IAAC Break out session Pers Aswani Hazlems Fenton

IAAC Break out session Pers Aswani Hazlems Fenton LLP, UK Scott Walters, Daszkal Bolton, USA 1

World Congress – Dublin 2016 BREXIT – Considerations for Accountants Pers Aswani 10/5/2016 2

IAAC– Technical Session Contents of Technical Programme • Subject 1: BREXIT – change in landscape for Business, Trade and Accountants • Subject 2: Computer and Cyber security • Subject 3: Future trends in technology - Outsourcing, threats and opportunities - Concluding discussion 10/5/2016 3

IAAC Technical Session Pers Aswani • Partner • Head of Audit • Chairman 10/5/2016 - Hazlems Fenton LLP, London, UK - AGN International Accounts and Audit Committee (IAAC) 4

IAAC– Technical Session Contents of Technical Programme • Subject 1: BREXIT – change in landscape for Business, Trade and Accountants • Subject 2: Computer and Cyber security • Subject 3: Future trends in technology - Outsourcing, threats and opportunities - Concluding discussion 10/5/2016 5

Brexit – Considerations for Accountants Introduction • On June 23 rd 2016 the UK voted in a referendum to leave the EU • Leave 52%: Remain 48% • Why? • Numerous implications and effects resulting from this historic vote 10/5/2016 6

Brexit – Considerations for Accountants Political Impact • United Kingdom • European Union • Rest of the World 10/5/2016 7

Brexit – Considerations for Accountants Economic Cost • Risk of recession – B of E forecast • Immigration – likely reduction and effect • Staff shortages – particularly certain sectors 10/5/2016 8

Brexit – Considerations for Accountants Cross Border Trade and Business • More Difficult? • Tariffs & Barriers to trade • Business Risk • Economic Risk • Foreign Exchange 10/5/2016 9

Brexit – Considerations for Accountants Post Brexit – The current position • Stock market (FTSE: 6, 338 : 5, 982: 6, 746) • Business confidence/ uncertainty • New UK Government • Start informal discussions • Formal discussions have not yet commenced 10/5/2016 10

Brexit – Considerations for Accountants Possible impact on clients (1) • Import Businesses • Export Businesses • Foreign Exchange movements • Investment • Confidence 10/5/2016 11

Brexit – Considerations for Accountants Possible impact on clients (2) Particular impact on following sectors: • Hotels industry • Food and catering industry • The Care sector 10/5/2016 12

Brexit – Considerations for Accountants Possible impact on clients (3) Other implications: • The City and financial services • Going concern assessments 10/5/2016 13

Brexit – Considerations for Accountants Possible impact on clients (4) Government initiatives: • Setting up in the UK • Tax regime • Monetary policy • Other incentives 10/5/2016 14

Brexit – Considerations for Accountants Possible Impact on Accountancy firms (1) • Regulatory landscape • Status of EU Directives- Eg. 4 th Money Laundering Directive • Staff Exchanges • Travel 10/5/2016 15

Brexit – Considerations for Accountants Possible Impact on Accountancy firms (2) • EU Adopted (IFRS) GAAP • Bring back UK GAAP? • Status of EU Directives and Regulations • FRS 102 10/5/2016 16

Brexit – Considerations for Accountants Possible Impact on Accountancy firms (3) • Tax • VAT • Corporation Tax 10/5/2016 17

Brexit – Considerations for Accountants Possible Impact on Accountancy firms (4) • Tariffs and trade barriers – Additional costs to trade • Use Brexit checklist to advise clients • Further assessments of Going Concern 10/5/2016 18

Brexit – Considerations for Accountants Possible Impact on Accountancy firms (5) EU/UK Big Policy areas: • Anti Money Laundering (Eg 4 th Directive) • Data Protection • Competition (Eg State aid) • Financial Services (Eg Banking Regulations, City) • Consumer Rights • Pensions 10/5/2016 19

Brexit – Considerations for Accountants Possible Impact on Audits • Going concern • Understanding the entity • Risk assessment (forex, derivatives, investments) • Other assets values (Property, fixed assets) • Impairment reviews & discount rates to use • Reporting risks in the Accounts 10/5/2016 20

Brexit – Considerations for Accountants 5 Minute Group Discussion • What do you think is the impact of Brexit in your country? • Possible impact on the World? 10/5/2016 21

Brexit – Considerations for Accountants The Future • UK yet to give formal notice to leave • Formal discussions yet to start • Brexit means Brexit? • Impact on the EU? • Euro currency is safe? • Referenda in other EU countries? 10/5/2016 22

Brexit – Considerations for Accountants Conclusions • Not as bad as had been feared so far • Certain cautious optimism • Stable situation • Ongoing and formal discussions are pending 10/5/2016 23

Brexit – Considerations for Accountants Thank you! Pers Aswani (persaswani@hazlemsfenton. com) Hazlems Fenton, London United Kingdom 10/5/2016 24

World Congress – Dublin 2016 Computers and Cyber Security Scott A. Walters 10/5/2016 25

IAAC Technical Session Scott A. Walters • Senior Partner & Head of Audit – Daszkal Bolton LLP, Florida, USA • Vice Chair – AGN Int’l. A&A Committee 10/5/2016 26

IAAC Technical Session Contents of Technical Programme • Subject 1: BREXIT – change in landscape for Business, Trade and Accountants • Subject 2: Computer and Cyber security • Subject 3: Future trends in technology - Outsourcing, treats and opportunities 10/5/2016 27

Cyber-Safety Basics: A Quick Quiz 1. True or False? Viruses can be transmitted via email, email attachments or IM. 2. People who seek out your personal information and then use it to commit crimes are called: ______ 3. Which of the following are ways to help prevent identity theft. (Check all that apply. ) __ A. Never send personal information via email or instant messages. __B. Always send personal information via email or instant messages. __C. Lock my office door. __D. Don’t tell anybody my name. 4. True or False? Iloveyou 2 is a good password. Why or why not? 5. I just downloaded a free program online and now my computer is running very, very slowly. Which of the following most likely happened? __A. I didn’t install the program properly. __B. I didn’t have enough space on my hard drive for the new program. __C. I downloaded spyware and/or adware, too. __D. Someone snuck in while the program was downloading and changed my password 6. ______help prevent your computer from responding to pings (calls) from hackers. 10/5/2016 28

Quick Quiz: Answers 1. True 2. Identity thieves 3. A and C are correct. D would probably help too, but seems a bit extreme! 4. False. Iloveyou 2 is a very common password. 5. C. It’s most likely that you downloaded spyware and/or adware. 6. Firewalls 10/5/2016 29

Cyber-Safety Threats Viruses Hackers Viruses infect computers through email attachments and file sharing. They delete files, attack other computers, and make your computer run slowly. One infected computer can cause problems for all computers on a network. Hackers are people who “trespass” into your computer from a remote location. They may use your computer to send spam or viruses, host a Web site, or do other activities that cause computer malfunctions. Identity Thieves People who obtain unauthorized access to your personal information, such as Social Security and financial account numbers. They then use this information to commit crimes such as fraud or theft. 10/5/2016 Spyware is software that “piggybacks” on programs you download, gathers information about your online habits, and transmits personal information without your knowledge. It also may cause a wide range of other computer malfunctions. 30

Motivation Behind Attacks 10/5/2016 31

Impact of Allowing Customer Data to be Stolen by Hackers • Damage to firm’s reputation • Erode client’s comfort/willingness to share data • Imposed fines for data breaches 10/5/2016 32

Cyber Risk • Data protection and privacy – Headlines show cyber risk continues to grow with data breaches grabbing most of the headlines. • Human error – Leaving a laptop at an airport, inadvertently exposed data, misconfigurations, using an unsecured Wi-Fi in the US or while traveling abroad, opening a phishing email or the use of social media. • Business Disruptions – On July 8 th the NY Stock exchange was down for four hours on the same day United Airlines had to halt flights, all from a technical glitch. • Cyber Liability – Lawsuits that stem from failing to implement a system of internal controls to protect customer data or information of value to the University. When was the last time you discussed Cyber Risks with members of your firm? 10/5/2016 33

What Keeps Your IT Dept. Awake at Night? • Data protection and privacy – Without greater openness and collaboration between major online providers, privacy regulation is likely to follow. • Better Software Design – Much cybercrime relies on the fact software is bug-ridden or contains flaws in its design. • Cyber peace – Organized cyber criminals have realized that it is easier to steal $1 from a million people, than to steal $1 m from one person. • Rogue states – Without a common base level of data protection and computer misuse legislation, there always will be territories that provide a safe haven for cyber criminals and hackers 10/5/2016 34

Cybersecurity Statistics • Attackers had access to victims’ environments for 205 days before they were discovered • Sixty-nine percent of victims learn from a third party that they are compromised • Attribution is becoming harder as the lines blur between tactics used by cyber criminals and nation-state actors • Threat actors have used stealthy new tactics to move laterally and maintain a presence in victim environments 10/5/2016 35

Ransomware Attack- the Criminal: • Hacks into your system • Encrypts your data • Demands a ransom before they decrypt • Increasing risk of these attacks: – Focus on critical assets for bigger money – Increased use of mobile payments systems – Target employees, suppliers and contractors to access system 10/5/2016 36

Ways for others to gain access • “Io. T” (internet of things) wireless transmissions • “connected everything” Infrastructure monitoring • Greater connectivity => more points of entry “The Internet of Things will continue to grow and get hacked” 10/5/2016 37

Sony Pictures – an epic hack attack: • Data destroyed, stolen, exposed • System availability denied/degraded • Present and former employees personally impacted • Lawsuits • Brand damaged 10/5/2016 38

Sony: A systemic security failure? • • A history of being attacked A “live with the risk” attitude Known weaknesses not remedied Pw. C audit: – One firewall and > 100 other devices not monitored by corporate security team – “Security incidents impacting these network or infrastructure devices may not be detected or resolved timely 10/5/2016 39

Group Discussion Q: A disaster puts your offices and computer off limits for 3 days. Are you: • well prepared with a written plan ready to execute? • somewhat prepared? • not clear on how you would cope? • in deep trouble? 10/5/2016 40

Security strategies: Backup • The ultimate protection against: – Data loss and data ransom – User error and system failure – Natural and man-made disasters • Review current strategies and test current implementations • Consider available options (cloud, physical) 10/5/2016 41

Strategies: Encryption • Time to do more encryption, not less • Encryption products have improved • Offer protection in case of breach • Encrypt in transit as well as at rest • Check your cloud provider’s use of encryption 10/5/2016 42

Strategies: Policy & Compliance • Start of a new year is a good time for assessment • Are your information security policies complete and up-to-date? • Are you aware of new laws affecting your compliance around privacy and data protection? 10/5/2016 43

Strategies: IT Dept. Internal Best Practices 1. Monitor applications with access to data 2. Create specific user access controls 3. Collect detailed logs 4. Maintain up-to-date security patches 5. Beware of social engineering (impersonator contacts) 6. Educate and train your users 7. Outline clear use policies for new employees/vendors 8. User activity monitoring 9. Create a data breach response plan 10. Maintain compliance 10/5/2016 44

“Do Care to Exercise Due Care” • Compliance with rules & regulations is not the same as being secure • Liability under the law hinges on a standard of reasonableness and due care 10/5/2016 45

Cyber Pledge By signing this pledge, I agree to: Take personal responsibility and use good cybersecurity practices at work and home. • Think before clicking links in emails and on websites. • Hover links to see the real URL and never click links or open attachments that look suspicious. • Be skeptical of emails that threaten I will lose something. • Use strong passwords—including letters, numbers and symbols—and never share them with anyone. • Never use a public Wi-Fi network for sensitive browsing, such as banking or shopping. • Lock my computer whenever I walk away. • Protect my mobile devices with passcodes, anti-virus software and remote wipe. • Refrain from posting personal, sensitive or non-public information on social media. • Report all IT security incidents or concerns. 10/5/2016 46

Computer and Cyber security Thank you! Scott Walters (swalters@dbllp. com) Daszkal Bolton LLP Florida, USA 10/5/2016 47

World Congress – Dublin 2016 Outsourcing – Threats and opportunities Pers Aswani & Scott Walters 10/5/2016 48

Outsourcing Threats and opportunities Presentors Pers Aswani – Partner Hazlems Fenton LLP Scott Walters – Partner Daszkal Bolton LLP 10/5/2016 49

Outsourcing Threats and opportunities Introduction • Future trends in technology • New technology affects all business sectors • Accountants use of technology • Outsourcing (technology and workforce) 10/5/2016 50

Outsourcing Threats and opportunities Some advantages of outsourcing • Lower staff costs • Fewer staffing issues (e. g. - recruitment, etc. ) • Lower office operating expenses • Quicker workflow turnaround • Ability to quickly ‘upscale’ and ‘rightsize’ 10/5/2016 51

Outsourcing Threats and opportunities Some disadvantages of outsourcing • Are clients happy knowing where work is done? • Loss of control of client data and process • Possible quality issues (training/oversight) • Less training and mentoring for junior staff • Impact on staff motivation 10/5/2016 52

Outsourcing Threats and opportunities Group Discussion • Experiences to share? • Threats? • Opportunities? • Good idea? 10/5/2016 53

Outsourcing Threats and opportunities Concluding Remarks 10/5/2016 54

Outsourcing Threats and opportunities Thank You! Pers Aswani Scott Walters Marielos de Rueda 10/5/2016 55