2023 Archives - AGN International https://agn.org/date_of_publication/2023/ A worldwide association Mon, 28 Apr 2025 10:33:03 +0000 en-US hourly 1 Enhancing the Employee Experience to Retain Top Talent https://agn.org/insight/enhancing-the-employee-experience-to-retain-top-talent/ Mon, 22 Jan 2024 14:03:44 +0000 https://agn.org/?post_type=insight&p=183701 Contributed by: James Moore. Ask someone in today’s workforce what they like most about their job and they probably won’t give a simple answer. It’s usually a combination of factors including benefits, the people they work with, maybe even how their office looks. More employers are noticing this phenomenon, and they’ve even given it a […]

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Contributed by: James Moore.

Ask someone in today’s workforce what they like most about their job and they probably won’t give a simple answer. It’s usually a combination of factors including benefits, the people they work with, maybe even how their office looks. More employers are noticing this phenomenon, and they’ve even given it a name — the employee experience, or EX. And a good EX is a big key to keeping your talent.

What is the employee experience?

If you’ve ever worked in (or read about) the technology industry, you might recognize the term UX. This stands for user experience, and it encompasses anything you see and use on a website or software product. Buttons, menus, graphics, how long a page takes to load, how quickly a report is generated… you get the idea.

Companies spend millions of dollars and countless hours reviewing every little detail of their product’s look and responsiveness. The goal is to ensure a top-notch experience for users so they won’t go anywhere else.

The employee experience is pretty much the same thing. It includes everything an employee learns, does, sees and feels at each stage of their tenure with an organization. Employee experience begins at recruitment when the prospective employee learns about a job opportunity with your organization. It continues through each stage of an employee’s life cycle, weaving through the entirety of their tenure.

Historically it was common for employee experience to consist of only compensation and benefits for the work performed. However, the expectations of the employee experience have changed dramatically over the years. Jacob Morgan, the author of The Employee Experience Advantage, states it well:

“In a world where money is no longer the primary motivating factor for employees, focusing on the employee experience is the most promising competitive advantage that organizations can create.”

A quality EX must now include opportunities for professional growth, a sense of purpose, and a feeling of inclusion.

Importance of a Positive Employee Experience

The employee experience is far more critical now as employees’ expectations have shifted over the past several years. Attracting and retaining top talent in today’s market requires employers to provide a better experience than their competition.

Today’s employees want jobs that allow for better work/life balance, connection to meaningful work, and continued learning. A positive employee experience is key to having employees who are engaged and highly productive.

How do I know whether my employees are having a positive experience?

A lack of due diligence can leave a permanent impact on the association which can frequent the working and notoriety of an organization for a lot of time. There are numerous cases wherein deficient due diligence has influenced the organization.

We’ve broken down three steps you can take to enhance your organization’s employee experience.

Step 1: Develop an understanding of your current employee experience

This can be accomplished through interviews, focus groups and surveys with current and former employees. Questions should target each high-touch phase of the employee’s journey:

  • Hiring
  • Onboarding
  • Training
  • Development
  • Driving performance
  • Offboarding
  • Interactions with supervisors and coworkers
  • Identify areas touted as positive experiences, as well as those that need improvement.

Also remember that the needs of employees and organizations are constantly changing. Provide mechanisms to obtain continuous employee feedback; and keep tweaking your programs to ensure ongoing improvement . For example, develop simple resources for two-way communication between leadership and employees. You should also regularly monitor online reviews.

Remember, the needs of employees and organizations are constantly changing. Provide mechanisms to obtain continuous employee feedback; and keep tweaking your programs to ensure ongoing improvement . For example, develop simple resources for two-way communication between leadership and employees. You should also regularly monitor online reviews.

Step 2: Clearly define your employee value proposition (EVP)

An EVP is an internally-focused promise made by an organization to its employees. It describes the benefits they will receive in return for their experience, skills and dedication.

Create an EVP if you don’t already have one. As you do, ask yourself: Does the process for onboarding align with my EVP? How about employee development efforts? If you already have one established, excellent! Now compare it with your employee experience and ask the same questions.

The EVP should guide your organization as it develops the approach to each phase of the employee life cycle. Your employees should feel that the organization upheld its promise even at the point of an employee’s exit.

Step 3: Reinforce your EVP in the employee’s daily interactions with supervisors, coworkers and customers.

Consider broadcasting company achievements, offer in-person thanks to employees, and make recognitions and rewards personal. Employee experience has the most significant impact on productivity when employees feel valued and connected to your organization. It’s also crucial for them to see tangible results from their efforts.

Designing a great employee experience may seem like a herculean task. But ultimately your organization will be rewarded with an increase in top talent, better retention, and a positive impact to your bottom line.

Related AGN reading:

AGN Global Business Voice: Managing Generational Friction

AGN Global Business Voice: The Great Female Resignation…? The AGN ‘Women of Impact’ Initiative

AGN Global Business Voice: Unlocking Your Firm’s Power to Recruit Quality Staff

AGN Global Business Voice: Diversity & Inclusion (D&I) – Good Business, Or a Matter Of Survival?

Disclaimer: All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

Cover image by jcomp on Freepik


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James Moore & Co
5931 NW 1st Place
Gainesville, FL 32607
352-577-8990

https://www.jmco.com
Enquiry form
Phone: 888-635-2654


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Press Release: Kuwait Firm Joins AGN Membership https://agn.org/insight/press-release-kuwaiti-firm-joins-agn-membership/ Wed, 10 Jan 2024 13:56:00 +0000 https://agn.org/?post_type=insight&p=182546 AGN International announces that Kuwaiti firm Al Dawli & Partners Chartered Accountants has joined its Europe, Middle East & Africa (EMEA) membership. AGN International is one of the world’s leading associations of independent certified public accounting and consulting firms and sets rigorous criteria for admission to the association. We provide outstanding continuing professional education and […]

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AGN International announces that Kuwaiti firm Al Dawli & Partners Chartered Accountants has joined its Europe, Middle East & Africa (EMEA) membership.

AGN International is one of the world’s leading associations of independent certified public accounting and consulting firms and sets rigorous criteria for admission to the association.

We provide outstanding continuing professional education and intra-member collaboration to help all member firms serve clients with excellence and maintain adherence to the highest professional standards.

The admission of Al Dawli & Partners Chartered Accountants strengthens our coverage in the Middle Eastern region. The full-service firm has a dynamic and forward-thinking approach, in line with AGN. We look forward to their participation and international collaboration.”


Malcolm Ward – Global CEO, AGN International

Al Dawli, located in Kuwait, was established in 2014 by Ahmed Salem Doudan. Al-Dawli & Partners) provides accounting, auditing, tax risk management, legal, investment and consulting services.

CONNECT

Al-Dawli & Partners Chartered Accountants
Al-Qibla – Block 12 – Building 16 – Sharifa Complex – First Floor – Office 13 A + B

Web: aldawlikuw.com
Tel: +965-600-55-918
Email: info@aldawlikuw.com

PARTNERS:

Mr Ahmed Salem Doudan
Founder
a_doudan @aldawlikuw.com

Mr Jamal Aldaba
Principal
arodriguezneira@latinger.com

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The Role of Due Diligence in Cross Border Mergers https://agn.org/insight/the-role-of-due-diligence-in-cross-border-mergers/ Thu, 21 Dec 2023 14:12:33 +0000 https://agn.org/?post_type=insight&p=183595 Contributed by: KNM Management Advisory The term ‘due diligence’ alludes to a sensible investigation of the points of interest and issues related to going into an agreement or arrangement for a merger or acquisition that must be completed by the gatherings to such agreement or understanding. This may either be interpreted as a legitimate commitment […]

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Contributed by: KNM Management Advisory

The term ‘due diligence’ alludes to a sensible investigation of the points of interest and issues related to going into an agreement or arrangement for a merger or acquisition that must be completed by the gatherings to such agreement or understanding. This may either be interpreted as a legitimate commitment or a deliberate endeavor.

Due Diligence: Key Transaction Insights

Using due diligence as an instrument is essential for introductory extensive danger evaluations, achievability concentrates during the transaction, and lastly understanding the legitimate complexities encompassing the marketing.

The primary is essential for the recognizable proof of territories of danger and related issues of defilement. This to a great extent includes increasing sound information on the exercises, transactions, and nature of the objective business. Also, due diligence is essential to relieve issues that emerge attributable to contrasts in tax assessment and bookkeeping/monetary standards and it should endeavor to welcome an agreement on such liquidation measurements which would decide the well-disposed advancement of the transaction.

The Global Scenario of Due Diligence

With various controllers universally requiring differed commitments based on strategy contemplations, corporate responsibility has become a need and is accordingly basic for the rebuilding of a corporate substance, and subsequently, due diligence must be practiced in the essential limit, risk infringement close by different costs, for example, that of notoriety ought to be appended close by, driving towards examination and actions of implementation.

One of the most significant viewpoints that an organization must consider while directing due diligence must be that of against trust matters, which differ locally everywhere on the globe, in this way putting a limitation on cross-outskirt merger control.

Notable Global Instances of Inadequacies of Due Diligence

A lack of due diligence can leave a permanent impact on the association which can frequent the working and notoriety of an organization for a lot of time. There are numerous cases wherein deficient due diligence has influenced the organization.

Google and Nest

Google procured home labs in 2014 to go into the market of savvy homes. Google worked productively on the product yet couldn’t adapt to the equipment and item development. This prompted interior battling and governmental issues inside the Nest which influenced the item advancement of the organization and at last both the originators needed to later stop the organization.

HP and Autonomy

In 2011, HP obtained Autonomy, a European information examination organization. In any case, later it was discovered that Autonomy had cooked their books which brought about the expansion of their costs during acquisition. The organization (HP) couldn’t pick up anything from the acquisition and eventually needed to record the acquisition as a $9 Billion Loss.

Benefits of Due Diligence in Cross-Border Merger

Risk Mitigation: Conducting due diligence helps identify potential risks associated with the target company, such as legal, financial, operational, or regulatory issues. By uncovering these risks early on, the acquiring company can make informed decisions and take necessary steps to mitigate or address them before finalizing the deal.

Accurate Valuation: Due diligence provides a comprehensive understanding of the target company’s financial health, assets, liabilities, and market position. This information enables the acquiring company to accurately assess the value of the target company and negotiate a fair purchase price. It helps avoid overpaying for the acquisition and ensures a more realistic valuation.

Strategic Decision-making: Through due diligence, the acquiring company gains insights into the target company’s operations, market presence, customer base, and competitive landscape. This information helps in making strategic decisions regarding the integration of the two entities, identifying synergies, and developing a post-merger integration plan. It allows for a more informed and effective decision-making process.

Legal and Regulatory Compliance: Cross-border mergers and acquisitions involve navigating complex legal and regulatory frameworks. Due diligence helps identify any non-compliance issues, potential legal liabilities, or regulatory hurdles that may arise during or after the transaction. This knowledge allows the acquiring company to address these issues proactively and ensure compliance with all applicable laws and regulations.

Enhanced Negotiation Power: By conducting due diligence, the acquiring company gains a deeper understanding of the target company’s strengths, weaknesses, and potential areas for improvement. This knowledge provides leverage during negotiations, allowing for more favorable terms and conditions. It also helps in identifying potential deal breakers or areas that require further negotiation.

Conclusion

Overall, due diligence in cross-border mergers and acquisitions provides valuable insights, reduces risks, facilitates accurate valuation, supports strategic decision-making, ensures legal compliance, and enhances negotiation power. It is a critical process that maximizes the chances of a mutually beneficial and successful transaction.

Further reading:

In today’s globalized business landscape, companies are constantly seeking opportunities to expand their operations and market reach. One of the most effective strategies for international growth is through cross-border mergers and acquisitions (M&A). These transactions allow businesses to access new markets, technologies, and talent, paving the way for greater competitiveness and profitability.

Explore the essential steps involved in cross-border M&A and provide a roadmap for successful international growth in the previous blog, Cross Border Mergers and Acquisitions: A Roadmap for International Growth

In December 2021, AGN launched a Global Business Voice “M&A Outlook II – The AGN Global Survey of M&A Activity: The Foothills of Future Change?” The publication revealed the high-level, opinion-based picture from our international panel of business advisory accountants. Discover what happened in their region or country – Download publication.

Disclaimer: The information provided in this blog is for educational purposes only and should not be considered professional advice.


Contributed by:

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KNM Management Advisory Pvt. Ltd.
Tokyo, Dhaka, Delhi, Gurugram, Chennai, Ahmedabad,
Bangakore, Mumbai & Chandigarh
www.rvkassociates.com

INDIA HEAD OFFICE
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Sector-48, Gurugram-122001, (Delhi-NCR),
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Email: services@knmindia.com
Phone: (+91) 124 429 5170 or (+91) 991 009 5170

JAPAN OFFICE
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1-21-3 Ebisu, Shibuya-ku
Tokyo 150-0011

Email: japandesk@knmindia.com
Phone: +81-3-6869-0850 or +81-3-6821-9455

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AGN Taxpresso: 2023 – Issue 4 (Asia Pacific Tax Publication) https://agn.org/insight/agn-taxpresso-2023-issue-4-asia-pacific-tax-publication/ Wed, 20 Dec 2023 08:33:07 +0000 https://agn.org/?post_type=insight&p=183588 Inside this issue, Mandy Liu at AGN Member Firm Acclime in China provides insight into Individual Income Tax (IIT). Vimala Devi at AGN Member Firm BSL in Singapore provides insight into new legislations, effective as of 1 Jan 2024, relating to the gains from the sale or disposal of a foreign asset. A summary of […]

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Inside this issue, Mandy Liu at AGN Member Firm Acclime in China provides insight into Individual Income Tax (IIT). Vimala Devi at AGN Member Firm BSL in Singapore provides insight into new legislations, effective as of 1 Jan 2024, relating to the gains from the sale or disposal of a foreign asset.

A summary of each article follows. Download the publication for a comprehensive read.

China Government Extends Favorable Policies of IIT

The Chinese government has taken steps to ease the burden on taxpayers by issuing important announcements regarding various aspects, especially the Individual Income Tax (IIT) policies.

Singapore Enacts Section 10L on Taxation of Gains from the Sale of Foreign Assets

To align with European Union laws and comply with international standards the following section 10L of the Singapore Income Tax Act has been introduced that will become effective from 1 Jan 2024. It allows the taxation of foreign disposal gains that are received in Singapore in the absence of real economic activities.

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Evaluating AGN Member Digital Maturity https://agn.org/insight/evaluating-agn-member-digital-maturity/ Tue, 19 Dec 2023 10:18:58 +0000 https://agn.org/?post_type=insight&p=183585 AGN Global Business Voice: Practice Management Between April and September 2023, the AGN EMEA IT Committee surveyed members across the world through the ‘Digital Maturity Survey’. The purpose of the research is to support members by revealing common issues, key challenges and members progress on their journey to digital transformation. The survey also provides valuable […]

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AGN Global Business Voice: Practice Management

Between April and September 2023, the AGN EMEA IT Committee surveyed members across the world through the ‘Digital Maturity Survey’. The purpose of the research is to support members by revealing common issues, key challenges and members progress on their journey to digital transformation. The survey also provides valuable benchmarking information allowing members to assess their relative position helping to inform their own strategy.

Closer scrutiny of the data suggests that members can be categorised into a tiered range of digital advancement. Our IT experts are now in a position to develop a unique online diagnostic tool providing instant mapping of a firms capability and the presentation of practical steps for them to move from one tier to the next

Our approach to member Digital Maturity very much aligns with AGN’s commitment to add value to a member firms business by supporting them with knowledge, tools, information and practical advice.

The (member only) survey continues our investment and focus around what we describe as the Big 3 members issues; Practice Digitisation and Transformation, Talent Recruitment and Retention and Commercial ESG.

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The Importance of ESRS G1 Business Conduct https://agn.org/insight/the-importance-of-esrs-g1-business-conduct-in-compliance-with-laws-and-regulations/ Fri, 15 Dec 2023 11:51:00 +0000 https://agn.org/?post_type=insight&p=183584 News from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) ESRS G1 Business Conduct emphasizes ethical behavior, integrity, and compliance with laws and regulations in all business interactions and operations. But, how important is ESRS G1 Business Conduct in relation to other European Sustainability Reporting Standards (ESRS)? Within the scope of the ESRS, ESRS E1 Climate Change and ESRS […]

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News from the AGN EMEA Accounting, Auditing & Education Committee (AAEC)

ESRS G1 Business Conduct emphasizes ethical behavior, integrity, and compliance with laws and regulations in all business interactions and operations. But, how important is ESRS G1 Business Conduct in relation to other European Sustainability Reporting Standards (ESRS)?

Within the scope of the ESRS, ESRS E1 Climate Change and ESRS S1 Own Workforce are typically regarded with high importance. The question is; Should ESRS G1 Business Conduct have (at least) the same status?

Based on the alignment of ESRS G1 with crucial aspects of sustainable corporate governance and against the background of the following topics (ESRS G1.2), in my opinion, the affirmative response to this question is “yes”.

  • Business ethics and culture
  • Combating corruption and bribery
  • Management of relations with suppliers (including payment practices)
  • Lobbying activities

Overview of the ESRS G1 reporting requirements

ESRS G1 consists of two “Related to ESRS 2” disclosure requirements (GOV-1 and IRO-1) and six additional DRs. These DRs, in turn, contain 51 fundamentally reportable data points. With the exception of “Related to ESRS 2 IRO-1”, all DRs and data points are subject to materiality requirements. They are, therefore, only reportable if the related sustainability aspects have been classified as material in the materiality analysis either from the perspective of “impact materiality” and/or “financial materiality”.

“Related to ESRS 2 IRO-1” DR of ESRS G1

This disclosure requirement is considered “always mandatory” and is therefore not subject to materiality. All companies required to report in accordance with the CSRD must include the related information in their sustainability reporting. In accordance with ESRS G1.6, the procedure within the scope of the materiality analysis must be described with reference to the determination of the material effects, risks and opportunities in connection with the corporate policy (business conduct) – This also includes the disclosure of all relevant criteria used in the process.

In the area of corporate ethics and culture, information must be provided on how the company defines, implements and reviews its ethical principles and codes of conduct. Other key reporting requirements relate to how employee involvement and commitment is promoted and how ethical dilemmas or conflicts are dealt with. It also concerns how the fight against corruption and bribery is ensured.

With regard to relationships with suppliers, the objective of ESRS G1 is to create transparency and accountability of the reporting entity in the upstream value chain. In particular, information on the management of relationships with suppliers must be disclosed. The disclosures on the company’s payment practices, particularly with regard to late payments to small and medium-sized enterprises (SMEs), are of particular relevance from the perspective of the stakeholders concerned. Further disclosure requirements relate to the selection process of suppliers from a sustainability perspective.

The third material topic area relates to the provision of information on the following:

  • Company activities and obligations related to the exercise of its political influence
  • Description of the nature and purpose of any lobbying activities
  • Assurance and monitoring related to compliance with applicable laws and regulations

From a lived culture of values to audit-proof governance structures

Within the scope of the ESRS G1 reporting requirements, companies can, for example, draw on existing guidelines in the procurement area and on risk and complaint management systems that have already been implemented. However, particularly in the area of owner-managed SMEs, it will also be a question of underpinning the historically grown and lived value-oriented corporate culture (in the sense of “grandfathering”) with appropriately documented and audit-proof processes and transferring them into strategic governance structures.


Should you ever lose track of the big picture, my colleagues and I from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) will be happy to help and guide you safely through the IFRS and CSR jungle. As a member of AGN International, you can use the AGN AAEC Helpline at any time or contact me by email at carsten.ernst@wirtschaftstreuhand.de or by mobile phone at +49 173 8710322.

Happy accounting and stay sustainable,

Carsten


Carsten Ernst
Managing Partner
Wirtschafts Treuhand Group
Stuttgart, Germany
– Expert in financial (IFRS) and sustainability (ESRS and GRI) reporting

– Audit of financial and sustainability reports in accordance with ISAs

– Member of the following AGN bodies:
– EMEA Board of Directors (Chairman)
– EMEA AAEC Accounting, Auditing and Education Committee (Member)

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BKL Welcomes Commercial Finance Specialists CFPro With Merger https://agn.org/insight/bkl-welcomes-commercial-finance-specialists-cfpro-with-merger/ Tue, 05 Dec 2023 09:29:21 +0000 https://agn.org/?post_type=insight&p=182580 Contributed by: BKL. We’re pleased to announce that commercial finance consultants CFPro Ltd have merged with BKL. CFPro specialises in strategic support for high-growth businesses, helping them to strengthen their financial operations and realise their ambitions. CFPro’s advisory and compliance services cover transactions such as acquisitions, IPOs and funding; guidance for finance teams through phases of […]

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Contributed by: BKL.

We’re pleased to announce that commercial finance consultants CFPro Ltd have merged with BKL. CFPro specialises in strategic support for high-growth businesses, helping them to strengthen their financial operations and realise their ambitions.

CFPro’s advisory and compliance services cover transactions such as acquisitions, IPOs and funding; guidance for finance teams through phases of major change; and corporate governance support to ensure that clients meet their compliance responsibilities.

CFPro has an office in Central London. Their team will continue trading under the CFPro name as part of BKL.

BKL, combined with CFPro, becomes a team of over 250 people, including 25 partners. This follows the merger of Landau Baker Chartered Accountants with BKL in May 2023.

This also builds on BKL’s partner-level growth. In April 2023, two new audit partners were appointed. Nick Bishop was internally promoted, and Geeta Morgan joined from Mazars. In addition, Duncan Hardy, BKL’s Chief Digital Officer since 2019, was also appointed as a partner.

Lee Brook, our CEO, says:

Barbara Spurrier, founder of CFPro and now BKL partner, says:

We’re delighted to make CFPro’s considerable expertise available to BKL clients who are considering the next phase in their business growth.

For more information, please get in touch with:

Simon Bussell
Chief Commercial Officer
+44 (0)20 8922 9278
Simon.Bussell@bkl.co.uk

https://www.bkl.co.uk

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Video: Business But Better – BKL’S ESG Journey https://agn.org/insight/video-bkls-esg-journey-business-but-better/ Wed, 22 Nov 2023 15:10:33 +0000 https://agn.org/?post_type=insight&p=182558 Contributed by: BKL. Simon Bussell, our Marketing and Business Development Director, sat down with Myfanwy Neville, Partner and Head of ESG (Environmental, Social and Governance), to talk about BKL’s ESG journey – including becoming a certified B Corporation in 2022 – and how we’re supporting owner-managed companies to become better businesses. Their conversation covers: Simon […]

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Contributed by: BKL.

Simon Bussell, our Marketing and Business Development Director, sat down with Myfanwy Neville, Partner and Head of ESG (Environmental, Social and Governance), to talk about BKL’s ESG journey – including becoming a certified B Corporation in 2022 – and how we’re supporting owner-managed companies to become better businesses.

Their conversation covers:

  • BKL’s development as a sustainable business
  • Our B Corp certification and the B Impact Assessment process
  • How we’ve been talking with clients about ESG
  • Dispelling myths about the expense and value of sustainability and other ESG measures
  • ESG starting points for owner-managed businesses

Simon Bussell and Myfanwy Neville were featured in the article; Passing The Sustainability Test in Finance, written by FSP Partnership. The article listens to the voices of three FS companies who’ve achieved B Corp certification.

BKL provide accountancy, advisory and tax support to entrepreneurial, owner-managed businesses that think in new ways, explore new opportunities and change things for the better. We enjoy the relationships we have with our clients; we grow together.

https://www.bkl.co.uk

MAKE AN ENQUIRY

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ESRS Materiality Analysis in Medium-Sized Businesses https://agn.org/insight/esrs-materiality-analysis-in-medium-sized-businesses/ Wed, 15 Nov 2023 11:07:41 +0000 https://agn.org/?post_type=insight&p=182545 News from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) The materiality analysis is the “linchpin” of future Corporate Sustainability Reporting Directive (CSRD)/European Sustainability Reporting Standards (ESRS) sustainability reporting. The scope of the future sustainability report depends crucially on which sustainability aspects are on the so-called “material topic” list at the end of the […]

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News from the AGN EMEA Accounting, Auditing & Education Committee (AAEC)

The materiality analysis is the “linchpin” of future Corporate Sustainability Reporting Directive (CSRD)/European Sustainability Reporting Standards (ESRS) sustainability reporting.

The scope of the future sustainability report depends crucially on which sustainability aspects are on the so-called “material topic” list at the end of the materiality analysis. Furthermore, this list provides the basis for the development of a company-specific sustainability strategy. 

Due to the complexity of the requirements of both ESRS 1 (General Requirements) and the current EFRAG draft “Materiality Assessment Implementation Guidance (MAIG)”, it is important for SMEs to implement these requirements in a pragmatic yet standard-compliant and audit-proof manner. 

The Principle of Materiality

The ESRS consist of 12 standards, 82 Disclosure Requirements (DRs) and 1178 individual reporting requirements (so-called data points). So much for the bad news. The good news is that most of these reporting requirements are subject to materiality. 

Only the data points that relate to the list of “material topics” must be reported on (only the DRs and data points of ESRS 2 – incl. the “related to ESRS 2 IRO-1” DRs in the topic-related standards – are considered “always mandatory”). The task of the materiality analysis is to identify these “material topics”.

From the “Long List” to the “Material Topic List

The starting point for the materiality analysis is (mandatory!) a list of the fundamentally relevant sustainability aspects (so-called “long list”), which are presented in tabular form in ESRS 1.AR.16. However, both ESRS 1 and the MAIG make it clear that this list must be adapted to include sustainability aspects specific to the industry/company. 

Depending on the industry/company, the “long list” contains approximately 100 potentially relevant sustainability aspects. Examples of sustainability aspects are climate change, energy intensity, resource consumption, water consumption, appropriate remuneration, and gender equality.

As part of the materiality analysis, the “long list” is now successively shortened in several steps. In practice, a so-called “medium list” should first be derived on the basis of environmental analyses, peer group comparisons, expert surveys and the involvement of internal and external stakeholders.

The remaining sustainability aspects are then assessed and prioritized individually in accordance with the principle of dual materiality, both from the perspective of impact materiality (inside-out perspective) and financial materiality (outside-in perspective). Once a company-specific materiality threshold has been defined, the result of the materiality analysis is a list of “material topics”, usually referred to as a “short list”. This forms the basis for determining the data points to be reported in accordance with the topic-related ESRS.

Appendix E to ESRS 1 contains a “flowchart for determining disclosures under ESRS.” This shows that materiality considerations are possible at three levels:

  • At the standard level: to the extent that a standard is assessed as not material, this automatically also applies to all DRs (with the exception of “related to ESRS 2 IRO-1 DRs) and data points of this standard;
  • At the level of the DRs (to the extent that a DR is assessed as not material, this also automatically applies to all data points of the DR) and;
  • At the level of individual data points.

Focusing On What Is Essential

There is no question about it: SMEs, in particular face major challenges in connection with first-time sustainability reporting based on the CSRD/ESRS. However, since the majority of the reporting requirements are subject to materiality, it is particularly important to identify those topics in the materiality analysis that are actually relevant for the respective company from the perspective of both “impact materiality” and/or “financial materiality”. Thus, the materiality analysis is the decisive lever for scaling the reporting obligations.

The Materiality Analysis in 6 Steps

1. Creation of the “long list“
Based on ESRS 1.AR 16. addition of industry/company-specific sustainability aspects

2. Derivation of the “medium list“
Interviewing internal and external experts, peer group comparisons, involvement of internal and external stakeholders, etc.

3. Assessment of impact materiality
Inside-out perspective

4. Assessment of financial materiality 
Outside-in perspective

5. Determination of threshold value
Company-specific determination with reliable documentation

6. Finalization of the “material topic list”
If necessary, visual presentation as materiality matrix


Should you ever lose track of the big picture, my colleagues and I from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) will be happy to help and guide you safely through the IFRS and CSR jungle. As a member of AGN International, you can use the AGN AAEC Helpline at any time or contact me by email at carsten.ernst@wirtschaftstreuhand.de or by mobile phone at +49 173 8710322.

Happy accounting and stay sustainable,

Carsten


Carsten Ernst
Managing Partner
Wirtschafts Treuhand Group
Stuttgart, Germany
– Expert in financial (IFRS) and sustainability (ESRS and GRI) reporting

– Audit of financial and sustainability reports in accordance with ISAs

– Member of the following AGN bodies:
– EMEA Board of Directors (Chairman)
– EMEA AAEC Accounting, Auditing and Education Committee (Member)

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James Moore Named a Best CPA Firm for Women and a Best CPA Firm for Equity Leadership https://agn.org/insight/james-moore-named-a-best-cpa-firm-for-women-and-a-best-cpa-firm-for-equity-leadership-2/ Mon, 13 Nov 2023 13:08:42 +0000 https://agn.org/?post_type=insight&p=182521 For the second year in a row, AGN Firm James Moore in Gainesville, FL, has been named a Best CPA Firm for Women by the Accounting MOVE Project. The organization also named the firm to its list of Top Firms for Equity Leadership for the fifth straight year. Named Best CPA Firm for Women and […]

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For the second year in a row, AGN Firm James Moore in Gainesville, FL, has been named a Best CPA Firm for Women by the Accounting MOVE Project. The organization also named the firm to its list of Top Firms for Equity Leadership for the fifth straight year.

Named Best CPA Firm for Women and Best CPA Firm for Equity Leadership

James Moore is one of just 16 firms nationwide to be named to the Best CPA Firm for Women list and one of only 25 named a Top Firm for Equity Leadership. The project recognized James Moore for the 48% of women in partner/principal positions and gender equality at all levels within the company. The firm was also cited for its ongoing commitment to equity. Among the organization’s statements:

“A perennial standout among MOVE Project firms, James Moore has a pioneering spirit that doesn’t let up, even when it is comfortably in the lead. James Moore has the numbers, the support, the vision, and the alignment to prove momentum for women in their firm.”

Recognizing Equity

We are proud to once again be named to Accounting MOVE’s important lists recognizing equity!” said James Moore, managing partner Suzanne Forbes. “Women in partnership have been a norm at James Moore since 1988, long before many other firms regularly did the same. Our long-term commitment to equity in leadership is nothing new and will continue—in fact, we just admitted another woman to our partnership in the last couple of weeks.”

The Accounting MOVE project is the only annual benchmarking project that both counts and advocates for women in the profession. To be included on this list, an employer must have at least 30% women partners and principals in the firm—recognizing that firms achieving this milestone have done so through a combination of culture, programs, initiatives and growth.

The Accounting MOVE Project methodology

The Accounting MOVE Project is based on the MOVE methodology, developed by research partner Wilson-Taylor Associates, Inc., which investigates the factors essential to women’s career success:
M – Money: fair pay practices;
O – Opportunity: advancement and leadership development;
V – Vital supports: work-life programs that remove barriers;
E – Entrepreneurship: operating experience for managing or business ownership

About James Moore

James Moore, founded in 1964, is a business consulting and advisory firm with offices in Daytona Beach, DeLand, Gainesville, Ocala and Tallahassee, Florida. The firm provides tax, assurance, outsourced accounting, technology solutions, human resources, business advisory, data analytics, and wealth management services.

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