We then undertook an extensive campaign to engage with our members, through which we shared our vision for a single, Irish-based, accountancy body that would be better placed to address the opportunities and challenges of the future and ensure a sustainable accountancy profession in Ireland.

I am pleased to report that following a membership vote at the Extraordinary General Meeting on Wednesday 21st February, this proposal was approved.

The proposal was passed by an overwhelming majority of our membership, with 97% of those voting supporting the proposal. I see this as an endorsement of the benefits this amalgamation will bring and the desire amongst members for a strengthened future for our profession.

This is a decisive step forward for Irish accountancy. As a single Institute, and the largest professional body on the island of Ireland, we will be in the best possible position to advance the health and sustainability of the accountancy profession. This new Institute will benefit from expanded resources, greater influence, and a larger membership base. This will help attract new entries into our sector, and further our ultimate goals of advancing educational standards, supporting the public interest, and providing value to our members.

It was fantastic to see our membership display such interest and enthusiasm in the future prospects of our profession during the course of this campaign. The attendance of so many members at our town hall meetings, both those held in person around the country and virtually, was very impressive. It inspired a thorough and thoughtful discussion of what we can do to increase student uptake, inform public policy, and provide the best quality of services for our members.

I, along with the other members of the CPA’s Council, am confident this amalgamation will deliver these benefits. As such, I would like to thank you for your consistent and earnest engagement with this proposal, and for ultimately giving it your seal of approval.

We look forward to carrying on our traditions of educational excellence, the highest professional standards, and strong member supports into our new home.

The members of Chartered Accountants Ireland also endorsed this amalgamation proposal at a Special General Meeting held on Wednesday 21st February.

We can now begin the next steps of this process. Over the next few months, we will continue to work closely with our counterparts at Chartered Accountants Ireland to secure regulatory and legal approval for this amalgamation. We will also discuss how the staff and Councils of both organisations will work together following amalgamation, ensuring that CPA Ireland’s proud legacy of service to members and the culture and heritage of our Institute will be maintained and enhanced in the newly amalgamated Institute.

We will make sure to keep our members informed throughout this process.

Once all requirements have been approved by IAASA and other relevant regulators, an application will be made to the High Court asking it to sanction this amalgamation. After this, we will complete the process and begin our renewed efforts to support our profession.

There are exciting times ahead for our profession, our students, and our members.

Now that the amalgamation has been approved, all members of the newly amalgamated Institute will soon be able to reap the benefits of a larger, stronger, more influential Institute. In the meantime, I look forward to engaging with you, addressing your concerns or questions you may have, and continuing to serve the membership of this body for the rest of my term.

There is a wide range of areas where an accountant contributes to the firm from cost analysis to management accounts, and of course they could provide me with first class mentoring. I am delighted to have completed the CPA qualification in 2023.

I can’t forget Michael O’Leary, however. I’ve read all his books and still get a kick out of them. He must be the coolest accountant I know.

It can be challenging at times but so worthwhile. Work-life balance is a priority and something I definitely needed while studying, so make sure you spend time doing the things you love.

I am also trying to fit in some travel after the pandemic scuppered my post-university plans. I am really enjoying exploring different cultures and landscapes, and certainly looking forward to the exam free year ahead!

What we do just would not work without her.

To help SMEs and their trusted advisors (such as accountants) with that, Accountancy Europe, Ecopreneur.eu – the European sustainable business association – and the European Association of Cooperative Banks (EACB) jointly published, at the end of 2023, new guidance documents.

The first one of these papers outlines five reasons why SMEs should take the sustainable transition seriously. The second one provides five first steps that a SME can take to kickstart their sustainability journey.

The papers were based on interviews with small and medium sized practitioners (SMPs) that are already providing or planning to provide sustainability services for SMEs. They also benefitted from considerable technical input and insights from experts from all three organisations.

The main message of these guidance documents? Just get started!

Consider, for example, the competitive advantage. SMEs with sustainable business models can expand their range of clients and business partners. This can happen, for example, by being better placed to secure contracts with larger companies who are legally obliged to consider the overall sustainability of their value chains.

For example, the costs of investment in a new plant or equipment may be offset by increased energy efficiency, especially at times of skyrocketing energy prices and when grants are available to finance energy-efficient assets.

Sustainability can even affect the business’ succession planning. A sustainable business that is adapted to the needs and realities of the environment is more resilient in the longer term and makes the next younger generation more interested to continue running the family business.

The benefits of positive branding should not be underestimated. Basing a business model around sustainability is more appealing for end-consumers who seek to cut their personal carbon footprint and can improve brand loyalty. This can, in turn, also strengthen the SMEs employee retention and commitment for the business.

Access to finance is another key opportunity. Firstly, sustainable SMEs can increasingly access diverse financing options, including loans, impact investments, and grants earmarked specifically for sustainable initiatives. Additionally, governments, the EU and international organisations actively support sustainable SMEs through funding programs and incentives, further expanding their potential access to capital.

The second positive and more indirect access to finance benefit is that sustainability planning leads to stronger management structure, accounting systems and internal controls. Reporting on these sustainability actions also enhances the SMEs corporate responsibility brand. All of these are factors that make the business more attractive to lenders.

Finally, sustainability goals make businesses focus on long-term strategic planning, instead of short-term results. It renders the business more risk resilient and adaptive, which should also improve their ultimate sale value.

The above are just a few positive examples for SMEs and their advisors to consider. Each of them should be carefully considered from the perspective of the specificities of each SME and their business model.

Some first simple steps, as outlined in Accountancy Europe’s papers, can be done by practically every SME. The best approach is to identify and start with ‘low hanging fruits’, and very simple steps. This is already much better than doing nothing at all.

Reaching out to experts, information points and national associations is one of the very first steps. Could the national SME association or chamber of commerce have resources and support for SMEs? Or could the national accountancy institute have information about local practitioners who support SMEs with sustainability? There is also the chance that the SMEs existing accountant can help or knows of someone within their network who can.

Another crucial step is to reflect on the business’ future vision, a process that can be guided by far-reaching questions, e.g.:

• Where does the owner see the SME in 5 or 10 years?
• What about in 20 years?
• Does the business model contribute to climate objectives?
• If not, what needs to change?
• How will the owner get the data to plan and monitor the change?

Many SMEs may be already ‘sitting’ on a lot of sustainability related data without even realising it. Data points such as gas and electricity consumption, material used in the production process, recycling practices, remuneration policies or gender balance should already exist.

Other data points – such as how the SME’s electricity provider’s energy is produced or employee satisfaction – should be relatively easy to obtain.

What about the SMEs value chain? Is the company overly reliant on key customers or suppliers with higher sustainability risks or exposures?

See the paper on five first steps for more insights on how a SME could get started – or how SMEs’ accountants can advise their clients.

Additionally, accountants often have a strong network of other experts and professionals to whom they can refer the SME when necessary.

They can, for example, help SMEs communicate with their value chain partners. Most accountants are not environmental engineers or energy experts – but they are experts in legal requirements and business planning.

1. The Organisation for Economic Cooperation and Development (OECD), 2017

• company directors are expected to operate,
• certain transparency requirements must be complied with,
• certain protections are afforded to shareholders, creditors, and the wider public, and
• sanctions, both civil and criminal, are provided for in respect of certain non-compliance.

One of these sanctions that serves a public protection purpose is the restriction regime provided for under company law. Since 2003, over 2,700 company directors have been restricted. In this article, I will trace the evolution of this public protection measure.

A restriction order is a declaration from the High Court that a director of an insolvent company cannot become involved in the management of a company for a period of five years unless certain statutory capitalisation requirements have been complied with.

Under the Companies Act 2014 (the 2014 Act), a court shall make a restriction order unless a director of an insolvent company can satisfy the court that:

• s/he acted honestly and responsibly in the conduct of the affairs of the company,
• s/he co-operated with the liquidator, and
• there was no other reason it would be just and equitable to restrict them.

Breach of a restriction order is a criminal offence and, moreover, can expose a restricted person to personal liability for company debts.

The disqualification of company directors’ regime under section 184 of the Companies Act 1963 (1963 Act), pre-dated Ireland’s restriction regime. Restriction was proposed as an expansion of the disqualification of company directors’ regime to take account of a wider array of director conduct. It was aimed at tackling malpractices and/or abuses of company law in the period between insolvency and the conclusion of court proceedings appointing a liquidator over the company. Directors of insolvent companies were to be automatically disqualified from being involved in the management of any subsequent company unless there was a minimum allotted share capital in the subsequent company. The liquidator of the insolvent company would be required to use the restriction period to report to the court on whether the interests of creditors were in jeopardy and request the court make a disqualification order (Department of Industry Commerce and Trade, 1983).

However, concerns arose from these proposals to expand the disqualification regime. Namely, that bona fide directors would be unfairly caught by disqualification of this nature. As a result, the proposals changed to allow directors to apply for relief from the automatic bar on being a director between insolvency and the end of the liquidation of the company (McKenna, 1987).

Around the same time as Ireland was considering implementing the restriction regime, the Cork Report in the United Kingdom (UK) sought to examine company law with the objective of deterring and penalising irresponsible behaviour (Review Committee on Insolvency Law and Practice, 1982).

These recommendations made their way into clause 7 of the Insolvency Bill 1984, which ‘was the most controversial provisions in the Bill and underwent considerable alteration throughout all parliamentary stages’ (Fletcher,1989). Ultimately, despite these proposals, automatic disqualification did not feature in the UK’s Insolvency Act 1986.

The Gallagher Report advocated for the establishment of a centralised executive unit within the Department of Enterprise and Employment charged with making company law applications to court, including restriction applications. The Gallagher Report recommended that liquidators and receivers would be obliged to report to this executive unit within six months of their appointment about whether a disqualification application was appropriate (Company Law Review Group, 1994).

Under the Company Law Enforcement Act 2001, the ODCE was established, and the ODCE, a liquidator or a receiver could bring an application for restriction. Liquidators of insolvent companies were obliged to make a report to the ODCE and to make restriction applications to the court within a required time period if they are not relieved of such a requirement by the ODCE.

In 2007, the Company Law Review Group (CLRG) recommended the introduction of restriction and disqualification undertakings (Company Law Review Group, 2007) and undertakings were provided for by the Companies Act 2014. Restriction undertakings arise where a director consents to being restricted from acting as a company director when invited to do so by the Corporate Enforcement Authority (CEA). No application is made to court if a director consents to a restriction undertaking but the undertaking has the same effect on a director as a restriction order. Undertakings, therefore, provide a cost saving to the directors concerned, as well as freeing up court time.

On 6 July 2022, the Companies (Corporate Enforcement Authority) Act 2021 (2021 Act) was commenced. The 2021 Act established the CEA to replace the ODCE. Section 34 of the 2021 Act included amendments to the restriction regime expanding the grounds under which an applicant may seek to have a company director restricted. The amendments still require company insolvency as a ground for restriction but also impose restriction on directors for failures to:

• convene a general meeting of shareholders to propose nominating a liquidator for the company, and/or
• table a notice to nominate such a liquidator at such a general meeting, and/or
• provide a notice to employees of the winding up on the company.

A director will be restricted on any of these grounds unless they can establish their honesty and/or responsibility, etc.

Around the same period as the restriction regime was proposed, an expansion of the UK’s disqualification of company directors’ regime was also proposed. However, in the UK, concern for honest and bona fide directors being unfairly prejudiced by this automatic disqualification resulted in the proposals being scrapped.

Ireland enacted the restriction regime with amendments to tackle the concern with honest and responsible directors falling within the restriction regime. Many concerns after the enactment of the restriction regime centred on who would be charged with oversight of the regime.

Eventually, this oversight became a responsibility shared by the CEA and liquidators of insolvent companies.

More recently, restriction undertakings were introduced and section 34 of the 2021 Act amended the restriction regime by expanding the grounds for restriction.

Restriction is an important feature in the landscape of company law enforcement in Ireland and has been applied to over 2,700 people since 2003, sanctioning persons who have not met the required standards of behaviour while acting as company directors.

Company Law Review Group, Annual Report of the Company Law Review Group 2007.

Department of Industry, Commerce and Trade, Memorandum for the Government on the Draft Scheme of a Bill to Amend the Companies Acts, 1963 – 1983 (8 August 1983).

Fallon, S., Seanad Deb 27 May 1987, Vol 116, No. 4. For further comment on the likelihood of business failure, see Mr T. Mckenna, Seanad Deb 16 July 1987, Vol 116, No. 19.

Fletcher, I., “The genesis of modern insolvency law – an odyssey of law reform”, (1989) 1 Journal of Business Law 365.

McKenna, T., Seanad Deb 16 July 1987, vol 116, No. 19.

O’Malley, D., TD, Seanad Deb 13 December 1990, Vol 127, No. 2.

Review Committee on Insolvency Law and Practice, Report of the Review Committee on Insolvency Law and Practice 1982, (Cmd 9175).

Working Group on Company Law Compliance and Enforcement, Report of the Working Group on Company Law Compliance and Enforcement 1998, (Pn. 6697).

The impressive new state of the art campus, which spans three buildings over 23,000 square feet, is co-located on the Teagasc, Athenry Campus and is the first of its kind in Ireland. Addressing the food community’s specific need for food grade workspace, the campus offers four fully kitted out pay per use production units and twelve independent “own door” production units for lease.

In addition to these facilities, the BIA Innovator Campus team also provide a powerful mix of technical, innovation and commercial supports to the food community and benefits from direct links to research, development, and innovation with the Teagasc Food Programme.

More than €8 million has been provided in capital funding from Enterprise Ireland, Department of Rural and Community Development, Galway County Council, Teagasc, Galway Rural Development/LEADER and Western Development Commission to deliver the project. The BIA Innovator Campus has the highest impact collaboration of public, industry, community, and education backing assembled to date in the Irish food sector.

In addition to the impressive on-site spaces, the BIA Innovator Campus will host a calendar of in-house events as well as facilitating several education and training courses delivered by the Galway Roscommon Education Training Board. Looking to build knowledge, relationships, and opportunities outside of Ireland, the BIA Innovator Campus is currently active in the EU project sphere and working on a number of European food and entrepreneurship-focused Erasmus+ and Interreg projects.

The research highlights the growing financial influence of Irish women and outlines how they are driving changes in workplace cultures and business practices, ultimately leading to a forecasted shift in female economic influence.

The paper goes on to show that even with the gender pension gap and the fact that Irish women’s pensions are worth 35% less than men’s at retirement, it is forecast that women will hold 45% of assets under management by 2030 in line with forecasts for Western Europe. This is a result of better qualifications, more equal pay although the gender pay gap remains, higher levels of home ownership and longer life expectancy, with Irish women living to 84 years and Irish men living to 81.

1. Female Economic Influence:
   The paper predicts a significant increase in the economic influence of Irish women, with a focus on their role in transforming work cultures and business practices.
2. Entrepreneurial Growth:
   Female entrepreneurship in Ireland is rising, with female founders securing €234m in funding for tech startups in 2022. Ireland ranks third in early-stage female entrepreneurs across all European countries.
3. Board Representation:
   There has been a 21%-point increase in female representation on ISEQ listed companies in the last five years, surpassing the 25% target for 2023 at 28%.
4. Labour Force Participation:
   The labour force participation rate increased by one percentage point to 65.8%, with a notable rise in female participation from 58.9% to 60.8% in the past year.
5. Generational Impact:
   Gen Z and millennial female businesspeople are responsible for starting one-third of businesses globally.
6. Investment Trends:
   While women are generally more risk-averse investors, they prioritise Environmental, Social and Governance (ESG) factors, with 52% preferring to invest in businesses with a positive social or environmental impact.
7. Leadership Shift:
   There is a move towards ‘agile leadership’, promoting female career advancement by shifting away from presenteeism and strict supervision.
8. Barriers to Ambition:
   Globally, challenges like childcare and familial care hinder women’s careers, leading to a shift away from jobs that demand prioritising work commitments over personal life.

“I’m delighted that research like the ‘Future is Female’ is being undertaken, but it’s still shocking that while our financial influence is growing, a cause to be celebrated, women are still retiring with a third less than men. As females, we’re used to putting everybody else before ourselves, but we need to also look after ourselves. Maternity leave, parental leave, career breaks, we don’t think about the impact these will have in terms of gaps in our pension contributions. That’s why it’s really important to review where you’re at, to see if there’s going to be enough to live the life you want to live in retirement. I wouldn’t underestimate the relief you feel when you talk to a financial planning adviser” says Siobhan McNally Head of Business Development Wealth at AIB.”

A financial advisor can help women assess their situation and put a plan in place to address any gaps and highlight where things are being done well. It takes about an hour, and you can meet an advisor in an AIB branch or talk on the phone – the choice is yours.

To set up a chat with an AIB Financial Advisor, call 01 771 5867 or visit the AIB website. Phone line opening hours are Monday to Friday 9am – 5pm.

The Fixed Term Deposit options are for Businesses who have at least €15,000 available to put away for the full term and still have enough money in other accounts that can be easily accessed. To open an account customers can visit one of our 170 Branches across the country and speak to one of our dedicated deposit specialists or contact their relationship manager.

AIB’s Head of SME, John Brennan said: “Reflecting the changing interest rate environment, AIB has increased rates on a number of occasions since November 2022, across our variable and fixed rate deposit products”.

“For business customers who have larger sums to save for longer periods, we have increased all our Fixed Term deposit rates, offering a 3% return on our 2-Year Fixed Term Deposit account, 2.50% on our 1 Year Fixed Term and 1.5% A.E.R. for our 6 Month Fixed Term. We encourage all customers to continuously monitor our savings and deposit offerings”.

The current interest rates available on our Fixed Term Deposit Product are:

Terms and conditions apply. Interest is subject to Deposit Interest Retention Tax (DIRT). To find out more have a look at our website; AIB/Business/Business-Accounts/Fixed-Term-Deposit-Account.

Interest is subject to Deposit Interest Retention Tax (DIRT)

The podcast focusses on two of the Committee’s discussions about:

• Climate-related commitments in IAS 37 Provisions Contingent Liabilities and Contingent Assets; and
• Disclosure of revenues and expenses for reportable segments in IFRS 8 Operating Segments.

In practice, deferred tax creates many questions when the guidance is being pragmatically applied to various situations. For example, International Financial Reporting Standard (“IFRS”) reporters noted some challenges in interpreting how deferred tax should be applied to leases when the new IFRS leasing standard was issued. To address the diversity in practice, the International Accounting Standards Board (“IASB”) had to issue a narrow scope amendment to IAS 12. The accounting for deferred tax also receives quite a lot of scrutiny from external auditors, internal decision-makers and accounting regulators alike.

The accounting for deferred tax in your accounting records requires an understanding of the core concepts. From an FRS 102 perspective, some examples include deferred tax liabilities, deferred tax assets, sufficient future taxable profits, taxable and accounting profits, substantially enacted rates, and permanent and timing differences. There are also heightened considerations concerning the recognition and measurement of deferred tax assets due to recoverability considerations and specific rules around discounting and the offsetting of deferred tax assets and liabilities. The successful accounting for deferred tax requires not only a knowledge of the core definitions, but also the exceptions in conjunction with an in-depth knowledge of the guidance for specific balances, for example, business combinations. Topical areas such as Pillar 2 and the impact of climate-related risks on entities also create bespoke deferred tax considerations for companies.

Getting your deferred tax accounting correct is not only salient from the perspective of presenting appropriate statutory financial statements, but also from the perspective of reducing volatility within the financial statements. It also assists FRS 102 reporters in understanding future obligations to pay taxes that are based on profits that have already been earned. This ultimately supports the management of cashflows associated with taxes and signposts the quantum of cash that is needed to pay tax bills once the deferred tax becomes current tax.

A deferred tax liability is defined in the glossary of FRS 102 as income tax payable in future reporting periods in respect of future tax consequences of transactions and events recognised in the financial statements of the current and previous periods. So it reflects a future outflow payable by the entity. On the other hand, a deferred tax asset reflects a future tax deduction i.e. a benefit to the entity. Section 29 of FRS 102 defines them as income taxes which are recoverable in future reporting periods in respect of:

• future tax consequences of transactions and events recognised in the financial statements of the current and previous periods;
• the carry forward of unused tax losses; and
• the carry forward of unused tax credits.

The threshold for recognition of a deferred tax asset is higher than a deferred tax liability. Prior to the recognition of a deferred tax asset, an entity must ensure that there are sufficient future taxable profits against which the deduction can be recovered. An entity is required to challenge itself by assessing whether it is considered probable that it will have sufficient taxable profits available in the future to enable the deferred tax asset to be recovered. There is also emphasis placed on “probable” which is defined in the glossary of FRS 102 as “more likely than not”. Unrelieved tax losses and any other deferred tax assets can only be recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. The fact that there are unrelieved tax losses in the first instance is strong evidence that there may not be other future taxable profits against which the losses will be relieved. 

When it comes to the assessment of whether a deferred tax exists at the year-end that needs to be captured in the statutory financial statements, Section 29 requires a “timing difference plus” approach to be taken. Timing differences occur when there is a difference between the accounting and taxable profit or loss. Accounting profit or loss is the amount calculated using an accounting basis i.e. FRS 102, and is the amount presented in a company’s profit or loss or total comprehensive income. The taxable profit or loss is the amount for a reporting period upon which income taxes are payable or recoverable, determined in accordance with the rules established by the taxation authorities. As a result, there can be differences between the accounting and tax profit or loss which can cause a timing difference.

The “timing difference plus” approach requires deferred tax to be recognised on all timing differences, however, there are a number of exceptions to this. For example, unrelieved tax losses and other deferred tax assets, as mentioned earlier, can only be recognised to the extent that it is probable that they will be recovered either against the reversal of deferred tax liabilities, or other future taxable profits. In addition, no deferred tax is recognised on permanent differences, for example, a grant which is not subject to tax or an expense that is disallowable for tax purposes. There is however an exception to permanent differences relating to business combinations. Again, this re-emphasises the need not only to be familiar with the core definitions in Section 29 but also the exceptions . The “plus” in the “timing difference plus approach” refers to the required recognition of deferred tax on asset revaluations and on assets (except goodwill) and liabilities arising on a business combination.

Applying these core concepts to a simple example, let’s assume the following:

Company A, which has a year-end of 31 March 20XX operates a defined contribution plan for its employees. The Company pays the annual charge for the plan in advance and tax relief is provided on the plan in the accounting period in which the payment is made. As the contributions have been paid in advance, the tax relief is greater than the expense recognised in the profit and loss account for accounting purposes. This is because the advance payment for accounting purposes is recognised as a prepayment and released to the profit and loss account over time, however, the full tax deduction was allocated when the annual charge was made. In the following period, the financial statements will have those advance contributions charged as an expense, but no tax relief will be available. This is a timing difference which would result in a deferred tax liability.

Some other salient technical considerations pertaining to deferred tax include, but are not limited to, discounting what rate is used to calculate deferred taxes, and the offsetting of deferred tax assets and liabilities. It should be noted that the discounting of deferred tax assets or liabilities is prohibited applying Section 29 of FRS 102. This is helpful from a practical perspective as, if required, this would create complexities and require detailed schedules to understand the expected timing of reversals.

Section 29 also requires the application of a substantially enacted tax rate. There are also additional considerations in relation to the tax rate applied in the calculation of deferred tax, for example, concerning profits affected by distributions and balances such as investment property which is recognised and measured using the revaluation model.

The offsetting of deferred tax assets and deferred tax liabilities is permitted only where certain conditions have been met. Specifically, the entity must have a legally enforceable right to set off current tax assets against current tax liabilities. They also must relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

For those with group members applying both IFRS and FRS 102 it should be noted that there are distinct differences in the approach outlined in Section 29 of FRS 102 requiring a “timing difference plus” approach rather than the “temporary differences” approach as outlined in IFRS’s equivalent income taxation standard IAS 12. In terms of detail, whilst the standards are fundamentally different, generally, you would expect the FRS 102 approach to give the same answer as the IFRS one. Other areas of difference include convertible debt and business combinations.

Interestingly, FRED 82 brings quite significant changes to FRS 102 including greater alignment with IFRS on some core topics, however, it does not address deferred tax. Section 29 remains broadly unchanged with the exception of the inclusion of inserted guidance about uncertain tax positions. As a result, the core differences between IFRS and FRS 102 on the topic of deferred tax will continue to exist after FRED 82’s effective date of 1 January 2026.

Overall the application of the guidance in Section 29 of FRS 102 in relation to deferred tax requires a knowledge of the core terms in conjunction with the exceptions and specific rules on certain topics. It has a far reach over your financial statements as any balance with timing differences has the potential to create a deferred tax impact.

When comparing employed versus self-employed status, there are several distinctions to consider, which include differences in rights, responsibilities, and tax implications.

The following checklist provides some of the considerations in determining whether an engagement is an employment or self-employed arrangement. The below list is not exhaustive, and every case should be considered on its own merits.

Overturning the Court of Appeal, the Supreme Court has determined that the delivery drivers of Domino’s Pizza were employees and not independent contractors.

This case has received a lot of attention over the last few years and its decision is very significant to employers. In its judgment the Supreme Court has clarified the position with regards to workers who fall within the legislative interpretation of the “employee” definition by setting out a five-step test to determine whether a contract is one of service or for services, although the underlying historical tests remain valid.

• Karshan produced and delivered pizzas and ancillary food items to customers, who placed orders by telephone, the internet and attending its stores.
• Karshan engaged drivers to deliver the pizzas to its customers.
• Each driver entered into a written agreement with Karshan, which outlined the company’s need to sub-contract the delivery of pizzas, as well as the promotion of its brand logo, and that the driver (referred to in the agreement as the “contractor”) would be willing to provide those services.
• The agreement stated that the driver would be retained as an “independent contractor” and that the company had “no responsibility or liability whatsoever for deducting and/or paying PRSI or tax on any monies [he/she] may receive under this agreement”.
• Each driver was required to provide his/her own delivery vehicle in a roadworthy and safe condition and to insure same for business use. Alternatively, the driver could rent such a vehicle from Karshan, with the agreement stating that the company was also prepared to offer third-party insurance at a predetermined rate. (TAC found no evidence that company vehicles were available for the drivers to rent).
• Drivers were also required to wear a fully branded uniform (subject to checks by store managers), with a deposit requested by the employer from the drivers for same.
• The driver could engage a substitute provided the substitute could undertake all of the driver’s contractual obligations, with the substitute being paid by Karshan.
• On a shift, drivers clocked in and out using a computerised system located on Karshan’s business premises and were given a cash float by the company, which was returned at the end of the shift.
• Drivers were required to use their own phones when contacting customers. The company also limited the number of pizzas that could be delivered to two per time, and some drivers folded boxes while waiting for deliveries, often at the request of the store manager.
• The contract envisaged that invoices would be prepared and submitted to Karshan by the drivers, but it was found that not all drivers prepared such invoices. Karshan would prepare invoices for many (but not all) of the drivers that would then be signed by the relevant driver.

The Appellant, the Revenue Commissioners, argued at all times that they were employees retained under contracts of service.

The dispute has a long history commencing with a TAC decision which held that the drivers were employees. This was upheld by the High Court but overturned by the Court of Appeal. The Court of Appeal was of the view that there was no mutuality of obligation between the drivers and Karshan and as such, they were independent contractors.

1. The mutual commitments had to present some type of continuity (“continuity”)
2. They had to have a forward-looking element (“extending into the future”)
3. There had to be an obligation on the part of the employer to “provide” work
4. There had to be an obligation on the part of the employee to “perform” work

Karshan argued that without mutuality of obligation, a contract of service could not exist.

The Supreme Court maintained that the mere fact that an individual does not owe any contractual obligation to an employer when they are not working, does not preclude a finding that the individual is an employee, at the times when he/she is working.

In the end, the Supreme Court dismissed the argument that an agreement cannot be classified as a contract of employment unless there is the mutuality of obligation outlined by Karshan. It stated that this reasoning relied on adding a new, arbitrary requirement to the employer-employee relationship that has no basis in principle and is not backed by authority.

In this decision, the Supreme Court primarily considered whether mutuality of duty is a necessary need for the establishment of an employment contract. The Supreme Court disagreed, confirming that mutuality of responsibility is a significant consideration for determining employment status rather than a necessary condition for the existence of an employment contract.

1. Does the contract involve the exchange of wage or other remuneration for work?
2. If so, is the agreement one where the worker agrees to provide their own services, and not those of a third party, to the employer?
3. If so, does the employer exercise sufficient control over the supposed employee to render the agreement one that is capable of being an employment agreement?
4. If requirements 1-3 are met, the decision maker must then determine whether the terms of the contract between employer and worker and the reality of the working arrangements are consistent with a contract of employment, or whether they point to some other form of contract.
5. Finally, it should be determined whether there is anything in the particular legislative regime under consideration that requires the court to adjust or supplement any of the foregoing.

The Supreme Court ruled that the evidence showed specifics of Karshan’s previously stated “close control” over the drivers while they were at work. Noting that there were some features of the activities carried out by the drivers that were consistent with their being independent contractors engaged in business on their own account.

The Supreme Court noted that the TAC was entitled to conclude that the evidence pointed to the drivers carrying on Karshan’s business rather than their own, and they were employees of the company for the purposes of the relevant provisions of TCA 1997, having regard to the satisfaction of the established tests.

This could be largely attributed to:

• the requirement for the drivers to provide notice of availability;
• the inability to freely provide a substitute in the event of an inability to work;
• the requirement for the drivers to wear the branded clothing of Karshan (furthering the promotion of its brand); and
• the lack of negotiating power held by the drivers in respect of their contracts.

Separate to updating of the Code, Revenue will shortly issue guidelines on the judgement and its impact on the employment status of individuals for tax purposes.

The Supreme Court’s revision and restatement of law on this topic provides clarity for businesses who wish to engage workers as independent contractors in the gig economy, reiterating the risk that these organisations may end up liable for payment of employment related taxes and social contributions, regardless of the wording included in a contract.

It is important that businesses which engage contractors review how each such arrangement operates in practice and ensure the relevant contracts reflect this reality.

• Enhancement of Revenue’s compliance framework.
• Diversion of resources and contacts away from compliant employers.
• Providing increased visibility and assurance to employees that their income is being reported Properly to Revenue.
• Provision of meaningful and effective high-level data to the Department of Finance.

In practice employers reimburse expenses, weekly, bi-weekly or monthly and small benefits may be provided on an ad-hoc basis. Revenue must be notified “on or before” any reportable item is provided to employees and directors which therefore creates a very onerous requirement for employers.

The date the payment is made, or the date the small benefit is provided to employees and directors is the relevant date for determining what reportable items are in scope.

1. Remote working allowance of €3.20 per day;
2. Small benefit exemption; and
3. Travel and subsistence.

Remote working allowance

The remote working allowance, of up to €3.20 per day, which employers can pay to employees for each day worked from home (subject to conditions).

Travel and subsistence

Payments by employers to employees to reimburse business related travel and subsistence costs including:

• Vouched travel and subsistence
• Unvouched travel and subsistence e.g. civil service mileage rates
• Country money
• Emergency travel
• Eating on site allowance

Small benefit exemption

Vouchers or benefits provided to employees that come within the ‘small benefit exemption’ regime i.e. currently, up to two small benefits each year that do not exceed an aggregate value of €1,000.

1. By file upload through ROS. The ROS ERR system can only accept JSON or XML file formats. Employers must ensure that their returns are in the correct format and that the files include all required data, to ensure the files upload to ROS successfully;
2. Manual entry of relevant details on ROS via the specific ERR portal; or
3. Using a software package that files directly to ROS e.g. an add-on to an existing payroll software or expense software.

• Engage with all relevant internal stakeholders so as to determine who is responsible for ERR filings.
• Review the data required for ERR submissions and determine how it can be extracted in an appropriate reporting format. In small organisations one person may hold all of the data required for ERR, however in larger organisations data may be managed by multiple teams outside of the payroll process, for example, by HR, finance or by a separate expenses team.
• Review where employee data is maintained. If reporting is done via payroll, then employee data required for ERR submissions should be held on payroll software. However, where reporting is done outside of the payroll process, employers need to put in place a mechanism to merge employee data with the other reportable ERR data.
• Review policies to ensure they align with tax legislation and Revenue guidance. Analyse data before Revenue does and consider whether any policy changes are required including any retrospective non-compliance which may need to be addressed via a self-correction or voluntary disclosure.
• Review controls in place to track all non-cash benefits provided to employees. Under the small benefit exemption, if more than two benefits are provided in a tax year, only the first two may qualify for exemption.
• Determine how reporting will be done i.e. via payroll software supplier, expenses software supplier or manually.
• Consider whether current expense payment timeframes need to be amended, for example, where an employer has an on-demand expense payment policy, it may be beneficial to change to a more structured process to reduce administration.

Are travel and subsistence paid directly by the employer to a third party in scope for ERR reporting?

Expenses paid directly by the employer to third parties e.g. hotels or travel provider, in relation to business travel expenses are not currently in scope for ERR reporting.

For a reporting requirement to arise under ERR in relation to travel and subsistence, the employer must reimburse the employee for the travel expenses incurred by the employee. Travel expenses incurred on company credit cards and settled by the employer are not in the scope of ERR reporting.

Do per diems fall under the reporting?

Yes. Daily allowances paid to employees (e.g. civil service subsistence rates) fall under travel and subsistence. They are therefore in-scope for ERR and are reportable.

Such expenses should be reported under the ‘Unvouched travel and subsistence’ category.

If travel expenses are reimbursed for a Director who is not paid a salary and hence not on payroll, does this fall within the scope of ERR reporting?

ERR applies to directors and employees. The payments of travel and subsistence paid to directors are reportable under ERR even where the director is not on payroll i.e. as no remuneration other than tax-free subsistence is paid.

Is a correction facility available for ERR submissions?

A correction facility is available if incorrect details are reported i.e. individual expense/benefit line items can be amended or deleted. Further details and examples of how specific corrections can be made are available on Revenue’s website.

Are receipts required when reporting ERR?

Receipts are not required as part of an ERR submission. However, employers are expected to keep robust records in support of non-taxable payments.

That administrative burden is only likely to increase in the future as Revenue have confirmed that ERR is just “phase one” of a phased introduction of additional reporting for employers so we can expect further items to fall within the scope of reporting in the future.

It is clear that the area of payroll tax compliance has become a key focus area for Revenue.

ERR will provide Revenue with increased visibility of non-taxable items being paid to employees on a real time basis along with data capable of being used for risk-profiling purposes and analysed by Revenue during the course of payroll tax compliance interventions. We are therefore likely to see more focused payroll interventions on these non-taxable items going forward.

• What are Virtual Asset Service Providers (VASPs) and why are they relevant for accountants?
• What are the main accounting challenges related to digital assets?
• What are the common questions and resources for accountants in the digital asset space?

• Exchange services between virtual assets and fiat currencies or between different types of virtual assets;
• Transfer services of virtual assets;
• Safekeeping or administration services of virtual assets or instruments enabling control over virtual assets;
• Participation in and provision of financial services related to an issuer’s offer or sale of a virtual asset.

VASPs are subject to various regulatory requirements in Ireland, as they fall under the scope of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021, which transposed the Fifth EU Money Laundering Directive (5MLD) into Irish law. VASPs are required to register with the Central Bank of Ireland and comply with anti-money laundering (AML) and Counter Financing of Terrorism (CFT) obligations, such as conducting customer due diligence, keeping records, reporting suspicious transactions, and implementing policies and procedures to prevent and detect money laundering and terrorist financing.

The regulatory space surrounding digital assets is evolving at pace. In mid-June 2024, we will see the first phase of the Markets in Crypto-Assets Regulation (MiCAR) become applicable. MiCAR introduces a new regulatory framework for European crypto-assets and aims to protect consumers and investors and mitigate risks to financial stability. While the Financial Action Task Force (FATF)defines service providers as VASPs, MiCAR will cover Asset-Referenced Tokens (ARTs), E-Money Tokens (EMTs) and utility tokens and will require Crypto-Asset Service Providers (CASPs) to achieve authorisation to operate within the EU.

Accountants may be providing professional services directly to VASPs. VASPs should also be considered as a good source of information when providing services to clients that invest or trade in digital assets. Accountants need to have an understanding of the services provided by VASPs and the financial and reporting information that they hold.

• Considering the tax implications of transactions involving virtual assets, such as how gains or losses from cryptocurrency transactions are treated for tax purposes and ensuring compliance with tax regulations;
• Tracking and reconciling financial transactions involving virtual assets and fiat currencies, to ensure accurate financial reporting for individuals or businesses engaged in cryptocurrency activities;
• Valuing virtual assets for financial reporting purposes, which can be complex due to factors like market volatility and liquidity. Accountants may need to stay updated on industry best practices for valuing cryptocurrencies and other virtual assets;
• Accounting for virtual assets as investments, which may require fair value measurement and impairment assessments. Some entities may hold virtual assets as investments, either for their own account or on behalf of their clients;
• Managing the risks associated with virtual assets, such as market risk, operational risk, and regulatory risk. Accountants may contribute to identifying, assessing, and mitigating these risks, using appropriate tools and frameworks.

1. Are gains from trading digital assets considered trading income or capital gains tax (CGT)?
2. How do I figure out where the client stands from a tax perspective?
3. Do I need an extensive knowledge of the crypto/digital asset space?

Trading Income or CGT?

According to the Office of the Revenue Commissioners, crypto assets are subject to income tax and CGT, depending on the type of transaction made. For example, if your clients trade crypto assets as part of their business, they will be subject to income tax at their marginal rate and may also have to pay social insurance contributions (PRSI) and universal social charge (USC). If your clients receive crypto assets as income, such as from mining, staking, airdrops, or rewards, they will also be subject to income tax.

If they sell or exchange crypto assets for a profit, they will be subject to CGT at a flat rate of 33%, after deducting any losses and the personal exemption amount of €1,270.

Some transactions are tax-free, such as buying crypto assets with EUR, holding them for long periods, or transferring them between your own wallets. However, you should keep records of all your crypto-asset transactions, as Revenue can track them and may require you to report them.

Determining Tax Positions

Determining the tax position and liabilities for your clients can be challenging, as they may have a considerable volume of trades across various crypto exchanges and wallets, and the value of the crypto assets may fluctuate significantly over time. Thankfully, there are service providers available that can help you with crypto-asset tracking and reporting, such as Koinly or CoinLedger. These services can trace and match every transaction on the blockchain and automatically calculate tax due, based on the Irish tax rules and rates. They can also generate tax reports and statements that you can use for filing and auditing purposes.

Crypto Wizard

You do not need to be an expert in the crypto/digital asset space, but you should have a basic understanding of the key concepts and principles, as well as the accounting and regulatory implications. You should also consult with your peers, mentors, or professional bodies for guidance and support.

• Buying crypto-assets with fiat currency, such as EUR, USD, or GBP, from a crypto exchange or a peer-to-peer platform;
• Selling crypto assets for fiat currency, either on a crypto exchange or directly to another person;
• Exchanging one type of crypto asset for another, such as swapping Bitcoin for Ethereum, or converting stablecoins to other cryptocurrencies;
• Receiving crypto assets as income, such as from mining, staking, airdrops, or rewards, or as payment for goods or services;
• Sending or receiving crypto assets as a gift, donation, or inheritance;
• Borrowing or lending crypto assets, such as using a crypto lending platform or a decentralised finance (DeFi) protocol;
• Investing in crypto assets, such as buying an NFT, a crypto fund, or a tokenised asset.

Crypto-asset transactions may not have a clear or consistent purpose or nature, as they may involve complex or innovative transactions, such as DeFi protocols, smart contracts, or tokenised assets, which may have different features, functions, and risks.

• The anonymity, pseudonymity, or lack of transparency of the transactions and parties involved, which may make it difficult to trace and verify the source and destination of the funds, the identity and location of the counterparties, and the purpose and nature of the transactions;
• The cross-border and decentralised nature of the crypto-asset ecosystem, which may expose your clients to different and inconsistent regulatory regimes and jurisdictions, and increase the complexity and uncertainty of the legal and compliance obligations;
• The technical complexity and innovation of the crypto-asset sector, may pose new challenges and threats to the security and integrity of the transactions and data and require constant adaptation and learning of the emerging trends and developments.

To manage the AML/CFT risks for your clients that deal in crypto-assets, you should apply a risk-based approach and take appropriate measures to mitigate the risks, such as:

• Conducting a thorough risk assessment of your clients and their crypto-asset activities, taking into account the type, value, frequency, and purpose of the transactions, the source and destination of the funds, the identity and location of the counterparties, and the level of compliance and oversight of the crypto-asset service providers involved;
• Verifying the identity and beneficial ownership of your clients and their counterparties, using reliable and independent sources of information, such as official documents, databases, or blockchain analysis tools;
• Monitoring and reviewing your clients’ crypto-asset transactions and activities on an ongoing basis, using appropriate tools and indicators to identify and flag any unusual or suspicious patterns or behaviours;
• Reporting any suspicious or unusual transactions or activities to the relevant authorities, such as the Financial Intelligence Unit (FIU) of Ireland, in accordance with the applicable laws and regulations;
• Keeping accurate and complete records of your clients’ crypto-asset transactions and activities, as well as the risk assessment and mitigation measures you have taken, for at least five years or longer if required by law or requested by the authorities;
• Educating yourself and your staff on the latest developments and trends in the crypto-asset sector, as well as the emerging risks and challenges, and updating your policies and procedures accordingly.

Compliance made easy with AML HQ

Our comprehensive platform includes all the tools accountants, bookkeepers, and tax advisory firms require to meet regulations and quickly onboard customers.

Get in touch or call our team on 01 485 3848 if you would like a free AML-health check or to learn more about how technology can help you meet your AML obligations.

AI offers vast potential to boost productivity and efficiency across various functions such as finance, procurement and supply chain, marketing, human resources, product development and design, risk management, manufacturing and operations, and customer engagement and sales.

To set the profession up for continued success, it is essential to understand the implications and opportunities AI presents.

With the growth in availability of data, and technological tools to transform data into useful information as well as meaningful insights for decision making, accountants can focus their attention on interpreting complex data, identifying the support that business operations need and tailoring internal and potentially external reporting for these purposes. Accountants who use these tools well will be more capable of supporting the business in making effective decisions across their organisations.

AI tools can process and analyze large data sets in real-time. This allows accountants to offer more sophisticated, value-added services. Predictive analytics, for instance, enables users to forecast future trends, identify potential risks, and provide strategic advice on financial planning and risk management. The profession is well placed to exploit these tools and embrace the benefits of this technology.

Internal and external reporting have historically had a focus on the past. While undoubtedly statutory obligations mean past results will always be important, there is necessity to act on current information and to utilize predictive tools to help gauge future possibilities through scenario analysis.

AI tools also offer great capability for tailoring advice, reporting and dashboards to the needs of organisations and clients. This can be a game-changer for small and medium-sized enterprises (SMEs) and small and medium-sized practices (SMPs).

Historically, such capability required either expensive in-house tool development or substantial admin time. In some ways, generative AI (in its freely available iterations at least) could therefore help level the playing field, as the ability to provide more nuanced, data-driven insights is increasingly becoming available to all, sometimes at little cost. At the same time, larger organisations will seek to exploit this technology through their ability to invest heavily in developing enterprise specific tools and through partnering with large organisations active in this space.

“Traditional” AI automates repetitive tasks and performs specific tasks intelligently based on a specific dataset – “pattern recognition”

• Classification – categorise input data into categories based on predetermined variables
• Prediction – Predict future events or outcomes based on historical data
• Optimization, trends/driver analysis, anomaly detection

Generative AI

• Generative AI assists in language-based tasks and creating content (text, images, music, computer code etc.) – “pattern creation”
• Summarisation/synthesis – generates summary of large volumes of text or other media
• Generation of content and translation
• Communication between a user and computer system
• Knowledge management – highlights information and insights embedded into all data types (docs, emails etc.)

• Automation of routine finance tasks – data entry, invoice processing, reconciliations
• Data analysis and forecasting
• Data modelling and scenario planning
• Market trend analysis
• Supply chain finance, optimizing working capital including through payment timing
• (Read more on how the digitalisation of procurement and supply chain operating models are changing the role of finance functions, see pages 10 – 12 of the IFAC report: Enabling purpose driven organizations)

• Tax planning through analysis of data against tax laws to identify potential savings and issues
• Evaluation of potential mergers, acquisition and other transactions through data analytics and broader assessments of strategic fit

For more examples and use cases of AI, click below

Accountants also play key roles as stewards of data and experts in processes and internal control, helping to ensure the reliability and accuracy of information.

Many professional accountants are already seeking training in data analysis and this pattern will likely grow in the future. Requirements in relation to computer literacy may experience similar growth and increasing specificity as AI literacy, prompt development and general technological adaptability become increasingly valuable.

Rapid advances in technology require a real commitment to continuous learning and adaptation from professionals, accounting firms and professional accountancy organisations. In many smaller organisations, individual accountants may be charged with ensuring the benefits of AI are being harnessed in their organisation, and this may be similar for practitioners in SMPs providing services for SMEs. This creates a responsibility to continually monitor and implement latest AI developments and best practice and interpret their implications for organisational processes. (Read more on The Uses of Artificial Intelligence for SMPs | IFAC).

The start of this journey to ongoing education is as much about developing a mindset open to innovation and change as it is about acquiring technological knowledge. Professional development programs will need enhanced focus on topics such as data interpretation, ethical AI usage and application of AI in strategic decision making. This is the only way AI can be leveraged effectively and responsibly.

There will be a high demand for capable talent. Technology companies, with their vast resources, may become greater competition when technological capacity becomes as important as financial expertise in the profession. The role of professional accountancy organisations will become increasingly important in this environment, as the development of requisite skills in-house will be imperative. Training programs and the education standards that underpin them will need to accommodate these future changes. Specialised AI and data analytics modules on accounting syllabuses or standalone courses will be a must. Considering the increased specialisation, it would not be unexpected to see closer collaboration or partnership with technology experts too.

• The initial costs of adoption, though freely available resources negate what the impact of entry cost might otherwise be. However, their use can be challenging as confidential data cannot be fed into free systems.
• Ongoing costs on implementation, including the costs of training staff and developing interfaces to use data effectively with these systems.
• Potential resistance to change in businesses and practices.
• Ethical considerations such as security and the risk of bias within learning models. Accountants will need to keep ethical principles in mind, using relevant guidance from the IESBA Code and its principles.

• Start small and scale up.
• Identify the “quick wins” – simple AI tools that can be incorporated into existing systems (e.g., tools such as Microsoft co-pilot) vs the more disruptive transformations.
• Obtain an in-depth understanding of the business and key end to end processes that could be streamlined using AI.
• Understand the business case – just because something can be automated, doesn’t mean it should be! Need to consider aspects such as speed, cost savings, and competitive differentiation.
• Prioritize key initiatives that will have the potential to create the most value.
• Develop use policies and procedures – protect company data.
• Accelerate internal capabilities to build talent and expertise needed.

As AI becomes more ingrained in the profession, new roles and specialisations may emerge. For instance, ‘AI in Accounting’ specialists or advisors can help bridge the gap between technical AI capabilities and strategic business applications. The relationship between AI and the accountant could shift from task automation support more towards strategic partnership. A system where AI provides real-time insights and accountants use their judgment and expertise to make informed decisions. This leaves great potential for both enhancing the efficiency and accuracy of accounting practices and opening opportunities for new innovative financial strategies and solutions.

The accountants of the future will be empowered to contribute significantly to business strategy and decision-making if AI technology is harnessed appropriately by the profession. A proactive approach to skills development and a readiness to embrace new technologies is needed now to foster the changes that will benefit future accountants. This provides exceptional opportunities for professional growth, improving retention and the profession’s attractiveness.

Card payments are here to stay. But when it comes to higher value transactions, open banking payments (Pay by Bank) have set a new standard for security by greatly reducing chargebacks. Studies indicate a 61 percent reduction in fraud by 2024, thanks to advanced encryption and real-time authentication through open banking APIs. Open banking is backed by the EU Payment Services Directive and is designed to ensure safe transactions.

For customers, they are empowered to selectively and securely share their financial information, without the fear of transaction typos or their sensitive data being misused. With open banking, they simply select their bank, log into their mobile banking app, and confirm the payment in a familiar setting.

1. Card-not-present Fraud

As e-commerce booms, card-not-present (CNP) fraud poses a huge financial threat to businesses. The projected global impact of CNP fraud is expected to reach $49 billion USD globally by 2030. Sensitive data is often obtained through data breaches or social engineering, like phishing.

To bolster defences against CNP fraud, businesses can adopt measures like 3D Secure, two-step authentication, and tokenization to protect card details. Tools such as address verification and IP geolocation identify suspicious activities. Maintaining clear transaction records and streamlining the playbook for tackling chargebacks is essential. Transparent communication of refund and return policies further strengthens overall security.

2. Phishing

Phishing is a social engineering attack designed to manipulate individuals into divulging sensitive information, including login credentials and card details. These attacks often imitate trustworthy entities such as banks or reputable online retailers, guiding victims to counterfeit websites in an attempt to pilfer personal information or introduce malware to devices.

Expanding beyond emails, phishing includes text messages (smishing) and social media (pharming). Vigilance is crucial — exercise caution with links from unknown sources, be wary of urgency, and regularly update your antivirus software. Stay informed and educate your team to effectively navigate the evolving landscape of phishing scams.

3. Digital Skimming

Digital skimming or e-skimming involves stealing personal data and payment information during online purchases. Criminals gain access to an online store’s source code or third-party tool through vulnerabilities, errors, or brute force.

They insert malware into the payment process, duplicating customer data. Data can be grabbed right away or stashed on the server for later use, flying under the radar.

Customers might not immediately realise that their card information has been stolen; from their perspective, their order is confirmed, and the item is on its way — no cause for suspicion.

In 2023 alone, over 119 million cards landed on the dark web, leading to an estimated $9.4 billion USD in preventable fraud losses for card issuers and $35 billion USD in potential chargeback fees for merchants and acquirers.

4. Chargebacks

Chargebacks occur when customers dispute valid transactions, often citing unauthorised purchases or non-receipt of products.

To minimise risks, businesses should adopt strong verification processes, fraud-detection tools, and clear refund policies. Detailed transaction records are essential when dealing with disputes related to chargebacks and refund fraud.

This reduces the risk of human error and fraud by making IBANs more ‘invisible’, and in turn more difficult for criminals to hack sensitive payment information.

Customers have more control over who has access to their personal data, and greater visibility on their transactions and account balance.

Businesses can enjoy safe, fast, hassle-free payments directly from their customers’ bank accounts with open banking. They can radically cut costs and protect margins, by significantly reducing high transaction fees, card fraud and chargebacks, and payment operation costs associated with time-consuming bank transfers, drafts, or cheques.

Fintechs today should offer merchants the flexibility to present open banking, card, and other payment methods depending on variables like geographic location, customer, purchase type, and value of the transaction.

According to a Prommt report, there’s been a significant increase in open banking adoption rates in just the past six months through payment orchestration, as clients benefit from increased fraud protection, substantial cost savings, and positive responses from their customers.

The report also found that while some sectors tend to have a high transaction value, the average transaction value (ATV) for an open banking payment (€4,679) is four times higher than the ATV for a card transaction (€1,147). This implies two things – card payments are not in any danger of disappearing, and open banking will continue to bring high-value transactions onto our platform. Automotive is shown as the top-performing industry for open banking transactions, with the highest single transaction value of €72,714.25, followed closely by Luxury Retail, Hospitality, and Hardware.

APP fraud involves fraudsters using social engineering tactics to deceive customers into approving payments from their accounts. The first half of 2023 saw losses amounting to £239.3 million GBP as a result of these scams. APP fraud falls under two broad categories:

• ‘Malicious payee’, where individuals may be tricked into buying goods that either don’t exist or are never received.
• ‘Malicious redirection’ occurs when a fraudster, posing as bank staff, convinces the victim to transfer funds from their bank account to the fraudster’s account.

Advanced fintechs can successfully mitigate APP fraud through stringent onboarding and month-on-month merchant checks (including IBAN checks), as well as clear and effective merchant-branded communication with payers. Payments are managed in the form of a payment conversation, attaching a high degree of context to every transaction. It is crucial that payers fully understand all the steps involved in securely completing a payment, who they are about to pay and why.

Criminals prey on payer vulnerabilities. Fintechs, merchants, payers, and public sector agencies need to understand the dynamic and multidimensional nature of remote payments fraud and work together to effectively fight it.

Curious to learn more about how Pay by Bank can help you? Get in touch – www.prommt.com

The Conferring Ceremony took place in the O’Reilly Hall UCD and here we welcomed Ireland’s newest Accountants. The ceremony was sponsored by JDM Insurance Services Limited. It was inspiring to see our newest members take to the stage to receive their qualification.

Congratulations to our newly qualified CPA Ireland members and to all our prize-winning students and a special thanks to our 2023 sponsors for their support.

An investment appraisal will continue to form a significant part of this paper. Practice on recent past questions and careful comparison with published solutions will allow students identify their weaknesses and correct basic errors.

In order to pass, candidates need to be able to apply their comprehensive technical knowledge in a previously unseen setting where they need to evaluate given investment opportunities.

The project appraisal process is as much an art as science, as such candidates are expected to clearly state any important assumptions that they are making (which of course do not contradict the provided information).