this series). This follows on from the more analytical tools explored in the second article, and entails a great deal of strategic thinking.

As many legs as you likeFew systematic models exist for generating strategic options. Igor Ansoff created a very simple but rather limited grid (the Ansoff matrix) which displays existing products versus new products along one axis, and existing versus new markets along the other. To go beyond that I have created a more powerful method that accommodates far more than just two variables or ‘degrees of freedom’. I call it an ‘optopus’ as it has eight variables (although in practice you can have as many or as few variables as you want) ranged around and linked to a central circle that lists the options created by those variables. The eight variables are:

* value creation: the different ways in which your product adds value for the customer

* value delivery: the technologies, media and distribution to take the product to market

* alliance: different partners and different types of alliances, doing different things

* acquisition: different types and different targets to do different things

* divestment or outsourcing

* geography: national, regional, global

* market sectors

* customer segments.

AB_May_2012.indd 44 24/04/2012 11:01

4545

celebrity knock-out programme in space), alliances, NASA

* divestment/outsourcing: different aeroplane manufacturers

* geography: by customer (eg US, Europe, Middle East, Japan, China), by flight anywhere subject to launch sites (world network).

On the basis of these ideas, Galactic certainly has potential for being a global business.

The ‘so what?’ arising from this analysis is the sheer richness of opportunities that the technique reveals within the Virgin Galactic context. It appears far more effective than brainstorming.

Strategic option gridOnce the optopus has been created, it is time to do the option evaluation with the help of the strategic option grid shown opposite. The grid has the following five key criteria:

* strategic attractiveness: the external market attractiveness (based on market growth, Porter’s five forces and perhaps PEST analysis) and the relative competitive position

* financial attractiveness: the long and short term returns

* implementation difficulty: the sum of difficulty over time to achieve the strategic goals

* uncertainty and risk: the volatility of the key assumptions

* stakeholder acceptability: the extent to which stakeholders look favourably (or not) on an option.

Discussion of the criteria and scores should not be abstract but as specific as possible. Each criterion is scored for attractiveness: very attractive gains three ticks, moderately attractive two ticks, not very attractive one tick; half-ticks can also be allocated (for example, a high ‘implementation difficulty’ and ‘uncertainty and risk’ might muster one tick combined).

The strategic option grid can be used for many options including market development, product/services, new technology, sourcing, acquisitions, divestment and alliances.

The grid is effective for a number of reasons. Visually it has columns for

four, if not more, strategic options, which will help foster creativity among senior managers. The decision criteria allows managers to think about options in a more objective way. They also reflect the unconscious and informal, decision-making rules that managers actually use – especially the criteria of ‘financial attractiveness’, and ‘uncertainty and risk’.

The best way to use the grid is to:

* explore the available options

* look at the ‘degrees of freedom’

* consider how a strategic option might be achieved, and the timing options

* develop a ‘cunning plan’ for each of the options

* do the evaluation scores, based on what is behind these criteria

* check out any facts – where

evaluations look very sensitive

* ask yourself what’s the one big thing you’ve missed? – the ‘challenge’ process

Count up the number of ticks each option has. Those with a total of 12 to 15 ticks are attractive strategies on the face of it but will still need testing; those with 10 to 11 ticks probably lack cunning; those with eight or nine will need a lot more work; those with five to seven are off the menu unless they can be completely rethought; and those with fewer than five ticks shouldn’t be touched with a bargepole.

These scores will move up and down quite a lot as you goes through a ‘challenge and build’ process. Try to make them more cunning, so that shifts of two ticks in the total scores are common.

Possible pitfalls of the grid are:

* ‘strategic attractiveness’ may be scored without real thought about the environment or Porter’s forces

* ‘financial attractiveness’ may be conceived solely in the context of the short and medium term, and not include long term as well

* ‘implementation difficulty’ may be largely subjective, based mainly on the general kind of strategy rather than detailed thinking about enablers and constraints, and particularly how these will change over time; it may also lack much thought about the ‘how’

* ‘uncertainty and risk’ may be merely a global assessment and lack any granular thinking about specific assumptions

* ‘stakeholder acceptability’ may be done without thinking who all the stakeholders are, and how their agendas differ

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

TO GET THE QUESTIONS GO TO

STRATEGIC OPTIONS THAT AMASS FEWER THAN FIVE TICKS ALTOGETHER IN THE GRID SHOULDN’T BE TOUCHED WITH A BARGEPOLE* benefits less costs – net cashflows relative to investment

AB_May_2012.indd 45 24/04/2012 11:01

CPDunits on the web

SIMPLY AVOIDING THE DESTRUCTION OR DILUTION OF CUSTOMER VALUE CAN GENERATE REAL COMPETITIVE ADVANTAGE

* there may be no cunning plan at all, or for what will be done and how; as a result, many of the scores may end up looking weak simply because of a lack of truly inventive thinking.

Most managers and accountants will relapse into mediocre thinking

especially where there are low scores – it is a lot to ask to be cunning and to evaluate at the same time. An example of what can be done can be found in my book, Be Your Own Strategy Consultant, which contains a list of cunning checklists developed for Dyson.

Tips and tricksIf there is a constraint, think why it is there and how it can be avoided Rather than by resorting to simplistic brainstorming, it may help to consider why a constraint exists anyway.

Focus on constraints one at a time, always beginning with the most criticalInstead of focusing on all constraints simultaneously, pick them out one at a time to challenge and dissolve, beginning with the hardest. If that one is simply too daunting, pick off a number of the easier ones first.

You don’t always have to add valueMost writers on strategy focus on adding value, but simply avoiding the destruction or dilution of customer value can generate real competitive advantage, as Dyson demonstrated when it said ‘goodbye to the bag’.

Make your product easier to buyJust removing the difficulties of buying something can lead to increased sales. Alternatively, making it easier for the customer to buy more (mentally, emotionally and physically) can facilitate sales volume.

Make your product irresistibleSet yourself the mental goal of making your proposition so compelling that it becomes irresistible.

Study your competitorsCompetitive analysis is not particularly done well by many companies; some don’t do it at all. But doing competitor analysis is only the first stage in answering the question, how can we do things even better than them?

Building barriers to imitation It is not always important to protect against imitation. While in theory each part of a business’s competitive advantage might be imitated, it would be very difficult indeed to copy all the elements of that advantage.

Change the rules of the gameThe rules are not fixed – and you can change them. Suppose you were starting an estate agency industry from scratch at the present time. Would you have expensive BMWs for your senior sales agents? Smart cars?

Abandon mindsets (at industry, company and personal levels)Forget not only how your industry (and company) does things currently, but also how you yourself do and even think about things.

Imagine you just started in the organisation today Forget your own experience, agendas and thought patterns which have been shaped by the organisation. If you were not in the market already, how would you now enter it and with what business model?

Advise yourselfHere it may pay to conduct a special version of the out-of-body experience, imagining you are your own management consultant.

Dr Tony Grundy is an independent consultant and trainer and lectures at Henley Business School in the UKwww.tonygrundy.com

LAST MONTHTHE TOOLS OF THE TRADE: SWOT, GAP, PEST AND PORTER’S FIVE FORCES

LAST MONTHTHE TOOLS OF THE TRADE:

CPDunits on the webCPDunits on the web

46 CPDunits on the web

Technical

AB_May_2012.indd 46 24/04/2012 11:01

Cloud bustingIn the fi rst in a series of articles on cloud computing, Trevor Bingham considers the specifi c advantages the technology offers accountants

47

permission. This is particularly useful for busy times in the year such as year-end tax returns.

• Content is backed up automatically and is stored off-site, protecting against fire or other disasters that may threaten your data if it is stored in-house.

• Hosted solutions on the cloud usually carry with them the option to pay for the software on a subscription-based service, so the company never actually owns the hardware or software or has to worry about system bugs or upgrades.

• A cloud-solution means minimal capital outlay and provides a low, predictable monthly service fee, potentially providing better financial management and supporting a positive cashflow analysis.

Addressing concernsFor many, the idea of storing sensitive information anywhere other than their own office raises concerns around security, reliability, legal jurisdiction and

The cloud has risen in popularity due to increasing dissatisfaction with the costs, internal resources, complexities, and length of time that it takes to recognise value from IT investments. In a Software as a Service (SaaS) investment, the software is hosted for you, meaning external specialists handle all of the IT complexities, resourcing and management issues and take responsibility for all software and hardware support needs. This is a clear benefit because it means accountants can focus on doing what they do best, leaving someone else to worry about installation, management, support, software fixes, backup and recovery.

OptionsFurthermore, cloud-based solutions usually carry with them the option to buy the software functionality on a subscription-based service, such as Microsoft Office 365. This means that the company never actually owns the hardware or software but rather leases it as it requires. This has huge appeal to

many company accountants for the associated low cost of functionality and the speed of deploying new software.

AdvantagesThere are a broad range of potential advantages that ACCA accountants, financial controllers or accountancy firms should consider in making their judgments on the cloud:• Next to no downtime. The hosting

company will already have all the right hardware and software in place in a data centre. All they need to do is set this up to receive and manage the specific content.

• Economies of scale often mean that the overall cost of ownership is lower because the support time of cloud service providers is used more efficiently.

• By centralising particular IT activities and having these hosted off-site at the cloud provider’s data centre, users will have maximum flexibility to access the content from any office, even from home, provided they have

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48 Technical

privacy. This is particularly pertinent for the storage of financial information, including ACCA firms that host clients’ commercially sensitive material. While it is an understandable concern, this can be addressed by performing checks upon any potential cloud host. It is important to make sure the provider has a proven track record and complies with security and privacy regulations regarding data in your own legal jurisdiction. This information should be openly available and, if there is a reluctance to issue this information upfront, it is best to move on to another provider.

AppealWith technology continuing to develop and change, the appeal of tapping into cloud-based software propositions is considerable, because it means organisations no longer need to fear being locked into a product that will eventually become out-of-date or even obsolete. In the past, many wise accountants endeavoured to set aside a budget that accumulated enough capital to support an IT refresh investment every three-to-five years to keep up to date. With a cloud-based solution, this need no longer be the case.

EffecienciesUp until recently, many found the cost of a secure, accessible package on the cloud too much of a luxury. However, the development of new server technologies have brought about an increase in efficiencies that helps in driving down these costs. A cloud solution will also ensure a business avoids large on-premise set up costs for server hardware, windows licensing and antivirus software. It also eliminates the need to perform on-site backups, the

IN THE PAST, MANY WISE ACCOUNTANTS ENDEAVOURED TO SET ASIDE A BUDGET THAT ACCUMULATED ENOUGH CAPITAL TO SUPPORT AN IT REFRESH INVESTMENT EVERY THREE-TO-FIVE YEARS TO KEEP UP TO DATE. WITH ACLOUD- BASED SOLUTION, THIS NEED NO LONGER BE THE CASE

AB_May_2012.indd 48 24/04/2012 11:01

49

associated costs of a back-up device and its media, as well as software and hardware disaster recovery solutions. Added to these primary costs is that of renting office space for a server room, not forgetting air conditioning to keep servers cool and the energy used to power all these devices. All these potential cost savings provide the opportunity to improve a business’ all important cashflow.

AccessWith very high speed broadband now available across most industrial estates and business areas, access to software irrespective of location is quick and easy. Issues around reliability have been addressed as networks are now much more robust and 99.99% availability is no longer just for the big multinational companies. The cloud is for all businesses and practices whatever the size.

ConclusionIn the long term, it is essential for accountants to consider and to get to grips with all aspects of the cloud. All businesses are under pressure to increase efficiency and reduce costs but for accountants, the cloud provides a straightforward cost-effective solution for their IT needs. By making a move to the cloud, a business will ensure that it has the capability to grow while removing the risk of substantially investing in technology that could all-too-soon be obsolete. With any concerns about security, especially with commercially sensitive data, easily laid to rest, it is something all accountants should consider.

Trevor Bingham is marketing manager at Xperience. Email [email protected]

‘THERE ARE A BROAD RANGE OF POTENTIAL ADVANTAGES THAT ACCA ACCOUNTANTS, FINANCIAL CONTROLLERS OR ACCOUNTANCY FIRMS SHOULD CONSIDER IN MAKING THEIR JUDGMENTS ON THE CLOUD’

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Accounting solutionsThis month PwC authors answer two questions on accounting for joint ventures under IAS 31, IAS 38, SIC 13 interpretative guidance, and IFRS 11

Q Entity A, a mid-size luxury goods manufacturing company, needs funding to market one of its key brands globally

that it has been selling on the local market for many years. Entity A enters into a joint venture agreement with a multinational distribution company, Entity B. At the inception of the joint venture entity (Entity JV), Entity A contributes its key brand in exchange for 60% of Entity JV’s share capital, and Entity B contributes cash for 40%. An independent valuation arrived at a fair market value of €1,500 for Entity A’s brand. Entity B therefore contributed €1,000 to the joint venture. The shareholdings are unequal, but both Entity A and B need to agree strategic financial and operating decisions unanimously. Entity JV therefore qualifies as a joint venture – to be precise, a jointly controlled entity – under IAS 31, Interests in Joint Ventures. How should Entity A and Entity B account for the transaction, assuming that both entities apply the equity method of accounting for jointly controlled entities?

A The initial cost of investment in Entity B’s books is a straightforward €1,000. But the accounting in Entity A’s books

is more complex. As the brand was developed internally, it is likely to have little or no carrying value on Entity A’s balance sheet. But when ownership of the brand passes from Entity A to Entity JV, it would meet the definition of an intangible asset under IAS 38, Intangible Assets, so it should be initially recorded

accounts, Entity A will recognise its share of net assets as being €1,500. But, as the brand Entity A contributed had no value on its balance sheet, would this simply result in a ‘gain’ of €1,500 by forming a joint venture?

A The answer is ‘not quite’. The interpretative guidance in SIC 13, Jointly Controlled Entities – Non-monetary Contributions

by Venturers, only permits recognition of such gains up to the level of the equity interest held by other venturers – in other words, Entity A cannot recognise the unrealised gain on the 60% of the brand, which it effectively still owns through its stake in the joint venture. Under the equity method of accounting, the unrealised part of the gain is removed from the income statement and is instead eliminated against the investment in Entity JV. So at the inception of the joint venture, Entity A will recognise the investment at €600 – that is, €1,500 less the unrealised gain of €900 (€1,500 x 60%).

IFRS 11, Joint Arrangements, applies to financial years beginning on or after 1 January 2013. Both entities A and B should re-assess under the new guidance whether their involvement in the joint arrangement would give them the right to Entity JV’s net assets or rights to individual assets and obligations to liabilities. Assuming they conclude that the joint arrangement gives them right to net assets, the accounting would be the same as described above. This is because both entities would continue to apply the equity method of accounting, and the recognition of the unrealised gain would still be prohibited.

This month’s solutions were compiled by Imre Guba and Iain Selfridge of PwC’s Accounting Consulting Services

in the joint venture’s books at cost. In this case, ‘cost’ would be equivalent to the fair value of the shares issued by Entity JV – that is, €1,500.

Q At inception, Entity JV therefore has net assets of €2,500. Applying the equity accounting method in its consolidated

PwC’s practical guide to applying IAS 34, Interim Financial Reporting, is out this month, updated to reflect standards effective for 2012 year ends. It provides comprehensive guidance on IAS 34, an illustrative set of condensed interim financial information for a fictional existing IFRS preparer and a disclosure checklist. Copies of Manual of accounting – interim financial reporting 2012 are available to order from www.ifrspublicationsonline.co.uk

50 Technical

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Learning opportunities have been brought together within each CPD subject heading

All professionals recognise the importance of developing their skills and keeping abreast of developments. CPD helps you not only to maintain competence but also demonstrate to employers your ability to progress and take on new responsibilities. ACCA wants members to maintain the highest professional standards because their skills, judgment and integrity can add value to organisations, economies and society at large.

When ACCA made CPD mandatory in 2005 there were many misconceptions, in particular that it meant attending face-to-face courses. This has changed as members have gained CPD through e-learning, acting as workplace mentors or learning at work – under-taking tasks for the first time, consult-ing an expert about a workplace or client issue, etc.

There is still a place for attending seminars and conferences and reading articles, but it is now widely recognised that individuals are looking for greater variety and blended learning solutions. In an age when information is immedi-ately accessible, everyone wants access to learning at a time and place that is convenient for them.

The revamped CPD section of the ACCA website at www.accaglobal.com/cpd offers one-stop access to articles, e-learning, podcasts, online seminars, research and qualifications from partner organisations, and contains over 160 e-learning modules. You will find details of face-to-face courses on your local ACCA office site. Learning opportunities have been put under subject headings to make it easy to view the range of information available. You will also find details of how to meet your CPD requirements.

We hope the new resource will meet the demand for more accessible CPD. This is just the first step in improving

members’ experience of the website when looking for CPD and further improvements will appear this year.

The demand for e-learning has increased as professionals have become time-poor but also because the quality of e-learning has improved.

ACCA’s research has confirmed there is no decrease in quality with technolo-gy-enhanced learning and assessment compared with physical, classroom and paper-based learning and assess-ment.

Interviewees for the research included Richard Pollard, PwC’s global development leader, who said: ‘On an average day there might be facts I need to know and skills or techniques of which I need a reminder. I want that now. I don’t want it three months ago when I was at a training centre, and I can’t remember what I was learning.

I certainly don’t want it in six months’ time when I’ve been booked to go on a classroom session.’

Online learning and assessment technologies offer sophisticated ways to interact with learning content. You can fast-forward to more demanding modules, and pinpoint and address areas of weakness much more quickly.

Remember, learning will be consid-ered verifiable if it is:

*relevant to your career

*you can demonstrate how you have applied it

*you can prove it took place – eg copies of course materials, notes from learning, contact details of a third party who can substantiate activity completion, a certificate of course/assessment completion.

For more information, go to www.accaglobal.com/cpd

Website revamp showcases CPDLooking for skills development opportunities on the ACCA website has been made even easier, as Ros Leah, ACCA’s head of professional development, explains

51

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ACCA – The global body for professional accountants

+44 (0)141 582 2000 [email protected] www.accaglobal.com

Now it’s even easier to do business with us

Contact us by phone or email 24 hours a day 7 days a week

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AB_May_2012.indd 52 24/04/2012 11:01

BELFASTPractitioners’ Conference 29 June 09.30 – 16.30Practitioners’ NetworkRadisson BluVarious SpeakersSeven CPD units

CORKNew FCCA Evening30 May18.00 – 20.00ACCA IrelandVarious SpeakersClarion, Lapps QuayTwo CPD units

DUBLINTechnical Update1 May18.15 – 20.15Leinster Members’ NetworkAidan Clifford, ACCA IrelandRadisson Blu Royal, Golden LaneTwo CPD units

Standard & Poor’s Briefi ng2 May18.00 – 20.00Financial Services NetworkSimon Collingridge, Standard & Poor’sClarion, IFSCTwo CPD units

NAMA – In Detail3 May09.30 – 16.30Corporate SectorBrian McEnery, BDOGibson HotelSeven CPD units

Risk Management10 May09.30 – 16.30Corporate SectorAidan Horan, IPARadisson Blu Royal, Golden LaneSeven CPD units

Practitioners’ Conference 212 May 09.30 – 16.30Practitioners’ NetworkFitzpatrick Castle Hotel, KillineyVarious SpeakersSeven CPD units

Executive Career Management15 May 18.15 – 20.15Leinster Members’ NetworkRowan Manahan, Fortify ServicesClarion, Liffey ValleyTwo CPD units

Business Breakfast17 May07.30 – 09.00Business Leaders’ ForumNeil O’Leary, Ion EquityWestbury Hotel, Dublin 2Two CPD units

Growing your Business – SME Success Stories31 May18.15 – 20.15Leinster Members’ NetworkVarious SpeakersRadisson Blu Royal, Golden LaneTwo CPD units

GALWAYPersonal Bankruptcy Strategies9 May18.00 – 20.00Munster/Connaught Members’ NetworkTom Murray, Friel StaffordMenlo Park HotelTwo CPD units

New FCCA Evening16 May18.00 – 20.00ACCA IrelandVarious SpeakersClayton HotelTwo CPD units

Business Breakfast23 May07.30 – 09.00Munster/Connaught Members’ NetworkBrian McEnery, BDOClayton HotelTwo CPD units

LIMERICKTax Incentives for Back to Work Schemes16 May18.00 – 20.00Munster/Connaught Members’ NetworkEamonn Murphy, Grant ThorntonClarion, Steamboat QuayTwo CPD units

Audit Workshop23 May09.15 – 16.15Practitioners NetworkBrendan Howard, Mercia IrelandSavoy HotelSeven CPD units

SLIGOEnsuring Payroll Compliance2 May18.00 – 20.00Munster Connaught Members’ NetworkAisling Byrne, Baker Tilly Ryan GlennonThe GlasshouseTwo CPD units

Trends in Technology30 May18.00 – 20.00Munster/Connaught Members’ NetworkDamien Kealy, LHM Casey McGrathThe GlasshouseTwo CPD units

WATERFORDRevenue Update24 May18.00 – 20.00Munster/Connaught Members’ NetworkRepresentative from Revenue Office, WaterfordTower HotelTwo CPD units

53Diary

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At Grant Thornton we have extensive knowledge and experience in providing tailored solutions to Shared Service Centres for both short and long term projects.

With our global footprint spanning 100 countries we ensure our clients’ multi-national requirements are addressed while maintaining a single contact point at partner level.

Our services include;

To find out how we can help contact:Tony Thornbury – PartnerT +353 (0)1 6805 805E [email protected]

Offices in Dublin, Limerick, Kildare and Galway

www.grantthornton.ie

© 2012 Grant Thornton. All rights reserved. Authorised by the Institute of Chartered Accountants in Ireland to carry on investment business. Grant Thornton is a member firm of Grant Thornton International Ltd. (Grant Thornton International). Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered independently by the member firms.

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GRANT THORNTON 192x260.indd 1 20/03/2012 14:36:58

54 Careers

As market conditions improve into mid-2012, there are a number of accounting skill sets that are in demand in the current marketplace. Candidates want to ensure that they are being appropriately paid for their skills and the time they invest in their new role and the following is some general advice on your approach when salary is raised during an interview process.

Negotiation dos and don’tsPaul McClatchie on how best to approach those delicate salary negotiations

*DO

*DON’T

• Be patient – try and understand as much as you can about the role in advance of discussing money as it will enable you to understand how attractive the new position is. Take into account career development in terms of exposure, career progression, your impression of your potential manager and location, etc.

• Know the industry – are similar sectors making major redundancies? If they are, you may be competing against candidates who aren’t currently working and may, therefore, be a cheaper option.

• Know what you’ve got – do you have exposure to a skill or language in high demand? If this is the case, a company is likely to be aware that there is a high demand for your background.

• Ensure they understand what you have – practice selling yourself. Deeply understand what they are looking for and how you can add value or save them time and money. This is key reason they will hire you. Believe that you are worth an asking price that is fair and takes into account your additional qualities.

• Do your sums – is there a longer commute, extra cost of living or any additional factors? Nothing is more convincing than a person who is prepared and knows their value and what they want.

• Choose a role based on salary. A high percentage of roles that are vacated in the first 12-18 weeks are quick hires to replace the last person that left hastily.

• Mention a salary lower than what you’ll accept. A candidate will often say their expectations are €40-45,000 when really their bottom line is €43,000. A better option is to mention circa €45,000, adding that your next role and exposure is the most important aspect to you.

• Give the impression that salary is the biggest factor for you, even if it is. By explaining that you’re taking a long-term view for the benefit of your career and that you would appreciate a salary at an appropriate market rate, the hiring company is less likely to feel pressured. You always have the option to state your preference following the first offer.

• Feel pressured into accepting a low offer. As with all negotiations, know your perfect number, your realistic number and the lowest number you would accept on. Should an offer be delivered lower than you’re hoping for, but the role is attractive, explain your appetite for the position before adding that you had commenced the process with a lowest expectation of €X. You could then outline your hope for room for movement or, perhaps, an agreement half way.

• Use threatening language. If your interviewer feels that it will be a deal breaker not achieving the level you’re hoping for, they may well go for the simpler option of somone who will accept on the spot. Stress you are keen to come on board but it is naturally important to you that you are happy with all aspects of the role including the package and you’d like to start off on the right foot with a ‘win win’ salary arrangement.

Paul McClatchie is manager of Careers Register, the financial and legal recruitment division of the CPL Group. Email [email protected]

AB_May_2012.indd 54 24/04/2012 11:02








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GRANT THORNTON 192x260.indd 1 20/03/2012 14:36:58

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15 May 2012 • 18.15 – 20.15Clarion Hotel, Liffey Valley, Dublin

Places: €35 members / €45 non-membersSpeaker: Rowan Manahan, Fortify Services

For further details please contact Suzanne Acton on +353 (0)1 498 8918 or email [email protected]

ACCA – the global body for professional accountants

www.accaglobal.com/ireland

ACCA Leinster MeMbers’ network

exeCutiVe CAreer MAnAgeMent‘the permanent campaign – the why and how of career management’








AB_May_2012.indd 56 24/04/2012 11:02








Speaking of which…[Raising your profi le can boost your career and one way to do this is to seek opportunities to speak in

public – but fi rst you want to hone your presentation skills

When next deciding to do some public speaking, make sure you don’t stand out for all the wrong reasons. Barbara Moynihan (pictured), a trainer in communications skills, offers her top 10 tips to help counteract what she believes are the main reasons presentations fail:

1 Decide your key messageAs you prepare your presentation it’s vital that you decide on your key message or messages – try to keep to a maximum of three. Many presenters put too much content together and end up over-loading their listeners leaving them totally bamboozled.

2 Know your audienceFinding out as much as you can about your audience can really help you tailor your message and make that all important connection. Most of all you need to know what they are expecting from your presentation so that you can not only get your key message across but address their needs too.

3 Use a good structureHave a pre-planned opening and a pre-planned closing in addition to the main body of your speech. It’s a good idea to know your opening and closing almost verbatim, so no matter how the presentation has gone in the middle, you will have given a good first impression and left with a positive lasting impression.

4 Put meat in the middleIn order to keep their attention throughout your presentation it is important to have a well-structured main body.

Here the key is to divide this part of the presentation into three ideally, but up to a maximum of five, main topics. For each of the topics or themes be conscious of varying the content between facts, figures, anecdotes, use of slides and/or props.

5 Bring your figures to lifeA common question from accountants is ‘how can I make a presentation full of figures interesting?’. Make the figures relevant to something your audience can relate to. Let’s pick the figure of 250,000 – if you know your audience has an interest in rugby or there’s just been an International at the weekend, why not say ‘this is the equivalent of filling Twickenham three times’?

6 Practice, practice, practicePractising will certainly make you more familiar and comfortable with your material. Practising out loud is by far the best way to practice effectively – if you can get a colleague or even a family member to listen, even better.

7 Slice and dice the PowerPointIf you want to guarantee getting and holding your audience’s attention keep the content on each of your PowerPoint slides to a minimum. Your audience did not come to see you reading. For the slides that contain figures, they came to hear you expand on the numbers. It’s not necessary to put every single figure on every single slide.

8 The SOS (sound of silence) – the best tool your voice can useWhen we write we use punctuation to break up our content. Punctuate your presentation. Silence allows you time to let your mouth catch up with your brain and your audience digest what you have just said.

9 Watch your default faceYour default face is the face you have when you’re not conscious of your expression. You might be surprised at how serious yours is. When presenting, having a pleasant face and smiling

occasionally can really help an audience warm to you.

10 Start on time and finish earlyHow many presenters run over time? Wouldn’t it be nice to stand out from the crowd for finishing on time – or even early?

Barbara Moynihan is past presi-dent of Toastmasters Inter-national and founder of On Your Feet www.onyourfeet.ie

57CareersLOOKING FOR A NEW JOB? www.accacareers.com/internationalLOOKING FOR A NEW JOB? www.accacareers.com/international

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Fighting Blindness 192x260.indd 1 24/04/2012 09:49:42

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DIVERSITY IN THE FINANCE FUNCTIONFresh thinking was to the fore as fi nance professions gathered for a recent ACCA breakfast briefi ng in Dublin

‘Finance diversity and the new role for finance chiefs’ was the theme of the recent business breakfast hosted by ACCA Ireland at the Four Seasons Hotel Dublin on 20 March 2012. The first in a series of events planned by ACCA Ireland aimed at CFO, FD and CEO business leaders, the morning centred on new ACCA research showing that external challenges can best be responded to by greater diversity in the finance function. A networking as well as a thought leadership event, it was attended by senior business leaders from over 30 organisations including IBM, Microsoft, Pfizer, Smurfit Kappa, Baxter Healthcare, Jacobs, Campbell Catering, Siemens, the Irish Dairy Board and the Irish Aviation Authority.

Change and diversityIntroducing the line up of speakers, which included founder and former chairman of Cooley Distillery, John Teeling, and Richard Lundon FCCA, CFO of IBM Ireland, Liz Hughes, head of ACCA Ireland, said that companies around the world face almost unprecedented uncertainty as they deal with the on-going fall-out from the financial crisis and a regulatory

environment that was more complex than ever before. With a global shift to emerging economies and continuing stresses in the banking sector, Hughes said the recent ACCA research paper Building a Better Business through Finance Diversity highlights how, over the last four-to-five years, the role of CFO has taken on an even greater importance in the corporate hierarchy and suggests that to succeed in such a dynamic and unpredictable environment, companies need finance professionals who can think creatively and devise new solutions to new problems.

‘This highly diverse set of business challenges requires managers with an experience of diverse cultures and practices,’ Hughes said. ‘Companies need to put in place processes that help to identify talented executives and give them the range of experiences that they need to succeed as they broader their roles.’

EvolutionThe ACCA research underlines the importance of diversity within the finance function, so that companies have the necessary breadth of experience to navigate challenging

and novel environments, particularly when expanding into or trading with developing economies.

‘Over the past decade, the finance role has evolved significantly. Once seen as number crunchers, heads of finance are increasingly becoming trusted senior advisers and business partners. This more strategic role requires a broader skillset that goes well beyond the traditional finance capabilities,’ Hughes said. ‘In diversity lies innovation, which, in turn, can improve business practice and performance. Only by embracing new skills and a broader understanding of the business can CFOs become the business leaders we need now and in the future.’

CFO perspectiveRichard Lundon has been CFO of IBM Ireland for the last four years and, as first guest speaker of the morning, spoke of the changing role of the finance function within IBM over the last few years. Tracing this process of change back to the early 1990s, he pointed to the development of centres of excellence that focused on various aspects of the finance function as pivotal. ‘When you have common

59ACCA

John Teeling

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60 ACCA

The ACCA Ireland Funds Forum held its breakfast briefing in the Gibson Hotel, Dublin, on 23 March. Over 80 members, including members of the ACCA Funds Forum and guests representing over 35 employers in the funds sector attended the event, which offered an insightful perspective from independent European financial affairs analyst Graham Bishop on national and international developments relevant to senior managers in the Irish funds industry. Bishop was a member of the European Commission’s Maas Committee in 1994/5, which was pivotal in the preparation for the changeover to the single currency.

Centred on the theme of ‘doing business with Ireland’s funds industry’ the event was moderated by head of ACCA Ireland, Liz Hughes.

ImpactIn a broad-ranging presentation, Bishop argued the case against the eurozone break up, making reference to the impact that any rumour of such a breakup would have in relation to the sudden movement of capital. Bishop first reflected back on his time in the Maas Committee and the emphasis it put on tangible and uniform euro notes

Opportunity for the funds industryThe restructuring of Europe’s banks poses an opportunity for the funds industry, guests at a recent ACCA Ireland event were told

systems and common practices in centres of excellence around the world, it allows individuals who are situated in these country to become what we call “value integrators”. By becoming value integrators, individuals not only contributed to process evolution but raised their individual profiles within IBM.’ Reflecting on the ACCA study, Lundon said the theme of diversity resonated with him as did its recognition of the new set of skills required of accountants. ‘Diversity leads to better ways of doing things. When I am hiring now I look for people who can think creatively and I also want individuals who can play the role of trusted business advisers.’The ACCA study looks closely at how professionals gain experience in the finance function and Lundon explained how, in IBM, accountants are given a variety of different roles so as to better understand the business and better play their role as a significant business support. Recommending the ACCA report as essential reading, he reminded delegates that change was a given in the decade ahead. ‘I can guarantee you that the finance function that your organisation has in five years will be completely different to how it is now,’ he concluded.

Distilling wisdomKeynote speaker of the morning was founder and former chairman of Cooley Distillery, John Teeling, who hit the headlines in December 2011 when he sold the company for €73m to US distillers Beam. An academic turned entrepreneur, Teeling holds

a doctorate from Harvard Business School and enjoyed a distinguished career as an economics lecturer before turning full-time to business. Giving his views on the current state Irish economy, he offered some radical suggestions on government economic strategy.Most notably, Teeling said it was his view that austerity is not working. ‘Cutting €4bn a year from demand and/or increasing taxes further will only depress the economy further and destroy the middle classes,’ he said, adding that, for the country to have a brighter future, a number of things needed to be done. ‘Firstly, we need to restructure the €180bn of debt. We should seek to defer the €80bn spent by the government on the Irish banks for a period of up to six years – to give the country a chance to recover, and replace this with the creation of bonds with a 30-year repayment schedule.’Teeling also argued that the euro needs to be restructured and said ‘it will happen sooner or later. The creation of a two-tier euro will allow Ireland to devalue. Both of these measures will allow a reduction of the austerity programme, which is a must if the Irish economy to grow,’ he said.

Interested in participating?If you are a CFO or FD interested in participating in future ACCA research projects or would like to attend a future ACCA business briefing, contact Helen Foy FCCA, business development manager, ACCA Ireland. Email [email protected]

Richard Lundon FCCA, CFO of IBM Ireland; Liz Hughes, head of ACCA Ireland and John Teeling, founder and former chairman of Cooley Distillery

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6161

and coins as part of the introduction of the currency. Had that not been done, he argued that, in the case of the current crisis in Greece, a mass flight of conversion of ‘Greek drachmas’, to a more stable euro currency, would have led to a run on the banking system that would have been fatal for both the banks and the economy.

Capital flowsWere the euro to break up in its current form, he said the capital flows that would happen would be so large that they would completely overwhelm the reserves that any central banks might have. ‘The result would lead to capital controls that would lead to cross-boarder financial services to stop within a matter of days.’

Bishop also pointed out that the robustness of steps already taken to save the currency would, only two years ago, have been unimaginable. Among them he noted the Stability and Growth Pact (also known as the ‘six-pack’ because of its five regulations and one directive), which forms the

basis of what he said was an intrusion of the EU into not merely fiscal but also economic policy among Member States. The six-pack, which came into effect on 13 December 2011, could, he said, be seen as the basis for effective political union in the eurozone. The following ‘two-pack’ and the treaty, on which Ireland will vote on later this year, will amplify these measures but the base has already been established, he noted.

GrowthBishop also discussed specific growth policies that would help the economy and the role the funds industry would have to play. ‘Growth is the key and consumer spending is the engine of growth,’ he said, pointing to studies that showed a return to confidence by consumers would have a significant countering effect to the austerity measures being implemented by governments. Highlighting the need for novel and constructive ideas that would allow governments in Europe easier access to funding over the coming four

years, he said it was important to move beyond the ideas of ‘firewalls’ and look at approaches that would drive bond yields down and allow the process of recovery to start. ‘Europe doesn’t need the IMF. We have quite enough money here to solve these problems. It just need to be properly channeled,’ he said.

De-leveragingBishop concluded his briefing by discussing regulation and political developments in the EU up to and beyond 2013.

Noting that commissioner Michel Barnier was now in the second half of his term, he pointed to the impressive level of legislation that he had delivered in his first two years in office. ‘In the second half of his term, it is clear that the consumer agenda and consumer protection are going to be big.’

Bishop spoke of potential opportunities for the funds industry in relation to de-leveraging the banking sector and the possible use of UCITs fund structures. Noting that banks in the US represent 20% of GDP, whereas in the EU they are 40%, he said that rebalancing this ‘would mean €9tr of assets which still need to find a home. If you want to put that into the “other financial institutions” sector, where is that going to go? It has to go to the funds industry.’

Bishop said that a profound rethink of the entire financial services system was needed as part of the longer-term response to the crisis, concluding that ‘if Commissioner Barnier is looking for a way to leave his mark, then a re-working of the banking system, after all its sins, could be seen as a good thing to do.’

(Left to right) Brian Donnellan FCCA, business development manager, ACCA Ireland; Graham Bishop, speaker and Liz Hughes, head of ACCA Ireland

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The world is undergoing a period of profound transformation driven by global political, economic and tech-nological shifts. Taken together, these forces suggest that the role and expec-tations of the accountant of tomorrow and the industry they inhabit could be radically different from the profession today. So how can the profession pre-pare for an uncertain future when we all feel there is already a full agenda dealing with today’s challenges?

Recognising the need to help accountants explore these long-term drivers of change, ACCA has started the Accountancy Futures Academy. Its mission is to provide a radar to highlight the trends, driving forces and ideas that could shape the future global business and accountancy landscape.

The first output from the academy is a consultation with members of ACCA’s global forums. The objective is to identify the drivers of change that accountants should be thinking about to prepare them for future challenges. This article looks at some of the emerging findings from the study being coordinated by Fast Future Research.

The changing economic landscape is seen as central to any exploration of the future of business. We are in the middle of a period of deep economic uncertainty. For accountants, this puts the spotlight on our risk and resilience plans – how are we factoring in the potential collapse of key parts of the economic infrastructure in individual markets or globally?

Increasing influenceWhile mature economies focus on surviving and navigating the current turbulence, emerging economies are growing, particularly the BRIC nations. It is clear that the BRICs will have an increasingly influential say in how global economic systems are shaped

and governed. These countries are presenting global accountancy firms with opportunities, in terms of markets to expand into, but also challenges as a potential source of future rivals. Could we see multinationals transferring their accounting business to firms from the BRIC economies?

Political power can be expected to follow financial power, with both China and India having more of a say on the evolution of the key institutions of global governance. This could give both countries the platform to set the rules and agenda for the new so-called Asian century. This could have far-reaching implications for how the global accountancy profession evolves in future, especially with regards to the definition and adoption of uniform global accounting standards. Could these standards come to reflect Eastern rather than Western practices?

Population shiftsDemographic shifts are reshaping the make-up of the global population. By 2050, the Asia Pacific region will have grown by more than the populations of Europe and North America combined, with Europe itself expected to shrink by around the size of Germany. Global life expectancy is projected to continue increasing and enforced retirement ages abandoned. This raises questions about how we effectively manage and provide career opportunities for multiple generations in the workforce.

The business of business is also undergoing fundamental change – with new business models offering the potential to transform our notions of risk and value. Firms are increasingly opting to switch from ownership of fixed assets to renting the services provided by those assets – cloud computing is one such example. The risks of new product development and

new venture creation are also being transformed by crowd-sourcing models such as Kickstarter.com, which enable entrepreneurs and innovators to raise the necessary financial commitments from the customer before embarking on the project. Sales approaches such as aggregated buying and the auction model are increasingly being used by businesses to sell their offerings. How will accounting practices and risk assessments need to change to take account of a rapidly changing set of business models with often unpredict-able revenue streams?

The financial crisis has highlighted the need for businesses to construct ‘living wills’ to facilitate an orderly unravelling of their affairs in case of insolvency. Accountants can play a key role here, but how deeply will the finance function need to be embedded

Tomorrow’s worldACCA’s Accountancy Futures Academy is exploring the future role of accountants. It will be radically different, say academy chairman Ng Boon Yew and futurist Rohit Talwar

Chairs of ACCA’s 10 global forums met for a Global Forums Symposium in March in London to discuss the issues that will be confronting the accountancy profession over the coming months and years.

A presentation based on the research described in this article provided a basis for lively discus-sions on a wide range of topics including global economic uncer-tainty, audit, complexity, regulation, adding value, principles, sustainabil-ity, investors and reporting, the public sector and fraud.

The forums aim to further thinking on current and future issues in a number of specific areas, as well look at the challenges and opportuni-ties facing the accountancy profes-sion generally.

*FORUM SYMPOSIUM

62 ACCA

AB_May_2012.indd 62 24/04/2012 11:50

Accountants must learn to plan for and think in terms of multiple possible scenarios. An emerging competence is developing the agility and processes to cope with ever-shorter business cycles. Accountants also need to become adept at navigating and tackling operational and regulatory complexity and the rising number of non-financial indices used to measure value. The need to play a bigger role in business decision-making and the globalised nature of work mean accountants seeking international opportunities will have to expand their strategic, language and cultural skillsets. The backlash from the financial crisis, combined with greater moves towards environmental sustain-ability, will also result in growing regulatory requirements for accountants to act as public interest watchdogs.

*GOING IN FOR THE SKILL

in the transactions, products and pricing models of the organisation to appreciate the scale and detail of what needs to be unravelled?

The growing complexity of business and the need for integration are placing greater demands on informa-tion technology. IT has revolutionised

the workplace – digitising workflows and assets, and creating new opportu-nities with people generating real-world fortunes from buying and selling virtual assets in online environments such as Second Life. Advances in artificial intelligence could lead to further automation of accounting functions.

Further down the road, technological advances could mean we download core accounting data directly into our brains. The core question is whether the roadmap for accounting systems development will be flexible enough to cope with a range of possible business scenarios.

Taken collectively, all these drivers suggest we are now entering a period of fundamental change for the global economy, for the general world of business and, as a result, for the accountancy profession.

Ng Boon Yew FCCA is chairman of ACCA’s Accountancy Futures Academy and executive chairman of Raffles Campus. Rohit Talwar is a global futurist and founder and CEO of Fast Future Research.

Accountants must learn to plan for and think in terms of multiple possible scenarios. An emerging competence is developing the agility and processes to cope with ever-shorter business cycles. Accountants also need to become adept at navigating and tackling operational and regulatory complexity and the rising number of non-financial indices used to measure value. The need to play a bigger role in business decision-making and the globalised nature of work mean accountants seeking international opportunities will have to expand their strategic, language and cultural skillsets. The backlash from the financial crisis, combined with greater moves towards environmental sustain-ability, will also result in growing regulatory requirements for accountants to act as public interest watchdogs.

63 FOR MORE ON THE ACCOUNTANCY FUTURES ACADEMY GO TO

www.accaglobal.com/globalforums

FOR MORE ON THE ACCOUNTANCY FUTURES ACADEMY GO TO

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As ACCA’s governing body, Council plays a pivotal role in ACCA affairs.

* It ensures that ACCA operates in the public interest and delivers the objectives stated in its Royal Charter.

* Council sets ACCA’s overall direction through regular approval of strategy.

* It acts as a link between members and the professional body, and leads the organisation in the interests of both.

* It is accountable both to members and the public interest.

* It acts for all members and future members (today’s students).

* It provides leadership of ACCA and stewardship of its resources.

Council develops policy for ACCA as a whole and Council members are volunteer custodians acting for the well-being of the whole organisation. Whatever their geographical or sectoral bases, Council members do not represent particular areas or functions

and are elected by the membership as a whole.

ACCA members of all ages and backgrounds are encouraged to stand for election to Council. Long-term or technical experience is valuable, but so is the proven ability to participate actively in strategic decision-making. Council experience as such is not necessary. However, an understanding of good governance is essential, and personal and professional integrity must be of the highest order.

Specifically, ACCA expects members to bring the following skills and attributes to Council:

*an ability to take a strategic and analytical approach to issues and to see the big picture;

*an understanding of the business and the marketplace;

*communication and networking skills;

*an ability to interact with peers and respect the views of others;

*decision-making abilities;

*an ability to act as ambassadors in

many different environments;

*planning and time management; and

*a willingness to learn and develop.Nominations are now invited for

election to Council at the 2012 AGM. Candidates must be nominated by at least 10 other members in good standing. Candidates should supply a head and shoulders photo and an election statement of up to 180 words, which should not include references to email addresses or websites. Candidates are also required to sign declarations of their willingness to comply with, and be bound by, the code of practice for Council members.

Further information on the Council election process, including pro forma of nomination forms, may be obtained by writing to the Secretary at 29 Lincoln’s Inn Fields, London WC2A 3EE, by faxing +44 (0)20 7059 5561, or by emailing [email protected] (please put ‘Council Elections’ in the subject box).

Elections to Council

64 ACCA

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Council’s first scheduled meeting of 2012 took place on Saturday 10 March. The guest presenter was Katrina Wingfield, chairman of the ACCA Regulatory Board, who presented its annual report for 2011.

The Regulatory Board was established after the AGM in May 2008 and brings together all of ACCA’s arrangements for regulation and discipline in a single entity. It stands at arm’s length from Council and the majority of its members are lay individuals.

The report of the Board for 2011 covered the third full calendar year of its operation. It focused on a successful regulatory event organised in October 2011, at which Sir Ian Kennedy was guest speaker, and the establishment by the Board of an Overview of Regulatory Procedures Working Party. Council was pleased to note that the report overall underscored the Board’s commitment to continuous improvement in regulation and was reassured that, going forward, the Board would continue to provide proactive oversight of ACCA’s disciplinary and regulatory processes.

A number of other issues were considered in Council’s formal sessions:

* Council met in discussion groups to debate the competitive landscape in the global profession and ACCA’s response to it.

* Council considered the regular report of chief executive Helen Brand. This covered ACCA’s performance, as well as a review of its strategic development and developments in the wider profession.

* On a recommendation from the

Resource Oversight Committee, Council approved the proposed budget for the organisation for 2012–13. Following a recommendation from a group of standing committee chairmen, Council also approved achievement measure targets put in place to track ACCA’s strategic performance in 2012–13.

* At the request of the Regulatory Board, Council considered its policy with regard to ACCA students who hold AAT practising certificates. Council agreed to maintain its current policy to recognise only professional-level, IFAC member body-issued practising certificates and not to introduce any dispensation for AAT practising certificate holders.

* Under the terms of membership regulation 3(f), Council agreed to invite into ACCA membership four senior accountants from Indonesia – Rosita Uli Sinaga, Ahmadi Hadibroto, Irhoan Tanudiredja and Langgeng Subur.

* Council was pleased to approve the signing of a renewed Mutual Recognition Agreement with the Malaysian Institute of Certified Public Accountants.

* Council confirmed Anthony Harbinson as its preferred nominee for vice president 2012–13. (The formal elections for ACCA’s officers will take place at the annual Council meeting immediately following the AGM on 20 September 2012.)

Council’s next meeting will be in June 2012, when it will meet in Nairobi, Kenya as part of the biennial series of meetings held in ACCA’s key international markets.

Council highlights

65

Nairobi: next meeting

HONORARY DEGREE FOR ACCA CHIEF EXECUTIVE ACCA chief executive Helen Brand has been awarded an honorary degree by BPP University College in recognition of her services to the development of education and training for the accountancy profession. Brand said: ‘This is a real privilege for me and for the whole of ACCA. I know that ACCA shares BPP’s values when it comes to training the accountancy professionals of the future.’ Professor Carl Lygo of BPP said: ‘Our students, faculty and clients will benefit from the expertise, knowledge and reputation that Helen will bring to BPP.’

TRAINEE CHANGES The trainee development matrix (TDM) for ACCA students has been overhauled. The tool, used by trainees to plan and record their achievement of Practical Experience Requirements (PER), has been renamed My Experience. It will remain accessible via myACCA, and a reminder pop-up will prompt trainees to update their own experience status regularly. They no longer have to provide an annual PER return. More at www.accaglobal.com/en/student/experience.html

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Awards for excellenceThree IT Tralee accounting students received awards for excellence in recognition of their exceptional performance in their accounting degree programme. The high achieving students were (left to right) Geraldine Quilter, Duagh, Listowel; Enda Gildea, Tarbert, Listowel, and Fezile Maphosa, Killarney. The awards were presented by Una McShane, ACCA Ireland head of Employer Relationships, who commended the students on their success and outlined the range of career opportunities in accounting and finance that were now available to ACCA graduates.

THINKING SMALLThe ACCA Ireland Facebook page has had a makeover and now features the new Facebook timeline.

This new layout is highly visual with much more space dedicated to photos and stories, and means it can not only tell ACCA’s story but also increase engagement between ACCA and stakeholders. ACCA Ireland milestones will feature on the timeline and offers a great way to learn more about ACCA Ireland’s story. Find us at www.facebook.com/ACCAIreland

57 Diversity in the finance function

58 Opportunity for the funds industry

Inside ACCA

ACCA Ireland congratulates Cian McComb who was first in Ireland and first in the world (out of 23,316 students) for P1 in the recent ACCA exams. McComb is from Castlebar, Co. Galway, and is currently working for Ernst & Young in Luxembourg

66 ACCA news

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