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A survey by BDO showed that mixing remote and office work appeals more to young people from low socio-economic backgrounds writes Patrick Dunne in Accountancy Today.

The option of hybrid working – mixing remote and office-based work –  appeals more to young people from low socio-economic backgrounds than those that aren’t, according to a survey of 1,000 people aged between 16-21 by accountancy firm BDO.

More than a third (37%) of those surveyed and considered to be from a disadvantaged background believe hybrid working would give them a better work-life balance, compared to just over a quarter (27%) of young people from other backgrounds.

When asked about the additional benefits hybrid working could bring, those from lower socio-economic backgrounds scored the ability to save money on commuting more highly than 16-21 year olds from non-disadvantaged backgrounds. A quarter (23%) stated it would also better support their care responsibilities including looking after children or other dependents.

Research by the Social Mobility Commission last year found that those from more affluent upbringings are more likely to move to study or work, meaning better-paid jobs are often less accessible to those from poorer backgrounds.

However, with many citing less reliance on ‘unreliable and expensive travel’ five days a week, 26% of the young people from disadvantaged backgrounds said hybrid working would make them more likely to apply for jobs further away from home.

Sarah Hillary, partner at BDO commented: “Some of the benefits of hybrid working have been widely discussed, but the appeal to those from disadvantaged backgrounds and the potential impact on social mobility should not be overlooked.

“If changing working practices can help reach young people in social mobility cold spots, businesses and government should be seizing the opportunity to improve access and opportunity for young people in these areas.”

She added: “The post-pandemic recovery provides an opportunity to ‘build back fairer’ and develop policies that will create a more inclusive and mobile society. We should urge the Government to put as much focus on investment in people as it does on infrastructure as part of its levelling up agenda.”

The  Accountancy bodies have together committed to reach net zero emissions ‘as soon as possible’ and are set to publish plans to do so within the next 12 months, writes Heather smith in Accountancy Today

Thirteen professional accountancy bodies from across the globe, including AAT, ACCA, ICAEW, ICAS, and the Association of International Certified Professional Accountants, have partnered up with a shared commitment to reach net zero greenhouse gas emissions.

The accountancy bodies are part of The Prince of Wales’s Accounting for Sustainability Project (A4S) Accounting Bodies Network. The network currently represents more than 2.5 million professional accountants and students, who work with businesses and governments in 179 countries.

The bodies have together committed to reach net zero emissions “as soon as possible” and are set to publish plans to do so within the next 12 months, and then report annually to show their progress.

They said they have also committed to providing their members with training, support, and resources to help them “create their own net zero plans” and reduce their emissions.

In addition, the bodies have pledged to provide advice to help governments create the policies and infrastructure necessary for transitions to net zero economies.

They noted that the accountancy profession is “already at the forefront of helping societies adapt by using accounting practices to help governments adjust economic policy in ways that minimise climate change”.

Heather Hill, AAT President, said: “Following the 2020 call to action by the professional accounting bodies, AAT is pleased to support this statement of commitment to net zero. Climate change is an existential crisis and every one of us, as individuals and organisations, has a part to play in driving the effort to achieve net zero.

“At AAT we will continue our organisational activity to improve our carbon footprint, but to also help equip our members to engage in this crucial collective effort, and to bring our influence to bear on the government where appropriate.”

Helen Brand OBE, ACCA CEO, said: “Making these commitments is important to create positive business change – and professional accountants are core to this. They are in a unique position to drive good business decisions with positive impacts on sustainability, including on climate action, in the organisations they lead and work for. ACCA is proud to support these commitments and play our part.”

Michael Izza, ICAEW CEO, added: “The fight against climate change requires urgent global action, so we were pleased to join our fellow bodies from around the world to confirm our commitment to a zero-carbon society.

“We were the first major professional body to become carbon neutral and have brought in measures to help us reach net zero, such as setting up carbon-reducing projects. We will continue to look for ways to minimise our carbon footprint, guide our members on their own net zero journeys and support global action.”

J Bruce Cartwright CA, ICAS Chief Executive, concluded: “ICAS is proud to be a signatory to the Accounting Bodies Network commitment to net zero greenhouse gas emissions and to commit to provide training, support and resources to help our members establish their own net zero pathways based on our experience.

“The accountancy profession can be a key enabler in the transition to a net zero economy. I believe that if we pool our collective efforts and resources we can achieve our climate change ambitions and make the creation of a healthy and sustainable planet a reality for future generations.”

In an article in Accountancy Today , written by Harry Deacon, Chris Biggs, partner at Theta Global Advisors, discusses the FRC’s audit reform proposals, and why mid-tier auditors are intrinsically linked to any changes despite the Big Four gaining all of the headlines.

July saw the Financial Reporting Council (FRC) reveal that 29% of 103 FY21 public interest entity (PIE) audits reviewed from the seven largest UK audit firms required “improvement or significant improvement”. While this represented a marginal improvement from FY20’s 33%, Sir Jon Thompson, chief executive at the industry watchdog, stressed that “significant change still needs to happen to meaningfully improve audit quality”.

The FRC report merely reaffirmed the extent of the problem which has come to light time and again through major stories such as the Carillon, Silentnight, and Stagecoach failures. Chris Biggs, partner at the firm of chartered accountants Theta Global Advisors, recognises that he was used to “spotting a story every month, but now it’s almost weekly if not becoming daily”.

Yet, for Biggs, the issue of underperforming auditors leading to audit failures goes beyond just the Big Four and largest mid-tier firms. “I think it’s happening across the board,” says Biggs. “The big firms are the ones that grab the headlines because they’re dealing with household names, but I get to read the various rulings that circulate via the FRC where people have messed up and there are lots of smaller firms there as well, we just don’t know the names of their clients.

Despite this reality of audit failures across all sized firms confirming the need for reform for improvement, the impacts on these mid-sized FTSE 100 and 350 firms is not wholly self-inflicted. “You can’t get away from the fact that the mid-tier firms are intrinsically connected to the profession, to the audit product and to how it all works,” says Biggs.

He adds: “At the end of the day, it’s all about the consensus of public and investor confidence in the audit as a product. As much as I’m sure the mid-tier firms would like to separate themselves from the problems the Big Four have, it’s still a problem with the perception of what an audit actually is.”

So, what can be done to turn around this negative trend of poor-quality audits? One proposal set out by the FRC, and subsequently rejected by the Big Four, was that of shared audits. According to the Financial Times, those largest auditors have voiced their concerns that joint audits with smaller groups would fail to improve audit quality – an opinion also voiced by Biggs.

Biggs highlights that for a smaller accountancy firm to take on part of the audits of these larger PIEs, it doesn’t just centre around “technical audit” but a whole range of other requirements such as “derivative and trading expertise”. He adds: “For the smaller firms and mid-sized firms to get that experience in house, it’s incredibly expensive, particularly whilst it’s not just the Big Four that have those skills now. The top mid-tier are trying to get those people, so there’s a bit of a drain of specialists into those mid-tier firms.

“For the small firm trying to take on anything more than what they’re doing at the moment, the cards are somewhat stacked against them, both from a reputation experience, and also a resource cost and skillset.”

Biggs claims that as a matter of fact, for small to mid-sized firms, “there is a population of audit clients which they are perfectly suited for, and vice versa”. To take on anything more, and step out of their “comfort zone”, could in certain circumstances without significant investment in skills and resources by those firms, according to Biggs, break current legislation in the form of the “very clear policy that you only do the audit work that you are capable of doing and have the experience and skills to do so”.

If, then, shared audits isn’t the answer, what is? Biggs says that the FRC and other regulators need to have “bigger teeth” in order to “clamp down on those nonperforming” firms with tougher fines and individual bans. “I think directors need to be held far more responsible for what goes on,” he says. “When I first started training, my audit 101 was that the auditor is a watchdog, not a bloodhound. Yet, that seems to be what the auditors are getting criticised for now.

“A lot of it comes down to the fact that directors have done things they shouldn’t have done, and the auditors are complying with legislation, but because they don’t pick it up when doing what they are meant to do, then legally they’re still in the firing line. So, if you want the auditors to be more of a deterrent and a bloodhound and to really seek these things, then legislation has to change as well.”

Secondly, Biggs highlights the question of pricing. He suggests that the rotation of auditors then depressing audit costs is causing issues for audit quality across the board. Biggs says:  “The fees going down means that the amount of time the auditors can spend on doing what they need to do is really limited. There has to be an acceptance, particularly with a large set of FTSE 100 companies, that at the end of the day companies need to pay a decent amount for what they get.”

Evidently, the fate of the Big Four, large, and mid-sized auditors are intertwined. Biggs claims that proposals of shared audits could be ditched for a tougher set of regulations against company directors and a re-evaluation of audit fees to ensure auditors of all sizes have the available resources, and correct set of rules, to avoid being thrown under the bus.

For a situation that is encompassing companies of all relevant sizes that audit FTSE 100 and even FTSE 350 firms, it is thus only fair that all of these groups be consulted on audit reforms. Biggs adds: “Hearing more from the mid-tier firms will be positive because that will hopefully then start to come out with some thematic issues, as opposed to just those limited by the Big Four.”

For Biggs, audit reform is a necessity. Yet, it is key to remember the impact and importance of mid-tier firms when promoting change. A further realisation of what audits actually are, in terms of costing, legislation, and relationships between companies and their auditors, is needed to improve outcomes for both auditors and clients.

Change is needed, but industry watchdogs must consider those outside of the largest auditors if a compromise and real improvement is ever to be made.

What’s the advice in England and how might it change is covered in article by the BBC. Since Covid restrictions lifted on 19 July, people are no longer asked to work from home. PM Boris Johnson recommended a “gradual return” for staff who’d been at home since the start of the pandemic.

But although social distancing limits no longer apply, businesses still have a legal duty to manage risks to staff and customers.

Employers must follow official safety guidance and carry out Covid risk assessments. They may decide to keep some previous measures in place, such as minimising unnecessary visitors, frequent cleaning and one-way systems.

Regular lateral flow testing remains widespread and there is more detailed guidance for some industries – including construction, hospitality and manufacturing. Read the specific advice for England, Scotland, Wales and Northern Ireland.

Plan A and Plan B

The government has now published its Covid-19 Autumn and Winter Plan – which includes a Plan A and Plan B.

Much of Plan A focuses on the vaccine rollout:

• booster jabs for over 50s, the most vulnerable and health workers
• single jabs for 12-15 year olds
• encouraging others who have not yet been vaccinated to come forward

But if despite this, the NHS struggles and there is “concerning data”, Plan B (or parts of it) may be introduced – including advice to work from home once again for “a limited period”.

Plan B could also see face coverings become mandatory again in certain settings and the introduction of so-called Covid passports.

Plan A or Plan B – what could happen this winter?

Does working from home help stop Covid spreading?

Working from home is one of the most effective ways to reduce social contacts, according to the government’s Scientific Advisory Group for Emergencies (Sage).

It has a “strong impact” against virus transmission and the R number, which is a way of rating a disease’s ability to spread.

Keeping people at home greatly limits face-to-face contact – both at work and when commuting on public transport.

Chief scientific adviser Sir Patrick Vallance says if Covid cases start rising fast, there could be a case to bring back some restrictions.

“If you look across the Channel, at countries where you have similar levels of immunity and some higher degrees of restriction, you can see cases are going down.”

What are the work-from-home rules in the rest of the UK?

In Scotland, most Covid restrictions have been lifted, but people are still advised to work from home where possible. The government is encouraging employers to consider long-term hybrid models of home and office working.

In Wales, again, most Covid restrictions have been lifted, but employers are still encouraged to let people work from home where possible. Guidance says that staff should not be “required or placed under pressure to return” to a workplace unless there is a clear business need for them to do so.

Northern Ireland’s guidance to work from home where possible also remains in place.

Can I ask to keep working from home?

You can ask, but employers don’t have to agree. However, the Chartered Institute for Personnel and Development (CIPD) – which represents HR professionals – says there could be much greater freedom and flexibility in how, when and where people work in future. “People generally want a mix of workplace and home working, and the possibility of more choice in their working routines, meaning hybrid working can provide an effective balance for many workers.”

The CIPD adds that the lifting of Covid restrictions “shouldn’t signal a mass return to workplaces,” and “it should be down to individual organisations, consulting with their people, to agree working arrangements”.

How safe is public transport?

Much of the risk depends on how crowded it is and your distance from other people. Wearing a mask helps, as does keeping windows open, and avoiding peak journey times where possible.

What are my rights if I am in a vulnerable group?

Previous advice that millions of “clinically extremely vulnerable” people should shield, has now ended. Many continue to work from home, but if your job cannot be done remotely, your employer can ask you to return to the workplace. However, they still have a responsibility to keep you safe, so you should raise any specific concerns you have about going back. In addition, if you are disabled, your employer has an extra responsibility to make and pay for “reasonable adjustments”.