PQ magazine, November 2023 by PQ magazine

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November 2023

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ARE YOU JUST A HUMAN CALCULATOR MACHINE? Many young accountancy professionals feel undervalued and are struggling to cope with their poor work-life balance, according to new research from AccountsIQ. It means more than a third (39%) of these young professionals have taken time off because of stress, even though they are no more than three years into their accountancy careers. Among those surveyed for ‘Confessions of the finance function’ report, some 82% said working in the sector has caused some negative impact on their life, including their mental health. Sleep was hard to come by for 38% of young professionals, with 27% saying they didn’t have time looking after their physical fitness and 22% admitting they had a poor

diet. The stress of work has also affected one in five’s (19%) family relationships. One in three (34%) of those surveyed said work stress was affecting their mental health. The sense of being undervalued may shock some bosses. Some 94% of young professionals said they feel undervalued in some way. The top three gripes here are being underpaid, a lack of recognition for their work, and being made to do repetitive tasks that they feel overqualified for. Despite being ambitious, some young professionals also expressed concern about the burden of high expectations. The worry is only 22% of senior finance professionals believe their younger counterparts possess both exceptional skills and

a strong work ethic. Despite these issues, 77% of young professionals said they genuinely enjoyed working in their finance team, but just 58% said they ‘found meaning’ in their current role. AccountsIQ COO Darren Cran, said: “It is clear that with so many finance professionals taking time off for stress, businesses must ensure they do not fall into the trap of regarding the finance team as human calculator machine.” He added: “Finance leaders must wake up to the reality that the job is impacting their colleagues’ sleep, metal wellbeing and even diet.” Check out AccountQI’s ‘Confessions of the finance function’ at https://tinyurl.com/3c9rzvh6

Darren Cran

OUR SUSTAINABLE FUTURE IS BEING LOST Inaction means the world is on track to meet only 12% of its Sustainable Development targets by 2030, and a group of leading accountancy and finance bodies have banded together to urge the UK government to take ‘transformative action’. There are 17 UN Sustainable Development Goals (SDGs), which cover areas including social inequality, innovation, sustainable consumption, peace and justice. As is often pointed out, the goals

are interconnected, and often the key to success for one will involve tackling issues more commonly associated with another. In all, 11 accountancy and finance bodies, which include the ICAEW, CIPFA, AIA and ICAS, have written an open letter to the UK PM Rishi Sunak explaining we are currently on track to meet miss those 2030

targets by a very long way. The UK is on course to meet just 17% of targets, and the letter rightly points out that it is developing countries that are bearing the brunt of our collective

failure. The letter also stresses the importance of sticking to domestic net zero commitments,

with a clear policy framework to help businesses accelerate innovation and investment. The bodies stressed: “The science shows us that, not only are we failing to collectively tackle the climate and nature crises, but inequalities are also growing at an alarming rate. This isn’t just a crisis of people and planet, it’s a crisis of our economies and global financial system.” You can read more inside, including that letter in full.

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• Corporate Social Responsibility (CSR) for SMEs – diversity, inclusion & wellness Vicki Stylianou, IPA Group Executive, Advocacy and Policy • Overcoming the perceived barriers to outsourcing and using it as an operational lever to drive profitability and growth Robert Grant, Head of Customer Experience – UK and Ireland, Initor-Global • Emerging technologies and the impact AI is having on accountants in business and practice globally Shelsea Adrian, Product Evangelist UKI & EMEA, Yooz • Managing employee investigations, what clients need to think about and act upon when discovering suspected fraud Arun Chauhan, Solicitor & Founder, Tenet

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contents

November 2023

IN THIS ISSUE A note from the Editor Well, here’s our 251st issue for you! Thanks a million for all the kind words of encouragement in the 250th, it is nice to be so trusted and treasured. We have lots of news for you this month, as always. AAT has got its student advisory groups up and running, ACCA has unveiled some new PER rules and CIMA has announced a tie-up with wellbeing charity Student Minds. We know many of you are feeling undervalued and are struggling to cope with your work-life-study balance. Our lead story this month shows there is a worrying disconnect between you and many of your employers when it comes to having a strong work ethic. Basically, many employers don’t think you have one! And, as Darren Cran says in the story, finance teams should not simply be regarded as “human calculator machines”. We also have some great speakers lined up for our free seminar ‘The Ethical Accountant – how do we create the honest accountant?’ on 25 October. Mardi McBrien from the IFRS will be there along with Professor Atul K Shah, to name just two of our top speakers. There’s still time to sign up at https://tinyurl.com/yynetj8e. Oh, and to any of you entrepreneurs out there don’t forget to sign up to the London Business Show 2023, which takes place on 22 and 23 November at ExCel – go to https://www.greatbritishbusinessshow.co.uk/. Graham Hambly, Editor and Publisher, PQ magazine News 4 FRC audit initiative The UK and New Zealand agree to recognise each other’s audit qualifications 5

Big 4 cutting jobs Deloitte, EY and KPMG all announce redundancies

CIMA wellbeing initiative Institute to team up with Student Minds to help students’ mental health

CIPFA CEO to depart Rob Whiteman set to leave his role in June 2024

Sustainability ICAEW less than impressed with some of the FRC’s latest proposals

10 Financial help at hand caba wants to help you with your financial ‘health’ 12 Tech news Britain lags behind competitors in creating blockchain-related jobs

multi-task. Plus our social media round-up 16 Artificial intelligence Will generative AI tools transform or destroy your job prospects? 19 Climate call Accounting bodies call for more action to meet the UN Sustainable Development Goals 21 Soft skills matter How to strike a balance between developing your hard and soft skills 22 It’s showtime! We preview of the London Business Show 2023, which takes place in November 24 Practical advice for ACCAs ACCA has changed some of its PER requirements – so here’s what you need to know 25 Tax reform Our current tax system is in need of radical reform, says the IFS’ Helen Miller 26 A question for Tom Top tutor Tom Clendon explains the concept of non-controlling interest 27 CIMA spotlight Learning the difference between a strong answer and a weak one 28 Celebrating 40 years Ideal Schools celebrates four decades of academic excellence

29 ACCA spotlight Having ethics at the heart of the ACCA qualification is of paramount importance 31 IFA spotlight Accountants need to be steadfast in their determination to do the right thing 32 AAT Level 2 Everything you need to know about the suspense account 34p22 AAT apprenticeships Rachel Spence shares her experience of qualifying via the AAT apprenticeship route 35 Careers UK directors clamber aboard the gravy train; our Agony Aunt tackles a workplace conundrum; and our Book Club review 36 Fun The lighter side of life – and accountancy The columnists Lisa Nelson When it comes to learning, the pause really matters 4 Robert Bruce Financial expertise in short supply in Parliament 6 Prem Sikka Why was a collapsing Wilko still paying dividends 8 Anna Kate Phelan Meta is seeing the world through your eyes 10 David Rothera Achieving net zero, one step at a time 12

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Features, etc 14 Have your say Why young accountants deserve more pay; and women really can

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LISA NELSON

Why the pause matters

Let me start with a confession: what I’m about to describe could have been me as a student of accountancy. My tutor has explained a topic using an excellent worked example then asks, “Does that make sense, any questions?” They pause, I say nothing, there’s a deafening silence and it starts to feel uncomfortable. After what seems like five minutes the tutor says, “Good, if there are no questions, let’s move on.” Although everyone is relieved, this was a missed learning opportunity. In reality, the pause was nowhere near five minutes, it just felt like it. Research carried out in the 1970s by Mary Budd Rowe identified the average length of a pause is around 0.9 seconds! More importantly, she discovered that in order to have a positive impact on learning, the pause should be over three seconds. There are, of course, good reasons why tutors don’t pause for long – learners seem happier, they don’t want to lose the class because of the silence and to maintain engagement with the lesson they want it to be relatively fast-paced. But here’s the problem – if the pause is too short, learners don’t have sufficient time to absorb, manipulate and organise the information to answer the question, resulting in sub-optimal learning. So, next time you are in class don’t be afraid to ask for a little more time to think, or if there’s a pause, fill it by reflecting on what you have just learned. Make the most of the silence. Lisa Nelson is Director of Learning at Kaplan

Have audit qualification will travel In a ‘first-of-its-kind’ agreement the UK and New Zealand have agreed to recognise the audit qualifications of the other country. This should mean auditors can now work between both countries much more easily. The Memorandum of Understanding on Reciprocal Arrangements (MOURA) was signed by the UK’s Financial Reporting Council (FRC) and the NZ Financial Markets Authority (FMA) – the competent audit authorities for each country. The UK and New Zealand signed a free trade agreement in February 2022, which included an annex on recognition of professional

qualifications, encouraging regulators to establish routes to recognition and remove costly and burdensome requirements. The FRC is currently exploring similar arrangements with other countries that are important markets to the UK, to further widen the audit talent pool, subject to thorough assessments of the qualifications. The FRC’s Acting CEO and Executive Director of Supervision, Sarah Rapson (pictured), said: “The FRC welcomes this first-of-itskind agreement which will attract auditors to the UK, strengthen audit relations between the UK and NZ and support the Government’s

commitment to recognise professional qualifications internationally. “It ensures a more efficient pathway for senior auditors to work in both countries, boosting access to a wider pool of auditors, while upholding the high professional standards expected of auditors.”

Time to evolve the ACA qualification ICAEW PQs are being asked how they would change the ACA qualification. The institute is currently conducting a consultation with students, members and employers about the evolution of the qualification. It said the insight generated from stakeholders should help it “better understand developments in the workplace and profession, and how these should be reflected in the ACA”. ICAEW said over recent years

it has introduced a number of innovations, including:

• The implementation of technology into the qualification, including the use of workplace data analytics software in exams. • Embedding sustainability through the qualification. ICAEW MD Education and Training, Will Holt (pictured), said there are some big changes and evolutions happening across the profession and the workplace. He felt it was important ICAEW hears everyone’s views on these changes, so they are reflected into the future ACA qualification.

Thousands overcharged on student loans Thousands of graduates have been overcharged on their student loan repayments because of payroll software failures, according to the Daily Telegraph. The newspaper said around £1.6 million was taken from 16,000 workers – that equates to around £104 each. Those

affected are graduates who operate as a sole trader and claim benefits in kind or anyone earning over £100,000. HMRC is now writing to those affected. The Telegraph estimated that those who began their course in the 2022/23 academic year will leave with a degree and average debt of £45,600.

invited. You had to have joined CIMA after 1 October 2022, said the apology.

sector awards for Accountancy and Actuarial. Over 70,000 students applied to 1,618 graduate and 175 school leaver places at PwC, with the firm recently welcoming its latest cohort. Last month PwC announced it would honour offers made to students joining the firm as school and college leaver apprentices, regardless of their final A-level results, and earlier in the summer reassured university students that marking delays would not impact

In brief New Member celebration confusion Some new CIMA members have been less than impressed by the timing of the New Members’ Celebrations’! The one in central London is due to take place on Wednesday 1 November. “When we are drowning in month end,” said one NQ. However, the annoyance for some didn’t end there, as CIMA had to send out a quick apology to some members because only the most recent new members were 4

PwC top graduate employer PwC has been voted the UK’s number-one graduate employer in The Times Top 100 Graduate Employers survey 2023. The ranking is based on interviews with over 13,000 final year students at 32 universities across the UK. The firm also won first place

their ability to start their graduate jobs. Compromising at work The largest survey of Black British people has found that 98% of participants have had to compromise who they are or how they express themselves to fit in the workplace, including adapting hairstyles. Appearance and cultural background are cited as factors influencing lack of promotion or opportunities to develop at work. PQ Magazine November 2023

news PQ

Big 4 job cuts The pandemic hiring boom at the Big 4 accountancy firms appears to be over in the UK, with at least three of the four now planning sizeable job cuts and redeployments. Deloitte, EY and KPMG are cutting jobs by 3%, 5% and 2.3% respectively, and

wellbeing charity caba said the redundancies mean many accountants will be feeling anxious because of the uncertainties, and worried about the future. Caba’s Paul Guess, a wellbeing expert, said: “It is important to give yourself time to process how you feel about the changes. While redundancies may feel

personal, it is important to acknowledge that they rarely are. Sharing these thoughts and feelings with friends or family could allow you to process your emotions and accept the new circumstances.” He stressed you need to have a clear plan of action for what you are going to do next, as this can really help you turn the situation around. Financial worries can be a real concern too, and Guess says you must take ownership and create a budget. If you’re worried about your finances, caba has a range of financial service tools and resources to help you cope with redundancy.

In search of the Ethical Accountant – your free seminar The PQ magazine team and a whole list of guests will be descending on Queen Mary University of London on Wednesday 25 October to discuss how the professional bodies create the Ethical Accountant! The speakers on the night include Mardi McBrien, Director of Strategic Alliances, IFRS

PQ Magazine November 2023

Foundation; Professor Atul K Shah, founder and CEO of Diverse Ethics; and CIPFA’s Iain Murray, who has worked at both Grant Thornton and the Audit Commission. The event starts at 6pm sharp, but there is time for networking and something to eat before it all kicks off, with doors opening around 5.30pm.

It’s not too late to sign up for your free ticket, and we would love to see you there – go to https://tinyurl.com/yynetj8e.

UA92 approved as AAT training provider AAT has approved United Academy 92 (UA92) as the UK’s first higher education institution to become an AAT training provider. UA92 is a groundbreaking higher education institution co-founded by the Class of ’92 and Lancaster University. Based in Old Trafford, Manchester, with a new Business School in the centre of Manchester due to open in September, UA92 is committed to making higher education accessible to all no matter their background, through its founding principles of accessibility, social mobility and inclusivity. Learners on UA92’s accounting degree will have AAT Level 2 and Level 3 Bookkeeping qualifications embedded into their studies, making students more employable and ready for the world of work upon graduation. This follows UA92 initially opening as an assessment centre for AAT qualifications this summer.

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ROBERT BRUCE Where’s the financial expertise? As we head towards a general election there is one priority that we should all support. There is, and always has been, a desperate need for MPs who have some clue about things like accounting, tax, corporate governance and financial reporting. I find it astonishing that the membership of the main legislative house in this country and the main revising house have so little in the way of informed and knowledgeable membership. For years the number of accountants, tax people and others from our world who are MPs and so can directly attempt to influence some of the nonsense foisted upon us by the ignorant are amazingly few. Invariably, when you analyse the new intake of MPs after a general election you find that less than 5% are what you might classify as informed financial folk. And the members of the House of Lord’s with a similar range of expertise and knowledge is mostly made up of people who joined up because they wanted to help but then, after making a sensible and sincere effort, gave up in the face of ignorance or governments with no interest in such change. So what is needed is a phalanx of financially-minded MPs to actively encourage the accounting world to sneak expertise onto the committees that select election candidates. Once aboard they can make the case for an expansion of proper financial understanding to underpin a mass of sensible legislation, rather than the nonsense we currently get.

CIMA puts wellbeing first CIMA & AICPA are stepping up efforts to provide additional wellbeing support for its UK students, and has announced it will be working with the mental health charity Student Minds. PQs will be able to contact the AICPA & CIMA customer service team or refer to the website to be directed to relevant Student Minds and Student Space materials and resources. Student Minds was started in 2009 and was originally aimed predominantly at university students, but has broadened its scope to include those studying towards professional qualifications

and taking alternate routes into higher education. CIMA said: “Together, we can help ensure that no student is held back by their mental health.” To find out more about Student Minds visit studentminds. org.uk, or if you need mental health support and advice go to studentspace.org.uk Student Minds recently launched

its new university mental health community – the Student Minds’ Hub. The Hub is a place where students can find community, engage with training and resources, and find out how their university can put student mental health first. Student Minds explained: “We are here to empower students to find the tools, insights and information that they need.”

ACCA PER changes All ACCA PQs signing off their practical experience requirements (PER) must now sign a strict liability clause. This is among the changes made to the PER in late summer. Moving forward, all students must confirm that their PER is a true and accurate representation of their own work. Supervisors will have to complete the liability clause when signing off the PER. They will also have to upload a copy of their membership

certificate or other evidence of their IFAC membership. The association has embedded sustainability into its strategy and innovation performance objectives. Additional examples of activities of sustainable value creation have been included in the advice, to help trainees to demonstrate their achievement of this performance objective. The need for individual elements to be signed off has been removed;

only the full objectives will need to be sent to the supervisor. • For more read our in-depth article on the changes on page 24.

Time to crow

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

Crowe UK took on record numbers of new trainees this year. Crowe appointed 45 PQs in January and 120 in September 2023. It will be looking for another 50-60 in January 2024. Here they are with Faisal Khan, national strategic head

of business and marketing. He gave them his insight on the importance of business development, marketing, and personal brand. As partner Vincent Marke points out, they may need a bigger room next year!

attracted 536 graduates and 99 school leavers. The rest of the trainee intake was largely made up by paid placements. The lion’s share of trainees will be based outside London, throughout the firm’s network of 31 offices stretching from Southampton to Aberdeen. Some 188 will be based in London. The firm’s audit practice has recruited the single largest group of trainees – 419 in total.

softer skills? Well, the interim MD for accountancy at IRIS, Karen Williams, is unsure. She is worried that today’s tech-savvy accountants progress quickly up the career ladder but lack the essential people skills needed to retain clients. She warns PQs that having data analytical know-how and being able to utilise AI and machine learning are key for a successful career. But if you neglect your soft skillset, it will hinder career opportunities and long-term success. Check out what she has to say on page 21.

In brief FRC issues FRED 84 The FRC has issued FRED 84 Draft amendments to FRS 102 The Financial Reporting Standard, applicable in the UK and Republic of Ireland. The amendments cover supplier finance arrangements, proposing to introduce new disclosure requirements. These would provide users of financial statements with additional information about an entity’s use of supplier finance arrangements and the effect of such arrangements on the entity’s financial position and cash flows. Comments on FRED 84 are 6

requested by 31 December 2023. The FRC expects to finalise the proposed amendments in the first half of 2024, alongside the amendments arising from the current periodic review of FRS 102 and other FRSs. RSM UK record trainee intake RSM UK has recruited a record high of 769 new students across the UK in 2023, surpassing its previous record intake in 2022 (723) by 6%, as the firm continues to invest in its long-term growth plans. Among the new trainees, RSM

You need soft skills too Are the professional bodies doing enough to help their students develop those essential

PQ Magazine November 2023

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PREM SIKKA

Rob Whiteman to retire The divis that did for Wilko

The collapse of Wilko has resulted in the closure of 400 shops and loss of 12,500 jobs. Plenty of attention has been focused on management’s failure to have the appropriate product mix and inability to meet the challenge from rivals such as Savers, B&M, Home Bargains and Poundland. Two aspects of the company’s financial management and reporting stand out. Firstly, its defined benefit pension scheme has a deficit of £76m. Around £20m could be recovered from crystallisation of the scheme’s security over a number of freehold properties and a distribution centre. That would leave a hole of £56m. As an unsecured creditor the scheme will recover little. In principle, the Pension Protection Fund could rescue the scheme but that will be restricted to a maximum of 90%. So, employees will lose some of their pension rights despite paying all of the required contributions. Secondly, rather than repairing the pension scheme, directors paid dividends – £77m in the last decade. During the financial year ended 31 January 2022 Wilko made a pre-tax loss of £38.7m. Yet directors paid a £3m dividend even though the company was haemorrhaging cash and creditors were reluctant to grant credit. In January 2023, the company secured a £40m loan to enable it to survive. Attention also needs to focus on auditors who continued to issue unqualified audit reports. In view of the cash crunch and creditor reluctance to grant credit, how did the auditors satisfy themselves that after paying dividends the company would remain a going concern? Prem Sikka is Emeritus Professor of Accounting at the University of Essex

Rob Whiteman (pictured) has announced his plans to retire in June 2024, stepping down from the role of CIPFA CEO that he has held for the past decade. Work to find a successor will begin immediately, with a recruitment agency having been appointed to lead the search for a new chief executive. His previous CEO roles include the UK Border Agency, the Improvement & Development Agency (IDeA) and London Borough of Barking & Dagenham, which in 2008 achieved ‘Most improved council of the year’

award under his leadership. Whiteman said: “I would like to thank members and those involved in CIPFA’s governance for their support in delivering such considerable change. We are a modern and effective organisation with a sound financial platform and strong policy voice that has fused our charitable objectives with commercial growth. “It’s never an easy decision, but the time feels right for me now to retire as a CEO and concentrate on making a contribution in a different way through a portfolio. And a little more time for myself and the

family will be nice, too.” He added: “I’m sure CIPFA’s best years lie ahead, and I look forward to seeing it go from success to success, not least by building on our new partnership with ICAEW.”

AAT annual report out It was a busy year for AAT. It refreshed its brand, introduced its new Q2022 qualification and launched a whole new strategy plan for 2030. The annual report (to the year ended 31 March 2023) is out, and shows a surplus of £3.2 million. That was on a turnover of £32.5 million, with student and affiliate members’ fees bringing in £8.7 million and assessments a further £12.7 million. The AAT grew its professional and affiliate membership to 55,719,

which represents the highest population since 2018-19. Students are not included in these numbers as AAT has introduced a qualification fee for Qualification 2022. The annual report shows 34,272 new students on the books, but the sharp rise is in part explained by counting students on the AQ2016 standard registering for the new Q2022 assessments as well. Check out the annual report at https://tinyurl.com/3pu6xejc.

IASB amends IFRS for SMEs The International Accounting Standards Board (IASB) has issued amendments to the IFRS for SMEs Accounting Standard - the standard for companies that do not have public accountability. The amendments are: • Provide a temporary relief from accounting for deferred taxes arising from the implementation of the Pillar Two model rules. • Clarify that the Standard requires companies that apply the

Standard to disclose information that enables users of their financial

statements to evaluate the nature and financial effect of income tax consequences of the Pillar Two legislation. Andreas Barckow, Chair of the IASB (pictured), said: “This amendment aims to provide SMEs that may be subject to Pillar Two model rules with the same temporary relief that is granted to companies applying full IFRS Accounting Standards, while ensuring that users of SMEs’ financial reports receive the information they need.”

Tax briefs Logans win damages over avoidance claims TV presenter Gabby Logan and her husband Kenny have received substantial damages (a six-figure sum) over claims by the Mail Online that they had been paid £500,000 to promote a tax avoidance scheme to celebrity friends. The story first appeared online in February and the Logans threatened to sue the Mail over the stories. The couple also received 8

damages from an accountant who was quoted in the story and former Sun editor Kelvin Mackenzie. The sweet taste of tax The House of Lords brings many perks, but one thing it can’t help peers with is tax avoidance, as Lord Sugar recently found out to his cost! Lord Sugar has been living in Australia, and thought he had escaped a £186 million tax bill. But despite being a non-resident he is

still a Lord and therefore what he pays is stipulated in the Constitutional Reform and Governance Act 2010. Members of both houses of parliament are automatically deemed to be UK resident and liable for income tax, inheritance tax and capital gains tax. ISAs have become a tax planning tool for wealthy ISAs have become a tool for tax planning for the wealthy, so they

are on Richard Murphy’s list of proposed tax changes that will form his Taxing Wealth Report 2024. Murphy, who is Professor of Practice in International Political Economy, City, University of London has suggested that a lifetime limit on ISA contributions of £100,000 be set and that ISA tax relief should be withdrawn from those who have more than £200,000 in such accounts. He said the total tax raised might be £100 million a year. PQ Magazine November 2023

news the PQ

AAT is listening

Where is the sustainability? ICAEW seems less than impressed with the Financial Reporting Council’s consultation on the Corporate Governance Code. The institute said the UK is “in real danger of losing its global reputation for best practice in corporate governance.” ICAEW explained that the current proposals omit major aspects of

PQ Magazine November 2023

the new G20/OECD Principles for Corporate Governance, such as sustainability and the need for companies to have ethics and compliance programmes. This represents a potential missed opportunity, ICAEW said. However, plans to put director accountability and audit committees at the heart

of governance reforms were welcomed by the institute. ICAEW’s Peter van Veen said: “We would have liked to have seen a more joined-up review of the Code and associated guidance as that would have given a clearer picture of what the proposed changes are likely to mean in practice.”

AAT’s Student Advisory Groups are now up and running. Online meetings were recently held with Level 2, Level 3 and Level 4 students. AAT sees these student volunteers as playing a key role in shaping how it develops over the next year and beyond. The groups will meet four times a year, with a face-to-face meeting being planned for June next year. The aim is to build a strong, supportive student community, and create a real voice for students within AAT. If the first meetings are anything to go by this will be achieved! The initial discussions were wide ranging, covering everything from learning the new language of finance and double entry bookkeeping to looking at the need to grow ‘power’ skills (some call them softer skills). AAT has also launched Advisory Groups for training providers and employers in order to gather their views and feedback.

PQ news the

ANNA KATE PHELAN Meta sees the world through your eyes

Meta have just launched smart glasses with built-in AI. The glasses utilise Meta’s AI as an assistant to translate languages, recognise and search for information about the world around them, stream video live to Facebook and Instagram via voice command, and so much more. Meta’s aim is to make the use of these glasses as ubiquitous as the smartphone, and in the vein of the iPhone it’s betting on style as well as substance to do it – the smart glasses have been built in partnership with Ray-Ban. Zuckerberg’s ultimate goal is a future where holograms project from the glasses and AI will continually learn from your surroundings and assist you in everyday activities. The previous iteration of the smart glasses didn’t get the best reception with the public. The glasses only sold 300,000 units, with only 1 in 10 users continuing to use the glasses today. Users were disappointed by the lack of live video streaming, which this new model has as standard, so we shall see if this iteration proves more popular. While these glasses are undeniably cool and I personally can’t wait to get my mitts on them, there are concerning ethical considerations. This new piece of kit could be seen as the latest escalation by powerful tech companies to capture as much of our focus as possible. Many people already find it difficult enough to put down their smartphone; my hope is that this latest development gets the balance right between enhancement and encroachment. Anna Kate Phelan is Head of Product at Eintech

Finance wellbeing podcast launched A new financial health podcast series aimed at young accountants has been launched by occupational wellbeing accountancy charity caba. It follows the publication of a new study which discovered that half (49%) of young accountants say that they regularly worry about their personal finances (the most of any group), and one in 10 say they are worried about debt. The podcast forms part of a wider financial health campaign for young accountants, which includes online help content and tools from its financial experts.

AccelerAATe wins top award AAT recently won the ‘Best Event on a Shoestring’ at the Memcom Group Awards for its AccelerAATe Student Conference 2022. AcceleraAATe was AATs firstever free-to-attend online student conference, and it was also shortlisted for Study Resource of the Year at the PQ magazine awards in April. The conference was created to support students who were struggling to complete

their qualifications following the Covid-19 pandemic, and provide them with motivation and guidance. It included online webinars covering key subjects such as study support, assessment tips and career advice, with session timings to fit students’ schedules. The conference was a huge success, with over 10,000 registrations and overwhelmingly positive feedback from students

who attended. It is now a flagship event in the AAT calendar, with the next one set to take place in 2024.

Charges brought over Patisserie Valerie collapse The Serious Fraud Office (SFO) has brought fraud charges against four individuals, including a former director, who oversaw the financial failure of a chain of almost 200 high street bakeries. The SFO has charged former director and Chief Financial Officer of Patisserie Holdings Plc for 12 years, Christopher Marsh, and his wife, accountant Louise Marsh, as well as Financial Controller Pritesh Mistry and financial consultant Nileshkumar

Deloitte UK financials are in Deloitte’s UK FY23 results are in, and revenue was up 14% to £5.6 billion (for the year ended 31 May 2023). The rise was attributed to buoyant markets in the first half of the year, which drove growth across audit and assurance (up 20%) and consulting (up 16%). In FY23 Deloitte hired over 6,800 new staff, including 2,767 graduates, apprentices and interns. Deloitte’s 714 equity partners received £1,060,000 in ‘profit’ from the £756 million profit pot. Deloitte CEO Richard Houston said: “Our people and partners have worked incredibly hard to deliver another strong year, amid a complex and changing economic landscape.” 10

Each episode will focus on a different topic around the theme of financial health such as savings, budgeting and debt management. The podcast series will be hosted by social media star Gabriel Nussbaum (aka That Money Guy), who’s known for his personal

finance content on TikTok where he has over 1.3 million followers. Two episodes are available to listen to now via all major podcast platforms and The Cash Conversation hub on the caba website: • How to save like a pro (with caba wellbeing expert Paul Guess and award-winning financial journalist Iona Bain). • What you need to know about debt (with caba financial expert Paul Day and accountant/TikToker Timothy Paul). New episodes will be released at the same time every monthly.

Lad. All four suspects were served with charges at their homes. The SFO opened a full investigation into the conduct, codenamed ‘Operation Venom’,

Fight harder to save planet The world is falling dangerously short of the ambition that is needed to secure a safe future climate, according to new analysis by PwC, and as a result we need to fight to prevent every fraction of a degree of warming. PwC’s latest Net Zero Economy Index shows that a year-on-year decarbonisation rate of 17.2% (up from 15.2% last year) is now required to limit global warming to 1.5°C above pre-industrial levels – seven times greater than what was achieved over the past year (2.5%) and 12 times faster than the global average (1.4%) over the past two decades. The Index provides a stark illustration of the growing divergence between the global ambition to tackle climate change and the reality of current progress.

in October 2018. This came two days after the company abruptly suspended trading, closing 70 stores and causing the loss of over 900 jobs across the country when its debts were revealed. The SFO has charged all four suspects with conspiring to inflate the cash in Patisserie Holdings’ balance sheets and annual reports from 2015 to 2018, and with providing false documentation to the company’s auditors.

Brand boycott over greenwashing Over half (54%) of UK consumers say that they would stop buying from a company if they were found to have been misleading in their sustainability claims, new research from KPMG has found. KPMG surveyed over 2,000 adults on their thoughts around green and sustainable products and technologies, to understand how they influence decisions and whether misleading practices – such as greenwashing – were having an impact. The findings highlight that greenwashing is widely recognised by consumers, with almost half (45%) stating they had heard of the term, with words such as ‘fake’, ‘lying’, ‘exaggerating’, ‘dubious’ and ‘misleading’ all commonly being used unprompted to explain what the term means. PQ Magazine November 2023

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PQ tech the news

DAVID ROTHERA

A stepby-step approach to net zero

Feeling lost in the midst of all this carbon talk and conflicting advice? You're not alone. If you're an accountancy business looking to make a real difference in the fight against climate change it's essential to start with something fundamental: calculating your carbon footprint. This is like marking the starting line for your sustainability journey, giving you a clear benchmark for all your future efforts. Once you've got a handle on your footprint, the next step is to set sciencebased targets. These targets should align with current climate science and global goals, giving your efforts a clear and meaningful direction. This is a pledge to not only reduce your own emissions but also to offset or capture emissions that can't be eliminated. Carbon credits can be a powerful tool, but you’ve got to use them wisely. Firstly, make sure the credits you're investing align with your business values and goals. Secondly, when you're communicating about your footprint, targets and plans, keep them separate from any information about your carbon credits. And, lastly, remember that buying carbon credits doesn't mean your business or product is off the hook for climate impact. They're an additional step, not a magic eraser. By understanding and calculating your carbon footprint, setting solid goals, committing to net zero and carefully choosing the right carbon credits, you're not only contributing to a global movement against climate change but also positioning your business as a leader in sustainability. It's a win-win for the planet and your reputation. David Rothera is Climate Project Manager at Net Zero Now

UK falling behind on blockchain Britain is lagging behind its competitors in securing blockchain related jobs, and has fallen behind Germany, the US, Spain and India. In the first quarter of 2023, out of around 90,000 jobs created globally in blockchain and Web3 the UK ranked at number 12, securing only 2,000 of these. Parliament has launched a new Parliamentary Group for Blockchain Technologies chaired by Natalie Elphicke MP, and she recently addressed a gathering of 51 nations in the metaverse as a

unique avatar (pictured), setting out the opportunities for the UK blockchain and Web3 industries. She explained: “Web3 represents a paradigm shift that reimagines the very fabric of the internet. It is unquestionable that our world is being tokenised. From real estate to precious metals, from arts and collectibles to education credentials, from stocks and bonds to carbon credits and energy tokens, the physical assets are getting tokenised, and this trend will only grow from here.”

Elphicke said that “the UK has the potential to become a blockchain enabled ‘Smart Country’ for digital government, citizens, and public services. ”

Sage and Swoop create global partnership Sage and joined forces with Swoop, the fintech funding company, to help businesses and accountants access a wider range of funding opportunities. The global partnership will also help to identify where companies can reduce business costs, in areas such as energy, banking and foreign exchange. The partnership brings a wide range of funding opportunities for businesses, including grants, loans, and equity investments, while at the same time streamlining the application and approval process.

Chip Mahan (left) Micheál Martin and Andrea Reynolds Sage’s Chip Mahan said: “In a world full of fluctuations, with inflation and interest rates on the rise, businesses are facing

unprecedented challenges, so it is important to make business finance more accessible and less daunting.” Swoop CEO Andrea Reynolds said: “Together we will simplify the path to financial empowerment for businesses of all sizes.” Meanwhile Ireland’s deputy prime minister, Micheál Martin, said: “The innovative combination of the advanced technology platform of Swoop combined with Sage’s globally recognised cloud-based accounting software will provide great assistance to company leaders as they look to funding options.”

Your new practice management tool QuickBooks has launched its new Practice Manager product for accountants – which was previewed at QBC earlier this year. QuickBooks Practice Manager centralises client records to help streamline workflows and reduce admin by automating tasks, which in turn helps users manage workloads regardless of the financial management software that clients use.

The new tool allows users to autogenerate to-do lists for recurring tasks and workflows, auto-assign work to team members, automate emails to clients and set client reminders based on tasks. Nick Williams, UK Product Director at Intuit QuickBooks, said: “We developed QuickBooks Practice Manager with the core idea of saving time for accountants. We’re really keen to give them the space

responses from ACCA members across the globe – noted that financial professionals still see the main benefit of technology as offering efficiency/process improvements: 52% ranked efficiency, internal process optimisation or cost savings in their top three objectives when adopting a new technology.

World of Warcraft, looks set to get UK competition regulatory approval. Earlier this year the Competition and Markets Authority blocked Microsoft from acquiring the whole of Activision due to concerns that the deal would harm competition in cloud gaming in the UK. Microsoft has now submitted a restructured transaction. Under the new deal Activision will be sold to an independent third party, UbiSoft Entertainment SA. And, in contrast to the original deal, Microsoft will

and energy to focus on the client advisory work, which is what many of them got into accountancy for in the first place.”

Tech briefs Embracing AI Financial professionals share a sense of optimism about digital transformation, including artificial intelligence. A recent survey among members of ACCA highlighted a range of key organisational benefits in adopting digital technologies, including flexibility and adaptability, quality of products and services, sustainability performance, transparency and regulatory compliance (72%). However, The Digital Horizons survey – which garnered 1,074 12

Microsoft to get its way Microsoft’s £54 billion deal to buy Activision Blizzard, the maker of games such as Call of Duty and

no longer control cloud gaming rights for Activision’s content. Too hot to handle? Owners of Apple’s new iPhone 15 Pro and the larger Pro Max have been on social media complaining that the devices are getting too hot to hold. The phones are encased in ‘space age’ titanium, but users say they heat up even when not in use. Experts have suggested you should not hold them when they are charging. PQ Magazine November 2023

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professions. Auditing has not I can understand why Grant been able to keep up, and you Thornton want to bust some of covered this a few months back. Welcome to your PQ magazine, the myths about accountancy When FRC head Ian Du Plessis issue number 251! Last month’s (PQ, October ’23), but it is going has to call out the Big 4 for not magazine was our 250th issue We need to see our papers after correction. to be hard to change the idea paying its juniors enough you (you might have noticed us exam papers! Meanwhile, for students it means that accountants do not sit at know there are problems. blowing our own trumpet, with First of all, I’d like to thank you re-doing papers once, twice or The announcement of a their desks all day – because Try living on the money these other people helping), and we guys for this amazing monthly even more times before passing. new CIPFA and ICAEW dual that is mainly what we do! firms pay in London. Starting got lots of nice comments on magazine, so interesting and To cut it short, I would be qualification got lots of people I know some people go out salaries at many firms in just LinkedIn. enriching. grateful if PQ magazine could look talking. on audits, but that just means £30,000 a year. Have you seen Pantelis Fouli from Cyprus I have to agree with the student at a way we could see our papers. Since 2021 CIPFA and they travel to someone else’s how much rent is? said: “Best magazine out there. who said ACCA should allow us to After all, they are ours! ICAEW have officially been offices to sit in their chairs. I don’t seem to be any better I remember reading that BIG old see our exam paper post-marking Name and email address working more closely. As We must be realistic about off than when I was a student. thing… it was huge and I loved (Letters, PQ, September 2023). supplied ICAEW CEO Michael Izza what accountants are and the That said, I don’t think that is it. Still read it religiously after This is something I have always The Editor says: You are not said in the press release reasons why people choose it as accountancy’s fault, but they do all these years. Of course, the wanted to happen, and have even alone in your request (see below). announcing the fast-track a profession. need to look seriously at the pay situation is helped by having tried to raise the issue via ACCA I know ACCA does lots of surveys pathway to dual membership: I don’t think we should so scales, or people will look for a such an A+ gentleman and surveys. However, as I expected, We need that feedback in order and tries to get feedback from “We have long been of the view naive to think money doesn’t problem is there is now more different career. professional in Graham.” ACCA never responded to my not to repeat same at the next students, but then it all sort of that closer working between play a big part in making money to be earned elsewhere Name and email address Katarina Collins said: “A truly request. sitting! disappears. I think it should take ICAEW and CIPFA will bring accountancy attractive. The in the City and in other supplied amazing milestone. Thank I share my fellow students’ Like many students, it just a leaf out of the AAT’s book and significant strategic benefits you very much for providing frustration; exactly how is a makes me think ACCA is a purely create a student advisory group. for both institutes, which will in continuous, well-rounded student supposed to know where focused on making money, and This would give students a real turn be good for members and information, updates and he/she went wrong if they can’t this could be the reason why voice and allow for a grown-up students, the profession and I’m a mum first study support to accounting see how they have been judged? ACCA does not return examination debate on such issues. wider society.” I don’t want to moan, but I not professionals.” CIPFA boss Rob Whiteman sure what Dr Patrizia KokotACCA tutor, and our tutor agreed: “I’m confident that Blamey is saying in your story of the year in 2019, Brigita going forward we’ll see even ‘Where are the women?’ (PQ, Petrova, said: “Congratulations Yes to feedback stronger partnerships between October ’23). Graham Hambly, thank you for I agree with your letter writer last CIPFA and ICAEW.” Is she saying as women that an amazing magazine! The world month that as an ACCA student we So, the obvious next we can’t get to the top because of accounting wouldn’t be the pay a huge sum to sit the exam, question for many is when we decide to have children? same without it.” so we should at least get feedback are the two going to move in The move to hybrid working has James Brent from Hays on where we did well and where together? certainly helped me cope with said: “PQ magazine will have we can improve the next time we Back in 2005 a merger looking after two small children impacted positively on so many attend the paper. Otherwise, this was suggested, but it was and a job that requires me to be professionals’ careers. A great just screams ACCA fail people to voted down after an ICAEW ‘on it’ all the time. achievement.” gain profit. membership vote fell short I have great bosses who know I Sarah Moore-Williams, Dean of I also believe we should be able to of the necessary majority will do the work even if it is after I Business and Digital Technology challenge the marking just how we – by just one percentage have read my kids their bedtime at the University of Winchester, used to for GCSE or A-Level papers. point. Some 65.7% of ICAEW story. I am ambitious too and said: “Congratulations! A Name and email address supplied members voted in favour of a want to make it up the career fantastic achievement. What an merger, but it needed 66.7% ladder, but my children will impact you are having Graham, I always wantcome one too! to go ahead. CIPFA members first. I am hoping you should be very proud!” I see the AAT has launched a new voted overwhelmingly for a the world of work is changing And Ishani Chandrasekara Student Advisory Group. A great merger. and future employers will see of Queen Mary University of move on their part. Now what about Then in 2007 the two me for who I am and what I can London added: “Congratulations, ACCA? signed a memorandum of bring to their business, not at we are so lucky to have your The AAT is an international body understanding, but that fizzled just about the perceived limits of our exam papers to be sent back with the marker’s comments and support and guidance. Thanks and seems to be embracing the out. my contribution because of my to us after marking (PQ Letters, where the marks were awarded. you for all that you do for us.” idea of hearing genuine feedback. So, no talk of merger from gender. October ’23). Professional I seriously don’t think it’ll create We even got a “whoop” from Surely ACCA can pilot a similar the bodies themselves, but is it Name and email address bodies talk about openness and the problems people think it will. AAT CEO Sarah Beale! project? time for another go? supplied transparency, but when someone ACCA could try a pilot – for As Mark Ingram said, we are in denial that a smart computer but as a profession I think we need Name and email address supplied Some outside the profession asks them to show it they come SBL or SBR, for example – and certainly feeling the love. Thanks do a lot of what they did! to understand what the future are often shocked by the I want my paper too could up with some sort of excuse. go from there. But hey, I’m not again to everyone who has been AI will be coming AI will become so integrated holds and be ready to change with number of accountancy bodies It was really interesting to read If ACCA is confident in its holding my breath! on the journey with us – as for us all at work that juniors have to be the wind. Being an accountant operating in the UK, and many that so many other ACCA students processes, then there should be Name and email address Barney Brabazon said: “250 Like you Mr Editor, I am not careful – generative AI is a learning is still a great thing to be, and inside the profession believe if think the time is now right for no problem sending us our papers supplied reasons to smile!” surprised by the OCED’s report that programme and once it has learnt something I have never regretted. there was one main body then AI is coming after the work of even what they can do some firms might Understanding finance in a wider they would have a bigger voice. the highly skilled staff members PQ Magazine ask: why PO doBox we 75983, need so many context is important and using your A merger between the ICAEW London E11 9GS | Phone: 07765 386489 | Email: graham@pqmagazine.com with years ofWebsite: education. For years juniors anymore? CPD to keep up |with trends is vital. and CIPFA could the start of www.pqmagazine.com | Editor/publisher: Graham Hambly graham@pqmagazine.com Associate editor: Adam Riches | Art editor: Timbe Parker accountants I worked with Robert seemedBruce,We still Sikka, have some to go, Anna Kate Name and email address creating a unified profession. Contributors: Prem Lisaway Nelson, Phelan, Tony Kelly, supplied Phil Gammon, Edward Netherton | Subscriptions: subscriptions@pqmagazine.com | Origination services by Classified Central Media

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If you have any problems with delivery, or if you want to change your delivery address,graham@pqmagazine.com please email admin@pqmagazine.com PQ Magazine PO Box 75983, London E11 9GS | Phone: 07765 386489 | Email: Website: www.pqmagazine.com | Editor/publisher: Graham Hambly graham@pqmagazine.com | Associate editor: Published by PQ Publishing Ltd © PQ Publishing 2023 Adam Riches | Art editor: Tim Parker PQ Magazine November 2023 Contributors: Robert Bruce, Prem Sikka, Lisa Nelson, Anna Kate Phelan, Tony Kelly, Phil Gammon, Edward Netherton | Subscriptions: subscriptions@pqmagazine.com | Origination services by Classified Central Media

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PQ artificial intelligence 64% believe it may reduce the overall number of jobs available in the future. Furthermore, almost half (48%) of those aware of Generative AI believe it may replace some of their role in the workplace. Perricos added: “In anticipation of generative AI increasingly becoming a fixture of the workplace, organisations should prioritise upskilling their workers to thrive alongside this technology. Generative AI has the potential to not only replace routine tasks but also create higher-skilled, non-routine opportunities across the labour market. A key focus for employers should be on how to use these new tools so that they can be applied correctly and create value. This shift is ongoing and set to continue in the coming decades.”

Generative AI is here to stay Would your employer approve of you using generative AI at work? Well, over four million people in the UK have used it for work

ust over half of the people in the UK (52%) have heard of generative AI, and more than a quarter (26%) have used it, according to new findings from Deloitte’s 2023 Digital Consumer Trends research. Of those that have tried a generative AI tool, almost a third (30%) say that they only used it once or twice, with 28% using it weekly. One in ten (9%) say they use an AI tool at least once a day. More than two-thirds (70%) of respondents who have used the technology have done so for personal use, while 34% have used it for education purposes. More than half (56%) of 16-19 year olds who have used generative AI technologies in education. Paul Lee, Deloitte's partner and head of technology, media and telecommunications research said: “Generative AI has captured the imagination of UK citizens and fuelled discussion among businesses and policymakers. Within just a few months of

the launch of the most popular generative AI tools, one in four people in the UK have already tried out the technology. As a comparison, it took five years for voice-assisted speakers to achieve the same adoption levels. It is incredibly rare for any emerging technology to achieve these levels of adoption and frequency of usage so rapidly. “Generative AI technology is, however, still relatively nascent, with user interfaces, regulatory environment, legal status and accuracy still a work in progress. Over the coming months, we are likely to see more investment and development that will address many of these challenges, which could drive further adoption of generative AI tools.” Generative AI in the workplace Deloitte’s research also found a third (32%) of those who have used generative AI have done so for work, equating to around four million people. This is despite the

fact that, across all respondents, only 23% believe their employer would approve of them using Generative AI for work purposes. Global AI and data lead at Deloitte, Costi Perricos, said: “With millions of people using Generative AI tools in the workplace, potentially without permission, it is critical that employers offer appropriate guidelines and guardrails so that their people know how, when and where they can use the technology. Businesses will also need to consider how they communicate their own policies on generative AI to customers and understand how their suppliers are using the technology to ensure transparency. People need to understand the risk and inaccuracies associated with content generated purely from AI, and where possible be informed when content, such as text, images or audio is AI-generated.” Among all respondents that have heard of generative AI,

Is AI always right? Deloitte’s research also revealed that one in five respondents (19%) believe that generative AI always produces factually accurate responses, rising to 43% for those who have used the technology. In addition, 18% of respondents believe that responses from generative AI tools are unbiased, rising to 38% for those who have used the technology. Despite this, when it comes to creativity and replicating art forms, UK citizens seem to be more sceptical about generative AI’s capabilities. Four in 10 people (40%) would be less inclined to listen to music if they knew it had been produced using generative AI, compared with just 16% who would listen. Deloitte’s Joanna Conway added: “Governments, policymakers and regulators are looking to tap into the potential of AI, while also managing its risks. As more lives and jobs are impacted by AI, the technology must be trustworthy, ethical and as accurate as possible for all of its benefits to be felt. “Generative AI has the potential to be a powerful tool, but it is imperative that its risks are managed. It is therefore unsurprising to see generative AI regulation emerging across the globe. Through clear and effective rules around data risk management and the key issues of safety, bias, accuracy and liability, policymakers should aim to encourage growth and productivity through AI in a safe and controlled way and to safeguard its users.” PQ Magazine November 2023

THE ETHICAL ACCOUNTANT – ARE REGULATIONS, STANDARDS, AND CODES ENOUGH TO CREATE THE HONEST ACCOUNTANT? The Queen Mary University of London seminar, brought to you in association with PQ magazine

The Queen Mary University of London and PQ magazine in-person award-winning seminar series is back. Our latest seminar will look at who policies the accountancy profession, who sets the standards, and how we ensure accountants work in the public interest! Among our speakers on the night are IFRS's Mardi McBrien, Professor Atul K Shah, and consultant Stephen Gyte. Join us on Wednesday 25 October at the Maths Lecture Theatre, as we search for the ethical accountant. The event will start at 18.00 BST, but doors will open at 17.30 for networking. There will be sandwiches too! Click here to book your free place. The Ethical Accountant – are regulations, standards, and codes enough to create the honest accountant? Date: Wednesday 25 October Venue: Maths Lecture Theatre, School of Mathematical Sciences, Queen Mary University of London, 327 Mile End Road, Bethnal Green, London E1 4NS Time: 18.00 – 20.30 (networking from 17. 30)

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the environment PQ

Is our sustainable future being lost?

Accounting and finance bodies join forces to urge for more action to meet the UN Sustainable Development Goals and secure our collective future.

he world is on track to meet only 12% of its sustainable development targets by 2030, and a group of leading accountancy and finance bodies are urging the UK government to take more direct action. We are halfway to the 2030 deadline and the 11 professional bodies say we are in fact ‘going backwards’ – and time is running out. In an open letter to the Prime Minister Rishi Sunak, the bodies say: “The science shows us that, not only are we failing to collectively tackle the climate and nature crises, but inequalities are also growing at an alarming rate. This isn’t just a crisis of people and planet, it’s a crisis of our economies and global financial system.” They go on to explain: “As accounting and finance professionals working across all areas of the economy, we know first-hand the costs of inaction to the businesses and organisations we lead and advise. Acting now is an investment that will not only improve the lives of millions of people but safeguard our future economic prosperity and business resilience.” Here is that letter in full: “Dear Prime Minister As world leaders gather today in New York for the 78th United Nations General Assembly to review progress against the UN Sustainable Development Goals (SDGs): halfway to 2030, the scorecard will show that we are nowhere near halfway

PQ Magazine November 2023

to achieving them. It’s time for the UK government to show global leadership and take decisive action to put us back on track. The science shows us that, not only are we failing to collectively tackle the climate and nature crises, but inequalities are also growing at an alarming rate. This isn’t just a crisis of people and planet, it’s a crisis of our economies and global financial system. The recent UN Sustainable Development Goals Progress Report warns that the world is on track to meet just 12% of the SDG targets by 2030, while headway on more than 50% of the targets is weak and 30% have stalled or gone into reverse. These include critical global targets on poverty, hunger, and climate. In the UK, we are on course to meet only 17% of our targets, but it is developing countries that are bearing the brunt of our collective failure. The 2023 SDG Summit must mark a turning point. As the UN’s progress report states: ‘A fundamental shift is needed – in commitment, solidarity, financing and action – to put the world on a better path.’ With COP28 around the corner, and given the global nature of the challenge, it’s vital that the UK government – including the new Secretary of State for Energy Security and Net Zero, Claire Coutinho – shows leadership to help drive action internationally and to rapidly scale up financing for all countries in need. Meeting climate goals is also inextricably linked to reversing global nature loss and

addressing inequalities: we must tackle all three together. The UK must stick to its domestic net zero commitments and provide a clear policy framework to help businesses accelerate innovation and investment. It must also keep its commitments to be nature positive by 2030 and to aligning the activities of our institutions and finance system with this goal. The transition must also be socially just. There is enormous potential for net-zero initiatives that restore nature and improve the lives of people and communities. As UN Secretary General, Antonio Guterres, put it, ‘unless we act now, the 2030 Agenda could become an epitaph for a world that might have been’. As accounting and finance professionals working across all areas of the economy, we know first-hand the costs of inaction to the businesses and organisations we lead and advise. Acting now is an investment that will not only improve the lives of millions of people but safeguard our future economic prosperity and business resilience. We urge you and your government to show global leadership and take decisive action to put us back on track to meet our commitments and create a more sustainable future for all. We stand ready and willing to use our collective skills and knowledge in organisational governance, strategy, risk management and performance to support the British and other governments in implementing the changes needed to drive progress.” The letter, dated 18 September 2023, was signed by ICAEW, CIPFA, AIA, ICAS, the Institute and Faculty of Actuaries, the Chartered Banker Institute, the London Institute of Banking & Finance, Association of Corporate Treasurers, Chartered Insurance Institute, CFA Society of the UK and the Chartered Institute for Securities & Investment (The CISI). 19

news PQ

Economic challenges for New faces at ICB ACCA Pakistani students Students in Pakistan are asking the ACCA to look again at the fees for exams and annual subscriptions. One student appealed directly on LinkedIn to CEO Helen Brand explaining: “Our nation and our students are facing unprecedented financial constraints.” They pointed out that the devaluation of the Pakistani rupee against the pound has meant the current exchange rate is £1 to PKR385 – last year it was £1 to PKR250. This has significantly inflated the cost of education and living for ACCA students. The student pointed

out that the rise in the WTH tax rate has also increased from 2% to 10%, adding to financial pressures. The student told Brand that the prevailing economic climate had seen a rise in unemployment, meaning many students can no longer support their studies. What they want is a reduction in fees. Brand responded to the student saying: “We recognise the economic challenges that you and all our students are facing in Pakistan and are working to support you as much as we can through our pricing policy and learning support.”

Audit reform to be shelved The UK government looks set to remove the much-delayed overhaul of the audit and governance regimes from its programme of legislation for 2023. The Financial Times said that the absence of legislation in the King’s Speech would

mean that the changes are now unlikely to happen before the next general election. Questions will now be raised where this leaves the Audit, Reporting and Governance Authority (ARGA), which is supposed to be replacing the Financial

Reporting Council. It could mean the ARGA may not come into existence until 2027. The FT did find someone ‘in the know’ who said some of the measures might appear as secondary legislation, but admitted ‘wholesale reform’ will not make it onto the current agenda.

The Institute of Certified Bookkeepers (ICB) has announced a series of appointments to help it meet the changing needs of the nation’s bookkeepers. Ami Copeland (pictured), who was appointed CEO in January 2023, explained: “ICB bookkeepers are the best in the world, and they deserve the best team to represent them. Our new recruits have a proven track record of delivery, and will enhance our already excellent ICB team.” New recruits include Yvonne Rennison-Stone, who joins as Director of Professional Standards. Elizabeth Carter joined ICB in July as Head of Marketing. Another key recruit is Abigail Chamberlayne, who joined ICB in May of this year as AML Professional Standards Officer. Copeland said: “In addition to Yvonne, Elizabeth and Abigail, we have also welcomed Simon Milhomme and Nathan Tucker into our friendly member services team this year. Simon and Nathan work alongside Lorna Bailey under the management of Polly Thrasivoulou, who took up the role of Head of Member Services in March.”

Three ACCA scholarships up for grabs

PQ magazine and VIVA Financial Tution are joining forces to offer three lucky ACCA students tuition for the entirety of their studies! VIVA is celebrating the rolling out of its online ACCA tuition, and the lucky students will unlock its All Access membership, until they don’t need it anymore! VIVA’s All Access membership gives entry to all 15 of its standard ACCA courses. To be in with a chance to win one of these three scholarships students simply have to register for VIVA’s free ACCA mailing list at: https://app.vivatuition.com/register-form. The draw closes on Sunday 15 October. We will announce the winners on Tuesday 17 October. PQ Magazine October 2023

the workplace PQ

Hard versus soft skills How do you strike the balance between hard and soft skills in a changing accountancy landscape? Karen Williams explains all

he accountancy industry is facing unprecedented challenges as the economic slowdown and talent shortage puts significant pressure on firms. With industry giants like EY and KPMG announcing plans to cut thousands of jobs, the current landscape reflects the need for firms to do more with less. With money tight and talent in shorter supply, it is becoming more critical for practices to maximise the potential of their existing staff. Moreover, future and current accountancy professionals should look beyond their basic skills and adopt a different approach in order to future-proof their careers. Importance of balance In the past, the industry’s general reluctance to adopt new technologies has been a significant growth obstacle for many accounting firms, primarily due to a lack of hard skills. Often, this meant that more experienced accountants would struggle with learning how to use and keeping up with new technology. However, with the entry of younger, tech-savvy accountants into the industry, this problem is gradually subsiding. Instead, a new challenge is arising from a lack of softer skills, including people management, face-to-face communication, industry knowledge and confidence in the office environment. The issue deepens as professional bodies like ICAEW and ACCA currently do not adequately support students in developing these essential skills. The Covid-19 lockdown and the rise of the ‘digital generation’ have limited opportunities for young people to develop these softer skills. Unlike their predecessors, who were willing to spend several years mastering the profession at lower levels and gaining a thorough understanding of the industry and clients, younger accountants seek a faster pace of career progression. They often have a different perspective on the profession and expect rapid upward mobility, more responsibility, higher pay and the assistance of technology in their work. This poses a risk for firms, as they may end up with individuals in senior positions who possess the technological expertise to drive productivity but lack the essential people skills to retain clients. In addition, the integration of automation in finance functions marks a significant shift in the accountant’s job landscape. Mundane and repetitive tasks that once consumed more junior accountants’ time are now being automated, freeing them to focus on higher-value activities. The brave new world of finance envisions accountants as strategic partners, utilising their expertise to provide actionable insights that can lead to significant business transformations. Therefore, it’s more critical than ever for younger generations to look beyond the numbers and fully immerse themselves in working with clients to build confidence.

PQ Magazine November 2023

Williams: 'firms must find a balance between enhancing the skill sets of their experienced professionals' How to strike the right balance To address these challenges, firms must find a balance between enhancing the skill sets of their experienced professionals and developing the softer skills of newer hires. Accountancy is currently undergoing a significant transformation to align with the structural and economic changes taking place in the broader business landscape. As a result, accountancy practices cannot afford to ignore the potential of technology and outsourcing in optimising client services. Automating repetitive tasks and outsourcing to external teams can free up valuable time for training, learning, and value-added advisory services. Younger accountants, already familiar with technology, are open to adopting such practices, though more experienced professionals may be resistant to these changes. Therefore, the tech-savvy generation of accountants has a unique opportunity to help their organisations and encourage more mature workers to embrace automation and technology. On the other hand, these younger professionals, who are highly sought after for their with expertise in data analytics and utilising tools such as artificial intelligence (AI) and machine learning (ML), need to understand that neglecting their soft skills can hinder their career growth and impact long-term success.

It is also vital to recognise the value of softer qualities such as commercial acumen, people skills, thinking strategically and critically, and having a client focus. Young professionals must be able to provide objective counsel and confidently challenge, when necessary, in a supportive manner. Building strong relationships is paramount, as it requires establishing trust and having the emotional intelligence to recognise that communication can vary among individuals and situations. While there should be an understanding of the bottom-line impact of recurring compliance work, which often completely relies on hard skills, a cultural shift is needed within firms to appreciate the revenue opportunities that soft skills can unlock, in order for accountants to become true business partners to their clients. By striking the right balance between hard and soft skills and leveraging technology and outsourcing, firms can overcome the challenges posed by the economic slowdown and talent shortage. In turn, this provides a unique opportunity for accountancy professionals entering the market to focus on their softer skills and demonstrate their value beyond technical skills. • Karen Williams, Interim MD for Accountancy at IRIS Software Group 21

PQ London Business Show 2023

It’s showtime!

Britain’s biggest business event is back for 2023, returning to the ExCeL in London on the 22–23 November

re you looking to start a business or grow your existing business? Helping small businesses grow and develop, the 45th edition of the show will reveal the secrets of business adaptation, innovation and survival in the business world through finding and purchasing the products and services that your business needs to take you to the next level. Running alongside The Business Show this year is Going Global Live, Working From Home Live, Retrain Expo, The Sustainability Zone, and The Future of Work, offering everything you or your business needs to successfully adapt to the ever changing industry advances. Retrain Expo helps you to re-skill and retrain for the future, whereas Working From Home Live offers the tools and resources needed to work remotely. There is also the return of Going Global, a show that provides unparalleled education and information on trade agreements, international strategy, and cultural and economic differences. It can connect you with an abundance of business owners, under one

roof, who are looking to invest abroad. Two new shows, The Sustainability Zone and The Future of Work, have been created to reflect the emerging trends in the workplace revolving around tackling the environmental crisis and evolving technological advances. Entrepreneurs will find everything they need to help them on their business journey, including advice and guidance from some of the biggest names in business. With over 750 exhibitors showcasing all the latest products and services needed for small businesses, there are also 200 educational seminars and masterclasses and keynotes from the UK’s biggest entrepreneurs. Find endless networking opportunities with like-minded individuals and create meaningful business relationships. This year the show will host a range of keynote talks from the likes of Marnie Swindells, the winner of the BBC’s The Apprentice and a business owner, Ed Wilson from Tiktok, Daniela Tabor from Spotify, Harmony Murphy from Google, and many more exciting industry professionals. This is a rare

opportunity to get first-hand advice from the people who started right where you are. Throughout the show visitors will find interactive masterclasses that offer you a chance to learn first-hand from industry leaders. Find out how to start a property development business, how to market on social media, tips to get more clients and a range of other insightful and educational topics. These masterclass spaces are limited and on a firstcome, first-served basis, so make sure you sign up on the website to secure your place. To register for your free ticket go to www. greatbritishbusinessshow.co.uk

PQ Magazine November 2023

AAT Distance Learning

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PQ ACCA PER

Getting practical At the tail end of summer ACCA changed some of its PER requirements. Here’s what you need to know

o streamline the completion of the practical experience requirement (PER) and ensure the rigour of the ACCA qualification, on 24 August 2023 ACCA introduced a number of changes to the PER policy. Claiming individual elements Prior to this date, to complete a performance objective a trainee had to complete and claim five elements (tasks and activities relevant to the objective) and write an overall statement describing how they achieved the performance objective. This means to achieve a performance objective they had to submit multiple separate items to their supervisor for review. To streamline this process, ACCA has removed the need for individual elements to be signed off when a trainee submits a performance objective to their supervisor. The elements remain part of the performance objective. Trainees still need to demonstrate to their supervisor that they have completed the tasks or activities in the elements to achieve the performance objective. However, moving forward only the full objectives need to be sent to their supervisor for sign off. If a trainee had any individual elements signed off by their supervisor, then these will no longer show on their PER record after 24 August 2023. This progress will not be lost, as all elements will be automatically included when the performance objective is submitted to their supervisor for sign off. Embedding sustainability The future of our organisations and society itself depends on sustainability. Accountancy and finance professionals must drive the journey towards sustainability. To help trainees demonstrate achievement in this area ACCA has updated its strategy and innovation performance objective in August 2023 to include

sustainability tasks and activities relevant for trainee accountants. Performance objective 3 has been renamed ‘Strategy, innovation and sustainable value creation’. If a trainee had already completed performance objective 3 – strategy and innovation, and had this signed off by their supervisor, they don’t need to do anything more as this achievement will remain on their record. If a trainee had not completed performance objective 3, they and their supervisor should review the updated description and elements to see the sustainability tasks and activities that have been added. ACCA has also included additional example activities of sustainable value creation to help trainees to demonstrate achievement of this performance objective. Introducing a strict liability clause On 6 September 2023, ACCA introduced a requirement for trainees to complete a strict liability clause when recording their PER. This clause will require all trainees to confirm that their PER is a true and accurate representation

of their own work. Supervisors will also need to complete a strict liability clause when signing off the PER to confirm that they believe the PER they are signing off is a true and accurate representation of the trainee’s work. Mandatory upload A practical experience supervisor must be a current, active member of an IFAC membership body to sign off performance objectives (or be recognised by law in the country that the trainee is working in). It is now mandatory for supervisors to upload a copy of their membership certificate or other evidence from their IFAC membership body, such as letter or annual subscription receipt. This applies to supervisors already registered with ACCA as well as newly registered supervisors. Employer sign-off In 2016, ACCA launched the current PER recording tool, MyExperience, and introduced the requirement to get time towards the PER signed off by an employer. If trainees had any time recorded in the old PER tool then it was transferred to the current recording tool as ‘import approved’ time. Trainees were not required to get ‘import approved’ time signed off. As the accountancy profession is fast moving, ACCA strongly recommend that any relevant work experience used to meet the practical experience requirement is achieved within the past five years. All ‘import approved’ time is now over five years old; therefore, to ensure the rigour of the PER ACCA has introduced the requirement to have ‘import approved’ time signed off by the employer it was gained with, in line with the existing time requirement. If a trainee wished to apply for membership using any ‘import approved’ time, then they had to apply for and be admitted to membership by 24 August 2023. After this date, if a trainee wants to use ‘import approved time’ towards their PER, then they will need to get the time signed off by the employer it was gained with. All active trainees with ‘import approved’ time on their PER record were notified about this change via email on 24 July 2023. • Thanks to ACCA for this article

PQ Magazine November 2023

tax reform PQ

Tax is too taxing Our current tax system is in need of radical reform, says Institute for Fiscal Studies’ deputy director Helen Miller

ick a tax, any tax. That tax almost certainly needs serious reform. It is probably creating large and unjustified distortions to how much people work, how much businesses invest, or to choices people and businesses make over how to allocate their time and resources. All those things make us less productive and leave us poorer. There’s a good chance the tax is also creating unfairness by giving different tax rates to very similar people. Did you pick income tax or national insurance contributions? These are our biggest revenue raisers. Together, they bring in almost half of UK tax revenue. There are plenty of issues here, not least why we have two taxes on income in the first place. But the one that troubles me most is the tax penalty on employment. Employment

income is taxed at higher rates than income people get from investments or from running their own business. It’s also taxed at higher rates than capital gains. This set up, often described as lower rates for the self-employed, is not justified by differences in government benefits or employment rights and is not a well targeted way to boost entrepreneurship. Having different tax rates on different types of income adds a lot of complexity and is unfair in the sense that similar people can face drastically different tax bills depending on how they get their income. If you picked VAT you might think you’ve picked a straightforward tax. It’s been described as “unquestionably the most successful fiscal innovation of the last halfcentury” and “perhaps the most economically

efficient way in which countries can raise significant tax revenues”. It has certainly been popular with governments. It raises almost a fifth of UK tax revenue, double what it did when introduced 50 years ago. But the UK’s VAT is plagued with zero-rates and exemptions. These are expensive, representing £100 billion in foregone revenue annually, and create a huge compliance burden. Millions of valuable hours are spent applying and disputing these rules. And the rules don’t even make sense! A gingerbread man is zero rated for VAT as long as the chocolate decoration is ‘no more than a couple of dots for eyes’ – add a smile, and you’ll also need to add 20% VAT. Chocolate Nesquik – no VAT. Strawberry Nesquik – 20% VAT. And these are relatively straightforward examples. What madness is this? And what do we get in return? Zero-rating for goods such as food helps lower income households but in an extremely poorly targeted way. Equivalent support could be provided at much lower cost through the benefits system. The list goes on. Inheritance tax is easily avoided by the healthy, wealthy and well advised. Corporation tax discourages some profitable investments while subsidising some unprofitable ones. A jumble of environmental levies creates inconsistent incentives to reduce emissions, making it more expensive than necessary to reach net zero. Most of these problems have been around for decades. People who had my job before I was born were writing about them. Depressingly, it’s likely my successors will say the same thing. But it’s not inevitable. As the general election starts to come into focus, and political parties prepare for their autumn conferences, there will no doubt be debate about the overall level of taxation. UK tax revenues are historically high. Spending pressures will grow, most notably because an ageing population will increase the cost of providing healthcare, social care and state pensions. Without tax rises or a major pickup in growth, UK public service and benefits provision will either have to be scaled back or it will deteriorate. The level of tax needs serious debate. Missing that opportunity seems to me to be almost as silly as a tax that applies to marshmallows, unless they are intended to be roasted and eaten from a stick. There’s no shortage of choice on where to start reforming. Pick any tax. • Helen Miller is deputy director of the Institute of Fiscal Studies and head of the tax sector

Award-winning AAT courses and apprenticeships Flexible learning to suit your lifestyle mindful-education.co.uk/students PQ Magazine November 2023

PQ non-controlling interest

A question for Tom Top tutor Tom Clendon explains a concept that all students need to know by heart

Question Why are there two methods of measuring NCI (one at fair value and the other as a proportion of net assets) and what are the consequences? Tom’s answer Ultimately, the reason why there is a choice in the measurement of NCI at acquisition and therefore the measurement of goodwill is because the standard says so! The conceptual framework From a framework perspective, this choice is I think unsatisfactory because it reduces comparability for users. It’s also hard for them to understand. For these reasons the choice reduces the usefulness of information for stakeholders. The historical background is that the standard was produced at a time when there were attempts to converge and harmonise international accounting standards with US GAAP. Traditionally, international accounting standards had used the proportional method, whereas US GAAP had used the fair value method. By the standard allowing both it results in a compromise that all parties

were happy with. The most important thing, though, is to appreciate the consequences of this choice. Consequences When NCI is at fair value goodwill is in full, and therefore any impairment loss relating to the goodwill is split between the group retained earnings and the NCI in the proportion that profits and losses are shared between the parent and the NCI. On the other hand, when NCI is a proportion of net assets the goodwill is wholly attributable to the parent company only and therefore all impairment

losses are charged to the group retained earnings. The same principle is true when it comes to exchange differences on goodwill as well. Conceptually, the use of the measurement of NCI at fair value is considered superior. This is because it is consistent in that all the other ingredients in the calculation of goodwill also at fair value. In addition, it means that we are consolidating all of the goodwill of the subsidiary (not just a proportion) and reporting an NCI interest in that goodwill. This is again consistent with the way that we consolidate the other assets of the subsidiary. We consolidate all of the subsidiaries’ land and buildings, for example, and report an NCI in that asset as a result. The consequences of measuring NCI at fair value do mean that there is a larger goodwill figure and this in turn will mean, in due course, there will be more impairment losses to be charged. Therefore in future group profits will be potentially diminished. There is another additional benefit of measuring NCI at fair value and therefore having full goodwill which is that, when you come to calculate the impairment loss arising, there is no need to do the confusing and convoluted artificial grossing up of the goodwill in the impairment review process that is only necessary when you are calculating NCI as a proportion of net assets. • Tom Clendon is a podcaster and an online lecturer for ACCA SBR. He welcomes student queries via WhatsApp on 07725 350793

Have you discovered the benefits of Study Hub yet? Our new digital platform is here to help you enhance your learning and achieve even better exam results. It brings your revision to life and helps improve your knowledge with study chapters, flashcards, quizzes and practice questions. Study Hub makes exam preparation easy. Try it out today. #ACCAStudyHub

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PQ Magazine November 2023

CIMA spotlight

Insight is everything Nasheen Wuisman explains how you can boost your exam success by knowing a strong answer from a weak one

reparing for your Case Study exams can be very daunting; it is hard to know what is important and what is not – what the examiner wants from you. This is something that we can help with hugely. We have the insight straight from the examiners. The rules about what they award marks for and what they don’t are actually quite simple. The more you practise past papers, the more these rules will stick and become second nature to you. Getting ready for exam prep Let’s get a feel for the areas you need to build into your revision: • Technical knowledge: Before you can apply knowledge, you will need a sound technical base early on, to ensure this does not create a stumbling block for you later. • Communication: The examiner doesn’t want a perfectly written answer, grammar or spelling mistakes are not penalised. Your aim is for your answer to be comprehensible – your argument needs to be a clear one. • Describe versus explain: Being able to explain why a technical concept is relevant and how it can be applied in the given scenario is the aim. • Writing style: The aim here is to be concise with an idea. Using sub-headings can help both you and the examiner highlight the key areas considered. Getting the most from practice Practice is the only way you can prepare for a Case Study exam. Try to attempt more than one past paper before the real exam. Keep an open mind – you are not likely to do well in your first or even your second attempt. Use these as an opportunity to learn how best to produce an answer that will score well. PQ Magazine November 2023

Past exam paper walkthroughs We have some great illustrations on our site to show you how marks are awarded in the Case Study exams. The illustration of the good and the bad helps you relate them to your own answers and writing style. This helps you to see where you would have been awarded marks and where you would have lost out. Make these walkthroughs part of your exam preparation – they are pure gold! Here’s a preview… Operational Case Study Exam example question: Suggest and justify three key performance indicators (KPIs) which would be appropriate to assess the performance of the agent for the Asian market. Passing answer: The candidate suggested and justified three KPIs that covered a range of performance areas appropriate to assess the agent’s performance for the Asian market. Failing answer: The candidate identified only one KPI and needed to clearly state how that KPI would assess the agent’s performance. Management Case Study Exam example question: Using the figures for the gym project, prepare notes that I can use in the training session that explain why sensitivity would be useful when presenting this project to the Board. Also, discuss whether it would be better to use sensitivity analysis or scenario planning when evaluating the gym proposal. Passing answer: The candidate succinctly explained the usefulness of the sensitivity analysis, allowing her more time to explain how the sensitivity analysis applied to the gym project. The candidate also demonstrated her understanding of all the requirements and how to split time between them in the sub-task. Failing answer: Demonstrated a non-targeted approach. The candidate commented on the sensitivity analysis from a theoretical point of view but needed to demonstrate how his analysis could

be applied. Strategic Case Study Exam example: Identify the currency risks that we will face as a result of this agreement and provide your recommendation concerning the management of those risks. Passing answer: Demonstrated a good technical understanding of currency risk by providing a theoretical overview of the nature and types of currency risks before providing an appropriate recommendation. Failing answer: Would demonstrate only minimal technical understanding of the nature and types of currency risks and would not address or remain focused on the requirements of the sub-task. Takeaways from past papers: • Do not accept the fact that your answer may look different to the suggested answer and so won’t score well. Make sure you understand the suggestions in the model answer to help you improve your approach in future. • Be fair to yourself, give yourself credit for the parts of your answer where you have demonstrated recommended skills well – remember to replicate that next time. • Try to see how you would change your attempted answer, to bring in skills like application and relating more to the pre-seen. • Finally practise, practise, practise! The examining team are very clear that practising past papers and learning from the guidance offered will increase your chances of a successful Case Study! The CGMA Study Hub is packed with relevant materials for all learning levels. • Nasheen Wuisman, Senior Manager of Global Academic Progression at AIPCA & CIMA, together as the Association of International Certified Professional Accountants 27

PQ bookkeeping

40 years young Scottish-based bookkeeping home study experts and family firm Ideal Schools celebrates 40 years in business and looks to the future

t an event to mark the 40th anniversary of Ideal Schools, a family business that specialises in online and distance-learning bookkeeping and accounting tuition, founder Elias van den Akker reflected on his experiences starting and developing the firm, as well as looking to the future, announcing changes in the management of the company going forward. The 79-year-old Dutch entrepreneur, who established the multi-award-winning Scottishbased firm in 1983, announced that he was retiring from his active role in the company. He also indicated that the position of MD would be taken by his long-term colleague and director Brian McVean. Van den Akker, known as Al, also announced that his son Scot would become chairman of the training provider. The changes at the top

Brian McVean, Elias van den Akker, and Scot van den Akker of the company became effective from 1 September. The event in Glasgow was attended by directors, business associates and tutors and students past and present, and accolades were given to Al, whose firm earlier this year was named

the Large Training Provider of the Year at the Institute of Certified Bookkeepers (ICB) Luca Awards. He said: “It has been a long journey, but over the years we have had some triumphs in not only guiding students to exam success,

but also to improving their skills and job prospects. We have also taken on the challenge of facilitating accreditation, which is now a requirement for bookkeepers under money-laundering regulations.” His son Scot said: “When Al started out there was no internet, no Facebook, X or Instagram, no electric cars. Nowadays there is so much chatter that it is hard to make an impression, but I think the interpersonal relationships between staff and students have helped immeasurably. “Ideal Schools has always been student-centred. From the early days we have taken our lead from Al, who takes a genuine interest in every individual and encourages communication. This allows us to get to know our students and to achieve not only exam passes but also to attain our shared goals.” His colleague, Brian McVean, added: “Like Scot, I started out helping in the office on weekends and in the holidays and the 40 years have gone by very quickly. I have always had a good working relationship with Al, who gave me an insight into what a good business should be like.”

YOUR WELLBEING HUB Maintaining a positive mindset while studying can be challenging. Our wellbeing hub provides a range of resources and podcasts from our wellbeing ambassador to help support you throughout your ACCA journey. Explore ACCA wellbeing hub bit.ly/3ULGPdY

PQ Magazine November 2023

ACCA spotlight PQ

The importance of ethics ACCA’s Ann Lamb explains why having ethics at the heart of the ACCA qualification continues to be of paramount importance

thics plays a crucial role in everything that professional accountants do. It serves as the moral compass to navigate complex financial and strategic business decisions. Being ethical should therefore act as the cornerstone of a professional accountant’s identity and conduct. The near future will see substantive change in every industry sector. The accountancy profession finds itself facing various transformative forces including sustainability, artificial intelligence, leadership dynamics, workplace culture and the public sector's growing influence. Amid these shifts, the imperative for professional accountants to provide strong ethical leadership and decision making is needed more than ever. So, the ability to apply ethics in real-world environments is and must continue to be an essential requirement of being an ACCA member and trusted professional accountant. And that’s why ethics is integrated into not only our Ethics and Professional Skills Module (EPSM) but within our exams and Practical Experience Requirement (PER), too. EPSM and exams The EPSM supports students to enhance their professional skillset and understand the importance of ethical decision making. Placing students in situations where they are expected to identify ethical dilemmas and take ethical decisions, the module provides a great opportunity for students to receive instant feedback on the decisions they make. As a result of the learning outcomes offered by the EPSM, we strongly encourage any student to complete the module ahead of attempting Strategic Professional exams. While ethics and PQ Magazine November 2023

professional skills are embedded within all of our exams, the imperative to have strong capabilities in these areas becomes even more important at Strategic Professional level, with 20 marks designated for professional skills in these exams. Our analysis of exam results data clearly shows that students are more likely to perform well in these exams if they have completed the EPSM before they sit those exams. So it really does pay to follow our guidance of when to complete the module. PER We believe it’s important that students can demonstrate they can add value to organisations from day one of calling themselves an ACCA member. And that’s why experience is an integral part of the student journey. Our PER also helps to develop judgement in the live working environment, including on ethics and professionalism, which is one of PER’s five essential performance objectives. Academic integrity values Meanwhile, acting ethically when studying for the ACCA qualification is also important. If you’re an ACCA student, behaving ethically is fundamentally important to act in accordance with our academic integrity values. These include committing to acting with honesty and integrity, fairness, respect, responsibility and courage when studying for and attempting all parts of the ACCA qualification. Following these values helps set our students on the right path to ACCA membership. Evolving landscapes Of course, learning and understanding about ethics doesn’t just stop on completion of

the ACCA qualification. As business and our environment evolves, understanding how to act ethically in this changing landscape must be an ongoing process. From the integration of sustainability into business, disclosing and managing ESG factors, balancing the opportunities and risks of AI to dealing with corruption and tax justice, it is the professional accountant’s ethical judgement, combined with their financial and business expertise, that will guide organisations to do the right thing and help create a better world. That’s why ethics is also covered extensively in the continuous learning options we provide members and within the research and insights papers we do ourselves. A date for the diary To celebrate Global Ethics Day on 18 October we’ll be running an online series ‘Ethics for a better world: our daily talks from around the globe’ between 16-20 October. The series will be available on our YouTube channel and will feature thought leaders from around the world, discussing ethical implication around subjects including artificial intelligence, the workplace, sustainability, leadership and the public sector. I’d encourage you to tune in for what I’m sure will be thought-provoking and fascinating discussions. Finally, if you’re looking for more support to enhance your ethical decision making and professional skills we have lots of further guidance available. Whether across our study support resources, technical articles or Ethics modules, you can access all of these resources from our website. • Ann Lamb is director of professional qualifications at ACCA 29

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PQ IFA spotlight news PQ

We need green accountants Empowering ethics:

such as the Integrated Reporting framework, The accountancy profession of Management Accountants (IMA) access to social and environmental GREEN FINANCE SKILLS: THE GUIDE must help drive the migration reveals that business are unsure capital including audits, environmental to sustainable economies and about climate finance opportunities green finance management accounting, businesses by becoming experts and climate risk management. is critical for an the measurement of in green finance, says a new report Some 59% of the respondents to organisations environmental and social from ACCA, called ‘Green finance the Global Economic Conditions long-term survival. performance, and the Compromise is the enemySurvey of the ethical, and accountants need to be skills: the guide’. Q2 2022 said they are not Sustainability impact of sustainability in their determination dogreen the finance right thing,issays the IFA At a steadfast time when access to cheaper consideringto using already issues on strategy capital is more vital than ever to products – an opportunity that must firmly integrated within the ACCA formulation, business performance his month marks access the tenth anniversary is qualification not always possible. an organisation’s survival, be addressed.interest altogether, but this core as one of the and financial decisions. Globalcan Ethics launched toReport createauthor The danger isSkelton to believe that conflicts of interest to green of finance be a Day, lifeline Emmeline seven capabilities it believes all The full report can be accessed awareness and recent the understanding don’tneeds arise or are not an issue in the accountancy to businesses. However, said the profession upskilling, professional accountants need. at www.accaglobal.com/ of ethicsby in ACCA international among especially in volatile obligations and ask the CEO more questions? profession. importantAll to ACCA acceptstudents that if the research and theaffairs Institute times,It’s where cover topics greenfinanceskills. organisations across the world. For accountancy threat of self-interest is present, your judgements You may also face external pressure from a client professionals, it’s a reminder of the importance to act unethically or, worse, you might be the will be prejudiced. The key is to focus on of upholding the highest standards of ethics in subject of an intimidation threat to try to deter identifying and defining conflicts of interest, theirnew dutyAAT to maintain the public interest, above you from acting objectively. actual or potential, your view and from The Q2022 syllabus and understanding of reliesfrom on strong familiarity of the beyond their own personal interests. When confronted with such dilemmas, identify viewtoof different groups. If you suspect a conflict isand proving more challenging fundamentals in order double entry bookkeeping recent survey than by the IFA found that 41% of interest youprinciples should consult colleagues for A many students the succeed as of the move on covered at level who do potential legal issues and ascertain whether the accountants wouldsyllabus, need to ‘brushthrough up’ on their interests, relationships and issue is regulated by law or policy. Refer to the outgoing AQ2016 the levels. not share your2.direct Students starting FAPS knowledgetoofFirst ethics before they felt“It's confident Code of Ethics, which is available through your experiences –without but in doing you also need to according Intuition’s more important than someso previous tacklingJohn. the issue. The IFA looks at two common firm, association or membership body. The IFA’s consider confidentiality obligations. Gareth ever that students start your experience of debits, credits, ethical challenges you may face and howat to the dealright level Code of Ethics helps its members, students, He said that TBs, suspense accounts and with them. affiliates, and firms meet their professional Impacts of financial much of the to ensure they journalsreporting are finding it hard. obligations by providingJames them with ethical How you record information can have duplication of succeed,” John John felt students need Well, he did it! Accountant Copeanhas Conflicts framework. You can also familiarise with throughout yourofclient’s content andof interest stressed.significant bearing to avail themselves First completed his RNLI press-up challenge.yourself Although A conflict of interest compromises your case scenariosand andthat’s the correct business, yourIntuition’s firm, and beyond. assessment For example, free AATMany levellaws have dayCCAB’s 1,000 was onstudy 16 December, impartiality courses of action. loopholes, so ischecker, it ethicalwhich to take has been and is not only a consequence he pointed out is advantage a useful of when he hung up his proverbial press-up gloves, of material or economic interests, but alsothat the new If youkept refuse to beincompromised andachieved ensure them; for instance, by shifting numbers removed, meaning level diagnostic to help ensurearound todonations coming and he has now personal conflicts through relationships,3 FAPS (Financial speak up, to protect not just your own meet certain revenue Or when that students studentscriteria? can make a fullypresentedhis you fundraising target of £10,000. With gift aid familiarity affiliations. integrity, but potentially thatcompleting of your practice with a scenarioinformed of a CEOdecision posting questionable now need toand have Accounting: Preparing about the he raised £11,644.96 in total, over and The best solution is to avoid conflicts of Statements) the profession at large. expenses you consider their 500,500 a strong knowledge Financial paper to ‘sundries’, best levelwould for them to start at. press-ups.

what should you do?

Start your AAT’s journey at the right level

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31 9

PQ Suspense accounts

What is the suspense account? Karen Groves explains a concept students taking the Principles of Bookkeeping Controls assessment need to know

he suspense account is used as a temporary holding account if the bookkeeper is unsure about one side of a transaction, or if the Trial Balance doesn’t balance. This applies to both manual and computerised accounting systems. The suspense account will be used until either the error has been identified, or correct double entry established. It is a holding account until the discrepancies are resolved. For your Level 2 AAT Principles of Bookkeeping Controls assessment you may be required to open a suspense account and process entries to clear the suspense account. Example While preparing the company cash book you find a cheque stub with no details regarding who the cheque for £250 has been paid to. The bank account will be credited with £250; however, the debit entry is uncertain at this stage, so a suspense account will be opened:

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

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

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

Question While preparing the company cash book you find a cash withdrawal with no details regarding who the cash for £150 had been paid to. The bank account will be credited with £150, although the debit entry is uncertain at this stage. You are required to open a suspense account and then show the necessary adjustment when you establish later that day that the £150 was taken by the business owner as drawings. Today’s date is 1 November 2023.

Answers

• Karen Groves is an AAT tutor and AAT Faculty Director at e-Careers 32

PQ Magazine November 2023

GAME

CHANGERS WA N T E D

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Find out more at aicpa-cima.com/flp. Founded by AICPA® and CIMA®, the Association of International Certified Professional Accountants® powers leaders in accounting and finance around the globe. © 2023 Association of International Certified Professional Accountants. All rights reserved. 2307-444079

PQ AAT training

Why apprenticeships work Rachel Spence shares her experience of qualifying via the AAT apprenticeship route

Having these reviews should serve as powerful motivators, propelling you to enhance your weaker areas. As you commit to refining these aspects you’ll experience personal growth, fostering greater confidence and determination. Throughout the apprenticeship journey you will be encouraged to step out of your comfort zone, which should then also support you in the workplace especially post completion.

pprenticeships frequently go unnoticed during the process of choosing a career path, as many tend to favour the conventional path of going to university. However, this oversight should be reconsidered. How do I know? I speak from personal experience after having been an AAT apprentice myself, so here are a few reasons as to why the apprenticeship route to obtaining your AAT qualification may be the right decision for you. Developing lifelong knowledge, skills and behaviours Studying AAT as an apprentice offers a structured, dual-view learning process, uniting hands-on practice with formal education. With various methods of study falling under the apprenticeship umbrella, they all provide continuous theoretical enrichment in finance topics such as accounting principles, taxation and ethics. However, the apprentice journey extends far beyond theory. As your employment will be aligned with the AAT course that you are studying you are able to directly apply your classroom-based learning into a real-world setting. This practical immersion cements learning, deepens comprehension, and simultaneously fosters the development of critical behaviours (attitudes, habits and softs skills) that are essential for gaining solid business acumen.

Networking opportunities As an AAT apprentice, networking opportunities abound, yet it’s important to remember that networking is not about the number of connections but rather is about forging genuine relationships and seeking mutual support. You need not tread your apprentice path alone. Within your workplace, guidance from experienced colleagues who may have walked your path recently can prove invaluable. Yet, your most vital connections are your fellow apprentices – united in your journey you can assist each other in various ways, be it clarifying tricky accounting concepts or offering motivation. Additionally, AAT branch meetings, events, and conferences offer avenues to connect with like-minded accountants. Online communities like LinkedIn provide an excellent resource, aiding both CPD and industry insights. But, above all, your assigned tutor/mentor is a crucial asset. They are there to navigate your qualification journey with you, assuring you that no question is too trivial. Remember – no question is a daft question! Personal growth Through regular reviews with both your employer and your training provider you will quickly identify your strengths as well as your areas of weaknesses both on and off the job. This process involves setting targets for improvement, encompassing knowledge, skills and behaviours.

It's fun! AAT apprenticeships are so varied that no two days are likely to be the same. However, an AAT apprenticeship allows you to think outside the box and apply creativity – it requires you to learn how to solve problems creatively while using your initiative to approach tasks in the most logical way. Embrace the journey with an open mind and a positive attitude; you are then likely to find moments of joy and satisfaction along the way all while working towards a rewarding and respected profession. Make a difference As an AAT apprentice you may also be able to help those around you. By training as an accountant through the AAT apprenticeship route you are closing some of the skills gaps, driving innovation, productivity and competition, thus having a positive impact on the economy around you. However, that’s not all. AAT apprentices bring a vibrant energy, infusing workplaces with renewed vigour. This energy is often accompanied by fresh ideas and diverse perspectives which have the potential to enhance business operations driving positive change. Through my own personal experience, I’ve come to appreciate the substantial positive influence of Northern Skills Group and Sweeney Miller Law. Challenges do exist along the way; however, they’re surmountable with the right mindset and support network. Remember, this journey mirrors your commitment and aspirations, so embrace it as it shapes you into a proficient professional who adds innovation and value to the world of finance whilst giving you a highly recognisable qualification. • Rachel Spence MAAT is a qualified AAT accountant

PQ Magazine November 2023

careers PQ

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 accepting a job offer and feeling obliged to stay at the company for a long time. How do you know when it’s time for a change and is it acceptable to move jobs regularly?

Jobs for the boys Is it all aboard the gravy train for UK executives?

Board directors serving the UK’s largest financial services firms currently hold an average of three board seats each, and a third (33%) hold four or more, according to the latest EY European Financial Services Boardroom Monitor. However, new sentiment polling data has found that 82% of European investors surveyed believe that holding board positions at three or more firms could present a significant challenge to board directors’ abilities to fulfil their duty of

governing a company. Among the most senior board members at UK financial services firms – chairs and executive directors – the average number of positions held is two. Across all European board members, sitting on more than one major financial services board is less common:

only 2% of directors tracked hold two or more board roles at the largest European financial services firms. When asked to identify the primary driver behind directors assuming multiple board positions, just over a quarter (26%) of investors cited board members’ desires to gain broader experience and over a fifth (22%) cited remuneration. Separately, 19% of investors believe it relates to a shortage of female candidates with sufficient experience; however, current EY Boardroom Monitor data does not support this, finding that the proportion of women sitting on three or more boards correlates with the gender split of the total director population tracked.

In brief

KAREN’S RESPONSE Changing jobs frequently is becoming more commonplace. While it’s not advisable to hop from one role to another every few months, a minimum of one to two years in a job is considered a reasonable amount of time to find your feet and gain experience before moving on. However, there are positives to staying at an organisation for a three to five-year stretch. These include demonstrating loyalty, diversifying your skills and experience, and showing your ability to build strong working relationships. Think about your reasons for changing jobs: are you enjoying the role? Do you get on well with your team? Have you discovered the opportunities to upskill within your organisation? Is there potential to progress in your current position? It’s important to reflect on the pros and cons of your current role. So long as you justify your reasons for moving jobs and have evidence on your CV that you’re a committed and hard-working candidate, jobhopping shouldn’t be frowned upon. At every stage of your career, consider how satisfied you are in your job and whether it’s helping you to move in the right direction towards your career goals. Don’t be afraid to make a move to achieve this. • Karen Young is a director at Hays. She is passionate about helping people to find the right job and companies the right person PQ Magazine November 2023

Ellacott Morris goes flexible Ellacott Morris has announced from September its entire team, including new recruits, can opt for flexible working. When the business was launched, co-founders Michelle Morris and Anjuli Symonds juggled seven young children between them. Their supportive approach to work/life balance enabled them to operate efficiently and effectively, with their professional and personal lives functioning in harmony. They both appreciated the flexibility being business owners gave them. Symonds said: “We’ve always offered flexibility, but this ensures everyone is on a fair playing field, with the same options and opportunities. It has boosted an already happy team and made

us feel proud as employers and working mums.” Personal links count The UK capital has the highest rate of nepotism, with half of Londoners saying they have been able to secure a job because of personal contacts. The research from software firm Applied found that men and younger workers are most likely to get a job this way. Almost half of men and over two-thirds of Gen Z workers said they have gained a job or offer through a personal connection. Not everyone was happy about getting a job this way. Gen Z respondents were the most conflicted about it, and 60% of 18-24 year-olds said they disagreed with leveraging contacts to land a job and don’t think it is ‘fair’.

Bishop Fleming keeps on recruiting! Bishop Fleming has welcomed a record-breaking number of apprentices into the business. This year’s intake of 74 is up 14 on the number taken on last year. The new recruits include 43 university graduates, 26 school leavers and five placement students. Bishop Fleming grew fee income by 15.5% in 2022 to £38.4 million, and the firm has seen its headcount rise above 500 for the first time. This continues the firm’s ambitious plans to double in size in the next five years. The apprentices will work across the firm’s eight offices in Bath, Bristol, Cheltenham, Exeter, Plymouth, Torquay, Truro and Worcester.

The PQ Book Club: books you should read The Happiness Index: Why Today’s Employee Emotions Equal Tomorrow’s Business Success by Matt Phelan (Wiley, £18.99) Matt Phelan wants us to reconnect with the natural world; by doing so we will both thrive and help protect the planet. He says while we are going through the fourth industrial revolution (the digital revolution) we are still the same human beings that have lived for thousands of years. His concern is if we disconnect from nature a fourth time, we will again lose a part of what makes us human. Phelan explains: “We don’t expect plants to grow without the right components

such as light and healthy soil, and we should not expect employees to grow without creating the right environment to thrive.” He feels the world is at a crossroads. And although guarding against dystopian states is still of significant importance, he says there is an equally dangerous future where organisations create highly controlled worlds where humans can be led by despotic billionaires. Do you think he has someone in mind? When it comes to AI, the author believes it can free us, giving our lives back by automating those tasks that mean we don’t have time for our own well-being,

families and friends. But he warns AI can also be used to control us on a scale that has not been seen before: “AI can be the tool that not even George Orwell predicted.” It is now down to us to decide the future, remembering AI isn’t going away. It will shape the future of work and we are the only people who can make sure this future is a positive one. PQ rating: 5/5 The well-being of humans and the planet are inextricably linked, and the aim of this book is to help improve the daily lives of ordinary people. Job done, Matt. 35

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

Bandit FD

One of Gipsy Hill Brewery’s great beers is Bandit Pale Ale, which is gluten free (if that’s important). The tasting notes say it ‘zips with citrus zest with a soft piney bitterness’. Perfect then for park days and the eternal hope of sunshine. And as it says on the tin: “Bandits are best together.” But that is not what interested us about the beer. It was the fact that the can features Sarah, Gipsy Hill’s finance director. Sarah has been FD for nearly four years and trained with EY as an AC. She is also a runner, raising $30k by running 12 marathons in 12 months (self-funded) for victims of conflict in Myanmar. There can’t be many FDs who have featured on a can of beer!

ONE TO WATCH

Accountant in the mix

Some 13 new hopefuls lined up to showcase their baking skills in the 14th series of GB Bake Off. Along with a database administrator, teacher, and student was 60-year-old accountant Keith from Hampshire. He was hoping the competition would help him increase the complexity of his bakes. He explained his love of baking can be traced back to when he bakes apple pies and fairy cakes with his mum as a kid. Unfortunately, Keith only lasted to week two.

When cash was king

Cash payments rose for the first time in a decade last year, as it appears fears over the cost-of-living crisis meant more people turned

to physical currency. However, while total payments increased to 6.4 billion due to the high volumes, the share of payments using cash actually fell, from 15% to 14%. A decade ago 54% of all payments were made in cash. The stats from UK Finance reveal 21.6 million people used cash only once or not at all in 2022, down from 23.1 million the year before. There are just under one million people who mainly used cash in 2022, down from 2.2 million five years ago.

Christmas is coming…

The Spider’s Web: Britain’s Second Empire, directed by Michael Oswald. At the demise of empire, City of London financial interests created a web of secret offshore jurisdictions that captured wealth from across the globe and hid it behind obscure financial structures. Today, up to half of global offshore wealth may be hidden in British offshore jurisdictions and Britain and its offshore jurisdictions are the largest global players in the world of international finance. How did this come about, and what impact does it have on the world today? Both John Christensen and Lord Sikka feature and this documentary has had 50 million views. See https://www.youtube.com/watch?v=4n3txSCoKn0.

’ WEV E

No one can say ACCA Ireland aren’t on it when it comes to organising their Christmas lunch! They started advertising the charity event in aid of Lust for Life in early September. Sound like a cracker too, as you will be entertained by Niall Breslin (Bressie), an Irish musician, former Westmeath Gaelic footballer and Leinster rugby player. So you need to get along to the InterContinental Hotel Dublin on Friday 15 December at noon. We love the fact that the booking form says ‘duration 5 hours’. Sounds like it’s going to be a good one, and all for just €125! To book your place go to https://tinyurl. com/5n8hu5cd

GOT THE L OT

PQ book club giveaways

Relaxing patterns

We have more great books to give away this This month we are giving away three copies of month. All have been reviewed for the PQ ‘Relaxing Patterns – an adults colouring book’. magazine Book Club and passed the test! Up Do you need a break from work, exams or even for grabs are ‘Innovating for Diversity’ by Bertina that beautiful family of yours? Well, it’s time to Ceccarelli and Susanne Tedrick; ‘The Pocket relax with the ultimate colouring book. There MBA: A woman’s playbook for succeeding in are 50 unique, stress-busting designs to colour business’ by Jodi Cottle; ‘Ruthless Caring’ from in to your hearts delight! Amy Walters Cohen; and last and by no means To be in with a chance to win one of these least, Jim Fielding’s ‘All Pride and No Ego’. fab books simply email us at guveaways@ For the chance to win one of these books in pqmagazine.com with your name and address our lucky dip just send an email headed ‘November book club’ to and we will put you in the hat. Head up your giveaways@pqmagazine.com along with your name and address. email ‘Relaxing patterns’. Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 8 May. The main draw will take place on Monday 11 May 2020.

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 17 November 2023. The main draw will take place on Monday 20 November 2023.

TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM 36

PQ Magazine November 2023

PQ magazine, November 2023

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