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International Accountant Magazine

International Accountant magazine contains specific content tailored to the needs of AIA members and students. As an exclusive benefit to AIA members receive a hardcopy of the magazine, which provides technical updates, best practice and guidance for accounting professionals, supporting them in their work.

A selection of featured articles from the publication are available below. 

Ethics: Making the World a Better Place

International Accountant - Issue 132

Christopher Cowton, Emeritus Professor, University of Huddersfield, explains how you can make it easier to comply with
the Code of Ethics by being an ethics influencer at your place of work.

One of the marks of a profession such as accountancy is that it has a remit to make the world a better place. Perhaps you don’t often think of your work in this way, but as a professional body, the AIA requires that you act in the public interest and thereby build trust in the profession.

On a day-to-day basis, this remit is achieved by using your professional judgement and skills in accordance with the five fundamental principles on which the Code of Ethics is based (see The five fundamental principles of the Code of Ethics). A by-product of this is that, as well as upholding the reputation of the profession, you will also be setting a good example to colleagues.

Most of the time, this is all reasonably straightforward. However, the Code of Ethics recognises that following the fundamental principles isn’t always easy. This is implied by the Code’s conceptual framework, which states that you need to be alert to threats to compliance with the fundamental principles. Section 120.6 A3 of the Code identifies five categories of threat: self-interest; self-review; advocacy; familiarity; and intimidation.

Read the full article here

Greenhouse Gas Emissions: Accounting for 'Scope 3' Carbon Emissions

International Accountant - Issue 131

Eddie Herbert (Net Zero Now) explains 'Scope 3' carbon emissions, or how accountants can make a real difference to our planet, one balance sheet at a time.

With climate change a growing concern worldwide, all businesses are under increasing pressure to reduce their greenhouse gas emissions. However, the majority of companies overlook their greatest source of emissions – those that go by the name
of ‘Scope 3’.

As trusted advisors with extensive financial and operational insights, accountants are well‑positioned to help clients accurately measure
and reduce these ‘hidden’ emissions across their value chains. By mastering the complex arena of Scope 3, accountants can play a leading strategic role in accelerating the emissions reductions needed globally.

Read the full article here

Small and Medium Practices: New Horizons for a Thriving Future

International Accountant - Issue 130

Monica Foerster, Chair IFAC Small and Medium Practices Advisory Group, examines the ever broadening horizons for the accountancy profession and how they can build a base for a thriving future.

Organisations of all sizes today find themselves in a fast paced, uncertain, complex and rapidly changing world. This undoubtedly creates challenges, but such challenges may lead to opportunities for professional accountants and accounting practices of all sizes if they can harness the knowledge and skills needed to help support organisations and clients as they navigate unprecedented environments.

Read the full article here

Digitisation: The Human Firm

International Accountant - Issue 129

Will Farnell (Founder and director, Farnell Clarke) examines how digitalisation can provide the foundations for the evolution of accountancy firms, so that we can offer a unique offering to the clients.

We are a profession in a rapid period of flux, change, challenge and opportunity, in a digital world that is impacting our lives in all sorts of ways. We are also witnessing technology shifting into areas that risk dehumanising us. In a people business like accountancy, what does this mean for us as firm owners, our clients and our teams?

I am sure many of you will have heard the term ‘a digital firm’ or ‘a digitised firm’. What do these terms mean to you? Like other buzz words we hear in our profession, the likelihood is that they mean different things to everyone. I am perhaps better placed than many to attempt to define at least one of these terms, having written a book in 2018 titled ‘The Digital Firm’. This book aimed to be a blueprint for accountants and bookkeepers who wanted to better utilise technology in their business. I defined my view of the digital firm as:

‘A firm that utilises a blend of digital technology and digitally aware staff to deliver first class client services efficiently and effectively through maximum level of automation.’

This definition can be broken down. Firstly, it is no good using great technology if you have staff who won’t use it, can’t use or don’t want to use it. We must bring our people on the journey with us. The second point is that we must use technology to deliver the best possible experiences for our clients. Finally, if we blend people, process and technology in the right way, we will generate efficiency and effectiveness and find ways to automate more of what we do.

That’s all fine, of course, and explains the ‘what’. But what about the ‘why’? Why should we be interested in building a digital firm?

Read the full article here

Professional Conduct: Giving Advice to Clients

International Accountant - Issue 128

How confident are you when it comes to giving advice to clients? Do you think you are more or less confident than fellow members of the AIA? There are generally three approaches here: you could be professional, you could be naive or you could be arrogant. You could also be all three (or any combination).

Mark Lee (Tax Advice Network) explains this and moves on to consider the importance of professional standards when it comes to giving tax advice so as to avoid professional negligence claims.

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Equality, Diversity and Inclusion: A Vital Issue for Us All

International Accountant - Issue 127

What has equality, diversity and inclusion got to do with you? All the research and evidence that is produced by academics and other researchers shows that we still have not grasped the value that having diversity in all aspects of business brings.

Ranjana Bell MBE (rba Equality and Diversity) asks how diversity affects both you and your business, how we can build a more inclusive community, and what we can learn from geese.

Read the full article here

Financial Planning and Analysis: A Lighthouse in the Storm

International Accountant - Issue 126

Global inflation has its grip on the world economy as organisations learn to adjust to its impact on business performance. Fast action and decisiveness are in order to remain afloat among geopolitical tensions, the resulting supply chain disruption and increasing market uncertainty. It is an interesting time to be an accountant today - a role that can be a lighthouse in the storm.

The financial planning and analysis (FP&A) landscape has notably changed over the last few years due to many challenges, including a global pandemic, energy crises, climate change, cyberattacks and remote work. In addition, a rapid rise in prices and interest rates that began in 2022 has continued to garner international concern and action. In many countries, inflation has reached 40 year highs, and energy and food prices have seen the biggest price increases.

In the United Kingdom specifically, inflation reached double digits by September 2022. In mid-October, Prime Minister Liz Truss resigned after just six weeks in office amongst market turmoil and a failed tax-cutting budget. Meanwhile, the consumer market continues to react, with the Consumer Prices Index (CPR) surging to 10.1% within a 12 month span from last September. A large price increase in food and non-alcoholic beverages, as well as furniture and household goods, contributed to this surge. These numbers indicate that the cost of living and covering basic needs have consumers tightening their wallets for other purchases.

What does this mean for business? And what can organisations do to offset this trend?

Read the full article here

SMPs and the Sustainability Agenda

International Accountant - Issue 125

Sustainability is not just about the environment. The UN Sustainable Development Goals define sustainability as 'a commitment to eradicate poverty and achieve a sustainable world by 2023 and beyond, with human wellbeing and a healthy planet at its core'.

Sustainable development is a core principle of the Treaty on European Union. It is also a priority objective for the Union's core policies.

Small and medium-sized enterprises (SMEs) collectively account for a significant, if not majority, share of environmental and social impacts by private sector business. Consequently, SMEs, and the small and medium-sized accountancy practices (SMPs) that provide professional services to them, stand to play a vital role in making economies worldwide sustainable.

In this article, Salvador Marin (President, EFAA) and Paul Thompson (Director, EFAA) examine the role of SMPs in relation to the sustainability agenda and the implications in terms of capacity and competition. They then look at how the European Federation of Accountants and Auditors for SMEs (EFAA), in collaboration with members like AIA, is helping SMPs to get ready.

Read the full article here

Shining a light on change management

International Accountant - Issue 124

With the rapid speed of digitisation, change has become a constant in many aspects of daily life. Yet while it is necessary and often encouraged so as to foster progress and innovation, some are hesitant to face it.

For accountants, change has taken many forms, most recently through the introduction of Making Tax Digital (MTD). This UK government vision for an effective and efficient digital tax system has meant that many accountants have had to face a continuous wave of change, head-on.

Whether this is due to too much change too soon, or a lack of support and clarity, recent research shows that many firms are lagging behind in embracing the necessary digitisation to properly implement MTD practices (see Further, only 25% of accountancy practices feel that they have the right technology to support clients with the transition to MTD. It is most likely that this reluctance to embrace MTD is a result of human aversion to technological and digital change.

In fact, when it comes to the intended outcomes of a change initiative, employee attitudes will determine whether it will sink or swim. So, what can be done to overcome this resistance to change?

Read the full article here

The impact of IR35 reform

International Accountant - Issue 123

The IR35 reforms were met with concern from many industries that rely on skilled contractors when they were introduced in 2021. One year on, it is clear that a continued lack of understanding around the new rules is stifling access to specialised talent which, in turn, is impacting businesses’ growth across the UK.

Skilled contractor labour is essential for many industries across the UK, particularly during the ongoing skills shortages following the pandemic. According to IPSE data, contractors contributed £300 billion to the UK economy in 2021 alone (see The accountancy sector is no exception, with many firms relying heavily on skilled contractors, alongside permanent members of staff.

With this in mind, we were interested to discover the true impact of the IR35 reforms on the market. To find out more, we conducted research amongst contractors, recruiters and end clients – businesses that work with contractors – including organisations in the accountancy sector, asking them questions about their experiences over the last 12 months.

Read the full article here.

The transition to real time reporting

International Accountant - Issue 122

The first decade of the new millennium saw governments globally test the waters of new e-invoicing models. During the last decade, continuous transaction controls (CTCs) and e-accounting initially swept across Latin America to improve tax collection. Digitisation of tax administration and private sector VAT processes had long lagged behind general business and government practice – because of the strict nature of VAT regulation and nervousness about the auditability of electronic data. Today, many governments are evaluating and implementing innovative VAT and general fiscal law enforcement models based on mandatory data transmission by businesses source systems.

Continuous transaction controls
CTCs encompass a variety of requirements for e-invoices and similar transaction documents to be sent to – and often pre‑approved by – the tax administration in real time or near-real time as part of the communication process between suppliers and buyers. Jurisdictions that already have CTCs in place have shown not only improvements in VAT collection, but also greater digital resilience. The global health crisis armed governments with established CTC programmes with all the evidence needed to argue that rapid digitisation was essential to a modern economy where tax is paid as due and policies can be varied flexibly based on advanced data analytics.

Read the full article here.

Financial crime risks for charities

Charities can face financial crime risks due to the nature of their activity, especially when operating internationally or in areas of economic and social upheaval. These risks must be assessed and controlled in order to avoid providing a vehicle for illicit funds or criminal activity.

Charitable organisations working internationally often face acute challenges which make them more vulnerable to financial crime including fraud, theft, looting, money laundering and terrorist financing.

All charities are at risk of fraud and cybercrime and should take practical actions to protect themselves from harm: 

  • One in thirteen people fall victim to fraud each year (1)
  • Cybercrime is on the rise, exacerbated by the pandemic (2)
  • The average organisation loses 5% of revenue to fraud each year (3)
  • Under 9% of charities have fraud awareness training in place (4)

If organisations are fraud aware and resilient this helps to maintain public trust and confidence. Additionally, money which is lost to fraud and cybercrime cannot as a result be spent on charitable causes.

Click here to read the full article.

Asian Economics: An ASEAN redesign

In recent years, the world has seen several major events which have caused huge global shifts in trade power. One such event is the departure of the UK from the European Union (EU), known as Brexit. While this development is likely to slow down trade and disrupt supply chain activities between the UK and the EU, it could also lead to hugely beneficial opportunities for countries and businesses in other regions especially Asia. Brexit in particular has made the UK and the EU look to increase trade with other countries.  

Unique opportunities and challenges

For Asian economies, Brexit presents many unique opportunities and challenges. There is a substantial amount of trade activity between Asian economies and the UK and the EU, in addition to which many Asian economies consider the UK and the EU to be key investors in their respective countries. Given today’s uncertain times due to the pandemic, there is a growing concern about future investments. Of particular concern in this regard is the ASEAN block countries, who have, over the last decade, made deliberate attempts to attract both UK and EU investors into billions of dollars of potentially lucrative investments in the manufacturing and service sectors. Meanwhile, Japan and China face issues, with some of their leading manufacturers and financial institutions having regional operational bases in the UK which no longer function as gateways for business operations in the EU.

Despite these potential issues, the Brexit decision also provides a number of interesting opportunities for Asian countries. In this regard, countries like Singapore, Myanmar, Malaysia and India could look at building on their historic ties with the UK to establish stronger economic relationships. In order to help realize these opportunities, the UK and the Asian countries are negotiating free trade agreements (FTA). As the UK is no longer bound by the same kind of rigid requirements that being an EU member demanded, the negotiations could in turn lead to more successful, mutually beneficial outcomes.

The ASEAN block

The ASEAN block comprising Singapore, Malaysia, Indonesia, Brunei, Thailand, Vietnam, Cambodia, Philippines, Laos and Myanmar is seen as one of the next up-and-coming regional economies, with both the EU and the UK looking to boost trade. ASEAN’s economy is predicted to be the fourth largest globally by 2030. The UK has long been the second biggest investor in ASEAN and is also a major exporter to the region. As of now, more than 25,000 UK companies are exporting to ASEAN, making this region the second-largest UK export destination after the US. In the meantime, the EU has started bilateral negotiations with individual members of the ASEAN block. The EU is an important trade partner for ASEAN accounting for nearly 15% of ASEAN’s exports. Singapore and Vietnam have FTAs with the EU. The UK also signed FTAs with Singapore and Vietnam in December 2020 and January 2021 respectively. ASEAN countries have also been identified as the next frontier for an e-commerce boom. With the EU and the UK’s trade agreements with some countries in the region, ASEAN seems to be a likely market for major expansion in e-commerce activities. ASEAN countries have seen large increases in internet penetration and this is expected to grow further. Rising internet penetration coupled with a rising middle class in the region points to great opportunities for those looking to sell and deliver ecommerce products in these countries.

Click here to read the full article.

Cryptocurrencies have been gathering pace ever since the second half of 2019, reaching a monumental breakthrough in the first quarter of 2021 when Bitcoin, the most representative crypto asset, exceeded an unprecedented valuation of 50,000 EUR approx. (along with Ethereum, the second best crypto assets valuing up to 1,600 EUR approx.). Globally, crypto assets encompass more than 8,000 projects (where serious realities are flanked by sham projects) and are worth as much as one Google.

Although crypto assets are still somewhat behind the scenes, and the tax and legal framework is still in the making, they are soon poised to take centre stage in the international business community raising the attention of lawmakers and tax policymakers. Hence, investors and service providers should seize the opportunity to seek out the right tax and legal advice.

From a wealth planning position, the considerable value of some crypto assets, along with an international legal context in the making, requires careful analysis of selected strategic areas including the following:

  • anti-money laundering regulations (particularly with regard to EU jurisdictions)
  • international exchange of information between tax administrations
  • international taxation

Due to the changing face of the crypto assets reality, lawmakers are attempting to pin down certain procedures aimed at increasing the level of transparency on this market. As of today, AML regulations represent the first steps to achieving a standard of practice.

Click here to read the full article.

What impact will Covid-19 have on the future of Islamic finance?

The global financial sector had been hit by two major crises within just over a decade: the global financial crisis (GFC) of 2008-2009 and the global health crisis caused by the coronavirus (Covid-19).

Financial risk falls under two types: endogenous and exogenous. Endogenous risk is the outcome of the market interactions based on the market players’ abilities, biases, prejudices and resources; while exogenous risks are shocks to the financial system from outside the system. The GFC was an endogenous risk that emerged due to the actions of market players and bankers, which led to excessive risk-taking and build-up of debt. However, the Covid-19 crisis is due to exogenous factors that have a negative impact on the real economy directly and on almost all sectors globally.

Read the full article.

What is the impact of Brexit on international tax issues and the changes to taxes for multinationals?

Following the United Kingdom's exit from the European Union on 31 January 2020, the Free Trade and Cooperation Agreement (TCA) was finally delivered on 30 December 2020 to govern the future relationship between the UK and EU. This agreement was signed one day before the end of the transition period, after which the UK would have left the EU with no deal.

Many uncertainties in the nature of this agreement remained during the transition period which significantly reduced the time businesses had to plan for the new rules.

Read the full article here.