PQ magazine, January 2022

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Incorporating NQ magazine

January 2022


JOBS MARKET LOOKS BRIGHT FOR PQs IN 2022 There may have been a pandemic, but salaries for PQ accountants still rose by 3% in the last year, according to the latest Hays UK Salary & Recruitment Trends survey for 2022. Over the next year, a steady upward trend in salaries is being predicted. Karen Young, UK director for Hays Accountancy and Finance, said the survey revealed that over half (64%) of employers awarded their staff salary rises in the last year. More (75%) plan to increase salaries over the next 12 months. PQs, however, need to take note that the skills that employers are looking

for has changed because of Covid. New data and administration skills are coming to the fore, says Young. The skills shortages are now affecting 64% of PQ employers, who are struggling to find the right people for the challenges ahead. The survey also found that 64% of PQs felt positive about their career prospects in 2022. That’s a notable increase from last year when just 43% felt that way. Check out page 26 for more on this, plus all the regional salaries.

NEW QUALIFICATION UNVEILED BY CIPFA If it wasn’t an already exciting time to be an accountant in the public sector, it’s certainly about to be. CIPFA has launched its updated and refreshed flagship accountancy qualification – the CIPFA Professional Accountancy Qualification, or PAQ for short. CIPFA told PQ magazine that in today’s fast-moving environment, the accountants of tomorrow need to stay ahead. The updated qualification will place greater emphasis on emerging digital technologies, cloud computing, big data and artificial intelligence, to equip its students with the skills they are likely to need both today and well into the future. And as finance professionals become increasingly central to the effort of protecting our planet, sustainability, green finance, environmental reporting and performance measures also now feature across the modules. The institute promised that, as

always, students will be at the heart of the new course. It is introducing an e-learning platform, which will

enable students to learn in a way that best suits them. They will be free to study more independently,

or can choose to study in a way that ensures more face-to-face time with Continued on page 4


January 2022

A note from the Editor

22 A question for Tom Hedge accounting and derivatives explained by Mr C

PQ magazine has been around for a long time, championing the cause of PQs for 20 years! Our awards are now in their 19th year and we need your nominations. You can download the nomination form at https://tinyurl.com/2p8krcfd. These are strange times, but we are hoping to bring back our awards face-toface in March next year. So please get involved. This month also sees us giving you the chance to get ‘up, up and away’ in a hot-air balloon. We have 50 fun questions that can get you there! Three winners will get a flight to remember with a friend. As it is the season of goodwill the prize is sponsored by our friends at AAT, ACCA, CIMA, CIPFA and the ICAEW. Also, don’t forget, if you didn’t have time to join us at our fifth annual conference with LSBU you can still dip into the day, as it’s all there on YouTube. Check out ‘Tomorrow’s World – a brighter future for accountants?’ at https://tinyurl.com/4bckrv9n We also look at the delay of the new AAT qualification, give you feedback on the December exams, and reveal the cost of getting qualified as a CIMA accountant. Remember, becoming a qualified management accountant is worth every penny! Keep safe and keep reading. Graham Hambly, Editor and Publisher, PQ magazine

23 AAT exams Depreciation is an important concept that you really need to understand

News 04 ACCA exam woe Yet more computer problems for ACCA December sitters 05 PQ/LSBU conference Catch up with all the action from our ‘Tomorrow’s World – a brighter future for accountants?’ event 06 New AAT qualification Stress testing pushes launch back by seven months 08 Cost of CIMA You could get qualified for just £6,000


24 CIPFA syllabus changes Anna Howard explains how the new qualification will work 26 Salary survey We run the rule over Hays’ annual salary survey – so are you getting paid what you should be?


29 A Masters degree Make yourself even more attractive to employers with a Masters 31 CIMA spotlight Our expert Jackie Durham knows exactly how you can pass your exams 32 Exam prep How long can you chill after an exam before you have to focus on the next one? 33 The tax debt NAO expresses concern about HMRC’s ability to collect what it is owed

10 ACCA changes Exam entry model set to change from summer 2022

34 Mark up and margin Why understanding the numbers is key to getting the right answer

11 RSM UK initiative Firm launches new training scheme with focus on data analytics

36 Law It’s vitally important that you know the difference between civil and criminal law

12 Tech news ‘Cyber security threat will continue to rise’, says new survey from PwC

37 Cash flow (part 2) Sarah Ardiles and Tom Clendon explain all you need to know about profit

Features, etc 14 Have your say Are us accountants as green as we make out?; taking time to appreciate good fortune; and why you should be at the PQ awards. Plus our social media round-up

38 AAT spotlight Our AAT guru Teresa Clarke tackles marginal and absorption costing 40 Interview We spoke to Level

4 apprentice Paul Mcsweeney about his study experiences 41 Careers Life at Sharon Aplin Bookkeeping; Agony Aunt Karen Young offers some more careers advice; and our book review 42 Fun The lighter side of life; and more great PQ giveaways The columnists Lisa Nelson Why it pays to keep the camera running 5 Robert Bruce FRC thriving, despite government indifference 6 Prem Sikka Why the energy market needs a radical shake-up 8 Anna Kate Phelan The value of a good night’s sleep 10 Vikki Bean Reluctant SMEs must embrace the digital age 12


17 PQ Awards 2022 We want you to be at our party – so get your nominations in now. Don’t delay! 18 Annual Bumper Quiz We are giving away three fantastic hotair balloon trips – so there’s no reason not to enter our fun quiz 21 ACCA spotlight UK Chief Claire Bennison looks back at COP26 and what it means for the accountancy profession


To subscribe go to www.pqmagazine.com ADVANCE YOUR CAREER IN ACCOUNTING www.e-careers.com (accounting) PQ Magazine January 2022

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LISA NELSON Alright Mr DeMille, I’m ready for my close-up For those not old enough to remember, and that’s probably a lot of people, these are the immortal lines from the 1950 film Sunset Boulevard, about an ageing movie star who no longer wanted by the studios becomes consumed by her own fame and the desire to once again be in front of the camera. Which brings me to an interesting piece of research that came out recently surrounding the question of ‘cameras on or cameras off’ when learning online. Researchers from James Madison University in the US had all participants watch a video lecture on Zoom and then take a quiz. One group of learners had their camera off, a second had their own camera off but could see the rest of the class and the last group had the camera on. The researchers found that those students who had the camera on and could see themselves and their peers scored highest on the quiz and significantly higher than those who had the camera off. It doesn’t answer the question why of course, and the results need to be replicated but we can sensibly conclude that having the camera on when learning online does no harm, and almost certainly helps. Our experiences indicate a reluctance for students to keep their cameras on, which given this research and the improving online experience we hope will change. Now where’s that camera… Lisa Nelson is Director of Learning at Kaplan

Whoops it happened again Those Monday morning exam blues came back with a vengeance for some UK-based ACCA December exam sitters.

There were technical issues at Cardiff, Liverpool and Southampton, as computers crashed and invigilators had difficulty getting the exams back online. Students in Reading had a 15-minute delay, too. The problems ran into the afternoon sessions. One sitter who arrived at 12.30pm for the 1.30pm exam did not get started until 3.30pm. Halfway through the exam an error message came up and they had to wait until 7.30pm before they could start again. The problem is, they along with two other sitters had a brand-new exam come up – none of their work had been saved! The sitter had to leave as they had a seven-year-old at home and there were issues with trains if they stayed the full three hours. To add to the misery of Southampton sitters there was no heating in the main hall (The White Church Room). Students were advised to bring layers!

Students who had problems should be given the option to resit under the new ACCA Action Plan, unveiled in August. The plan allows both Applied Skills and Strategic Professional exam sitters to sit a contingency exam “within the same two-week window of that sitting”. To read our day-by-day review of the actual paper exams go to www. pqmagazine.com.

Mask or no mask Some ACCA students were surprised that ACCA’s exam guidance on face coverings did not change after the confirmation of the new Omicron variant. However, the ACCA did confirm that staff would be wearing masks and likewise it would ask students to be socially responsible and continue to wear them too. However, this did not satisfy all students.

New qualification unveiled by CIPFA Continued from page 1 their classmates. The platform will also provide access to health and wellbeing support through trained mental first aiders and an online wellbeing hub. The current qualification offered by CIPFA has always been known by two names – the Professional Qualification (PQ) in the UK, and the International Public Financial Management qualification (IPFM) outside of the UK. The updated PAQ will be recognised both here in the UK and internationally under the one name, better reflecting CIPFA’s international outlook and reach. The PAQ will run alongside the PQ and IPFM, beginning with the

new intake of students in March 2022, before eventually replacing the pre-2022 programmes in the coming years. Current PQ and IPFM students will not have their studies disrupted and will remain on their current programmes. It is not just the name that has changed. Another significant change is how the course will now be structured, being divided into one certificate and three diplomas, along with a pre-learning module on ethics. The new ethics module will be mandatory and will hopefully act as a reference bank for students throughout the rest of the course. Rob Whiteman, CIPFA CEO, told PQ magazine: “The work

of a Chartered Public Finance Accountant is both more complex and more critical to the public sector than at any point in our history. “At the heart of our mission to build trust by strengthening public financial management is CIPFA’s Professional Accountancy Qualification. “I am immensely proud of CIPFA’s Professional Accountancy Qualification. These most recent changes cement its position as the key qualification for those charged with delivering sustainable public value.” • For more on the updated and refreshed qualification see page 24

In brief Pap Bina Mehta appointed chair at KPMG Partners at KPMG UK have voted to extend Bina Mehta’s term as chair by two years, to 2024. She took over at the Big 4 firms after the controversial comments from her predecessor Bill Michael saw him resign. Metha is the first women to chair the firm. She has worked at the firm for over 30 years and was the only person put forward for consideration. Michael was 4

both chair of the board and chief executive. This role has now been split and Jon Holt was elected as chief executive in April. Pap Finding senior auditors is hard Senior auditors, along with HGV technicians and veterinary surgeons, have become the hardest jobs to fill in the UK, according to research from recruitment firm Indeed. The study found that 45.5% of

senior audit roles have been ‘hard to fill’ over the last year. These posts often stay on jobs boards for over two months, and Indeed said that there simply isn’t enough qualified candidates to go around. Pap Big 4 firms need to do more Major investors have warned the Big 4 accountancy firms that they will vote to stop them working for companies at the AGM if they don’t start

to include climate risk in their audit reports, says Reuters. All four firms were sent a letter in early November, seen by Reuters, where the major investor group pointed to recent research showing more than 70% of companies lag on disclosure of the full risks associated with climate change. The letter marks an escalation in the group’s push to ensure investors are armed with the most robust information available. PQ Magazine January 2022


Discover what tomorrow’s world holds for accountants! Too many boilerplated statements There is still too much use of boilerplate or declaratory statements in company reports, says the FRC in its annual ‘Review of Corporate Governance Reporting’. The FRC said these statements are seldom substantiated by actions and examples, and therefore do not offer insight into corporate governance. While the quality of principal decisions reporting has improved, very few companies reported on areas where they underperformed or failed to meet targets. FRC’s review points out that diversity and inclusion and succession planning at board-level and through the pipeline continue to remain a concern. “There is often a lack of cohesion between policies and succession plans,” it said.

The future is bright for tomorrow’s accountants, says Professor Christine Helliar. A keynote speaker at our ‘Tomorrow’s World – a brighter future for accountants?’ conference, she said accountants should not be afraid of AI, and said in fact “AI is helping us to become much more useful to businesses and helping to save the planet”. However, in a conference poll, 32% of delegates said that accountants will

be replaced by AI in 20 years’ time. The rest – 68% – asserted that it was “not going to happen”. Helliar said accountants have always been around, even in ancient Egypt, and as technology has evolved so have accountants! She felt that AI will simply replace all of the routine, boring stuff accountants have to do. The conference covered everything from blockchain and the rise of Bitcoin to job hunting in a

post-pandemic landscape. Delegates from across the global recently joined us for our 5th annual conference with London South Bank University. Accountants from Australia, Japan, Russia, Qatar, Kenya, South African, Russia and Indonesia (to name a few) tuned in on the day. But don’t worry if you missed it – you can watch the conference, on YouTube at https://tinyurl. com/4bckrv9n.

AAT approves first NI college AAT has accredited the Northern Regional College (NRC), making it the first further education college in Northern Ireland to offer AAT qualifications. NRC is offering Level 2 and 3 AAT Bookkeeping and Accounting qualifications at its campus sites in Ballymena, Magherafelt, Newtownabbey and Coleraine. It has

commenced delivery with the first AAT cohorts and is taking bookings for future courses, including the AAT Accounting Software Level 2 Foundation Award from September 2022. Rob Alder, Head of Business Development, AAT, said: “This will

make a real difference to people of all ages who are looking to improve their skills or develop a new career path by enabling them to access high quality and well recognised courses, as well as helping employers to build their finance team’s skills.”

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PQ Magazine January 2022


ROBERT BRUCE FRC makes strides – despite Whitehall’s indifference They are in a good mood at the Financial Reporting Council – never mind that none of the reforming zeal that the government had promised has come about. The FRC’s transformation from an under-resourced, thoughtful but hobbled regulator into something more high profile has been stymied by government inaction and by the assumption in Whitehall that accountants aren’t important. But despite the lack of intellectual backing from above, it continues to drive on with its enormously useful work. The Government may have decided that these things are of little importance. The remaining wreckage of the FRC does not. Take the paper they issued on ‘What Makes A Good Audit?’. The FRC knows what the answer is likely to be. And they also know that audit firms and auditors have it in their nature to do the straightforward work. What matters is the culture. For example: “The best audits have a diverse team making the best use of new team members alongside those with greater experience and a team which encourages a culture of internal challenge at the planning stage and throughout the audit.” Or “They should persist in challenging management if management do not address the auditor’s concerns.” On this point the FRC insists that all of the team should be involved. Politicians may not care, but it is the culture of dynamic, thoughtful process that should be uppermost. Robert Bruce is an award-winning writer on accountancy for The Times

AAT new qualification launch pushed back seven months AAT has confirmed that the new launch date for its new qualification – Q2022 – will be 1 September 2022. AAT told PQ magazine that the new launch date, rescheduled from February 2022, will enable a thorough end-to-end testing of the whole system via a new controlled pilot. AAT explained that Q2022 assessments are ready to be created in its new assessment platform ATLAS Cloud. However, it feels has not had sufficient time to fully test all required functionality. AAT explained: “This means that it would be very high risk to go live in February 2022 without having had the opportunity to test the complete assessment delivery process.” AAT stressed that the priority is to ensure that when it releases

the new qualification it gets it right and does not disadvantage any students. AAT told tutors that the qualification content is not being reviewed and that there are no plans for further updates being made to any of the qualification specifications. Controlled pilots will begin in early 2022, using a limited

Get nominating for the PQ awards The window is now open for nominations to the PQ magazine awards 2022. If you want to attend the best accountancy awards around then you need to get on that shortlist. There are 20 shiny trophies up for

grabs. A new category has been added this year – ‘Graduate/ Apprentice Training Programme of the Year’. The old favourites are also there, including ‘PQ of the Year’, ‘Apprentice of the Year’ and ‘Distance Learner of the Year’, to name

selection of the new qualification. AAT director of education and development, Suzie Webb (left), said: “AAT project teams have been working incredibly hard to develop our new qualifications and assessment platform. Whilst the new qualifications and assessments are now ready to be deployed, we’re extending our testing time to ensure a smooth launch. Our intention is now to run a controlled pilot from early 2022 with selected training providers – using a small selection of the new qualifications – prior to a full launch in September. “This is not a decision which we’ve taken lightly and we’re working closely with our different stakeholders to transition to the new date.” a few. Check out the full list of categories on page 17. A nomination for the PQ awards can really help your CV stand out, so download your form today at https://tinyurl. com/2p8krcfd The deadline for entries is Friday 18 February 2022, but please don’t leave it to the last minute!

Climbdown now expected over director liability It is being reported that Business Secretary Kwasi Kwarteng (right) is looking to scrap plans to hold company directors personally liable for accounting failures, following a fierce business backlash. Kwarteng is also expected to water down the overhaul of the audit industry and rules to improve the quality of accounts. It is the fear of creating more unnecessary

red tape that seems to be the driving force here. The climbdown won’t be welcomed by auditors, who have argued that the ultimate responsibility for corporate scandals should lie with the senior management of the companies involved.

Meanwhile, a Whitehall source said: “We need to strike the right balance between strengthening our corporate governance regime – which is in dire need of reform – and ensuring burdens on business are minimised as we recover from the pandemic.”

In brief Pap Partner resigns EY partner Neil Hutt has finally resigned following an incident where he sexually harassed a female trainee on a ski trip. EY had allowed Hutt to keep his job after telling a female PQ, among other things: “I’m going to f*** you”. Following an internal investigation, the partner was fined £75,000 and agreed to go on a diversity training course. The firm’s decision, however, did not meet universal approval among staff. EY chairman Hywel Ball has now promised that the Big 4 firm 6

will do more to combat inappropriate behaviour. Pap Accountex Spain launched Accountex is expanding its reach with the launch of Accountex Spain at the IFEMA Madrid on 3-4 November 2022. There will be five separate seminar theatres and over 80 sessions, which are all free to attend. The event website will be launched on 15 January 2021 and registration will be opening in Spring 2022. For more details go to: www. accountexespana.es. Accountex’s

Caroline Hobden said: “We are very excited to launch Accountex Spain, which comes at a crucial time for the industry. This is a really important initiative, which is being well supported by the whole sector. We are also delighted to be joining forces with IFEMA to launch the show in Madrid.” Pap Call for supplier finance transparency The International Accounting Standards Board (IASB) has published proposals for changes

in the disclosure requirements and their effects on a company’s liabilities and cash flows. Supplier finance arrangements are often referred to as supply chain finance, payables finance or reverse factoring arrangements. The proposed targeted amendments to the current disclosure requirements are designed to meet investors’ demands for more detailed information to help them analyse and understand the effects of such arrangements. See the full story at www.pqmagazine.com. PQ Magazine January 2022



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PQ news

Just £6,000 will get you CIMA qualified

PREM SIKKA Energy market needs a radical shake-up Privatisation of the UK energy market has been a disaster. Governments opposed to public ownership have handed the industry to companies controlled by foreign governments. Profiteering and low investment have been rife. In the past decade, the big six energy companies have paid £23bn in dividends, equivalent of 82% of pre-tax profits and six times their corporate tax bill. The country lacks electricity generation capacity and has to rely on imports. There is little storage of gas – the UK has just nine terawatt hours of stored gas reserves, equivalent to 2% of its annual demand, compared to 168 in Italy and 151 in Germany. With recent unexpected price rises and post-Covid demand for energy, 27 UK companies have ceased trading. This includes Bulb Energy, the seventh largest energy supplier with 1.7 million customers. It has been taken over by the government at a cost of £1.7bn as other suppliers don’t want its customer contracts. The company had no employees though its parent company had 510. It had £100 share capital, £54m long-term debt, £169m net current liabilities and £223m of accumulated losses. It had no capacity to absorb market shocks. Directors claimed the company to be a going concern. For a fee of £279k auditors BDO went along with that. A rethink is needed, starting with public ownership of energy firms. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

How much will it cost you to study and qualify with CIMA over three years? CIMA has worked it out for you, and if you have no exemptions and sit and pass each exam at the first attempt then a Tier 1 student will pay just over £6,000. CIMA has a three-tier system for exam fees. Tier 1 countries include China, Cyprus, Singapore, the UK and Ireland. The 2022 cost of registration, annual subscriptions and exam fees come in at £2,410. CIMA then adds the cost of CIMAstudy Prime modules, CIMAstudy Case Study modules and CIMA study texts. These come to £3,699. If

you add these together then you pay £6,109. Remember, there is no charge for exemption fees, so this figure could come down if

you have some. For Tier 2 students the total cost of qualifying falls below £6,000 to £5,980. Tier 2 eligible countries include Bangladesh, India, Malaysia and Sri Lanka. For Tier 3 students the costs come down again. Some CIMA fees are going up in 2022. The registration fee has jumped from £77 in 2021 to £85 for 2022. However, the annual subscription rate remains the same. The cost of sitting the professional exams will also go up, from £5 to £14 per paper. You can check out all the new costs at https://tinyurl. com/338fyd6w.

Orla Collins becomes new ACCA president Dublin-based Orla Collins (right) has been appointed as the new president of the ACCA. She is the first woman president from Ireland in ACCA’s 118year history, and only the body’s fifth woman president. Collins joined the ACCA in 1997 and has been a Council member since 2012. She becomes the figurehead and leader for ACCA’s 233,000 members and 536,000 PQs

in 178 countries. She said: “For my presidential term I’ll focus on opportunity and the value of the global accountancy profession. I want to celebrate all that ACCA offers as a professional body to its members, future members and its wider community.” Collins was confirmed in her new role at the annual Council meeting after ACCA’s AGM on the

18 November. Joseph Owolabi, from Melbourne, Australia, was appointed deputy president and Ronnie Patton, a senior lecturer at Ulster University, became vice president.

Auditors lack profession scepticism Auditors’ lack of professional scepticism and failure to challenge management are still the key worries for the Financial Reporting Council (FRC), according to its annual assessment of UK audit ‘Development in Audit’. On the positive side, the report said there were examples of good practice in the use of internal and

external specialists to challenge management’s assumptions, the delaying of audit opinion signoffs to ensure sufficient time was available and robust challenge of the component auditor’s work by group auditors. Over the past year the FRC has increased the number of inspections of smaller firms that

audit public interest entities, and has found a whopping 10 out of 16 (62.5%) audits reviewed required improvements. This level of quality is unacceptable, said the FRC, and it has increased resources dedicated to supervision of the smaller firms to drive those improvements.

action of the people of the Virgin Islands. Because as one of our older politicians who has since died used to say, and I quote him, ‘the voice of the people is the voice of God’.” The move comes as the BVI faces a UK commission of inquiry into claims of corruption. There are allegations that island officials pocketed British taxpayers’ money that was meant to be used to support the islands following a series of hurricanes.

Pap AAT welcomes tax adviser move AAT has welcomed the government’s decision that it will not be proceeding with the introduction of a requirement for all tax advisers to hold Professional Indemnity Insurance (PII). AAT’s Adam Harper said: “Unregulated tax advisers account for the majority of agent-related complaints to HMRC as well as contributing to tax evasion and money laundering activities.

Additionally, their mistakes and errors leave many taxpayers facing large and unnecessary fines and penalties, whilst also costing the Exchequer hundreds of millions of pounds a year through overclaiming or wrongly claiming various tax reliefs. “If the government is serious about tackling these problems, then it should make membership of a professional body mandatory for anyone offering paid-for tax and accountancy services.”

Taxwatch Pap Tax haven looks to become a republic The British Virgin Islands is drawing up a referendum to become a republic as is squares up to the UK government’s claims of corruption. Premier Andrew Fahie said local officials are preparing a vote on greater independence for the British overseas territory. He said: “When it comes to that next move of self-determination, that has to be the decision and the


PQ Magazine January 2022

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PQ news

ANNA KATE PHELAN Sleep well and you can dream of exam success Sleep is absolutely essential for overall physical and mental health. Many of you will be combining work and study, so the time you have for sleep is more limited than at times when study is not so intense. But it is of even more importance during this time as it is key to optimal brain function and memory retention. Proper sleep hygiene is essential during this busy time period; sleep hygiene is the habits and practices that are conducive to sleeping well on a regular basis. Keeping active during the daytime hours will help you sleep well at night. Exercise is key to this, along with getting exposure to natural sunlight, as this signals to your brain that this is the time to be awake, not nighttime. Establishing a routine will also be a massive help. Try to eat breakfast within 45 minutes of waking up; research has shown you will be far less reliant on caffeine and produce more naturally occurring melatonin during the day if you do this, which will cause you to sleep better. This may prove difficult, but limit your caffeine intake to three cups of coffee a day or four cups of tea and avoid any caffeine after 3pm. Switch off all electronic devices an hour before bedtime and leave them outside of the bedroom. Do not be tempted to check them, even for the time, if you wake in the night, as this may cause worry and lead to you not being able to sleep. Hope this is helpful advice, and you all have a restful festive period and a happy new year! Anna Kate Phelan is Senior Product Manager at Eintech

ACCA changes exam entry model for summer 2022 ACCA is making changes to simplify its exam entry model, which will come into effect from the June 2022 exam session. Following a review of how students and partners use the existing model, the changes are designed to make it easier for students to do business with ACCA. From June 2022, the exam entry window will be opened for three months (it was seven months).

IASB proposes amendments to IAS 1 The International Accounting Standards Board (IASB) has proposed amendments to IAS 1 Presentation of Financial Statements, to improve the information companies provide about long-term debt with covenants. IAS 1 requires a company to classify a liability as non-current only if the company has a right to defer settlement of the liability for at least 12 months after the reporting date. However, such a right is often subject to the company complying with covenants after the reporting date.

The proposed amendments would specify that, in such a situation, covenants would not affect the classification of a liability

as current or non-current at the reporting date. Instead, a company would: • Present non-current liabilities that are subject to covenants on the statement of financial position separately from other non-current liabilities; and • Disclose information about the covenants in the notes to its financial statements, including their nature and whether the company would have complied with them based on its circumstances at the reporting date.

Leeds Council to halve office estate Leeds City Council has unveiled ambitious plans to reduce its core office estate by 50% over the next five years. A new strategy reveals that the pandemic has accelerated the need for a ‘new plan’.

Official Receiver hits KPMG with £250m claim The government agency in charge of liquidatiing Carillion plc, the Official Receiver, has lodged a claim at the High Court against auditor KPMG. The Official Receiver is alleging negligence by KPMG and is claiming £250 million. Full details of the legal claim are expected to be made public by the end of this year. KPMG is reported as saying Carillion’s board and management are solely responsible for the collapse of the firm. The Big 4 firm was paid £29 million to audit Carillion and signed off the 10

ACCA will only have one exam session open at any one time,

instead of two. And the early exam entry period is going. There will only be standard and late entry from the June sitting onwards. So, that means for the June 2022 exams the standard entry period will begin on 8 February 2022 and close on the 2 May 2022. Late entry will open on 3 May 2022 and close on 9 May 2022. Exam entries can still be amended/cancelled up until the standard entry closing date, and students can still book up to four sittings per session and up to a maximum of eight exams per calendar year.

Councillor Debra Coupar said: “The pandemic has resulted in changes to our daily lives, many of which will be with us for a long time and some will become permanent. For the Council, the pandemic has changed the way

company accounts nine months before its failed. Carillion collapsed in early 2018 with £7 billion of liabilities and just £29 million of cash in the bank. At the time of its collapse, the firm held nearly 500 construction and service contracts across the government. The green jobs market The transformation to a net zero economy is feeding through to the employment market, accounting for 1.2% of total advertised jobs. That equates to 124,600 new jobs for the year to July 2021. However, PwC says that disparities are arising in how the transition to greener jobs is affecting different parts of the UK. The findings come from PwC’s Green Jobs

that some services are delivered and the way that politicians and staff work. This will change the way we use our buildings and will allow us to reduce the size of our estate to help to meet the financial challenges we continue to face as a result of not only the pandemic but yearon-year reductions in the level of funding received from central government.”

Barometer – analysis tracking movements in green job creation, job loss, carbon intensity of employment, and worker sentiment across regions and sectors. Currently, the proportion of new green jobs is small, but each new green job generates a further 1.4 jobs (rising to six jobs for the energy sector), through increased demand for goods and services in the supply chain. This figure should also grow as the UK accelerates efforts to transition to net zero. Nevertheless, the scale-up will need to intensify to meet government targets of two million green jobs by 2030. More work is needed now to ensure the green jobs transition doesn’t exacerbate regional inequalities, says the report. PQ Magazine January 2022

news PQ

RSM UK launches data skills programme RSM UK has unveiled a firmwide extensive digital upskilling programme, a key part of which includes an MSc in data analytics. The fully accredited degree, in partnership with BPP University, will form part of a substantial investment by RSM in data analytics skills. The firm will welcome its first cohort onto the MSc in January 2022. The qualification will cover programming and modelling for data analysis as well as emerging technology and automation, and is

being offered to staff and partners across the firm. RSM UK’s chief digital office, Chris Knowles, said: “We want

You can’t sell questions! ACCA student Miss Ying Zhong of China has been severely reprimanded after offering to sell ACCA F1, F3 and F4 exam questions on the China-based consumer site Taoboo.com. ACCA received a referral from the British Council office in China, and although the pages were subsequently removed from the website by Ms Zhong, screenshots were obtained before they were

taken down. The advert included a screenshot of an F4 exam results page, although the name of the

to give everyone at RSM the opportunity to build their data analytics and digital skills, enabling them to excel in their careers and deliver the best possible digital services to our clients. “Demand for digital skills has never been greater, and being able to story-tell with data is the absolute foundation of all other digital skills investments we are making. We need to empower our workforce to respond to the rapidly changing needs of our clients and the digital workplace.” student and exam centre had been covered over. However, Ms Zhong’s ACCA ID number was visible in the bottom lefthand corner and had not been obscured. ACCA said that it is illicit for students to sell exam questions and that, by doing so, Ms Zhong was assisting others to gain an unfair advantage in their ACCA exams. On top of the severe reprimanded she was ordered to pay cost of £5,487.

Women on the rise Women now make up 50% of the student intake of the seven accountancy bodies based in the UK and Ireland, according to figures from the Financial Reporting Council. ACCA really helps to push the number up, as 60% of its sign-ups are female. The AIA also has a healthy 57% female intake. Bottom of the list is ICAS, where the number of women signing training contracts is just 42%. Meanwhile, there has been a steady rise in the number of women attracted to the ICAEW qualification, but it still stands at only 46%. Although that’s much better than the 42% in 2016. Women now make up 37% of the qualified members of the seven bodies worldwide. ACCA again leads the way here with 48% of its members female. At the other end of the scale is the ICAEW, where women make up just 30% of its membership. Surprisingly, CIPFA isn’t much better than the ICAEW, with 33% of its members being female.


+44 7593 644 390 SUNILBHANDARI.COM PQ Magazine January 2022


tech news

‘Cyber security threats will rise’

VIKKI BEAN ‘Reluctant’ SMEs must embrace the digital age Accountants know all too well that small business owners who embrace technology enjoy more efficiency, flexibility and even profitability than those who don’t. Despite knowing the benefits, many small businesses are still slow to adopt technology. At Xero, we wanted to dive deeper into what’s holding them back: to help businesses overcome these barriers. So we conducted a behavioural insights study that uncovers the human factors stopping technology adoption. Only four out of 10 UK small firms are open to taking risks when making business decisions, while five out of 10 are reluctant to accept the risk of negative outcomes from tech-related decisions. Day-to-day survival is clearly a priority, with seven out of 10 admitting they are focused on this rather than how to better run their business. With digital tax deadlines looming and the impact of Covid still being felt, small businesses are showing huge resilience, but they will need the right digital tools to thrive in the future. That’s where accountants and bookkeepers can play an invaluable role. As trusted advisors who are often already digitising processes, they are in a strong position to reassure businesses and demonstrate in real-time the benefits. This can help encourage rational decisions among small business clients. You can read our One Step report at https://www.xero.com/one-step/ Vikki Bean is Director of Global Education and Delivery at Xero

Almost two-thirds (66%) of UK businesses leaders expect the threat from cyber criminals to increase over the next 12 months, according to the latest PwC cyber security survey. Over the past year, a number of prominent ransomware attacks have caused a significant impact on organisations already dealing with the challenges posed by the pandemic. There is also now the added threat of ‘ransomware as a service’, in which ransomware developers lease out their malware in exchange for a share of the criminal profits. PwC’s research found that 61% of UK respondents expect to see an increase in reportable ransomware incidents in 2022.

Expectations of an increase in ransomware attacks reflects UK businesses’ concern about a broader increase over the next 12 months in cyber threats, including business email compromise (61%) and malware via software updates (63%). PwC’s Bobbie Ramsden-Knowles said: “It’s impossible to ignore the threat from ransomware attacks as criminal groups become more

brazen and scale their operations through ‘ransomware as a service’ and the use of affiliate criminal groups. “Whereas other types of crises may be perceived as ‘black swan’ events that cannot be predicted, ransomware attacks have become so widespread that we have seen a common set of challenges and decisions that all organisations would face. Developing – and aligning – ransomware playbooks for executive crisis teams and operational responders is a no-regrets move. And testing these through wargames and exercises can reduce uncertainty, build confidence in the ability to respond and help prioritise focus on preventative measures.”

Tax raid on Bitcoin exchanges? Bitcoin exchanges such as Coinbase have been told by HMRC that they will be subject to the Treasury’s tech tax levy, which was introduced to ensure tech giants such as Google and Meta pay more to the Exchequer. HMRC said that crypto assets

“are not financial instruments” and do not in its view qualify as commodities or money, meaning online exchanges that sell cryptocurrencies such as Bitcoin and Ethereum are not able to claim an exemption for financial marketplaces. The digital services tax puts a

Big Brother is watching Digital security and privacy expert Avast has re-released Geroge Orwell’s ‘Nineteen Eighty-Four’ as ‘Twenty Twenty-One’ to highlight the similarities between today’s increasing online surveillance and the ‘big brother’ society Orwell predicted. It even got former Dr Who, Matt Smith (right), to read Winston Smith’s diary entries. Avast describes its mission is to protect digital freedom for everyone,

which includes securing their online privacy. As part of the campaign, new research was conducted to explore people’s relationship with their online data and how it might be at risk. The research reveals that as many as seven in 10 (69%) are concerned that their

2% levy on online marketplaces, search engines and social media services that have a global revenue of over £500 million and UK sales of over £25 million. However, the tax will be phased out when the tax deal agreed by the G20 replaces the levy.

online activity might be tracked and monitored by the sites and applications they use, and nearly half (45%) also feel that companies who track and record personal data have too much access to important information. You can listen the 2021 audiobook featuring Matt Smith on Spotify and Apple podcasts. Go to https:// tinyurl.com/3z4pyb2b.

Tech briefs Pap Facebook must sell Giphy The Competition and Markets Authority has said that Facebook (recently renamed Meta) has to sell Giphy, after finding that the merger could harm social media users and UK advertisers. The independent CMA panel reviewing the deal has concluded that Facebook would be able to increase its already significant market power in relation to other social media platforms by: • Denying or limiting other 12

platforms’ access to Giphy GIFs, driving more traffic to Facebook-owned sites – Facebook, WhatsApp and Instagram – which already account for 73% of user time spent on social media in the UK. • Changing the terms of access by, for example, requiring TikTok, Twitter and Snapchat to provide more user data in order to access Giphy GIFs. Read the full press release at https://tinyurl.com/2p88p937.

Pap Sky router security flaw Some six million Sky routers suffered from a serious software bug that could have allowed hackers to take over entire home networks, says security firm Pen Test Partner. And while the problem has now been fixed it took Sky 18 months to sort it. The affected models were: Sky Hub 3 (ER110), Sky Hub 3.5 (ER115), Booster 3 (EE120), Sky Hub (SR101), Sky Hub 4 (SR203) and Booster 4 (SE210).

Pap Try Anna Money Anna Money was ’on show’ at the recent AccountingWEB Live Expo in Coventry. They offer a business account and tax app for small businesses. So, on top of the normal services banks provide, businesses can create and send invoices, automatically chase unpaid invoices, and they get automated bookkeeping. It’s fully integrated with Xero and HMRC compatible for MTD, and the accountant gets easy access to their clients’ transactions too. PQ Magazine January 2022


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How green are we? You (and I mean PQ here) seem to be convinced that accountants will save the planet, but I am not so sure. In fact, I think you are being a bit naive. Why has it taken them so long to realise there is no Planet B? Or have they finally worked out they can make money from it? I am an accountant, so I do accept I have been part of the problem, but it’s 2021 and we have only just created the International Sustainability Standards Board. It is being called a once-in-alifetime opportunity to help shape global reporting standards that include the planet, but everything needs to quicken up from here. Last month, where you talked

about creating standards to save the planet, another story showed that just a tiny number of firms have set net zero targets. Then there is ‘greenwashing’,

where accountants have enabled corporations to look respectable, while they help destroy the planet in the name of profit. My fear is as time goes by and COP26 becomes a distant memory then sustainability will move down the agenda and other issues such as AI and cyber security will take centre stage. Name and email address supplied The Editor says: It is true I have faith that the profession can be a leading catalyst for lasting change. But we all need to be in the game! There is no going back now, and I honestly do think that accountants will be at the forefront in making a greener world happen.

Our star letter writer wins a fantastic ‘I love PQ’ mug! Keep your socks on I do love PQ magazine, I hope it’s OK to say that! But can I say that I generally read you with my socks on (see PQ magazine, December, page 42). I had to laugh and then reassess what I thought when I read your story about students who would do anything to make their world and that of their family a better place. It means invigilators make students sit their exams without socks or shoes. Sometimes we pretend to have ethical boundaries, but we never get them really tested. I am not a cheat, but if my family had invested all their savings in me I don’t know how I would react. Some times you have to be grateful about where you were born, And maybe you shouldn’t be surprised that other people want that same advantage. Name and address supplied

I will be there! I’m lucky to have been at not one but two PQ magazine awards at the Café de Paris. Can I say they weren’t what I expected! I have been to posh hotels for award ceremonies – and yours were not like those! They were better… I felt part of a whole industry working to help people get qualified. I see

the 2022 awards were launched last month and I would encourage everyone to get nominating. It’s a unique night for the profession – in a good way! Name and address supplied The Editor says: Thank you for the

‘big up’. But there is a serious side to our awards. They promote best practice and highlight the good things going on in the profession. Our awards are definitely shiny, but people want to win them because they mean so much!

Mask or no mask? That was the question being asked by many ACCA December sitters online. As one PQ said: “I’m used to them now, happy to as they also keep my face warm!” This got people reminiscing about sitting exams in halls so cold you could see your own breath. It is always just before the exams that the Facebook groups really come into their own. Many stressed PQs will be waiting until after the exams before they get into the Christmas spirit, and are worried by then it might have been cancelled! The LSBU/ PQ magazine fifth annual conference ‘Tomorrow’s World – a brighter future for accountants?’ is up on YouTube now. Check it out at https://tinyurl. com/4bckrv9n. Gavin Brown gave a great session on Fintech and cryptocurrency (he’s the keynote in the afternoon session). He looks at the new words that are increasingly becoming part of the language in accountancy and finance, such as market contracts, decentralised finance and blockchain. During the day we took a number of polls, and the results make interesting reading… • Which one of the following do you think will drive the role of accountants to change significantly in the future? Technology – 75% Sustainability - 24% Profitability – 1% Governance – 0% • Do you own cryptocurrency? Yes – 12% No – 76% Looking to buy – 12% • Do you think that accountant will be replaced by AI within: The next five years – 6% The next 10 years – 9% The next 20 years – 17% Not going to happen – 68% So accountants really don’t see themselves being replaced by AI any time soon, which is good news – and they are right, of course!

PQ Magazine PO Box 75983, London E11 9GS | Phone: 07765 386489 | Email: graham@pqmagazine.com Website: www.pqmagazine.com | Editor/publisher: Graham Hambly graham@pqmagazine.com | Associate editor: Adam Riches | Art editor: Tim Parker Contributors: Robert Bruce, Prem Sikka, Lisa Nelson, Anna Kate Phelan, Tony Kelly, Phil Gammon, Edward Netherton | Subscriptions: subscriptions@pqmagazine.com | Origination services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email admin@pqmagazine.com

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awards 2022 PQ









It really is time to get your nominations for the PQ awards 2022 sorted!


e need your nominations for the PQ magazine awards 2022, so don’t delay – get the form filled out and whiz it over to us asap. There are 20 coveted shiny PQ trophies up for grabs at our 19th awards night. Remember, our awards could be all about you (yes, you can nominate yourself) – or it could be your chance to nominate someone who never gets the plaudits they deserve. Maybe you know a PQ who needs recognition, or a top tutor that helped pick you up when you were down? Well, we want to shine a light on them all! Some 900 people joined us at last year’s live online awards ceremony, and over 2,000 people have watched them since. You can check them out at https://tinyurl. com/26bv9tb6. This time we are planning to have some real-life guests with us when we announced the winners! Among the winners were the University of West London, who won ‘Public Sector College of the Year’, and Kaplan, who took the private sector crown. It was a night of recognition for the NHS, too. The finance

team at University Hospitals Birmingham NHS Foundation Trust won ‘Accountancy Team of the Year’ and Andy Hardy, CEO of University Hospitals Coventry and Warwickshire NHS Trust, walked off with the ‘Personality of the Year’. CIMA had a good night. CIMA’s Jason Nye won ‘Best Use of Social Media’, ‘Apprentice of the Year went to CIMA PQ Haider Ali and ‘NQ of the Year’ was awarded to Laura Day-Henderson, a CIMA recently qualified. You can download the nomination form from the website at https://tinyurl.com/bdeb688e. You then have 250 words to make your case. If you don’t feel that is enough just provide your supporting material separately, and we will make sure the judges see both. Once you have everything together send it to awards@pqmagazine.com or post to The Editor, PQ magazine, PO Box 75983, London E11 9GS. Our independent judges see everything before deciding on the shortlist for each category. And if you make it onto the list you will be invited (free) to the fantastic awards night in London. The deadline for entries is Friday 18 February 2022.











(*New category)


PQ Magazine January 2022


PQ annual quiz

PQ Bumper Quiz Back by popular demand, here is our annual bumper quiz. Big thanks go to our sponsors – AAT, ACCA, CIMA, CIPFA and ICAEW. Well, it is the season of goodwill! This year we are giving three lucky winners the chance to win a fantastic hot air balloon adventure for two people (see box). Good luck!


What TV series showed the first interracial kiss on US network television?

5 6 7 8

Which city hosted COP26, the UN Climate Change conference, in November 2021?

1 2 3 4

What awards has an EGOT winner won?

Which country became the first to adopt bitcoin as legal tender?

Gillian Anderson plays a therapist in which hit Netflix show?

Facebook has changed its name. What is it known as now?

The Accountant 2 film is apparently back on, but who played the lead accountant in the first film?

Amazon recently announced it has plans for a “mixed use business park”. What makes it special?

In 2012, who won a Tony Award for Best Actor in a Play for his Broadway performance in the comedy play ‘One Man, Two Guvnors?’

9 What was the name of the container ship that blocked one of the busiest waterways in March 2021?


A volcano eruption in Iceland this year near its capital lasted over six months, becoming a major tourist attraction. Which mount was it close to?


ENTERTAINMENT & MEDIA The head of Google, Sundar Pichai, claimed AI will have a bigger impact on the world than three things – the internet and electricity are two, but what was the third?


A new £50 polymer banknote entered circulation in 2021. Which computer pioneer features on the note?


Which shop group closed its final store on 15 May 2021 after 240 years of trading?

7 8

Which UK city lost its UNESCO World Heritage status after developments along the city’s waterfront?

How many points did UK entrant James Newman’s song ‘Embers’ score at the Eurovision Song Contest?


Alexandria Ocasio-Cortez turned up to the Met Ball with a dress calling for action. What did she want?


A new right-leaning TV channel was launched in June 2021 in the UK. What was it called?


Including the recruiter round how many games were there in Squid Game?


The new Bond film finally hit our screens this year, but who sang the theme tune ‘No Time to Die?’


SPORT Bradly Sinden is studying for a finance and accountancy degree. He recently won an Olympic medal, but in what sport?


Who beat Chelsea 1-0 in the 2021 Cup Final?


Thanks to our sponsors


PQ Magazine January 2022

annual quiz PQ

Up, up and away… about the prize Three lucky winners will be sent a voucher for a fantastic hot air balloon flight for two people, to be taken within 12 months (weekdays only). The package also includes: • Greeting, registration and pilot briefing. • 60-minute flight in a Virgin balloon. • Celebratory prosecco toast on landing. • Flight certificate. • Retrieval service back to your take-off point. Remember, once you have the voucher it’s up to you to make all the necessary arrangements. Virgin has 100 ‘take-off’ points so there’s bound to be one near you. Check it out at https://tinyurl.com/yckza7vp – and please note Virgin’s terms and conditions.

Where did Vaclav Havel lead the so-called Velvet Revolution?

6 7

Julius Caesar was assassinated on 15 March 44 BC, a date now often known by what term? Which 19th-century Englishwoman became the first qualified medical doctor?

8 9 10

Which Venezuelan was known as the Liberator of Latin America?

Where did a 1791 slave uprising eventually lead to revolution and independence from French colonialism?

GENERAL KNOWLEDGE What does the AC button on a calculator stand for?

1 2 3

What is the smallest country in the world?

Who made history this year by becoming the first woman to reach a darts’ Grand Slam quarter-final?



Which novel begins, “It was a bright cold day in April, and the clocks were striking thirteen.” What is Scooby Doo's full name?


Which English monarch officially made Valentine's Day a holiday in 1537?

1 2

Where did Sirimavo Bandaranaike become the world’s first female Prime Minister in 1960? Who was the first woman to win a Nobel Prize (in 1903)?

3 4 Who won the 2021 World Snooker Championship in May?

3 4

Which Premier League match was postponed when fans broke into a ground to protest against their owners? In September, who became the first qualifier in history to win a grand slam tennis tournament?


Which is the only American Football team to go a whole season undefeated, including the Super Bowl?


Which country won the first-ever soccer World Cup in 1930?

7 8 9

Who was the first gymnast to score a perfect 10 score?

Dump, floater, and wipe are terms used in which team sport?

PQ Magazine January 2022

Cecil Chubb’s wife was angered when she sent him to an auction to buy dining chairs in 1915 and he instead purchased which prehistoric monument? Demolition of the Berlin wall separating East and West Berlin began in what year?


What is the name for a donkey crossed with a zebra?

5 6 7 8 9 10

How many colours are there in the rainbow?

Area 51 is located in which state? What is the loudest animal on Earth?

The unicorn is the national animal of which country? What is a group of ravens known as?

Send your answers to the editor: graham@pqmagazine.com. Put ‘Bumper Quiz’ in the header. Closing date for entries is Monday 24th January. 19


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Leading Inclusion The latest professional insights report from ACCA, Leading Inclusion, discusses the important subjects of diversity, inclusion and equity. Ensuring that accountancy is a profession that is open to everyone.


ACCA spotlight PQ

A brighter future for accountants Claire Bennison (pictured), head of ACCA UK, looks back at COP26 and what this means for the accountancy profession


recently had the pleasure to speak at the PQ and London South Bank University (LSBU) event Tomorrow’s World – a brighter future for accountants? (see https:// tinyurl.com/4bckrv9n). This event’s title was timely and very relevant as it came within two weeks of COP26 closing, when many of us were wondering what the future holds. But as I said in my opening remarks, there was one change I’d have liked to have made to that title – and that was removing the question mark. That’s because in ACCA’s view, an exciting era is dawning for the accountancy profession. Now is the time for accountants to take on new roles, with new responsibilities which sees them acting as strategic leaders, entrepreneurs and visionaries in a world that is changing rapidly. The pace of change is daunting, and certainly the lessons we took from the COP26 conference in Glasgow were sobering. We heard almost unanimous agreement among delegates and from decision-makers beyond the venue that urgent action is essential to turn down the thermostat on our over-heating planet. Yet there was much less unity among Governments on what any immediate action should include. While the closing statement recognised the importance of the Glasgow Climate Pact, the official messaging was that keeping the 1.5 degree target alive was a PQ Magazine January 2022

“fragile win”. But there were reasons for optimism coming out of COP26, and that matters a great deal for PQ readers – students, members, lecturers – because of the critical role that presents itself to finance professionals at this crucial moment in history. There was one particularly remarkable day of debate at COP26 that was dubbed Finance Wednesday where the announcements amounted to something of a manifesto for a new way of doing business which places purpose and the planet before profit. A significant announcement came from Mark Carney, co-chair of the Glasgow Financial Alliance for Net Zero (Gfanz) – a global group of 160-plus financial institutions that have made their own net-zero

commitments and aim to unlock the trillions needed to achieve a resilient, zero-emissions future. In their press release, they stated that all Gfanz member alliances must use science-based guidelines to reach net-zero emissions, cover all emission scopes, include 2030 interim target setting, and commit to transparent reporting and accounting aligned to the UN Race to Zero criteria. Carney warned that “companies that have plans in place to reduce the emissions, will find the capital, those who don’t won’t”. Carney also talked about the importance of more accurate, responsive, and planet-aware corporate reporting, adding: “We will have the feedback about who is doing well, who needs to do better, and also in terms of policy, what’s there and what’s not.” Soon after the Gfanz announcement we heard from the IFRS Foundation Trustee Chair Erkki Liikanen about the creation of the International Sustainability Standards Board (ISSB). This development offers a unique opportunity to help shape global reporting standards for the benefit of investors, economies and the public good, and it will play a vital role in tackling the global environmental and social challenges ahead. ACCA ensured that small business had a voice at COP26 too, as we launched a report with Sage and the International Chambers of Commerce called ‘Think Small First’. Here, we recognised that millions of small businesses want to play their part in the battle against climate change, but the current carbon reporting regime makes it too difficult. They don’t have dedicated sustainability officers, or teams of specialists to help with regulations. That’s why accountants need to continue to support small businesses, and why there’s a real value and opportunity for members working as small business accountants. With a bright future ahead comes many challenges, especially as accountants will play such a key role as the champions of a new way of doing business that takes into account the health of the planet as well as the balance sheet. So as a profession we all need to support ourselves to be ready to take up these challenges, to ensure we possess the skills that will ensure we’re involved in the change that needs to happen. We know from our research Climate action and the accountancy profession: building a sustainable future that many in the profession see this important – 75% told us it’s important that finance teams are involved in supporting their organisations to tackle climate change. I’ll end this article in the same way I ended my speech at the excellent and engaging PQ LSBU event – to assert that the future is bright for accountants, without question. • Claire Bennison, head of ACCA UK Check out the PQ magzine/LSBU conference ‘Tomorrow’s world – a brighter future for accountants?’ at https://tinyurl. com/4bckrv9n 21

PQ derivatives

A question for Tom This month Tom Clendon answers your question about derivatives and hedge accounting Question I don’t understand accounting for derivatives and hedge accounting. What are derivatives? Tom’s answer Derivatives are complex financial instruments that are entered into at little or no cost and are designed to be settled at a future date. They are called derivatives because their value will derive from the price of an underlying item. Thus, a forward contract to buy foreign currency or a commodity at a fixed price in the future will vary in value as the exchange rate or price of the commodity varies in the meantime. Other examples of derivatives are futures, swaps, and options. How are derivatives accounted for? Because derivatives have no cost but will change in value then they are required to be re-measured at fair value every year. The default is to assume that the derivative has been entered into for speculation purposes and so the gain or loss is recognised in profit or loss. In other words, the default is that

derivatives are accounted at FVTPL. What about hedge accounting? If a derivative is designated a hedging instrument, it means it is intended to cover / offset / counterbalance a loss that might arise

on a risk that the company faces. The objective of hedge accounting is to match the loss on the risk with the gain that will be generated by the derivative. Fair value hedge If the risk being hedged relates to changes in the carrying value of assets or liabilities such that the loss on the risk is recognised in either profit or loss or equity (OCI), then hedge accounting looks to offset that loss on the risk with the gain on the derivative. Thus, with a fair value hedge there is an instant match. Cash flow hedge But if the risk being hedged is a highly probable future transaction – then there is no recognition of any loss on this in the financial statements (as it is a future transaction). In these circumstances there cannot be an immediate offset with any gain on the derivative. With a cash flow hedge the gain on the derivative is taken to equity (OCI) to the extent that is effective. It will subsequently be recycled back to profit or loss when the future cash flow arises and throws up a loss. In this way the substance of hedge accounting to match the loss on the risk and the gain on the derivative (the hedging instrument) is eventually achieved. • Tom Clendon FCCA is a podcaster and SBR online lecturer. Go to www.tomclendon.co.uk

Rethinking sustainable business Develop your understanding of the issues related to sustainability, the impact on organisations and the part you can play with the ACCA Sustainability Hub. Access the hub WR ğQG D ZLGH UDQJH RI UHVRXUFHV DQG VHDUFK sustainability events and webinars. bit.ly/3jpdm97


PQ Magazine January 2022

AAT exams PQ

What is depreciation? For the second year the calculation would be: Annual depreciation charge = £200,000 - £30,000 x 15% = £25,500 As you can see, the depreciation amount reduces every year. Units of Production This method is based on usage of the asset, so more activity equals a higher depreciation charge, lower activity equals a lower depreciation charge. Example: Annual depreciation charge = Current years activity Expected activity in useful life

Cost – residual value x

Annual depreciation charge = £120,000 x

£500,000 = £100,000 5 years

Reducing Balance (also called Diminishing Balance) This method assumes a higher amount of depreciation to be charged in the early years, which reduces over time. The method uses the carrying amount of the asset to base the depreciation calculation on rather than the cost. Example: Annual depreciation charge = Carrying amount x% If a business purchased an asset with a cost of £200,000 and depreciates this at 15% per annum using the reducing balance basis, we would calculate the depreciation as follows in the first year: Annual depreciation charge = £200,000 x 15% = £30,000


Annual depreciation charge =

£700,000 = £140,000 5 years

Or: Cost – estimated residual value x percentage given = annual depreciation charge. If a business purchased an asset with a cost of £500,000 and an expected useful economic life of 5 years, we would calculate the depreciation as follows:

Questions 1. If a business purchased an asset with a cost of £700,000 and an expected useful economic life of five years, what would be the annual depreciation charge? 2. If a business purchased an asset with a cost of £400,000, estimated residual value of £50,000 and an expected useful economic life of four years, what would be the annual depreciation charge? 3. If a business purchased plant and machinery with a cost of £880,000 and an expected useful economic life of 200,000 machine hours, what would be the annual depreciation charge if the year one machine hours used were 10,000? • Karen Groves is an AAT tutor and AAT Course Director at e-Careers

1 Annual depreciation charge =

Cost - estimated residual value Useful economic life

£400,000 - £50,000 = £87,500 4 years

Annual depreciation charge =

A further example of an asset that this method would be suitable for could include a photocopier, which has an average life of a set number of photocopies.

2 Annual depreciation charge =

Straight Line This method assumes that the asset will have


12,000 = £24,000 60,000

3 Annual depreciation charge =

How do we calculate depreciation? Before calculating depreciation, we need to establish if there is a residual value. The residual value is the amount that the business expects the asset to be sold for at the end of its useful economic life, however this isn’t assessed in every question. The useful economic life can be in years or in activity output. There are three methods of calculating depreciation as follows, with the most suitable method being chosen by management:

the same amount of depreciation charged each year, so a consistent amount charged over the asset’s useful economic life.

10,000 = £44,000 200,000


epreciation is the reduction in value of an asset due to mainly wear and tear, and obsolescence, caused by changes in technology, for example. If you buy a new car today, it would not be worth the same as what you would pay for the car in a year’s time – the drop in value is called depreciation. The non-current asset will be shown at cost on the Statement of Financial Position, together with accumulated depreciation and the carrying amount for your Level 3 studies. At Level 4 the carrying amount only is shown with the depreciation calculations shown in the notes to the financial statements. The accumulated depreciation represents the total amount of depreciation charged to date. The carrying amount represents what the asset is worth now (cost minus accumulated depreciation). Depreciation is an estimate, and it is very unlikely an asset would be sold for the same amount as the carrying amount.

£880,000 x

For both your AAT Level 3 and Level 4 studies, you will be required to calculate depreciation. Karen Groves explains how to do this

If a business purchased machinery with a cost of £120,000 and an expected useful economic life of 60,000 machine hours, we would calculate the depreciation as follows, if the year one machine hours used were 12,000:

Looking for Government funding for your AAT Level 3 course? e-Careers can for a limited time only, help you access government funding and loans to upskill for the Level 3 AAT Advanced Diploma in Accounting course. Please contact our career consultants on 020 3198 7606 for further information. PQ Magazine January 2022



CIPFA’s qualification refresh CIPFA’s Anna Howard (pictured) explains how the new Professional Accountancy Qualification will work


he world has changed so much recently. Politically, economically and environmentally – there is a great deal of uncertainty surrounding global events, which will inevitably impact everyone in some way, if it hasn’t already. The pandemic has undoubtedly altered how we live day-to-day, with the full ramifications of those changes still to be felt. The climate crisis also has the terrifying potential to take a terrible toll on the human population unless we make drastic changes sooner rather than later. Politics also seems to have changed fundamentally, while the rapid rise of ever new and emerging technologies promise radical changes to how the world operates. It's time for an update Just as the world is evolving and changing, so must we. Standing still will leave us behind as the world races ahead. This is exactly why we have taken the opportunity to reform and rebuild our Professional Qualification, which has always offered students the best foundation for a role in public sector finance. After a long period of extensive consultation, discussion and collaboration, we are pleased to present the new CIPFA Professional Accountancy Qualification, or CIPFA PAQ for short. The new qualification includes some significant changes, while still remaining focused on giving our students the best possible preparation for the unique demands of the modern and diverse public sector. We have changed the name Most obviously the name has changed. This is to better reflect the international nature of the PAQ. The qualification will now be consistent wherever a student is located. CIPFA is an international organisation with a presence in the UK, so we felt it was important that our flagship qualification acknowledge this fact. Another important change is the structure of the course. The new syllabus will contain four modules that, when all passed, will result in both


the PAQ and designation of a Chartered Public Finance Accountant being awarded. The four modules are one certificate and three diplomas. They are: • Certificate in Management and Financial Accounting. • Diploma in Financial Management and Financial Audit. • Diploma in Governance, Risk and Taxation. • Diploma in Public Financial Management, Reporting and Business Change. Awards are given for each stage successfully completed to aid and encourage progression. The modules have been designed so that they map the educational journey beginning at an undergraduate level. As students progress throughout the course, the modules become more similar to a postgraduate level of study. There’s new content, too But the course structure isn’t where the changes end. The actual content of the course has been substantially refreshed and updated to better reflect the demands of working in the modern public sector. Sustainability is now at the top of government agendas and priorities around the world, and quite rightly too. In order to successfully deliver the government’s ambitious net zero strategy, public sector finance professionals will be central in protecting our places and planet, and need to be involved in the decision-making process. They will need to ensure scarce funds are best delivered to have the biggest positive impact not only on the environment but also on communities across the country. Ensuring value for money will, as always, be crucial. The PAQ will acknowledge this urgent need, and contain more focus on sustainability, green finance, environmental reporting and performance measures. There is also an emphasis on strategic delivery in a changing

environment, as well as the importance of procuring sustainably. These skills will become vital as the public sector adapts and changes to tackle climate change, so it is imperative that we introduce these to our students early on in their accountancy journey to best prepare them for the future. The race to fight climate change is not the only race being run, however. The relentless pace of technological development will have an increasing impact on how our public sector professionals do their jobs, and those in finance departments are no exception. Technology is changing how we manage public finances, and across a number of modules in the updated syllabus the characteristics and benefits of big data and data analytics are considered. Emerging technologies such as cloud computing, artificial intelligence, cyber risk, cryptocurrencies, automation and blockchain will also be explored. Ethics comes to the fore Along with the importance of sustainability and technology, we must also be mindful of the guiding principles of working in the public sector – transparency, honesty and openness, along with a drive to improve the lives of individuals and communities. As the first professional accountancy body to adopt the International Ethical Standards Board of Accountants Code as our own standard of professional practice, there is now a renewed focus on this area across the new syllabus. We have created a new ethics e-learning module which is to be taken before students begin their studies. This then forms a central resource bank for students that is referenced as they progress throughout the programme. It was really important to us that students who are currently studying the existing Professional Qualification (PQ) face minimal disruption to their studies while we introduce the PAQ.

PQ Magazine January 2022

CIPFA PAQ PQ a responsibility to keep up with this pace of change so we can offer our students the maximum amount of flexibility over how and when they learn.

This is why we have comprehensive transition arrangements in place to support current PQ students while they complete their course. The new PAQ will run alongside the PQ and its international equivalent, the International Public Financial Management (IPFM) qualification while the existing students finish their courses. These students are not required to complete any additional units and their progress will not be interrupted in any way.

Current PQ students will not lose out, however, as they shall have access to all the new features of the PAQ, including a new online learning environment and mental health and wellbeing support. Current students will also be able to access the content taught on the new syllabus in the form of Continuing Professional Development (CPD) training courses. How we actually learn is changing constantly, and as a forward-looking organisation we have

Improving delivery We have taken this opportunity to review and improve the way we deliver our flagship qualification. A new learner management system and e-assessment platform will now be available to all our students, regardless of which course they are on. As a result, the remote and digital learning experience should be improved. With this enhanced platform, we are also exploring hybrid learning that combines the benefits of both remote and face-to-face experiences. We want to cater for a wide variety of learning preferences and requirements. As we hurtle full speed into 2022, everyone needs to be ready for the challenges that lie ahead – and this goes for those in the public sector as well. We must embrace change and adapt to thrive, and it is through this dynamism that we stand the best chance of success. Working in the public sector is incredibly rewarding and fulfilling, and we want CIPFA accountants to be as best prepared for it as possible. The PAQ continues our strong tradition of equipping students for a successful career in our modern, diverse and exciting public sector. • Anna Howard is Head of Qualifications and Membership at CIPFA

Sorted, thanks to pqjobs.co.uk

PQ jobs pqjobs.co.uk PQ Magazine January 2022


PQ salary survey

Trends for the year ahead Karen Young, Director of Hays Accountancy & Finance looks at what 2022 could hold for you. And the future looks bright! here is lots to digest from the year just gone, which unfolded in a way that nobody could have foreseen. However, the pace of change is not slowing down. We’ve got lots in store as the world of work for PQs continues to develop and react to impacts from the pandemic and coming out of lockdown.


The short-term outlook Since emerging from the lockdown world, employers of accountancy and finance professionals have a positive outlook for the year ahead. There has been an 11% increase since last year, in organisations that are expecting their activity levels to either increase or stay the same throughout the year (98%), which is great news for the finance profession as the recovery continues. Another encouraging sign from accountancy and finance employers is that close to two-thirds (60%) are planning on hiring new staff in the year ahead, ahead of the 53% reported last year. New skills in demand For PQs looking for new opportunities, it’s important to be aware of what employers are looking for – which has changed somewhat as a result of the pandemic. The skills on employers’ wish lists now look different to 12 or 18 months ago. Technical finance skills are unsurprisingly still top the list of skills in demand, but new data and administration skills are coming to the fore, needed by 24% of employers. Non-technical or soft skills also have a firm place in the spotlight too, reflecting a new world of work in which we are interacting differently and facing new challenges. Employers say the soft skills they are looking for most are: • Communication and interpersonal skills (needed by 61% of employers). • The ability to adopt change (57%). • Flexibility and adaptability (51%). The impact of the pandemic Although clearly there is some cause for optimism in the profession, we cannot deny that Covid-19 has still left its mark on the career prospects of many. Our guide found that 64% of PQs feel positive about their career prospects, a notable increase from last year when only 43% felt this way. These findings paint a positive picture for employers aiming to decrease attrition. However, there is still the possibility that employers are still at risk of losing employees who are still feeling uncertain about their career progression, since the pandemic. Working practices will diversify The guide also explored working patterns and preferences which have become much more flexible since coming out of lockdown and entering back into the offices. Flexible working seems to be the most popular option going forward, as 58% of PQs claimed that a mixture of in-office and remote working would be their preferred working pattern. Over a third (31%) want to be working at least half remotely and half of their time in the office. It certainly looks as though being fully based in an office is a thing of the past for many, and that a variety of working patterns will be taken up, something to be considered by employers who are looking to attract any new talent. There’s plenty of food for thought here for employers and employees about how to tackle the year ahead. Despite entering the year still under Covid restrictions, there are certainly still many things for PQs to be optimistic about into 2022 and beyond. Download the full survey at: www.hays.co.uk/salary-guide 26

Scotland AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

North West AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

Typical £22,000 £33,000 £30,000 £35,000 £32,000 £32,000 £25,000 £34,000 £28,000

Typical £21,500 £36,000 £31,000 £35,000 £31,000 £34,000 £31,000 £30,000 £26,000

West Midlands AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

South West AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

Typical £23,000 £36,000 £30,000 £36,000 £32,000 £30,000 £28,000 £36,000 £28,000

Typical £25,000 £40,000 £35,000 £40,000 £35,000 £35,000 £30,000 £36,000 £31,000

PQ Magazine January 2022

salary survey PQ

North East AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

Yorkshire & the Humber AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

Typical £21,000 £34,000 £28,000 £33,000 £29,000 £31,000 £27,000 £30,000 £26,000

Typical £22,000 £34,000 £29,000 £34,000 £29,000 £30,000 £27,000 £30,000 £26,000

East Midlands AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

Typical £22,000 £35,000 £29,000 £35,000 £30,000 £30,000 £27,000 £32,000 £28,000

East of England Wales AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

Typical £21,000 £32,000 £28,000 £32,000 £30,000 £30,000 £24,000 £32,000 £26,000

AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

London AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ

South East AAT Studier ACCA Finalist ACCA PQ CIMA Finalist CIMA PQ CIPFA Finalist CIPFA PQ ACA Finalist ACA PQ PQ Magazine January 2022

Typical £23,000 £38,000 £32,000 £37,000 £31,000 £33,000 £29,000 £36,000 £30,000

Typical £26,000 £44,000 £36,000 £44,000 £36,000 £36,000 £30,000 £40,000 £35,000

Typical £26,000 £42,000 £36,000 £42,000 £35,000 £34,000 £29,000 £38,000 £31,000 27

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obert Gordon University’s (RGU) MSc Accounting & Finance Professional Top Up course is an exciting opportunity to enhance your professional accounting qualification with a Masters degree from a globally recognised AACSB accredited Business School. This online course is ideal for those who hold a professional accounting qualification from a recognised accounting body such as ACCA, CIMA, ICAEW, ICAS or other member of the GAA. The MSc Accounting & Finance Professional Top Up degree will enhance your employability by improving your organisational and time management skills, all without the need for a career break. In addition, you can expect to further develop your transferable skills in areas such as communication, project management, data analysis, critical thinking and problem solving. Through your professional accounting qualification, you have already demonstrated that you have the technical accounting and business knowledge required for a successful career, and this online Masters degree focuses

on developing your research and analytical skills through one Capstone module. The Capstone module is worth 60 credits (SCQF level 11) and encompasses training on research and analysis methods. You will choose an area of accounting or finance to research – an area that interests you – and a supervisor will be allocated to support you through the research journey. You have to the flexibility to choose to

complete either a traditional dissertation or a business consultancy project for your Capstone module. It is up to you which style of project and output is more relevant for you, your academic journey and your career. This course is fully online and you’re encouraged to engage with your supervisor and the course team as often as you need. This flexible mode of study works effectively with your current role as part of an accounting or finance team, allowing you to balance work, study and family life. In just nine months, this online degree will enable you to acquire and develop academic and communication skills. These skills are vital when you need to demonstrate to current and potential employers that you are able to investigate current issues and communicate your findings in a professional manner. This Masters degree will give you a competitive advantage in your accounting career. The MSc Accounting and Finance Professional Top Up online degree is an opportunity to enhance your professional qualification in just nine months. Find out more and apply now to start in January or September 2022 at www.rgu. ac.uk/accounting-top-up

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PQ Magazine January 2022


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CIMA spotlight PQ

Doing the hard yards Here’s Jackie Durham’s ultimate guide to passing exams – full refund if you are unsuccessful! No, it’s not an April Fool’s joke, nor will she actually be paying out refunds. But after many years at CIMA, Jackie really does know the answers to the most-asked question, “how can I pass my CIMA exam?”.


nd yes, we really do get asked that actual question. Obviously, it’s usually followed by some clarification such “I’ve being doing okay so far but I just can’t get past P2”. The bad news is that it’s not ‘news’, there’s still no miracle behind passing exams – it’s all down to good old preparation, planning, practising and (hopefully) passing. There is plenty of new research into smart studying and insights into the psychology of learning and, as different approaches work for different people, it’s always worth keeping up-to-date with new ideas and techniques. We have included some interesting articles on study skills in the CIMA Study Planner, for example on memory and recall techniques; how to leverage the last 24 hours before an exam; coping with examination nerves; and so on. There are also practical tips on time management and technique to build exam confidence. So how you study, where you study, who you study with, what’s motivating you to study and how you cope with setbacks are all super important, but none of them can replace the two fundamental building blocks of exam success which are… drum roll please… 1. Get the knowledge. 2. Practise applying it to exam questions. TOP TIP: you must do the above in order – 2 before 1 doesn’t work! It’s a cliché, but there really is no quick fix and toughest of all is that most of us have a topic or subject that we really don’t like, that we see as our nemesis. This is where technique and psychology come into play. We have to change the mindset of “I hate transfer pricing I never want to do it again!” “What is the point of people skills? I’m not planning on joining the HR department!” “Who invented CAPM anyway? I can do the calculations, I’m just not sure which one I need to perform…”. As future finance and accounting professionals you will need a multitude of skills across a whole range of business areas – you will need to understand the building blocks in order to see the big picture. You might not see yourself as a ‘leader of people’ today, but the speed of change and developments in technology make it hard to be sure what we will be doing in the future, apart from that fact it’s unlikely to be what we are doing today. Anyway, back to the challenging topics that, ultimately, we must master. When I was training to be a yoga teacher it was the physiology that had me in a tizz. It was the very first module on the course and I didn’t have a strong science background – I nearly gave up then and there! I honestly thought I’d never ‘get it’, the PQ Magazine January 2022

difference between tendons and ligaments or how they attach to bones (or is it muscles, or one of each?). Then, one dismal Sunday afternoon, struggling with an assignment and dreaming of a cake-based reward if I could just get past question 1, I suddenly thought, “how can I be a yoga teacher if I don’t understand the mechanics of movement?”. That was my ‘light bulb’ moment. There was no way round it, I was going to have to understand and needed to find a way to make the diagrams in my book come to life. As soon as I started to put the theory into the context of a yoga posture (the part of the course I did enjoy and was good at) and apply it, it all began to make sense – and what’s more I saw the value of that hard won knowledge. Sometimes ‘looking through the other end of the telescope’ (one of my husband’s favourite phrases for anyone struggling with a problem) is what’s needed to change a negative mindset. Look at the big picture first, then see how the pieces fit together. Learning to enjoy your studies is essential, too. A cram, pass, move on approach won’t work for professional exams or, even if it does, it won’t give the breadth and depth of skills and understanding needed in the workplace. Being interested in what you are studying makes all the difference to recall, for example. This is one of the great things about the CIMA case studies – they give an opportunity to apply book knowledge to real-life work scenarios in a range of industries. While they are time pressured, challenging exams, many students like Anastasia from the Ukraine really enjoy preparing for and sitting these exams. She said: “I actually enjoyed answering the questions and it was incredibly fun to look at the syllabus

topics from a different angle.” In addition, there are no hiding places if you want to qualify with CIMA; the OT exams can test any area of the syllabus so that basic knowledge is key. Question practice is important here and a top tip is to build it into your study plan from very early on and then build it up. First up, read a section of your study manual, and then do a few questions to test yourself. You can even keep your study manual open to remind yourself of anything you aren’t sure about. Then look at the answers and consider why they are right/why you might have got it wrong. Keep the momentum going by adding in longer more complex questions, gradually removing access to your notes, and adding in time pressure. Eventually, move up to full mock exams under timed conditions. Question practice offers an opportunity to check your knowledge – do you really know the theory, and can you apply it to an exam question? As a technique, it helps build a solid knowledge base that helps with recall, as well as highlighting any weak areas. I know it’s obvious (but I also know lots of people who do this), don’t keep practising areas you are already confident in; it’s the tricky ones you need to focus on, however much you think you’ll never “get it” or “it’s only a small part to the syllabus, hopefully it won’t come up in my exam”. As CIMA ex-exam supremo Noel Tagoe used to say: “You can’t fly the plane if you’ve only learned how to take off or to land!” • Jackie Durham, Study Support Manager, the Association of International Certified Professional Accountants, representing AICPA and CIMA 31

PQ exam preparation

Time to chill – but for how long? O The exams are over, so what should you do now? Top tutor Sean Purcell has some wise words of advice

nce the exams are over the most important thing to do is to chill and reward yourself for all the sacrifices and hard work you have made over the past few months. Imagine you are an international athlete having just completed a big race in early December with your next big race not until next March. After all that training and preparation you’ve done it would be important to relax those muscles and have a bit of chill time. In much the same way, your brain is a muscle that will need a bit of relaxation after all the exertions of study. The question is – how long do I need to relax for? Your results will be released on 17 January 2022 – should you wait until then? Remember, you also have Christmas, New Year’s Eve and Chinese New Year to celebrate before the March exams so perhaps you are not sure how you are going to fit everything in. If we look at things in a practical way there are 12 weeks after exam week until the next set of exams take place in March 2022. If you wait until the December 2021 results come out in January 2022 there will be less than seven weeks left until March exam week. I think if you are going to do an exam in March this creates a pressure that you do not need,


so plan your approach better. Remember, many of us might also be tied up in year-end accounts work. So my advice would be to take a week (or two) to enjoy yourself and let your hair down but after two weeks think about getting back into the discipline of study while you still remember what that is like. That way you massively increase your chances of passing whatever exam plan you intend to do in March. I’m such a supporter of this approach that any student who signs

up in December for a course of mine who unfortunately does not get the result they want in January can flip the course for free until June. Enjoy your time off and plan your approach for 2022 carefully so you qualify as quickly and as easily as possible. • Sean Purcell (BA ACMA CGMA) is an ACCA expert tutor who regularly contributes to ACCA programmes around the world. He was voted 2020 Lecturer of the Year by PQ magazine and is an ACCA tutor guru for SBL










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tax debt PQ

Why HMRC can’t manage the tax debt How is UK plc going to collect its tax debt? The National Audit Office is worried that HMRC just doesn’t have enough staff to cope


ax debt is more than double prepandemic levels, and current staffing at HMRC is unlikely to be enough to manage the increased tax debt workload, according to the National Audit Office (NAO). As the country went into lockdown in March 2020, HMRC paused most of its debt collection activity. During this pause it changed how tax debt was collected, including the tone of communications and the pace of pursuit. To support businesses and individuals, payments of VAT and Self Assessment income tax were also deferred. As the UK emerges from the Covid19 pandemic, HMRC needs to pursue tax debt while allowing taxpayers time to recover their finances. Total tax debt rose to £42 billion in September 2021, from £16 billion in January 2020. Total tax debt peaked at £67 billion in August 2020. More

debt has been repaid as extensions for VAT and Self Assessment passed, and the economy has reopened. HMRC forecasts total tax debt will fall to £33 billion by March 2022, but this assumes the Covid-19 pandemic has not changed repayment behaviour. Up to 2.4 million more taxpayers are in debt to HMRC following the Covid-19 pandemic, and those who were already in debt owe more. The average amount taxpayers owe has increased by 60%, from around £4,300 to £6,800. Older debts, which are often more difficult to collect, have increased in value from £2.5 billion in 2019-20 to £4.4 billion in 2020-21. HMRC has prioritised which debts to chase based on the likely impact of the Covid-19 pandemic on an individual’s ability to pay. However, those whose ability to pay was considered the least impacted often had larger

debts. HMRC categorised debtors into highmedium and low-impact groups. Business taxpayers in the low-impact group had debts around 50% greater than business taxpayers in the high-impact group. Self Assessment taxpayers in the low-impact group did not have access to Covid-19 grants that Self Assessment taxpayers in the high-impact group could draw on. Tax debts are normally meant to be cleared before the next tax period, but this may be unrealistic for many taxpayers affected by the Covid-19 pandemic. HMRC has made it easier for taxpayers to agree longer repayment arrangements. The average duration of repayment plans increased from around five months pre-pandemic to 12 months in July 2021. A strong focus on repaying tax within specified timeframes may not be appropriate. Leading debt management practitioners outside government tend to focus on agreeing affordable repayment plans that can be sustained. Research with stakeholders indicates the impact of the pandemic on taxpayers is polarised, with some groups shoring up their bank balances, and others more badly affected. The NAO focused on the impact of the Covid19 pandemic on two groups of taxpayers: companies that are wound up and reformed specifically to avoid paying debts, and vulnerable taxpayers. HMRC had a limited understanding of how the pandemic will affect the amount of specialist work needed to support these groups. Pre-pandemic, HMRC achieved workforce efficiencies, but it did not close the gap between new tax debts and debts collected. HMRC reduced the number of staff working on debt management by 18% from 4,857 to 3,975 between 31 March 2014 and 31 March 2020, helped by a new telephony system and improvements to business processes. HMRC maintained its rate of debt collection at around two thirds of new debt created each year. This suggests HMRC could have achieved more with greater capacity. HMRC intends to recruit 1,000 full time staff in 2021-22; however, it told the NAO that once staff turnover is factored in this resource will only address current staffing shortfalls. HMRC forecasts that it will have twice the usual level of debt to manage at the end of March 2022. New debtors may require more support in the short term to agree payment plans. The NAO is recommending that HMRC develops a revised strategy for recovering tax debt in light of the pandemic. This should consider the varying impacts of the pandemic on different taxpayers, and should identify which taxpayers are more able to pay, and those most severely affected by the pandemic.

Award-winning AAT courses and apprenticeships Flexible learning to suit your lifestyle mindful-education.co.uk/students

PQ mark up and margin

Don’t memorise, learn Michele Baker explains why understanding the calculations is the key to answering questions on mark up and margin Find Profit from selling price; Cost Price Percentage 30%


k, calculators at the ready, this is going to be a good one. The Mark Up and Margin calculations aren’t too tricky – but understanding them can be.

Mark up This is where we have the cost price, and to this we add the amount of profit we want to make. So we start with a cost price and mark up that price to get the selling price.

Profit Percentage = 40% Cost Price = 100% Our starting point is the cost price so this will be equal to 100%. If our policy was to make a profit of 40%, we would need to add this to the cost price to find the selling price.

Profit Percentage = 40%

calculations. Understanding the calculation is key! If you can find 1% of a value you can find any percentage after that. Calculation

Cost Price = 60% If we used the same profit percentage of 40% it would mean that the cost price is 60%. Calculations Some of you may have watched my ‘Back to Basics’ video on VAT calculations. You can apply the same techniques to the mark up and margin


Selling Price ÷ 100 x 30

The number we divide by finds 1% of the value, we can then multiply this to find the percentage value we want.

Understand, don’t memorise We’re all guilty of trying to memorise a calculation. But until you understand the reason for it or what it tells you, that’s all it will be. You’ll have the answer but you won’t know what it means. Let’s have a look at them both.

Margin This is where we want to achieve a specific selling price. This means the profit made is determined by the selling price. The selling price includes the profit margIN and the cost price. The selling price is therefore equal to 100%.

Selling Price ÷ 130 x 30


Mark Up (Cost = 100%)

Margin (Sales = 100%)

Find Selling Price; Profit Percentage 30%

Cost Price + 30%

Cost Price ÷ 70 x 100

Find Cost Price from Selling Price; Profit Percentage 30%

Selling Price ÷ 130 x 100

Selling Price ÷ 100 x 70

Incomplete Records In your assessments or exams, you might need to find a missing value. If you’ve got to grips with the calculations above, you’ll have no problem with this scenario. We’ll work through an example now. A businesses annual sales income is £987,000 and use a margin percentage of 15%. From this limited information we can determine the cost of sales and gross profit. Remember that if we’re looking at a profit margIN, the sales figure is equal to 100%. If we divide by 100, we’ll find 1%. Cost of sales £987,000 ÷ 100 x 85 = £838,950 We could subtract the cost of sales from the sales, but I’m on a roll, humour me! Gross profit £987,000 ÷ 100 x 15 = £148,050 You could even use the cost of sales figure to find the gross profit figure. Cost of sales £838,950 ÷ 85 x 15 = £148,050 The pressure of an exam can make the calculations you’ve memorised disappear from your mind in an instant. I’d be lying if I said it had never happened to me. So, take the time to understand the calculations. It might take a little longer but it will make all the difference. Go into an exam confident of your understanding, not worrying about what you might forget! • Michele Baker is a tutor at Training Link. She has been tutoring for 15 years and has contributed to PQ magazine’s Back to Basics video series

PQ Magazine January 2022

PQ law

Resolving disputes: the Good, the Bad and the Ugly Marina Matyukhina explains the differences between criminal and civil law, and how this can help you in your studies


oing the right thing is in an accountants’ DNA. Another profession probably equally obsessed with distinguishing right from wrong is the law. While the accountants often turn to help of the legal professionals, and vice versa, it is useful for both to know the nitty-gritty of each others’ area. For example, as accountants we may start with learning the differences between criminal and civil law. Law is as old as civilization. Since ancient times, societies aimed to create rules for resolving disputes between members. The earliest legal codes – Sumerian, Babylonian, later Greek and Roman – didn’t distinguish clearly between civil and criminal law. Yet the modern English legal system is the opposite. It consists of two independent systems operating side by side: criminal and civil law. Each is represented by different courts, terminology, and procedures. How has this split emerged and what are the key distinctions today? Let’s resolve an imaginary dispute with a neighbour to answer the second part of this question and have a quick glance into the first one. Suppose that your dog has accidentally broken into your neighbour’s garden and destroyed their favourite bed of daisies. What are you going to do? The good In a good situation, there is no dispute. Or it is easily settled without any legal system. You apologise to your neighbour and offer them some kind of compensation – buying them a gift, helping plant new daisies, or paying an equivalent. If the neighbour agrees, an out-ofcourt settlement is achieved. The bad Now suppose that your neighbour is not a very agreeable person. He starts arguing that those

were extremely rare daisies planted in the memory of his dearest grandmother and only compensation of no less than £1,000,000 may relieve his pain of the unbearable loss. When you tell him you don’t think it would be fair, the neighbour goes to court. The dispute is between two individuals. So this is a civil law case to be heard in a civil court, most likely a county court. The neighbour acts as a claimant as he initiates the case. You will act as a defendant. The case will be named with the parties names starting with the claimant, for example Neighbour v DogOwner. The claimant will have to collect and present the evidence of the wrongdoing (e.g. CCTV footage). It must be sufficient to convince the court that it is more likely than not that the wrongdoing took place. If the judges find so, you will be held liable. Yet it is unlikely that the claim of £1,000,000 will be satisfied as the remedies (damages in this case) are awarded to compensate the loss of the injured party. Proving that a flower bed was worth £1,000,000 can be a very amusing yet futile exercise. The ugly Suppose that the neighbour is not only disagreeable but also a quick-tempered person. Cursing wildly, he grabs a shovel, chases your dog, crashes your fence, and threatens to kill the

dog and you. Luckily, everyone is safe, but now you have all the reasons to call the police. The wrongdoings are severe enough to be not only the matter between you and the neighbour but between the state and the neighbour. This has not always been so. In ancient times ‘eye for an eye’ justice was commonplace. Sometimes these personal vendettas could cause far greater havoc than the initial offence. European countries began to recognise the most severe acts (e.g. murder, theft, assault, etc.) as public wrongs. Then restoring justice ceased to be the matter of the injured person or their family and became the matter of state. In England, the process began in 1066 after the Norman conquest. It took several centuries for a separate body of criminal law to be formed, along with the evolution of the law enforcement system. Getting back to the neighbour, the police representing the state will initiate a criminal law case. In the court, the claim will be brought up by the prosecutor, a representative of the Crown Prosecution Service (CPS). The neighbour now will be acting as a defendant (the only word similar in civil and criminal law languages!). The case will be heard in a criminal court, most likely a Magistrates’ Court. The case name will start with R representing the Crown (literally Rex or Regina, meaning King or Queen), e.g. R v Neighbour. The prosecution is responsible for gathering and presenting evidence, which must be beyond reasonable doubt. A tougher standard of proof is applied in criminal law as the defendant’s freedom may be at stake. If the judges find that the wrongdoing took place, the defendant will be pleaded guilty and sentenced to punishment, a fine or imprisonment. Distinguishing between criminal and civil law is important for ACCA LW. The two systems use different language; knowing the terminology helps spot what legal system an exam question is about. • Marina Matyukhina is an independent financial consultant and lecturer currently offering an FR course on Udemy (see https:// tinyurl.com/4yae6cx8)

cash flow part 2 PQ

Profit explained Sarah Ardiles and Tom Clendon continue their discussion of profit versus cash flow. Last month they explored the usefulness of cash flow reporting. Now they turn their attention to profit Sarah sets the scene I enjoyed our discussion on cash flow last month, Tom. We certainly came up with lots of reasons why reporting on cash is so important to investors. You may remember that what got me thinking about cash versus profit was one of my students asking the astute question, “if a statement of cash flows is so useful, what’s the point of publishing a profit and loss account too?” In the interest of fairness, I think we should turn our attention to profit now. Tom defines profit I think a good place to start would be to understand the word ‘profit’. Interestingly, the term is not defined in the IASB’s Conceptual framework. Back in the days when I taught the equivalent of F3 (Financial Accounting), I would always ask my students what they thought profit meant. A great many would say something like ‘is it income received minus costs paid?’ And that would lead me to talk about accruals accounting. Actually, profit has nothing to do with cash received or paid – profit is basically the surplus of income earned over expenditure incurred. It’s all about those verbs: earned and incurred. Income is recognised as it is earned and costs when they are incurred. Accordingly, IFRS dictates when income such as revenue, government grants, interest on financial assets and so on must be recognised in profit. Likewise, IFRS determines when costs, such as the purchase of non-current assets, leases, wages, pensions and even tax must be expensed. Sarah introduces the matching concept I remember when I used to teach F3 and I would explain the meaning of cost of sales. I used to make the point that cost of sales isn’t the cost of everything you’ve bought this year but rather the cost of the goods you have actually sold this year. Hence the need to deduct closing inventory (as you didn’t sell it). I would tell my students that in accruals accounting we apply matching, a concept they would see over and over in their financial reporting studies. Another concept that has never been properly defined, matching assigns revenue earned and expenses incurred to the accounting period in which these events occur. Tom talks about matching in accounting for pensions What I love about IFRS is that it is principlesbased, and I would say that matching is one of the key principles that runs through it. There are many examples of matching, but I am going to pick one: accounting for pension costs. At first glance, you may think that a company should report its cost of paying its pensioners when it PQ Magazine January 2022

pays them; after all that’s when the cash goes out. But really, if we are going to account for employment costs in a faithful way, we should be looking to recognise the cost of employing staff over the period they provide economic benefit to the company – in other words over their service. Accounting for pensions is a complex area, best left for another article; it relies on all sorts of estimates about the future. But fundamentally, the reason we account for pensions in the way that we do is simple: matching! Sarah reveals how profit has been criticised Another principle of IFRS is the idea that financial statements should be comparable. For example, investors should be able to make meaningful comparisons between different entity’s statements of profit or loss. However, the way companies present their profit in the statement of profit or loss has come under some criticism of late. Rather unhelpfully, IAS 1 Presentation of Financial Statements only requires entities to report revenue and profit or loss for the year. There is no requirement to provide subtotals in between. Many entities choose to report an operating profit subtotal but there is inconsistency in how it is calculated. This has caused frustration for investors who rely on operating profit to analyse the performance and make judgements about the value of a company. Given different entities

are calculating operating profit in different ways, a meaningful comparison is nigh on impossible. Tom sheds light on the new proposed rules Fortunately, the International Accounting Standards Board (IASB) has proposed that listed companies standardise their definitions of operating profit in financial statements in order to help investors when making comparisons. The new rule would require companies to disclose three new subtotals: operating profit, profit before financing and income tax, and one that includes operating profit, income and expenses from associates and joint ventures. Sarah sums up We have seen how useful profit is in reporting on the performance of a business, and how the application of the matching concept in accruals accounting ensures that costs are paired against the related income in the statement of profit or loss. But we also learnt that as helpful a concept as profit it, its presentation in the financial statements currently is less than helpful. Fortunately, IAS 1 will soon be amended to ensure a more comparable presentation of operating profit. Watch this space! • Tom Clendon FCCA is an online ACCA SBR lecturer. See www.tomclendon.co.uk • Sarah Ardiles is an online ACCA FR and SBR lecturer. See www.sarahardiles.com 37

PQ AAT spotlight

Marginal and absorption costing explained This is a subject you really need to know inside out and back to front, says our AAT guru Teresa Clarke


arginal costing is based on the variable costs of production and does not include any fixed costs. Absorption costing includes both the variable, or direct costs, and the fixed costs, or indirect costs, of production. Note that marginal costing is not permitted in financial reporting, but absorption costing is permitted. Both methods can be used in management accounting. Let’s look at some definitions: Prime cost: This is the direct labour and direct material only. Prime means first, so this is just the direct labour and direct material to make the item. If no products are made, then no prime costs are incurred. Marginal cost: This is calculated by adding the prime cost and the variable production overheads. Marginal means part of, so this is the prime cost and the variable production overheads added together. If no products are made, then no marginal costs are incurred. Absorption cost: This is calculated by adding the marginal cost and the fixed production overheads. Absorption absorbs all production overheads associated with making a particular product. Remember: We are only looking at the production overheads here and are not interested in anything else, such as office expenses, admin costs, selling expenses or insurance. Example Sivam Ltd has asked you to prepare some costs for their new designer table.

This is the marginal cost per unit. £30.80 x 1000 units = £30,800. This is the total marginal cost. Absorption cost per unit Marginal cost, plus fixed production overheads = absorption cost. £30,800 + £65,000 = £95,800. This is the total absorption cost. £95,800 / 1,000 units = £95.80 Note: The non-production overheads are ignored.

Summary the marginal cost per unit and the absorption cost per unit. You have been provided the with following details of the planned production of the new table. Planned Production of 1,000 tables Sales price per unit = £199.00 Total direct materials = £13,000 Total direct labour = £16,000 Variable cost per unit = £1.80 Total fixed production cost = £65,000 Non-production overheads = £75,000 Prime cost per unit Direct materials plus direct labour = prime cost. £13,000 + £16,000 = £29,000. This is the total prime cost. £29,000 / 1,000 units = £29. This is the prime cost per unit. Marginal cost per unit Prime cost, plus variable production overheads = marginal cost.

Direct materials Direct labour

Prime cost

Variable overheads

Marginal cost

Fixed production overheads

Absorption cost

Direct Materials


Direct Labour


Prime cost

Prime Cost


Variable Overheads


Marginal Cost

Marginal Cost


Fixed Cost


Absorption Cost

If you would like to more tips and guides from me please check out my workbooks on Amazon – go to https://tinyurl.com/cmk53vjw



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APM - Geoff Cordwell APM - Mustafa Muchhala ATX - Richard Poole SBL - Ashim Kumar SBL - Sean Purcell* SBR - Tom Clendon


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PQ interview

A Day in the Life of a Level 4 Apprentice We caught up with Level 4 Accounting Apprentice Paul Mcsweeney to ask him how he is finding his apprenticeship and how his Level 4 course compares to his previous study


aul Mcsweeney works in the Mindful Education finance team and is studying his apprenticeship with Train Together – using the Mindful Education online course as a key element of his study. Before pursuing an accounting career, Paul worked for a travel company and a soil engineering/geotechnical testing company. He also spent 11 years in the security division at Gatwick Airport. We caught up with Paul to find out more about why he chose an accounting apprenticeship, and to hear any advice he has for others who are considering a similar route into the profession.

What’s a typical day look like when you’re working and studying? A typical day starts with checking the emails in our finance inbox for any queries that need actioning. I also focus a lot on monitoring the accounts payable/receivable through our accounting software Xero, and updating schedules of payments and financial information related to our partner accounts. Thursday is my dedicated study day which means I have it off work, so I reserve most of my studying for then.

Why did you decide to embark on an accounting apprenticeship? While working in the security division at Gatwick Airport I decided that I wanted a career change, one that better suited my interests, strengths and goals. Accountancy ticked a lot of boxes as I have always enjoyed maths, problem solving, and working with numbers. For Level 2 and Level 3 I studied part-time, but for Level 4 I chose the apprenticeship route because I knew that the combination of work experience and studying would really help me apply the concepts from my studies directly into my day-to-day work. What made you want to study accounting through blended learning? Blended learning was really appealing as it meant I could adapt my studies around my work and life. I also knew that the Virtual Learning Environment (VLE) would allow me to be tested far more frequently on what I was studying. I’ve found in the past that being tested is an invaluable tool in highlighting subject areas I need to focus more on. How does your experience of studying for your AAT Level 2 and Level 3 qualifications compare with your experience of studying for your AAT Level 4?

I studied on my days off work, and took my textbooks to work when I was working night shifts. I was assigned a tutor through my training provider, but didn’t receive any contact from them throughout my qualification. The overall study support was lacking and I had no one to discuss ideas with or get a different perspective from about certain accounting concepts. At times I felt studying on my own to be quite isolating and I struggled on occasions with motivation. Now I’ve experienced studying via blended learning, I really do prefer it. I was so used to working through AAT textbooks but when I was told by my tutor that we wouldn’t be using them anymore I was really surprised! I quickly realised that all the information you need is on the VLE, and is set up for you to learn, interact and be tested. There’s no more lugging textbooks back and forth to work which is a big win for me!

What do you find most useful about the Mindful Education VLE? The learning content and test sections are really well written, informative and interactive. I like how animation is used to help explain theories and tasks, and how questions are designed to help you understand a concept thoroughly. In the test section you are pushed to complete questions in a specific time which helps me get ‘exam ready’.

I was in full-time employment when I studied for my AAT Level 2 and 3 qualifications. My working pattern consisted of early and late shifts and I couldn’t find a face-to-face course that was flexible enough for me. I wasn’t aware of blended learning at the time so I opted for distance learning, which was very flexible.

How much support do you get from your employer and training provider? I receive lots of support from both my employer and tutor. My tutor is always in contact about lessons and revision, and he’s always in contact before and after exams to provide feedback and advice, which has been invaluable! • If you are interested in studying an AAT course or apprenticeship using an Online and On Campus blended learning approach then please visit the Mindful Education website to find your nearest provider.

Registered Tuition Provider


PQ Magazine January 2022

careers PQ

Dear Karen Ask PQ’s agony aunt Karen Young when you need expert advice. Email your dilemma to graham@pqmagazine.com, and he will pass on the best ones to Karen THE QUESTION I’m looking for a new job but haven’t had much luck so far. I keep hearing that LinkedIn is important when looking for new opportunities, but how true is this? And what are your tips for how I can make my account stand out?

Life at Sharon Aplin Bookkeeping Sharon Aplin is a certified bookkeeper who is now setting up her own business. She has a degree in English, a qualification in furniture making and design and recently won the ICB Student of the Year award What time does your alarm go off? 6am. What is on your desk? Computer, mobile, pens and pads of paper and notes, a copy of Microsoft Office 365 for Dummies, and a half cup of luke-warm coffee. How long is your commute to that desk? My office was, until I passed the qualifying exam in September, the spare room, so no commuting at all. What’s your favourite lunch? Salad in summer, soup in winter. What can you see when you sit at your desk? A view across fields and farmyards to the Mendip Hills, and our garden. What are your favourite websites? I play ‘Words With

Friends’ in French with a friend in France, but for the past 12 months I’ve probably spent most time on Rogo doing exams! How many hours a week do you spend in online meetings? I’ve only used online meetings intermittently until now but I’m hoping that will change as I take on clients. Are you spending more time working now than pre-pandemic? Previously I worked part-time, but setting up in business is pretty much full time. How do you relax? Walking our Border Collie, reading, cooking, gardening, woodworking and, once upon a time, travelling. What is your favourite tipple?

Wine and real ale. What’s your favourite TV show? Black Earth Rising, Shetland, Saving Lives at Sea and The Repair Shop. Summer or Winter? Summer. Pubs or clubs? Pubs. Do you have a hero? My late friend Gill Owen and my husband – both rose from very humble backgrounds. What is the first thing you are going to do when Covid is over? My 94-year-old father and my sister live in the US, so I’ll need to meet up with them. If you had a time machine where would you go? Back to summer holidays in France in 2019, savouring the good times.

young children gained the most from the shift to hybrid working.

Pap Women CEOs on the rise The number of female FTSE 100 chief executives has increased to 8%, up from 5% last year. A survey from executive research firm Heidrick & Struggles found that Ireland topped the international table with 14% of its top companies run by women. Kit Bingham, a partner at the firm, said: “New CEOs appointed over the past year in the UK differ significantly from the CEOs they replaced. They are more likely than their predecessors to be women, to be non-nationals, to have crossborder experience and to have advanced degrees.”

In brief KAREN’S RESPONSE You may think that LinkedIn is just another social media site, but that is far from the truth. LinkedIn is used for professional and career purposes, a platform you can utilise to showcase your skills, expertise and qualifications. This is similar to the traditional CV; however, if you update your CV you most likely won’t have a constant stream of people viewing your latest career accomplishments. If you update your LinkedIn profile regularly and post relevant updates to your network it becomes a library of your accomplishments and can help you to stand out. The key to using LinkedIn effectively is to make sure you’re ‘discoverable’ to employers. The more changes and additions you make, the more ‘active’ your profile appears to the system, which also increases your chances of being seen by potential employers. Your LinkedIn profile communicates who you are. It can be useful to show your interests through posting articles that you have read, or even better written; this is an effective way to show employers your skills, as well as keeping your audience engaged. • 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 January 2022

Pap WFH works for women The move to working from home and greater flexibility offered by many companies during the pandemic has tempted more women into the jobs market, according to the Resolution Foundation. The think-tank found that around half-a-million women who were working part-time have switched to full-time since the pandemic struck. This means the female participation rate has risen by 0.4%, and means women now make up 48% of the workforce. This compares with 44% in 1992. The study, called ‘Begin Again?’, found that mothers with

Pap Fancy a four-day week? Atom Bank is moving all its employees to a four-day week with no reduction in pay. The smartphone-based bank is the biggest UK employer to move away from the traditional five-day week. In practical terms it means Atom’s 430 staff will move from a 37.5-hour week to a 34-hour week. Their core hours are 9.30am to 4.40pm Mondays to Thursdays. Those who move over to the new system will have to work an extra hour a day to get that final day off.

The PQ Book Club: books you should read Business Trends in Practice: The 25+ trends that are redefining organizations, by Bernard Marr (Wiley £29.99) The author really does do what the book jacket promises – ‘an eye-opening discussion of the transformational forces disrupting our business and government organisations’. Take the chapter on resilient and sustainable operations. Marr explains that during Covid19 organisations that were able to pivot to digital channels or accelerate their digital transformation were clearly better equipped to survive. But what if the next pandemic is a

digital virus – one that takes down the internet? Marr says in that case firms with a physical infrastructure would be better equipped to survive, and those solely reliant on digital channels would face an existential threat. He believes resilience today includes balancing digital with other channels. All the latest trends are looked at, from AI and the ‘datafication’ of our world, to how we learn and mass personalisation. Marr stresses that how and what we teach must change: “education needs to be

transformed over the next few years to make it more relevant to the fourth industrial revolution and to prepare students for life and work in the 21st century.” He predicts that in the future employers will care less about traditional degrees and more about skills. PQ rating: 5/5 We really really liked this book. Marr makes everything so accessible and it’s hard to disagree with anything he says! 41

PQ got a story, funny or serious, you want to share? Email graham@pqmagazine.com

Ideal presents for accountants What is the ideal Christmas present for the accountant in your life? This was one of the questions asked at the recent ‘Tomorrow’s World – a brighter future for accountants?’ roundtable. ACCA’s Claire Bennison suggested a day at the spa, CIPFA’s Kirsty Stanners said she loved the heated blanket she received last year – it’s much colder WFH rather than in a nice warm office. Eintech’s Anna Kate Phelan said a cup that says ‘It’s accrual world’ would be the ideal stocking gift. LSBU’s Ivor Pingue would plant a tree and, finally, there was a more practical gift idea from David Frederick: “A lifetime subscription for eye tests because of all the screen work we have been doing!” Check out the roundtable discussion at https://tinyurl.com/2p8857zd

Witch Hunt If you are looking for something new to watch on TV then PQ would recommend Witch Hunt, an award-winning corporate crime drama from Norway. Star of the show is Ingrid Bolso who plays Ida Waage, a CFO at a top law firm. A by-the-book accountant, her problems start when she’s asked to pay a big invoice from a consultancy firm called Klant. Where, she asks, are the accounting records? Things just don’t add up. OK, we have to wait 30 minutes in episode one before Ida gets out her calculator, but she’s prepared to put her career on the line to discover the truth. Witch Hunt is available on Channel 4’s Walter Presents and is up there with Follow the Money, a Danish financial crime thriller. Who can forget the Swede?

Picture perfect

Albert the Abacus We are always on the lookout for accountants in films. Well, we found one in The French Dispatch, be it ever so briefly! He’s ‘Albert the Abacus’, a prisoner and underworld accountant, played by none other than Willem Dafoe. We loved the film, so it’s another ‘PQ recommendation’. If you loved The Grand Budapest Hotel you will love this.

THOUGHT FOR THE MONTH: Boxer, activist, raconteur and poet Muhammad Ali: “I don’t trust anyone who’s nice to me but rude to the waiter, because they would treat me the same way if I were in that position.”

Top writer Ian Rankin recently swapped his eight-bedroom Victorian house in Edinburgh for a three-bedroom flat in the Quartermile development. Not surprisingly he has lots of books in his house. He also collects 20th century Scottish art. When he started making money his accountant told him: “If you want to buy art, buy art. At least you’ll be looking at your money.” Sensible advice.


The Accountant 2 gets green light Director Gavin O’Conner has confirmed that The Accountant 2 film is back on the agenda. There is even talk of a whole franchise – well, The Accountant 3 anyway! PQ magazine was there at the London premier of the original film with accountant Peter Stewart. The 2016 film starred Ben Affleck as the accountant in the spotlight. He played Christian Wolff, someone very good at his job who also killed ‘not very nice people’. We are hoping fellow accountant Anna Kendrick will also be staring in the sequel. PQ magazine loved the first movie, and although it received mixed reviews it grossed $155 million worldwide. In April 2018 it was reportedly the top-rented film of 2017 – for both disc and digital.

I’m a chartered accountant! How do you convince your mum that you earned your money the right way? In a recent interview sports promoter Barry Hearn said: “When I came through there wasn’t anything I wasn’t prepared to do. I tried to keep it legal, otherwise my mum would have told me off. She stood out on the patio outside this office in 1982 and looked at me. I had just bought this place and she said: ‘Are you doing anything illegal?’ I said: ‘Mum, I’m a chartered accountant. We make terrible gangsters.’ I’m a Cinderella story.”


Can you break even? PQ magazine was out and about this month. We were sent to Coventry (not for the first time) to the AccountingWEB Live Expo, and came back with a bag full of goodies! Our fav has to be AutoEntry’s ‘Break Even’ t-shirt. They also have one that says ‘Rec’ n Roll’! Well, we have three t-shirts (one small and two XL) to giveaway. The lucky winners will also receive a pair of AccountingWEB bamboo socks! To win one of the three t-shirts on offer email your name and address to giveaways@pqmagazine.com. Head up this email ‘Break Even’ and you will be entered for this month’s prize draw. Do say if you want a small or XL one!

Killer Su Doku We have 150 lethal puzzles for you this month – each with extra internal cages! The Times Killer Su Doku 3 offers all advanced Su Doku enthusiasts a worthy challenge. Well, that’s the promise. Warm up with moderate puzzles, then steel yourself to take on the Tricky and Tough levels. This prize comes with a warning: not suitable for the amateur puzzler! To win one of the three books on offer just send us an email with your name and address to giveaways@ pqmagazine.com. Head up that email ‘Killer Su Doku’ 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 14 January 2022. The main draw will take place on Monday 17 January 2022.


PQ Magazine January 2022

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