The ICAS public voice: Accountability post-Covid
Throughout 2021, ICAS has continued to inform public debate and policy making. Here, we summarise some of this important work.
As we begin to emerge from Covid-19, a number of key strands are at the forefront of the public policy work undertaken by ICAS.
- Reforming the corporate ecosystem.
- Tomorrow’s tax administration.
- Sustainability goals and accountability.
ICAS has a public interest remit, a duty to act not solely for its Members but for the wider good. From a public interest perspective, our role is to share insights, shaped and informed by the views of ICAS Members into the many complex issues and decisions involved, for example:
- In tax and financial system design, and to point out operational practicalities.
- In developing high-quality financial reporting standards for entities – from large corporates to smaller not-for-profit entities, including charities.
Reforming the corporate ecosystem
In early 2021 ‘Recalibrating the corporate ecosystem’ was published by ICAS which set out a vision for the future and identified key areas to be addressed to restore trust. This will be essential if we are to deliver a respected corporate and regulatory framework that will support a sustainable economic growth. A roadmap for a future Corporate Auditor Profession has also been published setting out how Sir Donald Brydon’s recommendations could be implemented in practice.
‘Restoring trust in audit and corporate governance: proposals on reforms’ have been discussed in a webinar in which FRC Chief Executive, Sir Jon Thompson, was interviewed, in front of an audience of key stakeholders from across the globe. ICAS has since submitted its formal response to the consultation, highlighting key themes to the government, which have emerged over the consultation period. These are:
- Global alignment: proper consideration needs to be given to the international consequences of any changes that are introduced.
- Focus on the key priority areas: to deliver much needed change in a proportionate and timely manner.
- Certain reforms will require further consultation: it is imperative that all proposals taken forward following the consultation process are subject to appropriate due process before being finalised, or further consultation if required.
- Resources: the proposed changes will require considerable additional resources across all aspects of the corporate ecosystem – including ARGA.
As well as contributing to the UK debate on audit reform and corporate governance, ICAS also works with fellow accountancy bodies in the Global Accounting Alliance, and with other external bodies such as the International Federation of Accountants (IFAC) and Accountancy Europe. The audit debate extends beyond the UK and ICAS seeks to inform and influence it.
Professional ethics are also important to any professional accountant but are crucial at a time when behaviours may be tested, such as in the pandemic. ICAS, as a leading professional body that sets the tone in professional ethics, is pleased that its Director of Policy is the Technical Adviser to the UK CCAB member of the International Ethics Standards Board for Accountants (IESBA). ICAS also held a very successful joint virtual event with the Chartered Professional Accountants of Canada and IFAC on the subject of Ethical Leadership in an Era of Complexity and Digital Change. The first in a series of publications from that event ‘Complexity and the professional accountant: Practical guidance for ethical decision-making’ was published recently.
ICAS revised its Code of Ethics to highlight the importance of respecting values of equality, diversity and inclusion (EDI) and this came into effect from 1 January 2021. ICAS is the first professional accountancy body to expressly incorporate EDI into our Code of Ethics.
Tomorrow’s tax administration
ICAS plays its part in tax across the whole of the UK. ICAS contributes to the development of UK tax policy and tax administration and, being headquartered in Edinburgh, also takes a leading role on Scottish taxes.
Policy reform - UK tax administration
The Covid-19 pandemic has highlighted which parts of the tax system are working well and the benefits of (more or less) real time PAYE data. It’s also highlighted which parts require improvement, such as the tax processes for the self-employed, and a desire to maximise the benefits of a digital world.
There is an appetite in government to drive this forward; hence, there have been a number of calls for evidence about how to modernise tax administration. In response, ICAS has had three strands to its work:
- ICAS has urged the UK Government to improve tax administration in ten key areas in our report, Tomorrow's Tax Administration. We call for basic tax administration which works properly for everyone who has to engage with it, increased resources for HMRC, and funding to tackle patchy digital systems.
- We have responded to a series of HMRC Calls for Evidence on tax administrative matters – Tax Administration Framework Review, Timely Payment and Basis Periods – which are summarised in our commentary ‘Tax Administration – where’s it going?’
- We continue to engage with HMRC about service standards for agents and taxpayers and assessed HMRC’s performance against the standards in the HMRC Charter.
Effective tax administration is essential to collect revenues and to enhance public support and trust – one reminder from the pandemic is that if monies are needed to provide support during a national emergency, taxes also need to be paid into the system to fund that support.
Policy reform – Building a better tax system in Scotland
ICAS, along with the Chartered Institute of Taxation (CIOT), issued Building a Better Tax System and we continue to engage with the relevant Scottish institutions to input to the Scottish Government’s tax policy framework programme.
In addition, ICAS has published an updated version of the ICAS Guide to Scottish Taxes, a concise introductory guide to the different taxes that can be raised in Scotland.
COP26 takes place in 2021 in Glasgow. ICAS will play its part in increasing awareness pertaining to environmental and other sustainability issues and to actively promoting the contribution of chartered accountants to this vital agenda. And we’ll do this in Scotland, the UK, and beyond.
For example, ICAS is leading a working group within Chartered Accountants Worldwide on Climate Change in the runup to COP26, and beyond, to help galvanise the profession globally to tackle the issue of climate change. ICAS is also a member of the UK Government’s Green Taxonomy and Sustainability Standards Stakeholder Group which has been established to inform and shape the development of a UK Green Taxonomy.
We’re also delighted to team up with Chartered Accountants Ireland and ICAEW to celebrate our Members leading the way in the Race to Net Zero. With COP26 approaching the race is now on for all governments and organisations, to demonstrate the urgency with which they are tackling the issue of climate change.
BEIS held a consultation on mandatory climate-related financial disclosures for publicly quoted companies, large private companies and LLPs, to which ICAS contributed.
Sustainability has also become a key issue for global standard setters and ICAS responded to the IFRS Foundation consultation on the need for global sustainability reporting standards and the role of the IFRS Foundation in the development of such standards.
Sustainability is a key thought leadership theme for ICAS, and there are some new initiatives in the pipeline for late 2021, and 2022.
Business policy and guidance
Despite the immediate demands of coronavirus and the need to support the economy during fragile times, our policy teams also continue to issue guidance for both members and, in light of the ICAS public interest remit, for the wider business community. The ICAS business start-up guide is a visual and user-friendly publication designed to help aspiring business people on the way to setting up and running a successful company.
The guide has been prepared by ICAS Members with a breadth of entrepreneurial and business experience, including investors, entrepreneurs and directors. It aims to help those committed to starting their own enterprise with tips on:
- Sourcing advice, support and mentoring
- Preparing a business plan
- Identifying appropriate funding and increasing your chances of getting it
- Accessing further business start-up resources and guidance.
We commend the guide to you, along with other guidance and information on corporate governance.
Returning to the subject of the pandemic, ICAS continues to bring the practical experience of its members to the relevant authorities to help fine tune the operational and compliance features of the coronavirus support schemes such as CJRS and SEISS. There are also helpful guides available for Members and their clients that point to a range of information and guidance; for example those for charities and their advisers.
For further information, to discuss our work, or to join our member committees – contact ICAS at email@example.com.