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PQ magazine Demand for part qualified accountants looks set to grow unabated in 2016, according to the latest Hays salary and trends survey. A combination of competition for high-flying PQs and an increased appetite for hiring is also adding pressure on salaries and other benefits, as employers try to hold on to their top talent. Karen Young, Director of Hays Accountancy & Finance, revealed that despite receiving higher salary increases than their colleagues in other finance roles, some 55% of PQs are not satisfied with their pay packets. Despite this, some 66% of PQs have not asked for a pay rise. Young stressed that asking for more money can feel awkward, but it doesn’t need to be. You need to present a strong business case to your employer to show that you have added value to the organisation and deserve a pay rise (she provides her ‘do’s and don’ts’ on page 32). The Hays survey reveals that the average salary hike for PQs last year was 2%. ACCA PQs will be pleased to hear that their average salary has risen above the average! The average UK salary for an ACCA PQ in the 2016 guide is £26,167, up 3% on 2015. CIMA PQs were paid the highest average salary (£26,917), a 2% change year-on-year. Both CIPFA and ACA salaries for PQs rose by just 1%, with CIPFAs earning £24,029 and ACAs taking home £23,965. Employers may have to work harder in 2016. Some 50% of part qualifieds say they anticipate moving jobs within the next 12 months. One reason for this may be the fact that 46% of part qualifieds do not feel there is scope for career development within their current organisation. What PQs want from the ideal employer is also changing. The top benefit PQs consider when looking for a new role is flexible working (64%), more than 25 days holiday (57%) and financial support for studies (56%). All said and done, PQs seem fairly happy with their lot. Some 58% of those surveyed rated their work-life balance as ‘very good’ or ‘good’. • The Hays salary checker is on page 20. WIN ONE OF OUR THREE BEATS PILL SPEAKERS IN OUR BUMPER QUIZ! January 2016 www.pqmagazine.co.uk / www.pqjobs.co.uk DEMAND FOR PQs TO JUST KEEP GROWING SPONSORED BY World a better place thanks to accountants It’s official: accountants make the world a better place. A new study by the global body for the profession, the International Federation of Accountants (IFAC), has found accountancy and the number of accountants in a country is strongly linked to prosperity and improved living standards. In fact, IFAC has estimated that the profession contributes $575bn annually to the global economy. Research found there is a strong correlation between the number of accountants working in economies with GDP per capita. There is an even stronger correlation with the UN Human Development index, which measures life expectancy, years of schooling and income. IFAC CEO Faye Choudhury explained that professional accountants contribute to stability and growth through better information, reporting, measurement and decision- making. This is decisively linked to improving living standards and the wealth and prosperity of nations and their citizens. He added: “When nations have a robust system to track the flow of money in government, within businesses and between organisations, transparency and accountability are improved, organisations are strengthened and economies are enhanced.” • For more take a look at ‘Nexus 2: The Accountancy Profession – A Global Value Add’, a study conducted by the independent Centre for Economics and Business Research. Some 50% of PQs think they will be moving jobs in the next 12 months Will you be looking for a new role in the new year?

PQ magazine, January 2016

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PQ is a free monthly magazine for student accountants, focusing on the ACCA, CIMA, CIPFA, ICAEW and AAT qualifications. It's packed full of study tips, advice and guidance on how to pass accountancy exams, plus careers advice from the experts. PQ is the UK's leading independent accountancy magazine.

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Page 1: PQ magazine, January 2016

PQmagazine

Demand for part qualified accountantslooks set to grow unabated in 2016,according to the latest Hays salary andtrends survey.

A combination of competition for high-flyingPQs and an increased appetite for hiring is alsoadding pressure on salaries and other benefits,as employers try to hold on to their top talent.

Karen Young, Director of Hays Accountancy &Finance, revealed that despite receiving highersalary increases than their colleagues in otherfinance roles, some 55% of PQs are not satisfiedwith their pay packets. Despite this, some 66%of PQs have not asked for a pay rise. Youngstressed that asking for more money can feelawkward, but it doesn’t need to be. You need topresent a strong business case to your employerto show that you have added value to theorganisation and deserve a pay rise (sheprovides her ‘do’s and don’ts’ on page 32).

The Hays survey reveals that the averagesalary hike for PQs last year was 2%. ACCA PQswill be pleased to hear that their average salary

has risen above the average! The average UKsalary for an ACCA PQ in the 2016 guide is£26,167, up 3% on 2015.

CIMA PQs were paid the highest averagesalary (£26,917), a 2% change year-on-year.Both CIPFA and ACA salaries for PQs rose byjust 1%, with CIPFAs earning £24,029 and ACAstaking home £23,965.

Employers may have to work harder in 2016.Some 50% of part qualifieds say they anticipatemoving jobs within the next 12 months. Onereason for this may be the fact that 46% of partqualifieds do not feel there is scope for careerdevelopment within their current organisation.

What PQs want from the ideal employer isalso changing. The top benefit PQs considerwhen looking for a new role is flexible working(64%), more than 25 days holiday (57%) andfinancial support for studies (56%).

All said and done, PQs seem fairly happy withtheir lot. Some 58% of those surveyed ratedtheir work-life balance as ‘very good’ or ‘good’.• The Hays salary checker is on page 20.

WIN ONE OF OUR THREEBEATS PILL SPEAKERSIN OUR BUMPER QUIZ!

January 2016 www.pqmagazine.co.uk / www.pqjobs.co.uk

DEMAND FOR PQs TOJUST KEEP GROWING

SPONSORED BY

World a better place thanks to accountantsIt’s official: accountants makethe world a better place. A newstudy by the global body for theprofession, the InternationalFederation of Accountants (IFAC),has found accountancy and thenumber of accountants in acountry is strongly linked toprosperity and improved livingstandards. In fact, IFAC hasestimated that the professioncontributes $575bn annually tothe global economy.

Research found there is astrong correlation between thenumber of accountants workingin economies with GDP percapita. There isan even strongercorrelation withthe UN HumanDevelopmentindex, which measures lifeexpectancy, years of schoolingand income.

IFAC CEO Faye Choudhury

explained that professionalaccountants contribute tostability and growth throughbetter information, reporting,

measurementand decision-making. This isdecisivelylinked to

improving living standards andthe wealth and prosperity ofnations and their citizens. Headded: “When nations have a

robust system to track the flow ofmoney in government, withinbusinesses and betweenorganisations, transparency andaccountability are improved,organisations are strengthenedand economies are enhanced.”• For more take a look at ‘Nexus2: The Accountancy Profession –A Global Value Add’, a studyconducted by the independentCentre for Economics andBusiness Research.

Some 50% of PQs think they will be moving jobs in the next 12 months

Will you belooking for anew role inthe new year?

pq jan 16 p1 q9.qxp_pq july 10 cover-v2 10/12/2015 12:06 Page 1

Page 2: PQ magazine, January 2016

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002_PQ 0116_PQ 1209 000 07/12/2015 14:09 Page 7

Page 3: PQ magazine, January 2016

comment PQ

News 08ACCA exams Feedback fromstudents on the latest exams10ICAEW/CIOT tie-up Pair joinforces to offer new qualification12ACCA PER change Recordingtool will be ‘more user-friendly’14CIPFA apprenticeships Morecandidates take the plunge

Features, etc06Mind your Ps&Qs AAT is notbeing fair on former PQs; ACCAresults are a worry; and the verybest of Twitter and LinkedIn16PQ Bumper Annual QuizTest your knowledge – and win a fab Beats Pill speaker!

18PQ Awards 2016 Time isrunning out, so get your entry infor accountancy’s top awards20Salary survey Are you gettingpaid what you should be? Checkout the Hays salary checker

22AAT awards and exams Thepass rates – and great photosfrom the Achievement Awards

24ICAS apps Recommendedapps for all CA part qualifieds 25International standards Howto tackle far-from-straightforwardlease accounting questions

26Understanding gearing Allyou need to know aboutoperational and financial gearing

28How to make partner A newguide to help get you to the top

29Let’s get technical Don’t failbecause of your basic maths!30CIMA P3 Some tips on gettingyou through this tough paper31CIMA on demand How is thenew system working one year in?32Careers #1 Some top adviceon how to negotiate a pay rise 33Careers #2 Life at a solicitor’spractice; your career ‘issues’tackled; and our Book Club38Fun time Welsh town’s taxploy; a crossword king; investingin Lego; and our great giveaways

The columnistsRobert Bruce Why were the HBOS‘alarm bells’ ignored? 8Prem Sikka The law must demandgreater corporate transparency 10Carl Lygo New apprenticeship levycould be a game-changer 12

Subscribe to PQ magazineIt’s FREE – see page 35 or go to

www.pqmagazine.co.uk

ABC July 2014–June 2015

32,233

Publisher’s statement: We have adigital issue of the magazine which

is sent to 8,218 requested readers

Festive greetings to all Well, that’s 2015 nearly over. To help you celebrate we havegot together with the top accountancy bodies to offer you thechance to win a great Beats Pill speaker in our annual quiz.

The AAT, ACCA, CIMA, CIPFA, ICAEW and ICAS have all got the spirit ofgoodwill, and we thank them for that. We don’t always agree, but theydo seem to understand our role in ‘holding them to account’.

It was nice to read the IFAC report this month that suggests the worldis a much better place with accountants in it. There is, apparently, astrong correlation between the number of accountants and GDP percapita and the UN’s Human Development Index.

The exams, too, are over for another year and so it is time to let yourhair down – unless, of course, you have booked an exam on demand!CIMA’s Steve Flatman writes a really interesting piece this month (page31) about the first year of its new ground-breaking computerised examsystem. He points out that one PQ passed all 12 exams in just eightshort months. However, he stresses that students can take their time ifthat’s the way they want to play it. He also revealed that one PQ reallydid take an exam while on holiday in Goa, India.

Looking at postings on the noticeboards it appears some ACCAstudents are still expecting to see the exam questions and answers onthe ACCA website. It was quickly pointed out that ain’t happeninganymore! We are all waiting with bated breath to see what the new jointreport (September and December) will look like.

It is good to see that students have more choice whenchoosing where to study. A new college in Warwick,Timely Training, is offering AAT, ACCA and CIMA coursesout of training rooms in Wilton Drive (pictured). It boldlyplans to run the whole AAT syllabus from the get-go, ifthat is what students want. They are joined by the likes of BloomsburyAccountancy, who are offering quality accountancy courses in centralLondon for ACCA PQs. Competition is always a good thing!

Graham Hambly, PQ magazine editor – [email protected]

CONTENTS January 2016

Andrew SymonsKaplan ACCA Student

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Page 4: PQ magazine, January 2016

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Page 5: PQ magazine, January 2016

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Page 6: PQ magazine, January 2016

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PQ Magazine Fourth floor, Central House, 142 Central Street, London EC1V 8AR | Phone: 020 7216 6444 | Email: [email protected]: www.pqmagazine.co.uk | Editor/publisher: Graham Hambly [email protected] | Advertising manager: Polly Thrasivoulou [email protected]

Associate editor: Adam Riches | Art editor: Tim Parker | Subscriptions: [email protected] | Contributors: Robert Bruce, Prem Sikka, Carl Lygo, Tony Kelly, Phil Gammon, Jo Daley | 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 [email protected]

Published by PQ Publishing © PQ Publishing 2016

A balanced approachHaving qualified a few years agoI still dip in to PQ magazine asI’m involved with training anddevelopment of PQs. I read withinterest the article on thebenefits of AAT membership(December ’15) and note theability of part qualified/qualifiedaccountants from other bodiesto join as full AAT members.

So can the AAT explain why I,as someone who could in theoryenter AAT membership through

this reciprocalrecognition (CIMA),am required to submitto a more convoluted

membership entry process thansomeone who has never been anAAT member, but may qualify formembership though their ACCA,CIMA, etc. qualification?

As a previous MAAT I need tocomplete a long form detailingmy CPD, work experience, softskill competences and technicalcompetence. I appreciate this isappropriate in some cases, I’m ata loss as to why I need tocomplete a more convolutedapplication process than as if Iwas ‘just’ CIMA qualified.

It seems there’s aninconsistent approach to grantingmembership: as a previous

MAAT I seem to have to “jumpthrough more hoops” than anICAEW/ACCA/CIMA direct entrantjust because I’ve also completedthe AAT qualification – shouldn’tthis be the other way around? Itmakes me question if themembership process is fair andtherefore worthwhile.

I have, of course, asked thisquestion of the AAT (twice), onlyto be sent a “please fill in theattached forms” email on oneoccasion and no response on theanother. Neil Hanman, by emailThe editor says: We wouldwelcome a response from AAT

The writer of the star letter each month wins a fantastic ‘I PQ’ mug!

Hot & Tweet

email [email protected]

ACCA pass rate woeI don’t normally write to letters tomagazines although I read them inearnest. I am studying ACCA,although haven’t sat an exam forvarious reasons for the past fiveyears. But I always take an interestin the pass rates, and am veryconcerned when I see how lowthey are compared with otherbodies.

I appreciate that perhaps it is notrealistic to compare them, butwhen the results are so different itis a cause for concern. Is it onlyme that thinks this way?Name and address supplied

PQs need a voiceThe time has come for ACCAstudents to have a representativeon the ACCA board. There are,after all, over 400,000 of us! I amnot surprised the ACCA hasn’tdone this already – maybe they arefrightened of a new demandingvoice.

Engaging with students shouldbe a key KPI. I had a quick look atthe ACCA’s annual review (whydidn’t PQ review it as promised?)and it shows both member andstudent satisfaction with theassociation is falling, which theACCA admits is a disappointment.In 2010/11, member and studentsatisfaction was 77%; today it hasfallen to 70%. Name and address supplied

We have been heavily involved in the debates on theACCA’s move to not publish the exam questions andanswers after each sitting. Instead, the ACCA plans toproduce extensive feedback after the December andJune sittings incorporating the two previous exams.While most students were unhappy with this move, some

who were more understanding. Keegan Boodoo said: “There’s a move toMCQs. Obviously, they can’t publish questions from the exam bank. Comeon people, think. We want this to be a respected qualification, one thatis rigorous. This move of not publishing past papers is a move in theright direction.” For us at PQ magazine the worry is that many PQs wereobviously oblivious to the changes.

One of our tweetsthat really got yougoing this month was ourrevelation that stressed outstaff at HMRC have beengetting some ‘therapet’ – theywere given the chance tocuddle and stroke dogs to boasttheir wellbeing. Jack concludedthat “I take it that’s a taxablebenefit!” and Nick could see“taxpayer subsidised cat caféscoming soon”.

We alsorevealed thatthe UK hadbeen rankedas the fourthrichest country in the world interms of average wealth perperson – $147,600. “Blimey,who’s got my share?” asked EyeJay.

We tweeted out some ACCAexam tips for the exams thatrecently took place. The ACCA’sF9 guide says PQs should focuson doing fewer questions reallywell rather than lots ofquestions badly! It really doesmeans you have to manage yourtime better. We also advisedsitters not to use their readingand planning time to answerthe MCQs.

Follow us @PQmagazine.

PQ Jan 16 p6 q9.qxp_pq aprl08 p04 10/12/2015 11:57 Page 1

Page 7: PQ magazine, January 2016

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007_PQ 0116_PQ 1209 000 08/12/2015 09:26 Page 7

Page 8: PQ magazine, January 2016

8 PQ Magazine January 2016

PQ news

The regulatory report into why HBOS,the eminently respectable high-streetbank, failed back in 2008 leaves oneopen-jawed at the way that ludicrousbusiness strategies and behaviour justseem to have slipped by. It is a hugelesson. Just because a business is bigdoesn’t mean normal judgement canever be suspended.

The report says: “Group Financeappears to have acted as ‘compiler ofnumbers’ rather than a strategicsounding board.” How on earth doesthat happen? Surely someone musthave realised the stupidity of this. Atanother point it says: “The influencethat HBOS’s Treasury had within thegroup is unclear. Certainly it was nothelped by frequent changes to thereporting lines of the Head of TreasuryServices, especially when thisresulted in him reporting to abusiness head, a user of funding.” Itmust have been obvious to someonethat this was daft – and dangerous.And again: “At the start of the ReviewPeriod, minutes of the HBOS Groupboard meeting in March 2005 statedthat ‘HBOS was structurally illiquid’.”How could that have been writtenwithout anyone taking serious actionto remedy, or at least, to mitigate it?

This is where in the insanity lies.Anyone outside a serious businessassumes that most people incommand of it are rational andsensible. There is always the chancethat someone with an ego the size ofa small planet will try and wrench thesteering gear out of true. Mostbusinesses are dull, practical andeffective. How on earth does anyonefail to notice when they are not?

ROBERTBRUCEWhy wereHBOS ‘alarm bells’ignored?

Robert Bruce is an award-winning writer onaccountancy for The Times

AAT assessment results inThe AAT has admitted thatcompared with other Level 3assessments the 60.7% successrate of ACPR/API is ‘relatively low’(except CMGT).

The association has just releasedthe assessment results to PQ for theyear-ending 30 June 2015 (seepage 22), and for ACPR/API it feltthat despite the low pass rate therehas not been a dramatic decline inthe performance in the past year.But a review has revealed little or noimprovement in previously identifiedareas of weakness.

Students are struggling withpreparing a trial balance sheet andreconciliation (task 4) and extendedtrial balance and knowledge of goodaccounting practice (task 6). The

AAT said: “This year’s ACPR reportconfirms that there is still room forsignificant improvement.”

The association also said thatperformance in Level 4 tasks wherestudents provide extended writtenresponses (report, email, etc) tendsto be weaker, when compared tocalculation tasks. The real standout papers here are personal andbusiness tax, where the successrates fell in both, to 47.4% and61.9% respectively. When it comesto personal tax, students need toget better at benefit in kind (all –excluding cars), the theoryunderpinning topic and penaltiesand CGT exemptions, losses, reliefsand tax payable.• For all the results turn page 22.

Party starts too soonfor Glasgow sitters

ACCA on the moveOver the Christmas break

ACCA is moving its HQ a mile upthe road from Lincoln’s Inn Fieldsto John Adam Street, close toCharing Cross Station. The movewill enable the ACCA to bring staffin three buildings under one roof.The ACCA’s new address is: TheAdelphi, 1-11 John Adam Street,London WC2N 6AU.

The big give Reed Business School has

put its money where its mouth is

once again with its support of theBig Give Christmas Challenge. RBShas donated a whopping £46,000

to a range of charities, all of whichhave educational objectives.Thebiggive.org.uk was founded in2007 by Sir Alex Reed. It enablesdonors to find and donate tocharities of their choice while alsohelping charities to benefit fromexciting innovations in fundraising.

AAT signs MoUThe AAT has signed a

Memorandum of Understandingwith the Institute of SingaporeChartered Accountants and itseducation arm, SAA GlobalEducation, to offer the AATqualification in Singapore. Infuture, those who attain the ISCA-AT qualification will be conferredthe Accredited AccountingTechnician (Singapore) designationand qualify for the ISCA Affiliatemembership, subject to meetingpractical experience requirements.

In brief

Horrified ACCA students in Glasgowhad to endure relentless musicthroughout their P5 Decemberexam.

Some 120 students were close torioting by the end. Invigilators gotthe students extra time, but theycouldn’t stop ‘Gangnam Style’ beingplayed at high volume throughoutthe exam. One student admitted tohaving a panic attack and a petitionhas been sent to the ACCA. PQunderstands that an ACCA managerwas sitting the exam at the centre, sothe association should know first-hand what went on. It puts the threeminutes electricity cut during the F7paper in Dublin in the shade!

Turning to the exams, it appearsmany F5 PQs left the exam hall stillunsure about what the examiner

wanted. As one student put it: “Wearen’t rocket scientists, we want tobe acccountants!” Sitters reallydidn’t like the MCQs either, whichjust seemed annoyingly long.

F7 PQs were out in force on thediscussion boards after the sittingto complain about the ‘funny andinteresting’ paper. Sitters felt thepaper was neither. For many, thismeant F7 was a disaster; Q3 stoodout as ‘the problem’, with someawkward adjustments.

One student complained thathaving to sit two exams, F7 and F8,in the new one-week set-up meantthere was no gap between exams.But even under the old eight-daysitting system F7 and F8 followedon consecutive days. This time, F8was dubbed ‘pretty fair’, but many

PQs worried about the number of‘C’s’ in the MCQs. Everyone seemsto think at least the first threeanswers were ‘C’. The time pressurewas ‘unexpected’ and ‘surprising’ toothers. “Before I knew what washappening I had run out of time,”said one sitter. Students feel theyshould be advised to do Q5 and Q6first “or you are dead!” Thesequestions are worth more and if youdon’t manage your time well andleave these to last it could reallyaffect your performance.• Go online to see our paper-by-paper feedback

CIMA strategic case study studentsin Birmingham are being given aunique opportunity to ‘win a tutor’,courtesy of First Intuition,Birmingham. One lucky studentreally will have a ‘tutor in theirpocket’ for half a day. For fulldetails on how to enter this greatprize see page 17.

First Intuition has opened upshop in state-of-the-art premises atSnow Hill, right next to the station.

New head of centre AnthonyHiggins told PQ magazine that thecollege will be offering both CIMAand ACCA courses to begin with.

In fact, he is so confident in whatthey provide he will give CIMAstudents their first course for free!

First Intuitionopens up inBirminghamThere’s still time to enter the PQ magazine Awards 2016 –

turn to page 16 for all the details

PQ Jan 16 p8 q9_pq sept 12 p08 10/12/2015 14:06 Page 10

Page 9: PQ magazine, January 2016

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Page 10: PQ magazine, January 2016

10 PQ Magazine January 2016

PQ news

Secrecy is an essential ingredient forthe illicit transfer of capital, taxevasion and proceeds of corruption.Often large amounts of money passthrough a series of shell companieswhich rarely trade. This disguises theorigins and destination of the proceedsand makes it difficult to trace theparties behind the transactions.

There is an urgent need to changethe rules so that company owners anddirectors can be identified. Under theUK’s Companies Act 2006, all firmsmust have at least one natural personas a director, but s/he does not have tobe a UK citizen or permanentlyresident in the UK. So in the absenceof extradition treaties, the UK law ispowerless to do anything if thecompany directors leave the country toescape criminal inquiries.

A UK-registered public companyneeds two directors. One could be acompany registered in the CaymanIslands, the British Virgin Islands (BVI)or other UK Crown Dependencies andOverseas Territories. Companies do nothave to identify their shareholders,directors, or the place of operations.For example, Ugland House in GrandCayman is the address of over 18,000companies. BVI has a population of33,000, but has more than one millioncompanies, which rarely trade locally.

In the interests of transparency UKcompany law needs to be changed.The UK has legal and moralresponsibility for good governance ofits tax havens and must ensure theirsecrecy does not hinder the fightagainst financial crime.

PREMSIKKALaw mustdemandfirms aretransparent

Prem Sikka is professor of accountancy at theUniversity of Essex

CIMA upgrades student website offerCIMA has upgraded the student section of

its website to ‘articulate the student experienceand benefits better’. Students, when asked howthe institute could improve their experience,said they wanted better signposting, and CIMAbelieves that the new-look demonstrates thevalue of studying CIMA. The new site can befound at www.cimaglobal.com/studentbenefits

PKF Cooper Parry/Clement Keys to mergeTwo leading Midlands accountancy firms,

PKF Cooper Parry and Clement Keys, are tomerge in early 2016. The new firm will have acombined revenue of £30m and a team of more

than 350 people across its two offices in theMidlands.

New 10-year limitCIPFA has introduced a qualification time

limit of 10 years for students. This means, thatas at 2 January 2015, registered students willhave until January 2025 to complete thequalification and apply for CIPFA membership.

Student removed from registerThe ACCA disciplinary committee has

ordered that Birmingham student DesislavaKoleva be removed from the student register,subject to appeal. It was found that Koleva held

herself out to be in public practice without apractice certificate. She also held a position ofdirector in ‘Adapt Accountancy andBookkeeping’. This was found contrary to ACCAregulations. She also has to pay costs of £1,500.

HMRC to create superhubs HMRC is targeting fewer, more modern

regional centres and more highly skilled staff ina 10-year modernisation programme. HMRC’s58,000 staff are currently spread across 170offices; it wants to create 13 new regionalcentres across the UK over the next five years.It is estimated that the move will generate estatesavings of £100m a year by 2025.

In brief

The Chartered Institute of Taxation(CIOT) and ICAEW have launched amuch-anticipated ACA/CTA jointprogramme in the owner-managedor private business (OMB)specialism. The pair describe theprogramme as ideal for new andcurrent ACAs as they can achievethe ICAEW and CTA qualification inthe space of three to four years.

While not for the faint-hearted,the joint programme offers a fast-track for students who want tooptimise their study time.

The owner-managed or privatebusiness option is one of three taxspecialisations for PQs on theinnovative joint CIOT/ICAEWprogramme – the others being tax ofmajor corporates and indirect tax.

CIOT President Chris Jones said:“The entrepreneurial endeavour

and skills of owner-managed andprivate businesses are the engine ofthe UK economy, so it is crucialthat people who support them with

Institutes launch excitingroute to two qualifications

Deloitte playing games

their financial planning have a goodgrasp of their requirements and thechallenges that they face.”

Jones felt the joint programmewas a ‘win-win situation’ for bothemployers and PQs. He said: “Thekey benefits for employers andstudents of the owner managed orprivate businesses specialism arerecruitment attraction, flexibility, taxspecialism facilitated, faster clientcontribution, optimised study timeand cost efficiency.”• The first sitting of the newqualification will take place in May2016; the registration deadline islooming (31 December 2015).

CIMA students need to see thecase study exam as a competency-based job interview, according todirector of learning Peter Stewart.

He told the lecturers’ conferencethat students have to use the pre-seen material as their researchinformation pack. What the casestudy assessment is not, hestressed, is a test of yourknowledge of the pre-seen content!Stewart emphasised that sitterscan’t expect tasks coveringsignificant volumes of the pre-seen

in the real exam. Yes, the pre-seenshould help give you anappreciation of the issues facingthe industry/organisation. You thenneed to discuss what could happenwithout building expectations that itwill happen, he said.

Students also need to not put toomuch faith into real ‘live’ examples.There are no marks expected forlive example references, althoughStewart admitted that the quality ofresponse can be enhanced ifawareness is shown.

CIMA on the case CIPFA wins NHSWelsh contractCIPFA has won a contract withNHS Wales Finance Academy toexclusively provide tuition tograduates on the NHS WalesFinance Management TrainingScheme. As part of the three yearcontract CIPFA will provideclassroom-based training inCardiff to eight participants, whowill be placed across differentNHS organisations in Wales.

NHS Wales Finance Academy’sprogramme director, CharlotteMoar, said: “We are delighted tobe working with CIPFA as thequalification and educationprovider for our newly re-launched Finance ManagementTraining Scheme that will helpensure we have the right financeleaders of the future.”

She was particularly pleasedthat CIPFA’s new training basewill enable both NHS students andthose from our partner publicsector organisations to trainwithin Wales.

Deloitte has added a new stage to its selection process for its apprentice applicants. First up candidates have to applyonline, answering a few personal details and adding a run-down of their academic qualifications.

Then, in what Deloitte’s is calling “an exciting addition tothe application process”, candidates are asked to play a game – FireflyFreedom. This gives candidates a chance to demonstrate how they wouldreact to different situations. At the end of the challenge candidates receivean easy-to-read report that summarises their potential. Then there is thematter of online testing and an assessment day, before the final interview.

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12 PQ Magazine January 2016

PQ news

In the Autumn Statement ChancellorGeorge Osborne announced moredetails about the creation of anapprenticeship levy to fund threemillion more apprenticeships duringthe lifetime of this Parliament. Thelevy comes in to force in April 2017and is expected to raise £3 billion ayear. As expected it is on ‘bigemployers’, and is 0.5% on payrollsof £3 million and over. Practicallyevery top accounting firms will be hitby this, and FDs are clamouring tounderstand how they can recoup thelevy to spend on their trainingprogrammes.

Government is aiming to push upthe quality of apprenticeships byintroducing degree apprenticeships.Large employers can recoup their levyby using it to fund degreeapprenticeships which include thecosts of a professional qualification.One leading accountancy graduaterecruiter anticipates that their firmcould entirely move to school leaverapprenticeship programmes from itscurrent graduate recruitmentschemes.

The Prime Minister made a pledgethat every 18 year old should eitherbe at university or undertaking anapprenticeship. The levy now puts apremium on that 18 year old with bothuniversities, employers andapprenticeship providers eyeing upsignificant advantages from the newfund. However, there is no upper agelimit on apprenticeships, so I expectthere will be innovative ways in whichthe levy will be used by employers.

CARLLYGONew levycouldchange thenature oftraining

Professor Carl Lygo ischief executive of BPP

The ACCA is introducing a newPER policy in 2016, and it ispromising a new, more user-friendlyrecording tool as part of the update.

From February, the ACCA ischanging the way students achievetheir performance objectives: ratherthan having to answer challengingquestions, PQs will have to recordachievements by ‘ticking off’ fiveelements and submitting onereflective statement of up to 300words for each performanceobjective. The ACCA is alsoreducing the Essential performanceobjectives from nine to five.

When it comes to the Options,

trainees will still have four toachieve but will have 15 to choosefrom instead of 11.

Finally, workplace mentors will infuture be called ‘practicalexperience supervisors’.

Part qualifieds will still need tocomplete the Professional Ethicsmodule and have 36 months ofrelevant practical experience before

they can become a member.The association has confirmed

that any trainee who has startedrecording their performanceobjectives should continue workingthrough them and ensure they aresigned off. The ACCA will thenautomatically transfer the signed-offperformance objectives to the newsystem.

ACCA PER changes: less is more

The AAT recentlyheld its 2015AchievementCeremoniesaround the

country. Here'sone happy

attendee at theLondon event,held at Grange

St Paul’s Hotel.For more pics go

to page 22

TIMELY TRAINING

Numbers thatdefine work

EXISTING PER POLICY NEW PER POLICY9 Essentials to be completed 5 Essentials to be completed 4 from 11 Options to be completed 4 from 15 Technicals to be completed3 challenge questions for each 1 reflective statement for each performanceperformance objective objective500 words for each question 300 words for each reflective statement

A new provider for AAT, ACCA andCIMA courses has opened its doorsin Warwick – Timely TrainingSolutions (TTS) Limited.

Interestingly, the team of highlyexperienced tutors used to work ata local further education college,but felt that with changes affectingthe funding of courses and moredynamic exams and delivery ofcourses, a move to become aprivate training provider wasessential. At their training rooms in

Wilton Drive staff plan to delivercourses that are student-led ratherthan training-provider led.

Timely also intends to run thewhole AAT syllabus (including level1) as this will provide a “moreinclusive feel”. Director Kevin Handsaid: “With the ever-changing examcontent, we believe trainingproviders need to be more dynamicin their approach to students.”

For more information go towww.timelytrainingsolutions.co.uk

The average adult’s working life willinclude six jobs, nine pay rises,three bust-ups with colleagues –and one office romance, says astudy from the AAT. Experts haveexamined in detail every aspect of astandard 47-year (47 years!) career.

UK workers also rack up anastonishing 9,024 hours of unpaidovertime, equating to a loss of£153,408. Among the other statsare that you will make an estimated29,328 cups of tea, take 94 daysoff sick and be late 141 times. TheAAT’s Mark Farrar said the researchshows that the idea of a job for lifemay be a thing of the past.

A lifetime of work will see…• 1 office romance• 2 bad bosses• 3 heavy bust-ups• 6 job roles• 6 different companies• 9 pay rises• 94 sick days• 141 times late• 705 minor disagreements• 9,024 hours of overtime• 29,328 cups of tea

Belfast-based KPMGpartners arrestedFour partners at the Belfastoffices of KPMG werearrested recently after anHMRC tax evasion

investigation. The four – Jon D’Arcy, EamonnDonaghy, Arthur O’Brien and PaulHollway – were allegedly arrested butlater released. KPMG said the firm isco-operating with the investigation andthe four partners have been placed onadministrative leave.

The Youth IndexCore European countries Switzerland,Germany and Austria take the top

three places in the newly-launched PwC YouthWorkers Index. The index charts the ‘success’of countries in developing the potential of theirunder-25s. In Germany, for example, youthunemployment has fallen since 2006 andcurrently stands at 8% for 15-24 year olds.PwC has said that the countries further down

the rankings canadd billions ofdollars to theireconomies if theyinvested in theiryoung people. TheUK come in 21stplace in the index,with Greece at 32and Spain 33.

EY ‘going in blind’EY has revealed some 45% of its total studentrecruitment was ‘blind’ this year. The firm’sOmar Ali said EY currently invites candidatesto first interview on the basis of theirperformance in online tests only – notacademic grades, positions of responsibly orwork experience. He explained: “There are noCV sifts outside of this process, whicheliminates the risk of name and gender bias,and we no longer require candidates to meetan academic benchmark in order to be eligibleto apply.”

Ali went on the say that for the first time thisyear EY will also be operating a pilot schemefor its experienced hire, which will be nameblind.

BelfastCity Hall

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14

PQ news

PQ Magazine January 2016

Following the introduction of IFRS 13, fair valuehas become formalised in the world of financialreporting. For users of financial statements, theconcept of an asset measured at fair value isvery understandable. Also, SOFP valuationsbased on fair value are more reliable thanvalues based on other accounting criteria suchas depreciated historic cost, amortised cost andvalue in use.

However, despite the obvious benefits of fairvalue, the introduction of IFRS 13 Fair Value hasnot been without challenges for users of financialstatements. IFRS 13-based fair valuemeasurement criteria do not apply to allsituations where standards explicitly requiremeasurements based on fair value. One situationwhere this occurs is IFRS 2 Share BasedPayments. In IFRS 2, the measurement of the

SOFP equity or liability at year end is based onthe fair value at grant date of the instrument (forequity settled), or the fair value at year end ofthe instrument (for cash settled). However,despite the reference to fair value in the IFRS 2standard, this fair value does not requireapplication of IFRS 13. Instead a method basedon options valuation techniques is used todetermine the fair value of the instrument.

Another situation where the fair valuementioned in a standard does not refer to IFRS13 Fair Value measurements is IFRS 5 Assetsheld for Sale. IFRS 5 uses the concept of fairvalue less cost to sell to re-measure an asset orbusiness unit that has been classified as heldfor sale.

Strangely, the fair value referenced here is aspecific exclusion from the scope of IFRS 13.

Finally, many standards use measurementbases that, conceptually, are very similar to fairvalue. These include IAS 2 Inventories, whichare measured at the lower of cost or netrealisable value. Even though net realisablevalue is conceptually very similar to fair value,once again IFRS 13 does not apply in this case.

So, in summary, even though fair value is adesirable measurement basis to improveunderstandability, reliability and comparabilityof financial information, the inconsistentapplication of fair value measures can oftenundermine some of these advantages.• Mick O’Callaghan is an AIA Achieve e-tutor. The AIA Achieve team is producing a series of ‘A Quick Look at…’ articles throughout 2016.More articles can be found on the AIA website:www.aiaworldwide.com/a-quick-look-at.

A QUICK LOOK AT... IFRS FAIR VALUE – SCOPE CHALLENGES

Speaking openly onmental wellbeing

Apprenticeship schemecontinues to flourish

Nearly one in three ICAEWmembers (past and present) haveexperienced mental ill health issuesduring their careers, according tonew research from the CharteredAccountants’ BenevolentAssociation (CABA).

The charteredcharity believes thefact that one inthree accountantsare willing to speakup about the issueis indicative of aprogressive attitudetowards mental illhealth in the UK.

Employers are also doing more.Some 47% of those surveyed feelsupported by their managers inspeaking about any problems and

just under half (49%) feel theyhave adequate support to deal withthe pressures of being a charteredaccountant.

CABA found that respondentswere less likely to speak openly

about mental healthinternationally – just12% saying they hadexperienced mental illhealth.

CABA’s Kelly Feehansaid: “While 30% mayseem a high percentageof people to be affectedby mental ill health, we

actually see this figures as a silverlining. Speaking openly aboutmental ill health is a big stepforward both for the sector and tobreak the stigma around illness.”

CIPFA’s Finance ApprenticeshipScheme, in its third year, is now infull swing. The apprentices for the2015 programme have beenrecruited and placed with CIPFA’spartner employers, where they willlearn on the job four days a weekand gain valuable skills frommentors across the organisation.The apprentices have also startedtheir studies for the AAT level 4Diploma, which they will completeduring their 12-month placement.

Apprentice Programme ManagerAmritpal Singh said: “There hasbeen a major increase inapprentices filling roles in thehealth service, including NHSEngland and Scotland. We have

also partnered with the Equality andHuman Rights Commission for ourfirst central government placement.Additionally, apprentices have beenplaced with other leading employersfrom Grant Thornton to Essex Policeand Coventry City Council.”

Since the scheme began, manyof CIPFA’s apprentices have goneon to full-time work in accountancyor finance related roles, with mostcontinuing employment with theirhost employers.

For more information aboutCIPFA’s Finance ApprenticeshipScheme contact the Apprenticeshipsteam at [email protected] call 0121 200 0990. Seewww.cipfa.org/apprenticeships.

More accountants shut up shop

FRC guidance doubted

The number of accountancy firms in the UK has fallen from 6,962 to6,622 over the last 12 months, says new research. As theprofession continues to consolidate, the LDF survey foundthat the total number of firms has dropped a whopping41% since 2002. It found that small and medium-sizedpractices appear to be merging in order to compete withlarger firms by reducing administrative costs in order tocreate more efficient business models and increase their profit margins.

Drilling down into the figures we discover that the number of solepractitioner accountants dropped 6% from 3,625 to 3,421.

Directors of the UK’s largestcompanies could be in danger offailing to meet their legalobligations when preparing annualaccounts, says the Local AuthorityPension Fund Forum (LAPFF).

The LAPFF has set the catamong the pigeons with a letter tothe FTSE 350 companies, whichtells them they should disregardguidance and statements from theFinancial Reporting Council (FRC).It believes that central figures inthe accounting profession “havebeen pretending that the law wassomething different to that set outin legislation”. It has even beensuggested that there may havebeen regulatory capture here.

The letter has been released inthe wake of the response of theHouse of Commons’ TreasurySelect Committee to the Bank ofEngland/PRA report into the failureof HBOS. The select committeehas told the FRC that it expectstransparency on why it has nottaken action against HBOS auditorsKPMG for signing off accounts withinadequate bad debt provisions,when total write-offs amounted to£53bn.

LAPFF believes this shows thereare many unanswered questionsabout the role of the auditors inbanks that collapsed.• The LAPFF represents assets ofover £175bn.

PQ Jan 16 p14 q9_Layout 1 08/12/2015 15:13 Page 14

Page 15: PQ magazine, January 2016

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Page 16: PQ magazine, January 2016

ENTERTAINMENT

1 Spectre, Skyfall and CasinoRoyale all starred Daniel Craig as007. What film is missing from thisroll-call?

2 Which band’s lead singer iscalled Paul Hewson and leadguitarist is called David Evans?

3 Which country won the 2015Eurovision song contest?

4 Who wrote The Night of theIguana, The Rose Tattoo and Caton a Hot Tin Roof?

5 In 2015, what was declared‘children’s word of the year’ by theOxford University Press?

6 Who played Turner in the filmMr Turner?

7 Known by an English namefollowing his arrival in London,which children’s fictional characterwas known as Pastuso?

8 On 24 May 2015 mathematicianJohn Nash died. What Oscar-winning film did he inspire?

9 What is the name of the starfishbest friend of SpongebobSquarepants?

10 What song was originallycalled the Chant de Guerre pourl’Armee du Rhin?

SPORT

11 In which year did England winthe Rugby World Cup?

12 Which horse won the 2015Grand National?

13 Who won the FA Cup in 2012?

14 Who was the last woman towin the BBC’s Sports Personality ofthe Year (excluding the 2015competition)?

15 Who became the first man everto win a gold at the World ArtisticGymnastics Championships?

16 How many players are there ina rugby league team?

17 Who was the last footballer ofthe year before Ronaldo and Messi?

18 Tyson Fury is the new WBO,IBF and WBA world champion, butwho holds the WBC belt?

19 Who was named captain of theInternational Cricket Council Testteam of the year for 2015?

20 In 2002, which country wasthe first football World Cup semi-finalist from outside Europe and theAmericas?

GEOGRAPHY

21 What is the highest mountainin Africa?

22 Which town shares its namewith the family name of the Earls ofDerby and the main town on theFalkland Islands?

23 Which of the following placesis furthest west – Edinburgh,Preston or Bristol?

24 In which large city would youfind a district called ‘Hell’sKitchen’?

25 Name the river that flowsthrough Baghdad?

26 Which popular clothingmaterial originated in the Frenchcity Nimes?

27 What is the largest natural lakein England?

28 Which African country liesdirectly north of Nambia?

29 The road to Mandalay is inwhich country?

30 Name the world’s largestdesert.

SCIENCE

31 Roommates LeonardHofstadter and Sheldon Cooper,both physicists, star in which USsitcom?

32 What is the hottest planet inour solar system?

33 What computer programminglanguage, created by Grace Hopperand others in 1959, was intendedfor use in commerce?

34 How many hearts does anoctopus have?

35 Which law states for everyaction there is an equal and

opposite reaction?

36 What is the chemical symbolfor tungsten?

37 What is the only rock thatfloats on water?

38 What word in maths is Latinfor pebble?

39 What animal gets its namefrom the Portuguese word forostrich?

40 What number comes next inthe Fibonacci series: 1, 1, 2, 3, 5?

A MIXED BAG

41 Which company is the world’sbiggest manufacturer of tyres?

42 Who is the Secretary of Statefor Education?

43 Which king of England had thelongest reign?

44 In which year was PrinceHarry born?

45 Who quit the News Quiz onRadio 4 to co-found a political partycalled the ‘Women’s Equality Party’?

46 ‘Chain’, ‘double treble’ and‘reverse half double’ are all termsuse in which handicraft, who’sname comes from the French wordhook?

47 Which two-word name of achain of holiday villages in the UKhave both words misspelt inEnglish?

48 At a VAT tribunal in 1991,were Jaffa Cakes ruled to be cakesor biscuits?

49 Coulrophobia is the fear ofwhat?

50 What is the nationality of Bankof England Governor Mark Carney?

Here it is, our much-loved AnnualBumper Quiz – and your chance towin one of three fantastic Beats Pillspeakers. Thanks must go to ourfabulous sponsors, the accountancybodies. Good luck!

16 PQ Magazine January 2016

PQ annual bumper quiz

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pq jan 16 p16 q9.qxp_Layout 1 10/12/2015 11:59 Page 2

Page 17: PQ magazine, January 2016

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017_PQ 0116_PQ 1209 000 07/12/2015 15:21 Page 7

Page 18: PQ magazine, January 2016

PQ Magazine January 201618

PQ Awards 2016BE COUNTED!BEST BY A DISTANCE

Time is moving on and we need yournominations for the PQ Awards 2016. Ifyou haven’t got an entry together yet

then you have a bit more time – we haveextended the deadline for entries to Tuesday 5 January. Judging will take place the followingweek, with the awards taking place on Tuesday23 February.

We are happy for you to nominate yourself forany of the awards, or you can put forwardsomeone you think doesn’t get the plaudits theydeserve. But we can’t give you a night to

remember unless we get that nomination form!All we need is 250 words on why you think yournominee should win, plus any supportingdocumentation. Please state clearly the categoryyou are entering.

You can download the application form directfrom our website, and once filled in send itdirectly to [email protected].

Or just put your entry in an envelope andsend it to: PQ magazine, 4th Floor, 142 CentralStreet, London EC1V 8AR. Remember, the newdeadline is Tuesday 5 January 2016. PQ

THE CATEGORIES

• PQ of the Year

• NQ of the Year

• Distance Learning Student of the Year

• Student Body of the Year

• Training Manager/WorkplaceMentor of the Year

• Accountancy Team of the Year

• Accountancy College of the Year – Public Sector

• Accountancy College of the Year – Private Sector

• Lecturer of the Year – Public Sector

• Lecturer of the Year – Private Sector

• Innovation in Accountancy

• Study Resource of the Year

• Accountancy Body of the Year

• Accountancy Personality of theYear

• Editor’s Special Award

• Online College of the Year NEW

• Best Use of Social Media NEW

You still have time to get your name on the PQ awards shortlist.In fact we have extended the deadline to Tuesday 5 January 2016

Esther Alum, above, won the ‘PQ’ in theDistance Student category last year. She wenton to land the AIA’s Student of the Year awardin the same year, making her a double winner!So she is twice a winner. Alum works forLambeth Living as a customer liaison officer,and distance learning was the obvious choicefor her. Our 2014 winner was AAT DonnaSmith, pictured top right, while the winner theyear before that was Alina Stahie, bottom right

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Page 19: PQ magazine, January 2016

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Page 20: PQ magazine, January 2016

20 PQ Magazine January 2016

PQ salary survey

Karen Young provides her insight into the newlyreleased Hays UK Salary & Recruiting Trends 2016 guide.Check out the salary checker too!As organisations plan for increased business

activity in 2016 the demand for part qualifiedaccountants to support finance functions

shows no sign of decreasing. The persistentcompetition for strong part qualified accountants,coupled with increased appetite for hiring, is placingpressure on employers to increase salaries and reviewother benefits to attract and retain the best talent.

Analysis of salary data in the Hays UK Salary &Recruiting Trends 2016 report shows that partqualified accountants received, on average, a 2%salary increase in the past year, above the overallaverage pay rise for UK finance professionals (1.7%).An accompanying survey of over 4,000 financeemployers and employees revealed further good newsfor PQs as 75% of finance employers tell us they planto increase salaries again in the coming year.

Our research found that despite receiving higher salary increases than their peers inother finance roles, PQs are more likely to be unhappy with their salaries and to haveasked for a pay rise. Just over half (55%) of part qualified accountants say they areunhappy with their pay and 35% had asked for a pay rise recently, but only 20% ofthese were successful. However, this number was higher than the average for thefinance profession, of whom 30% had asked for a pay rise but of those just 16% weresuccessful.

Increasing business confidence and finance leaders’ plans to recruit in the comingyear will see continued demand for PQs. Half of respondents to our survey stated theyanticipate moving jobs in the coming year and as competition for staff increases, thisis putting pressure on employers as they compete for the best talent. As PQs told usthey rate their future career opportunities and development as equally important astheir salary and benefits when moving roles, employers must place a focus onsupporting employees with their development if they are looking to attract and retainthe best staff.

For you, my recommendations are to create an open dialogue with your employerand put a career plan in place and get involved in different or new project work.Employers can’t risk getting caught up in the day-to-day running of things andoverlook the long-term development of skills and motivations of staff or they will runthe risk of losing their best people in the short and medium term and have longerterm succession plan challenges. • Karen Young is a Director for Hays Accountancy & Finance. See page 32 forKaren’s article on how to negotiate a pay rise

About Hays UK Salary and Recruiting Trends 2016: Data is compiled using datagathered during 2015 from Hays offices across the UK, based on job listings, job offersand candidate registrations. Survey responses from 20,000 employers and employeesfrom organisations of all sizes throughout the UK. For further information visit:www.hays.co.uk/pq

PQ

North West

Salary range TypicalAAT Studier £16,000-£24,000 £20,000ACCA PQ £25,000-£30,000 £27,500ACCA Finalist £30,000-£35,000 £30,000CIMA PQ £22,000-£26,000 £24,000CIMA Finalist £25,000-£30,000 £28,000CIPFA PQ £22,000-£26,000 £24,000CIPFA Finalist £25,000-£30,000 £28,000ACA PQ £19,000-£23,000 £21,000ACA Finalist £24,000-£27,000 £27,000

Scotland

Salary range TypicalAAT Studier £18,000-£23,000 £20,000ACCA PQ £22,000-£28,000 £26,000ACCA Finalist £27,000-£33,000 £30,000CIMA PQ £25,000-£32,000 £27,000CIMA Finalist £27,000-£35,000 £29,000CIPFA PQ £17,000-£21,000 £19,500CIPFA Finalist £25,000-£35,000 £28,000ACA PQ £23,000-£30,000 £24,000ACA Finalist £26,000-£32,000 £26,000

What areyou worth?

South West

Salary range TypicalAAT Studier £16,000-£25,000 £22,500ACCA PQ £24,000-£30,000 £28,000ACCA Finalist £28,000-£35,000 £32,000CIMA PQ £24,000-£32,000 £28,000CIMA Finalist £28,000-£35,000 £32,000CIPFA PQ £24,000-£30,000 £24,000CIPFA Finalist £28,000-£35,000 £30,000ACA PQ £24,000-£30,000 £26,000ACA Finalist £28,000-£35,000 £28,000

West Midlands

Salary range TypicalAAT Studier £18,000-£24,000 £21,000ACCA PQ £22,000-£26,000 £24,000ACCA Finalist £26,000-£32,000 £30,000CIMA PQ £22,000-£30,000 £27,000CIMA Finalist £28,000-£37,000 £33,000CIPFA PQ £20,000-£27,000 £24,000CIPFA Finalist £23,000-£30,000 £27,000ACA PQ £23,000-£27,000 £25,000ACA Finalist £26,000-£30,000 £29,500

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Page 21: PQ magazine, January 2016

PQ Magazine January 2016 21

salary survey PQ

London

Salary range Typical AAT Studier £23,000-£27,000 £25,000ACCA PQ £28,000-£35,000 £34,000ACCA Finalist £37,000-£44,000 £40,000CIMA PQ £28,000-£36,000 £35,000CIMA Finalist £37,000-£45,000 £42,000CIPFA PQ £23,000-£30,000 £28,000CIPFA Finalist £28,000-£36,500 £33,000ACA PQ £28,000-£31,000 £30,000ACA Finalist £28,500-£32,500 £32,000

North East

Salary range TypicalAAT Studier £15,000-£19,000 £18,000ACCA PQ £23,000-£30,000 £26,000ACCA Finalist £26,000-£35,000 £31,000CIMA PQ £23,000-£30,000 £26,000CIMA Finalist £28,000-£35,000 £30,000CIPFA PQ £20,000-£28,000 £24,000CIPFA Finalist £28,000-£35,000 £31,000ACA PQ £22,000-£27,000 £26,000ACA Finalist £25,000-£33,000 £30,000

South East

Salary range TypicalAAT Studier £16,000-£25,000 £20,000ACCA PQ £30,000-£36,000 £34,000ACCA Finalist £38,000-£42,000 £40,000CIMA PQ £30,000-£36,000 £35,000CIMA Finalist £40,000-£45,000 £42,000CIPFA PQ £24,000-£30,000 £28,000CIPFA Finalist £28,000-£35,000 £33,000ACA PQ £23,000-£29,000 £27,000ACA Finalist £27,000-£32,000 £31,000

Yorkshire & the Humber

Salary range TypicalAAT Studier £16,000-£21,000 £18,000ACCA PQ £22,000-£27,500 £25,000ACCA Finalist £27,500-£34,000 £30,500CIMA PQ £21,000-£28,000 £25,000CIMA Finalist £27,500-£40,000 £31,000CIPFA PQ £22,000-£26,500 £24,500CIPFA Finalist £27,500-£33,500 £29,000ACA PQ £20,000-£26,500 £24,500ACA Finalist £25,000-£28,500 £27,500

East Midlands

Salary range TypicalAAT Studier £18,000-£24,000 £21,000ACCA PQ £22,000-£26,000 £24,000ACCA Finalist £26,000-£32,000 £30,000CIMA PQ £24,000-£30,000 £27,000CIMA Finalist £28,000-£37,000 £32,000CIPFA PQ £20,000-£27,000 £24,000CIPFA Finalist £23,000-£30,000 £27,000ACA PQ £23,000-£27,000 £25,000ACA Finalist £26,000-£30,000 £29,500

East of England

Salary range TypicalAAT Studier £17,000-£22,500 £19,500ACCA PQ £23,500-£29,000 £26,500ACCA Finalist £29,000-£36,500 £32,500CIMA PQ £23,500-£29,000 £26,500CIMA Finalist £29,000-£36,500 £32,500CIPFA PQ £21,000-£30,000 £26,000CIPFA Finalist £24,000-£38,000 £32,500ACA PQ £17,500-£25,000 £23,500ACA Finalist £25,000-£34,000 £30,500

pq jan 16 P20-21 q9_Layout 1 08/12/2015 15:18 Page 3

Page 22: PQ magazine, January 2016

PQ Magazine January 201622

PQ AAT awards and results

RESULTS IN

Level/Assessment name Short Code UK Int'l WorldL1 Access AA 95.3% 94.4% 95.3%L1 Bookkeeping and Accounts BKAC 79.4% n/a 79.4%L1 Computerised accounts COPA** 93.4% n/a 93.4%L1 Computerised Payroll Administration CPYA** 75.8% n/a 75.8%

L1 Spreadsheets software SPRS 90.9% n/a 90.9%L2 Applied Business Communications and Personal Skills ABPS 52.8% n/a 52.8%

L2 Accounting skills to run your business ASYB* 100.0% n/a 100.0%

L2 Basic costing BCST/BCCG 94.5% 86.5% 93.8%L2 Control accounts, journals and the banking system/Basic accounting II CJBS/BAII 87.0% 79.0% 86.3%

L2 Computerised accounting CPAG/CMPA 95.0% 70.9% 92.6%L2 Computerised Payroll Skills CPSK 76.3% n/a 76.3%L2 Developing Study Skills DSSK 85.9% n/a 85.9%L2 Introduction to Payroll Systems IPSY 44.5% n/a 44.5%

L2 Processing bookkeeping transactions/Basic accounting I PBKT/BAI 89.9% 83.0% 89.3%

L2 Spreadsheet Software SPSO 83.8% n/a 83.8%L2 Work effectively in accounting and finance WKAF/WEAF 92.5% 79.3% 91.2%

L3 Accounts preparation (I) ACPR/API 60.7% 45.9% 58.9%L3 Cash management CMGT 62.2% 37.4% 45.5%L3 Computerised accounting COAG* 86.7% n/a 86.7%L3 Costs and revenues CSTR/CRS 81.1% 61.1% 78.2%L3 Prepare final accounts forsole traders and partnerships/Accounts preparation II FSTP/APII 83.7% 68.2% 81.6%

L3 Indirect tax ITAX/ITX 80.6% 57.6% 76.9%L3 Professional ethics PEAF/PETH 73.6% 57.5% 71.2%L3 Spreadsheet software SDST/SPSW 82.9% 66.2% 81.0%L4 Budgeting BDGT/BGT 71.4% 46.1% 66.9%L4 Business tax BTAX/BTX 61.9% 42.4% 59.7%L4 Credit control CRDC/CRMC 76.0% 39.1% 69.8%L4 Cash management CSHM 61.1% 13.0% 53.7%L4 External auditing EXTA/EXA 84.7% 39.6% 58.5%L4 Financial performance FPFM/FNPF 58.6% 35.0% 54.9%L4 Financial statements FSTM/FNST 66.5% 48.7% 64.0%L4 Internal controls and accounting systems ISYS/ICAS 89.4% 87.1% 89.1%

L4 Personal tax PTAX/PTX 47.4% 70.6%** 47.5%* Less than 20 assessments (ASYB = 5, COAG = 15)** Less than 100 assessments

London Achievementawards: all the action

These results are for the year-ending 30 June 2015 andshow, the AAT says, that for

Level 1 there were some “reasonablystrong performance”.

Two of the papers that form part ofthe Level 2 Diploma in Accountingand Business Skills stick out –perhaps for the wrong reasons! ABPShas a 52.8% success rate and IPSYis even worse, at 44.5%.

Level 3 ACPR sitters seem to

struggle with task 4 (preparing a trailbalance and reconciliation) and task6 (knowledge of good accountingpractice).

As for Level 4 personal taxstudents, they appear to be gettingworse in some tasks, hence the47.4% pass rate.• The next set of pass rates will bepublished in mid to late March 2016and will cover the year ending 31 December 2015. PQ

You just can’t help but smile at the AAT LondonAchievement Award Ceremony. More than just a free buffetand a commemorative certificate, it really is a chance tocelebrate your success!

pq jan 16 p22 q9.qxp_Layout 1 08/12/2015 15:21 Page 1

Page 23: PQ magazine, January 2016

Working in Tax?Considering studying

for the highest level tax

qualification in the UK,

the Chartered Tax Adviser

(CTA) qualification?

The CTA is a Mark of Excellence

and is recognised and respected

internationally as a standard of technical

excellence and professional integrity.

Accountancy qualifications provide

eligibility to register as a CTA student.

Find out more about the benefits of the CTA and to register as a CTA student visit: www.tax.org.uk/workingintax

023_PQ 0116_PQ 1209 000 10/12/2015 11:43 Page 7

Page 24: PQ magazine, January 2016

PQ Magazine January 201624

PQ ICAS study apps

Five top apps to makeyour study plain sailingYou can bet that the majority of

accountancy students have asmartphone or a tablet device.

We are all familiar with apps such asWhatsApp, Instagram and, dare I say it,Angry Birds. But did you know that thereare lots of apps out there that couldmake life a whole lot easier for you?We’ve done the research for you andcreated our list of the top five studentapps. And here they are…

SelfControl .It’s all too easy to get distracted whilestudying. Having a quick look onFacebook or YouTube, or a moocharound Amazon or ASOS, can quicklyturn into a whole hour of lost time. If thissounds like something you do, then theSelfControl app can help. It lets you blockyour own access to distracting websites.All you need to do is set the period oftime you want to block them for and addthe relevant sites to your blacklist. Untilthe timer expires you won’t be able toaccess those sites and you’ll stay morefocused on studying. Harsh, but effective!

Examtime .Accountancy students have a great dealof material to get through, so it can be achallenge to keep on top of everything.

Although your main notes should alwaysbe your first port of call for revisionpurposes, some students find it helpful tomake their own notes. That’s where theExamtime app can help. Its main featuresallow you to create your own notes, mind-maps, flashcards and quizzes, which youcan use to input the things you want totry to remember. A further bonus of thisapp is that it allows you to create yourown revision timetable – something wehighly recommend. We will be bringingyou more guidance on study timetablessoon. As an online app, you can access itanywhere there’s an internet connectionand you can easily share it with friendson your course.

1Password ..It’s more than likely that you’ll have rathera lot of passwords that you need toremember – not just your personal ones,but work-related ones for various systems,documents and spreadsheets as well. Tostop you using the same password foreverything, 1Password is an app whichkeeps all your passwords safe and yourdata secure. All you need to remember isone master password and you’re good togo. The app will also help you create astrong password which isn’t ‘password’,your birthday or your cat’s name!

HP 12c calculator .There are lots of different calculator appsavailable, but the HP 12c FinancialCalculator app is one of the best on themarket for budding accountants andfinance professionals. Why? Well, thetraditional HP 12c financial calculator isthe industry tool of choice for manyaccountants and this app reflects thecalculator’s layout to a tee (right down tothe original gold-brown/orange colourscheme of the original calculator. Inportrait mode, the app shows the fullrange of mathematical calculatorfunctions. Switching to vertical modegives you a simplified basic RPN oralgebraic calculator.

One tip here – ensure that you havepractised using the actual calculator youare taking into the exam, so you knowyour way around it.

Accounting glossary .It’s fair to say that you’ll need to know agreat many different accountancy terms,not just when you’re a student but afteryou qualify as well. Covering everythingfrom ‘assets’ to ‘working capital’, theAccounting Glossary app contains morethan 500 definitions of key accountancyterms and phrases organised insearchable alphabetical order. Few of ushave photographic memories, so this appis ideal for when you need a quickreminder. • Stef Scott, Senior Digital Editor, ICAS

PQ

ICAS’ Stef Scott rounds up the best five apps for CA PQs, from apps that helpyou stay focused while studying to a handy guide to accounting terms

The new ICAS CAstudent blog canbe found athttps://www.icas.com/education-and-qualifications/ca-student-blog

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Page 25: PQ magazine, January 2016

25PQ Magazine January 2016

international standards PQ

Martin Jones takes a musical look at the not-so-straighforward world of lease accounting

This project is not the walk in the proverbial park it first seems. Thebasic premise is a doddle. Current lease accounting allows financelease accounting where we recognise an asset and liability and

operating lease accounting where we recognise neither. But obviouslyoperating lease accounting is wrong. Clearly an operating lease is a contractand confers contractual obligations. These are liabilities and should berecognised. Clearly an operating lease is a contract and confers the right touse an asset. This is itself an asset and should be recognised. So the wayforward is to have finance lease accounting only. So far so easy.

Ed Sheeran is my hero and so I am going to suggest we imagine thatyou and I are going to hire his famous little guitar from him for three yearsat £1,000 a year in arrears. Under current reporting the lease will bedesignated a finance lease or an operating lease depending upon risksand rewards. If we think the risks and rewards are substantially with usthen we record a finance lease. If not then we record an operating lease.This decision is essentially trying to figure out whose guitar this is insubstance. Is it ours or Ed’s? I am going to assume an implicit interest rateof 10% because everybody loves 10%. Let us see what happens if weassume an operating lease (assume the guitar is effectively Ed’s):

Let us now see what happens when we assume a finance lease (assumethe guitar is effectively ours). The discounted present value of £1,000 forthree years at 10% is £2,487. That is easy enough – you just plug threepayments of £1,000 into a discounted cash flow and out pops the £2,487.To get the asset below you lop off £829 in depreciation each year. To getthe year end liabilities you add 10% interest to the opening figure and lopoff £1,000 for each year end payment.

Do you see that the total cost remains the same regardless of thedesignation? But the picture at the end of year one is radically different.

And, of course, you have figured out that under a simple proposal torecognise exclusively finance lease accounting then only the second tablewould be available and there would be no need to think about risks andrewards. This makes perfect sense to me. Regardless of whose guitar thisis, we can assert that we have the right to use the guitar for three yearsand the obligation to pay three payments of £1000. We have an asset anda liability.

I am a little afraid to tell you this but… the above represents only part ofthe story. The above represents the original proposal. The current proposalis far more messy. The current proposal is to do exactly the above whenthe lease contract is for ‘property’ (type A). But Ed’s guitar is not aproperty. Under the current proposal the guitar would qualify as ‘otherstuff’ (type B). The result is a hybrid finance lease accounting thatrecognises the liability honestly but recognises the costs like an operatinglease on a straight line basis. The numbers are below and would beachieved by a separation of the b/s from the p/l.

Actually, the above is my simplified interpretation of the exposure draft(ED). Suffice to say the feedback to the IASB’s current ED is thatcommentators say it is too complex. So the IASB are considering goingback to their original proposal to have simple finance lease accountingexclusively for all. And as for the other Ed and his guitars... have you evertried one of his signature baby Martin guitars in a guitar shop? They arenot very good frankly, and give me all the more reason to marvel at theamazing sounds he manages to make live. • Martin Jones is a lecturer at LSBF

PQ

THINKING OUT LOUD

Year end one Year end two Year end three Total £ £ £ £Asset 0 0 0 0Liability 0 0 0 0 Operating cost (rental) 1,000 1,000 1,000 3,000

Total costs 3,000

Year end one Year end two Year end three Total £ £ £ £Asset 1,735 909 0 0Liability 1,735 909 0 0 Operating cost (rental) 1,000 1,000 1,000 3,000

Total costs 3,000 Year end one Year end two Year end three Total £ £ £ £Asset 1,658 829 0 0Liability 1,735 909 0 0 Operating cost (depreciation) 829 829 829 2,487

Financing cost 248 174 91 513(interest)

Total costs 3,000

PQ Jan 16 p25 q9.qxp_Layout 1 10/12/2015 12:04 Page 2

Page 26: PQ magazine, January 2016

26 PQ Magazine January 2016

PQ understanding gearing

When an exam questionmentions gearing it is all tooeasy to only consider

financial gearing (that of interest bearingdebt divided by equity – or similar!). Thetruth is, operational gearing is a veryequal partner and to have a fulldiscussion about gearing then bothoperational and financial must beconsidered.

Operational gearing analyses theproportion of operating costs that arefixed in nature. If a company has highoperational gearing, then a highproportion of operating costs are fixed.

There are various ways of calculatingoperating gearing (as there are forfinancial gearing). The one you choose inthe exam depends upon whether there isa comparative or not. If there is anindustry average comparative then youshould calculate your gearing so as tomatch the comparative, otherwise thechoice is yours (as long as you specifywhat you have done in words as well asnumbers).

For me, the most intuitive calculation isas follows:

Operational gearing = Operating fixedcosts/Total operating costs x 100%

(by operating costs we mean cost of salesplus overheads – basically all costs aboveoperating profit on the statement of profitor loss. Sometimes the question will be asexplicit as to say variable costs and fixedcosts on the P&L).

So what is the problem with highoperational gearing?Well, high operational gearing means thatthe business’ operating profit is sensitiveto changes in sales volume. Put simply, ifsales volume drops, revenue drops andso operating profit drops quickly as thefixed element of operating costs do notchange. Equally, if sales volume rises,revenue rises and operating profit risesquickly as fixed operating costs do notchange. High operational gearing leads to‘variability or volatility of operating profitdue to changes in sales volume’.Operating gearing is therefore a measureof ‘business risk’.

What is the connection betweenoperational gearing and financialgearing?Think of a basic statement of profit orloss:

Matt Holden on what you need to know about operational & financial gearing

The variability of gearing

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If operational gearing is high thenoperating profit can be variable (orvolatile) due to high business risk.

This has to have an impact upon thefinance decision that management make.If they are considering introducingadditional debt finance to the capitalstructure (ie increase financial gearingand so financial risk), then the financecharges currently showing on the P&Lwill increase. This in turn will decrease akey financing ratio 'interest cover' (shown

above). Interest cover is often includedwithin covenant agreements the businessmakes with providers of debt finance andis often set at a minimum level. Ifminimum interest cover is breached thenthis can lead to the finance beingrecalled by the lender.

Therefore, if the business already hashigh operational gearing and so volatileoperating profit, then the business riskwill already be putting strain on theminimum interest cover covenant.

A decision to raise further debt financewill only add to the pressure ofmaintaining the interest cover above thepre-determined minimum.

In other words, the decision to raisedebt finance will be adding additionalfinancial risk to a business with highbusiness risk.

This does not mean debt financeshould not be considered but in thereport to management, it is the role of thewriter to make management aware of theconsiderations they should be making inall key financial and business decisions.

In conclusion, if you are given theopportunity in the exam, by way of theinformation you have been given, ensureyou mention both operational andfinancial gearing and in so doing,mention business and financial risk –both are equally important. • Matt Holden, Reed Business School

PQ

$000Revenue XCost of Sales (X)Gross Profit XOverheads (X)Operating profit X(or PBIT) Finance costs (X)PBT XTax (X)PAT XNote: Dividends (X)Retained Profit XX

Business risk

Finance risk

Interest cover(PBIT/Finance cost)

PQ Jan 16 p26 q9.qxp_Layout 1 10/12/2015 12:04 Page 2

Page 27: PQ magazine, January 2016

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027_PQ 0116_PQ 1209 000 10/12/2015 11:44 Page 7

Page 28: PQ magazine, January 2016

PQ Magazine January 201628

PQ making partner

Plotting yourclimb to thetop of the tree

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You’ve started your career inaccountancy and makingpartner may seem a long

way off. So how do you rise up theranks? In ICAEW’s latest insider’sguide, ‘Get off to a Flying Start’,partners share their top tips, ICAEWExecutive Director Sharron Gunn toldPQ. She said: “You don’t wake upone morning and decide you want tobe a partner. You must plan for yourdevelopment from the moment youstart training. It can seem daunting,but ambition really sets you apartfrom the rest of your colleagues. Itwill be noticed by your employer,who may have already spotted you

as potential partner material.“It’s not just technical knowledge.

It’s about winning people’s trust andhaving good communication skills.Your clients will value the breadth ofyour experience, which means youneed to grasp opportunities that youcan’t leave to chance. Take yourprofessional development in yourown hands.”

1. Ask yourself: why?Becoming a partner means youcease to become an employee andinstead have a stake in the business.It comes with a raft of responsibilitiesso ask yourself: what is motivating

me? Talk to current partners andask what processes it took forthem to get there – every firm isdifferent. Be honest about yourcapabilities and wants and thencommunicate them to others.

2. Have self-awarenessIt’s important to understand yourskills, strengths and values. You’llneed to demonstrate upfront thatyou have the potential to becomea partner. But knowing what tofocus on is a start – and werecommend looking at yourpersonal effectiveness ‘tool-bag’.So remember to: • Make time for activities thatmaximise your value.• Take time to understandpriorities for the business, yourclient and yourself.• Not get bogged down with short-term deliverables and learn todelegate.• Communicate with impact andraise your profile.

3. Business and personal caseThere’s no one-size-fits-all asselection processes differ acrossfirms. It’s important to get clarityon the process by speaking to thepartner who will be supporting youthrough the process. You mustthink about the commercial needfor the new partner role and whyyou have the skills to deliver.

4. Winning new businessThis is often the biggest skillaspiring partners have to develop.As a partner you’ll be defined asthe finder who brings work in, theminder who coordinates activities,the binder who brings peopletogether and a grinder whodelivers the work. You’ll be

measured on your financialperformance, which will includefee targets and new businessbrought into the practice. You’lltherefore need to increase yourlevel of service and your clientbase. You must also be a crediblevoice and demonstrate a muchbroader range of knowledge andexperience.

5. Master internal relationshipsYou will need to gain the trust ofyour fellow partners to take upreferral opportunities so it’sessential to build a strong networkwith your peers, too. Being apartner doesn’t mean you make alldecisions by yourself; you mustlearn to consult and shareknowledge. So think about: • Volunteering to host events.• Spending time in other offices.• Having a mentor.• Have a contact for everyspecialism.Not all partnerships are perfect,and politics are given at any pointin your career. Remember, youcan’t change the behaviour ofothers, but you can lead by yourown example. Be consistent andstick to your values.

6. Acting the partWhole books are written aboutleadership, but we asked partnershow to define their role as aleader. Their responses fell intothree categories:• Vision and strategy.• Leadership behaviours.• A decisive approach.

You can read a lot more on this bygetting a copy of the ‘Get off to aFlying Start’ report (visitwww.icaew.com/dlip). PQ

The ICAEW has published a new guide packed withadvice on how you can one day become a partner.Here we pick out some of the highlights

pq jan 16 p28 q9.qxp_Layout 1 08/12/2015 15:47 Page 1

Page 29: PQ magazine, January 2016

29PQ Magazine November 2015

AAT exams PQ

LET’S GET TECHNICAL

Iwas in class the other day and wewere calculating the total cost of 10units that had a purchase price of

£5 each. At least half of my class pickedup their calculators! After mocking themmercilessly for five minutes I remindedthem that as wannabe accountants whowould be spending their careersrecording, analysing and communicatingfinancial information they needed to becomfortable with figures, numbers andbasic calculations.

A common cause of failure in many ofthe AAT assessments is that studentslack the basic mathematical ability todeal with simple numbers.

Let’s look at a few of the situationswhere a basic level of mathematicalcompetence is required…

Calculating averages .When businesses are dealing with largevolumes of production involving largeamounts of resource and large costs, it isuseful to be able to break these downinto averages. This allows us to considerthings on a smaller scale.

For example, if we produced 100,000units using 200,000 kg of material thenthe average amount of material per unitwould be 200,000 kg/100,000 units = 2kg per unit. This can be useful for:• Helping to plan resource requirements.If we are going to produce 2,000 unitsnext week then we need to purchasearound 4,000 kg of materials.• Identifying unit production costs. Ifmaterial costs £5 per kg then the totalmaterial cost per unit would be £10.• Setting prices. Once we have workedout the average costs for making a unitwe can add a margin to set a profitableprice.

The main thing to be careful aboutwhen calculating averages is that youdivide the two figures ‘the right wayaround’. A common mistake is thatstudents divide them ‘the wrong wayaround’ – that is they work out100,000/200,000 = 0.5 kg per unitrather than the correct 2 kg per unit.

Have a go at these examples.• Gohere Railways provide meals for theirpassengers. They made a total of1,000,000 meals using a total quantity of250,000 kg of ingredients. What is theaverage usage of materials per meal?

It sounds blindingly obvious,but your maths skills could letyou down if they are not upto scratch, says leading tutorGareth John

• Runup Ltd spent £210,000 on700,000 kg of materials. What is theaverage cost per kg of their purchases?• Walkdown Ltd made 200,000 units in40,000 labour hours. What was theaverage time taken to make each unit?• Strollaway plc paid staff £428,750 for35,000 hours of work. What was theaverage wage rate per hour?

Percentage changes .Percentages are a useful way to look athow figures are changing. If I tell you thatthe price of a car has changed from£13,500 in year 1 to £14,850 in year 2,then we can see that the price has risenbetween the two years, but it is notimmediately clear by how much. Using

percentages (‘per cent’ means ‘parts of ahundred’) can make this much clearer.

To work out the increase as apercentage we can first work out theincrease in pounds. £14,850 – £13,500= £1,350. We normally work outpercentage changes based on thestarting figure, so in this case we wouldwork it out as £1,350/£13,500 x 100 =10%.

Another way to work this out is tocalculate £14,850/ £13,500 which gives1.1 which is ‘1 + the percentage increaseas a decimal’ or ‘1 + 0.1’ or ‘1 + 10%’.As ever make sure you divide the twofigures ‘the right way around’ with thestarting figure at the bottom.

Again, test yourself.• A cost has increased from £80 to£100. What is the percentage increase inthe cost?• A cost had fallen from £150 to £120.What is the percentage decrease in thecost?• A price has risen from £18 to £20.What is the percentage increase in theprice?• The interest rate on our bank loan isincreased from 10% to 13%. What is thepercentage increase in the interest rate?

Margin and mark-up info .The relationship between costs andprices is a critical one in any business asit determines the profit (or loss) that ismade.

Margin is short for ‘margin on sales’,so the profit element is shown as apercentage of the sales value.

Mark-up is short for ‘mark-up on cost’so the profit element is shown as apercentage of the cost.

Here are a few examples.• If the sales price is set at £190 and thecompany has a target profit margin of40% what is the maximum target costthat they can afford to incur?• If a company has a target profit marginof 25% and spends £150 producing aunit what must the selling price be setat?• If the sales price is set at £190 and thecompany uses a mark-up of 40% what isthe production cost of the product?• If a company spends £150 producing aunit and sets the price to give a mark-upof 25% what will the selling price be?

Once you have had a go at the variousexamples in this article you can watchme talk through my answers atwww.firstintuition.co.uk/category/aat • Gareth John is a tutor/director withFirst Intuition and helps to managetheir AAT distance learning programme.He was PQ’s Accountancy Lecturer ofthe Year in 2011

PQ

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• Pass rate: 47%• Technical difficulty: 10/10• Weighting of calculations: 0–10%• Weighting of discursive elements: 90%• Exam technique: 10/10

The syllabus .The P3 syllabus builds on core knowledge thatstudents have garnered from various earlier Pand E papers. Although there are also new topicsand techniques to learn, the application of thesyllabus is virtually limitless. Under the new andold syllabus, P3 has always been an exam thathas drawn heavily from examples of riskmanagement in the real world. As a result, it isdifficult to draw distinct boundaries around asubject area. Once a topic has been learnt, it iscritical to think of how it affects real organisations.

P3 is broken down into five key areas:A Identification, classification andevaluation of risk (20%) Students of P3

will be familiar with the CIMA risk managementcycle. This first area of the syllabus, effectivelycovers the first three parts of this cycle, from riskidentification through to broad risk strategiesusing TARA. It also begins to look at what makesa good control system, such as understandingwhat ‘control environment’ is or what one wouldexpect to see on a risk report.

Finally, the ethical dilemmas associated withrisk management are evaluated.

While these topics are not hard for students tounderstand, their application can be difficult. Forexample, PQs may be given a lengthy scenario (acouple of paragraphs) that requires them toidentify the three most significant risks, or suggestthe most appropriate risk response. Students oftenfind it difficult to ‘settle’ on an answer and aresurprised by the number of questions they ‘flag’(see below for more on this). Question practice isthe key to becoming confident with suchquestions, on the day on the exam.BResponses to strategic risk (20%) This

section of the syllabus is very broad:• Business unit control including topics such asbalanced scorecard, transfer pricing (which hasmoved from P2), lean systems, big data and allaspects of performance management systems(including performance related pay).• The risks (and responses) regarding ITdevelopment and IT systems.• The risks of unethical behaviour and applyingCIMA’s Ethical Code.• The risks associated with poor governancestructures and how Corporate Governance Codesaim to reduce those risks.

Students will be familiar with many of thetopics listed above from previous studies.However, it is likely that application to a scenarioagain will be required. For instance, it is notenough to know what the balanced scorecard is.Students may need to choose the four mostappropriate measures suggested by anorganisation implementing the balancedscorecard, that may help control performanceagainst key objectives.

CInternal controls to manage risk(20%)This syllabus area evaluates the

appropriateness of control systems in managingthe organisation, through looking at:• Management accounting controls systems.• How controls operate in the real world: HR,sales, warehouses, shops, treasury, IT, etc.• Performance target setting.• It also looks to evaluate the essential featuresof internal controls systems.• The measures used to minimise fraud.• The role of the risk manager.• Purpose and features of good internal controlsystems in the achievement of the organisation’sobjectives.• The role of internal audit.• The effectiveness of the internal audit process.

Students are most likely to get their worstscore in this syllabus area (and not in financialrisk as most expect!). Students do not tend tohave “first-hand” experience in this area,especially audit. DManaging risks associated with cash

flows (20%) This covers financial risk:• Political financial risk.• Credit risk.• Interest rate risk.• Currency risk.

This area of the syllabus can be technicallydifficult. However, students should not spend adisproportionate amount of time learning thecalculations. Discursive questions in this syllabusarea and the next, outweigh the number ofnumerical questions.EManaging risks associated with capital

investment decisions (20%) This coversrisks associated with capital investmentappraisal:• WACC.

• Certainly equivalents.• Real options.• Sensitivity analysis around project NPVs, forinstance, what changes would make the projectno longer financially viable.• APV.

Although the above may involve calculations,this area of the syllabus includes discursivetopics such as stakeholder conflict managementand post completion audits.

Students should be familiar with thecalculations new to them in this syllabus area.However, they should be equally prepared to geta question requiring an IRR or NPV calculationssimilar to ones they would have seen at P2.

Sitt ing the P3 exam .The P3 exam, as with all the other exams at thislevel, is a mixture of multiple choice, multipleresponse and drag-and-drop style questions(among others). From student feedback, it wouldappear that a significant proportion of questionsare ‘select all that apply’. Note that there shouldbe no ‘fill-in-the-blank’ style questions wherestudents are required to type in text.

Exam technique is critical to passing P3. Sopay attention to the following advice when takingany CIMA OT exam:• Read the scenario carefully.• Read the instructions carefully.• Timing – students need to remember that theyhave 1.5 minutes per question.• Answer everything – there is no negativemarking in the P3 exam.• Study the entire syllabus – literally anythingcould form the basis of a question.

The P3 exam is almost a year old. Here arecomments from students who have experiencedthe exam and passed:“Be prepared to ‘flag’ a lot of questions”. This isa challenging exam – students have said they‘flag’ about 10 questions before they come to thefirst they can answer confidently. Flaggingquestions shows you are doing your own bit ofrisk analysis and treatment! It is not a sign ofweakness in your ability – it’s displaying yourability to make intelligent choices. View thequestions like different sushi on offer on aconveyor belt in a restaurant – they will comearound again and you can try again.“Ensure you know the ‘wordy’ bits of thesyllabus”. On average, students say they answeronly eight questions requiring calculations. “You will never know…” Students complaintheydo not feel a sense of ‘comfort’ in this exam, thatthey have got an answer right. From lower levelexams, under the old system, they were able tojustify their answer. This can no longer be done.Some are finding this disconcerting, stifling theirability to reach a decision on an answer. Havingconfidence to choose what you think is the mostlikely answer, and then to move on, is critical topassing. Students must practise exam questionsand review the specimen paper carefully (severaltimes) to develop this skill. • Maryla Stevenson, P3 tutor, Kaplan Financial

PQ

30

PQ CIMA P3 paper

PQ Magazine January 2016

Maryla Stevenson offers some topadvice on passing the extremelytough Risk Management paper

TIME TO TOUGHEN UP

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CIMA spotlight PQ

PQ Magazine January 2016

Flexibility is keyto new regime

Accountants have a long history withcomputers. The first computerisedspreadsheet appeared in the early

1960s. By the 1980s, Lotus 123 was IBM’s ‘killerapp’, generating $53m of sales in its first year,against a target of just $1m. According to techwebsite The Register, “the software that reallysold the business community on personalcomputing was spreadsheets”.

As a result, accountants abandoned paperand pen for keyboard and mouse years ago.Which is why CIMA felt it was logical for ourexams to do the same.

At the end of 2014, CIMA exams – like thoseof most other accountancy bodies today – tookplace two or four times a year, depending onwhere you lived. We had a wide range ofassessment centres, but some students still hadto travel a long distance to reach them. Andthose exams were filled out in traditional fashion– on a sheet of A4 paper.

In January 2015, after a long period ofplanning, development and testing, CIMAbecame the first accountancy body tocomputerise all of its core examinations. It hasbeen a huge change – and like all big upheavals,there have been some bumps along the way. Butlooking back a year after the move, we are proudof the new system, because it makes it easier forstudents to take, and to pass, their professionalqualification.

Two main benefits .Besides better reflecting the work environment,the computer-based system has two mainbenefits: students can sit exams whenever theywant, and in a much greater variety of locations.

We feel flexible timing is crucial. Students cannow progress through the qualification at theirown pace, taking exams when they feel that theyare ready. It’s now possible, theoretically, for anextremely determined student to sit all 12 examsin just eight months – a feat which, to our slightshock, one person has already achieved.

However, most students have the oppositeproblem – because of work or home pressures,they want the option to go slower as well asfaster. Now students preparing for objective testscan wait until they feel ready before schedulingtheir exam, at short notice, for whenever theywant. Equally, a student struggling to get time offwork can schedule their exam for the weekend.

As a result of flexible timing, pass rates haveincreased. Across all objective tests, theminimum number of students passing an examis 62% – a number we expect to rise further in2016.

The second big change is accessibility. CIMAexams can now be taken almost anywhere.

Exams on demand have proved to be a big success, says Steve Flatman

Calculator guidanceCIMA students are now allowed to take non-programmable calculators from a pre-approved listinto exams at Pearson VUE test centres.

This applies to CIMA Certificate in BusinessAccounting exams as well as both objective testsand case study exams for the CIMA ProfessionalQualification.

The following scientific calculators are permitted:• Casio FX models• Sharp EL-531

• Texas Instruments TI-30X• Hewlett Packard HP 10S or HP 300S+

These financial calculators are permitted:• Hewlett Packard – HP 10bII• Texas Instruments – TI BA II Plus• Sharp – Sharp EL733A• Casio – Casio FC 100V

An on-screen scientific calculator will also beprovided as part of the exam software. The examwill start with a 15-minute tutorial, where you willreceive advice on using the calculator and have anopportunity to practise using it.

Some CIMA students appear to find themselvestaking exams in the remotest corners of theworld; from just outside the Arctic circle inCanada, Ulaanbaatur in Monglia, to warmerclimes – Fiji, the Maldives and across theCaribbean. Since the new system was put inplace, CIMA students have sat exams in 1895different locations – an increase of over 700%compared with 2014.

This reduces a hidden cost of qualifying – theprice of getting to the exam centre. Previously, allAustralian students had to fly to Sydney to sittheir exams. This year Aussie students have satexams in 43 exams centres, located in 22 townsand cities across the country. Likewise, studentsin Germany used to have just two exam centresto choose from. In 2015, German CIMA studentshave sat exams in 39 different centres.

Even in the UK, students have taken new-styleexams in 329 centres spread across 177 townsand cities – from Elgin in Scotland to Penzancein Cornwall making it easier to take an examcloser to their home or place of work.

The system also opens up the slightlydispiriting option of taking an exam while onholiday, something one UK CIMA student chooseto do during his vacation to Goa, India.

We feel that the changes that we made to theexamination delivery approach has hugelybenefited our students in the first year of itsintroduction. We’re hugely grateful to thestudents who have sat the exams so far, andwish you all the best of luck with your studies in2016. • Steve Flatman is Director of Examinations atCIMA

PQ

Double check: acandidate has hisidentity verified at aPearson Vue examcentre

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32

PQ careers

PQ Magazine January 2016

PLANNING WILL PAY OFFKaren Young offers some adviceon that most important of skills –negotiating a pay rise!Over half of finance professionals are

unhappy with their salary, according tothe Hays UK Salary & Recruiting

Trends 2016 report, yet only a third asked for apay rise in the last year. Despite salaries for PQsincreasing by an average of 2%, many of youare dissatisfied with your pay. But only 35% ofyou asked for a pay rise in the past year and just20% were successful. With so few successfulpay rise negotiations taking place, it is importantto plan your approach carefully. Asking for a payrise can feel taboo, but it doesn’t need to be.Preparation is key, as you will need to present astrong business case to your employer to showthat you have added value to the organisationand deserve a pay rise.

If you are about to ask for a pay rise, here aremy do’s and don’ts for a successful negotiation:

WHAT TO DO• Know your worth – research the market so youknow what other employers are offering for yourlevel of experience and location. You can findonline salary guides and search for similar onlinejobs to help you do this.

• Build a business case – if you want a pay riseyou will need to prove your worth bydemonstrating and quantifying the value youbring to your organisation. Why not show anyevidence from your research to your employer?• Time it right – time your request in accordancewith regular pay and performance reviews orafter a big achievement. Planning is important;ultimately, this is a business decision and theright timing will increase your chances of asuccessful result.

• Consider other benefits – are there otherfinancial or non-financial rewards that you wouldaccept? Employers may offer training oradditional benefits instead of pay and some ofthese may be as valuable to you as a salaryboost at this stage in your career. • Be polite – however the negotiation goes, don’tforget to thank your boss for their time andconsideration.

WHAT NOT TO DO• Take it personally – stay calm and focused andtreat the discussions as you would any otherbusiness transaction.• Rush to a decision – you don’t have to agreeon the spot. Take time to consider youremployer’s offer before accepting.• Dismiss a lower offer – think about what offeryou would accept from your employer if they donot agree to your desired increase.• Think it is now or never – if your employer isnot willing to increase your salary now, makesure you set a date for another pay review.• Be lost for words – your employer is likely toquestion you about the reasons you deserve asalary increase, anticipate these questions andprepare your answers.

For more visit www.hays.co.uk/pq • Karen Young, Director, Hays Accountancyand Finance

PQ

“I am a certified bookkeeper and in 5 years’ time my business will be turning over £3.2m”

To find out if you could become a bookkeeper call

0845 060 2345www.bookkeepers.org.uk/PQ

“My company is A4G Bookkeeping

and Payroll LLP, I started 2 years

ago, employ 12 staff and am

on the GrowthAccelerator

programme.”

Jo Wood Managing Partner

A4G Bookkeeping and Payroll LLP

The Institute of Certified Bookkeepers

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PQ Magazine January 2016

careers PQ

33

The Joy of Tax: How a fair taxsystem can create a bettersociety by Richard Murphy(Bantam Press, £16.99)

So what is tax? Very early on inthis great book Richard Murphyprovides his own description,because he thinks the currentones won’t do: “In a democracywith a universal franchise thatprovides every adult with a rightto seek election, tax is thatproperty held in trust by anindividual or company that isdue to the state whose rightfuland legal property it is.”

He also tackles the questionof who should be shaping taxpolicy. He points out that to askburglars to both define the lawof theft and at the same time toshape public opinion on theissue because they are self-

proclaimed experts on thesubject would be by commonconsent to be consideredunwise! We should then takethe same view of the supposedtax specialists who expertise islargely based on their prowessin denying the state access toits rightful property, he says.

Murphy – many of whoseideas have been ‘adopted’ byLabour leader Jeremy Corbyn –believes tax must be taught inschools and universities. He is,quite frankly, amazed it is notalready happening. We really doall need to talk about it openly,and the fact we do not teach itis for him a national scandal.When he searched (in June2014) for a course inaccountancy he found 573courses at 122 universities.When he asked for a tax course

there was ‘nomatch’.

In essence,Murphy wants totax wealth andbelieves if thishappened then inheritance taxcould be abolished. This wealthtax charge would be progressiveand start at 1% per annum onportfolios worth more than £1m.This would not be charged onmain residences, family farmsand private business that wouldbe subject to capital gains tax.

That is by no meanseverything; you really do need totake a look at the book. It’s only250 pages long, but Murphymanages to challenge almostevery idea we have about tax inhis hugely readable tome. PQ rating 5/5 We commend theJoy of Tax to the House!

An 18-year-old member An 18-year working in the

UAE, Ramkumar Raman, looksset to become one of theyoungest-ever ACCAmembers if reportsare to be believed.A graduate of theIndian High School,Dubai, Raman(pictured) hascompleted his threeyears of qualified

work experience as well aspassing all his exams in June2015. ACCA Middle East hasrecognised him as the youngest

ACCA affiliate everregistered.

Stand out fromthe crowd

Wearing a splash ofcolour can make youlook more imaginativeand may even lead to

promotions and pay rises, says anew study. One in five 18 to 34year olds believe they landed apromotion because they worebright and colourful clothing. Thereasons seem two-fold. It seemswearing colour makes us feelmore positive about ourselves,and it gives others the impressionthat we are both confident andcreative. Despite this, one in fiveUK workers say they’ll stick toblack, white or grey.

In brief

The PQ Book Club: books you should read

QI have been working for thesame employers for five years

now and feel trapped. I want to breakout of the sector I have been workingin and some of the jobs I have seenadvertised are on an interim basisonly. Would this be a good way ofhelping to get me to where I want tobe? I have always had permanentjobs, so this would be a big step forme.

Jordan says: Moving from apermanent position into an interim

role is an important and very personaldecision. If job security is a priorityfor you, then it’s pretty much a non-starter. That said, ambitiousindividuals tend to move into a newrole (albeit internally) every 18months to two years; we have less jobsecurity in general now than in thepast; and demand for PQs continuesto gather pace. If you know of anyinterim workers within your personalnetwork it is well worth talking tothem in order to get a first-handunderstanding of the nature of thework. It could well be that, at somepoint in their career, they’ve faced asimilar decision.

It should be noted as well thatthere is more scope for an interim‘career’ at qualified level; interim rolesfor PQs tend to be ‘like-for-like’ hires,as opposed to specific project roles,so the scope for personal careerdevelopment is limited.

There will always be examples ofcandidates who move into interimroles and back into permanent work,and vice versa, but as we operateacross both permanent and interimdivisions we would advise cautionand patience. Finding the rightpermanent role is about identifyingwhat you really want out of a job,rather than just putting you forwardfor a handful of jobs, some relevant,some not. We’re here for much morethan that!• Got a problem at work, or worriedabout your career path? Contact PQmagazine with your ‘issues’ – [email protected] month: Jordan Dodds tacklesanother of your career quandaries

Think hard beforeyou give up asecure job, saysWalker Dendle’sJordan Dodds

YOUR CAREERPROBLEMS SOLVED– THANKS TO

Sally Siggers, 33, is a legal cashier based in Hampshire. She is currently studying forher ILFM (Institute of Legal Finance and Management) qualification and plans to studyCIMA. Sally has a degree in hotel and catering management from Surrey university

Life at the Bells Solicitors

What time does your alarmclock go off on a workingday? 7.10am.What’s the first thing you dowhen you get to your desk?Turn on my computer.What’s on your desk? Just theusual – computer, phone, in tray. Ihate a cluttered desk.What’s the best thing aboutwhere you work? The peeps.Where’s your favourite placeto go for lunch? Home.What (or who) can you seewhen you sit at your desk?The ladies toilet. I’m so lucky!Which websites are yourfavourites and why? Rightmove– I am nosey.Which websites do you usefor work? Justbanking, LandRegistry and Companies House.How many hours a week do

you spend in meetings? None(whoop!).What time do you leave theoffice? 2.15pm.How do you relax? Going for arun or just being with my friendsand family.What’s yourfavourite tipple?I don’t drink (Ithink I overloadedmy system when Iwas a student) so Earl Grey tea.How often do you take workhome with you? Never.What is your favourite TVshow? I know this is sad but I stilllove Home & Away. I found UnderThe Dome awesome and you can’tbeat The Great British Bake Off.Summer or winter? Winter, Ilove being able to get away withputting on a few extra pounds as

the layers cover it.Pub or club? Pub, so you canhear what people are saying. Justrealised how old that makes mesound.Who is your hero? My mum.

She was a young mumand when we were atschool she studied to gether qualifications tobecome a dietician. It’snever too late to try.

If you had a time machine,where would you go? Back towhen I was 17. I wouldn’t go touni, I’d invest in property andwork in a firm to gain accountancyqualifications.If you hadn’t chosenaccountancy, where mightyou be right now? Probablyrunning events – I do love foodand a good party.

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Commercial Finance Manager

Healthcare, West London

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Assistant Reporting Analyst

Private Equity, Surrey

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034_PQ 0116_PQ 1209 000 07/12/2015 15:30 Page 7

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hays.co.uk/pq

Hays specialises in part-qualified recruitment, working with

leading organisations to ofer you access to a wide range

of jobs across the UK. With many years’ experience recruiting

for accountancy and finance jobs, we currently have over

1,900 vacancies for part-qualified accountants in the

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If you are studying towards your professional qualifications,

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To find out about the range of opportunities we can ofer

you, email [email protected] or call 07834 260029.

Alternatively, you can visit us online.

YOUR PATH TO A FULFILLING CAREER

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Page 37: PQ magazine, January 2016

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Page 38: PQ magazine, January 2016

WELSH TOWN TO GO ‘OFFSHORE’Small businesses inCrickhowell (Powys,Wales) are proposingto take themselves‘offshore’, copying thelikes of Google andFacebook, in anattempt to force theUK government toclose tax loopholes.The town’sshopkeepers andindependent business owners have presented their own DIYoffshore tax plan to HMRC’s business tax DG, Jim Harra. Theyare also encouraging other towns to follow their example. Usingtax experts the plan involves setting up an offshore company inthe Isle of Man and devising a set of ‘service standards’ asintellectual property rights. ‘The Town That Went Offshore’ willbe on BBC TV next Spring.

PQ Magazine January 2016

PQ got a story, funny or serious, you want to share? Email [email protected]

W E V E G O T T H E L O T’

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 bereceived by Friday 1 January. The main draw will take place on Monday 4 January 2016.

TO ENTER THESE GIVEAWAYS EMAIL [email protected]

The Class of 92’s takeover of Salford City FCmade great telly recently. For those not inthe know, we are talking about some famousManchester United players here. As well aschanging the colour of the shirt (surely a no-no to any fan), the ex-pros also changedthe club’s logo. The minute we saw it (left)we thought one of them must have been to BPP – they look andfeel very similar. They could be in trouble, as we know one ofBPP’s senior guys is a big Leeds United fan!

SEPARATED AT BIRTH

WE WON’TDRINK TO THAT

Majestic is agreat place topick up a bottleof wine (itdoesn’t have tobe six now). You

can also pick up some great craft beers,but according to the marketing materialNOT if you are an accountant! In a recentemail customers were told: “These arebeers made for taste, not foraccountants. Crafted with a high levelskill, using natural ingredients to createbold flavours - with bold packaging tomatch!” We shall be writing back to makea formal complaint.

QUOTE OF MONTH: John McDonnell, Labour MP at a

demonstration backing free education:“Education is a gift from one

generation to another, it is not acommodity to be bought and sold”

ACCOUNTANT MAKESGUINNESS BOOK OF RECORDS Accountant Mark Goodliffe has become theproud holder of a Guinness world record. Herecently won The Times’ national crosswordchampionship for a record ninth time, andeighth time in succession. He beat off rivalsfrom the US, Switzerland and Belgium tokeep his crown. It took him 29 minutes tocomplete the final crossword, 30 minutesbefore any of his fellow competitors finished.

A GIFT HORSE It is not often PQ agrees with Sun columnistKelvin MacKenzie, but his take on the £30bn‘gift’ to the world by Mr and Mrs Zuckerbergfollowing the birth of their first child was onewe applauded. As the headline said: ‘…realgood guys pay their tax bills’. MacKenziesaid that if the Facebook founder, along withthe likes of Google, Oracle and Mircosoft,really want to be seen as the good guys thenthey will have to start telling their CFOs tostop being so bloody clever!

CELEBRATEYOUR DAYWell, what did you do on 10November tocelebrateInternationalAccounting Day?Yes there really isone! Apparently theday coincides with the publication of‘Summa de Arithmetiica, Geometria,Proportioni et Proportionalita’. ThisVenetian book was printed way backin 1494 and included an essay ondouble-entry bookkeeping. Theauthor was mathetician and friar,Luca Pacioli, who is known as ‘TheFather of Modern Accounting’. He said no merchant could go tosleep at night until the debitsequalled the credits – so nothingchanges!

BUILDING A FORTUNELego could be a better investmentthan buying gold. The Star WarsUltimate Collector’s MillenniumFalcon set, which cost £329 in 2007,is now selling online for £2,712. The2008 Taj Mahal (it has 6,000 pieces)cost £199.99 in 2008, but would nowset you back £1,848. From 2007 totoday, gold has gone up by around10% and the value of the FTSE 100has been the same since 2000.

WORK IT OUTNot all accountants are boring, monotone dullardswho achieve their thrills in life at the bottom of abalance sheet. Well, that’s what Timothy Timpkinsthinks, and to prove it he has written a book ‘Workit out with a pencil’ – a series of outrageous talesfrom 20 years as an accountant. He has verykindly given us three signed copies to give awaythis month.To enter this giveaway all we need is your name

and address – and that’s it! Email these details [email protected], heading up you email ‘With a pencil’

ALL THE RAGEHow do you wind down after all those hourswith your nose in front of a computer screen?Well, have you tried to colour yourself calm?We have three adult colouring books to giveaway. The book has 100 beautiful illustrationsof the animal kingdom, hand-drawn by artistSue Coccia. So it’s time to escape into a worldof creativity, inner peace and calm. To be in with a chance of winning this great

giveaway send an email to [email protected] along with yourname and address. Head up your email ‘Colour me calm’.

pq jan 16 p38 q9.qxp_pq aug 13 fun 08/12/2015 15:33 Page 42

Page 39: PQ magazine, January 2016

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Page 40: PQ magazine, January 2016

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