06 Jun

Tony North, co-founder and CEO of Centtrip Music The hidden stars of the music industry

As any amateur musician can testify, it’s not easy to make it as an artist. What is less well known though is that a key ingredient for commercial success in the music business is the support of a talented accountant.

Accountants are rarely in the public eye, but their job is crucial. It is about far more than just dealing with invoices and tax returns – they are more like business managers. In addition to keeping the books in order, they help create financial structures that set artists up for long-term success and a strong bottom line.

International experts

The global nature of the industry and the rise in international touring means that accountants increasingly deal with the tax systems of multiple countries. Withholding taxes on foreign income and double taxation have always posed a challenge for those with international clients, so a watertight global strategy is crucial to avoid unnecessary charges.

Take for example, the journey of an Ed Sheeran track, from being written to being aired on the radio in 50 different countries and then being performed around the world. Accountants must ensure that money made from the song, as well as from merchandise and commercial usage, is in line with cross-border compliance to avoid incurring fines or legal fees.

For the process to work, multiple streams of people are employed, from production teams and music technicians through to advertisers and marketers, all of whom require spending budgets and wages. International transactions are subject to currency exchange fees, making it difficult to track how much was spent on tangible goods and services, opening more doors for cross border costs to mount up.

From sales to streams

It is no secret that streaming has become one of the most popular ways to purchase music. According to the BPI and Official Charts Company, the growth in buying and listening to music last year was driven by audio streaming, which soared 51.5 per cent to just over 68 million albums. This has proven difficult for start-ups and catalogue artists with only a modest amount of material, but for major artists with multitude of tracks and equity in music platforms, streaming is an invaluable service.

The rise of streaming has revolutionised the way in which people engage with music and continues to gain traction, and entrepreneurially minded accountants have taken advantage of this opportunity. Dissecting the challenges and aligning business models with these new streaming platforms, they have created new ways to create maximum exposure for artists.

To celebrate and recognise the role that these unsung heroes play in driving the success of the music industry, we have launched The Legal & Accountancy 50. This initiative is also a great opportunity to help music managers identify the truly exceptional accounting professionals and lawyers who are helping to shape the industry and upon whom some of the world’s biggest stars depend.

17 Jul

Less than one third of businesses have made formal Brexit plans, says ICAEW

Less than one third of UK businesses (29%) have made Brexit plans, while less than one half (43%) have held meetings to discuss the opportunities and risks presented by leaving the European Union, according to recent ICAEW research. Of those businesses who have engaged in discussions, both formal and informal, two fifths (40%) expect EU negotiations to have a negative impact on their business – compared to only 6% who anticipate mainly positive outcomes.

With the clock ticking, the research also highlighted that almost a third of businesses (29%)  believe the free movement of goods, services, and capital between the UK and the EU is essential to growth, while one fifth (20%)  value access to a skilled workforce from the EU.

Michael Izza, ICAEW Chief Executive, said:

With 20 months until departure, it is now the Government’s responsibility to help pave the way for business success once we have exited the European Union. Issues raised within our research – such as access to skilled EU workers and the free movement of goods and services – should be firmly placed on the Prime Minister’s radar when she engages in talks with the EU to ensure the priorities of business are fully considered and complacency is avoided

One fifth (21%) of companies that have considered the impact are willing to explore new markets outside of the European Union. The intention to take advantage of export and trade opportunities is a positive indication that UK firms are prepared to embrace the changes leaving the EU could have on the day-to-day running their businesses.

Michael continued:

There are a number of businesses who are enthusiastic about export prospects, however their enthusiasm will be nothing more than a pipe dream if Government doesn’t provide the necessary funding and support. This should begin with devising a robust export voucher scheme that is fit for purpose, as well as renewing or replacing programmes such as the European Investment Fund to avoid venture capital from drying up
26 Jun

Draft guidance on the IFRS for SME Standard published for public comment

The draft guidance is in the form of a questions and answers (Q&A) document and addresses the accounting treatment for a financial guarantee issued by a parent company in that parent company’s separate financial statements.

The SMEIG is responsible for assisting the IASB matters related to the implementation of the IFRS for SMEs Standard. Developing non-mandatory and timely guidance on specific accounting questions raised by those implementing the Standard is one of the two main responsibilities of the SMEIG. The other is to make recommendations to the Board regarding amendments to the Standard.

This draft guidance is the first to be published since the initial comprehensive review of the IFRS for SMEs Standard was completed in May 2015.

The consultation is open for comment until 1 September 2017 and can be accessed here.

21 Jun

ICAEW: Political stability vital for strong financial leadership

Commenting on the Public Sector Finances for May 2017, published today by the ONS, Ross Campbell, ICAEW Public Sector Director, said:

In the wake of the General Election result, it’s disappointing that no party manifesto contained a robust plan to deal with the structural problems in the nation’s economy. The resulting hung parliament increases the uncertainty associated with Brexit, while also diverting resources and attention away from the economy. This could negatively impact the health of the public finances. As a result, and in order to deliver credible fiscal plans, it’s important that Government puts strong financial leadership at the top of its priority list
There have been signals from Government that we are likely to see an end to austerity and therefore a possible increase in public spending. With the economy still in a fragile state, it’s important that any increased expenditure is allocated to areas that will help to drive economic growth – infrastructure, training, and fiscal stimulus
17 Dec

ACCA: Skills, not technology, is key to the success of smart cities


The development of the smart city is an important element in ensuring the sustainable urbanisation of the world. But for this to happen, more focus is needed on strengthening accounting, financial management and governance, over and above just focusing on technology, according to a new report by ACCA.

The report Smarter Cities, Simpler Cities – accounting for the city of the future examines the rise of the ‘smart’ city as the best viable path towards successful, sustainable urban centres in an age where two thirds of the global population will inhabit cities by 2045. Cities are defined as ‘smart’ not just by using technology, but in their ability to support an end-to-end process that sees resources used efficiently to create viable outcomes that improve the quality of life for citizens

The report examines a range of global smart cities, ranging from South Korea’s tailor-made Songdo to examples of how smart principles are applied to existing, developed cities such as Amsterdam and Singapore. In particular, the report features a spotlight on India, where the government’s Smart Cities Mission has identified 100 smart cities to be created or retro-fitted with smart attributes.

For report author Narayanan Vaidyanathan, who develops ACCA’s research and insights with a focus on the future direction of business and accountancy, Smarter Cities, Simpler Cities highlights the necessity for smart principles to be embodied in the skills of key professionals, as much as in the city infrastructure itself,

The rise of the smart city is coinciding with significant areas of technological innovation – such as the Internet of Things (IoT), Big Data analytics and open standards – and all this has the potential to revolutionise everything from waste management to traffic reduction.

In this context, Narayanan Vaidyanathan observes that the rise of smart cities is an example of how vital it is for professions like accountancy, to adapt in an evolving age,

The discourse around smart cities talks extensively about the role of government and technology providers; but there is an important third leg in the picture which is the finance and accountancy community.
This report highlights the urgent need for professional accountants to develop their own digital capability and understanding in order to provide the expert guidance (in areas like cost-benefit analysis for example) and strategic counsel necessary to shape the city of the future.
More broadly, in many cities across the world there is a move for decentralisation with more authority being transferred from central governments to the local level. This has implications such as greater budgets and responsibilities for finance staff at city administration level, and accountancy capacity building in this space will be important.
Part of this capacity building will be the creation of ‘professional accountants’ who go beyond recording historical performance. This involves various aspects, but a couple of particular relevance in this context are the ability to communicate effectively – which is critical to breaking silos in an often traditional public sector environment; and, acting as the ethical conscience of the organisation with respect to managing public money in the public interest.

This report should serve as an important reminder that ensuring a strong pipeline of forward-thinking and fully-trained finance professionals is integral to building resilience into cities of the future

[amazon_link asins=’1138932728′ template=’ProductAd’ store=’globalaccountant-21′ marketplace=’UK’ link_id=’42ec6e29-c44f-11e6-82d8-e9a669cfc342′]Across Asia and Africa, the development of the smart city is not a utopian ideal but a social necessity: rapid urbanisation is creating unique pressures on local economies, environmental impacts and the challenges of ageing populations. India alone expects to add about 300 million city dwellers by 2045. So as new centres of urbanisation emerge around the world – smart cities offer a ray a hope to ensure that the journey of many of these new urban centres can benefit from a planned, smart approach that safeguards living conditions for future generations.

You can read a copy of the report here: http://www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2016/december/smarter-cities-simpler-cities.html

13 Dec

COST OF RUNNING A DEFINED BENEFIT SCHEME UP BY 37% YEAR ON YEAR

The Pensions and Lifetime Savings Association published its 42nd Annual Survey.  The findings highlight costs for operating defined benefit (DB) schemes have increased by 37% in one year.  

Since 2015, the mean running cost of DB schemes has increased by 37% from £400 to £546 per member. This is largely driven by increases in fund management and custody costs, up 32%. Smaller schemes, those with 5,000 or fewer members, have seen the greatest rise in running costs with an average increase of 63%, to £787 per member.

In 2016, only 10% of DB schemes were open to new members compared to 21% in 2015. That figure is only 4% in the private sector. Rising costs, as well as economic volatility and low interest rates, are proving key factors in the decision to close to new members.

Joanne Segars, Chief Executive, Pensions and Lifetime Savings Association, said:

Our analysis highlights a continuing problem for DB schemes. Higher operating costs, especially for smaller schemes, combined with widening deficit levels mean DB schemes are under pressure as never before.  We can’t ignore the resulting risk to members’ benefits for all but the most strongly funded schemes and for these members the risk is they will lose 15-20% of their benefits.
Our DB Taskforce is currently collaborating across the pensions sector to develop recommendations on how we can change the industry to improve outcomes for members and schemes. Our Annual Survey clearly shows that the running costs of a DB scheme is considerable for all schemes – and even greater for smaller schemes.  With over 6,000 private sector DB schemes in the UK the Taskforce will explore the potential of scheme consolidation to deliver better value to scheme members and sponsors.

Defined contribution (DC) schemes continue to grow, fuelled by the success of automatic enrolment. Master trusts have played a significant role in automatic enrolment and between June 2015 and June 2016, master trusts enrolled an estimated 1.8 million new members.  

Within DC schemes the average employee contribution rates remain at 4.2% (same as 2015) and employer contribution rates sit at 7.9% (8.0% in 2015). Savers continue to benefit from low charges, with the average annual management charge of 0.4% as it has been for a number of years.   

The executive summary of the Annual Survey is available to journalists and has been attached as a pdf to this email.

Further information on the DB Taskforce, along with a copy of the interim report, is available on the PLSA website

06 Oct

NEW IAESB GUIDANCE PROMOTES AWARENESS AND PROPER APPLICATION OF INTERNATIONAL ACCOUNTING EDUCATION ENTRY REQUIREMENTS

IAESB Global AccountantThe IAESB have released new materials in support of its recently revised IES 1, Entry Requirements to Professional Accounting Education Programs (2014). In addition to an overview document, the following support materials are now available:

A guidance paper addressing what needs to be considered in setting educational entry requirements to professional accounting education programs, and what information can assist individuals considering a career as a professional accountant;

Frequently Asked Questions explaining terminology and concepts contained in IES 1;
An illustrative example of factors that an organization may consider when setting educational entry requirements to professional accounting education programs; and
Perspectives on IES 1 describing the range of factors that could influence an individual’s successful completion of a professional accounting education program.

These materials are intended to help professional accountancy organisations and other accounting education providers, including universities, governments, and international donor agencies, understand and implement IES 1. This, in turn, supports improved accountancy education in the public interest.

Chris Austin, Chair of the IAESB said:

IES 1 sets out an inclusive approach to the accounting profession, such that entry requirements target admittance to those with a reasonable chance of successfully completing the professional accounting education program.
Organisations, therefore, need to consider thoughtfully what factors contribute to successful completion, such as individual and environmental factors, in order to attract and retain individuals of the highest caliber and potential

Setting appropriate entry requirements benefits IFAC member organisations by helping them efficiently allocate resources. It also benefits those considering an accountancy career, by helping them make informed decisions.

The suite of eight IESs facilitates credible, high-quality professional accounting and auditing services around the world. They cover both initial and continuing professional development and focus on a learning outcomes approach to develop professional competence. The IESs also support professional accountants’ mobility and serve as a global benchmark for accountancy education and the profession.

16 Aug

ACCA calls for new ‘future looking’ Integrated Reporting culture as joint reports launched with IIRC and IAAER

ACCA_logoTwo research reports, jointly commissioned by the IIRC, the IAAER and ACCA, shed light on the progress made since the publication of the International <IR> Framework, and discuss the challenges that lie ahead as <IR> aims to become the reporting norm.

Speaking at the launch of the reports in London, Yen-Pei Chen, ACCA’s corporate reporting manager said;

‘For <IR> to become widespread practice there needs to be a critically large supply of organisations preparing integrated reports, balanced with a significant demand for integrated reports from investors.

‘As integrated reporting filters through the corporate reporting system, there is a clear need to educate both preparers and users in the principles of <IR>. A vital part of this is helping both groups to understand and appreciate the relevance of capitals other than financial capital. This cultural change needs to be driven hand-in-hand by professional bodies, regulators, accountants and investors.’

According to Yen-Pei, ACCA will continue to work over the coming months to get businesses across the world ‘thinking ahead’ when it comes to <IR>.

‘ACCA is committed to using our influence to give impetus to more connected and forward-thinking business decision-making, reporting and investment. For us, it has been very important that we lead by example through adopting integrated reporting to explain our own strategy and performance. As the first international professional body to report according to <IR> back in 2011, we’ve found it a fantastically useful framework for showing how we create value for society and account to our stakeholders transparently and consistently year-on-year.

‘We are also working on several projects in collaboration with the IIRC, including reviewing the latest corporate reports produced by <IR> Business Network participants to provide practical recommendations to report preparers about how integrated reporting can be improved.’

Donna Street, IAAER director of research and educational activities added:

‘The two research studies are reflective of IAAER’s on-going efforts in the development and maintenance of high quality, globally recognised standards of accounting practice. Both studies suggest several fruitful areas for future academic research including how the content and disclosures of <IR> companies evolve with the passage of time, the usefulness of disclosures from the perspective of different users, the development of measurement systems for non-financial information, and the audit and assurance of the information contained in integrated reports.’

Neil Stevenson, director of global implementation at IIRC said:

‘Over 2,000 organisations are now adopting the International <IR> Framework globally. These organisations are forward thinking, having recognised the benefits of evolving their reporting practices. To continue this momentum, we will need to continue to energise the ‘pull factor’ from investors and other providers of financial capital, capture the benefits of innovations in reporting, and demonstrate examples of leading practice. Reports such as these, released today by ACCA, are so important to the Integrated Reporting movement. They play an important role in raising awareness of <IR>, why changes are needed to current corporate reporting practices, and the need for greater connectivity of strategy, risks and value creation.

‘We also welcome these reports as offering empirical evidence from academic studies, which provide rigour of analysis and insight to support leading practice. This will be invaluable to market participants and support organisations in their progress through reporting.’

The reports are;

Meeting the information needs of users: use and usefulness in Integrated Reporting

http://www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2016/august/use-and-usefulness-of-integrated-reporting.html

Factors affecting preparers’ and auditors’ judgements about materiality and conciseness in Integrated Reporting

http://www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2016/august/factors-affecting-materiality-and-conciseness-in-integrated-reporting.html

07 Jun

ACCA Sets Out ‘Magnificent Seven’ Attributes Vital to Success in Modern Business

ACCA_logoAn optimum blend of skills, experience and intelligence are now needed by professional accountants, finds an in-depth global research project from ACCA

With feedback from over 2,000 business and finance professionals around the world, the future of the accountant report is the most in depth analysis of the profession – and where it is headed – ever conducted.

The report has led to ACCA defining what the future finance professional must have by developing a set of seven Professional Quotients – a mix of technical knowledge, skills and abilities formed with interpersonal behaviours and qualities.

1. Technical skills and ethics (TEQ): The skills and abilities to perform activities consistently to a defined standard while maintaining the highest lest of integrity, independence and scepticism.

2. Intelligence (IQ): The ability to acquire and use knowledge: thinking, reasoning and solving problems.

3. Creative (CQ): The ability to use existing knowledge in a new situation, to make connections, explore potential outcomes, and generate new ideas.

4. Digital (DQ): The awareness and application of existing and emerging digital technologies, capabilities, practices, strategies and culture.

5. Emotional intelligence (EQ): The ability to identify your own emotions and those of others, harness and apply them to tasks, and regulate and manage them.

6. Vision (VQ): The ability to predict future trends accurately by extrapolating existing trends and facts, and filling the gaps by thinking innovatively.

7. Experience (XQ): The ability and skills to understand customer expectations, meet desired outcomes and create value.

Speaking at the launch of the report, Helen Brand OBE, ACCA’s Chief Executive said:

Helen Brand ACCA Global AccountantThe role of the accountant has been revolutionised over the last decade, to become leaders, trusted expert counsel and key strategic advisers to organisations whether in the public or private sectors. “With this metamorphosis comes a requirement for a whole new set of skills. On top of technical excellence, finance professionals now require creativity, emotional intelligence and the vision to lead

Speaking to the public in a separate survey, it becomes evident that despite these Professional qualities being relatable to majority of professions, there is a lack of awareness of them.

The results show that despite 63% knowing what IQ is, only 20% are aware of what their actual IQ level is. A further 80% said they’re unaware of what Emotional Intelligence is, and just 5% know what their EQ level is. This pattern continues with Creative Intelligence, Digital Intelligence and Technical/Ethical competency.

Faye Chua, Head of Future Research at ACCA, comments:

People are probably using these skills outlined in these quotients on a daily basis, but in general the awareness of these qualities is very low. Hopefully the new report from ACCA can increase the overall awareness of these traits, as looking to the future there will be a strong demand for working professionals to have a flexible combination of such skills and abilities – even more so than in the present day…No matter what sector or industry you work in, there are many ways to up-skill in these areas, whether it’s through traditional learning, online learning or even through our daily lives. What is important is our curiosity; being relentlessly curious will drive our skills in these areas.

24 May

ICAEW to offer partial licenses for insolvency practitioners

ICAEW is to take advantage of changes to insolvency licensing by offering partial licenses for insolvency practitioners.

Bob Pinder, ICAEW Regional Director, said of the decision: 

ICAEW is the UK’s largest insolvency regulator, ICAEW licensed practitioners gain a wealth of benefits and support. Now, through the introduction of partial licenses, those who wish to specialise in personal or corporate insolvency will be able to share those benefits. Insolvency firms who choose ICAEW as their single insolvency regulator will, therefore, ease the regulatory burden by dealing with only one regulatory professional body

ICAEW will begin formally accepting applications from those wishing to obtain a partial licence on 1 July 2016, although applicants can register their interest and obtain further information in advance of that date by contacting Teresa Doody at Teresa.doody@icaew.com