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February 2024

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A ‘ROBUST’ SET OF ACCA EXAM PASS RATES

The December pass rates are in, and ACCA is calling them a ‘robust’ set of results. In all, 132,301 exams were taken and 4,503 students completed all their exams and now move to affiliate status. Some 49% of those sitting the Advanced Taxation paper passed – a record pass rate for this Strategic Professional Option. The AFM pass rate also held steady at 45%. However, some two in three candidates are still failing the APM and AAA papers. Since spring 2021 neither of these papers pass rates has gone above 34%, except APM in March 2023, when it rose to the dizzy height of 35%. Meanwhile, the SBL pass rate was the highest ever at 52%, and exactly half of those sitting SBR passed.

The Applied Skills pass rates held steady this time around too. Those sitting the Taxation paper manged a 54% pass rate, with the Audit and Assurance paper having the lowest pass

rate at 41%. PM wasn’t far behind at 42%, so no real change there. Alan Hatfield, executive director – content, quality and innovation, said: “Huge congratulations to the students who have achieved success in this session, it’s always pleasing to see so many students focus on their journey towards ACCA membership as demonstrated by this robust set of results.” He also reminded students that pass rates remain up to 20% better for students who use the ACCAA exam Practice Platform. ACCA DECEMBER 2023 PASS RATES: BT 85%; FA 69%; MA 68%; LW 78%; TX 54%; FR 48%; PM 42%; FM 48%; AA 41%; SBL 52%; SBR 50%; AAA 34%; AFM 45%; SPM 34%; ATX 49%

HOW LONG WILL IT TAKE? Some 184,642 accountancy students are still trying to get qualified five years after they started their professional studies. That is 31.54% of all the PQs signed up with ACCA, CIMA, CIPFA, ICAEW, CAI, ICAS and the AIA. The concern is that this percentage seems to be creeping up each year. Back in January 2022, the number of students who had been studying for more than five years was 30%. The figures, compiled by the Financial Reporting Council every year, show there are 585,385 students studying worldwide with these seven bodies, which are based in the UK and Ireland. And while ACCA may have the most students still studying with them and paying their subscriptions

after half a decade at 143,609 (or 32.79%), this is not the biggest percentage. That ‘honour’ goes to CIPFA, where 51.93% of its students (3,209) are still trying to get qualified five years after starting their journey. At CIMA the figure of 31,861 represents 36.38% of the student base. In the past, some experts had ventured that the rise in the length of students’ studies was due to the pandemic; however, postpandemic the number still seems to be rising. It isn’t taking everyone five years to get qualified, though. CAI, ICAEW and ICAS have over 85% of their students complete their training in four years or less. Only 14%, 12% and 12% of their students respectively were registered for more than four years as at 31 December 2022. The FRC’s key facts and trends survey also shows that since 2018 all the accountancy bodies,

except CIPFA, have increased their percentage of female members worldwide. That said, at the ICAEW just 31% of members are women. Meanwhile, CIPFA has 33% members who are female and ICAS 35%. At ACCA some 48% of its members are women. That means, over four years between 2018 and

2022, overall female members increased just one percentage point – from 37% to 38%. However, the overall percentage of female students (50%) is greater than the overall percentage of female members by some distance. ACCA had the largest percentage of female students in 2022 at 60%.

Careers in Accountancy Your career, your future https://shorturl.at/istFS

contents PQ

February 2024

IN THIS ISSUE A note from the Editor Welcome to the latest PQ magazine, chock full of stories written just for you. This month our news covers everything from male genitalia to AI revealing that fingerprints are not unique – seriously, you aren’t going to read stories like these anywhere else! We also run our unique rule over the latest exam results from ACCA, ICAEW and CIMA. And we take a look at CIPFA’s ‘bold’ new business plan, and delve into AAT’s latest salary survey. All the accountancy body CEOs have also written for us, looking at the year ahead. There are lots of events happening out there too! The Festival of Accounting and Bookkeeping takes place on 13-14 March at the NEC Birmingham, and we have to admit it looks FAB! Sign up at https:// www.fab.uk. Before that we are organising a ‘Careers in Accountancy’ half-day conference with Queen Mary University of London, on 28 February. You can sign up at https://shorturl.at/istFS. This is a face-to-face event, but if you want a more stay-at-home-with-a-couple-of-Lords happening then our 7th annual online conference with LSBU will be for you. See http://tinyurl.com/2p38xp6p Last but by no means least is our ‘No accounting 4 the love of football’ evening on 21 March, with speakers from the FA and Deloitte. We are running this event with CASSL and you can join us by going to https://shorturl.at/cikO0. Happy reading and maybe I will see you at one of our events very soon. Graham Hambly, Editor and Publisher, PQ magazine News 4

CIMA OT pass rates So what were the toughest Objective Tests, and which had the best pass rates? Swiss audit initiati ve UK and Switzerland mutually recognise statutory audit qualifications

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Deloitte recr uitm ent drive Big 4 firm beefs up drive to recruit young accountants

off; Gen Zs do have a lot to offer; and why ChatGTP is underwhelming. Plus our social media round-up 16 2024 in focus The accountancy bodies’ CEOs share their thoughts on the coming 12 months 19 PQ Awards 2024 The clock is ticking, but you’ve still got time to enter accountancy’s most prestigious awards. So what are you waiting for? 20 Football finances Mo Khair examines financial mismanagement at one of the world’s most famous football clubs 22 CIMA spotlight How to harness the power of the number three to help you get that all-important pass

33 ACCA exams How to develop commercial acumen, a professional skill students often struggle with 35 AAT exams Teresa Clarke explains all you need to know about disposal of non-current assets 36 Fintech frontiers How accountants should prepare for the future of fintech

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39 Careers CFOs optimistic about prospects for 2024; our Agony Aunt dispenses some more career advice; and our Book Club review 40 Fun The lighter side of life – and accountancy The columnists

25 Sustain ability University of York study finds comparisons between firms significantly reduces toxic emissions and environmental violations

Lisa Nelson Why improving your Generative AI skills will pay dividends

26 ACCA spotlight Be prepared – get to know your exam format and the available study resources

Prem Sikka We can have fit-forpurpose audits in the UK 8

AAT salary sur vey AATs enjoy pay rises across the board, with London still the toppaying region

27 ACCA AP M exam Brigita Petrova explains why APM sitters must address the question properly or fail

ICAEW advanced level results Case Study and Corporate Reporting pass rates down on August results

28 ACCA PM exam Jean-Paul Noel-Cephise on what makes PM so hard and outlines what the examiner wants

10 ACCA disci plinary Student’s expletive-laden rant leads to expulsion from the association

29 Apps review In the first in a new series, Francesca Cullaney reviews the apps that could really work for you

12 Tech news BDO UK launches secure generative AI platform exclusively for staff

30 AAT level 3 Karen Groves looks at imminent changes to HMRC’s filing and penalties regime

Features, etc 14 Have your say It’s shocking that young accountants are bunking

32 Net Zero goals Finance sector faces a green skills gap, says new research from PwC

Robert Br uce Is there an upside to big audit work? 6

Ann a Kat e Phelan The Post Office scandal and the need for vigilance 10 Eddie Herbert Help the planet – and your bottom line 12

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LISA NELSON The year belongs to Generative AI ChatGPT launched in November 2022 and with developments and other models emerging almost daily, Generative AI has become the most talked about technology of 2023. The speed of its adoption and scale are impressive, with some estimates suggesting the market to already be worth around $45bn, growing to $1.3tn over the next 10 years. But what of its uses and implications if you’re studying and working as a finance professional? As I mentioned in an article late last year, it’s an excellent resource for students. Capable of explaining complex topics in different ways, answering technical queries and showing how answers can be improved. Just be careful not to break any plagiarism rules! The professional bodies have been busy writing articles about how it can help in the workplace, for example by reducing repetitive tasks, improving forecasting and assisting in the production of more insightful reports. But they have also been keen to point out their concerns, of which there are many – breaches of copywriting and GDPR, hallucination (errors), bias and the use of deep fakes. However, in terms of the impact on exams, little has been said. This year will continue to be dominated by Generative AI as organisations bring it into everyday use and better understand its impact and subsequent implications. My top tips for 2024 are to improve your skills in Generative AI, become an expert if possible, and apply a healthy level of scepticism – and watch out for deep fakes! Lisa Nelson is Dir ector of Learnin g at Kaplan

CIMA OT pass rates are in

It’s been a year since CIMA posted its last set of OT pass rates, and a new set covering the beginning of November 2022 to 30 November 2023 are now out. P2 has the dubious distinction of still being the OT with the lowest pass rate – just 44%, followed by F2 on 51%, and P1 on 54%. However, if you look at the pass rates a year ago P2 was 43% and P1 52%, so both are marginally up this year. If only all the papers had the E pillar pass rates! E1 was 84%, E2 81% and E3 74% this time around. Perhaps surprisingly, the P3

pass rate rose one percentage point year-on-year to 59%. Stephen Flatman (pictured),

Vice President Examinations – Management Accounting, told PQ magazine: “I would like to congratulate all the candidates who passed their objective test exams this time around. For those who missed out, have a look at the exam resources on CGMA study hub to support your studies.” CIMA OT PASS RATES: E1 84%; E2 81%; E3 74%; F! 80%; F2 51%; F3 56%; P1 54%; P2 44%; P3 59% The pass rates cover the 2019 Professional Qualification objective test sittings between 1 November 2022 and 30 November 2023. This data is updated annually.

CIPFA will be ‘bold’!

CIPFA has promised that it will be bold and say what it thinks in its new two-year business plan. It said it will speak truth to power and continue to shape the debate on public services and public finance. It has promised to help develop students, members and the global public finance community by providing lifelong learning skills, expertise and knowledge. To do this it wants to modernise what it offers, so it can leverage

new and emerging technologies. The institute says it will implement qualification portability and dual membership with its partner institute, the ICAEW. As part of the proposals, CIPFA will also launch new qualifications in local government audit, anticorruption and risk management and performance audit. CIPFA’s CPD offering will be refreshed and a new platform is being built for this.

An awards night you don’t want to miss The award season has arrived. The Golden Globes have come and gone, and the Academy Awards take place in 10 March. Then it is the ones that really matter – the PQ magazine awards 2024! There is still time to get your name on the shortlist – you have until 8 March to get your nominations in. It will be our 21st awards

ceremony and with 23 ‘PQs’ up for grabs on the night we really are giving you the chance to shine.

You can download the nomination form from the website at www.pqmagazine.com. Just click on ‘PQ Awards’ button on the home page and the form is there. You then have up to 500 words to make your case. 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.

In brief Around the world in 80 days! The now-famous CASSL ball is happening on 24 February at ICAEW HQ in Moorgate Place, London. The ball will include a live band, a Britain’s Got Talent Finalist magician, casino tables, photobooths, a three-course meal, champagne, wine, talks from the presidents of the LSCA and vice presidents of ICAEW, and many more honourable guests and partners! All chartered accountancy 4

students are welcome from all firms and bodies, not only ICAEW students. Attendees are being encouraged to come in traditional dress or black tie. Tickets are going like hot cakes, but you can still sign up at http:// tinyurl.com/mtk6tzvt. Oh, and PQ magazine will be there too. Looking ahead in 2024 Chartered accountants now more than ever have a vital role to play in helping society and economy achieve net zero, says

outgoing ICAEW CEO Michael Izza in his new year message to PQ magazine readers. Izza will be retiring in March after 18 years at the helm. He has no doubts the ICAEW will flourish under new boss Alan Vallance. Meanwhile, ACCA CEO Helen Brand said the publication of the first two global sustainability reporting standards was a historic step forward, but stresses it is just the beginning of the story. We also have the views of AAT’s Sarah Beale, CIPFA’s Robert

Whitman and CIMA’s Andrew Harding on what lies ahead for us all in 2024. See page 16 AAT announces new member of exec team AAT has appointed Jonathan Gorvin to its executive team. He took up the role of Executive Director of Strategy and Compliance on 15 January. Gorvin said: “I am delighted to be joining AAT at such a pivotal time.” PQ Magazine February 2024

PQ news PQ

UK and Swiss agree mutual recognition The UK and Switzerland have mutually recognised their statutory audit qualifications, allowing auditors to work more easily in each country, with the hope of boosting both countries’ audit markets. The arrangements have been made between the Financial Reporting Council (FRC) and the Federal Audit Oversight Authority (FAOA) – Switzerland’s audit authority. The agreement provides a process by which auditors who have obtained professional audit

qualifications and registration as a statutory auditor in either the UK or Switzerland (audit expert) can apply for recognition of their qualification and audit rights in the other country. To enable this, the FRC assessed the Swiss statutory audit qualification as equivalent to

AAT student conference is back

The free three-day online AAT AccelerAATe Conference is back for 2024, and will run from 24 to 26 January. AAT has lined up a range of fantastic speakers to help support, guide and motivate you with your studies, as well as your career development. It all kicks off with a panel

discussion with top tutors giving their tips for successful studying. On the panel are Bame Lesego Boitshoko from Botswana Accountancy College, Caroline Pauling from Peal Accountancy Training, and Nick Craggs from First Intuition. Later on the first day you can hear Mazuma’s Lucy Cohen discuss

UK statutory audit qualifications. The FRC explained it prioritised mutual recognition discussions with Switzerland based on its large financial services sector, the size of its audit market and the country’s strong trade relations with the UK. The arrangements follow an umbrella agreement on Recognition of Professional Qualifications between Switzerland and the UK which was signed in June 2023 and comes into force in 2025. The move follows a similar deal signed with New Zealand last year. how you can develop your personal brand. On Thursday 25 January, James Wright from the University of Lincoln will talk about AI accounting tools and techniques, and Rachel Harris will examine how to maximise your productivity. Both have won PQ magazine awards! The conference will end with Traci Williams of Excel Ace explaining how you can master Excel. Book at http://tinyurl.com/hc8dpud2

AROUND THE WORLD IN 80 DAYS ANNUAL BALL

Join The Chartered Accountants Student Society of London on the 24th February 2024 for a themed evening of celebration and networking at the prestigious Chartered Accountants Hall. Our night will include a three-course dinner, champagne, wine, Britain’s Got Talent magician performances, live band, casino entertainment, charity auction, speech by the VP of ICAEW and more! You will also have the opportunity to network with young professionals across different industries, as well as senior members of the ICAEW. Everyone is welcome regardless of your role, background or location! Dress code: Traditional wear or black tie! Book your tickets now via our Eventbrite or ICAEW website

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Are you football crazy? PQ magazine has joined forces with CASSL to offer you a free evening in March talking about all things football finance (no VAR is operating on the night!). The line up includes Kieran Maguire (pictured) of the Price of Football podcast fame, Charlotte Hickey, senior finance business partner at the Football Association (ACCA qualified), sporting legal expert Patrick Way KC, and a spokesperson from the Deloitte Sports Business Group, which puts together the Deloitte Football Money League. The venue is the Crypt on the Green, London, and kick off is 6.30pm on Thursday 21 March. But you will need to sign up for your free ticket if you want to get in. A big thank you to HMRC Enquiries, Investigations and Powers magazine and ACCA for supporting this event. To sign up go to https://shorturl.at/cikO0

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EVENTS@CASSL.UK CASSL_ICAEW

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ROBERT BRUCE Is there an upside to big audit work? It used to be that word would get about. A company, or its chairman, would be straying from the straight and narrow, usually because of the outsize ego at its helm. The audit firms would, unofficially and very discreetly, get together and swap notes. Auditors would stay in place, but a metaphorical red flag would have been raised in people’s minds. Always dangerous, but self-policing had a place in the audit world. Reputations could come and go if things went badly wrong. And that applied equally to auditor and auditee. Just as a balance sheet balanced so did the way in which people went about their business. And if things got dangerously out of kilter there was always the implicit threat that the auditor might abandon ship. These days greater regulation and damaging publicity long after any horse has bolted produce unintended consequences, as you might expect. Two trends are now plain. The first is partners deciding that, contrary to the hopes of the regulators, they don’t reckon it is worth powering their firm onwards and upwards into high-profile work. The regulators may wish to expand the number of firms at the top end of the market. The firms now just see the downside. And the second is that much as they used to in the days of unofficial word about client consequences firms simply don’t take up the work. Or as one senior American accountant put it the other day, they “are challenged to get people to want to do the work”. Robert Br uce is an aw ard-winnin g wri ter on accountan cy for The Times

Spring into Deloitte More undergraduates will benefit from Deloitte’s three work experience programmes in 2024. The ‘Spring into Deloitte’ internship programme, the Summer Vacation Scheme and the Industrial Placement programmes will now provide over 1,000 opportunities for students to gain valuable insights and hands-on experience in the world of professional services. Deloitte has doubled the size of its Spring into Deloitte programme for undergraduates who are in the first and second years of study. The programme, now in its tenth year, will welcome 400 people in March and April 2024. Those who

complete Spring into Deloitte could be offered a further opportunity on the Summer Vacation Scheme in their penultimate year. Nearly 500 opportunities are also now open for undergraduate

Win an AAT scholarship We still have four AAT scholarships on offer for students who want to get qualified. PQ magazine and e-Careers are fighting back against the cost-of-living crisis with our scholarship offer that pays for your study for a whole level. So far, Jack Hancock and Khatra Ali have received their scholarships. To be considered all you need

to do is tell us why you think you should be given the free scholarship. Send your entry to

students in their penultimate year of study to apply for Deloitte’s four- to six-week Summer Vacation Scheme. Students will get handson experience working with clients and projects through a structured programme of learning, and potentially gain a place on Deloitte’s graduate programme. Places are also open to over 100 students who are required to complete a work experience placement as part of their university degree on Deloitte’s 12-month Industrial Placement programme. Students will train and work alongside the firm’s first-year graduate intake. scholarships@e-careers.com, with your full name and the level you want to study. Once entered you will be kept in the draw for all the available scholarships left, so if you don’t win it the first time there are still other chances. PQ magazine editor Graham Hambly is on the judging panel which helps to award the scholarships. Remember to enter by 20th of this month for the chance to win a full-funded AAT course.

The Accountant’s Odyssey The line-up for seventh annual online conference with London South Bank University is complete. We have two Lords ‘a leaping’ in the form of Lord Bilimoria and Lord Sikka as our keynote speakers in the morning and afternoon sessions. Professor Richard Murphy and Professor Carol Adams will also be on hand

to discuss accountancy education and sustainability reporting. In-between we will be looking at ChatGPT, the future of finance and Making Tax Digital. It promises to be a fantastic day and it all happens on Wednesday 21 February. To sign up for your free place go to http://tinyurl.com/5yt2jkek. A big thank-you goes to our

supporters – AAT, ACCA, AICPACIMA and Rogo.

In brief You have to love audit! Many people dismiss audit as boring but Vivek Jain (pictured) says audit is ‘cool’! He admits he may be biased because his dad was an auditor, his sister is an auditor and he is married to an auditor! Jain is the head of internal at Lloyds Bank Group and was speaking at one of the awardwinning seminar series produced by Queen Mary University of London and PQ magazine last year. In the past 25 years he says he 6

and learn something new. You are actually paid to learn things and ask questions.” You can check out The Future of Audit seminar at http://tinyurl.com/2jswcth2

has never repeated the audits he has done. He explained: “Every couple of months you get new things to do, talk to new people

BDO revenues up 16% BDO has posted a 16% increase in revenues to £935m for the FY2022/23, with significant growth across all three of its service lines of audit, tax and advisory. During the year, BDO took on

a further 500 new people across the UK, building the business to nearly 7,500 people in 17 regional offices. The firm recruited 650 school leavers and graduates in the financial year and entered into a new partnership with Teach First to help improve social mobility. BDO operating profits grew 5% to £198m. Average profit per equity partner (PEP) was down 6% to £609,000, reflecting on both additional investments and increased partner numbers. PQ Magazine February 2024

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PREM SIKKA We can have fit-forpurpose audits Earlier this month, the ICAEW chief executive urged the Financial Reporting Council (FRC) to be lenient in levying sanctions against big accounting firms for delivering deficient audits. He said that the increased level of fines in recent years and the public rebuking of individual audit partners could “effectively end someone’s career”. The FRC’s fines on firms are puny, and auditing standards are not that demanding. After more than a century of conducting audits accounting firms still struggle to deliver robust audits, as shown by numerous scandals. In any other industry, manufacturers of poor products would be driven out of business but that does not apply to audit market reserved for accountants belonging to a select few professional bodies. Law compels companies, universities, trade unions, hospitals, housing associations, local councils and others to purchase audits even though the product continues to be deficient. The threat of lawsuits could improve audit quality but auditor liability laws are weak. Anyone selling packets of toffees owes a ‘duty of care’ to potential consumers, but such laws don’t apply to audits. There is lack of transparency about the conduct of audits and competition at the top-end is weak. To raise audit quality, government can consider increasing competition by breaking-up the big firms and make it easier for injured stakeholders to sue negligent auditors. Firms should be required to publish information about the composition of audit teams, time budgets, audit contracts, audit tenders, management representations and forced to act exclusively as auditors. I wonder who would oppose this? Prem Sikka is Em eritus Professor of Accountin g at the University of Essex

AAT salaries on the rise The latest AAT salary survey show salaries really are on the up, with the stats also revealing that it really does pay to get qualified! While generally salaries rose 14%, compared with the last survey in 2021, the greatest increase from one level to the next is from Level 4 students to MAAT. Here pay increases from £26,000 to £35,000 (a 35% increase). There is also a 26% rise when members move from MAAT to FMAAT, with the average salary for FMAATs coming in at £44,000. London remains the top-paying region in the UK across levels. The average student salary in the UK is now £25,000, up from £22,000 two years ago. In London that student average rises to £28,100. Wales

has the lowest student pay, with an average of £23,000. And while the study shows male MAATs and FMAATs are paid 9% more than women, female students earn 11% more than their male counterparts. That translates to an average of £26,000 for female

Hornby Academy recruit achieves chartered status Seven years ago JF Hornby & Co, twice winners of the ‘UK Accountant of the Year Award’, set up an academy to give young people leaving school an alternative to expensive university degrees. Now one of its first recruits to the Hornby Academy, Esther

Klijin (pictured), has achieved chartered accountancy status

students, compared with the £23,500 paid the male students. AAT male members are paid £38,500 on average, compared with £35,000 paid to female members. To find out more and to use the salary calculator go to http://tinyurl.com/4y93e8ur with the ICAEW (as well as a gaining a degree). She said: “It has been a long journey with some setbacks on the way, but I have always had a lot of support from my colleagues which has helped me achieve my dream. “Gaining chartered accountant status after seven years of work has not really sunk in yet – but the main thing I feel is relief that I don’t have to sit any more exams for a while!”

No inspections for local government There have been ‘unacceptable delays’ in financial reporting and audit in the local government sector, the Financial Reporting Council has said. There were over 900 incomplete local government audits in England at the end of September 2023, which in turn severely restricted the

FRC’s ability to inspect high-risk audits. The FRC inspected just 10 audits in 2023 – six NHS and only four in local government – compared with its usual 20. With most local government audits incomplete, often for multiple years, the FRC said it had to significantly reduce inspections to

allow audit firms to focus resources on clearing the backlog. However, to support the measures being developed to clear the backlog, the FRC announced its plans to perform no routine inspections of local government audits for financial years up to 2022/23, unless clear public interest demands it.

UHY Hacker Young’s head of tax, Andrew Snowdon, said: “Global tax authorities are becoming even more determined to claim all the tax owed from large multinationals. It is often pointed out that US tech companies sometimes pay a much smaller amount of tax than some would expect.”

classified as garments rather than a period product, so were subject to the 20% VAT. Both Marks & Spencer and WUKA backed the ‘Say Pants to the Tax’ campaign last year, along with charities, politicians and business leaders. They revealed that together they paid more than £3 million in VAT on period pants, money they said that should have stayed in their customers’ pockets. Other period products have been exempted since 2021.

There is no new ‘side hustle tax’ The Low Incomes Tax Reform Group has reassured those selling goods and services online that they won’t be subject to a new ‘side hustle tax’, despite information online in early January suggesting otherwise. While there are new rules from January 2024, these simply mean online platforms – such as Ebay, Vinted, Uber and Deliveroo – will have to collect and send information to HMRC.

Tax briefs US companies’ top tax underpaid list HMRC estimates US companies underpaid £5.6 billion in UK tax in 2022/23, which represents nearly half (48.6%) of all the suspected underpaid tax from foreign companies operating in the UK. The total ‘avoided’ is up 14%, and HMRC says many US companies continue to use transfer pricing rules to aggressively divert their earnings from the UK to lower tax jurisdictions. 8

Saying pants to the tax The UK government removed VAT from period underwear, as of 1 January 2024. The pants had been

PQ Magazine February 2024

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ACA advanced level results are… Where is the Some 5,741 students sat the November 2023 Advanced Level examinations, with 9,417 exams attempted. The drop in the Strategic Business Management pass rate to 83.9% might be a worry for students and tutors alike. It was 88.5% last August and 87.3% 12 months ago. Both the Case Study and Corporate Reporting pass rates are also down on the August results (see results below). In all, 837 students opted to sit all three advanced papers. Of these, 73.2% passed them all, with

another 16% picking up at least two out of the three. Just fewer than 500 students sat only the Corporate Reporting exam, and the pass rate here was a miserly 50.2%. The pass rate for

those just sitting Strategic Business Management was only slightly better at 54.8%. Students from RSM picked up two of the three ‘order of merit’ prizes for the November sitting – James Blackwell for the case study and Louise Fitzgerald for the Strategic Business Management (joint first). ICAEW ADVANCED LEVEL NOVEMBER 2023 EXAM RESULTS*: Case Study 80.3%; Corporate Reporting 80%; Strategic Business Management 83.9% *All candidates

New education material for ISSB standards Ahead of the ISSB standards – IFRS S1 and IFRS S2 – coming into effect in January 2024, the International Sustainability Standards Board (ISSB) is providing new and updated resources to help companies apply the standards. The IFRS Foundation has published new educational material to help companies consider ‘nature and social aspects’ of climaterelated risks and opportunities when

PQ Magazine February 2024

applying IFRS S2. The material sets out three examples that help illustrate how

companies might approach these aspects of their climate-related disclosures. The material has been developed to help companies apply the ISSB Standards; it does not affect any of the requirements within the Standards. The publication follows the launch of the IFRS Sustainability knowledge hub at COP28, a core component of the IFRS Foundation’s focus on capacity building initiatives.

competition?

The Big 4 accounting firms continue to dominate the FTSE 350 audit market, earning 98% of all the audit fees, according to Financial Reporting Council figures. This results in limited choices for businesses and ongoing concerns about resilience, the FRC said. The watchdog now aims to conduct in-depth investigations that can generate proposals to improve the way the market functions. The FRC’s Mark Babington said: “A resilient, competitive audit marker focused on quality is essential to rebuild trust and confidence in corporate Britain. “While there have been some positive steps, 98% market share for the Big 4 leaves little room for challengers to emerge while maintaining high standards of audit quality. The FRC will continue to collaborate across the whole system to develop the conditions for an audit market that balances quality, innovation, resilience, and true choice.”

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ANNA KATE PHELAN Something is not adding up

There is nothing that brings this nation to action quite like television. Not since the petition to ‘Free Deirdre Barlow’ from prison in Coronation Street has the UK been so galvanised, except sadly this time the miscarriage of justice is very real. Mr. Bates vs. the Post Office is a dramatisation of the very real struggles of Post Office workers who were wrongfully convicted of fraud and theft because there was an issue with the Post Office’s accounting system, Horizon. It was a simple matter of the software being faulty, and human beings could have intervened. Post office workers regularly stated their innocence. In one trial the judge admitted there was no other evidence (no increased spending or fancy holidays) to say that the accused was guilty of theft, the only evidence was the figures not adding up in the software. This horror went on over the course of 20 years, resulting in lives and livelihoods lost. It is a disgrace that law-abiding upstanding members of the community could be persecuted by a state-owned company. Prison sentences, lost homes, and broken marriages all ensued. This is a powerful cautionary tale emphasising that technology is not infallible and there will always be a need for suitably qualified humans to sense check any information provided by a computer – whether it’s accounts from Horizon, essays from ChatGPT or profiles on Wikipedia. Ann a Kat e Phelan is Head of Produ ct at Eintech

Student behaving very badly

In the last disciplinary case of 2023 ACCA student Ashish Khanal (of Kathmandu, Nepal) was removed from the student register and ordered to pay costs of £7,600 after he submitted inaccurate exam records and then sent emails to ACCA which contained photographs of naked male genitalia. To make matters worse, he then made derogatory comments and threatened violence towards an ACCA senior investigating officer. It didn’t stop there either, as Khanal then sent more emails to ACCA in which he continued to use “inappropriate language”. Khanal had originally told ACCA

Speed dating the accountancy bodies Ever thought about speed dating with the accountancy bodies? Well, you will get the chance at the Careers in Accountancy half-day conference on 28 February! We have asked all the accountancy bodies to explain why you should join them – so what is the difference between ACCA and CIMA? ACCA’s Gemma Gathercole

will be looking at what the future of accountancy looks like, and we’ll have an expert from Hays who will take a look at the current state of the job market and what employers want. PQ magazine editor Graham Hambly said: “We believe that everyone should have an equal chance to access a career in accountancy. We want to help

FRC to investigate accountant at centre of £469m black hole

The Financial Reporting Council (FRC) has started an investigation into the conduct of a member over the financial management of Thurrock Council’s operations and investment activities for the financial years ended 31 March 2018 to 31 March 2022. The investigation will be conducted by the FRC’s Executive

Going green needs to be cheaper The UK needs to increase its current rate of decarbonisation by 50% to meet interim targets to Net Zero by 2050. According to new analysis from PwC, the UK is on track to miss the target for 2030. With cost being the main barrier for upgrading to green technology, by nearly a two-to-one margin, UK voters say they want the government to make green alternatives cheaper, rather than penalise polluting choices. Only a minority of consumers are considering switching to a green alternative in the coming years. Just 19% of drivers on average incomes (£28k – £34k) are considering swapping to an electric vehicle. 10

he had passed some of the exams when in fact he had failed them. When questioned he denied altering the relevant document and emailed ACCA stating: “I hereby abide you [sic] that I am no longer interested in f**king d**ks like you. Please delete my account, If possible refund the money and

fees to my Company A. I am not interested in you deadlog suckers [sic]. F**k off!” Three months later he sent an email to ACCA to which he attached a photograph of erect male genitalia and stated: “Suck my d**k motherf**kers”. In later correspondence Khanal admitted to sending the images and in fact said he had taken them from Google. The disciplinary committee regarded his behaviour as both shocking and deplorable, and not surprisingly said he broke ACCA’s code of ethics and behaviour. It was also judged he had brought the profession into disrepute.

Counsel under the Accountancy Scheme, which covers both member firms and individual members of professional accountancy bodies. The collapse of the council’s financial investment strategy led to significant financial loss for the local authority and saw the council put under Government

Deloitte making AI more inclusive Deloitte is providing free access and support for its new Generative AI platform to a leading disability equality charity in its continued commitment to close the digital divide. Developed by Deloitte’s AI Institute, PairD is an internal Generative AI platform designed to help the firm’s people with day-to-day tasks, including drafting content, writing code and carrying out research safely and securely. The tool is also able to create project plans, give project management best practice advice and suggest task prioritisation. Following the roll-out of the platform to 75,000 of Deloitte’s people across Europe and the Middle East, disability equality charity Scope’s 800 employees will start to have access, too.

to deliver real change, and will be explaining everything from apprenticeships to degrees (including Flying Start), and all the professional qualifications.” Come and join us at The Octagon at Queen Mary University of London. To find out more and sign up to the day go to our Eventbrite page: https://shorturl.at/istFS. intervention in September 2022. It has been estimated that poor investment decisions led to a £469 million funding black hole for the council. Throughout the intervention process, the council and the government-appointed commissioners have been updating the police and financial regulatory authorities about emerging evidence into what happened to lead to the extreme financial difficulties.

When did you last visit your bank? Since the Covid-19 pandemic accelerated the transition to online banking, UK individuals are visiting their local bank branches less often and less frequently. New research from KPMG found just 13% of respondents had visited a bank branch in the past week, compared with 18% in 2022. Similarly, a fifth (20%) of UK individuals had visited a bank branch in the past month, down from a quarter (25%) in 2022. As bank branches close, the digital offerings of banks are becoming increasingly important to consumers. Over a third of individuals (34%) now consider an app that is simple to use as being the most important interaction they have with their bank – up from 25% last year. PQ Magazine February 2024

Careers in Accountancy Your career, your future A Queen Mary University of London conference. Brought to you in association with PQ magazine

Making decisions about your future can be daunting, so we are here to give you an insight into whether accounting is the right career for you. By joining us on Wednesday 28 February 2024 you should leave with a better understanding of all the options available to you.

An event for sixth-formers, graduates at all levels and disciplines, and PQs

Find out • Which accountancy qualification is right for you? • Is an Apprenticeship the way forward? • The wide-ranging career paths open to you, and your earning potential. • What a day in the life of an accountant looks like. To find out more and sign up to the day go to our Eventbrite page: https://shorturl.at/istFS Careers in Accountancy – your career, your future Date: Wednesday 28 February 2024 Venue: The Octagon, Queen Mary University of London, 327 Mile End Road, Bethnal Green, London E1 4NS Time: 9.30am – 2pm, light refreshments provided, come early and visit the stands

PQ tech the news

EDDIE HERBERT Help the planet – and your bottom line As a fresh year dawns it’s time to tackle a new balance sheet: the environmental impact of the accounting industry. Paper mountains and flying can leave a hefty carbon footprint but the good news is that slashing that footprint isn’t just good for the planet, it’s a strategic power move for your firm. Calculating your carbon footprint not only demonstrates environmental stewardship but can boost your bottom line, too. By analysing activities that produce the most emissions –travel, commuting and energy use – you can pinpoint areas to streamline operations and cut costs. Simple changes like going paperless, installing energyefficient appliances and reducing unnecessary travel enable firms to shrink their footprint (and expenditure!). Cutting emissions now helps future-proof firms against potential expenses. Within the not-too-distant future, UK regulations will require far more companies to track their carbon footprint – so start now to get ahead. As trusted advisors, accountants are aptly positioned to spur stakeholders to measure their own footprints. But you must walk the walk first – then you can assist clients in doing the same. This year, resolve to finally calculate your footprint. Net Zero Now has partnered with ICAEW, ACCA, AAT and AIA to develop a roadmap so accountants can easily navigate the methodologies for going net zero. By following their guidance, accountants can work towards certification and leadership in sustainability. Eddie Herbert, Comm ercial Account Executive, Net Zero Now

BDO launches secure AI platform BDO UK has launched a secure generative artificial intelligence (AI) platform, Personas, for its 7,500 employees. Personas is a secure internal AI platform, designed and built by BDO to “augment employees and boost productivity”. Using the latest GPT-4 models, it will make day-to-day tasks more efficient and free up time for people to provide more complex, strategic advice that clients and businesses need. BDO says Personas will support a wide range of tasks from drafting reports and new content to

analysing documents and finding ways to improve efficiencies. One of its main features is the ability to take on the style and specialism of each user, using custom personas to refine prompts and receive outputs tailored to

the individual and purpose. It has embedded BDO voice capabilities, ensuring brand guidelines around language, tone of voice and writing style can be reflected in all outputs. Dan Francis, chief innovation and digital officer at BDO, said: “Personas is a great example of the technology at BDO that has been developed by our people for our people. “It underpins our human-led, technology-powered strategy and is demonstrative of our commitment to supporting employees in engaging with rapidly advancing technology such as AI.”

All grown up – Child Benefit goes digital New parents can now claim Child Benefit online for the first time since it was launched 47 years ago, helping millions of families with the cost of raising their children, says HMRC. Since 1977, families claiming Child Benefit had to fill out a paper form, post it and wait as long as 16 weeks for their first payment. Now, the quick and easy claims process on GOV.UK takes about 10 minutes

and payments could be made in as little as three days. Child Benefit is worth £24 a week – or £1,248 a year – for the oldest,

Fingerprints are not unique!

You may have to forget everything you learnt from Sherlock Holmes, CSI and Prime Suspects, as engineers at Columbia University have discovered, with the help of AI, that not every fingerprint is unique! A team, lead by undergraduate senior Gabe Guo, challenged the presumption that fingerprints of different fingers of the same

person are unique. At first no one would publish the findings, but eventually the truth got out. Creative Machines Lab’s Hod Lipson said: “Many people do not think AI cannot make new discoveries – that is just regurgitates knowledge. But this research shows how fairly simple AI, given

Apart from their higher initial cost, EVs are also more expensive to repair. Another problem is many drivers feel petrol and diesel cars are more reliable.

cognitive-task-orientated jobs. A new measure of potential AI complementarity suggests that, of these, about half may be negatively affected by AI, while the rest could benefit from enhanced productivity through AI integration. The IFM says AI will affect income and wealth inequality: “Unlike previous waves of automation, which had the strongest effect on middleskilled workers, AI displacement risks extend to higher-wage

or only child. The rate for each additional child is £15.90 a week – or almost £827 a year. Nigel Huddleston, Financial Secretary to the Treasury, said: “Family time is precious, especially when you have a newborn baby, so it’s great news that HMRC is enabling parents to save time on claiming their child benefit online so they can focus on what truly matters.” a fairly plain dataset that the research community has had lying around for years, and provide real insight that has eluded experts for decades.” He added: “We are about to experience an explosion of AI-led scientific discovery by non-experts and the expert community, including academia, needs to get ready.”

Tech briefs EVs not working! The car rental giant Hertz has announced plans to sell off up to 20,000 of its electric cars and buy more petrol vehicles. The sell-off over the next year includes thousands of Tesla cars and is expected to hit the bottom line by £193 million. Just three years ago Hertz heralded its move to electric cars and said it would be buying 100,000 EVs. The announcement pushed Tesla’s market value above $1 trillion. 12

Future of work AI will affect almost 40% of jobs around the world, says a new report from the International Monetary Fund. The discussion paper says that in advanced economies about 60% of jobs are exposed to AI, due to the prevalence of

earners.” For more see http://tinyurl.com/3d8n86zz Apple paying out claims Apple has started to pay out over the claims in the US it deliberately slowed down its older iPhones to encourage its loyal customers to upgrade. The tech giant settled a class action lawsuit for £395 million in 2020, but denied any wrongdoing. The complainants are now due to receive just over £70 each. PQ Magazine February 2024

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PQ email graham@pqmagazine.com

Stop faking it!

I was shocked to read your news story in the latest issue about young accountants taking time off work to intentionally avoid busy dates in the work calendar (PQ, January 2024, page 5). We all need a ‘duvet day’ sometimes, but I find it hard to believe more than half (you said 54%) are pretending to be ill to avoid a little bit of hard work. At my firm people come in when they are ill if it is busy! I am not totally sure what that says about them or the work culture, but we try not to let each other down. We know if we don’t come in someone else has to take up the slack. It is true that there is an

almost unwritten rule that there are certain times when you aren’t allowed to be ill, but being frustrated because of a lack of recognition and ‘too high expectations’ sound a bit snowflaky to me!

It is also about learning, and you only really do that when you are doing the tough (or you could call it interesting) stuff. Stress comes with the territory; we aren’t working on a conveyor belt and there are always going to be busy and quiet times. There is an art to manging both of these, and you don’t learn them if you are hiding under the duvet! Name and address supplied The Editor says: Quite a few people were shocked by this story. Some people were angry and told us those people hiding at home had chosen the wrong profession. Others said more firms need to be more tech savvy to help with morale and create more interesting work.

Our star lett er wri ter wins a fantastic ‘I love PQ’ mug! Gen Z want a nicer world for all I noticed you had quite a few stories knocking us Gen Zers this month. Not only do we not like to work (PQ, January ’24 page 5), you also say we are ‘harder to motivate’ (page 10). I don’t see anything wrong in not wanting to work 10-hour days and to ask for time off work to study. The fact that people before us worked terribly long hours and then spent their weekends revising simply isn’t a reason why we should do it. My dad keeps telling me in the old days football apprentices cleaned the senior professional footballers’ boots. I am not sure that helped with their learning skills, other than to put them in their place. Having training specifically tailored to the individual’s needs, as suggested in the news piece, makes perfect sense, does it not? How does that make us difficult? Name and email address supplied

ChatGPT and my future

Can I say I wasn’t impressed with ChatGPT’s attempts to first find the questions and then make up the answers about the future of

accountancy (PQ, January ’24, page 19). It seems to go for the very obvious answers, like it saying having ‘a strong understanding of technology will be critical’. However, you did at the end of the piece provide some real advice – talk to a real person who is doing the job, so you can make an informed decision about your career aspirations. So, less computer, more people! Name and email address supplied

You just can't beat The Producers

Seriously PQ magazine, New Year’s Kiss is the best film you can come up with about accountants? Just click on BBC iPlayer and scroll down to Leo Bloom (a nervous young accountant prone to hysterics) and Max Bialystock in The Producers – it’s a million times better. Oh, and make sure it’s the 1967 version, not the one made in 2005! Name and email address supplied

Not a day goes by it seems that we don’t see a story about how AI is going to affect your job. PQ magazine can be as bad as the rest here, and we had news stories on page 4 and page 8 and a big feature on page 36 last month. Many people on social media were less than convinced about which jobs are most at risk and which are most safe when we posted the stories online. The Department of Education study said forklift truck drivers were in the group least likely to have their job taken by AI. Among those most at risk were market and street traders. Now whether that is because everyone is shopping online we couldn’t venture, but we don’t see the fruit and veg market in Walthamstow being taken over by robots any day soon! Many employers are also saying the adoption of AI in accountancy will help retain younger professions, and they are probably right. PQ magazine even ventured onto Reddit this month, following up an apparent story about a steep rise in the CIMA student subscription. Some CIMA PQs said they were shocked to receive a renewal of their student membership! They were emailed a statement saying the renewal was now £319, when in fact it should be £139. But, as one PQ wondered, why wasn’t it checked before the email was sent out? True that. Maybe there’s a need for more AI at CIMA.

PQ Magazin e PO Box 75983, London E11 9GS | Phone : 07765 386489 | Em ail: graham@pqmagazine.com Website: www.pqmagazine.com | Editor/publisher: Graham Hamb ly graham@pqmagazine.com | Associate editor: Adam Riches | Art editor: Tim Parker Contributors: Robert Br uce, Prem Sikka, Lisa Nelson, Ann a Kat e Phelan, Tony Kelly, Phil Gamm on, Edward Neth erton, Francesca Cullaney | 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@pqm agazine.com 14

Published by PQ Publishing Ltd © PQ Publishing 2024

PQ Magazine February 2024

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PQ the year ahead

What lies ahead in 2024?

We asked the accountancy bodies CEOs for their thoughts on what will happen over the next 12 months. Here’s what they told us…

Focus on delivering the 2030 strategy

Our year ahead will be about solidifying our commitments made in the 2030 strategy as we continue in our quest to provide the very best qualifications, experiences and opportunities for AAT students and members. Our strategy works towards three key priorities: keeping the profession relevant; driving up professional standards; and building responsible business. Since the launch of our strategic plan we’ve been dedicating more resource to helping our community stay relevant in an ever-changing landscape. Artificial intelligence (AI) is making headlines more than ever and through upskilling and CPD we’re ensuring our professionals are ahead of the game and equipped with the skills to take on modern challenges and provide modern solutions. Of course this also goes for students starting out their journeys – our qualifications will focus on the skills needed to be successful and add value to any business. The development of remote invigilation will improve both the assessment experience and accessibility to assessments for those in more remote locations. We have recently recruited a Customer Experience Director to ensure that our customers are at the centre of everything we do

and that the services we provide continue on an upward curve, meeting the evolving requirements of those customers. Towards the end of last year AAT started our Student Advisory Groups, supported and promoted by PQ magazine, allowing volunteer students to have a real voice, informing our future plans. It was great to see such a high level of engagement and we look forward to more similarly productive interactive opportunities. This kind of work is really important as AAT continues to develop accounting technicians of the highest standard across the globe. We want to continue to be a strong voice on the issues our students and members care about most. Finally, our pledge to build responsible business involves commitments to sustainability and working in the best ways for a better future. We’re a member of the Net Zero Now accountancy initiative and will continue to work towards long-term goals on reducing emissions. We’re also firmly focused on social mobility and widening access to the profession for new students and members alike. We’re proud to be an entry point for accountancy and are keen to support everyone with an ambition to be part of our community. We’re also promoting an emphasis on diversity and inclusion – not just promoting the importance of equal opportunities, but also how much better we all are for having it. 2023 was an action-packed year and we’re grateful as always to have had so much support from our colleagues in the accounting sector, our training providers, and most of all our students and members who all make up the AAT community. We couldn’t do what we do without any of these people and in 2024 we’ll continue to strive to make them proud, deliver on our goals and be a strong voice to represent their views on the issues they care about. • Sarah Beale is the AAT’s CEO

Reasons to be cheerful

As 2024 begins, we’re looking ahead with optimism. We’ve seen plenty of challenges in the past 12 months, with cruel wars raging in the Middle East, Africa and in Europe, and economic difficulties across many parts of the world. Yet we can also take enormous satisfaction and pride from the contribution our members and future members in making the world a better place in so many ways – in their own organisations, communities and countries. And there are big opportunities for 2024. Last year saw the publication of the first two global sustainability reporting standards, a historic step forward for business reporting and for the profession. It’s an encouraging and much-needed development, and it’s my hope that it marks the beginning of a journey that will play an effective role in reducing the impact of climate change and creating a better future. Professional accountants – whether working inside organisations or advising them – need to be at the heart of all of this and we want you to be as well equipped as possible to meet the challenge. That’s why developing skills in sustainability will continue to be at the top of our agenda in 2024, including building on our existing sustainability content in the ACCA qualification, and providing opportunities for our members and future members – and the profession more widely – to build more skills in this area. In addition, we’ll continue to improve our support for students. I hope many of you have found our new Study Hub to be valuable, as well as our other recent innovations like My Exam Performance, and our new, streamlined PER process. Please explore our resources, including our wellbeing hub – they are designed to give you the very best chance of success. We’ll also continue to focus on your employability to help you achieve the rewarding career you’re working towards. The demand for finance talent is growing and ACCA Careers is an excellent way to find your next role – as confirmed by our recent award of Best Job Board from the National Online Recruitment Awards in the UK. Employers value the ACCA qualification and favour ACCA when hiring top talent for their teams. We remain the first choice for employers globally, with a net promoter score of +50.9 and 87% of employers stating that they are satisfied with ACCA. Over 2024 and beyond, we’ll strive to play our part in giving the world the accountancy profession it needs – motivated by a desire to serve the public good, and to open up ever-more chances of a rewarding, interesting and useful career to ever-more people. I’d like to thank you all for your commitment to your studies and career, and wish you every success for year ahead. • Helen Brand, chief executive, ACCA

Facing the challenges of AI Last year was a challenging one, with both domestic headwinds and international conflict dominating the headlines. So what are the issues and factors facing financial services and the accountancy profession in 2024? We know that the role of artificial intelligence (AI) will only increase, and we need to embrace the opportunities that the integration of AI and other technology brings. AI tools can automate repetitive and mundane tasks, freeing up accountants to focus on adding value, and the more critical and strategic aspects of their work. AI can analyse large volumes of data quickly and accurately, enabling accountants to make informed decisions based on real-time insights. Furthermore, AI can assist in identifying patterns and trends in financial data, enhancing the accuracy of forecasting and financial analysis. But alongside these benefits, there are also challenges associated with the adoption of AI in accounting. These include work quality, data accuracy, fiscal costs, undetected bias and, most importantly, there is a clear need to assess and address the ethical implications that more use of AI naturally brings. My wish list for the profession in 2024 is simple but challenging to deliver. Accountants know the value of evidence-based decision making, understanding how to create wealth, but are also familiar with making difficult choices in terms of finite resource. ICAS needs to work with like-minded professional and public sector bodies to help inform the public of the difficult financial choices that need to be made by our political leaders. We need greater transparency and understanding of how public funds are generated and spent and never more so than faced with a fairly flat economic outlook and even greater demand on our public services. Irrespective of political persuasion, sound decisions based on fact and evidence will not necessarily be easily reached. ICAS can, and wants to be, part of those discussions. If 2024 becomes a starting point for that truly honest conversation across our society, then we can build a better future for us all. • J Bruce Cartwright CA is CEO of the Institute of Chartered Accountants of Scotland (ICAS) PQ Magazine February 2024

PQ the year ahead PQ

Looking ahead to 2024 as demand outstrips supply While January marks a new beginning for many, there will be no let-up in difficult decision making in 2024. Critical local government services continue to support and serve around the clock at a time when demand outstrips supply. All these vital services deserve more sustainable and certain funding. Currently, unease across the public sector remains. The shadow of section 114 announcements lingers over local authorities, and we can expect the shape of these notices to change. Amid a climate of growing financial pressures, authorities that have not experienced specific failures may struggle to balance the books, regardless. Further funding has been provided to ease the financial pressure that the public sector is faced with. For example, the government announced in its provisional settlement the increase in line with inflation and additional 3% minimum core spending power. While this funding is welcome, the devil is in the detail. Increasing the overall funding to local authorities hides the assumption that council tax will be raised. One-off settlements also fail to account for business rates rises by the Consumer Price Index (CPI) for councils. Merely a drop in the ocean, this will not alleviate the underlying cause of public sector distress. This volatile and uncertain funding approach ought to be replaced by long-term settlements for our most essential services. As we look ahead to the upcoming year, CFOs remain a strong breed despite the urgent need for change. They know how to adapt to support sustainable growth and build resilience. But they can’t do it without a clear path. And while the public sector is poised to embrace any opportunities available, we suggest engaging in conversations around AI, digital development, refining approaches to talent and inclusivity, and including the sustainability agenda in every discussion. At a time when the public sector purse continues to tighten, simply providing short-term funding to prop up the sector fails to fix the underlying causes. A lack of certainty further leaves public services with no choice but to firefight, which goes against good financial management. The current economic situation finds us hurtling towards the need for radical change. • Rob Whiteman, CEO, CIPFA

Tips for 2024

We know that uncertainty will be a significant theme for 2024. We are living and working through a period of significant change in the management accounting profession. Digital technology and the increasing significance of sustainability are impacting our roles and magnifying our influence. To take full advantage of these trends I recommend deepening your skills and knowledge in three key areas: • Sustainability literacy • Data analytics • Evaluating technology Let’s take each in turn.

Sustainability literacy This is going to be a big year in terms of the sustainability agenda. Stakeholder demand is leading to sustainability reporting moving from being voluntary to being mandatory. On 1 January the new IFRS sustainability standards (S1 and S2) became effective. In multiple jurisdictions, including the EU, ESG reporting is becoming mandatory. Finance professionals need to learn to speak the ‘language’ of sustainability and improve how to communicate and compile new data and information in a meaningful way, so partners can use it to make effective decision and build the sustainable organisations we all want to see.

PQ Magazine February 2024

A big year of change When I wrote my message for PQ last January, I reflected on the dangers of extreme weather becoming the norm and heat records being smashed. Fast forward one year and it’s Groundhog Day. The EU’s climate service confirmed that 2023 was the warmest year on record, 1.48C hotter than the average temperature before humans began mass burning fossil fuels. That figure is now perilously close to the target of 1.5C, as set by countries under the Paris Agreement. To make matters worse, Met Office scientists are convinced this year will be even hotter. This leaves me having to reinforce last year’s crucial message that chartered accountants still – now more than ever – have a vital role in helping society and the economy achieve net zero. Globally, we were nowhere near meeting the 17 UN Sustainable Development Goals at the halfway point, and with time running out this is not only a crisis for people and planet, but for our economies and the global financial system as well. So it’s crucial we see more progress on this front in 2024, and I urge businesses to put sustainability at the heart of their activities. This will be helped by the rollout of the EU’s Corporate Sustainability Reporting Directive, which came into force on January 1, and the UK’s new sustainability corporate disclosure standards, which are expected to be endorsed by government later this year. Our members have been talking insightfully about this, and while it’s still early days, it’s key that these become embedded sooner rather than later. It will also be a big year of change at the Institute. After 18 years as Chief Executive I’ll be stepping down at the end of March. It’s been an honour to lead ICAEW and represent our profession across the world and I’m immensely proud of what we’ve achieved during that time. I have no doubt that the Institute will continue to flourish under Alan Vallance’s leadership in the years to come. We’re also expecting a new board to be in place, and while there will still be some continuity there will be some fresh faces, too. This is a big election year across the world, and to coincide with the UK vote we’ll be launching our 2024 Election Manifesto, so do keep an eye out for that. Smashing targets isn’t all bad news though. Eugene Amo-Dadzie, an ICAEW chartered accountant, is also an elite level sprinter. Last June, at the World Athletics Continental tour in Graz, he achieved the incredible feat of running 100m in 9.93 seconds, making him the fastest man in Europe at the time and earning him the apt title of ‘world’s fastest accountant’. This summer I’ll be watching Eugene’s progress very closely, as he competes for the gold medal at the Olympics in Paris. Best of luck Eugene! • Michael Izza, Chief Executive, ICAEW

Data analytics To maintain our place at the heart of the strategic decision-making process, management accountants need to go beyond just using data analytic tools to interpret data, towards developing an understanding of how they work, or at least what the analysis they point to is derived from. Accounting and finance professionals need to have enough knowledge to add value as a trusted partner and data curator. As a profession, we also need to become much better at communicating our findings, especially to non-financial audiences. It is no good developing the most accurate analysis if our business partners are not able to understand it, get value and apply it to their strategies and activities. Technology adoption We know many companies are making significant productivity gains by applying technology like Artificial Intelligence (AI) and automation. Understanding how this might change the business model will be critical in helping guide decision making on where to invest and allocate resources. This creates opportunities for management accountants to apply their skills in assessing risks and opportunities across the whole business. Building digital skills and competence will become more important than ever as tech and talent combine in the finance function and enhance business decision making. While the future is always uncertain, improving your sustainability, data and tech literacy will help to address the challenges 2024 will bring. I wish you a prosperous new year and remember to keep learning. • Andrew Harding, FCMA, CGMA, Chief Executive – Management Accounting at the Association of International Certified Professional Accountants, representing AICPA & CIMA

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PQ awards 2024 the PQ

IT’SAWARDSTIME You really do need to start writing your entries to the PQ magazine awards 2024 – the deadline is 8 March

he search is on to find new owners of the PQ magazine awards 2024. There will be lots of shiny ‘PQs’ up for grabs at the 21st awards night in late April – 23 in fact, and you still have time to enter! But, as PQ magazine always say, you can’t win it if you aren’t in it! And this is not a time to go all shy on us – you are positively encouraged to nominate yourself. It is also a chance to nominate someone who never gets the plaudits they merit. Maybe you know someone who deserves recognition or a tutor/mentor that has helped to pick you up when you were down? Well, we want to shine a light on them all. Last year’s ceremony certainly went off with a bang. There were fire-eaters, acrobats and even some singing accountants!

The star-studded event saw Evie Todd crowned PQ of the Year, and ICB student Lillian Okolie won Distance Learning Student of the year. Personality of the Year went to Rachel Harris, and Premier Training won Online College of the Year. You can download the nomination form from the website at www.pqmagazine.com. Just click on ‘PQ Awards’ button on the home page and the form is there. You then have up to 500 words to make your case. 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. Remember, if you make it onto that list you will be invited (free, of course) to the fantastic awards night in London. The deadline for entries is Friday 8 March 2024.

TOPGRADUATES

Xhulja Duka (pictured right) from the University of West London won the 2023 Accountancy Graduate of the Year award. She is pictured here with Dr Dinusha Weerawardane, head of accounting and business at the Claude Littner Business School. Dinusha is also on ACCA Council.

PQ AWARD 2024 CATEGORIES PQ OF THE YEAR NQ OF THE YEAR DISTANCE LEARNING STUDENT  OF THE YEAR ACCOUNTANCY GRADUATE OF  THE YEAR ACCOUNTANCY APPRENTICE OF  THE YEAR STUDENT BODY OF THE YEAR  ACCOUNTANCY COLLEGE OF THE  YEAR – PUBLIC SECTOR ACCOUNTANCY COLLEGE OF THE  YEAR – PRIVATE SECTOR ONLINE COLLEGE OF THE YEAR  LECTURER OF THE YEAR –  PUBLIC SECTOR LECTURER OF THE YEAR –  PRIVATE SECTOR STUDY RESOURCE OF THE YEAR  ACCOUNTANCY PODCAST OF  THE YEAR INNOVATION IN ACCOUNTANCY  BEST USE OF SOCIAL MEDIA  TRAINING MANAGER/MENTOR  OF THE YEAR GRADUATE/APPRENTICESHIP  TRAINING PROGRAMME OF THE YEAR ACCOUNTANCY TEAM OF THE  YEAR ACCOUNTANCY PERSONALITY OF  THE YEAR

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PQ Magazine February 2024

PQ football finances

Juventus: a trail of debt and deceit Mo Khair examines that financial mismanagement that is besmirching the reputation of one of the world’s most famous football clubs

t’s happened again! Italian football giant Juventus has found itself engulfed in yet another financial controversy. In a move that has thrown the club into chaos, the Italian Football Association has enforced a brutal 15-point deduction right at the heart of the season. Juventus, favourites to win Serie A, have suddenly plummeted seven places down the league table. Fans all around the globe struggle to come to terms with their team’s ‘unexpected’ downfall.

“Winning is not important; it’s the only thing that matters” This unofficial Juventus slogan, attributed to Giampiero Boniperti, a former Juventus player, has been said to mirror the club’s approach to their financial reporting. The Italian Football Federation (FIGC) has revealed that the controversy surrounding Juventus concerns ‘financial Irregularities’ and ‘false accounting’. Juventus have been accused of exaggerating the value of their players to profit from their sale. This tactic, ‘plusvalenza’, is not illegal, but is often used to bypass financial regulations and falsely

boost a company’s financial records. Plusvalenza is an Italian accounting term that refers to the capital gains generated from the sale of players. It is frequently used to assess the financial performance of football clubs, as it reflects their ability to generate profits from the transfer market. Despite these accusations, Juventus vehemently argues against any allegations of misconduct. It has appealed against the FIGC’s decision to the Sport Guarantee Board of the Italian Olympic Committee (CONI). In a statement released by Juventus’ representatives, they expressed their view, stating: “We consider this to be a blatant injustice also for millions of fans, which we trust will soon be remedied in the next court.” International Financial Reporting Standard (IFRS) 15 According to finance experts, among other issues, Juventus’ financial controversy revolves around the implementation of IFRS 15. IFRS 15 is a global accounting standard that relates to revenue recognition. It states that revenue should only be recognised when there

is a high likelihood that the company will receive future economic benefits, and the amount of these benefits can be accurately measured. The standard outlines a five-step process to assist entities in applying it accurately. IFRS 15 also requires companies to publicly disclose any uncertainties or risks surrounding revenue recognition. IFRS is a principles-based accounting framework, which means that even though it provides accounting guidance, not all aspects of revenue recognition are ‘clear-cut’. This means there are ‘grey areas’ where professional judgment is needed. As a result, accountants have more flexibility and judgment in applying the standards to specific situations. Accounting experts say that Juventus could potentially have interpreted IFRS 15 differently from other accountants and concluded that given their situation, their methods of revenue recognition were appropriate. A closer look: a case of IFRS 15 misapplication Juventus have been accused of flagrantly violating the principles set out in IFRS 15. These alleged violations, if proven, could have dire

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PQ Magazine February 2024

PQ football finances PQ consequences for the club. Juventus reportedly attributed inflated values to player transfers (plusvalenza), where IFRS 15 states that the extent of future economic benefits should be reliably measured. Academy players, for example, arrive at no cost. This means that any subsequent sales will generate pure profit, making them easy targets for value inflation. The club allegedly failed to communicate potential risks such as injuries and contractual disputes that could negatively impact the value of player transfers. This lack of transparency raises concerns regarding the club’s commitment to accountability. Juventus is also facing accusations of recognising revenue from player transfers prematurely. Critics contend that the principlesbased nature of IFRS can make determining revenue timing challenging. Particularly in cases like loans with buy options or long-term contracts. The timing of transferring the risks and rewards of ownership can also be subject to interpretation under IFRS 15. For example, if a player is transferred on a long-term contract with a high purchase price, it can be argued that the company has retained some of the risks and rewards of ownership. Allegedly, Juventus has exploited this ambiguity to inflate its net income. To top it off, Juventus have reportedly recognised revenue from player transfers without considering the actual likelihood of collecting the agreed-upon fees. According to experts, this can be particularly challenging in instances where

PQ Magazine February 2024

a player is transferred on a performance-based payment plan, as predicting whether the player will achieve the performance targets required to trigger the payment is often difficult. Given the nuances within IFRS 15, companies need to exercise professional judgment when determining how to account for revenue. This means that companies should carefully consider all of the relevant facts and circumstances surrounding each transaction to ensure strict adherence to the guidance provided in the International Financial Reporting Standards. To ensure compliance with IFRS 15, Juventus should have used fair valuation methods in line with IFRS 13 and used realistic assumptions about player values. They should also disclose any information regarding the sale of players in its financial statements to maintain transparency with shareholders. A distortion of financial reality Juventus’ alleged misapplication of IFRS 15 could potentially have had far-reaching effects on their financial statements. The inflated value of player transfers would potentially have resulted in the overstatement of assets on their statement of financial position. This means the company’s financial position would appear much stronger than it actually is. Additionally, the recognition of revenue before it has been earned will result in the overstatement of both revenue and net income on the statement of profit and loss. This again will likely boost the

company’s profitability. Investors rely on accurate financial information to make informed decisions. The misrepresentation of financial statements can lead to investors making poor investment decisions, such as overpaying for the company’s stock or investing in the company at a time when it is financially unstable. Have stakeholders finally lost all confidence in the club’s ability to provide reliable financial information? A red card for financial credibility Juventus needs to take immediate action to address these allegations and restore the trust of its investors. If the allegations are true, the club should take steps to review its accounting practices for player transfers, restate its financial statements to reflect the correct revenue and expense recognition and disclose more information regarding its transfer agreements and valuation methods. If Juventus fails to take these steps, they could potentially face further serious consequences that they may not be able to come back from. It’s half time and the ball is now in Juventus’ court. Their next moves will shape their future both on and off the pitch. NOTE: The events described in this essay kicked off in October 2021; the 15-point deduction was levied in January 2023 • Mo Khair is a final year student at the University of Leicester

PQ CIMA spotlight

Three is the magic number

Nasheen Wuisman explains how you can harness the power of the number three to help you get that all-important pass

n the words of Bob Dorough back in 1996, three is a magic number. It might just be – you have seen there are three accounting principles to double entry booking, and we all know the 3Es of Management; Efficiency, Economy and Effectiveness. People speak of the Rule of Three for learning, too. There are many more. Let’s see how these fit into study and learning. You have already seen that study is a challenge, especially as there is a constant balance that you trying to achieve between all your commitments. You are trying to get the maximum possible benefit from the time you can commit to your learning. Let’s see how some threes can help you. Economy, efficiency and effectiveness You have already seen how these apply in business, or you will soon in your studies. This concept can be applied a little closer to home: Economy – Time… there is never enough time! Yet we need to be able to allocate it to study, to be able to manage it in the exam, and to be able to have a life around it all. • Planning your time: Plan your time week by week, and make sure you include everything in there to make it realistic. You will find there are usually few opportunities to have long study sessions, so allocate more shorter amounts of time (20-30 minutes, say). These will still be effective, as long as it is focused time. • Be prepared: Time management, whether you are studying or in the exam, means you should be aware of how long you have and what you need to try to achieve in that time, be it a chapter of study or completing a question. If you overrun, amend the rest of the plan based on the time you have left – but remember to keep clearly defined goals in sight. Efficiency – making the most of what you have. • Reduce distractions: It pays to silence your phone, as every time you check it you lose your focus, and the time you put aside to study will not reach its potential. • Resources: Equip yourself with all the support you need. Download articles from the Study Hub, save tricky topic webinars or YouTube videos, choose the study route that will suit your study habits and budget the best.

Exam awareness: Be aware of what you can and cannot do in the exam early in the learning process. This will allow you to navigate your exam better and reduce the worry caused by unfamiliarity with the software. Effectiveness – to be effective it’s extremely important to have that end goal in mind, the exam date and the outcome you desire. • Stay motivated: Think about how the professional qualification will change your life. Always set yourself sub-goals: “I want to do extra questions”; “I want to study halfan-hour longer tonight”. Make sure they are things you can do now. “I want to pass the exam” is an important goal, but the smaller steps to get there will motivate you more. • Question practice: Focus on question-led revision to make sure you are able to recall the concepts, able to apply them to a given question and get faster in answering questions under testing conditions. This will allow you to apply your knowledge better and get the desired outcome. • Taking control of your mindset: Try not to put off study, or to ignore a topic you do not like or understand straight away. Try not to

•

think of the exam date as being flexible – be determined to achieve what you have set out to achieve. You will never feel 100% confident about the exam – no one ever does, but it does not mean you will not be successful. A final magic three You will find at times that you have studied something but when it comes to answering a question, you can’t! The Rule of Three for learning considers the need to give yourself the opportunity to learn something at least three times before you are expected to know it and apply it. This doesn’t apply to everything of course, as some topics can be absorbed more easily than others. But when you can’t answer a question, it might just be that you have not allowed yourself the opportunity yet to master the concept – so don’t think “I can’t do it”. You can do it, you just need to give yourself the fair chance. So remember: plan, prepare, practise = pass! • Nasheen Wuisman, Senior Manager of Global Academic Progression at AICPA & CIMA, together as the Association of International Certified Professional Accountants

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PQ Magazine February 2024

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PQ sustainability PQ

Mine is better than yours!

Comparison between firms significantly reduces toxic emissions and environmental violations, says new study from the University of York

s Europe ramps up talks of tighter and potentially costly regulations for how companies report their environmental impact, a study from the University of York School for Business and Society suggests that a greater focus on accounting comparability – getting firms to compare their environmental performance with each other – could be a highly effective method for reducing toxic emissions, as well as the number and severity of environmental violations. In a year where Europe is making big decisions on defining new principles for how companies should report data about environmental pollution such as toxic releases and CO2, the new study has shown that getting firms to adhere more closely to existing accounting comparability guidelines can help to facilitate green learning in firms and reduce environmental violations. One of the co-authors of the paper, Dr Agnieszka Trzeciakiewicz of the University of York School for Business and Society, said: “Current regulatory efforts in Europe are directed towards imposing more sustainability disclosure requirements on firms. While these hold the promise of delivering benefits for both companies and society, they will likely create significant costs for the firms, which will need to hire experts to carry out additional assessments, put new procedures in place, and possibly implement changes if environmental impacts are found to be too high. “Our study finds that with the tools we already have in place, we can already achieve quite significant change. By focusing on existing practices and putting more emphasis on accounting comparability, we can help firms to learn from each other about best practices and consequently reduce their environmentally harmful practices.” What is accounting comparability? Accounting comparability is a desired qualitative characteristic of accounting information, in which financial statements are prepared to conform with a set of accounting standards. If firms adhere to this closely, writing their accounts in the same format and responding to economic events in their financial statements in similar ways, it

becomes easier for them to compare accounts with each other – and so learn from each other. The new paper has found that greater accounting comparability reduces environmental violations, and this effect is amplified in the presence of companies with better environmental performance, suggesting that firms are better able to learn from peer firms with low environmental impact. These results provide new evidence that accounting comparability facilitates green learning and therefore can benefit society at large by reducing environmental harm. “The effects of focusing on accounting comparability won’t be as significant as those of the new regulations coming in,” says Dr

Trzeciakiewicz. “But it helps firms to learn from each other about environmental performance, without incurring large costs.” Highlighting corporate misconduct This study was made possible by a new resource called the Violation Tracker database, which provides wide-ranging and detailed information on corporate misconduct, showing which firms are the biggest regulatory violators and lawbreakers. “From our perspective as academic researchers, this resource has the potential to provide really positive change, as it gives us the data we need to easily identify environmental violators and hopefully help to stop the worst of corporate misconduct,” says Dr Trzeciakiewicz.

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PQ Magazine February 2024

PQ ACCA spotlight

Knowledge = success Be prepared – get to know your exam format and the available study resources

ast year we looked at ‘3 Simple Steps to success in your first accountancy exam’ (PQ, October ’23). Those steps are: • Book your exam as soon as possible. • Be prepared – get to know your exam format and available study resources. • Practice, practice, practice. We’ve already looked in depth at the benefits of getting your exam booked as soon as possible, so in this article we’ll think about how to get prepared for exam success. As with our previous articles we’ll use ACCA exams as our example, but the themes should resonate with all accounting students. Understanding the exam format is a critical first step when studying for a new subject. The ACCA qualification has different levels and each level has a different exam format. For example, Applied Knowledge exams are made up entirely of Objective Test questions, whereas Applied Skills exams are a mix of Objective Test and longer questions that require a typed answers or calculations in a spreadsheet. At Strategic Professional level all questions require typed answers and calculations. The exam format can also differ slightly across

exams within levels, for example in the number of Objective Test questions and whether these are linked to a case study or simply standalone questions. With all this in mind, it’s crucial you understand the format of the exam you’re preparing for, and the specimen exam is the perfect resource to help you. Knowing which study resources to use and when to use them is your next step in being well prepared for your studies. If you’re with a learning provider, they will likely provide you with some resources and guide you on other ones to

use from your institute. You could also speak to fellow students or someone you know who has recently passed the exam you’re preparing for, to see which resources have helped them. Either way, it’s important to review available resources early in your studies so that you can identify which ones work best for you and your learning style. At ACCA, we have a wealth of resources to help you achieve success in your exams. For the learning and revision phases we have the ACCA Study Hub, which is available free of charge to all ACCA students. It contains online study content covering the full syllabus, quizzes to test your understanding, practice and revision questions as well as flashcards. For question practice that reflects the real exam experience, ACCA strongly recommends using the Practice Platform, which contains past exams and practice exams for Applied Skills and Strategic Professional, as well as new mocks issued each exam session. For Foundation and Applied Knowledge exams we have Practice Tests available. Once you’re familiar with the resources at your disposal you can then use the ‘Compass’ planning tool to create a study plan. Knowing how to approach your studies and understanding the resources available to you can be daunting, but taking steps to prepare yourself means that you will be ready to study effectively and efficiently. • Thanks to ACCA for this article

Proven to boost your exam results Study Hub is proving to be a great success for ACCA students, increasing exam results by as much as 18%*. With online access to study chapters, practice questions, flashcards and short quizzes, it streamlines revision and enhances your understanding. Use Study Hub as an essential part of your exam prep and boost your chances of success.

#ACCAStudyHub *Based on pass rates of Study Hub users vs. non-users for the September 2023 session-based exams.

PQ Magazine February 2024

PQ ACCA APM PQ

Answer the question asked!

Brigita Petrova explains why many Advanced Performance Management sitters fail by not addressing the question properly

he APM pass rate remains bottom of the list worldwide. The main reason for failure remains not doing what the question asked for, and there are a few issues contributing to it. I have used the Avich question from the MarchJune 2023 sitting to illustrate them and show you what you might need to fix. The Examiner’s Report for that sitting said: “The requirements of the question were split into two parts. Part (a) was worth 13 marks and was broken down into two parts. The first of which asked for an allocation of environmental costs (provided in an appendix to the main scenario) and calculation of the annual costs of each, and the second part asked for advice on how consideration of environmental matters could help Avich. There were seven marks available for the first part of part (a), and six marks for the second part. Part (b) was worth 7 marks and asked for an explanation of the benefits of lifecycle costing.”

Answered the question set? Seems obvious, right? And yet, when asked about the benefits of lifecycle costing, many sitters explained how product lifecycle works. Or when asked about how consideration of environmental matters could help the company’s performance management in areas other than managing environmental costs, they discuss those costs at length… The result? Writing a lot of (probably) correct but non-scoring stuff. Don’t be surprised: the CEO (i.e. the examiner) didn’t ask you about those, so why would they waste their time with it now? Even if you enjoyed or dreaded discussing the different stages of a product’s lifecycle in your SBL studies, here you needed to focus on the costs incurred during a product’s lifecycle and think how this could be beneficial to performance management. Similarly, you might have thought it was quite natural to elaborate on the environmental costs that you were asked to identify and calculate in the first part of requirement a) but you were told specifically not to do that. Don’t give in to the pressure; read carefully the embedded PQ Magazine February 2024

performance management if you don’t understand what EMA is and how that could relate to that particular start up, looking to get a listing company, that operates in the gas exploration sector. To do better, ensure you understand the practical aspect of the theory you are learning, going beyond textbooks. Secondly, you need to stay focused, paying attention to the little details to avoid wasting easy marks. For example, calculations in part a) were pretty simple (as they often are in APM), but needed you to appreciate that some figures were provided in annual terms, others for four years, and others were provided per river, with 10 rivers monitored altogether.

requirements and think about what exactly they want. Look for the connection with the specific scenario and beyond what you wish or expect to be asked. Knowledge gaps Both EMA and lifecycle costing are topics first introduced in MA, further developed in PM, and yet many students didn’t know how to use them in Avich. Yes, APM is a practical subject where exam success is based mainly on application skills. However, having knowledge gaps from earlier studies means you lack the solid foundation needed to build up strong APM answers. Yes, you need to focus on application, but how can you apply knowledge that you don’t have? How can you give any helpful advice on whether lifecycle costing would help the company, when you don’t even know what lifecycle costing is? How can you classify environmental costs if you don’t know what costs fit each category? Don’t underestimate those knowledge gaps, address them during the tuition stage: a good tutor could help you build a

bridge between your earlier studies and APM. Better understanding and focus Even if writing in part a) of Avich the definitions of environmental prevention, detection, internal failure and external failure costs, many still failed to put things into context by classifying and calculating the actual costs from the scenario correctly. This shows that two more things need fixing. Firstly, relying purely on definitions is far from enough to give you a pass on the technical marks (only two out of seven total marks were available for those) and also leads to a poor professional marks score. Similarly, in part b), talking about lifecycle costing in general terms without going into the company’s context leads to a superficial answer. To add value you should relate the concept to case specifics such as the need of site clean-up, research for suitable sites, the expected life of the sites, etc., and give your view of whether lifecycle costing would be useful. You can’t explain how EMA could help their

Time management and question approach Not writing anything under part b) on lifecycle costing, for example, and leaving question parts out in general reduces dramatically your chances of passing: that is 0 marks guaranteed, and is unprofessional, too! Planning time is essential, so put down some points under each task before you start writing. Next, build up your answer by writing the easiest points within your plan first, ensuring you have some completed points under each task. This would help you spread your answer evenly and touch up on everything you were asked about. Writing as much as you can under, say part a) first (13 marks), means your time could be up before you have written much, if anything, under part b). The power of ‘why’ Telling the marker what is important, without explaining WHY, does nothing but waste your time. Ensure you justify each point. Start practising questions to time as soon as possible and teach your brain to add justification, when under pressure (use the ACCA Practice platform a lot!). Remember, ‘What gets measured, gets done’, so aim to get regular tutor feedback as your journey progresses. Do that and you’ll score higher – both in technical and professional marks terms. • Brigita Petrova FCCA is a former PQ Lecturer of the Year 27

PQ ACCA exams

How do you pass PM? Performance Management expert Jean-Paul Noel-Cephise explains what makes PM so hard and what the examiner wants

ou may remember that I recently wrote in PQ magazine that the PM pass rate in 2023 is around 40%, one of the lowest for the applied skills level. Maybe it is time for you to look at this exam as a ‘problem-solving’ paper under time pressure. There is also a heavy discursive focus on the paper, not just calculations to do – section A sometimes has over 50% discursive questions, and so too does section B. So you are not going to get away from it! When you add in the marks from section C that are given for applied writing, this explains why the examiner repeats the same frustrated comments each time in the Examiner’s Report. And students, it seems, regularly sit the exam unprepared for what lies ahead. The December 2023 exam was certainly challenging, yet if you were prepared through question practice and understood the format of the PM exam you should have been able to secure a pass. The performance measurement question (which is always highly likely to feature in section C in this exam) was on ROCE and RI, but students struggled with the imputed

interest calculations. The divisional manager is always supposed to be assessed on controllable aspects of performance. Flexed budgets, variances and transfer pricing were all areas

that were tested, and these will continue to be tested thoroughly as they are very technical areas of the syllabus, which require a lot of practice and deeper understanding at the skills level. The examiner said for 2023 that for section C questions many students just ‘forgot’ to do all the calculations and lost marks, didn’t use information in the scenarios to base their answers, and didn’t take the discussion parts far enough to get a pass. Here are some points made directly from the examiner about what students are not doing enough, and which will directly help to secure a pass in the PM exam (all fairly clear!): • Identify the verb being used in the question. • Look for extra requirements in each question. • Look at the number of marks on offer and time yourself accordingly. • Present your answers using tables and headings, highlighted clearly. Don’t forget you can look back at my five tips from December’s article in PQ magazine about how to pass the exam (it is on the website at http://tinyurl.com/2brhcsu2). And if you’re studying PM and want to study with me go to https://maqlearnonline.com/tutors/jean-paul/ or contact me directly via WhatsApp on +44 744 8405 199. • Jean-Paul Noel-Cephise is a tutor at MAQ Learn Online

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PQ Magazine February 2024

PQ apps review PQ

New year, new you? There seems to be an app for everything, writes Francesca Cullaney, but is there a right one for you?

s always, with a new year comes our list of new year’s resolutions. Perhaps you’re hoping to make more sustainable choices, improve your sleep health, reach certain fitness goals or reduce the time spent endlessly scrolling on your phone? While things can feel easy in the beginning, research shows that a quarter of people quit their resolutions by the end of the first week, and nearly half quit by the end of January. Yet this figure reduces significantly if those on their self-improvement journey feel optimistic and prepared. PQ magazine’s new series aims to keep the conversation of personal growth going throughout the year, not just in January. Each month we will be rating five free and popular apps in a range of categories including personal finance, study, general wellbeing and exercise, in the hope that that we can all remain motivated and optimistic on the first of every month. Kicking off this series is our first category – sustainability. Earth Hero

Who doesn’t want to be a hero? Earth Hero aims to connect users, or ‘change-makers’, through their online community, highlighting the essential route to confront the challenges of global warming and biodiversity extinction. Available in eight languages, Earth Hero offers climate discussion groups, emissions modelling and an individualised carbon footprint calculator that could change your behaviour. Users can choose areas of specific interest, such as food, travel or energy usage, and set their own green goals which can then be shared with others. The app can be a little bit US-centric, but overall is a great place to start your sustainability journey. PQ rating: 4/5

Fat Llama

As well as the brilliant name, the concept behind Fat Llama is great. The platform allows users to rent or borrow belongings in your area. This can be anything from power drills to smoke machines. There are even juicers, VR headsets and Canadian canoes – perhaps even fat llamas if you’re lucky – all priced up per day. With the company believing borrowing should be quick and reliable, the ethos is all there. There’s transparency around fees and an accompanying website for those who prefer larger screens. Having said this, the app could be improved by simplifying the sign-up process and fixing a few bugs, such as crashing and timing out occasionally. Great concept but the app needs work. PQ rating: 3/5 Treeapp

With a 4.9 rating on the Apple App Store, there is clearly a lot to love about Treeapp. The genius but simple idea allows users to connect with eco-responsible brands through adverts, the revenues from which are used to fund tree planting projects around the world. Boasting an impressive figure of three million trees planted in 13 countries already, users can select which planting project they want to be a part of and gift trees to loved ones. To keep up motivation, users can collect streaks and track their forests on a virtual map. Benefiting users by offsetting emissions, the smaller ethical businesses that advertise and fund the projects, and the local communities and wildlife on the ground, everyone’s a winner. PQ rating: 5/5

PQ magazine

Horizon Sustainability Scanner Designed to help users reduce, reuse and recycle in their local communities, the app offers recycling instructions for over 24,000 products through barcode scanning. What’s more, locations of nearby collection points and recycling centres are provided. With a growing online community, monthly challenges and rewards, mixed with educational articles teaching users about detrimental ingredients in packaging, the app is fun, simple and effective. The layout is clean and easy to use. What’s more, the company greatly appreciates all feedback, showing their passion for sustainability and their desire to improve. PQ rating: 4/5 Klima

Featured in both Forbes and Wired and nominated as a finalist in the Apple app design awards in 2021, there were high hopes for the app that aims to calculate, reduce and offset your carbon emissions. Klima states to have one of the most precise carbon calculators on the market, with 48 lifestyle questions. This is then split into carbon emissions you can reduce, through personalised tips and Climate Class educational videos, and offsetting the carbon emissions you can’t avoid through a subscription. Klima claims all on-the-ground offset projects are independently verified and monitored by the highest international standards and can be tracked in real time. A beautiful, well-thought-out app. PQ rating: 5/5 All apps are available on the Apple App Store and Google Play. If you want to tell us about your favourite app, or even have a great idea for an app, then let us know at francesca@ pqmagazine.com See you next month!

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PQ AAT Level 3

Tax processes for businesses explained

Karen Groves looks at imminent changes to HMRC’s filing and penalties regime that will affect AAT exam sitters days. The interest will continue to be charged on amounts included in a time to pay agreement.

What happens if you pay late? If a taxpayer, in addition to filing a late VAT return, also sends a late payment after 1 January 2023, there will be a further penalty. The penalty will be based on a percentage of the outstanding VAT due for payment. The initial penalty will be applied if the payment is more than 15 days overdue and a second penalty will be applied when the payment is more than 30 days overdue. It is very important that you familiarise yourself with the AAT Reference Material that you will have access to during your assessment, which covers the penalties levied. If the taxpayer has a reasonable excuse for paying late, which HMRC are satisfied with, then no penalty will be assessed. A lack of funds to pay would not be a reasonable excuse. If a taxpayer is having financial difficulties, then a ‘time to pay’ arrangement can be requested from HMRC. This will enable the taxpayer to have a personalised payment plan and prevent further penalties being levied if the taxpayer keeps to the agreement.

Now test your understanding! Question 1 A business has not submitted its VAT return for the quarter ended 30 June 2024. This is the fourth late return. The business then files the next quarter’s VAT return on time. A £200 penalty will be charged for the quarter ended 30 June 2024, but no penalty is charged for the quarter ended 30 September 2024. • True • False

Interest From 1 January 2023, HMRC will charge late payment interest from the first day that the payment is due, until it is paid. The interest is charged at 2.5% above the Bank of England base rate, so if the base rate was 4%, interest would be charged at 6.5%. The interest is charged on both outstanding VAT amounts and late payment penalties not paid, as penalties are due for payment within 30

Question 2 A VAT-registered business has not paid the VAT due of £3,945 until 5 July 2024 for the quarter ended 30th April 2024. Calculate the interest charged if the Bank of England base rate is 6%. • Karen Groves is an AAT tutor and AAT Faculty Director at e-Careers

Answer 1 True – the threshold for quarterly returns is 4. A penalty will therefore be applied relating to the quarter ending 30 June 2024, however as the next VAT return is filed on time, there is no penalty applied.

be submitted for both of the above, even if submitted late.

Answer 2 Interest will start from the 8 June 2024 to 5 July 2024. Default interest: £3,945 x 8.5% / 365 x 28 days = £25.72 (June = 23 days July = 5 days)

he Finance Act 2021 assessments will be replaced with the Finance Act 2023, starting on the 29 January 2024. So what is changing between the Finance Acts? We will look at the consequences of late filing of VAT returns, late payment and interest charges. HMRC introduced a penalty points system in January 2023, replacing the default surcharge system, which is applied for the late filing of VAT returns and payments. The update aims to simplify and separate penalties and interest. A penalty point is issued every time a VAT return is submitted late and when the total points reach a set level, a penalty is applied. For those of you old enough to remember a certain television show, in this case points do not make prizes! The points threshold will depend on the frequency of VAT returns the taxpayer must submit, as follows: Annually = 2 points threshold Quarterly = 4 points threshold At the point the taxpayer reaches the threshold, a £200 penalty is charged and will apply for all subsequent VAT returns that are filed late. HMRC may choose not to apply point(s) if the taxpayer has a reasonable excuse, but this will depend on individual circumstances. The individual points will expire after two years as long as the taxpayer hasn’t reached the penalty threshold. If the taxpayer has reached the penalty threshold, the points will only reset to zero as follows: Quarterly returns – the next 12 months must be submitted on time Annual returns – the next 2 years must be submitted on time Note: All returns for the past two years must

PQ Magazine February 2024

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PQ green jobs

Demand for green finance jobs is on the rise There might be an increase in demand for green jobs, but do people have the skills needed?

he UK financial services sector faces an emerging green skills gap and is not moving fast enough to close it, jeopardising the UK’s Net Zero goals, says new research from PwC. The PwC Green Jobs Barometer found the shortage of new green talent can be attributed to several factors: the absence of green knowledge and skill integration in traditional finance degree programs; a knowledge gap among students regarding green skills and available career paths in this field; and graduates with green skills choosing to work in industries they perceive as better aligned with their values. The proportion of job vacancies in the sector that are identified as green increased from 0.26% in 2019-20 to 2.2% in 2022-23, growing from a total of 4,900 to 16,700. But, as the demand for green talent and skills continues to grow, the supply of green talent both from new entrants and the existing workforce is failing to rise with it and a green skills gap is emerging. The total number of green job vacancies may have stood at nearly 17,000 in 2023, but PwC

estimated that graduates with sustainability skills would only be able to fill 900 of these vacancies. The rest of vacancies will need to be filled by retraining the current workforce. The growth in green job openings has been driven by the creation of new green jobs in the finance sector such as sustainable investment analysts, climate strategists and ESG analysts, and the greening of existing jobs. Portfolio managers in asset management have also

expanded their roles beyond conventional tasks and their duties now encompass tasks like analysing ESG fund trends and producing and evaluating climate risk assessments for client portfolios. Carl Sizer, Head of Regions, PwC UK, said: “The upskilling of the FS sector is essential to meet the demand of green jobs, net zero targets and the UK ambition of becoming the world's first Net Zero-aligned financial centre. We must recognise that financial services will be a driving force underpinning the transition and we need to ensure we have the skillset there. “Moreover, it’s good for the environment, good for the economy and presents an opportunity by creating opportunities that are accessible to all.” And while the demand for green finance jobs is on the rise, significant regional disparities exist in the prevalence of these roles across the UK. London and Edinburgh have emerged as global leaders in green and sustainable finance, attracting talent and investment that has fuelled substantial growth in their green economies. London has the largest absolute number of green financial job openings at 7,000 in a year, while Scotland, with total green job openings of 2,200, has the highest proportion of its job openings that are green (5.6%, versus 2.6% in London). By contrast, Northern Ireland lags behind with only 150. • The PwC Green Jobs Barometer is a collaboration with the Financial Services Skills Commission and the Aldersgate Group.

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PQ Magazine February 2024

PQ ACCA exams PQ

How to develop commercial acumen

One of the professional skills that students struggle most with is commercial acumen. David Laws looks at why, and suggests what you can do to improve your score

art of the ACCA’s definition of commercial acumen states that students need to demonstrate awareness of organisational and wider external factors. In other words, you need to link knowledge to the situation in the exam. What many students do instead is to simply repeat the knowledge. I like to give my students the example of going to the doctor (I’m old, I am very interested in health issues). Imagine I go to the doctor and ask what I can do to improve my general health. The doctor replies: “Eat more oily fish, exercise more and stop smoking. Close the door on your way out.” I didn’t ask about what people in general should do and I didn’t ask what the medical textbooks say I should do, I asked about what I should do. So the advice is unhelpful to me (I’m allergic to fish, I exercise almost every day and I have never smoked). In other words, the doctor didn’t adapt their advice to demonstrate they understood my situation (zero medical acumen!). So how does this work in the exams? A question in SBL could be something like: ‘Advise this company on how a risk committee could be of benefit’. A typical student’s answer will be a list of benefits of having a risk committee they learned at the AA paper, which will probably score zero acumen marks. Notice two things: 1. The requirement asks about the benefits for the specific company in the question. 2. The requirement asks HOW these will be beneficial, so you need to justify how they would help. So a good starting place would be to consider the benefits you have learned of having a risk committee, but then think: • Are there any particular problems this company is facing and how would having a risk committee help to solve them? • If a risk committee was not important in the past, is the company changing something (e.g. strategy) and why does this mean a risk committee would now be a good idea? Similarly, a regular question in AFM is about the best way to pay for an acquisition: should the purchase be paid for by cash or shares? A typical student answer will list things from the FM papers, such as issuing shares will lead to dilution of control. Again, this probably gets zero

acumen marks because the student is not saying why these matter in this situation. • Imagine the examiner had said that the target company had 100,000 shares owned by 100,000 different shareholders (i.e. one share each). • What if the examiner said the same 100,000 shares were owned equally by four shareholders? • Would dilution of control be important in both situations? The above illustrates one way to demonstrate acumen, to identify when something is NOT an issue (and explaining why). Similarly, imagine you are a shareholder in a bank that is an acquisition target and that you are being offered shares in the parent company’s business. What if the parent company is: • An established financial institution based in the same country? • A new bio-technology company operating abroad? How would the two situations affect whether you would accept shares or would prefer cash for your shareholding? So how do you improve your acumen marks? Imagine that you are the client. Someone has written a report which they want you to pay for.

Would you be happy with a list of issues that look like they have been copied and pasted from Wikipedia that seem to have no relevance to your organisation? Presumably not, so why would the marker give you any acumen marks for doing the same thing? To improve your score, think about the details you are given about the company. For example: • Is the company large or small? A tip: the smaller the company, the less relevant the lists you learned at the skills paper will probably be. • What industry does the company operate in? • How successful has the company been? • What is the company trying to achieve (through expanding, improving its corporate governance, etc.)? • What key decisions do the Board need to make and how will your advice help them? This means reading and then thinking about each sentence – why were you told this? Demonstrate your acumen by referring to these points in your answer and showing how they affect your advice. • David Laws is a former PQ Lecturer of the Year and is part of the SBL marking team. He lectures on AFM, SBL and BT at LSBF

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PQ AAT Level 3 PQ

Disposals of non-current assets explained Here’s Teresa Clarke step-by-step guide to a topic familiar to students studying Financial Accounting: Preparing Financial Statements

auren Hemp purchased a delivery van in June 2018 for £18,000. She sold the vehicle in November 2022 for £5,000 cash. Lauren’s financial year ended on 31 December 2022. The accumulated depreciation balance on the van was £8,784.

Task Make the necessary entries in the ledgers to account for the disposal and calculate the profit or loss on disposal. Step 1 Remove the original asset from the asset account by crediting the van at cost account and debiting the disposals account with the purchase cost of £18,000. Van at cost Narrative Balance b/d

Dr £ 18,000

Narrative Disposals (step 1)

Cr £ 18,000

Narrative

Cr £

Disposals Narrative Van at cost (step 1)

Dr £ 18,000

Disposals Step 2 Remove the accumulated depreciation that related to the van by debiting the accumulated depreciation account and crediting the disposals account with £8,784. Accumulated depreciation – van Narrative Disposals (step 2)

Dr £ 8,784

Narrative Balance b/d

Cr £ 8,784

Narrative Acc. Depreciation - van (step 2)

Cr £ 8,784

Disposals Narrative Van at cost (step 1)

Dr £ 18,000

Step 3 Enter the amount received from the sale of the vehicle by debiting the bank account and crediting the disposals account with £5,000. Bank Narrative Disposals (step 3)

Dr £ 5,000

Narrative

Narrative Van at cost (step 1)

Dr £ 18,000

Narrative Accumulated depreciation (step 2) Bank (step 3) Transfer to SOPL (step 4)

18,000

Cr £ 8,784 5,000 4,216 18,000

Now the logical check The van was bought for £18,000 and depreciation was charged against this to the value of £8,784. This would leave us with a carrying value of £9,216. If we received £5,000 when we sold the van, this would leave us with a loss on disposal of £4,216. Part-exchange If Lauren had received a £5,000 part-exchange allowance instead of cash, step 3 would be slightly different. Instead of the money being received into the bank, it would be received towards the cost of the new asset. The entries would look like this instead. Other than that, all other entries would be the same. New asset Narrative Disposals (step 3)

Dr £ 5,000

Narrative

Cr £

Cr £ Disposals

Disposals Narrative Van at cost (step 1)

Dr £ 18,000

Narrative Accumulated depreciation (step 2) Bank (step 3)

Cr £ 8,784 5,000

Step 4 Balance off the account and show the transfer to the statement of profit or loss account. PQ Magazine February 2024

Narrative Van at cost (step 1)

Dr £ 18,000

Narrative Accumulated depreciation (step 2) New asset (step 3)

Cr £ 8,784 5,000

These steps will work for all disposal account questions. Why not write them out in your own way and try them now. • Teresa Clarke is a freelance AAT tutor. If you like my way of explaining things, you might like my workbooks, which are all available from Amazon in both paperback and as eBooks. The links to all my workbooks can be found at https://www.teresaclarke.co.uk/ 35

PQ fintech

The fintech frontiers for 2024 T Scott Dawson looks at how accountants should prepare for the future of fintech

he fintech industry has witnessed a whirlwind of change in recent years, with 2023 marking a pivotal point as artificial intelligence (AI) burst onto the scene, captivating the attention of businesses and consumers alike. While AI’s potential remains immense, its impact on the world has been less transformative than anticipated, with its threats and advantages being somewhat exaggerated. However, moving forward, the focus is shifting to regulating AI, acknowledging that the technology’s rapid evolution outpaces the ability of regulations to keep up.

The need for AI regulation AI’s meteoric rise in 2023 has undoubtedly propelled the fintech industry forward, but it has also raised concerns about its potential risks. To mitigate these risks and ensure the responsible use of AI, regulation will play a crucial role in 2024. However, regulating AI is a complex endeavour, as it involves not just the technology itself but also its underlying structure. The challenge lies in creating regulations that can adapt to AI’s dynamic nature and anticipate its future capabilities. As pointed out by the Organisation for Economic Co-operation and Development in its Employment Outlook report earlier this year, it is workers in highly skilled sectors like medicine, law and finance whose positions are at greatest risk due to AI. Accountants would be well-advised to embrace the technology and use the tools to drive their work forward. Navigating the complexity of payments In the realm of payments, the trend towards swift and convenient transactions for shoppers masks a complex underlying ecosystem. Even the simplest transaction involves a multitude of processes and entities. With the digital world expanding and payment methods diversifying, this complexity is only set to intensify. The sheer volume of transactions is also on the rise,

Dawson: 'moving forward, the focus is shifting to regulating AI'

with debit card transactions alone reaching 2.2 billion in July 2023, a 4.9% increase from the same period in 2022. Embracing expertise and partnerships Accountants must be aware of this upward trajectory in transaction volume and be au-fait with the evolving payments landscape. They will then be well-placed to advise their clients in the business arena that they need not shoulder the entire burden alone. Partnering with experts to handle specific aspects of the payments chain, such as regulation, security, processing, or acquiring, will be key to success in 2024. By leveraging the expertise of these specialists, businesses can ensure seamless and secure transactions while focusing on their core competencies.

Preparing for the future of fintech As we venture into 2024, the fintech industry is poised for further disruption and innovation. AI's impact will continue to unfold, and its regulation will become increasingly crucial. The complexity of payments will intensify, demanding adaptability and strategic partnerships. Finance professionals who familiarise themselves with these trends and collaborate with experts will be well-positioned to navigate the evolving fintech landscape, which continues to inform the accountancy profession significantly, and thrive in the years to come. To learn more visit https://www.decta.com/ • Scott Dawson is Head of Sales and Strategic Partnerships at DECTA

PQ Magazine February 2024

The Accountant’s Odyssey: How do we shape the future? Back by popular demand, join LSBU and PQ magazine as we host our 7th annual accountancy conference on Wednesday 21 February 2024 Sign up for our free one-day online conference to hear from experts including Lord Bilimoria, Lord Sikka, Professor Richard Murphy, and Hays UK Director of Accountancy and Finance, Karen Young and Rebecca Tiong and June Chait from AICPA & CIMA. We’ll explore: • How ChatGPT will impact you? • Why accountancy education needs to change for graduates • Global changes in accountancy • How to equip yourself for the future job market • The future of accounting in a sustainable world

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No accounting 4 the love of football Brought to you by

An evening with University of Liverpool’s Kieran Maguire, of The Price of Football podcast fame, and friends… Those friends are: Charlotte Hickey, senior finance business partner at the Football Association, ACCA qualified Kunal Sajdeh, manager in the Deloitte Sports Business Group and sub-editor of the 2024 Deloitte Football Money League Patrick Way, KC, football tax expert Our love of the game always comes at a price, the problem is understanding how finance and football can keep the beautiful game, well, beautiful! With Kieran & co help we will follow the money and find out what is really going on! We may be starting with Everton, but who knows where the evening will take us! No accounting 4 the love of football does football finance work? Date: Thursday 21 March Venue: The Crypt on the Green, St James’s Church, Clerkenwell Close, London EC1R 0EA Time: 6pm to 8.30pm. Kick off at 6.30pm Sign up at: https://shorturl.at/cikO0. No VAR will be in operation on the night! This event is supported by

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Dear Karen Ask PQ’s very own agony aunt Karen Young when you need advice from a real expert. Email your dilemma to graham@ pqmagazine.com, and he will pass on the best ones to Karen THE DILEMMA I’ve found a job I want to apply for, but I don’t meet all the requirements. Is it still worth my while applying?

KAREN’S RESPONSE While it can be disheartening to come across your ideal job that you don’t meet all the requirements for, it’s important to still apply. After all, you’ve got to be in it to win it! Firstly, you can bring your own unique attributes to the role that an employer may not have initially thought of, so focus on your strengths. Secondly, an employer is likely to be flexible with the requirements they’ve outlined on the job description, so the chances are you don’t need to be an exact match to be considered for the role. Thirdly, if you have an aptitude to learn, you can fill in the gaps in your knowledge or experience on the job. I often question why an employer would have strict requirements for an applicant to meet 100% of the job description, as this reduces the opportunity and room for development within the role. On your application highlight transferable skills you have with specific examples of these in practice, and how this skillset will help you to succeed in the role at hand. Crucially, emphasise your willingness to learn, so the hiring manager is confident that you’re eager to grow into the role. Demonstrate why you’re interested in the role and organisation, as your passion and enthusiasm will make an employer more open to moving forward with your application. . • Karen Young is a director at Hays. She is passionate about helping people to find the right job and companies the right person PQ Magazine February 2024

CFOs start new year in positive spirits

The UK’s CFOs seem quite optimistic about 2024, according to the latest Deloitte poll CFOs of the UK’s largest firms are optimistic about prospects for their own businesses as they enter 2024, according to Deloitte’s latest CFO survey. Sentiment among finance leaders has risen for the second consecutive quarter, with more than one in 10 CFOs more optimistic about the financial prospects of their business than they were three months ago. Ian Stewart, Deloitte chief economist, said: “These findings may seem at odds with recent economic news, particularly a contraction in third quarter GDP and forecasts of sluggish UK growth in 2024. But, while the pace of growth softened in 2023, activity proved more resilient than expected, with

unemployment at low levels, corporate profitability holding up and an absence of stress in financial markets. Crucially, inflation has fallen sharply since the summer, bolstering

expectations of earlier interest rate reductions.” There is a strong consensus among finance leaders that the UK has entered a prolonged period of high labour costs. Some 92% of CFOs expect labour costs to remain elevated in the long term, relative to 2023. But CFOs are decidedly bullish on investment in new technology, with 63% of CFOs expecting investment in new technology to increase in the long term. By contrast, CFOs think that levels of flexible or home working have peaked, with a net 57% expecting home working to decline in the long term.

January issue of PQ magazine at http://tinyurl.com/mr2zn77t

numbers arriving in the March and September 2024 intakes.

New Cambridge offices for EY staff EY has announced that it is relocating to a new office in Cambridge, as part of the continued long-term investment plan for the business. The new office will be located at One Cambridge Square, a short walk away from Cambridge North train station. EY’s Cambridge office employs nearly 200 people across the business. This year, the Big 4 firm took on 16 graduates and school leavers at its Cambridge office with further

Nationwide scraps ‘work from anywhere’ Nationwide has decided to end its ‘work from anywhere’ policy and told staff they are now expected to be back in the office at least two days a week. The building society told its 13,000 non-branch staff that the new policy will begin from April. The announcement is the latest move away from the WFH boom, as companies try to boost productivity. HSBC, BT and even Zoom have told staff they need to spend more time in the office.

In brief Show me the money! Pay for part qualified accountants in the UK rose by 6.8% in 2022-23 and are expected to rise by another 6.2% in 2023-24, according to the latest Hays salary and recruitment trends guide. It also found there is a shortage of both PQs and credit managers, which will only add to wage rise pressures. In London, ACCA and CIMA finalist are commanding salaries of £53,000, well above ACA finalist, who are being paid £44,000. An AAT studier can expect a pay packet of £30,000. Check out all the stats in

The PQ Book Club: books you should read The Bookkeeping Superhero – From zero to hero: How to be the ultimate accounting sole practitioner by Natasha Everard (sponsored by AutoEntry, £9.99) The first thing that strikes you when you receive this book is its size! But it is a nice surprise – it’s bigger than your standard book. It is also only 50 pages long and written as if taking place across a working week. It all means Everard has written an incredibly accessible, insightful book, and it is no surprise to us that it was an Amazon Christmas number 1. She really can say she is a best-

selling author now, and even beat Bookkeeping & Accounting for Dummies into second place. Well, let’s see what happens on ‘Motivational Monday’? She starts with one the hardest questions: who are you and why do you want to be a bookkeeper and work in accounting? To be a successful bookkeeper the author thinks you need three ingredients: to be resilience, methodical, and adaptable. ‘Timing Tuesday’ looks at how a team of one manages to fit everything in. Using the right digital tools will be the key to success here – maybe it’s

time to think of your software as just one of your employees. We really liked the chapter on the nitty-gritty of the actual working day too – ‘Workday Wednesday’. How are you with bunching tasks? PQ rating: 5/5 A must-read for anyone starting out on their bookkeeping journey. If you don’t want to buy this great paperback (and you should) then it is free to download at http://tinyurl.com/22td9vur 39

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

One to watch on catch-up: Mr Bates vs the Post Office

Mr Bates vs the Post Office is the first big ITV drama of 2024 and is the prime example of what happens when people believe accounting systems can’t be wrong! It is also a story of terrible abuse of power, where people work in a system where they can’t tell the truth. And yes, we are talking about the Post Office here – you must stop thinking it’s all Postman Pat. The malfunctioning accounting software called Horizon (created by Fujitsu) was full of bugs, errors and defects, but that didn’t stop 736 prosecutions of sub-postmasters. Hard-working people were imprisoned, made homeless and forced into poverty. Divorce, depression and even suicide followed and no one has been brought to account. The CEO between 2012 and 2019, Paula Vennells, was awarded a CBE for ‘services to the Post Office’, but she has now promised to give it back. This followed a petition for it to be returned, and last time we looked 1,228,000 people had signed it prior to the announcement. See http://tinyurl.com/3jc6z6jr The public inquiry into the scandal starts again this month. Check out what we wrote about the scandal in February 2022: see http://tinyurl.com/mr4628d8

’ WEV E

Executives behaving badly What would you do if a blogger wrote critical reviews about your company? Well, US executives at eBay sent live spiders and cockroaches to David and Ina Steiner, who run the e-Commerce Bytes blog, when they wrote things they didn’t like. They were also sent a funeral wreath, a bloody pig mask and a book about surviving the loss of a spouse. eBay has now been ordered to pay the couple $3 million, and faces charges of stalking, witness tampering and obstruction

PQ PODCAST OF THE MONTH

Why do good people do bad things?

All the ‘Bs’

Boxing, basketball and badminton are among the most popular sports with Gen-Z adults (1824 year-olds) in the UK, according to the brandnew EY sports Engagement Index. According to the Index, football, Formula 1, running, rugby union and cricket have the UK’s largest engagement bases overall – but there are significant differences in the sports that most engage Gen-Z adults compared with the rest of the population. Boxing, badminton, basketball and Esports are among the activities all scoring highly for engagement with 18-24 year-olds. Although football and Formula 1 maintain topthree positions with this demographic, cricket, tennis and rugby are among the sports facing challenges when it comes to capturing the imaginations of young adults. The survey found that 59% of all respondents had engaged in sport in the past 12 months – this figure rises to 71% for men but falls to 45% for women. Adults aged 35-44 years old were the most engaged in UK sport, but participation levels were at their highest in the 18-24 year-old age group.

In this Insights in Focus episode, the ICAEW discuss professional ethics and seeks to answer the age-old question: why do good people do bad things? Host Philippa Lamb is joined by Laura Hough, ICAEW director of trust and ethics, and Christopher Cowton, emeritus professor at the University of Huddersfield and associate of the Institute of Business Ethics. You find out all about ‘ethical fading’ and why some people are more ethical than others. Do you know about the fraud triangle? Hough will explain all. And there is no way you should be calling a bribe a facilitation payment! Check out the podcast at http://tinyurl.com/5as6c9zd

GOT THE L OT

The future is wind!

The UK is home to the world’s largest offshore wind farms and Orsted has 12 operational offshore wind farms that it either owns or partly owns, with a further three in the pipeline. Did you know one rotation of a wind turbine blade can generate enough electricity to power a house for 29 hours? Well, we have three model Orsted windmills up for grabs for this month’s giveaway. They will sit perfectly on your desk at home or at work! Find out more about Orsted at http://tinyurl.com/drhpesj6 To win one of these windmills just send an email headed ‘I love wind’ to giveaways@pqmagazine.com along with your name and address.

PQ Book Club

We are giving away all the books we have reviewed for the PQ magazine Book Club over the past few months. Up for grabs are The Happiness Index by Matt Phelans; Mindfulness and the Wandering Mind by Pandit Dasa; Becoming a Strategic Business Leader by Adam Niazi; and this month’s book, The Bookkeeper Superhero by Natasha Everard. To be in with a chance to win one of these fab books simply email us at giveaways@pqmagazine.com with your name and address and we will put you in the hat to win a prize. Head up your email ‘Book Club’.

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 16 February 2024. The main draw will take place on Monday 19 February 2024.

TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM

PQ Magazine February 2024

PQ magazine, February 2024

Articles inside

One to Watch: Mr Bates vs the Post Office

What Lies Ahead in 2024?

Speed Dating the Accountancy Bodies

Win An AAT Scholarship

An Awards Night You Don't Want to Miss