PQ magazine, November 2016

PQ magazine www.pqmagazine.com / www.pqjobs.co.uk

November 2016

Rise of the robots

CIMA survey reveals PQs’ attitudes to the march of technology

AQ2016 how will changes affect you?

NEW CASE STUDY FOR FINAL LEVEL

The ACCA unveiled a major shake-up of its final level examinations at an exclusive preview of ‘the ACCA Qualification – the future’ at its new HQ on 10 October.

P1 and P3 are to be replaced with a Strategic Business Leader case study and P2 is being updated and renamed Strategic Business Reporting. The new structure will ensure students are equipped with both the technical knowledge, and professional skills sought by employers worldwide. Changes mean in future students will sit two rather than three essential exams.

At the same time, ACCA is introducing a new Ethics and Professional Skills Module. ACCA believes this new updated module will help develop vital professional skills, ethical behaviour and judgment among its PQs. The optional papers remain the same in response to employer feedback.

In an exclusive interview the ACCA’s executive director of strategy and development, Alan Hatfield, said it was paramount that ACCA has a qualification that equips the next

Be our top apprentice

Hatfield: ‘ACCA must equip accountants for the workplace of tomorrow’

generation of accountants with the skills needed for the workplace of today and tomorrow.

The move to four exams a year and introduction of CBE exams at F5 to F9 shows that ACCA is reacting to market needs, he stressed. He explained that Specimen exams for the new four-hour Strategic Business Leader case study are available now on ACCA’s website, and the first

exams will take place in September 2018. The Strategic Business Reporting paper will be three hours long and again the first session will be September 2018, with Specimen exams also available now.

ACCA now plans to ‘go on tour’ to explain the reasons behind these developments.

• Read what Alan Hatfield has to say about the changes on page 14.

The PQ Awards will have a new category this year – ‘Apprentice of the Year’. Sponsored by London South Bank University, this reflects the rise of the apprentice in the profession.

There are now 18 ‘PQs’ up for grabs, including ‘Student Body of the Year’ and ‘Best Use of Social Media’.

The inaugural Best Social Media award went to the Kaplan team behind its school leaver campaign.

The team wanted to address the challenges of taking on an apprentice and used LinkedIn and Twitter to link through to a new apprenticeship hub page.

So now is the time to get nominating – and remember you can nominate yourself. Go to www.pqmagazine.com and click on the ‘pq awards’ bar to download the form. The closing date for entries is Friday 16 December.

“Kaplan take away the stress of studying and will point you in the right direction along your ACCA journey.”

Georgina Lemmon ACCA first in world Prizewinner, P2, December 2015

Start planning the next steps in your ACCA studies The ACCA results for the September sitting are out on the 17th October, so it’s a good time to start thinking about your next steps.

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Re-sit your exam in December

Study towards March 2017 exams

If your results don’t quite go to plan we advise you use this sitting to retake your exam. You can increase your chance of success by enrolling on a Kaplan revision course, but don’t forget the exam entry deadline is 31st October.

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comment PQ

CONTENTS

News 08CIMA exam results The good, bad and ugly papers 10ACCA agm The main talking points from the ACCA’s pow-wow 12EY fined Big 4 staff ‘get too close’ to audit clients and feel wrath of US watchdog Features, etc 06Mind your Ps&Qs The merits of the various qualifications; CIMA innovation welcomed – but do the numbers add up?

14ACCA makes changes Alan Hatfield outlines the new changes to the qualification 16PQ Awards 2017 Why not enter accountancy’s top awards?

It could change your life…

18CIMA survey Do PQs feel under threat from the march of the machines?

20AQ2016 We outline the main

changes to the AAT qualification

22CIMA F3 Dealing with Capital

November 2016 30CIPFA focus How accountants

in the public sector are dealing with the challenges they face 32Technology Making the tech revolution work for you 33Careers #1 ‘Super-charging’ that search for your dream job 34Careers #2 Life in the NHS , social media and book reviews 38Fun stuff Euro trash, brown shoes and our great giveaways The columnists Robert Bruce Criticism of the UK’s auditors is unfounded 8 Prem Sikka The SEC sets example the FRC should follow 10 Carl Lygo Weighty issues that need to be addressed 12 Subscribe to PQ magazine It’s FREE – go to www.pqmagazine.co.uk ABC July 2015 – June 2016

32,238

Asset Pricing Model questions

24ICAEW spotlight How the institute is helping its PQs

25Budgeting Why the BBC lost

‘Bake Off’; and win a great study course with Avado

26ACCA exams What the

examiners think of your efforts

28FI giveaway Your chance to

win a fantastic AAT course; and how to pass CTA OMB

Publisher’s statement: We send a digital issue of the magazine to an additional 8,534 requested readers Free to all accountancy students Annual subscription: £35 (£50 overseas)

Is the PM coming for you?

Accountants got a special mention in PM Theresa May’s Conservative Party conference speech recently. But it might not be the mention they were hoping for! She said: “If you are a tax dodger, we’re coming after you. If you’re an accountant, a financial adviser or middleman who helps people to avoid what they owe to society, we’re coming after you, too.” May also believes that where markets are dysfunctional the government should be prepared to intervene, putting the energy firms and broadband providers on notice. All this has not gone down well with some, especially those who believe interventionism is not good for markets. But she got support from the Financial Reporting Council, which said that there needs to be a change in the relationship between business and society. CEO Stephen Haddrill said it shares the objective of wider stakeholder engagement by companies and is considering how corporate governance principles can best meet the demands of all stakeholders or be amended to do so. He went on: “Tackling important issues such as diversity in boardroom representation and executive pay is in the interests of society and business.”

Get your exclusives here!

The top story for PQs this month is obvious. ACCA is introducing a case study at the final level, and we had the story first! ACCA is also beefing up its ethics module – Theresa May take note! Oh, and we have the latest CIMA pass rates hot off the press.

Don’t forget your PQ magazine also has some great giveaways.

There’s an F5 ACCA course from Avado up for grabs (page 25) and eight AAT courses from First Intuition to be won (page 28). We always have more giveaways on the fun page, too (page 38). This month we have 10 EWI study texts and three powerbanks just for you.

Graham Hambly, PQ magazine editor – graham@pqaccountant.com

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PQ have your say

email graham@pqaccountant.com How many hours?

I read with interest your CIMA study hour guide story (PQ, October 2016) and was surprised by the amount of study ‘officially’ required to pass the OT assessments. Is CIMA really saying you need to study for 10 hours a week over 13 weeks to pass E1? I wondered how this figure was actually worked out, and whether CIMA has ever asked its students how long they had actually spent on getting a pass.

Students are busy people. They are often working, have a hectic social life, and are studying in the evenings, so many will manage

most of the OT assessments on a lot less hours than the official total.

My worry is that PQs will start to

feel guilty if they haven’t put in 150 hours, say for P1, and fail.

Passing the OT isn’t just about time, it is how you use it.

I also found many of my students are more motivated when they sit two exams at a time. It allows them to take on another paper if they required a resit. This way they get momentum and are always moving to the end goal – qualification.

It seems the hourly structure favours the one-paper-at-a-time approach, which can backfire when you take on the case study and need all that previous knowledge to hand.

I noted that Peter Stewart, who I think used to work as a private

sector tutor, perhaps knowing the truth, tried to hedge his bets when he said “many students will have awareness of, or even mastered, some of the topics within each subject”.

It reminds me of a time when the professional bodies used to produce lengthy booklists that no one read. All students did was buy and manual and go on a good evening course!

Name and address supplied The editor says: This letter came from a tutor who didn’t want to be named. He was not alone, and I have had several discussions about the hourly guide. However, we believe CIMA is right to publish these guides.

The writer of the star letter each month wins a fantastic PQ memory stick!

Put in the hours

exam technique, enabling students to feel fully prepared for examination on any part of the syllabus.

Along with this, our revision courses receive excellent feedback, and as such the number of students that participate exceeds 90% for each module.

The pass rate debate

CETC tutors are dedicated and passionate about the CIPFA qualification, and indeed CIPFA is a smaller institute where trainers, members and students and their employers know each other and support each other closely.

We don’t always get things right, but we’re working hard to ensure all of our students have the very best chance of success.

So does CIPFA have better teachers or easier papers? Yes to the former and no to the latter (we would argue that they are ‘more appropriate’).

Giles Orr, CIPFA Director of Learning, Delivery and Partnership

I have seen the article in PQ magazine containing a useful study hour guide for the CIMA OT exams (PQ, October 2016). Can CIMA produce one of these for CIMA case study exams?

I am also looking for any information on the CIMA PER and portfolio/log book I need to complete before qualifying. Do you have any information or could CIMA publish an article for PQ? Abigail Burbidge, by email The editor says: Over to you CIMA – by the way, we think this is a great idea.

Here at CIPFA we were interested to see one PQ’s reader’s letter last month on the matter of exam pass rates. “My question is simple, do the ICAEW and CIPFA have better teachers or easier papers?” asked your correspondent.

To directly compare the Audit and Assurance exams of the three institutes is like comparing apples and oranges, due to the differing structures of the qualifications, and the stage of learning at which PQs are tested on each course. What we find more interesting is the consistency of high CIPFA pass rates across all modules, in

comparison with other institutes.

At CIPFA we value every element of the student experience, not least by having our own in-house training provider, the CIPFA Education and Training Centre (CETC), with a team who work closely with our accredited training partners,

including Kaplan.

Our modules are demanding, as our students and employer partners will tell you, but we think our approach to tuition, whether online or at our CETC centres, supports our students to do better. The CIPFA learning process is also linked to

PQ Magazine Fourth floor, Central House, 142 Central Street, London EC1V 8AR | Phone: 020 7216 6444 | Email: graham@pqaccountant.com Website: www.pqmagazine.co.uk | Editor/publisher: Graham Hambly graham@pqaccountant.com | Advertising manager: Polly Thrasivoulou polly@pqaccountant.com Associate editor: Adam Riches | Art editor: Tim Parker | Subscriptions: dom@pqaccountant.com | Contributors: Robert Bruce, Prem Sikka, Carl Lygo, Tony Kelly, Phil Gammon, Elizabeth Pratt | Origination and print services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email dom@pqaccountant.com

Published by PQ Publishing © PQ Publishing 2016

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PQ news

ROBERT BRUCE Post Enron, the audit process is working well “Where were the auditors?” is the traditional shout from the pundits when a company goes down. Quite right too. If something has gone horribly wrong they should be strung up, along with the company directors.

But maybe things are improving.

Once upon a time the UK scene was murky with the likes of the great Maxwell scandal. Likewise in the US, the collapse of Enron and subsequent disintegration of Arthur Andersen, the accounting firm whose Houston office had audited it, were massive events.

There was a feeling of tectonic plates moving. If Andersen partners from Aberdeen to Adelaide could lose their livelihoods because of a scandal in Houston then no one felt safe. As a result regulations and rules, particularly in the US, were changed.

In the UK the culture of corporate governance followed, with more emphasis on transparency. Audit committees were strengthened.

Looking at the results some 15 years later they seem to have been successful. You cannot directly show that the risk of corporate misdeeds evading auditors has lessened. But the scale of disasters has shrunk. In 2015 the amount of the losses from accounting fraud in the US was down at 0.3% of total corporate profits. It is a tiny amount across the board and, in accounting speak, not material at all. This doesn’t appear in the headlines, and it never will. Bad news is news; good news is not. Research done on the effectiveness of audit agrees. Audits, by and large, work. n Robert Bruce is an award-winning writer on accountancy for The Times

CIMA PASS RATES ARE STILL LOOKING GOOD PQ magazine

EXCLUSIVE The latest batch of CIMA pass rates are in and they are looking good!

The August case study exam results will please lots of CIMA PQs. The Strategic pass rate has jumped from 46% in May to 63% this time around (August). The management pass rate is a healthy 71%.

CIMA’s exam chief, Steve Flatman, pointed to the good news at F2. CIMA has put in a lot of effort here and worked with its learning partners to help improve the material. He stressed that the computerisation of exams means

that he is able to CIMA CASE STUDY EXAMS – 2016 drill down into Aug 16 May 16 Feb 16 Nov 15 the data and Operational 64% 67% 62% 61% really see where Management 71% 63% 64% 78% the help is Strategic 63% 46% 56% 62% needed. Having instant access means CIMA can “all about consistency, reliability react in real time and provide and fairness”. And he believes instant guidance.

CIMA has achieved this yet again.

There has also been very slight CIMA OT pass rates increases in the P1 and P2 pass Overall First time Total rates, to 43% and 45% E1 86% 76% 73% respectively.

P1 67% 47% 43% Flatman admits he doesn’t miss F1 82% 72% 68% the ‘terrible headlines’ about these E2 93% 86% 84% pass rates.

P2 71% 51% 45% The E1 and E2 OTs continue to F2 75% 51% 48% have the highest pass rates. E1 has E3 80% 64% 62% a first time pass rate of 76% and P3 77% 55% 50% E2 is even higher at 86%.

F3 75% 54% 50% For Flatman the pass rate story is

‘Make yourself indespensible’ It is not enough for bookkeepers and accountants to stay relevant – they must now become indispensible, says Sage Global Vice President Jennifer Warawa (pictured).

A key speaker at the ICB’s Bookkeepers Summit, Warawa explained if you work in practice you have to become the one person your clients

can’t live without. To achieve this bookkeepers and accountants must embrace the cloud and technology, and become strategists.

You also have to stay informed about current trends and use networking events to understand how best practice is

The South East CIPFA Student Network is organising a revision event for Strategic level students to take place at CIPFA HQ, Mansell Street, London (near Aldgate and Liverpool Street stations) on 25 October from 5–7pm. The event is free and open to all students. It offers

the chance to discuss the SCS advance day materials and SPF topics with other students. Soft drinks and pizza will be provided. It is free, but if you would like to attend email southeaststudent@cipfa.org to

Free revision sessions at CIPFA HQ

Which accountancy firm is best?

So who is the best accountancy firm to work for? Well, PwC was recently named the UK’s leading graduate employer for the 13th consecutive year in The Times ‘Top 100 Graduate Employers 2016–17’.

PwC remains the country’s largest private-sector employer of new graduates and plans to take on 1,500 in 2017. Up to half of these will go into the accountancy practice side. The rest will join PwC’s consulting, actuarial, tax, 8

technology and legal businesses.

KPMG, Deloitte and EY all make into The Times’ top eight. Together the three will be recruiting 3,100 graduates next year.

However, when the UK’s top employers for school leavers was revealed one of the Big 4 accountancy firms didn’t even make it into the top 100.

Top of this list was MercedesBenz, followed by Schroders in second place. The best-placed

being developed.

She stressed that the robots are coming. IT research company Gartner has predicted, for example, that by 2018 three million workers globally will be supervised by a ‘robo-boss’. Another Gartner prediction is that by 2020 customers will manage 85% of their relationships with an enterprise without interacting with a human.

accountancy firm was Smith & Williamson at number 15. Mazars came in at number 21 ahead of EY at 23. PwC just about scrapes into the top 50, at 49.

Crowe Clark Whitehill, MHA MacIntyre Hudson, RSM and Grant Thornton all make the list ahead of Deloitte, who came in at number 78. But we couldn’t find KPMG anywhere on in the top 100.

The list was compiled by AllAboutSchoolLeavers.co.uk.

register your interest.

Similar events will be held in Manchester (5 November) and Birmingham (date TBC, but likely 25 or 26 October). For more details contact csn@cipfa.org.

Premier winners land top prizes Not one but two AAT PQs have won Premier Training’s annual sponsorship award. Both Lorna Phelps and Sonal Vyas will receive free access to Premier’s awardwinning e-learning study resources, a free iPad 4 and have all their AAT membership and subscriptions fees paid. AAT assessment and venue administration fees will also be picked up by Premier.

A runners-up prize went to Esmee Lobley.

PQ Magazine November 2016

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PQ news

PREM SIKKA The UK should copy the SEC’s vigilance The US regulatory ‘sheriff’, the Securities Exchange Commission (SEC), is not happy that some accountants continue to play fast and loose with auditing and accounting rules. In 1973, 37 cases were brought against accountants compared with 76 in 2015. The numbers are expected to increase in 2016. Most recently, the SEC fined Ernst & Young $9.3m for violation of auditor independence rules which forbid personal relationships between management at audit clients and personnel conducting the audit.

Previously, Grant Thornton paid a penalty of $3.5m for ignoring red flags and frauds risks at two firms. BDO paid $2.1m for dismissing red flags and issuing false and misleading unqualified audit opinion. However, the same regulatory vigilance is not evident in the UK. HBOS was bailed out by taxpayers in 2007 and following pressure from the Treasury Committee, the Financial Reporting Council (FRC) only began an investigation in June 2016. BHS saw losses of over £416m from 20092014 and had negative equity for 2012-2014. Its parent company also had negative equity. Between 2009 and 2014, auditors collected £2.282m in audit fees and £9.04m consultancy fees. BHS always received an unqualified audit opinion. In June 2016, following pressure from parliament, the FRC launched an investigation. A vigilant accounting ‘sheriff’ provides firms economic incentives to improve compliance. The UK does not set a good example. n Prem Sikka is professor of accountancy at the University of Essex

There were no fewer than 15 special resolutions submitted to the recent ACCA agm from member Andrew Lin. We think it is a record!

Two resolutions centered on the ACCA qualification. The first (resolution 6) said that emerging industries, such as mobile internet and Fintech, needed to be introduced into the syllabus. The second (10) said that “consultation to the members shall be carried out… when evaluating qualification exam structure adjustments, exemptions, mutual recognition agreements and any other programme that lead to cancellation or exemption of any paper at current professional level.”

Council rightly told members to vote against these and the other resolutions. It pointed out that any

decision to re-design the syllabus or make a major change is only undertaken after full and

comprehensive consultation, and would then be approved by ACCA’s council.

Mazars recruits 170 new trainees Mazars has announced it has taken on just over 170 trainees this year.

The new joiners will be working across the firm in audit, tax, financial planning, consulting and forensic accounting. The majority of the PQs will be joining teams in London, Milton Keynes,

Birmingham, Sutton and Leeds.

Although the number is slightly down on the 2015 ‘bumper’ recruitment figure of 200, it is still well above the 140 trainees recruited by Mazars in 2014, and

New Welsh training centre CIPFA has joined forces with Cardiff and Vale College to create a new CIPFA Cardiff training centre.

Students from NHS Wales, the Welsh Government and a number of local authorities are among the first to begin the rigorous three-year professional course taught at the new training centre. The centre will also complement online training services that are already used to support part qualifieds.

City of Cardiff Council’s Christine Salter said: “This represents a unique opportunity, not only to improve public financial management in Wales, but also for organisations to unite and support the Welsh public sector finance community.”

PwC sees growth For the second consecutive year PwC UK has reported double-digit revenue growth.

Revenues grew to a record £3.44bn for the year ended 30 June 2016, up 11% of last year. But distributable profit per partner was down 5% to £706,000, due to the firm’s continuing strategy to invest in ‘people and technology’. This is a 12.8 multiple of average employee pay and bonus. All PwC’s core businesses – assurance, tax, deals and consulting – delivered good growth. Consulting saw the biggest rise at 26%.

Deloitte unveils bitcoin ATM Deloitte’s Toronto office is now the proud owner 10

Resolution record for ACCA’s agm?

of its first bitcoin ATM. The Toronto office is also home to Deloitte’s Rubix blockchain division, and the ATM offers bitcoin to both employees and the general public. Rubix strategy director IIiana Oris Valiente says: “We see this as being an important milestone for us as an organisation. It’s a move to improve accessibility and hands-on learning as a first step towards greater blockchain adoption.”

EY’s transgender initiative EY has launched an internal guide on gender identity, expression and gender transition to support its transgender community. The guide contains information and advice on how best to support people, wherever they may be on the spectrum of gender identity, and those

120 total for 2013.

Mazars senior partner Phil Verity (pictured) said: “We really value our trainees and want their time with us to count.” He pointed out that Mazars was recently recognised as an outstanding employer for trainees, being ranked second in the list of best accounting firms ahead of the Big 4, BDO, Grant Thornton and RSM.

Young star: ICAS has chosen CA Rimla Akhtar as the most inspiration role model for other young business professionals. Akhtar sits on the council of the Football Association and was last year awarded the MBE. She was presented with the prestigious ‘One Young CA’ award for 2016 at a recent dinner. She will now represent ICAS at the One Young World Summit in Ottawa, Canada going through gender transition. EY’s Maggie Stilwell said: “We want our people to feel they can be themselves at work. The guide helps to empower our people to express their individual gender identities with confidence and is another milestone on our mission to be the most inclusive organisation to work for.”

16-24 year olds ‘deserve fair pay’ New National Minimum Wage rates for 16-24 year olds came into effect on 1 October.

KPMG’s Guy Stallard said low pay blights the prospects of the young and some 72% of 1821 year olds earn less then the Voluntary Living Wage (paid at £8.25 nationally and £9.40 within London). KPMG pays the Voluntary Living Wage.

PQ Magazine November 2016

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PQ news

CARL LYGO A matter of life and death

Weighty matters are on my mind this month as I began yet another diet.

This year for the first time ever there are more obese adults in the world than underweight people. Research published in The Lancet found from 1975-2014 obesity rates in men tripled and more than doubled in women. Obesity is now the most significant cause of death in Europe and North America after smoking.

Public Health England (PHE) estimates that lifestyle illnesses are costing the NHS £11bn a year.

Illnesses such as type 2 diabetes, cancer, lung and heart disease – which can be related to lifestyle choices such as diet, exercise, alcohol and smoking – are claiming lives at an alarming rate. Earlier this year, hospital leaders in North Yorkshire announced that patients with a body mass index (BMI) of 30 or above will be barred from non-life threating routine surgery for up to a year to help manage costs to the NHS. I have fully invested in my step counting, heart monitoring wearable technology and from the comfort of my sofa I have watched a number of TV shows such as ‘The biggest Loser’ and ‘Obese: A year to save my life’. I am ready for the big challenge.

Having invested even more money in a few books on weight loss I soon became engaged in the debate about carbohydrates and insulin. One thing is for certain, the diet industry is big business and I have certainly lost a few hundred £ – now to get stuck into the lbs. n Professor Carl Lygo is chief executive of BPP

DON’T GET TOO CLOSE! EY has agreed to pay a whopping $9.3m to the US Securities and Exchange Commission to settle charges that two of its audit partners “got too close to their clients on a personal level and violated rules that ensure firms maintain their objectivity and impartiality during audits”.

SEC investigations discovered that one senior partner, Gregory S. Bednar, on an engagement team for the audit of a New York-based public company, maintained an improperly close friendship with its chief financial officer. Bednar and the company’s CFO stayed overnight at each other’s homes on multiple occasions and travelled together with family members on overnight trips with no valid business purpose, exchanging hundreds of personal texts, emails and voicemails during the auditing periods.

Certain EY partners became aware of Bednar’s excessive entertainment spending but took no action to confirm he was complying with his independence obligations.

Both Bednar and EY have consented to the SEC order without admitting or denying the findings.

The firm agreed a sanction of $4.975m and Bednar, who has left EY, must pay $45,000.

Meanwhile a different partner,

Pamela Hartford, caused auditor independence rule violations at EY from March 2012 to June 2014 when she maintained a romantic relationship with financial executive Robert Brehl while she served on the engagement team auditing his company. In this case, EY agreed to a $4.366m sanction and Hartford and Brehl agreed to pay penalties of $25,000 each. Hartford no longer works for EY.

CBE sessions set to increase for ACCA December sitting

Top of the class: HTFT’s Reena Mehta-Jagatia, a P2 worldwide prizewinner, celebrates with the ACCA’s Linda Hanson (left) and HTFT’s Clare Finch. Find out how the group finance accountant spends her days on page 34

Following the overwhelming success of the CBE pilots at the September sitting the ACCA is planning for a much larger uptake this December.

In all, around 250 students opted to sit their F5 to F9 exams via a computer terminal.

PQ magazine spoke to the team who are implementing these new exams, and they are expecting candidate numbers to grow by four or five fold this sitting.

The first CBE exams were obviously closely monitored, and students seemed to love the intuitive and easy-to-use features. Many students who previously worried about their poor handwriting were particularly ‘singing the praises’ of the new CBEs. The number of centres offering CBEs has expanded. For December there will be 10 UK locations where CBEs will be ‘available’, up from two in September. The UEA and Pakistan are also offering the exams for the first time, too.

In brief Great AQ2016 giveaway The PQ magazine has joined forces with First Intuition to give away no fewer than eight AAT AQ2016 courses for level 2. We have five AAT online level courses and three live online courses up for grabs. All we need is your name and a contact email. Go to page 28 for all the details.

ACCA/ICJCE collaboration ACCA has teamed up with ICJCE to help create the next generation of financial 12

professionals for Spain’s growing economy. The two will work together to promote the training of university students and to develop and promote the ICJCE business school model.

stark contrast to a recent survey that revealed 58% of UK adults are worried about the impact of robots.

Some 41% told researchers that they will destroy humanity! See page 18 for more.

Rise of the machines CIMA PQs are not afraid of the ‘rise of the machines’ and 71% believe more automation in their business will be a good thing overall. Well over half, 58%, believe artificial intelligence (AI) will lead to more efficient companies. This is in

IASB amends IFRS 4 The International Accounting Standards Board has issued amendments to its existing insurance contracts standard, IFRS 4. This addresses concern over the implementation of the new financial instruments standard, IFRS 9 and

the temporary volatility in reporting results.

Free ACCA webinars What are you doing on Friday 21 October at 12.30pm? If you are an ACCA studying F5 – P7 then you should be watching the ACCA webinar on revision techniques.

BPP’s head of ACCA programmes, Nicola Dean, will offer advice of making the most of the time you have before the exam, sharing her tips. There is also a mind-mapping seminar on 9 November.

PQ Magazine November 2016

Accountancy career opportunity:

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PQ ACCA qualification changes

ALL CHANGE AT ACCA Alan Hatfield outlines changes to the qualification designed to keep it both relevant and fit for purpose

A

t ACCA we know what a milestone it is when, after years of dedicated study, you finally get to write those four letters after your name.

Speaking with many of those who have qualified over the years, I’ve learned that one of the things that makes it such a hugely satisfying achievement is just how challenging it is. The great US inventor Thomas Edison said that there are three great essentials key to achieving anything worthwhile. The first is hard work; the second, sticking to it; the third is good, old-fashioned common sense. He might have been referring to inventing the light bulb when he said this, but he could just as easily have been talking about achieving his ACCA membership!

It’s the rigour of the ACCA qualification that makes it such a milestone to have passed, and it’s also what makes it so attractive to employers. They know when they see those letters after your name that they are hiring someone who knows what it takes to achieve something worthwhile.

Continued evolution In order to make sure that the ACCA qualification continues to challenge you – the ACCA members of the future – we are constantly challenging the ACCA qualification itself. To stay relevant, it simply cannot stand still, and its continued evolution is what keeps it relevant. That’s why through our history we’ve stayed ahead of the curve in developing the next generation of professional accountants with the skills the world needs.

The latest stage of that evolution began back in 2014 when we kicked off a huge research project involving members, employers, education providers and regulators around the world. The findings of this work, which we called ‘Professional accountants – the future’, has already supported many significant innovations to the ACCA qualification that are already in place. For example, our innovative Knowledge exams that test early workplace application and our new Skills exams that use real-world technology and challenges. Or, equally, our revamped practical experience requirements and our market-leading integrated BSc and MSc degrees.

Now we are ready to unveil the latest developments to the final level of the ACCA qualification – namely, the new Strategic Professional level and our new Ethics and Professional Skills module.

With the Strategic Professional level, we’re setting a new standard by fully integrating deep, broad and relevant 14

Hatfield: ‘it’s the rigour of the ACCA qualification that makes it such a milestone to have passed’

technical expertise with ethics and professional skills. Because every element has a real-world focus, our students will be prepared to handle the challenges they’ll face in the workplace.

The result is strategic, forward-thinking professionals equipped with the unique blend of skills needed to hit the ground running – and add immediate value to their employers. The Strategic Professional level is benchmarked at Master’s level on a number of education frameworks.

Part of this evolution is the Strategic Business Leader – a truly innovative case study. In it, real-world scenarios are used to set challenges that require students to blend technical, professional and ethical skills in the evaluation, synthesis and presentation of their responses. Mirroring the workplace, students must present their answers to the standard employers expect from future business professionals.

Secondly, we have introduced Strategic Business Reporting, where we take the qualification’s current holistic view of reporting to a whole new level. The underpinning principles of corporate reporting remain, but these are enhanced by giving students the skills needed to confidently speak the language of business and explain reports to a wide variety of stakeholders.

You’ll be glad to know that our Options exams remain available, offering the unique opportunity to specialise in areas

of greatest relevance to a chosen sector or career path. The advanced specialist expertise gained builds on the broad, cross-sector relevant, technical foundation that all ACCA students acquire.

The ACCA qualification already includes the world’s first Master’s degree integrated with a professional accountancy qualification. Delivered in partnership with the University of London, students can follow the Master’s route while completing their Strategic Professional exams or acquire the Master’s degree post-ACCA Qualification.

With our new Ethics and Professional Skills module, we will be the first to deliver a unique module that focuses on developing the complete range of professional skills employers have told us they need.

Building on our pioneering Professional Ethics module, it continues to develop the vitally important ethical behaviour and judgment, complementing this with the broader communications, commercial, innovation, analysis and evaluation skills vital for career success.

Edison invented the light bulb because he looked at the way things were done and challenged himself to find a better way. We like to think everyone in the ACCA family – students, members, staff and the ACCA qualification itself, thinks in exactly the same way. PQ • Alan Hatfield is executive director of strategy and development at ACCA PQ Magazine November 2016

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PQ Awards 2017

TIME TO SHINE Do you know someone who deserves one of our coveted awards? Well now is the time to get nominating!

D

o you have the ‘X Factor’? Or perhaps you work with a fellow PQ who stands out? Well, isn’t it time all your (or their) hard work and dedication was truly recognised?

We have the ideal way to show everyone your true worth – the PQ Awards.

With the help of our judges you can go straight from ‘Boot Camp’ to the final of the PQ magazine Awards for 2017.

But as we always say, you have to be in it to win it, so come on, get nominating!

London’s Café de Paris has been booked for 21 February next year, and if you are shortlisted you will get an invite.

To enter couldn’t be simpler. All you have to do is write 250 words and provide any

CATEGORIES n PQ OF THE YEAR n NQ OF THE YEAR n DISTANCE LEARNING STUDENT OF THE YEAR

supporting evidence (separately) on why your nominee should win one of our stunning ‘PQs’.

You can find the nomination form at www.pqmagazine.com by clicking the ‘pq awards’ bar. Alternately, just email us your entry directly, making it clear which category your nominating for. It is important that we get all your details too, because we may need to invite you to the Cafe de Paris.

Once you have everything ready send it to awards@pqmagazine.com, or you can post your form to: The Editor, PQ magazine, 4th Floor, Central House, 142 Central Street, London EC1V 8AR. Deadline for all nominations is Friday 16 December 2016. PQ

DISTANCE LEARNING STUDENT OF THE YEAR

n ACCOUNTANCY APPRENTICE n STUDENT BODY OF THE YEAR n ACCOUNTANCY BODY n ACCOUNTANCY COLLEGE – PUBLIC SECTOR n ACCOUNTANCY COLLEGE – PRIVATE SECTOR n ONLINE COLLEGE

2015 winner Esther Alum

n LECTURER – PUBLIC SECTOR n LECTURER – PRIVATE SECTOR n STUDY RESOURCE n INNOVATION IN ACCOUNTANCY n BEST USE OF SOCIAL MEDIA n TRAINING MANAGER / MENTOR n ACCOUNTANCY TEAM n ACCOUNTANCY PERSONALITY n EDITOR’S SPECIAL AWARD

Mathura Atputhalingam (pictured above) won the ‘PQ’ in this category last year. This Sri Lankan student had a huge story to tell. Through it all learning has been her real saviour and she is taking a degree and studying the early papers of the ACCA at the same time, safely here in the UK.

2014 winner Donna Smith

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16

PQ Magazine November 2016

AAT fast track The ideal route to Chartered Public Finance Accountant status The CIPFA Professional Qualification is your fast track to professional accountancy – developing your skills and boosting your career prospects.

Here’s what we have to offer if you’re AAT Level 4 qualified: Four free exemptions – only eight modules to complete* Reduced Practical Experience Portfolio (PEP) – 200 days compared to 400 Flexible learning – online, face-to-face, distance or blended learning Internationally recognised status with CPFA designation Claim your free exemptions now and find out more about our AAT fast track route: www.cipfa.org/aat T: 020 7543 5600 E: students@cipfa.org

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PQ the workplace

RISE OF THE MACHINES Do CIMA PQs feel under threat from new technology? A CIMA survey found out, writes Tony Manwaring

E

ver since the printing press put scribes out of work, it has been argued that automation steals jobs. With new developments in computers and artificial intelligence, the challenge has only intensified: in a 2013 study, Benedikt Frey and Michael Osborne estimated that 47% of US workers were at high risk of losing their jobs to machines and programs.

So where does this leave management accountants? Is the discipline irreplaceable, or will all future management information-gathering and decision-making support be provided by a laptop?

We wanted to find out what the next generation of management accountants, those at the heart of creating and preserving value in the future, think about the rise of machines and asked 3,029 people studying the CIMA qualification.

We found that the next generation of management accountants have an optimistic view. Some 71% of respondents support the idea of more automation in their businesses if it saves time, money and helps with indecision.

When asked about the future effects of automation, 58% of polled students were of the opinion that this would lead to more efficient companies.

What is very important in this context is that our students nevertheless have a healthy distrust, as almost half of the participants see a dangerous over-dependence on technology as a likely scenario. This is not surprising as a quarter of polled students stated that they have experienced a negative impact due to wrong decisions based on automation and technology in the past five years.

While 42% regard a general up-skilling of the workforce because of the need for more advanced computer skills as a possible scenario, 40% also think that we might expect a better work/life balance. After all, computers could take over jobs while humans continue to reap the profit. Nevertheless, 38% also think that there might be a loss of jobs leading to greater inequality in society.

Changes for management accountants It is clear that technology will change the profession. But how?

Some 78% of our polled students believe that

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the human gathering of management information will become redundant, while 58% believe that data interpretation will become steadily automated. Interestingly, both these analytical tasks were judged as more likely victims of automation than auditing (46%). Only five per cent of respondents were of the opinion that no aspects of their profession will be automated in the future.

However, our students think that robots and artificial intelligence cannot replace everything – especially not the key management accountant job of ensuring value creation. ‘Value’ is an essential but nonetheless intangible concept, and robots are perceived to fare badly at it: 38% of respondents were of the opinion that new technologies will never be able to understand and drive value to the same extent that humans do. Some 41% also think that the human factor should always be included for a company – or a finance function – to drive value.

How to stay relevant We would advise treating advances in technology as an opportunity rather than a threat. Regard these developments as a roadmap for your continuous professional development – areas you need to study to ensure you can exploit new technology rather than being sidelined by it.

We are convinced that there will always be the need for the human factor management accountants bring.

Companies need a firm grasp of both tangibles and intangibles to make sure that decision making is measured, rational and guided by a focus on value. In doing so, they help their businesses take advantage of the opportunities ahead and further drive success.

For now and for the foreseeable future, and for a long time to come, it is people that unlock this value, be it tangible or intangible. PQ • Tony Manwaring is Executive Vice President – External Affairs at CIMA

PQ Magazine November 2016

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PQ AAT new syllabus

AQ2016: WHAT

Crystal Haygreen and Nick Craggs outline the major changes to the AAT qualification brought about by the introduction of the new AQ2016 syllabus

T

he AAT accounting qualifications are highly regarded for giving students the core technical skills they need to embark on a career in finance. For some students it is an end in itself, for others it can act as a springboard into other professional accountancy qualifications. To make sure they continue to be aligned with the needs of employers and the ever changing working environment the AAT update their qualifications every three years. On the 1 September of this year the latest new syllabus was launched.

The key changes in AQ2016 are: • A change to the qualification names.

• The introduction of synoptic assessments at each level.

• Grading of student performance.

• Re-sit restrictions that will affect some students.

New AQ2016 qualification names There are still three qualifications, but with new names: • AAT Foundation Certificate in Accounting (was previously AAT Level 2 Certificate in Accounting).

• AAT Advanced Diploma in Accounting (was previously AAT Level 3 Diploma in Accounting).

• AAT Professional Diploma in Accounting (was previously AAT Level 4 Diploma in Accounting).

What are the new synoptic assessments?

The synoptic assessments are a new element at each level of AQ2016. As well as attempting individual assessments in most of the units at each level, students will need to complete a synoptic assessment before moving on to their next level. A synoptic assessment can be thought of as an ‘end-of-level-test’ of the knowledge gained throughout the level which will mirror what employers will want from potential employees in the workplace. This will make retaining knowledge of units already passed far more important for students since the tasks in the synoptic assessments will be similar in style to tasks that have already been seen in the individual unit assessments but applied to new content.

Some units will only be assessed within the synoptic assessment and will not have an individual unit assessment of their own.

The duration of the synoptic assessments will vary depending on the qualification: • Foundation synoptic assessment: two hours 20

• Advanced and Professional synoptic assessment: three hours Students should sit the synoptic assessment for the Foundation and Advanced qualifications after completing all other units in the level. For the Professional qualification students can sit the synoptic assessment after completing the three compulsory units.

Synoptic assessments for the Advanced and Professional qualifications will be available to sit at six fixed times of the year and they will have an element of human marking, so it will take up to six weeks for students to receive their result.

How the new grading system works Another major change with AQ2016 is that grading will be introduced for the new qualifications. When students complete each full level they will be awarded a final grade for the level. All unit and synoptic assessments within the qualification will count towards this final grade, and depending upon the level involved each unit and synoptic assessment will make up a different proportion of the overall qualification grade.

Students will continue to be awarded ‘competent’ or ‘not yet competent’ for each individual assessment they sit, but will now receive a percentage mark for each unit. These marks achieved will contribute to the overall grade for the qualification.

The grades will be: • Distinction 90-100% • Merit 80-89% • Pass 70-79% • Unclassified 0-69% (failure to pass one or more assessment).

Students will be able to resit assessments if they wish to improve their mark for a particular unit and their highest mark will count towards their final grade. It is worth noting that grades can’t decrease as a result of a resit.

What are the resit restrictions?

Firstly, it’s probably easiest to look at who will not be affected by the new resit restrictions.

If a student falls into one of the following categories they will not need to worry about any restrictions to the number of times they can sit an assessment: • They are an apprentice.

• They are aged 19 or over.

• They are studying level 4.

• They are completing under AQ2013.

• They live outside the UK. If a student is not in one of the above categories they will now be allowed a maximum of two attempts for each individual assessment or synoptic assessment within a 24-month study programme period. The 24-month re-sit restriction period will take effect from the 1 September prior to when the student registers with the AAT. All re-sit restriction periods run from 1 September for 24 months.

If a student has two attempts at a particular assessment within the 24 month study programme and is unsuccessful at both, then they will need to wait until after the end of the study programme period to sit again.

So, should students stay on AQ2013 or should they transfer to AQ2016?

If a student is part way through a level they can choose to complete the level under the old AQ2013 syllabus or transfer to AQ2016.

What do students need to consider?

First up, will their training provider support them to complete under the old syllabus?

If they are attending a classroom course they can speak to their training provider to find out whether they are offering courses and support for the old and new syllabus.

Distance learning students should look at the materials they have. If they are for AQ2013 the student may need to purchase new books and course materials if they wish to switch to AQ2016.

Secondly, which units have they passed already?

Existing passes for some units will not transfer PQ Magazine November 2016

AAT new syllabus PQ

T’S CHANGED?

attempts at each unit in a 24-month period.

If students have been studying their current level for some time, they should bear in mind that under the new syllabus the synoptic assessment will be assessing a number of units.

For example, if they sat Accounts Preparation some time ago and then decide to transfer to AQ2016 they will not need to resit Accounts Preparation, but the knowledge from this paper will be tested as part of the synoptic assessment.

Under the new syllabus there are set times of the year that the final synoptic assessments are available which may prove inconvenient for some students.

To stay on AQ2013 until December 2017 students must: • Not let their AAT membership lapse.

• When booking their assessments they must make sure they inform the assessment centre it is for the AQ2013 syllabus.

• When requesting new material from their training provider they should specify that they would like AQ2013 material. They can check on MyAAT which qualification they are registered to.

• Complete their level before 31 December 2017 at which point no further assessments under AQ2013 will be available.

to the new syllabus. At level 2, a pass in the Working Effectively unit under AQ2103 receives no credit under AQ2016, so students could end up sitting this unit again as part of the new synoptic assessment. Similarly at level 3, neither the Spreadsheets unit nor the Professional Ethics unit transfer over, and at level 4 the Internal Controls and Accounting Systems project will not transfer over. Other units passed under AQ2013 will receive credit under AQ2106.

Benefits of switching to AQ2016 Students will complete the most current qualification and benefit from knowledge of the most up-to-date syllabus.

The new grading system will allow stronger students to show potential employers that their abilities are better than merely ‘competent’.

Students won’t need to worry about completing their level by the end of December 2017 when AQ2013 will disappear.

At level 3 there is one less assessment compared with AQ2013. This is because the Spreadsheets and Professional Ethics units are both assessed as part of the synoptic PQ Magazine November 2016

assessment rather than as two separate assessments.

At level 4, the new synoptic assessment means that students no longer need to complete the Internal Controls and Accounting Systems project. Over the past few years many students have found this project quite daunting and it can take many months to complete. The new synoptic assessment will only assess material that students are already familiar with.

All units will be assessed by the AAT rather than by training providers ensuring consistency in the quality and timeliness of the assessment and results process.

Benefits of staying with AQ2103 syllabus There are plenty of resources available to support you for AQ2013 assessments, with blogs and lectures available widely online. It can also be good to ‘stay with what you know’ in terms of how the assessments work and how to prepare.

Students may have colleagues who have already completed under AQ2013 who are helping and advising them.

There are no restrictions on resits. The new syllabus will restrict some students to two

Registering for the new AQ2016 syllabus If a student registers with the AAT after 1 September 2016 they will be automatically registered to the new AQ2016 syllabus.

Training providers can transfer existing students from AQ2103 to AQ2016 if they are asked to.

At First Intuition we are excited with the changes being introduced for AQ2016 and think that they will be of great benefit to students and their employers in coming years. However we believe that students should be allowed maximum flexibility in their study choices so we are going to be supporting both AQ2013 and AQ2016 over the coming months.

Some key dates to be aware of • 1 September 2016 – The new AQ2016 was launched. All new/lapsed student memberships with the AAT will be AQ2016 from this date.

• 1 April 2017 – We would recommend this date as a cut-off for anyone starting a new level under AQ2013 as it would give them nine months to complete and pass all exams (although even nine months to complete a level will require a lot of hard work!).

• 31 December 2017 – This is the last date students can take assessments for the current AQ2013 qualifications. We would recommend students who stay on AQ2013 sit their last exam at least eight weeks before this date in case they need to resit. PQ • Crystal Haygreen and Nick Craggs, First Intuition 21

PQ CIMA F3

A formula for success Andrew Howarth, Kaplan’s CIMA Content Specialist, explains the CIMA formula sheet for CAPM questions

O

n the CIMA F3 Financial Strategy formula sheet, there are three formulae grouped together under the heading CAPM (an abbreviation of Capital Asset Pricing Model). Specifically:

CAPM k = Rf + [Rm – Rf]ß

ßeu = ßeg

+ ßd

ßeg = ßeu + [ßeu – ßd] In order to answer CAPM exam questions accurately, a key skill is to be able to plug given numbers into these formulae and rearrange them if necessary.

However, to make sure that you pick up the correct figures in a question, it is also vital that you understand the meanings of the formulae, and the terms within them.

The basic idea of the CAPM When making investment decisions, the required return is always assessed in relation to the level of risk associated with the investment.

For example, investing $1,000 in a bank deposit account would probably give a very low rate of return, but the level of risk exposure is also very low. In comparison, $1,000 invested in shares on the stock market could give a much higher rate of return, but for a much higher level of risk.

The main CAPM formula calculates the required level of return from an investment, based on a quantified measure of risk, the beta factor (ß). The formula is: k = Rf + [Rm – Rf]ß where k is the required return, Rf is risk free return, and Rm is the average return on the overall market.

In exam questions, Rf and Rm will be given (note that in some cases the question will refer to the “market risk premium”, which is simply [Rm – Rf]).

Therefore, it should be simple to derive the required return using the CAPM equation as long as you pick up the correct beta factor to plug into the equation. Unfortunately this is not as simple as it sounds. The correct beta factor will rarely be given directly in an exam question, so it is vital that you understand how to adjust given beta factors (using the second and third equations on the formula sheet).

Before considering how to adjust beta factors, it is important to understand why the adjustments are necessary.

Quantifying risk In attempting to quantify risk, we first split overall risk into systematic and

unsystematic components. Systematic risk is the risk caused by general, macro-economic factors, such as recessions, interest rate changes and exchange rate fluctuations. The impact of these factors will differ from one company or industry to another, but there will be some impact on all companies and all industries.

Unsystematic risk is the risk caused by company specific factors, such as the competence of management, and the quality and range of a company’s products. These factors are very specific to each company, so a well-diversified investor with investments in many companies can reduce the impact of unsystematic risk to a negligible amount (ie effectively to zero). Therefore, as long as we assume that investors are well-diversified, we can assume that only the impact of systematic risk is relevant when attempting to quantify risk in the CAPM formula.

Systematic risk is measured by the beta factor.

Terminology There are two types of beta factor, the asset beta (or ungeared beta, ßeu) and the equity beta (or geared beta, ßeg). The asset beta measures just the impact of systematic business risk, on the assumption that a company is all equity financed, whereas the equity beta measures both systematic business risk and the risk associated with a company’s gearing.

The second and third formulae on the formula sheet can be used to convert an asset beta into an equity beta (or vice versa).

Note that the formulae also refer to ßd, the debt beta, which measures the risk associated with the company’s debt. In most cases you should assume that this is zero, unless the question specifies otherwise.

Simple example XYZ is a geared company with a 60:40 equity to debt ratio by market value. It has an asset beta of 1.20 and pays corporate income tax at the rate of 20%. What is the return required by the company’s well-diversified equity investors on the assumption that the risk free rate of return is 5% and the market risk premium is 6%?

Answer to the example First, use the third formula to convert the given asset beta into an equity beta: ßeg = ßeu + [ßeu – ßd] ßeg = 1.20 + [1.20 – 0]

= 1.84

Next, use the CAPM formula with this equity beta to derive the required return from the equity in this geared company: k = Rf + [Rm – Rf]ß k = 0.05 + 0.06 x 1.84 = 0.16 (16%) Conclusion This shows that the calculations involving the CAPM are relatively simple, as long as you pick up the correct figures from the question in the first place and are then confident enough to manipulate the formulae. PQ

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PQ ICAEW spotlight

Your Partner in Learning T

he ICAEW recognises the level of support that you, as students, need in order to study for the ACA qualification.

We work with tuition providers and higher education institutions from all over the world to provide the resources and guidance you need for your exams.

The scheme is based on a set of core principles and is set out into two parts – professional education providers and higher education institutions. Partner in Learning status is awarded to organisations that can demonstrate their commitment to ensuring consistency in the quality of tuition provision for ICAEW qualifications.

If you see this logo on any tuition provider or on higher education institution’s marketing material, this means they are an ICAEW Partner in Learning.

ICAEW works closely with a number of higher education institutions to provide unique options to students. Institutions that engage with ICAEW through activities such as graduate recruitment, credit for prior learning, embedding ICAEW qualifications and ACA modules into university programmes, and purchase or use our learning materials can apply for recognition as an ICAEW Partner in Learning.

24

Professional education providers offering tuition for ICAEW qualifications can apply to join the Partner in Learning scheme also.

These are also known as tuition providers and many of you will be studying with a tuition provider to progress through your ACA exams. We review a sample of tuition centres on an annual basis to ensure the core principles are being maintained, and that you have the resources you need to complete your studies.

Each year, ACA tutors and academics from around the world attend conferences held at Chartered Accountants’ Hall in London. At the tutor conference, tutors receive updates on the

ACA, syllabus and attend examiner-led workshops in the Advanced and Professional Level exams.

The higher education conference brings together all of our academic partners to network, debate and discuss opportunities and challenges within higher education. Workshops, research and ICAEW updates are all part of the day and it is important to maintain an ongoing dialogue between the academic and professional worlds for the benefit of students studying at university.

If you are looking for tuition for the ACA or ICAEW CFAB, the ICAEW website lists Partners in Learning and the type of tuition they offer, including classroom, online learning or one-toone study. Search for tuition providers near you at icaew.com/exams. If you are studying the ACA, as an ACA student with a training agreement, be sure to ask your employer on the tuition options available to you.

If you are interested in discovering how we work with different universities go to icaew.com/hei where you can find a breakdown of the support we provide each higher education institution on the Partner in Learning scheme.

Our dedicated student support team is on hand to talk through any questions you may have on tuition, call +44 (0)1908 248 250 or email studentsupport@icaew.com PQ • Thanks to the ICAEW for this article

PQ Magazine November 2016

budgeting PQ

M

uch has been written in the past few weeks about the BBC’s loss of the Great British Bake Off to Channel 4. Why did Channel 4 pay some £25m a year for the show’s rights? Why didn’t the BBC bid higher? For the answers to these questions we need to look at the organisations’ respective budgets, and what a budget needs to achieve.

Quite simply a budget is a quantitative expression of a plan for a defined period of time. It is safe to assume both the BBC and Channel 4 will have prepared a budget outlining their planned expenditure on programming. In the negotiations to retain this programme, the BBC were some £10m short of the price required by the ‘GBBO’ production company. It is a sizeable sum and clearly the BBC were unable to find that additional amount in their budget without impacting other aspects of the business.

To understand why the BBC refused to increase their bid we need to appreciate the objectives of budgeting.

A useful way of remembering these is the mnemonic CRUMPET: • Coordination – budgeting encourages managers and executives within a company to coordinate and keep costs manageable throughout the fiscal year.

• Responsibility – this is delegated to individual managers within an organisation.

• Utilisation – the budget guides the decision-making process to ensure the organisation does not acquire resources in excess of their needs or financial limits.

• Motivation – by providing a target, employees may be driven to improve their performance.

• Planning – as the budget is a financial plan it forces managers to make better decisions.

• Evaluation – a manager’s performance is likely to be compared with the budgets as set, with bonuses and promotions dependent upon the results.

• Telling – this is a means by which the leadership team communicate their expectations to their management team.

Can you have your

cake and eat it?

Why did the Beeb lose ‘Bake Off’? Caron Betts exlains the budgetary reasons

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*T&Cs apply

If the BBC ‘found’ an additional £10m to fund GBBO it would mean a loss to another show or department. Even for a top hit like GBBO, the manager has a duty to control their own departmental costs, and they are unlikely to exceed their department’s programme budget if it would have a negative impact on the assessment of their personal performance.

The ACCA F5 exam not only expects the student to understand how the budgetary system fits within the performance management aspects of a

A QUICK LOOK AT...

This case remains the leading authority on the provision currently found in s122(1) (g) of the Insolvency Act 1986, which provides that a petition to wind up a company can be granted if it is “just and equitable” to wind up the company.

The defendant company (a carpet dealership) had been formed with the claimant and Mr Nazar (with whom he had run the business for some years as a partnership) as sole directors and shareholders. Soon after the company’s incorporation, Nazar’s son became a director and shareholder, and the Nazars excluded Ebrahimi from the management of the business.

Ebrahimi accordingly filed a winding-up petition PQ Magazine November 2016

business, but also how to select and explain appropriate budgetary systems for an organisation. This aspect of budgeting is examined in one of AVADO’s ‘Report to the Board’ features, where students are challenged to apply their learning to a business situation.

AVADO launched their groundbreaking, fully online ACCA courses earlier this year which give students complete flexibility to study whenever and wherever suits them. AVADO already has Gold Approved Learning Partner Status from ACCA due to the quality of learning and student support. PQ • Caron Betts is an ACCA tutor at AVADO

Ebrahimi v Westbourne Galleries Ltd. [1973] AC 360

under what is now s122(1)(g).

His petition was granted but the company succesfully appealed against this ruling, the Court of Appeal holding that a company could only be wound up on this basis if there had been wholly unreasonable conduct or bad faith on the part of the respondent. Accordingly, Ebrahimi appealed to the House of Lords.

His appeal was granted on the basis that, in the words of Lord Wilberforce, the words “just and equitable” ought to be interpreted so as to “give… them full force”.

This meant that in a ‘quasi-partnership’ company like Westbourne Galleries, the court were required to have regard to the interests of

the individuals behind the corporate form.

In these circumstances, the House of Lords took the view that the company had been formed on the basis of mutual confidence between the ‘quasi-partners’ (Ebrahimi and Nazar), and the breakdown of this, coupled with Ebrahimi’s inability to “take out his stake and go elsewhere” due to its being a private limited company, meant that it was just and equitable to grant the petition.

• Ross Fletcher is an AIA Achieve e-tutor. The AIA Achieve team is producing a series of ‘A Quick Look at….’ articles and more can be found on the AIA website: www.aiaworldwide.com/a-quick-look-at.

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PQ ACCA exams

WHAT THE EXA

Here’s what the ACCA examiners thought of your efforts for the June exams. Next month we will look at the September sitting – straight from the horse’s mouth F5 Performance Management The F5 examiner says you should start with section A, as this will “build your confidence before tackling the written questions”.

If you have gone over your allotted time you must move on and then come back at the end if you have time.

The examiner was disappointed with the lack of knowledge of the sales, planning and operational variances set in Q1. These are really useful in understanding a business’ sales performance. Q2 was all about the break-even point and the only tricky bit was the fixed cost line (part of it was semi-variable).

Q3 was a classic ABC question and most students did well here.

Q4 covered transfer pricing. The examiner is worried that some students are expecting parts of the answer to be more difficult than it was.

Finally, Q5 was a relevant costing question within the context of a shutdown decision. The examiner admits this was a trickier question than some of the others on the paper and required some thought before putting pen to paper.

F6 Taxation Q1 covered various income tax issues involving the taxpayer. Q2 was on quarterly VAT and generally answered well. Q3 covered CGT. Q4 was on IHT, and candidates found this a challenging question. IHT planning seems less well understood, said the examiner. So why is it advantageous to make a lifetime gift even if the gift was made within the seven years of death? The main advantage, says the examiner, is that the value of the gift is fixed at the time it is made so no IHT is payable on the increase

26

in value between making the gift and the time of death. Taper relief may also be available.

Q5 was the income tax question.

Q6 was the corporation tax question, involving a company, which had made a loss before tax for a three-month period.

F7 Performance Management Too many candidates are still stating the obvious when it comes to the interpretation question: “This year’s ratio is higher than last year’s” doesn’t go down well with markers. The examiner wants real interpretation and analysis.

Q1 required the calculation of extracts from the consolidated statement of financial position for goodwill, retained earnings and non-controlling interest. But beware, a number of candidates produced a full consolidated statement of financial position, which was not asked for and so merely wasted time!

For Q2 you had a short ROCE calculation and part b had four further ratios to calculate. Most students forgot to deduct the value of the assets held for sale from the denominator representing the capital employed.

Q3 asked for the preparation of the financial statements of a single entity from a trial balance with several adjustments.

F8 Audit & Assurance The examiner said the six written questions in section B tested the following areas: • Audit framework & regulation.

• Planning & risk assessment.

• Internal control.

• Audit evidence.

• Review & reporting.

The June report stressed that one mark is available for each well-explained issue in the scenario-based ethics questions. A candidate who identified an issue and stated the type of threat scored 0.5 marks, to be awarded the second 0.5 candidates had to explain why this caused an ethical problem.

June’s sitters seemed to struggle with

audit evidence. The examiner feels students must strive to understand substantive procedures. Learning a generic list of tests will not translate to exam success.

F9 Financial Management ACCA F9 candidates must take greater care when presenting answers to numerical questions in section B, says the examiner. It is also good exam technique to show all your workings, as marks can be gained for applying a correct method even when numerical errors are made. You have to label all workings. Remember to annotate all numerical values too, so use ‘m’ for millions and ‘$’ for currency.

Q1 came from the working capital management part of the syllabus. Some candidates were caught out with the fact you had to use 360 days in one year.

Candidates used 365!

Q2 looked at business valuation.

Q3 was on risk management.

Candidates need to understand the difference between bid and offer exchange rates and how they can be recognised.

Students liked Q4 on business finance.

Q5 covered investment appraisal.

P1 Governance, Risk & Ethics It is hard to give feedback of the P1 examiner’s post-exam comments. He does ask you not to be tempted to use bookwork type answers and reproduce remembered notes. Another worry appears to be the fact that candidates are spending too long on certain questions that they are ‘happier’ with. You have to answer all the questions to get the pass mark.

The big Q1 this time was based on the needs of the various stakeholders impacted by the development and the obligations of local government authorities in serving the needs of local taxpayers.

Q2 looked at an accountant who refused to attend a conference – so how important is CPD? Q3 looked at a independence and reports of thefts from the warehouse where

PQ Magazine November 2016

ACCA exams PQ

AMINERS SAY… the people ‘involved’ knew each other.

Q4 covered risk in this case for a group of coffee producers.

P2 Corporate Reporting The examiner says that often candidates’ answers reflect inexperience in the use of judgement in reporting under IFRS. To be successful in this paper you have to have an understanding of IFRS based on the Conceptual Framework, while developing the capability to make judgements. Students need to think critically about the subject.

The examiner wants candidates who understand the objective of financial reporting and the other main concepts.

Q1 generally requires candidates to prepare a consolidated financial statement. There could be a statement of cash flows. The examiner stressed that even the simplest of calculations should be shown.

Q2 and 3 have a very similar approach. Q2 normally has a theme and Q3 is normally based around a specific industry or setting.

Q4 is all about ‘current issues’.

P3 Business Analysis Candidates who add value to the information provided in the scenario will earn higher marks than those who simply repeat the information, said the examiner.

There is a worry that candidates are still reliant on a few key topics to pass.

Q1 looked at strategic choices and financing. We are talking Ansoff’s Growth Matrix, decision trees and project financing here.

Q2 centred on information systems and problems with controls.

Q3 was all about a new software package and learning from your mistakes!

Q4 Hurrah! Porter’s Diamond, always a popular option for candidates.

P4 Advanced Financial Management Candidates were reminded that they are required to demonstrate their ability to read and digest quickly, comprehensive and detailed questions, apply relevant knowledge and skills and to exercise professional judgement expected of a senior financial adviser.

Q1 asked candidates to consider an international capital investment decision and an adjusted present value. Part (B) asked candidates to discuss the impact of undertaking the project on environmental and corporate objectives.

PQ Magazine November 2016

For Q2 PQs were asked to undertake interest rate hedging using FRAs, futures and options. They were also asked to use value-at-risk methodology and look at departmental centralisation.

Q3 was on mergers and acquisitions.

Q4 asked for relatively simple valuation calculations.

If you want to pass at the ACCA P4 exam then you need to undertake “sustained study over a long period of time”, explained the examiner.

P5 Advanced Performance Management The examiner reiterated that good candidates distinguish themselves by being aware that if they come to this exam expecting to repeat memorised material they will score between just 20%–30%.

Q1 required an evaluation of the board’s performance report and two performance indicators. There was also a calculation of expected return of capital and explanation of how a new information system, would benefit performance.

Q2 asked for an assessment of the impact of a proposed BPR on operational performance. Students also had to look at the existing reward system and advise on improvements.

Q3 was a 25-mark question about ABC and ABM. This was the least popular question in section B. Q4 honed in on the use of economic value added and value-based management.

P6 Advanced Taxation (UK) You have to bring forward your F6 knowledge to this exam. If you really want to succeed in this exam then the examiner feels you have to practise the often more intellectually demanding section A style questions.

The examiner warned that timings of tax payments, particularly where an individual has commenced trading, is of considerable

importance in the real world and is examined and will continue to be examined regularly.

If looking at a change in accounting date, the examiner felt candidates should be thinking about whether profits are rising or failing in order to decide if the change will affect the level of taxable profits that year. They should also be thinking about the length of time between earning profits and paying tax on them.

Q1 concerned a sole trader and covered his income tax and NIC position as well as aspects of VAT. Part B concerned CGT and IHT where there were to be gifts before marriage.

Q2 looked at the various aspects of corporation tax and income tax.

Q3 asked candidates to look at the income tax implications of two alternatives for acquiring a new car and changing the accounting date of the business.

Q4 concerned a sale of loan stock, the tax treatment of interest paid on loans and the ability to carry back trading losses for relief in an earlier period.

Q5 looked at the tax implications of selling shares while not being resident in the UK and of the gift of a house.

P7 Advanced Audit & Assurance A disappointing exam with it being obvious that many candidates continue to not properly prepare for this wide-ranging exam. As a result many were unable to adequately apply their knowledge to answer the questions set. Too many candidates focused on the minutiae of a point and produced a list of everything they knew about a topic, whether relevant or not, very often missing the wider implications of the issue in hand. There was a clear lack of both auditing and financial reporting knowledge.

Q1 covered the use of analytical procedures at planning, identifying audit risks and ethics.

Q2 asked candidates to comment on the quality of the audit work performed and discuss the quality control, ethical and professional issues raised.

Q3 focused on forensic audit and the matters to consider prior to accepting a forensic engagement. It also looked at investigation procedures.

Q4 was looking for advice around the difference between an audit and a limited assurance review and providing non-audit services.

Q5 was the current issue question and looked at audit disclosures and their impact (particularly inadequate ones) on the auditor’s report – the least popular question in June! PQ 27

PQ CTA exams

Pass the CTA OMB Advisory exam Nitin Rabheru offers advice on how to pass the Taxation of Owner-Managed Businesses paper

Be prepared • Your revision should cover the breadth of the syllabus, as any topic can be examined and all questions are compulsory. Make sure you know the basics – the fundamental calculations, proformas, layouts and tax admin.

• Deal with those difficult topics you find problematic, such as partnership CGT and change of accounting date. When practising questions refer back to the study manual or contact your tutor for support.

• You need to ask yourself, have you made a real effort to understand all areas of the OMB syllabus, including the admin? For example, do you know the key tax differences between unincorporated businesses and companies with regard to loss relief, cash extraction options and owner exit?

Different business structures You need to have a good understanding of the tax implications that can arise under each of the different business structures. For example, in a close company scenario, the tax treatment relating to the provision of taxable benefits, loan advances and waivers will depend on whether the individual is an employee, shareholder or

PQ giveaway

To celebrate the launch of First Intuition’s new online learning platform we are giving away five AAT online level 2 courses and three AAT live online level 2 courses When AAT announced AQ2016 First Intuition took the decision that, rather than rebadge our AQ2013 material, we would rewrite all our course material and re-record all our online lectures, writes Nick Craggs.

Our course material follows the same format as before, with the course notes, slightly easier question bank questions, exam standard task bank questions and mocks, with every answer 28

law in relation to badges of trade, employment factors, definition of plant and machinery and revenue vs capital. Also highlight useful sections such as partnership CGT, successions, capital allowances and R&D. Give advice in the exam The examiners are not just looking for a display of knowledge – they want to see how well you can apply rules and conditions to a scenario.

Think about the tax impact on the business, state the relevant claims and elections as well as a suitable recommendation if relevant.

working shareholder.

The qualifying conditions for entrepreneurs relief vary significantly depending on who is making the material disposal. Sole traders and partners only need to be in business for 12 months. However, a shareholder will need to own 5% minimum in a trading company for 12 months whilst working for the company. The associated disposal rule only applies to partners and working shareholders.

Effective use of legislation and case law Ensure you have a good understanding of case

Scenario based revision You cannot pass the exam by just learning your notes or the study manuals. You have to develop your application skills by practising questions. I always recommend students prepare a revision folder split into different sections for each type of business structure.

For example, for sole traders, typical scenarios would include badges of trade, cash basis, incorporation and disincorporation. By adopting a scenario based approach you can then concentrate on what is important.

It will help you to note any traps you have fallen into. The more mistakes you can make from each question/scenario will increase your chances of passing the real exam. PQ • Nitin Rabheru is a tutor at BPP’s OCR Live Faculty

GREAT AQ2016

GIVEAWAY

explained step by step.

However, the course notes are now available online, so from enrolment students have access to all the course notes, meaning they can start their studies within minutes.

Our AQ2016 online lectures now just about cover every page in the course notes and are in full HD. So every lecture example question that students do has an online lecture demonstrating how the answer should be arrived at.

The new online platform, My FI, uses HTML5, so it will work

• PQ magazine’s usual terms and conditions apply

on any computer or phone operating system, any device which can access the internet, and the screen.

To enter simply email graham@pqaccountant.com with your name and contact number, heading up your email ‘FI AQ2016’. PQ PQ Magazine November 2016

“I am an award-winning Certified Bookkeeper ” “I was a serving helicopter pilot with the Army, but changed my career and I am now an award winning Certified Bookkeeper” Natalie Phillips MICB. CB. Dip HRH Prince Michael of Kent GCVO

To find out if you could become a bookkeeper call

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PQ the workplace

Rising to the challenge

Accountants working in the public sector face a unique set of challenges. So how are they dealing with them?

F

or finance officers working in the and investment. Organisations must analyse public sector, ‘business as usual’ just their own business structure to determine won’t cut it nowadays. Public what can and should be outsourced. They organisations, be they health services, local need to develop the appropriate level of government, police and fire services, have monitoring and benchmarking to ensure always faced a unique set of financial there is value for money. And within the challenges, compared with those in private contracts, there needs to be clear sector businesses – think funding governance arrangements to ensure conflicts frameworks, taxpayer obligations, etc – but in of interest do not arise. today’s cash-strapped public sector, the role In order to meet the challenges, CFOs is evolving into one that would have been cannot rely on financial acumen alone, they barely recognisable just a few years ago. must be innovators, with leadership drive Today’s CFOs must certainly retain all the and solid people skills. They must possess technical expertise that has traditionally the ability to undertake a range of roles, defined the role, but now they need to also depending upon the context and demands of deal with increasingly complex partnerships, each situation. And they must be widespread reform and new patterns of instrumental in enabling growth, taking funding. They must be the drivers for calculated risks and delivering change. investment and strategic transformation, all Looking at what makes a truly standout the while ensuring that the budget is finance officer they must be able to look balanced in a given year and adequate beyond merely having a firm grip on the resources are created to build for the future. money, to seeing the larger picture. They Local government, for example, has had to must be able to translate vision into action; weather the storms of funding cuts during manage their time and the ambiguities of the almost a decade of austerity, while also role; respect other perspectives and develop managing reforms for greater fiscal autonomy strengths in others; be clear communicators, – and the sector has responded not only by both in expectations and decisions; and they working to maximise savings and efficiencies, must adapt to circumstance, while balancing but by seeking new and entrepreneurial ways detail with strategic perspectives. to boost revenue. There are now numerous There must also be a clear link between examples of partnerships established how funds are being spent and excellence in between councils and commercial service delivery. This involves embracing organisations, and a growing number where complexities, both in their organisation and in councils have set up independent, how their organisation interacts with others autonomous profit-making companies and society at large.

Room at the top: times have changed dramtically since themselves.

All of this means that as we look to the Joe Lampton worked as an accountant with a local Recognising that a large number of its lowfuture, public sector finances must be a authority. The novel was published in 1957 income residents were paying high prices for hotbed of new skills and experiences and pre-pay gas and electricity, Bristol City Council in the company is based upon Market Economy those entering the field, those future leaders, recently established Bristol Energy, which it says Investor Principles (MEIP), which follows along must possess a broad range of abilities alongside will be a social enterprise, providing fair prices to similar lines to those used by private equity traditional technical knowhow. its customers. investors, and includes possible return rates from And perhaps the greatest skill will not be one To develop a workable business model and the investment at above 20%. particular attribute, but the ability to balance the bring Bristol Energy to the market, the council put This emerging drive for business growth and skills in appropriate measures and at the right forward significant investment and brought in a public sector entrepreneurialism comes with its time. PQ wide range of external expertise. The investment own set of challenges, particularly relating to risk • Thanks to CIPFA for this article

Sorted, thanks to pqjobs.co.uk

30

PQ Magazine November 2016

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PQ opinion

Embrace the new world Garry Carter argues the digital revolution is fundamentally changing accountancy – and you must take note!

D

aniel Defoe (1659-1731) once wrote: “I saw the cloud, I did not see the storm.”

The accounting profession is indeed in the eye of a storm, brought about by the digital revolution, facilitated by the Cloud.

Revolution might seem like a strong or evocative word but revolution it most definitely is. And if history tells us anything it is that in any revolution neither side comes out completely unscathed. Technology is driving change at breakneck speed and it is already obvious that some in the accounting profession are scurrying round dazzled by the headlights.

The six consultation documents released by HMRC on their Making Tax Digital (MTD) regime are game changers.

What I have gleaned so far from their proposals I see as hugely positive, although not without risk. What lies ahead will certainly not suit everyone, but what we all have to remember is the most important component in all of this – the businesses we all serve.

Is the customer ready?

Accountancy is seen by many as some sort of quasi-Masonic order, designed to keep secret the knowledge gained over years of tortuous study and certainly not to be understood by the common man or woman. So this new revolution has the potential to cast all that asunder and cede control back to the customer. But is the customer really ready for it and do they really want it?

Evidence would suggest that most businesses, particularly micro and small businesses, do not want to spend their time ‘doing the books’, but want instead a cost-effective service from someone who talks to them in a language they understand. It’s no good telling business owners after their year end that they have been doing it all wrong when what they really need is some serious hand-holding throughout the whole year.

This is all positive for bookkeepers. A business is a living thing; it doesn’t recognise year ends or accounting periods. This is why bookkeepers can be positive about this brave new world.

Unlike the once-a-year compliance accountant the bookkeeper is a proactive constant within the business.

Sage Executive Vice President Jennifer Warawa recently sat in my office and raised the valid point: “Why is everyone so hung up on month-end and year-end when new software advances mean businesses can have live accounts?” Why indeed? Take banking as a prime example; we simply go online at any time 32

of the day or night on our PC, laptop, iPhone or even watch, and get an accurate, up-to-the-minute figure.

In their book, ‘The Future of the Professions’, Richard and Daniel Susskind suggested that within a relatively short timeframe many professions, bookkeeping and accounting among them, will disappear. They cite technology and even artificial intelligence as the catalysts for this seismic change.

But they blame the professions for their own demise. They suggest that in the legal profession the big losers will be solicitors, who have priced themselves out of the reach of the common man and thereby making recourse to law unattainable for many. The result will be, they suggest, that solicitors will lose their stranglehold with much of their work being taken by paralegals and, eventually, by Big Data and algorithms.

Do you see the similarities?

Sitting on a thought leaders panel at the recent Sage conference in Chicago I and my fellow ‘global thought leaders’ suggested that the accountancy profession has been similarly neglectful and unapproachable. So is control about to be wrenched from the accountant and passed to the bookkeeper?

Accountants are struggling to adapt to these new changes. Their current costing model surely precludes them from more

frequent interaction with clients who already cringe at their annual fees.

Some firms of accountants, most notably KPMG, are now offering ‘bargainbasement’ bookkeeping to try to address the shift from compliance accounting to a more value based modus operandi.

Surely this is like doctors trying to be nurses instead of concentrating on being better doctors and working with the nurses to give the patient an all-round better service.

Behaviour has to change In a recent Economia column, ICAEW chief executive Michael Izza was perhaps trying to steady his troops when he wrote: “But while technology will drive change, it would be overly pessimistic to assume that it only presents threats. New technology does not change human needs or behaviours, it facilitates them.”

While I agree, the point surely is that some human behaviour has to change and will.

So my question is simply this: If we are about to see a major directional switch from accounting to bookkeeping, is it now time for students and PQs to follow this new direction? PQ • Garry Carter is the CEO of ICB Global and ICB UK PQ Magazine November 2016

careers PQ

Karen Young offers you some advice on super-charging your search for that dream role

T

he experience gained early in your accountancy career could impact the types of senior positions open to you in the future. This may make searching for your next job seem like a daunting prospect, filled with concerns over making the ‘wrong’ choice, but with the current demand for part and newly qualified accountants showing no signs of slowing, now is the time to ensure you capitalise and develop your career. Here’s how to supercharge your job search…

Map your future First, it is imperative that you establish a comprehensive career plan. There are two key components to building an achievable – and thus ultimately successful – plan. You should make an honest assessment of your professional strengths, interests and weaknesses. Which areas do you excel in, and which require development? What are your unique professional skills? What do you most enjoy? This will help you to discuss your CV and enable you to make informed career decisions based upon what is a good fit for you.

Next, combine this with a broader vision for your professional future. Create realistic and clearly defined statements of your future career

Make that job yours An expert recruiter can offer constructive industry insights, such as the specific skill sets employers are looking for, and will refine and enhance your search by matching your strengths and expertise with the right employer.

Through understanding your future ambitions, a good recruiter can also be of continuous value by making you aware of opportunities throughout your career. Similarly, a mentor can prove invaluable by providing you with an external perspective and experienced guidance regarding your career path.

goals, and streamline your job search accordingly. I also advise separating goals into a logical time line of one, two, five and even ten year objectives, however far away that may seem now.

Turn to the experts During your job search it is important to seek advice from those who know the market best.

Stay updated Finally, don’t neglect the basics. Remember to continuously update and correctly format your CV and have access to it wherever you are so you are able to apply to jobs on-the-go: yours is a fast moving industry, and you need to be ready to seize opportunities at all times. Build a robust LinkedIn profile, one which adequately shows off your expertise and competence. Ensure you maximise the value of this platform by joining groups, growing your network, and requesting recommendations from colleagues and managers.

For more information and job opportunities for PQs visit www.hays.co.uk/pq PQ • Karen Young, Director, Hays Accountancy and Finance

Give your students the best chance Replicate complex accountancy question types to give your students the best practice for the final exam Specifically designed for accountancy and financial testing Automatic marking with custom feedback for each assignment, pointing the student to sections in your course to refresh knowledge in areas they have lost marks Free up tutor time to spend actually talking to the student or writing new material Track students’ progress through the course Auto event triggers based on progression to remind tutors to make contact, or direct to student, e.g. remind them to book final exam, haven’t seen you in a while, etc..

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Find out more – visit getrogo.com or call 0207 997 6755 PQ Magazine November 2016

33

PQ careers

social media ROUND-UP It was recently reported that FTSE 100 companies finally seem to be getting the hang of social media. Some are even jumping on the Snapchat bandwagon in an effort to build their profile. In all, seven top firms have a messaging service there and another six have a small presence. Just eight out of the 100 are not signed up to Twitter, according to the survey from Battenhall. It said the big winners on social media are Burberry, M&S, Sky, ITV, Paddy Power and Betfair. Burberry has well over seven million followers: the firm with the lowest number of followers was South American conglomerate Antofagasta, with just nine!

As always PQ tweeted and retweeted the experiences of those sitting the September ACCA exams. We said the F9 MCQs were a mixed bag for many – ‘confusing’ and ‘ambigous’. That was reassuring for @peachy_eight and comforting news for @AndyCadle1.

Remember, we will be tweeting those September results on Monday 17 October, as soon as we get them.

We also asked P3 sitters if time management had been the usual problem for them. Candidates often spend too long on Q1. @ATalane admitted he mucked up and only had an hour to do the other two questions on the paper. So the answer was yes!

Finally, we just wanted to give you a word of warning. We know that we are all getting overdependent on our smartphones, but the latest Deloitte study is worrying. It appears half of young adults (aged 18 to 24) check

their phones after they have gone to bed. One in six admit this is long after they have turned in – the middle of the night in fact. The survey also found one in 10 smartphone owners instinctively reach for their phone as soon as they wake.

So perhaps set yourself a task and see if you can just put your smartphone down and walk away. You may have to start with 30 minutes and then make it longer! It’s time you ran your life, not your device.

34

Life working in the NHS Reena Mehta-Jagatia, 31, is a group finance assistant based in Coventry. She has been there for three years. Reena has a first-class degree in accounting & finance and is currently studying ACCA. In June she was named the ACCA P2 prizewinner What time does your alarm go off on a working day? 7am.

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

Check emails – there often is a couple from HTFT regarding ACCA study and support.

What’s on your desk? Pens, stationery, notes, computer, invoices, budget meeting notes.

What’s the best thing about where you work? The people.

Where’s your favourite place to go for lunch? Zizzi’s.

Which websites are your favourites and why? ACCA for

qualification information, MSN and BBC for news and HTFT Partnership’s Online Learning Community for all my ACCA learning resources.

Which websites do you use for work? I am always on the work intranet.

How many hours a week do you spend in meetings?

Approximately four hours.

What time do you leave the office? About 5-ish.

How do you relax? Long walks.

What’s your favourite tipple?

I don’t drink.

How often do you take work home with you? I don’t take work home.

What is your favourite TV programme? 24.

Summer or winter? Summer.

Pub or club? Pub. Who is your hero? My husband.

If you had a time machine, where would you go? Fifty years into the future.

If you hadn’t chosen accountancy, where might you be right now? Working outdoors.

the next generation by demonstrating the role that audit plays in society and improve the perception and value of a career in audit.”

business model in both the short and the long term.

In brief Audit skills gap Action needs to be taken now to avoid a potential audit skills gap, says a new report from ICAS and the Financial Reporting Council (FRC). The report reveals that fewer graduates perceive audit as a career of choice, and that there are already problems in recruitment and developing audit team members. New initiatives are required to recruit, develop and retain a new mix of individuals within global audit teams, say the report authors.

ICAS’s CEO Anton Colella said: “Audit quality relies on quality people. We need to take every opportunity to reposition audit for

Bonuses cause resentment Bonuses for top earners are undeserved, according to more than a third (35%) of UK finance professionals in a survey conducted by CIMA. Some 62% of UK professionals also felt unjustified bonuses caused resentment among colleagues. As a result, CIMA is calling for bonuses to be rethought so they reward work that can be shown to benefit an organisation’s full

Pay equality ‘decades away’ The UK gender pay gap will not close until 2069 unless action is taken to tackle it now, according to new research by Deloitte. The firm’s analysis found that the difference in the hourly pay gap between men and women is closing at a rate of just 2.5p a year! Interestingly, the gap in starting salaries between men and women who have studied science, technology, engineering and maths (STEM) subjects and go on to take jobs in these sectors is far smaller.

The PQ Book Club: books you should read Stretch: How to Future-Proof Yourself for Tomorrow’s Workplace by Karie Willyerd and Barbara Mistick (Wiley, £17.99) There’s a quote early in this book that neatly sums it up: “The illiterate of the 21st century will not be those who cannot read or write, but those who cannot learn, unlearn, and relearn” (it was said by American author Alvin Toffler).

Whether we like it or not, the world is a rapidly changing place, and by extension so is the world of work. It’s no longer enough to develop one set of skills for a particular career; we all need to be developing new ones as the demands on us change, sometimes having to dump some of the older skills on which we’ve relied. This book

explains how you can do this – and why you should.

‘Stretch’ will give you the confidence and knowledge you need to achieve your goals.

Willyerd and Mistick – experts and winners of dozens of awards in the field of personal development and learning – offer evidence-based guidance on obtaining the skills you will need to thrive in tomorrow’s workplace. Built on solid, global research and dozens of personal interviews with people who have achieved new and inspiring goals, this book offers advice, valuable insights, anecdotes, and recommendations to make achieving your goals practical and within reach.

In brief, to remain relevant you need to know how to: • Learn in any situation.

• Open your thinking to a world beyond where you are now.

• Connect to the people who can help you make your future happen.

• Seek experiences that will prepare you for tomorrow.

• Stay motivated through the ups and downs of a career so you can bounce forward.

The book offers five practices to help you start, enhance, and lengthen your career by anticipating the needs of tomorrow’s work environment.

Don't become obsolete. Instead, stretch to achieve your potential.

PQ rating 5/5 No matter what stage you are at in your career this book will help you to develop and progesss.

PQ Magazine November 2016

opening doors FP&A Analyst

Financial Analyst

Surrey

Middlesex

£35,000 + benefits

£40,000 + benefits

• Part of the divisional FP&A team supporting consolidations and financial analysis.

• Preparation of monthly/quarterly board and senior management presentations.

• Managing monthly actual reporting on the P&L, reviewing monthly balance sheet and cash flow.

• Assisting with consolidations and quarterly forecast submissions.

• Supporting and assisting with Hyperion Planning projects.

• Management of JDE and Oracle accounting systems and use of advanced Excel skills.

• Responsible for delivering, financial reporting, planning and analysis of divisional performance.

• Producing monthly variance, actuals & commentary, and quarterly/annual forecasting.

• Budgetary control of cost centres; preparation of monthly journals and reviewing monthly costs versus budget.

• Preparation and maintenance of the Excel forecast model.

• Advanced use of Excel and Access, high attention to detail, accuracy and analytics.

• Experience with working across cross functional teams, particularly non-finance stakeholders.

redefining financial recruitment T +44 (0)20 8408 9999 E info@walkerdendle.co.uk www.walkerdendle.co.uk

www.howett-thorpe.co.uk

real jobs real people Group Reporting Accountant Slough, Berkshire £35,000 to £40,000 Benefits: Excellent benefits package Reference number: HT12896 About you ●

● ●

CIMA/ACCA Part Qualified you will have gained excellent financial accounting skills and ideally have knowledge of IFRS. You will be confident with systems and have good Excel skills. Experience with Oracle and Essbase is advantageous.

It is essential that applicants have a strong analytical mind and proven ability in problem solving.

About the role Working within the Group Accounting function the Group Reporting Accountant will assist with the preparation of monthly consolidated results for over 130 accounting entities.

In addition the jobholder will provide support to Regional and Business Finance teams and ensure adherence to Group Accounting Policy. Key duties include: ● ● ● ● ● ●

Performing monthly group consolidations.

Assisting in the preparation of balance sheet and cash flow models.

Communicating key variances to Regional Controllers.

Assisting in periodic balance sheet review to ensure SOX Compliance.

Preparation of quarterly, half yearly and annual schedules.

Completion of results to the parent company using the consolidated reporting package.

For further information regarding the above role or if you are seeking advise on how to further develop your career please forward your CV to recruit@howett-thorpe.co.uk, alternatively please call your local office.

Weybridge Office T: 01932 901 900 E: weybridge@howett-thorpe.co.uk

Reigate Office T: 01737 304 050 E: reigate@howett-thorpe.co.uk

Slough Office T: 01753 313 033 E: slough@howett-thorpe.co.uk

Farnham Office T: 01252 718 777 E: farnham@howett-thorpe.co.uk

YOU’VE WORKED HARD NOW IT’S OUR TURN With access to some of the UK’s top companies from a wide range of sectors, we’ll do the hard work for you giving you a head start in your finance career.

We are the leading recruiter in accountancy and finance and have expert consultants who can advise you on developing and showcasing your skills to achieve your ambitions.

To find out more, ‘like’ us on Facebook or visit us online.

Hays Accountancy & Finance UK

hays.co.uk/pq

Great opportunity to join a successful and fast growing business, teaching bright, motivated, ICAEW, ACCA, CIMA and AAT trainees. You must be ICAEW qualified, have a strong work ethic, and a desire to help people get on.

We will provide: A friendly and professional working environment in central London A good salary Generous annual leave Performance­based bonuses Share options for exceptional people A career path to senior management if you like responsibility Please email your CV to London@fi.co.uk if you think this is for you. www.fi.co.uk

0207 323 9636

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

NEW-LOOK ICAEW HQ PUT AWAY THE BROWN SHOES

Did you ever wonder why you never got that job in the City? Perhaps you wore brown shoes with your suit, or even a white shirt! Apparently, these are both big no-no’s that only those in the City would know. The government’s social mobility watchdog has found employers still have an unwritten, even opaque dress code to weed out the ‘wrong sort of person’ at interviews. It appears in corporate finance if you wear the wrong cut of suit or the wrong tie (too loud) you are done for before you start. So the motto of this story: “When in town don’t wear brown!”

• By Elizabeth Pratt

EURO TRASH

CIMA, CIPFA and the ACCA have all recently moved into new modern offices. The ICAEW, however, appears to be staying put at Moorgate Place. But there is lots happening inside, as its rips out the old and replaces it with new meeting spaces and a brand new council chamber. The only problem is that someone has already told us the chamber looks like the posh seats at the cinema. Still, most meetings don’t last more than your average movie, so it should be ok. When PQ visited recently though we couldn’t find a popcorn machine anywhere.

YES YOU CAN The recent CIPFA student conference was opened by Richard McCann.

His mum was mass murderer Peter Sutcliffe’s first victim and his story is a real heart-wrencher. He stressed that you can’t tell by looking at someone what they are capable of.

He also said that having a

FINES JUST DON’T WORK

Germans found guilty of tax evasion (and other offences) could in future lose their driving licence under new sentencing laws. It appears that the government there believes fines have little impact on ‘richer’ individuals who break the law. Motorist organisations are opposing the move as they say these rich criminals will simply take a taxi instead! However, the chairman of the German Police Union,

’ WEV E

‘can do’ attitude is everything. He admitted he had no qualifications and didn’t know anything about accountancy. But he said he did know that you can get all the qualifications in the world, but if you don’t have the right attitude you won’t get far. His book ‘Just a Boy’ has sold nigh on 500,000 copies.

Rainer Wendt said: “Loss of mobility is a real punishment. Fines are just paid out of petty cash by some people.”

24-HOUR TAX PEOPLE

Not a month goes by without a story about Greek tax collectors. Last month it was bikini clad tax inspectors, this month we have the story operation ‘24 hours’. Tax officials will monitor the 1.8m people they believe have been under-declaring in their tax returns.

Using new software auditors will be able to access taxpayers’ Facebook, Twitter and Instgram accounts to extract information and details of assets that may have not been declared.

THE MOST POPULAR ACCA MEMBER IS… Former ACCA student activist Michelle Hourican has a new claim to fame. She is the most popular ACCA member, receiving the most votes for ACCA Council. In her statement for election she explained her involvement with ACCA began in the local student society, where she also had the honour of representing Ireland on the ACCA International Student Panel. She became an ACCA member in 1997.

Michelle trained in audit with Deloitte and is currently teaching management and strategy.

She has been lecturing on ACCA P3 and F9 for the past eight years.

TAKE THE IFRS QUIZ

The IFRS Foundation is inviting people to test their knowledge of IFRSs and their use around the world with its newly updated online IFRS quiz! The quiz is based on the 2016 ‘Pocket Guide to IFRS standards: The global financial reporting language’.

This provides students, educators and anyone else interested with a free-of-charge resource to assess their knowledge of IFRSs, the IFRS foundation structure and the standardsetting process.

Those who take the quiz will be presented with 10 true-or-false statements drawn randomly from 220 possible questions.

The quiz is instantly graded with answers and explanations provided for the answers shown.

Participants may repeat the quiz as many times as they want.

It is available at http://go.ifrs.org/ IFRS-Quiz

GOT THE L OT

Power your way to success EWI’s ACCA study texts The lovely people at the CIOT have given us three power banks to give away this month. The power bank can be used on most digital products and means no matter where you are you will always be fully charged and ready to go. However, we don’t want you just to use them chasing Pokemon!

To enter this giveaway draw send your name and address to graham@pqaccountant.com. Head up your email ‘CIOT power bank’ and we, as they say, will do the rest.

EWI’s 2016-16 ACCA study texts are now available to purchase from Amazon as Kindle eBooks. The texts fully cover the syllabus without getting into too much detail. They are written in clear English and use an attractive, simple layout. To celebrate EWI is offering 10 lucky readers the chance to download the text of their choice. Yes, that’s 10 lucky readers!

To be in with a shout of winning head up your email ‘EWI ebook’ and tell us the paper you want (eg P1).

And please include your full name and address.

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 11 November. The main draw will take place on Monday 14 November 2016.

TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM 38

PQ Magazine November 2016

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