PQ magazine www.pqmagazine.com / www.pqjobs.co.uk
August 2020
Back to Basics with Sean Purcell, who explains the strategic planning process
Timetable to separate audit has been set
11 INTO 3,OOO DOESN’T GO!
Just 11 out of 3,000 equity partners working for the Big 4 firms are black, according to a leading story by the Daily Telegraph. This, says the newspaper’s report, equates to less than 0.4% of the total, compared with 3.3% of the UK population. Deloitte were found to have just one black equity partner, EY and KPMG have two each and PwC has six. Bosses are now pledging to push for better diversity in the top ranks of the firms. PwC chairman Kevin Ellis said: “We should have more black people in senior roles and are accelerating our plans.” It has announced mandatory unconscious bias training for all staff, and wellbeing support for those affected by the Black Lives Matter movement. On top of the partner diversity council there will now also be a KPMG staff diversity council, to ensure all voices are heard.
EY UK chief Steve Varley explained that his firm will double the proportion who identify as black, Asian and minority ethnic (BAME) to 20% by 2025. All of the Big 4 currently disclose their ethnicity pay gap data, but
that doesn’t include a breakdown of the ethnicity of partners. At junior levels the workforce is more diverse. So, for example, at EY some 4.3% of workers are black, compared with just 1% of its partners.
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Deloitte’s Dimple Agarwal said the company will be announcing a new strategy within weeks. She said: “We have a lot to do and much further to go.” At KPMG Anna Purchas, head of people, is reported as saying it has exceed its recruitment target for BAME graduates and apprentices this year. In 2019 research from Green Park revealed that just one of the UK’s Top 20 accountancy firms was led by a CEO from a BAME background. Meanwhile, female leadership across the broader sweep of the leading firms in the sector stood at 15%. Green Park’s CEO Raj Tulsiani said: “The findings… serve to underline the reasons why leaders are being confronted with a steady erosion of public trust in institutions that provide business advice. For many the absence of diversity in the accounting sector is a clear signal that firms don’t understand the need to modernise to reflect their customers.”
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contents PQ
IN THIS ISSUE p28
News 04The environment First ever Green Finance Education Charter launched; plus the Editor’s comment 05Work/life balance How the humble spreadsheet can help you achieve a balanced life 06AAT exams Plans for remotely invigilated exams put on hold 08ICAEW exams Booking system ‘error’ causes problems 09Offensive rant KPMG on the back foot in Trinidad over social media posts by manager 10The audit market Separation of audit from other parts of the business will be happening
sobering reading; and AAT is taking a backwards step. Plus the best of PQs social media 16Audit Big firms will have to separate their audit arm from the rest of their business, says the Financial Reporting Council 17Digital competition Tackling the power and might of Google and Facebook 18A good read Tom Clendon has ten top tips on how you can read your way to exam success 19ACCA exams Association introduces remotely invigilated exams – and explains how it will all work 20ACCA APM exam What the Advanced Performance Management examiner wants from you 22The troubleshooter Dr Dunn tackles the subject of direct material mix and yield variance 24Back to Basics Top tutor Sean Purcell outlines the three steps to understanding the strategic planning process. And there’s an online video to accompany the article – we really spoil you! 27Cyber security Why keeping a business safe from cyber attack is of paramount importance
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August 2020 p33
international outreach programmes are improving public finances across the world 34Tech trends We highlight the six major technology trends that every accountant should know about 35ACCA examiners’ reports It’s really, really important that you read these – here’s our summaries for the March PM and FM papers 36Wellbeing How to develop resilience – and why it is so important 37Careers Life at Boudica Schools Trust; our new Agony
Aunt Karen Young tackles your work-related issues; and our Book Club Review 39Fun stuff – and our giveaways The columnists Robert Bruce When it comes to
audit, the little details really do matter 6 Prem Sikka The tale of two bailouts; or how Germany did it 8 Zoe Robinson Procrastination really is the thief of time 10 Mike Day How to make your team high-functioning while members are working at home 12
p24
11One million futures Deloitte
hits its target for helping people fulfil their potential – and sets new goals 12Tech news Space is the final frontier for the UK government Features, etc 14Your views Accountancy profession should lead the way when it comes to Black Lives Matter; football report makes
28CIMA spotlight Where should
you sit your exam – in the comfort of home or the traditional exam hall? 30ACCA FR exam Struggling with SOCIE? Then fear not, Chris Barlow is here to help 31Ethics How to tackle the ethics question in the ACCA’s Strategic Business Reporting paper 33CIPFA spotlight CIPFA’s
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PQ news
GRAHAM HAMBLY Who said accountancy is boring?
People are always asking me where I find all the news to fill an accountancy magazine each month. The answer is very simple – actually there’s too much, and we have to be selective! I suppose that is my job as editor, to shave the wheat from the chaff, and this month that has been harder than normal. Not that there is a normal these days. So in your August issue we have AAT announcing it is slowing down the move to remote exams, ICAEW professional students struggling to get an exam booked, and the launch of a Green Finance Education Charter (see the article on this page). You can add to that our piece on the lack of black partners in the Big 4, the small matter of a date for the separation of audit from consultancy, and the Wirecard fiasco. You can see why it’s so hard to keep up! It’s not all bad news, either. Check out the ‘One Million Futures’ initiative from Deloitte (page 11), and the unsung but vital work CIPFA is doing in Somalia (page 33). We have also got into videos. This month the PQ magazine 2020 Tutor of the Year, Sean Purcell, has created a ‘Back to Basics’ video on the strategic planning process. Check it out at https://viemeo.com?437139421. There are more in the pipeline so watch this space, as they say. Don’t forget our freebies, too. We are giving away a Huawei Band 2 Pro, some dot-to-dot books for your mental wellbeing (both on page 38), and we have copies of Bernard Marr’s book on tech trends up for grabs (page 12). Happy reading. Graham Hambly is Editor and Publisher of PQ magazine and NQ magazine
A greener future for accountancy The first-ever Green Finance Education Charter has been launched by the UK government, the Green Finance Institute and 12 leading professional bodies including ACCA, ICAEW and ICAS. The charter is a significant commitment to integrate green finance and sustainability into core syllabuses, new qualifications and CPD for members. Green Finance Institute CEO, Dr Rhian-Mari Thomas (pictured), explained: “Green is one of the most exciting, creative and fastgrowing areas of finance and the skills required to drive the agenda will be increasingly sought after as the global economy shifts to netzero carbon.”
The charter says accountancy bodies must commit (by the end of the year) to: • Engage members on issues related to climate change and environmental issues, with the aim of raising their profile within each profession.
ACCA remote exam success Some 200 ACCA students are now taking remotely invigilated exams each day, according to the latest stats (see the full story, page 19). And the feedback so far is very good. A quick survey found 89% of sitters say that when it comes to using the ACCA exam delivery
software their experience was good or very good. Satisfaction with the overall remote exam experience was also high, at 87%. Students are also loving the convenience of it all. As one PQ told ACCA: “It’s hard taking a day off work and travel to the test
• Curate, develop and promote relevant resources to members on green and sustainable finance. • Encourage the adoption of relevant global and national standards, frameworks and guidance, including the Principles for Responsible Investment, and the Taskforce on Climate-Related Financial Disclosures (TCFD). Helen Brand, ACCA CEO, stressed: “ACCA commits to continuing to ensure green finance is an integral part of our world-class qualification and members’ CPD. “After all, it’s through professional education that accountant and their membership bodies like ACCA can support the transition to a low-carbon world.” Meanwhile, ICAEW CEO Michael Izza said this should be a decade of transition for business, and accountants should encourage companies to build sustainability into their business models and help fight climate change. centre, but much easier doing it from the comfort of one’s home, resulting in a truer reflection of what a student can do because their stress levels are lower.” One big tip to come out of the early sittings is for exam sitters to use their own personal computers. Those using their work laptop can occasionally have issues with security or firewalls.
Introducing ICAEW Student Insights ICAEW has updated the way interviews and guides it communicates with giving fresh insights, students. Its PQs will now innovative ideas and be able to access practical an inside look at the and topical content on lives and careers of ICAEW’s dedicated online students and Student Insights hub, their members. ICAEW social channels or via a said: “No matter Mai Thi Hong Nhung dedicated monthly email. what stage you are at Students can find the new-look in your journey with ICAEW, you will features each month, as well as find content to suit you.”
Check out the latest articles, including how Mai Thi Hong Nhung, the first Vietnamese person to complete ACA stood out, or how to put the ‘I’ in team. Go to www.icaew.com/studentinsights. ICAEW is also looking for feedback on this new content, as well as ideas for topics you would like to see covered. Contact them at acamarketing@icaew.com
In brief Grant Thornton fined £1.95m The FRC has fined Grant Thornton £1.95 million for “firmwide failures to ensure compliance with ethical standards and requirements between 2014 and 2017”. It was also fined because of its loss of independence in relation to the audit of Conviviality Retail plc, for the year ending 20 April 2014. The firm has agreed to a severe reprimand and a package of measures directed at improving the quality of future audits. Grant Thornton staff can now expect 4
increased training on ethical issues. The firm must also pay £207,000 in costs. Standing up to the giants A new pro-competition regulatory regime needs to be set up to counter Google’s and Facebook’s market power, says the Competition and Markets Authority (CMA). A year-long study found 80% of all UK expenditure on digital advertising goes to the two tech giants. CMA is concerned the lack of competition could mean
higher prices for goods and services bought online, and will stiffle innovation. Read more on this on page 17. FRC updates standard The FRC has issued a revision of its standard for the identification and assessment of risks of material misstatement in an audit of financial statements. The revised ‘IAS (UK) 315 (Revised – 2020)’ is designed to drive the collection of sufficient appropriate audit evidence to provide a basis for the
audit opinion. Check it out at: https://tinyurl.com/y7lotha4 Cass to change name London’s Cass Business School is changing its name. Cass is part of City, University of London. For now the business school will simply be referred to as City Business School (CBS), pending further consultations. Sir John Cass was a 17th century merchant and philanthropist, and a major figure in the early development of the slave trade. PQ Magazine August 2020
news PQ
Use Excel to plan exams
First arrest for alleged CJRS fraud A West Midland man has been arrested during an HMRC probe into a suspected £500,000 Coronavirus Job Retention Scheme (CJRS) fraud. HMRC officers detained the 57 year old in Solihull, the first arrest in connection to alleged fraud relating to CJRS. Computers and other digital devices were seized, and funds held in bank account relating to his business have been frozen. The man is also suspected of multi-million-pound tax fraud and alleged money laundering offences. A further eight men from the region were arrested as part of a linked investigation that involved 100 HMRC officers.
Too many priorities, limited time and even a lack of self-discipline can scupper any well-intentioned study plans. So CIMA has created a great ‘ready-made’ Excel document to help you get the right balance. And you should not feel guilty that it’s not all study, study, study. CIMA stresses that unless you get this balance right you could quickly run out of steam. It says: “Unfortunately, there is this misconception that when you have to study you need to sacrifice other
parts of your life that are important to you, like the time you spend with your family, or socialising or your own health and wellbeing.” It understands that these activities are needed to recharge you. One key is to avoid lumping together all your study time over
weekends or just before the exams. This Excel document will be useful for all part qualified students. To download it go to https://tinyurl.com/ycmrl2hb
Coronavirus: training contracts extended One side-effect of the pandemic for ICAS and ICAEW students is the extension of their training contracts. ICAS PQs have been given a gap or absence of one month without affecting the training contract length (typically three years). In normal circumstances, periods greater than one month lead to the contract being extended. ICAS is extending this gap/ absence period to three months
without the training contract length being extended for students who are put on a furlough scheme. Although the Chancellor extended the furlough scheme on 12 May 2020, ICAS will not be increasing the permitted leave of absence beyond three months. Consequently, any student who continues to be furloughed beyond three months will have their training contract extended.
An ICAEW spokesperson said staff can be furloughed for up to 12 weeks without impacting their training agreement. They are able to undertake tuition and sit exams during this period. ICAEW has also temporarily suspended the ACA assessment requirement that requires all other ACA exams to have been passed or attempted before the case study can be taken.
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PQ Magazine August 2020
5
PQ news
ROBERT BRUCE The devil really is in the detail
Many years ago when I was at the very bottom of the audit ladder we had some really dull things to do. But we also knew that, routine though they were, they were of enormous importance. Stock takes were fun. But you had heard all the stories of the extraordinary ways in which auditors had been duped in the past. So it became a game to think from the point of view of the fraudster. How would you put one over on the auditor? And that was how, by and large, you kept ahead of the dubious practices of the client. The basics were still the basics. And that is why the fundamentals were taken very seriously. And we at the bottom of the audit heap did so. This was early on in your career. You didn’t want your head chewed off by some snarky audit senior. And this is why it seems so extraordinary that, in the case of the Wirecard scandal that still unfolds across the press, no one seems to have properly or effectively checked the cash at bank, particularly when the cash was down on the balance sheet as almost two billion-worth of euros. Independent confirmation was what was impressed upon us in our youth. Perhaps the problem is the international nature of the process now. For all their assertion that the Big 4 firms are international networks, the reality is often fragmentation at a local level. The left hand is not always fully informed of what the right hand has or hasn’t done, or the form of the confirmation. The more distance, the more scope for fraud. Robert Bruce is an award-winning writer on accountancy for The Times
The dress-down trainee A KPMG trainee accountant, Zhihui Lu (pictured), has lost her case for unfair dismissal after accusing her boss of ‘mansplaining’ when she was told in an email that wearing jeans and a jumper was not appropriate attire for the office. Lu asked her manager: “Who was he, as a man, to be telling her what she can and cannot wear?” However, this was just one of a catalogue of incidents that raised concerns about the Durham University graduate’s performance and behaviour. It finally led to the firm firing her after three years. The panel was told she repeatedly referred to one senior member as ‘the bald partner’ despite knowing his name, and told
a female colleague that she had bad skin and ‘looked terrible’ at work. Lu also refused to sit on the same floor as the rest of the insurance team, commandeering a fifth-floor meeting room as her lunch base. She even installed a rice cooker in the room. When she missed out on a
AAT delays remote invigilation plans AAT has decided it will not be possible to introduce Mark Farrar remote invigilation, as planned this August. Instead, it will run a managed pilot through selected training providers, utilising two Level 1 qualifications. AAT explained as a result of testing and ‘further investigation’ it became “This has been a very difficult clear that it would not be possible decision for us to take, and we for it to proceed as planned. It recognise that it will have a simply did not have the confidence negative impact on some of our that it would not be able to meet training providers and students.” levels of compliance and security With assessments centres that it would expect. AAT said it felt reopening on 29 June, Farrar the pilot was the way to go – hoped the impact of this change on enabling it to better understand the AATs’ plans will be “less significant risks. as we return to a situation where AAT CEO Mark Farrar explained: assessments are widely available”.
promotion she told a senior manager she would have done better if she had slept with one of the firm’s male partners. Lu also got into an argument after she was seen helping herself to large amounts of food at a work lunch. She finally went off sick, having been diagnosed with stress and depression. When she returned the following February, her behaviour did not improve, and she was suspended and eventually sacked in the November 2018 for gross misconduct. After her dismissal she claimed that she was discriminated against because of her race and on disability grounds, but a tribunal found against her.
Job of the month PART QUALIFIED FINANCIAL ANALYST A global retailer is looking for an experienced part qualified financial analyst to support the head of FP&A and the finance team. This is a three-month temporary contract – Perm. You need to be a PQ ACCA/CIMA, preferably with FMCG experience with a medium or large company. You will be based in London, and the salary is £130 – £150 per day, plus benefits. The role is a fantastic opportunity for a finance analyst who is keen to be part of a very commercial international retailer, who is also keen to work hard and have the opportunity to go permanent. Application closes on 27 July 2020. For more information go to https://tinyurl.com/ydh8cyef
In brief More Back to Basics PQ magazine has joined forces with award-winning tutor Sean Purcell for our second in the ‘Back to Basics’ video series. He looks at the three steps you need to understand in the strategic planning process – strategic analysis, strategic choice and strategic implementation. It’s all covered in eight minutes and there’s an accompanying piece on page 24 of this issue. Just go to www.pqmagazine.com and scroll down to our video section. And 6
check out Tom Clendon’s video on double entry bookkeeping while you are there. LSBF retains Platinum status LSBF Singapore has had its ACCA Platinum Learning Partner status renewed until 2021. The Platinum ALP is given to institutions who have proved their ability to sustain student pass rates. Yvonne Goh, Head of School of Professional Education (SOPE) at LSBF, said: “Aspiring accountants can rely on us to receive the best
certified training towards their professional qualification.” Exercise, then sleep! A little nap after a brisk bike ride or run is a great way help memory formation. Sleep expert Neil Stanley said there is a lot of evidence linking good (adequate) sleep and physical exercise with better memory. Combining the two provides added benefits, he said. A study of 115 healthy 20somethings found that those who exercised and slept straight after
had the best memory test scores. Those who just napped or just exercised did not do so well. Kaplan’s Scottish tax move Kaplan is planning to offer tax training from its Glasgow centre from this November. The first ATT and CTA courses will run to the May 2021 sitting, with further courses planned in the second half of 2021. The Kaplan Glasgow centre is located in the city centre on George Street. To find out more call 0161 259 7400. PQ Magazine August 2020
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PREM SIKKA The UK and Germany: the tail of two bailouts All over the world, governments are bailing out companies hit by Covid-19. The UK seems to have made the wrong choice. Its method of providing financial support to large businesses is through loans and that will hurt businesses. In addition to a business rates holiday and a wage subsidy for its furloughed employees, British Airways has received a £300m loan from the government. The company is at loggerheads with unions over plans to make 12,000 staff redundant and rehire another 30,000 on inferior terms. Many face a 40% wage cut. All loans carry interest and will need to be repaid. That would make a big hole in the finances of already distressed firms. The leakage of cash would affect new investment levels. In contrast, Germany has provided €9bn to Lufthansa by acquiring 20% of its shares. The government has also secured two seats on the company’s Supervisory Board, which effectively makes decisions about investment, dividends, redundancies and other matters. The board presence enables the government to steer Lufthansa. Unlike interest payments, dividends to equity holders can be deferred. In due course, the government can sell its shareholding. This method of bailout does not deplete corporate cash flows. Following the bailout, Lufthansa and unions have agreed to make €500m of savings through a wage freeze, voluntary redundancies and unpaid leave – 22,000 redundancies may be deferred. UK government reluctance to acquire equity stakes in companies is damaging to the economy. Prem Sikka is Professor of Accounting at the University of Sheffield
ICAEW offers centre and home sitting alternatives To keep exam options as flexible as possible ICAEW is planning to offer Professional and Advanced students a short-term option to sit their exams remotely. However, it is recommending students try to book in exam centres in the first instance, as “this is a tried and tested method of delivery”. Remote invigilation is being offered to PQs who cannot access exam centres or who do not wish to travel to an exam centre. ICAEW stressed that it is
Mark Protherough confident there are enough exam centre places to accommodate all students.
STUDENTS FRUSTRATED BY THE TECH As PQ magazine went to press ICAEW PQs seem to be struggling to book the September exams: “Been trying since midnight and keep getting error message”, said one student on 13 July. Others were quick to confirm the problem: “I’ve been trying all night too, I’m exhausted.” Another frustrated PQ said: “Nope, same error message”. The ICAEW’s answer on webchat was it was crashing because it was busy, and to keep trying!
Students wishing to book a centre exam needed to book their Professional Level place between 13 July and 17 July. Remote invigilation exam bookings open a week later, on 20 July, and close on 24 July. The exams will take place on 7, 8 and 9 September, with results issued on 16 October. The Advanced Level exam centre booking open on 29 June, and close on 3 July. Remote exam bookings will open on 6 July and close on 10 July. The exams will take place on 24, 25 and 26 August. Results will be sent out on 2 October. ICAEW’s Mark Protherough said the tests will be the same for all students, so “whether they are sat in a centre or remotely learners and employers can have confidence that exams will be an accurate representation of all candidates”.
IASB amends IFRS 17 Insurance Contracts The International Accounting Standards Board has issued amendments to IFRS 17 Insurance Contracts, aimed at helping companies implement the standard, and making it easier for them to explain their financial performance. IASB stressed that the fundamental principles introduced in May 2017 remain unaffected. The amendments, which respond to feedback from stakeholders, are designed to: • Reduce costs by simplifying some requirements in the Standard. • Make financial performance easier to explain. • Ease transition by deferring the effective date of the Standard to 2023 and by providing additional relief to reduce the effort required for applying IFRS 17 for the first time. Hans Hoogervorst, Chair of the International Accounting Standards Board, said: “We have listened to feedback and made changes to IFRS 17 that will
help companies with the implementation of this muchneeded Standard.” • Read the full story at www.pqmagazine.com
Taxwatch Tax gap at lowest-ever level The UK tax gap estimate for 2018/19 was 4.7%, according to latest stats from HM Revenue & Customs. That means HMRC believes that 95% of the tax due was paid in that tax year. In 202819 it collected £628 billion in tax revenue. Any impact of Covid-19 on the tax gap is likely to be first seen in the tax year 2020-21. BDO’s Dawn Register said she expected HMRC to use this data to focus its resources and efforts on raising cash for the Treasury. She 8
explained: “It is notable that the current data shows small businesses are responsible for over 43% of the tax gap (£13.4bn), compared with £2.4bn from individuals and £1.7bn from the wealthy.” Small business could be a key focus then, moving forward. PapWith charity comes tax bill Company bosses and employees who donated part of their salary to fund the coronavirus relief efforts have been warned that they could face unexpected tax
bills. Staff who donate their pay and those who agree a salary cut to help their employer survive the pandemic may fall foul of antiavoidance rules brought in three years ago. Unless bosses and workers make their charity donations through payroll giving they may still have to pay tax on the salary they have given away. PPE tax cut extended The temporary scrapping of VAT on PPE has been extended until the end of October. The
extension will save care homes and firms dealing with the Covid-19 outbreak an estimated £155 million. The government’s move comes after VAT on PPE was temporarily zero-rated at the beginning of May, and import duty on PPE was removed. EU law on VAT – by which the UK is bound until the end of the transitional period – requires the UK to charge VAT on the equipment. But the UK government has acted under the exceptional basis allowed by EU rules during health emergencies. PQ Magazine August 2020
news PQ
Paper or CBE – your choice ACCA exams are changing, with the global roll-out of the new CBE exams. This means there will be two cohorts – those sitting the traditional paper exam and now the new CBE. Top tutor Sunil Bhandari believes the skills and techniques needed to deal with an ACCA AFM exam question via the CBE software is massively different to the paper approach. With this is mind Bhandari, with the help of colleagues at FME Learn Online, is offering
KPMG has distanced itself from one manager’s racist Facebook rant, according to Trinidad’s Daily Express. Sachin Boodram posted on Facebook that the majority of crime in Trinidad is in predominantly black communities. He said these are the same communities that “always look for handouts from the government”. In another post he shows his support for Donald Trump, questioning why people were still protesting over the killing of George Floyd. This resulted, said the Daily Express, in thousands of people replying to the post, expressing their disappointment and calling for a boycott of KPMG. Boodram issued an apology and removed the posts. In an official response KPMG said: “Like many of you, we are
Offensive rant puts KPMG on back foot deeply disturbed by the comments posted by one of our staff members on social media. We want to assure you that the personal views and opinions of individual staff members are not, nor will they ever be, that of our firm.” KPMG also said that any acts committed by its employees that go against its values or policies are
thoroughly investigated to establish the facts, to ensure that the resultant disciplinary actions are “just and commensurate with the severity of the violation”.
‘Sit case study at assessment centre’ specifically designed courses to match the exam format you are sitting – paper or CBE. Full details of his September and December courses can be found at https://lnkd.in/dNa5tFk
CIMA PQs are being advised that while remote invigilation is great for the OT exams they should perhaps think about sitting their case study exams at an assessment centre. Exams chief Stephen Flatman explained: “The reliable, controlled environment offered by test centres offers students a better exam experience.” With only
four windows each year, he feels the case study exams are just not as easy to reschedule as the on-demand OTs. If you feel comfortable travelling to a test centre and are at ease with the safety and hygiene procedures that are in place, then CIMA is recommending that you take your exam there. • Check out Flatman’s article on this – it’s on page 28.
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PQ Magazine August 2020
9
PQ news
ZOE ROBINSON No time to procrastinate
As a result of the Covid-19 pandemic, the release date for the latest Bond movie, ‘No Time to Die’, was pushed back in an attempt to protect box office revenues. Delay has become a common part of life for all of us over recent months, but how often is this for a justifiable reason as opposed to simple procrastination? The definition of procrastination is interesting: the voluntary delay of an important task that we intend to do, despite knowing that we’ll suffer as a result. But why would you put off something that is good for you? Psychologists believe that part of the answer lies in the instant feeling of pleasure and short-term reduction in stress you get as a result of putting off the task. Imagine you had an exam booked for July but had fallen behind in your studies; chances are you have been worrying. Then you decide to delay the exam by a month. How good would that feel? However, research into the longer-term impact of students who procrastinate shows that they suffer higher levels of stress, submit poor quality work and receive lower marks. Effectively trading off stress in the short term for a lot more in the future. So how can you avoid falling into this trap? Firstly, recognise that you’re procrastinating and figure out why – this will help you formulate a plan. Next, break larger tasks down into smaller ones to make them easier to achieve. Finally, set deadlines for each task and give yourself rewards when you meet them. Zoe Robinson is Learning and Programmes Director at Kaplan Financial
Audit separation on way The UK’s Big 4 have been told they must ring-fence their audit firms from the rest of the business by 2024. The Financial Reporting Council (FRC) has set out a timetable and the Big 4 have to submit their separation plans by 23 October this year. The accountancy watchdog believes the changes, which follow reviews from Kingman, CMA and Brydon, will lead to better audits that are “actually in the public interest”. The FRC says that separating audit departments from the rest of the accountancy firm’s operations
Crackdown on essay mills Essay mill companies are seeking to exploit students who are feeling vulnerable or anxious, particularly during the Covid-19, warns the Quality Assurance Agency for Higher Education. In its latest guidance the QAA said the use of essay mills affects every higher education institution in the UK. And, while assessment design has a significant role in deterrence and detection, no assessment can design out contract cheating.
It also says that professional bodies “that have an interest in integrity of seeking professional qualifications”, should also be
implement is the production of separate P&L accounts for the audit firm. These firms should also have a separate board to ensure “independent oversight of the audit practice”. • Read our full story on page 16. using the guide. Raising awareness with students of the consequences of cheating is key. One Australian University’s Student Association has taken a novel approach by creating a ‘contract cheating awareness week’. Deakin University also ran a wheel-based Contract Cheating Game! Many universities have created, like the University of Northampton, a Lead on Contract Cheating. The main function of this role is to investigate and coordinate investigations into allegations of cheating.
AAT continues face-to-face event ban AAT has said it is extending its ban on all face-to-face events to 30 September. In addition, AAT’s UK and Botswana Achievement Ceremonies, due to take place this September, have been cancelled. Those eligible to attend these events will be invited to the 2021 ceremony. AAT CEO Mark Farrar said: “The ongoing impact of Covid-19 has touched every aspect of AAT, including our events programme. We regret to announce these changes, however the health, safety and wellbeing of AAT staff and members will always be our priority.”
Big Brother watching PwC has been criticised for developing a facial recognition tool to monitor staff working from home. There is concern that the tool invades employees’ right to privacy. PwC is reportedly in talks with other financial companies about using the technology, which can monitor how many breaks staff take. The software, which uses computer webcams, also ensures staff are adhering to company rules, and are not involved in anything such as insider trading. The story, which broke in Financial News, revealed that staff would be required to provide a written explanation for screen absences from a few seconds to 10 minutes or more. 10
will help protect auditors “from influence from the rest of the firm that could divert their focus away from audit quality.” FRC’s CEO Jon Thompson said: “Operational separation of audit practices is one element of the FRC’s strategy to improve the quality and effectiveness of corporate reporting and audit in the UK.” Among the 22 principles for operational separation that accountancy firms need to
EY expects Wirecard backlash EY has told its partners they must prepare for difficult conversations with clients about its audit of Wirecard. In a high-profile controversy, the German payments company filed for insolvency after admitting £1.7bn in cash ‘never existed’. An internal note to senior partners on Friday 26 June advised them to inform clients that the objective of the fraud at Wirecard was to deceive investors and EY. The Big 4 firm has been Wirecard’s auditors for more than 10 years, and its accounting practices have raised eyebrows among financial journalists and a small number of investors. That said, an EY memo claims that the Big 4 firm did finally spot something was wrong.
Three more FRC investigations In a Financial Reporting Council first, the watchdog has announced three investigations into the audit of London Capital & Finance plc, for the one month period ended 30 April 2015 (carried out by Oliver Clive & Co), the year ended 30 April 2016 (carried out by PwC), and the year ended 30 April 2017 (carried out by EY). The investigations will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure. The collapsed minibond business is at the centre of a massive scandal, where more than 11,600 savers bought high-risk, unregulated minibonds, and look set to lose 75% of the £240 million they invested. The company fell into administration in January last year. PQ Magazine August 2020
news PQ
One million
FUTURES ‘The Princes Trust and Deloitte gave me helped me find a community in which I felt safe and made friends’
In 2016, Deloitte put purpose at the heart of a responsible business initiative to help one million people to get where they want to be through access to education and employment. That ‘One Million Futures’ programme has now exceeded its one million target – one year ahead of schedule. Deloitte UK’s CEO, Richard Houston, explained: “I am utterly delighted that we have reached this incredible milestone and made an impact that matters for one million people in the UK. This was always an ambitious five-year target – yet we have achieved it in just four years.” He revealed that more than three-quarters of the firm’s people (15,510) have volunteered a combined 115,000 hours. In addition, the firm carried out 36,500 pro bono business hours, and the total contribution by the firm equates to over £21 million directly benefiting charities, social enterprises and schools across the UK. Deloitte has recognised Moses as the millionth person helped by the programme. It met Moses via its charity partner, The Prince’s Trust. Moses was raised in Zimbabwe and at 16 came to the UK in search of a better life and to follow his dream of playing professional football. He soon found himself in a country he didn’t know at all, homeless and hungry. He then met PQ Magazine August 2020
Deloitte via the trust and things started to change, as the partnership helped Moses to find his voice and give him confidence to follow his dreams. Moses said: “Growing up in Zimbabwe I always had hope, but life was really tough for my family with no water, resources and opportunity. “Despite leaving everything I knew behind it was hope that brought me to the UK. My dream was sadly not the reality as I was soon homeless and hopeless.” He added: “The Princes Trust and Deloitte gave me someone to talk to, someone to listen. I signed up for youth group activities and met other young people like me. They helped me find a community in which I felt safe and made friends. My confidence has been restored.” Today, Moses is settled in London, has a job and is involved in his community. He coaches youth football and is starting to live the life he had hoped for all those years ago in Zimbabwe. It doesn’t stop there, either. Deloitte UK has unveiled ‘Five Million Futures’ – part of Deloitte Global’s ambition to support 50 million people by 2030. The UK will join colleagues across Europe and the Middle East to deliver an even greater impact in its communities. Watch Moses’ story at https://www.youtube.com/watch?v= PouJYnMXG08&feature=youtu.be 11
PQ tech news
MIKE DAY Contributing to high performing teams online
It's going to be very interesting to see what the new norms might be. Surely this period will see a number of things pivot, one of them being working online as a team. I certainly know already that I won't be jumping in a car or train anything like the way I used to. So how do we contribute to a truly high performance team online? A company like Xero researches and thinks about this a lot. And you could do a lot worse than to read ‘The five dysfunctions of a team’ by Patrick Lencioni; our MD has bought us all a copy and many of the issues are amplified when working online. For me it’s about making sure we recognise it’s ok to not be ok and – easier said than done – but being even more open and honest with communications within the team. Harvard published some research in March that I am trying to adopt including recognising what a lack of face-to-face brings – including calling out when written comms isn’t serving the conversation; always having your camera on; maintaining clear eye contact; and verbally nodding to acknowledge. Managers are always in danger of being seen as ‘out of touch’, so it’s even more important to listen, ask more and try not to jump to solutions. You employed smart people to do that so let them. Mike Day, Director, UK Education Sector, Xero
UK moves into satellites The UK government has spent £400 million on a stake in cuttingedge satellite firm OneWeb. It is part of a plan to replace the loss of the EU’s Galileo sat-nav system, and help deliver ‘the first UK sovereign space capacity’. OneWeb went bankrupt in March while trying to build a spaceship network to deliver broadband. However, the UK has joined up with a consortium, which includes India’s Bharti Global, to win a bidding war for the company. Bharti will provide the company’s commercial and operational leadership, and bring OneWeb a revenue base to contribute towards its future success. The move signals the government’s ambition for the UK to be a pioneer in the research, development, manufacturing and exploitation of novel satellite technologies through the ownership of a fleet of Low Earth orbit satellites.
The deal is subject to US court approval and regulatory clearances and is expected to close before the end of the year. It follows the formation of the UK’s first-ever National Space Council, chaired by the Chancellor of the Exchequer, to consider how space policy can enhance the country’s prosperity and place in the world, as well as our wider national security interests. Business Secretary Alok Sharma said: “This deal underlines the scale of Britain’s ambitions on the
global stage.” He said the UK’s access to a global fleet of satellites has the potential to connect millions of people worldwide to broadband, many for the first time, and the deal presents the opportunity to further develop our strong advanced manufacturing base right here in the UK. The UK government will also have a final say over any future sale of the company, and over future access to OneWeb technology by other countries on national security grounds.
Apple faces two EU competition probes Apple is facing not one but two European Commission investigations into whether it broke competition laws. One investigation will centre on Apple Pay, where other services
cannot use the iPhone tapand-go facility. The other investigation will look at iPad and iPhones being limited to installing apps from only Apple’s App Store.
Australia under attack The Australian government is committing more than £800 million over the next 10 years into cyber security investment. The new Cyber Enhanced Situational Awareness & Response
(CESAR) package is the largest ever investment. The move follows news that a foreign state (believed to be China) was behind a cyberattack that hit Australia’s government, industry
Apple expressed disappointment and claims the EU probes were “advancing baseless complaints”. Music streaming service, Spotify, has raised a complaint about Apple’s App sales. Apple typically charges apps a 30% cut of any sales in the first year. This goes down to 15% for the second. and critical infrastructure. Victims included political parties, government and health agencies, and power utilities. Prime Minster Scott Morrison said: “We know it is a sophisticated state-based cyber-actor because of the scale and nature of the targeting and trade craft used.”
Tech briefs Tech book giveaway We have three copies of Bernard Marr’s book ‘Tech Trends in Practice’ to give away this month. Marr looks at the 25 technologies that are driving the fourth industrial revolution, which will help transform business. He looks at AI, the Internet of Things and rise of smart devices, blockchain technology – and even genomics 12
and gene editing. To be in with a chance of winning one of these great books just email giveaways@pqmagazine.com. Head up your email ‘Tech trends’, and remember we need a name and address! Check out what Marr has to say on page 32, and read our review of his book on page 38. And there’s more giveaways on page 39.
million Brits have bought digital assets such as bitcoin, says the UK’s City regulator. The Financial Conduct Authority has found that the number of consumers thought to have owned cryptoassets has risen by 1.1 million. The watchdog is looking at a ban on the sale to retail investors of derivatives, such as contracts-for-difference, that allow bets on crypto prices.
Millions want cryptoassets Got money in cryptoassets? Well, you are not alone, as 2.6
Twitter data breach Twitter has emailed its business clients to inform them
that their personal information may have been compromised. Billing information of some clients was stored in the browser’s cache, and Twitter explained it was possible third parties could have accessed this personal information. This includes addresses, phone numbers and even the last four digits of credit card numbers. Twitter is still investigating how many businesses have been affected. The problem became apparent on 20 May, and Twitter says it has now been fixed. PQ Magazine August 2020
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PQ email graham@pqaccountant.com
HAVE YOUR SAY Just lip service? The events in America following the terrible death of George Floyd have really affected me. I was surprised by the total lack of response from the accountancy profession, and then I read your #BlackLivesMatter feature in the last issue. Why did you put it on page 11, when it should have been more prominent? I know PQs’ wellbeing is important (front cover) and ACCA fast track at Dundee University is interesting (page 4), but the recent events could be a seminal moment where real change happens. As ICAEW CEO Michael Izza says, racism and prejudice have no place in our profession and
“we all have a role to play in stamping it out”. He goes on to say that progress has been made but not enough! Well, I can vouch for that. The real problem is a lack
of role models when I was qualifying. Has the ICAEW (my body) ever had a black president? I can’t remember one – can you? The Windrush scandal shows that closing the Commission for Racial Equality in 2007 was premature. It was replaced with the Equality and Human Rights Commission, which now looks into everything from Islamophobia in the Conservative Party to care for older people in the pandemic. I think the profession should set up a joint commission to plan for a better future for all. The CCAB should take the lead here. It would be great to see my profession lead the way on this issue for once. Name and email address supplied
social media ROUND-UP The demise of Wirecard was big on social media this month. It was on our website on 18 June, as shares crashed over the missing £1.7bn. EY, the auditors for 10 years, refused to sign off on accounts, as it could not confirm the money existed. However, despite EY blowing the whistle, as the story progressed it was accused of failing to act over earlier worries. Then came the news that more than 1,000 Wirecard investors have also joined a class action seeking up to £910 million from EY. Some commentators started to speculate that Wirecard could become EY’s Enron.
Our star letter writer wins a fantastic ‘I lovePQ’ mug! Football in back As a lifelong Derby County fan I was shocked to see two-and-a-half pages dedicated to the mighty Rams in the July issue. Unfortunately, our moment in the spotlight was not for the right reasons. I hope when you read this email we will have made it into the play-offs and given ourselves the chance to play in the richest football game in the world – the Championship playoff final. Like Kieran Maguire, who seems to be the man to go to on the TV, I just can’t understand why all football clubs are not made to publish full accounts. Surely it is against UK company law not to. On a lighter note, I loved the football quiz, although I must say it was quite tough. So Sheffield Wednesday are owned by a taxi company that owns no taxis! Terry Newman, Derby County fan
Sorted, thanks to pqjobs.co.uk
AAT’s backward step I must say it is really hard to read all the stories about the successful introduction of remotely invigilated exams now that the AAT has said it can’t do them. You wrote online that the AAT has delayed its plans, but it seems to me that the association has decided they will be too
complicated to introduce, especially now the assessment centres have reopened. All we are getting is some pilots at level 1. By the time these are done and remotely invigilated exams become a reality I will be on Level 3.
I have never enjoyed the stress and time wasted going to a strange, unfamiliar test centre, and loved the idea of creating my own safe space to sit the exam at home. Maybe it is something I can do when I go on to sit ACCA exams! Name and address supplied
Social media quickly points out where the problems are, too. On 13 July ICAEW PQs seem to be struggling to book the September professional exams: “Been trying since midnight and keep getting error message”. Others were quick to confirm the problem: “I’ve been trying all night too, I’m exhausted.” The ICAEW’s answer on webchat said it was crashing because it was busy, and to keep trying! Perhaps they should have told you to turn off your machine and turn it on again… Our Back to Basics first video has also been a big hit. Tom Clendon (double entry bookkeeping) has been joined by Sean Purcell, who talks students through the strategic planning process. In the coming months we hope to prove accountancy can be simple if you know the basics. PQ is gathering together the best tutors in the world to help you! We are making PQ magazine much more interactive, and you can read Sean’s accompanying feature in this month’s issue. It’s on page 24.
PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: graham@pqmagazine.com Website: www.pqmagazine.com | Editor/publisher: Graham Hambly graham@pqmagazine.com | Associate editor: Adam Riches | Art editor: Tim Parker | Contributors: Robert Bruce, Prem Sikka, Zoe Robinson, Mike Day, Tony Kelly, Phil Gammon, Edward Netherton | Subscriptions: subscriptions@pqmagazine.com | Origination services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email admin@pqmagazine.com
Published by PQ Publishing Ltd © PQ Publishing 2020
PQ the audit market
Time for a degree of separation! PQ magazine explains how the biggest shake-up in the audit market in a generation will unfold
T
he date is set: 23 October 2020. That’s the day the UK’s Big 4 accountancy firms must submit their plans for the separation of their audit firms from the rest of the business. After that the Financial Reporting Council (FRC) will agree a transition timetable, including a medium-term plan with a firm, and everything should have happened by 30 June 2024. That means the Big 4 firms have four years to enact the biggest shake-up of audit for a generation. The FRC unveiled its ‘Principles for Operational Separation’ in early July, with its desired outcomes, which include: • Audit practice governance prioritises audit quality and protects auditors from influences from the rest of the firm that could divert their focus away from audit quality. • The total amount of profits distributed to the partners in the audit practice does not persistently exceed the contribution to profits of the audit practice. • The culture of the audit practice prioritises high-quality audit by encouraging ethical behaviour, openness, teamwork, challenge and professional scepticism/judgement.
• Auditors act in the public interest and work for the benefit of shareholders of audited entities and wider society. The FRC intends to publish annually an assessment of whether firms are delivering these objectives and outcomes. It will also seek backstop powers to require firms to deliver these outcomes as part of the forthcoming audit reform legislation. CEO Jon Thompson said: “Operational separation of audit practices is one element of the FRC’s strategy to improve the quality and effectiveness of corporate reporting and audit in the UK, following the Kingman, CMA and Brydon reviews.”
He felt the FRC has now delivered a major step in the reform of the audit sector by setting principles for operational separation of audit practices from the rest of the firm. Thompson stressed: “The FRC remains fully committed to the broad suite of reform measures on corporate reporting and audit reform, and will introduce further aspects of the reform package over time.” PwC said it took proactive steps a year ago to create a distinct audit practice as part of its Programme to Enhance Audit Quality, which means it is already aligned with many of the principles. Deloitte’s Stephen Griggs welcomed the clarity from the FRC and said “Deloitte has been consistent in our support for reform.” He went on: “Today’s announcement… must be considered alongside a wider package of reform, including in vital areas such as corporate reporting, the role of directors, and the regulatory environment in which we operate.” EY’s Hywel Ball felt the right reforms, properly implemented have the potential to restore trust and reinforce the UK’s status as one of the most attractive markets worldwide. He agreed with Griggs that improved director accountability and changes to the scope of audit is required to deliver effective and sustainable change. Check out the FRC’s ‘Principles for Operational Separation’ at: https://www.frc. org.uk/getattachment/281a7d7e-74fe-43f7854a-e52158bc6ae2/Operational-separationprinciples-published-July-2020.pdf
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global trust Get the business qualification for a fast-changing world. Register now at accaglobal.com/pq
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PQ Magazine August 2020
digital competition PQ
Taking on the tech giants PQ editor Graham Hambly looks at how the Competition and Markets Authority plans to take on the market power of Google and Facebook
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he UK government needs to introduce a new pro-competition regulatory regime to tackle Google and Facebook’s market power, according to the Competition and Markets Authority (CMA). It says existing laws are not suitable for effective regulation. It is therefore calling for a new regime to govern the behaviour of major platforms funded by digital advertising. The CMA’s concerns A year-long study found that UK expenditure on digital advertising was around £14 billion in 2019, equivalent to £500 per household. About 80% of this is earned by just two companies – Google and Facebook. Google enjoys a more than 90% share of the £7.3 billion search advertising market in the UK, while Facebook has a share of over 50% of the £5.5 billion display advertising market. Google’s revenue per search has more than doubled since 2011, while Facebook’s average revenue per user has increased from less than £5 in 2011 to over £50 in 2019. CMA stressed that the services provided by Facebook and Google are highly valued by consumers and help many small businesses to reach new customers. Both grew by offering better services than the main competition, and now CMA is concerned that they have developed such unassailable market positions that rivals can no longer compete on equal terms. Their large user base is a source of market power – it means Facebook is a ‘must-have’ network for users to remain in contact with each other, and enables Google to train its search
PQ Magazine August 2020
algorithms in ways that other search engines can’t. Each has unmatched access to user data, allowing them to target advertisements to individual consumers and tailor the services they provide. Both also use default settings to nudge people into using their services and giving up their data – for example Google paid around £1.2 billion in 2019 to be the default search provider on mobile devices and browsers in the UK, while Facebook requires people to accept personalised advertising as a condition for using their service. Their presence across many different markets, partially acquired through many acquisitions over the years, also makes it harder for rivals to compete. Together all these factors work to reinforce each other and are extremely difficult for likely competitor to overcome, says the CMA. It feels that weak competition in search and social media leads to reduced choice and perhaps more importantly a lack of innovation. At the same time consumers are being asked to give up more of their personal data, and appear to have little choice in the matter. Google and Facebook’s market positions also have a profound impact on newspapers and other publishers. The CMA has found that newspapers are reliant on Google and Facebook for almost 40% of all visits to their sites. This dependency squeezes their share of the digital advertising revenues, undermining their ability to produce valuable content. Time for a new regime The CMA wants to see the creation of a new
pro-competition regulatory regime, so that users can continue to benefit from innovative new services. It is proposing that within the new regime a ‘Digital Market Unit’ should have the ability to enforce a code of conduct to ensure platforms with a position of market power do not exploit their positions and engage in exclusionary practices. If necessary, fines will need to be imposed. Google should also be made to open its click and query data to rival search engines to allow them to improve their algorithms, so they can compete properly. This, says CMA, would be designed in a way that does not involve the transfer of personal data to avoid privacy issues. Restricts on Google’s ability to secure its place as the default search engine on mobile devices and browsers will need to be looked at too. Facebook would also need to give consumers a choice over whether to receive personalised advertising and could be ordered to increase its interoperability with competing social media platforms. Finally, it is suggested that the new regime could order the separation of platforms where necessary to ensure healthy competition. CMA CEO Andrea Coscelli said that if the market power of Facebook and Google goes unchecked people and businesses will lose out. She explained: “People will carry on handing over more of their personal data than necessary, a lack of competition could mean higher prices for goods and services bought online and we could all miss out on the benefits of the next innovative digital platform.”
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PQ exam tips
Book your success Reading around the subject will improve your chances of passing that exam. Top tutor Tom Clendon gives you 10 top tips to help you get the most of reading technical articles
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eading articles is an important part of studying for any professional accountancy exam. You can find relevant articles published in PQ magazine and on the website of your professional body. Reading these curated technical articles can only broaden and deepen your understanding of the topic. That is why I have curated the most relevant articles for my SBR students and included at least one article to read in every section of my online course. Long technical articles can seem hard to read. But it is worth persevering. Here are my top ten tips to effective reading and comprehending those longer articles. Top tips to effective reading 1. Don’t read it on your screen. Print off a copy to read. It’s a bit old school but trust me it works. You will be less distracted. 2. Switch off your mobile phone. Of course. 3. Find a quiet place to read.
4. Be an active reader and use a highlighter to emphasise key principles that the article is explaining. 5. Be prepared to read the article more than once. You are reading to learn. You don’t always understand things first time around. 6. I read key passages out aloud. Listening to my own voice seems to be another way of lodging the information in my brain. I wonder if that is just me though. No harm in you giving it a try is there? 7. Prepare your own handwritten summary notes of the key points the article makes. Manually writing it down is another way of lodging the information in your memory. 8. Share the article with a friend who is studying for the same exam. Its great having a study buddy. 9. Take the opportunity the next day to discuss the main points that you have taken away from the article with your friend. Listen to what they have to say too. By taking turns in explaining those key principles in your own words to demonstrate understanding you will both win! 10. A week later, refresh yourself by coming back to your notes and then skim read the article again. It’s an old friend now. If you only read an article once you will forget it. There is merit in repetition to reinforce learning. • Tom Clendon is the online SBR lecturer for FMElearnonline. See www.tomclendon.co.uk
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career flexibility Get the business qualification that takes you where you want to go. Register now at accaglobal.com/pq
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PQ Magazine August 2020
ACCA exams PQ Feedback so far
Remote – but hyper-connected ACCA launches remote invigilation exams. The association’s Judith Bennett explains how it will all work
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ovid-19 has meant many of us have had to rethink and change our plans. It’s been an immensely unsettling time and I know many PQ readers have struggled over the past few months. But, as we experience the first tentative steps of lockdown easing, I truly hope all PQ readers are well and safe. As our recent ‘Covid-19 Global Survey: The Road to Recovery’ shows, the pandemic has derailed economies, and it has also impacted education and training. Covid-19 disrupted many organisations’ exam sittings, from university finals to A levels and GCSEs. As many PQ readers know, professional qualifications were also impacted, and for us it meant we had to cancel exams in many physical centres due to health and safety guidance from governments around the world. Working at pace Given the pandemic, we knew we had to act quickly to respond to the crisis, and were able to move swiftly to introduce remote invigilation for our On Demand exams. In truth, we’d started looking at this back in 2019 but we didn’t think we would be implementing it quite so quickly. This development means that students PQ Magazine August 2020
can sit remotely invigilated exams for the On Demand suite – that’s all Foundation and Applied Knowledge exams. And we’re also looking at solutions for the Applied Skills and Strategic Professional exams. It’s really important to us in ACCA to ensure we get it right, so that students will be able to take their exams at home or in another location in circumstances where centre-based exam sittings are disrupted. We began our remote invigilation of these On Demand exams on the 11 June. We limited the number of students in that first week to ensure everything would run smoothly. Our initial soft launch approach was to work with our strategic partners including Kaplan. We’re really pleased to say that the first set of Kaplan students passed their CBEs first time. Many congratulations to them! Following the soft launch, we opened exam entry on the 18 June to eligible students who could book exams from 25 June and since then we have seen the booking numbers growing daily. We believe that this is already making a huge difference to students where centre-based exam sittings have been cancelled. It means they can continue their ACCA journey at a time when some exam centres are still unable to open due to Covid-19.
At the time of writing more than 1,000 exams have been scheduled, mostly in June and July, although students can book several months in advance. The number of students taking exams is growing daily – we are nearing 200, and this will increase. We asked all students taking their remotely invigilated exams to complete a post-exam survey and so far we’ve had 114 students sharing their feedback which shows that: • 93% say the ease of booking and paying for remote exams is very good/good. • 89% say it is good/very good when it comes to the ease of using ACCA Exam Delivery software. • 84% say the conduct of the remote invigilator is good/very good. • 82% say their overall remote exam experience on the day was good/very good. • 84% say they are satisfied/very satisfied with the experience of being remotely invigilated, and 87% say they are satisfied/very satisfied with the experience of sitting their remote exam. This is great feedback, and we also conducted ‘vox pops’ with students, asking their views about this new development. One said: “They are a very convenient way to take exams. It’s hard taking a day off work and travel to a test centre, but much easier doing it from the comfort of one’s home, resulting in a truer reflection of what a student can do because their stress levels are lower.” And another added: “The overall experience of taking exams remotely is very pleasant and greatly exceeded my expectations.” Kaplan also gave us feedback, with Jim Hinchcliffe, commercial manager at Kaplan Financial, adding: “Our students have been delighted to be able to take their exams remotely, giving them the opportunity to progress while centres are closed. And it’s great to see the first group all pass, congratulations to them, preparing so well for their exams. They are a great inspiration for other students to follow!” It’s wonderful to read this initial feedback, and we’ll be regularly gathering views as these responses help us to grow together. The technicalities It’s important that students meet the technical requirements for sitting a remote exam, which includes having a laptop or computer with a camera, and anyone interested should run the diagnostic test to ensure they meet the minimum technical specifications. We’re also advising students that if they’re using a work laptop they can occasionally have issues with security or firewalls, so we encourage them to use their personal laptops if possible, or speak to their IT department for support. We’ve been really impressed with students’ resilience since the pandemic broke, and to see so many of you working hard to stay on track. It’s truly impressive, and we wish you well with your future studies and careers in a profession that has an added purpose at this time – to help build back better and recover with confidence. • Judith Bennett, director professional qualifications, ACCA 19
PQ ACCA APM exam
What’s the APM examiner thinking? Geoff Cordwell explains what the advanced performance management examiners wants from exam sitters
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ave you ever wondered how an examiner thinks? What is their overall attitude to the setting and indeed the marking of their paper? Examiners no doubt vary and bring their own flavour to a paper, emphasising what they see as important and taking ‘angles’ that interest them or that will help develop and protect the profession. On becoming the ACCA performance management examiner in 2007 (F5 in old money) I had a view or attitude to the paper, and this influenced the type of questions I created. The current advanced performance management examiner is probably no different, but what is that attitude? Here is my take on that vital question… Advanced performance management (APM) concerns the various performance management systems that can exist in organisations. So, you will study budgetary systems, reward systems, target setting systems and so on. These performance management systems will all be set in a context, a business environment and, mainly, they will not fit! There will be a discord. The underlying attitude is that in industry there are too many organisations where the performance management system is out of line with the business and its environment and it isn’t hard to understand why. • There is no regulatory force to compel businesses to update their management accounting systems. • Inertia is depressingly common in many businesses and an attitude prevails that the argument that ‘we’ve always done it this way’ is in some way an acceptable one. • Changing a system is tricky to get right with culture, technological fear and communication all issues to overcome. • Accounting staff are very busy working against this month’s deadline such that the changing horizon is often ignored. • Accounting staff may not want to ‘make waves’ introducing new systems, whilst others might not see the point. This may paint too dark a picture and certainly there are many organisations where
the accountants have embraced the concept of becoming a financial business partner and been progressive in suggesting much needed change. What this means for students Certainly, you need to learn about the systems that exist or indeed could exist in an organisation. If you walk into the exam room (or your front room now that the prospect of virtual invigilation is being mooted by the ACCA at least) not knowing your onions (as my Mum would say) then you’re in trouble. You must know what incremental budgeting is, zero based budgeting, the building block model, the balanced scorecard, economic value added, the Z and A score models and so on, BUT this knowledge alone will not be enough to pass APM.
The magic ingredient is being able to assess whether the performance management system in place in an organisation is appropriate for its people and its environment. Consequently, you must study APM through that lens. What is zero based budgeting? You need to know that! But go on to ask yourself when should this be used and when is it not appropriate? What do you think about the model? Have an opinion even! It is simply not possible to do this from afresh on the exam day, you must have gone through that thinking during your preparation. Of course the precise model that you get tested on will vary from exam to exam as will the environment in which the questions will be placed, and so having good reading and analytical skills are important, but if you’ve trodden the path before you are less likely to get lost. By way of example a look at the past exam question Dargeboard Services (DS) (March/ June 2017) shows how the above idea was tested. The scenario explained the business, outlining its mission and existing strategic performance reporting system. The first requirement is typical of this examiner in that it asks whether the existing performance reporting system is appropriate given the mission of the business. Your default setting is that the performance management system will not wholly tie into the mission and that is the case here. For example, the mission states that DS wants to deliver a world class service but none of the performance metrics even touch on that concept. Also, the mission purports to demand maximum efficiency from the business, but aside from a mention of ROCE the performance metrics are again silent. The question did not, in this case, ask for suggestions on improving the performance metrics to better fit the mission, so as long as you can spot weaknesses and critique the existing system you are well placed to score well. Knowing how the examiner thinks is important. You can attempt to do this yourself since the examiners all produce examiner’s reports providing valuable insight, but clearly your tutor should be well aware of the angles taken and so should be able to add significant value on any course you attend virtually or otherwise. • Geoff Cordwell is an ACCA APM Online Tutor with FME online. A new course for December 2020 exam launches in August. Individual topic support is available now at www.geoffcordwell.com
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PQ Magazine August 2020
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PQ the troubleshooter
Time to test yourself Dr Philip E Dunn has set some multiple choice questions on the interpretation of financial statements
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Current Liabilities Trade Payables Tax payable
he following is a summary of the Financial Statements of Hawsker Feeds Ltd for the Year Ended 31 December X20.
Total Liabilities Statement of Profit or Loss £m Revenue 6.80 Cost of Sales 4.00 Gross Profit 2.80 Distribution costs 1.00 Admin expenses 0.91 Profit from operations 0.89 Finance costs 0.08 Profit before tax 0.81 Taxation 0.24 Profit after tax 0.57 Additional information: cost of sales, distribution and admin expenses include: wages, salaries and employee costs £1.27m. Bought in materials and services £4.40m and depreciation £0.24m. Number of Employees 35. Statement of Financial Position Non-Current Assets Current Assets Inventories Receivables Cash and Cash Equivalents
£m 3.95
Total Assets
0.58 1.18 0.04 1.80 5.75
Equity and Liabilities Equity Non-Current Liabilities
3.67 1.00
0.84 0.24 1.08 5.75
Tasks: (1) Calculate the Return on Capital Employed: (a) 12.00% (b) 19.06% (c) 17.05% (d) 24.25% (2) Calculate The Asset Turnover: (a) 1.18 (b) 1.85 (c) 1.46 (d) 1.72 (3) Calculate the Operating Profit as a % of Turnover: (a) 11.91% (b) 41.18% (c) 8.38% (d) 13.09% (4) Calculate the Current Ratio: (a) 1.80:1 (b) 1.15:1 (c) 1.67:1 (d) 1.63:1 (5) Calculate the Acid Test (Quick Ratio): (a) 1.67:1 (b) 1.13:1 (c) 1.53:1 (d) 1.63:1 (6) Calculate The Inventory holding period in days: (a) 35.82 days (b) 31.13 days (c) 52.93 days (d) 75.60 days
(7) Calculate the Trade Receivables’ collection period: (a) 63.34 days (b) 107.68 days (c) 72.88 days (d) 74.90 days (8) Calculate Trade Payables’ payment period: (a) 109.50 days (b) 53.32 days (c) 51.88 days (d) 76.65 days (9) Calculate the Interest Cover: (a) 11.13 (b) 35 (c) 7.13 (d) 10.13 (10) Calculate the Gearing Ratio: (a) 27.24% (b) 21.05% (c) 17.39% (d) 21.41% (11) Calculate the return on Shareholders’ Funds: (a) 13.97% (b) 21.21% (c) 22.07% (d) 15.53% (12) Calculate Value Added per £ of Employee Costs: (a) 4.21 (b) 1.89 (c) 2.70 (d) 0.86 (13) Calculate Value Added per Employee: (a) £80,000 (b) £114,286 (c) £68,571 (d) 25,429
Answers: (1) B (2) C (3) D (4) C (5) B (6) C (7) A (8) D (9) A (10) D (11) D (12) B (13) C 22
PQ Magazine August 2020
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PQ back to basics
Strategic planning Top tutor Sean Purcell explains the three steps to understanding the strategic planning process…
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ne of the main problems students have when studying strategy is understanding how the process of strategy links together. The process can be distilled down into three main areas and they are: 1. Strategic analysis. 2. Strategic choice. 3. Strategic implementation. Strategic analysis Essentially, a business needs to address the following questions: • Where do we want to go? • What constraints exist on our resources? • What are the key threats from the external environment? The answer to the first question is influenced by the stakeholder dynamics of the organisation. Key influencers are often the owners (for example shareholders) who may have a particular expectation for the organisation. Others could include the government, employees and the general underlying culture of the organisation. When it comes to the constraints that exist on our resources, you need to look at finance, plant and machinery, and human resources. However, to make it easy, I would recommend that you simply think 6Ms. 6Ms is simply a mnemonic used to save time when thinking about the various resource constraints. It can be summarised as: • Money. • Machinery. • Manpower. • Markets. • Materials. • Make-up. Now let’s identify the key threats from the external environment. Once we have established constraints on our internal resources we need to assess the threat posed by the external environment. The easiest way to assess the external environment is to use the following two frameworks: • Porter’s five forces. • PESTEL analysis. Porter’s five forces: The American management writer Michael Porter describes the main external competitive threats to be summarised by his five forces model. Essentially, this model determines the level of competition an organisation is facing by assessing the extent to which the five forces are relevant. These are summarised as follows: 1. The threat from new entrants. 2. The bargaining power of buyers. 3. The bargaining power of suppliers. 4. The threat from substitute products. 5. The extent of competitive rivalry. PESTEL factors: The other framework that should be applied when surveying the external environment is PESTEL factors: • Political. 24
• • • • •
Economic. Social. Technological. Environmental. Legal. Therefore, when surveying the external environment think through Porter’s five forces and PESTEL factors and you will have a fully comprehensive framework with which you can assess the case. Strategic choice When making a strategic choice we can break the process into three distinct subheadings, which are:
• On what basis do we decide to compete? • Which direction should we choose? • How are we going to achieve the chosen direction? A useful framework to use when deciding on what basis we decide to compete is Porter’s generic strategies. Michael Porter stated that a firm that is wishing to obtain competitive advantage over its rivals is faced with two choices: Choice 1: Is the company seeking to compete by achieving lower costs than its rivals achieve and by charging similar prices for the products and services that it offers, thereby achieving advantage via superior profitability? Or is the
FIGURE 1
BASIS OF COMPETITION
Broad target
Lower cost
Differentation
Cost leadership
Differentiation
COMPETITIVE SCOPE Narrow target
Focus Cost focus
Differentiation focus
PQ Magazine August 2020
back to basics PQ
FIGURE 2
Suitability
Present
New
Market penetration
Market development
Product development
Diversification
Present
New
company wishing to differentiate itself, and the customer is prepared to pay a premium price for the added value which the customer perceives in the product, and thereby enjoys greater margin than the undifferentiated product. Choice 2: What is the scope of the area in which the company wishes to obtain competitive advantage? Is it industry-wide or is it restricted to a specific niche? The answers to these two choices leave the organisation faced with three generic strategies, which are defined as: 1. Cost leadership. 2. Differentiation. 3. Focus. This can be summarised in the following diagram: – see Figure 1 opposite (page 24). We stated that the alternative directions available to a business could be described in general terms as follows: 1. Market penetration. 2. Product development. 3. Market development. 4. Diversification.
product/market matrix (Figure 2, above). The final problem that must be overcome is to decide how the chosen strategic option should be undertaken. The options available are: • Internal development. • External development/acquisition. • Joint development.
Market penetration This involves increasing the market share in the current market with the current product. Market share can be enhanced by such techniques as improved quality, productivity or increased marketing activity.
Joint development A formal agreement between two or more organisations to undertake a new venture together – for example, Airbus (spreading of cost). Look again at Figure 1. Once all the alternative options have been generated, we need to evaluate their appropriateness before making a choice. A useful framework to apply when considering the appropriateness of an option is: • Suitability. • Feasibility. • Acceptability.
Product development This involves introducing a new product into the current market. The product change is often the result of changes and modifications to an existing successful product – for example, Mars ice cream. This is an alternative to the present product and builds on present knowledge and skills. Market development In this case the organisation keeps its tried and tested products but aims to apply them to different market segments. This strategy maintains the security of the present product while enabling extra revenue to be generated from new segments – for example, McDonald’s and its geographic market development. Diversification This is the riskiest of the product market strategies as it involves the introduction of a totally new product in a new market. Diversification can either be related or unrelated. Ansoff represented the last four choices in his PQ Magazine August 2020
Internal development Reasons: Often undertaken to maintain the present equilibrium within the company as it is much less disruptive than an acquisition. Another reason may be that there is not sufficient finance available for an acquisition, or that the government may prevent acquisition/merger through legislation. Acquisitions If there is sufficient finance available an acquisition, will provide a very quick way of providing access to new product/market areas and the new organisation will have economies of scale advantages.
Suitability identifies the extent to which the proposed strategy enhances the situation identified in the strategic analysis. The following questions need to be addressed about the strategic options: • Does it close the planning gap? • Does it address threats and weaknesses? • Does it build on identified strengths and exploit opportunities? • Does it fit in with the organisation’s mission? Feasibility The issue of feasibility evaluates whether the chosen strategy can be implemented successfully. The resources the organisation has at its disposal will obviously determine this. To save time, simply think about the 6Ms. Acceptability The final issue to address is whether the selected strategy will meet the expectations of the key stakeholders in the firm and typical issues to be looked at would include the level of risk and return resulting from the option. Remember that exam questions will normally touch on some part of the process we have described and if you have an in-depth understanding of everything that we have covered you will be able to construct much more comprehensive arguments in the exam. Strategic implementation The area of strategic implementation covers many areas but it is possible to simplify the issues in to a number of key sub-headings: • Project management. • Organisational structure. • Management of change. Hopefully you are now able to overview the strategic planning part of the syllabus in a more systematic and logical way. All you need to remember is the key steps of strategic analysis, choice and implementation. This should then set off another chain of words in your head, such as: ‘All that is necessary now is to use the framework in an applied way relevant to the question asked.’ • Sean Purcell, of WiseUpNow, is the current PQ magazine Private Sector Tutor of the Year. He is also an ACCA guru for the SBL exams
Back to Basics video Check our Sean Purcell’s ‘Back to Basics’ video on the Strategic planning process. The 2020 PQ magazine Lecture of the Year says there are three steps to understanding the process – strategic analysis, strategic choice and strategic implementation. Sit back as Sean explains it all in just eight minutes. Go to: https://vimeo.com/437139421
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Sorted, thanks to pqjobs.co.uk
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cyber security PQ
No compromise Ken Garrett explains why keeping a business safe from cyber attacks is paramount in today’s digital business environment
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rganisations are increasingly relying on information technology. For example: • Recording accounting data. • Websites. • Communication. • Big data. • Artificial intelligence. • Computer-aided design and computer-aided manufacture. • Process control. If information is lost, stolen or improperly altered, or if processing halts, then an organisation will be damaged – perhaps fatally. IT systems can go wrong for many reasons but the term ‘cyber security’ is reserved for malicious damage or attack. It is the use of technologies, processes and controls to protect systems, networks, programs, devices and data from cyber attacks. Cyber attacks can: • Disable the system or knock it offline. For example, denial of service attacks aim to overwhelm internet sites to stop them functioning. • Get access to the target computer’s data to learn from it, change it or distribute it. For example, ransomware encrypts data and demands a payment before the unencrypt key is supplied. • Takeover or interfere with the processing. For example, to prevent machinery working. The importance of cyber security has increased because of increasing reliance on IT and also because of changes in technology. Today, almost every computer has internet PQ Magazine August 2020
access, will be part of a network and might use cloud technology. All of these systems involve communication networks and this increases their vulnerability. It should be noted that the Covid-19 virus has meant than many more employees are working from home and require remote access to their office systems. This increases the risk of a cyber attack. In the UK, the National Cyber Security Centre gives guidance on the security of network and information systems. The objectives are: • Managing security risk. • Protecting against cyber attack. • Detecting cyber security events. • Minimising the impact of cyber security events. Managing security risk: This is high level and includes considering the organisation’s attitude to risk, identifying and assessing risks, and identifying essential services that must be maintained. Management should appoint a specialist committee whose brief is to manage cyber risks. Protecting against cyber attack: A set of comprehensive policies and processes must be developed that will protect the organisation’s system so that essential services can be delivered. Measures include: • Care in staff recruitment, training and culture. • Strict access control. • Testing software. • Holding data securely. • Resilient networks. Detecting cyber security events: An effective monitoring system must be in place so that actual and attempted security breaches are
discovered and responded to. Minimising the impact of cyber security events: There should be response and recovery planning. For extreme incidents this might be known as a disaster recovery plan. This plan should indicate how to assess the seriousness of the incident, how to minimised the effects of the incident, staff duties, how a back-up or standby system can be switched to, and how public relations should be managed. Cyber security tools and techniques Forensic analysis: Computer forensics techniques discover, preserve and analyse information on computer systems in ways suitable for court evidence. Forensic analysis will also extend to network analysis where the results can show who was logged on to the system at any time, what operations they carried out, what websites were accessed, etc. Malware analysis: Malware is software specifically designed to disrupt, damage, or gain unauthorised access to a computer system. Malware includes viruses and ransomware. Malware analysis aims to understand what a piece of malware does and how it does it. Penetration testing: Sometimes the terms ‘black hat’ and ‘white hat’ are used to describe hackers: • Black hat hackers are the baddies, illegally hacking systems for personal gain, political reasons or just for fun. • White hat hackers are the good guys who try to penetrate systems on behalf of the systems owners. Penetration testing (‘a pen test’) is an authorised simulated cyber attack on a computer system by hackers acting on behalf of the client to probe the system for vulnerabilities. Once vulnerabilities have been found the client must take action to remedy the weaknesses; the penetration test should be repeated to see if the measures taken have been successful. Software security: This means trying to protect software against malicious attacks. Software security can be enhanced by using good programming techniques. New or amended software should be used only after strict authorisation and testing. Software security can be designed in layers with security set at an appropriate level for the processing being carried out and data being accessed. For example: Tier
Description
Low
Able to withstand simple attacks
Medium
Can withstand attacks and report those attacks
High
Can withstand attacks, report attacks and make use of protective action such as locking accounts, encryption, recording the IP address of intruders
• Ken Garrett is a tutor for OpenTuition 27
PQ CIMA exams
Home or away? Where should you sit your CIMA exam? Stephen Flatman outlines the options so you can choose the one that suits you best
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s Covid-19 restrictions are being relaxed in many places you now have two options for where you sit your CIMA exams. You can opt to sit your CIMA exam remotely or you can choose to have the full, traditional exam experience at a test centre. It’s important, where you sit your professional exams. Feeling comfortable in the test environment is key to allowing you to perform at your best on the day. However, it’s not such a straightforward choice for everyone and you need to carefully consider a number of factors before making your final decision. Here’s a preliminary checklist to help you assess which venue may be best for you: Consider an online exam if: • You have a reliably stable and highspeed internet connection. • You have passed the system test using the equipment you plan to use to sit the exam. • You are able to sit for the duration of the exam without leaving the room. • You have a quiet, walled space with a closed door to sit your exam. • You have access to a computer that does not have firewall or VPN restrictions. Choose a test centre if: 28
• Your equipment fails the system test. • You have had a previously unsuccessful attempt at taking an online exam. • You have an unreliable internet connection. • It is difficult to find a time and a quiet space. • There are other people in your household using the internet at the time you need to sit your exam, or you have experienced online meetings and calls dropping out. • You have any special accommodation requirements, as you will be able to book over the phone and have all requirements met. Aside from the above requirements, you will also need to take in account which type of exams you are sitting when making the decision about where to sit your exams. For example, Objective Test exams, which include short multiple-choice questions, number entry questions, drag and drop questions, will be easier to sit at home. In addition, they are available on-demand, all year round so if you need to re-sit your exam, you can easily schedule a new one as soon as you are ready. In May, the majority of students had a successful experience sitting their
exam online. Unfortunately, due to the less controlled environment of the online setting and the need for a continuous and regular internet connection, there was a small minority of students sitting their Case Study exams who had a disrupted exam experience. We are doing everything that we can to rapidly improve the exam experience for all of our students. So, for Case Study exams, which are designed to test a variety of skills including research and analysis, how to present information, persuasion and communication skills, the reliable, controlled environment offered by test centres offers students a better exam experience. Moreover, there are only four exam windows each year so it’s not as easy to reschedule as the Objective Test exams. Where possible, if you feel comfortable travelling to a test centre and feel at ease with the safety and hygiene procedures that are in place due to the Covid-19 pandemic, we recommend that you take your exam there. Whatever you choose to do, there is lots of exam preparation advice on the CIMA website to support you (or you can check out my previous PQ articles on that topic). As always, we recommend that you continue to book your exam in advance where possible and only reschedule if absolutely necessary. I, and everyone at the Association, wish you every success! • Stephen Flatman, Vice President, Examinations, Management Accounting, The Association of International Certified Professional Accountants PQ Magazine August 2020
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PQ ACCA FR exam
A statement of
changes in exam papers Struggling with SOCIE? Fear not, Chris Barlow is here to lend a helping hand
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AS 1 states that a statement of changes in equity (SOCIE) forms part of a set of published company accounts, but it seems to be a common theme within the ACCA FR exam that students struggle with, or totally omit it, in a published company accounts exam question (see examiner’s reports from March 2020). Given the preparation of a SOCIE has appeared within published company accounts questions for up to six marks, then with a comprehensive understanding of what is recognised in it and how to approach it in the exam, then it can be a statement of changes in exam results. What might have been a fail can readily turn into a pass. So, let’s look at how we can change this exam performance. The SOCIE is quite literal in that it is a statement that shows the users of the accounts how the equity section has changed from the start of the period to the end of the period. So, what appears in it? Surely that’s obvious, no? Equity appears on the statement of financial position alongside the assets and liabilities. We could all name the assets and liabilities if challenged to do so without thinking, but what about the equity balances? Ask yourself what they are and list them out, what balances appear within equity? Yes, you got there, they are as follows: • Equity shares. • Share premium. • Retained earnings. • Other comprehensive income. • Convertible option (hard!). OK, now identify what causes these balances to change each year and which balances they impact. Go on, list them! You should have thought of the following: • Share issues (rights/bonus/new issue) – equity shares and share premium.
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• Profit or loss for the year – retained earnings. • Ordinary dividends – retained earnings. • Revaluation gains (and associated deferred tax) – other comprehensive income. • Prior year errors – retained earnings. • Changes in fair value of FVTOCI financial instruments – other comprehensive income. • Convertible debt – convertible option (hard!). Do you spot a theme as you look through what changes the equity balances? If you’ve not then apart from the change in fair value of FVTOCI financial instruments and the convertible debt,
all the other adjustments are straight out of ACCA FA, that everyone will have either passed or received an exemption for. So, it cannot be a case of a lack of knowledge surrounding the SOCIE, it must be a lack of proper exam technique that is the issue. Why is this the case? Possibly as students are focused on maximising marks on the SFP and/ or SPLOCI, marks that can be too difficult to obtain for many. So, as we’re working through the adjustments to the SFP and SPLOCI we should be thinking about adjusting the SOCIE too, so that we can maximise marks there. So, how do we do this and ensure that we get the ‘easy marks’? • Opening balances – copy them across from the trial balance. Easy! • Profit or loss for the year – use your own figure from the SPL. Whether this is the right or wrong number you will get an easy own figure mark here, provided you treat it correctly. Add the profit for the year from the SPL (or subtract the loss) from retained earnings as the last thing you do in answering the question, and give yourself time to do so. Easy! • Share issues – you should be able to do this in your sleep. The nominal value of the shares issued goes to share capital and the excess above the nominal value goes to share premium. Easy! Don’t forget any links to EPS calculations… • Ordinary dividends – the total dividend paid to the equity shareholders (dividend per share multiplied by the number of shares in issue) is a reduction in the retained earnings. Easy! So potentially three or four, pretty easy, marks that can be scored in an exam question that can mean the difference between a pass and a fail. Yes, the examiner could throw in a curve ball in relation to the share issue but if that is done then there will be an easier mark elsewhere. Head over to www.opentuition.com to find questions geared around the statement of changes in equity and how to attempt it as part of a published company accounts question. • Chris Barlow is a tutor with OpenTuition
PQ Magazine August 2020
ACCA SBR paper PQ
The moral maze Steve Widberg has some advice to help you tackle the ethics question in the Strategic Business Reporting paper
Q
uestion 2 in the ACCA Strategic Business Reporting (SBR) exam typically presents candidates with a scenario and asks them to discuss accounting treatments and ethical issues. This article focuses on the latter requirement. Consider the following scenario: “The accountant at Boxo, a public listed company, is concerned that the directors are refusing to disclose a very significant transaction between the Managing Director and the company. She is also worried that a loss-making subsidiary disclosed as a discontinuance should really be classified as continuing in the profit and loss account. The directors’ remuneration has a significant share-based pay element.” Having discussed the relevant accounting treatments as set out in IAS 24 (Related Party Transactions) and IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations), we need to consider how to structure the ethical issues. Firstly, make reference to the fact that the accountant (and any directors who are ACCA qualified) will be bound by the ACCA Code of
Ethics and Conduct. Secondly, think which ACCA principles may be relevant – do NOT write out all five principles. Select one or two and ensure that your sentences combine the name of the principle, the meaning of the principle, and an explanation of how the principle is relevant to the scenario. For example: “Integrity requires straightforward business conduct. The directors are showing a lack of integrity by claiming that continuing activities are discontinued. This tactic may be used in order to make shareholders believe that the loss-making subsidiary has been
closed down or will shortly be sold off.” You could also have linked these issues to professional behaviour – conduct which may lower the reputation of the accounting profession. In some scenarios it is clear that the company is unaware of a particular accounting rule – in this case we would use the principle of professional competence and due care (maintaining up-to-date knowledge). Thirdly, consider the threats to objectivity that you learned in Audit and Assurance. Self-interest is relevant here; but we must again ensure that our explanation is linked to the scenario. For example: “ACCA members must not allow bias to override objectivity. A self-interest threat arises at Boxo because of the share-based remuneration. Directors would be concerned that disclosure of the very significant transaction involving the Managing Director could make the share price fall, reducing the value of their shares/share options.” Finally, there may be easy marks available if you are asked what actions the accountant should take at this stage – whistleblowing/ discussion with audit committee/legal advice/ resignation, etc. It is important that you practise ethics questions – it’s far too tempting to just read the model answer in what appears to be an ‘easy question.’ Remember too that two marks are available for clarity and application of ethical knowledge to the scenario. • Steve Widberg is a tutor at Open Tuition
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PQ Magazine August 2020
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CIPFA spotlight PQ
The global challenge Sara Breen describes how CIPFA’s international outreach in Somalia is helping improve the country’s public finances
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any people who choose a career in the UK public sector often don’t realise that they could end up helping people in need around the globe. The CIPFA qualification is invaluable for working in local authorities, the NHS or other public sector organisations in the UK. But there are also students whose careers have taken them around the world, improving public financial management through accountancy training for vulnerable populations internationally. While CIPFA participates in international development programmes in several different countries, some completed in-country and others virtually, one of the longest-running one has been focused on Somalia. In 2014 CIPFA, in partnership with British consulting firm WYG International, was commissioned by the World Bank to deliver the International Public Financial Management (IPFM) qualification to government finance professionals in various regions of Somalia. Somalia is confronting serious difficulties when it comes to public financial management, which impacts the provision of public services to those in need. Decades of conflict have weakened Somali public institutions, leaving the public sector vulnerable to corruption, poverty and a lack of transparency. The Federal Government of Somalia, established in 2012, is focused on stabilisation, recovery and reconstruction. Dedicated public finance professionals are working hard to combat these challenges and improve the lives of people all over the country. A crucial part of this is a focus on
PQ Magazine August 2020
increasing their capacity for public financial management through training. Since 2014, CIPFA has been delivering the IPFM training programmes to civil servants working for federal, state and local government in Ministries of Finance or other line ministries that deliver essential services to the Somali people. Instruction in financial management and management accounting will help increase transparency and ensure that the government is operating in a financially sustainable manner. In order to build sustainable PFM training capacity within the country, the programme is being delivered in partnership with local universities – Mogadishu University, SIMAD University, Puntland State University and East Africa University. The programme supports the universities to develop sustainable PFM training capacity through the establishment of PFM Academies. CIPFA is delivering training of trainers to university lecturers and providing continuous online support to students following the programme. Recognising that English language skills are a potential barrier to learning, and the need to support the university tutors who are often also new to professional accounting qualifications, the project also provides support in the form of ‘tutor mentors’. These are qualified Somali accountants who have strong English and Somali language skills, and who often have work experience as accountants both within Somalia and internationally. These tutor mentors support the university tutors in effective delivery of the CIPFA qualification, as well as directly supporting the students. The first phase of the project ended
successfully, with a strong pass rate and about 120 students achieving the CIPFA IPFM Certificate. After this initial success, a second phase of support is now underway in Puntland, which is enabling students who passed the IPFM Certificate to progress through the IPFM Diploma with the aim of achieving Affiliate CIPFA Member status. This status is being recognised as an important marker of PFM expertise by the Somali government and will provide a significant boost to the careers of students who achieve it. The two main goals of the project are to build PFM training capacity within Somalia so that they have the ability to deliver training independently at a high international standard, and to directly train civil servants who will in turn help resolve the financial management issues that they are being faced with at a national level. As of now, the future is looking bright as plans are drawn up to continue supporting Somali civil servants for the next few years. As the CIPFA qualification is highly valued there, we expect to see more students signing up in the hopes of gaining affiliate CIPFA membership on completion of their studies. CIPFA is also currently involved in development projects in Tajikistan, Bangladesh, Botswana and several other nations to improve their public financial management capacity. Being a fully qualified accountant will enable you to get involved in international development work in the field of PFM in the future. When choosing to obtain your professional accountancy qualification with CIPFA, you’re choosing to be part of an organisation that is doing its part to improve transparency, financial management and economic wellbeing globally. • Sara Breen is CIPFA’s Head of International Advisory 33
PQ technology more time humans will recover to do what they do best. New technology has changed the expectations clients have when working with companies and it’s the same for accounting. AI helps accountants be more efficient.
Six of the best Bernard Marr outlines the major technology trends every accountant must know about
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he explosion in data that has launched the Fourth Industrial Revolution, an era when business will be transformed by cyberphysical systems, has enabled several technology trends to develop. Every business can leverage these important trends and should pay attention to how best to use them, but accountants should really evaluate how these six technologies can be used strategically to achieve the company’s business strategy. 1. Big Data Data is crucial to make business financial decisions. Today, data isn’t just numbers and spreadsheets that accountants have been familiar with for years, it also includes unstructured data that can be analysed through natural language processing. This can allow for real-time status monitoring of financial matters. Data is the fuel that powers other technology trends that are transforming finance and accounting in the Fourth Industrial Revolution. Even the audit process has been digitalised. In the financial realm, data produces valuable insights, drives results and creates a better experience for clients. Since everything leaves a digital footprint, the unprecedented digitalisation of our world is creating opportunities to glean new insights from data that wasn’t possible before. These insights help improve internal operations and build revenue. 2. Increased Computing Power Just as it is for other companies, all the data created by our digitalised world would be useless or at least
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less powerful if it weren’t for the advances in computing power. These changes allow accounting and finance departments and firms to store and use the data effectively. First, there are the cloud services from providers such as Amazon, Google and Microsoft that provide scalable systems and software to leverage, that can be accessed wherever and whenever it’s needed. Edge computing has also grown. This is where the computing happens not in the cloud, but right where the data is collected. The adoption of 5G (fifth generation) cellular network technology will be the backbone of a smarter world. When quantum computing is fully adopted it will be transformative in a way that cannot even be predicted at this point since it will catapult our computing power exponentially. Quantum computers will be able to provide services and solve problems that weren’t possible with traditional computers. There will be tremendous value in the financial world for this capability. 3. Artificial Intelligence (AI) Artificial intelligence can help accounting and finance professionals be more productive. AI algorithms allow machines to take over time-consuming, repetitive and redundant tasks. Rather than just crunch numbers, with the support of AI financial professionals will be able to spend more time delivering actionable insight. Machines can also help reduce costs and errors by streamlining operations. The more finance professionals rely on AI to do what it does best – analyse and process a tremendous amount of data and take care of monotonous tasks – the
4. Intelligence of Things When the internet of things, the system of interconnected devices and machines, combines with artificial intelligence the result is the intelligence of things. These items can communicate and operate without human intervention and offer many advantages for accounting systems and finance professionals. The intelligence of things helps finance professionals track ledgers, transactions and other records in real-time. With the support of artificial intelligence, patterns can be identified or issues can be resolved quickly. This continuous monitoring makes accounting activities such as audits much more streamlined and stress-free. In addition, the intelligence of things improves inventory tracking and management. 5. Autonomous Robots Robots don’t have to be physical entities. In accounting and finance, robotic process automation (RPA) can handle repetitive and time-consuming tasks such as document analysis and processing which is abundant in any accounting department. Freed up from these mundane tasks, accountants are able to spend time on strategy and advisory work. Intelligent automation (IA) is capable of mimicking human interaction and can even understand inferred meaning in client communication and adapt to an activity based on historical data. In addition, drones and unmanned aerial vehicles can even be deployed on appraisals and the like. 6. Blockchain The final tech trend that has significant implications for accounting and finance professionals that I wish to cover is blockchain. A distributed ledger or blockchain is a highly secure database. It’s a way to securely store and accurately record data, which has broad applications in accounting and financial records. Blockchain enables smart contracts, protecting and transferring ownership of assets, verifying people’s identities and credentials and more. Once blockchain is widely adopted and challenges around industry regulation are overcome, it will benefit businesses by reducing costs, increasing traceability and enhancing security. • Bernard Marr is the author of ‘Tech Trends in Practice: The 25 Technologies that are Driving the 4th Industrial Revolution’ To read our review of this book go to page 37. PQ Magazine August 2020
ACCA examiner reports PQ
Straight from the
horse’s mouth Have you read the March examiner reports? We have for PM and FM, and this is what the examiner wants from you… Performance Management (March pass rate 35%) The examiner says that PM has a large syllabus that can be daunting, so it is essential you have broad knowledge. They explain: “If a section B OT case covering variances comes up and a candidate hasn’t covered this in their studies, the 10 marks available are left to chance.” You must also be able to apply the logic of a concept or theory to a problem. That means understanding the method and why you are doing the calculations. Don’t just focus on how to do the calculations. The range of topics covered in the March 2020 exam in section B was: • Target costing. • Pricing. • Life-cycle costing. • Budgeting. Variances. • Risk and uncertainty. For section C candidates were presented with questions drawn mainly from planning with limited factors; relevant costing; performance measurement; and variance analysis. Financial Management (March pass rate 44%) The examiner reminds candidates that if you are asked to select two correct statements in section B, then marks can only be awarded if two statements have been selected. There is no partial marking, so an answer which only selects one statement will be awarded no marks. A candidate who selects three statements will also receive no marks. When answering number entry questions, you must also ensure you are entering the answer in the right format, as stated in the requirement. If the number is being asked for in millions there will be an ‘m’ after the number entry box. And if you put in a full answer of say 13,000,000 in the box rather than 13, this will be marked as incorrect. Seems a bit harsh, but there you are. Turning to the March exam itself, the examiner was concerned about the number of candidates who were unable to correctly calculate the cost effects of introducing accounts receivable factoring, or offering an early settlement discount (working capital). In another question many candidates wrongly believed that offering an early settlement discount would increase the length of the cash operating cycle. Errors on a question about the dilution of earnings per share following the expansion financed by a rights issue were a common problem - candidates either used the wrong PQ Magazine August 2020
increase in earnings or didn’t use the revised number of shares. The requirement to calculate an assetbased valuation on a replacement cost basis caused difficulties, too. The examiner is worried that candidates are not familiar with the method of how to perform these calculations.
Another question highlighted problems with understanding what earnings yield actually represents and how it is calculated. You also need to be able to identify how practical considerations impact on the valuation of shares. Then the examiner turns to risk management, and asked: why are candidates not strong on derivative questions? Among the problem here were: • Using forward contracts on both income and expenses in different currencies – candidates need to use different ends of the forward contract spreads provided. • Lack understanding of a forward rate agreement. • Confusion between forward exchange contracts and forward rate agreements. • Unable to compare lead payments against a forward contract. • Cannot correctly apportion their money market hedging calculations. In section C candidates were presented with questions mainly drawn from working capital management, investment appraisal, and business finance. The examiner says that when discussing the effects of a business expansion on working capital investment and financing policy candidates need to beef up their replies – “they are often much briefer than needed for the marks on offer”. There also appears to be confusion about the two policy areas. When it comes to treasury management markers wanted to see the use of key terms such as ‘cash pooling’, ‘foreign currency risk’ and ‘liquidity management’. As in previous exams candidates scored well (relatively) on questions requiring an NPV calculation. One area where sitters often make errors, however, is the treatment of inflation in NPV calculations. The examiner also asks candidates to carefully check the timing of cash flows. “Working capital has initial investment, incremental investment and recovery and all of these cash flows need to be timed as required by the question scenario.” With all calculations in FM it is essential that all workings are shown in your answer. If they aren’t there then markers cannot give credit for application of the correct method following an arithmetical error. A need for deeper study comes through as students struggle discussing the relative merits of investment appraisal techniques, for example NPV and IRR, and ROCE and IRR. The examiner also doesn’t want to see simple answers about risk and uncertainty. He knows by now that risk is quantifiable and uncertainty is not, and doesn’t want to be offered a few bullet points, especially when the answer is required to be linked to the scenario. When it comes to business finance the examiner cannot understand why candidates use book values for equity and debt when asked to calculate the weighted average cost of capital using market values. The examiner also wants candidates to take more care with their calculations here too. Finally, the examiner stresses that sitters need to use the resources available to help them. 35
PQ wellbeing
The power of
positive thought Pantelis C. Fouli explains how you can develop resilience and the ability to deal with what life throws at you when you’re trying to work and study
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ental toughness is a prerequisite in any area of one’s life, be it professional or personal. But just how can we take back our power, embrace change, face our fears and train our brain for happiness and success? These are a few things, we as progressive professionals must not do:
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We must not waste time feeling sorry for ourselves James Gardner said it best: “Self-pity is easily the most destructive of the non-pharmaceutical narcotics; it is addictive, gives momentary pleasure and separates the victim from reality.” We need to understand that our thoughts are interpreted by the brain just as that – thoughts. The brain cannot distinguish between positive or negative, thus wallowing in self-pity will just activate the sub-conscious to ‘look’ for surroundings or circumstances that are in line with your self-pitying attitude and guess what, it will make sure that it gives you more of that! Remember, you are what you think MOST of the time. So when I tend to find myself on a downer I do the following: a. Be active. I tend to smash a few push ups or burpees – that tends to shift my state.
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Remember, it is our feelings towards our thoughts that is the issue here and exercise always seems to alter that. b. Practice gratitude. Write down each day three things that you are most grateful for. I make sure this practice is a staple of my morning routine, even before I take my first sip of coffee (and I love coffee). c. Serve others. The most rewarding act for a person’s inner peace is to perform an act of random kindness. Dr King said it the best: “Life’s most persistent and urgent question is, what are you doing for others?” Performing a great deed can bring more meaning to your day and indeed your life as a whole.
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Don’t give them power over you – do good, be good Dale Carnegie hit the nail on the head with this one; he was spot on when he said: “When we hate our enemies, we are giving them power over us: power over our sleep, our appetites, our blood pressure, our health, and our happiness.” Whenever we find ourselves venting to friends and family over issues we have with others we only fuel our own frustration and in turn waste our time and energy.
Retaining that power is being confident in who you are and in the choices you make, despite the people around you and the circumstances you are in. Giving away this power leads to other followup issues like: a. You become dependant on other people and external circumstances to regulate your emotions. b. You let others define your self-worth. c. You actually avoid in dealing and addressing the real issue at hand. All these issues are created in the mind. If we have the power to create them, we then have the inner strength to deal with them. The way we do this is as follows: a. Do good and be good: If you’re a decent human being then you need not think much about what others think or say about you. I tend to use the phrase, “what others think of me is none of my business”. Reclaiming back your power is learning to not be so sensitive and learning to not take it all personally. b. Think before you react. Every time we lose our cool we are giving away our power. When I find myself in such predicaments I do the following: • Sit down with my eyes closed (if possible) and take in a few controlled breaths, this nearly always settles and quietens the mind • Detach yourself. If I see that an argument is escalating I tend to detach myself from the situation, take a step back and try to see it from the other person’s view. • Excuse yourself. If I see I am not getting anywhere in a conversation I will try and find a way to excuse myself. This will give both parties time to reflect on what was said. To be continued next month… • Pantelis C. Fouli is ACCA qualified and an ACCA Advocate and student mentor. Connect with me via LinkedIn (https://www.linkedin. com/in/pantelisfouli) but please mention in the personal message that you are PQ reader. PQ Magazine August 2020
careers PQ
Dear Karen
Life at Boudica Schools Trust
Ask PQ’s very own agony aunt Karen Young when you need advice from a real expert. Email your dilemma to graham@pqmagazine.com, and he will pass on the best ones to Karen
Charlie Stuart Atkins is AAT qualified, and is now actively studying ACCA. After being shortlisted in 2019, he walked off with the Apprentice of the Year trophy at the PQ magazine awards in London earlier this year
THE DILEMMA After working remotely over the past couple of months because of Covid-19 I’ve been told our office is re-opening and all employees are going back to work, as we were before. The only problem is I’ve loved the flexibility of working remotely and found that it’s been great for my productivity, morale and work-life balance. How do I bring this up with my employer and negotiate a flexible working arrangement? KAREN’S RESPONSE The first thing to note is that flexible working shouldn’t be seen just as a ‘luxury’ available to a small minority. Different working patterns have become more commonplace in recent years as their benefits are now widely established, so rest assured that it’s not an unreasonable or unusual thing to discuss with your employer. Many leaders have been encouraged by the high levels of activity and productivity that have been largely maintained through remote working. Even if this doesn’t appear to be the case at your place of work, you should still feel confident in having a transparent conversation with your employer about working flexibly. Hopefully they are aware of its benefits already, but it’s worth bringing up some of the following points in your discussion to make this clear: • You intend to continue progressing within the company and remain committed to your professional development. • Costs associated with travel and office space may be reduced. • You’ll be able to cover ‘irregular’ hours outside of the working day to meet demand. Finally, remember that a discussion like this isn’t necessarily about walking out with exactly what you want. Flexible working is new for many organisations and can be complex to implement for various reasons, so compromising may be necessary. Aim to come up with a solution which works for both you and your company. • Karen Young is a director at Hays. A recruiting expert, she is passionate about helping people to find the right job, and companies to find the right person PQ Magazine August 2020
What time does your alarm go off on a work day? 7.30am. What is the first thing you do when you get to your desk? Offer a hot drink to colleagues and anyone arriving for meetings, to ensure they feel welcome. What’s on your desk? Large monitor, to-do list, telephone, laptop, in-tray and hand sanitiser! What’s the best thing about where you work? I work in a high functioning team and I am very grateful for the opportunities I have been given. Where’s your favourite place for lunch? Mambo Jambos (an American diner). What can you see when you sit at your desk? All the team. Which websites are your favourites and why? BBC News, to keep up-to-date with what is going on in the world.
BBC Sport for transfer news and scores. Twitter, as an accountancy platform for student interaction. What websites do you use for work? Mostly Google, as our systems are cloud-based. If I am stuck I’ll go to accountancy websites to see how a transaction should be treated. I also use Excel-related websites to work on creating new formulas and improving the way I report on data. How many hours a week do you spend in meetings? On average around eight hours. What time do you leave the office? 5.30pm, but I usually stay in the office until 7pm to work on my studies and CPD. How do you relax? I go to the gym to relax and to release endorphins. What’s your favourite tipple?
Aspalls – Suffolk cider. How often do you take work home with you? I try to avoid it as I feel that it is important to have a distinction between working and home life. What’s your favourite TV show? Bulletproof. Summer or winter? Summer. Pub or club? Pub Who is your hero? Dwayne Johnson What is the first thing you are going to do when lockdown is over? Go to the gym and get back into a structured plan. If you had a time machine where would you go? I’d fastforward 100 years to look at how things have changed between our generation and future generations, taking into account the impact our actions will have on future generations.
workers in the UK enjoyed an extended bank holiday after the company said they could take an extra day off for working “harder than ever” during the pandemic. Citigroup CEO Michael Corbat said: “Please take the day to relax and enjoy time with your families, and above all, please keep in mind that, as important as it is to take care of our clients, we need to take care of ourselves.” Who said bankers don’t have a heart?
for professionals (you should be on it!), has introduced a new feature allowing people to post audio clips on their profile of them pronouncing their name. It said it was adding the feature after requests for help in preparing for a first meeting or call with a new contact. LinkedIn’s Joseph Akoni said: “Everyone, including me, makes mistakes when pronouncing other people’s names. I have encountered with my Nigerian middle name – there’s a 99% chance someone won’t pronounce it correctly first try.”
In brief Seven up The number of female CEOs in FTSE 100 companies is to increase to seven after Susan Davy was made the new boss at South West Water. Davy steps up from FD. Her appointment came just days after Aviva said Amanda Blanc would be its new chief executive. Pennon, the owners of South West Water, will also have a new chairwoman, with Gill Rider taking over from Sir John Parker. Banking those holidays Thousands of Citigroup
Get the name right LinkedIn, the social network
The PQ Book Club: books you should read Tech Trends in Practice by Bernard Marr (Wiley, £29.99) In this book the author looks at, as he puts it, “the 25 Technologies that are driving the 4th Industrial Revolution” – a bold claim but one I actually think he achieves. When any list is produced it’s rare that you agree 100% with it, and when that list relates to tech there is the added danger that the subject matter is so fast changing your list is out of date before you’ve written the last sentence. But in July 2020 this is definitely a pertinent list.
Accountants in practice have always been at the forefront of the technology revolution, recognising that technology delivers time and cost savings. The big concern for them is that as the revolution moves on apace their knowledge and understanding of the new technology becomes stretched to the very limit. What this book brings is a detailed discussion of 25 technologies that will impact, offering a single sentence description which I found refreshing and made you want to delve deeper. Two good
examples that are well worth checking out are the Internet of Things and Digitally Extended Realities. PQ rating: 5/5 This is a great book to help learn and understand the terminology that is increasingly becoming standard but which many people struggle to truly understand. After reading this it will become a lot clearer. • Reviewed by Tony Margaritelli, chair, ICPA (www.icpa.org.uk) 37
PQ got a story, funny or serious, you want to share? Email graham@pqmagazine.com PQ got the a story, funny or serious, you want to share? Email graham@pqmagazine.com
Five ‘crazy’ taxes Being inventive with how to raise taxes has always been an art. Here are five whacky taxes that have fallen by the wayside:
Panipat, the movie It may have been unsuccessful at the box office, but ‘Panipat’ is getting a second lease of life online. This 2019 Hindilanguage epic movie stars Arjun Kapppr, Sanjay Dutt and Kriti Sanon, and is directed by Ashutosh Gowarikar. The hero of the movie is Sadashiv Rao Bhau, a Maratha warrior who (spoiler alert) dies bravely in the end. At one point in the movie we see him ‘demoted’ to Finance Minister, and he is soon writing final demand letters to those who have forgotten to pay their taxes. There is even a mention of assets and liabilities If you have a spare two-and-a-half hours, then this movie could be for you.
Forget those cute cat pictures, how about a duckling falling asleep on your calculator picture. There’s the challenge – who can beat that picture? Send them to graham@pqmagazine.com
• Beard tax: In 1535 Henry VIII introduced a beard tax. Didn’t he have one himself? The tax was graduated and varied depending on the wearer’s social position. • Wallpaper tax: In 1712 printed wallpaper was taxed, but builders got around it by hanging plain paper and then painting on it. • Clock tax: In 1797 all watches and clocks were taxed. The rate was two shillings and sixpence for a basic watch, going up to 10 shillings for a gold one.
Podcast of the month
BoE joins up with Dennis the Menace Dennis the Menace is swapping his catapult for a calculator, and will be helping to teach UK’s children about spending, debt and how demand and supply affects prices. Dennis and chums have teamed up with the Bank of England for 12 lessons on financial literacy. ‘Money and Me’ will be launched in July and is aimed at children aged 5 to 11. Bank Governor Andrew Bailey is hoping that Dennis will instil confidence about using money. The Bank has already launched a money resource for secondary schools, ‘EconoMe’, which has been downloaded by almost 2,000 schools.
’ WEV E
Tim Key’s Late Night Poetry Programme, Series 5, Accountancy Tim’s on the run, trapped in a cable car in Norway. His accountant, or is that his former accountant, has tracked him down. The accountant (Jiffy) has spent 10 years dealing with Tim’s receipts, which arrive in a Tesco carrier bag. But he hasn’t been paid and is now on Tim’s tail. The accountant is told to “chill your abacus brother”, but that won’t stop him. We discover the accountant has metal teeth, the skin of a 35-year-old, and has run two half marathons. Check it out at: https:// www.bbc.co.uk/sounds/play/m000gbgq
• Hat Tax: Pitt the Younger introduced this one in 1784. There was the death penalty awaiting anyone who forged hat-tax revenue stamps. The tax was repealed in 1811. • Soap tax: This one was introduced in 1712 and wasn’t repealed until 1835. Thanks to New Forest Tax Accountants for the list.
GOT THE L OT
Huawei Band 2 Pro Going through the cupboards at PQ Towers we have discovered a Huawei Band 2 Pro, so we giving it away to one lucky reader this month. Waterproof with a builtin GPS, you can track your running routes without a phone and monitor your heart rate at the same time. It also gives you Scientific Sleep Tracking, so you can keep an eye on your light, deep and REM sleep stages. It’s long battery life gives 21 days of normal usage. To be in with the chance to win this great prize email ‘Band 2’ to giveaways@pqmagazine.com. Remember, we need your name and address so we know where you want us to send the prize.
Dot to dot
We have three copies of Christina Rose’s ‘Dot to Dot Mindfulness Mandalas’ book to give away this month. The idea is you use the calming and meditative nature of mandalas to relax and unwind as you complete the dots in these beautiful dot-todot patterns. There are over 10,000 dots to join, and it is the perfect way to de-stress and take some relaxing time for yourself. We have three copies of this fantastic book up for grabs. Email giveways@pqmagzine.com, heading it ‘Dot to dot’. And, three readers will be sent the 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 Terms and conditions: entry giveaway Youonmust send11your must be received by Friday One 8 May. Theper main draw willplease. take place Monday Mayname 2020.and address to be entered for the draw. All giveaway
entries must be received by Friday 7 August. The main draw will take place on Monday 10 August 2020.
TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM 38
PQ Magazine August 2020