and Good.Lab announce ESG advisory services, the business and technology subsidiary of the AICPA, and Good.Lab, a provider of ESG software and consulting services, has announced a new ESG practice development programme that will enable accounting firms to respond to growing client demand for ESG advisory services. 

The programme launched with an initial cohort of five firms from the AICPA Major Firms Group who are receiving high-quality educational content, hands-on training, enablement tools and timely insights developed by and Good.Lab. is spearheading efforts to support firms with strategy and business model design around ESG. Approximately 86% of S&P 500 organisations already issue some kind of ESG-related report and the Securities and Exchange Commission (SEC) Proposed Rules to Enhance and Standardise Climate-Related Disclosures for Investors will hasten the requests for and standardisation of ESG information.  

The increase in customer and supply chain expectations is creating a new frontier in ESG measurement and reporting and middle market, private organisations will need to address heightened ESG expectations from customers, employees and investors. While some of the new or proposed rules and regulations have a singular focus on climate change issues, others address sustainability more broadly, but all require that businesses address ESG with the same metrics-based rigor as is applied to financial reporting. 

Good.Lab co-founder and CEO Andries Verschelden said, “We’re excited to build on our partnership with, to deliver on an end-to-end ESG solution for midmarket companies. This programme will enable CPAs to not only perform ESG data assurance, but also meaningfully expand their practices to advise on ESG strategy, reporting and disclosure, performance data measurement and related tax and technical services.” president and CEO, Erik Asgeirsson concluded: “The increasing market demand for ESG services is providing significant opportunities for the accounting profession. Similar to programmes we have rolled out with firms in other practice areas like Client Advisory Service, we know there is more to driving large scale adoption than simply identifying the right technology solution. Technology is a key component; however, business model strategy, training and awareness are just as critical to firm success. We partnered with Good.Lab, a trusted ESG expert, to develop a holistic program to accelerate firm’s expansion of services into the category.”

Duncan & Toplis accelerates growth plans with Blixit Group

Blixt is a pan-European private equity firm headquartered in London, with access to over €250 million of committed long-term institutional investor funding. An experienced investor in professional services, Blixt is committed to the UK accounting, wealth management and legal services sectors. Blixt focuses on growth-oriented businesses, helping its partners to build leading businesses.

At the heart of the Duncan & Toplis growth strategy is the continued investment in its team, the expansion of its service proposition and the leveraging of technology to unlock new opportunities for the business’ team members, clients and communities.  This will be complemented by acquisitive growth.

Adrian Reynolds, Managing Director at Duncan & Toplis said, “The core of our culture is based on doing right by our people, our communities and our clients and this will remain so. Over almost a century, Duncan & Toplis has been a trusted partner to generations of people, businesses and communities and we’re always working to have a greater positive impact. Our new growth strategy will start the next 100 years as we mean to go on. Blixt is an ideal partner for us because they share our focus on culture and growth for the right reasons. They also bring incredible expertise in strategic thinking, supporting us in the direction we want to travel in, helping us further along the path and accelerating our progress.

“Fundamentally, their support means that in the next few years, we can achieve what we would have hoped to achieve in 10+ years, and that’s very exciting.”

Carl Harring, CEO at Blixt commented, “We are delighted to be working with Duncan & Toplis. We have been impressed by the quality, track record and ambition of the business, and its exemplary commitment to both its people and its clients. We really look forward to partnering with the team at Duncan & Toplis and other like-minded accounting firms to help accelerate growth.”

Duncan & Toplis group was founded in 1925 in Nottingham. All Duncan & Toplis board members, directors and team members will remain in their existing roles, with Adrian Reynolds continuing as managing director of Duncan & Toplis and Andy Severn as managing director of wealth management business Castlegate which is part of the Duncan & Toplis group.

The agreement with Blixt is subject to regulatory approvals and is due to complete in Autumn 2023. Once approved, this investment will commence the most ambitious period of growth and expansion in the nearly 100-year history of Duncan & Toplis. 

ACCA: MPs told UK SMEs face working capital squeeze

Drawing on its Global Economic Conditions Survey and giving written evidence to the UK Parliamentary Treasury Committee inquiry into SME finance, ACCA set out a gloomy picture of SMEs struggling to access finance, saying that the proportion of SMEs having problems accessing finance remains below the long-term average. 

ACCA data shows that firms are struggling to secure working capital due to several factors including rising interest rates. Over half (57%) reported borrowing to manage cash flow has been more difficult in the last quarter than over the previous 12 months. Almost half (47%) say that supplier credit is harder to access, while over a quarter (27%) report accessing support from HMRC’s Time to Pay scheme is more difficult. 

ACCA head of technical and strategic engagement, Glenn Collins, said: “More effort is needed in encouraging banks to reach out to the SME community and to provide more suitable financial products. 

“But the established high street banks aren’t the only show in town when it comes to business finance. Equity finance offers an alternative route to raising funds. And government needs joined up thinking to make sure it is not accidently restricting the flow of finance to this crucial sector.” 

Late payment continues to be a persistent problem in the UK, hindering cashflow throughout supply chains ultimately leading to devastating consequences for some SMEs, creating a ‘domino effect’ throughout the supply chain. 

ACCA members report that SMEs are looking to alternative channels for finance other than banks.

FRC welcomes Peter Wyman as ICAEW’s first Chair of the Board

The Financial Reporting Council (FRC) welcomed Peter Wyman as the Institute of Chartered Accountants in England and Wales’ (ICAEW) first externally appointed chair of the board to modernise and strengthen the ICAEW’s governance and leadership. 
Until now the ICAEW board has been chaired by the elected ICAEW president, who is a member of the ICAEW council and changes each year.  

Commenting on this, the FRC’s acting CEO, Sarah Rapson, said: “Congratulations to Peter on his appointment as chair of the ICAEW at this critical time for the accounting and audit sector. The FRC looks forward to working closely with Peter to further strengthen oversight of the sector and deliver high standards of audit and corporate reporting.” 

Previously, Wyman said on this appointment: “I have been a passionate advocate for my profession and my professional body, the ICAEW, all my working life. After a gap of some 14 years, it is great to be involved again and to be able to contribute to this important new development in the governance of the Institute.”

Since leaving PwC in 2010, where he had been a partner and a member of the global executive, Wyman has held a portfolio of non-executive appointments spanning the private, public and third sectors including currently being the chair of NHS Blood and Transplant and an independent non-executive director of Pay.UK. He was a member of the ICAEW council from 1991 to 2009 and President in 2002-03. He was awarded a CBE in the 2006 Queen’s Birthday Honours for services to the accountancy profession.

GASB Adds Project on Subsequent Events to Current Technical Agenda

The US’ Governmental Accounting Standards Board (GASB) has added a project on accounting and financial reporting issues for subsequent events to the Board’s current technical agenda. 
The project will re-examine existing requirements in GASB Statement No. 56, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards, and evaluate ways to improve the accounting and financial reporting for subsequent events. 
The re-examination will address issues that were identified in pre-agenda research, including: 

  1. Confusion about and challenges associated with applying the existing standards for subsequent events, 
  2. Inconsistency in practice in the information provided about subsequent events, and 
  3. The usefulness of the information provided about subsequent events, with a focus on clarifying how subsequent events are defined and what information should be provided.

The project will also consider relationships with other existing GASB standards and projects as they relate to transactions or other events that occur subsequent to the date of the financial statements.

Pre-agenda research conducted by the GASB staff found that subsequent events are generally prevalent among governments and related issues are relevant to a broad number of governments. Research indicated the presence of inconsistencies and misreporting in practice in the accounting and financial reporting for subsequent events. Guidance on subsequent events in Statement 56 dates back to audit literature from 1972 and has not been fully evaluated for its effectiveness or consistency with the GASB’s conceptual framework.

The Board decided to add a project to the agenda focusing on subsequent events after carefully evaluating the staff’s research findings and taking into account the level of interest from the Governmental Accounting Standards Advisory Council, the GASB’s advisory council, which ranked the project highly during its annual project prioritisation.

PwC: Reinsurers name climate change as the top risk they face

In the latest iteration of ‘Reinsurance Banana Skins’, biennial research carried out by PwC and CSFI reveals reinsurers’ views on the urgent risks they face.  

At a PwC and Swiss Re Reinsurance Solutions event in Septembre in Monte Carlo, the survey results show respondents from the reinsurance sector identified climate change as the most significant risk they face.  

Survey respondents were asked how well prepared they thought the industry was to handle the risks they identified.  On a scale of 1 (poorly) to 5 (well) reinsurers gave an average response of 3.41, above the average of 3.20 and the highest of all sub-sectors (composite 3.38, life 3.14, P&C/ non-life 3.13).  

Reinsurers have long been at the forefront of developments in data and analytics and this optimism could reflect their confidence around their ability to harness the power of new technology. 

PwC sees wide-ranging impacts for reinsurers resulting from the risk of climate change - pricing, legal liabilities and changing consumer behaviour, alongside the challenge that the transition to net zero poses to reinsurers’ own operations.  

Commenting on these results, PwC UK partner and London market leader, Andy Moore, said: “Reinsurers are acknowledging that the effects of climate change are already being felt.  

“Combined with the fact that reinsurance is the most optimistic of all the insurance sub-sectors when assessing its preparedness to handle risks, these results make the case that now is the time to think differently and find solutions.  

“It’s impossible to fully prepare for such a fast-changing and unpredictable risk, but the sheer scale of the impact on almost all areas of the market means doing nothing is not an option. Well-run companies are already taking action to enhance risk modelling, re-assess the resilience of their portfolios and implement strategic risk management reviews.  

“Due to the ever-changing nature of this risk, companies need to put controls in place to ensure they have confidence in the data, infrastructure and policies they will rely on to remain agile in the face of the climate emergency and its repercussions. Doing this will put reinsurers in the strong position they need as they play a key role in managing the wider global transition to net zero”

How much could a US government shutdown cost the economy?

As discussions in Washington over federal spending continue, the potential for a government shutdown is growing. 

A shutdown would probably have a modest effect on the economy, which may also make a sustained impasse over spending more likely, according to Goldman Sachs Research.   

Commenting on this, Goldman Sachs chief US political economist, Alec Phillips, said: “Unlike the debt limit, where Congress reached a deal because the potential hit to the economy from an impasse would have been so severe, a shutdown would be much more manageable from a macroeconomic perspective.

“However, compared to the debt limit, the less severe economic effect of a shutdown also makes it more likely that Congress fails to act in time.”  
A government-wide shutdown would directly reduce growth by around 0.15% for each week it lasted, or about 0.2% per week once private sector effects were included, with growth rising by the same cumulative amount in the quarter following reopening, Phillips wrote in a team report

While federal spending is equal to almost a quarter of gross domestic product, the impact of a shutdown is much smaller, in part because only discretionary spending (about a quarter of federal outlays) would be affected.

Goldman Sachs: The Fed is likely finished hiking rates

Worries are that the Federal Reserve will continue raising interest rates to tame inflation appear to be fading amid encouraging signs in the jobs market. 

Commenting on this, Goldman Sachs research chief US economist, David Mericle, said: “The puzzle of 2023 has been that we have indeed seen demand reaccelerate this year, but nevertheless, labour market rebalancing has continued in exactly the way you would have hoped. 

“That’s been a bit of a stroke of good luck.” 

The job market is rebalancing as people continue to look for jobs, US immigration runs higher than usual, and companies pull back on hiring, potentially because distortions from the pandemic are fading. 

Mericle added: “It’s good news for the FOMC. 

“It means that the strong demand growth we worried about at the start of the year actually hasn’t been particularly costly because rebalancing has continued anyway, and I think there are a lot of signs that inflation will fall quite a bit further.” 

As a result, Goldman Sachs Research expects the Fed to pause rate hikes later this month and to start cutting rates in the second quarter of 2024. 

And while a recent spike in interest rates is raising concerns about the consumer impact, the effect on GDP growth is largely in the past, Mericle notes. 

As inflation cools and employment remains resilient, a US economic downturn is becoming less likely. Goldman Sachs economists cut their 12-month recession probability to 15%, down five percentage points from their prior estimate. 

Goldman Sachs research is also much more optimistic about US growth than most other forecasters. The economists see GDP growth averaging 2% through the end of 2024.