PQ magazine, September 2022

Incorporating NQ magazine

September 2022

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

A chat with AAT’s CEO

SEPTEMBER ACCA EXAM TIPS INSIDE

TOO HOT TO SIT EXAMS IN JULY Is it time for the ICAEW to look seriously at switching its Advanced exams from July to earlier in the year? As temperatures in the UK soared, some students were asking if keeping the final level exams in this increasingly hot summer month is the best way forward.

Several PQs rightly pointed out that the July and November Advanced Level exams aren’t even six months apart, so moving them back into May would be far more logical – which would be better temperature-wise, too.

As another worried PQ said: “Global warming is not going away, it’s only going to get hotter.” Another asked if there will be air conditioning in all the exam buildings this July (there were in the big ones).

The call has come for the ICAEW to now survey all its stakeholders about moving the

CIMA has now officially launched its Class of ’22.

On offer is a 12-week free programme of learning support for any student at the Operational, Management or Strategic levels. It’s ideal for anyone studying for OT exams between September and

Advanced Level exams.

However, it appears that the ICAEW is already on the case. ICAEW Director of Education and Qualifications, Shaun Robertson, said that this

November.

The programme contains more than 60 hours of support material, and includes a study calendar, webcasts, tricky topic tutorials, a dedicated Facebook group, free exam resit offers (see Ts & Cs) and a certificate of completion – Class of ’22.

WHAT THE FRC DID NEXT

issue has been on the radar for some time. In fact, he is bringing it to Student Council on 19 August. It will also be discussed with leading employers and tutors. “We are planning to fully consult on this issue, – unfortunately the pressures on setting up remote exams and Covid blew us off course for a bit,” he said.

That consultation will include PQs. Robertson emphasised that the ICAEW runs exams around the world, in places like Cyprus and Dubai, which are much hotter than the UK. These places do seem to be able to cope better with the heat. He also confirmed all big centres in the UK have air conditioning.

Back in the UK the lack of trains, due to the heat, on day two of the Advanced Level exams also added to students’ stress. Travellers were advised to ‘only travel today if it is absolutely necessary’. When one PQ rang the ICAEW to asked if they could postpone, they were told this was not an option.

PQ magazine now understands that whatever the outcome of consultations the ICAEW may only consider changes to the 2024 schedule – but students don’t want it to wait that long. Many believe this should be a top priority, and the institute needs to act more quickly.

You need to register with the programme before the deadline of 31 August 2022 and then watch the recorded onboarding webcast by 9 September.

CIMA stressed that the programme is there to complement tuition, selfstudy or revision. It does not replace study of the technical knowledge (syllabus content) needed to pass CIMA exams.

The Class of ’22 follows on

from the hugely successful inaugural programme, the Class of ’21. Interestingly, the interactive programme runs for one week less, but there is more study material and support.

The Class of ’21 won PQ magazine’s Study Resource of the Year award in April this year.

Check out https://tinyurl. com/bdfxpxke

The Future of Tax – the Queen Mary University annual seminar

Queen Mary University has joined forces with PQ magazine to provide a free evening seminar on the future of tax.

As Benjamin Franklin famously said: “In this world nothing can be said to be certain, except death and taxes.” However, the world is changing and so is tax!

How will government tax us in the future?

What will the new priorities be? Do we need to pay more tax?

Digitalisation and blockchain will change the tax industry forever, and could even spell the end of tax evasion.

We are putting together a top panel of experts, who will provide their vision and help to get the debate started.

This event will start at 18.00 BST, but doors will open at 17.00 for networking. There will be a sandwiches, too!

Click here to book your FREE place Date and time Wed, 26 October 2022, 18.00-20.30 BST (networking from 17.00) Location Graduate Centre Lecturer Theatre, Queen Mary University of London Mile End Road, Bethnal Green London E1 4NS

IN THIS ISSUE

September 2022

A note from the Editor Well, this has been a strange summer! Too hot and too dry, but as always there is lots of PQ news out there. The ICAEW seem to have been caught out by the heat, and its Advanced Level students aren’t happy (page 1). It will be interesting to see if the Student Council can help to get things right.

We have ACCA September exam tips and explain all about CIMA’s Class of ’22.

I finally met new AAT CEO Sarah Beale (online) and it’s hard not catch some her excitement and enthusiasm for the association. She even offered us a desk at AAT’s new HQ, which we will take up! Check out the interview on page 18. We have lots on Q2022 in this issue.

PQ magazine has also joined forces with Queen Mary University to offer you the chance to get out and discover what experts think will be the ‘future of tax’. One panellist already signed up is Neil da Costa, who has taught thousands of PQs how to pass their tax exams. Go to Eventbrite to book your free place – go to https://tinyurl.com/2psjj4ey.

Hopefully I will see many of you on 26 October in Mile End. And just to prove tax is a ‘sexy’ subject we have TaxWatch’s Alex Dunnagan to explain all about corporation tax this month, too.

Graham Hambly, Editor and Publisher, PQ magazine

setting up a ‘kissing school’; and why the fines for audit cheats are just not big enough. Plus our social media round-up 17 AAT syllabus changes All the ramifications of the switch from AQ2016 to Q2022 18 Profile Meet Sarah Beale – she’s the new chief executive office at AAT 19 AAT Q2022 Cath Littler is excited about the new syllabus

23 Corporation tax Everything you always wanted to know about CT

p18

24 AAT level 3 Our AAT guru Teresa Clarke explains how to calculate the cost of an asset

38 CIMA spotlight Blueprints for exam success

26 CIPFA spotlight Why having a broad range of skills is vital in the fight against inflation

News 04 ICAEW exam woes Institute apologies over cramped exam conditions

09 ICAEW pass rates Three is the magic number when it comes to first-time passes, the latest exam results show

27 ACCA innovation The association’s Alan Hatfield explains how the new skills marks will work

05 KPMG audit shame Trainee spared a fine for role in Carillion audit scandal

10 New learning platform BPP unveils StaySharp, a learning aid for both ACCA and AAT studiers

28 The state we’re in GAAPweb’s new report gives an all-round state-of-the-profession overview

06 Regulator gets tough Financial Reporting Council hands out record amount of fines in 2020/21

12 Tech news Many companies not taking their digital security risks seriously enough; and how one local authority is preventing cyber fraud

29 Regulatory sanctions KPMG hit with record fine by FRC

08 ACCA pass rates What was hot and what was not when it came to the June exams?

Features, etc 14 Have your say It’s just too darn hot for the ICAEW exams;

p22

20 FRC position paper The regulator sets out the next steps in its reforms to UK audit

35 Careers CFOs are bracing for a UK recession; Hays’ Karen Young explains the value of being a ‘continuous learner’; and our book review 36 Fun The lighter side of life; and more great PQ giveaways The columnists Lisa Nelson Learning lessons from the Lionesses 4 Robert Bruce Why it’s time for more corporate vigilence

6

Prem Sikka Consumers’ misery is making the oil companies happy 8

31 A question for Tom This time top tutor Tom Clendon explains the difference between joint operations and joint ventures

Anna Kate Phelan Technology and the art of taking notes 10

33 ACCA exam tips Five pages of red-hot exam tips

Vikki Bean New ways of alleviating workplace stress 12

p24

p23

To subscribe for FREE go to www.pqmagazine.com Award-winning AAT courses and apprenticeships Flexible learning to suit your lifestyle mindful-education.co.uk/students PQ Magazine September 2022

3

PQ the

LISA NELSON

Lessons from the Lionesses

Four years ago, my colleague Zoe Robinson wrote an article in this very same column called ‘Lessons from the World Cup’ (unfortunately that didn’t end well for England). But as the 87,192 people who watched the game live at Wembley will attest, that all changed with the 2-1 victory over Germany by the Lionesses.

What followed was an outpouring of joy from the team, who although having believed they could win, dared not allow themselves to think it would really happen. In that moment they forgot how hard they worked, how many hours they practised and the self-doubt each had.

Their practice regime includes gym training, game analysis and field work, six days a week.

But don’t assume they just play football – they practice what needs to be improved by repeating the same exercise over and over. It’s physically and mentally demanding, and it’s not much fun.

What they are doing Anders Ericsson et al. (1993) called ‘deliberate practice’, a highly structured series of activities with the explicit goal of improving performance. This process is exactly the same for exam success. If you want to improve, you need to go back over the topic not understood, again and again, supported by feedback.

It will be mentally demanding and it’s not fun, but as Erikson’s research proved and England’s performance showed, it works.

ICAEW says sorry to Advance exam sitters ICAEW has apologised to Advance exam sitters who had to sit their exams in cramped conditions, with no space for their books (some exams are open book), and barely enough room to move their mouse.

The problems started when a PQ went to his exam centre in Jurys Inn in Hinckley, the night before the exam “to check the place out”, and discovered how the hall had been ‘prepared’.

He stressed: “There is no room in the desk to fit any of my numerous very large books, let alone a whiteboard to track time.”

His fellow students were

Before After

It’s come home!

Lisa Nelson is Dir ector of Learnin g at Kaplan

shocked, and others said they had sat in similar conditions in Birmingham, Liverpool (again Jurys Inn) and Cambridge.

The ICAEW’s Director of Education and Qualifications, Shaun Robertson, told PQ magazine he wanted to apologise to students faced with this set up on the first morning of their exams. He confirmed that the desks were wrongly configured at Hinkley, and candidates were sat too close together. He explained that chairs were brought in for their books and the set-up was changed overnight for the next day (see picture). “But that isn’t good enough,” said Robertson, and stressed that he will be discussing the issue with the supplier – to ensure it doesn’t happen again.

If you needed an excuse to be cheering on the England Lionesses in the Euro finals then you had to look no further than Leah Williamson. The Arsenal player, who started playing for England in 2018, is now England captain.

She’s a professional footballer, but is also training to be an accountant through the Football Association with First Intuition.

However, the 2-1 victory over Germany may mean it will be some time before she qualifies!

Deloitte’s Support Business Group’s Amy Clarke told CityAm that at the world’s top football clubs women make up just 11% of boards, and in some cases there are none at all. That compares to nearer 40% for UK FTSE 100 board positions.

She felt the time was now ripe for the sports industry and football clubs in particular to catch up.

In brief Pap The definition of true love What would you do if you couldn’t pass ATX? The pass rates are low for the final optional paper and PQ Emma Morgan was at the end of her tether after failing it so many times. Then in stepped her husband Tom, who decided to study the paper with her, so she would have someone to talk to about it. It seems to have done the trick and Emma is finally an ACCA member.

Tom says he's not sure he helped but feels he learnt some new things.

Now, that’s a true love story.

4

Pap AAT member reprimanded MAAT Zelalem Zenebe has been reprimanded by the Association following his conviction of common assault and battery at Thames Magistrates Court. He also failed to notify AAT of his criminal conviction within the 30 days of the date of the conviction, as is required under AAT’s written policy. The reprimand will remain live on Zenebe’s record for a period of 12 months, and he received a warning over his future conduct.

Pap What the FRC did next!

How will the FRC become the ARGA? Not surprisingly, it’s not going to be that simple! In a recent position paper, the FRC sets out how it will support the government’s reforms as it transitions into the Audit, Reporting & Governance Authority (ARGA).

FRC CEO Sir Jon Thompson said: “These long-awaited reforms are a once-in-ageneration opportunity to ensure corporate Britain upholds the

highest standards of governance and protects those stakeholders who rely on high-quality reporting.

“While we await Government legislation, the FRC is pressing ahead with those changes to standards and codes which will improve and enhance the UK’s audit and corporate governance framework and to lay the groundwork for the creation of ARGA.” Check out the position paper on page 20.

PQ Magazine September 2022

news PQ

MA for PM? PQ auditor spared big sanction Liz Truss (Mary Elizabeth Truss) could become the first management accountant to hold the post of UK Prime Minster.

A YouGov poll shows Truss has a 62% to 38% lead over Rishi Sunak in the race to become Conservative Party leader, with the winner being announced on 5 September after a vote by the party members.

A former Liberal Democrat, the Oxford graduate joined Shell in 1996 on their accountancy graduate scheme and qualified as a CIMA, before joining Cable & Wireless.

During her five years at Cable & Wireless she rose to economic director. She then became the full-time deputy director of Reform in January 2008.

Her father was a professor of pure maths at Leeds University and her mother was a nurse. Truss has described them as both “to the left of Labour”. She is married to fellow accountant Hugh O’Leary.

Truss, the former foreign secretary, has said she will treat households as ‘single tax entities’, and has outlined tax cuts of over £30 billion. She told the BBC that “reducing National Insurance and Corporation Tax increases the supply side of the economy”.

PQ Magazine September 2022

The former KPMG PQ who worked on the Carillion audit has escaped with just a severe reprimand over his ‘misconduct’. While Pratik Paw admitted creating false meeting minutes to mislead an Audit Quality Review inspection, he was not found to have acted dishonestly.

Paw was told he was looking

at a fine of £50,000 and a ban, which would have forced him to sell his house. Instead, the FRC independent tribunal issued no fine and just the reprimand to the 25 year old.

Paw’s lawyers had told the tribunal that Paw deeply regretted not questioning the orders of his superiors and had learnt a great deal from

his conduct at the time.

Meanwhile, the lead partner on Carillion, Peter Meehan, was hit with a £250,000 fine.

KPMG was also issued with a record fine of £14.4 million, reduced from £20 million because the Big 4 firm had co-operated. For more information go to page 28.

Sangster wins prestigious international award Professor Alan Sangster, chair in accounting history at the University of Aberdeen Business School, has won the 2022 Outstanding Accounting Educator Award of the American Accounting Association.

Sangster is the first Europeanbased winner of this 50-year-old prestigious international award.

He is currently the editor-inchief of Accounting Education and many accountancy students would have read one of his eight textbooks.

On hearing he had received

the award, he said: “It is a great honour to receive this, the highest award available to accounting academics from a jury of my peers, supported by past and present colleagues,

and past students from across the world. I am very grateful to the American Accounting Association and to the PwC Foundation for their generosity and support.”

5

PQ the

ROBERT BRUCE Why it’s time for corporate vigilence

You’ve probably noticed that there has been very little business policy debated in the scramble for leadership that the Conservative Party is indulging in. This is odd.

Business underlies all the issues that should be in the public eye at this time. The Johnson remark of: “F**k business” was merely one very minor reason why he was not taken seriously during the lengthy period of his fall from grace. But it summed much up. Encouraging investment in business, setting tax levels that held tax raising and tax spending in equilibrium, providing economic circumstances that would be useful to both corporates and the humble citizen. None of these figured much in the debate.

Still less the extraordinary lack of legislation to cover the delicate relationship between auditors and corporate entities. All this is down to demographics. The bulk of those voting, paid-up members of the Conservative party, are either retired folk or are in the darkening days just before retirement. They want to see their pension pots maintained. But they have stopped worrying about whether corporate governance is as sharp as it ought to be. They are, understandably you might say, not bothered about much of it. But we are moving into the period in the economic cycle, let alone rising inflation, when companies are exposed. It is then that the scandals come plainly into view. Relaxing now just means a heap of trouble ahead.

Robert Br uce is an aw ard-winnin g wri ter on accountan cy for The Times

FRC dishes out record £46.5 million in fines in one year The Financial Reporting Council’s 4th annual enforcement review reveals a record number of cases resolved in the last year and record financial sanctions of £46.5 million imposed.

KPMG was reprimanded four times and fined £10m before discounts for its co-operation. Grant Thornton was fined three times, PwC was penalised twice, with EY and Deloitte fined once each.

The increase in the total financial sanctions, up from £16.5m in 2020/21, reflects the seriousness and high number of cases concluded. It also reflects the FRC’s growing capability to take on the large and complex cases

that are an increasingly prominent feature of its work, supported by a 23% growth in the Enforcement Division’s headcount.

The report also reveals that the increased focus on non-financial sanctions has continued. Nonfinancial sanctions, which are carefully tailored to the facts of each case, are becoming increasingly sophisticated, with a focus on tackling the underlying

Those May CIMA case study pass rates

CIMA CASE STUDY PASS RATES

The May 2022 CIMA case study pass rates are out and they will make happy reading for many sitters! The Management case study pass rates soared, from

May 22

Feb 22

causes of failure in order to reduce the risk of recurrence.

The report emphasises the critical importance of detailed follow-up reporting so that the effectiveness of such sanctions can be closely monitored.

For the vast majority of concluded cases, a lack of audit evidence and a lack of professional scepticism featured – both of which go to the heart of robust audit.

Nov 21

Aug 21

May 21

Feb 21

Operational

62%

62%

52%

53%

46%

60%

Management

82%

73%

73%

68%

69%

71%

Strategic

62%

72%

67%

69%

68%

67%

a healthy 73% in February to a whopping 82% in May. Meanwhile, the Operational pass rates held steady at 62%.

The one worry will be the slip in the Strategic pass rates, down from 72% in February to just 62% in May.

New student president CIPFA has a new Student Network President. Lin Liu, who qualified at the end of last year, takes over from Sophie Darlington, who did a brilliant job in very difficult circumstances.

Liu started her accountancy journey as an apprentice at Newcastle City Council and now works for Cambridgeshire

County Council.

She wants the CIPFA Student Network to continue to support students so they can achieve exam success. That means listening to students’ voices, she stressed.

The network is run by students for students, and she said it was vital PQs speak up for themselves.

In brief Pap Q2022 AAT Level 2 The new AAT Q2022 at Level 2 will have four exams rather than the current five. This does not mean Level 2 has become easier, according to top tutor Karen Groves. In fact, she points out that the actual guided learning hours have increased slightly. Using Accounting Software will no longer be assessed, but you need to check how your tutor is ‘filling the gap’. Groves explains her company, e-Careers, is including a Sage Business Cloud course 6

immediately after the Introduction to Bookkeeping Unit. See more on page 17.

Pap RI in AAT exams Remote invigilated exams for Q2022 will not be offered by AAT until September 2023. You will have to go to an exam centre to sit these exams. AQ2016 remote invigilated exams will continued until September 2023.

Pap CIMA PER changes CIMA has reminded PQs

that its new PER application process is now in place. The changes follow a pilot in 2021 with over 500 students to trial the new way of doing things. This

has been hailed as a ‘resounding success’. PQs can now submit their PER application using the new format. For a short period the institute will accept applications under the old system from students who have been working towards these criteria. The old way of doing things will end later this year. See https://bit.ly/3Q8c7cj.

PQ Magazine September 2022

EXCEL IN ACCOUNTING WITH E - C A REERS

LEVEL 2

LEVEL 3

82.2%

68%

87.6%

WAS £575

NOW £495

WAS £575

PASS RATE

NATIONAL AVERAGE

LEVEL 2 & 3 WAS £1,125

NOW £845

PASS RATE

75%

NATIONAL AVERAGE

NOW £495

LEVEL 3 & 4 WAS £1,245

NOW £945

LEVEL 4 91.2%

85%

PASS RATE

WAS £695

NATIONAL AVERAGE

NOW £595

LEVEL 2, 3 & 4 WAS £1,795

NOW £1,395

Quote ‘PQEC’ to get these exclusive prices www.e-careers.com (accounting) Mon - Fri | 9am - 6pm Excellent

+44 (0) 20 3198 7600

PQ news PQ the

PREM SIKKA

While prices rocket, oil companies count their cash

The cost of producing oil and gas has not changed significantly, but the selling price has. Big five oil companies have reported profits of £50bn while domestic energy bills rocket. The French government has capped energy price rises at 4%, a policy shunned by the UK government. It has opted for a 25% windfall tax on selected oil/gas company profits, which is expected to raise £5bn in 2022/23. The tax is mainly on North Sea profits.

Companies profiteer by speculating on oil and gas prices.

BP employs around 3,000 traders to do so and that generates $2bn – $3bn profit a year, while Shell has notched up $4bn. This profit is not subject to windfall tax.

Between June 2021 and June 2022, the refiners’ profit margins on petrol and diesel increased by 366% and 648% respectively.

Windfall tax does not apply to profits from refining. Petrol retailers are quick to hike prices and slow to pass on falling costs.

Retail profiteering is not covered by windfall tax. With so many exclusions, the windfall tax for BP and Shell will be around 2% of Earnings Before Interest Tax Depreciation and Amortisation (EBITDA), hardly onerous.

The windfall tax is accompanied by new tax sweeteners which will reduce future taxable profits of oil/gas companies. With a deepening cost-of-living crisis, oil/ gas company profits are bound to come under greater scrutiny.

Prem Sikka is Em eritus Professor of Accountin g at the University of Essex

ACCA June pass rates The professional skills marks for ACCA Strategic optional level can’t come quickly enough for APM and AAA sitters.

The latest June exams show two out of three PQs sitting these options are still failing.

The Advanced Audit and Assurance paper has the dubious honour of again being the paper

with the lowest pass rate, at 31%. We have not seen such a low pass rate since December 2019, when it was 30%.

The Advanced Performance Management pass rate was 33% this time around.

However, on the good news side ATX rose to 42%.

The AA pass rate also slipped in June to below 40% again – to 39%.

Cheating is a worry One in six university students in the UK have admitted they have cheated while taking online exams in the past year, according to a poll by law group Alpha Academic Appeals.

The survey of 900 undergraduates found that around 16% of students broke the rules.

Of those students who admitted to cheating just 5% were caught by

their institutions.

Alpha found that more than half of students (52%) knew people who had cheated in online assessments.

Despite the end of Covid restrictions, most universities continued with online assessments this summer instead of traditional in-person exams.

Some 79% of students in the

In all, some 101,866 PQs entered the June sitting, with 122,756 papers. Of these some 3,877 students completed their final exams to become ACCA Affiliates.

ACCA revealed that invigilated exams continue to be popular, with some 15,474 sitters opting to take their exams this way.

ACCA JUNE 2022 RESULTS: BT 58%; FA 69%; MA 64%; LW 82%; TX 52%; FR 51%; PM 41%; FM 52%; AA 39%; SBL 50%; SBR 49%; AAA 31%; AFM 41%; APM 33%; ATX 42%

survey believed that it was easier to cheat in online exams than in exam halls.

The reported methods of cheating were mostly unsophisticated, showing the ease with which cheating occurs in remote assessments. Common methods included calling or messaging friends for help during the exam, using Google to search for answers on a separate device, or asking parents to read through answers prior to submission.

Marmite a cure for stress – really?

Love it or hate it, Marmite really could help you keep calm and help you fight stress. The only issue is how much of the stuff you might need to eat!

The latest scientific research says Marmite can help to reduce anxiety by interfering with the brain’s chemistry.

It’s the B6 vitamins, which help to give the spread its unique taste, that help rebalance the brain.

Trials by Reading University showed those who took a B6

supplement reported significant reductions in depression and anxiety.

Scientist have admitted that even if you lap up Marmite you will still need to take supplements. Lead author of the study, David Field, also said tuna, chick peas and many fruits and vegetables also contain B6.

Marmite lovers should know that it actually contains more B12 than B6. It also has high levels of niacin, which helps the digestive system, and thiamine, which helps boost brain health. We may all need to start loving it!

Taxwatch Pap Tax avoidance promoter fined £1 million A tax avoidance scheme promoter has been hit with a £1 million fine after a legal challenge by HMRC. Hyrax Resourcing Ltd was handed the almost-maximum allowed fine by the First Tier Tribunal for failing to disclose an avoidance scheme to HMRC as legally required.

Hyrax promoted a disguised remuneration scheme that involved routing money to an offshore trust in Jersey. The scheme was the 8

successor to the K2 avoidance scheme that made headlines in the early 2010s.

This ruling follows a previous HMRC tribunal win in 2019 where Hyrax was ordered to provide the details of the avoidance scheme they promoted and its users.

Pap Ecclestone charged with fraud Bernie Eccleston, the 91-year-old former F1 boss, has been accused of concealing millions of assets to avoid taxes. HMRC says he failed

to declare £400 million of overseas assets. The Crown Prosecution Service has authorised a charge of fraud by false representation. He is now due to appear before magistrates in Westminster on 22 August.

Eccleston resides in a £23 million chalet in Gstaad Switzerland, his estimated worth is £2.5 billion.

Pap Tax is a shoe-in The US firm which owns the Build-A-Bear Workshop has to pay a £600,000 tax bill after

judges ruled that a teddy’s boots are different from those of dolls!

The St Louis-based company lost a three-year battle with HMRC over customs duty on clothes, wigs and shoes worn by the bears that children ‘create’ in their shops. Under UK law items deemed dolls’ accessories have a nil duty rating; however, stuffed toys incur a 4% duty. Two tax tribunals have now upheld HMRC’s claim that clothes for stuffed bears are stuffed toy accessories.

PQ Magazine September 2022

news PQ

Those ICAEW Professional June results sat the June session, with 12,321 exams attempted and 4,801 sitters passing all the exams they took. Just over 1,000 PQs now move on to the

final level.

Two students bravely sat four papers. One failed all the papers they sat and the other passed just one of the four.

ICAEW PROFESSIONAL LEVEL 2022 RESULTS

Aberdeen student wins RSM accolade Robert Gordon University’s Arran Robertson has won the RSM prize as the top-performing student on the Financial Accounting Stage 2 BA (Hons) Accounting and Finance degree programme.

Arran achieved the highest overall score for both financial accounting modules and received a cheque for £500 from RSM’s Andrew Forsyth.

Forsyth, RSM’s office managing partner in Aberdeen, said: “We are delighted to continue our partnership with Robert Gordon University and support emerging young talent from a local institution, as they prepare to embark on their career in accounting.

“Arran has excelled in his recent financial accounting exams, and it was a pleasure to mark his achievement at our offices in Aberdeen. I am sure he will continue to thrive throughout his final year at university, before taking his first steps in the profession.”

2019

Three ICAEW professional level papers is still the optimal number to sit if you want to pass them all first time, according to the latest stats. Some 76% of those ACA PQs who sat three papers in June passed all three.

This compares with 66.7% of summer sitters who sat one paper and passed it.

In all, some 6,799 students

Audit and Assurance Business Planning: Banking Business Planning: Insurance Business Planning: Taxation Business Strategy and Technology Financial Accounting and Reporting (IFRS) Financial Accounting and Reporting (UK GAAP) Financial Management Tax Compliance

Pearson to move into NFTs Pearson’s CEO Andy Bird has revealed the textbook publisher plans to sell its digital textbooks as NFTs, which would allow it to track the ownership of a book even when it is sold on.

Talking after the release

of Person’s interim results, Bird said: “In the analogue world, a Pearson textbook was resold up to seven times, and we would only participate in the first sale.” He believes technology like blockchain and NFTs will allow it to

JUNE 77.6% 77.5% 82.9% 81.8% 90.2% 73.9% 81.8% 79.3% 77.6%

MARCH 76.4% 75.1% 91% 69.5% 33.3% 81.4% 79.2%

“participate in every sale of that item as it goes through its life”.

The plans are part of Pearson’s wider digitalisation of the business. It recently launched a subscription app Pearson+, which allows students to access to 1,500 titles for $14.99 a month.

Join our

Award Winning Centre!

Training Provider

AAT

LEVEL 2/3/4 ACCOUNTING APPRENTICESHIPS

Starting week commencing September 19th

NON REGULATED COMMUNITY LEARNING Accounting software, business administration and bookkeeping classes starting in September

of Excellence

where quality trainings & practical work placements take place PQ Magazine September 2022

F R E E AP P R E N T IC E S H IP S F O R 1 6- 1 8 A N D T R A IN E E S H IP S Y E A R O LD S Bookkeeping Business administration Payroll

0207 252 9331

admin@thetrainingplace.org 9

PQ news the

ANNA KATE PHELAN Make a note of it!

A study by researchers at UCL has found that technology enhances our ability to retain information rather than diminishing it. The research, published in the Journal of Experimental Psychology, indicated that digital devices such as smartphones and tablets allow people to store and remember vital information, freeing up mental capacity to recall less important information, and resulting in more information remembered overall.

There had been recent concerns that regular users of smartphones and tablets may suffer from what’s been classed as ‘digital dementia’ as people now rely more and more on calendars and to-do lists available to them anytime, anywhere.

However, humans have long relied on these memory signposts through external cues such as alarms and written notes and it would appear these reminders boost our memory capacity rather than weaken it.

Researchers took 158 volunteers aged between 18 and 71 and played a memory game on-screen. In some experiments they were allowed to use digital devices for notes, while in others they played by memory alone.

They found the use of digital devices increased retention of information when used, and even in subsequent experiments when the devices were not in use.

I don’t know about you, but I’ll be using this as an excuse to put everything in my calendar and (hopefully not) forget about it from now on!

Ann a Kat e Phelan is Senior Produ ct Manager at Eintech

New subscription platform for ACCA and AAT studiers A new learning platform designed and developed by BPP will allow learners to study accredited professional qualifications independently through a monthly subscription model.

StaySharp will also allow you to start, stop or pause your subscription at any time, allowing flexibility whenever you need to take a break.

StaySharp’s Jeremy Bodey said: “Our aim with the launch of StaySharp is to open up new opportunities and ways of gaining professional qualifications for those looking to upskill on their own terms. It provides the reassurance of using BPP learning materials and methodology, with the benefit of studying in a way that fits around your lifestyle.”

the next step on their career ladder.

Bodey said: “For anybody interested in discovering all that StaySharp has to offer without tying themselves into any financial commitment, we are also offering a free online 14-day trial to test out the platform ahead of signing up.”

Check it out at https://staysharp. global/

CIPFA’s top student PQ Amanda Atkins walked off with not one but two prizes at the recent CIPFA prizegiving ceremony. She was the topperforming student in the Public Finance & Strategic Case Study and the Strategic Public Finance paper.

Atkins said her key to success

was studying past papers and staying clued up with current issues. And she stressed you must stick to timings, get eight hours sleep, and use the biggest computer display as possible for the exam and study. Finally, make sure you have a glass of water with you at all times!

National recognition Bishop Fleming has been ranked 14th in the Top 100 Apprenticeship Employers list for 2022.

The accountancy firm recruited a record 64 apprentices in 2021 and is on track to appoint a further 60 to 70 this autumn, taking the

Big 4 ‘doing better’ at audit The Financial Reporting Council has released its annual audit scores and the Big 4 are doing a lot better (apart from EY).

The worry is that while the Big 4 are improving their audit scores they are doing so because they have ‘let go’ some of the riskier clients, that in turn have been picked up by the challenger firms.

The FRC latest annual scores found that 75% of the audits it checked were up to standard, a jump of 4% on last year.

Among the Big 4 KPMG (84%), PwC (83%) and Deloitte (82%) all scored more 10

He explained that traditional learning providers require upfront payments that can roll into the thousands, but with StaySharp there are no financial tie-ins of upfront costs associated with the platform, just a simple monthly subscription payment that gives members instant and full access to all the resources they need to reach

total number of apprentices who have embarked on the programme to over 170 since it was started three years ago.

Having posted record fee growth of 19% in 2021-2022, Bishop Fleming expects its overall

than 80%. Considering KPMG only achieved 59% in 2021’s checks this is huge improvement, and the FRC said it was “encouraged by the progress made”.

In stark contrast EY scored 65%, which means 35% of its audits require improvements. Worryingly, the FRC said it could not find any systemic reason for the drop in performance; however, EY said training up younger staff “has been an operationally challenging aspect of remote working”.

FRC CEO Sir Jon Thompson said he

headcount to grow to 500 this year.

Bishop Fleming’s scheme includes a rotation-based programme, enabling some apprentices to experience all areas of the business while others develop a deeper specialism in one area, supplemented with coaching, mentoring and study leave.

was encouraged to see the improvement in audit quality at the largest firms, but felt that there was still a lot of room for improvement.

There was one firm that achieved an audit score of 100% and that was Grant Thornton – the FRC looked at five of its audits. Meanwhile, BDO scored 58% and Mazars 50%. The regulator felt that these firms have perhaps grown too quickly and some of the audits were much higher risk than they had been used to. FRC has promised to help these firms to improve their skills sets.

PQ Magazine September 2022

London : Birmingham : Manchester : Online

info@fctraining.org 0203 7908674

Learn Sage, Quickbooks, Xero, Payroll, Advanced Excel & More Award Winning - Practical Accounting Training under Supervision of Chartered Accountant Firm High Quality CPD Approved Training Bookkeeping & VAT Return Training Course

Bookkeeping and Payroll Training Course

Accounts Assistant Training Course

Train To Be

Train To Be

Train To Be

Sales/Purchase Ledger Clerk Accounts Payable/Receivable Bookkeeper With Average Salary of 18K to 22K Now Available Online

Sales/Purchase Ledger Clerk Payroll Administrator VAT Manager With Average Salary of 23K to 24K Now Available Online

Finance Manager Finance Assistant Bookkeeper With Average Salary of 26K to 28K Now Available Online

Management Accounting Training Course

Final Accounts Training Course

Customised Accountancy Training Course

Train To Be

Train To Be

Train To Be

Cost Accountant Finance Controller Finance Assistant With Average Salary of 32K to 35K Now Available Online

Finance Manager Assistant Accountant Accountant With Average Salary of 38K to 45K Now Available Online

Finance Controlling Finance Management Bookkeeper With Average Salary of 18K to 38K+ Now Available Online

Prepare Yourself For a GREAT Accounting Career Bridge The Experience gap between AAT Theory & Practice Now That’s an Education For your Successful Accounting Job!

AAT Qualiications

With Integrated Practical Accountancy Training AAT Level 2

Foundation Certiicate in Accounting

AAT Level 3

Advanced Diploma in Accounting

AAT Level 4

Professional Diploma in Accounting

PQ tech the news

Dealing with digital security risk

VIKKI BEAN Technology

can help alleviate workplace stress

Managing a workforce in the current economic environment is taking its toll on small business employers, according to the findings of Xero’s ‘Changing world of work’ report. Nearly half (49%) of SME employers say running a business is having a negative impact on their mental health. Managing staff in the current regulatory environment is stressful and confusing for 56% of respondents. To address future regulatory changes, such as the recent changes to increase the national insurance threshold in July 2022, a third (33%) of employers are planning to introduce technology over the next 12 months.

More than half of employers report that software is helping with various aspects of workforce management, including eliminating manual paperwork (47%), speeding up processes (44%) and making processes more efficient (43%).

A quarter also said that software reduces their stress levels.

When it comes to completing admin processes and tasks at work, slow and outdated technology (21%) is the numberone cause of frustration among employees. This may be due in part to not feeling empowered in the workplace, with only 29% of employees able to submit and manage their own leave requests.

Technology can help with that dynamic, creating a more empowering place for employees and less stress for employers.

It’s a win-win situation.

Vikki Bean is Dir ector of Global Edu cati on and Delivery at Xero

Company reporting on digital security risk is currently not meeting investor needs, is often ‘bolierplated’ and overly static, according to a new Financial Reporting Council Lab Report.

The report highlights the many factors driving a greater focus on digital security risk disclosures.

These include: • Recent high-profile cyber and data incidents that show the potential operational and financial impact on companies.

• Government proposals to add digital security risk into companies’ assessments and resilience disclosures.

• The accelerated pace of digital transformation and its impact on future business success and resilience.

• Evolving stakeholder demands around digital and data security which make these relevant to the wider ESG debate.

• Intensified geopolitical tensions, which feed directly into digital risk and impact the digital supply chain.

The report then sets out how corporate reporting teams and audit committees can enhance

disclosures and better meet the needs of investors: • Explain how digital security and strategy are important to the company’s current and future business model, strategy and environment.

• Detail the governance structures, culture and processes the company has in place to support digital security and strategy.

• Identify digital security and strategy risks and opportunities the company is facing both now and in the future.

• Highlight the impact of internal and external events and the actions and activities that respond to these.

Check out the summary at https://tinyurl.com/2p869xy2

Nottinghamshire thwarts increase in cyber fraud Two attempted cyber frauds of over £500,000 were prevented by Nottingham County Council during the year, as cybercrime incidents rocketed.

Its Annual Fraud Report 2021-22 reveals that the council stopped two bank mandate frauds, after emails requested a change

to payment details. Improved controls, which now monitor and help to verify bank account amendments, meant staff could prevent the fraud.

In all, the report said £670,000 of fraudulent payment (some 45 cases) were stopped. That is a 73% increase on the previous

year, when £387,000 of payments were prevented.

The report also says there were numerous daily attempts on the council’s cyber security Nottingham is not resting on its laurels and plans a review of all external and internal controls in 2022-23.

Courts to award damages in crypto assets UK courts are being given the power to award damages in Bitcoin under plans to bring the legal system into the crypto era.

The Law Commission has said a new category of property needs to be created to cover digital currencies and non-fungible tokens (NFTs). It explained: “Their unique qualities mean that many digital assets do not fit easily into current private

property law categories or definitions.”

The new legal property called ‘data objects’ would allow judges to award damages in these tokens. That would see plaintiffs winning Bitcoin damages.

The changes would help company law move closer to how HMRC and the police treat crypto holdings. There is an HMRC Crypto assets Manual, which

Pap Unbreakable codes Scientist believe they can create unbreakable codes by using quantum cryptography that ‘harness the laws of physics’. University of Oxford’s David Nadlinger says the system exploits the phenomenon that Albert Einstein described as “spooky action at a distance”.

Basically, the code separates particles that become alike, behaving in the same way despite existing in different places. These become the ‘secret keys’ that cannot be viewed by third parties without

being altered, and any break-in is easily detected.

Currently, information is protected by encryption based on the mathematics of prime number. The worry is quantum computers will be able to break these within minutes.

says buying and selling crypto assets can create a capital gains tax liability.

Tech briefs Pap Historical first for Meta Meta, Mark Zuckerberg’s social media empire, has suffered the first drop in revenues in its history. It announced that revenues fell to $28.8bn in the three months ending in June, down from $29bn in the previous year. Despite the fact that user numbers are slightly up, the drop brings to a close 18 years of growth. An advertising slump means Meta will cut back on hiring and will cut spending plans as problems are expected to continue into the second half of 2022.

12

Pap Flying taxi tests in two years Trials of flying taxis are due to begin in the UK in two years’ time.

The zero-emission taxis will run from Heathrow and Bristol airports.

Initially they are being seen as a replacement for small helicopters,

as the taxis have lower carbon and noise footprints, lower operating costs and lower fares for the travelling public.

The winning consortium will get £9.5 million from the UK government’s Future Flight Challenge.

There are currently two start-up companies vying to win the business – Vertical Aerospace is building protypes of a VX4 four-passenger flying taxi, and Skyports is developing vertiport stations capable of recharging the vehicles.

PQ Magazine September 2022

Deliver your learning content and assessments remotely Remote Proctoring Mobile Device Friendly Automarking Real-time Results

Click here to find out more on getrogo.com

Developed by

Too darn hot!

The UK has seen record-breaking summer temperatures again, so why does the ICAEW persist in making advanced level students sit their exams at this time? It’s too darn hot.

We think it is unfair, but no one seems to listen to our needs and wishes, so we are asking PQ magazine for help! Professional level exams are held four times a year in cooler months, but the final exams are held twice a year in November and then in July.

Curiously, that is not even six months apart – if ICAEW kept the November exams where they are then the summer exams would be May (when it’s cooler).

I understand students are calling for the ICAEW to conduct an independent student survey.

I can tell them that the answer will come back loud and clear to move the exams to May. My

concern is that the timetable suits the ICAEW and they will claim employers don’t want change, but that’s not fair.

The ICAEW has to look seriously at this question. It must put students’ welfare at the top of its list.

Name and email address supplied The Editor says: We have talked to the ICAEW about this and they have promised they are on the case. We were a little concerned, however, when we heard that any changes can’t happen until 2024. That seems like a long time away. We will try to keep the pressure on and know the Student Council will make its voice heard.

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

Kissing school Can I ask why you squirreled away the story about accountants being the best kissers on page 10 of the latest issue (PQ magazine, August 2022)? I am a little concerned personally because as well as being an accountant I am also a civil servant. That means I am both top and bottom of the list. However, in truth I have been told my kissing is pretty good. OK, it doesn’t happen often because I am married to an accountant and she is a great kisser.

But it is great to see us top of a list that really matters. Perhaps we should set up a kissing school to show everyone how it is done!

Name and email address supplied The Editor says: I will take your word for it. A kissing school sounds like a great idea!

Fine not big enough What is wrong with auditors?

Are they trying to drag the whole profession into the dirt? I could not believe your story about the huge fine for EY for staff cheating on their ethics exam (PQ magazine, August 2022, page 8).

You couldn’t make it up. And for them to then deny they knew anything about it when they did, is

just unbelievable. As the SEC man said it is “simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams”.

I don’t think the $100 million fine was enough. None of those EY staff

should be allowed near any audits until they have been re-educated.

If they think it was OK to do that what else do they think is OK to do?

No wonder auditors have such a bad rap.

Name and email address supplied

Accountant, keynote speaker and author Carl Reader, he of ‘Boss It’ fame, was at a roundtable hosted

by Lord Blunkett recently, when during the conversation it cropped up about the protection of the word ‘accountant’. It was apparent that the majority of the room (nonaccountants) were not aware that someone could just set up as an accountant today, with no training, and no regulator. He wondered on LinkedIn if it was something that surprised his fellow accountants, too.

He said: “Apparently c. 35% of accountants are ‘unregulated’ (i.e. not a member of a Chartered Institute etc). But as Eriona Bajrakurtaj mentioned, this is probably understated as the very worst file fictional figures as if they were the business owner.”

Carl went on: “This is now a bee in my bonnet, as I feel business owners should at the very least expect credibility and some form of assurance that things are done properly.”

We don’t think Carl is going to let this one drop!

We also realised we haven’t provided you with any pictures of cats studying for their accountancy exams recently, so here’s a new one that really

doesn’t want their owner anywhere near their PM notes…

Have you heard of ‘the capsule wardrobe’? Well, on LinkedIn Richard Roy Mendonce revealed for the last 550 days he has been wearing a white shirt and black trousers to work every single day!

We were intrigued, but not enough to try it out. More on this in next month’s issue.

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

Published by PQ Publishing Ltd © PQ Publishing 2022

INVEST IN YOUR FUTURE WITH LSBU BUSINESS SCHOOL Jumpstart your career journey – study Accounting and Finance at LSBU Business School.

Our Croydon campus offers state-of-the-art teaching spaces fit for the future of learning.

Stand out in the job market You will become a partqualified accountant with exemptions from the leading chartered accountancy membership bodies.

We are ranked 1st among London moderns for Graduate Prospects (Complete University Guide 2021)

Find out more at www.lsbu.ac.uk/croydon or search ‘LSBU Croydon’

www.lsbu.ac.uk/croydon

AAT Distance Learning

Q2022 Courses are here!

Get Started Today

We are pleased to announce that our brand-new AAT Accounting and Bookkeeping Q2022 courses are available!

Students can register with the AAT, and sit assessments on the new standards from September.

You can start Premier Training’s AAT distance learning courses on any day and fit your studies around your job and other commitments.

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

Start your studies the same day 24 hour online access with instant access to tutor support.

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

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

Xero Advisor Certification 01469 515444

info@premiertraining.co.uk

Premier Training has teamed up with Xero and is pleased to offer the Xero Advisor Certification Equivalency Course FREE OF CHARGE to anyone who enrols.

PQ AAT new syllabus PQ

AAT AQ2016 to Q2022 – the new Level 2 explained Karen Groves explains some of the differences between AQ2016 and Q2022 for new Level 2 AAT students starting their studies in September

A

AT will launch Q2022 on the 1 September 2022 and from this point, any students registering will be starting the new qualifications.

So how will the new Q2022 affect you as a student?

The first difference is that you will pay AAT a one-off fee for each level, which covers you for the duration of the qualification (three to five years on average). For the Level 2 Certificate in Accounting the cost will be £172, which is paid as a one-off payment (there are no instalment options for Q2022). This enables you to have full access to the AAT Lifelong Learning portal, which includes lots of revision activities; for example, practice assessments, green light tests, e-learning and much more. You must have registered with AAT to be able to enter for the exams.

Now for the assessment changes AQ2016 Bookkeeping Transactions – now Q2022 Introduction to Bookkeeping The new unit is very similar to the old unit, in that the underpinning manual double-entry bookkeeping processes are assessed, including business documents, coding, customer and supplier invoices, credit notes, receipts and payments, discounts, cash book, petty cash book, general receipts and payments and balancing the general ledger accounts. The main change is digital accounting systems are now included, so you will understand that entering transactions in a digital bookkeeping system is following the same process as entering the transactions manually. AAT will not be assessing using an accounting software, it is underpinning knowledge only.

AQ2016 Bookkeeping Controls – now Q2022 Principles of Bookkeeping Controls Again, the unit is very similar to the old unit, building on from the first unit, with more focus on understanding a digital bookkeeping system. How your training provider will embed this into your studies will vary, as AAT are no longer assessing the actual use of an accounting software. Topics include producing and reconciling control accounts, bank reconciliations, journals, errors and the suspense accounts and the trial balance.

AQ2016 Elements of Costing – now Q2022 Principles of Costing The new unit includes basic Excel (formatting, and basic formulas); however, the high low method is no longer assessed. You will understand the cost recording systems within an organisation, including inventory valuation PQ Magazine September 2022

and overhead absorption methods, labour payments and calculations, cost behaviour, actual and budgeted costs and income and identifying variances.

AQ2016 Using Accounting Software – no longer assessed As mentioned above, AAT is no longer assessing students on an accounting software package. Each training provider will approach how they cover this in different ways. For e-Careers, we will be including a Sage Business Cloud course immediately after the Introduction to Bookkeeping unit, to ensure our students have not only the skills required to pass their exams, but also the skills that are required within the workplace.

AQ2016 Synoptic – replaced with Q2022 The Business Environment The new unit will include principles of contract law and understanding the external business environment. The old synoptic content, including different types of business entity, the finance function, communicating effectively and the importance of information to businesses, is still being assessed.

So, for new Q2022 students you will now

have four exams rather than the current five exams. This does not mean Level 2 has become easier as some students are expecting, the actual guided learning hours have increased slightly.

Transferring from AQ2016 to Q2022 Existing AQ2016 students can transfer to Q2022. However, the advice we are giving to students is to complete the level in full, as you have until September 2023 to take the exams, and then transfer for the next level. The first three units mentioned above are direct transfers if already completed; however, you will need to take the Business Environment exam.

On a final note, remote invigilation exams for Q2022 will not be offered by AAT until September 2023 onwards, so all exams will need to be taken at an exam centre. You can find your nearest exam centre by doing a search on the AAT website. AQ2016 remote invigilation exams will continue to run until September 2023.

If you have any questions, my advice would be to speak to the AAT directly, or your training provider, as they will be able to help.

• Karen Groves is an AAT tutor and Faculty Director – Accounting, at e-Careers 17

PQ profile

Meet Sarah Beale, AAT’s CEO Sarah Beale became the AAT Chief Executive on 1 November 2021, but was hoping to hold onto her ‘new girl’ status for a little longer when PQ magazine spoke to her

S

o, how did Sarah Beale become AAT CEO? Fortune played a role, although she said that she has always enjoyed working with numbers. We discovered early on that a real inspiration were her parents, who ran the local pet shop. It meant she got involved early in business, and often inherited the ‘broken’ animals no one wanted!

Although reasonably academic at school, Sarah knew she didn’t want to be in full-time education, even though she had a university place. That was a shock for her parents, who had seen their two oldest children become the first generation to go to university.

Sarah just felt that university wasn’t for her.

She had already run her own dance business.

She had qualified as a dance teacher at 16, and after working for someone else set up her own business shortly afterwards.

Joining the local practice Then she saw an advert for a local accountancy practice advertising a job for a trainee, and she popped in to ask what it was all about. They were obviously impressed and asked her back for an interview and her accountancy journey had begun.

Although it wasn’t an apprenticeship as such, that is in effect what she got. She has nothing but praise for her first bosses. “I worked for two local practices and the support they gave me was mega. They really understood the importance of supporting and investing in their employees,” she said.

She started her AAT qualification too, and studied the final level at Carlisle College.

Sarah admits AAT was much tougher than she expected. She thought that ‘A’ levels would be a slightly higher level than AAT, but she quickly had to change that view. However, she loved the fact that AAT tested practical skills; and she is more about ‘doing’ rather than pure theory testing. With her job it meant she got the connection the AAT qualification has with the real world. She even had to admit she quite enjoyed the studying.

Going for ACCA With the AAT qualification under her belt, Sarah decided to continue her studying with the ACCA. The ACCA had a tax optional paper and she

admits she really liked tax as a subject (someone has to). She then moved into the manufacturing sector, where her new employer didn’t give her as much support initially – it meant she had to study in her own time and she just bought the books and turned up to the exam hall when she was ready. Then she failed Financial Reporting (2.5) like many before her, but was able to convince her employers to pay for a revision course. It changed everything and showed her employers the value of giving their trainees real support, and from there Sarah was able to attend training courses.

Sarah admits she used to do her homework at the ‘last minute’, but that had to stop with ACCA. She had long commutes to work so needed to allocate specific times for study. Sarah said: “It means you have to be really disciplined and, yes, avoid the temptation that bathroom cleaning suddenly became attractive!”

Some time after qualification she joined the CITB (Construction Industry Training Board) as finance manager. It was there she worked her way up to CEO. She explained it was a tough gig and after delivering a huge transformation

Sarah Beale in brief What book are you reading: Burning Girls, who doesn’t love a horror novel?

Last good film you watched: Dune If you could travel in time, where would you go: Not forward, as I wouldn’t want to spoil anything, so the 1960s Favourite tipple: Gin & tonic Who is your hero: My Dad – if the world was made up of people like him we would live in a fabulous world Last meal: Seafood platter, steak and roasted vegetables, and I don’t do puddings – but happy to watch everyone eat with a glass of red wine in hand!

18

project she planned a career break. “I was going to take some time out from such a demanding job and do some travelling,” she admits.

AAT comes calling Then about 10 people rang her about the AAT job, which all thought she would be ideal for. It transpires that AAT thought so, too.

Sarah joined AAT at the very tail end of the pandemic, and she said a key part of her role has been to pick up the Association after it had gone through a restructure and was a planning a big HQ relocation to London’s Canary Wharf.

She has tried to inject some new belief and excitement into AAT. She believes it is an authentic organisation that offers fantastic careers and so many other opportunities.

Its members and students provide UK plc with people who give value and productivity right from the start. Its licenced members, for instance, support over 500,000 SME businesses.

We finally asked Sarah about her next eight months and she revealed that, along with Council, she is putting together a brand-new strategic plan, to be launched in 2023.This will outline what AAT needs to offer by 2030.

She explained that AAT is the largest awarding body at that level, in the sector, has a great membership offer, but hasn’t necessarily put everything together to show the full value it brings . “We need to play a bigger role in attracting the next generation and career changers. There is a huge talent war and we need to show what our profession offers and the difference it makes; AAT’s has a pivotal role in that.”

She is excited about the future, and rightly so.

PQ Magazine September 2022

PQ AAT Qualifications 2022 PQ

It's a challenging but exciting road ahead Cath Littler is an AAT guru who really knows her stuff. She believes the new qualification is both challenging and exciting!

I

’ve been sitting at the bottom of my garden in the shade of our lovely ash tree, looking at the scorched grass and watching the fledgling robins as they try to figure out what to do now that their parents have stopped feeding them. I’ve reflected that it’s a bit of a tough year for them because of the heat, but we’ve put out food and water so that helps.

The first year of the new qualification will also be challenging, but ultimately exciting for students. Exciting because they are getting the most up-to-date version of the qualification which will help with their careers, and challenging because the year is always a bit of a learning curve for tutors.

Ready to support you and your tutors I have been living Q2022 since the very first Subject Matter Expert meeting at AAT HQ in October 2019, when the qualification was due to be launched in 2021. Those initial scoping meetings followed a lot of research by AAT amongst training providers and, importantly, employers, to see what should be included in the new qualification. The meetings outlined the framework of the qualifications, thinking about themes such as ethics, technology, and business awareness.

A lot has moved on since then and, as I won’t participate in exam writing (principally for conflict-of-interest reasons), I was only involved for a few months. However, since then I have been overseeing the writing of PQ Magazine September 2022

learning materials for all three levels and some definite themes have come through, apart from the addition of technology and business awareness.

As part of Q2022, AAT is launching a new exam platform and there are some new examiners. This means that the types of questions asked in the exams will be a bit different to previous versions of the qualification.

For example, bank reconciliation questions are laid out differently to in the past. The theory hasn’t changed, it’s just presented differently.

So, we all need to be a bit more flexible in our thinking.

Generally, there seems to be more theoretical questions in the assessments, which is appropriate as accounting software carries the weight of bookkeeping for us and allows us to focus on ensuring that everything is done correctly, rather than simply churning out numbers. For example, in Tax Processes for Businesses, students are asked to check VAT returns rather than complete them. We still need to teach students to complete VAT returns in order to be able to check them, but the exam emphasis has changed.

Communication is also becoming more important at all levels, which fits with the discussions that I have with apprentices; they comment that when they chose accountancy, they did not realise how much they would have to communicate with clients. Communication is key to success as a professional accountant.

Prepared for your success So, this year will be a bit of a challenge for students and tutors, but it will be exciting as tutors will have the support of the extensive new learning materials to help students succeed through the launch of qualifications 2022..

Cath Litter, Head of Learning (accounting) at Mindful Education Cath has a wealth of experience, having coordinated the AAT’s largest FE training provider and as a published author. A former member of the AAT’s Learning and Development Board, she has a track record of improving exam pass rates by 50% – by reviewing teaching methods and delivery order.

In her current role as a Trainer and Consultant for the AAT, Cath is involved in a wide range of AAT projects including External Quality Assurance and End Point Assessing.

Cath also leads Mindful Education’s accounting team, and ensures the highest standards across their accounting offering.

Mindful Education creates award-winning online courses and apprenticeships which set a new standard in the digital delivery of education. If you are interested in studying an AAT qualification using the Mindful Education Online and On Campus blended learning approach then please visit the Mindful Education website to find your nearest provider.

19

PQ FRC position paper

What the FRC did next!

The Financial Reporting Council has set out its ‘next steps’ to reforming the UK’s audit and corporate governance framework. It is all in the position paper…

H

ow will the FRC become the ARGA? Not surprisingly, it’s not going to be that simple! In a recent position paper, the FRC sets out how it will support the government’s reforms as it transitions into the Audit, Reporting & Governance Authority (ARGA).

FRC CEO Sir Jon Thompson (right) said: “These long-awaited reforms are a once-ina-generation opportunity to ensure corporate Britain upholds the highest standards of governance and protects those stakeholders who rely on high-quality reporting.

“While we await Government legislation, the FRC is pressing ahead with those changes to standards and codes which will improve and enhance the UK’s audit and corporate governance framework and lay the groundwork for the creation of ARGA.” The government intends to give ARGA statutory funding, so it can operate on a sustainable and independent basis. ARGA will be empowered to make rules requiring market participants to pay a levy to meet the costs of carrying out its regulatory functions.

Implementing a new statutory funding model is, says the FRC, a complex exercise, and it therefore intends to invite views this Summer on the high-level principles on which ARGA’s funding model should be based.

Corporate governance and stewardship The FRC said the focus of revisions to the code will be as follows: • Providing additional support in the existing Code Provisions, where reporting is currently weaker, taking account of issues raised in recent research and reports.

These areas are outlined in the most recent annual report on the use of the Code and Culture report.

• Revising those parts of the Code which deal with the need for a framework of prudent and effective controls to provide a stronger basis for reporting on and evidencing the effectiveness of internal control around the year end reporting process.

• Making necessary revisions to reflect the wider responsibilities of the Board and Audit Committee for expanded Sustainability and ESG reporting and, where commissioned by the company, appropriate assurance in accordance with a company’s audit and assurance policy.

• Including a Provision for boards to consider how audit tendering undertaken by the company takes account of the need to expand market diversity.

• Updating the Code to ensure that it covers proposed changes to legal and regulatory requirements as set out in the Government Response, including strengthening reporting on malus and clawback arrangements.

20

FRC stressed that in response to the recommendation made by the Competition and Markets Authority (CMA), it will develop for use initially on a voluntary basis a set of Minimum Standards for Audit Committees, setting out expectations on how Audit Committees should work to address the issues raised by the CMA in its report.

The council propose to hold round tables with stakeholders in the second half of 2022 to develop these standards, so they are available to Committees for 2023 financial year ends. Where possible these standards will consolidate multiple pieces of existing guidance and provide a single source of information. These standards will also address how Audit Committees can support greater market resilience and diversity when tendering for audit services ahead of legislation.

Supervision against the standards will commence in c. 2024, subject to legislation.

The intention is that the revised Code will apply to periods commencing on or after 1 January 2024 to allow for sufficient

implementation time. That will mean the FRC will consult on a revised Code and supporting material from Q1 of 2023.

Corporate Reporting The changes proposed in the government response will require either primary or secondary legislation.

However, FRC will work in support of the reforms by developing a number of pieces of guidance referred to. These will provide implementation guidance for: • The Resilience Statement.

• Fraud Reporting by Directors.

• The Audit and Assurance Policy and related disclosure requirements.

• Capital Maintenance and Dividends, including distributable profits – to succeed the existing ICAEW/ICAS guidance.

FRC will also revise guidance on the Strategic Report, in recognition of the significant changes and the expansion in proposed reporting to ensure that the Strategic Report is a source of decision-ready PQ Magazine September 2022

PQ FRC position paper PQ information. To minimise the need to revisit guidance, it will delay the completion of this work until the Government has set out its policy in respect of the use of International Sustainability Disclosure Standards in the UK, so that this can also take account of reporting changes that will be driven by their implementation. It said: “In finalising the timing for this work, we will be informed by our stakeholder engagement and market needs.”

If FRC find that there are issues that need more urgent attention, it promises it will seek to address this.

Audit The position paper said that audit has been the subject of significant regulatory activity and intense political and public scrutiny in recent years. It felt that the fundamentals of what an audit is will remain unchanged, as the Government has chosen not to expand the scope of an audit.

However, FRC said it will consult on changes to address some of the policy points in the Government Response through revisions to standards, including revisions to its Ethical Standard to reflect stakeholder feedback, evidence gathered through the inspection programme and enforcement work.

There are also significant changes to ethical requirements driven by changes to the International Code of Ethics, not least a revised global public interest entity definition, which includes market traded entities. FRC has already taken forward a project to develop a Professional Judgement Framework, which it published on 23 June 2022 (see PQ magazine, August). This will help with the application of professional judgement in the context of an audit, which was recommended in the Brydon Report.

FRC’s supervision division will continue to build on its engagement and outreach with Audit Committees, seeking improvement in audit quality outcomes and it will continue to work on non-legislative developments in our Audit Quality Review team, with a view to providing a more effective and efficient AQR process. Supervision will also implement the new PIE auditor registration process and undertake a project on improving auditor education.

Significant changes to the Ethical Standard will include: • Revisions to take account of the new proposed framework that contains three levels of public interest entities: historical; new proposed UK public interest entities; and new public interest entities caught as

PQ Magazine September 2022

These are a once-in-ageneration opportunity a result to the changes to the international definition.

• Changes to address those situations where the role of Those Charged with Governance is discharged by the Board, in the absence of an Audit Committee.

• A consultation on whether it is desirable to exclude sustainability assurance work carried out in accordance with a performance standard adopted by the FRC from the UK aspect of the non-audit services fees cap.

• Revisions driven by international changes to the fees and non-audit services sections of the Code of Ethics.

• Consulting on whether to maintain the ‘Other Entity of Public Interest’ definition.

• Revisions to simplify and clarify provisions incorporated as a result of European Law in 2016.

• Necessary revisions to address issues identified as a result of Supervision and Enforcement work.

• Any changes necessary to address the expansion of audit-related assurance work driven by sustainability and ESG, and the proposals around an audit and assurance policy.

FRC stressed that significant thought has been given in the Government Response to the use-ability and informativeness of the audit process to stakeholders. Addressing these issues will require consultations on a number of existing ISAs (UK). However, in doing so, its approach will be to minimise divergence between the UK and international standards.

The scope of those revisions will mainly focus on: • Revisions to Auditor Reporting Standards – ISAs (UK) 700, 701 and 720.

• Revisions to Auditor Communication Standards – ISAs (UK) 260 and 265.

• Revisions to Auditing Standards covering Law and Regulation and Reporting to Regulators, to include Brydon’s recommendations on a ‘duty to report’ – ISAs (UK) 250 Sections A and B. • Conforming amendments to other ISAs (UK).

• Necessary updates to Bulletins and Practice Notes in support of revised standards, and to provide illustrative reports.

The FRC said it views a high-quality, wellrespected audit profession which attracts and retains the brightest and best candidates as an essential ingredient for a functioning audit system and improved audit quality.

The Government Response noted that “the Government expects the existing professional bodies to make substantial improvements to audit qualification, training and skills” over the next five years. This work is not dependent on legislation, and a project led by the Professional Oversight Team will engage with the professional bodies on their plans for these improvements. It expects this will involve consultation in late 2022/early 2023 and implementation across 2023 to 2024.

Local audit systems leader The government has said that the ARGA will be the systems leader for local authority financial reporting and audit. It said that the financial reporting landscape is complex, and the timeliness of reporting is poor, and the audit market is far from resilient.

FRC has recruited a director to lead this work, and the priorities are currently: • Carrying out stakeholder outreach to determine priorities and early action areas for the systems leader.

• Working with colleagues in the Department for Levelling Up, Housing and Communities (DLUHC) and the National Audit Office to facilitate the transfer of the Code of Audit Practice, when legislation allows.

• Working with the DLUHC, HM Treasury and CIPFA LASAAC to determine whether the current complex financial reporting framework for local authorities can be simplified, while still meeting HM Treasury’s reporting requirements in support of the Whole of Government Accounts.

• Building on the success of Practice Note 10 for the Central Government Sector, by consulting on proposals for a specific practice note for local public audit in England.

FRC has issued revised guidance to the Recognised Supervisory Bodies for recognising Key Audit Partners for local audit, which is applicable now. Taking on the systems leader role in shadow form, its new Director of Local Audit will join in September 2022 to develop an industry-led workforce strategy, with support from DLUHC. Check out the position paper at https://tinyurl.com/4us77mhz

21

PQ with AAT, ACCA, ICAEW or CIMA? Why wait?

Join ICB today!

Fast track your career by using your existing qualifications to join the world’s largest bookkeeping organisation.

As a Certified ICB Bookkeeper you’ll benefit from:

Professional status and recognition Free legal and technical advice-line Local and national events Resources, webinars, templates and help sheets Accounting news, emails and updates Discounts with 100s of retailers including Sainsbury’s, Tesco, ASOS, and Curry’s And being part of a community that really cares

For more information and to receive 15% off your ICB Exemption application, call ICB HQ on 0203

405 4000 and quote ICBPQ

Email us at exemptions@bookkeepers.org.uk

www.bookkeepers.org.uk/PQ

The Institute of Certified Bookkeepers

PQ corporation tax PQ

The truth about corporate tax Alex Dunnagan from TaxWatch explains how corporation tax works in the UK

C

orporation tax (CT) has been in the headlines again after several candidates in the Conservative Party leadership race promised to cut the rate. Liz Truss has promised to reverse the planned increase to 25%, while Jeremy Hunt and Sajid Javid set out plans to cut the rate to 15% before they were eliminated from the contest.

When the Coalition government came to power in 2010 the headline rate of CT stood at 28%. Since then it has been gradually cut to an all-time low of 19%. It was initially planned that the rate would be reduced to 17% from April 2020, but that was reversed, and in 2021 the then Chancellor Rishi Sunak announced that it would be increased to 25% from April 2023.

Should Sunak become the next Conservative Party leader, and with that the UK’s next Prime Minister, there are no indications that the proposed rate increase would change.

It should be noted that the planned rate increase affects companies differently dependent on how much profit they make.

Companies with profits under £50,000 will continue to pay 19% in what’s known as the ‘small profits rate’. Businesses with profits between £50,000 and £250,000 will pay a ‘marginal rate’ somewhere between 19% and 25%.

Who pays corporation tax?

The key thing to remember when looking at CT is that it is a tax on profits, not on revenues.

There is also a difference between the statutory tax rate, be it 19% or 25%, and the effective tax rate, which is the amount of corporate tax a company actually pays on its pre-tax profits.

There are various reasons for this difference.

Companies are able to claim various tax reliefs, for example if they invest in Research and Development. There is an Annual Investment Allowance that allows businesses to claim tax relief on certain assets. A ‘super-deduction’ on purchases of capital goods was introduced in the 2021 Spring Budget, allowing companies to deduct 130% of the cost of ‘main rate assets’ – more than the cost of the equipment itself – from their taxable profits in the year they purchase it. These are just a few of the reasons why companies often pay an effective rate lower than the statutory rate.

Of the three main legal forms of businesses in the private sector (sole proprietorships, ordinary partnerships, and companies) only companies are liable to Corporation Tax. There were two million actively trading companies at the start of 2021, almost half of which had no employees.

Over two-thirds of the companies that paid CT in 2019-20, approximately 1.1 million companies, had liabilities of less than £10,000.

A further 27% of companies had liabilities between £10,000 and £49,999. While it is not clear from the data exactly how much profits these companies turned in order to have these liabilities, it would be reasonable to assume the PQ Magazine September 2022

Pieter Brueghel the Younger’s ‘Paying the Tax (The Tax Collector)’

vast majority of these companies – some 94% of those with liabilities – would have profits of under £250,000, and thus would not be subject to the increased 25% CT rate.

Comparing rates The European average rate is 19.84%, but this includes a number of very small economies with very low rates. The average European rate when weighted by GDP is 23.97%. The G7 average rate is 26.69% (26.41% weighted

by GDP). The OECD average rate is 23.04% (25.81% weighted by GDP).

Jeremy Hunt, who is no longer in the race, stated recently that: “We’re scheduled to increase corporation tax to be higher than Japan, America, France or Germany.” This is half true at best.

The countries listed charge CT at both a central and a sub-central level – that is at a state, regional or municipal level. The UK only charges a central CT. While the UK’s central rate may be higher than some of these countries when it increases to 25%, the total rate will not.

Take Japan, for example. In 2021 Japan’s central CT rate was 23.2%. However, Japan also has a sub-central rate that averages 7.4%. Once deductions are factored in, the total CT rate in Japan is 29.7%. Germany’s total rate is 29.9%, the US is 25.8%. France does not levy a sub-central CT, but the CT rate alone is 28.4%. The OECD provides a useful dataset that show the central, sub-central, and combined CT rates for countries.

Who will pay 25%?

In discussing CT it is important to remember that raising the UK’s rate to 25% as planned will not affect the vast majority of businesses, nor will it turn the UK into a high-tax outlier.

In fact, the only companies set to pay 25% will be those that are turning profits of over £250,000, and even then, they will likely pay a lower effective rate as a result of various reliefs.

An increase from 19% will move the UK to a rate closer to that of other large developed economies, and will still be lower than the rate the UK had in 2010.

• Alex Dunnagan is a researcher at TaxWatch.

TaxWatch is a UK charity dedicated to compliance and sound administration of the law in the field of taxation. It is an investigative think tank which conducts forensic research and analysis on tax avoidance, tax policy and tax law, publishing research to improve public understanding of tax issues.

It seeks to encourage high standards of tax conduct and civic responsibility.

It is independent of any political party. See https://www.taxwatchuk.org/ You can subscribe to the TaxWatch newsletter at https://www.subscribepage.com/taxwatch 23

PQ AAT level 3

Calculating the cost of an asset T Teresa Clarke explains all you need to know about assets

ask 1 of the Advanced Bookkeeping exam requires you to calculate the cost of an asset. You will be given a purchase invoice with a number of different elements to it and asked to separate the capital cost – the cost of the asset – from the revenue expenses.

The cost of the asset is the asset cost, plus any costs needed to get it into a working condition. I prefer to explain this as the cost of the asset is the asset cost, plus any one-off costs. Any cost that will need to be repeated is a revenue expense.

Assets are only classed as assets if they are above the materiality level for the organisation.

In the examples below we will assume that our organisation has a policy of capitalising items of £100 or more.

Example 1 A printing machine is purchased for the office and paid for using the business debit card.

Printing machine £1,000 Installation cost £100 Ink cartridges £50 Total cost £1,150 The printing machine cost plus the installation cost are one-off costs. We only buy the printing machine once and it only has to be installed once. The ink cartridges are a cost that will need to be repeated when they need to be replaced so these are a revenue expense.

The total cost of this asset is £1,100.

The journal entries for this would be: Dr Office machinery £1,100 Dr Office expenses £50 Cr Bank £1,150 Example 2 A van is purchased for use in the business and paid for by bank transfer on the same day.

Van £20,000 Road fund licence/tax £300 Insurance £600 Delivery charges £200 Total cost £21,100 The van cost plus the delivery charges are one-off costs. We only buy the van once and only pay for the delivery charges once. The road fund licence and the insurance need to be repeated each year, so these are revenue expenses. The total cost of this asset is £20,200.

The journal entries for this would be:

Dr Dr Cr

Van at cost Vehicles expenses Bank

£20,200 £900 £21,100

Example 3 A machine is purchased on credit, with payment due within 60 days.

Machine £40,000 1 year’s maintenance costs £1,000 Installation fee £800 Engineer’s set up costs £200 Delivery fee £300 Total cost £42,300 The machine cost plus the installation fee, the engineer’s set up costs and the delivery fee are all one-off costs. We only pay for the machine once, the installation once, the set-up costs once and the delivery costs once. The maintenance costs will need to be repeated next year, so this is a revenue expense. The total cost of this asset is £41,300.

The journal entries for this would be: Dr Machinery £41,300 Dr Repairs and maintenance £1,000

Cr

Other payables

£42,300

Example 4 Chairs are purchased for the conference room and paid for from the business bank account on the day of delivery.

25 chairs for conference room at £80 each £2,000 Total cost £2,000 Even though the total cost for these chairs is £2,000, the cost of each chair is below the materiality level for the organisation, so none of this capitalised. They will, instead, be classed as office expenses, so revenue expenses.

The journal entries for this would be: Dr Office expenses £2,000 Cr Bank £2,000 If you enjoy my way of explaining things, you might like my workbooks, which are all available from Amazon in both paperback and as eBooks. The links to all my workbooks can be found at https://www.teresaclarke.co.uk/ books/ • Teresa Clarke FMAAT

ONE WEBSITE TO RULE THEM ALL!

Check out the funky website Go to pqmagazine.com – where nothing is fake, and all the news is real!

24

PQ Magazine September 2022

Study with HTFT Partnership: why would you go anywhere else?

Pick HTFT for AAT Starting September 2022, we have live courses for AAT Level 3 and AAT Level 4 under Q2022.

HTFT live: pre-recorded syllabus videos that lead into scheduled live online interactive Masterclasses (with expert tutors), all designed to support your mastering of knowledge – accompanied with computer based tests and mock exams For more information visit www.htftpartnership.co.uk/courses/aat/

Think ACCA, think HTFT We have a full suite of ACCA Applied Skills and Strategic Professional courses for December 2022 exams starting early September (weekend of 10th and 11th).

▪

Membership of our vibrant Online Learning Community and access to a dedicated tutor

▪

HTFT Partnership student notes and ACCA authorised study text, exam kit and pocket notes

▪

Full syllabus, Topic by Topic recordings supported by timetabled ‘live online’ Tuition Masterclass sessions – recorded, downloadable and playable on all devices

▪

Scheduled ‘live online’ Revision Masterclass sessions – recorded, downloadable and playable on all devices

▪

HTFT computer based tests and mock exams, marked, with answers and video debriefs

For more information visit www.htftpartnership.co.uk/courses/acca/

Study CIMA, choose HTFT Studying CIMA? Our HTFT live, HTFT on-demand and HTFT play resources are all here to help you prepare for, and pass, your exam.

HTFT live: join our expert tutors live online for interactive Masterclasses, designed to support your application of syllabus knowledge.

HTFT on-demand: drive your learning, with full flexible resources that you control HTFT play: Boxsets of topic recording and Proficiency exam-style practice assessments For more information visit: www.htftpartnership.co.uk/courses/cima

CIMA F1 live starts 7th September, CIMA F2 live starts 22nd September and CIMA F3 live starts 27th September Case Study: OCS (23rd Sept), MCS (30th Sept), SCS (7th Oct)

Online College of the Year 2017

Personality of the Year 2018

Private Sector College of the Year 2020

Why would you go anywhere else?

For more information email info@htftpartnership.co.uk www. htftpartnership.co.uk

PQ CIPFA spotlight

Seeing the bigger picture W

Having a broad skillset is key to delivering successful policies despite soaring inflation, says Sarah Shreeves

e are currently living through the biggest squeeze in living standards in over 30 years. Inflation has now hit 9.1% and is predicted to continue its upward trajectory – perhaps even hitting 15%.

The rising cost in energy is a major driver – UK energy bills rose by more than 50% in April of this year. This is causing households across the country to have to make difficult decisions in order to make ends meet.

Inflation isn’t just a problem for the UK, of course. Globally, countries are feeling the pinch.

While the war in Ukraine rumbles on, food and energy markets continue to be significantly affected.

Today’s public finance leaders will be taking the lead in finding solutions to these complex problems. They will be looking at how they can balance the books in an increasingly challenging environment, while still delivering essential public services.

Inflation will also affect government policies and programmes. The government’s flagship policy to level up the country will be put under considerable strain. As costs across the

board rise, such as building materials, energy, maintenance and wages, investment in the parts of the country which need it most will not go as far as it would have just six months ago. We may find that levelling up is more like a small step up.

Public finance leaders will have to work out how to make scarce funding stretch further than ever, if levelling up policies are to be successful.

To solve these problems, we need people who

are not only good with numbers, but who are creative, empathetic and can problem solve by thinking outside the box. Finance leaders need to understand their local communities, the difficulties they face and the solutions they need.

Levelling up is not cheap, and is certainly not quick. Being able to look at the bigger, longerterm picture, while staying on top of the details, will be vital skills in ensuring levelling up funding is used in the most effective way possible.

Having a long-term focus will prevent any knee jerk reactions to soaring inflation, and ensure that good public financial management is central to all decision making.

More so than ever, public sector finance professionals of today and tomorrow need the skills to be able to navigate ‘VUCA’ factors: volatility, uncertainty, change and ambiguity. If there was ever a set of words to describe today’s climate, it would be these. To help deal with uncertainty, CIPFA offers a free VUCA micro e-learning module to help understand and navigate current challenges.

• Sarah Shreeves, Head of Training Services, CIPFA

ACCA Careers is dedicated to helping ACCA students develop their careers.

With hundreds of entry level global job opportunities and over 400 career advice articles, we’re here to help you every step of the way.

Visit jobs.accaglobal.com today

26

PQ Magazine September 2022

PQ ACCA spotlight PQ Alan Hatfield

most up-to-date skills, abilities and qualities that employers are looking for in future finance professionals. That’s why we continually evolve the ACCA Qualification and why from September 2022 we’ll be introducing professional skills marks into the Strategic Professional Options exams.

“With these changes, students will now be able to demonstrate to employers that they have the essential professional skills required to flourish in a working environment alongside having the technical mastery of their chosen specialism.”

What are the specific changes?

The changes from September 2022 are in ACCA’s Advanced Audit and Assurance (AAA), Advanced Financial Management (AFM), Advanced Performance Management (APM) only. These Options exams will all have 20 marks awarded for professional skills demonstrated throughout the exam.

Advanced Taxation (ATX) will change from June 2023 because of differing examining years.

The power of

professional skills ACCA continues to innovate with the introduction of professional skills marks in Strategic Professional Options exams. ACCA’s Alan Hatfield tells us more

Y

ou’re studying hard. You’re on track with your exams. Your technical skills are strong. So, what else can you do to maximise your employability? This is where professional skills come in.

Having a better understanding of the professional skills needed in the workplace will ensure you’re better prepared for a wide variety of roles and enhance your employability.

That’s why from September, ACCA students will be required to demonstrate their professional skills knowledge in the Strategic Professional Options exams for the first time.

ACCA will be introducing professional skills

ADVANCE YOUR CAREER IN ACCOUNTING www.e-careers.com (accounting) PQ Magazine September 2022

marks into these exams to better prepare you for the role of finance professionals, asking you to demonstrate the critical professional skills required of a professional accountant now and in the future. These changes further enhance ACCA’s commitment to equipping students with the modern-day skills required to succeed in business, following on from the introduction of our Strategic Business Leader (SBL) exam and the Ethics and Professional Skills module (EPSM).

Ann Lamb, ACCA director – Professional Qualifications, explains: “It’s really important to us that we ensure our students have the

What professional skills are ACCA assessing?

Four key professional skills will be assessed, which are: 1. Communication.

2. Commercial acumen.

3. Analysis and evaluation.

4. Scepticism and judgement.

These professional skills are based on those currently assessed in Strategic Business Leader, but have been tailored to reflect the specialist technical content being assessed in the Options exams. You can find out more at the ACCA website.

Support for students If you’re a student planning to sit AAA, AFM or APM in September, we have a selection of fantastic learning resources – from syllabus and study guides to specimen exams and more – to help support you with this exciting change and achieve success.

And, finally, here are some top tips from our experts: • Working through the Ethics and Professional skills module is an excellent way to start developing your professional skills. Make sure you do this before attempting any of the Strategic Professional exams.

• Question practice with feedback on your answers is vital. Build your confidence in your ability to apply the skills by incorporating this from the start of your studies.

• Alan Hatfield, ACCA Executive director – content, quality and innovation at ACCA

Why study with e-Careers: ✓ We’re one of the UK’s largest AAT training providers. ✓ We’ve trained in the region of 10,000 AAT delegates.

✓ We won’t be beaten on price! ✓ Interest-free finance options. ✓ AAT membership available.

✓ Our students receive higher than average pass rates. ✓ Selected AAT courses include eLearning, Study Books, Tutor Support & Live Online Classes.

+44 (0) 20 3198 7600 Mon - Fri | 9am - 6pm 27

PQ salary guide

The state of accountancy

T

GAAPweb has released its 2022 Audience Insight Report

he latest GAAP insight report reveals the gender pay gap closed by 3% this year; however, the average salary of a male accountant (£74,830) is still 20% more than their female colleagues.

Despite this, women’s salaries have seen a larger year-on-year increase, with women in the survey earning 10% more on average (£59,844) compared with 2021. Comparatively, the average salary for women was up 6% in the last year.

While some pay disparity was noticed among some lower paying roles, such as credit controllers, for the most part the gap was more prominent among the more senior roles. The average salary for men in Head of Finance roles was £11,760 more than their female counterparts. In addition, disparities reached £11,530 for FP&A Managers and £6,085 for Financial Controllers.

However, the largest pay disparity was found in FP&A analysts – a job title equally represented by men and women – with men receiving £15,000 more on average.

Gender differences in the profession are amplified when looking at remuneration and rewards.

Male finance professionals were significantly more likely to have received a bonus, with 59% of respondents receiving additional compensation

for their hard work.

This was an increase of 4% on 2021, yet only 39% of female professionals received a bonus this year compared with 44% the year before.

Average salary Pay for the two most senior finance roles has once again reached six figures, with CFOs reporting an average salary of £123,008. Finance Directors have made a comeback following a significant cut to salaries during the pandemic, earning £104,422 on average, up 10% year-onyear. The more junior finance roles experienced the largest fluctuation in terms of average salary, with tax (45%) and accounts payable (40%) reportedly earning a significant amount more post-pandemic.

Conversely, those working in audit (-24%), payroll (-5%) and bookkeeper (-2%) roles noticed a salary decrease. Two out of three of the sectors that saw the largest salary drop in 2021 have recovered, with significant increases this year for corporate finance (62%) and PQ accountant (47%). The average salary for a PQ rose from £28,333 in 2021 to £41,667 in 2022.

By location Showing no sign of moving from the top of the UK pay table, London saw salaries grow to £76,224 on average, up 4%. In close second, professionals working in the South East have reported a 13% increase in average salary, with £74,274.

All other locations across the UK have reported average salary increases, possibly due to the rise of hybrid working, which is affording previously London-based professionals with higher pay packets the option to work outside of the capital.

Wales has experienced the largest increase in average salary within the UK, with 56%. The only exception is the South West, which saw average salaries drop by 3%.

Elsewhere, pay in overseas locations have also reported year-on-year increases, indicating that global economies are bouncing back. Salaries for finance professionals in Australasia now exceed salaries in London.

Check out the full report at https://tinyurl. com/55ft998t

DEVELOPING THE SKILLS OF THE SUSTAINABLE BUSINESS AND FINANCE PROFESSIONAL Quality learning and development (L&D) equips you to serve sustainable business and finance professionals that businesses and society demand.

This report draws from the views of over 800 learners and L&D experts to help identify the features and qualities of good L&D.

https://bit.ly/3y27Ejk

28

PQ Magazine September 2022

PQ regulatory action PQ

KPMG hit with record fine by FRC The UK accountancy watchdog hands KPMG a record fine over its ‘misconduct’ of Carillon and Regenersis audits

T

he Financial Reporting Council (FRC) has formally announced the sanctions against KPMG and five of its employees over the audits of Regenersis and Carillion plc.

It follows an investigation into the provision of false and misleading information and documents supplied to the FRC in connection to Audit Quality Reviews.

Following a five-week hearing, an independent disciplinary tribunal fined KPMG £14.4 million and severely reprimanded the firm. KPMG also agreed to pay £3.95 million towards Executive Counsel’s costs of the investigation.

The FRC also fined former KPMG partner Peter Meehan £250,000 and excluded him from the ICAEW for 10 years.

PQ Magazine September 2022

Three executives, Alistair Wright, Adam Bennett and Richard Kitchen, received fines of £45,000, £40,000 and £30,000 respectively.

They were also excluded from the membership of ICAEW for a number of years.

PQ Pratik Paw was severely reprimanded but not fined. There was talk of a heavy fine for him, too; however this has been dropped The tribunal made a number of findings of misconduct, involving breaches of the fundamental principle of Integrity that requires an accountant to be straightforward and honest in all professional and business relationships, stating: “No accountant should require any education or training to realise that deliberately misleading anyone, but especially a regulator, is at least incompatible with integrity and, barring

special circumstances, dishonest.”

When it came to the Carillion inspection the tribunal found that there had been misconduct in respect of the Carillion AQR inspection concerning minutes of year-end ‘clearance’ meetings, and an audit working paper on the selection of contracts for audit testing (the CCS Paper), that were presented to the AQR inspectors as having been created during the Carillion audit.

In respect of the meeting minutes the tribunal found that misconduct had been committed by Meehan, Wright, Kitchen, Bennett and Paw in that: • Wright and Paw had created, and Meehan, Kitchen and Bennett had assisted or encouraged the creation of, false or misleading meeting minutes, intending to mislead, or as a party to the deliberate misleading of, the AQR inspectors or being reckless as to whether they would be misled; and • They had made, or connived in or were knowingly associated with making, certain false or misleading representations to the AQR inspectors as to when and in what circumstances the meeting minutes were created, intending to mislead, or as a party to the deliberate misleading of, them or being reckless as to whether they would be misled.

• And that Meehan, Wright, Kitchen and Bennett were found partly to have been dishonest misleading the AQR inspectors.

Wright had already admitted these allegations, and that his conduct was dishonest.

The Tribunal found that Paw, by implementing without question the instructions given to him by Wright to create false minutes, acted without the integrity required of an accountant and became a party to the deliberate misleading of the AQR. However, Paw was not found to have acted dishonestly.

A further allegation of misconduct in relation to the content of the meeting minutes made by Executive Counsel against Meehan, Wright and Kitchen was found not proved by the tribunal.

The full report of the tribunal has not been published at this time.

29

ACCA SBR STUDENTS Tom Clendon's CBE Online Mock An original mock exam

24/7 WhatsApp support

100+ Technical Quizzes

Current Issues Live wrap up Q&A session

Personalised feedback Exam technique support

Accountancy can be simple if you know the basics! PQ magazine has gathered together the top tutors in the world to help us help you.

Our Back to Basics video series will guide you through some of the fundamental topics of accountancy. Many of the videos even come with an accompanying article! The series includes: Jo Tuffill – Cost behaviour (newly uploaded)

Understanding a business’s cost structure is vital for its success. It is why cost behaviour is the first concept taught in management accounting. Her video runs for just seven-and-a half minutes and explains exactly what a cost is, looking at both variable and fixed costs. Jo has also written an accompanying feature (PQ magazine, April 2022). You can check out her video at: https://vimeo.com/680501310.

Tom Clendon – double entry bookkeeping

You should be able to master the rules of double entry bookkeeping in just eight-and-a half minutes. So do you know your credits and debits? You can find Tom’s feature explaining all on page 22 of PQ magazine, July 2020.

Check out the video at: https://vimeo. com/429252329.

Michele Baker – trial balance

In just six short minutes Michele Baker explains how to create the trial balance and why you are doing it. Michele will let you know whether a balance is a credit or debit, and help you get to grips with ‘DEAD CLIC’. She has had over 550 views already. Check out the video at: https://vimeo. com/500074449.

Sunil Bhandari – financial maths

This presentation is slanted to ACCA FM and AFM students sitting the CBE exams, but will be useful for any PQs wanting to understand financial maths that bit better. See pages 20-21 of PQ magazine, September 2020, for the accompanying article. Check out the video at: https:// vimeo.com/446780185.

Check out more great Back to Basic videos at www.pqmagazine. com. Either click on the video bar at the top of the home page or scroll down to the video section

PQ joint arrangements PQ direct rights to the assets and obligations for the liabilities of the arrangement.

Example Muscat and Troy agree to set up in business as a taxi firm, make decisions only when there is consensus and to share profits and losses equally. Oman and Helen also commit to the same business plan. Muscat & Troy and Oman & Helen therefore have both entered into joint arrangements.

However, Muscat and Troy decide to set up a company (Taxi plc) and each subscribe to 50% of the shares. Taxi plc borrows money and buys a motor vehicle. Muscat and Troy therefore have an interest in the net assets of Taxi plc. Taxi plc is a joint venture between Muscat and Troy.

Oman and Helen simply open up a joint bank account. The bank lends them the cash to buy a motor vehicle in their joint names. Oman and Helen now each have a direct right to the motor vehicle, and both have an obligation for the bank loan. Oman and Helen’s arrangement is a joint operation.

Question for Tom This month top tutor Tom Clendon explains how to account for joint Operations and joint ventures – same but different!

Question What’s the difference between a ‘joint operation’ and a ‘joint venture’ and how are these accounted for?

Tom’s answer They are both joint arrangements! First let me confirm that both joint operations and joint ventures are ‘joint arrangements’. This means that there is joint control.

Joint control is where an agreement exists between two or more parties, stipulating that all important decisions must be made with the unanimous consent of all the parties sharing control of the joint arrangement.

What is a joint venture? A joint venture is an arrangement where the parties sharing the control would have rights to a share of net assets. Joint ventures are structured through a separate legal entity. A limited liability company is formed.

Accounting treatment for Muscat & Troy’s interest in Taxi plc the Joint Venture Muscat and Troy’s interest in the joint venture company, Taxi plc, is accounted in their financial statements using equity accounting. This means that each party will account for the cash paid to subscribe for the shares in Taxi plc by recognising a non-current asset ‘Investment in a Joint Venture’. The carrying value of this investment will subsequently increase by the share of the retained profits of Taxi plc. The share of Taxi plc’s annual profits will be reported in a single line in the statements of profit and loss.

Equity accounting is also used to account for investments in associates.

Accounting treatment for Oman & Helen’s Joint Operation On the other hand, for Oman and Helen, when accounting for their joint operation, each party must account for its interest in the joint operation on a line-by-line basis by recognising their share of assets, liabilities, revenues, and expenses of the joint operation. In other words both Oman and Helen will account for half of the taxi and half of the bank loan.

What is a joint operation? A joint operation on the other hand, is not conducted through a separate legal entity. Hence the parties have

Sign up online for your free copy of

PQ magazine

Conclusion So, the difference between a ‘joint operation’ and a ‘joint venture’ and the accounting is ‘same same but different’.

• Tom Clendon is an online ACCA SBR lecturer and podcaster. See www.tomclendon.co.uk

-

-� ::::..

Go to www.pqmagazine.com - simply click on the 'subscribe' button PQ Magazine September 2022

31

ACCA September exam tips PQ

YOUR SEPTEMBER EXAM TIPS The September sitting is nearly here. What you need is some BPP exam tips and guidance

Performance Management PM Section A will have 15 two-mark OTQs on a wide range of topics. Expect a mix of calculation and discussion-based questions, note that there are no marks for workings in this section. Good time management is key as it is easy to get caught up in a tough calculation which ultimately will only be worth 2 marks. Never be tempted to spend more than 5 minutes on any question in this section.

For section B there are three separate scenarios with five objective test questions on each scenario; each question is worth 2 marks.

Questions are not dependant on each other and can be answered in any order. Each scenario could be a mix of topic areas or focused on one topic and will usually consist of two/three calculations and two/three narratives.

In section C there are two 20-mark questions, which could be from, but not limited to: budgetary systems, planning and operational variances, mix and yield variances and evaluation of the company performance (either as a whole, or on a divisional basis). Familiarity with the CBE software is vital as you may be expected to use both a word processing and spreadsheet format for your answer. Learn standardised layouts for calculations such as variances, learning curves and limiting factors.

This will save you time in the exam and also mean that you are less likely to make mistakes.

The split of marks tends to be approximately 40% calculations and 60% discussion, so don’t neglect the written elements of this paper. Make sure that you always fully explain your ideas.

Interpretation and application are important skills that are tested in this paper so make sure you make full use of the scenarios that you are given in the exam.

Taxation TX (UK) In section A there will be a wide range of topics tested as there are 15 OTQs. Tutors expect at least a couple of these to be devoted to the administration of income tax and corporation tax. So, candidates should ensure they are comfortable with the following: • Due dates for the payment of income tax (including payments on account).

• Due dates for the payment of corporation tax (including instalments for large companies).

• Filing dates for the income tax and corporation tax returns.

• Penalties and interest for late payments and returns.

Other topic areas likely to be tested in section A of the exam are: • VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flat‐rate schemes.

• Inheritance tax due on lifetime transfers both in the donor’s life and on death.

• Statutory residence tests for individuals.

• Identification of groups of companies for corporation tax loss reliefs and gains.

PQ Magazine September 2022

• Trading loss reliefs for both companies and sole traders.

In section B the questions will be similar to those of section A, but there will be a longer scenario to deal with. This means a slightly different exam skill is necessary as you have more information to work through and each OTQ will require you to find the relevant information or data in that scenario. It is not a difficult skill, but you have to practise an extensive range of section B questions from the practice and revision kit before attempting the real exam.

In section C you will face the longer, constructive response questions with scenarios and much more open requirements. Your answers will need to show not just sound technical knowledge, but also the application of that knowledge to the question you have been asked.

At least 50% of your revision time should be spent answering the section C questions in the practice and revision kit to build confidence and speed in a way that will also maximise marks.

1. Remember to learn your income tax and corporation tax pro formas.

2. Calculations which require no more than two or three entries into your calculator can be included on the face of your pro formas (e.g. time apportioning a salary). Calculations which are more complex (e.g. company car benefits) need separate workings which are properly referenced (W1, W2 etc) and have a heading. Use the cell formulae to link the workings answer into your pro forma – then if you change the working the main body will be automatically update.

3. Actually attempt the narrative parts of the requirement – aim for as many sentences as there are marks with each sentence containing something technical. Keep your paragraphs to no more than 3 sentences long.

4. Your exam will be in the CBE software and the spreadsheets have some differences to the software you may be accustomed to, so it is crucial you practice using the CBE software, especially for section C type questions.

5. Remember you cannot insert rows into the CBE spreadsheets. So, leave plenty of space on the page (especially when setting up proformas). You may need to add something in and you can always go back and move workings up the page. Show workings down the page, rather than across the page as it makes them easier to mark. Well‐spaced answers are also easier to mark – and you always want to keep the marker happy.

We know that the two longest questions will focus on income tax and corporation tax. These are likely to include the following: • Employment benefits.

• Property income.

• Relief for pension contributions.

• Adjustments to profit to arrive at trading income for both companies and sole traders – in past sittings we have seen a number of questions whereby you have to correct errors in computations included in the scenario.

• Capital allowance computations.

Finally, remember the pass mark is 50% so you don’t need to be perfect. If you don’t know something have a guess and move on.

Sometimes you have to do that in order to get follow through marks in section C questions. If you make a mistake, but then use that incorrect figure later in a subsequent calculation, then that’s fine – you can only lose the mark once.

In sections A and B never leave an OTQ unanswered – have a guess if you don’t know the answer. It might be right!

Financial Reporting FR Section A: • 15 two-mark OTQs on a wide range of topics including several on consolidation and interpretation of financial statements that will be covered in detail in section C. • Expect a few questions on non-core areas (e.g. inflation, specialised entities).

• Read the scenario, requirement and answer options carefully and ensure you capture the correct information from the scenario to answer the requirement.

• Don’t leave any questions unanswered – there is no harm in guessing if you are unsure of the correct answer (the same is true in section B).

Section B (case questions): • Three separate scenarios with five OTQs on each scenario; each question is worth 2 marks.

• Each scenario could be a mix of topic areas (for example revenue and receivables are often related, or PPE and leases) or focused on one topic and will usually consist of two/ three calculations and two/three narratives.

• Questions are not dependant on each other and can be answered in any order.

Section C (constructed response questions): • Two 20-mark questions, one covering Continued on page 34 33

PQ ACCA September exam tips Continued from page 33 interpretations and the other preparation of financial statements.

• One question is likely to be in the context of a single company and one in the context of a group, so you could have a single company interpretation and a groups preparation or vice versa.

• Accounts preparation questions may include extracts or standalone calculations or full statements. Students expect statement of profit or loss and other comprehensive income and statement of financial position to be asked, but don't forget about the statement of changes in equity and the statement of cash flows too.

• Both questions will require knowledge from other areas of the syllabus, particularly the accounts preparation question which will have a range of adjustments covering various areas.

• A single entity accounts preparation question from a trail balance or restatement of given financial statements with common adjustments being for depreciation, revaluation and current/deferred tax (including deferred tax on revaluations) plus a mixture of adjustments on other syllabus areas e.g. leases, substance over form issues, financial instruments (change in fair value or amortised cost), share issues, government grants, inventory valuat ion,and revenue recognition.

• Group accounts preparation questions will provide the separate financial statements (or extracts thereof) of the parent and relevant subsidiary(ies) and associate. Candidates should be prepared to set out the standard workings for goodwill, non-controlling interests, movements in net assets, retained earnings as those are commonly examined.

Other common adjustments are intragroup sales of goods, intragroup sales of assets, dividends and fair value adjustments.

• ACCA has clarified in the 2022-23 syllabus that a consolidation accounts preparation question could include up to two subsidiaries and one associate (previously it was one subsidiary and one associate) which allows additional scope for examining the disposal of a subsidiary (including as a discontinued operation). Candidates should be prepared for such a question from September 2022 onwards.

• Candidates continue to find the interpretations question challenging. In both single entity and group interpretation questions, candidates must avoid making generic statements about the movement in ratios and instead focus on using the information in the question to, for example: identify key changes in the period (e.g. change in sales mix, closed down an operation, purchased a new subsidiary); identify transactions that would cause inconsistencies between periods or between balances (e.g. revaluation of assets for the first time, particularly if the revaluation was at the end of the period); identify any changes in accounting policies or estimates, or classification (e.g. one company presents expenses as part of cost of sales whereas 34

another presents as part of administrative expenses).

• ACCA has clarified wording in the 2022-23 syllabus to emphasise the importance of the statement of cash flows in interpreting financial statements. Candidates should be prepared for such a question from September 2022 onwards.

Audit & Assurance AA In section A there will be three mini-case style scenarios, each with five 2-mark questions based on the scenario (30 in total). Each minicase question will test single topic areas of the syllabus and so will test syllabus areas A, B, C, D or E. Expect questions in section A to focus on areas A and E. All three questions (one 30-mark and two 20-mark questions) in section B will be broken down into sub requirements and be scenario based. The majority of marks in each question will test syllabus areas B, C and/or D. Areas expected to be tested in questions 16 to 18 include: • Audit planning.

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

• Internal audit.

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

• Audit procedures (Substantive procedures & tests of controls).

General advice: Where questions are based on a scenario it is essential that you use the information in the scenario to score the identification marks and then develop this to score the explanation marks.

The exam provides a table for you to complete your answer. For example, audit risk questions will have a table with two columns, one for ‘audit

risk’ and one for ‘auditor’s response’ with each properly explained point being worth one mark.

Using this tabular approach encourages you to answer both parts of the question, therefore maximising your marks.

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

Finally, it is essential you read the Examiner’s Reports which are issued twice a year after the June and December exam sittings. These are an invaluable source of advice and provide a sample section A OTQ case style question as well as three constructed response questions from the March/June and September/December sittings. Not only do they provide the example questions but these are accompanied by a commentary from the examining team which gives guidance on interpreting the question requirements and common mistakes/areas of weakness noted during the marking process.

These reports can be found on the ACCA website: https://www.accaglobal.com/uk/en/ student/exam-support-resources/fundamentalsexams-study-resources/f8/examiners-reports1. htm.

Financial Management FM Questions in section A will often be knowledge based (testing your knowledge of key technical terms), and will balance out the questions in section B and C of the exam to make sure that all aspects of the syllabus are examined.

It is also likely that a good number of these questions will test your understanding of financial management and objectives (ratio analysis, the concept of shareholder wealth) as well as the economic environment and financial PQ Magazine September 2022

ACCA September exam tips PQ institutions topics (financial intermediation, fiscal and monetary policies).

Each section B case-study will be broken down into three 10-mark mini case studies.

The case study will then be broken down into 5 separate 2-mark MCQs (so 15 questions in total). Areas expected to be commonly tested in this section are working capital management (e.g. the operating cycle, the impact of a change in credit period or accepting a factor’s offer), business or security valuations (e.g. methods of valuation), and financial risk management (currency risk and interest rate risk).

Section C’s two 20-mark questions will be broken down into sub requirements and be scenario based. These two questions will focus mainly on syllabus sections C, D and E. Section C is working capital management, section D is investment appraisal and section E is business finance. Whichever of these three topics does not feature in section C is likely to appear in section B of the exam.

Questions from syllabus section C (working capital management) are likely to be broad ranging so a good broad knowledge of this syllabus section is important. Candidates are sometimes exposed by a weak understanding of working capital finance.

Questions from section D (investment appraisal) are likely to feature NPV with inflation and tax, however it is important to also be able to answer questions that include risk, leasing, asset replacement and capital rationing. Section E (business finance) questions often either feature an evaluation of financing options (interest coverage and gearing ratios are likely to be important here) or calculation and analysis of a company's cost of capital.

Strategic Business Reporting SBR It is important that you read the examiner's approach article on the ACCA website. ACCA has also published several exam technique and technical articles that you should read as part of your exam preparation. These are available in the exam technique section of the SBR exam support resources section of the ACCA website www.accaglobal.com.

The exam section A will be 2 questions, worth 50 marks in total.

Question 1 – 30 marks: • Q1 will be based on group accounting. Be aware that this question may test any aspect of group accounting, including consolidated statements of cash flows, overseas subsidiaries and associates and JVs. • Make sure you provide calculations if these are asked for. A recent Examiner's Report stated that some candidates are not attempting the required calculations and therefore struggling to gain a pass mark on this question.

• To score well, you need to do the calculations and, where asked explain the principles underlying the calculations you have performed. If a question simply asks for a calculation, you do not need to provide an explanation, unless this is specifically indicated in the requirement.

• Time-keeping is key to passing this question.

PQ Magazine September 2022

HEALTH WARNING

These tips should only be used in conjunction with proper study. We cannot guarantee that these topics will appear in the actual exam as we have not seen the exam papers.

Examiners are not predictable so it is vital that all core syllabus areas are revised fully.

A recent Examiner Report identified that students were spending too long writing detailed answers to the first parts of question 1 and then not attempting the later parts.

The marker cannot award more than the allocated number of marks for each part of the question, so to maximise your marks, you must make sure you attempt each part of the question. Make sure you work out the time you have available for each question, and for each part of the question and then stick to it.

Question 2 - 20 marks, including two professional marks for application of ethical principles: • Q2 will cover the reporting and ethical implications in a given scenario. Make sure you consider any threats to the fundamental principles of ACCA's Code of Ethics and Conduct in your answer.

• Two professional marks are available in this question and going forward the examiner has stated that the question will make it clear what these marks will be awarded for.

Section B will be two questions, worth 25 marks each: • Section B can deal with any area of the syllabus and may be based on a short scenario, a case study with several parts, or an essay.

• Section B will always include a question or part-question involving the analysis or appraisal of information from the perspective of a stakeholder. Make sure you have a go at answering this question. There is no 'right' answer at this level - marks will be awarded for sensible points that have been applied to

the scenario.

• There are two professional marks available for the question that covers the stakeholder's perspective. To gain these marks, you must discuss the issue from the perspective of the stakeholder – e.g. if asked for the investor's perspective, you must answer from the investor's perspective.

• Current issues are usually examined in section B as a part of a question (not a full question). However, current issues could be examined in either section A or section B of the exam. A question on current issues may require the application of existing accounting standards to a current accounting issue – for example, accounting for cryptocurrency, accounting for the effects of a natural disaster.

General advice: Make sure you plan your time at the beginning of the exam (and stick to it) to ensure you don't over-run on a particular question – it is 1.95 minutes per mark (or 1.8 minutes per mark if you allocate 15 minutes to reading the paper).

Generally, you will be awarded 1 mark for each relevant well-explained point in the SBR exam. Make sure you make enough points for the marks available – for example, if the requirement is worth 8 marks, you should aim to make 8 relevant, well-explained points.

It will be easier for the marker to award you marks if you lay out your answers clearly, leaving space between your points. You can use the spreadsheet (and spreadsheet functionality) to do calculations. If you do use the spreadsheet, make sure you cross reference to any narrative discussion, if appropriate.

Some requirements state that you do not need to refer to an exhibit to answer that particular requirement. Where this is the case, then it is recommended that you follow that advice and stick to general discussion, rather than referring to the scenario.

Use the 'cut' and 'paste' tools wisely – e.g. do not cut and paste into your answer large sections of the exhibits as the examiner has stated in a recent Examiner's Report that this will be obvious to the marker, and will gain no marks. If you wish to use cut and paste, the examiner recommends just copying and pasting relevant parts of sentences and then adding your own comments.

Strategic Business Leader SBL As with all other ACCA current exams SBL is examined as a closed book examination. Unlike the other Strategic Professional level exams which are 3 hours and 15 minutes in duration, the SBL exam ‘lasts’ 4 hours. The exam builds upon the knowledge that you gained at the ‘Applied Knowledge’ and ‘Applied Skills’ levels.

However, it does also have its own distinct syllabus content.

You will not be issued with any pre-seen information in advance of sitting your exam as everything you will require will be made available to you within the examination itself. The SBL exam will focus on one main organisation, and all of the question requirements will relate to this organisation. You may have to take on a variety of roles which may require you to adopt an Continued on page 36 35

PQ ACCA September exam tips Continued from page 35 internal or external perspective when answering questions. You will also be required to respond to a variety of people within the organisation. All of the questions in the exam are compulsory.

The SBL exam will consist of 80 technical marks and 20 Professional Skills marks.

Question requirements in the exam will assess and link several subject areas from across the syllabus, and these will test your ability to construct appropriate responses and to carry out numerical analysis.

General advice: While 4 hours (240 minutes) can sound like a lot of time in which to attempt the exam, it is crucial not to become complacent in how you use this time.

ACCA recommend spending around 40 minutes reading, planning and interpreting the requirements and the information/exhibits provided. Based on this estimation when planning the amount of time you will spend on each requirement you should look to allocate 2.5 minutes per mark on offer. This time allocation is based on the fact that the exam is 240 minutes in duration, once the 40 minutes reading time is deducted this gives 200 minutes to type up your answer. There are 80 technical marks on offer so by dividing the 200 minutes by the 80 technical marks we derive 2.5 minutes per mark. You can earn the 20 Professional Skills marks by virtue of attempting the 80 technical marks on offer.

It is important to note that you can spend longer than the recommended 40 minutes reading and planning your answer. If you do choose to spend longer on this task then you will need to bear this in mind when you come to writing your answers. Alternatively, you may prefer to work on the basis of 2 minutes per mark (being 200 minutes divided by 100 marks).

Reading question requirements: The SBL exam will contain all of the information that you will require to answer the question requirements set. This information will be presented in a series of exhibits. To help you locate the exhibits most relevant to answering a specific question it is therefore important that you take the time to read the question requirements set carefully as this should help to direct you. Furthermore, reading the question requirements carefully is important as this will indicate the role and the perspective from which you are expected to answer the question. Identifying this early on is important as it will drive how you construct your answer.

Planning your answer: Clearly, if you have gone to the trouble of preparing an answer plan it is important that you use it when writing up your answer. To get the most from your answer plan it is therefore important that you include as much detail as you think will be helpful when the time comes to write up your answer. When planning your work it is important to bear in mind the ACCA’s guide of using 40 minutes for reading and planning. As mentioned earlier you need to remember that some question requirements may require you to conduct some numerical analysis. For example, you may be asked to analyse the performance of the organisation featured in the exam. It is important that you plan the numerical analysis that you intend to perform to ensure that you only focus 36

on performing those calculations that are going to support your answer and provide you with something to talk about.

Producing lots and lots of unnecessary calculations for the sake of it will only serve to waste your time in the exam.

Using computer software: Ensure you practise timed exam questions using the ACCA CBE software. You need to be comfortable reading and highlighting the exhibits on the screen as well as taking notes in the scratch pad. It will be easier if you plan your ideas and set up your answer structure in the software, in the form of headings. The exam software comprises a word processor, a spreadsheet and some presentation software. The word processor will be used for answering the majority of the tasks.

Any calculations you perform should be in an appendix in the spreadsheet software. Tasks requesting slides should be completed in the presentation software.

Understanding the syllabus and the appropriate use of theoretical models in the exam: To stand the best chance of passing the SBL exam, you will need to have a good understanding of the entire syllabus. However, it is important to remember that unlike other exams that you may have sat in the past, questions in the SBL exam will not ask you to simply regurgitate your knowledge of a particular topic or theoretical model. Requirements will test your ability to apply your understanding of the subjects covered in the SBL syllabus in the context of the question scenario. Furthermore, requirements will not specifically ask you to use a particular model in answering the question.

Whether to use a theoretical model when constructing your answer will be a matter of judgement that you will need to weigh up in light of the information presented to you in the exam. Attempting plenty of questions in the lead up to your exam is the most effective way of developing your judgement in this area.

Understanding the difference between technical marks and Professional Skill marks: Technical marks relate to the knowledge (which we discussed in the previous section), there are 80 technical marks on offer in the exam. By contrast the 20 Professional Skills marks are awarded for displaying the following skills and

behaviours: • Communication.

• Commercial acumen.

• Analysis.

• Scepticism.

• Evaluation.

Every Professional Skill will be tested in every SBL exam sitting. The Professional Skill being tested will be specified under each question requirement. As you prepare to attempt the exam it is crucial that you take the time to attempt as many practice questions as you can.

To increase your chances of exam success you need to ensure that you take sufficient time to develop your understanding of the Professional Skills.

Advanced Performance Management APM Q1 section A: Q1 of the APM exam will focus on a range of issues from syllabus section A (strategic planning and control), section B (performance measurement systems and design) and section C (strategic performance measurement).

Section A (50 marks) contains one compulsory question. In recent exams Q1 has often required linking a business’s mission to its performance objectives using the concept of CSFs and KPIs. You may well also have to critique and recommend improvements to performance reports and the balanced scorecard and/or information systems could well be tested in this context.

The assessment of performance is also likely to be tested and this could easily include benchmarking as a theme. Financial performance measures (ROCE/RI/EVA etc) are also likely to be commonly examined in this context but don't neglect non-financial issues from syllabus section C such as quality management, value for management and reward systems.

Q2-3 section B: ACCA have said that one of the section B questions will come from syllabus section D (performance evaluation).

In section B, commonly tested areas include quality management, information reporting (e.g. big data, lean information), HR frameworks (e.g.

PQ Magazine September 2022

ACCA September exam tips PQ reward & appraisal systems), risk management and environmental management accounting.

General advice: APM is primarily a skillsbased exam which tests the ability to apply knowledge to practical problems. This is now even more important as 20% of the marks are awarded for professional skills. Make sure you are aware what these skills are and that you are confident in your ability to integrate these into your answer to the technical requirements of a question.

However, application of knowledge is only possible if you have a good range of technical skills in place. So, even though APM is not about reciting technical knowledge, it is absolutely vital that candidates ensure that they have a good broad knowledge of core technical areas (e.g. characteristics of Big Data, lean information, six sigma).

Advanced Taxation ATX (UK) The exam will comprise of two compulsory questions within section A which will both be of a case study style. The first question will be 35-marks in length and the second will be for 25-marks. One of these questions will focus on personal tax issues and the other will focus on corporate tax issues. In Q1 there will be four professional skills marks, and in section A there will be five marks on ethics.

Section B will comprise of two compulsory 20-mark questions. These will be in a more succinct, note form style.

The exam will test candidates’ ability to analyse and evaluate the tax implications of various situations, numerical calculations will only be required to assist in producing an answer and no purely numerical questions will be set.

Topics/scenarios we would expect to see are: • Personal income tax scenarios which could involve: investing in a pension; investing in EIS, SEIS or VCTs, share schemes; employment income possibly with termination payments; a personal service company; property income or a takeover.

• Unincorporated business – particularly including loss reliefs, partnerships or basis period rules.

• A question focussing on overseas issues -– this could be income tax, capital gains tax, inheritance tax or a corporate scenario.

• Capital gains tax versus inheritance tax including availability of reliefs.

• Corporate scenarios – likely to focus in more depth on intangibles; research and development; losses; corporate groups or consortia.

• Special corporate scenarios such as liquidation; purchase of own shares; close or investment companies.

• A business transformation scenario question such as selling a sole trade business, incorporation, or, in a corporate context, the sale of shares versus the sale of trade and assets.

• Other common types of question/calculation to expect are: • Reviewing a pre-prepared computation to spot, explain and correct errors.

• Calculations such as “tax saved through an action”, “after-tax proceeds”, “the PQ Magazine September 2022

value of a post-tax inheritance”, “net spendable income” or the “net of tax cost of something”.

Don’t forget that across the scenarios you can expect to see VAT marks available. Partial exemption, land & buildings, transfer of going concern, capital goods scheme, overseas VAT and registration/group registration tend to be frequently examined.

There will also likely be a couple of marks for stamp duty points if you remember to think about it in your planning!

Finally, don’t forget your basic administration points are also likely to be examined – when do we need to pay tax, when do we file a return and what if either of those are late?

Advanced Audit & Assurance AAA The most recent AAA exams have contained no real surprises, although you should be prepared for the look and feel of the embedded email and supporting exhibits.

Section A will comprise a case study, worth 50 marks, split into 40 technical marks and ten professional skills marks, and will be set at the planning stage of the audit, for a single company, a group of companies or potentially several audit clients.

Candidates will be provided with detailed information, which will vary between examinations, but is likely to include extracts of financial information, strategic, operational and other relevant information for a client, as well as extracts from audit working papers, which could include the results of analytical procedures. The date will be set as 1 July 20X5.

Candidates will be required to address a range of requirements, from syllabus sections A, B, C and D thereby tackling a real-world situation where candidates may have to address a range of issues simultaneously in relation to planning, risk assessment, evidence gathering and ethical and professional considerations.

Ten professional marks will be available in section A and will be awarded based on the demonstration of professional skill within a candidate’s answer, including communication, analysis and evaluation, professional scepticism and judgement and commercial acumen.

Section B will contain two compulsory 25-mark questions, with each being predominately based around a short scenario.

The marks will be split into 20 technical marks and five professional skills marks. There are no optional questions in AAA. One question will always test syllabus section E, and candidates should therefore always be prepared to answer a question relating to completion, review and reporting. There are a number of formats this question could adopt, including, but not limited to, matters to be considered and evidence expected to be on file, a going concern assessment, the impact of subsequent events, evaluating identified misstatements and any corresponding effects on the auditor’s report. Candidates may also be asked to critique an auditor’s report or a report which is to be provided to management or those charged with governance.

The second section B question can be drawn from any other part of the syllabus, including sections A, B, C, D and F. Syllabus section G

on current issues is unlikely to form the basis of a question on its own, but instead will be incorporated into the Case Study or either of the section B questions depending on question content and the topical issues affecting the profession at the time of sitting the exam (for topical issues, see technical articles below).

Five professional marks will be available in each section B question for demonstrating professional skill in analysis and evaluation plus at least one of professional scepticism and judgement and commercial acumen.

General advice: This subject often tests topical issues which have been covered by the examining team’s technical articles (for example, the impact of data analytics in September/ December 2020). There are also five exam technique articles that you must read covering ethics, risk, accounting issues, audit procedures and reporting.

Advanced Financial Management AFM All AFM exams will have questions which have a focus on section B of the syllabus (advanced investment appraisal) and section E (treasury and advanced risk management techniques).

These syllabus areas are therefore high priority areas for your revision.

Q1 section A: You can expect section A questions to cover at least two different syllabus areas. This emphasises the importance of having a good broad knowledge of the syllabus and not targeting your final exam revision on a small number of syllabus areas.

Section A questions are often based on core syllabus areas such as: project appraisal (domestic or overseas), business valuations and business/financial reorganisations; these areas often include cost of capital calculations.

Risk management may also feature in a number of different ways e.g. value at risk, real options, interest rate or current hedging, and risk management (e.g. mapping).

Q2-3 section B: • Risk management (currency or interest rate) including the functions and structure of a treasury department.

• Dividend policy and general financing issues.

• Real options including limitations of approach.

• Business reorganisation.

General advice: The examining team have stressed that exams are designed to make question spotting extremely difficult for this paper, so it is important to have a broad understanding of the key aspects of each syllabus area.

Don't over-emphasise numerical analysis in your final revision – remember that this paper is not a maths exam and, in all exam questions the examiner is interested in your ability to communicate well and to give good management advice that relates to the scenario in the question. This is now even more important as 20% of the marks are awarded for professional skills. Make sure you aware what these skills are and that you are confident in your ability to integrate these into your answer to the technical requirements of a question.

37

PQ CIMA spotlight

Prepare for success with CIMA’s examination blueprints Y

Mark Foley outlines what the exam blueprints are and how they can help you in the exam hall

ou know that the key to exam success is preparation. So wouldn’t a detailed outline of what will be assessed in the Objective Tests and Case Study exams be helpful?

The good news is, look no further than the ‘examination blueprints’.

How blueprints help students pass The examination blueprints, published annually, provide information about the format, structure, and weightings of our assessments. In other words, they help take the mystery out of the CIMA examination process and clearly articulate what will be assessed.

Complementing the syllabus for each exam, the blueprints provide: • Details of the competencies, skills, and knowledge expected of you during exams.

• Work-based tasks that you’ll perform in a real-world setting.

• Tips for preparing for the Objective Tests and Case Study examinations.

• Clarity on the approach and design of exams.

A detailed blueprint exists for each level: Operational Level – Companies will expect you to be able to leverage data and technology to translate concepts into short-term actionable plans. This level instills in you the specifics of what it takes to perform daily finance

passing four exams, you are awarded the part-qualified designatory letters ‘CIMA Adv MA’.

Strategic Level – Building upon previous studies and work experience, you master skills for decisionmaking and long-term business plans at this level.

You will need to cultivate a strategic mindset and be capable of advising fellow leaders, evaluating tactics and managing risks. The Strategic Case Study Examination is the final competency test in the CIMA’s CGMA Professional Qualification.

You are awarded CIMA membership and the CGMA® designation after completing this level and gaining the required experience.

professional functions. After completing the level, you are awarded the part-qualified designatory letters ‘CIMA Dip MA’.

Management Level – At this level, you will finetune the skills needed to translate long-term strategic decisions into medium-term plans.

You will learn strategies for using technology and analysing data to manage organizational performance, allocate resources and prepare clear and accurate financial statements. After

GET TECHNICAL There are now 17 articles in CIMA’s technical section of the study hub.

On top of a series of ‘how to pass’ features each OT paper has an article for students - for F2 there is a feature on foreign currency transactions, and the E3 piece looks at artificial intelligence.

For P1 CIMA has put together an article of digital costing, which looks at what it is and how to use it. There is also a discussion around costing digital products.

Check them all out at: https://hub.cimaglobal.com/articles/technical.

In addition to the technical articles CIMA has nine articles on exam technique and 16 on study support in the hub.

The institute has also reminded students they can avail themselves of one-to-one study support. The exam progression coaches are there to provide personalised advice specific to your circumstances. It could be help with your first exam, tips regarding a troublesome resit, or ongoing exam assistance.

CIMA wants to ensure that you have the right toolkits to progress through the qualification and pass your exams. For more information go to: https://hub.cimaglobal.com/support.

38

Tips for using the blueprints • The blueprints provide a link between the syllabus and the exams. It’s the document examiners use when setting exam questions. It articulates what will be assessed and therefore it’s the perfect document to review and identify knowledge gaps.

• Blueprints are available online to download.

• Blueprints for the Objective Tests offer task statements and include a checklist to ensure you are confident you’ve covered everything before your exam day.

• With the Case Study examination blueprint, you will complete core activities and role simulations to grasp real-world experience and develop the mindset needed for the examination. Additionally, ‘I can’ statements will build your confidence in study preparation.

Topics across the subjects include a focus on digital transformation to keep the exams relevant and are updated annually to reflect this.

Using the examination blueprints as an integral part of your study preparation leads to exam success. Make sure to make the most of them!

• Mark Foley, Director of Relationship Programmes – Management Accounting at the Association of International Certified Professional Accountants, representing AICPA & CIMA PQ Magazine September 2022

careers PQ

Dear Karen Ask PQ’s very own agony aunt Karen Young when you need advice from a real expert.

Email your dilemma to graham@pqmagazine.com, and he will pass on the best ones to Karen THE DILEMMA I’m looking to develop my skills and understanding of the industry – do you have any advice on how to best go about this?

CFOs expect a recession Deloitte’s latest CFO Survey captures the latest sentiment among the UK’s largest firms, against a backdrop of historic UK inflation and the sharpest tightening of monetary policy since the 1980s Amid rising inflation and intensifying economic headwinds, finance leaders assign a 63% probability of a recession within the next year, according to Deloitte’s UK CFO Survey Q2 2022. Over two-thirds (68%) believe high inflation will continue – anticipating it to remain higher for longer – and to exceed economists’ expectations.

Some 86% of CFOs now expect inflation to exceed 2.5% in two years’ time (up from 78% in Q1).

More than a third (39%) think inflation will settle between 2.6% and 3.5% in two years’ time and almost half (47%) expect it to remain above 3.5%.

CFOs’ expectations for interest rate rises have also sharply increased. They now anticipate

rates to double over the next 12 months with the Bank of England’s base rate reaching 2.5% in a year’s time.

Deloitte chief economist Ian Stewart said: “CFOs of the UK’s largest companies are braced for a recession. Finance leaders have edged towards more defensive balance sheet strategies, particularly cost control and building up cash. Yet CFOs are not in batten-down-the-hatches mode. Risk appetite is only slightly below average levels, and well above the lows seen in the financial crisis, at the time of the EU referendum and the pandemic.”

In brief

KAREN’S RESPONSE It’s a fantastic mindset to endeavour to be a ‘continuous learner’, whether that’s completing your final exams to be a fully qualified accountant or developing your competencies or soft skills.

Being committed to your professional development will of course serve you well by improving your performance.

If you are looking to move roles, be sure to highlight this commitment in your CV and in interviews, demonstrating how and in what areas you have shown dedication to upskilling.

Be sure you know the right areas to upskill in. I would recommend doing research, by speaking and listening to others in the finance industry and ensuring you know where your role and profession is headed. Upskill in those areas that will help make you invaluable to an organisation as it grows and moves forward in this new era.

Take advantage of all the learning, development, and training opportunities currently on offer in your organisation. Whether that is completing your ACCA or partaking in internal soft skill development programmes, such as enhancing presenting skills or management training.

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

PQ Magazine September 2022

Pap Insolvencies on the rise The number of UK companies filing for insolvency in the last quarter was the highest in 10 years, as business struggled without Covid support.

The Insolvency Service revealed that, between April and June, 5,629 companies became insolvent – that’s 13% higher than in the same period last year.

You have to go back to the third quarter of 2009 when more companies went bust. Of these insolvencies, 90% were creditors’ voluntary liquidations, when directors start winding down their business. The Insolvency Service said it had not seen this number of CVLs (4,908) in a quarter

since it started recording such data in 1960.

Pap Oil companies ‘immoral’ UN secretary-general António Guterres has accused the oil and gas companies of “grotesque greed” and has called on governments to impose a windful tax on their profits.

Guterres said the industry’s record profits were being made “on the backs of the poorest” and were “destroying our only common home (the planet)”.The UK government has already imposed a 25% windful tax on the profits made by oil and gas companies. It is expected to raise £5 billion in the first year.

Pap No anonymous reviewers Glassdoor, which has 600,000 anonymous company reviews on its website, may have to reveal users’ details. A court in California has ordered Glassdoor to hand over the identities of reviewers who made scathing comments about New Zealand toy company Zuru. The judge rejected arguments by lawyers for the employer-rating site that it was legally allowed to protect the identities of posters. Zuru wants the identity of the six posters so it can bring a defamation claim.

Glassdoor says that even if lawyers make a request it would not provide this information. That may need to change now.

The PQ Book Club: books you should read How The Future Works: Leading flexible teams to do the best work of their lives by Brian Elliot, Sheela Subramanian and Helen Kupp (Wiley, £22.99) The authors explain the way we work has changed. The era of toiling nine-to-five for five days a week in the office is a relic of the past, and is being replaced by a better way – flexible work.

But flexible means a lot more than a day or two a week WFH. They point out that 93% of employees want more flexibility in when, not just where, they work. They want choice and they are leaving their jobs if they don’t get it to work for someone who does!

Elliot, Subramanian and

Kupp believe the most successful leaders will go much further than offering occasional remote working days – they will redesign every aspect of how the work gets done, from defining how they measure success to training their people to make it happen.

On offer here is a blueprint for using flexible work to unlock everyone’s true potential. It will mean bosses having to let go but in response they will get “more back than they thought possible”.

Some companies were ahead of the curve. Dell have a flexible, outcomes-based approach to working, which they call Connected Workplace.

This was a decade before the pandemic. It says “work is not a time or a place; it’s the thing you do”. More will need to follow!

They conclude by explaining flexible work can make a big difference in people’s lives, which it really can.

PQ rating: 4/5 The authors provide lots of practical examples on why flexible working is the way forward. The future of work does seem to be at a crossroads, my worry is we seem to be slowly moving back to the office.

39

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

A poem to audit!

Someone kindly sent us a poem about audit that was reproduced in the Brydon Report. It is taken from the 1951 edition of the Accounting Review, and it appears nothing changes: The Accountant’s Report We have audited the balance sheet and here is our report: The cash is overstated, the cashier being short; The customers’ receivables are very much past due, If there are any good ones there are very, very few; The inventories are out of date and practically junk, And the method of their pricing is very largely bunk; According to our figures the enterprise is wrecked…

But subject to these comments, the balance sheet is correct.

FCA tells IT industry to ditch offensive language In what has been criticised as more ‘wokeism’ (the story was in the Mail on Sunday), the Financial Conduct Authority has reportedly told IT workers to stop using terms like master, slave, black hat and blacklist. The FCA regulates more than 50,000 finance service companies and its latest guidance says IT departments need to start using alternative phases that are ‘more inclusive’.

In the IT world ‘master’ and ‘slave’ describe a device or process – the master controls another device, hence the slave.

The FCA believes these to be pejorative words and believes the terms ‘primary’ and ‘secondary’ are better.

The FCA said as language evolves, so should the IT industry. Makes sense.

How does the fax work?

Who would have believed it, but Generation Z employees (18 to 24 year olds) are suffering from burnout because they are struggling to work with old technology, such as faxes, telephone systems and photocopiers.

In this reversal of roles, the Baby Boomers are at home with these clunky outdated office and factory machinery, and are the go-to experts.

A study by Asana, a workplace management platform, found 84% of young respondents admitted feeling exhausted and frustrated with all the old technology at work.

Asana’s Simon O’Kane said that Gen Z are particularly sensitive to the impact of outdated equipment in the workplace, because they value modern technology so highly. Many are demotivated using cumbersome machines and want employers to look at more efficient processes and modern technology.

’ WEV E

UK’s biggest money-

laundering case A UK National Crime Agency investigation has led to the head of a £100 million moneylaundering operation being jailed for over nine years. UAE national Abdullah Mohammed Ali Bin Beyat Alfalasi ran an operation through Heathrow airport, smuggling cash for drug dealers.

Banknotes were vacuum-packed into suitcases and then coffee-scented to put off any airport dogs who can smell money!

Once in the UAE the money was converted into cryptocurrency and invested in African gold.

During the case we discovered that £500,000 weighs about 40kg! That was how much each courier was asked to carry through customs.

Payroll malfunction Next has been forced to apologise to staff for underpaying them for months because of a ‘payroll malfunction’.

The retailer outsourced its payroll to US tech company Oracle in February, and issues since then have meant some staff have been underpaid by as much as £200 a month.

In the past Next designed its own software, and it has struggled to integrate Oracle’s software with its set-up. To sort the problem the firm has reportedly created a dedicated team to spot errors and pay the missing money to workers.

GOT THE L OT

Power of Geography We gave Tim Marshall’s ‘Power of Geography’ five stars out of five in our PQ Book Club Review last month, so we thought only fair to give you a chance to win a copy. Marshall explores 10 regions that are set to shape global politics in the new age of great power rivalry. We couldn’t put this book down!

To be in with a chance of being sent one of three copies simply email us at giveaways@ pqmagazine.com with your name and address and we will put you in the hat for a chance to win this prize. Head up your email ‘Power of Geography’.

More from the PQ Book Club We have another four very different books to give away this month, all of which have been reviewed for the PQ Book Club. First up is ‘Uncommon Accountability: A Radical New Approach To Greater Success and Fulfilment’ by Brain Moran and Michael Lennington. We also have ‘Leading Wisely’

by Manfred Kets De Vries; ‘The Great Lockdown: Lessons Learned During The Pandemic’; and ‘Sort Your Brain Out’ by Dr Jack Lewis and Adrian Webster.

To win one of these books in our PQ Book Club luck dip just send your email headed ‘Lucky dip’ to giveaways@pqmagazine.com, along with your name and addresss.

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 23 September 2022. The main draw will take place on Monday 26 September 2022.

TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM 40

PQ Magazine September 2022