10 Reasons Why A Business Continuity Plan Is A Must

All of us rightly or wrongly consider that once we have a backup for the data on our computers that we are fully covered in the event of a disaster. However, as some of you will have already learned the hard way, that this is rarely the case.   A disaster can be defined as “any event or series of events that prevents your business from accessing the data and systems it needs to operate” and this includes power failures, cyberattacks, employee sabotage and hardware failure.

Every company faces the risk of IT interruptions that can grind business to a halt and if this stoppage is serious enough it can risk bringing the business to a permanent standstill or failure.   

We have listed below ten reason as to why your business should consider investing the time and resources in a business continuity plan, and in a subsequent article we will detail what the contents of a Disaster Recovery Plan should contain;

  1. The overall consideration here is that a business can’t afford downtime
  2. Customers expect always to be able to access websites, order portals etc. Downtime therefore means loss of business from customers both immediately and in the long term.
  3. Downtime can also cause reputational damage as this can be interpreted as shoddy and inadequate systems
  4. The weather (Beast from the East) can play havoc with our systems and should be protected.
  5. Sometimes hardware just fails, even the best equipment can just die for no apparent reason.
  6. If subject to a cyber-attack, it could also impact your client business.
  7. In this new GDPR world any data breaches can prove very costly to the business and should be protected to comply with all the relevant legislation.
  8. A staggering statistic from the US in relation to SME’s 43% of companies were immediately put out of business by a “major loss” of computer records, and another 51% permanently closed their doors within two years — leaving a mere six percent “survival” rate. 
  9. Ultimately it will save you money in the long term, once the initial investment is over it will begin paying dividend for the company.
  10. All systems even the most secure, interact with humans, and humans can make mistakes. 

You can see from the above that it is imperative that all businesses invest the necessary resources in a Business Continuity, Disaster Recovery Plan and we shall be looking at what it should contain in future articles.

What Questions Do You Have?

We are happy to help. Please post your comment below or call Des McCann, Partner at Cooney Carey, on 01 677 9000. Alternatively, send him an email: dmccann@cooneycarey.ie

To keep in touch, connect with us on LinkedIn.

If this article helped you, please share it with other businesses.

Posted on May 21, 2019 by Cooney Carey

Taxation reliefs on sale of your business or retirement

Structure

The legal structure for your business e.g. sole trader, single company, holding company or cross border group and the detail of how the structure is implemented and operated are key ingredients in achieving a tax efficient sale. This can be the difference between qualifying for a tax-exempt disposal or paying capital gains tax at 33%.

Tax reliefs

There are reliefs which reward entrepreneurs and business owners on sale of the business.  These reliefs may eliminate tax on a sale or retirement or may provide for a significant reduction in the tax at exit.

“S626B relief”

The sale by a company of a qualifying trading subsidiary or company owned by a trading group may qualify for complete exemption from capital gains tax.

Retirement relief

The sale of a qualifying business or shares in a family company may qualify for complete exemption from capital gains tax for disposals up to €750k per shareholder. In the case of a disposal to a child the exemption is uncapped up to age 66 (a €3M cap applies thereafter).

Entrepreneur relief

The sale of shares in a qualifying trading company or holding company may qualify for entrepreneur relief at the reduced 10% rate of capital gains tax for gains up to €1M.

There are qualifying conditions and tests that need to be met for the above reliefs to apply. These conditions may apply at a point in time or may need to be met throughout qualifying periods.

The time frame for meeting the conditions can be as short as 12 months in the case of S626B CGT relief, three years in the case of the reduced 10% rate of CGT for entrepreneur relief or as long as 10 years in the case of qualifying for exemption from CGT in the case of retirement relief.

Exit event and strategic plan

It is important to consider which of these reliefs or which combination of these reliefs are appropriate to your exit within your strategic tax plan (by the way you need a strategic tax plan but that is another story).

Apart from the changes in tax legislation flowing from the annual Finance Acts which may make changes to these reliefs it is noteworthy that published Revenue practice in this area has been updated a number of times during 2017 and 2018. You should keep your tax structure and exit plans under review on an ongoing basis and if it has been some time since it was examined it is advisable consider if it is still fit for purpose.

What questions do you have?

We are happy to help. Please post your comment below or call John Comerford, Tax Partner at Cooney Carey, on 01 677 9000. Alternatively, send him an email: jcomerford@cooneycarey.ie

Posted on September 5, 2018 by John Comerford

The 7 Stages of Planning an Audit

The planning of an audit is a fundamental part of completing a successful assignment. The process can be broken down into the following stages;

Stage 1- Appointment

The main focus of this stage is ensuring that there are no factors that prohibit the assignment from commencing. The following procedures are carried out as part of this stage;

  • Ensure client due diligence and anti- money laundering information is up to date.
  • Review whether there are any Ethical threats to the assignment and where such threats occur, are there safeguards that can be applied to allow the engagement to continue.
  • If there was a different auditor in place in the prior year, has sufficient appropriate evidence been obtained concerning the opening balances. In such instances, professional clearance should be obtained from the outgoing auditor.
  • A letter of engagement is prepared and signed.

Stage 2- Risk Assessment

This stage involves an assessment of the company’s situation from various sources with a view to determining the overall audit risk. This stage involves;

  • A review of issues arising in previous years.
  • A review of the permanent audit file of the company and any relevant correspondence during the year.
  • Discussions with management on any relevant issues which occurred during the year.
  • A review of draft financial information to compile a preliminary analytical review.
  • A review of the internal controls in place in the company.
  • A calculation of materiality
  • A preliminary assessment of going concern.

Stage 3- Audit Approach

Following on from stage 2, should be a summary of the key audit risks and how these risks affect the planned approach of the audit. The overall risk (including fraud risk) should be assessed as low, medium or high.

For each individual financial statement level, a planned audit approach should be documented. All risk areas should have an appropriate plan to deal with that risk. The work program of the audit should be driven by this.

Another matter to be considered at this stage is the framework on which the financial statements will be prepared and if reduced disclosure options are available.

Stage 4- Administration

An appropriate staffing plan should be put in place for the assignment (with appropriate skillsets and experience assigned to the team). A timetable for completion of the job should be agreed with the client.

Stage 5- Audit team briefing

A team meeting sets out the planned audit approach, the key risk areas, how these risks will be addressed and clarifies each members role in the assignment.

Stage 6- Client Service

Consider whether any useful recommendations can be made to the client regarding any issues identified.

Stage 7- Client Communication

The client should be notified of any changes in the nature/scope of the assignment. In addition to this, the information required by the audit team is communicated to and agreed with the client.

What questions do you have?

We are happy to help. Please post your comment below or contact our friendly and knowledgeable team on 01 677 9000. 

To keep in touch, connect with us on Linkedin.

If this article helped you, please share it with other businesses.
Posted on July 3, 2018 by Cooney Carey

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