PQ magazine, July 2020

PQ magazine July 2020

incorporating NQ magazine

AATs get their assessment slots booked up Many ‘excited’ AAT students have been busy booking their assessments as centres open from Monday 29 June. This is despite the fact that AAT originally said no test centres would be taking bookings until 22 June.

While smaller centres seemed to have lots of ‘availability’ for bookings, some of the bigger players seem to be acting more cautiously. PQs knows of students who have booked in Manchester (Pitman), Stantfords

Training in Birmingham, First Intuition in Maidstone and at the Learning Academy in Milton Keynes.

And Kaplan said it will be re-opening assessment venues in a two-phased approach.

Phase 1 will see roughly half of venues open in early July. This will allow Kaplan students to sit their synoptic assessment in line with the revised window. Phase 2 will see Kaplan open all assessment venues in August.

Details of which centres will be in each phase are now up on its website.

As of now, BPP says its centres are closed until the end of August, but it is reviewing its plans and will provide further information shortly.

First Intuition said it is contacting students and employers to understand their preferences and said it will base its decision to re-open local centres on student feedback.

PQs’ WELLBEING TAKES NOSEDIVE PQs’ wellbeing and mental health has ‘taken a tumble’ during the lockdown, according to the latest study from top recruitment firm Hays.

The Hays Wellbeing Matters report found just 33% of PQs rated their wellbeing as positive since the Covid-19 crisis hit, down from a 62% positive rating pre-lockdown. Worryingly, those who saw their wellbeing as ‘negative’ has risen from 6% to 27%. Clearly, working remotely or being furloughed is taking its toll on PQs. Hays said accountancy is still predominately an office, desk-based job, so shifting to working for home is a huge adjustment.

So what are the things getting PQs down? The biggest concern is the lack of social interaction (cited by 27% of you), followed by feelings of isolation and loneliness (13%). An increase in workload isn’t helping one in 10 (11%), and its all just boring for another 10%.

Since lockdown began getting the work-life balance right has become more important to two in five (43%) PQs. Despite this, over half rate their work-life balance between average and poor.

Many employers also don’t seem to be stepping up to the mark to help, either. While nearly three-quarters of PQs say their employer has a responsibility to help with their wellbeing, some 53% revealed their employer has not

provided any wellbeing support during lockdown. However, those who are supplying support are doing it really well. Some 12% are offering counselling, and the same percentage Continued on page 4

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contents PQ

IN THIS ISSUE

July 2020

News 04ACCA fast track Association launches degree scheme with University of Dundee; plus the Editor’s comment 05CIMA AGM After 101 years, institute holds first virtual AGM

p14 17Opinion ACCA’s Alan Hatfield p5 06IFRS change Pandemic

prompts amendment to IFRS 16 Leases 08ICAEW exams Students now able to book their exams online 09AAT exams Remote sittings in place by August, association confirms 10CIMA initiative OT exams sat in students’ homes for the first time. So how did it go?

11ACCA exams Yes, you will be able to use your own calculator!

12Tech news Indonesia to tax the digital giants Features, etc 14Black Lives Matter We asked the professional accountancy bodies what they are doing to level the playing field 16Study advice ‘Never put off until tomorrow what you can do today’. Sound advice from an ACCA mentor who knows…

p23

believes that ethics is now at the heart of the qualification 18A post Covid-19 world The pandemic has hastened the uptake of edtech – and it looks like it’s here to stay 19Profile Jazz Gandhum looks back on a successful (getting on for) 10 years at e-Careers 20Analysis Regular columnist Professor Prem Sikka explodes the myth of shareholder ownership 22Back to Basics Tom Clendon explains double entry bookkeeping – and has made a video to help you understand the nuances. What a guy!

23A bookkeeper’s journey Joanne Crompton describes how she took the fast train to getting qualified 24ACCA option papers ‘Your Honour…’ Sunil Bhandari puts the case for Advanced Financial Management 27CIMA success Meet Daniel Dudley, who completed his qualification in just three years.

So just how did he do that?

28ACCA syllabus changes We

explain the changes that you really need to know about 29ACCA versus CIMA We look at the (many) merits of both qualifications – but which is the right one for you?

30Distance learning Andrew Taras describes his AAT journey via distance learning

p33

which relies heavily on the concept of marginal costing 40CIMA spotlight Exam chief Stephen Flatman offers some advice on how to sit – and pass – your CIMA exams at home 41Call of duty So what are the legal duties company directors have? The Institute of Director’s Roger Barker explains all 43Careers Life at e-Careers; meet the new CIMA President; and our Book Club Review 44Fun stuff – and our giveaways The columnists Robert Bruce The time is right for meaningful change 6 Prem Sikka It’s one rule for the rich, another for the poor 8 Zoe Robinson A blended approach to learning is the way forward 10 Mike Day E-invoicing is the way ahead – but it needs buy-in from the top 12

33Becky’s ACCA tips Recently

qualified ACCA Becky Hennessey has some top tips on how to succeed 34The true cost of football Kieran Maguire’s offers a fascinating insight into the (sometimes scary) world of football finance. And test yourself in our great quiz, too 37Wellbeing Lockdown has not been good for the mental wellbeing of many PQs. Hays’ latest report makes sobering reading 38CIPFA spotlight How you can develop your skills and become a finance leader of tomorrow 39Finding the edge Philip Dunn looks at break-even analysis,

p41

To subscribe go to www.pqmagazine.com

PQ news

GRAHAM HAMBLY PQ – always first with the news

First things first, I hope you are all looking after yourselves. These are strange times, and it is worrying to see that many PQs’ wellbeing has taken a tumble during the pandemic.

If you are not getting help from your employer then do seek help from your accountancy body. ACCA and CIPFA, in particular, have been working hard to ensure their PQs are better supported. If you go online there are lots of resources and support there.

With the move to remote exams becoming relentless it is interesting to discover that the old-style pen and paper are not dead (see opposite).

ICAS PQs sitting their TPS exams have to photograph what they have written and upload it for marking. Meanwhile, AAT has reopened bookings for assessments at centres in the UK (from 29 June) and students have been busy booking their slots.

At the ACCA the July remote pilot exams for the Applied Skills, AFM and SBL are nearly upon us. One big concession won for students by tutors is the fact that they can use their own calculators. Well done guys.

I wanted to give a big shout-out to Tom Clendon, who has helped to launch our Back to Basics video series. He looks at Double Entry Bookkeeping and has an accompanying article on page 22. #BlackLivesMatter Just to say you won’t find a letters page in this issue. Instead, we asked the accountancy bodies to tell us how events following the death of George Floyd is shaping their policies. See what they have to say on page 14.

Graham Hambly is Editor and Publisher of PQ magazine and NQ magazine

ACCA and University of Dundee have joined forces to offer the quickest route to passing degree and accountancy exams in UK! The pair are set to launch a Master’s degree with embedded professional qualifications, which can be completed in two years – that’s quicker than any other current offers.

At present students studying in Scotland typically take a four-year Bachelor’s degree course to gain their ACCA exemptions, with many then choosing a one-year Master’s to obtain further knowledge.

The bespoke, integrated degree at the University of Dundee, will allow them to achieve a Bachelor’s degree, plus a Master’s degree in just three years. It will also allow students to gain exemption from ACCA’s nine knowledge and skills papers, preparing them for further study of ACCA’s professional papers.

The MAcc Accounting Integrated

ACCA fast track with University of Dundee

Masters will also cost students less in tuition fees (for students outside of Scotland) due to its reduced number of years’ study.

Students will study for about 45 weeks a year, rather than the typical figure of around 30 weeks.

They will also study more

Exams with a difference While the other accountancy bodies go ‘hell for leather’ to introduce remote exam on computer, there is one group of PQs where having enough black ink in your pen and white A4 paper is still the key – ICAS’ TPS final exam and mock candidates.

These June exam sitters must write their exams on blank, white A4 paper,

which is supplied by ICAS. Meanwhile, the use of laptops and other devices are not permitted under any circumstances, other than to view the exam paper.

4

At the end of the exam students will then have to photograph each page and upload them onto Turnitin, a cloud-based software system. PQs can use a scanner if they have one, but they need to send their pages as one PDF. No dispensation will be given for a candidate who does not have or runs out of white A4 paper!

ICAS TPE remote exams are all sat at a laptop. The institute has also announced that the four-sitting rule for TC, TPS and TPE exams has been ‘temporarily amended’ for students during the pandemic.

Covid-19 means AQ2021 becomes AQ2022 AAT’s new syllabus, AQ2021, will no longer be starting in September. The new syllabus has become another casualty of the pandemic.

The AAT has said it will now begin testing the new syllabus from February 2022, giving students more time to pass with the old one. In fact, students will have until the end of February 2023 to complete a

level before switching onto AQ2022. That’s nearly three years. AAT said that it was reacting to feedback from training providers to allow students more time to progress under AQ2016, and to allow it more time to plan for the new qualification.

On hearing the news many students seemed happy, and it was thumbs-up all around on Facebook groups.

PQs’ wellbeing takes a nosedive Continued from page 1 have things like an online doctor.

In another survey from the ACCA and the Corporate Finance Network, accountants have revealed an alarming one in 10 of their SME clients have shared the fact that they’ve had suicidal thoughts. Asked about their clients’ mental health, some 89% of accountants said their clients have reported feeling more stressed than usual and not sleeping, with 78% stating a

intensively, with 60 hours of teaching per five-week module, and six modules to complete in Year 1.

Dundee will take the first students for this course in January 2021 and there is expected to be healthy competition for the fasttrack places.

worsening mental health condition, and 56% claiming they are “unable to cope”.

The health tracker survey found SMEs’ concerns about accessing finance during lockdown have also increased, with 23% saying they won’t be able to access cash to last them two weeks or more of lockdown, compared with 12% just a week before. Perceptions about trading conditions have also altered, with a mere 16% saying they think they will be trading

normally in the near future, compared with 21% a week ago.

Head of ACCA UK Claire Bennison said: “As the weeks pass, the impact on lives is becoming clearer. As more small business owners decide to liquidate we are also seeing a worsening picture of mental health in the small business community. Having someone to speak to at this time is vital, and we know some hard conversations are being had, and will continue for months to come.”

• More on the Hays’ Wellbeing Matters survey on page 37.

PQ Magazine July 2020

news PQ

In brief Free resit offer from CIMA CIMA is offering a free resit to sitters who are unsuccessful in their exam in June and July.

Unsuccessful candidates will receive an email from CIMA confirming the exam credit has been added to their ‘My CIMA’ account. They will then be able to schedule a resit in the normal way – for free. The offer is only valid for the operational, management and strategic OT tests. Students must have attempted and failed between 1 June and 31 July 2020. No-shows are excluded from the offer.

More Africa cancellations ACCA has emailed some of its students in Africa to tell them they won’t be sitting exams in July. The list of countries where exams will no longer take place includes Cameroon, Ghana, Kenya, Malawi, Mozambique, Namibia, Nigeria, Rwanda, Sudan, Tanzania, Uganda, and Zambia. ACCA explained: “This carefully considered decision took into account a number of factors, including health concerns for our students and staff.”

PQ Magazine July 2020

CIMA AGM goes remote For the first time in its 101 year history CIMA held its 2020 annual general meeting remotely. It went live at 11.30am on 3 June BST. During the meeting Nick Jackson was elected President, and you can read a summary of his inaugural speech on page 43.

Members voted on annual membership fees, which were held at £313 for fellows and £297 for associates. The

application fee will be £260 for fellows and £165 for associates.

There were no special resolutions.

CIMA’s annual report is also out.

Accounts to the year end 31 December 2019 show membership grew to 112,617 (up 2,124).

The total student population was 106,364.

Income for the year was £60,587,000 and expenditure

£60,382,000, giving a total operation gain of £246,000.

CIMA paid auditors £476,00 for their work in 2019, that’s up some £101,000 on the previous year.

Which seems a lot.

The report also shows that CIMA has a 10-year lease on its HQ at the Helicon in London, until 2024.

One commentator told PQ magazine that it has £22,920,000 outstanding commitments. With the move to more working from home and the global nature of CIMA he wondered if it needed such a big space moving forward.

ACCA student fights back against the cheats A student in China has reported a fellow exam candidate who they saw taking pictures of the exam questions on the computer screen.

They told ACCA: “I think this behaviour has seriously violated the exam discipline and would create unfairness.” Worryingly, the student said this was not the first time they have seen “such a phenomenon”, and is calling on ACCA to “pay more attention to resolved this

serious problem”. The student even found an exchange where the student had posted images of their CBE questions, and then asked for assistance on a WeChat group.

ACCA was informed, and it tracked the cheating to one student, Chenhui Xu, who has subsequently been removed from the student register and ordered to pay costs of £5,680.

In another case, heard on a

remote link, Hanxue Zheng was removed from the student registered and fined £5,000 after she was found in possession of unauthorised materials in the form of notes at her exam desk.

Sichuang Wang also took unauthorised handwritten notes to his exam sitting for FM. He was removed from the student register and has to pay a fine and costs of £2,750.

5

PQ news

ROBERT BRUCE The time is right for meaninful change

We live in difficult, chaotic times. We were already facing accelerating climate change. Then came the pandemic, bringing death and economic collapse, and then the death of George Floyd that crystallised our underlying inequalities.

Out of this chaos comes the chance for real change. As Peter Bakker, the President of the World Business Council for Sustainable Development, put it: “We simply don't have any excuse left not to build back better and implement deep systemic change, if we ever want all people to live well within planetary boundaries.” That’s the sort of thing that people in such organisations are always saying. But such has been the upheaval you would not bet against change coming about with urgency and speed.

The influential Ceres Accelerator for Sustainable Capital Markets also came up with a blockbuster report in June. ‘Addressing Climate as a Systemic Risk’ is a call to action for US financial regulators. “The magnitude of a crisis is determined not just by the impact of precipitating events, but by the fragility of the system it attacks,” says its introduction. “The world has been forced into a recalibration of values.”

Out of this change can come. Led by the US regulatory system, it could be locked into place. As the report says: “There will never be vaccines developed to protect against climate risk. But the good news is: we already have all the tools and knowledge in the financial markets to take sound preventative action.” There could be a silver lining to all this chaos.

Robert Bruce is an award-winning writer on accountancy for The Times

Lease standard amended The International Accounting Standards Board has issued an amendment to IFRS 16 Leases to make it easier for lessees to account for Covid-19-related rent concessions, such as rent holidays and temporary rent reductions.

The amendment exempts lessees from having to consider individual lease contracts to determine whether rent concessions occurring as a direct consequence of the pandemic are lease modifications.

And it allows lessees to account for such rent concessions as if they were not lease modifications. It applies to Covid-19-related rent concessions that reduce lease payments due on or before 30 June 2021.

IFRS 16 specifies how lessees

Hans Hoogervorst

should account for changes in lease payments, including concessions. However, applying those requirements to a potentially large volume of Covid-19-related rent concessions could be practically difficult, especially in the light of the many challenges stakeholders face during the pandemic. This optional exemption

Changes to ACCA syllabus ACCA PQs sitting exams this September need to be on top of new syllabus changes.

For PM sitters, big data and data analytics have been added.

Performance data is another addition, along with a new section on the risks around IS and data

analytics. That’s the only real changes at the Applied Skills level.

There are more changes at the Strategic Professional level. The two key papers affected at APM and SBR, although there has been some minor tinkering on AAA. Process automation and the

gives timely relief to lessees and enables them to continue providing information about their leases that is useful to investors. The amendment does not affect lessors.

The amendment was effective 1 June 2020, and to ensure the relief is available when needed most lessees can apply the amendment immediately in any financial statements – interim or annual – not yet authorised for issue.

Hans Hoogervorst, chair of the International Accounting Standards Board, said: “The amendment is designed to make it easier for lessees, especially those with a lot of lease contracts, to account for Covid-19-related rent concessions while still providing useful information for investors.”

Internet of Things have been added to the syllabus, as has AI and the use of presentation tools.

For SBR, the examiners want you to be able to discuss the impact of current reporting issues in corporate reporting. We are talking cryptocurrency and environmental issues here.

• See page 28 for our full analysis of the changes come September.

Former PQ spends stolen £58k on cars and booze A former trainee accountant, Jake Currie, who was ‘left to his own devices’, managed to defraud his company out of £58,000. He used the money to buy a second-hand BMW, pay his Stockport mortgage – and a lot of booze!

Working for NUCO Travel, Currie made numerous payments into his own account over a six-month period. He then decided to go on ‘sick leave’, before announcing he was taking a holiday to Canada.

The firm decided it was time to

part company, and its new trainee accountant quickly noticed the discrepancies in payments.

After pleading guilty to one count of fraud and two counts of transferring criminal property the 26-year old was sentenced to two years in prison suspended for two years. He must also undertake 200 hours of unpaid work.

Judge Bernadette Baxter said:

“You made 22 transactions over a six-month period of £58,000. You did it in a state of mind where you felt sorry for yourself. You were spending the money on frivolous things, £9,000 on a mortgage and £10,000 payment towards a car. You have then drank and frittered away the rest of the money. I accept your behaviour was out of character for you.”

Currie, pictured, is now working as a recruitment consultant.

In brief Accountex rescheduled Due to the ongoing pandemic Accountex, Europe’s biggest accountancy and finance conference and expo, has now been postponed until 2021, The show will return to ExCel London on 12-13 May 2021. Organisers Diversified Communications UK had shifted the Spring event to mid-November, but have now taken the decision to move it all to 2021. It said: “The decision has been widely supported by key exhibitors and association 6

partners”. Accountex Summit North will now take place on 21 September 2021.

Studying in a bubble University graduates will have to study and live with the people on

their courses as universities redesign campuses for new social distancing rules. Placing students in smaller course-mate ‘bubbles’ will limit mixing, minimise the risk of Covid-19 outbreaks on campus, and help universities reopen in the Autumn. There will also be limits on lecture sizes. Freshers Week will also be very different! Many are moving online, and there will be strict rules on the size of parties.

Time to volunteer Accountant Sam Tasker-

Grindley hit the papers recently for all the right reasons. After he was furloughed two months ago he wanted to be a bit more active, so co-founded Furlonteer. The nonprofit website (furlonteer.com) connects charities and good causes with skilled willing people during the lockdown. TaskerGrindley told the Sunday Times: “I don’t want to look back on this time and think I wasted it.” So far more than 5,000 people have signed up to do a minimum of three hours a week.

PQ Magazine July 2020

PQ news

PREM SIKKA It’s one rule for the rich countries and another for the poor France, Denmark, Poland, Belgium, Wales and Scotland say that they will deny government-backed coronavirus bailouts to businesses linked to offshore tax havens. Sound good, but there is more to it. What do they mean by a ‘tax haven’? Tax havens are associated with secrecy, low/no tax rates, poor enforcement and cooperation with other countries. Who gets blacklisted depends on politics.

The Financial Secrecy Index developed by the Tax Justice Network lists countries facilitating secrecy and increased possibilities of tax avoidance and illicit financial flows.

Its top two offenders are Cayman Islands and the US. Other offenders are Switzerland, Hong Kong, Japan, Singapore, Luxembourg, Netherlands, British Virgin Islands, UAE, Guernsey and yes – the UK. No one is proposing sanctions against them because they wield considerable diplomatic, military and economic power.

The second list produced by the EU names 12 jurisdictions including the Cayman Islands, Fiji, Guam, Oman, Panama, Samoa and the Seychelles.

These countries are small and lack clout. The EU doesn’t mention any European tax havens even though Luxembourg, Monaco, Ireland and Switzerland have facilitated tax avoidance. The UK got a slap on the wrists from the EU for giving illegal state-aid to firms through its taxation system, but is not on the blacklist.

Some countries are showing moral indignation against small jurisdictions and doing nothing against the biggest players in tax avoidance.

Prem Sikka is Professor of Accounting at the University of Sheffield

ACA advanced exam bookings open ICAEW students are now able to book for their advanced level exams. The online system is now open – from Monday 15 June until Friday 17 July.

The exams, which normally take place in July, are planned to run on 24, 25 and 26 August. The results will be released on Friday 2 October.

The Case Study advance information was available from 9 June, via the resources website.

The ICAEW reminds students that it has temporarily suspended the ACA assessment regulation requiring all other ACA exams to have been passed or attempted before the case study exam may be attempted.

The ICAEW also explained 2020 exams and learning materials were

prepared before the coronavirus pandemic began, and when you sit your exam in 2020 they will not

The current crisis has made young UK audiences more discerning and questioning of what content they see and read through all media channels, a new EY survey reveals.

Nearly one-fifth (17%) of 18-24 year olds say they trust online news sources less today than before the crisis. This is, says EY, not an insignificant number – it is

Trust in the media falling

have been amended to reflect the economic, business or financial impact of the pandemic. However,

the exams have been reviewed to ensure that they are still a viable, objective test of the competencies and skills required for your qualification.

It said: “Some exam question scenarios may relate to an industry, sector or business on which the Coronavirus has had an impact. Where analysis of that scenario is required, it may be relevant to mention briefly in your answer the implications of coronavirus.

“However, you should not dedicate substantial time or focus on these implications. You should focus on answering the question appropriately, using the technical knowledge and skills as set out in the ICAEW learning materials.”

in fact the highest among any demographic and almost twice those aged over 55 (9%).

The same trust issue manifests itself explicitly on social media. Of all UK households, 17% say they

now trust social media less than they did before the coronavirus outbreak.

Yet this number is highest in the younger age group at 24%. EY said the Covid-19 crisis has created a tumult of fact and fiction with reported misinformation, uniformed opinion or fake news.

FRC chairman to step down

provided they did not conflict with his responsibilities at the watchdog.

This has not proved possible and so Dingemans (pictured) has informed the Board and the Secretary of State that he intends to step down.

He is joining Carlyle Group as managing director. The Department for Business, Energy and Industrial Strategy will now bring forward the appointment of a new FRC chair.

The Financial Reporting Council’s chair, Simon Dingemans, has stepped down barely nine months into the job.

Former GlaxoSmithKline finance boss Dingemans was appointed last July to oversee its transformation into the Audit, Reporting and Governance

Authority (ARGA).

As chair of the FRC is a part-time position it was agreed as part of his appointment process that he could take on additional roles,

Taxwatch ‘Scrap marriage allowance’ AAT has reiterated its call for the removal of the Marriage Allowance, in a new response to the Office of Tax Simplification’s call for evidence on ‘claims and election reviews’. It first made this proposal in 2018 and continues to believe that scrapping this relief would be in the best interests of the taxpayer and HMRC. AAT told the OTS that the relief cost taxpayers more than £500m a year, is taken up by less than half of those who are eligible, and benefits 8

the married couple by a relatively small sum of £250. It said: “Removing the allowance is not going to influence an individual’s decision to get married – and it is in no way an indication as to whether or not a political party supports the concept of marriage.”

PapSaudi Arabia triples VAT Saudi Arabia has increased VAT threefold as it steps up support of its economy. The cost of living allowance will also be suspended, as the Kingdom’s oil income has

plummeted. VAT will increase from 5% to 15% as of 1 July, and the allowance was suspended from 1 June. The allowance of 1,000 riyal a month to state employees was introduced in 2018.

Gambling firms win £1bn Betting firms have won a multi-billion-pound tax rebate over slot machines. Betfred and Rank Group will now receive more than £1 billion plus interest, following a court ruling that HMRC had wrongly charged them VAT on their

fixed-odds betting terminals and other slot machines. The Upper Tax Tribunal case could now result in HMRC paying refunds to other companies dating back 20 years.

Justice Mann and Judge Thomas Scott said that VAT should not have been charged on takings from the FOBT machines because they are similar to VAT-exempt gambling devices such as casino roulette wheels. HMRC said it was undecided on whether it will seek permission to take the case to the Court of Appeal.

PQ Magazine July 2020

news PQ

PQ JOB OF THE MONTH Job title: Financial Controller Salary: £35,000 to £40,000, dependent on experience Location: Manchester Experience levels: PQ Closing date: 14 July 2020 You will be working for Skyland, a fashion importer supplying internally designed knitwear to some of the leading retailers in the UK. It is a privately owned business with a dynamic team, and despite the current circumstances with regards Covid-19 the company has ambitious plans for the coming years.

AAT has confirmed that its remotely invigilated August exams will eventually run alongside in-centre assessments, which restart on 29 June.

The big news here is that it will take two weeks to receive results, when some of the results are instant at centres. Apparently, this is so the AAT can check that there has been no cheating. It can review the footage!

Students will need to book their remote exam with their training provider, too. If you don’t have one (if you self-study) then you will have to book via the exam centre.

The remote exams are coming in phases, says AAT. The actual dates for August are not confirmed, but the confirmed subjects are: • Level 3 – AVBK, FAPR, MMAC. • Level 3 – PDSY.

AAT remote exams in place by August

In phase two (AAT is calling it the second wave) it plans to introduce Level 3 Indirect Tax; and Management Accounting: Budgeting; Management Accounting: Decision & Control;

and Financial Statements of Limited Companies at Level 4. It is still up in the air if the Foundation Synoptic will be available in phase two.

In the third and final phase Level 2 papers such as Bookkeeping Transactions, Bookkeeping Controls, and Elements of Costing will be offered remotely.

AAT has said the Advanced Synoptic, Using Accounting Software and Optional Units will not be available to sit at home.

Employers ‘prefer arts graduates’ For more go to https://tinyurl.com/ybho6hky

PQ Magazine July 2020

Contrary to popular belief arts, humanities and social science graduates are more in demand than science graduates in eight of the UK’s 10 fastest-growing sectors of the economy.

A study by the British Academy and London Economics consultancy said businesses in sectors including information and communications, finance, transport and property all prefer humanities graduates.

In finance, almost 70% of graduate employees have a humanities background.

The report also dispels the myth that science, technology, engineering and mathematics (STEM). graduates earn lots more. Gross hourly pay is roughly the same on average, £17 an hour for humanities graduates and £18.40 for STEM – that’s £35,360 compared with £38,272 a year.

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PQ news

ZOE ROBINSON A blended approach is likely to be the way forward Another month has passed and we are still in lockdown, although there are clear signs of progress, with restrictions gradually being lifted. The reopening of schools has been a contentious topic and although teaching in classrooms while maintaining social distancing is not going to be easy, it’s a key step in getting back to a degree of normality.

But not all students may want to return to how it was before. In a recent survey by HEPI of 1,000 undergraduates, 49% were happy with online learning compared with only 23% who were dissatisfied.

Being happy in the short term doesn’t mean the same students would choose to learn online in the future, but these are university students who study full time and on campus, so have an appreciation of how valuable learning can be in this environment.

Having been forced to engage with online learning the preferences of a whole generation may well have been changed irrevocably.

It is of course not a binary decision. The scenario favoured by many, and most likely to emerge in accountancy training, is some form of blend, combining the best of classroom and online into a single programme. In practice it’s not that simple. There are many different ways of blending and designing the best mix requires all training providers to challenge our thinking around teaching and course design, taking an evidence-based approach and questioning why something works, not simply accepting that it does.

Zoe Robinson is Learning and Programmes Director at Kaplan Financial

Online exams the norm From early May, CIMA began the delivery of its first-ever at-home OT exams.

Students in more than 70 countries have now booked to sit the exams remotely, and students in over 40 countries had sat exams by the middle of May. We can report all is ‘going well’, but you don’t have to believe us.

CIMA PQ and Civil Service Fast Stream Graduate Matthew Barton explained: “I was feeling rather nervous about sitting my exam, especially under new and

Local authorities have £10bn black hole Some UK councils are reportedly seriously thinking of declaring themselves bankrupt because their balance sheets cannot cope with the financial pressures of the pandemic.

There is an estimated £10 billion black hole, and many authorities are now openly discussing a ‘114 notice’, which signals their bankruptcy. A report in The Times

said that councils in the Yorkshire and Humber region are thinking of making a joint declaration. The problem is that as revenue has gone down additional bills in these regions has jumped £600m. There are another 120 local councils looking at a 114 notice. Making such a move would impose severe restrictions on spending and massive cuts in services such as

parks, libraries and museums.

One senior local government source has been quoted as saying: “Many finance directors have their finger on the 114 notice trigger.

The end of the financial quarter in June may be when they pull it if they continue to lose confidence that councils will receive the support they need from government.”

Football clubs must publish full reports All of UK’s professional football clubs should publish full accounts, says Kieran Maguire in his new book ‘The Price of £ootball’.

He said the Football Association could easily make it a rule that all professional clubs are obliged to publish full accounts if they want to participate in FA competitions. “But they have done nothing,” he says.

Maguire is worried that the FA’s indifference towards public scrutiny of stewardship of individual clubs by owners does not reflect well “on an organisation that is supposed to be the guardian of the game”.

Two for price of one The FRC has opened investigations into KPMG and PwC over their audits of Eddie Stobart Logistics before trading in the company shares were suspended. The FRC is looking at KPMG’s audit for the year ending 30 November 2017, and at PwC’s audit for the following year (30 November 2018). Last August accounting problems meant the haulage company did not file half-year accounts on time. KPMG resigned as its auditors in November 2018 due to a ‘breakdown’ in its relationship with the firm.

PwC sued by Matalan founder PwC is being sued by John Hargreaves, the 10

unfamiliar conditions. But once I clicked ‘begin exam’ button the process was very smooth, it’s close

enough to the test centre experience so it’s not worth delaying your studies until they can reopen.”

And Siemens’ CIMA part qualified Dan Ralls said: “On the whole the experience was fairly good and the online invigilator was very easy to contact to ease some of my concerns.

“I didn’t feel disadvantaged by sitting my exam at home and I’m really pleased to be able to continue with my studies to hit the targets I had set myself.”

former owner of Matalan, over tax advice it gave when he moved to Monaco. Hargreaves relocated to the tax haven in 2000, and alleges that the Big 4 firm were negligent when it advised him on the timing of his move. PwC refutes the allegations, and believe Hargreaves is out of time to bring his claim.

UK avoids deluge of insolvencies The number of corporate insolvencies during April 2020 was actually down by a third on the previous year as government support packages gave companies vital headroom to deal with the pandemic. A total of 61 companies fell into administration this April compared with 91 in April 2019, according to analysis of notices in The Gazette by KPMG’s Restructuring practice.

Consequently, he explained clubs can end up just following Bradford City’s example, where its accounts consisted of three pages and very little detail.

Maguire ventured that fans are kept in the dark and the opportunity for financial abuses merely increases. He said: “Many small club owners are fantastic and work tirelessly for little reward or appreciation, but the scope for abuse increases if there is an information vacuum.”

• See pages 34 for our feature on football’s finances – and a quiz.

Meanwhile, March saw 135 administrations, compared with 116 in 2019. In total, there were 444 insolvencies during the first four months in 2020, down 5% from the 468 seen between January and April 2019.

EY splits assurance/audit roles EY has made four senior UK appointments, effective on 1 July. Benoit Laclau is the new EY managing partner for consultancy; Jeff Soar the new managing partner for tax; Kath Barrow becomes managing partner for assurance; and Andrew Walton head of audits. EY has used this opportunity to split the roles for assurance and audit. As head of audit Walton sits on the EY LLP Board, which remains 60% women and 40% men.

PQ Magazine July 2020

news PQ

Those July pilot calculator rules Yes, you will be filmed, but at least you will be able to use your own calculator!

There has been some initial confusion about the ACCA July remote pilot for the students sitting the Applied Skills, AFM and SBL exams at home.

PQs went on Facebook lamenting the fact that they would not be able to use their own calculators or have any paper at their home exam desk. While it was originally the case that you couldn’t use your calculator, ACCA has relented after the issue was raised by tutors involved in the pilot – and now you can.

One tutor told us that they can only presume lots of tuition providers complained about this, pointing out that CIMA allows its students their own calculators.

It is, however, right about the paper – you can only use the online scratch pad, so no physical paper.

ACCA demands a clear desk.

Oh, and you are allowed a clear glass on water or a clear bottle of water. But remember you can’t leave the room once the exam starts, so no trips to the loo or uninvited guests, no matter how cute!

An ACCA spokesperson told PQ magazine: “ACCA would like to thank our students for their continued support as we introduce remote exam invigilation. The unprecedented nature of the CovidPQ Magazine July 2020

19 pandemic has prompted us to accelerate the introduction of this technology. But like all our innovations and changes to exams we have taken the step to introduce this on a small scale, so have restricted July numbers to be a small, controlled session.

“Our goal is to ensure our endto-end exam process is futureready and upholds the rigour and integrity of the ACCA qualification.

“As noted, students are permitted to use calculators in the exam but not scrap paper. We are aware students prefer to use their own calculators and not many use the onscreen calculator, so to allow students to perform as best they can they will be allowed to use a calculator.

“In remote invigilation we must replicate exam centre conditions as far as possible so students should have a clear desk to ensure the exam is being taken in the right conditions and this means no paper or other items on their desk. This will be checked at the start of the exam and then invigilators monitor both the student and their screen, but this means students cannot leave their desk once the exam has started” They added: “We understand that this is new for our students so we continue to support our students and work with our learning providers to maximise the student learning experience.”

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PQ tech news

MIKE DAY E-invoicing adoption starts at the top

E-invoicing is designed to reduce error and delay by sending invoices directly to customers’ accounting systems. It will arrive as a prepopulated bill, ready to be approved and paid. The recipient won’t have to check their email or manually enter the invoice into their system.

While the adoption of e-invoicing has been slow and steady in the past few years it has accelerated as more countries accept it as a best practice (sometimes mandatory) standard. The UK and Europe have been rolling out mandatory e-invoicing standards since 2008, while other markets like the US and India are exploring national e-invoicing frameworks.

There’s no doubt that getting governments and big businesses to adopt e-invoicing will be the key to its success. As notorious late-payers large organisations have often struggled to automate their accounts payable process as quickly as small businesses, due to the sheer number of vendors they use and the absence of an invoicing network that connects them to their enterprise software solution. E-invoicing gives these organisations an opportunity to reduce inefficiencies and manual processes, resulting in faster and more accurate payments to suppliers.

Over time, it’s believed that market pressure will encourage more organisations – including telcos, gas and electricity providers – to get on board. Once they begin implementing e-invoicing there will be a knock-on effect to their small business customers and suppliers who suffer from late payments.

Mike Day, Director, UK Education Sector, Xero

Indonesia tax on tech firms Indonesia is about to slap a 10% digital tax on overseas companies, from the second half of this year.

The government said that any company with a “significant economic presence” selling online products, including media streaming, will have to pay the value added tax from 1 July.

The finance ministry’s director general of taxes said: “Under this regulation, digital products such as streaming music subscriptions, streaming films, digital applications,

and games, as well as online services from abroad will be treated

on a level playing field with other local products that have been subject to VAT.” Digital services providers will be required to collect the tax and, if they operate outside Indonesia, remit it from abroad. Thresholds for user numbers and revenue will determine who pays the tax. One exemption will be made for research data.

Indonesia currently has a 10% VAT on sales of most other products and services.

New wallet for Libra Facebook has changed the name of the digital wallet to be used with its new cryptocurrency.

The wallet to hold, receive and send Libra, the currency, will now be called Novi. When first announced last year the plan was to call the wallet Calibra.

Following massive scrutiny from regulators and global banks, the change is the latest in a series of ‘tweaks’ since the Libra network

was unveiled a year ago.

Central banks and watchdogs are worried that Libra could destabilise monetary policy and help facilitate money laundering.

To counter this the Libra Association (Libra’s governing body) promised to offer ‘stablecoins’, which would be backed by single national currencies.

• Novi was inspired by the Latin words ‘novus’ for new and ‘via’ for way.

Baby scans VAT verdict

Australian scientists have set a new internet speed world record, which would allow you to download 1,000 HD movies in one second.

The researchers, from three different universities, used a ‘microcomb’ – a single, small optical chip replacing 80 separate infrared lasers. The new speed (44.2 terabits a second) was also achieved using normal cable technology, raising the hope that

the micro-comb will supercharge current broadband networks.

So how does this all compare to current internet speeds? Singapore has the best download speeds of 197.3 megabits per second (Mbps). In the US it is 133 Mbps and in the UK it is 67 Mbps.

Australian speed are just 42 Mbps, that is one million times slower than the speeds achieved in the latest tests.

HMRC has failed to force a private ultrasound company to pay tens of thousands of pounds in VAT after it had claimed that the baby scans they produce do not constitute medical care.

The taxman had argued that the service provided by Window to the Womb, which carries out 120,000 ultrasounds each year, was a “bonding exercise”, and were provided in addition to NHS scans. This meant they should pay 20% VAT. In the first-tier tax tribunal, Window to the Womb stressed that its service was inherently scientific. All its clinics are registered with the Quality Care Commission, and it employs members of the Society of Radiographers. The tribunal judge ruled in favour of the clinic.

Cyber-attacks are every bit as deadly as those faced on the physical battlefield, so we must prepare to defend ourselves from all those who would do us harm and 13th Signal Regiment is a vital addition to that defence.”

2,208 customers. EasyJet has gone public, as it fears phishing attacks on unwary customers. The UK’s Information Commissioner’s Office has been informed.

report identifies what the three popular fintech products and services will be in 2020: borrowing and lending; messaging and communications; and payments.

London becomes global hub Fintech investment in the UK has exploded by 500% in the past three years, compared with 170% in the US and 133% for Europe. In the first quarter of 2020, the UK sealed nine major investment deals, says the report from Robert Walters and Vacancy Soft. The

Robots to replace journalists Microsoft plans to replace dozens of journalists on its MSN website and use AI systems to select news stories, says a report.

AI will be used to curate stories from news organisations and select headings and pictures for the MSN site. Some 50 jobs will be lost.

A new world record!

Tech briefs First cyber regiment A new cyber regiment has been launched to protect the UK’s frontline operations from digital attack. The 13th Signal Regiment will provide ‘digital armour’ around personnel operating overseas, giving soldiers and their commanders the ability to operate with confidence in their communication systems. Defence secretary Ben Wallace said: “This is a step-change in the modernisation of the UK armed forces for information warfare.

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Cyber attack on EasyJet EasyJet has been the victim of a ‘highly sophisticated cyber-attack’ that has affected nine million of his customers. Email addresses and travel details have been stolen, along with the credit card details of

PQ Magazine July 2020

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Think ACCA, think HTFT We have a full suite of ACCA Applied Skills and Strategic Professional courses for September 2020 exams With our ACCA courses you get: ▪

Membership of our vibrant Online Learning Community and a dedicated tutor

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HTFT Partnership student notes and ACCA authorised study text, exam kit and pocket notes

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Recordings of HTFT tuition sessions to develop your knowledge

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Live online invites for join our new Motivation huddles and tutor-led Boost sessions

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Scheduled ‘live online’ revision sessions – recorded, downloadable and playable on all devices

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3 x HTFT mock exams, marked, with answers and video debriefs

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HTFT’s innovative Exam Simulation day and live debrief

For more information visit www.htftpartnership.co.uk/courses/acca/

Study CIMA, choose HTFT CIMA remote exams are here, and 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

Live courses for E1, E2 & E3 and P1, P2 & P3 starting across June and July.

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PQ equality

#BlackLivesMatter We asked the accountancy bodies for their reaction to the events of recent weeks in the US, here in the UK and around the global...

AAT Mark Farrar, CEO: As an organisation we truly believe in valuing equality, diversity and inclusion, and actively support positive change in these areas.

What happened to George Floyd has highlighted that things are not changing quickly enough, and this is not acceptable. The Black Lives Matter movement has highlighted that we all need to do more and we all need to take responsibility. I recognise that I and we as AAT can and should do more. I am passionate about ensuring our staff, students and members all have equal opportunity to succeed.

As an accountant I was trained in numbers, and our numbers tell me we can do better on this specific topic. We are continuing to explore what this means for us at AAT in terms of actions, measures and impacts. AAT has an active Equality, Diversity and Inclusivity (EDI) staff group and they are already planning events throughout the year. We’ve also recommended that our staff get involved with EDI group activity so we can all get behind this movement and make sure that we, as an organisation, are helping to lead the way.

The events of recent days remind us that we cannot look the other way.

ACCA ACCA statement: The tragic events of recent weeks and the Black Lives Matter protests across the world are an urgent reminder that inequality, racism, and bias still pervade much of our society, and that much more must be done to address this and champion inclusion and diversity.

Since our founding days, inclusion has been at the heart of ACCA and central to our values, our behaviours, and our future as an organisation. While ACCA has crossed boundaries to build bridges we, like countless other organisations, are committed to taking a hard look at ourselves during this period, and in the days ahead, so we can fully live up to our responsibilities to be inclusive for a greater good.

We are strongly committed to valuing people’s differences, to being an organisation where all people – regardless of their gender, race, ethnicity, or belief – can and must be respected.

As we embark on a new strategy, we’re prioritising inclusion and diversity in everything we say and do so we can continue to help effect the positive change we need to see. We 14

recommit to the values of inclusion, innovation and integrity that we have held for more than a century to listen, to learn, and to act. Systemic racism requires a systemic and sustained response that supports and preserves opportunities for all. That is why we support Black Lives Matter.

CIMA CIMA’s commitment to equity statement: As a global professional organisation, with members of a profession committed to the public interest, we must demonstrate a deep commitment to true diversity and inclusion.

The most pressing societal issue we must address is the systematic, structural racism that has caused such anguish and frustration in the Black community. We are encouraged to see many people of all colours speaking up and protesting against injustice and the senseless killing of George Floyd and many before him.

We acknowledge the impact of racial oppression on communities around the world and are deeply concerned to see some peaceful protests overshadowed by violence. As leaders, we recognise that we must advocate against racism and act to build a more equitable society.

We offer our support and compassion to minority and disadvantaged ethnic communities around the world.

CIPFA Rob Whiteman, CEO: We have just witnessed a second weekend of protest, sparked by the unjust killing of George Floyd in the US. Confidence in governance has been eroded and, across the world, communities are demanding acknowledgement, explanation and justice. They are demanding to be heard.

At CIPFA we advocate for strong civic institutions, bolstered by robust systems of governance, focused on and working in the public interest. When trust in our institutions fails, it is time to ask ourselves difficult and uncomfortable questions. That these protests come in the midst of a global pandemic, the

greatest threat to public health in more than a century, only underscores our need to reflect.

The Covid-19 outbreak has thrown a spotlight on the contribution public sector workers play in all our lives. We have been reminded again of the risks they take each day to keep us safe, keep us in good health, to educate us and convey us to work and home.

We have often been silent, or at best slow to acknowledge, that disproportionate numbers of these public servants belong to our black and minority ethnic communities. This is regrettable and something we should seek to address. As chartered public finance accountants it is important we stand in support of Black Lives Matter. People are right to protest against injustice; all should enjoy the benefits of liberty, the fruits of prosperity and the protection and care of public services. We call ourselves ethical accountants. We say we are proud to work in the public interest. We say we are committed to building prosperous, sustainable and socially just communities. If this is true, then we should challenge ourselves. How we can do more to be representative and inclusive of the communities we serve; to ensure we see more black and minority ethnic directors and senior staff; to promote the need for resources to tackle entrenched prejudice; and to find better ways to ensure governance and decision making is trained on these issues.

We know there is a groundswell of determination among our students, members and staff to see us take action against racism and injustice. As chief executive, I am clear that standing in support of Black Lives Matter is core to our beliefs, that we must try harder and challenge ourselves to do more.

ICAEW Michael Izza, CEO: Racism and prejudice have no place in our profession, and we all have a role to play in stamping it out. We demand the highest standards from all our members, and expect them to be inclusive and treat others with dignity and respect. Progress has been made, but not enough. We’ll continue to champion initiatives to boost diversity, equality and inclusion within ICAEW and across the profession. PQ PQ Magazine July 2020

PQ study the advice

‘Never put off till tomorrow

what you can do today’ Thomas Jefferson’s quote should be taken to heart by all PQs determined to get qualified, says Pantelis C. Fouli s we approach the ACCA exams the inner chatter is attempting to take over – ‘I won’t be ready’, ‘best leave this exam for next session’, ‘missing one exam sitting won’t make a difference’. I’m sure there are other comments too. And I’m sure that if we spoke to our friends the way we speak to ourselves at times we would have no friends at all.

In a quick, three-step formula one of the best personal development coaches in my country stated the following: • Do less, remember the famous 80/20 rule.

That is 20% of our efforts in any particular endeavour is responsible for 80% of our deliverables. For you, an ACCA student, what does that mean practically? It means now, three weeks before they start, our exams are our priority. Delegate what you can to family members and friends in order to lighten the burden on you, enabling you to focus on your studies.

• Be present. When Warren Buffet and Bill Gates were asked about their number-one

A

strategy for achieving all that they have, their answer was the same: focus! Focus, and be present in the moment.

• Disconnect. We live in an age of continuous

distraction. It’s virtually impossible to be checking Facebook and Twitter while attempting to be focused on our revision.

Switch off all electrical equipment and focus on the task at hand.

Many of you will be stressing at this point, so all I will say to you is just start. There is a great power in just starting, the time will never be right.

Practical tips • Schedule your revision time and stick to it.

The things that get scheduled are the things that get done.

• Wake up an hour earlier than usual, and get in that one hour of study while the world still sleeps. That one hour over three weeks can add to over 20 hours of additional revision.

• If you can, cram in 30 minutes reading time during your lunch break.

• Do focus on the task at hand, do disconnect.

A Spartan saying goes as follows: “The one who sweats more in practice bleeds less at war.”

Please know that you are never alone; we have our exceptional ACCA Community that is a wealth of knowledge and support.

• Pantelis C. Fouli is ACCA qualified and an ACCA Advocate and Student Mentor. See https://www.linkedin.com/in/pantelisfouli, but please mention in any personal message that you are a PQ reader

Have you booked your exams for September 2020 yet?

Find out more: accaglobal.com/bookexams

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PQ Magazine July 2020

ethics PQ

Creating a better future Alan Hatfield explains how ACCA is supporting ethics and trust for a sustainable future he Covid-19 pandemic has created a new purpose in all we do.

Many of us are re-thinking the way ahead, and wondering what this new purpose means for the accountancy profession and the work it does.

Across almost every aspect of business, professional accountants have been central to helping organisations navigate everything from challenging and competitive operating environments, to ethically creating and sustaining value streams.

Equally, the profession has deployed its fundamental stewardship responsibilities to protect the value created and manage risk, and to communicate organisational action and performance in a transparent, reliable and responsible way. This enables stakeholders to make much better-informed judgments.

The profession has been at the heart of driving greater corporate accountability and responsibility, building stakeholder trust in organisations and those who lead them.

Here at ACCA we do not see this purpose diminishing. As we begin to carefully step out of the lockdown, we believe trust and ethics will be part an even stronger part of the purpose of the profession.

In ACCA’s recent report, ‘Accountants, Purpose and Sustainable Organisations’, Head of Business Reporting Sharon Machado explores why the profession engenders trust through its trinity features of ethics, competence and connectivity.

Individually, these features may not be unique to the profession, but taken together they build a convincing case for why the accountancy profession is well placed to perform and help build and sustain value.

Ethics is the DNA of the profession, it means professional accountants are focused on doing the right thing, acting in the public interest in all that they do.

Machado said: “Focused on public interest, and backed by ethics, business and finance expertise developed through lifelong learning and connectivity of the profession’s networks, professional accountants are central to creating, protecting and communicating value for organisations and society. The profession can be that source of trust society is calling for.”

Readers of PQ should also be aware that the 8th edition of the global prize ‘Ethics & Trust in Finance for a Sustainable Future’ was launched on 2 June. ACCA’s chief executive, Helen Brand, took part in the launch roundtable discussion exploring the role of ethics and trust in shaping a more sustainable and resilient financial system for the postpandemic world.

The launch ceremony brought together

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PQ Magazine July 2020

eminent professionals and experts, including some of the recent laureates of the prize, to provide insights on the role of ethics. Such insights are crucial because of recurring financial crises over the last decade, the mounting challenge of climate change and this current pandemic, which has triggered considerable financial stress and plunged the world in a major economic and social crisis. The general theme of ethics and trust in finance has a pivotal role to mitigate the negative effect of such crises.

Brand said: “As global business looks to how it can reconstruct post the pandemic, it’s clear that care for, and responsibility to, each other and the world we share will be of paramount importance. Thinking deeply about this and re-building in a way that benefits all in society has never been more vital and it makes this prize even more relevant and resonant.”

I truly hope PQ readers enter this really relevant prize. Since 2006, it has offered young candidates – under 35 and working in

or studying finance – a unique opportunity to reassess the role of financial institutions and in particular how they can provide a meaningful response to the changing needs of the communities in which they operate.

Organised by the Observatoire de la Finance, the prize encourages candidates to reimagine how financial institutions, together with their stakeholders, can balance the desire for growth, security and stability for the post-pandemic world.

As a strategic partner along with the CFA Institute; Euroclear; Swift & Swift Institute; and Pictet Group, the competition invites creative papers setting out analyses or proposals for innovative ways to promote ethics and trust in finance. The Jury allocates the prize money of $20,000 among the winners.

To register for the Prize go to http://www.ethicsinfinance.org/how-to-enter/ The closing date for submission of essays is 31 May 2021.

• Alan Hatfield, Executive Director, Strategy & Development, ACCA 17

PQ the future of education

A changing landscape The coronavirus pandemic has sped up the implementation of ‘edtech’ across the world – and it seems like it’s here to stay hile there has been considerable discussion about the role of technology in education for some time, the recent coronavirus outbreak has accelerated its use across traditional educational establishments.

The 2010s saw huge levels of global investment into education technology (or ‘edtech’), but until recently the uptake has remained low, as institutions were reluctant (or unable, often due to a lack of financial resources themselves) to embrace change.

However, Unesco figures show that school, college and university closures as a result of Covid-19 have impacted nearly 80% of the world’s student population across 138 countries, meaning some 1.37 billion learners are now studying from home, relying on technology to do so. In the UK alone, a recent article in the Guardian states that seven in 10 teachers agree that “lockdown has led them to adapt to new technology at a faster rate”.

Educational institutions – from reception classes right through to adult learning – have

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realised the power of technology in making education accessible without students or teachers having to set foot in a classroom.

While this approach may not be sustainable for younger learners or more hands-on disciplines such as hairdressing or medicine, this shift represents a huge opportunity for theory-based

classes such as accounting.

Students’ expectations are also changing. At Mindful Education, we have made our ‘Online and On Campus’ courses available to all UK colleges free of charge, to help ensure that learners who usually study traditional face-toface lessons are able to continue their studies while college doors are closed. In a recent survey of these students, we asked the question ‘How important will technology be in the future delivery of your education and training?’. The response was overwhelmingly in favour of the integration of technology, with an average score of 8.8 out of 10 (of which, 47% gave it 10/10, or ‘essential’).

Students no longer wish to restrict their learning to the classroom, and despite their previous reluctance, educational institutions are stepping up to accommodate this. It’s clear to see that while we may, slowly, be returning to ‘normal’, the impact of Covid-19 on the education sector will be irreversible.

• Thanks to Mindful Education for this article.

Mindful Education creates professional courses and apprenticeships, delivered through a blend of online and face-to-face learning. Find out more at mindful-education.co.uk

It’s what we call

digital first Give your career the ultimate flying start with the business qualification that takes you where you want to go.

Register now at accaglobal.com/pq

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PQ Magazine July 2020

profile PQ

Exalted company: Jazz with Lord Taylor of Warwick and Sir Eric Peacock at the House of Lords

All that Jazz!

Award-winning Jazz Gandhum, CEO of e-Careers, looks back at the roller-coaster last 10 years – and looks to the future, too here are many layers to e-Careers’ CEO Jazz Gandhum. A BEng civil engineering graduate of Kingston University, he won ‘Entrepreneur of the Year’ in 2017 at the Amazon Real Business Awards.

He acquired e-Careers in 2011 and has turned it into one of the top online providers for AAT and CIMA PQs. It also offers the ICB qualification.

Gandhum’s key mantra is to create affordable and accessible education for all. He also has a clear vision to change the way people study through digital technologies.

There are many strings to Gandhum’s bow. He developed a natural isotonic drinks brand, iPro Sport, which is the hydration partner to over 20 sports including football, rugby and cricket. He is also on the board of his father’s multinational business Duflon, which manufactures Teflon products for the chemical process industry, supporting over 700 employees and exports to more than 30 countries.

Gandhum is someone who knows all about disruptive business (he’s won an award for that too). So we thought it was time to get his insight into the new normal, and what lies ahead:

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How have the last three months in lockdown been for e-Careers?

How have you coped? While the world was on lockdown, the e-Careers team has been working in overdrive. Online learning has hit the headlines in a big way, and as a dynamic ‘edtech’ company we fully understand that now is the time for us to really shine!

What have you done to help your accountancy students?

PQ Magazine July 2020

Many people want to study accountancy but are faced with ongoing restrictions. Our research revealed that affordability and a device on which to study full-time was a common limitation. As such, we have prepared three key areas that we can help learners facing these limitations: • We now offer a Learn Now, Pay Later scheme where students can study and pay over 12 months with 0% interest.

• We partnered with HP to offer a free HP laptop for anyone who studies a Level 3 or Level 4 AAT qualification with us.

• We partnered with Xero to provide Xero certification at no additional cost to our learners – an added benefit in a fast-growing cloud computing market.

You got involved in e-Careers in 2011. What was the company like when you took it over?

It was a lifestyle business for over eight years.

The digital learning age was simmering around that time and when I took over in 2011 I had a clear vision of the impact technology would have in future learning habits and the role we intended to play.

It’s been almost 10 years now. What do you see as the biggest changes in the accountancy education in that time?

I always say that the ability to do sales and understand numbers is a must for any business owner. The rise of online bookkeeping software has made accounting simpler for businesses.

This has led to a change in the demography of people that are comfortable studying bookkeeping and accounting qualifications. It is not only accountants or bookkeepers who study AAT!

The introduction of technology in the learning processes has also significantly reduced the cost of qualifications whilst maintaining pass-marks over the past 10 years enabling more people to enter the sector than would have otherwise been able.

You won the Amazon Growing Business Awards ‘Entrepreneur of the Year’ in 2017. How did that feel?

This is one of the most memorable experiences of my life. There were thousands of highly worthy candidates and I remember being invited for an interview at Grosvenor House in London a few months before the award was due to be announced.

Later I learnt that I was one of six finalists, and the winner would be announced at a special event in the City. It was the final presentation of the night and when the final award was about to be announced I was standing by the bar!

A few seconds later my name was announced as the winner and I was asked to collect my award and talk about my journey – with zero preparation. I still cannot recall what I said that night as it remains a blur. I do recall calling my wife and messaging the e-Careers team with a photo. It is one of those moments you have in life when you still can’t comprehend what, how – me?

How do you see the world of online training evolving in the next few years for accountancy students?

I regularly speak about this to our college and university partners. Covid-19 has fast tracked the path on which we were already on – digital learning is here to stay and something we have to come to terms with.

Despite all the potential and positives of online learning, it does require the individuals who are doing the courses to be committed and able to manage their time better than I think we are all doing at the moment. Until this happens, I feel that professional qualifications such as accounting will rely on a blended approach of eLearning with tutor intervention to provide best results. Something we have been doing at e-Careers for many years now...

19

PQ analysis

The myth of shareholder ownership Can shareholders own a company? The answer is not nearly as straightforward as you might think, says Professor Prem Sikka o shareholders own companies?

The answer to this simple question may appear to be obvious but may not be correct. The Companies Act 2006 does not say that shareholders are owners of companies, although shareholders have some controlling rights.

We tend to think about ownership in everyday commonsensical way. If you own a phone you can use it at all times, rent it out, sell it, take it home, pawn it, smash it or give it away. If you hurt someone with it, that party can sue you for damages. Such simple notions of ownership do not easily apply to ownership of companies.

D

Tests of ownership In legal literature and case law, ownership is characterised by incidents of rights, powers, liberties and immunities; and duty and liability.

Ownership is only conferred when they are present in sufficiency. The rights include (1) the right to possess: to have exclusive physical control of an asset, or to have such control as the nature of the asset admits; (2) the right to use: on a very narrow interpretation ‘use’ relates to the owner’s personal use and enjoyment of the asset owned; (3) the right to manage: the right to decide how and by whom the asset owned shall be used; (4) the right to the income of the asset: income in the ordinary sense (fruits, rents, profits) may be thought of as a surrogate of use, a benefit derived from forgoing personal use and allowing others to use it for reward; (5) the incident of residuarity: it is a characteristic of ownership that an owner has a residuary right in the asset owned.

The idea of ownership confers powers, liberties and immunities. These include, (1) the right to the capital: the right to capital consists of the power to alienate the asset by transferring ownership to others through exchange, sale, gift and mortgage, etc. This is closely related to, (2) the power to transfer ownership to successors.

(3) The liberty to consume, waste or destroy the whole of part of the asset. (4) The right to security. The owner should be able to look 20

forward to retaining ownership indefinitely, if s/he so chooses and remains solvent. This is, in effect, immunity from expropriation, based on rules that apart from bankruptcy and execution for debt, the transmission of ownership is consensual.

Ownership confers duty and liability towards others and includes: (1) the prohibition of harmful use. An owner’s liberty to use and manage the item owned as s/he chooses is subject to the condition that uses harmful to other members of society are forbidden. (2) Liability to execution: the liability of the owner’s interest to be taken away from him/her for debt, either by execution of a judgment debt or on insolvency.

Courts have long made it clear that shareholders have no legal or equitable interest in any part of the company’s property or assets, and the company is the sole and beneficial owner of all the property vested in it. The case of Short v. Treasury Commissioners [1948] 1 KB 116 122, stated that “shareholders are not, in the eyes of the law, part owners of the undertaking.

The undertaking is something different from the totality of the shareholding.”

Unlike the agency theory, corporate law does not grant shareholders the right to necessarily impose their will on the company. The case of Gramophone & Typewriter Ltd v Stanley [1908] 2 KB 89 stated that “even a resolution of a numerical majority at a general meeting of the company cannot impose its will upon the directors when the articles have confided to them the control of the company affairs. The directors are not servants to obey directions given by the shareholders as individual; they are not agents appointed by and bound to serve the shareholders as their principals”.

Shareholding in practice The ownership of shares cannot be equated with ownership of companies as it fails most of the tests specified above.

Shareholders possess a piece of paper entitling them to receive future income, but do not have the right to use any of the assets held by the corporation for their personal use. Companies are legal persons and in that capacity, they can own assets and use them in accordance with the directions given by directors. If any shareholder were to attempt to possess the asset and use

it for personal enjoyment, s/he will probably be accused of theft.

As the assets are legally owned and managed by the company, it can grant charges on property and also license it to third parties to generate income without the permission of shareholders.

Shareholders cannot use the assets of a company to satisfy their own debts. In common with other consumers, shareholders can use a company’s assets and services by paying a price, but they generally do not have any special privileges arising from their investment in shares of the company.

Shareholders do not have a right to manage the company or the assets vested in the company in which they own shares, though they can elect directors to do so. Shareholders can vote on resolutions to constrain management, but that does not result in the right to manage assets.

Most votes at annual general meetings of UK corporations are advisory rather than binding on directors.

Shareholders do not have the right to demand income from the assets owned by the company.

They can receive dividends, but only after directors agree to declare them. Shareholders can vote to accept or reduce the payment of dividend, but they cannot demand a higher amount.

In principle, shareholders can hold share certificates for an indefinite period, and can continue to enjoy the benefits derived from it as long as the company remains in existence.

However, the state can nationalise industries PQ Magazine July 2020

analysis PQ actions, including the sale of harmful products (tobacco, alcohol), manufacture diseases, deadly weapons, genocide, cartels, tax avoidance, money laundering, bribery and corruption.

Harmful actions may increase returns to shareholders, but also blights the lives of many people. Shareholders may receive a higher return, but they cannot be individually held responsible for the consequences of harmful actions by their companies.

Shareholders can attend annual general meetings and extraordinary meetings to vote on resolutions and ask questions about harmful practices, but they cannot bind directors to follow a particular business strategy. If a company is found guilty of harmful/illegal practices, shareholders cannot be asked to compensate the victims as their liability is limited to the extent of their share capital. The ultimate sanction is that shareholders can voluntarily liquidate the company engaged in harmful practices, but that is rare.

The state can liquidate a corporation engaged in harmful practices even against the express wishes of its shareholders, but shareholders are not required to make good the damage done to other stakeholders and society. Seemingly, the corporate veil permits shareholders to benefit from practices, which as natural persons they would not be able to.

and restrict the ability of individuals to hold shares. Shareholders cannot recover the capital represented by share certificates from the company. Of course, they can sell their shares to another party, but under competition laws the state may disapprove mergers and takeovers and veto the ability of shareholder desire to buy or sell shares.

Shareholders can transfer or bequeath shares to successors, subject to the taxation laws of the country. The same also applies to using shares for gifts or mortgages. The share certificates may have some value as long as the company is solvent.

In the course of their business, companies may sell their assets, but shareholders do not have the right to receive the proceeds unless directors so elect, subject to statutory rules about solvency and capital maintenance. Shareholders do have a residual interest in the event of bankruptcy,

PQ Magazine July 2020

assuming that the assets have been disposed to satisfy the prior claims of secured and unsecured creditors. In practice, shareholders may receive little or nothing.

According to legal arrangements shareholders bear the residuary risks, but unlike employees they can manage some of their risks by holding diversified portfolios. In economic theory there are considerable similarities between the position of a shareholder and a debt holder.

Both are outside the corporation and both have provided money to a company in expectation of a return. The return due to debt holders may be written into a contract and needs to be paid before payment of any dividends, but neither is guaranteed income or the return of the original loan or investment.

There is considerable evidence to suggest that in pursuit of higher profits and shareholder returns, companies have engaged in harmful

Conclusion To sum up, the claims of the shareholder supremacy in accounting, auditing, finance and corporate governance literature rely on the assumption that shareholders own corporations.

However, shareholders cannot own companies in the same way that an individual can own a mobile phone.

Shareholders are not the owners of corporations as they fail most of the tests associated with ownership. Shareholders cannot possess or use any of the assets held by a corporation. They cannot dictate business strategy, control the sale of assets, demand dividends or be held liable for a corporation’s actions. They may claim residuary interest by liquidating the corporations but there is no guarantee that they will receive anything. The property of a company is entirely separate from the ownership rights of individual shareholders.

Shareholders have entitlement to receive income and this is accompanied by limited liability and social irresponsibility because they do not directly bear the cost of corporate malpractices. Bringing corporations under public control remains a major challenge. • Prem Sikka is professor of accounting and finance at the University of Sheffield

21

PQ back the to basics

Double entry bookkeeping explained Tom Clendon explains why this basic tenet of accountancy is all about accepting that rules are rules – simple as! hether you have just started studying accounting or whether you are about to sit your finals it is always useful to know your debits from your credits.

This is because all financial transactions can be boiled down and explained in these terms.

In a complex world double entry bookkeeping is refreshingly binary and straightforward. For double entry bookkeeping is nothing more than the application of rules. Which is why it is so easily computerised.

There is no room for judgement or subjectivity in applying the double entry rules. So, in a strange way, please don’t try too hard to understand this aspect of accounting because it really is all about the accepting and application of these rules.

W

The five elements In financial accounting five elements have been identified.

Three of these elements will be reported in the

statement of financial position. These are assets (resources that are controlled, for example land), liabilities (obligations, for example trade payables) and equity (sometimes called capital – this is the ownership interest and examples include share capital and retained earnings).

Two elements are found in the statement of profit or loss. These are income (e.g. revenue from selling goods and services) and expenses (e.g. rent and wages).

• The duality rule: The duality rule states that for every single transaction there are always two effects on the elements. For example, when a business pays rent there is an increase in the element of expense that will be recorded in the rent account AND a reduction in the element of asset that will be recorded in the cash at bank account.

• The one debit and one credit rule: When a transaction is being recorded, one effect will always be recorded as a debit and the other effect will be recorded as a credit. Debits

Check out the first in a series of Back to Basic Videos We start with ‘Double Entry Bookkeeping: the Movie’! It stars top tutor Tom Clendon.

You should be able to master the rules of double entry bookkeeping in just eight-and-a-half minutes!

Click here

are traditionally considered first and appear on the left-hand side of an account. Credit entries are written up on the right-hand side.

• The when to debit and when to credit rule: There are two ways to remember when to debit and when to credit. One way is by reference to this table.

Increase

Decrease

Asset

Debit

Credit

Expenses

Debit

Credit

Liabilities

Credit

Debit

Income

Credit

Debit

Equity

Credit

Debit

So, going back to that example of the business paying rent. Here, one effect is the increase in the element of expense, and this is a debit in the rent account. While the other effect is a reduction in the element of asset that will be recorded as a credit in the cash at bank account.

DEAD CLIC The other way is to recall the mnemonic DEAD CLIC, this identifies when to increase an account. The second D stands for drawings (or dividends) which represent a reduction in the equity due to payments being made to the owners. The second C stands for capital – which is another name for equity.

Debits

Credits

Expenses

Liabilities

Assets

Income

Drawings

Capital

Examples of debits and credits Q. What is the double entry when the business takes out a $20,000 loan?

A. Being aware of duality means that the money received will result in an increase in the element of asset – specifically the cash at bank account; but that in addition, as there is an obligation to repay the loan there will be an increase in the element of liability and a loan account.

An increase in an asset is the debit and the increase in the liability is the credit.

By convention this is often summarised in a journal form as follows.

Debit

Cash at Bank account

Credit

Loan account

$20,000 $20,000

Q. What is the double entry when a trade receivable for $800 goes bankrupt and the debt has to be written off as irrecoverable.

A. Being aware of duality means that recognising a bad debt increases the expense of bad debts and it will also result in a decrease in the element of asset, the receivable account.

An increase in an expense is the debit and the decrease in the asset is the credit.

Accordingly, the journal entry for writing off a debt as bad is as follows Debit

Bad debt account

Credit

Receivables account

$800 $800

• Tom Clendon FCCA is an ACCA online SBR tutor with FME. See www.tomclendon.co.uk 22

PQ Magazine July 2020

profile PQ

A bookkeeper’s journey PQ magazine caught the train with Joanne Crompton, a real inspiration to fellow bookkeepers everywhere oanne Crompton leads a busy life. She is a wife, a mother of four, works in an accountancy practice, is a Victorian house renovator – and, in her ‘spare time’, she is a volunteer at two heritage railways as a steam locomotive fireman.

Her first venture into bookkeeping began back in 1995 after the birth of her son – her job was to collect the monies in a small mother and toddler group. This is where she first developed a passion for bookkeeping and accounts.

Eventually this experience led to a career working with various companies within the manufacturing industry, dealing with the normal basic day-to-day bookkeeping tasks and monthend procedures.

Throughout this time she felt she needed a

J

PQ Magazine July 2020

recognised qualification to push her career forward, but the time and opportunity never arose.

In October 2018, she moved to a small accountancy practice as a bookkeeper and payroll clerk, but she worried about the little gaps in her knowledge.

Shortly after starting in her new role she was diagnosed with a rare form of aggressive cancer, which rightly changed her whole perspective.

Joanne decided it was now or never to train as a bona fide bookkeeper.

She set about doing her research. She needed a course that she could take at home, in her own time, that fitted into her busy life. She quickly decided the ICB was the right institute her, and through the ICB website she found approved provide the Training Link.

Signing up for Level 2 and 3, she began her studies in April 2019 while recovering from cancer treatment, and passed her ICB Level 2 qualification in October 2019. She achieved a Distinction with Honours at 98%.

Joanne began her ICB Level 3 qualification shortly after, and her aim is to finish that and then go on to study the ICB Payroll qualification.

The end goal is ICB Level 4.

She has nothing but high praise for Training Link. She particularly liked the official student group, moderated by tutors, where you can discuss things with other students.

Joanne plans to continue working in practice, and says: “I love the variety it brings and being ICB qualified will enable me to provide the best and excellent quality service that I can.”

• If you want to become a qualified bookkeeper check out Training Link, a PQ magazine award winner, at www.training-link.co.uk 23

PQ ACCA exams

‘Your Honour, I present the case for AFM’ Sunil Bhandari puts the case for the Advanced Financial Management option paper hoosing your ACCA Strategic Professional Level option papers is important. Your choice will be driven partly by necessity, partly by your interests, partly by your comparative strengths and partly by your future career progression. But may I ask you to keep in mind the option paper’s comparative pass rate. There are so many ingredients that are needed to make the correct choice and ultimately achieve your target – to qualify.

AFM (formerly called P4) is one of your four choices. Unfortunately, I can say very little about the other three option papers. May I leave that responsibility to my fellow tutors who teach/specialise in those papers.

They act on behalf of their papers and I nod in due respect. I am the advocate that is representing my client – AFM. AFM is the ACCA’s introduction to the world of Treasury. The treasurer is the spider at the centre of any major company’s web of relationships – whether externally with bankers, shareholders and the markets, or internally with subsidiaries competing for the next CAPEX dollar, or precious liquidity. The currencies of AFM are project appraisal, risk management and business valuations.

AFM practitioners are looking through the windscreen driving the enterprise, and the changes wrought by the global financial crisis, quantitative easing and the shifting sands of global political influence.

AFM seeks to give you the tools to make decisions, manage risk and value entities. AFM is about solving real life problems with real life solutions, and to boot it’s great fun.

C

Where does this story begin?

P4 launched in December 2007, with a ‘steady as she goes’ approach, until the ‘infamous’ June 2009 paper. I’ll never ever forget that paper: technically demanding and extremely time-pressured, it left an indelible stain on P4’s reputation with many tutors. June 2009 is 11 years ago, but to this day many will say “yes, financial management is interesting, but don’t sit AFM, it’s too hard”.

The way back from that deep abyss involved a new examiner and a (welcome) change in style. P4 became ‘firm but fair’, and approved ACCA P4 articles gave well-prepared students the guidance they deserved. As the author of several of these articles, four of which are still on the ACCA website, my brief was to make it practical and relevant.

However, P4 retained its ‘tough’ reputation, and many students, looking for the fastest route to qualify, chose option papers with higher pass rates. This is perfectly understandable, but as stated above, is only one of several factors to accrue for when choosing your option papers.

All that changed with the September 2018 paper. Suddenly AFM jumped to the front of the pack.

So what happened?

1. A new 100% compulsory format made the exam fairer: before that the question you chose could impact your chances. Now, you simply decide the order you intend to attack the paper and ‘go for it’.

2. Clearer guidance: 2 of the 5 AFM syllabus areas will be examined every exam: Advanced Investment Appraisal and Treasury and Advanced Risk Management. Business Valuations is also a common visitor. Students should always cover the whole syllabus, but some ‘some topics are more equal than others’.

3. A more predictable written content. Between 48% and 52% of marks have been for theory/written content, often drawn directly 24

from an official ACCA technical article – for example, March 2020 Q1 references the article ‘Patterns of Behaviour’.

4. AFM ‘numbers’ became more susceptible to pro-formas, as long as you recognised the ‘clues’ in the questions. Here, reading the question carefully is key: what appears to be a unique question is often asking you to apply familiar skills and techniques.

5. There is a clear pattern that AFM questions are predominantly being sourced from what has been set in the past. For example, March 2020 could be traced back to similar questions from five previous papers. History repeats itself.

These are all positive factors that have benefitted the students who have attempted and cleared AFM. More importantly, they should be noted by the candidates preparing for the future AFM exams – whether that be paper based format or the new CBE. However, there is an important point that students should note very carefully. AFM candidates are still expected to be able to understand some basic maths, irrespective of the exam format they are sitting.

For example: 1/(1+r) ^n = (1 +r) ^-n AND 3N = N^(1/2) But what about CBE? Computer based exams (CBE) will change everything. CBE exams require different skills as compared with their paper cousins. But each option paper will be impacted differently.

At the time of writing I’ve prepared videos debriefing 26 past AFM exams. for my CBE question-based revision course, and aim to prepare another 20 videos this season. My conclusion is that the ACCA CBE spreadsheet makes ‘crunching the numbers’ in AFM much easier. The photo shows the same question answered on paper and in the CBE spreadsheet. Which do you think was quicker to prepare?

ACCA, to their great credit, have created a CBE practice site for you to use. Those tutors who use that site can mark questions and exams they set for their students to practice. This is an invaluable resource. Watch this space for another article on how best to prepare for your AFM CBE exam.

‘My closing statement’ AFM puts accountants at the heart of doing business. For over 30 years I’ve enjoyed making financial management accessible to students, and getting them through their exams. The new CBE exam is going to make it even more fun.

Choose AFM because it’s interesting, fun and above all relevant.

I rest my case.

• Sunil Bhandari is an online tutor with FME Learn Online.

See www.SunilBhandari.com PQ Magazine July 2020

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interview the PQ

In the fast lane Daniel Dudley completed his full CIMA qualification with e-Careers, earning ACMA and CGMA status, in just three years. So how did he do that? eet Daniel. He recently became a finance manager, providing financial support to a portfolio of businesses, including tax planning, software implementation and investment appraisals. We asked him about his story so far.

it to be valuable you really need to see how finance works, the knowledge CIMA gives will make it easier to understand but you will need to see it and learn it.

M

You’ve recently fully completed the CIMA qualification. How did you find studying CIMA while working, and how did you manage the work/life balance?

The CIMA qualification is such a great qualification to have, and it’s recognised so widely. Now I have finally finished and am a Chartered Management Accountant I can look back on the amount of sacrifice and studying I had to do for three years and can easily say it has been worth it! Studying CIMA while working full time was a challenge.

I found a few things specifically helped to manage it: • You’ve must set goals: For every course, I set a goal of how quickly I wanted to sit and pass the exam.

My default was 10 weeks for the standard objective tests and you only really have seven weeks for case studies. Knowing I only had 10 weeks forced me to plan what topics I would cover in each of those 10 weeks when I would do mock tests, how much question practice I would do and so on. Then track yourself against this. I had a very detailed study plan and set targets of how many hours I was going to study that week. When I was falling short of where I should be, I could change my schedule to get me back on track.

• Be consistent: I would get to work an hour early to study CIMA, and I got into a great habit of doing this every day. I found that I could get through the content of the course in six to eight weeks. Since it was a consistent effort, my retention of the knowledge was secured for the long term.

• Be realistic with your study plan: Early on in my studies, my wife and I had our first child. As you can imagine my studies dropped significantly as other priorities in life took over. You’ve got to be realistic with your study plans. There are aspects of life that will take over from time to time, year ends, forecasts or budget cycles might mean longer PQ Magazine July 2020

From all the knowledge you’ve gained from CIMA so far, what has been the most important thing you’ve learnt?

Be curious. Obviously, CIMA covers quite a wide range of topics that as an accountant you need awareness of.

The most important lesson CIMA has taught me is to be curious. I found my experience studying CIMA has been enriched by proactively trying to understand topics in depth.

What is your current job title and what are your responsibilities?

I am a Finance Manager for a company that offers operational, commercial and financial support to a portfolio of businesses. My role includes business planning and budgeting, setting up management accounts, tax planning, implementing new controls and software, investment appraisals, liaising with companies’ accountants and more. It’s very varied but has been very rewarding.

Daniel studied CIMA with e-Careers, who offer interestfree payment plans and have exceptional pass rates

hours at work. However, if you factor those into your plan and be realistic with what you can commit to, you’ll find that you can stick to your plans better and get through the papers in no time.

What advice would you give to individuals contemplating starting a CIMA qualification right now?

I’ve spoken to many people in business that wish they had done CIMA. If it interests you, start now. The key with CIMA is to get experience alongside your studies. The knowledge is great but for

How often do you use the skills you’ve learnt from CIMA training in your dayto-day life at work?

All the time! Variance analysis is a management accountants’ bread and butter! I use this all the time to understand why performance is not as expected. There are just so many skills you can learn if you really throw yourself into studying CIMA. The qualification will equip you with the knowledge you need to do well, however if you really invest in understanding and seeking ways to apply the knowledge you’ll find the skills you develop will serve you in many situations in and out of the finance function.

Do you find a career in accounting rewarding?

I find it very rewarding. Accountants are such an important part of any business.

What I find accountants particularly good at is finding out how businesses are actually performing and being able to track that. That’s what I find rewarding as an accountant - helping the business to really understand what is going on..

• Thanks to e-Careers for this article 27

PQ ACCA exams

Those September

changes PQ magazine runs the rule over the syllabus changes for ACCA exams this autumn CCA traditionally uses the September exams to institute any changes it wants to make to its syllabuses. With no June exams for many, it is important PQs get a handle on what is changing.

The good news, says ACCA, is that there are not too many changes overall. There are, for instance, no changes to the Applied Knowledge papers.

For the Applied Skills exams there are some word changes to AA and FM, but there are no syllabus changes this September. ACCA here is just adopting IAASB updated terminology for AA, and tinkered with the few words for FM.

A

For LW and FR the syllabus remains the same.

The one paper highlighted at this level is PM. For September, you will be expected to be able to explain how big data and data analytics can be used in relation to planning, costing, decision-making, and performance management. This reflects changes to section A3d in the syllabus. You will also be expected to be able to explain how, for example, gaining detailed insights in customer purchasing habits would help an organisation plan targeted marketing or decide which products/services to promote, or how detailed performance data

about organisational processes would help to create cost models.

A new learning outcome has been added to this area and looks at challenges and risks around information systems and data analytics (syllabus section A3e. This relates to the investment to collect such data, how that data would be managed and translated into information, and the risks holding so much data may bring.

For the Strategic Professional level SBL and AFM remain the same. The changes are ‘happening’ in SBR, APM and AAA. So, let’s start with SBR first. As detailed in section F1c you will be expected to discuss the impact of current reporting issues in corporate reporting. This could be tested by asking you to apply one or several existing standards to an accounting issue. You may also be asked to provide an explanation of the resulting accounting implications (for example, accounting for cryptocurrency in the Digital Age, or accounting for the effects of a natural disaster and the resulting environmental liabilities). The examinable document shave also been updated to reflect current development.

For APM there have been some additions to the syllabus. Process automation and the internet of things have been added to the syllabus section C3b. You will be expected to understand how these influence the information and systems used by organisations.

Artificial intelligence (AI) has been added to the syllabus section C3c, where you must demonstrate your understanding of how organisations can utilise AI technology to manage processes, collect information, and add value.

The use of presentation tools, such as data visualisation within management reports, has been included in syllabus section C5av.

Although you will not be expected to produce visuals using these techniques, you may be required to explain how such tools can be of use when reporting information at different levels of the organisation.

Finally, there are no significant changes to the AAA syllabus. However, the wording of learning outcome D2b has been revised to reflect the most up-to-date terminology being adopted by the IAASB. The wording now says: “Assess and describe how IT can be used to assist the auditors, and recommend the use of automated tools and techniques, such as audit software, test data and other data analytics tools.”

And that is it. You should note that the TX and ATX papers have a life of their own, as always!

Registered Tuition Provider

28

PQ Magazine July 2020

qualification choices PQ

CIMA vs ACCA Liz Hulls looks at the relative advantages of both ACCA and CIMA. So which is best for you? ou’re about to finish your AAT qualification, or graduate from university, or simply contemplating starting out in your accounting career.

Your next choice is to select from an initially overwhelming selection of acronyms: ACA, ACCA, CIMA, CIPFA. You’ve spoken to other accountants and your manager at work to find that the only qualification that they recommend is of course, their own!

Unless you secure a training contract with one of the Big 4, your most likely choice will be between ACCA or CIMA. Each is a wellrespected professional qualification that will boost your earning potential and be highly regarded in the UK and overseas job markets.

So how do you make that choice?

Y

1. Career path It is always difficult at an early stage in your career to imagine where you see yourself in five years’ time. If you can currently only envisage working in business or industry, then CIMA is more likely to be the qualification for you. If you would prefer the flexibility of being able to work in industry or practice, or maybe even as a self-employed accountant, ACCA might be more suitable.

2. Study route Both qualifications will involve passing many tough exams. Launched in November 2019, the new CIMA syllabus comprises 16 exams (depending on exemptions), three of which are case studies. While the case studies can only be sat quarterly, the remaining 13 exams are on demand, giving you greater flexibility about when to study.

ACCA has 13 exams (depending on exemptions) which, from September 2020, will all be computerised. With the exception of the first four papers, these exams can only be sat quarterly, giving structure to your

study, but offering slightly less flexibility.

3. What will I study?

The CIMA qualification offers modules such as ‘Project and Relationship Management’ or ‘Risk Management’, with the emphasis on managing performance. The new syllabus embraces how the digital world affects finance with management and financial accounting forming core parts.

You will find both management and financial accounting modules within the ACCA qualification and more technical aspects of accountancy. Unlike CIMA, your exams will include both audit and assurance and taxation modules, which offer the potential to specialise in the future.

It is a difficult choice. “I wanted to be able to add value to the existing figures with meaningful analysis and new ideas,” said CIMA qualified Sam Humphreys (Financial Controller, Oxfordshire E-commerce).

Whereas Jack Strudley (Financial Accountant, Oxford Sciences Innovation plc) felt: “ACCA would give me the opportunity to become a more versatile professional with exposure to all aspects of accounting.”

Whichever qualification route you choose, you will be embarking on a challenging path, but the financial and personal rewards will be immense.

• Liz Hulls is a director and tutor at Vale Financial Training

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PQ Magazine July 2020

www.bookkeepers.org.uk/PQ

The Institute of Certified Bookkeepers

29

PQ AAT the qualification

Keeping a ‘level’ head with the AAT

which could then lead me onto further qualifications.

I thoroughly enjoyed the Level 1 Access Award and, upon completion, it solidified the plan I had before undertaking the course - to continue with a career in accountancy. I made it my goal to become MAAT qualified by the age of 30.

My intention when starting my Level 2 in Accountancy was to go on to be Level 4 qualified and at a high pass rate. I wanted to be achieving distinctions or high merits at least, to prove to myself that I was not only getting qualified but understanding the material to a high level.

The qualifications have allowed me to obtain two promotions and three pay rises since embarking on a career in the accounting industry.

I moved from property management accounts assistant to assistant accountant with my previous employer and since December 2019 I have undertaken a new role as a trainee accountant at a local chartered accountancy.

In my new job, my qualifications have allowed me to proficiently undertake more extensive duties, which include accounts preparation, payroll, bookkeeping, audit work, self-assessment and VAT returns.

Upon completing my Level 3 in Accountancy I got an immediate pay rise, which would not have been possible without gaining the qualification. My qualifications have also allowed clients to feel more confident in my decisions and work, as they know that I am qualified to a specific standard.

Once I have finished AAT – which I hope to do by this time next year – I will be moving onto chartered accountancy with my current employer. They have advised that they will fully fund my course, which they have already started doing with AAT Level 4, so that’s great for me and my future!

Andrew Taras describes his AAT experience via distance learning aving started his accountancy distance learning training two years ago, Andrew Taras recently began the Professional Diploma in Accounting, the final step in his AAT progression.

That journey has seen him complete the Level 1 Access Award, Level 2 Foundation Certificate in Accounting and Level 3 Advanced Diploma in Accounting – all with Premier Training.

Here, Andrew reflects on his progress, which has enabled him to gain promotions, increase his salary and target a career in chartered accountancy…

H

I was working in a junior credit control position in London, where my job role focused on simple credit control tasks and debt collection. At the time I had no understanding about what a career in accountancy or finance was like and had limited knowledge in the field.

When I relocated to Cleethorpes in Lincolnshire I treated it as a fresh start and decided to fully jump into a career in accountancy, specifically with the aim of going as high as I could go. I started with Level 1 as I wanted to see if I enjoyed the ‘basic’ principles of bookkeeping,

‘

Award-winning AAT courses and apprenticeships Flexible learning to suit your lifestyle mindful-education.co.uk/students 30

PQ Magazine July 2020

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profile PQ intelligently”. The ACCA exams are as much about approach as providing an answer.

Studying while working full time, and having other commitments, is difficult and can be a lonely journey if you do not know anyone else studying the course. It is also difficult to fit exams in, while doing a busy month end and working crazy hours.

I set up the ACCA Distance Learning Students group on Facebook in September 2014. As I was studying at home I didn’t have any contact with fellow students, and it provided a perfect platform to share questions – and get some answers! The group has now grown to over 2,400 members, and I have seen fellow travellers gain qualifications, joined in their success, helping to motivate others to ‘get qualified’.

Life’s ups and downs Families do not understand the pressures that students put on themselves. We often miss out on events and family time to study. The most heard quote is, ‘you will be fine’; but secretly you are in a panic and feel guilty you are not studying.

I have sat on the beach with my study books, on trains/planes/buses, at a concert a few days before the exam – torn between not missing out and putting in the hard work. The best comfort is to see, via the Facebook group, that you are not on your own. There are many other students who feel the same!

This journey has not always had a positive impact on my mental health, and sometimes I have felt isolated. I am pleased to see this has now been recognised as an issue and many accountancy bodies are now providing wellbeing support.

The highs on this journey have been winning a PQ magazine editor’s award for the Facebook group, being invited to observe on an ACCA members panel (an honour as a student), and PQ magazine chats to recently qualified ACCA Becky Hennessey also to work with ACCA to give feedback on about her journey, and asks if she has any tips for fellow travellers student views. The biggest high, though, has to be receiving that last result to say you have ecky Hennessey’s LinkedIn profile awarded exemptions on finished! says it all. She is “an adaptable, ACCA, I was starting again.

I’ve met some fantastic I have sat on the beach resourceful and enthusiastic It was disheartening, but people and made friends on accountant” who is now both AAT (fellow also exciting to embark with my study books, on this journey and received member) and just recently ACCA qualified. on something new. I was some amazing support from trains/planes/buses, We can confirm she is all those things. lucky to get a temporary job tutors and work colleagues, PQ magazine first came across her when during the summer after both past and present. at a concert a few days she created the UK ACCA Distance Learning leaving university that gave I am looking forward to Students Group on Facebook in September me a lot of exposure to seeing ACCA from the before the exam 2014. The group even has a PQ magazine accounting and operational other side of the fence and trophy to its name; it picked up the Editor’s issues. It was a business what opportunities it may award in 2019. that had been through a takeover and had bring in the future, as well as celebrating once But, let’s let her tell her story… joined a new group; I was left with eight boxes lockdown has finished!

Hello, I am an ACCA member who has of paperwork, a copy of the Sage accounts Some final advice just qualified after five years of studying and six members of staff – none who were ACCA. To tell you the truth, it has been involved in the finance or operations, so I hit ACCA is a professional qualification. It takes a journey of ups and downs throughout. If you the ground running. This role enabled me to hours of commitment, sometimes sleepless are a student just starting out, on your ACCA study AAT in the evening and allowed me the nights, and it will be a rollercoaster of emotion. journey it is difficult, but I can assure you it seek progression to other roles.

If you are able to plan to study effectively, lean is totally worth the time and effort at the end. on study support networks, be honest with It’s not a race The hard part of the ACCA journey is to open yourself and look after yourself mentally. the book!

Studying ACCA is not a race. I received a few And remember, it’s not a race to I attended university but did not finish my fails along the way and I am proud to admit the finish line – you will be able to course for various reasons. After feeling a bit I was not defeated. A Henry Ford quote has achieve ACCA status! lost I did AAT and then ACCA. always stuck with me – “Failure is simply the • Becky Hennessey is a management While many of my friends had been opportunity to begin again, this time more accountant at Coventry University.

Becky’s story

B

‘

PQ Magazine July 2020

33

PQ Derby County - a financial case study

The true price of £ootball Kieran Maguire looks at how one top football club, Derby County, changed its accounting practices to make things look better off the pitch erby County Football Club was incorporated in 1896. It has detailed the accounts of this fine club ever since. Anyone who has been to Derby for a match will tell you it has traditionally been a great day out for away fans, either at their former home, the Baseball Ground, or at Pride Park, where locals call everyone “duck”, which is endearing if a little odd. In September 2015 Derby County Football Club Limited were acquired by SevCo 5112 Limited, a company set up by local businessman Mel Morris when he bought the club from its previous owners. SevCo 5112 Limited’s accounts for the first year of trading were for the 12 months to 31 August 2016, which is perfectly acceptable. It did mean that including the results for Derby County Football Club Limited was a bit tricky, as Derby’s accounts were to the year ended 30 June 2016.

Under the new regime Derby invested heavily in players in 2015/16, spending £26.6 million. Manager Paul Clement was sacked by Morris in February 2016 for not playing football “the Derby way”, and the club missed out on promotion to the Premier League after being eliminated in the play-offs by Hull City. On 28 March 2018 the club, via the official website, published the following press release: “Derby County have today announced their financial results for 2016/17 season. Reporting another record turnover and more strategic investment on the playing side, operating functions and infrastructure of the club… The financial year 1 July 2016 to 30 June 2017 saw a best-ever Championship turnover (in non-parachute years) of £29m, up £6.4m on the previous year… The signing of players including Matej Vydra, David Nugent and Ikechi Anya were made during… the year… the sales of Jeff Hendrick, Lee Grant, Will Hughes and Tom Ince in this financial year contributed to a profit on player registrations of £16.2m… Total staff costs across the Clun rose from £33.1m to £34.6m… The overall result was a loss of £7.9m in the financial year, compared to £14.7m in the previous year.”

The website did not, unlike the approach taken by other clubs, publish the accounts themselves. The local media summarised the press release in an article and as the results seemed an improvement on the previous year, there seemed little to get excited about, so everyone lost interest quickly.

On 6 April 2018 the accounts of Derby County Football Club Limited were

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34

submitted to Companies House. When compared to the press release, a detailed analysis of the accounts revealed, as C&C Music Factory used to sign: “Things that make you go hmmm…”. The income total had indeed increased by £6.4 million (an impressive 29%) compared to the comparative figures for the previous year, and the wages figure by a far more moderate 4 per cent. On the face of things this looked as if the club had controlled costs well for the year.

The wages note also revealed that the average number of employees at the club had plummeted from 251 to 152, which seems strange given the club had not changed its activities in the year and so it seems difficult to justify a 40 per cent reduction in staffing levels. In the strategic report there was reference to companies called “Club DCFC Limited” and “Stadia DCFC Limited”, but no reference to how many, if any, jobs were transferred to these companies.

The profit and loss account did show a loss of £7.9 million for 2017 as per the press release. The loss shown, however, was after players sales, which are volatile and unpredictable. The operating loss for Derby was over £23 million. The Debry press release referred to the sale of Tom Ince and Will Hughes as being included in the profit on the sale in the year ended 30 June 2017. The excellent Hughes was sold on 24 June 2017 for an estimated £8m to Premier League Watford, a transaction perhaps accelerated to book a decent profit in the 2017 P&L account. Ince, however, was not sold by Derby until 5 July 2017. Some would argue that the profit on the sale should therefore be delayed until the year ended 30 June 2018, although the accounting rules here are ambiguous.

Another figure that looked unusual was that of player amortisation, which if you recall is the price of a transfer fee spread over the contract life. Derby spent £51 million on players in 2016 and 2017 according to the accounts, yet the amortisation charge in 2017 was only £5.1 million. Until 2015, Derby’s accounting policy in respect of transfers was identical to that of all other clubs: “Amounts paid to third parties for players’ registrations, Football League levies, agents’ commissions and compenstation for management and coaching staff are capitalised as intangible assets and amortised on a straight line basis over the period of the players’ or other employees’ PQ Magazine July 2020

Derby County - a financial case study PQ contracts. Players’ registrations are written down for impairment when the carrying amount exceeds the amount recoverable through use or sale.”

(Derby County FC) But the club then changed its policy to the following: “The costs associated with acquiring players’ registrations, inclusive of EFL levies, or expanding their contracts, including agent fees, are capitalised and amortised over the period of the respective players’ contracts after consideration of their residual values.” (Derby County FC) It may not look a significant difference, but the key words are the final ones “amortised over the period of the respective players’ contracts after consideration of their residual values.” Under such a policy a club has the opportunity to be creative with the figures to reduce the annual amortisation charge and so perhaps comply with FFP rules.

Consider the following: Fulchester Rovers signs a player for £12 million on a four-year contract. Most clubs would therefore have an annual depreciation charge of £3 million a year. If the club however allocates a residual value of the player (residual value is the expected value of the player at the end of the contract) of say £8 million, then the annual amortisation charge falls to £1 million a year (£12m - £8m)/4). This would boost profit or reduce losses by £2 million in a year.

The amortisation charge as a proportion of the average cost of players at the start and end of the year for 2016/17 shows Derby County on 11% at one end of the table and Barnsley at the other on 63%. A low figure means that amortisation is only a small fraction of the cost of the players and therefore has a relatively smaller impact on profits and losses. Derby County have by far the lowest amortisation percentage in the division for 2016/17. Two years earlier, when their accounting policy was the same as for all other clubs, the figure was 29%, much closer to the divisional average. If the figures are inverted it means that Derby are effectively amortising their player signings over nine years (1/11%).

A look at the accounting rules on the topic (Financial Reporting Standard FRS 102) per the Institute of Chartered Accountants in England and Wales shows the following: FRS 102.18.23 states that the residual value of an intangible asset must be nil unless either:

PQ Magazine July 2020

• A third party has committed to purchase the asset at the end of its useful life, or • There is an active market for the asset from which the residual value can be determined and which is probable that such a market will be in existence at the end of the asset’s useful life.

The rule would appear to suggest that Derby should not be using residual values for players income unless: a. Derby have a third party committed to buying the player at the end of his useful life. This sounds reasonable, but surely at the end of a player’s contract he is entitled to a Bosman transfer and so there would be no residual value, or b. There is an active market for the asset. An active market is defined by accountants as “a market in which transactions for the asset take place with sufficient frequency and volume to provide pricing information on an ongoing basis”.

The problem here is that when dealing with individual footballers, they are not being transferred on a frequent basis or at volume. There is, after all, as Derby fans occasionally sing, only one Bradley Johnson, and as such there is not a set price for his registration. A football registration is not the same as the value of a barrel of oil or a taxi licence for a city where the value of the asset is identical. It would therefore appear that Derby’s approach is inconsistent with the rules. This doesn’t mean the club is wilfully doing something wrong, but the opportunity to reduce amortisation charges to comply with FFP limits is amplified.

So, what about the change in employee numbers? A few days after Derby County Football Club Limited submitted its accounts for 2016/17, SevCo 5112 Ltd did the same. SevCo 5112’s accounts were for the 10 months to 30 June 2017. This appears logical as it ties in with the football club’s year end. SevCo’s accounts showed that it now controlled a number of companies that had been set up to operate the different activities of the club.

This too is common in relation to the way that club activities are split up.

When it comes to wages and salaries, under accounting rules all subsidiary company results (where the parent owns more than 50%) are added to those of the parent. While it is unusual to separate out the academy team activities from those of the first team (as SevCo does), setting up a separate company to do this is perfectly legal and would give Derby’s owners a better indication of the cost of running the academy.

It therefore appears, rather than Derby employing fewer staff than the previous year, as had been indicated by the Derby County Limited accounts, employee numbers overall had in fact increased in 2016/17.

Wages cost did fall for SevCo 5112 by nearly 7 per cent to £33.2 million.

This, however, only covers a ten-month accounting period. If the figures are pro-rated upwards by multiplying by 12/10 it gives £39.8 million, an increase of 12 per cent over the previous year, much higher than the 4 per cent figure shown in the press release. While Derby and SevCo 5112’s activities are within the law, in terms of being open and transparent the approach is at best described as muddying the waters. Derby will no doubt claim there are legitimate business, operational and tax reasons for the new set up of companies within the group and if so, that is perfectly logical restructuring. What rests less comfortably is the nature of the press release at an earlier date that paints a rosier picture of the club finances than might otherwise be the case. The club can argue that they are under no obligation to make the life of an analyst easy, but being obtuse only makes anyone with a curious mind want to look a bit closer, although the majority of fans won’t care an iota as long as the club is winning and compliant with FFP. The following season Derby’s results also caused concerned as it posted an initial loss before interest of just over £1 million, which seems very modest by Championship standards, but a couple of lines above the figure is £39.9 million of “profit on disposal of tangible assets”. Further investigation reveals that this was the sale of the club’s stadium Pride Park, to another company controlled by the club owner, Mel Morris.

There is nothing illegal in such a transaction but without it the club may have almost certainly exceeded allowable Profitability and Sustainability loss limits and may have been subject to a points deduction the following season.

An understanding of the basics of a set of accounts is of benefit for anyone who wants to analyse the finances of an individual club or division in a league. Some clubs produce excellent summaries of financial data, with Juventus perhaps producing the most detailed of any club in terms of information about players, It is, however, concerning that too many clubs 35

PQ Derby County - a financial case study use creative accounting, legal loopholes, delaying tactics and sleight of hand when reporting their financial affairs, as this only reinforces the view held by many fans that some club owners are acting in their own interests rather than for long-term benefit of the fans and local community.

DERBY COUNTY FC PROFIT & LOSS ACCOUNT, 2017

Revenue

SUBSIDIARY UNDERTAKINGS OF SEVCO 5112 LTD

Direct operating costs

2017

2016

£

£

29,029,577

22,558,821

(35,261,413)

(35,003,199)

(6,231,836)

(12,444,378)

(12,003,888)

(11,608,379)

(5,041,196)

(3,370,103)

(23,276,920)

(27,422,860) 199,661

Name

Principle activity

SEVCO 5113 Limited

Intermediate holding company

Gross loss

Global Derby (UK) Limited

Intermediate holding company

Administration expenses

Gellaw 101 Limited

Intermediate holding company

Derby County Football Club Ltd

Players activities of a professional football club

Amortisation of players’ registrations, and associated costs

Club DCFC Limited

Event and catering activities

Operating loss

Stadia DCFC Limited

Sponsorship and broadcasting Playing activities of a professional Football club

Profit or disposal of players’ registrations, levies and ass. cost

16,154,429

The Derby County FC Academy Ltd Derby County Stadium

Limited

Exception operating cost

–

DCFC Limited

Dormant

Loss on ordinary activities before interest

(7,122,491)

Interest receivable & similar income

–

(all companies: Class of shares - Ordinary, Holding - 100%) Source: SevCo 5112 Ltd

SEVCO 5112 MONTHLY NUMBER OF EMPLOYEES 2017 2017

Interest payable & expenses

2016

12,433,568

64,278 (750,224)

Players & apprentices

69

62

Loss before tax

(7,872,715)

Management & coaching

77

75

Tax on loss

–

Groundsmen, kitchen & cleaning

20

19

Loss for the financial year

(7,872,715)

117

109

283

265

Administration and marketing

In addition to the above the Group employs on average 252 (2016 -282) casual matchday staff at a total cost of £413,055 (2016: £455,935) Source: SevCo 5122 Ltd annual report

(14,789,631)

– (14,725,353) – (14,725,353)

Source: Derby County Football Club Limited This is an extract from Kieran Maguire’s fantastic book ‘The Price of £ootball’. To order a copy of Kieran’s book go to: https://www.agendapub. com/books/33/the-price-of-football • Kieran Maguire is a Senior Teacher in Accountancy at the University of Liverpool

Try our football finance quiz 1: Which club in the Premier League made the highest operating profit (excluding player sales) in 2018/19?

A: Manchester United B: Liverpool C: Spurs D: Chelsea 2: Which club is sponsored by a taxi company that owns no taxis?

A: Aston Villa B: Leeds United C: Brentford D: Sheffield Wednesday 3: How much interest have West Ham owners charged the club on their loans?

A: £1.9million B: £6.4million C: £12.7 million D: £18.7 million 4: Which club had the highest operating profits (excluding player sales) in the Championship in 2018/19?

A: Aston Villa B: Rotherham United C: Leeds United D: Millwall 5: Which club paid a player’s mother £700,000 to be an academy scout?

A: Manchester City B: Chelsea C: Derby County D: Birmingham City 6: What is the maximum loss allowed in the Championship over a three year period under Profitability & Sustainability (Financial Fair Play) rules?

A: £39 million B: £15 million C: £105 million D: £52 million 7: What was the total lowest overall cost to buy tickets to see all of England’s games in the 1966 FIFA World Cup? A: £15.10

B: £2.62 C: £29.48 D: £8.48 8: Which club was top of the 2020 Deloitte Money League?

A: Real Madrid B: Barcelona C: Bayern Munich D: Manchester United 9: Which club has made the most profit before tax in Premier League history?

A: Arsenal B: Spurs C: Manchester United D: Liverpool 10: Which Championship club paid £226 in wages for every £100 of income in 2018/19?

A: Birmingham City B: Aston Villa C: Reading D: Wolverhampton Wanderers

Answers 1. C • 2. D • 3. D • 4. B • 5. C • 6. A • 7. B • 8. B • 9. A • 10. C 36

PQ Magazine July 2020

wellbeing PQ

Lockdown takes its toll

Wellbeing has dropped dramatically among PQs, according to a new survey from Hays. Karen Young explains all ellbeing among UK workers has taken a hit during the Covid-19 crisis, as businesses and staff across industries grapple with extraordinary change and ongoing uncertainty.

PQs are no exception to this, as findings from the new Hays Wellbeing Matters report bring to light a deteriorating picture of wellbeing among part qualified accountants. With particular focus on work-life balance and mental health, here’s what this picture looks like and what employers of finance professionals can do to improve wellbeing all round.

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Wellbeing takes nosedive Since lockdown restrictions were enforced earlier this year and many PQs started working remotely, wellbeing has taken a tumble, according to findings in the report. Almost twothirds (62%) of PQs rated their wellbeing positive before lockdown restrictions, which dropped to just 33% since the lockdown has been in place.

Furthermore, those who rated their wellbeing as negative rose from 6% to 27%.

Clearly being under lockdown and having to work remotely is taking its toll on PQs. Accountancy is predominately traditionally an office, desk-based job, so shifting from this to remote working arrangement is a huge adjustment that many have had to make in an unexpectedly short amount of time.

There are many reasons why wellbeing has suffered during lockdown, but the most common answer given by PQs was a lack of social PQ Magazine July 2020

interaction (cited by 27%), followed by feelings of isolation and loneliness (13%). An increase in workload (11%) and boredom (10%) were also factors.

Work-life balance under the spotlight Work-life balance is important to those in this profession; interestingly, it has increased in importance for more than two in five (43%) PQs since lockdown began. But despite this, over half (52%) rate their work-life balance between average and poor. While the recent passing of the tax year is a demanding time for some PQs and certainly won’t have eased any strained workloads, clearly work-life balance is an issue which needs addressing when it comes to wellbeing.

In tandem with this, mental health is also under the spotlight as an element of wellbeing which has been impacted by the current environment. Adequate mental health support from an employer has also grown in importance since lockdown (according to 46% of PQs). As we were reminded in Mental Health Awareness Week in May, it’s vital that we comprehend how to maintain good mental health now more than ever, as it feeds so directly into overall wellbeing.

PQs look to employers for support What role do employers play in the maintenance of wellbeing, work-life balance and mental health among PQs? What responsibility do they have and how can they best support professionals

feeling the effects of lockdown?

Almost three-quarters (71%) of PQs say their employer has a responsibility to look after their wellbeing, yet over half (53%) state that their employer hasn’t provided any wellbeing support during the lockdown. This isn’t the case across the board, however – as of those who said their employer was providing support, close to a fifth (15%) said their employer is offering social activities, followed by counselling (12%) and health (such as an online doctor, also 12%).

These steps are encouraging and it’s positive that professionals are looking to their employers for support during this time. However, to improve wellbeing among PQs, employers could go to greater lengths by putting some of the following measures in place: • Assess the impact lockdown has had on staff wellbeing through one-to-one interviews or short surveys.

• Schedule in more regular video communication with teams both for business updates and socialising.

• Be flexible with schedules and expectations.

• Offer wellbeing training and resources which are easily accessible by all.

The wellbeing of staff needs to be a top priority for all employers as the impact of the virus is felt on our personal and professional lives. Although everyone’s experience and situation will be unique, it’s important that steps are taken by employers to support their staff no matter where they’re working and help them maintain wellbeing in what is a challenging time for us all.

• Karen Young, Director of Hays Accountancy & Finance 37

PQ CIPFA spotlight

Tomorrow’s public finance leaders will pave the way Rob Whiteman explains how you can take small steps to develop the skills you need to become leadership material here are significant challenges facing the public sector in the years to come. Meeting these challenges head on requires us to ensure that the aspiring leaders of tomorrow have the skills they need to tackle anything that may arise.

Even though tomorrow may look grim, focusing on leadership skills for students and employees is a necessary step to making sure that organisations will flourish in the future regardless of the current uncertainty.

Not everyone is born with the skills or confidence to be a natural leader. In fact, when I was beginning my career becoming a chief executive was the farthest thing from my mind.

But don’t fret, I know first-hand that leaders can be created and developed through training and practice.

Some people seem to adopt a leadership role very naturally, whether in the work environment or in social situations. We can all learn from watching these people, but it’s important to remember that styles of leadership vary and that an individual can adopt different leadership styles depending on the context and their own personality.

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Where a decision has to be made that needs buy-in and input from an entire team, then a consultative approach is appropriate. However, if there’s a fire in the room, you want someone to take control and tell everyone to get out. Very different styles, but both are forms of leadership.

Learning about leadership begins with watching those around you. Observing others in leadership roles is one of the best ways to find out what leadership styles can be used.

Think of your line manager at work. What kind of style do they use? Do they involve everyone in decision making, or only certain people?

How does it make you feel if you are not one of those people? How does it make you feel if you are? Thinking about this means you are considering the impact of the leader on the individual, which is something to bear in mind when you are in a leadership role. Leadership is not only about tasks and outcomes, but about people.

If you have the ability to do so, start by shadowing leaders in your organisation. Students will benefit from shadowing their Executive Director or CEO for a day. It gives an insight into the different tasks and requirements of the role and how leadership can vary from task to task, or meeting to meeting. Ask if this is something that could be offered – even during the current time when we are working remotely. Being present during online meetings can still provide

good insight into how different leaders in your organisation operate.

Can you ask to be given some experience in leading a small project? The opportunity to develop your own leadership skills will help you work out what you find easy and what you find more challenging. Ask for feedback on your performance and be prepared to hear both positive and negative comments. Every good leader needs people to give honest feedback and a great leader will listen to it and act on it.

Think of what you can do outside of work – are there committees you can join where you can develop some leadership skills? Even the smallest of groups can offer experience that will stand you in good stead for the future.

You can also learn leadership theories from textbooks. There are countless resources available online to help you learn the theory. It’s putting the theory into practice and being willing to respond and change your approach that truly helps you develop your leadership skills.

Learn from others and then, when you are an experienced and respected leader, others can learn from you.

The road ahead looks rocky and full of uncertainty, but one thing that we do know is that today’s students will become tomorrow’s leaders. Taking control of your leadership training will help you take on any challenge that comes your way – to the benefit of not only your organisations, but the public sector and the wider country.

• Rob Whiteman, CIPFA CEO PQ Magazine July 2020

break-even analysis PQ

Finding the edge This introduction to this technique will be of interest to Level 3 students and those on the Accounting Apprenticeship Programme – Assistant Accountant, says Philip Dunn Output

3,000

4,000

5,000

£

£

£

Sales revenue

240,000

320,000

400,000

Less variable costs

120,000

160,000

200,000

Contribution

120,000

160,000

200,000

Fixed costs

60,000

60,000

60,000

Profit/(loss)

£60,000

£100,000

£140,000

A question often asked by management is at what level does the business break-even?

From the flexible budget report we can determine the volume of output at which the business breaks even and calculate the margin of safety at an output of 5,000 units that being the target output for the quarter set by management.

Contribution per unit of output: £

rainee accountants, accounting technicians and certified bookkeepers prepare management information on a regular basis in the form of management accounting reports, and have in their financial vocabulary an array of terminology that is included in such reports to aid their relevance to managers.

Break-even analysis is a management accounting technique that relies heavily on the concept of marginal costing that classifies cost as either fixed or variable in a range of decision-making aids to management.

The terminology embedded in break-even analysis includes: • Variable cost.

• Fixed cost.

• Contribution (sales revenue less variable costs).

• Break-even point.

• Margin of safety.

T

Definitions • Variable cost: one which will increase or decrease in line with the volume of output.

• Fixed cost: one which will remain constant irrespective of the volume of output.

• Contribution: the excess of sales (revenue) over variable cost. This may be expressed in total and or per unit of output.

• Break-even point: that point at which total contribution is equal to total fixed costs and neither a profit nor loss is made.

It is expressed in units as: Fixed costs/contribution per unit Or in ‘£’ value of sales as: Fixed costs/ (contribution/sales) NB: Contribution/sales is referred to as the profit volume ratio.

• Margin of safety: This can be expressed in terms of sales revenue or number of units. It is the excess of sales revenue over the break-even point in sales revenue or the excess of units of output over those at the point of break-even and is usually expressed as a percentage.

Mini case study: Dunn Strike is an SME and manufactures a high-quality cricket ball.

The flexible budget for three months ended March 2020 showed: PQ Magazine July 2020

Selling Price

80

Variable Costs

40

Contribution per unit

40

• Break-even point in units Fixed costs/Contribution per unit £60,000/£40 = 1,500 units or 30% of output • Break-even in sales revenue Fixed costs/ (Contribution/sales) £60,000/ (£200,000/£400,000) £120,000 (1,500 x £80) • Margin of safety 5,000 units less 1,500 units = 3,500 units or 70% of output Sales revenue £400,000 less £120,000 = £280,000 (3,500 x £80) The above calculations of the margin of safety are expressed in both units and sales revenue.

The table below shows the margin of safety at the varying levels of output: Output units

3,000

4,000

5,000

Break-even point (units)

1,500

1,500

1,500

% of output at break-even Margin of safety (units) % Margin of safety

50%

37.5%

30%

1,500

2,500

3,500

50%

62.5%

70%

Conclusion The business has a relatively low level of break-even (30%) of output based on a budget of 5,000 units and thus has a high margin of safety and if this can be achieved it would yield a net profit to sales ratio of 35%.

Such information is vital to management in the control of resources and is of particular relevance in periods of downturn in the volume of business as with the current situation on a global scale. The management need to know at what capacity the business would break-even or what the losses would be at volumes of output below the break-even point.

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PQ CIMA the exams

No place like home Stephen Flatman has some top tips on successfully sitting your CIMA exam at home he Covid-19 lockdown meant CIMA could no longer offer exams at our test centres around the world, but for us it was essential to support our students and help them keep their careers moving.

That’s why we worked with our partners to set up a remote exam testing system from the outset of the pandemic. We started delivering remote exams in May, and so far students in over 70 countries have sat CIMA exams at home.

As national lockdowns are starting to lift exam centres are slowly re-opening, giving you the option to choose the exam delivery format that best suits you, whether that’s a test centre or your home. As Covid-19 continues to disrupt the world for the foreseeable future, we recommend that you continue to book your exam in advance where possible.

We know this can be an unsettling situation so I’d like to share some tips with you here about what to expect when taking your CIMA exam remotely.

T

Cancel any pre-booked test centre exam before attempting to book a remote exam: You won’t be able to book at-home exams until you do so and you’ll need to allow 48 hours before booking your next exam online. Make sure you plan ahead so that you can fit your revision timetable to your exam date. Booking well in advance also means you’re more likely to be able to get your preferred timeslot.

1

40

Make sure you have the right equipment: You’ll be asked to test your set up first to make sure you’ll be able to take your exams remotely: • A reliable device with a webcam and microphone – recommended software is Windows 10.

• A strong internet connection.

• A smartphone.

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Make sure you have a quiet location to sit your exam in before the exam: On the day, make sure you set up the room correctly – ensure the lighting and heating are right.

Remind your friends and family not to call you because you’ll need to keep your phone line free in case the invigilator needs to call. If someone who isn’t the invigilator calls you, that may trigger a call from the actual invigilator and your exam may be terminated.

Your exam will be recorded so you’ll need to give permission for that. This also means you should keep the area around you clear of any distracting photos and pictures.

• 60 minutes before the exam, make sure you are physically, mentally and emotionally ready. Close your eyes and take a few deep breaths to improve your concentration and focus. That’s particularly important as you’re not in a controlled test centre.

• 45 minutes before the exam, click on the link in your confirmation email. Take six photos: yourself, your ID and four photos

3

of your room. You’ll be sent a link to your mobile number to upload these.

We also have a step-by-step guide available on My CIMA. During the exam: You’re not allowed to leave your workspace so remember to prepare accordingly, including having a drink next to you in a clear bottle or glass, for example.

If you have any problems you can raise your hand via the online platform to speak to your invigilator.

Don’t worry if you have connection issues, we know these things can happen, so we have support for you if they do. Keep your phone on throughout, though on vibrate or silent mode so the invigilator can call you if you lose connection.

4

After the exam: Take a deep breath and relax, you’ve done the hardest part.

Your Objective Test and Certificate in Business Accounting exam results will be available 48 hours after your exam. For Case Study exam results, you will have to wait for six to eight weeks.

For more information visit https://www. cimaglobal.com/Studying/Student-CoronavirusCOVID-19-exam-FAQs/ • Stephen Flatman, Vice President, Examinations, Management Accounting, The Association of International Certified Professional Accountants

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PQ Magazine July 2020

company directors PQ

Call of duty – times seven The IOD’s Roger Barker has helped Companies House to post about the role of a company director. So what are the legal duties associated with being a director in the UK?

(such as major shareholders). Nor should they avoid their responsibility to make independent decisions by relying on the knowledge or judgement of other directors or experts.

A director needs to form their own view, and this may require some effort – especially if they are not already familiar with key aspects of the company’s activities.

Exercise reasonable care, skill and diligence There was a time when directors could be appointed purely for their name or reputation, without the expectation that they would actually do any work as a board member. Those days are now over due to the duty for directors to exercise reasonable skill, care and diligence in their role.

The benchmark is that of a reasonably diligent person with the general knowledge, skill and experience that could reasonably be expected from a person carrying out the director’s functions. Also, directors with specific professional training or skills (such as a lawyer or accountant) are held to a higher standard in related issues than less qualified colleagues.

The company constitution The first of these duties is that a director must act within their powers under the company’s constitution. The most important part of the company’s constitution is the articles of association. These are an important set of rules for your company and for your board.

When you registered the company, you may have used the model article available for private or public companies. Alternatively, you may have created your own tailored articles, normally with the help of a legal advisor.

As a director, it’s important to be familiar with the articles of association as they may constrain your decision-making powers in certain ways. If you exceed your powers, then related decisions could be reversed and you might even have to compensate the company for any resulting financial losses.

Promoting the success of the company The second major duty of a company director is to promote the success of the company. This is probably the most well-known of the seven duties.

From the beginning of 2019, a new reporting requirement means that larger companies (with more than 250 employees) will have to explain how they have fulfilled this duty in their annual report.

The duty states a director must act in a way that they consider, in good faith, would be most PQ Magazine July 2020

likely to promote the success of the company for the benefit of its members (shareholders) as a whole. When making decisions, directors must also consider the likely consequences for various stakeholders, including employees, suppliers, customers and communities.

They should also consider the impact on the environment, the reputation of the company, company success in the longer term, and all of the shareholders (including minority shareholders).

A duty to promote the success of the company may seem like an obvious task for a director. However, it brings with it a number of implications.

Board decisions can only be justified by the best interests of the company, not on the basis of what works best for anyone else, such as particular executives, shareholders or other business entities. But directors should be broad minded in the way that they evaluate those interests – paying regard to other stakeholders rather than adopting a narrow financial perspective.

Independent judgement The third major duty requires directors to exercise independent judgement. Directors are meant to develop their own informed view on the company’s activities.

Directors should not be delegates who simply implement the commands of other parties

Conflicts of interest and personal benefits The remaining three legal duties relate to the need for directors to avoid or manage conflicts of interest which may affect their objectivity.

If situations arise which impose multiple claims on a director’s attention or loyalty, it is essential that they disclose them to fellow board members. It will then be up to the other nonconflicted board members (or the shareholders, in some cases) to decide how to manage or approve the conflict and maintain the integrity of the board’s decision-making process.

Examples of conflicts of interest include situations where the director has relationships of a business or personal nature with persons or entities that are affected by the company’s activities. It could also relate to situations where the director may be considering taking advantage, on a personal basis, of property, information or opportunity which belongs to the company.

Gifts or benefits from third parties are also a potential threat to a director’s objectivity.

Most importantly, directors have a statutory duty to disclose any direct or indirect interest in proposed or existing transactions or arrangements with the company.

Keeping a record How can a director prove they’ve fulfilled these legal duties? One of the important purposes of the minutes of board meetings is to provide a record of the board’s decision-making process.

By law, these minutes must be kept for 10 years. Years from now, it may be difficult for you to remember if you fulfilled your directors’ duties in respect of some key decision. The minutes can provide vital evidence that you did – something that you may well have cause to be grateful for.

• Roger Barker is Head of Corporate Governance at the Institute of Directors 41

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careers PQ

CIMA is in safe hands CIMA’s new President Nick Jackson wants to see a change in the definition of ‘value’ Finance professionals have a vital role in making organisations stronger and more resilient in the post Covid-19 world, according to incoming CIMA President Nick Jackson. Acknowledging the impact the pandemic is having he said: “Although events like Covid-19 are thankfully rare on a global scale, they do present opportunity to make positive changes. We must be leaders in showing that change is not something to be afraid of.”

Jackson wants to see management accountants deliver broader stakeholder benefits that take into account social, environmental and economic value. The 87th CIMA President emphasised that finance professionals need to lead their organisations towards the adoption of more sustainable, responsible business practices. Jackson stressed: “We have

Life at e-Careers Civil engineering graduate Jazz Gandhum became the firm’s CEO when he acquired it in 2011. He won ‘Entrepreneur of the Year’ in 2017 at the Amazon Real Business Awards and is also on the board of isotonic drinks firm iPro Sport.

What time does your alarm go off on a working day? I never have an alarm unless I have a plane to catch! When I wake up, I go to work. When I’ve had enough, I come home.

What is the first thing you do when you get to your desk?

Look at all the KPIs I set myself for the month and see how far I have got and how much more is left to do. I also bombard the team with all the to-dos from my end, so it is the first thing they see when they get into the office!

What’s on your desk? Just my Apple Mac, wireless keyboard and mouse and a bottle of water. I hate paper on my desk – I always find a reason why paper should be on someone else’s desk!

What’s the best thing about where you work? The team – they are my family. We work, we dream, so that we can all achieve together.

Where’s your favourite place

for lunch? At home with my three-year-old daughter.

What can you see when you sit at your desk? I have two desks, one in a private office and one on in the central hub with the team. I spend 90% of my time at my central hub desk – so I have the team with me.

Which websites are your favourites and why? I recently started trading, so Yahoo Finance.

And BBC News and BBC Sport.

Which websites do you use for work? We live and breathe Salesforce.com.

How many hours a week do you spend in meetings? A lot of time.

What time do you leave the office? When I have had enough!

How do you relax? I love spending time with my family – three young ones! We love cycling and I am a football enthusiast – I enjoy five-a-side as often as possible.

What’s your favourite tipple?

A good smokey single malt.

How often do you take work home with you? Never, but it’s always in the back of the mind.

What is your favourite TV show? Only Fools and Horses.

Summer or winter? I’m a big fan of summer. I wish to emigrate to Australia one day, due to the endless summers!

Pub or club? Definitely the pub.

Conversation is important.

Who is your hero? Anyone who has achieved financial freedom through hard-work and following the basic ethics, while still giving vital time to their loved ones.

What is the first thing you are going to do when lockdown is over? Play football! Grab a Friday pub lunch with my team, which should drag into a late evening if we play it right.

If you had a time machine where would you go? Nowhere.

I’m content with what I have.

investment grade”. He did this by refocusing the business on its core domestic market. Now move forward to October 2019, and Tesco unveiled a core profit of £3 billion, the turnaround was complete. So in June he announced he was retiring and would leave the company on 23 April 2021.

their job prospects in a postpandemic UK. Prime Minister Boris Johnson is predicting that there is going to be “many, many” job losses as an inevitable result of the lockdown. Speaking at a recent Downing Street briefing he said the government would be more ‘interventionist’ to support jobs. He stressed he would be “investing in the UK economy, investing in infrastructure, taking our country forward, so that we bounce back sharply and decisively”.

Nick Jackson

In brief

to move beyond simply providing insight to the numbers, to bringing more value through recommendations and follow-up action. We need to recognise that the success of a business as exemplified by the figures on a balance-sheet, have many other elements – tangible and intangible.”

He pointed out that organisations’ operating models are made up of people, processes and supply chains.

These exist in increasingly dynamic environments and are answerable to a much broader audience of customers, suppliers and wider society, he said.

Graduating from Exeter University with a degree in education, Jackson became a CIMA member in 1992, and a fellow in 2008. He was co-opted to CIMA council in recognition of his role in promoting the value of CIMA for public sector financial professions while at HM Treasury (it is where PQ first met him!).

He currently works for software technology company Oracle, which he joined on 2016. His CV includes stints at EY, Capgemini, the Ministry of Justice and Ofsted.

PQ Magazine July 2020

‘Turnaround’ CFO to retire Alan Stewart arrived at Tesco when it was in the depths of an accounting scandal, in 2014. The new CFO joined straight from M&S, when Tesco was going through one of the biggest crises in its 101-year history. In 2015 the company recorded an annual loss of £6.4 billion – that’s one of the largest in UK corporate history. Stewart led the corporate restructuring, rebuilt the balance sheet, and guided Tesco “back to

Apprenticeship ‘guarantee’ Young people have been promised a ‘guaranteed’ apprenticeship to help improve

The PQ Book Club: books you should read The AI Book: The Artificial Intelligence Handbook For Investors, Entrepreneurs and Fintech Visionaries (Wiley, paperback and ebook £23.99) This book follows a whole series of best-selling titles, such as The FINTECH Book and The WEALTHTEC Book, and this one looks set to be another winner.

The four authors (yes, it seems a lot, but it works), essentially explain the future of the global financial industry.

This includes how leveraging AI will extend investment

opportunities to more people than ever before.

So, will AI give us utopian perfection? Our experts say that we are all going to need to be much more knowledgeable.

There is an intellectual gap, and this book goes some way to fill that.

OK, the big question – who will still have a job in 50 years?

We discover that the World Economic Forum has said that in the age of AI about 75 million jobs are set to disappear, but on the plus side

some 113 million jobs will be created.

We really enjoyed the section on the morality of AI. Samiran Ghosh believes it is even questionable whether we even have a sound understanding of morality that we all agree on. In moral dilemmas human tend to rely on gut feeling not elaborate cost-benefit calculations.

PQ rating: 4/5 AI will be running our lives before we know it. Time to get educated.

43

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

A job too far

Bored worker wins £45,000 A French worker has won his claim that he had so little to do working for a luxury perfume maker it made him ill! The landmark decision saw Frederic Dasnard awarded £45,000 in damages, with the court ruling he had suffered from ‘bore-out’.

That’s the opposite to burn-out! Dasnard explained his job at Interparfums was a “daily humiliation”, which led to a nervous breakdown and eventual dismissal.

QUOTE UNQUOTE: Villanelle in Killing Eve: “You are more boring than the accountant I just killed and accountants are really boring.”

Whistleblowing reward

Cyberscam students There has been a surge in cyberattacks since the pandemic began. Criminals gangs, mobsters and spies will be the top of most people’s list of culprits. But the experts have said there is another key miscreant – bored students! The chief technology officer at Cloudfare, John Graham-Cummings, said his company had seen hacks increase six-fold in the UK. He explained: “A lot of students have been sent home, and probably among that group are people who like to ‘recreationally hack’… My guess is that a lot of people have got time so they are seeing what websites they can break into.”

’ WEV E

Who said whistleblowing doesn’t pay? The Securities and Exchange Commission recently announced an award of more than $27 million to one whistleblower “who alerted the agency to misconduct occurring, in part overseas”. Apparently, after providing the tip the Commission was able to advance a critical investigation. While this is the largest whistleblower award this year to date it is only the sixth largest since the inception of the programme in 2012. The award takes the total amount handed out to whistleblowers by the SEC over the $400 million mark.

Pictures can sometimes say so much more than words! (top cartoon from Private Eye)

How to destroy your reputation He might have written ‘The Taxpayer Strikes Back’, but that didn’t stop Martyn Arthur destroy his own reputation and making himself “professionally worthless”. The former Revenue man found himself in Cardiff Crown Court for attempting to cheat HMRC out of £120,000 of tax. He was found guilty of submitting inaccurate tax returns and was given an 18-month prison sentence, suspended for 18 months. Once he knew the investigators were on his trail he became argumentative and difficult, but that didn’t work.

Maybe there’s now time to add a new chapter to that book.

A recent book on Facebook’s Mark Zuckerberg revealed that a communications executive would often have to blow-dry her boss’s armpits to eliminate anxiety sweat. He also stipulated that the backstage areas at speaking events had to be cooled to 15C or lower. Another Zuckerberg trait is apparently the ‘cold stare’ that goes into a trance-like silence.

Facebook’s Andrew Bosworth calls it the ‘Sauron’s gaze’, a reference to the Lord of the Rings. It has been suggested that Zuckerberg is thinking at such a high level that the world stops for him – right! I suppose it is all better than the rumour that Steve Jobs was ‘a bit smelly’. He apparently refused to wear deodorant because he believed it would interfere with his health.

GOT THE L OT

Calling Dr Moore We have three copies of Dr Gareth Moore’s ‘The Mindfulness Puzzle Book’ to give away this month.

This is a wonderful collection of relaxing puzzles to help you de-stress and unwind. It is reportedly the first puzzle book designed specifically around mindfulness. There are adult version of dot-todots, mazes and even colouring and spot-thedifference puzzles. What’s not to like.

To get the chance to win on of these great books email ‘Mindfulness Puzzles’ to giveaways@pqmagazine.com. Remember, we need your name and address so we know where you want us to send the prize.

The Body Coach Joe Wicks ‘Lean in 15’ is now a number-one bestseller. If you haven’t got one on your bookshelves never fear, we are giving you the chance to enter the free draw to get your very own copy. As it says on the cover, this book is here to rescue you from depressing low-calorie diets once and for all. There are 100 recipes and guides to some high intensity training for home.

We have three copies of this fantastic book up for grabs. Email giveways@pqmagzine.com, heading it ‘Lean In 15’.

Three readers will be sent the Wicks bestseller.

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 3 July. The main draw will take place on Monday 6 July 2020.

TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM 44

PQ Magazine July 2020