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By Terence Jeyaretnam, director, Net Balance

The International Standard on Assurance Engagements (ISAE 3000) is a standard used globally for assurance engagements for audits or reviews of historical non-financial information. Here at Net Balance, a specialist sustainability firm, we use the ASAE3000 (along with the more qualitative AA1000AS), its Australian cousin, generally alike in scope and application. While the ASAE3000 has always allowed non-accountants to use the standard, the IAASB has only recently adopted this provision.

From experience we believe there are numerous benefits when utilising the suite of ISAE/ ASAE 3000 in conjunction with the AA1000 Assurance Standards (AA1000 AS), which has traditionally been the domain of specialist sustainability firms. The AA1000 AS is a holistic sustainability-focussed standard designed specifically for assessing and strengthening the credibility and quality of an organisation’s social, economic and environmental reporting.

Here at Net Balance we encourage the revised ISAE 3000 to be used in conjunction with a detailed approach of the AA1000 AS, and be applied together during the phases of planning, obtaining evidence and establishing quality controls.

Having the experience of successfully completing over 250 Assurance engagements, we believe a more complete assurance can be undertaken by using both the AA1000 AS and the ISAE 3000 in combination.

Accordingly, this revision creates new opportunities for Assurance providers housing subject matter experts in sustainability to provide Assurance to all organisations. Numerous advantages include:

  • Increased representation of materiality – Defined by the assurance provider and the client organisation, subject matter experts using their professional and experienced judgements can now delve deeper into complex topics such as supply chain issues, water, waste management, or even inform clients about the global landscape on human rights.
  • Risk identification – Subject matter experts understand the clients’ business and operations and therefore they can leverage past experience to address existing risks and to identify new sustainability-based risks.
  • Value add – Subject matter experts can provide feasible value adding recommendations. This is an increasingly important factor as most reports received by management from assurance providers should provide strategies to help clients understand both the risks and opportunities in a fast changing regulatory environment.

Read Deloitte’s viewpoint on the matter here

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By Sarah Hathaway, head of ACCA UK

Last week I had the honour of being part of the judging panel for the British Accountancy Awards 2014. Since the Awards were re-launched four years ago, ACCA has been proud to be involved as the lead partner and we are pleased to have seen a year on year increase in terms of both the number and quality of entries received.

The most interesting and important categories for me have been those which recognise the ‘Independent Firm of the Year’ across the UK’s various regions. These provide a valuable opportunity for smaller practices to demonstrate how they have both adjusted to and thrived during what have proved to be challenging times for our economy. I was also a judge in 2013 and I continue to be delighted to see great examples of the focus, drive and innovation that has led to increases in turnover, profit and – most importantly of all – client satisfaction.

If you are part of a practice which has a good story to tell, please seriously consider entering in 2015. For a flavour of what it’s all about, why not consider attending this year’s awards’ ceremony in London on Tuesday 25 November? You will be able to meet some of the short-listed firms, individuals and previous winners. I promise you will be inspired!

For more information visit www.britishaccountancyawards.co.uk

Nikki Walker

By Nikki Walker, diversity and inclusion expert, More2Gain

What springs to mind when someone says Finance Director? Or Diversity Director for that matter? Very different skills and personalities, I am sure, based on some fairly ingrained stereotypes. But, actually, does anyone really care?

I certainly did. When I moved from being a Finance Director to Head of Diversity & Inclusion, EMEA, at Cisco Systems, I found myself battling a tidal wave of stereotypes and bias.

“What on earth are you thinking of?” was a typical reaction from many of my finance colleagues. Followed closely by, “I’ll give you three months before you are begging to come back to the real world of finance.”

And from my new diversity colleagues, both internal and external, I also encountered a fair amount of scepticism. “Why would a finance person want to do this job? She hasn’t even worked in HR! Will she really be able to get to grips with this?” And this, no less, from diversity professionals!

And so I found myself in the rather novel position of having to defend my choices, prove I hadn’t taken leave of my senses and overcome some pretty ingrained views about the value and abilities of two very different professions – from both sides of the camp.

This is a real pity and a missed opportunity. Because it is when we work together and blend different skills that we achieve the best solutions. Whether it was offering a fresh pair of eyes, critiquing strategies or applying “forensic commercial” analysis to combine many strands of employee data and surveys, the new insights I shared helped leaders understand the opportunity they were missing shape thinking and bring about lasting change.

The very fact that I was an “outsider” gave me a huge advantage, enabling me to challenge orthodoxies and come up with new perspectives and solutions. My finance and commercial skills enabled me to anchor the case for change in measurable business benefit.

I also learned a huge amount from spending time with people whose viewpoint is not “centred on the numbers.” In short, I realised how much I had to offer… and how much I had to learn. A journey that is still ongoing now that I have changed careers again to run my own inclusion and diversity consultancy, More2Gain, focused on helping organisations realise the power of Inclusion and Diversity,

And so I would like to leave you with a final thought. In finance, we focus heavily on measuring “returns.” Well, I can say with absolute certainty, that there are rich returns to be gained (for you and your organisation) whenever you connect with people outside of your group.

So reach out to your diversity colleagues and offer to help. Partner with them to jointly seek out new ideas. Be bold, make new connections, use your finance skills and help to advance diversity and inclusion in your organisation. Whatever you do next, do not allow convention and stereotypes to hold you back. I didn’t and I really am the richer for it.

ACCA, in collaboration with ESRC (Economic Social Research Council) and Brunel University, has launching a paper about diversity in business – read it here.

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By Sarah Hathaway, head of ACCA UK

The results of the Social Mobility and Child Poverty Commission survey give cause for grave concern and demonstrate that not enough is being done to prevent Britain remaining an exclusive ‘club’ at the top of our society. Relative social mobility, the extent to which an individual’s chances depend on their parent’s class or income, seems to be shrinking.

This summer Thomas Picketty’s book Capital: in the 21st Century reignited a debate for western governments to address the issue of inequality. The book has ignited political discussion across Western Europe; Picketty’s central thesis is where the rate of return on capital outstrips economic growth, wealth inequality ineluctably rises. The impressive amount of data he uses to back up his thesis is why the book has received such acclaim. However despite the excitement which surrounded the book and a call for action, today’s survey results are a reminder that clearly concern about inequality and social mobility has not translated into action. Or that any action has taken effect?

In our recent submission to the Social Mobility and Child Poverty Commission’s State of the Nation report we called on an end to unpaid internships and a recent survey of our members showed us that not only do our members feel strongly on this issue but 76% of the 1,500 surveyed also felt their companies should pay the living wage. Social mobility cannot be viewed in isolation and the level of income inequality is an issue that all three of the parties should address. The report recognises that practical steps can be taken to prevent the drive towards improving social mobility settling into a pedestrian pace.

The commission has rightly called on government to collect data on its staff and lead by example and we hope the government will take note of this. ACCA is currently working to do the same; a founding feature of ACCA is accessibility and we continually review our policies to ensure that our qualification is open to everyone whatever their background.

Today’s results demonstrate that we cannot afford to soften and settle into a pedestrian pace, but the reality is that change is slow. Inter-generational mobility, as the name suggests, takes a lifetime to achieve. There is a need for practical solutions and we urge organisations of all sizes to adopt the Professions for Good Social Mobility Toolkit. The toolkit does not claim to be a silver bullet but is designed for organisations to be able to tailor it according to resource. Built from the ground up, the toolkit is fit for use by small employer organisations with no dedicated HR functions, with easy low-cost recommendations.

The SMCP Commission’s survey has done well to put further pressure on governments to act – public bodies must ensure they do too.

ACCA will be publishing a report on social mobility in the autumn.

Adrian Henriques

By Adrian Henriques, ACCA Global Sustainability Forum member – www.henriques.info

There is no shortage of dreadful human rights abuses around the world – from displaced people, slavery in agriculture, human trafficking and more. I’m sure that all accountants would agree that human rights should be respected at all times. But it may not be obvious what this has to do with the business of accounting – even granted that the accounting profession has a remit to work in the public interest.

The first part of the answer to that is all about what human rights have to do with companies. That issue has been discussed at the United Nations for the last forty years and several unproductive attempts have been made to codify the responsibilities of companies as a result. In 2011, as a result of the widespread consultations of John Ruggie, the UN Human Rights Council unanimously endorsed the ‘Guiding Principles on Business and Human Rights‘. These achieved the remarkable result of securing a good consensus between governments, business and civil society as to the role of companies in relation to securing human rights. The key point was that while governments have a legal obligation to uphold human rights, companies have a duty to respect them.

The second part of the answer concerns how companies can, in practical terms, respect human rights. As set out in the Guiding Principles, the main point is about adopting a systematic approach to setting policies, reviewing risk, reporting and acting accordingly. That amounts to due diligence towards human rights issues. And of course, the rigour of due diligence is something with which accountants are familiar. There is therefore likely to be increasing demand for the services of accountants in this area.

One manifestation of this is the work of the accounting firm Mazars. Mazars is currently one of the main parties behind the development of a standard for reporting on human rights issues, based on the Guiding Principles. It is also developing a standard for auditing those reports. Another manifestation is the increasing attention to human rights being paid by ACCA. ACCA is currently working on a project to look at business responsibilities in relation to child rights.

So there is some human rights accounting to be done for businesses after all. It will address how businesses take responsibility for the human rights consequences of their activities. This forms part of the increasing prominence of non-financial aspects in corporate reporting. The accounting profession can therefore respond positively to the call in the Universal Declaration of Human Rights for every ‘organ of society’ to do its part in promoting human rights.