ACCA urges UK government to address skills and talent shortfall

The Association of Chartered Certified Accountants (ACCA) has urged the UK government to address a national decline in upskilling, in a bid to kickstart economic growth and increase flagging productivity. 

In a recent study “Skills Development: Policies for Enhancing the Employer Ecosystem”, the ACCA has argued that employers need financial help to address chronic underinvestment in training. ACCA characterised current career guidance as fragmented, with levels of support based largely on region and sector. 

ACCA further noted that it believes a Skills Tax Credit Pilot – focused on digital technology, sustainability and financial competence – would empower organisations to address chronic underinvestment in training. A trained workforce would boost the global competitiveness of the UK economy. 

Similarly, a fundamental baseline assessment of careers guidance would provide the government with the data needed to identify gaps or weaknesses in provision, improve underperforming regions, and empower individuals to access new opportunities in an environment with fast-changing skills needs. 

Commenting on this, ACCA policy and insights senior manager, Joe Fitzsimons, said: “Our data tells us 75% of employers want to reskill their staff. Yet, ACCA members and UK employers have expressed concern around the ability to recruit and upskill the talent businesses need to grow. 

ACCA UK director, Abdul Goffar, further said: “The UK has witnessed a proliferation of education pathways and skills development initiatives, yet organisations across various sectors continue to highlight the ongoing challenge to upskill talent. Therefore, we need greater clarity on the options available, to give both employers and employees the opportunity to develop. 

IAASB announces plan to advance global audit and assurance standards

The International Auditing and Assurance Standards Board (IAASB) has published its approved strategy and work plan aimed at enhancing consistency and quality of audit and assurance standards worldwide. Elevating Trust in Audit and Assurance: IAASB’s Strategy and Work Plan for 2024-2027 reflects the crucial role of audit and assurance in fostering trust in the world’s economies. 

Commenting on this, IAASB chair, Tom Seidentstein, said: "Audit and assurance play vital roles in the world’s economies. 

"At their best, audit and assurance practitioners enhance trust in markets and assist in efficient, sustainable resource allocation. That is why the IAASB is dedicated to developing relevant, high-quality standards under a rigorous and transparent due process." 

The IAASB's previous strategy (2020-2023) saw significant progress on key objectives, including adopting agile methodologies and engaging with a broader range of stakeholders. Notable achievements include the suite of quality management standards, an enhanced special considerations standard for audits of group financial statements, the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (known as the ISA for LCE), and developing a proposed standard for sustainability assurance engagements, among other achievements. 

Building upon these successes, the new strategy reaffirms the IAASB's commitment to serving the public interest by developing globally accepted audit, review, and other assurance standards. 

Key highlights of the Strategy include: 

  • Completing priority audit and assurance projects, with emphasis on fraud, going concern, and sustainability assurance. 
  • Commencing new initiatives and projects, including focusing on supporting the adoption and implementation on our overarching standard for sustainability assurance engagements, establishing an IAASB Technology Position, and conducting post-implementation reviews, as well as standard setting on, among other topics, audit evidence and risk response, materiality, and reviews of interim financial information. 
  • Collaborating with official stakeholders across the external reporting ecosystem, including the International Ethics Standards Board for Accountants (IESBA), regulators, and standard setters, in addition to other stakeholders. 
  • Engaging with regulatory and standard-setting partners to strengthen trust in markets globally. 
  • Further implementing the Monitoring Group’s recommendations to enhance independence and accountability in standard setting. 


IESBA, IAASB’s partner board, also issued its strategy and work plan for the same period, Towards a More Sustainable Future: Advancing the Centrality of Ethics. It features IESBA’s vision and strategic goals, underpinning its ambition to achieve global recognition and acceptance of the International Code of Ethics for Professional Accountants (Including Independence Standards). 

CPA Australia: Small businesses in Australia and New Zealand struggle to keep pace in Asia-Pacific

Australia

Small businesses in Australia are struggling to keep pace with their Asia-Pacific counterparts and action is needed to address the imbalance as soon as possible. 

That’s the outcome of CPA Australia’s annual Asia-Pacific Small Business Survey which identifies a continuing gulf in the performance and outlook of small Australian businesses compared to 10 other markets, including mainland China, Hong Kong, India, Malaysia, Singapore, Indonesia and the Philippines.

It found that Australian small businesses are bottom or near to the bottom of the class when it comes to growth over the last 12 months, their expectations of growth this year and satisfaction with their financial performance. 

The report also found that Australian small business owners are the least likely to expect their national economy to grow in 2024, while also being the least likely to expect their revenue from overseas sales to increase.  

CPA Australia business and investment policy lead, Gavan Ord, believes the failure of small Australian businesses to adopt and adapt to new technologies is a large factor in explaining the disparity. 

Ord said: "Small businesses in Australia are significantly more likely to be owned by people aged 50 or over, which is great in respect of knowledge and experience, but the survey data shows they are much less likely to be using technology like e-commerce and social media."

"Australian small businesses are among the least likely to report notable revenue from online sales. Having digital tools is one thing, properly using them to grow the business is another.  

"Small businesses in other markets are investing in technologies and seeing the rewards, while too many in Australia are missing out. This slow pace of technology adoption is hurting both individual businesses and the economy as a whole. 

"To improve Australia’s economy and increase its competitiveness, policymakers need to significantly increase the proportion of small businesses incorporating new technologies into their business."

Ord also wants to see the government do more to promote business ownership and entrepreneurism amongst younger Australians.

New Zealand

Fewer New Zealand small businesses grew in 2023 than in 2022, and fewer expect growth over 2024, results from CPA Australia’s Asia-Pacific Small Business Survey 2023-2024 show. 

Small businesses cited rising costs and the state of the economy among the top reasons for 2023’s weak performance. 

Only 48% of businesses grew during 2023 compared with 60% in 2022, placing New Zealand third last of the 11 economies surveyed. 

The percentage of respondents that expect to grow over 2024 fell to 60% from 66% in 2023, although the percentage expecting New Zealand’s economy to grow rose to just over 50%, from 40% in 2023. 

Increasing costs, poor overall economic environment, tax and cash flow difficulties were the top four barriers to growth amongst New Zealand’s small businesses in the latest survey. 

The survey’s results also pointed to demographics as a factor underlying New Zealand’s relatively poor performance. 

Among the 11 surveyed economies, New Zealand had the second highest percentage of small business owners aged over 50. Half were 50 plus, against a survey average of just 28%. 

CPA Australia's regional head, Rick Jones, commented that the survey shows older business owners are much less likely than their younger counterparts to run businesses that are growing, and more risk averse” 

Jones said the age factor contributed to a raft of survey-bottom rankings for New Zealand small businesses in the areas of technology use, innovation and exports. 

When New Zealand's small businesses have invested in technology, they are the least likely to report that this has improved their profitability in the short term. Only 20% said technology investment improved their profitability in 2023, compared with 76% of small business owners in Vietnam. They were also the least likely to derive more than 10% of revenue from online sales, to use social media in their businesses, or to receive more than 10% of sales through digital payment options such as PayPal or Google Pay. New Zealand's small businesses are the least likely to expect a cyberattack in 2024, and the least likely to have reviewed their cyber protection in the last six months.

PCAOB announces registration and inspections director

The Public Company Accounting Oversight Board (PCAOB) has announced the appointment of Christine Gunia as director of the PCAOB’s division of registration and inspections (DRI). Prior to her current appointment, Gunia served as DRI’s acting director. She has been with the PCAOB since 2004. 

The work of DRI includes the global network firm (GNF), non-affiliate firm, and broker-dealer firm inspection programs, as well as the registration program. As DRI’s director, Gunia oversees audit firm registrations and inspection of all domestic and foreign accounting firms that audit issuers whose securities trade in the U.S., as well as audits of SEC-registered broker-dealers. 

Commenting on this, PCAOB chair, Erica Williams, said: "Christine is an experienced leader with outstanding expertise. "We are very pleased that we can count on her continued leadership as we work to enhance PCAOB inspections and transparency for the benefit of investors and others."

IESBA launches first global ethics standards on tax planning

The International Ethics Standards Board for Accountants (IESBA) has announced the launch of the first comprehensive suite of global standards on ethical considerations in tax planning and related services, incorporated in the IESBA Code of Ethics. 

Following certification by the Public Interest Oversight Board (PIOB), the standards establish a clear framework of expected behaviors and ethics provisions for use by all professional accountants, and respond to public interest concerns about tax avoidance and the role played by consultants in light of revelations in recent years such as the Paradise and Pandora Papers.  

Moving away from a purely mechanical and legalistic approach, the goal of the standards is to provide a principles-based framework and a global ethical benchmark applicable to tax planning services and activities. This will establish a consistent point of reference for all professional accountants, as well as other tax professionals who are strongly encouraged to use the standards, when dealing with tax planning, to ensure due consideration of public interest as well as potential reputational, commercial, and wider economic consequences for their clients or employing organisations. 

These standards are especially relevant in the context of rising public scrutiny of tax avoidance schemes which can harm companies’ credibility and corporate reputation, as well as risking litigation and harming the public interest. Responding to increased public interest concerns, the fundamental goal of these standards is to ensure an ethical, credible basis for advising on tax planning arrangements, thereby restoring public and institutional trust on a topic that is core to the social contract between corporations and the market which supports them. 

Commenting on this, IESBA chair, Gabriela Figueiredo Dias, said: "Professional accountants have an important duty to their clients but must not lose sight of their fundamental duty to the public interest. As scandals in recent years have shown, though some behaviors may be legal under the letter of the law in certain jurisdictions, the ‘grey area’ of tax is not always the ethical way forward. These standards provide a robust framework to help professional accountants, as well as all other tax advisers whom we strongly encourage to adopt or use the standards, navigate the ethical decisions in this complex area that are central to trust in the entire system." 

OECD Centre for Tax Policy and Administration former director, Pascal Saint-Amans, added: "I commend IESBA on the launch of the world’s first ethics standards on tax planning, which I’m sure will catalyse a much-needed change in mindset and behaviors.  As public scrutiny increases, tax avoidance becomes less tolerated. Ethics is a central tenet of good tax behavior and advice and IESBA’s work in this area not only generates important discussion on the topic, but also is central to restoring public trust more broadly." 

These new standards are aimed at complementing and further strengthening the relevance of the existing IESBA Code addressing Tax Planning and Related Services. The standards become effective July 1, 2025. 

The approval of the new standards was preceded by extensive outreach and public consultation which took place during 2021-2023, including three global roundtables involving over 150 senior-level representatives from stakeholders from very different jurisdictions and backgrounds.

AFRC CEO and executive director appointed by the government

The Accounting and Financial Reporting Council (AFRC) has announced the appointment of Lai Chui-pik Janey as the chief executive officer (CEO) and executive director of the AFRC for a term of three years from 9 April 2024 to 8 April 2027.  

Lai has experience in accounting both in Hong Kong and Mainland China, as well as being acquainted with the international regulatory and compliance landscape.  

Lai has noted her awareness about the development needs of the sector, and has further offered statements on her commitment to promoting accounting and audit quality in Hong Kong while supporting the development of the profession.  

Commenting on this, AFRC chairman, Kelvin Wong, said: "On behalf of the Board, I warmly welcome Lai Chui Pik Janey to this important position and look forward to working closely with her in the next three years.  

"I am confident that her dual experience in both the accounting profession and talent development will help orchestrate the effective functioning of the AFRC and promote a long-term healthy development of the accounting profession."

FCA: Improving picture for personal finances, but many still struggling

New research from the Financial Conduct Authority (FCA) has found that while many are struggling to meet financial commitments, the picture has improved over the last year. 

The regulator found 7.4m people were struggling to pay bills and credit repayments in January 2024, down from 10.9m in January 2023. This is still higher than the 5.8m recorded in February 2020, before the cost of living squeeze began. 

As the FCA confirms stronger protections for borrowers, the regulator is reminding those in financial difficulty to: 

  • Contact your lender for support if you’re worried about keeping up with payments. Talking to your lender about your options won’t impact your credit score. 
  • Visit MoneyHelper for tips on living on a squeezed income and to find free, expert debt advice. 


5.5m people said they had fallen behind or missed paying one or more domestic bills or credit commitments in the previous 6 months to January 2024. This was down from 6.6m people a year earlier. 

In the 12 months to January 2024, 2.7m adults sought help from a lender, a debt adviser or other financial support charity because they found themselves in financial difficulty. Nearly half (47%) of those that sought help said they were in a better position as a result. However, 2 in 5 adults who had fallen behind on their bills said they had avoided talking to their lender about their finances. 

Renters, single adults with children, adults from a minority ethnic background and people living in the north-east of England were more likely to be in financial difficulty. 

Commenting on this, FCA executive director of consumers and competition, Sheldon Mills, said: "Our research shows many people are still struggling with their bills, though it is encouraging to see some benefitting from the help that’s available. 

"If you’re worried about keeping up with payments, reach out to your lender straight away. They have a range of support options and will work with you to agree the best one for you. You can also find free debt advice through MoneyHelper." 

The FCA has further reminded financial firms they 'must support their customers and work with them to manage payment difficulties'. The regulator has cracked down where firms haven’t met its expectations, securing nearly £60m in compensation for 270,000 customers. 

The FCA has also confirmed stronger protections for borrowers. It is making permanent the expectations on lenders to support borrowers in difficulty, which were introduced during the pandemic, with additional targeted changes designed to improve outcomes for consumers.