PQ magazine, November 2018 by PQ magazine

PQ magazine November 2018

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

AWARDS

win yourself a PQ!

AAT tv

Tune in to exam success

Meet a reluctant superhero

The Dark Side of Accountancy: Ethical Dilemmas and Sustainability Challenges Wednesday 28 November 2018, London

Find out more inside Conference in partnership with PQ Magazine and London South Bank University Book your free place

Did you get the Case Study result you wanted?

Courses Starting Now Book your course

Yes

Our Objective Test courses are starting over the next few weeks and they have everything you need to keep you on track and achieve exam success.

If you didnâ&#x20AC;&#x2122;t get the results you wanted, our comprehensive Case Study courses include a Pass Guarantee to support you through any further resits.

Regardless of your result, planning your next step with Kaplan is easy! 0330 107 5144

kaplanfinancial.co.uk/cima2018

comment PQ

CONTENTS

News 06Fake degrees ACCA cracks down on dishonest students 08AAT pass rates How hard is it to get a distinction? 10The future Your qualification will continue to be relevant, says one leading expert Features, etc 04Mind your Ps&Qs How long should it take to get qualified? Confusion over CIMA’s letters; and are there too many trainee accountants? 12Distance learning What makes a good online course? 13PQ Awards 2019 Why you should be entering the UK’s finest accountancy awards

14AAT spotlight We outline the changes to the association’s Foundation assessments

15LSBF initiative College set to roll out AAT tv channels

November 2018 25ACCA viewpoint Why you

must understand the importance of robotics and AI 27Profile Meet CIPFA education chief Lindie Engelbrecht 28Corporate governance ICAEW top man Michael Izza gives his views to PQ magazine 29Careers Life at CIPFA; the best of social media; and our Book Club review 30Fun stuff – and our giveaways The columnists Robert Bruce Business expertise will help design the future 6 Prem Sikka Financial regulation does have a positive impact 8 Zoe Robinson What have accountants ever done for us? 10 Subscribe to PQ magazine It’s FREE – go to www.pqmagazine.com ABC July 2017 – June 2018

18PQ Agony Aunt Caron Betts

31,954

wants to keep you on the right side of the law

20CIMA case study Top advice on how to score heavily in the Operational level case

22Trading losses Part two in our three-part series

23ICAEW resources Make the most of what’s on offer

24ACCA exams How to get a pass in the SBR paper

Publisher’s statement: We send a digital issue of the magazine to an additional 7,407 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)

We need more superheroes! Hope you like our fun front cover. We are always on the hunt for accountancy superheros, and if you know of any we have missed do tell us! PQ magazine has been harking on about fake degree certificates for some time now, and in truth it was only by chance that we came across the Middlesex University scam (see page 6). I have to admit I regularly troll through the disciplinary cases of the professional bodies (yes, I am that sad). We will be digging further, to see if anyone is doing anything about ‘Mr B’ who is selling these documents at 120,000 rupees a pop. That translates into £750, and equates to just 25% of the costs imposed by the ACCA on the students found guilty of using forged documents. Someone I was speaking to said these students should be reported to the criminal authorities in their home country, as they could join another profession and do the same thing. In the UK you can get up to 10 years in jail for fraud by false representation. I will also be contacting the AAT about the number of members who are currently being brought before its disciplinary committee for “providing self-employed accountancy services to the public without a licence and without appropriate anti-money laundering (AML) supervision”. There were 13 cases in the most recently published list and some clearer guidance may be needed in this area. Conference call Don’t forget, there’s still time to sign up to our free one-day conference. We have again joined forces with London South Bank University to put on what we’re sure will be a leading edge conference. We have a whole stream just about getting your career on track, and even have CIMA’s team telling you all about the skills gap and how you can fill it. Secure your free place at lsbu.ac.uk/whats-on. Just drill down to 28 November and Eventbrite will do the rest. Graham Hambly, PQ magazine editor (graham@pqaccountant.com)

JOIN THE CONVERSATION AT THE BOOKKEEPERS SUMMIT 26 & 27 November 2018, London Heathrow

“ The best conference of a professional body.” Sage

0203 405 4000 www.bookkeeperssummit.com/pq

“Eye-opening and totally inspirational.” Bookkeeping Leeds Ltd

The Institute of CertiÞed Bookkeepers

#BookkeepersSummit #LucaAwards

PQ have your say

email graham@pqaccountant.com So much to do As someone who has been involved for many years in accountancy training and education in firms and institutes I hope you will let me have my say. PQ not only keeps me up-todate but is always interesting and independent. In the October issue there were a couple of points on which I would like to comment. That includes some from ‘Name and address supplied’, who seems to be your most prolific correspondent. It is no wonder he or she is struggling with their studies, as they admit, if they are spending so

much time writing letters! The article ‘Five long years and still going’ states that “over 170,000 accountancy trainees are still studying five years after they

first signed up to their professional accountancy body”. It has always been my contention that a successful training body should have 80% completion of training within the agreed training period. That means that they have recruited students capable of succeeding; the quality of training is sufficient; the work experience is monitored so that it is at an acceptable level; and salaries paid are at an acceptable living level, so that there is no stress from the problems of living. It will always be the case that some students will not succeed

within the expected training period. There are legitimate reasons for such: illness; poor application; family or work problems; belated realisation of having chosen the wrong job; or a lack of understanding of what is needed. Finally, I’d like to agree with Andrew Elgar, who pointed out in a letter that “getting any degree shows a level of intelligence, application and determination”. Years ago, a student in my firm left soon after completing the national induction course. Having stated that accountancy was too much “figure work” she joined a bank! Keep up the good work. David Hunt, by email

Our star letter writer wins a fantastic PQ mug! CIMA letters ‘issue’

Malteser madness

I am concerned that the CGMA letters promoted by CIMA are not an approved ‘Chartered’ designation by the Privy Council (see Privy Council website for details). What is equally confusing is CIMA’s Royal Charter and Byelaws are clear on which letters may be used. The only letters approved in its Royal Charter and Byelaws are the ACMA and FCMA. CIMA’s Council is most aware that the CGMA letters are not approved by the Privy Council. It can only be puzzling that CIMA not only pretends that this is not true but willingly misleads its many students of these facts. The ones that will lose in this deception are its many innocent students. These acts by CIMA bring not only disrepute to its many members but the accounting profession as a whole. Clearly its members have no control over its elected Council members. Cliff Moggs, by email The editor says: We would welcome a response from CIMA.

Come on PQ, lighten up! I’m referring to your article on the Maltesers advert, in which a young woman is worried about telling her parents not that she was vegetarian or a lesbian but an accountant (PQ, October 2018). Personally, I thought it was very funny. OK, so it played to the stereotypes about accountants that we all know all too well, but the intention was humorous.

Future fears Being a bit of a ‘stats fan’ I enjoyed reading your article ‘Key facts and trends’, your analysis of the latest report from the Financial Reporting

I need pqjobs.co.uk

Gone are the days when I lie to people I’ve just met about what I do. If people have ‘issues’ with accountants that’s their look-out. Anyway, I do enjoy reading PQ – keep up the good work. Now where did I put that packet of Maltesers? Name and address supplied Council (PQ, October 2018). One number really stood out for me – your ‘headline’ stat that there are 164,000 accountancy students in the UK and republic of Ireland. This seems an extraordinary number – where are all the jobs for these trainees going to come from?

We’re already seeing the robots taking over a lot of so-called ‘low level’ accountancy jobs, and surely this trend will only continue. The high fliers will be fine, but I worry for those who struggle with their studies. Peter Smith, by email

Well done, ICB Well done for publicising the ICB’s excellent series on inspiring women. These interesting articles are well worth checking out – go to the ICB’s website. Louise Harrison, by email

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

Published by PQ Publishing © PQ Publishing 2018

Be ambitious. Study one of our courses in Accounting and Finance • Undergraduate, Postgraduate and professional course options available • Part time options to fit other commitments • Advanced entry on to year 2 of BA (Hons) Accounting and Finance (with optional placement), with ACCA F1-F3 or AAT level 4

• Join a respected, award-winning institution, that prepares you for future career success • We are the Public Sector Accountancy College of the Year (PQ magazine Awards, 2017 and 2018)

Accountancy college of the year

Get in touch: 0800 923 88 88 | Course.enquiry@lsbu.ac.uk | www.lsbu.ac.uk Numerous accreditations and professional links:

PQ news

ROBERT BRUCE Business expertise is the key to designing the future Dropping in on events in London Design Week taught me two things. First was the sheer exuberance and energy of many of the young people involved. Second was the importance of an understanding of both the application and possibilities brought about by engineering. Everywhere one looked there were ideas in profusion. It was exhilarating to be among people bursting with ideas and what those ideas might one day turn into. What there weren’t, as you chatted with everyone around you, were the people with the equivalent of the design engineers. They all had ideas of how to progress. They all understood the importance of business plans, supply chains and regulation, even though all that seemed dull compared to the shiny wonder of the design prototype. What they needed were people to take a sharp external look at how the enterprises were shaping up. It was not business discipline that people needed – what was really required was the type of financial expert who could also look critically at something and see the way forward. But this way forward would be the one that led to a proper business with a good product and the right marketing. It needed a sharp financial eye and acumen, but expressed in a way that would take the designers with them. In other words what was needed was collaboration. This does not always come easily to the two sides of the process that you hope will lead to synergy. But that is how bright ideas make it to the marketplace. Robert Bruce is an award-winning writer on accountancy for The Times

Fake degree scam ACCA has cracked down hard on a number of students who all claimed to have been awarded degrees from Middlesex University that were obvious forgeries. PQ magazine reported in August that in the past year the estimated number of forged degrees for sale has risen by 30%, and ACCA’s latest action shows it is very much on the case. Some 18 students to date have gone before the ACCA disciplinary committee, with the cases looking very similar. Of these, 17 involved students from Pakistan, with one student from Iraq. Although each case was investigated separately by the committee, ACCA acknowledged that these were “a series of similar

cases listed in a ‘warned list’ over a seven-day period”. In most cases, students submitted a Middlesex University Bachelor of Arts in Accounting &

Finance degree certificate along with a transcript and certificate of credit, outlining the grades achieved for every module. ACCA quickly formed a view that these documents were not genuine and started an investigation. A big hint was the fact that the name of the

degree was misspelt! At all the hearings the ACCA brought in a conferment and assessment manager from the university who verified that the documents weren’t genuine. Interestingly, at one hearing a student admitted they paid 120,000 rupees to a ‘Mr B’, who helped with exemptions. The students were found guilty of dishonesty and acting contrary to the fundamental principles of integrity. Most students were removed from the student register and ordered to pay costs to ACCA of £3,000 each. Two students, however, got bigger fines – one for £3,600 and one of £3,900, along with their notice of removal. These could be for aggravating factors. Finally, one student was ordered to pay costs of £6,693.80 and was severely reprimanded.

Average salaries reach record levels Salaries for accounting roles across the UK saw a massive jump of 8.8% in September, when compared with data from the same period in 2017. This hike in pay means that the average salary for accounting professionals has reached a record high of £34,660. This compares favourably to average legal salaries of £34,660, but not with those in IT, which are averaging £44,090.

The figures were compiled by CV-Library, who say that the on-going skills shortages are a prime reason for the rise. Employers are also upping salaries to try to convince candidates who seem less reluctant to move from secure jobs. And it is not only salaries that are on rise. Job vacancies in September also saw an increase, jumping 10.4% when comparing year-on-year stats.

Brexit recruitment boom for graduates next year Graduates leaving university next summer will find a plethora of jobs in the public sector, according to figures in The Times’ ‘Top 100 Graduate Employers’ survey. It found that for the first time in a generation there will be more

vacancies in the public sector than there are in the accountancy and professional services sectors. PwC, voted best graduate recruiter for the 15th year in a row, is looking for 1,350 graduates. However, the civil service fast

Got the knowledge? AAT has launched a new knowledge hub for members, aimed at keeping them updated with the latest developments affecting tax and accounting. AAT members wanted a single place where they can access technical content, so the hub was created using hundreds of articles, podcasts and e-learning material. Fresh and exclusive content will be continually added to ensure AAT’s are updated. Log onto the hub at aat.org.uk/knowledge-hub.

Diversity measures lacking Just 15% of FTSE 100 companies fully complied with the UK Corporate Governance Code’s provisions on diversity in the boardroom, according to research conducted for the FRC by the University of Exeter. Companies should be describing four measures: their policy on diversity; the process for board appointments; their objectives for implementing the policy, and the progress on achieving them. The revised UK Corporate Governance

stream wants to hire a record 1,500 graduates for our post-Bretix world. Teach First, the NHS and MI5 are also upping their games. Teach First wants 1,750 recruits, the NHS 500 graduates for its management programme, and MI5 needs 200. That all means there are 5,268 vacancies in the public sector and 4,850 in professional services. Overall, there will be 22,168 vacancies among the top 100 employers, up 8.2% on last year.

In brief CIMA case study exam kits HTFT is again offering its 50 long-form task and solution case study exam kits for the November sitting. These £50 exam kits provide exam-style tasks from all three CIMA pillars, and then relates them directly to the current case. HTFT has kits for the Operational, Management and Strategic level. Click on the special offers page on its website – for more go to www.htftpartneship.co.uk. To order your exam kit you need to email bookings@htftpartnership.co.uk. 6

Code takes effect from 1 January 2019. College launches AAT tv LSBF has launched free-toview television channel – AAT tv. Every Friday from 12 October to 14 December AAT students can watch top tutors take them through each paper, in 30-minute slots. Once they have gone live the shows will only be available for a limited amount of time before they leave your screens. Take a look at the tv guide on page 15. PQ Magazine November 2018

Get ahead. Start studying towards the March sitting. We know exactly what it takes to study towards your ACCA qualification. We educate professionals from over 90% of the FTSE 100 As an ACCA Platinum Approved Learning Partner, you can be confident that our approach isnâ&#x20AC;&#x2122;t just engaging, itâ&#x20AC;&#x2122;s more successful too. And our ACCA Approved Content means you have access to high quality study materials, along with a variety of courses to get you exam-ready.

Book your March sitting course today. Call us on Phone 03300 603 100 or visit Globe bpp.com

PQ news

PREM SIKKA Regulation does have a positive impact Despite the 2007-08 banking crash and its consequences, some elites are calling for deregulation – or leave it to the markets. They forget that without state-backed regulation there would not be even a minimal level of trust in banks, insurance or pension firms. Likewise, the transport system requires rules about levels of safety of trains, airplanes, roads, railway tracks and air traffic control. Corporate boardrooms have long produced new diseases, such as mad cow disease, obesity, thalidomide and smoking-related cancers. No market or corporation voluntarily addressed the harmful effects of deadly products. Corporations would not voluntarily provide broadband or bus services to rural areas. They have to be cajoled by governments. After long struggles, people have persuaded the state to enact laws to secure employment and gender rights. Only public regulation enacted by the state has facilitated some control of the length of the working week, holidays, sick pay, the right to join a trade union, minimum wage, health and safety, consumer rights, and much more. Only public regulation can give people a decent wage, healthcare, education and can enhance social welfare through redistribution of wealth. This is not a call for more intrusive rules, but rather for reflections which show that public regulation has the capacity to introduce binding norms, order, stability and predictability. Only public regulation can give people enforceable rights. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

Passing with distinction The AAT’s latest pass rates come with a break down of the number of passes, merits and distinctions awarded to AAT PQs at the various levels of the qualification. And the stats show that getting a distinction doesn’t always come easy. Education chief Suzie Webb (pictured) had promised more transparency in this area at the AAT’s annual conference earlier this year, and she has delivered on that promise. The figures show just 3% of those sitting the Professional Diploma in Accounting managed to gain a distinction, with a further 46% gaining a merit. Distinctions were slightly more prevalent at the Advanced Diploma in Accounting level, at 18%. The stats are, however, turned on

CIMA update CIMA’s new syllabus is on track to be ‘presented’ to the world in early 2019, PQ magazine can confirm. The institute has learnt the lessons from the last ‘bigbang’ announcement, and is consulting heavily with key stakeholders this autumn before the big unveil in early 2019. Any transitional arrangement will be announced at the same time, CIMA has promised.

three are all hovering around the 50% pass rate. Cash & Treasury Management has the lowest individual pass rate this time around at exactly 50%. Access to Bookkeeping (ATBK) at 95.7% and Business Communications, Personal Learning Skills (BPLS) at 94.7% are the assessment with the best pass rates. • See next month’s issue for those pass rates in full.

AAT QUALIFICATION AND GRADES Foundation Certificate in Accounting Foundation Diploma in A&B Advanced Diploma in Accounting Professional Diploma in Accounting

Pass 5% 11% 28% 51%

Merit 43% 71% 54% 46%

Distinction 52% 17% 18% 3%

Are you working hard enough? Work is tough enough without hating the people you work with! However, new research has revealed that nearly half (47.5%) of accountants ‘dislike’ or find their co-workers ‘frustrating’. The worry is that many fellow accountants are seen as just plain lazy – some twothirds of respondents claimed their colleagues don’t work hard enough, with a further 89% stating this impacts on how they feel about

their jobs. That all means 41% of accountants believe their workplace has a negative atmosphere. Differences in salaries is also stoking the fires of disconnect. One in eight accountants told researchers that they discuss their salaries with colleagues. But 60% admit they become jealous if they don’t earn as much, or if their co-worker receives a pay rise and they don’t.

Those late filing excuses… Each year Companies House receive a whole stack of unusual excuses from directors who fail to file their company accounts on time. Here are just some of the most outrageous reasons given: “I found my wife in the bath with my accountant.”

PwC’s annual report PwC UK has reported revenue of £3.76bn for the year ended 30 June 2018, up 5% on last year. During the year some 3,441 people joined the firm, including 1,297 graduates and school leavers. The report reveals that 104,000 people applied for a job with PwC. Of the new hires 46% were women and 29% were BAME. The figures show the firm’s total tax contribution was £1,182m. Profit was £935m and the average distributable profit per partner before tax was £712,000. Marriage equality for N Ireland Deloitte is calling on decision-makers to say “I 8

their heads for the Foundation Certificate in Accounting. Here 52% of PQs achieved a distinction, 43% passed with a merit, and just 5% just passed. When it comes to the worldwide pass rates for CBAs (for the 12 months to 30 June 2018) three papers stand out as ‘the toughies’ – IBLW, CTRM and PDSY. These

“Pirates stole my accounts.” “Goats ate my accounts.” “We delivered the accounts to the betting office next door to Companies House.” “A volcano erupted and prevented me from filing.” “My company was more successful than I thought it would

do” to marriage equality by publicly signing a letter in the support of same-sex marriages in Northern Ireland. Deloitte’s Jackie Henry said: “We are proud of our commitment to an inclusive work environment, where all of our employees can bring their whole selves to work.” She said Deloitte’s stance on marriage equality makes it more unified as a firm “and that supporting this campaign is the right thing to do for our clients, our people, our communities, and society as a whole”. Payday buzz is short-lived New research from KPMG has found that more than one in five UK adults aged between 25-34 spend 60% of their income the very day it enters their accounts. Some 3% of these find

be, so I was too busy to file.” All the above excuses were given late filing penalties and you won’t be surprised to learn that all their appeals were also unsuccessful.

themselves still in the red even after their pay has gone in. KPMG’s Jon Holt explained: “With so many young people spending so much of their income on payday it’s little surprise that people are forced to rely on credit to get through the rest of the month, let alone to cover unexpected expenses.” Money hub launched EY must have read KPMG’s latest report as it has launched a financial wellness hub for its people in the UK. The initiative ‘You+Money’ aims to help staff understand their financial situation and their attitudes and behaviour towards money. It also provides tools, resources and information to help them take steps to improve the health of their finances. PQ Magazine November 2018

Tutors, are you spending too much time checking “10” = “£10.00”?

Any order

Popup with model answer & question advice

Adds totals

Optimise Your Time & Value Learning platform built for accountancy Understands 42 currency formats Replicate AAT’s test functionality Instantly gives feedback and study advice to students Frees up your day to engage with the students

“Rogo has revolutionised the lives of our tutors and students” Gareth John, Executive Chairman, First Intuition

getrogo.com +44 (0) 203 151 1331

PQ news

ZOE ROBINSON What have accountants ever done for us?

Wanting to become a qualified accountant is perhaps a strange ambition; a lawyer fights for justice, a physician extends human life, but an accountant? What is their role in society? This is an important question as new technologies make existing skills redundant. Important because it falls to the accounting bodies to remain true to the essence of what being an accountant means, while ensuring each new member is highly employable. We might glean some insight from taking a closer look at what the major accounting firms see as their purpose. PwC, for example, exist to build trust in society and solve important problems. EY want to build a better working world; Deloitte, make a positive enduring impact that matters; and KPMG inspire confidence and empower change in your business. You could be excused for not recognising these as having anything to do with accountancy, but each offers something to point us in the right direction. In addition, underlying these ambitions lie the competencies and values that make them possible. These include integrity, trust, honesty, technical competence, acumen and professional scepticism. After such a short analysis it would be far too ambitious to answer the question I asked at the start of this column. But, in a post-truth world, where it seems everything is open to interpretation, there is a need for a trusted professional whose opinion is valued, their data reliable and agenda neutral. Zoe Robinson is Learning and Programmes Director at Kaplan Financial

Accountancy has a future The need for an accountancy qualification will be as relevant in 10 years’ time as it is today, claims big data expert Sam Ellis (pictured). He admitted that business intelligence is changing the way accountants work, but the core qualification needs to remain the same. “PQs still need to learn the accounting basics,” Ellis stressed. And he should know – he is head of operation and finance at business intelligence firm Interworks and an FCCA. He explained: “We still need people who know how profit and loss works, how compliance is done, and can interpret a management accounting report.”

If PQs fast-forward five years there will be an element of data science in their role, he said. To be honest, many are doing some of it now, but in the future it will be much clearer. What is important, stressed Ellis, is that accountants don’t run from the importance analytics will play.

“Instead they should rush towards it and own it,” he said. One thing accountants may have to learn is to move away from the idea that Excel is the ‘one tool that rules all’. It is still fine for ad hoc data crunching, but a modern platform would help accountants so much more. Remember, it was never built for sharing. Accountants will also have to move out of their silos, and show they are the ‘problem solvers’, he said. That means providing information live and in real time. Ellis emphasised that if businesses see that accountant can do this then they will remain relevant for the next 30 to 40 years.

It’s awards time! Now in their third year, CIPFA’s Public Finance 2019 Awards are now open for entries. There is one category that should appeal to CIPFA PQ and NQs – The Public Finance Future Leader of the Year. This award recognises an individual who can demonstrate they have made an outstanding contribution early on in their career. The judges will be looking for

Show your workings Muddled and non-existent workings is hindering ACCA candidates in both the paper based and CBE exams, says the F7 examiner. Students were told that the marking team are unable to award any marks for incorrect balances where no working exists. The examiner stressed that showing your workings, in an organised

someone who has displayed exceptional abilities and has potential to excel in a leadership role. Entrants for this award can be nominated or self nominated. The deadline for entry is 26 October. And, if you can’t find an award to enter then there still plenty of time

Revellers at the CIPFA awards 2017 to enter the PQ magazine awards! All the details are on page 13, which will prove lucky for some.

manner, is crucial to enable the marking team to award the maximum marks available. The own figures rule remains a key factor in the constructed response questions, the examiner said. So, where candidates fail to deduct the issue costs from the nominal value of a loan note issued in the year they can still gain credit for both the statement of profit or loss effective interest and the completion of the amortised cost method using their own figures. He said: “If no working was shown then these marks would be lost.”

JOB OF THE MONTH

computerised payroll administration and introduction to payroll at Level 1 and Foundation, but it does not go beyond this point.

programmable. Betts own favourite is her old faithful Casio fx-85GT. Her blog then provides a series of tests to see if you really know your calculator. Give it a try at: blog.avadolearning.com

The Bedford Estates is seeking a Financial Accountant who will appreciate the opportunity to work with its diverse and complex financial environment, and can demonstrate a flexible approach to the role. The successful candidate will probably be ACCA qualified (or nearing completion of the ACCA qualification). Apply at: https://www.gaapweb.com/job/39 50392/financial-accountant/ (closing date is 25 October).

In brief A tax apprentice It’s The Apprentice time on BBC and the 16 candidates included a tree surgeon, IT analyst, law graduate and even a tax advisor, in the form of David Allen (pictured). Allen, from East Yorkshire, says: “My friends and family call me the Duracell bunny as I take on so much and never stop. I just keep going.” He claims his tendency to be too trusting could be his downfall, but he is confident his ability to stay 10

positive and ‘talk to anyone about anything’ will see him through. Payroll qualification The AAT has promised PQ it will be looking at how much of an increased role payroll needs to have in the upcoming qualification review. PQ editor Graham Hambly recently took the concerns of some tuition providers about the lack of advanced payroll in the qualification to the very top. It was pointed out there was already

Know your calculator ACCA PQs need to rely on the answer their calculator has given them, says Avado’s Caron Betts (pictured) in her latest blog. ACCA uses the Texas Ti-30XS MultiView Scientific Calculator for the CBEs. You can also take your own calculator into the exam, she explains, but it must be non-

Budget time Chancellor Philip Hammond used twitter to announce the date of his Budget – Monday 29 October. The Budget will be just weeks before PM Theresa May faces the final showdown on her Brexit plans. PQ Magazine November 2018

YOUR DEDICATED TUTOR SUPPORT We believe who you learn with can make all the difference. That's why we hand-pick the best tutors to inspire, motivate and support you throughout 5+1. course. Not only do our tutors deliver our ACCA programme but have also had a hand in designing and building each paper. They draw on their years of teaching and industry experience to break down the subject matter into more manageable pieces and help bring it to life with real world examples.

AVADO, the tutors know me as an individual “ With and can support me based on my strengths and weaknesses. ” – Dhara Mehta, ACCA Student

To get more information or to sign-up Call today on 020 3911 3370 www.avadolearning.com/pq

PQ distance learning

What makes a good online course? What should you look for in an online training course? Mark Ingram explains all

stare into my strong, black coffee and go back to YouTube, where yet another video on corporate finance fails to untangle my confusion. Who really understands this stuff? Who can help, and has time for me and my questions? I’m an average student, but I just don’t get what the examiner wants. Is it just waffle (it seems like it sometimes)? Is there a process I can follow? And the formulae – so many letters. Maths was never my favourite subject, and yet at least school maths was logical. YouTube hasn’t worked. It can help, but with the more advanced papers the ‘curious anarchic learner’ approach has failed me. And I’ve not got much time – I need something more. I could enrol at my local college. I like the social side, but it involves an hour’s commute, and I have a tendency to zone out in class, or ask stupid questions. And would I get one of the good tutors? It feels risky. Last time I tried an online course. They called it ‘gamification’; I had to pass each test before I could move up a level, and they talked about andragogy. But when I didn’t understand

something all I got was a student chat room, and lots of other confused students guessing the answer for me. Not helpful. It felt like YouTube, only this time I’d paid. Don’t get me wrong, I like videos. I like being able to rewind and replay the tough bits. The best videos are either tuition type videos (anything over 15 minutes I want indexed) or are what I call ‘Jamie Oliver question debriefs’: getting to see a master set up a question, and demonstrate that it can be done in the available time. I’m not bothered whether they’re 10 minutes or an hour, so long as they are good. How do I know if a video is going to be good? I watch a sample – not the marketing video, but a sample of an actual video. And once I’ve found the right tutor I try to follow them through both tuition, revision and mock debriefs. There’s nothing worse than getting conflicting stories from different people. Videos + pdf notes work best for me. That way I can print and annotate the notes as if I’m in class. It takes a bit of discipline, and I have to follow each video with a couple of questions to

check I’ve understood, but the pattern works and I can do it at my own pace. Videos need to be interesting. For example, I remember learning about M&M. My text gave me Vg = Vu + DTc. Dry and far too many letters. Then I watched the video “In the 1970s they realised the fastest way to generate shareholder value was to pay less tax (legally) by taking on debt. But more debt meant more financial risk, which required more business flexibility or the business went bust. So, ultimately, M&M, plus a few other factors, have given us the gig economy.” Suddenly ‘tax shield’ and ‘optimal capital structure’ meant I had loads to say in exam questions. I also need structure – a timetable, homework questions, mock exams, a marking service – and most of all someone to answer my questions. And fast. A ‘24 hour working hours’ response time isn’t enough for me. If that sounds demanding, well, it is. I want my tutor to respond, if they can, within a few hours. Online learning isn’t so different from face-toface classes: it’s all about finding a tutor who understands all this. To pick a decent online course decide what your learning priorities are, and make sure you get them. Be demanding. And chat to the tutor before you buy. PQ • Mark Ingram runs FMELearnOnline.com.

A leading qualification for a changing world The role of the professional accountant is becoming more important than ever. That’s why we’re evolving the ACCA Qualification to keep it current and maximise your employability to give you the professional edge in a changing world. Key changes include:

Session CBEs Available now

Ethics and Professional Skills module Available now

Strategic Professional Available now

Find out what this means for you: accaglobal.com/examchanges

PQ Magazine November 2018

Awards 2019 PQ

YOU DESERVE A PQ! Who is going to win one of our ‘PQs’? Well, it’s really up to you!

Family fun: our very first PQ of the Year Emma James, pictured in 2004 with her daughter Shannon

CATEGORIES • • • • • • •

PQ OF THE YEAR NQ OF THE YEAR DISTANCE LEARNING STUDENT OF THE YEAR

ime stops for no one and we need your nominations for the PQ awards 2019. Our awards give you the chance to stand out from the crowd and make your CV a bit special. There are 18 trophies up for grabs, and we like to think each year the awards get bigger and better – hey, we have more sponsors than ever before this year! The first-ever PQ magazine awards were launched way back in 2003, with just three categories – Student of the Year, College of the Year and Lecturer of the Year. Our first Student of the Year was Emma James, who at the time was an AAT trainee. She went to to study ACCA qualification and is now a senior lecturer in accounting at Swansea University School of Management. The other winners that night were lecturer Paul Moore and Reed Business School.

That was 15 award ceremonies ago, and we are hoping our 16th one will help create other fantastic future stories. So come on, get nominating, and get your place booked at the Café de Paris. All we need is 250 words on why you think your nominee should win (and yes, it can be you). Please state clearly which category you are entering, and provide any supporting evidence separately. You can download the nomination form at www.pqmagazine.com by clicking on the ‘pq awards’ bar. Alternatively, just email your entry to awards@pqmagazine.com when you have everything ready. Or post your form to: the Editor, PQ magazine, Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ. The deadline for all nominations is Friday 7 December 2018. PQ

BLAST FROM THE PAST Daliso Chaponda

STUDENT BODY OF THE YEAR APPRENTICE OF THE YEAR ACCOUNTANCY BODY ACCOUNTANCY COLLEGE – PUBLIC SECTOR

•

ACCOUNTANCY COLLEGE – PRIVATE SECTOR

• • • • • • • • • •

ONLINE COLLEGE

How we launched the first awards in August 2003 Below, Paul Sinha enjoys a nice cup of tea

LECTURER – PUBLIC SECTOR LECTURER – PRIVATE SECTOR STUDY RESOURCE INNOVATION IN ACCOUNTANCY BEST USE OF SOCIAL MEDIA TRAINING MANAGER/MENTOR ACCOUNTANCY TEAM ACCOUNTANCY PERSONALITY EDITOR’S SPECIAL AWARD

PQ magazine awards have been around for a long time! We launched our first awards way back in August 2003 with a picture of a naked lecturer! PQ wanted to show just how far some tutors would go to win a ‘PQ’, and this hasn’t changed over the years. Everyone also wants to know who the compère is going to be. Last year it was the wonderful Daliso Chaponda, and we have also had Stephen K Amos, Paul Sinha, Richard Blackwood, ‘Barry’ from EastEnders and Keith from The Office

OUR SPONSORS

PQ Magazine November 2018

PQ AAT exams

All change at Foundation level Sam Hannigan outlines changes to the AAT Foundation assessments

assessments for sitting from 1 November. • 1 November 2018 – The new BTRN and BKCL assessments are available for sitting. The next change to the Foundation Certificate level is to the Elements of Costing (ELCO) unit. The new assessment will see the number of tasks reducing from 15 tasks to 10 and the marks available reduced from 140 to 100. However, the content that will be examined has not changed. The qualification specification content all remains examinable and therefore this should not impact on a student’s study. However, with the number of tasks reducing it will be extremely important that students practise and revise all areas of the syllabus.

he latest changes to be made by the AAT are to the Foundation Certificate level, which will also see changes to the Bookkeeping qualification (they are the same assessments). Bookkeeping Transactions (BTRN) and Bookkeeping Controls (BKCL) have both had the time allowed for the exam reduced from two hours to 90 minutes. AAT has confirmed that the content has not changed, only the time allowed. Students are already asking if they will have enough time to complete the exam. Our advice for those currently studying these units and who will be ready to take the exam before the 25 October is book them in, and take them if you feel ready before the new assessments go live. If you don’t feel ready then practice, practice, practice. It is definitely achievable to complete the exams in the new allocated time. However, you will need to ensure you have covered all your course materials and gained sufficient feedback to ensure you have the best chance of passing. Over the next few weeks many colleges,

including Premier Training, will be working on their practice assessment material to ensure it is in line with the one-and-a-half hours allowed by the AAT. Key dates to remember • 24 October 2018 – The last date BTRN and BKCL can be scheduled and sat under the current time allocation. • 25 to 31 October 2018 – No assessments for BTRN and BKCL can be scheduled during this time. • 25 October 2018 – You can schedule

Key dates to remember • 1 November 2018 – New ELCO practice assessments will be available online, to schedule and sit within SecureAssess. • 20 December 2018 – This is the last date the current ELCO can be scheduled and sat. • 21 December to 2 January 2019 – No assessments can be taken during this period. • 21 December 2018 – You can schedule assessments for sitting from 3 January 2019. • 3 January 2019 – New ELCO assessments go live. PQ • Sam Hannigan is programme manager at Premier Training

Introducing the Strategic Business Leader Our new innovative case study exam, Strategic Business Leader, will enable you to demonstrate the right blend of technical, ethical and professional skills employers want. Registration now open for all students

Find out more: accaglobal.com/sbl

PQ Magazine November 2018

AAT study PQ

Itâ&#x20AC;&#x2122;s time for the TV

PQ magazine went along to speak to LSBFâ&#x20AC;&#x2122;s Rob Sowerby about the launch of AAT tv

PQ: How much does it cost? Rob: Itâ&#x20AC;&#x2122;s all free â&#x20AC;&#x201C; you can access the sessions either live with the opportunity to participate, or to watch it again as a recording for three weeks subsequent to the session (see the schedule, below) for you to book your time, and get settled before your session takes place. PQ: So when does it start and where do I sign up? Rob: AAT tv was launched on 12 October and will air every Friday until 14 December. You can sign up at ulp.lsbf.org.uk/aat-tv PQ

PQ question: So Rob, whatâ&#x20AC;&#x2122;s AAT tv all about? Rob: AAT TV is an opportunity for students to study an AAT paper live, asking tutors direct questions and learning how to address the assessment tasks you will face in the real exam. PQ: What papers are being covered? Rob: We cover all the AAT papers every Friday afternoon with a regular 30-minute slot for each paper. We will look at an AAT sample assessment and over the course of 10 weeks we will address all the assessment tasks within that assessment. PQ: Why should we tune in? Rob: You will learn from the experts on how to deal with the more technical problems, and give yourself the edge when it comes to passing your AAT exams with ease.

Dates for your diary 2018 Friday Friday Friday Friday Friday Friday Friday Friday Friday

12 October 19 October 26 October 2 November 16 November 23 November 30 November 7 December 14 December

Rob Sowerby, LSBF

AAT TV Timetable Channel 1

2pm

BTRN

2.30pm

BKCL

3pm 3.30pm 4pm

Channel 2

Channel 3 MABU

Level 2

AVSY/syn

MDCL

Level 3

BTAX

AVBK

Level 4 Core

PTAX

FAPR

Level 4 Options

FYSA/syn

MMAC

FSLC

ELCO

ITAX

PDSY/syn

4.30pm

$IPPTF :PVS 5VUPS 0OMJOF 5PQ 1BTT 3BUFT

:PVS TVDDFTT JT UIFJS CVTJOFTT Íľ ÎŞ

6XQLO

Ç˛

%KDQGDUL Ç¤

Ç¤

Ěˇ

0XVWDID 0XFKKDOD Ç¤

Ç¤

Č&#x20AC;

$VKLP .XPDU Ç¤

Ç¤

Č&#x20AC;

ÇŁ PQ Magazine November 2018

$&&$ $)0 3 )0 ) &,0$ )

Ç¤ Ç¤ ÇĄ ÇĄ Ç¤ Ç¨Çł ÇŁ Ç¤

Í´ ÎŞ

ÇŚ ÇŚ

Ěˇ

Č&#x2039;

Í´ ÎŞ

ÇĄ

Ç¤

ÇŻ ÇĄ

ĆŹ

Č&#x20AC;

Ç¤ Ç˘ Č&#x201A;

Íž

$&&$ $30 3 30 )

ĆŹ Č&#x152; ÇĄ Ç¤

Ěˇ ÇŚ

Çł

ĆŹ

Ç¤

Ç˛ ÇĄ

$&&$ 6%/

Č&#x20AC; ÎŽ

Ç¤ 15

STUDY YOUR NEXT ACCA PAPER WITH LSBF ONLINE OR IN OUR LONDON CAMPUS

STUDY USING OUR FLEXIBLE ONLINE LEARNING PLATFORM Our ACCA Online course provides you the flexibility to study at your own pace as well as giving you tutor support.     

Choose either live tuition or pre-recorded tuition sessions Live revision sessions including mock exams and MCQ tests Comprehensive online platform HD interactive videos ACCA Approved Learning Partner

Take advantage of Save up to 25% off* you and up to 15% off* y

To apply call us on + 44(0) 20 78

*Terms and Co

LEARN FROM OUR AWARD WINNING TUTORS IN OUR CENTRAL LONDON CAMPUS With our campus course, you’ll gain all the resources you need to achieve ACCA exam and career success.     

Free revision for AB (F1) – LW (F4) papers Award-winning tutors Pass first Time Guarantee™* On demand study materials ACCA Approved learning partner

our autumn offer! ur ACCA online course your campus course

8232303 I lsbfprofessional.org.uk

onditions apply

Classes at Moorgate Bunhill Row, London EC1Y 8HQ

PQ ACCA law

Long arm of the law (paper) Ask Caron This month our friendly Agony Aunt turns her attention to law

he ACCA Corporate and Business Law (LW) exam is the first of the ACCA Applied Skills exams, yet it is an ondemand CBE. As such it is a shorter exam than the other papers in that level, but can be challenging nonetheless. To help students tackle the English variant of the paper, ‘Aunty Caron’ answers some of the more popular student queries.

It’s rote learning. Right? Dear Caron, I’ve looked through the course notes and it seems that I just need to be able to memorise a bunch of rules and cases and I’ll be OK. Is there something I’m missing? Yours faithfully, Loving the law Caron writes: You are missing something! This paper is not that simple. As an Applied Skills level exam, the examiner is expecting students to be able to apply their legal knowledge. Although you are training to be an accountant and not a lawyer, you will find that you’ll need to have a good grasp of certain legal matters, such as forming a contract, how partnerships work or the role of the director. Therefore, in the exam you’ll find that Section B has three scenario questions where you’ll be faced with a problem and you’ll need to select the correct advice. Rules of statutory interpretation Dear Caron, It seems to me that the Mischief rule and the Purposive rule are the same thing. Are they? Yours faithfully, Lost in law Caron writes: The aim of the statutory interpretation rules is to provide the judge with a framework on how to interpret the relevant legislation in a case. The Mischief rule builds on principles established in the Literal and Golden rules so that judges would consider the specific ‘mischief’ that the Act was introduced to fix when making their judgement. For example, the Licensing Act 1872 made it an offence to be drunk in charge of a ‘carriage’, and when Mr 18

Corkery was found to be drunk in charge of his bicycle the judge determined that the Act was there to prevent such actions, even though it could be argued a bicycle is not a carriage. (Corkery v Carpenter). The Purposive rule simply takes a more modern approach and allows judges to interpret statutes according to their purpose; namely, what Parliament intended to do when they wrote the legislation. We can see this in the Equal Pay Act case, where the judges agreed a woman warehouse operative should be paid the equivalent as male warehouse checkers because the work they did was of equal value. The Act was intended to ensure all staff were paid the same dependent on the work they did, rather than their gender (Pickstone v Freemans plc). As you can see, the rules are pretty much the same and the Purposive rule simply helps judges apply statute in the modern world! Employee dismissal Dear Caron, I am confused about whether an employee can claim for wrongful or unfair dismissal. How can I tell? Yours faithfully, Employment law eludes me Caron writes: Wrongful dismissal occurs where an employee has been dismissed in breach of their employment contract. Remember, an employment contract is just like any other contract, and if the parties fail to do what they agreed then a claim for breach of contract can be made. In employment law we call this a claim for wrongful dismissal. The most obvious example is when an employer fails to give the correct notice period. Unfair dismissal occurs when the employee is dismissed for any reason that is not fair. Legally valid reasons for dismissal are: • The employee is incapable of doing the job

(for example, a van driver loses their licence). • The employee is guilty of misconduct (for example theft from the employer). • The employee role is redundant (for example the employee’s job no longer exists). • Any other substantial reason (for example the non-renewal of a fixed term contract). It is up to the employer to justify their reasons for dismissal. Fixed and floating charges Dear Caron, I have seen the term ‘charge’ in my notes but am not really sure what it means, or why some are fixed and some are floating. Can you explain? Yours faithfully, Confused by charges Caron writes: Consider a bank preparing to lend £1m to a company. The bank may be worried about the company defaulting (failing to pay) on the loan and therefore want some form of security. Let’s assume the company owns a factory valued at £1.5m. The bank can take out a charge for £1m over the factory meaning the company then cannot sell the factory without notifying the lender and repaying the loan. We would call that a fixed charge. Let’s assume we have a second company wanting to borrow £100k and they have the following assets: machinery £75k; inventory £50k; and receivables £25k. In this case, the bank could still take out a charge over the assets. However, the company doesn’t want to have to notify the bank every time they trade with those assets and so the bank has a floating charge instead. Watch out! If the company defaults on the loan, then the floating charge crystallises at which point the company is prohibited from trading in those assets. PQ • PQ’s Agony Aunt Caron Betts is an ACCA tutor with AVADO PQ Magazine November 2018

GO THE DISTANCE AND ACHIEVE YOUR DREAMS

STUDY ACCOUNTANCY

YEARS

Celebrating 20 Years of Students Success

Distance Learning AAT Accounting Qualifications

CALL TODAY To discuss your requirements and receive our special offer

TV Enrol and receive free access to our award winning PREMFLIX TV channel where you can stream all our accountancy videos to any device! Try it for free at: ZZZ SUHPIOL[ FR XN

P Award-winning e-learning

Personal tutor support

Bene⇒t from interactive videos and our innovative individual learning programme

Instant access to ACCA, FCA and AAT quali⇒ed tutors via phone, email, Skype, Twitter and our learning portal

Pass Promise

Price Match

We will tutor you until you pass. (Students must be actively and continuously studying. Please see our T&Cs for more information)

Find another provider that marked assignments, mock exams and e-learning tools, and we'll match their price

Premier Training Awards PQ magazine

AWARDS

2018

Best Accountancy Training Provider 2018

AWARDS

BKN

2018

AWARDS 2017

Training Provider

AWARDS 2017

AWARDS 2016

AWARDS 2015

AWARDS 2014

WINNER

Accounting Training Provider of the Year

Winner

Distance Learning Provider of the Year

Best use of e-learning

Study Resource of the Year

01469 515444

Customer Service Excellence Award

BKN Training Provider Distance Learning Provider of the Year of the Year

www.

premiertraining.co.uk

Live chat

PQ CIMA exams

Get pumped for GymFit James Taylor has some top advice on how to score heavily in the Operational level case study

opefully you have booked your OCS exam slot and are now ramping up for the GymFit case. I would say after the pressures of sitting the Operational level OT exams (E1, F1 and P1) you may actually find you enjoy the preparation for the case study. The first step is to get very familiar with the pre-seen and with your ‘part’ in this experience: “You are a Finance Officer for GymFit. Your main role is to support Steven Potter, the Finance Manager. Your tasks include the production of the annual budget, producing the monthly management accounts and providing information to management as required. You also assist with the preparation of the financial statements and deal with any queries regarding financial reporting.” The exam The case study exam is a computer based exam of three hours – there is no reading time added. The exam aims to integrate and apply the knowledge tested in the objective test exams. The exam is based on: • Pre-seen material (on GymFit) which is already published on CIMA’s wesbite. • Additional unseen material given to you in the exam room. The answers that you give will be long form and typed into the exam system. This will consist of all forms of modern communication, including emails, reports and briefing notes as examples. At Operational level the case study the competency split is 64% core accounting and finance skills; 16% business acumen; 14% people skills and 6% leadership (there will also be three marks for integration). You need be aiming for high grades across all of these competencies. Our advice for when you are preparing for the exam is 80% on theory and 20% on exam technique (which includes application to case). Writing skills This is the first time you will get to display to CIMA your ability to ‘write’ long form answers at exam standard. You will need to be able to combine the competencies from the CIMA framework with an ability to structure an answer with a ‘logical flow’. Practising answering long form questions based on GymFit is going to be key. If your tutor offers to mark 20

homework take them up on the offer, as getting as much feedback as possible is very important. Focus The most important skill on the day is not mentioned in the competency framework but basically is this: have you answered the tasks set with sufficient application to GymFit? Some calculations are included where they give context, but the focus needs to be on the written parts of these questions. You need to be aware that P1 is the lead paper on OCS and therefore being prepared for technical questions on management accounting is key. GymFit You are going to get one of the five variants. Each section comprises tasks. The sections can be focused on one Pillar (P, F or E), but they commonly are a combination of two of the three Pillars. GymFit is a fast-growing, leading provider of low-cost gyms and one of the pioneers of the low-cost gym model, which is based on relatively low gym membership fees and a ‘no-frills’ service concept. Being very familiar with the GymFit pre-seen can help you to feel comfortable with the subject matter on the day, but you must answer the question set on the day not ‘one you did earlier’! You need to be prepared for a ‘curved ball’ variant. Often one variant is rogue and it would be impossible for anybody to have seen the angle coming. It can be positive to get the rogue variant, as the more difficult the variant the easier it can be for you as an individual to shine.

An easy paper may seem like a ‘gift’, but you have to outperform other candidates. It can be hard to believe but a tough paper is often easier to pass for a competent student who thinks on their feet, generate ideas and answers all parts of all tasks. Gymfit question Today is 1 November 2018 and you meet Bertram Durand in the corridor. Bertram says to you: “I have recently been reviewing our corporate governance statement. It is possible that Celtland will join the OECD and I wish to comply with best practice in all areas. “In terms of our current corporate governance, I have had some doubts about our choice of our non-executive directors. Their background is unknown to me and they were given their place on the board due to their friendship with our former CEO before I took over the role. I’m concerned that their lack of independence may leave GymFit at a disadvantage compared to the major quoted companies. “To help me address this, please could you do me a brief note covering: • A brief overview of OECD corporate governance guidance particularly relating to non-executive directors. • Your thoughts on GymFit’s current nonexecutive directors and any recommendations you would like to make.” To receive the suggested solution to this question please email james.taylor@htftpartnership.co.uk PQ • James Taylor is Commercial Director at HTFT Partnership PQ Magazine November 2018

ICAEW COMPUTER-BASED EXAMS

ACA exams are changing GUIDANCE AND SUPPORT FOR ACA STUDENTS

All ACA exams will eventually move from paper to computer-based, so getting to know the new format in advance of your exam is crucial to success.

Here is a summary of exams that have moved to computer LQ DQG WKH Æ&#x201C;QDO $GYDQFHG /HYHO H[DP PRYLQJ WR computer in 2019.

&RPSOHWH WKH Æ&#x201C;YH VWHSV EHORZ WR HQVXUH \RX DUH IXOO\ prepared and have everything you need for the day of your exam.

PROFESSIONAL LEVEL

Read the exam guidance Watch the exam webinars

March 2018 Business Planning: Taxation Business Strategy and Technology June 2018

Business Planning: Banking Business Planning: Insurance

ADVANCED LEVEL July 2018

Corporate Reporting Strategic Business Management

Review the sample exams

July 2019

Case Study

Read the Instructions to Candidates

Guidance, support and resources are available to you at icaew.com/cbe

Use the practice exam software

PQ trading losses

Adrian Davies continues his threepart series on trading losses. The final instalment will be in next month’s issue of PQ magazine

ollowing my article in October’s issue of PQ, I hope that you’re now beginning to find your way with trading losses. As promised, I’m going to have a look at those nontrading losses that a standalone company might incur and the various ways that we might be able to relieve them. Where we have a company that has property income arising from a number of properties we work out the profit or loss arising from each individual property. We then pool all of the individual profits and losses arising in an accounting period together. Where we have a net property profit, this is what we tax as Property Income within TTP. If we have net property losses we need to consider how we are going to relieve them. Property losses are straightforward in that they must be offset against the total profits of the accounting period in which the loses arose, as for any current year trading loss claim, this loss must be claimed in full (potentially reducing current year total profits to zero) (CTA 2010, s62).

THE LOSS A

Word of warning If we have any property losses remaining then they will carry forward to the next accounting period to be relieved against the next available total profits. This is automatic and is applied in priority to trading losses of that year. One word of warning: the interest expense relating to these properties must not be deducted as an expense from property income as this will be deductible as a non-trade loan relationship debit (see below). Where we have a company that has made chargeable disposals during the year we work out the individual gain or loss arising on each

PQ ICAEW resources

Helping you tackle your CBEs The ICAEW has plenty of free resources to help you get to grips with computer-based exams

y now, most ACA students will have taken a computer-based exam. All Professional and Advanced Level exams have moved to computer, with the exception of the Case Study which moves to computer in July 2019. The transition from paper to computer-based exams means that it’s essential that you understand the functionality – and practise using – the exam software prior to sitting an exam. Whether you have already taken an exam on computer, or you are preparing for the first time,

there are a variety of resources available to help you feel confident to undertake an exam in the new format. To help you with your preparation, ICAEW has created a five-point checklist to ensure you feel ready to tackle your upcoming Advanced Level or Professional Level exam. Read the exam guide The exam guide will help you understand what to expect on the day of your exam. It has information on how to navigate within the software, key functionality, exam top tips and provides answers to frequently asked questions. Watch the exam webinars A series of short webinars are available for you to watch on demand. They include topics on the exam experience from start to finish, how to

download the question banks, how to move and resize the question and answer window, and much more. Practice exam software It is crucial to have an understanding of the software before you sit your computer-based exams. The practice exam software allows this, giving you the opportunity to know the functionality and formatting you can expect. Questions from the ICAEW published question banks are available within the exam software to give you plenty of scope for practice. You can also export your answers and use them to revise. Review the sample exams Sample exams allow you to practice answering questions with a blank version of the exam PQ Magazine November 2018

ADJUSTER disposal. On completing these we pool all of the individual gains or losses together. If we have a net gain this is what we tax as our Chargeable Gain within TTP. If we have net capital losses we can only carry these forward to relieve against future chargeable gains. Similar to trading losses, there are anti avoidance rules (MCINOCOT) that you need to know and be aware of as they are commonly tested. If a company joins a capital gains group and it has realised capital losses at the point of joining the new gains group these losses will be pre-entry capital losses and their use is restricted (TCGA 1992, Sch 7A). Basically, the losses can only be used against gains it has made on assets acquired from third parties or assets it held prior to joining the new group (TCGA 1992, Sch 7A, para 7) – not against gains or assets transferred to it by any new group companies. The final loss I want to look at relates to loan relationships. Where a company receives interest we should consider whether the interest received relates to the trade – is it what the company does? Is it how they earn money (are they a bank?). If so, it will be taxed as trading income. If not, it will be a non-trade loan relationship credit or NTLRC. In almost all exam questions interest income will be taxable as a NTLRC. If a company pays interest we again need to consider whether \the interest paid relates to the trade (for example interest on a bank overdraft used for trading or on a loan to buy plant and machinery). If it does it will be a trading expense. Otherwise, it will be a non-trade loan relationship debit or NTLRD (for example where the company incurs interest on borrowings to acquire shares or investment properties).

trading losses PQ You can now add a few more funky moves to the loss relief dance that I introduced you to last time!

We need to take these NTLRD and net them off against the NTLRC in the accounting period (CTA 2009, ss.456-463). If we have net NTLRC we will tax this as NTLR Income within TTP. If we have a net NTLR deficit we need to consider how we are going to relieve this. Unlike the other losses we have discussed, NTLR deficits can be claimed either wholly or partially, giving us the opportunity to thereby preserve the QCDs we quite often lose when relieving losses. Relief is available for NTLR deficits in the following ways; 1. Current year – against total profits of the current account period (CTA 2009, s459 (1)a). Note that within an accounting period, current period losses are set off in the following order of priority: (1) NTLR deficits. (2) Property business losses. (3) Trading losses arising in the current accounting period. 2. Carry back – against NTLR credits in the previous 12 months (CTA 2009, s459 (1)b). Note that the amount which is relieved in the previous 12 months is the lower of: (1) The NTLR deficit for the accounting period as reduced by any current year claim and any group relief claim. (2) The non-trading loan relationship credits of the earlier period as reduced by a current year set off, brought forward deficits, qualifying charitable donations and relief for trading losses of the current year or carried back. 3. Carry forward – against any future nontrading profits (NTLR, chargeable gains or property income) CTA 2009, s457). There are conditions in place to prevent the artificial conversion of carry forward losses into current year losses (which are more useful) CTA 2010, Part 14B).

Next up – groups For those studying towards their CTA exams there are some additional rules that you need to consider in respect of impairments incurred on loan relationships. Normally where a loan is impaired there will be a taxed credit in the company that has been relieved of some of the debt and an allowable debit in the company that has waived some of the debt. Where the loan is between two connected companies there are no debits or credits that are allowed for the impairment. There are exceptions to this – after all, this is tax! (CTA 2009, s354). • Where the debit is brought into account and yet the credit is not taxable: – The debtor and creditor companies become connected because the debtor company issues shares in settlement of the loan (CTA 2009, s356). – The creditor company is insolvent (CTA 2009, s357). • Where the credit is brought into account and this time the debit is not allowable: – Where the creditor company acquires all the rights attaching to a loan at undervalue from an unconnected party. The debtor company must recognise a deemed release from the loan. There is an exception to this – this is debt for equity (CTA 2009, s361C); or a corporate rescue (CTA 2009 s361D). – Where the debt is impaired by the creditor company and then the two companies become connected. The debit in the creditor company still stands but the debtor company must recognise a taxable credit (CTA 2009, s362). This is the case unless this is a corporate rescue (CTA 2009, s362A). Hopefully, this has given you a brief insight into the losses a standalone company might incur and the options we have in relieving those losses. PQ • Adrian Davies is a tutor at Kaplan Financial

components of a computer-based exam and the functionality of the software prior to your exam. For FAQs, support and more information visit icaew.com/cbe. Access a variety of exam resources for each ACA exam at

icaew.com/examresources. You can also post questions on the student community, share your exam tips and keep up to date at icaew.com/studentcommunity. PQ • Thanks to the CAEW for this article

software. You can also view the sample answers from our examiners and guidance on exam technique. If you are struggling to understand how responses should be set out, the sample answers show you how to clearly format your response, with all workings shown and referenced. Instructions to Candidates The Instructions to Candidates contain important information regarding the administration of your exams and have been updated specifically for computer-based exams. It is vital that you read them carefully and familiarise yourself with all the processes and procedures before you attempt an exam. The Instructions cover how you are expected to conduct yourself, what constitutes as misconduct and what to do if something goes wrong. Preparation remains key for all exams and ICAEW continues to provide resources to support you. As well as your usual exam revision, make sure you understand all the PQ Magazine November 2018

PQ SBR exam

The only way is ethics Martin Jones explains how you can pass this paper, by way of a specimen question

tudents sat the first ever Strategic Business Reporting (SBR) exam on Thursday 6 September 2018. The exam followed the structure of the two specimen papers published by the ACCA to enable students to get a feel for the ‘examination expectations’ under the new culture. One feature of the SBR culture is an increased focus upon ethics. The ACCA have dedicated a whole question to this and this article explores this question by using the ethics case study question from SBR specimen 2. Here is the question (slightly adjusted) and a suggested answer.

Question: Gustoso Gustoso is a public limited company that produces a range of luxury Italian food products that are sold to restaurants, shops and supermarkets. It prepares its financial statements in accordance with International Financial Reporting Standards. The directors of Gustoso receive a cash bonus each year if reported profits for the period exceed a predetermined target. Gustoso has performed in excess of targets in the year ended 31 December 20X7. Forecasts for 20X8 are, however, pessimistic due to economic uncertainty and stagnant nationwide wage growth. Provisions A new accountant has recently started work at Gustoso. She noticed that the provisions balance as at 31 December 20X7 is significantly higher than in the prior year. She made enquiries of the finance director, who explained that the increase was due to expected substantial changes in food safety and hygiene laws, which may become effective during 20X8. As a result, Gustoso must retrain a large proportion of its workforce. This retraining has yet to occur, so a provision has been recognised for the estimated cost of $2 million. The finance director then told the accountant that such enquiries were a waste of time and would not be looked at favourably when deciding on her future pay rises and bonuses.

Wheat contract Gustoso purchases significant quantities of wheat for use in its bread and pasta products. These are high-value products on which Gustoso records significant profit margins. Nonetheless, the price of wheat is volatile and so, on 1 November 20X7, Gustoso entered into a contract with a supplier to purchase 500,000 bushels of wheat in June 20X8 for $5 a bushel. The contract can be settled net in cash. Gustoso has entered into similar contracts in the past and has always taken delivery of the wheat. By 31 December 20X7 the price of wheat had fallen. The finance director recorded a derivative liability of $0·5 million on the statement of financial position and a loss of $0·5 million in the statement of profit or loss. Wheat prices may rise again before June 20X8. The accountant is unsure if the current accounting treatment is correct but feels uncomfortable approaching the finance director again. Required Discuss the ethical and accounting implications of the above situations from the perspective of the accountant. (13 marks) Professional marks will be awarded in question 2 for the application of ethical principles. (2 marks) (15 marks) Suggested answer Accounting 1. Provisions There are three criteria: R: Reliable estimate = Reasonable guess O: Obligation = Legal or constructive duty O: Outflow = Probable outgoing 2. Obligation

There is no current obligation because the legislation is not effective and “may” not be effective until next year. 3. Adjustment So the provision must be removed: DR Provisions SFP $2m CR Cost P/L $2m 4. Derivative A derivative is an asset/liability that derives its value from an underlying. It is identifiable by settlement in cash and hedging derivatives are measured FVOCI. 5. Purchase A purchase deal can look very similar to a derivative but is identifiable by settlement in product. A purchase arrangement is ignored until the product is delivered. 6. Wheat Gustoso has always taken delivery of the wheat in the past in similar contracts. It seems reasonable to assume that this wheat contract is a simple purchase arrangement. 7. Adjustment So the derivative recording must be removed: DR Liability SFP $0.5m CR Derivative loss (P/L) $0.5m Ethics 1. Integrity: the provision accounting above is fairly basic. I think both errors were deliberate and that the FD has questionable integrity. 2. Objectivity: it seems possible the errors were motivated by the desire to reduce current year profits to the bonus threshold and then release the provisions next year to aid the aim to hit thresholds next year. 3. Professionalism: the threat regarding asking questions is unprofessional. It is part of the duty of a professional to provide training to subordinates. 4. Competence: the threat also reduces the accountant opportunities for learning and development. This undermines her competence. 5. Email: I suggest that the accountant should send a simple clear email to the FD explaining the accounting and suggesting the above journals. 6. Job: the FD’s attitude is threatening and so Gustoso may not be a comfortable work environment. Perhaps the accountant should look for a new job. PQ • Martin Jones lectures at LSBF

PQ Magazine November 2018

ACCA spotlight PQ

he mention of Robotic Process Automation (RPA) often evokes images of great sophisticated robot-like machines assembling cars or computers, but the reality couldn’t be further from the truth. In fact, RPA is a software easily programmed by end users to perform high-volume, repeatable, rules-based tasks, and is garnering significant market attention as a good automation choice for finance functions. A new report authored jointly by ACCA, CA ANZ (Chartered Accountants Australia and New Zealand) and KPMG – called ‘Embracing robotic automation during the evolution of finance’ – explores the significant opportunities automation presents for the finance function. The benefits of adopting RPA practices in finance go beyond just cutting costs; it also brings improved control, faster processing speed and better data quality. And it makes finance teams happier, freeing up valuable resources from mundane tasks. With this in mind, here are 10 tips to consider regarding RPA…

Invest in change management The introduction of robotics technology into the finance function requires strong change management skills to ensure effective programme delivery and to manage employee engagement. The benefits of RPA must be continually communicated throughout the process. Engage employees through the journey It is vital to have employees engaged in the process, so they can understand the advantages RPA is expected to bring. This ensures minimal resistance as the organisation goes through the change process. Build RPA capabilities in finance team Ensuring the finance team understand the technology guarantees less reliance on the external parties or a small number of experts within the organisation. This minimises risk, places responsibility in the hands of those that truly understand the business process and is a strong platform for wider adoption and scale-up.

Why you must understand the

importance of robotics Robotic Process Automation (RPA) is here to stay. Clive Webb explains what it is and how it may affect you, and offers some top tips on how to get involved through appropriate work scheduling and where processes change. Choose processes carefully It is important to have a very clear understanding of the process and any inherent complexities or characteristics that exist before applying the software. Organisations often initially go wrong by being too ambitious with their RPA adoption plans on processes that are too large.

Start small The opportunity to try, test and learn with robotic software in relatively safe environments, where risks are minimised on smaller processes is important and a key beneficial feature of the technology. Get IT involved early Involvement of the IT function from the outset helps secure buy-in for RPA adoption and provides vital support, particularly in terms of security, programme management and robot coding capabilities, as well as providing on-going maintenance and ensuring greater performance reliability and analytical insight. Get the governance model right A strong, centralised RPA governance structure ensures the appropriate supplier and licensing arrangements are efficient, the ‘bots’ are appropriately maintained, controlled, and performance managed, utilisation is maximised

Look to optimise process first The robots are not designed to fix bad processes and will work better with preconfigured processes where much of the thinking has been done upfront. The software is also likely to require some process change to be applied effectively and sustainably. Process optimisation is likely to be a better solution than configuring a robot on a process which is too elaborate. Know where to stop with RPA RPA is rarely the solution to automating 100% of an end-to-end process, and businesses are often faced with diminishing returns where they try to do so – for many processes trying to automate the final part may involve too many ‘path’ options or problematic exceptions. Recognise when RPA is not right for you RPA is not the remedy to all automation challenges. Sometimes replacing legacy systems or building an API interface using more traditional IT automation protocols may be the better solution longer term than applying a ‘bot’. PQ • Clive Webb is ACCA’s head of business management

The superpowered accountant Last year we brought you Tick, the accountancy superhero – now we have found Pawan, the accounting demigod! ‘Pawan: The Flying Accountant’ is Indian comedian Sorabh Pant’s third novel and stars Arjun Singh (aka Pawan), an accountant by day and superhuman by night. We first meet Singh on a terrace in Lucknard surrounded by gangsters. He apparently didn’t manage to get a certain client the tax saving they were expecting! Singh is a chartered accountant, a manic depressive, PQ Magazine November 2018

cover story PQ

single, and loves rum. He’s upset he has never made the ‘CA of the Month’ gallery, and even Kunal Rao, who needs a calculator to calculate how many calculators he has, has done that! So, our hero is a typical accountant in Pant’s imagination. Pawan then gets fired, or as HR tells him, “promoted to another company without our help”. Slowly, the clues come that Singh is different. Having a tail might be a big one. Soon all becomes clear and our ‘Son of the Winds’ discovers who he really is. PQ rating 4/5: This is a surprisingly good read, once you get through the disclaimers and prologue. 25

Â£50 CIMA Case Study Exam Kits: 50 Q&As for OCS, MCS and SCS

Online College of the Year 2017 & Accountancy Personality 2018

We have written CIMA Case Study Exams Kits based on the November 2018 pre-seen for Operational, Management and Strategic case study exams. Each Â£50 HTFT Exam Kit contains 50 long form questions and answers that reflect the tasks in the real exam. www.htftpartnership.co.uk/special-offers HTFT Partnership is a CIMA Premium Learning Partner, and is PQ â&#x20AC;&#x2DC;Online College of the Year 2017â&#x20AC;&#x2122;

Why would you go anywhere else? For more information email james.taylor@htftpartnership.co.uk or call 0121 745 8842 www.htftpartnership.co.uk/cima

-RLQ RXU

$ZDUG :LQQLQJ &HQWUH

&HUWLILFDWH /HYHO 3URIHVVLRQDO /HYHO $GYDQFHG /HYHO

3UDFWLFDO &RXUVHV ,Q

6DJH 3D\UROO 0DQDJHPHQW $FFRXQWV ([FHO 6SUHDGVKHHW 6DJH $FFRXQWV 9DOXH $GGHG 7D[ 9$7 ,QWHUYLHZ 7HFKQLTXHV

)RU PRUH LQIRUPDWLRQ

&DOO (PDLO DGPLQ#WKHWUDLQLQJSODFH RUJ $GGUHVV &DUOWRQ &RWWDJHV #7UDLQLQJB3ODFH 1HZ &URVV 5RDG /RQGRQ 6( %(

$SSOLHG .QRZOHGJH $SSOLHG 6NLOOV 6WUDWHJLF 3URIHVVLRQDO

/HYHOV

6$785'$< &/$66(6 ',67$1&( /($51,1* $9$,/$%/( RI ([FHOOHQFH ZKHUH TXDOLW\ WUDLQLQJV SUDFWLFDO ZRUN SODFHPHQWV WDNH SODFH

CIPFA focus PQ

indie Engelbrecht is loving London. The former executive director at the South African Institute of Chartered Accountants (SAICA) has spent the summer enjoying the sunshine and adjusting to her new role as CIPFA’s managing director of education and members. She has been involved in membership organisations for quite a few years, and for a time was CEO of the Institute of Directors in South Africa. Before that she trained at KPMG in Johannesburg, where she was born and raised, and rose to become a technical partner. Her CV even includes some teaching, where her specialist subject was auditing. She told PQ she loved the interaction with students, but admitted audit wasn’t her favourite subject. She also took a sabbatical to bring up her kids – although that didn’t stop her from gaining a masters degree and serving on the boards of several listed companies, too. It was while working at SAICA that she bumped into CIPFA, in the form of CEO Rob Whiteman – they were both on an IFAC committee. He happened to mention there was a job going at CIPFA and she applied. The rest, as they say, is history.

Why CIPFA? So what attracted her to CIPFA? She says she loves its unique focus on the public sector. Engelbrecht felt many young people are looking for jobs where they can make a difference, and there is no better place to do this than in the dynamic world of public finance. She sees the CIPFA qualification’s USP as a major plus. She explained: “Why would you want to take other qualifications when a lot of what you study will be irrelevant to your job? Our qualification has been built for purpose and allows our students do their stuff every day at work.” And she stressed that gaining the CIPFA qualification allows you to be successful in the private sector, too.

The charm of the

public sector Lindie Engelbrecht joined CIPFA this summer as the new education chief. PQ magazine editor Graham Hambly went to see what she’s got planned

In recent years, CIPFA has also become an important global player. While she wants to see UK numbers grow, Engelbrecht sees growth internationally continuing its upward trend. The lack of scrutiny in public sector finance in many countries means CIPFA is working closely with the UN and World Bank to help developing countries improve things. ‘We won’t over-engineer’ Turning back to the exams, she was pleased to see that the online exam process has finally ‘settled in’. However, she was aware that in moving education online it was important not to ‘overengineer’ what is being offered. Engelbrecht feels there is still a place for

Engelbrecht: ‘still a place for faceto-face teaching’

• See Life at… on page 29

Explore the dark side Sign up for our free one-day conference, brought to you by PQ and London South Bank University

ave you put 28 November in your diary? It’s the day of our free one-day conference entitled ‘The Dark Side of Accounting – ethical dilemmas and sustainability challenges’. We can confirm a host of speakers, including our very-own award-winning columnist Professor Prem Sikka. He will be looking at the role of the FRC and discussing its future! We also have professors Ken D’Silva and Paul Moxley looking at corporate

PQ Magazine November 2018

face-to-face teaching. However, the challenge is getting the education mix right, and she is always looking for improved ways of delivering study for students. The key, she feels, is to be customer centric. Students study hard and so if something goes wrong in the exam they are going to rightly feel frustrated; it’s how CIPFA reacts to these sorts of problems that is vital, she said. One of Engelbrecht’s priorities is to look at the syllabus. Nearly every professional body seems to be looking at how AI, Big Data and sustainability should be incorporated into their syllabus. She said that in the process it was really important to recognise the stuff that needs to be taken out rather than what is keep in. Educationalists also need to understand, she said, that some things will be leant on the job. These things don’t need to be duplicated in the syllabus. Englebrecht will be looking at the big picture too, and the life cycle of a CIPFA member. PQs need to understand that their education is never over. Continuing professional development will be key to their employability. But a new syllabus is some way off, we are probably talking 2020 here. Engelbrecht understands that there are serious ramifications to any changes and she is determined to get it right. She has taken on a big job, but she seems more than ready for the challenges ahead. PQ

one-day conference PQ

governance and integrated reporting. Our ‘future’ stream will venture into the world of blockchain, big data, money laundering, and AI & ethics. And there’s our careers stream, where you can meet real employers and get advice on getting your personal branding right. CIMA’s top team will look at the current skills gap and show ways on how to fill it! There’s something for everyone and it’s all free – even lunch! All PQ readers and anyone connected with the accounting profession are welcome.

To secure your FREE place go to lsbu.ac.uk/whats-on and drill down to 23 November 27

PQ corporate governance

Safety in numbers Corporate governance doesn’t just protect investors, it can save lives, says ICAEW Chief Executive Michael Izza

he spectacular downfall of Theranos, the US health technology company, has made a splash for many reasons, not least that it’s a terrific story. A disruptor start-up run by a university drop-out, the young – seemingly visionary – woman at the helm, her apparent modelling of her persona on Steve Jobs, a virtual messiah figure for many in Silicon Valley. And the fact she convinced so many heavyweights to back her. Henry Kissinger did. So did Jim Mattis, US Secretary of State for Defence and former Defence Secretary William Perry. Rupert Murdoch, Walgreens and Safeway all invested millions. For those who aren’t familiar, Theranos promised to deliver cheap, accessible, pain-free fingerprick blood tests that could find up to 70 different markers in a single drop of blood. Results were delivered to your phone within hours. Elizabeth Holmes, the 19-year-old who dropped out of Stanford to found the company, was bright, articulate and swiftly conquered both investors and the media. By 2014, Holmes had raised $400m in investment. She featured on several magazine covers, including Forbes and Fortune, and was profiled in The New Yorker. At its peak the company employed almost a thousand people, and was valued at $9bn – Holmes herself at $4.5bn. Everything was rosy, until Pulitzerwinning journalist John Carreyrou started to investigate the company and found, eventually, that the claims were false; the tests didn’t work, and far from using its own ‘revolutionary’ technology, Theranos was relying on off-the-shelf testing devices used by all the other companies. Investors reportedly lost over $600m and

many thousands of patients may have received incorrect blood test results, with potentially life-threatening consequences. The company is now defunct. Holmes is bankrupt, facing fraud charges that could see her spend decades in jail. But at its heart, this is not a parable of the dangers of charismatic charlatanry, nor even of the near-messianic faith we currently place, sometimes misplace, in technology. It is a story of corporate governance failure. What alerted Carreyrou that something could be wrong with Theranos was not the extraordinary claims or the even-more-remarkable finances, but the obsessive secrecy – and a governance structure. Theranos had a dual-class shareholding structure that gave Holmes 100 votes for every vote held by other shareholders. She was not just founder, but CEO and Chair. She retained total control of the composition of the board, and though the members of that board were undoubtedly impressive in their fields, those fields were political and military, not medical or financial. There was no oversight. The good news is it is highly unlikely that this could have happened in Britain. The UK Corporate Governance Code requires a clear division of responsibility between running a board and the

High profile: former president Bill Clinton and Elizabeth Holmes, CEO of Theranos, in 2015

Michael Izza

executive running a company’s business. In other words, no individual can have unfettered power of decision the way Holmes did. It further requires boards to have an appropriate balance of skills, experience, independence and knowledge and for there to be a rigorous, transparent procedure for the appointment of new directors. Britain is hardly immune from corporate failure, but the Code would have safeguarded against such a dramatic fiasco as Theranos. The Code was written at ICAEW’s headquarters, Chartered Accountants’ Hall, after the Cadbury Report in the 1990s, a response to major corporate scandals like Polly Peck, BCCI and Robert Maxwell. The recommendations were controversial then, but are now regarded as best practice and the UK Code is emulated worldwide. Through reporting and auditing, chartered accountants continue to support transparency and the flow of reliable information between management, boards, shareholders, regulators and other stakeholders to this day. It may not be ‘sexy’ in the way biotech disruption and buccaneering finance is, but solid corporate governance can save billions – and lives. PQ • This article first appeared in CityAM

PQ Magazine November 2018

careers PQ

social media ROUND-UP Our lead story on page 6 about fake certificates got us wondering if it is wise for PQs to post pictures of their hard-won member certificates! It seems natural for a newly qualified to post a picture of their lovely membership certificate. But the concern is there is always someone watching, waiting to exploit the situation. At a recent university graduation ceremony PQ attended students were told not to take pictures holding their certificates, because the powers-that-be are so worried that it makes it too easy for the fakers to do what they do best! It is a shame we have come to this, and certainly seems to take the gloss off such great achievements. We were also reminded this month that what you say on Twitter never leaves you. In October, Jimmydee liked our tweet: “So are accountants good drivers? Well not according to the latest survey from 1st Central car insurance! They apparently rank sixth worst when compared with other professions.” That was first tweeted on 9 January! Lots of you loved our tweet about Graham Norton, too: “He said you see billionaires going to incredible lengths to dodge tax, but they would be just as rich if they paid – and would be living in a much nicer country. And what do they do with the money they save? Pay for the barbed wire around their homes…” Our tweet about Manchester United also got the blood racing for some. We just happened to point out that despite it being a money-making machine the football club had a trophy-less campaign last season. On Facebook we had a wry smile at Usman Ibrar’s post on ACCA Global Wall. He asked: “Which paper is easy in P level of acca.” He was told by Adnan Addi it was P6. Abul Hameed said “SBL – P1 &P3”. But it was Taha Jaf that made us smile the most with his reply: “None”! True that. Meanwhile, on LinkedIn we discovered our NQ of the Year, Michael Scott, is moving on. He’s now group financial controller of the DPS Group. Well done Michael, but what is the hammer for? PQ Magazine November 2018

Life at CIPFA Lindie Engelbrecht is Managing Director: Education and Members. She started at the institute in July, and is based in London. She has a BCom Hons from University of Johannesburg and Masters of Accountancy from the University of Witwatersrand What time does your alarm clock go off on a working day? 5.15am. What’s the first thing you do when you get to your desk? Drink my morning coffee. Apparently I am much more pleasant afterwards. What’s on your desk? We have a clean desk policy – I do not comply. My desk is scattered with papers. What’s the best thing about where you work? The people. Where’s your favourite place to go for lunch? I never have time for lunch. What (or who) can you see when you sit at your desk? I’m hardly ever at my desk during the day. Which websites are your

favourites and why? I cannot even begin to answer this. I hardly surf. Which websites do you use for work? I don’t really. How many hours a week do you spend in meetings? Way too many! What time do you leave the office? I try to leave at 5pm so I get home to make dinner. How do you relax? Mindless television. What’s your favourite tipple? I’m quite partial to a glass of prosecco. How often do you take work

home with you? EVERY DAY! What is your favourite TV show? This Is Us. Summer or winter? Winter, but this will be my first UK winter. Ask me again in January. Pub or club? Is there a third option? Who is your hero? Don’t believe in heroes (was this a song title?). If you had a time machine, where would you go? Yesterday. I left my favourite jumper on the bus. I could go and get it. If you hadn’t chosen accountancy, where might you be right now? At home on the couch…

Bookkeeping Summit anyone?

Now in its ninth year, the ICB’s Bookkkeeping Summit comes to Heathrow this November. Despite the rise of AI, many people believe the role of the bookkeeper will become more and more important. Capita FD Adam Blake recently said: “There are 5.5m micro businesses out there and they don’t all need an accountant. Yes, you’d want a specialist for complex tax and things like group consolidated accounts, but will you still have these big, overhead heavy accountancy firms in the future? I think we’ll be seeing more fluid models.”

This year’s summit will feature a roundtable discussion on the Future of Bookkeeping with the leading suppliers of accounting

software. And among the key note speakers is Caroline Plumb, founder and CEO of cashflow forecasting start-up Fluidly It’s software-as-a-service platform helps businesses track invoices and manage collections using machine learning to forecast future cash flow. Wired Magazine recently named Fluidly one of London’s hottest start-ups. Running alongside the keynote sessions are targeted training sessions on setting up, marketing and scaling-up a bookkeeping business. Check out what’s on offer at bookkeepierssummit.com/pq

The PQ Book Club: books you should read Leading with Emotional Courage, by Peter Bregman (Wiley, £21.99) Author Peter Bregman is really asking you to do one thing: look yourself in the mirror and ask yourself if you are being true to your ideals, to what you believe. It’s all too easy to go through life putting up with the hand we think we’ve been dealt. After all, why rock the boat? The secret to braking out of this rut is to channel your emotional enery into positive action – that “if you can feel everything, you can do anything”. Like the best and most

accessible of self-help books, this book is divided into short, easily digestible chunks, each offering pithy observation and leading the reader to draw a conclusion about their own attitudes and behaviour. Bregman is particularly keen to emphasise the importance of being able to take tough decisions. But you can only do this if you are emotionally prepared to do so. So don’t put off having difficult conversations; this will only damage you and your business (and your career). The author admits it all

sounds a bit ‘Californian’, but this is a tremendously interesting book that will help you be true to yourself. As the writer Seth Godin says in his recommendation: “This is a brave and generous book about being brave and generous. Emotional courage isn’t about getting what we want, it’s about serving others. Peter Bregman is sharing useful magic here.” PQ rating 5/5 This book will inspire you to be a better person 29

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

WOT, NO POT NOODLES?

SIZE MATTERS Astra Zeneca’s CEO Pascal Soriot is riled because he is not paid as much as his peers. “The truth is I’m the lowest-paid CEO in the whole industry,” he said. Soriot went on: “It is annoying to some extent. But at the end of the day it is what it is.” So what is it? Well, he was paid £9.4m in salary and bonuses last year. He may have a point though. Pfizer’s top dog, Ian Read, was paid a cool £21.3m last year for his work.

Waitrose recently got into hot water when it put forward its rather wonderful ‘Student Store Cupboard’ for graduates off to university. Included in its list was a £4.35 jar of Rose Harrisa spice paste and Bouillon soup powder, which costs £2. Also included was Aspall organic cyder vinegar (£1.70), Clear-spring organic Tamari soya sauce and Waitrose organic Italian seasoning (£3.15). Many rival supermarkets were quick to troll and put a more realistic spin on the new student starter pack. Students were also bemused by the list. Fiona Kabuki said: “That’s £13 and you have nothing to actually eat…”

A TRUE LOVE STORY

APPLE PAY UP

Apple has finally coughed up the £11.7bn it owed the Irish government for unpaid taxes (plus another £1bn in interest). The money has been paid into an escrow fund while everyone awaits the outcome of two appeals launched by the tech giant and the Irish government, who don’t want the money! The European Commission ruled in 2016 that Apple had effectively benefited from illegal state aid. And, the reason for the late payment? The Irish government said there were ‘complications’ in setting up the escrow fund.

MONEY MACHINE Revenues at Manchester United FC just won’t stop growing! The club reported £590m of income to June, and it expects to break the £600m barrier next year. This is despite the fact that last season the club managed to win no trophies and had an early exit from the UEFA Champions League. Lots of that money now comes from TV, some £204m in fact, that’s a rise of 5.2%. Total commercial revenue for the year was £276m, with sponsorship accounting for £173m of that total. United are predicting revenues of between £615m and £630m for the current financial year.

£2BN FRAUD LOSS New analysis from Which? magazine suggests the authorities are most definitely losing the battle against fraud, with fewer than one in 20 reported fraudulent crimes solved as criminals steal almost £200bn a year through a range of ever more sophisticated scams.

’ WEV E

A smile is all it took for ACCA Steven Hogg (51) to catch the eye of maths teacher Joyce Brown as she went online in search of love. She found Steven via Christian Connection, and their story was given the full-page treatment in a recent marriage and engagement section in the Saturday Times. We discovered Steven, who runs his own practice, has worked as a volunteer for the North Yorkshire Moors Railway since he was 11. He bought Joyce’s first engagement ring in New Look, the usual favourite of teenage girls, for £4.99, before upgrading it with one from a proper jewellery shop. We also loved their idea of a “his’n’hers sheds” wedding gift, for all their stuff. Oh, and how does she stop him talking about trains? She just leans over and kisses him!

Freedom of Information requests show that UK police forces are solving 40% fewer cases in 2016 than they were in 2014! Which? perhaps not surprisingly found a lack of transparency around fraud statistics. While success rates for most types of crimes are published in the Home Office Crime Outcomes report, City of London Police squirrels the figures for fraud away in a submission to the Home Affairs Select Committee.

STAFFING WOE HM Treasury staff are often “too young and inexperienced” to make good decisions about how to spend taxpayers’ money, the Institute for Government claims. Latest stats show that the average age of a Treasury officials is 31 and one in four staff leaves every year.

GOT THE L OT

A colouring frenzy

Who doesn’t love a 3D colouring book? We have three copies of Hannah Davies’ Animals colouring book to give away and yes, you get your own 3D glasses. Taking you to the next dimension, there is even a lightly guided doodle page and easy instruction on where to place your warm and cool colours so you can watch your artwork pop off the page. Send us your name and address to be entered for this great giveaway. Head up your email ‘3D’ and send to the usual address.

Marvellous Map of Days

Remind me, when did Elizabeth I officially open the Royal Exchange? That would be 23 January 1571, of course. But you would have known that if you had read Mychael Barratt’s ‘London Map of Days’. We are giving away a copy of this wonderful book, based on a map featuring 366 date-specific anecdotal references to events and people from the capital’s history. It’s a littlle gem. Send your name and address to enter this unusual giveaway. Head up your email ‘Map of Days’ and send your email to graham@pqaccountant.com

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 9 November. The main draw will take place on Monday 12 November 2018.

TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM 30

PQ Magazine November 2018

THE DARK SIDE OF ACCOUNTING Ethical Dilemmas and Sustainability Challenges Wednesday 28 November 9am-7pm Keyworth Centre, LSBU

Back for a second year, our free sell-out conference in partnership with PQ Magazine

Hosted by London South Bank University, join our one-day event to hear from industry experts on key topics including: – Blockchain, money laundering, AI and Ethics – – Corporate governance and sustainability – – Developing your career – For accounting professionals and academics of any seniority working in all sectors. Secure your free place: lsbu.ac.uk/whats-on

Networking drinks

In association with PQ Magazine

aat TV

Calling all AAT students to watch AAT TV for free! Could you do with a confidence boost before you go into the exam? Every Friday we are working through AAT practise assessment tasks on each and every paper. Join us and view or even participate and ask questions of the tutor. This could make all the difference to your result. LSBF is premiering AAT TV on our Facebook page from 12 October, 2018. LSBF will be covering the full AAT assessment for each paper over 10 weeks. Further details on page 15

WE SUPPORT YOUR ACCOUNANCY SUCCESS What’s included in your free TV package? •

Exam focused presentations

•

Expert tutor knowledge to improve your grading

•

Guidance though AAT’s practise assessments

•

Accessible content which can be watched live or

•

Half hour bite sized sessions

as a recording

Book Online https://ulp.lsbf.org.uk/study-aat +44 (0)207 823 2303