PQ magazine, October 2022

Incorporating NQ magazine

October 2022

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ACCA EXAM FEEDBACK INSIDE

THE CGMA FLP

Meet Jean-Paul, accountant, author, TV host and Elvis tribute act!

Unlock your career potential Become an Intermediate Financial Accountant today

IFA.ORG.UK/ROUTESIFA

Worryfree exam prep

Levellingup roundtable

Are you ‘Quiet Quitting’?

October 2022

IN THIS ISSUE A note from the Editor It’s been a very strange summer. Not a week goes by it seems without another major world event happening! It would nice if just occasionally it was ‘good news’. But no matter what is happening the accountancy exams never stop, and in truth we never have problems filling our news pages. This month we look at the CGMA Finance Leadership Programme, ACCA’s September exams and AAT’s new qualification, and we have a whole lot of stories about a big recruitment drive into the profession. Good news for some of you out there at least!

We are organising two great events for you, too, one face-to-face and one online. First up is the ‘Future of Tax’ evening at London’s Queen Mary University – everyone is invited to join us on 26 October.

We have the wonderful Neil da Costa on the panel, along with ICAEW’s Anita Monteith and ACCA’s Glen Collins. All you need to do to book your place is go to Eventbrite – see https://tinyurl.com/2psjj4ey.

Secondly, our sixth LSBU virtual one-day conference will take place on 7 December. Our columnist Lord Sikka will kick it all off, and the wonderfully outspoken Professor Richard Murphy will be on hand to throw in his three-penny worth! Details of where to sign up will be with you all soon.

Graham Hambly, Editor and Publisher, PQ magazine News 04 CIMA initiative Institute sets out new route to membership 05 EY recruitment drive Big 4 firm takes on 25% more students compared with 2021 06 AAT annual report All the numbers from the association’s latest report

Accountant grade introduced to attract part-qualifieds

descibes his remarkable career and what makes him tick 18 Study advice AAT qualified Andy Murray explains how he coped with studying at a time of stress in his life 20 AAT Q2022 The new suite of qualifications has landed – so we take a look at the changes 21 Viewpoint The IFA’s CEO John Edwards explains how digitalisation is transforming the accountancy sphere 22 CIPFA student conference We report on a roundtable discussion on how the levellingup agenda is (or isn’t) working 24 CIPFA spotlight Finance leaders need access to reliable data in order to get the big decisions right 25 CIMA spotlight How to get in the right frame of mind as you approach exam day 26 A question for Tom Top tutor Tom Clendon explains share based cash flow

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34 ACCA exam feedback The good, the bad and the ugly papers from the latest exams

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36 Pensions relief Neil da Costa tackles a subject that students often struggle with 37 AAT Level 2 Karen Groves on how to approach a question on checking a supplier’s statement for accuracy 38 Quiet Quitting The lowdown on this new phenomenon 39 Careers FTSE CEOs’ pay rockets; Hays’ Karen Young tackles your workplace issues; and our book review 36 Fun The lighter side of life; and more great PQ giveaways

10 IFAC action plan Federation aims to tackle corruption and financial crime

27 ACCA spotlight Why integrity is now a prerequisite for those joining the accountancy ranks

The columnists Lisa Nelson Hard work and talent – the magic mix 4

12 Tech news Sales of digital devices plateau for the first time

29 CIMA CGMA FLP Institute unveils the CGMA Finance Leadership Program (sic)

Robert Bruce Why don’t we embrace the whistleblowers?

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Prem Sikka It’s time to give workers a louder voice

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08 Deloitte wants auditors Firm is looking to recruit 6,000 more over the next five years

Features, etc 14 Have your say My ACCA exam script just disappeared; and shock at ACCA’s Ukraine move.

Plus our social media round-up

09 IFA welcomes PQs New Intermediate Financial

17 Cover story We caught up with Jean-Paul Noel-Cephise, who

30 AAT study advice Teresa Clarke on how to calculate the payback period for a project 32 Law The ‘separate legal personality’ concept explained for ACCA LW paper studiers

Anna Kate Phelan Will a chip in your head help you get ahead? 10 David Rothera How accountants can tackle climate change 12

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To subscribe for FREE go to www.pqmagazine.com Award-winning AAT courses and apprenticeships Flexible learning to suit your lifestyle mindful-education.co.uk/students PQ Magazine October 2022

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LISA NELSON Hard work or talent? The amazing Polgars Here is a list of famous people from the world of sport: Venus and Serena Williams, Graham and Damon Hill, Alistair and Jonny Brownlee. Obviously, they are all related but why are individuals from the same family so successful, and in the same sport? Is it nature or nurture?

In the 1960s, Laszlo Polgar presented a theory that great performers are made and not born. He believed that he could raise a genius, and to prove it he married Klara Altberger and together they had three daughters, Susan, Sofia and Judit. By way of proving his theory, Laszlo and Klara taught them all how to play chess, some might say they were obsessed with it. All three daughters went on to become world-class chess players, but Judit achieved the most and even to this day is considered the best female chess player of all time.

Interestingly, she was thought to have the least talent but be the hardest working.

There are some critics of the Polgars’ work, not least around their parenting skills!

Yet it remains a powerful and motivational story that when taken together with those famous sporting families leads to a simple observation. That no matter your level of talent or innate ability, hard work, being in the right environment with the right coach, is a significant factor in success, and that applies equally to accountancy as it does chess.

Lisa Nelson is Dir ector of Learnin g at Kaplan

New online route to CIMA membership The CGMA Finance Leadership Program is now available to CIMA students in England, Scotland and Wales, as a new and alternative pathway to completing CIMA’s CGMA professional qualification.

CIMA says the CGMA FLP teaches the same competences as other routes to the CIMA professional qualification, using the same material. It also stresses that students must demonstrate the same level of competency and experience to earn the CGMA designation and CIMA membership.

There will be two subscription options for the Finance Leadership program, called Skills Plus and

Skills Premium. The Association has partnered with Kaplan, who will provide Skills Premium subscribers with expert-led, live online classes for competencies and Case Study preparation, as well as a tutor who

can be contacted to give further help where needed.

CIMA’s UK & Ireland Regional Vice President, Paul Turner, said: “The world is changing, and the CGMA Finance Leadership Program has been launched to meet the growing demand for self-paced e-learning in the UK. Whilst traditional learning and examinations in test centres still have their place, it is right in the digital age that we offer alternative pathways to learn, understand and apply finance skills and knowledge.”

To find out more go to https://tinyurl.com/yyxcd2c2

PwC sued over ‘pub golf’ injury PwC is being sued by one of its employees after he lost half his skull following a drunken ‘pub golf’ works do.

Michael Brockie (pictured), a senior associate in the audit department, has filed an initial personal injury claim of £200,000 against the Big 4 firm for alleged negligence, after he suffered a brain injury and had to be put into an induced coma in 2019.

The lawsuit says staff at the

Reading office were ‘invited’ to a post-work ‘pub golf’ evening, which took in nine bars as part of the drinking game. Brockie claims he became so drunk that he has no memory of the evening after 10pm. He was found in the street in the early hours of the following day after falling over having suffered a severe head injury.

He regained consciousness four weeks later.

Brockie still suffers from

persistent cognitive symptoms; however, he returned to work after six months off.

You are all invited to a free night out!

ICAEW’s head of taxation policy, Anita Monteith, and acting head of ACCA UK Glenn Collins. We also have Kaplan’s Neil da Costa and Queen Mary’s own Andrew Wade on hand, too. More guests will be announced soon!

This event will start at 6pm, but doors will open at 5pm for networking. Isn’t it time you got out? To find out more go to https://tinyurl.com/2psjj4ey.

Queen Mary University of London and PQ magazine have joined forces to provide you with a free evening looking at the future of tax.

The PQ team and a whole list of guests will be descending on Queen Mary University on Wednesday 26 October to discuss how the government will tax us in the future, what the new priorities will be, and if we need to pay more.

Our top panel will include

In brief Pap Where’s that tie?

PQ magazine recently tweeted that “The accountants have arrived at number 10!”, accompanied by a picture of The Times’ front cover of new PM and CIMA accountant Liz Truss with her accountant husband Hugh O’Leary on the steps of their new Downing Street address. Then we heard that you apparently can’t escape the accountant in you! In her first day in the job Truss said she wants to reintroduce a more formal dress code into 4

government and top of the list is “ties are back”! Gone then is Dominic Cummings’ casual era, for now anyway.

Pap Speed mentoring event CIPFA South East is relaunching its Speed Mentoring Events, with the next one on 14 October. Working with South East CIPFA Student Network and building on its partnership with supporters like Allen Lane and Grant Thornton, the aim is to expand the learning and

development opportunities for CIPFA members.

Place are limited, so if you are interested you need to get in touch with mentoring@ cipfasoutheast.org.uk to register. The event takes place in Finsbury Square, London at 6pm.

Pap Plastic tax – a problem waiting to happen Just one in 20 liable businesses registered for the new plastic packaging tax in the first month.

This could mean HMRC will not

get the £235 million in revenue it had budgeted for.

Firms that produce or import 10 tonnes or more of plastic packaging have to pay £200 for each tonne if it does not contain at least 30% of recycled material.

Registration opened in April. However, a freedom of information request by Pinsent Masons found that just 992 UK companies have signed up.

HMRC had estimated 20,000 business would be paying the new tax.

PQ Magazine October 2022

PQ news PQ

EY new student recruitment up 25%

ACCA exam feedback

EY welcomed 1,337 graduates and 201 apprentices to the UK firm this Autumn – that’s a 25% increase on 2021.

These trainees will be joining EY’s teams across Britain, with 39% based outside London.

Hywel Ball, EY’s UK chair said: “We’re very conscious that, over the last three years, young people have faced unique challenges caused by the pandemic, with many having experienced disruption to their studies.

That’s why, for the third year running, we’ve honoured all the conditional offers we made prior to Highers and A-level results days.

“Diversity, Equity & Inclusiveness continues to be a strategic imperative for EY and we are proud to see this reflected in our intake this year.

We aim to provide a range of entry routes into the profession so that we can access the best, diverse talent. From our insight days and summer internship schemes to our apprenticeship, graduate and school leaver programmes, we aim to provide our new joiners with opportunities to gain skills, hands-on experience and a qualification.”

FM and FR stood out as the difficult papers for September ACCA exam sitters at the applied skills level. It will be interesting to see if this is reflected in the pass rates as these papers had pass rates above 50% at the last three sittings.

FM sitters were a bit more vocal about how they didn’t like the paper. It was described

as both challenging and a disaster, with section A and B called ‘brutal’. Many students who immediately went on

the notice boards after the sitting thought they would be preparing for a resit.

Sitters also struggled with the option papers, even with the new professional marks on offer.

The ATX exam was a ‘disaster’ for 22% of sitters, according to Open Tuition’s instant poll, while 43% said it was ‘a hard test’.

Check out all the feedback on page 34, where you can see some great YouTube reviews.

GAAPweb’s Victoria Strange will discuss the state of the jobs market and we have the head of finance at the Direct Commission Covid Vaccination Programme, Claire Gravel, explaining how the NHS adapted to deal with the covid crisis.

We hope you can join us

from wherever you are in the world as we continue to shine a spotlight on the profession. Last year delegates joined us from Australia, Japan, Russia, Bulgaria, Qatar, Kenya, South Africa and Indonesia (to name a few).

Watch out for more details soon!

Save the date Our sixth one-day conference with London South Bank University will take place on Wednesday 7 December. This virtual conference will look at how innovation will be key to future-proofing the accountancy profession. Among the list of top speakers are our old friends Lord Sikka and Professor Richard Murphy. We also have Dr Ross Thompson looking at the rise and rise of blockchain, and Professor Ian Thompson explaining why carbon accounting must be integrated into the curriculum.

Join Tom Clendon & Ben Wilson for

ACCRUAL WORLD! Interesting, funny and entertaining. Do you associate these words with IFRS and auditing? Accrual World with Tom and Ben will convince you!

recent episodes include...

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PQ Magazine October 2022

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ROBERT BRUCE It’s time to welcome the whistleblowers Handshakes all round. Fraudsters are exposed. Those that expose them are given a hefty reward from the cash saved. It costs the whistleblowing programme little, and makes a whacking profit for the government. It would be the sort of initiative that would be a boon to both business and corporate governance in the UK. But of course it isn’t happening. At least not here.

Where this programme does happen is in the US. It dates back to the Dodd-Frank Act, which was brought in to tighten financial regulation after the banking disasters of the first decade of this century. Late last month, the rules were expanded and tightened, making the formal whistleblowing system even more effective. The results are clear. Everyone, bar the fraudsters, wins. Since 2010 the programme has raised some $3bn from exposed fraudsters while some $330m has been paid out to the whistle-blowers concerned.

The programme has cost some $21m to operate. So not only has it whistled fraudsters out of their schemes but it has brought in a profit to the public of $2.6bn.

It is hard to imagine any other government programme that returns a higher amount. And yet the programme only covers the field of securities and commodities frauds.

Imagine what a similar programme could do in the UK, particularly if it were extended to moneylaundering.

Robert Br uce is an aw ard-winnin g wri ter on accountan cy for The Times

AAT posts £7m profit Despite another challenging year, AAT posted an operating surplus of £7,172,000, according to AAT’s Annual Report 2022.

Some 4,426 new members joined the association during the year, which is 25% up on 2020-21, but still a 7% decrease on 2019-20. That shows new member numbers, while recovering, are still not quite at the levels seen pre-pandemic.

AAT now has 123,759 students and members, 471 approved

employers and 581 training providers.

Some 68,791 people are studying for an AAT accounting qualification. For the year in question 9,532 students passed Level 2, 7,566 Level 3 and 4,568 Level 4.

One of the highlights for the year was the accelerAATe 2022 virtual conference for students – 2,270 people logged in!

The 2021 Salary Survey also had nearly 20,000 downloads, and the

13 live study sessions for students on Facebook generated over 63,000 views.

AAT’s total income for the year was £32,277,000. Student and affiliate members’ fees now bring in more money to the coffers that full members’ subs and fees – £8,958,000 compared with £8,866,000. Assessments bring in another £12,938,000.

Staff numbers dropped from 247 in 2021 to 217 in 2022. Staff costs dropped year on year from 12,922,000 to £11,318,000.

Read the full report at https://tinyurl.com/2p846539

PwC removes 2:1 criteria for undergraduates PwC, one of the UK’s largest graduate employers, is removing the 2:1 degree classification requirement for all its undergraduate and graduate roles, internships and placements.

The Big 4 firm explained the move is designed to open up opportunities to more people, increase the socio-economic diversity of the firm and support its efforts to improve social mobility.

It stressed that changing the entry criteria will enable PwC to

further diversify its graduate intake through broader access to talented young people, who may not have the top academic achievements but have the attributes and all-

round proven capabilities for a career with the firm.

And, for the third consecutive year, PwC UK has told candidates with offers to join its School and College leaver programme that their places are guaranteed even if they don’t achieve the A level grades previously required.

Around 80 students were made offers to this year’s programme, which is one of the ways PwC has broadened access to the firm beyond graduates.

Where are the international education standards?

University curriculums in the Middle East are not consistently aligned to international education standards (IES) or professional accountancy organisations’ expectations, according to an IFAC pilot investigation.

IFAC wanted to discover why the international education standards so often are only

partially adopted, and why so many jurisdictions struggle to adopt and implement them fully.

The Middle Eastern pilot found there was limited accountancy education resources available in the region, such as textbooks.

Arabic-language resources are even more limited.

Another worry was the limited

appreciation among students of the wide variety of opportunities for professional accountants and the broader role of the profession in society.

new or amended international accounting standards on behalf of the UK. Wallace has held the role of chair on an interim basis since September 2020 and has led the establishment of the Board and its early work. This has included the UKEB’s adoption of International Financial Reporting Standard 17 Insurance Contracts, a major new international accounting standard relating to insurance contract accounting which was adopted for use in the UK on 16 May 2022.

Pap FRC sanctions UHY Hacker Young UHY Hacker Young has been fined £217,500 and severely reprimanded over its audit failures of Laura Ashley Holdings (LAH) for the financial years 2018 and 2019.

The FRC has also ordered that UHY “shall not accept appointment as Statutory Auditor to any PIE [Public Interest Entity] for which it is not currently acting as Statutory Auditor. Audit engagement partner Martin Jones received a £32,625 fine.

In brief Pap New ACCA mocks available ACCA has released new mock exams onto the Practice Platform catalogue for AAA, AFM and APM, and it now also has a set of mock exam debrief videos from expert tutors.

In addition, ACCA recently published a new set of ‘Read the mind of the marker’ articles. These articles include real responses to the specimen exam along with marks awarded and examiners’ comments.

Students have all been told 6

about these through their InSession email updates and are being encouraged to make use of these.

Access the resources at: AAA | AFM | APM. Pap UK Endorsement Board gets chair Former PwC partner Pauline Wallace has been appointed as the first permanent chair of the UK Endorsement Board (UKEB).

The UK Endorsement Board was set up to endorse and adopt

PQ Magazine October 2022

The Future of Tax – the Queen Mary University of London annual seminar

Queen Mary University of London has joined forces with PQ magazine to provide a free evening seminar on the future of tax.

As Benjamin Franklin famously said: “In this world nothing can be said to be certain, except death and taxes.” However, the world is changing and so is tax!

How will government tax us in the future?

What will the new priorities be? Do we need to pay more tax?

Digitalisation and blockchain will change the tax industry forever, and could even spell the end of tax evasion.

We are putting together a top panel of experts, who will provide their vision and help to get the debate started.

This event will start at 18.00 BST, but doors will open at 17.00 for networking. There will be a sandwiches, too!

Click here to book your FREE place Date and time Wed, 26 October 2022, 18.00-20.30 BST (networking from 17.00) Location Graduate Centre Lecturer Theatre, Queen Mary University of London Mile End Road, Bethnal Green London E1 4NS

PQ news PQ the

Thousands of auditors needed at Deloitte

PREM SIKKA It’s time to give workers a louder voice In the last year, the average domestic energy bill has jumped from £1,277 to £3,549. It is expected to hit £7,700 early next year. The average wage has increased by 5%, and the state pension and benefits by 3.1%.

Millions of Brits are struggling.

The Bank of England expects the average monthly post-tax pay in 2023 to be £2,054. For many employees, work does not pay enough. Some 41% of universal credit claimants are in work. 68% of families living in poverty include at least one working adult.

However, there is no cost-ofliving crisis for corporate elites.

The median annual remuneration of FTSE100 CEOs has soared by 39% to £3.4m, equivalent to the average pay of 109 workers.

Voluntary codes of corporate governance, friendly non-executive directors and shareholders in large companies have failed to secure equitable distribution of income.

We need to democratise corporations. Workers are the key to generating wealth and should have 35%-50% of the seats on the boards of large companies.

Stakeholders should craft remuneration policies. They must vote on executive pay. Employees won’t approve mega pay for executives whilst they receive a few crumbs, forcing directors to rethink poverty wages. Company law should be amended to give stakeholders the power to fix an upper limit to executive remuneration.

Deloitte UK is set to hire more than 6,000 new auditors and assurance professionals over the next five years, in addition to a £125m investment the firm will make in audit product and quality improvements That is at least 1,200 new auditors every year between now and 2027.

Deloitte said it will be looking to recruit from a range of entry-level and experienced backgrounds. This includes 885 audit and assurance graduates and school leavers (BrightStart Apprentices) in 2022 alone. That’s a 30% increase on 2021.

The Big 4 firm stressed

that more than half (57%) of appointments will be based outside London and all new staff will work and be trained in a range of areas critical to audit including climate, data, cyber, emerging technologies and analytics.

This year the firm has also opened over 750 vacancies

across various qualified levels (for chartered accountants with ACA, ACCA, ICAS or equivalent qualification).

To discover more on the firm’s audit and assurance roles go to https://tinyurl.com/38d239av Applications can be submitted at https://tinyurl.com/5n7bw835

ICAEW Advanced Level July pass rates are in

Some 5,730 students turned out for the ICAEW Advanced July exams, and the pass rates look good.

Some 89.8% of sitters passed the Strategic Business Management (ALSM) paper, 81.8% passed the Case Study (ALCS), and 80.1% passed the Corporation Reporting

(ALCR) paper.

These final level pass rates put many of the other accountancy bodies in the shade.

Mazars PQs picked up two of the prizes on offer. Harry Robinson was awarded first place in ALSM, and Belinda Shapcott was joint first

place in ALCR. In all, 9,473 exams were attempted. There were 913 PQs who sat all three papers, and 73.2% passed all three. Just 16 students failed them all, so most received some positive news on 26 August.

This compares with 582 candidates who sat just ALCR, and pass rate here was not so impressive – just 54.3% passed.

This means 226 students (45.7%) received a ‘fail’.

ICAEW ADVANCED JULY 2022 PASS RATES All candidates

First time

ALCS

81.8%

84.0%

ALCR

80.1%

83.6%

ALSM

89.8%

92.1%

Have I passed?

ICAEW may need to explain its text messages better, as many students had to admit they weren’t sure if they had passed or not when they received their results. Apparently, a capital ‘P’ after your mark indicates whether you have passed!

Prem Sikka is Em eritus Professor of Accountin g at the University of Essex

Taxwatch Pap Fines jump over tax misinformation The number of businesses fined by HMRC for deliberately obscuring their corporation tax affairs has jumped to its highest level in four years, revealed City A.M. recently.

Figures obtained by the newspaper discovered that the tax man penalised 62 firms for sending incorrect information to try to cut their corporation tax bill, that’s up from 46 the year before.

However, while the number of companies being caught went up 8

the penalties issued by HMRC went down. The average corporation tax penalty issued actually fell 72%, from £17,454 to just £4,845.

Pap Tax review of remote working abroad The UK’s Office for Tax Simplification (OTS) has launched a review looking at the increasing numbers of people choosing to work in different ways, including those working from abroad on remote working holidays.

The review will consider whether

the tax and social security rules are flexible enough to cope, and what businesses, advisors and other bodies are experiencing as new ways of working become business as usual.

The OTS also wants to identify ways in which developments in remote working may make complying with the tax system more complicated, and potential considerations for government in policy and operational terms.

For more see https://tinyurl. com/454m5y94

Pap London Landmark tax avoidance scheme named More tax avoidance promoters have been exposed by HMRC, with users warned to withdraw or risk large tax bills.

ContractorCare Ltd was recently named by the government as a tax avoidance promoter, along with PAYEme Ltd, and Gateway Outsource Solutions Ltd. Customers are being urged to withdraw from the published schemes and contact HMRC as soon as possible.

PQ Magazine October 2022

news PQ

IFA introduces new PQ 50,000 membership grade questions answered (and rising)!

The Institute of Financial Accountants (IFA) and the Institute of Public Accountants (IPA) – the IPA Group – have unveiled a new membership grade structure.

Among the changes is the new Intermediate Financial Accountant grade, which has been introduced as an entry point to institute membership.

It is aimed at part qualified accountants who want to obtain recognition for what they have completed to date.

To achieve this grade of membership applicants must either complete the Level 4 units of the IFA Direct education programme or an equivalent qualification, and have at least one year’s work experience in the accountancy or finance sector.

Those eligible will receive dual membership of the IFA and IPA and can use designatory letters after their

As part of its free services to accountancy students, OpenTuition. com has ‘Ask the Tutor’ forums in which students’ technical queries are promptly answered by specialist tutors.

And OpenTuition proudly announced that John Moffat, one of the founders, has recently passed an astonishing

name.

IFA CEO John Edwards (pictured) said: “The new membership grade aims to ensure that we have a cohesive global membership offering, regardless of where somebody is in their career journey or where they are based. It underlines our commitment to providing wider industry access to the many opportunities our membership offers.”

To find out more go to: www.ifa.org.uk/routes

Birmingham to be new home of ARGA The government has chosen Birmingham as the home for the UK’s new audit watchdog, it is being reported.

PQ magazine understands that the Audit, Reporting and Governance Authority (ARGA) has been told it must

Moffat: he knows the answer!

milestone by having answered a total of 50,000 queries. Quite a tally!

Congratulations John and, on behalf of accountancy students everywhere, thank you for your enormous dedication and hard work. locate its HQ in the West Midlands, and is currently looking for suitable premises and may even start to recruit staff.

The ARGA will take over from the Financial Reporting Council, which has nearly 400 staff working out of its City of London offices. How many of these current staff members will be willing to relocate is not clear.

The government has promised legislation in the next parliamentary session, but it has already delayed the creation of the ARGA until at least 2024.

Unlock your career potential Set yourself apart by becoming an Intermediate Financial Accountant Graduates, recently qualified and part qualified accountants our new grade of membership provides the support, guidance and recognition you need to set yourself apart in a competitive job market.

You’ll receive: • Designatory letters IFA AIPA • Access to a variety of technical resources • Relevant CPD webinars and networking meetings • Access to Financial Accountant, our member magazine • A weekly enewsletter covering accounting, finance and business • Exclusive offers from our carefully chosen strategic partners • Early bird discounts on annual conference tickets

IFA22_16_IntermediateFinAcct_ads.indd 2

PQ Magazine October 2022

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ANNA KATE PHELAN A chip in your head to get ahead?

Neurotechnology is essentially the enablement of the direct connection of technical components to your nervous system. For example, pioneers in the field are envisioning a microchip implanted in your brain that could enhance your intellectual abilities or allow you to access the internet without ever touching a computer.

Some view recent developments in the field of neurotechnology as an exciting leap forward for mankind, while others see it as one more inevitable step towards fulfilling our counterproductive penchant towards self-destruction.

There are many ethical quandaries at play. Will society be split into have-chips and have-nots? Who will own all that precious brain data? Will we all be controlled via some mainframe computer in Palo Alto?

Inevitably, amongst all the minor mind control considerations, there has been concerted focus on how that brain chip may upgrade you to the perfect little worker bee!

Imagine, instead of hours spent researching and digesting complex material, you could do a quick 20 second scan, put your feet up and have a brew! It’s been speculated that soon we’ll move from billable hours to billable attention, which would certainly be an interesting paradigm shift.

I don’t know about you but I’m not sure if I’m quite ready for an implantation any time soon, but it has inspired a revisit of Robocop (1, 2 and 3!).

Ann a Kat e Phelan is Senior Produ ct Manager at Eintech

Azets to add 900 JOB OF jobs across the UK THE MONTH Accountancy firm Azets has launched a national recruitment drive with plans to add 900 roles across its UK business in the next 12 months.

The roles cover all levels, from associate through to partner level.

The firm also expects to hire up to 400 graduates and school leavers to join in September 2023, that’s 100 more than the numbers joining this September and double the number for 2021.

Through proactive targeting

Action plan to fight corruption A new action plan to help accountants fight corruption and economic crime has been issued by the International Federation of Accountants.

The action plan sets out more than 30 specific actions for IFAC and the accountancy profession related to education, evidencebased policy, global standards, partnerships and thought leadership.

IFAC CEO Kevin Dancey said: “Corruption and related economic crimes, such as money laundering, bribery, tax evasion and fraud, are significant obstacles to economic growth and human development and, ultimately, to achieving the UN Sustainable Development Goals – all 17 of them.”

In welcoming the plan,

PwC partners in UK take pay cut to £920,000 PwC revenue grew 12%, to top £5bn in the UK and Middle East, according to the latest stats released by the Big 4 firm.

Partner profits were a cool £920,00 each, up 12% on last year. Now, the claim is that partners, who earnt £1 million last time around, have agreed to take a pay cut to fund rises for the firm’s rank-and-file staff.

During the year the PwC Global Network also disposed of the Global Mobility and Immigration business. Around 50% of the 10

of the over-50s, Azets hopes to fill at least 19% of its vacancies with returning retirees and career breakers.

This recruitment drive marks the latest milestone on Azets’ ambitious journey to increase revenue by 50% in the next five years through organic and acquisitive growth.

This year, Azets has completed the acquisitions of Tait Walker in the North East, Garbutt & Elliott in Yorkshire, and Inspire Accountants in the south of England, as Azets reinforces its position as the leading voice for the SME sector, with some 120,000 clients.

All vacancies can be found at www.azets.co.uk/careers where applications from those who are looking to work flexibly or part-time, reduced hours or term-time are encouraged.

CIPFA CEO Rob Whiteman emphasised: “Corruption exists in all global economies. Creating an environment in which corruption cannot survive is key, and I believe IFAC’s action plan will bring us one step closer to achieving this. Public sector finance professionals are dedicated to tackling corruption and economic crime and this new plan will support them in doing this.”

To see the action plan go to https://tinyurl.com/4ampzsbx

UK’s share of proceeds was reinvested in the business in support of its strategic priorities, particularly people, skills and technology. The balance was distributed to partners as owners in the business (average £105,000).

So, in effect, they still earnt their £1m plus salary.

Shake-up at KPMG KPMG in the UK has announced new executive committee appointments, effective 1 October, which it says will support the delivery of the firm’s strategy and growth under Jon Holt’s leadership.

After 32 years at the firm, COO Tim Jones will step down at the end of

Audit Senior

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September and retire in the new year.

Chris Hearld, the firm’s current CFO, has been appointed to a newly created role of Chief Operating and Financial Officer.

Records smashed in transfer window Premier League football clubs’ gross transfer spend totalled £1.9bn in the summer 2022 window, the highest spend ever recorded in a single transfer window by a margin of £487.8m, according to Deloitte’s Sports Business Group.

The previous record was set in the 2017 summer transfer window, when clubs spent £1.4bn. In 2021, Premier League clubs spent £1.1bn during the summer window.

PQ Magazine October 2022

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PQ tech the news

DAVID ROTHERA

Climate crisis: it’s a question of support

I don’t need to tell the readers of this magazine how integral accountants are to all organisations in the UK. The climate crisis is having a huge impact on the way we live, with the UK declaring a climate emergency in 2019. Pressure has been mounting for businesses to take action and implement strategies ever since.

Although accountancy sector emissions may not be as high as those from other industries, it is estimated in the UK that the sector is responsible for nearly 1% of annual business emissions. That’s approximately half-a-million tonnes of CO2e, equivalent to over 100,000 cars being driven for a year! There are over 280,000 accountants in Great Britain, advising over five million businesses and individuals. The influence and reach is enormous.

By understanding climate risk, accountants will be better able to advise and continue to support their clients in this continuously changing landscape. Some accountants already benefit from a Net Zero Accountancy Protocol, which was developed alongside the UK’s largest accountancy bodies including ICAEW, ACCA and AAT. Net Zero Now develops sector specific Net Zero Protocols to help SMEs more easily navigate global guidelines such as the GHG Protocol and SBTi. In fact, one of the first Net Zero Protocols developed was for the accountancy sector, as they believe that accountants can truly save the world.

David Rothera is Climate Project Manager at Net Zero Now

Digital consumer trends Growth in adoption of most digital devices has hit a plateau and, for some categories, has declined for the first time since Deloitte began surveying UK digital device ownership in 2011. This follows a record-breaking year for device adoption in 2021.

According to new research from Deloitte’s Digital Consumer Trends 2022 report, the proportion of consumers with access to smartphones (91%), smart TVs (64%), laptops (77%) and tablets (64%) has stopped growing, and for some devices declined, signalling a shift away from pandemic-induced technology habits.

Laptops and tablets had the biggest drop-off in adoption rate across the last year, falling by two and three percentage points

respectively. Of all device categories, only wearable devices enjoyed an uptick over the past year, with 41% of consumers having ready access to a wearable now, compared to 38%the year before.

Smartphone adoption has faced its first stagnation in

Digital Consumer Trends history, falling one percentage point from 2021. However, Gen Z consumers continued to adopt new smartphones, with 96% of 16 to 19-year-olds now having ready access to one (compared with 92% in 2021).

Payment infrastructure needs upgrading Modernising the UK’s ageing payments infrastructure will boost UK GDP by over £3 billion by 2026, claims a new report.

The in-depth study by ACI Worldwide and the Centre for Economics & Business Research (CEBR) ventures that the untapped potential of real-time payments could help push up the country’s GDP by 2.7%.

The UK currently lags the developing world in real-time payments growth and the associated economic benefits due to the UK’s ageing payments infrastructure.

The authors of the study said UK financial institutions need to get behind the ‘New Payments Architecture’ (NPA) modernisation programme or

Crypto debit card launched Mastercard is launching a cryptocurrency payment card after joining forces with crypto exchange Binance.

The new debit card will allow users to buy everyday items with bitcoin. The cryptocurrencies will be converted into fiat currency*, and will be piloted in Argentina following the official launch.

In a LinkedIn post, Mastercard chief executive Michael Miebach said the new card will help “unlock the full potential of blockchain technology” by making it easier to access and use.

It may be some time before this particular card is available in the UK as the FCA has blacklisted the exchange because

compromised or if this was a ransomware attack. Last month, a Holiday Inn (part of the group) in Turkey was breached by a hacker using the LockBit ransomware, who then released the stolen data.

disks, CDs and mini-disks. Konon is concerned that outdated technology is holding Japan back. He asked: “Where does one even buy a floppy disk these days?”

It won’t end there, as he said: “I’m looking to get rid of the fax machine, and I still plan to do that.”

risk the UK falling even further behind the rest of the world.

Led by Pay.UK, NPA is seeking to modernise the UK’s legacy payment infrastructure by delivering real time account-toaccount payments that provide consumers with more choice and newer, innovative payments options over more traditional payment types such as cards. of anti-money laundering failures. *Fiat currency definition: Fiat money is a government-issued currency that is not backed by a commodity such as gold.

Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the U.S. dollar, are fiat currencies.

Tech briefs Pap Unauthorised access InterContinental Hotels Group has confirmed its technology systems have been “subject to unauthorised activity”. IHG’s booking channels and other applications were significantly disrupted from 5 September. It has implemented its response plan, has notified regulatory authorities and is working closely with tech suppliers.

It also brought in external specialist to investigate the incident.

What is not clear is whether customer data has been 12

Pap War on floppy disks Japan’s digital minister, Taro Konon, has declared war of floppy disks and other outdated tech that he believes needs to be ditched.

Nearly 2,000 government procedures still require businesses to use storage devices such as floppy

Pap AI finds French ‘undeclared’ pools Some 20,000 undeclared private swimming pools have been ‘found’ in France, with the help of artificial intelligence (AI).

There is a higher property tax on buildings with pools in France and the tax authorities have amassed some £8.5 million in additional revenue through new software. Capgemini and Google developed the aerial image software, which was then trialled in nine French regions. The success means that tax officials now want the system to be rolled out nationwide.

There are an estimated 3.2 million private swimming pools in France and the average pool is taxed at £170 a year. That’s £544 million of tax revenue.

PQ Magazine October 2022

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The script vanishes!

I did the SBL exam in an exam centre in Dublin recently and when I clicked ‘next’ and then ‘review’ my entire case study answer disappeared – only the slides remained.

Someone on Reddit said the same thing happened to them, so I was wondering if you know if this was a more widespread issue? I also got a ‘character limit reached’ message which I hadn’t seen before.

The invigilator in my exam centre called Pearson Vue, but they weren’t able to advise if the exam had saved or not.

It’s my last exam, I was looking forward to the feeling of completing all my ACCA exams – I

thought the QH housing question was nice.

Anyway, I just wondered if

you might have more insight into whether this is a regular occurrence or if other people experience it this session? I’ve never experienced it before. I went with a centre based exam for my last one as I wanted to avoid any issues with remote invigilation.

Thanks very much and love the magazine!

Name and email address supplied The Editor says: We did hear of some isolated incidents, but are not aware of any widespread problems. It is always right to opt for a centre-based exam if you have any doubts about connectivity at home. Sorry, it seems you did everything right!

Check out the feedback on the latest exams on pages 34–35.

Our star letter writer wins a fantastic ‘I love PQ’ mug!

Why stop at Ukraine?

I was appalled to see ACCA put a section on Ukraine on its website.

Is ACCA a professional organisation still or a propaganda machine? It would not know the first thing about what is going on there. Would it also suspend operations in China for their numerous ill deeds? Or suspend operations in America for what they have done to the Middle East? If it really cares about the injustices across the world, why stop at Ukraine?

Our Russian members are just ordinary folks trying hard to build a decent life like everyone else; they have nothing to do with Russian politics or military. Absolutely disgraceful.

First we had the nonsensical rules surrounding Covid, now this.

ACCA should stay above this and maintain its neutrality and professionalism. As they say, stay in your lane and stick with what you know. In this specific case, ACCA should take a page from Switzerland.

Name and email address supplied The ACCA told PQ: “We are committed to supporting our members and students wherever they are, and in whatever circumstances. The horrific war

in Ukraine has created huge challenges for our Ukrainian members and students, but it has also raised questions for those in other countries, for example on sanctions.

“Our hub is intended to provide

support on these issues.

“On Russia, we continue to follow and support government sanctions in our own operations, but our members and students in Russia and Belarus continue to be part of the global ACCA community.”

Her Majesty Queen Elizabeth’s death led to many tributes from across the profession on social media.

Orla Collins, ACCA’s president, said: “The Queen’s values were our values. She believed in and displayed the same qualities we hold dear including decency, integrity and inclusion. She showed that in the way she carried out her official duties with perfect dignity.

“And she showed a deep dedication to people all around the world in her many travels, and in her work with the Commonwealth – a devotion that was recognised and acknowledged in the messages of love for her that have poured in from every corner of the globe.”

CIPFA CEO Rob Whiteman said: “On behalf of @CIPFA our deepest condolences to the King and royal family on the loss of HM Queen, our longest serving monarch whose devotion to duty was outstanding and inspiring. A remarkable woman and a life of service well lived.” #queenelizabeth.

Liz Truss is now Prime Minister, and she is the first management accountant (CIMA) to ever hold the post; in fact she’s the first accountant to be PM. The ICAEW must be bit miffed. It also means not one but two accountants are living in number 10. Her husband, Hugh O’Leary, is a different type of chartered accountant!

Elsewhere, ICAEW Michael Izza congratulated Jacob ReesMogg on his appointment as Secretary of State for BEIS. He said: “Mr Rees-Mogg is the fifth Secretary of State since the collapse of Carillion in 2018 and we hope that he will not allow the government’s commitment to #audit and #corporategovernance reform to drift further. It is essential for restoring public and investor confidence – and now long overdue.” We all have our fingers crossed.

PQ Magazine PO Box 75983, London E11 9GS | Phone: 07765 386489 | Email: graham@pqmagazine.com Website: www.pqmagazine.com | Editor/publisher: Graham Hambly graham@pqmagazine.com | Associate editor: Adam Riches | Art editor: Tim Parker Contributors: Robert Bruce, Prem Sikka, Lisa Nelson, Anna Kate Phelan, Tony Kelly, Phil Gammon, Edward Netherton | Subscriptions: subscriptions@pqmagazine.com | Origination services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email admin@pqmagazine.com

Published by PQ Publishing Ltd © PQ Publishing 2022

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PQ profile PQ Jean-Paul (right) with the world's most influencial matchmaker Paul Brunson

Can’t help falling in love with Jean-Paul

Graham Hambly meets ACCA Jean-Paul Noel-Cephise, a man who is helping to show your qualification really can take you anywhere

J

ean-Paul Noel-Cephise is an accountant, programme director for London South Bank University, life coach, TV presenter, author – and is about to become an Elvis tribute act!

Is there nothing this man can’t do? Well, the simple answer is no, and if you spend any time in his company his love for life and enthusiasm will rub off.

Welcome to the show A prime example of his tenacity is his TV programme ‘The Jean-Paul Show’. He felt there just weren’t any talk shows on TV talking to the people he wanted to hear from, so he started his own. Now in its second series on Sky channel 182, he interviews musicians and entertainers, mainly from the black community, but he does it in a way that doesn’t glamorise the guests. He wants to know what made them successful and what part their family played in it all. Recent guests have included Paul Brunson, White Yardie and Omar. Oh, and he also does all the post-production, too. That he admits has been a hard learn.

Jean-Paul qualified as an ACCA in 2006. It wasn’t his first career choice. He had just got married and was working as a business analyst by day and a massage therapist in his spare time. He’s also worked as a legal executive.

PQ Magazine October 2022

However, he stuck with it and on qualification he became a finance controller for G4S. Studying wasn't natural He admits he didn’t enjoy studying, and feels in truth it’s just ‘not natural’. It’s the whole thing about learning stuff you are never going to use again and simply forget. However, he took his final exams at BPP and a couple of tutors there were real ‘entertainers’ and he loved that – it made learning so much more interesting, he said. They also saw the potential in him too, and asked him to do a presentation. Halfway through that presentation they stopped him and simply said “come and work for us”!

He was still working in industry at the time and had to take a £15,000 drop in salary, but there was a promise of more to come. Jean-Paul explained: “I had grown tired of the people trying to sell me out in meetings, but you get trapped by the money.” He went on: “At BPP there was a real team ethos and they wanted me to be myself.”

Along his journey he worked for Kaplan and then went freelance, and is now the business management programme director for London South Bank University at its fantastic new hub in Croydon.

He stressed that with the ACCA qualification

you really can go all over the world. “It’s such an amazing qualification to have,” he said.

Jean-Paul now offers life coaching too, specialising in business presenting, something again he seems a natural at.

Deadly dating PQ magazine first came across Jean-Paul a few years ago when he released his book ‘7 Deadly Dates’. After a long marriage he and his partner split up, and like everyone else he tried the internet to find the new love of his life.

However, what he found when he was dating was that no matter how the person looked in their photo or how they described themselves in their profile they were “rarely put together exactly as I had thought they were”. So ‘7 Deadly Dates’ recounts the surprises that he found and how he attempted to cope with them while also trying to enjoy the date.

Finally, for his latest venture he has started to record music. He hired a voice coach and is planning a 15-track album. He will be singing Elvis, which was a surprise, but Jean-Paul told us Elvis was simply “one of the best”. He also identifies with his sincerity and sheer vocal range. There are plans to enter a competition as an Elvis tribute act. We have heard the tape and he can sing, of course he can, and his coach says he has a nice pitch. So, you may be hearing him at the next PQ magazine awards – although we haven’t told him about that yet!

We asked what keep him going and so positive, and he said: “I am in my prime, so I need to continually challenge myself. My kids have always been my priority but they have sort of grown up, and I need to put this energy somewhere.”

One thing is for certain: Jean-Paul is not caught in a trap.

17

PQ study advice

Studying with anxiety and how I managed to overcome it E

Andy Murray explains how stress affected him and what he did to make his situation better

xperiencing anxiety for the first time while studying was not something I expected to encounter on my study journey. It’s hard to explain in words but it’s a mixture of feelings – confusion, isolation, sheer panic – and it’s very uncomfortable.

I’d never experienced anything like it. At first, I didn’t know what was happening and kept ignoring it, thinking it was just a bad day. It affected my study, sleep, social life, relationships and I couldn’t work.

Looking back, it’s was vital to take some time out, whether it’s an hour or, if you are fortunate like I was, a couple of months. Taking time to understand anxiety and what may trigger you to experience feelings of anxiety is really important in helping you develop coping strategies. The flexibility of studying part time enabled me to draw out the positive of having something to focus on without feeling the pressure of studying full time.

Anxiety is different for everyone and therefore some things help more than others. Keeping an open mind and using a combination of medication, meditation and counselling worked for me. I decided not to jump into a new role too quickly, not until I was ready to return to work. I took my time to put a plan in place to find my next employer. When looking at my next role I focused on companies that offered a culture I would find empowering, especially those who were supportive of my continued studies.

Having a plan of action has always helped me to focus. More than this, engaging in conversation helped me too. I spoke to my college to ensure working and studying together again wouldn’t be overwhelming. I received some great advice and found them to be open and supportive. I learnt to focus on one exam at a time and not to rush the learning and exam process. When I started to feel really anxious I knew that things could change very quickly, so not planning too far ahead was the best advice I was given.

Top tips to take away • Take your time with studying – it’s not a race or a competition.

18

• Take some ‘you’ time. Reward yourself after certain milestones are met. For me, this might be for lunch or dinner, a trip to the cinema or a spa treatment for passing an exam or getting halfway through a level.

• It’s so easy to feel guilty if you’re not studying, but you need time to digest information and deserve frequent breaks.

Remember to put the books down too!

• Use your student networks for study

support – I found some great Facebook groups with students and tutors that I wish I’d found much sooner!

• Remember why you are studying for the qualification. Focus on the long-term goals and aspirations. It is so worth it!

• Andy Murray is a former AAT student and now a fully qualified AAT member. See for next month’s PQ magazine for more from Andy.

PQ Magazine October 2022

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PQ AAT Q2022

New suite of AAT qualifications are here The new Qualification 2022 has landed, ensuring AAT PQs can future-proof their careers in finance

A

AT’s new Qualifications 2022 (Q2022) suite was finally launched on 1 September, with the aim of ensuring that accounting technicians everywhere have the skills they need for a changing profession.

The association said the changes were needed to the qualification in particular because of the increasing use of new technology and software. Research also identified the new skills essential to accounting technicians of the future: analytical, advisory, and the ability to use technology. To reflect these skills four new key themes have been embedded throughout the new qualification – technology, ethics, sustainability and communication – from being referenced at Level 1 to the ability to understand the impact and analyse the themes at Level 4.

New business units will also help develop a better understanding of a technician’s role in the workplace, and take them through all

20

aspects of preparing financial statements and applying management accounting techniques.

Q2022 will be assessed using ATLAS Cloud, the new assessment platform, which will, says the AAT, “ensure the assessments remain at the leading edge of online delivery”. The platform features enhanced features, includes the ability to view task instructions and reference materials side-by-side, and highlight key details, hopefully giving students a better assessment experience overall.

Other changes for Q2022 include: • The qualification names will be changed from Access, Foundation, Advanced and Professional to Level 1, Level 2, Level 3 and Level 4.

• Three qualifications are being withdrawn – the current Access Award in Accounting Software, Foundation Award in Accounting Software and Foundation Diploma in Accounting and

Business. Anyone wishing to study these qualifications had to register for them by 31 August 2022 and will have until 30 September 2023 to complete them.

• The Level 2 and Level 3 Certificate in Bookkeeping qualifications will now be graded in the same way as the accounting qualifications. A final grade will be calculated based on weighted results from unit assessments and students will receive an overall grade of Pass, Merit or Distinction.

• Synoptic assessments will be replaced by individual unit assessments, except for the Level 2 Certificate in Accounting which still has a synoptic assessment under Q2022.

• Q2022 students will now pay a one-off registration fee, rather than an annual membership fee, giving them access to the qualification for its lifetime (typically four to five years). This enables students to register for their chosen qualification, sit assessments and access AAT’s study support resources via a Lifelong Learning Portal, an online platform which enables students to manage their key resources and track their progress.

• Resit restrictions have been removed from all the Q2022 qualifications at this time. However, they may be applied to 16–19-year-olds who study the Level 2 Certificate in Accounting at a later date.

More information about Q2022 and the changes AAT has made is available on the AAT Comment website.

PQ Magazine October 2022

PQ viewpoint PQ

The future accountant: embrace, adapt, excel First the pandemic, now the cost-of-living crisis and business turbulence. The accountancy sector needs to mentally prepare for the opportunities within its grasp, says John Edwards

W

ho would have guessed that Covid would be the tip of the iceberg?

Now there is a plethora of tougher challenges organisations are having to face: insolvency, escalating energy prices, tax rises, the cost-of-living crisis, a change in Prime Minister and likely political and economic policy changes, not to mention the Russia-Ukraine conflict with its global consequences.

However, accountants can help position their finance functions and in turn help their business navigate their way towards a more profitable, long-lasting future through effective adoption of new technologies. Looking at the entire business – the bigger picture – and focusing on staffing and building the team of the future.

In a recent poll of 136 accountants, when asked on how confident they felt about the future in their roles, 30.1% said they were not at all confident. However, the second largest number – 25% – said they felt totally confident.

A reflection surely of the complex challenges and unique opportunities that face the sector in the coming months and years ahead.

The automation switch A decade ago, 75% of the work of a finance

PQ Magazine October 2022

function was repetitive most paper usage, they will processing work, while around also speed up access for 25% was advisory. Those multiple users, boost visibility figures have now flipped as and accountability, and cut most businesses automate down fraud. This integrated, processes and systems and streamlined and generally look to their finance function for inexpensive way of working also deeper analysis and forecasts. increases work efficiencies, It’s now vital for finance saving your team a significant functions to present themselves amount of time. as profit generators rather Also, considering options such Edwards: ‘automating timethan cost saving centres. The as signing up for independent consuming, manual tasks means demands of today’s business freeing up accounting staff to focus verification from organisations climate are forcing us to do like ‘BCorp’ can provide an on more strategic work’ more with less. Even the most added edge over competitors. B crucial cost-oriented operational teams are Lab UK, a non-profit arm of the B Corporation, now asked to deliver greater value toward the focuses on building and strengthening organisation’s bottom line. Automating timesustainable businesses with verifiable social and consuming, manual tasks means freeing up environmental credentials. accounting staff to focus on more strategic work.

The pandemic’s role in the accelerated journey to digital transformation may be just Sustainability as a key strategy the unexpected shake-up we need. Intelligent Focus is on survival, but businesses need to systems can enable better decisions in business also consider their environmental, social and and accountants now need to prove they can governance (ESG) capability and recognise that adapt and harness them to their advantage. it’s something that they must prioritise.

• John Edwards is CEO of The Institute of Using cloud-based tools not only cuts out Financial Accountants (IFA)

21

PQ CIPFA student conference

Levelling-up

roundtable In its second roundtable, CIPFA brought together more public finance leaders of the future to see what they thought of the levelling up agenda. Is it working?

C

IPFA’s chief economist, Jeffrey Matsu, kicked off the levelling-up discussion at the recent CIFPA student conference in Liverpool. He explained that the levellingup agenda contributes toward the UN’s Sustainability Development Goals, which have been in play for eight years. In total, there are 17 goals that countries around the world, including the UK, have committed to achieving by 2030. The global call to action is ambitious, targeting interlinked goals such as 'reducing inequalities’ and ‘partnerships’. The latter is where central and local governments can serve as enablers, partnering with the private and third sector to share risk and deliver change, he explained.

However, some of the challenges of inequalities in education, health and jobs are deeply rooted and longstanding. Improving access to opportunities and raising productivity in areas with some of the lowest living standards has been a difficult nut to crack. Matsu said there is now a recognition that investments must go beyond infrastructure. The UK government’s levelling-up agenda has made a commitment to develop human capital and social and wellbeing as part of its ‘6 capitals’ framework. In his view, it is incumbent on all of us to embrace this more diversified approach to policy making. The floor was then opened to the panellists.

themselves and the levelling-up agenda will help central and local government look seriously at these issues.

Lucy: For me levelling-up, and the White Paper, are at the heart of what local authorities and local councils stand for. That’s why it’s something I am interested in, and anything that improves people’s lives on a day-to-day basis is something I am very passionate about.

Zydrune: I have been briefly involved in monitoring levelling-up budgets for the capital side, and for me I am looking for new ideas and new opinions on how we can achieve levellingup in local authorities.

James: I currently live in Reading and have grown up in Surrey Heath. The White Paper doesn’t paint the South East as one of the key targets of levelling-up, so I am interested to come to the table and do some research to see what, if anything, levelling-up could mean to a place like the South East and London.

Joshua: I am interested in levelling-up because of its ability, I think, to potentially resolve decades of deficiencies in central government’s approach to local government funding. Leicestershire County Council is the lowest funded county council in the country, so I am passionate to see how new funding approaches could improve engagement with local communities and the levelling-up agenda.

Why are you interested in the levelling up agenda?

Nadim: I work and live in London. London is a preeminent global city with high levels of economic, political and cultural success.

Despite this there are high levels of poverty and deprivation, and great levels of inequality. I believe these inequalities will not be solved by

What kinds of levelling-up policies would be effective in your region?

Joshua: We are the lowest funded county council and there are going to be a lot of other counties that have issues with the way central government funds them. They [Central Government] need to get the funding right - matched with the needs and demands of citizens and taxpayers. Leicester is a postindustrial city, and there are quite a few areas in the county that suffer from the many socio-economic challenges that a postindustrial society presents. I think we need policies that focus on education, employment, entrepreneurialism, and transport infrastructure.

Investment in these areas would help to alleviate the aforementioned issues. Funding is key though; we need to get that right before we can get the levelling-up agenda working and really drive new opportunities.

James: Reading has become a bit of a Silicon Valley of the UK and there is a strong tech

AUDIENCE POLL What policy objectives do you think is most pertinent to levelling-up in your geographical area?

Boost productivity, pay, jobs and living standards 56% Spread opportunity and improve public services 21% Restore sense of community 19% Empower local leaders and communities 5% 22

AUDIENCE POLL In terms of outcomes relating to the main priority you identified, to what extent has levelling-up been successful over the past 12 months?

Significant improvement 0% Moderate improvement 9% No change 65% Negative impact 15% Not sure 11% presence along the M4, but it’s apparent that hasn’t trickled down to all the communities in the town. There are still areas of poverty and inequality which need addressing.

Zydrune: Funding is very important, but we need to have accountability too about how any money is spent. We need to measure the impact of that funding and how it has affected the daily lives of people.

Lucy: The combined authority has given powers to local leaders to make local decisions for their area. It’s really beneficial when the people making decisions for your area are based in that area too. People can target funding to have more impact when they are living there, and it gives local people a pride of place.

Nadim: I agree with Lucy, devolution is a massive part of the levelling-up agenda.

PQ Magazine October 2022

PQ CIPFA student conference PQ

AUDIENCE POLL To what extent do you feel levelling-up in your region will be achieved by 2030?

Optimistic 21% Neutral 32% Pessimistic 47% How connected are you and your community with the levelling-up agenda?

Lucy: I feel very disconnected. The White Paper is a lovely vision and it resonates with me, but on the day-to-day basis and with the cost-of-living crisis, it’s hard to see how anyone connects to it.

Zydrune: There are a lot of grey areas between what is in the White Paper and what becomes part of the planning and the reality and what will work in the long-term.

Nadim: For education, technology and business it is seen as a welcome agenda, but as always there is a disconnection, as with housing. Disparities are still there.

Joshua: I am optimistic, but people need to see levelling-up in practice. There is still an expectation gap to fill, and I feel that there needs to be more devolution to secure proper engagement. Taxpayers will need to feel the impact of fairer funding before they become more connected with the agenda. At present, I feel many taxpayers see the levelling up agenda as a means to secure votes.

Productivity was a key part of this agenda, and devolution and decentralisation are needed to help investment in local businesses and in technology.

Does levelling-up mean some communities will receive more and others less?

James: This is a discussion I had with a colleague – the White Paper talks about bringing everyone to an average, but in essence that means anyone who is above it will have their potential lowered a little bit. Objectively, we want to redistribute where we can, but the problem is making sure a council doesn’t lose resource, that it does not impact those most vulnerable.

Nadim: I think there is a lot of negativities attached to the levelling-up agenda, particularly in London. They will get less – but it could be argued that in some parts of London there are higher levels of poverty, deprivation and inequality. In Hackney, we have a massive housing crisis where rent rates are unbearable for people. It also means the council can’t accommodate local people and they have to move them out of the area. How will levelling-up help that issue?

Do you have some examples of successful levelling-up initiatives?

Lucy: Yes, Coventry was the City of Culture 2020 and that was something where the PQ Magazine October 2022

AUDIENCE POLL Do you have confidence in your organisation having the finance to deliver adequate services?

Yes 35% No 53% Not sure 12% community found theatre, music, art and culture was on their doorstep and available to them. This was something incredible and you don’t find that very often. It was at no cost or very little cost and available to all! It gave people chances and supported them with skills, innovation, literacy, that came with the City of Culture award. It also gave people some pride in their city, uniting the city.

Joshua: We have an infrastructure initiative with the roll out of superfast broadband across Leicestershire. A lot of areas in the county are quite rural and have historically suffered from very slow internet speeds. The ability to access Superfast broadband across Leicestershire has gone from 6% in 2019 to 69% at the beginning of this year. This is an important development for citizens as well as businesses – with superfast broadband, rural Leicestershire may become a more attractive area to invest in.

How can we successfully implement levelling-up in the long-term, when there is so much uncertainty in national government?

James: Clear targets and success indicators will tell us if we are working on track. Levellingup is going to mean such different things to different parts of the UK, it will be very tricky to measure success.

Matsu concluded the discussion by asking whether ‘everyone’ can be prosperous?

Will there always be winners and losers in a free market society? For example, does entrepreneurship tend to thrive in areas where greater risk-taking is rewarded by the potential for financial gain?

Ultimately, he would like CIPFA students to ask the tough questions and challenge what governments are doing to create more accessible opportunities and a level playing field for broader swathes of society. Developing the skills in public financial management to contribute to this step change is needed now, more than ever.

Meet the participants Zydrune Condon, Management Accountancy Support Officer, Bury Council James Hall, Trainee Accountant, Reading Borough Council Lucy Higgins, NGDP Trainee Accountant, Coventry City Council Joshua Malam, Management Accountant, Leicestershire County Council Mohammed Nadim Zaman, Service Accountant – Adults, Health and Integration, London Borough of Hackney 23

PQ CIPFA spotlight

It’s all about the numbers Finance leaders need access to reliable data to make the difficult decisions, says Sarah Shreeves

H

aving the right data to inform effective decision making has never been more important. With soaring inflation and the cost-of-living crisis showing no signs of relenting, households across the country will be cutting back to stay afloat.

Local authorities are no different. They too will be facing inflationary pressures from rising energy bills, wages and material supplies, to name just a few. Without significant extra funding from central government on the horizon, local authorities will be delivering essential services with money that doesn’t stretch nearly as far as it did just six

months ago. Tough decisions are going to need to be made.

This is where having access to robust and reliable data and insight will prove to be invaluable. Senior finance leaders need to have access to this data in order to inform the tough decisions they will need to make – decisions which may have a real impact on people’s lives.

It is vital that the process of decision making in the public sector is transparent and open. Choices around where to make cuts and where to channel scarce resources will not be easy, so having data to inform and

support these decisions is key.

But having a wealth of data is not enough. We need people working in the public sector who know how to analyse it, interpret it and present it to senior leaders.

CIPFA’s new Certificate in Data Science, delivered in partnership with the Southampton Data Science Academy, explains how to work with data in an effective way to unlock the value it holds. The course will teach students how to interpret data and how to communicate insights to those without specialist technical knowledge.

Students will learn about the key concepts in data science and how to prepare and analyse data from world-leading authorities in data science. The course takes a practical, hands-on approach to teaching, aiming to give students as much exposure as possible to real workplace examples of data science in action.

In our public services, we need more skilled data professionals who are able to use and analyse data to provide senior leaders with the reassurance and support they need as they make increasingly difficult decisions.

Delivering value to the taxpayer should be a central motivation for any professional working in the public sector. The ability to harness the power of big data and gain valuable insights from it can support decision makers in continuing to deliver value – even through these most challenging of times.

• Sarah Shreeves, Head of Training Services, CIPFA

ETHICS AND PROFESSIONAL SKILLS The Ethics and Professional Skills Module (EPSM) is an essential part of the ACCA Qualification.

Become a trusted finance professional with skills including leadership, communication and commercial acumen and increase your chances of success with the Strategic Professional exams.

bit.ly/3iOjB52

24

PQ Magazine October 2022

CIMA spotlight PQ

Worry-free exam preparation Mark Foley has some sage advice on how to get your mindset right as you approach exam day

F

or most people, it does not matter how long you study or how many practice questions you do, you will still have a feeling in the back of your mind that you are not quite ready to sit the upcoming exam. Here are some ways to boost your confidence and exam preparedness.

Maintain perspective You are not the first person to feel this way. Most people get anxious about exams. It’s normal.

As the exam date looms, anxiety can set in, and your thoughts can become negative. You can talk yourself into the idea that you don’t know enough and you’re going to fail, even though you know you’ve studied for weeks and worked hard.

If you find yourself in this situation, reflect on how hard you’ve studied. Let those positive thoughts replace the negative ones.

Stay pragmatic. Although you do need to have a thorough understanding of the entire syllabus, you also need to be realistic and consider two things. Firstly, you may not feel 100% confident about everything and you will always be stronger in some areas than others. Secondly, your goal may well be to simply ‘pass the exam’, not to get the best score.

Study smarter, not longer Assess if you are exam ready. Asking yourself these questions will clarify if you are exam ready: • Have I kept to my study plan?

• Have I covered all syllabus topics?

• Have I completed enough exam-style questions? Am I happy with the results? If not, why not?

• Are there some unclear syllabus areas? What can I do to be more confident in these areas?

Connect with your peers One of the best ways to study for success is with the support of fellow candidates. You are on the same journey and can learn a lot from each other’s experiences.

PQ Magazine October 2022

Technology means that friendships and support can come from anywhere in the world.

As a result, fellow candidates world-wide have access to extensive support networks.

Many CIMA candidates use social media, and one has created ‘The CIMA Student’ to blog about their progress and share some of their best study tips.

Prepare thoroughly. Sharing your learning journey and experiences with fellow peers, seeking feedback from them and following your study plan, will give you confidence as you progress.

Prepare for success with study tips • Find 90 minutes a day to dedicate to studies or exam revision. Consider two 45-minute focused sessions with no distractions such as checking your phone.

• Face your fears. It’s important to tackle the tough subjects you are struggling with.

Push yourself and face the challenging parts of the syllabus and exam questions.

Don’t just revise areas and subjects you are comfortable with. Knowing the basic financial ratios means little if, you cannot understand the makeup and implications of the weighted average cost of capital. Also, passively reading revision notes might not aid your learning as much as actively performing

question practice.

• Make a study plan. It may sound obvious, but many students dive straight into the syllabus without any idea when and how they will complete it all. Avoid doing this. A clear plan will not only keep you on track but will also act as a motivational tool. Work back from your exam date and make sure you leave 10 to 14 days for mock exam practice and final revision.

• Stick to your study plan and take your exam as soon as you have completed it, so the material is fresh in your mind.

• Seek feedback from your peers and tutors.

Feedback is particularly important and relevant for the case study exams. You need to get feedback on your long-form question practice and exam technique. Take time to digest the feedback and take it on board.

Listening and self-reflection are great skills to have if you want to improve in any way, shape, or form – not just for your studies.

For tailored guidance to help you prepare for your CGMA designation, the CIMA dedicated Study Support team is here to help.

• Mark Foley, Director of Relationship Programmes – Management Accounting at the Association of International Certified Professional Accountants, representing AICPA & CIMA

25

PQ Share options

A question for Tom This month top tutor Tom Clendon explains all you need to know about share based cash flow

Question When employees are granted share options in their employer’s company do these have to be expensed to profit? My understanding is that the company has not, and will not, have a cash outflow in respect of this transaction.

Tom’s answer In short, yes and yes! While you are correct that the granting of options to employees does not result in a cash outflow for the company, nevertheless they must be expensed to profit.

Let me explain.

It is wages Options are granted to staff as part of their remuneration package. If the share price has risen when they come to exercise the options, then the employee makes a profit. Options therefore act as an incentive for the staff to work harder so the business is more successful, so the share price goes up and they get a bonus!

A failure to recognise part of an employee’s remuneration would mean staff costs being understated and profit overstated.

A transaction of value While there is no cash flow to measure the cost of the option and hence the expense, these types of options will certainly have a value. This value is subjective, so has to be determined by an actuary.

But it has a value, and one that can be measured reliably.

The financial statements need to be complete A failure to record the issue of the options and the expense of wages would mean the financial statements would be incomplete. If financial statements are incomplete, then they cannot be a faithful representation. If they are not a faithful representation, then the financial statements will not be useful.

It is not without precedence Charging an expense to profit without any cash outflow underpinning the transaction is not

without precedence. Whilst depreciation is a noncash expense, the purchase consideration used to buy property plant and equipment is normally cash. However, in the majority of cases business combinations only involve a share for share exchange. This means that the impairment loss on goodwill is another expense charged against profit where the expense is not underpinned by a cash outflow.

The accounting Just to reiterate that issue of share options to employees does not involve a cash outflow for the company.

During the vesting period there is a charge to profit to represent the expense.

The other entry is to equity to reflect that the option is an equity instrument. Dr PL exp and Cr Equity (Other Components of Equity). No cash flow there at all.

But if at the end of the vesting period the options are exercised by the employee, then the company receives cash from the employee and issues shares to them. Dr Cash and Cr Equity (Share Capital). No cash outflow there – in fact, the company has a cash inflow!

• Tom Clendon is an ACCA SBR online lecturer and podcaster. See www.tomclendon.co.uk or WhatsApp 07725 350793 (+44 7725 350793)

PROFESSIONAL ACCOUNTANTS AT THE HEART OF SUSTAINABLE ORGANISATIONS

Now and in the decade ahead the professional accountant as the sustainable business and finance professional in any role is the trusted professional working at the heart of sustainable business.

Discover our latest research, visit https://bit.ly/3BhtKxU

26

PQ Magazine October 2022

PQ ACCA spotlight PQ

The only way is ethics

A profound knowledge and respect for the highest standards of professional integrity are a condition of entry for new accountants, says Ann Lamb, ACCA’s director – professional qualifications... thics’ means a lot more to accountants than the name of the English county that lies between Suffolk and Middlesex.

Along with our professional skills, ethics are the area where we make our difference. That’s especially true in the digital era, when business needs the human element to prevail against a trend to delegate decision-making to artificial intelligence, algorithms and the dead hand of big data.

It’s why ACCA became the first accountancy body in the world to include an ethical component into its Qualification. Our industryleading Ethics and Professional Skills Module (EPSM) ensures that no one can claim those magical four letters – ACCA – after their name without studying, absorbing and demonstrating a profound knowledge and respect for the highest standards of integrity and ethical behaviour.

EPSM introduces students to broad ethical and professional values which underpin all other skills and behaviours. Those values provide a framework and a moral compass for the accountant to guide their actions. At the same time, professional skills give you the confidence to hit the ground running in business, building your abilities in decision making, leadership and communication.

The module has been in constant review since it was launched to ensure it remains up-to-date with the latest developments in business life.

It’s a condition of entry, and rightly so.

First of all it’s important to define what we mean by ‘ethics’ in the modern world, because the issues aren’t always as clear-cut as they used to be. Just ‘doing the right thing’ and ‘following your conscience’ used to be a good guide. Now, with the prospect of advanced machine learning taking decisions away from people, we need a more active pursuit of good ethics. Fine intentions are not enough.

It’s usually clear what bad ethical behaviour is. But what does good ethics look like? It’s sometimes less obvious, but if we embrace three universal values we can be confident we are on the right path to working with integrity, dedication and wisdom and, crucially, serving as defenders of the public interest.

They are:

‘E

ADVANCE YOUR CAREER IN ACCOUNTING www.e-careers.com (accounting) PQ Magazine October 2022

1. A determination to understand digital technology as it advances, with all its plusses, perils and pitfalls.

2. Displaying the confidence to apply our knowledge in real-world situations.

3. Thinking globally, with a consistent ethical framework guiding us.

These are vital because a huge challenge for business in the decades to come is trust – how far customers, investors and employees are prepared to support them, trade with them, or work for them in an environment where transactions are increasingly data driven.

These are the big questions facing us, and how we answer them will decide the future of business.

The fact that we work in an online and digital world puts ethics under the spotlight more than ever. We face dilemmas about the use of data, oversight and accountability that would have been alien to earlier generations.

I am biased, I know, but I believe that our EPSM module is such a valuable innovation because it promotes the concept of ethics imaginatively, creatively and accessibly. EPSM cultivates finance professionals who can use their technical expertise to support sound

decision making in a dynamic world.

It is unique in several respects. For example, we’ve introduced peer assessment, where students review other students’ work – which we know is an effective way of reinforcing and validating a common learning culture. The module isn’t about top-down teaching. EPSM doesn’t come with a formal exam. It features informal testing as you go, discovering and working through concepts as an individual, and students complete it at their own pace.

Having said that, I always advise students to try to work through EPSM before their Strategic Professional exams, because the marking scheme rewards students who demonstrate their professional skills alongside a mastery of ethical standards.

And that’s so important, because it’s these elements that separate us from the machines.

The role of accountants is to deploy their professional skills to protect that human element – that ability and willingness to assess ethical consequences and act upon them. It’s that crucial role we are called upon to fill in the years to come.

• Ann Lamb is ACCA’s director – professional qualifications

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PQ CGMA FLP PQ

New path to success Paul Turner tells you everything you need to know about the CGMA Finance Leadership Program at the most appropriate entry point.

T

he Association of International Certified Professional Accountants, representing AICPA & CIMA, has officially launched the CGMA Finance Leadership Program in the UK, an alternative pathway to complete CIMA’s CGMA Professional Qualification and earning the CGMA designation.

CGMA Finance Leadership Program candidates will study the same syllabus, sit the same case study exams and need the same practical experience requirement as those on the traditional pathway. However, it will be delivered through self-paced e-learning.

Developing the next generation of business leaders Combined with the technical, business, people and leadership skills covered in the CGMA Syllabus, the CGMA Finance Leadership Program allows candidates to attain a worldrenowned qualification and demonstrate to employers that they are outstanding professionals with the skills and competencies

needed to drive long-term business success.

The CGMA Finance Leadership Program incorporates the CGMA Competency Framework, a robust model based on extensive research from employers worldwide, ensuring candidates are cultivating the skills that the world’s leading organisations seek.

By earning the CGMA designation, candidates will: • Become strategic leaders.

• Become more nimble and agile for any business challenge, project or role.

• Develop a broader foundation of business and finance knowledge.

• Drive more actionable insight into a business.

• Become more versatile and cross-functional business partners.

Accessible entry routes for every level Unlike more traditional routes to the CGMA designation, the CGMA Finance Leadership Program was designed from scratch for working professionals. Candidates can start their studies

Sign up online for your free copy of

PQ magazine

If you have a …

You will start at the …

Bachelor’s degree with a major in accounting or finance

Management Level

Bachelor’s degree or higher with a major in business

Operational Level

Professional accounting designation

Strategic Level

Study at your convenience One of the great things about the CGMA Finance Leadership Program is that it incorporates flexibility into the program to ensure candidates learn the material and test their skills.

Many candidates will already be juggling important jobs and personal commitments, so we believe this approach will spearhead a more realistic approach as other profession-leading programs review their course frameworks.

Exams are administered by our exam delivery partner, Pearson VUE, which offers more than 5,100 testing centres worldwide. Candidates can take the required exams in the comfort of their own homes or at the nearest available test centre.

For candidates who opt for the FLP premium pathway, we have partnered with Kaplan who will provide expert-led live online classes for competencies and Case Study preparation, as well as a tutor who can be contacted to give further help on difficult topics.

CGMA Finance Leadership Program overview Candidates can complete each level within nine – 12 months.

An estimated 150 to 200 hours of study are expected to complete each level.

Candidates can manage and track their progress with a personalised learning dashboard.

Each Case Study Exam is offered four times a year. Pro tip: prepare four to six weeks before the exam with several pre-read materials.

Results are published about seven weeks after the exam.

To learn more about how far the CGMA Finance Leadership Program could take you, visit our website.

• Paul Turner is UK & Ireland Regional Vice President, AICPA & CIMA

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29

PQ payback period

Getting your money back Teresa Clarke explains how to calculate the payback period for a project Year

T

he payback period is the length of time it takes to ‘get your money back’. I would always recommend using a table to calculate this, even if the task does not require it. It helps to work out the correct answer and avoid errors.

Here is an example.

Ricardo is planning a new project which will involve him purchasing a new machine for £100,000. It will bring him the following net cash inflow. This means the amount of income less any costs each year.

Year 1: Net cash inflow £25,000 Year 2: Net cash inflow £30,000 Year 3: Net cash inflow £40,000 Year 4: Net cash inflow £20,000 Question: What is the payback period for this investment?

In other words, how long will it take Ricardo to get his money back?

We put all the information in a table first.

Note, that year 0 means today or the first day of

the investment, year 1 is the net cash flow for the first year, year 2 is the net cash flow for the second year, etc.

Year

Net cash flow £

0

(100,000)

1

25,000

2

30,000

3

40,000

4

20,000

Cumulative balance £

Now I can work out the balance at the end of each year.

Year 0, or the first day of the investment starts with the £100,000 investment, so this gives a cumulative balance or running total of minus £100,000.

Year 1 is at the end of the first year. I add this to the cumulative balance.

I have added the cumulative balance in the table right.

Net cash flow £

Cumulative balance £

0

(100,000)

(100,000)

1

25,000

(75,000)

2

30,000

(45,000)

3

40,000

(5,000)

4

20,000

15,000

You can see that after the four years, we have a positive number, making money on top of the initial investment.

To find the payback period in years and months, we are looking for the point at which the balance equals zero.

We have a payback period of three years and some months. Now we must work out exactly how many months into year four that the initial money is paid back.

Note: There are various ways of working this out so if you have your own method and it works, please use it. There are no wrong methods if they get to the correct answer.

At the end of year 3 we still had £5,000 to payback of the initial investment.

During year four we had a net cashflow of £20,000. That was for 12 months, so we need to work out how much net cashflow was received each month. (£20,000 / 12 months) = 1 month’s cashflow. £1,667 (rounded) = 1 month’s cashflow.

Now we can work out how many months of cashflow will take us to the point of zero, or the point at which the initial investment has been paid back.

Amount to clear / 1 month’s cashflow = months. £5,000 / £1,667 = 3 months.

Note: You always round up for the number of months as the payback would be at the end of the month.

Answer: Three years and three months If you like my style of teaching, you may like my workbooks. Payback periods and other longterm decision-making topics can be found in my Long-Term Decision-Making Workbook. See https://www.amazon.co.uk/dp/B08Z9W11W6 All my workbooks are available from Amazon in paperback and as e-Books at very reasonable prices. You can use this link to find them – https://www.teresaclarke.co.uk/books/ • Teresa Clarke FMAAT

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PQ Magazine October 2022

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The Institute of Certified Bookkeepers

Accountancy can be simple if you know the basics! PQ magazine has gathered together the top tutors in the world to help us help you.

Our Back to Basics video series will guide you through some of the fundamental topics of accountancy. Many of the videos even come with an accompanying article! The series includes: Jo Tuffill – Cost behaviour (newly uploaded)

Understanding a business’s cost structure is vital for its success. It is why cost behaviour is the first concept taught in management accounting. Her video runs for just seven-and-a half minutes and explains exactly what a cost is, looking at both variable and fixed costs. Jo has also written an accompanying feature (PQ magazine, April 2022). You can check out her video at: https://vimeo.com/680501310.

Tom Clendon – double entry bookkeeping

You should be able to master the rules of double entry bookkeeping in just eight-and-a half minutes. So do you know your credits and debits? You can find Tom’s feature explaining all on page 22 of PQ magazine, July 2020.

Check out the video at: https://vimeo. com/429252329.

Michele Baker – trial balance

In just six short minutes Michele Baker explains how to create the trial balance and why you are doing it. Michele will let you know whether a balance is a credit or debit, and help you get to grips with ‘DEAD CLIC’. She has had over 550 views already. Check out the video at: https://vimeo. com/500074449.

Sunil Bhandari – financial maths

This presentation is slanted to ACCA FM and AFM students sitting the CBE exams, but will be useful for any PQs wanting to understand financial maths that bit better. See pages 20-21 of PQ magazine, September 2020, for the accompanying article. Check out the video at: https:// vimeo.com/446780185.

Check out more great Back to Basic videos at www.pqmagazine. com. Either click on the video bar at the top of the home page or scroll down to the video section

PQ law

Separate legal personality Marina Matyukhina helps LW (ENG) and LW (GLO) ACCA students understand the meaning of separate legal personality and identify situations when this separation can be disregarded

T

oday saying ‘a company owns’ or ‘a company owes’ is commonplace and we understand that a company is a separate legal body that can have assets and liabilities.

However, only about 130 years ago the idea that a ‘mere fiction’ may own and owe something was seriously disputed. If today’s LLC owners travelled back in time to 1893, they could find themselves in the shoes of Mr Salomon.

Quite literally as he was a well-known London shoemaker struggling to prove in court that his bankrupt company’s debts were not his own.

For many years Mr Salomon had operated as a sole trader but then, following legal advice, he decided to take advantage of the newly available legal form and registered his business as a company. The move couldn’t be called entirely ‘treading a new path’. At that time, in July 1892, the Limited Liability Act 1855 had been in force for more than 37 years. However, there was no established common law practice of recognising a legal person’s assets and liabilities.

In 1893 a recession hit Mr Salomon’s business and Salomon & Co Ltd went into liquidation. The liquidator claimed that the company was merely a scheme to defraud the creditors and that it had a right of indemnity against Mr Salomon. The High Court and the Court of Appeal supported the liquidator’s stance.

However, Mr Salomon appealed to the House of Lords (nowadays the Supreme Court).

Unexpectedly, the Lords overturned the decision unanimously, pointing at its inner contradiction: a company could not be a ‘mere fiction’ (i.e., not exist) and simultaneously act as an agent of Mr Salomon. The boot was indeed on the other foot.

Lord Macnaghten also noted that the company creditors ‘had full notice that they were no longer dealing with an individual, and they had to be taken to have been cognisant of the memorandum and of the articles of association’.

In other words, the creditors were assumed to be able to assess their risks when dealing with a company.

This case is a landmark in UK company law.

Not only did it establish that a company was a legal personality separate from its owners, but also that it could enter into contracts, have assets and liabilities, and sue or be sued.

No body to be kicked, no soul to be damned?

This separation brings us back to the question fairly raised by the Lord High Chancellor of Great Britain, Edward Thurlow, a century before the Limited Liability Act was passed: what if a company is really defrauding the creditors? Who would be held accountable? Would it be possible to reach the people making decisions behind the corporate façade?

Today’s common law rules, combined with legislation, establish a number of cases when incorporation can be ignored and the creditors can hold the individuals behind the company to

32

account. The procedure is also known as ‘lifting the veil of incorporation’.

So, who are the actors behind the veil? The four most common answers are: members (owners or shareholders), directors, employees, or other companies. In this article, we will explore the first two.

Behind the veil: members First, when the company is created to evade existing legal obligations. As in Gilford Motor Co Ltd v Home 1933, where a former employee had a clause in his contract forbidding him to solicit company clients. However, he registered a company and tried to claim that it was his company attracting the clients, not himself personally.

Second, when it is in the public interest to reveal the nationality of the owners, for example, in times of war. In Daimler Co Ltd v Continental Tyre and Rubber Co (GB) Ltd 1917 a British company owned by the Germans was recognised as ‘capable of acquiring enemy character’ and therefore falling under the prohibitions of the Trading with the Enemy Act 1914.

Third, when the members are trying to avoid liabilities: whether to tax authorities as in Unit Construction Co Ltd v Bullock 1960 or to another person as in Jones v Lipman 1962.

Fourth, given a small ‘quasi-partnership’ of member/directors. E.g., Ebrahimi v Westbourne Galleries Ltd 1973, where two members acting together removed the third member from

directorship and membership against their will.

This was judged ‘inequitable’.

Behind the veil: directors Directors can be held personally liable for a company’s debts, and even criminally liable, in various circumstances.

First, when directors act with the intent to defraud. Also known as fraudulent trading, this is a criminal offence. The intent is often hard to prove, so similar rules apply to ‘wrongful trading’ when the directors knew that the company was insolvent but continued trading as usual.

Second, when a disqualified director took part in managing a company.

Third, if a public company started trading without obtaining a trading certificate, any loss incurred while trading without the certificate is also personal liability of the directors.

Fourth, directors abusing company names.

For example, if one year later after the DarkSide Ltd liquidation, its former director starts a new company named DarkSideRises Ltd, he or she is committing a criminal offence. The name likeness misleads the stakeholders into thinking that the business remained a going concern all this time.

The cases get even more curious when the actors behind the veil are also legal personalities.

These will follow in the next article.

• Marina Matyukhina, FCCA, LW tutor with FMELearnOnline. See next month’s PQ magazine for ‘Behind the Veil: Part II’ PQ Magazine October 2022

PQ acca exam feedback

ACCA SEPTEMBER SITTING How were the ACCA September exams? Here’s what sitters told us…

PM Have you ever seen a proforma in a 20-mark question in the PM exam? You have now!

One sitter said: “Very surprised not to see questions for ROI/RI, TPAR, learning rate, and maximin. Unfortunately, I did a lot of revision for these areas. Found the material price/usage variance questions overloaded with information and throwing curveballs, which caught me out.”

Remembering questions are different for sitters, economy, effectiveness and efficiency and optimal price came up for many in section C. Open Tuition instant poll: 2% ‘easy’, 54% ‘OK’, 32% ‘hard’ and 12% ‘disaster’.

TX The September sitting was deemed ‘OK’ and ‘wasn’t bad at all’.

Section A was seen as the hard bit, along with the capital allowance calculations in section C. Open Tuition instant poll: 6% ‘easy’, 54% ‘OK’, 30% ‘hard’ and 10% ‘disaster’.

FR Not much to write about this time around for FR it seems, just some time management problems.

“I spent too long on the first part of section C so just rushed a quick answer on the second part,” explained one sitter.

Among the questions in section C were ratio analysis and cash flows and consolidated P&L. For some, IFRS 15 and impairment were section B questions.

Open Tuition instant poll: 6% ‘easy’, 40% ‘OK’, 40% ‘hard’ and 14% ‘disaster’.

FM ‘A challenging test’, ‘a disaster’, ‘not ideal’, even ‘crazy’, according to some who sat FM this time around. Section A & B was called ‘brutal’. Many are preparing for a resit!

One student wondered: “Who on earth thinks up such mad convoluted questions, they start to make you question the very reason for your existence!”

“No NPV, no WAVC, no buy or lease… that was a hard exam,” explained another sitter.

Open Tuition instant poll: 3% ‘easy’, 36% ‘OK’, 44% ‘hard’ and 17% ‘disaster’.

AA Initial feedback is the OTQs were ‘tough’, but

overall the exam did not seem very difficult.

For many time management was an issue, and comments included “it all went so fast” and “all seems like such a blur”.

Among the questions were audit risk, engagement letter, ratios, substantive procedures, bank cash balances and payroll, and operating profits.

One sitter thought the audit risk question was ‘juicy’!

Open Tuition instant poll: 7% ‘easy’, 54% ‘OK’, 29% ‘hard’ and 10% ‘disaster’.

SBR No big complaints this time around about September’s SBR. As one PQ said: “I feel surprisingly calm about it.” They didn’t feel awful at all, but struggled with Q4! No-one seemed to like the FRS102 part of the paper though.

Why was there so much revenue and related content, asked one PQ. Another wasn’t sure why the examiner asked for goodwill twice!

Among the questions were investment in associate, revenue – license and service; and climate change affecting financial statements.

Top tutor Tom Clendon said SBR was a timepressured exam, and you can check out his full review at https://tinyurl.com/2b7kp5n6 Joint operations got tested and that is an article Clendon recently wrote for PQ magazine (see September issue https://tinyurl. com/5n8berkd Open Tuition instant poll: 7% ‘easy’, 50% ‘OK’, 31% ‘hard’ and 12% ‘disaster’.

SBL Those who got the Quality House case study didn’t like it! As one sitter said: “I hated it. I did not like the scenario, nor what they asked me to do other than the final question on the website, which I know I answered well.” Another sitter agreed: “Quality House was disappointing, no SAF which I was hoping for as it’s easy marks!”

Yet another explained: “I had the QH case study and didn’t have a clue what they were asking me to do!”

Other QH sitters felt it was all ‘too weird’ or they simply ran out of time.

The SBL took others by surprise as it seemed more about common sense than technical knowledge. One sitter said they even had 30 minutes to go back through their answers and didn’t find anything to change. They weren’t alone.

Open Tuition instant poll: 4% ‘easy’, 54% ‘OK’, 29.5% ‘hard’ and 12.5% ‘disaster’.

APM A tricky APM this time around for some, with one in seven sitters saying it was a disaster for them (see Open Tuition poll below).

However, one sitter said they weren’t expecting MIRR, but overall it seemed OK. Another felt the exam wasn’t bad, other than the VBM question: “I don’t know whether I have passed – my last exam so just want it out the way now!”

There was also a worry that one Q1 variant only totalled 40 marks, and it did not state what the 10 professional marks were being given for.

ONE WEBSITE TO RULE THEM ALL!

Check out the funky website Go to pqmagazine.com – where nothing is fake, and all the news is real!

34

PQ Magazine October 2022

PQ acca exam feedback PQ Students were after more guidance.

Open Tuition instant poll: 3% ‘easy’, 42% ‘OK’, 40% ‘hard’ and 15% ‘disaster’.

ATX “Well, that was awful,” said one ATX sitter – and the Open Tuition instant poll backs that up!

Another sitter said: “Hard exam. But optimistic, the corporation tax on the OS company really threw me off, as did the VAT on the capital scheme.”

In one paper students got rollover relief, some IHT and group tax, overseas aspects of capital gains tax and partnership profits. There was also VAT, interest on loans and share reliefs.

Open Tuition instant poll: 3% ‘easy’, 32% ‘OK’, 43% ‘hard’ and 22% ‘disaster’.

What came up in the ATX Top tutor Neil Da Costa writes…

The September 2022 ATX was both time pressured and technically packed. Many students also found that they needed to do lots of time-consuming computations, which caught them unawares. The general opinion was that it was a fair exam and lots of the topics we expected to come up did feature. As always, there were a lot of technical areas such as CGT groups, personal service companies and a UK-domiciled individual group aboard (temporary non-residents and the residency rules which is a regular feature in ATX).

With self-employment individuals, the dreaded

partnership opening year losses made an appearance as well as SBA/SDLT on buildings.

There was also the expected capital goods scheme and setting up a permanent establishment overseas (branch versus overseas subsidiary with double tax relief). One aspect that caught me by surprise was the reoccurrence of controlled foreign companies.

There was also the IHT and CGT implications of a gift into a trust and the availability of BPR and Gift Relief. In addition, you needed to do a death estate and deal with a deed of variation.

There were also easy ethics marks on a tax refund which was not expected. This emphasises the importance of wide syllabus coverage.

If you are planning on doing Taxation or Advanced Tax in December 2022 or March 2023, I recommend you purchase Tax Condensed or Advanced Tax Condensed, which will allow you to learn the technical rules. If you then practice the key questions I recommend, you too will be ready for anything the examiner throws at you.

These books will really make the difference.

You can purchase them using the links below: https://neildacosta.co.uk/ AFM The valuation question was seen as the toughest question on the AFM paper. It was all quiet apart from that!

Questions that came up were NPV with BSOP,

mergers and acquisitions, and multi-netting and treasury function theory.

Top tutor Sunil Bhandari believes the pass rate for September’s AFM will stay as they are, or they could go even higher! Bhandari has rated the exam an 8.5 out of 10. He didn’t think many students would be moaning after this sitting (and he is right), as they sat a ‘fair’ and ‘reasonable’ paper. “If you prepare well you are going to do well,” he stressed. Check out Sunil Bhandari’s great exam review on https://tinyurl. com/4ankz598 Open Tuition instant poll: 9% ‘easy’, 58% ‘OK’, 24% ‘hard’ and 9% ‘disaster’.

AAA As one PQ put it: “I thought it was quite predictable, but completely ran out of time!” So, a typical AAA exam, then.

They went on: “I wouldn't say it was easy, it’s quite a lot of exam technique and the syllabus has changed now so it is difficult to gauge how I have done as there are 20 professional marks.

I personally have found it harder than ATX, SBR and SBL.” Some also felt the going concern and forecast question was overloaded with data and numbers.

Another sitter said it was an odd exam: “Barley any information relating to what they were asking us to answer. I don’t have high hopes of a pass.”

Open Tuition instant poll: 3% ‘easy’, 44% ‘OK’, 37% ‘hard’ and 16% ‘disaster’.

Sorted, thanks to pqjobs.co.uk

PQ jobs pqjobs.co.uk PQ Magazine October 2022

35

PQ pensions relief

Pensions simplified!

In this month’s article in his ‘Keep It Simple’ series, Neil Da Costa tackles a topic that examiners always say students struggle with – pensions

H

MRC gives individuals tax relief to encourage them to make pension contributions.

Tapered Annual Allowance The annual allowance of £40,000 is reduced if threshold income is more than £200,000 and adjusted income exceeds £240,000.

Threshold income is net income less gross personal pension contributions.

Adjusted income is net income plus employee occupational contributions and any employer contributions.

The formula for reducing the AA is 50% (Adjusted Income – £240,000).

The annual allowance cannot be reduced to less than £4,000.

Occupational and personal pensions Occupational pensions are set up by the employer for the benefit of their employees. Employee contributions are made gross and are deducted on the employee payslip. The benefit for the employee is the costs of setting up the pension are borne by the employer. In addition, employer pension scheme contributions are a tax-free benefit.

Contributions to a personal pension scheme are paid net of basic rate income tax (20%). Tax relief at the higher and additional rate is given by extending the basic rate and higher rate bands by the gross pension contributions.

Simple example: Mabel Mabel is a higher rate taxpayer who earns £40,000 a year.

She contributes £4,000 into an occupational pension and another £4,000 into a personal pension she had set up previously.

Explain the tax implications for Mabel Solution to Mabel The occupational pension contributions of £4,000 are made gross and will be deducted from Mabel’s gross salary of £40,000. As a result, she will only pay income tax on £36,000 salary.

The £4,000 personal pension contributions are not deducted from Mabel’s income. Instead, the gross amount £4,000 x 100/80 = £5,000 is added to both Mabel’s basic rate band and higher rate band. As a result, an extra £5,000 of her income will be taxed at 20% instead of 40%.

Maximum pension contributions The maximum pension contributions an individual can make each year is computed based on the higher of £3,600 and 100% of net relevant earnings (employment income, selfemployed profits, and furnished holiday lettings).

This is restricted to an Annual 36

Simple example: Cara Cara has a salary of £230,300 and receives bank interest of £9,000.

She makes gross personal pension contributions of £20,000 and her employer also contributes £24,000 into her pension scheme.

What is Cara’s annual allowance for the current tax year?

Allowance of £40,000. The annual allowance applies to total pension inputs (both employee and employer contributions).

Simple example: Charles Charles has a self-employed profits of £35,000 and rental profits of £15,000.

Compute his maximum pension contributions and explain the implications if his actual gross pension contributions were £45,000.

Assume he is a higher rate taxpayer.

Solution to Charles The maximum pension contributions Charles can make is the higher of £3,600 and 100% of his net relevant earnings. We must ignore the rental profits as these are not earnings.

As a result, the maximum pension contributions permitted are £35,000 which is within the £40,000 annual allowance.

Charles has actually made pension contributions of £45,000 which results in a pension tax charge based on the excess pension contributions of £10,000.

Assuming Charles is a higher rate taxpayer, the pension tax charge will be £10,000 x 40% = £4,000 which will be added to his tax liability.

Unused Annual Allowance (AA) After utilising the current tax year AA of £40,000, it is possible to use up any unused AA of the three previous tax years on a FIFO basis.

An individual must be a member of a pension scheme in order to have an unused AA. Simple example: Oliver Oliver has earnings of £60,000 each year but has been contributing just £10,000 into his pension in the past. What is the maximum pension contributions Oliver can make in the current tax year without incurring a pension tax charge?

Solution to Oliver The annual allowance for the current tax year is £40,000.

In addition, Oliver is allowed to use up his unused relief of £30,000 per year for the three previous tax years on a FIFO basis. This will allow him to make additional pension contributions of £90,000.

The total pension contributions permitted for Oliver will therefore be £40,000 + £90,000 = £130,000.

Oliver will be entitled to claim an income tax refund for the 3 previous tax years.

Solution to Cara Step 1: Threshold Income Net income is employment income added to the bank interest (£230,300 + £9,000) = £239,300.

We then deduct Cara’s personal pension contributions £239,300 – £20,000 = £219,300. This figure is more than £200,000 so we now check the adjusted income.

Step 2: Adjusted Income Adjusted income is net income £239,300 plus employer pension contributions. £239,300 + £24,000 = £263,300. This figure is more than £240,000 so tapering will apply.

Step 3: Taper AA £40,000 – 50% (263,300 – £240,000) = £28,350.

This means that Cara’s AA for the current tax year is tapered down to £28,250.

You have now understood pensions and can easily earn marks on this popular exam topic.

• Neil Da Costa is a Senior Tax Lecturer with Kaplan in London.

He is the author of Advanced Tax Condensed and Tax Condensed, which summarise the entire syllabus using accelerated learning memory joggers PQ Magazine October 2022

PQ AAT Level 2 PQ

Supplier statements explained Karen Groves explains how to approach a typical AAT Level 2 question on checking a supplier’s statement of account for accuracy

D

uring your studies for AAT Level 2, you can be asked to check a supplier statement of account received to their payable’s ledger account for accuracy. This can sometimes cause some confusion as students do not know how to approach this task.

Why do we need to do this?

It is important to ensure there are no errors, and that we are only paying the correct amounts to suppliers. For example, if the supplier has duplicated an invoice in their system, we will end up overpaying, unless we check the statement of account received by the supplier.

We will now look at an example:

Example We have received the following statement from Tucker’s Pet Food Supplies, which now needs to be checked to the payable’s ledger account for accuracy, prior to making payment: STATEMENT OF ACCOUNT To: Lily’s Pet Centre Tucker’s Pet Food Supplies 5 Green Lane Birmingham B3 7AE Tel: 0121 200 3000

Payables Ledger Account Tucker’s Pet Food Supplies Details

Reference

Amount £

Details

Reference

Amount £

10.09.2022

CN 121

50.50

01.09.2022

2546

384.60

15.09.2022

Bank

314.87

04.09.2022

2551

344.52

15.09.2022

Discount

19.23

05.09.2022

2562

260.00

28.09.2022

2605

230.00

We will now work through step by step matching the items to check for accuracy: Invoice 2546 for £384.60 matches in both.

Invoice number 2551 is showing on the statement of account as £384.52, whereas in the payables ledger the amount is £344.52.

Invoice 2562 for £260.00 matches in both.

Credit Note CN 121 matches in both.

Payment for £314.87 matches in both.

Discount for £19.23 matches in both.

Invoice number 2605 is showing on the statement of account as £320.00, whereas in the payables ledger the amount is £230.00.

Date: 30.09.2022 DATE

TRANSACTION

DEBIT

01.09.2022 04.09.2022 05.09.2022 10.09.2022 13.09.2022 13.09.2022 28.09.2022

INVOICE 2546 INVOICE 2551 INVOICE 2562 CN 121 PAYMENT DISCOUNT INVOICE 2605

384.60 384.52 260.00

CREDIT

50.50 314.87 19.23 320.00

BALANCE 384.60 769.12 1,029.12 978.62 663.75 644.52 964.52

Our terms are 30 days net, however if payment is made within 14 days, a prompt payment discount of 5% can be taken.

PQ Magazine October 2022

What to do next?

The purchase invoice 2551 should be located to check if the amount should be £384.52 or £344.52.

The purchase invoice 2605 should also be located to check if the amount should be £320.00 or £230.00.

If the supplier’s statement of account is incorrect, then you will need to call them to politely explain the discrepancy and request they update their records.

If the error is in our payable’s ledger, then we need to update our records to ensure they are correct.

• Karen Groves is an AAT tutor and AAT Course Director at e-Careers 37

PQ careers

Quiet Quitting Brean Horne highlights some of the key points for those tempted by the notion of ‘Quiet Quitting’

W

ith almost seven million views on TikTok and counting, the ‘Quiet Quitting’ trend has taken social media by storm in recent months. Young employees, still dealing with the ongoing effects of the pandemic, are focusing on prioritising their work/life balance over impressing their employers.

Quiet Quitting doesn’t refer to an employee leaving a role, but rather quitting the idea of going above and beyond in a job, and rethinking the general approach to a career and the mentality that your life needs to revolve around work.

But is this new trend at risk of potentially putting workers’ employment, or even their financial and emotional wellbeing at risk in the current economy?

Here’s what you should take into account, as well as some behaviours to avoid: • Prepare for a reaction from managers and seniors: Any dramatic shifts in your ways of working is likely to attract attention from your manager. So be prepared to explain why your performance has changed, if those conversations arise.

Depending on your role, your manager may decide to re-evaluate your responsibilities.

Especially if you’re trying to achieve a more sustainable work, life balance.

• Quiet Quitting could lead to a lack of progression or pay rises: While the shift towards Quiet Quitting might make the most sense in terms of your own wellbeing and happiness, there are likely to be others within your workplace who see your decision to step back from certain duties as an opportunity to further their own careers.

Do not be surprised if some of your

colleagues see this as an opportunity to pick up duties that you decided to leave behind, and use that opportunity to get ahead when a new promotion is advertised, or when it’s time for a pay rise which you might not get.

• Consider if you want to continue in your role: Before committing to the notion of Quiet Quitting it’s important to really evaluate the reasons you’re doing so. Ask yourself if you’d be making the same changes in any other job role, or whether it might be down to the fact that you are simply no longer happy, motivated or fulfilled in your current role or organisation.

Do you feel undervalued by those in your organisation, do you feel underpaid for the job and tasks you are expected to deliver? Or, are you in fact feeling that you’ve outgrown your current role, and that any efforts to achieve your next progression steps are being ignored or taken for granted?

• Avoid confusing Quiet Quitting with laziness: As with any trend that gains momentum via social media platforms, there are many opinions online when it comes to what Quiet Quitting means. It’s therefore very important to be aware of the context ahead of potentially putting your job and financial security at risk, especially in the midst of a looming recession, rising inflation, and the cost of living crisis.

You will need to be sure of what exactly is expected of you within the role you are currently employed to do, and ensure that these are all being carried out. It’s also wise to consider if you are still in any probationary period, or if you’ve been employed by your current employer for less than two years, as this could make it much easier for a company to ‘let you go’ if the business has to restructure and streamline the number of employees.

• Don’t ignore the signs of burnout: Finally, and arguably most importantly, avoid using Quiet Quitting as a reason to ignore or mask signs of burnout.

It’s really important to get the help you need to resolve the root cause of burn out. While the concept of Quiet Quitting may offer some relief, it's unlikely to help you manage your wellbeing in the long term. So don't suffer in silence.

Seek advice from your GP or a registered mental health professional to help identify what may be causing your burn out. If work happens to be a factor it’s worth speaking to your line manager or HR representative to share your concerns and find the best next steps to help you find sustainable balance.

• Brean Horne is a personal finance expert at NerdWallet

Registered Tuition Provider

38

PQ Magazine October 2022

careers PQ

Dear Karen Ask PQ’s very own agony aunt Karen Young when you need advice from a real expert.

Email your dilemma to graham@pqmagazine.com, and he will pass on the best ones to Karen THE DILEMMA I have handed in my notice having got a new job. However, my company have made a counter offer – do you have any advice on how to handle this?

FTSE CEOs’ pay rockets The chief executives who run the UK’s FTSE 100 saw their pay rise by 39% to an average of £3.41m in 2021, according to stats put together by the High Pay Centre and TUC. Pay had been suppressed as many bosses took voluntary pay cuts as they put millions of their staff on furlough.

Researchers said that the jump from £2.46 million (2020) to £3.4 million means these CEOs now collect 109 times the pay of the average worker, up from 79 times in 2020. Bonuses for the 100 also jumped to £1.4 million, with nine out of 10 bosses receiving a bonus.

Pascal Soriot, of AstraZeneca, last year’s highest paid CEO, has been overtaken by Sebastien de Montessus of Endeavour (pictured), who earned £16.85 million. Soriot was paid £13.86 million in 2021.

The TUC and High Pay Centre have put together their ideas for reforming regulations, including:

• Companies should include a minimum of two elected workforce representatives on the remuneration committees that set pay.

• New requirements for companies to provide detailed disclosures of pay for top earners beyond the executives and the lowest paid in the company, to allow a better debate about pay inequality.

• Trades unions should be allowed into every workplace to help explain the benefits of union members and collective bargaining.

For more on this go to https://tinyurl.com/bdfbukzy

In brief

KAREN’S RESPONSE A counter offer can often make you feel confused and unsure if you are making the right decision about leaving your current job.

What’s most important is to consider the reasons why you initially looked for a new role. They must have been serious and genuine since you not only looked for a new job but applied, were interviewed, and accepted a position elsewhere.

It is flattering to receive a counter offer – however, most people who accept one end up leaving the company in a fairly short space of time. While every situation is unique, I would urge you to consider your original motivations for leaving and try to compare the two opportunities – taking aspects such as salary, benefits and perks out of the equation. For example, compare the opportunities you can expect, as well as progression and aspects such as the workplace and team.

If you were offered your counter offer on the spot, there’s no harm in asking for a couple of days to think about your decision. Once you are clear arrange a meeting or explain over email why you would like to decline or accept the offer.

• Karen Young is a director at Hays. She is passionate about helping people to find the right job, and companies to find the right person

PQ Magazine October 2022

Pap Firms struggling to make four-day week trial work Some of the companies involved in the biggest four-day working week pilot have said they are struggling to make it work, according to the Daily Telegraph.

Staff confusion and problems creating a practical rota system mean some involved in the experiment now believe it won’t survive the trial stage (it ends in December). Over 70 firms and 3,000 people have been taking part in the pilot since June.

doesn’t include Friday when attendance drops to 12%, according to international data.

The study looked at 80,000 employees from 13 countries and found two-thirds of desks were left unused on the average day. Even once-busy offices are still half empty, with many workers ignoring organisations that insist on three days a week in the office. The highest average office attendance was banking (47%); the lowest were tech and logistics (both 15%).

Pap Desks remain empty Workers are making into the office on average just 1.4 days a week. That generally

Pap Insolvencies on the rise Company insolvencies surged in July as soaring costs continued to batter firms across

England and Wales, official figures from the Insolvency Service show. Insolvencies hit 1,827 in July, 67% higher than the same month last year when firms were grappling with the fallout of the pandemic, and 7.5% higher than June 2022 figures. The jump in insolvencies was driven by an increase in creditors voluntary liquidations (CVLs) – a procedure used for companies with no ongoing business to dispose of remaining assets, distribute available funds to creditors and dispose of the corporate entity. Figures revealed there were 1,609 CVLs in July 2022, up 60% on July 2021 and an 11% rise on June’s figures.

The PQ Book Club: books you should read Crazy Busy: keeping sane in a stressful world by Thijs Launspach (Capstone, £12.99) While your body and mind are quite able to process normal day-to-day stress, prolonged stress can result in your suffering a burnout.

However, even if you never reach the burnout stage, an excess of stress can very quickly diminish your quality of life. This ‘everyday’ kind of stress can cause you to enjoy life less and pay too little attention to others.

Do you feel like a slave to the machine, asks Launspach. He wonders if you feel as if you are always playing catch-up and are never on time with your work, a

bit like the White Rabbit in Alice in Wonderland, who is always ‘too late’.

Well, Launspach has a plan for beating stress, but he admits it will require a bit more than engaging in a few wellness sessions, drinking cups of chamomile tea and taking out a subscription to Happiful Magazine. If you want a more peaceful life you might need to rethink the way you live and work entirely!

All the advice and help leads towards his ‘2030 Burnout-free’ manifesto. This part of his book says it should not be just about helping yourself, but also encourages you to act when you are worried about someone else.

I loved the ‘dos and ‘don’ts’ here.

For example, one ‘don’t’ is giving the impression that you know everything. You also need to avoid giving unsolicited advice, as it often leads to resistance.

Our author ends the book with a list on the ‘dark arts of stress relief’, such as ‘stress is unavoidable but being busy is a choice’, and ‘missing out is unavoidable but it is not something we need to be afraid of.’ True, that.

PQ rating: 4/5 Anyone who is crazy busy must buy this book!

39

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

Celebrity accountants When it comes to celebrities, we only ever associate them with the roles they are famous for. Musicians have always been performing and actors have always been portraying characters on the big screen. However, experts at subscription-based learning platform StaySharp have compiled a list of the notable stars that started out their careers in the accountancy sectors before rising to fame elsewhere. Here’s just three: Mick Jagger: Sir Michael Philip Jagger, better known as the iconic Mick Jagger, is an English singer, songwriter, actor and film producer. Jagger has achieved international fame as the lead vocalist founding member of the Rolling Stones. However, before he became a legendary frontman Jagger studied Accounting and Finance at the London School of Economics on a scholarship – for one year anyway!

Janet Jackson: The famous Jackson sister, Janet Jackson is an American singer, songwriter, actress and dancer. But before joining the family business in the music industry, Jackson studied accountancy. Many hit records and five Grammys later, the singer still states that if she wasn’t singing, she’d probably most likely be an accountant.

Ray Romano: Raymond Albert Romano is an American stand-up comedian, actor and screenwriter. Despite being best known for his role as Ray Barone on the CBS sitcom Everybody Loves Raymond and as the voice of the loveable mammoth Manny in the Ice Age film series, he originally studied to be an accountant.

A wine called Debit Top tutor Gareth John says he loves two things in life above everything else – double entry bookkeeping and wine. Now, I am sure his wife and wonderful children might have something to say about that, but let’s stay with him! So, how on earth did he manage to get to nearly 50 years of age before discovering there is an indigenous Croatian grape called Debit? He just needs to find Credit now and he believes his life will be complete! Andrea MacFarland suggested he buy a vineyard and start making Credit wine…

’ WEV E

Time to dress up The John Lewis annual ‘How We Shop, Live and Look’ report has revealed velour track suits, jigsaw puzzles and wall-mounted desks are no longer top of UK shoppers’ lists, as many appear to have moved on from the lockdown lifestyle. Sales of lounge wear and those velour tracksuits fell 50% yearon-year, and wall-mounted desks have been removed from sale all-together!

And while sales of soup makers fell by 12%, travel mug sales shot up by 65%. Ironing boards are also back in vogue, with sales jumping 19%.

Sales of suits has risen by 60% and women’s blazers by 75%. The need to be somewhere on time also meant Casio watch sales are up 81%.

You can’t say that…

A female finance director has won her discrimination claim against her younger boss, who told her to “calm down, don’t let the hormones get out of control”. At the time, 55-year-old Louise McCabe was the FD at a start-up IT business run by 29-year-old Jack Williams. The employment tribunal judge Jillian Brown said Williams regarded McCabe as a “menopausal woman”, and felt older people didn’t understand IT businesses.

McCabe told the tribunal that she was even called by a recruitment consultant who told her they had been asked to find a younger team member for the finance department, who would more in tune with the business.

Beach hut sale halted The UK government has stopped Bournemouth, Christchurch and Poole Council from selling its beach huts to fund its transformation programme. The council was planning to sell the huts, worth £50 million, to a subsidiary company.

Former levelling-up secretary Greg Clark warned the authority not to use regulatory loopholes to plug financial holes. Clark said: “It is not right that some councils have attempted to abuse a loophole to do dodgy deals which only benefit the bottom lines of consultancies and accounting firms.”

GOT THE L OT

Not a life coach This is James Smith’s follow-up to his international bestseller ‘Not A Diet Book’. In this book, ‘Not a Life Coach’, Smith is back challenging everything you thought you knew about the path to fulfilment and happiness.

With hard-hitting home truths and a helping of tough love, he will inspire you to reset your outlook and unlock your potential.

To be in with a chance of being sent one of our three copies simply email us at giveaways@pqmagazine.com with your name and address and we will put you in the hat for a chance to win this prize. Head up your email ‘Not a life Coach’.

Your book of sudoku & variants We have three copies of ‘The iBook of Sudoku & Variants’ to give away this month. Featuring brand new content, this collection of 200 sudoku puzzles features a fantastic range, picked by the ipuzzle page compilers. And don’t worry, the solutions are all in the back of this great book.

To win one a copy just send your email headed ‘Book of Sudoku’ to giveaways@pqmagazine.com, along with your name and address.

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 21 October 2022. The main draw will take place on Monday 24 October 2022.

TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM 40

PQ Magazine October 2022