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Volume 52
Number 2
APRIL 2020
The life of a leader
Six influential leaders in business
and politics share their stories
GOOD GOVERNANCE COMBATING A GUIDE TO
IN A CRISIS CYBER RISK REMOTE WORKING
How to manage your Why cyber behaviour How to make remote
governance obligations in organisations is the working work for an
through COVID-19 board’s business extended period
Recruitment
beyond
accounting.
Chartered Accountants transcend industries and
functions. So do we, with our intelligent approach
to recruitment.
• Accounting & Finance • Funds & Asset Management
• Banking • HR
• Construction • Office Support
• Emerging Tech • Legal & Compliance
• Food Manufacturing • Property
azon.ie Dublin | Limerick | London | Luxembourg
3
Welcome
Welcome to the April issue
of Accountancy Ireland.
if managed correctly, Ireland’s reputation as an open,
adaptable yet stable economy also presents opportunities.
Engagement with US members and politicians
At the time of writing, the Institute’s Director of Advocacy
& Voice, Dr Brian Keegan, and myself are currently
meeting with members and politicians in the USA.
The programme has involved meetings in New York
with Northern Ireland Economy Minister, Diane Dodds,
and Consul General of Ireland, Ciarán Madden, before
moving on to Washington DC for various events including
the Irish Business Leaders’ Lunch, the Irish Funds dinner
and the NI Bureau breakfast.
Throughout the visit, we have had a very warm
welcome from members based in the US and some really
useful engagement with political representatives from
A
t the time of writing, efforts to contain the spread both sides of the Atlantic.
of coronavirus are undoubtedly the focus of
attention for society and business across the Institute signs climate change pledge
island. This is a very serious and fast-evolving situation, In February, our Institute announced that it is one of 14
and Chartered Accountants Ireland will adhere to the accounting bodies worldwide to become signatories to a
official advice provided by our respective health services call to action on climate change issued by Accounting for
and governments. The safety and health of our members, Sustainability (A4S).
students and staff are paramount, and that principle The memorandum of understanding signed by Chartered
guides the decisions taken. Accountants Ireland states that signatories will commit to
The Institute is reviewing its programme of providing the training and infrastructure that accountants
activities in respect of members, students and external need, as well as supporting initiatives and providing the
stakeholders. We will be in contact with everyone necessary evidence to take action on climate change.
concerned to advise them of all decisions made. In signing the memorandum, Chartered Accountants
I would like to take this opportunity to commend Ireland recognises that climate change is an economic,
businesses across the island for their responsible attitude social and business risk and that accountants must take
to their employees and customers in following official action collectively as a profession and individually as
guidelines. Such decisive action will, we hope, effectively professionals working in the public interest.
curtail the spread of the virus. The 14 accounting bodies signed up to the agreement
represent a total of 2.5 million accountants and students
Paschal Donohoe T.D. worldwide.
At the start of March, we were honoured to host Minister
for Finance, Public Expenditure and Reform, Paschal Annual Dinner
Donohoe T.D., who addressed an invited audience of Finally, this is my first comment section since our Annual
Institute members and guests. Dinner at the end of January. I would like to record my
Inevitably, coronavirus featured prominently with thanks to the 900 guests who supported the event; to
the Minister predicting that the Irish economy would our event partners Dublin Airport, Bank of Ireland,
be impacted by the global slowdown associated with the PeopleSource and Toyota; to our special guest, Lochlann
outbreak. He said: “Many, including the OECD, outline that Quinn FCA; and, most particularly, to the many corporates
this outbreak has the potential to slow global growth to who supported the event by hosting tables. For me, it
its lowest rate since the financial crisis just over a decade was another great demonstration of how Chartered
ago. To what extent, it is too early to say, but it follows that Accountants are at the heart of our economy, driving Irish
weaker growth will affect our short-term outlook and my business.
department will update its projects in April”.
Turning to Brexit, the Minister argued that while the Conall O’Halloran
post-Brexit world will present significant challenges, President
www.accountancyireland.ie
4
Contents
Publisher
Institute of Chartered Accountants in Ireland
Chartered Accountants House
26
47-49 Pearse Street, Dublin 2
Telephone: +353 (1) 637 7200
Email: hello@accountancyireland.ie
Copyright © 2020
Institute of Chartered Accountants in
Ireland. Articles may not be reproduced
without prior permission.
Disclaimer
The views of contributors to Accountancy
Ireland may differ from official Institute
policies and are not necessarily endorsed
by the Institute of Chartered Accountants in
Ireland, its Council, its committees, or by the
editor. The publishers, editor, and authors
accept no responsibility for loss resulting
from any person acting, or refraining from
acting, because of views expressed or
advertisements appearing in this publication.
Accountancy Ireland team
Managing Editor: Stephen Tormey
Telephone: (01) 637 7240
Deputy Editor: Liz Riley
Telephone: (01) 637 7392
Advertising Sales: Dylan Conway
Email: dylan.conway@charteredaccountants.ie
Telephone: (01) 637 7241
Interview
Website: www.accountancyireland.ie
Joan Curry discusses her varied
Subscription rate
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1 year: Europe €58, Rest of World €112.
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appointment to the board of IFAC.
Printing: Boylan Print Group, Drogheda.
ISSN: 0001-4699
Regulars
A member of Magazines Ireland Please recycle
90 03 President’s
welcome
Accountancy Ireland supports the work
of the Press Council of Ireland and the
Office of the Press Ombudsman, and our
09 News
staff operate within the Code of Practice.
You can obtain a copy of the Code,
16 Gallery
19 Comment
or contact the Council, at
www.presscouncil.ie, by phone at
(01) 648 9130 or lo-call 1890 208 080
or by email at info@presscouncil.ie
83 Membership
84 Regulation
86 Commercial
features
Accountancy Ireland | April 2020
CONTENTS 5
Features 66 63
38 Innovations in third-level
accounting education
42 The changing face of your
profit and loss account
46 The 2019 Partnership
Regulations
50 Selling your business
55 Not all talk is cheap
58 Why cyber behaviour is the
board’s business
60 Unleash your data
analytics capability
63 How to make remote
working… work Careers Spotlight
64 Developing a framework
for climate-related risk 92 Use the 80/20 32 Senan Murphy, CRH
66 Another new dawn for principle to find a 33 Michael Cawley,
gender pay gap reporting? job you love Ryanair
70 Get to grips with the 95 The power of three 34 Ronan Dunne, Verizon
revised Institute Code of good things 35 Sharon Cunningham,
Ethics 97 On the move Shorla Pharma
73 How to manage your 98 Accountant sinks 36 Michael McGrath T.D.,
governance obligations teeth into dental Fianna Fáil
through COVID-19 market 37 Fergal O’Dwyer, DCC
Tax
74 Turbulent times for
tax receipts?
76 Capital allowances
for structures and
buildings
78 VAT matters
78 80 Tax deadlines
www.accountancyireland.ie
6 CONTRIBUTORS
1. Our contributors
1. Eimear McGrath
Eimear McGrath is Associate Director at the
Department of Professional Practice in KPMG.
In her article, Eimear explores some of the key
impacts of the European Union (Qualifying
Partnerships: Accounting and Auditing) Regulations
2019 and asks to what extent they will widen
the financial reporting and filing obligations for
2. partnerships.
2. Ted Webb and
Raymond Donegan
Raymond Donegan is Director and Head of Family
Businesses at IBI Corporate Finance, and Ted Webb
FCA is Managing Director at IBI Corporate Finance.
In their article, Raymond and Ted outline a four-step
process that, if followed, will maximise the potential
3. for a successful sale of your, or your client’s, business.
3. Sarah Hipkin
Sarah Hipkin is Director, Data Protection, at
Mazars Ireland. In her article, Sarah argues that
organisations must develop a cyber strategy and
culture that considers the human element if they
4. are to minimise the associated financial, legal and
reputational consequences of potential security
breaches.
4. Aoife Newton
Aoife Newton is Head of Corporate Immigration
and Employment Law at KPMG Ireland. While the
outgoing Government made limited progress in
introducing gender pay gap reporting legislation
in the Republic of Ireland, Aoife notes that it
remains to be seen whether the next government
5. will echo the same commitment.
5. Eugene Moore
Eugene Moore, Corporate Tax Manager at BDO
Northern Ireland, looks at the UK’s Structures and
6. 6. Buildings Allowance (SBA). With some projects
coming into use, it is time for owners and their
advisors to consider the significant tax relief
available and how best to mitigate the risks of
making an invalid claim.
6. Orla Doyle
Orla Doyle, Head of Marketing at Lincoln
Recruitment Specialists, explains how Chartered
Accountants can harness the benefits of the 80/20
rule in their job search strategy to target the right
company, the right culture, the right management
team, and help secure the job of their dreams.
Accountancy Ireland | April 2020
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NEWS 9
This is the second
award Mairéad has
won in recent months.
News in brief
Mazars Partner,
Mairéad Divilly, Helena O’Dwyer, Head of wavespace at EY and Frank O’Dea, Chief Innovation Officer at EY.
scoops Irish EY launches wavespace client
Women’s Award
innovation centre in Dublin
M
airéad Divilly, Lead
Outsourcing Partner at EY launched its new EY wavespace centre in Dublin, expanding its global
Mazars, won the Services network of innovation centres that bring EY technology and business experts
to Accounting & Finance category together with clients to achieve business transformation. EY wavespace
at the second Irish Women’s provides facilitated sessions to its clients in Ireland that use design thinking
Awards 2020, which took place methodologies and deep expertise across sectors and technologies.
at the Blanchardstown Crowne The firm anticipates that 20% of EY employees will work in technology-
Plaza Hotel in Dublin recently. focused roles by 2022 and has set a target that 25% of its graduate recruits
This is the second award come from STEM backgrounds in the same period. This is in addition to the
Mairéad has won in recent investment of more than $530 million globally in upskilling all EY staff in future-
months. In September, she focused skills, including emerging technology.
received Skillnet Ireland’s award
for outstanding contributions
at their 20th Anniversary Gala
Dinner Celebration.
IASB reviews accounting for goodwill
T
A Fellow of Chartered he IASB recently published for The IASB’s preliminary view is
Accountants Ireland, Mairéad public comment discussion that there is no compelling evidence
provides support for companies paper DP/2020/1 on Business to justify changing accounting
in payroll, HR, tax compliance, Combinations – Disclosures, for goodwill and the costs that
accounting, audit and advisory Goodwill and Impairment. such a change would entail.
services and specialises in Comments can be submitted to the This discussion paper provides
compliance for corporates IASB until 15 September 2020. stakeholders with an opportunity
establishing operations both The IASB’s preliminary to explain whether they agree with
in Ireland and other overseas view is that it should retain the that preliminary view.
jurisdictions. impairment-only approach to The proposals result from the
Mairéad is a non-executive accounting for goodwill and develop IASB’s post-implementation review
director of Skillnet Ireland and proposals to improve disclosures of IFRS 3 Business Combinations
represents the interest of the Small about acquisitions. The IASB accepts (report and feedback statement
Firms Association on the Skillnet that both the impairment-only and published June 2015).
Ireland Board. She also leads the amortisation models for accounting The discussion paper is available
CSR strategy at Mazars Ireland. for goodwill have limitations. on the IASB’s website, www.ifrs.org
www.accountancyireland.ie
10
Crowe presents fundraising This is a testing time
cheque to LauraLynn for the local economy
Leading Chartered
Accountant says
executive must win
Pictured (from left) are: Claire Shiels, Corporate Fundraiser, LauraLynn with Patrick Foley and Paul Lynch, Crowe. back confidence
with reform
C
rowe employees recently presented a cheque for over €10,000 to the firm’s 2019
T
charity partner, LauraLynn. he Chairman of Chartered
Crowe staff participated in a range of fundraising and volunteering Accountants Ireland Ulster
initiatives throughout 2019 to help support LauraLynn’s children’s hospice and all the Society has called on the
incredible work they do to help support children with life-limiting conditions and Northern Ireland Executive to
their families in Ireland. implement “much needed reform”
in the health and education
sectors and to re-energise the
Government announces supports for local economy.
businesses impacted by COVID-19 Speaking to over 360 guests
at the Ulster Society’s Annual
The Minister for Business, Enterprise for vulnerable but viable firms that Dinner, sponsored by Danske
and Innovation, Heather Humphreys need to restructure or transform Bank and MCS Group, Richard
T.D., has announced a package of their business. Gillan called on the Executive
supports for businesses impacted by • The maximum loan available to provide investment in
COVID-19. Supports include: from MicroFinance Ireland will be infrastructure and skills; and to
increased from €25,000 to €50,000 adopt a business-friendly strategy.
• A €200 million Strategic Banking as an immediate measure to Richard said: “This is a
Corporation of Ireland (SBCI) specifically deal with exceptional testing time for the local
Working Capital scheme for eligible circumstances that micro- economy. Factors such as Brexit
businesses impacted by COVID-19. enterprises – (sole traders and firms and cutbacks in Government
Loans of up to €1.5 million will be with up to nine employees) – are spending will be challenging, but
available at reduced rates, with up facing. Applications can be made our members see the restoration
to the first €500,000 unsecured. through the MFI website or through of the Northern Ireland Executive
Applications can be made through your local enterprise office (LEO). as a very positive move. Whilst
the SBCI website. • The Credit Guarantee Scheme will be the restoration is most welcome,
• A €200 million package for available to COVID-19 impacted firms the last three years have left us
enterprise supports including a through the Pillar Banks. Loans of with a lot of catching-up to do,
Rescue and Restructuring Scheme up to €1 million will be available at and the Executive needs to prove
available through Enterprise Ireland terms of up to seven years. itself and show that it can deliver
for the wider economy.”
Accountancy Ireland | April 2020NEWS 11
It pays to pay
women the same
C
losing the gender pay gap
across the OECD could
boost female earnings by
over 21%, which translates to
over US$2 trillion, according
to PwC’s latest Women in Work
Index, which analyses female
economic empowerment across
33 OECD countries. Furthermore,
if the female employment rate
across the OECD matched that
of Sweden, OECD GDP could be
boosted by over US$6 trillion
according to this latest index.
Pictured (from left) are: William McCulla, Invest NI; Judith Hartley, British Business Bank; Richard Gillan, The Women in Work Index
Chair, Chartered Accountants Ireland Ulster Society; and Shane O’Hanlon, InterTradeIreland. is a weighted average of five
indicators that reflect female
Helping SMEs fund
participation in the labour
market and equality in the
workplace: the gender pay gap,
future growth
female labour force participation,
the gap between male and
female labour force participation,
female unemployment and the
A
n event examining the funding landscape for local small- and medium-sized female full-time employment
enterprises (SMEs) took place in Belfast recently. rate.
The ‘Access to Finance’ event, organised by Chartered Accountants Ireland This year’s index has Iceland
Ulster Society in partnership with Invest Northern Ireland, InterTradeIreland and and Sweden retaining their
top two positions for the fifth
British Business Bank, brought Northern Ireland business leaders and advisers
year in a row, with Slovenia in
together to discuss the range of funding options available.
third place. Although the UK
Richard Gillan, Chair of Chartered Accountants Ireland Ulster Society said: “It’s performed above the OECD
important that businesses and their advisers are not only familiar with the more average and is second only to
traditional finance options on offer, but also with the alternative funding solutions Canada when compared to other
available to growing businesses. G7 economies, its position has
“Alternative sources of finance, offered across both debt and equity markets, are barely budged since 2000 when
now more prevalent in the funding landscape and have a key role to play in allowing it stood at 17th position, despite
businesses to effectively execute their growth strategy.” improving its performance
across all five indicators.
Ireland recorded the biggest
decline (along with Estonia) in
Irish companies eye international expansion the PwC Women in Work Index
rankings this year, falling by four
and new service lines despite challenges positions. Analysis attributes
this largely to a widening of the
F
inding, hiring and retaining top talent remains the most significant challenge gender pay gap.
facing Irish businesses, according to a survey of the 2020 Deloitte Best Managed
Companies network. Representatives from almost 100 companies provided
their views on the key advantages and challenges facing them in 2020 and on their
Closing the gender
ambitions for growth in the years to come. pay gap across the
Talent acquisition was noted by 57% as their organisations’ biggest challenge, OECD could boost
21%
remaining the top challenge when compared to the 2019 results. Geopolitical female earnings
uncertainty (44%, up from 37% last year) and the development of new products and
by over
services (22%) were the next-highest-rated challenges.
Asked to rate the three most significant factors that give a key advantage in their
marketplace, the companies identified excellent customer relationships (54%), unique
products/services (46%) and their commitment to continuous improvement (43%) as which translates to over
the highest contributors. A good business strategy also rated highly at 32%. Notably,
‘lower cost than our competitors’ was the lowest-rated factor at 2%. US$2 trillion
www.accountancyireland.ie12 NEWS
Pictured (from left) are Sonya Boyce, Director of HR Consulting in Mazars; Fergal Brosnan, Head of Strategy
Development at Bank of Ireland; and Helen Downes, CEO at Shannon Chamber.
Credit Review
Office rebrand
Gender pay gap
takes effect reporting is fast approaching
W
The Credit Review Office has ith the Gender Pay Gap Information Bill, 2019 currently in the process of
rebranded to be known as ‘Credit being enacted, companies need to pay more attention to the pay gaps that
Review’. First established in 2010 exist between men and women in their organisations. This was the stark
by the Minister for Finance, message that Sonya Boyce, Director of HR Consulting in Mazars, gave to a gathering
Credit Review’s role is to ensure of Shannon Chamber member companies at a recent seminar in Shannon.
the flow of credit to viable small- Given that Ireland witnessed a 2% increase in its gender pay gap from 12% to 14%
and medium-sized enterprises between 2014 and 2017; that this figure is above the European average of 16% and will
(SMEs) and farming businesses. continue to grow without legislative intervention; that only 19% of chief executive
Credit Review provides an positions in Ireland are held by women; and that women represent only 13% of
independent and affordable boards of management for Irish listed companies, the issue that companies need to
appeals process for SME and be concerned about is ‘when’, not ‘will’, mandatory pay gap reporting come into effect
farm businesses who have either in Ireland.
been refused credit or have By year three of its initiation, reporting will be mandatory for companies of all
had existing facilities up to a sizes in Ireland with larger companies required to report in the initial two years.
value of €3 million reduced or “Now is the time to start preparing,” added Sonya.
withdrawn.
Credit Review appeals are
successful in 90% of the cases it
supports, with the majority of IFAC outlines five factors for high-quality audit
A
cases handled for a fee of €100. s audit reviews unfold in consistent high quality,” said IFAC CEO,
Larger value cases are charged various national jurisdictions, Kevin Dancey. “This, however, cannot be
more, up to a maximum of €250. the International Federation achieved in a vacuum – all participants
of Accountants (IFAC) has set out in the audit and assurance ecosystem
its recommendations for achieving must work together in striving to achieve
Credit Review high-quality audits. Its five essential high-quality audits 100% of the time. It
appeals are factors are: the right process, the right is a vital part of our profession’s public
successful in
90%
people, the right governance, the right interest mandate.”
regulation, and the right measurement. He continued: “We call on regulators
“Audits contribute meaningfully and PAOs (professional accountancy
to the functioning of organisations, organisations) to collect, analyse, and
financial markets, and economies. publish more and better data – both
of the cases it While many thousands of audits are aggregate and granular – on audit quality,
supports conducted each year without any issues, with the goal of enhancing transparency
improvements are needed to ensure and promoting higher audit quality.”
Accountancy Ireland | April 2020Rory Finegan, Founder,
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News from your Institute
Akriti Gupta reviews the Institute’s recent
policy and representations activity.
Pictured (from left) are: Conall O’Halloran, President at Chartered Accountants
Ireland; Minister Diane Dodds, Northern Ireland Economy Minister; and Dr Brian
Keegan, Director, Advocacy and Voice at Chartered Accountants Ireland.
Minister Dodds addresses members
at Institute event in New York
N
orthern Ireland’s Minister her commitment to delivering
for the Department of the business growth and increased
Economy, Diane Dodds, investment into Northern Ireland.
addressed members at an Institute Echoing the Minister’s sentiments,
event in New York. Conall O’Halloran, President of
Speaking at the event, the Minister Chartered Accountants Ireland,
said she recognised the key role of reiterated the Institute’s commitment
members of Chartered Accountants to the all-island economy and
Ireland in attracting investment to noted the particular value of the
Northern Ireland, and its strong and accountancy skillset in contributing
influential network. She also reiterated to business development.
Brexit: what does it mean
for our members? Minister Paschal Donohoe T.D.
The Institute published a special episode addresses members in Q&A session
M
of the Accountancy Ireland podcast,
inister for Finance and Public
where Aidan Lambe, Akriti Gupta,
Expenditure and Reform,
Ronan O’Loughlin and Zara Duffy spoke
Paschal Donohoe T.D.,
about what Brexit and the ongoing
addressed Institute members and guests
transition period means for members
in March.
of Chartered Accountants Ireland. The
His address, titled The Irish Economy
panel also discussed the future of
at a Crossroads: Risks and Opportunities
audit and what the Institute can do for
Ahead, covered the potential global
its members. Meanwhile, Chartered
economic slowdown from COVID-19, the
Accountants Ireland published a series Pictured (from left) are: Barry Dempsey,
CEO at Chartered Accountants Ireland; outgoing Government’s fiscal policy, the
of explainers on the Brexit timeline and Conall O’Halloran, President at Chartered requirement for an exchequer surplus,
the negotiation mandates. Accountants Ireland; and Paschal Donohoe
T.D., Minister for Finance and Public and the ongoing negotiations to form a
Expenditure and Reform. new government.
Accountancy Ireland | April 2020NEWS 15
Responding to consultations
The Institute has provided responses to a
number of consultations recently.
Under the auspices of CCAB-I, the Institute
responded to the OECD Secretariat
Unified Approach Proposal under Pillar
One to taxing the digital economy; the
OECD Secretariat GloBE Proposal under
Pillar Two to taxing the digital economy;
and Revenue’s real-time Dividend
Withholding Tax (DWT) proposal.
We also responded to the Department
of Communications, Climate Action and
Environment consultation on a “proposed
increase to environmental levies”.
London Society rises to the
challenge of climate change Institute signs MOU with HMRC
The Institute has agreed a memorandum
T
he Institute in conjunction with the London Society hosted a panel event of understanding (MOU) with HMRC,
for members living and working in London at the Embassy of Ireland which is now being used to shape future
in London. Moderated by Dr Brian Keegan, the theme of the event was reporting by HMRC to Professional
Standards of instances of potential
‘sustainable finance – the cornerstone to better business’, and the event saw
misconduct by our members.
excellent engagement and discussion. London Society Chair, Peter Keenan-
The MOU contains a number of
Gavaghan, said: “Sustainable finance is an area where our profession has to be safeguards that mirror those available
ready to take the lead.” to our members in instances where the
The panel for the evening was Richard Spencer, Head of Sustainability at ICAEW; Hannah Armitage,
Project Manager at the Financial Reporting Council; Elaine Deehan, Country Manager of Ireland Revenue Commissioners wish to make a
at Starling Bank International; and Patrycja Jurkowska, Chartered Accountants Ireland Young report to Professional Standards.
Chartered Star 2019. Also, in attendance were Economic Counsellor, Páraig Hennessy, and his
colleagues from the Department of Foreign Affairs and Trade.
CCAB-I identified as fifth
Chartered Accountants most active lobbying group in
Institute signs Ireland
Ireland inaugurates new The second statutory review of the
call to action on Vancouver Chapter Regulation of Lobbying Act 2015
climate change identified the Consultative Committee of
Chartered Accountants Accounting Bodies Ireland (CCAB-I) as one
Ireland recently became of the top five organisations in Ireland
one of 14 accounting bodies with the greatest amount of lobbying
to sign a call to action on activity.
climate change. The call This was from a total of more than
40,000 returns, which had been submitted
was issued by Accounting
as at 21 January 2020 from over 1,900
T
for Sustainability (A4S),
he Institute inaugurated the persons and organisations listed on the
a project promoting Register.
sustainability in business. new Vancouver Chapter on 24
The accountancy February 2020, by hosting an
evening member networking event in
profession plays a vital UK Budget 2020 – top
KPMG’s offices in Vancouver, Canada.
role in achieving climate takeaways
change mitigation and Director for Advocacy and Voice, Dr
The Institute published its analysis of
adaptation. The CEOs of Brian Keegan, updated the group on
the newly appointed Chancellor of the
the signatory accounting the current Brexit position and the
Exchequer, Rishi Sunak’s first Budget and
bodies are committing to opportunities and challenges that
the first UK Budget in over 16 months. It
support accountants in come with it. Irish Consul General to
came just weeks after the UK’s departure
taking urgent action by Vancouver, Frank Flood, addressed the
from the EU and amidst the COVID-19
providing the training gathering and highlighted the Institute’s
outbreak, with many seeing the Budget
and infrastructure that strategic position as a key business
as an opportunity to vaccinate the UK
accountants need, as well as entity and financial services expert in
economy.
by supporting market-based the business community in Canada.
The analysis touched on points such
initiatives and providing The evening was a great success as VAT-postponed accounting, pensions,
the evidence base needed to and saw many local members coming personal tax, and business tax measures.
take action. together for an evening of networking
and discussion.
www.accountancyireland.ie16
Professor Patricia Barker and
Past-President Shauna Greely
Lena Hennessy and Professor Niamh Brennan
International
Women’s Day
2020
80 Chartered Accountants and guests
gathered in Chartered Accountants
House, Dublin for the first International
Women’s Day lunch on 9 March 2020.
Derek Reilly
Shauna Greely and Professor Patricia Barker Barry Dempsey speaks to guests Paula Houlihan
We are... Innovative
Ambitious
Brave Dynamic
Talented
Accountancy Ireland | April 2020GALLERY 17
Chartered Accountants Ireland
Deputy President, Paul Henry Cody Jackson and Roberta Flynn Aisling Molloy and Orla McGahan
Caroline McGroary Anna Maria O’Shea Amy Ball
Lena Hennessey and other guests
Michelle Maxwell and Amy Ball Barry Dempsey and Paula Nyland engage in a networking exercise
Dearbhla Brennan, Cody Jackson and Sarah Lane Professor Patricia Barker Michelle Maxwell
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Solutions In SoftwareCOMMENT 19
Thanks for the memories?
Some of the commercial habits that are already being
formed could serve us well once the COVID-19
crisis is over, writes Dr Brian Keegan.
and economic impact was far less online training. This could be down
pronounced than that of the current to a desire to fill empty hours, or
scourge, but I’m not sure the reason more positively, it could be down to a
is as straightforward as that. It may broader recognition that additional
instead be because they left no lasting skills and tools are needed for future
behavioural changes in most of the survival.
businesses and societies they affected. Behaviour is the hardest
Societies that did remember how thing to change. The reluctance
bad things could get were better to lend or borrow, an antipathy
prepared for COVID-19. Singapore is towards speculative development,
not the most open of jurisdictions, overcautious economic policy and
but they read the warning signs early. even the rise of the gig economy can
Also the isolation wards built there to be traced back to the downturn a
tackle SARS in the early years of the decade ago. The legacy of the 2007/08
century were still available to hold recession sometimes lingers less on
B
y now, all businesses and patients ill with COVID-19, and that balance sheets than it does in the
institutions have taken some in turn allowed the authorities to be collective memory.
preventative and containment more prescriptive about quarantining The businesses that bounce back
measures against COVID-19 for their and testing. the fastest could well be those who
staff, but the early adopters of social No business, nor even a country, are the early adopters of the new
distancing won headlines and even can (or even should) sustain the kind business behaviours prompted by
kudos for so doing. They were the of “ just in case” procedures, buffers the crisis. Just like the last recession,
first to tell personnel to work from and Singaporean-style infrastructure COVID-19 is now creating memories
home, to block staff from hosting or to guard against once-in-a-century of its own. We will need to hang on to
attending large meetings or any type pandemics. This, however, is a crisis the positive ones.
of gathering, and to have placed an for all of us, and we should not waste
embargo on international travel. an opportunity to take some insight
Those early adopters had much from it.
in common. Typically they were Some of the commercial habits that
large, multinational, and flourished are already being formed could serve Behaviour is the
in the online sales and services us well once this crisis is over. Because
environment. By contrast, the the situation is changing daily, I
hardest thing to
indigenous SME sector often operates am hesitant to be too prescriptive change. The reluctance
within a market segment where and not all these behaviours will to lend or borrow, an
having people work from home is sustain or improve the bottom line. antipathy towards
not practicable. The sector is now Nevertheless, there is already evidence speculative development,
suffering the most from the collapse that businesses are accommodating, overcautious economic
in demand caused by the pandemic. and staff are delivering through, more
We have seen epidemics before, flexible working practices. This is not
policy and even the rise
but how well did we remember the just about working from home where of the gig economy can
lessons of Zika virus a few years on? that is possible, but about varied be traced back to the
Or SARS? Or swine flu? How much working hours, role definition and downturn a decade ago.
better are we at defending ourselves? service delivery methods.
At the time, these were serious crises, In days when demand is in decline
but they seem to have faded from the almost everywhere, the Institute Dr Brian Keegan is Director,
collective memory very quickly. That sees an upswing in demand from Advocacy & Voice, at Chartered
Accountants Ireland.
may be simply because their social members for resource materials and
www.accountancyireland.ie20
Read more, faster you a duty – you owe the paper no duty.
Similarly, just because you have
started to read a book does not mean you
Cormac Lucey helps you turbo-charge are duty-bound to complete it. Our time
and attention are limited. If a book is
your ability to identify and absorb relevant boring, tedious or just getting you down,
discard it and choose another. That book
information in three easy steps. may deserve the dismissive review:
“Once I put it down, I couldn’t pick it up!”
have three key rules for managing the
information flow I face. Rule 3: Discriminate among
preferred providers
Rule 1: Learn to speed read I follow several financial websites
and put it into practice closely:
The average best-seller we might take
with us on holidays has about 400 • RTE.ie – click on “Business”, “Broker
words on each page. It is said that Reports” and “Goodbody” and you will
President John F. Kennedy could read be directed to a comprehensive review
2,000 words per minute, equivalent to of the previous day’s business and
five pages per minute. I find that hard to economic news refracted through the
believe. But with a disciplined approach, prism of its implications for corporate
it should be possible to read at speeds of value.
500-600 words per minute regularly. • Google “McKinsey on finance” and
What are the core elements of speed- you will be directed to the website
reading? Here is a speed speed-reading of the management consultants’
A
close friend of mine is a retired course: quarterly report on corporate finance
journalist. We were in school themes. Each quarter, five or six issues
together for several years in a) Develop the good habit of reading in are considered in a succinct and
the 1970s. He went into journalism; I a smooth rhythm; abandon the bad intellectually well-founded manner
went into accountancy. In sixth year, habit of disrupting that rhythm by with a focus on drawing actionable
our school won the Leinster Senior occasionally going back to reread a conclusions.
Schools cup in rugby for the first time passage; • Google “Damodaran online”, and
in decades. My pal kept a copy of the b) Instead of visually absorbing single you will land at the website of
following day’s Irish Independent, words, get into the habit of absorbing Aswath Damodaran, Professor of
complete with match coverage. It several (three to five) words with Finance at the Stern School of New
disappeared under the mountain of each glance; York University. This site features
detritus we are all at risk of gathering. c) Measure your reading speed when models, including lots of detailed
Then it re-emerged after both parents you’re reading a book and focus on valuation models; data, including
had died, and the family home was getting that speed up; and important sectoral cost of capital
put up for sale. What struck Peter, d) Practice reading some trashy data; and Damodaran’s blog, where
in the early part of this century, was material at an incredibly fast he analytically considers important
just how thin that 1978 edition of the pace. Then, when you read regular current financial topics.
Independent was compared to the bulky content, you’ll find yourself
newspapers we have today. Ironically, chomping at the bit speed-wise, Separating the
our newspapers are bigger and better just like when you come off the
than ever before, even as they face motorway and chomp at the bit at
informational
going down under the online onslaught. the outrageously slow speed limits wheat from
In 1978, nobody was at real risk of then imposed. the chaff is critically
information overload. If anything, we important today, as each
suffered from information poverty Rule 2: Focus of us could be submerged
back then. Today, however, we are When you read something, you are
forced to deal with an abundance reading it for a purpose. Be deliberate
in the flow of information
of information. Separating the about that purpose. If I’m reading a pouring our way.
informational wheat from the chaff is newspaper, I want useful information
critically important today, as each of and I want entertainment. I also want
us could be submerged in the flow of to limit the amount of time I devote to Cormac Lucey FCA is an
information pouring our way. I read reading the paper. I am certainly not economic commentator and lecturer
at Chartered Accountants Ireland.
a lot – both online and in print – and going to read all of it. The paper owes
Accountancy Ireland | April 2020COMMENT 21
Uncertainty reigns
Economic forecasting can be a difficult business,
especially when you consider the ‘unknown uncertainties’
the world is currently facing, writes Annette Hughes.
Global economy restrictions, and reduced mobility
In early March, the OECD reported (affecting consumer spending and
on the considerable human suffering workers staying at home). There have
and major economic disruption that already been reports of delays in the
had resulted from COVID-19. OECD delivery of imported products in the
global growth in 2020 was revised construction sector, according to the
downwards, by around 0.5 percentage Ulster Bank Construction Confidence
points to 2.4%, from an already weak Index. It has been acknowledged that
forecast of 2.9%. The adverse impacts Ireland will likely follow a pattern
on confidence, financial markets, the seen in other European countries and
travel sector and disruptions to supply the Taoiseach’s measures to minimise
chains were all factors contributing the spread of COVID-19 could be
to the downward revision. However, significant, but much less than the
without knowledge of the full impact economic and social consequences of
of the virus, the OECD acknowledged acting too late.
B
usinesses do not like uncertainty that, should the outbreak be more The flexibility that Irish businesses
but, at present, that is the intense and last longer than predicted, have demonstrated in dealing with
prevailing economic theme. An global growth could drop to 1.5%. evolving economic, political and social
uncertain political situation, ongoing Economists at Oxford Economics trends are acknowledged in EY’s
Brexit negotiations and the recent believe that the virus will result in Q1 February 2020 Economic Eye. EY Chief
coronavirus outbreak remind us how 2020 being the first global contraction Economist, Neil Gibson, correctly
vulnerable the economy can be to since Q1 2009, with overall growth of pointed to the coronavirus outbreak
external shocks. 2% for the year, the slowest pace in as likely to damage global growth
Those in the business of economic the last decade. in 2020, but as a rapidly evolving
forecasting understand this situation, it is difficult to predict the
vulnerability very well. The purpose Irish economy full economic impact on the island of
of an economic forecast is to measure The OECD forecast for economic Ireland. The closure of many public
the impact of ‘known uncertainties’ growth in the euro area was revised institutions and private businesses in
on future economic performance, but downwards by 0.3 percentage points the Republic of Ireland will no doubt
the future is unpredictable and this is to 0.8% in 2020, although, given further slow growth across the island,
further complicated by the ‘unknown that the spread to Europe did not but the sectoral and regional impact
uncertainties’ we now face. materialise until February, this will vary greatly. It important to
Economists, in making their forecast is likely to be subject to remember, however, that this is first
projections for economic growth in further downside risks. and foremost a human crisis, and we
2020, would not have been aware Ireland has an open economy must think about people first. Moving
of the coronavirus outbreak until reliant on international trade and away from GDP numbers, we must
the first reports of a cluster of cases global markets to support economic look at what business, governments
were identified on 31 December 2019 growth. Ireland and its economy and individuals can do together to
in Wuhan, China. The rapid and accounts for just 0.4% of global GDP help get us get through this incredibly
continuing escalation of COVID-19 has and 0.06% of the world’s population. difficult period.
led economists to revise their economic However, it still remains vulnerable to Clearly, these are unprecedented
forecasts downwards, as the initial the impact of the COVID-19 virus. times and taking such developments
output contractions in China begin to Economic growth in Ireland will into account makes economic
be felt around the world. It remains definitely be weaker than projected forecasting a difficult business.
unclear what the full effects will be on should the virus spread for an
the movement of people and goods, and extended period. The main impacts
Annette Hughes is a Director at
economic activity, while the response of are likely to be felt through supply EY-DKM Economic Advisory.
policymakers is evolving on a daily basis. chain disruptions, travel and tourism
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Visit us at www.bloomsburyprofessional.com/ieCOMMENT 23
The hazard Chinese walls
Experience suggests that most
professional indemnity claims for
of professional
negligence arise through allegations
of omission. In other words, some
aspect was overlooked or understated
advice
by the adviser and should have
been appropriately addressed.
This, of course, enters into the grey
area of opinion of which there
is little legal definition beyond a
With advice comes responsibility simplistic analysis as to what your
as almost all advice has consequences, peer group would have done in the
circumstances.
writes Des Peelo. In the ordinary course of events,
a Chartered Accountant is unlikely
I have acted as an expert witness in to face a conflict of interest in giving
many such cases. Common factors advice – although a wary eye is
in these claims included allegations necessary for Ireland’s relatively
that the client subsequently raised small business network. Others
an issue that was not within the may, however, experience conflicts
original remit, or did not take the of interest in a different way, as
advice, or varied its implementation explained by a straight-faced story
to suit a different purpose. from the rarefied world of high art
It may not always be possible in dealings.
everyday commercial situations, but In a frank memoir, a retired
it is invariably wise to have a clear director of a major auction house in
letter of engagement (LOE) signed London explained ‘Chinese walls’ as
as accepted by the client in advance follows: on one side of the auction
of undertaking the work. The real house, the potential seller of a
relevance is that the LOE can avoid painting is reassured as to this being
any later claim of misunderstanding the best time to sell a painting. On
A
s a Chartered Accountant, or ambiguity. The LOE can also state the other side, in the same auction
whether in professional in advance what is to be excluded in house, the potential purchaser
or commercial life, our the advice, as explained below. is reassured as to the wisdom of
qualification is relied on by others for investing to future advantage in the
knowledge and experience when we Create clarity same painting.
provide advice. In my experience, it is increasingly
Advice brings responsibility, as necessary to ensure that the Be brave
almost all advice has consequences. recipient understands what the Good advice is always worth it, but
A course of action undertaken, an advice is not, as well as what it is. For the advice might be unexpected.
investment made, a decision taken, a example, that it is not legal advice, A senior politician, for example,
matter rectified, a risk addressed, and that it is not tax advice as may arise, battered by the vagaries of the world,
so on. The accountant can sometimes or that the advice cannot be taken remarked to me that if you are ‘being
be unaware that somebody has as reassurance to a third party an eejit’, the best advice sometimes
interpreted a comment or course of (such as a bank or fellow investors) comes when the adviser tells you so
action as advice. Even responding as to the standing or validity of the in plain terms.
to a casual enquiry can be an circumstances relating to the advice. And how much should one charge
everyday hazard in a complicated and The advice is for the recipient alone, for all this great advice? A wise PR
regulatory world. and there is no responsibility to lady, not entirely tongue-in-cheek,
third parties. once told me that advice should
Letter of engagement The subsequent written advice always be reassuringly expensive.
I, in common with other professional to the client may then state: “This
advisers, have experienced clients advice is provided in accordance
Des Peelo FCA is the author of
or circumstances where it is later with the signed letter of engagement The Valuation of Businesses and
claimed that advice was wrong (LOE), dated 1 April 2020. For good Shares, which is published by
or inadequate. Thankfully, none order, a copy of the LOE is attached Chartered Accountants Ireland and
now in its second edition.
developed into legal claims – though to this letter”.
www.accountancyireland.ie24 COMMENT
The benefits
for diversity statistics and initiatives.
It is not acceptable, nor prudent, to
arrive at a beauty parade with an all-
of balance
male team to discuss a proposal with
what is usually a diverse team on the
other side. And it is not only in pitch
situations. Clients – and in particular,
international or global ones – now
It is important, and indeed useful, to frequently include requirements around
remind ourselves about the business case diversity in their terms of engagement.
Some conduct diversity audits and
for gender balance, writes Rachel Hussey. evaluate the composition of teams and
the numbers of hours worked by both
of Ireland has called out the specific men and women. We ultimately need to
need for diversity across senior decision- focus within professional services on
making levels based on evidence of representing the increasingly diverse
increased standards in governance client base that we serve.
practices and a more balanced risk Diversity is also important from a
appetite. reputational perspective. The media
In many industries, a large part of – and the trade press as well – have
the challenge around achieving gender a keen focus on gender balance and
balance is the small number of women new partner announcements can be
who enrol for or graduate from the the subject of criticism and comment
degrees relevant to the industry in if there is a lack of gender balance,
question. For example, engineering particularly on social media.
companies find it more difficult to Firms that make progress in this
recruit women because of the small area, and are seen to do so, will have a
percentage of women who study real competitive advantage in what is an
engineering in college, which in turn asymmetric market. Research carried
is as a result of not enough girls taking out by the 30% Club shows equally
A
lot of the recent discussion STEM subjects in school. Furthermore, high career ambitions across men and
around gender balance and in law, over 60% of graduates are women. However, the same study also
its importance in business women, and in 2018 there were more indicates less confidence among women
presupposes that everyone believes that women on the roll of solicitors than regarding their potential to progress.
working towards and achieving gender there were men for the first time. And This is perhaps a topic for another
balance is a good thing and that we all this trend has continued. Data published article, where we might also talk about
know why this matters. annually by the UK’s Financial the practices a modern professional
A large body of research Reporting Council also indicates that services workplace needs to attract
demonstrates that diversity is good the numbers of men and women opting and retain talent – all of which will be
for business. Diversity leads to better for careers in accountancy are close to or tested as we work through the current
decision-making, enhances the at parity in recent years. challenges posed by coronavirus.
attraction and retention of talent and, In contrast, the overall profile of the
most importantly, improves the bottom profession is closer to one-third women I was very pleased to be invited to write
line. For example, McKinsey’s recent and two-thirds men. Anecdotal evidence articles in this publication on gender
report entitled Delivering Through suggests that the position is somewhat balance in business. Since my first
Diversity shows that companies in better in Ireland. However, a gender article the world has experienced, and
the top quartile for gender diversity imbalance remains, particularly at more continues to experience, unprecedented
change and uncertainty and that
within executive boards were 21% more senior levels. This makes the retention looks likely to continue for some time.
likely to outperform on profitability. of women in the professions a key Businesses will have very different
Investors are increasingly focused on business opportunity if employers are priorities in the period ahead and I am
gender diversity, and Goldman Sachs in to harness the full value of the available writing on the basis that we will return
February announced that it would only talent. to (perhaps a different) normal and
that we can resume the discussion on
underwrite IPOs in the US and Europe A key lever in professional services issues around sustainability (including
of private companies that have at least firms is client demand. Clients are very diversity) in that new normal.
one diverse board member. And starting focused on their diversity ambitions and
in 2021, it will raise this target to two they expect their service providers to
diverse candidates for each of its IPO be as well. Firms increasingly see tender Rachel Hussey is Chair of 30% Club
Ireland and a Partner at Arthur Cox.
clients. Closer to home, the Central Bank documents with questions and scoring
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