5 big challenges faced by Irish accounting firms today

5 big challenges faced by Irish accounting firms today

It’s an obvious fact that running an accounting firm is hard. Yet, for Irish Accounting firms specifically, there is a wide range of regular difficulties and challenges. Indeed, the Irish economy is relatively robust, however, that doesn’t mean everything’s fine. High rents and the cost of living with steady income growth have all negatively affected the funds of numerous Irish families as well as organizations. It has implied that prospective clients might not have the good cash flow that they used to have, and this can influence organizations significantly.

Shockingly, the financial support expected to run an organization has soared. Overhead expenses, insurances, property lease, and administrative compliance are currently significant points to worry about. Below we have talked about some challenges faced by Irish Accounting Firms in the present time.

The COVID-19 pandemic

Soon we forget the last year, the better it will be. Nobody might have anticipated how life in 2020 would change so radically, and with zero pandemic knowledge, the Irish economy is battling. 

In September the Irish government affirmed that the nation is facing recession, contracting by a record 6.1% in the second quarter of last year. 

Continuous lockdown, shortage of staff, remote working and many other things affected the productivity of small accounting firms in Ireland. Moreover, their clients started cancelling contracts in order to save some money. 

Brexit 

Many questions are still not answered around the UK’s takeoff from the EU and what it will mean for Irish business sectors. Not exclusively are rules and guidelines actually being worked out, however, issues related to funding are a migraine as well. 

Recently it was declared that Irish residents who decide to live in the UK will be considered as ‘settled’, so will have no residency or work grant necessities. They can likewise move openly between the two countries which include the Common Travel Area (CTA), similarly as UK residents.

Rise in Technology 

It is one of the biggest challenges faced by Irish Accounting firms. Advanced technology and Innovation proceeds to create new trends in the accounting industry. Machine learning and Data Analytics are major points of discussion among accountants. As per Flexera: 94% of accounting firms have started using cloud accounting. 

Also, with the rise in innovation, bookkeeping firms must protect themselves on the Internet. Cybercrime specifically will be a danger to bookkeeping firms, because of the touchy information that organizations have on customers, and steps must be taken to guarantee that there is adequate IT security set up to secure customers’ information.

Challenge of Automation 

As AI becomes further developed, the methodology of the work that accountants and bookkeepers perform will change. It is right to say that in five years’ time, most simple tasks that were frequently left to junior bookkeepers, like data entry, may turn out to be completely automated by accounting software.

There will probably consistently be a requirement for a certified accountant to investigate a client’s tax file or records, especially when an issue emerges that is different. Accountants are moving towards advisory roles.

Staff Shortages

For Irish Accounting SMEs, recruiting, preparing and keeping great employees can be a tough exercise. Frequently when they hire, the most brilliant, generally qualified and most determined colleagues don’t stay after some time as they’re enticed away by big contenders. With Brexit approaching, these firms may well lose more staff who presently need work licenses to remain.

Closing Note

Accountants have confronted numerous difficulties in recent years. Taking care of a small organization can be very tiresome and directors will in general have an enormous number of duties to deal with. With the rise in overhead costs, it has become more troublesome for these small firms to retain in the market. 

Outbooks is a leading accounting outsourcing company in Ireland that helps you in saving 60% of your overhead expenses. You can effortlessly provide your work to our certified accountants and expect great returns and accurate results. Get in touch with us at: 

+44 (0) 330 057 8597

info@outbooks.com

Also read: How To Find A Good Certified Bookkeeper In Ireland?

Accounting and Accounting rules in Ireland

Accounting and Accounting rules in Ireland

Accounting rules in Ireland :- The company law in Ireland states that the directors of companies incorporated in Ireland prepare financial statements for the company in respect of each financial year which gives a “true and clear view”. Such financial statements are either:

  • Companies Act financial statements: This is prepared in pursuant with the accounting and disclosure requirements of company law and, principally but not exclusively*, with the Financial Reporting Standards (FRSs) published by the Financial Reporting Council (FRC) in the UK (‘Irish and the UK GAAP’); or
  • IFRS financial statements: This is prepared in accordance with the International Financial Reporting Standards published by the International Accounting Standards Board (IASB), as adopted by the European Union.

 

Under Irish company law, there are certain entities that are permitted to prepare their Companies Act financial statements under a financial reporting framework based on accounting standards other than those issued by the FRC.  Specifically, and subject to certain conditions:

  • In accordance with section 279 of the Companies Act 2014, pertinent holding companies are permitted to prepare ‘Companies Act entity financial statements’ and/or ‘Companies Act group financial statements’ in agreement with US GAAP, as modified to ensure consistency with the Irish company law.
  • Investment companies subject to Part 24 of the Companies Act 2014 or the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 may adopt an alternative body of accounting standards, which are applied in the United States of America, Canada or Japan in preparing ‘Companies Act entity or group financial statements’ or ‘Companies Act entity financial statements’ respectively.

Accounting Regulation Bodies | Accounting rules in Ireland

Its permitted clause (section 8 of the Act), functions (section 9 of the Act) and powers (section 10 of the Act), the Authority’s principal goals are:

  • To support and boost public confidence in the accountancy profession through effective, independent supervision and, where appropriate, statutory Enquiry and Investigation;
  • To embrace and enhance public confidence in financial reporting through the exercise of efficient, independent supervision and proper enforcement action.
  • To reinforce and enhance public belief in the accountancy profession and in financial reporting through the promotion of adherence to high professional standards and the provision of high-quality advice to the Minister; and
  • To provide a consistently high standard of service to all stakeholders.

 

TAX YEAR

The first financial year of a company is the period beginning with the date of its incorporation and ending on a date no more than 18 months after that date. The next following financial year continues for 12 months by default plus or minus seven days as the directors may determine.

Publication Requirements

Irish law states that all companies need to prepare an annual audited financial statement which complies with IFRS Standards, with an audit which exempted for dormant companies, companies limited by guarantee, unlimited companies and companies which have specific size criteria. The financial statements that are audited must be approved within nine months of the company’s year-end. The companies need not necessarily use the calendar year. Once approved, financial statements of companies with limited liability status must be filed with the Companies Office, where they are available to the public. Companies who have unlimited status are not required to file their accounts in some circumstances.

 

Certification and Auditing

In Ireland, the Irish Auditing and Accounting Supervisory Authority (IAASA) is the regulatory body that oversees statutory auditors and audit firms. The approval and registration of accountants is entrusted to the Recognised Accountancy Bodies (RABs) under IAASA’s supervision.