Trinity Business School
Dublin
1 June 2023
Opening remarks
Good morning, everyone - it is a privilege to be here with you today.
Thank you to ACCA Ireland for inviting me to address you this morning. I would like to thank Stephen Doyle and Stephen Noonan for your introduction and welcome.
I understand that today’s conference is the first ever ACCA Ireland Conference. So, this is a very important day for you all.
I know you have a full agenda today and will cover a lot of ground, addressing important topics for the audit and accountancy profession and the challenges and opportunities that it currently faces.
As professionals, you are all busy people and so I want to commend you on taking time out of your businesses today to meet face to face and talk about your profession collectively.
It really is heartening to see so many of you here for what I am sure will be a good day’s discussion and networking.
Ireland’s economy
I just want to take a moment to take stock of where we, as a country are today.
I can confidently say our economy is robust and growing. This is a considerable accomplishment given the challenges Ireland has faced in recent years, including Brexit, the pandemic, the war in Ukraine and global inflationary pressures.
It is a testament to the hard work and remarkable resilience of Irish enterprise.
There are more people at work now than ever before, with the monthly unemployment rate standing at just 3.9% in April.
Ireland, as a leading global business hub, is at the very heart of European and global enterprise.
We have a steady and competitive tax offering, political stability, a strong track record and a pro-business environment.
And as a Government we will continue to work with enterprise to grow the economy, boost our reputation and strive for a better Ireland for all.
Importance of the accountancy profession
All of you here in this room today, in your own way play a significant part in supporting enterprises to flourish all around the country from SMEs to MNCs.
Accounting professionals have an important role as navigators for businesses, not simply to comply with new regulatory asks or deal with challenges but also to drive awareness of new opportunities to guide businesses to stabilise, grow and scale.
And of course, central to our economy is the bedrock of regulation.
Importance of regulation
I want to emphasise how important the auditing and accounting profession is to Ireland’s economy and to this Government’s goal of not just creating but maintaining high standards of regulation.
Working with IAASA, the profession is key to ensuring high quality corporate reporting and audit in Ireland which earns public trust and confidence.
My Department’s recently published White Paper on Enterprise outlines the importance of regulation.
A well- functioning regulatory environment is an essential foundation for a competitive and productive economy.
Our corporate and regulatory framework must be flexible, responsive and reflect international best practice.
Businesses are now operating in an increasingly digital environment and our regulation must take account of how modern business is conducted.
A fit for purpose company law framework is an essential part of doing business in Ireland.
The Companies Act 2014 was a landmark legislative project, the result of many years of work.
It provides business certainty, enables entrepreneurs to take appropriate risks, supports the growth of enterprises, and assists in job creation.
It also serves to protect employees, company members, creditors, and consumers by establishing relevant and appropriate safeguards.
Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2023
Company law is dynamic and having established a world-class company law code in the Companies Act 2014 we endeavour to regularly review it.
I know that many of you here today have aired your views on the Act through your professional networks and the Company Law Review Group.
And I have listened to those views, and they are being taken into consideration in the preparation of the forthcoming Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill.
We have engaged with our many stakeholders including the Company Law Review Group on which the CCCAB- I (Consultative Committee of Accountancy Bodies – Ireland) is represented.
Additionally, I launched a public consultation in May which will close on 9th June – so there is another week left. I would urge you all to take this opportunity to engage with this important consultation.
I have set out the Bill to include provisions on four areas of company law, three of which I will refer.
- corporate governance
- company law enforcement
- company law administration
- corporate insolvency
Corporate governance - virtual meetings
As I mentioned previously it is really an achievement to bring everyone here today and for all of you to make that commitment of time.
The pandemic forced us to adopt new behaviours to allow us to continue to do business and it certainly accelerated our digital ambitions.
I think we all appreciate a little more, the opportunities we get to come together in person at events such as today’s conference.
But I think you would all agree that we need to work in a more agile manner than before that allows for a hybrid model – combining face to face and technology.
And so, aligned to that I am now proposing to build on legislation introduced during the pandemic to provide, on a permanent basis for the option to hold fully virtual or hybrid meetings.
Again, your views on how this has worked for you to date and how it might work in the future are most welcome through the public consultation process.
Company law enforcement and supervision
Corporate enforcement
Now moving to corporate enforcement.
This Government is serious about tackling so called “white collar crime” and corruption.
It has the potential to damage the economy and our international reputation.
I and the rest of Government fully support the valuable work of the newly established Corporate Enforcement Authority.
The CEA is competently stewarded by Ian Drennan who I know will address you later.
A well-stocked enforcement toolbox is vital to ensuring the CEA can meet the challenges it faces in its investigation and prosecution of alleged breaches of company law.
Audit exemption regime
From speaking to many of you and the businesses you work with, up and down the country, the importance of the audit exemption to small and micro business is clear.
Before I discuss any proposed changes, I want to first highlight the importance of on- time filing of annual returns as an aspect of company law.
The availability of timely financial information provides significant protection for stakeholders including company member, employees and third parties doing business with the company.
However, I am very cognisant that the loss of audit exemption can have a significant impact on small and micro-sized companies.
Which is why I am bringing forward a proposal to change the current legislation, which is to introduce a two-step, graduated regime.
Where a small or micro company is late in filing its annual return, it will not automatically lose its audit exemption. Rather, it will incur a late filing fee.
If, however, within 5 years of the first late filing, the company is again late in making its returns, then the company will incur a late filing fee and will be required to submit audited accounts for the subsequent two-year period.
Corporate insolvency
And finally under the area of corporate insolvency, you will be aware that the Companies Act underpins Ireland’s robust and flexible corporate recovery and insolvency framework.
It provides a clear restructuring framework for companies and the rights of employees.
The State’s corporate rescue toolkit was further expanded recently with the introduction of the Small Companies Administrative Rescue Process (SCARP).
My Department is continuing to monitor the insolvency environment and will continue to develop and adapt to ensure our corporate insolvency regime remains flexible and sophisticated.
Deriving, in part, from the feedback we receive on the public consultation, the new Bill will provide for amendments to improve the operation of SCARP.
Forthcoming Directive - Corporate Social Responsibility Directive CSRD
As you will be aware there is a vital need for all of us on an individual and a collective basis to step up and address the global climate crisis.
The current Programme for Government sets out how important the coming years are to address the climate change and biodiversity crisis facing Ireland and the world.
Ambitious climate action goals have been set at international level, such as in the Paris Agreement, at EU level, in particular in the EU Green Deal and nationally through the Climate Action and Low Carbon Development Act.
A key role in the coming years for the accounting and audit profession will be in the context of the global reframing of corporate reporting to include sustainability reporting.
My Department is leading on the transposition of the Corporate Sustainability Reporting Directive which is the EU’s response to this reframing.
It aims to put sustainability reporting on a par with financial reporting to better inform investors and other stakeholders of companies’ performance on environmental, social and governance matters.
This information will allow investors, consumers, policy makers and other stakeholders to make choices based on the performance of companies on these matters.
The new requirements are sequenced to allow companies time to understand the new EU sustainability reporting standards and start measuring the data.
Similarly, the accounting and audit profession will have some time to deepen the knowledge and skills necessary to prepare and audit the reports.
My Department has already held several webinars on the subject. I intend to brief stakeholders again this Summer on both the standards and the policy approach to the transposition of the new rules.
I understand that ACCA globally has taken on a leadership role in examining and addressing some of the key issues relating to sustainability reporting including research and education of its members.
I hope to continue to hear feedback and experience of stakeholders like the ACCA and its members, to ensure that Ireland develops the best possible approach to targeted actions to drive change and support companies in their climate action.
Closing remarks
As I leave you this morning I would kindly ask that you take the time to share your views in the public consultation if you haven’t already – only by working together can we ensure that we have a fit for purpose regulation framework that we can all commit to.
And secondly, I’d ask you all to consider as you engage in the day’s discussions about the role you play or could play, both individually and collectively, in ensuring that Ireland continues to be a best-in-class global business hub ensuring Ireland’s future competitiveness, sustainability and growth.
There are complex global challenges ahead of us and business will need the accounting and audit profession to provide leadership and guidance.
Thank you again to Stephen Doyle and Stephen Noonan and all the team in Ireland and globally in ACCA for inviting me and putting together this excellent programme.
I hope you enjoy the conference and find it informative and inspiring.
Go raibh míle maith agaibh go léir.