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PQ magazine /

December 2016











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News 08PwC blow PQ who failed exam unfairly dismissed, says court 10ACCA results year-on-year results show big improvement 12CIMA case Institute publishes suite of case study resources Features, etc 06Mind your Ps&Qs My CIMA F3 hell; and how many hours should you study per paper? 14ACCA changes Mary Bishop explains new developments to the qualifiction 16PQ Awards 2017 The deadline is looming so get your entry in! 18Fashion How one PwC consultant is changing the way women dress for the workplace 19ACCA tips Great advice to help you pass your exams 22International standards We examine IAS 37 on provisions 24Exam preparation How you should spend those last 24 hours before the exam 26Let’s get technical Ratio analysis and company accounts 27ICAEW spotlight Top tips on how to pass your ACA exam 29Tax update Passing the CTA Awareness exam; and how the ADIT qualification can help you 30Zero-based budgeting Philip Dunn explains the concept of zero-based budgeting

December 2016 31CIMA case Make the sure you

use the right ingredients 32ACCA winners Meet two ACCAs who are going places 33College visit We took a trip to the University of Derby 34Careers #1 Assessing whether an employer is right for you 35Careers #2 Life at Perrys; and the best of social media 38Fun stuff We’ve got four great giveaways for you this month! The columnists Robert Bruce Collaboration is key 8 Prem Sikka Accounting standards have clouded the picture 10 Carl Lygo Why ‘arguing like an accountant’ is no bad thing 12 Subscribe to PQ magazine It’s FREE – go to ABC July 2015 – June 2016


Publisher’s statement: We send a digital issue of the magazine to an additional 8,751 requested readers Free to all accountancy students Annual subscription: £35 (£50 overseas)

The season of goodwill Well, we couldn’t resist it, a credit and debit Christmas tree – what more could you want! Thanks to HTFT’s Clare Finch and the team for talking us through this most basic of concepts. We hope it gets you in the mood for Christmas, it really is just around the corner. But before that for many there is still the little matter of some exams. We haven’t forgotten and have three pages of exam advice for you December ACCA sitters (starting on page 19). There are also two CIMA P1 resit courses up for grabs for those wanting to give themselves a pass before Christmas! You will have to be quick as the deadline for this prize draw is 18 November (see page 33). If these don’t work for you and you are looking for an early Christmas treat what about our bumper giveaways on page 38? We have the Man Booker Prize shortlist to give away – and much more. No week the same I had one stranger than normal week this month. One day I was at the FRC Open meeting and the next I was in Leicester Square for the premier of ‘The Accountant’. I can’t moan, both events were good in their own way! FRC CEO Stephen Haddrill told me that not being able to go after rogue directors who are not accountants has become a big public interest issue. He believes the FRC could do its job better if it had greater powers here, and I have to agree with him. The recent Tesco accounting scandal wasn’t instigated just by the accountant, but only those who took the exams will feel the full force of the governing body. We really enjoyed our night out at ‘The Accountant’, but what was more fun was seeing the lengths to which CIMA’s Peter Stewart would go to get Ben Affleck to sign CIMA’s new welcome pack. He got his man, of course. Graham Hambly, PQ magazine editor –

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PQ have your say

email My CIMA F3 hell

the level of requirement, length of question, information in the question and ambiguity of question? I don’t expect to get spoon-fed at this level, but the means of preparation suggested are a joke. As much of a joke as their recent tweet basically saying that if you fail, just do it again. It sounds like this is exactly what they want you to do. It must be close to the stage where there are as many students stuck in limbo as there are members. Where’s the logic in that? Mr Flatman says he doesn’t miss the bad headlines. I certainly won’t miss these exams! Name and address supplied

I felt I had to write this in light of the self-back patting CIMA are doing over their OT results. I just sat and failed F3 and not for the first time – about six or seven questions in I found myself saying, “what the hell is this?” Now let me be reasonable here. F3 is my weakest subject and it’s also the last subject I need to pass to get on to the SCS. So naturally I’m going to find it tough, which I don’t mind, but how much longer can CIMA get away with putting their name to official publisher resources when the actual exam is miles away from

Our star letter writer wins a fantastic PQ memory stick! An old ’un writes…

If, according to CIMA, one only has to study 10 hours a week then I must start again. “Hectic social life”? What is that tutor dreaming of? I was lucky to get any social life – probably why accountants were thought of as boring. We had a lot to catch up on after qualifying. That also applied to other professional study. All successful athletes forego a social life to succeed. Yet their sacrifice is only for the short term. For a career, it is almost life-long so worth a bit of sacrifice. Name and address supplied

Poles apart

I recently read with interest the article on the PQ website on the recommended study hours to be successful in the CIMA OT exams. It was certainly an eye opener. I was particularly drawn to the point that to pass CIMA F3 (as I am a CIMA F3 tutor) a candidate would need to study for 135 hours for 12 weeks. I would not question the academic basis of this recommendation as I am not qualified to do so. However, I do have an alternative view. CIMA students generally work in commercial environments where their study time is constrained,

course CIMA F3 Simply Pass. My approach is simple. Explain all relevant aspects of the CIMA F3 syllabus via demonstrating how to answer 200 OT questions as published by the official CIMA publisher. There are 10 videos (20 questions per video) covering a total of eight hours of time. At the time of writing this letter this courses pass rate is 90%. I accept the fact that students may watch my course videos more than once and append with extra question practise. But the total study time will not be 135 hours. As I have stated, I totally respect the academic view put forward by CIMA. It is sound advice. My view is based on what I believe students can allocate to their studies when balancing with other commitments. Yes, we may have polar opposite views, but we both want the same objective – for students to pass. Sunil Bhandari, by email

P1 and P3 bore me

Sorted, thanks to

especially at those critical times like month end, the budget period, etc. For the CIMA F3 students I teach their study time is even more limited as they are likely to be in senior positions. However, they need to pass their exams to progress. Can these candidates

allocate 135 hours to study time? Ideally, they would like to but practically I doubt if this is feasible. I strongly believe you can clear the CIMA F3 exam with a shorter, more effective mode of study. To prove this I recently created a dedicated online video based

Regarding your front cover last month, I’d like to say well done ACCA. I am happy with the merger of P1 and P3. To be truthful I think these two exams (not the subjects) are quite boring in the way they are currently examined. I am sure the ACCA will bring some creativity and interesting ways to test the application of these two subjects in the new Strategic Business Leader case study. I am sure these changes will be good for the ACCA qualification and benefit future accountants. Name and address supplied The editor says: Our cover prompted some great comments on LinkedIn too – here they are: “I am studying PQ currently and it is nothing short of monotonous. Change could be good for future professionals.” “Really exciting developments in the ACCA qualification. I can’t wait to get started [on] the Strategic Business Leader paper.”

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

Published by PQ Publishing © PQ Publishing 2016

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PQ news

ROBERT BRUCE Why it’s time to collaborate

The work of the accountant still tends to be seen as technical, or at best, advisory. But in the world of financial reporting the cutting edge is now collaboration. The whole way that organisations communicate what they are doing to their shareholders and stakeholders is changing. If you look at the mainstream financials, the nonfinancial information, the measures of sustainability, and so on, then a wider and in many ways a truer picture is emerging. And what does this mean for accountants? It means they need to collaborate. Ever since Luca Pacioli created the principles of bookkeeping that still underpin business the financial models have held sway. Now, on a shrinking planet with depleting resources, other pressures are in play. But it is hard, when the financial structures have held sway for centuries, for the measuring of sustainability to seek an equal place in the reporting of the state of business. When the Climate Disclosure Standards Board won a main award in this year’s Finance for the Future Awards, this was what they emphasised. When asked the most important ingredient of their success they said collaboration. If you are going to align areas like sustainability and environmental measures with the figures-based mainstream annual reports then you have to get together, try and synchronise the language used to explain the state of an organisation or business, and, yes, collaborate to bring this about. n Robert Bruce is an award-winning writer on accountancy for The Times

Trainee unfairly sacked A Circuit Civil Court in Ireland has ruled that trainee accountant Peter Nowak was unfairly dismissed by PwC. Nowak began working as a trainee accountant with PwC in 2006 and was given an employment and a training contract, the latter of which expired in April 2010. A separate document outlined he must sit and pass three ICA exams by the autumn of 2009 or his employment would be terminated. Nowak got stuck on the second exam and failed it twice. PwC then said it would support him for one final attempt, but he failed it again and his employment was

terminated. Nowak appealed this decision but was unsuccessful. He then took his case to an Employment Appeals Tribunal before the Civil Court. The tribunal was told that the ICA in Ireland allowed students up to six attempts to pass the exams. It was ruled that Nowak’s employment did not expressly state that it could be terminated if he failed to pass an exam. The tribunal found the complainant had been unfairly dismissed, but refused to reinstate Nowak in his employment and instead awarded him compensation of €7,500, which was later increased to €34,000 in the Circuit

Civil Court. Judge Comerford said clearly worded contracts could have ensured that what was intended by employer was understood and accepted. Nowak is still trying to gain access to his exam paper, as he reportedly feels he passed the last exam he sat. The Irish institute has refused, stating it was not obliged to do so as the exam paper is not ‘personal data’. The Data Protection Commissioner has agreed with the institute. Nowak is challenging the decision and referred the case to the European courts. They will rule on whether an exam script constitutes ‘personal data’.

ICAEW CBE update Computer-based exams at the ACA Professional and Advanced levels will be implemented in stages across a two-year period, the ICAEW has confirmed. The Tax Compliance and Audit and Assurance exams will be the first to move to computer in March 2017, one year later than expected. To help ACA students become familiar with the new computerbased exam platform the following support and guidance will be available in November 2016:

• A series of short webinars that will focus on introducing computerbased exams, the ICAEW exam software and the exam experience from start to finish. • A computer-based exam guide providing detail on what to expect on the day of the exam, how to navigate through the software, key functionality within the software and frequently asked questions. • Practice platform. Look out for the next issue of PQ for more information.

CIMA has ‘overhauled’ its student welcome pack. The new welcome programme consists of three parts: a printed pack sent to all new student via direct mail, an online welcome tool and a six-

CIMA welcome pack update week rolling email campaign. The booklet includes the essential information to help PQs, including 10 top tips to help students power up their studies. As 60% of CIMA’s students are self-studiers, CIMA’s online welcome tool aims to provide

specific reference points for them. It believes the new information will help students make an informed choice for their study options. New students are also sent six emails over the first six weeks to try to gently move them to schedule their first exam.

Take a look The ACCA has released two specimen exams for the new Strategic Business Leader case study, which will be valid from September 2018. In one of the four-hour exams you are asked to become Hoi Lui, a management consultant leading a small team that has been commissioned to prepare a consultancy report to help a

company plan for the next three years. You can download the paper on the ACCA website. ACCA’s director of learning, Mary Bishop, also writes in this issue about the changes due to come in during 2017 and 2018 – see page 14.

closest exam centres to their preferred location with availability will appear. Students simply select their preferred exam centre and complete the booking as normal. Once the booking is complete and the payment processed students will receive an application summary. Students need to note that if an exam centre doesn’t appear it will be fully booked, so the ICAEW is saying be sure to book your exams early. Find out more at the ICAEW’s website:

The ILFM presented the Wilfred Owen Award to the student who achieved the highest mark in its exams. Janice Thompson was the recipient of the Full Associate award for marks of 73%, 98% and 74.5%

In brief CIMA resit offer PQ magazine has joined forces (again) with HTFT to offer two lucky readers the chance of winning a P1 resit package. The deadline is tight, so we need your name and email address by 18 November, to be entered into the prize draw. It’s a real chance to experience this innovative course, which includes an online mock exam. See page 33 for more. 8

Online booking for ICAEW ICAEW’s online exam application system for Professional and Advanced Level exams has been updated. ACA students can now enter the location where they want to sit their exams, and the five

PQ Magazine December 2016


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PQ news

PREM SIKKA Accounting standards have increased opacity In recent months, I have investigated the financial affairs of BHS, Swiss Rock and Bernard Matthews for the House of Commons Work and Pensions Committee. In each case, my investigations were hampered by a layer of opacity enacted by accounting standards. BHS had a complex corporate structure and its controllers extracted cash through a series of intragroup transactions which included sale and leaseback of properties, loans and other transactions. No cash flow statement was produced because the company took advantage of the exemption allowed by FRS 1. The cash flow statement produced by the ultimate controlling company was an amalgam of various subsidiaries and cash flows specific to BHS could not be adequately tracked. The same problem was also encountered in my report on Bernard Matthews. The same opacity was encountered in relation to related party transactions. Intragroup transactions between parent and subsidiary companies provide perfect cover for profit shifting and obscure any measures of solvency, liquidity and profits. Auditors could have exercised the ‘true and fair’ override and insisted that the above information be published, but did not. The Financial Reporting Council’s obsession with deregulation has reduced the usefulness of published accounts. Its faulty conceptual framework obstructs inquiries and needs to be revised. n Prem Sikka is professor of accountancy at the University of Essex

This September’s ACCA exam results are a vast improvement on the 2015 sitting. F5 had the lowest pass rate of the F papers at 39%, reflected in student feedback. Candidates said they found the F5 exam MCQs tough and felt they were more theoretical this time around. Three of the option papers this September had higher pass rates than September 2015. The P7

paper, however, still has the dubious honour of being the paper with the lowest pass rate, at 32%.

ACCA EXAM RESULTS SEPTEMBER 2016 Sep 16 39% F5 Performance Management F6 Taxation 47% F7 Financial Reporting 48% F8 Audit & Assurance 44% F9 Financial Management 47% P1 Professional Accountant 45% P2 Corporate Reporting 50% P3 Business Analysis 47% P4 Adv Financial Management 37% P5 Adv Performance Management 35% P6 Adv Taxation 35% P7 Adv Audit & Assurance 32%

Jun 16 41% 46% 47% 45% 46% 48% 46% 48% 40% 38% 35% 32%

Mar 15 39% 44% 51% 41% 41% 50% 47% 48% 38% 33% 44% 30%

More and more students seem to be opting to sit just one paper a sitting, with 91,210 students sitting 115,841 exams. This session also saw 4,191 PQs complete their final exams, taking a major step to membership of the ACCA. Director of Learning, Mary Bishop, said: “I am always delighted to be able to talk about such positive results from our exam sittings, and following our announcement of the upcoming innovations to the qualification last week, today’s good news is that much more satisfying to see.”

The Accountant – the movie This is an ‘all-guns-blazing’ movie, what we call at home a good Friday night romp. Star of the show is Ben Affleck in the guise of CPA Christian Woolf. Now Christian had a troubled childhood – why else would he become an accountant and a killer for hire? Early on we discover this CPA takes contract accounting very seriously. Well, the contract part, anyway. His clients are among the world’s scariest people on the planet – drug cartels, arms brokers and money launderers. He certainly won’t be taking time out to sit the ACCA’s new 20-hour ethics module. Don’t worry, there is a nice accountant, too, with Dana Cummings in the form of cost accountant Anna Kendrick. She is the first one to notice a ‘problem’ with the books at her company.

Baldwins joins up with Cogital Group Big 4 rival CogitalGroup has signed accountancy firm Baldwins to the group. Former Deloitte UK chief John Connolly explained that Baldwins 27 offices and 650 staff will join Blick Rothenberg and Visma BPO. The group now has 3,200 staff in the UK, Norway, Sweden, Denmark and Finland and combined revenue of £300m. Connolly said: “We strongly believe that there is a place in the market for a firm focused on entrepreneurial businesses and high net worth individuals, delivering a personal service while harnessing the value-enhancing role of technology.” 10

ACCA results hold steady

They then call in Woolfe to sort it out, and we know that means a lot of people have to die! OK, the plots pretty predictable and we got the twist early on, but

Deloitte combines businesses Deloitte has announced that its Belgian, Danish, Finnish, Icelandic, Norwegian and Swedish member firms will combine with the UK and Swiss firm to create Deloitte North West Europe. Deloitte has said that it will invest an additional €200m over the next three years in its capability across the region. Deloitte North West Europe will come into existence on 1 June 2017 and have 28,000 partners and people generating over €5bn in annual revenue (20% of all Deloitte revenue worldwide). NHS ‘has short-term culture’ A KPMG study suggests that the ‘shorttermism’ culture and lack of support in the

we didn’t guess everything and the 128 minutes flew past. PQ RATING *** Well worth a watch, but don’t bring your calculator!

NHS has lead to a small pool of talented leaders. It goes on to say that individual bias and perverse incentives stop the NHS collaborating more effectively. To get the NHS where it wants to be new payment models and investment in collaborative leadership skills are need now. Is tax transparency the answer? PwC has reportedly become the latest big outfit to raise concerns about the implications of inequality on economic growth. It has said that tax transparency could play a role in helping to shift the debate. PwC economist Barret Kupelian pointed out that in most Nordic countries the tax return of every citizen is publicly available. PQ Magazine December 2016

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PQ news

CARL LYGO Arguing like an accountant is no bad thing This month we learnt that “arguing like an accountant” is a pejorative phrase. If you missed it, this was a report in the Daily Telegraph about the Chancellor of the Exchequer, Philip Hammond. He was said by a ‘source’ close to the Cabinet Office to be “arguing like an accountant, seeing the risk of everything rather than pushing ahead with plans for Brexit”. This was apparently an insult and sources close to the Treasury were quick to rubbish the accusation, with the Prime Minister’s spokesperson saying that “Theresa May has full confidence in him”. The Chancellor does not list any of his prior qualifications as an accountant but as you may know the term ‘accountant’, unlike ‘solicitor’ or ‘barrister’ is not a protected title. As the row erupted the ICAEW was quick to tweet that being like an accountant was surely a reference to the “smouldering good looks” of Ben Affleck in the movie The Accountant, which coincidently became the biggest grossing movie in October (the director has not ruled out a sequel, The Accountant 2). Top marks to ICAEW for the quick and witty response. In a recent survey of accountants of US Big 4 firms the ‘top 10 positives’ for becoming an accountant included job security (number 1) and a clear future (2). It’s surely no bad thing to have somebody in the Chancellor’s role who is capable of arguing like an accountant, especially at this time of great uncertainty as we face Brexit. n Professor Carl Lygo is chief executive of BPP

You need to be neater!

ACCA F9 candidates should manage their own learning and not be reliant on a single textbook or revision course for all their knowledge, said the examiner in the September Examiner’s Report. The examiner also wants candidates to be more precise in presenting answers, in particular numerical questions in section C. Students need to show all their workings and they should be presented with the same neatness

of presentation as the main schedule of figures. Meanwhile, the F7 examining team said there could be two reasons why the September performance in section C was “a little disappointing”. Firstly, candidates are not giving themselves enough time to answer section C properly. Secondly, PQs might have been confused with the combination of interpretation and consolidation issues in Q32.

ICAEW professional results out

The ICAEW September professional results are now out and the institute says the pass rates are again ‘consistently high’. Business Strategy came out on top with a pass rate of 90.6%. The ICAEW also said ACA candidates excelled in Audit & Assurance (90.65%) and Tax Compliance (88.5%). In all, some 3,838 students sat at the September sitting, with a total of 7,399 papers attempted. As PQ magazine always points out, the highest pass rates are for students sitting three papers. Some 78.7% passed all three papers. An additional 13.2% of these PQs passed two and failed one paper. The pass rate for students sitting one paper was 72.3%. Deloitte students picked up three prizes and PwC two. September ICAEW professional results: Audit & Assurance 90.6%; Financial Accounting & Reporting 78.6%; Tax Compliance 88%; Business Planning: Banking 85.7%: Business Planning: Insurance 81.8%; Business Planning: Taxation 77.7%; Business Strategy 92.1%; Financial Management 78.2%

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However, the examiner felt the structure of the question should have allowed candidates to pick up the necessary marks. Both the P4 and P6 examiners noted that not all the questions were completed on their papers. Time management is a key complaint of students sitting these. • Read our three-page ACCA exam special starting on page 19. There will also be lots of additional stuff on the website, too.

New CIMA case study resources CIMA has published a new suite of resources for case study students in an effort to maintain the high case study pass rates. CIMA’s Jackie Durham told PQ that a student script is now available to view for the strategic, management and operational level. These are what a good pass script looks like and CIMA provides a detailed analysis of where the student did well and areas that could have been improved on. Another new resource is the ‘Roles and Responsibilities in the CIMA case study’ document. This takes an in-depth look at the ‘personas’ used in the cases, such as you the finance officer. Finally, CIMA has developed a series of self-check lists, which will help to indicate if students are case study ‘exam ready’. Feedback will show students the areas they may need to concentrate more on. • See page 31 for Durham’s article and where you can find the resources on CIMA’s website.

In brief ASN events The Accounting Student Network Facebook Group has declared it ‘Bookkeeping and Business ‘ month, so there are lots of events happening online. First up is the Bookeeping Quiz Night on 17 November at 7pm. Then on 21 November, again at 7pm, it is holding a double entry bookkeeping Q&A with awardwinning iCount tutor Caroline Warburton. A Q&A with Sage will 12

take place on 24 November, with a chance to win free full-licensed software. Check it out. Four sittings a year CIPFA has released the professional qualification exam dates for 2017. With four sittings a year, the old November exam date is no more! Instead, students will sit exams in early December, in the week commencing 4 December. The new March sitting will be available

from 6 March 2017. As students numbers were relatively small PQ understands that CIPFA will add the September 2016 sitters results into the November pass rates. Graduates overpaying loans Some 300,000 graduates have been given refunds from the Student Loans Company in the past five years after they were wrongly overcharged. In all, the SLC has handed back more than £225m since 2011. The average refund rose to £690 a person last

year. The extent of the overpayments was revealed in a Freedom of Information Act request submitted by the Labour Party. Revision banks available EWI has announced that a full suite of its revision question banks are now available to purchase for the 2016-2017 ACCA exams. The texts comprise of exam standard questions together with full answers. For full details go to and click on the ‘study materials’ bar. PQ Magazine December 2016

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PQ ACCA qualification

STRATEGIC CHANGES Mary Bishop explains changes to the qualification that are due to come into effect during 2017 and 2018


ince 2014, ACCA has been designing innovations to the ACCA qualification and on the 10 October we unveiled the next stage of that development. The new innovations come after considerable consultation and research, all to ensure the changes keep the ACCA qualification relevant and support all ACCA students towards rewarding careers. The latest developments to be announced are at the final level of the qualification, which we are calling Strategic Professional. It includes the introduction of an innovative case study, called Strategic Business Leader. This integrates technical knowledge, professional skills and ethics, ensuring students are prepared for the modern workplace. In the exam, which will be four hours long, students will be presented with a number of exhibits – a company report or a transcript from an interview – and will be asked to analyse, interpret and evaluate, and then communicate the impacts to stakeholders. Positive feedback Students will be assessed on both their technical knowledge and the way in which they prepare a professional response. As part of our preannouncement testing we asked recently qualified members to review the new exam and feedback was positive, with respondents saying that the exam focuses on the ‘how’ and not the ‘what’. A number of employers have also endorsed the exams at launch events around the world, saying these will prepare students for the roles they will play when they qualify. Employers, like ACCA, think this is really important. And another issue we believe is very important is being clear about the journey students and readers of PQ are on during this innovative time. We’ve always believed preparation is key, so already two specimen exams are available on ACCA’s website and students can see that the syllabus contains areas such as data analytics, mobile technologies, crowdfunding and other real-world topics relevant for finance professionals. Students will also see that the case study draws from the syllabus areas of the existing P1 and P3 exams, both of which will be withdrawn when the case study is introduced. Students who have passed P1 and P3 before September 2018 will receive a converted pass from the new Strategic Business Leader exam. If students have not passed both P1 and P3 by 14

September 2018 they must sit and pass the new Strategic Business Leader exam. It is also worth remembering that ACCA relaxed progression rules at the top level of the qualification – which will be called Strategic Professional – and students can take their Strategic Professional exams in any order and they should remember this in the run up to 2018. ACCA is already working with Approved Content Providers, who produce materials for students and teaching resources for tutors, and they are developing resources that reflect the changes to be available in October 2017, in advance of the changes. ACCA and the Approved Content Providers will also provide guidance on how students can demonstrate professional skills in the Strategic Business Leader, including examples of good and weak responses. Another innovation announced by ACCA includes the introduction of our new Ethics and Professional Skills Module, which will replace the current Professional Ethics module in October 2017. While the new module still has ethics at its heart, it will also focus on developing the complete range of professional skills employers told us they

need. This new module recognises that ethics does not operate as a standalone subject but is part of a broader skill set and so will build in broader communications, commercial, innovation, analysis and evaluation skills that drive career success. Due to the wider scope of the new Ethics and Professional Skills module, covering a wider range of skills, the module will take students around 20 hours to complete. ACCA recommends that students complete the Ethics and Professional Skills module before attempting the new case study, Strategic Business Leader, as the professional skills introduced through the new module will support students in their exam preparation of the case study. We believe it’s an exciting time to be an ACCA student. And as these innovations come down the line, we’ll be updating you in PQ and online. You’re on an exciting journey with us, and we’re all part of an innovative future that sets ACCA apart from the rest. PQ • Dr Mary Bishop is ACCA’s director of learning PQ Magazine December 2016

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PQ Awards 2017


Make your CV shine with a PQ short-listing. It’s time you entered accountancy’s best awards – the deadline is looming large!

T Daphne Sanya, then of The Training Place, was named Training Manager of the Year at this year’s PQ awards


ime stops for no one and we need your nominations for the PQ awards 2017. Our awards really are your chance to stand out from the crowd and make your CV a bit special. We have added ‘Apprentice of the Year’ to our other 17 categories, giving you even more chance of picking up a coveted PQ award. Our awards are all about you, or perhaps they could be a unique opportunity for you to nominate someone who never receives the praise they deserve. Our awards are totally independent, which means those used to winning awards don’t get an automatic prize with us – you will be judged on your merits.

So come on, get nominating and get your place booked at the Café de Paris. All we want is 250 words on why you think your nominee should win (and yes, it can be you). Please state clearly which category you are entering, and provide any supporting evidence separately. You can download the nomination form at by clicking the ‘pq awards’ bar. Alternately, just email us your entry to us directly. Once you have everything ready send it to, or you can post your form to: The Editor, PQ magazine, 4th Floor, Central House, 142 Central Street, London EC1V 8AR. Deadline for all nominations is Friday 16 December 2016. PQ



2015 winner: the finance department at JoJo Maman Bebe


Last year’s Accountancy Team of the Year was the Casual Dining Group. They had a revolutionary approach to recruitment within the finance department. The finance team at CDG are carefully selected from restaurants within the group. This allows waiters and managers to fulfil accounting roles, after gain experience ‘on the ground’.

2014 winner: the Armstrong Watson Payroll Bureau Team


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PQ Magazine December 2016

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PQ fashion

Elegance in an instant

PQ magazine met up with Junko Kemi, who is designing business clothes that all women would want to wear


ormer PwC consultant Junko Kemi always had a problem with the way women were expected to dress for business in Japan. She felt that there was little variation in the professional clothing available and believed what was on offer ‘minimised’ her femininity. “We were expected to wear tight, restricting suits, which just made us look just like our male colleagues,” she said. Rather than just conform to these expectations Kemi wanted to change things, and she was inspired to take a massive career jump and move into the heady world of fashion. Her fashion label Kay Me was born in 2011 in Ginza, Tokyo, and as they say the rest is history. She believes her designs are fashionable, comfortable and suitable for travel – the perfect outfits for the modern time-poor businesswoman. Kemi stressed: “Women in business need to create their own style, wearing clothes they feel comfortable in.” Kemi admits she does have a connection to fashion – her grandparents owned a kimono shop. These ancient designs inspire many of Kay Me’s original prints today. She admits one of the bains of her life at PwC was getting all her suits drycleaned every couple of weeks. So her clothes are designed to be machine washable at home, iron-free and wrinkle18

proof. Her dresses are also designed to make your morning set-up quick and stress-free. Kemi has patented her new washable silk design, and recently won the Development Bank of Japan Women’s Entrepreneur Centre Award. Kay Me also seems to be much more than a fashion brand. It currently offers English-for-business language classes for women helping to empower her customers even more. She has decided to bring her business clothes to the UK, and after the success of her pop-up shop in London’s Piccadilly last year now plans to have retail outlets

Kemi: ‘clothes made us look like male colleagues’

‘soonish’ in the UK. She told us that she is looking at London sites in the City and Canary Wharf. But if you can’t wait until then go to for more. At £300 a pop some of her dresses aren’t cheap, but they are undoubtedly beautiful – and unique. PQ

PQ Magazine December 2016

ACCA exam tips PQ

The December exams are almost upon us. Here are some tips to help you out!

suitable internal controls or description of tests and control. • Audit procedures: both substantive procedures and tests of control. F9 Section A (don’t neglect the following): • Financial objectives: ratio analysis, the concept of shareholder wealth. • Economic environment and financial institutions: financial intermediation, fiscal and monetary policies. • The efficient market hypothesis. Section B • Working capital management. • Valuations. • Risk management. Section C • Working capital management: receivables management and inventory management. • Investment appraisal: NPV with inflation and tax. • Business finance: evaluation of financing options (ratio analysis). • Cost of capital calculations and discussion.


F5 Section A and B • Expect the unexpected! • The promise is these questions will cover the whole syllabus. Section C • There is no official reading time now, but you need to plan your answers to section C before you start writing. • Make sure you make reference to the scenario in your answers. • Planning and operational variances. • Mix and yield variances. • Evaluation of the company performance: either as a whole, or on a divisional basis. F6 Section A • A wide range of topics, but you can expect a couple of OTs to be devoted to the administration of income tax and corporation tax. • Due dates for payment of income tax including payments on account. • Due dates for payment of corporation tax including installments for large companies. • Filing dates for the income tax and corporation tax returns. • Penalties and interest for late payments and returns. • VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flat-rate schemes. • Inheritance tax due on lifetime transfers both in the donor’s life and on death. • Statutory residence tests for individuals. • Identification of groups of companies and sole traders. • Trading loss reliefs for both companies and sole traders. Section B • Think section A topics with a longer secanrio! Section C • The two longest form questions will focus on income tax an corporation tax. They are likely to include: – employment benefits. – property income. – relief for pension contributions. – adjustments to profit to arrive at trading income for both companies and sole traders. In past sittings we have seen a number of questions in which you have to correct errors in computations included in the scenario. – Capital allowance computations. • 10 marker on VAT, inheritance tax or capital gains tax. F7 Section A PQ Magazine December 2016

• Consolidation and interpretation of financial statements. • Non-core areas: inflation, specialised entities. Section B • Two 20-mark questions, one covering interpretations and the other preparation of financial statements. • One question in the context of a single company and one in context of a group. • Both questions will cover the accounting items from other areas of the syllabus. • Short separate part, with a statement of changes in equity, statements of cash flows extract, earnings per share calculation or linked written topic. • Consolidated question could include subsidiary and associate, with adjustments, eg fair values deferred/contingent consideration, PUP on inventories/PPE, intragroup trading balances, goods/cash in transit. • Single entity question could be preparation of trial balance or restatement of given financial statements with the usual adjustments. Think depreciation, revaluation and current/deferred tax, plus a mix of adjustments on other areas, eg leases, substance over form issues, financial instruments, share issues, government grants, inventory valuation, revenue recognition or construction contracts. F8 • Audit planning. • Audit risk: identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk. • Internal audit. • Internal controls: identification and explanation of deficiencies in internal control and the recommendation of

P1 • Will aim to test all three main syllabus areas in section A. • Typically four written requirements. • Don’t forget the four professional marks. • The June 2015 exam tested content from the examiner’s technical articles on corporate social responsibility strategy and strategic CSR, so be familiar with any new articles. • Use of stakeholder, ethics and other CSR theories applied to scenarios. • Risk and governance syllabus content: board directors, remuneration and reporting. P2 Section A • Preparation statement of financial position and/or a group statement of profit of loss and other comprehensive income or statement of cash flows, which may include a foreign subsidiary, discounted activities, disposals and/or acquisitions. • Discursive requirements on linked accounting adjustment and social/ ethical/moral aspects of corporate reporting. Section B • Deferred tax. • Foreign currency transactions. • Financial instruments. • Pensions. • Share-based payments. • Non-current assets: recognition and/or impairment of tangible and intangible assets. • Borrowing costs. • The effect of accounting treatments on earnings per share or ratios. • Accounting standards: accounting policies and the framework, leases, grants, IFRS for SMEs, reorganisations, provisions, events after reporting period Continued on page 20 19

PQ ACCA exam tips Continued from page 19 and related parties. • Current developments: revision of conceptual framework, leasing, improvements to disclosures, adoption and consistent application of IFRSs, equity accounting, improvements of performance measurement, classification in profit or loss versus OCI (see exam team article), integrated reporting (exam team article), revenue recognition (exam team article). P4 Q1 • Project appraisal: domestic and overseas, cost of capital calculations. • Business valuations: cost of capital calculations. • Risk management: VaR, real options, hedging. Q2–4 • Risk management: currency or interest rate. • Business reorganisation. • Real options. • Ethics and general financing issues: dividend policy. • Behaviour finance: new from September 2016 and the examiner has written a recent article. P5 Q1 • Often require a significant level of data analysis using numerical techniques: KPIs, EVA. • Transfer pricing. • Ratios. • Analysis of quality related costs. • ABC. • Performance management frameworks: building blocks, performance pyramid or balanced scorecard. Q2-4 • Quality management. • Information reporting: CSFs, KPIs. • The application of strategic models: PEST, Porter’s 5 Forces, the value chain. • HR frameworks: reward and appraisal systems. • Risk management. • Environmental management accounting. • Read recent articles: big data, integrated reporting and performance management models (BCG and 5 Forces). P6 • Groups of companies: These tips should overseas aspects and only be used in conjunction losses. with proper study. We cannot • Unincorporated guarantee that these topics business: loss relief or will appear in the actual partnership. exam as we have not seen • CGT v IHT: availability the exam papers. Examiners of reliefs. are not predictable so it is • Overseas aspects: vital that all core syllabus income tax, CGT, IHT areas are revised fully. and corporation tax.



• Personal service company. • Share schemes. • Company purchase of own shares. • Enterprise investment schemes/venture capital trusts. • Change in accounting date. • Takeover. • VAT: partial exemption or land and buildings or overseas transactions. • Transfer of trade versus sale of subsidiary. • Disincorporation relief. • Pension contributions. • Patent box, research and development expenditure. P7 Section A • Planning, risk assessment, evidence gathering and practice management. • Expect financial statement extracts, which you will need to consider. • Non-audit engagement, with the prospective financial information or due diligence. • Specific question on audit completion or consolidated groups. Section B • Audit evidence and financial reporting issues. • Practice management: ethics and quality control. • Reporting: completion and communication. • Recent examiner’s articles: corporate governance and recent changes to the auditor’s report.

First Intuition.

P1 • 50-mark scenario question, to include ethics, governance and risk management. Also Tucker model on ethical issues and environmental reporting. • Optional questions to include directors’ remuneration approaches, evaluation of

risks and their mitigation, integrated reporting and rules versus principles approach to corporate governance. P2 • Q1: group question on disposals or step acquisitions. • Ethics. • Revenue recognition. • Provisions. • Deferred tax. • Share-based payments. • Pensions. P3 Section A • Performance hierarchy and benchmarking plus strategic choices. Section B • Ansoff. • Strategic alliances. • General/application controls of software system. • Corporate governance. • Ethics. • Raising finance. • Porter’s Diamond. P4 • International investment appraisal techniques focusing on risk management tools such as value at risk. • Foreign currency risk management. • Capital structure: traditional debt finance and Islamic finance – Sukuk bonds. • Financing strategy. P5 • Critique an existing performance management system and the performance hierarchy. • Quality as a critical success factor. • Risk and uncertainty. • Effective use of information systems. • Reward systems linked to performance measures. • Performance model (balanced scorecard, building block model or the performance pyramid). • Activity based principles. P6 • Commencement of trade (unincorporated) – basis periods and loss relief. • Share schemes (EMI, SIPs, employee shareholder). • Pensions. • Gains groups and consortia. • Research and development. • Transfer pricing and thin capitalisation. • VAT – option to tax, capital goods scheme and partial exemption EIS, SEIS and VCTs. P7 • Business or audit risks in a scenario. • Identifying ethical and other professional issues in a scenario. • Matters to be considered and audit evidence for a couple of core accounting issues. • Forensic auditing. • Insolvency issues (UK Stream). • Discussion on current issues. PQ • Thanks to our friends at BPP and First Intuition for this exam advice PQ Magazine December 2016

ACCA exams PQ

Straight from the HORSE’S MOUTH What the examiners thought of the September exams – and what students thought too

F5 Performance Management Students said: Some tough MCQs this time around. Students felt they were more theoretical. Several PQs were disappointed that there was no demand equation or ABC questions. Overall, candidates seemed to feel the September test was better than June’s, but then that would not have been hard! The examiner said: Section B contained 15 of the new-style OT cases. The scenarios are longer, with five questions per scenario. This means the questions are more likely to focus on one or two syllabus areas. The three main topics in section B were risk, budgeting and target costing. Students performed well in the risk and target costing questions. The budgeting questions were themed around flexing budgets, adjusting the original budget to actual activity level. The examiner stressed variance analysis is a key syllabus area, as is a knowledge of the basics of management accounting (covered in F2). F6 Taxation (UK) Students said: A weird paper, very different from the past papers, said one sitter. Another described it simply as “interesting”. Students seemed particularly unhappy with the MCQs, which one PQ said were “very very very tricky!” The examiner said: Q16-20 case covered IHT. The taxpayer had died having made a chargeable lifetime transfer within seven years of death. The nil rate band of the taxpayer’s deceased spouse was not fully used. Q21-25 looked at CGT. The taxpayer here was the controlling shareholder in an unquoted trading company, with both the taxpayer and the company making disposals of assets. Q26-30 covered VAT with the taxpayer commencing trading and registering for VAT. Q31 asked candidates to look at directors’ remuneration, tax and NIC. Q32 was the income tax question, looking at a taxpayer who was employed and became selfemployed. Q33 involved two unrelated companies and was the corporation tax question. The first company had ceased trading and the second had six months of trading. F7 Financial reporting Students said: It was a tough one for many. This PQ Magazine December 2016

exam was, according to one PQ, all about performance and ratios, with nothing on gearing. The big debate was about which was the harder, Q31 or Q32. Our feedback is definitely Q31. The examiner said: The examiner was happy with the performance in sections A and B, but section C was “a little disappointing”. The exam team believes this might be two-fold. Firstly, students are not giving sufficient time to section C. Secondly, they also believe students could have been thrown by the combination of interpretation and consolidation issues into one question (Q32). This is the first time this has happened, although the exam team believes the information given and the structure of the question should have allowed candidates to work a reasonable answer.

F8 Audit & Assurance Students said: The ACCA has been accused by September’s F8 sitters of getting its question numbers wrong! There appears to have been a bit of confusion over what students needed to write down in their exam booklets. Q16, Q17 and Q18 becoming Q1, Q2 and Q3 respectively. Some students felt that invigilators wasted valuable time explaining the changes and it was all very unprofessional. However, on one noticeboard a PQ felt if students were distracted by such a minor problem they were just using it as an excuse. He said: “If I got distracted that easy I would be distracted every time someone asked for extra paper or went to the bathroom.” He felt students need to learn to ‘zone out’. The examiner said: Candidates’ performance was mixed for Q16, which covered the areas of internal controls, documenting systems, fraud and audit procedures for revenue. Q17 looked at the area of audit evidence and going concern. Again, performance across this question was disappointing in September. Q18 covered audit planning, audit risks and responses and quality control. F9 Financial Management Students said: MCQs were generally OK, but some found them confusing and ambiguous. But that is the point! Students didn’t like the nominal interest rates and inflation rates questions. The examiner said: Candidates need to be more precise in presenting answers particularly to numerical questions in section C, says the examiner. All workings should be shown in this section and should be presented with the same neatness of presentation as the main schedule of figures. Some candidates are still trying to answer the question they think is there, rather than the one that actually is there! For example, when asked to critically discuss an issue it is important to do more than simply list the methods relevant to that issue. A discussion, which may include examining the positive and negative aspects of the method, is what is needed here. PQ

For the P1 to P7 papers visit our website – it’s all there. Go to the ACCA Study Zone 21

PQ international standards


Martin Jones examines IAS 37 on provisions, a standard that he thinks may finally have reached its sell-by date


he IFRS on provisions (IAS 37) is showing its age a little now. So the IASB is considering putting the standard back into the masher to see if a new improved standard can be attained. To this end, the IASB has been compiling criticism of the IFRS. But before we start slinging the mud, let us look at what IAS 37 has achieved. IAS 37 was issued in 1998 with an equivalent UK standard that had the same logic. Prior to the issue of the standard it was commonplace for entities to have big sloshy provisions slapping about on their balance sheets ready to release in a bad year. It was felt to be good accounting to hack down high profits in good years by deferring credits on the balance sheet. There was no attempt to represent these buckets as actual liabilities. They just sat there ready to be released to the p/l in the next bad year. This was profit smoothing and it was thought to be a good thing. But it was not. It lulled unsuspecting investors into thinking a volatile business was dull and safe. And investors who could not afford to lose their money lost their money as a result. The issue of IAS 37 stopped all that. Well, most of that! But it introduced its own problems particularly in the area of the criteria. The recognition criteria that outlawed the profit smoothing referred to above are as follows. I call it ‘spot the ROT’: Criteria Reliable estimate Obligation (legal or constructive) Transfer

Meaning there must be a reasonable guess available either because of law or what you have said probable outflow of benefit

The criteria are ok but there is substantial ambiguity. Reliable estimate This criteria is a little daft because although the standard says that there must be a reliable estimate of the outflow before the provision can be allowed the standard then goes on to clarify that essentially any guess is adequate. The standard says that only in the most extreme circumstances should this criteria be applied. Then the standard further clarifies that the circumstances for failing this criteria are so extreme that it is not even possible to give an example! What nonsense! This is a criteria that is not a criteria. The standard is trying to say that if there is an obligation then you must provide; no matter the uncertainties. But you can imagine that some entities might accidently on purpose misinterpret the requirement to avoid a provision. Obligation A legal obligation is easy enough to match to the word ‘obligation’. You have to do the thing because the law says so. But a constructive obligation is very tenuous. The idea is that if I tell my wife that I will pick up my son after school then I have to pick up my son after school. But the room for manoeuvre is enormous. Does a company really have to clean up environmental damage in an area where there is no environmental legislation just because it says it will? The standard says ‘yes’ but others say ‘no’. Does a company that promises a training course have to provide for that training course? The standard says ‘no’ but others say ‘yes’.


Transfer But probably the widest criticised feature is the probable outflow criteria. The standard advises that a provision is required if “more likely than not”. This implies that a 100% provision is required for a 51% chance outflow but a 0% provision is required for a 49% outflow. This on/off switch gives even more room for creative accounting. Contingency accounting The above also appears in IAS 37 and is roundly criticised. The accounting is messy but is essentially characterised as follows: Probable (>50%) Possible (<50%) Remote

Liability (outflow) Provide Disclose Ignore

Asset (inflow) Disclose Ignore Ignore

This results in the counter intuitive perversity that the two sides of one court case may end up with differing accounting; the defendant providing and the plaintiff disclosing. Costs Which brings us to costs. The classic confusion is court costs. Some provide for those on the grounds they are unavoidable even though they have not been incurred and others do not provide even after they have been incurred. Volume And volume makes a difference to the size of a provision. In a large population it is common to provide for the probability weighted average expected outflow. But this appears contradictory if each individual outflow is in fact highly unlikely. Conclusion All this shows the IASB will have plenty to talk about when they finally decide to reignite this development project. PQ • Martin Jones lectures at LSBF

PQ Magazine December 2016

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PQ exam preparation


Stuart Pedley-Smith outlines what you should be doing with your time on the final day before that big exam


ur hero Jack Bauer only had 24 hours to save Los Angeles from a major terrorist attack. What he managed to achieve in such a short period of time was impressive, and although he suffered pain and personal injury he maximised the time he had, and always saved the day. Of course, you will have had far longer to prepare for your exam. However, no matter when you started to study or the amount of preparation already complete, the final 24 hours will eventually arrive. But what should you do in these precious last few hours? During the day (9am–5pm): effective hours six If you have not already done so, and I would suggest this could have been completed about two to three days earlier, reduce your existing notes down to approximately 10 pages (20 maximum). You may have some professionally produced revision materials, but even these will contain too much information at this stage. You need to take ownership, the best notes will always be yours. This process of reduction is important; reflecting on what you have learned and discarding what you know means you will be left with what is personal to you and what needs to be memorised. In addition, as part of your preparation you should already have been practising past questions on the key examinable areas, under both exam and non-exam conditions. You may want to continue doing this during the day. Physical and mental preparation is also important. Drink lots of water, avoid tea, coffee, etc, as you will need to get a good night’s sleep. Exercise is an incredibly effective method of reducing tension and stress so you may want to build into your day time for a run or brisk walk. The night before (5pm–10.30pm): effective hours four The secret as to what you should do the night before the exam is to be realistic. You don’t have much time so won’t be able to cover everything. Try to get an overview of the subject and focus on what needs memorising. These are most likely to be standard formats, definitions, lists, formulas not given in the exam, etc. Memorising should include some rewriting of key terms/definitions, talking out loud, drawing pictures, rehearsing mnemonics, etc. Make sure you are organised for the following day. This includes putting to one 24

side your exam entry documents, calculator, gum, mints, etc. You don’t want to be thinking about these in the morning. And, of course, make sure you know exactly what time you need to leave to get to the exam with about one hour to spare. Sleep (10.30pm–6am): effective hours zero Getting sleep is important, so avoid reading your notes and then going straight to bed. Pack your notes away, put them ready for the morning, then physically go into another room if possible or even outside, maybe watch TV for 20 minutes, something trivial. You need to break your state of mind from studying, relaxation leads to sleep not stress. And, finally, keep a positive attitude. Think about what you know and are good at and not what you don’t know and are bad at. Keep telling yourself you have done everything possible, and if you follow these steps you will have. Thinking you know nothing and should have done more will not help at this stage. The morning before (6am–8am): effective hours half to one Set your alarm sufficiently early to give you another half-an-hour or even an hour of revision. You don’t need to get out of bed, just continue memorising your notes. This is now about little and often, short 10 minute intervals.

One hour before (8am–8.45am): effective time 15–30 minutes What you do after arriving at the exam centre is personal. Some will prefer to sit on their own reviewing the revision notes; don’t bother taking your course notes, you won’t need them. This is still very much about short-term memory. Others will prefer to talk, chatting about nothing, just to keep their mind off the exam. Both are fine. After the exam What you do afterwards is personal to you. Many sitters will go home, but some will want to talk through what was in the exam, looking perhaps for some confirmation they have not made a complete mess of it. Most importantly, if you have another exam go home, put your old revision notes to one side, forget everything and start on your next subject. What you do in the final 24 hours can make a significant difference to your exam result, but it only improves your chances – it is not a substitute for hard work and a well-structured period of study beforehand. Jack Bauer started every episode by saying: “I’m federal agent Jack Bauer, and today is the longest day of my life.” At the end of your day you may feel the same, but if you have made the most of your time in the last 24 hours you can be happy that you could have done no more. PQ • Stuart Pedley-Smith is head of learning at Kaplan Financial PQ Magazine December 2016

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PQ AAT exams



he financial statements of shareholders (they may not be limited company accounts happy, but they will not shut the are read by a wide variety company down), but you cannot of users. From business owners tell the bank you are not repaying looking to see how much money the the loan. company is making to employees There are a couple of definitions wondering how secure their of gearing, but I prefer long-term employment is, to suppliers debt over equity and long-term wondering if they should offer more debt. If a company has long term credit to the company. debt of £300,000 and equity of One of the tools available to £500,000, the gearing ratio of the assess the performance and company is 37.5%, (£300,000/ position of a company is ratio (£300,000 + £500,000). The analysis. It is vital for anyone higher the gearing ratio, the higher wanting to gain meaningful analysis the risk, and also the less likely that of the company that they know not a bank is likely to lend the just how to calculate the ratios but company more money in the also what the ratios show. future. One of the first things people will However, just like gross profit ask when looking at a company is and operating profit margin, you “is this company profitable?” Two of should not just focus on one ratio the key ratios to look at when in isolation. Another ratio that ascertaining profitability are the provides more information to users gross profit margin and operating about risk is interest cover. profit margin. Gross profit is the Operating profit is the profit you revenue figure less the cost directly have left after you have paid your attributable to making that sale, overheads to pay your interest. The usually materials, production and higher operating profit is compared labour. The gross profit margin is to the interest charge, the easier the gross profit divided by the the company can pay its interest Nick Craggs examines how ratio analysis works in and the safer the company is, as revenue figure, expressed as a percentage, so if a company has operating profit can fall further relation to limited company accounts revenue of £120,000, and gross before paying interest becomes an profit of £90,000, the gross profit margin is company is controlling its overhead costs, such issue. This is calculated as operating profit £75% (£120,000/£90,000). as administration. However, one of the key divided by interest, so if a company has This shows how much gross profit a company points of ratio analysis is that no ratio should be operating profit of £270,000 and an interest should expect to make per pound of revenue. taken in isolation. A company might have a high charge of £30,000, interest cover is nine The only thing that can affect the gross profit operating margin, but compared to its (£270,000/£30,000), which generally is quite a margin is if the sales price per unit changes, or competitors it might actually be worse at high interest cover. It could be the case that a the cost per unit changes. All things being controlling its overheads – but it just happens to company is highly geared, however, if it is very equal, the gross profit margin should stay the have a really high gross profit margin which profitable it might be able to easily pay its same at all levels of production. feeds directly down into operating profit. interest, so even if profits fell it should be able to However, in reality, as sales volume goes up, The other thing users of financial statements pay its interest. On the other hand a company the company is able to negotiate better trade will want to investigate is risk. Employees might may have low gearing, but if it has low operating discounts, so the material per unit costs less, want to know how secure their jobs are, or profits in comparison to the interest charge it therefore the gross margin improves. potential investors might want to know how safe might find that profits don’t have to fall much The operating profit margin is similar to the any potential investment will be. Two key before it starts to have difficulty to pay its gross profit margin, this shows how much measures of risk are gearing and interest cover. interest payments. operating profit you are getting as a percentage Gearing is a measure of how much of the Of course, there are many more ratios you of the sales figure, so this is operating profit business is financed by loan debt rather than should look at, and there are other non-financial divided by revenue. Operating profit is the gross share capital and retained earnings. Loan debt is factors you would take into account when profit after the deduction of the overhead costs. inherently more risky than share capital as you analysing a company. PQ So this is a good measure of how well a can choose not to pay a dividend to your • Nick Craggs is a tutor at First Intuition


PQ Magazine December 2016

ICAEW spotlight PQ

Here are some top tips on how to pass your ACA exam – courtesy of the ICAEW


hat type of learner are you? Are you a slow burner or a last-minute crammer? Some people feel more confident if as much information is fresh in their heads as possible, while others prefer steady revision with spaced out practise. Which suits you? Top tips Make sure you understand the information. You can’t just learn everything off by heart, you’ll need to demonstrate understanding. If you don’t understand something, think of who you can ask. Is it a manager, tutor, fellow student or even the student community? Structure your time, make a long-term and a short-term revision plan. Ask yourself what you need to know, and how long it’s going to take to learn it. Relax. The ACA is a marathon, not a sprint. Make sure you make time to carry on doing what you like, and try to have a life outside of work and exams. While you’re in the flow of revision, make sure to schedule in breaks. Giving yourself ten minutes to get up and walk around will help you refresh and process

Top revision tips

what you’ve learnt. Practise, practise, practise. The question bank will show you how you will be tested and is essential to your exam prep. If you get stuck on something, write it down or make a flashcard. When it comes to the exam make sure you manage your time wisely. You’ll need to answer all questions within a time limit - again, practise it!

Useful tools REVISION APPS • iMindMap (Android and iOS, free) Contains a built in sketch tool and the ability to record audio notes. Use these to create an interactive visualisation of your notes. • Exam Countdown (iOS, free) Use this to keep on track with what’s coming up. • Chegg Flashcards (iOS, free) Create your own flashcard sets and remind yourself of anything you find hard. Read through them whenever you have a spare moment. • ICAEW App (iOS, free) Keep an eye on exam dates and deadlines, choose upcoming modules to access relevant exam resources and track exam progress. For more ACA study resources, including exam webinars and articles, go to PQ Reproduced with the permission of ICAEW, this article was first published in Vital (October 2016). Vital is the quarterly magazine for ACA students. © ICAEW 2016.

Give your students the best chance Replicate complex accountancy question types to give your students the best practice for the final exam Specifically designed for accountancy and financial testing Automatic marking with custom feedback for each assignment, pointing the student to sections in your course to refresh knowledge in areas they have lost marks Free up tutor time to spend actually talking to the student or writing new material Track students’ progress through the course Auto event triggers based on progression to remind tutors to make contact, or direct to student, e.g. remind them to book final exam, haven’t seen you in a while, etc.. Host a wide range of content including Videos, Interactive, PDFs (secured) and more… API to plug into your CRM to enrol students and receive results

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world of tax PQ

‘Awareness’ key to success

Sheridan Matthew Gray gives some tips on passing the corporation tax module of the CTA Awareness Paper


here are no guaranteed questions on the corporation tax paper. However, a number of topics appear frequently, such as calculating a corporation tax liability, if and why expenses are allowable in a tax adjusted trading profit calculation and calculating the maximum capital allowances available. The good news is that many of these frequently examined areas are also needed if you are studying the Owner Managed Business Advisory paper, so you will benefit twice from being strong on these topics. Have an ‘Awareness’ of the whole syllabus: Although it is tempting just to focus on commonly examined areas, the whole syllabus can and at some point will be examined. Areas such as transfer pricing, controlled foreign companies and

companies with an investment business have been examined before and have surprised underprepared candidates. Although these more specialised topics may feel daunting, remember that this is an ‘Awareness’ exam and this is reflected in the level of detail needed for these topics. Review past exam questions to better understand the level of knowledge required. Use your legislation: You will not need to use your legislation as much as for the Advisory papers (and potentially other Awareness modules). However, some considered highlighting in certain areas before the exam will help. For example, previous exam questions for research and development have given different items of expenditure and required candidates to explain if the expenditure is qualifying expenditure or

not. CTA 2009, s.1052 would be very helpful if this was to be examined again. Equally, if a question asked for the deemed employment payment for a personal service company, ITEPA 2003, s.54 sets out the steps to the computation. Attempt past exams: The exact same question will not appear again. However, as every question set must be five marks (and therefore five minutes to complete in the exam) it is understandable that similar questions will appear again and again as there are only so many ways to examine an area. The more past exam questions you attempt during revision the more familiar you will be on how a topic could be examined. PQ • Sheridan Matthew Gray is a tutor with BPP Professional Education

Tax goes global Ever looked at the Advanced Diploma in International Taxation (ADIT)?


f you dream of working for an international company and want to improve both your tax knowledge and career prospects then the ADIT qualification might be the answer for you. Awarded by the Chartered Institute of Taxation, it is broadly equivalent to the institute’s CTA qualification, but with an international tax focus. There are currently 2,800 students, graduates and

international tax affiliates around the world. This is a truly global qualification, with students in 100 countries. In June 2016, for example, 572 students sat the exam in 43 countries, including the first ADIT sittings in Bosnia & Herzegovina, Hungry and Qatar. To achieve the ADIT qualification students must pass three exam papers at the twice-yearly exams (June and December). These exams can be sat either as handwritten exams or by using on-screen ADIT exam software on your own laptop. All students must complete Paper 1 (Principles of International

A QUICK LOOK AT... A company may make different payments, but are you clear as to how each is treated for corporation tax purposes? This is often a differentiator between candidates in exam questions, so here are five key tips: Trading deductions: You will be aware of many of the disallowable expenses for trading purposes. Look at the exam question to see if some of the expenses have not yet been deducted and whether there are extra ones such as a deduction in certain circumstances with regard to a proportion of a premium paid on the grant of a short lease. Specific expenses: Be clear whether an expense is a trading deduction or one that PQ Magazine December 2016

Top dogs: ADIT graduates and award winners pictured earlier this year Taxation) and any two of the available Paper 2 and/or Paper 3 options. There is also an option to write a thesis in place of one Paper 2 or Paper 3 exam, consisting of

between 15,000 and 20,000 words. For more information go to or email PQ

Treatment of payments for corporation tax purposes

should be deducted against specific income, e.g. property management fees and repairs for a rental property will be deductible against the rental income, not trading profits. Qualifying charitable donations (QCDs): These are deductible against total profits. Be careful of the interaction with loss relief. QCDs are deducted after current year and carry back loss relief, but before group relief is offset. Interest payable: Interest may be deductible as a trading expense, e.g. interest on a loan to purchase machinery used in the trade or to purchase trading premises. Alternatively, interest payable may be a debit on a non-trading loan relationship where the loan is used for non-

trading purposes e.g. to purchase an investment. The interest payable will then be set against interest receivable. Do not fall into the trap of deducting interest on a loan taken out to buy a rental property as a trading expense. Companies with investment business: Distinguish between expenses of management that relate to the whole business, such as general overheads, and those that should be allocated to specific sources of income. • Cath Hall is an AIA Achieve e-tutor. The AIA Achieve team is producing a series of ‘A Quick Look at….’ articles and more can be found on the AIA website: 29

PQ zero-based budgeting

Zero to hero Philip Dunn explains the concept of zero-based budgeting, a technique that attempts to blow fresh air through the entire budgeting process

TRADITIONAL Business Unit Manager


ero-based budgeting, or priority base budgeting is defined in CIMA terminology as “a method of budgeting whereby all activities are re-evaluated each time a budget is set. Discreet levels of each activity are valued and a combination chosen to match funds available.” A further definition is “an operating planning and budgeting process which requires each manager to justify the entire budget request in detail and shifts the burden of proof to each manager to justify why he/she should spend any money. This procedure requires all activities and operations be identified in decision packages which will be evaluated and ranked in order of importance by systematic analysis.” It is acknowledged that ZBB as a system of budgeting was used in the early 1960s by the US Department of Agriculture. It is also now widely used in the federal government departments in the US and in many large corporate businesses. ZBB as a planning and decision making technique reverses the process and procedure of the traditional budget setting model. Traditionally business unit managers simply justify increases over the previous year’s budget. It is often on extrapolation of last year’s budget by: • Incremental changes for an assumed rate of inflation. • Anticipating increases in wages and salaries. • Recognising new projects/programmes of activity. • Adding incremental business activity as a base for the budget. ZBB however makes no initial assumptions. The manager of each business unit compiles the budget by assessing each potential activity from scratch – the zero base. Every department or function is reviewed comprehensively and all expenditures are approved rather than the incremental effects of what has gone before. Managers should evaluate the value added benefit from activities by asking questions as: • Is the activity or function necessary? • Does the activity add value? • If the activity was not carried out, what would be the consequences? • What level of activity is required? • Is the activity performed efficiently? • Is it cost effective? The diagrams opposite compare and contrast the traditional v zero-base approach. ZBB technique requires that both decision units be identified and decision packages developed. Decision units are responsibility centres as expense centres, profit centres or investment centres. The manager of the decision unit justifies the budget proposal. Decision packages are developed by managers for their responsibility centre and includes issues as: • The function of the business unit. • Performance measure or measures for the unit. • Costs and benefits from the unit at various levels of activity and resource allocation. • Effects of not operating at those levels. The packages are evaluated and ranked using cost/benefit analysis technique. The zero-based budgeting process thus comprises three distinct stages: identify and define decision packages; evaluate and rank packages; and allocate resources. Decision packages: This is an activity within the organisation that results in costs and or revenues. A decision has to be made whether or not an activity should be carried out. The question to be addressed is whether or not the activity is worthwhile. Decision packages are compared and ranked in order of preference. Business unit managers prepare packages for the activities within their responsibility centre. Evaluate and rank packages: Each package is ranked in terms of priority


Incremental effects for current year

Last year’s budget

Current year’s budget

Senior management

ZERO BASE Business Unit Manager

Resources should be allocated and sanctioned to activities

Value added benefits will accrue

Alternative strategies evaluated

Current year’s budget

Senior Management on the basis of its value added benefit to the business unit. Allocation of resources: Resources in the budget are then allocated on the basis of the evaluation and ranking of the various options in the form of competing packages. The results of the evaluation guide senior management in prioritising resource allocation. Benefits of ZBB Although the technique is difficult to implement it is acknowledged having a number of value added benefits which include: • It can aid organisational change. • It focuses management attention to organisational objectives. • Managers are concerned with the future rather than the past. • Established priorities in relation to resource allocation and optimum use of funding. • Increases staff motivation through participative management and responsibility for decision making. • Organisational communication and co-ordination is improved. • Assists in identifying inefficient and obsolete activities within the organisation. • Compels planning and examines cost effective ways of improving activities. There are also some disadvantages to the technique which include: • Time-consuming in terms of management input compared to traditional method. • Often difficult to define decision units and decision packages. • Requires additional management training (at a cost). • There is often the temptation to focus on the short-term rather than the longer-term. • It takes time to show real value added benefits. Conclusion It can be said that Zero-Base Budgeting is a systematic logical approach to allocating limited resources where they will do the most good. PQ • Philip E Dunn is a Kaplan Financial freelance assessor and writer PQ Magazine December 2016

CIMA case study PQ


Want to pass your CIMA case study? Jackie Durham suggests some new ingredients to help you with your preparations



e all know Peter Stewart loves a good curry and has used that analogy in a previous PQ article. I’m more of a ‘Bake Off’ girl myself (I love cake!), but we both agree that there’s a very simple recipe for success in the CIMA exams – assemble your ingredients (resources), whip up your mixture (do your preparation), check you haven’t left anything out or forgotten to put the oven on (revision) and then put your creation in the oven (sit the exam). If it fails to rise, you need to review your preparation, work out what went wrong and put the baking powder in next time! To add to your ‘ingredients list’, the Learning team at CIMA have just published a new suite of resources for case study students at each of the three levels – Operational, Management/ Gateway and Strategic. These complement the existing range of resources available to case study students and should ensure that the already strong pass rates for case studies are maintained and, quite probably, improved. Students frequently ask what a ‘good’ answer looks like. Although we already have the examiner’s suggested answer, we felt that students would value an insight into an actual passing script. So our first new resource is a walk-through answer of just that – an actual script from each level in the February case study exams. These aren’t prize-wining scripts and certainly don’t represent the only way to secure a pass but they are good examples of what it takes to score well. Used in conjunction with other resources such as the Grade Descriptors for each level and the other resources discussed in this article, they will really help our students see what they need to

PQ Magazine December 2016

Be like her: 2016 Bake Off winner Candice Brown

• Jackie Durham is learning and development manager at CIMA

do to pass. The walk-through takes the reader through the strengths and limitations of the answer, pointing out where points have been well made as well as areas where more depth or application would have improved the response. Opportunities to integrate the answers are also demonstrated. The case study is essentially a virtual role play and we encourage students to think of it almost as a job interview. This is their opportunity to demonstrate their competence to work at a certain level, for example finance officer, within a realistic business scenario. To bring this element of the case studies to life, we have produced a document called ‘Roles and Responsibilities in the CIMA case study’ in which we look in depth at the ‘personas’ used in the cases. The personas and the roles they play are an essential element within the cases as they help students (and employers) see how they contribute to employability by

Find the resources for your case study on CIMAconnect: • operational-case-study-exam/resources • management-case-study-exam/resources • strategic-casestudy-exam/resources •

building competence across a range of essential business skills. They also showcase the innovative, employmentfocused approach which underpin al the 2015 assessments. To complete the suite of new resources we have a set of self-check lists that will give students confidence that they are ready to sit their case study exam and, if they aren't quite ready, will highlight the areas they need to focus their remaining study time on. There are four sections made up of a series of questions in which we ask students to reflect upon whether they have: • Understood the principles behind the case study (with links to the ‘Personas’ document above). • Learned enough. • Prepared enough. • Practised enough. When they have worked through these questions and really thought about their exam preparation they will either feel really positive that they have prepared to pass or will know where to focus their remaining study efforts in the run up to the exam. Great preparation and lots of practice has always been the best way to secure a pass, the assessments may have moved on but the recipe for success remains the same! PQ


PQ ACCA people

Tips from the top

ACCA prizewinner Reena Mehta-Jagatia offers her tips for exam success

World class: Reena with her winner’s certificate


n the ACCA June 2016 exams, Reena Mehta-Jagatia achieved the joint-highest mark worldwide for paper P2. Here are some of her top study tips… • Get into a routine right from day one of the course: It is easier to try to allocate a portion of time per day or week rather than let time slip away from you – then you have to cram just

Meet Rebecca Gilmour, a woman who took a different route to land the ACCA qualification


t the tender age of 21, Rebecca Gilmour has passed all her ACCA exams at the first time of asking. It has taken her just three years to pass all 14 papers, after she decided to tackle the ‘problem’ of becoming a qualified accountant in her own way. Gilmour had a place to study an accountancy degree at Newcastle University, which included a year out in industry. This would have given her nine exemptions, leaving just the ‘P’ papers to complete. But she worked out that this would mean studying for six years, and she would be left with a hefty student loan to pay off. Her mum, Tracy, is also an accountant and together they started to look at alternative, faster and possibly cheaper routes to achieving the same objectives. Gilmour decided the best way forward was to study ACCA full-time at Leeds BPP, along with the international students. She started studying in September 2013 and passed 12 papers, completing three papers at each June and December sitting. In September last year, Gilmour began full-time work at Capita, where she 32

before the exam window. I tend to create a detailed plan and schedule of my time into the exam window. On this plan I mark when my classes are, when my mocks are due, when I have days off work, etc – this allows me to see at a glance where I am and what I should be working on. My schedule, where possible, also sets out

which areas of the syllabus I am covering in class, so I can go back to certain topics if needed. All of the live classes I attend are recorded, allowing me to go back and re-visit the sessions I participated in – this helps me go back to specific topics. • Start exam standard questions from day one: I find you can only see if you have learnt something by testing yourself, and it is never too early to start testing yourself. Whether you use your exam kit or past papers I would recommend attempting (and marking) exam standard questions right from day one of your course. When you mark your own work it will show you which areas you need to then focus on. • Submit homework and extra questions: Building on point two, make use of your training provider and tutors – submit homework and extra questions for marking. • Get comprehensive feedback from your mocks: It is really important to get good feedback on your mock exams, as it allows you to see which are your strongest and weakest areas. This analysis should then allow you to build a mini revision programme where you go back to the areas of weakness. At HTFT we get three mock exams all marked and annotated, along with recorded debriefs that we can rewatch over and over again. • Prepare revision cards from day one: As you go through your tuition phase start building your revision cards. Your revision cards can cover key definitions, equations and rules – ready for you to apply during the revision phase. PQ

Woman on a mission MORE ABOUT REBECCA What are you reading? ‘The Girl on a Train’ – a real ‘whodunnit’ that I can’t put down. Last CD/download? James Arthur – Say You Won’t Let Go. What’s you favourite TV show? The Great British Bake Off When was the last time you laughed out loud? When I saw the new Bridget Jones film Bridget Jones's Baby

completed her last two optional papers. She works in the firm’s fund accounting arm, where there are a lot of technical quirks, which she admits can be challenging. However, she loves the fast pace, dynamic environment.

On top of all this, Gilmour submitted her dissertation to Oxford Brookes University, so will get a BSc Honours degree in Applied Accounting to add to her ACCA qualification. Gilmour told us it was while at school she decided to opt for accountancy. And it was the ACCA’s international credentials that attracted her to the qualification, giving her the option to work or live abroad. Looking back over the exams she felt F1 was the easiest paper, with P4 deemed ‘the hardest’. F1 contained a lot of concepts already familiar to her due to the economics she had taken at ‘A’ level. P4’s calculations around derivatives was the real challenge. Her top tips for passing the ACCA exams is question practice. You can read the content over and over, but if you don’t learn how to apply it in different situations then the exams can be very challenging, she stressed. So Gilmour is now fully exam qualified, with a full year’s work experience under her belt, and this has all been achieved in three short years. It may an unusual at the moment, but as university fees climb this may become a more popular route to becoming a qualified accountant. PQ PQ Magazine December 2016

college visit PQ


Q magazine recently hopped onto a train at St Pancras to travel to one university that really plans to put accountancy on the East Midlands map – the University of Derby. We met up with the head of the division of accounting, Darren Sparkes, who showed us around the impressive Kedleston Road site. A lot of money has obviously been spent here. The accounting team is currently relatively small, but there are big plans for measured growth. The team members pride themselves on the support that they give to students alongside the personal touch with students known by name. The university wants to keep that feel and so as numbers grow it will be matched by a growth in staff numbers in order to maintain a healthy student to staff ratio. The college’s core accounting degree, a BA Hons in Accounting & Finance, gives exemptions to the first nine ACCA papers. It also enables students to gain certain exemptions from the AIA, CIMA and ICAEW qualifications. Derby also provide a more CIMAfocused programme, the Business Accounting & Finance degree, one of only a handful on offer in the country.

DERBY DAYS PQ took some time out to visit the accounting team at the University of Derby

A Gold ALP, Derby offers both revision courses and an innovative Summer Study School. The evening revision courses run into the December and June exams, so the next set start on 19 November and run through to 2 December. They are also very competitively priced. Lad will have more courses staring in January for the June 2017 exams. The summer school allows students the chance to gain their first ACCA professional level paper (P1), and was successfully launched this year. Students attend two three-day blocks, and the school has been so well received Lad is thinking of adding P2 to its offering. The 100% pass rate has helped here!


An ACCA Gold ALP ACCA courses are also on offer at the uni. The man in charge of these will be a well-known name to many, Nagin Lad. He assists ACCA with its overseas courses (he’s been doing it for 15 years in Jamaica). Lad also undertakes teacher training for the association around the world.

The future of accountancy: Derby students chat with PQ editor Graham Hambly

It is hardly surprising then that students from as far afield as Luton and London have begun attending classes at Derby. It has superb rail connections – it is just as quick to get to Derby as it is to get to Birmingham from London. Derby’s expertise in accounting means that it works with institutions in Malaysia, Singapore and Greece. It provides study material, assignments and support to universities there. At the moment the University of Derby might be a well-kept secret, but this is all set to change. PQ

FIVE THINGS ABOUT DERBY… 1) Derby University contributes £270m to the economy each year 2) Derby is the home of Rolls-Royce 3) Lara Croft was created in Derby by The Core Design Company 4) Derby University has invested £150m in its facilities in the past 10 years 5) It has the world’s most secure car park – Bold Lane Car Park

HTFT CIMA P1 Resit offer – back by popular demand! HTFT Partnership have developed a £99 CIMA P1 Resit package for individuals who have already sat the exam, and are giving away TWO free places for PQ magazine readers – for the second time. The HTFT CIMA P1 Resit course will help you identify the areas to work on and provide a comprehensive package of exam focused questions. You will be asked to sit an online mock exam, and then spend time with P1 tutor Kate Williams working through the mock, focusing on the questions where additional support may be required. The session is recorded so you can watch it back again, and following it you will be provided with two further online mock exams to work through. To enter the prize for the TWO free places email at, heading up your email ‘P1 Resit’. The deadline for entries is 18 November so be quick! PQ Magazine December 2016


PQ careers

Karen Young explains how PQs can assess whether an employer is the right fit for them


mployers know that a good personality fit can make or break an employee’s career with a company, which is why they place a strong emphasis on candidate fit as well as experience and skill when hiring. It is crucial that you do the same when applying to your next role. So how can you tell if an organisation is the right fit for your personality and working style? The best way to assess whether an employer is the right fit for you is through the interview process. Know your likes and dislikes Before the interview think about the type of working environment that you excel in. Reflect on the type of culture and manager that bring out your best work. For example, you might prefer a traditional business environment that is process-driven and methodical or a fast-paced team where you are encouraged to show initiative. One isn’t better than the other, it’s a case of what is right for you. Ask the right questions Start by asking the interviewer to describe the workplace culture and be ready to ask a follow up question on any aspects of their answer that capture your attention. You should also ask the


You’ll fit right in you as a clock-watcher, but you may have a very good reason for needing to know if a culture of late nights is the norm. Visit the office Once you have been offered the job ask to visit the office where you will be working, if you haven’t already. This is a crucial way of finding out whether the company is the right fit for you that very few PQs take advantage of. It is common for interviews to take place in a different office than where you will be working. Try to chat to people in the office and get a feel for the environment: is it chatty and sociable, or quiet and industrious? You’ll soon know whether you will be comfortable working there or not. same question of your recruiter as they will be able to give you a more objective opinion, knowing both you and the hiring manager. Another good question is how the company recognises success. If the interviewer is stumped by this question it could be a red flag for a culture that lacks reward and recognition, and will take a more self-motivated attitude. There are some questions best directed to your recruiter, however, at least at the early stages of your application. For example, asking an employer about working hours could paint

Trust your instincts Once you have asked all of your questions and considered key factors like work-life balance it is up to you and your gut instinct. If you feel comfortable and enjoy talking to the interviewer that is a good sign that you will be a good fit. Feeling instinctively that you have a good rapport with your future employer is sometimes the best indicator that you will fit right in. For more information and job opportunities for PQs visit PQ • Karen Young, Director, Hays Accountancy and Finance

PQ Magazine December 2016

careers PQ

social media ROUND-UP PQ magazine went into social media overdrive as we pushed out the ACCA exam results on 17 October and the news about the ACCA’s new Strategic professional level case study. Some students still seem to be shocked when they see the actual pass rates! The F5 September one was just 39% and Rimma Lobrekte said: “I am sitting F5 in December… by looking at the pass rate I am already scared!!” But as Alana Fraser said: “Don’t be too worried. Just remember they are global rates and they take into consideration people that don’t even turn up!” In our eagerness to get the news out we managed a bit of a typo in one of our tweets. As Marta Korzybska said, if the changes come in in September 2918, as we said, she would be dead. Well, we will all be dead, and of course the case study comes in September 2018. Most of the comments were positive, and as one PQ said the merging of P1 and P3 into a case study “will benefit the future accountants of the world”. We see Accounting Student Network, who we featured in the magazine, recently celebrated its first birthday – congratulations. Its Facebook page has nigh on 3,000 members now and it is runnning some great events this month. There is a Bookkeeping Quiz night on 17 November, and PQ has donated some prizes for that. There is also a Sage Q&A on 24 November at 6pm. And did you know that there is an AI newsletter? It retweeted one of our recent tweets: “The UK government needs a robot strategy, so it can deal properly with the impact of artificial intelligence will have on society, say MPs.”

Life at Perrys Craig Harman, 27, is a partner at the Tunbridge Wells-based company, where he has been for nine years. Craig is ACCA and CTA qualified, and has the SWAT Certificate in Probate and Estate Administration. He is Perrys’ second youngest ever partner. What time does your alarm go off on a work day? 5.45am. What’s the first thing you do when you get to your desk? Switch on the computer, then head for the kettle. What’s on your desk? Far too much paperwork! What’s the best thing about where you work? I think the opportunities for progression. The firm provides a great level of support. Where’s your favourite place for lunch? A local bakery is probably my favourite. What (or who) can you see when you sit at your desk? The main road leading into the town centre, so a vast array of interesting characters and the odd bit of road rage. Which websites are your favourites and why? BBC Sport. I’m not sure how I would keep up-to-date with the absurd

PQ Magazine December 2016

home with you? Rarely, as I think a work/personal life balance is important, but I do have access to my work emails and will check these on an evening/weekend. What is your favourite TV show? Game of Thrones. I dismissed it when it was first released but I am now hooked. Summer or winter? Summer. Pub or club? Pub. Who is your hero? As a Manchester United fan, I would have to say Sir Alex Ferguson. If you had a time machine, where would you go? Back to 30 July 1966, to Wembley Stadium. If you hadn’t chosen accountancy, where might you be right now? I like to think I’m quite creative (others may disagree) so I think a career in advertising or design.

economies in terms of the opportunities available to young people, says a new PwC report. Britain now ranks 21st out of 35 OECD countries for its performance in getting 15 to 24 year olds into employment, education or training. That is up one place on last year. Germany, Austria and Switzerland led the PwC ranking. PwC claimed the UK could increase GDP by £45bn if it matched Germany’s record on youth employment.

Blame the women! Women CEOs are more likely to be blamed than their male colleagues when the businesses they run are plunged into crisis, according to new research. The Rockefeller Foundation found that 80% of news reports about female bosses facing corporate ‘problems’ suggested they were to blame, compared to just 31% of those about male corporate chiefs in a similar situation.

In brief Put workers on boards Rolls-Royce CEO Warren East has backed Theresa May’s plan to put workers on to company boards. He said that the “Victorian days of managers and workers are gone”. East felt the proposal could also create an extra channel for communicating with the workforce. UK is lagging behind The UK is lagging behind most of the globe’s major

The PQ Book Club: books you should read Instant memory training for success: Practical techniques for a sharper mind by Chester Santos (Capstone, £10.99)

We can’t complain that we lead a dull life here at PQ. In one recent week PQ magazine tweeted out from the premier of ‘The Accountant’ and from the FRC’s Open meeting. I will leave it to you to decide what was the more interesting evening. You might be surprised!

football rumours without the transfer gossip column. Which websites do you use for work? HMRC’s, either looking at client-specific details or various tax matters. How many hours a week do you spend in meetings? This varies massively – summer tends to be quieter and I try to avoid too many meetings in January. What time do you leave the office? I’m usually in the office by 6.30am so I try to get away by 5pm. How do you relax? I play football and I’ve recently taken up golf after an eight-year break. What’s your favourite tipple? I’m not a huge drinker but I would have to say cider. How often do you take work

PQ’s only criticism of this book is the bold claim it makes on the back cover, that you’ll “never forget anything again”! Some claim. But it’s a minor quibble, as this book really does work. I know because I did a number of exercises set out in the book and they really did work. Author Chester Santos knows what he is talking about and has the credentials to prove it, as he describes in his introduction. A winner of the USA Memory Championships,

he has memorized an entire shuffled pack of cards in two minutes; a computer generated sequence of 100 numbers, reciting the sequence both forwards and backwards; and the name of 200 audience members having heard their names only once. However, Santos emphasises that “there is nothing different or special about my brain… the superpower memory that I’ve developed is the result of training and practice”. So there’s a challenge for you – but what’s the point, other than being able to remember where the car keys are? Well, having a sharp memory

can certainly improve your career prospects. As Santos explains, having an instant recall of detailed facts and figures is sure to impress a client. And being able to remember the details of clients or contacts you have only met once (not only their name other details about them) is sure to impress not only them but your boss, too. PQ rating 5/5 Buy this book and leave the sticky notes behind 35

investing in people Management Accountant

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Pharmaceutical, Surrey

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• Part of a 12 strong finance team responsible for overseeing management accounts. • Business partnering with key stakeholders and monitoring budgets. • Production of monthly management accounts. • Analysing variances and writing supporting commentary. • Monthly forecasting in liaison with business departments. • Utilisation of advanced Excel and confident communication skills.

• Responsible for preparing monthly management accounts and board pack. • Preparing analysis of new business movement and trends. • Developing and managing FP&A modelling processes. • Maintaining consolidated monthly rolling forecast. • General management accounting duties at month, quarter and year end. • Experience of business analysis and partnering and Excel modelling.

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YOUR JOURNEY TO A FULFULLING CAREER Now that your latest professional accountancy exams may be over, itâ&#x20AC;&#x2122;s a good time to think about the next stage of your career journey. Whatever your desired career path, we can help find the best job for you to succeed and offer expert advice along the way. Our business is built on long-standing relationships with people from helping you find your first part-qualified job through to settling in as a CFO. For more information on the range of opportunities we have available, visit us online. Alternatively, join the conversation about career development for accountancy professionals across the UK. Hays Accountancy & Finance UK Hays Future of Finance Forum - UK

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PQ popped along to Leicester Square for the premier of The Accountant, the movie. CIMA’s Peter Stewart tagged along – he even brought CIMA’s new welcome booklet for Ben Affleck to sign. He was persistent and after talking to some lawyers and spending time pretending to be a bouncer he finally got what he had come for. Our favourite picture of the night, however, was Peter’s attempt to upstage the movie star with his ‘lightsaber’. Definitely more Star Wars than The Accountant!


ACCOUNTANT Chancellor Philip Hammond was recently accused in the Daily Telegraph of “arguing like an accountant, seeing the risk in everything” rather than pushing ahead with plans for Brexit. As writer Paul Bernal commented: “I don’t want a chancellor who ‘thinks like an accountant’, I want one who thinks like a LION TAMER.”

NOW THAT IS WHOPPER Accountancy bodies take note – little white lies lead to bigger ones as the brain gets used to fibbing! It appears the moral policeman in our brains, called the amygdala, adjusts if we continually lie. Scientists said the principle could also help to explain how violence can escalate.


A CRYSTAL MAZE EXPERIENCE TRUMP NO GENIUS Kaplan now has a very funky tuition centre in London’s Holloway Road, right next to Highbury tube. But it has long since moved from 10-14 White Lion Street, just up the road in Angel. These premises are now being put to a very different use – they have been taken over by the Crystal Maze Experience. Yes, the 1990s TV show has become the ultimate team challenge in which you and your friends face tests of your mental and physical ability across four adventure ‘time zones’.


If you want to ‘train your brain’ then click off those apps and learn a musical instrument. Research shows that music training has a dramatic impact on your brain’s structure, enhancing your memory, spatial reasoning and language skills. The University of Westminster’s Catherine Loveday (she’s also a neuro-psychologist) explained: “Music does something unique. It simulates the brain in a very powerful way, because of our emotional connection with it.”


Donald Trump’s former accountant was quick to dispute the orange one’s boasts about how he ‘brilliantly’ used the US tax code to pay as little as possible. Trump said: “I understand the tax laws better than almost anyone, which is why I am the one who can fix them.” Jack Mitnick handled Trump’s taxes in the 1990s and he said: “As far as I know, and this goes through 1996, [Trump] didn’t understand the code, nor would he have had the time or patience to learn.”



We are giving you the chance to win a whole stack of books that have been reviewed in both PQ magazine and our sister publication NQ magazine. So you can win ‘The End of Accounting’ , ‘Stretch – How to futureproof yourself for tomorrow’s workplace’, ‘The Little Black Book of Change’, ‘Brainhack – tips and tricks to unleash your brain’s full potential’, ‘Body Language’, and, last and by no means least, ‘Learning Leadership”. That’s over £100 worth of reading right there. All you need to do to be in with a chance of being sent this great book collection is to send your name and address to – head up your email ‘Bumper pack’.


We have a four-book treat for all you Suduko fans out there – it will provide you with hours of entertainment. The four books have a range of puzzles from easy right the way through to the fiendish. So they suit both beginners and the hardened enthusiast. The four books are worth £28, but are free to you if you win our prize draw! If you want this great giveway then just email with ‘Sudoku’ in the header. Remember that we need a full name and address so the postie can get the prize to you if you win.

The Man Booker shortlist Memory stick We are giving one lucky reader the chance to win all six books shortlisted for the Man Booker Prize 2016. Among them are ‘His Bloody Project’ and the winner, ‘The Sellout’. So you could be reading a darkly comic psychological thriller about obsession or a satire of US racial politics. This prize is worth more than £85. To enter this giveaway draw send your name and address to Head up your email Man Booker and we, as they say, will do the rest.

We have run out of ‘I love tax’ t-shirts and ‘I love PQ’ mugs. But we have the wonderful PQ magazine memory stick as a replacement. Our stick has 2GB of memory and each one comes with a lanyard so you will never lose it! We are giving away not one but 10 sticks this month – hey, it’s our Christmas issue! To be in with a chance of being sent this great giveaway send your name and address to Head up your email ‘PQ memory stick’.

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 9 December. The main draw will take place on Friday 16 December 2016.


PQ Magazine December 2016

MAKING LIFE SIMPLE Sorted, thanks to


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PQ magazine, December 2016  

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

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