Accountants are the key to enabling Africa’s economic transformation, says the International Federation of Accountants (IFAC) and the Pan Africa Federation of Accountants (PAFA).
With 12 of the world’s 20 fastest-growing economies and an economic landscape characterised by rapid urbanisation, a young demographic and abundant natural resources, the two bodies stressed Africa’s development is vital in both a regional and global context. Their new report, ‘The Accountancy Profession
Enabling Africa’s Transformation’, emphasises that achieving the continent’s growth and sustainable development ambitions requires the active contribution of accountancy
and finance professionals.
It also outlines how influential accountants on company boards as CFOs, trusted business advisors and those working in the public sector, can drive sustainable economic growth in Africa. On top of that, they can help navigate the challenges of energy access, a lack of regional integration and rising public debt, as well as climate change adaption and mitigation. The cost of which is estimated to be between $68 billion and $108 billion annually.
Improving public financial management in Africa is an essential step to addressing sovereign debt sustainability. The report said a robust, public sector accrual-based accounting system and good financial management will
reduce revenue leakage from waste and corruption, helping to reduce financial debts in the coming years, too.
There needs to be wider access to training, qualifications and strong
professional and ethical standards, all are key to strengthening public sector governance and financial management. That means Africa needs more qualified accountants everywhere!
IFA CEO Lee White explained: “We believe the accountancy profession has a critical role in achieving transformation in Africa and empowering change.”
And PAFA CEO Alta Prinsloo added: “By strengthening the capacity and influence of the accountancy profession in Africa, we enable our 56 member organisation in 45 countries to help drive sustainable growth and prosperity by enhancing trade and regional integration, investment, the quality of services and trust in institutions.”
ACCA JUNE EXAM RESULTS ARE IN
The ACCA June results have landed and generally the news is good!
PM remains the hardest Applied Skills paper to pass. The PM pass rate for June dipped back to 42% – it had jumped to 45% in March (the highest pass rate since June 2010, when it was an incredible 57%). However, at 44% the AA pass rate was at the top end of previous rates.
Apart from LW (which doesn’t really count), the highest Applied Skills pass rate was TX this time around, at 55%. The FR pass rate (51%) was the only other pass rate
in the 50s.
APM stood out among the optional papers. The June pass rate jumped to 37%, from 33% last time out. You have to go back to June 2016 to find a higher pass rate.
The AFM pass rate continued on its upward trend, too – for just over a year it has been in the mid-40s. Prior to March 2023, the pass rate was just scrapping over 40% at some sittings, and had been as low as 33%.
Even AAA at 37% is something to cheer about. In March this year the pass rate jumped to 38%, and
the pass rate this time around is better than the 34% and 31% for the previous two June sittings. At 47%, ATX keeps its title as highest optional pass rate.
Alan Hatfield, ACCA’s executive director – content, quality and innovation, said he was delighted to see such a strong set of results. ACCA JUNE 2024 PASS RATES: BT 89%; FA 68%; MA 68%; LW 79%; PM 42%; TX 55%; FR 51%; AA 44%; FM 48%; SBL 52%; SBR 49%; AFM 46%; APM 37%; ATX 47%; AAA 37%
IN THIS ISSUE
A note from the Editor
Welcome to another great issue of PQ magazine, which if I am not mistaken is our 260th issue!
We have shifted the publishing date back a few days this month to include the ACCA exam results, and will do this now every time they are out. We want to ensure you get our post-exam analysis as quickly as possible.
In the news we report on job cuts at KPMG, AAT students struggling with INAC, and the tax riots in Kenya, which left 40 people dead.
On a lighter note, our ‘High ceilings equal lower marks!’ story also makes for an interesting read.
Football finance takes centre stage in this issue, and after reading what our panel had to say (see pages 9 and 16) you can watch our ‘No Accounting 4 love of Football’ video at https://tinyurl.com/3v9vjrdv
Karen Young’s piece on what jobseekers are looking for is an eyeopener, too. Let’s just say if you want top talent don’t keep them waiting post-interview.
We have now put all our Back to Basic series on our YouTube channel. PQ magazine award-winning tutor Will Boardman has the opening slot in Series 2. He talks you through tax points in four-anda-half minutes. But why not dip into Series 1? Tom Clendon’s double entry bookkeeping video has had over 3,000 views. You can find Will’s video at https://tinyurl.com/yee7js9d
Keep reading and keep safe.
Graham Hambly, Editor and Publisher, PQ magazine
News
4 AI goes mainstream Students routinely using AI to write their essays, leading academic warns
5 No AAT uplift
Association refuses to budge on controversial INAC assessment
6 Financial education
Why ‘finance fear’ needs to be tackled in the classroom
8 IPSASB initiative
Standards board turns attention to the public sector
9 Football finance PQ seminar puts focus on the beautiful game’s finances
10 Christian Aid warning Kenya trapped in hopeless debt crisis, charity warns
12 Tech news
Cyber-criminals ‘likely to weaponize AI’ Features, etc
14 Have your say Accountancy still blighted by gender imbalance; and unhappiness about the AAT’s INAC exam. Plus our social media round-up
16 Football finance
Our love of the game always comes at a price. But does anyone know the true price?
18 Football and tax
Is HMRC missing out on millions in tax from football transfers?
20 ACCA spotlight
A new podcast from ACCA is busting the myths that surround the profession
21 ICAS spotlight
It’s time to map out a brighter future for the accountancy profession, says CEO
23 AAT Advisory Groups
The association wants you! AAT’s Advisory Groups help shape the future of the organisation
25 CIPFA spotlight
How integrity and transparency can transform public services
26 Mental health
Exercise can improve your wellbeing and help reduce exam stress
27 CASSL in action
Our new feature puts the spotlight on the London-based student society
28 CIMA spotlight
What you need to do to ace the objective tests
29 AAT exams
How to hone your skills for the Level 3 Financial Accounting: Preparing Financial Statements unit
31 Your career
What finance professionals really want when they are looking for a new role
32 Studying AAT
How you can overcome the obstacles you’ll encounter on your study journey?
33 AAT exams
Our AAT guru Teresa Clarke explains all you need to know about labour costs
35 Careers
Accounting cock-ups lead to CEO resignation; our Agony Aunt dispenses more career advice; and our Book Club review
36 Fun
The lighter side of life – and accountancy
The columnists
Lisa Nelson How to navigate your route to exam success 4
Robert Bruce Why the sustainability challenges remain 6
Prem Sikka The true cost of tax avoidance and evasion 8
Anna Kate Phelan Why it’s time to beef up cyber security 10
Eddie Herbert Why investor relations are a growing priority 12
LISA NELSON
Navigating the road to success
As a PQ you’re already on the road to a rewarding career. However, the journey to success can be a real balancing act of work, study and personal life. Sometimes it can feel overwhelming and lead to elevated stress levels. So let’s address a crucial tool that can help ease this stress: a solid study plan.
A study plan is your GPS for navigating the journey through your exams. Without it, it’s like driving to a new destination without directions – you may eventually get there, but probably with delays along the way.
Whether your employer provides time for tuition, or you’re steering your own way through self-study, a study plan helps you allocate your time effectively, ensuring that every study session takes you closer to your destination – passing those exams.
Pinpoint your exam dates and set them as your ‘arrival time’. Then plan your route by breaking down your study topics. Prioritise areas that need most work and allocate them to the available study time before the exam. Be honest about the time you can commit each week.
Your study plan should be flexible –take regular check-ins to adjust your plan. Use your progress, especially performance in assessments and tests, to re-prioritise topics to focus on.
With a well-structured study plan you’ll be able to navigate the demands of study without getting lost. Safe travels!
AI goes mainstream
University students’ use of artificial intelligence has ‘gone mainstream’ this year, Professor Des Fitzgerald of University College Cork told the Times Higher Education (THE) magazine recently.
He explained that students’ increased use of ChatGPT to write essays is infuriating academics, and now there is real scepticism about university policy. Fitzgerald told THE that many of his colleagues think they just have to live with AI and maybe even teach students how to use it well.
However, he doesn’t want
AI writing students’ essays! He explained: “All AI is capable of is writing bad essays made up of non-ideas and empty sentences.” For him AI is not a machine for cheating but a “machine for producing crap”.
THE said scholars are questioning whether current policies encouraging ‘ethical’ use of AI are working. There are tell-tale signs when students use it, too. Word such as ‘delve’ and ‘multifaceted’ are giveaways, along with the over-use of bullet points to summaries themes, and the sudden
Jobs to go at KPMG
KPMG is reportedly cutting a further 200 jobs in the UK, due to the slowdown in the consulting sector.
The firm said the cuts will affect both back office and client-facing roles, following a review of KPMG’s costs.
The announcement, which will reduce headcount by 1.2%, comes after 1,800 jobs were lost across the Big 4 in 2023.
appearance of terms such as “let’s explore this theme”.
And this is despite the fact that some students have signed contracts saying they would not use AI to write essays.
KPMG also had to revoke job offers to some overseas graduates because of the introduction of the higher minimum salary for UK visas.
A spokesperson for the firm told the Financial Times: “Like the rest of our sector, we are still operating in challenging market conditions, which is why we have made the difficult decision to consult on proposals to reduce our cost base.”
The consultation process of the proposed KPMG redundancies will be completed by 1 October.
AAT recruiting for new advisory group
AAT is looking for the next set of students to help them shape the future direction of its products and services.
The first-ever cohort of Student Advisory Group members are now standing down, and AAT needs 30 new students to take on the mantle for the next year.
Applications are open until 31 July 2024 and you need to go to https://tinyurl.com/3ws3cejm to put your name forward.
In effect, you will be representing your fellow 70,000 students, telling AAT ‘what students want’ directly
Back to basics –your free resource
Have you tried out the PQ magazine Back to Basic video series yet?
Our aim is to provide short, sharp videos on some of the key topics students struggle with. We have just added award-winning tutor Will Boardman’s take on tax points. He explains the difference between basic and actual tax points in four short minutes. Check out Will’s video at https://www.youtube.com/ watch?v=7NTft0Td7oQ&t=3s
We also have videos on double-
entry bookkeeping, assets and the trial balance. Some of these are slightly longer than four minutes!
PwC cuts half-day Fridays
PwC is cutting bonuses (in some areas) and reducing the number of half-day Fridays, as the Big 4 firm fights a slowdown in business.
Half-day Fridays were introduced post-pandemic for the summer months. However, chief people officer Ian Elliott has now told staff that this perk will only be available
for six rather than the current eight weeks. At its height half-day Fridays ran for 12 weeks. And it could be argued that this is actually how long a British summer is now!
Elliott also said that while the bonus pool remains the same, who actually gets a pay-out will change. He revealed that these pay-outs will be reduced in a number of areas.
Islamic finance can help save the planet Islamic Finance can address the barriers to achieve Sustainable
to the people that can make that happen.
AAT’s Montanna Stafford explained that the groups are all about improving the student experience and will help to shape the future direction of the qualifications.
She stressed AAT genuinely listens to the advisory group’s feedback to help spot the practical improvements it can make.
Development Goals (SDGs), says a new report from the International Federation of Accountants, Malaysian Institute of Accountants (MAI), and the World Bank.
The report,‘Unleasing the Potential of Islamic Finance’, stresses a major tenet of Islamic finance is the protection of people, planet and prosperity, and its underpinnings can contribute to fresh thinking on sustainable development, interpretations, and approaches. The SDGs will create opportunities for more Islamic finance growth.
In brief
Lisa Nelson is Director of Learning at Kaplan
AAT students struggling with INAC
Students are calling for the AAT to look again at the problems with the Internal Accounting Systems and Controls (INAC) assessment, after the association said it would not be making any adjustments to the marks awarded.
Back in July 2023, PQ magazine reported that AAT was realigning its INAC assessments at Level 4, as it was felt students and training providers needed time to catch up
on the changes to Q2022. Students who had already sat the exam were given a 5% uplift in their marks.
But now some current AAT students believe INAC is still out of kilter with the other assessments.
Numerous students have contacted PQ explaining the wording in task 2 continues to perplex them.
publicity of having to adjust marks for a second time.
Students feel that AAT does not want to uplift marks again because it wants to avoid the negative
Net off the numbers
Richard Sage FCA was clearing a series of accounts which had amounts that netted off many-to-one rather than one-to-one, and unclear references.
Frustrated with moving numbers in and out of columns in Excel to try to see which combination(s) summed to zero, he searched online for a tool to help. The closest was Solver in Excel, but that is limited, awkward and very slow for more than a handful of numbers, so
In a statement sent to PQ on 9 July AAT said: “We can confirm that feedback has been received from a number of students regarding INAC. We are responding to those students directly in line with our normal processes.
“As with any and all feedback AAT receives, we look at the issues raised on a case-by-case basis. But where a volume of feedback is received, we
he created the initial version of what became Sotozeo.com
He then found himself using it for other purposes, like identifying backdated postings, separating reclassification issues from net differences; even for bringing forward, and creating, bank reconciliations.
The tool is now an online offering for all, free for small-scale use and modestly priced thereafter.
also look at them holistically.
“We can confirm now that we have looked into all the feedback received and, at this stage, given that the performance of the assessment is in-line with our expectations, we are confident that no adjustments are required at this time.
“We are, however, signposting students to the support and resources that are available to them. And, in light of the feedback received, we are also putting in place additional targeted support.
“AAT runs a continual monitoring and review process for all assessments at all levels. We are committed to ensuring all assessments are reliable, fair and valid.”
As Sage told PQ magazine: “It is apparently trivial, but that doesn’t stop it being jolly useful. If it only saves an average user one hour each month, that’s 1.5 whole days a year,” he added. Check out more on page 19
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ROBERT BRUCE
Why is change taking so long?
There was a great international gathering in the grounds of Kensington Palace in the first days of July. It was marking the point when 20 years earlier the Prince of Wales, now the King, had set up his first committee to advance the idea that accounting for sustainability, could in his words “transform finance to make sustainable business, business as usual”. It was a simple proposition. Thoughtful businesses were realising that business models needed to reflect the risks that climate change was already bringing.
The initial committee on which I, your humble columnist, served, produced a report pointing to the way ahead. Roundtables, with the great and the good of business, were held. The feedback was largely supportive. They could see the risks. They could see how transforming the way financial reporting reported and recorded them would be immensely beneficial.
The efforts went truly global. Integrated reporting became a central tenet. And yet, as we gathered on the royal lawns on a summer’s evening, the question remained. After 20 years why are we still having to promote it? Surely it should have become the norm by now? And to a great extent it has. But American politics likes to see the idea of sustainability as evil. There is a battle to roll it back. Who would have thought that such a simple and logical idea could become so politicised?
Robert Bruce is an
award-winning writer on accountancy for The Times
Be an accountant my son!
British Heavyweight champion
Anthony Joshua has told BBC Radio 4’s Desert Island Discs that he wants his son to be an accountant, rather than follow in his footsteps.
He said that he wanted him to carve out his own future, but saw that using figures rather than his fists.
Joshua explained: “If I was to choose [a career] for him, I would ask him to probably look at
We all need better financial education
The new Labour government needs to deliver a programme of better financial education in all UK school, says Grace Hardy (pictured), a 21-year-old member of the AAT and PQ magazine award finalist.
She stressed a common theme amongst the 16-24 year olds, who follow her channels, is that financial terms can be overwhelming – with many not acting quickly to deal with bad debt, such as credit card interest repayments because of ‘finance fear’.
Hardy believes financial education was too important to be simply crammed into A-level maths. Instead, there are two big reasons she says she wants an ‘accessible
financial education overhaul’.
“Number one, the social media era has brought the social media scam with it. Get-rich-quick schemes, shady investments, people pretending to be someone they’re not – it’s never been a more
Deloitte launches EMEA campus
Deloitte has launched Deloitte University EMEA (DU EMEA) in Paris, its latest international learning campus.
Located in the Val d’Europe area of the French capital, the state-of-the art learning facility spans 22,000 square metres and will be open to people from across Deloitte’s member firms in Europe, the Middle East and Africa (EMEA).
DU EMEA will support professional, leadership and
industry specific training, with an expected 20,000 employees ‘experiencing’ the university each year.
Tom Declercq, Dean of DU EMEA, said: “A distinctive feature of Deloitte University EMEA is its leader-led approach. Senior leaders actively participate in the training and development programmes, sharing their expertise and real-world experiences. This engagement from top leadership
CIMA has a new President
Innovation, sustainability and inclusion will be the focus for his year in office, according to the new CIMA President Simon Bittlestone (pictured).
He said: “The world is ripe with opportunities for the accounting and finance profession to create sustainable value, innovate and be inclusive. Despite prevailing uncertainty in the world, these are exciting time for our profession and
accountancy, because I think it’s good to understand numbers.”
New South African audit pathway
ACCA members can now apply to become registered auditors in South Africa, in a move that will help alleviate talent shortages and widen diversity in the audit sector.
Following accreditation last year by South Africa’s Independent Regulatory Board for Auditors, members of ACCA are now able to apply to become registered
over the next year I intend to help accelerate and lead its continuous evolution.”
The 91st CIMA President said he will focus on fostering an inclusive
auditors in the country.
ACCA’s Portia Mkhabela, said:
“We’re delighted that the pathway for ACCA members and future members to gain registered auditor status in South Africa is now available.
“This is good news for our current members and students, and it will also increase the appeal of accountancy as a potential career for those just starting out.”
Rising up the ranks
Having joined 360
important time for our country to be finance-smart.
“Number two, teaching proper, practical financial education with skills will lead to young people being more money-confident, so more of us can take control of our financial futures. We can unleash a generation of entrepreneurs by removing finance fear from blocking them following their dreams – like starting a business.”
Hardy has also launched her own Unconventional Podcast, sponsored by the AAT, offering business and finance advice to young entrepreneurs and freelancers. Check it out at https://tinyurl.com/2cubpnfv
underscores the importance of continuous learning and sets a powerful example for all our employees. It ensures that the training is not only theoretically sound but also practically relevant, grounded in the realities of the business world.”
profession “where anyone with the right aptitude and dedication has the opportunity to join the profession, seize opportunities for growth and build a fulfilling career”. Bittlestone felt that generative AI and robotic process automation are also quickly revolutionising accounting and finance. He stressed CIMA will work on empowering accountancy professionals to cultivate a mindset, skills and knowledge they need to make the most of the possibilities these present.
Chartered Accountants some 13 years ago, Sophie Holmes, the firm’s first-ever apprentice, has become a shareholder and partowner.
Holmes joined the firm straight after A-levels and became fully qualified in 2017. Two years ago she became Client Services Director and joined the board. She is also the chair of the firm’s charity 360 Grass Roots Foundation and chair of the Humber ICAEW Society of Chartered Accountants.
How much tax revenue is actually not collected? HMRC states that in 202223 it failed to collect £39.8bn due to evasion, fraud and error. HMRC collects income tax, corporation tax, national insurance, capital gains tax, VAT, tobacco duty and other taxes. It attributes £24bn of the loss to small businesses. With cuts in resources and the closure of offices, HMRC is in a poor position to challenge tax abuses or even collect information about the cash economy.
Other models estimate the tax gap (difference between taxes actually collected and what should have been collected) to be around £100bn a year. This means that since 2010 between £500bn and £1,400bn of taxes have not been collected. Even 25% of that could make a massive difference to the economy and household disposable incomes.
However, that is not the full picture. Corporations shift profits to low/no tax jurisdictions through transfer pricing practices and a variety of concocted intragroup transactions. HMRC does not estimate the taxes lost.
Taxes are also lost through related party transactions, but no estimate is made.
HMRC admits that it has no idea how much tax is being evaded by UK residents holding around £850bn in foreign assets.
Successive governments have shied away inconveniencing small/ large corporations and wealthy elites. Before hitting people with higher taxes the new government needs to invest in HMRC and go after the tax avoidance industry.
Prem Sikka is Emeritus Professor of Accounting at the University of Essex
Tax briefs
Mind the gap
The annual ‘tax gap’ figures show almost £40 billion in taxes was not collected last year, highlighting the enormous challenges facing the Labour government, says the Association of Taxation Technicians.
The Measuring the Tax Gap 2024 edition said the difference between the amount of tax due to HMRC and what is actually paid rose for the second year in a row, to £39.8 billion.
Almost half of this (45%) is
Public sector sustainable reporting
The International Public Sector Accounting Standards Board (IPSASB), with support from the World Bank, is developing a climate-related disclosures standard for the public sector.
The Sustainability Reporting Standard (IPSASB SRS) will be the first for the public sector, and it is believed increasing transparency will enable governments and other public sector entities to make more informed decisions about their contributions towards addressing the climate emergency, hold them accountable for their interventions and foster trust in their efforts.
The new standard will be released for feedback in Q4 2024.
IPSASB chair Ian Carruthers said: “Equipping governments with the quality standards necessary to report on their critical contributions to addressing the climate
emergency together with other sustainability issues requires global support.”
The World Bank’s Arturo Herrera added: “The standard will take climate reporting to a new level and will complement the reporting requirements of the Paris Agreement, which come into effect this year. At the same time, SRS disclosure can help attract new investment from the private sector. Some of the world’s biggest investors look at ESG performance in deciding where to invest. The new standard will provide that information.”
Supporting the 10,000 Interns Foundation
Crowe UK has welcomed a new cohort of 11 interns as part of its support of the pioneering 10,000 Interns Foundation to open more of British business to talented young Black people.
This is Crowe UK’s third year in supporting the foundation, which was established as a non-profit organisation in 2020.
The new interns will receive a minimum of six weeks’ paid employment, which includes a
comprehensive programme that enables them to learn new skills and experience a professional work environment. Each intern also has a dedicated mentor.
Nigel Bostock, Chief Executive of Crowe, said: “At Crowe we care about our people, and by being inclusive and offering opportunities for all, it helps open up an industry which has traditionally lacked diversity.
“Take it from me, as someone
who began their career at Crowe as a trainee, accountancy is a fantastic profession with many opportunities to develop new skills and have a fulfilling career. I wish them every success at Crowe.”
IFA announces new line-up and promotions
The Institute of Financial Accountants (IFA) has unveiled its latest appointments, as well as changes to the senior management team, designed to strengthen the body’s service delivery to its members.
Kyle Baker-Kemp (pictured), joins as the new Professional
due to failure to take reasonable care and errors (£17.8bn), with evasion and avoidance coming in at £7.3bn. Small businesses remain the biggest group on non-compliance, accounting for £24.1bn (60%) of the tax gap.
The Germans are here!
Taxfix Group has entered the UK market with the acquisition of TaxScouts, cementing its position as European market leader in digital tax filing.
Development & Advocacy Manager.
He has worked for both the ICAEW and Chartered Institute for Securities in various executive positions.
Jonathan Barber, the former Business Development & Membership Director, becomes Executive Director – UK for the IFA, and John Edwards, the
This latest move means Taxfix now operates in four of the largest European financial markets: Germany, the UK, Spain and Italy.
Martin Ott, CEO at Taxfix: “The acquisition of TaxScouts marks a significant step in our European expansion. Tax filing can be a daunting and painful process for so many people across Europe, and with TaxScouts, we share the same mission: to break down barriers and empower users to take control of their finances, starting with their tax return.
IFA’s CEO since 2015, moves to Group Executive – International. Tim Pinkney becomes the Director of Professional Standards. Barber said: “Kyle’s experience aligns perfectly with the IFA’s commitment to the delivery of quality continuing professional development and education pathways, ensuring members maintain currency of knowledge and relevance in an ever-changing and competitive market.”
Tolley+ AI has arrived
Tolley has announced the development of Tolley+ AI, a generative AI solution designed to transform tax research and guidance.
Tolley+ AI is using the same underlying and proven technology that drives Lexis+ AI, the generative tool for lawyers.
The announcement comes as Tolley releases the finding of a new report that reveals some 66% of tax professionals are either using or planning to use AI for work.
4 the love of football
Football finance took centre stage at PQ magazine’s ‘No Accounting 4 the Love of Football’ seminar, a joint event with the Chartered Accountant Student Society of London (CASSL).
University of Liverpool’s Kieran Maguire told a packed audience that football was invented in 1992 by Sky! Since then, he said retail prices have increased by 108%, while the revenue for the Premier League’s 20 teams has increased by 2,600%. But there is one slight problem. During the period where
revenue spiralled, wages also increased by 3,600%, and 18 out of 20 Premier League clubs in 2022 (a non-Covid year) lost money. The only two clubs to make a profit were Brentford and West Ham United.
Sofia Thomas, a partner in Juno Tax and Chair of the International Sports Association (pictured), also spoke on the night. She said footballers are some of the highest taxpayers in Europe, so governments clearly realise they can receive significant amounts of taxes from them. The problem is many are not well advised and there is a need for more professional tax advisers to help them.
Other speakers on the night were Deloitte’s Kunal Sajdeh, and King’s Counsel Patrick Way. Check out the video at https://tinyurl.com/3v9vjrdv
AAT scholarships up for grabs
PQ magazine and e-Careers are offering AAT students a free scholarship every month. That means you could be studying your next AAT level for nothing!
While no one is talking about the costof-living crisis it is still affecting lots of people, and scholarships are
there to help those who might not be able to
afford to ‘get qualified’. To enter all you
have to do is say why you think you deserve the scholarship. Once entered you will be put forward for the scholarship each month. So, if you don’t win it the first time there are still other chances to win. Send your entry to scholarships@ecareers.com, along with your full name and the level you want to study.
Enhancing your ethical AI skills
ACCA has joined forces with the Chartered Institute for Securities & Investment (CISI) to offer its members the opportunity to study for CISI’s Certificate in Ethical AI AI experts at ACCA contributed content to the certificate, which will now be available on ACCA Learning. The CISI launched its Certificate in Ethical Artificial Intelligence in November last year as part of its campaign to champion ethics and transparency in the use of AI. Since launch, more than 3,500 professionals, seven financial services regulators and four central banks across more than 50 countries have registered for the CISI Certificate in Ethical AI.
ACCA CEO Helen Brand said: “AI brings huge opportunities to a wide range of financial and business areas, from planning and audit through to compliance, data analytics and sustainability. But it also brings risks such as poor transparency and bias. It’s vital that AI is adopted in a responsible way, and accountants with their long-standing commitment to ethics are central to driving this.”
ANNA KATE PHELAN
It’s time to beef up cyber security
Cyber security has been a hot-button topic in the news lately. Several highprofile IT attacks have affected millions of people worldwide. A number of London hospitals had to declare critical incidents due to a cyber attack by a group of Russian hackers. These attacks led to mass disruption, with the hospitals having to cancel operations, tests and blood transfusions.
The events giant Ticketmaster has also confirmed it was the victim of a hack that had the potential to affect 560 million people as their personal details were stolen. The same criminal gang that targeted Ticketmaster also hacked the bank Santander, stealing both staff and customers’ personal data. There are plenty of other examples.
The Chief Technology Officer of the National Cyber Security Centre (NCSC), Ollie Whitehouse, which is a part of GCHQ, recently stated that the market for technology isn’t working when it comes to security.
In a keynote conference speech, Whitehouse said that companies globally know how to build resilient, secure technology, but the market does not incentivize them to build secure solutions. He called on technology developers to step away from engaging in a ‘sticking-plaster’ approach to technical debt and to address responsibility for security challenges head on.
This is more important now than ever, as technology develops at an unprecedented rate and legislation, as we know it, simply cannot keep pace.
Tax riots leave scores dead in Kenya
Riots against several taxes in Kenyan have been exacerbated by the country’s external debt crisis, and will require international intervention to resolve, the charity Christian Aid has warned.
At least 39 people were killed in the recent anti-government protests, with another 361 injured. The largely peaceful anti-tax rallies, led mostly by young Gen-Z protesters, descended into deadly violence after lawmakers passed contentious legislation. The government has now been forced to make a U-turn on these tax proposals.
Jennifer Larbie, Head of UK Advocacy and Campaigns at Christian Aid, said: “Kenya is trapped in a debt crisis not of its
making and with no way out. Rather than building hospitals and schools and training doctors and teachers, the government has no option but to line the pockets of predatory private creditors.
“When riots have been sparked by tax rises to pay off national debt interest, how can the UK government sit in silence? We have a moral responsibility to intervene with debt relief measures so that millions of people living in fear of conflict and poverty can thrive.”
High ceilings equal lower marks
You couldn’t make it up, but scientists at the University of South Australia have discovered that the height of exam hall ceilings affects exam results.
A team led by Dr Isabella Bower took 15,600 undergrad results across three campuses and crossreferenced the results with the height of the exam hall ceiling. Bower found those who sat exams in halls with high ceilings achieved lower marks.
The problem is she has no idea why this is the case, but believes the brain must react to its surrounding in way we do not understand yet. So, simply sitting in a bigger room causes brain activity to behave differently when concentrating of difficult tasks.
Ultimately, it may mean universities and the professional bodies will have to look at where they make their students sit exams. Bower said: “These spaces
Top Irish FR students
AccountancySchool.ie director Dave O’Donoghue recently honoured prize-winning ACCA students at the college’s awards ceremony. He said: “It was a pleasure to finally meet in person with some of my FR students from the recent exam sittings.
EY’s UK boss to step down`
After four years at the helm, EY UK boss Hywel Ball has announced he is to step down from the top job.
Ball has led the accountancy firm since 2020, but in a recent email told fellow partners he felt the time was right to “hand on the baton”. He could have stayed until June 2025.
The 61-year-old had been a big supporter of the move to split the firm – ‘Project Everest’ –and Ball is leaving at around the same time as global chief Carmine Di Sibio. Ball will be leaving behind a salary of £3.6m.
EY’s 930 equity partners will now be consulted on who they think should succeed him.
Top for gender equality
Deloitte UK has been named in The Times’ Top 50 Employers for Gender Equality list for the ninth year running.
The Big 4 firm said it continued to remain committed to offering its people flexibility in where and how they choose to work, and its approach to hybrid working was an important part of how it supports its people. The Future Leaders Programme has also been expanded to 1,000 people, with the aim to improve representation of women and other underrepresented ethnic groups at all levels of the firm. This year’s partner promotions saw 27 (33%) women being appointed.
are often designed for purposes other than examinations, such as gymnasiums, exhibitions, events and performances.”
We were honoured to have Ronnie Patton FCCA and Louise Johnston make the awards. These students achieved the highest mark in Ireland in the last three ACCA FR exam sittings and we got them all together at our awards event. Congratulations again to Megha Aggarwal, Abigail Coats and Libby Howard, three brilliant ladies.”
Hopes and fears
UK workers are optimistic about new opportunities and ways of working, but the pace and magnitude of change is overwhelming, according to PwC’s Hopes and Fears Survey. The survey, of over 56,600 workers in 50 countries, found that workers recognise the potential of GenAI to improve their efficiency and workload, with three times as many (57%) this year saying that GenAI could help them to be more efficient compared with last year (19%).
In the UK, the worry is that 45% of workers feel too much change is happening at once, and 40% don’t understand the need for some of the changes.
Anna Kate Phelan is Head of Product at Eintech
EDDIE HERBERT Investor relations a growing priority
Carbon accounting has become increasingly crucial in corporate reporting and investor relations.
This aspect of Environmental, Social and Governance (ESG) reporting is gaining significant traction among investors and stakeholders.
Investors now look beyond traditional financial metrics to assess a company’s long-term sustainability and risk profile. They recognise that a company’s carbon footprint can materially impact its operations, reputation and financial performance. Key investor expectations include transparent disclosure of Scope 1, 2, and 3 emissions, clear science-based reduction targets, concrete strategies to achieve these goals, and regular progress updates.
Carbon accounting data significantly influences investment decisions. Companies with strong carbon management practices are often viewed as better prepared for future regulatory changes and market shifts, while those with high emissions or inadequate reporting may be seen as higher-risk investments. This information helps investors assess a company’s exposure to climate-related risks and opportunities, informing decisions about portfolio allocation, engagement strategies, and potential divestment.
Accountants, with their expertise in data analysis, financial systems, and regulatory compliance, are well-equipped to assist companies in implementing robust carbon accounting practices and meeting investor expectations for emissions reporting.
Effective carbon accounting can build trust with investors, enhance corporate reputation, and potentially unlock new capital sources in an increasingly climateconscious market. Those who fail to address this aspect may find themselves at a competitive disadvantage in attracting investment and meeting stakeholder expectations.
Edward Herbert, Sales & Business Development Manager, Net Zero Now
AccountsIQ secures
€60m investment
AccountsIQ, the cloud-based accounting platform, has announced it has secured a €60m (£51m) Series C investment from Axiom Equity.
The equity fund investment will be focused on continuing the development of AccountsIQ products to shape the finance function of the future. In particular, it wants to develop AI-powered products. The plan is to double its team to over 200 people over the
AI will turbocharge cyber-crime
Cyber-criminals are likely to weaponize artificial intelligence (AI) technology to commit bigger, more sophisticated and more dangerous crimes, warn chief internal auditors.
New research has found that 78% of chief internal auditors believe AI will negatively impact cybersecurity and data security, while 58% say it will exacerbate fraud.
The survey of 985 chief internal auditors across Europe reflects the views of internal audit and risk management experts and underscores the growing concern among business leaders about the
risks associated with AI. Organisations are being advised that in preventing AI-powered attacks they will increasingly need to deploy the same AI tools as part
of their defences. The best defence against AI-powered cyber-crime will often be AI-powered cybersecurity solutions!
Anne Kiem (pictured) , CEO of the Chartered Institute of Internal Auditors, said: “AI is evolving rapidly, and as with all new technologies it can be used for positive and negative reasons. Our research has shown that chief internal auditors are alert to the threats, and this should bring some comfort to those organisations that have a strong focus on risk control, risk mitigation, and having a wellresourced internal audit function.”
Dext combines its products into one!
Dext, the leading bookkeeping automation platform provider, has announced it is combining its three products into one integrated experience, which it says will remove the friction between businesses, bookkeepers and accountants.
Dext’s Bookkeeping Automation Platform will connect Dext’s Data Capture, Data Health & Insight, Data Automation and Practice Productivity in one place, making it
easier for users to capture data in real-time while ensuring accurate
Tap to pay and more from Xero
Xero has announced a suite of product innovations at Xerocon London.
New tax, payments and payroll manager features were all unveiled, including an industry-first Tap to Pay in the Xero Accounting Mobile app.
A new partnership tax solution will be available from July in beta. Xero has also opened the beta of its new integrated practice management and tax solution in
next couple of years.
Tony Connolly, Founder and CEO of AccountsIQ, said, “Having hit a critical milestone with over 1,000 customers, we are now poised to take the AccountsIQ product and service to the next level.”
Bright acquires MyWorkpapers
The Bright Software Group has bought MyWorkpapers, as it looks to expand the products it provides its accountancy practice customers.
Founded in 2009, MyWorkpapers
Xero Practice Manager (XPM). The full launch is coming later this year. Tap to Pay is being launched
has evolved into a full suite of specialised workpaper packs for all types of engagements undertaken by accounting firms.
Rich Neal, CEO of MyWorkpapers, said: “After initially exploring an integration with Bright products, we saw the opportunity for an even deeper relationship to provide a true, end-to-end cloud solution. By bringing together the expertise of our teams we will expand upon the integrated, cloud-native accounting suite for all types of engagements.”
recording.
Stephen Edginton, Chief Product and Technology Officer, said: “By unifying our Prepare, Precision and Commerce products in one place we are enabling customers to combine an upgraded Dext Prepare user experience and its leading data capture, automation technology and applied AI, with Precision’s data health add-ons, client by client, within one product.”
in the UK and Australia first, and will allow businesses to accept payments on the spot from their app. Tap to Pay will first be offered to UK Android users in a beta program in August.
Xero’s Diya Jolly said: “Expanding our tools to include features like partnership tax and the new payroll manager will equip advisors to better support their clients with critical small business needs and move towards a more streamlined practice management experience.”
UK heads digital tech FDI league
The UK attracted more digital technology foreign direct investment (FDI) projects than any other country in Europe last year, according to EY’s 2024 UK Attractiveness Survey.
Despite a 19% decline in project numbers across Europe, digital technology remains the leading sector for UK FDI and played a significant role in the country’s year-on-year FDI growth.
Disparity plain for all to see I was not surprised to read that the accountancy profession seems to be systematically holding back women in practice (‘Gender disparity laid bare’ –PQ, July 2024 cover) .
Lucy Cohen has been at the forefront of smashing accounting stereotypes, but it appears even she can’t fight the inherent sexist nature of accountancy!
Too few women are choosing to join the profession via
the practice route.
Both ICAS and ICAEW students’ female levels have never hit the 50% mark; it means fewer than one in three current ICAEW members are women.
In stark contrast, AAT has a female membership of over 63%, and at the ICB it is 78%. So, is this
saying the profession welcomes females as long as they are doing the basic accounting stuff and bookkeeping. We have to stay in our place and leave the proper accounting to the men.
It takes me right back to my school days. I was good at maths, which meant I ended up in
a predominately male top set. So, I am used to the showing off and patronising!
However, everyone keeps telling me that accountancy is not just about numbers, and that we need emotional intelligence too. But the maths geeks still seem to rule the roost and that has to change, and soon. In truth I am looking forward to working with the AI. I just hope it is not men who have programmed it…
A female maths geek and trainee accountant (name and email address supplied)
Our star letter writer wins a fantastic ‘I love PQ’ mug!
INAC uplift needed!
I saw PQ’s recent post on LinkedIn regarding the 5% uplift on AAT INAC exam Question 2 back in 2023.
I would like to advise you that, a year on, the issues with INAC exam task 2 have still not been resolved by AAT. There have been a high number of complaints from students about this exam. AAT took their time to respond to the complaints, they have reassured students they are taking complaints seriously and are investigating this matter. Meanwhile, First Intuition Director Nick Craggs has released a video on TikTok to say he spoke to his sources at AAT and uplift will not be provided. Here is the link to his video (it was released prior to AAT investigating a number of complaints raised. So they knew their answer to our question about an uplift even before they looked into our complaints).
Students seem to think that AAT will not uplift again due to negative publicity about a second uplift.
Are you able to help students in any way regarding this? There are a lot of desperate students seeking justice.
Name and email address supplied
INAC challenges persist
Numerous students are still facing challenges with the INAC exam, specifically in task 2. Despite filing complaints, the situation has yet to be resolved. The wording on task 2 continues to perplex students resulting in their failure to pass.
It is urgent that a thorough investigation be carried out to rectify this issue.
Name and email address supplied
The Editor says: We have received AAT’s official response and there is not going to be an uplift. See our news story in this issue!
As you can see from our letters, the perceived problems around AAT’s INAC assessment are taking centre stage! In fact, AAT picked up the problems first on social media. We were also in contact with them, but many students are going to be disappointed with the official response. The full statement can be found on page 5, but the gist of the AAT’s investigation is, “the performance of the assessment is in-line with our expectations, we are confident that no adjustments are required”. Elsewhere, we discovered it can be tough at the top, as the world’s fastest accountant found out. Eugene Amo-Dadzie (pictured) went on LinkedIn to explain what had happened: “Elite sport is tough. Hugely disappointed and frustrated to not be selected to represent team GB in the 4x100m relay at the Paris Olympics. Like a rollercoaster, the highs come just as fast as the lows.
“It takes literal blood, sweat and tears and that’s just a prerequisite to get to the start line.
“As an ACA chartered accountant I’ve been in many high pressure and high performing environments. Just like the boardroom, my mind has been sharpened and my ability to problem solve enhanced. Truly, there’s nothing quite like sport.
“A beautifully tumultuous journey to this point… kicking, screaming or feeling like I’m going to be sick… still, don't be surprised as I jump right back in line for another ride! Struck down, but not destroyed (2 Corinthians 4:8 - 9).”
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No accounting 4 the love of football
Our love of the game always comes at a price. But does anyone know the true price?
PQ magazine recently brought together four top experts to talk football finance. University of Liverpool’s Keiran Maguire was our keynote speaker, and he told the packed audience that football was invented in 1992 by Sky!
Since then, he explained retail prices have increased by 108%. The revenue for the Premier League’s 20 teams (it was 22) has increased by 2,600%. And this is – despite Maguire’s lighthearted comment – a mature industry.
So, why has the Premier League been so successful? Maguire explained that the Premier League went to Malaysia, Nigeria, Australia and the United States and said, “we have this great product and we are going to give it to you for free”. British football had a terrible reputation at the time and was in a bad place. But it was from the tragedies of the 1980s that the Premier League sprung.
Those broadcasting rights were given away
Our speakers on the night
• Sofia Thomas, partner in Juno Tax & chair of the International Sports Association
• Patrick Way, King’s Counsel & football tax expert
• Kunal Sajdeh, manager in the Deloitte Sports Business Group & sub-editor of Deloitte’s Football Money League
• Kieran Maguire, University of Liverpool & The Price of Football Podcast
for five years for free. Then the Premier League went back to the broadcasters and said, “you love the product – now you have to pay!” Maguire felt it helped that English is the world’s second language, and the other benefit is that football is a live action event. That means for advertisers football brings people together live, and we don’t watch a lot of live television any more. It means football rights just keep going up.
But there is one slight problem. During the period in which revenue has increased by
2,600%, wages have increased by 3,600%, and 18 out of 20 Premier League clubs in 2022 (a non-Covid year) lost money. The only two clubs to make a profit. One was Brentford, in their first season in the Premier League, who paid many of their players £30,000 a week, which by Premier League standards is low. The other club to make a profit in 2022 was West Ham United, and that’s down to Londoners paying for their stadium!
So at a top-line level football is fantastically successful, but at a bottom-line level football it is not, stressed Maguire.
If we drop a tier to the English Football League (ELF) Championship the average loss made by clubs is £467,000 a week. That means owners are having to find the money to fill the gap, or clubs must sell their best players each season. Even clubs that benefit from parachute payments are losing money. Sheffield United’s accounts came out recently, showing they are still losing £500,000 a week.
Why do we have this financial conundrum?
It’s because of the gaps in football. There is a gap in the top six of the Premier League between the four clubs that qualify for the Champions League and the two clubs that don’t. Maguire ventured that the financial gap this season will probably be between £120m and £140m. From next season when we move to the Swiss model it could rise to £200m. He emphasised that UEFA is under pressure to concede more money to the big clubs. But how do clubs get this money? Maguire explained: “You get it by gambling, going into the January transfer market… but you can’t get six into four. That is why the super league was a fantastic product from a business point of view – it de-risks your investment in football. You are there by invitation, you could finish 11th in your own league and still be guaranteed a big pot of money. So the top six are incentivised to spend
too much money. At the bottom, despite the parachute payment going down, it means a decrease in revenues of between £50m and £80m.”
He emphasised that what we have now in modern day football is a “casino game”, with everyone twisting on 19. And everyone knows that when you twist on 19 the house always wins!
There are 18 clubs out of 20 in Premier League losing money and 24 out of 24 clubs in Championship losing money – if you drop down the lower two tiers you see losses (they do not disappear), but they are a fraction of what is being spent in top two tiers.
What is the solution. Well, we do have to have some sort of control, according to the Premier League and EFL. These controls are called the profitability and sustainability rules. The reason for this, said Maguire, is because they encourage neither profitability or sustainability, because they allow you to lose money. As he explained: “I am an accountant by trade. There is a thing called profit and loss and I know the difference between the two and you would think the football companies would know that too!” But this is football.
• A big thank you goes to the sponsors HMRC Enquires, Investigations & Powers magazine, ACCA, ICAEW and The Chartered Accountants Student Society of London. You can check out the full video at https://youtu.be/_ c47Xw8pQUI
In ut: aste numbers into 1 column or 2.
Ou ut: choose from multi le o tions:
Example uses:
Find outstanding items on control/sus ense/ customer accounts.
Match multi le recei ts to ayments.
Identify backdated items.
See which numbers have been omitted from a total. Distinguish reclassification issues from net differences. Com are two statements with different grou ings.
You can set a tolerance for rounding differences.
Sotozeo even finds trasno osition eroors !
Transfer taxes and the missed open goal!
HMRC could have missed out on millions of pounds in tax from football transfers, says the Chartered Institute of Taxation (CIOT)
Football agents brokering transfers can offer their services to both players and the selling or buying club, known as ‘dual representation’. However, the two have different tax liabilities, with agent fees paid by a club tax deductible but those by a player not. Yet fees charged to a player by an agent are often paid by the club and, when this happens, the VAT-inclusive cost of that fee should be considered taxable income for the player as a benefit-in-kind.
The FA’s updated Football Agent Regulations entered into force on 1 January 2024. Following this, HMRC updated its guidance on the tax consequences from dual representation
arrangements. In the guidance, HMRC has warned that dual representation agents must provide a breakdown of what percentage of their work was for the player and the club, and it “does not accept” a 50/50 split in agents’ fees as the default position.
The new regulations could see HMRC look back at previous transfers, especially highprofile cases where the amounts are likely to be substantial. They could also write to clubs, encouraging them to check they’ve applied the rules correctly to all transfers and continue to do so in the future.
CIOT immediate past president Gary Ashford said: “Fees to the agent are primarily paid by
the player and are non-tax deductible, since the player won’t be VAT registered. The complication comes when these fees are paid by a club, which is VAT registered.
“In these scenarios the club can only recover VAT on its own fee to the agent and not on services not received by it, such as the player fee. While in the past many transactions of this kind split the overall cost 50:50 between the club and player, HMRC’s view now is that should not be accepted automatically and where it’s not justified there is a loss of tax to the Exchequer.
“HMRC also believe that in ‘dual representation’ cases the agent primarily acts for the player, so any attempt to treat any part of the agent’s fees as payable by the club needs to be supported with a lot of evidence if it’s not to be subject to a ‘VAR’-style review.”
The tax impact
The following table, extracted from HMRC guidance, illustrates the tax impact of an agent’s fee paid directly by a club to an agent, and how this differs if it is declared as club or player services.
What do accountants actually do?
A new podcast from ACCA is busting the myths that surround the profession
ACCA recently carried out research with GenZ students and non-students to explore what the next generation of professionals think about accountancy. When reviewing the results, it was clear the group had more questions than answers. What do accountants do? Don’t you need a maths degree to become qualified? Is it really boring? Will there be any jobs left after the rise of AI?
In response, ACCA recently launched a new podcast, called ‘By All Accounts…’, to lift the lid on the most common myths some might have fallen for about this fulfilling career path. The five-episode audio and video series is hosted by Maiki Lynch, our Qualification Education Liaison manager. She interviews ACCA members and students to discuss their real-life stories and unique journeys to that brought them to accountancy, from making impact at MercedesBenz, to four-day working weeks, and turning a craft beer passion into a career.
Each 20-minute episode focusses on a specific myth and features two guests alongside host Maiki.
Episode 1: Is accountancy boring?
In episode one, Maiki sits down with ACCA members Angelika Cyrulinska and Remi Allen-Bond to dig into their creative careers.
From making a real impact on big projects at Mercedes-Benz, to advising on innovative strategy at Santander, they give a glimpse into the range of exciting and dynamic ventures that accountants can get stuck into. Angelika shares where she got the accountancy bug as a school-leaver, and Remi describes the graduate programme that got his career going after finishing his degree.
Episode 2: Is there a work-life balance for accountants?
ACCA members Clara Tooth and Shaun Fenwick share what the lifestyle of an accountant is really like. From preparing for busy times of year to streamlined, time-saving work practices, they dig into the reality of balancing a career in finance with the rest of your life. They also explore the benefits that finding the right workplace can bring – from flexible and hybrid working policies, to free beer Fridays – while chatting through Clara and Shaun’s unique journeys into accountancy.
Episode 3: Do you need a maths degree?
Maiki is joined by ACCA members Kyle Simpson and Benjamin Kewin to get the real story on how much maths matters for a career in accountancy. From nearly failing maths class at
school to finding the right support during exam season, we find out what it’s like to become an accountant when maths wasn’t your favourite subject. Ben and Kyle share their non-linear paths to ACCA membership – including dropping out of uni – and what they both find are the key skills required to make your career in accounting a success.
Episode 4: Is the training worth it?
ACCA student Ravi Tanna and PQ Magazine’s accountancy graduate of the year 2023, Xhulja Duka, give the low-down on the challenges many students face while studying for their accountancy exams. From needing to resit exams to knowing when you should take a break, they dig into the details of what can make this time tricky, and what can help take the edge off. Ravi and Xhulja discuss their experiences working as accountants during their studies, including why they recommend getting qualified as early in your career as you can.
Episode 5: Will AI take all the accountancy jobs? In the final episode of the series, Maiki sits down with experts to discuss how artificial intelligence is changing the world of the accountancy.
Imtiaz Ahmad FCCA speaks about how different technologies have changed accounting, and the benefits of AI in his own practice. ACCA UK’s Head of Technology, Alistair Brisbourne, talks us through ACCA’s ‘AI in the Finance Profession’ report. It includes surveys on the concerns of current ACCA students and members and describes the ways in which he believes AI is going to affect the roles of accountants within organisations in the years to come.
Having launched worldwide last month, ‘By All Accounts…’ has already been downloaded by enough listeners to fill Wimbledon’s Centre Court almost seven times over. And with listeners from all continents, it’s clear that the misconceptions about the profession are international – but hopefully not for much longer.
All episodes of ‘By All Accounts…’ are available to listen on Spotify, Apple and other podcast networks or watch via ACCA’s YouTube channel. For more information visit www. accaglobal.com/byallaccounts
• Thanks to ACCA for this article
Profession fit for the future
ICAS CEO Bruce Cartwright
says it’s time to redefine and map out a bright future for the accountancy profession in an evolving world
At a time when the world is evolving faster than ever before, many are questioning what the future might look like for the accountancy profession.
For 170 years ICAS has remained relevant in a constantly changing world; this hasn’t been by chance, but the result of careful planning to make sure that we provide the profession with the skills, guidance and regulation to act as trusted advisors to society at large, in all sectors around the globe. Our membership spans far beyond Scotland, and 83% of FTSE companies employ a CA in their senior team.
The challenging economic climate, the pace of emerging technologies, the developing sustainability arena and the current state of geopolitics are all major drivers for our profession to deliver value, ethical leadership and insight for the benefit of society. We are at a pivotal time in history, where cumulative influences are calling for significant change, so we must act now.
Shaping the profession
In response, ICAS has launched Shaping the Profession (StP), an exciting new programme of activity to examine, consider and map out an ambitious future for accountancy.
Our programme aims to make sure that the accountants and financial professionals of tomorrow can deliver services that truly meet the needs and expectations of a rapidly expanding list of stakeholders. These include shareholders, investors, employers, businesses, governments and, of course, the public at large.
ICAS has public interest at its core, it’s enshrined in the Royal Charter that founded us in 1854 and is a responsibility we take seriously. In beginning our StP programme we’ve committed to stepping outside the narrow sphere of the profession itself to find out what those outside of it think. This will allow us to define and better understand the societal needs and interests that we need to fulfil, both now and in the future. We already know what some of these needs are, such as interpreting financial data and supporting informed decision-making, but our programme will test these against tomorrow’s requirements. Some will no doubt continue to be core to the public interest mandate we serve, while others will need to be transformed or may no longer be relevant at all. We are resolved to expand our understanding from the perspective of those we seek to serve – wider society, those who use our services, as well as those within the profession.
Programme prioritisation
Clearly the field is vast and as we strive to be
bold and radical in our approach, we need to focus our efforts where it matters most. We’ve identified five areas of work, which will shape the StP activity to come:
1. Societal and stakeholder needs
The ‘public interest’ role and the contribution accountants can make. We’ll focus on finding out what society needs from the profession and how we can create better value for society through, for example, sustainability driven decision-making. We will also ask questions about the nature of trust and of trusted sources of information.
2. What is a professional?
What are the distinctive characteristics and duties of a professional? We’ll explore the values and competencies expected of professionals to define what a 21st century professional might look like. This includes considering whether their ethical role and contribution should be extended, and if ‘professionalism’ in its strictest sense (i.e. being a member of and bound by the competency and conduct requirements of a professional body) will still matter in the future.
3. The impact of technology, including AI
We’ll consider how technology is changing what society expects and values from professionals, and how professionals can best fulfil those needs. We want to look at how technology is redefining the role of accountants and how it might look in the future, including how the profession will need to adapt to these changes. Central to this is considering how technology could impact ethical leadership and the
importance of human judgement.
4. Building an exciting and fit for purpose profession for future generations
We will build on our findings to equip future accountants with the relevant skills, capabilities and knowledge to deliver value to society. And in doing so, we’ll ensure that accountancy remains a valued, purposeful and exciting profession for tomorrow.
5. Regulation
We’ll consider the potential need for a shift in the approach to regulation, taking a more holistic view and being clear on the purpose and objectives of regulation. For instance, is regulation a means to an end, should it be objectives and outcomes focused rather than about rules?
StP is an ambitious project, which hopes to ultimately shape the profession of the future. To deliver real impact, the project will need a collaborative approach with partnerships both within the accountancy profession and out with. We know that change is required and that the stakes are high. But we are not scared to ask the hard questions and while we don’t have all the answers yet, we are working towards them.
As an agent for change, ICAS is embracing and welcoming disruption to ensure our profession is fit for the future. Look out for insights and activity as our StP programme develops.
Find out more about Shaping the Profession here
• Bruce Cartwright is Chief Executive Officer of ICAS
The power communityof
AAT’s Montanna Stafford (pictured) explains how the advisory groups allow you to harness the power of community
We are looking for 30. That’s 30 AAT students who want to make a difference!
AAT needs people who are willing to put up their hands and be part of a select group directly feeding in to improving the student experience of their peers and generations of students to come.
These 30 people have the potential to improve things today, but also to transform the AAT journey for learners tomorrow.
And before you ask: no, you do not have to be under 30 (or over 30) to be involved with this fantastic opportunity. All ages are welcome. Diversity is the AAT’s spice of life.
AAT’s advisory groups
Last year, AAT launched its advisory group initiative. As with many of the best ideas it was an innovation forged in the face of adversity. Challenging technical issues hampered the rollout of a new assessment platform. But knowing exactly how to fix it required ideas, testing and feedback from the people who sit assessments – students themselves.
This prompted us to look at how we can stay on top of these kind of issues going forward: harnessing the power of community to stay ahead of the game. As a result, our student advisory group was formed, along with an employer-focused group and an AAT training provider group.
The concept is straightforward – the groups are a regular discussion forum where AAT asks for group members’ views on important topics.
PQ magazine and its editor, Graham Hambly,
supported the groups’ formation at the time and has done ever since. He says they are now a vital way to gather students’ views.
What to expect as an AAT student advisory group member?
Once an AAT student advisory group member is selected (by the end of August), they join the group for 12 months: from 1 September 2024 until the following September.
There’s one meeting every three months (three of these are online and there’s one face-
to-face in London).
At the meetings you’ll be part of discussions on the future shape of qualifications, how we can improve delivering them to learners, what training providers can do, and what new support might be helpful for our diverse student community.
AAT listens genuinely to your feedback to help spot the practical improvements we can make.
Who is AAT looking for?
It’s all about learning from the experience of the wider community, taking on board different perspectives and giving a voice to everyone.
There will be space for students at any stage of their journey – all that’s required is a passion for sharing and enhancing the student experience.
AAT wants people who can bring their views, but also think about how others might be affected by something.
It’s about thinking through the many different perspectives across the student community. Why is thinking about others’ views something that is good for you? Because it gives us the opportunity to develop and practice some really important ‘power skills’, the skills that are in huge demand by employers right now and will define which accountants get hired in the future.
Applications are now open
The OG student advisory crew are now coming towards the end of their term. They are getting ready to hand over the reins to the next cohort of change-makers.
In fact, in less than two months, the secondever intake of advisory group members will be able to start shaping the future.
I want to thank our ‘guinea pigs’ (I hope they won’t mind me calling them that, because it’s from a place of love!). These amazing people have been willing to give this new, untested idea called ‘advisory groups’ a go. You came with your passion, your honesty and your open minds. What’s more, you’ve built a strong sense of community with each other.
I am proud to say that this group will be a model for future student advisors in terms of looking after each other and ensuring everyone can contribute and play a role in shaping the discussion. On a personal level, I’m really excited about continuing to foster that thriving, collegial community.
Now, for anyone considering dipping their toe in the water and registering their interest to join the next advisory group, I have one piece of advice: APPLY!
Now’s the chance to make your voice heard and be a part of the exciting changes we can build together.
We’d love to have passionate people on board with us on what will be a great journey for you and for us, to maximise the potential for everyone.
If this opportunity resonates with you, we want to hear from you.
Please visit the AAT website and complete the quick and easy expression of interest form before 31 July 2024.
• Montanna Stafford is a Product Manager at AAT
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From crisis to confidence
Diana Melville explains how integrity and transparency can transform
public services
As we emerge from the throes of a general election, the spotlight falls once again on where, when and how taxpayers’ money will be spent on public service delivery. The quality and scope of these services, with rising demand eating up budgets and diverting resources, is anchored in public financial management (PFM).
Yet, right now, there is much work to do. The Office for National Statistics (ONS) reports that only one in three people in the UK trust local government, with just over one in five people in the UK satisfied with their councils, as reported by Ipsos Public Services Index. The question therefore looms: how can public bodies strengthen trust, transparency and ethics to deliver better services for better lives?
With a new government in place, the public sector has an opportunity to show how ethics and sound PFM go hand in hand. At CIPFA, we are exploring strengthening trust in PFM. And by drawing on established principles, CIPFA charts a course for the sector towards greater stability and public confidence.
Good governance
At the heart of public sector leadership and decision-making lies integrity and ethics, as emphasized in the Nolan Principles and the International Framework for Good Governance in the Public Sector. These principles serve as a compass for public officials, ensuring their actions and decisions align with ethical standards.
The Nolan Principles outline seven key tenets essential for public life:
• Selflessness: Holders of public office should act solely in terms of the public interest.
• Integrity: Avoiding conflicts of interest.
• Objectivity: Making decisions impartially, fairly and on merit, using the best evidence and without discrimination or bias.
• Accountability: Being accountable to the public for their decisions and actions.
• Openness: Taking decisions in an open and transparent manner.
• Honesty: Being truthful.
• Leadership: Exhibit these principles in their own behaviour and treat others with respect. These principles are reinforced by the International Framework for Good Governance in the Public Sector, which stresses the importance of ethical values and the rule of law across all levels of public administration. A renewed commitment to these areas can strengthen decision-making, especially during times of change.
While PFM serves as the backbone of accountable and effective public services, ethics and good governance act as the catalyst. Finance teams must therefore ensure that public funds are used responsibly, and that decisions around resource allocation remain at the heart of sound PFM.
Accountability and decision making
When resources come under strain, decisions need to be more than technically correct; they must consider the long-term impact to ensure sustainable service delivery.
Openness and honesty in the evaluation of options and assessment of their impact are essential. In the ONS survey, just over half of the UK population said that balancing the interests of current and future generations shaped how much trust they have in government. This was second only to abiding by the same rules as everybody else (63%).
We can therefore see that accurate and reliable financial information and analysis is needed for PFM to be effective. This means having robust financial systems, continuously assessing and verifying financial practices and, not to forget, accountability – holding teams responsible for their actions.
Professional ethics
Accountants play a critical role upholding reliable data-driven decisions. Their work
is guided by the Standards of Professional Practice (SOPP). Similar to the Nolan Principles, SOPP includes five key areas of priority:
• Integrity: To be straightforward and honest.
• Objectivity: Remaining free from bias, conflict of interest or undue influence.
• Professional Competence and Due Care: Maintaining knowledge and skills and act in accordance with professional standards.
• Confidentiality: Respecting confidentiality of information.
• Professional Behaviors: Complying with laws and conducting oneself in a manner that reflects well on the profession.
Finance professionals may face pressures to present information in a certain way, to defer challenging decisions or other undue influence. That’s why adhering to ethical standards is crucial for maintaining trust and integrity in PFM.
A culture of ethical governance
Ethics and trust form the bedrock of effective PFM, reinforcing accountability for the use of taxpayers’ money. PFM professionals also play a crucial role in building and maintaining an ethical culture within public bodies.
Such a commitment not only builds public trust, but also fosters a culture of ethical governance that benefits society as a whole. When public service delivery improves, it enriches lives and strengthens communities.
CIPFA calls on the public sector to embrace these values; we have seen far too many examples when our trust in elected officials and public servants has been destroyed by bad decision making and a disregard for the principles and standards essential for public life. A return to core standards and principles is the only way to restore trust, transparency and unwavering ethical standards for the future ahead.
• Diana Melville is a CIPFA Governance Advisor
Just keep moving
Exercise can improve your mental health and help reduce stress around exam time, says Paul Guess
Most of us already know the physical benefits of exercise and it’ll come as no surprise that moving more can improve your wellbeing.
However, accountancy can be a stressful profession and if you find yourself facing work pressures, such as long hours and tight deadlines, then exercise can fall to the bottom of your to-do list. So how can we find more ways to incorporate more movement into our daily routines?
With research revealing that exercise, such as walking and running, is twice as effective as taking anti-depressants and can even help with depression, being physically active doesn’t have to mean joining a gym or committing to running a marathon. It doesn’t even have to be 10,000 steps a day.
Deciding to stay physically fit is the first step to reaping countless health benefits. But how can you stay active? It sounds challenging, especially if you’re not used to being physically active, or you don’t enjoy it, but there are simple ways that can give your mind and body a boost in minutes.
Exercise tips
Go for a swim
Swimming is known to have similar health benefits to walking; it’s the second most popular physical activity in the UK. One of the advantages of opting for swimming is that you can take things at your own pace.
Dance away the stress
A great way to move while not feeling like you’re
exercising can be dancing. It doesn’t just keep you fit and healthy; it gives you a more positive outlook on life. Learning a new dance can also help to keep your memory sharp and is associated with a lower risk of mental decline.
Boost your mood by running
If you’re wondering how to reduce stress and keep fit, then running is a great exercise to add to your routine. It reduces stress hormones like cortisol while increasing serotonin and dopamine, which promote relaxation and mood regulation.
Go for a walk
Walking reduces stress by lowering cortisol levels, especially if you venture outdoors amidst nature. The release of endorphins during walking boosts mood and can alleviate symptoms of depression and anxiety over time. It’s also a form of mindfulness as it provides an opportunity for reflection and a break from daily stressors.
Get the most out of your household chores
Try taking the stairs instead of the lift, walking to work or the next bus stop to improve your exercise levels. Housework is also a great way to get moving. You can engage in gardening, playing with your children, and doing DIY and shopping to get your heart pumping. You could also wash your car by hand or clean your windows, either of which will get you moving more.
You don’t need to head out to the gym just because you think that’s what you should be doing. When you find an exercise you enjoy, you’re more likely to stick with it and continue doing it. By choosing an activity you enjoy and finding small ways to add more movement to your routine, you can reduce stress and anxiety while improving your physical wellbeing.
• Paul Guess is a mental health expert at caba, the occupational charity for ICAEW accountants and their families
How is your mental health?
New mental health research from Deloitte has revealed that the cost to employers of poor mental health is £51bn per year, a decrease from £55bn in 2021 but an increase from £45bn in 2019, before the pandemic.
Presenteeism is the largest contributor –where people work in spite of illness and not perform at their full ability – costing employers around £24bn annually.
Deloitte’s fourth report on mental health and the workplace also shows that over half (58%) of survey respondents say their mental wellbeing was good or excellent. There were also improvements for younger people with 64% of 18-24-year-olds reporting that their overall mental health is good, an increase from 53% in 2022.
Deloitte’s research found an increase in some elements of burnout. Some 63% of respondents
said they were exhibiting at least one sign of burnout, such as feeling of exhaustion, mental distance from their job, or a decline in performance at work, an increase from 51% in the previous survey. Given the implications of burnout on job performance and productivity, as well as employees’ overall wellbeing, there is a clear case for employers to recognise and address this issue.
Overall, the main concerns affecting the mental health of working adults are the increasing cost of living (60%), personal/family finances (46%) and job security (22%). Working parents were most concerned about the rising cost of living (65%), alongside
family finances (55%) and about the mental health of their children (29%).
Deloitte’s return on investment analysis of employee mental health interventions that was conducted as part of the research shows, on average, for every £1 spent on supporting their people’s mental health, employers get nearly £4.70 back in improved productivity. Higher return on investment can be achieved by early interventions, such as organisation-wide culture change and education, than support that may be needed at a later stage when a person is struggling.
A new ledger for CASSL
The Chartered Accountant Student Society of London (CASSL) recently held its AGM General Meeting, marking a transition in leadership. New chair Aydin Bolton (pictured right), shares his vision for the coming year
Attendees were welcomed to the 141st CASSL AGM by Malcolm Bacchus, who has served as CASSL’s Honorary President since 2017. Bacchus is a former chair of CASSL himself and has now, as of June, taken up the role of President of the ICAEW.
The society’s outgoing chair, Sunny Yang, spoke about his proudest achievements in the year, including the establishment of a mentorship programme with Kingston University, championing diversity through events such as the ‘Around the World in 80 Days’ Annual Ball and the vast networks that CASSL has reached through its initiatives. CASSL can be especially proud to have been awarded the accolade of ‘Student Body of the Year’ at the PQ magazine awards for the second consecutive year.
Before formerly taking on the role of chair, as Treasurer of the society I reported on the 2023 financials, offering welcome news to the society’s members in the form of a healthy surplus figure. This was largely a testament to the encouraging sponsorship that CASSL has established in previous years. The society will now work towards employing its resources wisely in the current year, to increase opportunities for all its members.
Following the secret ballot, the membership
elected a new committee for the 2024/25 year: Chair; and ICAEW Student Council
Representative Aydin Bolton (PwC)
Vice Chair
Oliver Sighe (Hardwick & Morris)
Treasurer Kareena Rathod (PwC)
Secretary Lucas Silva (Berkeley Group)
Head of Student Ambassadors
Ali Husein (PwC)
Events Director Jordan Muir (PwC)
Marketing Directors Sophie Khaleeque (PwC) Swetha Nandakumar (PwC)
Development Director; and Diversity Director Krita Shah (EY)
Wellbeing Director Justin Highfield (Haysmacintyre)
LSCA Representative Dayem Ahmad Chughtai (PwC)
LSCA Representative; and ICAEW Student Council
Representative
Sunny Yang (EY)
In spite of the prominence of the Big 4 (specifically, PwC) representation in the new committee, one of my central aims in the year is to engage with students from smaller accounting firms, for whom CASSL can offer the greatest social benefit.
I want to express my heartfelt gratitude to the
CASSL events schedule
The upcoming year promises dynamic events, workshops and networking opportunities intended to foster personal growth and career development.
Some of CASSL’s events over the coming months include:
An Introduction to CFA – with Kaplan Event space TBC
MBA Open Evening – with LBS
London Business School, Regent’s Park, NW1 4SA
26th July 2024, 6 pm
10th August 2024, 9 am
17th September, 1 pm
26th September, evening
Networking Series: Boat Party on the Thames Late September, subject to change
CASSL events are, with few exceptions, open to the general public –whether ACA, CIMA, ACCA or otherwise, trainee or qualified, and even to those beyond the accounting profession. Members regularly bring along
outgoing committee, whose dedication and hard work, particularly under Yang’s double term, led to many notable achievements.
Reflecting on my personal journey, I have to admit I never really considered the accountancy profession until my offer from PwC – but looking back, I am certainly grateful that I accepted! I received a scholarship at age 12, which paved the way for my academic success and eventual traineeship at PwC. As the first in my family to attend university, I had to overcome the lack of familial role models in finance and accounting. I believe my diverse experiences, from managing a charity fundraising campaign to working in the House of Commons, have equipped me to lead CASSL with foresight and purpose.
Looking ahead, my vision for the society centres on themes of inclusivity, connections, and career growth. I want to foster a culture of collaboration, ensuring every member feels valued, and is offered the support needed to help them excel at the ACA qualification and beyond.
their non-accountancy friends to events, and should feel encouraged to do so.
Bookings can be made, nearer to the event date via the ICAEW website and through CASSL’s social media accounts on Instagram and LinkedIn. Events, sponsorship and any other enquiries should be forwarded to aydin@cassl.uk
How to boss your objective test
Nasheen Wuisman talks you through what you need to do to ace the objective tests
A, B, C or D? Which one do you choose?
CIMA’s objective tests are designed to assess your knowledge of the syllabus and so have definitive right and wrong answers. Unlike the Case Study exam, there is no essay style answer for you to plan, structure and create, and no pre-seen to analyse, learn and apply. The pressure of knowing the syllabus can be overwhelming. So, what is the best way to approach them?
Manage
your expectations
Objective tests last 90 minutes and are composed of a range of questions including short multiple-choice, number-entry, dragand-drop, and other formats. They cover all the component learning outcomes across the entire subject, so you need to have a good grasp of as much of the syllabus as possible before sitting the exam. You will get a provisional result straight away, so there is no waiting to find out how you have done. It is key to familiarise yourself with the format of the software and the ways in which questions are presented to you, before the exam.
Nail
the material
The simple fact is you cannot apply knowledge that you do not yet know. Rather than rushing into question practice, focus on grasping and learning the syllabus. Make sure you have a decent understanding of the concepts behind the calculations. This will allow you to answer a range of questions in that topic. For example, in P1 it is easier to calculate overhead absorption rates if you understand the principles behind absorption costing.
Looking at the same topic from different angles is a good way to master it, so try to vary the sources you use for your learning. Textbooks are great, so are some YouTube videos. Tuition providers always have a variety of support to offer, some of which are free, so
check out whether they have what you need. This can help you learn some tricker concepts quicker and to be able to start applying them.
Remember, you do not need to know the entire syllabus; there are always going to be topics that will be challenging. A sound grasp of the majority of the syllabus is good gauge of whether you are exam ready.
Know what practice questions are worth Practice questions can help you is so many ways! They will identify areas where your knowledge and understanding is not quite there yet. Be honest with yourself about the parts of the syllabus where you don’t feel as confident as you would like, then plan to revisit the material and focus on those areas. That may seem disheartening, but it is an extremely useful part of the learning process.
Once you have then covered the entire subject to the best of your ability, you should start doing more practice questions. This will start to build confidence in applying technical
knowledge to questions – which is what the examiner expects from you in the exam.
Remember, just because you have not seen a practice question on a certain area of the syllabus, does not mean there won’t be one in the exam. Make sure you have worked through the whole subject, not just the parts you have come across in your bank of questions.
Practice more and more questions as the exam gets closer. The more different types of question you see before the exam, the less fazed you will be – there is enough pressure just being in the exam to face, so being familiar with the style of how questions are presented to you beforehand will buy you some time to deal with exam-hall nerves.
Be time savvy
CIMA’s objective test exams are strictly limited to 90 minutes, managing this time effectively to maximise your score is vital. We have already mentioned being confident with knowledge and practising questions to build familiarity – these are your first steps to managing your time in the exam.
Go through the questions in the exam and answer all the easy ones first. This makes sure you don’t miss out on the easier marks; it will also give you a confidence boost, allowing you to settle your nerves as you move onto the rest of the questions which may take a little longer to answer.
Here’s a great video resource, which can help get time savvy.
If at first you don’t succeed….
Not passing an exam can be very demoralising. There can be many reasons for this setback, and it’s important to know that you are certainly not the first person to fail an exam! Treat it as part of your learning journey and use it to figure out which areas you need to focus on to succeed in your next attempt. Start planning how you will move onwards and upwards. Try not to put off doing this, or it might become something you never get around to. Our resitters guide offers you some great guidance for getting back on track.
Preparing for your objective test exam doesn’t start a few weeks before the exam day, it starts even before you begin a new subject. Set your goal at the start, maintain a positive mindset throughout and know you can do it.
• Nasheen Wuisman, Senior Manager of Global Academic Progression at AICPA & CIMA, together as the Association of International Certified Professional Accountants
Taken to task
Karen Groves has some top tips on how to hone your skills for the Level 3 Financial Accounting: Preparing Financial Statements unit
This unit is the one our Level 3 students start with. It builds on from your Level 2 ITBK and POBC knowledge, which is assumed knowledge at this stage.
The assessment will test your ability to use advanced bookkeeping skills, carry out adjustments and draft final statements for sole traders and partnerships. You will also need to be able to interpret the financial statements using profitability ratios.
Important note!
If you are not certain that you have started at the correct level for AAT, please go to the link here, which includes questions to assess your knowledge at this stage: https://tinyurl.com/m5aakt64
Now for the assessment debrief and some feedback.
The assessment lasts for 2½ hours, and you will have six tasks to complete. I have broken the tasks down, and flagged the areas where students lose the most marks.
The below screenshot is taken from the AAT Examiner’s guide, which illustrates the tasks where most marks are typically lost:
Task 1 – Using day books and accounting for and monitoring noncurrent assets
For this task, you need to ensure that you are confident with accounting for disposals in the non-current asset register, recognise the difference
between revenue and capital expenditure and the effect on the financial statements of this being entered in the wrong account, and be able to calculate depreciation prior to the disposal of a non-current asset.
Marks are typically lost on accounting for disposals and calculating accumulated depreciation.
Student performance in this task is usually very good.
Task
2
– Recording period end adjustments
My advice here is read the question carefully. You may need to adjust closing inventory, or a re-valuation of closing inventory.
Marks are typically lost on valuing and posting closing inventory, the allowance for doubtful receivables and calculating the amount to be prepaid or accrued where invoices cover two accounting periods.
Accruals and prepayments for income and expenses are a very tricky concept to grasp at first, however you must be confident with this. Question practice here is crucial if you are to succeed with this topic.
You will find a good question in the AAT practice assessment 2, Task 2, on inventory valuation, so always worth running both practice assessments.
Task 3 – Producing, adjusting, checking and extending the trial balance
Again, read the task requirements carefully. You will need an understanding of the accounting equation and how it changes with each transaction and be able to prepare a bank reconciliation. Errors, the suspense account and journal entries are a tricky topic, so again lots of question practice is required on this topic.
Areas of weakness in this task include correcting errors, completing a trial balance and a lack of understanding of the accounting equation.
Task 4 – Producing financial statements for sole traders and partnerships
For this task you must be happy with how to prepare financial statements for a sole trader and a partnership.
Marks are lost by students who do not understand how the financial statements link together and the differences between the entries for a sole trader and partnership in the Extended Trial Balance.
Task 5 – Accounting principles, qualities of useful information and interpreting financial statements using profitability ratios
You will need a good understanding of the accounting principles and the application, including the fundamental and enhancing qualitative characteristics, and be able to calculate profitability ratios.
Marks are lost here by students not being able to identify the users of the financial statements and being unable to analyse factors that impact on the profitability ratios.
Task 6 – Preparing accounting records from incomplete records
One of my favourite topics in this unit; in the typical scenario the client brings in limited information, sometimes a shoe box of receipts. However, for AAT purposes the information provided is actually much better than I used to see in the workplace!
Anyway, back to the task. You will need to be able to calculate gross profit from mark-up and sales, purchases and inventory figures. You will need to be able to complete the RLCA and PLCA with confidence, identifying missing account balances, and identify factors that could cause discrepancies between accounting software figures and other balances.
Marks are typically lost on all of the above areas mentioned above, so make sure you are confident with these areas before the exam. Remember! Read the question carefully, and good luck with your exam!
• Karen Groves is an AAT tutor and AAT Faculty Director at
What jobseekers are looking for
Karen Young explains
what finance professionals really want when they are looking for a new role
In today’s competitive, skills-short market, amidst economic and political uncertainty, attracting and retaining the top talent is more important than ever for organisations. To secure the best applications it’s crucial for employers to understand and respond to what workers take into consideration when weighing up job opportunities.
Our latest research reveals what finance professionals look for when searching and applying for a new job and provides insights into the growing use of artificial intelligence (AI) during the application process. Here’s what jobseekers value most today:
An informative job search
Finding a job opportunity that ticks all the boxes can be a real challenge for a jobseeker and getting a good first impression of an organisation certainly impacts on whether they decide to apply for a particular role.
According to our survey, when researching a potential employer, the main thing finance professionals actively look for is information about an organisation’s working environment and culture (51%), demonstrating the importance of finding a suitable cultural fit when choosing a company to work for. Professionals also look at an organisation’s financial information (41%), product and service information (38%), employee reviews and testimonials (33%) and brand values (32%).
An absence of the most vital information could put jobseekers off from going for a particular role. Finance professionals will only consider applying to organisations that include the salary within the job description (83%), prove that they will invest in their personal development (79%), and have a clear description of the products and services offered by their organisation (77%).
A smooth job application
The application process is one of the first interactions a jobseeker has with an organisation, but our research shows that many employers are falling short in this area, as half (50%) of finance professionals have had a negative experience during an interview process. The main reasons for a poor experience are unprepared interviewers (42%), a negative impression about an organisation’s culture (39%), poor communication and a lack of clarity as to the steps involved (38%), not enough structure to the process (36%) and the process overall being too long and
cumbersome (31%).
As a result of a negative first impression during the application process, just under half (46%) of professionals working across the finance industry have been deterred from a prospective employer. When it comes to the length of an application process, most (73%) professionals believe two interview rounds is acceptable. After the final interview, whilst nearly a third (30%) of professionals would wait up to a week for an offer before considering or accepting another job opportunity, close to half (46%) of workers would only wait two to three days for an offer before turning their attention elsewhere. It is therefore important to have a clear and efficient process at this stage in the recruitment process.
Although it's difficult to get the full picture of what an organisation is like until you work there, the way an organisation treats jobseekers during the application process can be telling. Therefore, before making any decision on a job offer, it’s important to reflect on how you felt throughout the process and if the image of the organisation you’ve built in your mind mirrors your ideal place of work.
Transparency over AI use
The presence of AI is certainly growing across the finance profession, and that goes for both
professionals in their current role and those looking for a new job. Our research shows that 15% of finance professionals admit to using an AI tool, to help write their CV for example, when completing a job application. Looking ahead, two in 10 (19%) plan to use AI tools to help carry out job applications in the future.
When it comes to AI, transparency is key, as a big majority (80%) of finance professionals prefer to be informed if an organisation uses AI to assess their job application. Although over half (58%) of finance employers do inform candidates about their use of AI tools in evaluating job applications, there is clearly room for progress. As AI continues to develop, open communication during the recruitment process and beyond will be paramount to maintaining trust between employers and staff.
As our research demonstrates, finance professionals looking for a new job opportunity favour employers who make the most important information easily accessible to current and prospective staff, lay the groundwork for a positive application experience and are transparent about their AI use during the application process. Employers who neglect the importance of these factors risk missing out on top talent.
• Karen Young is a Director at Hays specialising in Accountancy and Finance
Focus on your end goal
On your study journey you are bound to have some setbacks. Rachael Spence has some advice on how you can overcome the obstacles
Life can be characterised by unpredictability. We often achieve our goals but face challenges, including in education. Setbacks, when managed with motivation, define our outcomes.
On any journey, including your AAT pathway, you will encounter your fair share of setbacks. Acknowledge their existence without succumbing to panic if you want to overcome them. Instead, view them as minor detours on your broader learning journey.
For example, you may not always achieve a first-time pass on all your AAT assessments, but it is crucial that you recognise this as just being a small part of your overall journey. Although you may be feeling deflated it is important to persevere and to focus on the end goal. Rather than becoming anxious, approach it as a valuable learning opportunity. Embrace a
positive mindset and retake the assessment; you’ll likely attain the desired outcome with determination and persistence.
Be adaptable
Adaptability plays a pivotal role. When faced with challenges, it becomes crucial to be flexible in your approach. It’s possible that the study methods you’ve been using need adjustment. Perhaps insufficient time has been dedicated to your revision or simply an ineffective revision style. Many students mistakenly believe that merely reading the prescribed textbooks is sufficient, but in the case of AAT this falls short. AAT demands a practical approach to revision, particularly at the higher levels. To secure higher grades, consistent and ongoing practise of exam-style questions becomes essential.
Finding motivation can be greatly enhanced by engaging with others. Stay in touch with fellow AAT students who share your common goal, whether it’s through online forums, in-person or through social media. You’ll quickly discover that you’re not alone. In fact, you can collaborate and support one another when faced with challenges. Even simply sharing your experiences with one another can provide a much-needed motivational boost.
Setbacks in your academic journey may not always be linked to your assessment results; they could come from your personal life, such as health issues or grief. Drawing from my own experience during my own AAT studies, I’ve learned that taking a short break can help to regain focus and get back on track; however, it is vital to not let studying linger for too long. In such circumstances, my most valuable advice is to reach out to someone for support. Don’t hesitate to seek guidance and assistance from your tutors. They are dedicated to helping you and are genuinely invested in your success; they want to see you reach your full potential.
Ultimately, it is important that you remember that setbacks are a part of any journey, and it’s how you respond to them that ultimately determines your success. By implementing these strategies and maintaining a resilient attitude, you can stay focused on your AAT studies even when faced with obstacles.
• Rachael Spence MAAT is accounts assistant manager at Sweeney Miller Law. She is currently studying for the CIMA qualification
How much?
Teresa Clarke explains all you need to know about labour costs
Salary
An employee who is paid a salary is paid a set amount of money for 12 months, split into monthly payments.
For example, you might be paid £24,000 a year in salary, which will mean that you get paid £2,000 per month (before deductions).
A salary is paid at the set amount and is not affected by the number of hours actually worked.
Hourly pay
An employee who is paid hourly is paid for every hour they work.
For example, a waiter might be paid £12 per hour for every hour they work. If they work 10 hours, they will be paid £120 (10 hours x £12).
Overtime
If an employee works more than their set hours they may be offered overtime, and this is often paid at a higher rate.
For example, the waiter might be paid £12 per hour for up to 30 hours per week, but if they work on a Sunday then might be offered ‘time and a half’ to work on that day. This means their
pay will be 1½ times the usual rate.
£12 x 1½ = £18 per hour.
Overtime payment
Overtime payment is the total amount the employee is paid for that Sunday work.
The agreed overtime rate of £18 (time and a half) is paid for the three hours they work.
£18 x three hours = £54 overtime payment.
Overtime premium
Overtime premium is the ‘extra’ cost to the business because they paid the higher rate.
The normal rate of pay is £12. The extra £6 is the overtime premium.
If that employee worked three hours on Sunday, the overtime premium is £18.
£6 x three hours = £18.
Just remember that premium means ‘extra’, as questions may ask for overtime pay or overtime premium.
Piecework
An employee who is paid by piecework is paid for every piece, or unit, they make or pick or finish.
For example, an agricultural worker may get paid £10 for every box of cabbage plants they pick.
Guaranteed wage
If an employee is paid by piecework, they may also have a guaranteed wage.
For example, I am paid £10 for every box of cabbages I pick in a day. I also have a guaranteed wage of £90. If I pick 12 boxes of cabbages I will earn £120 (12 x £10). However, if I pick six boxes I would earn only £60 (six x £10), so I will get the guaranteed wage instead. Think of it as a minimum wage.
Bonus
A bonus is an extra payment given to employees or teams of employees to encourage them to be productive and manufacture more goods.
For example, I might be offered £10 per box of cabbages I pick, but if I pick more than 12 boxes I will get an extra £2 per box.
If I pick 15 boxes of cabbages I will earn £150 (15 boxes x £10). I will also earn a bonus for the three boxes above the bonus target of 12 boxes, so an extra £6 (three extra boxes x £2).
If you like my way of explaining things you might like my workbooks, which are all available from Amazon in both paperback and as eBooks. The links to all my workbooks can be found at https://www.teresaclarke.co.uk/
• Teresa Clarke FMAAT is a freelance accounting tutor
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BACK TO BASICS
Accountancy can be simple if you know the basics! PQ magazine has gathered together some top tutors to help us help you. Our Back to Basics videos will guide you through some of the fundamental topics of accountancy. The series includes:
Will Boardman – Tax points
Part of the AAT Tax Processes for Business assessment at Level 3, this video by awardwinning Training Link tutor Will Boardman explains tax points. In four short minutes Boardman explains the difference between a basic and an actual tax point.
Check out his video at:
https://www.youtube.com/watch?v=7NTft0Td7oQ
Jo Tuffill – Cost behaviours
Understanding a business’s cost structure is vital for its success. It is why cost behaviour is the first concept taught in management accounting. Her video runs for just seven-and-a-half minutes and explains exactly what a cost is, looking at both variable and fixed costs.
You can check out her video at:
https://www.youtube.com/watch?v=mkx8HT_uc7M
Tom Clendon – Double entry bookkeeping
You should be able to master the rules of double entry bookkeeping in just eightand-a half minutes. So do you know your credits and debits? Clendon has also produced a video on assets. Check out the double entry video (3,000 people have already) at:
https://www.youtube.com/watch?v=-nYep6Il6-c
Michele Baker – Trial balance
Michele Baker will explain in six minutes how to create the trial balance and why you are doing it. Baker will let you know whether a balance is a credit or debit, and help you get to grips with ‘DEAD CLIC’. Check out the video at:
https://www.youtube.com/watch?v=TxHLSJRMaZc
Check out more great Back to Basic videos at www.pqmagazine.com. Click on the video bar at the top of the page or go direct to our YouTube channel
Dear Karen
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
THE DILEMMA
At interview I was asked about my strengths and weaknesses, but I struggled to answer. What’s your advice for responding to this question?
KAREN’S RESPONSE
You’re not alone in finding this typical interview question a difficult one. It’s important to be self-aware when it comes to your talents as well as your areas for improvement so you can utilise your strong points and develop your skills where necessary, but getting into this analytical mindset about yourself can be tough. Here’s how to come up with an ideal answer.
Starting with strengths, take this time to prove to the interviewer why you’re a great fit. Ensure the strengths you mention are relevant to the job; reference the job description and address the responsibilities you’re confident you’ll succeed in. Give examples of your strong technical skills and competencies or behaviours in practice to demonstrate that your skillset is wide and transferable.
Moving on to weaknesses, rather than feeling like you need to selfsabotage to answer the question well, think of this as a chance to demonstrate your self-awareness and willingness to progress. Be clear about the responsibilities that are core to the role and steer clear of these when putting forward your weaknesses, as bringing up any of the key responsibilities could cause the interviewer to doubt whether you’re a suitable match. Have examples to hand where you previously faced challenges, why you struggled and how you overcame these hurdles to show that you’re eager to learn from the past.
• Karen Young is a director at Hays. She is passionate about helping people to find the right job and companies the right person
Magners CEO steps down
Accounting errors lead to resignation of C&C’s Patrick McMahon
The owners of Magners and Bulmers cider have parted ways with their CEO, Patrick McMahon, after accounting errors led to C&C Group plc taking a €17m charge to their accounts.
The prior year accounting adjustments for the period 2021 to 2023 have been made following a detailed internal and external review of inventory and balance sheet reconciliations. The adjustments relate to inventory matters at Clonmel, goods received and not invoiced, the timings of customer discount liabilities, and change in the accounting treatment of glassware. There
Forvis Mazars appoints new director
Forvis Mazars has appointed Tatham Crawford-Lennox (pictured) as its new Director of People & Culture in the UK. She has been tasked with “building upon the firm’s progress in creating a diverse, inclusive, and engaged team, that priorities quality”.
The firm said its latest mean gender pay gap continues a downwards trend to 5.2%, with a mean ethnicity pay gap of just 0.8%. And, following consistent promotion of its 11 employee diversity and faith networks, membership has grown by 53% in the past year.
are also onerous apple contracts of €12m. All these problems occurred while McMahon was chief financial officer.
The board, with regret, agreed it would be in the best interest of the group that McMahon went with immediate effect. It was agreed, however, he would remain until September to help with a smooth transition.
Current chair Ralph Findlay has been appointed group CEO, and is expected he will remain in post for between 12 to 18 months while a successor is found.
As CEO Findlay will receive an annual base salary of €702k, a pension allowance of 5% of salary in line with the contribution available for the group’s employees, a benefit allowance of 7.5% of salary, and maximum annual bonus opportunity of 125% of salary.
We were not told what McMahon’s remuneration and severance payments will be.
Capital WHF woe
The Post Office group’s chief finance chief, Alisdair Cameron, has stepped down from his role at the scandal-hit company. This follows more than a year’s absence due to sick leave.
Cameron spent nearly a decade at the Post Office, where he took over as finance chief in 2015 and worked with former boss Paula Vennells.
Cameron admitted that he accepted that Horizon was working effectively too easily at the time, and said the culture at the Post Office was both self-absorbed and defensive.
Preetha McCann takes over as interim chief finance officer.
It would appear the capital is dragging down the UK’s productivity growth because office staff continue to work from home (WFH).
Productivity in London fell in 2022, says the Office of National Statistics, taking output per hour worked to its lowest level since 2009. Between 2019 and 2022 London’s productivity dropped by nearly 3%. Wales was the only other place to see a fall. In stark contrast, productivity jumped by almost 8% in the North West of England in the same period.
Experts said the dip in productivity in London was a hangover from the pandemic, but it seems what is really being said is WFH harms growth!
The PQ Book Club: books you should read
Writing AI Prompts for Dummies, by Stephanie Diamond and Jeffrey Allan, Wiley (£18.99)
As the authors tell us in their introduction, AI is revolutionising the way we live and work at an astonishing rate. Your next decision is about when you’re going to jump on the AI roller coaster, not if! And when you do you need to learn how to develop effective AI prompts. It will be the quality of your questions that will determine the outcomes, which in turn help you make better decisions and unlock the true potential of AI.
There is definitely an art in ‘speaking AI’, and this book starts from the basics of generative AI, looks at AI outputs, helps you navigate leading platforms and explains how to create and write successful AI prompts.
The authors place a lot of emphasis on ethics and the need to deploy AI responsibly.
We particularly liked ‘the part of tens’ section. This is where we are told the 10 mistakes to avoid when writing prompts and the 10 strategies to promoting business success. But you can’t assume AI understands context or subtext, and a big
no-no is asking broad or vague questions. Also, don’t expect much originality or creativity from AI!
We loved the use of the four icons – tips, technical stuff, remember, and warning. They worked really well to keep us tuned in to what it all meant back in reality.
PQ rating: 5/5 A perfectly pitched tome. I think it helped that the authors are a marketing professional and a university director of AI.
Finance boss quits Post Office
In brief
Your social life
PQ magazine is always looking out for fun accountancy books to review for our PQ magazine Book Club feature. So, our eyes lit up when we came across a book called ‘Social Life of an Accountant: BUSY SEASON’. The Amazon blurb told us: “This novel tells the thrilling story of the average social life of an average accountant.”
We saw it was 120 pages long… but what we didn’t see was the note that explained this is a gag gift and the book is actually blank! Well, it isn’t totally blank, there are page numbers on every page. And, after we stopped laughing at least we now have a nice 120page notebook.
ChatGPT direct to your iPhone
Apple shocked the market recently when it announced it was adding OpenAI’s ChatGPT to its offering. The iPhone maker said the move is all part of a new personalised AI system it is calling ‘Apple Intelligence’, which it hopes will allow users to navigate its devices more easily.
Apple is now updating the operating systems of its iPhone and Macs to allow access to ChatGPT.
Apple CEO Tim Cook said: “Our unique approach combines generative AI with a user’s personal context to deliver truly helpful intelligence. This is AI as only Apple can deliver it, and we can’t wait for users to experience what it can do.”
One person who did not like the announcement is Elon Musk. He has threatened to ban iPhones from his companies as he said they will become data security risks.
Not a lot of people know this, but Victoria Beckham once studied to be an accountant. She had the same struggles of all PQs, as the picture shows. It all came out in their recent Netflix’s documentary, where David also questioned her about her working class roots… her father dropped her off at school in a Rolls-Royce!
Overtime pushing up HMRC wage bill
HMRC has reduced its workforce by 3.8% in the past year, but these cuts have led to such a reliance on overtime that the wage bill has actually increased by £5.5m, according to research by the Global Payroll Association (GPA).
The researchers looked at HMRC between March 2023 and March 2024. They discovered full-time equivalent positions dropped from 67,469 to 64,875. The most drastic job cuts were made in the administrative department, with the number of admin assistants and admin officers falling by 9.3%.
Despite staff numbers dropping by 2,594 the wage bill increased to £285m. Overtime costs increased by 45.2%.
It all means that, as ridiculous as it seems, HMRC’s sweeping jobs cuts, intended surely to reduce running costs, have actually resulted in even more taxpayer money being spent, GPA said.
Dropdown confusion
Dropdowns make life so easy, but one eagle-eyed reader recently pointed out that it seems people in the United States are more confused than many about what to call themselves. PwC, for example, has five ways you can get on its United States site – you can use America, U.S., US, USA, or United States. In fairness there are two ways to get the UK site – UK and United Kingdom. There is also Turkey and Turkiye. Interestingly, PwC doesn’t include Wales or Scotland on the list.
W E V E G O T T H E L O T
’ Minimalism
We have three copies of Minimalist Modern Art, the adult colouring-in book to give away this month. This is one for those who love to create. Dive into geometric shapes and open spaces – it really is your chance for unlimited creativity and freedom in colouring. Well, that’s what the book says, anyway.
To win one of these books just send an email headed ‘Modern Art’ to giveaways@ pqmagazine.com along with your name and address.
Codewords
We are giving away The Big Book of Codewords this month, and have three copies up for grabs. There are 300 puzzles for you to finish, one puzzle per page. In all there are 100 easy, 100 medium and 100 hard ones to complete.
All the solutions are in the back of the book. To be in with a chance to win one of these fab books simply email us at giveaways@ pqmagazine.com with your name and address and we will put you in the hat to win this prize. Head up your email ‘Codewords’.
Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 16 August 2024. The main draw will take place on Monday 19 August 2024.
