PQ magazine

PQ magazine December 2020

www.pqmagazine.com / www.pqjobs.co.uk incorporating NQ magazine

THE VOICE OF ALL PQs

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ICAEW’S PAPER CUT P4

TEST BANK

So how well do you know process costing?

Institute’s learning resources all going digital from 2021

Contact us

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email: graham@pqmagazine.com twitter: @pqmagazine call 07765 386489

EXAM TIPS WHEN YOU NEED THEM EMBRACING EDTECH P17

How to utilise all the benefits that online learning brings

LOADS MORE GREAT PQ GIVEAWAYS P42

We have FIVE pages of great tips for December’s ACCA exam session – see page 30

Planning for success: overcome the obstacles to effective study

A FINANCE FUTURIST P27

Exactly how do you become a finance futurist?

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MONKEY SEE, MONKEY DO…

Imitating your role models at work

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contents PQ

IN THIS ISSUE

December 2020

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News 04Examiner Reports Students and lecturers perplexed as ACCA cuts number of Examiner Reports to two a year 05AAT measures Association says assessments to continue despite national lockdown 06Maiden speech Our very own Prem Sikka tells House of Lords that more accountants doesn’t lead to better governance 08Workplace diversity #1 Big accountancy firms must do better, says FRC key report 09Rogue institute Bodies join forces to get injunction against ‘misleading’ college 10ACCA exam results PM and APM papers on the ‘tough’ list 12Tech news Blockchain set to hand a boost to the sagging UK economy Features, etc 14Have your say I can’t understand move to cut down number of Examiner Reports; why the ACCA deserves a pat on the back; why it’s time for the AAT to act; and our social media round-up

16Crowdfunding What is it, and

how should you account for it?

Tom Clendon explains all 17Studying online Why you should embrace the advantages Edtech brings – even if it’s not your preferred way to study 18Test bank How much do you know about process costing?

Take our test and you’ll find out!

19Workplace survey Imitating the way the boss works could be the key to getting that promotion

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prepare for your exams in these difficult and unsettling times 24CIMA study tips Some top advice on planning for success from the institute’s Mark Foley 25Ethics #2 Be careful what you say on social media – those words may come back to haunt you…

26Top AAT student Meet Lucy Haffenden, who competed her studies in just three years 27Finance futurists The leaders of tomorrow will look different to today’s finance chiefs. We explain why – and how 29FRC report Key facts and trends from the latest study into the UK’s accounting profession

p36 30ACCA exam tips We’ve FIVE

20Ethics #1 The Covid-19

pandemic has prompted a reset on what ethics is about; and out TV recommendations to make you think 22CIPFA spotlight How to best

pages of fantastic exam tips from the experts – yes, FIVE! 35Tax exams Neil Da Costa on how to best tackle exam questions on group relief 36ACCA ATX exam Richard Poole explains the common traps students sitting this paper fall in to – and guides you around them 38CIMA spotlight New CIMA President Nick Jackson explains

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what responsible financial leadership is and why it is so important in today’s economy 39Personal development How to improve yourself, day by day 40Workplace diversity #2 Hays’ Karen Young believes it’s more important that ever that firms recommit to their diversity programmes and agendas 41Careers Life as the CIMA President; our Agony Aunt Karen Young tackles another of your career ‘issues’; and our Book Club p41 Review 42Fun stuff – and our fantastic giveaways The columnists Robert Bruce Remote working

will bring new set of audit problems 6 Prem Sikka Why the insolvency sector needs urgent reform 8 Zoe Robinson Double down on being human 10 Mike Day Five ways to help small businesses thrive 12

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PQ news

GRAHAM HAMBLY ACCA remote exams, conferences and awards There is no doubt that all ACCA students will need to embrace remote invigilated exams in this brave new world of ours. ACCA exams in India have been ‘remote’ for both the September and now the December exam.

And, as we went to press, ACCA had cancelled exams in over 45 markets, which include the whole of Ireland, Australia and New Zealand, Poland, Myanmar, Indonesia, Iraq and South Korea. We kept you up-to-date about all the cancellations online at www.pqmagazine.com as they happened.

All students in these locations where centre-based exams have been cancelled will, promises ACCA, be offered the opportunity to take their exams remotely.

LSBU CONFERENCE We are also pleased to announce our fourth annual conference with London South Bank University. It has the jazzy title of ‘2021 and Beyond: The New Normal for Accounting Around the Glob’e, and will take place online on Wednesday 3 February next year.

Check out more on page 23.

PQ AWARDS ARE COMING Finally, just so you know, we will be launching the PQ magazine awards next month, with the plan of holding them in late April.

We will be making the decision in early 2021 whether they will be virtual or whether we get everyone together for a ceremony in London.

Either way we will make sure all our nominees get involved, and the emphasis will be on ‘fun’.

Graham Hambly is Editor and Publisher of PQ magazine

Controversy over rejig of Examiner Reports ACCA has decided from the September 2020 exams, the Examiner Reports will coincide with the composite exam papers produced twice a year.

That means going forward there will be no Examiner Reports following the September or March sittings – so you can stop looking now!

The examiners, for example, currently put together the

composite paper following the March and June exams, picking up on the question’s students struggled with over the two sittings.

ACCA told PQ magazine: “The decision was made in response to feedback received from future members, tutors, and learning providers, who all use the Examiners’ Reports. By changing the timing of the reports to match when the exam is published means the examiner can explicitly talk about the questions

that have been published, and give advice on how to answer the question, while also commenting on common pitfalls experienced by candidates.”

This, felt the ACCA, will improve the quality of the report and creates a better learning support for users.

However, one top tutor PQ magazine spoke to felt with the changeover to CBEs still a recent thing and different sessions running in the mornings and afternoons in some cases, real feedback about September’s exams would only help improve pass rates.

ICAEW learning materials all digital in 2021 All ICAEW has thrown away paper manuals and all its learning material for the 2021 exams is being published digitally.

The exams are all computerbased, and now the learning material is too. ICAEW says this will allow students to access their manuals on their mobile, tablet or desktop.

A real innovation here has been

the ability for studiers to still write notes and highlight on their digital workbooks.

There is also a key terms search, the ability to change the settings to make it easier to read, and if you are feeling particularly

CIPFA honours top students The CIPFA prize-giving ceremony went ahead as usual this year, via Public Finance live.

President Andy Hardy, along with exam panel chair Suzanne Jones, were on hand to dish out the certificate and cash prizes.

The winner of best performance in Financial

Accounting went to Grant Thornton’s Alexander Rycroft. Unfortunately for his tutor – someone at CETC Birmingham – Alexander said he couldn’t remember who had taught him (really Alexander?). His advice to fellow students is to use

based teaching’, and ‘quality of ICAS material’.

Corporate Governance & Law will be sat on a Friday morning instead of its usual Monday morning slot.

There will be no papers sat on the Friday afternoon of exam week come March.

lazy the book will read itself to you – there is a text-tospeech function.

The new workbooks also combine skills and syllabus learning with the study manual in one publication.

ICAEW says digital delivery is better for the environment and will save 262 tonnes of paper each year. the practice tests rather than simply going over your notes.

Cardiff Council’s Jessie Atkinson (pictured) was awarded best performance in Audit and Assurance. It was the first of three prizes she won on the day. She told CIPFA students not to be afraid to ask questions and remember to look after their mental health.

Jessie felt a good night’s sleep is always much better than working into the night.

In brief PQs prefer the classroom What could your accountancy body do better for you? ICAS asked that question of its students to help it improve its services. Interestingly, two-thirds (64%) of ICAS PQs said they prefer classroom learning, with just 21% favouring online learning.

Areas highlighted as requiring improvement were ‘response times’, ‘the quality of information received’, and the ‘efficiency of ICAS administration’. The areas with the highest satisfaction were ‘ICAS’s reputation’, ‘classroom4

Exam venues to stay shut CIPFA venues will remain closed for the December 2020 exam session. Students can sit online exams with a remote (flexible location) or local (usually workplace) invigilator. Online booking for December 2020 exams are now closed. The institute is also planning to shift the days some papers are sat, too, but this won’t happen until March 2021.

2021 and beyond PQ magazine has again joined London South Bank University for our fourth annual accountancy conference, planned for February 2021. We have already signed up the wonderful trio of Lord Sikka, Professor Richard Murphy and

Hays UK director Karen Young. It will be a virtual one-day conference this time, and free! But you need to sign up if you want to be there – check out page 23 for more.

Ex-BHS boss sent to jail Dominic Chappell, who bought BHS for £1 in 2015, has been found guilty of evading tax of £584,000 and jailed for six years. A criminal investigation by HMRC revealed Chappell deliberately evaded VAT and corporation tax payments.

PQ Magazine December 2020

news PQ

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Following the announcement of a second national lockdown in England due to the ongoing pandemic, AAT issued a statement outlining how this will impact assessments over the coming weeks.

AAT told PQ magazine: “We currently expect AAT assessments to remain available during the new national restrictions that take effect in England from Thursday 5 November. This is in line with current Government advice, which reiterates the importance of education remaining accessible.

“Colleges and assessment venues must continue to adhere to all Covid-19 regulations and guidance in order to ensure the safety of staff and students, and

AAT assessments still available in lockdown

colleges should consider moving to increased levels of online learning where possible.”

However, even before the announcement of a lockdown AAT PQs were saying booking an assessment was becoming more

problematic, with many PQs finding their chosen centres fully booked until the end of the year.

Some centres have now opened Saturday morning slots, but as one PQ said: “There was one date in November, due to a cancellation, then nothing until February. This is mainly because the centre in question can only take three candidates at a time, instead of its usual 14.”

AAT PQs are being advised to contact centres direct as some are really proactive at adding sittings if they know there is demand.

Message error confuses ACCA PQs An ACCA system error just before the release of the September exam results left massive confusion about whether some final level students have become affiliates before their time. The results were due out on Monday 19 October, but lots of PQs got messages three days earlier telling them that ‘something special’s happening’.

PQ magazine put in the call and here’s the official statement.

ACCA statement about message error: ACCA apologises to students for a system error that has led to confusion about their exam results.

A number of students have today received a welcome email congratulating them on becoming

ACCA affiliates, ahead of receiving their exam results from the September sitting, which will be published on Monday.

We would like to reassure the students who received the email that it is genuine and accurate.

They will receive confirmation of their results and the marks they achieved on Monday…

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PQ news

ROBERT BRUCE Remote working will bring a new set of audit problems Normally, as the end of the year approaches, the work cranks up. The busiest time of the year for auditors and the audited is upon us. But instead of swarms of, hopefully sceptical, young accountants trawling through the lower end of clients’ books everything has to be done at a distance.

Doubtless it will all be done to the best of people’s abilities. And the ingenuity that is borne of our times will come to the fore. But the confidence with which any imprimatur of financial and business certainty can be applied will be much less than any stakeholder in the process will want. The days, simply, of physical stock takes are likely to vanish. And the joy surrounding a visit I once made to Glasgow to check meat stocks at a national chain of butchers over the New Year’s holiday with all its lengthy celebrations would not be happening this year.

But, as we know from at least one celebrated audit scandal in the past year, even something simple like checking a group’s cash at bank at the year-end doesn’t always go to plan. Everything this year is new and being learned on the hoof. And that reveals another danger. Both auditors and preparers of financial figures tend to take legal cover these days among the rules, whether accounting standards, recognised principles, or guidance from the technical people at an auditor. Taking refuge in the theoretical may work in the short term. But the long-term consequences of these virus-ridden auditing times may not be happy.

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

ACCA exam centre closures: an update Some UK exam centres finally joined the ACCA list of December cancellations on Tuesday 10 November, after weeks of speculation.

The exam centres no longer available at this diet are: Aberdeen* – Station Hotel; Bournemouth – Mercure Hotel; Bristol* – Amos Hotel; Chelmsford* – County Hotel;

Inverness; Norwich – Dunston Hotel; Reading; Stevenage – Ibis Hotel; Swansea* – Grand Hotel; Truro; Watford – Jurys Inn. All affected students were contacted by the ACCA and offered the chance to sit the remote invigilated exams or defer their sitting until March 2021.

UK students joined over 45 other countries/markets where

centre exams had already been cancelled. Details of all the cancellations were posted on the PQ website as they happened.

For full ACCA updates go to https://tinyurl.com/y48jklsk * Other exam centres will be running in Aberdeen, Bristol, Chelmsford and Swansea. Exams are only cancelled in specific centres.

ACCA puts Global Ethics Day on the map It was Global Ethics Day 2020 last month and we were worried you might have missed it! PQ magazine really loved Sugar J Poet’s spoken word performance of ‘Rudder’, commissioned by ACCA. Here’s what he said.

Shakespeare said all the world’s a stage but let’s imagine it is a ship There’s a mast and sails and hull and deck.

Now which part are you?

Where’s accountancy?

What’s the purpose of this profession as we sail through wind and waves?

Is profit the only measure of success or does sustainability matter too?

Is your profession a cornerstone of society or somewhere off in the corner?

What can you do?

The weather is changing.

Who will decide what the future holds?

Everyone sees the mast and sails no one sees the rudder.

You can watch his performance at https://tinyurl.com/y5leh4sv

finance industry has been a serial mis-seller of products and has admitted to rigging exchange rates and interest rates. These events

draw attention to very deep-seated cultural and regulatory fault lines, which really need to be looked at.”

Lord Sikka claimed the UK is also the home of a rampant tax avoidance industry, which enables companies to avoid taxes by shifting profits to low or no-tax jurisdictions through intragroup transactions. “My response to that was to join up with some colleagues, and in 2003 I became a co-founder of the Tax Justice Network, with the sole aim of sensitising people to how taxes are avoided and what the social consequences are.”

• Prem Sikka has been writing for PQ since we launched in 2003. His latest column is on page 8.

over the standard of its audits of health authorities and councils in England. Both have been ordered to undertake a Root Cause Analysis (RCA) over their poor performance.

The FRC has said that the overall results for its inspection of 15 financial statement local audits across seven firms ‘are concerning’. Just 40% of audits required no more than limited improvements, compared with 64% in 2018/19.

• You can read the full story at www.pqmagazine.com

AA Army gets top rank Just one accountancy firm made it into top 10 of the UK government’s Top 100 Apprenticeship Employers 2020 table, released in late October – and it wasn’t one of the Big 4. The British Army secured the top slot as best apprenticeship employer in the country, followed by HMRC. Mazars came in sixth place and Grant Thornton 12th. We couldn’t find Deloitte on the list at all, with PwC coming in at number 15, EY 16 and KPMG 22.

Lord Sikka: ‘more accountants won’t equal good governance’ The UK has the highest number of qualified accountants per capita in the world, but this huge social investment has not given us good corporate governance, reliable financial reports or even honest audits, said Lord Sikka in his maiden speech in the House of Lords recently.

He said the problems are systemic, going far beyond the affairs of just BHS and Carillion.

Lord Sikka explained: “This country has had a banking crisis in every decade since the 1970s. The

Yet a rudderless ship cannot direct itself.

Fairness to people and planet.

Expertise and integrity, balance is needed to keep business afloat.

So what’s your role?

What does accountancy do?

What’s the purpose of your profession with everything that’s happening around you?

Prem Sikka

In brief Tech giants ‘must pay more’ Google, Facebook and Microsoft must pay more corporation tax to developing nations, says ActionAid. The aid charity has estimated that these countries have missed out on billions in tax revenue that could have been used to tackle the Covid-19 pandemic. ActionAid believes multinational companies should be forced to pay a 6

minimum rate of tax. It is now calling on the United Nations to help create a new tax system that reflects large corporations’ ‘real economic presence’.

The research shows the developing nations with the highest tax gaps from Google, Facebook and Microsoft are India, Indonesia, Brazil, Nigeria and Bangladesh.

Audits criticised by the FRC Grant Thornton and Mazars have been lambasted by the FRC

PQ Magazine December 2020

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PQ news

PREM SIKKA Why the insolvency sector needs reforming The pandemic will result in a loss of businesses. The resulting bankruptcies are a boon for the insolvency industry dominated by accountancy firms, and it is poorly regulated.

The industry has five regulators known as the Recognised Professional Bodies (RPBs), overseen by the Insolvency Service housed in the Department of Business, Energy and Industrial Strategy. The RPBs are the ACCA, CAI, ICAEW, ICAS and the Insolvency Practitioners Association.

There are 1,553 licensed insolvency practitioners (IPs) and only 1,236 appointment-takers. The IP fees are often time-based.

Some bankruptcies seem to run for years, enabling IPs to amass a fortune in fees. On 27 October 2020, the government informed Parliament that 7,962 insolvencies started five to nine years ago and are still incomplete, and 14,328 are more than 15 years old and still not finalised. The record relates to Israel-British Bank, which collapsed in 1974 and its liquidation was finalised after 35 years in September 2009.

The IPs fees rank above unsecured and preferential creditors for payment.

Higher fees for IPs leave little for unsecured creditors. I have seen invoices showing that partners of some firms are charging themselves out at the rate of £1,500 an hour.

Regulators ask no questions about the exorbitant fees, duration or efficiency of the insolvency process.

As usual, self-regulation benefits practitioners and does little for the interests of other stakeholders.

Prem Sikka is Professor of Accounting at the University of Sheffield

Diversity lacking in top ranks UK accountancy firms need to prioritise increased diversity in their top ranks, particularly at partner level, according to data released by the Financial Reporting Council.

The FRC’s ‘Key Facts and Trends in Accountancy Profession Report for 2019’ reveals that just 6.7% of partner roles at the largest firms came from black, Asian and minority ethnic backgrounds (BAME). Just as worrying is the fact that no firm with under 200 employees reported that they had any BAME managers.

And while all the professional bodies have diversity policies or statements in place, of the 20 audit firms questioned 15% still do not have any such policies.

The FRC said there can be no valid reason for firms

to not have a diversity policy, and urgent action is needed on this front.

FRC CEO Sir Jon Thompson said: “Firms have a responsibility to ensure they are leading by example on diversity and inclusion and that they have appropriate policies in place to address any shortcomings.”

The report also found for the first time in five years that women now make up 50% of all students at the professional bodies, and 37% of members. But at the biggest firms women make up less than 20% of partner positions. There are, however, encouraging signs that change is happening, with women now making up 56% of manager roles at smaller firms.

• See more from the report on page 29.

CIMA launches ethics tool CIMA has launched an online ethics decision-making tool, designed to help accountants and finance professions make ethically sound decisions in tough professional situations.

The tool’s launch was part of the institute’s month-long campaign celebrating the UN Sustainable Development Goals. Users are guided through a series of logical

steps that will help them consider relevant factors and think about the bigger picture.

CIMA also points to the EY Global Integrity Report 2020, which said 90% of global businesses believe that coronavirus is a threat to ethical business behaviour.

CIMA’s Andrew Harding said: “As companies continue to deal with the knock-on effects of coronavirus

and face severe financial strains, an increasing number of professionals may encounter ethical challenges and moral dilemmas.

“Professionalism and ethics have always been at the core of CIMA's activities, and it is important that we continue to support accounting and finance professionals throughout this difficult period.

Without trust, we have no profession.”

Check out the toolkit at https://tinyurl.com/y3zuwspg

Slow broadband hampering home working Poor broadband means millions of UK households are struggling with connectivity, according to new research.

Increased internet usage during the pandemic has meant one in three people have reported slower connectivity. That’s equivalent to 10 million homes.

On the list of frequent complaints is connections that drop out

regularly, broadband failing due to the number of people on it, and connections that struggle with

dividend and capital gains income without any country limitations.

• The UK tax treaty network with 130 countries is the broadest in the OECD. Weaknesses: • The personal income tax rate on dividends is 38.1%, well above the OECD average (23.9%).

• Corporations are severely limited in the investment costs they are able to write off.

• The VAT of 20% applies to less than half of the potential consumption tax base.

PapNo time to pay tax?

The UK companies behind the James Bond films have minimised tax for decades while receiving tens of millions of pounds in subsidy from the UK taxpayer, says TaxWatch, an independent think tank. Its latest report, No Time to Pay Tax?, delves into the accounts of EON Productions Limited and its associated companies (EON). It says it found that despite Skyfall and SPECTRE grossing just shy of $2bn at the box office, EON generated small

streaming services. And more than one in 10 households described their broadband speed and reliability as ‘bad’.

This report follows our story in October’s PQ magazine, which revealed nearly five million people in the UK had suffered a ‘broadband outage’. It meant in the last year the average affected home went offline for 29 hours.

Taxwatch How competitive is the UK tax system?

The UK has been ranked 22nd in the latest International Tax Competitive Index, which is compiled by the Tax Foundation – one place worse than 2019. Here are the perceived strengths and weaknesses of the UK tax system: Strengths: • The corporate income tax rate is 19%, below the OECD average (23.3%).

• The UK has a territorial tax system exempting both foreign 8

profits and smaller tax bills in most years while profits in the hundreds of millions are declared overseas.

PapSpain to tax rich firms Spain’s draft 2021 budget will see hikes in corporation, income and wealth taxes. President Pedro Sanchez said he wanted to secure economic growth on more solid basis. To do this wealth over €10m will be taxed an extra 1%, income over €200,000 by an extra 3%, and corporation tax on large companies will also rise.

PQ Magazine December 2020

news PQ

Accountancy bodies get injunction against misleading institute ICAEW, ICAS and Chartered Accountants Ireland have obtained a High Court injunction to ban a European organisation and its directors from misleading the public by offering ‘chartered accountancy qualifications’ despite not being a recognised body.

The three accounting bodies took action after a Brussels-based organisation calling itself the European Institute of Chartered Accountants (EICA) started trading online, offering misleading qualifications and professional development, as well as use of the designations FCA and CA. The EICA is not recognised as a

chartered or qualification awarding body and has been therefore misleading the public about the qualifications it offered and its status as a chartered body.

The court order bans the company and its directors from passing themselves off as having any connection to ICAEW, ICAS or Chartered Accountants Ireland.

They are also banned from using the descriptions ‘chartered accountants’, ‘CA’ or ‘FCA’ in relation to the provision of education, certification or training.

Failure to comply with the order could result in the directors being held in contempt of court.

Sitting exams with ICAEW...

ICAEW seem to be able to plan exams for the pandemic! Its Advanced Level exams took place on 2 – 4 November, just before the month-long lockdown in England.

And the next ICAEW Professional Level centre and remote invigilation exams are due to take place between 7 – 9 December. That is exactly when the PM Boris Johnson says the country will be open again.

We were even sent a recent tweet on the matter, which read: “We’ve heard #uklockdown from Mon, Wed, now Thur after ICAEW exams finish on Wed. If so urgent why the delay? Is it a coincidence that ICAEW’s exec director of learning and prof development & 2 other directors are Oxford Alumni?? ICAEW silent yet again, No transparency.”

Purcell joins FME Online Sean Purcell, the current PQ magazine Tutor of the Year, has joined the team at FME Learn Online to teach ACCA SBL. Sunil Bhandari, speaking on behalf of FME Learn Online, said: “It's great to have Sean join our online platform. He is a vastly experienced tutor and is the ACCA’s guru for SBL. He adds to our team of subject specialist tutors, which already includes Tom Clendon (the ACCA’s SBR guru), Ashim Kumar, Richard Poole and Geoff Cordwell – as well as myself!”

Bhandari added: “We will continue to increase the number of PQ Magazine December 2020

Sean Purcell

high-quality tutors to the platform and further announcements will follow – so watch this space.”

For information about the courses offered by FME Learn Online go to https://www.fmelearnonline.com/ 9

PQ news

ZOE ROBINSON Double down on being human

There is little doubt that, at the moment, without technology we would be in a far worse situation than we are. Working from home, which used to be a euphemism for having a day off, has now become the norm for many. But without the internet and other technologies, this new way of working and learning would simply not be possible.

The technologies that have moved into overdrive in the pandemic include many that have recently been added to accounting curriculums: AI, cloud computing, robotics, virtual reality, etc. The ‘fourth industrial revolution’ has been described as a period in which digital and physical worlds collide; well, it looks like they have.

But, as important as these technologies are, we all need to be mindful of the impact they are having on our mental wellbeing and behaviour. Jaron Lanier, an early pioneer of VR, said in the context of the negative impact technologies can have on our mental state, that we should “double down on being human”.

Spending hours in front of a screen, having meetings via Zoom, taking online tests and watching videos explaining ROCE can make you think that’s all there is just now. But although these activities will consume your day, it's not who you are, and it’s important not to lose sight of what makes us human. Talking with friends and family, day-dreaming and laughing at jokes is the more important reality; we might need to remind ourselves of that occasionally.

Zoe Robinson is Learning and Programmes Director at Kaplan Financial

PM and APM on ‘tough’ list After two sessions in which there was a lot of disruption around the world due to the pandemic, ACCA was able to run 132,000 exams in September across the vast majority of its global markets.

Remote invigilated exams were implemented where local regulations closed centres. Students in India and Pakistan, two big markets for ACCA, had to sit exams this way. Despite local technical issues more than 14,000 exams were successfully completed, said ACCA. There were also technical issues in the UK, which hit 6% of sitters (see

November issue for the full story).

In all over 103,000 students entered exams in September and 4,219 students have now become affiliates.

Alan Hatfield (pictured), ACCA executive director – strategy and development, said: “We have been listening to feedback, acting on it and are now preparing for the December exams.

ACCA is committed to health and safety of our future members, and we are working hard to ensure the end of year sittings can be taken

despite challenges of potential city lockdowns across the globe.”

Turning to the pass rates, the PM and APM exams at 39% and 33% respectively seem to remain the ‘papers to pass’! AA, with a pass rate of 41%, and AAA with pass rates of 33%, also stay on the ‘hard list’ with them.

Students behaving badly

student Charles Stanton has been reprimanded, with costs of £2,325 imposed. He had been found guilty of assault and sentenced to a Community Payback Order, after an all-day drinking binge and fight outside a night club.

ICAEW member James Phipps, who was convicted of assault in the US, was given a severe reprimand by the institute.

Badly behaving students and members have been disciplined by their bodies for bring them into disrepute.

ACCA PQ Olufemi Gbadamosi was severely reprimanded and ordered to pay £500 after he was convicted of “assault of a person

ICAEW raises investment in Engine B ICAEW has announced it has increased its investment in the AI and digitsation data platform Engine B, taking its total stake to 10%.

ICAEW will also join the Engine B board to ensure the needs of the accountancy profession, particularly large and medium-sized audit firms, are represented.

Founded in 2019 by Shamus Rae, former head of digital disruption at KPMG, Engine B is a single-source data platform. It

KPMG delays results KPMG became the second of the Big 4 firms to announce the delay in the publication of its annual results, according to Sky News. It joins PwC, who earlier said it was delaying its full results until 2021. KPMG said the ‘numbers’, which are due in December, will now not be published until next year, too. The firm’s partners will have to wait to see what pay they receive as the firm works out what levels of cash it needs to get through 2021, based on the first quarter.

10

thereby occasioning actual bodily harm”, and six months later convicted of affray. Gbadamosi crime, apart from the actual crimes, was his failure to bring these matters promptly to the attention of ACCA. Meanwhile, CIMA Scottish

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provides a standardaccess methodology to client data with three guiding principles: • Open Source wherever possible.

• Client data remains with the client.

• Industry intellectual property is used to create intelligent data.

The Engine B consortium is

Deloitte quits as EG auditor Deloitte has quit as auditors of EG Group, whose billionaire brother owners have just bought Asda for £6.8 billion. The Big 4 firm said it has resigned due to concerns over the governance and internals controls of the petrol forecourt operator. KPMG now takes up the role as auditor. EG Group is owned

by Mohsin and Zuber Issa. The Blackburn duo have created a network of some 6,000 forecourts across 10 countries in the past 20 years. Deloitte was reappointed as auditor of the group in 2019 and according to the annual report did not raise any concerns then. EG Group is reported as saying: “There have been no disagreements on any auditing or accounting matters.”

comprised of 10 professional services firms, four academic institutions and one technology house. It extracts key intellectual property, which goes into the Engine B platform to accelerate current and next-generation services, and to support firms and companies in advancing their own digital growth.

ICAEW’s Sharron Gunn said: “Engine B is an exciting crossindustry initiative that will transform corporate transactions and access to data, and we are pleased to be playing an integral role.”

Tech powered healthcare The Covid-19 pandemic has seen GP consultations and hospital outpatient appointments moving from face-to-face to virtual, and PwC research indicates that seven in 10 (72%) of the public are likely to continue accessing GP care remotely even when the risk of the pandemic has diminished. Healthcare and industry professionals believe digital access to NHS services is the highest priority change that could be made to the UK health and care system. Some 62% say digital access to NHS services is the highest priority change for the health and care system, followed by 42% feeling that mandating technology standards is also a high priority change.

• Read more at https://tinyurl.com/yyq6ssal PQ Magazine December 2020

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PQ tech news

MIKE DAY Five ways to help small businesses thrive

Xero commissioned Forrester Consulting to uncover the impact of Covid-19 on small businesses and how they responded to the pandemic.

The study produced five key recommendations: • Build meaningful emotional connections with your customers.

Buying from smaller rather than larger businesses isn’t always a functional decision. Some 93% of consumers will trust, recommend and buy from businesses that demonstrate empathy.

• Seek help from the power of your ecosystem. Thriving businesses seek help and surviving businesses don’t.

Ecosystem here being other small businesses, larger enterprises, government agencies and advisers such as accountants.

• Eliminate inefficiencies with cloudbased tools; 49% of business owners use cloud technology, up from 32% in 2019. Businesses who thrived over this period also showed a higher percentage of online revenue.

• Make financial information easily accessible and digital. With 74% using government funding to stay afloat and 58% saying their cash flow position got worse. Accessing revenue, cash flow and payroll information that is as real-time as possible is key.

• Predict and plan for the future.

Typically, small businesses aren’t prepared to deal with supply chain disruptions. Business owners need to be strategic in planning their response and have the ability to pivot.

You can read the whole study at tinyurl.com/y4lrgjxh. I would say it’s important reading for every PQ. Mike Day, Director, UK Education Sector, Xero

Blockchain to boost sagging UK economy Blockchain technology has the potential to boost the UK’s gross domestic product (GDP) by £57 billion over the next decade, new analysis by PwC shows.

PwC’s global blockchain leader, Steve Davies, said blockchain has long been associated with cryptocurrencies such as Bitcoin, but it has much more to offer, particularly in how public and private organisations secure, share and use data.

He explained: “As organisations grapple with the impact of Covid-19 we have seen an acceleration in many disruptive trends. Our analysis shows the potential for

blockchain to support UK organisations in how they rebuild and reconfigure their operations, underpinned by improvements in trust, transparency and efficiency.”

The study suggests a tipping point in 2025 as blockchain technologies are expected to be adopted at scale across the global economy.

The biggest beneficiaries from blockchain technology look set to be the public administration, education and healthcare sectors in the UK, says the report. PwC economists expect these sectors to benefit to the tune of £22bn by 2030, by capitalising on the efficiencies blockchain will bring to the world of identity and credentials.

Meanwhile, there will be broader benefits for the wholesale sector (£15bn), retail services (£13bn) and communications and media (£5.3bn) by 2030. They will benefit from using blockchain to engage consumers and meet demand for provenance and traceability.

Apple makes jump with 5G iPhone 12 Apple has confirmed its iPhone 12 will work on the faster 5G networks.

The new iPhone 12 comes in four different models, and claims to be lighter, thinner and faster, and has a screen that is four times harder to crack.

Apple CEO Tim Cook said: “5G will bring a new level of performance for downloads and

uploads, higher quality video streaming, more responsive gaming, real-time interactivity and so much more."

In another first, none of the devices will be bundled with headphones or a charger. Apple claimed the move was to help reduce its impact on the environment.

BA fined £20 million over data breach British Airways has been fined £20 million by the Information Commissioner’s Office (ICO) for a data breach that affected over 400,000 customers.

The ICO had originally indicated that BA could be facing a fine of around £180 million. That said, the £20 million fine is the biggest penalty issued by ICO to date.

The breach, which took place in 2018, affected both credit card and personal data. Customers were redirected to the fraudulent site, but BA only discovered the problem two months after the incident when a security researcher unearthed it.

A post-breach investigation found that BA did not

use multi-factor authentication, when some of these measures were available on the operating system it was using at the time.

Tech briefs UK tech start-ups are up The number of new UK tech start-ups has risen by almost 16% this quarter, says RSM. Figures from Companies House show 10,435 software development and games businesses have been incorporated so far this year.

Regional figures show strong growth in many areas of the UK, with Scotland seeing a 57% increase in the number of tech start-ups in quarter three compared with quarter one figures.

Second highest was the West 12

Midlands with a 48% rise, and Northern Ireland saw a healthy 44% increase. The East Midlands grew by 36%, while the North East has seen 29% growth since Q1.

Sweden bans Huawei from 5G Sweden has joined a growing list of countries to ban Chinese telecoms groups Huawei and ZTE from its 5G mobile networks.

Sweden’s telecoms regulator revealed that its decision for the ban was based on advice from armed forces and security services.

It has now given operators until 2025 to remove equipment made by the Chinese companies from their existing infrastructure for core functions. The head of Sweden’s security services, Klas Friberg, claimed China was aiding its economic development and military reach by “extensive intelligence gathering and theft of technology, research and development”.

Marriot fined £18.4 million Marriot, the world’s biggest hotel company, has been fined

£18.4 million by the Information Commissioner’s Office after one of the largest data breaches in history.

This summer the ICO had said it would be fining Marriott £99.2 million, following the personal data of some 339 million guests being compromised. The hotel group lost names, email addresses, phone numbers and unencrypted passport numbers. However, the fine was re-evaluated in light of the current economic crisis and the work Marriott has done to put things right.

PQ Magazine December 2020

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PQ email graham@pqmagazine.com

HAVE YOUR SAY ACCA report shocker I have to say I am still in shock by the news that ACCA students won’t get an Examiner’s Report after each exam.

I found the report a precious resource, and I loved using it not only to look at the exam I had just sat but also the one I was due to sit next. They really show where students were going wrong and provide a timely, real connection between the ACCA, the examiner and us, the customer. But not anymore, it seems.

I know that tutors also love them and they pick out all the relevant information from each sitting to help us, too.

For years ACCA has promoted

the report as essential reading.

Not so essential that they are going to keep providing them though! We receive regular emails

throughout the year promoting this wonderful resource, but now it will only come out twice a year.

I thought ACCA was promising to provide us with more resources, not fewer!

Why do the ACCA think it’s also fine to announce the decision after the September exam – talk about unfair for people expecting them and wanting to use them.

Surely, as others have said, ACCA should have announced this reduction in service before the exam. Also, what about asking us? I know what I would have said – keep them!

I now think we students (and PQ magazine) should start a campaign to bring them back.

Name and email address supplied

Our star letter writer wins a fantastic ‘I lovePQ’ mug!

Praise where it’s due I see you have got ACCA to promise it will be ‘Monday-ready’ for the December exams. I hope this is so, as I will be sitting them this time around. I am also at a new venue so there is heighted anxiety there. To be honest, I have always sat my ACCA exams at a centre, but I did seriously look at going remote this time.

I also saw your story online about the latest exam results and see that over 132,000 exams were sat in September across the world. Is no one else impressed about how well ACCA is doing in ensuring we can move forward with our careers?

Remote invigilated exams have arrived perhaps quicker than anyone expected. I know CIMA was ahead of the curve, but ACCA has caught up quickly. And hey, I know AAT isn’t even trying to go down this route (well, according to my friend studying AAT).

Name and email address supplied The editor says: We have been monitoring the situation and ACCA has closed exam centres in over 45 markets for the December sitting.

Those signed up will be offered a remote invigilated exam. And we agree with you – we think ACCA has worked wonders to keep disruption to a minimum.

Sorted, thanks to pqjobs.co.uk

Concessions, please!

I read with interest the news that CIMA was offering its students a free exam resit (again), and wondered why none of the other bodies were following suit.

At the start of the pandemic AAT was equally as generous, offering

students a three-month concession on renewals. At the time CEO Mark Farrar said that AAT was monitoring the situation and if the association feels it appropriate it will offer extra extensions. Well, the time is nigh, AAT. Name and email address supplied

social media ROUND-UP Tom Clendon, a leading ACCA SBR online lecturer, recently asked online if PQs preferred studying old school and in school or studying at home online.

Tom Clendon

Rahul responded: “Always in the classroom – nothing can replace personal attention and face-to-face conversation with a teacher. It’s a personal opinion.”

Katrin disagreed, explaining: “I prefer online (in a library or study in the office) because I can stop whenever I want and study at my own pace. I have tried the physical classroom, but I am a really bad listener and after 5 minutes I am already bored and not focused.” Trone put in a vote for old school: “Definitely classroom. The interaction with the tutor and other students is so valuable. I like the structure as you have to attend the day and can’t push back to the weekend like you can with self-study from home.” Back came Govind with: “Online videos are better. I get the flexibility to work out twice a day if I feel to.”

Votes kept coming in for both, and then Tufal playfully asked: “What’s the classroom again?”

Aamna stressed both are good: “Blended would be superb. It also depends whether you are a fulltime student or juggling between work and study. Live interactive with recordings suit me.”

What is really interesting is the support for studying old school and in school; the flexibility of online learning is hard to argue against, but as Trone says it requires discipline and selfmotivation. Clendon agrees that it’s all about horses for courses – you have to understand how you learn best and go with it.

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

Published by PQ Publishing Ltd © PQ Publishing 2020

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PQ crowdfunding

The price of people power Tom Clendon outlines what crowdfunding is and how you should account for it

What is crowdfunding?

Traditionally, when companies wanted funding they would either go to a bank to borrow or issue equity via the stock market. The internet has facilitated the disintermediation of raising finance. This simply means that companies can raise finance (get funding) direct from investors (the crowd). So crowdfunding is the funding of a new start up or project by collecting cash from a variety of individuals or entities (the crowd).

How to account for monies received from crowdfunding?

There is no specific accounting standard that deals with the accounting of cash received from a crowdfunding operation. And it is this that potentially makes it a current issue to be examined at SBR! Clearly when cash is received the asset of bank will be debited. But where to credit? Before reaching any conclusion, it will be necessary to properly understand the true nature of the terms of the crowdfunding. What does the crowd get in return? Do they have a right to their money back? Are they now a part owner of the business? Has the business sold them something in return? These are the key issues to resolve!

applies. The default accounting treatment for such financial instruments is amortised cost.

The profit and loss account will be charged with an effective rate of interest on the debt.

Crowdfunding could be equity If the monies that have been received represent a payment in return for an ownership interest; then an equity instrument has been issued.

Again, the relevant standard to apply is IFRS 9 Financial Instruments. Such an issue of equity shares is also initially recognised at fair value less issue costs; i.e. the net proceeds of issue.

Crowdfunding could be revenue It is possible that the monies have been received because the company is making a sale. In return the crowd are getting a product or service. If that is the substance of the crowdfunding arrangement, then IFRS 15 Revenue from Contracts with Customers applies. Revenue will be recognised when the performance obligations are fulfilled and control passes.

Crowdfunding could be debt!

If the monies that have been received have to be repaid, then there is a present obligation and a liability is recognised. This financial liability would be initially recognised at the fair value less issue costs; namely, at the net proceeds of issue. IFRS 9 Financial Instruments

Conclusion It will always be necessary to understand the terms that underpin any monies received through crowdfunding so that the accounting treatment is a faithful representation.

• Tom Clendon is an online lecturer for SBR. He can be reached by WhatsApp (07725 350793) or via www.tomclendon.co.uk

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16

PQ Magazine December 2020

studying online PQ

Embracing edtech Mark Mckenna explains why you should utilise all the benefits online learning can bring – even if it’s not your preferred way to study

S

ince the onset of the Covid-19 pandemic, colleges and training providers have needed to adapt quickly to minimise disruption to their courses and apprenticeships. As a result, many students are now learning exclusively online – even though this may not have been how they wanted to study.

With uncertainty and disruption set to continue, and face-to-face contact increasingly limited, it’s important to actively embrace technology to help ensure you get the most out of your accounting course or apprenticeship.

I have some suggestions on how edtech can help greatly with your studies and exam preparation, as well as helping keep you connected to the outside world.

Teaching on demand Access to high-quality online tutorials is one of the major edtech benefits for students, with key concepts and teaching available

on demand. Ask your college or training provider what you are able to get access to, including seeing whether any scheduled online classrooms can be recorded. Having high-quality teaching on demand means you can revise whenever it’s most convenient for you, and without needing to lug any textbooks around.

Practice, practice, practice If your digital learning platform includes online quizzes, then seize the opportunity to use them on a regular basis. Practice is essential for any subject, but particularly accounting – make sure that you’re practising questions as much as you can. If there are questions you are having particular trouble with, then make a list of them and put together your own quiz which tackles those topics you find tricky.

Seek out variety Alongside the resources provided by your college or training provider, there are a

wealth of resources available online, which can provide variety and new insights into a particular accounting topic or concept.

For example, the AAT’s own learning portal contains plenty of e-learning resources, including key calculations, videos, green light tests, and practice assessments.

Staying connected If you’ve already finished your lessons, it doesn’t mean you need to cut contact with your tutor. Make sure you reach out to them when you have any questions or need support in a particular area, even if your lessons have already been completed. Don’t forget your classmates too; be sure to stay in touch with them by forming email and/or Whatsapp groups for support.

Lastly, it goes without saying that exams are stressful, so take care of your mental wellbeing. Make sure you get enough time away from studying to get plenty of sleep, exercise and time with friends and family (choose video calls over texting where possible). And remember, we’re all in this together, so do also stay connected with your tutor and fellow students as you figure out the best way to make the most of edtech and your new learning journey.

• Mark Mckenna is the founder and Managing Director of Mindful Education

Registered Tuition Provider

PQ Magazine December 2020

17

PQ test bank

So what do you know?

Philip Dunn tests your knowledge of process costing

Q1. Which of the following businesses would not use a process costing system?

• A limestone quarry.

• A brewery.

• An agricultural engineers – repairs and servicing.

• A vegetable canning company.

Crescent Ltd produces Chemit, which passes through a single process. A normal loss allowance of 5% of the input is agreed and each waste unit has a residual value of £4 per unit.

In week (1) of October the following information relates to the process: Direct material 400 units @ £10 per unit.

Direct labour 40 hours @ £12 per hour.

Overhead recovery rate £15 per hour.

Q2. What would be the direct and indirect costs debited to the process account in week (1)?

Q3. What would be the normal loss allowance in units for the week?

Q4. What would be the value of the normal loss allowance credited to the process account?

Q5. If the output for the week was 380 units what would be the value of the finished product per unit? (to two decimal places)

Q6. If in the scenario outlined above the output for the week had been 350 units, what would be the abnormal loss in units?

Q7. What would be the value of the of the abnormal loss for the period (to the nearest £)?

Q8. What would be the value of the finished output for the period (to the nearest £)?

Crescent Ltd produces a further product,

Pedchem, which passes through two processes.

A normal loss allowance of 10% of input is agreed for both process 1 and 2. The residual value of a waste unit is £8. In week (1) of October the following relates to process 1: Direct material 800 units @ £15 per unit.

Direct labour 40 hours @ £12 per hour.

Overhead recovery rate £15 per hour.

Output and transferred to process 2,700 units.

Q9. What would be the total of the direct and indirect costs debited to the process account?

Q10. What would be the value of the normal loss allowance credited to the process account?

Q11. What would be the value of the abnormal loss (to the nearest £)?

Q12. What would be the value of the finished output transferred to process 2?

In week (1) of November the following relates to process 2: Units transferred from process 1 – 750 units value £13,125.

Other processing costs £1,100.

Normal loss allowance 10% of input, residual value of waste units £8.

Output for the period 715 units.

Q13. What would be the value of the finished output?

Q14. What would be the abnormal gain in units?

Q15. What would be the value of the abnormal gain debited to the process account?

Answers: Q1. Agricultural engineers Q2. £5,080 Q3. 20 Units Q4. £80 Q5. £13.16 Q6. 30 Units Q7. £395 Q8. £4,605 Q9. £13,080 Q10. £640 Q11. £346 Q12. £12,094 Q13. £14,432 Q14. 40 Units Q15. £807

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18

PQ Magazine December 2020

the workplace PQ

Monkey see, monkey do Research has found that junior accountants imitate a senior’s behaviour if they hold influence over their future promotion. Kristof Stouthuysen explains all

D

espite their thorough preliminary training, junior accountants often lack the knowledge and experience required to apply the law and auditing standards correctly in practice. That is why they are supervised during audit assignments by an experienced senior who gives them coaching. What role does imitation play in the relationship between the junior and senior accountant?

Through research, we aimed to investigate the impact imitation plays in the relationship between junior and senior accountants during auditing assignments on audit quality. We found that junior accountants are much more likely to imitate the behaviour of a senior accountant if they think that they have an influence on their likelihood of future promotion. However, our findings also demonstrate that junior accountants will not simply imitate any senior accountant: it also depends on how the junior perceives the senior’s working style.

I conducted this research alongside colleagues from Tilburg University, Rotterdam School of Management and KU Leuven, with support from Professor Olof Bik, managing director and scientific board member of the Foundation for Auditing Research.

As part of the study, we observed 138 junior accountants working for the Big 4 accountancy firms – Deloitte, PwC, Ernst & Young, and KPMG – while on their audit assignments. During our observation, junior accountants had the task of valuing a business unit using a senior auditor’s previous working documents for the valuation of a similar business unit for the same company.

The senior’s working style was reflected in the working documents, so junior accountants could use these to generate a perception of how their senior worked. Some documents showed a senior accountant to have high diligence, and a professional and critical working style, while some documents reflected the opposite.

The working documents also included a PQ Magazine December 2020

character sketch of the senior accountant and information about the influence of his or her opinion on the junior accountant’s future promotion.

We found that juniors would imitate a senior if he or she has a decisive influence on their likelihood of future promotion.

However, a senior’s working style made a difference on whether they were imitated. Juniors were more inclined to imitate a senior if the latter has a professional and critical working style, they did not imitate their senior’s behaviour if they perceived them to be less professional and less critical in their work, even if they had an influence on their promotions. Furthermore, it was not enough for junior’s to simply copy the working documents of a professional senior. For a successful audit, they must also have their own knowledge and professional, critical working style.

This research clearly indicates that junior accountants follow the good behaviour of their

seniors, even more so when they believe them to have an impact on their future promotions. It is encouraging and reassuring that they appear to not imitate their senior’s when they have a poor working style, even if they do have an impact on their likelihood of promotion.

This tendency for juniors to only imitate seniors when thought to have a professional working style is a positive sign, as it suggests they have a healthy dose of professional scepticism, and demonstrate their own professional and critical attitude. It also proposes a sense of integrity amongst the junior accountants when it comes to their work.

These findings also indicate that, while accounting practice is bound by standards and rules, the quality of the audit is also determined by very human factors such as social interaction.

Senior accountants and managing partners need to be aware that they play an exemplary role in the training of juniors. If a partner doesn’t have the courage to ask a client questions, you can’t expect a junior to do so.

The results of the study have important implications for junior and senior accountants as they demonstrate the significant role that senior accountants play in the coaching of juniors and ensuring the next generation of accountants have high diligence, professional attitude, and critical working style. Therefore, seniors assigned to a mentoring role should not only exhibit high levels of diligence but should also provide sufficient training by proactively helping juniors in understanding various audit procedures and techniques and encouraging critical thinking.

In a follow-up to this study, we will be looking at ‘groupthink’ in accounting, and whether this stops colleagues from reporting mistakes or errors. We hope to use research into this area to gain insights into the extent to which imitation and herd behaviour takes place and their effect on the quality of the audit.

• Kristof Stouthuysen is Professor of Management Accounting at Vlerick Business School and KU Leuven

19

PQ ACCA spotlight t was Global Ethics Day a few weeks ago and at ACCA we actively play a part in celebrating this international day. And, as PQs, you would all be aware just how important ethics is to ACCA and how proud we are to uphold and promote the highest ethical standards. So much so, all our students have to complete the Ethics and Professional Skills module as part of the qualification.

That is also why we chose to have ethics as part of our organisation’s current quarterly theme. But this year we’re focusing on how we rethink business for a sustainable recovery globally, while exploring how the devastating effects of Covid-19 has left professional accountants facing new ethical dilemmas as business recovers.

Ethics isn’t new on the agenda for accountants, but Covid-19 certainly has created new challenges that can create the risk of compromise to ethical behaviour.

In ACCA’s most recent discussion paper, ‘Ethics in a Covid-19 world’, we examine the role of ethics during and after the pandemic.

The paper reveals one in five respondents has directly or indirectly, via a work colleague, encountered a situation where as a result of Covid-19 ethics were at risk of compromise.

Among those who had experienced such compromise, a quarter of issues related to the use of technology.

The ACCA Code of Ethics and Conduct is binding on all members and students, as well as any partner (or director) in an ACCA practice. It is based on the Code of the International Ethics Standards Board for Accountants (IESBA), and the fundamental principles set out are the same as those of IESBA, the latter outlines these as part of its enhanced conceptual framework.

This framework involves identifying the threat, evaluating any such threat and addressing it.

Below is an outline of the various types of threats professional accountants may encounter: • Self-interest threat: The threat a financial or other interest will inappropriately influence the professional accountant’s judgment or behaviour.

I

Ethics

PQ’s Edward Netherton looks at how watching TV can help you think about ethical issues he ACCA’s Ethics Film Festival was held virtually this October, with a Netflix watch party followed by a panel discussion on Zoom. PQ magazine takes a look at the two films screened during the festival

T

ROTTEN: TROUBLED WATER (Netflix, 2019) This episode of the series Rotten covers the dubious and dystopian

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We’re all in it together Covid-19 has made us all rethink ethics, says Narayanan Vaidyanathan

• Self-review threat: The threat a professional accountant will not appropriately evaluate the results of their previous judgment or service performed by themselves, or by another individual within the professional accountant’s firm or employing organisation, on which the accountant will rely when forming a judgment as part of providing a current service.

• Advocacy threat: The threat a professional

world of… water! Specifically, the bottled-water market, which after having been made redundant in the 20th century has seen a monumental resurgence in the past 40 years.

Troubled Water, almost immediately, hones in on one water company in particular – Nestlé – which comes as no surprise; Nestlé CEO Peter Brabeck-Letmathe is on record as saying that the idea that water is a human right is “extreme”.

The programme covers the return of bottled-water to popularity, following French brand Perrier’s rise to fame in 1977. From there, Troubled Water investigates various practices bottled-water vendors utilise and exploit to drive up profits in a billion-dollar industry.

accountant will promote a client’s or employer’s position to the point the professional accountant’s objectivity is compromised.

• Familiarity threat: The threat, owing to a long or close relationship with a client or employer, a professional accountant will be too sympathetic to their interests or too accepting of their work.

From lobbying to change the definition of ‘spring’ water, to using an arbitrary process to ‘purify’ ordinary tap water, they definitely don’t come over as the good guys. Even when they are, like when Nestlé offers to donate six million bottles of water to Flint, Michigan (a town that has

had lead-poisoned water since 2014!), the gesture is met with scepticism by the filmmakers and townspeople alike.

In addition to documenting the profiteering of water in the western world, the programme also highlights issues surrounding bottled water in the developing

PQ Magazine December 2020

ACCA spotlight PQ

• Intimidation threat: The threat a professional accountant will be deterred from acting objectively because of actual or perceived pressures, including attempts to exercise undue influence over the professional accountant.

There are a number of examples of how the pandemic has increased the risk of ethical compromise for accountants and business alike, including: • Time-constrained decision making: Decisions are being made too quickly, without adequate consideration of risks and their implications; or decisions are being made before adequate information is made available. If there have been staff redundancies, decisions may be made by those lacking the training and experience to do so; this issue involves both capacity and capability. So, work done is not subjected to the usual standards of evaluation. Given we are almost a year into the pandemic, there is also a risk such practices could become embedded as business-as-usual unless challenged and changed.

• Remote working: The employer must world, specifically Lagos in Nigeria. It states that $6 billion is made in bottled-water sales in Nigeria alone, even though a bottle costs half a day’s average pay, many of these sales are the Nestlé’s Purelife brand.

This is a disturbing account of how a vital resource is being privatised and sold for profit by huge companies. When a third of the world is still without clean drinking water, Troubled Water warns us of what happens if we put money above necessity.

THE BLEEDING EDGE (Netflix, 2018) This documentary film explores the often-ignored world of medical devices, which is strange considering the industry makes

PQ Magazine December 2020

consider what is the appropriate level of tools, such as staff tracking, and balancing such controls with workers’ privacy. With software tools, organisations can track how much time an employee is online, whether they are typing or idle, their location or even obtaining visual confirmation for certain roles, using the employee’s webcam. Any such monitoring needs to consider the employee’s knowledge and consent, and to be proportionate to the objective to be achieved. There is equally an obligation on the employee to ensure that they are honest in their dealings and do not, for example, misrepresent either their working hours to their employers or their billable hours to clients.

• Assurance services: Maintaining independence is key here, particularly for small to medium-sized practices, where the relationship can stretch into friendship at a personal level, or where the firm is viewed as a trusted friend for broader advice in difficult times. Threats can manifest themselves in various ways. For example, there may be a pressure to reduce fees, take late/ instalment-based payments or other forms of

revenues of roughly $400 billion annually.

Focusing in on how the industry functions, with an emphasis on the US, the film comments on the industry’s regulation (or lack thereof), the cover-ups by medical companies, and the profit-chasing

implicit loans or waivers. This could translate into an intimidation threat that can affect competence and due care if the same work is to be carried out with fewer resources.

• Increase in fraud: Covid-19 has caused a rise in various forms of fraud. Cybersecurity concerns have been a significant priority and include identity theft, sale of fake goods online, hacking into networks and systems at a corporate level, etc. And this is before considering more traditional contenders that are also on the rise, such as insurance fraud. The idea of safeguards may not have envisaged specific interventions needed to tackle these risks, for example, the risk of data theft through mass homeworking by almost 100% of staff. Periodic fraud-risk assessments are needed in order to ensure actions are refreshed.

• Ethics across the supply chain: Generally, suppliers are in a position of dependence on their customers and have less power in the relationship. And where the customer is a large company with a network of smaller independent suppliers this power imbalance can be even more pronounced. Covid-19 has imposed severe cash-flow problems and smaller suppliers are even more vulnerable than larger ones. Against this backdrop, it is important to recognise the possibility of intimidation threat, for example if a professional accountant at an SME supplier is pressured to sign off on incomplete or misleading information that is needed to retain their significant customer.

What is clear from the above examples is, ethics is everyone’s responsibility – employers and employees alike, but leaders have a fundamental role to play because tone from the top really matters. Organisations look to their leaders to demonstrate authentically ethical, values-based leadership and transparency and doing so creates a cascading positive effect through the organisation.

• Narayanan Vaidyanathan is ACCA’s head of business futures

said companies prioritising making money over patients’ wellbeing.

With examples from a variety of specific devices, such as a birth-control procedure that was exposed as dangerous (leading to Bayer removing it from circulation after the screening of

the film), and hip replacements that cause cobalt poisoning and psychological damage.

The Bleeding Edge also explains the lax regulations surrounding medical devices, stating that full testing of a device is not necessary, only that the manufacturers prove the device is similar to a pre-existing one and so utilising a loophole in the FDA’s system.

This is a terrifying dissection of a morally dubious industry that appears to put profit and gain over the safety of people.

The Bleeding Edge is a tough but important watch, and not without (thankfully) some uplifting moments, demonstrating people’s ability and drive to help one another when corporations and agencies do not.

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PQ CIPFA spotlight

Surviving the storm Alison Sweeting explains how to best prepare for your CIPFA exams amid a perfect storm

I

t’s coming up to exam time for many students and, in addition to the usual pressures and stresses of trying to juggle study, revision and exams with work and personal life, we have the added challenge of the continuing Covid-19 uncertainty and restrictions.

There’s no denying that 2020 has been a more difficult and challenging year for us all than any in recent memory, not just personally, but also at the national and global levels.

How can students best prepare themselves for exams in the middle of this perfect storm? Many of the tips we normally give in the lead up to exams still stand: • Draw up a timetable for revision and try to stick to it: Be reasonable in the time you allocate to revision. You’ve done the learning.

This is about practising your exam technique, focusing on the areas where you know you

are weaker and remembering the advice your trainers have given you during the term.

Remember that every part of the syllabus can be examined, even if it hasn’t been covered in the classroom, so don’t ignore the selfstudy elements.

• Get plenty of sleep: It’s tempting to stay up late, fuelled up by caffeine, and get in a few more hours of revision. You’ll not be at your best if you haven’t had enough rest and your brain won’t retain what you are revising. Far better to make time to relax before you go to sleep so that your brain has a rest as well as your body. Then you can come fresh to it the next day.

• Eat and drink well: Don’t skip meals because you’re reluctant to leave your studies. Eat healthy food (protein, vegetables, fruit, nuts) but don’t deny yourself an occasional treat if

you want one. Keep hydrated – drink lots of water and try not to have too much caffeine or alcohol. Your quality of sleep will thank you for it!

• Get some fresh air and exercise every day: With the short days and colder, damper weather, it’s tempting to hibernate and bury your head in your books. A brisk walk, even for as little as 15 minutes, will help your circulation and blow away a few cobwebs.

• Take vitamins: If you’re suffering from a lack of sunlight, as many of us are in the long winter months, take some vitamin D supplements.

• Try to keep it in perspective: Passing your exams is important, but you have other important things in your life too. Try not to neglect those and use your family and friends to support you through this period.

• Remember, what you want is a safe pass: You don’t need to get 100% and not everyone will be a prize winner. You want to go into your exam feeling confident you know enough to get a safe pass. Manage your time and remember to breathe!

There is no shame in saying that you are finding life difficult – there is help available.

Earlier this year, CIPFA ran a series of wellbeing webinars for our students. These live sessions were recorded and are available to all our students in their CIPFA Learning account.

We are running a second series of webinars in November and December and we hope these will provide support and information to our students. If you are struggling, your employer may have an employee assistance scheme that you can access. Use this if you need to – it is there to help you. CIPFA is also training some staff and students as Mental Health First Aiders to provide extra support. We take the mental health of our students seriously and hope that this initiative will be of real benefit.

The continued uncertainty of Covid-19 adds an extra dimension to the challenge, and it’s more important than ever that we take care of our mental health during these challenging times. The dark and damp of the winter months make another lockdown, even a partial one, more difficult than earlier this year.

• Alison Sweeting, Interim Operations Support Manager, CIPFA

Award-winning AAT courses and apprenticeships Flexible learning to suit your lifestyle mindful-education.co.uk/students 22

PQ Magazine December 2020

2021 and Beyond: The New Normal for Accounting Around The Globe Back by popular demand, join LSBU Business School and PQ magazine as we host our 4th annual accounting conference on Wednesday 3 February 2021.

Hear from experts including Lord Sikka, Professor Richard Murphy, and Hays UK Director Karen Young and leading companies including Xero, Anti Money Laundering Compliance Company – and many more.

We’ll explore: • Global changes in accounting • Accounting in a post-COVID world • AI and the cloud • Future of accounting • Equipping yourself for the future job market

To find our more, visit lsbu.ac.uk/whats-on and follow LSBU Business School on LinkedIn

PQ CIMA study tips

Planning for success Mark Foley has some time management tips to boost your CIMA studies

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aving worked in the training and education sector for over 22 years, I have met and supported thousands of CIMA students through their studies.

Over the years, I have identified several obstacles to effective study but one in particular stands out as a significant challenge, which I hear about on an almost daily basis – a lack of time to study. Do you feel there are never enough hours in your day? Do you feel a bit overwhelmed by how much you need to get done? If that seems familiar, here are some handy tips to help you manage your time more effectively.

Begin with the end in mind What’s your end goal? What’s the timeframe for achieving it? Once you have defined this, you can start making decisions about how you are going to get there.

For example, let’s assume you wish to earn your CIMA qualification by 2023. You need to break your journey down into smaller, manageable parts and identify milestones. This includes, for example, choosing which study method suits you best, setting and sticking to deadlines, breaking study topics into smaller chunks and booking your exam in advance.

Comprehensive planning will allow you to set effective and achievable objectives. Each milestone you reach will help you feel motivated towards achieving your goal of qualifying with CIMA and building your dream career.

Make the most of technology Technology can be a wonderful tool to help

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improve your time management skills, allowing you to become more organised and reduce distractions.

You may want to consider using online calendars such as Google Calendar to input your study plan, manage deadlines, and track your progress. In addition, you may want to use productivity apps such as Trello or Remember The Milk, which have features such as to-do lists, to help you organise and track your study time.

Do you find yourself looking at your phone every time you get a notification, or randomly start browsing the internet for things you don’t need when you were meant to be studying? If so, then you’re not alone! Take a look at StayFocusd, a Google Chrome extension that limits the amount of time you can spend on certain websites.

Pomodoro Timer & To Do List is another great app to help you keep your focus; you select a task you need to accomplish, set a 25-minute timer and start working, and when the timer rings you take a five-minute break.

Prioritise When studying for your CIMA exams, it’s essential that you prioritise tasks and activities so that you use your time both effectively and efficiently.

However, how do you choose which ones to go on top of the to-do list?

You can use Einsenhower’s Urgent/Important Principle to decide which tasks and activities are the most important. Start by listing the tasks and activities, however small, you feel are required to reach your goal. Next, place them into one of the following categories to get a clearer picture of what you should focus on: • Important and urgent: Tasks and activities that need to be completed now to achieve your long-term goal. You should perform them immediately.

• Important but not urgent: Tasks and activities

that will help you achieve your goals but are often ‘put off’ as they lack a hard deadline.

Put them in a study planner and commit to performing these.

• Not important but urgent: Tasks and activities that will prevent you from achieving your goals. You should think about whether you can reschedule or delegate them.

• Not important and not urgent: These tasks and activities are just a distraction from your main goal, and, where possible, you should avoid or cancel them.

Avoid procrastination Procrastination is an issue that affects most of us at some point. The first step in tackling procrastination is acknowledging that you are in fact putting off certain tasks and activities; then you can go on and identify what the root cause may be. To make things easier, start breaking the tasks and activities into 15-minute chunks, this will help you to fully engage with them and sharpen your focus.

Once you have performed this, put each chunk into your time planner and fully commit to completing them. Give yourself a small reward when you finish a task or activity to keep motivated.

This is a particularly useful way to break this habit and will allow you to progress your study journey in line with the milestones you’ve started creating.

• Mark Foley, Director of Relationship Programmes – Management Accounting, Association of International Certified Professional Accountants This article is based on a time management webinar delivered in conjunction with Kaplan’s Head of Learning, Stuart Pedley-Smith. Watch it in full using the following link: https://bit. ly/3oGO3jw PQ Magazine December 2020

ethics PQ

Careless talk…

Bryony Clear Hill has a stark warning to all PQs: watch what you say on social media

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he modern workplace can be an ethical minefield. This column will help you tackle the thorny, but very real, challenges that management accountants face in the workplace.

Written by the CIMA professional standards team and based on realistic situations, the following is a practical guide to using the CIMA Code of Ethics to guide good decision-making.

financial difficulties, and you agree with what your ex-colleague has written. You would love to reply to the tweet and confirm their suspicions – that would send a clear message to the company that it is treating its employees badly, as well as warning any potential employees and investors about the cultural and financial issues at the organisation.

What should you do?

The scenario Whilst it might be tempting to retaliate against You’ve been working as an accountant at the way you have been treated by DodgyCorp, DodgyCorp for five years when you find out you should be very careful. You have obligations your role is at risk of redundancy. You’ve had to keep information gained as an employee multiple disagreements with your line manager, confidential. who you feel has treated you unfairly, being Under the fundamental principle of overly critical of your work and excluding you confidentiality, the CIMA Code of Ethics from the team. states that you must not “disclose confidential You see on Twitter that a previous colleague information acquired as a result of professional who was made redundant last year has tweeted: and business relationships outside the firm So glad I left @DodgyCorp last year. Terrible or employing organisation without proper and company who mistreat their employees. And specific authority, unless there is a legal or I’ve heard rumours that they’re in the red. Can professional duty or right to disclose”. anyone confirm? #bademployer #avoid 08:30 PageAs1a management accountant, you are likely pq jobs ad 193 x 74 16/3/10 You happen to know that DodgyCorp is facing to have access to financial information that is not

publicly available, and you must not share this information unless you have been authorised.

Social media can be a public forum. You should be very careful posting or responding on social media, especially where it relates to your job or you have identified yourself as an employee of an organisation.

Many employers include a clause in an employment contract or have a specific social media policy which states what you can and cannot say on social media. You should make sure you are familiar with any policies.

Even if there is no policy, you should be cautious about criticising an employer on social media, as it could make your situation at work worse. It may also look bad should you apply for other positions in the future. Many employers will look up a candidate on social media platforms during the recruitment process, and being critical of a previous employer is unlikely to create a positive impression.

You should also consider how it might affect the reputation of the management accounting profession, were you to post negative comments about an employer and especially where you are identifiable as a CIMA member.

Under the principle of professional behaviour, the Code states that “a professional accountant shall not bring the profession into disrepute.”

You should consider whether your posting about the behaviour of others in the organisation, or the financial difficulties of the organisation, could make either yourself or others appear unprofessional.

When it comes to social media, the best approach is to be cautious. Consider whether you have the correct privacy settings in place, and remember that even if you do, others may be able to share comments you have made, and it can quickly move out of your control.

Be aware that liking or sharing posts can be interpreted as your endorsing a point of view. It is also important to note that laws on what you can and cannot share relating to an employer vary by country, so you should be aware of your particular context.

• Bryony Clear Hill, Associate Manager – Ethics Awareness at the Association of International Certified Professional Accountants This article was first published in FM Magazine in July 2020

Sorted, thanks to pqjobs.co.uk

PQ Magazine December 2020

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PQ AAT student Q&A

Progress your career with AAT It’s not a case of ‘Lucky Lucy’, it’s more a case of hard-working, focused Lucy! Meet an AAT PQ who completed her AAT qualification in less than three years How have your AAT qualifications helped you progress in your career?

I have gained a wider understanding of the accounting process and can see the ‘bigger picture’ in regards to the finance/accounts department I work in and where my role fits in. It also gave me new skills which I have been able to use in my day-to-day work and having the full qualification and membership will hopefully help for promotions/open up doors to new opportunities in future.

What opportunities have they helped to create for you?

I have learnt new skills, for example with Excel, which has allowed me to create better spreadsheets in my role. I also attended cost control training internally in my company, the content was much more understandable (in terms of understanding terminology and variances, etc.) having studied AAT and I enjoyed the chance to learn more about the business financial position and how we do cost control in a real-life scenario.

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Why was distance learning the right option for you?

It gave flexibility so I could work at my own pace and from home; I self-supported my study so it was the best option to fit around my work/life commitments.

How were the Premier Training learning resources and support on offer?

Brilliant! I loved the mixture of study videos, the help sheets and the regular practice assignments to check in with how you are getting on. The tutors were always very helpful; my tutor Richard was wonderful, supportive and always gave prompt helpful feedback and if he was away one of the other tutors would be on hand to help. The Osborne resources were also clear, easy to follow and had lots of practice questions at the end of each chapter and exam practice papers. These were all invaluable as a combination.

What’s next? More qualifications planned?

Nothing further planned at the moment, but who

Lucy Haffenden knows… one day I may go on to CIMA or ACCA. I really enjoyed learning again and the AAT content.

I feel more fulfilled in my role/sector of work having studied and have no regrets at all in my choice of qualification or training provider.

• Thanks to Premier Training for this article

PQ Magazine December 2020

finance futurists PQ

The future is here

CFO Lewis Dangerfield represents a new era of finance leadership. Here we chart his career to date and discover what makes him tick

L

ewis Dangerfield is a Finance Futurist who has used the combination of analytics and calculated risks to navigate his career from apprentice in a small accountancy firm to CFO at logistics provider Osprey Group. All while leading weekend challenge events for the Scouts.

The Finance Futurists, an initiative by Sage, are an elite group of leaders who embrace constant evolution as a necessity in the everchanging world of finance. This diverse group of finance leaders, selected from a variety of sectors and backgrounds, have been recognised for driving innovation and showing leadership across businesses of all sizes.

In this article Dangerfield explains what he believes to be the key to embracing the new era of finance.

From scout to financial leader Since joining Beavers at the age of six, scouting has been a prominent aspect of his life both as a child and now in his adult life. With an early experience of scouting, he pinpoints it as the start of his management and leadership career.

Most notably, he acknowledges that his ability

PQ Magazine December 2020

to problem solve in a crisis and lead a team has been achieved by his time spent in the Scouts.

After observing operations as a young apprentice, Dangerfield saw the importance of being more than a number cruncher – instead helping to drive change and touch all areas of the business. Dangerfield is the definition of a corporate ladder climber. In five short years, he rose the ranks at Osprey Group by starting as a management accountant to now serving as CFO where he strategically oversees operations, planning, and risk management.

His hard work, ingenuity, and tenacity helped him ascend to the C-suite, and as a member of the Osprey Group Board, Dangerfield is actively involved in formulating Osprey’s future direction and supporting tactical initiatives.

The emerging role of the finance professional The current climate has taught the industry a number of lessons, according to Dangerfield.

As CFO, he states that finance leaders need to be both observational and analytical, and claims the role of the CFO is the person who is one step removed and can see the bigger picture – ultimately helping their ability to respond to different crises as they develop. In

his role, Dangerfield is able to touch all areas of the business, whether it is HR, IT, or other non-sales and ops functions. Understanding each of these industries creates that bigger picture view, allowing him to look at things less narrowly. As a result, the professional is able to have a more tangible effect, whether it is helping an individual or the business as a whole.

When it comes to the current climate Dangerfield highlights that “finance professionals today must be good listeners, and observers. They also need to be analytical and have an eye for detail. They should have the confidence to say what the right way forward is and go for it.”

He said: “Soft skills are also key to being successful. For me, the three most important skills I look for are being a team player, adaptability, and the ability to think creatively.

Success in business depends on working closely with others and being prepared to jump in and give a fresh perspective when things change, crises happen, or new opportunities arise.

“People must have an appetite to learn, too.

If I see something that interests me, I’ll do my own research about it. You should be ready to jump at the opportunities that come up, even if they’re not in your core line of work. Don’t be afraid to step outside your comfort zone and take chances. You only learn to navigate by getting lost.”

The future of finance Dangerfield started his career at Osprey group with a heavy reliance on book ledgers. He was then able to drive the company to Sage 50, and has now moved to Sage Intacct, a cloud-based system that is more scalable – proving the developments in technology over his career. When considering the way Osprey Group conducted jobs in the past to its current incorporation of technology in day-to-day processes, it is clear that the company now has a more customer-focused business as a result.

In terms of the biggest impact technology is having on finance today, Dangerfield highlights that it comes down to just how much it is helping to streamline processes across the business efficiently. This makes information more readily available. At Osprey, Dangerfield flipped the finance function on its head by placing finance in a position to now serve the rest of the business, where it sees everyone as a customer. As professionals, Dangerfield acknowledges the need to make sure the finance department is giving the business the real-time information it needs to respond quickly and be successful.

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your profession PQ

Numbers game Here are some key facts and trends for the accountancy profession, courtesy of the Financial Reporting Council

A

quick snapshot of the figures released in the latest ‘Key Facts and Trends in the Accountancy Profession’ report shows there are over 164,000 students in the UK and Republic of Ireland studying for a professional accountancy qualification, and another 438,632 studying in the rest of the world.

That means the seven accountancy bodies (see below*) have over 600,000 trainees paying student and exam fees.

A drill down into the figures reveals accountancy student numbers in the UK and ROI are dropping at the biggest recruiter. As of the end of 2019, ACCA had 79,937 students signed up on its books. That’s a 2.4% drop in growth compared with 2018. CIMA, with its 48,520 students, managed a slight rise yearon-year of 0.4%.

The big growth in numbers in 2019 came at ICAS and the ICAEW, with rises of 10.7% and 5.7% respectively. ICAS now has 3,862 students under training contracts and ICAEW 22,842. CIPFA also grew student numbers by 5% and now has 2,047 students in the UK and ROI. ACCA student numbers worldwide tell a different story. It has a whopping 445,186 students studying its qualifications. That is a rise of 3.1% on 2018.

CIMA’s worldwide student figures in 2019 dropped by 9.1% to 107,049 in just one year.

Calling all members The biggest accountancy body, by membership, in the UK and ROI is still the ICAEW. It had 130,928 members as at 31 December 2019.

ACCA, however, broke the 100,000-barrier for the first time with 101,476 members, and it has a compound growth (between 2015 and 2019) of 4% compared with ICAEW’s 1.6%.

CIMA has 83,657 members in the UK and ROI, then there’s a big drop to ICAS with 19,366 and CIPFA with 12,327 fully paid up

29 PQ Magazine December 2020

members.

Altogether that means the UK and ROI has 374,432 qualified accountants. working away.

That means there is a qualified accountant for every 194 men, women and children in both countries!

Becoming an NQ ACCA leads the way when it comes to the sheer number of students worldwide who became members during the year. Some 14,683 ACCAs moved from PQ to NQ status in 2019.

Interestingly, the ICAEW is now converting more students to members than CIMA – 4,359 compared with 3,798. Looking at past figures shows in 2017 CIMA converted 5,147 students to members, so its membership conversion numbers have dropped by well over 1,000 a year for the past two years.

Where accountants work The industry and commerce sector employs the highest percentage of members worldwide (55%) and students (43%). CIMA and AIA members in this sector make up 73% and 87% of their total membership.

Over three-quarters of students at ICAEW, CAI and ICAS are in practice (working for accountancy firms). In contrast, 2% or fewer of CIMA, CIPFA and AIA students are employed in practice.

Some 37,963 members and 47,391 students work in the public sector. The vast majority of students and members here are ACCA. Gender bias Latest figures show that the overall percentage of female students (50%) is greater than the overall percentage of female members (37%). ACCA has the largest percentage of female students in 2019 at 60%. Both CIPFA and CIMA’s female student numbers are 49% of the total.

However, women just don’t seem to be attracted to the ICAEW and ICAS. Just 41%

of Scottish Institute students are female, and 45% of ICAEW trainees. It is hardly surprising then the female members make up just 29% of ICAEW’s total membership – that’s the lowest of all seven bodies.

Do you need a degree?

The accountancy bodies do not require entrants to hold a university degree and offer a range of entry routes. That said, a whopping 92% of CAI PQs have a degree when they sign up, and 75% of these degrees are relevant ones.

This makes the CAI the biggest degree holding qualification.

Over at the ICAEW some 75% of trainees join up with a degree, but only 25% have relevant degrees. Just under half (49%) of CIMA PQs join up with a degree, and 39% of these are relevant. At ACCA 37% of studiers have a degree (with just 19% relevant). Finally there’s CIPFA, where less than one in five (18%) start studying its qualification with a degree, and just 10% are relevant degrees.

Getting the money in The seven accountancy bodies brought in revenues of £481.4 million in 2019. ACCA’s income of £212.7 million is in stark contrast to the AIA’s £1.6 million. The report has also worked out the average income from members and students worldwide. ICAS brings in £683 per student and member, CIPFA £425, ACCA £315 and CIMA £244.

• Check out the full report at https://tinyurl.com/yyfkojeb *The seven bodies in the study are: Association of Chartered Certified Accountants (ACCA), Institute of Chartered Accountants in Ireland (ICAI/CAI), Chartered Institute of Public Finance and Accountancy (CIPFA), Chartered Institute of Management Accountants (CIMA), Institute of Chartered Accountants in England and Wales (ICAEW) and Institute of Chartered Accountants of Scotland (ICAS), and Association of International Accountants (AIA).

29 PQ Magazine December 2020

PQ ACCA December exam tips

December’s exams are nearly here. So, what do the BPP experts say...

PM As any syllabus area could be tested in sections A&B the best advice is to study all areas of the syllabus! Sorry, but you knew that.

Areas expected to be tested in Section C include (but are not limited to): budgetary systems, planning and operational variances, mix and yield variances and evaluation of the company performance (either as a whole, or on a divisional basis).

Given the fact that this is a performance management paper you would be advised to be prepared to evaluate some performance.

PM has the following syllabus areas: a. Information, technology and systems for organisational performance. b. Specialist cost and management accounting techniques. c. Decision making techniques. d. Budgeting and control. e. Performance measurement and control.

General advice: There is no longer any formal reading and planning time at the start of the exam. However, you are strongly advised to plan answers to section C questions before starting to type. Ensure that you make reference to the scenario in your answer.

Finally, the examining team have repeatedly stated that they expect students to study broadly for all of the syllabus areas meaning that question spotting is not a good idea, instead students 30

should expect the unexpected. Since the introduction of MCQs this advice is even more critical because more topics can be tested. The exam will be approximately 40% calculation and 60% discussion, meaning that it is not sufficient to be able to perform all of the calculations.

Interpretation and application are crucial, especially in section C. TX There will be a wide range of topics tested in section A as there are 15 OTQs. We would expect at least a couple of these OTQs to be devoted to the administration of income tax and corporation tax. So, candidates should ensure they are comfortable with the following: • Due dates for the payment of income tax (including payments on account).

• Due dates for the payment of corporation tax (including instalments for large companies).

• Filing dates for the income tax and corporation tax returns.

• Penalties and interest for late payments and returns.

Also likely to be tested in section A of the exam are the following topics: • VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flat rate schemes.

• Inheritance tax due on lifetime transfers both

in the donor’s life and on death.

• Statutory residence tests for individuals.

• Identification of groups of companies for corporation tax loss reliefs and gains.

• Trading loss reliefs for both companies and sole traders.

It is important to remember that section A offers the exam team an opportunity to test the whole syllabus, so practising all kinds of TX questions from the practice and revision kit will help build on and complement your existing knowledge.

In section B of the exam the questions will be similar to those of section A, but there will be a longer scenario to deal with. This means a slightly different exam skill is necessary as you have more information to work through and each OTQ will require you to find the relevant information or data in that scenario. It is not a difficult skill, but we would hope you have had time to practise an extensive range of section B questions from the practice and revision kit before attempting the real exam.

In section C you will face the longer, constructive response questions with scenarios and much more open requirements. Your answers will need not just sound technical knowledge, but also the application of that knowledge to the question you have been asked.

Furthermore, your answer will have to be presented logically so the marker can follow your thought processes. At least 50% of your revision time should be spent answering the section C questions in the practice and revision kit to build up confidence and speed in a way that will also maximise marks.

1. Remember to learn your income tax and corporation tax pro formas.

2. Calculations which require no more than two or three entries into your calculator can be included on the face of your pro formas (e.g. time apportioning a salary). Calculations which are more complex (e.g. company car benefits) need separate workings which are properly referenced (W1, W2 etc) and have a heading.

3. Actually attempt the narrative parts of the requirement – aim for as many sentences as there are marks with each sentence containing something technical. Keep your paragraphs to no more than 3 sentences long.

4. In both numerical and narrative answers leave plenty of space on the page. So, in pro formas – leave a gap between each line (you may need to add something in). Show workings down the page, rather than across the page as it makes them easier to mark. In narrative answers leave a line or two between each paragraph just in case you remember something later. Well spaced answers are also easier to mark – and you always want to keep the marker happy.

We know that the two longest questions will focus on income tax and corporation tax. These are likely to include the following: • Employment benefits.

• Property income.

• Relief for pension contributions.

• Adjustments to profit to arrive at trading income for both companies and sole traders – in past sittings we have seen a number of PQ Magazine December 2020

ACCA December exam tips PQ questions whereby you have to correct errors in computations included in the scenario.

• Capital allowance computations So, remember to cover the whole syllabus when using the practice and revision kit.

Finally, remember the pass mark is 50% so you don’t need to be perfect. If you don’t know something have a guess and move on.

Sometimes you have to do that in order to get follow through marks in section C questions. If you make a mistake, but then use that incorrect figure later in a subsequent calculation, then that’s fine – you can only lose the mark once.

In sections A and B never leave an OTQ unanswered − have a guess if you don’t know the answer. It might be right!

FR Section A: • Fifteen two-mark objective test questions on a wide range of topics including several on consolidation and interpretation of financial statements.

• Expect a few questions on non-core areas (e.g. inflation, specialised entities).

Section B (Case questions): • Three separate scenarios with five objective test questions on each scenario; each question is worth two marks.

• Each scenario could be a mix of topic areas or focused on one topic and will usually consist of two/three calculations and two/three narratives.

• Questions are not dependant on each other and can be answered in any order.

Section C (Constructed response questions): • Two 20-mark questions, one covering interpretations and the other preparation of financial statements.

• One question is likely to be in the context of a single company and one in the context of a group, so you could have a single company interpretation and a groups preparation or vice versa.

• Accounts preparation questions may include extracts or standalone calculations or full statements of profit or loss and other comprehensive income and/or statement of financial position.

• Both questions will cover the accounting for items from other areas of the syllabus.

• May include a short separate part, e.g. with a statement of changes in equity, statement of cash flows extract, earnings per share calculation or linked written topic.

• A consolidation question would include one subsidiary and often an associate, with adjustments, e.g. fair values, deferred/ contingent consideration, PUP on inventories/ PPE, intragroup trading and balances, goods/ cash in transit.

• A single entity question could be preparation from a trial balance or restatement of given financial statements with the usual adjustments for depreciation, revaluation and current/deferred tax (including deferred tax on revaluations) plus a mixture of adjustments on other syllabus areas, e.g. leases, substance over form issues, financial instruments (change in fair value or amortised cost), share PQ Magazine December 2020

issues, government grants, inventory valuation, revenue recognition or construction contracts.

AA All three questions in section B will be broken down into sub requirements and be scenario based. The majority of marks in each question will test syllabus areas B, C and/or D. Areas expected to be tested in questions 16 to 18 include: • Audit planning.

• Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk).

• Internal audit.

• Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls or description of tests of controls).

• Audit procedures (both substantive procedures and tests of controls).

AA has the following syllabus areas: A. Audit framework and regulation.

B. Planning and risk assessment.

C. Internal control.

D. Audit evidence.

E. Review and reporting.

General advice: Where questions are based on a scenario it is essential that you use the information in the scenario to make your answers relevant. You should also think about how you will present your answer – try to use a tabular format in your solutions where relevant as the examining team have stated that candidates who do this score better. Pay attention to the verbs used in question requirements as these indicate the number of marks available. For example, the verb “explain” requires a sentence and will score one mark if properly explained whereas the verb “list” simply requires you to list out information with no further explanation and this will score 0.5 mark per point.

Finally, please read the examining team’s comments relating to past exams which are on the ACCA website: https://tinyurl.com/y3a6xv4z FM Questions in section A will often be knowledge based (testing your knowledge of key technical terms) and will balance out the questions in section B and C of the exam to make sure that all aspects of the syllabus are examined.

It is therefore likely that a good number of these questions will test your understanding

of financial management and objectives (ratio analysis, the concept of shareholder wealth) as well as the economic environment and financial institutions topics (financial intermediation, fiscal and monetary policies). The efficient market hypothesis is likely to be tested here, too.

Each section B case-study will be broken down into five separate two-mark multiple choice questions (so 15 questions in total).

Areas expected to be commonly tested in this section are working capital management (e.g. the operating cycle, the impact of a change in credit period or accepting a factor’s offer), business or security valuations (e.g. methods of valuation), and financial risk management (most likely mainly in the form of currency risk but it is possible that at least an aspect of interest rate risk is examined here).

Section C’s two 20-mark questions will be broken down into sub requirements and be scenario based. These two questions will focus mainly on syllabus sections C, D and E. Section C is working capital management, section D is investment appraisal and is likely to feature NPV with inflation and tax. Section E is business finance; either an evaluation of financing options (interest coverage and gearing ratios are likely to be important here) or a cost of capital and analysis are most likely. Whichever of these three topics does not feature in section C is likely to appear in section B of the exam. Keep checking the ACCA website for articles in the lead up to the exam, any articles written by the examining team are often tested and are important to read.

SBR It is important that you read the examiner’s approach article available on the ACCA website.

ACCA has also published several exam technique and technical articles that you should read as part of your exam preparation.

Specifically for the December 2020 exam session and still valid for future exam sessions, ACCA has released two articles, called ‘Revising for the September 2020 exam session’ (parts 1 and 2). These are available in the exam technique section of the SBR exam support resources section of the ACCA website – www. accaglobal.com.

If you are sitting the CBE there are resources you should access here. The exam section A will be 2 questions, worth 50 marks in total.

Question 1 – usually 30 marks: • Q1 will be based on group accounting. Be aware that this question may test any aspect of group accounting, including consolidated statements of cash flows, overseas subsidiaries and associates and JVs. • Make sure you attempt all parts of the requirement in Q1. The most recent examiner’s report stated that some candidates are not attempting the required calculations and therefore struggling to gain a pass mark on this question.

• To score well, you need to do the calculations and explain the principles underlying the calculations you have performed.

Question 2 – usually 20 marks, including two professional marks: • Q2 will cover the reporting and ethical 31

PQ ACCA December exam tips implications in a given scenario. Make sure you consider any threats to the fundamental principles of ACCA’s Code of Ethics and Conduct in your answer.

• Two professional marks are available in this question for application of relevant ethical principles to the scenario. In order to gain the marks, your answer must be realistic and sensible. Stating that all issues should immediately be reported to the legal authorities without further discussion is unlikely to be awarded the professional marks as this advice is not realistic.

• Make sure that you only spend the allocated amount of time on the second question (e.g. 20-mark question = 20 x 1.95 minutes per mark = 39 minutes maximum).

The examiner has recently commented that students seem to be spending too long on this question and not leaving enough time for the rest of the exam.

Section B will be two questions, worth 25 marks each: • Section B can deal with any area of the syllabus and may be based on a short scenario, a case study with several parts, or an essay.

• Section B will always include a question or part-question involving the analysis or appraisal of information from the perspective of a stakeholder. Make sure you have a go at answering this question. There is no ‘right’ answer at this level – marks will be awarded for sensible points that have been applied to the scenario.

• There are two professional marks available for the question that covers the stakeholder’s perspective. To gain these marks, you must discuss the issue from the perspective of the stakeholder – e.g. if asked for the investor’s perspective, you must answer from the investor’s perspective.

• Current issues are usually examined in section B as a part of a question (not a full question).

However, current issues could be examined in either section A or section B of the exam.

A question on current issues may require the application of existing accounting standards to a current accounting issue - for example, accounting for cryptocurrency.

• The Conceptual Framework has featured significantly in SBR exams to date – be prepared for this.

General advice: One last thing. Make sure you plan your time at the beginning of the exam (and stick to it) to ensure you don’t over-run on particular question – it is 1.95 minutes per mark (or 1.8 minutes per mark if you allocate 15 minutes to reading the paper).

SBL As with all other ACCA exams SBL is examined as a closed book examination. Unlike the other Strategic Professional level exams which are three hours and 15 minutes in duration, the SBL exam has a duration of four hours. The exam builds upon the knowledge that you gained at the ‘Applied Knowledge’ and ‘Applied Skills’ levels. However, it does also have its own distinct syllabus content. As with all other ACCA examinations the pass mark for SBL is 50%.

32

HEALTH WARNING

These tips should only be used in conjunction with proper study. We cannot guarantee that these topics will appear in the actual exam as we have not seen the exam papers.

Examiners are not predictable so it is vital that all core syllabus areas are revised fully.

You will not be issued with any pre-seen information in advance of sitting your exam as everything you will require will be made available to you within the examination itself. The SBL exam will focus on one main organisation, and all of the question requirements will relate to this organisation. You may have to take on a variety of roles which may require you to adopt an internal or external perspective when answering questions.

You will also be required to respond to a variety of people within the organisation. All of the questions in the exam are compulsory. Every SBL exam will consist of 80 technical marks and 20 Professional Skills marks. Question requirements in the exam will assess and link several subject areas from across the syllabus, and these will test your ability to construct appropriate responses and to carry out numerical analysis. The SBL syllabus consists of the following areas: A. Leadership.

B. Governance.

C. Strategy.

D. Risk.

E. Technology and data analytics.

F. Organisational control and audit.

G. Finance in planning and decision making.

H. Innovation, performance excellence and change management.

I. Professional Skills.

General advice: While four hours (240 minutes) may initially sound like a lot of time in which to attempt the exam, it is crucial not to become complacent in how you use this time.

The Strategic Business Leader exam is demanding, and as such you need to give careful consideration to how you will manage your time to make the most effective use of

it. ACCA recommend spending approximately 40 minutes reading, planning and interpreting the requirements and the information/exhibits provided. Based on this estimation when planning the amount of time you will spend on each requirement you should look to allocate 2.5 minutes per mark on offer. This time allocation is based on the fact that the exam is 240 minutes in duration, once the 40 minutes reading time is deducted this gives 200 minutes to write up your answer in order to earn the 100 marks on offer.

You can earn the 20 Professional Skills marks by virtue of attempting the 80 technical marks on offer, so we can divide the 200 minutes remaining over the 80 technical marks to give 2.5 minutes per mark. It is important to note that you can spend longer than the recommended 40 minutes reading and planning your answer. If you do choose to spend longer on this task then you will need to bear this in mind when you come to writing your answers.

Alternatively, you may prefer to work on the basis of two minutes per mark (being 200 minutes divided by 100 marks). Regardless of the method you use when allocating your time it is crucial that you stick closely to your timings as this should help to ensure that you do not spend too long on one question requirement to the detriment of those you are yet to attempt.

Reading question requirements: The SBL exam will contain all of the information that you will require to answer the question requirements set.

This information will be presented in a series of exhibits. To help you locate the exhibits most relevant to answering a specific question it is therefore important that you take the time to read the question requirements set carefully as this should help to direct you.

Furthermore, reading the question requirements carefully is important as this will indicate the role and the perspective from which you are expected to answer the question.

Identifying this early on is important as it will drive how you construct your answer.

Planning your answer: Clearly, if you have gone to the trouble of preparing an answer plan it is important that you use it when writing up your answer. To get the most from your answer plan it is therefore important that you include as much detail as you think will be helpful when the time comes to write up your answer.

When planning your work it is important to bear in mind the ACCA’s guide of using 40 minutes for reading and planning. As mentioned earlier you need to remember that some question requirements may require you to conduct some numerical analysis.

For example, you may be asked to analyse the performance of the organisation featured in the exam. It is important that you plan the numerical analysis that you intend to perform to ensure that you only focus on performing those calculations that are going to support your answer and provide you with something to talk about.

Producing lots and lots of unnecessary calculations for the sake of it will only serve to waste your time in the exam.

Understanding the syllabus and the appropriate use of theoretical models in the exam: To stand the best chance of passing the SBL exam, PQ Magazine December 2020

ACCA December exam tips the PQ you will need to have a good understanding of the entire syllabus. However, it is important to remember that unlike other exams that you may have sat in the past, questions in the SBL exam will not ask you to simply regurgitate your knowledge of a particular topic or theoretical model.

Requirements will test your ability to apply your understanding of the subjects covered in the SBL syllabus in the context of the question scenario.

Furthermore, requirements will not specifically ask you to use a particular model in answering the question. Whether to use a theoretical model when constructing your answer will be a matter of judgement that you will need to weigh up in light of the information presented to you in the exam.

Attempting plenty of questions in the lead up to your exam is the most effective way of developing your judgement in this area.

Understanding the difference between technical marks and Professional Skill marks: Technical marks relate to the knowledge (which we discussed in the previous section), there are 80 technical marks on offer in the exam. By contrast the 20 Professional Skills marks are awarded for displaying the following skills and behaviours: • Communication.

• Commercial acumen.

• Analysis.

• Scepticism.

• Evaluation.

Every Professional Skill will be tested in every SBL exam sitting. The Professional Skill being

PQ Magazine December 2020

tested will be specified under each question requirement.

As you prepare to attempt the exam it is crucial that you take the time to attempt as many practice questions as you can. To increase your chances of exam success you need to ensure that you take sufficient time to develop your understanding of the Professional Skills.

Visit the technical articles page of ACCA’s website. There are often very useful articles on ACCA’s website which cover key exam topics and subjects which may help with your exam preparation. There are also a number of articles about how to approach the exam and how to exhibit the professional skills in your answers. All technical articles can be found here: https://tinyurl.com/y3zw8md8 APM Q1 section A: Q1 of the APM exam will focus on a range of issues from syllabus section A (strategic planning and control), section C (performance measurement systems and design) and section D (strategic performance measurement).

Section A (50 marks) contains one compulsory question. In recent exams Question 1 has often required linking a business’s mission to its performance objectives using the concept of CSFs and KPIs. You may well also have to critique and recommend improvements to performance reports and the balanced scorecard and/or information systems could well be tested in this context. The

assessment of performance is also likely to be tested and this could easily include benchmarking as a theme. Financial performance measures (ROCE/RI/EVA etc) are also likely to be commonly examined in Question 1, but don’t neglect nonfinancial issues from syllabus section D such as quality management and reward systems.

Q2-3 section B: The ACCA have said that one of the section B questions will come from syllabus section E (performance evaluation and corporate failure).

In section B, commonly tested areas include quality management, information reporting (e.g.

Big Data, Lean Information), the application of strategic models (such as PEST, Porter’s 5 forces, the Value Chain), HR frameworks (e.g. reward & appraisal systems), risk management and environmental management accounting.

Keep checking the ACCA website for articles in the lead up to the exam, any articles written by the examining team are often tested and are very important to read. The article on the examiner’s approach to APM is especially worth reading and analysing.

ATX The exam will comprise of two compulsory questions within section A which will both be of a case study style. The first question will be 35 marks in length and the second will be for 25 marks.

Continued on page 34

33

PQ ACCA December exam tips spendable income” or the “net of tax cost of something”.

Don’t forget that across the scenarios we will typically expect to see VAT marks available partial exemption, land & buildings, transfer of going concern, capital goods scheme, overseas VAT and registration/group registration tend to be frequently examined.

There will also likely be a couple of marks for stamp duty points if you remember to think about it in your planning! Finally, don’t forget your basic administration points are also likely to be examined – when do we need to pay tax, when do we file a return and what if either of those are late?

One of these questions will focus on personal tax issues and the other will focus on corporate tax issues. In question one there will be four professional skills marks, and in section A there will be five marks on ethics.

Section B will comprise of two compulsory 20-mark questions. These will be in a more succinct, note form style. The whole syllabus is examinable throughout the exam.

The exam will examine candidates’ ability to analyse and evaluate the tax implications of various situations, numerical calculations will only be required to assist in producing an answer and no purely numerical questions will be set.

Remember that these exam papers would have been written prior to the Covid-19 outbreak and, as such, you should not be addressing any aspect of the virus in answering this paper. Any tax breaks available due to the outbreak are not examinable.

Topics/scenarios we would expect to see are: • Personal income tax scenarios which could involve: investing in a pension; investing in EIS, SEIS or VCTs, share schemes; employment income possibly with termination payments; a personal service company; property income or a takeover.

• Unincorporated business – particularly including loss reliefs, partnerships or basis period rules.

• A question focussing on overseas issues – this could be income tax, capital gains tax, inheritance tax or a corporate scenario.

• Capital gains tax versus inheritance tax including availability of reliefs.

• Corporate scenarios – likely to focus in more depth on intangibles; research and development; losses; corporate groups or consortia.

• Special corporate scenarios such as liquidation; purchase of own shares; close or investment companies.

• A business transformation scenario question such as selling a sole trade business, incorporation, or, in a corporate context, the sale of shares versus the sale of trade and assets.

• Other common types of question/calculation to expect are: • Reviewing a pre-prepared computation to spot, explain and correct errors.

• Calculations such as “tax saved through an action”, “after-tax proceeds”, “the value of a post-tax inheritance”, “net 34

AAA You should by now have a good idea of what to expect – the most recent AAA exams have contained no real surprises, although you should be prepared for the look and feel of the embedded email and supporting exhibits.

If you are sitting the CBE there are resources you should access here. If you were planning to sit in December, you should check here for updates.

AAA has the following syllabus areas: A. Regulatory environment.

B. Professional and ethical considerations.

C. Quality control and practice management.

D. Planning and conducting an audit of historical financial information.

E. Completion, review and reporting.

F. Other assignments.

G. Current issues and developments.

Section A will comprise a Case Study, worth 50 marks, set at the planning stage of the audit, for a single company, a group of companies or potentially several audit clients.

Candidates will be provided with detailed information, which will vary between examinations, but is likely to include extracts of financial information, strategic, operational and other relevant information for a client, as well as extracts from audit working papers, which could include the results of analytical procedures. The date will be set as 1 July 20X5.

Candidates will be required to address a range of requirements, from syllabus sections A, B, C and D thereby tackling a real-world situation where candidates may have to address a range of issues simultaneously in relation to planning, risk assessment, evidence gathering and ethical and professional considerations.

Four professional marks will be available in section A and will be awarded based on the level of professionalism with which a candidate’s answer is presented, including the structure, layout and clarity of the answer provided.

Section B will contain two compulsory 25 mark questions, with each being predominately based around a short scenario. There are no optional questions in AAA. One question will always test syllabus section E, and candidates should therefore always be prepared to answer a question relating to completion, review and reporting. There are a number of formats this question could adopt, including, but not limited to, matters to be considered and evidence expected to be on file, a going concern assessment, the impact of subsequent events, evaluating identified

misstatements and any corresponding effects on the auditor’s report. Candidates may also be asked to critique an auditor’s report or a report which is to be provided to management or those charged with governance.

The second section B question can be drawn from any other part of the syllabus, including sections A, B, C, D and F. Syllabus section G on current issues is unlikely to form the basis of a question on its own, but instead will be incorporated into the Case Study or either of the section B questions depending on question content and the topical issues affecting the profession at the time of sitting the exam (for topical issues, see technical articles below).

General advice on topical technical content and exam technique: The previous version of this subject regularly tested topical issues which were covered by the examiner’s technical articles (for example, the evaluation of misstatements in December 2017). There are also five exam technique articles that you must read covering ethics, risk, accounting issues, audit procedures and reporting. All of the examining team’s articles can be found here. You are strongly advised to keep referring to these articles in advance of the exam.

AFM All AFM exams will have questions which have a focus on section B of the syllabus (advanced investment appraisal) and section E (treasury and advanced risk management techniques). These syllabus areas are therefore high priority areas for your revision.

Q1 section A: We would expect section A questions to cover a number of different syllabus areas, emphasising the need to have a good broad knowledge of the syllabus (so you are strongly advised NOT to target your revision on a small number of syllabus areas). However, questions are often based on core syllabus areas such as: project appraisal (domestic or overseas), business valuations and business/financial reorganisations; these areas often include cost of capital calculations. Risk management may also feature in a number of different ways e.g. value at risk, real options, hedging, risk mapping.

Q2-3 section B: • Risk management (currency or interest rate).

• Dividend policy and general financing issues.

• Real options.

General advice: The 50-mark compulsory question will, inevitably, draw from a number of different syllabus areas. The examiner has said that he does not plan exams by referring to past exams (i.e. checking that the whole syllabus is being tested over the course of a number of exam sittings). These factors mean that question spotting is extremely difficult for this paper.

Remember that this paper is not a maths exam – in all exam questions the examiner is interested in your ability to communicate well and to give good management advice that relates to the scenario in the question. Keep checking the ACCA website for articles written by the examining team in the lead up to the exam, these are often tested and are important to review.

PQ Magazine December 2020

tax PQ

Group relief made simple Neil Da Costa

Group Relief Simplified!

Neil Da Costa shows you how best to tackle exam questions on group relief

Here, I am going to show you how to ‘Keep It Simple’. Having been an Advanced lecturer more 20 years, I amHaving fully aware am Tax going to showfor you howthan to ‘keep it simple’. been of anwhich areas Advanced Taxstudents lecturer struggle for more with. than 20 years I amfeature fully aware of examiners say that These areas regularly in the which examiners sayunderstand that students struggle with.be These areas of tax exams andareas by ensuring you them, you can confident feature regularly in the tax exams and by ensuring you understand them earning these marks in the question. In this article, I will be showing you how you can be confident of earning these marks in the question. In this article to Ideal with groups using a simple example. will be showing you how to deal with groups using a simple example.

I

Identifying Group Relief Groups And Related Companies Identifying group relief groups and related companies

Trading Losses in aa group grouprelief relief group.

Trading lossescan canbebesurrendered surrenderedbetween between companies companies in need75% a strict 75% shareholding and all companies be UK Wegroup. need We a strict shareholding and all companies must bemust UK resident. resident.

On the hand, when identifying related On other the other hand, when identifying relatedcompanies, companies,the theshareholding only needs to be 51%.

As the test is done at the end of the previous shareholding only needs to be 51%. As the test is done at the end of the period, previous period, the group are included as related companies leavingcompanies the group leaving are included as related companies.

The threshold threshold of £1,500,000 divided by the number of companies. £1,500,000 The is divided by the number of is related companies in theofgroup. related companies in the group.

In theInfollowing group, all companies are are UK resident andand prepare accounts from the following group, all companies UK resident prepare from 1 April 2021 to 31 March 2022.

1staccounts April 2021 to 31 March 2022. st the group on 1 July 2021 E leaves the group onE1leaves July 2021

In this question, B Ltd, D Ltd and E Ltd are the claimant companies.

As E Ltd is leaving the group after three months, only £500,000 x 3/12 = £125,000 are available for group relief.

A LTD 80%

90%

B LTD

D LTD

85%

85%

E LTD

C LTD

Company Loss/Profits

A Ltd

B Ltd

C Ltd

D Ltd

E Ltd

(255,000)

320,000

350,000

400,000

500,000

QCDS Paid Rental Profits

(10,000)

(30,000)

50,000

This means that A Ltd, B Ltd, D Ltd and E Ltd are in a group relief group.

C Ltd is not in the group relief group because the indirect shareholding in C Ltd is only 80% x 85% = 68% which is less than 75%.

E Ltd will be in the group for only 3 months (April 2021 -June 2021) because the company is being sold on 1 July 2021.

However, all five companies are related because both the direct and indirect shareholdings are at least 51%. The threshold for establishing the size of the company of £1,500,000 must be divided by five. £1,500,000 ÷ 5 = £ 300,000 Identifying the surrendering and claimant companies The company that gives the loss is called the surrendering company.

The surrendering company has flexibility. It may use the loss itself under current year relief and surrender just the balance to other group members or it may choose to surrender the entire loss to group members.

In this question, A Ltd is the surrendering company. It can use up (50,000) of the loss itself and surrender the balance of (205,000) as group relief or it may choose to give the entire loss of (255,000) as group relief.

The company that takes the loss is called the claimant company. If a company leave the group, then only profits or losses before it leaves the group enter into the group relief.

PQ Magazine December 2020

How much group relief should you give?

Group relief can be given to any company within the group but should be given to bring large companies down to small, hence avoiding quarterly payments.

It is important to compare the profits after qualifying charitable donations (QCDs) with the threshold of £300,000.

B Ltd has profits after QCDs of £310,000 and needs group relief of £ (10,000) to avoid quarterly payments.

D Ltd has profits after QCDs of £370,000 and needs group relief of £ (70,000) to avoid quarterly payments.

A Ltd would therefore give group relief to E Ltd of £ (125,000), next £ (10,000) to B Ltd and finally £ (70,000) to D Ltd. This would leave a remaining loss of (255,000 -125,000 -10,000 70,000) = £ (50,000) that A Ltd can use itself under current year relief.

Loss

255,000

To E Ltd maximum relief = 3/12 x 500,000

(125,000)

To B Ltd to threshold

(10,000)

To D Ltd to threshold

(70,000)

Current Year Relief

(50,000) Nil

The profits after loss relief are as follows: Company

A Ltd

Profits Rental profits

Group Relief 50,000 Profits

C Ltd

D Ltd

E Ltd

320,000

350,000

400,000

500,000

50,000

QCDS Paid

Current Year

B Ltd

(10,000)

(30,000)

310,000

370,000

500,000

(10,000)

(70,000)

(125,000)

300,000

300,000

375,000

300,000

300,000

375,000

(50,000) Nil

Amazing! You have now understood groups and can easily pick up marks on this popular area in the exam.

• Neil Da Costa is a Senior Tax Lecturer with Kaplan 35

PQ ATX exam the definition, this has changed recently.

• Reliefs – IHT/CGT. Know the different conditions and what qualifies for the reliefs.

You can score very quickly by knowing which relief(s) are available to improve an individual’s tax position.

49+1 = a pass!

Richard Poole gives some key tips on how to avoid the common pitfalls in ACCA’s Advanced taxation exam

ATX exam structure The structure of the ATX exam is predictable.

Section A consists of 60 marks (one question worth 35 marks and one question worth 25 marks). Section B consists of two 20-mark questions.

Breakdown of questions Section A and B are broken down into multiple parts to help you break the question down into bite-size pieces. There are always up to four Professional marks available in Question 1.

Professional marks Up to four professional marks are always given in Question 1 for: a. Problem solving. b. Clarity of explanations and calculations. c. Effectiveness of communication. d. Presentation and style.

These are ‘easy’ marks when you are shown what they mean. If you can achieve four out of 35 you are already 11% of the way to a pass (17.5 marks) in Question 1!

below, in my experience here are some of the syllabus areas that are commonly not understood well enough by students.

• Domicile – IHT, CGT. Understanding the status of an individual and the implications of this status.

• Deemed domicile – recent change in definition. Make sure you know the most up-to-date definition.

• Residence and Domicile – knowing the residence rules and how the residence and domicile status of an individual impacts the Remittance basis versus the Arising basis.

• Corporation tax losses – knowing the new rules regarding carrying forward of losses and how these interact with the old rules.

• Groups/consortia – knowing the definitions and the implications of: • Loss groups • Gains groups • Consortia • VAT groups • Substantial Shareholding Exemption – know

10 tips to pass ATX Here are few things to remember to be successful in this paper: i. Time management: 1.8 minutes per mark must be applied to every question. NEVER overrun on time! Learn to stop when time is up on a part or question. Fresh marks are available in new questions, so you must keep moving. ii. Presentation: Your script must be tidy and well presented. Use three to four-line paragraphs and headings. Ask yourself, ‘Would I present this to someone at work?’. iii. Plan: Do a brief (five-10 minute) answer plan for EVERY question. Sometimes it can feel like this is a waste of time, but it is not and will improve the structure and content of your answer. iv. Quality over quantity: You must write good points, not lots of points. Do not just repeat yourself. v. Read the requirements first: Understand what is being asked, not what you want to be asked. Follow the instructions. vi. Calculations v Narrative: Explain what you are doing. Calculations back this up. vii. State conditions and rules that you are following: Sometimes it feels ‘too obvious’ to state the basics. What does ‘base cost’ mean to someone who does not work in tax every day? Explain your thought processes. viii. Remember that 49+1 = a pass! You must ‘play the game’ (see below). ix. Practise questions and read the examiner’s comments: This is key to understanding where students struggle. x. Read the technical articles: A technical article has been written for pretty much every area of ATX. These are helpful to help you understand the areas individually.

‘Play the Game’ I have lost count of how many times I have heard students say, ‘That was a hard exam’. Is there such a thing as a ‘hard exam’? The answer is NO

Core areas regularly tested The whole syllabus is in scope and testable.

However, when I recently analysed four years’ worth of past exam questions, the following areas were commonly tested: Section A • Corporate, groups, overseas and consortia.

• Capital taxes.

• Business change scenarios.

Section B • Unincorporated businesses.

• Family company issues.

• Personal finance, business finance and investments.

• Multi tax personal (including overseas).

Technical areas to be comfortable with In terms of how you get ready for the core areas 36

PQ Magazine December 2020

ATX exam PQ if you have solid exam technique.

Let us look at Question 2 in the June 19 Exam as an example. It was a 25-mark question so 12.5 marks were needed to pass.

Question content Part 1: (17 marks) Challenging group relief question.

Part 2: (3 marks) Implications of forming a VAT group.

Part 3: (5 marks) Ethics – explain tax evasion. a. What would the student with poor exam technique do? • Attempt Part 1 first. • Try to do the difficult numbers. • Over-run on time. • Start to panic. • Run out of time for Part 2 and Part 3. • Fail the question and as a result does badly in the rest of the exam. b. What does the student who knows how to ‘play the game’ do? • Attempt Part 2 and Part 3 first – get the easy eight marks • Spends the rest of the time (relaxing!), finding 4.5 easy marks out of 17 marks available in Part 1.

There were (by the way) some ‘easy’ marks in Part 1. Like doing a basic capital allowances computation (for four marks). But students don’t see ‘easy’ marks within a question that has ‘hard’ aspects if you are under pressure because of poor exam technique!

•

•

• • How do you pass ATX? Generally, successful students have done a course focusing on question practice and exam technique. This is because you must learn how to ‘play the game’. Even if you know all of the rules, it doesn’t mean that you can apply them to a scenario.

Make sure you understand the Test Reach Software • Make each point in a separate paragraph in written sections – it makes it easier to mark a point. It should also prevent the same point being made more than once. • Use a well-structured layout with appropriate workings in numerical areas. It should be easy

to see how a figure from a working fits into the main computation.

Understand the spreadsheet functionality.

CBE spreadsheets have the functionality to calculate numbers for you. However, make it clear to your marker what you have done. Just because you are working in a spreadsheet, does not negate the need to properly present your answers.

Copy and paste functionality. It is amazingly effective to take the requirements and use these as the headings in your word processor response.

Headings and blank lines/columns – make appropriate use of headings between workings.

Practice in the software. It is important that you are familiar with the spreadsheet functions and word processor functionality before the exam.

Three separate exams within ATX! Students often do not realise that they are sitting three separate exams.

1. You need to understand the technical aspects and the patterns of the past exams.

2. You need to understand the exam technique and how to ‘play the game’.

3. You need to understand the ACCA CBE Test Reach software.

If you are weak with any of these areas, you will find ATX more challenging that it needs to be. • Richard Poole is an ATX and AAA specialist tutor at FME Learn Online

HM RC The magazine for when HMRC come calling

The greater the power the more dangerous the abuse Visit our site _lu1|- bm ;vা]-াom 1o h

PQ Magazine December 2020

Send us an email bm=oŠ_lu1|- bm ;vা]-াom 1o h

37

PQ CIMA President says

A model for change New CIMA President explains what responsible financial leadership is and why it’s so important in the current economy

W

hat a year to be taking on the CIMA presidency. The coronavirus pandemic turned the world as we knew it upside down. This is probably not the column I would have written in January against a more ‘familiar’ backdrop of economic uncertainty and Brexit.

Following my election as CIMA president in June it struck me that my presidential platform for the year, promoting ‘responsible financial leadership’, was unexpectedly timely. Covid-19 has highlighted why our profession needs to reimagine how it operates; and presents a great opportunity to drive a positive impact on our environment and wider society.

So what is responsible financial leadership?

Let me start with what it is NOT: • It’s not about hitting a target for one day each financial quarter.

• It doesn’t prioritise one set of stakeholders over all others.

• It doesn’t exist in a vacuum.

What is it then?

• It’s a partnership between all stakeholders.

One which recognises the impact a business has on its wider environment.

• It’s a way to build a resilient, long-term focused business that can absorb shocks.

• And it is about trust.

Good leadership is vital. Now is the right time for financial professionals, at all stages in their career, to use this blueprint to drive positive change and sustainable business growth. It is a time when a new way of doing things could be the difference between a business surviving or failing.

We are living in a battered business environment full of uncertainty, and the global economy has an enormous task ahead to get back on its feet.

Now is the perfect moment for management accountants, as business advisers, to shine and establish our reputation as value creators for the long-term, challenging the perception of being the high-priests of cost-squeezing.

I think we can improve the ways finance operates while building in something extra – our values.

Whether it’s ensuring our hiring algorithms are as bias-free as possible to ensure our company better reflects the society in which it operates, or scrupulously following data laws, organisations should use this phase to really think about the type of company they want to be seen as and start consciously putting values into these new systems. Perhaps ask your employers about revisiting (or even creating) the company’s values statement, building something which works for the new landscape.

And if you are a member of Gen Z, this may well chime with what you already think.

Research tells us that unlike Millennials, members of Gen Z, are much more interested in employers being good global citizens. Deloitte found that to win the hearts and attention of Gen Z, companies and employers will need to not just highlight their values but truly live them. Saying one thing while you do another will no longer cut it. To Gen Z, an organisation’s values and ethics have become make-or-break characteristics. Perhaps you recognise yourself in this description?

Although we will never be able to predict all potential ‘shocks’, planning for the long-term should lead to better organisational capabilities.

Sustainability makes good business sense because customers are more willing to engage with companies they see as environmentally and socially responsible. And socially diverse organisations are strong businesses. It is, therefore, in the best interests of organisations now and in the future to start implementing a new way of thinking.

I hope you will join me and help make responsible financial leadership the catalyst for change and a better future.

It’s going to be an interesting journey.

• Nick Jackson, FCMA, CGMA is President of CIMA. Turn to page 41 for our Life at… feature

With our video you can master the rules of double entry bookkeeping in just eight-and-a-half minutes. So do you know your credits and debits? You can find Tom’s feature explaining all on page 22 of the July issue.

TOM CLENDON: DOUBLE ENTRY BOOKKEEPING Accountancy can be simple if you know the basics. PQ magazine has gathered together the top tutors in the world to help us help you. Our Back to Basics video series will guide you through some of the fundamental topics of accountancy.

Each video comes with an accompanying article...

Tom Clendon takes you through Double Entry Bookkeeping

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Sean Purcell looks at the Strategic Planning Process Sean looks at the three steps you need to understand the strategic planning process – analysis, strategic choice and strategic implementation. See pages 24-25 in the August issue for the accompanying feature.

Sunil Bhandari delves into financial maths This presentation is slanted to ACCA FM and AFM students sitting the CBE exams, but will be useful for any PQs wanting to understand financial maths that bit better. See pages 20-21 of the September issue for the accompanying article.

Check out these short videos at www.pqmagazine.com.

Either click on the video bar at the top of the home page or scroll down to the video section

PQ Magazine December 2020

personal development PQ

Better yourself, day by day

Pantelis C. Fouli outlines a different approach to setting your personal goals “It is a psychological law that whatever we wish to accomplish we must impress on the subjective or subconscious mind” (Orison Swett Marden).

W

e have all read countless articles on goal setting that we could each probably write a book. In this article I want to share with you all something new (at least for me) that I have just discovered.

It’s a new approach to goal-setting that I am confident will revolutionise the way you view and attack your goals.

It is true that “we become what we think about MOST of the time”. Please repeat that several times. As humans with predated software (a few million years old) we tend to dwell on negative thoughts. Meaning if we had some random thoughts throughout the day we would think that those moments define our future.

This is just not true, it’s what we think about most of the time that counts. So the first message from me is that we need to always be aware of this and chill; don’t be so hard on ourselves.

“Whatever you can hold in your mind on a continuing basis, you can have.”

This is key and it’s here I want to make the introduction to a fresh perspective on how to view goal-setting. You see positive thinking is important, but it is not enough. Left undirected and uncontrolled, positive thinking can quickly PQ Magazine December 2020

degenerate into positive wishing and positive hoping.

To be focused and effective in goal attainment, positive thinking must translate into ‘positive knowing’. You must absolutely know and believe, in the depths of your being, that you are going to be successful at achieving a particular goal. You must proceed completely without doubt. You must be so resolute and determined, so convinced of your ultimate success, that nothing can stop you.

“Whatever is impressed, is expressed.”

And to impress these goals into our subconscious it is not enough you write down and review your goals once a month, or once a week. What I learned was the power of writing and rewriting your goals every single day (I have been doing this technique for a month now).

Write down your goals each day Here is where the magic takes places, and this is what I recently discovered. Get a spiral notebook that you keep with you at all times.

Each day, open up your notebook and write down a list of your 10-15 most important goals, without referring to your previous list. Do this every day, day after day. As you do this, several remarkable things will happen.

The first day you write down your list of goals you will have to give it some thought and reflection. Most people have never made a list of their 10 top goals in their entire lives.

The second day you write out your list, without

reference to your previous list, it will be easier.

However, your 10-15 goals will change, both in description and order of priority. Sometimes, a goal that you wrote one day will not appear the next day. It may even be forgotten and never reappear again. Or it may reappear later at a more appropriate time.

I remember specifically on day 1 that I wrote: “I drive a Range Rover” (I don’t, I drive a 20-year-old car that my wife bought me in 2002 as I was flat broke and needed a car for work).

By day 3 this was already forgotten about. By day 5 my core goals began to flourish and take precedent.

Each day that you write down your list of 10-15 goals, your definitions will become clearer and sharper. You will eventually find yourself writing down the same words every day. Your order of priority will also change as your life changes around you. But, after about 30 days, you will find yourself writing and rewriting the same goals every day.

Your work and personal life will begin to improve dramatically. Your mind will sparkle with ideas and insights. You will start to attract people and resources into your life to help you to achieve your goals. You will start to make progress at a rapid rate, sometimes so fast that it will be a little scary. Everything will begin to change in a very positive way.

In next month’s PQ magazine I will develop my ideas outlined in this article about a new way to set your personal goals.

• Pantelis C. Fouli is ACCA qualified and an ACCA Advocate and Student Mentor. Connect via LinkedIn – https://www.linkedin.com/in/ pantelisfouli (please mention in the personal message that you are a PQ Magazine reader) 39

PQ the workplace

Is diversity and inclusion

still a priority?

Karen Young explains why it’s important organisations get their diversity programmes back on track, despite current pandemicrelated issues

T

he impact on business from the initial stages of the pandemic has been widely reported – and the accountancy and finance industry was by no means exempt from the disruption this caused. ‘Business as usual’ took a back seat as employers fought to keep their organisations afloat. This meant that priorities such as equality, diversity and inclusion (ED&I) were perceived to be pushed lower down the list of importance.

Now, more than seven months since the first national lockdown in March, many employers are getting their ED&I agendas back on track. But how much of a priority is this this in accountancy and finance? And what do employers and employees need to do to push forward in this regard?

Why is ED&I still important?

Aside from the well-established benefits that ED&I offers organisations, it is becoming increasingly clear that it is a high priority for jobseekers. Findings from the Hays Equality, Diversity & Inclusion 2020 Report reveal that an organisation’s ED&I policies are important to some three-quarters (71%) of professionals looking for a job in accountancy and finance.

Furthermore, nearly two-thirds (63%) said they would only apply to an organisation which has a public commitment to ED&I. Not only is ED&I relevant for jobseekers, employees also deem this important in the organisations where they work. We found that over two-thirds (68%) said their company should have a position on topical issues such as the

40

Black Lives Matter movement, proving that even in today’s climate, it is expected for employers to have a clear stance on key issues which speak to their company values.

For professionals, the importance of ED&I was never lost. So, although employers are still handling the ongoing impacts of the pandemic, they can’t lose sight of the importance of ED&I to talent attraction and retention.

The role of flexible working Flexible working plays a vital role in nurturing an equal, diverse and inclusive workforce.

While this was not new to accountancy and finance professionals prior to the pandemic, the rapid uptake of flexible and remote working practices earlier this year means that now almost three-quarters (71%) of those working in the profession are doing so flexibly.

Encouragingly, 87% of professionals agreed that access to flexible working practices can help their organisation gain access to a more diverse talent pool. However, they also noted drawbacks that come with working flexibly, such as feelings of isolation and blurred boundaries between their work and home lives. Over a third (37%) also believe that working flexibly can limit career progression.

While flexible working needs to be a key element of an organisation’s ED&I agenda, clearly it can have knock-on effects which need to be considered by employers.

An action plan for employers In order to not let ED&I take a back seat to

today’s other challenges, here are three key recommendations for employers.

1. Make a commitment to ED&I. A diverse and inclusive workforce is no longer a unique selling point to prospective employees – it’s a must for professionals across the board. Make it a core part of your talent acquisition and retention strategy.

2. Promote ED&I initiatives throughout the recruitment process. ED&I policies including flexible working options need to be promoted at key points in the jobseeker journey, such as in job ads and on your organisation’s website, to avoid lowering your engagement with top talent.

3. Tailor your flexible working options. Flexible working isn’t one-size-fits-all. Employers need to realise that it offers huge advantages for some, but drawbacks for others depending on their role, working style and personal circumstances. Try to be mindful of and accommodating to this.

How employees can take responsibility To truly progress ED&I in the workplace, here is what employees can do to play their part.

1. Look for an employer’s commitment to ED&I. If you are job searching, make looking for ED&I policies a priority.

Organisations which are committed to ED&I are invariably more enjoyable to work at and are more likely to thrive as the world of work continues to evolve.

2. Know your working preferences. Before committing to a particular working pattern, consider what you need to work at your best.

An organisation that truly fosters a diverse and inclusive environment will work with you to figure out a flexible working arrangement which best suits you.

3. Stay adaptable. Try to remain adaptable and practical in light of your employer’s situation and the current circumstances. Be mindful that things will continue to change at a faster-than-usual pace.

Only by employers and employees working together will ED&I commitments remain front of mind and continue to progress organisations through our rapidly evolving world of work.

• Karen Young, Director, Hays Accountancy & Finance PQ Magazine December 2020

careers PQ

Dear Karen

Life at Oracle and CIMA

Ask PQ’s very own agony aunt Karen Young when you need advice from a real expert. Email your dilemma to graham@pqmagazine.com, and he will pass on the best ones to Karen

Nick Jackson FCMA, CGMA is a sales development leader for Oracle Corporation UK and the 87th CIMA President. He also has a Bachelor of Education from Exeter University, and has worked in both the private and public sectors at a senior level

THE DILEMMA I like my manager but increasingly feel stressed about not being able to meet their high expectations. The pressure of getting everything perfect is draining – any tips on how to tackle this?

KAREN’S RESPONSE Working for someone who is a ‘perfectionist’ can be exhausting and knock your confidence. If it’s any consolation, it can be just as difficult for the person with this trait as it is for those working with them.

As a start, ask your manager to be clear about the priority of each task they set you. This helps you know where to place your efforts and how to manage your time, so you avoid feeling drained.

Setting and communicating clear boundaries should also help. Your manager might get caught up in fine details and lose sight of how everyone’s role contributes to the bigger picture.

Be clear about your role and capabilities so your manager knows how much to expect from you. As well as this, set your own personal goals which are achievable. Try to do this each day so you finish work with a sense of satisfaction and less stress overall.

It’s also important to stop any negative self-talk. Begin each task by thinking ‘I will do my best’. If you make a mistake, reframe it as an opportunity to learn something new and improve your capabilities.

Finally, try to create a constructive feedback process between yourself and your manager. If feedback is negative, ask them to specify what they would like done differently or how you could improve for next time. Remember that you’re allowed to disagree if your opinions differ.

Your manager will want to help you learn and grow in your role, so if you don’t get this impression from them then it’s important to address this.

Remember that your manager is also learning, so in doing so you might help them improve their abilities as a manager.

• Karen Young is a director at Hays.

She is passionate about helping people to find the right job, and companies to find the right person PQ Magazine December 2020

What time does your alarm go off? Pre-Covid it was 5.30am, now 6.30am – joy!

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

Turn on laptop and pick up Keep Cup. What’s on your desk? A biography of Marilyn Monroe and a book on Napoleon. They provide enough height for my laptop camera to be at eye level!

What’s the best thing about where you work? A real culture of giving people their own space to make their mark – or to be ‘CEO of your own territory’.

Where’s your favourite place for lunch? Quilon, a South Indian restaurant in Victoria.

What can you see when you

sit at your desk? Fields and sheep at the back of my rather old house.

Which websites are your favourites and why? I love fish and don’t have a local fishmonger, I can recommend Peskyfish.com which sources fish directly from the boats across the UK. Which websites do you use for work? We are slaves to LinkedIn. How many hours a week do you spend in meetings? Nearly all my time is in meetings – I work with colleagues across the world.

What time do you leave the office? I try to stop formal meetings by 6pm – but I have a bad habit of looking at my phone for emails, tweets, latest news,

etc. after officially logging off.

How do you relax? I like to cook – it helps to switch off the mind.

What’s your favourite tipple? I like a good wine, and I’m a member of the Scottish Malt Whisky Society.

How often do you take work home with you? All the time – it’s something I’ve always done.

What’s your favourite TV show? I can recommend Bordertown on Netflix.

Summer or winter? Summer – long lazy days watching cricket.

Pub or club? An old-fashioned country pub with local craft beers.

Who is your hero? The late, great David Bowie and Jacinda Ardern – a leader with humanity, decisiveness and integrity.

This compares with over 100,000 in the same period in 2019. The worst affected group is 16 to 18year-olds, who make up just 10% of new starts. A year ago the figure was 17%.

therefore the office will remain a key part of working life. Ellis admitted that the future of the market for office space is difficult to predict, but “if anything at the moment we need more space than ever because of social distancing”. PwC staff have also told him that they really value having the option to use an office – whether for a personal or business use. In the longer term it will be important to ensure offices offer people something more than they can get at home, whether it’s working together, innovating or learning, he said.

In brief Apprenticeship low The number of young people beginning an apprenticeship has fallen to its lowest level in a decade, according to new figures from the Department for Education.

Despite cash incentives to try to boost take-up, apprenticeship starts fell by 18% in the academic year 2019-20, to 319,000. Many employers, uncertain of the future, have put their apprenticeship schemes on hold because of pandemic. From 23 March to 31 July there were 58,160 apprenticeship starts.

PwC backs the office PwC won’t be downsizing its office space any time soon, according to Kevin Ellis, PwC’s UK senior partner. He said that the pandemic has accelerated changes to working patterns, “bring things forward by three or four years”. Hybrid working is here to stay, he explained, and

The PQ Book Club: books you should read Great Pajama Jobs – Your Complete Guide to Working from Home, by Kerry Hannon (Wiley £18.99) Unprecedented, unprepared and unchartered, working from home became the norm in 2020. We have, as author Kerry Hannon says, been forced to adjust and get on with it. Whether it becomes part of our cultural DNA is another thing altogether. But the flexible work genie is out of the bottle, so she is hoping all employees can benefit beyond the crisis.

The aim of the book is to help you find a great remote job and succeed as a remote worker over the long haul.

Among those she sees as ‘great

remote jobs’ are bookkeeping, financial manager and accountant, of course!

Some of the companies she picks out as good remote working one will be familiar – including JP Morgan, Kaplan, Pearson, Philips, Robert Half and SAP. Hannon then asks perhaps the most important question we all need to answer: working from home sounds like a dream job, but are you hardwired for working independently?

She also has a chapter on spotting work from home scams, and one on dispelling the myths.

Setting your own hours isn’t always possible, and being able to climb the career ladder in the

new out of sight, out of mind manager mentality can mean your salary can flatline.

Regular communication is the key to success here.

Hannon goes through the nuts and bolts of job searching and talks you through updating your CV and cover letter.

Finally, she provides some advice on networking for remote workers.

PQ rating: 4/5 We need a UK version of this book. That said, there’s lots of useful stuff in here.

41

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

US government seizes

Giving birth in middle of an exam

$1bn in bitcoin Bitcoin linked to the Silk Road website has been seized by the US government.

Crypto-currency experts reported 70,000 bitcoin moving out of the illicit marketplace’s account in early November. US Attorney David Anderson confirmed that the Department of Justice had seized the money from the online black market.

Silk Road creator Ross Ulbricht is currently serving two life sentences in prison following his conviction for money laundering, computer hacking and conspiracy to traffic narcotics.

The friendly award ICB’s Luca Awards are certainly worth winning – we should know, as PQ magazine has won the Best Use of Social Media award! The awards ceremony takes place on Tuesday 17 November after the Bookkeepers Summit. You have lots of great awards for Bookkeeping Software of the Year and Practice Management Software of the Year. But the award that really caught our eye was ‘Friendliest Software of the Year’. Now if we were a software company that is the one we would love to win.

Hackers steal salaries!

Hackers have been able to steal staff wages at universities using phishing methods that trick people into passing on personal information. At least three institutions were targeted, including the University of Basel. The thieves obtained access to payment systems and diverted the transfer of salaries. One university, the University of Zurich, spotted the attack and avoided any losses.

’ WEV E Pick and mix

The sound of the office Are you working from home and missing the office? If you are feeling isolated then what you need is some fake background office chatter. There are now websites that can provide you with artificial office noise – you can hear the whirl of the photocopier and buzz of the coffee machine, as well as people chatting. Apparently, the sites have attracted millions of hits during the pandemic. The Sound of Colleagues Spotify site, which includes sounds form an open window, telephone, the office dog and even keyboards, has attracted over a million page views. Our favourite is I Miss the Office, which is very interactive and even has a colleague humming badly and eating crisps loudly.

Check out: I Miss the Office: https://imisstheoffice.eu/ The Sound of Colleagues: https://soundofcolleagues.com/

Exams are tough enough, so spare a thought for Brianna Hill, who recently felt herself going into labour in an exam but did not move from her chair! She was sitting the first day of her bar (law) exams and if she moved she could have been disqualified.

Hill completed the 90-minute paper and finished the second while having contractions. Her husband drove her to hospital where she gave birth, and then the following morning she took the final two tests in a private hospital room. Oh, her son is called Cassius.

The breaking wind tax

Spooky Halloween jokes

A tax on bovine flatulence should be imposed to encourage farms to cut greenhouse emissions, says a report by the Zero Carbon Commission. The tax would, says the report’s authors, give farmers an incentive to add methanereducing supplements to their cattle feed. Around 15% to 20% of global greenhouse gas emissions comes from livestock, with more than 30% of this from methane. For those not in the know, most of the gas produced by cows comes in the form of burbs, and not from the other end!

Ireland and Denmark have already begun taxing cattle owners on cow flatulence, to very different degrees. In Ireland you pay £14 per cow, but in Denmark it’s £87.

Halloween may have been cancelled, but we didn’t want to deprive you of good spooky accountancy jokes! So here’s the best ones we could find: Why did the ghost stumble home at Halloween? Because it was wearing an off-balance sheet!

Why did the witch paint the walls of the haunted house in blood? Because it had a gross lease.

Why do ghosts love the new leasing standards? They help to increase transparency.

No groaning please!

GOT THE L OT Cute cats

Up for grabs this month are all the books we have recently We have three copies of ‘Cute Cats’, reviewed. So send us your email along with a postal address an adorable anti-stress book, on offer and you could win one of the following: ‘How to Be a Well this issue. If you love cats you will love Being – unofficial rules to live every day’, by Dr Amy Cope, this dot-to-dot book. It has challenging Jim Pouliopoulos and Sanjeev Sandhi; ‘Working From Home images of cats to complete and colour, – making the new normal work for you’, by Karen Mangia; from Persians to sweet Siamese, to ‘Why We Do What We Do – understanding our brain to get bobtails and tabbies. Something for the best out of ourselves and others’, by DR Helena Boschi; everyone! and, last and by no means least, ‘The Price of Football’, by Kieran Maguire.

To enter this great giveaway send your To be in with the chance to win one of these books send your name and name and address to giveaways@ address to giveaways@pqmagazine.com. Head up your email ‘Pick & Mix’ and pqmagazine.com. Head up the email ‘Cats’ and we will enter you we will do the rest. for the prize draw.

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries Terms and conditions: entry giveaway Youonmust send11your must be received

by Friday One 8 May. Theper main draw willplease. take place Monday Mayname 2020.and address to be entered for the draw. All giveaway

entries must be received by Friday 11 December. The main draw will take place on Monday 14 December 2020.

TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM 42

PQ Magazine December 2020