PQ magazine, March 2019

PQ magazine March 2019

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

Careers in accountancy PQ magazine reports from our joint one-day conference, held in association with LSBF

ACCA

top exam tips

CIMA BLUEPRINT FOR THE FUTURE The future is digital and CIMA is re-shaping its syllabus to ensure its PQs are futureproofed.

At the great unveiling at the Future of Finance Festival in London, CIMA’s top man, Andrew Harding (right), said that the new syllabus was “not only future-proofing the qualification, it was future-proofing the profession”.

The big difference from previous syllabus launches is the publishing of exam blueprints.

These have been developed to help demystify the exams, improve student outcomes and, ultimately, increase employability. Tutors have also been heavily involved in the process at every stage and they have helped shaped these new blueprints. “It’s been a much more collaborative process,” admitted Harding.

The aim then is to take out the secondguessing about what is in the syllabus, and means students know exactly what to focus on.

Asked if P1 and P2 will still be the hardest OTs, we were told students will still have to learn the volume of knowledge, but by articulating what is examinable (and not in the exam) CIMA is clarifying exactly what PQs need to do. Harding wanted to stress that this, however, was in no way dumbing down.

To reinforce the changes, E1 Organisation

Management will become Managing Finance in a Digital World, and E2 is renamed – instead of being called Project and Relationship Management it becomes Managing Performance.

By November 2019, when the new OT exams will first be available, students will have been studying subjects such as digital strategy, cyber risks, data and information in a digital age, and the role technology is playing in the finance function. November 2019 is also the date of the last case study sitting under the existing syllabus. However, as an added safeguard CIMA is providing case study resitters the chance of a February 2020 sitting using the same pre-seen.

February 2020 is also the date of the first sitting of the new case study using the 2019 syllabus changes.

CIMA told PQ magazine that it is looking to minimise the disruption to students. It has even launched a microsite for those in transition; the ‘Transition Planner’ has 21 scenarios, so students can work out exactly how the changes affect them personally.

The new textbooks for the 2019 syllabus will be published on 1 August and this will be the first time that students will be able to book their November test.

• Turn to page 14 for more on this.

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CONTENTS

March 2019

News 06CIMA results P1 the problem

26Study tips Tackling questions

08Audit reform Plans criticised

27Inheritance tax Death and

paper this time around

for ‘being too disruptive’

10ACCA exams PQs struggling to get to grips with audit papers Features, etc 04Mind your Ps&Qs Wales salaries – where are they?; and the best of PQ’s social media 13Tech news An update on what’s going on in the digital world, plus new columnist Xero’s Mike Day 14CIMA changes We take an indepth look at the new syllabus

15PQ Awards 2019 Who made this year’s short list?

17International standards The revised conceptual framework explained

18ACCA exam tips What our friends at BPP think will come up in the March papers

20Passing exams When it comes to getting qualified it’s not what you do but how you do it

22ICAEW spotlight Learning in the digital age; and top advice from an ACCA Student Mentor

24ACCA SBL exam Five top tips on how to pass the Strategic Business Leader paper

25Career conference Advice from ACCA’s Claire Bennison for

thriving in the workplace on the balanced scorecard taxes – they’re both here

28Artificial intelligence How do you audit a robot?

29Careers Life at Mazars; some alarming stats about the profession; and our book review

30Fun stuff – and our giveaways The columnists Robert Bruce Xero’s defining moment for the profession 6 Prem Sikka Questions about audit quality won’t go away 8 Zoe Robinson Learning the lessons from the Davos pow-wow 10 Subscribe to PQ magazine It’s FREE – see page 25 or go to www.pqmagazine.com MARCH 2019 ISSUE Total Distribution

30,600 Publisher’s statement: we send both a paper and digital issue to a controlled database each month.

The above figure is the combined total of issues sent out this month.

Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)

The robots are everywhere We couldn’t move for robots this month. The best one we met was Pepper, who was the ‘star’ of CIMA’s Future of Finance Festival! Actually, Pepper was pretty rubbish. When we asked for a picture of it with CIMA’s Andrew Harding the robot’s operator had to pick it up to get it through the crowds!

At the PQ awards judging, which took place at the ICAEW this year, we also came across the ‘How to audit a robot’ guide from the Audit & Assurance faculty. Henry Irving explains all in this issue (page 28), and as he says, just remember that robots can’t think like humans (yet). Of course, we know when we talk about robots we are really talking robotic process automation (RPA), but they really don’t make great pictures!

The new CIMA 2019 syllabus is also embracing the digital world. It’s more evolution than revolution, but is helping to re-invent finance for that world. The speed and scale of change is unprecedented, but employability is key, and CIMA is trying to future-proof your career.

Want to become an examiner?

If you are a tutor then take a look at page 28. The ICB, the hugely successful bookkeeping body, is looking for examiners and writers for its qualification. Call me old-fashioned, but that sounds like a great job!

Awards shortlist Finally, we are preparing to roll out the red carpet for the PQ awards – check out the shortlist on page 15. A big thanks as always to our judges – AAT’s Head of Product Development Rachel Kellet, Paul Turner, Regional Vice President, UK & Ireland at the Association of International Certified Professional Accountants, ICAEW Director of Qualifications Shaun Robertson, ICB’s Head of Learning & Community Engagement Polly Thrasivoulou, and Sharon Machado, Head of Qualification Development & Content at ACCA. Graham Hambly, PQ magazine editor (graham@pqaccountant.com)

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HAVE YOUR SAY Don’t forget Wales!

The results of the salary survey by Karen Young of Hays Accountancy & Finance in last month’s issue of PQ are interesting, but there is seemingly an important omission: there are no results for Wales.

It is good to see that results are presented separately for Northern Ireland, because it is often excluded from many surveys.

However, it has around half as many registered active companies as Wales (according to the FAME database, around 114,000 in Wales versus 56,000 in Northern Ireland). Next time the results are reported, let’s hope for better

Welsh representation.

In addition to this, in future surveys it would also be helpful to

know what ‘Typical’ salary means. Is this the average, the median or the modal salary? As any introductory course in statistics will confirm, different measures of central tendency often need to be interpreted very differently.

Mark Clatworthy, University of Bristol The editor says: I said last month in my Comment that the salaries for Wales would be included in this issue – and they are, on page 8.

Lack of space was the reason we held the figures over.

Thanks also to Jessie Atkinson who made the same point.

Our star letter writer wins a fantastic PQ mug!

What’s in a name?

The Oxford Dictionary (OED) has long been a source for respected definitions of the English language.

However, we at Xero are lobbying for the definition of ‘accountant’ – which currently reads “a person whose job is to keep or inspect financial accounts” to be changed to “a person whose job is to keep or inspect and advise on financial accounts”. This will to shake off the ‘archaic’ perception of the industry and reflect how much the role of an accountant has changed in the past two decades.

Technology offers accountants greater opportunity to offer valuable business insight and advice to their clients. Our proposed revision to the dictionary definition of the term accountant – to add a small but vital verb ‘advise’ – is a positive development that reflects the changing role of a professionally qualified accountant as a trusted advisor to business.

We have launched an online petition calling for 20,000 supporters to sign and back accounting professionals.

In an open letter we are asking the OED to change the definition of accountant as we have witnessed this first hand from our viewpoint at the front lines of this industrial

I need pqjobs.co.uk

change and through working with thousands of progressive modern day accountants. As the leading provider of accounting software to small businesses, around the world we are helping hundreds of thousands of accountants realise this new ambition.

To sign the petition go to https://tinyurl.com/ya8nncto Gary Turner, Co-founder and Managing Director, Xero The editor says: This is an abridged version of the letter Xero sent to a number of relevant parties, including PQ magazine.

social media ROUND-UP PQ magazine was all over Twitter with the CIMA 2019 syllabus launch this month. The star of the Future of Finance Festival should have been the new syllabus, but Pepper the robot stole the limelight. The start of the launch was held up as Pepper tried to make its way to the stage. It didn’t get there, and we tweeted that perhaps robots “aren’t quite ready to take over your job just yet…” Our story caught chartered accountant Will Pepper’s eye. He said: “Get the lad doing my role.

The office won’t notice a difference.” The CIMA syllabus is about embracing the digital world. But as Christopher Argent rightly said on his excellent Generation CFO LinkedIn page: “Great to see these learning changes, but there is much more to do in the reality of finance teams. Technology is impacting today.”

Another story that got heavily retweeted was: “Where do you keep your passwords? Well, Gerald Cotton’s sudden death at the age of 30 has left many people in financial limbo. He had the password for a digital account holding £145m of customer’s money on Canada’s largest cryptocurrency exchange! No-one can now unlock the account.”

One reader disagreed with our front cover headline last month – ‘Life is sweet for part qualifeds’.

Mr31dec said: “Are you freaking crazy? Life is sweet for us? Failed my paper and still hanging.”

Meanwhile, on Facebook’s ACCA global wall Samad Niazi created a poll. He asked: “Is SBR possible on self study?” The answer was a resounding yes from 64% of PQs. There was a proviso though. Noorali Samnani said you need to focus on past papers and examiner comments.

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

Published by PQ Publishing © PQ Publishing 2019

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PQ news

ROBERT BRUCE Is this a defining moment for the profession?

Accountants have, according to the Oxford English Dictionary, been around since at least 1494. Shakespeare referenced one in his play Measure for Measure in 1603. And professional accountants, in the form of belonging to a professional body, have been around since 1854, when a variety of Scots founded the body that became the Institute of Chartered Accountants of Scotland. An accountant, you might have thought, is plainly an accountant.

But the software people are up in arms. Cloud accounting software company Xero wants the definition of ‘accountant’ in the Oxford dictionary updated. The current definition is a plain one and does not, as the company correctly points out, also make it plain that accountants do a great deal of advising as well as getting the figures right (or as right as is possible under the current rules).

And so exercised is Xero about this that it has started an online petition to have the definition updated. If I were publishers of the dictionary I would be worried. A cursory glance at the current debate around accounting reform would suggest that the definitions would have to be changed on an hourly basis. I prefer clarity and plain speaking. It was good to hear Sir John Kingman, the chap in charge of reviewing the state of the Financial Reporting Council, when he appeared at a House of Commons committee the other day. He was asked about how interested investors and shareholders were in their duties. “They hardly ever exercise the power to do anything,” was his succinct conclusion.

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

P1 is hardest CIMA paper The CIMA OT pass rates are in for the year (2018) and first-time rates range from 51% to 89%.

P1 is now the stand-out hardest paper, with a first-time pass rate of just 51%. The next two toughest papers are P2 and F2, both with first-time pass rates of 57%.

Overall, pass rates remain healthy and as always students

seem to love their E papers. They have pass rates of 80%, 89% and 75% respectively.

CIMA said it was pleased with the case study results, too.

Management case study sitters might be shocked to see a 57% case study pass rate after the 70% pass rates throughout the rest of the year. However, November’s CIMA CASE STUDY NOVEMBER 2018 EXAM PASS RATES 57% was still above the 56% achieved by Nov 18 Aug 18 May 18 Feb18 November 2017 sitters.

Operational 60% 49% 43% 51% There was also a big Management 57% 75% 72% 74% jump in the operational Strategic 60% 59% 67% 63% case study pass rate at

the last sitting. At 60%, this is well above the pass rates for the year, which ranged between 43%-51%.

CIMA OT PASS RATES (JAN–DEC 2018) Overall First time Total E1 88% 80% 77% P1 68% 51% 47% F1 85% 76% 72% E2 95% 89% 87% P2 76% 57% 51% F2 79% 57% 52% E3 86% 75% 70% P3 75% 60% 54% F3 79% 60% 55%

CIPFA results more of the same It was the usual mixed bag of results for December CIPFA exam sitters, when the results could finally be accessed. It appears CIPFA’s systems struggled with the sheer number students trying to get their results online in mid-January.

Management Accounting remained the ‘best’ paper with a pass rate of 86%, with Corporate Governance & Law not far behind at 83.8%.

At the bottom end of the scale is

CIPFA DECEMBER RESULTS Professional Certificate Financial Accounting Management Accounting Company Financial Reporting Audit & Assurance Professional Diploma Public Service Financial Reporting Taxation Corporate Governance & Law Business & Change Management Strategic & Policy Development Financial Management Strategic Strategic Public Finance Strategic Case Study

Dec 18

Sep 18

Jun 18

69.5% 86.0% 41.0% 74.1%

28.5% N/A 37.2% 97.2%

63.6% 89.2% 59.2% 76.3%

52.1% 79.5% 83.8% 80.2% 80.0% 68.1%

30.8% 71.4% 90.9% 75.0% 84.8% 64.0%

64.0% 77.1% 91.6% 78.5% 75.3% 73.0%

69.5% 73.2%

N/A N/A

72.4% 78.6%

Company Financial Reporting. This papers mark seems to be on the slide, and CIPFA will need to put in more resources to help students here. The 41% this time around for CFR does not compare well with the June 2017 pass rate of 82.3%!

The only other paper hovering around the 50% pass rate is Public Service Financial Reporting (52.15%). The last real hiccup on this paper was June 2016, when the success rate fell to 40.5%.

In brief Show your workings ACCA exam candidates using the word processing tool for the analysis questions are less likely to show their workings for calculating ratios than those sitting the paperbased exam, said the ACCA FR examiner’s December report. This needs to be ‘improved’ so marks are not lost. In questions testing the prep of financial statements some sitters are putting figures in individual cells and adding the cells across for the answer, while others did the entire working in one 6

cell using a formula. The examiner stressed that both approaches are acceptable, as markers will follow both methods.

• See pages 18–19 for March tips and go to www.pqmagazine.com.

Moore Stephens/BDO merge BDO has completed its merger with Moore Stephens, creating the fifth largest UK accountancy firm. The merged firm will operate under the BDO brand with a combined workforce of 5,000 people across 17 locations,

with revenues of £590m. The Moore Stephens offices in London, Birmingham, Reading, Bristol and Watford have been absorbed by the bigger firm. Its managing partner, Simon Gallanger, joins BDO as head of advisory. He said the merger “enables us to challenge our competition and deliver an increasingly impressive range of services.”

HMRC browned off How do you decide if a Pulsin choc brownie should be exempt

from VAT? Judge Amanda Brown decided she needed a taste test, of course! Pulsin’s brownie is made of dates, chicory fibre and rice malt, and she sampled it alongside a French fancy, sponge cake and tea cake. She then decided that although the brownie has no egg, dairy or gluten it was eligible for a tax break as a cake rather than a biscuit. That means Pulsin gets back four years of VAT, a claw back of £300,000. HMRC will not be amused as it felt the product was confectionary and not a cake.

PQ Magazine March 2019

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PQ news

PREM SIKKA Questions about audit quality won’t go away Despite a number of reviews, the crisis-ridden auditing industry remains on the front pages. This time it is the revelation of £40 million of fraud at Patisserie Valerie that threatens 3,000 jobs and £4.2 million owed to suppliers. The company had audit committees, non-executive directors and an internal audit function to manage risks. It was audited by Grant Thornton and always received an unqualified audit opinion.

The company announced that the frauds involved “very significant manipulation of the balance sheet and profit and loss accounts. Among other manipulations, this involved thousands of false entries into the company's ledgers”. Consequently, the past “cash flow and profitability of the business has been overstated”.

Unauthorised bank accounts and overdrafts may have been used. It is alleged that one of the practices of those involved in the frauds was to submit multi-million-pound cheques shortly before the company’s year-end.

These would subsequently bounce, but nevertheless improve the company’s year-end cash position and liquidity.

Auditors should independently corroborate bank accounts, loans and overdrafts. They should examine postbalance sheet events, particularly the bounced cheques and their implications.

The FRC is investigating the Grant Thornton audits and its eventual report should provide some answers.

Meanwhile, questions about good governance and usefulness of audits are likely to get louder.

Prem Sikka is Emeritus Professor of Accounting at the University of Essex

Audit reform ‘too disruptive’ Radical, disruptive and expensive is how the ICAEW has described the changes the competition watchdog wants to the audit profession.

It said that the introduction of joint mandatory audits would simply cause “significantly more disruption and cost”, and was worried the results are just too unpredictable.

Now the Big 4 firms are pushing for a delay in the sweeping reforms.

They have written to the Commons business committee asking for a postponement until at least the completion of Donald Brydon’s separate review of whether the work of auditors is good enough.

Mid-tier firm BDO has also rejected the Competition and Markets Authority’s compulsory joint audits idea. It said: “We believe the joint audit model will take at least 10 years to set up and it will cement the view of business and the CMA that there is a division of skills between the Big 4 and challenger firms.”

Despite this industry pressure, some 72,000 people have contacted the CMA urging it to impose tough new rules regulating the industry. The response was initiated by 38 Degrees, an online petition site.

Those Wales salaries…

Welsh finalists will be earning less than the UK average, which is £32,198.

The average salary for AAT studiers in Wales is a healthy £21,000. That’s £2,500 more than someone doing the same job in the north east of England, £3,000 more than the average in Yorkshire, but £4,000 less than those in London.

Check out the full table at www.hays.co.uk/salary -guide.

CIMA trainees are the best-paid PQs in Wales, according to the latest Hays salary survey.

SALARIES IN WALES 2018 ACCA Finalist £30,000 PQ/semi senior £26,000 Trainee £18,000

CIMA £30,000 £28,000 £20,000

A CIMA finalist can expect to earn over £2,000 more than their ACA and CIPFA colleagues. CIMA part qualifieds at semi-senior and CIPFA ACA trainee level also £28,000 £28,000 top the take home £22,000 £25,000 pay table. £18,000 £18,000 However, many

Graduate vacancies on the rise The UK’s top employers are increasing their graduate vacancies by 9.1% in 2019, the highest annual rise in graduate recruitment since 2012.

The latest report from High Fliers Research says the biggest increases in jobs are expected at public sector employers and at the accountancy and professional services firms.

That said, graduate starting salaries are expected to remain unchanged for the fifth consecutive year in 2019, at a median starting salary of £30,000.

It should be noted that had the medium graduate starting salary of £27,000 paid by top employers in 2009 kept pace with inflation, it would now be worth over £35,500, over £5,000 more than this year’s medium pay.

For the accounting and professional services the range of graduate salaries on offer was £20,500 to £42,000.

In 2018, the accounting and professional services recruited 4,524 graduates, an 11.8% increase on 2017. This year the research found that current vacancies stand at 5,248.

In brief Apprenticeships fear Apprenticeships are back on the rise, but only for middle-class kids. During the first quarter of the 2018-19 academic year the number of apprenticeships started rose 15.4% to 132,000. However, there is a worry that teenagers from poorer backgrounds are being blocked from starting degree apprenticeships. A report from the Higher Education Commission described a “middle-class grab” of degree apprenticeships, after discovering that those living in 8

deprived areas must travel up to 12 times as far as their wealthier counterparts to take them up.

Don’t forget time limits ACCA has reminded PQs that they have seven years to pass the strategic professional exams once they pass their first strategic exam.

If you don’t pass all the exams and reach affiliate status within those seven years you will lose any strategic professional passes achieved after that time. These papers will then need to be retaken

in order to complete ACCA. So, for example, if you passed AFM in December 2013 your pass will have an ‘expiry date’ of December 2020. There are no time limits for passing other levels of the qualification.

Public Finance Live CIPFA’s two-day annual conference is in Birmingham this year with a new name – Public Finance Live. ICC will be the venue in July and as always CIPFA is running a dedicated free student

conference on the first day (9 July), which is open to both CIPFA and CIMA PQs. This year’s event will focus on five areas at the heart of public finance: financial resilience and trust; regeneration; data and technology; people and places; and talent and skills of finance.

• @cipfaNorth East wants you to #getinvolved with its social media feed. It has vacancies for CIPFA members and students volunteers to help with social media, website maintenance and photography at events.

PQ Magazine March 2019

PQ news

ZOE ROBINSON Lessons from Davos

For many the events at Davos, where the World Economic Forum holds its annual conference, will pass unnoticed. This year’s theme was ‘Globalisation 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution’. As part of the proceedings Asheesh Advani, President and CEO of JA Worldwide, a company that prepares young people for employment and entrepreneurship, wrote an article setting out how he believes education needs to change to ensure we have a workforce capable of prospering in this brave new world.

His suggestions provide us with a useful checklist to assess the relevance of financial education: 1. Partner with employees – to close the skills gap.

2. Teach skills that change mindsets – help people learn how to learn, give them the capabilities to continually acquire new knowledge and work with others.

3. Opt for experience-based learning – shadow experts and get students working on real world issues.

4. Rethink curriculum refresh rates – syllabuses need to change far more quickly.

5. Push the technology envelope – ensure the latest technologies are taught and mastered.

With all the professional bodies embracing the apprenticeship model, case studies offering some degree of real world experience in addition to the workplace and syllabus agility high on the agenda, education in accountancy is not looking too bad... until Davos 2020, that is.

Zoe Robinson is Learning and Programmes Director at Kaplan Financial

Struggling with audit exams?

ACCA students are still struggling to pass the audit papers (AA and AAA), if the December pass rates are anything to go by.

Both papers have the dubious honour of having the lowest pass rates at the ‘applied’ and ‘strategic professional’ levels.

AA paper sitters told PQ magazine their heads were still spinning after sitting the December paper, and the 38% pass rate seems to bear out the fact that many candidates spent too long on section A. Student feedback on AAA was all about time pressure and that pass

Impressive ICAEW results ICAEW students banished those winter blues with another great set of professional level results.

PQs scored highly in all the ACA professional exams, with Business Strategy & Technology seeing the highest pass rate (89.9%), closely followed by Tax Compliance (84.9%) and Financial Management (84.1%).

When looking at the business planning papers students might be tempted to opt for the tax paper and its 81.8% pass rate, rather than the 68.1% achieved by those sitting the banking paper.

The AAT is stamping down heavily on members who have been providing self-employed accountancy services to the public without a licence and without appropriate anti-money laundering (AML) supervision.

Recent pages of disciplinary news in Accounting Technician magazine have been full to bursting with stories of reprimands, fines

ACCA DECEMBER PASS RATES AB MA FA LW PM TX FR AA FM SBL SBR AFM APM ATX AAA

Dec 18 83% 64% 72% 82% 39% 51% 51% 38% 43% 48% 47% 41% 33% 40% 31%

Sept 18 80% 63% 69% 83% 43% 49% 51% 37% 47% 45% 47% 35% 33% 30% 30%

Conference success

ACCA’s Claire Bennison opened proceedings at the recent LSBF/PQ one-day conference. She told a packed hall how tommorrow’s accountants should prepare for the changing world of work. See page 25 for the full story.

AAT taking action

The future is electric By 2030 there will be 21 million electric vehicles (EV) on the world’s roads, says new research from Deloitte. The claim comes after a record year for EVs, as sales doubled to two million units in 2018.

Deloitte predicts that sales will double again to four million by 2020, before rising to that 21 million figure in 2030. It said over the next five years the costs of electric cars will drop to the same level as their petrol and diesel equivalents. However, there is a worry about an over-supply of EVs, as customers still 10

rate, at 31%, remains the lowest of all the papers.

Feedback following the PM paper was mixed. Students seemed to struggle with how the information was presented, and one PQ was worried they had underestimated the test. With a pass rate of 39% and 43% for the last two sittings, that would be unwise!

It wasn’t all tough news. There was a jump in all the applied knowledge paper pass rates, compared to the September sitting. And, there was a big jump in the AFM and ATX pass rates this winter.

and warnings over future conduct.

There were at least 20 members listed for punishment.

The fines have varied from £140 to £2,343, and in many cases the sanctions also remain live on the member’s record for 24 months.

AAT’s head of professional standards, Adam Williamson, explained that recent changes in the way it collected data from

seem reluctant to make the switch. Deloitte said EV manufacturers must build on their brand awareness and ensure positive customer experience at every point of contact.

Beware fake news Beware the proliferation of ‘fake news’, warns KPMG’s David Ferbrache. KPMG’s chief technology officer recently highlighted 10 security trends to expect in 2019. Along with a coming of cyber warfare and ecommerce in the crosshairs is the rise of fake news. Ferbrache said he “expects to see more attention being paid to fake news and to the censorship and removal of inappropriate content, however it is defined,” and to “see more automated targeting of individuals and

members during renewals and licence applications led to the identification of a number of members who were offering services without the necessary AAT licenses. He said: “As a result of these changes, the cases have essentially all come at once, hence the large number of notices you have identified.”

Williamson stressed that the AAT has now brought all these members into compliance, and this is not indicative of widespread or ongoing problem.

specific interest groups through social media.”

• See the March issue of NQ magazine for more on all the trends.

Crypto clarity Regulation of the crypto-asset market has become a hot topic, and PwC is supporting the Financial Conduct Authority’s proposals to help address the ambiguity in this emerging area.

PwC’s Steve Davies said the FCA is looking to move fast, with final guidance expected in the summer. He said: “The regulator’s plans should help to reduce the perceived reputational risks for issuers and firms involved in the crypto-asset market, allowing those who wish to move into this space to do so more confidently.”

PQ Magazine March 2019

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tech news PQ

MIKE DAY The robots are coming!

We’re all doomed!

The 2013 OU report ‘The Future of Employment’ explained how roles like accounting assistants and paralegals were going to cop it. Dentists and psychologists were quids in. It’s all to do with the difference between formulaic, repetitive tasks and things that require more human attributes – the stuff that computers suck at.

Creativity, relationship building, common sense and understanding emotions, to name a few.

And so accountancy is doomed as a profession, right? Nope, we don’t think so – in fact, we are seeing the exact opposite happening. As the high levels of keying in transactions (and coding them) reduces, then so the opportunity to interact with the business increases (or with clients if in practice). This means giving advice on the decisions, plans and direction of the business. In a human way. A way that builds relationships, not invisible barriers.

Recent surveys of Xero accounting practices have shown that more people are hired, not fewer. How can that be when we also see that every employee is serving far more clients without putting in more hours? That would usually mean a reduction in staff, not more. The answer is that those same practices are interacting with their clients far more, every day.

And that means explaining, giving advice, and – yes – building relationships. We also see cloudbased practices have higher revenue growth with less client attrition.

Importantly, there’s less staff attrition.

After all, you’re doing more of what you trained to do in the first place.

Mike Day, Director, UK Education Sector, Xero

Finance teams need new digital skillset Finance teams lack the digital skillset to embrace the latest advancements in AI, says a new study from the Association of International Certified Professional Accountants and Oracle.

To make the most of the new technologies finance teams need to be evolving the competencies of their staff in areas such as analytical thinking, decision making and business partnering. At present, this skills gap is having a negative impact on revenue growth.

The study of over 700 global

finance leaders found 89% of organisations have not deployed AI in the finance function, and only 10% of finance teams believe they have the skills to support the organisation’s digital ambitions.

The report identifies three common traits tech-savvy finance teams have: • Digital finance leaders have a digital-first and cloud-first mindset, which automatically gives them greater access to intelligent process automation.

• Leading finance teams are able to

connect data that was previously in disparate applications to uncover new insights.

• These teams move beyond reporting and are using data-driven insights to influence the direction of the business.

The UK’s flagship event for the accounting and finance profession will return to London’s Excel on 1-2 May. Last year saw attendances reach almost 8,000 as Accountex became the place to be for those looking to keep up-to-date with the latest trends. Sage, Quickbooks and Xero will all be there, but there will also be a whole host of start-ups and new exhibitors, including Reed recruitment, Flywore and Clockwork IT. Over 200 seminar sessions are also offered over the two days.

Accountex going big

Get that hour back The average professional spends over a quarter (28%) of their working day reading and answering emails, according to analysis from McKinsey. That translates into 120 messages received a day and 2.6 hours dealing with them!

Many professional have started to take drastic action to cope with this never-ending onslaught. One option is the inbox-zero approach,

where there is a compulsion to clear every email. At the other end of the scale is those who, in effect, have given-up – emails come in to the inbox and there they remain.

Zarvana, the online productivity training company, has put together a list of five tweaks to free up more time: • Apply a ‘single-touch’ rule to your inbox. We spend 27 minutes a day

brought the issue to a head. The UK, for example, has announced a 2% tax on revenues of digital operations. This is expected to raise about £400m from 2020.

France and Italy have launched similar 3% digital revenue taxes.

up from 98m in 2018. The smart speaker market is expected to grow by 63% year-on-year to £5.6bn in revenue.

rereading emails because we don’t process them after reading them.

• Turn off email notifications and check emails hourly. On average we check emails 15 times a day.

• Use search to find emails. Forget folders. Searching and scrolling is 9% faster than using folders.

• Have just two folders. Don’t waste time physically moving emails around. Just have archive and readings folders • Automatically filter ‘no-action’ emails and you will earn yourself eight extra minutes a day.

In brief Tech giant crackdown The global tax rulebook is about to be torn up in an effort to end the avoidance games of the tech giants. The Organisation for Economic Co-operation and Development has said its members have agreed to “address the tax challenges of the digitalisation of the economy”. In the past, both the US and China have refused to engage in looking at the global tax rules because their companies and exchequers were the main beneficiaries. Unilateral action has PQ Magazine March 2019

Hear and now Deloitte is predicting smart speakers – internet-connected speakers with integrated digital assistants – will be the fastest growing connected device in 2019, with 164m units to be sold globally,

£190k lost a day UK victims of cyber crime lost more than £190,000 a day, according to the latest Police stats.

More than a third of these victims had their social media or email accounts hacked. Action Fraud said some 13,357 people reported a cyber crime in the past six months. The warning has gone out

again for people to keep separate passwords for online accounts.

Bring back the old What do you do if your new expensive phone isn’t selling as well as you’d hoped? If you are Apple you go back to offering your cheap and popular iPhone SE model. The SE was dropped last September, as Apple pushed is £1,000 XS smartphone.

Remember, SEs also have standard headphone sockets, so you don’t have to wear those silly earphones.

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PQ new CIMA syllabus

Future-proofed As CIMA launches its 2019 syllabus we talk to Andrew Harding, chief executive of management accounting at the AICPA ransforming the finance function has been at the core of the new CIMA syllabus changes unveiled recently. As Andrew Harding says (on the front cover of this issue), the aim of the changes is not to just future-proof the qualification but to future-proof the profession!

But he stressed that what CIMA and the Association is proposing is a profound change – where all student and member learning takes place in a digital environment.

It also means that once you are CIMA qualified it doesn’t end there. You will be required to continually reboot your skill set. “Everyone is a learner now, you can’t afford not to be,” he explained. And that means we all have to take ownership for ensuring we have the skills to remain

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employable.

The competency framework has been updated and at its core now is digital skills, which has been added to the four existing knowledge areas (technical, business, leadership and people skills).

A new digital mindset professional development course has also been launched to enhance member competencies and skills, This free CPD bundle (it’s worth £225) is offered through the CGMA store – free to paid-up

members and CIMA qualified students.

Upon completion participants will receive a digital badge valid for 12 months.

Turning back to the 2019 syllabus, Harding explained the three pillars, OTs and case studies are all still there.

However, for the first time CIMA will publish exam blueprints based on the syllabus. This will set out in detail what is examinable in each of the OTs and case study exams for a given period and will provide information about the format, structure and weightings of the assessments. These blueprints will then be updated and published annually.

CIMA still suggests that PQs start their OT studies at each level with the Enterprise pillar, move to the Performance pillar and finally the Financial pillar.

The new syllabus also tries to connect the exams much more closely to the real world. CIMA has, for instance, developed 500-plus ‘I can’ statements; these relate to the things someone can do when they pass a level of the exams. “There is now a direct link to what employers want,” explained Harding. PQ • See next month’s issue for more details about the CIMA 2019 syllabus.

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“I chose ACCA because it’s the largest and most global professional body, and I believe it can take my career much further than other qualifications.”

Joanne McCourt, Commercial Insight Manager, New Look

PQ Magazine March 2019

PQ Awards PQ

Who made the 2019 short list?

Thanks to all who entered our awards – unfortunately not everyone can make the short list.

See next month’s PQ magazine for all the winners and the action pix!

STUDENT BODY OF THE YEAR • Birmingham Chartered Accountants’ Student Society (BCASS) • Bristol & District Chartered Accountants’ Student Society (BADCAS) • Northern Chartered Accountants Students’ Society (NCASS) • North West CIPFA Student Network (NW:CSN) • Sheffield & District Chartered Accountants Scoiety (S&DCASS) ACCOUNTANCY BODY OF THE YEAR The usual suspects!

ACCOUNTANCY COLLEGE OF THE YEAR Public Sector • University of Derby • University of Liverpool • London South Bank University • Manchester Metropolitan University Private Sector • All Inclusive Advice & Training • BPP – Leeds • Kaplan Financial – Glasgow Centre • London School of Business and Finance – London Campus • Training Link ONLINE COLLEGE OF THE YEAR • HTFT Partnership • LearnSignal • London School of Business and Finance • Premier Training • Training Link LECTURER OF THE YEAR Public Sector • Chris Barlow – University of Liverpool • Lindsey Stewart – Robert Gordon University • Matt Davies – CIPFA Education and Training • Vijay Lee – London South Bank University • Yasar Zahid – Manchester Metropolitan University

• PASS Scheme – Severn Trent • Samantha Hannigan – Premier Training • Vijay Lee – London South Bank University

Private Sector • Andy Booth – iCount Training • Brigita Petrova – London School of Business and Finance • Hannah Granger – Kaplan Financial • Libby Morris – BPP • Paul Robbins – PACA Adult Learning STUDY RESOURCE OF THE YEAR • BPP Publishing • Kaplan Financial – Academic Support • London School of Business and Finance – ACCA Library ‘ACCApedia’ • Mindful Education • Premier Training INNOVATION IN ACCOUNTANCY • Kaplan Financial – Adaptive Learning • Learnsignal – Exam Bootcamp • London South Bank University – Be Aware and The Dark Side of Accountancy conference • Lynsie Chew (UCL) – Icarus financial planning simulation • Yasar Zahid (Manchester Metropolitan University) – Utrecht/Manchester Metropolitan joint unit assessment BEST USE OF SOCIAL MEDIA • The Association of Certified Professional Accountants (CIMA & AICPA) • London School of Business and Finance– LSBF TV • Shaer Halewood – Wirral Borough Council • Training Link • UK (Only) ACCA Distance Learning (Independent Study Group) Facebook Group TRAINING MANAGER OF THE YEAR • Brunilda Aliaj and Daniel Amoakah – Training Place of Excellence • Pantelis C Fouli

ACCOUNTANCY TEAM • Arch Apprenticeships – Teresa Clarke and Carly Barnes • De Montfort University – Department of Accounting & Finance • Listers Group Ltd. • Ulster University Jordanstown Department of Accounting, Finance & Economics • University of Winchester Accounting & Finance Team of West Downs Business School, Accounting & Finance Programme ACCOUNTANCY PERSONALITY • Alan Lynch • Gareth John • Gloria Murray • Khalid Farah • Mary Ofili EDITOR’S SPECIAL AWARD To be announced on the night APPRENTICE OF THE YEAR • Christoper Hayes • Emily Nicholson • Harry Rothwell • Louis Thursfield • Zane Salmon NQ OF THE YEAR • Daniel Amoakoh • Hassan Khan • Iryna Mazrimas • Netty Barlow • Sophie Medwell DISTANCE LEARNING STUDENT • Catherine Cassidy • David Blair • James McDowell • Klaudia Raczweicz • Rouhan Ahmed PQ OF THE YEAR • Alpa Mehengra • Charity Sherratt • Jujhar Singh Dusanj • Magda Liibert • Rebecca Dixon

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conceptual framework PQ

Frame the question In part one of a two-part series, Tom Clendon explains what the the revised conceptual framework is and why it is important he framework for financial reporting was revised in 2018. As the framework is an important and topical issue it is regularly examined, and in the first of two articles I’ll explain how the revised framework will affect students in their upcoming exams.

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What is the framework?

Firstly, let’s remind ourselves why we have a framework. After all, there are plenty of accounting standards in place to give clear instruction on how to deal with the various accounting transactions.

The conceptual framework for financial reporting (the framework) is a set of principles, not rules, issued by the International Accounting Standards Board (IASB). The framework is designed to assist: • The IASB in developing International Financial Reporting Standards (accounting standards).

• Preparers develop consistent accounting policies.

• In the understanding and interpretation of standards, where there is no applicable accounting standard in place.

For the avoidance of doubt, the framework is not an accounting standard and does not override the requirements of any particular accounting standard.

The framework has been variously described as a base, or foundation, on which accounting standards can be built; and a constitution that will influence the revision of existing accounting standards and the development of new accounting standards. To that extent the framework can also be regarded as a map that indicates the future of financial reporting.

So, the framework is accounting theory and rather abstract. It is, though, an important issue, and now also a topical one because, in March 2018, the IASB reissued it.

Why did the IASB revise the framework?

The previous framework was criticised for being out of date and not addressing certain key topics. For example, it did not give any conceptual guidance as to whether gains or losses should be recognised in the statement of profit or loss or in other comprehensive income.

As a result of this vacuum we currently have an inconsistent, ad hoc rules-based approach as to where gains and losses are recognised.

This has led to other comprehensive income rather acting as a dumping ground for odd gains and losses allegedly not deemed suitable for the statement of profit or loss. This is clearly unsatisfactory.

So how has the framework changed?

PQ Magazine March 2019

Prudence returns!

Believe it or not, the age-old tradition of expecting accountants to be prudent was not explicitly set out in the previous version of the framework. Prudence as a concept has now, rightfully, been reinstated.

For information to be useful, so the framework argues, it must be relevant and faithfully represent the substance of financial information; and for information to be a faithful representation it has to be neutral. The revised framework reintroduces the concept of prudence as the IASB believes that prudence supports the neutrality of information. Prudence is defined as “the exercise of caution when making judgements under conditions of uncertainty.”

A new definition of a liability Again, let’s look at the previous and the revised definitions to see what has changed!

Previous definition of a liability A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

The new definition of a liability A present obligation of the entity to transfer an economic resource as a result of past events.

An obligation is a duty of responsibility that the entity has no practical ability to avoid.

A new definition of an asset It has been long established that there are five elements in the financial statements: assets, liabilities, equity, income and expenses. The revised framework puts the definition of assets and liabilities centre stage and has taken the opportunity to tinker with their definitions.

Let’s look at the previous and the revised definitions to see what has changed!

Both the original and revised definitions concur that a liability does not have to be legally enforceable, but the revised framework has introduced the concept of “no practical ability to avoid”. The new definition also clarifies that a liability is the obligation to transfer an economic resource, and not the ultimate outflow of economic benefits. As with the revised definition of an asset, the outflow no longer needs to be expected.

Previous definition of an asset A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.

The new definition of an asset A present economic resource controlled by the entity as a result of past events. An economic resource is a right that has the potential to produce economic benefits.

Recognition criteria for assets and liabilities The revised framework states that recognition of an asset or liability in the financial statements is only appropriate if it results in relevant information and is a faithful representation of the element. This is different from the previous framework, which articulated its recognition criteria on the basis of a probable flow of the economic benefits that could be determined reliably.

An asset continues to be regarded as a resource that is controlled and results in future economic benefits; namely, an asset is not defined by reference to legal title, but the new definition clarifies that the potential economic benefits no longer need to be expected and they do not need to be certain. Arguably this could result in more assets being identified.

Next month In the April issue of PQ we’ll look at how the revised framework deals with the measurement of assets and liabilities, plus more about the statement of other comprehensive income. PQ • Tom Clendon is the AVADO lecturer for ACCA Strategic Business Reporting and Financial Reporting 17

PQ ACCA March exams Performance Management (PM) There is no longer any formal reading and planning time at the start of this exam.

However, you are strongly advised to plan answers to section C before you start to write. Always ensure you make reference to the scenario in your answer. The exam will be approximately 40% calculation and 60% discussion, meaning it is not sufficient to be able to perform all of the calculations. Remember, interpretations and application are crucial, especially in section C. When it comes to sections A and B the best advice is to study all the areas of the syllabus.

Areas expected to be tested in section C include: • Budgetary systems.

• Planning and operational variances.

• Mixed and yield variances.

• Evaluation of the company performance (either a whole or a divisional basis).

This paper is also called PM, so maybe it would be wise to prepare to evaluate some performance!

Here’s some great tips from top provider BPP, focusing on the four papers with the worst pass rates in December. For all our tips go online to www.pqmagazine.com Advanced Audit & Assurance (AAA) By now, you should have a better idea of what is expected of you – the most recent AAA exams have contained no real surprises, although you should take a look at the presentation of the embedded email and the supporting exhibits in the case study (look at the specimen exam and past papers).

Section A will comprise of a case study set at the planning stage of the audit. Candidates will be required to address a range of requirements from syllabus sections A, B, C and D. You will be tackling a real-world situation where you may have to simultaneously address a range of issues in relation to planning, risk assessment, evidence gathering and ethical and professional considerations.

Four professional marks are available in section A – think structure, layout and clarity.

In section B, one question will always predominantly come from syllabus section E, so be prepared to answer a question on completion, review and reporting. There are a number of formats this question can adopt, including the assessment of a going concern, the impact of subsequent events, evaluation identified misstatements and any corresponding effect on the auditor's report. Candidates may also be asked to critique an auditor’s report or a report which is provided to management.

The other section B question can be drawn from any other syllabus area. Syllabus section G on current issues is unlikely to form the basis of any question on its own.

Make sure you read the five technical articles on exam technique, which cover ethics, risk and accounting issues.

EXAMINER’S REPORT EXTRACT (DECEMBER 2018) Overall, December candidates appeared to be better prepared for the exam and demonstrated improved exam techniques compared to recent sittings. However, the examiner felt the ability to apply that knowledge appropriately rather than simply state a learnt point is still not demonstrated by a majority of candidates.

Section A tested PQs ability to tackle the planning stage of an audit alongside audit acceptance considerations. Q2 was focused on audit completion, including reporting and going concern assessment, with Q3 covering money laundering, ethics and professional issues.

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EXAMINER’S REPORT EXTRACT (DECEMBER 2018) December’s section B covered a range of topics: • Cost volume profit analysis.

• ABC. • Life-cycle costing.

• Variances.

• Decision making under risk and uncertainty.

In section C candidates were presented with questions drawn mainly from the areas of: • Pricing.

• Transfer pricing.

• Performance measurement in a private sector context, and a divisional structure.

• Rolling budgets.

• Flexed budgets.

Students sitting the CBEs were reminded to use the spreadsheet functionality available. Totals should be calculated by inserting formulae rather than typing in the number. This was still an issue in the December 2018 exam, even though this type of exam is now well established.

Audit & Assurance (AA) In section A, each mini-case will test single topic areas of the syllabus. That said, expect section A to focus on syllabus areas A and E. The majority of marks in the three questions in section B will test syllabus areas B, C and/or D. Areas expected to be tested in questions 16 and 18 include: • Audit planning.

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

• Internal audit.

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

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

Pay attention to the verbs used in the question as these indicate the marks available. For example, the verb ‘explain’ requires a sentence and will score one mark if properly explained. The verb ‘list’ simply requires you to list out information with no further explanation and will score 0.5 marks per point.

EXAMINER’S REPORT EXTRACTS (DECEMBER 2018) The exam marking team was pleased that once again almost all candidates attempted all 15 questions. Section A in December included questions on the following areas: • Professional ethics and application of ACCA’s code of ethics and conduct.

• Corporate governance.

• Substantive testing, including analytical procedures, revenue, bank and cash and trade payables.

• Subsequent events.

• Audit finalisation and review.

• Auditor’s reports.

Good exam technique is vital for success in AA and the examiner was pleased that many candidates followed the instructions in audit risk and internal control questions and structured their answer in columns.

Some 70% of the marks for AA are written, so it is essential you practise as many exam standard questions as you can before the real thing.

PQ Magazine March 2019

ACCA March exams PQ Advanced Performance Management (APM) From September 2018, question 1 focused on a range of issues from syllabus areas A (strategic planning & control); section C (performance measurement systems & design); and section D (strategic performance measurement).

In recent exams Q1 has often required linking a business's mission to its performance objectives using the concept of CSFs and KPIs. You may well have to critique and recommend improvements to performance reports and the balanced scorecard could well be tested in this concept.

The assessment of performance is also likely to to be tested and this could easily include benchmarking as a theme.

Financial performance measures (ROCE/RI/EVA) are also likely to be commonly examined in Q1, but don’t neglect non-financial issues from syllabus section D, such as quality management and reward systems.

From September 2018, one of the section B questions will come from syllabus section E. In section B commonly tested areas include: • Quality management.

• Information reporting (eg big data, lean information).

• The application of strategic models (such as PEST, Porter’s Five Forces, the value

PQ Magazine March 2019

chain).

• HR framework (eg reward and appraisal systems).

• Risk management.

• Environmental management accounting.

EXAMINER’S REPORT EXTRACTS (DECEMBER 2018) Most candidates attempted all parts of the questions and there was no more evidence of poor time management in terms of completing the exam than is usually the case.

This is the second paper where there was no choice in questions in section B and the examiner felt that a number of candidates may have been caught out by this. They hadn’t prepared across the whole syllabus!

The examiner repeated the warning that if you come to the exam expecting to repeat memorised material you will probable score between 20% and 30%.

In December, candidates showed a lack of knowledge of basic subjects such as the six sigma method (2c) and the impact of risk and uncertainty (3a and b).

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PQ ACCA exams

The professionals When it comes to getting qualified, it’s not what you do but how you do it, says Catherine Edwards n September 2018, ACCA introduced the new Strategic Professional exams that test the skills employers expect ACCA members to demonstrate. Employers want to see members who are technically competent.

But to go beyond this value, employees must also be able to apply their technical knowledge in a professional manner, and we call this professionalism.

According to the Oxford English Dictionary, professionalism is the “high standard you expect from a person who is well trained in a particular job”. The definition captures the spirit of what ACCA is examining across all Strategic Professional exams; the professional application of technical knowledge in order to do a good job.

Professionalism is different to professional skills. The professional marks in Strategic Business Leader are awarded for specific professional skills that are identified in the exam, such as scepticism, commercial acumen or communication and students can gain 20 marks for the application of these skills.

Strategic Business Reporting (SBR) and the Options exams have fewer dedicated professional marks available (four marks).

However, the professional application of technical knowledge will make a big difference to a student’s final mark.

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Grasping the difference Reviewing December 2019 SBR exam scripts and feedback from candidates and tutors, it seems that some have not grasped fully how SBR is different.

Grasping the difference will have a positive impact on marks awarded. The difference is professionalism!

In the P2 exam, candidates regularly had to perform detailed calculations, but now in SBR candidates need to be able to analyse the data and communicate the results and implications to stakeholders.

Professional accountants today do not just calculate numbers; instead, they add value through their interpretation and analysis. Professionalism in this case is the ability to provide a holistic view of reporting with more emphasis on communication with stakeholders.

ACCA’s official advice from examiners is as follows: “Overall, candidates will have to demonstrate a range of skills and abilities, which include relating accounting issues to relevant concepts 20

and practical situations. Besides the specific technical knowledge relating to group financial statements, the examination will require candidates to exercise professional and ethical judgement. There will be a requirement to adopt a stakeholder/investor focus in answering some questions… the new SBR syllabus does not require a different knowledge to that which was required in P2… however, there has been a change in how the examining team expects the candidate to apply that knowledge” (see www.accaglobal.com/sbr/guidance).

Taking the ethics and stakeholder questions in SBR, marks for professionalism will be awarded for the overall quality and communication of answers. A number of factors are looked at, such as the relevance of advice given, the clarity of information and explanations provided, and presenting logical conclusions and recommendations. Marks will also be awarded if the answer is communicated appropriately; for example for the format, structure and presentation, layout of the key objectives and for the use of judgment in addressing them.

These principles of professionalism apply to the Options exams as much as SBR so it’s worth taking note of.

Here are some practical tips to remember in all Strategic Professional exams, they will not only help you gain marks, but will support you in the workplace: • Take time to read the entire scenario and plan your response. You will find

professionalism is better demonstrated when you take time to plan, rather than rushing to get your technical knowledge onto paper. Planning your answers, focusing on all of the above, the technical marks will also climb as they are integrally related.

• Use the scenario in your answer.

Examiners often report that they see evidence of rote learning, meaning that candidates have learnt the technical content but are not applying it to the scenario presented. Using the scenario will help you apply knowledge and consider what is being asked professionally.

And more specifically for SBR: • Conceptual Framework questions will usually be set in the context of a scenario – ensure that your answer applies the framework’s principles to the scenario provided.

• Think about your response from the stakeholder’s point of view. Thinking about the stakeholder will help you frame your response and gain marks from your professional application of knowledge.

• Catherine Edwards is ACCA’s director of skills and assessment

Improve your chances Professionalism will not only improve your chances of success in all Strategic Professional exams, but we know it is also the key attribute employers are looking for, so it’s worth the attention!

For more on professionalism see the article ‘Scoring Professional Marks’ available on the ACCA website; go to https://tinyurl.com/ybjb4pgb PQ PQ Magazine March 2019

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PQ ICAEW spotlight

Learning in a digital world ICAEW is introducing a set of e-learning modules to tackle the issues raised by digital transformation t the ICAEW we have partnered with Deloitte to develop Finance in a Digital World, a suite of online learning modules designed to help ICAEW students and members increase awareness and build understanding of digital technologies and their impact on finance. Through eLearning, videos, animations, cases and interactive exercises, we explore the technologies that are transforming the profession, while understanding their applications and benefits and to determine how the role and skills of finance are changing.

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Knowledge is power Preparing yourself and your organisation for the impact of digital disruption might feel like a daunting task. The first step to embracing digital is to understand the digital revolution and what it means for finance functions and for you. Finance in a Digital World covers how digital influences our personal, professional and

social lives, while also exploring how it is fundamentally changing business, economies, societies and finance.

The role of finance is changing Digital technologies are set to have a revolutionary impact on the work of accountants and are already transforming the way finance operates.

The ‘Impact’ module in our e-learning experience is designed to help you understand how finance functions will change, the skills that will be needed and the role you will play.

Disruption is the new normal Artificial intelligence, blockchain, robotics and predictive analytics are transforming the finance and accounting profession.

These disruptive technologies bring with them both challenges and opportunities for finance. Technologies such as robotics and AI are increasingly being used to drive efficiencies by automating finance processes and reporting routines.

With operations automated, finance will increasingly focus on advanced analytics techniques, influencing the business through forward looking insights that predict business opportunities and risks.

Learning modules will cover:

• Digital Era: Identify what digital means and how it relates to finance.

• Disrupters: Discover the benefits of digital technologies disrupting finance.

• Impact: Understand the future skills required and the role you will play.

• Embracing Digital: Learn how to successfully embed digital transformation.

Upon completion of each module you will be awarded a CPD certificate.

Free access is available to all ICAEW students and members. Explore the topics you’re interested in at a time and pace that suits you. Visit icaew.com/fdw for more information and to start your learning journey today. PQ

PQ study advice

The art of the possible We asked Pantelis Fouli about how he cleared the hurdles that getting qualified presented him How did you overcome the challenge set by your most difficult exam – the P6 paper?

Happiness is not something you postpone for the future; it is something you design for the present, so I knew for my last two challenging exams I needed a fresh approach.

For my Advanced Taxation exam (P6) I decided to seek out the prize winner from my college for the previous sitting, asking the college if they could contact her by email about whether she would mind helping me.

I was put in touch with her, and I asked for her ‘tips’ on how to successfully pass this paper.

She ended up sharing everything with me (even her condensed notes) and I used her blueprint to obtain the pass I needed. That is how students need to think, outside the box.

There is no right or wrong way here; we all know that it takes hard work and discipline.

My favourite quote of all time is ‘Discipline equals freedom’. This means that if you put in the time and the hard work today, you will enjoy the fruits of your labour tomorrow.

22

opportunity be the CFO of the group I work for, and it is a huge honour and privilege to serve my CEO and team. Personally, it has given me the credibility to be able to follow my passion of adding value to the lives of others.

I am very passionate about helping ACCA students complete their journey, because this is a journey that you are all undertaking, one of huge investment and not cost.

Pantelis Fouli is a qualified accountant and an ACCA Student Mentor, based in Cyprus

You have your whole life ahead of you to enjoy the benefits of being a qualified accountant.

What did qualifying as ACCA member mean to you? Professionally, it has given me the

What is your advice to new ACCA students and those returning to ACCA after a break?

Perception and perspective. I spoke earlier of investment, if an ACCA student or any professional student for that matter views his or her education as drudgery or as a cost then we have lost the game before we have even started it. If someone in your life talked to you the way you talk to yourself, you would have left them a long time ago.

We must retrain our mind to spotlight what is working rather than what is not.

The rational mind is programmed to search for errors and imperfections. But the nature of the heart is to find what is lovable and expand on that. So replace “poor me”, “never enough” and “why can’t I?” with “blessed me”, “always enough”, and “how can I?” PQ PQ Magazine March 2019

Performance and progress tracking helps ensure your learners on are track for success Advanced tracking helps learners log their progress, combine this with eligibility rules to make content automatically appear at set stages or dates Activity reports on departments/cohorts and individual learners Track who is, and who is not, using the resources Set pre-requisites before access is enabled to URGEKĆ&#x2019;E TGUQWTEGU Enable/disable access to a resource for different cohorts Set date ranges where resources become available

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PQ study tips

Don’t hide failure

Ashim Kumar has a plan to help you bounce back from exam failure ou failed your final ACCA exams. So what? You sat what you hoped were your final ACCA papers but didn’t quite make the ‘magic 50%’.

When you opened your results (for what you had hoped was the last time) and realised that you had not got through, you felt a range of emotions – disappointment, frustration, sadness.

The end was so real that you could taste it. In fact, you spent last night planning your celebratory party. Then the news sinks in, you were in the ‘nearly but not quite’ space; you earned 45 marks. Close, but not close enough.

Later, your mind starts working overtime. Was it that you spent too much time at work? Was it because you were in a difficult personal relationship? Was it your exam technique? What could you have done differently? The list of questions is endless.

Y

To those of you in this position, I say close your eyes, take a deep breath and calm down.

This may be disappointing, but you are not alone, and this is not the end. I am reminded of a quote: “Everything will be alright in the end; if it is not alright, it is not yet the end.” (Apologies, but I can’t source this quote except to say that it was from a movie about a hotel; maybe a reader would be kind enough to help identify it.)

Qualifying as an ACCA is challenging, and so it should be; the ACCA is, in my opinion, the premier professional accounting body in the world. When you qualify you can say to the world that you have met the rigorous requirements of our professional body; not many people make it to the end, and those who do will usually have failed somewhere along the way.

As with everything in life, and to use an old boxing proverb: “‘It doesn’t matter how many

times you are knocked down; the only thing that matters is how many times you get up.”

So what now? In my experience, the reason most students fail with marks in the 40s is due to exam technique.

Their knowledge is fine, it’s just that they were not able to communicate it sufficiently well under exam conditions.

Now we know what to focus on!

Discipline and guidance It might surprise you to learn that this is a relatively straightforward problem to solve. All it requires is a bit of discipline and guidance.

The solution is to practise exam questions under timed conditions, and receive feedback on your performance on a regular basis.

Very quickly you will be able to iron out those small wrinkles in your technique, which will lead to success at the next sitting.

The guidance is vital, because we are not usually aware of our shortcomings. It requires an objective viewpoint from an expert, to understand what we are doing wrong.

The formula is simple: 1. Structure your exam preparation; make sure that you invest effort in this step. It need not be more than an hour or two each time, but it must be regular. Consistency is key. Do not leave everything to the last minute, the earlier you start the better. How about today?

2. Make sure that your revision timetable is realistic. Set aside time for rest and recreation. If it is not realistic, you will not follow it.

3. Be disciplined in your implementation. We are all tempted to put things off and can always find a reason to ‘do it later’. Do not do this! Keep reminding yourself that after the next exam in three months’ time, you will have all the time you need for other activities. Right now your focus must be the exam.

4. Enlist the help of a subject matter expert.

S/he will have seen hundreds, maybe thousands, of scripts in their time. They will, very quickly identify where you can improve and guide you accordingly.

5. Put their advice into practice when attempting your next exam paper and send it for marking and feedback. You will see immediate and tangible improvements very quickly.

6. Repeat steps 3-6.

7. Pass.

8. Celebrate!

I will end this article with a final quote from Confucius: “Our greatest glory is not in never falling, but in rising every time we fall.” PQ • Ashim Kumar is the SBL expert tutor on the FME learn online platform

Free Notes, Lectures, Tests & Tutor support for

ACCA & CIMA Exams Visit OpenTuition.com to benefit 24

PQ Magazine March 2019

careers conference PQ

Adapt and thrive An exciting career in accountancy awaits – but what skills will tomorrow’s accountants need to possess? That was one of the key questions speakers tackled at our ‘Careers in Accountancy: Your career, your future’ conference he world of work is changing and tomorrow’s accountants must understand how to adapt and thrive in this new environment.

That was the message from ACCA’s head of UK, Claire Bennison, speaking at the recent Careers in Accountancy conference, organised jointly by LSBF and PQ magazine.

The ACCA, she said, has identified the drivers for change in its recently published report, ‘Professional accountants – the future: Drivers of change and future skills’. These include increased regulatory requirements; the spread of (disruptive) digital technologies; growing expectations as to the role and responsibilities of the accountant; and globalisation.

Bennison told the 200 wannabe accountants at LSBF that they must “make sure they have the skills needed” to prosper in this new world.

ACCA research had identified the key

T

skills that will be needed. These ‘professional quotients for success’ include, among others: • Intelligence – the ability to acquire and

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Claire Bennison being interviewed at the LSBF/PQ conference

use knowledge: thinking, reasoning and solving problems.

• Creativity – the ability to use existing knowledge in a new situation and generate new ideas.

• Vision – the ability to anticipate future trends accurately by extrapolating existing trends and facts, and filling the gaps by thinking innovatively.

• Digital awareness – being aware of existing and emerging digital technologies, capabilities, practices, strategies and culture.

• Emotional intelligence – the ability to identify your own emotions and those of others, harness and apply them to tasks, and regulate and manage them.

• Technical and ethical competencies (TEQ): The skills and abilities to perform activities consistently to a defined standard while maintaining the highest standards of integrity, independence and scepticism.

Bennison also cited research from the ACCA which showed that 81% of 18,000 young professionals it surveyed want to start their own business at some point.

She said: “Don’t think, ‘I’ll always be an accountant’. An accountancy qualification gives you portability. It will help you build networks and is a great launch pad for a varied career.”

• ‘Professional accountants – the future: Drivers of change and future skills’ can be downloaded via ACCA’s website. PQ

Theeasiest easiestway wayto toget get your your free monthly copy The copy isis to togo goonline onlineatat www.pqmagazine.co.uk, or you can fill in the form below and send www.pqmagazine.com, or you can fill in the form send itit to: to: Magazine, 4th Floor, Central2 House, 142Way, Central Street, London, EC1V PQ,PQUnit 3a, Kingfisher Heights, Bramwell Royal Docks, London E168AR 2GQ Study please tick a box in 1A or 1B 1A Please indicate accountancy body you belong to and tick the box of the next set of exams you are hoping to sit Applied ▫ Knowledge F1-3

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25

PQ the troubleshooter

Solving your

PROBLEMS PQ magazine’s troubleshooter Philip Dunn explains how the balanced scorecard and target costing work (below) Problem: I am a Level 4 student and have heard of the balanced scorecard framework. Can you explain how its approach differs from traditional performance measurement reporting?

Solution: The balanced scorecard is a strategic performance management model. It simply uses information in the form of key performance indicators (KPIs) that effect positive change, so that managers can achieve their strategic organisational objectives.

The balanced scorecard framework was developed by Harvard Business School (R Kaplan and D Norton, 1993). It is a strategic planning device that uses a balanced rather than screwed approach when setting a range of targets. The framework sets KPI’s across four perspectives: • Financial perspective.

• Customer perspective.

• Internal business process perspective.

• Learning and growth perspective.

Financial perspective: The focus

here is satisfying shareholder added value, measures would include percentage return on capital employed and return on shareholders’ funds.

Customer perspective: This aims to measure customers’ views of the organisation by measuring customer satisfaction. This may include percentage of business to existing customers and customer support as a percentage of turnover.

Internal perspective: This perspective is a measure of the firm’s output in terms of technical excellence and consumer needs.

KPIs may include percentage of unit costs to turnover and total quality assurance as a percentage turnover.

Learning and growth perspective: This is often referred to as innovation and learning perspective. This focuses on a continual improvement of existing products and new product development. Measures may include training costs as a percentage of turnover and turnover attributable to new products.

Target costing: an explanation Problem: I am a Level 4 student and have read that some Japanese companies such as Toyota, Honda and Nissan have developed and used target costing. Can you please outline the principles of this technique?

Solution: Target costing is defined as a process of first assessing a target price and then designing a product to meet the price. It is part of a cost management system that ignores traditional accounting method such as full cost pricing and adopts managerial accounting and drives decision making to the market place.

It is described as a ‘top down’ process: • Setting price.

• Setting profit.

• Setting cost.

According to Cooper and 26

Stagmulder, the process comprises three phases: Market level strategy • Target price.

• Target profit.

• Target cost.

Product level • Design product to target cost.

Component level • Design components to meet target cost.

• Secure supplier chain.

Target costing therefore builds upon a design to cost approach, where the focus is a market driven price for a basis of setting target cost. It clearly provides relevant information and aids decision making, whereas the traditional absorption costing models as full cost pricing generate information not necessarily linked to the decision making process. PQ • Dr Philip E Dunn is a freelance author and technical editor for Kaplan and Osborne Books PQ Magazine March 2019

inheritance tax PQ

N

othing in this world is certain but death and taxes…

Famously quoted by Benjamin Franklin in 1789, this statement could not be more spot on when it comes to one of the world’s most hated but arguably fairest of taxes: inheritance tax.

Throughout your ACA journey so far, the birth of the Principles of Tax module presented you with the fundamental rules that underpin the UK tax system. Now, as you continue your journey on to Tax Compliance, you face a tax that explores the inevitable – death. But what does this all really mean for your own personal doomsday – the exam?

This article aims to equip you with various exam techniques and tips to help you get over your fear of this tricky topic; provide a solid structure to answering your exam questions that the examiner will love; and make you realise that death and taxes aren’t so gloomy after all!

A fool-proof approach to IHT questions In the exam you’ll be expected to recreate the IHT proforma in full, or certain stages of it, based on the scenario given.

As we all know, the proforma itself is a bit of beast! But not to worry, it’s as easy as Stage 1, 2, 3…

The first place to start is Stage 1. This is where most of the magic happens, as we have to calculate the ‘chargeable amounts’ – namely, the amounts that are potentially subject to IHT. In approaching this follow these useful steps: 1) Go through each of the transfers in the question one by one, stripping out those that are generally exempt (exam tip: tell the examiner something is exempt to bag an easy half-mark).

2) For those transfers remaining, pop them into your proforma in chronological (date) order.

3) Next, categorise each transfer – are they chargeable lifetime transfers (CLT) or potentially exempt transfers (PET)?

4) Input the transfer values (remember, you will probably have to do some fun workings to calculate these).

5) Finally, deduct any applicable reliefs.

The most common ones are APR/BPR, the marriage exemption and the annual exemption. Exam tip: all of these rates are in your trusty Hardman’s open-book

Staying alive Sucheta Sud explains how you can survive IHT questions in the exam hall

text – if you have a mind blank in the exam, use it!

6) And there you have it – your chargeable amounts. Easy!

Only when Stage 1 is done and dusted do you move on to Stage 2 for CLTs. This is where you are first introduced to the magical world of the nil-rate band (NRB).

Each CLT is entitled to one of these £325k bad boys, but HMRC aren’t going to let you have it that easily – the key rule the examiner is most likely to test here is that you must remember to reduce each NRB by any gross chargeable transfers within seven years of each CLT transfer made. Gotta love anti-avoidance!

Once you’ve nipped that in the bud, pay the lifetime tax at either 20% or 25% (as instructed in the question) and before you know it, you’re all done with Stage 2.

Exam tip: if there aren’t any CLTs in your question (you only have PETs), simply skip Stage 2 and move onto the final stage.

Stage 3 is where things get interesting.

Deadly interesting. By this point, you’ve already racked up loads of marks in the

first two stages. Now you’ve arrived at death’s door for the final curtain call.

Here’s a few tips to help you finish it off once and for all: 1) First things first: remember the golden ‘seven year’ rule – death tax is only chargeable on transfers that occur within seven years of death, and on the death estate itself. So you can now ignore any other transfers before that time.

2) Next, deduct the various reliefs where applicable (exam tip: watch out for the residential nil rate band – big hint in the exam is that the individual left their home to their kid/grandkid).

3) Pay the dreaded death tax at 40% (exam tip: remember, it could be lower at 36% if enough of the death estate is left to charity).

And that’s it! Not as bad as you thought, right? So when death inevitably comes knocking on your exam door you’ll be armed and ready with all these tax tips and reliefs to show who’s boss.

Invincible! PQ • Sucheta Sud is a tutor at Kaplan Financial

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

PQ Magazine March 2019

27

PQ artificial intelligence

How do you audit a robot?

AI is here to stay: what is vital is how organisations manage and control their â&#x20AC;&#x2DC;robotsâ&#x20AC;&#x2122;, says Henry Irving

W

hen we talk about â&#x20AC;&#x2DC;robotsâ&#x20AC;&#x2122; people might think of humanoid, C3PO-like figures. But the robots taking over many aspects of modern workplaces are better explained as robotic process automation (RPA) â&#x20AC;&#x201C; software that can be programmed to do basic, repetitive tasks. This has been part of many organisations for decades, but increasing levels of adoption, combined with the development of artificial intelligence, mean it is now one of the key issues for many businesses to consider. One aspect has hitherto been neglected: how do you audit robots?

The benefits of automation are evident. It can reduce cost, help eliminate errors and increase profitability. As wasteful manual processes are replaced by automated ones, margins can increase. Robots can execute processes that otherwise take up thousands of staff hours â&#x20AC;&#x201C; freeing up skilled employees to work on more complex, added-value work â&#x20AC;&#x201C; but are also scalable, meaning it is easier to cope with increased demand. For example,

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28

they can be deployed 24/7 if necessary. Moreover, automation offers a secure alternative to outsourcing or offshoring as it does not create potential supply chain problems and is more easily subject to internal controls. But there are inherent risks to increasing automation, and auditors need to develop ways to provide assurance they are being managed to an appropriate level.

One issue is how many robots an organisation can realistically manage. Multiple departments creating and maintaining their own robots, with varying standards of risk and control, could mean a fragmented â&#x20AC;&#x201C; and potentially vulnerable â&#x20AC;&#x201C; business, and IT departments cannot be responsible for them all. Strong internal governance frameworks, perhaps with centralised oversight, would be key to ensuring this does not become a business risk.

Another is how to decide which processes are suitable for automation.

Internal auditors need to consider areas where levels of subjectivity, complexity or variability mean it is better to have people in charge. Even the best AI cannot yet â&#x20AC;&#x2DC;thinkâ&#x20AC;&#x2122; like humans, mixing instinct and intuition with logic. They canâ&#x20AC;&#x2122;t make â&#x20AC;&#x2DC;common senseâ&#x20AC;&#x2122; checks, and do not assess irregularities or anomalies in the same way. Nor can they spot where something operationally useful might be socially or ethically disastrous.

Finally, there is the issue of what happens when things go wrong.

Robots strictly adhere to the â&#x20AC;&#x2DC;garbage in, garbage outâ&#x20AC;&#x2122; principle. They operate as instructed, but if the information input is flawed robots can behave in surprising and unwelcome ways. This is amplified if there are not enough humans to operate processes manually when they go down.

Automation acts as a form of leverage, enabling one person to oversee what would otherwise be the work of several, but if things go awry this can quickly become a business continuity issue. And afterwards, robots â&#x20AC;&#x201C; unlike humans â&#x20AC;&#x201C; cannot be interviewed retrospectively as to why they did what they did. All of this means it is it vital to have data governance and technical controls to ensure data integrity and security, and also that there is a â&#x20AC;&#x2DC;kill switchâ&#x20AC;&#x2122;, regularly tested, to immediately halt things in the event of a problem.

Underlying all of this is how auditors can see how the robot is operating â&#x20AC;&#x201C; in particular if it is learning. Data analysis, modelling and IT technical skills are becoming crucial for auditors to do this effectively. As RPA is increasingly implemented auditing around the computer is becoming less and less viable.

Advances in robotics can drive businesses and boost productivity â&#x20AC;&#x201C; a key worry for UK plc at the moment â&#x20AC;&#x201C; but also raise challenges for auditors. RPA is in use right now. If auditors are to remain relevant they have work to do to keep up. PQ â&#x20AC;˘ Henry Irving is head of ICAEWâ&#x20AC;&#x2122;s Audit Faculty PQ Magazine March 2019

careers PQ

One in five accountants ready to quit Some 19% of accountants think about quitting their job every two to three weeks, claims new research from CABA. The charity, which supports the wellbeing of chartered accountants, surveyed 251 ICAEW members asking them about how they felt about their current workplace. The survey discovered that 8% of ACAs consider quitting every day, with another 14% considering it one to four times a week. Those most likely to consider quitting were aged 35–44, with over a third (34%) of that age group looking to leave their current role.

Accountancy was the highest of all sectors featured in the survey, with manufacturing next. The overall average was 15%, clearly showing how accountants are far unhappier at work than most.

There were a few explanations as to why accountants are not as happy at work as others. Over half (54%) of those surveyed claimed to work late in the office on a weekly basis, with 22% doing it every day. On top of this, 47% admitted to taking work home with them, with a quarter of accountants doing this daily. Over a third (35%) claimed to have worked on days off, including annual leave and bank holidays, 16% higher than the national average.

The survey also discovered that 21% of chartered accountants ended up missing at least one personal activity a week, with the 18–34 year old accountants most at risk of this.

They were also the most likely to cry, with 26% admitting to crying at work.

Kelly Feehan, Services Director at CABA, said: “Chartered accountancy is a competitive sector, with firms striving to attract and keep the best talent. The fact that so many employees are feeling discontent in their roles should send a shockwave through the profession… The fact that people are crying, checking emails when sick and regularly thinking about quitting shows something has got to change.”

Feehan concluded: “In today’s always-on world there’s no separation between work and home – we can work wherever, whenever, which blurs the boundaries between our personal and professional lives.

“If employers want a happy, healthy workforce they need to take notice of these findings and put measures in place to help staff regain control of their equilibrium, as this will lead to a more engaged, productive team.”

PQ Magazine March 2019

Life at Mazars Ellie Garratty, 18, is a corporate assistant based in London. She has worked there for a year. Ellie is studying for AAT Level 3. She recently spoke to 200 potential young accountants at the LSBF/PQ magazine careers conference What time does your alarm clock go off on a work day?

5am so I can fit in a gym workout!

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

Write my to-do list for the day.

What’s on your desk? Just a phone, laptop, water and a notepad (we are an agile office with no dedicated desks).

What’s the best thing about where you work? Many people are studying AAT/ACCA in the office, so there is always someone to discuss the courses with.

Where’s your favourite place to go for lunch? Nando’s.

What (or who) can you see when you sit at your desk?

Lots of houses and the local park.

What are your favourite websites and why? Skyscanner for comparing and booking

flights – I love to travel and it saves time finding the best deals.

Which websites do you use for work? Mainly Xero, as many clients are moving onto this for Making Tax Digital.

How many hours a week do you spend in meetings? It varies, but we have regular team meetings. The smaller ones could be 30 minutes long and the larger team ones up to three hours (these are quarterly).

What time do you leave the office? Usually just after 5pm, occasionally staying a little later to finish tasks or study.

How do you relax? I go to yoga classes at the weekend – great preparation for the week ahead.

What’s your favourite tipple?

Disaronno and cranberry juice.

What is your favourite TV

show? An American talk show called The Real. In the UK it would have to be EastEnders.

Summer or winter? Summer – that’s when my birthday is!

Pub or club? Club.

Who is your hero? Rosa Parks. Her determination led to great change.

If you had a time machine, where would you go?

Montgomery 1955, to have a conversation with Rosa Parks.

There was recently an episode of Doctor Who on this!

If you hadn’t chosen accountancy, where might you be right now? Doing a maths degree to become a teacher.

misspelt 62 times. Interestingly, women are more likely to doublecheck their spelling, with 8% of their CVs showing no mistakes at all, compared with 6% of men’s CVs.

5.7% to £37,200 a year. Those living in the East Midlands region also saw the largest average increase in salaries in the UK, at 1.8%.

In brief Use your spell check A whopping 94% of CVs contain spelling errors, according to research from Adzuna. The job search website spell-checked some 20,000 CVs and discovered that only 1,134 (6%) were error free. More shocking is the discovery that 60% of CVs were deemed ‘error-riddled’, containing five or more errors.

The majority of mistakes were misplaced apostrophes, with over 1,000 CV writers wrongly adding them. The researchers also found that ‘experience’ is the most misspelt word in CVs, being

Salaries on the rise Advertised accountancy salaries rose in 2018, but only by 1.4%, well below the rate of inflation. New data from Reed Accountancy shows that if you were after a big increase then you should look at accounts receivable manager roles. The average salary here increased by

All work and no play Workers are so busy with work they are sacrificing seven days holiday every year, claims HR consultants Lee Hecht Harrison Penna. The study found part-timers were even worse off – giving up almost 10 days a year.

The worry is that the failure to take holidays will put workers at risk of exhaustion.

The PQ Book Club: books you should read Positive Thinking Pocketbook by Gill Hasson (Capstone, £8.99) On the very first page of this book the author outlines her premise: that positive thinking really can change your life. She then sets about proving it in this great little guide to improving your outlook on life. It’s packed with exercises, activities and tips on how to gain – and maintain – a positive mindset.

Divided into four sections, this book has ‘bite-sized’ sections that are informative, thought-provoking and easy to digest. Each section consists of

just two pages; the left-hand page tackles a specific aspect of positive thinking, with the righthand page devoted to practical advice on how to achieve this.

For example, the section on using more positive language explains why you should be wary of the words ‘never’, ‘every’ and ‘always’, as these are often misused – as in the sentence “I always forget things”. The use of the word ‘always’ makes this sentence a falsehood – it accentuates the negative.

Positive thinking, says Hasson, is a skill that everyone

can learn. You need to identify when you are thinking negatively and why; from there you can deal with these issues, become more confident and succeed more – even in the most challenging of situations.

It also outlines how you can help develop positive thinking in the people around you in both your work and personal life.

PQ rating 5/5 A cracker that’s bound to have a positive effect.

29

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

THE TAX LIST Accountant Denise Coates, Sir James Dyson, David Beckham and the Duke of Westminster all made it on to The Sunday Times’ recently published ‘Tax List 2019’.

They are among the 50 individuals and families who together paid nigh on £2bn in tax for the year.

Dyson and his family’s latest tax bill, for instance, was estimated at £128m (third highest). Meanwhile, Beckham and his wife Victoria just make the list at 49th with a tax bill of £12.7m. Poor old Ed Sheeran didn’t make the list as his tax bill for last year is thought to have been £11.7m.

MAKING A SPLASH PQ magazine recently came across a great little British film on a well-known streaming service – ‘Swimming with Men’. It stars Rob Brydon as Eric, a slightly depressed and disenchanted accountant who joins a swimming club with a difference – we are talking men’s synchronised swimming here. So what happens at swim club certainly stays at swim club! While the numbers might fend off the chaos – and Eric is a whizz with the numbers – he’s a man of principle. Really worth a watch.

SIDESTEPPING THE SLAMMER Top footballer Cristiano Ronaldo has ‘accepted’ a £16.6m fine over tax evasion. The deal, agreed in advance, includes a 23-month jail sentience. But in Spain convicts do not usually serve any sentence for non-violent crime under two years! The case centred on image rights and his court appearance lasted just a few minutes as the deal had already been agreed. He was accused of tax avoidance between 2010 and 2014 when playing for Real Madrid. His former team mate Xabi Alonso also recently appeared in court over tax avoidance offences amounting to £1.8m.

Maintaining his innocence and not making a deal means he faces up to five years of jail time!

BUBBLE WRAP TV STREAMING GIANT CALMS NERVES ‘UNDER EXAMINATION’

University students are being offered bubble wrap to help calm their nerves before exams. The bubble wrap are being given away in stress-relief packs being handed out to undergrads at Bristol University. But there is a problem! Some students are now worried about what happens to the bubble wrap once they have popped away their stress. It’s the environment, you see. Perhaps Bristol needs to hand out adult colouring books (Teesside University) or offer dog-walking (University of East Anglia) instead.

’ WEV E

Netflix, the US digital streaming outfit, has admitted its UK accounts are ‘under examination’. The company has nine million subscribers in the UK who generate over £71m a month, which totals around £863m a year. Its British division, however, books revenues of €26.9m and profits of €1.27m.

Netflix’s main European office is Amsterdam which, like Dublin, has a stack of US technology companies listed there because of its ‘light-touch’. Tax experts believe HMRC will be looking at Netflix’s transfer pricing deal between the UK and the Dutch parent. Netflix employs just 14 people in the UK, according to recent accounts.

NOW YOU SEE IT, NOW YOU DON’T Google moved some €19.9bn to a Bermuda subsidiary in 2017, as part of its contentious ‘double Irish Dutch sandwich’ tax avoidance moves. That figure was up €4bn on the previous year and means in effect it paid 6% corporation tax on its foreign earnings, compared with the 35% headline rate in the US at the time. Google uses a system whereby it moves profits between two companies registered in Dublin, before sending it to the Netherlands and then on to Bermuda. Ireland has promised to stop this ‘arrangement’ by 2020! In its defence Google has said it paid most if its corporate income tax in its home country, and claims for the past 10 years it has had an effective global tax rate of 26%.

WHO NEEDS DRUGS? Decoder, the popular iPad game, can improve attention spans to the same extent as the study drug Ritalin, a study has shown. The game is being released via the Peak brain training app, and was designed by researchers at Cambridge University to improve attention and concentration. In the game users play the part of an intelligence officer tackling criminal gangs.

GOT THE L OT

Playing mind games Want to test your powers of logic, mental ability and word power? Well, you need to get your hands on The Times’ Mind Games books. We have three sets of these brain-teasing texts to give away this month. Both have over 500 braincrunching puzzles and five popular mind games. On top of the normal brain trainers there are KenKens and Codewords to master!

Send us your name and postal address to be entered for this lucky dip. There will be three winners for this giveaway. Head up your email ‘Mindgames’ and send it to graham@pqaccountant.com

The big Sleep Whether you sleep like a baby or are up and about three times a night, ‘Sleep’ will help explain why your body clock is so important. It delves into the four stages of sleep, from shallow to deep. You really do need to learn how to nourish your mind.

To be in with a chance of winning one of our three giveaways here send your name and address to graham@pqaccountant.com. Head up your email ‘Sleep’.

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 8 March. The main draw will take place on Monday 11 March 2019.

TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM 30

PQ Magazine March 2019

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