You may have noticed your Accountant ageing considerably in the past year or so. The reason for the accelerated greyness, baldness or wrinkled face is the quantum of changes in regulation and compliance in the past 12 to 18 months. It has been relentless and the ultimate irony is that the main source of distress had been the delayed passing of the yet further legislation - The Company (Accounting) Act 2017. There’s been so much to deal with over the past year or so one would think we would welcome a delay in more legislation and ordinarily we would, but this legislation was more crucial than most of what went before it and finally filled a void which has been exercising Accountants for the past year.

Luca Pacioli is widely regarded as the Father of Accountancy, with the publication of the first ever book on Double Entry Accounting in 1494. In over 500 years accounting hasn’t changed much it’s still debit and credit as the foundation stone for all accounting frameworks. EU Directive 2013/34 was to bring about a significant enough change in the presentation of Accounts and the transition of that into Irish Law through the Company (Accounting) Act 2017. It is aimed at simplifying Accounts and making them more appropriate for the size of the entity on which you are reporting. Quite straight forward in theory but in practice this somewhat simple task has become quite complicated and onerous, with the majority of the frustration experienced by Accountants being the delay in bringing that legislation into place.

The Companies Act 2014 discontinued the use of Financial Reporting Standards for Small Entities pretty much after Dec’15 year end Accounts were completed. For small companies this left the Accountant needing to use International Accounting Standards or Financial Reporting Standard 102 both of which are wholly unsuitable, as the only Accounting Framework available to prepare Dec’16 year ends until the eventual passing of the Companies (Accounting) Act 2017 in June of this year.

It’s fair to say the absence of an appropriate accounting framework over the first 6 months of 2017 has been frustrating for Accountants in Practice and the next 6 months will be equally so as we navigate through the various nuances of the legislation. Individually and collectively through the Institutes we had been lobbying the politicians for the urgent enactment of the legislation since the middle of 2016 when the previous accounting framework was discontinued, to little or no avail. Our then Minister for Jobs Enterprise & Innovation saw no urgency in leaving one piece of legislation fall away and not replace it with an appropriate alternative for close on a year and many have questioned a  political system for appointing a person with limited business and economic experience  to an important economic portfolio such as Jobs Enterprise and Innovation. Quite simply, the impact on our profession or more importantly on our clients businesses which, by and large are the SME sector, was not given any sense of priority or urgency. Thankfully the legislation was finally put through in early June.

The Company (Accounting) Act 2017 in tandem with Companies Act 2014 and Companies Amendment Act 2017, not to mention additional powers granted to the Revenue Commissioners are all outcomes of various reports into financial and monitory shortcomings or wrong doings in the past and ultimately should be welcomed and embraced as we mature as a business society. As with nearly all evolving legislation the sanctions for non-compliance are significant and will be applied with greater vigour by the organs of the state tasked with applying those standards which is ultimately rightly so and difficult to argue with. Compliance costs will inevitably rise, as we enter a new era of a greater compliance burden on you as a Business Owner or Director and on us as Accountants and Advisors.