PQ magazine August 2018
www.pqmagazine.com / www.pqjobs.co.uk
BE A STORYTELLER, STUDENTS TOLD Anyone entering the accountancy profession must understand that being good with numbers and doing the accounts isn’t what the future profession will be about (and perhaps never was). As we all enter the digital world ‘personality and communication’ will be the key skills to get you to the top. That was the rallying call from all the employers and professional body speakers at the recent PQ/LSBF ‘Being Global: Futureproof your career in accountancy’ conference. CIMA’s CEO Andrew Harding told delegates that they must become a storyteller, and the numbers alone won’t let you do that. He explained that disruption and change are the new normal. That means PQs need to stay relevant and refreshed even after they qualify. “Obtaining a professional accountancy qualification used to be a 40year job promise,” he said. But he added that those days are long gone, broken by progress and technology. Today’s accountants need to add value and look forward, as there are no prizes for being a scorekeeper anymore! It means tomorrow’s accountants need to learn, unlearn and relearn over and over again in their career, emphasised Harding. Ethics and trust also look set to move up the agenda as AI takes over the transactional processes. Employers are also increasingly expecting PQs who are more confident in dealing with data. The NAO’s Nav Gudra told delegates they expect candidates to be good early on with data tools. But business partnering and those softer skills, which help influence and add value, are increasingly coming to the fore, she stressed.
Top team: Tom Eagle, Nav Gudra and Mark Twum-Ampofo with Stephen Gyte of Crowe Clark Whitehill (second right) Kingston Smith partner Mark TwumAmpofo said his firm looked for a questioning mind-set and adaptability in its PQ and NQs. Interestingly, he said that he liked graduates who had ‘real’ work experience. And he included working for Next and MacDonald’s in that, rather than someone who had done two weeks of non-paid work somewhere. Working at Next means you are client facing in some way and have to develop your communication skills and
worked in a team, he suggested. At the interview he also wants to see ‘genuine interest’ in the firm, he said. Pro-recruitment’s Tom Eagle stressed that PQs must never underestimate the power of social media has on their career, too. He said employers have phoned him to cancel interviews after they have viewed Facebook and Instrgram pages. He stressed, too, that everyone should have a good LinkedIn page. • Check out more from the one day conference on page 21.
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CONTENTS News 06Career survey Poor first impressions costing employers 08ACCA CBEs Put that calculator away, sitters are advised 10AAT revised assessments One-off pass rates published Features, etc 04Mind your Ps&Qs I’m not convinced by all this diversity talk; liberate yourself from your mobile; and audit change is needed 12International standards News from the standards body 14ACCA exams Top tips on turning a close fail into a pass
15Competency Frameworks Why managing talent is vital to the future of the public sector
18ACCA SBL exam Top tips on how to pass this new paper
20Interview How one distance learning student is making waves in the west country; and the importance of a marketing plan 21Being Global conference Highlights from the recent LSBF/PQ one-day event
26ACCA P6 exam Top advice on
passing the Advanced Tax paper 27Networking The importance of building your own network 28Business strategy If you struggle with the numbers, then this article is for you 29Careers Life at Carlisle Refrigeration; the best of social media; and our Book Club review 30Fun stuff – and our giveaways The columnists Robert Bruce Formulaic audits benefit no one 6 Prem Sikka Regulatory inertia is damaging to confidence 8 Zoe Robinson How Bloom’s taxonomy can help you 10 Subscribe to PQ magazine It’s FREE – go to page 19 or see www.pqmagazine.com ABC July 2016 – June 2017
22CIMA spotlight How to ensure you maintain that allimportant work/life balance
24ACCA F2/F5 papers What is the Economic Order Quantity? And why does it matter?
25CIMA case study How to tackle the Montel case
PQ mag is ‘being global’
Publisher’s statement: We send a digital issue of the magazine to an additional 7,121 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)
We might be based in the UK, but PQ magazine has always reached out to PQs across the globe. Our e-magazine (just the same as the paper product) means no one needs to miss out on our exam tips and feedback. After all, accountancy is a global profession. If you don’t believe me ask the ACCA! I want to send a big thank-you this month to LSBF, and Rob Sowerby in particular, for making our joint careers conference last month such a big success. The list of speakers at ‘Being Global: Future-proof your career in accountancy’ really was a who’s who of accountancy. I also want to thank Crowe’s Stephen Gyte, who turned up at short notice to add to the list of impressive employers ready to answer questions from the floor. There will be a video of the conference available in due course for anyone who missed it. Watch this space for more. Our lead story gives you a flavour of the day, and as CIMA’s top man, Andrew Harding, said, PQs need to become storytellers and much more ‘creative’. But that’s creative in a good way, of course. Keep ahead of the game I have had recent conversations with ACCA PQs about changes to the qualification. Some were saying they were sticking to paper-based exams. I had to tell them that if they are sitting F5 to F9 in the UK that won’t be happening – the exams are only available as CBEs. If you read PQ you would know that. This month we look (again) at the new Strategic Business Leader exam – something for F5 sitters to look forward to! Seriously, it looks a great exam. CIMA PQs should also check out HTFT’s case study exam kits. You get 50-plus long-form questions and answers. What’s not to like about that? And at £50 they are a bargain buy. Even better, we have five MCS kits to give away this month, so get emailing me asap if you want one for the Montel case. Graham Hambly, PQ magazine editor (firstname.lastname@example.org)
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PQ have your say
email email@example.com Whither diversity? Wow, that was a shock issue, PQ magazine! Thanks for highlighting the big steps the ICAEW is taking to challenge everyone about diversity (PQ, July 2018). I still think there is a lot of talk about diversity in accountancy, but nothing really seems to change on the coalface. I fully support Elaine Clark too, with her launch of the Women in Accountancy group. I would encourage everyone to take the survey on Elaine’s website – see http://womeninaccountancy.com/ women-in-accountancy-survey/ As she says, you have got to
hope that we won’t see a Harvey Weinstein-type scandal in the profession, but frankly she doesn’t
think it would surprise her if we did. In 2018 that really does seem shocking. I also have to agree that misogynists are alive and well in the accountancy profession. I have met some myself. I am really concerned about the unpleasant behaviour she received from the head of tax at a top six firm. Perhaps it is time to name and shame these people. Can I say that I was also surprised that PwC had to put incentives into their managers’ bonuses so they could meet their
diversity goals. You would like to think people would support diversity without it directly affecting their pay packet. The fact that the firm has only recently discovered that women were being trapped at management level rather than just swanning off to have babies seems a little odd, too. Come on PwC, raise your game. A female PQ, name and address supplied The editor says: We hope to highlight the findings of the Women in Accountancy survey in next month’s issue. It will be interesting to see if misogyny is alive and well in accountancy! I am hoping we have moved on, but I am not convinced we have quite yet.
Our star letter writer wins a fantastic PQ memory stick! Integrity is missing Where has the integrity gone? The accountancy profession was once governed by accountants whose qualification ensured integrity, or they would face being penalised and or de-listed. With the advent of university graduates holding the ACCA qualification that line has been blurred. Integrity is lacking because there are no penalties or delisting for university graduates acting as accountants and operating with impunity when doing wrong in the name of being an accountant and answerable to no international regulatory body. What is happening to the accountanty profession? Garnett Brown, Kingston, Jamaica
professionals confess to replying to work-related 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.” Not me, buster! I realised a couple of years ago that mobile phones – and all the social media that goes with them – can be addictive. Worse still, they cause stress and eat into that worklife balance we are always hearing about. So I switch the work phone off when I leave the office at 6pm and especially at weekends. After all, what’s the point in reading an email on a Saturday morning about something at work that’s gone wrong, when you can’t effectively tackle the ‘issue’ until you get to work on the Monday morning? I urge other PQs to follow my lead. If you find it impossible to get by without your mobile, get a personal one for use ‘out of hours’. Name and address supplied
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Change is needed Whether or not the Labour Party come to power any time soon, there is no doubt in my mind that radical change is needed to the audit market (‘No more Carillion scandals?’, PQ, July 2018). I’ll be interested in Prof Prem Sikka’s report, commissioned by shadow Chancellor John McDonnell, into the whole sector when it’s published. It really is a scandal that BDO, the FIFTH biggest audit firm in the UK, finds the present
tendering system for audit contracts just too expensive, as your story explained. If BDO is effectively priced out of the market, what hope have any of the other players got? Politics aside, it would be good for the UK’s economy as a whole if this Big 4 audit firm ‘cartel’
was finally broken up. And, hopefully, no more Carillions. Name and address supplied
Always on? Not me! I had to laugh when I read your careers page story saying that “a staggering 60% of accountancy
Cats and dogs Hey people, lots of cat pics in recent issues but no dogs! Please correct at once – meet Dusty! Tom G, by email
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ROBERT BRUCE Formulaic audits are a benefit to no one
The audit profession continues to get it in the neck from the press and politicians. They can spot an Achilles’ heel from 50 paces and are going for it. The examples, from the shocking sale of BHS to the misplaced optimism that Carillion was going to ride out the danger of being overloaded by contracts lavished on it by naïve politicians, do not suggest to the public that auditors are up to the job. And, quite plainly, in many cases they are not, and the reform bandwagon is rolling. But few are paying any attention to the underlying issues. One of these is the growth of rules and regulations. No one denies that you need them. But there are unintended consequences. Standardsetters, for one, now have their own industry of creating hugely complex systems to cover all eventualities and ensure the standards are as watertight as they can be. Only by doing this can they be sure that they minimize the risk of any criticism after a business disaster. It is small wonder that audits are now highly formulated routines. What has been lost is the ability to step back and wonder, sceptically, about the state of the business being audited. One expert I talked to after a spectacular recent corporate collapse pointed not to any structural or accounting issue but simply reminded me that the chief executive had form at getting it all wrong. The collapse had come as no surprise to him. And it shouldn’t have surprised the auditors, either. Robert Bruce is an award-winning writer on accountancy for The Times
First impressions matter Poor first impressions mean UK employers are losing out on hardto-find finance professionals, says a new survey from Hays Accountancy & Finance. Some 42% of job applicants revealed they have been deterred from pursuing a role because of a negative first impression of an organisation. Aside from first impressions, another main deterrent for job seekers was a bad interview experience (46%). A massive 86% of finance professionals said they have had a bad experience at a job
interview; with the main gripe unprepared interviewers and a lack of structure to the process. Delays throughout the recruitment process are also an issue for many. Close to two-thirds of respondents (62%) say they are only willing to wait one week after submitting their application before looking elsewhere. Another area employers need to be aware of is employer review sites. Well over half (59%) of accountants said they would be
discouraged from applying to a role is they came across negative reviews on an employer review site. This was particularly true of PQs, as 41% actively look for reviews compared with 31% of qualified finance professionals. Hays director Karen Young (pictured) said: “Unwelcoming first impressions, misleading job adverts and badly structured interviews are all key contributors to a poor application experience, ultimately making it harder for employers to recruit and retain talent.”
ICAEW students push boat out
AAT recently welcomed apprentices from Moores Stephens to its HQ in Barbican. With Olivia Snell and Thomas Mckinnon-Dibley, both 19, is Beatrice Waller, Moores Stephens’ learning and development manager
Don’t tax the robots, says AAT The AAT has firmly condemned recommendations to tax workplace robots, despite the accountancy sector facing rapid automation and increased use of AI. AAT believes that as long as it is implemented in an effective way, automation, digitalisation and the increased use of AI should be embraced rather than feared. It says taxing robots would be self-defeating and ‘unacceptable’.
AAT’s head of public affairs and policy, Phil Hall, said: “A robot tax would undermine investment, limit employee skills and income, and risk relegating the British economy to second or third tier status.” A recent AAT survey of members found 60% believe basic accountancy processes will be fully automated in the next five years, but this was not viewed as a negative.
The ICAEW is one of the few accountancy bodies with a fullfunctioning Student Council (ISC) and societies across the country. A boat party seems a favourite activity this time of year, but here’s a taste of some of the events on offer across the country. • 18 July: The Village Hotel in Coryton, Cardiff, is the venue for an ACA case study revision session. If you are getting ready to sit the exam in late July then this is the perfect session for you. • 20 July: CCAS bowling night at AMF Bowling Carlisle. Step right up and test your bowling skills. • 25 July: MCASS summer boat party. Time to celebrate the end of exam season on the Bridgewater Canal. • 26 July: CASSL Boat Party on the River Thames. Time to get away from the hustle and bustle of city life. • 27 July: NCASS, NJLD and RICS summer soirée at the Colwick Hall Hotel, Nottingham. A soirée says it all!
In brief Key director to leave FRC Melanie McLaren, executive director for audit and actuarial regulation at the Financial Reporting Council, has resigned. She will be leaving the embattled watchdog in the coming weeks after six years. Before joining the FRC she was a partner at PwC for 10 years. In April, McLaren, along with Paul George, stepped down from the board of the FRC. Mike Suffield will replace her. 6
ICAEW has pride The ICAEW recently launched a new online Diversity Community and to celebrate London Pride it replaced its flag outside its Moorgate HQ in the capital. Well done, ICAEW.
Free webinars Don’t forget to sign up to the free ACCA webinars at www.fme learnonline.com/examssikills. Available on 18 and 19 July, they cover F5, F9 P4 and P5. Who doesn’t like something for free! Salaries up 2.3% UK accountancy salaries rose by 2.3%, according to market data from June. While accountancy is making its way up the list of top industry pay increases it is still some way off marketing, which saw
pay rises of 8.3%, and legal, where pay rose a whopping 13.1% in the same period. Measuring resilience CIPFA says it plans to launch an authoritative measure of local authority financial resilience. It will use a range of indicators, including rate of resource deletion, levels of resources generally, demographic and social services pressure, and the level of borrowing. The first edition of the resilience index will then be produced this autumn. PQ Magazine August 2018
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PREM SIKKA Regulatory inertia undermines confidence Aren’t regulators supposed to protect consumers from shady practices? Evidence raises questions about such commonsensical views. A group of legislators have overridden the reluctance of the FCA to publish a 2013 report titled ‘Project Lord Turnbull’. It contains evidence of possible £1bn frauds at the Reading branch of HBOS. The frauds put many small businesses into needless bankruptcy and boosted bank profits and executive pay. The Police and Crime Commissioner for Thames Valley said: “The fraud was denied by Lloyds Bank for 10 years, in spite of it being apparent that senior members of the bank were aware of it at least as far back as 2008.” Previously, a government sponsored report by Lawrence Tomlinson in 2013 found “some of the banks, RBS in particular, are harming their customers through their decisions and causing their financial downfall”. In February, the Treasury Committee overrode reluctance of the FCA to publish a 2014 report titled ‘RBS Group’s treatment of SME customers referred to the Global Restructuring Group (GRG)’. The Committee said: “The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through made-up fees, high interest rates, and the acquisition of equity and property”. There has been no regulatory action against banks or insolvency practitioners. This inevitably nurtures scepticism about the effectiveness of the present regulatory architecture. Prem Sikka is Emeritus Professor of Accounting at the University of Essex
Put down that calculator! ACCA CBE sitters need to put their calculators away and use the spreadsheet software, says the F5 examiner. He said a large number of March exam answers had been worked out on a calculator and then typed into the cell. This takes more time and can introduce human error. Using a formula in a cell is not only quicker, he ventured, but it also allows the marker to see what the candidate has done and give more credit in the event of a small error.
software in the F5 exam was better, with answers often made clearer with the use of headlines and white spaces. However, it was suggested that CBE candidates may not be writing enough to pick up the marks. The examiner revealed they are definitely writing less than paper sitters. The F8 examiner was worried about the brief answers to some of her questions, especially those contained in the pre-formatted tables provided. While bullet points are acceptable, answers need to be ‘sufficient’. Misspelt words were also causing problems for F8 markers.
Scott wins ICAS gong
AAT level 4 for LSBF
PQ magazine’s NQ of the Year, Michael Scott, has just picked up another award. Scott has now been named ICAS One Young CA 2018. The judges were blown away by his social awareness and conscience. They found him inspiring, engaging and admired the hard work and dedication he gives to his commitments. Scott works for EQ Accountants in Glenrothes and featured in the
LSBF online has launched new AAT level 4 professional diploma courses. An approved learning partner, the college will be delivering the AAT programmes on its InterActive e-learning platforms. LSBF is aiming to provide comprehensive flexible study options that includes HD interactive video-lectures, live-chat sessions in the form of student Q&As, resources such as Osborne books, and access to a 24-hour email response service. Director of professional courses, Rob Sowerby, said: “Adding this new course, LSBF online is holding to our three key student benefits: personalisation, flexibility and access.” Sowerby said it was vital the college caters to students’ lifestyle choices, providing comprehensive flexible study options that allows them to work at their own pace.
ICAS Top 100 Young CAs 2018. He will now represent ICAS and the accountancy profession at the One Young World Summit in The Hague.
EWI’s ACCA ebooks for £1 Emile Woolf International(EWI) is making its ACCA eBooks available for just £1 each. Written by experts tutors, EWI says the books “contain the required information you need to pass the exams without going into excessive details”. All students need to do is join EWI’s ACCA Club, which is a free membership group set-up to share ACCA news and updates. EWI’s Graham Durgan says: “I’m delighted that we are able to continue to positively disrupt the ACCA market by offering our books online for just £1 to those who join EWI’s new ACCA Club.” To sign up go to https://www.emilewoolf.com/book-shop/the-acca-club/
KPMG Breathe easy KPMG’s LGBT network Breathe picked up the network prize at the recent NatWest British LGBT awards. Breathe has been fostering inclusion in the workplace since 2003. It’s cochair, David Pearson, has declared 2018 its ‘Year of Learning’, and in what is believed to be a first, has placed all events and initiatives on official footing as registered training sessions, which means colleagues and external guest can benefit from CPD recognition. FRC scrutinising SIG audit The Financial Reporting Council (FRC) has started an investigation into Deloitte’s audit of 8
The examiner stressed: “It should be much quicker to answer numeric questions using a spreadsheet rather than paper, as the calculations can be automated, and any mistakes quickly corrected.” Unfortunately, in the March sitting it was clear that many sitters had not practised using the software and were unfamiliar with how to use simple functions like SUM to perform their calculations. The use of the word processing
the financial statements of SIG for the years ended 31 December 2015 and 2016. The investigation will be conducted under the Audit Enforcement Procedure (AEP) and will focus on the audit of cash and supplier rebates. The FRC has delegated the investigation to the ICAEW, which is Deloitte’s recognised supervisory body, in accordance with the AEP. • See page 27 for more news from the UK’s accountancy watchdog. Eradicating homelessness A PwC study says that homelessness could be wiped out inside 10 years. All that is needed is the right policies! Building 100,500 homes a year, longer tenancies for private renters and reforming housing benefit were among the
reforms recommended. The cost would be £9.94bn but these would bring more than £26.42bn of savings and social benefits. Deloitte partner quits Neville Kahn, purported to be one of the UK’s leading insolvency practitioners, recently resigned from Deloitte after an investigation into his conduct. Kahn is one of three Deloitte partners under investigation by the ICAEW over the administration of Comet. The retailer collapsed in 2012 at an estimated cost of £45m to the taxpayer. Rumour is the institute’s investigation is nearing a conclusion. Deloitte said that Kahn’s departure was unrelated to the Comet investigation, and in fact he was planning to set up an investment fund. PQ Magazine August 2018
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ZOE ROBINSON Blooming marvellous
In 1956, the educational psychologist Dr Benjamin Bloom developed what is known today as Bloom’s taxonomy, a tool that can be used to promote higher forms of thinking and helps educationalists prepare learning outcomes and write exam questions. All of the major accounting bodies will use Bloom in some way. It was later revised and includes the following categories. Bloom’s original descriptors are in brackets. 6. Create (synthesis) 5. Evaluate (evaluation) 4. Analyse (analysis) 3. Apply (application) 2. Understand (comprehension) 1. Remember (knowledge) Bloom’s taxonomy helps us identify some of the higher level skills employers most value. It doesn’t matter what you know or understand: ultimately, employers want added value, and that requires the application of knowledge in different domains, analysis, evaluation and finally a creative workable solution. The challenge for accountancy training is that, increasingly, many see knowledge as free, accessible simply at the click of a mouse. Yet in order for the student to be able to manipulate, analyse and evaluate they need that knowledge inside their head and importantly, they need to comprehend and understand; there is no shortcut. The days of rote-learning must surely be behind us – for the good of the profession the focus must be on developing understanding. Zoe Robinson is Learning and Programmes Director at Kaplan Financial
AAT pass rates for new assessments The AAT has published new one-off pass rates for the revised versions of three assessments – the Advanced Synoptic (AVSY), the Professional Diploma Synoptic (PDSY) and Management Accounting: Decision & Control (MDCL). The new AVSY and PDSY pass rates cover the February and April/May assessment windows and show some big jumps from those published in PQ magazine’s May issue! The AVSY has risen from 44% to
64%. Meanwhile, PDSY has gone up from 41.2% to 52.7%. The pass rate jump for MDCL has been less dramatic, but is still on the upward curve – up from 50.7% to 54.3%. The AAT has reiterated that this is a one-off. As a general rule it publishes 12-month rolling pass rate information twice a year. However, the PDSY was reviewed in September 2017 after ‘problems’, and new versions of the AVSY and MDCL assessments were launched in early 2018.
Time to act on smart drugs The UK’s top universities have been accused of turning a blind eye to the growing use and danger of their students turning to ‘smart drugs’ to help boost exam performance. It appears just one student at the 24 Russell Group elite universities has been caught, according to a new survey. This is despite claims from many academics that the use of smart drugs has become rife, especially at key examination times. These nootropics, such as
Modafinil, are easily available online and are used to help treat ADHD and narcolepsy. They are marketed to students who need to put in long hours of revision and a medical alternative to energy drinks. Recent surveys have found that up 35% of students admit to have used the study drugs. The worry is taking these drugs has been normalised and will be taken by many going on to sit professional accountancy exams.
No more phones on desks Big 4 firm PwC has ‘hung up’ on landlines at its UK office desks. From the end of the summer all staff will be expected to use their company mobile. The firm, with 24 offices and 18,000 staff, said that the switch to mobiles would be more efficient’. Just a few landlines will remain for ‘security reasons’. There will be some lines in rooms used for client meetings and at reception. PwC said” “With landline usage falling rapidly, we believe that a more mobile-focused policy is a more efficient way of working.” KPMG recently ditched landlines in its Canadian offices and at its Australian HQ.
More support needed around mental health A worrying 71% of accounting professionals believe employers are just not doing enough to support good mental health at work. In fact the latest research from CV-Library shows that over half (53.3%) have considered resigning from a job because of the lack of support. Just under half (43.5%) of accountants questioned also revealed that aspects of their job cause them to feel anxious or depressed. What they want to see (75.6%) is mental health days for staff. Many also believed employers need much more training in this area to help understanding and the need for real support. CV-Library’s Lee Biggins said it is concerning that accounting professionals don’t feel supported by their employers when it comes to their mental health. He said: “It’s clear more needs to be done.” A big worry has to be the large percentage of accountants (92%) who confessed that they would be too embarrassed to disclose information about the state of their mental health to their employer.
In brief Instant poll results So which were the hardest ACCA exams in June? Well, according to an Open Tuition poll, F5 and P6 were ‘a disaster’ or deemed ‘very hard’ for over 60% of sitters. When it came to the ‘OK’ papers it was F4 and P6 papers that stood out for the right reasons! Data breach at HMRC? A privacy watchdog is alleging HMRC collected 5.1m taxpayers’ voice IDs without their consent. Big Brother Watch is unhappy that 10
HMRC requires callers to repeat the phrase “My voice is my password” to gain access to certain services. Where, asks the pressure group, was the choice to opt in or out? The worry is that millions of taxpayers’ voiceprints may have been shared with other government departments. The Information Commissioner’s Office is now investigating the issue. CIMA pre-seens The CIMA pre-seens for the August case study exams are now
all out there. First out was the CIMA operational case study, which is all about tea. Students are told: “Tea is like wine in that the atmosphere in which it is grown determines much of the flavour and quality”. Tea plants we discover typically grow best in acidic soil and in regions with heavy rainfall. There are also four main types. Hey, these case studies are really educational! • We are giving away five HTFT MCS exam kits, each worth £50 each – check out page 25.
Where’s the accountants? There is a worry that the lack of professional accountants in key financial roles could be holding back the Kenyan economy. The ACCA and the Institute of Certified Public Accountants of Kenya (ICPAK) found that only 16 of 47 county governments employ a qualified accountant in key financial management roles. The rest use unqualified accountants. Many SMEs are also choosing not to employ the services of accountants, the research found. PQ Magazine August 2018
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Why is the IASB consulting on the accounting for financial instruments with characteristics of equity? he International Accounting Standards Board (IASB) has pushed out a discussion paper on how companies issuing financial instruments should classify them in their financial statements. IAS 32 ‘Financial Instruments: Presentation’ currently sets out how a company that issues financial instruments should distinguish financial liabilities from equity instruments. That distinction is important because the classification of the instrument affects how a company’s financial position and performance are depicted. IAS 32 works well for most financial instruments, says the IASB. However, continuing financial innovation means that some companies find it challenging to classify some complex financial instruments that combine some features of both debt liabilities and ordinary shares equity instruments. IAS 32 sets out the classification of financial instruments, from the perspective of the issuer, as financial liabilities or equity instruments, whereas IFRS 9 ‘Financial Instruments’ focuses in the recognition and measurement of
Classifying financial intruments
financial assets and financial liabilities. Challenges in classifying these instruments can result in diverse accounting in practice, which in turn makes it difficult for investors to assess and compare companies’ financial position and performance. In addition, investors have demanded better information, particularly about equity instruments. An example of a financial instrument with characteristics of equity is a convertible bond. Typically, a convertible bond behaves like a liability except that at specific times, the holder can exercise an option to convert the bond into ordinary shares. Some convertible bonds are contingently convertible; also called ‘CoCos’, these instruments convert into ordinary shares if a trigger takes place. The new approach would, thinks the IASB, provide a clear rationale for why a financial instrument would be classified as either a liability or equity without fundamentally changing the existing classification outcomes of IAS. Presentation and disclosure would also be enhanced. The IASB’s chair, Hans Hoogervorst, promised that the discussion paper ‘Financial Instruments with Characteristics of Equity’ will lead to clearer guidance. It is open for comments until 7 January 2019. PQ
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PQ Magazine August 2018
international standards PQ he Big 4 accountancy firms must act quickly to reverse the decline in this year’s audit inspection results if they are to achieve the targets for audit quality set by the Financial Reporting Council (FRC). Overall, results from the most recent FRC inspections of eight firms show that results are declining. Across the Big 4, the fall in quality is due to a number of factors, including the failure to challenge management and show appropriate scepticism across their audits, and poorer results from the audit of banks. The FRC claims that there has been an “unacceptable deterioration in the quality of one firm, KPMG”. Some 50% of KPMG’s FTSE 350 audits required more than just limited improvements, compared with 35% in the previous year. As a result, KPMG has been put under special measures and will be subject to increased scrutiny. That means the FRC will be inspecting 25% more KPMG audits over its 2018/19 cycle of work. It will also be closely monitoring the implementation of the firm’s audit quality review. For its sins, KPMG has agreed that its efforts in recent years have “not been sufficient”. FRC promised it will hold KPMG’s new leadership to account for their work to improve audit quality. FRC CEO Stephen Haddrill said: “At a time when public trust in business and in audit is in the spotlight, the Big 4 must improve the quality of their audits and do so quickly.” He wants them to urgently address the level of challenge and scepticism of auditors, particularly in their bank work. Haddrill also expects improvements in group audits and in the audit of pension balances. He stressed: “Firms must
Audit quality falling – and that’s official PQ editor Graham Hambly reports on what’s happening at the UK’s financial watchdog
The FRC in action KPMG ‘sanctioned’ The FRC has fined and reprimanded KPMG and partner William Smith following their admission of misconduct in relation to the audit of Quindell plc. The independent tribunal panel fined and reprimanded KPMG £4.5m, discounted for settlement to £3.15m. The firm was also ordered to pay £146,000 towards executive counsel’s costs. Smith was fined £84,000 and reprimanded. The misconduct related to two audit areas, and included failure to obtain reasonable assurance that the financial statements as a whole were free from material misstatement, failure to obtain sufficient appropriate audit evidence and failure to exercise sufficient professional scepticism. The audit areas were: • Revenue recognition for legal services. • A series of transactions relating to the sale PQ Magazine August 2018
and purchase of software licenses, relating to services and investments. Quidnell made prior-year adjustments in both areas the following year, in their financial statements for the year ended 31 December 2014. PwC ‘sanctioned’ The FRC has sanctioned PwC and audit partner Steve Denison over the 2014 audits of BHS and the Taveta Group following an investigation. Both firm and partner admitted misconduct and accepted what the FRC described as ‘substantial fines and nonfinancial sanctions’. PwC must pay a £6.5m (reduced from £10m for early settlement) and received a severe reprimand. The PwC Leeds audit practice will now be monitored and needs to provide detailed annual reports about the practice for
strenuously renew their efforts to improve audit quality to meet the legitimate expectations of investors and other stakeholders.” The FRC pointed out that there had been improvements in the quality of inspected audits of the four other firms it looked at – BDO, GT, Mazars and Moore Stephens. The FRC has outlined five other areas where it will take action: • Setting out to firms earlier in the year concerns over various aspects of bank audits, including their challenge of management and provisioning against loan losses and PPI mis-selling claims. • Reviewing the effectiveness of Root Cause Analysis by the firms to identify the real causes of audit shortcomings and whether their action plans will effectively address the FRC’s concerns. • Agreeing actions with firms on all audits where shortcomings were identified. • Taking enforcement action under the Audit Enforcement Procedure where appropriate. • Implementing a new audit form monitoring approach, focusing on five key pillars of leadership and governance; firm values and behaviours; business models and financial soundness; risk management; and evidence of audit quality. The FRC said it will issue its broader annual assessment of the UK market later in the year. PQ
the next three years. PwC has also agreed to review and amend its policies and procedures to ensure that audits of all non-listed high risk or high profile companies are subject to an engagement quality control review. Denison was fined £325,000 and will not be able to perform any audit work for 15 years. Former FD of RSM Tenon ‘sanctioned’ The FRC has excluded Russell McBurnie, the former FD of RSM Tenon Group, from the accountancy profession for a recommended period of five years. In addition, McBurnie has been fined £57,000 plus £825,000 costs. McBurnie admitted extensive misconduct in relation to the preparation and approval of the financial statements of RSM Tenon for the year ended 30 June 2011. He admitted nine allegations that his conduct fell significantly short of the standards expected of a member of the ICAEW. The FRC said that the ICAEW’s code of ethics required him to be straightforward and honest in all professional and business relationships, but he admitted he was reckless about the accuracy of certain information in the financial statements. 13
PQ exam tips
Get over the line Rob Sims offers some wise words on how you can turn a near miss into a solid gold win s a tutor of more years than I care to remember, I still get a buzz from helping students and seeing them succeed. In fact, it’s the reason why us tutors do the job! We all love teaching a prize-winning student, but the biggest buzz for me comes from a group of students I like to call the ‘50%-ers’. These are the students who you know are going to be close to a pass, and you know that they can pass, but often they don’t believe it themselves. These are the students who, with a few tips and a bit of hard work, can change that 45% to a 55% or a 49% to a 51% – a heartbreaking fail to the most satisfying of passes. So here are my top three tips, applicable to all ACCA papers, for getting you over the finishing line:
Tip 1 – RTQ and ATQ ‘Read the question’ is a common phrase from tutors, and a vital piece of advice. After all, if you don’t read the question properly then you may not identify important information, or miss out part of the requirement. However, just as important is to ‘Answer the question!’ No doubt
you are reading this and thinking, ‘Well, what else am I going to do?’ However, very often students answer a question similar to the one asked, rather than specifically the one actually asked. A common situation is when a question says something along the lines of: “Discuss the pros and cons of Theory X”. However, the student then gives a long and detailed description of what Model X is… that’s great and a brief introduction to the topic is fine (may even be worth one or two marks), BUT it is not what the question demanded. Make sure you tell me the pros and cons. Make sure you ATQ as well as RTQ! Tip 2 – Use your tutor and all your resources Many students don’t take advantage of all the resources available to them. If you have a tuition provider then use them! They may have great online content, with videos and practice questions. They may have student support helplines available on the weekends and evenings when you are revising. If you are struggling contact your tutor and use all the resources you can. I love it when I get an email from a student asking for help – it shows me they are doing the right thing. It is very rarely the
student asking for help who fails, it is usually those who are too stubborn or nervous to reach out for assistance. Be the student who asks for help, be the student watching the online videos, be the student asking your tutor to mark an extra question. It will help. Tip 3 – Question practise I know it’s not new advice, but question practise is one of the best things a student can do to boost their exam mark. Questions, questions, questions – past exam questions and mocks really are worth their weight in gold when it comes to passing exams. Use the past exams on the ACCA website, use mocks from your tuition provider, use any question banks you have purchased. The more question practice you do the better prepared you will be for the real exam, and the better you will get to know the common topics that come up and how they are examined. It will also naturally help you revise the topics you’ve learnt and (if you do the questions to time) get you used to working under time pressure as well, meaning you are less likely to run out of time in the real exam. PQ • Rob Sims, Content Specialist, Kaplan Publishing
F5-F9 are now only available as session CBEs Employers have told us that using spreadsheets and word processing tools are essential for modern finance professionals. That’s why we’ve developed computer-based exams (CBEs) to enhance your digital skills and better prepare you for the workplace. Since March 2018, F5-F9 exams are now only available as CBEs. There are lots of resources to help you prepare and make sure you’re ready.
“I totally recommend CBEs to everyone. For starters, your hand won’t get tired after two hours of writing!” Rafael Sanchez Sierra, F5 prizewinner from the March 2017 exam session
For more information visit: accaglobal.com/session-cbes
PQ Magazine August 2018
Competency Frameworks PQ
Managing talent is vital to saving the public sector These are worrying times for the public sector but, as Alex Metcalfe reports it’s not all doom and gloom
rganisations within the public sector face a fast-changing, challenging environment, with public services doing a lot more with much less resource. An ageing population and the impact of climate change are just a few of the key challenges testing the sector today. The right talent in place and the ability to adapt to changing environments will help public services overcome these issues. It is essential that these organisations consider the work preferences and the aspirations of young finance professionals in order to attract, develop and retain a talent pool that enables them to reach their full potential. Young finance professionals in the public sector feel their careers could be hampered due to a lack of transparent career paths, finds a new report from ACCA.The report, Generation Next: managing talent in the public sector, explores the work preferences and career ambitions of over 1,400 ACCA members and students working in the public sector, aged 16 to 36 years old. It revealed young finance professionals value transparent career paths in both attracting them to an employer and keeping them there, but only 26% believe clear paths exist in their current organisation. Across the sector, developing talent has been a challenge given austerity and the tightening of government budgets, which often hits learning and development budgets. The Generation Next survey showed that 96% of respondents were attracted to public sector employers that would provide the opportunity for them to learn and
develop skills. The research also found their experience at work was essential for attraction and retention in the public sector. The sector itself can offer a dynamic work experience, where employees can develop professionally while working to tackle leading societal challenges. On-the-job learning was one of the most-used learning activities in the sector, with 52% of all public sector respondents believing that firsthand experience and learning while working was effective. All these learning strategies; mentoring, job rotations and coaching are forms of experiential learning, where the employee ‘learns through doing’. There is clearly an opportunity for public sector employers to increase the use of these experiential forms of learning to increase the effectiveness of their learning and development mechanisms. Young accountants working in the public sector were both realistic and optimistic about
Unlocking your potential When we talk about ‘competency’ we are referring to a set of skills, knowledge, abilities, attributes and experience that has value towards effectively performing in a job. A Competency Framework then organises these to form a benchmark for what competency looks like in a given role; in this case what competency looks like for a newly qualified ACCA member. ACCA’s qualification develops the strategic, forward-thinking professional accountants the world needs. PQ Magazine August 2018
Students can explore our competency framework, which develops a blend of technical, ethical and professional skills within our qualification. There are 10 competency elements including: • Ethics and Professionalism. • Audit, Assurance and Advisory. • Corporate and Business Reporting. • Financial Management. • Governance, Risk and Control. • Leadership and Management. • Stakeholder Relationship Management.
• Strategy and Innovation. • Sustainable Management Accounting. • Tax Advisory. All of the above behavioural competencies will resonate with managers and accountants working in the public sector and these are values and behaviours that are supported in all elements of the ACCA qualification. ACCA trains the complete accounting professional. This means a qualified ACCA member will have technical skills suitable and relevant for public services.
the impact of technology on the profession. Some 60% of Generation Next believes technological advancements will replace many entry-level finance and accountancy roles in the future. However, they also understand technology will enable finance professionals to focus on much higher value-added activities. Many respondents attracted to, and looking to move into, the public sector come from corporate firms and small and medium-sized practices. In addition, among those interested in moving to the public sector, job security and work-life balance were seen as essential factors that a candidate would look for in their new public sector employer. Public sector organisations are typically unable to compete on remuneration for top talent, but must instead communicate a holistic offering to their candidates that includes clear career paths and a positive work environment. Yet whatever tactics they decide to adopt, it is essential public service employers recognise the importance of talent management as a key component of their future plans. The public sector is vitally important, as governments are responsible for tackling a number of complex issues. The ability to communicate the meanings and implications of financial realities in a useful way to key decision-makers, for example, is something provided by a well-trained finance team. Great technical skills are a given, but a top finance team also brings strong leadership skills, effective decision-making and change management skills to the public sector. The UK’s public service sector can only be sustainable so long as there are finance professionals spearheading its financial prudence and accountability. These ethics are essential to ensuring high professional standards in the public sector. PQ • Alex Metcalfe is ACCA’s head of public sector policy 15
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PQ ACCA exams
SBL: in with the new Ashim Kumar explains everything you ever wanted to know about the new ACCA Strategic Business Leader examination, examinable from September
rom September, the Professional papers P1 and P3 are being replaced by the Strategic Business Leader (SBL) exam. SBL is a compulsory paper, the Option papers remain unchanged. This article outlines some features of the new paper.
The objective of SBL “To demonstrate organisational leadership and senior consultancy or advisory capabilities and relevant professional skills” (ACCA). The SBL Exam SBL is a four-hour (unseen) case study based exam that will include one scenario on which all questions will be based. In addition, it will contain substantial data in the form of ‘exhibits’. The exhibits may take the form of reports, press articles, company website, minutes of meetings, memos and so on. The extra hour given to candidates in the exam is to allow the analysis of this large volume of data and identify facts relevant to each answer. There will be up to five compulsory questions, each with sub-parts. Candidates will be required to answer from different stakeholders’ perspectives; for example, project manager, internal auditor, etc. Each exam will contain a total of 80 technical marks and 20 professional skills marks. Professional skills marks are awarded for communication; commercial acumen; analysis; scepticism; and 18
evaluation. A failure to demonstrate these essential skills in the exam will greatly reduce the chances of success at that sitting. It is not enough to be technically competent; our professional stakeholders demand more from us. The SBL syllabus SBL must not be seen as simply a merger between P1 and P3; it is a different ‘animal’ altogether. Although it does take some topics from P1 (eg governance), and from P3 (eg strategy), there are many additional areas included (eg leadership). The core areas of this syllabus are leadership; governance; strategy; risk; technology and data analytics; organisational control and audit; finance in planning and decisionmaking; innovation, performance excellence and change management; and professional skills. This is clearly a very broad syllabus and candidates will be expected to combine a knowledge of different topics to produce a comprehensive solution; much as you would in a real business situation. Assumed knowledge Candidates will be assumed to have a knowledge of: • Ethics and Professional Skills Module (EPS). • The Applied Skills papers (F1, F4, F5, F7, F8 and F9). Refer to pages 6–9 of this mapping document for detail on which topics in these papers are
relevant: http://future.accaglobal.com/ assets/documents/strategic-businessleader-mapping-of-key-appliedknowledge-and-applied-skills.pdf The ACCA does not expect you to carry out technical calculations from previous subjects; it does, however, expect you to be aware of, and apply principles and tools from earlier studies to a real-world problem. For example, the question may provide the NPV of a project and expect you to incorporate that information in your answer. So you need to know the implications of a positive or negative NPV and use that as a part of your answer to make a recommendation or, draw a conclusion. So, you may say in your solution: “A positive NPV of $1m is prima facie support for the decision to accept a project, however a number of other factors will also need to be considered.” You would highlight other relevant factors as provided in the question, for example, relative size of the investment, possible competitor response, risk of obsolescence of this project, stakeholder response and so on. You would then provide a balanced recommendation, which incorporated all of the issues discussed. Exam preparation The SBL examination is unlike anything else in the ACCA curriculum so far; so we need to take a new approach in preparing for it: 1. Read outside the subject. Quoting realworld examples to reinforce your points in the exam, will earn you professional marks; let’s pick them up. 2. Familiarise yourselves with the Examiner’s approach and their suggestions on how to answer the questions. Please read the article here: http://future.accaglobal.com/assets/docu ments/strategic-business-leaderexaminer-approach-article.pdf 3. You will need to practise treating the exam like a real-world scenario and not an academic exercise, approaching each question from the perspective of a different stakeholder, and applying professional skills when attempting your answers. Passing this exam depends on being able to apply knowledge, skills and technique, in an ethical, comprehensive and professional way. If all this sounds daunting then get help sooner rather than later from someone with good communication skills and a broad experience of business to maximise your chances of success. PQ • Ashim Kumar is an FME online tutor. See https://www.fmelearnonline.com PQ Magazine August 2018
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‘The sky’s the limit’ We caught up with Jaye Snell of Exe Bookkeeping and Payroll Services, a distance learning student with the ICB What made you decide to study through distance learning? I studied bookkeeping through distance learning because I needed the ease and flexibility it offers. I knew I couldn’t commit to a classroom-based course and wanted to work at my own pace. ICB really stood out and ticked all the boxes for what I wanted to learn, including payroll and self assessment tax, which I couldn’t do anywhere else. Why did you choose the ICB route for your qualifications? I gained AAT QB status, but I felt that ICB’s qualifications were more practical. When I made the transition to the ICB courses I learnt so much because they focus on real-world skills. I’ve always wanted to do the nitty-gritty; taking the paperwork and turning it into something meaningful. AAT was very focused on people in a firm who wanted to be an accountant. What is it about being a self-employed bookkeeper that appeals to you? Before bookkeeping I started a website about motorcycling and had a few hobby
businesses. I’ve always wanted to make something of myself because I had such a rough time at school and needed to prove to myself that I can do it and make up for lost time. I want to have meaning and make a difference. I feel like I can do this through bookkeeping. From my experience, small businesses really need our help. What resources can you recommend? I went to the ICB’s Inspire Tour when it came to Exeter and it was really amazing. Exactly what I needed, because running your own business can be isolating. It’s great to hear people saying ‘I know what that feels like.’ Obviously I can talk to my family and friends, but sometimes their eyes just glaze over!
Snell: ‘I’ve always wanted to do the nitty-gritty; taking the paperwork and turning it into something meaningful’
What is it like running a bookkeeping practice? I set up my own business in April this year, and I’m about to take on my third client. I’m excited. Running your own bookkeeping practice is such a rewarding
career; you’re out meeting people, making a difference to the economy, small businesses and individuals. And I’ve got the ICB community to support me. What is your biggest aspiration? I want to grow my business, be able to take on staff, and create a training arm to give people the opportunities I wasn’t able to have. Maybe I’m a bit of a dreamer but I think if you’ve got a goal the sky’s the limit. Life’s too short not to go for it. PQ
How to get your small business off the ground Steven Drew explains the importance of having a proper marketing plan I’d really like to start marketing my business more effectively, but I have no experience in that field. How do I go about putting a marketing plan into action? Writing a marketing plan is essential for all businesses, in order to help generate more sales. Having a clear plan will make it easier to budget, manage your time, predict sales and know your communication strategy. Before you plan, you first need to work out where you’re going. Your marketing strategy document should always begin with your business objectives; competitor and market research; any customer research you have carried out; and information about who your products appeal to, along with which channels they are most likely to use. When planning your marketing strategy, you 20
should constantly link back to how you intend to meet those business objectives. It should be a practical, working document that provides clarity of your business vision and is backed up by sound thinking and research. You should regularly review this document – indeed some
businesses put together different but complementary strategies for the short, medium and longer term. You should set a marketing budget – a guide for this would be 1-2% of your forecast topline revenue. Split your budget by channels and by months. There are a wide variety of marketing channels to explore and you should be able to pick out those which appeal most to your business or which can be eliminated. Channels include print and digital advertising, search engine optimisation, email marketing, social media and sponsorship. Finally, plot out the first six months or so with tactical marketing spends, including the target audience you aim to reach and the business objective of the activity. Ensure you track every campaign to determine their effectiveness – what you could repeat or even expand upon in future, and what didn’t work so well. PQ • Steven Drew is Product Manager for Informi, powered by AAT. Visit informi.co.uk/PQ to find more practical advice and support for new businesses PQ Magazine August 2018
LSBF/PQ conference PQ
Dr Noel Tagoe was the opening act of our recent careers conference. Here’s how he sees the future… he first thing Dr Noel Tagoe told delegates to our ‘Being Global: Future-proofing your career in accountancy’ was that their future and the future of the profession lies in the digital world. He emphasised that the environment in which organisations are operating is changing rapidly, in unpredictable ways, and those who don’t change with it risk being left behind. He said we all know the technologies transforming industries, and these include: AI, autonomous vehicles, big data analytics and cloud; custom manufacturing and 3D printing; internet of things and connected devices; robots and drones; social media and platforms; and blockchain. The problem is that the impact of these changes has become increasingly complex and finance must support all these approaches. The performance challenge that finance professionals must answer is how they can preserve value in the face of such unprecedented and disruptive changes. Tagoe stressed that when it comes to data it is not all about accountants collecting or processing the information. Rather it is about ensuring the integrity of data and using the data in different ways. He said that communicating is not the same as reporting – it goes much deeper and further. There are, he explained, five ways of getting value out of data: make decisions; understanding customers; develop customer value proposition; enhance
for a digital world
Noel Tagoe: ‘communicating is not the same as reporting’ operational efficiency; and monetise data. Tagoe said that the changes in organisational ecosystems also calls for new ways of costing. We have the traditional costing of manufacturing mechanical direct costs.
This moved to ABC/ABM, which brought in computer-aide and indirect costs. The next move will be into digital costing, where new and emerging techniques will be needed to measure service, digital and platform businesses. There has also been a dramatic move away from tangible value to intangible value. In 1975, business valuations were split between 83% tangible and 17% intangible assets. In 2015, it was a complete reverse with tangible values only accounting for 16% of the balance sheet and 84% coming from intangible value. Finally, Tagoe looked at business models. Here he felt the need to have an end-to-end view of the organisation was paramount. When it comes to the challenge of automation he said he liked the idea that AI gives humans superpowers! Machines will do the transactions and predictions, but finance professionals will be needed to lead, empathise, create and judge. He smiled when he said that in the past creative accounting may have been deemed a bad thing. But professional bodies now need to create creative accountants who feel at home in their digital world. PQ • CIMA will be unveiling it new syllabus later this year.
How to turn on employers... Mark Twun-Ampofo, partner, Kingstone Smith: “Please don’t bring your own refreshments to an interview. We will provide water and maybe a coffee.” “At the interview ask questions you actually want the answer to. Don’t try to appear clever, just ask something ‘normal’.” Stephen Gyte, national head of learning & development, Crowe Clark Whitehill: “You need to be curious. I worry if there is a lack of willingness to interact and ask questions.”
What turns employers off potential employees? Nav Gudra, HR advisor, National Audit Office: “Do your homework and have a relevant question ready. It’s a competitive process and you need to have a meaningful question ready to ask.” PQ Magazine August 2018
Tom Eagle, head of financial recruitment, Pro-recruitment: “Do not put your photo on your CV. It’s a sales document and must look professional and promote any experience that matches the role you are applying for.” “At an interview don’t appear like you are after ‘any’ job. You want to work for the people you are being interviewed for!” 21
PQ CIMA spotlight
Keeping your balance Jackie Durham explains how you can maintain a work, life and study balance to ensure successful outcomes all round rying to manage work, life and study is a constant balancing act we are all familiar with. How is it, then, that some people seem to achieve it more or less effortlessly, while the rest of us experience it as a rollercoaster ride, where we are hanging on to the safety bar for grim life thinking “Stop! I want to get off!”? Sorry, maybe that’s just me. After all, creating the perfect work-life-study balance is all about allocating scarce resources… as management accountants you should be good at that! Let’s consider what these scarce resources are. Obviously time – there’s never enough of that when you are working and studying, never mind if you have a family or want a social life. Then there’s energy; sometimes we make the time but can’t find the energy (or motivation) to do what we planned. There is also support, a vital ingredient in this equation that we may overlook or not make full use of and, finally, our attention. How often do we feel we are giving things our full attention when, if we were honest with ourselves, we’d know that wasn’t the case. If you are going to survive the trials of professional studies while working you need to hone your time management skills. It’s as important in your daily life as it is in the examinations. Easier said than done, of course, but with planning, organisation and prioritization it is possible. Having a study plan that works back from exam dates and includes all the things you need to do, including essential appointments, family events and planned down time (we all need some of that), will help you identify how much time you have available for study and where you can schedule it in. The CIMA Self Study Guides on CIMAconnect
(www.cimaglobal.com/connect) include a planner to enable you to do this. Even when we make the time it can be hard to find the energy to tackle practice exam questions, for example, when you’ve already been at work all day. Again, a sensible plan can help as can reminding yourself of why you started studying in the first place and that it will be worth it when you pass the exam. On the upside, the CIMA exams offer great flexibility; you can take OTs more or less any time and get your results straight away, and with four case study windows each year there’s lots of scope for planning around those, too. Just be aware that the same flexibility can lead to procrastination and putting off until tomorrow what could/should be done today. The best plan is to decide on your study method and book your exam date based on that. Then your study plan can work back from the exam date. Simples! There’s flexibility, too, around study options. For those of you with lots of competing priorities to juggle, self-study via distance learning or live-online options offer the ability to study where and when it suits you, whether that’s on your commute or in a quiet office at work when everyone else has gone home. Having a plan is a great start, but you also need to review it regularly – what was a priority yesterday may have been
overtaken by events or new deadlines may have been set. Each day, reassess your priorities for that day and adjust if necessary, rescheduling any activities which have been downgraded, etc. Earlier in this article I mentioned support, and here I mean your network of friends, family, fellow studiers, tutors, employers, colleagues, etc. Getting these people behind you in your studies can be invaluable. Most people will try to help or be flexible if you’ve explained your situation and how it affects the time you have available for overtime, family activities, date nights, etc. Reassure them that you won’t always be studying or taking exams and that things that have to wait now will get their moment in future. Finally, let’s talk about attention and the importance of giving it wholeheartedly to whatever you are doing at the time. Everyone multitasks these days, it’s often the only way to get things done. However, it can be a mistake that eats time rather than maximizes it. Imagine, you’ve set aside an hour to study Chapter X from the text book and do 10 practice OTs – great plan. You’ve told the family that you are working in the spare room for an hour and not to disturb you. After that you will be free to spend time with them – even better plan. You make a cup of tea or take a glass of water in with you so there’s no need to break off because you are thirsty or need a caffeine kick – cooking on gas now. You neglect to leave your phone outside the room – big mistake! Before you realise, your phone has buzzed or flashed, it’s the football results or a Facebook message. You risk a quick glance and then before you know it you have been distracted, your attention has been diverted away from study and you don’t get the full benefit of all the preparation you put into ring fencing that hour. There is no simple fail-safe approach to getting the work-life balance right, but hopefully this article has given you a little food for thought. PQ • Jackie Durham, education and training consultant, CIMA
PQ Magazine August 2018
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PQ ACCA F2 & F5 papers
Can I take your order please? Tom Bulman explains all about the Economic Order Quantity and offers an example to explain the theory he Economic Order Quantity (EOQ) is something you’ll see a few times in your ACCA studies: in F2, F5, F9 and beyond into the Strategic Professional Papers. It is a very simple calculation, but one that nevertheless can cause problems for students. First, let’s be clear about what the EOQ does. It tells a company how many units to order when they contact their supplier. Let’s say my company makes chairs from planks of wood. How much wood should I order from the timber merchant? One plank, 100 planks, 1000 planks? The EOQ will tell me. The clue’s in the title: economic (meaning optimal), order, quantity… The EOQ only takes account of three things: 1. Co – the cost of placing an order. This is literally the cost of picking up the phone or completing an online form and making an order. In the real world, this would include the time taken to place an order as well as any order booking fees charged by the supplier. 2. D – the demand. This is the annual requirement for the goods being ordered. How many planks does my company need in total in one year? 3. Ch – the holding cost. This is the cost of storing one unit (plank) for one year. This will include all costs related to the storage of inventory, for example, warehouse rental, insurance, security costs and so on. The EOQ is calculated as: 2 x Co x D Ch This is a very easy formula to remember using the mnemonic ‘two cod and chips wrapped in paper’! You can see in the formula the top line is ‘2 CoD’ and the bottom line is ‘Ch’ for ‘chips’. The square root provides the paper wrapping! What the letters stand for is also very straightforward, as unlike many other formula, the letters correspond exactly to what they represent. Co is the cost of the order, D is demand, and Ch is the cost of holding the inventory.
Let’s look at an example My company makes chairs from planks of wood. The cost of placing an order at the timber merchant is $40. I require 750 planks per month and the cost of holding one plank for one year is $2. What is the EOQ? Before we look at the calculation, here are some tips: • Do not attempt to do the calculation in one go in your calculator. I would do the ‘2 x cost of order x demand’ first, then divide by the cost of holding, and then move onto the square root • Watch out for the time frames and other details. We want annual demand, and cost of holding one unit of inventory for one year. • Remember the ‘2’ at the start of the calculation! So, let’s look at my company again. Co is $40, D is 750 planks per month and Ch is $2. Plugging those figures into the formula we get: 2 x $40 x 750 planks x 12 months $2 Note that we must get the demand as an annual figure, hence multiplying by 12 months in this case. Ignoring the square root for the time being, we can work out the rest of the formula to get: 720,000 $2 And then….. 360,000 Now tackle the square root, and we get 600 planks. So, when my company calls the supplier, it should order 600 planks every time. Thinking about what this formula does, we can consider the graph (right). As we move from left to right on the graph, the company is ordering more and more units with every order. If the company orders very few units with each order (left hand side of the graph), the holding cost is very low (as they have low inventory levels), but the ordering cost is high 24
(as they are placing so many orders). On the right-hand side, we see the opposite; very high holding costs but low ordering costs, as the company makes very large, infrequent orders. The EOQ therefore calculates the optimal midpoint, when the sum of the two costs, the total cost, is lowest. Having understood the basics of EOQ, we can dig a little deeper, into the assumptions it makes and the further calculations we can do. Assumptions and limitations The EOQ focuses only on the ordering costs, holding costs and demand, and one of its limitations is that it cannot cope with any complexity, such as buffer inventory. It also simply assumes the figures are constant over time. For example, it assumes demand is constant throughout the year and that the holding costs never change. Further calculations Once you have calculated the EOQ, you can also calculate the total number of orders per year that need to be placed, the total annual ordering cost and the total annual holding cost. Looking back at the example above, my company is going to order 600 planks at a time (the EOQ). Given that I need 9,000 planks per year (750 planks x 12 months), I must place 15 orders per year (9,000 / 600), therefore ordering every 0.8 months (12 months / 15 orders) or approximately every 24 days (0.8 months x 30 days). The total annual ordering cost is $600 (15 orders x $40 cost of ordering). We can also calculate the annual holding cost. Assuming my company orders 600 planks at a time, and holds no buffer inventory, and that the orders arrive just as inventory reaches 0 units, my maximum inventory will be 600, my minimum inventory will be 0, and therefore my average inventory will be 300 units [(600 + 0) / 2]. The annual holding cost will therefore be $600 (300 units of inventory held x $2 of holding cost). Remember that because the EOQ is the number of orders you make that minimises the holding costs and ordering costs, they must be equal! We see on the graph this is the lowest point of the total cost and in our example, they are both $600. And that’s the key principles of the EOQ! PQ • Tom Bulman is an F2 and F5 tutor at AVADO PQ Magazine August 2018
CIMA case PQ opefully you have booked your MCS exam slot and are now ramping up for the Montel case. I would say after the pressures of sitting the Management level OT exams (E2, F2 and P2) you may actually find you enjoy the preparation for case study. First step is to get very familiar with the pre-seen and with your ‘part’ in this experience. For three hours you will be a financial manager in Montel’s head office, reporting to the Senior Financial Manager.
Smile for Montel! James Taylor holds your hand and leads you through the latest CIMA case
The exam The case study exam is a computer based exam of three hours – there is no reading time added. The exam aims to integrate and apply the knowledge tested in the objective test exams. The exam is based on: • Pre-seen material which is already published on CIMAConnect. • Additional unseen material given to you in the exam room. The answers you give will be long form and typed into the exam system, this will consist of all forms of modern communication, including emails, reports and briefing notes as examples. A significant amount of the MCS is based on knowledge of the F2 and P2 Learning outcomes plus the assumed knowledge brought forward from F1 and P1. So you need to make sure you bring technical knowledge to the MCS party Writing skills For some, this will be the first time you will get to display to CIMA your ability to ‘write’ long form answers at managerial standard. You will need to be able to combine the competencies from the CIMA framework with an ability to structure an answer with a ‘logical flow’. Practising answering long form questions based on Montel is going to be key. If your tutor offers to mark homework take them up on the offer, as getting as much feedback as possible is very important. Focus The most important skill on the day is not mentioned in the competency framework, but basically is this: have you answered the tasks set with sufficient application to Montel? Some calculations are included where they give context but the focus needs to be on the written parts of these questions. You need to be aware that P2 is the lead paper on MCS and therefore being prepared for technical questions on Advanced Management Accounting is key. Montel You are going to get one of the five variants. Each variant has four sections. You get 45 minutes to answer the task within the section. The task will have more than one part and answering all PQ Magazine August 2018
Today is 1st August 2018 and you receive the following email From: Senior Financial Manager To: Financial Manager Sent: 1st August 2018 Subject: Share Option Scheme The board are really concerned about the risk of key staff being attracted to Kira. Our head of research and development and her team are crucial to our business and our mission. There have been rumours of her being headhunted and allowed to take whom she wants and basically write her own cheque. I need to brief the board on the remuneration options that could tie our research and development into Montel for the next three years. I am therefore considering creating a share option scheme. IFRS 2 did not exist when I qualified and I have not had exposure to this standard. Can you therefore reply with your understanding of what the remuneration options are and the accounting problems associated with the proposal? Please be aware we do not have any other options or warrants in issue. Regards SFM Senior Financial Manager Montel
parts of the task, before the system moves you on after 45 minutes, is key. The elements of the task can be pulled from the P pillar, the F pillar and the E pillar. The variants are built around a major theme. Being very familiar with the Montel pre-seen, and in this case the camera manufacturing industry, can help you to feel comfortable with the subject matter on the day, but you must answer the question as set on the day not ‘one you did earlier’! You need to be prepared for a ‘curved ball’ variant. Often one variant is rogue and it would be impossible for anybody to have seen the angle coming. It is quite positive to get the rogue variant as the more difficult the variant the easier it can be for you as an individual to shine. An easy paper may seem like a ‘gift’ but you have to outperform other candidates. It can be hard to believe but a tough paper is often easier to pass for a competent student who thinks on their feet, generate ideas and answers all parts of all tasks. Here is an example of a question (with two tasks) that we have written for our Montel Case Exam Kit: As this question has two tasks, you should spend 45 minutes in total on this. To receive the full model solution answer to this question please email email@example.com PQ • James Taylor, Commercial Director, HTFT Partnership
Win an MCS exam kit for the August ‘Montel' sitting We have five kits worth £50 each up for grabs Email firstname.lastname@example.org and head up your email ‘HTFT MCS kit’ – and we will do the rest 25
PQ ACCA P6 exam
How to beat the beast Liz Hulls has some top tips on passing the Advanced Tax paper
and jot down everything you can remember on that topic. Attempt any examples or short questions in the text-book relevant to that area. Go back to the question now that you’ve learnt how to do the basics and that you understand the rules of tax being tested.
dvanced Tax (ATX) was the first of the four ACCA Option papers to remove choice of questions in Section B (in the June 2018 exam sitting). GLOBAL PASS RATES Do the question to time: Get to the point There’s not a hope of quickly; use lots of sub-headings; use bullet Sept ’17 33% question spotting and with points; and use summary tables. Dec ’17 36% such bleak pass rates, how The examiner is happy to see all of these. Mar ’18 37% do students begin to revise Even in report format, bullet points and such a huge and challenging syllabus? subheadings make your report much clearer. Here are some tips to make sure that your Don’t forget that the ACCA approved answers revision time is both focused and effective: are much lengthier than you would be expected to write in exam conditions. They are this length Where to start: In the last few weeks before the to aid your learning. exam all your revision should be question driven. You should always use exam questions from an Study the approved publisher as these will have been answer: Now that updated for the current tax year. Look at the you’ve done the question requirements first and then start question, spend at reading the question through. least 50% of the allotted question Completely stuck: Having read the question, if time studying the there are any topics that you’re not sure about or answer. List where where your knowledge is a bit hazy then list the you went wrong and topics out, go back to your course notes/pocket ideally have a quick notes/textbook for each topic and spend 15 go at the worse bits the following day to check minutes reading it through. Turn the notes over you’ve learnt from your mistakes. Reviewing the
answer is a vital part of your learning process. Worrying topics? Pick a topic that’s worrying you, for example: • Losses: list all the loss reliefs, what they can be offset against, when they can be offset, what rules are attached to the relief. • Reliefs: use a sheet of paper, list them out using separate pages for IHT and CGT. What are the conditions? Who can claim them? When will they apply? Memorise: Use devices that work for you: • Mind maps if you’re very visual. • Lists and tables if you’re visual/logical. • Sticky notes around the house for every Capital Gains relief, rules on share schemes, etc. • Audio files if you’re more auditory. • Try getting someone to test your knowledge! Remember, the examiner’s key phrase reiterated at the start of every examiner’s report: ‘Know your stuff’. Exam technique will be crucial but good quality revision will ensure that you have the essential knowledge to pass this challenging exam. PQ • Liz Hulls is Director and Tax Tutor at Vale Financial Training
PQ Magazine August 2018
ICAEW spotlight PQ
n a world increasingly reliant on social media and high-speed fibre optics, the only networking some find themselves doing is accepting a LinkedIn request. This, however, needs to change. Networking involves far more than clicking ‘accept’ and scrolling through a profile. It should be about exploring interpersonal networks outside of your comfort zone. It may only take one inspirational person to kick-start your motivation and expand your horizons. The biggest advantage to networking is building a support system. You could meet someone you could call for technical advice, future business opportunities or career guidance – the possibilities of what people can contribute are endless. The new relationships you can develop through networking will have a positive influence on your career. The broader and more diverse your network, the better it will serve you in the future – provided that you nurture and continue to expand it. And regular attendance at professional and social networking events will help increase your profile and build your reputation as someone who can offer help, support and advice to others. So here are some of the tactics that will help you approach any networking event with the confidence to start making some lasting connections: • Doing some brief research on the event
in advance will help you understand what to expect and hopefully give you an idea of some of the people you might encounter. This can help to calm some of those initial nerves, and means you’re not going to encounter any surprises. If you’re likely to have one-to-one time with someone at an event, especially with an individual at a more advanced stage of their career, go prepared with a few
April Warrier of RSM UK has some top advice on how to build your network
questions that you can ask them. • When you first arrive at an event, try to overcome the fear of approaching a circle and introducing yourself. A way to go about this is to remember that everyone is in the room for the same reason. Also keep in mind that it’s very likely the people you are approaching faced the same fear only moments before. • The best advice is to be natural. It is important to realise that people will be interested in getting to know you and may be able to tell if you’re playing a part. Even if you don’t feel confident speaking to people just remind yourself that everyone has something to offer. • The best way to get better at networking is to go out and do it, and the only way to build a strong network is to meet and connect with new people. • Meet and network with fellow ACA students by exploring the student societies and events near you – check them out at icaew.com/studentgroups or icaew.com/events PQ • April Warrier, Audit Supervisor, RSM UK Reproduced with the permission of ICAEW, adapted from an article first published in Vital (July 2018)
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PQ Magazine August 2018
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PQ business strategy
Words+numbers=pass Alex Wakeman has some advice for business strategy studiers who tend to struggle with the numbers
You could see a dramatic improvement in the quality of your analysis, even if you merely raise the issue of price/volume impacting sales. Although better answers will find the movements (if possible) and dive deeper into the review of sales, identifying the key driver of volume change, speculating whether it was more than just price.
Begin with basics Key to your success is to begin with the basics. Save the fancy stuff for when you have already accumulated marks and you are approaching the end of your time available. Start with sales movement and gross profit margin, pivotal in assessing business performance. Calculating this shouldn’t pose a problem, but having calculated them you can then go in search of the key drivers/reasons for this change. Sales can be viewed as a mixture of volume and price. Most scenarios will provide data about the volume, for example: houses sold; recruits placed; passengers flown. Some comparative pricing data could be percentage commission; percentage of first year’s salary; average price of a ticket in the year.
Identify new sources Identify any new sources of data for the current year, a new revenue stream, that may help develop the opening line of “sales have risen X%”. For example, if a company begins to offer maintenance contracts on the products sold this year, it will more than likely make revenue and profits look better this year, skewing your data. This should encourage you to produce a further calculation that strips out the new revenue stream ensuring we are making a like-for-like comparison. Note, specific data for last year may no longer be in this year, e.g. loss of a key contract at the end of the previous year, a similar approach is required. There may also be an opportunity to identify the two, no doubt different, profit margins between the products sold and the maintenance contracts, further boosting the number of calculations you can have in your answer. If the cost information is not available, then you can briefly suggest that this extra information would be useful to further analyse the performance of the business, then move on. Look for other non-financial information, perhaps the number of employees is provided, so calculate sales (or profit) per member of staff to see if the business has become efficient in achieving those extra sales. On the cost side, the
tudent feelings towards data analytical questions, found in most strategy papers, are often divided. They reward the student that can both calculate key figures and movements in the data provided, as well as explaining these using information from the scenario and any appropriate inferences from the text. Students are often strong in one area but not the other. This article is aimed at those who struggle with the number crunching; those confident with numbers should, from our experience, learn to rein in their excitement at numeric analysis or risk missing out on the discursive element of the question that must follow the calculations.
total number of labour hours used may be given, this can be used in conjunction with volumes sold to calculate the hours per unit. If you have mentioned variable costs, then why not discuss fixed costs? Calculate the change here and try to use the scenario to explain what may have caused the change in fixed costs. Consider the sales mix, between the two or three key products/services being sold. Food to drink sales, manicures to pedicures, snooker hours to pool hours. Calculating the weighting of revenue or volume can help establish changing trends and root cause of performance. If the data allows, this can link to the profitability of each product – cause for concern if the highly profitable product’s share of the overall sales mix is falling. Give recognition to any small, seemingly insignificant/immaterial, numbers. Something audit students may struggle to bring themselves to do. It still impacts the performance of the organisation. Sales of swim equipment at the local leisure centre; duty free sales on board the aircraft; gift shop sales at a sporting event. Broaden your scope So, when faced with numerical analysis look to broaden the scope of your answer beyond the generic, and all too common, percentage movements in revenue and profit. Use these as a springboard into a more complete and professional analysis. Those students who blend their answer between the two different skills (calculating movements and developing explanations) are the students I would back to pass the question. PQ • Alex Wakeman is an experienced strategy tutor with BPP PQ Magazine August 2018
social media ROUND-UP UK ACCA students sitting their CBEs in June were quick to point out tech problems at several centres. The ACCA reassured us in a meeting that these were isolated problems, but said it was working hard to make sure students don’t experience similar delays in September. However, it appears that there were problems elsewhere. One student contact us via Facebook and said: “I sat F9 in Malta and had to be there an hour before the start of the exam and were then kept waiting for four hours before we sat the exam.” We understand there were problem on the island for the whole of the week. Concern over apprenticeships is going to be a continuing story in the coming months. On Twitter we highlighted what Ann Francke, the head of the Chartered Management Institute, had to say: “Apprenticeships should be renamed so they can escape the perception that they are factory floor qualifications.” Chris Grubisic said “PLP – professional learning programmes.” Michael Hitchin was adamant: “Well not internships that’s for sure!” AAT CEO Mark Farrar believes the time is right to scrap apprenticeship fees for SMEs. Currently, firms outside the levy have to pay a 10% charge for taking on an apprentice. Keeping everyone fit and healthy was also a theme. Followers loved our tweet: “KPMG has introduced compulsory yoga and mindfulness sessions for its 4,000 UK audit staff. All have to attend a three-day session aimed at helping them deal with the stress of being an auditor.” We followed it up with the call from Pure Gym’s Humphrey Cobbold who said the government should remove VAT on gym membership if it was serious about the nation’s health.
Life at Carlisle Refrigeration AAT Level 3 student Rebecca Mooney, 22, is an accounting assistant based in Carlisle. She has worked there for four years. Her claim to fame is that she is the current AAT Apprentice of the year. What time does your alarm clock go off on a working day? 6.45 am. What’s the first thing you do when you get to your desk? Check my emails and look through any paperwork that has been put on my desk. I also pop through to my mentor’s office for a catch up. What’s on your desk? Coffee cups (one for coffee and one for pens), telephone, filing trays, calculator, the usual really. What’s the best thing about where you work? It’s a very friendly environment to work in, everyone gets along. Also, I am allowed to go to college on day release once a week which I am grateful for. Where’s your favourite place for lunch? A small sandwich shop down the road, I love their brie and cranberry paninis. What (or who) can you see when you sit at your desk? I
can see into the corridor through tempered glass, so I can always see who is coming and going. On certain afternoons my colleague Gemma sits with me and we have a chat while working. Which websites are your favourites and why? The Fitbit site, I bought one last year and have been obsessed since. I also like Facebook, Instagram, Twitter – I like keeping up-to-date with social media. Which websites do you use for work? Creditsafe, for company credit checks, and the Worldpay site. How many hours a week do you spend in meetings? Hardly any. What time do you leave the office? Between 4.30 – 5.30pm. How do you relax? I like to read on a night, but after work I often go to the gym or for a walk. Preferably a walk if it’s nice as I find it calming being outside.
What’s your favourite tipple? Got to be wine. How often do you take work home with you? Never, apart from my college work. What is your favourite TV show? Come Dine with Me, I can’t help but love that show. Summer or winter? Winter – everyone loves Christmas. Pub or club? Pub. Who is your hero? Karren Brady, she seems to excel in everything she turns her hand to. If you had a time machine, where would you go? I would love to visit the Suffragette era or even the period of the World Wars. Visiting a period of hardship would make you appreciate the things we have more than we do. If you hadn’t chosen accountancy, where might you be now? I would like to think I could be a walking tour guide. I like hiking and I love talking so I think it would be perfect for me!
In brief Missed target The UK’s FTSE 350 firms are likely to miss the government-backed target of a third of boardroom jobs being held by women. Currently, women hold 25.5% of these posts, says a Hampton-Alexandra review. To meet the targets some 40% of all board appointments need to go to women in the next two years. The review named and shamed 10 companies that have no women on their boards. These include Sports Direct International, Stobart Group and Hearld Investment Trust.
Equal access to training? There should be a level playing field between the employed and self-employed when it comes to tax relief on work-related training expenses, says the ATT. For the selfemployed, tax relief is generally allowed for costs incurred to update existing skills but not for investing in training for new skills to use in their business. For employees paying for their own work-related training there are few circumstances where the individual would not be entitled to tax relief on these costs.
When are you happiest? It’s official: workers are at their happiest at 3.25pm, says a survey looking into the peaks and troughs of our moods during a working day. Most days you will have (on average) eight happy moments and five low points. It all starts waking after a good night’s sleep (a happy moment) or being appreciated by your boss. A down moment – getting stuck in traffic on the way to work or a disagreement with a colleague or client.
The PQ Book Club: books you should read
We couldn’t resist a tweet about World Cup star Ronaldo, either: “Ronaldo might be as good as the whole Spanish team, but he has reportedly agreed to a £16.4m fine and a suspended jail term over tax evasion charges.” PQ Magazine August 2018
How to Have a Great Life by Paul McGee (Capstone, £9.99) It’s always a good sign when you pick up a book for a 10-minute read and an hour later you are still reading it. That’s what happened to this reviewer, and it’s a testament to the author that this entertaining and clever book is hard to put down. The subtitle is ‘35 surprisingly simple ways to success, fulfillment and happiness’, which accurately
describes the contents. The author’s premise is that each of us already has many of the tools we need to succeed – we just need to know which ones to use and how best to use them. There is real wisdom in these pages; this is a cut above the average self-help book. What’s more the layout, with short chapters punctuated with quotes and aphorisms, means the advice is easy to digest and makes this book a joy to read.
So what are you waiting for? As McGee says: “A life of success, fulfilment and happiness does not just happen by accident. It happens by action. So, quit the talking and do some walking. Today.” PQ rating 5/5 Well worth a tenner of anyone’s cash. • Reviewed by Jo Daley 29
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WHERE’S THE MORALITY? CAPITAL OF TAX The Vatican has called for more regulation of the world’s financial systems, as they are not Christian enough! It condemned a “reckless and amoral culture of waste” which makes some rich while leaving great sways of impoverished people “without any means of escape”. Among the sins of the current system are executive salaries, credit fault swaps and derivatives.
SWITCH IT OFF! Mobile phones need to be switched off at 10pm if you want to prevent mood disorders and stay happy, says Professor Daniel Smith of Glasgow University. His study found that people who spend the night checking social media or watching TV are more likely to suffer from problem such as neuroticism and bipolar disorder, and rate themselves less happy and more lonely. It seems that modern life is scrambling our natural rhythms that says “daylight is time for activity and darkness is time for sleep”.
BEAT ANXIETY WITH TEA Kombucha is an ancient Chinese tea prized for its detoxifying and energising properties. Some experts claim the fermentation process means it can help improve gut health, insomnia, and generally improve mental and physical well-being. Former England rugby star Jonny Wilkinson loves it so much he has developed his own range of drinks for Sainsbury’s. His ‘No 1 Kombucha’ comes in three
flavours – Ginger and Turmeric; Passionfruit, Goji and Raspberry; and Pomegranate and Hibiscus.
It won’t come as a surprise to many to hear that a Sicilian town notorious as the birthplace of the mafia’s top godfather is also reported to be Italy’s capital for tax evasion. According to an official audit the 30,000 inhabitants of the town on the west of the island have racked up some €42m in unpaid taxes in the last five years. The government’s administrator Salvatore Caccamo says that efforts to counter tax evasion were so ineffective it rendered the practice virtually legal.
BBC HARDSHIP FUND
THERE’S A BADGE FOR THAT Turning notes on their head The Girl Guides have teamed up with insurer Legal & General to create a new Saver badge, which is designed to help promote financial literacy among young girls and women. Some of the skills required to earn the Saver badge will include managing cash efficiency, balancing daily and weekly spending and putting money away for a rainy day. The new badge will fit among others that are designed to put the guides more in touch with modern trends. Other new badges come in app design, DIY and animation, to name but a few.
Ulster Bank has said it is going to issue the UK’s first ‘vertical’ banknotes. These upright £5 and £10 will come into circulation some time next year. The £5 note features pictures of Strangford Lough and Brent Geese. The ten-pound note has an Irish hare and Lough Erne. These notes are legal tender in all parts of the UK.
The BBC has reportedly been making hardship payments to presenters who have been left facing huge tax bills after they said that they were advised (and in some cases forced) by the corporation to form companies, so they could be treated as freelancers. The BBC’s Anne Bulford told the Commons public accounts committee that it had given loans and advances to around 15 people who have had financial difficulty due to move by HMRC to recover tax owed.
A DAY A WEEK How long do you think you are spending online? An Ofcom study found that adults spend an average of one day a week online. Weekly internet use rose from 22.9 hours in 2016 to 24 hours last year. Some 10 years ago we were spending 12.1 hours a week online. The study also found that the average UK adult has access to six media devices – a television, mobile phone, computer (desktop or laptop), tablet,
’ WEV E
radio and digital video recorder. Among the stats is a dip in the number of people who say Facebook is their preferred social media – this has dropped from 80% to 70%.
GOT THE L OT
The memory booster
Time for a bit of stress relief and you time? We have three copies of 3D Colouring Animals to give away to readers this month – glasses included. This book gives you the chance to colour in designs including birds of paradise, incredible insects, sensational sea creatures and other exotic animals. Send your name and address to enter this lucky dip. Head up your email ‘Animals’ and send it to email@example.com. It really is as easy as that.
We have three Memory Booster workbooks to give away this month. The tips and exercises will help you remember names and numbers and it’s claimed you will even be able to shop without the need of a list! Follow the 10-step plan to maximise the potential of your memory in this straightforward and clearly presented book. Send us your name and address to be entered for this giveaway. Head up your email ‘Memory booster’ and send your email to firstname.lastname@example.org. Don’t forget now!
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 10 August. The main draw will take place on Monday 13 August 2018.
TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM 30
PQ Magazine August 2018
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PQ magazine is a free monthly magazine for student accountants, focusing mainly on the ACCA, CIMA, CIPFA, ICAEW and AAT qualifications. It's...
Published on Jul 10, 2018
PQ magazine is a free monthly magazine for student accountants, focusing mainly on the ACCA, CIMA, CIPFA, ICAEW and AAT qualifications. It's...