nq magazine, october 2015

THE VOICE OF ALL NQs

ETHICS CIMA’s Tanya

Barman on ethical issues fi rms need to

address

DEATH OF THE ACCOUNTANT?

How the role of the accountant is

changing

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October 2015

PLOTTING YOUR COURSE TO

PARTNER LEVEL Page 8

COULD YOU BE THE NEXT NQ OF

THE YEAR? KYLE TYRRELL WON IN

2015 – AND HIS CAREER REALLY TOOK OFF. AND VOTING IS OPEN

NOW FOR 2016P16 & 18

P12

P23

P20P20 How much water does it take to make a cup

of tea? And what are the implications?

SUSTAINABILITY

INDUSTRY WATCH

Tackling the challenges

facing fi nance functions in oil

and gas0

ALL THE NEWS YOU NEED

and a whole lot more Pages 5 and 7

hays.co.uk/nq

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AF-13759 NQ Magazine - 25 09 2015.indd 1 18/09/2015 15:55

COMMENT

Time to win the top prize!There aren’t many opportunities to shine a light on your hard work. But with our NQ of the Year award you really will be able to help your CV stand out. It really is easy to enter and nomination time is right now. Read all about what you need to do on page 16.

Our current ‘champion’ is Kyle Tyrrell and being NQ of the Year has had a big impact on his career. You don’t have to take our word for it though, as he tells all in this issue.

Also in this issue we take a look at the ICAEW’s new guide on how to plot your course to partner level. Some of you may want to get there! No one, we hope, wakes up one morning and decides they want to become a partner (we may be wrong). The guide points out that getting to partner level isn’t just about technical knowledge. You will need to be part salesperson, part strategist and part innovator as well. Becoming a partner isn’t for everyone though – your personal effectiveness ‘tool-bag’ might not be up to it!

My favourite article this month can be found on page 20. Do you know how much water it takes to make a cup of tea? That nice brew with milk and two sugars uses 52 litres!

With 60bn cups consumed in Britain every year this adds up to a footprint of around 3,0000bn litres of water. On its own this isn’t particularly a problem. But if you fast forward to 2050 when water demand is projected to grow by 55% you can see there are problems ahead. I may need to sit down with a nice cup of tea to contemplate these problems – but maybe hold the milk and sugar!

Graham Hambly, Editor ([email protected])

EDITOR’S COMMENTS

NUMBER CRUNCHING

the percentage of working

accountants who feel their job is threatened by automation P5

35%

the number of companies that

told CIMA they have a code of ethics P13

82%

the amount of water needed to make a cup of tea with milk and two sugars P20

52 litres

all we need for your entry to the NQ of the Year awards, which are launched this month P16

250 words

number of promotions our NQ of the Year, Kyle Tyrrell, has had at AXA Insurance P185

the UN wants to keep global warming below this temperature with a legally binding agreement P10

2˚ C

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5

NEWS

NQ Magazine October 2015

Is bank accounting fl awed? The basis of UK bank accounting is deeply flawed, according to top QC George Bompas. In a study commissioned by the Local Authority Pension Fund Forum (LAPFF), Bompas claims the FRC and ICAEW used defective logic in supporting the present accounting standards.

He is worried that unrealised gains will be passed off as ‘profits’, which is contrary to current company law rules in both the EU and UK. Shareholders and creditors also need to be able to discover what is and what isn’t distributable profits in the accounts, and not be pushed into other ‘records’, which they may not have access to.

Additionally, the QC is concerned that the IFRS applies only a vague test of ‘usefulness’ to the accounts as a whole. This is despite the fact that UK and EU law requires a ‘true and fair’ view of the key numbers in the accounts – profits, losses, assets, liabilities and financial positions (ie net assets and capital).

The LAPFF is now calling on the FRC to back its call to withdraw its support for the endorsement of IFRS 9 in its current form.

Should a CFO ever trust a robot? The responsibilities of a CFO often make them under-standably risk adverse, but according to a new report from ACCA, for many finance leaders ‘hiring’ robots may be the next step in delivering a more effective and efficient business.

ACCA’s head of corporate sector, Jamie Lyon, said that robotics is evocative, although many see it as the next natural step in the evolution of business process delivery. However, when talking to finance leaders some are clearly not sure about the benefits of wholesale automation. “Many still can’t understand what it really means for finance”, said Lyon.

Advocates are claiming that robotics in finance could reduce costs by as much as 50%.

According to the report, the relatively poor penetration into finance that robotics has made to date may be down to the approach taken to selling the technology, both by external vendors and internally to budget holders.

The co-author of the report, Deborah Kops, explains: “When you build a value proposition for robotics in finance, you have to remember that this is not a product sale. You are selling a whole new way of working and it must be approached in this manner.”

The ACCA report comes as another survey discovered accountants are among the most concerned that robots will steal their jobs! A survey from CV-library discovered that 35% of those working in accounting feel their job is threatened by technological advancements in the industry. This compares to 25% of all employees who fear automation.

¢ Ireland needs more governance reformsCIPFA has said more needs to be done to improve corporate governance in Ireland. Specifically, it says departmental management boards need to move away from a strict management function to allow greater leadership roles. Among the other recommendations is one for having a qualified accountant on each management board as a full member, to advise on strategic and operational financial management matters and to act as a check against risky projects.

¢ Arthur Andersen Mk IIIt was wound down in 2002, but now Arthur Andersen has risen from the ashes. Enron and top five firm Arthur Andersen will be forever linked. Now, however, it appears

a new Arthur Andersen will be reborn, but only in France. Arthur Andersen’s co-founder Veronique Martinez said: “Our new model is both bold and purposeful. The name Arthur Andersen speaks for itself.” There could be problems as there is an Andersen Tax in the US.

¢ CIMA creates new shared services bodyCIMA and The Hackett Group have joined forces to create a new global professional body – the Association of Certified Global Business Services Professionals. Together they have also announced a first-ever formal career development programme for the global business services and shared services sector. This follows the announcement of a strategic collaboration between both companies earlier this year.

IN BRIEF

IFRS 15 deferral The International Accounting Standards Board (IASB) has confirmed a one-year deferral of the effective date of its revenue standard IFRS 15 ‘Revenue from Contracts with Customers’. The new date is 1 January 2018.

It has published an exposure draft in which it proposes to clarify:● How to identify the performance obligation in a contract.● How to determine whether a party involved in a

transaction is the principal (responsible for providing the goods or services) or the agent (responsible for arranging for the goods or services to be provided to the customer).

● How to determine whether a licence provides the customer with a right to access or a right to used the entity’s intellectual property.In addition, the IASB proposes two reliefs to aid the

transition to the new revenue Standard.

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7NQ Magazine October 2015

NEWS

Restrictions lifted on invoice fi nanceA ban on anti-invoice finance terms in contracts will come into force early next year, says the Department for Business, Innovation & Skills.

This move will help more small firms secure finance against money owed to them in invoices. BIS also hopes easier access to finance will speed up economic growth and create jobs for people.

Businesses will be freed from restrictive clauses in contracts that prevent them from gaining invoice finance when new measurers come in 2016.

Invoice finance allows businesses to apply for finance using invoices for money owed to them as security. This means that, in some cases, they can get money faster than if they waited for their customers to pay them.

More than 44,000 businesses receive £19bn of funding this way at any one time, says the Asset Based Finance Association. However, the size of the market has been limited by clauses designed to prevent a supplier from sub-contracting the work. These clauses have had the unintentional consequence of blocking invoice finance.

Are you a facilitator?The government has now introduced new civil penalties for anyone (read accountants) who ‘facilitates’ offshore tax evasion.

The idea is that those who help people evade their tax will now face the same penalty as the evader! Penalties have been increased too, and will be linked to the value of assets hidden offshore. A plea of ignorance will no longer get anyone off the hook, as the rules have been tightened. HMRC has said that it will also publically name both the evader and those who enabled it.

Under the new rules it will be a criminal offence to evade tax offshore. There will, however, be a threshold of £5,000 of under-declaration before the new offence can be used.

The Financial Secretary to the Treasury, David Gauke, announced the ‘creation’ of a new offence for corporates who fail to prevent tax evasion, or facilitated tax evasion on their watch.

THE SCHEDULE CHANGES:

26 May 2015 ● Bearer shares – share warrants to bearer were abolished. Any existing shares warrants will need to be surrendered within 9 months.

October 2015 ● Date of birth – partial suppression of date of birth on the public register, suppressing the day element for directors.● Accelerated strike-off – the time it takes to strike companies off the register will be reduce.● Consent to act as a director or secretary – replacement of the ‘consent to act’ procedure. For newly appointed directors and secretaries, a statement will be added by Companies House to the relevant appointment and incorporation forms (paper and electronic) that the person has consented to act in their relevant capacity.

December 2015● Director disputes – a simpler way to get falsely appointed directors ‘ details removed from the register. Disputes

might be made where it is found an appointed director did not consent to act in their appointment.● Registered office disputes – a new process to provide a remedy where a company is using an address for its registered office but never had authorisation.

April 2016● People with significant control (PSC) – companies will need to keep a registered of people with significant control (PSC register) from this point, in preparation for the need to file this information at Companies House from 30 June 2016.

June 2016● Check and confirm – a requirement to ‘check and confirm’ the company information by filing a ‘confirmation statement’, and notify if necessary at least once every 12 months. This will replace the current obligation to file an annual return.● People with signifi cant control (PSC) – companies will need to keep a ‘PSC register’. This information will be fi led at Companies House on incorporation and updated at ‘check and confi rm’.

● Company registers – private companies will be able to opt to keep certain information on the public register only, instead of statutory registers. This will apply to the registers of members, directors, secretaries, directors’ residential addresses and the PSC register.● Directors misconduct – the disqualified directors regime will be updated and strengthened.● Statement of capital – simplification of the statement of capital and consistency throughout the Act.

October 2016● Corporate directors – a prohibition on appointing corporate directors will be introduced with some limited exceptions, Any company with an existing corporate director will need to take action, to either explain how they meet the conditions for an exemption or give notice to the register that the person has ceased to be a director.

Late 2016/early 2017● Additional information – companies will be able to deliver certain categories of optional information to the register.

The Small Business, Enterprise and Employment ActThe Small Business, Enterprise and Employment Act has received Royal Asset and has been timetabled in three stages – it should be noted that those with the highest impact are being delivered in the final stage.

David Gauke

8 NQ Magazine October 2015

YOUR CAREER

When you started your career in accountancy becoming a partner may have seemed a long way off. Now you are newly qualified you have taken

a big step towards this goal, but becoming a partner will bring new pressures and top of many partners’ lists are increased regulation and competition. As a partner you will also have to be a salesperson, strategist, technical expert and innovative leader. So how do you rise up the ranks? Partners shared their top tips in ICAEW’s latest insider’s guide “Get off to a Flying Start’ (details at the end of this article).

ICAEW Executive Director Sharron Gunn said: “You don’t just wake up one morning and decide you want to be a partner. You must plan for your development from the moment you start as a chartered accountant. It can seem daunting, but ambition really sets you apart from the rest of your colleagues. It will be noticed by your employer, who may have already spotted you as potential partner material.

“It’s not just technical knowledge. It’s about winning people’s trust and having good communication skills. Your clients will value the breadth of your experience, which means you need to grasp opportunities that you can’t leave to chance.

“If you’re an aspiring partner you must identify your needs and reflect on your achievements and take your professional development in your own hands.”

1 Ask yourself: why?Becoming an equity partner is not simply being promoted. It means you cease to become an employee and instead have a stake in the business. It comes with a raft of responsibilities, so ask yourself: what is motivating me? Talk to current partners and ask what processes it took for them to get there – every firm is different.

Be honest about your capabilities and ambitions and then communicate them to others.

Plot a course to partner levelThe ICAEW has published a new guide packed with advice on how you can one day become a partner. Here we pick out some of the highlights


YOUR CAREER

2 Have self-awarenessIt’s important to understand your skills, strengths and values. You’ll need to demonstrate upfront that you have the potential to become a partner. But knowing what to focus on is a start – and we recommend looking at your personal effectiveness ‘tool-bag’. So remember to: ● Make time for activities that maximise your value.● Take time to understand priorities for the business, your

client and yourself.● Not get bogged down with short-term deliverables and

learn to delegate.● Communicate with impact and raise your profile.

3 The business and personal caseThere’s no one-size-fits-all as selection processes differ across firms. It’s important to get clarity on the process by speaking to the partner who will be supporting you through

NQ

the process. You must think about the commercial need for the new partner role and why you have the skills to deliver. Scenarios may include:● The business is growing organically.● A new market or sector opportunity has opened up.● You are billing yourself to succeed a partner who might be

leaving or retiring.Only then is it important to think about the process and hurdles.

4 Winning new businessThis is often the biggest skill aspiring partners have to develop. As a partner you’ll be defined as the finder who brings work in, the minder who coordinates activities, the binder who brings people together and a grinder who delivers the work.

You’ll be measured on your financial performance, which will include fee targets and new business brought into the practice. You’ll therefore need to increase your level of service and your client base. You must also be a credible voice and demonstrate a much broader range of knowledge and experience.

Build deep, trusting relationships with clients by:● Demonstrating that you are reliable.● Understanding client expectations and managing them.● Having mutual understanding and rapport.● Reading widely and having opinions on business and

commercial issues.● Having a genuine interest in your sector.● Learning to have sensible business conversations – rather

than technical ones.

5 Master internal relationshipsYou will need to gain the trust of your fellow partners to take up referral opportunities so it’s essential to build a strong network with your peers, too. Being a partner doesn’t mean you make all decisions by yourself; you must learn to consult and share knowledge.

So think about: ● Volunteering to host events.● Spending time in other offices.● Having a mentor.● Have a contact for every specialism.

Not all partnerships are perfect, and politics are a given at any point in your career. Remember, you can’t change the behaviour of others, but you can lead by your own example. Be consistent and stick to your values.

6 Acting the part – becoming the leaderWhole books are written about leadership, but we asked partners how to define their role as a leader. Their responses fell into three categories:● Vision and strategy.● Leadership behaviours.● A decisive approach.

● You can read a lot more about this by getting a copy of the ‘Get off to a Flying Start’ report (visit www.icaew.com/dlip). New or aspiring partners can also develop skills on ICAEW’s Developing Leadership in Practice programme, as part of ICAEW’s Academy of Professional Development.


INDUSTRY WATCH: OIL AND GAS

Chief financial officers (CFOs) working in the oil and gas sector face many challenges.

Concerns about environmental sustainability, shifting demand patterns, increasing risks and a changing supplier landscape continue to drive the industry.

The oil and gas sector is turbulent; it operates on a global stage, with many oil and gas enterprises operating in war-torn countries, or in areas where geopolitical tensions and border disputes prevail, such as central Asia and the Ukraine.

In a 24–7 interconnected global economy, the impact from major environmental disasters for oil companies remains very significant, with major legal and financial reparation costs. Reputational risk runs alongside financial risk for the oil and gas sector. Prices surge and fall at alarming speed. The public perception of enterprises suffers massively due to environmental disasters. All this

has a knock-on effect for

shareholders and other stakeholders, who have a vested interest in wider enterprise performance.

So CFOs working in this industry need to galvanise the finance function to future-proof their business in this ever-more volatile environment.

In our recent report, ‘Oil and gas – priorities and challenges for the CFO enterprise’, the ACCA highlighted how this volatility is pressurising forecasting and decision-making, and placing ever-more scrutiny from investors on the performance of businesses in the sector. We believe there are seven key issues at the top of the finance agenda for oil and gas right now: ● Volatility hitting the cost base and

impacting capital expenditures.● Pressure on forecasting and

decision support capabilities.● Corporate reporting challenges.● Asset impairment and stranded

assets.● Capability and talent.● Funding.● Cyber security and penetration

testing.

Jamie Lyon outlines the challenges facing finance functions in the oil and gas sector


INDUSTRY WATCH: OIL AND GAS

Inflammable material Forecasting for a volatile and risky industry

Volatility has hit the cost base of oil and gas, while also impacting capital expenditures over the last year or so. The big question now is how low and how long the oil price will remain at present levels? There are also corporate reporting challenges that are a key test for CFOs, particularly in relation to asset impairment and stranded assets.

Forecasting is one of the biggest issues facing CFOs in the sector. Predicting the future business landscape, with effective forecasting and planning, is vital. Preparation for the potential risks of the future and most importantly, how to overcome them, needs constant review so that plans do not become irrelevant which can happen all too quickly in a fast-moving and volatile sector.

Spending also needs to be kept under control, especially with the cost base being under intense pressure. Resource allocation needs to be prioritised, and ruthlessly so, with difficult questions to be asked such as “what really needs the funding?”

All spending needs to be analysed carefully, so CFOs need to tread a fine line between cutting costs while also protecting essential investment for the future. This is clearly a really tricky balancing act.

Reporting challenges in the oil and gas sector are perhaps the most contentious. The industry is always under intense pressure, with significant political, public and media scrutiny. The industry has to be seen as transparent, especially with the sustainability buzzword so high on environmentalist and policy makers’ agendas.

The investor community remains cautious, and is becoming more challenging over how and why the sector is reporting. For enterprises that are heavily invested in carbon, the issue of ‘stranded assets’ and potential impairments is also dominating the agenda.

A longer-term outlookHow the industry adapts to a

greener future is in the spotlight, and will be for the long term. In December 2015, Paris will host the COP 21 meeting, otherwise known as the 2015 Paris Climate Conference. Here, for the first time in over 20 years of UN negotiations, the aim will be to achieve a legally binding and universal agreement on climate, with the aim of keeping global warming below 2°C.

From the CFO’s perspective, our report also points to these longer-term

environmental demands. Obviously investment in renewables is important. Fossil fuels by their very nature are a finite resource, so investment in alternative energy sources must be increasingly on the priority list.

It is also vital for CFOs to think about the long-term in terms of the talent pipeline. Securing the right balance of operational and strategic skills in the finance function is a huge challenge across the industry, and ensuring its endurance in the longer term must be a key consideration. The big question is where the next generation of finance talent across the industry will come from.

CFOs in the oil and gas sector need to adopt an approach that transforms their businesses to make them fit for the future. They will have to work through more turbulent times. We believe the finance organisation is going to be at the forefront of driving the transformation needed in the sector.

● Jamie Lyon, portfolio head, business management, ACCA

NQ


ETHICS


ETHICS

Taking an ethical approach Tanya Barman outlines the ethical issues that firms still need to address

The financial crisis of 2008 hit as a result of careless and unethical behaviour in the

finance sector. The effects of this crisis have been far reaching both socially and economically.

As the true impact of the crisis became apparent we at CIMA recognised that in order to repair and secure future growth there needed to be an understanding of why it happened, rather than solely punishing those responsible. With this in mind we carried out our first piece of research into ethics in business.

Roll forward to 2015 and our third ‘Managing Responsible Business’ report, and businesses across the world are still experiencing some of the same issues. Much has improved, but more improvement is still needed. Now you have qualified as a finance professional you will have a great role to play in helping your companies develop strong business ethics and manage their business responsibly. To achieve success in this area what business ethics are must be understood, as well as what makes a responsible business.

Business ethics are sometimes referred to as business principles, but they boil down to the same thing. They are the application of values such as integrity, fairness, respect and openness to organisational behaviour; applied in all areas of the business especially during day-to-day operations.

A responsible business is committed to operating in a way that is economically, socially and environmentally sustainable. It also means ensuring this commitment prevails while still upholding the interests of various stakeholders.

Upholding both these elements of good business culture is sometimes

difficult in the face of what feels like intense pressure from senior managers and stakeholders to deliver success. Our latest Managing Responsible Business report takes a global look at how well businesses are doing at creating an ethical culture in the workplace and how they respond to corporate challenges such as cyber-security, corruption, human rights abuses – all of which can have a huge impact on the financial performance and reputation of a business.

In 2012, 80% of companies said they had a code of ethics, an increase from 72% in 2008. Now in 2015 that number has risen to 82% (93% in larger organisations). Despite this, in the UK, for example, 30% of those who responded to our survey admitted to feeling pressure from their managers or colleagues to compromise their ethical standards. This has risen from 18% in 2012.

Although the figures are concerning, finance professionals have a duty to respond to these pressures with an ethical solution. Management accountants, with their unique blend of skills, should be able to identify ways to achieve the goals of the business without compromising their professional ethical standards or the standards of their organisation. This is when your Code of Ethics comes in to play; use it as a support and framework for your entire decision-making process and remind senior managers and business leaders of your duty to uphold it.

There is a growing demand for ethical management information, which allows an organisation to assess its ethical performance – yet 90% of organisations say they struggle to get valuable insight from it.

Our research shows that 80% of management accountants recognise they have a role in managing ethical performance within their organisation. It also showed who most frequently asked them to provide this information. Investors came top of the list of external stakeholders who request this data and senior managers the highest internal users of this data. The gap between the demand for EMI (ethical management information) and the understanding of how to use the information to help implement structures and policies is clearly illustrated in these figures. However, this also points to some room for finance professionals to own this area in the future and to help senior managers and business leaders to understand how they can meet targets and satisfy the need for continued growth.

Finally, although our research shows that there are still a lot of issues to address, there is plenty of good news, too. The number of businesses implementing ‘ethical architecture’ (such as hotlines where staff can report their concerns) has increased, rising from 49% in 2011 to 59%.

There has also been an increase in businesses giving their staff incentives to uphold their organisation’s Code of Ethics from 25% to 46% in the past three years. This can only be a good thing as it starts to bring the idea of business ethics into the employee’s day-to-day decisions. A more ethical business culture is not something that can be achieved by working in silos. So to make sure we continue to see improvements show your commitment and demand the same level from your employer.

● Tanya Barman is Head of Ethics at CIMA

NQ


ETHICAL DILEMMA

Treading a delicate pathShould you use ‘insider’ information when your organisation is bidding for a contract?

Outline of the case

You have recently become Head of Finance at Company B, a company that provides catering services to the public sector. Your previous employer was Organisation A, a large public sector body where as finance manager you had the opportunity to work on areas relating to financial accounting, procurement, contracts and bids.

One of Company B’s major contracts is with Organisation A. The contract is now up for renewal, and Company B is preparing a competitive bid for this contract. You have been asked to lead the team responsible for bidding for this contract, but you are concerned that you might breach confidentiality if you accept this assignment. You also suspect that your knowledge and experience of Organisation A were seen as good reasons for appointing you to the position at Company B.

You do not want to let your new employer down. The loss of such a major contract would have a significant effect on the financial performance of Company B and its performance-related bonus scheme for management.

Key fundamental principles

Objectivity: Can you safeguard against the significant self-interest threat that arises from Company B’s performance-related bonus scheme?

Confidentiality: If you accept this assignment, can you ensure that you do not use confidential information relating to your previous employer to your advantage or to the advantage of your current employer? Professional behaviour: What can you do to safeguard your reputation and the reputation of your employer and your profession?

Considerations

Identify relevant facts: Your previous employment with Organisation A has provided you with information that may be of value to Company B. You must consider your professional body’s code of ethics, applicable laws and regulations, your current and previous contracts of employment, and your employer’s policies and procedures. A self-interest threat arises because of the impact that losing Organisation A’s contract would have on Company B’s financial performance and reward policy. You may also be feeling that you would like to impress your new employer and help to make a successful bid for the renewal of the contract.Identify affected parties: Key affected parties are you, your line manager and the board. Other employees in the company may be affected due to the financial implications of the contract not being renewed.Who should be involved in the

resolution: Your line manager, other relevant staff and, if necessary, the board should be involved.

Possible course of action

The principle of confidentiality prohibits the use of confidential information acquired as a result of your previous employment for your advantage or that of your current employer. While you have a responsibility to advance the legitimate aims of your employing organisation, this should not extend to a breach of confidentiality.

In this case, you (because of Company B’s performance-related bonus) and Company B stand to benefit from the confidential information about how bids are assessed at Organisation A. The principle would not be breached if you were in possession of information that was in the public domain, or if you were simply to use experience gained in your previous employment, so long as you do not use confidential knowledge that you acquired as a result of that employment.

You should discuss the situation and your obligations with your line manager in the first instance, and ask for your involvement in the preparation of the contract bid to be limited. For example, you may be able to contribute to aspects of the bid that do not require you to refer to confidential knowledge about your previous employment. If your line manager fails to understand


ETHICAL DILEMMA

the conflict that you are facing, you should request that you both discuss the matter with a director or other member of staff.

During these discussions, you should refer to the company’s ethical code, if it has one, as well as that of your professional body.

If there are no other formal channels available, you should make the board aware of your dilemma. If necessary, you must refuse to take part in the bid without necessary safeguards being implemented. Ultimately, disassociating yourself from Company B may be the only solution.

However, before taking such a step, you should seek legal advice on your employment rights and responsibilities (subject to the rules and guidance of your professional body).

You should document, in detail, the steps that you take in resolving your dilemma, in case your ethical judgement is challenged in the future.

Looking at this issue from Company B’s perspective, it may be appropriate to suggest to your line manager that a policy on conflicts of interest be developed and that the remuneration and bonus policy be reviewed in light of this.

● This article is taken from a series of Ethical Dilemmas Case Studies, published by the CCAB.See http://www.ccab.org.uk/reports.php

NQ


NQ OF THE YEAR

TIME TO NOMINATE

The Categories● NQ of the Year ● Accountancy Team of the Year ● Training Manager/Workplace Mentor of the Year● PQ of the Year● Distance Learning Student of the Year● Student Body of the Year● Accountancy College of the Year – Public Sector● Accountancy College of the Year – Private Sector● Lecturer of the Year – Public Sector

● Lecturer of the Year – Private Sector● Innovation in Accountancy● Study Resource of the Year● Accountancy Body of the Year● Accountancy Personality of the Year● Editor’s Special Award● Online College of the Year – NEW● Best Use of Social Media – NEW


NQ OF THE YEAR

So do you know someone who deserves to be our NQ of the Year? Or maybe they should be up for one of our other awards. In either case, it’s time to get nominating!

D o you have the ‘X Factor’? Perhaps more importantly, how do you make your CV stand out from the hundreds of other CVs hitting employers’

inboxes? Well, one sure way would be to become the 2016 NQ of

the Year, awarded each year by our sister publication PQ magazine.

But you don’t have to take our word for it – just turn the page and read all about the reigning champion Kyle Tyrrell. He recently got a fifth promotion at AXA Insurance and is currently the Head of Finance at AXA Global Protect. After he won our prize he received congratulatory messages from many of the company’s MDs and FDs, and AXA’s CFO blogged the whole of the UK finance and strategic team about it. Even the ACCA called up to congratulate him and to invite him onto its ‘Leaders of Tomorrow’ programme.

We understand that sometimes you need to blow your own trumpet as no one else will, so we actively encourage you to nominate yourself! Also, look at some of the other categories and see if you can nominate someone who really helped you get to where you are – a lecturer or mentor/training manager, perhaps.

You may have left PQ magazine behind (or soon will be), but landing this prize can really give your career a big boost.

All we need is 250 words, plus any supporting evidence, on why your nominee (or you) should be shortlisted for one of our categories. You can download our application form directly from the website at www.pqmagazine.co.uk – just go to the ‘pq awards’ bar and click to download our entry form. Or just email us your entry directly, making it clear which category you are nominating for.

It is important we have all your details, because if your entry is shortlisted you will be invited to the best awards night there is (in accountancy, anyway).

Once you have it all ready then forward it to [email protected], or you can post your wise words to: The Editor, PQ magazine, 4th Floor, Central House, 142 Central Street, London EC1V 8AR. Deadline for all nominations is Friday 18 December 2015.

So come on all you NQs, we want to you at the Café de Paris in February. Remember, if you get on our shortlist we will send you your invite to the best night out in accountancy.

PREVIOUS WINNERS

2015 Kyle Tyrrell, AXA Insurance2014 Emily Hamblin, BIS2013 Jonathan Simons (joint winner – pictured), Grant Thornton2013 Saad Mir (joint winner), Deloitte2012 Victoria Hitchcock, George Hay 2011 Khurrum Beg, RBS2010 Danny Taylor2009 Mike Nelson, Armstrong Watson2008 Nathan Conduit, Sky2007 Nikki Riley, Blackpool City Council2006 Kevin Wall, Kroll

Our sponsorsNo award ceremony is possible without the sponsors. And we have only the best…

NQ


NQ OF THE YEAR

When did you know you wanted to be an accountant?I had always shown a keen interest in finance since a strong showing in that section of my business A-level. However, it wasn’t until I moved into my previous role in London in 2010 that I really thought about studying for a qualification. Looking at all of the senior people within my organisation who I aspired to emulate, they all seemed to have a professional qualification, so that was when I made the decision to follow the accounting path.

How did you fi nd the ACCA exams?Academia was never my strong point, I was always much more of a hands-on person when it came to learning, and so jumping into exams after a few years’ break was certainly difficult at first. My plan was to complete all of my exams as quickly as possible and so by doing three exams per sitting failure was not an option. I had no choice but to get into the exam groove. Once I had found my rhythm each sitting became easier.

The main thing that helped me was having a pre-exam routine. I would arrive at the exam 90 minutes before it started, spend an hour doing some last-minute revision to load up my short-term memory, then spend 15 minutes preparing by taking a comfort break. I would also listen to my ‘lucky’ exam song – Jay Z and Kanye West’s Otis (Feat. Otis Redding) – which really got me in the mood. I would then take my place in the hall, fill out my cover sheet, do some hand stretches and make sure I was 100% ready for when the exam began.

What did it feel like once you had fi nally qualifi ed? What was the fi rst thing you did when you found out you had passed? It felt like a huge weight had been lifted and a feeling of elation swept over me. It also, however, felt like there was a void in my life for a short period, as my study had dictated my life for the previous two-and-a-half years. That feeling soon passed as I filled my evenings and weekends with things other than study! The first thing I did was register for my membership; I had already made sure all my CPD was done in advance of my final results so all that was left to do was convert from a student to a fully fledged member of the ACCA. Then I had a few beers!

Do you have plans for any more study?I have thought about what I would study for next and I think it would probably be an MBA. I’d like to do it in America if I can secure the funding.

You are now our NQ of the Year – how did that go down at work? How did you enjoy the PQ Awards night?The feedback on winning the award was amazing. I received congratulatory messages from many of our MDs and FDs, and our CFO blogged the news to the whole UK finance and strategy team. I was also in shock when I received a call from the ACCA to congratulate me personally, as well as to invite me onto the Leaders of Tomorrow programme. The night was fantastic, it was the second time I had been fortunate enough to attend. I was on a table with LSBF who

All thanks to Otis...We spoke to ACCA qualifi ed Kyle Tyrrell (pictured), Head of Finance at AXA Global Protect and PQ magazine’s current NQ of the Year


NQ OF THE YEAR

are great fun. I was very proud to be able to win the award in front of my lecturers, who are the one of the key reasons I was able to win it.

You recently got your fi fth promotion at AXA Insurance. What is a typical day like for you now? I am not sure I have a truly typical day as it seems the roles I take on now seem to have a more ad hoc nature to them, which I relish. My day begins when my alarm goes off at 5am and I drag myself to the gym – it gets me in a good state of mind to start the working day. I arrive at the office around 8am and have breakfast and read through articles I find interesting in the Financial Times or trade publications, as well as pick up emails that have come in overnight from colleagues in the Middle East and Asia.

By 9am my focus is on working through my to-do list and catching up with my team on various ongoing projects and strategy work. Before I leave work I plan out the following day, and review my notes and organise my thoughts from the day. I aim to leave the office by 6pm and get myself to the driving range to work on my golf swing, and I am usually home by 8pm. Although not in the office 24 hours a day I usually find myself answering calls and emails whenever I am awake – it’s a job that never stops and I enjoy it that way.

We understand you have an entrepreneurial streak. What lessons have you learnt from MyLK? MyLK is a bespoke catering business I started with a friend

in Warrington, Cheshire. It has taught me a lot, but the main thing has been time management. Having a full-time role and trying to run a business 200 miles away means keeping good discipline when it comes to managing my time. I tend to allocate my weekends for MyLK work.

Where do you see yourself in fi ve years’ time?I have been on an accelerated career path at AXA and I hope this will continue. In five years’ time I would love to be a couple of years in to a finance directorship or perhaps looking at running an AXA business as MD. My ultimate aim is a CEO role and providing I am working towards that goal and doing work that I enjoy and am passionate about then where I am in five years doesn’t really come into it. Not forgetting MyLK, I would like to have a built a small management team who can devote more time to the business than I can and who can help grow the business under my partner’s and my direction.

We know all accountants are interesting, so what do you do to ensure you are? I love to read (mainly business books and biographies). My current hobby taking over my life is golf, which is difficult because I struggle to find the time to play other than on the driving range. I also have a secret obsession with Lego, and when I finished one set of exams a few years ago I treated myself to a 4,000-piece Lego Star Wars Death Star and spent the next two weeks watching the films back to back while building it. NQ


SUSTAINABILITY

Dr John Kazer explores the importance of product water footprinting for businesses

L ike most British people I enjoy a nice cup of tea. And like most practitioners of life cycle assessment (a far smaller group) I’m very interested in

understanding the full impact of the products I consume.So how much water goes into a cup of tea? Somewhere

around 30 litres of water is required for tea itself, 10 litres for a small dash of milk and a further 6 litres for each teaspoon of sugar. This means that a simple cup of tea with milk and two sugars could actually require 52 litres of water – enough to fill my kettle more than 30 times.

Taking a life cycle approach involves understanding how much water is consumed in every stage of the production, use and disposal of a product. In the case of a cup of tea this includes: the water needed to grow the tea leaves and the sugar cane, as well as growing the feedstock consumed by dairy cows; the water used in the manufacturing process for both the main products and their packaging; the water used to brew the tea and clean the dirty cup; not to mention a number of other things such as the water used to generate the energy to boil the kettle.

There are over 60 billion cups of tea consumed in Britain

each year. Making some general assumptions on the amount of these that have milk and sugar in them, this adds up to a footprint of around 3,000 billion litres of water. This means that each year our collective enjoyment of tea makes use of one and a half times the volume of water in the UK’s largest reservoir, Kielder Water in Northumbria.

The reason that it is important to understand the life cycle water footprint of products is because globally there is an increasing demand on water resources, which are not being adequately replenished. According to the latest figures from the UN, if we continue our on current trajectory then by 2050 water demand is projected to grow by 55%. This projected growth comes from a variety of areas including the manufacturing, agriculture and energy sectors, alongside domestic use as access to sanitation improves in developing countries.

The increase in water demand is unsustainable. By 2025 it is estimated that two-thirds of the globe could be experiencing water stress, including 1.8 billion people facing absolute water scarcity. This is why businesses need to focus on understanding and reducing their water consumption.

21

than 80% of the total water footprint for growing tea leaves is green water from rainfall, because it is typically grown in wet regions. So the actual impact on the local blue water resources is fairly minimal. The consequences are not the same as abstracting a reservoir and a half of water of freshwater every year.

When businesses understand the total amount of water consumed by their products, alongside their water impact, they can focus their efforts to make improvements and identify supply chain or regulatory risks. These risks can be substantially reduced by ensuring that water-intensive production takes place in water-abundant areas. Greater water efficiency can also result in some very compelling cost savings, particularly where energy is required to cool, heat or pump that water.

So even if life cycle assessment is not your cup of tea, there is a very good reason to water footprint your products.

● Dr John Kazer is Carbon Footprint Certifi cation Manager at the Carbon Trust

NQ Magazine October 2015

SUSTAINABILITY

NQ

Otherwise, they could find themselves at best facing higher costs for excessive use of a key resource, or at worst losing their social license to operate under competing priorities.

But just counting the total number of litres doesn’t give the full story. Water in products is described in a variety of colours: blue water is the freshwater that comes from lakes, rivers and aquifers; green water comes from rain; greywater is reusable wastewater, of the sort that might come from sinks, showers or washing machines.

Water footprints tend to focus on blue water as the important element. This is because the sustainability issues associated with water tend to relate to freshwater, which is also more practically manageable than rainfall.

But managing even a freshwater footprint isn’t easy. It requires consideration of local impact, on both water quality and scarcity. Using large volumes of freshwater somewhere like the north of China, a region facing serious water shortages and major issues with pollution, is a far greater issue than using it somewhere like Canada, which has 20% of the world’s freshwater supply.

To look at what this means in the tea example, more

How much water does it take to makea cup of tea?


To be an effective business partner you need to have the respect of the management team so that they will trust you to help them, rather than think of you as a financial nerd without any idea about the real world.

Specific traits identified as lacking in accountants according to the research into this are:● Communication skills● Business awareness● Coaching skills● Negotiation skills

If you feel weak in any of the above areas try to look at ways of improving them in preparation for your future career.

● Sean Purcell is a partner in Wise up Now, a consultancy that specialises in helping fi nance functions become more effective

of HR in the mid 1990s when HR’s role was similarly outsourced and transferred to shared service centres.

A finance business partner is someone who is embedded within the management teams helping provide tactical financial support (for example budget planning and analysis) to business managers. Their role is not to produce accounts but resolve problems. Instead of a scorekeeper they have become a player. Instead of refusing to approve a decision because they are too expensive they help find a way of doing it differently, but profitably.

However, the evolution into business partnering roles has not been an easy ride, with many firms finding that simply changing a job title and not financial organisational traits does not work.

VIEWPOINT

I f you work in a multinational organisation such as Unilever, GSK or Barclays, for example, you

may have been aware for some time that the role of accountants in business is experiencing significant changes. Academic journals have been reporting for some time the evolution of accounts departments, which are moving transactional traditional activities (financial reporting, month-end, etc.) to shared service centres and, in some cases, outsourcing them.

As a result, finance has to evolve into a new role before it becomes an unnecessary overhead. There has been an increase in the recruitment market for a new type of accountant often referred to as a ‘finance business partner’. The use of this term is varied and with a fairly broad interpretation. It first came to prominence in the field

Death of the traditional accountant?

NQ

Sean Purcell explains how and why the role of the accountant within a large organisation is changing

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nq magazine, october 2015

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