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How to manage resources when money is tight


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Plan the next steps in your ACCA studies The ACCA March exam results are out this month, take a look at your options below so you can decide which route is best for you.



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News 08ACCA innovation Association launches new ethics model 10Google controversy Who’s pulling their advertising? 12Money laundering New oversight body to be launched Features, etc 06Mind your Ps&Qs ACCA and the controversial new ethics module; and our jobs board ‘sexist’ advert debate continues 14PQ Awards 2017 We speak to Tim Mpofu, the recently crowned PQ of the Year 16ACCA CBEs We explain what the new ethics and professional skills module entails 17VAT update HMRC makes a ruling on adult colouring books; and Boots has a change of heart on airport VAT policy

18AAT exams How the new

synoptic assessments work, and how best to tackle them

20CIPFA report Why the public

May 2017 26Survey How accountants are

perceived across the UK 27Financial futures How to deal with financial futures questions 29ACCA syllabus changes The best route to take when it comes to sitting your exams 31Back to basics Double entry bookkeeping explained 32Careers #2 Life at PwC; and our social media round-up 34Fun stuff – and our giveaways The columnists Robert Bruce Directors must take the bad along with the benefits 8 Prem Sikka Boardroom blitz 10 Carl Lygo Top columnist bids PQ magazine a fond farewell 12 Subscribe to PQ magazine It’s FREE – go to page 28 or ABC July 2015 – June 2016


sector is coming under increasing financial pressure

21National insurance We

explain how this tax works

22Exam technique Does

practice really make perfect?; and our Troubleshooter

24ACCA exams What the

examiners have to say; and how to get your business started

Publisher’s statement: We send a digital issue of the magazine to an additional 9,466 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)

Are you ready to PQ-go? How exam ready are you? Well, together with Rogo, the online exam experts, and top tutors we are launching It’s going to be a free exam testing site for accountancy students and will be officially launched on 15 May 2017. The aim is to help you decide if you are ready to ‘go’ for the exams. We are starting mainly with the AAT assessments, but ACCA F3 will also be available. In the coming months we hope to have uploaded a test for every paper, so we are calling on all you tutors out there to get involved, too. Thanks to all those who have shown an interest in becoming a PQ Ambassador. Remember, there is still time to get involved (see page 8 for more details). As promised, we have also released a short video of the PQ awards – don’t worry, it’s only three minutes or so long – and focuses on our NQ and PQ of the Year winners. Take a peek – go to It is always worth visiting our website, especially at exam results time. Anything we get goes straight up online. We also have lots of great news and resources that never get in the magazine. On that note, don’t forget to check out the latest issue of NQ magazine. Our sister title is full of articles that are relevant to you. In the latest issue we explain why the FD should own the Internet of Things, have a round-up of what the FRC has been up to recently and explain how the Competition and Markets Authority is targeting illegal cartels! It’s an e-mag, and you can sign up for free at by clicking on the ‘nqmag’ button at the top of the home page. Finally, I just want to say a big thank you to Carl Lygo, who has been a top PQ columnist. We wish him luck in whatever he does in the future, although somehow I don’t think he will need it. Thanks Carl, it’s been fun. Graham Hambly, PQ magazine editor –

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PQ have your say

email Only way is ethics… I recently received news of the latest ACCA innovation – the new Ethics and Professional Skills Module. I did raise an eyebrow when I saw the new £60 fee – it is free now – but that isn’t what is worrying me the most. I am shocked that it will now take 20 hours to complete. I have a full-time job, the exams, and a life outside accountancy! Surely we should be tested about ethics throughout the exams, why such a giant step-up online? I wondered if I am being punished for not opting to study full-time. I have my ethics and

professional integrity put under scrutiny every day. I, for one, was not surprised to read your lead story on page 12 (PQ magazine, April 2017) about Accountancy

Europe’s research into unethical behaviour at work. I am one of the 33% who encounter unethical behaviour ‘sometimes’. I am not sure how a 20-hour module is going to help me. OK, I will now get a certificate, but I have to admit I am hoping I can get through it all before the ‘improvements’ come in. That said, I quite like the idea of a case study. I do think this is long overdue and ACCA should be applauded for this move. The introduction of CBEs is also something that has to come, and I will be embracing this change. Name and address supplied The editor says: We would welcome a response from ACCA.

Our star letter writer wins a fantastic PQ memory stick! Advert is sexist

I was reading the April issue of PQ magazine and I must, to some extent, agree with Lisa Bartup, who wrote to complain that your PQ Jobs advert is sexist. And the photo is inappropriate, because it doesn’t reflect how the average female accountant dresses. We have a dress policy in our office and it specifically states what should not be worn at any time (including casual fridays), and that lady in the advert would breach the dress code. Feminists might find it sexist. Maybe... I just think it is inappropriate and doesn’t reflect how people dress in the industry. Name and address supplied The editor says: We think she’s at home – I don’t think anyone would dress for work like that (not in accountancy, anyway!).

Sorted, thanks to

Fuss about nothing

Does Lisa Bartup think that young, female accountants can’t be sexy? I really don’t think your jobs board advert is at all offensive – how can a picture of a pretty young

woman relaxing at home (presumably having just landed her dream job) be offensive? We really need to be smashing stereotypes about accountancy – we are not all frumpy bores with no conversational skills, fashion sense or social graces. As anyone who

works in the profession surely knows, our profession does attract all sorts, including those who are outgoing, fun and – dare I say it – sexy. It really is a fuss about nothing in my humble opinion. Keep up the good work. Alex Carey, by email

CIMA logo debate

We went on LinkedIn and asked CIMAs what they thought of their new logo. A few knew that the ICAEW had a new logo, but many hadn’t seen CIMA’s! Others were confused about the whole CA CIMA thing.

And then there was Adrian Rutter, who said: “This is the middle of the end for CIMA as an independent specialist voice of management accountancy, an end that began back in 2011 when this ‘joint venture’ with the US CPAs was first sprung on us. Apparently CIMA’s new logo is ‘shared’ with the AICPA which, whatever the claims for the supposed new Association, has been the ‘American Institute of Certified Public Accountants’ since 1887. “So that’s it. Something like 90% of CIMA members didn’t bother voting in the recent ballot on CIMA’s long-term strategy, leaving room for the Helicon to claim that members had overwhelmingly endorsed CIMA’s takeover by the new/old AICPA. I don’t know what ‘CA CIMA’ is supposed to mean, but I am sticking to FCMA.” Chee Kin Tang emphasised he was also sticking with ACMA, or chartered management accountant. ACCA-X DOES IT AGAIN ACCA went on LinkedIn to celebrate the fact that ACCA-X has won its sixth award. This time it was for ‘Best training Initiative’ at the 2017 Association Excellence Awards in London. ACCA also picked up the ‘Overall Best Association Award’ at the event. • For more social media news see page 32.

PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: Website: | Editor/publisher: Graham Hambly | Advertising manager: Polly Thrasivoulou Associate editor: Adam Riches | Art editor: Tim Parker | Subscriptions: | Contributors: Robert Bruce, Prem Sikka, Carl Lygo, Tony Kelly, Phil Gammon | Origination and print services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email

Published by PQ Publishing © PQ Publishing 2017

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PQ news

ROBERT BRUCE Directors must take the bad with the good There are corporate glories and corporate disgraces, yet the kudos and blame are not spread equally. Take mergers and acquisitions. The statistics show us they tend to end in failure. But when announced they are treated as masterstrokes. The company directors leading the charge bask in their perceived cleverness. Their share options are burnished and they accept the glory. But when things don’t go well directors are terrible when it comes to taking responsibility. If a regulator fines a company for not doing what it is supposed to do the shareholders and customers foot the bill. When it becomes obvious that senior directors are being paid an outrageous amount of money, with bonuses on top, all while performance has taken a dive, who gets the blame? Step forward the non-executive head of the remuneration committee, to be pilloried at the AGM, and the consultants advising on remuneration. The people who suddenly fade into the shadows are those who ought to be taking the blame. But it is rarely the board of directors who are there, collectively, taking the blame for their decisions. The buck rarely stops with them. It is parceled out to someone else, or another committee, another department, in another room. The fundamental governance body, the board of directors, melts away. But business is becoming a much more scrutinised part of society. To survive directors are going to have to accept many more of their responsibilities. n Robert Bruce is an award-winning writer on accountancy for The Times

ACCA unveils enhanced ethics module for PQs ACCA has formally unveiled its new, improved (and much longer) Ethics and Professional Skills Module. The new module launches on 31 October 2017, and has been designed to prepare students for the skills being assessed as part of the new Strategic Professional exams, particularly the Strategic Business Leader case study, which is being introduced in September 2018. ACCA believes the new module also ensures ethics keeps its place at the heart of the qualification. PQs may be surprised to learn

they will have to pay a one-off £60 fee for access to the module. However, ACCA has been quick to point out that introducing the new case study and beefed-up ethics module will in fact cost students less in exam fees – £6 on current standard entry prices. It has been suggested to PQ by one leading tutor that by merging P1 and P3 ACCA could have lost a lot of revenue. But it has priced the case study at £190, well above the £128 cost of the other papers at the professional

Booking issues for ICAEW ICAEW has had problems with its booking system for the June exams. The institute explained that on Monday 27 March it experienced a couple of ‘issues’ when it opened the exam booking session for the June Professional exams. ICAEW told PQ that it updated students, employers and tutors

Irish eyes smiling: meet PQ magazine’s ‘Apprentice of the Year’ Catherine Devine. She is pictured here with Nigel Harra, senior partner and Head of Audit BDO Northern Ireland and Christine Brown, the Head of Belfast Business School (Belfastmet)

immediately via social media and its website, and followed this up by sending emails and responding quickly to any enquiries received. The first issue affected students in the UK. Some PQs were unable to book their place at the Tax Compliance CBE. However, they were still able to book the other five

level. The introduction of a fee for the module, which was free, means the changes are cost neutral. To pass the whole of the professional level will now cost £634 in exam fees – if you pass all your exams first time. CEO Helen Brand (pictured) explained ACCA has redesigned the module to ensure finance professionals are better equipped with the professional skills needed by employers and help them meet the challenges of the 21st century’s disruptive economy. She went on: “Through developing and demonstrating a high standard of ethical and professional behaviours alongside the technical knowledge acquired through passing the ACCA exams, ACCA professional accountants will be able to make an immediate impact in their workplace.” professional level exams. These issued were fixed by the end of the day (27 March). Meanwhile, overseas PQs were unable to book any professional level exams. This was rectified by Wednesday 5 April. The ICAEW said it was working with its suppliers to resolve the issue as quickly as possible, and was keen to send its apologies to all students affected.


We are looking for PQs and lecturers to become more involved in the magazine. PQ is looking to create our own ambassadors, readers who want to help shape the magazine and drive the development of the accountancy profession forward. We believe we can give you a real voice to influence the issues you care about. It would also help make your CV stand out from the competition. If you are interested in filling this role please email and attach your CV.

In brief Underline the key elements The ACCA F5 examiner told future candidates that they must remain vigilant when reading and interpreting the requirements of a question. It may be helpful to underline both the instruction and the content requirements. Read more insight on page 24. Two for the price of one The AAT new advanced level synoptic exam is effectively two exams for the price of one, according to First Intuition’s Nick 8

Craggs. He explained that the test is split into two sections, each of 90 minutes long. And when you move to second section of the exam there is no going back! Find out more on page 18. Win an Apple watch PQ has joined forces with top recruitment firm Howett Thorpe to offer one lucky reader the chance of winning an Apple watch. To be entered into the draw just email with the subject line ‘PQ Apple Watch’. Include your name, contact telephone number and which qualification you are studying for. We will then help Howett Thorpe pick a winner! CIMA pre-seens The case study pre-seens are out and everyone is talking about the operational case study’s Ashworth Lea. Surely the examiner means Aston Martin here… There is also talk of the cars being

featured as prominent ‘stars’ in many highly successful films. Are we talking James Bond and his DB5? The management case study is based around a chain of value retail stores, think the £1 store here, or should we say €$1! BES is certainly having an effect in the market. However, remember CIMA says you don’t need market experience to answer the case study. But who is not going to check out the Aston Martin site? Maybe you could hire one to pick you up after the exam! PQ Magazine May 2017



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PQ news

PREM SIKKA Absence of worker directors weakens democracy The BHS scandal again highlighted the need to democratise major UK corporations. With the absence of workers from the board no one challenged corporate practices or asked directors to make good the employee pension scheme deficit. We all spend a large part of our lives at work, but have little say in decisions that affect our lives. In the political arena, all adults can put a cross on a ballot paper every four or five years, but even this notional democracy is absent from the corporate world. Unlike shareholders, workers have a long-term interest in the well-being of corporations. They invest their brains and their brawn to generate wealth, but have no corporate governance rights. During her campaign to become Conservative Party leader Theresa May promised “to have not just consumers represented on company boards, but workers as well”. Under pressure from large corporations, this promise was very quickly replaced by voluntary consultation with workers. Within the 28 EU countries, only 11 lack a statutory requirement to have worker representation on company boards – including the UK. A two-tier board system marked by a clear distinction between an Executive Board, which manages the business, and a Supervisory Board, which oversees the Executive Board, exists in 10 EU countries, including Germany. Here, the absence of workers on company boards weakens the UK’s claim to be a leader in democracy. n Prem Sikka is Emeritus Professor of Accounting at the University of Essex

What are the bodies doing about ? The boycott of Google (and YouTube) by some of the world’s leading brands could cost it in excess of £600m. Many leading companies have withdrawn their advertising in protest at their brands appearing next to, among other things, homophobic, racist and extremist organisations and Holocaust deniers. PQ contacted the professional bodies and Big 4 firms to find out their position. The AAT said in the wake of recent concerns regarding ad placements on Google’s Display platform it has ceased all campaigns where Google algorithms decide where its ads are located. In future it will use only managed

ICAEW rebrands

In an effort to remain modern and relevant the ICAEW has launched new branding. With the rebrand the institute is hoping it has created something that is “strong and distinctive to differentiate ICAEW from its competitors in a global marketplace as well as support future The ICAEW’s last three logos strategic aims”. The main change is to Economia and her three symbolic tools. The rod signifies command, the rudder guidance and the dividers, which have gone red, represent measurement and assessment. She has definitely got curvier hips. PQ quite likes it!

ACCA preparing for Brexit ACCA has reassured members, students and staff in the UK, Europe and around the world that it continues to be ‘business as usual’ after the UK government triggered Article 50 of the Lisbon Treaty. The ACCA said: “We firmly believe that there is no reason to anticipate any change to the global

Use your right brain! The role of the traditional CFO is blurring, according to an EY global survey of finance leaders. Aspiring CFOs will need to develop leadership and team-building skills, including strong relationships with the CEO and board, if they are to transition to a CFO role in the next five years. Finance leaders will increasingly be characterised by more right-brain attributes, such as empathy, innovation and imagination. These will help them inspire and generate loyalty, according to the study. One Million Futures Deloitte has unveiled a five-year social impact 10

placements where it can manually specify sites that AAT adverts can appear on, thus eliminating any risk of inappropriate placement. CIMA said it took the matter very seriously. It is currently investigating internal processes. ACCA stressed it did not do blanket advertising. It uses two main forms of advertising – keyword-based pay-per-click and ‘native’ advertising, where sponsored ACCA content appears at the end of news articles and blogs. ACCA decides on which websites its adverts run. The ICAEW said that it was not currently running any adverts on the

recognition and portability of the ACCA qualification.” ACCA head of UK, John Williams, said that as with any period of change and uncertainty, professional accountants will play a critical and strategic role in bringing much needed stability to business and society.

strategy with the aim of improving the lives of one million people. One Million Futures will see the firm work with more than 45 charities, schools and social enterprises across the UK to invest in a range of programmes that seek to raise aspirations, improve skills and develop leaders. Deloitte employees will dedicate 250,000 hours of volunteer support. Automation not all bad Up to 30% of existing UK jobs are susceptible to automation from robotics and AI by 2030, says a new report from PwC. However, the firm is quick to point out that the job losses should be offset by job gains elsewhere in the economy. The study estimates that the UK (30%) has a lower proportion of existing jobs at

Google Display Network, and Deloitte also said it did not have any live advertising campaign running. EY was the first of any of the respondents to reply to our questions. It said: “EY takes its brand management from concept through to execution seriously and risk management is an integral part. We use industry-leading brand safety tools across all our centrallybought paid media… For our global campaigns we avoid network buys and instead target our ‘white lists’, or explicit pool of publishers which align to our brand. “We are continually monitoring, updating our policies and tools, and are quick to address any media buys that don’t conform with our overall approach.” • At the time we went to press we had not received responses from CIPFA, ICAS, PwC or KPMG.

Another first for the AAT

AAT has become the first accountancy body to sign up to the Women in Finance Charter. Introduced by HM Treasury as a pledge for firms to work together to help build greater gender balance in financial services, the charter was created to reflect the government’s aspiration to see gender balance throughout the industry. It commits firms to support the progression of women into senior roles by focusing on the executive pipeline, as well as carrying a number of other pledges to promote gender diversity. AAT HR chief Olivia Hill said: “AAT has been at the heart of encouraging gender diversity across the accountancy profession and through signing we are demonstrating our commitment to this important cause.”

potential high risk of automation than the US (38%) and Germany (35%), but more than Japan (21%). PwC’s report emphasised that while automation will boost productivity and not necessarily reduce total employment in the long run it could widen income inequality. Top 10 finish for KPMG KPMG has been ranked the eighth most attractive employer for business students in the Middle East, according to research carried out by Universum. KPMG moved up six places on its 2015 ranking and the firm’s Doha office took on 20 graduates from universities in Qatar and around the world. Overall, KPMG Middle East and South Asia saw more than 2,500 new hires in 2016. PQ Magazine May 2017

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PQ news

CARL LYGO It’s time to say farewell – and take on a new challenge In March, I left BPP 20 years, one week and one day after I had joined. In that time I built a law school, a business school, a school of health and a pathway school, and founded a university. It has been an amazing experience. I have really enjoyed working with (and in competition with) many greats of the accountancy profession, who have made a lawyer feel welcome in their sector. I have been fortunate to surround myself at BPP with many talented professionals who shared my passion for high quality education. BPP has led on online professional education, led by Martin Taylor, and helped accountancy firms take advantage of the new apprenticeship levy. This year the university I founded celebrated its 100,000th alumni and I have been able to use a generous scholarship fund to support students from diverse backgrounds to break into the elite professions. I was brought up by a single parent mum in South Yorkshire who was unable to read or write. I was the first in my family to pass an exam, never mind go to university. For me education has always been that important, life-transforming force. So thank you to all those who I have worked with over the years and all the students who placed their trust in BPP. I hope that I have made a difference. I am now concentrating on working in the schools charity sector to give disadvantaged children a better start in life. The best is yet to come! n This is Professor Carl Lygo’s final column for PQ

New AML watchdog created A new watchdog has been set up to help close any loopholes used by criminals to launder their dirty money in the UK. The Office for Professional Body Anti-Money Laundering Supervision (phew!) – OPBAS to you and me – will sit within the Financial Conduct Authority and should be up and running by the start of 2018. The government wants the

OPBAS to tackle the potential weaknesses in the supervisory system that it feels criminals and terrorists may be trying to exploit. On top of the FCA, HMRC, the Gambling Commission and the Faculty Office of the Archbishop of Canterbury (!) there are 23 other anti-money laundering supervisory bodies, mostly accountancy and legal trade bodies.

Call us CA CIMA!

CIMA is another accountancy body to change its logo this month. However, unlike the ICAEW (see page 10), CIMA’s change is more fundamental, and just a bit more confusing. CIMA students have received a letter explaining the updating of the brand. It was pointed out that the new ‘bold and iconic’ brand signals that CIMA is now part of one global family with a shared commitment to management and public accounting. That ‘family’ is now racking up the designatory letters. We have CIMA, the American Institute of CPAs (AICPA), and the Chartered Global Management Accountant (CGMA) designation. You can now add to this with Association, or the Association of International Certified Professional Accountants. But what we don’t know is where the CA, which now precedes the CIMA logo, fits in. The trade and registration marks that now feature in the logos also feel very American – CIMA never felt the need for these before.

It is being proposed that the new watchdog will have powers to fine supervisors if money laundering regulations are breached. Another of its tasks will be to simplify the anti-money laundering rules that apply to different industries. OPBAS will be funded through a new fee on professional body AML supervisors and legislated for by the end of the year.

F9 guidance

A warning has gone out to CBE F9 ACCA sitters from the examiner. The December Examiner’s Report highlights that having the use of a spreadsheet does not remove the need to show the build up to, for example, an internal rate of return (IRR) or to show the detail of a cost of equity calculation, nor does having the ability to type an answer remove the need to write professionally with good use of English. In too many cases in December written answers were poorly structured and full of errors. • See page 24 for more

Growing number of young people are falling victims to identity fraud. Cifas, the UK’s leading fraud prevention service, is particularly concerned with the 34% increase in this sort of crime among the under 21s. It wants to see better education around fraud and financial crime and is urging young people to be vigilant about protecting their personal data. A record 172,919 identity frauds were recorded in 2016, more than in any previous year. However, while the percentage of of young victims (under 21s) jumped, for those in the 21-30 age range there was a drop of 0.19% in identity fraud to 22,572.

Identity fraud on rise

asked how you found the exams – were they easy, OK or hard?

on. If you want to read more fun stories turn to page 34.

date was the £4m it gave Deloitte last November.

PwC keeps Oscars gig While all electronic devices have now been banned backstage at the Oscars, PwC has managed to keep its job. The accountancy firm has even managed to find an additional role on the night! There will be a PwC employee in the control room on Oscars night who will know the winners. It helped that PwC quickly took responsibility for the ‘unacceptable’ mistake early

FRC to review sanctions The Financial Reporting Council (FRC) has said it wants to review the fairness and the effectiveness of its sanctions and fines. Announcing the review, the FRC said it needs to ensure the current set-up is adequate to safeguard the public interest and deter wrongdoing. While there is technically no limit to how big a fine it can impose, the largest to

ICAEW the assessor ICAEW has been approved as an assessment organisation for the level 4 accounting trailblazer apprenticeship. This route into the profession is aimed at schoolleavers who are looking at alternative routes to university, as well as graduates from all disciplines and professionals who are looking for an opportunity to change careers and retrain.

Cifas Mike Haley said there are three simple steps to protect yourself online: use strong passwords; download software updates when prompted on your devices; and avoid using public wi-fi for banking and online shopping. He went on: “We all need to take responsibility to secure our mail boxes, shred our important documents like bank statements and utility bills and take sensible precautions online – otherwise we are making ourselves a target for identity fraudsters.”

In brief CIMA study planner a hit The CIMA study planner has been a big hit, with more than 2,500 PQs having signed up when we visited CIMA’s James Wood. Students can now enter their study time and the planner will be able to calculate when they will be ready to sit the exam. Some students may quake at finding out the number of hours of study time they have left, but the planner is just there to be your study buddy! CIMA is also using it to get feedback on the exams, as you will be regularly 12

PQ Magazine May 2017

Accountancy career opportunity:



Millions of opportunities. One global qualiďŹ cation.

PQ Awards 2017 Why accountancy and CIPFA? At school, I always performed better in the numerical classes when compared to more linguistic subjects. This ultimately led to a degree in accounting and finance, which exposed me to the opportunities available within the accountancy profession. I chose to study CIPFA because it is the only professional accountancy body exclusively dedicated to public finance in the UK. I am passionate about the work public services do and CIPFA provides the necessary foundation and continued development to ensure that as a professional, I can carry out my role effectively.

Public servant with a love for numbers Meet CIPFA student Tim Mpofu, who was recently named our PQ of the Year

How are you getting along? How far have you got with your studies? I am currently going through the professional diploma stage of the qualification. I plan on taking my final exams in the winter. So how have you found the exams? Any tips on studying? As you might expect the exams can be challenging. Exams are now online which took some getting used to as I had always done them on paper. However, if you apply yourself and work hard you can score really well. I think it’s important to understand your style of learning and start working through the course materials early on.

Top gun: Tim with his trophy at the PQ Awards

Like many accountancy professionals you have a full-time job. How do you find balancing work/study/life? It can be tricky to manage your time, especially during the busier periods of

Up close and personal

Job title: Finance graduate First job: Sandwich artist at Subway What are you reading? The Establishment by Owen Jones Last CD bought/downloaded: Colouring Book by Chance the Rapper Favourite TV show: White Collar When was the last time you laughed out loud? When I watched the viral BBC video of the interview with the professor who got gate-crashed by his children How do you chill out? Usually playing FIFA, sometimes a walk in the park, and spending time with family and friends What is your claim to fame? I currently hold the record for the longest run of games unbeaten in the work five-aside weekly fixture (records began when I joined Ealing).


the year. I always find that it is important to set a plan and stick to it as much as possible when studying. As part of the training programme, we also have days where we can attend face-to-face classes as well as study leave, which is really useful. I like how there are many practical applications at work that are relevant to the course materials. Tell us a bit more about your role at Ealing Borough Council. I am part of the graduate programme at the Ealing. As part of the programme, trainees are placed in a key business function for a six to 12-month placement in which they gain an in-depth understanding of how the local authority accounts for its service provision. In my two years at Ealing I have had placements in Finance Corporate, assisting in producing the statement of accounts, and in Adult Social Services, where I applied management accounting techniques learnt in my studies to budget

monitoring and spend analysis activities. Where do you see yourself in five years’ time? I will have completed my studies and qualified as a Chartered Public Accountant, making a positive impact on the public sector and society as a whole. What has it been like being our PQ of the Year? Were you surprised to be the winner? When my name was called out at the awards evening it was an amazing feeling! It’s great to be recognised for your work and contributions, but it’s equally humbling to see how many people are rooting for your success. I am grateful for everyone at CIPFA and Ealing who put my name forward. What’s the best piece of advice you have ever had? If at first you don’t succeed, try and try again. PQ

PQ Magazine May 2017


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Spotlight on ethics Judith Bennett outlines what ACCA’s new ethics and professional skills module entails and explains its key elements


n April’s PQ I covered the practical ways that you can take ACCA’s F5– F9 exams through our computerbased exams (CBEs). As outlined in the article, our CBEs are closely aligned to and reflect real modern working situations. In keeping with the need to ensure our students have the complete blend of skills, ACCA will be introducing our new Ethics and Professional Skills module on 31 October this year, an integral part of the ACCA Qualification designed to increase your employability. It’s the first of its type in the market and exclusive to ACCA. By introducing you to the full spectrum of advanced ethical and professional skills and exposing you to realistic business situations we’re doing everything we can to ensure you shine with recruiters and are credible in the workplace. It supplements your strategic and technical expertise by helping you develop the ethical and professional behaviours you’ll need to successfully complete your Strategic Professional exams, as well as preparing you for a successful career as a trusted and confident strategic and forward-thinking professional accountant. Six interactive units Comprising of six interactive units, the module covers: ethics and professionalism; personal effectiveness; innovation and scepticism; commercial awareness, analysis, evaluation and problem solving; leadership and teamworking; and communication skills. Ethics and professionalism: You’ll be introduced to the broad ethical and professional values that underpin all the other professional skills and behaviours explored in the module. Personal effectiveness: The personal effectiveness unit will show you ways to maximise the quantity and quality of your work output and how you communicate and interact with others, as well as ensuring you make the most of the resources available to you. Innovation and scepticism: This unit will help you understand how to encourage open mindedness and innovative thinking to create or suggest imaginative solutions to problems all within the context of suitability, feasibility and acceptability, while at the same time recognising the limitations of solutions and any problems 16

with their implementation. Commercial awareness, analysis, evaluation and problem solving: Commercial awareness, analysis, evaluation and problem solving will be explored to improve your ability to view situations from a commercial or business perspective, considering factors that influence the success of business and an understanding of the business processes, relationships, risks and costs. Leadership and team-working: You’ll get to know more about different types of leadership approaches and traits that can be adopted or adapted at any level of the organisation, including how effective leadership involves inspiring, motivating and supporting teams to work effectively and efficiently, delivering value for your organisation. Communications skills: We will help you understand about how to effectively communicate with others in a business environment, including clients, customers, colleagues and external authorities. The module will include a comprehensive and interactive assessment, where you’ll be presented with a series of video clips and other media about a situation based on the six units. You’ll take on the role of a professional accountant and face challenges which you have to identify and explore. The skills being developed will give those who qualify with ACCA the confidence and tools they need to navigate the complex world of commerce, staying ahead of the pack by

demonstrating they understand and can apply ethical behaviour in real-world situations. To take maximum advantage of the support provided by the module it is recommended that students complete it before attempting any exams at the new Strategic Professional level that will be introduced in September 2018, which is why we are launching the module in October of this year. The module takes approximately 20 hours to complete. Future proofing Our intention in making these changes is to ensure the qualification is as relevant as possible and that the next generation of ACCA members continue to be the most valued and sought-after across the globe. As a result of the changing business landscape globally, employers are looking for their professional accountants to add value early in their career. It’s important that ACCA professional accountants are able to make an immediate impact in their workplace. Future proofing the ACCA qualification will assist future generations of finance professionals from across the globe to rise and meet ever-evolving and changing work challenges. As an ACCA student, your ethical and professional development starts from day one, as soon you register with us. ACCA will not only train you to be a good accountant, but to be an accountant that is good, too. PQ • Judith Bennett, Director of Learning (interim), ACCA PQ Magazine May 2017

VAT update PQ

HMRC sets out the VAT treatment for colouring and dot-to-dot books – is it simply child’s play?


MRC has issued a VAT brief on the scope of the zero rate for colouring and dot-to-dot books, effective from 1 April 2017. It explained that the past two years or so has seen a growth of books labelled or described as ‘adult colouring books’ and ‘adult dot-to-dot books’. Many suppliers have zero-rated these books in the belief they are a general book (like a paperback or hardback novel), placing reliance on Item 1 of Group 3 to Schedule 8 of the VAT Act 1994 – as you do! However, the leading case on what is a book is set out in ‘Customs and Excise Commissioners v Colour Offset Lid [1995]’. In this case, the High Court found that a book is produced on paper or cards, consists of a number of leaves and is bound in a stiffer cover. In addition, perhaps more importantly, the book must be designed to be “read or looked at”. The briefing states that while the adult colouring and dot-to-dot books satisfy most of the conditions they are not designed to be read or looked at. In fact, they are designed to be ‘completed’. Therefore, while these books are not zero-rated under Item 1 of Group 3, they could be zero-rated under Item 3 of Group 3 as ‘children’s picture and painting books’ if changes are made. HMRC is clarifying its policy

Colour me VAT

concerning the VAT treatment of these types of books, particularly those sold after 1 April 2017. Coluring books that are suitable and held out for sale to children under the age of 18 years are zero-rated. Most of the content of the books currently sold as ‘adult colouring books’, or as books ‘suitable for grown ups’, are also suitable for children under the age of 18 years.

However, the way they are marketed and held out for sale, in HMRC’s view, prevents them from being eligible for the zero rate. HMRC said it accepts that colouring books and dot-to-dot are VAT zero-rated unless one of the following applies. The books are: • Marked as suitable for adults or grownups. • Held out for sale in retail shops together with other adult books that are unsuitable for children or are not appropriately marked as suitable for children when for sale on a website. • Contain images reflecting profanity, pornography, violence and illegal acts. If the book meets any of these three conditions then the standard rate applies. HMRC has said that it does not intend to seek recovery of any tax on colouring or dot-to-dot books sold prior to 1 April 2017 where the content is suitable for children. This is irrespective of how the book was marketed or held out for sale at the time. However, books that contain images reflecting profanity, pornography, violence and illegal acts (as determined in VAT Notice 701/10: zero-rating of books and other forms of printed matter) will not be treated as zero-rated. The content of such books, explains the brief, can never be seen as suitable for children. PQ

Check in at Boots for a VAT refund

Who should pocket airport VAT refunds? Graham Hambly asks the question


irport shoppers received a new concession over VAT refunds recently when retail giant Boots agreed to return tax discounts at the checkout. Airport shops have to charge VAT on purchases made by shoppers travelling inside the EU. However, those going further afield are meant to be exempt VAT. Until last summer, airport retailers were simply pocketing the VAT paid by exempt passengers. WH Smith was the first retailer to return some of the tax to eligible travellers, and those flying beyond Europe received a discount if they spent over £6. Now anyone flying outside the EU who spends over £5 in Boots’ airport shops will, on production of their boarding pass, be given back the VAT. That means on an

PQ Magazine May 2017

£8.50 bottle of suncream the flyer can expect a £1.42 refund. Boots UK’s Asif Aziz said: “Over the past year we have been carrying out a comprehensive review of VAT relief concession at these stores to find out the right solution to meet customers’ needs, while keeping our [airport] prices the same great value as in our high street stores.” He explained: “We will introduce a new scheme in which customers travelling outside the EU will not pay VAT on VAT-able items which are priced at or above £5.” In 2015, the then chancellor George Osborne announced a review of duty-free shops to ensure that the airport retailers were passing on VAT savings to

customers. He was concerned about the ethics of retailers keeping up to 50p of every £1 of potential VAT savings for themselves, instead of passing them on to shoppers. Dixons, meanwhile, has said that it will not offer VAT refunds as it felt customers at the airport benefited from savings through lower prices. PQ 17

PQ AAT exams


Nick Craggs explains how the new synoptic exams work, and advises you on how best to tackle them

n this month’s article there will be no jokes about farmers, no references to Arsenal players from the days when they actually stood a chance of winning something. This is a serious article about a serious subject – the AAT synoptic exams. It is likely that AAT students who started their AQ2016 studies in September 2016 are coming up to sit their synoptic exam. This is pretty much a test of everything you will have studied at that level. The first thing to think about is when you will be ready for the synoptic exam as, unlike the individual unit assessments, these are not on demand. For the Foundation Certificate in Accounting, it is more of a case of when is it not on offer, as it is available for three weeks in any four-week period. However, the Advanced level and Professional level synoptic exams are only available for a one-week period roughly every six weeks. Once you have decided which synoptic window you are sitting at you need to plan your studies, and this will vary depending on which level you are undertaking. All synoptic exams have some element of human marking so it will take up to six weeks to get your results. When you come to the written questions you should always try to relate it back to the scenario. You should think about the wider impact of whatever is happening, don’t look at everything in isolation. I always like the acronym PEA. P – Make a point E – Explain your point A – Apply your point The individual exams Foundation level: The Foundation level synoptic will examine you on your knowledge of the Bookkeeping Transactions, Bookkeeping Controls, Elements of Costing and Working Effectively units. It does not test you on the Using Computerised Accounting Software unit, so you may want to leave this until after the synoptic. There is no individual assessment for this unit, so once you have studied this you will need to return to your notes for the first three units, and revise them. Then you should be ready to attempt the synoptic exam. This is split up into seven different tasks. These will not be individual tasks specifically on individual units. You will find that each task will draw on different units, and will have a combination of written and numerical tasks. This is meant to make it more like the real work place, where you need to think 18

of the wider picture, and not just look at subjects in isolation. Advanced level: What’s worse than a synoptic exam? Two synoptic exams! However, that is what the advanced level synoptic exam effectively is. It is split into two sections, each of one-anda-half hours. When you move into the second section of the exam, you CANNOT move back to the first section. So when you move to the second section, you need to be happy with your answers to the first section. Also, you cannot carry any time over, so even if you finish the first section with 10 minutes to spare you will not carry that time over into the second section. The first section is where the Advanced Bookkeeping, Final Accounts Preparation, Management Accounting: Costing, Indirect tax and Ethics units are assessed. There are four tasks, and again they will each test you on a variety of units, and they will test both numerical and written aspects. So, for example, you may be asked if a VAT error a client has made can be corrected on the next return (bringing in knowledge from Indirect tax), then ask you for the journal to correct the records (Advanced Bookkeeping) and then ask you to explain what will happen if the client refuses to correct it (bringing in Ethics). The second section is purely spreadsheets. This works in similar fashion to the AQ2013 spreadsheets exam, in that you download a spreadsheet, work on it, and then upload your final answers back into the exam software.

Professional level: At the professional level students still have to sit two optional units, but the optional units do not form part of the synoptic exam. The units assessed in the synoptic exam are the Management Accounting: Budgeting, Management Accounting: Decision and Control, Financial Statements for Limited Companies, and the Internal Controls Material. Pre-release material I would suggest that you leave your optional units until after the synoptic exam, as that means your knowledge of the mandatory units will be relatively fresh, as you will need this for your synoptic exam. You will be sent some pre-release material for the synoptic exam, which you should read thoroughly. You should: • Familiarise yourself with the industry and organisation. • Consider topics from Budgeting and Decision and Control, and how they could apply to the scenario. • Review the financial information, calculate ratios and consider the standards and how they apply. • Consider any recommendations you might make. • Evaluate the systems weaknesses and their impact on performance, staff and organisation future. When you attempt the exam there will be six tasks, and again, these will be a combination of numerical and written tasks. PQ • Nick Craggs is a lecturer at First Intuition PQ Magazine May 2017

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PQ CIPFA report

All spent out…?

With the public sector under increasing financial pressure, CIPFA has a some suggestions that just might help


or the Government to be effective, ministers, policy makers and civil servants require a clear, evidence-based understanding of how it is performing, especially during this period of heightened public finance pressures and tightening spending controls. In a report released recently, CIPFA and the Institute for Government warned that unless immediate action was taken, the UK faced a combination of failing public services and breached spending controls. The report, The Performance Tracker, used the Government’s own data to assess the effectiveness of public services in five specific areas: hospitals; adult social care; schools; police; and prisons. The analysis found that after initial success in improving public sector efficiency following the 2010 austerity drive, the Government is now struggling to implement the spending cuts handed down in the 2015 Spending Review. The recent Budget pledge to boost social care funding by £2bn over the next three years provides welcome news for many councils, particularly given the report’s findings. Nevertheless, the Chancellor’s plan for government departments to outline spending cuts of up to 6%, in a bid to save up to £3.5bn by 2020, is likely to exacerbate existing pressures on public services. And because of this, it is even more important that future decisions about spending are based on a realistic assessment of the performance of public services that can survive public scrutiny. The 2010 Spending Review was largely successful in terms of the Government’s objectives. Originally conceived as a temporary period of pain following the 2008 financial crisis, before an economic recovery led to a return of business-as-usual, the 2010–15 spending reductions took place after several years of investment and growth. In the beginning, the Government succeeded in improving the performance


of a range of services, maintaining their scope and quality while cutting or controlling spending. The police service successfully implemented large spending reductions between 2010 and 2015. Despite fewer police officers on the ground and signs of stress in the workforce, public confidence in the service grew. Violence in prisons remained level up to 2013, despite an 18% reduction in spending and a 14% reduction in frontline staff. In schools and hospitals, where spending growth was constrained, the data suggests modest improvements in efficiency, where services absorbed rising pupil and patient numbers respectively. However, the government is struggling to successfully implement the 2015 Spending Review. Even before this review there were clear signs of mounting pressures in public services. People had been routinely waiting longer for critical hospital services such

• Thanks to CIPFA for this article

as accident and emergency (A&E) and cancer treatments since 2013, and while clinical standards within hospitals were holding up, this was being achieved through record deficits. Delayed transfers of care from hospital to home or social care had also risen sharply since 2014, up by 40% in two years. Violence in prisons had been rising sharply since 2014, with assaults on staff up by 61% in two years. Since the Spending Review, carried out in November 2015, these trends have only intensified, pushing services such as adult social care and hospitals towards breaking point, and in the case of prisons beyond that point. Governments of all shades have long promised to transform public services by reducing demand, making better use of technology and finding new ways of working. The facts established by the data do not appear to be feeding into decisionmaking. Instead the pattern in this Parliament has been one of the Government: • Failing to develop alternative strategies despite the clear warning signs in the data. • Continuing to pursue approaches that are no longer working. • Being forced into emergency actions in response to public concern. • Providing emergency cash to bail out deeply troubled services. The report goes on to make several recommendations, including that assumptions behind spending decisions should be subject to independent scrutiny. Governments of all shades have long promised to transform public services, but these ambitions have never truly been realised. To counter this, the report suggests that government should consider creating an ‘Office for Budget Responsibility for public spending’, to help embed efficiency within public sector decisionmaking. PQ

PQ Magazine May 2017

national insurance PQ


e have all read about the Chancellor’s U-turn following the Budget in March. First he proposed to increase the rate of national insurance (NI) for self-employed people. Then, in response to pressure, he reversed that decision. The key to understanding this situation is to sort out how the NI regime that applies to selfemployed people actually works. First though, let us just look at why the Chancellor thought it was appropriate to consider increasing the rate of NI. The starting point is the distinction between an employed person and a self-employed person. Broadly, an employed person is under a contract of service, whereas a self-employed person is under a contract for services. In many cases the category someone falls into is clear-cut. In others, HMRC have a series of questions that help us to determine the correct category. It is also possible for someone to try to arrange their affairs deliberately to fall into one category or the other. Why does this matter? There are a number of consequences of the different categorisations, some of which relate to employment protection and rights. However, one of the most important is the treatment for NI purposes. An employed person is liable to Class 1 primary contributions at a main rate of 12% and their employer is liable for Class 1 secondary contributions at a rate of 13.8%. Some of the individual’s earnings can therefore be liable at a rate in excess of 25%. A self-employed person is liable to two classes of NI, Classes 2 and 4. Class 2 is payable at a rate of £2.80 a week. This gives an annual liability of about £146. This applies provided the individual has not reached state retirement age and has profits in excess of a small profits threshold of £5,965. Class 4 is then a profit-related charge. It ceases in the tax year following that in

National insurance and the

level playing field John Colville outlines how NI works and why some consider it controversial

which the individual reaches retirement age. Class 4 is charged on the excess of the profits of the business over a lower limit of £8,060. On profits, up to the upper limit of £43,000, Class 4 is charged at the main rate of 9% and on profits in excess of the upper limit it is charged at the reduced rate of 2%. It is no wonder that the Chancellor perceived that there was inequity between employed and self-employed persons. Not only is the main rate of Class 4 less than that of Class 1, but there is no equivalent of the secondary Class 1 paid by employers. It is worth bearing in mind that this is only one side of the story. Employed and self-employed persons are entitled to different benefits and rights as a result of these different contributions, but this will not concern us further here. The profits on which Class 4 are charged are the same as for income tax. So all the normal rules regarding adjustments of profit, capital allowances,

and the current year basis must be applied. Both Class 2 and Class 4 are collected through the self-assessment system. Both are payable on 31 January following the end of the tax year. However, Class 4 contributions are also taken into account together with income tax in order to determine any payments on account. There will undoubtedly be changes to the NI system over the next few years. The abolition of Class 2, with effect from April 2018, has already been confirmed. Combined with this there are proposed changes to the limits for Class 4. It will be interesting to see whether in due course more radical changes are proposed including an overall increase in the amount of NI that will be paid by selfemployed persons. PQ • John Colville is a senior tutor for Tolley Exam Training. He can be contacted on 020 3364 4500 or


Value Added PQ’s trouble-shooter Philip Dunn tackles a concept that is proving tricky for many of you – Value Added Question: I am an AAT Level 4 student and have recently noted the concept of Value Added, which I find is a term used in various ways across many sectors. What is its significance in management accounting? Answer: Value Added has been defined as ‘Sales (Turnover) less all bought out materials and services’, or the wealth from which a company pays employees wages, salaries and other employee benefits, pays providers of capital, pays government taxation and maintains and expands assets. Value Added is often used in measures of productivity and is perceived by many as a measure of the way management utilises the human capital resource. Such measures include Value Added per £ of employee costs and Value Added per employee. PQ Magazine May 2017

The management accounts of Davenport Feeds Ltd for the year ended 31 December 2016 showed: Revenue £5.38m; Bought out Materials and Services £3.21m; Employee Costs £0.98; and Number of Employees 40. Value Added per £ of Employee Costs £2.17m/£0.98m = 2.21

Value Added per Employee £2.17m/40 = £0.054m (£54250)

Management would expect these measures to increase year-on-year as this would indicate increased productivity. These PIs (Performance Indicators) are useful when preparing an Inter-Firm Comparison. With the information now shown in Published Accounts with some detailed analysis it is possible to extract Value Added. This will be useful to ICB Level 4 students and of interest to other professional accountancy students. PQ • Dr Philip E Dunn is a freelance author and technical editor for Kaplan and Osborne Books 21

PQ CIMA exams

The perils of

practice Jackie Durham explains why too much question practice can be counterproductive if you don’t know the syllabus you are studying in great detail


or many years I have encouraged CIMA students to “practise, practise, practise” in order to get a good result in their exams. More recently, I have found myself advising caution about too much question practice… Let’s be clear: it’s not that question practice isn’t valuable or needed, but too many candidates seem to be doing too much of it too soon. The OT assessment methods lends itself to question practice as preparation, but question practice in itself isn’t preparation. To be successful in the OT exams you need to be confident in all aspects of the syllabus for the subject you are planning to sit, to be able to do the calculations, apply the models, recognise ethical issues, and so on. In effect, you have to have done the learning before you move on to the testing. I speak from experience! If you read my blogs on CIMAconnect, you will know that I, too, am studying for a qualification. My course consists of a 22

mixture of practical assessments and multiple-choice exams to test the underpinning theory. Although very different to your exams and at a different level, the principles behind how to prepare for them are exactly the same. I nearly came unstuck on my most recent exam, all because I focused too much on practising questions and not enough on making sure I understood the breadth of the topic. My tutor is very helpful and puts together a set of questions on each module so that we can practise before the exam. The general revision tactic within our study group is to practise these questions again and again until we are totally comfortable with them. As one colleague observed: “I can tick the right boxes now without even reading the question, I know them so well!” I felt a bit the same and as it was quite a complex and technical exam I decided to make sure I really did know my stuff. I found a different practice test with open ended questions and challenged myself to answer the questions in full.

Eek, with no answers to choose from this wasn’t easy! I realised I’d learned a lot of the content by rote and by using anachronyms, etc. Worse still, I also discovered that there was a whole section of content that our practice test didn’t cover. The moral of the story? Use the question tutorials on the Pearson Vue website, use practice questions published by the big tuition providers or on, make up your own and share/swap with friends. But don’t use OT question practice as an alternative to studying and practicing longer form questions. This can build up a false sense of confidence that takes a severe battering if candidates fail. I see the following comment (paraphrased from a number of posts) far too often on CIMAconnect: “I've done the Kaplan, Acorn and Astranti exam practice kits several times, I’ve tried CIMA Aptitude One and Two, I’ve done the BPP and Pearson Vue mocks but find the real life exam so much harder! Have failed XX subject three times now and don’t know what more I can do to pass.” Do the extra study The problem here is that some candidates fail and simply do more and more question practise rather than reflecting on the questions in the exam and where their strengths and weaknesses lay. Also, they measure their preparation in terms of how many questions they attempted, rather than what they got out of them. If you get a question wrong you need to look at why, do the extra study to understand the topic and then try again. Keep trying (without looking at books, etc) until you get it right. A much better way to prepare is to use the longer questions from the 2010 syllabus (you can find the links in our self-study guides on CIMAconnect where there is a guide for each OT subject). These traditional questions put you in front of a blank piece of paper and really challenge you to demonstrate your competence in a particular topic. Also, don’t assume just because something forms only a minor part of the syllabus, or you’ve never come across it in any practice questions, that it won't come up in the exam because it might! Don’t just take my word for it, here’s some feedback from a successful F3 candidate: “I have passed the nightmare paper F3 on my 4th attempt… This time I did the study differently just with Kaplan and First Tuition (previously Kaplan, FI, Acorn… Astranti). I think the most important thing is to establish the deeper knowledge rather than number of questions you do...” And just for the record, I passed my exam! PQ • Jackie Durham is Manager, Learning Development at CIMA PQ Magazine May 2017

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PQ ACCA exams

The examiners What little gems did the December ACCA examiners’ reports hold? Here’s our take on them…

F5 Performance Management The examiner warned candidates that they must remain vigilant when reading and interpreting the requirements of a question. It may be helpful to underline both the instruction and the content requirements. The examiner emphasised that when writing your answer it is useful to keep referring back to the requirement to make sure you are answering the question asked. In broad terms, candidates performed better in section B than they did in section A. The examiner is concerned about the lack of understanding of limiting factor analysis. Students also struggled with the throughput accounting element. The long-form Q31 covered budgeting. A common error in December was for candidates to start the rolling budget with the actual quarter one figure that had been given in the question and then only produce three further quarters. This, said the examiner, showed a lack of understanding of how rolling budgets work. Q32 looked at divisional performance measurement. Many PQs lost marks in part (b) where they were asked to explain why they had included/excluded items in part (a). Candidates needed to explain why items were controllable or uncontrollable, and easy marks were lost because answers were repetitive and too brief. F6 Taxation (UK) Interestingly, December’s candidates performed better in section B than they did in section A. The examiner used the group relationship,

which is necessary for chargeable gains purposes, as the section A example from December. The section B question on IHT also caused particular problems. Do you know your

chargeable lifetime transfers as a result of the donor’s death? Q31 involved a taxpayer who had cashed in a substantial share portfolio.

PQ company formation

How to get your small business off the ground

Welcome to the first in a new series on business basics – simple stuff that you should know about

I’m in the process of setting up my own limited company. How might I go about registering it? Firstly, you need to come up with a catchy and relevant name for the business. This can’t be the same as any other company’s name, contain sensitive or offensive words, or suggest a connection with government or local authorities. You can check out the full list of taken names on the Companies House website. You’ll also need to provide a physical address where the company is based. This is where 24

you’ll send and receive all post, including information about your registration. The next step is to nominate at least one company director. They’ll need to be aged 16+ and will have legal responsibilities for running the business. You will be required to make a ‘statement of capital’, including any shares, and share types, that the company has, and their total value. All shareholders will also need to be named, and their addresses given. Finally, you must register a ‘Memorandum of Association’, or the legal statement signed by all shareholders which basically provide you with a set of written rules on how the company will be run. There’s a few ways of registering: • Downloading an IN01 form and posting your

application to Companies House (at a cost of £40, or £100 if you want to be registered on the same day). • Directly on the government’s website (at a cost of £12). • Via an agent. • Via third-party software. Once the company is registered you’ll receive a certificate of incorporation. This confirms the company is legally listed, and includes the date of formation. You should register for corporation tax within three months of receiving this letter, from which point you’ll be able to do business. PQ • Darren Nicholls is Product Manager for Informi, powered by AAT. Visit to find more practical advice PQ Magazine May 2017

s’ reports Q32 was the income tax question, involving an employer company that had provided various benefits to four of its employees. Q33 was the corporate tax question. A company was incorporated in the UK, and its three directors were non-resident and held board meetings overseas. F7 Financial Reporting The December paper was a fair one – well, according to the examiner anyway! In section A candidates found the narrative question showing the importance of understanding ratios particularly difficult. Another problem came with the testing of how a revaluation surplus is constructed for a consolidated statement of financial position. The first of three questions in section B focused on the area of non-current assets (it was the best answered). The second scenario looked at events after the reporting period and non-current assets held for sale. The final question in this section was on financial instruments. Section C’s Q31 was a consolidation question, where candidates were asked to calculate goodwill and complete a consolidated statement of profit or loss. Students lost marks on intragroup sales. Q32 covered the restatement of figures of a target company and provide equivalent figures once benefits gained from trade with a competitor were lost. Candidates then needed to recalculate some ratios and discuss the performance and gearing of a company targeted for acquisition. F8 Audit & Assurance The examiner says to pass this exam candidates should ensure they devote ‘adequate time’ time to obtain the required level of knowledge and application. But, we couldn’t find any guidance on what is constituted ‘adequate’. So this is a fairly pointless comment. In section A sitters struggled with the understanding of the role of internal audit and the substantive test questions. Q16 in section B covered the areas to consider before accepting an engagement, calculation of ratios to assist in planning, audit risks and responses, and safeguards to manage conflicts of interest. Q17 looked at control objectives, internal control strengths and internal control deficiencies. Q18 covered substantive procedures and the auditor’s report. F9 Financial Management A warning has gone out to CBE sitters from the examiner. He said that having the use of a spreadsheet does not remove the need to show PQ Magazine May 2017

the build up to, for example, an internal rate of return (IRR) question, or to show the detail of a cost of equity calculation. Nor does having the ability to type an answer remove the need to write professionally with good use of English. In too many cases in December written answers were poorly structured with both grammatical and typographical errors. The examiner stressed that it is not sufficient to rely on the fact that formulae are provided in the question paper. You have to know the purpose for which the Fisher formula, purchasing power parity and interest rate parity are used, as well as how they are used. December responses in answers seem to show that many candidates are still struggling with the application here. Q31 was from the business finance part of the syllabus. It asked candidates to calculate the weighted average cost of capital (WACC). Students also had to explain business risk and financial risk. Finally, candidates needed to discuss the key features of a rights issue as a way of raising equity finance. Q32 came from the investment appraisal part of the syllabus. Candidates were asked to calculate the NPV of a project and comment on its financial acceptability. Students then had to determine the optimum investment schedule given limited capital investment funds and divisible projects. In part 9c) the reasons for hard and soft capital rationing occurring needed to be discussed. Finally, part (d) asked for a discussion on the ways in which the risk of an investment project can be assessed.

P1 Governance, Risk & Ethics The examiner pointed out that the exam is challenging enough to pass by attempting the correct number of questions but becomes extremely difficult if only one question from section B is attempted! Was that you in December? Similarly missing out sections of questions or parts of questions, which could add up to a significant number of marks, should also be avoided. The examiner points to the resources available via the ACCA website – these should be part of your overall learning strategy. Q1 in December was a typical P1 case with part (a) requiring an evaluation of the board structure within the company. For part (b) candidates needed to suggest measures to mitigate the risk of communication failure. Corporate governance was there in part (c) and part (d) was looking for a letter from the chairman to shareholders. For part (d) students will often have to tailor their answers in a particular format – this could be a letter, email, press release or draft presentation, to name a few possibilities. Q2 looked at internal controls and a critique of

ACCA exams PQ a fund manager’s behaviour. Candidates also need to explain why good quality information matters and look at ethical relativism. Q3 covered environmental risk and how you could reduce its impact. In part (b) students needed to manage risk and part (c) look at integrated reporting. In Q4, PQs had to show the five fundamental threats to a football club. The second part of the question asked about threats to independence and safeguards. P2 Corporate Reporting The examiner says that rather than relying upon a tutor’s manual and revision pack, candidates should read articles published in professional magazines and try to see how this knowledge can be applied in practice in order to develop their understanding of the subject matter. That is quite a tall order! It was acknowledged that some candidates may feel that there is a disproportionate amount of information to be learned in P2, and so may adopt a ‘surface’ approach to learning. However, we all know that surface learning is not sufficiently robust to develop the professional skills required to practice. In the current paper candidates also need to know the principles behind amortization, the determination of the functional currency, elated party disclosure, fair value, business combinations, and impairment of financial and non-financial assets. Q1 required the preparation of a consolidated statement of profit or loss and other comprehensive income. Q2 looked at IAS 21, IAS 38, IAS 36 and IAS 24. Q3 covered IFDS 13, IFRS 3 and IAS 3. Q4: The current issues question asked about IFRS 9. P3 Business Analysis The examiner is worried about P3 students’ knowledge gaps in project management, big data, competency frameworks and the learning organisation. Surprise was expressed in the report as there is an article on each of these in the learning resources on the ACCA website. Big Data, for example, is now part of the P3 syllabus, and the examiner has defined what exactly ‘big data’ is, and how it can be used to inform and implement business strategy. The learning organisation article discusses why it is vital for organisation to continue to learn to sustain their position in the dynamic marketplace. The report also highlights articles on culture and configuration, conflict management and the accountant as project manager, business forecasting and strategy, and competency frameworks. You really do need to read all of these for the June exam. PQ

Go to the PQ website – – for our reports on the P4, P5, P6 and P7 December papers, plus loads more exam advice 25

PQ Kaplan survey

What do Brits really think

about accountants? F

ew professions have been as heavily – and negatively – stereotyped as accountancy. From the overarching view of accounting as a ‘boring’ job to the incorrect impression that accountants spend all their time calculating taxes and staring at spreadsheets, it seems people have plenty to say about the profession. But are these stereotypes really so commonplace? To find out what the British public really thinks about accountancy, Kaplan commissioned a survey of 2,000 adults. Respondents were asked to compare 10 careers that offer some of the best opportunities for employment: • Accountant • Builder • Business consultant • Chef • Developer • Engineer • Human resource manager • Marketing manager • Nurse • Teacher

Accountancy might be perceived as ‘boring’, but it also has plenty to offer, according to a new survey, writes Mark Wolstenholme

Accountancy was named by 44% of respondents as the most boring profession, well ahead of second-placed human resource management, with 11.5% of votes. But not all of the findings were negative. Only 3% of those surveyed chose accountancy as the most stressful profession – well behind nursing (37%) and teaching (27.5%). Accountancy was also judged one of the bestpaid professions with 27% of votes, narrowly behind business consultancy (31.5%). Furthermore, accountancy scored well when it came to personal development and progression, with 12% of respondents saying it provides the best opportunities for career advancement. Only engineering (15%) scored higher.

Accountancy was also rated as best for employee benefits by 11% of respondents, just behind teaching (14.5%), while 9.5% rated the profession as top for work/life balance – behind teaching with 21%, human resource management with 11.5%, and building with 10.5%. Perhaps most significantly of all, the study revealed that even if people think accountancy is ‘boring’, the majority would still contemplate a career as an accountant. Three-fifths of respondents would apply for a job that they thought was boring for higher pay and a better work/life balance – both areas in which accounting is viewed favourably. Zoe Robinson, Kaplan’s Director of Programmes, said: “In the same way that nursing and engineering can be rich and rewarding professions, accountancy isn’t just about filing tax returns. “What’s also clear is that the majority of people prioritise pay and work/life balance over the level of ‘interest’ they place in a job. Previously, our student surveys have told us that the most common reasons for undertaking a career change into accountancy are career progression, financial benefit and personal development. These are the truly important factors that people should consider when planning the next step in their career.” PQ • Mark Wolstenholme, Kaplan

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PQ Magazine May 2017

futures PQ

Glory glory Man United!

Sunil Bhandari explains how you can best tackle questions on financial futures


inancial futures feature in both the ACCA F9 and P4 papers, but tested in different ways and depth. The common ground is the use of futures as an instrument to hedge foreign currency and/or interest rate risk. From my experience, students find this topic challenging. The aim here is to provide an ‘offthe-cuff explanation’ of the concept behind using futures as a risk management tool. As all the students I have taught know, I am a supporter and season ticket holder of Manchester United (respect to those who follow other teams). My wife thinks, on occasions, I love Man Utd more than her – no comment! I always want my team to win (the upside gain) and I am obviously unhappy on that rare occasions when they lose (downside risk). So imagine this. I am about to go to Old Trafford to watch my team play in a cup game, which has to be decided on that day. Hence, only two results are possible – we win or we lose. If Man Utd lose I will not feel good. I could compensate and cover this to a certain extent by taking a bet that my team will lose the game. I am in effect, betting that the downside will

occur. I am assuming that winning some money will match or at least improve my mood if Man Utd fails to win the game. So now the game is played and after the game I have no voice – which is the norm for me. Let’s

say Man Utd win. I feel ecstatically happy. However, I lost on my bet and hence my mood is tempered down due to my financial loss. But if Man Utd lose then I go into a sulk (which is true!). However, my mood is improved when my winnings come into my bank as I gained on my bet. Overall, whether Manchester Utd wins or loses I am approximately in the same position either way. This is the concept of how futures are used in risk management. It is accepted we have use the correct terms like ‘buy’ or ‘sell’ rather than bet and that there are complications such as margins and basis risk. However, the basic

idea is correct. For the record, I have NEVER EVER bet that my team Man Utd will lose! PQ • Sunil Bhandari is a freelance ACCA F9 and P4 tutor

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ACCA exams PQ

What should I sit?

With syllabus changes imminent for some ACCA papers, Rebecca Evans outlines the best route for you to take


arch results are out and irrespective of whether you sat exams or not, now is the time to be thinking about what subjects to attempt both in June and for the remainder of 2017. Many of my students ask what subjects they should sit together and in what order they should sit the papers. The answer I always give is that there is no single answer that will work for everyone. The course combinations that are right for you will depend on your role, often your employer’s wishes, the availability of courses offered by your tuition provider and any exemptions you may have. Assuming you have already completed F1–F4, you need to plan the order you will attempt F5–F9. If you are working in a financial accounting or audit role it is advisable to do F7 and F8 first. You could choose to sit them together or consecutively, depending on how many subjects you chose to study at one time. Often employers in practice request their students sit these papers first as it gives them the essential skills and knowledge they need to operate effectively in the workplace. If working in tax, start with F6, alongside F5 or F8 if you are sitting two subjects per sitting, and if you are in management accounting start with F5. You also need to factor in when to attempt various subjects. With the exception of Tax subjects, the syllabus changes for the September exams, so some students are choosing to avoid sitting F7 in June – if you are unsuccessful in your exam you will need to resit the exam under potentially updated accounting standards. It is also helpful to sit F7 and P2 under the same syllabus version, so you may look to sit F7 in September as one of your final skills level papers and then P2 no later than the following June. This would be the same for tax subjects and sitting under the same Finance Act, although be aware the syllabus change

Selecting options Many of the Options papers have a low pass rate and students are rightly concerned about making the best selection for them. The general advice is, if working in management accounting, do P4 and P5; if in practice or tax, P6 & P7. The P7 examiner has said that that paper is significantly harder for those students not in an audit or accounting role with little practical experience, and it is advisable that those students choose another option. However, be sensible – think about your long-term career ambitions and your performance at the preceding examination. For example, if you struggled at F9, attempting P4 may not be the wisest decision.

dates are different for the tax subjects (F6 and P6). Textbooks and other material are valid for exams June to March, so look to sit F6 in June, September or December and P6 (if you opt to do it) before the following March. Remember, you can now sit the exams at the professional level in any order. F5, F8 and F9 are generally less affected by syllabus changes, unless there is a major one (2017 isn’t a major update), so it isn’t so important to worry about the point in the year you attempt it. But depending on your choice of options you may choose to sit the underpinning subject a sitting or so before the option i.e. sit F9 close to P4, or F8 immediately before P7.

• Rebecca Evans is National ACCA and CIMA Product Manager at Kaplan Financial

Future syllabus changes One further consideration arises as a result of changes to the Professional Level that will come into force for the September 2018 exams. You have five exam sessions remaining before Strategic Business Leader (SBL) replaces P1 and P3 and Strategic Business Reporting (SBR) replaces P2, so it is essential to plan ahead to ensure you do not get caught in transition. Firstly, think about the number of exam sessions you want to study for and plan how many subjects you will attempt at each sitting. In order to receive an exemption (converted pass) in the SBL paper you must have passed both P1 and P3. If you have passed just one, unfortunately you will lose this pass. It is therefore important to plan your studies so you will have passed both subjects by September 2018. You could look to attempt both subjects before the June 2018 sitting. Alternatively, you may choose to sit P2 and some of your Options papers first and attempt the SBL exam at (or after) the September 2018 session. If you have passed P2 by September 2018 you will automatically receive a converted pass in the SBR exam. PQ

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back to basics PQ

Foundations on which to build your knowledge In the first in a series in which AVADO tutors focus on core syllabus areas from across the exams. Where else could Paul Kirkwood start but with double entry accounting?


henever I plan to teach a subject I try to recall my own experiences when I learned that subject (albeit many years ago) and I also talk to others who have been through the learning process more Debit (Dr) recently. Assets When I first learned double entry accounting I recall that I Liabilities really struggled with some basic double entry concepts, so when I now teach ACCA F3 I always start Drawings by focusing on the basic building blocks of double entry. If we can Income get these concepts clear in our minds we’ll have solid foundations Expenses on which to build. The most basic building block of all is the ‘Dual Effect’. Every business transaction has two ‘equal and opposite’ effects on the business. For example, a sole trader starts a business with

$10,000 of their own money. From the business perspective, it will have $10,000 cash (an asset) and $10,000 capital (which is a liability from the business to the owner); these two effects are equal and opposite. If the business then spends $2,000 cash on a motor vehicle, the business’ cash balance will reduce by $2,000 and they will have a new motor vehicle worth $2,000. Again, the two effects are equal and opposite as the business assets have gone down by $2,000 with the outflow Credit (Cr) of cash but the assets of Assets the business have also increased by $2,000 with Liabilities the acquisition of the motor vehicle. Once this dual effect Capital concept is clear in our mind we can start to Income introduce the language of double entry. This Expenses language is really quite straightforward but like any new language it does take time to master. I like to start by just thinking in terms of assets and liabilities. If an asset goes up it is called a debit entry and if an

asset goes down it is called a credit entry. The opposite is true of liabilities as shown in the diagram. Using our earlier example, rather than saying ‘our cash asset has increased by $10,000’ we simply say ‘Debit Cash’ and rather than saying ‘the business has an increased liability to the owner of $10,000’ we simply say ‘Credit Capital’. For the purchase of the motor vehicle we simply say ‘Debit Motor Vehicles and Credit Cash’ as assets have increased with the acquisition of the motor vehicle but our cash asset has decreased. Perhaps the most frequent question I am asked in these early stages is ‘why is an increase in income a credit entry?’ Well, if a business makes a cash sale of, say, $1,000 our cash balance will go up, so we ‘Debit Cash’ but who does this income ultimately belong to? Well, yes it belongs to the business, but ultimately it will belong to the owner, and so any business sales will increase the liability of the business to the owner (after taking away any expenses). In AVADO’s ACCA F3 programme we use a case study in the first four weeks that follows Robert Wilson, who has started a new T-shirt printing business. From first principles we learn about the dual effect of transactions before learning the language and process of double entry accounting. PQ • Paul Kirkwood is AVADO’s ACCA Lead Tutor

ICAEW spotlight PQ

Mastering the Certificate level Over the next few editions of PQ, we will offer hints and tips on how to approach the six modules of the Certificate Level exams. To get started, here is more on Business and Finance and Mangement Information BUSINESS AND FINANCE Think like a business owner, not a student: If you take a bird’s-eye view of the Business and Finance syllabus, you’ll notice that it largely revolves around the needs of a business. Thinking like a student isn’t quite going to cut it. Put yourself in the shoes of a business owner and think of the challenges you’ll face. Do this while you study for the exam, when you revise, and when you actually take the exam – you’ll find it makes studying and revising easier, and also gets you one step closer to acing your actual exam. If in doubt, read the question (again): Often students end up picking an answer after just skim-reading a question – this is dangerous and can cost marks unnecessarily. Read the question thoroughly, word by word, sentence by sentence, and then pick an answer. If you’ve any doubt about the answer, or if you PQ Magazine May 2017

think it’s too obvious or too simple, re-read the question and then make your decision. Never leave a question unanswered, even if you think you have no idea what the answer is. Of course, studying and revising well will mean you shouldn’t find yourself in this situation to begin with. MANAGEMENT INFORMATION Focus on the fundamentals: The syllabus is incredibly vast, so you may feel overwhelmed by the amount you need to know. The great part of it though is the fact that the fundamentals remain strong and consistent for the entire syllabus. In this exam, the fundamentals are that the value of any and every asset/project/firm is always based on the Present Value of its Future Expectations. Another fundamental rule is that profit is not the same as cash flow because of accounting conventions (such as depreciation, amortisation or accruals). Practise every single question twice: Make sure

you practise every single question in the question bank, twice. The first time round, do it chapter by chapter, and only look at the solution if you really need to. The second time round, create “equivalent mocks” by doing the questions in random order, but maintaining the suggested weights of each section/chapter. In this round do not look at the solutions while practising, even if you don’t know the answer. The idea is to simulate exam conditions. Your actual exam will not have questions in a chapterby-chapter order, so you want to train yourself to be able to jump from different topics instantly. This will also help you see how everything is related. Do “equivalent mocks” in 80% of the actual allocated time: When practising questions the second time round, try as hard as you can to complete an equivalent mock in 80% of the allocated time. This technique will build your speed incredibly well, and gives you ‘extra time’ in the actual exam to deal with any surprises, mind-blocks, and other concerns. Before you take a Certificate Level exam, be sure to read the syllabus, access the exam resources, including a sample exam and download the exam guide, go to PQ • Thanks to ICAEW for this article 31

PQ careers

social media ROUND-UP So the wait is finally over and you can get a flavour of what you missed with the #PQawards2017 video. Check it out at or go straight to /ehmq5v7uo4mcclz/First%20Cut%20 2.wmv?dl=0. We put it on Facebook first and Michael Scott said: “It was a brilliant night! You can catch me on the left at 1.20 and not winning the award at 2.20!” There’s always next year, Michael.

Life at PwC Harry Pampiglione, 25, is a senior associate based in London. He has been there for six months. He has a degree in politics, philosophy and economics from the University of York. Recently ACA qualified, Harry was recently named our NQ of the Year What time does your alarm clock go off on a working day? Either 6.30am or 7.30am, depending on whether I go to the gym. What’s the first thing you do when you get to your desk? Say hi to everyone and check the news. What’s on your desk? A printout of the Six Nations rugby fixtures. What’s the best thing about where you work? There is a big focus here at PwC on professional development. People genuinely care about helping you improve. Where’s your favourite place to go for lunch? Itsu.

What (or who) can you see when you sit at your desk? Tower Bridge, the London Assembly Building, HMS Belfast and the Tower of London. What are your favourite websites? BBC Sport. Which websites do you use for work? LinkedIn, FT and Google. What time do you leave the office? 6.30pm. How do you relax? Socialising with friends, listening to music, exercising. What’s your favourite tipple? Currently, Lagunitas IPA.

How often do you take work home with you? Often, but it’s usually business development stuff rather than client work. What is your favourite TV programme? The Thick of It. Summer or winter? Summer. Pub or club? Pub. Who is your hero? Giuseppe Garibaldi. If you had a time machine, where would you go? One week into the future and get the lottery numbers! If you hadn’t chosen accountancy, where might you be right now? Somewhere sunny!

demand’, local manufacturing services that enable customers to engage with companies to selfbuild highly tailored products, such as OpenDesk. • Frugal – re-imagined R&D processes that open up new market segments for low-cost, high-quality products and services such as Renault’s Indiandesigned Kwid. • Modern barter – platforms that enable the exchange of goods and services with fellow users, often through

digital or online currencies, such as online time-banking community TimeRepublik. • ‘Pay what you want’ – where customers can pay what they think is right, offered as part of a tiered or ‘freemium’ deals such as video game download service Humble Bundle. • Mega-hyperlocal – companies that flourish because of their deep connection with the community in which they operate such as London’s Kernel Brewery.

In brief NCASS, our Student Body of the Year, was also showing off their trophy big time at the recent NCASS Ball. Well done again, NCASS. The Bank of England’s recent announcement that the new £20 note will use palm oil rather than animal fat – used in the new £5 note – didn’t go down well with everyone when we tweeted the news. The vegetarianfriendly move will add £5m to costs. Kerrib added “and destroy rain forest. Awesome result.” David Newton agreed: “This will increase demand for palm oil and increase the amount of forests destroyed to meet demand. Surely there is a better solution.” Matt Bishop is in the same camp: “And will contribute to deforestation to make way for more farming for palm oil…” We also hit social media when the latest PQ magazine is published. It is always interesting to see which bits you like best. For Janine Twelftree it’s easy: “may I say – that the ‘Let’s Get Technical’ is one of the best bits of the magazine – FOH variances this issue is super timing as my university exam next week is on standard costing variance.” Barely a week goes by without someone releasing a story about how the robots will be taking over our jobs. Fresh research from PwC found that nearly a third of all jobs in the UK could be lost to automation within the next 15 years. Simon Hall was worried, and asked: “What’s on the list of jobs that can’t or won’t be automated? Time to start retraining for some!” PQ can remember a recent poll in The Times that said occupational therapy was the most ‘protected’ profession. 32

The full stack A new report from ACCA, Business models of the future: emerging value creation offers insights and analysis into how businesses and policy-makers can support and engage with a range of models that are transforming industries and ways of working in the 21st century. Entitled ‘The Full Stack’, the six model framework includes: • Platform-based businesses – digital marketplaces that match buyers and sellers, such as AirBnB. • Mass customisation 2.0 – ‘on-

The PQ Book Club: books you should read What They Don’t Teach You at Harvard Business School by Mark H McCormack (Profile Books, £9.99) Now this book seems to have been in the best-seller list for a very long time. It was first published in the UK in 1984 and to be truthful it is starting to show its age. McCormack stresses early on that the best lesson you can learn from any business school is an awareness of what it can’t teach you. He is talking here about the ins and outs of everyday life here. This is a book is all about ‘street smarts’, but in a world that is moving to AI and data analytics McCormack wants you to use your instincts, insights

and perceptions. There is no mention of robots! In fairness to Harvard, what they don’t teach is what they can’t teach you – how to read people and how to use that knowledge. It is here that the book really comes to life. We like the fact that from the off he says: “Most management philosophies don’t work.” He also believes it is always worth taking five hours to save five minutes, and is a great believer in separating your office life from your social life. In a world that now lives online there is also a lot about phone calls and meetings. He says: “If you can get these two business activities under control everything else falls into place.” He obviously has someone

sorting out his emails! And when it comes to meetings he suggests it is vital you set a time limit (good idea). He also likes restaurant meetings as they are friendlier, less formal and, perhaps more importantly, more revealing. The chapter on silence is an interessting one. It is vital you let other people talk – that might mean biting your tongue, but it will often provide you with key information you wouldn’t get by trying to lead the meeting. PQ rating 3/5 Despite the need for a bit of brush up this book has lots going for it. I enjoyed the read! PQ Magazine May 2017







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The Finance Bill, published in mid-March, was the longest ever, coming in at 762 pages. The Chartered Institute of Taxation said that this beat the previous record holder, 2012’s 686 pages, by ‘a significant margin’. Oh, and you can add another 448 pages of accompanying Explanatory Notes, too. Together the bill weighs in at an estimated 2.8kg. The basic bill (2017 Finance Bill) contains 313,031 words – that’s more than Charles Dickens’ Oliver Twist and A Tale of Two Cities combined. If you add in the Explanatory Notes (479,463 words) then it is longer than the three volumes of Tolkien’s Lord of the Rings.

US President Donald Trump has reportedly sent Angela Merkel, the German leader, an invoice for £300bn! In Trump world it’s the money Germany owes to Nato for its unpaid defence contribution. Trump is said to have had an actual invoice printed out for the sum, although we couldn’t find out if it had been put in the post. Germany and Nato officials have criticised the move.




The poor old Chancellor Phil Hammond really will have a problem raising money if he can’t raise any of our taxes! Two great quotes come to mind. The French Minister of Finance from 1665 to 1683, Jean Colbert, said: “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least amount of hissing.” Or there’s the genius Albert Einstein, who said: “The hardest thing in the world to understand is income tax!”

A Kenyan IT expert, Alex Mutungi, has been charged with hacking into the country’s tax system to steal £31m. Mutungi was allegedly part of an international gang siphoning money from official accounts and commercial banks. In all, 16 people, including Kenyan revenue authority staffers, have been rounded up in police raids. Police are claiming the gang used malware and ‘salami’ scamming techniques to steal the money.


Belarus President Lukashenko has introduced a new novel way to bolster the nation’s coffers. He has enacted a law which fines people £200 if they work for less than six months a year. This tax on the jobless has forced Belarusians on to the streets in protest, as they are already facing a harsh economic slowdown.

NOMINATE SEAGULL This year’s University Challenge became a battle of two great personalities. On one side was Canadian Eric Monkman, on the other Bobby Seagull. Both were studying at Cambridge colleges, but only one had worked for Lehman Brothers, switching to accountancy before settling on teaching. Yes, East Londoner and dapper dresser Seagull. OK, his team lost the semi-final but GQ (not PQ) have asked him to do a fashion shoot.


First Intuition Cambridge’s Gareth John held a great little celebration of his 20 years of tutoring recently. He even got none other than Eddie ‘The Eagle’ Edwards to give a little talk. What most people don’t know about Eddie is that he could ski before he started to do the jumping and was in fact once on the British Slalom team. The really scary thing it has been 29 years since he plummeted off that ski jump in Calgary (1988).


You really can check out just how hipster you are with the new UK inflationmeasuring basket of goods. The Office for National Statistics recently added soya milk, gin and bicycle helmets to the items it will use to calculate UK inflation. Gin has been absent from the basket for 13 years, but it appears to be a drink back in fashion, mainly because of the rise of new distilleries such as Sopsmith and Portobello Road Gin. In fact, spending on gin went over £1bn last year for the first time. Also back on the list are adult puzzles and children’s scooters. So what has come off the list? Well, alcopops, menthol cigarettes, children’s swings and the fee for stopping a cheque to name a few!


David Bowie stamp presentation packs

We decided to offer something a bit different this month by way of our giveaways. So PQ magazine has not one but two Royal Mail David Bowie presentation packs to giveaway. The packs include all 10 Bowie stamps of his famous album covers. You would have to be ‘Aladdin Sane’ not to enter! To enter our great giveaway draw just send your name and address to Head up your email ‘Bowie”

Peace of mind

We have two three-book packs to help you find peace and calm, wherever you are. This giveaway consists of two colouring books and a mindfulness journal. This provides easy exercises and an introduction to mindfulness. The whole pack is worth £25.97! Two people can win this super prize. Just send your name and address to and we will do the rest. Head up your email ‘Mindfulness’.

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 12 May. The main draw will take place on Monday 15 May 2017.


PQ Magazine May 2017

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PQ magazine, May 2017  

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

PQ magazine, May 2017  

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