PQ magazine, March 2024

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Incorporating NQ magazine

March 2024

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Crunching the numbers in the

CCAB’s 2024 REPORT 585,800 Number of students signed up to UK and Ireland professional accountancy bodies across the world


Share of students that were women across the globe

3.4% £97.7billion The estimated contribution of the profession to the UK’s GDP

Total estimated GDP contribution of profession in UK and Ireland

£11.7 billion Estimated total tax contribution of the profession to UK and Ireland

4,310 £4 billion Total23,900 number of students

The number of accountancy firms registered in the UK

Value of UK exported accounting services

globally becoming qualified members

911,800 Total number of workers employed by the profession in UK and Ireland All numbers relate to 2022

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March 2024

A note from the Editor We have a great issue for you this month, as always! We have ACCA tips for the March exams, tell you how to sign up for CIMA’s class of ’24 (season 1), and AAT explains it has finally got those AQ2022 assessments sorted. We also have a great story from Hong Kong about a ‘deepfake’ CFO, which lost a company £20m! Time is running out if you want to enter the PQ magazine awards. The deadline is 8 March, so please get your entry in. You can download the nomination form at tinyurl.com/5h25u6s5. We have decided you need to get out more! If you know anyone who wants to know more about accountancy as a career they should come along to our ‘Careers in Accountancy’ event at Queen Mary University of London on 28 February. Sign up for free at https://shorturl.at/istFS. Then there’s our joint evening with CASSL talking all things football finance. Our evening seminar ‘No accounting 4 the love of football’ takes place on 21 March. Again, you can sign up for free at https://shorturl.at/cikO0. And if you are looking for a FAB time then the Festival of Accounting & Bookkeeping could be right up your alley. That takes place on 13-14 March at the NEC in Brum. You can get your free tickets at https://www.fab.uk/2024-tickets. Graham Hambly, Editor and Publisher, PQ magazine News 4 ACCA survey Firms must get diversity right if they want to attract the best talent 5


Education and accountancy Accounting academia is not having an impact on the real world, says Professor Richard Murphy. AAT assessments Association has found ‘a resolution for the AQ2022 assessment issues’



New CIMA initiative Institute launches ‘Class of ’24’ for CGMA case study sitters Careers in Accountancy conference Your chance to speed-date the accountancy bodies

10 Wellbeing Happiness and confidence at all-time low among young workers, survey finds 12 Tech news ‘Deepfake’ scam costs Hong Kong finance company £20m Features, etc 14 Have your say Does it matter how long it takes to get qualified?; and Tim Robbins in The Shawshank Redemption is the screen’s top accountant. Plus our social media round-up


16 PQ Awards 2024 in focus The deadline for entries is getting closer, so you need to submit yours now if you want to take part in accountancy’s top awards night

19 International Women’s Day CIMA President Sarah Ghosh on what it’s like being a woman at the top of the accountancy profession

40 CIPFA spotlight To celebrate National Apprenticeship Week, we highlight how the apprenticeship route has helped two CIPFA students

20 Corporate govermance FRC revises UK corporate governance code in the hope of creating smarter regulation

42 Study advice For most students, exam failure is part of their study journey. So we’ve got some advice on dealing with exam setbacks

21 CIMA spotlight Setting out a study plan can save you from being overwhelmed by the size of the task ahead 22 A question for Tom Tom Clendon tackles cash flow statements, an important subject that often causes students problems 23 AAT level 2 Teresa Clarke explains how the receivables ledger control account and the payables ledger control account work 24 ACCA SBL exam The leadership failings that did for high street giant Wilko 25 ACCA spotlight Using the power of marginal gains to help you get that allimportant pass 26 IFA spotlight Introducing IFA Direct, a modular way of learning that will help you earn your practising certificate

43 Careers p22 Global CEO gender parity is a lifetime away; our Agony Aunt tackles another of you career dilemmas; and our Book Club review 44 Fun The lighter side of life – and accountancy The columnists Lisa Nelson If you want to get ahead then get a plan 4 Robert Bruce Why it’s time to take ESG seriously 6 Prem Sikka Post Office scandal shows corporate governance is flawed 8 Anna Kate Phelan Beware the deepfakes, they are everywhere now! 10 Eddie Herbert Carbon accounting adds value – and profit



27 Viewpoint Professor Richard Murphy argues it’s time UK universities change the way they teach accountancy – and he is not alone 29 ACCA exam tips We’ve got six pages of top tips for you – but remember to devise a revision plan too 36 AAT level 3 Karen Groves explains how to approach a question on disposal of capital assets 38 CCAB report What impact is the accountancy profession having on the UK and Irish economies? The CCAB has crunched the numbers

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Have a goal, make a plan

Apparently, 38% of people make New Year’s resolutions, but only 9% stick to them. Why is that? One reason might be what is known as ‘false hope syndrome’ – having unrealistic expectations about the level of difficulty and consequences of what you need to do to achieve your goal. This results in people often giving up at the first setback. New Year's resolutions also tend to be a wish rather than a goal – for example, “I would love to give up smoking.” This is a wish because, firstly, it’s a poorly defined goal and, secondly, it lacks the clarity needed to make it happen. In short, you need a plan. Creating a plan is a powerful way to achieve your goals. It helps clarify what you need to do and breaks down your larger ambition into a series of smaller, more manageable steps. This makes the task seem more achievable and provides you with a roadmap. Finally, a word about goals. Always state them in the positive, saying what you want as opposed to what you don’t want – for example, “I want to pass the exam,” not “I don’t want to fail”. Be careful to choose a goal you can control, for example, “study an extra 30 minutes per day” or “attempt at least three exam questions per week”. That’s something you can do and measure! Lisa Nelson is Dir ector of Learnin g at Kaplan

Wake-up call for employers

Employers beware – if you don’t have your diversity and inclusion policy upfront and central then you could miss out on the best accountancy talent. The latest ACCA Global Trends Survey 2024 found 64% of UK finance professionals prioritise diversity and inclusivity when choosing an employer. A further 76% of Gen Z employees rate diversity and inclusion as one of their top factors when job hunting. ACCA described this as a wakeup call for employers and said while diversity, equality and inclusion (DE&I) strategies are nothing new

they have risen in importance among finance talent. Turning to Gen Z talent, ACCA suggested that there is already a wealth of studies that show they

are more principled than their older counterparts. They told researchers that working in a diverse and inclusive environment was even more important to them than salary. Gemma Gathercole, Strategic Engagement Lead for England at ACCA, said: “The latest Global Talent Trends report sheds interesting light on the situation around the world and at home here in the UK. While the UK is outperforming in some areas, such as offering hybrid working and mental health support, it’s clear that DE&I policy is a growing factor of importance for finance professionals.”

Accountancy snooker star heads to Albania Hampshire accountancy firm senior Steven Hughes recently put his audit work on hold for a week to fly to Albania to participate in the biggest event on the world amateur snooker calendar. The 22-year-old PQ works at HWB chartered Accountants, and was hoping to pocket the World Snooker Federation (WSF) Championship title, which offers

direct qualification to the World Snooker Tour. However, Steven was drawn in a tough group and did not make the knockout stage in the 210-player competition. He joined HWB four-and-a-half years ago aged 17 straight from Barton Peveril College, Eastleigh, and has just the advanced level of the ACA exams to complete to

become fully qualified. Steven also has the distinction of being the youngest qualified referee for the English Partnership for Snooker and Billiards (EPSB).

CIMA extends mentoring scheme

As part of their ongoing commitment to developing future accounting and finance professionals, and meet the needs of Generation Z, AICPA & CIMA have extended their mentoring programme to Africa, Europe and Canada. Launched in the UK in 2022 to CIMA members and those who have completed the Chartered Global Management Accountant

(CGMA) exams, this extended programme will, says CIMA, “widen the opportunities to learn from experienced professionals and develop the knowledge, networks, skills, and confidence they need to succeed”. The expanded programme means that the mentoring relationships can now be global. Mentees will be paired with a

mentor located anywhere in the UK, Europe, Africa and Canada, and between them they will decide how frequently they want to connect either in person, through video conferencing or email. The initiative is an opportunity for those at the beginning of their careers to glean insight into developing a strategic mindset, honing essential skills and making informed decisions.

More than half of students (53%) surveyed said they have used generative AI to help them prepare assessments. The most common use is as an ‘AI private tutor’ (36%), helping to explain concepts.

caught up in a tough calculation. Remember, they are only ever worth two marks! Also note that it doesn’t pay to neglect the written elements in section C as they are normally worth 60% of the marks. And make sure you always fully explain your ideas. See all our ACCA March tips on page 29.

You will hear from Lord Bilimoria explaining why it pays to have ‘Boldness in Business’. Our keynote speaker in the afternoon is Lord Sikka, who writes a regular column for PQ magazine. He thinks accountants should do more than hide behind the numbers! There will also be a discussion on how ChatGPT will affect you and at the opportunities Making Tax Digital offers you. There’s lots more happening on the day – sign up at http://tinyurl. com/5yt2jkek.

In brief Time to provide AI to all Universities have a duty of care to provide AI tools for those who cannot afford them to aid learning and stem the gap between those using it and those without access, says a report from the Higher Education Policy Institute. The report said a ‘digital divide’ in AI use may be emerging, with male students, students from the most privileged backgrounds, and students of Asian ethnicity much more likely to have used generative AI than other students. 4

ACCA exam tips for PM If you are sitting ACCA PM exams this time around never be tempted to spend longer than five minutes on any section A question, according to BPP’s top team of tutors. Good time management is key here – you don’t want to get

The Accountant’s Odyssey There is still time, just, to sign up for our free online conference with London South Bank University.

PQ Magazine March 2024

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BDO wants 130 apprentices

Creating critical thinkers Accounting academia has not had the impact on the real world that it should have done, says Professor Richard Murphy (pictured). Too many courses, he ventures, take for granted the existing structures without critically reflecting on their origins and alternative approaches. The focus is also, far too often, on large quoted companies. Murphy fears that this might be because too much of the content of undergraduate accounting teaching has been dictated in

countries like the UK by the curriculum laid down by the accounting institutes. This means the emphasis on these courses has been deeply technical. Murphy says: “When it comes to tax, knowing how the benefit-in-kind on the use of a company car is calculated seems to be essential.” He revealed that a team of academics led by Professor Susan Smith at University College London are asking whether it is time to rewrite the accounting curriculum

We need your nominations

The deadline for nominations for the PQ magazine awards is almost here. You have until Friday 8 March to get your entry into us – so come on get nominating! For our 21st awards night we are going to Lio London on Leicester Square, and the date has been set for Monday

22 April. If you want to join the party you really do need to get nominating. There are 21 ‘PQs’ up for grabs, so lots of chances to win one of our coveted trophies. You can nominate an individual or even a whole team – we have trophies for PQ of the

used in UK Universities. What they seem to want to create is accountants who are capable of critical thinking. It is also something the professional bodies say they want, too. Read more about the work of this group on page 27. Year and Accountancy Team of the Year. Perhaps there is someone who has made a real difference to your accountancy journey and you want to acknowledge their help and guidance – well, we have a trophy for that, too! Check out all the details on page 16 of this issue, or download the nomination form at http://tinyurl. com/5e7z488j. Remember the deadline for entries is Friday 8 March, so it’s time to get moving.

BDO has opened applications for more than 130 apprentices across its UK offices. Applications for the apprenticeship programme, which is designed for students who have completed their A-level studies (or equivalent), are open until 24 March 2024. Successful candidates will start at BDO in September 2024. September will also see the firm welcome more than 650 people to its graduate trainee programme and more than 112 industrial placement students, who spend a year working at BDO in between their second and third year of university. As part of its commitment to increasing access to accountancy, BDO is also hiring for its summer work experience and insight programmes. Paul Eagland, Managing Partner at BDO said: “Having chosen not to go to university myself, I know firsthand the benefits an apprenticeship can bring and the lifelong skills you learn along the way.” See https://careers.bdo.co.uk/

Online education programme Offer a range of accountancy-led services to the general public in the UK when you gain an IFA practising certificate through IFA Direct. The flexible, relevant and accessible study units provide structured learning designed to complement busy lifestyles.

Ofqual Regulated

Find out more at ifa.org.uk/ifadirect or call our Education Team now on +44 (0)20 3567 5999

PQ Magazine March 2024


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ROBERT BRUCE It’s time to take ESG seriously What is given with one hand is taken away with another. The whole issue of accounting for sustainability often resembles one of those gazebos at a food market. One minute it is providing shelter from the storm, the next it is so shaken in the wind that everyone is rather unsteadily holding it upright. These are difficult times, partly down to organisations seeking to please politicians who increasingly see sustainability measures as making businesses uncompetitive. And so, in late January, you find the Financial Reporting Council issuing amendments to its corporate governance code that seem to ignore environmental, social and governance requirements. The traditional mantra is repeated, that we must not damage the competitiveness of companies by dropping a burden of regulation upon them. At the same time, the demographic curve suggests that the absolute opposite is what is required. Survey after survey shows that, for example, the majority of people between the ages of 25 and 34 value the idea that the company that they work for has a commitment to ESG as part of its culture. Meanwhile, Oxford Economics has released its latest survey of the value created by the UK and Ireland accountancy professions. Aside from findings showing its huge contributions to the economy through both GDP and tax, it underlines the massive value from showing ‘the impact of climate change on business models, risk strategies and financial statements’. Robert Br uce is an aw ard-winnin g wri ter on accountan cy for The Times

AAT gets assessment ‘sorted’ AAT has told PQ magazine that it has now “sorted a resolution for the AQ2022 assessment issues”. It added: “The final update has rectified the issue with loading InApplication questions on tasks 5 and 6 for MATS.” This means that the MATS preassessment checks will open Excel prior to the assessment starting and allow any pop-ups to be accepted and closed. This replaces the manual solution previously communicated. This improvement, says AAT, will reduce the occurrence of time out messages and provide a better experience for students. AAT’s CEO Sarah Beale (pictured) said: “I am really pleased that the service and experience relating to our MATS assessment has now

returning to a steady state. We know it has been a frustrating experience, and not the level the service our amazing students deserve, or we expect of ourselves. Team AAT has had this as their number-one focus and have delivered for our students and partners who have stood by us.

I think the resilience we’ve shown will stand us in good stead looking to the future. “I’d like to give a massive thanks on behalf of us all at AAT to our students and training providers for their support and understanding during this period.”

Looking for a FAB time?

Post Office workers and he will be on the main stage on Wednesday. One of the main topics at FAB will look at the intersection of accounting and artificial intelligence. According to Tom Herbert (pictured), and one of the speakers, 2024 is the year when AI in accounting transitions from hype to reality, and he thinks FAB is positioned as an essential platform for accountants to navigate this changing landscape. Sign up at https://www.fab. uk/2024-tickets.

There is still time to sign up for the Festival of Accounting and Business at the NEC Birmingham on 13 and 14 March. FAB is promising to be less of an event and more like a festival – it wants to be a real celebration of the profession. Among the speakers will be Dan Neidle, a tax campaigner and founder of Tax Policy Associates. Last year he won back millions for

Do you need our AAT scholarship? There are three scholarships still up for grabs for AAT students who want to get qualified but are struggling to pay for it all. PQ magazine and e-Careers believe it is time to fight back against the cost-of-living crisis and together are offering a scholarship each month that will pay for your

study for a whole level. Jack Hancock and Khatra Ali have already received their scholarship offers. And we have just notified our third recipient of their good news. To be in with a shout all you need to do is tell us why you should be awarded the free scholarship. Send

your entry to scholarships@ecareers.com, along with your full name and the level you want to study. Once entered you will be kept in the draw for all the available scholarships left, so if you don’t land it the first time there are still other chances to win.

Board declaration will come into effect from 1 January 2026, so it is some way off. FRC CEO Richard Moriarty said the revised code enhances transparency on internal controls, but in a way that is proportionate and minimises reporting burdens on businesses. See page 20 for more.

business or security valuations, and financial risk management, say our tipsters. Meanwhile, the two questions in section C will focus mainly on syllabus sections C, D and E. Remember that whichever of these topics does not appear in section C is most likely to appear in section B. Finally, questions in section A will often test your understanding of financial management and objectives as well as the economic environment and financial institutions topics.

See page 29 for more on this.

In brief Internal controls a priority The FRC’s latest revision of the UK corporate governance code hones in on internal controls. The FRC says boards should be monitoring company risk management and internal control framework and, at least annually, carrying out a review of its effectiveness. The code says boards need to explain through a declaration in their annual reports how they have done this and their ‘conclusions’. This new code expectation for the 6

Getting a pass at FM The commonly examined ACCA areas of FM’s section B are working capital management,

Promotions delayed for six months PwC has reportedly told around 100 graduates that they will have to spend an extra six months on the graduate scheme, according to the Financial Times. The reason being the reduction in business demand, challenging market conditions and headcount pressures at the firm. It only affects those who joined in October and November 2022. PQ Magazine March 2024



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Join the Class of ’24

Corporate governance disappears over the Horizon

The Post Office scandal once again shows that the UK corporate governance system is fundamentally flawed. Between 1999 and 2015, some 3,500 postmasters were prosecuted for fraud and false accounting. Over 900 were wrongly convicted. Many handed over their savings to escape prosecution. The recoveries boosted the bottom line and performance related pay of directors. Paula Vennells, CEO from 2012 to 2019, picked up £2.2m in bonuses. The company had 83 directors between 2000 and 2023, but none ever admitted that the system was faulty or objected to false prosecutions. Its nonexecutive directors headed audit, risk management and remuneration committees, but silence was the order of the day. They handed out bonuses to executive directors. Even senior managers were incentivised to secure convictions. Internal auditors knew that the Fujitsu-supplied computer system was faulty, but none ever went public about the flaws. Ernst & Young were external auditors of the Post Office from 1986 to 2018 and collected £1.8m in fees in the final two years of their term in office. Documents in the public domain show that EY were aware of the system’s problems but always issued an unqualified audit report. The government is the sole shareholder in the Post Office and appointed its directors. Over 20 ministers presided over the scandalous period. None spoke up. Almost every layer of corporate governance failed. Reform is long overdue. Prem Sikka is Em eritus Professor of Accountin g at the University of Essex

CIMA has launched the Class of ’24 for students looking to study for the CGMA case study exams in May and August 2024, at operational, management or strategic levels. Up for grabs is a free and highly interactive seven-week programme of study and exam support. Registration for the Class of ’24 (season 1) closes on 1 March 2024

for OCS; on 8 March for MCS; and 15 March for SCS. However, you should note CIMA says no late entrants will be able to participate in the programme. The package also includes a free resit if you score a ‘close fail’– between 72 and 79 points. The programme contains more than 15 hours of support material, including:

A study guide – thorough setby-step guidance to help you plan your learning effectively. • Recorded webcasts and articles, focusing on study techniques, time management and essential exam skills. • Dedicated one-to-one support should you require personalised study advice. • A dedicated Facebook group providing an opportunity to network with and learn from your peers and to interact with CIMA staff. • Certificate of Completion – CGMA’s Class of ’24. For more go to https://shorturl. at/bclA9. •

Profession by numbers The accountancy profession in Ireland and the UK contributed a total of £97.7 billion to the economies of the UK and Ireland, according to a new report commissioned by CCAB. Researchers at Oxford Economics found the profession supports over 910,000 jobs and pays £11.7 billion in taxes. UK businesses spent some £29.3 billion on accounting services in 2022, representing 1.3% of all business-to-business purchases. The report says that the accountancy profession in the

UK represents 3.4% of GDP and employs one in 40 of all people in work. In Ireland, the profession was equivalent to 4.1% of the national economy and employed one in every 30 people in work. CCAB chair Julia Penny (pictured) said: “Accountants are playing a key role in driving economic growth, helping millions of businesses to navigate global challenges and opportunities, as well as leading schemes to boost social mobility and access the profession.” For more on the report go to page 38.

You can’t expense that! ACCA student Cihan Dograyan has been removed from the student register and ordered to pay costs of £4,700 after being found guilty of dishonestly claiming expenses he was not entitled to. The case came about over personal expenses claimed over a 10 month period amounting to £14,545.05, which breached

his employer’s expenses policy. His employers claimed he had “a high level of expenses claims for personal spend that Mr Digrayan has claimed as business costs”. Among the expenses claimed were costs relating to football matches and duty-free purchases. There were also numerous claims for meals, public transport and exam

32,958 filing between 11pm and midnight. The penalties for filing a tax return late include an initial £100 fixed penalty, which applies even if there is no tax to pay or if the tax due is paid on time.

Buckinghamshire, was jailed for seven-and-a-half years in April 2019 for ‘missing trader’ VAT fraud. If Bond does not pay back £1,839,317 by 18 April 2024 he will serve an extra eight years in prison and will still owe the money when he is eventually released.

fees, which were all improperly claimed. Dograyan was dismissed for gross misconduct on 24 February 2020. When corresponding with the ACCA he said: “Of course this does not match with integrity principles and professional behaviour but I love my job and I want to keep my ACCA student status, and I want to get my ACCA accreditation.” The case may be subject to appeal.

Tax briefs Over a million miss SA deadline A record-breaking 11.5 million UK taxpayers submitted their Self Assessment tax return by the deadline for 2022/23, HMRC has revealed. However, with 12.1 million taxpayers expected to file a tax return and pay the tax they owe, that leaves an estimated 1.1 million taxpayers who missed the deadline – that’s 9% of the total. Some 778,068 taxpayers filed on the last day (31 January), with 8

Gold bars sold to repay VAT fraud Gold bars, luxury watches and rare coins will be auctioned off to recover public money stolen in a VAT fraud. Anthony Bond, from Great Missenden,

The true cost of tax reliefs Despite the UK government providing tax reliefs worth billions of pounds each year to encourage economic growth, HMRC and HM Treasury are not monitoring or

evaluating all these reliefs closely enough to understand their true cost and benefit, says a National Audit Office report. As of December 2023, the UK has 341 ‘non-structural’ tax reliefs intended to achieve certain social or economic objectives. The NAO report said that HMRC and HMT have made a number of important improvements to how they administer, evaluate and report on tax reliefs, but the lack of oversight of the true costs of some tax breaks was costing billions of pounds. PQ Magazine March 2024

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Speed dating the accountancy bodies Independence Ever thought about speed dating with the accountancy bodies? Well, you will get the chance at the Careers in Accountancy free halfday conference on Wednesday 28 February. We have asked all the accountancy bodies to explain why you should join them – what is the difference between ACCA and CIMA? ACCA’s Gemma Gathercole will be looking at what the future of accountancy looks like, and Karen Young from Hays will take a look at the current state of the jobs market

and what employers want. CIMA’s Antony Fletcher will be talking all about apprenticeships and we have a group of real-life PQs explaining what life is like as a trainee accountant. PQ magazine editor Graham Hambly said: “We believe that

everyone should have an equal chance to access a career in accountancy. We want to help to deliver real change, and will be explaining everything from apprenticeships, degrees (including Flying Start), and all the professional qualifications.” Come and join us at The Octagon at Queen Mary University of London. To find out more and sign up to the day go to our Eventbrite page: https://shorturl.at/istFS. A big thank you goes to our supporters: ACCA, CIMA, IFA and Hays Accountancy & Finance.

Time to reform Apprenticeship Levy?

Over a third of mid-sized businesses in the UK would like to hire apprentices but do not have sufficient resources or know-how to do so, according to new data from BDO. BDO’s bi-monthly survey of more than 500 mid-sized businesses reveals that almost a third (32%) of respondents want to hire more apprentices but the costs associated are too high, with the same number wanting more guidance on how to

PQ Magazine March 2024

go about it. The same number of respondents (32%) want to see support from a future government to resolve staff or skills shortages, including reform

to the apprenticeship levy. This came as a higher priority than tax breaks and regulatory changes, demonstrating its importance to the businesses that sit at the heart of the UK’s economy. Fewer than one in five respondents claim to regularly hire apprentices through the Apprenticeship Levy, with high costs (32%) and a lack of guidance (32%) cited as the main barriers to doing so.

rules broken hundreds of times

The Big 4 accountancy firms in the US have admitted they broke the rules to protect the independence of their audit work hundreds of times, following the introduction of new regulations. Regulators in the US now require both staff and their immediate families to disclose all possible conflicts of interest and to make financial disclosures of their investments. The rules also ban employment and financial relationships with audit clients that could affect independence at the firms. In mid-January PwC revealed it had identified 129 breaches of the rules affecting 79 clients. However, it appears it miscounted, as independent inspectors found one more! Deloitte admitted late last year to almost identical numbers – 129 breaches with 78 clients in 2022 and 107 breaches with 53 clients in 2023.


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ANNA KATE PHELAN Beware the deepfake scam

We live in strange times, where ‘disruption’ is heralded as a positive above all else. However, without the proper regulation, technological advances can quickly go from disruptive to downright disturbing. Concerns around deepfake technology have emerged in the headlines as of late with X (formerly Twitter) having to block searches of ‘Taylor Swift’ due to a proliferation of salacious fake images of the pop star. A deepfake can be defined as an artificial image or video derived from a particular type of machine learning called deep learning. These fake images/videos can be very convincing and pose a particularly nasty threat to both cybersecurity and to society as a whole. While fake images have the potential to assault our sense of decency and subvert the traditional paradigm of consent, they can also be used as supporting materials for wellestablished frauds such as phishing. A multinational recently lost £20m to fraud at its Hong Kong branch. A finance employee was duped by a digitally recreated version of the company’s CFO on a video conference call. To cement the con, there were other ‘team members’ on the call. The fraud was so effective that the issue was only detected six days later when the employee convened with other team members. As with all emerging technology, regulators around the globe are struggling to keep pace. In the meantime, be careful out there! Ann a Kat e Phelan is Head of Produ ct at Eintech

Happiness and confidence at all time low

One in five young people in the UK have missed school or work in the past year due to their mental health, according to new research by the Prince’s Trust. The Prince’s Trust NatWest Youth Index 2024 found 18% of young people report that a mental health issue has stopped them applying for a job, and one in

has had a negative impact on their mental health, with over a third reporting that they always or often feel down or depressed (36%). More than a third (35%) of young people are worried their mental health will stop them achieving their career ambitions. Despite this, most young people still report that having a job is good for their mental health (62%), enables them to feel confident about their future (68%) and gives them a sense of purpose in life (65%).

AAT Training Providers Awards 2024 shortlist

The AAT Training Provider Awards are back, and the winners will be announced at a gala dinner in Nottingham on 14 March. PQ magazine editor Graham Hambly will be there to report on the evening. But who made the shortlists? The four trainees up for AAT Student of the Year are Katie Robinson, Natalie Zoric, Luke Carter and Benjamin Mortiboy.

The hotly contested Tutor of the Year shortlist is Karen Groves, e-Careers, Harriet Taylor, Coleg Gwent City of Newport Campus, Will Boardman, Training Link, and Faye Hill, Chesterfield College. On the Distance Learning Training Provider of the Year list are e-Careers, Eagle Education and Training, First Intuition Distance Learning, Premier Training, and Training Link.

You can find the rest of the shortlists on www.pqmagazine. com. Just click on the News button and scroll down to 05/02/2024.

For the love of football PQ magazine has joined forces with ACA student society CASSL to offer you a free evening in March talking about all things football finance (no VAR is operating on the night!). Our seminar ‘No accounting 4 the love of Football’ takes place at the Crypt on the Green, in London, and kick off is 6.30pm on Thursday 21 March. But you will need to sign up for your free ticket if you want to get in. Sign up at: https://shorturl.at/ cikO0.

EY quits as Asda auditor EY has told supermarket giant Asda it is quitting as its auditor. It appears EY told Asda of its decision last summer, but there has been no wide public disclosure of the news until the Daily Telegraph broke the story. It has been reported that EY said its exit was related to the acquisition of Euro Garages and the timetable requirements of the audit. The report in the Daily Telegraph also claimed that a senior partner at the Big 4 firm had a romantic relationship with the Asda’s billionaire CEO, Mohsin Issa. 10

eight say it stopped them attending an interview. The report discovered that 40% of 16 to 25-year-olds have experienced a mental health problem, while a fifth (21%) report their mental health has got worse in the past year. Over half (54%) of young people say the cost-of-living crisis and pandemic

The line-up on the night includes Kieran Maguire of the Price of Football podcast fame, Kunal Sajdeh, manager in the Deloitte Sports Business Group and subeditor of the 2024 Deloitte Football Money League, and sporting legal expert Partick Way KC. A big thank you goes to HMRC Enquires, Investigations and Powers magazine, ACCA and ICAEW for supporting this event. And, of course, our partners in this event, CASSL.

The partner in question has now left the firm, and it was confirmed she never carried out any work relating the Asda’s audit. We can’t reach net zero targets! Some seven in 10 people say they are not confident that the UK will meet its 2050 net zero target, according to a new survey from Deloitte. The research found that younger people are significantly more likely than older people to believe the goal will be met (although still pessimistic overall). A third of 16-34-yearolds (33%) surveyed are confident about reaching net zero targets, compared with just 13% of the 55-64 age group. Jayson Hadley, UK head of government

and public services at Deloitte, said: “Our survey outlined two conclusions about the general public mood on achieving net zero: it’s a priority, but not something they expect will massively change their lifestyles.” KPMG’s UK profits down but partner pay is up KPMG in the UK has recorded another year of strong revenue growth of 9% to £2.96 billion. The firm’s audit practice grew 19%, driven it says by expanded reporting requirements. Many national newspapers reported that although profits dropped 20% and the firm had to pay out millions of pounds in fines, UK partners still enjoyed a pay rise. Equity partners received a 4% rise receiving on average £786,000. PQ Magazine March 2024

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PQ tech the news

EDDIE HERBERT Carbon accounting adds value – and profit As climate change becomes a top priority for governments and companies worldwide, more accountants and bookkeepers are stepping up to offer carbon accounting services to their clients. With new regulations mandating disclosure of greenhouse gas (GHG) emissions, the ability to help clients measure, report and verify carbon footprints is becoming an essential skill set for accountancy professionals, which can also create a new income stream. By partnering with organisations such as Net Zero Now for carbon accounting services, accountants can help clients understand their climate impacts, identify emission reduction opportunities, and comply with evolving carbon reporting requirements. Core services include conducting GHG inventories, calculating Scope 1, 2 and 3 emissions and tracking performance against reduction targets. As trusted advisors with extensive financial and operational insights, accountants and bookkeepers are wellpositioned to help clients accurately measure and reduce these emissions. Offering carbon accounting demonstrates an accountant’s commitment to their clients’ success in a low-carbon future. As climate consciousness grows, this emerging service allows accountants to showcase a new area of expertise. With demand increasing rapidly, carbon accounting know-how promises to become a key competitive advantage for forwardlooking accounting practices. At Net Zero Now we can partner on carbon accounting services, so you can provide them to clients while having a trusted expert on your team. We can work together to help clients succeed in a low-carbon future. Eddie Herbert, Comm ercial Account Executive, Net Zero Now

Beware the deepfake CFO

A multinational company recently lost £20 million in a highly sophisticated deepfake scam after a finance employee at its Hong Kong branch was fooled into paying out the money. Police confirmed the incident involved a digitally recreated version of the CFO ordering money transfers in a video conference call. The employee was fooled after the CFO was joined by what looked like other members of the team. Senior superintendent Baron Chan Shun-ching told broadcaster RTHK: “In the multi-person video

conference, it turns out that everyone he saw was fake.” It appears the scammers used publicly available conference material from the past and then

added voices using deep fake technology. They also used email and WhatsApp to lend credence to the con. Believing everyone on the call was real, the finance worker paid out HK$200 million – about £20 million, the police said. It was only six days later that the truth came out, when the finance clerk spoke to the company’s HQ. Chan said that these sorts of crimes are getting more common and it recently made 6 arrests six arrests in connection with such scams.

Google invests £800m in UK data centre Google has said it will be investing $1 billion (£800m) to create its first UK data centre. Work has already begun on a 33-acre site at Waltham Cross in Hertfordshire. It is set for completion in 2025. This latest investment follows Microsoft’s announcement late last year that it would be ploughing some £2.5 billion into its UK artificial intelligence data centres over the next three years. The UK government said the investments are testament to the fact that the UK is a centre of excellence in technology and

has huge potential for growth. In a statement, Alphabet’s CFO Ruth Porate said: “The new data centre will help meet the growing demand for AI and cloud services and bring

crucial computing capacity to businesses across the UK while creating construction and technical jobs.” Google currently employs 7,000 people in Britain.

Food delivery by Pixie

The University of Edinburgh is conducting trials to deliver food to its students using autonomous vehicles. Known as Pixie, these carts travel around campus (on private roads), with students ordering food or drinks via an app. The project is a collaboration between the university and Kings

Building catering service, and it is hoped the trials will show the potential of using such vehicles in airports and on NHS premises. The creator of Pixie is university student Ebtehal Alotaibi. She is now on Pixie 2.0, and her robots can navigate traffic lights and pedestrian

crossings. The robots are electric, autonomous and equipped with LED rays to help sanitise food cartons. Alotaibi believes these features will help address any concerns customers may have about hygiene, cost and greenhouse emissions. She is hoping that if successful on campus, then Pixconvey can start trails on the roads outside.

verification. Its technology at the time could age someone aged between 13-24 to within 1.5 years. All those deemed to be 25 or under were still made to show ID.

support companies looking to scale their companies through AI. To help with this it has expanded its free online AI training courses to 18 languages. Adrian Brown, from the Centre for Public Impact, who is working with Google, said: “Research shows that the benefits of AI could exacerbate existing inequalities – especially in terms of economic security and employment.” He felt the new initiative will help develop skills ensuring “no one is left behind”.

US bans AI-generated calls A US federal agency has made ‘robocalls’ from AI-generated voices illegal. Announcing the move, the Federal Communications Commission (FCC) said the ban was effective immediately. The move means that states can now pursue the bad actors behind the calls. FCC’s Jessica Rosenworcel said: “Bad actors are using AI-generated voices in unsolicited robocalls to extort vulnerable family members, imitate celebrities and misinform voters.”

Tech briefs AI to be used to age shoppers Artificial intelligence will soon be used by UK supermarkets to automatically scan shoppers’ faces to determine their age at selfservice tills. This news comes after the Home Office confirmed it looking to allow software to determine whether a buyer is over 18 and can buy alcohol. Successful UK trials took place in 2021 using AI from Yoti, a company that specialises in digital identity 12

New £25m AI training fund Google has pledged around £25 million to help Europeans learn how to use AI. The tech giant said the monies would be made available through social enterprises and not-for-profit organisations. Google also plans to run a series of ‘growth academies’ to help

PQ Magazine March 2024

Careers in Accountancy Your career, your future A Queen Mary University of London conference. Brought to you in association with PQ magazine

Making decisions about your future can be daunting, so we are here to give you an insight into whether accounting is the right career for you. By joining us on Wednesday 28 February 2024 you should leave with a better understanding of all the options available to you.

An event for sixth-formers, graduates at all levels and disciplines, and PQs

Find out • Which accountancy qualification is right for you? • Is an Apprenticeship the way forward? • The wide-ranging career paths open to you, and your earning potential. • What a day in the life of an accountant looks like. To find out more and sign up to the day go to our Eventbrite page: https://shorturl.at/istFS Careers in Accountancy – your career, your future Date: Wednesday 28 February 2024 Venue: The Octagon, Queen Mary University of London, 327 Mile End Road, Bethnal Green, London E1 4NS Time: 9.30am – 2pm, light refreshments provided, come early and visit the stands

email graham@pqmagazine.com

Does it matter how long it takes?

I was initially shocked at the number of students who are still studying after five years (PQ magazine, cover story, February ’24). But then I thought, does it really matter how long it takes you as long as you get to where you want to go? I have just finished AAT and am now starting on the next phase of my journey with ACCA. I plan to finish ACCA in three years, but it will mean I will have spent more than six years getting qualified. However, I didn’t go to university and have no debts. I have to admit work pressures and ‘home stuff’ have often got

in the way, and I have stopped studying a few times so I can concentrate on other things that matter more. I also think people who have been tested all their lives

sometimes need to take a break from the cycle of study and exams. Once rested they can come back refreshed and ready for the tests ahead. Accountancy exams are tough, but that’s how it should be. If they were easy they wouldn’t be worth having! The bodies have also moved with the times and now offer some great free resources. I couldn’t have done without my AAT green light tests, and the ACCA Study Hub and Practice Platform are a godsend. OK, there may be some bumps waiting ahead of me, but I will get there in the end. I don’t think it matters how long it takes, everyone’s journey is different. Name and email address supplied

Our star lett er wri ter wins a fantastic ‘I love PQ’ mug! Unbelievable!

I couldn’t believe your story about the student sending pictures of his genitalia to the ACCA (PQ, February ’24, page 6)! The student was obviously employed as they asked for their money to be refunded to his company, but I do worry that they were not well. Submitting inaccurate exam records is one thing, but then to totally lose it like they did seems a massive step change. I was also wondering about the fine. It was £7,600, which I am sure in Nepal is a lot of money – it’s a lot for me living in the UK! Does the ACCA expect to get paid this? I don’t see what the incentive is for the ex-student to pay. Name and email address supplied

Producers not in my top 10

I must disagree with your letter writer last month – The Producers can’t go down as the best film featuring accountants (PQ, February ’24). The ICAEW has a list of the top 10 accountants in film and TV and it is nowhere to be found. Its number one is Loretta Castorini (Cher) in Moonstruck, closely followed by Christian Wolff (Ben

Affleck) in The Accountant. Then you have the one for me – Andy Dufresne (Tim Robbins) in The Shawshank Redemption. If you move on to TV you have Skyler White (Anna Gunn) in Breaking Bad and Ben Wyatt (Adam Scott) in Parks and Recreation. Every one of these is better than The Producers, surely! Name and email address supplied

Should I be worried? I am someone who would like a green job, so was surprised to read that PwC thinks there is a huge skills gap. PwC suggested that of the 17,000 jobs, graduates would only be able to fill 900. Come on, universities, you need to up your game and make us more employable. Name and email address supplied

Facebook loves to send you your memories – perhaps some we might like to forget! However, Premier Training’s Sam Hannigan was recently sent a ‘nice memory’, of her winning the PQ magazine award for Lecturer of the Year from 10 years ago. The story made her local newspaper and she’s pictured with Walker Dendle’s Christine Calver and the night’s entertainment, comedian Chris Martin.

She can’t believe it was 10 years ago, but when she put it on Facebook she got some great comments from former students telling her what a great teacher she is. There is still time to get yourself some memories from the PQ magazine awards. The deadline for entries is Friday 8 March. So, get online and download the nomination form at http://tinyurl.com/5h25u6s5 Don’t forget that we often post stories first on the website, so make sure you bookmark www.pqmagazine.com. We also have a regular online spot for PQ’s ‘job of the week’. One of the recent ones was for an EMEA payroll analyst. Homeworking was available and the salary was a cool £40,000 to £50,000. There is also our course finder section, where we list the colleges and tutors we think do a good job. We have AAT, ACCA and CIMA covered. And we have lots of videos, too. Check out our Back to Basics series. One of the more popular ones is Tom Clendon’s on Double Entry Bookkeeping. He also has one on Assets. Again, these can all be found on our website.

PQ Magazin e PO Box 75983, London E11 9GS | Phone : 07765 386489 | Em ail: graham@pqmagazine.com Website: www.pqmagazine.com | Editor/publisher: Graham Hamb ly graham@pqmagazine.com | Associate editor: Adam Riches | Art editor: Tim Parker Contributors: Robert Br uce, Prem Sikka, Lisa Nelson, Ann a Kat e Phelan, Tony Kelly, Phil Gamm on, Edward Neth erton, Francesca Cullaney | Subscriptions: subscriptions@pqmagazine.com | Origination services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email admin@pqm agazine.com

Published by PQ Publishing Ltd © PQ Publishing 2024

PQ PQ awards 2024

LASTORDERS! It really is time to get your nominations in for the PQ magazine awards 2024! The deadline is Friday 8 March 2024


he deadline for entries to the 21st PQ magazine awards is fast approaching, and we really need those nominations if you want to be among the winners this year. Our judges are ready, the venue is rolling out the red carpet, and we are shining the brandnew PQ trophies, so it’s time to get on it! We have a change of venue this year, and all those shortlisted will be off to one of the trendiest clubs in the capital – Lio London in Coventry Street. You will need to put Monday 22 April in your diary, because that is when the coolest accountancy awards will be happening. But don’t get ahead of yourself in all the excitement, it being our 21st awards night and all. Before all that you need to get writing – we need 500 words on why you/your nominee should be on our shortlist. So, don’t delay just download the nomination form at http://tinyurl.com/5e7z488j. Or you can

simply go to our website and click on the ‘PQ AWARDS’ button on the home page and find the form there. When you are ready send your completed nomination form to us at awards@ pqmagazine.com and we will make sure the judges see it. If you want to post it to us then send it to: The Editor, PQ magazine, PO Box 75983, London E11 9GS. You can send your entry as a simple Word document to the email address above – you don’t have to use the form. But please be clear about which category you are entering. And if you feel 500 words is not enough then attach any supporting material with your entry and we will make sure the judges see everything that is relevant. Remember, you can’t win it if you aren’t in it, so get your entries to us by Friday 8 March 2024.

DISTANCELEARNER Lillian Okolie, pictured with Open Tuition’s John Mofatt, is our reigning Distance Learning Student of the Year. Our 2022 winner was former firefighter Hanni Owens (top right) and the 2021 winner was Demel Johnson.





PQ Magazine March 2024



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PQ International Women’s Day PQ

Building an inclusive profession

International Women’s Day takes place on 8 March 2024, and it has the theme ‘inspire inclusion’. So, we asked CIMA’s 90th – and fourth female – President, Sarah Ghosh, what it is like to be a woman at the top of the accountancy profession

Is accountancy a good profession for women? Absolutely, yes it is. There are fantastic opportunities to build a rewarding and fulfilling career anywhere in the world. Our skills are more in demand than ever, and although there is still work to be done to be more inclusive, the profession has made great progress in raising the profile of female leaders and increasing opportunities for women at all levels.

diversity at the top stalling? Business, like the accounting profession, has made great progress in recent years in addressing DEI issues, and we should celebrate that, but there remains work to do. Women offer different experiences and perspectives which contribute to managing risks, seizing opportunities and making better decisions. Mckinsey research shows that companies in the top quartile for gender diversity are 25% more likely to have above average financial returns than companies in the bottom quartile.

What would be your advice to other women just starting out in the accountancy profession? Seize every opportunity to learn and seek out mentors to guide you on your journey. If you have the aptitude and are willing to work smartly there is no limit to what you can achieve. Have you ever encountered misogynistic/ chauvinistic behaviour from fellow professionals? How did you deal with it? There will be times in all our careers where doing the right thing will be difficult, and we have all faced these moments. True leadership requires courage, and that can mean going against the tide. My advice is to find your voice and call out poor behaviours, not only for yourself but also for those that will follow you. What progress have you seen on gender equality in your working life? I have seen tremendous progress during my career. Having worked across a number of industries and sectors, I have witnessed the

impact of initiatives that have focused on increasing representation, not only on the dimension of gender, but also other dimensions that are equally important as part of the wider DEI (diversity, equality and inclusion) agenda. It has also been encouraging to experience more female leaders as role models in organisations that I have worked with, as this continues to have a positive impact on the profession and inspires inclusion. EY recently reported there are no women in a senior board position at 26% of listed financial services organisations in the UK. Is the drive for

Up close and personal First job: Systems engineer.

What are you currently reading: Two books, one fiction, and one non fiction – Beyond Black by Hilary Mantel, and Belonging by Kathryn Jacob, Sue Unerman and Mark Edwards. Favourite podcast: BBC Inside Science. What music are you listening to right now: I read an article about Enya which prompted me to listen to some of her music. Favourite TV show: Any drama series – last one I enjoyed was Vigil. When was the last time you laughed out loud? In Kuala Lumpur, doing the Prosperity Toss with guests at the CIMA Presidential dinner, to celebrate the Chinese New Year. Lots of fun, with food going everywhere! How do you chill? I like to go for a run. What is your claim to fame? I was honoured to be named among the 2023 Top 50 Women in Accounting for my work on improving inclusion in accounting and finance.

What women inspire you the most and why? I am most inspired by women who have the ability to influence and inspire others to achieve their best. They demonstrate resilience, empathy and leadership qualities that others can learn from and emulate. [President of the European Central Bank] Christine Lagarde is a great example. What does International Women’s Day mean to you and the profession? For more than a century, people around the world have honoured International Women’s Day to celebrate the social, cultural, economic and political accomplishments of women, and with the campaign theme this year of ‘Inspire Inclusion’ we must continue to promote the value of women’s inclusion. What is your International Women’s Day message? International Women’s Day is a way to celebrate the contributions and achievements women have made in accounting, finance and beyond, over the course of history and today. We must also continue to raise the profile of what we are doing to promote women’s inclusion, for those that follow us in the profession. Finally, what will be the biggest challenges for the generation of women behind you? I would like to see a higher profile for women in leadership positions, and that means we as a profession should be doing more to highlight successes in this area. Seeing women in these positions can help inspire future generations and give them the confidence and reassurance to succeed in their own careers.


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PQ Magazine March 2024



PQ corporate governance

Revising the code FRC revises UK corporate governance code in the hope of creating smarter regulation


he Financial Reporting Council (FRC) has announced what it says are important revisions to the UK Corporate Governance Code (the Code), that will “enhance transparency and accountability of UK plc and help support the growth and competitiveness of the UK and its attractiveness as a place to invest”. In a move aimed at promoting smarter regulation, the FRC has kept changes to the Code to “the minimum that are necessary”. The FRC emphasised it is conscious that the expectations for effective governance must be targeted and proportionate. The FRC has prioritised revisions to the Code in one significant area – internal controls. As signalled on 7 November, it has dropped its earlier proposals for revisions to the Code related to the role of audit committees on environmental, social and governance issues; expanding diversity and inclusion expectations; over-boarding provisions; and expectations on Committee Chairs’ engagement with shareholders. The existing expectations on internal controls in the Code remain. Namely that the

Board should monitor the company’s risk management and internal control framework and, at least annually, carry out a review of its effectiveness. The existing Code also includes the provision that monitoring and review should cover all material controls, including financial, operational, reporting and compliance controls. The main substantive change the FRC is now

making is asking Boards to explain through a declaration in their Annual Reports how they have done this and their conclusions. FRC stressed it is for a Board to determine what should comprise its material internal controls. It is mindful that the needs of each business may vary and that the level of maturity of non-financial controls for some businesses may not be, or need to be, as mature as for their financial controls. FRC said: “It is for the Board to determine what level of maturity is right for its business and their own levels of required assurance in relation to the effectiveness of these controls.” The new Code expectation for the Board declaration will come into effect from 1 January 2026, one year after the rest of the updated Code comes into effect, from 1 January 2025. Commenting on the new Code, FRC CEO Richard Moriarty (pictured) said: “A global reputation for high standards of corporate governance is a competitive advantage for UK plc and our revised Code helps this by enhancing transparency on internal controls, but in a way that is proportionate and minimises reporting burdens on businesses. “The small, but important, change to the expectations on internal controls will better support Boards asking the right questions at the right time to help them gain the level of the assurance they require and to be able to demonstrate good governance to investors to and other stakeholders.”

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PQ Magazine March 2024

PQ CIMA spotlight PQ

Avoid hitting the wall Nasheen Wuisman explains how setting out a study plan can save you from being overwhelmed by the size of the task ahead

weigh on you mind, giving you the confidence to tackle them. Make sure this plan includes some down time. Expecting every waking moment to be spent studying will de-motivate you, is completely unrealistic, unhealthy and unnecessary. The occasional night off built into your plan is a necessity and try to savour them, to keep you in the right frame of mind to study.

The power of the book, as illustrated by Jorge Mendez Blake’s art installation, The Castle. The book in question is El Castillo by Franz Kafka


here may be times after you have made the commitment to register with CIMA and start studying that you may even wonder whether this step was the right step for you. The prospect of being CGMA qualified at this point may just be a dream. Study is a challenge, yet you still put yourself through it. Why put yourself through it? Because it gives you purpose – it gives you goals to work towards, and these goals are very important to us to feel fulfilled. The achievement will give you self-esteem and build your confidence, it creates opportunities and gives you prospects that you never had before. It allows you to dream and so… you work hard for it!

Does it come easy? For some people yes, study comes quite easy, for others not so much – either way, everyone faces the monumental challenge of trying to get the balance right. Life, work, family, hobbies, holidays – and now study. To achieve what you have set out to it is important to be self-aware and make sure you PQ Magazine March 2024

focus on your emotional health. Your emotions can impact the way you learn and how efficient your study time is. We all face lack of motivation and find ourselves procrastinating and these create hurdles. Do not cloud your head When studying for an exam, the scale of the task can end up clouding your thoughts, and it can start to feel insurmountable – an understandable emotional response. Being too focused on the end goal is what is overwhelming, and it is hard to see your progression in the meantime. Break your big goal down into smaller goals. Set yourself frequent, shorter study sessions. Ones which are more realistic to fit into busy lives. Decide on what to focus on in each study session. These sub-goals come round often, and witnessing your progression will give you the motivation you need to keep going when you find moving forward difficult. Keep this plan updated as you progress. Make a list of topics and questions you would like to revisit. This list isn’t just a reminder, it’s a way of breaking down the tasks that would

Coping with negative emotions A common challenge that any professional qualification will bring is that at some point you will come up against a topic that you really struggle with. That is no reflection on your ability, in fact it’s to be expected. After all, if becoming CGMA qualified was easy it wouldn’t be as valuable. Every CGMA student and qualified CGMA member has experienced this at some point – you are not alone! These difficult topics can often trigger negative emotions. You find yourself thinking you don’t get it and will never be able to get it. This can put you off persevering and disrupt your progress. These emotional barriers are unavoidable, so let’s learn to deal with them. Understand that your response is normal – because it is. Then work on overcoming it. Some candidates become ultra determined – “I will get this, if it the last thing I do”. Others try to tackle the problem from a different angle, maybe by exploring a tricky topic resource or a YouTube video which could explain the topic in a different way. Always remind yourself that in getting this far in your educational career you have found topics hard, and you have overcome them, mastered some even. And you will carry on doing that until you are CGMA qualified and beyond. Overcoming the brick wall You may well find (I certainly did!) that as you get closer to an exam, everything becomes that much more real and that much more daunting. It is all too easy for the feeling of “there is so much left to do” to become “I can’t do all of this”. Veer away from that. Always keep in mind how far you have come, and how close you are to where you want to be. Remember, every topic you revisit takes you one step closer to exam success. A single step may feel small, but it doesn’t mean it’s insignificant. Now is the time to focus on the big goal, and how it’s going to change your life. Think about what being CGMA qualified will mean to you and use that to power through this period and achieve what you set out to do. • Nasheen Wuisman, Senior Manager of Global Academic Progression at AICPA & CIMA, together as the Association of International Certified Professional Accountants 21

PQ cash flow statements

A question for Tom Tom Clendon tackles another one of the important subjects that often causes students problems therefore understandable.

Question Do cash flow statements provide useful information to the users of the accounts? Answer This is a big question. Let us break it down. “Useful” is a key word in the conceptual framework for financial reporting. Information will only be useful if it is both relevant and faithfully represented. These two characteristics are fundamental to information being useful. If information is not relevant or not faithfully represented, then it is useless! Information is relevant if it is capable of making a difference to the decisions made by users. Financial information can make a difference to decisions if it has predictive or confirmatory value. Faithful representation means that information must faithfully represent the substance of what it purports to represent. A faithful representation is complete, neutral and free from error. There are also four attributes that enhance the usefulness of information but are not fundamental. These are the characteristics of understandability; comparability; verifiability; and timeliness. As you read the rest of the article look out for key words, particularly those associated with the two fundamental characteristics of relevant and faithful representation.

For example, the PL account may show profits even if the company is suffering severe cash flow problems. Whereas a cash flow statement enables users of the financial statements to assess the liquidity, solvency and financial adaptability of a business. This is relevant as users will be interested in the going concern of the business. In addition, cash flow statements can give an indication of the relationship between profitability and cash generating ability, and thus of the quality of the profit earned. A business that year on year reports a profit but never generates cash is said to have low quality profits – namely, reported profits may have been generated through the manipulation of estimates and policies.

Who are the users of the accounts? The primary users of the financial statements are the providers of capital – shareholders and lenders, both current and prospective. These users are looking at the financial statements in order to make decisions. Buy or sell the shares. Sack the board or vote to reappointment them. Make a further advance or call in the existing loan.

No estimates The income statement measures profit. This involves making a series of judgments and estimates to match costs and benefits. For example, the depreciation charge depends on an estimate of the useful life of the asset. In contrast cash flow statements have no obvious judgments or estimates. Cash has either been received and paid or it has not. This is simple and therefore understandable. Cash flow statements are reliable and verifiable in a way that income statements are not.

Additional information Cash flow statements provide additional information that is not found in the PL account. Only the cash flow statement shows how the business has generated and used cash in the accounting period. This means that users have a more complete understanding of the business’ performance.

No accounting policies When preparing the income statement, a series of accounting policy decisions are made. For example, whether inventory should be accounted for on a first in first out basis or average cost basis. But to prepare a cash flow statement does not involve formulating any accounting policies. This makes cash flow statements simpler and

No measurement issues Assets and liabilities are sometimes measured at cost and other times at value. These decisions have a direct impact on the measurement of profit, for example if property plant and equipment is revalued then there will be more depreciation charged as it will be based on the revalued amount. However, in a cash flow statement there are no arguments over whether to use cost or value. $100 cash is $100 cash. There is no way to revalue cash! This absence of measurement issues means that cash flow statements are still comparable between businesses even if they measure assets and liabilities differently or have different accounting policies. Business valuation Investors are interested in the capital value of their investments. They try to use the financial statements to assess their value. They often develop models to assess the future cash flow of entities which they then discount back to a present value. Using cash flow statements to value businesses is predictive. Dividends and interest payments Investors are also interested in the ability of the business to pay dividends and interest. These represent the return on the investments. Dividends and interest are paid by the reporting entity in cash. The cash flow statement therefore provides relevant information for these users to predict the likelihood that such payments will be made in the future. Conclusion The purpose of financial statements is to provide financial information that is useful to users in making decisions relating to providing resources to the entity. I hope that you now understand that cash flow statements are very useful to users because they represent a faithful representation of the cash inflows and outflows and that is relevant. • Tom Clendon FCCA is the ACCA SBR lecturer at FME Learn Online. Contacted him via WhatsApp on 07725 350793

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PQ Magazine March 2024

PQ AAT level 2 PQ

Taking control Teresa Clarke explains how the receivables ledger control account and the payables ledger control account work


he sales ledger control account is referred to as the receivables ledger control account in AAT study materials. This is a summary of the money outstanding from the customers of a business. The receivables ledger control account is an asset to the business because it is summary of money owed to the business by its customers. The sales ledgers are referred to as receivables ledgers in AAT study materials. These are the individual customer accounts showing how much each customer owes the business. These are referred to as subsidiary ledgers or memorandum ledgers and they are not part of the double entry system. The entries will always mimic the entries in the receivables ledger control account. For example, a new credit sale to a customer will be debited to the receivables ledger control account, so it will also be debited to the subsidiary ledger.

PQ Magazine March 2024

The balance on the receivables ledger control account should match the total of the balances from the individual receivables ledgers. When constructing the receivables ledger control account, or RLCA, remember that this is an asset account, because it is a summary of money to the business by its customers. The balance brought down is an asset because it is money owed to the business, so this is a debit. Usually, the only other debit entry would be more credit sales because they increase what the customers owe the business. (The exception to this would be a correction of an error or a disallowed or bounced cheque.) Everything else is a credit because they will reduce what is owed to the business. For example, a payment from the customer will reduce what they owe the business, a discount allowed to the customer will reduce what they

owe the business, a credit note issued will reduce what they owe the business. The purchases ledger control account is referred to as the payables ledger control account in AAT study materials. This is a summary of the money owed by the business to its suppliers. The payables ledger control account is a liability to the business because it is a summary of money owed by the business to its suppliers. The purchases ledgers are referred to as payables ledgers in AAT study materials. These are the individual supplier accounts showing how much each supplier is owed by the business. These are referred to as subsidiary ledgers or memorandum ledgers and they are not part of the double entry system. The entries will always mimic the entries in the payables ledger control account. For example, a new credit purchase from a supplier will be credited to the payables ledger control account, so it will also be credited to the subsidiary ledger. The balance on the payables ledger control account should match the total of the balances from the individual payables ledgers. When constructing the payables ledger control account, or PLCA, remember that this is a liability account, because this is a summary of money by the business to its suppliers. The balance brought down is a liability because it is money owed by the business, so this a credit. The only other credit entry would be more purchases on credit. (The exception to this would be a correction of an error.) Everything else is a debit because they will reduce what the business owes to its suppliers. For example, a payment made to the supplier will reduce what the business owed them, a discount received from the supplier will reduce what the business owes them, a credit note received from a supplier will reduce what the business owes them. I hope that has helped with your understanding of these control accounts. If you like my way of explaining things, you might like my workbooks, which are all available from Amazon in both paperback and as eBooks. The links to all my workbooks can be found at https://www.teresaclarke.co.uk/ • Teresa Clarke is a freelance AAT Tutor



The leadership failings that did for Wilko Marty Windle highlights why it all went wrong for Wilko, a case study of particular interest to SBL students


n August 2023, the demise of Wilko, a oncethriving UK discount retailer, marked a significant turning point in its business trajectory. This analysis explores the strategic and leadership failures that led to Wilko’s decline, drawing insights from the Strategic Business Leader (SBL) syllabus. The SBL syllabus underscores the importance of continuous environmental monitoring using tools like PESTEL and 5 Forces for strategic adaptation. Wilko’s strategic misalignment with the evolving business landscape became apparent in its focus on traditional brick-and-mortar stores, particularly on expensive high streets. The company’s reliance on large, inconvenient stores offering paint and furniture hindered its ability to stay agile and customer-centric. The Covid-19 pandemic further exacerbated this misalignment, causing a decline in footfall on high streets and adversely affecting Wilko’s sales. The absence of convenient parking and

incongruent product offerings alienated customers during a critical period. The surge in online shopping, accelerated by the pandemic, revealed Wilko’s vulnerability as its business model heavily depended on in-person store visits. Despite having an online store, Wilko’s strategy relied on shoppers physically browsing stores, making it challenging to adapt to the evolving preferences shaped by digital trends. In contrast, competitors who swiftly embraced digital avenues outperformed Wilko by catering to sustainability concerns and changing customer preferences. Supplier dynamics, which usually favour large retailers, were reversed for Wilko. Cash flow problems led to difficulties in paying suppliers, prompting the withdrawal of trade cover by a credit insurer and causing some companies to suspend deliveries. This reversal of supplier power, driven by financial constraints, impeded the timely restocking of shelves, affecting Wilko’s ability to meet customer demand. Competitive rivalry posed another challenge

for Wilko, as it faced intense competition from value discount retailers like B&M, Home Bargains, and Poundland. These competitors strategically expanded into more cost-effective retail parks and out-of-town locations, offering customers convenient parking options and further eroding Wilko’s market share. Effective leadership, as emphasised by the SBL syllabus, played a pivotal role in organisational success. Wilko’s struggles in its final years were characterized by frequent changes in executive leadership, including turnover in CEOs, CFOs, the managing director, company chair and HR director. This lack of stability in leadership contributed to the absence of a cohesive vision and hindered the ability to make critical decisions, such as the necessary rationalisation of the product range. In conclusion, the downfall of Wilko serves as a compelling case study demonstrating the practical application of the SBL syllabus. By analysing the strategic misalignments and leadership challenges faced by Wilko, professionals can glean valuable insights into the complexities of managing businesses in dynamic environments. • After working for 30 years in the large tuition providers in London and Asia, Marty Windle has decided to focus on helping student pass SBL. You can find his courses at www.martywindle.com

Proven to boost your exam results Study Hub is proving to be a great success for ACCA students, increasing exam results by as much as 18%*. With online access to study chapters, practice questions, flashcards and short quizzes, it streamlines revision and enhances your understanding. Use Study Hub as an essential part of your exam prep and boost your chances of success.

#ACCAStudyHub *Based on pass rates of Study Hub users vs. non-users for the September 2023 session-based exams.


PQ Magazine March 2024

PQ ACCA spotlight PQ could think of that goes into riding a bike, and then improved it by 1%, you will get a significant increase when you put them all together.” The good news is that this simple approach to enhancing performance can be used in places other than the velodrome or football pitch. You can adopt this strategy to improve your studying effectiveness and exam performance. What’s more, using a marginal gains philosophy can be particularly powerful when you have access to performance feedback. To guide you on where you can prioritise your time and energy to make the most meaningful and significant improvements. That’s why, if you’re an Applied Skills student, you should be using My Exam Performance as a key part of your exam preparation.

Using the power of marginal gains As Manchester United bring Sir Dave Brailsford on board, ACCA’s Jacky Bateman and James Patrick look at the lessons students can take from Brailford’s ‘marginal gains’ philosophy to improve their exam results


n business it’s not uncommon to see leaders use a set of transferable skills to move from one industry to another. The diversity of roles and sectors our members work across is proof that the ACCA qualification equips individuals with the skills to be successful leaders no matter the business area. But despite the increased professionalism of sport and its transition to ‘big business’ in recent decades, leaders who crossover from one sport to another are still relatively rare. Particularly within the football world, where the cultural blueprint has typically been to treat ‘outsiders’ with a sense of cynicism and trepidation. So, eyebrows were raised when Manchester United recently turned to a man so closely connected to the sport of cycling to head up their new footballing operations committee.

Sir Dave Brailsford is largely seen as the man chiefly responsible for transforming British cyclists from also-rans to world beaters. Leading Team GB’s cycling programme, he turned the Brits into an all-conquering winning machine bringing home an impressive haul of 16 golds across the 2004 and 2008 Olympics. Before, overseeing Team Sky’s almost total dominance of the Tour De France between 2012-2018, where British riders Sir Bradley Wiggins, Sir Chris Froome and Geraint Thomas OBE all took home the yellow jersey. At the heart of his success was his steadfast philosophy to achieve ‘marginal gains’ in performance. Describing this approach to achieving performance improvements, he said to the BBC: “The whole principle came from the idea that if you broke down everything you

My Exam Performance My Exam Performance is our award-winning free exam feedback tool for non-variant Applied Skills exams, providing students guidance on how they performed in areas such as time management, the syllabus areas, objective test questions and in their constructed responses for each exam. Upon taking an Applied Skills exam, My Exam Performance is added to your myACCA account and can be viewed whenever you wish. Each exam feedback report becomes available shortly after the publication of your result and provides next steps advice on how to use the feedback. Guidance you can use to give you the best chance of success in your future exams. Since its introduction over a year ago, students have told us just how valuable My Exam Performance has been in gaining a greater understanding of where their strengths and weaknesses lie. Not only that, in our student survey 81% of students told us that using My Exam Performance gave them additional motivation to continue with their studies. Receiving and taking on board feedback is an important part of our personal and professional growth. So when using My Exam Performance, whether you’ve passed or failed an exam, it’s important to approach your feedback with an open mind. Doing so will give you the best opportunity to foster a continuous learning mindset, essential for achieving those marginal gains and giving you the potential to improve your future exam performance. If you’d like to know more about My Exam Performance visit our website, where we have lots more tips and advice on how to get the most out of your feedback reports. Watch our videos on how to use My Exam Performance. • Jacky Bateman is Head of ACCA Qualifications. James Patrick is ACCA’s Head of Education Solutions and Student Support

Advance your career with a Mindful Education course or apprenticeship Discover more at mindful-education.co.uk/learners PQ Magazine March 2024


PQ IFA spotlight

Introducing IFA Direct I

The institute has introduced a flexible, modular way of gaining that all-important practising certificate

nvesting in relevant and regular qualifications is a crucial strategy to deliver core learning while remaining current on new innovations and best practices in a rapidly changing workplace. The IFA spoke to Aaron Sewell, General Manager at Tax Driven Accountants, who explained how studying through online course IFA Direct offered him a flexible and robust solution to develop his expertise and skills, reaping significant benefits for him and his practice. Sewell is currently studying towards gaining his practising certificate through IFA Direct, which he manages to successfully fit around his job at the Denbighshire-based independent firm. The company has 14 local offices in the North West and a further 26 regional and national offices dotted across the UK, supporting over 3,000 sole trader and SME clients. It is the flexibility of online learning which he finds particularly appealing and why he initially chose this learning route: He said: “It fits into my schedule well, especially at busy periods of the year. It means I can go at my own pace and in my own time during the mornings or evenings, before

Aaron Sewell

or after work and also at weekends. “I like the concept of it being in bite-sized units and at £4,000 for all of my 11 selected units that I need to upskill, it’s more affordable than other courses, which can cost in the region of £6,000, and other similar standard alternatives costing anything between £15-30,000. This is why it’s more accessible for a graduate or someone looking for a ‘learn while you earn’ opportunity wanting something less intense.” Each unit’s relevance to real working

practices is something Sewell has already harnessed to good effect, enabling him to create a comprehensive, costed action plan for the company, which has resulted in cutting annual business costs by at least £100,000. “I’ve been able to understand more about utilisation ratios and how to maximise staff, particularly through flexible working. Because we have so many offices, this has helped us to improve the staff ratio from approximately 60% to a maximum 85%, which illustrates the course material’s value,” Sewell said. He added: “My aim is to finish the course in six months, whereas some courses can take up to three years. I see it as an accelerated way of learning while still being comprehensive and completely robust. I feel I’m getting the best of both worlds – the Ofqual regulated academic framework combined with professional, practical content. For me, the IFA has struck the right balance.” The firm has five other members of staff enrolled on the course, with another five due to start. “This is a vehicle that is really helping us as a business – we’re very excited about where it is taking us.” For more on IFA Direct go to: https://www.ifa.org.uk/learning/ifadirect

YOUR WELLBEING HUB Maintaining a positive mindset while studying can be challenging. Our wellbeing hub provides a range of resources and podcasts from our wellbeing ambassador to help support you throughout your ACCA journey. Explore ACCA wellbeing hub bit.ly/3ULGPdY


PQ Magazine March 2024

PQ viewpoint PQ do so by the undergraduate and postgraduate organisation called Rethinking Accountancy (https://www.rethinkaccountancy.co.uk/). We are also inspired by previous work in this area by Rethinking Economics and the creation, also at UCL, of the Core Econ curriculum (https:// www.core-econ.org/) that is now in widespread use. This rejects the curriculum previously used by many universities, which was as out of touch with the real economy as much accounting education is now with the real world of the accountant.

Driving change Richard Murphy argues that it’s time UK universities change the way they teach accountancy – and he is not alone


he UK economy cannot function without accountants. I don’t just say that because I am an accountant. I say it because I know it is true. I also say it because I know that accounting can provide a great career. It has done for me. But in that case, I and some of my academic colleagues think it’s time that the UK’s universities better prepared those studying accounting for a career in our profession. The reality is that for many years, accounting academics have struggled to work out what our profession should do as an academic discipline. Should it be about accounting theory when so much of that theory has, in reality, been developed either in practice or by the various accounting standards boards that have dominated standard setting over many years? Alternatively, does accounting as an academic discipline exist to criticise those processes that the profession has developed? Or is it about creating a finance discipline that sits between the financial accounting and management accounting disciplines on the one hand and the theoretical world of finance on the other, where economists usually rule the roost? Graduates of choice Might instead it just be that accounting as an undergraduate subject always, in reality, been the course that undergraduate students use to get a head start in the process of coming a qualified accountant by gaining exemptions to professional exams? But if that is the case, why is it that accounting graduates not the universal graduates of choice for those training professional accountants? In some of our professional bodies non-relevant graduate students significantly outnumber those with relevant degrees . The answer to all the above questions is that no one really knows. But what is certain is that accounting academia has not had the impact on the real world that it should have done. We fear that this might be because too much of the content of undergraduate accounting teaching has been dictated in countries like UK by the curriculum laid down by the various accounting

PQ Magazine March 2024

institutes and their demands that must be met if accounting exemption requirements are to be fulfilled. The consequence, as many current and former students of this discipline will know, has been that the emphasis on these courses has been deeply technical. Double entry has been taught in surprising detail. The entries required to dispose of a property that has been revalued, and then amortised during the course of its life must be known in detail for final exams. And when it comes to tax, knowing how the benefit-in-kind on the use of a company car is calculated seems to be essential. And yet, what seems to me and to colleagues that I am now talking to right across the university sector is that a great deal that is essential is often missed out from that education. Many courses do not begin by asking why we account. Nor do they ask who should we account to. There is also far too little discussion of what the needs of the very many users of accounts might be. Instead, everything is focused upon the creation of accounting data for fictional large companies with the shareholders being the centre of attention and with profit being the sole assumed corporate goal. The real world This, however, as many readers of this magazine will also know, is not the real world that many accountants live in. Accountants work for government, charities, pension funds, the NHS, small businesses, small firms who have not consolidated a set of accounts for decades, and the goals which inform the key performance indicators (if they recognise the term) of these organisations will be many and varied. The good accountant knows that. As a consequence, a team of academics led by Professor Susan Smith at University College, London, and supported by me and Jenni Rose from the University of Manchester, with a steering committee drawn from more than 14 different universities, is asking whether the time has come to rewrite the accounting curriculum that is used in UK universities. We have been inspired to

Accounting streams So what do we want to do? The clue is in the name Accounting Streams that we have adopted for this project. The streams element stands for ‘Stakeholders, transparency, reporting and ethics: accounting for management and society’. We hope that gives a clear indication that our intention is to broaden the horizons of accounting education, considerably. This does not mean that we are abandoning the commitment that universities provide to their students of accounting and finance that they should secure exemptions from professional exams. We know that they are important. However, what we think is that there is space to focus on the social and ethical aspects of accounting alongside learning about a wider range of organisations and their broader needs. Sustainability and ethics are very high on that list and would be a key focus at this curriculum. So would small businesses feature significantly, because so many accountants work for them. In addition, we will ask difficult questions about why, how, to whom, and about what we account. This will further develop the essential critical thinking and analytical skills that are required for accountants in an environment increasingly impacted by artificial intelligence and other technologies. The recent headlines related to the Post Office Horizon case highlight the importance of such skills in place of reliance on technologies. Strong technical foundations remain key. Over time we have ambitions to move beyond financial accounting, and on to management accounting and then tax and audit, we will also look at just what it is that informs decision-making in these areas, rather than accept decisions on priorities that others have already taken. In our opinion, accountants should question everything about the world around them, and that is what we want to encourage. This, we think, will help to strengthen the profession both now and in the future. That said, this project is at an early-stage development, but with ambition to develop quickly. We hope that the profession’s Institutes will keep up with us, but by concentrating on early-stage courses in the first instance we believe that there will be time to achieve that goal. In the meantime, if anyone has feedback on their experience of accounting and finance degrees and of how they either helped or hindered their careers, please do let us know, because we are keen to hear. You can contact me at richard. murphy@sheffield.ac.uk. • Richard Murphy is Professor of Accounting Practice, Sheffield University Management School 27

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ACCA exam tips PQ


The March ACCA exams will soon be upon us, and what you need is some top tips from BPP. Never worry PQ magazine is here for you, as it has been for over 20 years!

Performance Management PM Section A will have 15 two-mark OTQs on a wide range of topics. Expect a mix of calculation and discussion-based questions, note that there are no marks for workings in this section. Good time management is essential as it is easy to get caught up in a tough calculation, which ultimately will only be worth 2 marks. Never be tempted to spend more than 5 minutes on any question in this section. For section B there are three separate scenarios with five objective test questions on each scenario; each question is worth 2 marks. Questions are not dependant on each other and can be answered in any order. Each scenario could be a mix of topic areas or focused on one topic and will usually consist of two/three calculations and two/three narratives. In section C there are two 20-mark questions, which could be from, but not limited to: budgetary systems, planning and operational variances, mix and yield variances and evaluation of the company performance (either as a whole, or on a divisional basis). Familiarity with the CBE software is important as you may be expected to use both a word processing and spreadsheet format for your answer. Learn standardised layouts for calculations such as variances, learning curves and limiting factors. This will save you time in the exam and mean that you are less likely to make mistakes. The split of marks tends to be approximately 40% calculations and 60% discussion, so don’t neglect the written elements of this paper. Make sure that you always fully explain your ideas. Interpretation and application are important skills that are tested in this paper so make sure you make full use of the scenarios that you are given in the exam. Taxation TX (UK) In section A there will be a wide range of topics tested as there are 15 OTQs. Tutors expect at least a couple of these OTQs to be devoted to the administration of income tax and corporation tax. So, candidates should ensure they are comfortable with the following: • Due dates for the payment of income tax (including payments on account). • Due dates for the payment of corporation tax (including instalments for large companies). • Filing dates for the income tax and corporation tax returns. • Penalties and interest for late payments and returns. Other topic areas likely to be tested in section A of the exam are: • VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flat-rate schemes. • Inheritance tax due on lifetime transfers both in the donor’s life and on death. • Statutory residence tests for individuals. • Identification of groups of companies for corporation tax loss reliefs and gains. PQ Magazine March 2024

Trading loss reliefs for both companies and sole traders. In section B the questions will be similar to those of section A, but there will be a longer scenario to deal with. This means a slightly different exam skill is necessary as you have more information to work through, and each OTQ will require you to find the relevant information or data in that scenario. It is not a difficult skill, but you must practise an extensive range of section B questions from the practice and revision kit before attempting the real exam. In section C you will face the longer, constructive response questions with scenarios and much more open requirements. Your answers will need to show not just sound technical knowledge, but also the application of that knowledge to the question you have been asked. At least 50% of your revision time should be spent answering the section C questions in the practice and revision kit to build confidence and speed in a way that will also maximise marks. 1. Remember to learn your income tax and corporation tax pro formas. 2. Calculations which require no more than two or three entries into your calculator can be included in the relevant cell of your pro formas (e.g. time apportioning a salary). Calculations which are more complex (e.g. company car benefits) need separate workings which are properly referenced (W1, W2 etc) and have a heading. Use the cell formulae to link the workings answer into your pro forma – then if you change the working the main body will be automatically update. 3. Attempt the narrative parts of the requirement – aim for as many sentences as there are marks, with each sentence containing something technical. Keep your paragraphs to no more than 3 sentences long. 4. Your exam will be in the CBE software and the spreadsheets have some differences

to the software you may be accustomed to, so it is crucial you practice using the CBE software, especially for section C type questions. 5. Remember you cannot insert rows into the CBE spreadsheets. So, leave plenty of space on the page (especially when setting up proformas). You may need to add something in and you can always go back and move workings up the page. Show workings down the page, rather than across the page as it makes them easier to mark. Well-spaced answers are also easier to mark – and you always want to keep the marker happy. We know that the two longest questions will focus on income tax and corporation tax. These are likely to include the following: • Employment benefits. • Property income. • Relief for pension contributions. • Adjustments to profit to arrive at trading income for both companies and sole traders – in past sittings we have seen a number of questions whereby you have to correct errors in computations included in the scenario. • Capital allowance computations. • Chargeable gains calculations. Finally, remember the pass mark is 50% so you don’t need to be perfect. If you don’t know something have a guess and move on. Sometimes you have to do that in order to get follow through marks in section C questions. If you make a mistake, but then use that incorrect figure later in a subsequent calculation, then that’s fine – you can only lose the mark once. In sections A and B never leave an OTQ unanswered – have a guess if you don’t know the answer. It might be right! Financial Reporting FR Section A: • 15 two-mark OTQs on a wide range of topics, including areas such as consolidation and interpretation of financial statements that will Continued on page 30 29

PQ ACCA exam tips Continued from page 29 be covered in detail in section C. • Expect a few questions on non-core areas (e.g. sustainability). • Read the scenario, requirement and answer options carefully and ensure you capture the correct information from the scenario to answer the requirement. • Don’t leave any questions unanswered – there is no harm in guessing if you are unsure of the correct answer. There is no negative marking.

Section B (case questions): • Three separate scenarios with five OTQs on each scenario; each question is worth 2 marks. • Each scenario could be a mix of topic areas (for example revenue and receivables are often related, as are PPE and leases) or focused on one topic and will usually consist of two/three calculations and two/three narratives. • Questions are not dependant on each other and can be answered in any order. Section C (constructed response questions): • Two 20-mark questions, one covering interpretations of financial statements and the other preparation of financial statements. • One question is likely to be in the context of a single company and one in the context of a group, so you could be faced with a single company interpretation and a groups preparation or vice versa. • Both questions will require knowledge from other areas of the syllabus, particularly the accounts preparation question which will have a range of adjustments covering various areas. • Accounts preparation questions may require full financial statements or extracts – read the requirement carefully. Students can expect questions on statement of profit or loss and statement of financial position, but should not forget comprehensive income, the statement of changes in equity, and the statement of cash flows. • A single entity accounts preparation question from a trail balance or restatement of given financial statements with common adjustments being for depreciation, revaluation and current/deferred tax (including deferred tax on revaluations) plus a mixture of adjustments on other syllabus areas e.g. leases, substance over form issues, financial instruments (change in fair value or amortised cost), share issues, government grants, inventory valuation, and revenue recognition. • Group accounts preparation questions will provide the separate financial statements (or extracts thereof) of the parent and relevant subsidiary(ies) and associate. Candidates should be prepared to set out the standard workings for goodwill, non-controlling interests, movements in net assets, retained earnings as those are commonly examined. Other common adjustments are intragroup sales of goods, intragroup sales of assets, dividends and fair value adjustments. • ACCA has previously clarified that a 30

consolidation accounts preparation question could include up to two subsidiaries and one associate which allows additional scope for examining the disposal of a subsidiary (including as a discontinued operation). Candidates continue to find the interpretations question challenging. In both single entity and group interpretation questions, candidates must avoid making generic statements about the movement in ratios and instead focus on using the information in the question to, for example: identify key changes in the period (e.g. change in sales mix, closed down an operation, purchased a new subsidiary); identify transactions that would cause inconsistencies between periods or between balances (e.g. revaluation of assets for the first time, particularly if the revaluation was at the end of the period); identify any changes in accounting policies or estimates, or classification (e.g. one company presents expenses as part of cost of sales whereas another presents as part of administrative expenses). ACCA has previously clarified wording to emphasise the importance of the statement of cash flows in interpreting financial statements.

Audit & Assurance AA In section A there will be three mini-case style scenarios, each with five 2-mark questions based on the scenario (total 30 marks). Each mini-case question will test single topic areas of the syllabus and so will test syllabus areas A, B, C, D or E. Expect questions in section A to focus on areas A and E. All three questions (one 30-mark and two 20-mark questions) in section B will be broken down into sub requirements and be scenario based. The majority of marks in each question will test syllabus areas B, C and/or D. Areas expected to be tested in questions 16 to 18 include: • Audit planning. • Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk). • Internal audit. • Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls, and identification and explanation of direct controls and description of test of control). • Audit procedures (substantive procedures and tests of controls). General advice: Where questions are based on a scenario it is essential that you use the information in the scenario to score the identification marks and then develop this to score the explanation marks. The exam often provides a table for you to complete your answer. For example, audit risk questions will have a table with two columns, one for ‘audit risk’ and one for ‘auditor’s response’ with each properly explained point being worth one mark. Using this tabular approach encourages you to answer both parts of the question, therefore maximising your marks. Pay attention to the verbs used in question


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. requirements as these indicate the number of marks available. For example, the verb “explain” requires a sentence and will score one mark if properly explained whereas the verb “list” simply requires you to list out information with no further explanation and this will score 0.5 mark per point. Finally, it is essential you read the Examiner’s Reports which are issued twice a year after the June and December exam sittings. These are an invaluable source of advice and provide a sample section A OTQ case style question as well as three constructed response questions from the March/June and September/December sittings. Not only do they provide the example questions but these are accompanied by a commentary from the examining team, which gives guidance on interpreting the question requirements and common mistakes/areas of weakness noted during the marking process. These reports can be found on the ACCA website: https://www. accaglobal.com/gb/en/student/exam-supportresources/fundamentals-exams-study-resources/ f8/examiners-reports.htm. Financial Management FM Questions in section A will often be knowledge based (testing your knowledge of key technical terms), and will balance out the questions in section B and C of the exam to make sure that all aspects of the syllabus are examined. It is also likely that these questions will test your understanding of financial management and objectives (ratio analysis), as well as the economic environment and financial institutions topics (financial intermediation, fiscal and monetary policies). Section B consists of three 10-mark mini case studies. The case study will then be broken down PQ Magazine March 2024

ACCA exam tips PQ into 5 separate 2-mark MCQs (so 15 questions in total). Areas expected to be commonly tested in this section are working capital management (e.g. the operating cycle, the impact of a change in credit period or accepting a factor’s offer), business or security valuations (e.g. methods of valuation), and financial risk management (currency risk and interest rate risk). Section C’s two 20-mark questions will be broken down into sub requirements and be scenario-based. These two questions will focus mainly on syllabus sections C, D and E. Section C is working capital management, section D is investment appraisal, and section E is business finance. Whichever of these three topics does not feature in section C is likely to appear in section B of the exam. Questions from syllabus section C (working capital management) are likely to be broad ranging, so a good broad knowledge of this syllabus section is important. Candidates are sometimes exposed by a weak understanding of working capital finance. Questions from section D (investment appraisal) are likely to feature NPV with inflation and tax, however it is important to also be able to answer questions that include risk, leasing, asset replacement and capital rationing. Section E (business finance) questions often either feature an evaluation of financing options (interest coverage and gearing ratios are likely to be important here) or calculation and analysis of a company's cost of capital. Strategic Business Reporting SBR It is vital that you read the examiner's approach article on the ACCA website. ACCA has also published several exam technique and technical articles that you should read as part of your exam preparation. These are available in the SBR exam support resources section of the ACCA website www.accaglobal.com. The exam section A will be 2 questions, worth 50 marks in total – both are compulsory. Question 1 - 30 marks: • Q1 will be based on group accounting. Be aware that this question may test any aspect of group accounting, including consolidated statements of cash flows, foreign subsidiaries and associates and JVs. This question will include a pre-populated spreadsheet containing a consolidated statement which you will have to adjust for information given in the scenario. The requirement related to the pre-populated spreadsheet will be worth between 10 and 14 marks. • Usually, the spreadsheet will require adjustments for amounts you have

• •

calculated or explained earlier in the question, if this is the case, an efficient way of tackling the spreadsheet is to make the required adjustments as soon as you have calculated or explained the issue in that part of the question, rather than wait and do all the adjustments together. In the spreadsheet, you should lay out your answer as clearly as possible. Using a separate column for each adjustment is a good idea. Rather than relying on formulas in the spreadsheet cells, it will be helpful to the marker if you type out any calculations separately so that they can easily follow what you have done and therefore award any ‘own figure’ marks available if you have made a mistake. You also need to make it clear in the spreadsheet whether your adjustment should be added or subtracted, otherwise you will not be able to gain the marks for that adjustment. There are no marks available in the spreadsheet for a total column, so don’t waste your time adding the spreadsheet up. Time-keeping is key to passing this question. A recent examiner report identified that students were spending too long writing detailed answers to the first parts of Q1 and then not attempting the later parts. The marker cannot award more than the allocated number of marks for each part of the question, so to maximise your marks, you must make sure you attempt each part of the question. Make sure you work out the time you have available for each question, and for each part of the question and then stick to it.

Question 2 - 20 marks, including two professional marks: • Q2 will cover the reporting and ethical implications in a given scenario. Make sure you consider any threats to the fundamental principles of ACCA's Code of Ethics and Conduct in your answer. • Two professional marks are available in this question and going forward the examiner has stated that the question will make it clear what these marks will be awarded for. Section B will be two questions (compulsory), worth 25 marks each: • Section B can deal with any area of the syllabus and may be based on a short scenario, a case study with several parts, or an essay. • Section B will always include a question or part-question involving the analysis or appraisal of information from the perspective

of a stakeholder. Make sure you have a go at answering this question. There is no 'right' answer at this level – marks will be awarded for sensible points that have been applied to the scenario. • There are two professional marks available for the question that covers the stakeholder's perspective. To gain these marks, you must discuss the issue from the perspective of the stakeholder – e.g. if asked for the investor's perspective, you must answer from the investor's perspective! • Current issues are usually examined in section B as a part of a question (not a full question). However, current issues could be examined in either section A or section B of the exam. A question on current issues may require the application of existing accounting standards to a current accounting issue – for example, accounting for cryptocurrency, accounting for the effects of a natural disaster, or global event. General advice: Make sure you plan your time at the beginning of the exam (and stick to it) to ensure you don't over-run on a particular question – it is 1.95 minutes per mark (or 1.8 minutes per mark if you allocate 15 minutes to reading the paper). Generally, you will be awarded 1 mark for each relevant well-explained point in the SBR exam. Make sure you make enough points for the marks available – for example, if the requirement is worth 8 marks, you should aim to make 8 relevant, well-explained points. It will be easier for the marker to award you marks if you lay out your answers clearly, leaving space between your points. You can use the spreadsheet (and spreadsheet functionality) to do calculations. If you do use the spreadsheet, make sure you cross reference to any narrative discussion, if appropriate. Some requirements state that you do not need to refer to an exhibit to answer that particular requirement. Where this is the case, then it is recommended that you follow that advice and stick to general discussion, rather than referring to the scenario. Use the 'cut' and 'paste' tools wisely – e.g. do not cut and paste into your answer large sections of the exhibits as the examiner has stated in a recent examiner's report that this will be obvious to the marker, and will gain no marks. If you wish to use cut and paste, the examiner recommends just copying and pasting relevant parts of sentences and then adding your own comments. Strategic Business Leader SBL For exam sittings up to June 2023, the SBL Continued on page 32

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PQ ACCA exam tips Continued from page 31 exam had a duration of 4 hours, and no pre-seen information was provided in advance of the exam. However, this all changed from September 2023, and so a new format applies: • The exam will be 3 hours and 15 minutes in duration. • You will be issued with pre-seen information two weeks in advance of the exam. • Further information, and the question requirements, will be given to you in the exam itself. ACCA has indicated that the information in the pre-seen will not be examined directly, but will provide context and background for the exam questions (for example, the industry in question, the organisation’s history and background, board structure, KPIs, and competitor information.) You need to be familiar with this information before you begin the exam. The exam will focus on one main organisation (which has been introduced in the pre-seen information), and the question requirements will relate to that organisation. The exam will contain some additional exhibits (typically four or five) and the questions will be based on these new exhibits. The questions in the exam are referred to as ‘tasks’. There will be three tasks in the exam, although these may include sub-tasks. All of the requirements (tasks; sub-tasks) in the exam are compulsory. Question requirements in the exam could assess and link several subject areas across the syllabus and will test your ability to construct


appropriate responses to practical problems an organisation is facing. Every SBL exam will consist of 80 technical marks and 20 Professional Skills marks. Each professional skill will appear once per exam, for four marks. General advice: The SBL exam is demanding, and as such you need to give careful consideration to how you will manage your time to make the most effective use of it. You are recommended to spend about 20 minutes reading the exhibits and starting to plan your answers (for example, identifying the exhibit, and information, which is most relevant to each task). This then leaves you 2 hours 55 minutes (175 minutes) to tackle each task. Since there are only 80 technical marks, this works out at 2.2 minutes per technical mark. So, if a task has 15 technical marks, and 4 professional skills marks, you should spend 33 minutes on it (15 × 2.2). No time is allocated for professional skills marks, as you earn the 20 Professional Skills marks by virtue of the way you attempt the 80 technical marks. It is important to note that you can spend longer than 20 minutes reading and planning your answer if you choose to. The 20 minutes – 175 minutes split is just a recommendation. However, if you choose to spend longer on reading and planning then you will need to bear this in mind when you come to writing your answers, and adjust your time allocation for each task accordingly. Regardless of the time allocation you choose, it

is crucial that you stick closely to your timings, to ensure that you do not spend too long on one task to the detriment of those you are yet to attempt. Planning your answer: Clearly, if you have gone to the trouble of preparing an answer plan it is important that you use it when writing up your answer. To get the most from your answer plan, it is therefore important that you include as much detail as you think will be helpful when the time comes to write up your answer. Numerical analysis: Some question requirements may require you to conduct some numerical analysis. For example, you may be asked to analyse the performance of the organisation feature in the exam, or a potential investment it is considering. When doing numerical analysis, though, it is important that you focus only on performing any calculations that are going to support your answer and provide you with something to talk about. Producing lots of unnecessary calculations for the sake of it will not earn marks, and will only serve to waste time in the exam. Using computer software: Ensure you practise timed exam questions using the ACCA CBE software. You need to be comfortable reading and highlighting the exhibits on the screen, as well as taking notes in the scratch pad. It will be easier if you plan your ideas and set up your answer structure in the software, in the form of headings. The exam software comprises a word processor, a spreadsheet, and some presentation software. The word processor should be used for discursive answers (e.g. reports; memos; letters)

PQ Magazine March 2024

ACCA exam tips PQ

and is likely to be used for answering most of the tasks. Any calculations you perform should be in an appendix in the spreadsheet software. Tasks requesting slides should be completed in the presentation software. Appropriate use of theoretical models: To stand the best chance of passing the SBL exam, you will need to have a good understanding of the entire syllabus. However, it is important to remember that tasks in the SBL exam will not ask you to simply regurgitate your knowledge of a particular topic or theoretical model. The task requirements test your ability to apply your understanding of the topics covered in the SBL syllabus in the context of the question scenario (for example, in order to provide advice to the Board about how to respond to a particular situation or issue). Furthermore, tasks will not specifically ask you to use a particular model. Whether you use a theoretical model when constructing your answer will be a matter of judgement that you need to weigh up in the light of the information presented to you in the exam. Doing plenty of question practice in the lead up to your exam is the most effective way of developing your judgement in this area. Technical marks and Professional Skill marks: Technical marks relate to the knowledge which you demonstrate and apply in your answer. There are 80 technical marks on offer in the exam. The 20 Professional Skills marks are awarded for displaying the following skills and behaviours: Communication, commercial acumen, analysis, scepticism, and evaluation. Every Professional Skill will be tested in every SBL exam sitting. The Professional Skill being tested will be specified under each question requirement. As you prepare to attempt the exam it is crucial that you take the time to attempt as many practice questions as you can. To increase your chances of exam success you need to ensure that you take sufficient time to develop your understanding of the Professional Skills. Advanced Performance Management APM Q1 section A: Q1 of the APM exam will focus on a range of issues from syllabus section A (strategic planning and control), section B (performance measurement systems and design) and section C (strategic performance measurement). Section A (50 marks) contains one question broken down into sub requirements. You will often be required to link a business’s mission to its performance objectives using the concept of CSFs and KPIs. You may well also have to critique and PQ Magazine March 2024

recommend improvements to performance reports and the balanced scorecard and/or information systems could well be tested in this context. Assessing the performance of an organisation is likely to be tested and this could include benchmarking as a theme. Financial performance measures (ROCE/RI/EVA etc) are also likely to be examined in this context, but don't neglect nonfinancial issues from syllabus section C such as quality management, value for management and reward systems. Q2-3 section B: ACCA have said that one of two section B questions will come from syllabus section D (performance evaluation). This means you need to have sound knowledge of the balance scorecard, building block and performance pyramid models. In addition you will also need to have a good working knowledge of activity based management (ABM) and value based management (VBM). The other question can be sourced from a variety of syllabus areas including quality management, information reporting (e.g. big data, lean information), HR frameworks (e.g. reward & appraisal systems), transfer pricing and environmental management accounting. General advice: APM is primarily a skills-based exam which tests the ability to apply knowledge to practical problems. This is now even more important as 20% of the marks are awarded for professional skills. Make sure you aware what these skills are and that you are confident in your ability to integrate these into your answer to the technical requirements of a question. However, application of knowledge is only possible if you have a good range of technical skills in place. So, even though APM is not about reciting technical knowledge, it is absolutely vital that you ensure that you have a good broad knowledge of core technical areas. Advanced Taxation ATX (UK) The exam will comprise of one compulsory 50-mark question within section A. The requirements will be detailed in the manager’s email marked ‘work to be carried out’ and there will be several exhibits containing further information. The answer will need to be prepared in a specific format as set out in the manager’s email which will include mark allocations for the sub-requirements. Due to the size of the question it is possible that the scenario could involve more than one client or a personal client in addition to a corporate client. The question will

comprise of 35 technical marks, 5 ethics marks and 10 professional skills marks. Each of the four professional skills will be tested. Section B will comprise of two compulsory 25-mark questions. These will be in a more succinct, note form style, and will comprise of 20 technical marks and 5 professional skills marks. A minimum of two of the three professional skills will be tested in these questions (not including communication). The exam will test candidates’ ability to analyse and evaluate the tax implications of various situations, numerical calculations will only be required to assist in producing an answer and no purely numerical questions will be set. Due to the introduction of the professional skills marks, students will now have more time to attempt each question than under previous sittings. The ACCA has stated that the additional professional skills marks should not be considered as additional requirements but that the extra time they allow should be used for planning and thus to prepare a more comprehensive answer. Topics/scenarios we would expect to see are: • Personal income tax scenarios which could involve: investing in a pension; investing in EIS, SEIS or VCTs, share schemes; employment income possibly with termination payments; a personal service company; property income or a takeover. • Unincorporated business – particularly including loss reliefs, partnerships or basis period rules. • A question focussing on overseas issues –this could be income tax, capital gains tax, inheritance tax or a corporate scenario. • Capital gains tax versus inheritance tax including availability of reliefs. • Corporate scenarios – likely to focus in more depth on intangibles; research and development; losses; corporate groups or consortia. • Special corporate scenarios such as liquidation; purchase of own shares; close or investment companies. • A business transformation scenario question such as selling a sole trade business, incorporation, or, in a corporate context, the sale of shares versus the sale of trade and assets. • Other common types of question/calculation to expect are: • Reviewing a pre-prepared computation to spot, explain and correct errors. • Calculations such as “tax saved through an action”, “after-tax proceeds”, “the value of a post-tax inheritance”, “net spendable income” or the “net of tax cost of something”. Don’t forget that across the scenarios you can expect to see VAT marks available. Partial exemption rules, VAT on land & buildings, transfer of going concern, the capital goods scheme, overseas VAT transactions, and registration/group registration/deregistration tend to be frequently examined. There will also likely be a couple of marks for stamp duty points if you remember to think about it in your planning! Finally, don’t forget your basic administration points are also likely to be examined – when do Continued on page 34 33

PQ ACCA exam tips Continued from page 33 we need to pay tax, when do we file a return and what if either of those are late? Advanced Audit & Assurance AAA Recent AAA exams have contained no real surprises, although you should be prepared for the look and feel of the embedded email and supporting exhibits and the split of both technical and professional skills marks. Section A will comprise a case study, worth 50 marks, split into 40 technical marks and 10 professional skills marks, and will be set at the planning stage of the audit, for a single company, a group of companies or potentially several audit clients. Candidates will be provided with detailed information, which will vary between examinations, but is likely to include extracts of financial information, strategic, operational, and other relevant information for a client, as well as extracts from audit working papers, which could include the results of analytical procedures. The date will be set as 1 July 20X5. Candidates will be required to address a range of requirements, from syllabus sections A, B, C and D, thereby tackling a real-world situation where candidates may have to manage a range of issues simultaneously in relation to planning, risk assessment, evidence gathering and ethical and professional considerations. Ten professional marks will be available in section A and will be awarded based on the demonstration of professional skill within a candidate’s answer, including communication, analysis and evaluation, professional scepticism and judgement, and commercial acumen. Section B will contain two compulsory 25-mark questions, with each being predominately based around a short scenario. The marks will be split into 20 technical marks and five professional skills marks. There are no optional questions in AAA. One question will always test syllabus section E, and candidates should therefore always be prepared to answer a question relating to completion, review, and reporting. There are a number of formats this question could adopt, including, but not limited to, matters to be considered and evidence expected to be on file, a going concern assessment, the impact of subsequent events, evaluating identified misstatements and any corresponding effects on the auditor’s report. Candidates may also be asked to critique an auditor’s report or a report which is to be provided to management or those charged with governance. The second section B question can be drawn from any other part of the syllabus, including

sections A, B, C, D and F. Syllabus section G on current issues is unlikely to form the basis of a question on its own, but instead will be incorporated into the case study or either of the section B questions depending on question content and the topical issues affecting the profession at the time of sitting the exam. Five professional marks will be available in each Section B question for demonstrating professional skill in analysis and evaluation, plus at least one of professional scepticism and judgement and commercial acumen. General advice: This subject often tests topical issues which have been covered by the examining team’s technical articles (e.g. quality management in September 2022 and the impact of data analytics in September/December 2020). From September 2023, as well as changes to auditing standard relating to group audits and the reliance on component auditors’ quality, there has also been an increased focus on sustainability reporting. All the examining team's technical articles can be found online, including two recent articles on quality management, two articles on planning questions and risk, plus another two articles that discuss recent developments in social, environmental and sustainability reporting. There is also a ‘tricky topic’ video on quality management, audit procedures, and prospective financial information (forecasts). Read/watch them! Advanced Financial Management AFM All AFM exams will have questions which have a focus on section B of the syllabus (advanced investment appraisal) and section E (treasury and advanced risk management techniques). These syllabus areas are therefore high priority areas for your revision. Q1 (50 marks): You can expect questions to cover at least two

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different syllabus areas. This emphasises the importance of having a good broad knowledge of the syllabus and not targeting your final exam revision on a small number of syllabus areas. Questions are often based on core syllabus areas such as: project appraisal (domestic or overseas), business valuations and business/ financial reorganisations; these areas often include cost of capital calculations. Risk management may also feature in a number of different ways, e.g. value at risk, real options, interest rate or current hedging, and risk management (e.g. mapping). Q2-3 (25 marks each): Areas to be tested: • Risk management (currency or interest rate) including the functions and structure of a treasury department. • Dividend policy and general financing issues. • Real options, including limitations of approach. • Business reorganisation. General advice: The examining team have stressed that exams are designed to make question spotting extremely difficult for this paper, so it is important to have a broad understanding of the key aspects of each syllabus area. Don't over-emphasise numerical analysis in your final revision – remember that this paper is not a maths exam and, in all exam questions the examiner is interested in your ability to communicate well and to give good management advice that relates to the scenario in the question. This is now even more important as 20% of the marks are awarded for professional skills. Make sure you are aware what these skills are and that you are confident in your ability to integrate these into your answer to the technical requirements of a question.


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PQ Magazine March 2024

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PQ AAT Level 3 This can be shown in the ledger accounts as follows: Remove the cost of the asset Debit Disposal account £20,000 Credit Non-current asset account £20,000 Non-Current Asset Cost £ Balance b/d

Disposal of Capital Assets Karen Groves explains how to approach a disposal of capital assets exam style question


isposal of capital assets is assessed in AAT Level 3, within the Financial Accounting: Preparing Financial Statements unit. When a business disposes of a capital asset, the asset must be removed from the accounting records. The asset is usually disposed of for more or less than the carrying amount, as the carrying amount is an estimate based on how long the business considers the useful economic life of the asset to be. The carrying amount is calculated as the cost of the asset minus accumulated depreciation. The disposal must be recorded in the non-current asset register, to ensure this is up to date, together with updating the non-current asset cost account and accumulated depreciation account. A disposal account is used to remove the balances and determine the profit or loss on asset disposal. If the capital asset is disposed of for more than the carrying amount then a profit on disposal is made, however if the capital asset is disposed of for less than the carrying amount, a loss is made. The following steps should be taken to remove the non-current asset: 1. Remove the cost of the disposed asset: Debit Disposal account Credit Non-current asset account 2. Remove the accumulated depreciation: Debit Non-current asset accumulated depreciation account Credit Disposal account 3. Enter the sale proceeds amount for the asset: Debit Bank (or Receivables) Credit Disposal account At this stage the disposals account is balanced to see if a profit or loss has been made on the disposal. We will look at an example question, and the way this should be approached. Example EC Limited had a non-current asset costing £20,000 with accumulated depreciation of £12,000. The asset had been sold for £7,500 and a bank receipt for the sale had been received. To calculate the profit or loss on disposal:




Disposal £ Non-current asset cost



1. Remove the accumulated depreciation: Debit Non-current asset accumulated depreciation account £12,000 Credit Disposal account £12,000 2.

Accumulated Depreciation £




Balance b/d



Non-current asset cost




20,000 Accumulated depreciation


Enter the sale proceeds amount for the asset: Debit Bank £7,500 (account not shown in this type of task) Credit Disposal account £7,500 Disposal

Non-current asset cost



Accumulated 20,000 depreciation




Loss on disposal (SPL)

£ Cost


Accumulated depreciation


Carrying amount


Disposal proceeds


Loss on disposal





, 20,000


The loss on disposal is then debited to the statement of profit or loss, as this represents a loss on disposal. If, however, there had been a profit on disposal, a credit entry would be made to the profit or loss instead. PQ Magazine March 2024

PQ AAT Level 3 PQ Now have a go! EC Limited had a non-current asset costing £10,000 with accumulated depreciation of £4,000. The asset had been sold for £6,500 and a bank receipt for the sale had been received. Show the entries to be made in the ledger accounts.

Answer Non-Current Asset Cost

Balance b/d



10,000 Disposal


Non-Current Asset Cost £

£ Accumulated Depreciation £ Disposal



Balance b/d


Accumulated Depreciation £



Non-current asset cost



10,000 Accumulated depreciation




Disposal £


Profit on disposal



. 10,500

• Karen Groves is an AAT tutor and AAT Faculty Director at e-Careers


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PQ CCAB report

Making a contribution What impact is the accountancy profession having on the UK and Irish economies? The CCAB, with the help of Oxford Economics, have crunched the numbers, and here’s what they found


he accountancy profession is needed now perhaps more than any time in modern history, says CCAB chair Julia Penny. Introducing the new CCAB’s report on the accountancy profession in the UK and Ireland, Penny stressed the world is going through unprecedented change and has experienced seismic disruption. She explained that since the last report in 2018 the UK has officially left the EU; a global health pandemic shattered lives and changed forever our ways of working; Russia invaded Ukraine, contributing to spiralling inflation and a cost-of-living and doing-business crisis; and now conflict in the Middle East threatens peace and stability across the region.

With economies and societies feeling fragile and vulnerable, Penny said the accountancy profession has a duty to help them navigate through this volatility. So, how is the profession doing? Here’s what Oxford Economics discovered… A profession by numbers In 2022, the professional accountancy bodies of the UK and Ireland represented over 611,000 members across the world, a 14% increase since 2014. Around 357,200 of these members were based in the UK, 44,000 in Ireland, and a further 210,000 internationally. The researchers estimated the accountancy profession in the UK supported 689,300 jobs.

THE ACCOUNTANCY PROFESSION IN THE UK AND IRELAND Membership Membership of CCAB bodies in the UK and Ireland has grown by 14% over the past five years.

At the end of 2022:





individuals were employed by the accountancy profession in Ireland.

registered students

One in four based


in the UK and Ireland

50% were women

members globally

UK More than


workers were employed by the accountancy profession in the UK.

They directly contributed

They supported an

to GDP in Ireland …

contribution to UK GDP ….

… and raised

… and were responsible for an estimated tax contribution of

€19.8 billion €1.8 billion

in tax revenues.

£80.7 billion £10.1 billion.

UK businesses spent

Irish businesses purchased

€3.4 billion

in accountancy services (0.6% of all business-tobusiness purchases).

Note: All figures for year end 2022


£29.3 billion

on accounting services (1.3% of all business-tobusiness purchases).


billion The UK exported a total of in accounting services in 2022. This accounted for 5.7% of professional service exports for the year.

This total includes professionals working in accountancy firms, as well as accountants working in other sectors. In addition, the accounting industry supported another 138,900 jobs in non-accountancy roles. Overall, that total of 828,200 jobs is equivalent to 2.5% – or one in every 40 – of all jobs in the UK, and represents an increase of 1.9% from 812,500 jobs in 2017. In Ireland, one in every 30 people working have jobs in the accounting sector. Globally, these bodies also had 585,800 students registered with them at the same time. Around one in four of these students was based in either the UK or Ireland. Overall, 50% of students across the world were women. This is 12 percentage points higher than the share of female members in the professional accountancy bodies (38%). CCAB said this suggests that the proportion of female members should grow as female students qualify and progress through their careers. There were 4,310 audit firms registered in the UK at the end of 2022, and the number of firms with over £100 million in income has increased by 50% over the past five years. GDP contribution The report estimates that the profession contributed £97.7 billion to the economies of the UK and Ireland. Relative to 2017, the nominal GDP contribution in the UK grew by an estimated 37%, when compared with the UK economy-wide average of 20%. In Ireland, the nominal GDP contribution increased by 56%. For 2022, Oxford Economics said the accountancy profession supported a contribution of £80.7 billion to UK GDP. This was equivalent to 3.4% of the country’s GDP. Of this total some 41%, or £33.3 billion, came from the accounting services sector itself. The remaining 59% (£47.4 billion) was supported by ‘in-house’ accountancy employees. The researchers estimate that the implied productivity of employees in the accounting services industry was 1.6 times the economy average. In Ireland, the profession’s supported a €19.8 billion direct contribution to GDP. This is equivalent to 4.1% of the national economy – or twice as large as the GDP generated by the transportation sector. The report said the accountancy profession contributed £11.7 billion in tax revenues to the UK and Irish exchequers through the taxes paid by its employees and businesses. The Brexit effect Brexit has changed how some accounting firms carry out their businesses, as the qualifications of some UK accountants are no longer automatically recognised in certain EU states. This means that regulated accountants must comply with states’ individual requirements. However, the value of exports of accountancy services has still doubled between 2016 and 2022. As a result, the UK had a trade surplus in accounting services of £1.7 billion in 2022. In total, the UK exported £4 billion in accounting services – equivalent to 5.7% of all professional services exports. • Read the full report here.

PQ Magazine March 2024

No accounting 4 the love of football Brought to you by

An evening with University of Liverpool’s Kieran Maguire, of The Price of Football podcast fame, and friends… Those friends are: Sofia Thomas, partner at Juno Tax and chair at International Sports Tax Association Kunal Sajdeh, manager in the Deloitte Sports Business Group and sub-editor of the 2024 Deloitte Football Money League Patrick Way, KC, football tax expert Our love of the game always comes at a price, the problem is understanding how finance and football can keep the beautiful game, well, beautiful! With Kieran & co help we will follow the money and find out what is really going on! We may be starting with Everton, but who knows where the evening will take us! No accounting 4 the love of football – does football finance work? Date: Thursday 21 March Venue: The Crypt on the Green, St James’s Church, Clerkenwell Close, London EC1R 0EA Time: 6pm to 8.30pm. Kick off at 6.30pm Sign up at: https://shorturl.at/cikO0. No VAR will be in operation on the night! This event is supported by

HM Enquiries RC & Powers

PQ CIPFA spotlight

Celebrating National Apprenticeship Week To understand more about the process of apprenticeships, CIPFA’s David Fields spoke to two CIPFA apprentices about their experiences


ne of CIPFA’s core aims is to inspire public finance and counter fraud professionals. We are an approved and established apprenticeship training provider and help people launch a career focused on the management, assurance and protection of public money. And with twothirds of apprentices aged older than 25, it’s never too late for a career change. Maariya Hussain took part in the CIPFA Level 4 Counter Fraud Apprenticeship. She has a Master’s degree in pharmacy and spent two years working for the Department for Work and Pensions before successfully applying for the role of Trainee Counter Fraud Officer with the Government Internal Audit Agency (GIAA). For Maariya, the apprenticeship programme had a positive impact in developing various attributes vital to her role, from analytical skills, critical thinking and public speaking to time management and organisational and listening skills. “The data analytics module we’ve covered, for example, helped me address a subject I would previously have been unsure about. The way the module was set out, the way it was explained, and the guided tasks we had to carry out made the subject accessible and engaging. “Data analysis is essential in counter fraud investigation and evidence gathering, and the course was able to give me real confidence through developing my knowledge base and analytical skills.” Sharing the learning journey with other apprentices is another important part of the programme that Maariya enjoys. “The CIPFA class days are the best part of the programme. I get to catch up with fellow apprentices – sharing learning styles, getting insights into what each other does in their jobs, and keeping up-to-date with fraud in the news. We are tasked with being prepared to present fraud news stories to the cohort – which has certainly helped mould me into a confident


presenter.” Looking ahead, after qualifying as an accredited counter fraud investigator, Maariya is determined to keep developing her professional skills to counter new and evolving threats. “I’m really passionate about protecting the public purse,” she said. “With the emergence of AI only the start of a digitally dominated world, it’s increasingly important to stay on top of technology – to fight fraud, we must first understand it.” Blended learning approach Mariela Borisova, another CIPFA apprentice, has been in her current role as an Income and Cost Recovery Facilitator since September 2023. Mariela embarked on the two-year apprenticeship programme in April 2022 and

welcomed its blended learning approach, which is tailored to promote the development of professional standards, knowledge, skills and behaviours essential in the field of counter fraud investigation. Mariela has particularly enjoyed the practical training. She said: “The face-to-face training was really interesting and eye-opening because you have to react very quickly on the spot and be focused. At the same time, working in collaboration with my peers on the course was very enjoyable. We have very useful discussions during the sessions looking at various types of fraud we encounter, and because each of us works in a different area of the public sector, we can expand our knowledge and see specific types of fraud from a broader sector-wide perspective.” She added: “I would definitely recommend the CIPFA Counter Fraud Investigator apprenticeship to anyone. It’s intense – in a good way – but also immensely rewarding. The training is very structured, we have deadlines, and there’s a blend of practical and written work. There is the opportunity to research and learn about different parts of legislation, but the framework also enables you to acquire more knowledge around your specific role, and to apply the results of that learning in your dayto-day duties and our investigations.” And Mariela’s advice for those considering a CIPFA apprenticeship? “Choose the apprenticeship that applies to your role, and don’t let yourself be overwhelmed by the prospect of the assignments, workbook tasks and deadlines – enjoy the journey, because it is a great experience,” she said. Becoming an apprentice is a fantastic way to progress your career and get qualified at the same time. CIPFA has two intakes a year for the CIPFA Counter Fraud Investigator Apprenticeship. To learn more about CIPFA apprenticeships visit CIPFA’s website. • David Fields, Employer Engagement Manager at CIPFA

PQ Magazine March 2024

Help Us Define Industry Standards – Take Part in the GAAPweb 2024 Salary Survey Why participate? • Find out if you're being paid fairly • Get insights into flexible working patterns, bonuses and the gender pay gap • Drive positive change across the finance sector by helping employers and recruiters understand what environment you want to work in. For a limited time only, particpants will be entered into a draw to win a £100 Amazon gift card!

Complete the survey at:


PQ AAT study

How to deal with setbacks Rachel Spence explains how you can stay motivated and focused in the event of an exam setback


ife is characterised by unpredictability. We often achieve our goals but face challenges, including in education. Setbacks, managed by motivation, define our outcomes. During your studies, including on your AAT pathway, you will encounter setbacks. Firstly, acknowledge their existence without succumbing to panic if you want to overcome them. Instead, view them as minor detours on your broader learning journey. For example, you may not always achieve a first-time pass on all your AAT assessments, but it is crucial that you recognise this as just being a small part of your overall journey. Although, you may be feeling deflated it is important to persevere and to focus on the end goal. Rather than becoming anxious, approach it as a valuable learning opportunity. Embrace a positive mindset and retake the assessment; with determination and persistence you’ll likely attain the desired outcome. Adaptability plays a pivotal role – it is crucial to be flexible in your approach. It’s possible that the study methods you’ve been using need adjustment. Perhaps insufficient time has


been dedicated to your revision or you have an ineffective revision style. Many students mistakenly believe that merely reading the prescribed textbooks is sufficient but in the case of AAT this falls short. AAT demands a practical approach to revision, particularly at the higher levels. To secure higher grades, consistent and ongoing practice of exam-style questions becomes essential. Finding motivation can be greatly enhanced by engaging with others. Stay in touch with fellow AAT students who share your common

goal, whether it’s through online forums, in-person or through social media. You’ll quickly discover that you’re not alone on this educational journey. In fact, you can collaborate and support one another – even simply sharing your experiences with one another can provide a much-needed motivational boost. Setbacks in your academic journey may not always be linked to your assessment results; they could be streaming from your personal life. Drawing from my own experience during my own AAT studies, I’ve learned that taking a short break can help to regain focus and get you back on track. In such circumstances, my most valuable advice is to reach out to someone for support. Don’t hesitate to seek guidance and assistance from your tutors. They are dedicated to helping you and are genuinely invested in your success; they want to see you reach your full potential. Ultimately, it is important that you remember that setbacks are a part of any journey, and it’s how you respond to them that ultimately determines your success. By implementing these strategies and maintaining a resilient attitude you can stay focused on your AAT studies even when faced with obstacles. • Rachel Spence, MAAT

PQ Magazine March 2024

PQ careers PQ

Dear Karen Ask PQ’s very own agony aunt Karen Young when you need advice from a real expert. Email your dilemma to graham@ pqmagazine.com, and he will pass on the best ones to Karen THE DILEMMA All this talk of a return-to-office is causing me anxiety – should I be worried and how can I express my flexible working preferences to my employer?

Global CEO gender parity a lifetime way Is it really going to take 81 years for global CEO gender parity to be achieved?

At current rates it will take 81 years to reach global CEO gender parity, an increase of seven years from 2022’s figures, according to leadership advisory firm Russell Reynolds Associates. The UK’s FTSE 100 saw women CEOs account for almost a quarter (23%) of departures, while CEO appointments continued to overwhelmingly go to men (87%) in 2023. The finding is part of Russell

Reynolds Associates’ 2023 Global CEO Turnover report, which analyses the trends driving CEO appointments and departures over the past 12 months across 12 national and international stock markets. The report paints a mixed picture of efforts to ensure more women CEOs lead the world’s top businesses. Despite departures remaining high across all global indices last year, the estimated time to

achieve parity shows significant variance. At the current rate of change the S&P 500 finds itself 22 years ahead of the global average (81 years). Meanwhile, the FTSE 100 is not on track to reach this goal until 2141, 117 years from now. However, 2023 was also a record year for the rate of women CEO departures. A tenth of all global CEO departures this year were women, with women three times as likely to leave for personal reasons (16% versus 5% for men) and significantly more likely to be removed from the role (34% versus 25%).

affordable debt are now paying for it.

should be determined, resilient and adaptable to these.

Luck plays its part Some 60% of managers believe that an element of luck has played a significant part on shaping their careers, according to new research by Emlyon Business School. Respondents stated that this luck typically came through a chance event, which could be positive or negative, but either way had a huge impact on their career. Although by definition chance events cannot be predicted, the researchers say that the impact of them can in many cases be managed. It is important that those professionals who look to map out their career paths take into account the potential for hiccups along the way and

No hiding at home on Fridays! L’Oreal has reportedly told all its employees around the world that they must present themselves at the office at least two Fridays every month. The beauty giant employs 87,000 people and is trying to smooth out office footfall as well as increase collaborations. The new policy became policy in late January. L’Oreal also increased the number of days European staff can spend working remotely in other countries. It was five, now will be 10. Meanwhile, the Financial Times said EY was now collecting data to ensure staff are actually coming into the office at least two days a week.

In brief KAREN’S RESPONSE Given the draw of flexible working it's understandable to be concerned by the prospect of returning to previous ways of working. Many professionals share the same sentiment; more than half (58%) of PQs say they wouldn’t accept a role in the future that didn’t offer hybrid working. While it’s true that many employers are calling for their staff to spend more time in the office, flexible working is still widespread across accountancy. Have an open conversation with your manager about how you feel. Your employer should be transparent and supportive when it comes to any plans to alter working arrangements. Be prepared to discuss why flexible working is a priority for you – it might be that you’re more productive when working from home, particularly when it comes to tasks that you find easier to complete in a quieter working space. However, it's also important to be adaptable and to have an open mind about the benefits of working from the office, such as bonding and collaborating with your team, accessing technology and reducing loneliness. If your organisation implements a return-to-office mandate, you could make a formal flexible working request in writing, or it might be time to search for a new role. Be sure to communicate your flexible working preferences in an interview and confidently negotiate what you want. • Karen Young is a director at Hays. She is passionate about helping people to find the right job and companies the right person

PQ Magazine March 2024

Critical financial distress rising More than 47,000 UK businesses started 2024 on the edge of collapse, according to the latest Begbies Traynor Red Flag Alert report. The report found 539,000 UK business are also in ‘significant’ financial distress. And the worry now is the speed at which critical financial distress is growing – it is up 25% for the second consecutive quarter. The key sectors driving this increase in distress are construction, health, education, real estate and property services, and support services. Julie Palmer, a partner at Begbies Traynor, said the era of cheap money is firmly a thing of the past, and those who loaded with what they thought would be

The PQ Book Club: books you should read Unfit & Improper Persons: An Idiot’s Guide to Owning a Football Club by Kevin Day, Kieran Maguire & Guy Kilty (Bloomsbury, £16.99) Have you ever dreamed about buying a football club? Perhaps that seems too daunting, so what about running a fictional football club and writing a book about it? That’s exactly what the authors have done, and for the record they called the team West Park Rovers. After choosing the kit, the next step was finding a shirt sponsor and, of course, a betting company is not what the guys were after. They opt

for Omino’s Pizza, because everyone loves pizza! By having Kieran involved we get some really interesting figures (seriously, they are interesting). For instance, did you know that Liverpool FC received zero money from TV in 1973/74, compared with £260,841,000 in 2021/22. The club’s wages bill in 1973/74 was £365,874, and in 2021/22 it was £366,092,000. He also worked out that in the last Premier League season before Covid, 2018/19, it took Liverpool 13 hours 54 minutes to earn as much as they did for the whole of the 1973/74

season (£847,149). In that time wages have risen by 100,060%. PQ rating: 5/5 This is a hugely enjoyable and easy book to read, written by people who really love the game. We can’t tell you too much about West Park Rovers journey up the league or whether they create a woman’s team, you will have to discover that yourself. • Don’t forget you can catch Kieran at our ‘No accounting 4 the Love of Football’ evening on 21 March. Sign up at https:// shorturl.at/cikO0. 43

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

World’s fastest accountant gets new sponsor The world’s fastest accountant, Eugene Amo-Dadzie, has a new sponsor in the form of TaxScouts. Eugene became the fourth-fastest British runner of all time when he clocked 9.93 seconds for the 100m. TaxScouts said its sponsorship will help Eugene create an elite training environment as he plans to qualify for this summer’s Paris Olympics while still working as an accountant, be it only part-time at the moment. Eugene will use the extra money to help pay for training costs, medical fees, training camps, equipment, travel and accommodation. Let’s all get behind Eugene as he goes for gold!

Flapjacks crumble under HMRC pressure It matters whether Jaffa Cakes are a cake or a biscuit because for VAT purposes cakes are zero rated, but chocolate-covered biscuits are subject to VAT at the standard rate (20%). The position is more complicated for flapjacks. Traditional flapjacks are viewed as similar to cakes, and zero rated. However, flapjack bars have previously been found to be confectionery for VAT purposes. It all came to a head (again) in the recent case of Duelfuel Nutrition Limited vs HMRC, where the company said its flapjack, cake bar and brownie should be treated as zero rated for VAT purposes. To decide, the Tribunal did an actual taste test! Duelfuel’s goods went up against McVitie’s chocolate HobNobs, Mr Kipling’s chocolate slices and Kellogg’s Nutri-Grain bars. The judge ruled Duelfuel’s goods had the appearance of cakes, but given “the ingredients, taste, packaging, marketing and pattern of consumption”, an ordinary person would not consider them to be a cake. So, the court found that they were confectionery and Duelfuel was unsuccessful. It seems the real standard test is this – would you serve them to guests as a treat with afternoon tea?

W E ’V E

Evie in the spotlight

CCAB’s new report on the accountancy profession features heavily in this month’s issue – hey, it’s on our cover. It was great to see Evie Todd star as one of the case studies. She is, of course, our current PQ of the Year. Evie co-founded the podcast channel only2nerds, which helps other ACCA students on their exam journey. Don’t forget there is still time to enter the PQ awards for 2024 – the deadline is 8 March 2024. You can find out more at www.pqmagazine.com. Just click on the ‘PQ AWARDS’ at the top of the home page to download the nomination form. It was also just a bit weird to read that we are apparently a ‘trade magazine’!

As seen on TV and a poster near you

When Warrior Queen Boudica wants to upgrade her chariot who does she ask? Well, her accountant Simon, of course. She wants to add some blades – and Simon confirms if they are for work purposes then they will be tax deductible. This 30-second video is from Intuit Quickbooks and is part of its ‘For the Hero behind the Heroes’ campaign, which ran to the end of 2023 (and you can still see today). Quickbooks and ad agency FCB London wanted to show how the humble accounting professional is often overlooked or underappreciated. The other ads in the series has the Three Bears trying to get their payroll right, Hercules strengthening his personal training business, and Sleeping Beauty relaxing during the tax season.

German courts jails Freshfields former head of tax

The former head of tax at Freshfields Bruckhaus Deringer, Ulf Johannemann, has been sentenced to three-and-a-half years in jail for his part in a huge German tax fraud. He worked for the now defuncted Maple Bank from 2006 to 2009, and his conviction is part of an ongoing investigation that involves billions of pounds lost to the state from fraudulent tax rebate schemes. These schemes were set up by banks and investors to trade shares of companies around their dividend payout days. The blurring of ownership allowed lots of parties to claim they owned the shares when the payout was made, and then claim tax rebates on dividends. While that loophole has now been closed the courts are still trying to claw back the monies stolen.


Need some mindfulness? Kew the sudoku puzzles We have three copies of Mindfulness, a large print colouring in book for adults, to give way this month. There are 31 large print, easycolour illustrations to enjoy. Designed for adults, but as Richardson Puzzles says this book can be enjoyed by all. You can even tear out the pages so you can display your artwork. To enter the draw to win one of these books send an email headed ‘Mindfulness’ to giveaways@pqmagazine.com, along with your name and address.

This fantastic collection is published in association with the Royal Botanic Gardens Kew, which has been collecting and conserving plants for some 260 years. This beautifully illustrated puzzle book is something a bit different for the sudoku fan. There are over 200 sudokus to solve, graded from easy to expert. It’s a great way of bringing numbers and nature together. For a chance to win one of these fab books email us at giveaways@pqmagazine.com with your name and address and we will put you in the hat to win this prize. Head up your email ‘Kew gardens’.

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 March 2024. The main draw will take place on Monday 18 March 2024.



PQ Magazine March 2024

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