ROBERT BRUCE It’s not just audits that demand a sceptical approach For years the call has been the same in the audit and corporate governance field: people need to bring more scepticism to their work. Audit firms run extensive internal courses to encourage scepticism at the heart of their auditing. But the idea never seems to have been nailed down in the right audit. It is interesting that in the US President Biden has announced his intention to reverse the trend of running down the tax authorities’ staff numbers and ability to investigate. A veteran of the US tax world cheered the move and called it ‘transformative’. ‘Information reporting, coupled with restoring enforcement efforts, is key to improve compliance’, he is reported as saying. ‘Audits alone will never do the trick’. Spot on. But there is also a need to stand back from the information and think. The astonishing scandal of the hundreds of UK subpostmasters wrongfully convicted of everything from theft to false accounting is an example on our doorsteps. The Post Office, which one would have thought to be benign, launched private prosecutions. At no point did scepticism come into it. Instead, the algorithms and the computer systems were assumed perfect and the employees dishonest. A moment’s thought and some conversations would have sparked doubts. It is not just auditors who err on the scepticism test. Robert Bruce is an award-winning writer on accountancy for The Times
The latest CIMA pass rates are in CIMA has released the latest batch of pass rates. Among the good news stories is the jump to 60% for the February Operational Case Study. This pass rate is well above the last three sittings – 53%, 47% and 57% respectively. Meanwhile, the Management Case Study pass rate was a healthy 71%, and the Strategic pass rate for February 2021 came in at 67%. When it comes to the OTs it
is the P papers that still seem to be the ones that present the hardest hurdle. Between May 2020 until the end of April 2021 some 52% of sitters passed the P2 paper, 53% P3 and 54% P1. By contrast the pass rates for
CIMA CASE STUDY PASS RATES Feb 21
Nov 20
Aug 20
May 20
Operational
60%
53%
47%
57%
Management
71%
74%
59%
67%
Strategic
67%
69%
56%
69%
Balancing the scorecard Top tutor Geoff Cordwell recently explained that in ACCA’s APM exam PQs need to be able to apply a performance management model to any scenario. So, having endured an England vs Poland World Cup qualifying game, he asked how England did using the Balanced Scorecard? He explained: “The financial perspective is a proxy for current performance and, well, England won 2-1 (sorry those from
the E1, E2 and E3 papers were 79%, 90% and 74%. Total CIMA OT exams passed between May 2020 until end of April 2021: E1 79%; E2 90%; E3 74%; F1 79%; F2 60%; F3 57%; P1 54%; P2 52%; P3 53%.
Poland). The internal business process perspective is a proxy for efficiency and England were certainly efficient. They kept the ball a lot conceding possession only rarely, but that possession seemed to be mainly across the back four and that didn’t help create chances to score.
Back to Basics for assets
“To be honest it was all a bit dull too, lacking ambition even. Innovation was the core of the problem. Invention and creative play was sadly lacking, and whilst England are effective qualifiers it is this lack of creativity that causes them to drop the ball in the finals that they often reach. “Customer satisfaction was only average, everyone likes to win, but being fussy I like my wins served with a bit more panache. Practice applying your performance models in your real world it will really help you in the APM exam.”
Accountancy can be simple if you know the basics. And PQ magazine’s Back to Basics free video series is here to help you master the fundamental topics of accountancy. Remember, if you don’t master the basic subjects they can come back to haunt you! This month FME Learn Online’s
Tom Clendon takes you through assets. He explains what helps define an asset – he says it is about ‘control’, and this word helps you understand when a resource becomes an asset. Read his accompanying article on page 23 of this issue, and to see the video go to: https://vimeo.com/545939340.
We also have Back to Basic videos on: Weighted Average Cost of Capital (WACC) https://vimeo. com/536755049. The Trail Balance https:// vimeo.com/500074449. Double Entry Bookkeeping https://vimeo.com/429252329 The Strategic Planning Process https://vimeo.com/437139421 Financial Maths (for ACCA AFM sitters) https://vimeo. com/446780185 • Check out all the free resources, including our test bank, at www.pqmagazine.com.
the trial balance, the basics of the P&L, and more. Ideal for Level 2 AAT students in particular, it is full of explanations and tasks to complete throughout the book. See: https://www.amazon.co.uk/ dp/B09463Q5T1.
nearly half of prospective students thought the UK was becoming a more attractive destination because of its vaccination distribution. This beats competitors such as the US, Canada and Germany. The introduction of the vaccine has made one in five prospective international students bring forward their plans to study abroad. UK universities will also be pleased to hear that 58% of all prospective students thought the UK was becoming more welcoming to students.
Pap Gen Z go for crypto over shares Too many Gen Z investors are more likely opt for high-risk cryptocurrencies over shares, according to new research. Charles Schwab UK, the stockbroker, has estimated that 51% of 18–37-yearolds hold cryptocurrencies. Nationwide also found that young people (16-24) with over £1,000 of savings were more likely to own cryptocurrencies – 28%, compared with 22% in the wider population.
In brief Pap New workbook for AATs Top AAT tutor Teresa Clarke has published ‘A Beginner’s Guide to Bookkeeping and Accounting Workbook’, which is available as an eBook for £1.89. It is free with Kindle Unlimited or for sale as a paperback for £3.49. Clarke explains the workbook is aimed at students who are new to their studies, and the contents include the cashbook, invoices and credit notes, recording transactions, double entry bookkeeping, ledger accounting, 6
Pap Jabs attract overseas students The success of the vaccination programme could help attract overseas students to the UK, a new survey says. Research from Quacquarelli Symonds (QS) found
PQ Magazine June 2021