PQ magazine October 2018
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CONTENTS
News 06FRC report Bad news – it’s taking longer to get qualified 08ACCA exams Your reaction to the latest set of exams 10PQ Awards 2019 We launch the industry’s favourite awards Features, etc 04Mind your Ps&Qs ACCA’s final hurdle is too tough; Big 4’s audit disgrace; ethical minefields; and are there too many accountants? 12One-day conference Explore the dark side of accountancy at our joint event with LSBU 13ACCA AFM Exam team is now setting fairer papers – hurray!
14Pioneering women ICB
celebrates women bookkeepers who have made a difference
15Ethics ACCA’s Alan Hatfield has an important date for your diary
16CIMA qualification Adapting
October 2018 25Trading losses Part one of a
three-part series on how to deal with trading loss exam questions 26ACCA exams Focusing on F5 and F8, two of the toughest tests 28The state of accountancy Key industry facts and figures from the latest FRC report 29Careers Life at Grant Thornton; the best of social media; and our Book Club review 30Fun stuff – and our giveaways The columnists Robert Bruce Bidding farewell to an accountant with real integrity 6 Prem Sikka Light touch regulation creates its own problems 8 Zoe Robinson Welcome to the fourth industrial revolution 10 Subscribe to PQ magazine It’s FREE – go to page 22 or see www.pqmagazine.com ABC July 2017 – June 2018
to the modern business world
31,954
17CIMA exams Why it pays to take a flexible approach
18T accounts An old-fashioned method that will see you right
20PQ Awards It’s about time you
started thinking about your entry
22CIPFA viewpoint Student
Network President Sophie Medwell has some top advice
24ICAEW exams Some FAQs about the CBEs
Publisher’s statement: We send a digital issue of the magazine to an additional 7,361 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)
It’s PQ Awards time! Forget the GQ awards, it’s time to get nominating for the PQ Awards 2019! As you can see by our front cover photo you too can win a shiny and much-coveted ‘PQ’. Take a look around the office – surely there’s an empty shelf crying out for one of our awards? We have 18 categories, so there’s something for everyone. We will again be heading to the Café de Paris come February next year and we want to take you with us. But you need to get shortlisted to land your free invite to the hottest party in accountancy. We know there are lots of you who meant to enter last year and just let time slip by. Don’t do it this time around – get nominating now. Remember, it’s free to enter. Check out page 20 on where to find that nomination form. Conference call What are you doing on Wednesday 28 November? How about giving yourself a real treat by signing up for our one-day conference, called ‘The Dark Side of Accountancy: Ethical dilemmas and sustainability challenges’? London South Bank University really wants to show how accountancy can be a force for good, and together we are putting together a fantastic line up. You can book your place today by going to lsbu.ac.uk/what’s-on. Along with one of our headline sponsors, the AIA, we have even put together a short promotional video, featuring yours truly and LSBU’s Sara Abdaless (pictured above). Take a look for yourself by going to https://www.youtube.com/watch?v=H1kW58M5qJs CIMA and the ICB are new conference sponsors this year, joining the AIA, ACCA and ICAEW. Graham Hambly, PQ magazine editor (graham@pqaccountant.com)
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PQ have your say
email graham@pqaccountant.com Last hurdle is too high I have just sat the Advanced Audit & Assurance exam and am totally perplexed about what the examiner and the ACCA are trying to achieve. I understand that the ACCA wants to produce professional accountants ready for the workplace, but I am not sure I want to work in the audit world the examiner is trying to replicate! Surely the ACCA should be encouraging its final level students to show off what they know, rather than set them an exam where a key skill is one’s ability to speed type and take in masses of
information under severe time pressure. I have always been a little bit
worried that I only have to get 50% right in the exam to become a qualified accountant. I never tell my friends this, it just seems wrong. Like many people on Facebook and on other notice boards I have to admit I spent too long on Q1 this time around too. Not the two hours some admitted too, but it wasn't far off that. There was so much to take in it was hard not to overrun. I know that good exam technique is to pick up the easy marks and move on, but I think it’s human nature to try to answer the question set. And, of
course, in the real world this is what you have to do, not provide something half-baked. I must admit I am feeling a bit selfish here, but I am just one exam away from becoming an affiliate, and surely it isn’t right that two out of every three students are failing this final exam. After all, I passed 13 other ones with relative ease, some with a pass rate well above the 50%! Name and address supplied The editor says: We got a lot of feedback from sitters of the September AAA exam. Many felt miserable after sitting it! And many PQs admitted to spending two hours and more on Q1. Exam technique is key to passing this.
Our star letter writer wins a fantastic PQ mug! Matter of degree It’s a shame that over a third of graduates regret their choice of degree (PQ, September 2018). I think it shows we have lost sight of the all-round value of a university education. Obviously subject matter is very important, but getting any degree shows a level of intelligence, application and determination that a decent employer ought to recognise and value. Andrew Elgar, by email
who have been asked to act unethically – is a pretty shocking one. Where are the disciplinary procedures? I guess until there is effective protection for whistleblowers this behaviour is just going to continue to happen – especially given the financial pressures local authorities are under. Name and address supplied
I need pqjobs.co.uk
Shame on you, Big 4
Sign of the times Good for Kamran Hussain, the man who stood outside London’s railway stations with a placard pleading for an entry-level job (PQ, September 2018). And it was nice that the story had a happy ending. But what does it say about the state of the jobs market in this country? Hussain admitted his degree wasn’t the best, so does that mean there’s no hope for those who don’t get a first-class degree or a 2.1, or don’t pass all their accountancy exams first time?
Perhaps the real problem is that we are training too many accountants. And with the rise of the robots and spread of AI, the jobs market for us ‘low flyers’ is not going to get any easier. Time for a career change, methinks! Name and address supplied
Only way is ethics It was depressing to read your article from the CIPFA conference about accountants being put under pressure by their bosses to act against the public interest. Indeed, the figure of 63% – the percentage of local government accountants
It really is a scandal that the quality of the Big 4 firms’ audits is falling, according to the latest Financial Reporting Council report. These companies are a disgrace, and it’s about time the regulators got tougher with them. For me, it’s about making the partners of these firms personally responsible. Hit them in the pocket (heavily) or threaten to take away their liberty – that will soon sort them out. These shoddy audits have a real impact on real people’s lives – think about BHS’ employees, the suppliers of Carillion or the Tesco fiasco. It shames our profession, too. They may be very good at portraying themselves as model employers and patrons of the arts, but when it comes to doing the job properly they are sadly lacking. Name and address supplied
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
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PQ news
ROBERT BRUCE Farewell Bill Morrison, a man of integrity Bill Morrison died the other day. His was a long career, but it was forged in the days when Scots accountants were fiercely independent and dealt equally fiercely with clients who stepped out of line. You could say it was a Glasgow thing. He was brought up, qualified as an accountant, and built his early career in that city, one where plain-speaking leavened with empathy, understanding and humour was uppermost. But underscoring it all was a determination to behave with integrity and honesty. And none more, in those days, than auditing, the frontline of any battles in business. Morrison was not a lone voice in this role; it was inbred in the Scottish accounting culture. One accountant of that era used to tell the tale of how, as a young man yet to qualify, he uncovered an attempt at falsifying stock figures. The client tried to snow him, so he went back to his audit partner and told him what was going on. The partner immediately told the client that if he ever tried this on again he would personally shove a copy of the accounts up the client in a very painful place. That was auditing in Glasgow. And in our own era of disquiet at a perceived lack of auditor independence it would be good to see not just scepticism but ferocity of purpose back again. Morrison built his reputation in part through his emphasis on ethics. Business flocked to him. He became the youngest ever president of the ICAS and a respected voice throughout accounting. Robert Bruce is an award-winning writer on accountancy for The Times
Five long years and still going PQ magazine
EXCLUSIVE Over 170,000 accountancy trainees are still studying five years after they first signed up to their professional accountancy body, according to the latest figures from the Financial Reporting Council (FRC). That’s 29% of the 584,581 students worldwide, and means some of the bodies need to look seriously at the level of support they offer students struggling long-term to get qualified. The worry is the five-year figure is drifting up – over 10,000 students were added to the total year-onyear. Last year, PQ magazine reported the total was just over
160,000 (or 27% of the total). The ACCA again has the most students and the highest total of those still on the PQ list five years after starting their journey. There are 133,742 in this pool, some 32% of all students. CIMA PQs are not far behind, with 27% still a trainee after five years. That is 34,261 trainees in all. The FRC points out that a high percentage of ICAEW, CAI and ICAS
students complete their training in four years or less, with 10%, 17% and 9% of students respectively (as at 31 December 2017) being registered for more than four years . That said, the number of students becoming members with these bodies just keeps growing. The ACCA helped 15,533 affiliates become members, which is up 5.1% year-on year. And CIMA turned 5,147 PQs into NQs.
TIME REGISTERED AS A PQ IN YEARS <1 1>2 2>3 3>4 4>5 5+ TOTAL
ACCA 95,230 71,144 48,500 35,608 30,338 133,742 414,562
CIMA 31,018 25,962 15,221 12,315 8,464 34,261 127,241
CIPFA 598 665 750 1,098 528 762 4,401
ICAEW 7,942 6,764 6,047 4,428 1,325 1,300 27,866
CAI 1,624 1,435 1,362 1,078 344 819 6,662
ICAS 1,002 1,158 929 398 190 172 3,849
Time to sit more papers? Is it time for ACCA PQs to take a leaf out of ICAEW students’ book? ACCA and ICAEW professional exams pass rates were both released in the middle of July. They have very different exams and pass rates, but the stats show that ICAEW candidates who sit two or even three papers at the sitting do considerably better than those who sit just one! The June pass rate of one-paper
ICAEW professional level sitters is 67.1%. Yet 76% of students who sat three papers passed them all, and another 13.7% passed two out of three. Just 3.5% of sitters left the exam hall with no passes. While the current average ACCA PQ sits 1.3 papers per sitting, the same ICAEW PQ is sitting 1.8 papers. So what’s the answer? Are ICAEW working harder, or are they just more in the zone?
ICAEW PQs score top marks
Let them in
Universities UK believe that in order to avoid missing out on international talent, overseas students to the UK should be given a two-year work visa after graduation. As well as boosting international influence and cultural diversity, overseas students are worth £26bn to the UK in fees, travel and living costs, including £1bn in tax revenues. There are currently time limits for moving into work, thresholds on how much graduates must be earning, and sponsorship is required.
ACA students are celebrating their July advanced level exam results. Students scored well in the Strategic Business Management paper – it had a 85.9% pass rate this time around. This was closely followed by Corporate Reporting (82%), with the case study following up behind on 76%.
The ICAEW’s Mark Protherough explained that this was the first time ALCR and ALSM papers were examined on computer and he’s ‘delighted’ with the pass rates. In all, 4,772 students sat the July session, 8,017 papers were attempted and 3,492 PQs passed all the papers they sat.
You have to add the case study exams, of course, to this total.
pension contributions and scrapping the marriage allowance and Christmas bonus, and raising the qualifying age for free eye tests and prescriptions from 60 to the state pension age.
EY’s head of audit, Hywel Ball, however, claims the psychologists are just helping to make staff feel “more fulfilled” at work. • For more great Big 4 stories turn to page 10.
Please don’t go Cognitive behavioural psychologists have been brought in by Big 4 firm EY to investigate the mood of staff because of concern that recent industry scandals could led to an exodus of talent.
ICAEW Scottish first Classroom tuition for ICAEW students has begun in Scotland for the first time, with face-to-face tuition at Certified and Professional level being offered in Glasgow by Kaplan. To find out more contact sally.gallery@icaew.com.
In brief CIMA study hours So how long will it take you to be ready for the P1 exam? Well, CIMA is one of the few bodies that spells out exactly how many hours you will need to put in if you have no knowledge of the subject at all. For those not in the know, CIMA says you need to work for 150 hours over 13 weeks to ensure success. You will be pleased to hear it’s slightly less for E1 – 134 hours. And for all nine OT papers it’s 1,281 hours, or just over 53 days. That doesn’t sound too bad! 6
AAT plays Chancellor Instead of knee-jerk reactions the AAT wants UK policymakers to exchange political expediency with what is fair and effective. With this in mind, it has highlighted areas where £27bn worth of savings can be made quickly and simply. Among its recommendations are switching stamp duty liability from buyer to seller, removing higher tax relief for
PQ Magazine October 2018
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PQ news
PREM SIKKA Light touch regulation incubates harmful practices Chummy regulation incubates harmful practices and disdain for people. Further evidence for such a thesis is provided by the banking industry. Since the 2007-08 financial crash Royal Bank of Scotland (RBS), a UKbased bank, has paid £20.6bn in fines, mainly to US regulators. The US Department of Justice (DOJ) has released some RBS internal correspondence (available at https://tinyurl.com/ydhx79r2) for the period leading up to the crash. It provides a glimpse of a corrosive business culture devoted to putting profits and performance-related pay above people. On due diligence, an RBS senior trader boasted that “we do the least amount of diligence and kick out the fewest loans”. An RBS executive described the bank’s due diligence process as “just a bunch of bullshit”. RBS’s chief credit officer described the mortgage backed securities sold by RBS in the US as “total fucking garbage” loans with “fraud [that] was so rampant… [and] all random”, so “the loans are all disguised to, you know, look okay kind of… in a data file”. Another executive wrote that the loans were being pushed by “every possible… style of scumbag… it’s like quasi organized crime… facilitated by brokers… and just a lot of bad people who just said, ‘Hey, there is a major flaw in this loan origination model. And we can fill it up like nobody’s business’.” The UK’s light touch regulation regime will not worry large corporations, but will surely facilitate another crash. Prem Sikka is Emeritus Professor of Accounting at the University of Essex
Sound of silence Ear plugs should be added to the list of key items you need to take in to the ACCA exams, according to many September sitters. Along with your attendance docket and calculator, the tap, tap, tapping of fellow CBE sitters means they are now a ‘must have’ item. The problem is that while some students sit quietly studying the MCQs, others get straight down to section B, and the frenzied keyboard tapping begins. The ears plugs also cut out the sound of those noisy invigilators and fans. Turning to the exams themselves, it was the Advanced Audit and Assurance (AAA) sitters who seemed to have most to complain
KPMG in the UK has opened applications for its 2019 graduate programmes for the audit and tax, pensions and legal services practices. Roles are available across the UK, from Aberdeen to Southampton – and graduates from all subjects are invited to apply. In 2018, the firm welcomed 620 new audit graduates, that’s a 36% increase on the class of 2017. While in London the number of audit graduates increased by 30%, regionally there was a 42% increase, highlighting KPMG’s commitment to audit across the UK. KPMG’s head of audit, Michelle
about. Students left the exam room feeling ‘miserable’ and ‘gutted’. Too many PQs admitted to being thrown by the sheer volume of work
in Q1 and spent too long trying to get the right answer. One sitter said they used up two hours 15 minutes on it! The Advanced Taxation (ATX) paper was also pretty much universally unloved. Students felt the examiner had homed in on too many niche subjects. In complete contrast, the Taxation (TX) paper was a breeze, with many sitters worried when they finished the test with over an hour to spare. There was also a lot of section C ‘question envy’ with those sitting CBEs. This was particularly true with the PM students who got the building block question. They missed out on a ratio analysis and variance question. For our full exam feedback for September go to www.pqmagazine.com
KPMG graduate programmes are now open for business Hinchliffe, said: “Being an auditor requires a specific set of skills, but not all of these may be what you might typically imagine.” She went on to say that the modern auditor is part accountant, part detective and part data scientist. KPMG also wants candidates with natural curiosity, a degree of independent thinking and a keen eye for detail. Hinchliffe emphasised: “Those
Keep your knowledge fresh CIMA PQs have been reminded that they need to retain the knowledge they have ‘acquired’ studying for the OTs. You can’t assign this knowledge to your short-term memory and then dump it after the test – it will be needed to pass the case study, explains
CIMA’s Jackie Durham. There is also a growing worry that students are leaving it too long between exams, as life and work get in the way. The Operational case study examiner suggested that May candidates
From Xero to Avado Avado has joined forces with accountancy software provider Xero to offer all its AAT and ACCA students the opportunity to gain Xero Advisor Certification, for free. By the end of the course students will be able to set-up Xero, run Xero day2day, review month end and generate all relevant reports. The elective courses cover areas such as inventory, budgeting and fixed assets. It doesn’t end there, either. Xero has
developed a tool for Avado called Xero Accelerate, to show students how to apply their accounting knowledge using Xero in the real world.
who love technology should also take a close look at a career in audit. We are on the lookout for expert coders, data analysts and tech specialists. For those who don’t have those skills yet, but want to learn, we provide world class onthe-job training in our growing Data Science Centre of Excellence.” To apply for the 2019 intake visit the KPMG careers web page at https://www.kpmgcareers.co.uk/ were ‘weak’ in P1 and F1, and a failure to refresh forgotten knowledge could be affecting pass rates. The Management examiner felt some candidates entered the exam with poor knowledge of core areas, areas where they had proved their competence in the OTs. At the Strategic level, the examiner wants candidates to take more note of the exhibits. • See page 17 to read Jackie Durham’s article in full.
In brief Explore the dark side Our one-day Dark Side of Accountancy conference is coming to London South Bank University on Wednesday 28 November. PQ magazine editor Graham Hambly and LSBU’s Sara Abdaless got together with key sponsor AIA to shoot a promotional video. Check it out at https://tinyurl.com/y76mfhgo and don’t forget to sign up! 8
How many calculators? PQ magazine’s favourite post about the September ACCA exam sitting came in one of our favourite Facebook Groups – UK (Only) ACCA Distance Learning Students (independent study group). There is lots of great exam feedback, but can you beat Tina Kris who asked:
“Is there a limit on the number of calculators you can bring?” Most people take two, but we envisaged her turning up to the exam room with a carrier bag full of them! Read our social media round-up column on page 29. A balanced board EY has replaced two male board members with women, making its 10-member British board 50% women. It now has the most diverse board of all the Big 4 firms. PQ Magazine October 2018
PQ news
ZOE ROBINSON The fourth industrial revolution
The world is always changing, but the pace of change has accelerated far more than anyone could have imagined. The first industrial revolution started around 1760; steam power and the new factories required people to learn new skills or be left behind. The second (1870 to 1914) saw the combustion engine and telephone allow us to travel further and communicate at distance. In the digital age (1970 to 2000) the PC, mobile phone and internet invaded our lives. And just when we thought that was it, the fourth industrial revolution is upon us, with robotics, AI and the ‘internet of things’. These changes bring significant opportunities and risks, not least for education. Take the accounting bodies, for example: it is incredibly challenging to prepare a syllabus that is relevant when these changes are so complex and rapid. It raises other questions. What should a newly qualified accountant look like? Should they be experts in these new skills or simply aware they exist? Neither can we simply replace old with new – after all, an understanding of double entry bookkeeping will still help us navigate blockchain. One thing is certain – it is as important as ever to keep learning, and knowledge is more accessible and expansive than ever. How would you have learned to operate that Spinning Jenny in 1770? Now I would just look on YouTube! Zoe Robinson is Learning and Programmes Director at Kaplan Financial
It’s your time to shine Do you know anyone who deserves a nice shiny ‘PQ’? There are now 18 up for grabs, as we officially open nominations for the PQ magazine Awards 2019. Among the winners in February were Premier Training’s Premflix, in our Study Resource of the Year category. Our Personality of the Year, HTFT’s Vicky Talyor, danced her way to the stage and even had CIMA’s David Rowesby joining in! A tear was also shed by Sutton Coldfield College’s Fiona Williams, who won the Editor’s award after she had been nominated by her
A collaboration degree programme between Nottingham University Business School, PwC and the ICAEW has produced its first cohort of graduates. The Flying Start degree programme is an innovative course aimed at people who want to become ICAEW accountants. The BSc Accountancy degree is a fouryear programme sponsored by PwC and overseen by the ICAEW. Students undertake a series of paid work placements, which helps them apply their technical theory directly with the workplace. Graduates are also able to claim an enhanced level of accreditation in the ICAEW qualification exams.
Off to a flying start Some 24 students recently collected their degrees at the summer graduation ceremony and have all been offered positions at PwC. Another upside to the degree is the fact students earn a competitive salary, and have some of their living costs supplemented
as well as paying reduced university fees. To find out more visit www.pwc.com/uk/flyingstart
Farewell F5 and welcome to PM ACCA PQs will have to start getting their head around even more acronyms! The old paper numbering system has been replaced, so you now have to think AAA and TX instead of P7 and F6. So, for instance, F5 Performance Management becomes just simply Performance Management (PM). ACCA has stressed that all exam
Going flexible PwC is opening up a new recruitment route to respond to the increasing demand from people to work flexibly and forgo traditional working patterns. PwC’s Flexible Talent Network has been created to give people the opportunity to work for the firm without being tied into a fulltime contract and standard working hours. Staff can apply to the network based on the skills they have and the working pattern that best works for them. Woman at the top? Deloitte could become the first Big 4 firm in the UK to be led by a woman. Current CEO 10
son – sweet. Reigning Accountancy Team of the Year are the Greater Manchester Mental Health NHS Foundation Trust Finance Team (see front cover photo). If you want to make it to the Café de Paris then you need to download a nomination form and send it back to us. The PQ awards night really does give everyone the chance to shine and get a flavour of the red carpet. Discover how you can get your nomination to us on page 20 – and start working on your entry!
resources listed as F5 can be used for studying PM. For Advanced Taxation (ATX), previously known as P6 Advanced Taxation, ACCA said it continues to update resources to the new exam terminology, but you may see some resources still using the old exam code P6. However, when it comes to the optional papers ACCA has
David Sproul steps down next year and Sharon Thorne is one of three partners being lined up as a possible successor. Thorne is the management partner for global and strategy and she will find out if she gets the job later this year after a partner vote. She is not one to shy away from publicity. In November, she mocked then Foreign Secretary Boris Johnson by saying he was a “national embarrassment” who “should have gone already”. EY buys ‘disruptive’ law firm EY has acquired legal services business Riverview Law, in what many see is accountancy’s push into the legal sector. Riverview are seen as a new breed of legal firms, and EY’s Cornelius Grossman said that it
pointed to the vital fact that the exam format and content has changed (from September). This had to happen, as P1, P2 and P3 have now been replaced with just two papers – SBR and SBL. It would have meant ACCA would have had to re-number the optional papers and this could have led to even more confusion!
was the Riverview’s use of ‘disruptive’ technology that had driven the deal. The law firm has traded on using technology to streamline overheads and offer clients fixed fees instead of hourly rates. FRC reprimands KPMG The FRC has fined and reprimanded KPMG Audit plc and partner Michael Barradell following their admission of misconduct over their audits of Ted Baker plc and No Ordinary Designer Label Limited for 2013 and 2014. KPMG received a severe reprimand and a fine of £3m, discounted to £2.1m. In addition, the firm was asked to pay £112,000 for the executive counsel’s costs. Barradell received a reprimand and a fine of £46,500. PQ Magazine October 2018
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PQ one-day conference
Welcome to the dark side London South Bank University and PQ magazine have joined forces to host a one-day conference
L
ondon South Bank University’s wonderful Keyworth Centre is the venue for our leading-edge conference on Wednesday 28 November. To give it its full title, the conference is ‘The Dark Side of Accountancy: Ethical dilemmas and sustainability challenges’. We want to show how accountants can be a force for good, and so are putting together a fantastic line up for this free one-dayer. We already have Professor Prem Sikka (a regular PQ columnist), Professor Paul Moxey and Professor Ken D’Silva signed up. We also have Charlie Ryan and Mel Godfrey on hand to help PQs with their career development. The conference is a fantastic opportunity for the profession to come together to discuss current issues. We will be taking a look at the rise of AI and believe it is time to awaken the profession to the idea that robots can give accountants superpowers! Among the other key topics being covered are blockchain, money laundering, ethics, corporate governance and sustainability, and we’ll have a whole stream on future proofing your career. So how do you sign up? Well, through Eventbrite, of course. Just go to lsbu.ac.uk/what’s-on and scroll down to 28 November – the date of the conference. All PQ and NQ readers, and anyone connected with the accountancy sector, are welcome to come along. The PQ team will of course be there, too. Keep an eye on the website and future issues of PQ magazine as we unveil the experts who will shed light on what the future might look like. PQ
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
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PQ Magazine October 2018
ACCA AFM PQ
From Russia with love
Sunil Bhandari has some good news for ACCA PQs sitting option papers – the AFM examining team are playing fair!
S
o the premier League is back, with English football still basking in the memories of the World Cup in Russia. As we all know, the England football team had a brilliant tournament. For an avid football supporter like me, I was expecting very little from them. However, their performances and positive attitude was refreshing to watch and excited the nation. It’s almost like the poor performances of the past were banished from our memories. A very similar, but obviously less well reported situation, also occurred in 2018. One that will have great benefit to ACCA students taking their option papers from now on. What was this event? Well, it was that the ACCA P4 paper, now called Advanced Financial Management (AFM), transformed its image from being the so-called impossible paper to one that you must do if you want the best chance to qualify. Let me explain how I have arrived at my view. ACCA P4 has had a reputation of being a paper for students to avoid when choosing the option papers to sit to complete their ACCA studies. This is based partially on fact and partially on fiction. Yes, the early exams from 2007 to 2010 were very challenging, including the infamous paper of June 2009. That paper can best be described as being like the students were Sunday league amateur footballers and the examiner and exam team were the great Brazil side of 1970 (check YouTube). Only one result possible! Things improved from December 2010 when a new examiner (now it’s an examining team) was appointed. The exam questions were better and the requirements were clearer and less
PQ Magazine October 2018
ambiguous. In addition, a series articles appeared on the ACCA website giving students extra guidance (for the record, I have written six of these and four are still on the ACCA website). Topics contained in these articles were then tested in the following papers, which is still true today as you will see below. The move to a one x 50-mark compulsory question and two from three x 25-mark questions format from 2013 removed some of the time pressure. However, the global pass rates were still very low, averaging approximately 34% up to and including the December 2017 sitting. There are many reasons for this, including students not being properly prepared and a lack of courses/support being provided by specialist experienced P4 tutors. Two points regularly mentioned by candidates post the exam were that the exam was too lengthy and they were asked to do far more than the time allowed. Also, there was an imbalance in the mark allocation between the computational (more difficult) and written (easier) elements within the paper. To be fair, these criticisms are valid. So, what has happened this year to change this? Why did the pass rate for the March 2018 session increase by a full eight percentage points compared with the December 2017 paper and have the highest option paper pass rate? It was no surprise then when the June pass rates were published and the success rate was 40%. The answer is simple. The questions on the past three papers have been very fair and given students a really good chance to pass. For the March exam, three questions are in the latest published sample paper,
including the Q1 from that exam. All three questions were relatively straightforward in comparison to the previous tests. The exam topics came from the ‘five cores’ of P4. More importantly, the balance between the computational and written elements allowed candidates a far better chance to finish the paper, which has not applied in the past. Did this pattern continue for the June exam? Well, I am happy to say it did. You can simply ditto my positive comments above when referring to all four questions on the published June 2018 exam. In addition, the June paper had two questions that would have benefitted those candidates who had read the published articles on real options and interest rate risk management. The latter article only came out in the quarter leading up the June exam. Reading between the lines, I get the feeling that there had been a definite change of style in these two papers compared with those set in the past. Maybe they were written by a new member to the examining team – their equivalent to Gareth Southgate? The omens are good for those sitting the new AFM exam in December. There is no reason to expect the recent trend not to continue. Add to this that the one change is to the paper format (one x 50 marks and two x 25 marks) can be considered as a positive one. No choice means no regrets that you chose the wrong question on the day. So just as the England team surprised us on how well they played in Russia, the two ACCA P4 papers set this year have given us positive vibes for the forthcoming new AFM exam. Be properly trained for the AFM paper and you will score that winning goal. PQ • Sunil Bhandari is a freelance tutor with FME Learn Online 13
PQ ICB initiative
Women of substance #ICB100Women celebrates the Representation of the People Act centenary. PQ decided to profile some of these inspiring bookkeepers
I
n 1918, the Representation of the People Act gave (some) women the vote for the first time. In this the centenary year the Institute of Certified Bookkeepers decided to honour 100 inspiring and influential women bookkeepers. Here are some of their stories… It only seems right and fitting to start with Emmeline Pankhurst, the leader of the British Suffragette movement and champion for votes for women. Not a lot of people know this, but long before becoming a political activist she attended school in Paris where she was taught bookkeeping. In her autobiography ‘My Own Life’ she explains: “The school was under the direction of Marchef Girard, a woman who believed that girls’ education should be quite as thorough as the education of boys… she included chemistry and other sciences in the course, and in addition to embroidery she had her girls taught bookkeeping.” This wonderfully put together list includes Nannie Helen Burroughs, an African-American civil rights activist, feminist and businesswoman. From 1890 to 1908 she worked as the editorial secretary and bookkeeper for the National Baptist Convention. We are told that Burroughs
Emmeline Pankhurst
helped found the Women’s Convention, the female arm of the NBC, and delivered a speech at the first Baptist World Alliance meeting in London called ‘Women’s part in the world’s
work’. She later founded the National Training School for Women and Girls in Washington DC. Also on the list is Elizabeth Arden, who dropped out of nursing school and worked in Manhattan as a bookkeeper for ER Squibb Pharmaceuticals Company. It was here that Arden learned about skincare and Elizabeth Arden Cosmetics (now worth an estimated $1.3bn) soon followed. She famously gave out red lipstick to the New York suffragettes marching on Fifth Avenue in 1912. Her ‘Red Door’ lipstick shade soon became a symbol of unity and strength for the movement. There are, of course, modern-day champions on the list, including Julie Austen and Steph Busby. Austen’s Bookkeepers in Buckingham (BiB) is a family-run business that looks to help family-run businesses. They have been multiple winners of the ICB’s ‘Luca’ Awards. Meanwhile, Busby’s earliest memories are of her watching her mum complete manual double-entry journals as part of running her own business. After a career in industry and starting a family she decided she wanted to be her own boss, just like her mum. She enrolled with the ICB and was soon opening her own bookkeeping practice. Check out www.bookkeepers.org.uk for more great inspiring stories about ‘women who bookkeep’. PQ
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
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PQ Magazine October 2018
ACCA exams PQ
A
s we all know – and as PQ magazine so frequently reminds us – ethics is an important factor driving our profession. For accountants to be at the helm of major companies, organisations and governments across the world, the public must have complete trust in the public value of our profession; the high ethical and moral standards that we hold ourselves to. But ethics is not a single or static concept, and nor do ethical challenges always have one clear answer. Can there even be just one, universal way to define ethical behaviour when culture, jurisdictions, rules and regulations are different for individuals around the world? There are great benefits as the world adapts to globalisation, digitalisation, hyper-connectivity and more – but this also brings new challenges like cybercrime and cross-border fraud. Last year, the chief executive of BlackRock, Larry Fink, published a letter called ‘A sense of purpose’. He challenged fellow CEOs and business leaders with six fundamental questions: “Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce? Are we adapting to technological change? Are we providing the retraining and opportunities that our employees and our business will need to adjust to an increasingly automated world? Are we using behavioural finance and other tools to prepare workers for retirement, so that they invest in a way that will help them achieve their goals?” Immediate challenges These questions may have been directed to the investment landscape, but they resonate for the accountancy profession and wider business, too. They vocalise immediate challenges like automation, ageing populations and unsustainable investment, but simultaneously call for a broader, long-term change in mindset from the top. The digital economy needs professional accountants just as much, if not more, as the generations before us. We must earn society’s trust, and then use our professional and technical skills and training to lead organisations ethically over this unfamiliar ground. All this is why I want to flag an important date for PQ readers: 17 October 2018. This is Global Ethics Day. Created by the Carnegie Council in 2014, the event has since been held annually on a date in mid-October. The Carnegie Council encourages other organisations to get involved, and this year ACCA and the CFA Institute have joined forces to shine a spotlight on all things ethics and professionalism. ACCA is running a number of events around the world to mark Global Ethics PQ Magazine October 2018
An ethical date
for your diary Alan Hatfield highlights an important event that all PQs should engage with
Day, including film festivals in Singapore and Hong Kong, which will show films on the theme of ‘advocating for business ethics in a globalised world’. We’ll be airing three documentaries, and do encourage PQs around the world to join us and watch from home – they are: Banking on Bitcoin (2016), a film about the cyber and digital monetary revolution; Big Men (2014), an analysis of balancing risk and reward during oil discovery in Africa; and The Price We
Pay, which looks at the widespread impact of tax avoidance and offshoring by big business. They are all thoughtprovoking films, and I am really looking forward to seeing the debate unfold around the big issues of ethics, corporate behaviour, and the interconnection between business, politics, economics, society and value creation. While Global Ethics Day is a fantastic opportunity for a single, global, focused conversation on the topic, it’s important that ethics should be considered more than just once a year. At ACCA, we see ethics as underpinning everything we and our profession does. That’s why we recently introduced our new ethics and professional skills module, ensuring that ethics retains its place at the heart of our qualification, and that our materials are relevant for the changing world. I hope that many ACCA PQs have had a chance to take this new module. It’s designed to develop the complete range of skills that employers told us they need. It introduces the full spectrum of advanced ethical and professional skills and highlights realistic business situations that accountants may experience or encounter. It aims to develop the ethical and professional behaviours needed to successfully complete the Strategic Professional exams, as well as prepare for a successful career as a trusted and confident professional accountant. For those of you who’ve taken the module already – I hope it’s made you think about what ethics and professionalism means to you, and really instilled you with your ethical compass to take forward into the workplace. So all PQ readers, please mark 17 October in your diaries, and perhaps take a moment to think on that day what ethics and professionalism means to you. You could start a conversation with friends and colleagues. I hope to hear from many of you on the day. But I am also confident that for the accountancy profession, and especially for ACCA PQs, ethics isn’t just about one day – it’s 24/7, 365 days a year. PQ • Alan Hatfield, ACCA’s executive director – strategy & development 15
PQ CIMA spotlight
The rise of the
CGMA designation
Andrew Harding explains how the institute is looking to ensure its PQs thrive in a fast-changing world
K
eep learning, keep reimagining what finance can do. And not only bring ourselves, but also the whole finance community to a new level.” That’s the challenge set to us by Shirley Liu, FCMA, CGMA, CFO for CocaCola in Greater China, Korea and Mongolia, at a recent event in Beijing. The bar is set high – rightly so – and this got me thinking about change in the digital era. If we all stop for a second to look around us, we seem to be on a race to catch up with the latest innovation
16
transforming the way we live or work. Artificial intelligence. Robotic automation. The Internet of Things. Those are just a few of the forces that will further accelerate transformation and challenge our already strained ability to adapt. All of us have to think differently. In particular, as a world-leading professional accountancy body, we spend a lot of time looking beyond the horizon and considering the implications for skills and careers. That was the very genesis of the CGMA designation, which the Chartered Institute of Management Accountants (CIMA) created with the American Institute of CPAs (AICPA) six years ago. We designed a designation representing exactly what employers told us they need for the modern business era – a global quality benchmark signifying deep
financial knowledge, broad strategic acumen and constantly evolving competencies. CGMA builds on the rich heritage of CIMA and the AICPA – both stalwarts of innovation and integrity – and, for CIMA members, strategically complements the ACMA and FCMA. It’s a mark of future relevancy. In a recent report ‘Accounting Certifications Employers Really Want to See’, by the recruiting firm Robert Half, the CGMA designation was listed second. This echoes other findings I’ve seen. We regularly commission independent research to make sure our qualifications are meeting expectations with employers. In an international survey of more than 1,000 employers late last year, among respondents familiar with the CGMA designation, 91% said that it is valuable to their organisations. More than three-quarters, 76%, pay a premium to those who hold it. To me that support speaks volumes. We also hear it first-hand as we meet with senior executives and hiring managers around the world. Broad scope Consider this comment from James M. Waddell, Controller at Bose Corporation: “We need to understand those changes that are going on… And, when it’s possible, we need to do the disrupting. This is where the broad scope of the CGMA programme is incredibly helpful to us. Our CGMAs take a look from all those dimensions and understand performance, understand what’s coming and partner with our business leaders to understand the possibilities. The CGMA is a gift to finance leaders.” That’s exactly our goal: for CGMA to be a bright beacon towards the future. For organisations, certainly. But just as importantly, for professionals who are future ready. It’s why we’re investing heavily in our ‘future of finance’ research and have put this at the heart of our Association of International Certified Professional Accountants. Together we’re doing more to drive a dynamic accounting profession worldwide and reimagine what finance can do. PQ • Andrew Harding is Chief Executive, Management Accounting, at the Association of International Certified Professional Accountants
PQ Magazine October 2018
CIMA exams PQ
Your flexible friend? W
arning – old codger alert! When mapping out this article in my head I thought about a series of adverts for a credit card portrayed as ‘your flexible friend’. When I looked it up to remind myself which credit card, it turned out to be an Access card from way back in the 1980s. Anyway, to flexibility. As a yoga teacher people assume that I must be super bendy and spend my time contorting my body into impossible poses. They also assume flexibility is the key to achieving those postures and therefore that flexibility is good. In fact, that is only half the story; too much flexibility is actually a bad thing, which can cause premature or unnecessary wear and tear to muscles, tendons and ligaments. Flexibility needs to be balanced by strengthening; many of the more challenging yoga postures require great strength and stamina as well as flexibility. Let’s put this analogy into a CIMA context. The flexibility in assessment introduced alongside the 2015 syllabus has been hugely popular with employers and students; the ability to study how and when you want and take an exam whenever you are ready has got to be good news – right? Certainly those students who qualified back in the day of the Access credit card would be over the moon. They had to sit and pass all four papers in a level at the same time and if they failed one, had to re-sit the whole level. However, as we have seen, flexibility has to be balanced – in the case of the CIMA exams with a structure. This was once integral to the qualification but now has to be created by you. Without that structure, it’s too easy to put off booking an exam or postponing one because you do not feel ready or are too busy. We even know of employers asking students to put back their exams and prioritise business activities. This can mean that the very flexibility designed to help you progress at your own pace can become a barrier to your progression – only if you let it. Therein lies the heart of the problem…and the solution: embrace the flexibility but within a planned and structured approach. I am often asked about the ideal time frame for studying and completing the CIMA qualification. While there is no onesize-fits-all answer, here are a few suggestions. First of all, think in levels (Operational, Management, and Strategic) not in individual subjects. The three individual subjects at each level are preparing you to become competent in those subjects, and also to be able to integrate and apply the knowledge and skills learned to a PQ Magazine October 2018
Jackie Durham explains how to make the most of the flexibility of the CIMA assessments and has a few lessons learned from the May case study exams
comprehensive case study, which completes the level. For many students, completing one full level in 12 months is a realistic target. Those on graduate training programmes may progress more quickly and those in jobs, which are not relevant, or who have a lot of other demands on their time, may take longer. But, overall, a level a year, completing the qualification in three or four years (allowing for an odd re-sit along the way) seems achievable. So how do you allocate time to exams across that 12 month-period? Roughly three month-preparation per subject plus three months for the case study. The three months per subject could be combined so that all three subjects are studied together over a nine-monthperiod. Personally, I’d go for this option as the subjects are often complementary (especially at the Strategic level) and all come together in the case study, so not looking at them in isolation makes sense to me. Also, there is usually one subject we don’t like or are less good at, so studying a number of subjects will balance out the “oh I’ll never get it” sessions with the positive ones. However you choose to do it, focus on levels and set yourself a deadline for completing each one. While we are talking about integrating topics, I have picked up a few tips from the Examiner’s Reports following the May 2018 case studies. Interestingly, a weakness in core technical skills comes up at every level. In the Operational case study (OCS), where the majority of marks (64%) are for technical skills, the examiner says that candidates are weak
in P1 and F1 in particular, and advises that knowledge in these areas is refreshed prior to sitting the OCS (especially if candidates have been exempt from or sat P1/F1 a while ago). A similar theme comes up in the Management case study (MCS)/Gateway feedback – poor knowledge of core technical areas such as financial reporting (and F1 in general) and aspects of management accounting such as transfer pricing and performance measurement! In both the OCS and MCS exams, many candidates do not successfully demonstrate application of their knowledge and skills to the business scenario in the case. By the time you get to Strategic case study (SCS), technical skills account for just 25% of the marks but they are still incredibly important. Many candidates seem to forget this with weakness being evident in topics such as hedging, treasury and currency. The SCS examiner also points out that candidates fail to make good use of the exhibits in the unseen, which are included to help them! She said: “In a number of tasks, having actually read the article would have been very useful and assisted them in formulating their answers… candidates are losing marks by not paying attention to these exhibits.” In conclusion, flexibility has been a great step forward in assessment but to make it work for you, you need a planned and structured approach, which includes setting deadlines to keep yourself on track. Good luck! PQ • Jackie Durham, Education and training consultant, CIMA 17
PQ T accounts
A
ccruals and prepayments can be tricky, especially when the examiner mixes up accruals and prepayments in the same question. In this article we’ll focus on accrued and prepaid expenses although the same principles can be applied to accrued and deferred income. When you first learn the basics of double-entry bookkeeping I’m sure you would have used T accounts, but as you progress through your studies you may have stopped using them and try to figure out the answers without them. Well, I’d like to let you into a ‘tutor’ secret – I still use T accounts whenever I have to answer an accruals and prepayments question, as most of the time it helps me get the right answer first time. Take a look at this question from the ACCA FA specimen paper: The following transactions relate to Rashid’s electricity expense ledger account for the year ended 30 June 20X9. $ Prepayment brought forward 550 Cash paid 5,400 Accrual carried forward 650 What amount should be charged to the statement of profit or loss in the year ended 30 June 20X9 for electricity? Well, we could work this out logically like this: The prepayment brought forward relates to a payment made in advance last year, but the expense relates to our current year. The accrual carried forward relates to electricity we have used in the current year but have not yet paid for. So, both the $550 and $650 relate to the current year. As we have accrued expenses the full cash paid in the year must relate to the current year, so we must also add the $5,400 to the $550 and $650 to get a total electricity expense charge for the year ended 30 June 20X9 of $6,600. There is a risk, however, that we could make a simple logic error as we work this through in our minds. To significantly reduce this risk, I always use a basic accruals and prepayments proforma for these questions: Expense account 1
Prepayment b/f
X
2
3
Cash paid
X
8
5
Accrual c/f
X
7
Getting it do In the latest in his Back to Basics series, Avado’s Paul Kirkwood explains accruals and prepayments using the T accounts method
Electricity expense account 1
550
3
5,400
Prepayment b/f Cash paid Accrual c/f
Prepayment b/f
X
6,600
Office expense account 9,500 89,100
98,600
Profit or loss expense (balancing figure)
88,400
Prepayment c/f
10,200 98,600
10,200 (W1) Rent prepaid at 30 June 20X7 Paid three months in advance on 31 May 20X7. One month relates to the year ended 30 June 20X7, so two months are a prepayment for the next year $15,300 x 2/3 = $10,200 Therefore, the correct option is B. There are a few other things worth mentioning about accruals and prepayments T accounts. Firstly, we have seen here an efficient way of doing the workings, by only using one T account. However, when you first start learning how to do accruals and prepayments, you might find it easier to have one T account for the accrual/prepayment and a separate T account for the expense, like this (see table top of facing page):
6,600 Accrual b/f
4
650
You can use the proforma T account for most accruals and prepayments questions as it helps ensure you get your entries in the right place, but you may have to calculate some figures before including them.
X
Profit or loss expense
X
Prepayment c/f
X Y
Accrual b/f
4
8 Profit or loss expense (balancing figure)
6,600
Accrual b/f
The top line details any prepaid or accrued expenses at the start of the accounting period in question. 1 Prepayments, being an asset, are a debit and 2accruals, being a liability, are a credit balance. The 3cash paid is on the second line as a debit entry as the double entry would be Dr expense Cr Cash. 18
650
5
Y 6
Any 4accrual at the end of the year Prepayment b/f is a liability and Cash paid therefore a credit balance underneath the T account. The corresponding 5 accrual c/f balance Prepayment b/f is therefore shown on the other side of the T account, on the debit side. Similarly, any 6prepayment at the end of the year is an asset and therefore a debit balance underneath the T account. The corresponding 7prepayment c/f balance is therefore shown on the other side of the T account, on the credit side. The resulting 8profit or loss expense charge for the year is shown as a credit balance as it is taken out of the expense account and debited to the Profit or Loss account at the end of the accounting period. Let’s demonstrate this with the information about Rashid’s electricity and work out the correct answer.
X
• Paul Kirkwood is the Head of Learning for ACCA at AVADO
Try this question yourself: Jam is preparing its financial statements for the year ended 30 June 20X7. Its draft trial balance includes: (1) A balance for office expenses (including rent) paid in the financial year of $89,100. (2) A balance for prepayment of rent at 1 July 20X6 of $9,500. On 31 May 20X7 Jam paid three months’ rent in advance of $15,300 Which is the following will be the figure for office expenses in Jam’s statement of profit or loss for the year ended 30 June 20X7? A $60,400 B $88,400 C $89,100 D $93,500 Use a T account to help you put the figures in the right places and the missing figure will be the office expenses.
Call me Mr T PQ Magazine October 2018
T accounts PQ
own to a ‘T’ Prepayments Expense Prepayment b/f 9,500 Cash paid 89,100 Expense 88,400 Prepayment 88,400 Prepayment Profit or loss c/f 10,200 expense 88,400 98,600 98,600 Prepayment b/f 10,200 This often helps students understand the procedure, as they can see the expense appearing as a debit balance, which is what they are expecting. Secondly, not everyone uses the same process. You might find that when you are practising questions, or even at work, that the layout of the accounts is different. For example, the cash paid might be shown in the expense T account, and then adjusted for any movement in the prepayments or
PQ Magazine October 2018
A nice cup of T
A Model T Ford
Prepayments Expense Prepayment b/f 9,500 Cash paid 89,100 Movement 700 Movement Profit or loss (balancing figure) 700 Prepayment (balance) 88,400 c’f 10,200 10,200 10,200 89,100 89,100 accruals. For example (see table above): As you can see, the expense being taken to the profit or loss will be the same either way, as is the prepayment c/f at the end of the year. It’s just a different procedure. In the exam, the most important thing is to get the right answer! So choose whichever method works for you, and stick with it. PQ
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YOUR TIME TO SHINE
PQ Awards 2019
Finally it’s here – nomination time for the 2019 PQ magazine Awards. Get your entry in nice and early
T
he countdown clock is ticking for the 16th PQ magazine awards night. We are now dusting ourselves down to get ready - so all we need now are your nominations! London’s glamorous Café de Paris will again be the venue for the top awards night in town, but it won’t be the same if you aren’t there. Last year we had an accountancy dance off and Britain’s Got Talent’s Daliso Chaponda as the warm-up act. But don’t take our word how ‘fun’ these accountancy awards are, check out the highlights at https://tinyurl.com/y7u26sce Winning one of our shiny ‘PQs’ can change your world! Our Apprentice of the Year, Rahil Mahmood, was speechless after he got the star treatment at the event last February. The awards attract a ‘who’s who’ of the industry. Among last year’s 300 guests were lots of big cheeses, including ACCA’s Alan Hatfield, CIPFA CEO Rob Whiteman, AAT’s Suzie Webb, and ICAEW’s Mark Protherough and Shaun Robertson. Everyone who gets shortlisted will get an invite to the awards night, and with 18 coveted PQs up for grabs you have plenty of chances to be at the party. As always, we are looking for a college and lecturer from both the public and private sector. Last year’s winners of College of the Year were the
wonderful south London teams at the Training Place of Excellence and London South Bank University. Both deserving winners, but we know there are lots more great teams out there who deserve to be recognised. To get started all you need to do is download our nomination form from our website. Go to www.pqmagazine.com and click on the ‘pq awards’ bar at the top of the page. Alternatively, email us your nomination directly, making it crystal clear which award category you are entering. It’s vital that we have all your details too, because we may want to invite you to the awards! So, what do we need from you? All you have to do is write 250 words and provide any supporting evidence separately for one of our awards. We are all about quality here and not quantity. Those with the most entries don’t win – just one nomination form goes into the judging room. Remember, we also allow you to nominate yourself. This is not a time to go all shy on us. Just ask EQ Accountants’ Michael Scott. He entered in 2017 and was shortlisted but this didn’t stop him. In 2018 he put himself forward for NQ of the Year and was the clear winner. His talent was recently picked up by his accountancy body, who named him ICAS One Young CA 2018. Once you have everything ready send it to awards@pqaccountant.com or post 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
Dancing the night away at the PQ Awards!
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PQ Magazine October 2018
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2018 â&#x20AC;&#x201C; TYSON NSIMBIE Itâ&#x20AC;&#x2122;s best we let Tyson explain what he does: â&#x20AC;&#x153;Problem solver, solutionist, accountant, project manager, consultant â&#x20AC;&#x201C; accountancy gives me superpowers to support the dreams and aspirations of family and friends, as well as improve my local community by sharing my expertise and experience.â&#x20AC;? This ACCA PQ works for FairFX, and in five yearsâ&#x20AC;&#x2122; time hopes to be managing a â&#x20AC;&#x153;team of Tysonly trained geniuses taking finance, compliance and risk to the next levelâ&#x20AC;?. His advice? Do your homework!
2017 â&#x20AC;&#x201C; TIM MPOFU Tim was part of the graduate programme at Ealing Council when he became our winner. A CIPFA PQ, he wants to make a positive impact on the public sector and society as a whole. He became a PQ cover star and was shortlisted for a CIPFA award the same year. And his fame continues â&#x20AC;&#x201C; his picture adorned the CIPFA stand at this yearâ&#x20AC;&#x2122;s conference in Bournemouth. But we donâ&#x20AC;&#x2122;t believe he has been able to keep his claim to fame. He held the record for the longest run of games unbeaten in the work five-aside football.
2016 â&#x20AC;&#x201C; MANUY FIGUEROA During the week, AAT Manuy Figueroa worked at St Martyâ&#x20AC;&#x2122;s Services Chartered Certified Accountants, but at the weekend he played bass and percussion for Latin American music makers Manzana Topical. He is also the first PQ of the Year not to attend our awards night â&#x20AC;&#x201C; he had chickenpox! Winning the award was a fantastic boost to his confidence, and he went on to study for an accountancy degree at Leeds Becket University (he gets nine exemptions from the ACCA exams, too!).
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PQ CIPFA viewpoint
Look forward CIPFA Student Network President Sophie Medwell has some top tips for students and employers
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n 10 July I took over the role of CIPFA Student Network President. The network provides a voice for students, ensures their interests are represented and supports ongoing development and networking. As Student President I work with other network members and CIPFA to support students, represent students’ concerns, promote CIPFA as a qualification and advise key internal stakeholders. One of my first duties as Student President was to share the opening speech of the CIPFA Annual Conference with CIPFA President Sarah Howard. She has set three priorities for her presidential year, one of which relates to inspiring future generations, considering the changing expectations of the workforce and the impact of technology. As a member of this ‘future generation’ I was asked to talk about this priority, alongside the conference theme of ‘Talent, Technology and Transformation’. I began researching around this area, considering my
priorities for my presidential year. The first point of my speech was to set the scene. Research shows that millennials will represent over a third of the global workforce by 2020, and that the expectations of this generation have changed. My personal experience has shown me that people change jobs much more frequently, and consider wider
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factors such as flexibility, autonomy and social value when applying for jobs. My second point was to show that a career in public finance offers the factors mentioned above and is therefore a great place to start a career. Public finance is struggling to attract the best talent as there is a national shortage of accountants and a reduction in the funds available to train accountants. However, the public sector has a track record of offering flexibility and giving the chance to give back to the community. I therefore encouraged all employers to consider their recruitment and talent development processes to align with the motivations of the future generations, in order to attract and retain the best talent. Finally, I highlighted the benefits that I have experienced by being a part of the CIPFA Student Network. I have been given the opportunity to chair meetings, draft reports and meet influential finance professionals. So I gave a call to arms to the audience to engage with their students, encourage them to get involved, take students to meetings, and give them an idea of what senior roles involve. I believe that these experiences have an immeasurable impact on careers and make students more valuable and engaged employees. I would also like encourage PQ readers to take my message on board. Get involved with your institutes, and ask your employers for support to define your own career. The experiences you will have and the people you will meet will be unforgettable. PQ • See Life at… on page 29
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PQ Magazine October 2018
THE DARK SIDE OF ACCOUNTING Ethical Dilemmas and Sustainability Challenges Wednesday 28 November 9am-7pm Keyworth Centre, LSBU
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PQ ICAEW exams
Preparing for your CBEs ICAEW answers some frequently asked questions about the CBEs
M
ore than 31,000 ACA Professional and Advanced Level exams have now been taken on computer, and by July 2019 all exams will be computer-based. The move to computer-based exams provides ACA students with the opportunity to undertake exams in a format reflective of the professional work environment. It encourages students to produce well-structured responses and to show all workings, as would be expected when preparing a report for a client. To ensure you are prepared for your computer-based exam, ICAEW has answered some of your frequently asked questions: • What's the best way to plan for a computerbased exam? Practice! Use all of the resources provided at icaew.com/cbe. These include sample exams and answers, question bank questions within the practice software, webinars, the computer-based exam guide, exam top tips and more. Access the question banks within the exam resources area of the ICAEW website. Go to icaew.com/examresources and select the level and exam you are studying. • Can I sit the exam by hand rather than by
computer? No. Once an exam has moved over to computer, it will no longer be sat using paper. However, if you have a medical condition that requires you to sit any of your exams on paper, you should apply for access arrangements. See guidance on this and the full application process at icaew.com/accessarrangements • What if I delete a column with information inside by accident? Can I undo this? Yes. The undo button allows the last five actions to be undone. • What happens if I insert formula and it becomes void when I insert cells? You need to update your formula when inserting a new row or column. • Does the marker see exactly what is on our screen, ie, a screenshot or do they get the export view that we practice with? Your answers will be presented to the examiner exactly as they appear on screen. They will not be able to see any formula you have used in any cell. • When answering the exam questions do you have to make all columns A-K fit the screen? No, you can increase or decrease the size of the rows and columns as long as your response is visible. • Does the spreadsheet support all calculations including some of the complex ones? The
software supports basic functionality, so it’s important to show all your workings. • Are there any keyboard shortcut functions I can use? The software allows for cut, copy, and paste. You can find more information on this in the exam guide at icaew.com/cbe • Can I drag formula like I do in Excel? No. Current functionality does not allow for formula dragging. • Will my exam centre’s keyboard have shortcut functions for currency? If not, what should I use? Depending on which country you sit the exam in, you may not have all the currency symbols on your keyboard. Sensible abbreviations should be used instead, for example, P or GBP for £, D or USD for $, E or EUR for €. • Is there spell check? There is no spelling check function, so do a check of your spelling and grammar. • What can I do about noise? If you are easily distracted by noise, you can use earplugs to help you concentrate in the exam room. ICAEW is holding a live webinar on Thursday 4 October at 10:00 (UK-time) to take you through the computer-based exam experience and answer your questions. To register for the event visit icaew.com/events PQ • Thanks to ICAEW for this article
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PQ Magazine October 2018
trading losses PQ
T
he use of losses is an area that is commonly examined in tax exams and an area that students often get confused about, so in this short series of articles I hope to dispel some of the myths relating to losses. In this first article I’m going to look at trading losses. I will then move on to look at non-trading losses and finish off with group relief groups. Let’s first take a standalone company with trading losses and remind ourselves of the profits that a company pays corporation tax on: Trading profits Property income Profits from non-trade loan relationships Chargeable gains Total profits Qualifying charitable donations Taxable total profits (TTP) If a company does nothing, the loss will carry forward to the next available trading profit of the same trade only (CTA 2010, s45(4)). This is unlikely to be the most beneficial use of the loss due to declining rates of corporation tax and the time value of money. Alternatively, the taxpayer can choose to offset the loss against this year’s total income (CTA 2010, s37(3)a). This loss must be claimed in full (potentially reducing current year total profits to zero). This may mean that those qualifying charitable donations are wasted, but at least the taxpayer gets immediate benefit for the losses by reducing their current tax bill. Once the taxpayer has chosen to claim the losses against current year income, they then have the option to offset any remaining loss against total profits arising in the previous 12 months (CTA 2010, s37(3)b). This must be claimed in full. This claim can be made even if there are no current year profits. Again, this may result in the qualifying charitable donation becoming wasted, but it does mean that the taxpayer will receive a refund for any tax already paid in respect of previous periods, and also some interest (and potentially save tax at a higher rate!). The final option is where the loss has been incurred in the final period of trading. Obviously we cannot carry this loss forward (CTA 2010, s45(4)) as there
PQ Magazine October 2018
KEEP DANCING! You don’t have to be at a loss about trading losses, says Adrian Davies, in part 1 of a three-part series exclusive to PQ
x x x x x (x) x
will be no future trading profits from the same trade. Instead, the losses can be carried back a maximum of 36 months from the start of the final period against total profits of the previous periods (latest period first) (CTA 2010, s39). If the company incurs a loss of £9,000 in the final six months to 30 June 2018 and incurs a loss of £24,000 in the 12 months to 31 December 2017, then the terminal loss will be £9,000 + (6/12 x £24,000) = £21,000. If a profit arose in the penultimate period you should ignore it for these purposes. For those of you who have studied the taxation of individuals with trading losses the rules are very similar. The exception is that an individual can carry the losses back before they relieve the loss against current year income. Please do not confuse them! One thing you need to be careful about is carrying the loss forward where there has been a change of control in the company. If there has been a major change in the nature or conduct of trade (MCINOCOT) during the six-year period starting three years prior to the change of control, then these trading losses will become restricted (CTA 2010 s673). The carry forward of these losses cannot extend past the change of control date (they hit a brick wall at this date and cannot be carried forward past this date).
If you are looking for what would constitute a MCINOCOT then SP10/91, (paras 7 & 8) has some great examples, but think practically in the exam and use the scenario – has there or will there be a change in customers, products or geography, for example. If there has, then these losses are likely to become trapped. Other things to consider would be whether it could be beneficial to claim less than the maximum amount of capital allowances, thereby restricting the size of the loss to carry forward (CTA 2009, S47) and also surrendering the losses attributable to enhanced capital allowances (CAA 2001,SchA1). I try to encourage my students to learn these rules with the loss relief ‘dance’. Create an imaginary timeline in your room (which is free from obstacles) and stand in the middle – this is your current year. If you move to your left, this will represent the previous 12 months. Returning to the current year, if you now move to your right this will represent carry forward claims. You can use this kinaesthetic approach to help spice up your learning by repeating the rules for loss relief as you move about the room. A word of warning… do not perform the loss relief dance outside your home! PQ • Adrian Davies is a tutor at Kaplan Financial
25
PQ ACCA examiner reports
FEEDBACK F
Hereâ&#x20AC;&#x2122;s your chance to learn from the mistakes of those who sat the June exams. We look at what the examiners of two papers with poor pass rates have to say about how you can do better
drawn from the areas of: â&#x20AC;˘ Performance management. â&#x20AC;˘ Risk and uncertainty. â&#x20AC;˘ Relevant costing. â&#x20AC;˘ Budgeting. â&#x20AC;˘ Transfer pricing. There were three questions covering PM in a variety of settings in June. However, the examiner said it was important to distinguish between goals and performance measures. When it comes to calculating ROI it is important that controllable profit is used whenever possible, rather than a profit figure that has been calculated after deducting uncontrollable costs. Risk and uncertainty continues to challenge candidates. Questions in this area include calculating profit values for a range of possible outcomes, interpreting decision trees, calculating expected values (sometimes incorporating joint probabilities), preparing minimax regret tables, using maximax and maximin criteria, and perfect and imperfect information. The examiner is concerned that students
F5 Performance Management June pass rate 38% The examiner reminds sitters of the importance of reading the requirements carefully. It was pointed out that when it comes to OTs it is â&#x20AC;&#x2DC;all or nothingâ&#x20AC;&#x2122;, and if you misread the requirement or miss a vital piece of information you could score a big fat zero. This also applies on how to round your answers too. Section B of the June exam covered the following: â&#x20AC;˘ Relevant costing. â&#x20AC;˘ Lifecyle costing. â&#x20AC;˘ Variances. â&#x20AC;˘ Throughput accounting. â&#x20AC;˘ Pricing. â&#x20AC;˘ Rolling budget. Candidates needed to be able to apply the logic of the concept or theory to the problem in hand. That means understanding the method and why you are doing the calculations. In section C the questions were mainly
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ACCA examiner reports PQ
FROM JUNE
seem to forget about costs all together or forget that there may be both fixed and variable costs. The June relevant costing question asked candidates to calculate the minimum cost for a contract and explain why all costs have been included or excluded. A common error when it came to the numbers was using financial accounting principles to value inventory rather than using relevant cost principles. The budgeting question looked at costs for various decision packages and then compared them. The most common mistakes in the calculations were failing to increase the material cost to allow for an increase in activity and failure to inflate the overhead costs. If you want to practise a transfer price question take a look at Portable Garage (PG Co), which was one of the sample questions published from the March/ June 2018 exams. When it comes to the CBE, PQs are told it takes a little more effort to make sure the requirements are properly broken down when reading, as they can be split over several screens. Do a small plan and ask yourself just how many things you are being asked to do. The examiner believes the CBE means it is easier to be more focused when answering a question at a terminal. The mere fact that you can see more clearly what you have written helps. It removes the temptation for candidates to discuss things that are irrelevant. PQ Magazine October 2018
F8 Audit & Assurance June pass rate 40% Section A in the June 2018 exam included, but was not limited to, questions on the following areas: • Professional ethics and application of ACCA’s Code of Ethics and Conduct. • Level of assurance provided by review engagements. • Substantive testing (testing on revenue, trade receivables and tangible assets). • Going concern. • Audit finalisation and the final review. • Auditor’s reports. The examiner also stressed it is imperative that your knowledge of ISAs, and areas such as audit procedures and going concern is at the appropriate level! Section B tested the following syllabus areas: • Audit framework and regulation. • Planning and risk assessment. • Internal control. • Audit evidence. • Review and reporting. When it comes to the audit framework the examiner says you need to have an understanding of the functions of an audit, be able to distinguish between the scope of internal and external audit and have an understanding of both corporate governance and professional ethics. The examiner also wants recommendations for ethics and corporate governance to be actions. Candidates were reminded that objectives are not actions. It was suggested you practice Hurling Co from the sample March/June 2017 questions. A good question to practise your internal audit is Raspberry Co from the March/June 2018 sample questions. The questions assessing audit risk tend to be scenario-based – you will have to identify and explain the risks from a scenario and give an auditor’s response to address the risks. Other questions in this area of the syllabus tend to be more factual knowledge-based questions and hence, the examiner hopes, depend on the ability of students to recall their knowledge in the exam. Audit risk questions typically require a number of audit risks to be identified (0.5 marks each), explained (0.5 marks each) and an auditor’s response to each risk (1 mark each). Typically, candidates can be required to identify and explain in the region of six to eight risks and responses. A good practice question on audit risk and responses is Blackberry Co from the March/June 2018 sample questions. For factual knowledge questions, check out Cupid & Co (September/December 2017). Audit risk
questions can also be combined with a requirement to calculate ratios. To practise these skills, you need to look at Centipede Co from the December 2016 exam. The examiner also points you to the technical articles on audit risk and ISA 40 – Auditors and Fraud. With internal control you will typically be required to identify internal control deficiencies (0.5 marks each) explain (0.5 marks each) and provide a relevant recommendation to address the control (1 mark each). There is also often a test of control that the external auditor would perform to assess whether each of these controls is operating correctly (1 mark). Internal control questions can also include the identification (0.5 marks each) and explanation (0.5 marks each) of key controls as well as tests of control (1 mark) to assess if the key controls are operating effectively. If a covering letter is required, this will be worth two marks. The examiner wants candidates to have a proper knowledge of the internal controls. You are pointed here to Heraklion & Co from the September 2016 exam. Deficiency is an area the examiner wants students to work more on. Check out Equestrian Co (March/June 2017) here. Tests of control appears to be another subject that troubles candidates, and ‘check’ is not an answer here. Look at Raspberry Co (March/June 2018). The key requirement for audit evidence questions is an ability to describe relevant audit procedures for a particular class of transactions or event. Students’ performance in June was disappointing. Future candidates are told to practice Dashing & Co (September/ December 2017). In addition, you need to read technical articles ‘The Audit of Financial Statement Assertions’ and ‘Audit Procedures’. A plea also goes out for students to understand substantive procedures. Learning a generic list of tests will not translate to exam success. Go to Gooseberry Co (March/June 2018) for a good example of what a substantive procedure question looks like. Questions on review and reporting may require candidates to describe audit procedures in relation to going concern or subsequent events and 1 mark is available for each well-described procedure, says the examiner. Alternatively, you might be required to assess the impact on the auditor’s report due to an unresolved accounting issue. Auditor’s reports are a core area of the syllabus and knowledge of the ISAs in this area is imperative. Good questions to practise here are Airsoft Co (March/June 2017) and Gooseberry Co (March/June 2018). PQ
There’s always stacks of practical advice for ACCA PQs on our website – go to www.pqmagazine.com 27
PQ state of accountancy
KEY FACTS AND TRENDS We take an in-depth look at the Financial Reporting Council’s annual report on the state of the accountancy profession
D
oes the UK and Republic of Ireland have too many professional accountants? The latest Financial Reporting Council report, ‘Key Facts and Trends in the Accountancy Profession’, shows there are nearly 164,000 accountancy students in the UK and ROI, and nigh on 590,000 worldwide. Meanwhile, membership of the accountancy bodies also continues to grow unabated. The report shows the seven bodies (excluding AAT) have over 360,000 members in the UK and ROI and over 530,000 members worldwide. A quick look at the populations of the UK and Republic* shows there are 135 qualified and PQ accountants for every man, woman and child in the two countries! A quick drill-down into the student figures show only the ICAEW, CAI and ICAS grew their student numbers in the UK and ROI for 2016/17. The ICAEW had the biggest rise at 6.3% to 20,946 students. Meanwhile, student numbers continued to fall at the ACCA and CIMA to 82,1224 and 48,263 respectively. It was a different story if you look at the worldwide figures. The ICAEW is still the star of the show with a total of 27,866 students and a growth rate of 7.9%. CIPFA is also showing its qualification has become a real hit overseas. It had a total of 4,401 PQs in 2017 – that’s a rise of 3.5% year-on-year. The ACCA also can’t stop growing outside the UK and ROI. At the end of 2017 it had 414,562 students studying its qualifications. Who can’t be impressed with these numbers? Equally CIMA has very healthy worldwide figures of 127,241. Bring on the women The number of female members continues to rise, be it ever so slowly. Overall, some 36% of members in the seven bodies are female. There is still, however, quite a difference between the bodies. At one end you have the ACCA on 46% and CAI on 41%; at the other is the ICAEW, which has been stuck on 28% for the past three years. The number of female students held steady this year at 49%. This is helped mainly by the ACCA, whose female numbers are an impressive 57%. CIMA has now caught up with CIPFA on 48%, 28
but it’s still the ICAEW that props up the table on 43%. A question of age While most students worldwide are aged under 34 (some 77.8%), there are still large numbers of PQs aged 45 and over studying. Some 34,243 in fact, or 5.8% of the total. The AAT (at 12%) has even more over 45s studying its qualifications. That said, the 2017 figures show 34% of students from the seven accountancy bodies were under the age off 25, compared with 30% in 2013.
* At the end of 2017 the population of the UK was 66,181,585. The population of the Republic of Ireland was 4,761,657. There were 360,124 members and 163,809 PQs respectively, according to the FRC report
Degrees of choice The Irish institute (CAI) wins when it comes to the number of students who hold a degree, with 92%. This is some way ahead of the ICAEW (74%). The number of CIPFA’s holding a degree has gone up from 47% in 2015 to 49% in 2017. Both the ACCA and CIMA degree holders have fallen below 50%, with the ACCA on 44% and CIMA on 46%. If you are looking for a PQ with a relevant degree then it’s the CAI you should choose – 74% of its graduates are accountancy ones. Just one in four ICAEW graduates have an accountancy degree, but it is CIPFA who has the least relevant degree holders, at 18%. The rise of apprenticeship schemes could have a big influence on these figures in future years.
Where do they work? According to the FRC figures, the vast majority of PQs (276,329) work in industry and commerce. Another 87,833 work in practice, and 54,611 in the public sector. That leaves 171,096 in the ‘other’ category. Average income The FRC also worked out the average income per member and student each body receives. The CAI squeezes a whopping £707 a year out of its members and PQs. This is closely followed by the Scottish Institute, which manages to raise £651, and the ICAEW on £525. Next is CIPFA on £403 and the ACCA on £315. The average income per member and student at CIMA is just £214. The AAT The AAT has its own section in the report. The report shows the AAT membership stood at 48,580 in 2017, down 1.3% year-on-year. Student numbers worldwide also declined by 8% to 77,649. More of a worry would be the fall in student numbers in the UK and ROI – 18%. In all, some 51% of AAT members are aged 45 and over while 35% of students are under the age of 25. PQ • The FRC’s sixteenth edition of ‘Key Facts and Trends in the Accountancy Profession’ was published this summer PQ Magazine October 2018
careers PQ
social media ROUND-UP In early September we pushed out the story that ACCA PQs should be sitting more papers, like their ICAEW counterparts (see story on page 6). Leah McCaul pointed out: “In my work I’m the only ACCA trainee, the others are CAI [Irish chartered trainees]. They go to classes October to May and then sit exams July/August. So they take longer in the learning stage, which is why they can sit more at one time.” Richard Clarke added: “ICAEW students generally get two to three months study time with no work.” Lysann McKay felt it was a personal preference thing as well. “When I started I sat two papers per sitting. I then went down to one per sitting and my pass marks have improved considerably…” And Lucy Gildroy said: “I think the two attract very different people at different phases of life, and the entry requirements are different. There are far too many confounding variables to be able to torture any meaning from these statistics.” That didn’t stop us, Lucy! Julia Batham thought that if some ACCA exams were open book, like some of the ICAEW exams, then pass rates could go up. Meanwhile, Nasir Ud-Din Khan pointed out our story was probably true, and that “ACCA students allow themselves more time to prepare themselves – for a big fail eventually – the more time you have the more you tend to lose!” But it was Alexey Di’s comments that made us
laugh the most! He took a look at the picture we used for the story and said: “I want this bag!” Another comment on Facebook that caught our eye came from Ahmed Bhana. He wanted to know, rightly, why international firms need to advertise junior post with ridiculous age brackets? He pointed out the ‘aged between 23 and 30 years’ on the job ads. He feels, rightly, that many 18-22 year olds are more than fit to take up a trainee post. We think these ads appeared in Africa. PQ Magazine October 2018
Life at Grant Thornton Sophie Medwell, 25, is an audit executive based in Bristol. She has worked there for four years. She has a law degree from the University of Birmingham, and qualified for CIPFA in December 2017. She is currently President of the CIPFA Student Network What time does your alarm clock go off on a working day? 7am. What’s the first thing you do when you get to your desk? Log in and check my emails. What’s on your desk? We hot desk, so I carry everything around with me. I’ll have everything I need for the day including my trusty purple water bottle. What’s the best thing about where you work? The people, we have an amazing team of talented individuals who support each other through the challenges and celebrate together. Where’s your favourite place to go for lunch? The Thursday food market at Temple Meads. What (or who) can you see when you sit at your desk? The Gardiner Haskins department store, in an old soap factory.
Which websites are your favourites and why? The BBC is my go-to news website and I spend way too much time on social media. Which websites do you use for work? I get a lot of information from clients’ websites and am also constantly referring to the CIPFA Code and NHS GAM. How many hours a week do you spend in meetings? It varies week-to-week, from two hours to 10. What time do you leave the office? On a normal day, 5.30pm. During busy season it can be very late. How do you relax? I play the cello, sing in a choir and love to cook. What’s your favourite tipple? G&T.
How often do you take work home with you? I try to avoid this during our quieter times, but most evening and weekends during busy season. What is your favourite TV show? Game of Thrones. Summer or winter? Winter. Pub or club? Pub. Who is your hero? Is it cliché to say my parents? If you had a time machine, where would you go? I’d love to experience the 1920s. If you hadn’t chosen accountancy, where might you be right now? I have no idea! I sort of fell into accountancy, having decided law wasn’t for me. I’ve always wanted to work with the public/third sectors, so maybe I would have gone to work for such an organisation.
What employers really want... their ‘questionable conduct’. Many employers also admitted that they are likely to disregard a CV if they found incorrect spellings or poor punctuation. Keeping to the standard two-page CV is another key to success.
Fitting into a company’s culture, a proactive personality and punctuality are some of the top things employers look for when looking to sign up a new employee, says a new AAT poll. More than a third of the 1,000 employers surveyed said they simply ask that candidates show common sense. TOP FIVE CV ‘MUST-HAVES’ 1. Clear layout 2. Two-page limit length 3. Appropriate font and font size 4. Clear language 5. Correct spelling throughout
Half of employers revealed they have used a candidate’s social media profile to gauge whether they are fit for the job. Of those who checked candidates online, more than two-thirds have denied an applicant the job based on
EMPLOYERS’ TOP FIVE PRIORITIES WHEN HIRING 1. How you fit into the company culture 2. How much experience you have 3. Your general personality – do you have one? 4. How well qualified you are 5. A proactive attitude
The PQ Book Club: books you should read 21 Lessons for the 21st Century, by Yuval Noah Harari (Penguin, £18.99) There’s no doubting Yuval Noah Harari’s ambition. The latest book from the highly regarded author covers the greatest challenges facing the world today and in the future, from politics and religion to AI and technology (and many, many more topics). It’s an enormous task that might have been better dealt with in two or three volumes,
but even so Harari has given it a good go. This is an important book – it’s no bundle of laughs, but there are reasons to be optimistic, too. Throughout, the author argues that through international co-operation and liberal democracy these challenges can be confronted. Insightfully, Harari identifies that the world we have created is actually too complex for us to understand. So we cling to simplistic, self-important narratives often associated with
nationalism and religion, with conspiracy theories and fake news a recent iteration of these narratives. This book will make you think (no bad thing!). So what can you do for humankind, both today and in the future? The world is in all of our hands. PQ rating 4/5 A clever, often witty and compelling book 29
PQ got a story, funny or serious, you want to share? Email graham@pqaccountant.com
SHAME ON YOU, MALTESERS!
What could be ‘worse’ than being a lesbian or a vegetarian? Well, according to the latest Maltesers advert it’s ‘an accountant’, obviously! The advert starts with a group of women sitting around chatting and eating Maltesers, when Sara reveals there’s something she’s not told her parents. She feels discriminated against and when she finally comes clean about being an accountant one friend simply says “that’s disgusting”. PQ believes its time to fight back, and we think her parents will be ecstatic when they find out about her career choice. Being all three would be great too, we say!
CHARACTER ASSASSINS PQ isn’t sure what Ben Froughi has done to upset those writing the ‘Prufrock’ column in The Times, but they seem to be overly keen to follow his career ups and downs. Froughi made headlines in 2016 when as a York University student he handed out leaflets telling newbies that they didn’t need to attend a sexual consent talk. We are told he then went on to work for PwC “although not for long”. In an email announcing his departure he seems unhappy with PwC’s culture of “political correctness”. He apparently
had been told off for using social media and had to attend a course on subconscious bias. Prufrock also pointed out that he was actually fired for failing a professional exam! So, PwC are still firing people for one exam failure…
Get any great pictures when you graduated? Mackenzie Noland has one that recently became a Facebook sensation. She’s pictured after graduating from Texas A&M University in wildlife and ecology. Oh, and her ‘friend’? That’s Big Tex, a 14-foot, thousand-pound alligator!
WHO WROTE THAT? Employers might be right when they claim many graduates can’t write! New research from Swansea University discovered that one in seven graduates have paid someone to write an essay to help them pass their degree. The university standards watchdog, the Quality Assurance Agency, is putting pressure on the UK government to outlaw all online essay mill firms. Such firms are already illegal in the US and Ireland.
Scrapping 1p and 2p coins would have no significant impact on prices, say economists at the Bank of England. The UK government is considering scrapping the coins, which cost more to make than they are worth! However, there was concern that the public would argue that retailers would use the coins demise to increase prices. The worries have be superseded by the growing use of cards for even small purchases.
DREAM ON
DIGITAL FINGERPRINTS
No matter how you swipe, tap or hold your mobile phone, the banks are watching. Using technology from Israeli firm BioCatch, the Royal Bank of Scotland and other high street banks are tracking ‘biometric behaviour’ on smartphones being used for mobile banking. From how you type to the way you hold your phone, data is being collected that can distinguish fraudsters from legitimate customers.
’ WEV E
SMALL CHANGE
It’s every students fantasy that playing back lectures while they are asleep will help them absorb the knowledge they need to pass their exams. Well, you can forget that! Researchers from the Uniersite libre de Bruxelles say that while the brain can detect sounds during sleep it can’t order them in any meaningful way. This is because of the “deactivation of higher processing brain structures.” While the findings don’t totally scotch the notion of hypnopaedia, the scientists say that learning mathematical concepts or playing course texts ahead of exams won’t work.
ON TARGET
Great to see the AAT is still using PQ magazine’s July 2017 cover star in its newspaper ads. Rebecca Fay, the accounts junior at Streets Chartered Accountants, Cambridge, was crowned the AAT’s new Apprentice of the Year. She’s now studying for ACCA. There’s a reason why she’s in a football shirt, too. At the time she was also a star player for Cambridge City Ladies FC.
GOT THE L OT
Do you need a detox? Keep on quizzing Can you go for a walk outside without your smartphone, or spend a day without Facebook? We are here to help you achieve a balance with Orianna Fielding’s ‘The Essential Digital Detox Plan’. She provides step-by-step programmes and mindfulness techniques to help you get any addiction under control. We have three copies to give away this month. Send your name and address to enter this lucky dip. Head up your email ‘Digital Detox’ and send it to graham@pqaccountant.com.
You loved our giveaway last month so much we are giving you the chance to win another three Mensa Quiz books. Yes, you can test your knowledge against the highest IQs in the world. For example, in the ‘even more food’ section there’s a question that asks: “From which country does Chicken Tikka Masala originate?” We are sure you know the answer to that one! Send us your name and address to be entered for this great giveaway. Head up your email ‘Mensa Quiz’ and send it to graham@pqaccountant.com. And good luck to you!
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 12 October. The main draw will take place on Monday 15 October 2018.
TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM 30
PQ Magazine October 2018
MAKING LIFE SIMPLE
CREATING THE RIGHT ENVIRONMENT FOR YOU
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A jobs board just for you! We know how busy your lives are and want to give you easy access to the jobs market. With pqjobs.co.uk you will be able to match your CV with the job of your dreams. Isn’t it time to advance your career? Then pqjobs.co.uk will help you plan your next career move. Our site offers real jobs ‘right here, right now’, taking the stress out of finding your ideal position
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