PQ magazine, February 2022 by PQ magazine

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February 2022

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UNDER PRESSURE TO BEHAVE BADLY

More than a quarter of professional accountants (27%) say they have been put under pressure or felt under pressure to act in an unethical way over the past three years, a CCAB survey has found. Many respondents said this constant coercion had had a detrimental impact on their mental health, triggering episodes of anxiety, depression and stress. A majority of respondents who reported feeling under pressure to act unethically said pressure came from internal sources such as line managers or those in director-level roles. Some 18% cited pressure from clients, and a further 10% said pressure came from their board, council or cabinets. Among the unethical activities respondents felt pressure to engage in were preparation of overly optimistic budgets, business cases and forecasts; categorising personal expenses as business expenses; and side-stepping financial policies and regulations.

The CCAB, which brings together five professional accountancy organisations in the UK and Ireland, carried out a snapshot survey of accountants working across all sectors recently to take the ethical temperature of the profession. Of those who said they had been put under pressure to act unethically, almost 80% spoke up

against the unethical action. Two-thirds (65%) did not carry out the unethical task; however, 10% carried out the task fully and 25% said they did so partially. Some 88% of those surveyed also said that ethics training should be a mandatory part of CPD, and some 51% said this should be undertaken each year. Commenting on the findings, Iain Lowson, chair of the CCAB Ethics Group, said: “Ethics is at the heart of being a professional accountant and it’s important to regularly take the ethical temperature of the profession. This informal survey provides a useful snapshot of the current context. “It is clear ethical pressures are a real problem for a significant number of accountants and it’s concerning to see so many reports of a negative impact on mental health. “On the other hand, it is encouraging that so many accountants feel empowered to speak out against unethical pressures and practices and Continued on page 4

ICAEW and CIPFA look to ‘work closer’ CIPFA and the ICAEW have admitted that they are looking at opportunities of working closer together. Could this be the start of new merger talks? A joint press release says: “The vision driving the discussions would see ICAEW and CIPFA combining their strengths and resources to better equip them to serve the public interest across all areas of economic activity, including the enterprise, public

and third sectors.” And in a joint statement, ICAEW Chief Executive Michael Izza and CIPFA Chief Executive Rob Whiteman said: “We believe there is significant strategic benefit in our two bodies working more closely in the future and our discussions will examine ways of achieving that.” ICAEW and CIPFA will now conduct further discussions with the aim of bringing forward

proposals in 2022. An ICAEW press spokesperson said: “Any outcome to these talks will be subject to approval within ICAEW, as appropriate and necessary under our governance requirements, but at this stage we do not believe that the nature of the relationship with CIPFA under discussion would require an ICAEW membership vote.” This is not the first time a ‘coming together’ has been

attempted. In 2005, a merger was voted down after an ICAEW membership vote fell short of the necessary majority – by just one percentage point. Some 65.7% of ICAEW members voted in favour of a merger, but it needed 66.7% to go ahead. CIPFA members voted overwhelmingly for a merger, with 86.7% in favour. Then in 2007 the two signed a memorandum of understanding, but that seemed to fizzle out.

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February 2022

IN THIS ISSUE A note from the Editor Welcome to February’s issue of PQ magazine, jammedpacked as usual with lots of great stuff! This month we asked six leading accountancy body CEOs for their thoughts on what will happen in 2022 (see pages 18 and 19). Where else can you read what Helen Brand, Michael Izza and Andrew Harding all think? That’s part of our uniqueness – bringing the whole accountancy family together. We believe this will be happening more and more as the professionals joins to solve the big issues – like the small matter of saving the planet! Although we should point out the ICAEW and CIPFA are looking to work closer they aren’t calling it a merger just yet. We also have our review of 2021 (see pages 30–33). January 2021 started with outages at ACCA exams and a petition to bring back paper manuals, and the year ended with students being told to sit their exams in exam halls and a new accounting sustainability standard setter. Don’t forget to enter the PQ awards – we’re want your nominations. Remember, you have to be in it to win it. There’s lots of shiny PQ trophies up for grabs, just check out the categories on page 17. You can download the nomination form at https://tinyurl.com/2p8krcfd Graham Hambly, Editor and Publisher, PQ magazine News 04 CIMA pass rates Better news this time for P paper sitters 05 Sustainability ISSB appoints first-ever chairman 06 AAT pass rates Lowest pass rates yet for the Advanced and Professional Diploma Synoptic assessments 08 Study stats 175,000 PQs have been studying more than five years, says FRC report 09 New chair for watchdog? Government names Jan du Plessis as its preferred candidate for top job at the FRC

10 Back to Basics Have you checked out our great range of tuition videos? You really should, you know! 12 Tech news When it comes to technology, what will be hot in 2022? Deloite spills the beans... Features, etc 14 Have your say How we can help save the planet if we all pull together; annoying exam jargon; and exam typeface torment. Plus our social media round-up 17 PQ awards 2022 Get your nominations in now for accountancy’s top awards

18 What’s ahead in 2022 In another PQ exclusive, the CEOs of the main accountancy bodies tell us whay they expect in 2022

p17

20 ACCA pass rates How bad (or good) were the December exams for you? Were you driven to bingeing on Nutella sarnies? 22 CIMA spotlight How to best manage your time when it comes to exams, work – and life 23 A Master’s degree Boost your prospects by getting a Master’s degree – in just nine months 24 New CIPFA codes What are the new Prudential and Treasury codes? We explain all 25 Keep it Simple In the latest in his series exclusively for PQ, Neil Da Costa looks at IHT issues 27 A question for Tom Top tutor Tom Clendon answers a question on non-controlling interests

p22 38 ACCA APM exam Why ‘evaluate’ and ‘justify’ are such important words in this paper 39 Limiting factor analysis How to apply limiting factor analysis to services 40 ACCA spotlight Why all students and members should unite to find climate change

28 CIPFA spotlight What does the future hold for the public sector in Britain?l

41 Careers Answering standard questions in an interview; some more wise career advice; and our book review

29 AAT pass rates Check out the latest set of pass rates, hot off the press

42 Fun The lighter side of life; and more great PQ giveaways

30 PQ’s review of the year We take a look at the highs and lows of accountancy in 2021 34 AAT exams #1 All you need to know about partnership appropriation statements and current accounts 36 AAT exams #2 Suspense accounts questions will appear in the Level 2 Bookkeeping Controls assessment, so here’s our take on it

The columnists Lisa Nelson Learning will take on a new dimension in the Metaverse 4 Robert Bruce Why the world needs more auditors 6 Prem Sikka Insolvency is the profession’s ‘wild west’

Anna Kate Phelan Trying to stay focused in these tough times 10 Vikki Bean Helping SMEs comply with digital tax reform 12

p20 p25

To subscribe go to www.pqmagazine.com ADVANCE YOUR CAREER IN ACCOUNTING www.e-careers.com (accounting) PQ Magazine February 2022

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PQ the

LISA NELSON Learning in the Metaverse

In October 2021 Mark Zuckerberg announced that his empire, which includes Facebook, WhatsApp and Instagram, would be known as Meta. He also unveiled plans to invest $5 billion and hire 10,000 technologists to build the ‘Metaverse’. He describes it as “the next generation of the internet”. The Metaverse is a virtual space created by combining physical reality, augmented reality (AR) and virtual reality (VR) to enable users to connect remotely, usually in the form of an avatar. It’s like the internet in that you can meet people, listen to music, share videos, etc., just a far more immersive experience. To give you some idea as to the scale, in 2021 Ariana Grande used Fortnite to deliver a live virtual concert to 78 million fans. The pandemic has exposed more learners to online and although some still prefer face to face tuition, many now consider online just as good. This shift in preferences makes a step into the Metaverse for learning an increasing possibility. Metaverse learning may emerge in the form of an online campus or lectures with 3D simulations. As for now, we are still in the exploration stage of what it might look like but virtual 2D campuses already exist and if the pandemic has taught us anything, it’s that change can happen very quickly when the right conditions present themselves. Lisa Nelson is Director of Learning at Kaplan

CIMA ‘P’ papers pass rates rise CIMA PQs will be pleased to hear that those sitting the dreaded ‘P’ papers are achieving better pass rates, according to the latest pass rate data. Last time PQ magazine reported on the pass rates P3 had slumped to 44%, but now it’s back up to 54%. The P1 and P2 pass rates are also better this time around. P1 has jumped from 48% to 51% and P2 has risen from 50% to 51%. The rates cover between 1 November 2020 and 30 November

2021 and show outside the ‘P’ papers the lowest pass rates are in F3 at 55%, and F2 with a pass rate of 57%. Then there is a big jump to E3 where 72% passed, and F1 with a 79% pass rate. E1 with 80% and E2 with 87% are the two papers with the best OT pass rates. The case study pass rates also held up very well in August. Operational was back up above 50%, after the 46% pass rate achieved by May sitters. Stephen Flatman, Vice President,

Examinations – Management Accounting, said: “As another challenging year came to an end, I’m delighted to see that our students’ overall exam performance remains excellent. They’ve achieved some great results and have worked hard to progress their CIMA studies and achieve their career ambitions.” CIMA CASE STUDY PASS RATES Aug May Feb 21 21 21

Nov 20

Operational

53% 46% 60% 53%

Management

68% 69% 71% 74%

Strategic

69% 68% 67% 69%

CIPFA is awarded a ‘Good’ provider rating The Office for Standards in Education, Children’s Services and Skills (Ofsted) has awarded CIPFA a ‘Good’ rating for the apprenticeships it provides. The rating follows CIPFA’s first full inspection by Ofsted, in November 2021. Ofsted’s report highlighted many of CIPFA’s strengths, including its “very strong commitment to responsible stewardship of public money”. The inspectors also noted that there was a sense of pride among

students and employers in being associated with CIPFA, and how the relationship between the three parties was very effective. The report said: “Work-based learning coaches provide good support to apprentices to help pace them through their studies. Coaches liaise effectively with employers to make sure that over the course of the programme, apprentices gain broad and relevant experience, linked to what they learn.”

Under pressure to behave badly Continued on page 4 that so many respondents say they promote an ethics-based culture in their organisations. “Accountants’ professional membership bodies are useful

sources of training, advice and support and each will have their own Code of Ethics based on the International Ethics Standards Board for Accountants (IESBA). We would urge any accountants

Meet Nick Showering, 31, a star of the latest series of The Apprentice on BBC. After working for his family business, qualified accountant Nick hopes to make a name got himself in the drinks industry with his line of flavoured water. Considering himself a “people person who is lots of fun”, Nick’s plan to beat the competition is to “kill them with kindness”. He went on: “In business I’m a bit of a force to be reckoned with. I know what I’m talking about, I know how things work and I’m extremely experienced. So, I’m a bit of an animal in the boardroom.” who feel exposed to ethical pressures to approach their professional body for support and to refresh their knowledge of the relevant code.” To check out the full results of the survey go to: https://www.ccab.org. uk/ccab-ethics-survey-2021/.

In brief Pap The year ahead – the predictions! PQ magazine has got all the CEOs of the major accountancy bodies to look at the year ahead (we can do that!). This year will see the introduction of major reforms the audit process, and ICAEW’s Michael Izza does not want this to be another missed opportunity. Over at the ACCA, Helen Brand believes accountants need to help to create a world that works for everyone. CIMA’s Andrew 4

Harding said you need to go beyond your technical comfort zone and Sarah Beale at AAT stressed despite the year many of us have just had there is also cause for celebration. Check out what your CEO had to say on page 18 Pap Tomorrow’s world today Does the future look bright for accountants? Well, one way to find out is to check out our one-day conference with LSBU, which can be viewed on YouTube

at https://tinyurl.com/4bckrv9n. Will tomorrow’s accountant be a green accountant? You will have to watch to find out. Over 300 people have already visited the conference online since 24 November last year. Pap CIPFA’s Public Finance Live The ACC Liverpool will be the venue for this year’s CIPFA conference, on 13-14 July. Public Finance Live returns to ACC Liverpool following two tumultuous years since its last

face-to-face conference. The annual conference will be taking place at the midpoint of the current UK electoral cycle, set against the background of the pandemic, continuing Brexit fall-out and re-negotiations and, of course, the severe and growing challenges of the global climate emergency. Wednesday is the student conference day, and is free for CPFA students. To sign up go to https:// publicfinancelive.org/delegatepricing/ PQ Magazine February 2022

news the PQ

ISSB begins to take shape Emmanuel Faber (pictured) has been appointed to serve as the first-ever chair of the International Sustainability Standards Board (ISSB). The appointment follows the announcement at COP26 in November last year about the creation of the ISSB – which consolidates the Climate Disclosure Standards Board and the Value Reporting Foundation. The ISSB will develop, in the public interest, IFRS Sustainability Disclosure Standards that provide a global baseline of disclosure

requirements designed to give investors high-quality, globally comparable sustainability information. The ISSB will work in close cooperation with the International Accounting Standards Board (IASB) to ensure connectivity and compatibility between IFRS Accounting Standards and IFRS Sustainability Disclosure Standards. Faber has significant global

ACCA and IIA renew MOU ACCA and the Institute of Internal Auditors (IIA) have renewed their memorandum of understanding for another three years. The two bodies have been collaborating for a number of years, and one key benefit allows ACCA members to sit a challenge exam, so they can achieve the IIA’s Certified Internal Audit

(CIA) designation. The CIA is the only globally recognised certification for internal audit practitioners, and since 2015, more than 5,000 ACCA members have sat the exam. The organisations said they will continue to cooperate on research and thought leadership on topics such as diversity,

experience, having lived in and held senior leadership positions across four continents: Africa, the Americas, Asia and Europe. He founded and chairs several international organisations and initiatives, including the One Planet Business for Biodiversity coalition and the G7 Business for Inclusive Growth coalition – co-chaired with the OECD Secretary General. governance, cybersecurity and ESG (environmental, social and governance). Helen Brand, chief executive of ACCA, said: “We’re delighted to be signing this new MOU with the IIA. We believe that we can develop research together that resonates with a global audience of finance professionals across different disciplines. We already have strong links with The IIA and we look forward strengthening those in a range of areas for the benefit of our memberships.”

Mazars fined £250,000 One of the UK’s biggest accountancy firms, Mazars, has been fined £250,000 for its failure when auditing a local authority’s 2019 financial statements. The Financial Reporting Council said it found failures in the reviewed audit, which it considered “fell far short of the applicable standards and regulations and had the potential to undermine confidence in the standards in general of registered auditors”. The most significant failing was in respect of the PPE valuation, where there was insufficient and undocumented challenge of the accounting treatment for refurbishment costs in the valuation of the authority’s dwellings which could indicate a material overvaluation. Other areas of concern included the first-year independence, group oversight and quality control.

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ROBERT BRUCE Why the world needs more auditors

The clarion call that “we need more auditors, not fewer” is unlikely to have had members of the public jumping up and down and throwing their hats in the air. Sadly it was ever thus. No one has ever upped their social position by introducing themselves to a stranger at a party and saying that they are an awfully good auditor. The idea that we need more auditors came from Kevin Ellis, chief chap at PwC, in the lost days between Christmas and the New Year. He was trying to explain the importance of audit and the dangers of vilifying it as a profession. All of which is true. In the difficult economic times ahead the skills of pure audit, of financial accountability and corporate governance, are going to be ever more needed. But the widening arena across the whole field of climate-related information, for example, needs many more skilled and experienced auditors. Traditionally, early skills gained in the audit field have been the gateway to other finance career paths. But for many, gaining an understanding of different types of businesses and their different forms of financial management, has become an enriching journey. Holding the ring between overconfident directors and those who demand probity has always been complex. Extending that mandate to Greta Thunberg and friends means more effort, not less. In short, more auditors, not fewer. Robert Bruce is an award-winning writer on accountancy for The Times

PDSY and AVSY pass rates ‘still low’ The latest AAT pass rates show the Advanced and Professional Diploma Synoptic assessments now have the lowest pass rates, at 54.6% and 59.8% respectively. However, the newly compiled worldwide pass rates show a slight improvement in the Introduction to Business and Company Law pass rate. It was 57.8% last time out, but has risen to 61.9% this time around. FSLC also jumped, from 65% to 67.9%. One professional assessment that still seems to be a particularly big challenge for sitters is Management Accounting: Decision and Control, where the pass rate was 62.8%. Both examiners and tutors will also have to keep an eye on External Auditing – the pass rate here has

dropped from 72.5% to 68.6%. Despite the ups and downs of individual assessment pass rates the overall CBA rates remain the same. The Professional pass rate is 68.4%, at Advanced it is 74.9%, and for Foundation the rates are 84.6%.

When it comes to distinctions, these are still hard to get for those completing the Professional Diploma in Accounting. Just 3% of PQs who passed the diploma were also awarded a distinction. You can check out the pass rates on page 29.

Time to nominate for the PQ magazine awards We need your nominations for the PQ magazine awards 2022. If you want to get shortlisted for the best accountancy awards around then you need to get your application in. There are lots of categories up for grabs. A new

category has also been added this year – ‘Graduate/ Apprentice Training Programme of the Year’. Our old favourites are also there, including ‘PQ of the Year’, ‘Apprentice of the Year’ and ‘Distance Learner of the Year’, to name but a few. Check out the full list of

categories on page 17. We know a nomination for the PQ awards can really help your CV stand out, so download the form today and get nominating – go to https://tinyurl.com/2p8krcfd. The deadline for entries is Friday 18 February 2022. But please don’t leave it to the last minute, and remember you can’t win it if you aren’t in it!

ICAEW November pass rates The ICAEW advanced level pass rates are out. In all, some 5,000 ACA PQs sat the November tests, and they achieved the following pass rates: Case Study 80.5%; Corporate Reporting 80.3%; and Strategic Business Management 85.8%. PwC Milton Keynes trainee Ho Kwong Chris Chung was awarded first place and the Peat prize.

Drilling down into the stats shows that the pass rate for those sitting just the case study was 85%. In stark contrast, those sitting just Corporate Reporting achieved a 51.8% pass rate. Meanwhile, the pass rate for those sitting Corporate Reporting and Strategic Business Management together at this sitting was 81.4%.

Check out all the feedback from the December sitting on page 20

services, internal operations and systems and the launch of CIPFA’s refreshed professional qualification. CIPFA CEO Rob Whiteman said: “Last year we delivered a £3m trading surplus, and I’m pleased to see that CIPFA is on course for another excellent trading year, similar in scale to last year’s record trading surplus.”

Some 763 sitters sat all three final papers. Of these, 73% passed them all and 18% failed all three.

In brief Pap How bad were the ACCA December exams? The SBR December sitting certainly stood out this time around, as many sitters described the paper as a ‘disaster’. Students wanted to know why there was a whole question on cryptocurrency when there is no standard on them yet. Many PQs admitted they resorted to comfort eating when they got home. One sitter ended up eating a whole packet of Tunnock’s chocolate wafer bars. Another went one step further with not one but four Nutella sandwiches! 6

Pap CIPFA performing well The Chartered Institute of Public Finance and Accountancy is set for another strong trading year and is forecasting a surplus in excess of budget for the second year running. At its December meeting, CIPFA’s governing Council approved the institute’s Business Plan and budget for the 2022-25 period and is targeting investment in improvements to products and

Pap Member expelled Member Oliver Godfrey of Huntingdon has been expelled from CIMA, after he removed

£155,000 from a company account and £190,000 in Bitcoin. A month later Godfrey returned the monies and the Bitcoin. The disciplinary committee concluded the only appropriate and proportionate sanction was expulsion. The Committee recognised that this might result in financial hardship for the respondent, although he appeared to be pursuing a new career. Also, in his email to the Institute on 10 August 2021 Godfrey stated: “I have suggested that expulsion is appropriate.” PQ Magazine February 2022

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Five years’ time

PREM SIKKA Insolvency is the ‘wild west’ in need of a sheriff The government’s proposals to end self-regulation for the insolvency industry are most welcome. Some 1,570 insolvency practitioners (IPs), mostly accountants, are regulated by four bodies known as the Recognised Professional Bodies (RPBs). These are the CAI, ICAEW, ICAS and the Insolvency Practitioners Association. These trade associations have no independence from their members. Conflicts of interests are inevitable. The current structure inevitably results in duplication, waste and obfuscation. RPBs are excluded from the freedom of information law. A recent Parliamentary report described the industry as the ‘wild west’. It noted “the willingness of IPs to sell their independence, and their considerable powers, in return for an appointment to an insolvency case… IPs view their court appointed powers as little more than a commodity to be sold to the highest bidder”. There is no urgency to rescue firms or conclude insolvencies – 7,962 insolvencies have been running for five to nine years and remain incomplete; the number running for 10-14 years and not completed is 3,642; 14,328 have been running for more than 15 years, enabling IPs to collect fat fees. There are no inquiries by the RPBs into delays or excessive fees. In the last decade, around 8,000 complaints about abuses have been lodged with RPBs. Only five IPs have had their licenses revoked. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

Some 174,416 accountancy students have been studying for over five years to get qualified. That’s 30% of all the students signed up with ACCA, CIMA, CIPFA, ICAEW, CAI, ICAS and AIA. That figure is up slightly on the year before. The figures, compiled by the Financial Reporting Council, show there are currently 587,441 students studying with the seven bodies based in the UK and Ireland.

ACCA may have the most students still studying with them after half a decade at 133,178, but at 30% this isn’t the

biggest percentage. Some 48% of CIPFA students (2,554) are still trying to get qualified five years after starting their journey. At CIMA the figure of 33,294 represents 33.7% of all its students. But the highest percentage is students signed up to the AIA – over half its students (2,738) are still students after five years.

The concern must be that the percentage of students now studying over five years has increased at all the bodies, the pandemic might be the culprit here. The accountancy body with the lowest percentage of students still studying after five years is the ICAEW. Just 5% of its students are still studying after this time. At the CAI, the Irish institute the figure is 8.9% and at ICAS it is 10%.

TIME REGISTERED AS A PQ IN YEARS ACCA

CIMA

82,039

19,230

CIPFA 683

ICAEW 8,846

CAI 1,789

ICAS 917

AIA 215

113,719

TOTAL

1>2

80,959

17,602

728

7,988

1,697

911

427

110,312

2>3

58,989

12,177

626

6,393

1,575

716

548

81,024

3>4

46,744

10,177

200

4,876

1,264

620

646

64,527

4>5

33,179

6,353

489

1,956

367

292

807

43,443

133,178

33,294

2,554

1,597

660

395

2,738

174,416

TOTAL

435,088

98,833

5,280

31,656

7,352

3,851

5,381

587,441

NatWest fined £264m over AML failures You have black bin liners full of cash, so where do you take it? Well, for one Bradford jeweller the answer was easy – NatWest Bank! Over a five-year period, jeweller Fowler Oldfield deposited £365m including £264m in cash. The sums were so large that one bank with two floor-to-ceiling safes was not big enough. Concerns were raised particularly over the large number of ‘musty smelling’ Scottish notes. It was suggested they had been stored under floorboards somewhere! Despite staff raising concerns no appropriate action was taken. NatWest pleaded guilty of

three charges of failure to comply with anti-money-laundering regulations. At Southwark crown court, Mrs Justice Cockerill fined the bank £264,772,620, ordered it to pay an additional £4,297,466 in costs, and made a £460,047 confiscation order. She said: “… it must be borne in mind that although in no way complicit in the money laundering which took

place, the bank was functionally vital. Without the bank – and without the bank’s failures – the money could not be effectively laundered.” It is the first time a financial institution has faced criminal prosecution by the Financial Conduct Authority (FCA) under anti-money-laundering laws in the UK.

becoming fairer, greener and more prosperous. So, what are the new Scottish Income tax rates for 2021 to 2022, if you have a standard Personal Allowance of £12,570? Here they are – see left.

of Taxation (CIOT). The Government publishes Tax Information and Impact Notes (TIINs) to explain policy objectives together with details of the impact of a tax policy on: the Exchequer; the economy; individuals, households and families; business and civil society organisations; equalities; HMRC and other parts of government; and any other impact. There is, however, no mandatory requirement to show whether environmental impacts have even been considered.

Taxwatch Pap Scottish Budget Ending Scotland’s contribution to climate change, tackling inequalities and investing in the economy and Scottish public services were at the forefront of Band Personal Allowance Starter rate Basic rate Intermediate rate Higher rate Top rate

the 2022-2023 Scottish Budget unveiled in early December. Finance Secretary Kate Forbes is hoping the Budget will accelerate Scotland’s Covid-19 recovery and help transition the country towards

Taxable income Up to £12,570 £12,571 to £14,667 £14,668 to £25,296 £25,297 to £43,662 £43,663 to £150,000* Over £150,000*

Scottish tax rate

*There is no Personal Allowance for people who earn over £125,140. 8

0% 19% 20% 21% 41% 46%

Pap Treasury needs ‘net zero’ approach The Treasury should report on the environmental impact of each of its tax measures to help ensure the UK meets its ‘net zero’ 2050 targets, says the Chartered Institute

PQ Magazine February 2022

news PQ

Is accountancy fair? accelerAATe your career with the AAT student conference Fairness and gender inequality in the accounting profession is the topic of new research by Professor Kathryn Haynes, from Northumbria’s Newcastle Business School. Funded by the Leverhulme Trust, she will be building on her existing research in the field of gender and accounting. Professor Haynes’ research, entitled ‘Contemporary Feminisms and their Emancipatory Implications for Accounting’, will explore systematic inequalities, both in the accounting profession and in the accounting practice itself. She said: “I hope to generate findings that will be both definitive and impactful in the accounting field and of interest to other disciplines. What we choose to measure or not to measure, such as a person’s labour and other ways they contribute to society, can leave many feeling undervalued – and often underpaid. It is a global issue for the accounting profession and resonates particularly with feminist theories. I am keen to help address these issues in any way I can through my research.”

PQ Magazine February 2022

AAT wants to help you start the new year in top gear, with its first-ever student conference. The free-toattend three-day event starts on Wednesday 26 January. It’s a chance to meet the AAT’s new CEO, Sarah Beale, as she will be discussing how completing her AAT qualification helped her to progress in her career. There are also sessions on AQ2016 vs Q2022, study support tips, and how to be assessment ready.

Steven Drew, Head of Markets and Products at AAT, said: “With all the challenges of the last two years, for many of our students their studies may have taken a back seat. However, our new AAT Student

Conference will help them tackle their studies and assessments with confidence and build a successful career in accounting. Students who attend the conference will also receive valuable advice on assessment techniques, CVs and interviews, updates on qualifications timelines, and can find out more about where studying with AAT can take you.” To sign up go to https://tinyurl. com/42h2rxh7

Jan du Plessis named as preferred candidate for FRC chair Business Secretary Kwasi Kwarteng has named Jan du Plessis (pictured) as the government’s preferred candidate to become the new Chair of the Financial Reporting Council (FRC). Du Plessis has led a number of FTSE 100 companies, most recently serving as chair of BT Group. Prior to that role he was chair of Rio Tinto, the international mining group, and of SABMiller, the multinational drinks company. As chair of the FRC he will play a crucial role ensuring high standards of governance and transparency

among the UK’s largest and most important businesses. He will be charged with driving forward the ongoing transformation of the FRC into a new, stronger regulator with more powers to hold companies to account – the Audit, Reporting and

Governance Authority (ARGA). Du Plessis’s nomination follows an open competition for the post. The Secretary of State has invited the Commons Business, Energy and Industrial Strategy Committee to hold a pre-appointment scrutiny hearing and to report on Du Plessis’s suitability for the post. This is in line with the government’s commitment to strengthen the role of Parliament in scrutinising major public appointments. If formally appointed, Du Plessis will serve a four-year term in the role.

PQ the news

ANNA KATE PHELAN Staying focused is not easy in these tough times I am sure you’ll all be experiencing the resurgence and proliferation of Covid 19 in all of our lives. The science suggests the Omicron variant is far more transmissible than its predecessor Delta, which appears to have translated into many of us either having Covid, or knowing many colleagues, friends, and family members who have contracted Covid. The exponential rate of transmission was palpable this time as many of us went about business as usual (shopping, socialising, etc.) without the preventative measures that had been in place in previous months, and it seemed as though one moment Boris was introducing us to Omicron via slides, then the next many in our social circles had come down with Covid symptoms. Thankfully, the science currently suggests that the Omicron variant is more likely to affect the throat and not the lungs, meaning it is less deadly than previous variants. Additionally, 90% of the population have received at least one dose of the vaccine, meaning we are far less likely to see the wave of horrific hospitalisations that occurred previously. Firstly, and most importantly, I am hopeful that this wave of the pandemic has not affected you or your loved ones adversely and wish you all the best. Secondly, I hope that the rise of Omicron has not affected your studies in a major way, I understand it can of course be impossible to revise when you or loved ones are poorly; sending good vibes your way! Anna Kate Phelan is Senior Product Manager at Eintech

Back to Basics – check out our video series PQ magazine has joined forces with some of the country’s top tutors to produce our Back to Basic video series. The aim is to provide short, sharp videos of key topics that student ‘must know’! Training Link’s Michelle Baker (pictured) has provided two videos for the series – one on creating the trial balance and another on VAT calculations. Baker explains in her six-minute trial balance video that before you complete one you need to understand why you are doing it and what its purpose is. She shows you how to complete the balance from a list of balances and how you determine which balance is a debit and which is a credit. She then looks at completing a trial balance from a

‘Study drugs’ now rife on campus The use of performance enhancing ‘study drugs’ has become routine at leading British universities, according to an investigation by The Times newspaper. It was told by students and recent graduates from Oxford, Edinburgh, Nottingham and LSE that pills to help prepare for exams and hit essay deadlines were available for £2 a pop. University UK is planning its own study of drug use on campuses, and study enhancers will be

included. The Times said that currently no university in Britain explicitly bans cognition enhancers, although Edinburgh explained that the consumption and sale of such drugs breached its code of student conduct. Its students are not allowed to use any ‘unfair means’ in assessments. A survey conducted in 2020 found that one in five (19%) of students had used cognition enhancers. One of the drugs of

Bradley Cooper in Limitless, in which a drug enhances cognition.. choice is Modafinil, which has never been tested for the effects of long-term use on healthy people, stressed The Times.

HMRC gives Self Assessment taxpayers extra time HMRC is waiving late filing and late payment penalties for Self Assessment taxpayers for one month – giving them extra time, if they need it, to complete their 2020/21 tax return and pay any tax due. HMRC is encouraging

Step-up for future tech leaders Deloitte Digital has announced a new initiative with the Stepladder Foundation – a charity offering imaginative and flexible approaches to learning for Black, Asian and Minority Ethnic young people identified as disadvantaged. Deloitte Digital will be providing equipment such as laptops and software, as well as study materials to students enrolling on Stepladder courses. Deloitte volunteers will also be working with Stepladder students, providing advice and guidance on pursuing a career across the technology and creative industries. 10

set of accounts. Over 500 people have tuned in already to this one. We also have videos on doubleentry bookkeeping, assets, and financial maths. Here’s the list in full of the videos on offer:

• Double Entry Bookkeeping, with Tom Clendon https://vimeo.com/429252329 • Financial Maths for AFM and FM students, with Sunil Bhandari https://vimeo.com/446780185 • Trial Balance, with Michele Baker https://vimeo.com/500074449 • The Strategic Planning Process, with Sean Purcell https://vimeo.com/437139421 • VAT Calculations, with Michele Baker https://vimeo.com/584904867 • Assets, with Tom Clendon https://vimeo.com/545939340 • Business Valuations, with Sunil Bhandari https://vimeo.com/584900540 • Weighted Average Cost of Capital (WACC), with Sunil Bhandari https://vimeo.com/536755049

taxpayers to file and pay on time if they can, as the department reveals that, of the 12.2 million taxpayers who need to submit their tax return by 31 January 2022, almost 6.5 million have already done so. Lucy Frazer, Financial

Secretary to the Treasury (pictured), said: “We recognise that Omicron is putting people under pressure, so we are giving millions of people more breathing space to manage their tax affairs. “Waiving late filing and payment penalties will help ease financial burdens and protect livelihoods as we navigate the months ahead.”

The collaboration was inspired by Deloitte’s Black Action Plan and the firm’s belief that everyone, irrespective of their race, ethnicity, or background, should have equal opportunities to thrive.

20 Grosvenor Street, the environment in which we operate has fundamentally changed. The completion of this deal marks another step forward for our firm, as we execute on our plans to grow the business and invest for the future.”

KPMG sublets 20 Grosvenor Street KPMG UK has sublet its premises in Mayfair to Fora, a flexible workplace provider with 14 operating sites across central London. KPMG opened 20 Grosvenor Street in 2015, after combining its London offices into one flagship HQ in Canary Wharf, to offer a location for clients to meet with KPMG in central London. Jon Holt, CEO of KPMG UK, said: “We recognise that since opening our client meeting space at

New partners at PwC UK PwC UK has announced the appointment of 22 new equity partners. These promotions are in addition to its usual partner promotion round in July, and the firm said this reflects the strong growth of the firm driven by demand for services including transformation, deals and ESG. Of the 22 newly promoted partners, 41% are women and 14% are from a minority ethnic background. PQ Magazine February 2022

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PQ tech the news

Tech trends for 2021

VIKKI BEAN Helping small firms comply with digital tax reform The next wave of Making Tax Digital (MTD) is almost upon us, with business owners who charge VAT with a taxable turnover under £85k having to comply from April 2022. So what can advisers tell their SME clients to ensure MTD compliance is as painless as possible? • Make clients aware of key deadlines: small firms need as much information as possible about the legislation. Accountants should offer themselves as a first port of call for any questions, but HMRC’s MTD for VAT page also contains a wealth of useful insights. It’s crucial to encourage clients to diarise the key dates when VAT returns are due, to avoid last-minute cramming. • Don’t get ahead of yourself: when registering for MTD for VAT on behalf of a client, the business has to verify a number of links via email – adding further layers to the process compared to the previous iteration. Crucially, accountants will also need to copy existing clients for MTD for VAT across from the traditional online portal to the Agent Services Account. Advisers can only do this when they have completed their obligations with non-MTD VAT. • Encourage clients to embrace broader digital change: it’s easy to view MTD as a necessary evil. But accountants have an important role to play in helping clients understand that technology can help them. For firms not considering any kind of digital change, it provides an opportunity for them to put the right processes in place. Vikki Bean is Director of Global Education and Delivery at Xero

Games consoles, wearable devices, NFTs and chip investment will all trend in 2022, according to the latest Deloitte global technology predictions. It estimated that the games console market will generate £60.6 billion in 2022, up 10% from 2021. By the start of 2022, the Big 4 firm says there will be 900 million console players worldwide. They will bring an average £69 of revenue per gamer to the industry; comfortably more than the projected £17 per PC gamer and £37 per mobile gamer. Overall, Deloitte forecasts that console owners will have more than 200 million multiplayer and games subscriptions in 2022.

Deloitte is also predicting that 320 million consumer health and wellness wearable devices will be shipped worldwide in 2022, rising to 440 million units by 2024. This comes as consumers are increasingly using smartwatches and fitness trackers alongside smartphones to track their health and wellbeing, with smart patches also becoming available off the shelf and via prescriptions. It said that VC firms globally will

Sage acquires Brightpearl Sage has agreed to acquire Brightpearl, a cloud native multichannel retail management system for retailers and wholesalers. The acquisition of Brightpearl, in which Sage already has a 17% minority stake, aims to accelerate Sage’s strategy for growth, including scaling Sage

Intacct, broadening its proposition for midsized businesses and expanding Sage’s digital network. With operations in the US and the UK, Brightpearl provides a SaaS-based retail operating system, enabling real-time business insights and helping customers automate workflows

invest more than £4.5 billion in semiconductor start-up companies in 2022, more than three times larger than it was every year between 2000 and 2016, although a slight decrease on investments estimated to have been made into semiconductor start-ups in 2021 (£6 billion). Deloitte said that non-fungible tokens (NFTs), unique digital identifiers that use blockchain to record ownership of an asset, will generate more than £1.5 billion in transactions for sports media in 2022, about double the value of NFT transactions for sports media in 2021. The study estimates that between four and five million sports fans globally will purchase or receive an NFT sports collectible as a gift in 2022. to save time and money. The combination of Sage Intacct and Brightpearl will create a powerful solution for retailers and wholesalers integrating financial management, inventory planning, sales order management, purchasing and supplier management, CRM, fulfilment, warehousing and logistics management. The consideration for the 83% of Brightpearl that Sage does not already own is $299m (£225m), which will be funded from Sage’s existing cash and available liquidity. The transaction is subject to regulatory clearance.

KPMG lands Guinness World Record KPMG UK, in collaboration with Google Cloud, has broken the Guinness World Records title for the most views of a Cloud technology lesson video on YouTube in 24 hours. Between noon on 17 November and noon on 18 November last year more than 2,964 people watched the lesson video as part of KPMG’s Cloud Curious Challenge. This includes

KPMG employees viewing from around the globe – including the US, Spain, Barbados and Venezuela. Schools across the UK also took part in the record attempt, with 10,490 pupils from secondary schools in social mobility cold spots across the UK

being coached! The Information Commissioner’s Office told UK finance (the banking trade association) that biometric measurements should now be used in “a targeted and proportionate way”.

card transactions. You can still use debit cards (including Visa debit cards) and non-Visa credit cards including Mastercard, Amex and Eurocard to make purchases. Amazon will give you £20 off your next purchase the first time you add any debit or non-Visa credit card, subject to terms and conditions.

getting involved, including Bradford, Oldham, the Black Country and Stokeon-Trent. For every person who took part in the world record attempt, KPMG will donate £1 to Marie Curie, taking the total donation to £13,454.

Tech briefs Pap Smart bank apps New bank apps will help reduce fraud by tracking a customer’s walking style, typing speeds, times of payments, and even the user’s heart rate. For example, an expert said the app would identify if you were being particularly slow when using online banking, as it could indicate you were 12

Pap Amazon bans Visa credit cards Starting 19 January, 2022 Amazon has said it will no longer accept any Visa credit cards issued in the UK, due to the high fees Visa charges for processing credit

Pap Getting ready for Making Tax Digital for VAT Some 1.5 million businesses have already signed up to Making

Tax Digital (MTD). However, UK businesses that haven’t yet joined the scheme need to make sure they’re ready for April 2022, when all VAT-registered businesses, regardless of turnover, will have to start following MTD rules. HMRC has written to all those under the VAT threshold of £85,000 who are yet to sign up to MTD VAT to encourage them to take steps to prepare, including reading the guidance on GOV.UK, keeping digital records and finding MTD compatible software. PQ Magazine February 2022

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A greener future I wanted to say thank you to PQ for supporting bookkeepers and accountants supporting a greener and more sustainable future. I wholeheartedly agree that the accounting industry has a part to play in the fight against the climate crisis. It’s disappointing that industry regulations are only now changing, but whether that’s for environmental or monetary reasons – better late than never! It’s also disappointing to hear colleagues dismissing the role they have to play (including last month’s PQ star letter writer). Many in the industry have been fighting the crisis for a lot longer. As an industry we are key players, able to influence and educate

clients on the financial benefits of a greener and sustainable business model. By providing

simple triple bottom lines (people, planet and profit) for clients, and showing the benefits of working in a circular, sharing or regenerative economy structure, accountants can be instrumental in other industries making small but wellthought-out changes. I would love PQ to continue discussing the industry’s role in fighting the crisis and providing educational pieces on small and large changes we can make within our own firms. Kathryn Frimond, via email The Editor says: Don’t worry Kathryn, saving the planet is top of our agenda too! It is important that we all understand what changes in behaviour can make a real difference.

Our star letter writer wins a fantastic ‘I love PQ’ mug! Time to lose the diet Having gained several pounds while preparing for the ACCA APM (Advanced Performance Management) exam, I was surprised that the examiner’s reports talk about ‘diets’. The online Oxford English Dictionary didn’t give a satisfying answer, but Wiktionary revealed that ‘diet’ means a ‘session of exams’ in Scotland. I find it interesting that ACCA, with its international focus, uses such jargon when easier terms are available (exam sitting or session). After all, my APM studies taught me to keep the audience in mind when writing reports (mnemonic PAIL: purpose, audience, information, layout). To those with future APM diets, read the examiner’s reports since they contain valuable insights. To everyone else, good luck with your post-Christmas diets! Martin Michlmayr, via email

Typeface torment PQ magazine, please help us to get our voice heard. I had a big issue with the latest ACCA exams and I thought others would too – it’s the question font, it’s just not readable! I was forced to copy

out the questions to the word processor just so I could read it. But this caused so much delay and really affected my performance. Does anyone else have the same concerns? Name supplied via Facebook

Hold AAT to account I was surprised that AAT is pushing back the launch of its new qualification by seven months. I just wanted to know why PQ didn’t make more of this story? Name and email address supplied

On one of our favourite Facebook Groups (UK ACCA Distance Learning Students) a PQ asked: “Where do you store all your study material? Any pics?” We loved the response that said: “I either sell the books or throw away (depending on how bad my exam preparation was).” Another said they had “these two to help me.” Others make sure they

are very visible: “On my coffee table and a constant reminder to stop watching TV and do some studying.” And “every possible corner for at least 6 months, afterwards I use the recycling bin.” Some studiers were reluctant to throw anything away: “I didn’t bin any of my books and notes for now. Will do once I qualify.” However, some have taken an alternative route: “I’ve gone

paperless so I have online textbooks and store all my notes, mind maps and lecture notes in a single digital notebook on the iPad (GoodNotes app). I use online lectures so I can study easily when I have spare time by having everything easily accessible and well organised.” A discussion then ensued on whether it is worth investing in an iPad. Robert explained: “It’s certainly helped me – the 12.9 inch screen is excellent. They’re pricey of course but to be able to write the same as on paper but then digitally organise and access my notes has been super helpful.”

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

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We need your entries to the PQ magazine awards 2022, so get those nominations to us now he window is now open for your PQ magazine award nominations. You have until the deadline of Friday 18 February to get them to us. There are lots of categories where you or your nominee can win a much-coveted PQ magazine trophy. There are both individual awards, such as PQ of the Year and Tutor of the Year, as well as team awards such as Accountancy Team

of the Year and College of the Year. We also have a new award up for grabs this year – Graduate/Apprentice Programme of the Year. Our advice is always to spread the love. To start just download the nomination form from our website at https://tinyurl. com/2p8krcfd You then have 250 words to make your case. If you don’t feel

that is enough just provide your supporting material separately, and we will make sure the independent judges see both. Once you have everything together send it to awards@ pqmagazine.com or post it to: The Editor, PQ magazine, PO Box 75983, London E11 9GS. Those independent judges see all the entries before choosing the shortlist for each category. And if you make it onto that list you will be invited (free) to the fantastic awards night in London (government restrictions permitting). Remember, the deadline for entries is Friday 18 February 2022, so get nominating!

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THE AWARD CATEGORIES PQ OF THE YEAR  NQ OF THE YEAR  DISTANCE LEARNING  STUDENT OF THE YEAR ACCOUNTANCY  GRADUATE OF THE YEAR APPRENTICE OF THE  YEAR STUDENT BODY OF THE  YEAR ACCOUNTANCY BODY  ACCOUNTANCY COLLEGE  – PUBLIC SECTOR ACCOUNTANCY COLLEGE  – PRIVATE SECTOR ONLINE COLLEGE OF  THE YEAR LECTURER – PUBLIC  SECTOR LECTURER – PRIVATE  SECTOR STUDY RESOURCE OF  THE YEAR INNOVATION IN  ACCOUNTANCY BEST USE OF SOCIAL  MEDIA TRAINING MANAGER/  MENTOR ACCOUNTANCY TEAM  ACCOUNTANCY  PERSONALITY EDITOR’S SPECIAL 

Our reigning Apprentice of the Year is CIMA trainee at Rolls-Royce, Haider Ali (pictured top). The 2020 winner was AAT Charlie Atkins (pictured top right with Peter Stewart), and in 2019 it was Zane Salmon (pictured with Ami Copeland).

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PQ Magazine February 2022

PQ the year in focus

What's ahea We asked the bodies' chiefs for their thoughts on what will happen in 2022. Here's what they told us ...

Making a positive, lasting difference For many of us, the past year has brought with it the realisation that nothing should be taken for granted. Whether it is meeting friends and family, the way we work, or even the health of our planet, we find ourselves living through a period of great uncertainty. It is in this uncertainty that the chartered accountant can be relied upon as a trusted adviser, someone to help navigate through these unknown waters in which we have found ourselves. For many working in the business and finance sector, 2021 turned out to be a very busy year. The accountant as an adviser was there to help clients impacted by the numerous lockdowns, and to aid in the move back to a business landscape that was beginning to resemble the one that existed preCovid, whilst also managing the impact on their own businesses. We have demonstrated that accountancy is adaptable and agile, and the trusted and informed role that accountants play in a financial crisis has come to the fore. Chartered accountants are conduits for information and translation, not only for understanding what is available and how to access it, but also in how to apply that knowledge to help owners and managers work through their options. But it is not just about the numbers. Now is the moment when we really need accountants who deeply care about their moral responsibility to others and approach every day with a diverse and sustainable mindset. These values sit at the heart of ICAS and are woven into every decision we make. I believe to make a positive and lasting difference in the way we work and to the wider world, organisations need to make a genuine and concerted effort to live their values at every level, starting from the top. • Bruce Cartwright, Chief Executive, ICAS

Time to rethink our world What are my hopes for the coming 12 months? That the accountancy profession drives forward progress on the United Nations’ Sustainable Development Goals (UN SDGs). Accountancy professionals stand in a place of trust and are in a unique position at the heart of organisations, in business and the public sector, to bring about positive change. There’s a growing call across society to create a world that works for everyone – one that is greener, fairer and more inclusive. The UN SDGs are the model for this – 17 goals designed to achieve a better and more sustainable future for all by 2030. They cover issues such as wellbeing, decent work, quality education, gender equality, clean energy and climate action. Every part of society needs to respond to the UN’s call to make the 2020s a decade of action by placing the SDGs at the centre of positive and sustainable change. As a leader in the profession, ACCA is responding to that call for action. We committed in December 2020 to nine of the UN SDGs where we can make a real difference. Our new campaign, ‘Rethinking our world’, calls on everyone in the ACCA community and beyond to play their part. This can be done by engaging with the UN SDGs and asking the question – what steps can I take? Together we can make a difference. Visit our hub to see what steps you can take – go to https://tinyurl.com/ mrxz8jsp • Helen Brand is Chief Executive of ACCA

Let’s get back on track in 2022 As we’ve now rounded the curve into 2022, Covid-19 will likely continue to dominate public sector spending as the UK attempts to ‘ride out’ the Omicron wave. With the number of positive cases and the NHS backlog ever-growing, we must consider how we can get through the next year as safely and securely as possible. Behind the frontlines, public finance professionals have offered continuous support to make sure that services are delivered to those in need. Their role in all areas of public life makes them critical in the provision of resources. Strong financial management is key especially in times of crisis. In the wake of COP26, one thing that must be prioritised is keeping our finances sustainable throughout the upcoming year. This means pursuing investments that result in maximum impact for people, and minimal impact on the natural environment. It also means encouraging innovation, embracing technology and finding creative solutions to real world dilemmas. Local authorities must be supported to deliver the infrastructure needed for real climate action. The pandemic has likewise shown us the danger of being reactive and the value of being preventative. Public health relies on the good use of public money. We therefore need to adopt an outcomes-focused approach which looks beyond just financial information. Balance sheets certainly offer us insight into how much money goes into services. However, public finance professionals shouldn’t just approach decisions from one side of the equation. We need to examine the quality and range of real-world outcomes being provided by taxpayer money and use that reality to inform our decisions. If we adopt an approach that prioritises strong outcomes and value for money, we’ll be putting our best foot forward in the fight to get public services back on track in 2022. Clapping for the national health service won't be enough – it’s time to reflect and apply the skills and knowledge we have to see us through this crisis. • Rob Whiteman is CEO of CIPFA 18

PQ Magazine February 2022

the year in focus the PQ

ad in 2022? A breakthrough year Are your skills fit for the future? for audit reform?

January 2022 marked the fourth anniversary of the collapse of Carillion, the catalyst for a professionwide push to reform audit, corporate governance and regulation. Four years is a long time to wait for reforms which are at the heart of the government’s global business agenda. At the time of writing, although the government published its consultation on audit reform in spring 2021, to which ICAEW and over 600 other organisations and individuals responded, we still wait for the next steps. At ICAEW we want the package of reforms to be taken forward and while we understand the other priorities we would have liked the pace of reform to be quicker. Business secretary Kwasi Kwarteng is expected to announce the next steps soon. However, concern from some in the boardrooms over rules requiring directors to sign off on companies’ internal controls over financial reporting, modelled on the US’s Sarbanes-Oxley regime, means this generational overhaul could be somewhat diluted. A failure to strengthen rules around internal controls would undermine the wider package of reforms, and be an opportunity missed. In fact, if any one of the pillars of the reform programme is weakened then the whole package is at risk of falling down. One crucial aspect of reform is the ongoing transformation of the FRC into the Audit, Reporting and Governance Authority. The selection of Sir Jan du Plessis as the preferred candidate to become the new Chair looks to be a step in the right direction, and we look forward to working with him and Sir Jon Thompson to drive forward reform. As we continue to live with Covid-19, 2022 feels like it could be a breakthrough year for UK audit and corporate governance reform, and reinforcing Britain’s position as a global economic powerhouse. It will also remind the world of the importance of audit and its position at the heart of the societal transition we have ahead. • Michael Izza is ICAEW Chief Executive

In 2019, CIMA celebrated its 100th anniversary. To mark the occasion, we published a short history of the organisation, including how much our members’ skillset has changed over that time. Comparing our original syllabus with our most recent one, you might think you are looking at two different professions. Although some of our core proficiencies are the same, we had to change others over time to meet technological progress – the rate of which is accelerating. IBM estimates the half-life of a skill is about five years, with that of more technical skills being around half that again. The pandemic has brought this speed of change into very clear focus as many companies were forced to change their business models to survive, or risk going bust. In this context, research and consultancy company Gartner believes that there will be an increased focus on developing critical skills that can open up multiple career development opportunities, rather than preparing for a specific next role, to help organisations meet their strategic goals and boost resilience. So, what does this mean for accounting and finance professionals? We need to go beyond our core technical comfort zone, embrace emerging technologies and master a wide range of technical, business, people, leadership and digital skills. We must become business influencers and leaders, and position ourselves as storytellers who provide insights to business partners to support strategic decisionmaking and deliver value across our organisations. We must recognise that our skills have a short shelf-life and need to regularly review and update them. In 2022 and beyond, there will be strong demand for highly skilled professionals who can successfully help their organisations get back on their feet and navigate future turmoil, businesses are building resilience – it’s truly an exciting time to become a finance professional. • Andrew Harding, FCMA, CGMA, Chief Executive – Management Accounting at the Association of International Certified Professional Accountants, representing AICPA & CIMA

Helping build the recovery 2021 has been a difficult year for many people. With ongoing uncertainty around the Covid-19 pandemic and the impact of the UK’s departure from the EU, there are still many challenges to be faced, particularly for small and medium-sized businesses. However, there is also cause for celebration. Our latest AAT Salary Survey showed members’ average salaries have increased at every level of the profession, suggesting accountancy is still a financially stable career and there is real value in obtaining recognised qualifications and membership. The government’s renewed focus on skills represents a real opportunity for people to boost their employability by gaining an AAT qualification. We have also continued to push for the introduction of mandatory membership of a professional body for anyone offering paid-for tax advice through our Accountable campaign. This will help ensure that we protect and enhance the reputation, trust and confidence in our profession – ensuring that people get up-to-date, reliable support and avoid the risk of hefty fines, which is critical at this point in the country’s economic recovery. Our Annual Report this year had the subtitle ‘Agility, resilience and accountability’, and accountants will need to use all three of these skills in 2022. Increasingly, the remit of accounting technicians is shifting beyond just crunching numbers into more of a mini business consultant role. Our members are interpreting data for clients, communicating how tax changes will affect them – particularly key as businesses continue to weather the fallout from the pandemic – and adapting for the future to help them to succeed. And as AAT members support their clients, we will continue to support our members and students to help develop their skills and change their lives. Whatever the future holds, we will continue to promote skills, enable people and empower businesses – as we’ve done for over 40 years. • Sarah Beale, CEO, AAT PQ Magazine February 2022

PQ ACCA December exam feedback

Pass the chocolate! How bad was the December ACCA exam sitting? Was your paper so awful you had to eat a whole packet of Tunnock’s biscuits, or did you opt for the Nutella? Here’s what you told us

TX: Sitters found TX hard this time around, but then it always is! FR: There was a lot of consolidation questions throughout this paper, for some. But, generally, sitters thought the December test was tough but fair. PM: Not many sitters thought this was an ‘OK’ exam! Some 62% of PQs in the Open Tuition post-exam poll said the December exam was either ‘hard’ or a ‘disaster’. The exam left many students with not a clue about how it went. One sitter said: “I honestly don’t know what to feel after this. Not a lot tested on the major topics. My performance was not okay, I have done other papers and never felt this way.” Students also pointed out that the paper did not reflect any of the past papers: “There’s 4 past papers on the ACCA platform for PM, Paper 1, 2, Specimen paper and December 21 mock. Out of all 4 papers only like 5% came up in this exam.” And another explained: “It was very hard, and to be frankly honest it was pointless to release the pre-December mock exam. The amount of information in every question was overwhelming. Section A was OK, but section B was so hard. I am not pleased with the exam and not motivated to retake it for quite a good while. It is so frustrating that all my hard work is gone down to drain.” There were also complaints about the size of the computer screens. FM: December’s sitting was described as ‘fine’, ‘pretty good’ and ‘surprisingly easy’. “The exam was a lot easier this time around, but weird at the same time,” said one sitter. The fact that it was OK 20

still scared some as “I have never had an easy ACCA exam – let’s see what happens!” AA: This sitting was deemed OK by 57% of December sitters, according to the Open Tuition post-exam poll. One in four (25%) found the exam ‘hard’ and another 9% said it was a ‘disaster’. Some students said they felt quietly confident coming out of the exam hall, but after rehashing their answers at home they started to get paranoid that they had failed. Sound familiar? SBL: As one PQ said: “It wasn’t difficult or tricky, but I ran out of time and left the last question incomplete.” Another admitted: “I didn’t get to Q4 as I ran out of time!” Many other sitters admit they overran on time too, especially with Q1, and they were then forced to “hastily answer the rest of the questions”. Feedback generally, however, was that this SBL exam was ‘OK’ and ‘a fair paper overall’. One worry was some students found it hard to link to the exhibits when answering questions. Sitters seem to almost enjoy answering about the scientism

on acquisition and big data. SBR: Over 40% of sitters responding to the Open Tuition post-exam poll said this paper had been a ‘disaster’. It was not surprising then that many students said this was a ‘tough’ exam, and ‘just not fair’. It was so bad that one PQ admitted to going home and eating a whole packet of Tunnock’s wafer bars. It was that horrible! This was only matched by someone who ate four Nutella sandwiches. Another sitter vented: “What a complete mess of a paper. An entire question based around cryptocurrency which does even have an accounting standard, what a joke… There were just too many out of this world scenarios and I fail to believe how we are expected to link them back to what’s taught in the syllabus.” For yet another PQ this was “the worst ACCA exam I’ve sat. The B questions were stupidly hard, the scenarios were way too complex and I ran out of time. This is the first ACCA exam where I have struggled with time management. It took about 15/20 mins to understand what was actually going on in the question.” AAA: Sitters struggled with time and many found it ‘honestly tough’. “It was the hardest paper I have ever sat,” said one sitter, and they felt the examiner intentionally wants to reduce the pass rates. AFM: The exam was deemed ‘fine’, and even the theory ‘wasn’t that hard’. For others it was “too close to call”, and on the Open Tuition post-exam poll one in five said the exam for them was a ‘disaster’ (21%). Top tutor Sunil Bhandari told us: “AFM candidates should be content with what they saw on their screens. The topics tested across all the exam variants were as expected. You would say it looked like the questions set by Father Christmas rather than The Grinch!” APM: Many felt this was a challenging paper and struggled with their time management. Some PQs just didn’t know what was being asked in some of the questions: “What about the Q3… I read it like 10 times and I couldn’t tell what was being asked.” Another sitter said: “Overall I don’t expect to pass and I am completely exhausted.” Another complaint was the narrow scope of the December paper “considering how broad the syllabus is. It only tested almost only on three areas.” ATX: One in four sitters said the ATX December paper was a ‘disaster’, according to the Open Tuition post-exam poll. One called it “a weird one”, another thought it was fair, but they were afraid they hadn’t written enough. And, for yet another, the whole thing was just a blur, “as there is so much to do in 3 hours and 15 minutes!” PQ Magazine February 2022

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PQ CIMA spotlight

How to tame time Jackie Durham takes you on a pun ridden journey through the annals of time, CIMA-student style empus fugit’ (roughly translated as ‘time flies’) was one of my late father’s favourite expressions. It was in regular use when my sister and I were young and there were things to be “getting on with” – probably things that as children wouldn’t have regarded as important. However, as an adult, one is always desperately aware that tempus really does fugit! Never more so than when attempting to do the impossible: succeed in a busy finance role, whilst studying CIMA and quite probably also juggling raising a family and/or trying to hold onto a social life. Yet in a strange way that awful pressure of time, the sense that it’s running away with us, is what provides motivation, the need to crack on and get things done. Without the constraints of time where would we be? It seems to me that it isn’t ‘time’ itself that’s the issue, it’s how we manage it. After all, time goes very slowly when waiting for that watched pot to boil (or waiting for Godot – one of my personal favourite expressions), but absolutely flies by when we are “having fun”. While we can’t stop the march of time, we are masters of our own time and, in theory at least, we can use what time we do have well – that’s where planning comes in. Sorry, you must have known planning was going to feature somewhere! Having a plan, fixing on an exam date and then working backwards from that date to produce a scheme of work which covers all the syllabus content, builds in time for revision and question practice while also plotting in important personal events and goals, is the way forward. Obviously, you need to stick to the plan (minor point), keep checking back to make sure it is still working for you and making any necessary adjustments to accommodate

‘T

changes at work or at home. Personally, I think one of the biggest issues here is that our preferred way of studying isn’t always available to us or is one which isn’t the easiest to manage in the context of studying and working. The key is to think about how we’d like to study in an ideal world and see how we might make that work in practice. When we were at school or university we probably had a fair amount of time for our studies – even if we didn’t choose to spend all of it studying! Depending on the courses we were taking, we might have long periods of study time where we could research, consider or debate before ever writing a word in an essay or an exam. We would probably have a tutor to guide us and the physical, and mental, space to spread our papers out, open our textbooks, make notes, etc., a nice, well-organised approach to study. By the time we get to professional exams the luxury of full-time study is behind us and that dedicated study time is long gone. Studying becomes something to be squeezed in how and when one can, a quick chapter read on a mobile device while computing, a quick watch of a YouTube tutorial while making dinner, a few practice questions once the children are in bed, Post-It notes on/in the fridge is far more likely to be the norm. If this isn’t your preferred way of studying, it can be very hard to move into a different mode. While ‘bite sized’ chunks of study work for many (as do one-at-a-time exams – I remember when students had to sit the four exams at a level all in one go), they aren’t for everyone. If that’s the case, your study plan will look different to the person who is more than comfortable with a ‘study-as-and-where-you-can’ approach. It is possible to build in chunks of time for study (or

to complete an essential full mock exam), it just requires more forward planning and an absolute commitment not to let that precious time slot slip or be used for other things. Have a study plan on the wall so that friends, family and colleagues can see when you have planned your study periods and hopefully avoid them becoming the “thieves of time”. Writer Leo Tolstoy said that the two greatest warriors were patience and time; he was referring to them in terms of a physical battle but both also come in useful when battling exams. We need the patience to make the plan, to put the work in, develop and refine our exam skills and, if needed, the patience and resilience to reflect and regroup should another attempt be required. Time, and the management of it both before and within the exam, is the other weapon in our armoury if we make it work for us. That’s where time management in the exam itself comes in; good exam technique and effective time management are often the difference between success and failure. There are plenty of articles and webinars in the CIMA Study Planner to assist with time management. Also, as noted in last month’s PQ article, question practice is a very good way of refining time management skills. But… what happens when those exams are all behind you and there’s no more pressure to fit study in alongside all those other competing demands on your time? Let’s hear it direct from a student who recently sat her Strategic Case Study exam: “Feeling lost now. What do you do when not working towards an exam?” • Jackie Durham, Study Support Manager at the Association of International Certified Professional Accountants, representing AICPA & CIMA PQ Magazine February 2022

master’s degree PQ

Boost your credentials Top up your professional qualification with a Masters degree in just nine months obert Gordon University’s (RGU) MSc Accounting & Finance Professional Top Up course is an exciting opportunity to enhance your professional accounting qualification with a Masters degree from a globally recognised AACSB accredited Business School. This online course is ideal for those who hold a professional accounting qualification from a recognised accounting body such as ACCA, CIMA, ICAEW, ICAS or other member of the GAA. The MSc Accounting & Finance Professional Top Up degree will enhance your employability by improving your organisational and time management skills, all without the need for a career break. In addition, you can expect to further develop your transferable skills in areas such as communication, project management, data analysis, critical thinking and problem solving. Through your professional accounting qualification, you have already demonstrated that you have the technical accounting and business knowledge required for a successful career, and this online Masters degree focuses

on developing your research and analytical skills through one Capstone module. The Capstone module is worth 60 credits (SCQF level 11) and encompasses training on research and analysis methods. You will choose an area of accounting or finance to research – an area that interests you – and a supervisor will be allocated to support you through the research journey. You have to the flexibility to choose to

complete either a traditional dissertation or a business consultancy project for your Capstone module. It is up to you which style of project and output is more relevant for you, your academic journey and your career. This course is fully online and you’re encouraged to engage with your supervisor and the course team as often as you need. This flexible mode of study works effectively with your current role as part of an accounting or finance team, allowing you to balance work, study and family life. In just nine months, this online degree will enable you to acquire and develop academic and communication skills. These skills are vital when you need to demonstrate to current and potential employers that you are able to investigate current issues and communicate your findings in a professional manner. This Masters degree will give you a competitive advantage in your accounting career. The MSc Accounting and Finance Professional Top Up online degree is an opportunity to enhance your professional qualification in just nine months. Find out more and apply now to start in January or September 2022 at www.rgu. ac.uk/accounting-top-up

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Apply now, start January 2022 www.rgu.ac.uk/accounting-top-up PQ Magazine February 2022

PQ new codes

Living by the code CIPFA has issued two new codes – the Prudential and Treasury Management codes. So what does it all mean? IPFA has released the new Prudential Code for Capital Finance in Local Authorities (Prudential Code) and Treasury Management in the Public Services Code of Practice and Cross-Sectoral Guidance Notes (the Treasury Management Code) following a consultation period. These two statutory and professional codes are important regulatory elements of the capital finance framework within which local authorities operate. Local authorities are required by regulation to ‘have regard to’ their provisions. The updated Prudential Code includes the following as the focus of the substantive changes: • The provisions in the code, which present the approach to borrowing in advance of need in order to profit from additional sums borrowed, have been strengthened. The relevant parts of the code have augmented to be clear that borrowing for debt-for-yield investment is not permissible under the Prudential Code. This recognises that commercial activity is part of regeneration but underlines that such transactions do not include debt-for yield

as the primary purpose of the investment or represent an unnecessary risk to public funds. • Proportionality has been included as an objective in the Prudential Code. New provisions have been added so that an authority incorporates an assessment of risk to levels of resources used for capital purposes. • A new requirement has been added so that capital strategies are required to report investments under the following headings: service, treasury management and commercial investments. The main changes to the updated Treasury Management Code and the accompanying guidance for local authorities are as follows: • Investment management practices and other recommendations relating to non-treasury investments are included within the Treasury

Management Practices (TMPs) alongside existing TMPs. • The guidance will recommend the introduction of the Liability Benchmark as a treasury management indicator for local government bodies (note that CIPFA has issued a toolkit to assist local authorities with the production of this indicator). • Environmental, Social and Governance (ESG) risks are incorporated into TMP1 (Risk Management) rather than a separate TMP 13. • The purpose and objective of each category of investments should be described within the Treasury Management Strategy. Richard Lloyd-Bithell, Senior Policy and Technical Manager at CIPFA, said: “Both codes have been subject to a full and extensive consultation process and received significant response rates with more than 100 responses for each respective consultation. “We welcome the thoughtful challenges and contributions of the sector and are pleased that the majority of respondents were supportive of the proposed changes, summarised above, with very few expressing direct opposition. CIPFA looks forward to publishing an analysis of the consultation questions this week.”

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PQ Magazine February 2022

business property relief PQ before Dante dies and offer planning advice to Chelsea.

Taxing times In this month’s article in our ‘Keep It Simple’ series, Neil Da Costa tackles a popular IHT topic that features regularly in tax exams usiness Property Relief (BPR) is the most important inheritance tax (IHT) relief and makes business assets tax free for IHT during the lifetime and on death. It is available on worldwide businesses as long as the business asset has been owned for at least two years BPR is available at two rates – either 100% or 50%. Note that 100% BPR can be claimed on unincorporated businesses and any shares in an unquoted trading company. On the other hand, 50% relief is available on a controlling interest in a quoted company, or an asset owned by an individual and used by a partnership in which the individual is a partner, or a company controlled by an individual.

Simple example: what percentage of BPR is available on the following assets owned for two years? 3% holding in an unquoted trading company. 40% holding in a quoted trading company. 60% in an unquoted company dealing in investments. Building owned by a partner and used in the partnership. 51% holding in a quoted trading company. Solution to simple example 100% – any shareholding in an unquoted trading company is eligible for 100% BPR. PQ Magazine February 2022

0% – 50% BPR is available on a controlling interest in a quoted company. 40% is less than 51%. 0% – the company is an investment company so is not eligible for BPR. 50% – this is an asset owned personally by the partner and used in the partnership business. 50% – this is a controlling interest in a quoted company. BPR on lifetime gifts A lifetime gift of a business asset is eligible for BPR as long as the two-year ownership period is satisfied. It is possible to amalgamate the ownership period of spouses and the donee must still own the business at the date of the donor’s death. Simple example: Dante’s Deli Dante has owned his unquoted trading company for many years and decides to gift the company to his daughter, Chelsea. The value of the company at the date of the gift is £500,000 and 20% of the assets are investments. Dante has already used up his nil rate band and annual exemptions. Dante is unwell and expected to die three or four years after the gift. What would happen if Chelsea still owns the business at the date of Dante’s death? Compute the tax if Chelsea sells the business

Solution to Dante’s Deli Dante has owned the unquoted trading company for at least 2 years, so the gift is eligible for 100% BPR. However, 20% of the assets are investments so the BPR is restricted to the business assets £500,000 x 100% x 80% = £400,000. As Chelsea still owns the business at the date of Dante’s death, the PET of £500,000 is eligible for £400,000 BPR. The inheritance tax payable by Chelsea will be £500,000 - £400,000 = £100,000 x 40% = £40,000. As the PET took place three or four years before death, the tax is reduced by 20% taper relief. Chelsea would have to pay £40,000 x 80% = £32,000 IHT. Unfortunately, if Chelsea sells the business before Dante’s death, the BPR is withdrawn and the full £500,000 is taxable. The inheritance tax payable by Chelsea will be £500,000 x 40% = £200,000. As the PET took place 3-4 years before death, the tax is reduced by 20% taper relief. Chelsea would have to pay £200,000 x 80% = £160,000 IHT. By Chelsea retaining the business until Dante dies, the tax liability reduces from £160,000 to just £32,000 and she will save tax of £128,000 and we would recommend selling the business after Dante’s death. BPR on death estate BPR is also available on the death estate which allows businesses to be inherited by the next generation without any tax liability. Simple example: Kwame Partnership Kwame has a successful legal partnership which he has owned for more than two years and is valued at £600,000. In addition, Kwame personally owns the office building used by the partnership which is worth £1million. Kwame is divorced and, on his death, left his entire estate worth £3 million to his son, Kojo, who also works as a lawyer in the firm. Kwame did not make any lifetime gifts and his estate includes a main residence worth £800,000. How much IHT is payable on the death estate? Solution to Kwame Partnership Kwame’s death estate is eligible for 100% BPR on the partnership of £600,000. In addition, the building used by the partnership is eligible for 50% BPR of £500,000. The total BPR available is £1.1m. Kwame’s death estate is worth more than £2.35m so no residence NRB of £175,000 can be claimed. The relevant estate for the test is before BPR. The taxable death estate is £3m - £1.1m BPR - £325K NRB = £1,575K IHT payable on the death estate will be £1,575 x 40% = £630K. • Neil Da Costa is a Senior Tax Lecturer with Kaplan in London. He is the author of Advanced Tax Condensed which summarises the entire syllabus using memory joggers 25

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NCI PQ

A question for Tom Question Please can you explain why when non-controlling interest (NCI) is a proportion of net assets, the goodwill arising is just attributable to the parent? Tom’s answer Let me just reiterate. It is true that when NCI is measured as a proportion of net assets that the goodwill arising is only attributable to the parent company. The significance of this means that the impairment loss on such goodwill will only reduce group’s retained earnings and none will be charged to the NCI. This is in contrast to when NCI is measured at fair value, because then goodwill is said to be in full. In these circumstances the impairment loss on goodwill is split: it will be allocated to the group’s retained earnings and the NCI in the proportion that they share profits and losses. But let’s get back to the question which is WHY when NCI is a proportion of net assets, the goodwill is only proportional and just attributable to the parent? Let me illustrate with numbers to prove the point! Let’s take an 80% investment in a subsidiary that $200 and assume NCI was measured as a proportion of the net assets which were $100. The correct way to calculate goodwill is as follows, $ Parent’s investment (the controlling interest) NCI as a proportion of net assets

200 (20% x 100)

Less Net assets

20 (100)

Goodwill attributable to the parent

120

Another way There is an alternative way of considering the same calculation. The parent has a controlling interest, an 80% stake in the net assets of the subsidiary. The parent has paid $200 for a share of net assets that is $80, (80% x $100). Thus, when we compare what the parent paid ($200) with what the parent got ($80) we see that the difference of $120 is the premium that arises – the goodwill is $120. This goodwill just belongs to and is attributable to the parent. After all, no mention has been made of the NCI in determining that number! $ Parent’s investment (the controlling interest) Less the parent’s share of net assets

200 (80% x 100)

(80)

Goodwill attributable to the parent

Top tutor Tom Clendon answers another of your questions, this time on non-controlling interest and goodwill

120

Conclusion I give you this explanation to give you absolute certainty that when NCI is measured as a proportion of net assets, the goodwill that arises is attributable to the parent only. I urge you however always to calculate goodwill the proper way so as to show the introduction of NCI. • Tom Clendon teaches students to pass the ACCA SBR exam online and is a podcaster. See www.tomclendon.co.uk

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PQ CIPFA spotlight

Onwards and upwards With the uncertainty of the last year still resonating, what does the future hold for our public sector? Anna Howard shares some thoughts ancelled social plans and increased anxiety about the continuing spread of the Omicron variant undoubtedly affect millions of people’s Christmas and New Year plans. It’s easy to feel a sense of déjà vu – like we’re back to pandemic square one. At this time people tend to look forward to what the new year will bring, and also reflect on the year just gone. So to keep that time-honoured tradition, I thought I would do the same. The public services have been the guiding light throughout this lengthy pandemic storm, as well as many key workers in the private sector. Local authorities have continued to provide essential services in what have been very challenging conditions, and often with drastically reduced budgets. The pandemic has fundamentally changed so many things. What I am certain of it

has shown the need for talented and passionate finance professionals who are committed to making a difference in the public sector. The role of the finance professional was, and still is, central in our fight against the pandemic. They are tasked with making sure vital funds reach the appropriate resource or resident, ensuring council budgets are balanced and that operations happen lawfully, efficiently and deliver value for money. If this is where we have been, where are we going? Early in 2022 will see the launch of CIPFA’s Professional Accountancy Qualification, which marks an important milestone in our core training offering. The Professional Qualification has always embodied everything that CIPFA stands for, and now this new and updated version will continue that legacy well into the next generation. It will continue to be the only

accountancy qualification designed specifically for working in the public services. Throughout 2022, CIPFA and the Institute of Chartered Accountants of England and Wales (ICAEW) will be holding talks on developing a relationship where we work much closer together. We are looking forward to exploring what our future relationship might look like, and how closer working could benefit our students and members. Sustainability, social value and levelling up are likely to feature heavily throughout the next year or so. Taking an integrated approach to measuring value, and not just looking at returns on investment through the lens of financial profit, is an exciting economic viewpoint, and one which has real potential to improve the lives of millions. Other than that, what is certain is that the following year will be full of uncertainty once again. The world is still working out how to live alongside the virus as it moves from pandemic to endemic. Likewise, our fight against climate change will (and should) be accelerated and global political movements will continue to create a cloud of disruption and unknowing. Whatever the future may bring, CIPFA will continue to fight for improved public services, increased funding for local authorities and to champion the role of the public finance professional. • Anna Howard, Head of Qualifications and Membership, CIPFA

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PQ Magazine February 2022

AAT pass rates PQ

The assessment pass rates are… Check out all the latest AAT pass rates. How are you doing compared to your fellow suffers? ere are the latest AAT computer-based assessment pass rates, for the year ending 30 June 2021. Remember, the pass rates are only published for assessments that have been available for at least 12 months, or where there has been a minimum of 500 sittings. The pass rates shown are the rates for all assessments completed between July 2020 and June 2021. Please note that the information in the main table refers to the pass rates based on the CBAs only and not achievements rates for the qualification. It is not possible for AAT to calculate and provide qualification achievement rates.

H Level

Assessment name

Short code Worldwide

Access

Access to Accounting Software

AASW

85.8%

Access

Access to Business Skills

ABSK

94.3%

Access

Access to Bookkeeping

ATBK

95.4%

Foundation

Bookkeeping Controls

BKCL

72.4%

Foundation

Business Communications, Personal and Learning Skills

BPLS

94.9%

Foundation

Bookkeeping Transactions

BTRN

88.8%

Foundation

Elements of Costing

ELCO

87.3%

Foundation

Foundation Synoptic Assessment

FSYA

92.6%

Foundation

Introduction to Business and Company Law

IBLW

61.9%

Foundation

Introduction to Payroll

INPY

88.9%

Foundation

Using Accounting Software

UACS

86.6%

Advanced

Advanced Bookkeeping

AVBK

73.1%

Advanced

Advanced Diploma Synoptic Assessment

AVSY

54.6%

Advance Diploma Synoptic assessment

AVSY

60.1%

Advanced

Final Accounts Preparation

FAPR

80.0%

Assistant Accountant Portfolio and Reflective

AARF

98.1%

IDRX

81.7%

AAT Professional Accounting Technician End Point Assessment

Access CBA pass rate

Foundation

93.3%

Advanced

84.6%

74.9%

Professional 68.4%

End Point Assessments The following table shows the pass rates for the End Point Assessments for year-ending June 2021. Short End Point Assessments Percentage code AAT Assistant Accountant End Point Assessment

Advanced

Indirect Tax

Advanced

Management Accounting: Costing

MMAC

86.5%

Professional

Business Tax

BSTX

76.1%

Professional

Credit Management

CDMT

73.9%

Professional

Cash and Treasury Management

CTRM

75.5%

Professional

External Auditing

ETAU

68.6%

Professional

Financial Statements of Limited Companies

FSLC

67.9%

Qualifications and grades awarded

Pass

Merit

Distinction

75.9%

Foundation Certificate in Accounting

44%

51%

Foundation Diploma in Accounting and Business

20%

66%

14%

Advanced Diploma in Accounting

23%

56%

21%

Professional Diploma in Accounting

48%

49%

Professional

Management Accounting: Budgeting

MABU

Professional

Management Accounting: Decision and Control

MDCL

62.8%

Professional

Professional Diploma Synoptic Assessment

PDSY

59.8%

Professional

Personal Tax

PLTX

70.8%

PQ Magazine February 2022

Professional Diploma Synoptic assessment

PDSY

74.4%

Professional Accounting Technician Portfolio and Reflective

PPRF

96.7%

Graded Qualifications Qualifications awarded by AAT include four graded qualifications. The table below shows a summary of the grades awarded for each qualification between 1 September 2020 and 31 August 2021.

The provisional date for the publication of the next set of CBA pass rates is the end of March 2022.

PQ 2021 highlights

PQ REVIEW O For some 2021 will be a year to forget, for others it will be forever etched on their minds. Here’s what happened in PQ magazine world! CA E AC XAM SID E IN PS TI

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DECEMBER 2021

A new accountancy standard setting body to improve TIME TO sustainability standards was created by the IFRS Foundation – the International Sustainability Standards Board OUR SPONSORS (ISSB). The ISSB is tasked with issuing global standards for corporate disclosures around sustainability, and many believe this will help bring accountants to the forefront of combatting climate change and global warming. At the ICAEW November Advanced level sitters who booked remote exams were told two weeks before their exam that of they wanted to guarantee smooth running they needed to switch to an exam hall. The exam team had been working hard to fix the problems experienced by July sitters, but they were not able to completely resolve the software lagging for exams sat via RI. EY recently opened its doors to 1,088 new starters, reinforcing its commitment to nurture and invest in new talent. Some 46% of this cohort of 909 graduates and 179 apprentices will be based outside of London in EY’s offices. The Big 4 firm said Bristol, Birmingham, Leeds, Manchester, Newcastle and Reading had particularly strong intake as the firm continued its investment in the regional business. December 2021

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progress, the 13 will also provide members and PQs with training, support and resources to help them create their own net zero plans. The AAT said it was downsizing and moving out of central London to Canary Wharf in east London. It is all part of its new plan to help meet its net zero targets, and the shift to hybrid working. From Spring 2022 AAT’s new address will be 30 Churchill Place, E14. The move reduces AAT’s current footprint from 25,000 sq ft of space to under 11,000. Partners at KPMG UK have voted to back plans to retain and invest the financial proceeds made from the firm’s recent sales of its restructuring and pensions businesses. It means the UK firm has a £300 million fund to invest in its core services such as consulting, tax, deals and audit, and new growth areas. Partners have also agreed to a new structure that will see the firm keep more of its distributable profits, allowing greater flexibility for future investment. OCTOBER 2021 ICAS has unveiled some ambitious plans to improve diversity, equality and inclusion in the profession. It has created a Student Assistance Programme, to help CA students with a suite of wellbeing and support services, including a freephone 24/7 365 days-a-year helpline, with accredited counsellors. ICAS also re-joined the Access Accountancy programme, which was created to ensure that everyone has an equal chance of accessing the accountancy profession based on merit, not background. KPMG has unveiled bold plans to have 29% working class ‘representation’ at partner and director level at the firm by 2030. Currently, 23% of the firm’s partners and 20% of its directors are from a working-class background and working-class representation across KPMG’s Board is 22% and 14% in its Executive Committee. AAT made a big change to the Level 3 synoptic assessment, AVSY. From September 2021 it will become an assessment in two exams – ADSY and SPSH. AAT education chief ADVANCE YOUR CAREER IN ACCOUNTING

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NOVEMBER 2021 The accountancy profession joined forces to help fight the climate crisis, and is pledging to reach net zero greenhouse gas emissions ‘as soon as possible’. In all, some 13 professional accountancy bodies from around the world have committed to publishing a joint plan on how this will be achieved, and the 13 include AAT, ACCA, CIMA, ICAEW and ICAS. On top of publishing a joint plan and reporting annually to show 30

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Suzie Webb confirmed that the driver for this was partly due to ‘malpractice’. She told PQ magazine: “Unfortunately, during the last 12 months AAT has seen a spike in malpractice at training providers relating to assessments where students are required to upload materials onto the local pcs.” Webb explained that there is a clear requirement for this material to be deleted from computers by the invigilator immediately after every assessment sitting. Regrettably it became clear that this has not been happening in all cases. This resulted in a number of incidents of students uploading work from previous sittings. SEPTEMBER 2021 ACCA ACTION PLAN IS HERE ACCA said it will offer students who have their Strategic Professional exam sitting disrupted NEW ROUTE TO CIMA MEMBERSHIP because of technical issues the chance to sit another sitting “in the immediate days following exam week”. The remote invigilated contingency exams will run from Saturday 11 September to Wednesday 15 September. ACCA explained: “Students will be able to re-attempt their exams within the same twoweek window of that sitting.” Previously, this contingency had been only available for Applied Skills exam papers, but from September they will now cover all the Strategic Professional exams, too. This was one of the demands PQ magazine’s Graham Hambly took to a recent meeting with ACCA head of UK Claire Bennison and director of customer service Leigh Currie. During the meeting ACCA acknowledged having contingency exams for the higher levels was a good idea and promised to explore it as an option – well, they have, and have now made it happen. PQ magazine also called for a clear action plan, and ACCA has one of these too! Due to the growing demand for e-learning and the need for additional quality learning solutions in a number of markets around the globe, CIMA is expanding access to its CGMA Finance Leadership Program to markets outside of the UK. The CGMA Finance Leadership Program offers a new and alternative route to study and earn the Chartered Global Management Accountant (CGMA) designation and become a CIMA member. It will offer a new and alternative route to study and earn the CGMA designation and become a CIMA Member. Incorporating NQ magazine

September 2021

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ACCA will offer students who have their Strategic Professional exam sitting disrupted because of technical issues the chance to sit another sitting “in the immediate days following exam week”. The remote invigilated contingency exams will run from Saturday 11 September to Wednesday 15 September. ACCA explained: “Students will be able to re-attempt their exams within the same two-week window of that sitting.” Previously this contingency had been only available for Applied Skills exam papers, but from September they will now cover all the Strategic Professional exams, too. This was one of the demands PQ magazine’s Graham Hambly took to a recent meeting with ACCA head of UK Claire Bennison and director of customer service Leigh Currie. During the meeting ACCA acknowledged having contingency exams for the higher levels was a good idea and promised to explore it as an option – well they have, and have now made it happen.

PQ magazine also called for a clear action plan, and ACCA has one of these too! It has agreed an action plan of system reviews and enhancements to ensure it can mitigate the risks of future disruptions. It said: “We have an agreed action plan of system reviews and enhancements that takes us to the September exam session and will provide reassurance to all out students and employers.” Included in this plan is full endto-end testing ahead of September,

alongside a range of ‘continuous improvement activities’. For those taking RI exams ACCA has introduced a new interactive system test for all students, so they can check they meet the minimum requirements needed to take an exam remotely. ACCA is currently planning for centre-based exams in September in the UK. Working with partners Pearson Vue and the British Council, it has reviewed venues that had issues in June. Some

centres will not be used again, with improvements being put in place for others. When it comes to power, all the larger sites will be signed off by a qualified electrician to ensure there is no repeat of the power and cabling issues seen earlier this summer. ACCA will also ensure all machines are connected to the same network, a network diagram will be provided, and relevant testing done as close to the session as possible. As PQ magazine suggested, photographs will be provided by each exam centre, with new checks covering social distancing and cabling. In an effort to end the ‘Monday problems’ a British Council technician will be strategically located at major venues on the first two days of exam week. Finally, ACCA believes its feedback survey post-exams captures the issues that need to be addressed. This means it is vital sitters complete them.

Due to the growing demand for e-learning and the need for additional quality learning solutions in a number of markets around the globe, CIMA is expanding access to its CGMA Finance Leadership Program to markets outside of the UK. It will offer a new and alternative route to study and earn the Chartered Global Management Accountant (CGMA) designation and become a CIMA member. The CGMA Finance Leadership Program is a digital platform that

offers comprehensive e-learning and assessments covering the Operational, Management and the Strategic levels of the CIMA qualification. It is based on the same syllabus as the CIMA Professional Qualification, practical experience requirements and Code of Ethics. Students that use the CGMA Finance Leadership Program learn finance, accounting, business, people, leadership and digital skills online, in a fully digital environment, and are assessed and tested continuously as they learn. This

new learning experience includes scenario-based learning, simulation assignments, interactive exercises and videos to ensure that students can fully understand and master the content. Students also have access to mock Case Study exams to help them build confidence ahead of the official exams. The Program is an all-inclusive bundle that includes registration fees, tuition expenses, exams fees, and dues. Students can opt for one, two or three-year subscriptions depending on how much time they

believe they will need to complete the CIMA qualification. The price is £1,995 for one year, £2,995 for two years, and £3,995 for three years. There is currently a discount for current CIMA students who wish to join the Finance Leadership Program. CIMA told PQ magazine that they are looking at the opportunities to adopt this approach in the UK and are working through how best to respond to the interest they are getting from students, employers and universities requiring selfserviced e-learning.

PQ Magazine February 2022

2021 highlights the PQ

OF THE YEAR AUGUST 2021

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Just under 20,000 EY now the largest recruiter of PQs PQs were signed up by the UK’s top 75 accountancy AAT REMOTE EXAMS firms, said the new GIVEN GREEN LIGHT annual survey from Accountancy Daily. The latest figures estimated that the number of trainees studying towards a professional qualification in these firms levelled off in 2020 to 19,741. The Big 4 take on the bulk of these students, some 12,150. That, however, is 3% down on last year’s survey. Both EY and KPMG took on more PQs in 2020, with EY becoming the biggest recruiter for trainee accountants. It took on 3,831 PQs in total. AAT remote invigilated (RI) exams went ‘live,’ following a hugely successful pilot scheme. However, AAT said the RI exams will be rolled out on a phased basis, so that it can “continue to manage the risks and ensure quality”. AAT’s remote invigilation pilot was launched in September 2020 with partners PSI. And while it was due to end in December 2020, it was extended until March 2021. The Association of International Accountants (AIA) unveiled its new streamlined professional qualification. It means the number of exams for those taking the AIA accountancy route has been reduced from 16 to just 10, and for those taking the auditor route the number of exams drops from 17 to 11. Available worldwide, students can choose to study entirely online with AIA Achieve Academy, or through a combination of online and face-to-face teaching. August 2021

Just under 20,000 PQs were signed up by the UK’s top 75 accountancy firms last year, says the new annual survey from Accountancy Daily. The latest figures show the number of trainees studying towards a professional qualification in these firms levelled off in 2020, to 19,741. The Big 4 take on the bulk of

these students, some 12,150. That, however, is 3% down on last year. Both EY and KPMG took on more PQs in 2020, with EY becoming the biggest recruiter for trainee accountants. It signed up 3,831 PQs in total. Meanwhile, both Deloitte and PwC made big cuts in trainees last year. In 2018, PwC took on 4,273 trainees, but in 2020 it had reduced this to

AAT remote invigilated (RI) exams have now gone ‘live,’ following a hugely successful pilot scheme. However, AAT said the RI exams will be rolled out on a phased basis, so that it can “continue to manage the risks and ensure quality”. AAT’s remote invigilation pilot was launched in September 2020 with partners PSI. And while it was due to end in December 2020, it was extended until March 2021. Suzie Webb, director of education and development (pictured, right), told PQ magazine that the extension was to allow more students to participate across a slightly wider range of assessments and to provide AAT with a richer evidence base for evaluation. That evaluation is now complete, and RI exams are here to stay. This is a massive boost for AAT studiers who were unable to sit assessments when colleges closed in the first wave of the pandemic last year. Students were also left high and dry as individual centres made their own decision about whether they stayed open or not as the country opened up again. Assessments were still ‘being affected’ at some venues even at the beginning of 2021.

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2,713. Deloitte recruited the lowest number of trainees at 2,064. Below the Big 4, BDO grew student numbers by 18%, taking on 1,328 (1,130), and Grant Thornton recruited roughly the same number of PQs as 2019, at 991. The survey also looks at the most popular qualifications, and perhaps not surprisingly the

In all, 29 training providers were approached for the pilot, all of whom were approved for the relevant qualification being offered through the pilot. The providers also had to meet certain additional criteria, such as not having had any recent sanctions or malpractice investigations. Premier Training was one of those involved in the pilots. Operations director Rose Crockett

ICAEW dominates, as in previous years. Some 11,118 trainees are studying the ACA qualification – that’s 72% of the total. EY still favours the ICAS qualification, and this helps to make it the secondmost popular qualification. There are also 1,113 ACCA students in the top 75, 535 CIMAs, 89 CIPFAs and 1,502 AATs.

praised the move: “It is a fantastic opportunity for AAT students to sit selected assessments from the comfort of their own homes. It also means they can keep progressing through their AAT qualification.” Webb revealed that the pilot went extremely well, providing AAT with a wealth of useful data and feedback, both from students and providers. She said: “The overwhelming majority of feedback was positive, as well as identifying some areas where improvement could be made.” Pass rates for RI exams are also looking good. Webb explained: “Evidence thus far demonstrates pass rates are in line with expectations for the same assessments when being taken via the usual method in a training provider/assessment venue, but this is something we will continue to monitor and evaluate closely.” However, Webb stressed that RI exams will not suite everyone. “Many students continue to prefer to sit at their training provider venues, as this is more familiar to them,” she said. • Check out the latest AAT pass rates and our feature of Qual ‘22 inside this issue.

JULY 2021 ACCA students A CULTURE OF FEAR sitting the summer AMONG AUDITORS exams in the UK were hit with huge delays as technical issues sweep exam centres. On day Technical meltdown at ACCA UK centres one of the June sitting at least six of the 75 UK centres were affected. ACCA admitted www.premiertraining.co.uk centres in Brighton, Stevenage, Kia Oval (London), Leicester, Glasgow and Ealing had ‘technical issues’. PQ magazine said there were also problems at Portslade, Hove. June sitters talked about frozen screens and software that shut down mid-exam. The chatrooms were busy as students sat in the waiting rooms with no idea when they were starting their exam. Little did they know that they Incorporating NQ magazine

July 2021

There is a ‘culture of fear’ in audit that prevents junior auditors from speaking out, says a new report from the Institute for Public Policy Research (IPPR). The report, ‘Remaking Audit: A plan for culture change and regulatory reform’, claims that long working hours and high-pressure environments both help to discourage junior auditors from raising concerns they might have about the work they are doing. Many of those starting out on their audit careers with the accountancy firms also fear what ‘being difficult’ will do to their careers. The IPPR report says junior auditors need to be actively trained to speak up and raise concerns with the audit senior. The idea is to openly discuss failures. There must also be clear timelines to feed back the outcome of any issues junior staff raise. Shreya Nanda, IPPR economist, said: “Audit firms should openly discuss past cases of audit failure, and routinely analyse their root causes with new joiners. To this day, NASA analyses the root causes of the explosion of the Challenger

ACCA students sitting the summer exams in the UK were hit with huge delays as technical issues swept through exam centres. On day one of the June sitting at least six of the 75 UK centres were affected. ACCA admitted centres in Brighton, Stevenage, Kia Oval (London), Leicester, Glasgow and Ealing had ‘technical issues’. PQ magazine understands there were also problems at Portslade, Hove.

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Shreya Nada: ‘We need to bring the audit industry into the 21st century’

spacecraft as part of the induction for new staff. To prevent another Carillion, audit firms should learn from NASA, and do just the same. “We need to bring the audit industry into the

June sitters also talked about frozen screens and software that shut down mid-exam. The chatrooms were busy as students sat in the waiting rooms with no idea when they were starting their exam. Little did they know that they would be waiting eight hours before their exam would be cancelled. As one PQ said: “It’s Monday, so there are problems with the ACCA exams. Is it me or does

21st century by stepping up regulatory oversight and ensuring that, among other much-needed change, the failings of its internal culture are also addressed.” The report’s authors say a complete culture change within the UK’s audit industry is needed to ensure that other crucial reforms fully restore public trust in the system. Without a new approach that encourages challenge to clients and speaking up within the audit firms themselves, there is a real risk that past mistakes will be repeated. Culture change within the industry, including the dominant Big 4 audit firms, should not be treated as an afterthought but should be rigorously prioritised, defined, put into effect and tracked. The IPPR paper, the second in a series of three, comes as the government is considering reforms to the industry, proposed in its recent white paper. IPPR argues that auditors should be set a renewed public purpose of becoming a trusted referee of business so that audit is far Continued on page 4

this happen every time?” Another sitter suggested that ACCA should run a test day on Sundays before exam week so the systems are properly tested. The problems ran into day two and ACCA revealed 140 students at Ealing and Hammersmith College had their exams cancelled, and they have been offered a refund. However, students have said this is not good enough. Students

believe the ACCA now has the technology in place to offer those affected a remote invigilated exam before September. One angry but articulate student told PQ: “It was a mess, and now I have to wait three months to sit an exam I had paid for and had sacrificed for. Why am I being punished when ACCA could offer something real like a resit?” It is something the ICAEW did when their exams didn’t go as planned. • For more on this turn to page 5

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PQ Magazine July 2021

PQ Magazine February 2022

would be waiting eight hours before their exam would be cancelled There is a ‘culture of fear’ in audit that prevents junior auditors from speaking out, says a new report from the Institute for Public Policy Research (IPPR). The report, ‘Remaking Audit: A plan for culture change and regulatory reform’, claims that long working hours and a highpressure environment both help to discourage junior auditors from raising any concerns they might have about the work they are doing. G7 finance ministers agreed an ‘historic’ deal for a minimum corporate tax rate, which means the big tech companies will pay more tax. Following the meeting in London, the G7 countries have said they will ensure they abide by a global minimum corporate tax rate of ‘at least 15%’. They believe this will create a more level playing field for firms and help crack down on tax avoidance. The new rules apply to global firms with at least a 10% profit margin – and would see 20% of any profit above the 10% margin reallocated and then subjected to tax in the countries where they operate. JUNE 2021 The PQ magazine THE VOICE OF ALL PQs awards were beamed live online from Shoreditch, THE in London. Some PQ MAGAZINE AWARD 21 trophies were WINNERS awarded on the night, and every one meant a tree would be planted! Sponsor CIPFA promised to plant a tree for each winner. Our ‘PQ of the Year’ went to AAT student Simon Cordell and ‘NQ of the Year’ when to CIMA-qualified Laura Day-Henderson. On a night of many firsts, the first-ever ‘Accountancy Graduate of the Year’ award went to Lincoln University’s Emma Mellor. The Lincoln Student Management Investment Fund (LSMIF) also won ‘Student Body of the Year’. Another worthy winner was Mindful Education’s AAT Level 3 diploma course, which was named ‘Study Resource of the Year’. The massive fallout from the Chartered Accountants of Ireland ‘botched AAFRP exam’ on Saturday 24 April went to a new level when RTE’s Joe Duffy took up the case on his ‘Talk to Joe’ radio show. Duffy was concerned that many students seemed afraid to initially come forward as they were worried that, by doing so, they might not be able to become a chartered accountant. “There better not be any blowback for anyone who went public,” he warned. ICAEW launched its new Professional and Advanced Level exam software. The new software, which students helped design, refine Incorporating NQ magazine

June 2021

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MAY 2021 Plans to reduce the You are invited to the Latest awards night. So, who ACCA pass dominance of the made the #PQAWARDS 2021 shortlists? rates inside Big 4 accountancy MAJOR OVERHAUL firms and the FOR AUDIT REGIME creation of a new industry regulator took a step closer, as the government unveiled a major overhaul of the UK’s audit regime. The proposals, set out in a new white paper, aim to improve regulatory standards after the high-profile corporate failures such as BHS and Thomas Cook. On top of big changes in audit, company directors will face fines and bonus clawbacks if accounts are found to be misleading. CIMA created a fantastic new resource for students who have an unsuccessful exam attempt. The Resit Guide offers advice for both the OTs and case study exams. CIMA also feels the guide covers many aspects of exam preparation that are “all too often overlooked, such as the CIMA blueprints and time management”. The guide asks students to create a personal SWOT analysis, to help sitters reflect on their strengths, weaknesses and the threats they face, as well as the opportunities open to them. Former PwC trainee Leon Chan was convicted again for filming up the skirt of a schoolgirl on a train. In 2019 the 26-year-old was convicted of ‘upskirting offences’ when police found 1,500 images on his phone, after he was seen following girls and women at London’s Topshop store. At Sheffield Crown Court Chan admitted the charges and was sentenced to 20 months in prison. On release he will be subject to a sexual harm prevention order for 10 years. He has also been placed on the sex offenders register. Incorporating NQ magazine

May 2021

Plans to reduce the dominance of the Big 4 accountancy firms and the creation of a new industry regulator came a step closer as the government unveiled a major overhaul of the UK’s audit regime. The proposals, set out in a new white paper, are designed to improve regulatory standards after the high-profile corporate failures such as BHS and Thomas Cook. On top of big changes in audit, company directors will face fines and bonus clawbacks if accounts are found to be misleading. Minister for Corporate Responsibility Lord Callanan said: “Audit failure isn’t an abstract problem; it has real-life consequences. Thousands of jobs have been lost in the wake of collapses like Carillion, and many more lives impacted, while wider confidence in big business is undermined.” He went on: “Auditors and rogue directors who have been asleep at the wheel must be held accountable. So, as part of our

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plans, we will look to ensure the new regulator is fully equipped to take action where serious lapses have occurred.” If approved, large companies would be required to use a smaller

‘challenger’ firm to conduct a meaningful portion of their annual audit, watering down the supremacy of big-name auditors. The Big 4 could also face a cap on their market share of FTSE 350

audits if competition in the sector does not improve. A new regulator, the Audit, Reporting and Governance Authority (ARGA), which could oversee the largest unlisted companies as well as those on the stock market, will also have the power to impose an operational split between the audit and nonaudit functions of accountancy firms. Sir Jon Thompson, CEO of the FRC, said: “I welcome today’s publication as a significant milestone towards setting up a new, robust and independent regulator, which has the necessary powers to deliver its objectives, and on the ambitions set out in the three independent reviews.” The UK government also wants to encourage audit and assurance professionals to work towards a new audit profession, rather than remain a subset of the accountancy profession. When it comes to the audit itself, new reporting obligations Contuinued on page 4

APRIL 2021 ACCA is PERFECT ISOLATION HAND introducing peer assessment to Unit 8 of the Ethics and EXAM VAR Professional Skills module from 31 March 2021. That meant anyone registering for the Ethics and Professional Skills Module from this Continued on page 32 Incorporating NQ magazine

April 2021

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PQ 2021 highlights Continued from page 31 date will be asked to prepare and submit a presentation with accompanying notes. Once you have submitted your presentation for review, your presentation will be reviewed against a set marking criterion by five fellow students. At the same time, you will be asked to assess five other student presentations. KPMG’s UK boss, Bill Michael, became the centre of a media storm after he told staff in a Zoom meeting to ‘stop moaning’. On top of telling staff to ‘stop playing the victim card’, the chairman reportedly revealed he was still holding client meeting over a coffee despite lockdown, and said unconscious bias was “complete crap”. After first ‘stepping aside’, a few days later he finally resigned. Michael took over the role of chairman in 2017, but felt the scandal over his comments had made his position at the Big 4 firm untenable. CIPFA created a new e-learning module for both members and students. The module is free and provides a modern understanding of the principles of ethics along with practical insights into how ethics can influence public finance professionals. The training includes case studies, Q&As, videos and background reading that will provide a thorough understanding of professional ethics. The principles are crucial for students to learn as they begin their careers.

ICAEW’s March Professional exams in the UK were moved to remote invigilation only. Certificate Level and CFAB exams in the UK also went the same way. ICAEW said: “Student’s health and wellbeing is at the heart of our decision, ensuring they are not unduly exposed to any potential risk from sitting an exam in an exam centre or travelling to an exam. After careful consideration of the government guidelines, we feel this decision is the safest option.” The organisers of Accountex London have announced the show had been postponed ‘again’ until May 2022.The new dates for the conference and expo, to be held at ExCel London are 11-12 May 2022. The plan was for Accountex Summit North to still take place on 21 September 2021 at Manchester Central – and it did! FEBRUARY 2021 Due to the escalating pandemic in certain markets and increased THE REIGNING PQ OF THE YEAR government restrictions in the UK the ACCA said it will only be running RI exams for March in the UK. The move to remote exams covered the whole of the UK, including the Channel Islands and Isle of Man. Meanwhile, students were told by AAT that it expected its assessments to remain ‘available’, but students were told to check with their venue to ensure they will remain open. CIMA also issued a Covid exams update: “Following UK and Scottish governments’ announcement on 4 January, Pearson VUE test centres in England and Scotland are now closed for CIMA exams. Remote online exams will continue as normal.” The ‘tampon tax’ was abolished and the UK government removed the 5% rate of VAT on sanitary products. Under EU law members were forced to tax tampons and sanitary towels at 5%, in effect treating them as non-essential items. Chancellor Rishi Sunak had promised to scrap the tax in his March Budget, and on 1 January the tax was stopped. The EU plans to abolish the tax too, but proposals put forward in 2018 have not yet got agreement from all member states. February 2021

March 2021

The time is now right for the creation of a new branch of accountants, says CIPFA CEO Rob Whiteman. A key speaker at the recent ‘2021 and beyond: The New Normal for accounting Around the Globe’ conference, he revealed the sustainable/social value accountants’ time had come. In another session Professor Mervyn E King, the author of the King Report on Corporate

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Governance, claimed that calling someone a CFO has become a ‘misnomer’. “We need to welcome the Chief Value Officer,” he said. To this end, he revealed there will soon be academic courses for CVOs in South Africa and the UK, and you can expect to see the creation of the chartered chief value officer. King also revealed that by November we will see the formation of an International Sustainable

How are your data analytic and IT infrastructure skills? Well, you may need to do some work on these, as they are the top skills employers are looking for in a PQ for 2021 – after your financial skills, of course. The latest Hays Salary and Recruiting Trends survey is out, and despite the current lockdown employers said they had a ‘positive’ outlook in the short term, with nearly 90% saying their organisation’s activity levels will either increase or stay the same for 2021. More than half (53%) are planning to hire new staff which, says Hays’ UK director, Karen Young (pictured), should be “encouraging for PQs who intend to look for new opportunities over the next 12 months”. When it comes to salary rises, PQs seem to have fared relatively well. Salaries in 2020 rose by 1.5% on average, which is higher than the average for the rest of the accountancy sector (which was 0.9%). Payroll, accounts receivable and insolvency practitioners saw the most generous salary rises, of over 2%. London, perhaps not surprisingly, tops the league of PQ salaries. An ACCA and CIMA finalist working in the capital can expect a yearly salary of £40,000, around the same as 2019. ACA finalists are ‘enjoying’ around

Standards Board. This was a truly global event, with delegates from Bahrain to Zimbabwe. In all, LSBU/PQ magazine were joined by participants from over 30 countries. Just under 300 people watched live, and already over 250-plus have watched the recording on YouTube. You too can check out the whole conference at tinyurl.com/159fqtfd

£38,000, but the big jump has come in the pay packets of CIPFA finalists. In 2019 they were earning £33,500, but in 2020 it had risen to £35,000. Meanwhile, in the Midlands, a CIMA finalist can expect more pay than those from other bodies, receiving between £35,000 and £36,000 a year. At the other end of the pay scale comes Wales and Northern Ireland. Finalist ACCA and CIMA PQs can expect £10,000 less than their London counterparts – £30,000. CIPFA and ACA trainees will also start on salaries of around £17,500 on average. That’s the lowest for the whole of the UK. The survey also asked PQs how they felt about their career prospects moving forward. Just 43% said they felt positive about their career – that’s a big drop on last year’s 60%. Uncertainty is on the rise, and 43% of respondents said they now feel worried about their career prospects. Some 83% claim their employers are not doing anything to reduce these uncertainties. Another interesting result from the survey was the number of PQs who are not happy about working from home. Just 12% say they would like to be working fully remotely. And just 30% want to be working half remotely and half in the office. • Take a look at the salaries for finalists, semi-seniors/PQs and trainees on pages 18–19.

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PQ Magazine January 2021

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Sexist tax on sanitary products finally abolished

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2021 and Beyond: The New Normal for Accounting Around The Globe

Wednesday 3 February 2021 (Free)

MARCH 2021 EY’s Gaza The new normal for accounting: what the future holds offices were destroyed by an LOOKING AT POSITIVES Israel airstrike FOR THE YEAR AHEAD on 15 March. Fortunately, the building had been evacuated prior to the attack. The building was also home to Al-Jazeera, and other international press offices, including the Associate Press. A tweet from the EY Muslim Community said: “We would like to take this opportunity to once again join the United Nations call to cease all violence… We would also like to extend our hand of support to our EY colleagues in the region that may have been affected by this terrible situation. For those whose mental health may be affected by the current climate, please reach out to your local EY Mental Health team for assistance.” Incorporating NQ magazine

January 2021

Details inside

JANUARY JANU UARY 2021 ACCA’s exam week started with an outage, meaning more than 450 remote control sitters were unable to log onto their remote invigilated exams. In fact there were two outages on myACCA – one on Sunday 6 December, the night before the exams started, and another between 9.45am and 11.15am on the Monday morning. ACCA apologised profusely for the problems and released a formal statement (which we put up on the website). It explained that all the affected AA students were emailed to say they could rebook for the following week. ICAEW December Professional level sitters about to sit RI exams had to be reminded about Adobe Flash updates. An optional update had been released that removed Adobe Flash, which ICAEW exam software relied on. If trainees had uninstalled Flash then they couldn’t access the exam software for their remote exams. A petition was launched to try to reverse the ICAEW’s decision to stop printing hard copies of the study manual (it was taken down soon after we ran the story). The petition on change.org had been signed by 50 people when PQ magazine went online. Peter Sawkins, a 20-year-old accountancy degree student, became the youngest winner of the Great British Bake Off. He won the final with his ‘bonkers bubble cake’.

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PQ Magazine February 2022

Ready to get your accountancy career off to a flying start? Our NEW BSc Accountancy (Flying Start) programme will help you to do just that! The degree is a collaboration between a leading UK university - Queen Mary University of London (School of Business and Management) - and the UK's Accountancy Employer of Choice - PricewaterhouseCoopers (PwC).

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PQ AAT exams

AAT Level 3 Final Accounts Preparation Teresa Clarke explains all you need to know about partnership appropriation statements and current accounts Sidney 25% Residual profit shared

12,250 49,000

When the profit has been ‘shared’ or appropriated, we can enter these amounts into the partners’ current accounts. We enter these into the current accounts as money owed to the partners. Remember: This is money we have calculated as owed to the partners, so this is a liability in their current accounts, so a credit entry. Credit entries show what the partnership owes the partners. Debit entries show what the partners have already taken – drawings, or the partners owe to the business, namely interest on drawings. Current account: Kenneth Dr Bal c/d

£ 56,750

Cr Salary Profit share

£ 20,000 36,750

Bal b/d

56,750 56,750

Cr Salary Profit share

£ 15,000 12,250

Bal b/d

27,250 27,250

56,750

Current account: Sidney Dr Bal c/d

£ 27,250

27,250 he appropriation statement is often referred to as the partnership appropriation account. It follows on from the statement of profit and loss for a partnership business and is the ‘sharing statement’ for the profits or losses of the business. The layout of the appropriation statement will vary from partnership to partnership, so you need to be comfortable with different formats.

Example Kenneth and Sidney are in partnership. The profit of the partnership for the year ended 31 March 2021 is £84,000. The partners agreed the following:

The current accounts above show that Kenneth is owed £56,750 from the partnership and Sidney is owed £27,250 from the business. In real life, the partners will have drawn money out during the year to live. This would also be entered into their current accounts as drawings. The drawings would be debits as these reduce the amount of money that the partnership owes them. Let’s assume that each of the partners took drawings out during the year of £10,000. We can enter these drawings into their current accounts. Current account: Kenneth

Salaries: Kenneth £20,000 Sidney £15,000

Dr Drawings Bal c/d

Profit share: Kenneth 75% Sidney 25%

£ 10,000 46,750

Cr Salary Profit share

£ 20,000 36,750

Bal b/d

56,750 46,750

Cr Salary Profit share

£ 15,000 12,250

Bal b/d

27,250 17,250

56,750

Using this information, we can draw up the appropriation statement for the partnership. Hint: Imagine that we have £84,000 in a ‘pot’ and need to share it out to the partners in the manner agreed. We enter the net profit from the partnership as the profit for the year. The salaries are deducted from this ‘pot’ to leave a residual or left-over profit which is shared in the profit share ratio agreed. We are sharing the £84,000 in the way agreed between the partners.

Current account: Sidney

Appropriation Statement

You can see that the business owes Kenneth £46,750 as he has already taken £10,000 during the year. And the business owes Sidney £17,250 as he has also taken £10,000 during the year. For more examples of partnership appropriation statements and current accounts, check out my workbook available from Amazon in both paperback and as an eBook. It gives lots of examples and tasks for you to complete, with fully worked answers. Go to https://www.amazon.co.uk/dp/ B092P78Q8X • Teresa Clarke, FMAAT

Profit for the year Salaries: Kenneth Sidney Residual profit Share of profit or loss: Kenneth 75% 34

£ 84,000 -20,000 -15,000 49,000 36,750

Dr Drawings Bal c/d

£ 10,000 17,250 27,250

PQ Magazine February 2022

Tom Clendon takes you through Double Entry Bookkeeping You should be able to master the rules of double entry bookkeeping in just eightand-a-half minutes. So do you know your credits and debits? You can find Tom’s feature explaining all on page 22 of the July issue.

MICHELE BAKER – THE TRIAL BALANCE Accountancy can be simple if you know the basics! PQ magazine has gathered together the top tutors in the world to help us help you. Our back to basics video series will guide you through some of the fundamental topics of accountancy. Some of the videos even come with an accompanying article! In just six short minutes Michele Baker will explain how to create the trial balance and why you are doing it. Michele will let you know whether a balance is a credit or debit, and help you get to grips with ‘DEAD CLIC’. She’s had over 300 views already! Check out her video at: https://vimeo.com/500074449.

Sean Purcell looks at the Strategic Planning Process Sean looks at the three steps you need to understand the strategic planning process – analysis, strategic choice and strategic implementation. See pages 24-25 in the August issue for the accompanying feature. Sunil Bhandari delves into financial maths This presentation is slanted to ACCA FM and AFM students sitting the CBE exams, but will be useful for any PQs wanting to understand financial maths that bit better. See pages 20-21 of the September issue for the accompanying article. Check out these short videos at www.pqmagazine. com. Either click on the video bar at the top of the home page or scroll down to the video section

PQ AAT exams

Don’t be kept in suspense What is the suspense account? Karen Groves has the answer! he suspense account is used as a temporary account if the bookkeeper is unsure about one side of a transaction, or if the Trial Balance doesn’t balance. This applies to both manual and computerised accounting systems. The suspense account will be used until either the error has been identified, or correct double entry established. It is a holding account until the discrepancies are resolved. For your Level 2 AAT Bookkeeping Controls assessment, you may be required to open a suspense account and process entries to clear the suspense account.

Example The bookkeeper has prepared a Trial Balance, and the debits and credits do not balance. The errors need to be investigated and corrected. However, in the meantime, the difference between the debit and credit totals of £500 will be entered as a suspense account balance, to balance the Trial Balance until the errors are identified: DR £

CR £

Bank

15,000

Example While preparing the company cash book, you find a cheque stub with no details regarding who the cheque for £200 has been paid to. The bank account will be credited with £200, however the debit entry is uncertain at this stage, so a suspense account will be opened:

Cash

100

Computer

1,200

SUSPENSE ACCOUNT

Rent

5,500

DATE

DETAIL

01.01.20XX

Bank

DATE

DETAIL

Purchases

200

SUSPENSE ACCOUNT DETAIL

01.01.20XX

Bank

£ 200

DATE

DETAIL

01.01.20XX

Advertising

DETAIL

01.01.20XX

Suspense

£ 200

DATE

25,000

Advertising Wages

42,100 8,040 350 6,000

Vehicle fuel

510

Suspense

500

£ 200

62,200

ADVERTISING ACCOUNT DATE

Delivery vehicle

20,100

Sales

You later find out that the cheque was for advertising, and can now clear the suspense account as follows:

DATE

Capital

DETAIL

62,200

The error has been caused by a payment for rent of £500 being credited from the bank account only, with the debit to the rent account not entered. The accounts and Trial Balance can be updated to reflect the required adjustment:

PQ Magazine February 2022

AAT exams the PQ SUSPENSE ACCOUNT DATE

DETAIL

01.01.20XX

Bank

£ 500

DATE

DETAIL

01.01.20XX

Rent

500

DETAIL

01.01.20XX

Bank

DATE

SUSPENSE ACCOUNT DATE

RENT ACCOUNT DATE

the necessary adjustment when you establish later that day that the £100 was taken by the business owner as drawings. Today’s date is 1 January 20XX.

DETAIL

DATE

DETAIL

500

DRAWINGS ACCOUNT DATE DR £

Bank Cash Capital Delivery vehicle Computer Rent Sales Purchases Advertising Wages Vehicle fuel

DETAIL

DATE

CR £

15,000 100 20,100 25,000 1,200 6,000

Answers SUSPENSE ACCOUNT

42,100 8,040 350 6,000 510 62,200

DATE 01.01.20XX

DETAIL Bank

62,200

Question While preparing the company cash book, you find a cash withdrawal with no details regarding who the cash for £100 had been paid to. The bank account will be credited with £100, however the debit entry is uncertain at this stage. You are required to open a suspense account and then show

DATE

100

01.01.20XX

Drawings

100

DRAWINGS ACCOUNT DATE 01.01.20XX

DETAIL Suspense

DATE

DETAIL

100

• Karen Groves is an AAT tutor and AAT Course Director at e-Careers

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PQ ACCA APM exam

Evaluate and justify – and maximise your marks Geoff Cordwell explains why requirements to ‘evaluate’ and ‘justify’ are so common in the Advanced Performance Management exam he ACCA APM examination is a lot about technique and not so much about pure knowledge. In some ways students might like that idea, as it means there is less to learn or memorise. However, the flip side is that you need to be able to master these techniques to score well. The examination’s common requirements include ‘evaluate’ and ‘justify’ among others. An understanding of these verbs and an appreciation of why they are so common will really help you increase the marks you earn in a question. At the heart of this paper is the view that accountants in industry, working with performance management systems, are slow to change, slow to reflect the current situation and too willing to take the road of repeating what is already in place despite its unsuitability. It isn’t hard to understand why this might be the case. • Change is difficult, time consuming and expensive. • There is a lack of regulatory pressure, a business is not obligated to change. • The consequences of weak performance management systems are often not immediately obvious. Consequently, in my view, the examining team are trying to build skills in the student and newly qualified ACCA population that will enable them to challenge the current norm and be able to encourage change. The hope is to improve the performance management systems of businesses and make ACCA qualified accountant more valuable to these businesses. Surely, everybody would want this!

resistance to change and while change may be necessary the staff may block progress and reduce the benefits of any new system. The new social media-based approach makes incremental budgeting difficult since there will not be a ‘base’ on which to calculate next year’s budget. Equally, the budget could be based on activities or marketing approaches that are no longer used and this could lead to serious over budgeting or slack in some areas.

Evaluate The way to look at this verb is in the context

above. Is the system or approach currently being used suitable for the business in its current environment? The exam question scenario will present the business situation and explain a variety of factors for you to consider. Your job will be to take these factors and discuss them. Is it a factor supporting the status quo or is it a factor supporting change? A balance is sensible, but unsuitability is far more likely given the context we are working with. Example: Suppose you were asked to evaluate the suitability of the current incremental budgeting system in a marketing department. The scenario might say that the existing system is popular, but the type of marketing undertaken is changing with ever increasing emphasis on social media-based approaches. There are two obvious ‘factors’ in the scenario and all you need to do is identify them and comment by adding value. A systems current popularity encourages

Justify This verb is increasingly common in ACCA APM examinations. One must remember that performance management systems are not backed up by regulation and so every statement you make in the exam is merely your opinion. The examiner might expressly ask you to justify as he is trying to examine that you genuinely understand rather than have merely learnt the ‘textbook’ answer. Again, it is useful to remember the context here. The examiner wants performance managers to be able to argue for necessary change and that means you must be able to justify your suggestions otherwise staff will not accept them. Example: A common exam questions here is to be asked to justify a new KPI appropriate to a scenario. Suppose a restaurant wanted to encourage its waiters to sell more desserts. You might be asked to justify a new KPI for three marks. Importantly it is worth pointing out that two-thirds of the marks will be for the justification rather than the KPI creation. On the other hand, a poor KPI might be difficult to justify, so beware! KPI: Proportion of covers per waiter where a dessert is bought must exceed 50%. Justification: You need to justify each idea that you have had. Proportion is used (as opposed to any absolute measure) to make the KPI scalable. It is measured per waiter so that performance can be measured on a granular basis identifying good and poor performers within the waiter population. The 50% target is considered reasonably achievable, since not every customer will want a dessert, but some will be persuadable with good sales tactics. The ACCA APM exam is brilliant, it is relevant to most accountants and superbly examined. Understanding the context of it is crucial to a good learning experience, both for you and your tutor. • Geoff Cordwell is an ACCA APM specialist tutor. See GeoffCordwell.com and FMELearnonline.com PQ Magazine February 2022

limiting factor analysis PQ

1 2 3 4

Total fees $ 640 340 924 126

Rank 2nd 3rd 1st 4th

So route 3 is best? No – we need to apply limiting factor analysis based on hours of driver time. So take the total fees per route and divide by the hourly journey time:

1 2 3 4

Not in Service! Jo Tuffill explains how you should apply limiting factor analysis to services

ome people believe limiting factor analysis is only relevant for goods – not so. Let’s take the current UK delivery driver shortage, currently a major limiting factor. It turns up (or not) in unexpected places, as I found out the other day when my bus was cancelled. Let’s think of this from the bus company perspective. BusWise has a driver shortage. Which routes should it allocate drivers to? • Route 1 Swinford to Oxindon, a peak time service Bus holds 80 passengers, occupancy rate 80%, ticket price $10, journey time 1 hour. • Route 2 Swinford to Oxindon, an off-peak

PQ Magazine February 2022

service Bus holds 80 passengers, occupancy rate 50%, ticket price $8.50, journey time 0.5 hours. • Route 3 Oxindon to Airport Coach holds 55 passengers, occupancy rate 70%, ticket price $24, journey time 1.5 hours. • Route 4 Oxindon Electric City Hopper Bus holds 40 passengers, occupancy rate 90%, ticket price $3.50, journey time 0.2 hours. Assume each service has the same running costs (other than driver time), and ends with the driver (and bus) back to the depot. BusWise estimates the total fees for each of the four routes as passenger numbers x average occupancy rate x ticket price:

Fee per driver hour $ 640 680 616 630

Rank 2nd 1st 4th 3rd

Route 3 drops from first place to last! But for the other half of the marks we need to think a little deeper – or at least laterally. Think of the stakeholders for inspiration. Are certain services more popular with drivers, and therefore more likely to retain those drivers? Passengers may be more likely to give a driver a tip on the airport service, but drivers may dislike dealing with passenger luggage. And what about reputational issues? Have they sold tickets in advance for the airport service? Angry airline passengers who miss their flight could be a reputational problem. Cancelling the peak time bus could see commuters with pre-sold season tickets seeking compensation and leaving the service longer term – a far greater revenue impact. The electric city hopper could be ‘favoured’ by the local government for environmental reasons. They may even subsidise the route, or have environmental and air quality targets that hinge on it. So cancellation could cause ‘political’ issues. BusWise may also have environmental targets. In the ACCA Performance Management exam, students are required to consider the scenario and discuss all possible factors, financial and non-financial. • Jo Tuffill is the PM Tutor at FME Learn Online. Go to www.jotuffill.co.uk

PQ ACCA spotlight

Step up to make change happen Emmeline Skelton urges all ACCA students and members to united in the fight against climate change and do their bit of ACCA’s work and that of the profession. While we recognise the importance of all 17 UN Sustainable Development Goals, associated 169 targets and related indicators of success, ACCA has identified that we can make the most significant contribution towards nine of the UN SDGs. And this is where PQ readers come in, as we’re calling on everyone in the ACCA community to make their own personal commitment to at least one of the UN SDGs. We’ve collated a selection of our resources and learning materials and linked them to each of the nine SDGs we’ve made our commitment to, and these are the STEPS you can take: STEPS

OP26 in November 2021 seems to have faded into the distance. But despite the conference doors closing at the SEC in Glasgow, work continues on the agreements made at that session, and preparations begin in earnest for November 2022’s COP27 event in Egypt. This is vital work, as there’s an urgent global step change that needs to happen if we are to act together to limit temperature rises and climate change. Reaching net zero emissions by 2050 is essential if global warming is to be limited to 2 degrees Celsius or less. COP26 had the biggest private sector presence in history. For business to operate in a changing climate they must follow through with their pledges to reduce greenhouse gas emissions, embrace green technology and reach net zero. There are four topics coming out of COP that matter for accountants and the wider finance community which need immediate attention: The establishment of the International Sustainability Standards Board will help guide companies on what sustainability disclosures need to be made to supplement financial statements. This information is needed to build trust, between business, governments and society. Companies should start to disclose more information, to allow stakeholders to understand how they are addressing the impact of climate change, and importantly transforming their organisations for success in the future. It’s not just about the risks climate change presents for a business, but also the opportunities it provides. Investors, banks, and other business stakeholders require confidence in the reporting. Business cannot let the risk of poor information and greenwashing undermine trust. Today, accountants provide reliable financial information, and that reliability needs to be extended to climate related data. Organisations should have systems, processes and controls suitable to provide high quality information. Accountants are imperative to ensuring this high quality. The Glasgow Financial Alliance for Net Zero (GFANZ) announcement at COP 26 promised $130 trillion of private capital to help economies move towards net zero transition. Decarbonising will be costly. Business needs to understand how they can benefit from modern green finance opportunities. Accountants will need to understand what their banks are looking for – qualitative and quantitative. There’s a need to educate and raise the level of knowledge and expertise among all employees and in particular the finance teams, on the importance of ESG and climate action. Reassuringly, sustainability is fully integrated into our qualification, preparing the future generation of accountants to recognise the challenges and address the impact in organisations. Some of the topics we cover include Integrated Reporting <IR>, a framework we have adopted and championed for over a decade; environmental management accounting; and environmental taxation considerations. For the next few months, we’ll be focusing on this necessary step change that needs to happen, and we want PQ readers to be part of that. Of course, we’ll always place sustainability on our agenda as it’s a core part

Share with your connections

Use your influence to raise awareness of the UN SDGs in your workplace with your team, colleagues, and clients or across your personal and professional connections

Take time to upskill

Be proactive in keeping your knowledge and skills up to date so you continue to add value to the world

Ethics and fairness

Understand your role in creating a more sustainable and transparent organisation, fight corruption and build trust

Power of accountancy

Contribute your key business and financial skills to helping organisations find innovative solutions and take sustainable and ethical decisions

Steer positive change

Share success stories, speak up, build connections with like minded people, be flexible and persistent, if you’re not a leader speak to those who are

Our Rethinking our World Hub has what’s needed to help you take these steps. For example, UNSDG 4: Quality Education is about ensuring inclusive and equitable quality education and promote lifelong opportunities for all. Our commitment to this is to offer access to a quality finance and accountancy education that is free from artificial barriers. And the resources we provide include Professional Insights research to help you understand issues like digital and meaningful work, links to CPD and webinars, our online FinTech pack of learning and links to our Career Navigator. We do the same for each of our nine commitments, with clear signposting to the support we offer to help others make a change too. This is the start of a call to action, and the steps taken can be large or small. But the important thing is to make that step, even if it is a tentative one. Find out more here https://tinyurl.com/3ye27z4m • Emmeline Skelton is head of sustainability at ACCA

PQ Magazine February 2022

careers PQ

Dear Karen Ask PQ’s agony aunt Karen Young when you need expert advice. Email your dilemma to graham@pqmagazine.com, and he will pass on the best ones to Karen THE QUESTION The Christmas break led me to realise that I want to invest more into my professional development. Do you have any suggestions for how I can progress my career outside of my day job?

Interview question time You know they are coming, so why aren’t you ready for them? Here are some of the common ones and ideas about what to reply… Q: Tell me about yourself. The interviewer wants to hear a short summary of your qualifications, career history and skills, in particular what you will bring to the new role. Q: Why are you looking to leave your current position? Be careful not to be negative. Try to focus on the positive reasons, such as a new challenge with more responsibility, or the need for change if you have been in

your current role for a long time. Q: What do you enjoy about your current job? Try to focus on things that will be part of the job for which you are applying. Make your interests sound varied and diverse. Q: What have been your achievements so far?

Think about recent work achievements, for example projects you have been involved in, what the results were, how they impacted on the business, etc. Q: What are your strengths? A common question, so prepare your answer. Think about three or four of your main strengths and how they would benefit your new employer. Examples include technical proficiency, flexible and positive attitude. You may also be asked about weaknesses; everyone has some. A weakness is not always negative. Try to briefly explain what you do to overcome it.

In brief

KAREN’S RESPONSE There’s more to professional development than what your organisation offers. Online learning of every description is exploding right now and, as a result, there is no excuse for you not to continue to learn, grow, and hone your skills to help you prepare for your next job. That said, you shouldn’t ignore the immense benefits that both old-school organic networking and online networking can have on your career progression. Have a look at some professional finance organisations or groups that you can join. You can then stay up-to-date with conversations that the members are having and what journals are being published. Signing up to LinkedIn groups can also allow you to join in with these conversations. You may take this networking a step further and look to take on a leadership role on a committee or for a local organisation, to showcase the skills you use both inside and outside of your day job. You could also use this role as a tool to target your professional association to raise your visibility among colleagues and those you are in contact with on LinkedIn – so network whenever you can! • Karen Young is a director at Hays. She is passionate about helping people to find the right job, and companies to find the right person PQ Magazine February 2022

Pap Typeface matters Good design can bring real benefits to a business by helping it communicate more effectively. The font you use on your CV is equally as important. There are thousands of fonts to choose from; however two – Times New Roman and Arial – are the still the go-to fonts for students looking to give their CV a professional polish. In a recent survey Times New Roman was voted the ‘most trustworthy’ font (36%), followed by Arial (26%). A whopping 88.5% of those surveyed believe that prospective employers pay attention to the fonts used on CVs, hence the use of Times New Roman – although many said it was ‘serious but bland’.

Pap Video calls are bad! They may have kept many businesses afloat during the pandemic, but video calls have been bad for our wellbeing, says an international study. The researchers found that video calls and messaging apps had

an adverse effect on mental health as people were unable to meet in person – and this was particularly the case for younger people. Dr Matha Newson said: “We don’t groom each other

anymore but we laugh and we joke and we hug. While we try to do these things online, nothing trumps face-to-face contact.” Pap Back to the office Employers can reject claims that a fear of catching coronavirus allows staff to refuse to return to work, using the philosophical belief argument. In a recent case an employment law judge ruled that health and safety concerns do not qualify under equality legislation as a ‘belief,’ and therefore workers can be docked pay if they refuse requests to return to their workplace. The ruling is likely to give bosses more confidence when encouraging staff back to the office in the coming months.

The PQ Book Club: books you should read Provoke: How leaders shape the future by overcoming fatal human flaws, by Geoff Tuff and Steven Goldbach (Wiley £21.99) This book is about looking forward and working through the natural human instincts that keep people frozen in place. It is about gathering the will to act in the face of deepening uncertainty – and to do something! Both authors work at Deloitte, and while they look at how executives take action in the corporate world, we really loved the profiles of provocateurs (part 3). One comes from the

world of non-profits, one from the civic sector, and one from the public and private finance sector. There is a connective thread that binds them – all three stories revolve around the world’s continuing mandate to build organisations and societies that are more diverse, equitable and inclusive and that, says Tuff and Goldbach, enablse more positive human connections. After all the serious stuff the authors also stress the ‘importance of fun’ in business. There is an awful lot of seriousness out there and, in their opinion not enough levity.

Almost all companies have a reputation to uphold, and take themselves at least a little too seriously. Of course, many are doing (very) important work. But they stress there is no law that says that doing important work has to be done by people who aren’t having fun doing it or that the work can’t be made to be more fun in some way. When was the last time you smiled at work? PQ rating: 4/5 We liked being provoked! 41

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

The largest tax bill ever Elon Musk has revealed he will be paying quite a lot in tax in 2021. The Telsa CEO said in a tweet: “For those wondering, I will pay over $11 billion in taxes this year.” One report said that Musk had already paid $7 billion in state and federal taxes last year, and another $5 billion was due by 1 January 2022. The reason for the big bill is that in November Musk started selling off billions worth of Tesla shares, for which he has to pay a combined tax rate of 53%. He doesn’t take a salary or cash bonuses as Tesla CEO, and instead is paid in stock. It has been reported that Musk paid zero income tax (federal) in 2018 and only paid $455 million in taxes in the previous four years as his wealth grew by $13.9 billion.

Excelling at Excel Ever thought of being a Microsoft Excel influencer? Kat Norton, or Miss Excel as she is known to her friends, has over one million followers on TikTok and Instagram. Add a bit of software training (Excelerator Course) and maybe like her, you could be generating up to six-figure income a day – yes, that’s every day! She started all this in June 2020, and still uses her iPhone and consumer software to make her videos. Her first video was just 14 seconds long, explaining Excel’s ‘lockup’ function. She did this while lip-syncing to X Gon’ Give It To Ya by the American rapper DMX. Check out miss-excel. thinkific.com.

Time to file your ’elf assessment? What were you doing on Christmas Day? Well, HMRC says it received 2,828 Self Assessment tax returns on 25 December this year. That’s up on the 2,700 sent last Christmas. The peak time for filing was 12.00 to 12.59 when 227 returns were received. In total, 31,000 taxpayers submitted their 2020/21 tax return between Christmas Eve and Boxing Day. HMRC believes for thousands of taxpayers filing their tax return has become part of the Christmas tradition, up there with watching the Queen’s Speech. The deadline of Self Assessment filing is 31 January 2022.

Backpacker's tax victory

Two of our former PQ magazine Tutor of the Year winners recently caught up after being in lockdown. Sean Purcell and Tom Clendon have been mates (and friends of PQ magazine) for a long time, and we recently came across a very old picture of them in earlier times. Loving the jackets and ties boys!

Australia tax authorities had to climb down after British traveller Catherine Addy won her battle for equal treatment when it comes to tax. She claimed in the High Court that the tax authorities were discriminating against her because of her nationality, and contravened a double taxation agreement the Australia has with the UK. Addy said she should have received the tax-free threshold and a lower tax rate after that. Instead, she was forced to pay 15% on all her earning up to £20,200. It all means that backpackers on working visas (417 or 462 since 2017) may now be able to have their Australian tax assessment reviewed. But where were the tax professionals here – why did it take a backpacker to get tax justice? The cynics may say that maybe they didn’t see any profit in helping!

’ WEV E

GOT THE L OT

Believe it or not!

Time for battleships

Meet the man who has made a model of the Empire State Building – in cheese. Marvel at the heart-warming story of the dog that adopted five kittens. Read all about the curse of Ötzi, the 5,000-year-old iceman mummy. Be amazed by the strange and extraordinary sea creatures that create their own light. Bursting with brilliant facts, fantastic stories and eye-popping photographs, this all-new edition of Ripley's Believe It or Not! 2022: All True! All Weird! All Wild! will entertain, inform and flabbergast you. Your 2022 won’t be complete without it. To be in with a chance of winning one of three annuals we’re giving away email your name and address to giveways@pqmagazine.com. Head up your email ‘I believe!’.

This brand-new book contains 100 battleships puzzles, split into easy, medium and hard sections. Battleships is a lovely little logic puzzle with the following rules: you are given a fleet of ships, and you must deduce where they are each placed in the grid. Ships are surrounded on all sides by water. To help you find where ships are placed, there are numbers around the outside of the grid. These numbers tell how you many ship segments are to be found in each row and column of the grid. There are usually also some ship segments given in the start position to help get you started. We have three books to give away. To be entered into our free draw simply send your name and address to giveways@pqmagazine.com and we will do the rest. Head up your email ‘Battleships’.

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 11 February 2022. The main draw will take place on Monday 14 February 2022.

TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM 42

PQ Magazine February 2022

PQ magazine, February 2022

Articles inside

ACCA spotlight Why all

Limiting factor analysis

Fun The lighter side of life; and more great PQ giveaways

Careers Answering standard questions in an interview; some more wise career advice; and our book review

ACCA APM exam Why

CIPFA spotlight What does

A question for Tom Top tutor

CIMA spotlight How to best

ACCA pass rates How bad

Sustainability ISSB appoints

Have your say How we can

Keep it Simple In the latest in his series exclusively for PQ, Neil Da Costa looks at IHT issues

New CIPFA codes What are

New chair for watchdog?

A Master’s degree Boost your