EY Cyprus: The future of Accountancy

Andreas Avraamides, Head of Assurance Services at EY Cyprus, discusses the future of the accounting profession, explains how EY helps its clients navigate an increasingly complex regulatory environment, and comments on the proposed forthcoming changes to the country’s tax system.

Given the rapidly evolving global business landscape, what role do you expect accounting firms to play in the future and how do you envision their function and influence?

In this rapidly evolving business environment, accounting firms are expected to continue being trusted business partners and strategic advisors to their clients and associates. As the assurance landscape is becoming more complex and demanding nowadays, their role is pivotal. Beyond traditional services such as audit, corporate reporting and tax, firms like ours are called upon to provide, amongst others, insights and advice on risk management, regulatory compliance, business transformation and transactions in a way that delivers maximum value to clients, aligning with their objectives to adopt technology and sustainability practices. Additionally, accounting firms are expected to play a crucial role by providing assurance on sustainability and ESG reports, navigating complex international regulations and advising on cybersecurity and risk management. By investing in talent development and new technologies and fostering enhanced stakeholder engagement, accounting firms will emerge as comprehensive business partners, adept at navigating the complexities of the modern business environment while upholding ethics and accountability.

The global regulatory environment is becoming more complex. How does EY help businesses navigate these changes effectively?

EY actively supports businesses as they navigate the increasingly technical, demanding and complex global regulatory environment by providing comprehensive solutions, insights and thought leadership material around both current and forthcoming regulations. With a focus on the fast-changing landscape, we leverage our global presence and dedicated public policy teams to help our clients identify and address regulatory challenges effectively, enabling them to take informed decisions and actions in a timely manner, while permitting them to focus on their business core activities. Our team of experts stays up to date with the latest regulatory changes and trends and with, access to a global network of professionals and knowledge, we provide the necessary insights to navigate the complexities and challenges of the regulatory landscape. Understanding that each client has unique needs, we offer leading-class, tailored services that align with their specific requirements, ensuring that they receive the most relevant and effective support in managing their regulatory obligations. This approach not only helps clients meet regulatory requirements but also fosters a shared understanding of related issues among stakeholders, ultimately enabling businesses to thrive in the complex regulatory environment.

The accounting profession is facing challenges in talent acquisition and retention. How is EY Cyprus ensuring that it attracts and retains top talent?

EY Cyprus is committed to attracting and retaining top talent by implementing a multifaceted talent management approach. This includes investing in the continuous development of our main asset – our people – through both internal learning as well as sponsored external qualifications (ACA, ACCA, CFA, CISA, etc.), offering competitive compensation packages and benefits that align with industry standards, providing flexible working arrangements, as well as fostering a positive and inclusive workplace culture that values diversity and collaboration. In addition, EY Cyprus empowers professional development through mentorship programmes and clear career progression paths, enabling our people to grow their skills and advance in their careers. By creating an environment that supports both personal and professional growth, EY Cyprus effectively positions itself as an employer of choice in the competitive professional services landscape. We are proud to be supported in this effort by universities, which provide the opportunity to their students to experience working in EY, before and after graduating, in the form of internships and other graduate schemes (e.g. long internships, summer internships, trainees, etc.).

As someone with extensive experience in assurance services, what advice would you give to businesses looking to strengthen their financial transparency and corporate governance?

In an era that demands greater transparency in corporate reporting, both financial and sustainability reporting, businesses must adapt to meet these expectations. The introduction of new regulations aimed at enhancing market transparency underscores the urgency for organisations to strengthen their financial governance. To achieve this, companies should leverage advanced technologies, such as innovative financial software and data analytics tools, including artificial intelligence, to improve accuracy and transparency in reporting. Continuous training of their employees on financial reporting standards and ethical practices is vital to ensure a knowledgeable workforce committed to transparency and strong governance. Developing comprehensive reports that clearly outline financial and sustainability metrics, along with utilising digital tagging standards like ESEF, can significantly enhance accessibility. Additionally, establishing robust internal controls is essential for detecting and preventing discrepancies and fraud, while active oversight from those charged with governance fosters a culture of accountability. Open communication with investors and stakeholders is crucial for building trust, and regular internal audits help ensure compliance with legal and regulatory requirements. Organisations should also ensure that key control functions are staffed with well-trained professionals and consider engaging external consultants for impartial assessments. By benchmarking against industry standards, businesses can identify areas for improvement. Ultimately, cultivating a culture of ethics and integrity, coupled with a long-term governance strategy aligned with business objectives, will pave the way for sustainable growth.

The proposed tax reform has generated significant debate. What is your perspective on the proposed changes?

The proposed tax reform is progressing positively, particularly highlighting the correction of a tax differentiation that previously disadvantaged Cypriot shareholders. The abolition of deemed dividend distributions and the reduction of the Special Defence Contribution on dividends for Cyprus tax residents from 17% to 5% are a move in the right direction addressing an inbalance that dissatisfied Cypriot versus non-Cypriot shareholders. While we acknowledge that the increase in the corporate tax rate was not mandatory, we are optimistic that it will not deter foreign investment since Cyprus has many other competitive advantages, such as non-dom status and significant deductions for new employees. However, there are some concerns about the lack of a comprehensive reform package, given that only tax relief measures have been presented so far. There is also concern about the potential reintroduction of property tax and the imposition of company levy. In our view, broad measures that could disproportionately impact companies should be avoided, advocating instead for targeted solutions tailored to the size and activity of each business.

Contact Information

Address: 10 Esperidon street,

1087 Nicosia, Cyprus

Website: ey.com

Tel: +357 22 209 999

Email: info@cy.ey.com