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PQ magazine July 2018 /

AAT tutors’ conference PQ magazine reports from the recent Nottingham training providers’ event


guidance on the case


The ICAEW has put diversity at the top of its agenda with the launch of a new online Diversity Community. In his welcoming remarks at the launch at Chartered Accountants’ Hall, President Nick Parker said: “I think this is one of the most important and positive steps we’ve taken as an institute.� When he became President last June Parker put diversity at the top of his agenda and he hopes the new community will “challenge us all�. Parker explained diversity is often defined as the recognition and celebration of difference, equality of treatment and opportunity, ensuring we are all represented with an equal voice. But he felt it also means the building of knowledge and understanding, and “the generation of new ideas and perspectives�. The ICAEW is already working hard to achieve greater diversity. It runs a Diversity Advisory Group, which reports directly to the board, its Women in Leadership programme helps more women achieve senior roles, and it was a cofounder of Access Accountancy, which works to improve access for those from disadvantaged backgrounds. On top of this, the ICAEW provides support to the Professional Services LGBT Group

and has its own internal network group and champion of LGBT rights. The new community, still a work in progress, will hopefully help connect communities and become a useful resource for those who are unable to develop their own initiatives.

Parker wants to encourage students to take a look at the online information hub at PwC’s Anne Hurst stressed that diversity Continued on page 10



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News 06Women in accountancy Get your voice heard 08AAT exams New pass rate stats to be published 10International students Were students deported illegally? Features, etc 04Mind your Ps&Qs CIMA is overreacting to students talking about the exams; and getting the exam hall runaround from ACCA 12Accountex round-up News from accountancy’s showcase 13AAT conference We report on events at the training providers’ get-together in Nottingham

14Apprenticeship funding The

Apprenticeship Levy one year on

15ACCA exams Getting ready for the new-look September exams

16ICAEW spotlight How the

24AAT Advanced Diploma

Take a step-by-step approach 26Activity based costing How to apportion overheads correctly 28Money laundering Stay on top of this complex subject that affects all accountants 29Careers Life at PQ mag (!); the best of social media; and our Book Club review 30Fun stuff – and our giveaways The columnists Robert Bruce Auditors caught between a rock and a hard place 6 Prem Sikka Private equity’s role in the demise of Maplin 8 Zoe Robinson Your qualification is priceless, so make the most of it 10 Subscribe to PQ magazine It’s FREE – go to page 27 or see ABC July 2016 – June 2017

qualification will benefit you


17AAT survey Meet the

accountant of the future 18ACCA exams What the examiners want from you

20ACCA F8 paper How to pass this tough paper; and how to stay motivated while you study

22Tax How the rules around

offshore evasion are changing

23CIMA case study All you need to know to pass these papers that will make you career-ready

Diversity matters

July 2018

Publisher’s statement: We send a digital issue of the magazine to an additional 7,125 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)

PQ magazine was at the recent launch of the ICAEW Diversity Community (there’s a clue on the front page), and President Nick Parker brought home the importance of the profession welcoming everyone. It was a real message of tolerance. You could say this is a diversity issue of PQ. Take a look at the news pages and you will read a story about women in accountancy and worries that ethnic diversity at the top accountancy firms might be stalling. But this is how we have always rolled; we think the profession needs to be more reflective of society and have always pushed this view wherever we go. Out and about We’ve been travelling widely this month! I spent two days at the AAT Training Providers’ conference in Nottingham and before that I was a judge for the AAT awards. I also visited Accountex – now that is place you must go if you love accountancy software! I even took a trip to Birmingham and in a trendy coffee shop had a fascinating conversation with Kaplan’s Stuart Pedley-Smith about gamefication and the marshmallows test. Not something I do most Wednesday mornings! You should really check out his blog at Next up for PQ is a chat with ACCA’s Alan Hatfield and his team at their swish new HQ. Alan is writing in this magazine about big changes happening in September (page 15). Then there’s a feature from CIMA’s VP examinations, Stephen Flatman, on the case study (page 23). Our columnist Professor Prem Sikka has also been chosen by the Labour Party to create a new blueprint for the profession (page 17). It all goes to show you how hard we are working to give you a magazine that reflects what’s going on out there. Graham Hambly, PQ magazine editor (

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PQ have your say

email Shape up, CIMA! I’ve not written to a magazine before but I have to comment on the debate raging about whether students should discuss their exams with other students. CIMA have banned this and disqualified some students who have been caught doing it. I feel outraged by this behaviour by CIMA, as it not only puts the onus on the student for exam security, but it fails to recognise that holding group discussions is one of the best ways to learn. CIMA has behaved unethically by not taking responsibility for developing an exam security

model that allows good practice. What other exam board would come up with a security model

that requires students not to talk to each other? Other bodies make sure there’s enough different exam content to ensure students can’t benefit from discussing what they’ve sat, as they won’t know what’s coming up in their exam. And as for disqualifying students who do talk to each other – how will CIMA detect the numerous study groups that aren’t online? Not being able to detect these discussions and disqualify these students means that CIMA is not behaving fairly or equitably across the board. Overall, this behaviour reminds

me of the music industry, where record companies spent years trying to prevent people from downloading music – until they recognised it was them who needed to change their business model. Get real CIMA, and take responsibility for developing a professional exam security model that works in the 21st century! Name and address supplied The editor says: You certainly argue your case very well, and I have a lot of sympathy for students who use discussion boards for all the right reasons. Looking at the actual case it seems cheating was high on some students’ agendas, so it was only right they were punished.

Our star letter writer wins a fantastic PQ memory stick! Exam centre woe For both my past two ACCA exams with ACCA the test centre I have selected has changed from the original that I chose. Back in March, I selected to sit the exam in Nantgarw, South Wales. A few weeks later I received an email to state that my exam had been changed to another test centre (in the centre of Cardiff). This wasn’t an issue for me, as it’s just as close to home. Two days later, the test centre changed again! Although it was not an issue (as it was still in Cardiff) I thought it was very unprofessional. I sat the exam and passed. Then a few weeks ago I again selected to sit the F9 exam in Nantgarw. Shortly afterwards I received an email from ACCA to tell me that the exam centre was no longer available, and that I had been moved to Swansea. This means an extra 100 mile journey for me, and as my exam is 9.30am, I am considering staying in a hotel the night before so that I don't get stuck in rush hour traffic. I requested to be moved to Cardiff, but it is not possible. I am extremely dissapointed with the ACCA. I dont know why they have chosen an exam test centre if they are going to continually cancel

accountants abreast of what’s going on. I find the method of delivery simple and get updates through the news and articles. It’s a great job you are doing – PQ is a way of earning CPD and hearing about the developments in other exam boards like ICAEW, CIMA, etc, makes it an interesting read. Mustafa, by email

I need

the exam sittings. Very unprofessional from a so-called professional body. Name and address supplied

A great resource I am writing this to add to the sentiments of your letter writer

Gender pay debate

Paula Kell (‘Thanks and farewell’, PQ, June 2018). I must say that PQ has remained a valuable resource even after I completed the ACCA exams over a decade. At the time I thought about ending my subscription, but what PQ does is to keep qualified

I am not sure I am allowed to say this, but can anyone tell me what all the fuss is about the gender pay gap? All the current figures show is that there are not enough women in senior positions. The PQs I work with are paid the same. I think one of the problems is attracting women into accountancy in the first place. At university very few of my female friends wanted to work for the Big 4. Looking at the figures I also see just 28% of ICAEW members are female, and despite all its work just over 40% of all current PQ recruits are women. Perhaps women are not sold on the long hours and ‘pressure cooker’ environments on offer. Perhaps they also think the work is a bit on the dull side. I can’t blame them for thinking that! Name and address supplied

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

Published by PQ Publishing © PQ Publishing 2018


Three letters that are a real game changer


PQ news

ROBERT BRUCE Auditors caught between a rock and a hard place It’s now fashionable to dump on the auditors. They sit in a position that is untenable. They are appointed by the company they ostensibly examine. The law states a company’s board of directors have to attest annually and collectively that all is well with the company they run. The independent directors are there to ensure what they say is right and they appoint auditors to check it out. Shareholders vote on that appointment. Where does it go wrong? Well, investors never really show any interest in taking it seriously. With no one else carrying out their roles effectively, it is time to shoot the messenger. So the auditors, the only ones left, get it in the neck. Schemes to change the structure abound. Break up the auditors into smaller firms. Yet international firms and the way they are regulated are wildly complex. Smaller audit firms have no interest in doing such work. The downside is much too great. So why not break the big audit firms away from their consulting arms that provide much expertise to assist the audit. Why not create a culture of audit only firms, or auditing by state bodies? Has anyone thought through the cultural issues? Auditors are called beancounters because they are perceived as dull. So why not create a profession that is terminally dull? Is this the way to create a culture of challenge, expertise, and skepticism? It is important to hold the system to account. But it is also important to remember what the final objective and outcome of an audit ought to be. Robert Bruce is an award-winning writer on accountancy for The Times

Accountant Elaine Clark has launched a Women in Accountancy group and is asking fellow female professionals to provide their input into a survey about their experiences in accountancy. She wants to know if you have experienced sexist or misogynistic behaviour, and whether the professional bodies portray and support gender equality. Initial results seem to point to a problem and women are not being treated the same as men in the industry. Some 40% of respondents so far have experienced sexual harassment at work. And just one respondent thinks the professional bodies are doing enough. That said, Clark emphasised most still believe accountancy is a good career for women. You can access the survey via men-in-accountancy-survey/ Clark said she won’t be chaining

A call to action

herself to any lampposts outside Chartered Accountant’s Hall just yet, but felt it is time that gender equality in the profession was the norm. She explained: “It’s time for misogynistic behaviour to be outed

for exactly what it is; a form of bullying. I’ve experienced it throughout my career and continue to have to put up with it on social media where people can hide behind a virtual network platform.”

Delays, time pressure – it’s the ACCA exams

Let me in! Accountex, which took place at ExCel London in late May, is reporting a record turnout for 2018 – 7,613 accountants all in one place!

Delayed exams and computers crashing seems to be a common theme of students sitting the ACCA CBE June exams in the UK. PQ magazine got reports of problems at Kensington & Chelsea, Hammersmith & Fulham and Chelmsford colleges for F7 and F8 sitters. The delays were anything from 40 minutes to over two hours. One PQ asked if there are rules about how long students have to wait for a delayed exam before they are cancelled. Turning to the actual papers, the time pressure for many of those sitting the P7 June exam was just ‘unreal’. One angry sitter said they just don’t understand what the examiner is looking for. They said: “I will be back in September not

because of my lack of knowledge but my inability to manage the time pressure!” Many felt they would need at least three-and-a-half hours to get close to doing the paper justice. Another frustrated PQ said: “I don’t think the examiner really understands this from a student perspective.” For one it was “the most time-pressured exam I have ever sat.” P2 sitters felt they had a decent chance of passing as the examiner hadn’t made the last-ever exam “too difficult”. Students sitting in the UK aren’t loving the CBEs. One said they “hated it”. Another worry is the number of students who admit that just aren’t familiar with how they work.

global markets, moving from five to six key portfolios. There will be a new portfolio of Greater China. The move also sees the creation of a new ASEAN and ANZ portfolio. ENASA becomes Middle East and South Asia – MESA, and Sub Saharan Africa becomes Africa. The ACCA’s Emerging Markets portfolio includes countries where demand for the profession is growing, such as Afghanistan and Turkey. Finally there’s Europe & America, including the ACCA’s key markets of the UK and the US.

Doing the right thing Big 4 firms need to put more emphasis on the importance of ‘doing the right thing’ in the public interest when it comes to audit work, says a new report from the FRC. The watchdog said the firms have to create a culture where achieving high quality audit is valued and rewarded. There appears to be an inference that firms are still focusing too much on providing lucrative consulting services rather than putting enough emphasis on audits.

In brief All male shortlists banned PwC has banned all-male shortlists for jobs in the UK as it attempts to increase the number of women in its senior roles. At the same time PwC plans to ban allmale interview panels and examine how ‘career defining roles’ are handed out. PwC’s Laura Hinton said making sure that everybody in the firm had access to important career opportunities, such as working in big projects or for wellknown clients, would be a real game changer. 6

Premflix channel All you AAT PQs out there may want to subscribe to Premium Training’s award-winning free-ofcharge Premflix channel. It is growing by the day and provides lots of videos and presentations on various subjects. How about trying out ‘Accountancy Catchphrases’ or ‘Accountancy Countdown Conundrum’? For more go to ACCA restructures The ACCA has restructured its

PQ Magazine July 2018

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PQ news

PREM SIKKA Private equity and the Maplin experience One of the enduring myths is that shareholders bear the risk and should therefore control the company. Such assumptions are being challenged. Consider the case of the collapsed electronics retailer Maplin. In June 2014, Maplin was acquired for £85m by Rutland Partners, a private equity firm. The purchase was funded by bank borrowing and a £72 million loan from the new owners, carrying interest of 15% a year via a labyrinth of offshore companies. The loan from Rutland shareholders was secured, which meant in the event of liquidation shareholders would be at the front of the queue rather than the back. The audited accounts of Maplin’s parent company, MEL Topco, for the years to March 2017 and 2016 show that despite operating profits of £2.4m and £6.9m, the company reported a loss before tax of £16.1m and £11m. Why? The 2017 and 2016 income statements had interest charges of £12.1m and £10.8m, mostly payable to shareholders. The losses were created by the funding model. The interest was not paid but was rolled over as it provided potential tax advantages. The end game is that Rutland will collect £102m. Wells Fargo, Maplin’s secured lender, has received £10.6m. Maplin’s suppliers, staff, HMRC and other unsecured creditors stand to lose almost £217m. The private equity model should encourage reflections on corporate governance. Residual risk is borne by unsecured creditors, not shareholders, but they have no say in governance. This should lead to calls for reforms. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

The AAT has said that it plans to publish one-off pass rates on 22 June to show that the AQ2016 assessments are now working well. Director of education Suzie Webb told delegates at the recent training providers’ conference that there had been real issues with two of the new assessments and stressed the AAT has worked hard to ‘put it right’. New versions of these assessments were launched earlier this year and these changes have had an immediate effect, with a big improvement in pass rates. The plan now is to show off pass rates up until the end of April. Webb (pictured) said that the association will not be resting on its laurels and will continually monitor the situation going forward.

She also revealed that the AAT plans to provide the breakdown in grades alongside the 12-monthly pass rates, which are issued at the end of March and September each year. Going forward, both students, colleges and employers will know how many students

achieve a pass, merit or distinction. In addition, the AAT is planning to improve its online study support experience. A new portal will be available around September time, Webb explained. It is envisaged that this will be a one-stop shop and provide a more tailored experience. • For more from the conference go to page 13

Is diversity stalling?

£850k windfall bad news for accountancy student Second-year accountancy student Sibongile Mani may soon be looking for a new profession. The South African student at Walter Sisulu University (WSU) recently hit the headlines when her regular hardship grant of £85 was accidently increased to £850,000. Mani then blew £50,000 in 10 weeks, sharing her ‘windfall’ with

SIG sacks Deloitte In a rare move, shareholders of SIG have rejected the reappointment of Deloitte as external auditors. The recent AGM voted against the reappointed of Deloitte by as massive 395,827,122 votes to 108,962,143. There was also a substantial number of votes cast against the financial statements. Following the vote SIG’s board said that it is committed to carrying out an EU Audit Regulation compliant audit tender as soon as practicable. In the meantime. Deloitte will conclude the closing out and signing off process of the group’s subsidiary company accounts for the year ended 31 December 2017. 8

AAT to publish new pass rate statistics

friends. The money was spent on holidays, shopping sprees and Beyonce-inspired makeovers. The error came to light when a fellow student turned whistleblower when they saw a bank statement that showed Mani had £800,000 in the bank. She will be returning to the court on 2 July after being released on bail.

KPMG to let 400 go The corruption scandal in South Africa means 400 KPMG members of staff are likely to lose their jobs there, as smaller regional offices are closed and the firm operates from its four bigger centres. The blame was squarely put on “recent client losses and current levels of demand for certain services”. KPMG has said its business in South Africa remains ‘of significant scale’, with 130 partners and 2,200 staff. Bring on the drones Drones could add £42bn to the UK’s GDP by 2030, says new research from PwC. The study estimates that there will be 76,000 drones operating across UK skies by this time. More

Ethnic diversity at the top 10 accountancy firms has stalled, showing little growth over the past two years, according to a new study by Accountancy magazine. It says that any improvements have been so marginal that it could be argued that no progress has been made since its last survey in 2016. The most inclusive firm is EY, which has the largest percentage of BAME partners and staff. The Big 4 company has 63 BAME partners (9.3%) and 2,908 BAME staff (30.2%). Smith & Williamson, BDO and Grant Thornton have all suffered losses across the various staff grades with the rest of the firms seeing snail-like growth, said Accountancy’s Amy Austin. The survey found that 6% of top 10 partners come from the BAME community. That amounts to 260 out of 4,092 partners.

than a third of these (36%) could be utilised by the public sector in areas such as defence, health and education. Across the UK, PwC estimates there will be 628,000 people working in the drone economy by 2030. New types of jobs to develop, build, operate and regulate drones will be needed. EY supporting trans equality EY is backing a Stonewell UK initiative that hopes to bring about positive change for trans and non-binary people in the workplace and the community. A new Trans Allies one-day programme aims to provide employees with a deeper understanding of the impact of transphobia, along with the tools and language to help better include trans people at work. PQ Magazine July 2018

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PQ news

ZOE ROBINSON Why your qualification is priceless

For many accountancy students, exams are no longer at the same time each year, but for those sitting GCSEs and A levels, June is an important month. And in order not to miss this opportunity there have been stories recently about how students can make their life easier by cheating. The first concerned YouTubers promoting firms that produce expert answers guaranteeing a pass – for a fee, of course. The second was around the banning of watches in exams, because you can now buy something that looks like a watch but with a press of a button reveals the answer. Unfortunately, for some, exams are treated as commodities; the problem is that, like a commodity, it begins to lose its value when mass produced. The pressures on students to succeed can make them feel they have to pass at any price. But the market will ultimately respond by devaluing the qualification and the individual will end up with a worthless certificate. Passing an exam should mean something and for accountancy students I think it does; it’s one of the most important and memorable achievements in your career. Once qualified you will become a different person, stronger and more confident. Proving to yourself, and others, that you are able to work under pressure, prioritise and make sacrifices. It is these qualities you should be most proud of and what employers value. In many ways they are what makes a professional qualification priceless. Zoe Robinson is Learning and Programmes Director at Kaplan Financial

Overseas students wrongly deported? Many thousands of overseas students could be entitled to compensation after a landmark immigration tribunal ruling. Theresa May, when Home Secretary, may have wrongly deported up to 7,000 international students after an English language test cheating scam. Most of the students involved were not allowed to appeal the Home Office decision or even show their proficiency in English. Some of these students were detained by officials, lost their jobs, and left homeless as a result. All despite the fact that they were in the UK legally. After allegations on national television of systematic cheating at some colleges where students sat Continued from page 1 matters, and this was not just about impact on the bottom line. She pointed to its importance in attracting the top talent, too. That said, she pointed out it has been widely reported that companies with gender diversity are 15% more likely to financial outperform those who don’t have one! And Hurst emphasised that PwC was putting diversity at the heart of its values. “We can’t afford to look out of touch and irrelevant,” she said. Interestingly, she revealed there are now financial consequences for those who do not help the firm achieve its diversity goals. This was after the firm discovered that many senior people were not aware of the targets set in 2015. They are aware of the targets now! It was a common thought at

the Test of English for International Communication the UK government ‘acted’. It brought in a US-based company (ETS) to run analysis on the tests. Some 33,725 individual tests were deemed ‘invalid’ and these students’ visas were revoked. Another 22,694 tests were classed ‘questionable’. These students were invited to an interview, and by the end of 2016 nearly 36,000 had had their visas revoked. However, in later checks ETS’ computer program was found to be wrong in 20% of cases. This lead to some students taking their case to immigration appeals tribunal, which said the evidence used by the Home Office to revoke visas could be seen as having “multiple frailties and shortcomings”. A Home Office spokeswomen said: “There is no limit on the number of genuine international students who can come to study in the UK, nor is there any intention to impose one.”

Get over it!

PwC that women were not making it to the top because they didn’t return after maternity leave. However, research quickly found this simply wasn’t true and in fact they were getting stuck at management level. That meant policy changes could address this problem directly. When the audience was asked if their current workplace was inclusive some 65% said it was; 35% said not. They were also asked if having quotas was a way to address the problems. Here some 60% said no and 40% yes. The launch came as Stonewall research showed two in five students (42%) have hidden

their identity at university for fear of discrimination. Incredibly, 7% of trans students had been physically attacked by another student or member of university staff in the past year. A survey of people in work found more than a third of LGBT staff (35%) have hidden the fact that they are LGBT at work for fear of discrimination. And nearly two in five bi people (38%) aren’t ‘out’ to anyone at work. Workplace bullying continues to be a serious problem for LGBT employees. Almost one in five (18%) have been the target of negative comments or conduct from work colleagues.

indicators or commodities on which investors would base a decision.

Can I have £100,000? Financial accounting students at Imperial College Business School have apparently persuaded academics to give them £100,000 so they can learn how to invest (wisely?). The masters students will manage the investment fund and, hopefully, the experience will make it easier for them to find a job – if they make a profit. The six students will have to follow ethical guidelines and will be overseen by an advisory board of academics and industry figures.

In brief Hot weather doesn’t help Students may need to avoid hotter weather if they want to better exam results. A new 13-year study by Harvard has shown that there is a link between higher temperatures and lower exam pass rates. Researchers calculated that for every 0.55C increase in average temperature there was a 1% fall in learning. Interestingly, colder days have no negative effect on pass rates. Harvard’s Joshua Goodman said policymakers and parents have underestimated the 10

significance of temperatures in colleges and overheated exam halls. In mood for cryptocurrencies New research has found that cryptocurrency prices are not influenced by economic factors but are instead driven purely by the mood swings of investors. A study by Warwick Business School of the 14 largest cryptocurrencies (including bitcoin) from April 2016 to September 2017 found no correlation with any economic

Brexit hampers reform Brexit is likely to curtail muchneeded local government reform for many years to come, says CIPFA CEO Rob Whiteman. He told delegates to the recent conference in London that local government would be “an uncertain place for the next 10 years”, and said he could see no solutions to this problem coming from central government.

PQ Magazine July 2018

PQ Accountex news

Welcoming your robot colleagues Half of accountants would feel comfortable working alongside a ‘robot colleague’, according to new research from FreeAgent. Interestingly, 32% of respondents said they still didn’t know how they would feel, and a further 18% admitted they felt uncomfortable about the whole idea.

FreeAgent’s CEO Ed Molyneux told PQ magazine that he felt some might think it ‘remarkable’ that half of accountants are embracing the idea of robots, but they want the boring and menial work to be taken away! There also appears to be a lot of optimism about the future of the accountancy profession.

Molyneux said that Generation Z accountants will reinvent the profession as they go along – they will simple use their skills in a different way. Respondents were more sceptical about cryptocurrencies, such as Bitcoin. More than half (58%) believe that very little, or no accountancy work, will be conducted in cryptocurrencies in five years’ time. Molyneux felt Bitcoin behaved more like a stock than a currency. Meanwhile, the interesting stuff like blockchain might be some 10–15 years away from full implementation.

Accountex briefs The one app you need MyFirmsApp has unveiled its new OneApp layered mobile platform at Accountex. As it says, no firm big or small should be without an app and its OneApp allows accountants to be at the heart of their clients’ mobile lives. Most of us have around 40 apps on our phones (see how many you have!) and having an app can help firms create a real differentiator in the marketplace. It’s also allows firms to

communicate in a way that many companies now expect. First MTD filing Intuit QuickBooks has submitted its first Making Tax Digital (MTD) VAT filing to HMRC. The successful beta test and first clean tax filing through QuickBooks Online represents a significant milestone towards open market availability. MTD for VAT is coming into effect from April 2019.

Something for nothing Onkho is offering accountants in practice its compliance workflow solution for free. It forms an integral part of the Onkho practice management system but works as a standalone module. You could get some Brownie points from the owner of your firm by helping them to automate the workflow! To sign up for Onkho free workflow visit compliance-workflow-for-free-pr

Expenses made easy

One of the stars of this year’s Accountex was Expend, the all-in-one expenses management solution that automates and manages business spending. Expend offers a suite of time-saving expense management tools, including smart payment cards, business accounts and apps. PQ spoke to co-founder Rudolph Van Graan, who as a consultant had the same problems getting his expenses approved and paid as everyone else. Starting in 2014 with a company worth nothing and no backers or capital, he has created a hugely success business employing 13 people in Shoreditch, the centre of the London tech world. He felt accountants would love Expend as it gives them transparency. As Van Graan says: “They are in total control.”

A leading qualification for a changing world We’re redesigning the Professional level of the ACCA Qualification. Why? To ensure that the qualification is as relevant as possible, so that ACCA professionals continue to be the most valued and sought-after across the globe. The first changes have already taken place from October 2017 with the introduction of the new Ethics and Professional Skills module. This sets the scene for the first sitting of the new Strategic Professional examinations from September 2018.

Find out more and start planning for the changes now:


PQ Magazine July 2018

AAT conference PQ


he AAT examiner is worried that only 30% of students who enter the Professional Diploma Synoptic Assessment (PDSY) have successfully achieved all three of the contributing units (FSLC, MABU and MDCL). This was a shock to many tutors at the recent Training Providers’ Conference. The synoptic is supposed to assess a student’s knowledge of papers they have completed and mastered. How is this the case if 70% of sitters have such big gaps in their learning, asked one top tutor. He was not surprised that the cumulative pass rate was 41.2%. The PDSY examiner also said that students need to improve their written skills. Generic answers don’t go down too well, you must link your answer to the task scenario. Other areas where students struggle

Concern over reason for PDSY pass rates are the detection of errors and what should/should not be included in cash flows. Knowing which decisions lie in the hands of directors and which require shareholders to decided also needs to be mastered properly. Synoptic guru Catherine Littler (pictured) felt many students find it difficult to analyse an accounting task and use a spreadsheet to complete a task. In addition, students do not seem to be able to free write

Graham Hambly reports from the recent AAT event

confidently and competently. Along with poor exam technique, many students also do not appear to be prepared for the assessments they are sitting. And it’s not always the student at fault. Littler felt that there is sometimes a lack of teaching for certain units, and an over-reliance on students reading textbooks. There is also a tendency to teach to passing the assessment rather than understanding the content. Another problem area is the lack of computer room time, which is key in good pass rates. PQ

Read the whole paper first AAT students must take time and read the synoptic assessment thoroughly before they begin to write, says Maureen O’Mara of Blue Horizon Training. That means teaching students to resist the temptation of writing an answer straight away, she told her packed session at the Training Providers’ Conference. She wants PQs to value their thinking time by taking a deep breathe and reading the question carefully before going back to the beginning to work out where the marks are. Sitters are also not answering the question but rather a question they would like to be asked. O’Mara went on to suggest that many students are not writing sufficient content to gain all the marks available. Students need to understand what the active verbs in the questions are asking them to do. She gave the following examples:

Analyse: to break an issue or task into its component parts to enable a discussion to take place that considers the arguments for and against a position. That includes/considers evidence as to the inter-relationship of these points. Evaluate: use evidence to both agree and disagree with a position but come to a final conclusion that is justified and based on your evidence. Compare: use evidence to identify similarities and differences between one or more phenomena; are some more important than others? Explain: clarify a subject by giving a detailed account of what it is, how and why it may occur by defining key concepts or complex procedures. Justify: make a case by providing evidence to support a balanced argument before considering your conclusion.

AAT student stats

• Average time to complete all AQ levels – 1,100 days • Students typically start revising two to four weeks before their assessment. • Students’ most valued study materials - Textbooks (36%) - AAT study support (22%) - Student’s notes (16%) - AAT study weeks (115) - Training provider content (8%)

The award goes to… So who walked off with the recent AAT Training Provider awards? Here are all the winners

The AAT qualification has provide a godsend to many, no more so than the recipient of the AAT Student of the Year, Tamara Salter. A proud Tamara, who studies with Premier Training, said that despite ongoing health issues “studying for the AAT qualification was one of the things that gave her something positive to focus on during a very difficult period”. The AAT Apprentice of the Year, Rebecca Mooney, is a role model to other apprentices and showed real resilience dealing with her family home being flooded in Carlisle. As AAT President Nicky Fisher said: “It is the AAT’s aim to help people change their lives through their studies and it was great to meet people who have done just that.” So who were all the winners on the night? PQ Magazine July 2018

Student of the Year: Tamara Salter, Premier Training Lifetime Achievement – AAT Tutor: Mike Webster, Cardiff & Vale College Best Use of E-learning: Kaplan On Demand (pictured) AAT Champion: Accountancy Learning Ltd Pauline Sparkes Award for Best New Training Provider: Training Link Distance Learner of the Year: Miranda Buchanan, The Training Place of Excellence. Distance Learning Provider of the Year: AVADO Learning Apprentice of the Year: Rebecca Mooney, Carlisle College Apprentice Provider of the Year: The Training Place of Excellence Training Provider of the Year – small: All

Inclusive Training Training Provider of the Year – medium: Canterbury College Training Provider of the Year – large: First Intuition Distance Learning. International Training Provider of the Year: Botho University Tutor of the Year: Sylvia Segone, Botswana Accountancy College 13

PQ CIPFA spotlight

Apprenticeship Levy: one year on David Fields looks at how the first 12 months of the controversial Apprenticeship Levy has panned out


he Apprenticeship Levy was introduced in April 2017, requiring all organisations (both public and private sector) with an annual pay bill of over £3m to pay 0.5% of their pay bill into a levy pot, which can be used for the training of apprentices. Latest figures show that only £100m of the £1.3bn levy collected so far has been spent, with 195,200 apprenticeship starting between April and November 2017. This represents a 40% drop compared with 326,700 starts in the corresponding seven months in 2016. So what’s caused this? First, employers have two years to spend their levy pot and some are quite rightly taking time to decide exactly how and where this is spent. Second, the levy can only be used to cover training costs and not the salary costs of apprentices or the additional administrative costs in running an apprenticeship scheme. And, third, awareness of the Apprenticeship Levy still needs to improve, something that the National Apprenticeship Service (NAS) is working hard to achieve. The Local Government Association (LGA), which represents 370 councils in England and

Wales, says significant changes to the Apprenticeship Levy are needed to achieve its potential. The complexity of the system, coupled with the fact that a number of key apprenticeship standards such as teaching and social care are not yet available, are crucial issues that need to be addressed to help increase the number of starts.

During House of Common’s Education Select Committee meeting this May, which looked at the quality of apprenticeship and skills training, Apprenticeship and Skills Minister Ann Milton stated that the public sector has been sluggish to take the apprenticeship programme up, seeing it as a burden rather than an opportunity. CIPFA’s own experience with levy paying employers in the public sector has been positive. They are, however, faced with the additional burden of government procurement requirements as they look to select apprenticeship training providers. This has had an effect on the low number of apprenticeship starts to date, but the public sector will catch up quickly. Ultimately, the apprenticeship policy will be a success, but it does need a few tweaks along the way to help it achieve the government’s stated aim of achieving three million starts by 2020. Improvements needed include more flexibility with the off-the-job requirements; reducing the complexity of the digital apprenticeship system (is a double lock really required?); ensuring new standards and End Point Assessments are made available; improved incentives for SMEs to take on and train apprentices; and, importantly, promoting awareness and the benefit of employing apprentices. PQ • David Fields, CIPFA

Have you booked your exams for September 2018? Standard entry for this closes on 30 July 2018. Find out more:


PQ Magazine July 2018

ACCA exams PQ


eptember is fast approaching, so it is important our ACCA students are fully aware of all the changes that have taken place, further changes yet to come and things that will remain. ACCA’s redesigned qualification aims to give students the strategic abilities and advanced skillset modern accountants need to shape the future of global business. The changes lay emphasis on employability and applying skills in the modern work place.

Ethics and Professional Skills In October 2017, the new Ethics and Professional Skills Module replaced the Professional Ethics module. This module introduces the professional skills students need to succeed in the workplace, while retaining the emphasis on professional ethics. As new technologies emerge and moral dilemmas become more complex, it is pivotal accountants are always working to the highest ethical standards. This is why ACCA has developed this new module, which is an online learning tool testing students’ decision-making and behavioural skills in a number of realworld business scenarios. This is going to be even more vital as we move further into a digital age. The module is yet another example of how ACCA is getting students ready for the work place, by: • introducing a full range of advanced ethical and professional skills. • exposing students to realistic business situations to consider how the professional skills and ethical judgement apply. • introducing skills like commercial awareness, problem solving, leadership, ethical judgement, team work and personal effectiveness. Strategic Professional From September, the highest level of the ACCA Qualification will be known as Strategic Professional, reflecting the skills students will gain through the Strategic Professional exams. With this change comes two new exams: Strategic Business Leader (P1: Governance, Risk and Ethics and P3: Business Analysis will no longer be part of the exams) and Strategic Business Reporting (which replaces P2: Corporate Reporting). These exams will be introduced in September of this year, making June the final sitting of the existing Professional level exams. Strategic Business Leader This ground-breaking integrated case study exam is based on potential real life challenges accountants face in the workplace. Students will complete a number of tasks to demonstrate they have the right technical and professional skills, demonstrating that they are able to add value to their organisations. The exam is designed to mirror the PQ Magazine July 2018

Think ahead to

SEPTEMBER Alan Hatfield explains imminent changes to some of the ACCA exams workplace; students need to present their answers to the standards employers expect from professionals. They should also consider how to present ideas to different stakeholders in a clear and compelling way – a skill that is essential for modern finance professionals. Strategic Business Reporting This enhanced corporate reporting exam exposes students to the wider context of finance and business reporting – and gives them the skills needed to communicate the impact of transactions and reporting. Strategic Business Reporting builds on the qualification’s current holistic view of reporting. The underpinning principles covered in P2 (Corporate Reporting) remain, but changes introduced mean students will develop the skills to engage with many key stakeholders, explain reports accurately and confidently speak the language of business. Options exams ACCA’s Options exams remain within this level, continuing to support students gain expertise in specialist areas. For the Strategic Professional exams students have the flexibility to take their exams in any order of their choice and can choose two of the following four options: • Advanced Financial Management. • Advanced Taxation. • Advanced Performance Management. • Advanced Audit Assurance. • Computer-based exams All of ACCA’s Applied Skills exams are available by computer-based exams (CBEs), giving students an experience parallel to the modern workplace environment. The exams incorporate primary tools finance professionals use on a daily basis – including spreadsheets and word processors – to assess whether a student is workplace ready. This makes new accountancy professionals more efficient at the start of their career journey, allowing students to apply their knowledge using the tools and technologies that employers need. ACCA has also been working with tuition providers

to ensure they are prepared for the changes and is another support tool for both tutors and students. ACCA recommends studying with a tuition provider, not only to benefit from their knowledge of the changes, but the statistics show students who do, are more successful in their exams. What remains the same? Applied Knowledge and Applied Skills: These exams give students a broad understanding of essential accounting techniques, such as effective business operations, management accounting and financial accounting. Applied Skills develops the practical skills that make up the toolkit of modern finance professionals, including corporate and business law, taxation and financial reporting. ACCA regularly updates the content of these papers, which prepare students for Strategic Professional exams. Practical experience requirement (PER): Students need to gain at least 36 months’ relevant finance experience and achieve a number of performance objectives to become an ACCA member. This is where students put all their theoretical knowledge developed throughout their exams into practice in the workplace. ACCA regularly reviews the performance objectives to make sure the PER reflects the changing role of the accountant and meets the needs of employers. Exciting time This is a really exciting time at ACCA, as all these changes come into effect. Students will achieve the skills, knowledge and professional values needed to succeed in their careers. After undertaking extensive global research into the future of accountancy, ACCA updated the qualification to make it even more relevant for today’s business world. The improved qualification will provide the forward thinking finance professionals our fast-changing world needs. PQ • Alan Hatfield, executive director of strategy and development, ACCA 15

PQ ICAEW spotlight

The letters matter A professional designation can set you apart, standing you in good stead throughout your career


s business becomes increasingly demanding, more and more firms are looking for professionals at nonchartered level who have the right skills, knowledge and experience to meet those needs. But how can you be sure that you have these, and equally, how do you let others know? Your qualification is a great first step. It demonstrates you have put in the hard work and time to build a solid base. Yet business requirements change at a rapid rate and what you learned a year ago might not be as applicable today. This is where professional development and commercial awareness come into play, and how becoming a designated professional can set you apart. A designation demonstrates that you are prepared to keep putting in the same amount of effort you did towards your qualification, whilst

adhering to high standards and regulations valued by organisations around the world. It equally shows your commitment to your profession. By keeping up with the changes in your industry you can make informed business decisions. Organisations need more designated professionals and this is why we have introduced the ICAEW Business and Finance Professional (BFP), a new designation offering professional certification on your way to becoming fully qualified. There are more reasons why gaining a designation could mean a lot for your career. Among others, with a designation, you: Gain professional recognition: As a part qualified professional, becoming recognised by a membership organisation is a huge achievement. Not only are you being rewarded for your efforts so far – the ability to retain your status means you are consistently performing at a high standard. It shows you have gone through a demanding evaluation process and met the level of competence set by an international institution. This recognition is as important to your employer as it is to you, as you would be adding value to the organisation, but also because designated staff can enhance credibility with clients.

Add designatory letters to your name: Designatory letters aren’t decorative, they actually add value to your professional standing, helping you stand out from the crowd. What these letters signify is that you have been acknowledged by ICAEW, that you are qualified to give professional advice on business issues and that you have the right knowledge, skills and experience to contribute to the success of your organisation. Get invaluable support: Having a designation isn’t only the means of demonstrating the skills you already have, but what you’re aiming to achieve. It’s a commitment to your professional and personal development, and having access to relevant resources can support you in the journey. As an ICAEW Business and Finance Professional, you would have access to a wealth of resources, including the ICAEW helplines. These are there for you if you come across ethical dilemmas, technical or legislative issues or just need guidance on concerns that have an impact on your organisation as a whole. To gain BFP status, you will need to meet the ICAEW standards relating to technical knowledge, business skills and understanding of ethics. These are met through the completion of our ICAEW CFAB qualification (or relevant qualification from another professional body), 12 months’ work experience and our online Ethics Learning Programme. You can find out more about the designation at PQ • Thanks to the ICAEW for this article

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PQ Magazine July 2018

AAT survey PQ

The future accountant Andrew Williamson has a vision about what the accountant of the future will look like


he accountancy profession has undergone huge changes in recent years. Different software and systems have emerged, which are changing the way we do things. Receipts can be scanned on to phones, basic bookkeeping carried out through an app and invoices paid on the go. Automation of the basic finance processes is starting to take effect and this is a trend that is certain to continue. We know job roles are changing and are set to change even more over the next five years. So what will the future accountant look like and how will roles develop over time? AAT surveyed over 250 accountants and bookkeepers to get a sense of the future. We spoke to students and more experienced members to understand what’s changed so far and how they see the profession developing. How can accountants stay relevant in a world increasingly reliant on technology? Our research overwhelmingly showed that people think technological advances are positive (89%), with over three-quarters saying it had made their job easier or freed up their time to do more interesting things. Some 60% think basic accountancy processes will be fully automated within five years and that automation will be the biggest change for the accountancy profession.

Roles will change to become more focused on information, analysis and business advice. Reporting in real time will allow for issues to be identified quickly and reported to the business and/or clients. Expectations of clients and colleagues will change too. Information will need to be delivered in real time and much faster. However, they will need more help in understanding and interpreting data. Big data will result in information overload for many managers and both directors and finance professionals will need to understand and communicate this information. There will need to be someone to oversee and understand the process. Bookkeeping will become entirely digital and paper processes completely eliminated. There will be an automation of information from banks to software systems. Our respondents predict accountancy will become more IT-based, with a growth in software development and support roles. Skill sets will need to change accordingly. Accountants and bookkeepers will need to understand and use technology, think more strategically and analyse data. This is an exciting time for our industry as accountants can recognise how much value they can add to the information that a computer may produce for them. AAT be will be debating ‘the Future Accountant’ and how the profession will evolve at its annual member conference in June. PQ • Andrew Williamson is the AAT’s Director of Marketing and Commercial

audit PQ

Is it time for fundamental changes in the audit maket? Both Labour and BDO think so, reports Graham Hambly

No more Carillion scandals?


hadow chancellor John McDonnell is promising an end to scandals such as Carillion on Labour’s watch. And he said he is launching a full review to ‘crack down’ on poor practice in auditing and accountancy industry. The independent review of the entire corporate auditing and accounting regime in the UK will be led by PQ magazine’s very own columnist Professor Prem Sikka, now of Sheffield University. The review will consider whether regulatory bodies should be merged, abolished or restructured, and it will also consider what penalties or fines should be imposed in future. McDonnell didn’t hold back, claiming the lack of openness, transparency and accountability means nobody ever seems to be punished for their transgressions. He also feels the accountants and auditors seem to operate with impunity

PQ Magazine July 2018

Prem Sikka

while lining their pockets. Under the next Labour government, McDonnell promised the ‘big six’ firms will not be allowed to continue to act like a cartel that prevents new market entrants while driving down standards. “Otherwise it will further infect the rest of

our economy and business community,” he said. Professor Sikka’s report will be launched at Labour Party Conference in September. Meanwhile, the fifth biggest player in the audit market, BDO, has joined the call for an overhaul of the way in which auditors compete for the top contracts. BDO has told regulators that a level playing field is almost impossible because the present tendering system is just too expensive and is stifling competition. It revealed that it can only afford to pitch for around eight audits a year with the top FTSE firms as they cost £250,000 a pop. BDO has estimated that along with the Big 4 firms that amounts to £350m of tendering costs over the past 10 years alone. Managing partner Paul England said: “The process of tendering for audit contracts is not effective and not efficient for either the buyer or the firms pitching.” PQ 17

PQ ACCA exams

What the ACCA examiner wants What did the ACCA examiner reports highlight after the March sitting? Here’s the F5 to F9 papers

F5 It was concerning that in the March report the examiner talked about topics covered in the ‘December 2017’ exam. We assume this was an error! The range of topics that appeared in section B in March 2018 were: costing; linear programming; variances; throughput accounting; short-term decisions; and budgeting. Because more candidates attempted the CBE format a wider range of syllabus areas were examined. The questions in March were drawn mainly from: learning curves; transfer pricing; budgeting; performance management; and CVP analysis. When it comes to learning curves the examiner said you have to understand that calculations are based on cumulative, total production. Students also struggled with the topic of transfer pricing. Once the advanced side of transfer pricing comes in very few candidates seem to know the theory. Candidates can comfortably discuss the selling and buying division’s point of view, but few realise that from the company’s perspective (maximising profits) internal contribution is irrelevant – the question becomes a make versus buy decision. F6 Candidates were presented with questions in section C drawn mainly from: tax planning for married couples; computation of the income tax payable by an individual; the self-assessment system for individuals; the child benefit income tax charge; and computation of a company’s corporate tax liability. F7 The examiner has highlighted the areas where March candidates were weak in section B. They are: events after the reporting period; leases and different types of revenue, specifically revenue from construction contracts and revenue from contracts that offer both the supply of goods at a specific point in time; and services that are provided over a period of time. 18

For section C, the questions were drawn from the areas of: preparation of single entity financial statements; analysis of single entity financial statements; preparation of consolidated financial statements; and analysis of consolidated financial statements. The examiner has asked CBE candidates to ensure that all workings are shown accordingly in both the word processing and spreadsheet response area. Candidates were also advised against putting their entire analysis in a single cell in the spreadsheet. This either gets stretched across a single row and requires the marker to hold and scroll to view, or requires the marker to ‘unhide’ the information. F8 Section A in the March examination had questions on the following areas: professional ethics and application of ACCA’s code of ethics and conduct; substantive testing including test on noncurrent assets and inventory; written representations; audit finalisation and review; and auditor’s reports. In Section B, the performance in audit procedures questions continues to be disappointing. The examiner said that many candidates remain unable to describe the required number of substantive procedures, or the

procedures were often vague. And despite improvements in auditor’s report questions in recent sessions the performance in March wasn’t so great. Another ‘very disappointing’ area in March was audit evidence questions. In most cases candidates remain unable to tailor their knowledge of substantive procedures to the specific issues in the question requirements, with many providing tests of controls rather than substantive procedures, or providing incorrect procedures, or concentrating on one type of test. Tests of controls are an area of internal controls that students also need to get a handle on. Simply repeating the word ‘check’ does not address the controls identified! The March exam also tested audit framework and regulation, and planning and risk assessment. F9 The examiner said there continues to be some common themes for errors made by candidates on numerical investment appraisal questions. For example, students do not identify correctly relevant cash flows for an investment project or make mistakes with respect to the timing of future cash flows. Another area which caused difficulty was selecting the appropriate discount rate to be used in a lease v buy evaluation. When it came to business valuation a common error was not excluding internally generated goodwill from an asset-based valuation of a company. The examiner also wondered how many candidates can calculate a conversion premium. Other areas to look at here are price earnings ratio and the Gordon growth model and dividend growth model. For risk management, students struggle to understand the features of risk management derivatives. This is from both a foreign exchange and an interest rate perspective. Candidates struggled to understand the causes of interest fluctuations and the underlying theories. You might also need to study up on gap exposure and the significance of the types of gap. When it comes to the financial management environment there is a lack of understanding about measures to reduce stakeholder conflict and what a company should do to maximise shareholder wealth led to errors. In March, the section C questions were drawn from the following: investment appraisal techniques; allowing for inflation and taxation in DCF; adjusting for risk and uncertainty in investment appraisal; specific investment decisions; sources of and raising business finance; estimating the cost of capital; sources of finance and their relative costs; and capital structure theories and practical considerations. PQ PQ Magazine July 2018


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PQ ACCA F8 paper

Getting ready to pass

Audit & Assurance I

n a previous PQ article I explored three problems faced by Audit & Assurance (F8) candidates and offered solutions to each of these (December 2017). While I certainly wasn’t expecting to see the global pass rate rise on the back of my article it still disappoints and frustrates me to see the global pass rate hover around 40%. Wouldn’t it be great if you could spend time listening to the actual Audit & Assurance examiner highlighting past candidates’ strengths and weaknesses and giving advice to future candidates? Well, I can’t set up a meeting between you and the examiner but for every sitting the examiner writes a report that does just that – and it worries me how few Audit & Assurance candidates actually read it and reflect on its insight. Let’s focus on just five short abridged extracts from the March 2018 F8 Audit and Assurance examiner’s report and see what we can learn that will help future candidates.

Extract 1 – General advice “Candidates who do not spend sufficient time practising questions are unlikely to be successful as the written questions in particular aim to test candidate’s application skills.” It really is that simple! Audit & Assurance is a practical paper where you must be able to apply your knowledge to a scenario. It’s highly likely you will be faced with practical questions on audit risk, internal controls and audit procedures, so you really can make sure you’re prepared by practising exam standard questions and debriefing thoroughly. Extract 2 – Read the question carefully “As in all other areas of the syllabus, it is important that the candidate carefully reads the specific requirement of the question. For example, if a question asks candidates to describe the responsibilities of the auditor in accordance with ISA 250, no credit will be awarded for explaining the responsibilities of management.” I occasionally speak to candidates who tell me that they were sure that they passed, answering every question as well as they could. In this situation I often think candidates will have misread a question and answered what they wanted 20

Paul Kirkwood has some simple advice: if you want to improve your chances of passing then read the examiners’ articles to see rather than the actual question set. In this example, if a candidate described management responsibilities, not only would you not gain any marks but you would be wasting valuable exam time which could be spent gaining marks elsewhere. So how do you ensure you answer the exact question set? Well, you should always read the requirement twice and highlight key words in the requirement as well. When sitting the CBE I advise candidates to slow down when reading the question and even put their finger on the screen when reading the requirements to make sure they pick up the correct information. Extract 3 – Better audit risk answers “In common with other sessions, a significant number of candidates often did not explain how each issue could impact

audit risk and therefore were not awarded the second half mark. To explain audit risk candidates need to state the area of the financial statements impacted, with an assertion (e.g. cut off, valuation, etc.), a reference to under/over/misstated, or a reference to inherent, control or detection risk.” This extract relates to an audit risk question and highlights both where candidates go wrong but also, crucially, how to improve in the future. In practical audit risk questions you will likely answer in two columns – column 1 explains the audit risk and column 2 explains the auditor’s response to that risk. Here the examiner is giving guidance on the first column, where candidates are required to explain audit risks. Candidates can usually identify the issue that gives rise to an audit risk, which scores a half mark, but often struggle to gain the other half mark available for explaining why it is a risk. If you know this is a typical area of weakness you can focus on this during your exam revision period to make your answers better. However, the examiner continues and tells you what you need to include to score the other half mark! You need to state the specific areas of the financial statements affected and link to an assertion, if possible, or explain whether the risk will lead to an over or understatement. Knowing this, you can review model answers with better insight of what makes a good answer. Extract 4 – Audit procedures issues “A key requirement of this part of the syllabus is an ability to describe relevant audit procedures. Overall performance in this key syllabus area in this exam session was once again very disappointing. In particular care must be taken to address the specifics of the question; often the requirement is to describe substantive procedures to address specific financial statement assertions, such as valuation, any tests provided which did not test this assertion would not have scored any marks. A good example to practise is ‘Dashing Co’ from the ‘Sample September/December 2017 Questions’.” In this extract the examiner highlights a syllabus area where students’ answers are often poor. Questions requiring PQ Magazine July 2018

CIMA spotlight PQ students to suggest substantive procedures are often challenging and it’s good to know that other candidates find them tough as well. It should also spur you on to focus a little more in this area and the examiner helps by providing an example question for you to practice. As you read the whole examiner’s report you will quickly discover that there are several areas that candidates struggle with and I’m pretty sure that you will find the same areas tough. The key is to make a conscious decision to do something about it. Build better knowledge if required or aim to practise and debrief several questions in these areas during your revision period. Extract 5 – Audit report questions “Candidates are often required to discuss an accounting issue, assess whether the error is material, consider the type of modification, if any, and lastly to discuss the impact on the auditor’s report. Candidates often omit the discussion of the issue. In order to be awarded marks for discussing the issue candidates should not just repeat the information from the question. Candidates need to explain the effect of the item being incorrectly recorded, eg if this results in assets/liabilities/profit being over/understated. Weaker candidates continue to provide every possible auditor’s report option available.” Here the examiner is really encouraging you to make sure you maximise your marks in this area of the syllabus. Make sure that you deal with all the areas that will gain you credit in the exam especially discussing the accounting issue where relevant. For example, if there is a material receivable from a customer that has gone bankrupt after the year end, explain that if this is not adjusted then receivables and profit will be overstated. Then you can move on and consider how the audit report will be impacted if the adjustment is not made. Also look out for bad practice that is highlighted by the examiner – here telling you that weaker candidates often list out all types of audit report modification in the hope of getting some credit. This type of scattergun approach will not score good marks. Summary Wherever you are in your Audit & Assurance studies I hope this has encouraged you to read an examiner’s report. They really do contain a wealth of insight and advice to improve your performance. And now for the really good news! Examiner’s reports are available for every paper and really should be an integral part of the learning materials you use when preparing for your next ACCA paper. PQ • Paul Kirkwood is the Head of Learning (ACCA) at AVADO PQ Magazine July 2018

Keep on keeping on Jackie Durham explains how if you keep your eye on the prize you can stay motivated during your studies


was asked to write a short piece on motivation, so I thought I’d do some personal research to see how motivated I could be at 9am on a Monday. The answer seems to be… not very! OK, that’s good, I can challenge myself to see what will inspire me to get the job done. Or maybe not… Hmm, this isn’t going too well, so what can I do about it? One of the ladies who writes technical articles for me (sometimes on fairly dull subjects) swears by the power of McVitie’s Hobnobs but I’m on a diet… and it’s far too early to turn to the reviving powers of gin. Obviously, I am going to need to think about my motivations a bit more here. Essentially, for most people motivation comes down to simple ‘sticks and carrots’ – we either seek the reward for success or fear the outcomes of failure. Unfortunately, this isn’t working for me, as the stick isn’t really enough to be worried about as I can always write this piece later or on another day, and the carrot isn’t so great either, it will be a job ticked off the to-do list which is always a good feeling but quite possibly not enough to keep me at my desk when the creative juices aren’t flowing. For those of you studying CIMA, you will need lots of motivation and inner strength as it can be a long slow journey. On the upside, pass rates are very encouraging, even for the more challenging subjects in the P pillar, and the rewards are generally very good – pay rises and promotions for exam passes, the potential to have a rewarding career and the respect of friends and family. The downside is that we can all hit a stumbling block, that topic we just can’t master or the subject we just can’t pass; then

we are in danger of hitting the brick wall generally known as fear of failure. Unfortunately, fear of failure can hold us back, sometimes from even trying again. When that is the case, we need to review our personal motivations find out what we could/should be doing differently and turn sticks into carrots! Experts in many fields, including successful sports people, often recommend visualization. Imagine yourself on the day you get that pass, the smile on your face, the sense of achievement and relief, the praise of your peers and pat on the back from your boss; see yourself celebrating and spending the extra money you will earn. Others would simply say, dust yourself off and ‘get back on the horse’ – try again as soon as possible. Still more might say don’t stress, don’t be hard on yourself, these exams are tough but you’ll get there one day if you keep trying. All of the above approaches can be useful depending what sort of a personality you are, but they lack a vital ingredient essential to overcoming failure – working out what went wrong before trying again! I sometimes bore even myself with this little truism, but unless you heed it, no amount of sticks, carrots, motivation will guarantee success next time around. Reflect on what you did or didn’t do in your exam preparation, reflect on the exam itself, review your exam feedback, talk to your tutor if you have one, colleagues if you haven’t; try to identify where you might have gone wrong and where you need to improve. When you’ve gone through that process and developed an action plan you will feel more optimistic and confident – that’s the best motivation anyone could wish for. Reflect, review, try again and succeed! PQ • Jackie Durham, education and training consultant, CIMA 21

PQ tax evasion

PQ tax evasion

No safe havens PQ magazine editor Graham Hambly reports on how the UK is reforming offshore tax evasion


he UK government’s current ‘No Safe Havens’ strategy aims to ensure there are no jurisdictions where UK taxpayers feel safe to hide their income and assets from the taxman. It also wants would-be offshore evaders to understand that in future the risks and punishments for evasion will become too great. With this in mind, new vigorously enforced sanctions are part of the plan. New legislation in the form of the Requirement to Correct (RTC) now obliges taxpayers who have undeclared UK tax liabilities in respect of offshore interests to put things right by telling HMRC about the outstanding tax due. The consequence of not meeting the requirement by failing to carry out the necessary correction by 30 September 2018 would see the taxpayer liable to a new set of tougher penalties for a Failure to Correct. The legislation was enacted in November 2017 following Royal Assent of the Finance (No2) Act 2017. It requires taxpayers to disclose any outstanding UK tax related to noncompliance, involving offshore interests, as at 5


April 2017. This applies to offshore income tax, inheritance tax and capital gains tax. The legislation states that non-compliance means failure to notify or deliver a return, or other documentation. Inaccurate returns or documentation are another no-no. Taxpayers who do not correct on or before 30 September 2018 face new penalties. These start at 200% of the offshore tax involved. They can be reduced to reflect disclosure, but not below a minimum of 100% of tax involved. In more serious cases the penalties can be increased even further. At the moment, a typical case has 30–40% penalties, but it has been estimated

these same cases penalties will rise to 150% after 30 September 2017. But there will be no failure to correct penalties if the taxpayer has a reasonable excuse for not correcting. A reasonable excuse, however, does not include relying on advice given by a person who: • Did not have appropriate expertise. • Failed to take account of all the taxpayer’s individual circumstances (so far as relevant to the matters to which the advice relates). • Addressed it to, or gave it to, another person. In the Autumn Budget it was also announced that where HMRC identifies incorrect offshore tax that may have been declared due to nondeliberate mistakes or carelessness, a new minimum time limit of 12 years will apply for HMRC to make tax assessments or issue notices of determination. Penalties may also be due for the extended period if there has been a failure to take reasonable care. The government says that the reason for this decision is because it can take longer to establish the facts and determine the correct amount of tax due in cases involving offshore income, gains or chargeable transfers. However, time limits where deliberate noncompliance is involved remain at 20 years in all cases (both onshore and offshore). In cases involving UK income, gains or chargeable transfers, the time limits remain four and six years, depending on taxpayer behaviour. Draft legislation will now be published over the summer and final legislation will take effect in April 2019. PQ

PQ Magazine July 2018

CIMA case PQ

Getting business ready Stephen Flatman outlines what you should be looking for when you tackle the case studies


hatever level of professional qualification you’re working toward, one thing links all of CIMA’s case study exams: employability. Employers know passing candidates are business-ready. They’ve encountered real-world problems in real-world scenarios and made complex, real-world recommendations. The case study exam simulates a day in the life of a role at the professional level for which you are studying. It’s intended to be as realistic as possible – in the exam you’ll first be sent information as an email or financial report and asked to respond – so put yourself in a working mindset. In the Operational case study exam, your role will be that of a finance officer. You’ll need to think about costing, budgets and risk assessment in the short-term and providing information to colleagues in the finance team and possibly your manager – just as you would at work. The Management case study assessment will make you think about projects and their implementation. You’ll take the role of a finance manager – think management accountant or head of finance position – and be thinking about the next year or two for the business, what business cases you need to build and what changes might happen. You’ll also be communicating with a wider group across the business and other senior managers. At the Strategic Level, the case study exam puts you in the role of a senior finance manager. You’ll be helping with the creation of strategy and looking how to fund and allocate resources to this, as well as assessing for risk. At this level, you’ll be thinking about the next five years of the business and dealing with senior stakeholders, including non-financial executives, and board members. These exams test your understanding of how the subjects that you have already studied relate and depend on each other and your ability to demonstrate technical, business, people and leadership skills when taking the assessment. If you are writing a business case for a project as part of an answer, for example, you’d need to consider where capital funding would come

PQ Magazine July 2018

from, how to manage risk and how you’d manage people as part of the project. Again, it comes back to being work-ready: in the workplace, you’d get a complete answer and not just focus on, say, technical or leadership aspects. Preparing for the exam should emulate real life, too: you’ll get sent information about the business featured in the assessment seven weeks beforehand. Find out as much as you can about that organisation – what challenges they might be facing in their industry, where they are headed – just as you would when preparing for an interview with a new company. The pre-seen material begins the simulation of a real-world environment that’s so important to the case study exam, so a real-world response is crucial. Have your own ideas and then talk to other people. Get into a study group whether that’s private or with a tuition provider. This exposes you to other ideas, challenges your thinking and prepares you for a wider range of eventualities in the test. You’d seek other people’s opinions at work or preparing for interviews; doing the same here will be equally beneficial. Three years’ worth of previous exam scenarios and some passing answers are available to help you, so make use of them. If you’ve previously failed the exam, think about your technique: what could you do differently? In the

assessment, we’re looking for how you’ve applied the most relevant models to a situation, not a list demonstrating your knowledge of all the analytical models and methodologies available. Your boss wouldn’t be happy if you did that at work, so don’t do it in the exam. Think through your answer. You can make notes to structure it before typing and can revise what you’ve written before you move onto the next stage. As in work, so in the exam: once you’ve completed the first stage you won’t be able to go back. New information about your business scenario will be introduced that contradicts what was said in the first section. Don’t panic – we want to see how adaptable and able to take on new information you are. These exams give you the confidence that can apply everything you’ve learned to real situations. Our student survey suggests that those who pass typically get a salary increase, so there’s a good, hard financial incentive for putting the work in too. At all three levels, we’re asking you to make recommendations that could be applied in real life, so remember: you can do well in this exam if you can do exactly what you’d do in the workplace. For more information on the case studies visit PQ • Stephen Flatman – VP, Examinations at CIMA


PQ AAT Advanced Diploma

A step-by-step approach Sam Hannigan explains all you need to know about accounting for the disposal of assets – an important topic


ne area that students tend to struggle with is the disposing of an asset. This is a common area that is regularly tested in the AAT assessments. However, what has become apparent to me during the 15 years I have been teaching AAT is that students do not use the double entry technique to help them. Yet this is the one area that all AAT students learn back-to-front and inside out. If students follow the process of double entry bookkeeping on questions such as the disposing of an asset then this subject would be so much easier. Let’s go through a worked scenario. Remember, the AAT may only ask for certain accounts to be completed in a question like this. However, if you follow the steps below you can prepare whatever accounts they require quite easily. Scenario You are working on the accounts for the year ended 31st March 2018. You have sold an item of machinery on 31 July 2017. This was originally purchased on 1 May 2014 at a cost of £20,800. Depreciation is charged using the straight line method at 20% per annum. The residual value of the machinery is expected to be £1,800. A full year’s depreciation is charged in the year of acquisition and none in the year of disposal. The machinery was sold for £12,200 and a cheque was received. Step 1 Draw a T account for each account you will need. Machinery at Cost, Accumulated Depreciation, Disposal and Bank.

Balance b/d (Step 4)

Disposal (Step 6)

Machinery at Cost £ 20800 Disposal (Step 5)

Accumulated Depreciation £ 11400 Balance b/d (Step 4)

£ 20800

£ 11400

Disposal Account £ £ Machinery at cost 20800 Accumulated Depreciation 11400 (Step 5) (Step 6) Statement of P&L (Step 9) 2800 Bank (Step 7) 12200 (Step 6) 23600 23600 (highest)

Disposal (Step 7)


Bank Account £ 12200


Step 2 Calculate the depreciation charge per year. Remember, we are using the reducing balance method so we need to take into account the residual value. Cost £20800 Less Residual Value £1800 X Depreciation rate 20% = £3800 depreciation charge per annum Step 3 Calculate the accumulated depreciation amount. This is where students trip up as they calculate the number of years owned incorrectly. Therefore, don’t be afraid of writing down your workings. Year 1 1 May 2014 – 31 March 2015 Year 2 1 April 2015 – 31 March 2016 Year 3 1 April 2016 – 31 March 2017 Year 4 1 April 2017 – 31 July 2017 was disposed

= £3800 depreciation = £3800 depreciation = £3800 depreciation = £0 depreciation as this is the year the asset

Step 4 Enter the balance b/d in the Machinery at Cost £20800 then enter the TOTAL Accumulated Depreciation £11400. Step 5 Remove the Machinery at cost as this has now been disposed of and enter it in the disposal account. Debit Disposal Account Credit Machinery at Cost Account Step 6 Remove the accumulated depreciation for the vehicle that has been disposed of. Debit Accumulated Depreciation Account Credit Disposal Account Step 7 Enter the disposal proceeds in to the Bank and Disposal Account. Debit Bank Credit Disposal Account Step 8 Balance off the Disposal Account. Remember to total up the highest side first and the balancing figure will be the profit or loss made on disposal. Step 9 Transfer the balancing figure from Step 8 to the Statement of Profit or Loss (SPL). If the transfer in the SPL is a credit entry then a profit has been made. If it is a debit entry in the SPL a loss has been made. PQ • Sam Hannigan, Premier Training

PQ Magazine July 2018

PQ activity based costing


Activity based costing may not be your favourite subject but it’s one you must get to grips with, says Philip Dunn


his short article will be of interest to AAT and ICB Level 4 students, those preparing for ACCA’s F2 and F5 papers, together with CIMA and CIPFA trainees studying Management Accounting fundamentals. Activity-based costing techniques re-examine the problem that has faced accountants for decades – that of the allocation and apportionment of overheads. Traditional methods of dealing with overheads involves allocation and apportionment of indirect cost to cost centres, from which overhead recovery/absorption rates are determined, usually based on direct labour hours or machine hours. Such methods may be used successfully where there is a limited product range or a limited range of services rendered. However, in the more sophisticated businesses with flexible and rapidly changing product ranges, traditional techniques have proved less than adequate. Thus ABC offers a workable and more effective insight to overhead allocation and overhead recovery. ABC has been defined by CIMA as ‘cost attribution to cost units on the basis of benefit received from indirect activities’. Some would say that ABC is a relatively new technique; however research suggests that it was first used in the US in the 1960’s. As with other management accounting techniques ABC has its own terminology: • Activity: ‘a value adding process that consumes resources’. • Cost Driver: ‘an activity or factor that generates cost’. • Cost Pool: ‘pooling of overhead cost that relates to a specific activity’. • Cost Driver Rate: ‘the product of dividing the cost pool for the activity by the cost driver volume’. ABC involves a set procedure: • Accounting for and the collection of overhead. • Allocation of overhead to form cost pools associated with value-adding activities. • Identification of cost drivers. • Determination of cost driver rates-cost pool divided by cost driver volume. • Recovery of overhead based on cost driver rates and the demand for the activity. This is illustrated in the example that follows. The example is far from exhaustive and aims to outline the principles of the technique. Castout manufacture sea fishing rods. Its budget for the quarter ended 31 March 2018 showed:


Activity Process (Machine) set up Material procurement Maintenance Material handling Quality control Order processing

Cost Pool £ 80,000 20,000 25,500 40,500 37,500 25,000

Cost Driver Volume 250 set ups 120 purchase orders 10 maintenance plans 5,000 material movements 600 inspections 600 customers

£ 228,500 Cost driver rates would be determined as: £80,000/250 = £320 per set up £20,000/120 = £166.67 per purchase order £25,500/10 = £2,550 per maintenance plan £40,500/5000 = £8.10 per material movement £37,500/600 = £62.50 per quality inspection £25,000/600 = £41.67 per customer The business has a product, called Sea-fish Premier, and plans to produce 1,000 units of this product in the budget period. This output will require the following activity demand. 2 Set-ups 4 Purchase orders 1 standard maintenance plan 100 material movements 50 quality inspections 10 sales customers Using ABC technique we find: Set ups Material procurement Maintenance Material handling Quality inspections Order Processing

2x 4x 1x 100 x 50 x 10 x

£ 320.00 166.67 2,550.00 8.10 62.50 41.67

£ 640.00 666.68 2,550.00 810.00 3,125.00 416.70 £ 8,208.38

This shows, when associated with cost pools and identified to the activities that drive cost, the overhead cost per unit of output is PQ £8,208.38/1000 = £8.21 • Dr Philip E Dunn is a freelance author and technical editor for Kaplan and Osborne Books PQ Magazine July 2018


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PQ money laundering

Why you can’t ignore the money laundering regs Tim Pinkney explains why AML is a subject that you really need to know about


onald Rumsfeld, former US Secretary of Defence, is famously quoted as saying: “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know.” This often aptly sums up students’ approach to AML compliance. The good news is that most of the ‘known unknowns’ are covered in the recently published Anti Money Laundering Guide for the Accountancy Sector (AMLGAS), which was issued on 7 March 2018. The guidance details roles and responsibilities to enable firms and employees to achieve a level of compliance as required in The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR17) which came into force on 26th June 2017. The AMLGAS was produced by the CCAB in consultation with the accountancy bodies listed in schedule 1 of MLR17 and approved by HM Treasury which effectively lifts the status of the document so that courts within the UK will have to consider it when determining compliance with the relevant legislation. The good news is that AMLGAS has been adopted by all the UK accountancy and bookkeeping AML supervisory bodies. There are 15 bodies in total, which includes HMRC. The AML regime is not just the responsibility of the senior team in a firm. The regulations refer to ‘Relevant Employees’, which are defined in AMLGAS as “an employee whose work is relevant to compliance with the Regulations, or is otherwise capable of contributing to the identification and mitigation of the risks of money laundering and terrorist financing to which the business is subject, or to the


approach you to provide a criminality check to ensure you have no unspent convictions as listed in schedule 3 of MLR217. This requirement relates to all Beneficial Owners, Officers or Managers (BOOMs) within the firm and will be requested by the firms AML supervisory body. However, this is an area within the AML regulations that varies according to the size and nature of your firm. Firm risk assessment All firms are now required to complete a risk assessment of its AML policies and procedures, client risk, service risk and geographic risk. So make sure you have access to a copy of the assessment, refer to it frequently and, where possible, engage in the process of writing or updating the document. AML policies and procedures Each firm should have up-to-date AML policies and procedures and ensure that employee training is undertaken regularly. As a relevant employee you should ensure you understand your role within the compliance function and engage and log any AML training provided.

prevention or detection of money laundering and terrorist financing in relation to the business”. The regulations don’t go on to define accountancy services, but AMLGAS defines them as “any service which involves the recording, review, analysis, calculation or reporting of financial information, and which is provided under arrangements other than a contract of employment” and that could, of course, include many areas that students and part qualified accountants undertake. So to begin with, all students should obtain a copy of the accountancy sector guidance and read it to make sure you are aware of issues that may impact on your role, however to begin with you may want to focus on the following areas. Employee screening This is a new requirement placed on the firms to screen employees both as part of the recruitment process and throughout their employment and requires an assessment of the skills, knowledge and expertise required to carry out AML duties. If you are regarded as a relevant employee your employer is likely to

MLRO and Deputy MLRO Within the firm’s policies and procedures should be a clear line of responsibility and internal controls relating to escalation of suspicions to the firm’s Money Laundering Reporting Officer (and deputy MRLO if appropriate and where available). It is the MLRO’s responsibility to take the decision whether or not to submit a Suspicious Activity Report (SAR), so your responsibility is effectively over once you have submitted an internal report and received confirmation from the MLRO of its receipt. AML compliance should not be seen as a tick-box exercise, but should be part of the fabric of the firm, with engagement encouraged and championed from board level and throughout the organisation. So students should take time to read through the sector guidance and challenge your employees where you have concerns. AMLGAS and MLR17 can be downloaded at anti-money-laundering-supervision PQ • Tim Pinkney is Director of Professional Standards at the AIA

PQ Magazine July 2018

careers PQ

social media ROUND-UP It started with a tweet about problems for ACCA June sitters at Kensington & Chelsea College, and escalated into questions of just how long students should be made to wait for their delayed CBE exams. That Kensington sitter didn’t sit the exam until 4pm and finally left the college at 8.15pm “tired and stressed”. PQ was then told of similar situations at Hammersmith & Fulham and Chelmsford colleges. PQ got lots of great feedback about the June exams, too. Students felt that P7 was the most time pressured exam they had ever sat. Lisa agreed: “Indeed the most time pressured one in my ACCA career.” And Zaty said: “I think even if we were given 4 hours it’s impossible to stay calm and finish this paper.” When it came to P2 one PQ told us on Facebook: “P2 was disaaaaaaaster.” We also tweeted out some fun stuff like: “Heinz – don’t do it! They are going to rename Heinz Salad Cream. It’s going to be called Sandwich Cream… Can anyone remember Sandwich Spread? Now that was disgusting.” Layla Griffin admitted: “I lived on Sandwich Spread in the 80’s.” But Training Link said: “Just the thought of Sandwich Spread butties gives me cold sweats.” One of our favourite Facebook pages is UK (Only) ACCA Distance Learning Students (independent study group). We loved Lucy Broom’s post: “As it is half term week, we took my 5 and 7 year olds out today, 2 hours of car journey made them listen to substantive test and audit risk. We are going to the park again tomorrow; wonder what I should listen to? Maybe by end of the week one of them will be ready to take the exam for me!” Finally, we had a request. Wendy Eldridge wanted to see a photo of her cat Chappie in the magazine. He’s a rescue cat who managed to disrupt her June CIPFA Strategic case study revision, and is reading the June PQ magazine article on preparing for the SCS. Is this then the most disruptive study cat? PQ Magazine July 2018

Life at PQ magazine Polly Thrasivoulou has worked for accountancy’s top mag since it launched in 2003 as advertsing manager. She refuses to tell us her age and says she has too many claims to fame to mention. Sadly, she leaves PQ in July to work full time for the ICB What time does your alarm clock go off on a working day? 6.20am, which leaves me 10 minutes of snooze time What’s the first thing you do when you get to your desk? Turn on my computer and make a cuppa. What’s on your desk? Too much, I have quite a messy desk but it’s controlled mess (plus our editor is always adding to the mess…). What’s the best thing about where you work? The people and relaxed environment we have – it’s pretty chilled. Where’s your favourite place to go for lunch? I bring my lunch in. What can you see from your desk? Some trendy Shoreditch hipster masquerading as the PQ mag editor. Which websites are your favourites and why? PQ

magazine, of course. Which websites do you use for work? Quite a few as we are always checking things out and sourcing great giveaways. How many hours a week do you spend in meetings? Varies from week to week. What time do you leave the office? Usually 4.45 to catch my train. How do you relax? Watching the Arsenal at the Emirates (although that has been very stressful of late), cooking, gardening and shopping. What’s your favourite tipple? I don’t drink much, although a G&T goes down quite nicely How often do you take work home with you? Not often.

What is your favourite TV programme? Love a bit of Gray’s Anatomy. Summer or winter? Summer. Pub or club? Pub. Who is your hero? My Dad. If you had a time machine, where would you go? I’d go five years into the future to see how Brexit panned out – hopefully all my fears will be unfounded. If you hadn’t chosen PQ magazine where would you be now? Working in theatre, darling!

In brief Salaries on the rise UK accountancy salaries are on the rise, as competition for top candidates remains fierce. While the nation as a whole saw salaries rising by 2% year-onyear, accountants’ wages rose by 3.4%. To put this into perspective, legal salaries in the same period jumped by 11.3% and IT pay by 7.2%. There was also a rise in the number of accountancy roles advertised – a 17.8% increase in April. Are you always on? A staggering 60% of accountancy professionals

confess to replying to workrelated emails, or making calls in their free time. What’s more, one in four (27%) admit to checking their phone for work purposes immediately before they go to sleep and as soon as they wake up. Perhaps not surprisingly, the CV-Library research found that 77% of accountants surveyed agree that their mobile devices are blurring the lines between their personal and work lives. Time to discriminate UK companies need to start to discriminate against job applicants from Eton because

their grades are ‘not as impressive’ as those achieved by students at struggling schools, says former education secretary and accountant Justine Greening. She said employers should take into account a candidate’s background during the recruitment process. Greening felt this would really help social mobility and pointed out that there is software available to help companies who want to go down this route. Greening, who went to a comprehensive in Yorkshire, quit the Cabinet earlier in the year following a reshuffle.

The PQ Book Club: books you should read Strive by Scott Amyx (Wiley, £20.54) The son of poor immigrants to the US, author Amyx’s story is a classic rags-to-riches one. In this book he passes on what he’s learned along the way, but this is far from a conventional self-help book. His theory that drives Strive is essentially a simple one: that you should adopt a new mindset towards your own personal challenges by embracing them.

Scott describes how the most unlikely individuals have embraced difficult personal change to become outrageously successful. He helps you take stock of your own habits and practices to identify how your routine and misconceptions are holding you back. Fascinating insights from throughout history demonstrate how embracing discomfort fuels lasting success. The author explains how you can have control over your

career, your outlook, your actions, and your priorities. He offers an unconventional approach to attaining your dreams by taking what makes you unique and turning it to your advantage. Strive is your handbook for getting comfortable with discomfort, embracing and enjoying new challenges, and achieving real, lasting success. PQ rating 4/5 A fascinating read for your summer holiday. 29

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It would appear that music study playlists, the ultimate study buddy, are becoming more and more sophisticated. Streaming services such as Spotify and YouTube have quite a few revision playlists ready to download – thousands, in fact! You can even tune into online radio stations such as, which play music that helps you to learn. Or there’s College Music, which has 360,000 subscribers. After all, who isn’t partial to Ludovico Einaudi’s ‘Elegy for the Arctic’ or ‘Nuvole Bianche’? So come on, tell us what tune got you through your accountancy exams? And don’t say ABBA and ‘Money, Money, Money’. Send your top tunes to


BITCOIN THERAPY People who have become hooked on crypto-currency trading are to be offered treatment to help them deal with their addiction. A residential course at Castle Craig Hospital for ‘crypto addicts’ is being made available for those who need help with underlying issues and learn how to live without trading the currencies. Some of those trading in currencies, such as Bitcoin, become addicted to the minuteby-minute fluctuations in prices. They can show behavioural addiction similar to online gambling. USELESS FACT: Bitcoin will use half a per cent of the world’s electricity by the end of the year, say researchers. This is because the cryptocurrency relies on networks to make continuous calculations. Digiconomist Alex de Vries estimates that a single transaction uses as much electricity as a Dutch household’s monthly electricity bill.


All GCSE and A-level pupils have been banned from wearing wristwatches in the exam hall in an effort to stamp out cheating. The Joint Council for Qualifications has already banned smartwatches, but the worry is some smartwatches can be disguised as common or garden wristwatches. Ordinary watches will still be allowed into the exam room however, but they will have to be placed on desks. • The times they certainly are a-changing. Last year Apple

sold more watches than the entire Swiss watchmaking industry put together. Now on the third version, Apple sold 8m units in the last three months of 2017. For that same period Switzerland exported 6.8m timepieces.

What do you do? You are supposed to be studying for an accountancy degree but then you get the call up for the England cricket team. Poor Keaton Jennings has just five modules of his accountancy degree left, but decided to put the exams on hold so he could help Alistair Cook open the batting against Pakistan, and does he need help! Keaton, who plays for Lancashire, said: “It seems to be taking forever to complete. I’ve had to miss a couple of exams because of cricket and I’ve not been able to put in the work I wanted.”



NO COMPUTER FOR ME Channel Four’s Alex Brooker was the star turn at the recent ICAEW Diversity Community launch. He admitted he was never happy about ‘celebrating’ his disability and just wanted to be the same as everyone else. Despite his difficulties he insisted on hand writing his A-level exams rather than using a PC. However, when he failed to get the grades he used a computer for his re-sits. It got him into university and onto a journalism course. The rest, as they say, is history…

The richest 1% of the world’s population now owns more than 50% of the world’s wealth. The Sunday Times Magazine’s ‘The Rich List 2018’, out a few weeks ago and now in its 30th year, seems to feed into our obsession with money. In its 160 pages we discover London is the city that is home to the largest number of billionaires – it has 93. However, The Times has added ‘The Alternative Rich List’ of people who “exemplify the most uplifting side of humanity”. Among those on this list are Martin Lewis, the money-saving expert, Labour MP Stella Creasy (pictured) and astronaut Helen Sharman. Unfortunately, there aren’t any accountants on this alternative list!


I Love PQ mug

When is not a good time to have a cup of tea? Well, how about drinking your next brew out of your very own ‘I Love PQ’ mug? We have five to giveaway this month, and will even throw in a PQ memory stick in as well to the lucky winners. Send your name and postal address to enter this giveaway. Remember to head up your email ‘PQ mug’ and send it to It really is as easy as that.

Another pick and mix

There are six books up for grabs this month and they couldn’t be more different. We have ‘7 Deadly Dates’, ‘The Liquid Enterprise’, ‘The Little Book of Results’, ‘The Science of Intelligent Achievement’, ‘Scaling Up Excellence’, and ‘Analysing Financial Statements for Non-Specialist’, all up for grabs. Those whose names are pulled out of the hat will be sent one of these, courtesy of PQ. Send us your name and address to be entered for this lucky dip. Remember to head up your email ‘Six of the best’ and send your email to

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 July. The main draw will take place on Monday 16 July 2018.


PQ Magazine July 2018

Your jobs board I need to find now!

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PQ magazine, July 2018  

PQ magazine is a free monthly magazine for student accountants, focusing mainly on the ACCA, CIMA, CIPFA, ICAEW and AAT qualifications. It's...

PQ magazine, July 2018  

PQ magazine is a free monthly magazine for student accountants, focusing mainly on the ACCA, CIMA, CIPFA, ICAEW and AAT qualifications. It's...