Contributors

Contributors to this issue

Negotiating uncertain terrains

Angela Partington Editor, IA

Since the last issue of International Accountant, we have lived through yet another turbulent time of change – and are now learning to live with our second prime minister, third home secretary, and fourth chancellor this year. The Autumn Statement on 17 November, made by the latest chancellor Jeremy Hunt, struck a markedly different tone to that of his predecessor. He is attempting to reduce the national deficit by a combination of cutting public spending and raising taxes – partly by freezing tax thresholds to pull more people into the tax system. Accountants have never had to negotiate a more uncertain terrain than they have in 2022. Read more about the Autumn Statement on page 12.

Inflation is a growing problem, and companies must learn to adjust to its impact on business performance. Peter Caudill asks how businesses can offset the effects of inflation by using AI-based scenario planning, exploring methods including business partnering, predictive planning technology, and sensitivity planning (see page 9).

Certainly, the need for thorough and stringent auditing is clear – and the profession must improve levels of confidence in its findings. On page 26, Steve Collings sets out the different types of audit opinion and levels of assurance, including modified and unmodified opinions, and examines what we can do to narrow the expectations gap and restore public trust in our findings. David Potts sets out the importance of client due diligence and the crucial steps of verification, checks for suspicious activity and discrepancy reporting (see page 22).

Another reflection of our times can be found in Richard Simms’ article on company liquidation (see page 20). Economists from Goldman Sachs have predicted that UK inflation could top 20% as recession looms and fuel prices spiral. But liquidation is not always the inevitable answer for struggling businesses, and there are solutions available to firms in distress. Informal arrangements with creditors can allow businesses to repay debts within mutually agreed terms. Creditors’ Voluntary Arrangements, which mean compromise from creditors in return for payment from future profits, can provide a sustainable business with the breathing space it needs to stabilise. And administration is a way of protecting a struggling business from legal action.

However, there is room for some positivity and a forward looking approach to the benefits that accountancy can bring. On page 16, Peter Ellington proposes ten ways in which accountants can save the world by placing a value on natural and social capitals, in addition to our current reliance on monetary capital. For organisations to succeed and survive, he argues, accountants must measure the use and protection of all three capitals, and he aims to stimulate critical thinking about our over-reliance on traditional views of wealth.

TIM CAUDILL

Tim Caudill is Director of Solution Advisory at Jedox, Inc. and has over two decades of domain expertise primarily focusing on financial software implementation, as well as leading corporate finance teams. .

STEVE COLLINGS

Steve Collings, FMAAT FCCA is the audit and technical partner at Leavitt Walmsley Associates Ltd, where he trained and qualified. Steve qualified as a Chartered Certified Accountant in 2005. .

PETER ELLINGTON

Peter Ellington is CEO and Founder of Triple Bottom Line Accounting, a UK based digital practice providing a range of services to SMEs, including accounting, sustainability and financial control. He is Associate Professor at Norwich Business School at the University of East Anglia.

DAVID POTTS

David Potts is director of operations at the AIA, and is responsible for maintaining AIA’s international recognition and implementing the professional body’s regulatory strategies and annual review cycle.

RICHARD SIMMS

Richard Simms is the managing director of FA Simms & Partners. Much of his time is spent advising clients with regards to financial problem resolution.