PQ magazine, May 2023

ALL-NEW ACCA STUDY HUB LAUNCHES THIS SUMMER

ACCA is launching a new digital platform for all its students from 5 July – the ACCA Study Hub. It has been designed to provide even more support for students and tutors, and will give free access to ACCA approved study materials.

That means from July every ACCA PQ will be able to download study chapters, flashcards, quizzes, and practice questions, all in one place. ACCA says this “streamlines revision, helping students to increase their understanding and be perfectly prepared for exams”.

In truth, the ACCA Study Hub has been up and running for some time. It was piloted in Africa from December 2020, where Strategic Professional students were able to access digital study material, with enhanced e-book functionality. The pilot was then expanded in December 2021 to bring in new ACCA

Continued on page 4

GETTING

AAT ASSESSMENTS RIGHT NOW TOP PRIORITY

Sorting out the AAT Q2022 assessment issues is now CEO Sarah Beale’s number-one priority. In an exclusive interview with PQ magazine, she admitted that it has taken time to address the technical issues, but promised the AAT is now getting there.

New fixes took place on 27 March and more ‘happened’ in the week beginning 3 April. That will leave an outstanding problem though, around the MATS (Management Accounting Techniques) assessment at Level 3. AAT are working hard to get this right, but Beale says it needs to be done right rather than quickly!

Some 45,000 Q2022 assessment have now taken place and 3% of sitters have experienced technical

problems – that’s 1,350 students. Beale said AAT needs to do better, and it will.

She stressed that AAT is trying to be as open and transparent as they can with students and training providers. Those affected will now receive a free assessment, regardless of their mark. That means if they failed and believe

they could have done better they can sit again. Students have also been given a 2% ‘uplift’ in their marks, when an incident report is filed. Students can of course still appeal the result.

PQ magazine was told that, as a gesture of goodwill, all students directly affected will receive a £50 payment. Beale said she

was a student of AAT herself and understands the pressures and stresses of being a student trying to ‘get qualified’. She explained: “We want to build back trust in the AAT brand and the voucher is a small way of acknowledging the work our students are putting in.”

Beale also said the AAT will be working harder to listen to students, rather than just talk to them. She stressed: “Students are a part of our community the minute they sign up with us and we need to learn from their experiences.”

Finally, she wanted to thank all the training providers for their understanding and said AAT appreciated all the support they have given to students through this period of disruption.

IN THIS ISSUE

A note from the Editor

Well, the UK the weather is never predicable, and nor it seems is the accountancy profession!

This month sees the launch of ACCA’s Student Hub, which in truth caught many people off-guard. It looks like it is going to be a fantastic resource – and its free! Add that to the new personalised support tool – My Exam Performance – and it could be said that ACCA is starting to embrace technology to deliver a much better service to its PQs. It really seems to have come out of the pandemic with a new vigour and a stack of great ideas. Now let’s see if it helps push pass rates up!

27 ACCA FM/PM

Doing the WACC calculation using a performance management technique

28 Accountex 2023

This is the one trade show you really must go to – and here’s why

29 Contract revenue

What you need to know about significant financing components

30 Opinion

Is it time to rethink accountancy?

AAT has also promised us they are going to get on top of the assessment problems with Q2022. We will be keeping a watching brief on this one, too.

It’s PQ magazine awards time, and you can find the shortlists on page 17. Well done everyone who made it, we will see you on 24 April.

Finally, we have another seminar coming up with Queen Mary University of London, on Wednesday 7 June. This time we are looking at ‘The Future is Net Zero – can accountants help to save the planet?’ You can sign up on Eventbrite at https://tinyurl.com/ n6mkesf4

Don’t forget Accountex, too, on 10-11 May – PQ magazine will be going along for a bit of networking.

Graham Hambly, Editor and Publisher, PQ magazine

4 CIMA case studies

Why you need to know all about tractors, package holidays and logistics

5 ICAEW CEO to retire Michael Izza calls time on an illustrious career

6 Skills shortages

Manchester and Nottingham hit worst by talent crunch

8 ACCA scraps degree Applied Accounting BSc to be withdrawn from Oxford Brookes uni

9 ACCA sustainability report Why the planet needs green accountants

10 Finance Bill makes 24 New Bill means two dozen new taxes have been introduced this century

12 Tech news

Students cheating on essays with the help of AI Features, etc

14 My AAT woes; why Manchester beats London; and are there really skills shortages?

17 PQ Awards 2023 The shortlist in full – so who made it to the big night out?

18 A question for Tom Solid advice from Tom on how to deal with exam failure

19 ACCA Study Hub Supercharge you exam success

p22 News

20 Law Contract law explained –stuff you need to know if you’re sitting the AAT Level 2 Business Environment Synoptic assessment

22 PQ Book Club Business gets the manga makeover

23 ACCA ATX exam How to land those professional skills marks

24 AAT exams The lowdown on the AAT Professional Synoptic exam

31 PQ seminar

A report on our latest tax seminar, in association with Queen Mary University

32 CIMA case studies

We run the rule over the latest set of pre-seens

34 IFA spotlight

Why fraud awareness is a must

37 Ethics

Our puzzle will tell you how ethical you really are

39 Careers

Where are the corporate Net Zero plans? Plus more top advice on your career from Hays Karen Young and our book review

40 Fun

A look at the lighter side of life –and accountancy

The columnists

Lisa Nelson Why it’s vital that you pay full

ALL-NEW ACCA STUDY HUB LAUNCHES THIS SUMMER

Continued from page 1

markets – the Caribbean, Vietnam, Australia and New Zealand. Finally, the Ukraine and Afghanistan were added to the pilot in January 2023.

ACCA’s Council has now given the Study Hub the green light and the official launch takes place this summer. Any ACCA student studying anywhere in the world will have free access to the hub as part of their normal subscription from July.

When PQ magazine spoke to ACCA some 30,000 students had accessed the pilot along with

100 learning providers. ACCA is expecting the hub to have a positive impact on exam pass rates too, with September 2023’s sitting the first big test. The trials have already shown an increase in student pass rates where the hub is available, and ACCA is hoping the trend continues.

Emma Kerr, ACCA head of content and publications, told PQ magazine in an exclusive interview that the Study Hub is not a standalone product and should be used in conjunction with all the other ACCA resources, including the Practice Platform.

Who made the shortlist?

Proud on London’s Embankment is rolling out the red carpet for the 20th PQ magazine awards on 24 April. But who made the shortlist, we hear

on page 17

shout!

The shortlist has some familiar, and not so familiar, faces on it this year.

One of the most keenly contested categories was our newly introduced ‘Podcast of the Year’. In this one we have Azets’ Bang the

CIMA on the case

CIMA case study sitters this May will know everything there is to know about tractors, package holidays and supply chain logistics following the release of the new CIMA pre-seens.

But what is the best way of passing these exams? Students say that sitting marked mocks exams can really help. You also

now been reliably informed that some delegates staged a ‘walk-out’ at one event when women delegates were told to sit at the back of the hall.

Apparently, during a main hall session an Indian minister was in attendance. Female delegates were asked to move to the back, and our witness said the Dutch contingent got up and left en masse, followed by many other European delegates. All this was broadcast on big screens outside the hall.

She stressed the Study Hub is also not an immersive experience – there are no live classes, and she said you still need to sign up to an approved learning provider if you want to ensure success.

However, she feels the Study Hub will give students a strong base to start their studies.

A big question now surrounds the approved publishers – BPP and Kaplan. Kerr explained ACCA is in discussion with them, although PQ magazine is not sure how it will all work going forward. Both paid large sums to be approved.

Drum up against Tom Clendon’s SBR Podcast, the Price of Football podcast from Kieran Maguire, Kaplan’s Learn Better podcast and The Bookkeepers Podcast. The Student Body of the Year category is being contested by students from Newcastle, Leeds, Lancaster, Reading and London.

We have also found some fantastic personalities to contest Accountancy Personality of the Year.

A special night is planned and we are hoping to showcase ‘accountants with talent’, too.

have to go through all the past papers and compare them with the ideal answer. Those who have just sat and passed OCS said you must sit the mocks in the time that is allowed in the exams – to make it real.

In the exam it is important to plan your answer and work out timings on each sub-task. Another great piece of advice was “not to waffle”.

Check out our take on the preseens on page32

Johnston Carmichael has resigned as the Scottish National Party’s auditor.

The Scottish-based accountancy firm has worked with the national party for over 10 years, and said the decision was taken “after a review of its client’s portfolio”. A spokesperson for the firms said: “As a regulated organisation we adhere to our obligations on client confidentiality and do not discuss client business.”

ICAEW CEO announces retirement

ICAEW has announced that Michael Izza is to retire as its chief executive by the end of 2023.

Izza trained as a chartered accountant with Coopers & Lybrand and qualified in 1986. He joined the Institute in 2002 as executive director of finance and operations, becoming CEO two years later.

During his time leading ICAEW Izza has overseen significant expansion of its global membership. He has also been a leading advocate for the reform of

audit and corporate governance.

He said: “I trained as a chartered accountant almost

40 years ago, and it has been an honour to be Chief Executive of ICAEW and to represent our profession across the world.

“As Chief Executive I have taken every opportunity to champion sustainability, and I believe that chartered accountants have a vital role in helping society and the economy achieve net zero. Our 2030 strategy positions ICAEW well for the future and I am confident that the best is yet to come.”

Time to save the planet?

We have another great new faceto-face seminar lined up for you in the Queen Mary University seminar series, on Wednesday 7 June.

This time the theme is ‘The Future of Net Zero – can accountants help to save the planet?’. Well, can you?

The series has been so good it is up for a PQ magazine award – for ‘Innovation in Accountancy’. The awards take place on 24 April.

It is a totally free event and you can sign up at https://tinyurl.com/3d3ts5eu

Our top columnist, David Rothera from Net Zero Now, will be on the panel and we will be announcing more top speakers soon.

Remember, as Professor Ian Thomson said on a recent PQ magazine front cover, accountants are currently incentivising climate change, and that has to stop.

You can now check out the Future of Tax seminar, the first in the series on the PQ magazine YouTube channel at https://tinyurl. com/2ptwd5sh

ACCA new member ceremonies are back with a bang: Katerina Evangelou recently attended one and she said: “The ceremony was a wonderful opportunity to celebrate our accomplishment and connect with other ACCA members. It was inspiring to hear the stories of those who have achieved so much in their careers and to learn from their experiences.”

She told her fellow accountants that their journey had only just begun and to stay curious. She also said that ACCA gives you ‘opportunity’.

Unlock your career potential

Set yourself apart by becoming an Intermediate Financial Accountant

Graduates, recently qualified and part qualified accountants our new grade of membership provides the support, guidance and recognition you need to set yourself apart in a competitive job market.

You’ll receive:

• Designatory letters IFA AIPA

• Access to a variety of technical resources

• Relevant CPD webinars and networking meetings

• Access to Financial Accountant, our member magazine

• A weekly enewsletter covering accounting, finance and business

• Exclusive offers from our carefully chosen strategic partners

• Early bird discounts on annual conference tickets

ROBERT BRUCE

Where’s the important legislation?

Manchester and Nottingham worst-hit by the talent crunch

Accountancy firms in Manchester and Nottingham are bearing the brunt of the talent crisis, the Bright Financial Professionals Index (FPI) has revealed.

There are, on average, just two potential applicants for every accounting role in each of these cities – so firms that are based there have the smallest talent pool from which to recruit.

According to the index, Manchester had the secondhighest number of accountancy vacancies in the UK and Ireland at 2,884, after London, which had 5,810 vacancies. While there were more than 57,200 searches for

opportunities in the capital per month, comparably 5,840 people wanted to find equivalent roles in Manchester.

Just over 1,400 accountancy roles were advertised in Nottingham – the sixth highest on the list – yet the number of searches for the city was a relatively

modest 3,227 per month.

Liverpool, Leeds, Brighton and Sheffield all ranked lowest after Manchester and Nottingham, with an average of three job hunters per role – less than half the national average of seven.

Cities like Carlisle (14 applicants), Norwich and Plymouth (13 applicants each), find themselves with more applicants per role. This is, however, still low when compared with available positions and leaves hiring managers with only a small pool of candidates to hire from.

To find out more about Bright visit https://brightsg.com

ence for ages. Yet the legislation is delayed and delayed. There are no positive headlines, in fact no headlines at all, to be gained from corporate governance, audit effectiveness or business behaviours. So it gets left on the shelf at the back of the Government’s cupboard and a glance at the latest three-year plan from the FRC shows you the damage. It is still doing the necessary work, it produced a draft consultation on minimum standards for audit committees, for example.

But the frustration at having to shove its three-year-plan forward by a year once a year because of government inaction must be driving them mad. In Germany, the relevant regulator has just banned EY from taking on any new business for two years over the astonishing Wirecard scandal. We are living in a period when all the misbehaviours during the slack pandemic period need to be dealt with.

Oh well, leave it for another year just doesn’t cut it.

Hardest ACCA exam

How hard were the March exams? Well, check out the Open Tuition Instant Poll table. When looking at it remember green is good (OK) and red bad (disaster).

A quick look shows the

problem papers this time around were MA, FR, SBR, AAA and APM.

The ‘better’ papers were LW, TX, AA and SBL. Students positively loved the SBL exam in

March although one student told PQ magazine: “I have a strange feeling that this was too easy and I wrote too little.”

ACCA students should also note that thinking an exam is easy often has no bearing of the exam pass rates, as 17 April has shown.

Narrow-scope amendments to IFRS 9

The International Accounting Standards Board is proposing narrow-scope amendments to the classification and measurement requirements for financial instruments

IFRS 9 specifies how a company should classify and measure financial assets and financial liabilities. The Accounting Standard became effective in January 2018, introducing a new credit impairment model in light of the global financial crisis, and combining classification and

measurement requirements, impairment and hedge accounting to replace and improve on IAS 39 Financial Instruments: Recognition and Measurement.

IASB chair Andreas Barckow (pictured) said: “The recent

post-implementation review of the requirements relating to classification and measurement in IFRS 9 indicated the standard is performing as intended, whilst also addressing some specific areas for enhancement. This exposure draft sets out our proposals in response to this feedback.”

Check out the Snapshot of the proposals at: Snapshot of Exposure Draft: Amendments to the Classification and Measurement of Financial Instruments (ifrs.org)

You can find them on stand SU4.

PREM SIKKA Time to change the CGT regime

Prime Minister Rishi Sunak, the richest person in Parliament, has released a summary of his taxes. This was intended to soothe public concerns about wealthy elites paying their taxes. However, the release has also raised questions about unfairness of the UK tax system.

For the three years to 2021/22 Sunak had taxable capital gains of £3,760,588. On this he paid £744,797 in capital gains tax (CGT), an effective tax rate of around 20%.

This will seem odd to the average person whose pay is taxed at rates of 20%–45%. The reasons for Sunak’s low CGT is that gains from the sale of second homes, stocks and shares, artworks, antiques and speculation are taxed at lower rates. Since 2010, CGT rates have varied and currently the rate is 10%–28%. In addition, recipients of capital gains use the National Health Service and social care, but do not pay any national insurance contributions (NIC) on their gains.

There are no logical reasons for taxing return from investment of human capital (e.g. wages) at a higher rate than return on financial capital. Both give identical purchasing power. In 1988, both were taxed at the same rates. Since then governments have bowed to the business lobby.

By taxing capital gains at the same rates as earned income and charging NIC on the same, the government could raise additional annual tax revenues of £25bn. Imagine what that could do for public services.

Oxford Brookes closes ACCA degree

ACCA has announced that the BSc (Hons) in Applied Accounting from Oxford Brookes University is closing in 2026. However, students currently working towards the BSc still have time to complete the programme. Students will need to complete the following by May 2026:

• All Applied Knowledge and Applied Skills exams, including passing Financial Reporting (FR), Audit and Assurance (AA) and Financial Management (FM) exams.

• The ACCA Ethics and Professional Skills module.

• Submission of OBU Research and Analysis Project (RAP). Full details of the final completion deadlines, including final opportunities to submit your

Research and Analysis Project, are:

• May 2026: Final opportunity to register and submit the RAP. Also the final opportunity for RAP resubmission for RAPs submitted prior to May 2026.

• November 2026: Any individual who fail the RAP at the May 2026 submission will have one opportunity for a resubmission in November 2026.

• December 2026: Closure of the BSc programme; anyone registered on the programme

Happy in your work?

How happy are you being an accountant? Well, Reboot Online surveyed thousands of professionals to discover accountants aren’t number one in the happiness charts!

Using an ‘Overall Job Happiness’ index score per industry accountancy came in at number

six, on 73.35. That was way behind the 91.93 scored by those working in science and pharmaceuticals

FRC issues FRED 83

reform – Pillar Two model rules, which proposes to introduce a temporary exception to the accounting for deferred taxes arising from the implementation of the OECD’s Pillar Two model rules, alongside targeted disclosure requirements.

who has yet to meet the assessment criteria will no longer be able to achieve the BSc.

ACCA is reminding students it will still offer two other opportunities to obtain a Masters’ degree which are available globally: Once you’re an affiliate, you could consider the University of London MSc in Professional Accountancy

Once you’re a member it offers an Oxford Brookes Global MBA

– who were by far the happiest workers. Even those who worked in advertising and PR were happier than accountants (76.66).

The only solace you might be able to take away from the survey is the fact that the legal profession is unhappier. Those working in law scored 69.51 on the index. You may have to be nicer to recruitment consultants, too. They scored just 37.14 on Reboot Online’s list.

groups pay a minimum amount of income tax.

FRED 83 is based on similar proposals issued by the IASB To make similar accounting relief and disclosure requirements available in the FRC’s financial reporting standards to a consistent timeframe the FRC is consulting now, rather than waiting for the IASB’s final amendments.

The

The OECD’s Pillar Two model rules introduce a global system of interlocking top-up taxes that aim to ensure that large multinational

To support the FRC’s intention to finalise any amendments in summer 2023, comments on FRED 83 are requested by 24 May 2023.

UK needs to move quickly on green agenda

The updated Green Finance Strategy brings welcome clarity on the Government’s intentions on the UK Green Taxonomy and the mandating of transition plan disclosures, according to PwC’s sustainability partner, David Crocker. He said: “These measures have the potential to drive better data availability for financial market participants and help channel capital to support the transition to a low carbon economy.”

However, he is worried that the announcement suggests that the timetable for embedding the ISSB standards into UK

regulation will be ‘protracted’. Crocker believes it is vital that the UK moves quickly in driving progress on these initiatives, both to support net zero goals and to maintain the UK’s position as a leading hub for green finance.

Attempts to save energy failed!

New research from KPMG in the UK, as part of its Consumer Pulse survey, shows that nine out of 10 bill payers made changes to reduce energy use between October 2022 and February 2023. However, despite the attempts to cut back, over two-thirds (69%) said that their bills were higher than expected over that period, and for a third (34%) they were significantly so.

While almost all respondents said they made

some attempts to reduce the energy they used, over half (56%) of billpayers said they also made upgrades to their homes, and the same amount (56%) purchased energy efficient gadgets to keep energy costs down this winter.

EY gets German ban

The German audit watchdog has banned EY from taking on new audit clients for two years over failures in its work on Wirecard. Apas (the watchdog) also fined EY €500,000. Apas said it “considered the violations of professional duties during the audits of Wirecard and Wirecard Bank from 2016 to 2018 as proven”.

EY Germany said it would examine the decision ‘carefully’ but had not yet received the detailed legal conclusion.

The FRC has issued FRED 83 Draft amendments to FRS 102

Financial Reporting Standard applicable in the UK and Republic of Ireland – International tax

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

We need green accountants

The accountancy profession must help drive the migration to sustainable economies and businesses by becoming experts in green finance, says a new report from ACCA, called ‘Green finance skills: the guide’.

At a time when access to cheaper capital is more vital than ever to an organisation’s survival, access to green finance can be a lifeline to businesses. However, recent research by ACCA and the Institute

of Management Accountants (IMA) reveals that business are unsure about climate finance opportunities and climate risk management. Some 59% of the respondents to the Global Economic Conditions Survey Q2 2022 said they are not considering using green finance products – an opportunity that must be addressed.

Report author Emmeline Skelton said the profession needs upskilling, especially in volatile times, where

access to capital including green finance is critical for an organisations long-term survival.

Sustainability is already firmly integrated within the ACCA core qualification as one of the seven capabilities it believes all professional accountants need. All ACCA students cover topics

Start your AAT’s journey at the right level

The new AAT Q2022 syllabus is proving more challenging for many students than the outgoing AQ2016 syllabus, according to First Intuition’s Gareth John.

He said that much of the duplication of content and assessment has been removed, meaning that students now need to have a strong knowledge

and understanding of fundamentals in order to succeed as the move on through the levels.

“It's more important than ever that students start at the right level to ensure they succeed,” John stressed.

For example, he pointed out that the new level

3 FAPS (Financial Accounting: Preparing Financial Statements) paper

relies on strong familiarity of double entry bookkeeping principles covered at level 2. Students starting FAPS without some previous experience of debits, credits, TBs, suspense accounts and journals are finding it hard.

John felt students need to avail themselves of First Intuition’s free AAT level checker, which is a useful diagnostic to help ensure students can make a fully informed decision about the best level for them to start at.

such as the Integrated Reporting framework, social and environmental audits, environmental management accounting, the measurement of environmental and social performance, and the impact of sustainability issues on strategy formulation, business performance and financial decisions.

The full report can be accessed at www.accaglobal.com/ greenfinanceskills

Press-up challenge complete

Well, he did it! Accountant James Cope has completed his RNLI press-up challenge. Although day 1,000 was on 16 December, and that’s when he hung up his proverbial press-up gloves, donations kept coming in and he has now achieved his fundraising target of £10,000. With gift aid he raised £11,644.96 in total, completing over 500,500 press-ups.

ANNA KATE PHELAN

Social media and the free speech debate

New Finance Bill means 24 new taxes

The new Finance Bill introduces three new taxes, taking the total number of taxes introduced this century to 24. Apart from two oneoff levies, and the Health and Social Care Levy (which was repealed before it came into effect, and is not included in the total above), none of these or any other taxes have been abolished over this period.

Two of the three new taxes in the new Finance Bill are to implement the G20-OECD Pillar 2 framework in the UK, putting in place a global minimum rate of corporation tax:

• A multinational top-up tax, which will require large UK-headquartered multinational

groups to pay additional tax where their operations in a foreign jurisdiction have an effective tax rate of less than 15%.

• A supplementary domestic top-up tax which will require large groups, including those operating exclusively in the UK,

to pay a top-up tax where their UK operations have an effective tax rate of less than 15%.

At 478 pages, the Bill is the longest Finance Bill since 2017. The lengthiest measures in the Bill are the two new ‘top-up taxes’ (168 pages between them) and the new alcohol duty regime (66 pages).

We want the Office of Tax Simplification back!

The UK government needs to reverse its ‘ill-conceived’ decision to axe the Office of Tax Simplification (OTS), says top 10 accountancy firm Azets.

ment may gain access to location and private user data through the country’s authoritarian laws.

Others feel that some of the impetus behind this move may be strategic in nature. TikTok has 100 million users in the US and has stated concerns about Chinese misinformation. But critics have highlighted that TikTok is on par with other social media platforms in the amount of data it collects from users.

The reasoning behind the ban of ChatGPT in Italy is data protection, and it may work with the regulator to ensure compliance and get back online. Many institutions see such technology as a threat to jobs and a potential proliferator of misinformation. We must continue to monitor to ensure a balance between protection and freedom is achieved.

Ann a Kat e Phelan is Head of Product at Eintech

Taxwatch

Record Inheritance tax take Inheritance tax (IHT) brought £531m into the UK Treasury in February alone, according to new stats. That brings the total for the 2022/23 tax year to a record £6.4bn and counting.

IHT raised £6.1bn for the 2021/22 financial year, so this year’s total it is already ahead of last year.

The Office of Budget Responsibility is predicting that the IHT take will jump to £45bn by 2027/28. This is because

Associate Director John Hiddleston (pictured) has written to the Chancellor Jeremy Hunt MP and Financial Secretary to the Treasury Victoria Atkins MP to call for a rethink.

The OTS was abolished by the then Chancellor Kwasi Kwarteng in his ill-fated mini-Budget last September, with its mandate instead delegated to the Treasury and HMRC.

Hiddleston warned that a new independent body is vital to tackle an ever-increasing

paperwork burden – especially for entrepreneurs. He wants to see the creation of a ‘beefed up’ OTS and rules where every time a new tax law is introduced at least one old tax rule must be repealed. Basic tax should also be taught in schools, he said.

Prison time doubled for ‘most wanted’ tax criminal

wanted criminals after absconding during her trial in 2013. The 48-year-old spent nine years on the run and was returned to the UK by HMRC in June 2022 and jailed for eight years a month later.

6.7% of deaths will trigger an inheritance charge – up from 4.1% in 2020/21. That is nigh on 50,000 extra deaths.

Yes to carbon border tax

A proposed carbon border tax could play a crucial role in achieving net zero emissions but will only be effective if it complements effective carbon pricing within the UK, the Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) have warned.

Sarah Panitzke, originally from York, played a leading role in a vast multi-million-pound VAT fraud and became one of the UK’s most

She was sentenced to another nine years in prison for failing to repay a £2.4m confiscation order. She now faces 17 years in prison and will still owe the money plus interest. The total amount outstanding, including interest, which continues to accrue at a rate of £538 a day, and has reached £3,782,779 as at February 2023.

The Government recently launched a consultation on a range of measures designed to protect UK manufacturers from being undercut by countries with softer environmental rules, including a carbon border adjustment mechanism (CBAM), which would effectively impose a charge on some imports from those countries.

The proposed tax is likely to target energy-intensive products such as iron and steel, cement, aluminium and fertilisers, at first,

and echoes a similar policy in the EU.

No one charged under evasion laws

HMRC has not charged any UK firm with the ‘failure to prevent tax evasion’ offence since it was introduced six years ago.

Since 2017 British companies can be criminally prosecuted if it is found they have failed to put in adequate checks and systems to prevent its staff from facilitating tax evasion.

THE FUTURE IS NET ZERO – CAN ACCOUNTANTS HELP TO SAVE THE PLANET?

A Queen Mary University of London seminar, bought to you in association with PQ magazine

Our popular face-to-face seminar series is back by popular demand. This time we are looking at how accountants can save the world from climate change!

We are also hoping to getting a visit from PwC’s sustainability hub. PQ magazine recently reported on its front cover that accountancy and the way it is taught and practised could be inadvertently fuelling climate change. In fact, Professor Ian Thomson claimed accountants right now are incentivising climate change. This has to stop, and accounting for the environment can no longer be seen as a marginalised issue.

So, how can accountancy and the environment work in harmony, and how carbon competent are you?

By joining us on 7 June you could be taking another step in the right direction! Click here to sign up.

Our panel on the night will be chaired by Queen Mary’s very-own Ishani Chandraskara Among the panellists already signed up is David Rothera, climate project manager at Net Zero Now.

The Future is Net Zero – can accountants help to save the planet?

Date: Wednesday 7 June 2023

Venue: Arts 2, Queen Mary University of London, Mile End Road, Bethnal Green, London E1 4NS

Time: 18.00 – 20.30 BST, but doors will open for 17.00 for networking

Supported by

DAVID ROTHERA

Students are using AI to help write essays

University students have admitted they wrote essays with the help of ChatGPT’s artificial intelligence program, according to a new BBC report.

One Cardiff University 2.1 student even told a BBC reporter they have gained first class grades for the essays written by the chatbot.

Other Cardiff students said the AI has become part of their work process, and they will continue using it until they aren’t allowed to access it.

A Freedom of Information request to Cardiff University revealed during the January 2023

assessment period there were 14,433 visits to the ChatGPT site on the university’s own wi-fi networks. For December recorded visits were

Italy blocks ChatGPT

only increase if we don’t act now.

This all sounds depressing, but it’s important to remember that there is still time to make positive change. The Paris Agreement, signed by nearly every country in the world, sets targets for reducing greenhouse gas emissions and limiting global warming to well below 2°C. Individual actions will play an important role. By making small changes in our daily lives, such as reducing our energy consumption, eating a more plantbased diet, and using public transport or walking instead of driving, we can collectively make a significant impact and limit, or even reverse, the damage caused by climate change.

At Net Zero Now we also believe that such sustainable changes can affect your businesses’ bottom line – in a good way. The Net Zero Accountancy Certification helps accountants navigate this journey –go to www.netzeronow.org/ accountants

Italy has become the first Western country to block advanced chatbot ChatGPT. The Italian data protection authority said there were privacy concerns with the artificial intelligence program and it was banning it with immediate effect.

The watchdog said that not only

would it block OpenAI’s chatbot but it would also investigate whether it complied with General Data Protection Regulation. GDPR governs the way in which we can use, process and store personal data.

The watchdog said on 20 March

Video games market dip

The total value of the UK video games market dropped by just under 6%, according to trade body UKIE.

Sales of hardware, which includes consoles, fell nigh on 20% to £2.16bn, with software (games) revenue growing ever-so-slightly to £4.57bn.

That means the market in 2022

was worth over £7bn, which is 17% above pre-pandemic levels.

According to the experts the 27% drop in console revenue is not unexpected. Similar declines have been seen two to three years after new generation consoles are released into the market –PlayStation 5 and Xbox Series XS were launched in 2020.

zero.

On hearing the news Cardiff University confirmed it was reviewing its policies and would be issuing new university-wide guidance shortly.

The ChatGPT isn’t perfect, however, as students revealed they still have to add the references.

Students said that change needs to happen because when it comes to coursework it is too easy to cheat with the help of AI. Some students are also worried that universities might be able to see transcripts of their communications with the AI networks in the future and take their degrees away.

that the app had experienced a data breach involving user conversations and payment information.

It said there was no legal basis to justify “the mass collection and storage of personal data for the purpose of ‘training’ the algorithms underlying the operation of the platform”.

It also said that since there was no way to verify the age of users, the app “exposes minors to absolutely unsuitable answers compared to their degree of development and awareness”.

There have been concerns over the potential risks of artificial intelligence has on jobs and the spreading of misinformation and bias.

There were also stock issues with the PS5, due to the pandemic. Merchandising and toys bucked the trend and saw a year-on-year jump of 7.7%. This compares with a 3% fall in the wider toy market. Top performer here was Pokémon. The big games of 2022 were Lego Star Wars, The Skywalker Saga, God of War Ragnarök, Horizon Forbidden West, Pokémon Legends: Arceus on Switch, and Elden Rings

The

solutions to its clients.

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My AAT woes

I am really unhappy about the ongoing and severe problems with AAT’s new AQ2022 syllabus, which launched on 1 September 2022, at the same time as their new assessment platform Atlas Cloud.

As you pointed out in your last issue what we have is a very unreliable assessment platform, which eight months on still contains various widespread glitches.

I also understand that students’ results have also been very poor, with pass rates nowhere near the previous AQ2016 syllabus levels. It is going to be very interesting when AAT finally gets around to publishing pass rates for the AQ2022 units.

Are Londoners the happiest?

As a Londoner studying in the North West, I find it hard to believe your story in last month’s issue that claims students in London are the happiest (PQ, April ’23).

It is so expensive for students there, it is one of the main reasons I now study and live in wonderful Manchester. I did notice that the study was a Living and Learning in London report by London Higher, and although I would not say they are biased it did raise an eyebrow. You also say it is about expectations, and perhaps people expect the capital to be crowded and expensive. That’s not to say the cost-of-living crisis has escaped students up here too, it is very tough at the moment. I have had to take on paid work and have missed classes because of the way the shifts work.

Name and email address supplied

Shortages can be good

Am I being naïve in saying a skills shortage (lead story, PQ, April ’23) is a good thing for us part qualified accountants?

These problems are serious, especially at a time when AAT has increased the student membership cost by 100%+, with their lifetime qualification

membership fee rates.

It takes me back to the launch of AQ2010 syllabus, when the AAT first started using CBA. Regrettably, there was a lot of ‘denial’ shown from the AAT back then, and it seems to be being replicated this time around.

Can PQ magazine please investigate these issues with the AAT, and perhaps provide an article in the magazine that can reveal the AAT’s formal response? Hopefully this will reassure students that they are not alone in dealing with these issues.

Name and address supplied

The Editor says: We are on the case, and will certainly keep our readers updated on any developments in this story.

Our ‘Graduates don’t want a career in accountancy!’ cover story certainly got a big reaction on social media. Prabin Jha said: “Mr. Graham Hambly, I partially agree with you here. Accountancy can’t be seen as standalone profession anymore.” Rupal Panchal explained: “It also has to do with increasing and complex compliance burden and deadlines.”

Marie Speakman added: “So true Graham. It’s pointless to train and study for a qualification and never get to use any of it. Too many accountants doing mundane and repetitive work. I think the salaries haven’t kept

If the demand is there but fewer people come into the profession then salaries will rise. The fact that some of the mundane tasks are no longer seen as a rite of passage also has to be a good thing. Technology is changing every profession and it is going to be the accountants who embrace it that will get ahead. I am ready to learn!

Name and email address supplied

If you have any problems with delivery, or if you want to change

What shortages?

You have a story talking about shortages on page one (PQ, April ’23), but then on pages 8 and 9 you write about firms taking on record numbers of trainees. Surely the market is readjusting itself after the Covid years and any shortages were just because firms found it difficult to recruit during the pandemic?

Name and email address supplied

up; they seem quite low.”

Geoff Nightingale agreed: “Good article. Interesting and engaging work is the only way to attract and retain employees in most industries.”

We got some great advice back too when we posted CIMA’s feature on how to pass the OTs. Lucille said you need to start early, check your understanding and do as many mocks/tests before you sit your exam. She went on: “OTs are intimidating as they are not absolute in nature and require a solid knowledge of the subject matter.”

Finally, take a look at all the great April Fool’s jokes on our fun page. Sunil Bhandari got in on the act and claimed he was swapping roles with his wife. While Sunil is a top ACCA AFM tutor his wife Rita is an ‘art of living’ teacher. This includes meditation and yoga. Let’s just say I haven’t seen Rita’s securitisation vs sukuk finance recording yet!

Robert Bruce, Prem Sikka,

Our star letter writer wins a fantastic ‘I love PQ’ mug!

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THE 2023 SHORTLIST

We are celebrating 10 years of the PQ magazine awards, so who made this year’s shortlist? Here it is the list hot off the press:

ACCOUNTANCY APPRENTICE OF THEYEAR

Anastasia Byard

Jasmine Kemp

Paige O’Neill

Shannon McClenaghan

Kimberley Mowatt

ACCOUNTANCY

BODY OF THEYEAR

(announced on the night)

PQ OF THEYEAR

Katarina Collins

Charlie Lowe

Joseph Marsh

Evie Todd

Sunny Yang

NQ OF THEYEAR

Grace Bayton

Noah Davis

Laurence De Ste Croix

Sarah Lucas

Danny Sutton

STUDENT BODY OF THEYEAR

Chartered Accountant Students’ Society of London (CASSL)

Lancaster University Accounting Society

Henley Business School –University of Reading

Leeds Chartered Accountants Student Society (LCASS)

BAF Social Committee, Newcastle University

ACCOUNTANCY COLLEGE OF THE YEAR

PRIVATE SECTOR

Accountancy Learning Limited

ACCOUNTANCY GRADUATE OF THEYEAR

Menna Bafaqih

Xhulja Duka

Sophie Huggins

Colin Omorodion

Abigail Wilkinson

DISTANCE LEARNING STUDENT OF THE YEAR

Daniel Blake

Salman Dahir

Siobhan Ife

Lillian Okolie

Daniel Salas

STUDY RESOURCE OF THEYEAR

AAT’s Student Conference: Accelerate CIPFA Learning

First Intuition Distance Learnings Free Revision Sessions

Mindful Education: AAT Level 2

My Exam Performance from ACCA

ACCOUNTANCY LECTURER OF THE YEAR

PRIVATE SECTOR

Ben Campbell

Matt Dean

Karen Groves

Penelope Merison

Jo Tuffill

PUBLIC SECTOR

Chris Barlow

Usha Mistry

Jennifer Rose

Lim Keong Teoh

Dinusha Weerawardane

INNOVATION IN ACCOUNTANCY

CIMA FLP Skills Premium Project by Kaplan

IFA’s New Apprenticeship

First Intuition

Future Connect Training & Recruitment

Open Tuition

VIVA Financial Tuition

PUBLIC SECTOR

Cardiff and Vale College

Newcastle University Business School

University of South Wales (USW)

University of Liverpool

University of Winchester

ONLINE COLLEGE OF THEYEAR

e-Careers

First Intuition

Future Connect Training & Recruitment

HTFT

Premier Training

ACCOUNTANCY TEAM OF THE YEAR

Kate West & Steve Wynne

Neil Maguire & Jessica HarveyOlayemi

Mindful Education Tuition Team

ACCOUNTANCY PERSONALITY OF THEYEAR

Neil da Costa

Rachel Harris

Nick Craggs

Libby Walklett

Karen Young

BEST USE OF SOCIAL MEDIA

ACCA Instagram Reels

Dominic Buttery (@DominicButtery)

GENCFO – LinkedIn Page

LSBF’s Big Pre-exam technique reveal countdown

Study Fun Group (Facebook Group)

GRADUATE/ APPRENTICE TRAINING

PROGRAMME OF THEYEAR

(announced on the night)

Standard – Integrated Degree

Apprenticeship – Accounting and Finance Management

Mindful Education: AAT Q22

Courses

More Than Bookkeeping

Queen Mary University of London Seminar Series

TRAINING MANAGER/ MENTOR OF THE YEAR

Brunilda Aliaj

Tabitha Appleyard

Laura Day-Henderson

Jagruti Patel

Andy Williams

PODCAST OF THE YEAR

Bang the Drum Podcast by Azets

Kaplan Lean Better Podcast Series

Price of Football Podcast, Kieran Maguire, University of Liverpool

The Bookkeepers’ Podcast

Tom Clendon’s SBR Podcast

EDITOR’S SPECIAL AWARDS

(announced on the night)

A question for Tom

Top tutor Tom Clendon explains how you can deal with exam failure, and how you can improve so you get a pass next time

Question

What are the main reasons for failing an ACCA exam? You see I am demotivated having just failed an exam, so what should I do to get my motivation back? My theory was perfect. My time management was fine, too. In fact, I nailed it. And yet I still failed. What should I do next?

Tom’s answer

Let me demonstrate good exam technique by breaking down these questions. I will address each one in turn.

1. Main reasons for failing.

There are two. One is time. The other knowledge. If you were given an indefinite amount of time to do the exam and you feel confident that you would pass it, then time is the issue. What is needed to ensure a pass therefore is better exam technique. More exam practice under exam conditions. Use the practice platform. If, however, there is a lack of knowledge then the solution is to go back to basics and to study the full syllabus. It’s not possible to pass the exam unless you have the knowledge.

It is of course difficult to generalise why students have failed. It can be a mixture of both factors. I think it’s important to try to listen to individual stories. So, if you need to retake SBR, please reach out to me. I can help. While for some tough love and home truths maybe required, for others a gentler approach is the right approach.

2. How to get motivated

Being frustrated and annoyed when you first hear that you have failed an examination is a natural emotion. It needs to be worked through. Getting that motivation to study is key to passing because it is tough to study for a resit alongside working. So, think about what completing ACCA would mean to you and your career. More money? Promotion? Personal satisfaction at finishing something you have started?

3. I just don’t understand why I failed when “I nailed it”

This is a difficult question to answer. Strictly

speaking you haven’t failed. It was an answer script that you prepared that was marked that was not awarded 50 marks. No one is judging you. No one died. But because I cannot see your script, I don’t know why your script was not a pass, either. But clearly it was. I trust in the integrity of ACCA’s marking system. So you didn’t nail it.

4. Next steps

It is necessary to reflect on why your script was not marked a pass. You should not blame the examiner or the marker. An honest self-reflection serves to enable you to do something different to avoid the same outcome recurring. Old keys won’t open new doors. Skills students have the benefit of reviewing their My Exam Performance – but that anaylsis is not yet available to ACCA students at the strategic professional stage.

In my experience, what is very helpful is get a mock marked by a tutor. Not just marked, but marked by an expert tutor so you get proper feedback. This is a really insightful. Reach out to one of my FME Learn Online colleagues (track them down on LinkedIn) to enquire about this service.

Dust yourself down. Get back on that horse. We go again.

• Tom Clendon is a podcaster and SBR online lecturer. Reach out to him on 07725 350793 if you want support in your ACCA SBR studies!

Supercharge your exam success

Get ready for the latest innovation from ACCA – it could be the secret ingredient for your exam success, says the association’s

Emma Kerr

In July we’re launching our new digital platform, the ACCA Study Hub. Designed to provide extra support for students and tutors, it gives exclusive access to ACCA approved study materials on web and mobile –and we’re pretty excited about it! You’ll be able to study anytime, anywhere with practice questions, study text chapters, flashcards and quizzes. It streamlines revision, helping you to increase your understanding and be perfectly prepared for exams. The Study Hub content has been successfully trialled and proven to show an increase in student pass rates – meaning stronger exam

performance and faster progress to qualification for you. And did we mention that it’s accessible to all?

Here's what some of the students who’ve had early access to the Study Hub had to say: Suhyma Imitiali Aboo, Kenya: “I was the national top in the SBL exam. Shall I tell you my secret? The ACCA Study Hub. It’s a wonderfully abundant platform that has all the resources at the click of a button.”

Albert Abaka, Ghana: “Wow, this is a goldmine! It has a list of all the SP exam papers. The contents are so concise, easy to understand and with real world

examples.”

John Fatoki, Nigeria: “I knew I’d need the best materials to help me ace the exams. I formed a study group with three friends and two of them introduced us to the Study Hub. This was the most important decision we took leading up to the exams.”

Geoffry Ndhlovu, Zimbabwe: “I think the best thing about the SH is the ability to go to straight to the exact section you want – and the quizzes of course.”

Source of support

Reza Ali, director of learning and commercial at ACCA, is confident of the benefits it will bring: “The ACCA Study Hub is going to be a great source of support for all our students globally in their journey towards ACCA membership. This marks ACCA’s ongoing commitment to our future

members’ success.”

The ACCA Study Hub is the latest addition to ACCA’s portfolio of support available to students and tutors, it promises to have a tangible impact to student outcomes when used together with approved tuition and other ACCA learning resources, like the ACCA Practice Platform, which helps you get familiar with the Computer Based Exam.

To maximise your chances of exam success, we recommend using the Study Hub and studying with an ACCA Approved Learning Partner. You can be reassured that our approved content relationship with BPP Learning Media and Kaplan Publishing will continue for the 2023/24 syllabus and we look forward to continue to work closely with both partners.

You’ll be able to access the Study Hub through your MyACCA account from 5 July. We’re including this innovative support as part of students’ annual ACCA subscription fee – making it even better value for money.

We’ll be in touch with more information ahead of the launch, so look out for more updates..

• Emma Kerr is head of content and publications at ACCA

Stay on the right side of the law

Karen Groves explains about contract law, which is covered in the AAT Level 2 Business Environment Synoptic assessment

Contract law is a new topic to the Level 2 AAT Q2022 qualifications. It is important as an accounting professional, that you are aware of the main elements of contract law, as they form the basis of most business transactions.

The law of contract determines if a promise is enforceable by a court of law (in other words, is it legally binding?). A contract is a legally binding agreement between two parties. The offeror is the party making the offer, and the offeree is the party accepting the offer.

For a contract to be valid, it must have the following:

Offer and acceptance: An offer is a statement of willingness to be bound on specific terms without any further negotiations. An agreement is then made between two parties and accepted with no further changes required. The offer can be either written, verbal or by conduct.

Consideration: Both parties must do something as part of their side of the contract (for example, a decorator (the offeror) must complete the office decorating and the offeree must pay the decorator once the work has been completed.

Consideration must have some value; this could be an item or a service and must also be legal. Consideration can be either executed (a promise that has been executed, for example, paying the decorator £1,000 to paint an office), or executory, for example a promise to do something in the future – namely the decorating, in exchange for another promise, namely paying the decorator £1,000 once the work has been completed.

Consent to terms: Both parties must be certain of the contract terms and conditions, which should be legal and possible to complete.

Intent to create a legal relationship: Both parties must be willing to be bound by the contract terms.

In addition to the above, both parties must be able to contract and submit themselves to the contract. For example, children are not allowed to enter into a contract agreement.

Invitation to treat

An invitation to treat means that one party has invited the other party to make an offer, and is therefore not an offer as mentioned earlier. An example of this could be a property for sale. At the stage a customer expresses interest in the item for sale, the offer is then made, which can be refused by the seller.

Termination

An offer can be terminated as follows:

Rejection: The offeree may reject the offer, or a counteroffer could be made.

Lapse: The offer may have an expiry limit, or the offeror or offeree may have died, causing the offer to lapse.

Revocation: An offer can be revoked by the offeror before acceptance unless a part payment or another act has been performed, indicating acceptance of the offer.

Capacit

y

and legality

Void contracts

A void contract is a contract that is either illegal or impossible to carry out, and therefore void. This type of contract cannot be enforced by law.

Voidable contracts

A voidable contract could include for example, a contract between an adult and a child (under the age of 18). The adult would be bound by the contract; however, a child is not, and therefore the contract would be nullified (made legally null and void)

Discharge of contract

A discharge of contract means that the contract is no longer legally binding and has therefore been terminated.

Discharge by performance

The discharge of contract by performance occurs when both parties are refused to perform the contract obligations.

Discharge by breach

The discharge of contract by breach refers to one of the parties failing to perform the contract obligations, hence being called a breach of contract.

Now have a go at the questions below:

1. You are in a car sales room and tell the salesperson you would like to buy the car. This creates a binding contract:

• True

• False

2. An advert in your local newspaper selling a car is an invitation to treat:

• True

• False

Answers:

1. False

2. True

• Karen Groves is an AAT tutor and Faculty Director of Accounting at e-Careers

Business gets the manga makeover

i h k

Wiley, one of the world’s largest publishers, has announced the publication of the first English-language ‘manga’ series covering business and self-development

As you may know, manga is the highly illustrated, emotionally compelling, Japanese graphic novel format that has captivated millions of English-language readers around the world.

Now top publisher Wiley is releasing a series of six ‘Manga For Success’ titles cover topics including: Managing Change; Marketing; Resilience, Confidence & Positive Thinking; The Psychology of Personal Growth and Better Relationships; Business Problem-Solving & Strategy; and Leading Meetings & Teams.

Originally published in Japanese by the JMA Management Center (JMAM), a leading Japanese publisher of business-oriented manga books, the titles combine highly visual manga

stories with sophisticated explanations of the most important principles and concepts, and are primarily aimed at young career professionals looking for a fun way to learn the basics!

As with some other existing English-language manga titles from other publishers, the Wiley editions will be structured to match the Western way of reading – that is ‘left to right’. Manuscripts were also carefully reviewed to make any necessary cultural adaptations, to ensure the stories resonate with a Western audience in the same way they would for the original Japanese audience.

With current sales of manga books in the UK now worth over £25m – in the US the figure is

over $250m – the Manga For Success series is aimed not only at existing fans, but also new non-manga readers, and people who just want an enjoyable, different and emotionally compelling way to learn about important topics and develop their skills.

Similar to Wiley’s For Dummies brand of books, Manga For Success will make what could be considered intimidating topics easy and fun to understand. The format is highly approachable and readers will be able to quickly gain a grasp on difficult concepts from the detailed explanation of core concepts in the story.

All titles will be available wherever books and ebooks are sold, priced £16.99/€18.80/ US$22.00.

How to pick up those ATX professional skills marks

From June 2023, ACCA will be introducing professional skills marks into the ATX exam. So, what professional skills will you be expected to demonstrate in the exam?

Communication

Section A questions in ATX will ask candidates to respond to the requirements using a particular format, for example a report, letter, memorandum or notes in preparation for a meeting.

Irrespective of the specific format required the style, presentation and tone of a candidate’s response should be professional and flow in a logical way. The response should contain appropriate headings and sub-headings which aim to achieve good coverage of all aspects of the requirement in an organised and methodical manner. It should be clear and effective, both in terms of the language used and the calculations performed.

Another important aspect of the skill of communication is to ensure that the content is relevant to the requirements and adheres to any specific instructions which are given in the question. Due consideration should also be given to the appropriateness of the tools employed (i.e. use of spreadsheet versus word processing platforms) and the ease of referencing between them, if both are used to address a single requirement.

Analysis and evaluation

The professional skill of analysis can be demonstrated in ATX by the application of the underlying tax rules to the specific scenario provided. Question requirements will often call for an explanation of the consequences of one or more courses of action. Candidates will then need to demonstrate evaluation skills by providing a recommendation or conclusion, or by giving advice. Loss-making scenarios are a good example of how this skill can be tested; in such a scenario, analytical skills will be required in terms of determining all the available options to the loss making company, or individual.

Candidates will often then be asked to evaluate each of them, and to conclude on the most suitable or beneficial relief(s). The conclusions reached should be supported by relevant data taken from the scenario and justified by reference to the specific position of the entity involved.

Due consideration should be given to the impact of any variables provided in the scenario; for example, more than one date may be given for the proposed disposal of an asset, or there may be uncertainty as to the structure which is to be adopted for a proposed acquisition, or whether a new venture will be operated as a company or an unincorporated business. Variables such as these should be identified and any differences clearly explained in the analysis that is performed.

As previously noted, the skill of evaluation will typically be demonstrated by way of a balanced appraisal to determine the impact of a course

of action, for example, taking advantage of a particular claim, election or relief. This involves the application of reasoned judgement to consider relevant factors, decide which ones to prioritise and then come to a suitable and justified conclusion based thereon.

Scepticism

Demonstrating scepticism in ATX does not mean challenging all the information which has been provided. It should be clear to a wellprepared candidate where scepticism should be exercised. For instance, there may be gaps or uncertainties in the information provided which could affect the conclusions reached, or the possible recommendations which could be made. If relevant, these should be identified and explained. Not knowing, for example, the specific date of an acquisition, or a disposal, may make the availability of particular reliefs in connection with the transaction uncertain, and this would need to be pointed out.

Scepticism may also be tested by giving candidates the opportunity to challenge the expressed views or opinions of individuals (say a friend, colleague or relative) in the scenario with regard to a particular course of action, strategy to adopt or application of the tax rules. Clear direction will normally be given in the question that such challenges are expected, and where this is the case, candidates should ensure that they fully explain and justify their counter arguments, and alternative views.

Commercial acumen

All ATX scenarios are intended to be as commercially realistic as possible. They range from considering large groups of companies down to single individuals. Candidates are therefore required to understand what advice is, or is not,

appropriate in such organisational contexts, taking care to ensure that any recommendations are practical, plausible and relevant to the given entity and its particular circumstances.

Commercial acumen does not therefore entail having a knowledge or awareness of tax issues which goes beyond the scope of the syllabus. Effective demonstration of this skill will involve candidates using information within the question scenario to provide realistic and commercial solutions to problems, taking into account any other relevant practical considerations. This could involve demonstrating an awareness of internal constraints relevant to a scenario. For example, if access to funds is a major concern for an organisation, the solution which achieves the greatest tax saving may not necessarily be the one that addresses immediate cashflow concerns and this should be pointed out in a candidate’s answer.

Candidates need to take a considered forwardlooking approach, recognising the possible consequences of past and future actions and that a course of action may have multiple impacts, so that the right choices can be exercised. This also means focussing on time limits for claims and elections such that, from a tax perspective, choices may still exist with regard to transactions which have already occurred.

Commercial acumen may also involve demonstrating a broad awareness of the purpose behind a particular area of legislation (e.g. legislation introduced to combat tax avoidance) or the wider consequences of a particular course of action beyond the immediate transaction under scrutiny; as an example, identifying that, under UK tax rules, once an election has been made to exempt from UK tax the profits of a foreign branch, this tax treatment applies to all foreign branches of that company.

Are friends electric?

This year’s AAT Professional Synoptic is based on a company called Argent Electric Motors Ltd (AEM Ltd). Nathaniel Hammond gives his analysis on what the scenario entails and what could possibly come up in the assessment

This year’s scenario will serve as the last one ever on the AQ2016 syllabus (excluding apprentices) and is focused on a company we generally refer to as AEM, a business who sells both new and used electric vehicles to the public, in this article we will delve a little deeper into the pre-release material to better contextualise the company and emphasise points which MAY be relevant in your exam.

AEM is a relatively new company, established just three years ago. An interesting observation about AEM is that the founders (shareholders) of the business are actively involved in the dayto-day running of the business, generally the AAT have previously made a clear distinction between the directors and shareholders in other scenarios, keep this in mind when considering the roles and responsibilities of parties.

Just as in real life, there is an increasing demand for electric vehicles, which is further boosted by government legislation phasing out petrol/diesel vehicles. This will be very relevant in the company’s future plans to continue expanding. At this stage an important observation to also be made is to recognise AEM is a seller of EVs, NOT a producer of them. This will play an important part in exam questions as much of the Budgeting/Decision and Control units focus on production aspects, it is reasonable to assume you will not be asked production-based questions for a company that does not produce anything themselves!

The company currently has 15 showrooms across the country, these may play into questions surrounding different topics, each centre could be measured as its own profit centre, or perhaps performance indicators will be used to assess one showroom against another, alternatively plans for another showroom may be brought up but be wary of the comment under perspective 4 which states “there is some concern that the business might be developing too quickly for its capital base”. It is possible your ratio work may highlight some of these issues.

Sustainability will undoubtedly play a role within the assessment, and AEM certainly ticks a few boxes in terms of the industry they operate in and the environmental impact of providing electric vehicles as opposed to traditional ones. Equal to this there is a company objective to minimise energy consumption in each showroom and to ensure suppliers are also practicing sustainability principles. Such things tie very much in with the “triple bottom line” and such factors may very well be something you discuss in this exam.

So far, we have focused on largely positive aspects of AEM, but as always in such scenarios there are observations to be made which could cause concern and be relevant in the exam. The first of which is overtrading as mentioned already, rapid expansion sounds great at face value, but the risk of growing beyond operational capabilities is a present risk, ratios can be a good alarm to such things, be on the lookout

for deteriorating ratios such as gearing, interest cover and receivables collection periods.

Customer perspectives also raise a couple of concerns, AEM is aware of the importance of positive customer relations but at present aftercare services are lacking in comparison to the initial purchasing of a vehicle, service plans are a core part of the product offered with threeyear plans offered, consider the threats if this is not addressed and opportunities to improve the process. Employees are also noted to feel as “the culture within the business is that they are not promoted or encouraged”. Such comments can be useful when considering the balanced scorecard which, conveniently, AEM have now started using to appraise the performance of the company.

Finally it is worth pointing out a couple of potential threats/weaknesses in the company’s internal operations. Operational costs must be kept as low as possible to allow AEM to price match against competitors as per its policy, this links in with the showroom managers who must maintain solid inventory management and meet certain targets, should they fail to do so the knock-on effect could be a real problem.

This covers some key observations, but is not a substitute for reading the full pre-release yourself, which is highly recommended. And it is worth reiterating, these may or may not be factors relevant to your exam

• Nathaniel Hammond is an AAT distance learning tutor

London : Birmingham : Manchester : Online info@fctraining.org

0203 7908674

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A WACC’y milkshake in need of no formula

Jo Tuffill shakes up the WACC calculation using a performance management technique

Formulae feature pretty heavily in the ACCA FM and PM syllabi and tend to send many students into a spin with memories of dreaded school algebra lessons. Let’s face it, accountants really need to be numerical, not mathematical.

Taking FM as an example; here is one way of throwing out that WACC’y formula.

The weighted average cost of capital is basically like costing up a strawberry milkshake, you know the ones from your local coffee shop that vary in both quality and cost.

Suppose we make 100 litres of strawberry milkshake as follows:

50 litres of milk at 10p per litre

40 litres of strawberry coulis at 20p per litre

10 litres of cream at 15p per litre

Makes 100 litres so what is the cost of 1 litre?

Weighted Average Cost per litre will simply be £14.50 / 100 = 14.5p

Now if you vary the mix keeping the total quantity fixed you can manipulate the cost. Adding more milk and less strawberry coulis will push down the cost per litre, and vice versa. We know from PM mix and yield variances, that varying the mix from the standard mix, will create either a more expensive or less expensive mix. This technique can be applied to FM and calculating the cost of capital.

Here is the trick.

When asked to calculate a WACC, replace the quantity in litres with Market Values of Finance and the cost in pence with their respective % Cost of Finance

Example: Our milkshake company is financed by a total of £100m as follows:

£50m of Debt at 10%

£40m of Equity at 20%

£10m of Bank loan at 15%

What is the WACC?

Answer

FinancecapitalMarketValueCostofcapital%Cost

Debt £50m x 10% £5m

Equity £40m x 20% £8m

Bank Loan £10m x 15% £1.5m

TotalMarketValue£100mTotalCost£14.5m

WACC will simply be £14.5m / £100m = 0.145 or 14.5% Again, if you add another source of finance you will vary the mix and manipulate the WACC. Adding more debt at a lower cost of capital will push down the WACC as follows:

Equity £40m x 20% £8m

Bank Loan £10m x 15%£1.5m

Debt2£20mx10%£2.0m

TotalMarketValue£120mTotalCost£16.5m

WACC will simply be £16.5m / £120m = 0.1375 or 13.75% which is lower. So no formula required!

Get ready for Accountex

Accountex London 2023 returns with exciting new features and a commitment to sustainability and mental health

Accountex London is back at ExCeL on the 10-11 May 2023. With more exhibitors, feature areas and theatres than ever, Accountex London is set to be the biggest and best show yet. Over two days, 8,000-plus accountants, in-house finance professionals and bookkeepers from all over the world will be returning to the capital for the free annual event. More than 250 top fintech companies will be giving software demos and there will be a diverse CPD accredited education programme to explore.

To help visitors navigate the vast show floor, the new Accountex app will be available to download for free. It will give users a full view of what’s on offer, including the exhibitor list and education programme, and lets people plan their day using the app’s planning tool.

New additions to the show include the Bookkeeper’s Base Camp, a space for bookkeepers to network, meet with their peers and relax. The Fintech and Innovation Showcase is a new theatre that will give quick fire overviews of the products and technology at the event. Each 10-minute session will cover a different product to help visitors to decide which

exhibitors they should meet.

To celebrate the King’s coronation, the Networking Bus, a vintage red double-decker, will offer opportunities for networking, free Pimms and, of course, ice cream – a British garden party at Accountex!

Part of Accountex’s commitment to sustainability is for a tree to be planted on behalf of each visitor to the show. By teaming up with Carma, Accountex are working towards mitigating their carbon footprint, whilst

supporting local communities across the world. One month after the conference, Carma will plant the trees in collaboration with the Eden Reforestation Projects. Through these projects, essential jobs are created to provide long-term support to the economy and the restoration of local environments.

A big theme for this year’s show is mental health. Accountex London are excited to announce that Mental Health UK are their official charity partner for the 2023 event. The partnership will allow visitors to speak to the Mental Health UK team in person and find the right support.

Mental Health UK provide support and services for some of the biggest societal challenges that pose a threat to people’s mental health, including money problems, loneliness and resilience in young people.

“We’re thrilled to have partnered with Mental Health UK for Accountex London. With the costof-living crisis and recession affecting everyone, it’s more important than ever that we look after our mental health,” said Portfolio Director Caroline Hobden. “Accountex will be a safe space for people to gain insight and find the right resources to support themselves, their loved ones, and their colleagues.”

For further information and to apply for a free ticket to attend Accountex London at ExCeL on the 10-11 May 2023 visit www.accountex.co.uk/ london. Use priority code ACC249 when booking your ticket.

ACCA Careers is dedicated to helping ACCA students develop their careers. With hundreds of entry level global job opportunities and over 400 career advice articles, we’re here to help you every step of the way.

When a sale is more than revenue!

There are many things to keep in mind when accounting for revenue. In fact, because the nature of sales contracts can vary greatly from company to company, IFRS 15 Revenue from contracts from customers clarifies the accounting treatment for sales transactions in its 5-step model.

The 5-step model ensures that revenue gets recognised at an amount and at a time that faithfully reflects the sales contract. As one article could not possibly address all aspects of the model, I am going to look at one specific area.

More than credit

I will help you understand how revenue is accounted for where the contract contains a significant financing component. What do I mean by ‘a significant financing component’? Well, we should appreciate that virtually all sales these days are made on credit; it is normal for suppliers to provide very short-term finance to their customers in the form of credit. Normal credit terms may be 30, 60 or even 90 days, depending on industry norms.

If, however, the seller offers the buyer a longer credit period than is customary, say for example 12 or 24 months, it is clear that the seller is providing more than just standard credit – the seller is providing finance to the buyer and it must be accounted for as such. The seller is essentially allowing its customer a loan.

Therefore, by committing to the sales contract the seller is promising to deliver two things: the good or service itself and the loan. The income from delivering the good or service is classified as revenue, and the income earned from the provision of finance must be classified as finance income. This is consistent with the Conceptual Framework’s requirement that items in the financial statements must be classified in a way that faithfully represents the nature of those items – this is fundamental to the financial statements being useful to people who rely on them.

An example

Today, Sales Co sells and delivers a sofa to Buy Co for $2,000, with two years’ interest-free credit. Interest rates are 5%. It can be seen that although delivery of the sofa takes place today, because there is a significant financing component, the sofa is not the only thing being sold. Sales Co is promising to deliver two things: the sofa and a two-year loan. Even though the deal is marketed as being interestfree, accountants look beyond the surface and determine that there is in fact interest inherent in this arrangement.

Accounting treatment

According to IFRS 15’s 5-step model, the number of separate performance obligations (promises by the seller) should first be identified and a price be allocated to each performance obligation. The income generated from each ‘promise’ should be recognised as or when that

promise is satisfied by the seller.

The first promise or performance obligation is the delivery of the sofa. The fair value of the sofa at the date of sale is equal to the present value of the amount receivable from the customer for the sofa in two years’ time. This amount will exclude any interest and equates to $1,814 (i.e. $2,000 x (1/1.052). Because the delivery of the sofa takes place at a point in time, the revenue from the sale of the sofa ($1,814) must get recognised in full at that date, the date of delivery, with a corresponding trade receivable being created:

The numbers

As mentioned above, a trade receivable (a financial asset) of $1,814 is recognised at the date of sale, and over two years this receivable, being measured at amortised cost, will grow to $2,000 as follows:

The remaining $186 (that is $2,000 – 1,814) is the interest income that is going to be earned by Seller Co over the two years it will provide finance to its customer. In other words, $186 is allocated to the performance obligation of selling finance. While the income from the sale of the sofa is classified as revenue, the income from providing finance is classified as finance income.

While the performance obligation to deliver the sofa was satisfied at a point in time (on delivery), the performance obligation to provide two years’ finance will be satisfied over time (over two years). The financial reporting implication of this is that revenue and finance income are not only presented separately on the statement of profit or loss, but they are also recognised at different times – so profit includes a faithful representation of the income generated by a company in a given year. While the revenue from the sale of the sofa gets recognised at the delivery date, the finance income earned from providing the loan to the customer will be recognised over two years.

The finance income recognised in profit or loss in the first year after the sale of the sofa is $91:

Dr Trade Receivables 91

Cr Finance Income 91

(Revenue of $1,814 is also recognised in Year 1).

In the second year, $95 is recognised in profit or loss for interest earned from the contract:

Dr Trade Receivables 95

Cr Finance Income 95

This means that by the end of the two-year period, the full interest income of $186 will have been recognised in profit by the seller and there will be an amount in Trade Receivables equal to the amount the seller must pay the buyer ($2,000).

• Sarah Ardiles is an ACCA FR online lecturer with FME Learn Online – see www.sarahardiles.com

Sarah Ardiles explains what ‘a significant financing component’ is and how to calculate it

Rethinking Accounting

Professor Atul K. Shah and Mzwanele Ntshwanti asks the question: are you are ready to rethink accountancy?

We are presently going through a ‘poly-crisis’. Many things are going wrong – and all at the same time. Inequality is growing fast, inflation is back in full swing, we are seeing a rise in global illicit financial flows, the environment is hitting back and we have no technology to stop flooding, hurricanes and forest fires.

And yet many accounting professionals are continuing their old habits, without any change in culture or knowledge that influence business practices and thereby our societies and the environment. How can this be sustainable?

In 2009, students at Manchester University discovered that the economics they were taught has nothing to do with the real world. We had just been through a global financial crash and this topic was not on any syllabus!

They set up a rebel movement, called Rethinking Economics, which has since gone

global and achieved huge media coverage, including on the BBC and in the Financial Times. Through this movement, different schools of economics across different countries have begun to embrace the ideals of a pluralist and heterodox economics curriculum.

The same group has started a similar new movement called Rethinking Accountancy. The starting point is the same – they want a fairer, more responsible and sustainable society, and education at universities and in professional exams is still quite only traditional and technical. Ethics is discussed in a secular, hypothetical way, rather than engaging students with their own cultures and beliefs and challenging them on the kind of world they would like to shape. Often technical calculations of accounting, finance and taxation bury the ethical assumptions, removing them from the debate. Professional bodies have had huge ethical scandals among their members with

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fraud and audit failures and they have responded by changing the exam syllabus, rather than putting responsible Big 4 partners or managers behind bars. In fact, the Big 4 firms have been caught cheating in their ethics exams by sharing the answers among the employees!

When ethics and culture are debated in accounting, the subject can become very interesting and meaningful for young people. It can help them develop their passion and vision and explore how they can help remove poverty or create jobs, or protect animals and the environment. It can help them challenge the greed and profit maximisation that businesses often practice and propagate with no intention of creating sustainable and just societies. The vast diversity of accounting can also be taught through stories and good case studies from all over the world, not just in America or Europe. If taught well, accountants can become the responsible professionals in finance the world desperately needs.

Join Rethinking Accounting and help us transform the global curriculum.

It's time to change the tax year end

We report from the Queen Mary University of London’s Future of Tax seminar

One of real challenges of Making Tax Digital for income tax is the fact that digital systems can’t cope with the 5 April tax year end, explained Anita Monteith of the ICAEW’s Tax Policy Unit.

Speaking at the recent Future of Tax seminar at Queen Mary University of London, she revealed she has been working in tax for over 40 years, and that changing the tax year is something that has been top of her personal agenda all that time.

Trying to digitalise tax now, where the end of the tax year tries to link with VAT, which is accounted on calendar month ends, and where we want to engage internationally, is just not going to work.

However, she is worried UK plc will pay a price for its inertia. People trading on Airbnb and Amazon will, for example, have to share their trading details internationally from 1 January

2024 – so how will that fit with the UK year end?

Monteith believes the UK needs to bite the bullet and start the tax year on 1 January. It has been suggested we move to 31 March first, and although this might seem like an easier option,

Speakers in order of appearance were:

Dr Ishani Chandrasekara, Programme Director for BSc Accountancy (Flying Start)

Graham Hambly, Editor, PQ magazine

Anita Monteith, Head of Tax Policy, ICAEW

Jason Piper, Policy Lead, Tax and Business Law at ACCA

Makayla Combes, Head of Tax and Business Consultancy, Ad Valorem Group

Neil da Costa, Kaplan senior tax lecturer, author, tax consultant, podcaster

If you could change one tax what would it be?

Anita Monteith (her opinion): Make registering for VAT at a much lower point. Rather than the current £85,000, maybe make it £10,000 or £12,000.

Jason Piper: The requirement to use software from commercial software houses for Making Tax Digital. HMRC promised free software on their behalf and I am not sure that it’s fair!

Neil da Costa: I would increase the nil rate band of IHT from £325,000. Think about how property prices have increased. If you worked hard to develop wealth you should be able to pass it on.

Makayla Combes: Equalising tax reliefs available to corporations. Things like R&D are only available to companies and not sole traders.

she said moving to a calendar year would be “so much better”.

She told a packed lecture theatre that the problem is the huge hole the change would make in the nation’s finances. With the UK government using cash accounting, not accruals, there are massive budgetary implications. Monteith also felt the amount of debt the government has now taken on means any change may be viewed as too big a risk at the moment, and we will now have to wait until there is more money in the coffers.

It leaves the UK pretty much on its own, but she pointed out the Irish government managed to make the change in 2002, so it is not an impossible dream!

Moneith was just one of whole host of top speakers at the first of our Future Seminar Series with Queen Mary University of London. You can now check it out on the PQ magazine YouTube channel at https://tinyurl.com/2ptwd5sh

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Pre-seen and pre-warned!

Checking out the pre-seens for the next two sets of CIMA case study exams we find sitters are working for a tractor manufacture, package holiday company and logistics giant!

OCS – Tracs Europe

F1 and P1 with some application to pre-seen.”

Ania: “Go through past papers and try to write answers to past paper questions. Then compare them with the ideal answer. It’s the best way to learn. Try to do it in the time which is allowed during the exam. Plan your answers first and also look at % and estimate time for each sub-task.”

Prishani: “I also just passed OCS, and mocks are the way – approximately 4 should do it. I took about 2.5 weeks studying every morning from 4am to 6am and 7pm to 10pm in the evenings, and the entire Saturday and Sunday. The last five days I only practised mocks.”

which only sell their holidays. They account for 35% of bookings, the rest come via the website.

The IT system is also designed to maximise revenue and the customer only receives the total price when everything – flight, transfer and hotel – have been selected.

We are told the board is keen to identify any problems and to address them as quickly as possible.

A quick look at the P&L shows profits are down and costs rising quicker than revenue. Meanwhile, Mangusaair’s P&L shows it keep a better handle on costs and has tripled its profits in a year.

The news clippings looked at air safety, airport lounges, travel insurance, seat sizes and space, and the expense of tailored package holidays.

The new pre-seen to cover the May and June sittings is 26 pages long. You take on the role of Finance Officer in Tracs Europe’s finance department, reporting into Ben Sholtz (finance manager) and Karl Lomas (FD).

Your company makes and sells tractors and is part of a wholly-owned subsidiary AgRi, a North American company founded in 1860. Tracs Europe has a sister company doing the same thing in North America, which might come into play.

Tracs Europe doesn’t sell direct to the market, and instead uses dealers. It only produces big tractors, not compact or mini tractors, and has 20% of the European market. It manufactured just over 31,000 tractors, generated T$2.990m, and made a gross margin of 25.9% and an operating margin of 8.7%.

In the news section we see the debate over red diesel and electric alternatives, the development of AI to reduce human intervention, and finally tractor design.

We took a look at www.derre.co.uk/em/ tractors, John Deere’s website, and Farmers Weekly for all our tractor news needs – see https://www.fwi.co.uk/latest. You should also take a look at CNH group, which owns New Holland and Case IH. Then it’s Massey Ferguson and Fendt.

It is always interesting to note that CIMA puts a context statement on the cover of the preseens. It says that although it is aware that there has been, and remains, a significant amount of change globally it does not expect students to factor these changes into their responses. You have to answer as if the current and on-going global issues have not had an impact. But is that right, we are not sure.

Students asks for help

A PQ recently took to social media to say: “Hey the OCS exams are coming up in May and I’ve been having a hard time to understand how to study and what to do exactly. Tips would be highly appreciated mates.”

Fellow PQs responded

Denisa: “I just passed the OCS in Feb and what really helped me was marked mock exams with feedback and study cards in all the theory from

Ambreen: “I would look into exam technique by using the mock answers to see how CIMA expect the answers to look. I worked backwards, looked at mocks and then revised my topics again.”

Erin: “You need to understand the way budgeting operates in the manufacturing business and know the industry.”

Marta: “Analyse past papers available on CGMA page, that will give you a good idea of the range of questions. I found the exam similar to the previous ones, although always expect something odd! Do time your mocks and make sure you don’t waffle.”

MCS – Happywell Holidays

You are working for a logistics service as a senior manager in the finance department. You report directly to the board.

Businesses have to spend a lot of money on logistics – the biggest spend being on transport (58%), followed by inventory carrying (23%), warehousing/storage (11%) and administration (8%). This can be run in-house or outsourced to a contractor. Few large companies use DIY and most opt for third-party logistics (3PL).

You are the Financial Manager for package holiday company Happywell Holidays for the May MCS. It operates its own flights and hotels and sells third-party products such as insurance and car hire. Did TUI come to mind straight away? There is also Jet2Holidays, Kuoni, Trailfinders, Inghams and Hays Travel.

The three core elements of any overseas ‘3S’ holiday are the flights, accommodation and transfers.

Most of us have booked this type of holiday, so you should know about the typical choices of breakfast only, half board, full board and fully inclusive.

Happywell Holidays is one of the two big players in the market, alongside Mangusair. Both operate a large fleet of aircraft and while Mangusair rents its accommodation Happywell own a large number of hotels.

Quality is a key part of Happywell’s offering and passage numbers have climbed steadly, despite the appearance of cheaper tour operators.

Happywell also has retail shops – 311 in all,

Daistruk started life as a transport company and today employs 22,000 people, which includes 7,000 drivers. It offer inventory management, shared user storage and handling, outsourced warehouse management, shared usage transport, rail transport and intermodal, and specialised loads.

Its biggest clients come from the food industry (44%), with 33% coming from general merchandise and 23% from public sector and industrial customers.

Take care to read the Daistruk’s Principal Risks on page 17. Also do a quick comparison between Daistruk and competitor Carree (p18-p21).

So what do we have in the news? We have a question about shipping containers, curtain sides, unqualified trucklift drivers, the automation of Daistruk’s ports, which could lead to more rail transport (better for the environment), and motorway chaos due to the size of some of the lorries on the road.

And at just 27 pages it is easy read. So who are top logistical companies in the UK? Think DHL, UPS, FedEx, Agility, GAC UK, CSX and Menzies Distribution. It might seem a strange thing to say but so is Royal Mail plc!

Oh , and if you want to read the 2022 ThirdParty Logistics Warehose Benchmarek Report then go to https://tinyurl.com/yzdzkcpj

SCS – Daistruk

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Why fraud awareness is a must!

The IFA highlights the extent of fraud in the UK, and offers some advice on how to avoid becoming a victim

Fraud accounts for almost a third of UK crime; in the past 12 months almost £754 million was lost through fraudulent activities.

As professional accountants we are gatekeepers, and the first line of defence, to prevent illicit funds finding their way into the UK economy. As regulatory compliance will form a significant part of your future career, it is essential that you prioritise not only an understanding of the regulatory landscape, but also knowledge of current ongoing fraud reports. Some examples which will help you to identify potential hazards are:

• According to UK Finance, authorised push payment (APP) scams are a key concern, with customers being tricked into authorising payments to an account that is ultimately controlled by a criminal entity. These scams increased in frequency by 60% and rose 71% in value in 2021 compared to 2020, accounting for losses of over £355 million.

• Data from FTI Consulting meanwhile highlights the issue of Green Fraud, with organised crime targeting businesses by offering fictitious services designed to help them ‘achieve’ net-zero. It is anticipated that these scams will amount to £3.5 billion by the end of the year.

• Employee fraud – most commonly through inventory theft, data theft and cash theft – costs businesses around £190 million annually. What’s more, it takes an average of 14 months for the fraud to be discovered, with dedicated financial controls a key component in tackling the issue.

Combatting fraud

As well as utilising advanced security systems and implementing strict financial controls, accountants must understand the regulatory framework for combatting fraud. The Economic Crime Plan mandates the requirements for tackling economic crime (currently being

redeveloped), and there is a separate fraud strategy in development, too. The National Economic Crime Centre provides intelligence sharing and summaries of alerts that your membership body will send to you. The National Crime Agency also provides good guidance and sector-specific reports such as their guide to understanding modern slavery and human trafficking for the accountancy sector.

One final point: not only do you bear ultimate responsibility for accounts, but your ability to legitimise financial transactions can make you a prime target. There are extensive examples

of accountants being pressured to sign-off fraudulent activities, as well as many examples of fraudsters impersonating accountants/ accountancy practices, specifically to legitimise their activities. Vigilance is key!

AML Matters is a programme of practically focused webinars that support accounting professionals build their understanding of the anti-money laundering requirements. They provide valuable fraud awareness and counterfraud training. To find out more click here

• Thanks to the Institute of Financial Accountants (IFA) for this article. Go to www.ifa.org.uk

AAT: What level should I start at?

Identify the right AAT qualication for you with Premier Training’s Skills Checks.

Your free online Skills Check is automatically sent to a Premier Training tutor who will contact you on which AAT level to study rst. Head to our website at www.premiertraining.co.uk for more details.

You can start AAT distance learning courses on any day and t your studies around your job and other commitments.

Interest-free instalment plans are available for all courses as well as FREE Xero training and certication.

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Learning Resources

Award winning learning resources including printed books, eBooks & e-learning, videos and quizzes.

Assignments

Prompt marking turnaround –marked by a tutor (not a computer).

Xero Advisor Certication

Meet the Data AutoMarker

Sage Accounting’s Tim O’Reilly explains how its AutoMarker provides rapid formative and summative feedback that significantly improves the learning experience for students

The date is 23 March and Boris has told us all to stay at home. I mentally decide which drawers need sorting out, we are going to have a quiet period…

I turned on my computer the next morning to a mountain of emails from tutors and providers who need to get their accounting students through the AAT UACS unit or finish their degree course. The issue was not just one of software provision and learning materials, but also of testing. How could you remotely and securely test the student’s ability to use the software?

Sage Qualifications have a great deal of experience in the delivery of qualifications, courses and, crucially, the testing. We understand the problem of swapping report files and compromising the validity of the test and results. This situation needed a solution that could be used with confidence to remotely test the student’s skills.

The solution was to mark the data rather than any reports the student produced (which could be changed or shared) and therefore to create software that marked the accounting data in the student’s cloud software immediately after they had taken their assessment. If the assessment was undertaken in an invigilated environment (we developed remote invigilation to integrate with the portal) this would be an extremely secure and valid method of testing.

Innovate UK agreed to help with funding and advice to create the software and the detailed coding required for the many different assessments we deliver (we also accommodate different currencies) –and our Sage Accounting data AutoMarker was born! This was a major

step forward for the many thousands of learners who needed to use our courses and qualifications. We have over 40,000 students currently on the portal.

The AutoMarker investigates the leaner’s software after they have worked through their assessment and marks the data against an agreed marking system. The marking system can be very detailed or basic depending on the requirements of the awarding organisation.

The AutoMarker will turn incorrect entries red, correct entries green and entries that are incorrect but are not material it will mark blue and return a report.

A feedback report can be exported, which can be shared with the learner, indicating the areas of pass or failure.

This functionality proved so successful that we use it throughout all our learning materials so that learners can have their data marked as they work through the course materials.

We now use the AutoMarker on formative as well as summative learning on our AEB/SFA funded qualification delivery, as well as with our university partners where it forms part of their degree course.

We find the feedback from students and tutors remarkably rewarding. The data AutoMarker gives students instant feedback and is a very secure, accurate way of learning and testing.

• If you want to know more about Sage Accounting Data Automarker then check out AutoMarker - SageQualifications.com. Or drop a line to Tim O’Reilly at tim.oreilly1@sage.com

Objective tests replaced with online assessments — CGMA® Finance Leadership Program.

An ethical puzzle

Try our professional ethics crossword

Read the numbered clues and enter your answers in the crossword below. If the answer is two words, leave an empty box to show the space. For instance, if the answer was ‘professional ethics’ enter your answer like this.

PROFESSIONAL ETHICS

Have fun!

Across

4. Telling someone that you have reported them for a crime.

5. Another word for ethics.

8. Abbreviation for the person in an organisation to whom money laundering should be reported.

11. This crime could include using or concealing stolen money.

14. This threat could occur if you are checking your own work.

15. This threat comes about when someone is pressurising you into doing something you know is wrong.

16. This crime could occur when you are being offered a reward in exchange for carrying out an activity or task.

17. Abbreviation for the government organisation who deal

with serious crime including money laundering.

18. The abbreviation for keeping up-to-date with relevant knowledge at work.

19. Meeting the needs of today without compromising the ability of future generations to meet their needs.

20. This principle includes remaining neutral when carrying out tasks at work and not allowing any bias.

Down

1. The burden of proof in this type of law is judged on a balance of probabilities.

2. Someone who releases confidential information in the public interest.

3. This crime could occur when deliberately falsifying figures in a tax return.

Complete the crossword puzzle below

6. This threat could occur when you are asked to complete a task that you are not competent to do in return for promotion.

7. You are permitted to breach this principle if it is in the public interest to do so.

9. Social, economical and this are the three areas covered by sustainability.

10 The Public Interest ...... Act protects whistle-blowers in qualifying circumstances.

12. This threat could occur when an accountant is seen to promote one client or product over another.

13. This principle requires you to be open and honest in all business activities.

You will get the answers next month.

• Puzzle set by our AAT guru Teresa Clarke FMAAT, who says: “Please don’t forget to check out my workbooks and revision books on my website. All my workbooks are available from Amazon in paperback and as e-Books at very reasonable prices. Find them here – https://www.teresaclarke.co.uk/books/

Welcome to the real NHS

We learn how one Queen Mary University of London graduate benefitted from taking on the challenge of a financial placement with an NHS Trust. You too could get an internship…

Queen Mary University of London’s School of Business and Management has joined forces with the Skills Development Network to offer students the chance to get ‘real life’ experience through a year-long work placement with the biggest employer in Europe.

The Skills Development Network places second year students on accelerated degrees from five London universities with NHS Trusts, with many of the recruits returning to the NHS once they have finished their degree. Here is one graduate’s story.

‘Rewarding and insightful’

Kamerun Miah (pictured), BSc Accounting and Management, worked as a Financial Management Placement Intern at the Royal Marsden NHS Trust. He said...

“I found my placement experience to be incredibly rewarding and insightful. I have learned a great deal about the healthcare sector and how financial management plays a crucial role in ensuring that the NHS can deliver high-quality patient care.

“One of the most valuable lessons has been the importance of effective communication and collaboration. The NHS is a complex organisation with many different departments and stakeholders. I have had to work effectively with others to achieve common goals. I have also learned about the financial challenges facing the NHS and how finance professionals can help to address these issues through careful budgeting, forecasting, and financial analysis.

“Another lesson has been the importance of reviewing VAT in order to ensure compliance with HMRC regulations. This involves understanding the different VAT rates that apply to various goods and services, as well as ensuring that VAT is charged correctly

and accounted for accurately. This can be particularly challenging in the healthcare sector, where there are a range of exempt and zero-rated items that must be carefully monitored to avoid errors.

“I have also gained valuable experience in managing different accounts, including both revenue and capital accounts. This has involved working with finance professionals from different departments and using accounting software to track transactions and reconcile accounts. I have learned about the importance of accurate record-keeping and financial reporting, as well as the need to work collaboratively with colleagues to ensure that budgets are managed effectively.

“I would highly recommend this placement to any accounting and management students who are looking to gain practical experience and make a positive contribution to an organisation that is dedicated to improving patient care. To make your application stand out, make sure that you have a strong academic record, particularly in finance, accounting, and business-related subjects.

Highlight any relevant work experience or extracurricular activities that demonstrate your interest in finance and accounting.

“Finally, be sure to research the NHS and the specific department you are applying to, and tailor your application accordingly to show that you have a good understanding of the organisation and its goals.

“Overall, my finance placement with the NHS has been an excellent opportunity to gain hands-on experience in financial management and learn about the unique challenges facing the healthcare sector. I have developed a range of valuable skills, including attention to detail, analytical thinking, and the ability to work effectively as part of a team.”

Invaluable experience

“It was a privilege to introduce this placement to our students,” said Dr Ishani Chandrasekara, Reader in Accounting and Programme Director BSc Accountancy Flying Start with PwC. “This public sector placement scheme provided several of our high achievers with invaluable experience, which will increase their employability upon graduation. In recent years, it's become more important than ever to complete a placement while studying. Otherwise, students graduate with little to no work experience relevant to their degree. This year-long placement will propel our students ahead in a highly competitive labour market. Our students gained soft skills which will support their future success in the workplace, professional qualifications and technical skills required by the accountancy industry.

“It was inspirational to see students take the initiative to complete this extra year and demonstrate strategic thinking about their futures. This is the kind of commitment that employers want to see from top Russell Group graduates. The placement also allowed students to trial a career in accounting and finance before joining a graduate scheme.

“Placement students were able to grow their professional networks and diversify their social capital through connections made during this year. This reflects the university’s commitment to democratising access to higher education and fast-tracking pathways to professional careers like accounting. Students worked with accountants from junior to senior levels. This experience made our students more wellrounded people.

“I absolutely believe it is worth investing time in doing a year-long paid placement when studying for a degree in accountancy. If you are willing to put the hard work in, it will help you achieve a great career in accounting.”

Dear Karen

Ask PQ’s very own agony aunt Karen Young when you need advice from a real expert. Email your dilemma to graham@ pqmagazine.com, and he will pass on the best ones to Karen

THE DILEMMA

I’m concerned about the threat Artificial Intelligence (AI) might pose to my job – should I be worried?

Where are the Net Zero plans?

Credible Net Zero plans are few and far between among the FTSE 100, says new EY report

Nearly 18 months after the Government’s COP26 pledge that UK listed businesses would be mandated to publish decarbonisation plans by 2023, only 5% of FTSE 100 companies have so far disclosed transition plans that would be deemed ‘credible’ or sufficiently detailed.

EY analysed Net Zero transition plans published by FTSE 100 businesses, as of 31 January 2023, and assessed them against the Transition Plan Taskforce’s (TPT) Draft Disclosure Framework. The Framework, which is set to

In brief

KAREN’S RESPONSE

With the rise of generative AI it’s understandable to wonder about the risk these advancements in technology could have on your job; your concern will be shared by many. However, rather than get caught up in the fear of being replaced by generative AI, it’s beneficial to think about the ways accountants can adapt to, and work alongside, these evolving technologies.

For example, automating repetitive admin tasks can save time, improve efficiency and cut costs. ChatGPT could be used to create more accurate invoices, as AI may be less likely to make mistakes that occur from human error whilst invoicing manually. This freed up accountants to focus on the more complex work that requires analytical and creative thinking: key human elements that, thus far, cannot be replicated by AI.

Whilst knowing how to utilise generative AI has the potential to enhance your career, it’s important to be cautious – do not to assume the results that generative AI produces are correct and always check before trusting them.

Ultimately, to help you feel less threatened by generative AI, ensure your soft skills – communication, interpretation, creative thinking and problem-solving to name a few – are up to scratch, and clearly demonstrate a willingness to adapt to change and learn new things. This will support you despite the technological developments happening in the industry at the time.

• Karen Young is a director at Hays. She is passionate about helping people to find the right job and companies the right person

Time for digital AGMs

Chair of M&S Archie Norman is calling on AGMs to move with the times and go ‘more digital’. He believes a more streamlined approach to shareholder communication will help multinational companies move into the digital age, and be far more inclusive.

Norman has written to the business secretary Kemi Badenoch on behalf of the ‘share your voice’ campaign. He explained the current legislation means ordinary people who have invested in listed companies struggle to hear what they are saying.

He has said that physical AGMs should be ditched in favour of hybrid or digital events, which

be finalised this year following industry consultation, outlines guidance for companies to create decarbonisation plans that can be deemed “credible, useful, and consistent”.

The Treasury’s TPT was announced in November 2021 at COP26, where it was pledged that all UK listed businesses and financial institutions would be required to publish Net Zero transition plans by 2023, although a specific date was not set.

EY’s analysis found that while 78% of FTSE 100 companies have

he believes will encourage real investor participation.

Nightmare on the dance floor

The bosses at the beleaguered tech firm Wandisco were recently forced to quit after an accounts black hole of £93m was uncovered.

Both CEO and CFO left the firm after millions of pounds worth of sales had to be written off following an investigation.

Wandisco said: “The results of the independent investigation to date continue to support the initial view that the irregularities are as a result of the actions of one senior sales employee.”

The Sheffield-based business was eyeing a US listing for its shares.

disclosed partially-developed plans that include public targets to achieve Net Zero emissions by 2050, they have not yet adequately outlined how they will reach these targets, therefore missing key current TPT Framework requirements. Some 17% of FTSE 100 firms are still at the stage of setting targets and are yet to publicly disclose any plans.

EY’s analysis found that more than 80% of FTSE 100 firms have made public commitments to reach Net Zero carbon emissions by 2050.

Momentum stalls

Business efforts to tackle modern day slavery are stalling, according to an analysis of UK government data by the Chartered Institute of Procurement & Supply (CIPS), with the number of modern slavery statements submitted to the government registry for 2022 trailing markedly. Section 54 of the UK’s Modern Slavery Act 2015 requires in-scope organisations, those with a turnover of more than £36 million a year, to publish an annual statement outlining the steps they are taking to address slavery in supply chains. Analysis of the registry by CIPS reveals that 29% of organisations falling within scope of the Modern Slavery Act have yet to submit their slavery statements to the 2022 registry.

The PQ Book Club: books you should read

Speak with Confidence:

Overcome self-doubt, communicate clearly, and inspire your audience, by Mike Acker (Wiley £16.99)

With the PQ magazine awards around the corner, I thought it was time I took a look at what I do. Then Mike Acker’s book landed on my doormat, at exactly the right time. Perhaps I really do want to become a capable and confident speaker who makes an impact!

What our author rightly says is that you are the message. When politicians read a speech, it is often written for them (I never understood that). He also stresses when you are asked to talk, people want to hear from you, not your

slideshow and handouts. If you ever come to hear me speak you will know I don’t do either!

It can be difficult ‘to thine own self be true’ because I am a writer, and speaking, particularly where professional lecturers abound, means I am often not as confident as when I write.

That said, I do really hate those slick presenters who are like snake oil salesman – they would/could sell everything, including their mother! They have no serenity either, but they are very confident. Acker explores all the narcissistic traits – as he says: “Genuine narcissists are pitiful creatures with fragile egos that require constant praise.”

Acker is also right about the most important thing in speaking –the audience. He says ask yourself one question: “What do they really, really want?”

Our author might accuse me of rambling on (a real no-no). So we better stop there.

PQ rating 4/5: Acker really tries to prove that you can do it, no matter what past experience you have had talking to a crowd. A lot of it is all about self-doubt. It’s time to be yourself.

Reviewer: Graham Hambly

Don’t

be fooled again

Accountants were out in force on April Fool’s Day! ACCA tutor Jo Tuffill went overboard and did two! Her first was about the accountancy bodies letting students use ChatGPT as a reference tool during the exam, and her other was a move to increase the

ACCA pass rate from 50% to 51%!

Zoe Whitman and Jo Wood at the Bookkeepers’ podcast turned all their branding blue, despite them loving the pink! The blue was not up for long.

Prize for the most in-depth April

Happy 50th VAT!

Did you know that VAT turned 50 years old on 1 April? It was introduced to replace purchase tax in 1973, which in turn was a 33.3% tax on goods classed as ‘luxury’, introduced in 1940 to discourage waste.

The Association of Taxation Technicians says the ‘baffling’ VAT food and drink rules, which see milkshake powders taxed differently according to their flavour, need reforming. Chocolate flavoured powders attract zero

fool has to go to ‘double re-entry’ Gareth John. He announced he had been chosen to represent the UK in the 2028 joint IFAC and NASA space mission! All on the space ship ‘Auditor’.

The most believable award goes to Tom Clendon, who said he had just had a new tattoo – everyone knows

VAT while strawberry or banana flavoured varieties are subject to the standard rate of 20%. Similarly, savoury popcorn is standard rated, unless it’s microwave corn “sold for popping”, which is VAT zero-rated.

Other confusing examples within the VAT system include:

• Millionaire’s shortcake is zero rated, but shortbread that is wholly or partly chocolate covered is standard rated.

• Flapjacks are zero rated, but cereal and muesli bars are standard rated.

• For soft treats such as marshmallow teacakes or Snowballs, the VAT treatment depends on their shelf life and whether they “harden rapidly” when taken out of the packet.

• Small tubs of bicarbonate of soda for baking are zero rated, but large containers sold for cleaning are standard rated.

• A gingerbread man with chocolate trousers attracts 20% VAT, while it is zero if only his eyes are made from chocolate.

When VAT was introduced in 1973 it was set at 10% and raised £1.5bn. It is now 20% and raises £156bn.

how much our Tom loves SBR.

Laura Day-Henderson wasn’t far behind when she announced that HMRC was making another U-turn and introducing MDT for income tax self-assessment on the 6 April 2023, not 2026.

Well done one and all, sorry if we missed yours.

Everything everywhere at the IRS

Oscar film winner

Everything Everywhere All

At Once follows a ChineseAmerican immigrant Evelyn Quan Wang (played by Michelle Yeoh), who has problems when her laundromat is being audited by the IRS.

At a tense meeting with the IRS’s agent Deidre Beaubeirdre (Jamie Lee Curtis) Evelyn enters the ‘Alphaverse’ and we enter a whole series of new alternative worlds – a visit to the IRS can do that to you.

It all gets a bit weird after that, but hey it’s great fun.

After a wild journey the film ends back at the IRS building, and not giving too much away let’s just say the family successfully refile their taxes. So, it all ends happily ever after – or does it?

The movie has won a whole host of awards, and saw both Yeoh and Lee Curtis picked up Oscars at the 95th Academy Awards.

WE V E G O T T H E L O T ’

Share the love

We are told that the Beatles had it right when they said: “All you need is love.” And up for grabs this month are three copies of ‘Share the Love’ adult colouring books. As you colour there is a famous quote all about love to enjoy. One example: “Love doesn’t make the world go round, love is what makes the ride worthwhile”.

Sweet… There are 30 lovely images waiting to become stunning masterpieces under your artistic hand. To be in with a chance of being sent one of our three copies simply email us at giveaways@pqmagazine.com with your name and address and we will put you in the hat for a chance to win this prize. Head up your email ‘Share the Love’.

Think you know it all?

Right, can you name all seven dwarves? Could you identify all of Shakespeare’s plays? If you think you know it all then this activity book will put your wits and your memory to the test. With space to scribble your answers, ‘Think You Know It All’ offers hours of mental simulation to entertain and tax your brain in equal measure. We have the revised and updated book to give away this month.

To win one of our three copies of ‘Think You Know It All’ by Dan Smith then send an email headed ‘I know it all’ to giveaways@ pqmagazine.com, along with your name and addresss.

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 19 May 2023. The main draw will take place on Monday 22 May 2023.