THE ACCOUNT
The latest in finance and business
Climate clarity
As companies continue to get to grips with the demands of sustainability reporting, KPMG has just launched a “clear on climate reporting” hub. The Big Four firm says its hub “will provide insights and guidance” for organisations and their stakeholders, fostering a clearer understanding of the new reporting regime.
“Climate-related impacts are a continued focus for investors and regulators when they look at a company's report,” says Global IFRS and Corporate Reporting Leader, Brian Donovan. “They’re all demanding clarity about climate.
“Here are three points to keep front of mind as you seek to achieve that clarity. Firstly, there’s no single standard that addresses everything here. You have lots of bases to cover in order to get the accounting right.
“Secondly, it’s not just the accounting – disclosures really matter here. You’ll need to get the financial statement disclosures right as well. Thirdly, and most importantly, you speak about climate in the front end and the back end of your annual report. So it’s vital to tell a connected story.”
CAs in the news
Melanie Clark CA
Melanie Clark CA has joined Wbg as Corporate Finance Partner at its new Aberdeen office. Her move is the latest step in an eventful 2024 for Clark, who was named Accounting Partner of the Year at the Scottish Professional Awards. Meanwhile, Wbg, one of Scotland’s leading independent accounting advisory, audit and tax firms, is expected to expand further, with another new office set to open shortly.
Ed Gaze CA
Ed Gaze CA has been appointed to trade body Insurtech UK’s newly formed advisory panel. The initiative brings together leaders of established insurance firms and founders of thriving insurance technology start-ups, with the aim of addressing sectoral challenges and finding new opportunities. Gaze is the CEO of Innovative Risk Labs incubator. In 2023 the firm secured Lloyd’s of London broker status.
Shona Barker CA
Congratulations to Shona Barker CA who has been named as a finalist for the Breakout Star of the Year category at the 2024 Accounting Excellence Awards. A Tax Director at Greenback Alan, Barker shared the news on LinkedIn, remarking: “Recognition is important because it shows other diverse women that there is room for us. The times they are a-changin’.”
Overpowerful AI
The ability of AI to live up to many of the promises and predictions being made by big tech firms is coming under increasing scrutiny. But one thing is for sure – generative AI, such as ChatGPT, consumes an awful lot of energy.
Goldman Sachs has calculated that each ChatGPT request uses nearly 10 times more energy than a Google search. In simple terms, using AI to answer a request equates to a quarter of the energy required to boil a kettle, due to the amount of information its systems are ploughing through to deliver that response in a matter of seconds. The investment bank’s study also said: “AI is poised to drive 160% increase in data centre power demand.”
Earlier this year a World Economic Forum report said: “Capping power usage during the training and inference phases of AI models presents a promising avenue for reducing AI energy consumption by 12% to 15%, with a small trade-off on time to finish tasks with GPUs expected to take around 3% longer.”
However, that may be wishful thinking. Even Sam Altman, CEO of Open AI, has said that widespread AI use will necessitate a “clean energy breakthrough”. Alex de Vries, a PhD candidate at VU Amsterdam, calculated that without such a breakthrough, the AI sector would be consuming as much energy as the whole of the Netherlands by 2027.
Counting the cost
IRIS Software Group, a global provider of accounting, payroll and HR solutions, recently surveyed UK accountants about their charges, as well as their experiences with issues such as connectivity. Among the findings were…
of respondents charge £126–£400 for a tax return, while 1% charge more than £600
charge £500–£1,000 for a set of accounts, with the rest charging more
of accountants offer advisory services as part of their compliance work
of respondents in Northern Ireland endure slow-downs in internet speed at peak times, compared with 36% in Scotland
Do the maths
In our last issue, CEO Bruce Cartwright CA laid out ICAS’ “five asks” of the new government. Among them was a renewed focus on skills, in particular raising the profile of financial literacy and training in schools. “For example, how many people really understand about basic budgeting?” he asked.
The day after the election, Dan Neidle from Tax Policy Associates published a survey revealing the depth of miscomprehension of tax matters. For instance, “Half of voters believe that, once you hit the higher rate threshold, the 40% higher rate applies to all your earnings,” he wrote.
You can read a lot into that. For starters, roughly just in one in eight Britons earn enough to pay the higher tax rate, so it’s something only a small minority have ever had to consider. Even so, it highlights a startling lack of knowledge on an issue that, understandably, always receives a lot of attention at election time. There is a similar lack of knowledge about financial literacy in our schools, but not in the way you might think.
“Making financial education compulsory in all schools would be so beneficial; it’s currently only mandatory in state schools yet academies [which are state-funded but not state-run] and private schools make up 90% of schools,” said TikTok accountant Grace Hardy in the run-up to the election.
Since 2014, financial education has been a requirement of teaching maths in state-run secondary schools, which equates to around 10% of students in England. However, in practice, only a fifth of those schools teach finance. Earlier this year, a parliamentary inquiry polled secondary school teachers in England and found 41% are unaware that financial education is a curriculum requirement, with a further 15% unsure.
One of the biggest challenges facing the UK is the number of people heading into retirement without any personal savings and having to rely solely on a state pension. While it is impossible to prove that greater financial literacy would have made the difference, one can say with confidence that it wouldn’t have done any harm.
And if the new government is going to solve some of our biggest financial challenges, one of the obvious places to start is in the classroom.
RYAN HERMAN
Do the maths
In our last issue, CEO Bruce Cartwright CA laid out ICAS’ “five asks” of the new government. Among them was a renewed focus on skills, in particular raising the profile of financial literacy and training in schools. “For example, how many people really understand about basic budgeting?” he asked.
The day after the election, Dan Neidle from Tax Policy Associates published a survey revealing the depth of miscomprehension of tax matters. For instance, “Half of voters believe that, once you hit the higher rate threshold, the 40% higher rate applies to all your earnings,” he wrote.
You can read a lot into that. For starters, roughly just in one in eight Britons earn enough to pay the higher tax rate, so it’s something only a small minority have ever had to consider. Even so, it highlights a startling lack of knowledge on an issue that, understandably, always receives a lot of attention at election time. There is a similar lack of knowledge about financial literacy in our schools, but not in the way you might think.
“Making financial education compulsory in all schools would be so beneficial; it’s currently only mandatory in state schools yet academies [which are state-funded but not state-run] and private schools make up 90% of schools,” said TikTok accountant Grace Hardy in the run-up to the election.
Since 2014, financial education has been a requirement of teaching maths in state-run schools, which at secondary level equates to around 10% of students in England. However, in practice, only a fifth of those schools teach finance. Earlier this year, a parliamentary inquiry polled secondary school teachers in England and found 41% are unaware that financial education is a curriculum requirement, with a further 15% unsure.
One of the biggest challenges facing the UK is the number of people heading into retirement without any personal savings and having to rely solely on a state pension. While it is impossible to prove that greater financial literacy would have made the difference, one can say with confidence that it wouldn’t have done any harm.
And if the new government is going to solve some of our biggest financial challenges, one of the obvious places to start is in the classroom.
RYAN HERMAN
Built with Shorthand