PQ magazine, September 2021 by PQ magazine

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September 2021

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ACCA ACTION PLAN IS HERE ACCA will offer students who have their Strategic Professional exam sitting disrupted because of technical issues the chance to sit another sitting “in the immediate days following exam week”. The remote invigilated contingency exams will run from Saturday 11 September to Wednesday 15 September. ACCA explained: “Students will be able to re-attempt their exams within the same two-week window of that sitting.” Previously this contingency had been only available for Applied Skills exam papers, but from September they will now cover all the Strategic Professional exams, too. This was one of the demands PQ magazine’s Graham Hambly took to a recent meeting with ACCA head of UK Claire Bennison and director of customer service Leigh Currie. During the meeting ACCA acknowledged having contingency exams for the higher levels was a good idea and promised to explore it as an option – well they have, and have now made it happen.

PQ magazine also called for a clear action plan, and ACCA has one of these too! It has agreed an action plan of system reviews and enhancements to ensure it can mitigate the risks of future disruptions. It said: “We have an agreed action plan of system reviews and enhancements that takes us to the September exam session and will provide reassurance to all out students and employers.” Included in this plan is full endto-end testing ahead of September,

alongside a range of ‘continuous improvement activities’. For those taking RI exams ACCA has introduced a new interactive system test for all students, so they can check they meet the minimum requirements needed to take an exam remotely. ACCA is currently planning for centre-based exams in September in the UK. Working with partners Pearson Vue and the British Council, it has reviewed venues that had issues in June. Some

centres will not be used again, with improvements being put in place for others. When it comes to power, all the larger sites will be signed off by a qualified electrician to ensure there is no repeat of the power and cabling issues seen earlier this summer. ACCA will also ensure all machines are connected to the same network, a network diagram will be provided, and relevant testing done as close to the session as possible. As PQ magazine suggested, photographs will be provided by each exam centre, with new checks covering social distancing and cabling. In an effort to end the ‘Monday problems’ a British Council technician will be strategically located at major venues on the first two days of exam week. Finally, ACCA believes its feedback survey post-exams captures the issues that need to be addressed. This means it is vital sitters complete them.

Due to the growing demand for e-learning and the need for additional quality learning solutions in a number of markets around the globe, CIMA is expanding access to its CGMA Finance Leadership Program to markets outside of the UK. It will offer a new and alternative route to study and earn the Chartered Global Management Accountant (CGMA) designation and become a CIMA member. The CGMA Finance Leadership Program is a digital platform that

offers comprehensive e-learning and assessments covering the Operational, Management and the Strategic levels of the CIMA qualification. It is based on the same syllabus as the CIMA Professional Qualification, practical experience requirements and Code of Ethics. Students that use the CGMA Finance Leadership Program learn finance, accounting, business, people, leadership and digital skills online, in a fully digital environment, and are assessed and tested continuously as they learn. This

new learning experience includes scenario-based learning, simulation assignments, interactive exercises and videos to ensure that students can fully understand and master the content. Students also have access to mock Case Study exams to help them build confidence ahead of the official exams. The Program is an all-inclusive bundle that includes registration fees, tuition expenses, exams fees, and dues. Students can opt for one, two or three-year subscriptions depending on how much time they

believe they will need to complete the CIMA qualification. The price is £1,995 for one year, £2,995 for two years, and £3,995 for three years. There is currently a discount for current CIMA students who wish to join the Finance Leadership Program. CIMA told PQ magazine that they are looking at the opportunities to adopt this approach in the UK and are working through how best to respond to the interest they are getting from students, employers and universities requiring selfserviced e-learning.

NEW ROUTE TO CIMA MEMBERSHIP

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Pick HTFT for AAT Starting September 2021, we have live courses for AAT Level 3. HTFT live: pre-recorded syllabus videos that lead into scheduled live online interactive Masterclasses (with expert tutors), all designed to support your mastering of knowledge – accompanied with computer based tests and mock exams For more information visit www.htftpartnership.co.uk/courses/aat/

Think ACCA, think HTFT We have a full suite of ACCA Applied Skills and Strategic Professional courses for December 2021 exams starting March.

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Study CIMA, choose HTFT Studying CIMA? Our HTFT live, HTFT on-demand and HTFT play resources are all here to help you prepare for, and pass, your exam. HTFT live: join our expert tutors live online for interactive Masterclasses, designed to support your application of syllabus knowledge. HTFT on-demand: drive your learning, with full flexible resources that you control HTFT play: Boxsets of topic recording and Proficiency exam-style practice assessments For more information visit: www.htftpartnership.co.uk/courses/cima

CIMA F1 live starts 8th September, CIMA F2 live starts 29th September and CIMA F3 live starts 28th September

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IN THIS ISSUE

September 2021

A note from the Editor ACCA has moved fast to ensure it has all the bases covered for September’s exam sitting. It’s great to see it really listened and has reacted so positively and quickly with its new action plan. Hats off to the ICAEW too, who decided not to make final level case study sitters have to resit the exams all over again, when servers started to play up three-quarters of the way into their summer test. We have a jammed-packed issue as always, with ACCA exam tips (page 31), a report on how CIPFA is helping support mental health in the public sector (page 22), and advice to CIMA PQs about the best way to approach their case study prep (page 37). CONFERENCE CALL We are also joining forces with our friends at LSBU for what will be our fifth annual conference. Entitled ‘Tomorrow’s World – a brighter future for accountants?’, it will be delivered virtually on 24 November. You can get ahead of the game by signing up at https://tinyurl.com/3ztjcpuk Keep safe and keep reading. Graham Hambly, Editor and Publisher, PQ magazine News 04 CIMA exams Institute’s latest set of results seem to show the ‘P’ papers are getting harder 05 Sustainability ICAS sign up to the Prince of Wales’ new ‘Terra Carta’ initiative 06 ACCA exams Pass rates for the AA and PM papers are disappointing once again 08 ICAEW exam problems Institute quick to act after server overload causes exam chaos 09 International standards IASB puts forward reduced disclosure for subsidiaries

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10 AAT salary survey PQ salaries rise on average by 10% in the past two years 12 Tech news Artificial intelligence driving new planning and forecasting Xero tool Features, etc 14 Have your say Thanks, PQ, for fighting ACCA students’ corner; my ICAEW exam nightmare; plus our social media round-up 17 Debits and credits Do you know your credits from your debits? Michele Baker explains some methods to help you learn – and remember – what’s what

18 The pandemic ACCA CEO Helen Brand looks at how Covid19 has changed people’s views on their career path 20 ICAEW spotlight How the Ethics Learning Programme can help you do the right thing 21 ACCA’s SBL exam Assurance mapping is new to the syllabus – so what is it? 22 CIPFA spotlight Institute is investing in resources to help both students and members with their mental wellbeing 23 AAT focus Our resident AAT expert Teresa Clarke explains three mathematical concepts that you should know all about 24 Test bank What do you know about the disposal on noncurrent assets? Test yourself and you’ll find out!

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37 CIMA case Preparation is key to the case study exams 38 Keep it simple Neil Da Costa explains the ways of winding down a company 40 Wellbeing Tips for looking after yourself in the exam season

26 A question for Tom Top man Tom Clendon explains the concept of substance over form

41 Careers Life at CIPFA with our Mentor of the Year; Agony Aunt Karen Young’s career advice; and our book review

27 Back to basics Business valuations in the spotlight

42 Fun The lighter side of life; and more great PQ giveaways

28 AAT RI exams Are remotely invigilated exams right for you? 30 ACCA paper order You can massively improve your chances of qualifying by sitting the exams in logical – not number – order 31 ACCA exam tips We have FIVE pages of great exam tips to help you get a pass 36 AAT progess You’re about to finish your AAT studies – so what comes next?

The columnists Lisa Nelson How PQs can learn lessons from the Olympians 4 Robert Bruce US has it right when it comes to whistleblowing 6 Prem Sikka Enron will happen again with tough audit measures 8 Anna Kate Phelan Why digital textbooks are the way forward 10 Mike Day Why accountants must embrace digital transformation 12

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PQ Magazine September 2021

LISA NELSON Gold medal success is all down to practice Watching the Olympic Games is a little bit different this time. Firstly, it’s a year late and, secondly, there are no crowds to create an atmosphere to motivate the athletes at those crucial moments. And yet despite these problems they all seem to be in top physical condition and competing as fiercely as ever. One thing that they all have in common is a very high work ethic – they devote a huge amount of time to practice and repetition. Studying for a professional qualification is not dissimilar. Bear with me… you need commitment, focus, a high work effort and to spend a lot of time practising. But how should you practice? The term deliberate practice was coined by psychologist Anders Ericsson; he identified a type of practice that was effective at improving performance. He argued that it should actually be designed to improve performance, capable of repetition, provide continuous feedback and be demanding (and is probably not much fun, either). But what could possibly satisfy all of these requirements? Well, how about exam questions? We know exam questions are good for learning because they force recall but maybe they are also an effective way to practice. All you need now is that gold medal! Lisa Nelson is Director of Learning at Kaplan

Are CIMA ‘P’ papers getting harder? CIMA has released the latest OT and case study pass rates, and generally speaking pass rates are down. The OT pass rates, particularly in the ‘P’ papers have slumped, when compared with rates for the whole of last year. The pass rate for P3, for example, is now 44%. The current P1 pass rate is 48% and for P2 its 50%. Students seem to be struggling more with F3, too. It has a pass rate of 48%. The rate for the whole of 2020 was 57%. The May Operational case study overall pass rate also slipped to 46%. It was 60% in February 2021, so that is a big drop. Stephen Flatman, Vice President, Examinations – Management Accounting, said: “Our students’ overall exam performance continues to be strong – it’s a testament to their dedication, hard work and enthusiasm for learning

toll on our students, meaning that some of our pass rates are a bit lower than they have previously been. “Students shouldn’t get disheartened if they fail an exam. If they do, they should take some time out to reflect on what went wrong and identify the steps they need to take to ensure that they pass the next time around. It’s also a good idea to seek advice from family, friends or a tutor.” OT PASS RATES (1 June 2020 – 31 May 2021): E1 81%; E2 87%; E3 68%; F1 79%; F2 56%; F3 48%; P1 48%; P2 50%; P3 44%

Stephen Flatman

and progressing their careers. However, we are still navigating challenging times and understand that the pandemic has taken its

CIMA CASE STUDY PASS RATES May 21

Feb 21

Nov 20

Aug 20

Operational

46%

60%

53%

47%

Management

69%

71%

74%

59%

Strategic

68%

67%

69%

56%

Do you need to get back to the office? Young people need to go back to the office if they want to get on, says Chancellor of the Exchequer Rishi Sunak. He warned them in an interview with LinkedIn’s Siobhan Morrin that video conferencing was no substitute for building key long-term relationships. In fact, he felt working from

home may actually hurt your career. He doubted he would have done so well if he had started his working life virtually. Sunak explained: “I doubt I would have had those strong relationships if I was doing my summer internship or the first bit of my career over Teams and Zoom. “That's why I think for young

people in particular, being able to physically be in an office is valuable.” His view is backed-up by the Hays survey at the beginning of 2021 which found that just 12% of PQs said they would like to be working fully remotely. Just 30% of trainees in the same survey said they wanted to be working half remotely and half in the office.

How Covid has changed career aspirations With financial security becoming more important for Generation Z, accountancy is becoming a career of choice in our Covid-19 world. ACCA CEO Helen Brand recently went on the media trail to explain how new research had found that one in 10 young

people have changed their career choice as a result of the pandemic. There are around six million 16–24 year olds in the UK, and ACCA polled over 1,000 to better understand their views about jobs. While before

the pandemic 21% wanted to pursue a professional career like accountancy, that figure has increased to 30%. Brand appeared on LBC drive and London Live. Check her out at https://tinyurl.com/dfbzmcce. • See the full story on page 18.

In brief Pap Tutor in your pocket Here’s your chance to win a free PM course with an expert ACCA tutor – only with PQ magazine! Up for grabs is Jo Tuffill’s Platinum Package, which includes tuition, revision and a mock. The course will run for 12 weeks and would normally cost £550. Student support is the most important part of Jo’s service and you will be supported from the very start of your 4

studies, right up to the December exam. Check out how to win that PM course on page 33. Pap Big fine for KPMG KPMG has been fined £13 million and ordered to pay £2.75 million in costs over serious misconduct during the sale of bedmaker Silentnight to private equity firm HIG. The firm also received a severe reprimand and ordered to appoint an independent

reviewer to conduct a root cause review. Former partner David Costley-Wood was fined £500,000, severely reprimanded and excluded from holding an insolvency licence. The Financial Reporting Council sanctions follow a referral from the Pensions Regulator. The tribunal described KPMG’s involvement with Silentnight as ‘deeply troubling’, as it failed to act solely in its client’s interests. It concluded that the lack of objectivity went to the core of the relationship between Silentnight and KPMG.

Pap AAT grows presence in India and Saudi Arabia AAT has increased its international presence with its first employer scheme members in India and Saudi Arabia. In India, Bedford Square Knowledge Center Pvt Ltd has become the first employer scheme member, while Saudi Arab British Bank (SABB) has joined the scheme in Saudi Arabia. Both are supporting their finance staff with AAT training and membership. PQ Magazine September 2021

news

ICAS signs up to ‘Terra Carta’ ICAS has become the first accountancy body in the world to sign up to HRH the Prince of Wales’ ‘Terra Carta’ – a charter that aims to put sustainability at the heart of the private sector. The institute has pledged to support Terra Carta as part of its ambitious strategy to integrate sustainability into all aspects of its operations. The Prince of Wales said: “The

more companies that sign up to the Terra Carta, the greater its capability will be to drive the change we so desperately need. I can only encourage more people to join this urgent call to arms.” J Bruce Cartwright CA, ICAS Chief Executive, said: “HRH The Prince of Wales has made an extraordinary contribution to sustainability for many years, and it is a privilege to pledge our

support to the Terra Carta. “ICAS has an ambition to put sustainability at the heart of everything that we do – from the education that we provide to our students, to our work with our 22,000 members around the world. “We also recognise the transformative role that chartered accountants have in delivering the actions of the Terra Carta, to bring about lasting change as we seek to build a more sustainable world.”

ICAEW June professional exam results Some 6,450 ICAEW trainees sat down for the June 2021 professional exams. In all, 11,524 exams were ‘attempted’, with 4,646 ACA PQs passing all the exams they took. A total of 1,568 finished their professional level papers this session, and just over half of these PQs (866) did not fail an exam on the way. Just two ACA trainees took up the challenge of four papers and

the outcome wasn’t great – one of them passed one paper! More, 1,098, attempted three papers and 74.5% passed all three. Another 13.5% passed two out of three, and 7.7% one. This left 48 sitters (4.4%) failing all three. Some 2,516 PQs sat one paper. While 69.2% passed their exam, 775 (30.8%) walked away from the June paper with nothing. Andrew Dumble was the star for June. He picked up two order of

merit prizes. The Morgan Stanley PQ came first in the Business Strategy and Technology and the Business Planning: Banking papers. JUNE 2021 ACA PROFESSIONAL LEVEL EXAM RESULTS: Audit & Assurance 73%; Financial Accounting & Reporting 71.4%; Tax Compliance 80.4%; Business Planning: Taxation 81.1%; Business Planning: Banking 64.6%; Business Planning: Insurance 70.9% Business Strategy & Technology 92.5%; Financial Management 81.6%

Time to slow audit reforms? The UK government has been told it needs to slow down plans to overhaul the auditing profession. The Institute of Directors’ Roger Barker said that although the IoD supports the desire of the Government to address recent failings in audit and governance, the effects of the pandemic mean the proposals need to be phased in over a longer timeframe. Barker stressed: “We are particularly worried about the willingness and capacity of smaller challenger audit firms to take on major audits in partnership with the Big 4. “This is a step into the unknown for us all, and the concept needs to be properly tested before it is rolled out.”

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PQ Magazine September 2021

ROBERT BRUCE What we could learn from across the pond This country should stop dithering about its special holidays. Forget the to-and-fro over a day’s national holiday for winning, or not winning, the European football. We should take our cue from the US. In July the main regulatory body, the Securities and Exchange Commission, held its annual National Whistleblower Day. Sadly, it did not involve marching bands, cheer-leaders and a tickertape parade. But it certainly blew its own trumpet. The new chair of the SEC called on the nation’s whistleblowers to redouble their efforts. In the context of the UK’s efforts to track down corporate wrongdoing it does seem extraordinary. But it is part of the cultural life of the US. Every July, and it was the 243rd anniversary this year, it celebrates the first whistleblowing law, brought in when 10 whistleblowers reported wrongdoing and abuses committed by a superior officer in the navy at the height of the American Revolution. And they take it very seriously, rewarding whistleblowers well. Since 2012 it has paid $942m to 186 whistleblowers and estimates to have recouped nearly $3bn. The SEC’s chair was enthusiastic: “Each week, when I see the Commission’s enforcement actions. I’m reminded how the whistleblower program helps us be better cops on the beat, execute our mission, and protect investors from misconduct.” Would that we had a similar culture here. Robert Bruce is an award-winning writer on accountancy for The Times

AA and PM pass rate ‘struggle’ ACCA exam sitters are still struggling to pass the performance management and audit papers, at both the Applied Skills and Options levels. The June pass rates saw drops (when compared with March) in both the PM and AA pass rates, to 42% and 39% respectively. The Strategic essential paper pass rates also dipped this time around. In March, the SBL pass rate was 50% and SBR was a healthy 52%. In June, SBL fell to 46% and SBR to 44%. Students had picked out the SBR paper as the hardest paper in the Open Tuition post-exam poll. PQs told

Everything you need to know about the 2022 AAT syllabus In a few months’ time a new-look AAT qualification is being introduced. PQ magazine, with the help of Training Link’s Mark Hempinstall, cuts through the misinformation to explain just what’s happening with Quals 22. He looks at how all the units fit together and reminds students that accounting is a ‘building block’ subject. What you learn

at the very start of your studies is essential to your future understanding and interpretation of the subject. Hempinstall looks at the three strands: financial accounting, management accounting, and what he calls the general business strand. Check out this great short video at https://vimeo.com/574032702

The bottom line is diversity works! Diverse boards lead to better corporate culture and performance, according to new research from the Financial Reporting Council. The accountancy watchdog said there has been a step-change over the past decade, with UK listed company boards becoming more diverse than ever before. This is primarily the result of the Hampton

In brief Pap In conversation… PQ magazine editor Graham Hambly recently took time out to chat to Premier Training’s Lee Jones about all things AAT. They discussed the remote invigilated exams, pass rates and the latest AAT salary survey. You can catch up on what they said at https://tinyurl. com/33rvdm79

us of the ‘bizarre’ nature of some questions, and others found it a very timed-pressured test. Both APM and AAA options had a summer pass rate of 32%. That means two out of three sitters failed these papers. In all, some 21,000 June sitters sat their exam remotely, and ACCA’s Alan Hatfield (pictured) said: “I want to reassure students that we’ll continue to help them progress by offering remote

Alexander review and more recently the Parker review. The main findings of the research concluded that: • It is the responsibility of the chair of a board to drive inclusion. • Regulators and companies must focus on collecting more data on types of diversity, board dynamics and social inclusion.

invigilated exams where needed.” He also reminded students that those who use the ACCA exam Practice Platform achieve pass rates that “are up to 20% better for… compared with those who do not”. ACCA JUNE 2021 EXAM PASS RATES: BT 88%; FA 74%; MA 68%; LW 86%; TX 50%; FR 51%; PM 42% FM 53%; AA 39%; SBL 46%; SBR 44%; AAA 32%; AFM 39%; APM 32%; ATX 41%.

Challenger firms increase audit share New data from the Financial Reporting Council (FRC) has revealed the challenger audit firms have increased their share of FTSE 250 audits up to 7.6%, from 4.8%. However, all FTSE 100 companies continue to be audited by a Big 4 firm. The FRC’s latest Key Facts and Trends in the Accountancy Profession (KFAT) found that the five largest challenger firms outside the Big 4 audited 19 FTSE 350 companies, up from 10 the previous year.

• The Nomination Committee itself should be diverse and have a clear mandate to work with recruiting firms that access talent from wide and diverse pools. • The greater representation of women in the boardroom is reshaping culture and dynamics and benefiting businesses from a social justice as well as a performance perspective

JOB OF THE MONTH PQ Management Accountant

This Leeds-based company is looking for a ‘driven and bubbly’ PQ management accountant. You will provide technical and accounting support to the UK accounting team leader, and produce required reports and analysis in line with monthly and yearly accounting timetables. You will be a PQ ACCA/CIMA, with knowledge of accounting software packages, not exclusively but preferably SAGE 200. A salary of £26,000 – £30,000 is on offer. Applications close on 25 August. For more see https:// tinyurl.com/2yvxcy8n PQ Magazine September 2021

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ICAEW acts quickly after exam server failure

PREM SIKKA Why more Enrons are inevitable

It is 20 years since Enron became a byword for fraud and audit failures. There has been a lot of huffing and puffing in the intervening years, but little of substance has changed. Directors have too much discretion in choice of accounting methods. Performance related pay encourages massaging and roasting of accounts as that inflates executive remuneration. Non-executive directors collect their loot and do little to check excesses. The UK still does not have a central enforcer of company law. Accounting standards continue to be effectively set by corporate bigwigs and large accounting firms. We don’t have ‘audit only’ accounting firms. Auditors continue to sell non-auditing services to audit clients and it is impossible for them to be objective in auditing the transactions that they created. There is no transparency about the audit process. Secrecy surrounds the composition of audit time, audit time budget and fees. None of this helps to call auditors to account and curb rapacious practices. The quality of audits is rock-bottom. The Financial Reporting Council recently said that 29% of the audit delivered by the big seven accounting firms were defective even though they have been auditing for over a century. Successive governments continue to appease corporate grandees and the auditing industry with minimal corporate governance and reform. More Enrons are inevitable. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

ICAEW acted quickly after a server overload led to the final level case study exams closing down before students could finish. After consulting the Financial Reporting Council (the regulator) it was agreed that students who lost time would not have to resit. Instead, ICAEW will moderate their existing attempt, with the plan to release results as normal on 27 August. ICAEW kept PQ magazine in the loop, and stressed how sorry it was for the problems: “We sincerely apologise to all the students who have been affected by these unfortunate events. This is far from the experience we want for our students; it simply wasn’t good enough, and we want to put things right.”

The ICAEW also praised the FRC’s pragmatic and fair response. ICAEW’s Shaun Robertson (pictured) explained that students had sat 85% of the exam (3.5 hours) and it didn’t seem fair to make them do it all again. All the papers will now be moderated

accordingly. He explained that although its supplier had upscaled the server capacity to its maximum level, due to an underlying issue the capacity was still was insufficient. He promised that this failing will be rectified by the next sitting.

Connect with Premier Training and expertise, and will include a raft of new resources and features across the Premier Training website and social media channels, including tutor tips, more Facebook Live sessions, competitions and giveaways, podcasts, mental health tips and support, free study support sessions, and ‘star student’ awards. Rose Crockett, Premier

Training’s Operations Director, said: “As a team, we take great pride in the levels of support and guidance we offer to students. That has been Premier Training’s philosophy for more than 23 years. “Now, more than ever, AAT distance learning students require support and advice. We are aiming to bring together the combined expertise of the Premier tutors, AAT students and our partners to provide a truly supportive and inclusive network.”

they are willing to join Race to Zero before COP26 in November, are being encouraged to register. Bruce Cartwright, ICAS Chief Executive, said: “To combat climate change and create a sustainable future we all have a role to play and chartered accountants are well placed to be trailblazers

in the business community and to encourage their organisations and clients to sign up to becoming net zero.” For more information on how to make a difference and take part visit icas.com/1000-charteredaccountants, www.icaew.com/1000 or www.charteredaccountants.ie/.

Premier Training has launched a new initiative, Connect@Premier, which aims to provide even more support for AAT students. The training provider is establishing a community of AAT students who can benefit from advice from the Premier Training team and one another. Connect@Premier brings together that combined experience

The race to net zero A new campaign has been launched to find 1,000 chartered accountants who are helping to fight the climate crisis. Accountants who are members of ICAEW, ICAS or Chartered Accountants Ireland who have helped their organisation or a client sign up to the UN Race to Zero, or if

Taxwatch Pap No professional body = no tax advice! The new President of the Association of Taxation Technicians (ATT) has used his first speech to urge the Government to make membership of a professional body mandatory for all providers of tax advice – to raise standards in the tax advice market and give the public greater trust in their tax adviser. In a speech to the ATT’s online AGM, Richard Todd said that PII

alone is unlikely to be sufficient to resolve the problems the Government has identified in the tax advice market. He said: “Professional Indemnity Insurance is compulsory for ATT members in practice. That has been the case for many years [and] we definitely see PII as a good thing. “It is, however, important to recognise the limitations of introducing mandatory PII for all providers of tax advice… real

consumer protection requires so much more than just PII. It depends on rigorous professional standards and easy access to redress through complaint and disciplinary processes.” Pap Fighting climate change A new tax on meat is needed if we want to be serious about fighting climate change, says UK food tsar Henry Dimbleby. In a new report he is pushing

the government to introduce a levy on processed meats such as ham, bacon, burgers, sausages and chicken nuggets. PM Boris Johnson ruled out a meat tax earlier this year; however, this won’t help the UK achieve net zero carbon emissions by 2050. Experts point out that a fifth of carbon emissions come from food, and together with the rise of obesity many believe Johnson will have no choice but to start taxing meat.

PQ Magazine September 2021

news PQ

Mental health IASB puts forward reduced is a global issue disclosure for subsidiaries Mental health issues have become as big a global issue as climate change, claims BP CEO Bernard Looney. He recently told The Times newspaper that companies need to end the stigma that surrounds mental health and “make it OK for people to not feel OK”. He felt the pandemic has made things worse. He has spent most of the last year or so working from home like many, and said “living on your own can be lonely”. Looney stressed that everyone has had a challenging time and was concerned that there was still a high degree of shame surrounding mental health because “we are brought up in a world that’s more and more competitive”. He explained: “Particularly in the past, in a male-dominated world, you have to be the best, you have to not show weaknesses. I think the opposite is true. Showing people you are a real person with real issues draws them closer to you.”

The International Accounting Standards Board has proposed a new IFRS Standard that would permit eligible subsidiaries to apply IFRS standards with a reduced set of disclosure requirements. The proposals respond to feedback from stakeholders and are designed to ease financial reporting for eligible subsidiaries while meeting the needs of the users of their financial statements. The proposed standard would be available to subsidiaries without public accountability –

companies that are not financial institutions or listed on a stock exchange – whose parent company prepares consolidated financial statements applying IFRS Standards. These subsidiaries report to their parent company for consolidation purposes, applying IFRS Standards. Electing to apply the proposed Standard would enable them to also use IFRS Standards when preparing their own financial statements but with reduced disclosures. The proposals would save

Get Back to Basics Accountancy is simple if you know the basics. PQ magazine is building its Back to Basics video series with the help of award-winning lecturers. The series looks at assets, trial balance and debits and credits, to

name a few. This month we are adding business valuations to the list. Sunil Bhandari explains the basics behind business valuations (see page 27 in this issue for the feature and link to the video). So, what videos do we already have for you: Assets, with Tom Clendon https://vimeo.com/545939340

subsidiaries time and money by: Eliminating the need to maintain an additional set of accounting records for reporting purposes – if the subsidiary currently does not apply IFRS Standards in its own financial statements; and Reducing the disclosures required to comply with IFRS Standards. The IASB has tailored the disclosure requirements in the proposed Standard to meet the needs of financial statement users of subsidiaries without public accountability. Access the Exposure Draft Subsidiaries without Public Accountability: Disclosures.

Trail Balance, with Michele Baker https://vimeo.com/500074449 Financial Maths for AFM and FM students, with Sunil Bhandari https://vimeo.com/446780185 Strategic Planning Process, with Sean Purcell https://vimeo.com/437139421 Double Entry Bookkeeping, with Tom Clendon https://vimeo.com/429252329 Weighted Average Cost of Capital (WACC), with Sunil Bhandari https://vimeo.com/536755049

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PQ news

ANNA KATE PHELAN Going paperless takes the stress away Education giant Pearson has recently launched a direct-to-consumer app that allows university students to access digital textbooks through an ‘all you can eat’ subscriptionbased model, rather than the traditional model of a one-off purchase of a printed textbook. Pearson+ has been described as a Netflix-style app, which will come as a breath of fresh air to university students who are usually left with a hefty textbook bill and less and less space on their shelves at the end of each year as cumbersome books, pretty much redundant after the exams, pile up. Additionally, there are many other upsides to this method of delivery. Students will no longer have to be concerned about a sudden rush at exam time to the university library, and up-to-date content on the app will ensure all students have a level playing field. Pearson is following a longestablished trend in order to secure its survival; the digital transformation of learning over the past 20 years has revolutionised the industry and continues to maximise efficiency for learners. The utilisation of technology for learning content distribution is now a key delivery model for accountancy training organisations. Many of you already reap the benefits of using Learning Management Systems (LMS), such as Rogo, which enable organisations to easily share and update their content at any time to many students all around the globe. Anna Kate Phelan is Senior Product Manager at Eintech

AAT salaries on the rise Salaries for PQ AATs have increased by almost 10% over the past two years, according to the latest AAT salary survey. Average PQ earnings are now £22,000 a year, up from £20,000 in 2019. For Affiliates the average take home pay is £24,500. PQ and affiliate female AATs out-earn their male counterparts, a whole £1,000 more on average. However, this does not translate to members, where men earn 8% more than female MAATs. That is up from 5% two years ago. Men were also more likely to get

CIPFA to transform assessment process with help of Eintech

CIPFA has joined forces with Rogo to introduce an online assessment platform for students studying its professional qualifications. The Rogo platform, provided by Eintech, will give PQs a more rounded assessment model that CIPFA says will “continue to test technical competency but in realistic, work-based contexts”. Signing up Rogo is part of a wider CIPFA strategy to refresh its professional qualifications.

No meaningful improvement in audit quality Just under one in three audits (29%) recently reviewed by the FRC required ‘improvement’ or ‘significant improvement’, and the worry for the inspectors is that this is only a slight improvement of last year’s figures. The latest FRC Annual Audit Quality Inspection Results 2020/21 found the quality of audits across firms was ‘mixed’, with KPMG called out for specific concerns over its banking audits. Inspection results at KPMG did not improve and the FRC said it is unacceptable that, for the third year running, it found improvements were required relating to KPMG’s audits of banks and 10

a salary increase, with 54% of men working full-time getting a pay rise, compared with 48% of women.

Anna Howard, CIPFA’s Head of Qualifications and Membership, said: “The robustness of CIPFA’s online examinations is fundamental to the integrity of our professional qualifications. “We’re looking forward to working with Eintech to develop and future-proof assessment methodologies for our students, and the way in which they can support future enhancements to the assessment of our qualification.” James Carter, Eintech CEO, said: “Eintech are proud to have been chosen to support CIPFA’s vision for the future of their assessment programme. Rogo’s ability to deliver innovative question types, incorporating spreadsheets and complex multi-part questions, will help CIPFA to meet its long-term objectives.” It is intended that Rogo will be available students for the December 2021 exams.

similar entities. Given the systemic importance of banks to the UK economy, the FRC stressed it will be closely monitoring KPMG’s actions to ensure findings are addressed in a timely manner. KPMG has agreed additional improvement activities to be delivered this year over and above its existing audit quality improvement plan. FRC CEO Sir Jon Thompson acknowledged

The report, which was last published in 2019, shows that the average basic salaries of AATs has risen at every level. Current salaries range from an average of £21,000 for Level 2 and 3 students to a median figure of £40,000 for FMATT members. The lowest paying regions for PQs and members are the North West and North East of England. Wales is the lowest paying region for affiliates, while London was the top paying region at all levels. • See www.pqmagazine.com for the full regional salary breakdown.

Coding and accountants Technology and digital skills are a core part of the accountant’s world. Digital adoption is on the rise, and accountants are increasingly being asked to leverage digital to enhance the value they bring, says ACCA in a new briefing paper called ‘Coding: as a professional accountant, why you should be interested’. Research among ACCA members showed that although 57% had no knowledge of coding, 40% expressed an interest in learning. Looking ahead three years, none of the respondents wanted to remain without any knowledge of coding. And over that same time frame, six in 10 wanted to develop a basic knowledge, and a further one in four sought advanced knowledge in coding. Lloyd Powell, Head of ACCA Cymru Wales, says: “Not every professional accountant may need to code, but even a basic understanding can add value to their organisations, help to differentiate themselves and open future career opportunities.”

that some critics might question what the FRC is doing and why audit quality improvement remain slow. Thompson pointed out: “Over the last 12 months the FRC has initiated its own programme of measures in response to many of the recommendations in the Kingman review such as: initiating operational separation of the Big Four firms; introducing enhanced audit standards in relation to ethics and fraud; building on our supervisory oversight; and strengthening our enforcement capability. “However, elements of these actions remain voluntary on the part of audit firms and this is why the BEIS White Paper ‘Restoring trust in audit and corporate governance’ is so important.” PQ Magazine September 2021

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tech news

MIKE DAY Embracing the cloud is key Digital transformation can be daunting, but accounting firms who use cloud-based digital processes have been able to offer far greater scalability and resilience. A global survey of over 1,100 accounting professionals in 18 countries showed that practices that use cloud technologies, embrace change and stay connected to their clients are those that are more likely to succeed (that’s more than just accounting software, it includes the ecosystem of related business cloud apps and Fintech such as online payments). According to ACCA, finance functions able to use technology well to maintain operations and adapt business models by fasttracking digital transformation will be far more secure and more competitive. In addition, as clients start to instigate digital transformation, they will rely heavily on their accountants to support and consolidate the new systems and softwares. Therefore, accounting firms will need to upskill their staff. It is now key to combine strong digital and financial knowledge with curious minds and a range of soft skills. Covid-19 has been hugely challenging for many; it has also been a catalyst for extraordinary change. Technology is driving the accounting industry forward at great pace. Accountants are in greater demand than ever before, and this will only amplify in the coming months as businesses reset, recover and rebuild. As a PQ, embracing change must become a skill in your toolkit. Mike Day, Director, UK Education Sector, Xero

Small businesses get AI-powered Xero has unveiled Analytics Plus, part of a new suite of planning and forecasting tools powered by artificial Intelligence. Aimed at small businesses, Xero Analytics Plus combines cash flow forecasting with advanced prediction and insightful business tools. The tools are, it says, the culmination of rigorous testing and development with the broader Xero community over the past two years.

All Xero customers can now try Analytics Plus for free, until 31 January 2022. Once the free period ends the standard pricing will apply. More information on pricing can be found here. Xero has also officially released Analytics, a free tool for all Xero Business Edition subscribers that combines the existing short-term cash flow tool, which visually projects cash flow over 30 days, and business snapshot

tool, providing up-to-date insights on business performance. Since the initial release in the pilot last year, the cash flow tool has been redesigned, with a new look and the ability to view future scheduled invoices and bills, while the business snapshot report can now be viewed on a cash or accrual basis. Xero’s chief product officer, Anna Curson, said: “To truly grow and thrive every business needs to have access to trusted, insightful data that helps them understand where they are now, make decisions for today and where they might be headed in the future.”

Robots could cut lawyer numbers in half A shocking new report from the Law Society claims that by 2050 AI will take over many of the job current done by junior professionals. In models created by researchers, the most ‘disruptive’ predicted that in 30 years’ time there will be 50% fewer jobs around for lawyers. The report, ‘Future Worlds 2050: images of the future worlds facing the legal profession 2020-2030’, reveals that in the 12 months to the end of July 2019 the number of solicitors with practising certificates

reached 146,953. However, the report revealed that the number of law practices was

already falling before the pandemic hit. Since 2009, the total number of private practice firms has fallen by 10% to 9,339. It said highstreet firms were most at risk of disappearing. There is some radical stuff in the report. Law Society director of strategy, Kion Ahadi, suggested that by 2050 “lawyers could find themselves having information and knowledge implanted directly into their brains”. This is something Elon Musk’s Neuralink is ‘testing’. You can read the report at https://tinyurl.com/3upexpce

New EU AML rules to include cryptocurrencies The European Commission is to extend anti-money laundering rules to encompass the entire crypto sector as part of its overhaul of financial crime safeguards. The new proposals include the creation of a stand-alone EU authority to fight money laundering and a single rulebook to ensure a consistent approach to fighting financial crime across member

states. The measures recognise the challenges of monitoring the crypto sector. Currently, only certain categories of crypto-asset service providers are included in the scope of EU AML/CFT rules. The reforms being proposed will extend these rules to the entire crypto sector, obliging all service providers to conduct due diligence on their customers.

The Commission believes the amendments will ensure full traceability of crypto-asset transfers, such as bitcoin, and will allow regulators to see if they are being used for money laundering or terrorism financing. Limits on hard cash payments are also to be harmonised, with the Commission proposing an EU-wide ceiling of €10,000.

Tech briefs Pap Another record quarter Apple, Google and Microsoft have all posted another record quarter of profits. Apple’s net income grew to $21.7 billion for the three months to the end of June. That is almost double the numbers achieved in the same quarter a year earlier. It all meant Apple reported a third straight record profit. Revenue at the company was up 36% at $81.4 billion. Microsoft saw a 21% rise in revenue to $46.2 billion, and profits climbed 47% to $16.5bn. 12

At Google’s parent, Alphabet, revenues jumped 62% to $61.9 billion. Profits nigh on tripled, rising from $7 billion to £18.5 billion. Pap Monzo faces money laundering probe Challenger bank Monzo is facing a criminal investigation by the Financial Conduct Authority for money laundering breaches. The digital bank is being investigated for breaking anti-money laundering rules and financial crime controls.

to £130 million. However, it is predicting it will be profitable by 2022.

The probe covers dates between October 2018 and April 2021. Monzo has five million customers on its mobile app, but its losses widened in February this year

Pap Blanket coverage Starlink, Elon Musk’s internet venture, is adding the Isle of Man to its already secured locations in Buckinghamshire and Cornwall. The new base should allow blanket coverage across the UK for Starlink broadband. A test service has already been launched, costing £89 a month, plus just under £450 for the satellite dish. PQ Magazine September 2021

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PQ to the rescue! I just wanted to say a big thank you to PQ magazine for being there and putting ACCA under the spotlight. The first Monday of every recent exam sitting has been plagued with problems. Yet there seemed to be no desire on their part to acknowledge the problems, let alone make changes. How many sittings did they need before they were going to do something about it? It seems the problems in the UK in June finally forced them to act. The video of the state of the exam rooms went far and wide. You asked for a clear action plan in last month’s issue, and like magic that is what I received in an email from ACCA this morning!

Now if there are technical problems at the Strategic Level there will be a resit exam

available. That option was already available for the Applied Skills papers, which had always seemed the wrong way around to me. The final level is where the resources needed to be put in first. But we got there in the end. I am sure your pressure helped ACCA to do the right thing, too. Name and address supplied The Editor says: ACCA has definitely become more open and transparent. The exam team seemed genuinely upset about what happened in June and were keen to make changes. The action plan (see cover) is a massive step forward and ACCA has lived up to its promise. Perhaps we don’t have to have so many fingers crossed this September.

Our star letter writer wins a fantastic ‘I love PQ’ mug! My ICAEW nightmare I have just sat the ICAEW case study and it was a total nightmare. Everything seemed to be working fine when we were all simply told to stop writing, at a really critical time in the exam. We were then told not to worry as the exam would be restarted at 1.30pm. However, after a nervous wait the invigilators told us this would not going to happen. So off home we trudged. Now ICAEW has told us they will mark what we have written, but how is that going to be done fairly? Name and email address supplied The Editor says: ICAEW told us immediately what was happening and explained that most sitters had completed 85% of the exam. It asked all students to log their details with the special consideration process and promised it will work hard to ensure no PQ is disadvantaged. It will even look at past results if necessary.

Audit body support There seems to be a growing backlash to the idea of a separate audit body. In last month’s PQ Iain Wright claims Sir Donald Brydon’s recommendations would be a ‘costly distraction’ and a drain on talent. I think he has missed the

point! In a post-Carillon world, we need real change that makes auditors totally independent of colleagues selling consultancy services to the same company. Why has that ever been OK? The £13 million fine for KPMG

over Silentnight is just the latest in a long line of fines for Big 4 firms for a lack of ‘objectivity’. Maybe it’s time for a new body with objectivity to steer the audit profession in the right direction. Name and email address supplied

Server capacity problems for ICAEW case study July sitters meant ‘paused’ exams were not restarted. ICAEW had hoped they could get everyone back online, but it was just not possible. The exams team acted quickly, contacting the Financial Reporting Council (FRC) to see what the next step should be and it was decided that the institute could mark what students had completed. Students went on social media to vent. Here are just some of the comments: “@ICAEW how can you not have protocols in place when there are system failures for a major exam?? I really hope you have a resolution for all parties involved which won’t be too damaging for their futures.” “Spent 3 months revising for an exam just for @ICAEW exam software to crash and have to resit in November nice one.” “Hi – a number of us had severe issues during our SBM exam yesterday whereby we were sent home without finishing the paper. I have not heard anything yet. Do you have any updates in regards to this?” “Amongst all the issues today with the @ICAEW case study exam, just want to say a huge thank you to all the invigilators at the Hilton Metropole in London today. They never told us to stop the exam at 12:30 when the issues arose and did their absolute best to help us throughout!” “Seems like more than just exam centres were having issues too, RI students (myself included) were struggling with software issues with the timer, extremely slow/zero response etc. Absolutely gutted for everyone.” “Do better next time. Nobody especially those who are sitting 3 exams in a row don’t need this kind of stress. “Do better, @ICAEW.”

PQ Magazine PO Box 75983, London E11 9GS | Phone: 07765 386489 | Email: graham@pqmagazine.com Website: www.pqmagazine.com | Editor/publisher: Graham Hambly graham@pqmagazine.com | Associate editor: Adam Riches | Art editor: Tim Parker Contributors: Robert Bruce, Prem Sikka, Lisa Nelson, Anna Kate Phelan, Mike Day, Tony Kelly, Phil Gammon, Edward Netherton | Subscriptions: subscriptions@pqmagazine.com | Origination services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email admin@pqmagazine.com

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debits & credits PQ

Debts in, credits out Michele Baker provides some top tips for getting your debits and credits right

uestion, do you know your debits from your credits? If I were to ask my (much) younger studying self that question, the honest answer would be no. However, I was very good at learning and memorising! But this creates a problem. You can only memorise what you have been given. So how can you deal with scenarios you haven’t already encountered? We cannot teach every possible scenario, so it is vital to work on your understanding. Techniques to tackle debits and credits These tips and explanations will firm up your understanding. You will learn in your studies that there are different ‘types’ of accounts: Income Accounts, Expense Accounts, Liability Accounts and so on. Using the acronym DEAD CLIC (Debit – Expenses, Asset and Drawings, Credit – Liabilities, Income and Capital) can help determine whether we need to make a debit or a credit entry to increase an account, to decrease that type of account we would just do

PQ Magazine September 2021

the opposite! We may not completely understand this at first but we can use other techniques to help with our entries. • You must make equal debit and credit entries for each transaction. • If you debit one account, the entry in the second account will always be a credit. • Try not to think about everything as money, think about what is actually happening. For example; if we buy stationery, we would have paid money for it but in return we have received the stationery. This is a common one! Examples of debit and credit entries Let’s have a look at some entries now. We sell goods and the customer pays by cheque. The entries we need to make in the accounts would be: Debit the Bank Account and Credit the Sales Account. But why are these the entries we make? Think of Debit as IN and credit as OUT. Now look at the entries again, the money has come into the business so we debit the Bank Account. The goods we have sold have gone out of the

business so we credit the Sales Account. This can be a good method to use while you are learning the basics. It is a little simplistic when transactions become more complex, but as an ‘Aide memoir’ it can be a good starting point. I talked earlier about understanding the different types of accounts, so let’s have a look at this too. The Sales Account is an Income Account, and this can sometimes cause confusion. When we hear the word income our first thought is money and if that is the case why do we credit an income account? It is the goods sold leaving the business that generates the income. The money we receive is debited in the Bank Account which is an Asset Account. Asset accounts record anything we have or are owed. Another useful way to remember entries is to Debit the Receiver and Credit the Giver. For example, we buy goods for resale. The Purchases Account (the receiver) is debited because the goods have come into the business. The Bank Account (the giver) is credited because the money has gone out of the business. Again, we can look at this in terms of the types of accounts we are using. The Purchases Account is an Expenditure Account. This is because the goods coming into business increase its costs. The Bank Account is an Asset Account. When we credit this account, it reduces the money we have and therefore the value of the asset. DEAD CLIC shows us to debit an asset to increase it and therefore as we are decreasing the asset, we do the opposite and make a credit entry. Remember that you are learning something new. Everyone learns differently so find a method that works for you. Don’t be too hard on yourself if it doesn’t come as easily as you hoped! Confidence and understanding only come with practice. We’ve all had to start somewhere and starting at the beginning is always the right choice. We’ve all hit stumbling blocks along the way, the key is not to give up. *Michele Baker is a tutor at Training Link. She has been tutoring for 15 years and has contributed to PQ magazine’s Back to Basics video series.

PQ ACCA spotlight

How Covid-19 has changed career paths Helen Brand explains how the pandemic has affected many people’s career choices – and hears some personal stories from new ACCA studiers lmost two years on and, globally, we’re all still reeling from the effects of Covid-19. But while we try to navigate our way out of this pandemic crisis, ACCA would like to bring inspiration to PQ readers by profiling just some of our students who decided to embark on their ACCA journey as a result of the pandemic. The Covid-19 crisis has made many rethink career aspirations and our futures. It has transformed the world of work, shaking up how we run businesses and organisations in ways that mean the role of accountants is wider and more important than ever before. And it’s highlighted how this profession offers a secure and flexible career whatever your age. For the upcoming Generation Z, developing strategic accountancy skills offers a great launchpad. It offers the opportunity to learn valuable skills and progress rapidly, to be paid well and enjoy greater security of employment. It offers a good work-life balance, with varied and meaningful work for organisations with purpose and values. And it also provides the opportunity to contribute towards a better, fairer, more sustainable future for everyone. I’ve been inspired by the stories of these students and earlier this month, ACCA took part in a radio broadcast campaign day where we discussed the effects of Covid-19 on young people’s career journeys. But it was also an opportunity to shine a light on accountancy. Our research reveals the pandemic proved to be a time of ‘career contemplation’ for many young people across the country. With many being placed on furlough, those aged 16–24 years old were pushed into reassessing their career paths and to take up new qualifications helping them to find their feet within entirely new sectors. In the UK, there are about six million 16-24year olds, and for our campaign we polled 1,000 of them to understand their aspirations better. Before the pandemic, 21% of them wanted to pursue a professional career, which included accountancy, but that has now increased to 30%. Our poll also shows 40% of respondents said financial security is very important to them when looking at their career options and selecting their path. They believe professional qualifications help increase chances of a job

Appearing on London Live talking about how Covid-19 has changed careers paths and being financially secure. This campaign confirms that it’s not just those starting out in their careers who have been looking to change their jobs.

He’s now switched to studying at the University of the West of Scotland for an ACCA accredited degree. He’s also working at the university as a finance administrator.

Cristina Oprea, London Cristina, 24, was a nursery chef from South London who, before the pandemic hit, didn’t feel as though she was realising her full potential. She had always known she wanted to continue her studies but didn’t know where and how to start. And after being furloughed in Spring 2020, and with much time to reflect, she gravitated towards either a law degree or accountancy. In the end, she opted to study accountancy with ACCA and in Cristina’s words she’s ‘truly happy and proud’ with her career choice in the last year. Cristina now has started work as an accounts assistant for a care home company and has recently purchased her first property, too.

Gaurav Kumar, Manchester Before the pandemic, Gaurav, 37, worked in the hospitality sector in Manchester. He worked in the hotel industry looking after serviced apartments that were forced to close during the crisis. Gaurav had always loved working with numbers and when he was furloughed, enrolled with ACCA. He now has started a new job at Barclays while he continues his studies. These are just some of the inspirational stories I have been touched by and I look forward to seeing how these ACCA recruits and all those who have recently joined us continue on their journeys. If you would like to share a similar story with us at ACCA, then do get in touch with our press team newsroom@accaglobal.com. We love to hear from our ACCA students and in times like these it’s always good to share inspirational stories. • Helen Brand is ACCA’s Chief Executive

Craig Maclean, Glasgow Craig, 37, was a baker with high street chain Greggs for almost 20 years until he decided he wanted a complete career change.

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PQ ICAEW spotlight

The only way is ethics ICAEW’s Ethics Learning Programme will help you do the right thing – even when no one is looking ast year saw the launch of ICAEW’s Ethics Learning Programme, enabling students to develop their knowledge and behaviours to do the right thing, even when no one is looking. Ethics, trust and integrity underpin what all finance and accounting professionals do on a daily basis. Therefore, ethics and ethical considerations are integrated throughout ICAEW’s qualifications – in the Ethics Learning Programme, all exams, and within the professional development requirements. The new Ethics Learning Programme widens the scope from focusing on the Code of Ethics to why ethics is important and how technology has changed some ethical considerations. “The original programme that was launched six or seven years ago was very much focused on the Code of Ethics, and set a benchmark for the increasing number of members coming from all around the globe,” said Adam Birt, Head of Qualifications, Strategy and Development at ICAEW. “In this iteration we have looked much

more broadly at why ethics is important to the profession, how the introduction of technology has changed some of the ethical considerations and the interplay between sustainability and ethics. It really gets students to think on a broader basis about why ethics is important, and why they should be acting in the way they are.” He added: “That’s not to say the ACA has vastly increased its focus on ethics, it hasn’t – it’s always been there. We’ve just raised the profile of it and reminded people that being

a professional is all about being ethical.” The Ethics Learning Programme is a mandatory requirement for ACA and Business Finance Professional (BFP) students however, with the introduction of the new programme ICAEW have also opened the access to ICAEW CFAB students. Now all ACA, Business Finance Professional (BFP) and ICAEW CFAB students who registered after 1 July 2020 can complete the programme, ensuring all students and members have the ethical knowledge they need to do the right thing. The Ethic Learning Programme features six modules covering a range of practical topics with interactive videos, articles and questions to consider a variety of ethical dilemmas. Find out more about the Ethics Learning Programme at icaew.com/futureACA Students who registered before 1 July 2020 will continue on the previous programme and must complete it by 31 December 2021.

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PQ Magazine September 2021

ACCA SBL exam PQ

Assurance mapping Open Tuition’s Ken Garrett looks at assurance mapping, a new addition to the SBL syllabus dded to the ACCA SBL syllabus from September 2021 is the topic of assurance mapping and the ‘four lines of defence’, so this might be a useful time to quickly review syllabus area D2, Managing monitoring and mitigating risk. All business ventures incur risk – failed developments, bad debts, accidents and so on. Ultimately, many of the risks are borne by shareholders and it is essential that businesses assess the level of risks that shareholders are willing to shoulder and to monitor and control the risks in line with shareholder expectations. The amount of risk that shareholders are prepared to accept for expected returns is their risk appetite. This depends on each shareholders’ attitude to risk and their risk capacity: how much risk they prepared to bear. For example, in absolute terms, a rich investor will be able to endure the risk of losing more money than a poor investor. To accurately match shareholders’ risk appetite businesses must identify, assess and respond to risks. All identified risks should be entered into the risk register and control is maintained from then on. Assessment of the risk will normally use both the probability of the risk occurring and its impact if the event did occur. Trivial, unlikely events can be ignored; major likely ones might be better avoided. TARA is often used to label the four cells of the probability-impact matrix: • Transfer (e.g. by insurance or subcontracting risky activities). • Avoid (abandon that activity). • Reduce (treat or mitigate either the probability or its impact eg by training, protocols, protective equipment). • Accept (live with it as it is). The assessment of the risks will be noted on the risk register together with the appropriate responses. A named person should be made responsible and a date for action established. This will be signed off when the appropriate actions have been taken. All risks, other than those falling within the ‘Accept’ cell, require a response or responses and assurance mapping identifies four possible lines of defence where each risk can be dealt with. Relatively small risks might make use of only one of these lines (which could, of course, be breached); the most serious risks might make use of several concurrent lines of defence so that it is unlikely that all are

PQ Magazine September 2021

breached at the same time. The four lines of defence are: Line of defence Source 1st

Management: e.g. board policies, management review, ethics guides

2nd

Internal procedures and legal-based assurance: e.g. training, procedures manual, supervision, compliance with health and safety legislation

3rd

Internal audit: typically used to check that company procedures and polices are being followed but can extend to assessing top management behaviour

4th

Independent assurance: e.g. legal, accounting, actuarial, medical and engineering advice from independent experts

For example, many companies will be operating in environments where the consequences of money laundering are extremely severe, both financially and reputationally. All four lines of defence could be used: Management: board declarations that this is not tolerated and mention in the ethics manual that money laundering is absolutely forbidden and will lead to instant dismissal. Rewards for employees who identify and report potential breaches. Internal procedures: training to enable employees to identify high-risk, suspect activities. Strict procedures for the receipt and disbursal of cash to identify sources and destinations. Internal audit: careful verification of all receipts and payments from and to foreign bank accounts (most money laundering involves foreign bank accounts as these are often harder to verify). External: legal and accounting experts involved in training and procedures; a ‘hot-line’ that staff can use if concerned about a transaction. The importance of each line of defence can be shown on an assurance map or table. For example, in terms of SBL, obvious risks arise when deciding to open in a new country or to develop a new product. An appropriate assurance map might be: 1st line

2nd line

3rd line

4th line

Expansion abroad New product The darker the shading the more important the line of defence. The thinking is (and this is only for the sake of illustration: you might disagree with where the defences should be based): Expansion abroad: major investment probably needed so the board needs to look at this carefully. Internal procedures should have assessed market size, consumer taste and competitors. External experts might assess legal problems, economic forecasts, currency volatility. New product: less board involvement, but lots of feasibility work should have been done by the marketing, design and production departments. Internal audit might become involved to independently review the forecasts. • Ken Garrett is a top tutor for Open Tuition 21

PQ CIPFA spotlight

Supporting mental health in the public sector CIPFA is investing in resources to help both students and members with their mental wellbeing, says Alison Sweeting he Tokyo Olympics have highlighted the importance of mental health and wellbeing. We’ve seen multiple athletes taking time off from training and competing, sharing their personal experiences in the public realm and supporting each other over the past month. While we of course want to see our national Olympians compete, seeing the world’s best athletes prioritise their mental health is an incredibly positive thing to witness. Recent events serve as a reminder that everyone can face challenges to their mental health and wellbeing. At CIPFA, we’re pleased have recently expanded our support for students, members and the wider public sector with a new Mental Health and Wellbeing Hub. We know that students’ and professionals’ experiences can vary widely – pressures can be high and workflows often demanding. Juggling different priorities and taking on new responsibilities can take a toll on our work-life balance and overall wellbeing. The same goes for our Mental Health First Aiders! This focus on mental health and wellbeing is even more important as we approach a ‘new normal’ after more than a year of coronavirus

restrictions and lockdowns. I know I’ve certainly struggled with the isolation, separation from friends and family, life and work disruptions and health concerns that we all endured in 2020 and 2021. The uncertainty around the future doesn’t make it any easier. With these realities in mind, CIPFA is proud to be boosting its commitment to our students and members. We want this resource to support

you as a public finance professional – whether future, present or past. We’ve worked to ensure the hub takes into account the nuance of personal life too. It includes information and support on an array of wellbeing topics, including illness and disability, the workplace, student support, family care and support, abuse and addition, physical health and mental health. A key feature of the new hub is an everchanging collection of videos from the wider CIPFA community sharing their mental health and wellbeing experiences. There are also tailored links to resources and local support services. The hub’s contributors also come from a wide range of backgrounds and cover a diverse array of experiences. Perhaps more importantly, access to the hub is free for anyone and everyone. We’re also happy to say that usage of the platform is anonymous - you don’t even have to register to use it. We want this to be an accessible tool, one that everyone feels comfortable and secure using. The way we work is changing. As our lifestyles and working patterns only look to become more dynamic, looking after our mental health couldn’t be more important. • Alison Sweeting is CIPFA’s Training Delivery Manager

Leading Inclusion The latest professional insights report from ACCA, Leading Inclusion, discusses the important subjects of diversity, inclusion and equity. Ensuring that accountancy is a profession that is open to everyone.

bit.ly/leading-inclusion

PQ Magazine September 2021

AAT focus PQ portion. Partner A gets three portions – £15,000 x 3 = £45,000 Partner B gets two portions – £15,000 x 2 = £30,000 Sense-check your answer by looking at the two shares of the profit. Do they equal the total profit shared? £45,000 plus £30,000 equals £75,000. Fractions An exam question might ask you to share the profits of a partnership using fractions such as two-fifths for Partner A and three-fifths for Partner B. 2 Two-fifths may be written like this 5 or like this 2/5. 3 Three-fifths may be written like this 5 or like this 3/5. The top number is the numerator, and the bottom number is the denominator. But don’t worry, you don’t need to remember those words. There are different ways of calculating a fraction of a number, and I will show you two here. In the first I will use the fraction and in the second I will convert it to a percentage first.

Do the math

AAT expert Teresa Clarke explains three mathematical concepts that you really should know about

t is often assumed that to be an accountant you need to be ‘good at maths’. You don’t need to be a mathematician, but you do need to understand the main concepts including addition, subtraction, multiplication, division, negative numbers, percentages, fractions, ratios, averages and basic formulas. Mental maths is not essential because we use calculators, but you do need to be able to ‘sense-check’ your answers. I would like to explain three maths concepts where students can struggle: percentages, ratios and fractions.

Percentages It is important to understand how to calculate percentages. There are many different methods for calculating the percentage of a number, so if your method is different to mine and you get the correct answer, then stick to it. Remember that there are no wrong methods if they arrive at the correct answers. If you would like a method to calculate percentages try this one. Percentage basically means per hundred, so a whole number is 100%. To find a percentage PQ Magazine September 2021

of a number we can divide it by 100 to find 1% and then multiply the answer by the percentage required. Let us look at this in an example: We would like to find 18% of £900. £900 = 100% £900 / 100 = £9 Therefore £9 = 1% Now that we know 1% of £900, we can multiply it by the percentage required: £9 x 18 = £162 Therefore £162 = 18% of £900 Ratios A ratio looks like this: 3:2 A task might ask you to share profits of a partnership in the ratio of 3:2. To calculate this, we first need to look at how many ‘portions’ there are altogether. In this case we have three portions for Partner A and two portions for Partner B, so a total of five portions of profit to share between the two partners. If the total profit of the partnership is £75,000, we would need to divide this into the five portions first. Then give three portions to Partner A and two portions to Partner B. £75,000 / five portions = £15,000 per

Example 1: The profits of a partnership are £85,000. Partner A is to receive two-fifths and Partner B is to receive three-fifths. Partner A is to receive two parts of five and Partner B is to receive three parts of five. We divide the £85,000 by 5 to find one-fifth or 1/5. £85,000 / 5 = £17,000. This equals onefifth of the profit. Partner A receives two-fifths, so we multiply this by 2. £17,000 x 2 = £34,000. Partner B receives three-fifths, so we multiply this by 3. £17,000 x 3 = £51,000. Sense-check your answer by looking at the two profit shares. £34,000 add £51,000 equals £85,000. Example 2: The profits of the partnership are £85,000. Partner A is to receive two-fifths and Partner B is to receive three-fifths. We can convert the two fractions into percentages by dividing the top number by the bottom number and then multiplying the answer by 100. Note: You can do this for any fraction if you want to convert it into a percentage. 2/5 2 divided by 5 = 0.4 x 100 = 40% 3/5 3 divided by 5 = 0.6 x 100 = 60% Partner A is to receive 40% of the profits and Partner B is to receive 60% of the profits. £85,000 x 40% = £34,000 £85,000 x 60% = £51,000 Sense-check this answer by adding together the two profit shares of £34,000 and £51,000. You will also see that the two example methods shown gave the same answers. If you would like more Maths for Accountants, you might like my workbook. Here is the link: https://www.amazon.co.uk/dp/ B091FZ46YC • Teresa Clarke FMAA 23

PQ test bank

Disposal of non-current assets Philip Dunn tests your knowledge of this important concept

Q1: Which International Financial Reporting Standard deals with tangible assets that are depreciated over their useful economic life? Karl Heyes is an agricultural contractor operating in North Yorkshire. He commenced in business on 1 January 2016 and purchased plant and equipment for £180,000 including VAT, and the business was to be VAT registered. He has adopted a policy of depreciating such assets at a rate of 20% straight line basis and depreciates the assets in the year of purchase but not in the year of sale. Q2: What would be the debit balance on the plant and equipment at cost account on the 1 January 2019? Q3: What would be the credit balance on the

provision for depreciation plant and equipment account on the 1 January 2019? On 1 January 2019, he disposes of one item of plant, purchased on 1 January 2016, that had cost £16,000 net of VAT, and issues a sales invoice for the disposal for £9,000 including VAT. Q4: What amount would need to be debited to a disposal account? Q5: What amount would need to be credited to the plant and equipment at cost account for the disposal? Q6: What amount would need to be debited to the provision for depreciation on plant and equipment account for the disposal? Q7: What amount would need to be credited

to the disposal account for the cumulative depreciation to date on the asset disposed? Q8: To which side of the disposal account would the proceeds of the sale of the asset be posted? Q9: What was the profit or loss on the disposal of the asset? Q10: What would be the debit balance on the plant and equipment at cost account immediately following the disposal of the asset? Q11: What would be the credit balance on the provision for depreciation for plant and equipment account following the disposal? On 1 January 2019, £72,000 including VAT was incurred on the purchase of additional plant and equipment. Q12: What would be the total amount of depreciation charged for year ended 31 December 2019? Q13: What would be the credit balance on the provision for depreciation on plant and equipment account at 31 December 2019? Q14: What be the carrying value of the plant and equipment at cost account at 31 December 2019? On 1 January 2020, a commercial vehicle is purchased and a summary of the invoice from the supplier showed: • Cost of the vehicle £25,200 including VAT • Fitting of interior racking £720 including VAT • Fitting roof racks £480 including VAT • Road fund licence £420 • Painting of livery on side of vehicle £960 including VAT • Insurance of vehicle £510 • Annual service charge £48 per month including VAT. Q15: What amount would be capitalised on the purchase of the vehicle? • Dr Philip E Dunn is a freelance author and technical editor for Kaplan and Osborne Books

ANSWERS Q1 IAS16 Property, Plant and Equipment Q2 £150,000 Q3 £90,000 Q4 £16,000 Q5 £16,000 Q6 £9,600 Q7 £9,600 Q8 Credit Q9 £1,100 Profit Q10 £134,000 Q11 £80,400 Q12 £38,800 Q13 £119,200 Q14 £74,800 Q15 £22,800

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AA - Erin Morton PM - Jo Tuffill TX - Aileen Edgar FM - Sunil Bhandari* AAA - Ben Wilson AFM - Sunil Bhandari*

APM - Geoff Cordwell APM - Mustafa Muchhala ATX - Richard Poole SBL - Ashim Kumar SBL - Sean Purcell* SBR - Tom Clendon

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PQ Magazine September 2021

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PQ substance over form But perhaps we should stick to accounting examples of substance over form! IFRS15 Revenue from Contracts with Customers Under this standard the timing of the recognition of a sale is not automatically trigged by either an invoice being raised nor legal title to the goods being sold passing. Rather, a sale is recognised when the performance obligation under the contract is fulfilled. In other words, when what is promised under the sales contract is actually done. This is often evidenced by the actual delivery of goods after all the customer has contracted to get the goods! So, consider the cycle of a sales transaction where an invoice was raised in January for the sale of goods where legal title passed in February, but the goods were delivered to the customer in March and who only pays up in April. In this case it is appropriate to recognise the sale in March as this reflects the economic reality and substance of the sale. A lawyer may disagree and try and argue that legally the sale took place earlier than that – but us accountants have to hold our ground.

therefore substance over form) is embedded in the IASB’s conceptual framework. While often the legal form of a transaction and its substance are in harmony, they can be in conflict. In that event we should account for the truth, the economic reality and not the legal form. Thus, substance OVER form. There are several practical accounting examples where the principle of substance over form has to be applied, but let me start with a left field example!

IFRS16 Leases When a lessee rents an asset, in accordance with the contract it will not legally own the asset. However, IFRS 16 Leases requires that the lessee does recognise the asset on its statement of financial position. This is because by leasing the asset, the lessee controls the asset; has a right to use the asset and gets the benefit from using it. A lawyer might argue that the lessee should not report the asset in its statement of financial position on the grounds that the lessee does not have title to the asset. But because of the principle of substance over form the lawyer would be wrong. The conceptual framework gives us the definition of an asset being based on the principle of control rather than legal ownership. We can see how this definition has also influenced the accounting treatment required by the accounting standard on leases.

Mr & Mrs A monogamous committed couple who raise their children in a loving home but who eschew religion and tradition and so are not legally wed can be referred to as a ‘common law husband and wife’. Such a couple are in substance married, because of the way they conduct their lives, even if the state does not legally recognise their relationship as a marriage.

Conclusion Substance and form don’t always conflict but when they do the correct accounting is to follow the truth and not the law. After all accounts are signed off as being true and fair, not as being legal and correct. • Tom Clendon is an online ACCA SBR lecturer and podcaster who likes to keep things simple! Find out more at www.tomclendon.co.Uk

A question for Tom Clendon helps you get to grips with the concept of substance over form

A student’s question I was going over the IASB’s conceptual framework and came across the phrase ‘substance over form’. Can you explain this as I don’t understand what the phrase actually means? Tom’s answer Well done for studying the conceptual framework! It’s really useful to understand its key aspects as it is the foundation on which the accounting standards are based. Another way of saying ‘substance over form’ is ‘truth over law’. This means that if we are going to faithfully represent events and transactions then we should use our judgment to report the economic reality of what in essence is really going on (the truth, the substance) and not just blindly account for the legal form of events and transactions. The principle of faithful representation (and

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PQ Magazine September 2021

back to basics PQ

Business valuations explained

Sunil Bhandari explains one of the most tested subjects in the Advanced Financial Management exam – it also crops up in the Financial Management paper

t’s an art, not a science’. This is a regularly used statement when introducing business valuations. This is because there are a wide range of methods that can be used to ascertain the value of the equity of a company. Business valuations is tested in both ACCA FM and AFM. As expected, in FM the topic is introduced using basic calculations. In AFM, it is one of the most important areas of the syllabus and has been frequently examined in a far more sophisticated manner. Feel free to read my official ACCA AFM article on this topic. The aim of this piece (and the related video) is to present the basic concepts to arrive at an equity valuation. A past FM exam question called ‘Close Co’, suitably adapted, will be used to illustrate the relevant calculations.

is constant, the calculation is based on discounting a growing perpetuity cash flow (See my Back to Basics Financial Mathematics video): Po = Do(1+g)/(ke -g) or Po = D1/(ke -g) Where: Do = the dividend per share at time 0. D1 = the dividend per share at time 1. g = the constant annual growth rate in the dividend per share. ke = the cost of equity For Close Co: Do = $40m/80m = $0.50 Po = $0.50(1+0.04)/(0.10 – 0.04) = $8.67 Ve = $8.67 x 80m = $694m

‘I

Past ACCA FM exam question (adapted) Recent financial information relating to Close Co, a stock market listed company, is as follows. Profit after tax (earnings) Dividends Statement of financial position information: Non-current assets Current assets Total assets Current liabilities Equity Ordinary shares ($1 nominal) Reserves Non-current liabilities 6% Bank loan 8% Bonds ($100 nominal)

$m 66.6 40.0

595 125 720 70 80 410 490 40 120 160 720

The non-current assets have a realisable value of $625m. The equivalent value for the current assets is $75m. Financial analysts have forecast that the dividends of Close Co will grow in the future at a rate of 4% per year. The future free cash flows for the company have been estimated at $82m per year. Close Co has a cost of equity of 10% and the WACC is 9%. The current ex-dividend share price of the company is $8.50 per share. The industry average price-earnings ratio is 9.25. Current Market Value As Close Co is a listed company, this is a good starting point starting point to ascertain the value of the equity (Ve). Hence: Ve = Number of issued ordinary shares x current ex-dividend market price per share. Ve = ($80m/$1) x $8.50 = $680m. Asset Based Value In this case, the shares are worth the value of the company’s net assets. This can be presented as a simple equation: PQ Magazine September 2021

Ve = (Non-current assets + Current assets) – (Non-current liabilities + Current liabilities + Preference shares) There are three bases for valuing the net assets: • Book value • Net realisable value (NRV) • Replacement cost (RC) Using the book values: Ve = (595+125) – (40+120+70) = $490m Only when using the book value, the above can be circumvented to: Ve = Issued ordinary share capital + Reserves Ve = 80+410 = $490m The net realisable value of the net assets is: Ve = (625+75) – (40+120+70) = $470m

Free Cash Flow (FCF) Valuation This method is introduced in FM, but is tested in far more detail in AFM. There are two ways to compute the equity value: Ve = Present value of the future free cash flows for the company discounted at the WACC – market value of the debt. OR Ve = Present value of the future free cash flows to equity discounted at the Ke. Given the data provided for Close Co, the former method will apply: Ve = 82/0.09 – 160 = $751m This assumes the book value of the debt is the same as the current market value. Summary and conclusion The summary of the equity values for Close Co: Method

Current Market Value

680

Net Assets - Book Value

490

There is no information provided on the replacement cost of the net assets.

Net Assets - NRV

470

Earnings - P/E

616

Earnings Valuation A practical and widely used valuation is take a multiple of the current earnings. The multiplier being an appropriate P/E ratio: Ve = Current earnings x P/E ratio Ve = $66.6m x 9.25 = $616m Please note: 1. Dividends paid to the Preference shareholders should be deducted from earnings. 2. If no current earnings exist, a forecast future profit may be used, but this adds another degree of uncertainty to the valuation.

Dividends - DVM

694

Free Cash Flows

751

Dividend Valuation Model (DVM) The dividend valuation model is also known as the dividend growth model. The equity value is equal to the present value of the future dividends discounted at the cost of equity. This method is particularly useful when valuing a minority shareholding and hence the common presentation is to show the value on a per share (Po). Also, if the future growth rate in the dividends

Each of the above have strengths and weaknesses, but these will be covered during your ACCA FM or AFM studies. The aim of this article was simply to demonstrate the basics behind business valuations. • Sunil Bhandari is an ACCA FM and AFM Tutor with FME Learn Online. Go to www. SunilBhandari.com • To check out Sunil’s Back to Basics Business Valuation video go to: https://vimeo. com/584900540.

For more go to www.pqmagazine.com and click on the video button on the home page 27

PQ AAT remote invigilation

Going remote – how does it work? Remote invigilation is now live for AAT assessmemts. So are RI exams right for you?

AT’s pilots for Levels 1, 2 and 3 remotely invigilated exams began in September 2020 and were due to finish in December. However, they were extended to March 2021, and following the success of the pilot AAT decided to make remote invigilated exams available ‘live’ from late May 2021, in a phased way. In its guide, AAT stresses before deciding to sit an assessment via remote invigilation it is important that you understand all of the requirements, benefits and limitations of sitting an assessment this way. As AAT says: “Remotely invigilated assessments will not be suitable for everyone, and you may prefer to sit your assessment the normal way.”

Is it right for you? While remotely invigilated assessments carry a lot of benefits, there are also some limitations that may affect your ability to sit an assessment this way. As well as the reasons given below, AAT says you must read the full guide so you understand the whole process in case any specific areas impact you: • Assessment availability – on-demand scheduling cannot support assessments that are to be taken via remote invigilation, instead assessments must be scheduled a minimum of two days in advance. • Reasonable adjustments – it will not be possible to support all reasonable adjustment requirements remotely. While extra time and colour preferences can be supported, others cannot. 28

• Minimum specifications – if your computer does not meet the minimum or supporting specifications or if you are unable to download and install the software required to sit your assessment remotely, you will not be able to take remotely invigilated assessments. • Your assessment room – if you are unable to sit in a private room, free from distractions and interruptions, you will not be able to sit remotely invigilated assessments. • Scheduling – your assessment must be scheduled by a training provider who is taking part in the scheme. AAT will not be able to schedule assessments on your behalf. • Invigilation – live invigilation will not be available. While there will be a live chat function it will be limited in regard to the help that can be offered. This means that assessments cannot be paused, and you will need to ‘self-troubleshoot’ in the event of a technical issue. You will also be expected to submit an incident report to notify AAT of any issues that you experience during the assessment. You will also not be allowed to leave the assessment room until you have submitted your assessment. How does it work? AAT’s remote invigilation exams work by recording you and your screen while you take the assessment. The videos will then be reviewed after your assessment has been submitted. After installing and logging into the software, you will be required to show your photo ID, take a photo of yourself and conduct a room scan using your webcam. The software will use your webcam to record

you and will also record everything that happens on your screen during the whole assessment. Upon submission, your ID, photo, room scan, webcam recording and screen recording will be sent to a panel of invigilators who will review the video and either confirm everything is OK or flag any suspected suspicious behaviour, such as cheating. If your invigilation video is not flagged following the review, your result will be released within 10 business days. Minimum and supporting specs System requirements/operating system: Windows 8.1 or higher. Apple OS X 10.10 or higher. Surpass Viewer: You must have the Surpass Viewer custom browser installed on your machine. Internet connection/bandwidth: 512 Kbps upload and download. You are strongly advised to use a wired connection as opposed to Wi-Fi to protect against a loss or drop in connectivity. Downloads: Ability to download and install software (admin rights required). Web camera: You will need a portable webcam to allow you to conduct a room scan. Laptops with integrated webcams are permitted as long as they are portable. Minimum web camera resolution: 640 x 480 Microphone: You will need a working. microphone to pick up any audio during the recording. Date and time: Ensure that the date and time settings on your computer are accurate for your local time zone. Screen resolution: 1024 x768. Screen size: Minimum 17-inch monitor. Students are also reminded some operating systems, such as Windows 10, have accessibility settings that make apps and text appear larger. This should be set to 100%. Using devices that don’t meet the minimum and supporting specifications may cause problems displaying information, or with the assessment. Chromebooks and Linux – the operating systems for these machines do not support Surpass Viewer, therefore they cannot be used to access remotely invigilated assessments. Virtual Private Network (VPNs) are not supported by AAT. The PSI Secure Browser and Surpass Viewer must always be installed and accessed on the PC. If you are on a work laptop and you require your employer’s IT department to install the software, please advise them of this. Software updates – switch off all updates or ensure that all updates are complete before opening the PSI Secure Browser and Surpass Viewer applications. Also ensure that no updates run while you have the PSI Secure Browser and Surpass Viewer applications open, as this will affect your assessment. Based on the make and model of your computer, and the operating system and version installed, you will need to identify how to switch off or time updates to run. Should your bandwidth drop below the PQ Magazine September 2021

AAT remote invigilation PQ minimum required to support the remote invigilation software, there is a risk that your invigilation recordings will stop. When your bandwidth drops below the requirement, you will receive a message informing you that your network bandwidth is too low (keep an eye on your taskbar as it may flash to indicate a message while you are working in the Surpass Viewer). You should resolve your internet connection before continuing. Should you continue your assessment without resolving this, and there are no complete invigilation videos to support your assessment, AAT will void your sitting as it will not be possible to verify the security and validity of the assessment attempt. AAT therefore strongly recommend using a wired internet connection wherever possible, to mitigate this risk as far as possible. Installing the required software To sit a remotely invigilated assessment, you are required to download, install and use two pieces of software to access the assessment – Surpass Viewer and PSI Secure Browser. You are strongly advised to use a personal computer to install the software on. If you are using a computer with controlled or restricted permissions, for example a work laptop, you may not be able to install all of the software and you will need to contact your employers’ IT department to install it on your behalf. See the Installation troubleshooting section for further

PQ Magazine September 2021

information. You are strongly advised to install the required software ahead of your assessment to ensure that you are able to install and access both without issue. Your assessment room You will need a suitable room in which to sit your assessment, free from distractions and interruptions. No one else should be in the assessment room with you. If there is anyone else in the building, it should be made clear to them that an assessment is in progress to minimise the risk of interruptions, for example by having a notice on the other side of the door. Where possible, you should have: • A stable workstation with sufficient space to work. • An adjustable and/or comfortable chair. • Freedom from glare that might prevent you from seeing what is on the screen. • Ventilation to cope with the heat generated by equipment. • Sufficient light. You must not have any posters or notes relating to the assessment, or anything that may advantage you, in the room. Ideally the walls and ceilings should be completely free of posters. What items are prohibited for remote exams? The following items are not permitted in the assessment room:

• Blank paper, aside from the paper that contains your keycode. There will be a dedicated space within the assessment for you to make notes on during your assessment. • Notes, revision material, textbooks, books and paper. • Pens, pencils, erasers, pencil case. • Physical calculators – you will be able to access an online calculator during your assessment. • Mobile phones. • Any form of watch. • Dictionaries, including bilingual. • Computers other than those being used for the assessment. • Memory sticks. • Headphones, headsets. • TV and/or radio. • Any other form of digital, electronic, recording, programmable or technological/web enabled equipment, including but not limited to tablets, dictaphones, cameras, iPods, mobile phones, MP3/4 players. Talking is not allowed inside the assessment room. If you have a computer that uses two computer screens you must switch off the second screen and unplug it. Headwear is only permitted for religious reasons; no other headwear can be worn.

PQ ACCA paper order

Fast track to exam success Brigita Petrova explains how you should decide in which order you take the exams

i there, ACCA student, how is your journey going so far? Are you busy, stressed out and exhausted from constantly juggling studies, work, family, health and social life? Regardless of how far you’ve got so far, I would be surprised if you wouldn’t like to pass your exams as quickly and as easily as possible. Having taught a few different subjects over the past 10 years, I get to hear from a lot of my ex-students, and the question they ask me the most is in what order to sit their remaining exams. A fine question – if they get the answer right they could sail through to membership a lot quicker than those who think the order of exams does not matter. So, if you’d like to save both time and effort, while utilising and building up on the knowledge you’ve already gained, find your current level below and read on!

From Knowledge to Skills You have passed the initial exams and are looking to step up to the next level. Quite naturally, you might be thinking of taking Corporate and Business Law (LW), the next one

on the list, and the only remaining computer-based exam on demand, much like the ones you have sat already. However, this subject does not relate much to anything you have learnt so far or to what is coming next, so you can do it anytime. Relatively easy to pass, you could combine it with another subject (e.g. Taxation) and sit it about a month or so after your regular exam sitting. If the last Knowledge exam you passed was Financial Accounting (FA), you’d be much better off preparing Financial Reporting (FR) next. This higher level of financial accounting builds on the basic

knowledge still fresh in your head, meaning you’d find it easier and quicker to expand on it. Your understanding of concepts would improve too as a result, and if you practise enough questions, mostly on the ACCA platform, you are likely to enjoy the subject and pass the exam with flying colours. Needless to say that if you left FR for much later in your studies you’d forget a lot of what you’ve learnt in FA, so your preparation would have to start from scratch, take much longer and feel much more tedious. Right after FR you might want to try Audit & Assurance (AA), where your good basic financial accounting knowledge would be very helpful in

Fast track route flowchart: <ŶŽǁůĞĚŐĞ Business and Technology (BT)

Management Accounting (MA)

Financial Accounting (FA)

Performance Management (PM)

Financial Reporting (FR)

^ŬŝůůƐ Corporate and Business Law (LW)

Taxation (TX)

Financial Management (FM)

Audit and Assurance (AA)

^ƚƌĂƚĞŐŝĐ WƌŽĨĞƐƐŝŽŶĂů ; ƐƐĞŶƚŝĂůƐ Strategic Business Leader (SBL)

Strategic Business Reporting (SBR)

^ƚƌĂƚĞŐŝĐ WƌŽĨĞƐƐŝŽŶĂů ;KƉƚŝŽŶƐ Advanced Taxation (ATX)

Advanced Financial Management (AFM)

Advanced Performance Management (APM)

Advanced Audit and Assurance (AAA)

deciding if the company’s financial statements have been prepared correctly. Similarly, if you passed Management Accounting (MA) last, it would be easier to go onto Performance Management (PM) next. It would feel like you are revising, but also adding on to what you know, making it a lot easier to understand the subject matter and pass the exam. And while you are on a roll, after passing PM you might want to move to Financial Management (FM), which would be a natural continuation but adding a lot of interesting aspects. TX does not link to the rest of the same/lower level papers, so you might want to do this one last, and move on to Advanced Taxation (ATX) immediately in the following sitting. Skills to Strategic Professional You know about TX-ATX already, and Advanced Financial Management (AFM) is an obvious choice after FM, if you did well in the latter; but what about the rest? You might think it is obvious to do Advanced Audit & Assurance (AAA) after AA and Advanced Performance Management (APM) after PM. Don’t rush though: before diving into AAA, it is good to do Strategic Business Reporting (SBR) after AA, as you’d need to apply knowledge and skills from both of these in the AAA scenarios. There will be very little knowledge added, and you would be already more used to the application, having just done AA and one professional exam. Similarly, it might be good to do Strategic Business Leader (SBL) before jumping on to APM as the knowledge and skills gained in both PM and SBL would make you feel like you are revising in APM, and just applying what you know already to some different organisational issues. The precise order of exams would be different for each of you, depending on where you currently stand, what subjects you have enjoyed so far, which options are most relevant to your work, etc. The above combinations should help you cut down on preparation time and hopefully make passing exams easier and, hopefully, even enjoyable. Good luck! • Brigita Petrova is a top tutor at LSBF and a 2019 PQ magazine Lecturer of the Year PQ Magazine September 2021

ACCA September exam tips PQ

Together with our friends at BPP, we offer ACCA exam guidance for the September 2021 sitting Performance Management PM All syllabus areas can be tested in sections A&B, so the best advice is to study all areas of the syllabus. But you knew that already. In section C expected to be tested on: budgetary systems, planning and operational variances, mix and yield variances, and evaluation of the company performance (either as a whole, or on a divisional basis). This is a performance management paper, so you would be advised to be prepared to evaluate some performance. General advice: Plan your answers to section C questions before starting to type and make sure you make reference to the scenario in your answer. The examining team have said that they expect students to study broadly for all of the syllabus areas, meaning that question spotting is not a good idea – instead students should expect the unexpected. The exam will be approximately 40% calculation and 60% discussion, meaning that it is not sufficient to be able to perform all of the calculations to pass. Interpretation and application are crucial, especially in section C. Taxation TX (UK) In section A there there will be a wide range of topics tested as there are 15 OTQs. Tutors expect at least a couple of these to be devoted to the administration of income tax and corporation tax. So, candidates should ensure PQ Magazine September 2021

they are comfortable with the following: • Due dates for the payment of income tax (including payments on account). • Due dates for the payment of corporation tax (including instalments for large companies). • Filing dates for the income tax and corporation tax returns. • Penalties and interest for late payments and returns. Other topic areas likely to be tested in section A of the exam are: • VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flat rate schemes. • Inheritance tax due on lifetime transfers both in the donor’s life and on death. • Statutory residence tests for individuals. • Identification of groups of companies for corporation tax loss reliefs and gains. • Trading loss reliefs for both companies and sole traders. It is important to remember that section A offers the TX exam team an opportunity to test the whole syllabus, so practising all kinds of questions from the practice and revision kit will help build on and complement your existing knowledge. In section B of the exam the questions will be similar to those of section A, but there will be a longer scenario to deal with. This means a slightly different exam skill is necessary as you have more information to work through and

each OTQ will require you to find the relevant information or data in that scenario. It is not a difficult skill, but we would hope you have had time to practise an extensive range of section B questions from the practice and revision kit before attempting the real exam. In section C you will face the longer, constructive response questions with scenarios and much more open requirements. Your answers will need not just sound technical knowledge, but also the application of that knowledge to the question you have been asked. At least 50% of your revision time should be spent answering the section C questions in the practice and revision kit to build confidence and speed in a way that will also maximise marks. 1. Remember to learn your income tax and corporation tax pro formas. 2. Calculations which require no more than two or three entries into your calculator can be included on the face of your pro formas (e.g. time apportioning a salary). Calculations which are more complex (e.g. company car benefits) need separate workings which are properly referenced (W1, W2 etc) and have a heading. 3. Actually attempt the narrative parts of the requirement – aim for as many sentences as there are marks with each sentence containing something technical. Keep your paragraphs to no more than 3 sentences long. 4. Your exam will be in the CBE software and the spreadsheets have some difference to the software you may be accustomed to so it is crucial you practice using the CBE software, especially for section C type questions. 5. Remember you cannot insert rows into the CBE spreadsheets. So, leave plenty of space on the page (especially when setting up proformas). You may need to add something in and you can always go back and move workings up the page. Show workings down the page, rather than across the page as it makes them easier to mark. Well spaced answers are also easier to mark – and you always want to keep the marker happy. We know that the two longest questions will focus on income tax and corporation tax. These are likely to include the following: • Employment benefits. • Property income. • Relief for pension contributions. • Adjustments to profit to arrive at trading income for both companies and sole traders – in past sittings we have seen a number of questions whereby you have to correct errors in computations included in the scenario. • Capital allowance computations. Finally, remember the pass mark is 50% so you don’t need to be perfect. If you don’t know something have a guess and move on. Sometimes you have to do that in order to get follow through marks in section C questions. If you make a mistake, but then use that incorrect figure later in a subsequent calculation, then that’s fine – you can only lose the mark once. In sections A and B never leave an OTQ unanswered – have a guess if you don’t know the answer. It might be right! Continued on page 32 31

PQ ACCA September exam tips Financial Reporting FR Section A: • Fifteen 2-mark OTQs on a wide range of topics including several on consolidation and interpretation of financial statements. • Expect a few questions on non-core areas (e.g. inflation, specialised entities). Section B (Case questions): • Three separate scenarios with five OTQs on each scenario; each question is worth 2 marks. • Each scenario could be a mix of topic areas or focused on one topic and will usually consist of two/three calculations and two/ three narratives. • Questions are not dependant on each other and can be answered in any order. Section C (Constructed response questions): • Two 20-mark questions, one covering interpretations and the other preparation of PQ thestatements. financial • One question is likely to be in the context of a single company and one in the context of a group, so you could have a single company interpretation and a groups preparation or vice versa. • Accounts preparation questions may include extracts or standalone calculations or full statements of profit or loss and other comprehensive income and/or statement of financial position.

• Both questions will cover the accounting for items from other areas of the syllabus. • May include a short separate part, e.g. with a statement of changes in equity, statement of cash flows extract, earnings per share calculation or linked written topic. • A consolidation question would include one subsidiary and often an associate, with adjustments, e.g. fair values, deferred/ contingent consideration, PUP on inventories/ PPE, intragroup trading and balances, goods/ cash in transit. • A single entity question could be preparation from a trial balance or restatement of given financial statements with the usual adjustments for depreciation, revaluation and current/deferred tax (including deferred tax on revaluations) plus a mixture of adjustments on other syllabus areas, e.g. leases, substance over form issues, financial instruments (change in fair value or amortised cost), share issues, government grants, inventory valuation, revenue recognition or construction contracts. Audit & Assurance AA All three questions in section B will be broken down into sub requirements and be scenario based. The majority of marks in each question will test syllabus areas B, C and/or D. Areas expected to be tested in questions 16 to 18 include: • Audit planning.

• Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk). • Internal audit. • Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls or description of tests of controls). • Audit procedures (both substantive procedures and tests of controls). General advice: Where questions are based on a scenario it is essential that you use the information in the scenario to make your answers relevant. You should also think about how you will present your answer – try to use a tabular format in your solutions where relevant as the examining team have stated that candidates who do this score better. Pay attention to the verbs used in question requirements as these indicate the number of marks available. For example, the verb “explain” requires a sentence and will score one mark if properly explained whereas the verb “list” simply requires you to list out information with no further explanation and this will score 0.5 mark per point. Finally, please read the examining team’s comments relating to past exams which are on the ACCA website: https://tinyurl.com/3nyh67hm Financial Management FM Questions in section A will often be knowledge based (testing your knowledge of key technical

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PQ Magazine September 2021

ACCA September exam tips PQ terms), and will balance out the questions in section B and C of the exam to make sure that all aspects of the syllabus are examined. It is therefore likely that a good number of these questions will test your understanding of financial management and objectives (ratio analysis, the concept of shareholder wealth) as well as the economic environment and financial institutions topics (financial intermediation, fiscal and monetary policies). The efficient market hypothesis is likely to be tested here too. Each section B case-study will be broken down into five separate 2-mark MCQs (so 15 questions in total). Areas expected to be commonly tested in this section are working capital management (e.g. the operating cycle, the impact of a change in credit period or accepting a factor’s offer), business or security valuations (e.g. methods of valuation), and financial risk management (currency risk and interest rate risk). Section C’s two 20-mark questions will be broken down into sub requirements and be scenario based. These two questions will focus mainly on syllabus sections C, D and E. Section C is working capital management, section D is investment appraisal and section E is business finance. Whichever of these three topics does not feature in section C is likely to appear in section B of the exam. Keep checking the ACCA website for articles in the lead up to the exam, any articles written by the examining team are often tested and are important to read. Questions from syllabus section C (working capital management) are likely to be broad ranging so a good broad knowledge of this syllabus section is important. Candidates are sometimes exposed by a weak understanding of working capital finance. Questions from section D (investment appraisal) are likely to feature NPV with inflation and tax, however it is important to also be able to answer questions that include risk, leasing, asset replacement and capital rationing. Section E (business finance) questions often either feature an evaluation of financing options (interest coverage and gearing ratios are likely to be important here) or calculation and analysis of a company's cost of capital. Strategic Business Reporting SBR It is vital that you read the examiner's approach article on the ACCA website. ACCA has also published several exam technique and technical articles that you should read as part of your exam preparation. These are available in the exam technique section of the SBR exam support resources section of the ACCA website www.accaglobal.com. The exam section A will be 2 questions, worth 50 marks in total. Question 1 – 30 marks: • Q1 will be based on group accounting. Be aware that this question may test any aspect of group accounting, including consolidated statements of cash flows, overseas subsidiaries and associates and JVs. • Make sure you attempt all parts of the requirement in Q1. The most recent PQ Magazine September 2021

HEALTH WARNING

These tips should only be used in conjunction with proper study. We cannot guarantee that these topics will appear in the actual exam as we have not seen the exam papers. Examiners are not predictable so it is vital that all core syllabus areas are revised fully. examiner's report stated that some candidates are not attempting the required calculations and therefore struggling to gain a pass mark on this question. • To score well, you need to do the calculations and explain the principles underlying the calculations you have performed. If a question simply asks for a calculation, you do not need to provide an explanation, unless this is specifically indicated in the requirement. • Time-keeping is key to passing this question. A recent examiner report identified that students were spending too long writing detailed answers to the first parts of question 1 and then not attempting the later parts. The marker cannot award more than the allocated number of marks for each part of the question, so to maximise your marks, you must make sure you attempt each part of the question. Make sure you work out the time you have available for each question, and for each part of the question and then stick to it. Question 2 – 20 marks, including two professional marks for application of ethical principles: • Q2 will cover the reporting and ethical implications in a given scenario. Make sure you consider any threats to the fundamental principles of ACCA's Code of Ethics and Conduct in your answer. • Two professional marks are available in this question for application of relevant ethical principles to the scenario. In order to gain the marks, your answer must be realistic and sensible. Stating that all issues should immediately be reported to the

legal authorities without further discussion is unlikely to be awarded the professional marks as this advice is not realistic. Section B will be two questions, worth 25 marks each: • Section B can deal with any area of the syllabus and may be based on a short scenario, a case study with several parts, or an essay. • Section B will always include a question or part-question involving the analysis or appraisal of information from the perspective of a stakeholder. Make sure you have a go at answering this question. There is no 'right' answer at this level – marks will be awarded for sensible points that have been applied to the scenario. • There are two professional marks available for the question that covers the stakeholder's perspective. To gain these marks, you must discuss the issue from the perspective of the stakeholder – e.g. if asked for the investor's perspective, you must answer from the investor's perspective. • Current issues are usually examined in section B as a part of a question (not a full question). However, current issues could be examined in either section A or section B of the exam. A question on current issues may require the application of existing accounting standards to a current accounting issue – for example, accounting for cryptocurrency, accounting for the effects of a natural disaster. General advice: Make sure you plan your time at the beginning of the exam (and stick to it) to ensure you don't over-run on a particular question – it is 1.95 minutes per mark (or 1.8 minutes per mark if you allocate 15 minutes to reading the paper). Strategic Business Leader SBL As with all other ACCA exams SBL is examined as a closed book examination. Unlike the other Strategic Professional level exams which are three hours and 15 minutes in duration, the SBL exam ‘lasts’ four hours. The exam builds upon the knowledge that you gained at the ‘Applied Knowledge’ and ‘Applied Skills’ levels. However, it does also have its own distinct syllabus content. You will not be issued with any pre-seen information in advance of sitting your exam as everything you will require will be made available to you within the examination itself. The SBL exam will focus on one main organisation, and all of the question requirements will relate to this organisation. You may have to take on a variety of roles which may require you to adopt an internal or external perspective when answering questions. You will also be required to respond to a variety of people within the organisation. All of the questions in the exam are compulsory. Every SBL exam will consist of 80 technical marks and 20 Professional Skills marks. Question requirements in the exam will assess and link several subject areas from across the syllabus, and these will test your ability to construct appropriate responses and to carry out numerical analysis. Continued on page 34 33

PQ ACCA September exam tips General advice: While four hours (240 minutes) can sound like a lot of time in which to attempt the exam, it is crucial not to become complacent in how you use this time. The SBL exam is demanding, and as such you need to give careful consideration to how you will manage your time to make the most effective use of it. ACCA recommend spending approximately 40 minutes reading, planning and interpreting the requirements and the information/exhibits provided. Based on this estimation when planning the amount of time you will spend on each requirement you should look to allocate 2.5 minutes per mark on offer. This time allocation is based on the fact that the exam is 240 minutes in duration, once the 40 minutes reading time is deducted this gives 200 minutes to write up your answer in order to earn the 100 marks on offer. You can earn the 20 Professional Skills marks by virtue of attempting the 80 technical marks on offer, so we can divide the 200 minutes remaining over the 80 technical marks to give 2.5 minutes per mark. It is important to note that you can spend longer than the recommended 40 minutes reading and planning your answer. If you do choose to spend longer on this task then you will need to bear this in mind when you come to writing your answers. Alternatively, you may prefer to work on the basis of 2 minutes per mark (being 200 minutes divided by 100 marks). Reading question requirements: The SBL exam will contain all of the information that you will require to answer the question requirements set. This information will be presented in a series of exhibits. To help you locate the exhibits most relevant to answering a specific question it is therefore important that you take the time to read the question requirements set carefully as this should help to direct you. Furthermore, reading the question requirements carefully is important as this will indicate the role and the perspective from which you are expected to answer the question. Identifying this early on is important as it will drive how you construct your answer. Planning your answer: Clearly, if you have gone to the trouble of preparing an answer plan it is important that you use it when writing up your answer. To get the most from your answer plan it is therefore important that you include as much detail as you think will be helpful when the time comes to write up your answer. When planning your work it is important to bear in mind the ACCA’s guide of using 40 minutes for reading and planning. As mentioned earlier you need to remember that some question requirements may require you to conduct some numerical analysis. For example, you may be asked to analyse the performance of the organisation featured in the exam. It is important that you plan the numerical analysis that you intend to perform to ensure that you only focus on performing those calculations that are going to support your answer and provide you with something to talk about. Producing lots and lots of unnecessary calculations for the sake of it will only serve to waste your time in the exam. 34

Computer based exams: Ensure you practise timed exam questions using the ACCA CBE software. You need to be comfortable reading and highlighting the exhibits on the screen as well as taking notes in the scratch pad. It will be easier if you plan your ideas and set up your answer structure in the software, in the form of headings. The exam software comprises a word processor, a spreadsheet and some presentation software. The word processor will be used for answering the majority of the tasks. Any calculations you perform should be in an appendix in the spreadsheet software. Tasks requesting slides should be completed in the presentation software. Understanding the syllabus and the appropriate use of theoretical models in the exam: To stand the best chance of passing the SBL exam, you will need to have a good understanding of the entire syllabus. However, it is important to remember that unlike other exams that you may have sat in the past, questions in the SBL exam will not ask you to simply regurgitate your knowledge of a particular topic or theoretical model. Requirements will test your ability to apply your understanding of the subjects covered in the SBL syllabus in the context of the question scenario. Furthermore, requirements will not specifically ask you to use a particular model in answering the question. Whether to use a theoretical model when constructing your answer will be a matter of judgement that you will need to weigh up in light of the information presented to you in the exam. Attempting plenty of questions in the lead up to your exam is the most effective way of developing your

judgement in this area. Understanding the difference between technical marks and Professional Skill marks: Technical marks relate to the knowledge (which we discussed in the previous section), there are 80 technical marks on offer in the exam. By contrast the 20 Professional Skills marks are awarded for displaying the following skills and behaviours: • Communication. • Commercial acumen. • Analysis. • Scepticism. • Evaluation. Every Professional Skill will be tested in every SBL exam sitting. The Professional Skill being tested will be specified under each question requirement. As you prepare to attempt the exam it is crucial that you take the time to attempt as many practice questions as you can. To increase your chances of exam success you need to ensure that you take sufficient time to develop your understanding of the Professional Skills. Advanced Performance Management APM Q1 section A: Q1 of the APM exam will focus on a range of issues from syllabus section A (strategic planning and control), section C (performance measurement systems and design) and section D (strategic performance measurement). Section A (50 marks) contains one compulsory question. In recent exams Q1 has often required linking a business’s mission to its performance objectives using the concept of CSFs and KPIs. You may well also have PQ Magazine September 2021

ACCA September exam tips PQ to critique and recommend improvements to performance reports and the balanced scorecard and/or information systems could well be tested in this context. The assessment of performance is also likely to be tested and this could easily include benchmarking as a theme. Financial performance measures (ROCE/ RI/EVA etc) are also likely to be commonly examined in Q1 but don't neglect non-financial issues from syllabus section D such as quality management and reward systems. Q2-3 section B: ACCA have said that one of the section B questions will come from syllabus section E (performance evaluation and corporate failure). In section B, commonly tested areas include quality management, information reporting (e.g. big data, lean information), the application of strategic models (such as PEST, Porter’s 5 forces, the value chain), HR frameworks (e.g. reward & appraisal systems), risk management and environmental management accounting. Keep checking the ACCA website for articles in the lead up to the exam, any articles written by the examining team are often tested and are very important to read. The article on the examiner’s approach to APM is especially worth reading and analysing. Advanced Taxation ATX (UK) The exam will comprise of two compulsory questions within section A which will both be of a case study style. The first question will be 35-marks in length and the second will be for 25-marks. One of these questions will focus on personal tax issues and the other will focus on corporate tax issues. In Q1 there will be four professional skills marks, and in section A there will be five marks on ethics. Section B will comprise of two compulsory 20-mark questions. These will be in a more succinct, note form style. The whole syllabus is examinable throughout the exam. The exam will examine candidates’ ability to analyse and evaluate the tax implications of various situations, numerical calculations will only be required to assist in producing an answer and no purely numerical questions will be set. Remember any tax breaks available due to Covid 19 are not examinable. Topics/scenarios we would expect to see are: • Personal income tax scenarios which could involve: investing in a pension; investing in EIS, SEIS or VCTs, share schemes; employment income possibly with termination payments; a personal service company; property income or a takeover. • Unincorporated business – particularly including loss reliefs, partnerships or basis period rules. • A question focussing on overseas issues – this could be income tax, capital gains tax, inheritance tax or a corporate scenario. • Capital gains tax versus inheritance tax including availability of reliefs. • Corporate scenarios – likely to focus in more depth on intangibles; research and PQ Magazine September 2021

development; losses; corporate groups or consortia. • Special corporate scenarios such as liquidation; purchase of own shares; close or investment companies. • A business transformation scenario question such as selling a sole trade business, incorporation, or, in a corporate context, the sale of shares versus the sale of trade and assets. • Other common types of question/calculation to expect are: • Reviewing a pre-prepared computation to spot, explain and correct errors. • Calculations such as “tax saved through an action”, “after-tax proceeds”, “the value of a post-tax inheritance”, “net spendable income” or the “net of tax cost of something”. Don’t forget that across the scenarios you can expect to see VAT marks available. Partial exemption, land & buildings, transfer of going concern, capital goods scheme, overseas VAT and registration/group registration tend to be frequently examined. There will also likely be a couple of marks for stamp duty points if you remember to think about it in your planning! Finally, don’t forget your basic administration points are also likely to be examined – when do we need to pay tax, when do we file a return and what if either of those are late? Advanced Audit & Assurance AAA The most recent AAA exams have contained no real surprises, although you should be prepared for the look and feel of the embedded email and supporting exhibits. If you are sitting the CBE there are resources you should access. Section A will comprise a case study, worth 50 marks, set at the planning stage of the audit, for a single company, a group of companies or potentially several audit clients. Candidates will be provided with detailed information, which will vary between examinations, but is likely to include extracts of financial information, strategic, operational and other relevant information for a client, as well as extracts from audit working papers, which could include the results of analytical procedures. The date will be set as 1 July 20X5. Candidates will be required to address a range of requirements, from syllabus sections A, B, C and D thereby tackling a real-world situation where candidates may have to address a range of issues simultaneously in relation to planning, risk assessment, evidence gathering and ethical and professional considerations. Four professional marks will be available in section A and will be awarded based on the level of professionalism with which a candidate’s answer is presented, including the structure, layout and clarity of the answer provided. Section B will contain two compulsory 25 mark questions, with each being predominately based around a short scenario. There are no optional questions in AAA. One question will always test syllabus section E, and candidates should therefore always be prepared to answer a question relating to

completion, review and reporting. There are a number of formats this question could adopt, including, but not limited to, matters to be considered and evidence expected to be on file, a going concern assessment, the impact of subsequent events, evaluating identified misstatements and any corresponding effects on the auditor’s report. Candidates may also be asked to critique an auditor’s report or a report which is to be provided to management or those charged with governance. The second section B question can be drawn from any other part of the syllabus, including sections A, B, C, D and F. Syllabus section G on current issues is unlikely to form the basis of a question on its own, but instead will be incorporated into the Case Study or either of the section B questions depending on question content and the topical issues affecting the profession at the time of sitting the exam (for topical issues, see technical articles below). General advice: This subject often tests topical issues which have been covered by the examining team’s technical articles (for example, the impact of data analytics in September/December 2020). There are also five exam technique articles that you must read covering ethics, risk, accounting issues, audit procedures and reporting. Advanced Financial Management AFM All AFM exams will have questions which have a focus on section B of the syllabus (advanced investment appraisal) and section E (treasury and advanced risk management techniques). These syllabus areas are therefore high priority areas for your revision. Q1 section A: You can expect section A questions to cover at least two different syllabus areas. This emphasises the importance of having a good broad knowledge of the syllabus (so you are strongly advised NOT to target your revision on a small number of syllabus areas). Section A questions are often based on core syllabus areas such as: project appraisal (domestic or overseas), business valuations and business/ financial reorganisations; these areas often include cost of capital calculations. Risk management may also feature in a number of different ways e.g. value at risk, real options, interest rate or current hedging, and risk management (e.g. mapping). Q2-3 section B: • Risk management (currency or interest rate). • Dividend policy and general financing issues. • Real options. • Business reorganisation. General advice: The examining team have stressed that exams are designed to make question spotting extremely difficult for this paper, so it is important to have a broad understanding of the key aspects of each syllabus area. Don't over-emphasise numerical analysis in your revision – remember that this paper is not a maths exam and in all exam questions the examiner is interested in your ability to communicate well and to give good management advice that relates to the scenario in the question. 35

PQ AAT spotlight

The world’s your oyster… You’re finishing your AAT studies so what comes next? The team at Mindful Education outline some of the options open to you

f you have just completed your AAT studies the first thing you deserve is a pat on the back! AAT courses require a huge amount of dedication and hard work, so achieving your qualification is no mean feat in itself. If you are considering your options for what’s next in your accounting career, there are plenty of routes available, including applying for professional membership of AAT or studying towards chartered accountant status. This article outlines the key routes available and the factors to take into consideration when making your choice.

Gain professional MAAT status Once you have achieved your AAT Level 4 Professional Diploma in Accounting you will become eligible to apply for full membership of AAT. Not only will this allow you to use the official MAAT accreditation after your name, but it will also demonstrate your expertise in accounting and act as an internationally recognised professional status which will help increase your opportunities for career progression. Your membership will also give you exclusive access to events and services, as well as

continuing professional development (CPD) opportunities, which makes it an avenue well worth exploring. It is also important to note that all of the UK’s chartered accountancy bodies offer AAT full members (MAAT) and fellow members (FMAAT) a fast-track route to chartered status. Working towards chartered status Pursuing Chartered Accountant status is a

popular avenue for many AAT graduates. If you are considering progressing onto an ACCA, CIMA, or equivalent qualification, make sure you research a college or training provider that incorporates a digital learning aspect into their courses. Bear in mind that you will be required to spend more time studying if you choose to progress onto a higher level of qualification, so having part of your course online would give you the flexibility to achieve a better work, life, study balance. Progress your finance career The AAT qualification is an excellent stepping stone towards chartered status, but they are also an internationally recognised and highly valued qualification in themselves. Harness the knowledge and skills your qualifications have given you, and use them to progress your finance career in the private, public or third sector. If you are still unsure about what route is best for you, then try contacting your tutor for their advice, or ask other accounting graduates about their first-hand experiences of the different options available . • Thanks to Mindful Education for this article. If you are interested in studying an AAT qualification using its Online and On Campus blended learning approach then visit the Mindful Education website to find your nearest provider.

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PQ Magazine September 2021

CIMA spotlight PQ

Case study prep: where should I start? This is one of the most common questions asked by CIMA students, says Clancy Peiris, who suggests the best ways of going about it

Tests. Core activities are business-related tasks that are common to the role being simulated and valued by employers and which, if performed satisfactorily, enable you to demonstrate that you have the required competencies and mindset for that level. Assessment outcomes clearly state what a CIMA qualified finance professional can do once they have been successful in their CIMA Case Study exam. It’s worth stressing again that the assessment outcomes for the Case Study exams are synoptic. That means that each Case Study exam integrates the knowledge, skills and techniques from across the three pillars into one synoptic capstone examination. So working in tandem with the syllabus for the three pillars, core activities and assessments outcomes outlined in the exam blueprints, will help you in anticipating and preparing the type of questions you can expect to get in the exam. See the two examples I’ve provided below.

Example 1

he CIMA Case Study exam, which students take at the end of each level of the CIMA qualification, is a business simulation of real-life job tasks that a finance professional at that level is expected to perform. The purpose of the exam is to assess the candidate’s proficiency in those specific skills that are less likely to be automated. The Case Study exam tests the knowledge, skills and techniques across the three pillars (Objective Tests) within one synoptic scenario. Candidates are given a fictional Case Study, more commonly known as the pre-seen material, before the exam and are expected to give solutions, based on the knowledge and skills acquired from the three pillars, to the situations and challenges presented within the exam. In my PQ magazine article ‘What the examiner wants’, published in August 2021, I talked about the critical success factors to pass your CIMA Case Study exams, I also mentioned that the best place to start preparing for these exams is to look at the CIMA exam blueprints. Let me explain further. The exam blueprints set out in detail what is examinable (not what will be examined!) in the CIMA Case Study exams for each level of the CIMA professional qualification. They also provide information about the format, structure and weightings of the assessments. More importantly, they perfectly complement the professional qualification syllabus and give specific details on the different types of assessment. The CIMA exam blueprints will help you prepare for your Case Study exams as they include all the competencies, skills and knowledge necessary to pass the exam at each level. You should also remember that examiners use the exam blueprints to develop exam questions and tasks. In other words, the exam blueprints contain all potential tasks and question requirements for the Case Study exams – it tells you what to prepare for and how to prepare for it. If you think I’m exaggerating, I’d suggest you read any of the published ‘Full Post Exam Materials’ documents in the CIMA Planner, and see how the examiner maps the core activity examined in each exam task and sub-task in the marking guide to the blueprint. Core activities and “Ensure that you have the technical assessment outcomes knowledge and understanding of all outlined in the exam topics included in each of the core blueprints are extremely activities. It is not sufficient to rely on important to successfully the fact that you remember it from the prepare for your Case Study exam and highlight Objective Test exams, because the what you need to revise – chances are you won’t. You need to don’t think that you will be revise technical material: if you don’t able to pass solely based have the knowledge, you can’t possibly on what you remember score well.’’ CIMA Examiner from sitting your Objective

PQ Magazine September 2021

CIMA Management Case Study Examination (Exam Blueprint)

CIMA Objective Test subjects (CIMA Syllabus)

Core Activity

Assessment Outcome

Lead Outcomes

(B) Implement senior management decisions

(3) ‘’I can select and apply suitable tools and techniques for managing risk and uncertainty in capital projects.’’

E2 C: Managing Projects (2) Tools and techniques to manage projects P2 D: Risk and Control (1) Risk and uncertainty associated with medium-term decision-making (2) Types of risk in the medium term

Example 2 CIMA Management Case Study Examination (Exam Blueprint)

CIMA Objective Test subjects (CIMA Syllabus)

Core Activity

Assessment Outcome

Lead Outcomes

(D) Measure performance

(5) ‘’I can select appropriate accounting treatments and explain their implications for users of the financial statements.’’

F2 B: Financial Reporting (1) Relevant financial reporting standards for revenue, leases, financial instruments, intangible assets and provisions (2) Relevant financial reporting standards for group accounts F2 C: Group Accounts (1) Group accounts based on IFRS (2) Additional disclosure issues related to the group accounts

Doing this it will help you ensure that your knowledge base is complete. Knowledge of all areas of the syllabus is very important for success. Lack of technical knowledge in one or two areas, is one of the main reasons students don’t pass their Case Study exams. If you have knowledge gaps, you won’t be able to apply your technical knowledge to the real-life business scenario presented in the Case Study exam, and you’re more likely to fail. This is particularly important of you have been awarded exemptions or have entered CIMA via a “pathway”. The CIMA exam blueprints are our most comprehensive exam documents to date and, if you want to successfully pass your exams, you should make the most of them. • Clancy Peiris, Senior Learning Development Manager, Association of International Certified Professional Accountants, representing AICPA & CIMA “Revise study materials thoroughly. Candidates should study all areas of the syllabus and ensure that all three pillars are covered. It is risky to skip topics, even if they are difficult.’’ CIMA Examiner

PQ business closure

Winding down

companies simplified! In this month’s article in his ‘Keep it simple’ series, Neil Da Costa tackles a popular topic that features regularly in tax exams: winding down companies company in financial difficulty can either choose a corporate voluntary agreement (CVA) or go down the administration/liquidation route. The CVA option allows the company to reach a binding agreement with regard to paying off its debts and has no tax implications. On the other hand, the appointment of an administrator means that the administrator becomes responsible for running the company with the intention of rescuing the company as a going concern. With regard to a liquidation, the liquidator takes control of the company with the intention of winding it up and is seen as the last resort where a buyer for the company cannot be found. Once the administrator or liquidator is appointed, the current accounting period ends and a new one starts.

Company implications Usually, the company being wound up is loss making and it is important to realise gains before the cessation of trade so that the trading loss is offset against the gains. In addition, the loss for the last 12 months of trading is eligible for terminal loss relief and can be carried back 36 months on a LIFO basis against total profits to generate a tax refund. Simple example: Gonedown Ltd Gonedown Ltd operates a garage from its own site and has made trading losses of £1m. Before this, the company used to make profits of £100K a year. No buyers are available, so the owners have decided to wind down the company. The site can be sold to a property developer and will realise a gain of £700K. Should Gonedown Ltd sell the site to the property developer before or after the winding down? Solution to Gonedown Ltd Gonedown should sell the site before the winding down commences. This will mean that the capital gain of 38

Post-liquidation distributions Post-liquidation distributions are treated as a capital gain and a disposal of shares by the shareholder. This applies even if the distribution comes out of accumulated net profits. For individual shareholders, the capital gain is generally eligible for Business Asset Disposal Relief (BADR), while the gain will be eligible for the substantial shareholding exemption (SSE) for corporate shareholders. Simple example: Distribution Ltd Distribution Ltd pays out a distribution of £1m to its shareholders out of distributable profits after the liquidator is appointed. Distribution Ltd is a trading company. The two equal shareholders are Rita who owns 50% OSC and is an additional rate taxpayer. Rita is a full-time director of Distribution Ltd and has owned the shares for 10 years. Venture Ltd owns the remaining 50% OSC and has also owned the shares for 10 years. Assume the full £1m is a capital gain.

£700K falls in the current period and the trading loss can be offset against the gain. The remaining loss of £300K can be carried back 36 months under terminal loss relief to yield a tax refund. If the site is sold after winding down commences then the loss cannot be offset against the gain and £700K of the loss will be wasted. Pre-liquidation distributions Pre-liquidation distributions are treated as a dividend and must be paid out of commercially generated distributable profits. For individual shareholders, the dividend will be subject to income tax while the dividend will be exempt income for corporate shareholders. Simple example: Distribution Ltd Distribution Ltd pays out a distribution of £1m to its

shareholders out of distributable profits before the liquidator is appointed. Distribution Ltd is a trading company. The two equal shareholders are Rita who owns 50% OSC and is an additional rate taxpayer. Rita is a full-time director of Distribution Ltd and has owned the shares for 10 years. Venture Ltd owns the remaining 50% OSC and has also owned the shares for 10 years. Solution to Distribution Ltd The distribution is paid before the liquidator is appointed and will be treated as a dividend. Rita will receive a dividend of £500,000 and will have to pay income tax of £500,000 - £2,000 = £498,000 x 38.1% = £189,738. Venture Ltd will receive a dividend of £500,000 which will be exempt income and not subject to corporation tax.

Solution to Distribution Ltd The distribution is paid after the liquidator is appointed and will be treated as a dividend. Rita will have a capital gain of £500,000 and would first offset her annual exemption of £12,300 to give a taxable gain of £487,700. Rita has been employed by Distribution Ltd and owns at least 5% OSC for 24 months so the gain is eligible for BADR and the gain will be taxed at 10%. Rita will have to pay CGT of £487,700 x 10% = £48,770. Venture Ltd owns 10% OSC of a trading company for at least 12 months out of the previous 6 years so the gain is eligible for the SSE and no tax is payable. Small distributions that do not exceed £25,000 To avoid the high liquidator costs, the company can voluntarily wind down and pay all its liabilities. If no liquidator is appointed, HMRC will allow distributions of not more than £25,000 to be treated as capital. If the distribution is more than £25,000 then the full amount will be treated as a dividend. • Neil Da Costa is a Senior Tax Lecturer with Kaplan in London. He is the author of Advanced Tax Condensed, which summarises the entire syllabus using memory joggers PQ Magazine September 2021

PQ wellbeing Have time away from your desk Breaking up your day will make those intense revision sessions so much more manageable. Make sure you factor in a lunch break and make the most of that time. Get outside for a walk, pop in your headphones and lose yourself in music or a podcast – rather than continuing to run through whatever you were last focusing on. When you do take a break, make the most of that time. Even when you’re making yourself a drink or a snack, have it in a different room and use the opportunity to try a short mindfulness exercise. Notice how the mug feels warm in your hands, but cools down gently, and the way the liquid feels when you take a sip. Try to bring your mind back to it if your mind wanders off back into revision-mode before your break is over.

Be good to yourself Jessica French says all PQs have to make sure they are looking after themselves during the exam season. Here are some of her top tips... or student accountants, exams and the worry that comes with them seems to roll around every few months. During these periods, you’re likely to feel a huge spike in stress, nerves and anxiety – all of which can easily become overwhelming. Therefore, when revising, it’s crucial that those facing exams are looking after themselves and their wellbeing. Here are a few of the best ways to manage those emotions, and ensure you’re able to get the most out of your revision time:

Don’t measure yourself against others It’s so easy to concern yourself with the study timetable of those around you, but their schedule is no reflection on your own. We all have different study patterns and energy levels. Some of us work better in the morning, others later on in the day – it’s all a case of personal preference. As long as you’re managing to maintain a healthy balance, you’re doing what works for you.

Likewise, if you’re worrying about judgement from your peers as to whether you’re working enough, remember that they probably have the same fears. Therefore, if they say that they’re working all day and all night, they may well be exaggerating. Keep talking Revision is often an independent activity, and it can be easy to isolate yourself from the outside world in the run up to your exams. It’s important not to let this happen, and to keep connecting with your friends and family. It’s also worth talking to others who are in the same position as you. You might be able to help and support each other through the exam period. If you’re struggling to manage your mood or anxiety levels, it’s important that you don’t bottle it up. Utilise those around you. Friends and family can be a great source of support, and there’s no shame in seeking help if it becomes too much.

Rest, drink and eat well We all know the importance of a good night’s sleep, a balanced diet and drinking plenty of water, but it’s easy to let our healthy routines slide when the pressure is on. Trying not to let this happen will work wonders for your concentration and mood. Losing sleep will impact your ability to retain information and focus your attention. You’d be amazed what a good night’s sleep will do, not only for your performance and mental health, but also just your general wellbeing. A balanced diet and plenty of water will ensure you’re functioning as well as possible and that you’re running at maximum efficiency. Allow yourself to celebrate the victories It’s so important to take stock and give yourself credit for what you’ve achieved each day. Exam preparation and revision is hard work so rewarding yourself will help you stay on track with your studies and keep you motivated in those times when it can feel overwhelming. Reward yourself by taking a coffee break or some time off. Treat yourself to a snack after a particularly hard subject, or even indulge in a few episodes of your favourite show at the end of a productive day. It’s important to always remember that this exam period will end, and soon you’ll be able to put this experience behind you. Trying to not let your studies overwhelm you will go a long way in keeping you grounded and able to perform at your very best when exam day does roll around. For more help and support visit https://www. caba.org.uk/ • Jessica French, Learning and Development Manager at CABA, the charity supporting the wellbeing of chartered accountants and their families

PQ Magazine September 2021

careers PQ

Dear Karen Ask PQ’s agony aunt Karen Young when you need expert advice. Email your dilemma to graham@pqmagazine.com, and he will pass on the best ones to Karen THE QUESTION My manger has volunteered me to work on an extra project, alongside my current workload. I am really struggling to complete my main tasks as the project is very time consuming. How should I approach this with my employer and let them know the extra work assignment is getting in the way of my main responsibilities?

Life at CIPFA Tim Jones is a fully qualified CIPFA, who now works as a Work Based Learning Coach and Associate Trainer with the institute. He has a modern langauges degree and is the current PQ Mentor of the Year What time does your alarm go off? Never – I’m always awake in time in the morning. What is on your desk? A mug of coffee or herbal tea and a radio. How long is your commute to that desk and is it better now? It’s 30 seconds, but I used to work from home in my previous roles so I’m used to it. Do you have a favourite lunch? Cheese and tomato sandwich – even better with some chilli in the cheese. What can you see when you sit at your desk? The end of our culde-sac and a small tree with frequent birds visiting.

What are your favourite websites? BBC Sport, The Guardian, Cricinfo. How many hours a week do you spend in online meetings? About 10 hours. Are you spending more time working now than normal? Just the normal ebb and flow of associate work. How do you relax? Watching and playing cricket, a good TV crime drama and satirical comedy. What is your favourite tipple? A cold lager on a hot day. What’s your favourite TV show? At the moment it’s Meet the Richardsons.

What is the best film you have watched recently? The Graduate (a bit retro). Summer or winter? Summer definitely! Pubs or clubs? Pubs! Do you have a hero? Jack Leach, for scoring one not out in a partnership of 73 with Ben Stokes to win a Test against Australia. What is the first thing you are going to do when lockdown is fully over? Play cricket and socialise afterwards, if it ever stops raining! If you had a time machine where would you go? To see what it’s like 50 years from now.

Pap Bonus based on diversity Santander has told its managers they will receive bigger bonuses if they hire more women and ethnic minority staff. The bank’s vice chairman, Bruce Carnegie-Brown, revealed the Spain bank is introducing a new ‘score card’ in 2022 that directly links senior executive pay to diversity targets. He explained: “If businesses want to be responsible, they need to align their financial incentives with their corporate objectives.”

points out of 10 in figures compiled by Reboot Digital PR Company. Luxembourg came second and Denmark third. The UK didn’t make the top 10, and its score of 5.3 put it 12th. Bottom of the pile were Cyprus and Lithuania with 1.7 points. Reboot said although Cyprus has changed some human rights legislation since joining the EU, the zero points for workplace equality suggests that LGBT+ Cypriots still face discrimination in the workplace. Likewise, Lithuania received zero points for workplace representation, reflecting limited rights for LGBT+ Lithuanians. The country does not recognise civil samesex partnerships or marriage.

In brief

KAREN’S RESPONSE Firstly, you should be proud, as you have proved to your manager that you are very competent at your job. Recognising that you can’t complete the extra workload on top of your usual tasks is a good sign that you are aware of your time management and are keen to complete the task to the best of your ability. Before raising the issue with your manager, determine how much time you can realistically spend on the project each day/week. It is important that you can show to your boss that you are able to track your time, as well as being honest and upfront that you have concerns about the extra workload. Arrange to speak to your manager to explain how many hours you can allocate to the project. If they are still happy with you continuing on with the specific number of hours you have stated, then ensure that you have a thorough understanding of the deadlines and make sure to keep your manager updated as you progress. You are not complaining, but simply requesting a bit more clarity. • Karen Young is a director at Hays. She is passionate about helping people to find the right job, and companies to find the right person PQ Magazine September 2021

Pap Two in five board seats must go to women Public companies are being told that if they have fewer than two out of five female directors on their boards they will have to explain why in an annual statement to investors. The Financial Conduct Authority has said one of the key positions of CEO, chairman, FD or a senior independent director should also be held by a woman under the ‘comply or explain’ rule. Further proposed changes to the listing regime would also require companies to have at least one director from an ethic minority background. The proposed changes are now ‘out for consultation’.

Pap Belgium most inclusive for LGBT+ professionals Belgium has been named the best European country for LGBT+ workers, scoring 8.7

The PQ Book Club: books you should read Elon Musk: How the Billionaire CEO of Spacex and Tesla is shaping our future, by Ashlee Vance (Virgin Books, £10.99) As we started to review this ‘new updated edition’ Tesla was reporting a record quarterly headline profit of $1.1 billion. Revenues more than doubled to almost $12 billion, as it delivered some 201,304 vehicles. It also booked a $23 million impairment related to its holdings of bitcoin. But let’s get back to the book… Born in 1971, Elon Musk grew up in Pretoria. In his teens he designed a video game called Blastar, and we discover

an influential books for him was ‘The Hitchhiker’s Guide to the Galaxy’. Space was in the blood. At university he viewed the internet, renewable energy and space as the three areas where he could make the most impact. He vowed to pursue projects in all three and has lived up to that promise. Musk is a hard man to like. When he turned 30 he said: “I’m no longer a child prodigy.” However, if you want to understand the man then there’s an email he sent to a friend years ago. It reads: “I am by nature obsessive-compulsive.

In terms of being an asshole or screwing up, I’m personally as guilty of that as anyone, and am somewhat thickskinned in this regard due to large amounts of scar tissue. What matters to me is winning, and not in a small way. God knows why… it’s probably routed [sic] in some disturbing psychoanalytical black hole or neural short circuit.” PQ rating: 4/5 There is a reason why this is a New York Times bestseller! 41

PQ got a story, funny or serious, you want to share? Email graham@pqmagazine.com

Credit Sussie spy scandal

Accountancy graduate’s silver lining Doncaster’s Taekwondo world champion Bradly Sinden (pictured) fought his way to a silver at the Tokyo Olympic games. The 22 year old was leading with just eight seconds left, before losing 34-29 against Ulugbek Rashitov. Sinden is studying a Finance and Accountancy degree with Arden University. In a recent interview he revealed that he wasn’t sure what field of finance he wants to go into, but was excited by the modules on tax and tax laws! Each to their own.

The spying scandal that has hung over Credit Suisse and led to the resignation of CEO Tidjane Thiam has been put to bed, following an out-of-court settlement. The bank had used private detectives to spy on former employees Iqbal Khan and Peter Goerke. Khan has now withdrawn his criminal complaint, although Swiss regulator Finma’s enforcement action will continue. Thiam resigned as chief in February 2020, stressing he had “no knowledge of the observation of two former colleagues”. It had originally been claimed that tracking Khan through Zurich was a rogue case. Then details of a similar surveillance of former HR chief Goerke emerged.

STRANGE BUT TRUE

HMRC has forced the Department of Works and Pensions to pay £90 million for breaching tax fraud rules. The department apparently has been wrongly assessing the status of contractors (IR35) for a number of years.

AI bigger than fire! Artificial intelligence will have a bigger impact on humanity than fire, electricity and the internet. Who says so? Well, head of Google Sundar Pichai. In a recent interview with BBC’s Amol Rajan, Pichai said AI will fundamentally change how we live our lives, transforming healthcare, education and manufacturing. While still in its early development stage he said: “I view it [AI] as the most profound technology that humanity will ever develop and work on.” There was a warning too, as he felt companies like his had to ensure AI is developed in a way that benefits society.

’ WEV E

Put a CIMA boot on it Did you know that the CIMA is the heaviest and most robust of all Hanwag’s double-sticked boots, and is designed for serious mountain use? And that it is also suitable for forestry work or other activities that require sturdy footwear? These boots don’t come cheap either – we are talking over £200 a pair.

Portrait of a scam victim

Contrary to popular belief, it’s not pensioners but the young who are most at risk from scams. A new study by Barclays discovered people aged between 21 and 30 are the most likely to have been conned in the past three months. There has been a surge in fraud during the pandemic and those aged 21 to 30 account for 29% of cases. Purchase scams, when people buy stuff online that never arrives or didn’t exist in the first place, was particularly prevalent among those aged 21-30.

Carbon impact of video streaming The average carbon footprint of viewing an hour of videoon-demand streaming is around 55gCO2e, the equivalent to boiling a kettle three times, according to new research. The Carbon Trust said that, at an individual level, the carbon footprint of viewing one hour of video-on-demand streaming is very small compared to other everyday activities. The analysis showed that the viewing device is typically responsible for the largest part (more than 50%) of the overall carbon footprint. For example, the footprint of watching on a 50-inch TV is shown to be roughly 4.5 times that of watching on a laptop, and roughly 90 times that of watching on a smartphone. However, end-user viewing devices are becoming more energy efficient due to a mix of technology advances, regulation and standards (e.g. around stand-by power and maximum power thresholds).

GOT THE L OT

Green wellbeing G

Su Doku heaven

W have three copies of David Domoney’s ‘My We House Plant Changed My Life’ to give away tthis month. He wants you to use the power of houseplants to protect you from the pollution and sstresses of modern life. Everyday products pollute tthe air in our homes, and our mental health is tthreatened like never before – but help is on hand ffrom the humble houseplant. To go into the draw to win a copy of his great T ttome send an email with your name and address tto giveaways@pqmagazine.com. Head up that email ’House plant’ and we will do the rest. e

We have a relaxing and enjoyable way to unwind from your study, work or even your daily commute (if you are doing that now!). The Collins ‘Big Book of Su Doku (Book 5)’ will test your powers of logic and deduction with 300 Su Doku puzzles. The answers are at the back if you are struggling! To be in the running to win one of our three copies you need to send your name and address to giveaways@pqmagazine.com. Head up your email ‘Big Book’ and you will be entered for this month’s prize draw.

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 10 September. The main draw will take place on Monday 13 September 2021.

TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM 42

PQ Magazine September 2021

PQ magazine, September 2021

Articles inside

Fun The lighter side of life; and more great PQ giveaways

Careers Life at CIPFA with our Mentor of the Year; Agony Aunt Karen Young’s career advice; and our book review

Wellbeing Tips for looking after yourself in the exam season

AAT progess You’re about to finish your AAT studies – so what comes next?

Keep it simple Neil Da Costa

CIMA case Preparation is key to the case study exams

ACCA paper order You can

ACCA exam tips We have

Back to basics Business

A question for Tom Top

AAT RI exams Are remotely

ACCA’s SBL exam Assurance

AAT focus Our resident AAT expert Teresa Clarke explains three mathematical concepts that you should know all about

Sustainability ICAS sign up to the Prince of Wales’ new ‘Terra Carta’ initiative

ICAEW spotlight How the

Debits and credits Do you

International standards

CIPFA spotlight Institute is

Have your say Thanks, PQ, for fighting ACCA students’ corner; my ICAEW exam nightmare; plus our social media round-up