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Another year, another conference season, this year to sunny Brighton for Labour, and the Northern Powerhouse, Manchester for the Conservatives. As the mix of politicians, journalists, business representatives and the lobby headed off, several of ACCA’s team were there to represent our member and student views.

This year, ACCA joined forces to hold a joint business reception with the FSB, IoD, BCC, EEF, ICAEW and IPSE. The the newly appointed Shadow First Secretary of State and Shadow Secretary of State for Business, Innovation and Skills, Angela Eagle MP addressed the crowd and talked about her desire for business to be part of the policy conversation in the coming months and talked about the need for a new, kinder politics.

Further engagement at Labour included a private dinner on pensions supported by Aviva with Alison McGovern MP and a PWC event on fiscal responsibilities with Rebecca Long-Bailey MP, shadow exchequer to the Treasury. These events offered ACCA the opportunity to highlight our position on pensions and our policies on tax, both areas we will continue to engage with Labour in the coming months.

Straight after Brighton, ACCA went up to Manchester for the Conservatives. Again we hosted a joint business reception, this time with the guest speaker being the Chancellor of the Exchequer, George Osborne MP, who offered words of thanks for the continued support from the business community. The Chancellor welcomed the contributions of all the organisations – including ACCA – and their commitment to working with the government to build long term economic growth.

Again at the Conservative conference, ACCA was represented at private dinners on pensions with David Rutley MP, PPS to Iain Duncan Smith, Secretary of State, Department for Work and Pensions, an event on tax with Greg Hands MP, Chief Secretary to the Treasury. And we also attended a further two events on the rising phenomenon of the self-employed with David Morris MP, Peter Aldous MP and Charlie Elphicke MP.

ACCA was of course quick to point to the fact accountants are consistently rated as the most trusted advisers by SMES and colleagues highlighted the advisory role our members play in supporting the self-employed.

Whilst approaching the issues from different angles, both Conferences had lots of events on devolution, public sector reform, Europe, skills and the economy. With the Spending Review set for 25 November, much of the chatter around the conference was around what would stay and what would go, with some departments facing cuts of up to 40%. A lot of MPs discussed the need for a new relationship with the private sector and the role that public procurement can play in shaping this. As we’ve seen with the government’s approach to the living wage and apprenticeships, we expect to see more use of procurement as a model for getting business to behave in a certain way, and there is certainly a growing recognition that the relationship between business and government is changing.

Arguably one of the most forward-looking events was held by the Big Innovation Centre, which is designed to bring together business, public agencies and universities, which hosted events on intangible assets and intellectual property, an area of particular interest to ACCA UK. With studies suggesting that up to 80% of a listed company’s share price is no longer supported by the presence of tangible assets on their balance sheets, ACCA has been conducting work into how SMEs can account for and understand the effect that their intangibles and innovation is having on their business. Our Malaysian pilot is already available to download here but do keep your eyes open for our UK study.

If you would like more information on any of the above or our government engagement programme, please contact

Accountants are good with numbers, almost by definition. It’s what they do. But many of the biggest markets where the numbers have done the most to shape society now seem to be asking for more than just the bottom line, more than just the shareholder return. And worse yet, it may even be that the focus on financials has gone beyond a positive influence and is leading us down the path to global disaster.

The focus on meeting numerical targets has driven two business scandals to break this summer – the Toshiba accounting issues, and Volkswagen’s diesel engine emissions troubles. And while they look on the surface to be very different affairs, the underlying issues are disturbingly similar – set an apparently impossible target, individuals in business are driven to bend or even break the rules just so that they can disclose a set of figures at one point in time which superficially make the grade. But in both cases, in straining to reach that artificial goal they’ve missed their way and lost sight of what society sees as their real objective.

And the pattern repeats at a macro level. On a global level, countries are ranked by GDP. And yet eternal exponential growth, which is what focussing on GDP entails, will break the planet. So what are we going to measure instead as our “target” if financial numbers have had their day?

The change is coming already – businesses aren’t just being measured on how much profit they make; how much tax they pay back into society is growing in importance. And how they make the profits, and divide up what they haven’t paid in tax, is a focus of interest. Even if investors in developing markets are still focussed on the value of audited numbers, the global multinationals who drive the extractive industries and world spanning supply chains are being forced to declare whether their profits are built on the back of slave labour. The EU is bringing in a whole raft of non-financial reporting disclosures on everything from board diversity to respect for human rights. The rise of the integrated report, and focus on the triple bottom line, reflect the calls of stakeholders to understand more about the motivation behind the numbers, and where they might be taking us.

So how are accountants supposed to respond?

What we cannot ignore is that society wouldn’t exist without business. From the very first time someone realised that if you measure and record the grain going into the granary then you can identify, allocate and trade the productive surplus of society we became reliant on numbers. Fast forward a couple of thousand years to the development of the corporate entities which underpin the fabric of the modern world, and methodologies for monitoring the behaviour of owners and managers by other owners and by creditors are essential to the health of the Corporations which allow for the use of investors’ capital, opening up opportunities for achievements and returns that would otherwise be unattainable. Society is built on business, and business is built on trust in the business forms and business relationships which the numbers and narrative encapsulate.

The speed and size of modern markets, modern transactions, can’t change the underlying reality that society is made up of humans, some trustworthy, some trusting, some neither. Society still needs assurance that the individuals managing and controlling the flow of productive capability are doing it not just in their own interest, but with the broader good in mind. Accountants are indispensable for giving investors that trust in business.

Whether it’s the numbers in the back half of the accounts or the narratives we read in the front half of the accounts, it’s accountants in their role as auditors who sign off on the company reports. And increasingly it’s the real time operation of the business which concerns stakeholders. Who is better placed to analyse the data, to balance the likely impacts of the external environment, to critically assess and balance the competing pressures which assail the modern business?

However ethically pure an organisation’s motives, it won’t survive without a realistic view of the numbers and how they fit into the supply chain – and that’s a view which has to come from a trained and experienced mind. An English idiom, highlighting that actions are better than words, describes this situation well: “fine words will butter no parsnips” – and good intentions will balance no statements of financial position.

The world needs ethical and professional accountants, taking the wider view of business that society demands, and nothing can take the place of that ability to work with the numbers. What accountants need to do now is show how their talents and training fit into the modern economy in a way that no other skillset can emulate.

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By Jason Piper, tax and business law manager, ACCA

Shortly before disappearing under the avalanche of consultations, discussion papers and reviews that have been spawned by Summer Budget 2015, I managed to grab copies of the four offshore evasion condocs and have a read through. They make up an interesting complementary suite of proposals with some common threads but also some interesting differences.

The proposals all come from the same team, who clearly (shock horror) talk to each other about what they’re trying to achieve and how best to do so. They also talk to people outside the Treasury building, and I know from being involved in some of those discussions that they combine a healthy dose of pragmatism with a genuine passion to stamp out abuse of offshore arrangements. They recognise that actually most offshore work is legitimate, and most advisers want nothing to do with criminal activity. Let’s face it, another way of saying “offshore” is “all the rest of the world”, and there’s quite a lot of that which isn’t tax evasion.

The paper on civil sanctions for enablers of offshore evasion explicitly notes a desire to work closely with the professional bodies to help their members avoid the risk of entanglement with the new sanctions. That’s a move that we welcome too, and we look forward to helping generate and publicise the educational materials to help prevent advisers being duped by others.

Of course, there are advisers who deliberately set out to help their clients evade tax. Up until now, there’s been a gap in HMRC’s powers to deal with such advisers, and it’s that gap which many of the current batch of proposals seek to plug. But, on comparing the ‘civil sanctions for enablers’ proposals to the ‘criminal sanctions for facilitators’ proposals there was one key point which stood out the more I realised it wasn’t there.

Civil sanctions are proposed for advisers where a penalty has been levied on their clients. Fair enough; there’s a proven offence, and everyone involved should be dealt with. But the “criminal sanctions” seems to skirt around the whole issue of when it gets triggered. It might be that when it talks about evasion that’s shorthand for “evasion which we know has happened because there’s been a criminal prosecution for it”. (The rest of the “criminal” document is couched in similar legal shorthand – for example, it uses the term mens rea where the “civil” document tends to talk in terms of “state of mind”; nothing wrong with either approach, depending upon your audience.)

But then again, there are areas in the “criminal” consultation where it refers to “circumventing international tax transparency agreements” as being an evil worthy of remedy, and which potentially could spark the criminal prosecution of advisers involved in it. We’d agree that it needs dealing with – but there’s a catch here.

The proposed new criminal offence is, well, criminal. It’s a significant step to take, accusing anyone of criminal activity. And when the French authorities recently investigated a similar mechanism they found it failed on a constitutional fundamental – you can’t criminalise people for assisting in behaviour which is not, itself criminal. Or in other words, there must have been a successful criminal prosecution of the underlying offence before you can go after the facilitators. And that is what may be the stumbling block for HMRC in the UK. They desperately need more, experienced, resources if they’re going to successfully prosecute the tax evaders themselves – because without those prosecutions, the criminal offence of facilitation will be a pointless piece of legal posturing, a deterrent that will never be used.

ACCA has one UK member – Joe Bourke – standing as a Prospective Parliamentary Candidate (PPC). This is a blog from Joe about his experience ahead of next week’s General Election.  While ACCA is a-political, we wanted to share Joe’s experiences as it is not often we hear from the front line of the political process …

Politics is all about people, it’s about being able to represent a myriad of views and support your local constituents, making sure they have a voice in Westminster.

As someone who runs a small accountancy practice I am always surprised by the parallels of being an accountant and being a politician; it’s about talking to people, listening to their views and trying to help them.

Over the campaign, I’ve been asked a lot “what do I stand for? What does the party stand for?”

So I’ve talked a lot about SMEs. As a small business owner myself, small business is something I am particularly hot on in the campaign. I know from my own work that business rates are the biggest issue for small firms, and business rate relief must be available to help struggling companies. I certainly feel local authorities have a big role to play in securing the redevelopment of their high streets, as is due to happen in Brentford.

Like politicians of all hues, I’ve been out and about meeting people on the doorstep. This has been a really positive experience. Most people are happy to have a chat and of course this time it has been a completely different experience as I am able to discuss our record in the Coalition. I’ve really enjoyed these face to face meetings.

As an honorary auditor for the Brentford Chamber of Commerce, I am really proud of what Vince Cable has done as Business Secretary. We have reduced the regulatory and tax burden by cutting swathes of red tape and providing billions of pounds of Business Rate Relief for small businesses. Our One-in, Two-out rules mean that for every piece of regulation that costs business £1, Whitehall has to remove £2 of regulatory burden. This has slashed the costs of domestic regulation for businesses by more than £2 billion.

In Government we have also created the British Business Bank – helping thousands of companies secure over £3 billion of finance. And we are also extending the Funding for Lending Scheme, working with the Bank of England, to reduce the cost of lending across the system to SMEs.

As an accountant I know more than most that balancing the books is important, in the private and the public sector. When it comes to Government, and spending tax payer’s money, ultimately, it’s down to politicians and civil service to ensure accountability. Politicians need to be accountable too.

So what about being an accountant and a PPC? It’s not been too hard balancing the day job with campaigning because I know I am fighting for policies I believe in and which will benefit Brentford and Isleworth, and the whole country. I’m really proud to be part of the democratic process.

I know ACCA as an organisation needs to be a-political, and I am sure if it had members standing as PPCs from other parties they’d get to write a blog too.

I welcome your views, and I hope you get engaged with the democratic process as we approach 7 May.

When it comes to spotting the warning signs of developing fiscal problems, the availability of quality information to support decision making is of utmost importance writes Chris Ridley, public sector policy manager at ACCA.

Most countries run with a public sector finance deficit and have done so for many decades, but when does it become unsustainable?

The recent shift towards an integrated global economy has driven the requirement for information to be available on a comparable basis. Gone is the time when national finances can operate in blissful ignorance of conditions overseas. This has resulted in a growing number of nations moving away from country-centric accounting standards towards a common set of international standards for budget and reporting purposes.

International Financial Reporting Standards (IFRS) are already widely used and an equivalent set of International Public Sector Accounting Standards (IPSAS) have been developed alongside them. While being similar in many respects, they reflect the unique requirements of the public sector. For example, the focus on public service provision rather than profit making, and the levying of tax and other charges by government to meet the financial commitments created. This is important as the public sector commonly accounts for around one-third of the Gross Domestic Product (GDP) in the majority of developed countries.

A significant number of countries continue to manage their public sector finances on a cash basis, although an increasing number have adopted full accrual accounting. This has the advantage of looking beyond a simple income and expenditure analysis towards the complete financial position, including the assets and liabilities held. Where this information is consolidated, for example as a set of Whole of Government Accounts (WGA), this provides strategic information on the sustainability of the national fiscal arrangements.

ACCA remains supportive of IPSASs and continues to encourage a move towards the adoption of full accrual rather than cash-only IPSASs given the additional financial information provided. With the move towards IPSAS in many countries, ACCA launched the Certificate in International Public Sector Accounting Standards (Cert IPSAS) at the end of 2014. ACCA’s Cert IPSAS is a flexible, top-up qualification for finance professionals working in / with the public sector. As a globally accessible online course and assessment it meets the needs of individuals and organisations wishing to develop essential working knowledge of IPSAS in an efficient and cost effective way.

Only by improving the information held on public finances and then acting on the issues raised can public services be maintained and improved for the future. Otherwise, as recent events have highlighted, countries could find themselves with severe financial difficulties that might take a generation to resolve.

When it comes to financing sustainable public services, more often than not, there are no quick fixes.