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PQ magazine June 2018 /




We run the rule over the latest CIMA and ACCA pass rates – so what was good and what was bad?


Who reads the financial reports – and why

Contact us email: graham@pqaccountant twitter: @pqmagazine call 020 7216 6444

CIPFA CASE P22 How you can best prepare yourself for the challenge that is the strategic case study






Rolls-Royce finance manager Our experts look into their has some top crystal balls and predict what advice for PQs will be in the June exams P16 with ambition


How to prepare for a very different exam P13


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News 06CIMA results The good and the bad in the latest exams 08Career concern Is your path to success being obscured? 10ACCA exams A tough F5, plus all the other results from March Features, etc 04Mind your Ps&Qs Young finance professionals need to get savvy about social media; and brutal truths facing the FRC 12PQ conference Sign up now for the PQ/LSBF one-day career conference – check out the details of how to book your place 13CIMA strategic case Why it pays to take a tactical approach

14Career advice Top tips on how to get ahead from someone who’s been there and done it

15ACCA PER Getting the right practical experience it vital to becoming a full member

26CIPFA case study Be

prepared – this is a tough one! 27ICAEW update What you need know as the Advanced level exams become computer-based 28ACCA Professional Two of our experts explain changes to some of the core exams 29Careers Life at Deutsche Bank; and the best of social media 30Fun stuff – and our giveaways The columnists Robert Bruce It’s time we stopped the lawyers from getting their way 6 Prem Sikka FRC’s recent woes hint at deeper problems 8 Zoe Robinson Stephen Hawking – a role model for us all 10 Subscribe to PQ magazine It’s FREE – go to page 22 or see ABC July 2016 – June 2017


16ACCA top tips The subjects

our experts think will come up in the imminent June exams

20Objective tests How to tackle this different kind of challenge

22CIMA spotlight Coping with the stress of taking exams

23Financial reports Who

actually uses them and what information are they after?

24ACCA P4 paper Passing this is all about the right technique

Be global – it’s your career!

June 2018

Publisher’s statement: We send a digital issue of the magazine to an additional 7,125 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)

How’s the accountancy career going? All you expected it to be? If you want to know how to future-proof your career, then there is only one place to be – our free one-day London ‘Being Global’ conference. The date to put in your diary is 11 June, and we have now added some more great names including Andrew Williamson from the AAT and Adam Birt from the ICAEW. Maggie McGhee will also be on hand to put a real-world spin on the extensive research the ACCA has undertaken in the past couple of years on ‘Generation Next’. Along with digitalisation, we know that globalisation is going to continue to be one of the industry’s big influencers in both the short and medium-term. For the full list of speakers see page 12. And remember, booking a place couldn’t be easier. Just go to and sign up. Pass rate heaven This issue is a bit of a pass rate special. We have the ACCA and ICAEW March exam results on our news pages, and we also have the latest CIMA case study pass rates and all the OT rates. PQ has always championed the need for transparency when it comes to pass rates, and the magazine is unique in putting these all on show together. ACCA’s new Strategic Professional exams June will be the last sitting of ACCA’s P1 and P3 exams. From September the exams will be replaced by an new case study – Strategic Business Leader (see page 28 for more on this). A top tutor suggested to us last month that it would be a really nice gesture from the ACCA if it published the March exam papers in full. It usually publishes question samples from the September/December and March/June exams. But there will be no June test, so there’s no point in continuing this for P1 and P3! Unfortunately, our request fell on deaf ears. Graham Hambly, PQ magazine editor (

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PQ have your say

email Social media worries I enjoyed your article ‘You are being stalked!’ (PQ magazine, May ’18). It was a timely reminder of how far social media has crept into all our lives. I was a bit surprised that, according to your story, only one-third of recruiters regularly use social media when researching potential candidates. I would have thought they all did! I’m much more shocked, however, at the naivety of many of the respondents to the CV-Library survey. Three-quarters of these accountancy professionals “expect to be ‘Googled’” by recruiters – which means that one in four

don’t. Incredible. Surely this generation of young finance professionals – which includes me – should be really

savvy when it comes to technology in general, and social media in particular. These people should understand that almost everything they do on social media could, one day, come back to ‘haunt’ them. At least set your ‘privacy’ settings so you are protecting your data, etc, as far as you possibly can. And most ridiculous of all? The fact that (some) young accountants think it’s acceptable to send in a selfie when they are putting themselves forward for a new job. The mind boggles! Wise up, people. Thanks to

social media we are all public property, our indiscretions available to whoever can be bothered to Google us. Name and address supplied The editor says: Lots of people get a lot of pleasure out of social media, but you are right, there are inherent dangers. Your point about privacy settings is a good one, we must all protect ourselves as much as we can. Enjoy it, but be aware of the perils, too. Whether we like it or not, social media is here to stay – most businesses today use social media as a marketing tool so it pays to be ‘tech savvy’, as you say in your letter. By the way, our social media round-up is on page 29!

Our star letter writer wins a fantastic PQ memory stick! Thanks and farewell Could I please cancel my PQ magazine? After what seems like a million years I have finally become ACCA qualified. I registered for ACCA many years ago and went full steam to pass my exams as soon as I finished my AAT studies. I changed jobs a few times and unfortunately my employers would not support me in my studies (I couldn’t afford it myself back then). Fortunately, two ACCA exam changes meant that I did not lose the six exams I’d already passed. My mum constantly asked me when I was going to restart my studies as I was so close. I restarted my studies in 2014 and kept it a secret from mum as I wanted to surprise her. Unfortunately, she passed away in October 2014, which then meant another delay to my studies as I had to deal with her probate. My greatest regret is that she never saw me complete my studies. After completing the final 3 P papers I become fully qualified in April 2017. ACCA took five months to issue me with my certificate, but I can now look at it with pride but tinged with a bit of sadness. Thank you again for your wonderful magazine and I want to wish you and all accounting

I need

students the best of luck for now and the future. Paula Kell, by email

FRC home truths I read the lead story in last month’s PQ, headlined ‘Carillion fallout: FRC under threat’, with interest. It

mentions LAPFF’s claims that the regulator is just too cosy with the Big 4 firms and the CBI. However, you fail to mention that FRC’s Chair Sir Winfried Bischoff wrote to LAPFF (the Local Government Pension Fund Forum) after its corporate governance code

consultation submission. On the matter of being in collaboration with the CBI, the FRC says: “This is an incorrect statement and illustrates the dangers of drawing arguments from historic documents.” When the FRC was established in 1990 the CCAB and CBI presidents held representative positions on the Board and Council. Moreover, the FRC’s governance changes in 2007 brought an end to any representative seats on the Board and abolished the Council. Sir Winfried also refuted the claims of ‘internal cultural problems’. No organisation is perfect and I think the FRC is often found between a rock and a hard place. How can it fulfil its role without top accountants? By the very nature of the market many of the best will have worked for the Big 6. To exclude these means you lose a vital talent pool. Or do you suppose many accountants cannot act honourably after coming into contact with these firms? The days of the ‘Andersen Androids’ is long gone, surely! Adam Perkins, by email

PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: Website: | Editor/publisher: Graham Hambly | Advertising manager: Polly Thrasivoulou Associate editor: Adam Riches | Art editor: Tim Parker | Subscriptions: | Contributors: Robert Bruce, Prem Sikka, 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

Published by PQ Publishing © PQ Publishing 2018



All ACA exams will eventually move from paper to computer-based, so getting to know the new exam format in advance of your exam is crucial to success. &RPSOHWHWKHÆ“YHVWHSVEHORZWRHQVXUH\RXDUHIXOO\ prepared and have everything you need for the day of your exam. 1 Read the exam guidance 2 Watch the exam webinars 3 Use the practice exam software 4 Review the sample exams 5 Read the Instructions to Candidates

Here is a summary of the exams moving to computer in 2018. PROFESSIONAL LEVEL March Business Planning: Taxation Business Strategy and Technology June

Business Planning: Banking Business Planning: Insurance


Corporate Reporting Strategic Business Management

Guidance, support and resources are available to you at

PQ news

ROBERT BRUCE Time to ignore what the lawyers demand You can blame it all on US lawyers. It is, after all, because of them that the world doesn’t have a universal global system of financial reporting standards, a properly harmonized system. It is just that the US doesn’t subscribe to systems not invented at home. But that is not what we need to focus on today. We need to go back to a point almost a 100 years ago. Mervyn King, Chairman of the International Integrated Reporting Council, told the story in his recent annual IIRC address. The Ford Motor Company, the great pioneer of both mass-production as a concept and cars as the product, decided that to keep its great assembly lines running for longer hours they would increase the pay of their workers. They were making huge profits, equivalent to $6bn today. So they decided to use this surplus to increase wages. But they reckoned without the Dodge brothers, who would later go on to become competitors, but at this point were 20% shareholders in Ford. The Dodge brothers argued that the super profits were owed to shareholders first and, if at all, workers second. So in 1919 the two sides went to court. Dodge won. The legal primacy of the maximization of shareholder wealth was cemented in the minds of US lawyers and the business world for generations to come. And that is why the current revolution that instead recognises the primacy of the creation of long-term wealth for all stakeholders is so important. Overthrow lawyer-think.

CIMA results in the bag PQ magazine

and F2 saw a jump in their total exams passed to 52%. The firsttime pass rate of P1 is also much lower than P2 and F2, at 50%. There are also some great pass rates, too! E2 has a first-time CIMA has released the latest batch success rate of 88% and E3 is of OT and case study pass rates, 70%. Even P3’s rate, at 62%, is up and while ‘consistency’ has become on the 2017 figures. the byword for the current figures The case study good news is the there does appear to be a bit of a February 74% pass rate for the reoccurring ‘problem’ with P1. Management case study. The The new stats show P1’s total Operational case study success rate exams passed percentage remains also crept over 50% – to 51%. at 45%. At the same time, both P2 CIMA’s exam chief, Steve Flatman, told PQ CIMA CASE STUDY FEBRUARY 2018 EXAM PASS RATES that there has Feb 18 Nov 17 Aug 17 May 17 been a recent Operational 51% 49% 53% 47% audit of the Management 74% 56% 68% 73% whole case study Strategic 63% 66% 62% 66% exam and it was


FRC ups the ante The Financial Reporting Council has announced big plans to enhance its monitoring of the six largest audit firms. It could mean senior audit appointments by the firms could be vetted by the industry watchdog for the first time. The FRC said it needed to change the rules to avoid systematic deficiencies within firms’ networks, disruption in the provision of statutory audit services, and instability in the financial sector.

FRC’s Melaine McLaren said: “We will discuss with firms how well candidates for key leadership and governance roles such as independent non-executives, heads of audit and ethics partners meet our expectations in terms of experience, skills and attributes.” Meanwhile, McLaren and another senior executive, Paul George, are both understood to have recently stood down from the FRC’s main board in the wake of criticism over

Brotherly love You need your taxes done and your brother is an accountant. It only seems logical you would ask him to do it as a favour. Well, a great story popped up on, where the brother’s accountancy bill went viral. The brother in question got the preparation of accounts for free, but

Robert Bruce is an award-winning writer on accountancy for The Times

CIMA OT PASS RATES First time E1 79% P1 50% F1 73% E2 88% P2 56% F2 56% E3 70% P3 62% F3 60%

Total 75% 45% 69% 86% 52% 52% 71% 54% 55%

Overall 88% 69% 84% 95% 79% 80% 84% 79% 80%

given a clean bill of health. He stressed this does not mean CIMA isn’t always looking for improvements. Flatman said CIMA was also aware of the importance of publishing pass rates: “People spend over five minutes having a good old look at the data.” Melaine McLaren

Big 4 dominance. The FRC has also gone on record as saying it welcomes the independent review of its role and powers (see last month’s PQ magazine for our story on the possible demise of the FRC). there were some interesting addons! Among the list of charges – which added up to $2,893.42 – were an ‘obnoxious fee’ of $210; ‘interest on a $10 loaned in high school to go to the carnival’ $678.42; an ‘extremely grumpy fee’ of $300; and ‘brother fee’ of $225. Oh, and we forgot to mention the ‘high maintenance fee’ of $500…

In brief Fine for fly-tipping firm London accountancy firm Ommegas Services Limited has been fined a record amount for repeatedly fly-tipping bags of rubbish. Magistrates fined the firm more than £35,000 for dumping waste that included shredded paper and correspondence, making it the largest ever handed out by Brent Council. The court heard that Ommegas had ignored warnings from Brent’s enviro-crime team, including a £400 fixed penalty notice. 6

ACCA/Trinity sign MoU ACCA has signed a new Memorandum of Understanding (MOU) with Trinity College Dublin. This will see the creation of a new MBA entry pathway, coupled with an MBA fee bursary for ACCA members. Trinity will also be supplying a range of CPD-approved courses focused on the expanding knowledge of emerging technologies such as big data. ‘Shameful’ interest rates A single mum with twin girls

(who both went to university) is taking on the government over the interest rate for student loans. Fiona Kirton has begun legal action over the sky-high rates, as she believes it breaches the small print of the legislation. She says the Teaching and Higher Education Act of 1998 states that interest rates on the loans must be “lower or no higher than those prevailing on the market”. An explanatory memorandum uses a benchmark for this of a Bank of England published rate for a £10,000

unsecured personal loan. This currently stands at 3.81%, way lower than the 6.1% for student loans (it goes up to 6.3% in September). Facebook Live for ACCAs LSBF is again running its award-winning Facebook Live sessions for the June ACCA exams. First up will be F8, P1 and P7 on 1 June. Watch out for timings – there are 5pm, 6pm and 7pm start times. These mentoring sessions are a big hit with thousands of students. PQ Magazine June 2018

Study for your final exam before the ACCA Professional Level changes If you’ve only passed one of the P1 or P3 papers, you’ll need to pass the other before September 2018, otherwise you could be at risk of ‘losing’ a paper. Give yourself the best chance of passing your remaining P1 or P3 paper by booking one of BPP’s Revision and Exam Practice courses. With a range of courses available towards the June exam sitting, you can find a suitable programme that works around you. Alternatively, if you want to sit the new Strategic Professional Level exams in September, we have courses which are also available to book now. Get in touch for more information about any of our ACCA courses.

For more information  03331 224 093 

PQ news

PREM SIKKA FRC woes symptomatic of deeper problems The government has announced its review of the Financial Reporting Council (FRC). The temptation will be to make minimalist gestures. That would be a wasted opportunity because the FRC’s shortcomings are symptomatic of deeper problems in the UK regulatory architecture. The UK is scarred by a ‘chummy’ regulatory system. The papers are full of stories about money laundering, tax avoidance and banks making vast profits by rigging interest and foreign exchange rates. The perpetrators face little retribution. The regulatory bodies are colonised by the very industries they are supposed to be regulating and are inevitably too sympathetic to the elites. The FRC is one of 29 financial sector regulators dealing with matters such as money laundering. Do these regulators even talk to each other? It is hard to think of any action taken by the FRC or accountancy bodies against firms involved in money laundering. The FRC’s Corporate Governance Code has a voluntarist approach to governance. That does not give enforceable rights to stakeholders and enable them to shackle miscreants. Indeed, the whole purpose of the Code has been to prevent statutory developments that could enhance people’s rights. The UK lacks a central enforcer of company law and in this vacuum corporate governance abuses, such as those at banks, BHS and Carillion, continue to make headlines. Tweaking the FRC alone can’t deal with the failures. A bigger cultural and institutional change is needed but is not on the government’s agenda. Prem Sikka is Emer itus Professor of Accounting at the University of Essex

Career paths are not clear Too many young finance professionals in the pubic sector are being left in the dark about their potential career paths, says a new report from the ACCA. Worryingly, just one in four (26%) of these young professionals believe that a clear career structure exists in their current organisations. ACCA’s ‘Generation Next: managing talent in the public sector’ showed that 92% of respondents were attracted to public sector employers because

Metcalfe, said: “Public sector organisations are typically unable to compete on remuneration for top talent, but must instead communicate a holistic offering to candidates that includes clear career paths and a positive work environment.” He went on to say that attracting, developing and retaining staff in the public sector must now be the top priority.

Future-proof your career

International ACA prizegiving ceremony: The ICAEW recently celebrated all its 2017 exam prize winners. The PQs and NQs were welcomed by President Nick Parker and keynote speaker George Acquah. Read what advice Acquah, the finance manager at Rolls-Royce plc, had for the guests on page 14.

Student scores go higher ACA professional exams students scored highly in all March ACA exams, according to the ICAEW. The Business Strategy and Technology paper had the highest pass rate at 88.2%, closely followed by Financial Accounting and Reporting at 86.3% and Financial

Management on 80.4%. The paper with the worst pass rate was the Business Planning: Taxation, which had a success rate of 68.3%. Over 2,678 students sat the March exams, with most opting to sit just one paper. Just over 1,000, some 72.3%, passed the ICAEW PROFESSIONAL LEVEL RESULTS MARCH 2018 All First time paper they sat. Audit & Assurance 78.8% 82.3% However, Financial Acc & Reporting (IFRS) 86.3% 88.3% 76.5% of those Financial Acc & Reporting (UK GAAP) 81.0% 80.6% sitting two Tax Compliance 76.8% 81.7% papers passed Business Planning: Taxation 68.3% 70.3% both. Another Business Strategy & Technology 88.2% 91.7% 15.9% past Financial Management 80.4% 86.6% one of the two.

Corruption rising The scale of bribery and corruption has shown no improvement globally since 2012, despite the unprecedented level of enforcement activity and introduction of new corporate criminal liability laws in that time. This is, according to the 15th EY Global Fraud Survey, which claimed the $11bn dished out in financial penalties was having no effect on behaviour. In the UK, some 34% of respondents said that they believed bribery and corruption happens widely in business, an increase of 20% from the 2012 survey. This level is also higher than the average of 21% in Western Europe. 8

they thought it provided the opportunity for them to learn and develop skills. Once there, many are finding the reality doesn’t live up to the promise. The longterm concern is that the public sector will lose out as the talent goes elsewhere. ACCA’s head of public sector policy, Alex

KPMG’s plastic pledge KPMG has said it will stop using plastic water cups across its 22 offices in the UK by the end of this summer. Its staff use three million cups every year. A successful pilot in the Manchester office saw the plastic water cups phased out during March, and the firm’s 1,100 employees given free metal water bottles. KPMG’s environment manager, Sara Lindsay, revealed the firm spends £60,000 on plastic cups every year. “Even with supplying each of our 15,000 employees with a free metal water bottle, the scheme is projected to pay for itself within 18 months,” she stressed. Plastic cups from its hot drink vending machines will also be phased out by August 2018, saving another three million cups. These will be replaced by

PQ magazine is joining forces with LSBF to offer readers a fantastic opportunity to find out what a career in accountancy might look like in the future. We have CIMA’s Noel Tagoe, ACCA’s Maggie McGhee and ICAEW’s Andrew Birt opening our one-day conference. Even CIMA CEO Andrew Harding wanted to get involved, and he will be part of a panel discussion on road-mapping your career. He will be joined by among others Andrew Williamson of the AAT. There will be a real ‘global’ feel to the day, hence the title: ‘Being Global: Future-proof your career in accountancy’. It’s a free conference, and we expect it to be oversubscribed, so get on Eventbrite and sign up asap. Go to and put 11 June in your diary planner now!

Check out our top ACCA exam tips – they are on pages 16-18. And see our website for even more tips for the June exams

either paper or compostable cups. Lindsay said KPMG has removed the use of plastic straws and will phase out plastic cutlery this year. Premier League revenue rises The Premier League clubs’ combined revenue increased by nearly £1bn to a new record of £4.5bn in the 2016/17 season, says the latest report from Deloitte’s sport business group. It discovered the collective pre-tax profit for all 20 clubs was £0.5bn, almost three times the previous record of £0.2bn in 2013/14. All clubs made an operating profit and 18 out of 20 recorded a pre-tax profit. Wages costs across the league rose by 9% to £2.5bn, but Deloitte said this was a significantly slower growth than the 25% increase in overall PQ Magazine June 2018

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PQ news

ZOE ROBINSON From curiosity to black holes

The death of Stephen Hawking in March was clearly a sad event and yet his passing was met by many with reflections on his achievements rather than lamenting his loss. Was this because he was a public figure who had clearly been ill for some time? Or maybe it was his brilliant academic achievements, including the discovery of Hawking radiation, that somehow made his death a relatively small event in the grand scheme of the universe and everything? But Hawking had two other great qualities: a cheerful dispossession and wicked sense of humour, and an intense curiosity. He once said: “I am just a child who has never grown up. I still keep asking these ‘how’ and ‘why’ questions. Occasionally, I find an answer”. And here is the good news: curiosity can make learning enjoyable and studying more effective. If you take an active interest and genuinely want to find out more, your brain will reward you in a number of ways. First, you will become highly motivated, feeling that you want to study rather than have to. Second, your ability to retain information increases. Third, you feel happier and more satisfied as the brain, fired up by anticipation and novelty, releases dopamine, the happy hormone. Maybe that’s why people celebrated Hawking’s life; after all, he spent most of it in a constant state of curiosity, asking questions and sometimes even finding the answers. Zoe Robinson is Learning and Programmes Director at Kaplan Financial

F5 just got tougher for ACCA students The ACCA March exam results are in and for many PQs they make scary reading. When PQ magazine put out its post-March feedback we said it was a hard F5, tough F7 and a lovely F8! Well, F5 had a 39% pass rate and so did F8, so where does that leave us? F7, on the other hand, had a pass rate of 48%. The next question is why anyone would sit P5 and P7! As one P5 March sitter said: “The likelihood is most of us will have failed.” At

29%, the paper had the lowest pass rate this Spring, and P5 had the lowest pass rate in December, too, when it was… 29% again! Students need to start putting pressure on tutors to explain why they can’t help them pass. ACCA also needs to put even more resources into the optional papers. How can two-thirds of sitters fail when they are so close to becoming affiliates? Students told us: “It’s an awful paper”, and “I guess I better switch to P4 then, 5 attempts at P5

The robots have arrived HMRC says it has now processed over 10m transactions using robots since 2015. And it is claiming AI is improving efficiency and the customer experience. So where might you meet these robots? HMRC uses automation to process requests for tax rebates for customers. The request is received online and the form is processed (mainly on the day they are received) and a letter is automatically sent by post. The job

Getting on the case

A media streaming company, a luxury leather goods brand and a transportation group are the subjects of May’s CIMA case studies. It’s Couchweb that is the focus for the Strategic case study. One student wondered why CIMA hadn’t gone all the way and just called it

couchpotato! The subscription model has a lot of similarities to Netflix, but as BPP’s Dave Halford reminds sitters: “Don’t waste your time on external research, which will be of little or no value.” • See more from Halford on the strategic case on page 13 of this issue.

and stuck at 40%... jeez.” The P7 pass rate wasn’t much better at 30%. It is hardly surprising that Tingz said: “OK – this is why I’m as scared as hell.” And Perfect Spice revealed: “Scared of sitting it [P5] in June.” The ACCA pointed out that over 100,000 PQs sat the March sitting (100,487 to be precise). In all, some 127,267 exams were taken and 3,430 students became ‘exam passed’ – affiliates, in other words. That’s an average of 1.27 papers per PQ. ACCA MARCH 2018 PASS RATES F1 78%; F2 67%; F3 71%; F4 81%; F5 39%; F6 46%; F7 48%; F8 39%; F9 46%; P1 51%; P2 49%; P3 52%; P4 41%; P5 29%, P6 37%; P7 30% of change of circumstances is also one for the robots. Meanwhile, the Serious Fraud Office (SFO) has said it will use robots to sift evidence 2,000 times faster than a human lawyer! The SFO confirmed it will begin managing all new cases with the technology and hopes OpenText’s automatic document analysis will reduce costs, allow investigations to move quicker, and achieve a lower error rate than the work of human lawyers. Its robots can process more than a million documents a day.

Middle-class grab

Fears over a ‘middle-class grab’ of apprenticeships are valid, says skills minister Anne Milton. She told the inquiry into the economics of FHT education she was now “watching and waiting” to see if there is any fall-out to all the changes that are being made, and will take appropriate action if it appears apprenticeships are not working. She told the inquiry: “The majority of apprenticeships are at Level 2 and 3. I think they still make up 90% of it.” Her worry, however, is apprenticeship degrees, although she said she wasn’t quite ready to react, there is a real concern these could distort the market.

In brief A handy calculator Want to check out your take-home pay after all those student loan deductions? Then you need to visit SalaryBot, a handy salary calculator that works out your take-home pay from your gross wage. You can see just how much more that pay rise will mean! Go to 10

Sustainable accounts The Association of International Certified Professional Accountants (CIMA and AICPA) has launched new guidance on how management accountants can help companies achieve the United Nations’ Sustainability Goals. These goals aim to address world issues, including poverty, hunger, health, education, climate change, gender equality, water, sanitation, energy environment and social justice. You

can check out the guide by going to New foundations A new foundation apprenticeship in accountancy, developed by Skills Development Scotland in partnership with AAT, has now been approved. The apprenticeship is aimed at senior phase pupils making decisions about which subjects they will study in S5 and S6, giving them an opportunity to take their first steps into the finance industry.

Kaplan’s Eagle takeover Kaplan has been on the acquisition trail again. This time it has bought top AAT college Eagle Education & Training Limited. The AAT award-winning college, owned by Sonya Ashbarry, changed hands in late January. Based in Wrexham, Eagle was formed in 2002. Kaplan also bought Osborne Books in February 2016 from Michael Fardon. Earlier this year, Osborne launched an innovative series of revision aids for ACCA PQs in the form of its ‘Osborne Revise’ series. PQ Magazine June 2018

PQ one-day conference

Whole world in your hands Make sure you understand what your options are when it comes to a career in accountancy. Sign up to our one-day London conference on 11 June


ere at PQ magazine we have joined forces with LSBF to host ‘Being Global: future-proof your career in accountancy’, a free one-day conference looking at how you can ensure career success in a global world. Open to all, the conference is full of big hitters from the world of accountancy. ACCA’s Maggie McGee, director of professional insight, will do what she does best – give us an insight into the future and explain how PQs can futureproof their careers. ICAEW’s head of ACA development and special projects, Adam Birt, will also be on hand to look at the globalisation of the profession and how the qualification can give you wings. We open the first session with CIMA’s

Dr Noel Tagoe, who will explain exactly what employers want from today’s and tomorrow’s PQs. Pro-recruitment’s Tom Eagle will also

be there to give a consultant’s view of what the current trends are. Just before lunch (which we will supply) other employers will be talking about the real world of work. In the afternoon there’s a panel discussion, with among others the CEO of CIMA, Andrew Harding, and AAT’s Andrew Williamson. We also have the head of ACCA UK, Claire Bennison, and AAT’s Lea Watson talking about apprenticeships. The day is a great chance to network and see which accountancy body you like best! It’s also a unique chance to talk to the people who run the profession. To book your FREE place just go to and we will do the rest. You really need to put Monday 11 June in your diary. Just so you know, we are using the London Bloomsbury campus of the University of Law, which is a short walk from Goodge Street, Tottenham Court Road, and Warren Street tube stations. The PQ team will also be on hand for a chat, so we look forward to catching up with you on 11 June. See page 25 for more details. PQ

Embracing change, shaping futures. Together. Our new Ethics and Professional Skills module (EPSM) is now LIVE, ensuring you have the vital ethical principles for the evolving digital age. The module: • covers ethics and professionalism, personal effectiveness, scepticism, leadership, communication and interpersonal skills • teaches you via real-world business situations • provides flexibility, allowing you to start alongside any applied skills exams you are sitting If you have completed our previous Professional Ethics module, you are not required to sit EPSM but it gives an ideal grounding to start the Strategic Professional exams.

For more information visit:


PQ Magazine June 2018

CIMA strategic case PQ

Rule of two You need to take a tactical approach if you want to pass the strategic level case study, says Dave Halford


o be sitting this exam you will likely have some experience of the ICS cases at the Operational and Managerial levels. However, at the Strategic level you need to prepare yourself for a very different exam.

Structure Let’s start by taking a look at structure of the exam. There are always three tasks, as follows: • Task 1 – two sub-tasks worth 15 or 16 marks each. • Task 2 – two sub-tasks worth 15 or 16 marks each. • Task 3 – four sub-tasks worth seven or eight marks each. These will total 91 marks, supplemented by the nine integration marks. While CIMA release sample answers and marking grids, they do not release a detailed marking guide. However, comparing these it seems clear that the marking team are applying ‘The Rule of Two’ – in other words, any valid point you raise is potentially worth a minimum of two marks, if properly explained and related. Indeed, in Tasks 1 and 2 it may be that up to three marks may be awarded for a properly explained point in some cases. This is important to know as it helps you plan your answers, as we’ll show below. A common requirement for one of the subtasks in Task 1 is to ‘evaluate the strategy of…’ Applying the ‘Rule of Two’ means you should be looking to make seven or eight comments, each potentially attracting two marks, to get to the maximum allocation of 15 or 16 marks. Technical content Unlike the other ICS exams, the strategic level is very light on technical content. For starters, despite the pre-seen containing the financial statements of the featured organisation, and often those of a direct industry rival, you won’t be asked to performed any detailed calculations based on them. Similarly, you should not expect to be quizzed on theories and models (such as Mendelow, PQ Magazine June 2018

Porter, etc), as you’ve proved you understand these theories in your OT exams. At the strategic level, the examiners are looking for you to be able to demonstrate that you are able to give commercial analysis and advice at the level of a senior financial manager (for example financial controller). In the real world, you may refer to the odd piece of theory to support your analysis, but you would expect to focus on what your organisation should actually be doing, not explaining – for example – the meaning of ‘HRM in the Value Chain’. Common requirements To date, there have been 13 sittings (meaning 65 exams) and analysis of past exams reveals some commonly asked requirements. The most notable of these are: • Evaluate potential investments/proposals, eg mergers, joint ventures, new products (F3/E3). • Evaluate the strategic fit of a proposed investment (E3). • Evaluate strategic risks of potential investments/proposals (P3). • Explain how/why a share price may react to unfolding events (F3). • Explain how to value a business (F3). • Assess the financial impact of a proposed investment (F3). • Identify potential merger synergies (F3). • Discuss risks and how to manage them (P3). • Advise on foreign exchange risk and hedging (P3). • Evaluate the ethical implications of a particular course of action (F3/P3/E3). • Advise how to deal with ethical dilemmas/ risks (F3/P3/E3). • Discuss mentoring schemes (E3). • Change management and team building (E3). • How to motivate and retain staff, eg evaluate bonus schemes (E3). • Explain how to communicate a decision to staff or the stock market (E3). • How to manage negotiations – with a merger partner/supplier (E3). • Contents of a press briefing (E3).

• Advice on Corporate Governance – board structures, remuneration and internal control (P3). • Advice on integrated reporting (F3). • Identify and justify suitable CSFs and KPIs to drive performance (E3). Although the exam is assessed under the four headings of Technical, Business, People and Leadership skills, you should not concern yourself with the distinction between these as CIMA themselves appear to be flexible in how they classify topics; for example, in November 2017 dealing with foreign exchange risk was classified under ‘Technical’ in exam version 3, and under ‘Business’ in version 2. May 2018 Case This case study concerns Couchweb, an internet streaming company with a resemblance to Netflix. Remember, however, the whole point of the pre-seen is to ensure that all students enter the exam with the same level of industry knowledge, so external research will be of little or no value. Based upon what we have seen in past exams, possible exam topics could include: • Merger/takeover talks – possibly with HomeVideo or MovieMaster. • How to finance a takeover – debt/equity/cash. • How to deal with regulatory oversight of a takeover/merger. • Dealing with negative press – eg under 18s accessing content with mature themes. • Dealing with piracy. • Review the price of subscriptions and/or changing the number of log-ins. • Sustaining growth via further overseas expansion, or diversifying into music streaming. • Dealing with a data breach – auditing systems, dealing with publicity, impact on share price. • Vertical integration – acquiring a content provider, such as Majik Media. • Retaining staff. Remember, these are only possible scenarios. As always, you should prepare yourself for unexpected in the Strategic Case exam. PQ • Dave Halford, Strategic Case Lead, BPP 13

PQ career advice

TENTOPTIPS George Acquah was the star turn to the ACA prize-giving ceremony, where he gave the winners his ’10 things to leave you with’


eorge Acquah is the finance manager for the central Marine HQ corporate function at Rolls-Royce. Before joining the firm he spent six years at PwC, working mainly in audit, but he also spent a year on secondment to Lehman Brothers Investment Bank Administration. Oh, and he’s also a prizewinner himself, landing the Howitt prize in 2013. A London boy, he studied physics at university and finally became an accountant. But, he told the packed audience, he wasn’t always an accountant. For a while he was a professional musician, and he still loves playing (the piano) and felt you don’t have to define yourself at a particular time. However, while you may not be defined by your profession you should, he stressed, be defined by your values. Acquah told the audience that he had 10 things he wanted to ‘leave you with’, which can also be known as his common sense reminders, and here they are:

1. Play to your strengths – you don’t see great attacking footballers spending time developing their defensive qualities! We all have our strengths and we should know what they are and play to them. It’s the way to succeed. 2. Share your knowledge – someone once said if you are the smartest person in the room you are in the wrong room! But, sharing is the way to grow, stay motivated, and build a role in the organisation. It also increases productivity. 3. Take risks – as president of the Nottingham, Derby and Lincoln Society of Chartered Accountants, Acquah is the youngest and first ethnic minority president they have had. The role has taught him new skills, such as how to become more creative, and his confidence has grown. But don’t go crazy! You need to weigh up the chances of success and failure. 4. Dream big, dream small – nothing can stop a dream whose idea has come. 5. Keep learning – in an environment where everyone is learning it often means everyone is teaching as well. If you have to keep doing the same things just try to do them better. 6. Do what makes you happy – as long as it doesn’t hurt anyone else. And being happy certainly improves performance. 7. Harness your passion – passion motivates

Acquah: ‘stay motivated and build a role’

and drives commitment. It can also help you find that extra level of performance. 8. Always do the right things – ethics is a thread that goes through all the exams. You must always remember you are representing the institute and yourself at all time. 9. Own your future – do what you want, decide what you want to do and then you will choose your future. 10. There is no secret to success – just keep doing what you are doing. Oh, and if you are a prize-winner, it doesn’t do you any harm if you put that on your CV. PQ

Need help preparing for your exams in June? Join the ACCA Exam Club Hub for a wide range of resources and practical advice to help you get ahead in our qualification. Register today for access to: • live and on-demand webinars by our staff and members • ACCA student profiles with tips and advice for exams • past exam papers, study guides, retake guides and other downloads • information on and contact details of available tuition providers • planning and booking your exams

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PQ Magazine June 2018


Practical experience essential to qualify You can’t become an ACCA member just by sitting classes, says Linda Calder


hile you are working so hard to pass the ACCA exams it is difficult to think ahead to the next stage. But exam success is just one of the many milestones on the road to achieving the ultimate goal of being a finance professional. This is particularly the case if you want ACCA or FCCA after your name. What is important for trainees to know is that it is never too early to think about their journey to becoming a fully-fledged ACCA member. Trainees – students and affiliates alike – will have to check off the following three key steps in order to become a fully qualified ACCA professional. They are: • Completing the ACCA exams. • Completing the Ethics and Professional Skills module. • Finishing the practical experience requirement (PER). It is often the case ACCA students complete their exams before achieving their PER, but if they have been working they may have already undertaken PER without even realising. What is PER? So what is PER and why is it so important? Passing the ACCA exams is a huge achievement, but membership is the final destination – it shows employers you have completed all the necessary components of the qualification. This ultimately benefits your professional growth and career potential by proving to employers you can apply all the technical knowledge you’ve acquired through exam preparation in the workplace.’ ACCA’s practical experience requirement enables trainees to develop professional knowledge, values and behaviours first-hand – vital to becoming a professional accountant. Employers also expect ACCA members to show high levels of knowledge and ability in the workplace, and to behave

PQ Magazine June 2018

ethically and PER enables students to achieve this. PER and its three components There are three components to PER, which are: • Achieving the five Essentials and four Technical performance objectives by gaining the experience required to achieve the necessary elements and complete a statement for each performance objective, which are signed off by your practical experience supervisor. • Completing 36 months’ experience in one or more accounting or financerelated role, which is verified by a practical experience supervisor. • Regularly recording the PER journey in the easy to use online My Experience tool, which can be accessed via myACCA. A practical experience supervisor supports and reviews trainees’ development and progress in the workplace. It is a student’s responsibility to find one. A supervisor must be a qualified accountant, recognised by law in their respective country or should be a member of the body International Federation of Accountants in order to sign off a student’s progress report. If a line manager is not qualified, a

student should ask another manager, a consultant, or the organisation’s external accountants or auditors to work with their line manager to sign off their objectives. Five ways to top it up The following tips can help a student make real progress with their PER and in turn realise their ambition of ACCA membership. 1. Secondments: these are a great way of varying a trainee’s work experience. Members of staff can transfer to other posts or teams for a fixed amount of time. This can be an excellent opportunity to gain a different aspect of responsibility. 2. Project work: it is generally a good idea for trainees to volunteer for project work as it could lead to opportunities not considered previously when originally putting together their performance objectives. 3. Shadowing: this can give a student invaluable new insight. It involves observing work practices of a more experienced colleague. Students can learn by listening to and observing fellow employees, and many people respond better to questions being asked to better demonstrate their own specialist skills. 4. Job rotation: this involves swapping roles temporarily with a colleague. After receiving clear instructions, a job rotation can allow trainees to perform new tasks autonomously. People who have undertaken rotations often develop fresh ideas and feel a new enthusiasm when they resume their original role. 5. Thinking creatively: this can help students gain more practical experience. It often pays to think creatively and be proactive with a practical experience supervisor and colleagues. And remember… ACCA’s PER policy is flexible, so if you’re moving to a non-accounting role for a while or taking a career break, don’t worry! Just remember to record and get signed off all your progress to date. This means when you’re ready to continue with your PER you can carry on from where you left off without having to go back to past employers to get your experience verified. PQ • Linda Calder is ACCA’s professional development manager


PQ ACCA exam tips

The June exams are coming! Here’s some top tips from top tutors… BPP .

P1 Check out all new published articles. Recent exams have tested content from the examiner’s technical articles, as with March 2018 and the transaction cost theory. Expect to see: • Use of stakeholder, ethical and other CRS theories applied to scenarios. • Use of risk, control and governance syllabus content, especially relating to board directors, remuneration and reporting. • Focus your past-paper practice on dysfunctional behaviour in areas such as bribery and corruption, environmental risk or poor ethical stance. P2 Section A • This will be a 50-mark case study, including the preparation of a group statement of financial position, statement of profit of loss and other comprehensive income or statement of cash flows, which may include discounted activities, disposals and/or acquisitions or foreign subsidiary. Expect other accounting complications, such as group adjustments, financial instruments, pensions, share-based payments and impairments. • Discursive requirements on a linked accounting adjustment, and social/ethical/moral aspects of corporate reporting. Section B • Could see fair value measurement (see examiner’s article), revenue recognition (article), deferred tax, foreign currency transactions, financial instruments, pensions, share-based payment, non-current assets (recognition and/or impairment of tangible and intangible assets), borrowing costs, nature of business combinations, the effect of accounting treatments on earnings per share or ratios. • Other question could be industrybased testing range of standards – accounting policies and framework, leases, grants, IFRS for SMEs, reorganisations, provisions, events after the reporting periods and related parties. • Q4 looking at current developments in corporate reporting and problems with existing standards. Think foreign exchange (article), measurement and revision of the conceptual framework (article), classification in profit or 16

loss vs OCI (article), leasing, equity accounting, integrated reporting (article), performance measurement, regulatory issues over adoption and consistent application of IFRSs. • One of these questions could also include elements of group accounting, especially if Q1 is a statement of cash flows. P4 Q1 • Think core areas of the syllabus here. So that’s project appraisal (domestic or overseas), business valuations and business/financial reorganisations. • These areas often include cost of capital calculations. • Risk management could feature in a number of ways – value at risk, real options, hedging and risk mapping. Q2-4 • Risk management (currency or interest rate). • Dividend policy and general financing issues. • Real options. P5 Q1 • In recent exams this question has often required a significant level of data analysis using numerical techniques such as KPIs, EVA. • You need to have mastered the numerical techniques such as transfer pricing, ratios, analysis of quality related cost, and ABC. But remember the examiner wants the data turned into information not a lot of complicated numbers! • Performance management frameworks – building blocks, performance pyramid or the balanced scorecard.

Q2-4 • Quality management, information reporting (CSF and KPIs), the application of strategic models (PEST, Porter’s 5 forces, the value chain), HR frameworks (reward and appraisal systems), risk management and environmental management accounting. • Check out the recent articles on complex business structures, big data, integrated reporting and performance management models (BCG and 5 forces). P6 Section A • One of these questions will focus on personal tax issues and the other on corporate tax. Section B Expect to see quite a lot, including: • Groups of companies involving overseas aspects and losses. • Unincorporated business particularly loss relief or involving partnership, basis period rules should also be expected. • Capital gains tax vs IHT, including available reliefs. • Overseas aspects of income tax, capital gains tax, IHT or corporation tax. • Personal service company. • Share schemes. • Company purchase of own shares or liquidations. • Enterprise investment schemes/seed EIS/venture capital trusts. • Takeovers. • VAT – partial exemption or land and buildings or transfer of a going concern or overseas transactions. • Transfer of trade vs sale of subsidiary. • Disincorporation relief.

• Pension contributions. • Patent box, research and development expenditure. P7 Section A • Typically, Q1 will test planning, risk assessment, evidence gathering and professional issues where details of an audit client (remember it could be a group) are presented, often with financial statements extracts for analysis. • Topics covered by Q2 will be more uncertain – possibly a non-audit engagement, such as prospective financial information (PFI) or due diligence, or a Q testing quality control. • Don’t forget the professional marks here. Section B • Expect the following syllabus areas to be tested: audit evidence and financial reporting issues, practice management, including ethics and reporting (completion and communication). • Recent exams have tested fresh content. For example, the evaluation of misstatements was examined in December 2017. You must read the three most recent articles covering ethics, risk and accounting issues.

FME Learn Online .

P1 Do not underestimate P1. • Read the technical articles – they’ve come up in the last few papers. P1 is smaller syllabus, but if I had to I would focus on… • Types of board, leaving, joining – senior roles. • Rules v principles – and code application. • Mandatory and voluntary disclosure. • Evaluate control systems. • Internal controls and financial reporting. • Information for good control. • Strategic/operational risks. • External risk reporting. • ALARP and risk perception. • Risk manager, risk awareness and TARA. • Ethical theories – application. • Public interest. • Integrated reporting. To pass: • Answer the question asked! • Focus on the verb – if it says ‘evaluate’ then evaluate! Don’t discuss, explain, assess…. • Plan your answer before you write anything. • It’s never “tell me everything you know about…?” • Do not provide generic textbook answers – are your points relevant PQ Magazine June 2018

ACCA exam tips PQ

to the scenario? • Don’t feel you have to write lots – write to the marks available. • Good layout and use headings. • Manage your time… ruthlessly. P3 • Do not simply learn lists of models. • To prepare, read the technical articles and be able to calculate ratios.

PQ Magazine June 2018

P3 is a large syllabus – so if you have to focus on… • Macro and competitive environments – all models. • Strategic capability and organisational knowledge. • International diversification. • Strategy clock, generic strategies and SFA. • Organisational structure – boundary-less and Mintzberg.

• Big data. • Leadership styles. • Emergent strategies. • Buying generic vs bespoke software. • IT controls and all of e-business. • Managing and controlling projects. • Strategic finance options. To pass: • Do not spend too long on Q1.

• The model itself is never the answer. • Justify your points. • If you’re given data, use it – but don’t get bogged down in the calculations. • Read March 18 post-exam guide. • Imagine the marker is your boss and has asked you for the question requirements… Continued on page 18


PQ ACCA exam tips

Top tips Continued from page 17 • Remember, quantity is not necessarily quality. F5 • Section A objective test questions in the exam generally cover the full syllabus. • Likely topics to feature in the section B objective test case questions could include mix and yield variances, budgeting, relevant cost decision-making and throughput accounting. • The section C constructed response questions must be practised on the ACCA website using the software tools. These questions will be a mix of calculations and discussion questions on performance

ACCA Webinars

management, transfer pricing, planning and operational variances, and learning curves. P5 Although the March 18 exam tested CSFs and KPIs, this is a key area of the P5 syllabus, and so is likely to be examined again. Applying any of the performance management models to the question-scenario i.e. balanced scorecard, performance pyramid and/or the building blocks model is a strong possibility. There are plenty of past exam questions to practice on these models. Risk and uncertainty techniques and corporate failure models are likely candidates, too. F9 Section A will be the usual mix of objective test questions covering the ENTIRE syllabus. Pay particular attention to the theory/‘wordy’

There is a ton of great stuff on the ACCA website to help. Check out the revision session webinars for P1 and P3, run by Dr Dino Kiritsis, the founder of StudySmart. The P1 webinar runs over two days, on Thursday 24 May and Friday 25 May, and the P3 on Tuesday 29 May and Wednesday 30 May. They both start at 12 noon British Summer Time. And remember, if you can’t make the live sessions you can register and attend on-demand at any time – just follow the live link. For a full listing go to



These tips should only be used in conjunction with proper study. We cannot guarantee that these topics will appear in the actual exam as we have not seen the exam papers. Examiners are not predictable so it is vital that all core syllabus areas are revised fully. questions, as they need careful reading. Also double check your calculations. Section B’s case study-based objective test questions are likely to cover: • Cost of capital and finance. • Risk management. • Ratios and valuation. Once gain, pay particular attention to the theory/‘wordy’ questions and double check your

calculations. Section C – two constructive response questions. My educated guess are: • Working capital management – inventory, receivables and cash. • Investment appraisal – possibly including the asset replacement decision. • Take care great care with the theory/written answers. They can carry up to 10 marks and in the past students have underperformed on this style of question. • Make sure you are comfortable with the ACCA software tools. P4 Expect the paper to cover the FIVE core topics: • Cost of capital, long-term finance and dividend policy. • Advanced investment appraisal. • Option pricing (BSOP). • Risk management. • Business valuations and corporate reconstructions. Don’t forget to use our ‘football formation’ exam timing approach as previously published in PQ (September 2017, page 33). PQ

GO TO THE PQ WEBSITE There are lots of tips for the ‘F’ papers on our website. Go to

PQ Magazine June 2018




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PQ objective tests

Make the right choice Tutor Tom Bulman explains how best to tackle OT exam questions, now the heart of the ACCA exams What is objective testing? Objective testing (OT) is a method of examination in which the answer is right or wrong. It’s fact rather than opinion. Consider this question: What is a receivable? A: money owed to you B: money you owe to someone else The answer is A. Marking is a simple process, free from ambiguity, i.e. it’s ‘objective’. Compare this to questions such as ‘describe a fixed asset’ or ‘calculate the materials price variance’. Here the marker must make a judgement about how many marks to award a student, based on the quality of their answer compared to the marking guide and model answer. How objective testing is used The ACCA has introduced objective testing into all the ‘F’ papers. Students often talk about ‘multiple choice’ questions in the exam and, while these are a form of objective testing, there are seven different types: • Multiple choice: choose one option from a choice of various answers (usually three or four). • Multiple response: choose more than one option from a choice of various answers (usually three or four). • Fill in the blank: fill in a box, usually with numbers but it could be text. • Drag and drop: dragging an answer and dropping it into the right part of a response area. • Drop down list: selecting the correct entry from a drop-down menu. • Hot spot: selecting a specific point on an image as your answer. • Hot area: selecting one or more areas on an image as your answer. Objective test questions can appear as separate, individual questions, referred to by the ACCA as ‘Objective Test (OT) Questions’, or as a series of questions based on a single scenario, referred to as ‘Objective Test Case Questions’. Top tips for passing OT questions A generally held view is that multiple choice questions are easier than written questions, but many students – and tutors – would disagree! By using OTs, the exam covers a greater breadth of the syllabus and, unlike written questions, there are no marks for workings! As good 20

OT technique can mean the difference between a pass and a fail, here are my top 10 tips: 1. Study the whole syllabus: Two to three months before the exam put together a study plan and stick to it. Aim for 6-10 hours per week (on average), but spread it out. 2. Practise questions: Do as many exam standard OT questions as possible, so you know what to expect in the exam room. Remember, in OT cases there are no dependencies between the individual questions, so don’t worry if you get the first question wrong, you can still score on the other four. Also, with drag and drop questions, not all answers need to be used, so don’t waste time trying to allocate the ‘spares’. 3. Practise using the ACCA computer based exam (CBE) software: Make sure you are comfortable with the functionality, such as the navigation menu and the scratch pad. With hot spot questions, be as accurate as you can when clicking on the image. They are set so that as long as part of the X is touching the line representing the correct answer, it scores. If it is also touching another possible answer, it won’t. Read instructions thoroughly, regarding entry of decimal places, minus signs, and so on. Any unit of measurement will sit outside the box and if there are specific rounding requirements these will be displayed. 4. Do your best questions first: You don’t have to do them in order, so ‘flag’ any questions that you are not comfortable with and focus on those questions that you feel more confident about. Remember to return to the ones that you’ve skipped before you finish the exam. 5. Read the question: This is very hard to do but crucial to success! Take your time and be careful that you answer the question set. Make sure you have

entered the correct number of responses as dictated by the question. 6. Re-phrase difficult questions: For example, ‘which of the following is NOT a disadvantage can be rephrased as ‘which of the following is an advantage…’. 7. Do rough workings on scrap paper: Don’t worry about being neat, but do label workings with the question number so you can check them again later if necessary. If you can’t get an answer, check the question, check your workings, have another go – but don’t get bogged down. 8. Hedge your bets: When looking at written questions I normally divide the answers into three categories: correct, incorrect and ‘not sure’. Take the following example: The following statements relate to the participation of junior managers in setting budgets: 1. It speeds up the setting of budgets. 2. It increases the motivation of junior managers. 3. It reduces the level of budget padding. Which of the above statements are TRUE? A. 1, 2 and 3 B. 2 only C. 2 and 3 only D. 1 only I might feel certain that statement 1 is false and that statement 2 is true. I’m uncertain about statement 3. Looking at the answers, I can eliminate options A and D. I am guessing from two options instead of four (the answer is B). 9. Answer every question: There is no negative marking in ACCA exams so wrong answers don’t reduce your mark. At the end of the exam, have a guess for any questions you have flagged to revisit. Note that multiple response questions might be marked as complete, even if you haven’t entered the right number of answers. 10. Keep track of time: Time management is critical to exam success. Make sure you leave enough time for every part of the exam. Not all OT questions take the same time to complete so manage your time within a section rather than per OT question. Objective testing accounts for a significant proportion of the marks in all ‘F’ level ACCA exams and good exam technique can make all the difference. Of course, in written ‘constructed response’ questions, exam technique can make all the difference as well! But you’ll have to wait for the next instalment of our exam technique series to find out about that! PQ • Tom Bulman is an ACCA tutor at AVADO Learning PQ Magazine June 2018

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Be prepared for

exam stress Jackie Durham explains why you should follow the example of the scouts


nyone who has been a boy or girl scout in their youth – and many others who have not – will know the motto: ‘Be prepared’. For scouts, the aim of the motto is to ensure that they are always physically and mentally ready to do their duty. Sitting your CIMA exams is not exactly a duty. Nevertheless, it is a responsibility and one that ultimately only you can deliver on. There is truth in the Benjamin Franklin quote: “By failing to prepare, you are preparing to fail.” On the upside, however, being prepared is the single easiest way to relieve your exam stress and improve your chances of passing. I have written many articles on how students can avoid exam stress by using techniques such as breathing, mindfulness and being an ‘organised learner’. I also believe that most exam stress can be overcome through thorough preexam preparation. The content of the exam is always going to be a surprise, and may include questions that throw you even if you are primed, but knowing that you have prepared fully will mean that you enter the exam room feeling calm, positive and confident of a good outcome.

Recently, I was working with two small groups of students who were preparing for their case study exams (Operational Case Study and Gateway). They had all had previously failed at least once. I encouraged them to look at where they may have gone wrong in previous attempts by using a SWOT (strengths, weaknesses, opportunities and threats) analysis. Here is an example of a SWOT analysis for the Gateway case study. Templates for all levels of the case study can be found on CIMAconnect. Some students had already considered where they had gone wrong prior to undertaking the SWOT analysis. For others, reflecting on past performance using the SWOT was a real eye opener and a number of students identified some fundamental gaps in their preparation. Once they understood some of the reasons why they were failing, and developed strategies to address them, they had a sound basis on which to recommence their studies. Next I put together a weekly planner for the five to six weeks leading up to the exam. The planner identified activities for each week and flagged up useful resources, as well as any

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events run by CIMA to support those activities. These might be webinars analysing the pre-seen material or ‘ask a tutor’ sessions. Students could customise the basic plan depending on the priority areas that they had identified in their SWOT analysis, their personal study preferences and their time constraints. After the exam, I contacted the students who had worked with me on the support programme to ask whether they had (among other things): • Felt more confident about sitting this exam compared with the previous attempt(s). • Felt that they were better prepared and that the exam went better than with previous attempts. Almost without exception, the answer to both questions was ‘yes’. Structured planning and preparation did increase confidence and reduce pre-exam stress. Furthermore, when the results came out, there was a further reduction in stress since the results were good. Everyone in both groups increased their marks and many passed the exam. PQ • Jackie Durham, education and training consultant, CIMA

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financial statements PQ

Why reports matter Mark Clatworthy poses the question: who actually uses financial reports?

stewardship and contracting purposes. This is a very important role for financial statements that is often not as fully discussed by standard setters as it is by academics. Note, however, that in its recently issued update of the Conceptual Framework for Financial Reporting (March 2018), the IASB acknowledges that investors’ expectations about future returns does depend on their assessments of future cash flows and on their assessments of management’s stewardship of the entity’s economic resources. The ICAS/EFRAG report reveals that the academic literature generally recognises that the different roles for financial reporting sometimes emphasise different information properties. For example, for stewardship and managerial assessment purposes, investors are likely to be more concerned about whether changes in firm performance are attributable to management actions.


n the April edition of PQ, Philip Dunn offered an explanation of the importance of financial statements and who they are of most use to (‘Keeping it real’). In this article, he identified the major user groups of financial reports as: • Potential investors/shareholders. • Employees. • Lenders. • Suppliers. • Other trade creditors. • Customers. • Government. • The public. This classification relies on the UK GAAP Statement of Principles and the 2015 IASB Conceptual Framework for Financial Reporting. The article notes that the IASB Framework identifies potential and existing investors, lenders and other creditors as primary financial statement users. An interesting and important question though is who actually uses financial reports? Also, for what purposes are they used? To address these questions, ICAS and EFRAG commissioned an academic literature review entitled ‘The use of information by capital providers’. The report is freely available on both ICAS and EFRAG websites.

Intensive users The literature review focuses deliberately on capital providers, not on government, the public or customers. Investors are undoubtedly the primary users – not just from the point of view of the designers of financial statements (standard setters), but also as the most intensive users in practice. Although the public and customers are notionally users, you should ask yourself the following question: when did any of your many (non-accountant) friends and relatives last read a company’s annual report? Even the government will rely to a limited degree on individual firms’ financial statements for tax purposes or for economic modelling – and even when they do this, they then make extensive adjustments. Furthermore, suppliers and trade creditors typically rely on financial statements indirectly (e.g. through credit rating agencies) rather than directly via annual reports. Some interesting findings emerge from the academic literature on who uses financial reports and how they are used. PQ Magazine June 2018

First, despite many claims that accounting information is backward looking and lacks timeliness, many capital providers find financial statements useful for various decisions. For example, important outputs of the accounting system, such as earnings, form the basis of valuation estimates. Consider how widely used the price/earnings ratio is. It is easy to forget the properties of accounting information that contribute to this usefulness. The literature review concludes that financial statements ‘are unique in being regulated, recurring, standardised and independently verified and thus enhance the utility of other sources of information’. The latter point is often overlooked: many other sources of information about company performance rely on accounting information for their usefulness. Take the case of a management forecast of future performance. It is of much less use without a verified outcome, such as audited earnings per share. Hence, even though the forecast is forward looking, having a historical verified outcome is still useful for ex post assessment of how accurate the forecast was, despite being backward looking. Second, financial reporting information is useful in capital markets for

Reliability of the information Moreover, when accounting data is used in contracts, such as in executive compensation (e.g. where bonuses are tied to earnings per share) or in lending agreements (e.g. forming the basis for financial covenants), it is likely that investors prioritise the reliability of the information. This is because of preparers’ incentives to supply information that maximises their own welfare, rather than to faithfully represent the financial position and performance of the firm. The academic literature attributes many of the important characteristics of financial statements, such as verifiability, prudence and the fact that they are audited, to this stewardship or contracting role. It also illustrates that the ability of financial statements to meet all users’ needs is limited. Impairments of financial assets are forward looking and useful for firm valuation purposes, but as the Parliamentary enquiry into Carillion is currently revealing, they are also extremely difficult to verify. This makes judging managers responsibility for the firm’s failure difficult. On the positive side, however, it is reassuring that despite its limitations, accounting information has unique strengths that make it more valuable than most other sources of information. PQ • Mark Clatworthy is Professor of Accounting at the University of Bristol. He is a co-author of the ICAS/EFRAG report ‘The use of Information by capital providers’, which is available for free on the ICAS and EFRAG websites 23


A technique tester O

ne area that students always struggle with when they reach investment appraisal in the P4 exam is which technique they should use. At this level we will not be asked specifically to perform a named technique such as Net Present Value (NPV) instead the requirement will ask us to “evaluate the financial acceptability of the investment”. The starting point in a question like this is to prepare a schedule of the free cash flows. Read the scenario carefully, pick out each of the cash flows one at a time, ensure you account for tax, inflation and think carefully about the timing of these cash flows. Furthermore, the forecasting of free cash flows is the starting point for many business valuation questions, so being able to do this accurately will stand you in a good position for the P4 exam. Once we have the free cash flows we then need to consider two types of risk, business risk and financial risk. We need to ask ourselves has the business risk changed, is the company undertaking a project in a new business area that is different to its core operations? For example, if a supermarket decides to launch an airline this would be a change of business risk. Following this we need to consider whether the capital structure of the business has changed, has new finance been raised in relation to the project such as a rights issue or redeemable debt? If so, this is a change in the financial risk. Once we know the answer to these questions we will then know the correct technique to apply. The table below shows a summary of which technique is to be used:


Financial Risk Change


Passing P4 Investment Appraisal is all about choosing the right technique, says Karl Ballard

If both risks are constant we can use our existing WACC to discount the free cash flows, by far the most straight forward method of investment appraisal. If the business risk has changed but the capital structure remains the same we need to calculate a risk adjusted WACC. This will usually involve identifying a company that operates in the same business area as our new project; we would call this company a proxy company. We will need to take this company’s equity beta (βe), de-gear (remove the impact of the proxy company’s financing), then re-gear (apply our company’s financial structure). We do this by using the formula for the βe from the formula sheet, and also we assume that the debt beta is zero. Once we have the βe we then use this alongside the risk free rate and the average market return in the Capital Asset Pricing Model (CAPM) formula to calculate the cost of equity (ke). The final step is to recalculate the WACC using the ke and cost of debt Business Risk and their respective market values. So in Constant Change summary: 1. De-gear Discount using Weighed Average Discount using risk 2. Re-gear Cost of Capital (WACC) adjusted WACC 3. CAPM It 4. WACC It and apply this risk adjusted WACC to Adjusted Present Value (APV) APV discount the free

cash-flows. If the financial risk has changed, even if the business risk has remained constant, we must apply APV. The technique involves two steps, firstly calculate the base case NPV and then add to it the present value of the financing side effects. The base case NPV starts with the free cash-flows which are then discounted at the ke for an ungeared company. To calculate the ke we again look to a proxy company, degear its βe and then use the asset beta in the CAPM. We do not re-gear the beta; this is a common mistake that many students make. The financing side effects include issue costs of debt and equity, tax relief on interest payments and post-tax interest savings on subsidised loans. For all of these side effects we must calculate their present value using the risk free rate. Once we have both the base case NPV and the present value of the financing side effects, we add these together to calculate the APV. So if you meet an investment appraisal question in the exam remember to take the following approach: 1. Forecast the free cash-flows 2. Consider whether the business risk has changed? 3. Has the financial risk changed? 4. Choose appropriate technique! PQ • Karl Ballard is a tutor at Kaplan Financial

PQ Magazine June 2018


Being Global Future-proof your career in accountancy Featuring special guest speakers from ACCA, AAT and CIMA.

When: Monday June 11th 2018 9am - 4:30pm Where: ULaw – Bloomsbury Campus

14 Store Street, Fitzrovia, London WC1E 7DE BOOKING:


+44 (0)20 7823 2303

PQ CIPFA case study

Preparing for the SCS


he SCS exam acts as a ‘capstone’ subject, which can test any element of the CIPFA professional qualification, including the other strategic level exam (Strategic Public Finance). The SCS exam is fundamentally different to any of the other CIPFA exams: • There can be two or three questions, unlike the other papers which have a set number. • No single question can be worth more than 70% of the marks and must be at least 20% of the marks. • Each question will typically be made up of between five and 10 components. Unlike CIPFA’s earlier exams, no breakdown of marks for this is given as the exam looks to test how you will make judgements as to which parts are more important. The emphasis of the exam is evaluation and professional judgement (EPJ). Between 75% and 85% of the available marks are EPJ marks. Students often struggle with this element, as there is a tendency to repeat information from the case – without providing any actual evaluation. Instead of simply stating a fact like “the net budget after adjustments will now be £5,000k”, you need to explain the impact of this. For example, “and this means that the savings target is marginally met”. The other 15% to 25% of the marks are available for technical analysis (TA) and these marks are based on the manipulation of financial and other information, often using a technique covered in an earlier module. On the face of it, this would appear to be rather a tall order. However, the SCS exam is centred on advance material (AM) that students have access to four weeks prior to the actual exam. It covers some of the key information students need to in order to answer the questions. Having the AM for four weeks allows students to become very familiar with the case scenario and the role they are playing in the examination. This is usually a finance role that a newly qualified accountant may have. Students receive additional material on the day, known as the exam day material (EDM). This will be smaller than the AM and will referenced to the individual questions, although there may be some shared additional material. The scenario is usually based in a country with certain similarities to the UK and detailed knowledge of a particular sector will not advantage an individual student.

Tips for the exam Familiarity with the AM is essential. Everyone has their own preferred approach, but one approach is to consider: • The national (macro level) position. Ultimately, all of your answers and most importantly your recommendations will be in this overall context. If money is tight then proposing a huge spending programme (however desirable) might not be realistic. Think about which party is 26

Ian Chafer explains how you can best gear up for the CIPFA Strategic Case Study (SCS) currently in power, what they believe in, and how long will be it be until the next election. • The local (micro level) position. What is happening within our organisation? Who are the key players, how long have they been in post and are they new to the sector? If based on a local authority, does local political control match the national position? • The SCS exam invariably involves a lot of acronyms – make a list of these, know who they are and how they link together. On exam day you do not want to have to remind yourself what these mean. • Think about the deadlines/dates. These are often very tight and can potentially be unrealistic and your role in the exam may be at act as a ‘critical friend’ to challenge decisions. Sometimes geography can be important – so perhaps draw a map of how far places are apart and the infrastructure. • Do not try to question spot in detail, but try to identify the main question themes. This will place you in a strong position on the day, regardless of whether the themes are subsequently reflected in two or three questions. • Think about the potential techniques that you are likely to need to use from earlier modules. These are often flagged up, so revise them. • Make sure you are familiar with the key individuals/bodies involved – you are likely to be writing to these people/bodies. What level of knowledge or expertise are they likely to have? Your answer should reflect this. During the exam read the EDM carefully – this might take you around 30 minutes (you should at this point not need to re-read the AM). Take a couple of minutes to estimate the likely weightings within each question to gauge the time required to complete each part (you will not get this spot on), but students who score highly allocate their time well between and within questions. Read and follow the question requirement

carefully. ‘Briefly assess’ means fewer marks than ‘critically evaluate’. Look out for the ‘and’ word, if a question asks you to do A and B then it wants you to do both. Consider as well, the likely weighting between the two components. Remember the bad fail rule. You need to score at least 25% in each question. The question left to the end often suffers, especially in three question exams. Make a good attempt at the TA, but remember that it will be worth circa 20% of the available marks. Do not spend too much time on this, if it is going nowhere – move on. Marks are often available for the assumptions/caveats behind the data supporting a decision, which can be accessed whether you TA has been completed or not. Remember who you are, what your role is and who you represent. Make sure that you use professional language and do not get involved in political decisions – your role will generally be around implementation. The final section often asks for conclusions and recommendations. This should be a straightforward section to complete, as it will be based on your earlier analyses, so do not leave this out. Remember that your recommendations should reflect your conclusions. Do not be afraid in your recommendations to say ‘no’ or ‘stop’, and remember that these should be consistent with the big picture (the overall context for the decision). The exam is four hours 30 minutes long so have a hearty breakfast. If you have to travel some distance to the exam centre it may well be best to stay overnight close to the exam venue to avoid any last-minute transport hiccups. Most importantly, when the exam is over, try not to dwell on it. Unlike other exams, where you can sometimes guess at whether it went well enough to pass or not, SCS is very hard to predict. PQ • Ian Chafer is a Senior Trainer at CIPFA PQ Magazine June 2018

ICAEW update PQ

From the page to the screen ACA Advanced Level exams are moving to computer. Here’s an update of progress to date


s PQ magazine goes to press, over 20,000 ACA Professional Level exams will have been taken on computer by ICAEW students. All Professional Level exams are now being taken in the new format, and Advanced Level exams begin their migration with Corporate Reporting and Strategic Business Management this July. With Case Study swiftly following twelve months later, it’s safe to say that by July 2019 the paperbased exam will be relegated to the history books alongside quills and parchment, or the dip pens and ledgers the first ICAEW students used to complete their exams in 1892. With subject passrates comparable to their paper-based equivalents, the results suggest that, with the usual hard work and by taking advantage of the resources offered by ICAEW in preparation of the exam, the success

of students hasn’t been altered by embracing a format more representative of the working life of PQs across the globe. Amongst those offered on, the top ranking resources in a recent survey included the exam-specific guidance webinars, the sample question banks, and the Professional and Advanced Level exam guide, which illustrates the exam software and its functionality, proving amongst the most useful for those preparing for their exams. Also, included within the exam guide are answers to students’ FAQs, including these helpful hints to master the exam software: • Make sure you use the practice software, standard keyboard shortcuts are not supported within the software. • Show your working-out within the software. • Remember to expand your cells – examiners will only mark what they can see and will not interrogate cells. • If you insert a row or column, interrupting

formula, you will need to reset your formula to include the new cells. • If you accidentally hit the ‘insert’ key on your keyboard and write over your previous answer, don’t worry. Copy your new text, hit the ‘undo’ button and then paste this to a new line. Remember to hit the ‘insert’ key to take off the insert function before typing again. • Use sensible abbreviations in place of currency symbols if they aren’t available, for example, P or GBP = ÂŁ, D or USD = $, or E or EUR = â‚Ź • If you are easily distracted by noise, you can use earplugs to help you concentrate in the exam room. • Remember, the exam is part of your professional career, so present it as you would to a report to a client. With the exception of an ‘Exhibits’ button added to the Corporate Reporting and Strategic Business Management exams, the software will remain the same for the Advanced Level as the Professional Level. With this in mind, ICAEW continue to recommend the 5-point checklist approach which can be found at to prepare for a computer-based exam, alongside your usual study to ensure success. ACA students should visit for all the guidance, support and exam resources you need for the Professional and Advanced Level exams. PQ









PQ ACCA Professional

The same – but different T

he core ACCA Professional exams are changing. The June 2018 sitting represents the last outing for P1 Governance Risk and Ethics, P2 Corporate Reporting and P3 Business Analysis. These three papers will be replaced with two new papers in the September 2018 sitting – Strategic Business Reporting (SBR) and Strategic Business Leader (SBL)

Tom Clendon of on SBR: The new SBR paper is almost the same as the old P2, but there are some crucial differences. Here are my top five: 1. No more preparation of group accounts: Group accounts will still be examined but not in the same way. The question that students traditionally did best in at P2 was the big 35-mark number-cruncher at Q1 to prepare a set of consolidated accounts. Well, under SBR this type of question will just not be set. Instead, there will be fewer marks for groups and you will only be asked to perform a couple of calculations, for example goodwill, or profit on disposal. However, you will also be required to explain the calculations. The discussion of the numbers will carry more marks than the numbers. As a result it is going to be so important to understand the principles behind consolidation adjustments as you will be writing about them. 2. No more complex group structures: In SBR, questions will not be set on vertical group structures and the consolidation of sub-subsidiaries. So no more indirect holding adjustments! 3. A greater emphasis on ethics: In SBR, we can expect up to 10 marks on ethics in every exam. Ethics will be examined in an applied way, in the context of a case study against the back drop of a number of different accounting issues. Marks will not be awarded for the repetition of the five pillars of the ethical code (and never have been). 4. Additional performance measures: This is an addition to the syllabus. You will be expected to know why companies produce measures such as EBITDA, free cash flow and their own KPIs. This topic

will be examined in every exam. 5. No more choice of questions: Every question in the SBR will be compulsory. After all, it can be argued that at work you are given a choice of what work you have to do! Marty Windle, the founder of, on SBL: The new SBL may look similar to P1 and P3 but there are some important differences. The five things you need to know about ACCA’s new Strategic Business Planning paper are: 1. Professional marks: In the old P1 and P3 exam, there were four professional marks. In the new SBL exam there will

Two experts in the field explain the changes to the core ACCA exams

Are you ready to go? Are you exam-ready?

be 20 marks allocated to professional skills. Each question will highlight one element of professional skills, so the question will outline the technical content required then include two marks for demonstrating professional skills, such as scepticism. So the exam will only have 80 marks for technical content and 20 marks for professional skils. If you are going to pass the SBL you must have a clear understanding of how these professional marks can be obtained. 2. Reduced emphasis on models and knowledge question: Those that have studied P1 and P3 will be familiar with the use of models and exam questions being asked on a specific model such as Porter’s 5 forces. These questions will no longer be included in the exam and you will no longer be asked questions asking you to apply a model. In the pilot paper, there were no models referenced in the examiner's answer. In addition, there will be no straight knowledge questions such as define or explain the role of the chairman. 3. No choice: In previous exams, there was a section B in which the students had some choice of optional questions. This is no longer the case and the students who sit the SBL exam will have to answer all the questions on the paper. 4. Practical focus: The SBL exam has adopted a more practical focus. The SBL paper is a move away from the academic style of the previous exams to a workplace focus. The exam aims to develop skills that can be used in the workplace. When answering SBL questions, your answer should reflect something that you would prepare at work, such as writing a report for a senior manager. Most questions will ask you to take the role of organisational leader or advisor to management. 5. Reading time and exam length: The length of the exam will be around 10-18 pages. The documents provided to candidates can be in a number of formats such as emails tables or spreadsheets. In order to effectively examine all this material the reading time has been increased from 15 minutes to one hour. PQ


You need 28

PQ Magazine June 2018

careers PQ

social media ROUND-UP We know how much you love your spreadsheets, and our @pqmagazine followers got tweeting when we started a discussion about the problems at Conviviality. We had picked up the story about Conviviality’s troubled wholesale division; the company admitted that human error and the complexity of spreadsheets were to blame for a £5m exaggeration of profits. Ryan Franklin said: “The problem is in modern business, they squeeze staff levels so staff have to look for quicker ways to do things. Automating a spreadsheet is perfect for this, but people don’t do the checks after. It’s about balance. It will always be human error over a spreadsheet.” Fiona McEwen simply said: “Sounds familiar”. Graham Elliot’s comment was: “Sense-check good; spreadsheets bad.” And David Lewis felt “the cost of an independent review of business critical #spreadsheets would be money well spent”. Finally, Rebecca Pope said “spreadsheet rages fo’sure here”. Our ‘PQ awards 2018 – the movie’ was a real hit with everyone, too. What’s not to like about a dance-off between two accountants? It’s not something you see every day! Vicky Taylor was definitely the winner (sorry David) and Lyndie Timms asked on LinkedIn: “Can HTFT do online dance classes too? Lol”. Well, over 1.6k people have had a look, so thanks if you were one. If not take a look at videos/1779184072142498/ PQ went big on the ACCA March results on social media, and put them all over our website. Nidsyyy got in touch to say: “Done and dusted with the course. After a year and a half I am an Affiliate. Thanks to PQ magazine for the wonderful articles and updates. Always found them useful.” No, thank you Nidsyyy. We also loved Lee Moore’s picture. He told us: “Final exam passed…fully qualified Accountant! Life changing! Never give up on your dreams. Over the moon!” Great balloons, Lee! PQ Magazine June 2018

Life at Deutsche Bank Harriet Baker, 24, has worked as an auditor for Deutsche Bank in London for three years. She has a Classics degree from the University of Cambridge. She recently picked up a brace of awards for coming first in two papers in the ICAEW exams What time does your alarm go off on a working day? 6.30am if I’m going to the gym or 7.15 otherwise. What’s the first thing you do when you get to your desk? Chat with my colleagues. What’s on your desk? Too much! Notepads, lipsticks, sticky notes, handcream, pens, mugs – I’m usually a tidy person but my desk is always crowded! What’s the best thing about where you work? The autonomy I get given to run my own parts of audits and the support for my development from my manager and the firm. Where’s your favourite place for lunch? Birley on London Wall – they make my favourite salad. What can you see when you sit at your desk? A lovely view of the river between Canary Wharf and the Isle of Dogs. Which websites are your

favourites and why? The usual – Instagram and Facebook, although I don’t really spend that much time on the internet. Which websites do you use for work? Just the DB network. How many hours a week do you spend in meetings? A lot of our work is done in meetings so probably 10-15 hours a week. What time do you leave the office? 6pm most days. How do you relax? I’m a big extrovert so going out with friends for me is relaxing – I do that about four times a week! Other than that, I go to the gym five times a week and also read and spend time at home with my family. What’s your favourite tipple? Red wine. How often do you take work

home? Never – study dominates my weekends, unfortunately. What is your favourite TV show? Silent Witness. Summer or winter? Summer. Pub or club? Club. Who is your hero? Margaret Anstee. She went to my school in Essex, then to Cambridge and became the first female UnderSecretary General of the UN. She spent her life committed to social development. If you had a time machine, where would you go? Most likely to the August and Julio-Claudian Roman period to see if all the scandalous stories are true. If you hadn’t chosen accountancy where might you be right now? I would have become a lawyer like my parents and a lot of my friends, and would be slaving away in a City law firm.

all of our people to progress their work and home commitments.

for an unsecured personal loan of £50,000. The government points to the decision to raise the minimum repayment threshold for student loans to £25,000, which it says will save 600,000 graduates up to £360 a year.

In brief Top companies for women All the Big 4 made it into The Times’ ‘Top 50 employers for women’ list. They joined the likes of MI5, HMRC, Morgan Stanley, BT and Royal Mail. KMPG said: “In 2017, we launched our Beliefs, Biases and Behaviours workshops, achieved gender targets in student recruitment and kicked off our ‘empowering parents’ to help those returning from parental leave.” EY said it was a #PressForProgress main sponsor of International Women’s Day, and Deloitte explained: “Real change requires more than initiatives. Our inclusive culture, underpinned by respect, enables

‘Eyewatering’ loan interest Graduate discontent could be on the rise after the government waved through a rise in their loan rate from September to 6.3%. The retail price index (RPI) stood at 3.3% in March (it was 3.1% in March 2017), and the loan rate is calculated as RPI plus 3%. Concern over what the students have called ‘eyewatering’ borrowing rates had led to speculation that ministers might freeze the rate for the time being. The 6.3% student loan rate compares with a 3.8% rate

Apprenticeship drop A year on from the introduction of the apprenticeship levy figures show that there has been a 31% decline in the takeup of apprenticeships. In the six months to January 2018, 206,100 people started training schemes, compared with 269,600 in the same period the previous year.

The PQ Book Club: books you should read The Little Book of Results by Jamie Smart (Capstone, £9.99) Do you ever feel that there’s so much clutter in your mind that you just can’t think straight? It happens to all of us, of course, but in this book the author explains the steps you can take to declutter, and thus improve the quality of all aspects of your life. Using transformational coaching techniques, examples,

exercises and metaphors, the author talks the reader through the three key changes they need to achieve the results they are after and inspire others to do the same. The reader will learn how to think more clearly, make better decisions and improve performance – achieving the ‘flow’ state attributed to the results of top-flight individuals. Clearer thinking removes the stress and anxiety from decision

making and allows you to focus on your goals. Rather than a step-by-step process, the reader is encouraged to form a deep understanding of themselves to awaken their inner potential and improve their innate abilities including better listening, more motivation and greater innovation and creativity. PQ rating 4/5 A gem 29

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There is a Japanese budgeting tradition invented more than 100 years ago that is proving a massive hit on social media – Kakeibo. A simple translation is ‘budgeting journal’, or ‘household account book’. It was invented by Hani Motoko, Japan’s first woman journalist. She saw Kakeibo as a way for housewives to look after their finances, documenting the difference spending categories and settings saving goals. This is a system that avoids spreadsheets and apps and is more about financial mindfulness. Some believe it appeals to millennials who like the idea of writing a journal.

EXAM CHEATS IN SWEDEN An exam invigilator was among three people recently arrested over an £830,000 exam scam to help students cheat the Swedish university entrance exam. In what was a family affair, a father and his

two sons allegedly used hidden earpieces to relay the answer to hundreds of students. Students could choose between a perfect or slightly less-than-perfect grades to avoid suspicion.


AI ‘COMMANDMENTS’ A new set of 10 ‘commandments’ to govern artificial intelligence and protect humankind has been issued by Church of England Bishop, the Right Rev Steven Croft. He wants the government and technology companies to consider the ethical implications of advances in AI. Among his commandments are: “The primary purpose of AI should be to enhance and augment rather than replace human labour and creativity.” Another says: “Governments should ensure that the best research and application of AI is directed towards the most urgent problems facing humanity.”

Top journalist and TV presenter Andrew Marr has joined the long list of people who think our tax system is too complex and punishes honest people. Writing in the Evening Standard recently he said: “Taxes should be three things: unavoidable, fair and dull.” He pointed out that Hong Kong’s tax system is widely admired and has a tax code that runs to fewer than 300 pages. Britain’s, he pointed out, runs to 17,000 pages. He wants a radical clearing-out of the whole tax system. Good luck with that, Andy…


NUMBER’S UP Experts have worked out the most expensive year in everyone’s life, and that is when you are 31. A wedding and honeymoon, buying a house and having a baby are the most likely events that help rack up the costs. According to the survey, to cover all these costs will set you back £43,000.

How would you like to be judged by what you wear to the exam hall? Apparently, that’s what happens to trainee barristers! For their mock courtroom assessments points are deducted for having too much shirt undone, short skirts for women, and colourful socks for men! So, what points do


you lose? It’s one point for loud socks, two points for skirts above the knee. The real no-no is showing your bra or wearing boots with the short skirt – that’s a three point deduction. We discover that at the University of the West of England trainees lose two points for unkempt hair and five points for wearing trainers.

The UK’s new sugar tax will hit Coca-Cola profits, the drinks maker has warned Wall Street. The tax, which came into effect on 6 April, affects Coca-Cola Classic – its bestselling British drink. And it adds about 8p to an ordinary can of Coke. However, researchers now say that a tax on sugary snacks would be a more effective public health measure. Researchers from Cambridge and Oxford University estimate that a 10% rise in chocolate, confectionery, cakes and biscuits would reduce purchases by about 7%. It was pointed out that sweet snacks provide twice as much sugar in diet as sugar-sweetened drinks.

’ WEV E Art therapy



It is official: dark chocolate, with its high levels of cocao, can improve stress levels, mood and memory (I know, we have said this before). A top team from the University of California found that the benefits kick in after eating

just half a standard size bar of 70% cocoa chocolate. One study scanned the brains of people who had eaten 48g of chocolate after 30 minutes and after two hours. It found increased activity in the fast highfrequency waves, which are thought to improve memory. You don’t need any more excuses…


We think you may need to doodle and colour your stress away, so have three great Art Therapy colouring books to give away this month. We are constantly being told that creating beautiful art can be a very positive and soothing experience. So if you have never given it a go, how do you know? Here’s a perfect chance to find out. Send your name and postal address to enter this giveaway. Head up your email ‘Art Therapy’ and send to It really is as easy as that.

Power of punctuation

We gave Sunday Times best-selling author Caroline Taggart’s book, The Accidental Apostrophe, a hefty four out of five in our PQ Book Club review. The book will help clarify the rules about writing in English that do exist, and points out the options where the choice is yours. Taggart goes back to basic, we are talking full stops, commas and even brackets here. It will also tell you the difference between your colon and semicolon. Send us your name and address to be entered for this lucky dip. Remember to head up your email ‘Accidental Apostrophe’ and send your email to

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 15 June. The main draw will take place on Monday 18 June 2018.


PQ Magazine June 2018



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PQ magazine, June 2018  

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

PQ magazine, June 2018  

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