PQ magazine January 2018
www.pqmagazine.com / www.pqjobs.co.uk
Meet our guest editor
Craig Coda blitzed ACCA in just two years. He passes on his secrets INSIDE!
last chance to enter
DO ACCOUNTANTS HAVE A FUTURE? The robots are coming, but the big question is, will they be taking your accountancy job? That was the question PQ magazine recently tried to get the experts to answer at ‘The Future of Accountancy: Success in a changing world’ conference, held jointly with London South Bank University. The answer that came back from a whole plethora of speakers was ‘your jobs are safe’ – for now! There were, however, some caveats. Delegates were told that tomorrow’s accountants would need to have stronger ‘softer skills’. And the profession itself will also need to raise its game, and may even have to work more closely to see off the threat. Alan Hatfield, ACCA executive director, strategy and development, opened the conference. For him, there is little doubt that artificial intelligence will take over more and more of the mundane accountancy tasks. But he felt AI also provides a unique opportunity for the profession to re-imagine and improve both business and
investment decisions. Hatfield stressed that an accountant’s technical and ethical skills remain, and will continue to remain, at the heart of what makes accountants so employable. But change, particularly in the digital world, is happening fast, and he expects it to go faster still. PQs need to have the mindset to cope with this, and Hatfield said ACCA research has found its PQs are ready for this ever-changing environment and even energised by
it. “To them the future looks rightly exciting,” he said. However, the successful accountant will need soft skills to get to the top. Hatfield said that sometimes these soft skills “are really the hard skills”. He felt perhaps it was time to really talk about them as ‘professional skills’. The ACCA has said that to succeed future accountants will have to demonstrate seven qualities (they call them quotients). Among these are emotional intelligence,
creativity and vision. Hatfield pointed us to what HP inc’s Mark Anderson, regional head of finance, Asia Pacific and Japan, said tomorrow’s accountant need to look like: “I’m looking for the finance professional who can predict the future, not describe history. Those who can consult with business as opposed to just provide data to the business. I’m looking for finance professionals who are people leaders, not followers, and who will be strategists, not technical tacticians.” CIMA’s executive vice president academics, Noel Tagoe, said the future of finance is already here, just unevenly distributed. For him, successful accountants of tomorrow will need to have an end-to-end view of their company. This is what will make them indispensible to the CEO. He felt the profession needed to work together to maintain its relevance. But for Tagoe there is no doubt that there will be a future for accountants. “Most people in the know see it that way,” he said. • See inside for more on our conference.
INSIDE: OUR ANNUAL BUMPER QUIZ! Win a
Thanks to our sponsors
“I’d recommend Kaplan to anyone. The product is really simple to use and the tutors are very supportive.” Craig Coda, Kaplan ACCA student
Book your 2018 ACCA course today Classroom and Live Online courses start in early January. Improved ACCA courses from the UK’s largest accountancy training provider. Plan ahead with a wide range of course start dates across all 4 sittings Pass rates up to 100%* Extended tutor support hours
Find out more about our ACCA courses
0333 009 5194
* Based on ACCA F5-F9, P1-P3, P6 and P7 papers for part time classroom students across 14 Kaplan centres at the June 2017 sitting. † P1-P3 Kaplan average pass rates June 2017:82%. P1-P3 Global average pass rates June 2017: 51%
Pass Essentials before the syllabus change Our P1-P3 pass rates for June 2017 all exceeded the global average†
News 06CIMA changes New syllabus set to be launched by summer 08Regions rise Big 4 firms say that young accountants are moving away from London 10ACCA exams What was good, what was bad and what was ugly in the December exams Features, etc 05Mind your Ps&Qs Why the profession needs to be more inclusive; and a plea for more AAT synoptic tests 13Annual Bumper Quiz Are you up to the challenge? Then you could win a fab Google Mini! 14Cats corner Purr-fect pets that are helping you study
15The Future of Accountancy
Some of the highlights from the joint PQ/LSBU conference
16ACCA ethics How the new
Ethics and Professional Skills Module will affect you
26CIMA focus Management
accountants have a big role to play in the field of cyber security 28ACCA update All you need to know about the incoming Professional level exams 32Tax Making Tax Digital and VAT: how it will all work 33Careers Life at MEND; plus our social media round-up 34Fun stuff – and our giveaways The columnists Robert Bruce Flexibility is key as the nature of work changes 6 Prem Sikka Paradise Papers shatter Big 4’s ethical claims 8 Zoe Robinson Will you take back control of your studies in 2018? 10 Subscribe to PQ magazine It’s FREE – go to www.pqmagazine.com ABC July 2016 – June 2017
18PQ Awards 2018 It really is
your last chance to enter this year’s awards – so get to it!
20ACCA F8 Top advice on getting through this difficult paper
21ICAEW spotlight Why your
online training file really matters
22ACCA P2 Getting through the
tough Corporate Reporting paper
24Our guest editor writes Top
advice from our man Craig Coda
Our guest editor writes…
Publisher’s statement: We send a digital issue of the magazine to an additional 6,505 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)
What better way to end 2017 than with the January issue of PQ? So get cosy, pour yourself a glass of your favourite tipple (we don’t discriminate here at PQ magazine) and read all about how you can best prepare for 2018. I’m not an academic myself – having neither A-levels nor a degree to my name – but I passed the ACCA exams not so long ago, and within two years. In this issue I have outlined what I believe led to my success in the exam hall, from how I turned my notetaking technique around to the resources that I utilised to achieve an understanding of the subjects I was required to learn. This advice is not limited to those studying ACCA, and I hope is a worthwhile read for any aspiring student who wishes to maximise their success, even if I do say so myself. I have also provided a snippet of my ACCA journey and explain why I believe that if I can do it, so can you (see pages 24-25). For all those participating in the ACCA exams, be sure to read the article on pages 28 and 29, which provides more information about the changes ACCA will be making to the professional level exams from September 2018. These are designed to further align the qualification with the needs of today’s employers through case studies. The two new exams will replace P1, P2 and P3, so it is essential that you pass these exams by September if you do not wish to take the new exams. In the month that Barclays axed free use of its security software, Kasperspy, as a precaution following a warning about Russian security software and the risk it poses to cyber security, Ken Witt provides guidance on how you can mitigate these risks, and recommends a cyber security tool that you can use to help your organisation minimise exposure to future threats. Finally, myself and PQ magazine would like to thank you all for your continued support and wish you every success in the year ahead in whatever your endeavours may be. Craig Coda, PQ magazine guest editor
Prepare for your next CIMA course CIMA courses start in January 2018 Study with Kaplan to access: ss:: More course start dates to suit uit you Extended tutor support hours Four mock exams and hundreds of practice questions
Find out more about our CIMA courses
0333 009 5195
“I loved my course with Kaplan. I was taught by excellent tutors and felt I was offered a really personalised learning experience.” Debbi Wallis Kaplan CIMA student
Gain vital insights to give your students their best chance at exam time Powerful analytics used by awarding bodies Compare classes, partners, and client firms
The e-learning platform
Live statistics Identify weak subject areas Flag common mistakes Improve grades and test times Track student demographics
Mention PQ Magazine for a FREE TRIAL
Visit getrogo.com or call 0207 997 6755 Use your achievements to become an ICB Member Your qualifications with AAT, ACCA, CIMA or another professional body could qualify you for membership with the world’s largest bookkeeping organisation. If your qualifications were achieved within the last 2 years you can apply for exemptions with ICB and become an ICB bookkeeper gaining access to:
Professional recognition ICB’s extensive National Branch Network The world’s largest bookkeeping community The opportunity to apply for an ICB Practicing Licence Free legal and technical advice
For more information please call
0207 856 2567 or email us at achievemore@ICB.org.uk www.bookkeepers.org.uk
The Institute of Certified Bookkeepers
have your say PQ
email firstname.lastname@example.org Whither diversity? The accountancy profession certainly needs to do more to show they are truly champions of diversity. I for one was not surprised to read your headline ‘One out of 20 not a great stat’ (PQ, December 2017). I even looked up Rakesh Shaunak, the only chief executive with a BAME background working for a top 20 accountancy firm. My worry is that when he retires it will go down to zero and it could be some time before there’s anyone leading a top firm who reflects who I am. If I remember rightly, just 28% of the ICAEW membership are
female, too. With so few female members it is going to take a long time to break the male stranglehold on top jobs in the big firms.
The problems appear to be happening at the recruitment stage. Why women aren’t staying in accountancy is the question all the firms must answer. When I joined my firm it was about 40% women and 60% men on the graduate scheme. Just a few years in, many of the talented women I work with are already looking to get out! The long hours and mind-numbing work is not what they signed up to. It also seems a very maledominated culture, especially at management level. Name and address supplied
Our star letter writer wins a fantastic PQ memory stick! More tests please!
I have to agree with Mary Ofili of the Training Place, who is asking for more AAT synoptic tests (PQ, December 2017). I am waiting to take the advanced test and now can’t do it until next February. With the holiday season around the corner I would have a bit of extra time for revision, and can still fit in the family stuff. But February! Please, AAT, look at the timetables and slot in an extra test. I’m not sure it needs to be on-demand – although that would be perfect – as I know that’s a big investment resource-wise. Name and address supplied
I need pqjobs.co.uk
Costs are too high
I have been registered with the ACCA since 1998 and I have always struggled to pass my exams. The reason is that I have been doing mostly temping and contract work. What used to happen is that month end reporting fell on the exam dates every six months (in December and June), and my employers expected me to work the day before the exam (otherwise I would not get paid the hourly rate). As a result, I used to fail my exams due to lack of preparation. I am still contracting and I am determined to complete my
studies. However, I feel ACCA do not seem to care, and are not doing anything to make courses any cheaper. I believe they should work with the various course providers to bring their costs down. A typical course (including revision) for one subject now costs around
£1,000 from a decent provider. I also own a property and pay a monthly mortgage, which is just about the same price as studying one subject, so I also have to prioritise what is important. Although I’m always looking for a permanent role I am now in that
‘catch-22’ situation whereby employers seem to think that I will leave a job quickly, when this is not the case. So getting an employer to pay for study leave is impossible for people like me. I have contacted ACCA about this and it seems that they do not want to listen to my concerns about making course providers provide courses cheaper. As a professional body, surely they can at least do something about this? Isn’t there an ombudsman who can assist students and monitor course prices? I would have thought that with online courses and teaching prices would have fallen, but this hasn’t been the case. Name and address supplied
I would like complain about the ALP platinum approved rating system. I paid £2,000 from my own pocket to attend the tuition, revision and question-based day for the December 2017 sittings. The tuition lasted three days, the revision three and question based section was one whole day. I feel that for what I paid I got very little tuition – three days is not enough to cover the entire syllabus and I felt the experience was rushed. I think the ACCA needs to reevaluate how it awards the platinum designation as I don’t feel it’s a platinum service I am being offered. For this money I would expect stringent and continual testing to assess my performance and ensure I am up to exam standard before attending the next class. Instead, I had a tutor who read off Powerpoint, so previous learning was unconsolidated. I would also like to complain about the ACCA exams. I feel that the content to be learnt in the theory-heavy papers of P1 and P3 is too much. How much of that is actually used? Expecting us to write essays on these topics is not helpful and takes away the flair of what accountancy should be. ACCA should follow the example of CIMA and make the exams computer based. Name and address supplied
PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: email@example.com Website: www.pqmagazine.co.uk | Editor/publisher: Graham Hambly firstname.lastname@example.org | Advertising manager: Polly Thrasivoulou email@example.com Associate editor: Adam Riches | Art editor: Tim Parker | Subscriptions: firstname.lastname@example.org | Contributors: Robert Bruce, Prem Sikka, Zoe Robinson, Tony Kelly, Phil Gammon | Origination and print services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email email@example.com
Published by PQ Publishing © PQ Publishing 2017
ROBERT BRUCE Flexibility and the changing nature of work Breakfast meetings on the day after the Budget are predictable. Experts will talk through obscure tax changes and their unexpected consequences, while the assembled clients munch on croissants and bacon sandwiches. But this year was different. RSM had asked Matthew Taylor to talk about ‘The 21st Century Workforce’ and his review for the Government about change ahead in the nature of the workforce and the gig economy. This is not normal fare. Taylor is a refreshingly straightforward chap. And, from his report, he clearly thinks he is on to something. If large tranches of the workforce genuinely want to be part of a gig economy then we should rethink the structures, and the tax consequences, so that they can easily do so. And he’s clearly making a difference. Following his review, published last July, there was an announcement in the Budget that a review looking at employment status and taxation is to follow. Taylor is not one for hammering on doors. He takes the view that gaining public acceptance and support for what ought to happen should come about first. Then you don’t have to shout at politicians to achieve change. “Win the argument on principle and change will follow”, he said. He has the younger end of the workforce on his side. Who would have thought, as he explained, that Tesco would introduce an app to enable people to work the hours that they want and at any store they want? Flexibility, as he said, is a good thing. Robert Bruce is an award-winning writer on accountancy for The Times
New CIMA syllabus for summer
CIMA looks set to unveil its newlook qualification to coincide with the 2018 Football World Cup! In an exclusive interview with PQ magazine, CIMA’s Noel Tagoe (pictured) told us he will be taking his vision for the preliminary draft syllabus out to tutors this month. Tagoe was quick to stress that the key to any changes will be ‘employability’ and the long-term career success of CIMA’s PQs. He also said he was very aware that CIMA needs to deal with the issue of technology and where it fits into the syllabus, and how it will affect finance. Then there’s the thorny tpics of intangible assets and realworld costing. Tagoe confirmed the plan is to ‘soft launch’ the new-look syllabus next summer. That means students
will be sitting a new syllabus in 2019. Tagoe pointed out that all stakeholders have been part of the process from the start, something that might not have been true of the 2015 ‘big bang’ changes! He
Living in a code-free world
Building on the success of its first machine learning project, Xero has unveiled the next step in its journey towards code-free accounting – the automation of account codes and bills for small businesses and their partners. With more than 500,0000 bills entered into Xero every day, and each line of the bill edited individually, the automation of billing account codes is set to transform accounting practices, ensuring greater accuracy and reducing the time businesses
spend creating bills. Xero said that bills is the second-most commonly used feature, but it has the secondhighest rate of defaults, as many small business use very different systems. It discovered 50% of businesses use 10 or more expense codes, with many creating their own codes, which often means that information is entered incorrectly. Xero’s new AI system considers each individual business’s characteristics, then recommends account codes based on what it has learnt.
used by large recruiters has been questioned after research has found that 20% of graduates admitted they have cheated on them, or at least thought about it! Most of the cheating graduates simply got brighter friends to take the test for them. Meanwhile 60% of graduates felt that the tests aren’t a good way to find the best candidates, and are just a way for large employers to filter applicants.
long period could raise the risk of vision defects and even blindness, says a worrying new study. It appears that prolonged stress raises pressure inside the eyeball, a key risk factor for glaucoma. Using university students in the run-up to exams, scientists discovered significant increases in ocular pressure. Tiny increases raise the risk of glaucoma by 10%.
said CIMA will in future be moving away from these big four-year changes, and continuous review will be the name of the game. Interestingly, Tagoe said that the plan is to be much clearer to students about what they need to be studying. “There will be no second-guessing anymore,” he emphasised. That said, he pointed out that this will not make exams more predictable. He explained: “We will make the areas being examined predictable, like say the need to construct a budget.” Tagoe went on to say that he wants to hear everyone’s voice in the discussion, and he particularly wants to hear from PQs. • PQ will be working closely with CIMA to ensure PQs get their voices heard, so stay tuned.
KEEPING TAX REAL
The AAT has confirmed that it is not going to change its tax assessments and introduce generic tax exams. We reported in our November issue that tutors raised concerns about meetings they had had with AAT officials about a possible move towards generic tax assessments. A spokesman told PQ that after review the AAT has decided it won’t be making any changes for the foreseeable future. “Hopefully, that should put some of the worries to rest,” he said. Tutors were concerned about the idea of a ‘made up tax regime’. They stressed that AAT needed to remain a coalface qualification where students learn real legislation.
In brief Awards deadline extended We have extended the deadline for nominations for the 2018 PQ Awards to Friday 12 January 2018 – so come on, get them in! They will again be held in February in the glamorous surroundings of Café de Paris. To download an application form go to www.pqmagazine.com and click on the ‘pqawards’ button on the home page. See page 15 for more. Cheating graduates The value of the aptitude tests 6
Eyesight risk Taking multiple exams over a
Register of interest Accountancy regulator, the FRC, recently updated its
Governance Bible and Code of Conduct, and published its Register of Interests. The register got all the news coverage! It reveals, perhaps not surprisingly, that many directors and senior officials are members of the pension schemes of the Big 4 firms. CEO Stephen Haddrill even discloses that his wife is a deputy director in the BEIS, responsible for the department’s relationship management with its partner organisations, (since 2017 this included the FRC). PQ Magazine January 2018
Accountancy college of the year
MBA (International Management)
Be ambitious. January and September start dates available
Why LSBU? • Very competitively priced in London
• Two years experience required
• Personal growth: develop transferable skills in leadership, communication, teamwork, innovation, creativity, resilience, dealing with ambiguity, persuasive advocacy, problem solving and critical thinking.
• Taught by experienced academics and practitioners: with national and international reputations, who contribute to public policy debate and publish original research
• Consultancy practice and start-up advice: you’ll be able to gain hands-on consultancy experience through the Business Solutions Centre
• Live case-study learning: consolidate and apply your learning to real business situations and propose clear, evidence-based solutions to contemporary business problems.
Graduates from our MBA programmes have gone onto management roles and this course has accelerated their success in the Business world.
• Great central London location for easy study options with commutes from your office
0800 923 88 88 | firstname.lastname@example.org | www.lsbu.ac.uk
PREM SIKKA Paradise Papers shatter Big 4’s ethical claims The Paradise Papers leak focused attention once again on organised tax avoidance. The 13.5 million documents provide a glimpse of how corporations and wealthy elites structure their affairs to avoid taxes. They used intragroup loans, royalties, management fees, trusts and other mechanisms, betraying the handiwork of the Big 4. The revelations cannot be reconciled with the Big 4 firms’ claims of ethical conduct. PwC says that “high standards of ethical behaviour are fundamental to everything we do”. Deloitte claims “integrity and ethical behaviour are central to maintaining our reputation”. EY states that “we reject unethical or illegal business practices... we are alert for personal and professional conflicts of interest”. KPMG boasts “high ethical principles”. The firms have failed to align their internal practices with the external claims. Departments and individuals are set profit/revenue targets. Those meeting the targets are rewarded and others are disciplined. Over a period of time, certain habits and practices become normalised and profits from tax avoidance become just another part of daily organisational life. As the internal and external responses remain decoupled, any claims of ethical conduct come across as hypocrisy. The bad publicity should encourage firms to align organisational culture, practices and mindsets of staff with social expectations, but they have shown little inclination to do so. Tougher regulation and loss of professional esteem will follow. Prem Sikka is Emeritus Professor of Accounting at the University of Essex
The rise of the regions
More and more graduates are looking to start their careers outside London, according to the latest stats. For many debt-ridden graduates the lure of the regions is growing because of the perceived better life-style opportunities outside the capital. PwC’s chairman, Kevin Ellis, recently admitted there was a trend of the regional offices being able to compete for the brightest graduates. He ventured that location is becoming increasingly ‘agnostic’. Deloitte’s Georgia Greer said the Big 4 company is seeing an increasing number of graduates
Passing with Osborne In an attempt to make revision easier for ACCA PQs, Osborne Books has released a new ‘Revise!’ series for the F1 to F9 exams. Osborne says the new series is perfect for students returning to ACCA study after a period away and for those who want to renew their knowledge of key areas. The texts also provide extra support for students who have not covered certain areas due to their exemptions. Typically, the books are between 100-200 pages, so
should be manageable for even the ultrabusy student! PQ really liked the use of colour and the learning summaries, key points and clear definitions. The examstyle questions will also go down well with students. The manuals come in at just £20 too and just feel less daunting. • Check out our great Osborne giveaway on page 34.
So are you having a ‘quarter life’ crisis?
Having doubts about your career drive? Well, you may not be alone. New research has revealed that seven in 10 young professionals (72%) believe they are encountering a ‘quarter-life crisis’, which is making them reassess their career path and life choices. The study, by LinkedIn, discovered that finding a career you are passionate about is causing many (57%) of young professional to experience feelings of crisis. Researchers have even put an age on when this crisis will hit – 26 years and nine months old! A total of 31% of those surveyed felt they have wasted years in the wrong job, while 35% have changed careers entirely, and 22% have handed in their notice without having a job to go to.
‘Poor’ audits could lead to £10m fines New £10m fines for seriously poor audit work could become the norm, following an independent review into the FRC’s enforcement sanctions. The report, chaired by former Court of Appeal judge, Sir Christopher Clarke, recommended the removal of any requirement for tribunals to consider themselves bound by previous cases when determining the appropriate sanction to impose. While Sir Christopher’s team said that it is not appropriate to set a tariff or range for financial sanctions, it suggested a fine of £10m or more could be “deemed appropriate for cases involving seriously poor audit work 8
who want to work outside London. EY confirmed that the proportion of London placements is going in a downward direction. In 2016, the number of graduates joining London offices was 92%. In 2017, that number dropped to 52%. The big story will be if that figures drops below 50% in 2018. Meanwhile, KPMG bucked the trend. Its head of graduate recruitment, Linda Emery, said
carried out by a Big 4 firm”. This would effectively see a doubling of the current fines imposed. One of the biggest fines to date was the £5.1m levied by the FRC on PwC in the summer, for its audit of fellow accountancy firm RSM Tenon in 2011. The independent review also proposed at the same time an adjustment of settlement discount provisions to encourage timely settlements. Italian fines ‘for conspiracy’ Anti-trust authorities in Italy have fined the Big 4 accountancy firms a total of £20m for allegedly conspiring to divvy up large public consultancy contracts. It has been claimed that Deloitte, KPMG, EY and PwC all colluded
demand for London jobs remains high, and they are often filled first. PwC’s Ellis felt that graduates seemed more aware of the opportunities outside the capital and it was important that top roles existed around the country.
It’s time for more women
AAT is pushing for the government to introduce specific female and disability targets in its existing three million apprenticeship target. This was just one of the many suggestions AAT submitted to the recent All Party Parliamentary Group on Women and Working. As part of a two-page response, AAT said it did not support the idea of legislation to address the way in which women may be treated by the explosion of the ‘gig economy’. AAT said: “Concerns about gender issues in particular sectors of the economy should be addressed with all in mind, not simply by imposing restrictions on those working in the gig economy.” It also said the government should require schools and colleges to make female students aware of the opportunities in accountancy, finance and STEM (science, technology, engineering and maths).
to win contracts worth over £50m. In effect, this nullified the bidding process and prevented competition from outside ‘the cartel’, said Italian authorities in a statement. EY growing the fastest EY has reported UK fee income growth of 9.2% to £2.35bn, making it the fastest-growing of the Big 4 firms. Profits rose 2.7% to £464m and the average distributable profit per partner increased to £677,000 (it was £662,000 in 2016). The firm recruited nearly 4,000 people across the UK, including 1,500 student places and 130 apprenticeships. EY’s chairman Steve Varley said: “We have invested in new technologies and our people, as clients turn to us for more innovative products and services.” PQ Magazine January 2018
A new way to qualify as a professional accountant The Level 7 Accountancy/Taxation Professional Apprenticeship is a new approach to professional training. You can become qualified sooner and your employer can access funding to pay for your studies. With our expertise in this field, we will ensure you develop the relevant knowledge, skills and behaviours needed to succeed in your role. Why is the Level 7 Apprenticeship perfect for you and your employer? • Training costs covered by Apprenticeship Levy payments or 90% funded for non-levy payers • Programmes open to new and existing students • A choice of professional qualifications within the programme (ACCA, CIMA, ICAEW) • Ensures you have the support to develop your professional skills and behaviours to a high level, beyond what is required in the professional exams As an award-winning training provider and with our expertise in professional education apprenticeships, we are already trusted by leading firms to deliver their apprenticeships.
For more information 03300 603200
ZOE ROBINSON Will you take back control in 2018?
Another year is about to slip by and as a result you may find yourself reflecting on 2017 and planning for 2018. You might even have started thinking about some New Year resolutions, yet how many resolutions are made on 1 January, only to be cast to one side before the month is out? There are a number of reasons for this. “It’s not my fault, I just don’t have any will power” is a common phrase. Or what about “Look, I was committed but I simply didn’t have the time”. And the classic procrastination comment: “I think it best I start next month”. I am sure there are many more excuses, but what the above have in common is a desire to avoid both pain and responsibility which, when you think about it, is very sensible. Take will power for example; by thinking of it as something you either have or don’t, it can’t be your fault if you don’t have any if it’s outside your control. And in that is the irony – how can you ever achieve something that is not within your control? So, make 2018 the year in which you take back control. After all, isn’t that what many people voted for?
Zoe Robinson is Learning and Programmes Director at Kaplan Financial
ACCA December exam feedback Early feedback from the December ACCA exams shows that P7 was top of students’ ‘hate list’. Candidates described the exam as ‘horrible’, ‘vexing’ and ‘brutal’. You can then throw in time pressure to create a very intimidating test, said one PQ. Students struggled with the sheer number of risks they had to sort in Q1. “There definitely seemed more than the marks allocated,” said a sitter. The worry for many was they felt they were just repeating themselves. Q2 seemed to be the problem question this time around. “I have never seen a question like it,” a student told us. Another just
said: “What the f**k was that!” The question on quality control review was just not like anything in the study texts, said a disappointed PQ. P1 was also hugely time pressured, and one PQ admitted to being ‘knackered’ after it finished. Interestingly, a student said they found the exam ‘super dry and boring’, with the exception of Q2. So, come on Mr Examiner, try to
Gold-winning team: Avado’s ACCA courses won the Best Online Distance Learning programme at the Learning Technologies awards
Exam ready? You need PQ-Go!
PQ-Go just got bigger! Together with the help of top tutors we have devised a series of free online tests to see if you are ‘exam ready’. We now have nine AAT practice papers and one ACCA paper on www.pq-go.com. So check out our Level 3 Advanced Bookkeeping, Professional Ethics and Accounts Preparation tests. Then for Level 4 we have added Cash & Treasury Management, Accounting Systems & Control, and Financial Statements of Limited Companies. It really is easy to take a look and is free.
make it more interesting please! There also seemed to be confusion about what the examiner meant by ‘briefing’. By contrast it was pretty quite on the F8 front. The general consensus is that the exam seemed ‘OK’, and much better than some recent sittings. A question that did cause a few raised eyebrows was the one about substantive procedures. P2 also got a mixed response, but for many it was ‘not bad at all’. The consolidation question was easier than most (if not all) of the past papers I have sat, explained one sitter. Another said: “P2 was less scary than I was expecting, still time pressured though.” We will now have to wait until the results are posted on 15 January to see if pass rates reflect students’ feelings. • Go to www.pqmagazine.com to see our feedback for each paper.
FRC: we should have done more The FRC has admitted it should have adopted a more proactive approach to its early enquiries into HBOS. In a letter to the chair of the Treasury Select Committee, Nicky Morgan, FRC’s Stephen Haddrill said it should have stepped forward, rather than relying on other regulators to do the job first. The FRC has come under pressure after it found no fault with KPMG’s audit of HBOS just before the bank went bust. Haddrill has also taken on board the criticism that the FRC has “too many people with a background in the major accounting firms we regulate”. We are talking the Big 4 here. He stressed that the FRC is now conducting a further review of this aspect of its governance. The letter promises that the FRC will be more open about its work in the future.
In brief Overcharging to stop Graduates will no longer be overcharged when they repay their student loans now that the tax authorities have agreed to share their data with the company that oversees the loans. Accounting firm RSM has been calling for a change for several years, highlighting the unfairness in the system, which results in tens of thousands of graduates having to continue repayments on student loans that have already been cleared. RSM recently revealed that 86,000 10
graduates overpaid by an average of £592 each in 2015-16. More money mules The number of young people acting as ‘money mules’ has risen by 75% in one year, says the UK’s fraud prevention service, Cifas. Between January and September 2017 there were 8,652 cases involving 18 to 24 year olds. Young people, especially students, are often targeted because they are perceived as being more vulnerable and short of money.
Taxing the tech companies Italy looks set to be the first European country to introduce a 6% tax on online sales by the big tech companies such as Amazon and Apple. There is also a plan for buyers of ‘intangible digital products’ (such as advertising) on Google and Facebook to pay the Italian treasury the 6% tax too. PQ magazine understands that the UK treasury is also looking at the idea of taxing the tech companies based on the number of users they have in Britain.
AAT on the panel AAT CEO Mark Farrar (pictured) and head of qualifications and product development, Rachel Kellett, have both been appointed to the panels of industry experts helping to develop the legal, financial and accounting T level qualifications. Farrar said: “Highquality technical qualifications are an excellent method of improving social mobility, opening up paths that young people can access as a route into their chosen career.” PQ Magazine January 2018
Get ACCA qualified online for less
Save 30% * on the full ACCA qualiﬁcation an papers F5-8 when you join AVADO
LEARNING THAT WORKS
EXPERIENCE ONLINE LEARNING THAT WORKS ACCA pass rates up to 95%** Awar winning tutors, available online, by phone an email to get you exam rea y Engaging, bite-size content at your bi ﬁngertips, stu y whenever an wherever you want Full package with tuition, revision an mock-exams all inclu e
“I never expecte online learning woul give me so much support. I really like the course structure - from ay one the exam questions are built in - it makes the revision so much easier” Doreen Liu
Gol Winner of Best Online Distance Learning Programme 2017!
CALL TODAY ON 0 0 7173 5685
www.ava olearning.com/pq *Save 30% on the full ACCA pathway starting in January or 30% oﬀ F5, F6, F7, or F8 starting in December. For ACCA stu ents new to AVADO only, book by 22n December.
ACCA tuition led by PQ Magazine’s Public Sector Lecturer of the Year • • • • •
Courses starting January for June 2018 exams All ACCA modules Revision classes in April/May – included in tuition or available independently F4-F9 and P1-P7 Learn on campus from experienced professionals
Find more information online or speak to programme leader Nagin Lad directly: email@example.com
Are you prepared for session CBEs? From March 2018, F5-F9 exams will only be available as computer-based exams (CBEs) – you’ll no longer be able to sit paper exams. There are lots of resources available to support you to get ready for the change. Session CBEs will give you the opportunity to: • take exams that reflect the working environment to prepare you as a modern financial professional • enhance your digital skills • edit your answers easily and quickly • manage your time effectively with easy navigation
For more information visit: accaglobal.com/session-cbes
annual quiz PQ
ANNUAL BUMPER QUIZ SO WHAT DO YOU KNOW? Back by popular demand, here is our much-loved Annual Bumper Quiz. Thanks to sponsors AAT, ACCA, CIMA and ICAEW we are giving five readers the chance to win a fabulous Google Mini! SPORT
They last played in the top division in 1972, but which football club was promoted to the top flight of English football in May?
2 3 4 5
In which country did Lewis Hamilton clinch the Formula 1 World Drivers Championship? At the Rugby League World Cup, who caused a shock by beating France 29-18 in October? Who scored the most runs in the England v South Africa Test series, with 461 runs at 57.62? Who’s back means Northern Ireland will be left at home when the Football World Cup takes place in 2018?
The British & Irish Lions toured New Zealand in 2017. Who won the three-match series? Who lost his job as boss of the England Ladies football team in September after allegations of improper behaviour?
In the US, who won the Major League Baseball World Series?
Because I don’t speak to Russians.”
Who replaced Sir Michael Fallon as Defence Secretary in November? What was the name of the hurricane that struck the US in August causing huge damage to the Houston metropolitan area?
Which national TV treasure, born 2/2/1928, celebrity died on 18 August aged 89? The US ‘national anthem’ sports protest continued in 2017, but who is ‘credited’ with starting the protest?
Collins Dictionary unveiled its word of the year for 2017. What beat off the challenge of ‘unicorn’ and ‘Corbynmania’?
Which former PwC trainee now runs Formula 1?
The former Catalan leader, Carles Puigdemont, turned himself into which national police force after an EU-wide arrest warrant was issued in November?
Just once in Premiership football history has goal difference decided the title, but who won it and when?
Which Irish popstar, who apparently owns a shopping mall in Lithuania, was recently ‘outed’ by the Paradise Papers?
The IAAF World Championship took place in London during the summer. Mo Farah won gold and silver – but who won GB’s other gold medal?
What was the name of the spacecraft that ended its 13-year mission in September by plunging into Saturn, becoming the first spaceship to enter the planet’s atmosphere?
IN THE NEWS
In August who said: “There’s no collusion. You know why?
Sophie Faldo won The Great British Bake Off. In
Thanks to our fabulous sponsors…
PQ Magazine January 2018
which branch of the armed forces did she formerly serve?
Which movie won Best Film at the 2017 Oscars?
Who said at the GQ Men of the Year Awards: “DJs like [Calvin] Harris are not stars but accountants”?
Name the Amazon Prime TV series featuring an accountancy ‘superhero’. He also appeared on the cover of PQ magazine in November?
Strictly Come Dancing fans were shocked when the bookies’ favourite to win the show was eliminated on 5 November. Who was he and what was his partner’s name?
Which famous film star and wife welcomed twins Ella and Alexandra into the world in June?
Game of Thrones star Kit Harington recently starred in the BBC’s Gunpowder. Which famous conspirator did he portray?
Which band this year joined Fleetwood Mac and The Eagles for having five members with individual top 40 hits on the Music Hot 100 list?
Who has taken over as the 13th Time Lord?
Kem Cetinay and Amber Davies won this year’s Love Island. But who was Kem’s bromance with?
Liverpool FC’s signature song ‘You’ll Never Walk Alone’ comes from which musical?
Which paper size measures 297x420mm?
Which famous maritime phrase reportedly stems from the sinking of HMS Birkenhead in 1852?
What is the highest number on a roulette wheel?
Who is the patron saint of accountants?
PQ won a Luca from the ICB, named after Luca Paciloli, ‘The Father of Accounting and Bookkeeping’. What nationality was Paciloli?
37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
When did the first Apple iPhone become available?
Which science fiction writer wrote the three laws of robotics? Which phobia is a fear of dogs?
There is a village in France near the Somme that has a one-letter name. Which letter is it? Name the official record for the daily proceedings in the British Parliament? What is the first element in the periodic table?
SCIENCE & NATURE world?
What is the largest landlocked country in the
On what island was a new species of orangutan recently discovered? Who invented the jet engine?
Which part of the earth lies between the outer core and the crust? What is the longest river on earth? What do 1,000 gigabytes make?
Where was a speed record of 11.2mph set in 1972? Lemurs are native to just one country. Name it?
What planet in our solar system is closest to the size of earth? Nails are made of which substance?
Send your answers to:
The Editor, PQ magazine, Unit 3a, Kingfisher Heights, Bramwell Way, Royal Docks, London E16 2GQ. Or email them – putting ‘Quiz’in the header – to firstname.lastname@example.org. The closing date is Monday 15 January 2018. 13
PQ purr-fect pets
Paws for thought
Only in accountancy could there have been a CAT qualification! Back in the day, the ACCA had a qualification called the Certified Accounting Technician (now part of the Foundations In Accountancy suite of qualifications). Thanks for all the pictures. Cat Hill (her real name) even suggested that cat’s don’t just study accountancy they help write the courses, too! That’s her Merlin in the top right picture. Please share any pictures you might have of pets studying accountancy. Send to email@example.com
Start 2018 strong Plan ahead and book your exams. Standard entry for March exams closes on 29 January 2018. Find out more: accaglobal.com/bookexams
PQ Magazine January 2018
the future of accountancy PQ
Here’s to a successful 2018 The London South Bank University/PQ magazine ‘Future of Accountancy’ conference was a roaring success. Here keynote speaker Alan Hatfield, ACCA’s education chief, offers some personal thoughts on the event
was delighted to be the opening speaker at PQ magazine/London South Bank University’s recent conference ‘The Future of Accountancy: Success in a changing world’. It gave me a fantastic opportunity to set the scene by sharing with delegates ACCA’s recent research about where the profession is headed, and the skills needed for the future. The event’s strong theme about success was a hot topic across many of the lively panel discussions. There was a really good head-hunting session with Menzies, where the firm’s Peter Noyce spoke about the practicalities of job hunting, referencing our own seven quotients for success and how to bring them alive. Tom Eagle from Pro-Recruitment offered five steps for interview success, from basics like making a good first impression, to researching the employer and building rapport at the interview. I know success is what ACCA students and PQs aim for. When I meet ACCA students around the world, success is often a word they use about their futures. Finding a new job I’m sure PQ readers will be wondering what successes 2018 will hold for them, and I suspect a few of you will be scribbling down New Year resolutions about how to pass your exams, finding a new job, securing a promotion or making a change to how you work. Applying for a job can be a challenge. And that’s why we introduced the ACCA Careers job board in 2015. Since April 2017 to the end of October, we had well over one million jobs on the site – that's one job posted every 16 seconds. The site also includes some great tips – as does PQ magazine – with regular insights about career planning. After the LSBU event I was thinking about how we can find career success in a very competitive world.
Delegates feedback for the Future of Accountancy conference was overwhelmingly positive
PQ Magazine January 2018
Looking ahead: Alan Hatfield addresses delegates in the conference’s opening session
It’s always been the case that a CV needs to really sparkle. This came up in the head-hunting session, where the experts said a successful CV needs targeting to the employer. One CV does not fit all. Read your CV and your covering letter out loud to a family member or friend – get their feedback. Recruiters often get more than 500 CVs just for one job, so a few days after you’ve sent it follow up with a call or email. Success is also about the networks we build and the support we ask for. ACCA Careers is an online network, and has discussions with students, members, affiliates and other stakeholders. And, of course, PQ always has a wealth of advice from lecturers and examiners. Perhaps another resolution is to find a mentor. This is a great way of getting a fresh perspective and building contacts. I also spoke at the conference about what professional accountants of tomorrow think about the future. You may have already read our research, called Generation Next, which asked those 36 and under about their career hopes
and aspirations. We polled almost 19,000 ACCA students and members for this research, and it paints an optimistic picture about the future, and where accountancy as a career fits in. The good news is that finance is seen to be a strong platform on which to build careers. Young professionals appear to be attracted to the profession for the long-term career prospects it offers, with 85% agreeing that finance career experience was valuable to be future leaders in organisations – and for their long-term career prospects, whether they set up in business by themselves or move into another sector. Development opportunities Our data also shows that young professionals don’t see themselves staying in one job, or even sector or industry, for the majority of their careers. We also found that ‘Gen Next’ wants to take responsibility for their careers and seek out practical development opportunities that will help them advance. Success is essentially about good planning – from choosing carefully when you want to take your exams to getting a career plan written down. And for those still pondering their New Year resolutions, our ‘Gen Next’ report also includes practical advice and guidance for future success, listed below to get you thinking: 1. Own your career. 2. Future proof your skills. 3. Create a personal brand. 4. Never dismiss a lateral move. 5. Create change where you work now – suggest change to your employer. 6. Become ‘intrapreneurial’ inside your organisation. 7. Think about a global role. 8. Look for mentors and sponsors. 9. Lead the way with technology. 10. And always, always build your network. All at ACCA wish PQ readers the very best for a successful future. PQ 15
PQ ACCA ethics module
A new ethical dawn Stephanie Keenan explains how the new Ethics and Professional Skills Module will work
ou will hopefully be aware that ACCA are introducing changes to the Strategic Professional level of the qualification. From the September 2018 sitting, a new case study paper, Strategic Business Leader (SBL), will be introduced replacing the current P1 (Governance, Risk & Ethics) and the P3 (Business Strategy) papers and P2 (Corporate Reporting) will be replaced with Strategic Business Reporting. Ahead of this, the new Ethics and Professional Skills module was launched on 31 October 2017, replacing the previous Ethics module. The new module has been designed to make you more competent in dealing with real-life business and ethical situations and dilemmas. If you completed the old Ethics module prior to 31 October there is no requirement for you to complete the new module. However, you will be given access to it and may wish to complete it to ensure you have an understanding of all the ethical and professional behaviours ACCA expect of their students and members. The new Ethics and Professional Skills module is an online interactive requirement that you must complete as one of the three requirements in order to gain full membership to the ACCA – your exams, the practical experience requirement (PER) and the Ethics and Professional Skills module. Over recent years many businesses have received public condemnation for their behaviour towards society as a whole. As a result, accountants have come under increased pressure to guide those who manage businesses to behave in a way that is in the best interests of all stakeholders, and not just attempting to maximise shareholder wealth. It is with this in mind that ACCA have created the Ethics and Professional Skills module. Not only will it will aid your technical knowledge by developing the ethical and professional behaviours you’ll need to successfully complete your Strategic Professional exams, in particular providing you with some of the skills needed to gain the professional skills
marks in the SBL exam, but it also provides reassurance to your employer/future employers that you understand and can apply ethical behaviours in real-world work situations. This new module – the first of its kind – is split into six separate interactive units: • Ethics and professionalism. • Personal effectiveness. • Innovation and scepticism. • Commercial awareness, analysis, evaluation and problem solving. • Leadership and team work. • Communication and interpersonal skills. Each unit is broken down into sub-sections and looks at a particular behaviour/skill. The unit covers both the knowledge needed to understand the behaviour and also an insight into how it could be applicable in real-world work situations. You will be presented with short scenarios where you get a chance to demonstrate how you would deal with that situation in the work place. They can then be saved into your ‘My portfolio’ sections of the module and to demonstrate achievement towards your performance objectives. The final element of the module is an online assessment. If you demonstrate the required skills and behaviours you will receive a certificate as proof of completion.
The entire module is expected to take around 20 hours to complete and costs £60, payable directly to ACCA. This is a one-off payment, which means if you are not successful in meeting the requirements of the module first time you can retry the assessment as many times as needed until you demonstrate the necessary behaviours. The module will be available to you in MyACCA post completion for you to use as reference if you need any guidance with a real-world work situation. In terms of when to take the module, currently I would recommend you attempt it just before or alongside P1 (or as close as possible after sitting the P1 examination) as there are several crossovers between the Ethics and Professional Skills module and the existing P1 paper. From September, when the new Strategic Professional exams become examinable I would strongly recommend that you attempt the module prior to the commencement of your studies at the Strategic Professional level and definitely before you sit Strategic Business Leader. You will need a solid understanding of the skills and behaviours the Ethics and Professional Skills module develop to be successful at the case study. . PQ • Stephanie Keenan is a tutor at Kaplan Financial
PQ Magazine January 2018
AAT fast track The ideal route to Chartered Public Finance Accountant status The CIPFA Professional Accountancy Qualiﬁcation is your fast track to professional accountancy – developing your skills and boosting your career prospects. Here’s what we have to offer if you’re AAT Level 4 qualiﬁed: Four free exemptions – only eight modules to complete* Reduced Practical Experience Portfolio (PEP) – 200 days compared to 400 Flexible learning – face-to-face, web class or self-study Internationally recognised status with CPFA designation Find out more about our AAT fast track route and free exemptions: www.cipfa.org/aat T: 020 7543 5600 E: firstname.lastname@example.org
* Subject to AAT modules completed.
PQ Awards 2018
LASTORDERS Right, we have given you more time, but it really is time to get your nominations in.
o you know, we have extended the deadline for entries to the PQ magazine Awards until 5pm on Friday 12 January 2018. But that doesn’t mean you should relax, we really need your nominations today! And that really is the final cut-off point. Our judges are all signed up and sharpening their ‘opinions’. It will be their jobs to shortlist and then pick the winners. That’s how independent our awards are – editor Graham Hambly doesn’t even get a vote! The venue for the awards ceremony will again be the wonderful Café de Paris, just off Leicester Square, and you need to put Tuesday 20 February in your diary. But before that there is the little matter of 250 words on why you think you/your nominee should win one of our coveted prizes. All those shortlisted will be invited along to the awards night and it could mean you end up a cover star of the magazine. CIPFA PQ Tim Mpofu is our current PQ of the Year. He said: “It’s great to be recognised for your work and contributions, but it’s equally humbling to see how many people are rooting for your success.” He still hasn’t got over the “amazing feeling” when his name was called out on the night. Let’s just say the champagne flowed! Each year we have some great individual stories, but don’t forget we are also looking for Accountancy Team of the Year and Student Body of the Year. In all, there are 18 ‘PQs’ up for grabs. Surely you know someone who deserves to be a winner in 2018? PQ
Main man: Tim Mpofu, our current PQ of the Year
• • • • • • • • • • • • • • • • • •
PQ OF THE YEAR NQ OF THE YEAR STUDENT BODY OF THE YEAR ACCOUNTANCY BODY ACCOUNTANCY COLLEGE – PUBLIC SECTOR ACCOUNTANCY COLLEGE – PRIVATE SECTOR ONLINE COLLEGE LECTURER – PUBLIC SECTOR LECTURER – PRIVATE SECTOR STUDY RESOURCE INNOVATION IN ACCOUNTANCY BEST USE OF SOCIAL MEDIA TRAINING MANAGER/MENTOR ACCOUNTANCY TEAM ACCOUNTANCY PERSONALITY EDITOR’S SPECIAL AWARD APPRENTICE OF THE YEAR DISTANCE LEARNING STUDENT OF THE YEAR
REMEMBER: You can either download an application form directly from our website – www.pqmagazine.com – and email your entry to email@example.com. Alternatively, write to The Editor, PQ magazine, Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ. The deadline for all nominations is Friday 12 January 2018.
No awards ceremony is possible without the sponsors. And we have only the best...
PQ Magazine January 2018
You ask. We listen. P Award-winning e-learning Beneﬁt from interactive videos and our innovative individual learning programme.
Personal tutor support
Instant access to ACCA, FCA and AAT qualiﬁed tutors via phone, email, Skype, Twitter and our learning portal.
AAT Distance Learning Training Provider 2017
We will tutor you until you pass. (Students must be actively and continuously studying. Please see our T&Cs for more information.)
Find another provider that marked assignments, mock exams and e-learning tools, and we'll match their price.
“Our winner was able to demonstrate a huge amount of support for their distance learners. They have worked hard to ensure that studying via distance learning doesn’t have to be a lonely experience. From tutor, career and online support, they were able to demonstrate how they really go the extra mile for their students. The submission was passionate and included outstanding student testimonials, examples of their visual study tips as well as their Accounting catchphrase game! The winner of Distance Learning Provider of the Year is: Premier Training” Mark McBride (AAT President)
Prices start from £299! See our website or call our friendly course advisors for a full range of courses and fees.
Enrol anytime of the year AWARDS Study at your own pace 2014 Direct tutor support WINNER Award winning PQ magazine
BKN Training Provider
Training Provider Awards 2014
Accounting Training Provider of the Year
Distance Learning Provider of the Year
Distance Learning Provider of the Year
Best use of e-learning Best use of e-learning
BKN Training Provider Study Resource of the Year
PQ ACCA F8 exam
It’s not rocket science
Paul Kirkwood offers some top advice on passing the Audit & Assurance paper – and practice, like it or not, is a big part of it
can still remember my Audit & Assurance tutor saying this over and over when I was studying for this paper, and looking back I agree to some extent. So why does F8 frequently have the lowest pass rate of the ACCA skills level, with just 38% passing the September 2017 exam? More importantly, how can you give yourself the best opportunity to pass this paper? Well let’s start by thinking about three problems that are faced by F8 students. Problem 1: F8 is a fully narrative paper F8 is a fully narrative-based paper (with few, if any, calculations), and this may be a daunting challenge for students who are much more comfortable when they are using their calculator. Problem 2: F8 is a practical subject F8 is a very practical subject. Every question is linked to a scenario and while there are some knowledge-based marks, the vast majority of questions require you to apply your knowledge. Few students will actually be working as auditors and so it can be difficult to understand how the subject you learn from a textbook is put into practice. Problem 3: Debriefing questions is a challenge The constructed response questions (requiring full written answers) account for 70% of the marks and it can be difficult for a student to compare a model answer to their own attempt as rarely, if ever, will a model answer match that of a student. These issues have faced F8 students for many years. Fortunately, there are simple steps that you can take to get yourself exam ready and give yourself the best opportunity to pass. And now let’s consider solutions to the problems. Solution 1 Let’s start with the underlying fact that F8 is a fully narrative paper. While that may be a challenge to those who prefer doing calculations, it’s a skill that you will need to develop if you wish to succeed in the ACCA qualification as a whole. F8 introduces you to the narrative based exam skills that you need to develop. The F8 exam uses simple, clear requirements that are repeated again and again, sitting after sitting. Look at these requirements from recent exam papers, for example: • March/June ‘17: Identify and explain EIGHT deficiencies in Equestrian Co’s internal controls and provide a recommendation to address each of these deficiencies. • December ‘16: Identify and explain SIX deficiencies in Caterpillar Co's cash receipts 20
system and provide a recommendation to address each of these deficiencies. Obviously, the scenario and area of focus will change, but the basic requirements can be ‘practised, practised and practised’. However, you must make sure that you debrief the model answers thoroughly as it’s of little benefit to simply practise writing questions. Ideally, you should review your answer, think about what you wrote and compare with a similar point in the model answer. Ask yourself – would your answer score the marks available? These regular requirements cover several key syllabus areas including professional ethics, audit risk, internal controls and substantive procedures. A word of caution: take care to read the requirements at least twice before starting your answer to make sure you’re answering the specific question that has been set, rather than the one you’d like to have been set.
preparation for the F8 exam, but here’s the critical point – it’s no good just ‘doing’ questions, you must learn from the experience to allow you to improve when you see a similar question in the real exam. You can learn how to structure your answer and how to use columns effectively (see table, below). This is such an important point, as your examiner explains: “Good exam technique is vital for success in F8. It was especially pleasing to see so many candidates structure their answer in columns, especially for audit risk and internal control questions. Not only does this make it easier to mark, it makes it easier for a candidate to review their answer and ensure they have covered all of the relevant areas, for example it is easier to see at a glance if a test of control has been omitted” (ACCA F8 Examiner’s Report – September 17).
Solution 2 What about the problem of F8 being a practical paper, even though few students actually work as auditors? Well, the answer is deceptively simple – to get a practical understanding of the types of scenario the examiner may set, you must ‘practise, practise and practise’ exam standard questions. This will build your ability to apply core knowledge to scenarios. Don’t just take my word for it – this is from the examiner: “Candidates who do not spend sufficient time practising questions are unlikely to be successful as the written questions in particular aim to test candidate’s application skills” (ACCA F8 Examiner’s Report – September 17). I’m not suggesting in any way that the paper is easy – you first must build your knowledge and then ‘practise, practise and practise’ exam standard questions.
You can learn whether your answers are good enough to earn the available marks. I understand that marking your own answers can be difficult as your answers will be different to the model answers. So why not share your answers with a friend who is also studying for the F8 paper and mark each other’s? Or ask someone who has already passed the F8 paper to mark your questions.
Solution 3 Hopefully, we’ve established that practising exam standard questions really is the best
In summary So where have we got to? Well, we know that the F8 paper is not easy – the pass rate proves this. But we also know the right way to prepare for it – ‘practise, practise, practise’. I know that it’s not easy and, let’s be honest, it’s not a particularly pleasant experience to sit down and attack a 30-mark question. However, to give ourselves the best opportunity of success, the best path is rarely easy – but it’s not rocket science, either! PQ • Paul Kirkwood is AVADO’s ACCA Lead Tutor
Hurling Co upgraded its website during the year at a cost of $1·1m. The costs incurred should be correctly allocated between revenue and capital expenditure.
Review a breakdown of the costs and agree to invoices to assess the nature of the expenditure and, if capital, agree to inclusion within the asset register or agree to the statement of profit or loss.
Hurling Co has entered into a transaction to purchase a new warehouse for $3·2m and it is anticipated that the legal process will be completed by the year end.
Discuss with management as to whether the warehouse purchase was completed by the year end. If so, inspect legal documents of ownership, such as title deeds ensuring these are dated prior to 1 April 20X7 and are in the company name.
A customer of Hurling Co has been encountering difficulties paying their outstanding balance of $1·2m and Hurling Co has agreed to a revised credit period.
Review the revised credit terms and identify if any after date cash receipts for this customer have been made.
Hurling Co has halted further sales of its new product Luge and a product recall has been initiated for any goods sold in the past four months.
Discuss with the finance director whether any write downs will be made to this product and what, if any, modifications may be required with regards the quality. PQ Magazine January 2018
ICAEW spotlight PQ
For ACAs, keeping their online training file up-to-date is essential, and easier than they may think. Nicola White talks us through the process
rom the day you register as an ACA student, you will be able to log in and access your training file. Providing a record of your training, you will log practical work experience, as well as recording professional development and ethics progress discussed in your six monthly reviews. It is solely your responsibility to keep your file current until it is signed off at the end of your training agreement.
Charting your path to a pass administration towards your work experience. If your employer’s internal professional development and/or ethical programmes have been accredited by ICAEW, you will only see the sections of the training file relevant to you.
Track your progress Your training file is easy to navigate. Ensure you don’t miss a step by watching the guidance video, it provides everything you need to know. Watch it on demand at icaew.com/how-to. Once you have watched the video, start recording your progress as soon as your training starts and continue throughout your training agreement period.
Audit qualification Audit experience gained during your ACA training may help you to gain the Audit Qualification (AQ), if you’re working for a firm of registered auditors in the UK who is an ICAEW authorised training employer. You will need the AQ to become a Responsible Individual to sign audit reports in the future. Ensure you record your audit experience throughout your training agreement, not just after an audit. If you don’t record your audit experience, you will lose it. At the end of your training agreement, you will have six months to finalise your audit experience and submit to ICAEW.
Professional development Provide an example from your day-to-day work experience to show how you meet each professional development skill. You’ll need to evidence all 52 skills before the end of your training agreement. Record how you demonstrate each skill within your training file and include feedback from your QPRT, counsellor or principal. Access webinars and past Vital articles on each professional development skill to ensure you continue to gain those all-important skills at icaew.com/listenagain
ethical examples that you read in the news or see in the workplace, as you will discuss these at your next review.
Ethics and professional scepticism You’ll develop your ethics know-how throughout your ACA training and it’s vital that ethics is discussed at every sixmonthly review. Failure to complete this section in your journey will jeopardise your journey into membership. Steadily progress through the ethics learning programme during your training and after completing each module watch the corresponding Practising Ethics webinar. Make notes on the ethical scenarios during the webinar, as well as
Practical work experience Keep a record of the number of hours you complete per day using a timesheet or noting the hours in a diary. One working day is seven hours so if you work longer than this, you may be able to record more time. Add your number of days in six-month blocks in your training file and make sure that the days you enter are for the full period of your training agreement – don’t leave any gaps. You can’t count study leave, courses, sickness days, holidays or office
Are you ready to go? Are you exam-ready?
Exams Book a Professional or Advanced Level exam via your training file and log-in on results day to view your marks. You can download and email your exam results to anyone when you’re logged into your file. Remember, you won’t be able to qualify if your training file is incomplete. By keeping your file current it will be much easier when your file is ready to be signed off and it will also help ICAEW to verify your records before you’re invited to become a member. For more help and guidance on your online training file or six-monthly reviews, visit icaew.com/how-to, or speak to your QPRT, counsellor, or principal. PQ • Nicola White, Training and CPD manager at ICAEW Reproduced with the permission of ICAEW, this article was first published in Vital (October 2017)
You need PQ-go.com PQ Magazine January 2018
PQ ACCA P2 exam
he ACCA P2 Corporate Reporting exam is a hard one – but roughly half the students who take it do get through. And there is no reason that you should not be among them. One of the key techniques is making sure you score highly in the few components that are relatively easy. One of those components is the ethics requirement in question 1. This question is based around a monster scenario and requires a monster group financial statement in part 1a for 35 marks. This component has a horrible reputation for dragging students in and swallowing up half the exam. There is no doubt that question 1a is important, but after the hour mark your returns go right down and you could score as little as one mark for every 10 minutes spent. After the hour mark it is time to move on to the narrative. And possibly the most rewarding narrative component in the whole exam is the ethics in question 1c. PICCO A useful model to analyse the ethics in question 1c is PICCO (see below). Most ethics questions involve spotting the scumbag is a scumbag or the idiot is an idiot. But clearly language like this is not professional! So instead we question ‘integrity’ or ‘competence’, or sometimes both. Take a look at the adjusted ethics component from a recent past case study, called ‘Marchant’. Question 1a was particularly challenging. But see below and you will realise that question 1c was there for the taking. One word of warning though. Even though you can think the answer to 1c in moments; it still takes around 10 minutes to actually write out the answer. Marchant 1c. Marchant plans to update its production process and the directors feel that technology-led production is the only feasible way in which the company can remain competitive. Marchant operates from a leased property and the leasing arrangement was established in order to maximise taxation benefits. However, the financial statements have not shown a lease asset or liability to date. A new financial controller joined Marchant just after the financial year end
How to get the measure of P2
Required Discuss the ethical and professional issues in the above situation (7 marks). (1)(c) Marking guide: The usual one mark for each relevant point. Ethics A useful model for the analysis of ethics is the ACCA ethical principles: P – Professionalism (avoiding disrepute). I – Integrity (honesty). C – Confidentiality (keeping secrets). C – Competence (knowing what you are doing). O – Objectivity (independence).
Martin Jones explains how with a smart approach you can pass this tricksy paper
and is presently reviewing the financial statements to prepare for the upcoming audit and to begin making a loan application to finance the new technology. The financial controller feels that the lease relating to both the land and buildings should result in the recognition of a right of use asset and a corresponding liability to recognise the obligation to pay the rent, but the finance director disagrees. The finance director does not wish to recognise the lease liability in the statement of financial position and therefore wishes to simply continue to charge the rent to the profit or loss as it is paid. The finance director feels that the lease does not meet the criteria for a lease. It was made clear by the finance director that showing the lease liability could jeopardise the loan application.
Leases: A contract is a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration [IFRS 16:9]. Land and buildings: The land and buildings contract appears to be in clear fulfilment of the above. The contract is a lease. A lease asset and liability must be recognised. Competence: Frankly, this is fairly basic financial reporting. If the FD does not know this then this leads to questions about the FD’s competence. Integrity: However, the FD may know this and be swayed by the loan application. The FD may understand the definition of a lease clearly but be intent on manipulating the FS anyway. This leads to questions about integrity. Objectivity: The judgement of the FD is also questionable because of a lack of objectivity. The FD is more concerned with a loan application than he is with the true and fair view of the FS. Gearing: The issue is likely to be gearing. Gearing goes up if you recognise a lease liability. It is likely the potential lenders have a maximum gearing that they will lend into and it seems that Marchant is already close to this threshold even before the lease is considered. PQ • Martin Jones lectures at the London School of Business and Finance
PQ MAGAZINE PQ magazine GOES GLOBAL
Sign up online for your free copy of
Sign upto forwww.pqmagazine.com the Emagazine and read PQ magazine Go no –matter where –online. online. Goto to button simply clickyou onare the ‘free Go mag’ www.pqmagazine.co.uk and sign up for FREE today
PQ Magazine January 2018
ACCOUNTING SHORT COURSES
- Sage Payroll
- Sage 50 Accounts1,2 &3 - Management Accounts - Value Added Tax (VAT) - Excel Spreadsheet and others
January 2018 DISCOUNT
Free Apprenticeships Available Daytime/Evening Courses/Saturday: AAT Level 2, 3 & 4 / Distance Learning Available **Payment Plan**
WORK PLACEMENTS AVAILABLE FOR ALL OUR COURSES
Saturday Classes & Work Experience Available For more information: Call: 020 7252 9331 Email: firstname.lastname@example.org Address: Carlton Cottages, @Training_Place 12 New Cross Road 07496141960 London SE14 5BE
of Excellence where quality trainings & practical work placements take place
PQ our guest editor
So you think you know PQ has a guest editor this month – Craig Coda. Here he offers some top tips on how to pass ACCA – and he should know the score, as he did it in two years! And in the article below he outlines his own study ‘journey’
ne of the first steps I would suggest to any ACCA student is to take the time to study ‘How to learn’, which is a subject that I revisited many times. We are all different, yet in my opinion we live in a ‘one-size-fits-all’ world. So working out what actually works best for you is important, especially if you are about to make a handsome investment in your future. I found that studying via textbook was OK for me for most of my papers; despite reading being my least favoured learning technique, it was literally all I could afford when considering that I would be taking eight papers a year. I did manage to successfully make this work for me though, discovering a number of notetaking techniques and online resources (listed below) to overcome my weaknesses. Toward the end of my exams I bit the bullet and opted for online/classroom courses, but again I invested time into how to make the most of each of these study platforms prior to undertaking each one. Learn how to take notes Have you ever been in the final weeks leading up to an exam, flicked through your notebook/s and been left dazzled by page upon page of useless notes? I certainly found this in my first papers, despite making the effort not to! The good news is that it does not have to be like this and that it does not take a lot of time or effort to have notes that work for you, although it may take some trial and error.
It is not that I underestimated the value of note taking, but I did underestimate how simple it was to make effective notes. By utilising several known techniques and resources I found that my notes became a go-to that I could revisit weekly/bi-weekly to test myself. Highlighters are great where you are surveying a chapter, finding a topic in the textbook that is important or something that you are struggling to understand. I would assign colours to them as follows: • Yellow – important definitions, key areas, equations. • Green – areas that did not appear to be ‘key’ ones, but that were important. • Pink – areas I couldn’t wrap my head around. I should stress here that if your page looks like an illuminous zebra you are overdoing it! It is important that you are highlighting a third of each page, maximum. Once done this will assist you greatly when you come back around to reading the chapter with the intention of writing notes and when you reach a ‘pink’ area, as you will either have benefited from reading ahead and comprehending the subject, or you will need to find another resource to gain an understanding. When taking notes I found that assigning colours to them was invaluable later on; it not only made each page of my notes more aesthetically pleasing, it made them easy to use. I assigned my colours as follows: • Blue – key concepts and introductions to subjects.
• Green – definitions and equations. • Black – more detailed information. • Red – reference to a page number, with a title for an area I am not yet familiar enough with to write a summarised note on. Just using this method made me so much more confident with my subjects, as I had a summarised version of each chapter that was easy to review and hence retain. This method can also be used when you are undertaking exam-based questions as you can highlight the sections that you have achieved low marks on. I personally kept a table in the back of my notebook with a tally of how many times I had undertaken a specific area and the percentage I had achieved, which helped me to identify subjects I was performing poorly in so I could prioritise these in the final weeks prior to an exam. Making peace with the fact that I was never going to know everything, it also helped me prioritise my questions in the exam, leaving the worst until last. Other note-taking techniques There are a number of different note-taking techniques, each being more suited to some papers than others. The ones that I would suggest are worth looking at are: • The Cornell method works wonders with concepts, definitions and equations. The idea is that your page is split into three sections. This works by dividing your paper into two columns, drawing a line vertically down the page five centimetres from the left side, drawing another
All the sacrifice is worth it in the end I have no A-Levels to my name, nor do I have a degree, but I am a recently qualified ACCA student, having completed the qualification in two years, mostly by self-study. Clearly I was a late bloomer when it came to education and I have never really considered myself academic, but I am proud to be living proof that the ACCA qualification is achievable, because if I can do it so can you. It really just comes down to three things: having the drive to see the qualification through; understanding how you learn; and – as much as I hate to remind you – making the sacrifices to allow you to focus on your studies. If you are not prize-winner material and you are not willing to make the sacrifices, I am sorry, but your chances of success are slim. It is a sad truth that very few of us can pick up a subject, sometimes four, three or even two weeks prior to an exam and then win a prize for having the top marks on that paper. I had to complete the Foundations in Accountancy prior to the ACCA papers, and I 24
took most of my papers via self-study. While being fortunate enough to have succeeded first time around more times than I had envisaged, I still had to deal with my fair share of ‘undeserved’ results despite my very best efforts. So you should realise that despite your best efforts you will likely meet an unsuccessful attempt somewhere along the line and, more likely than not, more than once. But when you do, remember this – only 30% to 50% of students pass each exam sitting, despite there being 14 exams! So, statistically, you should be unsuccessful in your exam attempts at least 14 times, taking each exam twice. So it is far from just you, it is at least half the people in that exam hall that you sat in for three-and-a-quarter
gruelling hours of your life who received that very same email or text. I really am no genius, but I truly believe that the changes in my approach to studying later in life made a huge difference to my chances of success, which I hope they do yours. PQ • Craig Coda, PQ Guest Editor PQ Magazine January 2018
our guest editor PQ
w how to learn?
before, I was limited to what I could afford. However, this did not hold me back when I was left bewildered by a topic that I could not make sense of. Platinum accredited study resources If you want to feel confident about the information you are studying you need a platinum provider’s study material. In order for a tuition provider to be recognised by ACCA as a platinum provider they must meet a range of challenging performance targets, ACCA’s best practice statements and specific pass rate targets. For each exam I would have the Kaplan study book and exam kit as a minimum. However, for a little bit extra cash you could have access to a personal tutor by telephone and video content, and for a bit more money again marked mock exams, revision videos and extra question practice. For me, the premier package made all the difference, particularly by having a third party mark my papers. I felt this made a huge difference, as it is difficult to award yourself marks without bias on a subject you don’t know you understand. ACCA ACCA has some fantastic resources available on every subject. Briefly, these are: • Examining team guidance. • Self-study guides. • Practice papers/past exam papers. • Technical articles. • And much more!
line horizontally five centimetres from the bottom. The left side is a key word/question column and the right side a notetaking/answer column. The bottom box can then be used to extend your understanding later on by writing greater detail within it. I found that by covering the right side of the page and working my way down I could test my understanding of definitions, concepts and equations regularly. • Mind maps – I am sure that many of us are aware of this concept. It may not be so useful
PQ Magazine January 2018
for learning detail, but don’t dismiss it when you need to understand how a subject pieces together. I found this really helped me separate the taxes incurred by individuals and companies in my mind by having a mind map for each and a brief summary/example of how they incurred the tax. There are many more techniques available, so please take the time to search them. Resources and how to use them When it came to study materials, as I said
Other resources Opentutition.com has a huge amount of video resources, with examples on many of the ACCA papers, broken down by subect. They are a great secondary source of information and without them I would not have got my head around consolidated accounts, at least, from a text book, anyway! • Although I did not use Acowtancy.com, I understand that they are similar to Open Tuition, but you are limited by what is free. • YouTube – I would stress that you need to be careful when trying to understand ACCA subjects through YouTube, as the videos here were not made specifically for ACCA exams. Always check the year they were made, the regulations they are intended for and that the source is reputable. Once you have understood something over this medium, make sure to revisit it in the book to make the knowledge acquired relevant! PQ • Craig Coda is a Compliance Officer with the Clark Group
PQ CIMA spotlight
You’ve been hacked!
Ken Witt explains the growing role of the management accountant when it comes to protecting against cyber attacks
he recent global WannaCry and Petya cyber attacks were a wake-up call for many organisations. The extent of Petya is not known yet, but according to reports there were around 2,000 attacks on a single day, crippling businesses and government agencies around the world. WannaCry is estimated to have affected more than 200,000 computers and, with the NHS being one of the victims in the UK, it meant that even operations had to be cancelled. Cyber threats can have severe consequences: lost business, fines, lawsuit costs and settlements, and reputational damage, among other things. There are predictions that the financial loss from WannaCry could be hundreds of millions of pounds. Who’s in control? According to a 2017 Deloitte report, only 5% of FTSE 100 boards appear to have a director with specific cybersecurity expertise – a clear cybersecurity weak spot. Management accountants and finance professionals can play a big role in helping organisations identify and mitigate cyber security risks. Chief financial officers work at the heart of an organisation, and usually have ownership of risk management, asset protection and control, and business continuity. All of this is affected by cybersecurity, so it’s only logical that finance professionals take care of this area as well. Risk management is also a core competency of management accountants, making them the ideal partner to help organisations develop their cybersecurity strategies. You cannot protect your company without knowing what the threats are. To help management accountants understand security risks, approaches and responses to cyber threats, the AICPA has introduced the CGMA cybersecurity tool. This new resource provides a practical guide to combatting cybersecurity intrusions to help ensure the success of organisations. Understanding cybersecurity To win the war you need to know who your enemy is – and what weapons they use. While you’ve got your ‘basic’ cyber criminals, cyber attacks can also be carried out by business competitors, insiders such as former employees or even other countries. Cyber criminals often use malicious software – malware – 26
to steal data and money or cause denial of service. The most common malware types are: • Ransomware used for denial-of-access attacks, which lock computer systems until a ransom is paid. • Botnets, a network of infected computers controlled by the attacker. • Malvertising, where online advertisements are used to spread malwarePhishing, usually in the form of an e-mail made to look like it comes from a trustworthy or legitimate source. By clicking on a link in the mail or by opening an attachment, the user installs malware on their computer. Another threat is application attacks via phone apps or home devices connected to the internet. What makes your systems vulnerable? Weaknesses can be traced back to technical, procedural or human flaws. Among technical problems are software defects or not using adequate security protections. Procedural vulnerabilities can be caused by system configuration mistakes or if staff ignore software security updates. Nevertheless, many problems and vulnerabilities are caused by users themselves, for example, by using weak passwords or clicking on links or attachments from unknown parties. Cybersecurity objectives Organisations should define their key cybersecurity objectives. Key objectives include: • Enabling continuous access to and use of information and systems. • Protecting information from unauthorised access and disclosure. • Guiding against data modification or destruction. • Guarding against the improper use, modification or destruction of systems. To achieve these objectives, businesses need to implement security mechanisms to protect information assets, detect malicious activity and be able to respond effectively when these attacks happen. These measures could include: • Requiring identification, such as usernames, to make sure that there is accountability. • Authenticating this identification via passwords, fingerprints, etc. • Only allowing particular types of access or transaction for users with verified level of authority.
• Protecting sensitive data such as credit card information, for example, through encryption. Responding to cyber breaches Centralisation is an important element of cybersecurity, especially for big firms with large numbers of computers, laptops and mobile devices. The ability to manage software updates or security protocols through a centralised management ensures better control. Centralised management is also an option for mobile devices as third-party mobile device management (MDM) products are now available. For laptops, whole disk encryption is vital as it prevents unauthorised access in case laptops are stolen or lost. Further security features are network configuration and firewalls; application firewalls; and antivirus and endpoint products.
• Ken Witt, Technical Manager – Management Accounting, Association of International Certified Professional Accountants
What can you do? Finance professionals have a responsibility to understand and mitigate the business risks associated with a cybersecurity attack. Our CGMA cybersecurity tool will help you guide your organisation to develop an organisationwide approach to protecting against cyber attacks, ensuring the continued success of organisations. The CGMA cybersecurity tool can be downloaded – go to www.cgma.org/ resources/tools/cgma-cybersecuritytool.html PQ PQ Magazine January 2018
EM POWERING business minds
We support students and members at all stages of their career and want to recognise their achievements throughout their journey. That’s why we developed the Business and Finance Professional (BFP) designation, the perfect way for anyone to demonstrate their professionalism and to keep growing in their career. Whether you’re only just starting out or already have experience working in a business, finance or management role, you can benefit from becoming a BFP. With access to a global network of professionals like yourself, a vast range of technical information to build on your expertise and exciting resources from
ICAEW and the Chartered Management Institute (CMI), there’s plenty of reasons to invest in your development. Becoming a BFP isn’t just about gaining essential business knowledge. It is also about the ethics, skills and experience that make a great professional and demonstrating your commitment to always aspiring to these values. Whether you have already started your journey with us or another professional body, you can find out how to make the most of your achievements at: icaew.com/becomeabfp
PQ ACCA exams
Welcome to PQ’s one-stop briefing for the new ACCA Professional Level exams, which come into play from September 2018 – courtesy of BPP’s Tony Sharples
rom September 2018, ACCA are launching new Professional Level exams, Strategic Business Leader (SBL) and Strategic Business Reporting (SBR), which are intended to increase the transparency of professional skills within the ACCA qualification and further align it to the needs of today’s employers. About Strategic Business Leader SBL is ACCA’s new four-hour case study, which combines essential components of both P1 and P3 in a single exam and so the change is significant. Students will be required to complete several tasks around a single company scenario within which additional material, in the form of exhibits, may be introduced. The new exam aims to assess the technical capabilities that potential leaders need to be able to demonstrate within organisations, but it will also be focused on professional skills and behaviours that employers have said they require in today’s workplace. Developing an ability to demonstrate the five new ACCA Professional Skills of analysis, evaluation, scepticism, commercial acumen and communication will be a new essential study component, as students will be expected to demonstrate the right blend of technical knowledge, ethics and ACCA professional skills in their answers. SBL will have no pre-seen information, which means students will need to be adept at quickly assimilating new information. All questions are compulsory and each examination will contain a total of 80 technical marks and 20 ACCA professional skills marks. It is worth noting that much of the SBL syllabus has its roots in P3 Business Analysis and P1, Governance Risk and Ethics. New to SBL is a focus on demonstrating leadership and innovation to strategically lead organisations to a more profitable and sustainable future, which builds on existing or recommended areas of competitive advantage. I would advise all SBL students to think about the following main syllabus requirements, so the challenges are fully understood at the very beginning. 1. Apply excellent leadership and ethical skills to set the ‘tone from the top’. 2. Evaluate the effectiveness of the governance and agency system of an organisation including the organisation’s social responsibilities and the reporting implications. 3. Evaluate the strategic position of the 28
Everything you need to know..
organisation to identify feasible strategic options. 4. Analyse the risk profile of the organisation and of any strategic options identified. 5. Select and apply appropriate information technologies and data analytics, to identify strategic opportunities and implement strategic options. 6. Evaluate management reporting and internal control and audit systems to assist the achievement of an organisation’s objectives. 7. Apply high level financial techniques from ACCA skills exams in the evaluation of strategic options and actions. 8. Enable success through innovative thinking and in the management of change. 9. Apply a range of ACCA Professional Skills in addressing exam requirements to support current and future work experience. It is essential that students appreciate that SBL has areas of technical knowledge which are similar to P1 and P3, the way in which this knowledge is examined will be different. Unlike P1 and P3, SBL will not test individual theories or models in isolation and it will not require these theories or models to be quoted in answers to exam questions. Instead, understanding the technical theories, models and knowledge will be essential for answer planning as these provide students will a ‘toolbox’ to help them approach the practical tasks that they will need to complete. Therefore, the use of models in the
exam will be a judgement made by students and is part of the ACCA Professional Skills for analysis and evaluation. My approach will be to focus students on learning through activities and question practice, so it becomes quite natural to determine which theory or model will add value to answer planning and widen the breadth and depth of ideas discussed in a fully written up answer. About Strategic Business Reporting SBR represents the evolution of P2, Corporate Reporting, which will have a greater emphasis on resolving ethical issues and communicating financial analysis to company directors and other stakeholders. The length of the exam remains at three hours 15 minutes; however, section A will now compromise of two question scenarios in place of P2’s single 50 mark scenario. This provides the ACCA SBR Examining Team with the opportunity to assess a wider topic range in a single sitting and to examine extracts of primary group financial statements and associated notes, rather than set a full consolidation. I am expecting this new approach will alleviate some of the time pressure which P2 students have traditionally experienced. Students will need to think about the following main syllabus requirements prior to starting their SBR studies: 1. Discuss, apply and evaluate the concepts, principles and practices that underpin the preparation and interpretation of corporate reports. 2. Examine corporate reporting from a PQ Magazine January 2018
ACCA exams PQ Each Skills Checkpoint provides a stepby-step approach to developing each Professional Skill by using an integrated case study scenario, and providing tutorial guidance on how to achieve the ACCA Professional Skills marks available in SBL, and to improve the five essential financial reporting skills I believe are required to be successful in SBR Tuition courses for SBL and SBR should integrate the development of knowledge, professional skills and exam technique.
number of stakeholder perspectives and assess and evaluate the reporting decisions made by management and their implications. 3. Use an understanding of the IASB’s Conceptual Framework as a basis for judgement in applying International Financial Reporting Standards in corporate reports. 4. Reflect on the usefulness of corporate reports to discuss the nature of the information that would help stakeholders assess the future prospects of the entity. This involves the analysis and interpretation of corporate reports and the provision of advice on the reporting implications of transactions. A new approach for new exams Learning materials have evolved and we are introducing a new Workbook format specifically for SBL and SBR which integrate the development of knowledge and professional skills in two ways. 1. All Workbook syllabus chapters include new Activities which use scenarios and requirements similar to questions seen in SBL and SBR to improve application and understanding. Each activity provides tutorial advice for students on how to improve their technical and professional skills marks. 2. Each Workbook includes a series of five new Skills Checkpoints (see table, right).
Planning for September 2018 There are two exam sittings remaining before the September 2018 Professional Level changes come into force. The key transition rules are that any student who has passed both P1 and P3 by June 2018 will not be required to sit the new 4 hour SBL paper. Students passing only one of P1 or P3 will not be rewarded with an SBL exemption. Any student who has Workbook
Skills Checkpoint 1 Skills Checkpoint 2
Skills Checkpoint 3 Skills Checkpoint 4
Scepticism Consolidation techniques Commercial acumen Performing financial analysis
Skills Checkpoint 5
Discussion of ethical issues Approach to financial reporting issues
Discussion of current developments
passed P2 will be exempt from the new SBR paper. March 2018 sitting This is the sitting where your priority should be to focus on clearing both or any remaining P1 and P3 papers if you are eligible to do so. Sitting these papers in March will allow you a resit option in June if things don’t go to plan. June 2018 sitting Any student with either P1 or P3 outstanding should sit the remaining paper in June in order not to waste their existing P1 or P3 pass. Remember if you only pass one paper this will mean that you still have to sit the new SBL paper. Students who have passed both P1 and P3 may still choose to sit P2 in this sitting. There is a lot of crossover between P2 and SBR so a student should not let the changes delay any attempt of P2. If you would prefer to wait for SBR to be introduced you could always sit an option paper and leave SBR until September 2018. Keep going The key point to bear in mind is to keep progressing with your studies. Do not be tempted to miss an exam sitting as it will be harder to pick up your studies after a break! PQ • Tony Sharples, BPP
Happy Christmas from all of us at HTFT Partnership Thank you for all your support during ϮϬϭϳ ĂŶĚŚĞƌĞ ƐƚŽĂŶĂŵĂǌŝŶŐϮϬϭဒ
email@example.com 0121 745 8842 PQ Magazine January 2018
Accounting & Tax We go together like...
Complement your accountancy qualification with a tax qualification. Exam qualified accountants are eligible to register as a CTA student. The CTA is the highest level professional tax qualification in the UK and is a mark of technical excellence and professional integrity.
Find out more about the benefits of the CTA and to register as a CTA student visit:
AAT spotlight PQ
PQ recently dropped in to Kaplan to see what all the fuss is surrounding its on demand product
AAT on demand
aplan first developed its on demand product in the CIMA market before launching into the AAT market earlier this year. The AAT on demand course follows Kaplan’s three phase approach: knowledge, application and exam preparation. Each student gets a personalised home page and a nice welcome video. Papers start with a subject overview and you get advice from a ‘real’ tutor. We like the way the subjects are put into easy to digest chunks, and there are lots of visual indicators on how you are doing. Kaplan uses case studies too, which really help put the subject into context. And don’t worry, there are lots and lots of tests and mocks. You also get a textbook and integrated workbook, too.
A big bonus is the access to a team of dedicated lecturers, who are on hand to answer questions from 8am to 9pm, including weekends. Kaplan sees that as a fundamental element of its online programme, saying: “It has got to be as easy as asking a question in the classroom.” And if the question is a bit
more complicated and can’t be answered on the spot then you can request a call back. Another big plus is the Learning Coach Team. Now these aren’t trained accountants, but they understand the qualification and structure, and resources that are available. What they do know is how to keep you motivate. They monitor students’ progress and help get them to the end game. Kaplan knows a helping hand isn’t for everyone, so students can opt in to this ‘service’. It isn’t the coach’s job to be a pest either, and they only intervene when they feel it will help. What has made this product such a success is the fact that Kaplan has used its own students to refine and evolve its offering. PQs know how they want to study and what works for them, and Kaplan is giving them what they want. Simple, really. PQ
financial reporting PQ
Still room for improvement in corporate reporting – FRC Regulator expects more detail and less ambiguity, according to report
orporate reports still need to have more detailed explanations and have better clarity, says the Financial Reporting Council. While the quality of narrative reporting has improved among the large listed companies, the FRC still found too many cases where there isn’t sufficient balance and where descriptions are too vague. In its Annual Review of Corporate Reporting, it said boiler-plate text still lingers, doing little to explain why certain assets were subject to significant risk of material change. Another gripe was a lack of explanation when there are changes to performance measures, such as when KPIs are changed but not the PQ Magazine January 2018
reasons for the changes or their impact. The FRC said beyond basic compliance with the law and accounting standards there are nine characteristics of corporate reporting which it believes make a good annual report: 1. A single story: The narrative in the front end is consistent with the back end accounting information; significant points in the financial statements are explained in the narrative reports so that there are no surprises hidden in the accounts. 2. How the money is made: The strategic report gives a clear and balanced account, which includes an explanation of the company’s business model and the salient features of the
company’s performance and position, good and bad. 3. What worries the board: The risks and uncertainties described in the strategic report are genuinely the principal risks and uncertainties that concern the Board. The descriptions are sufficiently specific that the reader can understand why they are important to the company. The report also describes the mitigating actions taken by the Board to manage the impact of its principal risks and uncertainties. The links to accounting estimates and judgements are clear. 4. Consistency: Highlighted or adjusted figures, key performance indicators (KPIs) and nonGAAP measures referred to in the strategic report are clearly reconciled to the relevant amounts in the accounts and any adjustments are clearly explained, together with the reasons why they are being made. 5. Cut the clutter: Important messages, polices and transactions are highlighted and supported with relevant context and are not obscured by immaterial detail. Cross-referencing and signposting is used effectively; repetition is avoided. 6. Clarity: The language used is precise and explains complex accounting and reporting issues clearly, jargon and boiler-plate text are avoided. 7. Summarise: Items are reported at an appropriate level of aggregation and tables of reconciliation are supported by, and consistent with, the accompanying narrative. 8. Explain change: Significant changes from the prior period, whether matters of policy or presentation, are properly explained. 9. True and fair: The spirit as well as the letter of accounting standards is followed. A true and fair view is a requirement of both UK and EU law and applies equally to accounts prepared in accordance with UK GAAP and IFRS. PQ 31
Making Tax Digital: VAT Despite delays to various staging post dates, the government’s digital agenda juggernaut is rolling on…
aking Tax Digital for VAT will come into effect from April 2019. From that date, businesses with a turnover above the VAT threshold (currently £85,000) will have to: • Keep their records digitally (for VAT purposes only). • Provide their VAT return information to HMRC through Making Tax Digital (MTD) functional compatible software. The Finance Bill 2017, published in September, included legislation allowing the introduction of MTD for VAT. Clause 62 updates the powers contained in Schedule 11, VAT Act 1994 (administration, collection and enforcement). This clause covers how records are kept and preserved, the keeping of accounts, and making of returns. But it introduces new powers to make regulations about the submission of information from VAT registered businesses. It also allows commissioners of HMRC to make regulations that require a business to keep and preserve certain records digitally. Accountants will need to use commercial software that can connect to HMRC systems via an Application Programming Interface (API). The functions of the compatible software must include: • Keeping records in a digital form as required by the regulations. • Preserving digital records in a digital form as required by the regulations. • Creating a VAT return from the digital
tax briefs EXPENSES CLAIMS The ATT has welcomed the Budget announcement that HMRC plans to work with ‘interested parties’ to improve guidance on employee expenses, and the process for claiming tax relief on non-reimbursed employment expenses. The ATT has been campaigning to make it easier for employees to claim relief due to them on unreimbursed expenses. ATT’s Yvette Nunn said she wants to see the introduction of ‘clear and appropriate’ official guidance, but more importantly an easy to use claim process. records held in functional compatible software and providing HMRC with this information digitally. • Providing HMRC with VAT data on a voluntary basis. • Receiving information from HMRC via the API platform in relation to a relevant entity’s compliance with obligations under the regulations. Businesses will need to preserve digital records in functional compatible software for up to six years. The government has promised to publish and consult on draft VAT regulations by no later than April 2018, giving businesses and software developers at least 12 months to prepare before the requirements fully come into force. PQ
ROAD TAX EVASION DOUBLES Almost 106,000 vehicles were either immobilised or impounded for nonpayment of road tax last year. The DVLA has now launched a campaign warning that untaxed cars will be towed away. From 2014, it was no longer possible to transfer car tax to new owners, even if the vehicle had many months of tax pre-paid. The DVLA believes the withdrawal of the paper tax disc also means many believe they can simply avoid paying. However, the latest figures show 105,878 vehicles were clamped last year, that’s up on the 85,355 in 2015. Revenue collected from vehicle excise duty has fallen by £147m over the past two years to just under £5.9bn.
How to get your small business off the ground Darren Nicholls explains the ins and outs of the (very important) self-assessment tax return I am a new small business owner who has never previously had to complete a selfassessment form. What do I need to do? The deadline for submitting your online return for the 2016-17 tax year is 31 January 2018. Failure to comply will lead to an automatic £100 penalty which, after three months, rises by £10 a day, with further potential penalties to follow. Hopefully, you’ll have already taken the simple step of registering for self-assessment, which was required by October 5. If so, or if you have previously registered at any point in the past you will have a Unique Tax Reference (UTR) number from HMRC, with 32
which you can complete your return. You’ll also need information from several sources to hand – a P60, P11D, P45, P2, national insurance number, employer’s reference, trading income, taxable benefits, income, investments, interest, foreign income and capital gains from the sales of assets may all be required. You will also need to consider any tax reliefs you have used – so have ready records of
monies you have paid into pension or investment schemes, or gift aid donations to charity. The tax you will end up paying will depend on your profits, and will be made in two estimated instalments – by 31 July 2018 and a balancing payment on 31 January 2019. These will be based on your return, and set at half of your liability. Bear in mind that HMRC don’t send out payment reminders, so you need to make sure these dates are in your diary. Remember, you need to complete a return even if there is no tax due. According to HMRC, 840,000 people – around 7% of those required to file tax returns – failed to do so in 2017, netting the government an immediate £84 million in fines. PQ • Darren Nicholls is Product Manager for Informi, powered by AAT. Visit informi.co.uk/PQ to find more practical advice and support for new businesses PQ Magazine January 2018
social media ROUND-UP Early in the month we tweeted: “Some 50% of accountants are unhappy with their current role. Nearly three quarters of those surveyed also said they have had a job that made them miserable at some point in their career.” Matt Bishop wondered: “Does the accounting profession have to include unhappiness and misery? Or does accountancy just attract the unhappy and miserable”, he wondered. Ian McCargo asked: “Ready for your future, accountants?” Roman Zolanski had another viewpoint: “I think God is testing me now so that I can bear this job.” People also liked our tweet: “VAT QUIRK: A ginger bread man with chocolate eyes is zero-rated, but if it has chocolate trousers it would be standard rated.” Caron Betts jokingly said: “Let’s hope that doesn’t come up in the #ACCAF6 exam!” Meanwhile, Rachel Dines felt you “just got to love the chocolate/biscuits VAT quirks!!!” Finally Ginny B stressed: “And that’s why we love VAT! x” On LinkedIn it was great to see Dianne Ramdeen helping out her students with an old article from PQ magazine. She said: “Exam fever is in the air! Following several emails from both ACCA and CFA students seeking last minute study advice, I decided to revive the article that I wrote a few years ago which was published by PQ magazine. ‘Do not simply learn questions, rather, learn how to answer questions’ – the most important take away.” Finally, how do you spend your Saturday mornings? Nicola Donnely knows how: “Nice bit of morning reading and CPD top up. Who’s studying today? @Your AAT @PQMagazine.”
Life at MEND Accounting Nicola Donnelly, 36, is an Accountant/Director based in Croxteth. She has been in her role for two years. Nicola is also studying for an Accountancy degree. Her claim to fame is taking part in #AATStories, and she was a runner-up at the AAT Awards What time does your alarm go off on a working day? 6am. What’s the first thing you do when you get to your desk? Organise my diary and list – I love lists! What’s on your desk? Laptop, study books, post, stationery, and whatever I’m working on. What’s the best thing about where you work? I’m at home, with my lovely dogs. Where’s your favourite place to go for lunch? Costa. I can work, network and meet clients for lunch, too. What (or who) can you see when you sit at your desk? Do my dogs count? No one, unless I work from Costa, then I see lots of people coming and going. Which websites are your favorites and why? Facebook, Twitter and Zara. I use Facebook and Twitter for my business. Which websites do you use
What’s your favourite tipple? Rosé, although I don’t drink often. What is your favourite TV show? Game of Thrones. Summer or winter? Summer – I hate the cold. Pub or club? Neither, if I had to choose it would be pub, but only for lunch. Who is your hero? The doctors, nurses, police, ambulance and armed forces who work ridiculous hours to look after us. They are all heroes. If you had a time machine, where would you go? The future – I’d love to see if we could cure cancer, hunger and find world peace. If you hadn’t chosen accountancy, where might you be right now? I had worked as a hairdresser, and in call centres, so I’d probably still be doing that. So glad I’m not.
vulnerable to AI taking their jobs over the next 15 years.
bosses regard them. Or as a third of respondents said: “Nothing happened, as they didn’t want to know about it.”
In brief Civil Serbots Robots will be running huge swathes of government as artificial intelligence is deployed to ensure the state does more with less, said Chancellor Philip Hammond (pictured). He told a House of Lords committee that the government was expecting a quick take-up of AI across departments. What he didn’t venture is what affect this would have on jobs. The think-tank Reform estimates that 250,000 of the UK’s five million public sector workers were
Suffering in silence One in six FDs/CFOs admit that they have been signed off work because of work-related stress, according to the latest study by CareersinAudit.com. Despite the fact that more than a third of accountancy professionals ‘experience’ stress on a weekly basis, most admit they suffer in silence. This is because many are worried that if they raise the issue it will have a detrimental impact on how their co-workers and
Vacancies up by 15% A new jobs index shows the volume of vacancies for accounting professionals has risen by 15% across the UK in the third quarter of 2017, compared with the same period last year. Despite ongoing Brexit uncertainty employers have continued to recruit, and many businesses are actively increasing headcount. In particular demand are regulatory specialists.
The PQ Book Club: books you should read The Ladybird Book of the Meeting; How it works: the Student, by JA Hazeley and JP Morris (Penguin, £6.99) Here at PQ Towers we expect most readers are too young to remember the original Ladybird books for kids. Well, the authors have revisited these books, using the original artwork while adding a twist for grown-ups. The results are
PQ Magazine January 2018
for work? HMRC, Companies House, NEST, Tax filer, Sage, Xero, Quickfile, Quickbooks – I use these for filing, software for client’s work, and pension submissions. PQ, AAT Online, AAT Comment, AccountingWeb, CIMA Global, ACCA, CCH (Wolters Kluwer) are sites I use for CPD, to keep up-to-date with tax and legislation. How many hours a week do you spend in meetings? Two. I try to meet clients every quarter, so my meeting time has dramatically reduced from when I worked full time. What time do you leave the office? I try to finish at 5pm, although I can work later. The most liberating thing about working for myself is I can pick and choose my own hours. How do you relax? Movie night with my children.
consistently funny parodies of modern life. For example, in The Meeting a picture of five white, middle-aged men sitting around a table sits alongside the text: “These important people are discussing workplace diversity”. Each page contains a comic nugget or two; we liked “Mr Beverley is reading out a 60page document entitled ‘The Paperless Office’ and “At a meeting, everyone has a chance
to have their say. Most of the people at this meeting have nothing to say, but they say something anyway”. These books are great fun. Every office should have a copy, to be passed around when things get that bit too stressful. PQ rating 5/5 A joy! There’s loads of fab titles in this series if you’re stuck for gift ideas. 33
PQ got a story, funny or serious, you want to share? Email firstname.lastname@example.org
CHRISTMAS CRACKER JOKES
How does Father Christmas reduce his tax bill? He claims Ho-Ho-Holdover relief What is Father Christmas’s biggest accounts overhead? Private Elf insurance What gaming console do auditors want for Christmas? A SARBox One S How does Santa’s accountant value his sleigh? Net Present Value What is the tax status of Santa’s helpers? Elf-employed Why does Father Christmas love visiting the UK? Because he can claim gift relief
PRIVATE EYE CARTOON
We couldn’t resist sharing this Private Eye cartoon with you…
AM I STILL
The CCAB recently put on an impressive event, the ‘Perspectives on Fighting Economic Crime and Anti-Money Laundering’. All the top accountancy bodies are members on the group, with the exception of CIMA, who left a number of years ago. Among the speakers on the day was Duncan Hames, director of policy at Transparency International (pictured above). He was a little embarrassed to admit he was a CIMA member, because with all the recent changes he wasn’t sure what acronym he should be using!
THE NISSAN CIMA
If your accountancy body was a car, what sort of car would it be? Well, CIMA need not worry – Nissan has made a CIMA car! The Nissan Cima is a luxury sedan, and a quick look on Wikipedia explains that the car’s name is derived from the Spanish for ‘summit’. The marque is an image of an acanthus leaf. Many of you will know that this leaf was commonly used by classical Greeks to make a wreath for use as a crown.
FAMOUS PEOPLE WHO FLIRTED
WITH ACCOUNTANCY SMARTPHONE USE FALLS AMONG YOUNG
Over the past year the average 16-24 year old spent 3.8 hours a day on their smartphones and tablets. That’s a fall from 3.9 hours the year before! The decline might be small, but a third of this age group said they used their phones too much and wanted to cut down (if time spent on computers is included in the total then 16-24 year olds spent 6.7 hours a day staring at a screen). Every age group, apart from this one, increased their smartphone usage in a new study. And the biggest increase? It was among pensioners, who increased the amount spent on mobiles from 36 to 54 minutes a day.
’ WEV E
CPA Canada recently spotlighted a whole group of people who have had a close brush with accountancy. A few will surprise you – did you know Peter Falk (yes, Columbo!) was a qualified certified public accountant and worked as an efficiency expert for the Budget Bureau of Connecticut before hitting the small screen? Other stars ‘outed’ were tough-guy actor Lee Van Cleef, who worked as an accountant, and saxophone superstar Kenny G, who has a degree in accounting from the University of Washington.
THIS IS YOUR GRECIAN DIVORCE
Divorce rates in Greece have surge by 20% in recent years and accountants there are putting it down to a rise in ‘dummy’ or ‘tax’ divorces. Accountant Dimitris Bokaris said increasing numbers of Greek couples are filing for ‘fake’ divorces to evade the taxman and bank foreclosures. Under Greek law divorces, or mere separation requests, can allow couples to reclaim those benefits while paying up to 50% less in taxes.
GOT THE L OT
It’s simple – just Revise! Bletchley Park puzzles Osborne Books has launched ACCA Revise Notes for papers F1 to F9. These colourful texts typically run to 100-150 pages, so should be manageable for all students. They are also ideal for any PQ who wants to refresh their knowledge, or have not covered certain areas due to exemptions. We have five to giveaway this month. To enter this great giveaway send your name and address to email@example.com. Head up your email ‘Osborne Revise!’
We have three sets of the Bletchley Park series of puzzle books to give away this month. This is your chance to follow in the footsteps of the codebreakers and see if you have their skills! Our four books include ‘IQpuzzels’, ‘Cryptic Crosswords’, ‘Codebreaking Puzzles’ and ‘Number & Mathematical Puzzles’. To be in with a chance of winning this giveway send your email headed up ‘Bletchley Park’ to firstname.lastname@example.org. And don’t forget to tell us where you live!
Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 9 February. The main draw will take place on Monday 12 February 2018.
TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM 34
PQ Magazine January 2018
Are you exam ready?
You need PQ-GO! Take our series of free online tests â€“ and get that exam pass
Sorted, thanks to pqjobs.co.uk
PQ jobs pqjobs.co.uk
TAKE PRIDE IN YOUR
PQ magazine is a free monthly magazine for student accountants, focusing mainly on the ACCA, CIMA, CIPFA, ICAEW and AAT qualifications. It's...
Published on Dec 12, 2017
PQ magazine is a free monthly magazine for student accountants, focusing mainly on the ACCA, CIMA, CIPFA, ICAEW and AAT qualifications. It's...