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PQ magazine February 2020 /


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TIME FOR SEPARATE AUDIT PROFESSION If UK business wants to improve the effectiveness and quality of audit then it has to escape the clutches of the accountancy profession! That is just one of the bold proposals to come out of Sir Donald Brydon’s review, published just before the end of 2019. Sir Donald revealed it was “a startling discovery to me that there was not an audit profession as a standalone entity”. And he felt that auditing is too important to be left as an adjunction of another profession. Sir Donald explained: “Audit should be an independent profession in its own right, with its own governing principles, qualifications and standards.” Currently, he felt audit is just an extension of the accountancy profession, whose ethics and mindset it largely adopts. Sir Donald pointed out: “The qualities you need to be an auditor are quite different to those that you need to be an accountant.” He now wants the Audit, Reporting & Governance Authority (ARGA), which will replace the FRC, to help facilitate the establishment of an independent auditing profession based on a new core set of principles. That would eventually mean that anyone who signs off on the financial health of a UK company would have to sit a new audit qualification, probably after their accountancy qualification. The new profession would need to encompass all ‘corporate auditors’. The report pointed out on top of the statutory auditors of the financial statements, it should include auditors of other corporate information such as cyber security and environmental measures. While some of these auditors will come from traditional audit firm, Sir Donald envisages the creation of new specialist audit entities.

Auditor behaviours would also need refocusing. For example, the report wants to add to the concept of professional scepticism the need for professional suspicion. Sir Donald is also proposing to add additional principles around openness, independence, challenge and the public interest. The big question now is if the government adopts these proposals how a new look independent audit profession will affect the accountancy profession’s qualifications, and even where auditing fits into the syllabuses. With its own qualifications and enter routes a

new-look auditing profession could have its own professional body and rules, totally separate from the rest of the accountancy profession. ICAEW CEO Michael Izza acknowledged that the proposals could totally change the way the accountancy profession operates within the UK business landscape. However, he also felt that reforms were needed to restore public trust in audit. That said, Izza wants any changes to be proportionate and practical. • To read our take on Sir Donald Brydon’s ‘The Independent Review into the Quality and Effectiveness of Audit’ report turn to page 18.

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CONTENTS News 06ACCA initiative New

27International standards We put the spotlight on IFRS 9

mental wellbeing resources unveiled 08Apprenticeships rap Firms criticised for dubious practices 09ICAEW on rise Institute now converts more students into members than CIMA 10ACCA exams Yet more problems reported at exam halls across the country; plus Big 4 predictions for the year ahead 12Tech news Our digital update Features, etc 04Mind your Ps&Qs In praise of Brydon; why ACCA fee rises are unfair on students; and the best of PQ’s social media 15A better world Opportunities are there for those seeking adventure and job satisfaction 17ICAEW spotlight Institute provides a stack of resources to help you; plus top study tips 18Audit report Our take on the Brydon review of UK auditing 20CIMA spotlight Automation in 2020 – and beyond 21The Troubleshooter All you’ll ever need to know about the behavioural aspects of budgetary control 22ACCA report It’s good news for the accountants of tomorrow 24Decade in review Highlights from the past 10 years of PQ

Your future in accountancy

February 2020 28Your career How social media can help – and hinder – your search for a new role

29Careers Life at Ideal Schools; ICB conference report; and our book club review

30Fun stuff – and our giveaways The columnists Robert Bruce A fitting tribute to a banking legend 6 Prem Sikka Brydon review is a missed opportunity for change 8 Zoe Robinson We all need to guard against fake news 10 Mike Day The changing nature of the workplace revealed 12 Subscribe to PQ magazine It’s FREE – see page 26 or go to FEBRUARY 2020 ISSUE Total Distribution

25,201 Publisher’s statement: We send both a paper and digital issue to a controlled database each month. The above figure is the combined total of issues sent out this month. Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)

What are you doing on Saturday 8 February? If you fancy a trip into London then you could do worse than coming to our conference, ‘Your Future in Accountancy – making an informed choice’. The head of ACCA UK, Claire Bennison, will be opening proceedings, and she will be revealing what accountancy careers in the 2020s will look like. Hay Accountancy and Finance will be there to discuss salaries and the state of the current market. Add to that Professor Richard Murphy, talking about how accountancy needs to go green, and we have a great morning planned. It all wraps up at 2pm, so there will be lots of time after to hit the sales! You can book your place at Entry for the 2020 PQ Magazine Awards is now closed. Good luck to all those who have been nominated – we will be publishing the shortlist in the next issue. In the meantime, clear your diary for Wednesday 26 February. The Café de Paris is booked for what are the best accountancy awards around, by far. We are also proud to announce a new awards sponsor – Osborne Training. Osborne have accredited study centres in London’s Canary Wharf, Birmingham, Ilford and Watford. We do like a giveaway in PQ magazine. Maybe it’s because I loved those Shoot league tables so much. For those too young to remember, they were a thin cardboard sheet on which was printed slitted league tables for all the divisions of the Football League. Each week you could change the table to reflect reality by slotting in each team’s name. They were simpler days. And, yes I have moved with the times and am in a Fantasy Football League – the problem is my son won it last year! For PQ readers it means we are always on the look out for great giveaways. This month we have joined forces with Sonar Education to give 10 lucky ACCA PQs the chance to win a CBE skills course of their choice. You can also check out their advert on page 11. We are also giving away Chilly Bottles and great self-help books too. Graham Hambly, PQ magazine editor (

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HAVE YOUR SAY Well done, Sir Donald Well done Sir Donald Brydon – his latest report into audit has hit the nail on the head. The audit profession has been captured by the accountancy profession in the form of the Big 4 and the ICAEW, who have dragged their feet over making audit fit for purpose. I think they’ve forgotten exactly what an audit is supposed to be for. It is not meant to be there to help them take home big fat pay cheques. And don’t get me started on the lack of public interest! Over the years I have read your string of stories of ever-increasing fines dished out by the FRC for poor service. Nothing changed – I

think many firms just saw the fines as another cost of doing business. The Institute of Director’s Roger Barker says the report is ‘on the money’ to help address the

underlying issues that have undermined trust in audit. With the Kingman review and CMA report, surely there is enough traction to finally make changes for the good – the common good. Paul Smith, by email The editor says: We’ve had a good look at the 64 recommendations from Sir Donald – see our take on his report page 18 . On the BBC Radio 4 Today programme Sir Donald stressed he did not believe that auditors have lost their moral compass. He said: “It is not auditors that cause companies to go bankrupt. It’s the directors who are responsible for

Our star letter writer wins one of our fantastic ‘I love tax’ t-shirts! Fees hike is not fair I was very disappointed by the steep increase of ACCA student membership fees over the past few years. We’ve had: 2017: £95 2018: £97 2019: £105 2020: £112 So while 2018 was a reasonable 2.1% increase, we’ve seen 8.2% and 6.67% increases in the past two years – way beyond inflation. Maybe this is a topic for PQ magazine. You could compare the various accounting bodies and see how they’ve increased prices. Name and address supplied The editor says: We will be doing something on this next month.

I need

Bullying tactics Having qualified with the ACCA earlier this year – and before I unsubscribe to PQ magazine – I wanted to thank PQ readers for their contributions to ‘Have Your Say’. The discussion topics have been a great source of support, inspiration and guidance. I thought that, once qualified, I would be able to focus my energies on my career. However, the company I have worked for throughout my studies are attempting to force me out.

I wonder how many of your readers have been subjected to bullying, fabricated poor performance reviews and other underhand tactics from their employer, and how they have coped. How prevalent is this patterned behaviour in our

professional service companies? I have decided to stay put and stick it out rather than jump. I would love to receive responses to what I believe is a common, unspoken practice that accountancy firms use. Name and address supplied

social media ROUND-UP Sir Donald Brydon’s groundbreaking report into the audit profession was published just before Christmas. It is big news and could lead to a new separate audit qualification and body. Conrad White said on LinkedIn that with recent business failures it is clear there is an issue somewhere in the audit process. However, he’s not just sure the root is the qualification! He rightly wondered: “Are audit teams really challenging the reporting and stress testing the business as a going concern enough.” He agrees that the moral compass of auditors is not in question, but perhaps we need to revisit the framework for the appointment of auditors, and ensure enough time is given to the teams to review appropriately. We retweeted @TrainingLink’s retweet from #Throwback Thursday: “The Athenians developed a system for managing pay by chiselling payment details and financial records into stone. Imagine having to file those for +3 years!!” Premier Training was also tweeting some top tips for AAT distance learners. “#1 Introduce yourself to your tutor so you build a rapport from day one as they will be your first port of call when you need study support.” Meanwhile, there was a discussion on one of our favourite Facebook groups on just how much it costs to complete the ACCA qualification. The general consensus was anything between £6,000 and £12,000. Some students even provided their own personal spreadsheets to show what they had spent their money on. On another AAT group, one PQ went online to ask for help after failing MDCL. A fellow student revealed they had failed three times, but finally managed a pass with a score of 70%. “It does sink in, but it’s largely luck on the day.” Here’s to luck then.

PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: Website: | Editor/publisher: Graham Hambly | Associate editor: Adam Riches | Art editor: Tim Parker | Contributors: Robert Bruce, Prem Sikka, Zoe Robinson, Mike Day, Tony Kelly, Phil Gammon, Edward Netherton | Subscriptions: | 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 Ltd © PQ Publishing 2020


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ROBERT BRUCE A tribute to a banking legend

At the tail end of last year Paul Volcker, a banker, died. Instead of being excoriated he was praised to the skies. This is unusual. A pundit referred to him as “the greatest man I have ever known”, for example. What had he done? Much in the technical sense, but that wasn’t it. His distinctive characteristic was to think carefully and then stick to what he saw as the solution. And, at all times, remain a decent, humble person. Just over a year ago, suffering from the illness that would end his life at the age of 92, he published a memoir called ‘Keeping At It: The Quest for Sound Money and Good Government’. This told the story of how he had spent his life devoted to creating and ensuring stable prices, sound finance and good government. It was his dogged work as Chairman of the Federal Reserve Board, the US central banking system, which has ensured we live in an era of remarkably low inflation. When I was a student inflation hit 25% – unbelievable today. Volcker sorted that out. He took the flak, stood firm and came through. His memoir will shortly appear in paperback and he wrote a new introduction warning of the problems ahead. “Nihilistic forces are dismantling policies to protect our air, water and climate,” he said. “And they seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free press, the separation of powers, the belief in science, and the concept of truth itself.” He concluded with the exhortation to ‘keep at it’. An example to us all. Robert Bruce is an award-winning writer on accountancy for The Times

Wellbeing resources introduced by ACCA ACCA has launched a wellbeing resources area on its website for all its PQs. The opening student wellbeing page explains that ACCA knows maintaining positive mental wellbeing while studying can sometimes be challenging. It says it has created the online pages to provide easy access to all the relevant information students need, to help support their positive mental health throughout their ACCA journey. The move follows PQ magazine’s 2019 survey and campaign last summer, where we discovered 68%

Three of the ICAEW best Some 72% of ICAEW final level students who sat all three papers passed them all, according to the stats released at the end of 2019. Only those who sat ALCR and ALSM did better, with 80.7% of sitters passing both papers they sat. Pass rates for those sitting only one paper were more mixed. Just 56.7% of PQs sitting ALCR passed in November. In all, 4,915 students sat at the November 2019 session. Some 8,586 exams were attempted in total, with 3,572 trainees passing all the exams they took. That means the average number of papers sat per ICAEW student was 1.75. ICAEW NOVEMBER 2019 ADVANCED LEVEL OVERALL RESULTS: Strategic Business Management 85.2%; Corporate Reporting 82.8%; Case Study 76.3%

of respondents believed their accountancy body should be doing more to safeguard their wellbeing. The same survey found that the exam process had left 56% of PQs in tears. ACCA conducted its own

research late last year, and these new resources are the result. Help comes under headings including ‘mental health’, ‘lifestyle’ and ‘community support’. There are lots of great resources on the website, with videos and podcasts to help students cope with stress and anxiety, and problems with sleeping. ACCA has already run some face-to-face wellbeing events in Glasgow, which were well received. The association has also appointed Ross Anderson as its new wellbeing ambassador. Anderson (also known as the ‘Motivational Dude’) is someone with lived-experiences of mental health. For more check out: student/wellbeing.html


East Midlands East of England London North East England North West England Northern Ireland Scotland South East England South West Wales West Midlands Yorkshire/Humber

Large organisation £37,000 £40,000 SALARY CHECKER £45,000 £48,000 How much will you £50,000 £50,000 earn when you’ve £38,000 £40,000 qualified? Here’s – £42,000 the latest set of £34,000 £35,000 figures for NQ £37,000 £40,000 salaries, region by £50,000 £55,000 region. £43,000 £45,000 £35,000 £38,000 £40,000 £42,000 £38,000 £40,000 *Hays 2020 UK Salary & Recruitment Trends survey

New ethics code for ICAEW A new code of ethics for ICAEW PQs and members has come into force in January. The updated code includes additional discussion on conflicts of interest, breaches of the code, inducements, and material for professional accountants in business. There are also some detailed amendments to the auditors independence provisions of section 290. Finally, the ICAEW has added new sections on non-compliance with law and regulation (NOCLAR). NOCLAR, in essence, requires an accountant suspecting business-related illegal acts to consider whether it is likely to be inconsequential. If they are then it is an internal matter.

In brief New director needed CIPFA is looking for a new director of education and long-life learning. Chris Glennie (below), who was appointed in the summer after the sudden departure of Lindie Englelbretcht earlier in 2019, has now left the post. With the CIPFA syllabus in full flow a replacement is the top priority for 2020. 6

Cut out the gimmicks The UK’s biggest companies have been told to stop using slogans and other marketing gimmicks when setting out their purpose and corporate culture. In a new report, the FRC says while it found pockets of good reporting there was still much more to be done. It said: “Many companies are grappling with defining purpose and what an effect culture means, with too many substituting slogans or marketing lines for a clear purpose.”

Top exam tips The HTFT recently gave some great advice to students siting exams. Having confidence in the work you have done is key, but it said you should not revise for more than 45 minutes at a time. Try to split your revision, with five to 10-minute breaks every 45 minutes. Creating topic summaries and revision cards are also a good use of your time. You could then get family and friends to test you. Finally, some advice that is a bit more out there – it said some

people swear by Magnesium tablets to reduce stress. Quiz yourself, ACCAs The ACCA has created selfcheck tests for PQs getting ready for the Strategic Professional exams. You can assess your underlying technical knowledge, and at the end of the test ACCA recommends resources and ‘next steps’ to start effective prep for the exams. The Get Ready for SBR tests (Beta version) are available in the Student Learning Centre. PQ Magazine February 2020

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Accounting woe for RSM

PREM SIKKA Brydon is a missed opportunity

Sir Donald Brydon’s report, entitled ‘Quality and Effectiveness of Audit’, is a missed opportunity to reform the industry. Despite its title, the report says little about audit quality. For any market to work the producers need to be subjected to pressure points. Auditor liability is one such point and the report proposes no reforms. In the absence of a ‘duty of care’ to stakeholders and personal liabilities auditors have little economic incentives to deliver robust audit. The culture of accounting firms is a key ingredient in audit. It affects time budgets, composition of audit teams, professional scepticism, quest for fees, conflict of interests, rewards and much more. The effects of organisation culture were evident in the failures at BHS, where the audit partner spent just two hours on audit and 31 hours on consultancy. The audit team for all practical purposes was led by a person with only one-year postqualification experience and failed to perform basic audit tasks. Yet audit firm culture receives little attention in the report and there is hardly any proposal for arresting its corrosive impact. The report recommends auditing be an independent profession in its own right, rather than an adjunct to the accounting profession. It is hard to see how this per se would reduce auditors’ fee dependency on clients or free them from the influence of company directors on their appointment and pay. In the absence of fundamental reforms, audit failures will continue to make headlines. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

Moving on up: more than 20 young chartered accountants from the Liverpool City region celebrated becoming qualified at a special ceremony hosted by the ICAEW and its President Fiona Wilkinson

PSI to provide platform for AAT AAT has partnered up with PSI Services (UK) Limited to provide its online platform for the computer-based assessments. The association says the new partnership will allow the AAT to draw on PSI’s ‘extensive experience’ in the design and development of its new qualifications, which will be launched in September 2021. AAT’s director of education and development, Suzie Webb (left), said: “We are excited that AAT and PSI will be working in partnership to take forward AAT’s assessment strategy.” She stressed that the user experience will still be paramount. AAT will now work closely with PSI over the next two years to ensure a smooth transition to the new platform.

Top accountancy firm RSM, which was recently appointed to audit the retail chain Sports Direct, has changed its top management team and reported itself to the regulator after discovering its own accounts were mis-stated. Accounts filed for RSM UK Holdings showed the firm made errors in its provisions for professional liability claims in 2018, and earlier years. The net impact on profits is nearly £2.2m. CEO David Gwilliam, CFO Nigel Tristem and COO Robert Ross have now all resigned from their roles. The story was first reported in The Sunday Times, where an industry expert said: “It’s pretty embarrassing if you can’t get your own accounts right.” There was also speculation that the error, not RSM’s first, could make the firm susceptible to a takeover.

Apprenticeships rap The accountancy profession has been ‘called out’ over its questionable rebadging of numerous graduate schemes into single apprenticeship schemes in a new report from education thinktank EDSK. The report ‘Runaway training – why the apprenticeship levy is broken and how to fix it’, claims that up to half of all apprenticeship courses in England could in fact be ‘fake’. The worry is that the levy is simply being spent on low-skill jobs or on relabelled existing schemes rather than real training. Report author Tom Richmond says that the most costly higher-

level apprenticeship is the accountancy/taxation professional course at Level 7 (equivalent to a Master’s degree). He highlights the fact that since 2017 some 8,278 accountancy/ taxation professional apprentices have been signed up. This compares with 861 registered nurse apprenticeship starts. These courses have cost £174m of levy funding since 2017, to cover roles as diverse as financial accountants, management accountants, tax accountants, tax advisers, tax specialists, external auditors, internal auditors, financial analysts, management consultants,

forensic accountants and business advisors. Richmond said: “For a single apprenticeship to cover such a breadth of respected and well-paid jobs is questionable to say the least.” He also claimed that for the apprenticeship levy to be used for university degrees that can already be funded through the student loan system is hugely wasteful. He pointed out that labelling these degrees as ‘apprenticeships’ is appealing to employers because they can draw down a large amount of levy funding for every ‘apprenticeship’ – up to £27,000, depending on the programme.

be limited to items that were goods as opposed to services. It also said that the digital versions shared the essential characteristics of a newspaper, namely “to promote literacy, the dissemination of knowledge and democratic accountability by having informed public debate”. The publisher also argued that the word ‘newspaper’ should be interpreted in a way that keeps pace with technological developments, but the tribunal decided that a strict interpretation should apply.

Financial services paying up The UK’s financial services sector contributed a record £75.5bn in tax in 2019, according to a new report from PwC. This adds up to 10.5% of all government tax receipts. Across the UK as a whole the sector employs around 3% of the workforce, but it contributes 11.6% of all UK employment taxes. That’s because of significantly higher average remuneration in the financial services sector, accroding to the survey.

Taxwatch Budget date fixed Chancellor Sajid Javid (pictured) has promised that his first Budget on 11 March will “level up” Britain. He is also expected to raise the threshold for national insurance contributions.


E-newspaper VAT ruling In a big win for News UK it has been ruled that the digital versions of The Times newspaper should be zero rated for VAT. The First Tier Tribunal (FTT) had ruled that the digital editions of the paper constituted a supply of services rather than goods, and the relevant schedule in the legislation relating to zero rating was confined solely to goods. In its appeal decision the Upper Tribunal determined that the FTT had been wrong to conclude that the schedule was intended to

PQ Magazine February 2020

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ICAEW beating CIMA ACCA smells a rat over forgery Arefin Raisa Khan, of Bangladesh, has the dubious honour of being the last PQ to be removed from the ACCA student register in 2019. Her sin? After becoming a student she failed F9 in June 2016, F7 in December 2017 and F6 in March 2017. She then claimed in January 2019 she had completed a BA degree with Anglia Ruskin University, and requested exemptions from papers F4 to F9. However, looking at the documents ACCA smelt a rat! Or, as ACCA put it, had “a suspicion regarding the authenticity of the documents submitted”. Anglia Ruskin confirmed the documents had been forged and related to a different student, who graduated in 2013. As well as being removed from the student register Khan was fined £6,600 in costs, reduced from £7,450.

ICAEW has overtaken CIMA in converting students into members, according to the latest stats from the Financial Reporting Council. In 2018, some 4,525 ICAEW students became members of the institute. This compares with just 3,598 CIMA PQs who joined their institute. The drop in CIMA ‘converts’ is substantial – in 2017 some 5,147 students became CIMA members. That means membership numbers fell by a whopping 30% between 2017 and 2018. Meanwhile, ICAEW numbers have been steadily growing over the past five years, and membership growth year-on-year was a healthy 33%. ACCA still leads the way on new members – some 14,756 affiliates became fully paid up members in 2018. However, this was a drop of nearly 1,000 on the 2017 figure (15,533).

Clendon joins FME Tom Clendon, a former PQ magazine lecturer of the year, has started his own online course to help students pass SBR. Clendon (pictured) has always specialised in teaching the final level ACCA financial accounting papers, His new online courses include a full tuition course, revision course and mock exam service.They are being run in conjunction with Students enrolling on his online courses also receive an online copy

of the current Kaplan ACCA SBR Study text and exam kit. Tom told PQ magazine: “I am excited in being able to launch this online course, which will enable me to offer a personal service to students, through my videos, through marking their scripts, through my notes, and through WhatsApp.” • Tom has agreed to give PQ magazine readers a discount code for his course. You can get 10% off his courses with the code PQ10%! – that’s six characters.

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PQ Magazine February 2020


PQ news

ZOE ROBINSON We all need to guard against the culture of fake news As we sit at the start of a new decade it seems a good point to look back on the past few years. We have seen the impact of a Donald Trump presidency, the resulting trade disputes with China and, nearer to home, the uncertainty created by Brexit. And, perhaps more relevant to PQ magazine readers, a series of accounting scandals. Underlying all of these has been a polarisation of views, a breakdown in trust and a lack of certainty as to what the truth looks like. In a previous PQ column I wrote about trust and its importance to the profession. Telling the truth helps build that trust. But do all accountants always tell the truth? Of course not, they are after all human beings, influenced by their environment, other people and often a pressure to be commercial. This is why it is so very important that ethics and professionalism is included in the curriculum. Although you can teach ethics the way it is assessed is important and needs to place the student in a variety of realistic and challenging environments with several answers, not just one. Appreciating the impact and consequence of an ethical decision can really help when it comes to grasping the nuances of this subject. It’s likely we will be living in a world of fake news and alternative facts for some time to come, but accountants could be part of a solution, checking facts and offering clarity – as long as we put our own house in order first, of course.

Monday morning problems ACCA students will be hoping for a better service at the March exams following a series of ‘technical problems’ last December. Concern is mounting among candidates that there is a ‘Monday morning problem’ with the CBEs. PQ magazine reported extensively on the ‘exam chaos’ in Reading on the first day of the December exams at the Pavilion Theatre. Systems crashed and many students had to wait hours to be logged on. Sitters at Birmingham’s Bordesley Green also suffered delays.

And there were reported problems at London Metropolitan University for those sitting the FM paper. One PQ revealed: “The system froze for all the people sat in the left row. I had my audit crash on Monday, too.”

Independent regulation is the way ahead CIPFA has called for the creation of an independent regulatory body to oversee local audit. Responding to a call for views from the Redmond Review, CIPFA emphasised the need for local public audit to be ‘fundamentally rethought’, with the aim of joining up what has become an overly fragmented structure in England. The proposed regulatory body would bring together responsibilities for audit appointments, standards,

enforcement, and public reporting on the overall position for councils nationally. Other improvements identified by CIPFA include the introduction of measurers to ensure auditor recommendations are properly followed up, and initiatives that make local authority financial reports more understandable to readers. CIPFA CEO Rob Whiteman

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Zoe Robinson is Learning and Programmes Director at Kaplan Financial

Predictions for 2020: get on your e-bike! Deloitte is predicting that the proportion of people who cycle to work will grow by one percentage point over the next three years, equating to tens of billions of additional bicycle rides per year. The growth in bike riding is supported by the launch of e-bikes and Deloitte believes over 130 million e-bikes will be sold globally between 2020 and 2023. Deloitte’s Paul Lee explained: “The first patent for electrifying a bike was filed in the 19th century; however, 2020 will be the year that e-bikes pick up pace. Improvements in lithium ion battery technology, pricing and power has led to a 10

The concern is that the time for the exam stayed the same and students were timed out of their test before the invigilator stepped in. However, it appears these UK PQs were not alone. Students in Malaysia said they too encountered similar problems. Another perceived problem was the lack of partitions at some centres. One Manchester PQ said the centre was ‘nice’ and staff were great, but “there were no partitions and it was easy to see other people’s screens!”

significant surge in interest globally.” Another growth area will be 5G. Deloitte predicts that more than 100 companies worldwide will be evaluating or have deployed 5G in industrial environments such as factories, ports and logistics centres by the end of 2020. By 2023, the value of cellular equipment and services for use in industrial deployments will be worth ten of billions of pounds annually. Deloitte’s Dan Adams said: “5G is poised to be the most disruptive mobile technology since the mobile phone itself. While it is likely to be a long time until we see autonomous cars on the open road, factories will be full of 5G-enabled autonomous machines this year.” Deloitte is forecasting that revenues from

(pictured) stressed: “There’s growing evidence that since the abolition of the Audit Commission, we are seeing market failure in audit. The simple fact is that high quality audit cannot be achieved on the cheap.” • Whiteman was awarded a CBE for services to public sector financial management in the recent New Year’s Honours list. a unique insight into how you can fast-forward your accountancy career. This free half-day conference in central London sold out last year, so you need to sign up now to guarantee your place. And it’s on a Saturday so won’t interfere with work. We are working with both the AAT and ACCA. Recruitment consultants Hays Accountancy & Finance will also be there to show you what you could be worth! Put Saturday 8 February in your diary. Book your place at

advertising supported video on demand (AVOD) will reach £500m in the UK by 2020, representing 10% of all television advertising revenues. It predicts that by 2025 the majority of streamed services, both mainstream and niche, will rely on advertising as a significant or sole revenue source. Deloitte is also predicting that the global market for audiobooks will grow by 25% to over £2.5bn in 2020. In the UK, the value of audiobooks is predicted to reach £115m in 2020. This suggests 25% growth over 2019. Finally, Deloitte is predicting that almost one million robots will be sold worldwide for enterprise use in 2020, up by 18% on 2019. This will generate £27bn in revenues over the course of the year. PQ Magazine February 2020

Prepare for ACCA CBEs with Sonar Education’s suite of mock exams for skills level papers: AA FM FR PM TX

We came together to form Sonar Education in 2018, and between us we have over 20 years of experience in teaching accountancy students and creating learning materials for a wide range of UK and international accountancy bodies. Recognising the need for students to be well-prepared for computer-based exams, we developed a suite of three mocks for AA, FM, FR, PM and TX for ACCA’s Applied Skills level. Each mock is of exam standard, and the course builds from Mock 1, which has several hints to guide the student, through to Mock 2 which has fewer hints, to Mock 3 which has no hints and replicates the real exam experience.

The key principle of our approach is preparation; the more familiar a student is with the CBE experience, the better prepared they will be for the real thing. Taking a computer-based exam is different from sitting a paper one, and it is important that the student is comfortable with the feel of the platform and the appearance of the questions on screen. Our platform mimics that of the real ACCA exams, and the questions have been designed to cover as much of the syllabus as possible. Our courses are being used successfully by a number of colleges and feedback has been excellent, and they are now available for individual students to purchase via our website

PQ tech news

MIKE DAY New report reveals the changing nature of the workplace

Looking at a recent One Poll with 500 decision makers in SMEs we can see the technology and trends shaping the future of small business (99.9% of all UK businesses are classed as SMEs, having 0-249 employees). In reality, just 5% of the jobs that exist today consist of activities that are fully automatable, and 85% of the jobs that will exist in 2030 haven’t yet been invented. Over the next decade there will be an acceleration in the adoption of AI to automate processdriven tasks. This will result in greater job satisfaction and will force firms to alter their hiring strategies. Some 91% of those surveyed said that technology has greatly impacted their business routines in the past decade, and the pace of technology uptake will only accelerate. Small businesses are already identifying the need for softer human skills when taking on new staff – 58% say they will be vital when hiring in the future. Our research shows that the most important human skills SMEs are looking for when hiring are communication (35%), intuition and decision making (26%), critical thinking (23%), people management (18%), and emotional intelligence (12%). Some 60% of small business owners already believe that the ‘job for life’ is dead, but the gig economy will challenge the concept of having just one job at a time. Both workers and businesses will have to incorporate the habit of learning new skills to retain their competitiveness. See the ‘Business Rewired’ report at Mike Day, Director, UK Education Sector, Xero

Virtual reality on the move Students newly enrolled on LSBF’s online Global MBA, Master in Finance and Investment, Dual Master in Finance and Investments, and Dual Master in Strategic Marketing programme, will now receive a state-of-the-art Virtual Reality (VR) headset. The free headset will augment the students’ studies, according to LSBF. ACCA students who enrol on the MBA/Master top-up programmes are also eligible for the headset. Currently, the VR set is sent to students pre-installed with a virtual reality public speaking practice session. LSBF said this will be a fully immersive VR experience, making you feel as if you’re standing on stage in a live setting and helping you refine your

presentation and speech-making skills. There will even be an automated grading at the end of your performance. LSBF stressed that it wants to make the most of new technology

to help create a fuller educational experience for its students. It sees this move as just the first step to bringing the full capability of virtual reality into your LSBF online classroom. Watch out ACCA PQs!

Travelex held to ransom

Did you wipe it? One in five second-hand phones sold online contain sensitive information that they can be used to identify and defraud the previous owner. University of Hertfordshire researchers bought 100 used phones on eBay to see how much data they could extract from ‘wiped’ old phones. Worringly, 19 had previous owners’ information still stored

on the phone, and 17 had data that could be used to identify them. The information included private emails, intimate photos, contact lists, text messages, tax documents, bank account details, web browsing history and personal calendars. One phone contained a form that listed an employer’s name, PAYE reference, payroll number, NI number and date of birth.

The recent saga at Travelex is a stark reminded what can happen when the hackers strike. The foreign exchange company’s systems went down just before the New Year after hackers demanded £4.6m in return for their customer data. Failure to pay up would mean the data would be sold on the black market. The hackers, known as REvil claimed they have been inside Travelex systems for six months. To keep the business running at airports and on the high street cashiers had to resort to using pen and paper. The fall out quickly had a knock on effect on a number of high street banks too. Sainsbury’s and Tesco were the first to stop customers ordering foreign currency. They were quickly followed by Lloyds, Barclays and Royal Bank of

Tech briefs £500,000 fine Dixon Carphone has been fined £500,000 after it failed to prevent cyber-attackers from accessing the personal details of 14 million customers. The Information Commissioner’s Office found an attacker had installed malware on 5,390 tills at stores that collected personal details for nine months. Block all replies Twitter is testing new features that will allow users to control who 12

can reply to their posts – even blocking replies entirely. The social media giant has already launched a feature, which will allow users to hide replies to their tweets. The new features currently being tested will allow users to select from four different settings for replies: • Global – allow anyone to respond. • Group – allow replies from people the user follows, or mentioned. • Panel – allow replies from people mentioned. • Statement – not allow any replies.

Giants in frame again The Competition & Markets Authority (CMA) says it’s time to

tackle the online giants once and for all. It is worried that the dominance of Google and Facebook in digital advertising, in particular, is harming innovation and the economy. Another worry is that those using the platforms have no control over the use of their data. On top of the higher advertising costs that come with monopolies, the CMA is concerned we could all miss out “on the next great new idea from a potential rival”. Moves to a new regulatory regime now seem inevitable. PQ MagazineFebruary 2020

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working overseas PQ

The world’s your oyster Working overseas need not be a distant dream – with a little help you can really make it happen orking in the international development sector gives accountants the opportunity to make a positive, meaningful impact on global issues, work with incredibly inspiring people and potentially travel the world. Whether you are looking into a ‘career change’ from the corporate to charity world, or if you are studying accountancy with a clear goal of working for a charitable cause, the rewards of a career in the industry are plentiful. However, as a sector with a lack of funding across the board and where jobs are highly competitive, it comes as no surprise that such opportunities are hard to find. If you are considering a career in the charity sector then here are some useful tips from Accounting for International Development (AfID). AfID is a social enterprise that offers every type of accountant, from anywhere in the world, the opportunity to use their skills to support a broad range of nonprofit organisations globally. Through AfID, finance professionals are able to gain both volunteer

Even a short two- to three-week assignment will reassure employers that a candidate is serious and indicates a transferability and flexibility of skills. It demonstrates a candidate’s interest and commitment in the sector, personal qualities essential to navigate a diverse stakeholder group, cultures and contexts, and an understanding in how non-profits function and are funded. Another important factor in employability is personality and dedication. Candidates with the experience and qualifications required, but who display no real understanding of the organisation and its context, are unlikely to be successful. Demonstrating a keen interest and passion in working with them is something that should be effectively communicated in interviews.


experience and paid work in the sector. Offering pro bono opportunities in over 50 countries as well as specialised recruitment services for charities like Save the Children and Amnesty International. And more than 20% of AfID volunteers now work full-time in the non-profit sector.

AfID Workshop Alongside volunteering and job opportunities in the sector, AfID hosts workshops offering a practical insight into finance work in international development, with further tips and guidance on the sector. Their next workshop is scheduled for 31 January 2020. You can book your place at, or contact PQ

Prior experience The most crucial asset that NGOs value above all is prior experience, whether that be in institutional donor management, overseas fieldwork or capacity-building of funding recipients.

Case study: the African queen

Can you tell us a little about your career? Joining Farm Africa’s UK offices has been an exciting career move in the direction I am passionate about. This role has challenged me to learn new things such as accounting standards/policies and improve processes and redefine ways of working, which I love. PQ Magazine February 2020

Christian Aid/Olivia Arthur

In May 2017, Amber Honey decided she needed a break from the hustle and bustle of life at Deloitte in London. She got in touch with Accounting for International Development (AfID), and was placed on a volunteer accounting assignment in Rwanda with Children’s Might Foundation. From the early-morning discussions over freshly made chapattis to afternoon meetings among tomato crops, the contrast to Amber’s lifestyle was a stark and welcome change. The South African native returned to London with a reawakened desire to make international development part of her future. That future came around more quickly than expected as within four months, with the help of AfID, she landed a role in the non-profit sector as Finance Business Manager at Farm Africa – where she is now Head of Finance.

Previously, I worked in the Risk Advisory department at Deloitte.

What transferable skills have you found the most useful working in finance in the charity sector? While volunteering, I drew particular reference to my audit experience of writing clear step-by-step instructions, ensuring that processes are continued effectively. I think audit teaches invaluable skills in presenting information concisely.

Do you feel your voluntary experience with AfID helped you gain your role at Farm Africa and prepare for life in your new role? Without a doubt, volunteering provided the crucial experience that helped me navigate my way into this sector. In my interview, I was able to show an understanding of and commitment to how programmes are run in rural Africa. What would be your advice to other accountants considering a similar career change or breaking into the sector? I would suggest volunteering with an organisation that shares your interests. Being realistic about what you are moving into in terms of people and pay is an important consideration. Be willing to push yourself to achieve results; you need to make up your own rules and deadlines in order to replicate the pressures familiar from the corporate world. For more information on Accounting for International Development, visit or contact them at 8741 7000 15

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ICAEW spotlight PQ

Help is at hand for CA PQs ICAEW Student should take advantage of a range of resources available exclusively to ICAEW students all year round CAEW is here to support you throughout your ACA journey, and offer many benefits as you study. With a wealth of resources on offer for you to help develop technical competence and professional skills, the benefits will provide value whatever stage of your training. Here we highlight some resources and support you can access as an ICAEW student. CABA: Need help? Contact CABA – the charity that supports the wellbeing of chartered accountants. None of us know what the future holds, but as an ACA student, you and your family can rely on free lifelong support such as counselling and professional development courses from CABA. Student Societies and ICAEW Student Council: The ACA isn’t all work. While studying, you will receive automatic membership to your local ICAEW student society. Run for students, by students, they’re a great way to connect with fellow students and attend social events. TOTUM PRO: If you like saving your pennies, purchase this discount card during your training. In partnership with NUS, ICAEW students are


eligible for the TOTUM PRO Card. This new discount card and app gives you access to discounts on over 200 UK brands online and on the high street. Student Rewards: ICAEW students can also access our member rewards programme. This is designed to save you both time and money on an array of products and services. Whether you’re looking to rent a car for your holiday, a day out at Thorpe Park or a discount on your next work wear purchase with T.M. Lewin, our rewards programme has it all. Xero: Gain cloud accounting expertise with courses and certificates from Xero, the software

used by businesses around the world. As an ICAEW student, you can sign up and access this software for free. Faculties: From tax to reporting, our faculties can boost your knowledge in areas that interest you. Access specialist areas that offer networking opportunities, influence and recognition within clearly defined areas of technical expertise. Finance in a Digital World: Check out the suite of online learning to support ICAEW students, develop awareness and build understanding of digital technologies and their impact on finance. Communities: Diversity? Women in finance? Data analytics? Whatever your interests may be, our communities offer the most up-to-date information, insights, guidance and networking opportunities in a range of industry sectors and professional specialisms. Exam resources: Access past exams, examiner feedback, sample exams, tutor and examiner written articles for each ACA module. Freely available to you as and when you need them. Student community: Join the conversation by using the student community. We’ll keep you current with industry-specific news, key dates and deadlines, and help you connect with other ACA students across the globe. Take advantage of your exclusive benefits today. Find out about many more student benefits at PQ • Thanks to ICAEW for this article

study tips PQ

How to revise better Whether you’re an exam pro or are dusting off your revision skills for the first time in a while, knowing how to revise is quite the talent. Cath Littler shares her top tips… 1) It may seem obvious, but don’t put off those difficult concepts until revision – make sure you fully understand the course content as you go. If you find yourself thinking “it’s ok, I can get it when I revise”, that is your brain ringing alarm bells, saying “I don’t get it… run that by me again?” 2) Make a revision plan and timetable, spacing out your revision. Going back to a topic over a few days is very effective because it lets your brain work on it between study periods (while you do something else!). 3) Plan breaks. Finding a few hours to take time out will do you the world of good. Whether it’s date night, walking the dog or playing with the kids, you’ll come PQ Magazine February 2020

back refreshed. 4) Make a list of the topics that you find difficult, because that is what you should focus most (but not all) of your time on. 5) Go back through your notes to

condense them into key points. It is important to use your own words as that means your brain is fully engaged and you will understand the concepts better. There are lots of ways to do this, including flash cards, mind maps or bullet points. 6) Practice written tasks. In full. A lot. Practice really does make perfect. 7) When you’re ready, use the first practice assessment to identify weak areas. Then revise the whole of any weak topic areas (not just the exam questions) before doing another practice paper. 8) Do not fall into the trap of learning the practice exams rather than learning the syllabus. Exams cover the whole syllabus over time, so there will be topics in your actual exam not covered by the practice papers. 9) Make sure you know in advance when and where your test is and what you are (and are not) allowed to take in. Pack your favourite admissible calculator. 10) Arrive at the exam nice and rested. Try to avoid being too busy or stressed in the days before the exam and don’t stay up late cramming – save your brain for the exam. If you have upcoming exams, we wish you the very best of luck! PQ • Cath Littler is Head of L&D (Accounting) at Mindful Education 17

PQ audit

PQ magazine’s Graham Hambly picks the bones out of the latest independent review of auditing o how do you improve the quality and effectiveness of audit? That was the big question Sir Donald Brydon wanted to address in his ground-breaking report, released just before Christmas. At the heart of his report was the need to make audit more informative to its users, and thereby improve the cost and allocation of capital – adding value to the whole economy. The final report makes 64 recommendations, including the establishment of a new corporate auditing profession with a unifying purpose and set of principles. Worryingly, Sir Donald feels that audit lacks a clearly understood and fully encompassing purpose. He is proposing a fresh definition, which would need to be enshrined in company law. The recommended definition is: “The purpose of an audit is to help establish and maintain deserved confidence in a company, in its directors and in the information for which they have responsibility to report, including financial statements.” The purpose of this change is to reflect the fact that audit is undertaken in the public interest, and is more than just compliance with laws and rules. The report explains: “Audit exists fundamentally to help its users know how confident they can be in the audited information and, by extension, in those who have produced that information.”


A new profession Perhaps the biggest surprise in the report was Sir Donald’s call for a new standalone audit profession. He felt that auditing is too important to be left to an adjunct of another profession. “It should be an independent profession in its own right, with its own governing principles, qualifications, and standards.” At present it is just the extension of the accounting profession, whose ethics and arguably mindset it largely adopts. The report recommends that the Audit, Reporting and Governance Authority (ARGA) –

The future which is to replace the FRC – should ‘facilitate’ the establishment of a corporate auditing profession based on a core set of principles. ARGA would then be the statutory regulator of the ’new’ profession. On top of this, the ARGA would need to develop a coherent framework for corporate audit that includes, but is not limited to, the statutory audit of financial statements. The new profession needs to encompass all corporate auditors, including the statutory auditors of the financial statements, and auditors of other corporate information; for example information covering cyber security or environmental figures. While some of these corporate auditors would come from traditional audit firms others may come from new specialist audit entities. What Sir Donald wants is for them all to serve the same audit purpose. The report wants to see more prominence given to auditor behaviour, and has added additional principles around openness, independence, challenge and the public interest. Sir Donald believes, if implemented and applied effectively, these principles would provide an incentive to deliver more informative audits. He is hoping the courts will consider adherence to them as part of any defence against future legal action, which may claim that an auditor’s opinion has harmed the audited company. The report also introduces, in addition to the concept of professional scepticism, the need for professional suspicion. There is a growing challenge in using ‘true and fair’ as a descriptor of financial reporting, with financial reporting increasingly using estimates and judgements. Together with the fact that the audit is intended to provide assurance that the company accounts are free of material misstatements, Sir Donald says it is difficult to see “how either directors or the auditor can communicate effectively that the

Industry reaction to the Brydon review • Maggie McGhee, ACCA: “It is welcomed that Sir Donald has proposed a redefinition of audit to reflect the public interest. ACCA’s own research identifies a clear expectation gap between what the public expects from auditors and what the profession can deliver. The public has high expectations of the auditor’s responsibility in terms of fraud detection. We are pleased Sir Donald recognises that the successful reform of audit is also dependent on the implementation of reforms concerning the roles of directors and audit committees.” • Michael Izza, ICAEW CEO: “Sir Donald’s thorough report contains some bold proposals which could change the way the accountancy profession operates within the UK business 18

landscape. We agree that audit urgently needs to keep pace with the needs, not just of investors, but of wider stakeholders in society, and we are long-standing advocates of proportionate and practical change to restore public trust. This report makes the early establishment of ARGA even more critical, and we urge the government to bring forward the necessary legislation at the first opportunity.” • Steve Gale, Head of Audit at Crowe: “While the focus of the Brydon Review has been on the quality of audit provision for FTSE 350 companies, some of the recommendations – including, clearly the creation of a new audit profession distinct from accounting – will undoubtedly impact the market as a whole.

modern company accounts are ‘true’ in accordance with any reasonable person’s understanding of the world.” He is therefore recommending that ‘true and fair’ be replaced in UK company law with the term ‘present fairly, in all material respects’. Directors’ reporting The report goes on to say that directors should have a legal obligation to state that the financial accounts they present each year have been fairly presented in all material respects, and the auditor should have a corresponding duty to assess whether this is the case. To enhance the informative nature of the audit report, Sir Donald has said auditors need to: • Create continuity between successive audit reports. • Provide greater transparency over differing estimations, perhaps disclosing graduated findings. • Call out inconsistencies in information made public. • Reference external negative signals and how they have informed the audit. He wants directors to present to shareholders a three-year rolling Audit and Assurance policy. This would indicate their approach to the appointment of auditors, the scope and materiality of all auditing (including that of the financial statements), the assurance budget, and the relationship of any audit to identified risks. Shareholders would be invited to express their views on this policy in an advisory vote. Another recommendation is that directors publish their statement of principle risks and uncertainties before determining the scope of each year’s audit and actively seek shareholder and other views on the appropriate emphasis. To improve the understanding of the resilience of their company Sir Donald is demanding directors publish a ‘resilience statement’, which

The radical nature of some of the changes that are proposed in this review, as well as the CMA review and Kingman Review that preceded it, should be welcomed for their attempts to make changes that makes audit fit for the future. It is critical this time, unlike with some of the past reviews, that we have action, not just words.” • Andrew Harding, CEO – Management accounting, CIMA: “We believe that the move towards a UK SOX regime and mandating businesses to provide their Board an Internal Controls Statement agreed by the CEO and CFO is a positive recommendation. This would help businesses take a more integrated approach to reporting and give them a further push to ensure their governance is robust and their Boards have the information they need to protect the business model, strategy and values of their organisation.” PQ Magazine February 2020

audit PQ

e of audit is here supplier payment performance be brought into the annual report, and be subject to a level of audit. Auditor transparency When it comes to auditor transparency, Sir Donald wants auditors to disclose within the audit report the hours spent on each audit by each grade within the audit team. The firm must also ensure a clear separation between the team, which negotiates the audit fees, and the team that carries out the audit(s). Audit firms would also be required to publish the profitability of their work from audit, and the remuneration of their senior statutory auditors, and the attendant performance measures around that incorporates a going concern opinion for the short term, a statement of resilience in the medium term and a consideration of the risks of resilience in the long term. This resilience statement would replace the existing going concern and viability statements. When it comes to recognising the legitimate interest of all users the report recommends that directors present an annual Public Interest Statement, which explains the company’s view of its obligations to the public interest, and how the company has acted to meet this ‘interest’ over the pervious year. On top of this, the report wants to see the introduction of a new reporting duty on directors to set out the actions they have taken each year to prevent and detect material fraud. Sir Donald feels that there should be enhanced transparency when it comes to audit fees too. Audit committees would agree an annual assurance budget, within which they have primary responsibility for negotiating and agreeing the audit fees, and which sets a framework for company spending on any other assurance work. Role of shareholders Interestingly, the report also tries to make a number of recommendations that would enable and even encourage shareholders to influence the scope of the audit, and hold the audit committee and auditor to account. These are intended to ‘complement’ the directors’ new PQ Magazine February 2020

disclosure requirements. This could mean there would be a standing item on audit at the company’s AGM, to permit questioning of the audit committee chair and auditor. Auditors will, however, have to think beyond the shareholders. The report says the Principles of Corporate Auditing should include a statement that auditors act in the public interest and have regard to the interests of the users of their reports beyond the shareholders. The audit report should, said Sir Donald, include a new section in which the auditor states whether the director’s section 172 statement is based on observed reality ‘on the basis of the auditor’s knowledge of the company and its processes’. When it comes to whistleblowing the report believes the Statutory Auditor be added to the list of ‘prescribed persons’ under the Public Interest Disclosure Act. This would allow employees legitimately to raise concerns and relate information directly to the auditor – provided that they meet the public interest criteria set out in the Act. Sir Donald has asked the government to look at widening the Act in this respect to enable customers and suppliers to raise concerns with the statutory auditor. The report notes the relative lack of information in respect of the performance regarding payments to suppliers within annual reports. The recommendation here is for existing voluntary and statutory company disclosures on

remuneration. Finally, clear reasons have to be given for any resignation, dismissal or decision not to participate in a retender, with auditors and companies being prepared to answer relevant questions in a general meeting. A moment in history Sir Donald explains that this is an important moment in the history of audit, and it needs a ‘genuine desire by auditors’ to grasp the opportunity his report presents – both to the users of audit and of their own profession. Some of the changes will need to be taken forward through legislation or regulations. Others can be left to the ARGA. It is now up to the Secretary of State for BEIS to determine how this report’s comprehensive recommendations can be implemented (so watch this space). Sir Donald honestly believes he is proposing to create an new environment, where the status of an auditor will be enhanced and will help create an audit profession that will be attractive to new entrants. PQ • ‘The quality and effectiveness of audit: independent review’ is the third of three audit reviews commissioned by the UK government. It follows: – Sir John Kingsman’s ‘Independent review of the Financial Reporting Council’, which considered the role of the audit regulator. – The Competition & Market Authority’s study of the statutory audit market. 19

PQ CIMA spotlight

Automation in 2020

– and beyond

CIMA has developed a range of tools designed to help its students adapt to changes to the way we work, says Stephen Flatman n 2019, the general talk around automation in the mainstream press centred on preparedness: were people ready for the impact? Have businesses been taking enough care to prepare their workforces? And who will be winners or losers in the automation game? For us in the finance sector, we have felt the effects of automation more than some and our focus remains on its impact. Tools such as Robotic Process Automation (RPA) and accounting dashboards make the life of the finance professional that bit easier, bringing in efficiencies and freeing up time for creating value.


This level of change will only continue, and the future world of finance will become more digital, more streamlined. It will need professionals who have a unique blend of technical and soft skills that enable them to seamlessly work alongside technologies like robotics and algorithms. And, as machines do the efficiency-focused tasks like process costing etc., attention will rightly be placed on how we can support revenue creation and add value as business partners. Getting to grips with the changes new technologies bring and adapting new ways of working will be a constant work in progress for everyone. But, luckily for you, if you’re studying with CIMA you can be confident that the syllabus will give you all the tools you need to confidently face any challenge. Not only has the CIMA Professional Qualification recently been updated (and will continue to be, on a rolling basis), but we have also

introduced exam blueprints a first for the management accounting sector. The blueprints are a tool created to help tuition providers and students understand exactly what the new expectations are following the updates to the syllabus. They tell you what you’ll be examined on and they also give employers a clear view that you’re gaining the skills they’ve told us they require finance professionals to have. To give you the best chance of success in your exams the blueprints detail what you’ll come to understand after completing the core activities for each subject and include a series of ‘I can’ statements you will be able to make on passing the exam. ‘I can’ statements At Operational level, E1 ‘Finance Interacting with the Organisation’ will prepare you to “understand how the finance function enables, shapes and narrates value creation through planning, forecasting, resource allocation, performance management and financial reporting”; you will be able to comfortably make ‘I can’ statements such as: “I can apply appropriate techniques that support short-term decision-making”, or “I can identify appropriate sources of short-term finance and methods of shortterm investments”. The fact that the world of finance is increasingly digitised should not be seen as a bad thing. In 2020 and beyond, the changes offer great opportunity for our sector, and all of us as individuals, to practise and hone skills that aren’t typically associated with the finance function. The key to success, however, will be to keep an open and agile mindset, one where you accept the need to constantly learn new things, unlearn and relearn. This is how you will stay ahead of the curve and help your business thrive in uncertainty. For tips and tools to help you pass your exams visit the CIMA study planner: For insights into the latest issues affecting the Accounting profession visit CIMA Insights: Members/Insights/. PQ • Stephen Flatman, Vice President, Examinations, Management Accounting, The Association of International Certified Professional Accountants

Registered Tuition Provider


PQ Magazine February 2020

the troubleshooter PQ

How to stay in control Dr Philip E Dunn tells you all you need to know about the behavioural aspects of budgetary control


ll professional students preparing for assessments in management accounting need a clear awareness of how behavioural patterns are often shaped by the budgetary process and why behavioural aspects are more to the fore in budgetary control than in any other management accounting technique. A budget was once defined by CIMA as “a plan expressed in money. It is prepared and approved prior to the budget period and may show income, expenditure and capital to be employed. It may be drawn up showing incremental effects on former budgeted or actual figures or compiled by zero-base budgeting.” Budgetary control is defined as ‘the establishment of budgets relating the responsibilities of executives to the requirements of a policy and the continuous comparison of actual and budgeted results, either to secure by individual action the objectives of that policy or to provide a basis for its revision.” To quote a phrase used in Kaplan texts: “Budgets have an impact on people and people have an impact on budgets.” The functions of budgetary control are: • Planning and coordination. • Authorising and delegating. • Communicating and motivating. • Evaluating performance. • Control. This process is often seen as a source of conflict and managers may have differing perceptions of the nature and purpose of the technique. So how do the above functions aid managers in achieving their objectives? • Planning provides a coordinated approach in the short term. A framework of responsibility is set; without this

PQ Magazine February 2020

planning managers’ objectives would be unclear. A coordinated approach to planning enables managers to have a wider perception of the organisation as a whole. • Authorising and delegating bestows power on people and may be interpreted by some as permission to ‘spend the budget’ rather than ‘spend up to the budget’. • Communicating and motivating are vital elements – an effective system of budgetary control will encourage and develop good communications within an organisation and aid management in performance enhancement. Budgets underpinned by sound planning technique should motivate individual managers towards achieving their objectives and those of the wider corporate plan. • Evaluating performance is achieved by timely presentation of results within the responsibility accounting framework, focusing on variance accounting. Management performance is thus judged on a timely and regular basis. Using exception techniques, managers can control the operations for which they are ultimately responsible. • Control simply focuses on operational control, once defined by CIMA as “the management of daily activities in accordance with strategic and tactical plans”. Researchers and writers agree there are three areas that often encounter problems:

• Budget setting. • Budgets as targets. • Budgets as performance indicators. Budget setting is usually characterised as either ‘imposed or participative’. In some organisations setting budgets is the sole responsibility of the senior management team. They communicate their plans to their subordinates using a top-down process. Often, the managers responsible for implementing the plan have little or no participation in the budget setting process and this can have an adverse effect on management attitudes and behaviour. The opposite approach is one of full participation in the process which can: • Lead to more realistic and achievable targets. • Improve coordination and communication across the organisation as a whole. • Increase management commitment to objectives. Budgetary targets must be set at acceptable and achievable levels so that the managers are motivated to achieve their personal objectives, thus enhancing performance and contributing to the overall achievement of corporate plans. Imposed budgets often set targets that are too difficult to achieve and managers are discouraged by these unattainable standards and so become de-motivated. Performance evaluation provides feedback for ongoing managerial decision making. Such reporting needs to be timely and to possess the attributes of: • Relevance. • Reliability. • Comparability. • Understood by the user. As providers of financial information it is our duty to assist in this process. For managers to be assessed on their performance by the budgetary control and variance accounting process they need to understand and have the confidence in the reports they receive – otherwise conflict will arise. PQ • Dr Philip E Dunn is a freelance author and technical editor for Kaplan and Osborne Books


PQ ACCA spotlight

Keep an eye on the prize A new ACCA report makes for good reading for those making their way in accountancy, says Jamie Lyon or those of us who may be predisposed to the January blues, ACCA believes that there are reasons to be cheerful. In Professional Insights’ latest research on the future of careers we look at how trends are impacting careers. It tells a story of opportunity, and of a profession that can be reimagined for the digital age. Digital is exploding, transforming businesses and organisations. Other forces are at play too revolutionising the workplace: globalisation and protectionism, changing expectations, shifting social mores and values, and presenting new levels of connectivity, and demographics. The greatest imperative facing organisations is survival and sustainability. There is also more scrutiny. Organisations don’t just have to generate financial return – they also need to employ better corporate citizens, too. Sustainable businesses are the lifeblood of both a sustainable economy, and planet. This presents a golden opportunity for the accountancy profession to build on its foundations and renew itself. A chance to adapt and play its part in building and protecting businesses and organisations for the long term. It’s a once in a lifetime occasion to repurpose a profession fit for the modern world. A possibility to transform the profession in the minds of a younger generation entering the workplace who may have misplaced idea of what a career in ‘accountancy’ truly means, but who have ambitions for purposeful vocations. It is a call to arms for accountancy to be reimagined. A profession that can offer exciting and meaningful careers to the future workforce to play their part in building sustainable organisations fit for the digital age. Some 79% of members in ACCA’s



report survey agreed that accountants will move into more diverse career paths. In this emerging world, ‘jobs’ in the profession are more flexible. As jobs change, new, more amorphous career journeys are likely. These are difficult to predict or define precisely. For example, linked career experiences, which are unique, personal and diversified. These changes also present considerations for how finance teams are designed, how they support careers and design ‘jobs’ for accountants, even with evolving work strategies. They will need to build roles that require flexibility, which are less prescribed and rigid in their definitions. We can expect teams across organisations to be more collaborative, permeable, more fluid, and for some

• The report, ‘Future Ready: accountancy careers in the 2020s’, was published by ACCA on 14 January

teams possibly less anchored to traditional organisation functional structures in a world where business models are also rapidly evolving. This future world also demands a different mindset by individuals, augmenting with emerging technology as they transition through their working lives and adapt more quickly to fast moving and multifarious career paths. The bottom line is simple: The job for life is a relic of the past. The report suggests five emerging zones of career opportunity for the future linked to the imperative of helping build sustainable organisations for professional accountants as assurance advocates, business transformers, data navigators, digital playmakers and sustainability trailblazers These aren’t specific roles or career paths necessarily, rather broad areas of work where professional accountants can bring their expertise to bear for the benefit of their organisations and the wider community. We foresee a world of significant career change, where individuals may have many types of roles, building a portfolio of careers potentially rather than the traditional career ladder. We will also see fluidity in how people navigate across types of career zones. Roles are changing quicker, and that is driving turnover of skills. That in turn is driving the transformation of how we learn, which needs to change along with the skills we need to develop. Accountants will still need to apply the ACCA seven professional quotients – (technical and ethical, intelligence, digital, and experience) and softer skills (creative, digital and emotional intelligence). In fact, these become even more important as we look forward in this environment. Accountants will need to apply all their broad skills to have maximum impact in organisations seeking to build sustainable business strategies and operations. Those who succeed can look forward to a new world of opportunity and the chance to build great careers. PQ • Jamie Lyon, ACCA Professional Insights

PQ Magazine February 2020






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This is an ideal prize for anyone resitting, too. To win this great prize just send your name, address and the skills course you want access to to Head up your email ‘Sonar Education’ and we will put your name into the hat for the free draw. Closing date for entries is 3 February 2020.

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PQ decade in review

The past 10 years... PQ magazine editor Graham Hambly looks back at some of the highs and lows of the past 10 years

could be on the cards, following sweeping reforms outlined by the European Commission. We are still talking about it! Both ICAS and the AIA also unveiled new logos in the spring.

2010 PQ magazine kicked off the decade by interviewing Sir David Tweedie, who was then head of the IASB. In our launch issue way back in January 2003 we had featured him on the cover as the “most hated accountant in the world”. As he told us in 2010: “Not everyone supports shining a light into some of the darkest corners of finance, so we will never win a popularity contest.” CIMA launches new syllabus – just like now! Back in 2010 we, along with students, got to see all the ACCA exam papers, and PQ magazine used to mark the papers out of 10! How the examiners loved us then. PQ also went undercover to report on both an international scam in phoney accountancy qualifications and the growing trend for buying prescription drugs to help study and revision. 2011 Our January issue highlighted a PwC Ireland internal enquiry after a group of male staff members were caught circulating an email in which they rated the looks of new female trainee recruits. We hope that doesn’t happen anymore! PQs were also asking for their bodies to provide an online help centre, staffed 24/7. CIMA designated 2011 the ‘Year of the Student’, planning a whole series of initiatives to for its PQs. At the same time CIMA quit the CCAB. Meanwhile, the ACCA server crashed in the summer as students tried to find out their exam results. As one PQ said: “It’s time for the ACCA to refresh itself!” Later in the year ACCA’s Helen Brand announced all its professional exams would go online by 2015. We celebrated our 100th edition by giving away 100 free courses. 2011 was also the date of our infamous ‘Taxi for AAT’ front cover, as leading tutors slammed the AATs CBA exam fiasco. 2012 In 2012, we reported that the break up of the Big 4 firms and mandatory rotation of audits 24

from the AAT. 2013 was also the year trainee AAT Emma Way got into big trouble when she tweeted: “Definitely knocked a cyclist off his bike earlier – I have right of way he doesn’t even pay road tax! #bloodycyclists”. It cost her her job. 2014 In one 2014 issue of PQ magazine we planted CIMA’s education chief Noel Tagoe’s head on the

An ICAEW ACA got into hot water when they were at the centre of a ‘Nazi chanting’ row. The accountant, on a stag do in Austria, dressed up in an SS Nazi uniform and was photographed giving a ‘Heil Hitler’ salute. When PQ contacted the ICAEW they told us they had not received a formal complaint about the incident and were not planning disciplinary action. In a move to rival CIMA’s tie-up with the AICPA, ACCA announced it had found its own ‘American friend’. The strategic partnership with the Institute of Management Accountants (IMA) was not to last. In the autumn, ICAS it was introducing a pledge of allegiance. In what was believed to be a world first, all those picking up their membership certificates were told to recite an oath of loyalty to the institute. 2013 KPMG’s Simon Collins started the year in the right way saying gay staff need to be given the freedom to ‘be themselves’. He admitted that old-fashioned attitudes towards gay employees were still prevalent in accountancy. CIMA’s P2 exams were in meltdown on the PQ news pages and we asked ‘where are the ICAEW women’? We are still asking the same question. Tenth birthday PQ magazine celebrated its 10th birthday too in February with a fab front cover. As ICAEW’s Mark Protherough said: “2003 saw the launch of two iconoclastic and innovative products – QI (the TV quiz show) and PQ magazine.” In April, ACCA announced that it was aiming for four exam sittings a year at its Lecturers’ Conference in Nottingham. Apprenticeships also made the front cover for the first time, and KPMG piloted an accelerated graduate training programme. September saw the official launch of AQ2013

Grinch – for another cover no one can forget or forgive! The institute had announced that it was releasing the November exams early. So, instead of January it was going to send them out on 23 December! Tuition providers weren’t happy, as they felt they couldn’t go on holiday! There was a big debate that year about whether getting just 50% right in exams was sufficient to create the competent accountant of the future. The general consensus of tutors was that pass marks should be around 70%. That, they said, would instil confidence. As one tutor put it: “What do you think the public would say if they found out their accountant was only expected to be half right?” Northern Ireland became the place to be as three of the Big 4 accountancy firms unveiled big plans for the province. The year ended with KPMG making a bold diversity promise – that 25% of its partners and 46% of its seniors would be female by 2018. 2015 CIPFA began the year by unveiling Calibrand as its official e-assessment partner. And after more than three years of ‘courting’ CIMA and the AIPCA announced they were ready to take their relationship to the next stage! What transpired was The Association. CIMA also said it was introducing scaled scores into all its exams. Big 4 firm EY announced that it was going to remove academic qualifications from its entry requirements. It said the change would “open PQ Magazine February 2020

decade in review PQ

up opportunities for talented individuals regardless of their background and provide greater access to the profession.” ICAEW announced record student numbers and a move to CBE testing from 2016. Synoptic assessments At its annual conference AAT unveiled synoptic assessments and grades, and time limits for the number of times students can re-sit an assessment in any 12-month period. Our November cover also warned that ‘the robots are coming’. We wondered if PQs jobs would be replaced by automation! 2016 It became official in 2016 that accountants make the world a better place. That’s what a report from IFAC said, anyway. A big story we ran in the summer was the claims that the audit process was being compromised by the social ‘mismatch’ between young, inexperienced auditors and older, more experienced client management. PwC became embroiled in a dress code row after a female temp was sent home for refusing to wear high heels. It was Portico, a firm that supplies front-of-house services to many top companies that was really to blame here.

Another great story was the banning of bananas from exam halls. Some PQs were indignant, others wondered why some PQs couldn’t go three hours without stuffing their faces! CIPFA was also forced into an apology after the introduction of its online exams did not go as smoothly as it had hoped. ACCA’s Alan Hatfield made the front cover more than once that year. In November he unveiled a major shake-up of the final level PQ Magazine February 2020

exams – we are talking SBR and SBL here, and demise of P1, P2 and P3.

because it aligns with their top priorities – a stable career path and good salary.

2017 In January CIMA and CIPFA agreed a new ‘CPFA to CGMA Top Up through the CIMA Gateway’. Everyone started to wonder if this might lead to merger talks, but nothing came of that. The then ICAS CEO, Anton Colella, claimed ‘audit isn’t sexy enough anymore’ in March. He was concerned no one in the future would be attracted to audit! May saw the ACCA push out a new enhanced ethics module, and the ICAEW rebrand.

2019 The year saw us celebrate our 200th issue – in August. Before that we had the small matter if the reshaping of the CIMA syllabus and its blueprint for the future – which is digital. In March we also explained how you audit a robot! We decided that the professional bodies needed to do more to safeguard the mental wellbeing of their students. So in August we asked: did anyone tell you that of you are taking professional accountancy exams then you have better be prepared for a bit of a cry? Our ground-breaking survey had discovered that the exams process has left well over half (56%) of PQs in tears.

Mental health In June, PQ magazine highlighted that mental health issues were on the rise. This was to become a big theme in the coming years. More technical issues at the AAT exams hit the news pages in July and the AAT admitted “we got it wrong’ over MDCL. Then the drones took over the August issue, as PwC revealed it had plans to scale-up the use of drones. Finally that year we homed in on accountancy superhero The Tick. As usual The Tick is not a conventional superhero! 2018 In February we revisited the thorny issue of social mobility in accountancy. Research showed that applicants from low income families are still less likely to be taken on as chartered trainees by the world’s largest firms. The following month CIMA dished out a salutary lesson on how not to use social media during exams. The institute stamped down hard on students in a WhatsApp group who shared information about one of its operational level case study exams. In early summer we said the Financial Reporting Council’s very future had been thrown into doubt after the government promised an independent inquiry into its operations. Concerns were raised when the FRC cleared KPMG over the audit of HBOS and took 12 years to fine Deloitte over the failing of MG Rover. The year ended with the news that Generation Z loved the idea of becoming an accountant. It won out as the career choice for many 18-23 year olds

Exemption fees scrapped In September CIMA got top news billing when it announced it was scrapping exemption fees. That has always been a big bugbear at PQ magazine. 2019 was also the year we asked can accountants save the planet. The conference held with London South Bank was seminal, with

a number of fascinating sessions from experts in the field, including Professor Richard Murphy (above). It is a simple message: financial markets will collapse if we don’t protect the natural world. Take a look at what is happening in Australia… PQ



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international standards PQ

IFRS 9 EXPLAINED Tom Clendon tells you everything you need to know about IFRS 9 Financial Instruments, specifically accounting for financial liabilities at amortised cost et us have a look at just one aspect of this most complex accounting standard; and perhaps the most examinable aspect – the accounting for financial liabilities at amortised cost. While it is possible that in certain circumstances financial liabilities can be accounted for at fair value through profit or loss (FVTP&L), the default treatment for financial liabilities is to account for them at amortised cost. As an aside, this means we have a mixed measurement system for financial liabilities (the use of the cost model for some and fair value for others), which is something we are used to seeing for assets (e.g. IAS16 PPE and IAS 40 Investment Properties give a choice between the cost model and revaluing asset to fair value).


Initial recognition Financial liabilities that will be accounted at amortised cost are initially recognised at the fair value less issue costs i.e. at the net proceeds of issue less the issue costs. Subsequent accounting for financial liabilities at amortised cost The accounting for a financial liability at amortised cost means that the liability’s effective rate of interest is charged as a finance cost to the statement of profit or loss (not the interest paid in cash) and changes in market rates of interest are ignored – the liability is not revalued at the reporting date. In simple terms this means that each year the liability will increase with the finance cost based on the effective rate and decrease by any cash repaid (which will be the coupon rate x the nominal value of the debt). Let us see that applied and explained in a question: Question: Klopp raises finance by issuing $20,000 6% four-year loan notes on the first day of the current accounting period. The loan notes are issued at a discount of 10%, and will be redeemed at a premium of $1,015. The effective rate of interest is 12%. The issue costs were $1,000. Required: Explain and illustrate how the loan is accounted for in the financial statements of Klopp. Answer: Klopp is receiving cash that is obliged to repay so this financial instrument is correctly classified as a financial liability. As is perfectly normal, the liability will be classified and accounted for at amortised cost and thus initially measured at the fair value less the transaction costs. Initial recognition With both a discount on issue and transaction costs the first step is to calculate the initial measurement of the liability. Cash received - the nominal value less the discount on issue ($20,000 x 90%) Less the transaction costs Initial recognition of the financial liability = net proceeds of issue

$18,000 ($1,000) $17,000

Subsequent accounting In then applying amortised cost, the finance cost to be charged to the statement of profit or loss is calculated by applying the effective rate of interest (in this example 12%) to the opening balance of the liability each year. The finance cost will increase the liability. Dr Finance cost in the profit & loss a/c Cr Financial liability in the statement of financial position The actual cash is paid at the end of the reporting period and is calculated by applying the coupon rate (in this example 6%) to the nominal value of the liability (in this example $20,000). The annual cash payment of $1,200 (6% x $20,000 = $1,200) will reduce the liability. Dr Financial liability in the statement of financial position Cr Cash asset in the statement of financial position In the final year there is an additional cash payment of $21,015 (the nominal value of $20,000 plus the premium of $1,015) which extinguishes the remaining balance of the liability. The workings for the liability being accounted for at amortised cost can be summarised and presented as follows. Opening balance

Year 1 Year 2 Year 3 Year 4

$17,000 $17,840 $18,781 $19,835

Plus profit or loss finance charge @ 12% on the opening balance $2,040 $2,141 $2,254 $2,380

Total finance costs

Less the cash paid (6% x 20,000)

($1,200) ($1,200) ($1,200) ($1,200) ($21,015)

Closing balance, being the liability on the statement of financial position $17,840 $18,781 $19,835 Nil


Because the cash paid each year is less than the finance cost, each year the outstanding liability grows and for this reason the finance cost increases year on year as well. The total finance cost charged to income over the period of the loan comprises not only the interest paid, but also the discount on the issue, the premium on redemption and the transaction costs. Interest paid Discount on issue Premium on redemption Issue costs Total finance costs

(4 years x $1,200) = (10% x $20,000) =

$4,800 $2,000 $1,015 $1,000 $8,815

As always, it is important that you are able to explain the accounting treatment, as well as being able to illustrate it and apply it with numbers. You should now be able to do this for financial liabilities at amortised cost! PQ • Tom Clendon delivers online courses for ACCA SBR with FME

Award-winning AAT courses and apprenticeships Flexible learning to suit your lifestyle PQ Magazine February 2020


PQ your career

Supercharge your job search Experts from GAAPweb explain how you can make social media work for you in your job search f you are looking to start the new year by seeking a new role it’s likely you already understand that social media can be both your friend and your enemy when it comes to landing that dream job. From being headhunted on LinkedIn to finding out more about the company culture at your ideal employer, social media can enhance your job search and lead directly to employment. So take a moment to search your name on Google. What do you see in the search results? Your Facebook profile? A questionable photograph? An inappropriate Tweet? Whatever you see is also visible to recruiters and hiring managers, so if there’s anything offensive or divisive associated with your digital footprint, it might be time to clean up your online profiles. So here are some handy tips on how to manage your online profiles and make social media work for you in your job hunt.


Create a strong LinkedIn profile A well-crafted LinkedIn profile is a valuable asset that allows employers to find out a bit more about you after viewing your initial application. Essentially, your LinkedIn profile should act as an ever-evolving extension to your CV, where you can provide further insights into your career and education to date. To get the most out of your LinkedIn profile you should: • Write a succinct, impactful headline such as: “PQ ACCA accountant with four years of experience in practice, looking for a first move into industry.” • Follow this with a more detailed summary that draws attention to your qualifications, skills and experience, as well as the type of jobs you’re looking for. • Follow the pages of companies and accountancy practices that you want to work for, as well as relevant professional bodies and publications, to stay up-to-date with the latest news and vacancies. • Invite colleagues, friends, classmates, recruiters and influential individuals in finance and accountancy to connect with you, thereby developing your professional network. • Join groups for accountants to get involved

with professional discussions and find out about networking events. The GAAPweb group on LinkedIn is a great starting point. • Write updates, share articles and comment on posts to become a trusted voice in the finance and accountancy community. Give your personal profiles a good clean It’s a fact that your personal social media profiles are being viewed by potential employers and that what they see directly impacts your chances of a successful job application. So, before you start searching and applying for jobs you should consider the content that you’re sharing and who you’re sharing it with. What kind of conclusions could an employer draw about your character from looking at the content you create and share? Make sure your profiles are set to private or remove anything that may paint you in a light that could damage your chances of landing an interview. Remember to check not just your own posts, but things that have been shared with you publicly and photos of you that others have published. Create a personal brand Your online profiles should present an organised and coherent personal brand that you can use

to sell yourself to an employer as their ideal next accountant hire. In order to maintain consistency across your social profiles, use the same professional username and email address for all accounts – ideally using your own full name where possible – and a current photograph with your face clearly visible. Consider also including links between each of your accounts, for example putting the URL for your LinkedIn profile into your Twitter bio. Interact with potential employers While social media platforms like Facebook, Twitter and Instagram are not intended primarily for jobseekers, you can still use these personal accounts for discovering opportunities and finding out more about what it’s like to work for your favoured employers. In addition to connecting with potential employers on LinkedIn, follow and ‘like’ their accounts on Twitter, Facebook and wherever else they have a presence. These accounts are a goldmine of information for when you get invited to interview, providing you with fantastic insights into company culture and updates on their latest products and projects. PQ • Thanks to GAAPweb for this article

For the latest issue see NQ magazine is an e-mag for newly qualifieds who want to get ahead All the back issues are available too – type NQ magazine into

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PQ Magazine February 2020

careers PQ

News from the summit PQ reports from the recent ICB Bookkeepers Summit PS I LOVE YOU… Always add a ‘PS’ to your emails was just one top tip from FreeAgent’s Kevin Lord, who was one of the star turns at 2019’s ICB Bookkeeping Summit. He told a packed hall that most emails are more likely to be opened on a mobile rather than a desktop, so “remember, you only see the top three lines on the mobile,” he said. Lord explained that

Life at the Ideal Schools Scot van den Akker is Director of Student Services based in Glasgow. He has worked there for 12 years and is the ICB’s current Tutor of the Year. He has a degree in history. Scot’s band recently played the Rebellion punk weekender in Blackpool. What time does your alarm go off on a work day? 7.15am. What’s the first thing you do when you get to your desk? Make the coffee. What’s on your desk? Clutter. What’s the best thing about where you work? Its city centre location, it’s handy for public transport. Where’s your favourite place to go for lunch? Sadly a large supermarket chain or a packed lunch – no sun-blushed tomato crispbreads for me. What (or who) can you see when you sit at your desk? Brian McVean, our mysteriously popular Director of Operations. Which websites are your favourites and why? Guardian football, Follow Follow,

Uncut magazine, and lots of bands’ and music websites. Which websites do you use for work? AAT, ICB, and SAGE. How many hours a week do you spend in meetings? Very few, most are informal, and arise based on need. What time do you leave the office? 5pm. How do you relax? Listening to and playing music. I also play (allegedly) and watch football. I read a lot. What’s your favourite tipple? Red wine. How often do you take work home with you? I try not to.

What is your favourite TV show? The Sopranos. Summer or winter? Winter. Pub or club? Pub. Who is your hero? Too many to list and it all depends on context: Jesus, Brian Laudrup, Bruce Foxton, Churchill, Wellington, my dad, Mark Hollis… If you had a time machine, where would you go? Medieval London would be cool, but very dangerous. So many ways to die! If you hadn’t chosen accountancy, where might you be right now? In a bedsit still trying to get my indie band a decent gig.

interview, said half of employers in a recent poll. Absence of spelling and punctuation errors will get you through the door even if you aren’t a perfect fit for the role. But four in 10 employers said just a single typo would put them off. Other major no-no’s are having a rude or inappropriate email address, not including references and listing things such as “hanging out with friends” as a hobby.

businesses in 2009 to 4,152 now is being driven by tech start-ups, new clothing lines and make-up brands. According to the research, one in five (19%) of teens would rather be their own boss than work for someone else.

In brief keeping your email from the trash means it has to have the ‘three Rs’: • Relevance – why are you emailing your client? • Reward – what’s in it for them? • Request – what are the next steps? The biggest no-no when it comes to LinkedIn is not to have a professional looking photo! Lord also stressed you need to make the most of the ‘headline’, where you can really sell yourself. There are 220 characters, so use them. When it comes to the ‘education’ section forget about your school days and put in your most relevant experience first. He also wondered how many people had asked the question: “How would you like me to communicate with you?” And if they say WhatsApp, are you ready for that?

Time to ban the booze? Junior lawyers have complained to their firms that they are putting on too many ‘alcohol events’, which can lead to claims of bullying and sexual harassment. A report from the junior division of the Law Society said wine tasting nights should be substituted for pizza-making evenings or team-building ‘escape games’. It said young staff felt “pressure to consume alcohol to show they can fit in with the team, socialise well and secure their future career.”

TOP THREE PODCASTS Michelle Smith of Value Add Business Solutions won the Employer of the Year at the recent ICB Luca Awards. Here she shares some of her favourite podcasts: 1) Guardian Audio – ‘How Britain can help you to get away with stealing millions: a five-step guide podcast’. Michelle says: “This is a real AML eyeopener!” 2) Michael Palmer – ‘The successful bookkeeper’. Michelle says: “Nice help and support for those running a practice.” 3) ACCA podcasts. Michelle says: “They are 15 minutes long, but you need to be selective here.”

The PQ Book Club: books you should read

PQ Magazine February 2020

Make your CV perfect Job candidates with a perfectly written CV will get an

Thinking into Character by Dr Selva Pankaj (Regent Publishing, £10) There’s an abundance of selfimprovement books out there – we’ve all seen them and read the promises on the cover. This book, however, has a different slant – it focuses on you as an individual, on how you operate. By getting you to focus on your character you can tailor your dreams and ambitions to ones that are achievable. This book explains the process through which you get to this point of

Teenage enterprise The number of teenagers setting up their own business has increased by 700% in the past decade, a study by OneFamily suggests. The rise from 491

self-realisation, then sets out the best way for you to make your goals. Of particular interest is the chapter on self-esteem, which “sets the boundaries of individual accomplishment”. As the author explains: “If you have a negative image of yourself, your results will be negative.” Here Dr Pankaj explains how we can change this negative selfesteem by “writing our own script”; by finding our ‘selflimiting beliefs’ we can eradicate them, he argues.

Partner pay cut Average pay of KPMG’s partners fell by £50,000 to £640,000, according to its 2018/19 report. That’s a 7% drop, after pre-tax profits at the firm fell to £307m. Revenue for the year was, however, up 3% to £2.4bn. KPMG has about 160,000 staff in the UK and is the smallest of the Big 4 firms by both annual revenue and profit.

The chapter on breaking through the ‘terror barrier’ also makes for interesting reading, focusing on how to overcome fear of failure. And there’s plenty more food for thought in here, besides, to help you realise your dreams. PQ rating 4/5 Fascinating stuff. • We’ve got three copies of this book to give away – turn to page 30 for details. 29

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SHORT WALK TO RICHES How can you increase a nation’s wealth? New research from life insurer Vitality suggests that if every UK worker walked 22 minutes every day then the economy would be £6.2bn bigger – permanently. This healthy move would lead to longer lives, reduced time off work and greater productivity. And the researchers claim that the upside from this short walk excluded NHS savings.

If you are part of the accountancy profession then you have to expect to come to terms with acronyms – they are everywhere! So how are you with some on the latest abbreviations? It’s time to test yourself! (Answers below) 1) ADIH 2) CAO 3) ELI5 4) D’n’I 5) IFYP 6) ITL 7) SSDD 8) TLDR 9) JSYK 10) Brino ANSWERS: 1) Another day in hell. 2) Chief Algorithms Officer. 3) Explain like I’m five. 4) Diversity and inclusion. 5) I feel your pain. 6) Invited to leave. 7) Same stuff, different day. 8) Too long, didn’t read. 9) Just so you know. 10) Brexit in name only

The year 2012 has been named the ‘Best Year’ of the last decade, says a new AAT survey. Some 37% of those who took the survey named 2012 – the year of the Queen’s Diamond Jubilee and the London Olympics – as their favourite. So, what was the worst year? That went to 2017, the year when the UK had a hung parliament and both Manchester and London were rocked by terror attacks.

YORK STRAIGHT TO LANDFILL CAR FATTER CATS… BAN York is poised to become the first UK city to ban private cars in an effort to combat congestion and pollution. All ‘nonessential’ vehicles journeys into the medieval city centre would end within three years in a plan approved by the council. Only buses and disabled drivers would be exempt.

There is still work to do when it comes to breaking the cycle of ‘fast fashion’ waste. New research from waste charity Wrap has show that more clothing than ever is ending up in landfill sites, as people buy more garments and wear them less, and then fail to recycle them! The amount of clothing placed in waste bins rose by 10% between 2015 and 2017. That’s 336,000 tonnes.

The saga surrounding the death of Quadriga CX’s cryptocurrency exchange founder, Gerald Cotton, looks set to take another turn. Investors are now demanding that the deceased is dug up and a post-mortem examination performed – to check that Cotton really is dead. There is concern because his name is misspelt on the death certificate, and the conspiracy theories are in full swing! EY, the firm handling the bankruptcy, has only managed to find £19m in missing funds. That leaves £90m ‘outstanding’.


FTSE 100 bosses ‘earn’ the UK average salary in just three days, according to data complied by CIPD and High Pay Centre think tank. If those CEOs started back at work on 2 January they would have pocketed £29,559 by 5pm on Monday 6 January! The figures used the average FTSE 100 chief’s pay in 2018 of £3.46m, which adds up to £901.30 an hour. The current UK fulltime annual salary is £29,559, which works out at £14.37 an hour. This all means that the pay ratio between these CEOs and the average worker is 117.


Thinking into character Success and self-fulfilment can be predicted and guaranteed if we do certain things in certain ways, every day, says Dr Selva Pankaj. We have three copies of his book ‘Thinking in Character – a proven methodology for creation of success and self-fulfilment’ to give away this month. His book tries to answer the question: why and how do successful people become successful and have a fulfilled life? To win this book email Head up your email ‘Thinking into Character’ and remember we need your name and address.

It’s cold outside – and in! The Chilly Bottle keeps your water cold for 24 hours, or coffee hot for 12! It’s leak-proof and BPA free, and the bottle is, we are told, “designed for an active urban lifestyle with the perfect balance of distinctive style and unrivalled performance”. PQ has three bottles from Sage to give away. All you need to do is send your name and address to and we will put your name in the hat. Head up the email ‘Chilly Bottle’ and the lucky winners will get their bottle in the post.

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 7 February. The main draw will take place on Monday 10 February 2020.


PQ Magazine February 2020

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PQ magazine, February 2020  

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

PQ magazine, February 2020  

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