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PQ magazine September 2018 /

SO WHERE DO YOU DO IT? Revise, that is. We’ve got loads of tips and exam advice for the September ACCA exams INSIDE

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News 06ACCA results Email error leads to early release of results 08CIPFA results Institute unveils ‘steady’ set of exam results 10CIMA results What was good, bad and ugly in the recent diet 12AAT plea Scrap Apprenticeship Levy, says association’s CEO Features, etc 04Mind your Ps&Qs I’m looking forward to being a superhero; we need to be serious about mental health; and turn those phones off! 13ACCA leadership module Why the association is putting its focus on leadership skills

14FRC news Financial Reporting Council unveils 2018 code

15Exam Agony Aunt Tackling

the ACCA’s problematic Financial Management paper

16ACCA exam tips What our

24Top college We visited All

Inclusive Training in Croydon for a special awards ceremony 26CIMA focus If you take the exams at your own pace the ride is so much more enjoyable 28Careers survey How to attract the top part qualifieds 29Careers Life at PwC; the best of social media; and our Book Club review 30Fun stuff – and our giveaways The columnists Robert Bruce Why state-run audits are not the answer 6 Prem Sikka New FRC code will not improve corporate governance 8 Zoe Robinson Lessons to be learned from the World Cup 10 Subscribe to PQ magazine It’s FREE – go to page 27 or see

experts predict will be examined in the September papers 18Syllabus updates Exams for accountants are changing, so you need to keep up-to-date

20CIPFA annual conference

We report on the highlights from the recent Bournemouth event

22ICAEW spotlight Cracking the case; and the CFAB explained

24Local government How

finance professionals are making a difference in this tough sector

Dark side of accountancy

September 2018

ABC July 2016 – June 2017


Publisher’s statement: We send a digital issue of the magazine to an additional 7,398 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)

PQ magazine is again joining forces with London South Bank University to put on a one-day conference this autumn, and this time we plan to explore the ‘Dark Side of Accountancy’! We had great fun recently dressing up a top LSBU tutor in our Darth Vader mask (see page 28) and yes, there will be a lot of ‘Strike Back’ and ‘Phantom Menace’ in future promotional copy, although I don’t know how I will get death star into anything! Star Wars apart, this year’s conference will focus on corporate social responsibility and ethics. There will also be a careers stream, and we have invited some top employers to come along too to talk to you. To secure your FREE place simply log onto and drill down to ‘28 November’. Out and about PQ magazine was also out and about (as always) this month. We spent two days in glorious Bournemouth at the CIPFA conference (not on the beach, promise). You can read all about the student conference on pages 20 and 21. The highlight for me was the session on how to have a long-term career in the public services. The three CIPFA members on show were incredibly honest and open about the challenges they had faced down. It would seem resilience is going to be key to any future success here. There was also a trip to West Croydon and a ride on a tram to the All Inclusive AAT awards night (see page 24). They were recently unveiled as the winner of the 2018 ‘Training Provider of the Year – small’ at the AAT awards. It was great to hook up again with AAT President Nicky Fisher, and thanks to hosts Julie Agbowu and Shameika Byfield. All Inclusive have always punched above their weight and are a college that really cares. Julie, always the saleswomen, also wanted me to mention that they will be starting to offer ACCA from September! Graham Hambly, PQ magazine editor (

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PQ have your say

email Don’t blame us!

AI superpowers! I love the idea put forward by Dr Noel Tagoe (PQ magazine, August, page 21) that AI gives humans ‘superpowers’. Everyone I know seems to adhere to the ‘end-of-the-world’ scenario with AI and robots taking over the planet. But I, like Dr Tagoe, believe that machines will take away the boring bits of accounting, leaving us, as he says, to “lead, empathise, create and judge”. It’s good to see CIMA finally leading the agenda in your latest issue. Our chief executive Andrew Harding is also right when he says

we have to become ‘storytellers’. Understanding the numbers is only the first step in adding value to any business. Now let’s see if that all comes together in the new CIMA syllabus! It has gone a bit

quiet on that front. I remember PQ magazine promising to keep us informed. Come on PQ, you have a reputation to live up to… Name and address supplied The editor says: Our Being Global conference with LSBF really did break new ground and you are right it is good to see CIMA adding to the debate. I will try to track Dr Tagoe down and find out when the new syllabus will be unveiled. It will be interesting to see if CIMA tackles intangible assets, digital costing, and business models head on. We know these are the things that are taxing Tagoe's mind at the moment.

I have to disagree with your letter writer Garnett Brown, who seems to be saying that a lack of integrity in the accounting profession is down to us accountancy graduates (PQ, August 2018). Seems a bit unfair! Integrity is a complex issue and there are indeed the ‘blurred lines’ that the letter writer alludes too. But this has always been the case, and it seems the accountancy bodies and the wider profession are taking the issue more seriously than they have in the past, with all the focus on ethics and the value of behaving ethically. Name and address supplied

Our star letter writer wins a fantastic PQ mug! A waste of money I sometimes wonder what the Big 4 firms are going to waste their money and resources on next. According to PQ, ‘a PwC study says homelessness could be wiped out within 10 years’ (PQ magazine, August 2018). Apparently, all that’s needed is 100,500 homes to be built each year. Genius! My 10year-old son could have come up with that. Eradicating world hunger? Simple – grow enough food to feed everyone! I’m really not sure how this type of research helps anyone. After all, who’s listening anyway? Certainly not the people who could try to do something about the problems we all face. Phil Starkey, by email

I need

Phone trouble I was interested to read your letter from a trainee accountant who switches their work mobile off as soon as they leave the office (PQ, August 2018). More power to them! Then in the same issue you had a story about the dangers of constantly checking your phone, especially at night. It’s about time this issue was taken more seriously. Employers especially must understand that having their staff ‘always on’ is counterproductive. After all, a happy worker is a good worker!

Mental health help While it was saddening to read your article ‘More support needed around mental health’ (PQ, August 2018), it is a positive thing that this issue is getting more attention across the media and from government. It’s a great pity, though, that accountancy firms are not doing more to help the staff. Some of the figures from this survey are particularly shocking: that over half of accountants have considered

Memory failure resigning from a job because of the lack of support; and that 92% confessed that they would be too embarrassed to disclose information about the state of their mental health to their employer. I’m sure this state of affairs is the same right across the professions,

but isn’t it time the accountancy bodies put pressure on the big employers to take this issue more seriously? Perhaps some CPD could focus on mental health, and spotting the signs, etc. Name and address supplied

I was going to enter your giveaway for the book ‘The Memory Booster Workbook’ but completely forgot. I hope you’ll be giving away copies in future issues of PQ. Sam, by email The editor says: Watch this space Sam. I’m sure we’ll be giving away similar titles in the coming months.

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

Published by PQ Publishing © PQ Publishing 2018

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PQ news

ROBERT BRUCE State-run audits are not the answer The old adage of ‘be careful of what you wish for’ has never been truer than in the current clamour for reform of the world of corporate governance, and audit in particular. You can see why the clamour has grown. The world, after years of indifference, has suddenly taken an interest in audit. The financial press starts to fill up with stories that suggest that reputational damage may destroy one of the Big 4 audit firms. It hasn’t been like this since Enron, when the US Department of Justice effectively put ‘Big Five’ firm Arthur Andersen out of business. Later the Department reversed its decision, but it didn’t matter by then. Andersen was gone. The reform measure that is gaining traction is around the audit of the big banks. Surely if the banks are too big to fail then someone other than the independent audit firms should be auditing them. Surely such large and important institutions should be audited by the state? I am not sure that state auditors under the control of, at the very least influence of, our politicians is the answer. But I can see how we got here. It reminds me of interviews I once did with the state auditors in what used to be the USSR. In the depths of the Russian bureaucracy, after decades of being under the thumb of politicians and the state, they were smiling at the prospect of that deadening grip being loosened. That told you all you needed to know about whether state control of audit had been a force for good, or not. Robert Bruce is an award-winning writer on accountancy for The Times

Whoops, it’s happened again! Some ACCA June sitters appear to have been able to access their exam results before the official Monday 16 July release date. PQ magazine has been told that all candidates had to do was go to a previous results email and click on the ‘view to browser’ on the top right of the email. This then allowed students to view their June exam results. That meant by noon on Sunday some students could relax, way ahead of the official release time. This is not the first time that ACCA systems have allowed students to have a peek at their

results ahead of time, and PQ has asked for an official comment. ACCA confirmed: “A very small number of students did make us aware that they could view their results on the morning of Sunday Double winner: Sophie Medwell picked up her Arthur Collins Memorial Medal and Eric Gilliland Memorial prize at the recent CIPFA prize winners’ ceremony. Sophie studied CIPFA as part of her training contract in the Grant Thorton audit team. Throughout her studies Sophie has been an active member of the CIPFA Student Network and took over as CSN President this summer. See page 20 for more.

15 July, and on investigation, it became apparent that the results emails sent to students in April for the March 2018 exam results could be used to view June 2018 exam results ahead of their publication date of midnight on 15 July.” It went on to say: “This was a very isolated occurrence, which was quickly addressed with access once again restricted.” And if you were quick you would also have been able to see the P4 June exam in full, too. However, it wasn’t up for long, just a few days, according to a tutor we spoke to. • Check our exam tips on page 16.

All hail CIMA superheroes

Over a third (38.5%) of accounting graduates admit that they have regrets about their degree choice. New research from CV-Library also found that more than half (53.8%) of accounting graduates’ current job isn’t even related to their chosen subject matter. The findings show that 95.2% of accounting graduates think that experience is more important than a degree for landing a job. Accounting professionals then listed the reasons why they believe

experience is more valuable: • 55% said it gives you experience in a professional workplace. • 17.5% believe it can equip you with useful skills. • Others said it could make up for your lack of qualifications (15%), and help you to stand out from the competition (12.5%). That said, the study also asked accounting professionals who didn’t go to university if they would consider studying a degree – and 44.8% said they would.

Some new superheroes are in town! A group of CIMA members have formed the ‘Guardians of Management Accounting’ over their concern about the current status and direction of the institute. The group are trying to engage students and members on social media over the rise of the CGMA designation, which they claim has created a ‘competitive disadvantage’ as it is not an IFAC-validated or backed by Royal Charter. The big question they are asking is, after six years of marketing spend, what CGMA has achieved in CIMA’s two primary markets – Ireland and the UK. Employers are still asking for F/ACMA and CIMA-qualified members, and the ‘guardians’ are claiming that the CGMA designation has been rejected by the employment market. Anyone interested in knowing more or wants to add to the debate should contact the group by email:

Heatwave exam warning Heatwaves are bad news for your brain and for all those sitting exams. Studies suggest that while the sun coming out to play can make you happier it also makes you more stupid! Researchers have found that during hot spells candidates perform significantly less well in cognitive tests. In sharp contrast, those who study in airconditioned environments can hold together their mental abilities until the heat subsides. This backs up a study that found for every half-

degree rise in temperature there is a 1% fall in learning.

Alexa and customers cannot renew their tax credits this way (yet).

Alexa to the rescue HMRC has developed a customer-focused service via Amazon Alexa. Specifically for those seeking help with their tax credit renewals, customers with Alexa-enabled devices were able to ask Alexa to ‘open HMRC’ and for help and information with a change of circumstances, payment information or a renewal. No personal information is stored on

New education chief named CIPFA has unveiled its new education director. Lindie Engelbrecht will take over the role this month from stand-in Robert Jelly. Engelbrecht has worked for the past two years as the executive director of Members and Global Alliances for the South African Institute of Chartered Accountants, and was an executive director at South Africa’s Institute of Directors.

Got the wrong degree?

In brief Satisfaction guaranteed ACCA has revealed that it has achieved its highest level of member and student satisfaction in a year of ground-breaking change. It annual survey found 80.7% of PQs and members are either ‘satisfied’ or ‘very satisfied’ with their professional body. CEO Helen Brand promised to keep up the momentum by engaging with the ACCA’s global network, analysing trends that will shape the future, and help create the accountancy profession the world needs. 6

PQ Magazine September 2018

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PQ news

PREM SIKKA FRC Code will not improve corporate governance The UK’s answer to recent corporate scandals is a revised voluntary code of corporate governance from the FRC. It posits the usual shareholder-centric model of corporate governance, even though shareholders have a short-term interest in companies. All the banks bailed out during the 2007-08 crash had non-executive directors, often friends of executive directors. None blew the whistle on fiddles or reckless risk-taking. Yet the FRC promotes nonexecs as the vehicle for checking corporate excesses. In everyday life, we all face laws based on the principle of ‘comply or else’. However, corporate elites think that it is their birthright to have toothless regulatory arrangements. The code continues to be based on ‘comply or explain’ basis. The code has no statutory basis and can’t be enforced by courts. Indeed, the whole thrust of the code has been to prevent the development of necessary laws to shackle executive excesses. The FRC code does not ask firms to pay decent wages or abandon tax avoidance. It does not do anything for workplace democracy. The code recommends that companies nominate an executive or a non-executive director to engage with the workforce and report to the board of directors. This is sham democracy, especially as workers sit on the boards in many European countries. The FRC code is unlikely to secure any significant improvement in corporate governance. We need a statutory framework for tackling corporate abuses. Prem Sikka is Emer itus Professor of Accounting at the University of Essex

Anyone for an audit career? The auditing sector (in Holland) could lose over half of its trainees within two years, according to a new study from Nyenrode Business Universiteit. Auditing firms’ focus on maximising profits puts high levels of pressure on overstretched trainees, compromising the quality of audit work. And instead of introducing superficial fixes like health-themed weeks and sports facilities, the

firms need to tackle the heavy workloads, high pressure and lack of professional development. If the firms don’t take these issues seriously then PQs will leave the profession in droves, says the study. Assistant professor Marlies de Vries (pictured) said: “During the busy season young professionals spend an average of 60 hours a week working and studying. This is because of capacity shortage, unrealistic schedules and high client

CIPFA’s June results are now out, and it looks like the previous problems with the PSFR and CFR papers can finally be forgotten. In June 2017, the Public Services Financial Reporting pass rate slumped to just 40.5%. CIPFA poured resources into helping students and this June the pass rate held steady on 64%. The Company Financial Reporting pass rate saw a big jump – to 59.2%. Although this doesn’t match the 82.3% success rate in June 2017, it is much more in line with previous pass rates. It does, however, have the dubious honour of being the paper with the lowest June pass rate, by some distance. June saw big rises too in the Audit & Assurance and Financial Management papers’ pass rates.

CIPFA results ‘steady’ CIPFA JUNE 2017 RESULTS Professional Certificate Financial Accounting Management Accounting Company Financial Reporting Audit & Assurance Professional Diploma Public Service Financial Reporting Taxation Corporate Governance & Law Business & Change Management Strategic & Policy Development Financial Management Strategic Strategic Public Finance Strategic Case Study

Sign of the times What do you do when you have applied for over 100 jobs and not received even one nice rejection letter? Well, aspiring accountant Kamran Hussain decided it was time to hit the road, or more literally to hit the capital’s railway stations. Armed with 30 CVs and a sign pleading for an entry-level job, the Walthamstow-based graduate stood outside Liverpool Street and Cannon Street stations.

In it together The UK’s Big 4 have reportedly given themselves a September deadline to come up with proposals to shake up the audit market and the stranglehold the firms have on the FTSE 350. It is hoped this unprecedented move will prevent the Competition and Markets Authority (CMA) from launching a full-scale investigation into the accountancy profession. The worst-case scenario is the breaking up of the largest firms. The CMA board recently appointed its first-ever audit project director, Will Hayeter. KPMG’s disability targets UK boards are being urged to assign directors 8

For the second sitting in a row the Corporate Governance and Law

with specific responsibility for disability issues, after research by KPMG found almost 60% of businesses do not have a named disability champion at board or senior management level. As well as calling for more board-level disability champions, the review recommends that boards table disability as a formal agenda item at least once a year. They are also being encouraged to sign up to the Government’s Disability Confident scheme. Swings and roundabouts AI will create as many jobs as it displaces by boosting economic growth, says a new PwC report. Although the overall effect on UK jobs is estimated to be broadly neutral there will be winners and losers by industry sector. Health,

expectations. Auditing organisations also reward young professionals who embrace heavy workloads, which has caused this to become part of the culture as well.” She claimed that work pressure has been a neglected topic in the industry, with lip service being paid to tackling the issues that PQs are facing. De Vries told PQ magazine that given the international structure of Dutch firms she wouldn’t be surprised if a UK study didn’t mirror her findings.

paper had the highest pass rate with 91.6% of candidates passing.

Jun 18

Dec 17

Jun 17

63.6% 89.2% 59.2% 76.3%

64.3% 89.2% 46.4% 65.2%

69.0%% 86.7% 82.3% 94.3%

64.0% 77.1% 91.6% 78.5% 75.3% 73.0%

64.8% 85.4% 92.3% 83.8% 85.7% 60%

40.5% 88.6% 89.5% 88.6% 81.3% 65.9%

72.4% 78.6%

72.4% 82.2%

69.2% 79.4%

The following day the job offers started rolling in and he now works as a ‘transaction executive’! Hussain admits that he only achieved low grades in his Kent University accounting and finance degree, and this meant he always went to the bottom of the application file. So it was time to think out of the box – and it seems to have worked! professional, scientific and technical services and education will all see the largest net increase in jobs in the long run. Transport, manufacturing and public administration will see the biggest contraction in jobs. Deloitte partner quits Deloitte has been ranked fifth (out of 50) in the UK’s second-ever Social Mobility Employer Index. The Big 4 firm has been praised for its use of an algorithm to flag candidates from a low socio-economic background who are ‘outperforming the norm’ for their school or college. During the 2016-17 recruitment season Deloitte UK hired 111 students who would not have passed the initial screening had this initiative not been implemented. PQ Magazine September 2018






Find out more at

PQ news

ZOE ROBINSON Lessons from the World Cup

Well, it’s all over for another four years, and unlike the famous Gary Lineker quote, in the end Germany didn’t win. And although England didn’t win either, the team under Gareth Southgate’s leadership returned as heroes. But how much of that success was the result of talented players and clever tactics? Or could some of it be attributed to the newly appointed Head of People and Team Development, Dr Pippa Grange. Grange studied psychology at Loughborough University but it was her work with Australia’s swimming team and the Australian Football League that eventually led to her new role with England. She has been tasked with building the psychological resistances of the players, helping them to cope with stress and the fear of failure. But wouldn’t we all benefit from a bit of psychology in these areas, especially when taking exams? Here are a few tips: • Don’t fear failure – it’s important to learn from failures, reassess, rethink, move forward, sometimes in a different direction and keep those dreams and goals alive. • Simply thinking positive isn’t enough – visualise and work towards what is in your control, for example hard work and practising penalties. • Reframe your emotions – Dele Alli told reporters he was “excited, not nervous” about upcoming matches. With all that on our side, perhaps the result will be different in 2022. Zoe Robinson is Learning and Programmes Director at Kaplan Financial

Here come the CIMA results PQ magazine

CIMA OT PASS RATES – 1/417 - 31/3/18 First time Total Overall E1 79% 78% 87% P1 51% 49% 69% F1 74% 71% 84% E2 88% 86% 95% P2 59% 53% 79% F2 57% 52% 79% E3 75% 67% 81% P3 59% 54% 79% F3 59% 55% 81%

EXCLUSIVE The latest exam results recently handed over to PQ magazine at CIMA HQ show that the first-time pass rate for P1 OTs hovers around the 50% mark – in fact, it has now reached 51%! This means P1 stands on its own as the toughest CIMA OT paper, by some distance. That said, PQ was reminded that this paper has come a long way – it used to have low-40s pass rates. There has also been a wobble in one of the case study pass rates.

The operational rates dropped in May to just 43%. AICPA-CIMA’s exam chief, Steve Flatman, said his team did the ‘normal checks’ after they saw these results. They discovered the pass rates for firsttime sitters was consistent CIMA CASE STUDY MAY 2018 EXAM PASS RATES with previous sittings. May 18 Feb 18 Nov 17 Aug 17 However, those re-taking Operational 43% 51% 49% 53% the exam didn’t perform Management 72% 74% 56% 68% so well this time around. Strategic 67% 63% 66% 62% Flatman explained that

Just over 67% of ICAEW students who sat one professional level paper in June passed that paper, according to the latest results. That means more than 750 PQs are now having a pretty bad summer and thinking of resits! The pass rate for candidates sitting two papers and passing both was much higher in June, with just over 75% passing them both. Looking at individual papers, the

cohorts do vary, but he was expecting the pass rate to bounce back for August. When PQ magazine pointed to the 47% pass rate for the operational case study in May 2017 Flatman promised there was nothing particularly special about the spring test. Meanwhile, both the management and strategic pass rates look very good.

Two is better than one Business Strategy and Technology paper saw the highest pass rate at 91.2%. This was closely followed by Tax Compliance at 83.9%, and Audit & Assurance with a 83.8% pass rate. Although just 52 students sat the Business Planning: Insurance paper it has the dubious honour of

The seven-year hitch

Women in accountancy and finance take seven more years than their male counterparts to reach executive level as they battle with a ‘two-tournament gender system’ throughout their careers New research from ACCA compares the career trajectories of men and women in the industry and it doesn’t make pretty reading.

The study found that while the careers of both sexes initially progress at near-parallel speed, the careers of women decelerated in middle management. The prime reasons cited are limited peer sponsorship and a lack of highprofile projects and opportunities. It is this stage of their career that women then take an average of

BPP launches masters degree BPP University is launching an MSc Accounting and Finance aimed at combatting the impending digital skills gap in the sector. Post grads on the MSc will study three new modules designed to boost employability: Digital leadership, principles of data science and a business project, developed in collaboration with leading employers. The course will also

include ACCA strategic level papers in response to employer needs. For more information check out

having the lowest pass rate this time around, at 71.2%. Some 5,779 students sat the June session with 10,375 papers attempted. That’s 1.8 paper per part qualified accountant. • See the ICAEW pass rates paperby-paper on the PQ website – and we’ve also tweeted out the results. seven years’ longer to progress up to the next tier – the executive level. ACCA’s Maggie McGhee said: “This research takes a closer look at the ‘confidence myth’, whereby the hindered progression of female employees is attributed to a lack of confidence or appetite to ‘lean in’, which then rationalises or hides the inequalities or unfair dynamics in the workplace which are actually at fault.”

In brief CIMA Connect down CIMA has been working hard to ensure no student lost out because of the on-going problems with CIMA Connect. The exam team ensured all the normal resources were available to PQs via the CIMAglobal site. A spokesman said CIMA emailed all students and used social media to reach out to all concerned. They admitted it wasn’t a great situation, but said it would only put the site back up when they were comfortable it was working properly. 10

CIMA case study winners Last month HTFT gave five lucky readers the chance to win a CIMA MCS exam kit for the August ‘Montel’ sitting, and here are the winners in no particular order: Claire Wiseman, Caili Harris, Julie Pannell, Khurram Khan and

Loukman High. We have more great giveaways on page 30. Five more years Kaplan Publishing is to remain CIMA’s official publisher for another five years, following the renewal of the contract. Although the deal still focuses on the printed material the two also jointly own It also means all the Kaplan material is checked by the CIMA faculty, which ensures the material is ‘spot on’ when it comes to the exams. PQ Magazine September 2018

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PQ news Mark Farrar

‘Apprentice fees should be scrapped’ Given the current weakness in the number of new apprenticeship starts, and with Brexit now firmly on the horizon, AAT CEO Mark Farrar says the time is right to scrap the 10% apprenticeship charge for SMEs. Since the apprenticeship levy was brought in starts have “fallen off the cliff”, says Farrar. There were just 23,900 starts in March 2018, for example, which was half that in March 2017. He felt that SMEs (and there are 5.7 million of them) are vital in helping the government reach its target of three million apprenticeship starts in 2020.

ACCA pass rates: what happened? The June pass rates arrived safe and sound mostly (see page 6) on 16 July and as suspected the F5 pass rate has dipped again – to 38% this time around. The F8 pass rate also remains stubbornly low at 40%, although it is up on the March rates (39%). Good news, however, can be found in the ‘P’ paper pass rates. The optional pass rates in particular make for much better reading this time around. Nearly two-thirds of students told the instant poll on

ACCA June 2018 pass rates: F1 83%; F2 67%; F3 71%; F4 80%; F5 38%; F6 50%; F7 50%; F8 40%; F9 48%; P1 54%; P2 50%; P3 52%; P4 40%; P5 35%; P6 40%; P7 34% Open Tuition that P6 was a ‘disaster’ or ‘very hard’. However, the pass rate jumped 3% (on March) to 40% at the summer sitting. The P5 pass rate also hit new heights of 35%. Well, it’s much

Qualification is still key Just 6% of CFOs believe that industry experience is more important than qualifications when recruiting finance professionals, according to research from Robert Walters, Totaljobs and Jobsite. Professionals are widely in agreement, with just 11% of accountants believing that industry experience will be the key factor in developing their career. The research also revealed distinctions in how much value employers place on various qualifications. ACA/ICAS was considered valuable by the largest number of employers (53%), closely followed by ACCA (50%), with CIMA at 41%. By contrast, the researchers claimed that just 12% felt that AAT qualifications were valuable, with professionals in agreement. Robert Walters’ Habiba Khatoon said: “For finance professionals formal professional qualifications have a huge impact on their ability to progress within their career and which roles are available to them.”

better than 29%! And even the P7 pass rate was up, rising to 34%. The pass rates in P1, P2 and P3 also looked good. ACCA’s Alan Hatfield said: “It is great to see pass rates maintained or improved in this last session of our existing Essentials exams (P1-P3).” In all, some 132,098 students sat 174,827 exams in June. That’s equal to 1.3 papers per PQ. Just over 5,000 students completed their final exams to become ACCA affiliates.

AATs need payroll qualification now The AAT needs to act now over the lack of payroll in its qualification portfolio, says a leading tutor. She told PQ that many AATs who work for small firms will be expected to help with payroll: “Not having any practical knowledge of payroll and pensions is becoming a problem for many trainee AATs.” And she said her pleas to AAT on more than one occasion seem to have “fallen on deaf ears”.

A leading qualification for a changing world The role of the professional accountant is becoming more important than ever. That’s why we’re evolving the ACCA Qualification to keep it current and maximise your employability to give you the professional edge in a changing world. Key changes include:

Session CBEs Available now

Ethics and Professional Skills module Available now

Strategic Professional Available now

Find out what this means for you:


PQ Magazine September 2018

leadership PQ


he summer season hasn’t been short of eventful moments in the UK. From political shakes-ups to sporting triumph (and loss), the glorious weather at least has been able to keep smiles on our faces. Recent events across the political and sporting sphere in particular have brought the subject of leadership to the forefront. England’s World Cup performance is particularly notable. Historically, the Football Association (FA) has gone for ‘big name’ managers that haven’t lasted, but with Gareth Southgate they made a conscious decision to develop a manager familiar with the national structure and players as part of a longer-term strategy. He’s risen through the ranks from player to manager. That means he has the confidence to take some big risks and nurture younger talent without the same pressure of instant success. From the England team's unexpected football success we can see the benefits of investing in that strategic approach in both the performances but also the goodwill that has been created around it. It feels like a long-term management project rather than short-term one. In the business world, we’ve seen share prices of companies such as Intel and WPP fall after the chief executive has quit due to concerns over leadership. Conversely, when Vodafone CEO Vittorio Colao stood down in May he was replaced by the CFO – an accountant – who had been groomed as his successor, so there was less uncertainty.

Management advice Leadership is one of the most written about subjects. You just have to browse bookshop shelves to see the top-selling business titles are mostly focused on leadership and management techniques, how to win and how to succeed. Becoming a great leader should be an aspiration of any hopeful finance professional. Leadership is a critical area for the UK economy. Addressing the poor productivity among UK plcs, Andy Haldane, chief economist and executive director of monetary analysis and statistics at the Bank of England, has previously said Britain needs to improve the quality of its managers if it is to be competitive on the global stage. According to the Chartered Management Institute (CMI), four out of five British bosses are ‘accidental managers’ who have never been trained, and only one in five companies invest in training their managers, resulting in an estimated 2.4 million untrained managers. ACCA recently carried out research into this. The results from a UK-wide poll revealed a quarter (23%) of British workers don’t think there’s training for potential leaders before they move into leadership positions and more than a PQ Magazine September 2018

How to be a big

game player Claire Bennison explains the importance of ACCA’s SBL leadership module

fifth (22%) say there aren’t support structures in place for people who move into management positions. Investors in People have estimated that poor management costs our economy £84bn each year. Without the correct leadership, UK businesses will continue to spend more time and money to rectify the negative impact of poor leadership, which results in a high turnover; losing staff with key skills and experience. As professionals increase their knowledge of the profession, so do the opportunities for leadership roles in the workplace. ACCA supports its students to become the leaders of today and tomorrow – the leaders who are in demand. As a part of the ACCA qualification re-design, there’s a new Strategic Business Leader exam which is designed to mirror the workplace, and presents students with real-world challenges that demand insight and leadership. The exam does this by asking candidates to take on various roles within a made-up but very realistic organisation – such as a consultancy practice, audit or regulatory authority. We’ve got a series of sample questions on our website, so do take a look. What Strategic Business Leader asks is very practical, needing students to really think ahead about what it means to offer strategic financial and consultancy advice. For example, one of the specimen papers asks you to explain the key weaknesses of an organisation’s governance structure since it became a public limited company, recommending

how these weaknesses should be addressed. Another specimen paper asks you to prepare a briefing paper for a railway company board, which identifies and explains the agency relationship of the parties involved in that company. The real world These are just the kind of things done in the workplace of a modern day accountant – as well of course as analysing the data and spread sheets. SBL is then marked on how the task is completed and whether the objectives of the task have been achieved, allowing students to apply the right technical, ethical and professional skills that would be expected in work. The syllabus brings together core areas from governance, risk and strategy, links to other leadership areas such as organisational control, innovation and change management – and uses new technologies and data analytics. Through the latest qualification changes, employees will be able to unlock the potential of their own leadership skills and ultimately be greater assets to the organisations they serve. Finance is the language of business and aspiring accountants will have a leading role. So we have every faith that the PQs reading this will be the great leaders of tomorrow, the people who don’t just make an organisation work, but the people who’ll possess the strategic oversight and the emotional intelligence to make a real difference. PQ • Claire Bennison, ACCA head of UK 13

PQ Financial Reporting Council

Future perfect? The Financial Reporting Council unveils the 2018 UK Corporate Governance Code


lear, meaningful reporting with a renewed focus on the application of principles is the FRC’s goal for its newly published UK Corporate Governance Code. It believes the 2018 version of the code puts the relationships between companies, shareholders and stakeholders at the heart of long-term sustainable growth. It’s also a shorter sharper code and is the product of extensive consultation. The FRC said the code places emphasis on businesses building trust by forging better and strong relationships with key stakeholders, and that includes employees! It also calls for companies to establish a corporate culture that is aligned with the company purpose, business strategy, promotes integrity and values diversity. Both investors and proxy advisors must also assess explanations carefully and not take a tickbox approach, it stressed. So what are the main changes? Here’s what the FRC said they were: • Workforce and stakeholders: There is a new provision to enable greater board engagement

with the workforce to understand their views. The code asks boards to describe how they have considered the interests of stakeholders when performing their duty under Section 172 of the 2006 Companies Act. • Culture: Boards are asked to create a culture which aligns company values with strategy and to assess how they preserve value long term. • Succession and diversity: To ensure boards have the right mix of skills and experience, constructive challenge and promote diversity, the new code emphasises the need to refresh boards and undertake succession planning. Boards should consider the length of term that chairs remain in post beyond nine years. The new code strengthens the role of the nomination committee on succession planning and establishing a diverse board. It identifies the importance of external board evaluation for all companies. Nomination committee reports should now include details of the contact the external board evaluator has had with the board and with individual directors. • Remuneration: To address public concern over executive remuneration, the new code emphasises that remuneration committees should take into account workforce

remuneration and related policies when setting director remuneration. Importantly, formulaic calculations of performance-related pay should be rejected. Remuneration committees should apply discretion when the resulting outcome is not justified. FRC Chairman Sir Win Bischoff said: “Corporate governance in the UK is globally respected and is a framework trusted by investors when deciding where to allocate capital. To make sure the UK moves with the times, the new code considers economic and social issues and will help to guide the long-term success of UK businesses. This new code, in its new shorter and sharper form, and with its overarching theme of trust, is paramount in promoting transparency and integrity in business for society as a whole.” Business Secretary Greg Clark (pictured) said: “It is right that we keep under review and update our code to ensure the highest standards. That is why I supported the FRC in deciding to update their Corporate Governance Code. “These changes will drive improvements in how boardrooms engage with employees, customers and suppliers as well as shareholders, delivering better business performance and public confidence in the way businesses are run. They will help the UK remain the best place in the world to work, invest and do business.” PQ

Introducing the Strategic Business Leader Our new innovative case study exam, Strategic Business Leader, will enable you to demonstrate the right blend of technical, ethical and professional skills employers want. Registration now open for all students

Find out more:


PQ Magazine September 2018

ACCA F5 exam PQ

FM in the spotlight Ask Caron

The ACCA Financial Management exam assesses students on the knowledge and skills expected of a finance manager, in relation to investment, financing and dividend policy decisions. Students often find this a challenging exam, so we’ve asked AVADO’s Agony Aunt, Caron Betts, to deal with some of the most popular FM student queries.

What’s FM all about? Dear Caron, I am not a ‘financial manager’ so I don’t really understand what this exam is all about. Can you give me a brief explanation of the subject and how the different topics fit together? Yours faithfully, Frankly Muddled Caron writes: The overall objective of a business is to maximise shareholder wealth. It does so by investing in projects that meet certain criteria. Hence investment appraisal is one of the key elements in FM and you’ll learn about a variety of different techniques. Of course, to undertake a new project, the business may require additional funds, so you’ll also explore the pros and cons of debt finance vs equity finance. The final element deals with how funds are returned to the shareholders (either through capital growth or via dividends) so understanding the dividend policy of a business is important.

Not a Section C fan Dear Caron, I feel pretty confident about Section A and B of the exam, but find Section C very time consuming. Can I still pass the exam if I run out of time? Yours faithfully, Constantly Clock Watching Caron writes: Time management is a key skill needed to pass all ACCA exams. In FM, 40% of the exam is the two scenario-based “constructed response” questions in Section C. If you are doing the CBE version, then you will be provided with a spreadsheet to prepare your calculations. Practise answering questions using the ACCA specimen exam, or your tuition provider’s replica version, to become familiar with the spreadsheet functionality. For example, to save time working out inflation on inflation, simply enter the formula in the first cell and copy it across to the other years.

Discount factor or cost of capital? Dear Caron, The long form questions often include an NPV calculation, but how do I decide what discount factor to use? They seem to have lots of different names! Yours faithfully, Confused by Cashflows Caron writes: This can be very confusing as there are lots of different terms for ‘discount factor’ (DF) including ‘rate of return’ and ‘expected return’, but they all mean the same thing. The DF is the company’s ‘cost of capital’. However, we want the cost of capital to reflect the company’s financing structure, so we usually refer to it as the ‘Weighted Average Cost of Capital’ (WACC). PQ Magazine September 2018

Things are slightly complicated when the question refers to the ‘nominal’ or ‘money’ cost of capital. Again, these are terms for the DF usually used when the question requires inflated cashflows and therefore an inflated DF. If the question is using inflated cashflows but has given the ‘real’ rate, then you’ll need to apply the Fisher formula to work out the nominal rate, and discount using that.

Annuities v Perpetuities Dear Caron, I can’t really understand annuities and perpetuities. Will I be OK ignoring them and doing long form NPV calculations in the exam instead? Yours faithfully, Annoyed and Perplexed Caron writes: An annuity is a fixed sum for a fixed period of time, for example ‘$2,000 for five years’. Of course, you could draw up a discounted cash flow and discount each amount in turn. But that’s more time consuming than simply turning to the annuity tables provided in the exam and reading off the annuity factor for the required number of years and relevant percentage and multiplying it by the $ amount. The examiner will be expecting you to use this time saving technique and will have allocated marks accordingly. Perpetuities are a fixed sum for the foreseeable future, for example ‘$2,000 forever’. The present value is calculated as Dividend valuation the cash flow divided by the rate (PV = CF / r). It’s model well worth learning that, as the principle is used later in the syllabus e.g. to calculate the value of a P0 = D0 x (1 + g) share we use the dividend valuation model (DVM) (r – g) which is a perpetuity with growth. PQ • PQ Agony Aunt Caron Betts is AVADO’s F5 tutor 15

PQ ACCA exam tips

Are you sitting com Performance Management (PM) When it comes to section C, expect to see budgetary systems, planning and operational variances, mix and yield variances and evaluation of the company performance (either as a whole or on a divisional basis). Given this is a performance management paper you would best be prepared to evaluate some performance! The exam is approximately 40% calculation and 60% discussion, meaning that it is not sufficient just to be able to perform all of the calculations. Interpretation and application are crucial, especially in section C. Taxation (TX) Section A will see a wide range of topics. Expect at least a couple of the OTQs to be devoted to the administration of income tax and corporation tax. So you need to be comfortable with due dates, filing dates and penalties and interest for late payments and returns. Other areas to look out for: • VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flatrate schemes. • Inheritance tax due on lifetime transfers both in the donor’s life and on death. • Statutory residence tests for individuals. • Identification of groups of companies for corporation tax loss reliefs and gains. • Trading loss reliefs for both companies and sole traders. In section B, expect similar questions to those in section A – just longer! You know the two longest questions in section C will focus on income tax and corporation tax. These are likely to include: • Employment benefits. • Property income (possibly including relief for finance costs). • Relief for pension contributions. • Adjustments to profit to arrive at trading income for both companies and sole traders – in past sittings we have seen a number of questions in which you have to correct errors in computations included in the scenario. • Capital allowance computations. Financial Reporting (FR) In section A, expect several questions on consolidation and interpretation of financial statements. Also expect a few questions on noncore areas (inflation, specialised entities). In section C, expect one question to cover interpretations and the other preparation of financial statements. One question is likely to be in the context of a single company and one in the context of a group. Any accounts preparation questions may include extracts or stand-alone calculations or full statement of profit or loss and other comprehensive income and/or statement of financial position. This may include a short separate part with a statement of changes in 16

Here’s BPP ‘advice’ on how to plan for success at the September sitting objectives (ratio analysis, the concept of shareholder wealth), as well as the economic environment and financial institutions topics (financial intermediation, fiscal and monetary policies). The efficient market hypothesis is likely to be tested here, too. Areas expected to be commonly tested in section B are working capital management (operating cycle, the impact of a change in credit period, or accepting a factor’s offer), business or security valuations (method), and financial risk management (currency risk, interest rate risk). The two questions in section C will mainly focus on sections C, D (NPV with inflation and tax) and E. So think either an evaluation of financing options (interest coverage and gearing ratios) or a cost of capital and analysis. equity, or a statement of cash flows extract, earnings per share calculation, or linked written topic. When it comes to consolidation expect fair values, deferred/contingent consideration, PUP on inventories/PPE, intragroup trading and balances, and goods/cash in transit. A single entity question could be preparation from a trial balance or restatement of given financial statements with the usual adjustments for depreciation, revaluation and current/ deferred tax, plus a mix of adjustments on other syllabus areas (leases, substance over form, financial instruments, share issues, grants, inventory, revenue recognition or construction contracts). Audit & Assurance (AA) Remember to pay attention to the verbs used in the questions as these indicate the number of marks available. The verb ‘explain’ requires a sentence and will score one mark, whereas the verb ‘list’ simply requires you to list out information with no further explanation and will score 0.5 mark per point. The majority of marks for section B will test syllabus areas B, C and/or D. Areas expected to be tested in Q16 and 18 will include: • Audit planning. • Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk). • Internal audit. • Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls or descriptions of tests of control). • Audit procedures (both substantive procedures and tests of control).

Strategic Business Leader (SBL) As with all ACCA exams the SBL is a closed book exam. Unlike the other strategic professional level exams, which are three hours 15 minutes long, this one is four hours. The exam builds on the knowledge gained at the ‘applied knowledge’ and ‘applied skills’ levels and the pass mark is 50%. Everything you require will be made available in the exam, and will focus on one main organisation, with all the question requirements related to this organisation. All questions are compulsory and will consist of 80 technical marks and 20 professional skills marks. The 20 professional skills marks are awarded for displaying the following skills and behaviours: communication, commercial acumen, analysis, scepticism and evaluation. While four hours (240 minutes) may sound like a lot of time it is important to manage your time effectively. The ACCA recommend you spend around 40 minutes reading, planning and interpreting the requirements and the information/exhibits provided. That means allocating 2.5 minutes per mark on offer. Remember, the requirements will test your

Financial Management (FM) In section A, a lot of the questions will test your understanding of financial management and PQ Magazine September 2018

ACCA exam tips PQ

mfortably? ability to apply your understanding of the subjects covered in the syllabus in the context of the question scenario.

Another change is the fact that no question will be entirely a discussion question. In section A, questions are often based on core syllabus areas such as project appraisal (domestic or overseas), business valuations and business/financial reorganisations. These areas often include cost of capital calculations. Risk management may also feature in a number of different ways. For example, value at risk, real options, hedging and risk mapping. In section B, Q2 and Q3 expect risk management (currency or interest rate), dividend policy and general financing issues, and real options.

Strategic Business Reporting (SBR) The ACCA SBR format is two questions worth a total of 50 marks in section A and two questions worth 25 marks each in section B. All questions are compulsory. The first question in section A will be based on the financial statements of group entities and may include a foreign subsidiary, discontinued activities, disposals and/or acquisitions. You will be expected to prepare a calculation from any aspect of group accounting Advanced Performance and discuss or explain Management (APM) These tips should accounting principles Again, there will be no optional only be used in conjunction behind the calculation. questions in section B. with proper study. We cannot The first question is From September, Q1 will focus guarantee that these topics also likely to require on a range of issues, from will appear in the actual consideration of some syllabus section A (strategic exam as we have not seen financial reporting issues, planning and control), section C the exam papers. Examiners (performance measurement such as financial are not predictable so it is instruments, pensions, systems and design), and section vital that all core syllabus share-based payment and D (strategic performance areas are revised fully. impairments. Again, you will measurement). be expected to explain the In section A, Q1 often has a accounting principles underlying any requirement linking a business’s mission to its calculations. performance objectives using the concept of The second question will require consideration CSFs and KPIs. Improvement recommendations of the reporting and ethical implications of could be key here. Building blocks, performance specific events in a given scenario. Remember, pyramid or the balanced scorecard are also when considering ethical issues you will need to commonly tested in Q1. Understand the apply the fundamental principles of the ACCA’s purpose and limits of these models. Code of Ethics. From September, one of the section B Section B will include a question or partquestions will come from the syllabus section E question involving the analysis or appraisal of (performance evaluation and corporate failure). financial or non-financial information from the Commonly tested areas in section B are quality perspective of a stakeholder. This may include management, information reporting (big data, the use of additional performance measures. lean information), the application of strategic There are two professional marks available for models (such as PEST, Porter’s 5 Forces, the this question. Value Chain), HR frameworks (reward and Current issues could be examined in either appraisal systems), risk management and section A or section B, but is likely to form part environmental management accounting. of a question rather than a full one. Recent key articles have been on complex Timings are important. It is 1.95 minutes per business structures, big data, integrated mark (or 1.8 minutes per mark if you allocate 15 reporting and performance management models minutes to read the paper). (BCG and Porter’s 5 Forces).


Advanced Financial Management (AFM) From September, both section A and B of the exam will be compulsory – there will be no optional questions! Also, from September every exam will have questions that have a focus on section B of the syllabus (advanced investment appraisal) and section E (treasury and advanced risk management techniques). These syllabus areas are therefore high priority areas for your revision. PQ Magazine September 2018

Advanced Taxation (ATX) (UK) For section A, expect one question focusing on personal tax issues and the other on corporate tax issues. Don’t forget the four professional marks and five ethics marks available in section A, too. Expect to see: • Unincorporated business, particularly loss relief or involving a partnership or basis period rules. • Capital gains tax versus inheritance tax,

including availability of reliefs. • Group of companies involving overseas aspects and losses. • Overseas aspects of income tax, capital gains tax, IHT or corporate tax. • Personal service company. • Share schemes. • Company purchase of own shares or liquidations. • Enterprise investment schemes/seed EIS/venture capital trusts. • Takeovers. • VAT – partial exemption or land and buildings or transfer of a going concern or overseas transactions. • Transfer of trade versus sale of subsidiary. • Disincorporation relief. • Pension contributions. • Patent box, research and development expenditure. Advanced Audit & Assurance (AAA) This is the first sitting of AAA. Section A is a case study worth 50 marks, set at the planning stage of the audit, for a single company, a group of companies or potentially several audit clients. Candidates will be provided with detailed information, and is likely to include extracts of financial information, strategic, operational and other relevant information, as well as extracts from audit working papers, including the results of analytical procedures. You will need to address requirements from syllabus sections A, B C and D. Think planning, risk assessment, evidence gathering, and ethical and professional considerations. Don’t forget the professional marks available in section A. There are no optional questions in AAA’s section B. One question will always predominantly come from section E, so think completion, review and reporting here. That might mean assessing a going concern, the impact of subsequent events, evaluating identified misstatements, and the effects on all these on the auditor’s report. A critique of the audit report may also be asked for. The other question can be drawn from any other syllabus area. Section G on current issues is unlikely to form the basis of any question on its own. In the past this exam tested areas covered by the examiner’s technical articles. So make sure read the ones on ethics, and risk and accounting issues. PQ There’s lots more advice in our ACCA study zone. Help from PQ magazine is never more than a click away. 17

PQ syllabus updates

Embracing change The world of accountancy training is rapidly changing – and you must exploit these changes to your advantage, says Alex Leach


orking in the wonderful world of accounting can be a strange old place, laden with prestige and tradition, a profession that can be traced back to 1494, when an Italian by the name of Luca Pacioli first described the system of double-entry bookkeeping. Fast forward a mere 524 years and we still use the same doubleentry bookkeeping as the cornerstone of our trade. And yet Pacioli’s jaw would most undoubtedly drop to the floor if you told him we now have software that, at a click of a button, can capture an invoice, link through to a banking system and do the double entry for us. This is not an article on the modern history on debits and credits, but I used this timeline to illustrate a very valuable skill of any accountancy student: selfreflection, or the ability to look at yourself and see how far you have come. Whether you want to look along a time horizon of over 500 years, or just five months, one thing is certain – things change. Whether the change is driven by you or forced upon you, change is constant and ever present. Take the introduction of computer based exams (CBE), for example. ATT moved to CBE back in 2010, CIMA went full CBE in 2015, and now nearly all professional bodies have moved their exam format, or are in the process of moving to, computer based exams. ACCA have now transferred all of their applied knowledge and skills level to CBE, looking towards September 2019 for their strategic professional level, and ICAEW have transferred all but their Case Study, expected to be migrated by July 2019.


This change reflects the way in which the modern world is developing; gone are the days of a manual ledger the size of a boardroom table delicately prepared with pencil and ruler. Now all this can be done at the click of a button, so why shouldn’t the way we are examined move that way, too? What you can hopefully see from this is the evolution of the way in which we need to take exams, put down your pot of ink and quill and start scrubbing up on your word processing skills. Resistance is futile, and you must embrace this change to get the qualification you desire. T for technology Not only is the way we do our exams changing, but the syllabuses of the professional bodies are developing, too. In March, ICAEW introduced a new letter to their traditional Business Strategy exam – T for technology. This reflects the importance of technology in areas such as gaining a competitive advantage in the market, as well as cyber security, big data, and much more. ACCA’s professional level exams, now the new strategic professional level, are changing in September. The most notable change is the introduction of a

four-hour integrated case study, Strategic Business Leader (SBL). This paper is designed to cover the broad syllabus areas of its two predecessors, P1 Corporate Governance, Risk and Ethics, and P3 Business Analysis, and yet you would be naïve to think this is just a “big exam”. There is massive emphasis on the professional marks, a whopping 20, and these are awarded for a range of professional skills, from analysis to commercial acumen. The change you must embrace is to not just see this as an exam you have done before – it is not. You must come at this exam from a different perspective, taking into account various possible roles and stakeholders. In addition, training providers such as Kaplan are developing more and more innovative ways to cater to the undeniable pace of change in the way in which students learn. Students now take to their phones, tablets and laptops to learn. Students use YouTube, forums, online lectures and interactive web platforms to help maximise their learning opportunities. I believe the driving force behind all of this change is to develop accountants in the modern world who are upskilled and fit for purpose. With the evolution of our profession, whether that is from automated software, or artificial intelligence, the need for a bookkeeper is diminishing. What organisations will really value is someone who can look beyond the numbers and be a trusted advisor. My message to you is to embrace the change, whether that is the changes in syllabus or the way in which you are examined, development in technology or the plethora of mediums usable for learning. Embrace them! Ultimately, change is happening. What you need to do it use it to your advantage. PQ • Alex Leach is a tutor at Kaplan Financial

PQ Magazine September 2018



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PQ CIPFA student conference

PERSONAL JOURN The highlight of the CIPFA student conference was when three hugely successful CIPFA accountants told their stories…

Rob Whiteman: ‘always do the right thing’


ow to get ahead in your career was a big theme of the CIPFA student conference in Bournemouth this year. Three top accountants provided their insights into how you can create a long-term career in the public services. First up was CIPFA CEO Rob Whiteman. He claimed he was the worst person to talk to about careers! That, of course, couldn’t be further from the truth. Whiteman started life as an opera singer and said he had met many people on stage who had had a burning ambition to be an accountant (not)! He believes he has had a privileged career in public finance and admits that, like many, he fell into the public sector. But the more he worked in the sector the more it pulled him in. Whiteman has now been CIPFA CEO for four years, and he combines this with a couple of NEDs roles – one in the NHS and the other for an investment fund in the City. That means even today he works long hours and works hard. For him, a mixed portfolio means he is always learning and improving his knowledge. Before CIPFA Whitman ran the UK’s Border Agency under then Home Secretary Theresa May. So Brexit might be down to him, he joked. Other jobs along the way include being the chief exec of Barking & Dagenham council. He became a director of finance way

back in 1990. At the time, Bill Roots was the CEO of Westminster Council when Dame Shirley Porter was gerrymandering the electoral boundaries. He told Whiteman one piece of advice that has always stuck with him. Roots told him: “Always do the right thing”. Whiteman stressed that if you get the sack for doing the right thing you will get another job. But, if you do the wrong thing and keep your job you won’t have a career. Whitman then told a story about his time at Lewisham where his ethics was truly put to the test after just two weeks

Accountants behaving badly? There is a rising fear that CIPFA accountants are coming under increasing pressure to act against the public interest from their unscrupulous bosses. The early findings of a new CIPFA ethics survey seem to confirm that these fears are not unfounded, as almost two-thirds (63%) of finance professionals say they have been asked to act unethically at some point in their career. And, it’s often not a one off! Nearly half (47%) of respondents said they have been pressured to behave unethically between one and two times. A worryingly 29% of accountants said they has been asked to ‘do the wrong thing’ two to five times, and 23% revealed it had been 20

more than five times! So, where is the pressure coming from? In most cases it is the line manager (42%). However, CEOs and CFOs are also high on the list of ‘bad people’ at 30%. The pressure often comes with threats, about being overlooked for promotion and even disciplinary action. Those working in audit were told they had to do what the clients want. If not, then the consequences were unpaid bills and lost work. Many CIPFA’s said they stayed strong under the provocation. Just 7% admit they had agreed to the unethical request, with another 29% ‘doing it but fudging it a bit’.

in the job. Even threatened with the sack he stuck by his guns. His next piece of advice was to always think medium term. And he pointed out that culture always eats strategy for breakfast. Whiteman told the now enthralled audience that he was told off at Camden for always telling everyone what the local authority settlement was going to be. The council treasurer said that second-guessing what cuts were going to be made didn’t make for a happy family. Whiteman emphasised to work in the public sector you will need resilience. There will also be times when you need help and you need to recognise the signs. He revealed that, under pressure at the Home Office, he got short tempered and impatient with people. He had even started to feel sorry for himself. Next up to tell their story was CIPFA’s new president Sarah Howard. She took everyone back to a chilly Saturday January morning in 1991 when the postie walked down her drive with two envelopes – one brown and one white. One (white) had her CIPFA results in and the other was a letter from her then boss, Howard Davies, the comptroller at the Audit Commission. He congratulated her on her P3 results, wishing her well and hoped she would stay working with the commission. She still has that letter and talks about the culture Davies created. PQ Magazine September 2018

CIPFA student conference PQ

NEYS There have been lots of changes since then, and she wasn’t just talking about the way students receive their results. She can remember working in smokefilled audit room on big oak desk surrounded by men. She was even told off wearing trousers to work! Now she looks around at work at the collaborative working and the diverse workplace. Such a better place… Back then it was all about knowledge and technical expertise and having all the answers. Today it’s all about connections and emotional intelligence and asking the right questions. Howard said it was vital you follow your passion. You are going to be working for a long time so do something you like! Working in the public sector means that’s easier to do, too. She revealed that even she has had a couple of wobbles on the way, but said that once you have found your passion it all falls into place. She also believes it is important you be yourself. Howard felt people connect with authenticity. That’s doesn’t mean you stop learning, though. She said she was still learning. Another tip is to be with people who lift your mood (mood lifters) rather than those who just bring you down. Being connected and sharing ideas will also take you far. So growing your network is key. Last and by no means least was John Bloomer, a former student chair. He graduated in 2010 and he feels even then the world was a very different place to today. When he qualified there were not many jobs as there was a thing called the credit crunch around. Now CFO of Staffordshire Police, he said it was key that accountants understand the culture they are going into. This couldn’t be truer when it comes to the police! What has helped him is having mentors, and he ventured that these don’t always have to be someone right at the top. Bloomer suggested if you are going to make mistakes then maybe the right time to do it was when you are a student. As a student you also need to make friends with your peer group, The CSN was a great way of doing that – it’s a readymade network. He said accountants need to get out more and try to understand how the public sector works. If you spend a day with a social worker out in the field you will feel differently about how your decisions affect how they can do their job properly. PQ PQ Magazine September 2018

Student winners

The CIPFA conference in Bournemouth was also the setting for the CIPFA prize-giving ceremony. Paul Douglas (pictured above), who works for NHS Leadership Academy, picked up his award from outgoing president Andrew Burns. Douglas won the prize for the best overall performance in the Public Service Financial Reporting exam. Avid musician Sophie Medwell (pictured left), of Grant Thornton, picked up two awards, the Arthur Collins and Eric Gilliland prizes. The prize for best performance in the Financial Accounting exam went to Catherine McAlpine (pictured below). She works for Cambridgeshire County Council and wanted to send a thank you her biggest supporters Tabs and Tom – who she calls her “CIPFA besties”.



Cracking the case study T

o many people, the Case Study exam seems like a mystery, built around a multi-dimensional marking key and a mythical list of criteria that the examiners might use to decide who will pass through to the promised land. Like Robert Langdon in a Dan Brown novel, students often find themselves searching for hidden codes, hoping to collect a magical number of diamonds and ‘competent grades’ required to unlock the secret combination. Sadly, there is no secret formula. The reality is actually much simpler than that. The design of the marking key and, most importantly, the examiner’s decision regarding whether a script should pass or fail are all driven by one overriding principle – would a client pay for this report?

Passing each requirement One basic expectation of any paying client would be a complete report. Imagine reading through a report that starts well but the final sections are either unfinished or under-developed. How would it make you feel? This is why the examiners will be looking to assess whether a script has scored sufficient marks on all of the requirements rather than just consider the total marks accumulated. One poor requirement or two marginal requirements can therefore understandably lead to a fail. Strict time management in the exam will be crucial to ensure that the report is complete and all requirements are sufficiently balanced. Avoiding NA grades It is also critical to address all of the individual tasks set out in each requirement. Most

Lee Rowlandson unlocks the secrets of getting through the tricky case study exam

requirements will usually ask the candidate to discuss four or five individual areas of interest. The skills and technical knowledge grids needed for this requirement will then be constructed around this list. An audit firm could never submit an audit report if they had missed out a whole section of the audit. That would be unprofessional (not to mention negligible). Surely they would take the same viewpoint to any other work they submitted to their clients? This is why it is so important to carefully break down each requirement and to spend time planning how the report can be structured in a way that ensures that all of the tasks have been adequately addressed. Beware of taking shortcuts There are no miraculous shortcuts when producing a professional report and candidates who try to find them in their exam are adopting

a high-risk strategy. Some candidates believe that if they focus on five or six of the skills boxes in each requirement then they will scrape through. It is worth remembering that five ‘sufficiently competent’ grades on their own would only score 33% of the marks available for each requirement. Is it likely that the examiner will consider that report to be good enough? Be mindful at all times that the examiners have the final decision on whether a script should pass or fail. Shortcuts like this are hardly befitting of the work of a professional firm of chartered accountants and may even sway the examiner’s final judgement. For more support and guidance for the Case Study go to resources. PQ • Lee Rowlandson is a tutor at Kaplan Financial Reproduced with the permission of ICAEW, adapted from an article first published in Vital (April 2018)

Certificate will set you on your way W

hether you’re starting out in your career, wanting to set up your own business or simply looking to develop your skills, ICAEW can help you go far. The ICAEW Certificate in Finance, Accounting and Business (ICAEW CFAB) is your first step to a rewarding career. The six modules of the globally-recognised qualification, which make up the Certificate Level of ICAEW’s chartered accountancy qualification, the ACA, cover business, technology and finance, management information, law, assurance, and the principles of tax and accounting. The skills you learn will be useful throughout your working life and it’s a great way of demonstrating to future employers that you are commercially aware and understand how a business works. Leading to a designation You can study ICAEW CFAB as a standalone qualification or as part of your journey towards qualifying as an ICAEW chartered accountant. Regardless of the route you choose, the qualification could provide you with professional 22

There are many reasons for you to choose the Certificate in Finance, Accounting and Business…

recognition through the ICAEW Business and Finance Professional (BFP) designation. Achieving the BFP designation demonstrates your commitment to ongoing professional development. This in turn will make you more employable, especially if you’re working towards a promotion in your existing company or a new job. You will also be able to use the prestigious BFP letters after your name. Holders of the BFP designation also benefit from ongoing support and advice from ICAEW, as well as access to an international network of like-minded business professionals. In addition, BFP holders can access online and interactive resources from the Chartered Management Institute (CMI), which will help you add real value to your organisation on a day-to-day basis. Who’s eligible? ICAEW CFAB is designed for anyone looking to

enhance their knowledge and skills in finance and business. It is open to anyone that fits this description and as such there are no academic entry requirements. If you have previously or are currently studying a relevant qualification, you could be eligible for exam exemptions for up to five of the six ICAEW CFAB exams. For example, you may have a university degree which features components around business, finance, accounting or law. Or you may be currently studying another accountancy qualification (eg AAT, ACCA, CIMA). For more details on how to claim credits for prior learning, head to the ICAEW website. To apply for the BFP designation, you need to pass the six ICAEW CFAB exam modules, demonstrate 12 months of relevant work experience and complete the ICAEW ethics learning programme. All you need is a real interest in business and a desire to advance your career to begin your ICAEW CFAB journey. Apply today at PQ • Thanks to the ICAEW for this article PQ Magazine September 2018

PQ with AAT, ACCA or CIMA? Why wait? Join ICB today! Fast track your career by using your existing qualifications to join the world’s largest bookkeeping organisation. As a Certified ICB Bookkeeper you’ll benefit from:

Professional status and recognition Free legal and technical advice-line Local and national events Resources, webinars, templates and help sheets Accounting news, emails and updates Discounts with 100s of retailers including Sainsbury’s, Tesco, ASOS, and Curry’s And being part of a community that really cares

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PQ local government

Revolution from within Finance departments are transforming the way local government operates. Here’s how


revolution is taking place in local government today, not just within the UK but globally. Organisations are responding to the pressure to ‘do more with less’ by transforming the way in which they deliver public services in every area of operations, from back-office administration through to front-end online services. For local government finance professionals, this revolution presents both opportunities and challenges. On the one hand, they get to enhance their role as business partners by advising on major transformation initiatives. On the other, they are tasked with helping their organisations to deliver more services to more people, with less central funding, against a backdrop of widespread organisational and technological change. So how are they responding? The short answer is that they are transforming themselves and their organisations by finding and supporting new models of service delivery, financing and organisational structure. This is according to a new report by CIMA and CIPFA, entitled ‘Transformation: How finance teams are driving local government transformation’. The report highlights the top five transformation challenges facing local government as: getting people to adapt; securing budget; determining the cost benefit; finding the right skills; and deciding where to focus efforts. Finance professionals can play an important role by communicating insights that support better decision-making and drive actions in all these

PQ AAT award winners

areas. They can also support the development of alternative delivery models by reviewing outsourcing and private finance initiative contracts and identifying new and different ways to invest and build. Furthermore, the research found that the finance function has an increasingly important role to play in measuring, tracking, demonstrating and communicating the long-term value of proposed investments associated with transformation. Featured in the report are some inspiring case studies of local government transformation initiatives, which have been supported by proactive finance teams. One is Cheshire East Council, which set up its own limited company to deliver transport services while meeting savings targets. The company has consistently outperformed its financial plan through

measures such as simplified procurement procedures, replacing the ageing council bus fleet with contract hire vehicles, and generating extra business from schools and other public agencies. It saved more than £809,000 in the first 15 months alone. Another great example is the Peterborough Social Impact Bond, which was launched in 2010 to help rehabilitate short-sentenced prisoners at Peterborough prison. The bond paid for interventions aimed at reducing reoffending on the basis that if reoffending fell, investors would receive both their initial capital back plus a return for taking a financial risk. In the case of Peterborough prison, reoffending was reduced by 9% over seven years. Then there is Co-operative Home Care (CHC) in Australia, an example of an employee-owned or ‘mutual’ model of public service delivery. CHC provides high-quality homecare to elderly, disabled and chronically ill people. Its success can teach other public service mutuals some lessons in the importance of good financial management and seeking out diverse sources of capital. These case studies demonstrate how local government finance teams around the world have evolved from being record-keeping support functions into business partners that work closely with colleagues and stakeholders across and beyond the organisation. Thanks to their strategic focus, technical knowledge and practical expertise, finance professionals are emerging as key players in the sustainable, affordable delivery of public services, both now and in the future. For more and to download the report go to PQ • Rebecca McCaffrey, CPFA, FCMA, CGMA

All in it together for AAT awards

All Inclusive Training’s 2018 AAT award winners

Working for Croydon: apprentices Caroline Owora and Jordaan Rose-Tull 24

Along with AAT President Nicky Fisher (dressed in yellow), PQ recently rocked up to the All Inclusive Training AAT awards presentation evening in West Croydon. First order of the evening was to present students with their certificates. Then President Fisher formally presented Julie Agbowu with the AAT Small Training Provider Awards for 2018 (picture top left).

Successful Level 1 student Nicole Mann

AAT student Adrian Clarke PQ Magazine September 2018

PQ CIMA spotlight

DRIVING AMBITION You are in control of your CIMA journey, so take it at your own pace and enjoy the ride, says Jackie Durham


e’re all going on a summer holiday… or not, as the case may be! Well, for once the UK weather means it feels as if we could all be enjoying a summer holiday. Maybe we had better get used to holidaying in the UK if the Brexit negotiations don’t go to plan. Then there are the other ‘feelgood’ factors; as I write “It’s [still] coming home”, the economy is booming thanks to sales of ice cream and barbeque essentials, and there’s the usual strawberry and Pimm’s fest at Wimbledon! For many of you, this may be your last long summer holiday before settling down to a new post-uni job, and the inevitable studying this will mean if your chosen profession is accountancy. Enjoy it – travel, have a well-earned rest, catch up with friends, boost your bank balance with a summer job – but most of all, if you’ve secured a great new role and have signed up to CIMA, set aside a little time for some basic preparations to make your life easier. It might be tempting to put the future on the back boiler for the summer, thoughts of the CIMA journey ahead can be scary… and exciting at the same time. However, investing a little time in planning now is well worth it. Think of your CIMA journey as a road trip. Along the way, you’ll encounter all sorts of terrains, you may fast track along the German autobahns if you’ve got exemptions or follow the twists and turns of country roads if accountancy is new to you. Along the way, you’ll encounter various junctions, which subjects to sit in which order, which study option to pursue, which way to turn after you’ve failed an exam (divert onto another route for now or get back on track for the same subject), roundabouts (will I ever pass


P3?!) or you might find yourself parked up for a period of time while you focus on family or career. One of the huge benefits of studying for a career in finance with CIMA is the flexibility offered by the exams. I’ve said it before, but with OTs on demand and case studies four times a year, your journey can be as fast or slow to suit your personal needs. You can spend time on motorways and complete all your exams in 18 months (don’t forget you’ll still need three years’ Professional Experience Requirements to achieve full qualification), catch your breath on B roads, or any other combination of roads, pit stops and car parks that work for you. The options are all there – you are in the driving seat. Whatever your journey, there are plenty of CIMA signposts and resources en route, rewards as you complete each stage of your journey (CertBA, Dip MA, Adv Dip MA), the prize of esteemed membership of an international accounting body and the letters ACMA, CGMA as you complete your final trip. Why not plan an amazing holiday as a reward for when you pass the final Strategic case study exam? By that time, you will definitely have proved you are worth it. Dreams of that holiday will help

motivate you if things gets tough. Anyway, I seem to have been on my own diversion there, so back to planning and preparation! Planning makes things manageable both at a practical and emotional level, plans make us feel in control and when we feel in control we are more effective at what we do. Think about how you will study and where, how much study time will you have, where can you create more, and whether your employer is going to offer study leave (it is always worth asking)? If you are going to be self-studying, think about which study texts you will use and don’t forget to check out the CIMA Interactive Self Study Guides (there’s one for each Cert BA and Professional OT subject). Find out about whether you might be eligible for any exemptions and then consider whether to take them/how you will fill any knowledge gaps. Most of all, plan your ideal journey, for example: “I want to try to complete each level (three OT subjects plus the case study) in six, 12, 18 months”, etc, and once you start studying get booked onto an exam as that we give you the focus and motivation to keep on track. PQ • Jackie Durham, education and training consultant, AIPCA-CIMA

PQ Magazine September 2018

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PQ your career

Make your job stand out P

Karen Young explains how firms can make sure they attract the right PQs for them

ressure on organisations to recruit the best accountancy and finance talent continues to intensify, but our latest research in the Hays What Workers Want 2018 report shows that many employers are missing out on talent as a result of avoidable obstacles in their job application processes. Some 60% of PQ accountants tell us they have at some time been deterred from completing job applications as a result of a negative experience with an employer’s application process – something that employers need to take action to fix if they want to keep their advantage in the competition for talent. In our new report, we look at the ideal applicant journey through four stages: search, apply, decide and join. Our report shows a sizeable gap between an employer’s perception of the quality of the applicant experience they provide, and the reality experienced by PQ applicants. One of the keystones of this application journey is the job advert itself, yet all too often these are treated as an afterthought. Our research shows that misleading job advert content is one of the most common reasons for employees to leave a job within the first 12 months, with 51% of respondents giving it as a reason for previously leaving an organisation. A lack of training (51%), the culture of the organisation (32%) and

incomplete it can not only deter candidates from applying at all, but also lead to recruiting applicants with mismatched expectations to yours, who may not stay long with your organisation. 2. Anticipate what candidates want When preparing your job adverts it’s also important to recognise that whether they are applying via a recruitment agency website, careers portal, job board, or social network, candidates will be filtering their search results. The top two criteria for PQ candidates when conducting a job search were location (85%) and salary (73%). However, only 44% of employers always include salary information in job adverts, potentially missing out on candidates who will not consider applying without this information. mismatched manager expectations (24%) were also frequently alluded to, some of which could be addressed in part through the more effective use of job adverts. So what do organisations need to include in a job advert to give them the best chance of attracting PQs? 1. Don’t be woolly on the detail Candidates could be deterred by an advert that omits critical information or is vague on details. The vast majority (81%) want a detailed description of the role itself, followed by 70% who say the most important criteria for them is the compensation and benefits. It is therefore critical to provide sufficient detail on exactly what your vision is for this job, and how you plan on rewarding them. People do want to know what success looks like. If this information is

3. Paint a consistent picture Your job advert may be the first thing an applicant sees, but the content you provide about your organisation needs to be consistent at every touchpoint of the applicant journey. Ensure your recruiters and interviewers are able to talk about all aspects of the job description and advert. You should also consider what is being said about you on employee review sites, and if necessary take steps where these reviews may contradict the image you are portraying through your own channels. Our Hays What Workers Want report export examines the applicant journey from searching and applying for jobs through to interview, offer and onboarding, identifying the common dealbreakers for applicants at all points of the journey. PQ • Karen Young is a director at Hays

Come to the dark side

Following the success of our inaugural conference, PQ magazine is again joining forces with London South Bank University to put on a leading edge one-day conference. So make sure you put 28 November 2018 in your diary For the second year running London South Bank University and PQ have teamed up to deliver a conference where others fear to tread! This year’s theme is ‘The Dark Side of Accounting – ethical dilemmas and sustainability challenges’. We are now working to deliver a host of expert speakers to talk about what the future might look like in a galaxy not far far away! And hopefully we will discover how accountants can strike back and become a force for good. This free one-day conference (it was sold out last year) will have three streams running through the day, so you can mix and match the subjects that interest you most. There will a ‘future is here’ 28

stream, looking at the rise of the robots, money laundering and blockchain. Our ‘good governance is the key’ stream will look at corporate governance, integrated reporting and ask the question: does the FRC have a future? Finally, we have revised the ‘own your career’ stream. This will run an interactive CV building workshop, look at your personal branding and host a ‘meet-the-employers’ session. All PQ readers, and anyone connected with the accountancy profession, are welcome to sign up.

To secure your FREE place go to and drill down to 28 November

One of LSBU’s top lecturing team gets in the mood for our new conference! PQ Magazine September 2018

careers PQ

social media ROUND-UP Always on topic, everyone ‘loved’ our tweet about Love Island: “If you got an offer from Oxbridge and Love Island, you would be better off ‘financially’ going to Love Island, says economic analyst Kristine Dislere. She has worked out that in the long run you would make more money!” Dislere is from Frontier Economics, and if you want to cheer yourself up read her

report ‘The good, the bad and the muggy’! Dislere discovered that the contestants who stay the full duration of the show can expect to earn about £2.3m over the next five years, although, interestingly, winning the show provides only a small extra boost to £2.4m. By contrast, she explains that a recent report estimates that an Oxbridge graduate is likely to earn about £815,000 more over their lifetime than someone who leaves school at 18 with A-levels. There was some interesting reaction to another story we wrote about having regrets over your degree choice (see page 6 for the news story). Ummar Shoukat said: “I couldn’t agree more.” But top tutor Darren Sparkes emphasised: “There is far more gained from doing a degree than just the subject matter. Graduates will have developed skills for life and work during their time at university. Perhaps universities just need to do a better job of making graduates realise that!” Social media meant PQ magazine was also able to quickly pick up on the problems with CIMA Connect, which became ‘unavailable’ just as students were hoping to book their case study exam sittings. Deadlines had to be extended, but it wasn’t great timing, to say the least. And we got the heads-up about ACCA June sitters being able to get their results a day earlier. At first, some PQs thought the results had been leaked, but apparently if you went to an old results email you could see your latest results. The ACCA says it has now closed that loophole, but keep the email and see what happens post-September, we say. PQ Magazine September 2018

Life at PwC Mihir Patel, 24, is a Senior Associate for the Big 4 firm, based in London. He has worked there for three years. He has a degree in economics from Cambridge and was recently awarded a prize in the ICAEW Advanced Level exams What time does your alarm clock go off on a working day? 6:30am – although that’s one of a few… What’s the first thing you do when you get to your desk? I set up, have a quick look at emails and then get some breakfast. What’s on your desk? PwC have a hot-desking system, so my desk is pretty clear. What’s the best thing about where you work? The people at PwC are fantastic – I work in a great team and have a brilliant peer group. The firm also offers a range of opportunities. Where’s your favourite place to go for lunch? Chilango. What (or who) can you see when you sit at your desk? I sit on a bank with five other people – they’re great and we have a good laugh during the day. Sadly, I’m facing away from Tower

Bridge, but the views from our area are pretty incredible. Which websites are your favourites and why? BBC and Bloomberg for news updates, Netflix for TV series/films. Which websites do you use for work? I tend to use a range of websites for research, such as Bloomberg, Reuters, Companies House, and perhaps other government websites for clarification on specific laws/rules. How many hours a week do you spend in meetings? It can vary a lot, but probably between five and 15. What time do you leave the office? It varies throughout the year – outside busy season I try to leave by around 6:30pm. How do you relax? I like swimming and playing squash. It’s

also nice going for dinner with friends and spending time with family. How often do you take work home with you? I try to work from home once a week, but when in the office I aim to finish my work there before heading home. What is your favourite TV show? Friends. Summer or winter? Summer. Pub or club? Pub. Who is your hero? Nelson Mandela. If you had a time machine, where would you go? To the future – it’d be interesting to see how dramatically life will change. If you hadn’t chosen accountancy, where might you be right now? Most probably still somewhere in the finance sector.

In brief AI adoption is ‘too slow’ AI uptake in UK business must improve if companies are to stay competitive and attract the next generation of talent, says a leading recruitment consultant. There appears to be a genuine worry that businesses are not embracing the AI revolution as expected. In fact, a survey found just 4% of businesses in the UK had implemented AI systems. What graduates want Today’s university graduates apparently care less about pay than getting a job with a good

work-life balance, according to a new survey from Grant Thornton. Almost half of respondents said they valued a job where they could split their time equally between their work and home life. Just 27% said that pay was their top priority. Other key ‘wants’ were good career development and transport links. Desk hopper Do you personalise your desk at work? An increasing number of employees don’t have anywhere to call a home, due to the rising number of companies

opting for ‘hot-desking’. However, psychologists warn that having no desk of your own might save the company money, but could lead to greater anxiety and stress in the workplace. Ashley Weinberg, a lecturer in Psychology from the University of Salford, says: “There is a sense of belonging when you have a secure space.” But we all knew that, didn’t we?

The PQ Book Club: books you should read The Pacesetters – the British accountancy firms reshaping their industry by Doug LaBahn and Josh Drummond (Xero) This book is unusual in that it is published by an accounting software company rather than a traditional publisher (it is available via It tells the story of how the UK’s top and most innovative accountancy firms are using Cloud accounting software to revolutionise their businesses. Using an extensive number of

case studies from a variety of sectors, this book “provides a roadmap to achieving efficiencies, automation, cloud accounting and access to realtime advisory services”, according to Richard Andrew of Armstrong Watson, who also describes it as “essential reading”. Chapters tackle subjects including Making Tax Digital, how to step away from spreadsheets, practice efficiency, scaling with the

Cloud and the advisory journey. It also includes a ‘seven-step’ roadmap’ to making the move to the Cloud. If your practice has not fully embraced digital then reading this book would be a great starting point. Go to it! PQ rating 4/5 A good read. • We’re giving away three copies of this book this month – see page 30 for details. 29

PQ got a story, funny or serious, you want to share? Email


HALITOSIS HORROR A staggering 63% of people admitted to cutting a conversation in the workplace short due to the bad breath of the person they are trying to talk to. A recent survey found some 20% of the participants admitted that they dreaded bumping into a co-worker due to their bad breath, but only 4% would buck up the courage to reveal it. So what causes bad breadth? Did you know that skipping lunch can make your breath smell worse. Coffee dosen’t help either. So if you haven’t had time to grab a meal at work make sure to have some mints at the ready!

The trade in fake university degrees has boomed, due in part to the ‘selfie culture’. Students who enjoy sharing their achievements on social media are causing a boost in fraudulent degrees, according to the Higher Education Degree Datacheck (HEDD). In the past year the estimated number of forged degrees for sale has risen by 30%. This is not surprising, since most soon-to-be graduates said they planned on sharing their certificate online, allowing forgers access to full HD images of the degrees. With some fakes selling for over £200 it’s no wonder HEDD is urging graduates not to share photos of their certificates on social media.


Persuading people to ditch plastic bottles took a refreshing twist at PwC recently and could mean an annual fall of around 23 tonnes of plastic purchased by PwC staff. PwC’s one month ‘Give me tap’ trail during May saw 600 people engage in a daily water consumption monitoring

NARCISSISM IS FOR ME Narcissism has long been categorised as a negative and unwanted personality trait. Research, however, suggests that those of us who are more prone to egotistical tendencies are also more likely to do better at exams. Dr Kostas Papageorgiou, of Queens’s

University Belfast, is part of a research team looking into this traditionally taboo behaviour. His research suggests that young people who had a greater sense of superiority, entitlement and grandiosity were more likely to get higher grades.

scheme in return for receiving a metal water bottle from social enterprise group GiveMeTap. The team overseeing the trail noted a 58% fall in plastic bottle purchases and 42% reduction in compostable cup usage, a cost saving of around £4 per person per year.


COMPULSORY YOGA Auditing the UK’s top companies is a stressful job, so one Big 4 firm has decided to do something about it – it has introduced compulsory yoga and mindfulness sessions for its 4,000 workers. All KPMG’s auditors have been told to attend one three-day session a year – and that includes senior partners.


One day Felix Nhlanhla Ndiweni was working as an auditor for Waltham Forest Council, the next he is the paramount chief of the Ndiweni people. Now that is what you call a change of career! Ndiweni was born in Zimbabwe in 1965, but moved to the UK to study in 1981. However, in 2014 after his father’s death he went back to Zimbabwe and he is now pushing for the restoration of the Ndebele monarchy, more than 100 years after the last king was defeated by Cecil Rhodes.



CIPFA may have been talking about digital transformation at its annual conference but it appears many UK hospitals are still reliant on ‘archaic’ fax machines, with nearly 9,000 still in use. At one end of the scale is Newcastle upon Tyne NHS with 603 machines. At the other is Oxford University Hospital Trust switched off all fax machines last year. The NHS also has 130,000 pagers in use, costing £6.6m a year.

Did you know that money worries not only affects your health, it can also give you spots! When skincare giant Garnier conducted a study of students it discovered fretting over money was the number one stressor for dermatological woes (no shock there).


The Pacesetters

As the accounting industry grapples with the forces of digital disruption we have a book that offers an insight into how some of the UK’s more progressive firms are using cloud accounting software to become winners in the game. And we are giving away three copies in this month’s prize draw. Send your name and address to enter this lucky dip. Head up your email ‘Pacesetters’ and send it to It really is as easy as that.

Are you Mensa worthy?

Who doesn’t love a Mensa Quiz book? No one, we hear you cry, and we have three to give away in this issue. Isn’t it time you tested your knowledge against the highest IQs in the world? This book takes questions (and the answers) from the annual quiz for Mensans, which has been published for the past 20 years. There’s some nice pictures to look at, too. Send us your name and address to be entered for this great giveaway. Head up your email ‘Mensa’ and send it to Do it now!

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 14 September. The main draw will take place on Monday 17 September 2018.


PQ Magazine September 2018



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PQ magazine, September 2018  

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

PQ magazine, September 2018  

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