PQ magazine, March 2016

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

We’ve five ACCAand five CIMAcourses to giveaway. See inside!

ACCA TOP TIPS FOR YOU

The ICAEW just can’t stopgrowing! New figures showthat the number of studentssigning up to an ACA trainingagreement rose by over 10%in 2015.

The ICAEW student intake lastyear was a record high, with 8,256new students studying its charteredaccountancy qualification. Addstudents studying the ICAEW CFABqualification and the institute signedup almost 14,000 students in 2015.

That means that the ICAEW nowhas over 24,000 to nurture. At therecent Tutors’ Conference, Directorof Qualifications Shaun Robertsonstressed that the institute had aresponsibility to these new studentsto ensure they have the bestchance of qualifying. And he addedthat the institute has to ensurethese training charteredaccountants achieve the standard ofthe current 146,000 members.

The ICAEW also announced thatthe planned introduction of CBEexams will now take place in March2017, a year later than originallyhoped. With partners BTL and RMin place, the ICAEW has the CBE‘ready to go’. It now needs to re-tender for a partner to providethe actual exam delivery – thecomputer exam centres. It had

chosen learndirect, only forPearson Vue to come in with anoffer to take them over, puttingimplementation on hold.

Tax Compliance will be the first togo CBE and there was even talk atthe conference of a possible pilotthis September.

The ICAEW is also continuing toevolve the syllabus, to ensurestudents qualify ‘fit for purpose’. InJanuary, it introduced scenario-based questions to theManagement Information andPrinciple of Taxation exams.

With students specialising at anearlier stage in their career the

ICAEW has decided to offeralternative modules. From June,Business Planning students canchoose between taxation and thenewly introduced banking andinsurance alternative modules.

Roberston was keen to stress,however, that they were not tryingto create specialists and PQs willstill have to sit and pass 15 exams.From March 2017, students will beable to choose between UK GAAPand IFRS when sitting the FinancialAccounting and Reporting exam.The same choice will be offered inCorporate Reporting at theAdvanced Level (in 2018).

ACCA signsup BritishCouncil The ACCA has unveiled the newpartner to provide its global examcentre network for the introductionof the ACCA’s CBE and paper-basedexams – the British Council. Theagreement means the British Councilwill provide a secure network in theUK and in over 100 countries wherethe Council operates.

This new initiative builds on thelong-standing relationship betweenACCA and the British Council, whichis currently the association’s mainexam centre provider for paper-based exams, providing over half ofthe venues in the ACCA’sinternational network.

ACCA CEO Helen Brand said: “Thisnew agreement sees the BritishCouncil provide ACCA’s future examcentre network in the UK andoverseas, exclusively for ACCAstudents. It supports the roll-out ofACCA’s new computer-based examsfor ACCA’s Fundamentals Skills Level(F5-F9) exams from September 2016onwards.”

She said CBEs were an excitingdevelopment for ACCA, incorporatingspreadsheets and word processing tobetter reflect the tasks PQs have todo well in the workplace.

PQmagazineEXCLUSIVE

RECORD INTAKEBOOSTS ICAEW

Robertson:ICAEW has aresponsibilityto nurture its

students

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002_PQ 0316_PQ 1209 000 03/02/2016 14:34 Page 7

comment PQ

News 08ICAEW results Sit three

papers if you want to succeed!10CIMA pass rates The good,

the bad and the ugly papers 12ACCA exams Pass rates

struggle to hit the 50% markFeatures, etc06Mind your Ps&Qs ACCA treats

us as cash cows; CIMA Presidentis an inspiration; plus the best ofsocial media

14ACCA F9 Shaking up theWACC calculation; and we’vefive CIMA and ACCA classroomcourses to give away – for FREE!

17ACCA exam tips specialFour pages of red hot tips, pluswhat the examiners thought ofyour efforts on the ‘P’ papers

22ACCA exams How will themove from two to four examsittings a year affect you?

23Let’s get technical Costingterminology you need tounderstand to get that pass

24CIMA case study All you needto know about the StrategicIntegrated Case Study

25AAT Facebook society Aname change for the AATsupport group with big plans for the future

26ATT winners list Who werethe November award winners?We list them all, and thestudents with distinctions

28ICAEW spotlight Institutelaunches two new papers –Business Planning: Banking andBusiness Planning: Insurance

29Careers #1 Do I stay or do Igo? The dilemma of whether tostay put or seek a new job

30Careers Life in the financialsector in Sri Lanka; another ofyour careeer ‘issues’ solved;plus the PQ Book Club review

34Fun time The mad world ofaccountancy; and our giveaways

The columnistsRobert Bruce Standards, and whywe must cut through the clutter 8Prem Sikka Tax avoidance harmsall our businesses 10Carl Lygo Singapore sets a shiningexample to us all 12

Subscribe to PQ magazineIt’s FREE – see page 33 or go to

www.pqmagazine.co.uk

ABC July 2014 – June 2015 32,233

Publisher’s statement: We send adigital issue of the magazine to anadditional 8,414 requested readers

Free to all accountancy studentsAnnual subscription: £35 (£50 overseas)

Making comparisons This month’s issue is jammed-packed with exam results. Wetake a look at the ACCA, CIMA and ICAEW results on ournews pages. So what did we think? Well, just one ACCA paper

had a pass rate over 50%; CIMA’s P1 and P2 are still as tough as ever;and (counter-intuitively) ICAEW professional level students do better themore exams they sit!

It will be interesting to hear reader reaction to the varying pass rates.When we tweeted out the ICAEW results one follower simply put thesepass rates next to the ACCA’s and retweeted them, asking: “Why themassive difference?” The ICAEW December 2015 Audit & Assuranceexam had a 75% pass rate. The ACCA Audit & Assurance exam had a46% pass rate. I will let you draw your own conclusions.

The pass rates do worry ACCA students, in particular those at theoption level. Our lead letter this month is from a concerned overseasreader and reflects what many PQs tell us. How can it be acceptable fortwo out of three students to have passed (or be exempt from) 12 corepapers, only to get stuck on the last two optional papers. When two-thirds of final level PQs are failing these papers students have a right towonder what is going on.

The first-ever March ACCA exams are just around the corner. To helpwe have four pages of tips and advice. Don’t forget to go onto the studyzone on our website for even more detailed help and advice.

Oh, and don’t forget our great giveaways this month. We have teamedup with First Intuition Leeds to give away courses for ACCA and CIMAPQs. There are 10 up for grabs – go to page 14 for all the details. Youcan also ‘win’ a PQ magazine memory stick and colour yourself calmbook (see page 34 for those).

Everyone at PQ Towers is getting very excited about the forthcomingPQ awards, taking place again at the Café de Paris. They are our 13thawards night – and will surely be lucky for some. We will unveil all thewinners in next month’s issue.

Graham Hambly, PQ magazine editor – [email protected]

CONTENTS March 2016

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23 FEB 2016

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: RobertBruce, 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

Are we cash cows?The ACCA Option papers areridiculous – the proof is in thepass rates.

So here’s my take. I acceptthat the exams should be atough test. I think there shouldbe more exams, with less tolearn in each and thus allowingfor a greater understanding.

The 50% pass rates (or justbelow) seem reasonable. Myissue is with the Option papers,and the ACCA simply must act.

It’s the same storyevery time.

P4 is ridiculouslydifficult and is not set

at the right standard for ageneralist in this very specificarea. Hence we consistently see35%-ish pass marks – it’s notacceptable for students, norshould the ACCA be happy.

P5 is technically at about theright level, but the markingseems incredibly harsh – witnessthe ridiculous sub-30% rates.

P7 is also set at the right level,but too much is expected in theanswers; too much depth andbreadth for a three-hour exam.This is evidenced by the passrate increasing massively and it’sstill only 39%!

What does all this mean? It

appears that the pass rates forthese papers are regulated andwe students are not happy at all.

We are appealing to ACCA toreview its marking scheme forthese papers so students canprogress to completion. Brilliantstudents reach this level andhave to re-sit P5 and P7 five, sixor more times – that’s ridiculous.

Perhaps the ACCA will start tolisten when the number ofstudents starts to fall – by then itmay be too late. It appears passrates are controlled and studentsare becoming merely ‘cash cows’– and we all know it.A disgruntled student, by email

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

Hot & Tweet

email [email protected]

Make your mind upI am confused! Two months agoyou suggested the world is a betterplace thanks to accountants (Ithink it was an IFAC report). Lastmonth you said we “have no moralcompass” (PQ, February, p14). Youneed to make up your mind. I’msurprised only 50% of accountantshave been either pressurised (orknew someone who had) by amanager to change the accounts.How can a PQ stand up and safelybe a ‘whistleblower’? Many rightlyknow that it would be the end oftheir career in accountancy. Name and address supplied

How refreshingIt was nice to read that the currentCIMA President didn’t pass all herexams first time. I recently failedthe case study and it was a shockto me too – it is the first exam I’veever failed. Like her, this failurereally rocked me, but I’m nowready to take it on again. I havepromised myself I won’t be sitting ita third time. Can I ask, is she reallyonly the second woman to be CIMAPresident? What is CIMA doing topromote diversity? Name and address suppliedThe editor says: Yes, she really isjust the second woman to bePresident. The first was ClaireIghodaro, 12 years ago. Let’s hopewe don’t have to wait another 12years for another woman.

We loved the comment on theASNG.com LinkedIn pageby Uzochukwu Okpala: “Graham Hambly at PQ magazineis always on top with the news and happenings of theACCA and was first to predict the ACCA 4 sittings in ayear. Graham keep it up.” He is trying to!

We also used LinkedIn to tell students they couldsign up to Becker’s FREE study school. It is still running by the way (ifyou are reading this before 26 February that is). All the details are onour website at www.pqmagazine.co.uk.

If you are working in practice and looking for a group to join then takea look at HMRC Watch. It looks at the harsh reality of working with thetaxman.

The hugelysuccessful AATDistance Learning Group onFacebook recently changed itsname to ‘The AAT StudentsIndependent Group’. Wetweeted out the news,explaining you would have to becrazy not to join. As the groupretweeted: “We don’tdiscriminate, crazies alsowelcome. Helping each othermake studying fun!” If youwant top find out more see ourexclusive story on page 25.

We also had a bit of a run-inwith Ipsos MORI, who produceda survey of ‘the most trustedprofessions’ – without includingaccountants. MORI’s Ben Pagesuggested: “You aren’tinteresting enough :) moreseriously we have to stopsomewhere.” We told him to bevery careful – there’s a lot ofaccountants out there. He cameback: “If ICAEW or someoneelse wanted to sponsor it, asthe BMA have in the past,happy to.”

Follow us @PQmagazine

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8 PQ Magazine March 2016

PQ news

The ability to wrap up a businessconcept in one sentence is a gift fewhave. But it makes an almostincalculable difference if it can bedone. Life becomes much simpler.One of the best examples in recentyears came from Sir David Tweedie,ex-chairman of the InternationalAccounting Standards Board. He hasalways had the ability to come upwith something that cuts through allthe flummery and reveals theessence. His best was why the worldneeded to get a grip on the off-balance sheet nonsense surroundingleasing. “Before I die,” he would say,“I’d like to fly on an aircraft that is onthe airline company’s balance sheet.”And there you had it. No one couldmisunderstand what the concept was,where the current confusion and poorpractice lay, and how you would knowwhen the problem was solved. And itwas all in one simple sentence. Ittook almost 20 years to get a decentstandard onto the statute books; itcame about earlier this year.

The mayhem and chaos aspoliticians and pundits have tradedmisunderstandings with each otherhas been hugely depressing. To someextent it has been understandable.The vast empire of tax rules and lorethat politicians have created overdecades is impenetrable. I supposewe should expect such chaos when itappears that the whole point of tax, tothem, is not to raise revenue butinstead to score political points. As aresult we are lost in a world of redherrings and wild goose chases.

ROBERTBRUCE

It’s time tocut throughthe clutter

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

Don’t steal from a partner!

Midlands mergers Leading Midlands

accountancy firm PKF CooperParry has now completed a mergerwith Birmingham-based ClementKeys. The newly merged firm willtrade as PKF Cooper Parry and hasa combined revenue of £30m anda team of more than 350 peopleacross its two offices in the Eastand West Midlands.

Cheating epidemicNearly 50,000 students at UK

universities have been caught

cheating inthe pastthree years,according toa new report.UsingFreedom ofInformation requests, The Timesnewspaper discovered thatstudents from outside the EU weremore than four times as likely tocheat in exams and coursework.The data from 129 universitiesfound that 1,947 students at theUniversity of Kent were found

cheating in the past threeyears – the highest of anyuniversity.

Average going down The average number of

papers sat by ACCADecember sitters was 1.5 papers.That is up from the 1.2 inSeptember 2015, but lower thanthe old average of 1.8 papers.ACCA and tutors will be keeping aneye on this as a big change in thesitting pattern could have bigrepercussions for the bottom line!

Narrow-scope amendments The International Accounting

Standards Board (IASB) has issuedamendments to IAS 12 IncomeTaxes. The amendments‘Recognition of Deferred Tax Assetsfor Unrealised Losses (Amendmentsto IAS 12)’, clarify how to accountfor deferred tax assets related todebt instruments measured at fairvalue. The amendments clarify therequirements on recognition ofdeferred tax assets for unrealisedlosses to address diversity inpractice.

In brief

ICAEW provisional member Saurabh Choudhary hasbeen issued a severe reprimand and fined £1,200 afterhe was sacked by his firm for stealing Japanese printsand a Chinese vase from a partner’s office.

The firm sacked him for gross misconduct after headmitted that in “a moment of madness” he had takenthe items. He even revealed the pictures were on hiswall at home!

The ICAEW’s tribunal concluded that Choudhary’sconduct brought discredit on himself, the institute andthe accountancy profession.

The tribunal also said that while these were very

serious matters, Choudhary had shown real remorseand had persuaded them that he would not behave inthis way in the future. In these circumstances itaccepted that a severe reprimand was warranted, butany further transgression will likely lead to him beingdeclared unfit to become a member.

In another disciplinary case, ACA PQ Namit Kad wasordered to pay £5,000 costs for altering two internalreview forms to enhance the assessments given to himby appraisers.

Kad had already lost his job, as his firm hadterminated his employment.

Tesco’s whole finance team needsto be ‘re-educated’, says theGroceries Code Adjudicator,Christine Tacon, in her damningreport into the supermarket’spractices. She found Tesco guilty ofserious breaches in industry rulesas it deliberately withheld cash fromsuppliers to improve its ownfinancial performance.

Some small suppliers were forcedto take out bridging loans just tosurvive and one supplier owedmillions of pounds had to wait twoyears to be paid.

The GCA will be working closelywith Tesco to implement her fivekey recommendations:1) Money owed to suppliers forgoods supplied must be paid inaccordance with the terms ofpayments agreed.2) Tesco must not make unilateraldeductions.3) Data input errors identified bysuppliers must be resolvedpromptly.4) Tesco must provide transparencyand clarity in its supplier dealings.5) Tesco finance teams and buyersmust be trained in the findings fromthis investigation.

Tesco finance team‘needs education’,says damning report

Did you know that the more ICAEWpapers you sit the more chance youhave of passing them all? This iscertainly true when it comes to theDecember Professional exams.

Some 72.7% of candidatessitting three papers passed all ofthem. While just 69.3% of thosesitting two papers passed both,those opting for one paper had a65.9% success rate. Some 5,134students sat the December 2015session, with 9,285 papersattempted.

The concern will be the slide inpass rates in some key papers,particularly the Audit and Assuranceexam. In September, the pass ratefor this paper was 87.5%; this timearound it slumped to 74.9%.

ICAEW PROFESSIONAL EXAM RESULTSDec 15 Sep 15

Audit & Assurance 74.9% 87.5%FA & Reporting 74.2% 83.2%Tax Compliance 73.4% 83.9%Business Planning Tax 77.3% 81.3%Business Strategy 88.4% 92.0%Financial Management 78.8% 79.7%

Sit three exams for success

As new opportunities emerge,organisations need multi-skilledfinance professionals who understandthe dynamics of a changingenvironment. To this end, CIPFA andICAS are working together to addressthe public sector’s need for both publicsector and corporate finance expertise.If you are a qualified CIPFA you cannow fast track to dual ICASmembership. This will provide you withchartered accountant (CA) status, aswell as providing you with skills acrossboth public and corporate sectors andaccess to the ICAS member benefits.For further details visitwww.cipfa.org/newheights or [email protected]

Dual designation for all CPFAs

PQ Feb 16 p8 q9 ccm.qxp_pq sept 12 p08 11/02/2016 12:13 Page 10

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009_PQ 0316_PQ 1209 000 05/02/2016 12:44 Page 7


PQ news

Google, Facebook and other globalcorporations face the anger ofparliament and press over avoidanceof taxes. They claim to be sociallyresponsible and ethical, yet thecompanies use complex structures andtransfer pricing techniques to shiftprofits to low or no tax jurisdictions.

For years, the corporate lobbyclaimed that when corporation taxrates are reduced, companies will stopavoiding taxes. The rate has fallenfrom 52% in 1982 to 20% in 2016,but there is no end to tax games insight. Some corporations are callingfor abolition of corporate taxes. Thiswould result in a £42bn hole in the UKpublic purse. To maintain status quo,the yield from income tax would needto increase by 26%. Higher personaltaxes would erode consumerpurchasing power and make it difficultfor firms to sell their products andmake profit. So companies would lose.

Alternatively, people may have togive up their hard-won social rights,such as those relating to education,healthcare, security, pensions andsocial security benefits. This isdamaging to big business too; withoutan educated and healthy workforce,good security, transport and legalsystem they cannot make profits. Ofcourse, companies will still wantsubsidies and taxpayer bail-outs, as inthe case of banks. So we will moveinto the era of negative corporatetaxes resulting in huge transfers ofwealth from people to corporations.

Are people ready for this brave newworld? Probably not.

PREMSIKKA

Why taxavoidancedoes untolddamage tobusiness

n Prem Sikka is professor of accountancy at theUniversity of Essex

KPMG chooses AAT

As promised, CIMA has publishedthe latest case study and OT passrates.

Operational case study sitters willbe pleased with November’s 61%pass rate – it was 34% in August.What students in 2016 will behoping for is less of a yo-yo in thepass rates.

The Management and Strategiccase study pass rates were ahealthy 78% and 62% respectively.The Management 78% is thehighest case study pass rate since

the new exams were introduced.Meanwhile, Strategic sitters will looklongingly at the 70% achieved atthe May sitting.

CIMA also released the OToverall, first time and total passrates for the whole of 2015.

Looking at total exams passed,P2 has the lowest success rate at41%. This is followed by P1 at 42%and F2 with 45%.

By contrast, E2 has an 83% passrate and E1 is 76%.

The first-time OT pass rates alsopoint to P2 andP1 being the bighurdles, closelyfollowed by F2and F3. The Epapers (and F1)

seem much easier, with P3 sittingneatly in the middle.

CIMA’s Noel Tagoe felt thatoverall pass rates are “eitherremaining steady or are becominghigher”. He suggested thatstudents are feeling increasinglycomfortable with the new system.

CIMA pass rates: the lowdown

How to pass P2

HOW ETHICAL ARE YOU?The Fédération des Experts Comptables Européens– Federation of European Accountants (FEE) – islooking for European young accountancyprofessionals (under 35) to give their views onethical behaviour. Take 15 minutes to tell themwhat you think by taking the survey: go to https://www.surveymonkey.com/r/YPethicalbehaviour

Ethics, says FEE, is an essential component ofbeing a professional accountant and the body iscommitted to continuously promoting ethicalbehaviour that helps to contribute to an efficient,transparent and sustainable economy.

Interestingly, one of the first questions asksrespondents to give the three main reasons theychoose accountancy. While opportunities to traveland good career progression are possible answers,‘for the money’ isn’t! And, yes, you really could sayyou wanted to be ‘part of a regulated profession’ oryou where ‘interested in the subject matter’.

The results are due out later this year.

CIMA CASE STUDY EXAMS – 2015November August May February

Operational 61% 34% 67% 44%Management 78% 77% 62% 33%Strategic 62% 67% 70% 46%

OT pass rates (2 Jan to 31 Dec 2015)Overall First Time Total

E1 87% 78% 76%P1 63% 45% 42%F1 82% 74% 71%E2 92% 85% 83%P2 66% 44% 41%F2 66% 47% 45%E3 76% 61% 58%P3 69% 50% 47%F3 67% 48% 47%

A short revision course will notguarantee you success in the ACCAP2 papers, says the examiner inthe latest Examiner’s report.

What candidates need to do is “asignificant amount of pre-coursestudy”. The examiner went on tostress that knowledge andunderstanding does not comethrough rote learning butapplication and thought.

PQs then need to manage theirown learning and stop relying totallyon their tutors for knowledge.

The importance of TheConceptual Framework was alsohighlighted in the report. “Given thefundamental importance of theFramework, it makes sense forcandidates to have a good

knowledge of it,” said the examiner.Candidates also need a working

knowledge of the fundamentalprinciples of the standards and beable to apply them. Combine thiswith your Framework knowledgeand you have a PQ who can seethe inconsistences in thestandards, it was ventured!

The report tries to clear up what‘current issues’ means. Currentissues are not simply the ExposureDrafts set out in the examinabledocuments. They also includeproblems with current accountingstandards, recent IFRSs andpractice and regulation uses. Theexaminer was shocked by the lackof detailed knowledge of IFRS 15 inquestion 4.

The ACCA is now well ensconced inits new home at the Adelphi, just offthe Strand. Staffers have a whole newworld of places to eat, but PQwonders how many people get pastSmith & Wollensky, which is on thecorner of their building. It servesAmerican steaks and wines “focusedon the high-end”, but members will bepleased to know that prices are morereasonable than we first thought!

AAT has been chosen by KPMG asthe qualification to be used in itsKPMG360º apprenticeshipprogramme. KPMG360º is anapprenticeship programme forschool and college leavers andbegins with a one-year FoundationLevel, during which apprentices willstudy AAT level 3. They will thenprogress to a two-year technicianlevel. Those wishing to continuetheir apprenticeship will then jointhe three-year professional levelscheme. The first students join theKPMG scheme in March.

You are expected to shine at work, pass your exams (firsttime) and still find the time to lead a ‘normal’ life.

However, it doesn’t always work that way and from themoment ICAEW PQs begin their training contract they canaccess CABA, the charity set up to help both students andmembers in trouble. So, if you are struggling to settle intoan unfamiliar workplace, with student loan repayments orwith mental ill-health, there is someone to talk to, 24/7,who is on your side.

CABA has just updated its website showing all thedifferent levels of support available for ACA PQs. Theservice is free and offered in the strictest confidence.

CABA offers a unique service – we haven’t heard ofanything offered by the other professional bodies thatcomes close!• Take a look at www.caba.org.uk

CABAupdateswebsite

PQ Feb 16 p10 q9 ccm.qxp_pq sept 12 p08 10/02/2016 12:48 Page 10

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011_PQ 0316_PQ 1209 000 05/02/2016 12:44 Page 7


PQ news

Singapore is a remarkable city state.It is to Singapore that most Asia-Pacific countries look. The legacy isthat of former Prime Minister LeeKuan Yew, who led Singapore from1959-1990. In the space of 50 yearsSingapore raised itself from thirdworld to gaining independence fromthe UK/Malaysia to becoming a firstworld nation of unparalled success.Unemployment is 2%, Singapore isthe world’s healthiest nation, 90% ofSingaporean’s own their own home, itis one of the least corrupt nations todo business and the government runsa perpetual surplus.

The latest recognition came in theBusiness School INSEAD’s GlobalTalent Competitiveness Index, whichplaced Singapore second in the worldin terms of its ability to attract andretain talent (Switzerland was top, theUK seventh). The survey covered 109nations across all incomes and levelsof development. The index looked atfour pillars on the input side – Enable,Attract, Grow and Retain and twooutput pillars benchmarking nationalperformances in Labour/Vocationaland Global knowledge skills.

The current PM, Lee Hsien Loong(eldest son of Lee Kuan Yew), recentlyannounced that Singapore wouldcontinue to invest in the future for itschildren while older economies in theWest are creating massive debts forthem. Student loan debt in the UK hasnow reached an all-time peak of£73.5 billion – an interestingcontrasting legacy we have left ourchildren in the UK.

CARLLYGO

Singapore isa shiningexample tothe world

n Professor Carl Lygo ischief executive of BPP

The ACCA December exam resultswere released on 18 January, butwhat did we get? Just one paperfrom F5 to P7 had a pass rate ofover 50% – that was F6 with 53%!PQ readers had called F6 tough butfair.

Bizarrely, every Essential paper(that’s P1, P2 and P3) had thesame pass rate – 47%.

The P5 pass rate remainsworringly low: it’s 29% this time andwas just 30% for September. PQshad called the December paper‘horrible’, ‘difficult’ and a ‘disaster’,among other things! The worry forsome is that they know they arewaffling and what they write of‘often meaningless’.

P7 saw a big jump on theSeptember sitting (it was 29% inSeptember). For December, thepass rate rose to 39%.

In all, some 162,603 studentsentered 243,660 December papers.The session saw 6,950 studentsworldwide complete their finalexams.

ACCA’s new director of learning,Dr Mary Bishop, said the ACCAexams remain demanding to ensurethat its students meet employers’

ACCA’s pass ratesstruggle to hit 50%

GET A PASS BOOST!Student confidence can be an issuein CIMA OT exams. When exactlyare you ready to sit? Even CIMA hasacknowledged that students couldbe putting off exams because theydon’t feel ready.

BPP decided to ask CIMA PQswhat they could do to help, andhave devised the new affordable‘Pass Boost’ that could really makea difference. With Pass Booststudents get access to an onlinemock exam designed to mirror thereal thing. But this isn’t just a testit’s also a learning exercise – youget to see detailed solutions andexplanations as well as your mark.Boosters also receive 2.5 hours of

live, interactive webinars coveringtricky topics in the paper, examtechnique and a chance to grill atutor with last-minute questions.

BPP’s Steve Malpass told PQ: “Alot of students have done enoughwork to be ready to sit the exam,they just need something to confirmthis. This is what Pass Boost does –the Practice Exam is a greatindicator of how ready you are, andif you do have any questions youcan ask the BPP tutor.”

Pass Boost is included free inBPP’s CIMA Objective Testprogrammes or can be purchasedas a stand-alone product for theintroductory price of £49.

THE ANSWERS ARE:1. Quantum of Solace2. U23. Sweden4. Tennessee Williams5. Hashtag6. Timothy Spall7. Paddington8. A Beautiful Mind9. Patrick10. French national anthem

(La Marseillaise) 11. 2003

12. Many Clouds13. Chelsea14. Zara Philips (2006)15. Josef Martínez16. 1317. Kaka18. Deontay Wilder19. Alastair Cook20. South Korea21. Kilimanjaro22. Stanley23. Edinburgh24. New York City

25. Tigris26. Denim27. Windermere28. Angola29. Burma/Myanmar30. Antarctic31. Big Bang Theory32. Venus33. Cobol34. Three35. Newton’s Third law36. W37. Pumice

38. Calculus39. Emu40. 841. Lego42. Nicky Morgan43. George III 44. 198445. Sandi Toksvig46. Crochet47. Center Parcs48. Cake49. Clowns50. Canadian

Congrats to Izabela Kaczynska from Warwickshire, Simon Parker, Preston, and Lisa Robertson, Croydon, winners of this year’s Annual Bumper QuizThe quiz winners

ACCA EXAM RESULTS DECEMBER 2015 – WORLDWIDE Dec 15 Sep 15 Jun 15F5 Performance Management 41% 39% 37%F6 Taxation 53% 47% 50%F7 Financial Reporting 45% 44% 40%F8 Audit & Assurance 46% 42% 39%F9 Financial Managem’t 45% 35% 41%P1 Professional Accountant 47% 48% 49%P2 Corporate Reporting 47% 44% 48%P3 Business Analysis 47% 45% 46%P4 Adv Financial Managem’t 35% 36% 36%P5 Adv Performance Managem’t 29% 30% 28%P6 Adv Taxation 42% 45% 34%P7 Adv Audit & Assurance 39% 29% 40%

requirements and havedemonstrated that they can dealwith the challenges facing today’sfinance professionals.

Quite a number of students arescoring 49% and missing out onpassing by just 1%. On a leadingnoticeboard one PQ claimed thatthey had failed with a score of 49%for the third time. These studentsare obviously feeling demotivated.

Students may be wistfully lookingat the current CBE exam results.The F4 sitters, for example,managed a 74% pass rate. Theknowledge paper pass rates rangedfrom 64% to 84%.

The ACCA will be extending theuse of CBE exams to F5 to F9 laterthis year. Spreadsheets and otherinnovative question types are beingintroduced into these assessments.

Stockport-based firm Hallidays wasover the moon recently when one oftheir number, Katie Cheetham,finished 11th internationally and willbe recognised at ICAEW’s annualprize giving ceremony in April. Thisis in fact her fifth award!

PQ Feb 16 p12 q9_pq sept 12 p08 10/02/2016 12:47 Page 8

013_PQ 0316_PQ 1209 000 04/02/2016 12:34 Page 7

PQ Magazine March 201614

PQ ACCA F9

‘WACCy’ milkshake needs no formulaJo Tuffill shakes up the WACC calculation

Formulae feature pretty heavily in the ACCA F9 syllabus and tend tosend many students into a spin, prompting memories of dreadedschool algebra lessons. Let’s face it, accountants really need to be

numerical, not mathematical. So here is one way of throwing out that‘WACCy’ formula.

The weighted average cost of capital (WACC) is basically like costing upa strawberry milkshake – you know, the ones from your local coffee shopthat vary in both quality and cost.

Suppose we make 100 litres of strawberry milkshake as follows:• 50 litres of milk at 10p per litre• 40 litres of strawberry coulis at 20p per litre• 10 litres of cream at 15p per litre

This makes 100 litres, so what is the cost of 1 litre?

AnswerMilk 50 x 10p £5.00Strawberry coulis 40 x 20p £8.00Ice Cream 10 x 15p £1.50Total Quantity 100 litres Total Cost £14.50

Weighted average cost per litre will simply be £14.50 / 100 = 14.5p

Now if you vary the mix keeping the total quantity fixed you canmanipulate the cost. Adding more milk and less strawberry coulis will pushdown the cost per litre, and vice versa. So watch the mix (and don’t short-change your customers on coulis at the counter).

You will be forgiven for thinking you are reading an article about F5 mixvariances. Good spot! You can use methods learned in other modules tohelp with F9. Here is the trick…

When asked to calculate a WACC, replace the quantity in litres withMarket Values of Finance and the cost in pence with their respectivePercentage Cost of Finance.

ExampleOur Milkshake company is financed by a total of £100m as follows:• £50m of Debt at 10%• £40m of Equity at 20%• £10m of Bank loan at 15%

What is the WACC?

AnswerFinance capital Market Value Cost of capital % CostDebt £50m x 10% £5mEquity £40m x 20% £8mBank Loan £10m x 15% £1.5mTotal Market Value £100m Total Cost £14.5m

WACC will simply be £14.5m / £100m = 0.145 or 14.5%

Again, if you vary the mix you can manipulate the WACC. Adding moredebt at a lower cost of capital will push down the WACC as follows:

AnswerFinance capital Market Value Cost of capital % CostDebt £50m x 10% £5mEquity £40m x 20% £8mBank Loan £10m x 15% £1.5mDebt 2 £20m x 10% £2.0mTotal Market Value £120m Total Cost £16.5m

WACC will simply be £16.5m / £120m = 0.1375 or 13.75% which is lower.So there’s no formula required – leave it on the formula sheet.

• Joanne Tuffill, Vale TrainingPQ

First Intuition has opened up at 1 Aire Street,Leeds LS1 4PR, in the heart ofcity, close to the railway station.To celebrate it is offering 10students the chance to taste justhow FI can ‘make the difference’.Yes, we have five ACCA classroomcourses and five CIMA courses togive away, totally free!The FI team promises:• Never to cancel a course – ever!• The same tutor throughout yourcourse.• A question bank on the first dayof your tuition course.

THE GREAT LEEDSGIVEAWAY

We have joined forces with First IntuitionLeeds to offer PQ readers the chance to winone of five CIMA and five ACCA courses

• Free tea and coffee.If you want to go along and take a look

then why not sign up for the Open Day on 2 March? For more information [email protected] or call 0113 467 7770. Allthose who sign up on the day will receive a10% discount on their booking.

To enter our great giveaway simply [email protected] with your nameand contact number, heading up your email‘First Intuition Leeds’. Deadline for entriesis 4 April 2016.

* PQ magazine’s usual terms and conditions apply

pq Mar 16 p14 q9_Layout 1 10/02/2016 12:49 Page 1

015_PQ 0316_PQ 1209 000 08/02/2016 11:18 Page 7

016_PQ 0316_PQ 1209 000 08/02/2016 12:50 Page 7

ACCA exam tips PQ

PQ Magazine March 2016 17

Here are your tips for thefirst-ever ACCA Marchsitting, courtesy of toptutors from across theland. Don’t forget – theusual warnings apply!

First Intuition.F5 • MCQs on the whole syllabus.• Lifecycle costing. • Environmental accounting. • Limiting factors. • Relevant costing. • Flexed budget and budgetingdiscussion. • Divisional performance. • Mix and yield variances. F6 • Basis periods. • Loss relief for individuals andcompanies. • Groups of companies. • Employment/self-employment. • PAYE. • Capital allowances. • VAT invoice content and annualaccounting/flat rate scheme. • Entrepreneur’s relief, chattels. F7 • MCQs on the whole syllabus. • Extracts from single companyaccounts including non-currentassets, taxation and IFRS 15.• Interpretation of accounts includingratio calculations and writtenanalysis. • Consolidated SFP and/or SPL withassociate, PUP and fair valueadjustments. F8 • MCQs on the whole syllabus. • Ethics. • Audit risk and auditor response. • Internal control – deficiencies,implications and recommendations(revenue and receivables orpurchases and payables cycles). • Audit evidence and substantivetesting. • Subsequent events, writtenrepresentations. • Modified auditor’s reports.F9 • Discussion of the economicenvironment and the impact oninterest and exchange rates.• Working capital management –receivables and payables plusoperating cycle. • Investment appraisal and cost ofcapital. • Business valuations.• Risk management (currency riskcalculations). P1 • 50-mark scenario question, toinclude: ethics, governance, rulesversus principles, also corporate

• Likely to be 10-markers on VAT,inheritance tax and CGT.F7Q1-2• Interpretation or statement of cashflows, may be consolidation if Q3 isnot consolidation. • Conceptual framework; tangibleassets and impairment; provisionsand contingencies; revenue andgrants; financial instruments;discontinued operations/assets heldfor sale; or earnings per share. Q3• Financial statement preparation.• Statement of profit or loss andother comprehensive income and/orstatement of financial position.• Adjustments.• Statement of changes in equity,statement of cash flows extract,earnings per share calculation orlinked written topic.• Consolidation question, includingone subsidiary and often anassociate, with adjustments. Thinkfair values, deferred/contingentconsideration, PUP oninventories/PPE, intragroup tradingand balances, goods/cash in transit.• Single entity, could be preparationfrom a trail balance or restatement ofgiven financial statements with theusual adjustments for depreciation,revaluation and current/deferred tax,plus a mixture of adjustments onother syllabuses areas, such asleases, substance over form issues,financial instruments, share issues,government grants, inventoryvaluation, revenue recognition orconstruction contracts.F8Q1-4• Ethical threats and safeguards.• Corporate governance and internalaudit.• Audit planning• Materiality.• Audit procedures, especiallysubstantive procedures.• Audit finalisation.• Audit reports.Q5-6• Audit risk.• Internal control.• Audit procedures, both substantiveprocedures and tests of control.F9• Calculations on improvements toreceivable management – earlysettlement discounts and factoring.• Weighted average cost of capitalcalculations – including itscomponent parts.• Ratio analysis to support financingdecisions.• NPV calculations – correcting anincorrect NPV given by the examiner,which includes incorrect tax andinflation calculations.

social responsibility. • Optional questions to includeimportance of internal controls;structure of directors’ remuneration;business risks; environmentalreporting; and embedding riskawareness.P2 • Q1: group question on disposals orcashflows.• Ethics. • Revenue recognition. • Leases – current issue. • Deferred tax. • Share-based payments. • Pensions.P3 Section A • Environmental analysis, peoplewith financial analysis Section B • Project management.• Strategic action. • Information technology – pricingstrategy.P4• International investment appraisaltechniques focusing on riskmanagement tools such as value atrisk. • Impact on WACC following hedgingof interest rate risk. • Company valuation based scenario,possible MBO finance to structure. • Adjusted present value with link toreal options and Black Scholesoption pricing model. P5 • Critique an existing performancemanagement system and theperformance hierarchy. • Risk management and methods. • Activity based principles.• Performance management models(performance pyramid or buildingblock model).

• Value based approaches toperformance management. • Effective use of informationsystems. • Environmental accounting.P6 • Business property relief.• Use of second spouse nil rateband. • Related property.• Groups of companies, trading andcapital losses.• Double tax relief for companies. • De-grouping charges. • Incorporation relief.• Furnished holiday lets. • VAT partial exemption. • Appeals and the four-track tribunalsystem. • Benefits in kind or extra salary,income tax and national insuranceimplications.P7 • Business risks in a scenario. • Identifying ethical and otherprofessional issues in a scenario. • Matters to be considered and auditevidence for a couple of coreaccounting issues. • Money laundering.• Insolvency issues.

BPP .F5• Q1-3: any syllabus area.• Q4-5: planning and operationalvariance and evaluation of companyperformance.F6• Employment benefits.• Property income.• Relief for pension contributions.• Adjustments to profit to arrive attrading income for both companiesand sole traders.• Capital allowance computations. Continued on page 18

PQ Mar 16 p17-20 q9_Layout 1 10/02/2016 14:58 Page 1

These tips should only be used in conjunctionwith proper study. We cannotguarantee that these topics

will appear in the actualexam as we have not seen

the exam papers. Examinersare not predictable so it isvital that all core syllabus

areas are revised fully.

HEALTHWARNING


PQ ACCA exam tips

• IHT – calculating on death, withpreceding lifetime gifts.• Transfer of a spouse’s unused nilrate band.• Property taxation.• Commencement/cessation rules.• Wildcards: PAYE compliance, RTOreporting, VAT special schemes,ethical issues, pension allowances,child benefit income tax charge,principal private residenceexemption.F7• Consolidation issues.• Revenue recognition.• Substance versus form.• Convertible instruments (IFRS 9).• Accounting for taxation, as part offinal accounts question.• Accounting for assets – IAS 16.• Provisions and Contingencies.F8• Judging past examiner’s reportsaudit risk and auditor’s reports are‘bee in the bonnet’ subjects.F9• NPV and IRR.• Rights issues.• Equity and debt valuation.• SME finance – supply chainfinance, P2P lending, crowdfunding.P1• Corporate governance (CG)concepts, underlying fundamentalsand arrangements.• CG in other organisations (e.g.public sector, NGOs).• Types and forms of CG (e.g. rulesbased, principles based, insider,outsider systems, UK CorporateGovernance Code, SoX).• Agency theory, stakeholders,Mendelow.• Board structures, CEO/chairman,directors, NEDs, committees.• Internal control and business risk,Turnbull.• Ethical theories and business codes– Kohlberg, Gray, Owen and Adams,

quality related costs and ABC allneed to be mastered.• Performance managementframeworks – building blocks modelor the balanced scorecard.Q2-4 • Quality management.• Information reporting – CSFs andKPIs.• The application of strategic models– PEST, Porter’s 5 Forces, the valuechain.• HR frameworks – reward andappraisal systems.• Risk management.• Environmental managementaccounting. P6• Groups of companies involvingoverseas aspects.• Unincorporated business,particularly loss relief or involving apartnership.• Capital gains tax versus inheritancetax.• Overseas aspects particularly thenew rules on residence.• Personal service company. • Company purchase of own shares.• Enterprise investment schemes/venture capital trusts.• Change in accounting date.• Takeover. • VAT partial exemption.• Transfer of trade versus sale ofsubsidiary.• Disincorporation relief.• Pension contributions.• Patent box, research anddevelopment expenditure.P7Section A• Planning, risk assessment,evidence gathering and practicemanagement issues.• Non-audit engagement such asprospective financial information(PFI) or due diligence.• Audit completion or consolidatedgroups.Section B• Audit evidence and financialreporting issues.• Practice management – ethics andquality control.• Reporting – completion andcommunication.

Becker.F6• Corporation tax – a more traditionalquestion could involve group situationwith loss reliefs and chargeablegains. • Income tax – multiple incomesources, employment (and benefits)and/or self-employed, as well asinvestment income. Cash basis andrelated expense claims and propertyincome could also come up here.• VAT, CGT, NIC and compliance allkey.

P1• Use of stakeholder, ethical andother CSR theories.• Risk and governance relating toboard directors, remuneration andreporting.P2Section A• Preparation statement of financialposition and/or a group statement ofprofit of loss and othercomprehensive income or statementof cash flows – may include foreignsubsidiary, discounted activities,disposals and/or acquisitions.Possibly financial instruments,pensions, share-based payments andimpairments.• Accounting adjustments andsocial/ethical/moral aspects ofcorporate reporting.Section BQ2 & 3•One multi-part question coveringdeferred tax, foreign currencytransactions, financial instruments,pensions, share-based payment,non-current assets, borrowing costs,the effect of accounting treatmentson earnings per shares or ratios.• Test of a range of standards suchas accounting policies and theframework, leases, grants, IFRS forSMEs, reorganisations, provisions,events after the reporting period andrelated parties.Q4• Current developments in corporatereporting and problems with existingstandards, such as revision of theconceptual framework, regulatoryissues over adoption and consistentapplication of IFRSs.P3• Project management.• Time series, relevant costing,decision trees and decision makingtechniques.• Role of the corporate parent,including BCG matrix/Ashridge.• Business process change includingthe POPIT model and Harmon’sProcess-Strategy Matrix.• E-business, e-marketing and theimpact of big data on areas like the7Ps and CRM. P4Q1• Project appraisal – domestic andoverseas.• Business valuations – cost ofcapital.• Risk management – hedging.Q2-4• Risk management – currency orinterest rate.• Business re-organisation.• Real options.P5Q1• Transfer pricing, ratios, analysis of

Tucker, AAA.• Professions and the public interest.• Corporate social responsibility,corporate citizen, footprints andsustainability.• Integrated reporting, social andenvironmental auditing.P2• Consolidations in Q1.• Disposals. • Step acquisitions. • Cash flow. • Foreign sub. • Complex group. • Consolidated profit or loss wasexamined for the first time in overthree years in the June 2014 paper.• Financial instruments (IFRS 9) toinclude hedge accounting, questionson this topic tend to appear in mostexams.• Employee benefits (IAS 19).• Leases (IAS 17).• Share-based Payments (IFRS 2).• Impairment of assets (IAS 36).• Deferred Tax (IAS 12).P7• New audits, tendering.• Planning, materiality, sampling,analytical review.• Audit, business or materialmisstatement risk.• Group audits, goodwill, joint audit,joint ventures.• Assurance services, PFI, KPI, duediligence, forensic audit, reviews,insolvency (UK & Ireland students).• Ethics, practice management andother professional issues. • Any audit matter covering IFRS(IAS 1 to 40 and IFRS 1 to 15 – seeP2 syllabus).• Close down procedures, openingbalances, comparatives, otherinformation, going concern,subsequent events, representationletter, emphasis of matter, auditreports.• Outsourcing, service providers, useof an expert.• Corporate governance, internalaudit (relating to ethics, outsourcing),audit committees.• Current issues (e.g. quality controland professional scepticism)including integrated reporting.

LSBF.F5• Lifecycle/target costing with a touchof environmental costing.• Linear programming/decision tree.• Zero based/incremental budgets.• Sales mix and quantity variances(or planning and operational).• Non-financial performancemeasures.F6Q1• Capital gains tax question withshares including matching rules,bonus/rights issue, and with part

Continued from page 17


disposals and gift relief, due date forpayment; or• Corporation tax (i.e. companymaking disposals) with rollover andholdover relief.Q2• VAT – due date for deregistration,errors/surcharges, calculation of VATpayable, the flat rate scheme. Groupregistration for VAT.Q3• Inheritance tax.• Calculating IHT on lifetime giftsinto a trust when the donor is alive.• Calculating IHT on the death estatewhen the donor dies.Q4• Property business profits/losses foran individual, including furnishedholiday letting.• Self assessment for income taxincluding payments on account orbalancing payment.• Residence rules.Q5• Income tax.• Adjustment of profit for a soletrader/partnership, including capitalallowances, for a sole trader in themiddle of the trading cycle orceasing to trade.• Calculating income tax payable,with trading income, interest incomeand dividend income, and perhapsemployment income.

• Contributions into a pensionscheme and annual allowance rules.• Child benefit/ISA rules.Q6• Adjustment of a trading profit/loss,including capital allowances.• Calculating corporation tax possiblyincluding a straddling CAP.• Large company and instalmentpayments.• Self assessment for firms (duedates for payment/submission).F7• Section A: MCQs will be about halfon standards and publishedaccounts, the remainder spreadbetween consolidations andinterpretations/cash flow. Somerecent MCQs have been on obscureareas, so leave nothing out.Section B• Ratios and interpretations (15marks).• Consolidations (15 marks).• Published accounts (15 marks).• Published accounts orconsolidations (30 marks). • Expect discussion on standards orsome cash flow calculations in thebig 30 marker.F8• Confidentiality.• Conflict of interest.• Audit risk and response, includingratios.

• Internal control deficiencies andtests – sales cycle.• Substantive procedures onreceivables, revenue, provisions.• Audit report scenarios.• Roles and benefits of auditcommittees.• Advising company on improving itsgovernance.• Role of internal audit includingVFM, fraud.• ISA 230, 240, 260, 560, 720.F9• Investment appraisal – NPV withtax and inflation, possibly assetreplacement or ROCE.• Cost of capital – WACC, possiblywith capital structure theory.• Valuation of debt.• Risk management includingPPP/IRP.• Working capital managementincluding cash management.• EMH.P2Q1• Usual CFS or BS or PL in thatorder of 'hotness'.Q2 & 3• Goodwill.• Impairment.• Financial instruments.• Leases.• Revenue.• Non-current assts.

Q4• FA impairment.• Equity accounting.• Changes or sustainability.P3• Strategic analysis.• Strategic choice.• Scenario planning.• Implications of corporategovernance/ethics.• POPIT model of change.• Controls over IT.P4• Hedging interest rate risk usingforward rate agreement, interest ratefutures, options on interest ratefutures and collars. Explanation ofthe Greeks. • Real options – option to abandon,expand or delay using the Black-Scholes option pricing model.• Investment appraisal usingadjusted present values. • Cost of capital using the principlesof Modigliani & Miller prepositions orgeared and ungeared betas. • Calculation of project specificWACC or WACC of combinedactivities.• Valuation of business using freecash flows and Price-earnings ratiomethods. Evaluation of the bestmode of payment - cash offer orshare exchange.

PQ Magazine March 2016 19

ACCA exam tips PQ

Continued on page 20


P5• Building block approach.• Eva.• Technology and performancemanagement.• Reward.P6• IHT with the death estate (BPRand APR and lifetime gifts into a trustand gifts with reservation). Domicile,including deemed domicile andelection treated as UK domiciled.• Group question, involving losses,group relief.• Research and development optionsfor a large enterprise.• Controlled foreign company rules.• Partnership with a partner joining/leaving with opening year rules withlosses.• Change of accounting date.• Capital gains tax includingentrepreneurs’ relief, sharesmatching rules and gift relief.• Group registration for VAT andoverseas aspects of VAT.• Purchase of own shares.• Personal service companies.• Employee shareholderscheme/share option schemes.• Ethics.P7• Planning question for group audit,with business risks, risks of materialmisstatement, audit tests on specificareas.• Giving assurance on forecastinformation.• Audit work on a forensic case.• Accounting matters and auditevidence, 2 or 3 small scenarios.• Ethics and Professional issuesincluding tendering, quality control,threats to independence.• Audit report scenarios.• ISA 250, 550, 560, 600, 610.• Pros and cons of new style auditreport. PQ

Top tips What examinersexpect from youContinued from page 19


PQ ACCA exam tips

The Office for National Statistics estimates thatthe average hourly pay for full-time employeesdiffers between men and women by 14.2%. Soit is not surprising that the UK government isproposing legislation to require all largeorganisations that employ more than 250employees to publish data on pay by gender.

The question is, why is there still a pay gapin 2016? Some of the gap may simply bebecause women tend to work in lower-paidprofessions like social care. However, there areother factors to consider, including:• the pay gap significantly increases for thoseover 40 years old because women take time outto have children.

• women’s careers are further affected by thefact they take a greater share of the day-to-dayresponsibility for bringing up children.• women are less motivated by money and paywhich, for example, is thought to affect thebonuses they earn.

The discrimination in pay is therefore in partbecause employers are not supporting workingmothers enough, that men are not doing anequal share of child care, and that women arenot taking the opportunity to discuss their payand prospects with their employers in aninformed and motivated way.

More and more women are getting to thehighest levels in the biggest companies (every

FTSE100 company now has at least onewoman on their board). More women are nowgraduating from university than men, and morewomen are rightly expecting to be able tomanage both a career and family life in abalanced way. There is every reason to believethe pay gap will fall in future. The addedtransparency from the proposed legislation willput further pressure on large employers toensure they are paying women equally.• Jim Keane is an AIA Achieve e-tutor. The AIAAchieve 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... PAY DISCRIMINATION

P1 .Some candidates are still notcompleting the whole paper, whichseems to worry the examiner! ForDecember there were also limitedattempts to respond to theprofessional marks. This timearound you had to write an article –simple, surely! Q1: Looked at two-tier boards anddiversity and diversity targets onboards. The roles of riskcommittees and strategies tomanage the risked faced were allcovered. The ‘comply or explain’principle was also examined. Q2: Corporate citizenship appeared(it has been examined before). PartB asked about differing options onintegrated reporting. The final partof this question wanted to know thetheory behind the integratedreporting initiative and the sixcapitals in integrated reporting.Q3: Technology risk andenvironmental changes. How tocontrol risks, and how to avoidmismanagement were also lookedat here.Q4: An ethical question, includingbribery and corruption.

P2 .The IASB is spending a lot of timeupdating and improving all aspectsof The Conceptual Framework, so itmakes sense to the examiner thatyou too have good knowledge of it.When it comes to the markingcredit is given for application of theFramework to the questions asked.The example given is theunderstanding of the qualitativecharacteristics.

Candidates also need to have aworking knowledge of thefundamental principles of thestandards and be able to applythem (the ones set out inexaminable documents).Q1: Preparation of a consolidatedstatement of financial position of agroup with an overseas subsidiary.

There was an impairment ofgoodwill in the subsidiary and aninterest free loan, the purchase of

property and a defined pensionscheme. Q2: The practical application ofseveral accounting standards,namely IFRS 5, IAS 36, IFRS 13and IAS 17.Q3: Joint arrangements,decommissioning and accountingfor irrecoverable gas. IRFS 9 andIAS 16 and IAS 10 all came intoplay.Q4: Current issues – IFRS 15.

P3 .Candidates are reminded there areonly a few marks available fortheoretical answers, the bulk of themarks are for interpretation of theinformation provided, said the P3examiner.Q1: Acquisition of a company (thishas been a theme of many P3questions). Many candidates usedthe SAF framework in theiranswers, which the examiner saidwas perfectly acceptable. Amongthe models discussed wereBalogun and Hope Hailey’scontextual model, the culture weband Mintzberg’s organisationalconfigurations. Q2: Investment appraisal wastested here. A cost-benefit analysiswas needed. The second part ofthe question covered projectplanning.Q3: Organisational change and theanalysis and redesign of processes. Q4: Environment threats using aSWOT analysis. The second partlooked at corporate charitabledonations – ethics and corporategovernance. PQ

We take a look at the December Examiner’s reports tosee what was examined and how students fared


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PQ ACCA exams

ACCA has moved from two to four exam sittings thisyear. Rebecca Evans outlines what this means for you

THE FABFOURFollowing a successful pilot last September, the ACCA has now

formally moved to four exam sittings a year. These will be in Marchand September, in addition to the traditional June and December

sittings. This will affect all students studying subjects F5 to P7 (F1 – F4are already on-demand computer-based exams).

This move creates much more flexibility for students, but also much moreuncertainty around when to study and how many subjects to study at onetime. It is important that this additional flexibility does not delay yourprogression because the temptation to defer to the next exam sitting, in justthree months, is significantly greater. To avoid this you should plan yourstudies over the next year to help you remain motivated.

Tuition providers have always recommended that students sit four papersa year and this advice remains unchanged. Up to and including 2015, thiswould mean sitting two papers each exam sitting, meaning that a studentwould qualify within two-and-a-half to three-and-a-half years, depending onany exemptions they may have. A reduction in the number of exams takeneach year will extend the period until qualification and therefore delay anyincrease in earnings as a result of receiving the ACCA accreditation.

With the aim of still sitting four papers a year, what are your options?

Study two subjects every six months, to June and December or Marchand SeptemberThis will give you 12 to 16 weeks to prepare for your exams and still allowyou to know the results from your previous exam sitting before moving ontothe next. This means you can really focus on your new subjects withoutthe worry of the looming results day.

Taking this approach gives you the time to ensure you fully understandthe material you are studying, giving you both a greater chance of passingand retaining the knowledge. This is essential when you move on to thehigher level papers, for example as you move from F7 to P2. It alsoprovides you with the opportunity to apply your knowledge to theworkplace and complete your Practical Experience Requirement (PER).

Studying to two sittings a year provides natural breaks in your studies foryou to recharge your batteries or focus on getting on top of things at work.If you happen to be unsuccessful in an exam you can use the additionalexam sitting, while your knowledge is still fresh in your mind, to take yourresit without delaying your studies (and that pay rise!).

The downside is that you will be studying two subjects at a time, whichcan be demanding, particularly at the Essentials and Options levels.

Study one paper at all sittingsThis approach gives you the opportunity to focus on one subject at a time,which you may find beneficial as you progress to higher level papers.

However, it may be that you have to start studying for your next paperbefore you have the results of your most recent examination. Somestudents may find it hard to focus on the new subject without knowingtheir results. Studying after results are released means an intensive periodof study of just seven weeks!

You might find you have less choice over which subject to sit at aparticular exam sitting if your tuition provider isn’t running all courseoptions four times a year. Planning your studies will be critical to ensureyou keep on track.

Resits could become more difficult as you have no ‘spare’ exam sittings,so you may find yourself resitting alongside a new subject, increasing yourworkload. Alternatively, you might defer a subject you have just startedstudying, putting you at risk of delaying your path to qualification.

Some employers might be concerned at the prospect of this continuousapproach to study as it may negatively impact your work performance ortake you out of the office at busy periods. Many employers report that thefirst quarter of the year is their busiest time so taking time out to studymay be inappropriate.

However, you may find that your employer prefers you to be out of theoffice little and often, rather than for intensive periods. It is always worth aconversation to determine your employer’s preferences.

A combinationSome students may decide to take a more unpredictable approach, and varythe number of subjects they choose to study sitting by sitting, avoiding peakwork period or events in their personal lives.

It is, of course, possible to sit a mix of the two approaches outlined,perhaps sitting one subject to March, two to June and another to December.This would allow a student to sit four exams in a year (and have a summerholiday).

This route gives the benefit of flexibility and spreading the volume ofstudy throughout the year while still allowing for study breaks.

It doesn’t, however, give a clear window for any resits. If choosing thisapproach, it will be essential to obtain your tuition provider’s timetables toensure you can sit the subject combinations you want at the time youwant. It may be that you need to be more flexible with your method ofstudy.

There is no one best approach; everyone faces different circumstances,but before you make up your mind there are a few important things toconsider:• Your workload: do any of the exam sittings clash with busy periods atwork?• Your personal life: do any of the exam periods clash with holidays, etc?• Your employer: what is their preference and when will they give you timeto study?• What suits you and your approach to learning: would you prefer anintense period of study with breaks or continuous study?• What courses is your tuition provider offering to each sitting and arethese offered via your preferred study method?

Taking time to think through these questions will help you to develop themost suitable, and successful, study approach for you. • Rebecca Evans is Head of ACCA at Kaplan Financial

PQ

pq Mar 16 p24 q9 ccm.qxp_Layout 1 11/02/2016 12:14 Page 2

23PQ Magazine March 2016

AAT exams PQ

LET’S GET TECHNICAL

My colleague Nick and I haveregular disagreements aboutwhich type of accounting is

the best. I remind him that managementaccounting is exciting, glamorous andsexy whereas financial accounting is dull,mechanical and could be done by atrained monkey. He replies thatmanagement accounting is often basedon guesswork and estimate whilefinancial accounting is an importantprocess in recording historic results,protecting shareholder value andensuring corporate accountability. He hasyet to realise that he is unwittingly provingmy point.

Management accounting is a keyaspect of your AAT studies and there area number of specific topics you will cover(including budgeting and forecasting,performance evaluation and varianceanalysis, and decision-making), but thearea that I would like to talk about here iscosting.

Costing Management accou nting is Costing is the process of identifying thecost per unit of production. If I am amanufacturer of cars (or cakes or chairsfor that matter) it is incredibly useful toknow how much each unit costs me toproduce for a number of reasons,including:• Valuing units of inventory at the end ofa period.• Identifying where cost savings can bemade.• Perhaps most importantly, setting aprofitable selling price.

A typical starting point of this processis to start breaking down the costs of thebusiness into a variety of sensiblecategories.

Classifying costsThere are a number of different ways thatyou can break down costs into differentgroups; this is the process of ‘classifying’costs.Classifying costs by function: When weclassify costs by ‘function’ we arethinking about in which location withinthe business they were incurred.• Production costs are incurred in thefactory where physical production occurs.• Non-production costs are incurredelsewhere in the business, for example:

– Administration costs are incurred aspart of the administrative function.

– Selling costs relate to the process of

Gareth John explains thecosting terminology you needto understand if you going toget that all-important pass

stimulating demand and advertisingproducts.

– Distribution costs are incurred in theprocess of delivering finished goods tocustomers.

– Finance costs would be thoseincurred as part of raising finance andpaying interest.Classifying costs by behaviour: When wetalk about the ‘behaviour’ of a cost wemean the way that the cost is affected bychanges in the volume of production.• Fixed costs are unaffected by thevolume of production, so stay the samewhether you make 5,000 units or 10,000units.• Variable costs change in line with anychanges in production volume so if youdouble production you double the cost.

One thing to note is that when wedescribe a cost as ‘fixed’ that doesn’tmean it will never change, just that it isnot affected by changes in volume. Forexample, your factory rent can go upeach year but your landlord isn’tinterested in how many cars you make.Classifying costs by element:• Material costs are the purchase ofanything physical.• Labour costs are when we pay for thetime of a member of staff.• Expenses relate to anything other thanmaterial and labour.Classifying costs by nature: This is oftenthe hardest category for students to gettheir heads around. • Direct costs can be ‘traced’ to a singleunit of production. The total of all directcosts is the ‘prime’ cost.• Indirect costs cannot be traced to asingle unit of production but are ‘shared’over many units. Indirect costs are oftencalled ‘overheads’.

You have to remember that categoriesof cost overlap. For example, thepurchase of wheels used in assemblingcars can be thought of as:• Production costs as they are used inthe factory.• Variable costs as an increase in thenumber of cars made will mean morewheels being bought.• Material costs as the wheels are aphysical product.• Direct costs as you could trace fourwheels to a single car assembled.

The monthly salary of a factorysupervisor could be seen as: • Production costs as the supervisorworks in the factory.• Fixed as the monthly salary paid will bethe same no matter how many cars aremade.• Labour costs as they relate to paying forsomeone’s time.• Indirect, as you cannot trace themonthly salary paid to a single car.

The quarterly electricity bill for lightingthe accounts department would be:• Non-production costs as theaccountants don’t work in the factory.• Fixed as the bill will have no link to thenumber of cars being assembled in thefactory.• An expense as it is not material orlabour.• Indirect as a bill for three months willbe shared over all of the production inthat quarter • Gareth John is a tutor/director withFirst Intuition and helpsto manage their AATdistance learningprogramme. He was PQ’sAccountancy Lecturer ofthe Year in 2011

PQ

PQ Mar 16 p23 technical q9_Layout 1 10/02/2016 12:51 Page 23

Example of a Rio potential triggerYou get an e-mail from Rita:

From: Rita Oliveria, CEOTo: Senior Finance Manager Subject: A new franchise model for the US

Dear SFM

Ralf has come up with a proposition to expand RIO into theUSA using a franchise only strategy. Apparently USfranchisees expect things to work a little differently than weare used to so he has suggested the following:

• Open 25 franchise shops across the USA main citiesover the course of the next twelve months.

• RIO will provide loan finance to assist individualswishing to purchase a franchise, the average cost of whichwill be $100,000. Loans will also be available (up to amaximum of 50% of the purchase price) to cover the cost ofthe franchisee acquiring suitable freehold or leaseholdpremises. The total sum required for the property loanfacility is estimated by the treasurer of RIO to equal $4.8million.

• RIO to charge commission to the franchisees at a rate of1% of sales revenue, and also to charge a net margin of12% (of retail value) on the products supplied to the outlets.

• Planned sales from the new USA outlets are estimatedto equal $26 million over the next twelve months.

• It is estimated that 60% of the new outlets will deliverincome on plan, 10% will deliver 10% below plan and 30%will deliver 20% below plan.

• It is estimated that there is a 40% probability of no loandefaults, with the worst case being a 30% probability of 4franchisees defaulting on their loan.

• The USD is expected to strengthen against the euro by5% over the next 12 months.

SM… Could you write me a report containing your views ofthe risks that RIO might face in choosing to expand into theUSA via the use of Ralf’s new franchising model.

Kind Regards

Rita


PQ CIMA case

The SICS for February 2016 sittersis proving to be a challenging butinteresting test. Entrants need to

be solid on the underpinning requirementof ethics, integrity and professionalism.You then are set a series of tasks as yourvariant moves through time, challengingyou to prove you have competence ineach quadrant of expected skills:

• Technical skills• Business Skills• Leadership skills• People skills

The answers you give will be long formand typed into the exam system, they willconsist of all forms of moderncommunication, including e-mails,reports and briefing notes. In November2015, (variant 4) students even had todraft a press release. This is notclassically what an accountant expects tobe training for, but be prepared!

Read the unseen daily!You need to be 100% familiar with theRio unseen material. Time pressure issignificant in this exam and you shouldnot expect to have time to look things up.You need to use the pre seen, theunseen and your own skill as a nearlyqualified accountant to structure youranswers.

To earn a ‘Strong’ on this task you need:1. Familiarity with the unseen

• Business aim 4 (page 15) ‘To delivergrowth through the development of newmarket opportunities’.

• The five-year business plan(appendix 7). What is the planned newnumber of franchise stores in 2016,planned revenue growth, planned profitmargin growth?

• What is the current ROCE that Rio isachieving? (From your analysis of theaccounts in Appendix 4).

• The Franchise model employedcurrently for the Asia growth (page 7).

• Who is Ralf?2. Ability to analyse the unseen

• Can you identify the task (here it’s asingle but each section on the day willhave more than one task of course).

• Recognise that the franchise modelsuggested is very different to the pre seenmodel. A new different risk profileemerges.

• Think upside as well as downsiderisks.3. Have the technical capabilitiesneeded

• Basic risk mapping knowledge.• Understanding loans to the

franchisees are assets not liabilities fromRio’s perspective.

• Recognise the credit risk.• Basic risks of franchises.• Use of expected values.• Currency risk – strengthening

implication of the USD.4. Write in a professional, flowing andappropriate manner

• Your communication needs toappropriate, check your audience. Areyou getting the tone appropriate?

• How much depth is needed and howtechnical should you be?

• Be wary of making generic points.You answer must be relevant to Rio.

• Use examples throughout to explainand illustrate your points.

Probably the most important skill on theday to master is to answer the tasks setwith sufficient application to the companyconcerned. If you address the tasks inhand you will pass as a good answer willautomatically cover the competencies.Remember, a good answer is notnecessarily a long answer. Quality is keyand planning leads to quality. If youwould like to see my suggested answer tothis trigger and task please email me:[email protected] • Clare Finch is a partner in HTFTPartnership and P3 tutor on the HTFTSICS team. HTFT’s Strategic case teamis led by theexperienced andaward-winningtutor JennyHughes. Jennywas PQ Lecturerof the Year in2010

PQ

Ethics, intergrity and professionalism

RIO: WHAT TOEXPECT

Clare Finch gives you the lowdown on the Strategic Integrated Case Study

PQ Mar 16 p22 q9 ccm.qxp_Layout 1 11/02/2016 12:15 Page 2

25PQ Magazine March 2016

student society PQ

The AAT Distance LearningFacebook Group has a newname – it has gone all

‘independent’. PQ magazine spoke toone of the groups founders, JoanneParry, who empathised the groupcontinues to go from strength to strength,with their sights set on reaching 5,000members by this summer.

The impressive membership, alongwith a 2015 PQ award, has all happenedbefore the group’s third birthday – and tothink they had just 100 members whenthey celebrated their first birthday!

The group has attracted a diverserange of AAT students and the new namerepresents just how the group hasevolved. Parry felt it was the right time tochange the name for two main reasons.She said AAT Students IndependentGroup better reflects that all studentsstudying AAT use the group, not justdistance learners as was originallyintended. The other big reason is thatFacebook doesn’t allow you to changethe name of a group once it has reached

5,000 members. Parry added that thename shows it represents all AATstudiers but is independent of the AATitself, training providers and colleges.That is really key for her.

She said: “Our members are no longerjust distance learners. We have beenvery keen to welcome members fromclassrooms and online, and students withor without training providers, along withrepresentation from AAT staff members,training providers, career advisors andspecialists in their field. Many of thesevery generously give their time to helpthe students and make the group thesuccess it has become.”

She explained that as well as general

SIG: AAT STUDENTS ARE GO!The AAT Distance Learning Group on Facebook has changed its name to theAAT Students Independent Group and has big plans ahead for 2016

discussions, the group also hosts liveQ&As with specialist guests coveringsubjects from specific modules to self-employment to course and eventdiscounts. Most importantly of all,members have access to people who areready and armed with answers 24/7.Parry didn’t want to forget the fun sideand “the usual banter among the jokersof the pack”.

So if you’re studying AAT find them onFacebook and join the growing groupwhere students support students.

Perhaps the best endorsement for thegroup came from a student user who justsaid: “I am not bothered by the namechange just as long as it is here!” Andyou have to love how someone elsedescribed it: “The helpful and sometimescrazy support group for AAT students”.

You would be crazy not to join! PQ

Prize guys: JoannaParry at the PQAwards 2015

PQ Mar 16 p25 q9_Layout 1 10/02/2016 12:52 Page 2

26

PQ ATT winners list


The Association of TaxationTechnicians, the oldest and largestbody concerned solely with taxcompliance, has announced theresults of its examination taken by1,018 candidates in November.

The Association reports that ahigh standard of performance wasachieved by many candidates. ItsPresident, Michael Steed,commenting upon the results, said:“It gives me great pleasure tocongratulate the successfulcandidates from the Novembersitting of our exams.

“In total candidates sat 1,478papers and 1,077 passes wereachieved with 78 distinctionsawarded for exceptionalperformance.”

As a result 79 candidates havenow completed the examrequirements for membership anda further 173 candidates havecompleted the exam requirementsfor membership by passing the twoe-assessments since the last passlist was issued in July 2015.

The ATT’s modular system allowscandidates to study at their ownpace, whether they are workingtowards full membership by sittingthe two compulsory and oneoptional paper together with its twoe-assessments or simply wishing toobtain one or more Certificates ofCompetency in their specialist area.

Medals and Distinctions areawarded for each examinationpaper subject to the discretion ofCouncil and the attainment of asatisfactory standard, regardless ofwhether the examinationrequirements for membership have

been met (with the exception of theAssociation Medal): • The Association Medal for thebest overall performance takingthree written papers at one sitting,including having passed both e-assessments in ProfessionalResponsibilities & Ethics and Law:Amy Wallace (Deloitte LLP,Reading)• The Ivison Medal for the highestmark in the paper on PersonalTaxation: Nora Markova (EY,London)• The Jennings Medal for thehighest mark in the paper onBusiness Taxation & AccountingPrinciples: Rajandeep SinghNandha (Blick Rothenberg LLP,London)• The Collingwood Medal for thehighest mark in the paper onBusiness Compliance: RebeccaClaire Ellis (EY, London)• The Stary Medal for the highestmark in the paper on CorporateTaxation: Liam Nicholson (RSM,Stoke-on-Trent)

• The Kimmer Medal for thehighest mark in the paper onInheritance Tax, Trusts & Estates:Geoffrey Thomas Randall (PrinceEvans Solicitors, London) • The Gravestock Medal for thehighest mark in the paper on VAT:Colin French (Hart Parry Cyf,Bangor) • The Johnson Medal for the bestoverall performance when passingboth the ProfessionalResponsibilities & Ethics and Lawe-assessments within a six monthperiod: Rebecca Anne ElizabethWard (EY, Newcastle Upon Tyne)• The LexisNexis Prize for thehighest total marks when takingthree written papers at one sittingand obtaining the highest totalmarks on those three papers:Rebecca Claire Ellis (EY, London) • The President’s Medal is awardedat the discretion of the President toan outstanding candidate orcandidates not otherwise eligible fora prize: Christopher Gaunt(Northampton)

THE ASSOCIATION OF TAXATION TECHNICIANS

Distinctions

Awards

1 – Personal TaxationKerry Louise Annand (Edinburgh)Amy Louise Armitage (Edwin CoeLLP, London) Hannah Louise Bulley(Wokingham) Felicity Butler (Southfields) Rebecca Claire Ellis (EY LLP,London) Christopher Gaunt (Northampton)Rebecca Glass (Doynton) Angela Greenhough (AngelaGreenhough Accountancy, Saltash)Natalie Hallett (Dorchester)Christopher William Harden (GrantThornton UK LLP, London) Lucy Anne Howley (Duncan &Toplis Ltd, Melton Mowbray)Judah Blaise Daniel Lyons(Castleford) Penelope Mary MacDonald (JeffreyCrawford & Co, Edinburgh) Jessica Charlotte Mander(Dickinsons CharteredAccountants, Rickmansworth) Nora Markova (EY LLP, London)Benjamin Stuart John Oliver (FieldSeymour Parkes LLP, Reading)Reshma Patel (London)Vasiliki Peirounaki (EY LLP,London) Daniela Monica Radu (Park LaneAccountants, Chippenham)Lewis Richardson (Wakefield)

Pam Romanis (Addlestone)Jane Thomas (Salford) Amy Wallace (Deloitte LLP,Reading) Suzanne Elizabeth York (Kettering) Abbie Lorna Yule (Mazars LLP,London) Lei Zhang (Buzzacott LLP, London)

2 – Business Taxation &Accounting PrinciplesHannah Louise Bulley(Wokingham) David Kazimierz Paul Emery(Brebners, London) Christopher Gaunt (Northampton) Emma Charlotte Gilbert-Smith(SWAT UK Ltd, London) Sara Giralt Arres (Deloitte LLP,London) Fiona Kathryn Grange (Preston) Heather Griffin (EY, Reading) James Groutage (London) Susan Halsall (Northampton) Gareth Jones (Bicester) Katherine Malone (PwC, Cardiff) Jessica Charlotte Mander(Dickinsons CharteredAccountants, Rickmansworth) Jiten Mistry (Harrow) Rajandeep Singh Nandha (BlickRothenberg LLP, London) Kristiana Newton (Deloitte LLP,Southampton)

Adam Palmer (Chepstow) Lewis Richardson (Wakefield) Terence Sivakumar (WestletonDrake, London) Kerri Thornton (Morgan Cameron,Witney) Amy Wallace (Deloitte LLP,Reading) Alice Whalley (London) Stephen Wright (Lubbock Fine,London)

3 – Business ComplianceDarren David Alcock (EY,Newcastle Upon Tyne)Laura Bills (PwC, Aberdeen) Sinead Carvill (KPMG, Belfast) Rebecca Claire Ellis (EY LLP,London) Alison Greer (KPMG LLP, Glasgow)Christopher William Harden (GrantThornton UK LLP, London) Rebecca Louise Hreben (EY LLP,London) Laura Hume (PwC, Edinburgh)Mandisa Libazi Ndebele (EY LLP,London)

4 – Corporate TaxationSarah Marie Bloomfield (GrantThornton UK LLP, Cardiff)Stefan Burgess (Ashford)David Clark (London)Christopher Gaunt (Northampton)

James Groutage (London)Georgina Haynes (Cheltenham) Harpreet Kaur (Brebners, London)Aaron Mehta (Hounslow)Solomon Steven Muhumuza(Wolverhampton) Kristiana Newton (Deloitte LLP,Southampton) Liam Nicholson (RSM, Stoke-on-Trent) Hannah Reason (Old MillAccountancy LLP, Wells) Terence Sivakumar (WestletonDrake, London) Sophie Theodosiou (Mazars LLP,Milton Keynes) Matthew Tomlinson (RSM, Stoke-on-Trent) Amy Wallace (Deloitte LLP,Reading)

5 – IHT, Trusts & EstatesSarah Jane McBrearty (Alex PicotLtd, St Helier, Jersey) Geoffrey Thomas Randall (PrinceEvans Solicitors, London) Nicola Whyte (PwC, NewcastleUpon Tyne)

6 – VATColin French (Hart Parry Cyf,Bangor) Kishen Patel (EY, London)

PQ Mar 16 p26 q9_Layout 1 10/02/2016 12:54 Page 14

Two choices

for tax!

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To Register TodayCall: 020 7252 9331

Visit: www.thetrainingplace.orgEmail: [email protected]

Practical Training Courses: Ÿ Sage Line 50Ÿ Sage PayrollŸ Excel SpreadsheetŸ Value Added Tax (VAT)Ÿ Management Accounts Ÿ and othersŸ

Daytime, Evening and Distance Courses:Ÿ AAT Level 2 Certificate in AccountsŸ AAT Level 3 Diploma in AccountsŸ AAT Level 4 Diploma in AccountsŸ

FREE Apprenticeships: Ÿ AccountingŸ Business Admin Ÿ Customer Service

MAKE REJECTION A THING OF THE PAST WITH PRACTICAL TRAINING AND

GUARANTEED WORK PLACEMENT

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027_PQ 0316_PQ 1209 000 05/02/2016 12:47 Page 7


PQ ICAEW spotlight

To BPT or not to BPT?Studying strategicallyBPT has traditionally enjoyed a fearsomereputation among students, regularlyachieving the lowest pass rate of any ACAprofessional level paper. The syllabus islong, difficult and often not of muchrelevance to the student’s day-to-daywork (unless they work in tax, of course!).

Based on our review of the samplepapers now available on the ICAEWwebsite, both BPI and BPB will be muchmore focused on audit, financial reportingand strategic analysis than the BPTpaper (which is obviously exclusivelyabout tax).

This is crucial for students to bear inmind because audit, financial reportingand strategic analysis are the bread andbutter of both the Corporate Reportingand Strategic Business Managementadvanced level papers – whereas UKtaxation is not tested in any form afterBPT.

Looking in particular at the strategicanalysis questions in the BPB samplepaper, one could almost be reading aStrategic Business Managementquestion. The detailed review of IFRSrules on financial instruments in the BPBand BPI syllabuses will also be useful forthe IAS39/IFRS13-style questions, whichare a favoured area for the CorporateReporting examiners.

Overall, if you have a free choice as towhich paper to sit, and you also have noparticular need for detailed tax planningknowledge, it may be worth consideringwhether you can study strategically bytaking one of the new papers, therebybecoming familiar with question stylesand technical content which, unlike BPTknowledge, can be ‘recycled’ in your nextlevel of exams.

The guinea pigsNo one likes to be among the first groupof students to sit a new paper: the firstset of BPB and BPI ‘guinea pigs’ willhave no past papers to guide them as to

how to revise and answer the questions.The relative lack of provision of BPB andBPI courses by tuition providers in 2016is also likely to be a concern for students.

We would expect this to lead to someunusual pass rates for the first threesittings in 2016, but it will be interestingto see how these compare with BPT overthe longer run – with potentially easiersyllabus content and the advantage ofgreater potential to ‘recycle’ knowledgeand techniques for subsequent papers, anoticeably higher pass rate for BPB andBPI could see many tax tutors out of ajob! • Martin Johnson is the founder of ACASimplified

PQ

The ICAEW is introducing two new papers this summer,covering banking and insurance. Martin Johnson explains all

From June, the ICAEW ACAqualification will offer studentstwo alternatives to the current

Business Planning: Taxation (BPT) paper.The launch of the Business Planning:Banking (BPB) and Business Planning:Insurance (BPI) papers will provide theACA with the greatest level of early-careersectoral specialisation of any UKaccounting qualification.

Bringing back sexy It is not the hardest thing in the world tocreate an accountancy paper that is moreexciting than a taxation paper. Even so,the ICAEW’s choice to offer specialisms inbanking and insurance appears to betargeted at the ‘sexier’ end of thefinancial services market. Following thecredit crunch there has, arguably, neverbeen a greater need for qualifiedaccountants possessing expert knowledgeof the latest banking and insuranceregulations.

The decision to target these specificmarkets rather than the many othersectors that could have been chosen(Business Planning: Farming or BusinessPlanning: Manufacturing anyone?) is alsoprobably part of a strategic ICAEW plan toappeal to a sector which (once fullyrecovered) will surely serve as one of theprincipal sources of industry demand forqualified accountants.

The option to study BPB and BPI willtherefore be welcomed by ACA students:ICAEW has targeted markets that are setto grow, offering many job opportunities.

It will, however, take some time beforeemployers and recruiters in thesemarkets become fully aware of the way inwhich the ACA has become differentiatedfrom the alternatives.

Different employers are likely to takedifferent approaches, so we expect to seeplenty of discussion within the studentcommunity once it becomes clearerwhether employers will requirespecialised ACAs.

pq Mar 16 p28 q9_Layout 1 10/02/2016 12:55 Page 2

If you are starting to get itchy feetor feeling a little less motivatedwhen Monday mornings come

around it can be difficult to decidewhether it’s time to act on those feelings and seeif the grass is greener elsewhere. How do youknow whether you would be happier if youchanged jobs, or whether you’d be better offstaying put? Here are five things to consider…

ChallengeIf you look back over the past couple of yearsand you are still in the same routine producingthe same work, it is probably time to consideryour options. You may like the routine andconsistency of the job, but that can turn toboredom.

At this point your enthusiasm for your role islikely to wane, and this can ultimately affect yourperformance, too. Finding opportunities todevelop your skills and expertise in your currentrole or taking on more responsibility elsewhere inyour organisation will ensure that you arechallenged. Start to consider an external careermove if these opportunities are not available toyou where you are.

PerformanceSometimes a poor performance review, or feelingdownbeat on your own accomplishments, canspur you to look to move jobs.

If you are in this situation you should try toremove the emotion from the situation andconsider whether you can improve yourperformance in your current role. Of course, thismay not always be possible, so if you do decideto move look for an environment where you feelyou will be able to thrive.

PromotionIs there scope to progress in your currentorganisation? You told us in the Hays Salary &Recruiting Trends 2016 report that careerdevelopment is most important to you (36%)when considering a new role, so this issomething you should think about carefully asyou move along in your career. You also told us(99%) that you feel you have the skills to fulfillyour current role, but that nearly half of you(46%) don’t feel that there is scope forprogression in your current job.

This is where your career plan comes intoplace. Think about where you want to be in thelong term or even just where you want your nextbut one job to be, and if there is a way that youcan take a step towards that in your currentorganisation. If you can’t see a way to moveupwards, then it might be time to moveelsewhere.

TeamSometimes a change in team, or team dynamic,can influence your decision to stay or go. A newboss, new colleagues or a restructure canchange the dynamic of the team andenvironment that you had known. In thisinstance, consider whether this will settle downor if permanent changes are under way. Stayingin a job where there are extreme conflicts canbe stressful and demoralising. Don’t let thingsget this bad before you decide to make a move– it will impact your confidence and your abilityto secure another role.

RewardIf you are enjoying your role but feel you areunderpaid – over half of PQs (55%) told us theyweren’t satisfied with their salary – arm yourselfwith knowledge of the market.Benchmark your salarywith the Hays UKSalary &RecruitingTrends 2016report. The onlinetool lets you compareyour salary with your peersand prepare for a conversation

with your boss about your next step. Always try to address this first before deciding

to look at the external job market as you willthen know for sure where you stand.

Remain professional and put a business casetogether if necessary and your boss will respectyour professionalism for bringing this to theirattention even if they can’t offer you immediateresults.

Don’t discount other benefits they might beable to consider such as a performance relatedbonus, flexible or home working or furthersupport for training and development that couldimprove your current role as well as futureprospects.

If you are unsuccessful in your requests forincreased pay, benefits and cannot see room todevelop, it may be time to look elsewhere tocontinue your career journey. • Karen Young, Director, Hays Accountancyand Finance

About Hays UK Salary and Recruiting Trends 2016Data compiled using data gathered during

2015 from Hays offices across the UK,based on job listings, job offers and

candidate registrations. Surveyresponses from over 20,000employers and employees fromorganisations of all sizes throughoutthe UK. Go towww.salaryguide.hays.co.uk

PQ

Karen Young discusses how candecide whether to stay or to moveon to a new job

29

careers PQ


SHOULD I STAY ORSHOULD I GO?

PQ Mar 16 p29 q9 ccm.qxp_Layout 1 11/02/2016 12:19 Page 14


careers PQ

30

Work it Out With a Pencil:Outrageous Tales from TwentyYears as an Accountant byTimothy Timpkins (Xlibris,£13.99)

Author Timothy Timpkins, formore than 20 years amanagement and projectaccountant, proves himself anatural story-teller andraconteur in this funny andsurprisingly moving book.

The opening chapter ispossibly the weakest; it sets thescene but the comedy is gentle(at best). But once Timpkinshits his straps the stories comesthick and fast, with some laugh-out-loud, and even occasionallyshocking anecdotes. Anexample: in one of the earlierchapters, our hero is beinginterviewed for a position he

very much wants. All is goingswimmingly until he is takenaback by a request from theinterview panel to “tell us ajoke”. Not being burdened witha huge repertoire, the authorcomes out with a gag that isinvolves a husband, wife, dogand fishing trip that is far toofilthy to be repeated here (withthe emphasis on gag).

Timpkins’ memoire (which ismore concerned about thepersonal and the social than thenitty-gritty of accountancy) is acandid affair. Boys will be boys,and numerous nights on thetown with colleagues aredescribed in lurid detail, withno punches pulled. These boyscannot be described aspolitically correct.

The main narrative of thiswork traces the author’s career

path, and it isinteresting to notehow one role led toanother, and thenanother. And whilethere are plenty oflaughs to be had, thisautobiographical book is lacedwith sadness and poignancy too.It embraces whistle-blowing,infidelity, divorce and mental ill-health; the author writesmovingly of his heartbreak whenhis wife leaves him for acolleague at her workplace.

Timkins has now quitaccountancy; it seems he has,despite this book having somerough edges, a promising careeras a writer ahead of him.PQ rating 4/5 A great read foraccountants and non-accountants alike, funny andmoving in equal measure

Can they read that? European judges have ruled

that employers can read workers’private messages sent via chatsoftware and webmail accountsduring working hours. TheEuropean Court of Human Rightssaid that a firm that read itsemployee’s Yahoo Messengerchats sent while at work waswithin its rights to do so. Thejudges explained that theemployee had breached the

company’s rules and hisemployer had the right to checkon his activities.

Suffering with RTI UK accountants appear to

be suffering from Repetitive TaskInjury (RTI) as financedepartments fail to automaterepetitive tasks. A survey byBlackLine found that nearly two-thirds (64%) admitted thataccountants often leave jobs

because they are not happy withthe manual, repetitive work.BlackLine’s CSO, MarioSpanicciati said: “RTI is a growingconcern for accounting. The nextgeneration of accountants aredigital natives with advancedtechnology at their fingertips. Inorder to retain staff and entice thenext generation into theprofession, finance departmentsneed to move away from outdatedmanual processes.”

In brief

The PQ Book Club: books you should read

QI have worked at the same firmfor two years as a PQ and I am

half way through my exams. I startedlife as an AAT then moved to ACCA.Recently a part qualified ACCA wasappointed above me and now seemsto be blocking any chance ofpromotion. I’m a bit miffed. Theydon’t seem to be that work-savvy,although they are more exam-qualified than me. Should I hangaround and see if the new PQ staysor should I start looking for pasturesnew? I do believe I could change, butalso feel the pressure of exams and anew job might be too much tohandle. This is my first proper job, soI still feel loyalty to everyone here. Jordan says: I understand the

position you find yourself in,having seen a couple of candidates insimilar scenarios. First, I wouldstrongly recommend you air theseconcerns to your manager. It’s not abad thing to be ambitious and seeyourself progressing within thecompany, so be honest in your(confidential) conversation with yourline manager. A new person comingin should not be a block to yourdevelopment, and it may be therewas a specific business requirementfor someone with a certain level ofqualification.

If it becomes apparent that youaren’t going to be able to progress asyou wish you need to do what is rightfor the development of your career,and it might be best to move on.Don’t forget, a new company shouldfully support your transition into thebusiness, and will do everything theycan to ensure you pass upcomingexams at the first attempt. CandidatesI have recently placed havesuggested their transition into thenew role was smooth and that nodisruption to their studies took place.I’m confident that if you do make thedecision to move on you shouldn’tfind it too difficult to adjust topastures new! • Got a problem at work, or worriedabout your career path? Contact PQmagazine with your ‘issues’ – [email protected]

Blocked forpromotion? Talk tothe boss, saysWalker Dendle’sJordan Dodds

YOUR CAREERPROBLEMS SOLVED– THANKS TO

Samalka Athuraliya, 24, a senior associate based in Colombo, Sri Lanka. She got CIMAqualified in just two years, having switched from equity research to investment banking.Her claim to fame is that she recently became CIMA’s 100,000 member!

Life at Acuity stockbrokers

What time does your alarmclock go off? I try to wake up asearly as possible to get a fewhours of work done in preparationfor my CFA exam in June. I alsoswim or go for a run.What’s the first thing you dowhen you get to your desk? Read the news. It’s important tostay on the ball.What’s on your desk? Just mylaptop and my notepad. What’s the best thing aboutwhere you work? The location,in the heart of Colombo.Where’s your favourite placeto go for lunch? I usually take asnack from home.What (or who) can you seewhen you sit at your desk? Myboss! Which websites are your

favourites and why? Newswebsites and YouTube.Which websites do you usefor work? No specific ones, butthe internet is crucial for my work.How many hours a week doyou spend in meetings? Itranges from a couple of hours aweek to perhaps 5-6 hours duringa busy week.What time do you leave theoffice? I leave as soon as thetasks for the day are done.How do you relax? With a goodbook or movie. I also helpunderprivileged people byvolunteering at various events. What’s your favourite tipple?Gin and tonic.How often do you take workhome? I try not to take workhome but do occasionally.

What is your favourite TVshow? Game of Thrones andGrey’s Anatomy.Summer or winter? Living inthe tropics I’ve never had to workin winter but I doubt I’d enjoy it.Pub or club? I like unwindingmidweek at a pub and the end-of-the-week celebration at a club!Who is your hero? My mother –the strongest and most talentedwoman I know. If you had a time machine,where would you go? Back towhen I spent the holidays with myextended family. Nothing beats alaugh with the cousins and storytime with the grandparents.If you hadn’t chosenaccountancy, where mightyou be? A social worker.

PQ Mar 16 p30 q9 CCM.qxp_pq oct07-p31 10/02/2016 13:01 Page 31

stayingone stepaheadManagement Accountant

Automotive, Surrey

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031_PQ 0316_PQ 1209 000 03/02/2016 15:49 Page 7

I need to findpqjobs.co.uk now!

PQ jobs pqjobs.co.uk

Your jobs board032_PQ 0316_PQ 1209 000 08/02/2016 12:51 Page 7

If you’re one of the 55% of part-qualified finance professionals who aren’t,

check out the Hays UK Salary & Recruiting Trends 2016 report.

With responses from more than 20,000 employers and employees,

this is the most comprehensive review of pay, benefits and market

conditions across the UK, including:

• Salary data across a range of finance professions and locations

• Personalised salary comparison tool specific to your role and location

• Detailed market insights

• Expert opinion from respected UK institutes and professional bodies

• Personalised job search

To find out more and discover what will satisfy you, visit salaryguide.hays.co.uk

ARE YOU HAPPY WITH YOUR SALARY?

salaryguide.hays.co.uk

© Copyright Hays Specialist Recruitment Limited 2016. HAYS, the Corporate and Sector H devices, Recruiting experts worldwide, the HAYS Recruiting experts worldwide logo and Powering the World of Work are trade marks of Hays plc. The Corporate and Sector H devices are original designs protected by registration in many countries. All rights are reserved. NQ-14670

About you

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Study please tick a box in 1A or 1B

1A Please indicate accountancy body you belong to and tick the box of the next set of exams

you are hoping to sit

ACCA ▫ CAT ▫ F1-3 ▫ F4-F9 ▫ P Papers

CIMA ▫ Certificate ▫ Operations ▫ Management ▫ Strategic ▫ T4

CIPFA ▫ Certificate ▫ Diploma ▫ Strategic

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1B Studying for an accountancy degree/MBA/MSc ▫ Year 1 ▫ Year 2 ▫ Year 3

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033_PQ 0316_PQ 1209 000 03/02/2016 14:36 Page 7


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 11 March. The main draw will take place on Monday 14 March 2016.

TO ENTER THESE GIVEAWAYS EMAIL [email protected]

Memory stickOur stock of ‘I Love Tax’ t-shirts hasgone, and we only have a few ‘I Love PQ’mugs hanging around! But what we dohave for you is a PQ magazine memory stick. Our stick has 2GB ofmemory and each one comes with its own lanyard so you can neverlose it. We are giving away five sticks this month.To be in with a chance of being sent this great giveaway send yourname and address to [email protected]. Head up youremail ‘PQ Memory Stick’.

Just be mindfulFeeling exam nerves? Well, we have a way of reducingall that stress with a wonderful ‘Colour Yourself toCalmness’ book from award-winning artist Sue Coccia.We have three copies of this stress-reducing animalmotifs colouring book in this great giveaway.Email [email protected] along with yourname and address. Head up your email ‘Colour incalm’.

PQ MAGAZINE HAS THE TOP QUIZOur annual bumper quiz always goes down well with readers.Perhaps it was the fact that they could win a Beats Pillspeaker that helped this year. Well done to our threewinners: Izabela Kaczynska from Warwickshire; SimonParker, Preston; and Lisa Robertson, Croydon. They are nowthe proud owners of a new speaker in PQ red! Our quiz wasso good this year one reader even asked to use it for theirlocal pub quiz!

DAVID JONES ‘THEACCOUNTANT’One story told after the sad news of DavidBowie’s death was a trip he made to hischildhood home in Brixton in 1991. Hereportedly told guitarist EricSchermerhorn: “It’s a miracle, I probablyshould have been an accountant. I don’tknow how this all happened.” We are justglad it did! There seems to be a themedeveloping here – south London rapperTinie Tempah revealed recently that hetoo dreamed of being an accountant.

Last year we introduced you to Caitlin,probably our youngest reader, who waspictured engrossed in her PQ magazine

rather than The Gruffalo! Her mum anddad (David and Julia Airey) are bothCIMAs, for their sins. Caitlin has abrother now, Dominic, who also seemsto love the office life! He was recentlytaken to work to help make some bigdecisions at Apatech in Elstree, Herts.We have a picture of him advisingJulia’s colleague Anatilde. We note thatlike his father he chews his pen to aidhis concentration!

EARLY START

A DUTCH SANDWICH PLEASEIf you want to know how a ‘Dutch sandwich’ works then youneed to watch The Town That Took on the Taxman on ‘catch-up’ TV. The programme follows a group of small businessesfrom Crickhowell as they try to get the same corporate taxbenefits as those offshore companies such as Google andAmazon. They decide to go offshore in the Isle of Man and useintellectual property rights as a way to avoid any tax. This iswhere Holland comes in, as the country has no withholdingtaxes. We discover nearly 15,000 companies have set upsubsidiaries in Holland just for this reason. Well worth a look.

OH YES THEY ARE… Over 200 PwC staff are taking beancounting more literally for one week onlyas they take to the boards in Jack andthe Beanstalk, the firm’s 30th annualcharity panto production. The sell-out

production runs for eight days atLondon’s Peacock Theatre before uppingsticks to Birmingham. Some 8,000children, many from inner city schools,will get to see this year’s show. More than130,000 children have seen PwC pantosduring its three-decade run.

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Documents

PQ magazine, March 2016