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PQ magazine February 2021 / incorporating NQ magazine





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Sexist tax on sanitary products finally abolished


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February 2021


News 04AAT assessments Students told to check with venues about whether they can sit their assessments 05Tampon tax scrapped Campaigners celebrate as government finally scraps VAT on sanitary products 06Big 4 in China Accountancy giants ‘employing hundreds of Chinese communists’ 08Crime levy Economic Crime Levy is unacceptable in its present form, says the AAT 09ICAEW disciplinary Jailed accountant makes national news after assault conviction 10Exam cheats Spike in number of students cheating is ‘driven by online learning’, say universities 12Tech news Amount of e-waste reaching crisis levels Features, etc 14Have your say Perseverance really does pay dividends in the end; fears for ACCA’s March exams; and where’s the ICAEW petition gone? Plus our social media round-up

16PQ of the Year Meet Grant

Thornton’s Bethany L Duffy, our reigning PQ of the Year

18PQ Annual Bumper Quiz

Test your knowledge with our fun quiz – and you could win a great Nespresso Vertuo Plus coffee machine 20The year ahead We spoke to the heads of the UK’s leading accountancy bodies for their thoughts on the state of the profession and what lies ahead in 2021 22LSBU/PQ conference Sign up today for our online conference – we’ve got great speakers lined up, and it’s FREE!

need to cover if you’re going to pass this exam 25Financial statements What is EBITDAC? Top tutor Tom Clendon explains all 26ACCA spotlight ACCA’s Clive Webb is looking forward to an inclusive and diverse 2021 28Budgetary control Phil Dunn explains what you need know when tackling questions on budgeting and budgetary control 29CIMA case study exams How should you approach these exams? Follow our step-by-step guide on the best way of going about it 30ACCA AFM CBEs What you need to know about the new exam set-up

p23 p14 32ACCA PM exam Students

23Monetary theory What is

quantitative easing? We examine this widely used strategy that continues to divide the experts 24AAT PDSY exam Nick Craggs highlights some of the areas you

frequently struggle with the concept of relevant costing. Jo Tuffill is here to help you avoid that fate 33Learning in a pandemic How edtech is playing a vital role in keeping AAT students on track with their studies 34Tax Don’t miss our invaluable guide on self-employed tax payments. As always, Neil Da Costa like to keep it simple


36Studying at home How the

resilience and hard work of students has inspired one tutor in a difficult and emotional year 37Exam technique #1 Timing is everything when it comes to passing acountancy exams 38Exam technique #2 Failed an exam? We’ve all been there, but how can you bounce back from the disappointment? Helena Jones explains all 39Your career #1 How to explain the gaps in your CV when you’re looking for that new job 40Your career #2 How to keep cool in a crisis 41Careers Life at a bookkeeping firm; our Agony Aunt Karen Young tackles another of your career ‘issues’; and our Book Club Review 42Fun stuff – and our fantastic giveaways The columnists Robert Bruce It’s time we all looked forward, not back 6 Prem Sikka Brexit deal still has a way to go 8 Zoe Robinson Goodbye to 2020 – a year like no other 10 Mike Day Pandemic shifts the collective mindset towards digital 12



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PQ news

ROBERT BRUCE Putting the new year into words

Journalists always have a problem between Christmas and New Year. There are fewer hacks around. There are fewer pages for them to fill and most prefer to take time off. But fill them they must. So the old skill of ‘here’s one I prepared earlier’ comes to the fore. And one of the oldest is documenting the words that have come into fashion over the past year. These can be listed and wittily explained. It does what is required. It fills space and keeps readers, hopefully, amused. I have always thought that the opposite should be provided. Journalists should come up with the word that encapsulates the year ahead – the one that should be imperative for readers to print out and stick to their office, now home office, wall as a reminder and encouragement over the months to come. The wintry times of the new year will be, as they used to say in my Glasgow childhood, ‘dreich’. It is a terrific Scottish word. It tells you the weather will suck the life out of you with its repetitive dullness. And a raging pandemic and its lockdowns could do the same. We should turn our backs on dreich. What we have been learning from the pandemic is the scale of the possibilities of change. Within business all manner of new ideas, the ease of their achievement, the pivot of management objectives, have miraculously, it sometimes seems, become possible. The word for the year now unfolding should be ‘adroit’. Robert Bruce is an award-winning writer on accountancy for The Times

‘Big 4 employs hundreds of Chinese communists’ The UK’s Big 4 accountancy firms have employed more than 2,000 members of the Chinese Communist Party (CCP), including at least one partner in every firm, says a report in the Daily Telegraph. It reveals that some 400 KPMG staff had CCP membership in 2016, according to documents seen by journalists at the paper. One partner is even praised by a Chinese website for “making the red gene take root”. Those documents also show EY and Deloitte each employ more than 800 party members, including Deloitte’s deputy director in China. Some senior staff at PwC are

members too, including at least one partner. The Daily Telegraph points out that the CPP demands absolute loyalty from members and is increasingly keen to monitor private firms. Foreign affairs select committee member MP Bob Seeley told the paper: “This is a bizarre and scandalous state of affairs. Putting aside any espionage risk, which is clearly highly serious in itself, surely there are significant questions to be answered about client confidentially.” Read the full story at https:// (subscription required).

Advanced level results out ICAEW November 2020 advanced level results are now out there. They show the case study had a pass rate of 77.6%, Those sitting the Corporate Reporting paper achieved an 80.2% pass rate, and last but not least was Strategic Business Management, with a pass rate of 88.2%. Those sitting just the Corporate Reporting paper seemed to struggle the most at the November sitting.

who failed all three. A total of 3,970 students sat the November 2020 session. Some 5,902 exams were attempted in total with 3,101 students passing all the exams they took. The stats unfortunately also show 669 PQs failed all the exams they took.

Out of the 423 sitters, 255 passed (60.3%) and 39% (168) failed. Students who sat all three papers had a better pass rate than those sitting just ALCR. Some 75.1% of the 433 sitters passed NOVEMBER 2020 ADVANCED PASS RATES all three. Another All candidates First attempt 17% passed two out Case Study 77.6% 80.5% of three, and a further Corporate Reporting 80.2% 86.0% 6% passed at least Strategic Business 88.2% 91.7% one. That left just Management seven part qualifieds

Jo Tuffill joins FME Learn Online family FME Learn Online is going from strength to strength, with yet another member joining its ever-expanding cohort of high-quality expert tutors. Jo Tuffill is now offering online courses for ACCA PM. Sunil Bhandari, speaking on behalf of FME Learn Online, was delighted with the platform’s new addition: “It is fantastic news that Jo Tuffill has come on board. Her business and industry knowledge, coupled with over 15 years of teaching experience, is the perfect

combination to deliver online courses for ACCA PM candidates.” Tuffill was previously with Vale Financial Training. Bhandari said: “Jo is the fourth expert tutor to join FME Learn Online within the last six months, along with Geoff Cordwell (ACCA APM), Sean Purcell (ACCA SBL), and Erin Morton (ACCA AA). We continue to seek to work with tutors who can match the high quality of teaching and dedicated student support provided by me and my colleagues.”

In brief Pap IASB names new chairman Professor Andreas Barckow has been unveiled as the new Chair of the International Accounting Standards Board (IASB). He will take over from Hans Hoogervorst in July 2021. Barckow (pictured) has served as president of the Accounting Standards Committee of Germany. He holds a Diploma and Doctorate degree 6

in Business Administration from the University of Paderborn and is an Honorary Professor at WHU Otto Beisheim School of Management. He will step down from all his present positions once he joins the IASB. Pap Lifetime Skills funding for AAT courses AAT qualifications have been included in the list of almost 400 fully funded courses as part of the Government’s new

Lifetime Skills Guarantee. AAT’s Advanced Diploma in Accounting and its Advanced Certificate in Bookkeeping are both included in the new offer. The fully funded courses will be available to adults aged 24 or over seeking their first Level 3 qualification, and will be open from April 2021. The Level 3 courses are seen as equivalent to a technical certificate or diploma, or two full A-levels. More information on accessing the course offer, including funding guidance for providers, is due to

be published by the Government in early 2021. Pap Budget date announced The Chancellor of the Exchequer, Rishi Sunak, has announced that the government will publish the Budget on Wednesday 3 March 2021. The Budget will set out the next phase of the plan to tackle the virus and protect jobs and will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR). PQ Magazine February 2021

2021 and Beyond: The New Normal for Accounting Around The Globe Back by popular demand, join LSBU Business School and PQ magazine as we host our 4th annual accounting conference on Wednesday 3 February 2021. Hear from experts including Lord Sikka, Professor Richard Murphy, and Hays UK Director Karen Young and leading companies including Xero, Anti Money Laundering Compliance Company – and many more. We’ll explore: • • • • •

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PQ news

Crime levy ‘unacceptable’

PREM SIKKA Brexit deal still has a way to go

The long-awaited 1,246-page Trade and Cooperation Agreement (TCA) between the EU and UK provides the basis for future trading relationships. The TCA enacts trade barriers, reduces UK citizens’ mobility by requiring visas and restricts cultural exchanges among students by withdrawal from the Erasmus programme. A big concern is the end of mutual recognition of professional qualifications. Last February, PM Boris Johnson promised that mutual recognition of UK and EU qualifications would be to be part of the post-Brexit trade negotiations. However, that is not what has been delivered. The effect is that, for the time being, holders of UK professional qualifications will not be able to provide statutory services, such as external audits, to clients in the EU, and vice versa. In principle, those wishing to deliver services to EU customers may need additional EU-approved qualifications. This amounts to a trade barrier. The good news is that the TCA provides a framework for securing recognition without the need for additional qualifications, but with agreements on a profession-by-profession basis with each country. The conclusion is that Brexit has not yet been done. Accountancy bodies are already on the job as the value of their qualification depends on portability and mutual recognition. The UK government has promised to provide guidance to help them secure recognition. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

The new £100 million Economic Crime Levy will burden UK accountants and their clients with ‘unacceptable’ fees, says the AAT. The government is proposing to raise around £100 million a year from organisations regulated for Anti-Money Laundering (AML) purposes – this includes accountants, tax advisers, insolvency practitioners, solicitors, and conveyancers. This new levy is in addition to AML fees already paid by 22 professional bodies to the Office

for Professional Body Anti-Money Laundering Supervision (OPBAS), which was established in 2018. AAT has stressed its support for tackling money laundering and economic crime, but opposes the idea of an annual £100m levy. It is worried that there appears to be disagreement about how best to collect the levy. Most professional bodies believe the best way to do this is through a single public agent – such as HMRC or OPBAS. However, the government appears to favour imposing responsibility

for collection on the professional bodies. Phil Hall (pictured), Head of Public Affairs & Public Policy, AAT, said: “An additional £100m of costs is simply unacceptable in the current climate, which sees businesses large and small having to contend with both the effects of the pandemic and Brexit. “There is also a disturbing lack of clarity from the Government about how it would calculate and collect such a levy fairly and reasonably, making this highly contentious and, AAT would argue, grossly unfair.”

Jenrick to tackle Notts council failings New measures to address the serious failures at Nottingham City Council, have been announced by Local Government Secretary Robert Jenrick. This follows a non-statutory review into the council’s finances in November last year. An Improvement and Assurance Board, made up of experts in governance and finance, appointed by the department, will be set up to help the council deliver the report’s recommendations on governance

and company ownership. The council must put forward their three-year recovery plan by

the end of January 2021. This will set out how they will improve their financial position and review their investments. They must submit progress reports to the department on a quarterly basis. The measures come in response to a rapid non-statutory review commissioned in November to examine serious governance and risk management issues, including those associated with the council’s private energy company Robin Hood Energy.

BDO has change of heart over Covid cash When BDO announced it was paying its partners £518,000 each, it thought it would be fine to keep the £4 million it had been given by the government to pay for furloughed staff. Well, the partners had taken a 14% hit on their pay – they were paid an average of £602,000 last year. The fall in salary is almost exactly in line with the 15% drop

in BDO’s profits. Managing partner Paul England had said the partners had debated internally about the morality of accepting taxpayers’ money, and felt it was justified because it helped preserve jobs. He said: “We agree there’s a moral debate, but we think we have more of a responsibility to invest in jobs.” That view didn’t last very long and a few days later BDO agreed to

the tax would raise £36 billion. The 5% WFH tax would equate to around £7 a day based on a salary of £35,000. Economist Luke Templeman said: “For years we have needed a tax on remote workers. Covid has just made it obvious.”

to account for the VAT paid on products sold on their platforms by third party sellers by deducting the tax at source. There were genuine worries that thousands of sellers were avoiding the tax by using fake VAT numbers and shell companies to sell their products in effect taxfree. Analysts have said the tax rule change has had an instant effect, with many items now 20% more expensive! HMRC had estimated that the online fraud could be losing the taxpayer over £1 billion a year.

pay back the money. The furlough money had been used to furlough first-year recruits (450 of them), and around 250 members of staff. BDO’s bigger rivals PwC and Deloitte took the decision early on not to take furlough monies. Mazars, a top 10 accountancy firm, then followed suit and confirmed it has repaid £1.1 million it received from the government.

Taxwatch Pap Time for a WFH tax? Those working from home should be taxed to help support those whose jobs are under threat, says Deutsche Bank in a new report. Economists at the bank have said an additional tax of 5% on workers’ salaries should be added to those who opt to WFH. Such a tax in the UK would generate a pot of £6.9 billion a year, which could be used to pay low-income workers and/or those under threat of redundancy with a grant of £2,000. In the US 8

Pap Amazon prices rise The cost of Chinese products sold on eBay and Amazon have risen following the introduction of tougher tax rules. From 1 January all online marketplaces have

Pap Taxing times at Christmas More than 2,700 customers filed their self-assessment tax return on Christmas Day, according to the latest stats from HMRC. The peak time for completing tax returns was 2pm to 2.59pm, with more than 200 customers pressing send on their online form. The self-assessment deadline is 31 January 2021, and HMRC has not heeded the call for it to extend the deadline for tax returns by the accountancy bodies. PQ Magazine February 2021

news PQ

Assault makes headlines ICB’s LUCA winners “We want Garry” came the chant from the chatroom as attendees eagerly awaited the start of the first-ever virtual ICB LUCA awards. And it was ICB’s Garry Carter and Ami Copeland who announced the winners ‘Hollywood-style’ So who walked away with the prizes? Here are just some winners: • Large Training Provider of the Year 2020: Training Link. • Small Training Provider of the Year 2020: Premier Training. • Apprenticeship Training Provider of the Year 2020: MBKB Training. • Student of the Year 2020: Elizabeth Carter (Training Link). • Apprentice of the Year 2020: Maddison Cooper, employed by Whitley Stimpson Ltd (Dudley College of Technology).

PQ Magazine February 2021

Accountant James Phipps may have been hoping his ‘severe reprimand’ and £5,060 bill for costs, handed out on 16 September by the ICAEW’s disciplinary committee tribunal, would be the end of his ‘punishment’. Then, in early December, the ICAEW published its full report of disciplinary orders and regulatory decisions, and Phipps’ assault on ‘Ms X’ was picked up by the national daily newspapers, including The Times and the Daily Mail. The Times ran the headline: “Accountant groped women then struck her with a book”. A well-established and growing accountancy practice is seeking to recruit an AAT part qualified trainee accountant to join their very friendly team based in Wokingham. The role is suitable for a part AAT or ACCA part qualified accountant who wishes to progress to full qualification. Full study support will be provided. Key elements of the AAT part qualified trainee accountant role

The former PwC accountant (they let him go) was jailed for assault in the US after drunkenly groping a sleeping woman onboard a British Airways flight, before throwing a hardback book at her when she rejected his advances. Phipps admitted he had been drinking heavily, and despite claiming he had no recollection of the attack pleaded guilty in court. He received a sentence of 10 days in prison and 10 days’ house arrest. Interestingly, it was


are: • Bookkeeping and VAT returns. • Prepare and assist with management accounts. • Assistance in the preparation of year end accounts for limited companies and sole traders. • Balance sheet reconciliations. • Providing support to clients.

PwC that reported his conviction to the ICAEW. Phipps is a lucky man, as current ICAEW guidance says the starting point for a criminal conviction resulting in a term of imprisonment is exclusion. The committee, however, took the respondent’s good character into account, and the fact that for his current employment he needs to be a member of the ICAEW. Check out the full report at Ideally with at least one year’s practice experience, you will have the potential to manage your own small portfolio of clients. Experience of Sage and or Quickbooks is advantageous. In return you will receive a salary of between £22k-£25k + study package. Applications close on Thursday 21 January. For more go to https://


PQ news

ZOE ROBINSON A year in the rear-view mirror

The new year often starts with a look back, so here’s some reflections on 2020, a year like no other. In January 2020, the focus for my column was the key messages coming out of Davos, followed in February by ‘T-shaped people’. These are individuals who have high levels of expertise in a particular area but also broader generic attributes. No mention of Covid as yet, but I wonder if the T-shaped Chris Whitty, the chief medical officer, ever thought his ability to communicate might be more important than his knowledge of infectious diseases? Next slide please! March saw everything change, we had a national lockdown, with exams cancelled. Staying on track, figuring out how to learn in an online environment and remaining positive became key messages in the next few months. This was a very difficult time for students who were forced to work and study from home. In time the professional bodies were able to get the exams back on track and we returned to some type of normality, much of it only made possible by technology. But sitting at a computer screen for hours on end brought its own problems and the November column reminded students to keep talking to friends and family to help with mental wellbeing. Maintaining that mental wellbeing is going to be just as important in the weeks ahead. While winter may be here, spring is coming, so here’s hoping we see some shoots of hope emerging soon. Zoe Robinson is Learning and Programme Director at Kaplan Financial

Cheating ‘a real problem’ Universities across the globe are reporting a spike in student cheating during the pandemic, driven by online learning. It has led, reports the Times Higher Education (THE), to calls for a fundamental rethinking of what is being taught and assessed. The rapid switch to virtual environments added to student stress and vastly increased their opportunities to use online ‘assistance’. Many didn’t feel comfortable with online classes, or have safe, reliable environments in which to study, and they faced lecturers who may have been even more hostile to the format. The University of Waterloo in Canada said cheating was up 146% in a year, with 1,340 reported incidents. In Australia,

they can use the internet to find answers. THE said in the UK the number of essay mills has grown to 904. The rise in cheating means some universities are looking to change the way they assess students. Oral assessments via Zoom is one method being put forward.

Big no to Audit Commission 2.0 Sir Tony Redmond’s proposal for the establishment of a new independent regulator for local audit – the Office of Local Audit and Regulation (OLAR) – seems to have been put on the back burner by the Ministry of Housing, Communities & Local Government. It stressed the idea of the Audit Commission 2.0 goes against

the government’s long-standing intention not to create new arm’slength bodies. The ministry said the creation of a new overarching body would mark a significant departure from the 2014 Act, adding: “This department remains committed to a locally-led audit regime which enables genuine local accountability

by residents and taxpayers. We do not wish to recreate the costly, bureaucratic and over-centralised Audit Commission.” CIPFA is worried that the government’s response “largely kicks the can down the road on one of the more pressing concerns for the sector – the absence of strong system leadership”.

And the winners are… CIMA has unveiled the winners of its CIMA Excellence Awards 2020. Among those victorious on the day was Tuhan Supamanage ‘Student of the Year’. Studying with Wisdom Business Academy, he became exam qualified aged just 19. Tuhan averaged 125 marks across each of the papers, and is heavily involved in the CIMA

Headline PwC results PwC UK finalised staff bonus and partner distribution arrangements just in time for Christmas! The Big 4 firm has released the financial results for the year ended 30 June 2020, but the full financial statements, people data and balanced scorecard for the year will be published in January. The headlines show revenue increased to June by 3% to £4.38 billion. Profit slipped by 8% to £938 million, and the average distributable profit per partner was down 10% to £685,000 as the partnership prioritised protecting jobs and salaries and paying staff bonuses. PwC’s UK chairman,


the Queensland University of Technology said in September that test-related cheating had quadrupled. At the University of Houston rates of cheating doubled. A worry is many students don’t see using the internet to get their answers as cheating. They have grown up with the expectation

student society. PQ’s current Accountancy College of the Year, HTFT, was one of those recognised in the registered tuition provider awards. There were also lots of other winners. Among them was Nadeeka Withanage, London South Bank University, who picked up the Global Champion of the Campus

Kevin Ellis, said since September the firm has seen a steady pickup in demand despite the uncertainties of Covid-19 and Brexit. The firm’s total tax contribution in the UK was £1.27 billion, and consisted of £798 million in taxes collected and £476 million in taxes borne. The effective UK tax rate for partners was 48%. EY sees fee income jump by 5% EY grew its UK business in FY20 by 5% and it hired more than 1,000 graduates and apprentices in September 2020, according to its latest annual report. Fee income rose to £2.6 billion in the financial year ending 3 July 2020, up from £2.5 billion in the previous year. While revenue in tax grew by 8.1% and in assurance by 7.8%, the consultancy practice

Culture award. Other winners were Nadia Gulko from the University of Lincoln, Fiona Dearing of Manchester Met University, and Matthew Walsh of the University of Sussex.

saw a decline on the previous year of 4.7%. EY hired over 3,000 people in the UK over the year, with 30% based outside London. As of 3 October 2020 EY’s UK partnership stood at 23% female and 12% ethnic minority (3% are black partners). Some 64% of positions on EY’s UK LLP board are held by women. In addition, 43% of EY’s student intake in September 2020 were female and 41% were from a black or ethnic minority background, up from 38% and 39% respectively last year. The average profit per partner decreased from £679,000 in FY19 to £667,000 in FY20. In addition, 10% of the partner profit distributions were retained due to Covid-19 uncertainty. EY’s total tax contribution for 2020 was more than £975 million. PQ Magazine February 2021

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PQ tech news

E-waste ‘is now a crisis’

MIKE DAY A shift in mindset towards digital

There’s no doubt that the pandemic has accelerated the speed and frequency at which businesses have embraced digital technologies. Tech investments or adoption that used to take years now only take a couple of months – even a couple of weeks in some instances. Before Covid-19 hit, 32% of the thousand-plus small businesses that Forrester Consulting surveyed reported using cloud solutions. Merely six months later, that number had increased to 49%. And small businesses are adapting their practices beyond just cloud accounting and accepting digital payments. They’re investing more in online marketing and ad spending, and using more digital services to improve their operation and increase their agility to be more resilient in their operations. They’ve started creating e-invoices and embracing valueadded services like spending analytics and how they can better manage their expenses going forward. Many are also recording and submitting their tax digitally. It’s clear that the trend towards cloud technology has accelerated, and this acceleration is going to continue post-Covid. Small firms that are open to change are embracing this trend, and are supporting their customers’ buying preferences through this disruption. They are the ones that are thriving. If you’d like to learn more about Covid and this digital adoption then head over to our website – go to Mike Day, Director, UK Education Sector, Xero

The Covid-19 lockdowns have led to a UK tech sales boom but concerns are rising over the amount of e-waste being produced. Last year, the Royal Society of Chemistry discovered that there could be 40 million or more unused devices being hoarded in drawers and cupboards around the UK. It has now found that this problem is growing, with 12.8% of the 2,000 UK residents surveyed saying they had acquired new IT equipment to enable them to work from home during the pandemic. Of these, nearly as many said they had put redundant tech in the bin (10.8%) as said they recycled it (12.8%). A further 10% said they had a stockpile of old IT equipment they didn’t need as a result of changing their working habits. Professor Tom Welton, president of the Royal Society of Chemistry, said: “Clearly the coronavirus

pandemic caused a rapid change to our work and lifestyle patterns, but a significant unintended consequence we are now facing is a rapid increase to the UK’s already growing e-waste crisis. That nearly as many people are binning their old tech as recycling it is a huge concern. “We increasingly think about the sustainability of other items around the home, such as plastics and cardboard packaging. If we’re to have sustainable technology, we need to start thinking in the same way about our old gadgets, or we

More drones in the sky New drone regulations came into force in early January 2021, ahead of Europe adopting the measures. The Civil Aviation Authority rules are expected to increase the number of drone users as the distinction between recreational and commercial applications has been removed. Risk categories of high, medium

and low now apply to drones, and all users must register with the CAA. Low risk drones will have operational limitations and will not need authorisation for flights. Authorisation will be needed for medium-risk drones, and high-risk drones have to follow aviation rules. Extra safety precautions have also been added to the rules. That

risk running out of the elements we need to produce these items while continuing to exacerbate the environmental damage caused by the consumer tech industry.” • As of 1 January 2021, retailers distributing electrical and electronic equipment are now required to offer in-store take-back of items equivalent to those sold to consumers in-store. In addition, retailers with greater than 400sq m of floor space will be required to accept all items of very small Waste Electrical and Electronic Equipment (WEEE) regardless of whether customers are replacing the item by buying new products or not. Very small WEEE is defined as items with dimensions no greater than 25cm on any side/edge. means unless a drone is less than 250g users must keep the craft at least 490 feet horizontally away from industrial, residential, parks, and built-up areas. • You must have two IDs in place before flying most drones outdoors in the UK. Most people get both a flyer ID and operator ID at the same time. The flyer ID shows you’ve passed a basic flying test and know how to fly safely and legally.

Facebook hits £1 billion in ad revenue Facebook UK has reported profit before tax of £115.7 million for the year ended 31 December 2019, that’s up on 2018’s £96.6 million. Its ‘gross amounts from advertisers and others’ were £2.2 billion during the year, which resulted it said in

recognised revenue of £1.1 billion. The company also incurred £521 million in research, development and engineering expenses during the year. The current directors of Facebook UK Limited are David

William Kling and Susan Jennifer Simone Taylor, who note their country of residence as the United States. Check out Facebook UK’s annual report and accounts at https://

vacancies have climbed by 50% since July 2020, and now account for one in 10 job listings.

Pap Zooming ahead The video conference service Zoom was the most popular free download from the Apple app store in 2020. It was closely followed by the NHS Covid-19 app. In third place came TikTok. WhatsApp and Instagram were also among the top 10. When it came to paid apps, top of the list was the Driving Theory Test and Official DVSA Theory Test Kit.

CCTV cameras spying on Britons, new research reveals. Local authorities have the most, with over 77,000 cameras in operation – that’s a 3% year-on-year rise. Transport for London has another 16,000-plus camera focusing in on customers. A recent study has estimated that the UK now has a whopping 5.2 million CCTV cameras – that’s one for every 13 of the population. That is almost as many as in China, which has one for every 10 people. Civil liberties campaigners aren’t happy.

Tech briefs Pap Record investment British tech firms have raised a record $15 billion in 2020, as investors looked to put their money into one of the few sectors to perform strongly during the pandemic. This figure exceeds the $14.8 billion raised in 2019, and is more than the combined money raised by German and French companies. Among those receiving funding were challenger bank Revolut, digital insurer Ki and utility challenger Octopus Energy. It also means that technology job 12

Pap SolarWinds cyber-attack Deloitte was among 18,000 SolarWinds customers who were targeted and compromised through a cyber-attack using a backdoor to SolarWinds’ Orion network monitoring platform, says SolarWinds President Brad Smith. The ultimate target was US government departments and other critical institutions.

Pap We’re watching you Public bodies have 100,000

PQ Magazine February 2021

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HAVE YOUR SAY Try and try again I enjoyed your Editor's column in your last issue on the importance of perseverance, as it reminded me of me! I studied ACCA and found the exams tough, especially towards the end of the qualification. I’d pretty much breezed through school and sixth form, and thought I’d have no problem with accountancy exams. Boy, was I wrong about that! The start was OK, but I had real trouble with a couple of the later papers. In fact, I failed one of them FIVE times (I won’t mention which one for fear of scaring your readers). It was a real shock. I nearly jacked it all in as it became very disheartening.

It was a heart-to-heart with a former tutor that changed my attitude. She explained that I needed a fresh approach, to

tackle using different techniques that I’d not previously thought of using (specifically, around making every minute in the exam hall count, and especially about answering the question asked). This renewed focus paid dividends and I never looked back. So a couple of points for your readers who might be despairing of exam failure. The first is try to look at subjects you struggle with in with a fresh pair of eyes. The second point is this: the feeling of elation you get when you finally pass that last paper really can’t be described. Personally, I felt on top of the world for months – and relieved it was all over. But it really was worth it in the end. Name and email address supplied

Our star letter writer wins a fantastic ‘I lovePQ’ mug! A March promise Can ACCA please promise us that the March exams won’t have more outages? You reported over the first two days of the December sitting some 450 remote invigilated sitters were affected. But I have read problems were still happening on the Friday of that first week! There appears to have been big problems in September and December last year – I don’t think 450 sitters having their exam disrupted is an insignificant amount. I will be sitting AA in March, on the Monday in an exam hall. What do you think the chances are that everything will run smoothly? With the UK Prime Minister Boris Johnson now talking about things not getting better until April I have started to worry about being moved to RI. I am trying to be sympathetic about the new normal but can the ACCA promise normal exams come March please? Name and email address supplied

Where’s the petition? Hey PQ, where has that petition about reversing the ICAEW’s decision to stop printing hard copy study manuals gone? I clicked on the link in your story and all I got was the message ‘This

Sorted, thanks to page can’t be found’. So, that got me thinking – did the ACA student take it down or were they told to take it down by the ICAEW? I don’t understand why the ICAEW doesn’t test the market properly – offer students the choice of both and see where the true

demand is. That way the customer chooses. It’s a true test of whether students are ready to go totally digital. I now have to read everything online, so it’s quite nice to have something that not in the cloud! Name and email address supplied

social media ROUND-UP PQ magazine editor Graham Hambly has been a ‘busy bee’ in the podcast arena recently. On 15 December, he sat down for a chat with First Intuition’s Ben Bullman and David Malthouse. You can check this one out, and other great podcasts, at https://tinyurl. com/y6ctq72z. The FI Podcast series brings you all the latest news and insights on exams and much more from the accountancy sector. You can listen to them while you are running, in the bath, or as one student cheekily said, “to help you sleep”! The editor has also been chatting to the ACCA’s Paul Kirkwoood, and you should be able to hear that one in midJanuary. That’s just in time for the ACCA December results, which are released on 18 January. And, of course, PQ magazine’s social media team will go into overdrive – the pass rates will be tweeted out on the day, so make sure you are signed up to @PQmagazine. There are also several podcasts available through Kaplan. In one Graham talks to Kaplan Head of learning Stuart Pedley-Smith about how to pass those accountancy exams. Pedley-Smith reveals that the optimum period of study to pass a professional exam – it is 12 weeks! If you want to increase your chances of passing then you need to sit the exam two to three weeks after you finish your course. He also answers the age-old question – does cramming work? In the second podcast he talks to John Glover about the thorny issue of phones in the classroom. He wants you to turn them off! Check them out (they are Kaplan Podcast episode 1 and 2) at

PQ Magazine PO Box 75983, London E11 9GS | Phone: 07765 386489 | 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 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 2021






PQ PQ awards 2021

BECOUNTED! Make your CV shine with a PQ shortlisting. We need your nominations for the only worthwhile PQ awards around


ime may seem like it is standing still at the moment, but we need your nominations for the PQ magazine awards 2021. There are lots of bright and shiny ‘PQs’ up for grabs as always – so come on, which has your name printed on it? Our awards can be all about you (you can nominate yourself), but they are also your chance to nominate someone you think never gets the plaudits they deserve. Maybe it’s the whole accountancy team or your training/ manager mentor, or it could be

your tutor or a fellow PQ. Now is not the time to be shy – the PQ awards are a unique opportunity to celebrate all that’s good about the accountancy profession. And we all know how much we could do with a bit of cheering up. Just put together 250 wise words on why you believe your nominee should win, plus any supporting evidence you want to supply. When entering please make it really clear what category you are entering and please remember less is more. Our judges don’t

want to see 500 words when we only asked for 250 – they can be sticklers for the rules! Remember, it’s the supporting material where you can provide more evidence for your entry. So what are you waiting for? Just download the nomination form at You need to click on the ‘pq awards’ bar at the top of the home page and download the form. When you are ready email your entry to awards@ If you want to post it to us then send to: PQ magazine, PO Box 75983, London E11 9GS. The deadline for entries is Friday 19 March – and remember, you can’t win it if you aren’t in it!



2019 winner: Zane Salmon with ICB’s Ami Copeland


Our reigning Apprentice of the Year is Charlie Atkins. He is proof-positive that if you don’t succeed the first time then try and try again. He was shortlisted in the 2019 awards, but came out our winner in 2020. AAT PQ Charlie was heavily involved in negotiating £85,000 worth of savings over three years on one contract for his employer, who said he was “a great example for all budding accountants, especially those who struggled with nerves or confidence”.





PQ Magazine February 2021

PQ awards 2021 PQ

Meet PQ magazine’s

PQ of the Year Grant Thornton’s Bethany L Duffy is our reigning PQ of the Year. See what makes an award winner! Why accountancy and why AAT? I always knew that I wanted to get into the workplace rather than go to university and after exploring various career options, from sports physiotherapy to teaching, I decided that accountancy suited my skillset, focusing on maths, communication and IT. I strongly believe that AAT teaches you the fundamentals of accounting and provides solid foundations to build on throughout your career. Like many studying professionals you have a full-time job. How do you find balancing work/ life? It’s become harder in the last year as, like many, we have switched to home working and so my computer is constantly at the dining room table available to just switch on. I have found exercise to be key to maintaining some of this balance – I always walk our dog (Lola, a Shih Tzu) in the morning and at lunch to get some fresh air.

How are you getting along? How far have you got with your studies? Shortly after returning from my dream holiday in Australia last February I sat my AAT Level 4 Professional Synoptic exam and completed my Portfolio as part of the End Point Assessment for my apprenticeship. I passed both and achieved a Distinction overall, which is something I am really proud of. I’ve recently started on my chartered accountancy journey studying for ACA. So how have you found the exams/assessments? Any tips for studying? There’s no doubt that exams are stressful and so it was important that I was well prepared. My study routine generally involves going through the workbook provided by the tuition provider and adding highlighting and additional notes from the textbook. I would then make revision notes of the key points and add visual prompts (e.g. diagrams) and then finally complete questions, questions and more questions. What are your favourite/less favourite accountancy subjects and why? My favourite accountancy exam units are

probably the numbers based ones, such as financial reporting, where there is a right/wrong answer – I get a sense of achievement when I get the right answer on a question I initially found hard (or the balance sheet balances!). My least favourite would be the opposite, so the more wordy units.

Up close and personal Job title: Public Sector Audit Associate. First job: Trampolining coach. What are you currently reading: My Story So Far, Paula Radcliffe’s autobiography. Latest music download/CD: I’m much more of a Magic radio type of girl, but I did download Incredible by Gary Barlow at Christmas. Favourite lockdown TV show: Wanted Down Under (Australia again!). When was the last time you laughed out loud? When me and my Mum were doing a Joe Wicks workout and our dog Lola tried to join in – she likes the shuttle runs but struggles with press-ups! How do you chill out? Running or baking. Amazon Prime or Netflix? Amazon Prime, because of the films and next day delivery. What is your claim to fame? I was once the star of a Carlisle Racecourse advertisement campaign, which featured me on the back of a bus. What is the first thing you will do when Covid-19 is over? Hug my Nana and Granda, closely followed by a parkrun. PQ Magazine February 2021

Tell us a bit more about your current role at Grant Thornton. I am an Associate within the Public Sector Audit department. As part of this, I work within teams auditing the accounts of numerous bodies including the NHS, local authorities, police, fire and National Parks. I love my job at Grant Thornton and the people I work with. Everyone wants you to grow as a person, develop your skills and there is a real culture of support throughout the firm. Where do you see yourself in five years’ time? I would hope to have passed my final ACA exam to become a fully qualified chartered accountant and keep taking on more responsibility within the audit team. Also, Grant Thornton provide opportunities to complete a secondment to another department or abroad, and it’s a dream of mine to complete a secondment in Australia. What has it been like being our PQ of the Year? Were you surprised to be a winner? I was honoured to be shortlisted and so to win was simply amazing! It’s led to numerous interviews and magazine appearances, but ultimately it has just been lovely to share my story of being a school leaver in the profession and hopefully it will inspire others to pursue a career through this route. What’s the best piece of advice you have ever been given? ‘Positive mind, positive life’. It’s all about choosing your attitude and your perception of situations. The more positive you are, the more positive the world will seem. 17

PQ annual quiz

PQ Bumper Quiz Here it is, our much-loved annual bumper quiz. A big thanks to all our sponsors AAT, ACCA, CIMA, CIPFA and ICAEW. We are giving three lucky readers the chance to win a Nepresso Vertuo Plus Coffee Machine. It’s the perfect companion in lockdown! The UK’s Margaret Keenan became the first person in the world to receive the Pfizer jab. How old was she when she received it?


Wildfires ravaged the US State of California in September last year. What sort of party was blamed for one which spread over 7,000 acres?


SPORT Lewis Hamilton was voted BBC Sports Personality of the Year 2020. But who came second?


Who was named men’s player of the year at the FIFA ‘The Best’ awards ceremony in Zurich at the end of 2020?


As of September 2020, who were the leading men’s international Twenty20 cricket team, with 275 ranking points?

13 IN THE NEWS Whose statue was toppled in Bristol as part of the Black Lives Matter protests?

1 2 3

How old is the new US President Joe Biden?

Downing Street resident Larry the Cat has a new dog to cope with at Number 10. What is the name of Boris Johnson’s Jack Russell?

Which country won the 2020 Women’s Six Nations with a game to spare?

14 15 16

Who are the current holders of the Carnegie Challenge Cup? Who won the Super Bowl in 2020?

Who won his sixth World Snooker title at the Crucible in 2020?

17 18

The 2020 Grand National race was cancelled. But which horse won the virtual race televised instead? Name the tennis player who won the Wimbledon Men’s singles title seven times in eight years between 1993 and the year 2000?


The Collins Dictionary People have named their word for 2020, what was it?

4 5 6 7

How much is to send a first-class letter in the UK now?

What was the name of the castle a certain Mr Cummings drove to in lockdown?

Which Premier League football player publicly pressured the government to pay for children’s meals in the holidays?

To the nearest million how much money did Captain Tom raise for NHS charities by walking in his garden?


Thanks to our sponsors


PQ Magazine February 2021

annual quiz PQ Whose fall from the roof ended his reign of terror in Coronation Street?

26 27

Anya Taylor-Joy’s performance as Beth Harmon was the surprise hit of the lockdown. What was the show called? What was the name of Sherlock Holmes’ landlady at 221b Baker Street?

28 29

An accountancy graduate at Edinburgh University won the Great British Bake Off on Channel 4. What was his name (it was in PQ!)? Who walked off with 2020 Mercury prize?


ACCOUNTANCY The name of Big 4 firm PWC is taken from the founders’ surnames. What are

31 they?

Who plays the accountant in the hit 2016 film by the same name?

Which Sky football pundit has now turned his talent to commentary on E-Sports Call of Duty?


ENTERTAINMENT Who won ‘I’m a Celebrity’ on ITV this year?

21 22 23 24 25

What links actors Jon Pertwee, Matt Smith and Jodie Whittaker? In what year was the first episode of the Simpsons shown on US TV? Who plays Mrs Thatcher in the Crown TV series? What was the Christmas 2020 No1?

32 33 34

The Chancellor Rishi Sunak has named the date of his next Budget, when is it?

What is the name of the Franciscan friar who is credited for inventing bookkeeping? It is also the name of the ICB awards. The chair of the International Accounting Standards Board is stepping down in July this year. Who is his replacement (Clue: it’s in a recent PQ magazine)?


In what film does Max Bialystock say: “You’re an accountant! You’re a noble profession! The word ‘count’ is part of the title!”


The Financial Reporting Council is to be replaced (eventually!) by a new regulator, what will its new name be?


What is the deadline for entry to the PQ magazine awards this year?

38 39

Which accountancy firm decided to give back £4 million of government furlough cash after a backlash? ACCA recently said it has commitment the organisation to the UN’s Sustainable Development Goals. But how many are there?


GENERAL Listed alphabetically, what’s the last US state?

41 42

Who on 5 March 1946 used the phrase ‘Iron Curtain’ to describe the division of Europe after the second world war? What year was the very first model of the iPhone released?

43 44 45 46 47 48 49

How many hearts does an octopus have? Who designed the Millennium Dome, now the O2? What is the largest city inside the Arctic Circle?

Who was the US president immediately preceding Barak Obama? The famous city of Timbuktu is in which African country?

Which city served as the capital of West Germany from 1949 until Germany’s re-unification in 1990? If you travel due east from New York city in which country do you make

50 landfall?

Send your answers to the editor: Put ‘Quiz’ in the header. Closing date for entry is Monday 22 February. PQ Magazine February 2021


PQ the year ahead

What’s ahead in 2021? We asked the bodies’ chiefs for their thoughts on what lies ahead in 2021. Here’s what they told us about audit, business, and how accountants can help push UK plc forward


IT’S NOT JUST ABOUT THE NUMBERS Covid-19 has had far-reaching consequences, not only on our health and the economy but also on our way of life. We have all experienced downturns in the past, but these were cyclical, not a sudden, widespread global shutdown. For many chartered accountants working in the business and finance sector, 2020 turned out to be a very busy year. The accountant as an adviser was as much swept up in the lockdown storm as any other business. We needed to introduce new ways of working and react to the challenges that coronavirus brought. We have demonstrated that accountancy is adaptable and agile, and the trusted and informed role that accountants play in a financial crisis has come to the fore. Chartered accountants are conduits for information and translation, not only for understanding what is available and how to access it, but also in how to apply that knowledge to help owners and managers work through their options. Accountants are uniquely placed to have an overview of any business because they get to see all the moving parts and can translate them into financial implications. Whether as a CEO, CFO, financial controller or an adviser, accountants understand the business levers that need to be pulled. They can say: “This is the outcome of doing X and Y, this is the impact on your cashflow, this is the gap, and these are the options to bridge the gap.” But it is not just about the numbers. Now is a moment when we really need accountants who deeply care about their moral responsibility to others and the sustainability of businesses. • J Bruce Cartwright is CEO of ICAS

We’ve faced our share of challenges this year – some anticipated and others unexpected. As an organisation, CIPFA has been able to respond to these issues in ways that showed both innovation and resolve. I’m proud of what we all have accomplished during these unprecedented times. Public sector organisations were able to adapt and continue providing services to the most vulnerable members of our communities, even with limited resources and no foreseeable end to the pandemic. CIPFA had a successful 2020, with a swift transition to virtual learning, professional development and events. We hosted our first-ever virtual Public Finance Live annual conference, bringing together current and future public finance professionals from across the sector to explore options for what comes next. We are set to continue our programme of virtual events and podcasts and have important changes on the horizon for students. We have developed a new apprenticeship focused on counter fraud in the public sector – particularly relevant for a post-Covid world. We’re also in the process of revamping our curriculum to make it fit for the future and best prepare our students for what tomorrow may bring. Stay tuned for updates on this. We would like to express our gratitude to the hard-working students who have committed to making the world a better place, even through all the darkness and uncertainty we faced this year. This year will without a doubt bring new challenges our way, but also new opportunities to innovate and improve quality of life for those who need it most. Regardless of the battles fought this year, the future really does look bright. • Rob Whiteman is CEO of CIPFA

It’s what we call

career flexibility Get the business qualification that takes you where you want to go. Register now at


PQ Magazine February 2021

the year ahead PQ



This time last year I said audit reform would be the priority for the accountancy sector in 2020, but what none of us saw coming was the year we have experienced. And so while we want to see the restoration of public trust in audit, the coronavirus pandemic meant that reform, understandably, took something of a backseat last year. Nevertheless, the future of audit and its wider role as a force for good in the economy is vital. Our vision for a modern audit profession is captured in our Audit Manifesto, which we launched in the autumn with the five principles of purpose, identity, community, education and mindset, which we want to see at the core of reforms. For the economy, the main theme for 2021 is surely one of recovery; the mass rollout of a vaccine and the Brexit trade deal provide a foundation to build on in the March Budget. This statement will be a key moment for businesses, and we hope the government will use the Budget to set out its plans to consolidate the future of the UK’s economy by addressing the public finances, investing in reskilling for green jobs with a future, and ‘levelling up’ the regions. Also critical to our long-term economic stability is our new relationship with the EU. The deal was very welcome, and I am sure British business breathed a sigh of relief to have certainty around our future trading relationship with our neighbours. We remain concerned that the provisional agreement has little to say about services, which are of such vital importance to the UK economy, and this must be addressed in the near future. In particular, we hope that the recognition which the agreement contains for UK solicitors, barristers and advocates will soon be extended to other professions. Finally on the agenda is climate change and sustainability, the single most important challenge the world faces today. Businesses have a moral and environmental duty to lead by example, and economic prosperity depends on a thriving planet. The COP26 Summit, to be held in the UK this year, will set the tone for this. 2021 is going to be an important year. Let’s make the most of it. • Michael Izza, ICAEW Chief Executive

There’s no doubt 2020 has been one of the toughest years of recent times and 2021 will stretch our resilience even further. Among the uncertainty, I think we have all learned some important lessons that will prepare us for 2021, especially those of us in business. The following have struck me as key. Anticipate the future: To create a viable business, you don’t necessarily need to be innovative though you do need to be imaginative and alert to change. Sir Philip Green’s Arcadia Group is a high-profile example of a business that didn’t keep up with changes in retail, and the pandemic left it exposed. It’s critical that accounting and finance professionals look ahead and not be fixated with the status quo or looking backwards. Knowing your skills base is critical: Now that businesses have seen what can happen when the skills that are needed don’t match the skills they have available, I’m more optimistic that leaders will take action to fill these gaps. Don’t forget to keep your own skills up-to-date – it’s your responsibility to stay employable, too. The value of business partnering: As accountancy professionals have partnered more across their businesses during the pandemic, they’ve really shown the value they add. When they move from team to team, they gather increasing amounts of information which enriches the leadership team’s decision-making capability immensely to make better decisions. Experience gained: Finance professionals at every level are gaining a huge amount of experience and this will continue. Alongside learning new digital tools, they’re becoming skilled at scenario planning and helping to shape strategy. Junior staff can also use digital channels to connect with senior personnel, a great way to get exposure for their skills. Considering a business reset: In 2021, more businesses will take this opportunity for a reset. That might mean developing new products or revising outdated processes. Finance professionals are getting actively involved in these business resets, which should further enhance their standing as value partners. Be agile: Finally, as 2020 taught us, let us not expect things to go according to plan. If we can be agile and stay focused on the present and the future, we are better prepared to manage both. • Andrew Harding, Chief Executive – Management Accounting, The Association of International Certified Professional Accountants (AICPA & CIMA)



There’s probably never been a tougher year to predict and anticipate for ACCA, our members and accountancy practices throughout the UK. We don’t know how soon a vaccine will return life to something like normal. It’s hard to estimate what economic effects the Brexit transition will ultimately have on businesses, and it’s impossible to predict with certainty how quickly the UK will be able to recover from the global pandemic. What we do know for sure is that 2021 will be another year when accountants are pivotal, just as they were in 2020. Our research has shown consistently that our profession has been acting as a financial ‘emergency service’ in Covid-19 times and that’s highly likely to continue for the foreseeable future. Small and medium-sized enterprises are a pillar of the UK economy and a large employer. They rely on a network of smaller accountancy practices to guide them towards financial security, sustainability and strong, ethical governance. More than ever, faced with unpredictable financial challenges threatening their businesses, they have relied on the advice of a network of dedicated professional accountants. Our Professional Insights research ‘Responsible SMP Pacesetters’ revealed our industry to be working round the clock to keep smaller businesses afloat, guide them through funding opportunities and to help them to articulate their needs to government, banks and other stakeholders. The pandemic has provided an unsolicited showcase for the value of a professional accountant in challenging times. Our members have stepped up and provided a financial lifeline for the business community, using digital tools that will continue to enhance the relevance and value of the services we offer. As we turn our back on the last blighted year, we should be proud as a profession of the positive and supportive contribution we have been able to make in the darkest days of the health crisis. I know that this important work will continue in 2021. • Claire Bennison, head of ACCA UK PQ Magazine February 2021

While last year was somewhat challenging for both the sector and the business community as a whole, there is cause for optimism as we look ahead into 2021. During 2020, Covid-19 clearly took a toll on employment levels and business viability, particularly for small and mediumsized businesses, some of who now have the added challenge of new customs, administration and taxation processes to deal with following the end of the Brexit transition period. However, it also acted as a catalyst within the sector, speeding changes in the uptake of technology to help adapt to the new working environment for many, as well as highlighting the critical role accountants can and should play in guiding business out of these troubled waters. Nevertheless, there are glimmers of hope on the horizon. As well as the promising news on vaccines, the way our working worlds have been transformed represents a real opportunity, particularly in terms of opportunities to upskill and retrain in order to drive economic recovery and help people boost their employability. AAT research shows accountancy, banking and finance are perceived as some of the most stable professions, while over half of those getting in touch about our qualifications have never worked in the finance sector before. The recent announcements supporting lifelong learning with investment in the National Skills Fund – including new funding for our Level 3 Advanced Diploma in Accounting and Advanced Certificate in Bookkeeping qualifications – alongside traineeships and the National Careers Service, and the promise to reform the apprenticeship levy with a particular emphasis on the SME community, are also very welcome. Accounting technicians will be key to driving forward developing technologies, providing information to clients and communicating how these changes will affect them, and adapting for the future to ensure that the technology supports their clients’ needs. And AAT will continue to help people develop their skills within the accounting sector, as we have done for the past 40 years, to help UK businesses weather the storm and create real change – not just for next year but for the years to come. • Mark Farrar, CEO, AAT 21

PQ LSBU/PQ conference

2021 and beyond London South Bank University and PQ magazine have joined forces to provide you with a free one-day online conference – so sign up today!


s we enter yet another lockdown, we wanted to remind you that PQ magazine has something positive to take your mind off the pandemic. On Wednesday 3 February we are holding a free one-day conference entitled ‘2021 and Beyond: The new normal for accounting around the globe’. Lord Sikka and Professor Richard

Murphy are on the bill, and we are pleased to reveal they will be joined by CIPFA CEO Robert Whiteman. All will give their view on what 2021 could hold, and explain how we can use this time to reset the accountancy button. The day is a truly unique chance to see the whole accountancy family looking together at what needs to be done, and how accountants can shape that future.

In addition we have the wonderful Francesca Sharp and Caroline Kearns, who will explain how the ICAEW has gone carbon neutral and why the UN Sustainability Development Goals have never been more important. We haven’t forgotten about how the job market is changing, and have recruited PQ magazine’s very-own agony aunt Karen Young. She’s a director of Hays Accountancy and Finance, and come February the results of its latest salary survey will be available, along with research on longer term trends in employment. Professor Jill Atkins will also be looking at corporate governance, and Richard Simms will talk about money laundering and insolvency. The day will end with a roundtable discussion which will include Xero’s Mike Day and LSBU’s Ivor Pingue. We will reveal more speakers online, so keep watching This is our fourth conference with London South Bank University, and each one has been bigger than the last. We hope hundreds of you will join us this February. Sign up to our free one-day conference on 3 February 2021, brought to you by London South Bank University and PQ magazine. Just sign up as a Guest at yy2ka5yh • Big thanks to all our sponsors: ACCA, AMLCC, CIMA, CIPFA, FA Simms, ICAEW, Rogo and Xero.


19 February – Professional Flourishing Register today


PQ Magazine January 2021

Modern Monetary Theory PQ

Licence to print money? What is quantitative easing? PQ examines an increasingly popular phenomenon that continues to divide the experts

uantitative easing (QE) is the creation of new money to facilitate an increase in spending and investment in the economy. More specifically, a country’s central bank, in the UK’s case the Bank of England, creates money, usually in digital form, to buy government issued bonds from banks and other large investors, providing these institutions with increased amounts of highly liquid money. In the UK, the first QE programme was introduced in 2009, and new programmes have been launched as the result of the eurozone debt crisis, Brexit referendum and, most recently, the coronavirus pandemic. The US, Japan and Eurozone countries have all used QE since 2009.


Why is quantative easing used? To help you understand QE think of the economy as a machine, where money is the oil. A constant steady flow of the oil is necessary for smooth and efficient functioning. Having an adequate money supply and low, positive and stable inflation is integral to a healthy UK economy. Often this is achieved by the Bank of England, the body responsible for controlling money supply and ensuring the UK’s inflation target is met, by changing the Bank of England Base Rate. Following the credit crisis of 2007-08, the Bank Rate was lowered from 5% to 0.5% in order to encourage economic activity by incentivising spending and investment. However, a zero or negative low base interest rate limits monetary policy and can hurt economic activity. So, in times where monetary stimuli is required, but a reduction of base interest rate is constrained, the Bank of England PQ Magazine February 2021

turns to QE. The positive implications of using QE is twofold: • The creation of money to buy government issued bonds from banks and other large investors increases the demand on government bonds, which lowers the interest rates on those bonds. This reduces the interest rates offered on loans (importantly mortgages or business loans) as returns on government bonds are related to other interest rates in the economy. Therefore, QE allows the lowering of nominal interest rates (the interest rate which high streets banks charge and lend to businesses at) without changing the base interest rate, which makes borrowing and lending cheaper. • A lack of a circular flow of money in the economy (remember, it is a machine) results from the lowering of propensity to spend, which occurs during economic hardship. This results in a reduction of business income, increasing the likelihood of costcutting measures like reduced wages or even unemployment for staff, and the reduction of investment into profitable business ventures. This in turn leads to a negative cycle in which spending, income, investment and economic activity all spiral downwards. The purchase of government bonds provides investment institutions with highly liquid forms of money, which enables firms to invest or lend if they so choose, injecting money into the economy, restarting the flow of money. Simply put, QE makes borrowing and lending money cheaper, encouraging spending and investment, by influencing interest rates and

increasing money supply in a controlled way. Some economists have claimed that the ‘QE experiment’ since 2008 has helped economic growth, kept wages higher and unemployment lower. What are the dangers of QE? Monetary policy constantly represents a money supply balancing act: too little and the economy gets stuck and can’t function; too much and it becomes flooded. There is the risk that QE results in an excess money supply, resulting in a devaluation of domestic currency, higher than desired inflation and even ‘stagflation’, an extremely damaging type of inflation that occurs under no economic growth. Furthermore, the government and central bank cannot force firms to invest and lend, and inject the money into the economy. Therefore, QE can be seen as risky by some policy makers, with the desired outcomes not guaranteed. In addition to these, QE represents a large expenditure package and so results in the increase of a fiscal budget deficit. This threatens the UK’s fiscal stability by increasing debt and loan interest repayments. Lastly, due to the nature of QE, as well as the price of bonds, QE results in the increase in the price of shares and property. Although this makes those holding shares wealthier, it can be seen as regressive, hurting poor and younger members of society. And because government bond prices are used to calculate future pension costs, as bond prices rise so the cost of providing future pensions rise. Firms are then obliged to make larger payment into their pension schemes, reducing investment. As a result, QE can and has led some pension schemes to close altogether. 23


Garden of

Veggie Delights? Nick Craggs highlights some areas you need to focus on to tackle this level 4 exam


ebruary 2021 sees the introduction of AAT’s new scenario for the level 4 Professional Synoptic (PDSY) exam. For those who have not studied PDSY before, in this exam you will be able to read about the company the exam is going to be based on (the scenario) before the actual exam. The new scenario is based on a company called Veggie Delights Limited and is a bit of change from the previous scenarios. Previous scenarios were based on a manufacturing type business, whereas Veggie Delights is a service-based business. Veggie Delights is a chain of organic restaurants who have grown rapidly and recently started offering online ordering and takeaway. Before we dive into Veggie Delights, let’s remind ourselves about the purpose of the PDSY exam. It will test students on certain topics from the budgeting, decision & control and financial statements units. It also has its own material known as accounting systems and controls; this is the main emphasis of the PDSY exam. You will be asked to look at Veggie Delight’s current accounting systems and controls, assess them, find areas of weakness, and make suggestions for improvement. This is a very different exam from any of the other exams at level 4. It is three hours, but there are only 100 marks available. Budgeting, for example, is two-anda-half hours but there are 160 marks available, so you must work much harder for your marks in PDSY. That’s the background, so let’s looks at Veggie Delights and some of the things in the scenario that could cause an issue in the exam. Remember that the exam for each synoptic window is different; however, there are key themes throughout Veggie Delights. The first one, which I think is very important,


is that the company is 15 years old but there has been a dramatic rise in sales and profits over the past four years. The accounting systems for a larger business are very different to the

systems for a smaller business. Has Veggie Delights’ systems grown with the business? No is probably the answer, as there wouldn’t be any weaknesses to spot in the exam! The company hasn’t changed fundamentally in what it sells; it is still a restaurant, so the dramatic rise in sales must be from more transactions. Are the current systems able to manage a lot more transactions than they previously had? The company is looking to expand at an even faster rate than it previously had. It opened five restaurants in the past three years, and it is looking to open another four in just the next year alone. The other big area to focus on in the scenario is the new online ordering service. The controls for ordering online will be completely different to the traditional controls when ordering in the restaurant. Are these good enough? The answer to this is clearly no. The fact that the website is down 15% of the time indicates that the systems are not robust. Are orders being missed, are orders not being taken, or are orders having to be taken over the phone when the website is down? The cost of the website has also spiralled out of control and so far the company has spent nearly double what they budgeted for. Does this indicate that corners have been cut? That is where Veggie Delights currently is, but from the scenario what are the key challenges it will face in the future? Previously, Veggie Delights has been very profitable; however, it is now facing more competition, just when it has seen a rise in overheads. Will future profits be able to finance the ambitious future growth plans? There is also a plan to operate an organic farm, a very drastic change from running restaurants. This will require completely different accounting systems and will require experience that Veggie Delights doesn’t have at the moment. This could very well become an expensive operation and would it add any value to Veggie Delights? They are currently using local organic produce as it is, so will this save money or allow them to charge more? There is also a danger that future profits will be squeezed by Veggie Delights’ plans. There has already been a 5% reduction in customers visiting the restaurants which offer online orders. There is a danger that all the other restaurants will also see a reduction in customers. At the other end, Veggie Delights are bringing in a lot of sustainable initiatives, which are commendable but will come with a cost. The company is going to introduce a basic rate of pay, above national minimum wage, and this will increase costs. This leads nicely into a cost benefit analysis type question; will the rise in wages bring in benefits that outweigh the extra costs? These are my thoughts taken from the scenario, and in the exam you will be given some extra information that you will need to take into account. Some of the above may come up in the exam, and some may not, in any particular sitting. • Nick Craggs is an award-winning tutor and AAT distance learning director at First Intuition PQ Magazine February 2021


Alternative facts So what is EBITDAC? Top tutor Tom Clendon explains all


have recently seen reports that some companies are considering reporting their 2020 profits before the effect of Covid-19. The suggestion is that it would be beneficial to adapt Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) so that it became Earnings Before Interest Tax Depreciation Amortisation and Covid-19 (EBITDAC). But what exactly is EBITDA, what adjustments could be made to this to make it EBITDAC and would users benefit anyway? This article will explore these questions. Alternative Performance Measures In our highly regulated world, financial statements of UK quoted companies must be drawn up and published in accordance with IFRS GAAP. Thus, the format of the income statement is prescribed and standardised. This is aimed at giving users confidence in the numbers that are reported. A regulated and standardised approach is designed to enhance comparability. However, in addition many companies also voluntarily produce alternative performance measures (APMs). In other words, in addition to the various measures of performance outlined in the income statement (e.g. operating profit and profit after tax) other measures are published. This is a tacit acknowledgement that the information required by regulators do not wholly satisfactorily meet the information needs of a company’s users. After all, it should be acknowledged that one size does not fit all. APMs at their best seek to provide bespoke information about the company’s performance that will help the user better understand the performance of the company and even predict its future performance. EBITDA This is probably the most famous of all APMs. PQ Magazine February 2021

Many companies even publish their own EBITDA even though it is not required, and not defined by any IFRS. So, let us explore why it can be argued that EBITDA is a useful measure of performance. • Before interest. This is because companies are financed by different mixtures of debt and equity. Equity does not give rise to an interest expense, but debt does. Thus, by taking a performance measure before interest it enhances the comparability of the underlying performance of companies that have different financial structures. • Before tax. This is because companies operate in different tax jurisdictions and suffer different tax rates accordingly. Thus, by taking a performance measure before tax this enhances the comparability between companies. Also, there is an argument that the tax expense is not under the control of management and so on that basis there is more management accountability and stewardship on pre-tax earnings. • Before Depreciation and Amortisation. This is partly because these are subjective non-cash expenses. However, another reason for taking a performance measure

before depreciation and amortisation (and impairment losses) is because some companies grow by acquisition (takeovers) whilst others grow organically. The companies that grow by taking over other businesses will have more of these expenses. This is because acquisitions result in upward fair value adjustments on assets and thus subsequently more depreciation. In addition, the goodwill that arises on acquisition will eventually pass through the income statement in the form of impairment losses. Companies that grow organically will not have these additional expenses. Thus, by taking a performance measure before depreciation and amortisation (and impairment) it enhances the comparability of the underlying performance of companies that have historically pursued different growth strategies. • Before Exceptional items. While not in the acronym, when coming up with an alternative measure of performance companies often look to exclude unusual and non-recurring income and expenses. These are considered irrelevant when considering the expected impact on future performance. Excluding these one off items arguably enables users to understand the underlying performance. This makes the APM predictive and therefore more relevant to users. EBITDAC So let us consider EBITDAC. After all, the impact of the Covid-19 has been pervasive, but it has impacted businesses in different ways. Let us try to understand what adjustments may be made to arrive at EBITDAC. Because of the Covid-19 most business will have incurred additional costs. Impairment losses, provisions for redundancies and additional cleaning costs to name but three. These could be added back to EBITDA on the basis that they were non-recurring. However, given the likely duration of the Covid-19 impact this could be hard to argue. Some might advocate that EBITDAC should also reflect additional hypothetical revenues and profits that would have been earned if the Covid19 had not occurred. I am very uncomfortable with this suggestion. The measurement of profit is part of stewardship and so should reflect what has happened. History should not be rewritten in this way. It could not be a faithful representation. Conclusion While there is some merit in the measure of EBITDA, it seems a step too far for me to convert it into EBTIDAC. Users will be better served by management setting out a clear narrative explanation as to the future of the business in these uncertain times. • Tom Clendon is the SBR online lecturer with FME. See He can be reached on via WhatsApp on 07725 350793 25

PQ ACCA spotlight


connections in the year ahead ACCA’s Clive Webb is looking forward to an inclusive and diverse 2021


appy New Year, PQ readers. We’re now two weeks into 2021 and I hope you’ve had a great start to the new year. This is a time to look ahead and consider what comes next for the profession, society and the economy. 2021 is a chance for us to rethink our values and approaches – especially in the light of the pandemic. The rebuilding of our lives, economies and the profession can, and should, be done in ways that challenge our accepted norms. Now is an unmissable opportunity to press the reset button and to think about how we can do better. Diversity and inclusion are collectively one key aspect of this; building towards a better society where all have the same range of opportunities available to them. For us, 2021 will be a year of developing and


delivering work that aligns with our values of innovation, integrity and inclusion. These values are part of our strategy. They take the unique reasons why ACCA was created in the first place, and the difference we’ve brought to the global profession, expressing them in a way that reflects our world today. We’re starting 2021 with a clear focus on inclusion, which we define as creating opportunity for all, removing artificial barriers, creating connections and embracing diversity. We’re showcasing this in a theme called ‘Inclusion in action’, running over January, February and March 2021. Our aim is to show the profession’s inclusivity, building on our strong open access credentials created when ACCA began in 1904. Since then, ACCA has made it possible for everyone with the talent and ability to realise that a career in the accountancy profession was within their reach. ACCA is a global and connected community. It is diverse in terms of people but also in terms

of thought. And from this difference means that as a profession we have a unique strength, enabling us to lead and drive inclusion now as we did at our beginning. Until the end of March, we will be running events and publishing professional insights reports under this banner of inclusion, a value which remains at the core of everything that we do and which enables us to share member’s stories to highlight their part in inclusion and diversity. ACCA’s commitment in December 2020 to the UN Sustainable Development Goals is one aspect of the value of inclusion being aligned to this our strategy. Goal 5 – Gender Equality and Goal 10 – Reduced Inequalities are just two we have committed to, and these particularly speak to aspects of diversity and inclusion and how we need to work together to address the fundamental issues that this planet faces. To align with this theme, we’ll be publishing professional insights reports, the first of which is called Leading Inclusion. Here we’re examining issues of inclusivity for the accountancy and finance profession. The report offers an overview of the characteristics of diversity, alongside the political and geographical challenges, too. It examines bias, and how to manage our own biases, asking us all to look at our own approaches to diversity and inclusion through practical recommendations at the organisation and individual levels. Opinions from over 10,000 ACCA members, affiliates and future members on a wide range of issues relating to diversity and inclusion are also included in the report. The main question asked was, ‘Are we truly a profession that is open to all?’ and the majority – 73% – believe this is the case. This report also reveals the fact that we all have a part to play in furthering the diversity and inclusion agenda, especially as 46% felt that they knew how to progress this important agenda. As leaders in organisations and societies, as those who influence the behaviours of others, accountancy and finance professionals should stand up for these values of diversity and inclusion. The diversity of experience, expertise and perspective in the ACCA global community is unmatched. Our community brings together members, future members, employers, education providers, policy makers, thought leaders, other professional bodies and NGOs from around the world. As such, this is a powerful and super-connected community who can add real value to discussions which need to be ongoing. We’re all part of this, and we can bring our own insights into the way ahead. ACCA sees this diversity and inclusion agenda very much as an ongoing opportunity to seize, and something we can all get behind in 2021 and beyond. So do look out for our report in two weeks’ time, which we hope will help you to get discussions going where you work and at home too. • Clive Webb is ACCA’s senior insights manager PQ Magazine February 2021

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PQ budgetary control

Base it on the budget

factor is identified. This determines scale; examples include sales volume, available finance or productive capacity.


Sales budget This calls on the market and consumer research information available to the firm and includes: • Market surveys. • Representatives’ estimates and opinions. • Pricing structures and policy. • Advertising policy. • Target market share. The sales budget would be in terms of volume and value.

Phil Dunn’s overview will be of interest to students studying CIMA P1 Management Accounting and ACCAs preparing for the PM exam budget is defined by CIMA as “a plan expressed in money. It is prepared and approved prior to a budget period and may show income, expenditure and the capital to be employed. It may be drawn up showing incremental effects on former budgeted or actual figures, or be compiled by zero-base budgeting technique.” The setting of budgets compel planning, and business planning comprises: • What does the organisation want to do? • How best can this be done? The role of planning is based on a series of set procedures which include: • Establish the firm’s present position. • Predict future environment. • Clarify the objectives – which primarily concern improving the return to owners (improving shareholder value). • Evaluate alternative courses of action. • Select the best strategy. • Prepare plans to implement the strategy. The short-term plan shows how resources will be acquired and used over a period. Preparing it is known as ‘budgeting’, using it as a means of controlling activity is termed ‘budgetary control’. The budget is a short-term manifestation of a longer-term strategy. The purpose of budgeting includes a number of defined objectives: • To formulate a short-term plan. • To provide estimates or requirements of resources: finance, labour, materials and facilities. • To define normal operating conditions – this is necessary for determining overhead recovery rates. • To set standards/targets/goals which will motivate. • To evaluate corporate and departmental efficiency. • To delegate responsibility for costs to enable management to retain overall control. In addition to these specific objectives, consideration needs to focus on the concept of control. Budgeting control As in other control systems, control is affected by: • Comparing actual performance with planned. • Calling for explanation of differences variance accounting. • Taking appropriate action. CIMA defines budgetary control as: “The establishment of budgets relating to the responsibilities of executives to the requirements of policy, and the continuous comparison of actual with budgeted results, either to secure by individual action the objectives of that policy or to provide a basis for its revision.” Some control guidelines are: • Control is attained through people. • Hence need for responsibility centres. • Only controllable costs should be charged. • Every cost is charged to someone. 28

• Reports should be based on exception priorities. • Control should recognise changed conditions. This element of control often involves the use of flexible budgetary control technique. Flexible budgets Budgets are prepared for a ‘normal’ capacity usage (or activity level): • Where actual capacity usage differs from planned usage, the resultant comparison between actual costs and planned costs may be invalid. • One approach to problem is to have Flexible budgets, which recognise the difference between fixed, variable and semi-variable costs and enable overhead budgets to be prepared at different levels of activity. • In preparing control statement, the budget at the appropriate level of activity can now be chosen. Relevance of budgetary control • Requires short-term objective to be clarified. • Involves planning as a team. • Provides opportunity for participation. • Defines/correlates/co-ordinates departmental interests. • Facilitates delegation – enables ‘exception principle’ to be applied. • Provides yardsticks of performance. • Provides blue-print for: • Forward buying. • Recruitment/training of labour. • Capital expenditure requirements. • Stock holding/pricing/sales and credit policies. • Cash needs. • Production scheduling/planning. Preparation of functional budgets At the outset a principal budget factor or limiting

Production budget This is based on a number of decisions which include: • What is to be produced? • How much is to be produced? • What delivery is required? • What is the size of the production runs? In turn these prior decisions, together with expected sales and planned stock level changes, would determine the volume of production for each product within the range. In addition detailed production plans, material and operations schedules would be produced. From this production overview budgets for material usage and cost, labour utilisation, overhead and resource capacity would generate. Labour budget This stems from the production budget as planned production volume can be expressed in terms of standard hours. The hours would then be matched and standard rates of pay for each grade of labour, together with levels of planned efficiency, and the budgeted labour cost for the period would result. Material budget This also stems from the production budget, where products are standardised, aggregating material schedules will indicate precise requirement for each type of standard material. Where products are ‘one-offs’ detailed material specifications would also be produced. The materials budget would show detail of usage and cost. This would be based on standard or planned usage, valued at standard prices. Plant utilisation budget This is directly linked to the production budget and concerns balancing machine and resource capacity to production requirements. Factory overhead budget Preferably presented in marginal costing format, by identifying both fixed and variable elements of cost as this enables controllable costs to be distinguished from those which are outside the managers’ span of control. Administration, selling and distribution overhead budget This details main areas of the administrative and distribution function and their cost to support, in an effective manner, the ‘value added’ activities of the business. • Dr Philip E Dunn is a freelance author and technical editor for Kaplan and Osborne Books PQ Magazine February 2021

CIMA examiner’s top tips PQ

Get on the


Clancy Peiris explains how you can ace the CIMA case study exams


IMA case study exams challenge candidates to provide innovative solutions to realistic workplace problems. Sounds stressful? Don’t worry, there is a great tool that can help you prepare: Examiner’s Reports. They are a rich source of advice and reading them may increase your chances of scoring high marks. To help you make a positive difference to your performance, I have put together some key insights from recent reports. First, surprisingly, candidates consistently make the same mistakes at all levels and regardless of the syllabus. As examiners regularly observe, students scoring low marks usually do some or all of the below: • Fail to answer the question that was asked. • Demonstrate limited technical ability. • Provide insufficient justification for arguments. • Fail to reflect the scenario or the specifics of the organisation and its environment. So how can you avoid those pitfalls? Here’s a deeper dive into what the examiners expect you to do. Before the exam • Revise study materials thoroughly. You must be confident in all subjects across the three pillars covered in the case study exam. When you revise don’t skip topics even if they are difficult. • Read the pre-seen material carefully and think about it. Think about the industry and the entity, and try to identify, understand and remember the key themes in the pre-seen material. That is important because the exam tasks are all about applying your technical knowledge to a specific scenario and context. • Practice tasks from past case study exams. Pick a past case study exam and write a full PQ Magazine February 2021

answer. Once you are done, take a break and then take some time to reflect on whether they are complete and relevant. There is no need to practice under exam conditions yet because the value of this exercise is to ensure you can interpret and answer questions correctly within the allocated time. During the exam • Plan your answers and pay close attention to timings. Typing an outline answer plan at the start of each requirement within a task will help you to plan the structure, reduce the risk of forgetting any good points you want to make and ensure that they are presented in a logical and coherent order. • Use time wisely. If, say, 24% marks are available for a requirement within a task, then aim to spend roughly 24% of the overall time allocated to that task on it. Make sure you address all requirements (or sub-tasks). If you run out of ideas before the time is up, try spending some of the remaining time thinking about how to expand your answer. • Answer the question. This is the number-one most common mistake. Your understanding of the role simulation, core activities and assessment outcomes included in the exam blueprints will be extremely helpful to understand exactly what the examiner expects in your answer. This is particularly important as most of the requirements you need to meet are given in everyday language in the exam. • Application to the scenario is key. You need to demonstrate technical understanding in the context of the scenario and the particulars of the issue under discussion. Information given to candidates as part of the task is there for a reason and should be, as far as possible, included in your answers

along with relevant information from the preseen and unseen materials. • Commit to an argument. Some answers suffer because candidates seem to be afraid of contradicting the examiner’s suggested solution. In fact, there can sometimes be more than one correct answer in business, so don’t be afraid to give an answer that could prove unpopular with senior managers, even if that means recommending the rejection of a proposal made by one of the directors particularly in the Strategic case study exam. Just ensure you offer a clear and relevant argument that satisfies the requirement. • Keep your answer relevant. Candidates for the case study exams often investigate the industry and learn about recent events in the business news. The insights from such background research can often help develop answers but the danger is that candidates often feel obliged to offer real-world examples but unrelated to the task. You will get credit for all relevant points made in the answer, including illustrations from the real world. Irrelevant points only waste time. • Avoid making unsupported statements. Allied to relevance is avoiding making statements rather than arguments. Writing comments such as “this improves decision making” is not enough to gain any marks – explain how and why this is the case. Explanations can quite often be improved by adding “because of ….” at the end of a sentence. Make sure that you use the information given to you within the case study itself, especially financial information. Finally, remember, preparation is key for exam success. Good luck! • Clancy Peiris, Senior Learning Development Manager, Association of International Certified Professional Accountants 29


Absent without leave Where are the missing exam topics? Sunil Bhandari explains how the CBEs are changing, and what your response to these changes should be


he ACCA Strategic Professional Level CBE’s are now approaching their first anniversary. For my paper, ACCA AFM, the advent of the new CBE format has made a significant change to the way students must prepare to sit this exam. The most obvious of these is how to answer questions using the ACCA CBE ‘Spreadsheet’ and ‘Word Processor’, but that is a subject matter for a later article. What is less obvious, but equally important, is to know which ACCA AFM topics seem to have gone ‘AWOL’, at least temporarily, and why? Knowing what happened with the 2020 AFM exams is a good starting point. In March 2020, the initial cohort of students sat the ACCA AFM CBE. The questions set were identical to the paper version of the exam that the majority of students attempted. The June 2020 exam was delayed until July, for understandable reasons. Once again, the CBE and paper versions contained exactly the same questions. However, for the September 2020 sitting a material change came into play. The ACCA AFM examining team adopted a five-question approach. The morning sitting of the CBE and the paper exam were identical. The afternoon sitting of the CBE had one common question taken from the earlier exam, plus two different questions. This approach was dittoed for the recent December 2020 exams. There is no doubt that the ACCA AFM examining team are ensuring that there is a level playing field. There is no advantage or disadvantage to a candidate that is sitting the paper test or the CBE (morning or afternoon). This is only fair and equitable. When it comes to the theory/written elements of a question, this is easy to achieve. Whether you handwrite your answer or type, it makes no difference. For the calculation elements, the examiners have to be commended for ensuring that all is fair in terms of CBE or paper exams. The CBE spreadsheet functions such as ‘copy & paste’ and ‘sum’ do save time for the CBE candidate. The ‘NPV’ and ‘IRR’ commands are even more time efficient, but as long as the calculations


can be completed within the allocated time by the paper exam candidate, then there not an issue. From the questions seen to date, this has been the case.

However, there are certain calculations where the CBE software, in my opinion, has a material advantage over the paper-based approach: 1. Ratio analysis: the facility to copy & paste the accounting information from the question’s exhibit to the response area, and then to use this data to compute repeat ratios, using the same copy & paste function, is very time efficient. 2. Multilateral netting: the table solution for a foreign currency hedging question is easier to prepare with the CBE spreadsheet than pen, paper and the calculator. 3. MIRR: taking a set of forecast project cashflows and using the ‘MIRR’ command is definitely quicker than using the equation provided in the paper exam. 4. BSOP model – this is the topic where the CBE spreadsheet short cuts are significantly beneficial, as can be seen below. So it is not a surprise that the above topics were left out of the 2020 AFM exams. That is totally fair and reasonable. However, I am not saying to you that you should ignore these topics in the above form when preparing for the exams in 2021. In fact, I am saying quite the opposite. The roll-out of the ACCA AFM CBE covers far more countries in 2021. Also, the examining team may choose to test the above in the CBE and not in the paper exam or set the question in such a way that the CBE spreadsheet advantage is removed (for example, Q1 Talam, March/June 2019). Hopefully, they will not be AWOL for much longer! • Sunil Bhandari is the ACCA AFM Tutor for FME Learn Online (

PQ Magazine February 2021

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PQ ACCA Performance Management exam Spice up your life

A passage to India Relevant costing is a key part of the PM syllabus. It is a topic that students tend to struggle with initially, Jo Tuffill is here to help you avoid that fate


ast year was the year I celebrated a major milestone birthday, and I had booked a trip of a lifetime to an amazing country. It was supposed to be my ‘passage to India’! Sadly, cancelled events and trips were a common feature of 2020. So being a true management accounting geek I decided to concentrate on the financial positives instead. In ‘relevant costing terms’ you only focus on what is Future, Incremental and Cash (FIC). So the cancelled trip to India is a great example to demonstrate this concept. All flights, hotel deposits and agents’ commission are past and sunk, and therefore not relevant. So what is

relevant are the avoidable costs from not going, such as the incremental cost of restaurant meals, trips and accommodation, plus of course the opportunity benefits of my extra hours working instead. The numbers don’t lie. Just a small point though – it wasn’t my decision! Now you have the concept, let’s turn to how it is examined in the ACCA Performance Management exam. Exam questions tend to focus on whether to go ahead with manufacturing a new product or providing a new service or setting a minimum price for a special contract. Let’s look at a special contract question.


Spice Tours, a travel company that specialises in group trips to India, has been asked by a corporate client to price up a special contract. The contract is to organise a ‘Passage to India’ for the winners of the employees of the year award. The highlight will be a sunrise visit to the Taj Mahal. Spice Tours regularly runs trips to different regions of India, but mainly operates trips to the Rajasthan region out of an office in New Delhi. In the table I have listed the potential costs and how they should be considered in pricing up the group trip to come up with a minimum contract price. Remember – the key is to cost up what is Future, Incremental and Cash (FIC). In summary, the principle is that a cost will be relevant if there is a change in cash flow that is caused by the decision. Here we have found a minimum contract price. Now Spice Tours will add a profit mark-up to the price and submit the quote to the corporate client. Note that exam questions will require you to state all assumptions and reasons in justifying the relevant cost and will also ask about nonfinancial factors which are difficult to quantify. For instance Spice Tours might be willing to offer this at a minimum price to get the ‘free promotional value’ of running a trip for prize winners who will inevitably publish their adventures on social media. Above all, it is very important to relate answers to the scenario in the question as marks are awarded for application and implication. Congratulations, you are now ready to pass that ‘relevant costing’ question! • Jo Tuffill is the ACCA PM Tutor with FME Learn Online

Relevant or not?


Incremental costs of the trip such as flights, meals, accommodation are $2,500 per person for the 20 prize winners plus a US tour guide. Costs for entry fees and local guides are $5,000.

These are all Future, Incremental and Cash and would be avoidable if the trip doesn’t go ahead. So 21 x $2,500 = $52,500 plus $5,000

20 tour folders encompassing maps, narrative guides and promotional items from Spice Tours. These are inventory items and used on all trips. They were purchased for $25 each. The current cost is now $30, they have a $10 resale value as they are branded.

Here the original purchase cost is past and sunk. The resale value is not relevant as they have use in the business. The relevant cost is therefore the current cost as they would need to be replaced to use on other trips. So 20 x $30 = $600.

The Rajasthan tour operative is on a monthly wage and is allocated to trips when they occur. She has to be paid whether a trip goes ahead or not. There was no other trip scheduled for this month in Rajasthan.

This is a committed cost; the tour operative will be paid irrespective of whether there is a trip or not. She has spare capacity and so there is no change in cash flows from going ahead with the special contract.

The US tour guide specifically requested by the company is already booked on another trip to South India – Kerala Region. This trip would have to be cancelled as a guide with the same knowledge and skills cannot be found to host the trip. The lost contribution from the Kerala Trip is $10,000 and the wages for the guide while on the trip amount to $2,000.

So here the relevant cost is the opportunity cost of the lost contribution on the Kerala Trip plus the wages of the guide. You may think that the guide has to be paid irrespective of whether they are on the Kerala Trip or Rajasthan Trip and so this should not be included. But that is incorrect. Contribution is sales less all variable costs. By cancelling the Kerala Trip, the sales value is lost and variable costs like flights and accommodation are saved. The wages can’t be saved by cancelling the Kerala Trip. So we cost up lost sales less any saved variable cost which here is also contribution + wages.

Use of tour bus in Rajasthan. This is due to be replaced if not used on the trip. The tour bus originally cost $50,000 with depreciation allocated over number of trips, 100 trips. The bus can be sold for $5,000 now but if used on the trip will fall to $4,000. Petrol costs are $500 and the Rajasthan operative drives the bus.

Immediately we can say that the $50,000 purchase cost is a sunk cost and the depreciation charge is not a cash flow and so both are not relevant. However the change in resale value is relevant. By using the bus you lose $5,000 and sell for $4,000. So the difference in cash flows is $1,000. Petrol costs $500 are ‘FIC’ and the operative is a committed cost as above so $0.


Tickets into the Taj Mahal – the tour company has prepaid tickets for early access. This is a scarce resource and if not used can be sold to other tourists for 50% more. Tickets cost $50 per person for the 20 travellers.

The 20 prepaid tickets if not used would be sold on the day for 50% more at $75. If the trip goes ahead the sales won’t happen, a loss in cash flow. The original purchase price of $50 is a sunk cost and so is not relevant. So the loss in ticket sales is $75 x 20 tickets = $1,500


Office costs in New Delhi are allocated to all Rajasthan trips using a standard absorption rate

Hopefully by now you have got the concept. How fixed costs are apportioned is not relevant. They are incurred irrespective of the trip. There is no cash flow effect caused by the decision


Minimum Contract Price 32





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Covid-19 response PQ

‘I really appreciate the opportunity to use your learning platform. It has made studying much more enjoyable than just using books. It helps to keep me motivated especially as we don’t know when we will have our next exams, and so have to continually keep up-to-date with

Trust in technology Mindful Education explain their response to the thousands of AAT learners being impacted by the pandemic, and outline the role edtech played in keeping learners on track with their studies


n March 2020, The United Nations Educational, Scientific and Cultural Organisation (UNESCO) estimated that some 1.38 billion learners across the world – around 91% of the global student population – had already been impacted by the closure of educational establishments caused by the Covid19 pandemic. With school, college and university buildings closing around the UK, the world turned to education technology like never before. As specialists in blended learning, the team at Mindful Education felt we were in a position to do something positive to assist training providers and their learners during the lockdown and college closures. We made a decision early in March to offer our AAT Level 2 and Level 3 online courses free of charge to all colleges across the UK so that they could support their accounting learners –

including full-time 16-18 students, apprentices, and part-time adult learners – during the college closures. Every learner was offered full access to our courses including the videos, quizzes, exercises and all downloadable lesson materials for their entire qualification. Tutors were also able to access our full range of analytics data. We were delighted that over 6,000 learners from 122 colleges and training providers took up our offer. However, for the Mindful Education team this was just the beginning... Our digital team worked night and day to set up bespoke, provider-branded VLEs for each separate cohort – an enormous undertaking. Meanwhile, our operations team liaised with colleges to provide log-in details to students to their VLE, trained hundreds of tutors in how to get the best from the Mindful Education courses, ran webinars, produced training videos

‘Mindful has made it so much easier for me to be able to continue to progress and learn My AAT Level 2 Foundation Certificate in Bookkeeping modules’ Online & On Campus Learner, Heart of Worcestershire College

the subjects’ Online & On Campus Learner, Coleg Sir Gar and replied to many thousands of student and tutor queries. We provided full technical and academic support to all of the colleges and providers who took up the free offer. It has been very pleasing to see so many messages of thanks from providers and their learners and we are delighted that we were able to help so many people through this difficult and unprecedented time. Having initially planned to end our free-ofcharge support at the end of the academic year, we extended it into the Autumn to help those who were taking delayed assessments. As learners continue to sit AAT assessments, we have made the decision to further extend the offer for currently registered learners through to February. Meanwhile, the Mindful Education team has been reflecting on the impact of this initiative. We have seen significant benefits to the way we communicate and work; like many organisations we have had to adapt swiftly to changing circumstances and the Mindful Education team has learnt a huge amount over the last nine months. We have instigated systems and processes at pace that will stand us in good stead in the coming years. Pleasingly many of the providers who took up our free-of-charge offer are now working with us as partners. If you are interested in studying an AAT qualification using our Online and On Campus blended learning approach then please visit the Mindful Education website to find your nearest provider. • Thanks to Mindful Education for this article

Award-winning AAT courses and apprenticeships Flexible learning to suit your lifestyle PQ Magazine February 2021


PQ tax

Self-employed tax payments made simple Neil Da Costa shows you how to tackle questions on this subject, using the example of a small business in the beauty game


ere, I am going to show you how to ‘keep it simple’. Having been an Advanced Tax lecturer for more than 20 years, I am fully aware of which areas examiners say that students struggle with. In this article, I will be showing you how to deal with self-employed tax payments using simple examples featuring Candy’s Sweet Jabs, a Botox studio. Payments on account Self-employed individuals have to make two payments on account based on the income tax and Class 4 national insurance contributions for the previous tax year. The first payment on account is due on the 31 January of the current tax year while the second payment on account is due on the 31 July following the current tax year. With regard to Class 2 NIC and CGT, there are no payments on account due. Instead, 100% if the tax is due in a single payment on the 31 January following the current tax year. Simple example: Candy’s Sweet Jabs Candy is self-employed and runs her own Botox studio called ‘Candy’s Sweet Jabs’, giving her clients their sweet, youthful looks back. The previous tax year was 20/21 and her income tax was £12,000 while her Class 4 NIC was £3,000. What are Candy’s payments on account for the tax year 21/22 and when are the payments due? The tax year 21/22 runs from the 6 April 21 to the 5 April 22. The total income tax and Class 4 NIC for the previous tax year was £15,000. This means that each payment on account will be £15,000 x 50% = £7,500. The first payment on account is due on the 31 January 2022 and Candy would pay £7,500. The second payment on account is due on the 31 July


the Class 2 NIC and CGT liability for 21/22. This means that the balancing payment is £10,000 + £200 + £17,340 = £27,540. Unfortunately for Candy, on the 31 January 2023, she must also pay the first payment on account for the next tax year 22/23. The payment on account for 22/23 will be based on the income tax and Class 4 NIC for 21/22 of £25,000. This means that her first payment on account for 22/23 will be £25,000 x 50% = £12,500. As a result, the total payment due on 31 January 2023 is the balancing payment of £27,540 added to the payment on account for 22/23 of £12,500 which is a huge payment of £40,040. Reducing payments on account If the self-employed individual feels that the actual profits for the current year are lower than the previous year, then a claim can be made to reduce the payments on account. However, if HMRC feel that a claim has been made negligently or fraudulently, they may impose penalties.

2022 and Candy would pay the second instalment of £7,500. Balancing payments Self-employed individuals then make a final balancing payment based on the actual income tax and Class 4 NIC on the 31 January following the end of the current tax year. On the same day, 100% of the Class 2 NIC and CGT for the current tax year is also due. Candy’s Sweet Jabs (balancing payments) Candy has had a great year in 21/22, with a higher number

of customers desperate to look younger and responding to Candy’s effective marketing campaign. Her actual income tax for 21/22 was £20,000 and her Class 4 NIC was £5,000. In addition, she has Class 2 NIC of £200 and a CGT liability on the sale of Forever Young Plc shares of £17,340. What is Candy’s balancing payment and the total payment of tax due on the 31 January 2023? Candy’s actual income tax and Class 4 NIC for 21/22 is £25,000. She has already made payments on account of £15,000 which leaves a balance of £10,000 due. In addition, she must pay 100% of

Candy’s Sweet Jabs (Reducing Payments On Account) Unfortunately, Candy purchased a dodgy batch of Botox from a suspicious supplier at a discounted price and some of her clients are experiencing side effects such as hair loss. To compensate them, Candy is offering full refunds and free hair extensions. She estimates that her actual income tax and Class 4 NIC for 22/23 will be £16,000, compared with £25,000 for 21/22 Candy can claim to reduce her payments on account for 22/23 from £12,500 to just £8,000 (£16,000 x 50%) You have now understood selfemployed tax payments and can easily earn marks on this popular exam topic. • Neil Da Costa is a Senior Tax Lecturer with Kaplan. He believes in keeping things simple and making tax fun PQ Magazine February 2021

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PQ studying at home

Making the

best of it Cath Littler picks the positives out of a difficult and emotional year, including being inspired by students’ resilience and hard work


hen the first lockdown started it felt a bit like everyone had joined our world. We were already working from home, sharing documents and making video calls. We were restricted by the need to care for my father (aged 97) who lived with us but could not be left on his own for more than an hour or so. We couldn’t see how we were going to get to the pub, never mind take a holiday, without leaving Dad in the care of strangers – we needed the Grandad equivalent of a babysitter! Suddenly I was an expert in a new field, that of remote working. There was a rush of articles and advice on how to successfully work from home and most of them got it fairly correct. As the pandemic progressed, Dad deteriorated. However, as I struggled with the stress of working, shielding, caring/nursing and then bereavement, I found support from my co-remote workers and inspiration from the way that many tutors and students took up the challenge of teaching and studying online, not letting anything get in their way. In my various roles, I have spoken to many students and heard stories about using furlough time to catch up on studies. Some lost their

jobs but were really determined to get new ones – and were succeeding. At times planned study courses were missed, so students selfstudied rather than wait for a new course. Many students took it further, whether they were furloughed or not. They did their own research on tax changes and the furlough rules to make themselves ready to give businesses advice. I never spoke to a student who was not working hard to succeed. That’s not to say that all students were in this group. Wellbeing calls from providers offered some support but some struggled to cope and took a study break, and we can’t be disappointed with that. The way that many managed having their children at home while working was also inspirational. Strict routines of study and work became the norm and dashing out of a meeting to sort out a problem became something that not only I did but everyone else now does, too. Effective teaching online is really difficult. Simply talking over a presentation is easy but getting feedback from students is challenging and the chat function is limited. I have found ‘polls’ and ‘breakout rooms’ functions helpful, but some tutors have been taking it technologically further and others are delivering lessons to very small groups, repeating as required. Written practice is always challenging for AAT tutors and students. Shared documents and forums have allowed groups to work together and tutors have spent hours marking and answering emails. Some have introduced anonymised online peer marking which helps with both teacher workload and student understanding. So 2020 was a difficult year, but we can all take inspiration from the way that we have adapted our teaching and learning, discovered new skills and generally risen to our challenges. • Cath Littler consults for AAT and Mindful Education Cath Littler writes: This picture of Dad taken just after he moved in with us when he was 95. The book and a cream cake were very typical! He was an electronic engineer, having attended Heriot Watt in Edinburgh where anyone who failed an exam got called up – no resits! When he completed his course he was called up anyway, but when told what to say to the recruiters he ensured that his skills were used properly. He joined the RAF for the rest of WW2, which he spent in Calcutta, India, building Radar sets to track aircraft.


PQ Magazine February 2021

exam technique PQ

Every second counts Regwana Uddin explains why it is vitally important that you keep an eye on the clock when you’re sitting that important exam

wonderful opportunity to force you to do things within X minutes. Time is money marks For a skills level paper you have three hours and 100 marks up for grabs, which is equivalent to 1.8 minutes per mark or 18 minutes per 10 marks. Regularly checking the clock is important. I like to manage the passage of time in multiples of five, as this allows me to confirm if I have spent too long on a question or if I should decide that it is time to move on. Let’s be honest, just before you press ‘start’ you are ready, pumping with adrenaline, wide awake and ready to set off, but as the minutes slip away you will realise your mental performance is deteriorating (and you get a little hungry, but don’t ask me the science behind that) and you’re desperately trying to reach the end. This is inevitable, it will happen, but having one eye on the clock is crucial. Most candidates are confident that they can type faster than they write so you can save many minutes by doing majority of your workings/written elements in the constructed workspace (and the scratch-pad). In the first 5 – 10 minutes skim through all questions and ‘flag’ the exercises you believe to play on your strength, and jot down how much time you will be spending for that particular question. If you get those out of the way you will feel pleasantly surprised at how many marks you have accumulated. This will give you the boost you need to chug through the more testing questions.


evision for me has to be the most exciting time. During this period students can learn to apply their knowledge to exam questions, but most importantly they gain exam technique on how to make sure they finish within the allocated time limit. Students regularly ask for advice on how they should spread their precious moments. Three hours is long and sufficient, but it requires stamina which students do not actually appreciate while they’re in the revision phase. Time waits for no one There is nothing new about the time constraints;

candidates are expected to complete all necessary questions in the exam and I get a large number of students emailing me that they fought a heavy battle with time. If you’re struggling to beat the clock, then planning your attack before you enter the exam room is key. At least a week before the exam block out four hours and aim to complete a full mock – but be honest with the time you are spending. If you do not get a feel for your performance before the real thing then what guarantee is there that you can finish the exam and show the examiner what you are made of? Booking yourself for an ‘exam rehearsals day’ is a

Lost time is never found again It’s tempting to want to spend five more minutes on a question that you’re flying through, but you must be strict with yourself as an extra five minutes here means you’ll have five minutes less on your final question (which may be absorbed with effortless marks). Remember, this exam is your chance to show the examiner what you’re made of, but being well prepared with a lack of exam technique will not impress the examiners at all. As my favourite tutor, Albus Dumbledore, once said: “Mysterious thing, time. Powerful, and when meddled with, dangerous.” • Regwana Uddin is an ACCA tutor at LSBF. She was shortlisted for PQ Lecturer of the Year in 2020

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PQ Magazine February 2021


PQ dealing with failure

If at first you don’t succeed … Helena Jones explains how to deal with failure So, what should this strategy be? It is tempting to put everything behind you and start afresh, but that would mean forgetting all you have learned from your studies and also from the experience of sitting the exam. When you reach a moment of calm, think about jotting down your thoughts under two headings. Here are some ideas to get you started:


esults day. All the build-up, the nerves, the hope, only to find that you have failed to pass your exam. Depending on which exam you took, you might not want to see another MCQ for as long as you live, but here’s one for fun: You have failed your exam. What do you do now? A: Give up B: Seethe with resentment C: Draw up a strategy for your next, successful, attempt The correct answer, of course, is C. A is incorrect because you are made of sterner stuff. B is understandable but ultimately pointless.


What went wrong?

What went right?

Try not to dwell too much on this, but when you do identify something that went wrong, turn it into a positive that you can use for your strategy. For example: “I was tired and couldn’t concentrate could be turned into: “‘I will be well-prepared and organised on the day before the exam so that I can relax, sleep well and feel refreshed on the day.”

It might not feel that way soon after the exam results, but there will be some positive things to take forward. For example: • I now have experience of sitting an exam in this paper. • I will know what to expect next time. • I got some marks!

Now is a good time to look at any feedback, such as the examiner’s report, for the exam that you attempted. There are often some recurring themes in examiner’s comments: • Not reading the question properly. • Answering a different question from the one being asked (see above). • Poor time management. • Lack of preparation. • Failing to gain the easy marks (where applicable). There is a reason why examiners repeat the same failings in report after report: many candidates in each sitting fall short of these fundamental requirements for exam success. Don’t be one of those candidates who repeats the same mistakes. One thing you must consider as part of your strategy is to attempt as many mocks as you can. As any tutor will tell you, students who attempt mocks tend to do well in the real exam, and we all kind of know this anecdotally. Recently, however, we received some real analysis from a client that showed something truly startling: the more mocks a student took, the higher the pass rate. Students who attempted three or more mocks before taking the real exam had a pass rate of 90%; for students who did not attempt a mock the pass rate was 50%. Now that should definitely be part of your strategy: get as much exam practice as possible. • Helena Jones is a director at Sonar Education

PQ Magazine February 2021

your career PQ

Mind the gap Most people have got career gaps, meaning the dates on their CV don’t quite add up. Here Karen Young outlines how you can explain them at interview


t’s not unusual to have gaps in your career. Periods of study, childcare, travel, jobhunting or redundancy among others are all common reasons to take a break in employment. With life expectancies generally increasing, many will find themselves with little option but to continue working for longer. This is likely to bring about a greater number of non-linear career journeys and thus more gaps in employment. Although the legitimacy of career gaps has become far more recognised by employers, you will likely still be required to address this on your CV and in an interview. So how can you do this in a way which helps promote you? Five common career gaps Although there are many reasons for having a career break, here are some of the most common ones, with advice about how to professionally and confidently discuss them if asked in an interview. 1. Time off due to illness Remember, you’re not required to provide specific details of the illness. Instead, if you were able to invest in your career during your time off, this is a great opportunity to talk about it. Did you, for example, learn any new skills, keep up with industry news or volunteer in your community? Demonstrate that you are ready to return to work and put an emphasis on why you think you are a good fit for the role in question. PQ Magazine February 2021

You could say something like: “I left my last job due to a recurring medical condition which prevented me from working. I took some time off to recover and during this time I was able to learn more about the industry. Now, I’m back to full health and ready to take on this role. It builds on my existing skills and reflects my values and interests.” 2. Being made redundant Redundancy is always a business decision and not something to be ashamed of. Many people have experienced this, particularly in recent times as a result of the pandemic. Briefly explain the context around your redundancy – for example, due to budget cuts or restructuring. Then move on to examples of strong performance or achievements in your last role. Also explain how you have used your time away from the workplace and how this puts you in a strong position to undertake the role you’re applying to. 3. Travel It can work in your favour to focus on the reason/s why you decided to go travelling, emphasising your desire for growth, interest in other cultures and quest for gaining new perspectives. Make it clear that you’re ready and excited about returning to work and what in particular you find interesting about this position. For example: “I took some time off to travel, where I

learnt about different cultures, gained exposure to new perspectives and learnt some life lessons. I’m now ready to focus on the next stage of my career. This role really stood out to me because of the opportunity to work with different teams, be creative and represent a market leader in an exciting industry.” 4. Job hunting Looking for a new job takes time, particularly in challenging economic climates like the one we’re in currently. You might have heard that job hunting is a full-time job in itself, which employers appreciate now more than ever. Explain how you have been proactively looking for a new job and how the process has gone so far. Make it clear that you are savvy when it comes to industry trends and areas of demand. Potential employers will also want to know that you want this particular role, not just any role – so emphasising your enthusiasm will be key. 5. Caring commitments Childcare or another caring commitment is one of the most common reasons for taking a break in your career. Be confident talking about how you paused your career to prioritise your family and look after your children, partner or elderly parent for example. Impress employers by focusing on why you feel ready to go back to work and what you’re excited about. Here’s what an example answer might look like: “Earlier this year I became a father and needed to prioritise my family. I’m now ready to re-enter the workplace and excited to take on a new challenge to continue my professional and personal growth.” Remember that there is no shame in having gaps in your career. Discuss these honestly and confidently, providing concrete examples of how you have used your time out of work effectively and why you’re excited about the position you’re applying for. • Karen Young, Director of Hays Accountancy & Finance 39

PQ career advice

Keeping cool in a crisis

Kelly Feehan has some tips on how you can minimise the pandemic’s effect on your accountancy career


ince the Covid-19 pandemic began, the accountancy profession has faced its worst crisis in more than a decade. Major blows have been dealt across the industry, with training contracts deferred or cancelled, promotions delayed and pay rises missed out on. In some cases, staff are actually finding themselves even busier than before, juggling the challenges of home working with covering the workload of furloughed colleagues. Whatever their circumstances, for many accountants, there is a distinct impression that careers have completely stalled. It’s easy to feel frustrated in situations such as these, especially if you’re new to the industry and eager to begin climbing the ladder. But it’s important not to make any rash decisions about how to kickstart your career. Instead, take some time to think about your options and concentrate on your long-term plan. Rather than worrying about things that you can’t control, focus on what you can. Of course, this is often easier said than done. So, here are three top tips to help make the most of this unexpected time. 1. Don’t stop learning Seize every opportunity to broaden your knowledge. If you’re relatively new to the industry, for example, take some time to develop the skills you might have gained this year. When the opportunity comes to accelerate your development, you may find that you’ve given yourself an advantage. Don’t stop there, though. Learning new skills


outside your profession, via means such as webinars, on-demand courses – like those that we’re currently offering at CABA – or even some form of accredited training, can be both fulfilling and good for your wellbeing. You might consider coding, project management or advanced excel, for example. All of which might be helpful when work picks up again. In short, use this time to make yourself more marketable. The pandemic may have slowed your progress, but that doesn’t mean you can’t catch up. Consider how you’d answer a question about what you’ve been up to for the last few months. Nobody’s necessarily expecting you to have started a business or completed a year’s worth of studies, but having even a little something that you can look back on and feel proud of is a powerful way to boost your confidence. 2. Stay connected Try not to distance yourself from your profession or your peers. Keeping up-to-date with the latest news and industry developments will not only keep you connected but will also help you to develop quickly once the opportunity arises. There are plenty of events and learning opportunities being offered by both ICAEW and CABA, so give some of these a try if you’re able. Likewise, find ways to stay connected with your colleagues and talk to as many people as you can. Whether you’re based at home, in an office or have had to put your work on hold entirely, if there are ‘stay in touch’ events available, make sure you join them. Check in on LinkedIn

regularly, share content, comment on posts and contribute to debates. This unusual period might actually prove a surprisingly good opportunity to expand your network and make new contacts. Putting the time into doing this now will only help your future career development, so it’s a great habit to get into while you have the chance. 3. Stay active It’s easy to fall into sedentary habits without the structure and routine of a job or when working from home full-time. Be mindful though of the negative effect that this can have on your fitness, energy levels and lifestyle. Staying active is, after all, just as crucial to your mental wellbeing as it is to your physical health. Whether it be cycling, a workout in the lounge or simply a good walk, find a form of exercise that suits you. Set yourself targets, like number of steps per day or minutes exercised per week, can be a good way of keeping on track. Alternatively, you might want to occupy yourself with some part-time or voluntary work if you’re waiting for things to pick up again at the office. The benefits of keeping yourself active in this particular way are two-fold, giving you both a sense of fulfilment and something great to put on your CV. While the pandemic lingers on, it’s easy to feel as though we are living in a world full of things that we simply can’t control. As disconcerting as this might be though, especially when that feeling extends to our careers, it’s important not to dwell on the negatives. Your progression might very well seem to have stalled – even if, in some cases, your workload has done completely the opposite – but there are plenty of things that we can still control. It’s by seizing these opportunities that we will ultimately feel positive and unbeaten when the time comes to start climbing that ladder once again. • Kelly Feehan, Service Director, CABA PQ Magazine February 2021

careers PQ

Dear Karen Ask PQ’s very own agony aunt Karen Young when you need advice from a real expert. Email your dilemma to, and he will pass on the best ones to Karen THE DILEMMA The Christmas break led me to realise that I want to invest more into my professional development. Do you have any suggestions for how I can progress my career outside of my day-to-day job? KAREN’S RESPONSE It’s great to hear you’re proactive about your own professional development. Continuous learning and development is essential to really progress in your career, so here are some ideas for what you could do: 1. Take time to reflect. With 2020 done and dusted, look back on what you enjoyed, what you achieved and what you would have done differently. It’s a surprisingly rewarding exercise and might give you some clarity and direction. 2. Follow the jobs market. Doing regular research on what jobs are out there and where demand lies will keep you informed about what skills you may need to develop for when the time comes for a career change. 3. Grow your network. Spending time networking (even just on LinkedIn) will put you in touch with people who can offer you inspiration and potentially influence your career. 4. Refresh your CV. Make sure your skills and achievements are up-todate and that this is mirrored on your LinkedIn profile. 5. Practice your interview skills. Try to have some scenario answers to typical interview questions up your sleeve. This will be beneficial for any upcoming interviews and give you the chance to impress in meetings and conversations. 6. Keep up with your industry. Reading news, articles and books, as well as listening to radio and podcasts will help you develop your commercial acumen and knowledge of your industry. • Karen Young is a director at Hays. She is passionate about helping people to find the right job, and companies to find the right person

PQ Magazine February 2021

Life at Bottesford Bookkeeping ICB Student of the Year Elizabeth Carter is a bookkeeper studying Level 3 Bookkeeping and Payroll, Level 4 Self assessment Tax, Drafting Financial Statements and Corporation Tax. She studied chemical engineering at university and is a qualified teacher What time does your alarm go off? Between 5.30 and 7am, when my children wake up. What is on your desk? Laptop, printer, calculator, pen, highlighter, textbooks. How long is your commute to that desk and is it better now? 30 seconds so yes, absolutely. Do you have a favourite lunch? Soup is my healthy favourite, pizza is my unhealthy favourite. What can you see when you sit at your desk? A white wall and some pictures. Which websites are your favourites during lockdown? Facebook, BBC news. How many hours a week are spent on Zoom (or in other

online meeting rooms)? Two or three. Are you spending more time working now than normal? Yes. How do you relax? Watching television with a cat on my lap.

What is your favourite tipple? Gin and tonic. What’s your favourite TV show? Anything with time travel – Umbrella Academy is my latest favourite. What is the best film you have watched recently? Home Alone (I hardly ever get an opportunity to watch films). Summer or winter? Summer. Think back, do you prefer pubs or clubs? Pubs. Do you have a hero? Many. What is the first thing you are going to do when lockdown is over? See my brother and nephews. If you had a time machine where would you go? To the future.

In brief Pap Are CEOs really worth it? It took FTSE 100 chiefs the first 34 working hours of 2021 to earn the average worker’s annual wage, research reveals. The High Pay Centre claims that’s how long it takes for Britain’s top bosses’ pay to overtake the £31,461 annual median wage for full-time workers. That is an hour later than last year – as bosses’ pay was flat in 2020, while average wages rose slightly. Critics have questioned the value of such comparisons, and claim it fuels envy without looking at why CEO’s matter and what contribution they make.

Pap Dashboard delayed A pensions dashboard, which would allow everyone to see all their retirement pension pots in one place, has been delayed until at least 2023. The dashboard was due to be launched in 2019, but the IT system still needs to be built and all pension providers have not signed up to the scheme. When up and running the dashboard will allow individuals manage their pensions in one place, see their projected retirement income, and track down lost pensions. It has been estimated there are 1.6 million pension

pots worth £19.4 billion that have been unclaimed by their owners – or £13,000 per pot. Pap New CFO for Lookers Lookers, the fraud-hit car retailer, has employed its fourth CFO in 18 months. Anna Bielby has been hired as interim CFO to take over from Jim Perrie, who was in the job for just nine months. He has left after finally helping the company to publish its delayed 2019 full-year accounts last November. Beilby’s first job is to get the 2020 firsthalf results signed off. Lookers shares remain suspended.

The PQ Book Club: books you should read Be Brilliant: How to lead a life of influence, by Janine Garner (Wiley, £15) Author Janine Garner starts her book by asking a question: how do you feel about the future? She asks you to be honest, because most of us would agree that the thought is simply exhausting. It’s exhausting trying to keep up with tech, our teams, our families, our children and our friends. The list goes on, and Garner wants to show you how to slow down and turn your focus inward, so you can take ownership of who you are and who you want to become.

She even has four ‘Laws of Brilliance’ that help you to: • Discover and own your spotlight. • Harness your natural energy. • Connect and collaborate with intent. • Enhance and magnify your influence. We enjoyed the chapter on expertise, and she explains the Picasso Principle really well. If you don’t know it’s based on a story about a woman who approached Pablo Picasso and asked him to draw a sketch. He draws her a picture and gives it back to her saying “that will cost you £10,000”. She

is shocked and asks why it is so much when it only took five minutes? Picasso replies: “The sketch may have taken me only five minutes, but the learning took me 30 years!” It’s a great way of illustrating what your expertise is worth. Garner says it’s also important to stand out from the crowd. That means you need to speak, contribute, publish (a blog maybe) and share. PQ rating 4/5: This is an ideal read during a pandemic. 41

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ACCA 13-Territory Inspection Department In his review of Natsume Ono’s manga series James Beckett explains what ‘ACCA 13 – Territory Inspection Dept.’ is all about. He says: “In a kingdom divided into thirteen districts, it takes a strong system of government to keep things in check. After disgruntled citizens threatened a coup d’état a hundred years ago, the inspection department known as ACCA was formed to make sure all thirteen districts are operating free of corruption and with the interest of the people in mind above all else. Jean Otus is a perpetually drowsy chain-smoker who also happens to be one of the greatest

Had her chips Cressida Dick has been head of the Met Police in London since 2017. Before joining the police she had brief stints at a fish-and-chip shop and a large accountancy firm. In a recent Times interview she was asked about sexism and she said: “I found more sexism in the fish-and-chip shop and the accountancy firm that I worked in than in the police”


Need a bridge to nowhere? A £1 million bridge to nowhere and a £1.5 million self-powering mobile disco (Dance Cube) secretly plugged into mains electricity were just two examples that came to light in a recent report of Germany’s wasteful public spending. Other examples highlighted by the German Taxpayer’s Federation in its yearly black book include £400,000 spent on sending every Saxony resident an Easter card, and the funding of a luxury bottle water enterprise, which charged £20 a bottle!

Revisit the festival spirit

How much is that doggie? Pet ownership has soared in the pandemic, and so have all the add-ons! Someone has worked out that families spent £6.9 billion on pets last year, up from £3.4 billion a decade ago. The price of keeping a dog happy is rocketing and the annual outlay can be well over £3,000 when you add in insurance, food, vet bills, grooming and dog sitting/walking costs. That’s £38,000 over the lifetime of your pooch. The price includes the £300 for the funeral and urn, but it’s more if you get your best friend stuffed!

inspectors at ACCA; when he isn’t busy hunting down sweets for his sister Lotta or knocking back a couple of drinks with his best friend Nino, Jean is busy sniffing out chicanery across the kingdom. Now that there are murmurs of another coup brewing throughout the districts, Jean must work to prevent the collapse of his world, even if it means getting much closer to the kingdom’s conspiracies than he ever imagined.” So now you know! • ‘ACCA 13-Territory Inspection Department’ is now available as a box set on DVD and Blu-RayD.

First Intuition’s Gareth John went on LinkedIn recently to say if you missed the festival vibe in 2020 then you should revisit the AATitude. He (rightly) said that Glasto had nothing on FI’s brilliant acts. He then likened those taking part to current music artists. Rebecca Fay, the ex-AAT Apprentice of the Year, became Sigrid, and Alexandra Bond Burnett was Kylie. However, AAT’s Jamies Hughes, Steven Drew and Neil Maguire took on the mantel of the Spice Girls after Posh left (that’s harsh!). And then there’s PQ magazine editor Graham Hamby, desperate to be FatBoy Slim – he became Van Morrison. Check it out at

Sign of the times How do you ask someone for the time? Tapping your wrist may not work for much longer! Linguists have said some gestures such as the air scribble in restaurants for the bill may have to be consigned to history. It could make the simple game of charades more difficult as even motioning an old-fashion reel movie camera apparently leaves many from Generation Z baffled.


Harry Potter anyone? Where do you go when you have done ‘cute cats’ and ‘puppy’ colouring books? Well, we have gone for the ‘Harry Potter – Colouring Book’. OK, it’s aimed at the kids (and the quality isn’t up to the normal colouring-in standards we are used to), but we thought if any of you are home-schooling then this may give you some respite. There are lots of your favourite characters to colour in, so what’s not to like? To enter this giveaway send your name and address to giveaways@ Head up the email ‘Potter’ and we will enter you for the prize draw.

Pix and mix First we review them, then we give them away! There are three books up for grabs in the magazine this month. All you need to do is send us an email to be entered into the draw to win one of the following: ‘Thriving Mind – How to Cultivate a Good Life’ by Dr Jenny Brockis; ‘Great Pajama Jobs’ – Your Complete Guide to Working from Home’ by Kerry Hannon; and ‘Be Brilliant – How to Lead a Life of Influence’ by Janine Garner (which is reviewed in this issue). To be in with a chance to win one of these books send your name and address to Head up your email ‘Pix and Mix’ and we will do the rest.

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 13 February. The main draw will take place on Monday 15 February 2021.


PQ Magazine February 2021