PQ magazine, September 2024

September 2024

THE AI TRAILBLAZERS

Accountants and bookkeepers have emerged as the new AI trailblazers, adopting the technology at a much faster rate than any other sector.

New research from Sage and ACCA, along with cross-party thinktank Demos, reveals artificial intelligence adoption among accountants is set to double in the next five years.

And it has been estimated that the widespread adoption of AI by UK accountancy practices will add £2 billion to the UK’s GDP and create nearly 20,000 jobs.

The researchers also believe these AI-enabled practices will hire 10 times more employees and triple their revenue growth, compared with non-users.

The report found that accountants are technology optimists, with 61% of those surveyed believing AI creates more opportunities than risks. Some twothirds of respondents (68%) also felt confident that they will be able to

adapt to AI.

Sage’s Aaron Harris felt AI is no longer a futuristic concept. He said: “From chatbots that enhance client communication to automation of routine tasks like processing invoices and generating data insights to improve cash flow, AI is set to become a driving force of growth within the industry.”

Harris pointed out that AI’s benefits go beyond productivity and can reduce workloads, improve well-

being and increase job satisfaction.

Ultimately, Harris felt the move to AI will attract new talent to the profession and help address current skills shortages.

To help achieve the potential of AI, all three organisations are now calling on the UK government to implement four key policy initiatives:

• Invest in boosting AI skills across the industry through a larger, long-term AI Skills Fund and reformed Apprenticeship Levy.

Extend the AI Skills Fund to last five years to support a transition to effective implementation of AI.

• Extend full expensing of capital investment to digital technology. This would allow businesses investing in digital tech, like AI tools, to reduce their tax bill by 25p for every £1 invested.

• Introduce e-invoicing to support Making Tax Digital. The government should collaborate with the private sector to enhance productivity, reduce late payments, and boost international trade through e-invoicing, which also provides real-time data for better AI solutions.

• Establish a supportive regulatory framework. The government, regulators, professional bodies, software developers, and accountants should collaborate to create strong standards and ethical principles for AI use.

ISLAMIC FINANCE CAN SAVE WORLD

Unleashing the potential of Islamic finance will help us achieve the increasingly challenging United Nation’s Sustainable Development Goals (SDGs), says a new report from the International Federation of Accountants, Malaysian Institute of Accountants (MAI) and the World Bank.

The worldwide economic downturn, resulting from the Covid19 pandemic, has worsened the already significant $4.2 trillion funding gap to achieve the 17 SDGs. As countries strive to finance the ambitious scope and scale

of the SDGs they also face the complex task of serving financially underserved communities.

The report states that a major tenet of Islamic finance is to protect people, planet and prosperity, and this underpinning can contribute to fresh thinking on sustainable development paradigms, interpretations and approaches. The SDGs also create opportunities for Islamic finance growth, just as Islamic finance can drive greater sustainable development.

Advancing Islamic finance has the potential to not only

to serve usually under-banked Muslim communities, but have a broader application considering its synergies with the SDGs.

The IFA emphasised that Malaysia has become a pioneer of Islamic finance, attributed in part to its strong governance, supportive regulatory ecosystem, and the pivotal role of a local professional accountancy organisation, MIA, in education and stakeholder outreach. “Though every jurisdiction’s use of Islamic finance would work differently, Malaysia and MIA can serve as examples to

learn from,” says the report.

IFAC President Asmâa Resmouki stressed: “Professional accountancy organisations are playing a key role in advancing sustainable financing, and given the profession’s commitment to support the SDGs, principles of Islamic finance should be considered a viable approach.

“We encourage all IFAC members to look towards best practices such as those cultivated in Malaysia, and seize opportunities presented in their own jurisdictions.”

WIN AN AAT SCHOLARSHIP

PQ magazine and e-Careers are offering a scholarship every month for the next six months to a lucky AAT student trying to get qualified!

Easily create accurate practice exams with Rogo’s question types, matching the new formats from AAT assessments.

IN THIS ISSUE

Welcome to the latest PQ magazine, with all the exam pass rates your heart could desire.

We always make a point to publish these in the magazine, so you can benchmark your body’s performance against the other professional bodies –because pass rates are not just about you!

In truth, the pass rates should be easily accessible, and the first thing prospective PQs see, but they are sometimes hard to find. And someone more cynical than me might say some of the bodies appear to be actually hiding them. Well, they can’t hide them from us!

PQ magazine has always been prepared to put its head above the parapet. For many years we have been calling for mandatory ethnicity and disability pay gap reporting. The new UK government has said it is now introducing mandatory reporting for companies with over 250 employees.

Our columnist Lord Sikka has also pushed for full disclosure, and he reminded us recently how PQ has helped to champion the publication of these pay gaps, and we call on the professional bodies to follow suite.

The accountancy bodies must emulate what is happening and publish their pay gaps to have any credibility, even if they have fewer than than 250 employees.

Happy reading.

Graham Hambly, Editor and Publisher, PQ magazine

5 CIMA May 2024 pass rates

CGMA case study pass rates looking much better than February’s results 6 Corporate governance ARGA finally set to replace the Financial Reporting Council 8 ICAEW exams

Does whether you pass your exam depend on where in the world you sit it?

9 IAS 21 amendments IASB changes reflect issues around accounting for hyperinflation

CIPFA exam results

Pass rates for the summer sitting were a mixed bag

health Crisis among young UK workers threatens growth plans

turning to online platforms to learn workplace skills

your say

ICAEW’s ID process is adding to stress levels; and why Karen’s got it right about job interviews. Plus our social media round-up

Study advice

Doing mock exams massively increases your chances of passing the real thing

18 AAT Q2022 pass rates

The pass rates have landed – so which are the ‘hard’ AAT assessments?

19 AAT INAC exams

Cath Littler on why your writing skills are key to passing this paper

20 CASSL in action

London-based students enjoyed a big night out – we’ve the pics to prove it!

22 AAT level 2

Teresa Clarke offers some advice on how to ace questions on the accounting equation

23 CIPFA spotlight

Have you got what it takes to step up as a CFO in the public sector?

24 IFA spotlight

Want your career to take off? Then become an ATOL Reporting Accountant via the IFA

25 ACCA SBL exam

In part 3, Chris Cain looks at the ‘7Ps’ – we are talking marketing mix here

26 Social mobility

Access Accountancy’s Sharron Gunn discusses how the organisation works to improve social mobility within the profession

27 CIMA spotlight

Planning how you study is a vital ingredient of exam success

28 ACCA AFM exam

Andrew Mower explains recent changes to the AFM formulas

29 ACCA exam tips

Our experts pick some topics likely to feature in the September exam sitting

36 AAT exams

Karen Groves explains how to approach mark-up and margin questions and tests your knowledge of the subject

38 ACCA spotlight

Employers are recognising the value of the neurodivergent talent pool

39 Careers

Why generative AI could widen corporate inequalities; our Agony Aunt’s advice on new job nerves; and our Book Club review

40 Fun

The lighter side of life – and accountancy

The columnists

Lisa Nelson Don’t underestimate the importance of soft skills 5

Robert Bruce Why partners just love the whiff of cash 6

Prem Sikka Thames Water is using every trick in the books 8

Anna Kate Phelan The value of inclusive exams 10

Eddie Herbert Helping accountants with their Net Zero ambitions 12

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LISA NELSON

The power of human skills in finance

Skills are high on the political agenda, with the Skills England bill announced in the King’s Speech in July. Skills England, the government says, will seek to boost skills training and tackle skills shortages to support sustained economic growth.

You already know that mastering technical skills, such as preparing financial statements, calculating NPV or tax planning, are essential for a successful financial career. But how about communication, adaptability and leadership skills? Human skills, such as these, can transform you from a competent accountant into a standout finance professional.

Imagine presenting a complex financial report. Your technical skills ensure the numbers add up, but what about your ability to convey those numbers in a clear, engaging manner? That’s what will get the attention of your audience.

So, how can you develop these crucial human skills alongside your technical skills? Start by observing more experienced colleagues. Ask to sit in on their meetings to gain insights into the techniques they use for simplifying complex information and storytelling. Seek out opportunities to practise these skills yourself. Ask for informal feedback from colleagues and managers – don’t wait for your organisation’s formal annual review process to find out where you could improve.

So, while you’re working towards your next set of exams, don’t forget to develop your human skills. They might be the edge you need to turbocharge your career.

Kaplan

Free pre-seen mock for SBL

PQ magazine has joined forces once again with top tutor Chris Cain to offer you access to a free ACCA SBL mock exam.

Tailored to the September exam, the practice paper will be uploaded on 24 August. You can even get it marked for a small fee. For more go to page 9, or simply send an SMS to +07973 508793.

Newly qualified Nadya Olath used the service and passed her SBL exam first time with 74%. She

CIMA pass rates are ‘back up’!

The May 2024 CIMA’s CGMA case study pass rates are out, and looking much better than February’s results.

Still slightly below its normal average, the Operational case study pass rate this time around rose four percentage points to 63%.

The Management Case Study for May was a healthy 66%, up six percentage points on February, and

the Strategic pass rate was 57%.

Stephen Flatman, Vice President – Examinations, Management Accounting at AICPA & CIMA, said:

“I am delighted to see an increase in the number of our students successfully achieving the standard required to pass the May 2024 Case Study exams.

“I know how hard you work to master the demands of the CGMA professional qualification, your perseverance and commitment have clearly paid off –

congratulations.

“Before you continue your CGMA journey, I encourage you to take a moment to look at your detailed exam performance feedback, as it provides valuable insights into both your strength and improvement areas. And, of course, the CGMA Study Hub, which provides a range of free, carefully curated content to support study, revision and exam preparation, is always available to help boost your knowledge and skills.”

CIMA CGMA CASE STUDY PASS RATES

We need more accountants!

The accountancy industry is facing an ‘existential’ global crisis as firms are stricken by skills shortages. The Accounting Talent Index, a new study from Advancetrack, has revealed 74% of accountancy firms have been ‘significantly’ or ‘severely’ affected by a lack of accountants on the market.

The report found that the

reasons for the shortages ranged from more competition for talent from commerce to fewer people attending and graduating from university. You can add the Covid19 pandemic and an ageing workforce into the mix, too.

Advancetrack’s Vipul Sheth said: “Our Accounting Talent Index shows how the acute lack of accountants has emerged as a

critical bottleneck, and its impact has been nothing short of severe, impacting businesses, institutions and economies on a global scale.

“While the solutions are not exhaustive, or all yet identified, significant strides can be made by investing in the development of accounting talent, rethinking recruitment approaches, and promoting the essential role of accountants in supporting economic stability.”

The Advanced July exams were…

Time management was the key for those trying to pass the ICAEW Corporate Reporting exam this July. Many Advanced Level students just felt they were playing ‘catch up’ in the exam. The problem was the lack of direction, and just understanding what the examiner wanted.

Other sitters found Q3 ‘so

said on LinkedIn: “A big thank you to First Intuition and their tutors for all the tuition, Tom Clendon for SBR, and finally Chris Cain and PQ magazine for SBL support.”

BPP for sale

TDR Capital is reportedly selling its professional training course business BPP for a reported £2.5 billion.

The private equity firm bought BPP for less than £700 million some

hard’, and many thought the AI question was all a little basic –“ You could have read a brief summary and answered the question” said one sitter

The appearance of cash flow after an absence of a few years caught others out. One sitter admitted: “It threw me off massively.”

Most sitting Strategic

three years ago, and according to experts the business is likely to be sold to another private equity firm. Bankers Houlihan Lokey and Morgan Stanley have been brought in to help with the sale this summer. BPP was founded in 1976 by Alan Brierley, Richard Price and Charles Prior to provide accountancy training to accountancy students.

Business Management thought the exam was OK, although some struggled again timewise.

One sitter, however, thought it was ‘terrible’, and another said the interest rate swap with FOREX was just ‘cheeky’!

The overall the consensus for the Case Study exam was that it was a good paper.

ACCA reminder: AFM formula sheets change

From September 2024 exam session onwards, the ACCA AFM formula sheet has been amended to include a rearranged version of the Modigliani and Miller (M&M) proposition 2 formula.

PQ magazine is on the case, of course! We have top tips for the September exams in this issue, and Andrew Mower runs through the changes and what they mean for AFM sitters. See page 28

Lisa Nelson is Director of Learning at

ROBERT BRUCE

When greed isn’t good

Beware accountants when they get a whiff of money. We are coming into that part of the business cycle when partners in the big accounting firms start to feel uncomfortable and think they should be able to lift not just huge amounts of earnings out of the firms but also perhaps slip a large slice to private equity pirates who might pay them even more.

It wasn’t ever thus. For years people in the largest firms were content with their remarkably remunerative life. There would occasionally be outbreaks of ‘merger-mania’. I know someone who started their career at the profoundly Scottish firm of Arthur Young McClelland Moores & Co. These days it is represented by the Y in EY. The outbreaks of fee-destroying upheavals turned up again a couple of years ago when a plan called Project Everest sought to split EY’s consultants and auditors. It collapsed in acrimony. This is how it works. The partners pull in fat earnings. There are occasional disputes when working partners try to curb the pensions of retired partners. But it all chugs on until another upsurge of unsettled partners who have got a whiff of even more cash. This time it is the idea that they could flog chunks of the firms to private equity. Buyout firms hover. Audit independence is endangered. Regulators worry. Reputational risk multiplies. It will all end in tears –again.

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

The ultimate accountancy course finder

Looking for an AAT, ACCA or CIMA course? Well, look no further – PQ magazine have done the hard work for you!

Check out our Course Finder page at www.pqmagazine.com, where we have all the colleges that go that extra mile for you. Just click on the ‘Course Finder’ bar at the top of the home page and you will find our list.

We have worked closely with

New sheriff in town

The Financial Reporting Council (FRC) has welcomed its own demise, as the UK Government announced long overdue legislation to modernise its powers and strengthen the transparency and integrity of the UK’s corporate governance, financial reporting and audit.

The Draft Audit Reform and Corporate Governance Bill will put the FRC on a statutory footing through the establishment of the Audit, Reporting and Governance Authority (ARGA), and was one of the first bills in the King’s Speech.

FRC CEO Richard Moriarty said:

“The FRC has transformed in recent years into a more robust and effective regulator. But despite this

Mindfulness works

Students who undertook an eightweek mindfulness course to reduce exam stress are still benefiting from it a year on, according to a study of University of Cambridge students.

For the study nearly 700 students were monitored, half of which took hourly mindfulness sessions with a professional tutor. A year later the researchers returned to find these students continued to benefit from the mindfulness programme, when compared with standard support.

Cambridge University’s Julieta

Galante said: “Our study shows that the provision of mindfulness training could be an effective, and cost-effective, component of a wider university student mental health strategy. However, this only applies to group-based interactive mindfulness courses taught by a qualified mindfulness teacher.”

She felt learning mindfulness from an App is very different from working with a teacher.

Galate also stressed that the course has no effect on pass rates.

progress, there are serious gaps in the regulatory toolkit that have long been identified as being in need of reform so we can act fully in the public interest and support growth and the ability of companies to attract the capital they need. Without these changes we are the regulatory equivalent of being a sheriff for only half the county and with weaker powers than are needed.”

ICAEW CEO Alan Vallance agreed: “More than six years on from the collapse of Carillion we are delighted that the new government has named legislation to reform corporate governance and audit as one of its priorities for the next parliament.”

She explained: “Mindfulness seems to be good for stress, but the concentration skills do not seem to apply to academic performance, and there surely are other factors at play.”

Get your AAT scholarship here

PQ magazine and e-Careers are making another free scholarship available this month to AAT students. All you need to do is drop us a line about why you think you should win the scholarship.

Send your entry to scholarships@e-careers.com, along with your full name and the level you want to study.

The scholarships have been created so that AAT’s struggling

these colleges, some for more than 20 years. And we believe they can get you from PQ to NQ!

The AAT pass rates are…

How did AAT sitters do in 2023? The pass rates are out and there are some big differences in the UK and rest of the world pass rates. For example, the UK pass rate for Internal Accounting Systems and Controls assessment was 66.7%, but for the rest of the world it was just 24.1%. Although the numbers

sitting are very different, AAT must be concerned with the 15.6% pass rate for Credit & Debt Management paper.

Check out all the pass rates on page 18

ACCA exam reflections How do the Summer Olympics in Paris relate to your accountancy exams? To find out you need to check out the new

with the cost-of-living crisis can still get qualified.

PQ magazine editor Graham Hambly is on the judging panel to help award the scholarships and the winner will be announced in the magazine next month.

Once entered you will be put forward for the scholarship each month. So, if you don’t win it this time there are still other chances to win.

ACCA podcast series, ‘Exam reflections’, with Paul Merison and David Laws from LSBF.

Together they explain how reallife business stories can help you to pass your exam papers. So what impact does the Olympics have on ‘stakeholders’?

We are talking the Mendelow Matrix here.

Check out the episode 1 at https://tinyurl. com/6c9j4wdn

PREM SIKKA Thames Water using every trick in the books

Thames Water, the poster-child of predatory capitalism, has published its financial statements for the year 202324. It reported earnings before interest taxes depreciation and amortisation (EBITDA) of £1.208bn and operating profit of £445m.

It incurred a £906m finance expense to service its £16bn debt, nearly 38% of its underlying revenue, which is unsustainable. Its financial position has become more precarious as its net cash flow declined from £1.83bn to £1.154bn. It has used up £2.2bn revolving credit facilities and term loans. Debt repayments loom.

The company soothes public anxieties by claiming that it invested £2.084bn in infrastructure during the year. However, this isn’t true as numbers are inflated by financial engineering. For example, it capitalised £159.4m of interest payments, compared with £215.2m for the previous year. Unspecified amounts of repair and maintenance costs have also been capitalised. The capitalisations inflate the company’s distributable reserves. Despite financial problems, it paid £195.8m in dividends.

Regulator OFWAT uses the peculiar asset/debt ratio to measure gearing and financial resilience. On that basis Thames has a gearing ratio of 80.6%, well above the 55% ratio targeted by OFWAT. The traditional equity/debt measure gives Thames a gearing ratio of 1,000%. It survives because it is able to milk captive customers.

Thames’ shares have largely been written off by its major shareholders and most of its debt has junk rating. How long can it survive?

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

Tax briefs

HMRC collects record tax revenue

HMRC generated a record £843.4 billion in tax revenue for the Exchequer, an increase of 3.6%, according to the annual report and accounts for 2023–2024.

That equates to bringing in more than 95% of the tax revenue due, and means it costs around half-a-penny for every pound collected.

The revenue was able to protect £41.8 billion by tackling avoidance, evasion and error, including £13.7 billion by promoting compliance and

Does your ICAEW result depend on where you sit?

The latest ICAEW Professional exam result reveal the big differences in the pass rates of those sitting in Europe versus the rest of the world.

For example, while the pass rate for the Business Strategic & Technology paper this June was 90.6% in Europe, it was just 32.3% for the 99 students sitting elsewhere.

The difference was also over 30 percentage points in Tax Compliance (78.4% v 44.3%).

However, in most of the other papers the rest of the world pass rate is around 20 percentage points lower. It should be noted that while

the numbers are statically small, they still represent real people trying to gain their ACA.

Most sitters opted to sit two

Time to cut up your textbook?

Is it time that you cut up your accountancy textbook? Well, accountancy exam guru James Perry says the answer is definitely yes, and his tip went viral in Ireland.

He explained that you need to:

• Get out your textbook.

• Cut off the spine.

• Hole punch the pages (much neater if done in a publisher/ printer/stationery shop.

• File in a Lever Arch file.

Once in the file you can add handwritten notes to the relevant sections/chapters, along with examstyle questions, past papers and examiner comments.

You then have a comprehensive file

exams this session, with 74.4% passing both papers. Another 566 sitters passed one of the two they sat, and 307 (8.9%) failed both. Some 1,200 students sat three papers in June, and 75.7% passed all three. Just 42 students failed all three.

It is a different story for those opting to sit just one paper – with 73.2% passing, but 769 (26.8%) failing.

ICAEW PROFESSIONAL EXAM RESULTS JUNE 2024: AA 83.8%; FAR (IFRS) 83.2%; FAR (UK

system all nicely organised, with everything side-by-side.

Perry feels that this will stop you constantly flicking between pages and looking for information filed elsewhere.

He said; “Adapt this approach in your revision and question phase and watch the efficiency of your studies skyrocket.” You can follow him at #jptips.

Record recruitment at Armstrong Watson

Armstrong Watson has recruited a record number of graduates this year. In all, 37 new graduate trainees have been welcomed to the Cumbria-based accountancy firm, that is up from the 28 recruited in 2023.

Among the 37, who will all study the ACA qualification, are three former trainees who progressed via AAT apprenticeships.

preventing non-compliance before it occurs.

Budget date and cuts confirmed

UK Chancellor Rachel Reeves has announced that Wednesday 30 October will be the date of her first Budget.

And, from the despatch box, she repeated the Labour Party promise not to increase National Insurance, the basic, higher or additional rates of income tax, or VAT for the duration of this parliament.

Armstrong Watson’s managing partner Paul Dickson said: “We

Reeves has also announced spending cuts of £5.5 billion this year and over £8 billion next year, to address a projected £22bn hole in the public finances.

VAT reg Estimator launched

HMRC has launched a digital tool to help businesses estimate what registering for VAT may mean for them.

The VAT Registration Estimator has been developed after feedback from small businesses suggested an

have a long history of growing our own talent and strongly believe in investing in our people as our people are our business, providing solutions to our clients.

“With 19 offices across the North of England and Scotland… there’s a huge range of scope for career direction and development available to those who choose to join us on this exciting journey.”

online tool would be helpful to show when their turnover could require businesses to register for VAT and its effect on profits.

A business must register for VAT if:

• Their total VAT taxable turnover for the previous 12 months is more than £90,000.

• They expect their turnover to go over the £90,000 VAT thresholds in the next 30 days.

• They are an overseas business not based in the UK and supply goods or services to the UK –regardless of VAT taxable turnover.

IAS 21 amendments

The International Accounting Standards Board (IASB) has published proposals to address the accounting issues that affect companies that translate financial information from a nonhyperinflationary currency to a hyperinflationary currency.

These proposals, which are narrow-scope amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates, introduce

translation requirements for these companies.

The IASB expects the proposed translation requirements to improve information for users of financial statements while being simple and cost-effective for companies to apply.

In a hyperinflationary economy, financial information is useful only if it reflects a measure of current purchasing power of the currency.

Applying IAS 21 today does not always result in that outcome and in some cases has led to diversity in accounting practice.

Benefits of the proposed amendments include:

• More consistent and useful information in financial statements presented in hyperinflationary currencies.

• Removal of diversity in accounting practices related to translation into a hyperinflationary currency.

• Improved comparability of financial statements among companies and jurisdictions.

• Simpler and low-cost accounting requirements for affected companies.

Barnsley CIMA student reprimanded

The Centre for Public Interest Audit created

A standalone voice for audit has been created by the ICAEW and ICAS. The Centre for Public Interest Audit (CPIA) aims to bring together auditors from across the profession to shape best practice, drive quality and increase trust.

The CPIA wants to become a standalone voice on behalf of public interest entity auditors, offering clearcut recommendations for areas of development and improvement.

Baker was sentenced to 15 months’ imprisonment,

CIMA’s investigation committee has found a prima facie case of misconduct against Brett Baker after he failed to declare a conviction within 30 days, as required by regulation 19. In 2019, Baker received a conviction for destruction/damage to property and assault resulting in actual bodily harm. He had previously been convicted of possession of an offensive weapon in a public place, all convictions relating to the same incident.

suspended for 18 months, 20 days of rehabilitation activity and 100 hours of unpaid work.

It was alleged that Baker’s failure to declare his convictions was ‘breach of the laws of the Institute’. The committee also felt his behaviour breach the fundamental

principle of Professional Behaviour under the Code of Ethics.

It was concluded that his conduct fell short of the standards required for a professional accountant. Baker accepted a Consent Order, which included a reprimand and a contribution of £456 towards CIMA’s costs.

Baroness Margaret Ford has been elected chair. She said: “Audit and assurance plays a critical role in the UK’s capital markets and the importance of tackling the most challenging areas of the industry cannot be underestimated. Our ambition is to proactively identify both shortcomings and best practice in public interest entity audit to support a more robust, resilient, forwardlooking profession… and enabling confidence among all stakeholders.”

Baroness Ford felt that the new organisation aligns with the UK government’s aim to strengthen regulatory powers with its upcoming Audit Reform and Corporate Governance Bill.

Pre-seen is pre-warned!

Download your free SBL pre-seen mock exam

PQ magazine has joined forces with top tutor Chris Cain, and together we have produced a free SBL mock exam based on the pre-seen for the September sitting.

To get access to download the mock exam for free simply, send an SMS to +07973508793

We will be uploading the practice paper on 24 August.

And, if you want to use our pre-seen for proper practice you can even have it marked for just £25!

You will need to send in your answer between 25 and 27 August for marking, and your paper and its mark will be returned to you on 28 August. The indicative contents answer only will be released on 28 August.

Good luck in September!

ANNA KATE PHELAN

The value of inclusive exams

Summer exam season is over, and hopefully you can breathe a sigh of relief and reap the benefits of all your hard work (and not have to re-sit!).

Your exams should have been designed in an accessible and inclusive manner. Inclusive design recognises the power of accommodating the diversity of human experience. Accessibility isn’t just a tick-box exercise; it’s a valuable framework that allows us to focus on a specific set of users, ultimately benefiting more people than you might anticipate.

Exam tools such as zoom, colour contrast and the ability to highlight/ strikethrough were initially developed to support candidates with accommodation requirements such as dyslexia. However, there is no doubt that these tools enhance the exam experience for many different types of candidates.

Another example would be designing for individuals with a disability that limits them to using only one arm. By doing so, you also design for individuals with a temporary arm injury and also for situational scenarios where someone has the use of only one arm, such as a new parent carrying a baby. Accessible and inclusive design is not only ethically conscious but can benefit us all in one way or another.

There are many resources online to learn more about inclusive design. Check out this interesting article in the Institute of Credentialing Excellence Journal – Eintech’s very own Ben Brady is a contributor (see https:// tinyurl.com/yc58dx6u).

CIPFA’s summer exam results are in

The latest CIPFA pass rates were a mixed bag this summer, with three papers coming in at over 87%, and one paper where just 12.94% of sitters passed.

The pass rate for those sitting June’s Governance and Risk Management paper was 87.36%, and for Management Accounting it rose to a healthy 87.14. The Tax and Law (international) pass rate was the highest this time around at 87.5%; however, just eight people sat the paper in June.

Audit and Assurance also jumped to just under 68% – it was 58.14% last December.

However, on the downside the Business Planning & Financial Management paper pass rates dipped from 78.57% last December to just 56.86% this

time. The Developing Strategy & Data Analysis pass rate also went the wrong way, and was just 53.79% for June.

The IPFM Governance, Public Policy & Ethics paper pass rate in December was 35.48%, and in June it rose to only 40.74%.

There was one paper where only 12.94% of sitters were successful.

Some 85 PQs sat the IPFM Public Sector Financial Reporting paper and just 11 walked away with a pass.

Back to basics – your free resource

Following the huge success of series one, we are developing a whole new series of Back to Basics videos. The simple aim of the series is to get the best tutors around to explain concepts students struggle with.

The winner of a 2024 PQ magazine editor’s award, Will Boardman, is the first to sign up for

series two. On his short video he explains the differences between a basic and actual tax point. Check it out at https://tinyurl.com/yee7js9d

We also have videos on doubleentry bookkeeping, assets and the trial balance. Some of these are slightly longer than four minutes!

Here a link to some of the other videos in the Back to Basic series:

What are qualifieds worth?

The average salary for an accountant in the UK last year was £35,500, according to Totaljobs’ Salary and Benefit Guide 2024.

Researchers found accountancy salaries grew by a healthy 5% in 2023 after stagnating in 2022. With wages finally going up,

AI for audit has arrived

KPMG International has said it is integrating generative AI into KPMG Clara, its global smart audit platform. The new AI will interact directly with audit engagement documentation and audit methodology, for both public and private companies.

KPMG explained with its new AI capability Clara will help teams refine risk assessments, develop substantive testing procedures and enhance audit documentation.

The Big 4 firm said: “By infusing AI through KPMG Clara, KPMG’s 90,000 global audit professionals will be empowered to focus more closely on higher-risk areas of the audit, sector-

some 76% of accountants said they felt ‘satisfied’ with their salary – a significant jump from the 65% in the previous year.

The average salary for accountants across UK cities varied considerably. In London the average was £44,500; in Edinburgh it was

specific risks and challenges – to the benefit of both stakeholders and capital markets.”

Gearing up for growth

CFOs of the UK’s largest firms are more optimistic about prospects for their own business following the election, according to Deloitte’s latest CFO survey. Sentiment has risen for the fourth consecutive quarter, with a net 23% of finance leaders more positive about the financial prospects of their businesses than they were in the previous edition.

Richard Houston, senior partner and chief executive of Deloitte UK, said: “We’ve seen a significant shift in risk appetite post the general election and the new government’s focus on growth and stability is already increasing

• Double Entry Bookkeeping with Tom Clendon: https://tinyurl. com/3v437cee

• Cost behaviours with Jo Tuffill: https://tinyurl.com/bdeu65wn

• Trial Balance with Michele Baker: https://tinyurl. com/4ufm8sbu

We recently moved all of our videos onto our YouTube channel. To check out the full playlist go to https://tinyurl.com/kt9tsecn

£36,000; and in Cardiff it was £35,500. In Belfast accountants received on average £33,800. However, the lowest salary on offer was in Sheffield, where the average pay was £31,000.

The two most attractive benefits accountants said they want to see in job specifications are flexible working and pension contributions above what is legally required.

corporate confidence.

“Business leaders want industrial strategy to be top of the new government’s economic priorities, and there’s a clear desire to work in partnership to unlock growth and drive productivity.”

EY moves to Cambridge Square

EY has moved into new offices in Cambridge as part of its continued long-term growth and investment in its regional business.

The new office at One Cambridge Square is located in the mixed-use urban Cambridge North development and coincides with the end of the firm’s lease at One Cambridge Business Park, where the firm has been based for two decades.

Anna Kate Phelan is Head of Product at Eintech

Mental health worries persist

The health crisis among young British workers threatens any UK growth plans, according to the Daily Telegraph.

It points to a PwC survey that revealed more than one million 18- to 24-year-olds are struggling with their mental health, which accounts for 22% of the Gen Z age group. This compares with an average of 8% across the rest of the population.

term impacts young workers felt after the 2008 financial crisis.

“There are huge social as well as national and economic benefits to taking action to decrease youth unemployment.”

£250,000

PwC’s chief economist, Barret Kupelian, told the Telegraph the Chancellor Rachel Reeves has no chance of hitting her growth targets unless she could solve the mental health crisis among Gen Z.

PwC research found that almost 50% of inactive youngsters said they would be more likely to return to work if employers offered more mental health support.

He said: “If the new Government is to realise its economic growth ambitions it will need to focus on young people to avoid the long-

One in five said that their condition was preventing them from pursuing their favoured career.

MSCA still helping students

MSCA Legacy Limited, the company formed in 2023 to distribute the endowment previously held by the Manchester Society of Chartered Accountants, has broadened its support to students at the Alliance Manchester Business School (AMBS), awarding a cash prize to a recent

graduate and providing bursaries and mentorship to three postgraduates.

MSCA Legacy awarded the David Illingworth Memorial Prize to Eve Moores, who graduated from AMBS this summer with a BA in accounting and finance.

The award was made in recognition

of her dissertation analysing the challenges facing the UK’s rail operating companies – she concluded that nationalisation would achieve the optimum outcome.

MSCA Legacy is also providing mentorship and bursaries to three PhD students at AMBS.

One of these students is researching ways that the best people can be recruited into the profession in the face the reputational damage done by audit-related scandals; another is looking at how accounting rules can best be applied internationally; while the third is examining the role of auditors in monitoring ethical issues.

The UK accountancy watchdog has fined EY UK more than £250,000 for breaches to the FRC’s revised Ethical Standards 2019, namely exceeding the 70% fee cap on nonaudit work.

The breach relates to the statutory audit of Evraz plc, for the year ended 31 December 2021.

The firm was also reprimanded. EY will also have to provide a root-cause analysis report identifying how the breach happened, and what the Big 4 firm is doing to make sure it doesn’t happen again.

Evraz is a multi-national mining group, headquartered in Moscow but incorporated in London and listed as a FTSE 100 company. Its shares have been suspended from trading on the London Stock Exchange since March 2022. EY UK had audited Evraz since it was listed in the UK in 2011 until its resignation as auditor in November 2022, following the imposing of new UK government sanctions against the Russian Federation in response to the invasion of Ukraine.

At Accountext, we specialise in creating study materials for self-study students, and for training providers who want to improve their AAT results.

That’s why we were so delighted to be shortlisted for Study Resource of the Year at this year’s PQ Awards.

And while we’re sure you’ll love our videos and e-assessments, (and tutors will marvel at the insightful reporting which makes the job easier) - it all starts with top-quality printed study books and question banks written by our team of experts.

EDDIE HERBERT Helping you on your Net Zero journey

Sharpening office skills through social media

In 2022 we launched The Net Zero Accountancy Initiative with industry partners ICAEW, ACCA, AIA, Good Business Charter and AAT to encourage the accountancy sector to operate more sustainably.

The initiative demonstrates how sector-specific carbon accounting can drive meaningful change in the accounting world.

One accountancy firm to join the Net Zero Accountancy Initiative was Bishop Fleming. Their progress shows how businesses can effectively integrate sustainability into their practices with the right support.

Ewan McClymont from Bishop Fleming praised our tailored approach: “Net Zero Now really understood our industry. They worked closely with the Institute of Chartered Accountants to develop a solution that fits accountants’ needs.”

Our user-friendly software and expert support helped Bishop Fleming accurately measure and reduce their carbon footprint. This hybrid model allows us to provide comprehensive guidance while offering a powerful platform for independent use as clients gain experience.

“Net Zero Now’s tools and expertise have been invaluable in our green journey,” McClymont added.“Their support has helped us turn sustainability into a core part of our operations.”

By embracing sustainability practices, accountants can offer valuable guidance on carbon accounting to their own clients. Net Zero Now remains committed to guiding firms like Bishop Fleming towards a greener future.

Our goal is to help them create lasting positive environmental change while adapting to their evolving needs.

Edward Herbert, Sales & Business Development Manager, Net Zero Now

Most UK workers (62%) have used social media or online platforms to learn new workplace skills, with 20% doing so regularly, according to new research by KPMG UK, which suggests employers must develop more interactive ways of delivering their own in-house learning.

olds have already used generative AI to learn new workplace skills, compared with only 15% of those aged 55-64, while 61% of all workers said they wanted specific training on how to use the technology.

Microsoft blames EU for outage

Microsoft has said EU rules enabled a faulty security update to cause the biggest worldwide IT outage. The tech giant explained that a 2009 agreement meant it could not make changes that would have prevented the CrowdStrike update triggering widespread chaos on Friday 19 July.

Microsoft has its own cybersecurity software in the form of Microsoft Defender, but in 2009 agreed to allow other security

The Big 4 firm surveyed 2,000 UK desk-based working adults from various sectors about the training offered by their employers and other learning avenues they used. The findings showed that often due to limited options, poor quality and lack of accessibility in workplace learning, many are taking control of their own training and seeking more interactive ways to learn.

Over half (56%) of all 18-24 year-olds and a third of 25-34 year-

Tackling cyber risks

The UK government’s proposed AI cyber code of practice is a useful starting point for a global regulatory approach, says ACCA. However, it feels industry experts are best placed to manage the emerging and evolving range of cyber risks.

ACCA has also called on the government to tackle the skills gap, so we can combat cyber security risks properly. It feels the Apprenticeship Levy could be

expanded to a ‘Growth and Skills Levy’ that is more flexible and can be used to fund shorter-term accredited training programmes that upskill and reskill workers on the cybersecurity of AI.

ACCA said companies should also be able to increase the proportion of their unspent levy funds to their supply chains. An increase from 25% to 40% is suggested. “This could unlock millions of pounds to develop AI

KPMG says successful employers are using internal social learning platforms such as Microsoft Viva Engage, SAP Workplace, Cornerstone and Degreed to deliver their training resources, as well as incorporating generative AI into learning programmes to meet this new demand.

skills,” the association claimed. And ACCA warned that if insufficient training is given then standards and frameworks will fail to achieve any impact.

Teams tying may break rules

The European Commission has told Microsoft that its preliminary view is that the tech giant breached EU antitrust rules by tying Teams to its popular applications for businesses, such as Office 365 and Microsoft 365.

The Commission is concerned that Microsoft may have granted Teams a distribution advantage by not giving customers the choice whether or not to acquire access to Teams when they subscribe to their software as a service (SaaS)

providers to install software on Windows, in an effort to allow competition.

However, Apple has not made similar changes, so Macs were unaffected by the outage. Apple has argued that allowing access to its iOS will lead to security risks in the future.

Sage unveils

Microsoft developments

Sage has announced a series of ‘advancements’ in its strategic

productivity applications. This advantage may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offerings. The conduct may have

partnership with Microsoft. Sage Instant Analysis will be leveraging Microsoft’s Azure OpenAI Service to help its customers gain better financial insights.

Workflows in Sage Network will now also include seamless integration with Microsoft Dynamics 365 and Microsoft 365. There are some enhancements in HR and payroll management, too.

Sage said the advancements combines its expertise with Microsoft’s robust technological framework.

prevented Teams’ rivals from competing, and in turn innovating, to the detriment of customers in the European Economic Area. If found guilty of an infringement under Article 102, the Commission can prohibit the conduct and impose a fine of up to 10% of the company’s annual worldwide turnover. The Commission can also impose any remedies that are proportionate to bring the infringement effectively to an end.

iPhone sales fall again

The sales of iPhones have fallen to the lowest level in three years as people wait for new models and sales drop in China. Apple reported a 1% drop in its quarterly revenue, down to £39.3 billion. However, the figures are better than expected, so on the announcement shares in Apple actually rose.

Sales in China dropped 6.5% as local rival Huawei successfully circumnavigated the US microchip sanctions to launch new phones

ID frustration

I am an ACA student and l have just sat an exam. The exam went as well as an online exam could go, although l had issues with accessing information from the bookshelf and the data analysis aspect for the same reason.

However, the main reason l am writing is the frustration l feel with the ID process – to take the exam you must show valid ID (which l did). Then a few weeks post exam l got a rather threatening email regarding ID, telling me that if l could not provide an email at a certain point then l would automatically fail.

l do not understand how it is

my fault if their systems do not work as they are supposed to. If they instruct us to use a predescribed manner to carry out a task and that same method is faulty then whose fault is it?

What is even more galling is that this is the second time this has happened to me. In fact, to avoid the same problem happening again l purposefully used another form of ID.

So, you can imagine how frustrated and angry l am because this is their fault and not mine. It is apparent to me their systems are not fit for purpose.

Even if a mistake has been made concerning ID the wording and the phrasing of the email could have been better, because such language is not only worrisome but it also causes unnecessary stress and tension.

Name and email address supplied

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

Interview overkill

Well done Karen Young for highlighting how employers should behave (PQ magazine, July 2024, page 19).

You say 73% of us accountants believe two interview rounds is enough. Well that’s true – any more and you run out of excuses for getting time off!

You also say many would wait a week before considering or accepting another job offer. That’s too long, I am not sure I would wait a week. I know sometimes interviews are spaced over a few days, but five working days should be enough. If it isn’t then they have interviewed too many people or don’t have the right people accessing the applicants.

The first interview should always be with the boss of the department. They will know straight away if the person can do the job and they can immediately assess if they can work with them.

Unfortunately, most of the people who have interviewed me don’t seem to have done their homework or been trained properly, and I seem to be just another task in their busy day. And yes, I have had someone actually take a phone call during one final stage interview!

Perhaps Hays could start some training programmes for interviewers.

Name and email address supplied

High ceilings –really?

I am not sure where PQ magazine finds some of its news articles. However, your ‘High ceilings equal lower marks!’ news story last

month made me laugh out loud. Did academics really get paid to go through 16,000 undergraduates results to help them discover that the height of exam hall ceilings affects exam results? So, it is nothing about the hard work and all those practice exams then. Or eating well and keeping hydrated. Really?

Name and email address supplied

There are so many good free resources on social media to help you pass. There’s also a lot of distractions that mean you can quickly fall down a worm hole. We recently listened to a great YouTube session on the best way to pass your exams with FI’s Ginny and Sarah, all about mocks. As Sarah explains, there is a strong link between the number of mocks you take and passing the real thing. In fact, there’s a 30% uplift in pass rates from those who do no mocks and those who do two. It’s a sweet little 10 minute watch. Check it out at https://tinyurl. com/2kp38nas

Don’t forget to check out Will Boardman’s YouTube channel if you are studying AAT. He has recently added Applied Management Accounting mock exam walkthrough (part 1/4). Check it out at https://tinyurl. com/yw25u593

We also love the free ACCA and CIMA resources on Open Tuition. Everyone would want Jill to be their ACCA tax lecturer! Check all the free resources at https://tinyurl.com/h4756prm There are an amazing 2,834 videos on the site, but it is well ordered.

Our very-own Back to Basic series is modest in comparison but still worth a look – https:// tinyurl.com/tyjry9z7. Check out our ‘Future of’ seminar series, too, where we look at the future of tax, audit and net zero. Among the Future of Audit speakers is Jon Lambert a partner at PwC (pictured), who gives a great insight into the profession.

The importance and impact of mock exams

Doing mock exams massively increases your chances of passing the real thing. Louise Grant explains why

Completing all of the mocks available to you in the weeks before an exam can be a laborious task, especially for the level 4 units where a mock may be three hours long. So how many should you be aiming to sit and how much difference will it make to your results may be questions you ask yourself while trying to decide if to watch the soaps then have an early night or sit down and commit to completing a mock.

As a student I asked myself those same questions many times; after a long day at work and family commitments in the evening finding the motivation and energy for mocks could be really tough.

Now as a tutor, with access to real data on the real impact of mocks, I will always encourage my students to sit every mock available to them and to do this with enough time to review their results and revise any areas where they have struggled.

The data shows a clear difference between students who complete the mocks and those who do not – for Business Environment at level 2 we can see that four out of five students who did not pass an exam had not completed a mock. The vast majority of students who did complete their mocks did go on to pass their exam.

This exam is the first time students will need to complete a written task, and as well as feedback on the computer marked questions we can see that students benefit hugely from feedback on their written answers. This feedback, which will be obtained through the completion of mocks, will enable students to learn from their mistakes and build on their skills and confidence. There is a general consensus that AAT students dislike the written tasks and this continues throughout levels 2, 3 and 4. Being able to work with a tutor and learn the skills needed and the approach to take with these tasks early on will ensure students are well prepared for the higher level exams such as Internal Accounting Systems and Controls, where the written tasks are the majority of the marks available. Students studying without a training provider may find it useful to find a study buddy; many students across the AAT social media pages do this and review each other’s answers.

Similar results can be seen across all exams at all levels.

We can clearly see that students who attempt the mock exams are better prepared, with repeated practice under exam conditions students are able to plan how to manage their time, allowing themselves more time for the tasks they find more difficult and ensuring they can complete the full exam in the

time allowed. Students can find completing individual tasks at different times manageable; however, they struggle to manage their time in exam conditions. Completing mocks in full in exam conditions, with books closed and phones turned off, will highlight this and enable students to prepare themselves in advance.

Students can find concentrating for the hours required to complete a mock quite difficult and may find it best to build their stamina up first, committing to smaller revision sessions and slowly increasing the time until they feel prepared to attempt a full mock paper.

Making errors in the mocks is an important learning process too, with both the calculation and written tasks, highlighting those areas where more revision is needed. Repeatedly practising and reviewing these tasks will improve the long-term retention of the information and skills needed for the exam. The process of reviewing your own answers and the model answers is just as important as completing the mock itself.

The AAT mocks not only provide valuable question practice they also help students familiarise themselves with the system layout, how to navigate between the tasks and use functions such as the highlighter and the reference material that is available as a pop-up for certain units.

As well as highlighting weaknesses mocks are also an important tool for improving a student’s confidence. Exam day anxiety affects many students and feeling well prepared and confident about what to expect in the live exam will improve the overall experience.

Therefore when preparing to book an exam students must ensure they have adequate time to complete all of the mocks available to them, with time to review their results and seek tutor support where necessary. While this may mean students take longer to complete each unit the data clearly shows this will increase their potential of passing the exam.

• Louise Grant, AAT Distance Learning Tutor at First intuition

AAT Q2022: the pass rates

The pass rates for Q2022 have landed – so which are the ‘hard’ AAT assessments?

AAT has released the CBA worldwide pass rates for 2023, and the Audit & Assurance assessment has the distinction of having the highest pass rate for Level 4, at 85.2%.

The Level 4 papers students seem to struggle with are Personal Tax (55.3%) and Credit & Debt Management (58.7%). The overall CBA pass rate for Level 4 was 64.6% for 2023.

The Level 3 pass rates all hovered in the 60%-plus range, except Financial Accounting, which had a pass rate of 55.6%.

The Level 3 CBA pass rate for the year was 67%.

Only Principles of Bookkeeping Controls stood out at Level 1 and 2, with a 67.5% pass rate. The other papers were all in the 70%-80% range. When it comes to the graded qualifications, distinctions were hard to find for those passing the Diploma in Professional Accounting. Just 2.3% were awarded a distinction and another 45% were awarded a merit.

Note: Pass rates are only published for assessments that have been available for at least 12 months or where there has been a minimum of 500 sittings.

Q2022 CBA PASS RATES

* The information in the above table refers to the pass rates based on the CBAs only and not achievements rates for the qualification. It is not possible for AAT to calculate and provide qualification achievement rates

GRADED QUALIFICATIONS

This is a summary of the grades awarded for each qualification between 1 January 2023 and 31 December 2023.

A matter of evolution

Cath Littler explains practising your writing skills is key to passing INAC. So, why are Mindful Education’s pass rates so high?

Ihave been seeing statements and articles about the INAC assessment recently that have surprised me, as the pass rates for Mindful Education (ME) learners have been high. Reviewing AAT’s published pass rates, ME’s results are about 25% higher than the AAT average – so how do we do it, and what do I think is going wrong elsewhere?

Evolution of systems/controls units

To understand the problem with INAC, we need to consider its evolution. Originally the unit was assessed through a workplace project or a simulated scenario. Students were supported by an assessor who then submitted results to AAT. The unit was rarely taught; textbooks were simply reference material.

However, before readers get excited and say, ‘let’s go back to that system!’, they should consider two things. Firstly, what accountancy student really wants to write a 2,000-3,000word report? Secondly, historically about 50% of students completed the project, less than are passing INAC now; let’s not go back to report writing.

Assessment of the unit was incorporated into the PDSY exam for AQ2016, yet I know from my quality assurance work that, initially, some training providers still did not teach the unit; they assumed that learners had sufficient knowledge of topics like the PO system for the exam. Much failure took place and the unit started to be taught for the first time in its history. Nevertheless, the focus of PDSY was always on the accounting scenarios required for the management and financial accounting elements of the exam.

Fast forward to Q22 and now we have the

first-ever stand-alone exam for the systems and controls unit and, perhaps predictably, some learners and providers are having issues.

How does ME deliver the unit?

ME delivers the unit through four online lessons which cover all the topics in the standard. The learners also attend classroom-based sessions where themes are discussed and reviewed. The online lessons not only discuss subjects like fraud, risk, SWOT analysis, etc., they go through each of the different control systems (like the PO system) in detail. These systems are analysed with reference to potential systemic weaknesses and the controls required to prevent the opportunity for fraud.

I firmly believe that robust processes that foil fraud protect staff in the same way that health and safety guidance does. This is partly because, when at a previous employment, an otherwise good, established staff member succumbed to the temptation to steal a small amount of alcohol daily from the bar. If better physical controls had been in place she would not have been tempted to take her daily short, consequently gaining a police record and losing her job and self-respect.

Key to ME’s success is, however, not in the delivery of information, but in the range of activities that learners undertake. As with PDSY, it is important that learners are exposed to a range of situations and scenarios to build experience and practice applying the required controls. Across the unit, learners are exposed to more than 30 scenarios they can analyse and write about. The aim is to make learners think. For each scenario there are detailed answers that students can use to develop their

application of knowledge. Additionally, there are assessment style questions covering all the assessable topics to aid exam preparation.

How can you prepare yourself for INAC?

To prepare yourself as a learner, identify scenarios and practise writing about how controls should be applied to different situations. Look at enough situations and you start to see similarities.

Try to spot the systems and controls around you. Once you are alerted to the elements of SOAPSPAM you see them in practice all around you – even if those applying the controls don’t know why they are doing it. Apply professional scepticism to situations and consider how an organisation might be defrauded – how high is the risk, what is the impact? For example, self-checkout tills have a high risk of shoppers deliberately committing fraud by identifying an expensive type of fruit or vegetable as, say, onions, so paying less than the correct price. However, the impact of that risk is lower than the cost of manned checkouts, so supermarkets feel that the risk is worth taking. What other risk factors affect shops? Look around you at all your local businesses: what are their risks, impacts and potential mitigations?

Just keep writing!

Finally, keep practising writing about controls. As I have said many times, if you go into an exam and have to write about something that you have never written about before, you will struggle to do it well.

• Catherine Littler is an education consultant, and head of learning and development at Mindful Education

Accountants vs Vikings!

It was a night to remember when a group of young accountants got together for fun, frolics – and a game of beer pong! Krita Shah was there…

Picture this: it’s a Friday evening in July, and you’re in a London bar surrounded by young professionals from all industries across London, a drinks ‘Stock Exchange’ and enough food to fulfil your Norse God fantasies.

You’re buzzing from having just finished your Advanced Level exams, or buzzing from receiving Professional Level exam results the week prior (whether good or bad!), or just buzzing to be there with your mates! You have in your hand a CASSL golden ticket (because you were speedy enough to buy one), with access to free food and two free drinks.

This was the environment on a Friday in late July, when CASSL hosted their latest edition of the Summer Networking Series, a collection of events ongoing for the past three years that provide young professionals the opportunity to network, meet like-minded people and overall feel a sense of belonging and community.

The Nordic Bar in Tottenham Court Road hosted this latest jaunt and in true finance fashion even had a stock trading market for drinks. The motive was clear and simple: the more popular a drink becomes, the more expensive it becomes –just like shares. This is how some of us secured a glass of Prosecco at just a fiver, and others spent

a ludicrous tenner on a pint. Just the way the market works!

The atmosphere was brimming with excitement as young professionals discovered more about different industries they could pursue; with inspiration, as CASSL committee members explained their roles at prestigious firms; and with apprehension for what the event would hold.

The night soon transitioned into what will go down in CASSL history as one of the most competitive games of beer pong, eventually won by the team clearly embodying the power of the Vikings in the bar. Who knew accountants had such good throwing skills – it must be all those Excel shortcuts!

One victory and one well-placed happy birthday song later (yes, someone spent their birthday with us), it was soon time to wave goodbye and/ or drag your friends to Soho. Proclaims of ‘This was a great night!’, ‘Add me on LinkedIn!’ and ‘When’s the next event!’ were heard as our young professionals were swallowed into the throngs of London, happy and satisfied.

To all those wondering, future CASSL events have been outlined below – grab a ticket while you can, come along, bring a friend and join the young professionals committee in London:

• Let’s Cycle – CASSL Cycling & Networking Event – Saturday 10th August 2024

• Collaboration with London Business School –September 2024

• Introduction to the CFA – September 2024

For more details, keep up-to-date with the CASSL socials: @cassl_icaew (Instagram) and CASSL (Linkedin)

• Krita Shah is CASSL’s development and diversity director

Resources,

Accounting

Discounts

Ou ut: choose from multi le o tions:

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Find outstanding items on control/sus ense/ customer accounts.

Match multi le recei ts to ayments.

Identify backdated items.

See which numbers have been omitted from a total.

Distinguish reclassification issues from net differences.

Com are two statements with different grou ings.

You can set a tolerance for rounding differences.

Sotozeo even finds trasno osition eroors ! Free

Website

Accounting equation explained

Teresa Clarke offers some advice on how to ace questions on the accounting equation

The accounting equation is usually shown like this: Assets – liabilities = capital

However, in exam questions they may ask you to identify whether a re-arranged equation is correct. This can be tricky. Let’s look at a much simpler way of answering this type of question.

We can code the equation!

Assets = £1,000

Liabilities = £600

Therefore, assets of £1,000 – liabilities of £600 = Capital of £400

£1,000 – £600 = £400

Now let’s apply the code to the following re-arranged equations to check whether they are correct or not.

Assets – capital = liabilities

Assets of £1,000 – capital of

£400 = Liabilities of £600 – YES!

Capital – liabilities = assets

Capital of £400 – liabilities of £600 = assets of £1,000 – NO!

Liabilities + capital = assets

Liabilities of £600 + capital of £400 = assets of £1,000 – YES!

Liabilities – assets = capital

Liabilities of £600 – assets of £1,000 = capital of £400 – NO!

Try this coding method with questions from study materials. I guarantee it will make it simpler to answer them.

If you like 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/ • Teresa Clarke is a freelance AAT Tutor

CFOs, the public sector needs you!

Have you got what it takes to step up as a CFO in the public sector? Joanne Pitt explains what the role really entails

The role of a Chief Financial Officer (CFO) in the public sector is a daunting task, demanding both resilience and vision. Yet, for those who have what it takes, the role offers not only a wealth of opportunities but also a platform to drive substantial and transformative change.

The public sector is no stranger to headlines dominated by crises in funding, capacity, and capability. These deep-rooted issues, which a new government alone cannot swiftly resolve, are woven into the fabric of the sector’s systemic challenges. If you pull out one thread, there’s a strong chance that you’ll unravel several more. But that doesn’t mean we should accept the status quo.

At CIPFA, we consider CFOs to be pivotal agents of change at national, regional, and local levels. The expertise and professionalism that CFOs develop throughout their careers positions them at the heart of organisational decisionmaking, driving progress and innovation across the public sector.

The role of the CFO

The CFO role is crucial for the sustained delivery of public services. Every organisation ought to have sat their CFO at the top table because of

the value they add. The entire organisation must recognise finance as a key enabler, central to getting the job done. Far from a career about bean counting, it’s a career about delivery, outcomes and achieving strategic goals.

How to step up

CIPFA’s The Role of the CFO in the Public Sector publication explores these multifaceted responsibilities. This essential guide demystifies the role, highlighting not only the need for appropriate qualifications but also the importance of a broader vision. That’s because a CFO must look beyond their own organisation, embracing innovative ideas and best practices from other sectors to drive financial and strategic success.

Leadership and influence

CFOs must take on a proactive leadership role, guiding their organisations through financial complexities. They should have a strong presence in the executive management team, influencing strategic decisions to ensure financial viability and sustainability. For a local authority this includes a political element when dealing with elected councillors, but not every public sector organisation has this dynamic.

Strong financial management

Developing a robust financial strategy is crucial. CFOs need to create and implement policies that align with the organisations long-term objectives, ensuring resources are allocated effectively and efficiently. Effective financial management practices are non-negotiable and managing financial risks is also a fundamental duty.

Governance and assurance

Upholding strong governance frameworks is essential. CFOs should ensure that their councils comply with all relevant legislation and regulatory requirements, fostering an environment of integrity and ethical behaviour. The same rings true for stakeholder engagement. CFOs can leverage relationships between elected members, employees, and the community. Clear communication and consultation are vital to ensure that financial decisions are understood and supported by all parties involved.

Capability building

Continuous professional development is necessary to keep pace with evolving financial landscapes. CFOs should invest in building their skills and their finance teams’ capacity to manage complex financial challenges. One such area surrounds data and technology. Advancing tech can improve financial planning and forecasting. Adopting innovative approaches can help identify efficiencies and cost-saving opportunities, ultimately contributing to the council’s financial sustainability.

Insights and support from CIPFA

Many of today’s finance students possess the drive and ambition to become future leaders in the public sector, where they can find both challenging and fulfilling careers. If this inspires you to consider such a role, CIPFA’s publications provide in-depth insights into the role across various sectors.

Additionally, we provide support through The Leadership Academy, which has successfully run for over 10 years. Designed for aspiring CFOs, it enhances skills in working with and influencing senior politicians, colleagues, partner organisations, peers and staff. The programme focuses on developing personal impact, problem-solving and decision-making skills to match the evolving CFO role and support career aspirations.

The journey to CFO may be challenging, but the impact you can make is profound. The public sector awaits your leadership and vision.

• Joanne Pitt, CIPFA Senior Policy Manager

It’s time to take off

You can become an ATOL Reporting Accountant via the IFA

You might have seen the words ‘ATOL protected’ when you book a holiday; it stands for the Air Travel Organisers’ Licensing Scheme. It is a UK governmentbacked protection scheme that safeguards most air package holidays sold by UK-based travel businesses. It shields travellers from financial loss or being left stranded abroad, in the event their travel provider goes out of business.

Following changes in 2016, the Civil Aviation Authority (CAA) introduced the ATOL Reporting Accountant (ARA) Scheme, an accounting certification aimed to improve the standard of ATOL reporting and to ensure the accuracy of financial information submitted on behalf of ATOL holders. The ARA scheme is designed to ensure that the professional accountancy bodies provide the appropriate level of CPD in order to best equip their members to successfully undertake ATOL work.

The Institute of Financial Accountants (IFA) is a CAA-accredited body, with an agreement in place specifying that members who meet its criteria are permitted to apply to the IFA to

become an ARA and acquire a licence, at no extra cost. Members can undertake the online ATOL training course by taking the assurance unit, part of the IFA’s online learning programme, IFA Direct.

IFA member Marcus Armand, who is Managing Director of Plan Practice and Parker Whitwood, has completed the training. He hails

the merits of the IFA Direct assurance unit and the simple pathway it offers to obtain an ATOL licence.“Included in my remit is that of compliance within the practices, which is why the assurance unit was so useful. It focuses on the purpose and responsibilities of the engagement, giving students time to consider risks and gain a comprehensive understanding of the client and the work being reported on,” he explained. “Whilst IFA members will not be carrying out statutory audits, the principles are useful in the preparation of financial statements as these are often relied upon for loan or mortgage applications, and in obtaining an ATOL licence.

“Obtaining my licence was very simple once I had my practice licence. The assurance unit fulfilled one of the prerequisites for applying for it. This allowed me to complete the CAA training and subsequently become designated by the CAA as an ARA. Whilst this was completed for one specific client, it has also led to further enquiries.”

To find out how to become an ATOL Reporting Accountant (ARA) via IFA Direct click here • Thanks to the IFA for this article

How to pass SBL (part 3)

TTop tutor Chris Cain looks at the ‘7Ps’ – we are talking marketing mix here

he ACCA June 2024 pre-seen was based on the ‘pet vet services industry’.

One of the Tasks that some students were requested to attempt was based on the marketing mix (the 7Ps).

From September 2024 to June 2025 syllabus area C, the detailed study guide states: “Advise on how the 7Ps, price-based strategies, differentiation and lock-in can help an organisation sustain its competitive advantage.”

The notes below, produced by PASS-SBL will aid with your future studies.

Product (Service)

Differentiation: offer unique and innovative products that stand out in the market. Continuous product development and improvement can maintain a competitive edge.

Price

Price-based strategies: utilise various pricing strategies, such as:

• Cost leadership: offering products at a lower price than competitors.

• Value-based pricing: pricing based on the perceived value of the product or service.

• Dynamic pricing: adjusting prices based on demand, supply or market conditions.

Place (distribution channels and/or business location)

Distribution and/or Location Strategy: ensure products are available where and when customers/clients want them. Efficient distribution channels (or the business location) can enhance customer convenience and satisfaction.

Promotion mix (PR, advertising, personal selling, sales promotion and sponsoring)

Differentiation through promotion: develop strong branding and promotional strategies that highlight unique selling propositions. Effective communication can create a distinct brand image.

People

Customer/client service differentiation: provide excellent customer/client service to create a positive customer/client experience. Well-trained and motivated employees/staff can contribute to customer/client satisfaction.

Process

Efficiency and innovation: streamline internal processes for efficiency and cost-effectiveness for managing the customer/client relationships, including order processing and CRM processes.

Physical evidence

Tangible differentiation: present physical evidence (e.g. photos, videos, store ambience) that reinforces the brand image and contributes to perceived value.

‘Lock-in’ mechanisms include:

1. Customer loyalty programmes:

• Advantage: encourages repeat business and customer/client retention.

• Consideration: requires a well-designed programme to provide real value.

2. Contractual agreements:

• Advantage: long-term contracts or subscriptions can create customer/client commitment.

• Consideration: flexibility is essential to adapt to changing customer/client needs.

3. Switching costs:

• Advantage: making it ‘costly’ for customers to switch to competitors either by making it inconvenient to switch or providing a perceived greater added value to products/ services than competitors.

• Consideration: must provide substantial added value through product/service differentiation for this strategy to succeed.

• Chris Cain is an approved trainer with PwC Academy

Levelling up accountancy

Access

Accountancy’s Sharron Gunn discusses how the organisation works to improve social mobility within the accountancy profession

Access Accountancy, which celebrates its 10th year in 2024, seeks to unlock equal opportunities within the accountancy world. A charity, we work with 26 firms and professional bodies across the UK to improve access to, and progression within, the profession.

For me as chair, our importance is two-fold. Firstly, we highlight inclusiveness and the amazing career opportunities the accountancy profession offers, whatever your background. Secondly, we support and help firms and organisations attract and retain a more diverse workforce.

To my mind, one of the substantial barriers to entry and progression is that young people just don’t know about the opportunities and breadth of a career in the profession and may have preconceptions about life as an accountant. Raising awareness of opportunities within the profession and the opportunity to take up a work placement is a key part of what Access Accountancy does.

Being able to give someone the opportunity to work in an accountancy office for a couple of weeks one summer could be life-changing,

and as chair I am determined to ensure young people from lower socio-economic backgrounds have access to these placements. Evidence of work experience is something I always look for in potential candidates, alongside a work ethic, and so making sure young people take up placements is vital.

My background wasn’t one of privilege. I didn’t really know what accountancy was and thought it would have been out of my reach. But, fortunately, I had a mentor; my friend’s father. He persuaded me that accountancy would be a good career for me, and so I followed his advice and educational path, and it has been lifechanging for me. Without this support, my career would have been almost impossible.

For those interested in accountancy, my advice is to get some qualifications under your belt, and if you choose to go to university do something that you enjoy and are passionate about – it doesn’t need to be accountancy. My suggestion is to prioritise work experience along

the way.

This summer marks the end of my first year as chair of Access Accountancy, and as I approach this milestone I’m excited about our future plans. Our vision is to widen the reach of Access Accountancy, join up with other professional bodies who support our objectives, sign up more firms to actively participate in our programme and, ultimately, offer more work experience opportunities.

Since our formation we have evaluated our impact by collecting and analysing data on work experience, hiring, diversity and progression among our signatories. We’re going to turn our attention to gathering more data ourselves, so we can do our job even better.

As chair of Access Accountancy I recognise there is still more to do, it is this which will form the next part of Access Accountancy’s journey. I’d love you to be part of it – if you are interested, please contact me here

• Sharron Gunn, chair, Access Accountancy

Your itinerary to success

Nasheen Wuisman explains the importance of planning how you study, and why you should make allowances for the unexpected

The summer months are here! You may be getting ready for that long-awaited and much-deserved vacation. Have you planned it meticulously? Or is it going to be more of a spontaneous adventure?

I guess that depends on whether you are a deliberate planner or more of a spontaneous planner, who you are travelling with, and whether your travel is interdependent. Maybe when it comes to holidays you like to roll with it a bit more – knowing that you will have fun regardless.

Whichever of these resonates with you more, you still need to know your destination, you need to know what the visa requirements are, which inoculations you need and when you need them by and so much more – it seems there is always a certain amount of planning needed to make your desires a reality.

When I travel, I travel with kids (yes, it’s hard!). My kids are unpredictable and so I must do some extra planning to build in time for all eventualities.

Studying for CIMA’s CGMA professional qualification is a bit like travelling with kids – in addition to the inherent planning that is needed, contingency planning is just as important.

Whether you are a natural planner or not, the fact remains that CGMA candidates who

plan ahead tend to have a smoother journey. Your plan starts when you register to study with us and ends when you qualify. When you are actively studying towards an exam there will be more to plan, as the elements are interdependent – a bit like your connecting trains or flights.

Plan it your way

We know that planning brings rewards, but we also know that some people struggle with planning. You may feel that your time would be better spent diving straight into learning rather than planning study. It may feel it is a waste of time. So why would you?

The short answer is because it works.

Let’s go back to thinking about your vacation; there are certain things that you must do before you can even check-in, so you take the time to tick them off. Plus, you must allow time for delays and traffic and transport – just in case! In case of what? You miss your flight and don’t make it to your much desired destination?

Your CGMA designation awaits you – it is, your much desired destination.

So, whether you are natural planner and you like deadlines, schedules and structured work time, or you are a spontaneous planner and like flexibility, change and remaining open to

options. You still have the ability to plan, and you understand the impact it has when the end goal is so important to you.

What’s in it for me?

Planning your studies doesn’t require you to learn a new skill or way of thinking. All you need to do is apply the way you think about planning a trip to something else. The benefits? Think increased productivity, improved time management, better outcomes, downtime where you do not need to feel guilty, and reduced stress. So, why not reduce study stress as much as you can? Why not manage the last-minute worry that you do not have enough time to get everything you want to do? Why not reduce the chances of having to postpone the exam because you just don’t feel ready yet?

All these eventualities can happen even if you carefully laid out your plan – because life is unpredictable. However, chances of this happening are lower as having a plan gives more control over your study and life in general.

Plan your learning

• Set out how much time you have each week to study. You will need more time the closer you get to the exam.

• Plan to break your study down into manageable chunks – only you know how long you can study for before you are no longer being productive.

• Know when you are going to gain knowledge, revise knowledge and when you are going to start practising questions.

• Allow enough time to cover the syllabus. You can add as much detail to this plan as you wish, but even creating this outline plan will allow you to get a better handle on your study time. The best thing about doing this is that you will be able to see the progress you are making, which is a great boost.

Plan your study breaks

Be mindful not to create an intense study plan where every hour has been allocated to study. Doing this may give you a deep sense of dedication, but it will lead to burnout. Make sure you allocate time to do the things that you enjoy and boost your mental fitness. And build in adequate breaks to relax to keep study times productive.

Plan your exam

During the Case Study exam, plan how you will use the time by:

• Using the marks available for each question as a guide, decide how many impactful sentences you are going to write.

• Planning your answers using subheadings derived from the task set, which allows you to address all parts of the requirement. Once you have subheadings, you can add content under each to complete your answer. Take a little time to plan your CGMA journey, it will also help keep your dream alive – just imagine the huge difference being qualified is going to make to your life.

• Nasheen Wuisman, Senior Manager of Global Academic Progression at AICPA and CIMA, together as the Association of International Certified Professional Accountants

Streamlining the formula sheets

Top tutor Andrew Mower runs through the changes to the AFM exam – and proffers his views on them

ACCA AFM students – the formula sheet and tables are changing! ACCA have amended what is provided to students in the exam, from September 2024 exams onwards.

So what are the changes, and what do they mean for students?

Normal distribution table

The change

Along with the present value and annuity tables, AFM students have always been given a normal distribution table within the exam software.

This has been used for two purposes: firstly, when calculating BlackSholes manually (more on that later) and, secondly, when finding the Value at Risk (VaR) of an investment.

But – it’s gone! From September 2024 onwards, the normal distribution table will not be provided in the exam.

Impact on students

Most students will now use the BSOP calculator instead of doing the manual calculation anyway, so this won’t affect this approach. For anyone still doing the manual method using the normal distribution tables, it is long overdue that you switch to using the BSOP calculator!

The more important change is when calculating VaR. Rather than having to find the number of standard deviations from the edge of the normal distribution table at a given confidence level, the AFM examiner will now just provide this number within the question.

My opinion

This is a positive move. It will certainly save precious time in the exam when having to calculate VaR. It also forces students to use the BSOP calculator when calculating option prices, which is the better approach anyway.

Black-Scholes equations

The change

Nearly all of the Black-Scholes equations have been removed from the formula sheet – leaving just the call option formula.

Impact on students

For those students who are wisely using the BSOP calculator within ACCA’s software, this will have no impact. If you were using the equations to do it manually, you will need to learn to use the BSOP calculator instead. It is

quicker, easier and more accurate.

Expert tutor tip – the BSOP calculator will only appear in the exam software if you need to use it in that question. So, if it’s there (below the word processor and spreadsheet), use it!

My opinion

This makes perfect sense. Students need to use the BSOP calculator, and so this change ensures they do. The equations were also quite intimidating to look at, and tricky to calculate – so it makes for a far calmer formula sheet.

Modigliani and Miller’s Proposition 2 Formula

The change

ACCA have provided a rearranged version of M&M’s Proposition 2 formula, which sits just below the original formula which has always been provided. The original formula is used to find the cost of equity (Ke) of a company if their ungeared cost of equity (Ki e) and other variables are known.

The new rearranged version can be used to find the ungeared cost of equity (Ki e) more easily if a company’s normal cost of equity (Ke) is known.

Impact on students

Students may need to use this rearranged version to find the ungeared cost of equity (K e) – remember, this figure can be used to discount the ‘basecase NPV’ when doing an Adjusted Present Value (APV) calculation.

The new version still requires some algebra to find Ki e, so it is definitely one to practice ahead of the exam! I have made handy video on how to use this new formula on my YouTube channel (@andrewmowertuition)

My opinion

This is an interesting move from ACCA. It could indicate the revival of a formula that hasn’t been widely needed by students in AFM exams, and so students should definitely practice using this new rearranged version. Even the rearranged format still requires some fiddly maths!

Summary

Overall, these are positive moves from ACCA to streamline the formula sheets by removing equations and tables that students don’t need to use in exams anymore.

Practise using the BSOP calculator on ACCA’s practice software and know what all the variable inputs and outputs mean.

As always, the key to passing AFM is question practise TO TIME – there are loads of great past exams on the practice platform. Have a go at the pre-September 2024 mock exam on there – I am recording ACCA’s debrief videos, which will be available on ACCA’s YouTube channel.

• Andrew Mower is an AFM expert tutor, and is a previous winner of the ‘PQ Lecturer of the Year’ award. He now offers his own on-demand AFM courses through AMA Learn Online.

YOUR SEPTEMBER EXAM TIPS

What should you know going into the exam this September? Well, with the help of top tutors at BPP, we look at each paper providing you with guidance and tips

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 essential 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 basis, or on a divisional basis). Familiarity with the CBE software is important 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 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 too. 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 OTQs 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.

• 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. You will have to tackle three scenarios each with five OTQs. 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 must 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 in the relevant cell 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. 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 pro-formas). 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. Wellspaced 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.

• Chargeable gains calculations.

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 areas such as 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. sustainability following the issue of IFRS S1).

• 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. There is no negative marking.

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, as are 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 interpretations of financial statements 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,

Continued on page 30

so you could be faced with a single company interpretation and a group preparation or vice versa.

• 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.

• Accounts preparation questions may require full financial statements or extracts – read the requirement carefully. Students can expect questions on statement of profit or loss and statement of financial position, but should not forget comprehensive income, the statement of changes in equity, and the statement of cash flows.

• A single entity accounts preparation question could be preparation 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 valuation, 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 previously clarified that a consolidation financial statements preparation question could include up to two subsidiaries and one associate which allows additional scope for examining the disposal of a subsidiary (including as a discontinued operation).

• 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 another presents as part of administrative expenses).

• ACCA has previously clarified wording to emphasise the importance of the statement of cash flows in interpreting financial statements.

Audit & Assurance AA

In section A there will be three mini-case style

scenarios, each with five 2-mark questions based on the scenario (total 30 marks). Each mini-case 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. Most 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, and identification and explanation of direct controls and description of test of control).

• Audit procedures (substantive procedures and 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 often 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/gb/en/student/exam-supportresources/fundamentals-exams-study-resources/ f8/examiners-reports.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 these questions will test your understanding of financial management and objectives (ratio analysis), as well as the economic environment and financial institutions topics (financial intermediation, fiscal and monetary policies).

Section B consists of 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

HEALTH WARNING

• In the spreadsheet, you should lay out your answer as clearly as possible. Using a separate column for each adjustment is a good idea. Rather than relying on formulas in the spreadsheet cells, it will be helpful to the marker if you type out any calculations separately so that they can easily follow what you have done and therefore award any ‘own figure’ marks available if you have made a mistake.

• You also need to make it clear in the spreadsheet whether your adjustment should be added or subtracted, otherwise you will not be able to gain the marks for that adjustment.

• There are no marks available in the spreadsheet for a total column, so don’t waste your time adding the spreadsheet up.

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.

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 vital 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 prep. These are available in 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 – both are compulsory.

Question 1 - 30 marks:

• Q1 will be based on group accounting. This question may test any aspect of group accounting, including consolidated statements of cash flows, foreign subsidiaries and associates and JVs. The question will include a pre-populated spreadsheet containing a consolidated statement which you will have to adjust for information given in the scenario. The requirement related to the pre-populated spreadsheet will be worth between 10 and 14 marks.

• Usually, the spreadsheet will require adjustments for amounts you have calculated or explained earlier in the question, if this is the case, an efficient way of tackling the spreadsheet is to make the required adjustments as soon as you have calculated or explained the issue in that part of the question, rather than wait and do all the adjustments together.

• Time-keeping is key to passing this question. A recent examiner report identified that students were spending too long writing detailed answers to the first parts of Q1 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:

• 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 (compulsory), 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 partquestion 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, or global event.

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, wellexplained 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

For exam sittings up to June 2023, the SBL exam had a duration of 4 hours, and no pre-seen information was provided in advance of the exam. However, this all changed from September 2023, and so a new format applies:

• The exam will be 3 hours and 15 minutes in duration.

• You will be issued with pre-seen information two weeks in advance of the exam.

• Further information, and the question requirements, will be given to you in the exam itself.

ACCA has indicated that the information in the pre-seen will not be examined directly, but will provide context and background for the exam questions (for example, the industry in question, the organisation’s history and background, board structure, KPIs, and competitor information). You need to be familiar with this information before you begin the exam.

The exam will focus on one main organisation (which has been introduced in the pre-seen information), and the question requirements will relate to that organisation. The exam will contain some additional exhibits (typically four or five) and the questions will be based on these new exhibits.

The questions in the exam are referred to as ‘tasks’. There will be three tasks in the exam, although these may include sub-tasks. All of the requirements (tasks; sub-tasks) in the exam are compulsory. Question requirements in the exam could assess and link several subject areas across the syllabus and will test your ability to construct appropriate responses to practical problems an organisation is facing.

Every SBL exam will consist of 80 technical marks and 20 Professional Skills marks. Each professional skill will appear once per exam, for

four marks.

General advice: The SBL exam is demanding, and as such you need to give careful consideration to how you will manage your time to make the most effective use of it. You are recommended to spend about 20 minutes reading the exhibits and starting to plan your answers (for example, identifying the exhibit, and information, which is most relevant to each task). This then leaves you 2 hours 55 minutes (175 minutes) to tackle each task. Since there are only 80 technical marks, this works out at 2.2 minutes per technical mark. So, if a task has 15 technical marks, and 4 professional skills marks, you should spend 33 minutes on it (15 × 2.2).

No time is allocated for professional skills marks, as you earn the 20 Professional Skills marks by virtue of the way you attempt the 80 technical marks. It is important to note that you can spend longer than 20 minutes reading and planning your answer if you choose to.

The 20 minutes - 175 minutes split is just a recommendation. However, if you choose to spend longer on reading and planning then you will need to bear this in mind when you come to writing your answers, and adjust your time allocation for each task accordingly.

Regardless of the time allocation you choose, it is crucial that you stick closely to your timings, to ensure that you do not spend too long on one task to the detriment of those you are yet to attempt. 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.

Numerical analysis: Some question requirements may require you to conduct some numerical analysis. For example, you may be asked to analyse the performance of the organisation feature in the exam, or a potential investment it is considering. When doing numerical analysis, though, it is important that you focus only on performing any calculations that are going to support your answer and provide you with

something to talk about. Producing lots of unnecessary calculations for the sake of it will not earn marks, and will only serve to waste 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 should be used for discursive answers (e.g. reports; memos; letters) and is likely to be used for answering most 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.

Appropriate use of theoretical models: 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 tasks in the SBL exam will not ask you to simply regurgitate your knowledge of a particular topic or theoretical model. The task requirements test your ability to apply your understanding of the topics covered in the SBL syllabus in the context of the question scenario (for example, to provide advice to the Board about how to respond to a particular situation or issue). Furthermore, tasks will not specifically ask you to use a particular model. Whether you use a theoretical model when constructing your answer will be a matter of judgement that you need to weigh up in the light of the information presented to you in the exam. Doing plenty of question practice in the lead up to your exam is the most effective way of developing your judgement in this area.

Using the pre-seen: The pre-seen allows all students to have the same background understanding of the context of the case study. The industry and the organisation are fictionalised, so there is little value in doing any research about the industry beyond what you need to do in order to understand the pre-seen information. Remember that the real industry may have features which are different to the simplified world of the pre-seen. Use the pre-seen to understand the organisation, its structure and the conditions in which it operates, so that you can write responses to the tasks that are applicable for and relevant to the organisation. Do not try to question spot. The tasks will be based on the exhibits given in the exam, so question spotting will be a waste of time and may even lead you to misread the actual tasks in the exam for tasks you wish you had been set. A copy of the pre-seen will also be available to you in the exam, so you do not need to memorise it, you just need to be familiar enough with it to understand the context of the tasks and to be able to easily navigate to any section if you need specific.

Technical marks and Professional Skill marks: Technical marks relate to the knowledge which you demonstrate and apply in your answer. There are 80 technical marks on offer in the exam. The 20 Professional Skills marks are awarded for displaying the following skills and behaviours: Communication, commercial acumen, analysis, scepticism, and 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 question broken down into sub requirements. You will often be required to link 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.

Assessing the performance of an organisation is likely to be tested and this could include benchmarking as a theme. Financial performance measures (ROCE/RI/EVA etc) are also likely to be examined in this context, but don't neglect nonfinancial 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 two section B questions will come from syllabus section D (performance evaluation). This means you need to have sound knowledge of the balance scorecard, building block and performance pyramid models. In addition you will also need to have a good working knowledge of activity based management (ABM) and value based management (VBM).

The other question can be sourced from a variety of syllabus areas including quality management, information reporting (e.g. big data, lean information), HR frameworks (e.g. reward & appraisal systems), transfer pricing and environmental management accounting.

General advice: APM is primarily a skills-based 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 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 you ensure that you have a good broad knowledge of core technical areas.

Advanced Taxation ATX (UK)

The exam will comprise of one compulsory 50-mark question within section A. The requirements will be detailed in the manager’s email marked ‘work to be carried out’ and there will be several exhibits containing further information. The answer will need to be prepared in a specific format as set out in the manager’s email which will include mark allocations for the sub-requirements. Due to the size of the question it is possible that the scenario could involve more than one client or a personal client in addition to a corporate client. The question will comprise of 35 technical marks, 5 ethics marks and 10 professional skills marks. Each of the four professional skills will be tested.

Section B will comprise of two compulsory 25-mark questions. These will be in a more succinct, note form style, and will comprise of 20 technical marks and 5 professional skills marks. A minimum of two of the three professional skills will be tested in these questions (not including communication).

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.

Since the introduction of the professional skills marks students have more time to attempt each question than under previous sittings. The ACCA has stated that the additional professional skills marks should not be considered as additional requirements but that the extra time they allow should be used for planning and thus to prepare a more comprehensive answer.

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 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 rules, VAT on land & buildings, transfer of going concern, the capital goods scheme, overseas VAT transactions, and registration/group registration/deregistration 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

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 and the split of both technical and professional skills marks.

Section A will comprise a case study, worth 50 marks, split into 40 technical marks and 10 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 manage a range of issues simultaneously in relation to planning, risk assessment, evidence gathering and ethical and professional considerations.

Continued on page 34

Time to outsource your payroll

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.

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.

This is a technically demanding exam which tests auditing knowledge from both AA and AAA. All three exam questions will require you to apply this knowledge to the scenarios given: the professional marks will be awarded on the strength of your application of knowledge to the situation presented in each of the exhibits. Apart from poor auditing knowledge, lack of success usually comes from poor analytical skills, poor application, poor judgement. and poor timekeeping.

This subject can also test topical issues which have been covered by the AAA examination team’s technical articles (e.g. quality management in September 2022, and the impact of data analytics in September/December 2020).

Check out the examiner’s two articles on quality management, two articles on planning questions and risk. plus another two articles that discuss

recent developments in social, environmental and sustainability reporting. There are also ‘Topic explainer’ videos on areas such as quality management, audit procedures and prospective financial information (forecasts) that you may find of use.

The examining team has advised that certain less-frequently examined topics such as audit committees, money laundering, internal auditing and outsourcing could make an appearance, so you should make sure you have covered a good breadth of subjects in your revision. Note that for the syllabus examinable from September 2024, there has also been an increased focus on sustainability assurance following the issue of the IAASB’s exposure draft of ISSA 5000.

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 (50 marks):

You can expect 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.

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 (25 marks each):

Areas to be tested:

• 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 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.

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BACK TO BASICS

Accountancy can be simple if you know the basics! PQ magazine has gathered together some top tutors to help us help you. Our Back to Basics videos will guide you through some of the fundamental topics of accountancy. The series includes:

Will Boardman – Tax points

Part of the AAT Tax Processes for Business assessment at Level 3, this video by awardwinning Training Link tutor Will Boardman explains tax points. In four short minutes Boardman explains the difference between a basic and an actual tax point.

Check out his video at:

https://www.youtube.com/watch?v=7NTft0Td7oQ

Jo Tuffill – Cost behaviours

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.

You can check out her video at: https://www.youtube.com/watch?v=mkx8HT_uc7M

Tom Clendon – Double entry bookkeeping

You should be able to master the rules of double entry bookkeeping in just eightand-a half minutes. So do you know your credits and debits? Clendon has also produced a video on assets. Check out the double entry video (3,000 people have already) at: https://www.youtube.com/watch?v=-nYep6Il6-c

Michele Baker – Trial balance

Michele Baker will explain in six minutes how to create the trial balance and why you are doing it. Baker will let you know whether a balance is a credit or debit, and help you get to grips with ‘DEAD CLIC’. Check out the video at:

https://www.youtube.com/watch?v=TxHLSJRMaZc

Check out more great Back to Basic videos at www.pqmagazine.com.

Click on the video bar at the top of the page or go direct to our YouTube channel

Mark-up and margins explained

Karen Groves explains how to approach mark-up and margin questions and tests your knowledge on the subject

One method that can be used to reconstruct missing figures is to use mark-up and margins. A business will typically set the selling prices by using either:

• A profit margin where a percentage profit is used on the net selling price, so a percentage of the sales figure, or

• A mark-up where a percentage profit is added to the net original cost of the item to reach the sales price.

VAT is ignored in the calculations if you are a VAT registered business. Once you have calculated your mark-up or profit margin selling price, this will then be subject to VAT as appropriate.

Mark-up example

A garden furniture retailer uses a 25% mark-up on cost to set the selling price. The cost of the goods being sold is £200, so we calculate the actual selling price as follows using percentages known as the cost structure:

Sales 125 (cost figure + 25% mark-up)

Cost of goods 100 (this is 100% being the cost figure)

Gross Profit 25

We know that the cost is £200, so:

If the £200 is equivalent to 100%, the sales of 125% will be: £200 x 125 = £250.00

If you are given the sales figure of £250, equal to 125%, the cost can be calculated as follows:

£250 x 100 = £200

Profit margin example

A sportswear retailer operates with a 30% profit margin. Sales this week are £10,000, so we set up the cost structure, however this time the sales figure is 100%:

Cost of goods 70 (cost must be 70% if sales are 100%) Gross Profit 30

We know that the sales figure is £10,000

As sales are £10,000, the cost is calculated as follows:

x

If you were given the cost of sales figure of £7,000, you can calculate the

sales figure as follows:

£7,000 x 100 = £10,000 70

Both mark-ups and margins can be used in incomplete records assessment questions to help find missing sales or cost of goods figures.

Example

KSA Manufacturing has a gross profit margin of 30%. We have been provided with the following information:

Purchases = £20,000

Opening inventory = £3,000

Closing inventory = £4,000

We now need to calculate the sales for the period: Cost structure

Cost of goods sold

Opening inventory 3,000

Less: Closing inventory 4,000

The sales figure can now be calculated:

£19,000 x 100 = £27,143 70

Once you have your sales figure and know how to put together the cost structure, you can then find the total for cost of goods sold, and other missing figures such as purchases or inventory.

Now have a go

The sales for a toy store were £20,000 for the month and the business operates a 25% mark-up on cost policy.

What will the cost of goods sold be?

• £20,000

• £25,000

• £16,000

The cost of goods sold for a clothing store was £15,000 for the month, and the business operates a 40% profit margin.

What will the sales for the week be?

• £21,000

• £15,000

• £25,000

Answers

1. £16,000

2. £25,000

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

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Neurodiversity: the hidden talent pool

Jamie Lyon answers questions on why employers are starting to recognise the value the neurodivergent talent pool brings to the workforce

What’s the background to neurodiversity in accountancy?

It’s estimated between 15%–20% of the population are neurodivergent. As a result, organisations have a moral responsibility to include and support neurodivergent individuals, creating workplace environments where everyone’s challenges are supported and strengths are celebrated, and where neurodivergent individuals can thrive.

ACCA’s latest report ‘Neurodiversity in accountancy’ explores the growing awareness by employers that those who are neurodivergent have real value to bring to an organisation. The report highlights targeted hiring programmes that have actively sought out neurodivergent talent to undertake specific roles.

How important is it that employers create workplaces that support the challenges of neurodivergent individuals?

Extremely important. Currently, the world of work clearly isn’t an environment in which many neurodivergent people can feel comfortable and succeed. It’s an issue that has historically gone under the radar. Neurodivergent employees often bring different strengths and capabilities to the workforce, which benefits not only fellow employees, but the business as a whole.

How can employers benefit from a more neurodiverse workforce?

And are there any examples?

The business benefits for organisations that embrace neurodiversity include:

In our report, we share stories of individuals who are neurodivergent within the accountancy profession and, ultimately, celebrate thinking differently. They represent organisations as diverse as accountancy firms EY and Cooper Parry, recruitment firm Michael Page Malaysia, HMRC and The Ritz London hotel. Numerous benefits to their organisations were cited, from brand recognition and winning new business to accessing previously untapped talent pools.

Bringing innovation, creativity and other valuable skills to the organisation was also recognised as a key benefit. Ultimately, a proactive approach in this area has an impact on creating value for an organisation, both financially and socially.

Why might there have been a reluctance in the past to embrace those who’re neurodivergent?

Possibly due to a lack of understanding of what it meant to be neurodivergent, and the different conditions this can represent. Medical research in the area also continues to advance, and the internet has played a role also in raising awareness. Social media has also been a force for good in terms of celebrities and high-profile figures openly embracing their own neurodivergence, or that of others. This has helped increase general awareness and elevated the issue in the workforce.

Are there any risks for employers who don’t embrace neurodivergent employees?

Ultimately, it’s about being able to recruit and keep hold of great talent. Neurodivergent employees will often bring unique skills and talents to the enterprise, and as an organisation it’s very helpful to a recruitment brand if they are seen to be an inclusive organisation. So it’s a massive risk for employers in terms of talent loss if they don’t embrace this agenda.

Brand reputation aside, there is a moral imperative, too. Employers should aspire be seen to do the right thing here. If we look at the indicators through ACCA’s Global Talent Trends study, which is the largest worldwide annual study of workplace issues in the accountancy profession, what we know is that there is a mental health challenge in the workplace too. So having a much more inclusive approach to supporting employees and providing that duty of care is really the right thing to do.

Any final words of advice?

Supporting neurodivergent employees is essential for creating an inclusive workplace and this doesn’t need to be complex. Often knowing where to start can be the biggest challenge. Organisations can approach neuroinclusion at both an organisational and individual level. The aim for any organisation should be neuro-inclusive design, where possible adjustments and ways of working are part of standard practice and no longer need to be requested.

• Jamie Lyon, Head of Skills, Sectors and Technology at ACCA

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 really nervous about starting my new job, so what advice have you got for managing my nerves on my first day?

KAREN’S RESPONSE

It’s natural to be nervous when starting any new chapter and part of the challenge is accepting this and knowing it will pass as you settle in.

Focus on the positives, such as what you’re looking forward to most about the role, the new skills you’re keen to develop, how this opportunity will enhance your career and the people you’ll meet to expand your network and even make new friends. If your nerves turn into self-doubt, remember that you have been chosen for a reason; have confidence in your ability to do the job well.

Make sure you’re clear on basic but important factors for your first day such as the journey you’ll take to get there, the time you need to leave, what you’re going to wear and what you need to take with you. Take notes throughout the day as there will be lots of information to absorb during your onboarding period – you can refer back to these when necessary. Importantly, ask your manager or colleagues any questions that arise so you don’t feel in the dark about anything. Hopefully when you get home after your first day you can breathe a sigh of relief and your nerves will start to ease as the week goes on. Although it can be tough when anxiety levels are high, try to enjoy the experience.

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

AI will widen corporate inequalities

The adoption of generative AI could widen corporate inequalities, says the

In a recent paper ‘Assessing the expected impact of generative AI on the UK competitive landscape’, the IoD, in collaboration with the London Business School and Evolution Limited, said “sectors prone to market consolidation would see the most significant shifts”.

The paper calls on the new government to redesign the education system for a postgenerative AI world. There also needs to be targeted support and regulatory adjustments for identified vulnerable sectors.

The London Business School’s Michael G Jacobides (pictured), a joint author of the paper, said:

In brief

Clive Owen LLP has welcomed 15 new graduates to help strengthen and diversify its existing team. This is the largest intake of graduates in the firm’s 40-year history.

The new cohort of PQs will join the audit and accounts, tax, IT and managed services teams at the firm’s offices in Darlington, York, Durham and Middlesbrough. The recruits are all from the local region, cementing Clive Owen’s policy of supporting and employing members of its community.

Managing partner Gary Ellis said: “We pride ourselves on being a people-focused, collaborative organisation, embodying a progressive and inclusive ethos that consistently attracts talented, motivated recruits each year.”

Institute of Directors

“As excitement with generative AI has reached fever pitch with consultants and vendors extolling its merits, a rigorous, independent look is overdue. Our study offers a systematic review of what directors and senior executives think generative AI can and cannot do, where we should expect it to make a difference, or where not, and what distinguishes firms which report that generative AI can move the needle and those that don’t.

“We worked with business

Meet your new student training partner

Saint & Co, a leading Cumbrian accountancy firm, has appointed a new Student Training Partner to help widen the opportunities for students in the region.

Sophie Graham, who has worked for Saint & Co for more than 20 years, will oversee the training pathways for all the firm’s trainees and apprentices.

Since her appointment she has created more opportunities for local people looking for a career in accountancy and extended the training programme across its sites in Cumbria.

Previously, all ACA students were trained from the firm’s headquarters on Carlisle’s Rosehill Industrial Estate, but this has recently been expanded with bases

leaders to piece together a playbook with concrete recommendations both for those leading firms, and policymakers. It’s clear that company leaders must brush the hype aside, and boldly rethink their strategy and organisation. The practical policy recommendations we provided address our concern that in the UK, there’s a risk of missing the forest for the trees with regulators and policymakers staying too narrowly within their responsibilities.”

Tackling the scourge of late payment

Tackling late payment must be a priority for the Labour government, says a new ‘Settle Up’ report from Xero. Late payment has become a growing public concern, and the report found many believe the scale of late payment is unethical, and amounts to bullying and theft. The study reveals 61% of respondents were shocked by the extent of the crisis, with 48% saying it made them angry.

People believe the term ‘late payment’ does not do justice to the severity of the problem. Some 34% think that ‘big business bullying’ would be more appropriate.

The PQ Book Club: books you should read

The Richmond Papers by Sam Simpson (SPL £9.99)

This is the third in the trilogy of books about Scottish accountant Tom Mackay from Sam Simpson, writes Graham Hambly. As with his previous two books the story is set during a political election, this time we have crossed the Atlantic to the USA. We are also taken back to the American Civil War and to secret letters (The Richmond Papers) and a shipment of gold bullion heading for the UK. But what is the dark secret in the documents that could bring down the US government?

There are treasure hunters and the FBI all chasing the trial, which seems to have run cold. Some are more interested in the gold than the letters from Confederate President Jefferson Davis.

Unlike other reviewers I think the flipping backwards and forwards works really well – you effectively get two books in one!

Our intrepid accountant, and his side-kick girlfriend (Sally Purcell), are determined to discover the truth, but this truth comes at a cost, and death is never far away.

It’s good that Mackay has come into money, as the story

takes him from Florida to Nassau, Liverpool, Scotland and even New Zealand. They seem to stay somewhere nice every time, and I was wondering if Simpson had tried these locations out himself.

The books are getting longer, this one was 260 pages, but they are so easy to read and it was a great companion on holiday. PQ rating: 5/5 Loved the mix of historical and modern day. We want more about accountant Tom Mackay and his adventures.

Record graduate intake at Clive Owen

in Wigton and Ambleside, now also designated as ICAEW Student Training Offices.

The AI teacher has arrived

A privately-owned Malaysian university is looking to launch the first degree programme taught and assessed entirely by artificial intelligence.

Raffles University has created a platform called MyAi Teaching Assistant, which it says will allow academics to upload their lectures. The AI then turns into text notes, and an avatar look-alike of tutor, with their cloned voice, delivers the notes

Advert time: One of our favourite commentators, Professor Ricard Murphy, was on the Guardian website a few days after the Microsoft IT outage. He was intrigued to see, as GP services were disrupted due to cybersecurity faults in Microsoft software, an ad pop up! He suggested perhaps Microsoft might need to get the basics right before bragging about them.

to the eager students!

Dean of the AI and Robotics faculty, Sasa Arsovoski, said: “We take the experience and expertise of the lecturers, which is all summarised in their Power Point presentations, and then we have a properly designed lesson.”

Students on the data science degree will be able to ask the AI questions, and in theory the AI can ask attendees questions too. All coursework will be automatically graded by the system.

Where did I put that phone?

HMRC staff who have been working from home have lost thousands of mobile phones and laptops estimated to be worth £1 million, in the last three years.

The figures show staff at the revenue lost 10 mobile phones and two laptops every week of the year. That mounts up to 1,670 mobiles and 334 laptops that simply disappeared! And you can add 10 USB computer memory devices to that total.

On top of that 95 phones and 562 laptops were stolen.

HMRC officials have reportedly said that the lost item total may be a little high as some of the equipment is later found.

However, some commentators have suggested the sheer number of HMRC employees working from home is adding to the tax office’s drop-off in performance since the pandemic. And, not having anything to work might not be helping either!

Time for ‘per-mile’ road tax?

How do you make up a shortfall of £25 billion in tax from fuel duty? According to leading civil servant Michael Dnes, you have to think about a new permile tax on drivers. This is the only way, he believes, to ensure electric motorists pay their fair share.

The problem is pay-per-mile pricing is not popular with… drivers! Currently, the new Labour government have not said they are introducing it any day soon. Dnes said that one way of introducing the tax would be to make future buyers of electric cars pay for it, in the hope that this would make its introduction more acceptable. He is not alone in his call for a per-mile tax – the Resolution Foundation is also advocating it.

So much tax!

Global soft drinks giant Coca-Cola is facing a tax bill of billions of dollars over a long-running transfer pricing-dispute.

The company has been in a decade-long dispute with the US Internal Revenue Service, with some experts estimating the bill could be as big as $16 billion – that is 18 months’ profit for Coca-Cola.

An appeal is pending after a US judge found they were hiding huge levels of profits in low-tax jurisdiction countries to shield profits from US tax authorities. Coca-Cola has claimed the IRS is wrong to claim the value of all its brands reside in the Atlanta parent company.

Despite the possibility of this huge hit to the balance sheet, the company has not made any provisions in its earnings for any possible hit.

W E V E G O T T H E L O T

Relaxing Flowers

We have three copies of the Relaxing Flowers Colouring Book to give away this month. This wonderful adult colouring book has 50 beautiful flower patterns in various arrangements. It is perfect for beginners as well as advanced artists. Remember, one of the big benefits of colouring is that it also stimulates creativity and ‘out of the box’ thinking!

To be in with a chance of winning one of these books just send an email headed ‘Relaxing Flowers’ to giveaways@pqmagazine.com, along with your name and address.

Big books are better

We are giving away The Big Book of Su Doko this month, and have three up for grabs. There are 300 puzzles for you to tackle, one puzzle per page. There are 100 easy, 100 medium and 100 hard puzzles to complete. You will be pleased to hear all the solutions are in the back of the book, too. To get your name in the draw to win one of these fab books simply email us at giveaways@pqmagazine.com with your name and address. Head up your email ‘Big Book 1’.

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 13 September 2024. The main draw will take place on Monday 16 September 2024.