An article by the Economic Journal on the review of the project “IFRS Taxonomy” and the challenges of the Accounting sector of Rui Pedro Almeida, CEO of Moneris.
This article highlights the still way to go to the implementation of the new standards, as well as the difficulty of maintaining and attracting talent in an “increasingly globalized world.
Read here the article
In April 2014, the International Accounting Standards Board (IASB) set up a working group to develop a guide to implement an electronic financial statement report in accordance with the International Financial Reporting Standards (IFRS). In June 2019, the European Securities and Markets Authorities approved the European Single Electronic Format scheme “which aims to harmonise transparency rules in the preparation and disclosure of annual financial information”.
The changes will take place in two phases: the main financial statements from 1 January 2020 and the notes to the financial statements from 1 January 2022.
In other words, the IASB’s review of the “IFRS Taxonomy” project has created new rules that “all listed companies will have to prepare their annual financial report using updated electronic reporting systems or digital (in XTML or iXBRL format),” says Rui Almeida, CEO of Moneris.
The revision of the” IFRS Taxonomy” is “an important step towards an increasingly homogeneous presentation of the position and financial performance of European entities”, and will promote “the accessibility and comparability of financial statements”, he said.
“As such, [the review] is positive in promoting investment in companies in the European area,” says Rui Almeida.
But moneris’ CEO stresses that it “poses enormous challenges with regard to the disclosure model applicable to listed entities, and compliance with the so-called Single European Electronic Format is mandatory.”
“IFRS Taxonomy” is “part of an attempt to harmonise procedures at the reporting level of financial parts and the introduction of increasingly thorough control mechanisms”, which has contributed to the introduction of computer tools aimed at “the financial information as well as its validation.”
“the implementation of taxonomies was not carried out taking into account the typologies of all clients and the reality of some operations.” Consequently, the revision carried out by the IASB “will constitute additional work for accounting and outsourcing companies to adapt their final accounts so that the financial statements resulting from the application of the taxonomies are consistent and comparable with previous exercises”
Some consultants predict a less complex and challenging 2020 year for accountants because there will be no new legislative changes to have an impact on the sector.
“In 2020 there will be no changes, but there is still a learning job on the part of customers in the correct application of these new standards, being a challenge for the profession, sharing knowledge with customers, so that organizations start to interpret and implement these new standards correctly.
Certainly, several flaws will be identified in the interpretation and implementation of these new standards” says Baker Tilly’s managing partner, who drew attention to other challenges, such as “electronic billing, the introduction of documentary management, taxonomies associated with a more uniform accounting, are examples adding to the tax changes that are planned for next year.”
Rui Almeida, CEO of Moneris, points out that “the fact is that there is much to assimilate with these important and structuring changes made to the regulations.”
He continues: “As such, the implementation of changes to existing standards is expected to be less challenging in 2020 than those provided to us in the last two years.”
Accountant is little valued in Portugal
Right accounts. This is perhaps the first raison d’être of an accountant. At first glance, it may seem little, but it’s not.
Any company that is careful with accounting maps can take an accurate picture of the equity and financial situation at a certain point in time, which in turn allows holders of management or management positions to take the better decisions.
Invest in another fixed asset or not? Taking into account cash flows in a given month, what is the best time to pay for invoices for external supplies and services?
The right accounts allow you to answer these and so many other questions in the most relevant way to the company.
Only a company is not inseparable from the stakeholders around it.
The right accounts are to the liking of investors or financial partners who, before financing a company, analyze profit statements of results, at a time when corporate governance compliance activity has taken on an increasingly not only in business activity, in particular, but even in society, in general.
But this is only a static dimension of a profession that is constantly changing, which accompanies not only the evolution of economic reality, but also the development of new International Financial Reporting Standards (IFRS) that oblige accounting professionals to adapt to a new ‘game’.
One of the most current challenges that national accounting offices have to overcome is the maintenance and attraction of talent in an increasingly globalized world and where job opportunities abound abroad.
“It’s an increasingly difficult mission,” says Rui Almeida, CEO of Moneris.
Especially when, among the functions that will be priorities in the recruitment process in the near future in the services sector, are “the positions of accountant, management controller, internal auditor and financial manager”, explains the CEO of the consultant.
The national landscape can be an obstacle to the retention and attraction of Portuguese talent, which often emigrates in search of better working conditions and to feel more important in the organization.
Or, as Rui Almeida calls it, students who currently leave colleges “have a global thought and their willingness to work outside the country is now very high.”
One of the reasons that may explain the escape of talent abroad is the lack of appreciation for the professional of the sector in Portugal.
Paul André, of Baker Tilly, says that “looking at our business fabric, the secondary role that unfortunately is still given to the financial account by many organizations, particularly among the unlisted ones, makes it difficult to retain talent.”
The two managers have resorted to tools that allow, in some way, to mitigate the emigration of talent Portuguese abroad.