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IE.AB ACCOUNTING AND BUSINESS 05/2012

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PROFIT DOCTORS

SOCIAL MEDIA STRATEGIES

VALUING DIVERSITY

NEW INSIGHTS FROM ACCA

BIN THE CLUTTER CLARITY IN REPORTING

CLEAR VIEWS THINK CLOUD COMPUTING
DIRECTORS 101 COMPANY ESSENTIALS

AB_May_cover.indd 1

ACCOUNTING AND BUSINESS IRELAND 05/2012

HIGH-FLYING CFOS

HOW TO BE AN ONLINE SENSATION

REACH FOR RECOVERY

TOM MURRAY FCCA ON HIS YEAR IN OFFICE

CORPORATE PSYCHOLOGY COMPANIES ON THE COUCH
SALARY NEGOTIATIONS DOS AND DONTS
FUNDS INDUSTRY LOOKING TO GROWTH

24/04/2012 11:28

AIB_AB_Were already there_04_12.qxd:Layout 1

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Editors choice
In this issue of AB Ireland, the impending flotation 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 Irelands 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
Irelands 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 governments 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, donal.nugent@accaglobal.com

RECOVERY MAN
ACCA Ireland
president Tom
Murray FCCA
talks about a
career that has
taken him to the
fore in insolvency
practice
Page 12

AB_May_2012.indd 3

SOCIAL CFOs
CFO
With 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 CHANGES
The UK budget
and the
introduction of
the UK Finance
Bill 2012 brought
about changes of
interest to Irish
practitioners
Page 34

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

24/04/2012 11:49

AB IRELAND EDITION
CONTENTS MAY 2012
VOLUME 3 ISSUE 5
Ireland editor Donal Nugent
donal.nugent@accaglobal.com +353 (0)1 289 3305
Editor-in-chief Chris Quick
chris.quick@accaglobal.com +44 (0) 20 7059 5966
Design manager Jackie Dollar
jackie.dollar@accaglobal.com +44 (0) 20 7059 5620
Designers Robert Mills, Barry Sheehan
Production manager Ciaran Brougham
ciaran.brougham@accaglobal.com +353 (0) 1 289 3305
Advertising John Sheehan
john.sheehan@accaglobal.com +353 (0) 1 289 3305
Bryan Beasley
bryan.beasley@accaglobal.com +353 (0) 1 289 3305
London advertising James Fraser
jfraser@educate-direct.com +44(0)20 7902 1224
Head of publishing Adam Williams
adam.williams@accaglobal.com +44 (0) 20 7059 5601
Printing RV International
Pictures Corbis
ACCA
President Dean Westcott FCCA
Deputy president Barry Cooper FCCA
Vice-president Martin Turner FCCA
Chief executive Helen Brand OBE
ACCA Ireland
President Ronnie Patton FCCA
Deputy president Tom Murray FCCA
Vice-president Diarmuid ODonovan FCCA
Head - ACCA Ireland Liz Hughes
Tel +353 (0)1 498 8900
Fax +353 (0)1 496 3615
members@accaglobal.com
students@accaglobal.com
info@accaglobal.com
Accounting and Business is published by ACCA 10 times per year. All
views expressed within the title are those of the contributors.
The Council of ACCA and the publishers do not guarantee the accuracy
of statements by contributors or advertisers, or accept responsibility for
any statement that they may express in this publication. The publication
of an advertisement does not imply endorsement by ACCA of a product
or service.
Copyright ACCA 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
www.ifpmedia.com

Features
12 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

ACCA Ireland
9 Leeson Park
Dublin 6
tel: +353 (0)1 498 8900
www.accaglobal.com/ireland

AB_May_2012.indd 4

Audit period
July 2009 to
June 2010
138,255

19 Global economic conditions

survey A global assessing of
business sentiment undertaken by
ACCA

24/04/2012 10:58

Worldwide

There are six different versions of

Accounting and Business: China, Ireland,
International, Malaysia, Singapore and UK.
See them all at www.accaglobal.com/ab

Regulars
BRIEFING
06 News in pictures
A different view of recent headlines
08 News in graphics
We show a story as well as tell it using
innovative graphs

TECHNICAL

YOUR CAREER

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

30 Technically speaking Aidan Clifford

rounds up the changes accountants
need to be aware of

51 Website revamp showcases CPD

VIEWPOINT

32 NI notes Changes and updates

of relevance to Northern Ireland
practitioners

21 Landscape painting Dean Westcott

on divining the future

33 Tax diary Some important tax

deadlines ahead

22 Into uncharted waters Sean Kelly

on the new Personal Insolvency Bill

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

53 Diary
54 Dos and donts in salary
negotiations
57 The power of public speaking

Your sector
23 PRACTICE
25 The view from Padraig Irwin FCCA
24 The profit doctors Making effective
use of social media

44 CPD Weighing up your options

47 Cloud busting Getting up on cloud
computing
50 Accounting solutions Advice from
PwC experts

31 CORPORATE
27 The view from
Carmel M. Burke FCCA
28 Corporate psychology Your
company on the couch

CPD

Accounting and Business is a rich source of

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

AB_May_2012.indd 5

ACCA NEWS
59 Diversity in the finance function
60 Opportunity in the funds industry
62 Future of accountants
64 Election to Council
65 Council notes
66 News

24/04/2012 10:58

News in pictures

01

The MS Balmoral
arrives in Cobh,
Co. Cork, following the
path of the Titanic,
to mark the 100th
anniversary of the
sinking of the ship

02

A 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
Directions Niall Horan
on Australian TV raises
almost AUS$100,000 for
charity when auctioned
on eBay

AB_May_2012.indd 6

24/04/2012 10:58

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

05

The government
announces
the creation of Water
Ireland, under the
auspices of Bord Gis

06

Ireland is set to
play a central
role in the development
of Chinas first national
equine facility (see page
11)

07

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

AB_May_2012.indd 7

24/04/2012 10:58

News in graphics

THIS IS IRELAND CENSUS 2011 RESULTS

Figures from the 2011 census show that Irelands population has continued to
grow strongly since 2006, increasing by 348,404 to 4,588,252

MORE WOMEN THAN MEN

BORN ABROAD
Residents born outside Ireland,
at 766,770, account for 17% of
the population
Biggest nationality increases
since 2006 are:

2006 sex ratio

Romanians
(+110%)

Latvians
(+43%)

Lithuanians
(+40%)
Men 100

Polish
(+83%)

Indians
(+91%)

Women 100

A MULTI-LINGUAL COUNTRY

2011 sex ratio

Top 10 foreign languages spoken in Ireland

in 2011, by number of speakers

Polish
119,526

Men 98.1

French
56,430

Lithuanian
31,635

Women 100
German
27,342

Spanish
22,446

Russian
21,640

Romanian
20,625

Rise in number of divorced people

2002
35,059

2006
59,500

2011
87,770

Chinese
15,166

Arabic
11,834

Italian
10,344
Source: CSO

AB_May_2012.indd 8

24/04/2012 10:59

RANK 1 (4)
MACRO
ECONOMIC
RISK

RANK 2 (2)
CREDIT
RISK

MIND YOUR STEP

The 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.

RANK 4 (6)
CAPITAL
AVAILABILITY

RANK 7 ()

PROFITABILITY

27%

50%

POLITICAL
INTERFERENCE

DERIVATIVES

1%

56%

22%

1%

53%

25%

1%

53%

26%

0%

26%

1%

Professional staffing

Finance IT

21%

Ability to respond to change from within

19%

54%

Ability to respond to change from outside

10%

41%

RANK 6 (3)
REGULATION

RANK 8 (7) RANK 9 (12)

Organisational complexity

22%

LIQUIDITY

RANK 5 (1)

23%

22%

RANK 3 (5)

48%

1%

CORPORATE
GOVERNANCE

RANK 10 (8)

QUALITY OF RISK
MANAGEMENT

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 CFOs 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 KPMGs
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.

KEY:

High risk
Moderate risk
Little or no risk
Dont know

Relationship with other company groups

FEEL THE HEAT

Asian 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 worlds
most competitive, despite
concerns over ageing,
infrastructure and large
budget deficits.

AB_May_2012.indd 9

9
8

1 10

2
=4

7
=4

1: NEW YORK 2: LONDON 3: SINGAPORE =4: PARIS =4: HONG KONG

6: TOKYO 7: ZURICH 8: WASHINGTON 9: CHICAGO 10: BOSTON

24/04/2012 10:59

10

News round-up

BDO IRELAND EXPANDS

BDO 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 companys 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 BDOs partners
in Ireland to 33 and its total staff
number to over 320. Commenting
on the expansion, BDO Irelands
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 INCREASE

Irish 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 monthon-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

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 Chinas 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. Chinas trade with
India grew by 25% last year and with
Russia by 42%.

AB_May_2012.indd 10

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 RISES

The 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 NEEDED

The 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
Irelands required adjustments would
be one of the biggest among advanced
economies, it says the UKs requirement
is broadly the same.

50M FOR NEW MARKETS

The 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, highgrowth Irish companies often do not
grow to their potential, often because
of a lack of access to the right kind of
finance.

EIRCOM FIRST

Eircoms recent move into examinership

is the first of its kind in Europe and the

24/04/2012 10:59

11

biggest corporate insolvency, to date,

in Europe this year, and the experience
offers lessons for all telecoms investors
in Europe, according to ratings agency
Moodys. Describing the insolvency
of Eircom as a first for a dominant
telecoms player anywhere in Europe,
Moodys 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.

INSURANCE STANDARD A MUST

The 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.

500M EIRGRID PLAN

Energy 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 FUNDING

The 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. Thats 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 ON

A survey by the Irish League of

Credit Unions has offered a glimpse
of the hardships being endured by
householders across the country,

AB_May_2012.indd 11

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 CHINA

Ireland has won a central role in the

development of Chinas horse racing
industry with the announcement of
a 40m export deal as part of the
development of the countrys 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 DECLINE

Northern Irelands flagging private

sector suffered a further setback in

March as latest figures from Ulster

Banks 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 ANGLO

The Central Bank is reputed to have
agreed to buy the half-completed
headquarters of the former Anglo Irish
Bank on Dublins North Wall Quay for
approximately 8m. The concrete shell,
which is seen by some as an eyesore
and others as a symbol of Irelands
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 banks head office on Dame Street.

24/04/2012 10:59

12

AB_May_2012.indd 12

Interview

24/04/2012 10:59

13

REACH FOR RECOVERY

With 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

s 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.

Opportunity
Joining 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

AB_May_2012.indd 13

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,
didnt worry me. Although the number
of companies going into liquidation
was relatively small, there were still
companies that needed specialist
advice.

Growth
Nine 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 weve grown organically.
The vast majority of what we do is in
corporate recovery but weve 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 peoples 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 youre working with.
Positive outcomes are also much
greater than people generally realise,
he adds. Over the years, up to twothirds of the companies that have been
clients of Friel Stafford have not gone

24/04/2012 10:59

14

The CV
2012

President, ACCA Ireland

2008

Becomes a partner in Friel

Stafford.

2003

Joins Friel Stafford.

1997

Becomes a member of ACCA.

1990

First accountancy job with Howlin

ORourke & Co.

into liquidation. Its slightly skewed

in the current market, for obvious
reasons, but a significant proportion
dont 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.

AB_May_2012.indd 14

24/04/2012 10:59

15

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 didnt get the quality
of advice they needed and didnt know
the extent of their responsibilities.

Off shoots
As 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 dont know what theyre doing is a
false economy that can end up costing
creditors dearly.
The proposed changes to Irelands
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 dont think it is enough
to combat forum shopping. The 3m

AB_May_2012.indd 15

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.

Career
Originally 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 didnt 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
ORourke & 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
ORourke, that he commenced his
ACCA exams. Murrays 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

The basics:
FRIEL STAFFORD

2008

Tom Murray becomes partner in the

firm.

2000

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

1998

The firm establishes a free

confidential helpline for professionals
dealing with insolvency.

1994

Set up by managing partner Jim

Stafford as a niche corporate recovery
and insolvency boutique.

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 dont go
into liquidation because of this. The
great thing is, if you dont 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 thats where we accountants, as
business advisers, come in.

24/04/2012 10:59

16

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

acebook 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
companys management, including
Mark Zuckerberg, its wunderkind
founder and CEO.

But they didnt 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 difference
Yes, every dotcom needs a finance
chief. But, with their high reliance
on advanced technologies, youthful

THERE ARE PEOPLE WHO ARE INCREDIBLY

TALENTED IN LARGE COMPANIES WHO ARE
DISASTROUS IN SMALL COMPANIES. THOSE PEOPLE
DONT PERFORM WELL WITH FREQUENT CHANGE
Attention tends to focus on the
heads of internet and social media
enterprises. Facebooks genesis and
Zuckerbergs 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.

AB_May_2012.indd 16

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, its

worth taking a look at the background

of CFOs at some of the most highprofile 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 Zuckerbergs 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 its cost and when

24/04/2012 10:59

17

AB_May_2012.indd 17

24/04/2012 10:59

18
it will make a return. And almost
all would have had public company
experience, essential for an ambitious
internet company looking to go public.
Its important because the demands
on CFOs in internet-based companies
come in two parts. The early fastgrowth 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 dont need the
high-powered pure CFO, he says.

Keep it running
However, finance is high on his agenda.
Core to the finance experts brief is
ensuring there is enough money to
keep the business running as it grows
its user base and customers.
Youve 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-andmortar 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,

AB_May_2012.indd 18

*DOWN TO METRICS

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 accountants
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. Its a great space to work within and
being a member of ACCA really helps me in my role on a daily basis.

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
Its 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 dont 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
dont perform well with frequent
change or by doing stuff themselves
and being more resourceful, instead of
doing things by the book.
Gavin Hinks, journalist

24/04/2012 11:06

Taking the pulse

of the global economy

19

In his regular quarterly report, ACCAs Manos Schizas sees a newfound 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

*THE VIEW FROM IRELAND

The 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.

AB_May_2012.indd 19

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.

A NEW-FOUND DYNAMISM CAN

BE SEEN IN MANY DEVELOPING
AND TRANSITION ECONOMIES
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.
Its as though iPad sales were driving
the entire world economy. Im not even
sure they dont 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.

24/04/2012 10:59

20
THE ACCA/IMA GLOBAL ECONOMIC CONDITIONS SURVEY HOW TO TAKE PART
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

WHAT INFLUENCES CONFIDENCE?

TAKING THE GLOBAL TEMPERATURE

GLOBAL -3
AFRICA 8
MAINLAND CHINA 4
MIDDLE EAST 0
PAKISTAN 0
IRELAND -7
EASTERN EUROPE -15
UK -17
MALAYSIA -22
HONG KONG -28
SINGAPORE -41
Q4
2009

Q1
2010

Q2
2010

Q3
2010

-13

THE DANGER
DOWNPOINT
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.

Q4
Q1
2010 2011

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

Q2
2011

More significant
influence on confidence

Breaking down the ACCA Confidence Index

geographically reveals some striking variations, with
members in Africa still showing most confidence.

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

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).

Q3
2011

1 REVENUES FALLING
2 GLOBAL ECONOMY SEEN AS
MAKING PROGRESS
3 NEW ORDERS FALLING
4 VERY GOOD POLICIES
5 VALUE-ADDED BUSINESS
OPPORTUNITIES
6 AUSTERITY
7 SECTOR-SPECIFIC FACTORS
8 POOR POLICIES
9 ACCESS TO GROWTH CAPITAL
10 BUSINESS SIZE
11 UNSTABLE CUSTOMERS

Q4
Q1
2011The2012
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, weve used
statistics in order to tease out the effects of different
aspects of the business environment, both positive and
negative, on confidence.

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

Q4
2009

Q1
2010

Q2
2010

Q3
2010

Q4
Q1
2010 2011

Q2
2011

Q3
2011

Q4
2011

Q1
2012

THE ACCA CONFIDENCE INDEX

Business confidence remains in negative territory. The graphics show the percentage of
respondents saying they have gained business confidence, minus those who have lost it.

AB_May_2012.indd 20

24/04/2012 10:59

Comment

21

Landscape painting

Divining the business landscape of the

future is a tricky art, but ACCAs global forums
can help, says president Dean Westcott

Near the back of this edition you will find an article

from ACCAs 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 ACCAs 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

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 eroded
Secured 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

AB_May_2012.indd 22

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.

Consideration
The 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 sean.kelly@rsmfgs.ie

24/04/2012 10:59

Practice

23

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 Dont 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 clients 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.

AB_May_2012.indd 23

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.

24 The profit doctors

Effective use of Twitter and
Facebook
27 The view from Carmel
M Burke and corporate
psychology your
company on the couch

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.

24/04/2012 10:59

24

Practice

The profit doctors

Julia Payne and David Bowler of Incisive Edge explain
how to make effective use of Twitter and Facebook,
and harness social media in your digital marketing

Q: SHOULD WE BE USING SOCIAL MEDIA? A: YOUD BE MAD NOT TO

Q I run a mid-sized accounting firm
and am trying to expand my business.
Everyone seems to be talking about
social media, but Im reluctant as Ive
heard both good and bad things. My
main concern is that I dont 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 companys 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 companys name into

AB_May_2012.indd 24

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 engines 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 companys
online face, but to be seen it needs
visitors. Your goal is to drive traffic.

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.
Its 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
youre a celebrity, people may well be
interested in your innermost thoughts,
but if youre 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

24/04/2012 11:00

25
Q: AM I BEING A TWIT ON TWITTER?
A: TWEET AS A PERSON, NOT AS A BUSINESS
Q I cant seem to get the hang of Twitter. What am I doing wrong?

DAVID Congratulations on being

one step ahead of most of your
competitors. Even though everyones
talking about Twitter, not everyone is
tweeting or, if they are, theyre not
tweeting effectively. Yet its 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 youre
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 dont add significant value
to your audience and are usually too
company-focused.

retweet (forward your tweets on to

their audience), and recommend you.
JULIA Relevance is vital. Ensure you
tie your content back to whats 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

THE HOLY GRAIL OF SOCIAL MEDIA IS TO BECOME A

THOUGHT LEADER IN YOUR PARTICULAR INDUSTRY

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.

AB_May_2012.indd 25

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

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 dont know your Klout
score, you should.

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

24/04/2012 11:00

Have Gold
At The Core
of Your
Investments
and Savings

Find out how you

can safely own gold
with 10,000 and save
in gold for just 150 pm
Visit www.GoldCore.com
or call us on 01 632 5010

Gold is not regulated by the Central Bank of Ireland

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GoldCore_HaveGold_Account_Mag.indd 1
AB_May_2012.indd 26

16/02/2012 10:28:50
13/02/2012 22:40
24/04/2012 11:00

Corporate

27

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 breakers 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!

28 Corporate psychology
your company on the
couch
23 The view from
Padraig Irwin and The
profit doctors effective
use of Twitter and
Facebook

Q Tell us about Laztech

A 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.

/2012 10:28:50
13/02/2012 22:40
AB_May_2012.indd 27

24/04/2012 11:00

28

Corporate

Companies on the couch

Forget management consultants organisations faced with seemingly intractable people
problems are starting to turn to business psychologists instead

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 isnt
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
whats going on around her, then you
can probably call someone in whos an
expert in managing performance,
because you can see what the problem

AB_May_2012.indd 28

is and where it resides, says Steve

Whiddett, managing director of WHE
UK and chair of the UKs Association
of Business Psychologists.
However, if there are several people
who are displaying similar behaviour to
Sarah, and if she didnt show any of
those behaviours when she joined, it
would suggest something else is going
on. And if the management cant
confidently put their finger on what
that is, then a business psychologist
[BP] may be able to help, he adds.

Planning and problems

Typically, 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,
were usually there to focus on the
other side, where things arent 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 hes at
pains to point out what exactly BPs can
do and what they cant.
In effect, a good BP ought to be able
to see beyond the presenting issue and

24/04/2012 11:00

29

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 dont 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
youve 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
doesnt deliver on an objective can be

AB_May_2012.indd 29

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

issue is symptomatic, and until the

work has been done to find out what
the cause is, you cant go forward to
solve it.
As an example, Gibneys work at
NHS Merseyside is founded on an
imperative to change. They know what
they dont 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

BUSINESS PSYCHOLOGISTS APPLY SCIENTIFIC

RIGOUR AND DEDUCTIVE REASONING TO GO
BEYOND SIMPLY TREATING THE SYMPTOMS
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.
Were 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, its 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. Its not just about
what they do, but how they do it.

First research, then solution

BPs 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

to identify the behaviours we need, to

set a framework for our values. As part
of that, well 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 dont 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,
Whiddetts 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 havent
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 its
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

24/04/2012 11:00

30

Technical

Technically speaking
[

ACCAs Aidan Clifford rounds up some of the

changes Irish accountants should be aware of

IN THIS ARTICLE:

01 Engagement letters for

accounting practices need updating.
02 Irelands 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
Sochna.

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.

AB_May_2012.indd 30

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

I dont 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.

Aidan Clifford FCCA,

advisory services manager,
aidan.clifford@accaglobal.com

24/04/2012 11:49

31

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
auditors report on financial statements
(revised);
ISA (UK and Ireland) 705
Modifications to the opinion in the
independent auditors report; and,
ISA (UK and Ireland) 706 Emphasis
of matter paragraphs and other
matter paragraphs in the independent
auditors 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

AB_May_2012.indd 31

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/startups/SME

09 PENSIONS 2012

The 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.

24/04/2012 11:00

32

Technical

Northern Ireland notes

Finance bill
In 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

AB_May_2012.indd 32

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 service
HM 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 doesnt 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 HMRCs 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 advisory@uk.accaglobal.
com

Real time information

HMRCs 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 years
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 letters
You 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

24/04/2012 11:00

33

Tax diary
MAY 2012
General
1 Carbon taxes
Effective date for Budget 2012
increases in carbon tax on
home heating oil.
1 VAT
Due date for extension of VAT
reverse charge mechanism
to supplies of construction
services between connected
persons.
14 PAYE
P30 monthly return and
payment for April 2012. (ROS
extension to 23 May 2012).
14 PSWT
F30 monthly return and
payment for April 2012. (ROS
extension to 23 May 2012).
19 VAT
Bi-monthly VAT3 return and
payment for the period March/
April 2012 (ROS extension to
23 May 2012).

AB_May_2012.indd 33

19 VAT
4-monthly VAT3 return
and payment for the period
January-April 2012 (ROS
extension to 23 May 2012).
Companies
14 Dividend Withholding
Tax
Return and payment of DWT
for distributions in April 2012
21 Corporation Tax
Return and final payment for
accounting periods ended 31
August 2011. (ROS extension
to 23 May).
21 Corporation Tax
Preliminary tax for accounting
periods ending 30 June 2012.
(ROS extension to 23 May).
21 Corporation Tax
First 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 Information
Form 46G for accounting
periods ended 31 August
2011.

JUNE 2012
General
14 PAYE
P30 monthly return and
payment for May 2012. (ROS
extension to 23 June 2012).
14 PSWT
F30 monthly return and
payment for May 2012. (ROS
extension to 23 June 2012).
30 NPPR charge
Payment of 200 NPPR
charge (Irish residential
properties that are not
principal private residences)
for 2012.
Companies
14 Dividend Withholding
Tax
Return and payment of DWT
for distributions in May 2012.
21 Corporation Tax
Return and final payment for
accounting periods ended
30 September 2011. (ROS
extension to 23 June).

21 Corporation Tax
Preliminary tax for accounting
periods ending 31 July 2012.
(ROS extension to 23 June).
21 Corporation Tax
First 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 Information
Form 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.

24/04/2012 11:00

34

Technical

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 changes
The 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 Irelands
high earners restriction. For taxpayers
seeking to claim more than 50,000 of

AB_May_2012.indd 34

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 UKs 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 governments
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 antiavoidance rule in Finance Bill 2013.
Following the delivery of the Budget, the
UKs Finance Bill 2012, and the
accompanying explanatory, notes, were
also published. These documents are
available on HMRCs website.

02 NPPR charge due

If 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.

24/04/2012 11:50

35

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
Revenues website.

04 ROS pay and file

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
Revenues 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

AB_May_2012.indd 35

Revenue has confirmed an extension of

the return filing and tax payment date to
15 November 2012 for certain selfassessed 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.

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 nonactive 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 Revenues frequently
asked questions on the USC, which is
available on Revenues website.

06 Finance Bill signed into law

05 USC and capital allowances

Finance 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.

To 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

Cora OBrien is director of technical

services, Irish Taxation Institute. Email
cobrien@taxinstitute.ie

24/04/2012 11:00

36

Technical

Advising the advisers

Marc Westlake on why Irish financial 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 management
In 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 commissionbased 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 fiduciary
People 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

AB_May_2012.indd 36

24/04/2012 11:00

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 lets 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.

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 advisers
Accountants 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 todays 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 marc.westlake@goldcore.com

Conflict of interest
The bottom line is that commissionbased 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

AB_May_2012.indd 37

24/04/2012 11:00

38

Technical

Essential advice for directors

Conor 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
companys constitution
(memorandum and articles of
association) and to exercise powers
only for lawful purposes.
Not to use company property for

AB_May_2012.indd 38

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 companys
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.

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.
8.

Meetings and recording

The 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.

Insurance
The Companies Acts allow a company to
purchase and maintain directors and

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.

Breaches
There 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

AB_May_2012.indd 39

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 tips
If 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.
Dont put off difficult decisions.
Conor Sweeney is director of
OmniPro Corporate Consultants.
Email csweeney@omnipro.ie

24/04/2012 11:00

40

Technical
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Bin the clutter

Clutter in annual reports obscures relevant information and makes it harder for users to
identify the key points about a businesss performance, says Graham Holt
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 companys website.
Immaterial disclosures are unhelpful
and should not be provided.

*
*

AB_May_2012.indd 40

barriers to reducing clutter are

* The
mainly behavioural.
should be continued debate
* There
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
companys 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 shareholders
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 Authoritys
disclosure and transparency rules, the
SEC rules and Industry Guide 3 as well
as the requirements of Basel IIs 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

24/04/2012 11:00

TO GET THE QUESTIONS GO TO

www.accaglobal.com/clutter

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.

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

TIME AND COST PRESSURES CAN LEAD TO

DEFENSIVE REPORTING AND A PREFERENCE FOR
EASY OPTIONS, SUCH AS REPEATING MATERIAL
Behavioural barriers
There 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

AB_May_2012.indd 41

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

41

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
companys particular circumstances.
However, the whole point of such

24/04/2012 11:00

42

Technical

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

make this problem worse but, in a wellorganised 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

IN A WELL-ORGANISED REPORT, USERS WILL BE

ABLE TO BYPASS MUCH OF THE INFORMATION
THEY CONSIDER UNIMPORTANT
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 formed

It 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

AB_May_2012.indd 42

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.

CPD
units on
on the
the web
web
units

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

24/04/2012 11:00



Programme
Programme

Provider
Provider

Dates/No
of of
Days
Dates/No
Days

th
PRINCE
2 Conversion
to Practitioners
2nd 2- nd4th- 4May/
3 days
PRINCE
2 Conversion
to Practitioners Trigraph
Trigraph
May/
3 days
rd rd
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MoneyMoney
Market
FundsFunds
Quickstep
3 3
May/
1 day
Market
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th
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UCITSUCITS
Compliance
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4th 4May/
th
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PMP Exam
Preparation
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9th 9th11th 11May/
th
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th
May/
1 day
Accounting
for Derivatives
Quickstep
1 day
Accounting
for Derivatives
underunder
IFRSIFRS Quickstep
10th10May/
th15th May
IFRS
for
Investment
Funds
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IFRS for Investment Funds
Quickstep
15 May
th th th
& 17May/
May/
2 days
Derivatives
Growing
Importance
withinInstitute
Institute
of Bankers
- School
2 days
Derivatives
Growing
Importance
within
of Bankers
- School
of of16th16& 17
Financial
Markets
Professional
Finance
Financial
Markets
Professional
Finance
th
th
&th17May/
May/
2 days
Coaching
for Performance
Institute
of Bankers
- School
2 days
Coaching
for Performance
Institute
of Bankers
- School
of of16th16& 17
Professional
Finance
Professional Finance
nd
May/ 2 days
Governance in International Financial
Institute of Bankers - School of st21st & nd
2 days
Governance
in International Financial
Institute
of Bankers - School of 21 & 22 22May/
Services
Professional Finance
Services
Professional Finance
US GAAP for Investment Funds
Quickstep
23rd May/ 1 day
US GAAP for Investment Funds
Quickstep
23rd May/ 1 day
Accounting for Derivatives under US
Quickstep
24th May/ 1 day
Accounting
Quickstep
24th May/ 1 day
GAAP for Derivatives under US
GAAP
Practical Project Management
Trigraph
28th & 29th May/ 2 days
Practical Project Management
Trigraph
28th & 29th May/ 2 days

Non-Member
Non-Member Member
Member
Fee
Fee
Fee
Fee
850
850
563
563
494
494
850
850
494
494
600
600
600
600
1000
1000

600
600
450
450
395
395
600
600
395
395
480
480
480
480
700
700

1000
1000

700
700

1000
1000

700
700

600
600
600
600

480
480
480
480

636
636

450
450

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

The Summit Finuas Network is an enterprise-led network dedicated to
Full information on all courses and on the network is available at:
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Assets in green investment funds managed out of Ireland have more

doubled
in the past
two years
to reach
according
to recent
Assetsthan
in green
investment
funds
managed
out2.3bn,
of Ireland
have more
PwC research,
andtwo
there
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currently
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managers
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than doubled
in the past
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reach 2.3bn,
according
to recent
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whothere
are managing
more 24
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30 international
greenout
funds,
PwC research,
are currently
asset
managers based
from
water
to
wind
energy.
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
The talent base we have across all the different sectors in the IFSC
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can be fully geared towards meeting the future demands of the green
of the Green IFSC. Were trying to supplement the existing talent base
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with specic green nance and carbon management education.
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The Summit
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worked
closely with
both the Green
with specic
green nance
and carbon
management
education.
IFSC initiative and Dublin City University (DCU) to create Irelands
The Summit
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Network
worked
closely
with
both
the course
Green was
rst Postgraduate Certicate in Sustainable Finance. The
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and
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City
University
(DCU)
to
create
Irelands
launched in September 2011 and the rst participants will graduate
rst Postgraduate
Certicate in Sustainable Finance. The course was
later this year.
international nance experts, project managers, entrepreneurs, fund
launched in September 2011 and the rst participants will graduate
Over
20 people are taking part in this programme, from a range of managers and investment analysts. All are from companies exploring
later this
year.
DUBLINCITYUNIVERSITYBUSINESSSCHOOL
international
nance experts,
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As a result
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DUBLINCITYUNIVERSITYBUSINESSSCHOOL
The course
is highly
applied
all participants
are already experts
business
opportunities
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23/04/2012 09:32:11
24/04/2012 11:01

44

Technical
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Weighing up your options

This month Dr Tony Grundy demonstrates how to get the most out of strategic
thinking by creating and evaluating strategic options for the business
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 like

Few 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

The strategic option grid

Criteria

Option 1

Option 2

Option 3

Option 4

Strategic
attractiveness
Financial
attractiveness*
Implementation
difficulty
Uncertainty
and risk
Acceptability
(to stakeholders)
Attractiveness score: 3=high 2=medium 1=low
benefits less costs net cashflows relative to investment

These variables can be refined or

added to for example, brand and
pricing options could be included.
Lets 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 wouldnt need so much fuel.

I visited Virgin Galactics 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

*
*

24/04/2012 11:01

45

TO GET THE QUESTIONS GO TO

www.accaglobal.com/creation

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.

*
*

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

STRATEGIC OPTIONS THAT AMASS FEWER THAN

FIVE TICKS ALTOGETHER IN THE GRID SHOULDNT BE
TOUCHED WITH A BARGEPOLE
Strategic option grid
Once 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, Porters 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.

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

*
*

*
*
*

*
*

*
*
*

AB_May_2012.indd 45

evaluations look very sensitive

ask yourself whats the one big
thing youve 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 shouldnt 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 Porters 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

*
*

*
*

24/04/2012 11:01

46

CPD
CPD

Technical

may be no cunning plan at all,

* there
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

units
on
the
web
unitson
onthe
theweb
web
units

Make your product easier to buy

Just 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.

SIMPLY AVOIDING THE DESTRUCTION OR

DILUTION OF CUSTOMER VALUE CAN GENERATE
REAL COMPETITIVE ADVANTAGE
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 tricks

If 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 critical
Instead 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 dont always have to add value
Most 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.

AB_May_2012.indd 46

Make your product irresistible

Set yourself the mental goal of making
your proposition so compelling that it
becomes irresistible.
Study your competitors
Competitive analysis is not particularly
done well by many companies; some
dont 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 businesss competitive
advantage might be imitated, it would
be very difficult indeed to copy all the
elements of that advantage.

Change the rules of the game

The 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 yourself
Here 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 UK
www.tonygrundy.com

LAST MONTH
THE TOOLS OF THE TRADE:
SWOT, GAP, PEST AND
PORTERS FIVE FORCES

24/04/2012 11:01

47

Cloud busting
In the first in a series of articles on cloud
computing, Trevor Bingham considers the specific
advantages the technology offers accountants

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.

Options
Furthermore, 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

AB_May_2012.indd 47

many company accountants for the

associated low cost of functionality and
the speed of deploying new software.

Advantages
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:
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 providers data centre,
users will have maximum flexibility to
access the content from any office,
even from home, provided they have

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

24/04/2012 11:01

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.

Appeal
With 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.

Effeciencies
Up 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 onpremise 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 A
CLOUD- BASED SOLUTION, THIS NEED NO LONGER BE THE CASE

AB_May_2012.indd 48

24/04/2012 11:01

49

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
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.

Access
With 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.

Conclusion
In 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 trevor.bingham@
xperience-group.com

AB_May_2012.indd 49

24/04/2012 11:01

50

Technical

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

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 JVs share capital,
and Entity B contributes cash for 40%.
An independent valuation arrived
at a fair market value of 1,500 for
Entity As 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?
The initial cost of investment
in Entity Bs books is a
straightforward 1,000. But the
accounting in Entity As books
is more complex. As the brand was
developed internally, it is likely to have
little or no carrying value on Entity As
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

in the joint ventures 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.

At inception, Entity JV therefore

has net assets of 2,500.
Applying the equity accounting
method in its consolidated

PwCs 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

AB_May_2012.indd 50

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?
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
JVs 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 months solutions were compiled
by Imre Guba and Iain Selfridge of
PwCs Accounting Consulting Services

24/04/2012 11:01

51

Website revamp showcases CPD

Looking for skills development opportunities on the ACCA website has been made even
easier, as Ros Leah, ACCAs head of professional development, explains
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 undertaking tasks for the first time, consulting 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 immediately 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

AB_May_2012.indd 51

Learning opportunities have been brought together within each CPD subject heading
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.
ACCAs research has confirmed there
is no decrease in quality with technology-enhanced learning and assessment
compared with physical, classroom
and paper-based learning and assessment.
Interviewees for the research
included Richard Pollard, PwCs 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 dont want it three months ago
when I was at a training centre, and I
cant remember what I was learning.

I certainly dont want it in six months

time when Ive 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 considered 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

*
*
*

24/04/2012 11:01

Now its even easier to do business with us

Now its even easier to do business with us
Contact us by phone or email
24 hours a day
Contact us by phone or email
7 days a week
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ACCA
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www.accaglobal.com
+44 (0)141 582 2000 members@accaglobal.com
www.accaglobal.com

AB_May_2012.indd 52

24/04/2012 11:01

Diary

BELFAST

Practitioners Conference 2
12 May
09.30 16.30
Practitioners Network
Fitzpatrick Castle Hotel,
Killiney
Various Speakers
Seven CPD units

CORK

Executive Career Management

15 May
18.15 20.15
Leinster Members Network
Rowan Manahan,
Fortify Services
Clarion, Liffey Valley
Two CPD units

Practitioners Conference 2
9 June
09.30 16.30
Practitioners Network
Radisson Blu
Various Speakers
Seven CPD units

New FCCA Evening

30 May
18.00 20.00
ACCA Ireland
Various Speakers
Clarion, Lapps Quay
Two CPD units

DUBLIN

Technical Update
1 May
18.15 20.15
Leinster Members Network
Aidan Clifford, ACCA Ireland
Radisson Blu Royal,
Golden Lane
Two CPD units
Standard & Poors Briefing
2 May
18.00 20.00
Financial Services Network
Simon Collingridge,
Standard & Poors
Clarion, IFSC
Two CPD units
NAMA In Detail
3 May
09.30 16.30
Corporate Sector
Brian McEnery, BDO
Gibson Hotel
Seven CPD units

Business Breakfast
17 May
07.30 09.00
Business Leaders Forum
Neil OLeary, Ion Equity
Westbury Hotel, Dublin 2
Two CPD units
Growing your Business SME
Success Stories
31 May
18.15 20.15
Leinster Members Network
Various Speakers
Radisson Blu Royal,
Golden Lane
Two CPD units

GALWAY

Personal Bankruptcy
Strategies
9 May
18.00 20.00
Munster/Connaught
Members Network
Tom Murray, Friel Stafford
Menlo Park Hotel
Two CPD units
New FCCA Evening
16 May
18.00 20.00
ACCA Ireland
Various Speakers
Clayton Hotel
Two CPD units
Business Breakfast
23 May
07.30 09.00
Munster/Connaught
Members Network
Brian McEnery, BDO
Clayton Hotel
Two CPD units

LIMERICK

Tax Incentives for Back to

Work Schemes
16 May
18.00 20.00
Munster/Connaught
Members Network
Eamonn Murphy, Grant
Thornton
Clarion, Steamboat Quay
Two CPD units

53

Audit Workshop
23 May
09.15 16.15
Practitioners Network
Brendan Howard,
Mercia Ireland
Savoy Hotel
Seven CPD units

SLIGO

Ensuring Payroll Compliance

2 May
18.00 20.00
Munster Connaught Members
Network
Aisling Byrne,
Baker Tilly Ryan Glennon
The Glasshouse
Two CPD units
Trends in Technology
30 May
18.00 20.00
Munster/Connaught Members
Network
Damien Kealy,
LHM Casey McGrath
The Glasshouse
Two CPD units

WATERFORD

Revenue Update
24 May
18.00 20.00
Munster/Connaught
Members Network
Representative from
Revenue Office, Waterford
Tower Hotel
Two CPD units

Risk Management
10 May
09.30 16.30
Corporate Sector
Aidan Horan, IPA
Radisson Blu Royal,
Golden Lane
Seven CPD units

AB_May_2012.indd 53

24/04/2012 11:01

54

Careers

Negotiation
dos and
donts
Paul McClatchie
on how best to
approach those
delicate salary
negotiations
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.

*DO

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 arent currently
working and may, therefore, be a cheaper option.
Know what youve 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.

In
In

*DONT

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 youll 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 youre 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 youre 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 youre 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 youd 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 paul.mcclatchie@careers-register.com

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AB_May_2012.indd 54

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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

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Ltd. (Grant
Thornton
www.grantthornton.ie
OfficesThornton
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andInternational).
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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

GRANT
THORNTON
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1 Thornton International). Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered
20/03/2012
14:36:58
Thornton
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independently
by

the member firms.

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
AB_May_2012.indd
24/04/2012 11:02
the member 55
firms.

nt
y

ACCA Leinster MeMbers network

exeCutiVe CAreer MAnAgeMent

the permanent campaign the why
and how of career management
15 May 2012 18.15 20.15
Clarion Hotel, Liffey Valley, Dublin

Places: 35 members / 45 non-members

Speaker: Rowan Manahan, Fortify Services
For further details please contact Suzanne Acton on +353 (0)1 498 8918
or email suzanne.acton@accaglobal.com

ACCA the global body for professional accountants

www.accaglobal.com/ireland
AB_May_2012.indd 56

24/04/2012 11:02

Careers

57

LOOKING FOR A NEW JOB?

www.accacareers.com/international

Speaking of which
[

Raising your profile can boost your career and one way to do this is to seek opportunities to speak in
public but first you want to hone your presentation skills

When next deciding to do some

public speaking, make sure you dont
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 message
As you prepare your presentation
its 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 audience
Finding 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 structure
Have a pre-planned opening and a
pre-planned closing in addition to
the main body of your speech. Its 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 middle
In order to keep
their attention
throughout
your
presentation
it is important
to have a wellstructured main body.

AB_May_2012.indd 57

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.

6 Practice, practice, practice

Practising 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.

5 Bring your figures to life

A 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. Lets pick the figure of
250,000 if you know your audience
has an interest in rugby or theres just
been an International at the weekend,
why not say this is the equivalent of
filling Twickenham three times?

7 Slice and dice the PowerPoint

If you want to guarantee getting and
holding your audiences 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. Its not necessary to put
every single figure on every single slide.
8 The SOS (sound of silence) the
best tool your voice can use
When 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 face
Your default face is the face you have
when youre 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 early
How many presenters run over time?
Wouldnt it be nice to stand out from
the crowd for finishing on time or
even early?
Barbara Moynihan is past president of Toastmasters International and founder of On
Your Feet www.onyourfeet.ie

24/04/2012 11:02

Fighting Blindness 192x260.indd 1

AB_May_2012.indd 58

24/04/2012 09:49:42
24/04/2012 11:02

ACCA

59

John Teeling

DIVERSITY IN THE
FINANCE FUNCTION
Fresh thinking was to the fore as finance professions
gathered for a recent ACCA breakfast briefing 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 diversity

Introducing 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.

Evolution
The 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 perspective
Richard 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

2012 09:49:42
AB_May_2012.indd 59

24/04/2012 11:50

60

ACCA

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

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.

Distilling wisdom

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 helen.foy@accaglobal.com

Keynote 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

AB_May_2012.indd 60

Opportunity
for the funds
industry
The restructuring of Europes
banks poses an opportunity
for the funds industry, guests
at a recent ACCA Ireland
event were told
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
Commissions 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 Irelands funds industry
the event was moderated by head of
ACCA Ireland, Liz Hughes.

Impact
In 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

24/04/2012 11:50

61

(Left to right) Brian Donnellan FCCA,

business development manager, ACCA
Ireland; Graham Bishop, speaker and Liz
Hughes, head of ACCA Ireland
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 doesnt need
the IMF. We have quite enough money
here to solve these problems. It just
need to be properly channeled, he
said.

De-leveraging

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 flows
Were 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 sixpack because of its five regulations
and one directive), which forms the

AB_May_2012.indd 61

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.

Growth
Bishop 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

Bishop 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.

24/04/2012 11:02

62

ACCA

Tomorrows world
ACCAs 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
The world is undergoing a period of
profound transformation driven by
global political, economic and technological shifts. Taken together, these
forces suggest that the role and expectations of the accountant of tomorrow
and the industry they inhabit could be
radically different from the profession
today. So how can the profession prepare for an uncertain future when we
all feel there is already a full agenda
dealing with todays 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 ACCAs
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 influence
While 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

AB_May_2012.indd 62

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?

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 unpredictable 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

Population shifts

*FORUM SYMPOSIUM

Demographic 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

Chairs of ACCAs 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 discussions on a wide range of topics
including global economic uncertainty, audit, complexity, regulation,
adding value, principles, sustainability, 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 opportunities facing the accountancy profession generally.

24/04/2012 11:50

FOR MORE ON THE ACCOUNTANCY

FUTURES ACADEMY GO TO

63

www.accaglobal.com/globalforums

*GOING IN FOR THE SKILL

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 sustainability, will also result in growing regulatory requirements for accountants to
act as public interest watchdogs.

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 information technology. IT has revolutionised

AB_May_2012.indd 63

the workplace digitising workflows

and assets, and creating new opportunities 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
ACCAs Accountancy Futures Academy
and executive chairman of Raffles
Campus. Rohit Talwar is a global
futurist and founder and CEO of Fast
Future Research.

24/04/2012 11:02

64

ACCA

Elections to Council
As ACCAs 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 ACCAs 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 (todays 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

*
*
*
*
*
*

AB_May_2012.indd 64

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
Lincolns Inn Fields, London WC2A
3EE, by faxing +44 (0)20 7059 5561, or
by emailing michael.sleigh@accaglobal.
com (please put Council Elections in
the subject box).

*
*

24/04/2012 11:02

65

Nairobi: next meeting

Council highlights
Councils 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 ACCAs arrangements for
regulation and discipline in a single entity.
It stands at arms 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 Boards
commitment to continuous improvement
in regulation
and was reassured that, going forward, the
Board would continue to provide proactive
oversight of ACCAs disciplinary and
regulatory processes.
A number of other issues were
considered in Councils formal sessions:
Council met in discussion groups to
debate the competitive landscape in
the global profession and ACCAs
response to it.
Council considered the regular report
of chief executive Helen Brand. This
covered ACCAs performance, as well as
a review of its strategic development
and developments in the wider
profession.
On a recommendation from the

*
*

AB_May_2012.indd 65

*
*

Resource Oversight Committee, Council

approved the proposed budget for the
organisation for 201213. Following a
recommendation from a group of
standing committee chairmen, Council
also approved achievement measure
targets put in place to track ACCAs
strategic performance in 201213.
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 201213. (The formal
elections for ACCAs officers will take
place at the annual Council meeting
immediately following the AGM on 20
September 2012.)

Councils next meeting will be in June

2012, when it will meet in Nairobi, Kenya
as part of the biennial series of meetings
held in ACCAs key international markets.

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 BPPs
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

24/04/2012 11:02

66

ACCA news

Inside
ACCA
57 Diversity in the
finance function

Awards for excellence

58 Opportunity for the

funds industry

Three 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 SMALL

The 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 ACCAs 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 Irelands
story. Find us at
www.facebook.com/ACCAIreland

AB_May_2012.indd 66

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

24/04/2012 11:02

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