PQ magazine, December 2018 by PQ magazine

PQ magazine December 2018

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

All the top tips you need for the ACCA upcoming exams as our experts tell it as it is

ALL ‘GENERATION Z’ WANTS IS STABILITY

Accountancy recruiters everywhere can breathe a huge sigh of relief – Generation Z love the idea of becoming a professional accountant! ‘Make Way for GEN Z: Identifiying what matter most to the next generation’, a report from the International Federation of Accountants, found over a fifth (21%) of all respondents have already decided to pursue a career in the profession. You can add to this a further 73% who said they are open to the idea of a job in accountancy. Accountancy is winning out as the career of choice for many 18-23 year olds because it aligns with their top priorities – a stable career path and good salary. A stable career path was important/very important to 89% of respondents to the survey. A competitive salary and benefits came next at 87%, followed by a work-life balance at 84%. The least important factors are the opportunity to work abroad, to be a business leader and to drive business strategy. The report claims that Gen Z’s preferences are a notable departure from the traits that have come to define their predecessors, the Millennials, including the desire to ‘live the dream at any cost’ and pursue career independence. Gen Z’s desire for stability could also be seen when it comes to their politics and the economy.

The study, for example, found that 51% of Gen Z feel it is important for their government to prioritise a national approach to policy, while 32% prefer a

globalist approach. However, there are stark divisions between countries. Gen Z’ers in France and Germany most strongly support international policy collaboration, while national sentiment is strongest in China, India,

The Dark Side of Accountancy: Ethical Dilemmas and Sustainability Challenges Wednesday 28 November 2018, London

South Africa and Russia. Gen Z also anticipate digitalisation and emerging technology will be a double-edged sword, both bringing new ways of doing things, meaning new and more interesting jobs, but also seeing traditional jobs declining as a result. They see the greatest potential for technology to drive job growth in accountancy, engineering and health care. The study also asked where Gen Z picked up their career information, and professional bodies should take note that magazines beat them as a reliable source. Top of the list is the internet and social media. IFAC CEO Fayezul Choudhury said: “Generation Z brings a great wealth of new and unique talent to the global workforce. This survey identifies why the global accounting profession is well positioned to attract and retain next-generation talent, particularly as the role of the accountant becomes ever more strategic.” Generation Z, for the purposes of this study, includes individuals born between the mid-1990s and mid-2000. Variously described as the ‘post-Millennial generation’ or ‘iGeneration’, Gen Z are distinguished as the first true digital natives, having been exposed to the internet and a prevalence of digitalisation and social media from birth or a very young age. • You can download the report by going to https://tinyurl.com/ydg36jnb

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CONTENTS

News 06EY diversity move Big 4 firm

scraps the conventional oneto-one final interview 08CIMA exam results Strategic case study a struggle for many 10ACCA exam results Pass rates hold steady Features, etc 04Mind your Ps&Qs Why you must try and try again; when is a pass not a pass?; and the best of social media 12One-day conference Sign up today for our free London event 13ACCA exams Top advice on how to pass SBL and SBR 15PQ Awards Time is running out, so get your entry in now 16ACCA exam tips Top tutors at BPP gives us their thoughts on what will be tested this time 20AAT results All the latest assessment pass rates 22Exam technique Tricks of the trade to help you learn 22CIPFA focus How currency hedging and forward contracts work; and why it’s vital the government does end austerity 24ACCA APM paper How to get a pass in this tricky subject 26ICAEW spotlight The syllabus shake-up in 2019 will bring changes to the Accounting exam

December 2018 27Profile One successful young

accountant explains how the ICB qualification has opened doors for him 28Your career The importance of coaching cannot be understated 29Careers Life working in an accountancy practice; how to nail that Skype interview; and our Book Club review 30Fun stuff – and our giveaways The columnists Robert Bruce Why do we keep trying to turn back the clock? 6 Prem Sikka Ineffective audit policies are emblematic 8 Zoe Robinson If you want to progress, then challenge yourself 10 Subscribe to PQ magazine It’s FREE – see page 23 or go to www.pqmagazine.com ABC July 2017 – June 2018

31,954

Publisher’s statement: We send a digital issue of the magazine to an additional 6,628 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)

Come to the dark side… Our ‘Dark Side of Accountancy’ conference, in conjunction with LSBU, is filling up nicely – but it won’t be the same if you aren’t there. You can book your free place by visiting lsbu.ac.uk/whats-on and drilling down to 28 November. We have a great line-up of speakers, with Professors Paul Moxey, Prem Sikka and Ken D’Silva adding their voices to the debate. It’s a real mix of academia and the ‘real world’, with Xero’s Mike Day and Interworks’ Sam Ellis talking about where AI and big data might take us. Surely that’s worth a day out in London town? It’s all free, and we throw in lunch and a great chance of networking (see page 12 for more). During my travels this month I popped into the ACCA and had a chat with the director of skills and assessment, Catherine Edwards. She had just flown in from New York and was about to jet off to the World Accounting Conference in Australia. She still had time to talk about the first-ever sitting of SBR and SBL (we have that interview in full next month). She reiterated what Judith Bennett says on page 13 of this issue – SBL sitters who have completed the ethics and professional skills had a 73% pass rate in September. I have gone through the EPSM module myself and it is a fantastic resource – so good, in fact, it won a PQ magazine award for innovation in 2018! On that note, take a look at the new SBR and SBL tutor offering from London South Bank University (on page 12). Talking of our awards, there is still lots of time to get your entry to us. So don’t miss out on the best accountancy awards around by not giving it a go (see page 15 for how to enter). And remember, fear eats the soul! Graham Hambly, PQ magazine editor (graham@pqaccountant.com)

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HAVE YOUR SAY Try, try and try again As ACCA exam results day approaches, I am trying to avoid the usual feeling of impending doom and the dread of opening the exam results email. Instead, I am trying to focus on the fact that I actually sat the exam. As a student it is hard to stay focused and motivated. In an ideal world, we would take time out of work and plough through as many exams as possible. In reality, as it is in my case, many of us are working parents with lots of demands on our time. Being able to put an hour here or there aside to study can be very difficult.

I keep going because I don't want to give up on all of the hard work I have put in. I still want the end goal. I still want to qualify at a

high level. It is so disheartening to throw all of your spare resources at studying for an exam only to be told that you have ‘failed’. In truth, you have only really failed when you have stopped trying. The last time that I received the dreaded ‘fail mail’ I took comfort in the fact I had got so close to passing. I hadn't been able to put as much time in to studying in the final weeks before the exam as I had hoped but clearly, all was not lost. So, on exam results day, I want to celebrate. No matter what the outcome is. Nothing worth having comes easy. As Nelson Mandela said: “It always seems impossible until it’s done.” Mandy Girling, by email

Our star letter writer wins a fantastic PQ mug! That’s all clear then.. Question: When is a pass not a pass? Answer: When you pass all the competencies in your CIMA Strategic Case Study Examination with no ‘Weak’ areas, but ‘Moderate’, which among other things means the candidate “demonstrates adequate understanding of the techniques and technical knowledge required across all three pillars”, and ‘Strong’, which also includes “indepth knowledge and critical understanding across all four competencies drawing on the connections and interactions within and across pillars”. And “in-depth analysis and evaluation of a range of related concepts and ideas across pillars”. But you somehow just manage to not quite get 80, so you fail. Ta-dah! If that’s not straightforward folks, then I don’t know what is. Name and address supplied

Are we too many? I’d like to respond to your letter ‘Sign of the times’ (PQ October ‘18). The writer seems to be saying we are training too many accountants in the UK. But many students train as accountants, not

I need pqjobs.co.uk

for a career in accountancy but as the best route of experience for a business career. On the other hand, it is true that many firms train more students than they will need at the qualified level. Another of the issues is that student applicants are

understandably cautious about their career objectives when being interviewed because they want the qualification and work experience. They are concerned that they will not get the job if they say that they will be leaving as soon as they pass. Name and address supplied

social media ROUND-UP So what was the tweet that got most of you going this month? Well, it was the one about open plan offices! We said: “Guess what, open plan offices don’t work for people who need to concentrate! That would be accountants then… Noise is cited as one of the top two causes of inefficiency. Headphones have become a must-have for many at work, say Unispace.” Raj Popat said: “Whilst I’m at my desk my headphones are on 80% of the time.” ‘Average student’ agreed: “Headphones allow you to concentrate at critical times such as month end, and I find they make me more productive.” Eye Jay just said: “Whoever would have thought it?” Meanwhile, Josh explained: “This is one of the main reasons I didn’t like my last job at TUI. Huge open plan office I could not concentrate in the slightest. I got distracted so easily and that was too much for me.” Ryan Franklin stressed: “Headphones in the workplace… a pet hate of mine (as an accountant). I am a firm believer that they cut an individual out of the opportunity of conversation, impromptu learning and contribution to a shared/open plan office space.” There was also a big surge in comments when we published the ICAEW professional exam results (which you can see on page 6). On seeing the high pass rates Atiqah Fadzwin said: “That’s it I’m gonna do ICAEW.” Another PQ just said: “WOW”. Meanwhile, Hussain Zainal wondered: “I never ever understand the reasons behind the gap between ACCA and ICAEW results.” Bob Holness jr tried to explain: “I imagine it’s because the students have strong academics and have been snapped up by the traditional audit firms who force them down the ICAEW route rather than CIMA/ACCA.”

PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: graham@pqaccountant.com Website: www.pqmagazine.com | Editor/publisher: Graham Hambly graham@pqaccountant.com | Associate editor: Adam Riches | Art editor: Tim Parker | | Subscriptions: dom@pqaccountant.com | Contributors: Robert Bruce, Prem Sikka, Zoe Robinson, Tony Kelly, Phil Gammon | Origination and print services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email dom@pqaccountant.com

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PQ news

ROBERT BRUCE Do we really have to keep trying to turn the clock back? It’s a bit like Brexit. A bunch of old men don’t see why they should accept any changes to their way of life. And they force those advocating a more open way of working to stand down. That appears to be what has happened at Grant Thornton, where its bright chief executive has resigned. And that chief executive was female. We are, as the furious Brexit arguments show, living in febrile times. We see among politicians, many of them of pensionable age or close, obdurate insistence that we return to what they fondly see as the certainties of their youth. Women are not part of the plan. This appears to be what has happened at Grant Thornton, and it is profoundly odd. Years ago I remember asking a senior partner in one of the largest accounting firms what the biggest change over the past decades of his working life had been. His answer came in a flash: “Women”, he said. This was a long time ago. But he saw how women had transformed the accounting profession, by their number, their skills and their intellect. It has been a continuing story. More women than men come into the profession. They regularly outperform men in exam results. They have transformed the collaborative way in which business teams work. All this was happening at Grant Thornton. And all the bright and sparky policies that attract young graduates into the profession were in place. Yet, as with Brexit, a bunch of old farts have managed to make their last feeble stand. Robert Bruce is an award-winning writer on accountancy for The Times

No more final interview EY is removing the conventional ‘one-to-one’ final interview and will instead conclude its recruitment process with an ‘assessment event’. The Big 4 firm said that the change will help to provide a more rounded view of each candidate and boost diversity among its new recruits. EY also stressed the process from application to job offer will be much quicker – falling from

nine to typically five weeks. Students first need to complete an online assessment, which focuses on identifying their strengths and future potential. This is followed by a job simulation that gives applicants a feel of what the job would be like. The final stage is an assessment day, where candidates take part in around eight activities, learn more about life at EY and meet existing employees.

The input of five appraisers at the assessment day will be used to make the final decision on whether to make a job offer. EY’s Justine Campbell said: “To keep pace with the changing world of work and also the demands of the next generation of employees, we have further enhanced our student recruitment process.” She continued: “We know that students want a speedy, interactive process that helps them to get a sense of what life is like at EY, while we understand more about them.”

Three wins out of three The latest ICAEW Professional level exam results show just under 80% of ACA PQs sitting three papers (79.2%) passed all the exams they sat. While most sitters left the exam with something, some 40 students (3.5%) failed all three papers. More students sat just one paper, but only 73.6% (1,407) passed the

September test. This meant 504 (26.4%) students received a fail in their results message. The ICAEW called the September results ‘fantastic’. It said that trainees scored high in all ACA exams, with Business Strategy and Technology seeing the highest pass rate (90.9%), closely followed by Audit and Assurance ICAEW PROFESSIONAL RESULTS SEPT 2018 (87.2%). All First Attempt ICAEW education Audit & Assurance 87.2% 88.4% boss Mark Protherough Business Strategy 90.9% 93.1% picked out Natalie Business Planning: Tax 82.1% 86.4% Bowmaker (EY), who Business Planning: Insurance 78.6% 71.4% achieved 100% in her Business Planning: Banking 74.8% 78.0% Audit and Assurance Financial Management 77.7% 81.1% exam, and Thomas FA & Reporting – UK GAPP 75.0% 77.1% Thoma (PwC), who FA & Reporting – IFRS 82.6% 84.6% gained 100% in Tax Compliance 79.8% 82.7% Financial Management.

CIPFA networking The CIPFA Student Network has a number of Strategic Case Study preparation events coming up. Catch them at: • Tuesday 13 November: Newcastle Civic Centre. Students can arrive from 5.30pm and the session runs

from 6pm to 8pm • Wednesday 14 November: After college at the college, Edinburgh. • Monday 19 November: London, at CETC after college. London is also running a postexams celebration on 7 December from 5.30pm at the Goodman’s Field pub (near to CETC).

Tune into LSBF TV A free-to-view television network airing every Friday afternoon has been launched for AAT PQs. Top tutors from LSBF will be presenting their take on the assessment tasks of every AAT paper in 30-minute slots until Friday 14 December. LSBF tv is an opportunity for all AAT PQs to study their paper live, asking questions of the tutor, and learning how to address the assessment tasks they may face in the real exam. The programmes cover an AAT sample assessment, and over the course will address all the tasks within that assessment. You can either access the sessions live with the opportunity to participate, or watch it again for three weeks post-session. Sign up at ulp.lsbf.org.uk/aat-tv

In brief CMA launches review of audit The UK’s Competition and Markets Authority (CMA) has launched a review of the audit market, amid growing criticism following the collapse of construction firm Carillion and recent poor results from the FRC’s review of audit quality. CMA chairman Andrew Tyrie said: “If the many critics of the audit process are right, it is not just companies which buy audits that lose out; it is the millions of people dependent on savings, pension funds and 6

other investments in those companies whose audits may be defective. • Read the full story in the new issue of NQ magazine, a PQ magazine sister publication Your time to shine The countdown clock is ticking for the 16th PQ magazine awards night. London’s Café de Paris will again be the venue for the best accountancy awards around. But you won’t be there if you don’t enter! We need your

nominations by Friday 7 December – so come on, get nominating. And remember, you can nominate yourself! Check out page 11 for all the details. Welcome to the dark side… There is still time to sign up to our fabulous joint one-day conference with London South Bank University. ‘The Dark Side of Accounting: Ethical dilemma and sustainability challenges’ takes place on Wednesday 28 November at the wonderful Keyworth Centre.

Secure your free place at http://www.lsbu.ac.uk/whatson/dark-side-accountancy-ethicscorporate-social-responsibility Turn off social media Should you deactivate your social media accounts if your AAT assessments are approaching? This is one of the bold suggestions made in the AAT’s new distance learning e-book, full of helpful advice for long distance learners. It describes Facebook and Twitter as “a procrastinator’s best friend”! PQ Magazine December 2018

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PQ news

PREM SIKKA Ineffective audit policies are hallmark of profession Compulsory change of audit firms can curb ‘chumocracy’ between auditors and directors. It can also stimulate choice, especially in the FTSE350 that is dominated by the Big 4 firms. The ICAEW and the FRC sided with the big firms and opposed compulsory change of auditors. Meanwhile, scandals continued to highlight the consequences of chumocracy. Eventually, listed companies, banks and insurance companies were required to put audit to tender every 10 years and change audit firms after 20 years. This short-sighted policy does not promote competition or choice but suits the Big 4. Twenty year audit tenure does not improve auditor independence. Each audit tender costs £250–£300k, a large sum for mid-tier firms but small for big firms. The unsuccessful firm has to wait 20 years before squeezing anything from the experience, hardly an incentive to invest. The winner is not required to publish the audit tender, so unsuccessful firms can’t learn from others or check that competition was fair. In 2011, BDO and Grant Thornton, the fifth and sixth largest firms, audited 16 FTSE350 companies. Seven years after the introduction of compulsory audit tendering their share declined to nine. Grant Thornton has now pulled out of the FTSE350 audit market. The policies appeased big firms, but have failed to enhance auditor independence, choice or competition. Little will change until the regulatory powers of the FRC and the ICAEW are removed. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

Fall in strategic case pass rates CIMA PQs may have to read up a bit more on the newspaper industry if the latest strategic case study results are anything to go by. More strategic students than usual struggled with the Finch News Group case in August, and the pass rate dipped below 60% for the first time in quite a few sittings

(it was 59%). By contrast, the management case study pass rates this summer zoomed ahead to 75%. Meanwhile, the operational case study is still a little on the low side at 49%, but that said, it was a much better pass rate than was achieved by May sitters (43%). When it comes to the OTs CIMA CASE STUDY – AUGUST 2018 PASS RATES the first-time pass rates Aug 18 May 18 Feb 18 Nov 17 continue on their upward Operational 49% 43% 51% 49% trajectory. Management 75% 72% 74% 56% The E2 and E1 papers Strategic 59% 67% 63% 66% shine here, with 89% and

CIMA OT pass rates: 1/11/17–30/9/18 Overall First time Total E1 88% 80% 76% P1 70% 52% 48% F1 84% 74% 70% E2 95% 89% 86% P2 79% 60% 53% F2 79% 58% 53% E3 86% 74% 69% P3 79% 61% 55% F3 81% 61% 56% 80% pass rates respectively. P1 and F2 seem to be the ‘harder’ papers, with pass rates for those sitting first-time moving up slightly to 52% and 58%. There may be one area PQs also need to keep an eye on. The total exams passed all dipped for the operational OTs. It was only by 1% each, but they all dropped this time around.

It takes two, says Paul How many calculators do you take to the exam hall? Avado’s Paul Kirkwood told PQ that you need two. He explained: “You need a big one for fast adding up and a scientific one for the more complicated stuff.” And he said you should hold them up as you enter the exam centre, as someone is bound to have forgotten theirs and it’s a great chance to gloat! On a serious note, Kirkwood (pictured) said that if you do take two

3aaa goes to the wall The sudden collapse of 3aaa, one of the UK’s largest apprenticeship providers, has sent shock waves across the industry. Many AAT’s were signed up through 3aaa, which has gone into administration after the government pulled its funding. It has also been reported to the police over fraud concerns.

Derby-based 3aaa folded after the Education and Skills Funding Agency cancelled its contract. The AAT said: “Those affected by the collapse of 3aaa need to speak to their employers, and then the Education and Skills Funding Agency for assistance. They can contact the ESFA at 3.AAA@education.gov.uk”

CEO pay falling Pressure from shareholders over pay and reward packages has meant the average pay of FTSE 250 CEOs in 2017 fell by 4%, from £1.75m to £1.68m. Of the FTSE 250 firms to have held their AGMs so far in 2018, 10% have received ‘low votes’ of less than 80% shareholders in favour of the annual remuneration report. The drop in CEO pay this year is in stark contrast with their peers in the FTSE 100, whose total pay grew 12% in 2017.

from EY and the charity Made by Dyslexia. It says the unique way dyslexic people view and interact with the world could help companies meet the challenges of business in the 21st century. Cognitive flexibility, creativity, visualisation and complex problem solving – all recognised as key strengths of dyslexic individuals – will become increasingly valuable as all sectors of industry embrace new technology in what is often called the ‘Fourth Industrial Revolution’. Some 6.6m people in the UK (just over one in 10) are thought to have dyslexia, and EY says the potential is huge.

Dyslexic staff the answer Dyslexic employees could help to solve the skills shortages of the future, claims a report

Deloitte joins Mumsnet Deloitte has joined the Mumsnet Family Friendly programme. As the UK’s largest

calculators with you into the exam hall you must make sure they are the same make. A Sharp and a Casio are as different as a Mac and PC. And if you are planning to buy a new one, do it at the beginning of your course so you are used to it come exam day. You don’t have to spend a lot to get a good one, either – about £10. And make sure it is not programmable. For the record, Kirkwood is a Casio man.

Auditors attacked Auditors in South Africa have become the victims of a wave of violent attacks, according to the Daily Trust. It says the concern is that government experts sent to check the books of the country’s increasingly corrupt municipalities are being intimidated or worse on a daily basis on the orders of local officials.

network for parents, Mumsnet’s programme celebrates businesses who go the extra mile to support employees who are parents, and works to promote diversity in talent. Current initiatives offered by Deloitte as part of its commitment to being a family-friendly employer include: • A working parents’ transition programme delivered by external coaches. • Option to buy an additional 10 days annual leave each year and the ability to take a fourweek block of unpaid leave through the Time Out scheme. Some 700 members of staff have used this. • Access to emergency childcare or elderly care with two hours’ notice. • The Return to Work programme, a 25-week internship. PQ Magazine December 2018

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PQ news

ZOE ROBINSON Dear Mr President – now I understand

Throughout Barack Obama’s eight years in office, at around 5pm each evening 10 ‘representative’ letters and emails selected from the 10,000 he received every day would be sent to the Oval Office. Obama answered some, wrote notes on others for his team to answer, and even scribbled ‘save’ where he thought it a matter of importance. It was his way of listening to people, and questioning his understanding of the issues as seen through the eyes of others. Challenging what you think you know is an important part of the process towards forming an opinion; however, it’s an essential step in developing a deeper understanding. Bloom’s taxonomy, the framework on which most professional exams are based, places ‘understanding’ two from the bottom of a six-word pyramid, just above ‘remember’. As such it is considered a relatively low cognitive skill. In fairness, Bloom is referring to ‘understanding’ what the facts mean, not the more synoptic, and much harder ‘understanding’ what we are talking about. You would expect a qualified accountant to understand the subjects they have studied, yet the truth is they probably only have a rudimentary grasp of some areas. The good news is this will come as each individual attempts to put into practice what they know, only to find there are complications, alternative views and different approaches. But that’s okay. It’s the reason we never stop learning; that is as long as we continue to challenge our understanding. Zoe Robinson is Learning and Programmes Director at Kaplan Financial

ACCA pass rates hold steady ACCA exams proved to be a ‘taxing’ for many September sitters, as the Advanced Taxation pass rate fell to 30%. In June it was 40%! Our feedback post-exam indicated PQs really struggled with the September test. Expressions such as ‘quite hard’, ‘very tough’ and ‘absolutely horrible’ were all used. ATX sitters felt the examiner focused on more obscure, niche parts of the syllabus. The sale of a company at a loss also threw many. The AAA paper, which also had a 30% pass rate this time around, left many sitters feeling ‘miserable’ and ‘gutted’. Candidates admitted they were sucked into spending too much time on Q1. ACCA said that the new Strategic Business Leader attracted a smaller number of entrants at its first

sitting. And with a pass rate of 45%, ACCA admitted that this is at the lower end of the former P1 and P3 exams that it replaced. It was felt the small cohort, although bigger than expected, may have skewed the pass rate. ACCA said post-sitting research showed those who attended approved providers achieved pass rates up to 20% better than those who self-studied. At 47%, the Strategic Business Reporting pass rate is in line with the old P2 paper. In all, 91,365 PQs sat 113,936 papers in September – an average of 1.2 papers per sitter, slightly down on the June average (1.3). Executive director strategy and development, Alan Hatfield, said he was pleased with the Strategic

ACCA SEPTEMBER PASS RATES* Sept 18 Sept 17 Sept 16 PM 43% 43% 39% TX 49% 48% 47% FR 51% 47% 48% AA 37% 37% 44% FM 47% 48% 47% SBR 47% N/A N/A SBL 45% N/A N/A AFM 35% 35% 37% APM 33% 32% 35% ATX 30% 33% 35% AAA 30% 31% 32% * Other September 2018 pass rates: AB 80%; MA 63%; FA 69%; LW 83% Professional results, which followed the most extensive support programme ever put together by the ACCA. Top dogs: more than 70 young chartered accountants from the North West recently celebrated becoming qualified at special ceremonies hosted by the ICAEW. Among the winners honoured on the day were Ali Qasim, of Rothschild & Co in Manchester, the Chartered Star winner, and Damian Taylor, of KPMG in Manchester, who won first prize in Strategic Business Management exam.

Fighting the anonymous critics Grant Thornton’s CEO, Sacha Romanovitch, has decided to step down at the end of her first term in office. She hit the headlines recently after a group of colleagues leaked a dossier to media organisations criticising the way she had run the firm for the past four years. The criticism, purporting to be from 15 unhappy partners, was directed at her performance review,

along with an anonymous document criticising her leadership style. She is apparently accused of “forcing people to conform to socialist ideals” and removing partners from key roles “for asking challenging questions”. Grant Thornton brought in

Phishing scam The Low Incomes Tax Reform Group website was recently targeted as part of a phishing/spoof scam. This means that someone you know may have received an email that appeared to come from the LITRG (with an email address ending .litrg.org.uk), saying they may be entitled to a tax refund from HRMC. The advice as always is do not click on the link.

which came to power in May, is to shift to accrual accounting in order to help clean up its accounts and make public sector finances more transparent. Finance minister Lim Guan Eng confirmed that the government was committed to move from cash-based accounting to accrual by 2021.

private investigators to find the source of the leak. Romanovitch (pictured) admitted being CEO of Grant Thornton could be a “lonely job” at times, and she has to make decisions that some partners find painful in the short term in order to create a sustainable business for the future.

In brief Female FDs earn £30k less Male FDs earn on average almost £30,000 a year more than their female counterparts, according to the latest analysis from the Global Accounting Network. Among financial managers and directors, women make up 42% of the roles and earn an average of £42,674, compared with the £71,986 salary of their male contemporaries. This difference equates to £29,312, a gap of 31.6%. • More careers news, page 29. 10

Move to accrual accounting The Malaysian government,

Narrow scope amendments The International Accounting Standards Board has issued narrow-scope amendments to IFRS 3 Business Combinations, which

should help companies decide if an acquisition is of a business or a group of assets. The amendment definition emphasises that the output of a business is to provide goods and services to customers, whereas the previous definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and others. Distinguishing between a business and a group of assets is important because an acquirer recognises goodwill only when acquiring the business. PQ Magazine December 2018

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PQ one-day conference

May the force be with you PQ magazine and LSBU have joined forces to host a one-day conference exploring the ‘dark side of accountancy’. Be there or be square!

recent report said that by 2020 CFOs will spend around 90% of their time working on big data. As businesses start to embrace new technology, the role of a CFO will evolve drastically, from a financial expert to a multi-disciplinary strategist. You will need to place yourself at the heart of this data revolution. And what do you know about blockchain? Do you have a Scooby Doo about what is going on there? Everyone has heard of Bitcoin, but how will this new wave of technology impact on your future?

SBR and SBL exam preparation LSBU’s top tutors are offering exam preparation sessions for the SBR and SBL exams. The courses run over 10 weeks, starting on Monday 3 December. SBR will run on Monday evenings from 6pm to 9pm and SBL on Thursdays at the same time. There will also be SBR classes from 10am to 5pm on Saturday 23 February and Saturday 2 March. Those sitting SBL have additional classes on Sunday 24 February and 3 March. The teaching team include a PQ magazine Tutor of the Year, Joe Adomako, Sara Abdaless and Ivor Pingue. • For more details simply email accalearning@lsbu.ac.uk Joe Adomako

Well, you can help future-proof your career in just one day, with our free joint conference at London South Bank University’s Keyworth Centre, entitled ‘The Dark Side of Accounting – ethical dilemmas and sustainability challenges’. You really do need to put Wednesday 28 November in your diary, and give your future a chance! On top of key note talks on money laundering and AI, we delve into what makes good governance. We will look at how integrated reporting and UN sustainability goals are reshaping the profession, and we will ask whether the FRC has a future. That is something MPs and investors are also increasingly asking. The conference also has a whole stream on career development – from closing the skills gap and personal branding to a chance to meet real employers. There’s free food and a unique chance to network with some of the leading lights in the profession. Hey, you even get a chance to meet the PQ magazine team! PQ

To secure your FREE place go to lsbu.ac.uk/whats-on and drill down to 28 November. Eventbrite will do the rest.

A leading qualification for a changing world Our new Ethics and Professional Skills Module focuses on developing the complete range of ethical and professional skills employers told us they need. Taught via real-world business situations, you will cover ethics and professionalism, personal effectiveness, scepticism, leadership, communication and interpersonal skills. Although you are not required to complete if you have already taken the current Professional Ethics Module, it will give you the ideal grounding to start your Strategic Professional Exams so you may choose to sit this module as well.

To register for this module visit: future.accaglobal.com/epsm

PQ Magazine December 2018

ACCA exams PQ

ince consulting with over 2000 ‘C-suite’ executives and accountants worldwide, we’ve been on a mission to ensure students become the strategic, forward-thinking professionals equipped with the skills needed by employers. As part of the qualification re-design, ACCA now offers the Strategic Professional exams, which include two brand new style exams: Strategic Business Leader and Strategic Business Reporting. Strategic Business Leader (SBL) is an innovative new case study that integrates technical, ethical and professional skills in a business context. Students are presented with a case scenario and asked to play the role of a finance professional by demonstrating technical, ethical and professional skills in their response. Strategic Business Reporting (SBR) places a high priority on the holistic skills required by financial reporting specialists, the skills we know are valued by employers. This exam focuses on the communication and reporting of financial information to stakeholders. It is this interpretation and reporting that is most valued by employers; we know machines can perform the number-crunching aspect, but cannot provide the analysis or evaluation of results. September saw the first-ever sitting of these exams and the new style Options exams. We are extremely proud of students’ progress across all of these exams. Tuition makes all the difference in exam preparation. In this September’s session, PQs attending tuition from approved learning providers achieved better pass rates than those who self-studied. Pass rates were up to 20% better globally, showcasing the importance of students seeking quality support and undertaking guided practice for this new exam. We have been working incredibly closely with tutors over the past year or so with our most extensive tutor support programme to date. The other key success factor is, of course, practice. Both SBL and SBR are new style exams and the requirements of these exams are different to what students may have seen before. It is essential that students practise using ACCA specimens or material from approved content providers or learning providers. For students preparing to sit SBL in our next exam session, a full list of resources including practice resources can be found at https://tinyurl.com/y6uutqq8.

SBL: key areas to focus on Firstly, understand the importance of planning in the exam. We recommend that students spend at least 40 minutes of the four hours actively reading through the entire exam, highlighting, cross-referencing and annotating exhibits to help in writing their answers. Students must also practise under timed exam conditions to get used to managing exhibits and planning out the requirements. Our second tip is to work on improving professional skills. There are 20 marks earned in the exam specifically for the demonstration of professional skills. However, the September exam and our trials indicate that there is a strong correlation between professional skills marks and technical marks, making it essential PQ Magazine December 2018

Getting fit for the role

Judith Bennett has some advice on how to tackle the SBL and SBR exams

students practise earning these as well as technical marks. We know that in the September exam session students who followed the requirement as set out, for example preparing a document for the board, were likely to better structure their answer and also demonstrated their analysis, evaluation, appropriate questioning, etc. These students gained technical marks as well as marks for the professional skill being marked. A scattergun approach without a structure will gain few marks and is not a recipe for success. Commercial acumen As the Strategic Business Leader exam asks students to take on one or more roles, they will be asked to write reports and prepare presentation slides. An understanding and application of analytical skills, evaluation, scepticism, communication and commercial acumen is required for this exam. ACCA has produced new videos to further help students understand how they should be applying these professional skills. Keep up-to-date with all student resources on our resource finder at https://tinyurl.com/y7dsav2x. We also recommend that students complete the Ethics and Professional Skills module (EPSM) before taking any of the exams at Strategic Professional. This builds the professional skills needed to answer exams at this level. The SBL pass rate in September 2018 for those students who had completed EPSM was a superb 73% globally.

As well as improving or preparing students for Strategic Professional exams, the Ethics and Professional Skills module helps students to build the skills demanded by employers the workplace. The module is a skills builder, allowing students to develop in their skills in their own time, with the ability to return to the module at any point during studies or working lives to help refresh those essential skills. Our final piece of advice for all students is that it is imperative students answer the case presented. When reading the case study, PQs should identify the important information that they can use to provide analysis and evidence backed advice as requested in the requirements. Stick to the information provided in the exhibits and apply answers to the case presented. Students must read the requirements carefully as responding exactly to the requirement will help the student gain marks. Consultations Through our extensive consultation with employers throughout the development process for all Strategic Professional exams we are confident we are supporting students to succeed in the workplace. Students completing the Strategic professional exams are all gaining the forward-thinking strategic abilities and the advanced skill-set, modern professional accountants need to shape the future of global business. PQ • Judith Bennett is Director – Professional Qualifications at ACCA 13

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Awards 2019 PQ

TIME TO

NOMINATE It’s time to get nominating for the PQ awards

Current NQ of the Year Michael Scott

AWARDS CATEGORIES

• • • • • • •

PQ OF THE YEAR NQ OF THE YEAR DISTANCE LEARNING STUDENT OF THE YEAR STUDENT BODY OF THE YEAR APPRENTICE OF THE YEAR ACCOUNTANCY BODY ACCOUNTANCY COLLEGE – PUBLIC SECTOR

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ACCOUNTANCY COLLEGE – PRIVATE SECTOR

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

he December deadline for this year’s PQ awards is looming large. Surely you know someone who deserves to be walking down the PQ red carpet at the Café de Paris come February next year? All we need is 250 words on why you/your nominee should win one of our coveted PQs! Remember, there is nothing wrong with nominating your team or even yourself – now is not the time to be backwards about coming forward. That’s what our current NQ of the Year, Michael Scott, did and look how well it paid off for him. He has just moved to a new job at the DPS Group as group financial controller. Our awards really are a unique opportunity to thank the people who have helped you along the way. Maybe there’s a training manager you want to nominate, or even a fellow PQ. Last year one tutor

was even nominated by their son! And if you get shortlisted then you get an invite to accountancy’s best night of the year. The PQ awards are totally independent – our top judges make sure of that. This means those used to winning awards don’t get an automatic prize with us – everyone is judged on the day on their true merits. So come on, let’s be having you! You can download the nomination form from www.pqmagazine.com by clicking on the ‘pq awards’ bar on the home page. Or just email us your entry direct, to awards@pqmagazine.com. All we ask is you make it clear what category you are entering. You can also post your entry to: The Editor, PQ magazine, Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ. Deadline for nominations is Friday 7 December 2018 – so get a wriggle on! PQ

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PQ Magazine December 2018

PQ ACCA exam tips

What can you expect in the December exams? Here’s some sound advice from top tutors at BPP Performance Management (PM) PQs will now be used to the advice that any syllabus area can be tested in sections A and B – so study all areas! The areas expected to be tested in section C are budgetary systems, planning and operational variances, mix and yield variances and evaluation of the company performance (either, as a whole or on a divisional basis). Also expect to evaluate some performance. You must plan answers to section C before you start to write, and ensure you make reference to the scenario in your answer. Sitters are told to expect the unexpected. That said, the exam will be about 40% calculation and 60% discussion, which means you won’t pass if all you can do is calculations. Interpretation and application are crucial, especially in section C. Taxation (TX) Expect at least a couple of the OTQs to be devoted to the administration of income and corporation tax. You need to be comfortable with: • Due dates for payment of income tax (including payments on account). • Due dates for payment of corporation tax (including instalments for large companies). • Filing dates for income tax and corporation tax returns. Also, likely to be tested in section A are: • VAT rules on registration, impairment loss (bad debt) relief, and SME schemes relating to cash accounting, annual accounting and flat-rate schemes. • Inheritance tax due on lifetime transfers both in the donor’s life and on death. • Statutory residence tests for individuals. • Identification of groups of companies for corporation tax loss reliefs and gains. • Trading loss reliefs for both companies and sole traders. In section B, the exam questions will be similar to section A, only longer! Spend 50% of your revision time answering section C questions in practice and revision kits to build up your confidence and speed to maximise your marks. 16

• Internal audit. • Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls or descriptions of tests of control). • Audit procedures (both substantive procedures and tests of control). Think about how you will present your answer – try to use a tabular format in your solutions where relevant as the examining team have said candidates who do this score better. Pay attention to the verbs as these indicate the number of marks available. For example, ‘explain’ requires a sentence and will score one mark if properly explained. The verb ‘list’ simply requires you to list out the information out with no further explanation and will score a half-mark per point. You know the two longest questions will focus on income tax and corporation tax. These are likely to include the following: • Employment benefits. • Property income (possibly including relief for finance costs). • Relief for pension contributions. • Adjustments to profit to arrive at trading income for both companies and sole traders – in past sittings we have seen a number of questions whereby you have to correct errors in computations included in the scenario. • Capital allowance computations. Financial Reporting (FR) For the 15 two-mark MCQs in section A expect several questions on consolidation and interpretation of financial statements. Non-core areas such as inflation and specialised entities could also come up. Section C will have two 20 markers, one covering interpretations and the other preparation of financial statements. One question is likely to be in the context of a single company and one in the context of a group. So, you could have a single company comprehensive income and/or statement of financial position. Accounts preparation questions may include extracts or standalone calculations or full statement of profit or loss and other comprehensive income and/or statement of financial position. Both questions will cover the accounting for items from other areas of the syllabus. Section C may include a short separate part, for example with a

statement of changes in equity, statement of cash flows extracts, earnings per share calculation, or linked written topic. Consolidation questions would include one subsidiary and often an associate, with adjustments, eg fair values, deferred/contingent consideration, PUP on inventories/ PPE, intragroup trading and balances, or goods/cash in transit. A single entity question could be preparation from a trial balance or restatement of given financial statements with the usual adjustments for depreciation, revaluation and current/deferred tax (including deferred tax on revaluation), plus a mix of adjustments on other syllabus areas, for example leases, substance over form issues, financial instruments (change in fair value or amortised cost), share issues, government grants, inventory valuation, revenue recognition or construction contracts. Audit & Assurance (AA) Each mini-case in section A will test single topic areas of the syllabus and so will either test syllabus areas A, B, C, D or E. However, expect questions to focus on syllabus areas A and E. Most of marks for section B’s three questions will test syllabus areas B, C and/or D. Areas expected to be tested in Q16 and Q18 will include: • Audit planning. • Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk).

Financial Management (FM) Section A questions will often be knowledge based – testing your key knowledge of key technical terms and will balance out the questions in section B and C. It is likely that a good number of questions will test your understanding of financial management and objectives (ratio analysis, the concept of shareholder wealth), as well as the economic environment and financial institutions topics (financial intermediation, fiscal and monetary policies). The efficient market hypothesis is also likely to be tested here. Areas expected to be commonly tested in section B are working capital management (operating cycle, the impact of a change in credit period, or accepting a factor’s offer), business or security valuations (methods of valuation), and financial risk management (mainly in the form of currency risk, but possibly an aspect of interest rate risk). The two questions in section C will mainly focus on sections C, D and E. Section C is working capital management, section D is investment appraisal and is likely to feature NPV with inflation and tax. Section E is business finance – either an evaluation of financing options (interest coverage and gearing ratios) or a cost of capital and analysis are most likely. Whichever of these three topics that does not feature in section C is likely to appear in Section B of the exam. Check out the new article on behavioural finance on the ACCA website. PQ Magazine December 2018

ACCA exam tips PQ Strategic Business Leader (SBL) You have four hours for this exam, not the usual three hours 15 minutes, and it builds on the knowledge you gained at the â&#x20AC;&#x2DC;Applied Knowledgeâ&#x20AC;&#x2122; and â&#x20AC;&#x2DC;Applied Skillsâ&#x20AC;&#x2122; levels. Remember that it has its own distinct syllabus content. The SBL exam will focus on one main organisation, and all of the question requirements will relate to this organisation. You may have to take on a variety of roles, which can be internal or external. You will also be required to respond to a variety of people within the organisation. All questions are compulsory and will consist of 80 technical marks and 20 professional marks. Although you have 240 minutes, you still have to use your time wisely. ACCA is advising you spend around 40 minutes reading, planning and interpreting the requirements and information/ exhibits provided. You should then allocate 2.5 minutes per mark on offer. You should earn the professional skills marks by the virtue of attempting the 80 technical marks on offer. Requirements will not specifically ask you to use a particular model in answering the question. Professional skills marks are

awarded for displaying the following skills and behaviour: communication; commercial acumen; analysis; scepticism; and evaluation. Strategic Business Reporting (SRB) This is only the second sitting of SBR and we know the September pass rate was 47%. Section A has two questions worth 50 marks. The first question will be based on group accounting and may include complications such as a foreign subsidiary, discontinued activities, disposals and/or acquisitions. You will be expected to prepare and explain one or more calculations from any aspect of the group accounts. You must then explain the underlying principles. The first question is also likely to require consideration of some financial reporting issues, such as financial instruments, pensions and share-based payment. The second question will cover the reporting and ethical implications in a given scenario. You may be asked to consider these issues from the perspective of a particular stakeholder â&#x20AC;&#x201C; an investor, lender or customer. Make sure you

HEALTH WARNING

include the use of additional performance measures as seen in September 2018. Current issues could be examined in either section A or B, but is likely to form part of a question rather than a full question. In the September 2018 exam current issues featured in both Q1 and Q3, so donâ&#x20AC;&#x2122;t be surprised if this is also the case in December.

These tips should only be used in conjunction with proper study. We cannot guarantee that these topics will appear in the actual exam as we have not seen the exam papers. Examiners are not predictable so it is vital that all core syllabus areas are revised fully.

Advanced Financial Management (AFM) It is worth repeating that from September both section A and B of the exam became â&#x20AC;&#x2DC;compulsoryâ&#x20AC;&#x2122; â&#x20AC;&#x201C; there are now no optional questions. Also from September, every exam will have questions that have a focus on section B of the syllabus (advanced investment appraisal) and section E (treasury and advanced risk management techniques). These syllabus areas are therefore high priority areas for your revision. Another change is the fact that no question will be entirely a discussion question. Expect section A questions to be based on core syllabus areas such

consider any threats to the fundamental principles of ACCAâ&#x20AC;&#x2122;s Code of Ethics and Conduct in your answer. Section B can cover any area of the syllabus, and may be based on a short scenario, a case study with several parts, or an essay. There will always be a question or part-question on the analysis or appraisal of financial and nonfinancial information. This may

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PQ ACCA exam tips Continued from page 17 as project appraisal (domestic or overseas), business valuations and business/financial reorganisations. These areas often include cost of capital calculations. Risk management may also feature in a number of different ways. For example, value at risk, real options, hedging and risk mapping. In section B Q2 and Q3, expect risk management (currency or interest rate), dividend policy and general financing issues, and real options. Remember this is not a maths paper – in all questions the examiner is interested in your ability to communicate well and to give good management advice that relates to the scenario. Keep checking the ACCA website for articles written by the examining team in the lead up to the exam. Advanced Performance Management (APM) Remember, there are no longer optional questions in section B. Q1 will focus on a wide range of issues from syllabus section A (strategic planning and control); section C (performance measurement systems and design); and section D (strategic performance measurement). In recent exams, Q1 (50 marks) has often requirement linking a business’s mission to its performance objectives using the concept of CSFs and KPIs. You may well also have to critique and recommend improvements to performance reports. Performance management frameworks (for example building blocks, performance pyramid or the balanced scorecard) are also commonly tested in Q1. It is vital you understand the purpose and limits of these models. There are lots of past exam papers you can use for practice here. One section B question will come from the syllabus section E (performance evaluation and corporate failure). Commonly tested areas in section B are quality

management, information reporting (big data, lean information), the application of strategic models (such as PEST, Porter’s 5 Forces, the Value Chain), HR frameworks (reward & appraisal systems), risk management, and environmental management accounting. Recent key articles have been on complex business structures, big data, integrated reporting and performance management models (BCG and 5 forces), and are often tested so are an important read. Advanced Taxation (ATX) (UK) The two compulsory questions in section A will both be a case study style. The first is worth 35 marks and the second 25 marks. One of these questions will focus on personal tax issues and the other on corporate tax issues. Don’t forget your four professional marks and five marks on ethics. Topics you should expect to see: • Group of companies involving overseas aspects and losses. • Unincorporated business particularly loss relief or involving a partnership or basis period rules. • Capital gains tax versus inheritance tax, including

availability of reliefs. • Overseas aspects of income tax, capital gains tax, IHT or corporate tax. • Personal service company. • Share schemes. • Company purchase of own shares or liquidations. • Enterprise investment schemes/ seed EIS/venture capital trusts. • Takeovers. • VAT – partial exemption or land and buildings or transfer of a going concern or overseas transactions. • Transfer of trade versus sale of subsidiary. • Disincorporation relief. • Pension contributions. • Patent box, research and development expenditure. Advanced Audit & Assurance (AAA) This is the second sitting of AAA and the pass rate isn’t going up! The September 2018 exam contained no real surprises for tutors, although the embedded email and the supporting exhibits in Q1 were presented slightly differently to the way they appeared in the specimen exam. Section A will comprise of a case

study worth 50 marks, set at the planning stage of the audit, for a single company, a group of companies or potentially several audit clients. Candidates will be provided with detailed information, and is likely to include extracts of financial information, strategic, operational and other relevant information, as well as extracts from audit working papers, including the results of analytical procedures. You will need to address requirements from syllabus sections A, B C and D. Think planning, risk assessment, evidence gathering, and ethical and professional considerations. Don’t forget the professional marks available in section A. There are no optional questions in AAA’s section B. One question will always predominantly come from section E, so think completion, review and reporting here. That might mean assessing a going concern, the impact of subsequent events, evaluating identified misstatements, and the effects on all these on the auditor’s report. A critique of the audit report may also be asked for. The other question can be drawn from any other syllabus areas. Section G on current issues is unlikely to form the basis of any question on its own. In the past, this exam tested areas covered by the examiner’s technical article. You are strongly advised to read the five recent articles on exam techniques and you must read the ones covering ethics, risk and accounting issues. Check out the technical article on the evaluation of misstatements. PQ

We have loads of top advice on our website for all PQs – if you don’t believe us go to

pqmagazine.com

PQ Magazine December 2018

L ni as ng t tic ke ts ai re m

THE DARK SIDE OF ACCOUNTING

Ethical Dilemmas and Sustainability Challenges Wednesday 28 November 9am-7pm Keyworth Centre, LSBU

Back for a second year, our free sell-out conference in partnership with PQ Magazine

Hosted by London South Bank University, join our one-day event to hear from industry experts on key topics including: – Blockchain, money laundering, AI and Ethics – – Corporate governance and sustainability – – Developing your career – For accounting professionals and academics of any seniority working in all sectors.

Secure your free place: lsbu.ac.uk/whats-on

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PQ AAT exams

AAT RESULTS AAT has now published its annual pass rates for the year ending 30 June 2018. Detailed in the table here are the worldwide pass rates for CBAs for the 12 months ending 30 June 2018 Assessments only CBA pass rate

Level 1/Access 90.7%

Foundation 85.1%

Advanced 69.5%

Professional 61.6%

AAT has four graded qualifications. The table below shows a summary of the grades awarded for each qualification between 1 September 2017 and 31 August 2018. Qualifications and grades awarded

Pass

Merit

Distinction

Foundation Certificate in Accounting

43%

52%

Foundation Diploma in Accounting and Business

11%

71%

17%

Advanced Diploma in Accounting

28%

54%

18%

Professional Diploma in Accounting

51%

46%

Rachel Kellett, Head of Qualifications and Product Development at AAT, commented: “This is the first time we have included Pass, Merit, and Distinction grade summaries in our pass results, enabling a more detailed analysis of what students are achieving in our qualifications. We are very pleased to see that overall passes in each qualification are looking very strong.” The pass rates for the year ending 31 December 2018 will be published in March 2019. PQ

Level Level 1 Level 1 Level 1 Level 1 Level 1 Access Access Access Foundation Foundation Foundation Foundation Foundation Foundation Foundation Foundation Advanced Advanced Advanced Advanced Advanced Professional Professional Professional Professional Professional

Assessment name Short Code Access AA Bookkeeping and Accounts BKAC Computerised accounts COPA Computerised Payroll Administration CPYA Spreadsheets software SPRS Access to Accounting Software AASW Access to Business Skills ABSK Access to Bookkeeping ATBK Bookkeeping Controls BKCL Business Communications, Personal and Learning Skills BPLS Bookkeeping Transactions Elements of Costing Foundation Synoptic Assessment Introduction to Business and Company Law Introduction to Payroll Using Accounting Software Advanced Bookkeeping Advanced Diploma Synoptic Assessment Final Accounts Preparation Indirect Tax Management Accounting: Costing Business Tax Credit Management Cash and Treasury Management External Auditing Financial Statements of Limited Companies

Worldwide 92.0% 85.6% 92.0% 87.5% 91.9% 80.5% 93.8% 95.7% 76.0% 94.7%

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90.8% 93.2% 85.5%

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50.6%

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89.2% 83.7% 61.7% 54.6% 76.8% 78.5% 83.3% 69.9% 57.8% 50.0% 68.6%

FSLC

63.8%

Professional Management Accounting: Budgeting Professional Management Accounting: Decision and Control

MABU

74.7%

MDCL

53.8%

Professional Professional Diploma Synoptic Assessment Professional Personal Tax

PDSY PLTX

50.9% 66.5%

PQ exam technique

Preparing for that all-important pass Paul Kirkwood has some top advice on making the most of the last month before your exam

fundamentally believe that studying effectively will significantly increase your exam mark. Here are some of the key themes that you may wish to consider in the run up to your next exam, focusing on the last three weeks before exam week. If you’re sitting papers the next set of ACCA exams then you should have already reviewed your current position, especially concerning: • Your strengths and weaknesses. • Your knowledge of the key examinable areas. • What study and revision resources you have available to you. Doing this allows you to plan what work you need to do to get ready for your revision phase.

Three weeks to go: bridging your learning gaps It’s important to leave sufficient time for focused revision and question practice, so try to bridge 20

any learning gaps well before the exam week. In this phase you may be going back to your core learning materials to focus on difficult topics. Two weeks to go: improving your core skills It’s time to really start working through exam standard questions to time. Make sure that you focus on your weaker areas but don’t ignore your strengths. With a couple of weeks to go I often get asked these two questions and here is a summary of my response: 1. I don’t know where to start when I see a question. What should I do? If you were in a classroom and you didn’t know where to start you’d probably either ask the person next to you or the tutor for help. However, it’s not so easy to do this when working on your own. My first bit of advice would be to take a ‘quick peak’ at the answer to get you started and then close the answer and do the rest yourself. 2. I do practice questions but don’t seem to be getting better. Why?

I believe that you get as much benefit from debriefing questions as from doing them in the first place. Don’t underestimate the power of proper debriefing. Figure out where you went wrong, make sure you understand if you ‘guessed’ something and it was right. This will make you better when tackling a similar question in the future. One week to go: prepare to pass! Try to bring everything together in the week before the exam. A great way to do this is to take at least one full, timed mock exam (ideally using the same environment as your real exam; that is computer based or paper based). While question practice is undoubtedly the most important element, don’t be afraid to ‘dip’ into your core learning materials if needed. And, finally, remember that all professional exams are challenging, and success should be celebrated as a great achievement. PQ • Paul Kirkwood is Head of Learning for the AVADO ACCA Faculty PQ Magazine December 2018

exam technique PQ

It’s all in the mind Andrew Mower offers some tricks of the trade that will help you to remember the stuff you need to remember

ake it naughty. Make it silly. Make it gossipy. If it helps you to remember it, it’s worked. We all know that there’s a lot to remember with professional exams. You realise this when you first set eyes on a textbook, and wonder who on earth would be able to remember hundreds of pages of information – and that’s just for one exam! The only way to make that information stick is to make it memorable. We’ve pooled together some great memory techniques, to help remember even the trickiest of topics on exam day. Mnemonics Mnemonics are ideal for memorising lists of things. Simply take the first letter of each word you’re trying to remember, and then devise a way of remembering those letters. For example, Kotter’s 6 methods of overcoming user resistance are: Education Participation Facilitation Negotiation Manipulation Power The first letters of each are E, P, F, N, M and P. If these can spell out a word then that’s great to use (like in SWOT or PESTEL, for example). If not, then we can come up with a way of remembering it. For this model, I remember ‘Every Person Feels No More Pressure’. That’s an easy little phrase to learn – but feel free to create your own. The funnier, weirder or more personal they are, the more they’ll stick in your memory. In the exam, you can then jot down the first letters of your phrase (E, P, F, N, M and P). It’s then far easier to fill in the missing words than it would be to remember them without a prompt.

Mind maps A mind map is a visual representation of a topic – usually with the subject matter title in the middle, then branches coming off of it with sub-topics and the key points around each. For visual learners, mind maps are a great way of revising and remembering key topics. The process of summarising a subject on one page is as important as the finished mind map – identifying what is important and condensing that down is a great way to revise. I know students in the past who have made mind maps on an A3 sheet of paper for each syllabus area, which is a great idea.

Cheat sheets Imagine you were allowed to take one sheet of A4 paper into the exam, with whatever you wanted written on it. You’d squeeze in all the really important bits – those tricky little formulae, the key tax rules, the lists of controls. So do this – but just don’t take it into the exam. By creating it in the first place, it will help you to remember what you’ve written down. You also then have a single

Visualisation Derren Brown uses this technique in a lot of his tricks. It involves making a strong visual link between a familiar item and the item you’re trying to remember. I apply this technique when remembering accounting standard numbers. I think about the street I grew up on, and associate each house number with its relevant accounting standard. For example, house number 2

PQ Magazine December 2018

sheet of paper to revise from as your exam approaches, which is far less intimidating than a whole textbook. I like using different colours when doing this – it helps certain topics to stand out and makes it more appealing to look at.

has lots of boxes outside it (IAS 2 – Inventory), and number 16 has building work going on (IAS 16 – Property, Plant and Equipment). Keywords Condensing a whole paragraph into just two or three words makes it far easier to remember. For example, the definition of demand is ‘the desire for a good or service, backed by the ability to pay within the time period under consideration’. That’s tough for anyone to remember. But if you pick out three key words – desire, ability and time – and remember these instead, it should prompt you to recall the full phrase. Repetition The ‘rule of three’ is great for committing things to your long-term memory. The idea is that you should go through things three times to fully memorise them. Go through a topic once. Go through it again. Give yourself a break. When you think you’ve got it, go over it once more – that’s the key to getting it in your longterm memory. Summary Everyone learns in a different way, so not every technique will work for you. Try some of these out, and hopefully they will help your revision become much more productive. PQ • Andrew Mower is a tutor at Kaplan Financial 21

PQ CIPFA spotlight

Managing forex risk Ian Chafer explains how hedging foreign currencies can benefit importers and exporters, and how forward contracts work

ince the UK referendum decision to leave the EU and the election of President Trump in 2016, there has been and will likely continue to be greater volatility in exchange rates, not only between the main Western currencies, but also those in countries such as China and India. We saw such shifts again this summer when the Turkish lira crashed against the dollar and sent panic through global currency markets. The global currency fluctuations that occurred after these events can have a very real impact on public finances, whether you are borrowing and lending, or involved in procurement arrangements. Managing exchange rate risk is likely to become more challenging, and this will transform the way the governments can run and distribute public services. Dealing with foreign currency transaction risks is a relatively new area on the CIPFA Financial Management syllabus, having been first introduced in 2016. Generally, hedging against transaction risk is an area students find challenging, with terminology like ‘forward contracts’ and ‘synthetic forwards’ saying to students this is not going to be easy. In terms of working in multiple currencies, the transaction risk is simply the risk that between today and a future date (maybe three months hence), exchange rates will move against you (your own currency will fall in value). This means that in terms of your own currency, you would end up either paying more or receiving less for a given amount of another currency. Hedging is all about reducing risk, which will mean limiting any potential losses, but as a consequence at the same time limiting any potential gains. One of the simplest methods of hedging is a ‘forward contract’. In effect, you are agreeing an exchange rate today that will apply at a specified future date. Forward contracts are usually entered into with a bank or other financial institution. The approach is to use the spot exchange rate (the rate today) and to adjust this for a forward premium or discount. The premium/discount will reflect what the bank expects to happen to exchange rates over the next three months (and will have built into it an element of profit for the bank). To arrive at the forward rate you would deduct the premium or add the discount. This might sound counterintuitive, but the terms are from the perspective of the bank/financial institution. Students need to be careful in identifying whether the company is expecting to receive a payment (exporter) or expecting to make a

payment (importer) in the other currency. As an example, the spot rate between the US Dollar (USD – $) and the Pound Sterling (GBP – £) is $/£1.1401 – 1.1585 (these are the rates at which you would buy and sell USD respectively). Our company expects to receive $5m in three months’ time and the three-month forward discount available from the bank is $0.0048 – 0.0086. Spot rate Add discount Forward rate

1.1401 1.1585 0.0048 0.0086 1.1449 1.1671

Our company wants to sell the USD so we need to look at the selling rate, which is $/£1.1671. We could then exchange our $5m in three months’ time for £4,284,123 – guaranteed. This may or may not end up being a good deal. $5,000,000/1.1671 = £4,284,123 What if, however, there is no suitable forward contract available. This is where synthetic hedging comes in, or in this case specifically a ‘synthetic forward’. In essence, if we know the spot rate today, and we also know the (fixed) interest rates at which we can borrow/invest over the threemonth period in each of the currencies involved, we can in effect set our own forward rate. Using the previous example, we know that we will be receiving $5m in three months’ time. What we need to do is to create a future $ liability of $5m by borrowing $ today and using the future receipt to pay off this borrowing in three months. Let us assume that we can borrow USD at a

fixed rate over the three months of 5% pa, and that we can invest in GBP at a fixed rate of 4% pa over the same three-month period. 1. First we need to calculate how many USD we need to borrow today so that the debt will equal $5m in three months’ time. An annual rate of 5% will equate to a three-month rate of 1.25%, so $5m/1.0125 = $4,938,272. What we are saying is that including interest this debt of $4,938,272 will have increased to $5m over the three-month period. 2. Sell the USD borrowed for GBP at the spot rate today, so $4,938,272/1.1585 = £4,262,643. 3. We can now invest the GBP for three months – at a rate of 1% (4% pa for three months), giving us a figure of £4,305,270 in three months’ time. 4. In three months’ time we can pay off the USD loan with the USD receipt. We have independently set our own forward rate of $/£1.1637. $5,000,000/£4,305,270 = $/£1.1637 This is a slightly better rate than that achieved using the forward contract, giving our company a slightly higher sterling value. In this instance, the company is better off by £21,147 (the difference between the two sterling amounts). Although it sounds complicated, by knowing the spot rate and the interest rates at which you can invest or borrow in each currency you can set your own forward rate, as shown below. Rate achieved of $/£1.1637 = spot rate of PQ $/£1.1585 x (1.0125/1.01) • Ian Chafer, Senior Trainer, CIPFA PQ Magazine December 2018

CIPFA spotlight PQ

Local authorities reach financial tipping point

Don Peebles explains why it’s crucial that the government sticks to its pledge to end austerity

few weeks ago, the Prime Minister danced up to the podium at the Conservative Party conference to declare the end of austerity, as part of her postBrexit vision for a more prosperous Britain. Despite it being unclear exactly what ‘the end of austerity’ means and whether the purse strings will actually be loosened, it is welcome news that the government will likely move away from its fixation on capital restraint. As after eight years of draining the tank with little regard to how this affects the quality and effectiveness of services, the sector has reached crisis point. Indeed, the latest edition of CIPFA and the Institute of Government’s (IfG) Performance Tracker, which analyses the performance of public services, demonstrates how the survival of many vital services that communities depend upon are now in doubt. Through careful examination of available data, the Tracker concludes that prisons, adult social care and other local services can no longer continue to operate at their current level of efficiency. And that any attempt to try to maintain or increase the level of output without increasing spending is likely to lead to a further deterioration in quality, followed by the need for injections of emergency cash. Clearly, given their precarious financial position, these services should be first in line to

receive any additional resources that may be available. But, it is important that we do not simply splurge money on struggling services. Given the Office of Budget Responsibility’s (OBR) sobering forecast that, at current levels of taxation (37% of GDP), the UK will only be able to afford its health services and retirement pensions, with all other services gone to the wall. There is an existential need therefore for an honest and fully engaging public debate about the options ahead. At current levels of taxation we can simply no longer afford the services and protection the state currently provides. Already, where national and local governments have been able to, the cost of services has been quietly shifted onto individuals. We can see local

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authorities introducing new charges for garden waste collection (they have risen by £74m this year) and volunteers are running libraries. Northamptonshire County Council and East Sussex County Council have even mooted plans to drastically scale back services to the statutory minimum in light of financial constraints. Public sector leaders and the government all have a duty to make clear to the public that the quantum of services currently available is not sustainable and that we, as a country, face a clear choice: we can either contribute more to fund services or expect public bodies to deliver less. PQ • Don Peebles, Head of Policy and Technical, CIPFA

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PQ ACCA APM paper

Listen to the experts Tom Bulman has some top advice on how to best prepare for the Advanced Performance Management optional paper

20%–30%’ of the marks in APM. Therefore, you must apply the theory to the case studies in the exam. This means carefully digesting the information in the case study and applying your knowledge to that organisation. You must ensure your answer includes all key numbers, and a clear explanation of what your analysis means to the business. When writing make sure you present a balanced answer, considering the facts for and against your preferred course of action. Then consider the implications by asking yourself the question, “so what does that mean for the business?” In that way you will be sure to develop your point more fully. It’s also worth remembering that while APM crosses over into Strategic Business Leader territory (the old P1 and P3 exams) using similar models and ideas, the questions are different. The focus in APM is performance management, not strategic analysis!

dvanced Performance Management is one of the optional professional papers in the ACCA qualification. It is a fascinating – but tricky – paper, pitched at a ‘post graduate’ level. This means it’s harder than university finals! It’s no surprise that global pass rates are rather on the low side and hover around 30%. One way of boosting your exam score is to read the APM examiners’ reports, so here I’ve picked out four short extracts from their recent reports, to pull out some practical advice that can help you bag an APM pass! Extract 1 – The first step to passing APM is to have a good grasp of the basic knowledge: Both the Management Accounting and Performance Management papers feed into Advanced Performance Management. While you won’t be tested on the intricate details of these subjects, you will be expected to explain the main points and to be able to complete the relevant key calculations. Your checklist of assumed prior knowledge from those subjects should therefore include: • Major costing methods (marginal, absorption, activity-based). • Budgeting and variance analysis. • Decision making tools. • Transfer pricing policies. • Financial analysis. It’s worth spending a bit of time recapping these areas as they are all regularly examined in APM. Extract 2 – Advice to candidates is to answer the question asked. Candidates often answer a slightly different requirement from the one asked or simply ignore a part of the requirement (and thus the marks on offer): The examining team repeatedly state that many students simply do not answer the question that has been set. However knowledgeable you are, and however brilliant your answer, it will not score any marks unless it specifically addresses the question in the exam. There is a lot of information to cover in the questions (in APM you can expect to get anywhere between one and three sides of information about a case study organisation), so try reading more slowly, 24

maybe with your finger or pen to follow each word. Furthermore, while it is still a paper-based exam, you can highlight key words in the requirement and annotate key phrases in the scenario. Take care with the verbs in the requirement. For example, ‘explain’ means you need to make an idea clear and show logically how a concept is developed. Compare this to ‘criticise’ where you need to present the weaknesses/problems and evaluate the comparative worth of the proposal. You can find a list of the verbs the ACCA commonly uses on their website. Also watch out for questions in which you have to do more than one thing. For example, the specimen exam has a requirement to “explain the potential effects… and the company’s probability of failure”. Make sure answer both parts to score the full marks available. Extract 3 – Candidates need to be aware that performance management is an area which, at an advanced level, is dependent upon situation and environment, as exemplified by the need throughout the examination to relate or illustrate points by using the information relating to the business in the question scenario. A good, professional-level answer will go beyond the mere repetition of how a technique works and focus on relating it to the entity's specific environment: At the professional stage, there aren’t many marks for theory. The examiners state that theory alone will get you ‘between

Extract 4 – Candidates should be aware that well-structured, professional answers are essential to score marks: When taking this paper, it could only be a matter of weeks until you will be a fullyfledged chartered accountant! The ACCA want to know that you have ability to act in a professional way. This is why they award ‘professional marks’ in the exam. In APM, you will be asked to write a professional document, normally a report to the board. To get the professional marks, you need to give the report a title, a date, who it is to and from. Within the report itself, you should use professional language, tailored to the situation. You should aim for clarity and logical flow in your answer. Logical flow means tackling the issues in order, addressing one point at a time in a reader-friendly, logical sequence. Then, and only then move onto the next point. The report should have a brief introduction and end with a conclusion, which simply summarise the main points in the report itself. Make sure you have clearly stated any recommendation that you are making Of course, as with all papers, presenting your answer properly can make all the difference. Sub headings, concise but full sentences, and calculations with clear, cross-referenced workings are all important. Try to take pity on the marker and make your script as easy as possible for them to mark. They will reward you for it. PQ • Tom Bulman is AVADO’s Performance Management and Advanced Performance Management tutor PQ Magazine December 2018

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PQ ICAEW spotlight

All change for new year With a syllabus shake-up coming in January 2019, the ICAEW takes you through the changes to the Accounting learning materials and exam

ccounting practices are evolving, but the fundamentals remain the same. ICAEW has recognised this with the following changes to the Certificate Level Accounting syllabus for 2019. First, the syllabus weightings have changed to allow for core accounting issues in relation to revenue recognition and provisions to be covered in more depth. IFRS 15 will also be examinable from 2019. This will impact on how discounts allowed and discounts received are accounted for, with no separate accounts for these items maintained. However, the main change is that we acknowledge that businesses use computerised accounting systems to process transactions. You can therefore expect the following modifications: 1. There will be no reference to books of prime entry, as transactions are entered directly into and processed automatically by the system. 2. Suspense account errors (where debits do not equal credits due to single-sided entries), posting to the ‘wrong’ side of a nominal ledger account or mismatching figures will no longer arise. However, the suspense account as a ‘holding’ account where a business enters a

transaction until an appropriate ledger account is identified, can still arise. You will be examined on: situations where transactions have failed to be entered into the system; allocated to incorrect ledger accounts; or where an incorrect amount for a transaction is entered.

3. There will be no reconciliations between control accounts and individual receivable/payable ledgers as these are effectively maintained simultaneously using a computerised system. 4. Bank reconciliations will have fewer references to cheque-based payments to reflect their infrequent use as a means of payment. The ICAEW study manual and question bank, along with the online resources, are all updated to accommodate these changes and to prepare you for your exams in 2019. For more information visit icaew.com/examresources 2019 Learning Materials and Syllabus Each year, the syllabus and the learning materials are reviewed by the examiners. The syllabus aligns the learning materials and the exam questions, so the examiners ensure the learning materials have what you need for your exams. It’s therefore important you use the correct edition to study, as these reflect changes made to the syllabus, legislation and the way you’re assessed. Don’t forget the wealth of fantastic resources available on the ICAEW website. Here you can see the syllabus, questions in the practice software, errata and much more. Visit icaew.com/examresources to see all that is available to you. PQ Reproduced with the permission of ICAEW, this article was first published in Vital (October 2018)

derby.ac.uk/ACCA

UNIVERSITY OF BROAD HORIZONS

ACCA tuition led by PQ Magazine’s Public Sector Lecturer of the Year 2017 • Courses starting January for June 2019 exams • Revision classes in April/May - included in tuition or available independently • Learn from experienced professionals to improve your ACCA exam technique Find more information online or speak to programme leader Nagin Lad directly: n.lad@derby.ac.uk 26

PQ Magazine December 2018

profile PQ

Ricardo Pereira explains how the ICB qualification has opened doors for him Why did you choose to pursue a bookkeeping career? After a corporate career in business development I decided I wanted the freedom of running my own business. Having had some previous experience with bookkeeping, and coming from a family of accountants and bookkeepers, I decided to take out my Practice Licence with ICB, in order to set up my practice. I haven’t looked back since. The ICB qualification is really practical and now I’ve been in practice for a three years I’m ready to continue on to ICB Level IV. This will allow me to expand the services I can offer my clients. What size is your business in terms of clients and staff and do you see yourself growing this? I have four staff members, three part-time and one full-time, with around 70 clients between us. We’re now focusing our marketing efforts on growing the business further.

PQ Magazine December 2018

St r quality What is it like working for the BBC and your other film and TV clients? The TV and film industry is great to work in; being able to account for a production’s transactions and payments with very tight deadlines and ensuring that the production’s budget in on target. Working with production teams makes for an enjoyable environment, especially when you get asked to fly to other countries to work on location to process receipts and deal with all of the cash on behalf of the crew. Oh, and there is always the famous person you’ve not met before. What experience do you have working alongside accountants? All of my clients have accountants who I pass work on to, so I’ve worked with KPMG and some of the other big firms. Working with accountants has always been a good experience – we work really well together to ensure the client’s accounts are processed in time, without stepping into each other’s roles. Is accountancy all about the numbers or the

people? In my view accountancy is about the people – I work directly with all my clients, supporting their day-to-day activities. Numbers are obviously important, forming the basis of what we do, but if there is no involvement with the clients or their staff then sometimes the numbers may not make sense. What makes a good bookkeeper? Attention to detail, putting systems in place, understanding your clients’ requirements, going the extra mile and not forgetting the value you add by being “not just a bookkeeper, but an ICB bookkeeper”. Where do you see yourself in five years’ time? Hard to say, but I will either be working within my business overseeing the operation, or lounging on a yacht in the Caribbean. Accountants and bookkeepers are supposed to be boring. What do you do to dispel this image? I try to make it as easy and as fun to work with me as possible. My clients enjoy my sense of humour and dedication to their accounts; accounting is never boring and there is always so much to talk about. PQ • For information on the ICB’s Bookkeepers Summit go to https://tinyurl.com/y89zkv3z

PQ the workplace

COACHING COUNTS In part one of a two-part series, top tutor Ashim Kumar explains the importance of coaching for accountants

s our professional experience grows, we realise that critical though technical knowledge is, implementation of plans does not happen without the committed participation of the team. Plans are great, but teams make them happen (or not!). Globally, 60-70% of change projects fail to meet their objectives; six of the nine reasons for failure are people related. This costs business billions of dollars every year. These statistics clearly suggest that much more effort needs to be invested in making sure that we have the right people with the right skills in place to drive projects to success. Whether we are part of a team or leading one, it is critical that we and our colleagues all pull in the same direction and can bring the best we have to offer to the table. Coaching is an extremely powerful way to make this happen. It clarifies who we are, what we want and how to get it; and what is really important to us and why. Without the answers to these questions, how can we tell that we are in the right place, professionally or personally? If we are doing what resonates with our values and ambitions we will excel at it; otherwise, our performance will be sub-optimal and neither we, nor our colleagues in the team, will succeed. What is coaching? The term ‘coaching’ conjures up various images. Some visualise the athletic professional at the local tennis club, or the (not-so-athletic) coach of a football team. Others imagine a senior colleague at the workplace who guides less experienced staff to improving their skills; yet others see a technical expert imparting information on latest best practice. Executive coaching is none of these. To be clear, it is not about transferring skills and knowledge from expert to learner. Executive coaching is a powerful way of boosting performance through the intelligent use of exploratory questions. It can be thought of as ‘a

designed alliance’ in which the parties collaborate to release the coachee’s potential. How does it work? Few processes influence and change behaviour as effectively as coaching. According to a study of Fortune 100 executives “coaching resulted in a return on investment of almost six times the programme cost, as well as a 77% improvement in relationships, 67% improvement in teamwork, 61% improvement in job satisfaction and 48% improvement in quality.” Additionally, a study of Fortune 500 telecommunications firms showed that executive coaching resulted in a 529% ROI. “Impossible!” I hear you say incredulously. “How can simply asking questions produce such transformative behaviour and results?” The reason is simple... and complicated. Being asked the right questions encourages us to dig deep into our unconscious mind to uncover the complex triggers behind our behaviour (and therefore our current situation) and start to modify them. After all, before we can change something we must first become conscious of its existence. Coaching invokes thinking in the other person. It is transformational because it makes that which is unconscious, conscious. “Mumbo jumbo,” you mutter, “I already know how to think!” Much as we would like to believe that about ourselves it simply isn’t true. There is extensive evidence that demonstrates that the vast majority of our behaviours are reflexive; in

other words, we respond automatically (and without consideration) to situations that we face daily. There are many good reasons for this, and I would refer you to ‘Thinking Fast and Slow’, a book by Nobel Prize winner Daniel Kahneman, for a more detailed explanation. If we accept the premise that most of the decisions we make in life are arrived at without conscious thought, and that those decisions have resulted in our current situation, then we must conclude that not only are we solely responsible for where we are in life, but that we got here without thinking about it. A sobering thought that many of us would prefer not to consider. The US writer on character development, Earl Nightingale, put it best when he said: “If most people were to say what they were thinking, they would be rendered speechless.” Coaching influences us at conscious and subconscious levels. It targets unconscious triggers to understand and modify behaviours and change our reality. This is sometimes referred to as the performance gap – the difference between what a person knows and what they do. In other words, it encourages action to do what we already know to be the right thing. “That’s all very well, but how does the magic of coaching happen?” you demand. For the answer to this see part 2 of this article in the next issue of PQ magazine. PQ • Ashim Kumar is Certified Leadership Coach and tutor at fmelearnonline.com

PQ Magazine December 2018

careers PQ

Nail that SKYPE interview Skype interviews offer employers the benefits of a phone call with the advantages of assessing your interpersonal skills and body language, writes Ethan Cumming. Here’s six tips to help you nail your next video interview… 1. Dress to impress: Although you won’t physically be face to face you should dress as though you’re meeting your interviewer at the office. Dress to an appropriate level of formality to show you’re serious and to get in to a professional mindset. 2. Location: Take the interview in a quiet room with a neutral, tidy background – an unmade bed and

Life at cheapaccounting.co.uk Elaine Clark, aged ‘54 and ¾’, is the firm’s managing director, based in Cheshire. She has worked there for 11 years. Elaine has a degree from Leeds University in accounting and data processing. She is a co-founder of the group womeninaccountancy.com What time does your alarm clock go off on a working day? It doesn’t. I don’t use an alarm clock. My body tells me when it has had enough sleep. What’s the first thing you do when you get to your desk? Turn on my laptop, check emails and social media. What’s on your desk? Glasses (of the reading rather than drinking kind), laptop, paper and pen (I like to scribble). What’s the best thing about where you work? It’s at home with no commute. Where’s your favourite place for lunch? A local garden centre. What (or who) can you see when you sit at your desk? My road (hedges and gardens) and wheelie bins on rubbish collection day.

Which websites are your favourites and why? It would have to be my ‘go-to’ holiday websites where I pick up ideas for future sailing and walking trips. Which websites do you use for work? Mainly social media (Twitter, LinkedIn and Facebook). How many hours a week do you spend in meetings? Zero – I avoid meetings where possible. A quick chat sorts most things out, keeping meetings for new and exciting opportunities. What time do you leave the office? It varies, but usually around 6pm. How do you relax? I swim, walk and sail.

What’s your favourite tipple? Wine. How often do you take work home with you? Always – I work from home! What is your favourite TV show? Strictly Come Dancing – my bucket list ambition is to be on a ‘ordinary people’ version of the show, if ever there is such a thing. Summer or winter? Summer. Pub or club? Pub If you had a time machine, where would you go? Briefly to 2050 and then back to 1950. If you hadn’t chosen accountancy, where might you be right now? On a beach in the Caribbean, running a bar.

In brief pile of laundry won’t match the organisational skills you have listed on your CV. If you must have the interview in a public space let your interviewer know beforehand and use headphones with a microphone to reduce background noise. 3. Plan ahead: Eliminate possible interruptions and distractions – let your housemates know not to disturb you, get someone to watch the kids and chuck the cat out. Turn off your phone and mute any audible and visual computer notifications. 4. Avoid technical issues: Set up Skype with a professional username well in advance. Have a practice run with a friend to ensure your audio and camera are working properly. 5. Build rapport: This is especially important at the start of the interview. Eye contact, smiling and a positive attitude are key in building rapport and indicative of your general demeanour and energy. This is your first impression – make it count. 6. Handle tech issues immediately and coolly: If you can’t hear the interviewer because of a dodgy connection alert them and resolve the issue rather than run the risk of a misunderstanding. Don’t get worked up: you’ll show your prospective employer your ability to solve problems in a stressful situation – an important quality. • Ethan Cumming is Content Editor at Reach Work PQ Magazine December 2018

Retaining talent is key Public sector accountancy needs to be made more attractive to ensure that young talent stays and helps countries develop, says the African Union’s Assietou Sylla Diouf. She told delegates at a CIPFA international conference that accountants have become ‘key players’, and are helping to provide sustainability and growth in fragile states. The big problem is the lack of capacity, with many PQs heading straight for the private sector once they qualify. She explained: “It’s a big issue and as donors we spend a lot of money for people to get the skills

and then go off to the private sector.”

out-earned those working for one of the Big 4 firms.

Kerching! for BDO partners Partner ‘pay envy’ may have moved to medium-sized accountancy firms, following the announcement of new average salary levels at BDO. The firm recently said that profits had gone up by 30% to £109m. That meant BDO’s 196 partners will receive average pay of £531,000 this year. That beats the average pay per partner at KPMG, which was £519,000. It is being reported that this is the first time partners at a mid-tier firm have

Still worth going? Women who go to university are likely to earn 30% more than non-graduate women, says a new report from the Institute of Fiscal Studies. It found that female graduates were also more likely to settle down with a partner who also has a degree – described as a ‘fringe benefit’! It appears Durham University can lay claim to have the most ‘active’ marriage market, with 72% of its students pairing off, compared with a rate of 18–20% at other universities.

The PQ Book Club: books you should read UK Taxation: a simplified guide for students, by Mark Hunt and Malcolm Finney (Spiramus Press, £29.95) This book is a cornucopia of tax knowledge that every PQ specialising in tax should own. It is written in a user-friendly manner, interspersing numerous examples throughout the text, designed to illustrate particular points. It covers the five main UK taxes: income tax, capital gains tax, corporation tax, VAT and inheritance tax. National insurance is also included.

Although this book is primarily aimed at students studying at undergraduate level, these are the taxes which typically form the core of the syllabuses for most of the UK’s professional exams in taxation. Authors Hunt and Finney – both vastly experienced paractitioners in the world of tax – maintain that the subject is not difficult. The problem, however, is that too many tax textbooks are written in complex language. They tend to introduce the reader to too

many new facts at the same time, leaving them confused. This book avoids this. The language is simple and each new topic is followed by an illustrative example. Also, it assumes no prior knowledge of the UK tax system, so will appeal to all levels of studier. PQ rating 5/5 As the man once said, tax doesn’t have to be taxing. 29

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

REFS 1, HMRC 0 BARBED WIRE OR TAX? The Premier League referees’ body has won a court ruling against the taxman after successfully arguing that match officials should be regarded as being self-employed. HMRC had wanted to claim that the 60 referees should all be regarded as employees of the Professional Game Match Officials Limited (PGMOL). That would mean the body paying PAYE, NIC and even pension contributions. The argument that clinched it was that referees are not under the body’s control during matches.

“Stupid and short-sighted”. That’s how TV star Graham Norton described rich people who avoid paying tax. He recent revealed financial advisors offered him schemes that would have helped him pay less tax and he turned them all down. Norton said you see even billionaires going to incredible lengths to dodge tax; they would still be mega rich if they paid and

would be living in a much nicer country. He went on: “One where people were looked after, where crime was less, where housing was better and people were better educated. And the money you’ve saved on tax you’d probably just have to use to pay for barbed wire around your property.” That to him is totally wrong-headed.

BANK TAKING NOTE

If £500 is a monkey and £25 is a pony in English slang, what’s is £50? Well, we are reliable informed it’s a bullseye! After a public consultation on the future of cash and digital payments the denomination is safe. Fears over it being the note of choice for drug dealers and hidden economy activity led to HM Treasury proposing it be scrapped. Now it is saved all the talk is who should be then new face on the new polymer edition, and over 50,000 people have signed a petition for England footballer Harry Maguire riding an inflatable unicorn to be that new face!

’ WEV E

AUDITOR LOVE

Despite the criticism of auditors there appears to be one group that still love them – shareholders! Analysis of AGMs in 2018 by Equiniti has found that the average votes in favour of re-appointing an auditor range from 97.6% to 99.5% across the FSTE 100, 250 and All-Share Index.

PEN FRIEND How often do you get your writing stick out? Well, according to a recent survey, two-thirds of young adults claim to use a pen less than five times a week. On top of that, the survey in question found more than a quarter of respondents preferred emojis to words when expressing their feelings. With this decline in old-school writing, the dependence on spell-checks has gripped around half the population, with even more admitting to deteriorating handwriting as well. Although many state that they would love to receive a letter, they claim they are either too busy to write a letter or do not know how to correctly format one. The pen may have managed to wage war on the typewriter and computer, but it seems it’s finally losing the fight to the smartphone generation.

GOT THE L OT

PQ Book Club pick ‘n’ mix special

Christmas sweater kit just for you

Google Home Mini

Sticker yourself calm

There are stacks of books up for grabs in this month’s lucky Christmas dip. Each winner will get one book from the following: ‘Pawan The Flying Accountant’; ‘The Accidental Apostrophe’; ‘How to have a great life, 35 surprisingly simple ways to success’; and ‘The Pacesetters – the British accountancy firms reshaping their industry’. Send your name and address to be entered for this lucky dip. Remember to head up your email ‘Pick and mix’ and send it to graham@pqaccountant.com.

We have a small and mighty Google Home Mini up for grabs this month. You can ask it questions. Tell it to do things. It’s never been easier to get hand-free help in any room. Your mini can also set alarms and reminders (like do some revision!), find out travel details and get the news. To be in with a chance of winning this great giveaway just head up your email ‘Google mini’ and we will do the rest. Please provide your full name and address with the entry. So we can send you your prize if you win. Email graham@pqaccountant.com.

There is no need to buy a new jazzy Christmas sweater – get one of our ‘Create your own Christmas Sweater Kits’ instead! They will turn any plain jumper into the best ‘ugly’ Christmas jumper ever. We have three kits to give away, and they include Xmas text letters, assorted felt shapes and even some pom-poms and ribbons. It is sure to make the office Christmas party go with a bang! If you would like one of these kits then send an email to graham@pqaccountant.com and head it up ‘Christmas already’. We need an address so we can send you your prize.

Forget the ‘colour me’ craze, it’s stickers that you need to help you feel calm. Stickering really is a creative activity that will help you relax and find a more positive frame of mind. This book is full of sticker-by-number artworks that can even be cut out and framed after you have finished them. Each artwork is also complemented by inspirational text and you can either follow the code or go off-grid – the choice is yours. We have three sticker books to giveaway, so send your name and postal address to enter. Remember to head up your email ‘Stickers’ and send it over to graham@pqaccountant.com. It really is that easy.

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 7 December. The main draw will take place on Monday 10 December 2018.

TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM 30

PQ Magazine December 2018

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