pq magazine, march 2015

PQmagazineMarch 2015 www.pqmagazine.co.uk / www.pqjobs.co.uk

Working in the NHSA CIPFA trainee talks usthrough his working weekat a top NHS hospital trust

ACCAWINTEREXAM

RESULTS

ACCA has finally unveiled the changes to thetime limits for students to complete theexam component of its qualification.

Under the current rules, students are removed fromthe register if they have not completed the exams within10 years of their initial registration date.

Now, under the new rules, a seven-year time limit willbe introduced at the professional level. And theproposal includes a provision to claw back papers ifstudents don’t progress.

There will be no time limits for passing F1-F9. Oncestudents have completed these papers they will haveseven years to pass their five remaining professionalexams – losing any passes that were achieved morethan seven years ago. These papers will need to beretaken before ACCA PQs can become affiliates.

The seven-year limit begins when a student passestheir first professional level exam.

The ACCA felt the current rules do not take intoconsideration the fact that ACCA students can start atdifferent levels of exams, depending on priorqualifications and exemptions.

Relevant knowledgePressure also came from employers who believe thereis real value in up-to-date and relevant knowledge.

All students currently on the register have been givena ‘last exam session’ date, which is 10 years from whenthey initially registered. Under the new rules, if theyhaven’t completed the exams by the last session datethey will not be removed from the register. However,students will lose any papers they may have achieved atthe professional level if they passed them more thanseven years ago.

The ACCA said it was important that the new timelimit rules means all students are treated equally. It alsopointed out that it will be offering four paper examsessions in March, June September and December by2016.

ACCA PQs FACINGSEVEN-YEAR RULE

We are the champions! The winners celebrate their success at the PQ Awards 2015, whichtook place at the fabulous Café de Paris. PQ of the Year was Stephanie Moonan, while theentertainment was provided by The Sinnerman – aka Paul Sinha. More on pages 16–18

P paper sitters could fall foul of new clawback rules

Top man: NQ of the Year Kyle Tyrrell

Innovative: BPP/KPMG celebrate their win

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comment PQ

News08Jobs market Recruitment ofgraduates at a 10-year high 10ACCA exam results The lateststats from the December exams 12ICAEW exam results Womencontinue to outperform theirmale counterparts in exam hall

Features, etc06Mind your Ps&Qs P2 was‘unfair’; the great Pilates debate;and the best of social media14CIMA E3 exam Part two of oursample E3 questions – you’ll findthe answers on page 24

16PQ Awards 2015 A great nightwas had by all – now find outwho the winners are

20ICAEW focus How to pass theFinancial Accounting andReporting paper21CIPFA spotlight We spoke toan accountancy trainee aboutworking on the NHS Programme

23Corporate reporting FRCinitiative aims to ensure reportsare relevant for investors

24ICAEW case study How toavoid the Requirement 1 traps 26Study tips Multi-tasking is amyth, according to a new book –so treat your brain with respect28Let’s get technical Doubleentry is the key to accounting29IFRS What recycling means inthe corporate reporting sphere

30CIMA case study An in-depthlook at the Strategic pre-seen31ACCA F6 paper What to bewary of in this new-look paper32Careers #1 How to identifyyour key workplace strengths 33Careers #2 Life at AndersonBarrowcliffe; following MartinJohnson’s example; and ourBook Club reviews 38Fun time Game Digital’s coolreport; how not to recruitstudents; and more giveaways

The columnistsRobert Bruce Why ‘tone from thetop’ really matters 8Prem Sikka Apple has core issuesit has to to deal with 10Carl Lygo Hollywood is no help –just look at Ben Affleck 12

Subscribe to PQ magazineIt’s FREE – go to

www.pqmagazine.co.uk

ABC July 2013–June 2014

32,361

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

is sent to 9,413 requested readers

What is ‘public interest’?The recent FRC ruling regarding Deloitte & Touche and MGRover Group by an independent appeal tribunal brought to the

fore the debate about ‘public interest’. The tribunal said that the ICAEW’scurrent guidance lacks clarity. The ICAEW has promised to publish draftguidance by this summer, but it is an area we plan to look at more closelyhere at PQ. One would hope that any clarification would have a significantimpact on the tax and avoidance industry. Remember, PwC was recentlyaccused of promoting tax avoidance schemes ‘on an industrial scale’ viaLuxembourg (see www.pqmagazine.co.uk for the full story). Were thesemass-marketed schemes really in the ‘public interest’, and if not does thatmean in future the ICAEW should have to pursue PwC? We will be askingall the bodies to tell us what ‘public interest’ means to them.

Get the results on timeWe hear that some ACCA students managed to access their results morethan 24 hours before the official ‘results day’. A quick tweet and call out onFacebook confirmed the truth. Yes, some students had yet again been ableto log on to their results early. It seems that there was a glitch, but that thiswas ‘dealt with’ by the ACCA when it discovered the problem. Now we lovethe idea of students getting their results as early as possible, but we worryabout the security of the IT system that continually allows this. The patchesdon’t seem to be working. We know the ACCA has just been awarded ISO22301, but it’s not the ACCA I worry about. As we become more and moredependent on IT we become more vulnerable to attack.

#PQAWARDSThanks to everyone who made our awards such a great night. Well done tothe winners, and better luck next time to all the shortlisted candidates. Whoneeds the Baftas and Grammys when you have the PQs!

Graham Hambly, PQ magazine editor ([email protected])

PS: Our Annual Bumper Quiz answers are now on the PQ website

CONTENTS March 2015

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Associate editor: Adam Riches | Art editor: Tim Parker | Subscriptions: [email protected] | Contributors: Robert Bruce, Prem Sikka, Carl Lygo, Tony Kelly, Phil Gammon, Jo Daley | Origination and print services by Classified Central Media

If you have any problems with delivery, or if you want to change your delivery address, please email [email protected] by PQ Publishing © PQ Publishing 2015

P2 was just not fairI was a candidate at the ACCA P2exam in December and thoughtI’d share my experiences with PQreaders. I found the P2 examhorrible, devastating and wasoverwhelmed and humbled by thelevel of difficulty that the P2examiner threw at us.

Usually it’s said that if a studentis well prepared then he/she willexcel in the exam; if not then theywill find the exam difficult. Well, Idon't entirely agree on this point. I

studied damned hardfor the P2 exam. I evenread the interviews onthe PQ study zone that

PQ magazine had with the P2examiner and followed all theadvice there. But this exam wasunfair and being too narrow inits focus did not help well-prepared students. Not manysyllabus areas were tested, as isusually the case, and ACCAshould really consider eitherproviding extra resources for P2or telling the examiner to changehis style of examination.

I started a thread on the examon an internet message board,and many other students sharedsimilar views as me. Name and address supplied

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

Hot & Tweet

email [email protected]

Don’t tax Pilates!In the February edition of PQmagazine the article ‘No bendingthe rules’ asks: “Pilates – is it arecreation or an educationalactivity?” The article explains thatthis matters because one has 20%VAT attached to it. ChristineHocking believes that it should beVAT exempt and Judge RogerBerner ruled it recreational,therefore VAT liable, you say.

I would say that Pilates shouldbe VAT exempt. Why? Because Ibelieve it to be therapeutic. This isshown by the work of JosephPilates during his lifetime. It wasn’trecreational for the people that hetreated. I do Pilates regularly. Ihave to, because I haveosteoarthritis. By developing thecore muscles around the abdomen,to support the spine, it lessens thepressure on the vertebrae andreduces the pain of arthritis. Youwill find that those who do Pilatesdo so for reasons of health andmitigation of various ailments. Iwould suggest that the learnedjudge revise his ruling on thematter in the light of thisinformation, which can becorroborated by any qualifiedPilates instructor.

By the way, I have just had mybook, ‘The Pharaoh Cinciris’,published by Unites, priced£15.60. The book is non-fictionand deals with establishing the

PQ magazine always tries to keep you ahead of thecurve. The ACCA’s change to the time limit for qualifyingis one issue we have been using LinkedIn for to helpgauge your feelings. One PQ told us how the changewould help her in her endeavours to get qualified: “I ama mother of two with a full-time job. My only time for

learning is one hour a day – from 6am to 7am. In this routine I can passa maximum of two exams per year. I gave up once, restarted justbecause I still have a chance till all the time runs out. If they change therule it would be great for me and for others in my situation.” Anotherresponse to the ending of the 10-year time bar was more straightforward:“This is the best news ever.”

The PQ Awardsnight was a realtwitter-fest! Therewere some very happy winnerson the night – none more sothan the AAT Distance LearningFaceBook Group, who designeda new logo for their site.

Justin Kyriakou tweeted a greatpicture of Stephen fromStockport College and Samfrom Rotherham College withtheir awards. OK,the picture wasupside down whenhe tweeted it, butwho cares!Clement Keyswere also rightly proud of Craig

Bayley, the2015TrainingManager ofthe Year. Away fromthe awardswe alsotweeted out

the ACCA results just ahead ofthe ACCA’s Global LearningProviders’ Conference. At theevening event PQ magazine’seditor even managed to get apicture in the photobooth withCEO Helen Brand – we wereshocked too! We will show youthe evidence next month alongwith a full report from theconference.

Follow us @PQmagazine

identity of a pharaoh given thename Cinciris by ancient Irish andScots annalists. Author royalties –10% of all book sales – will bedonated to four charities: GreatOrmond Street Hospital for SickChildren, St Christopher’s Hospice,Smile Train, and the Special CareBaby Unit (SCBU) at the PrincessRoyal University Hospital (the PRU)in Kent. A little publicity would bewelcome.Michael Jerome King, by email

PQ mar 15 p6• CCM.qxp_pq aprl08 p04 13/02/2015 12:00 Page 1

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8 PQ Magazine March 2015

PQ news

CIMASphere now closedAs part of CIMA’s continuous

effort to find ways to supportmembers and students it hasclosed CIMAsphere. CIMAconnectis now the study and socialplatform for PQs. Members arebeing encouraged to use CIMA’sLinkedIn group for their networkingand discussions.

Professional level changesACCA PQs entering exams

from 6 July 2015 will be able totake their professional level exams

(P1-P7) in any order. The ACCA is,however, recommending thatsitters take P2 at the same time orbefore they sit P7 if they want tomaximise their chances of passing.

Trainee in the spotlightClifford Chance trainee lawyer

Aysh Chaudhry received nationalcondemnation recently for his 21-minute video rant against‘apologetic’ moderate Muslims inthe wake of the Charlie Hebdoattack in Paris. Chaudhry alsoattack the ‘kuffars’ and criticised

Muslims whose minds have been‘colonised’ by the West. CliffordChance have said the commentsmade by Chaudhry were “personaland not those of Clifford Chance”.

Tax and law don’t mixATT students seem to be

really struggling with the law e-assessment. The pass rate forthose candidates sitting the test inthe past six months of 2014 was42%. The average attempt perstudent stands at 2.3. This ismuch higher than the ethics e-

assessment, which takes onaverage 1.5 attempts.

Interactive ethicsThe AAT has launched a new

interactive Code of ProfessionalEthics. After consulting membersthe AAT is providing a simpler toolto help them with their professionalethical dilemmas. Users can nowsearch key terms, such as moneylaundering, relevant to theirparticular ethical problem. Go tothe AAT’s ethics micro site:www.aatethics.org.uk/code/

In brief

One of the great business clichés isthat of ‘tone from the top’. No oneadvocating change within a businesswill ever fail to make the point thatfor real changes, particularlybehavioural changes, to stick thereneeds to be strong advocacy of themfrom the top, from the chairman, theboard and from both CEO and CFO.

Sometimes this works, sometimesit does not, but it is seen as a deeplycorporate thing. So it came as asurprise to find it cropping up in adiscussion on the last night of thisyear’s London Comedy Film Festival.The closing event in the festival wasa showing of Local Hero. The filmdates back to 1983 and I have alwayscherished it as a particular joy. Theplot of an American oilman sent to theremote west of Scotland to buy up abit of coastline to transform it into arefinery and the way that heeventually goes native amidst thequirky people of the village is aperennial delight. I have seen it manytimes. It is full of joy, music, (lovelystuff from Mark Knopfler) andeffortless humour. It is a very funnyfilm. After the showing there was adiscussion with some of the actorsinvolved. They were asked if it was ashappy a film to make as it appearedup on screen. They said it was thehappiest of times. “How did that comeabout?” came another question. Andup popped ‘tone from the top’. Theproducer, David Puttnam, gave thedirector freedom and security to dowhat he wanted to do and everythingflowed from that. So there you are:tone from the top can make you happy– and transform the organisation.

ROBERTBRUCE

Local Heroshows valueof ‘tone fromthe top’

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

Record recruitmentof new graduatesGraduate recruitment at Britain’s topemployers is set to reach its highestlevel in more than a decade this year,and accounting and finance isleading the way. Research by HighFliers Research confirms that topemployers increased their graduaterecruitment by 7.9% in 2014, andare set to expand their vacancies foruniversity-leavers by a further 8.1%in 2015.

The largest individual recruiters ofgraduates in 2015 will be Teach First(2,060 vacancies), PwC (1,570) andDeloitte (1,100).

The study found the accountingand professional service sectorrecruited a total of 4,174 graduatesin 2014. That is a whopping 16.3%higher than in 2013.

It has been revealed that yet againaccounting and professional servicesfirms will be the biggest recruitersthis year as well. There will apredicted 4,624 vacancies up for

grabs in 2015 for graduatingstudents in this sector. That is ahealthy 11% increase on 2014.

Interestingly, while the dataconfirms that there will be anotherwelcome increase in the number ofnew graduate jobs at the UK’s topemployers, recruiters warn that 31%of all vacancies are expected to be

filled by undergraduates who haveprevious work experience with theirorganisations, such as paidinternships or industrial placements.

The expected starting salary foraccounting graduates is £30,000.This is well below the £40,000 onoffer at law firms or the £45,000average for graduates joininginvestment banks. The highestpublished graduate starting salary for2015 are at Aldi (£42,000) and theEuropean Commission (£41,500).

The £30,000 graduate startingsalary in accountancy is the median,but it does represent a 2% increaseon 2014 pay levels. If you drill downinto the figures you find startingsalaries on offer in accountancy forgraduates will range from £15,000 to£42,500. • Students graduating in the summerare the first undergraduates to havepaid up to £9,000 a year for theirdegrees.

Management Accountingpass rate down to 97%!CIPFA December sitters achievedanother impressive set of results,according to the latest stats.

The exams saw sitters achieve anoverall pass rate of 75% – a slightincrease on the June sitting. Thisincluded strong pass rates in core technical subjectssuch as Financial Reporting. Students couldn’t maintainthe 100% pass rate achieved in June’s ManagementAccounting paper, but at 97% it still wasn’t bad!

CIPFA’s executive director of learning, Adrian Pulham(pictured), felt that these results provide a solidfoundation for the full launch of CIPFA’s new PQsyllabus and e-assessment later this year.

CIPFA DECEMBER 2014 RESULTS Dec 14 Jun 14

Financial Accounting 90% 94%

Management Accounting 97% 100%

Financial Reporting 77% 75%

Audit & Assurance 74% 59%

Business Management 93% 78%

Business Strategy 64% 72%

Financial Management 69% 79%Governance, Public Policy 60% 62%Public Finance & Tax 78% 78%

Public Sector FR 65% 54%

Strategic Leadership 80% 85%Strategic Financial M’ment 68% 75%OVERALL 75% 72%

PQ feb 15 p8_pq sept 12 p08 09/02/2015 14:40 Page 10

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009_PQ 0315_PQ 1209 000 05/02/2015 13:53 Page 7


PQ news

Apple has received plaudits forquarterly sales of $75bn, profits of$18bn and a gross profit margin of39.9%. It has amassed $178bn incash and marketable securities. ButApple faces major challenges. iPadsales are declining and Apple needs toconstantly innovate to persuadecustomers to pay premium prices.

The US Senate PermanentSubcommittee on Investigations hasaccused the company of taxavoidance. Its effective tax rate in theUK has been less than 1%. Last year,it paid tax at the rate of just 6.4% onits non-US profits of $33.6bn. A keyreason for this is that Apple hasregistered its intellectual property inIreland. Various subsidiaries payroyalties to use it, which depressestheir profits while the Irish incomeattracts little tax. The Irish tax deal isbeing investigated by the EU.

The $178bn in cash is mostly heldoffshore to avoid US taxes. The returnson this are derisory. Apple has usedsome of its cash to buy up otherbusinesses, but integratingacquisitions is not an easy task. It canuse cash to pay dividends but thatwould be deemed to be a repatriationof profits and be taxed at the rate35%. A higher dividend could forcerecipients, which includes Appleexecutives, to pay tax at highermarginal rates. But capital gains aretaxed at a lower rate. So Apple hasborrowed money and spent $90bn onshare buybacks.

Despite breaking financial records,all is not sweetness at Apple.

PREMSIKKAApple musttackle coreissues

■ Prem Sikka is professor of accountancy at theUniversity of Essex

ACCA results come earlyfor some lucky students

ACCA EXAM RESULTS DECEMBER 2014 – WORLDWIDE Dec 14 Jun 14 Dec 13F1 Accounting in Business 83% 80% 74%F2 Management Accounting 58% 60% 61%F3 Financial Accounting 59% 63% 57%F4 Corporate & Bus Law 70% 45% 43%F5 Performance Management 44% 39% 41%F6 Taxation 43% 53% 45%F7 Financial Reporting 43% 47% 39%F8 Audit & Assurance 45% 40% 35%F9 Financial Management 40% 40% 45%P1 Professional Accountant 52% 52% 48%P2 Corporate Reporting 50% 47% 49%P3 Business Analysis 48% 46% 49%P4 Adv Financial Management 33% 35% 42%P5 Adv Performance Management 30% 29% 30%P6 Adv Taxation 38% 39% 41%P7 Adv Audit & Assurance 42% 36% 33%

A small number of students wereable to access their exam results forthe December 2014 session 24hours early due to a system fault,the ACCA has confirmed

In a statement to PQ magazinethe ACCA explained: “As soon asthe issue was discovered theappropriate action was taken toapply the correct [system]parameters. It should be noted thatfor the 90 minutes in which resultswere available students only hadaccess to view their own results.”

This isn’t the first time this hashappened to the ACCA, and if onestudent is right the results couldhave been available even more thanthe 24 hours before the resultsdate. The student told PQ: “Theresults were available last night[Friday 6 February] for somereason.” Another asked why theypaid a large annual subscription “if

they can’t get security right?”As predicted, the F9 and P4

December pass rates were low, at40% and 33% respectively. But P5,with a pass rate of just 30%, was

the shock. The good news was the70% pass rate at the new-look F4. • Next month we will provide all thenews and gossip from the ACCALearning Providers Conference.

Ready for the case?

Is CIPFA fitfor purpose?CIPFA is having a major rethinkabout its governance structure,questioning whether they ‘fit for thefuture’? The growth of CIPFA’sinternational family means it wantsto try to reflect this in itsgovernance processes.

A major consultation has led tocalls for a shift in the balance oncouncil from employment/sectorbased seats to regional ones. It isbeing proposed that these regionswill include international ones,depending on the overall size ofmembership.

Currently, 320 members out of13,000 are ‘international’. But overtime, CIPFA expects this number to

grow substantially, and they feelthese members need properrepresentation. By the end of 2015it has been estimated thatinternational membership will growto 2,000 – around 15% of the total.

Sir Tony Redmond is leading thereview and the consultation periodwill run until 13 March 2015.

CIPFA’s new HQ,close to Tower Bridge

The first-ever Operational andManagement CIMA case studiestake place this month.

Operational sitters will bedrinking in all they can on bottledwater to answer the ‘Valley Spring’case. We notice that the FD is afamily member (daughter) with noformal finance qualification. Theexam candidate is a recentlyrecruited finance trainee and weread the manager of the financeteam has left. This is got to be arecipe for danger!

The management case focuseson Bild, a large construction firm.Here the candidate is the seniormanagement accountant at thecompany. Among the pre-seenalong with an extract of thechairman’s statement are twonews stories. One highlights theconstruction industry gearinglevels and return on capital. Theother story takes a look at PFIs.• Check out our detailed analysisof the Strategic case, on acompany called Look, on page 30.

HTFT’s Vicky Taylor launched its brandnew ‘AAT Academy’ at its packedwinter party in Birmingham recently(see picture).

The AAT Academy will work withHTFT’s clients to support the identification, recruitment and development ofmotivated and committed individuals to become AAT PQs.

Taylor explained the AAT Academy will also introduce a new delivery model– one where employers are actively encouraged to help shape the curriculumand delivery timetable, creating a real employer ownership of skills.

Anyone interested in HTFT’s AAT Academy is being encouraged to visit theirwebsite at www.htftpartnership.co.uk

Win a KaplanAAT scholarshipKaplan Financial is planning to giveone lucky student the chance tostudy for free for their AATqualification through a KaplanScholarship. This will include allcourse fees paid for Levels 2 to 4.In addition, five runners-up willreceive a funded unit of theirchoice, from Level 2, 3 or 4. To bein with a chance of winning visitwww.kaplanfinancial.co.uk/aatwinand tell them why you’d like to getAAT qualified from the comfort ofyour own home with a KaplanScholarship. The competition closeson Friday 27 February and winnerswill be contacted the followingweek.

HTFT launchesAAT Academy

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011_PQ 0315.qxp_PQ 1209 000 06/02/2015 13:49 Page 7

The latest ICAEW professionalresults show that female PQscontinue to outperform their malecolleagues. Some nine out of 11annual prizes and five out of theseven subject prizes went to femaletrainees. Deloitte PQs also pickedup the most prizes.

Some 4,246 students sat the

December 2014 test. In total,7,856 papers were attempted and3,127 passed all papers they took.

There was no 90% pass rate thistime around, but the pass rates allheld up apart from the BusinessPlanning Taxation paper, whichslipped to 77.8%.

Most trainees opted to sit two

papers in December, with 74.6%passing both. The pass rate forthose sitting just one paper was72.2%, this meant 27.8% or 406PQs failed.


PQ news

As we were tucking into our Christmasdinners in the UK, the very seriouslynamed ‘Committee for theStrengthening of the AccountancyProfession in Malaysia’ issued aconsultative report. Recommendation7 caught my eye: “Makeaccountancy the profession ofchoice”. It seems undergraduates inMalaysia are put off a career inaccountancy “due to the tradition oflong working hours and largeworkloads” and the “lack of personalbrands of accountants”. So essentiallyhow do we make accountancy sexyfor typical students? Well, Hollywoodheart-throb Ben Affleck is busy filminghis latest blockbuster, ‘TheAccountant’. I wondered if Ben wouldhave the answer? While the film isdescribed as an action-thriller Affleckplays a mild-mannered, socially-weirdgovernment accountant whomoonlights as an assassin. Oh well,no real support from Hollywood then!

But the Malaysians are gearing up,aiming to make the country a regionalhub for professional service firms.They want to enhance the regulatoryregime, introduce specialistcertifications and protect the title‘accountant’. It has always intriguedme that in the UK there is noprotection for ‘accountant’, and itseems unfair that the public could betaken in by somebody claiming to bean accountant who has noprofessional qualification, regulationor oversight. Malaysia is on the righttrack about creating a more inclusiveprofession. Creating new pathways into the profession, including from non-accounting degree students is seen asa key to deliver this.

Interesting times in South EastAsia!

CARLLYGOHollywood is no help inimprovingthe image ofaccountants

■ Professor Carl Lygo ischief executive of BPP

Women on top

A CAREER AS A ZOMBIE!

ACCA PICKS PEARSON VUE

Working in finance can open up awhole new world. But Alex Noble(pictured) turned that all on itshead when he left his finance jobwith an energy provider company tobecome a professional… zombie!

Horror fan Noble said even hisfriends were bemused when he toldthem he was giving up a stablecareer to join Slingshot, thecompany that runs zombie chasegame ‘2.8 Hours Later’.

Noble has spent the last fiveyears volunteering as a zombieextra in films, on TV and in games,and now he runs the zombie school– he’s the zombie headmaster! In a

recent interview Noble said thatpeople started noticing himbecause he was “doing thingsdifferently”.

One game can involve up to 600people running around for threehours (2.8 surely?) and needs 60volunteer zombies, 12 actors, 12stage managers, five make-upartists, 10 production crew, securitystaff, plus bar staff for the ‘zombiedisco’ after-party. If you areinterested in a zombie experiencethe tour begins in Cardiff beforeheading to Birmingham,Manchester, Glasgow, Liverpool,Leeds, Sheffield and Bristol.

KPMG lawsuitOne in 10former andcurrent femaleworkers havejoined a class-

action suit against KMPG in theUS. Some 900 women have nowjoined the case in which formeremployee Donna Kassman isclaiming she and other womensuffered gender discrimination.

Sainsbury’s new auditor Sainsbury’s has replaced itsauditor of some 20 years, PwC. Incomes EY, who will audit theaccounts from March. The movecomes just weeks after the FRCannounced it was to examine therole of PwC in relation to the auditof Tesco’s accounts since 2012.

Formal Deloitte complaintThe FRC has delivered a

disciplinary ‘Formal Complaint’ inconnection with the conduct ofDeloitte and John Clennett,relating to the audits of thefinancial statements of AeroInventory plc and its subsidiaryAero Inventory (UK) Limited. Thecomplaint alleges that the conductof Deloitte fell significantly short ofthe standards reasonably to beexpected of members andmember firms.

EY targeting ex-soldiers EY has launched a newrecruitment programme to helpveterans. The firm recently signedthe Military Covenant and haspledged to become an ‘ArmedForces-friendly organisation’. EYwill also support employees whobecome members of the reserveforces. PQ understands that EYalready employs around 40ex-military personnel.

ICAEW PROFESSIONAL EXAM RESULTS Dec 14 Sep 14Audit & Assurance 86.3% 84.4%FA & Reporting 82.0% 86.7%Tax Compliance 82.7% 81.5%Business Planning Tax 77.8% 86.6%Business Strategy 87.3% 90.4%Financial Management 81.5% 74.9%

The ACCA has unveiled that it is now targeting late 2016for the introduction of CBEs for its skills level exams(F5-F9).

ACCA has also announced that it will be usingPearson Vue for the provision of the CBEs across theselevels. CIMA already use Pearson for its CBE exams.

The ACCA felt that by allowing students to take theirassessments at an independent centre network they canensure students have the same access to exam centresthat they current have today for the paper-based exams.

The F5 to F9 exams will start the transition towardsCBEs towards the end of 2016. Students will initiallyhave the choice of sitting CBE or paper exams.

It was pointed out that these papers will continue tofeature the longer questions, and that these sections willcontinue to be expert (human) marked.• The ACCA first introduced computer-based exams forthe fundamental knowledge exams in 1998.

PQ mar 15 p12• CCM.qxp_pq sept 12 p08 13/02/2015 11:10 Page 8

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PQ Magazine March 201514

PQ CIMA 2015

TICK THE RIGHT BOXHere’s part two of our sample questions for those studying E3. The answers are on page 24 – no cheating!

Question 6 – section C .Question type: drag and dropJ is an independent retailer of office products selling 2,000 different itemssuch as paper, stationery, printer cartridges, diaries and planners. The staffhave been told that J is to be sold to a large national chain of stationeryretailers. When the staff enquired about the safety of their jobs they weretold by their manager that there will be a meeting, at a future date, whenthey would be told whether or not they would be made redundant. Staffare very worried about their future with J and morale is at an all-time low.Place the strategies that describe the management action being taken toovercome resistance to the change in ownership.

Negotiation & agreement Participation & involvement Facilitation & support

Giving staff an opportunity to influence the change Place answer hereProviding help to staff with CV preparation and job searching Place answer hereGetting staff to suggest a timetable for change Place answer hereGiving staff an opportunity to express their concernsand management genuinely trying to respond

Place answer here

Offering staff training and counselling for their new roles Place answer here

Question 7 – section D .Question type: multiple responseAlfred Rappaport’s model for Shareholder Value Added suggested thatfuture cash flows should be discounted at a suitable cost of capital. Inorder to maximise future cash flows and reduce the cost of capital, heidentified seven drivers of value.

Which THREE of the following are drivers identified by Rappaport?■ Revenue ■ Sales growth rate■ Working capital investment rate■ Fixed Capital Investment Rate■ Interest paid

Question 8 – section D .Question type: drag and dropZ is a bus company running several routes between several cities incountry C. Z wants to implement the balanced scorecard, and itsmanagers have come up with several performance measures. Place eachof the measures under the correct perspective in the scorecard:

Financial Customers Innovation and learning Internal Processes

Investment in internet Average time taken to Growth in revenue Percentage of access on-board fill absentee slots buses running

with replacement staff on time

Cleanliness levels Operating Investment in Average time profit margin green buses taken to book

tickets online

Question 9 – section E .Question type: multipleresponseM car companymanufactures and sellsa range of cars fromeconomy compact carsto luxury cars and fuelefficient hybrids under arange of brands. TheCEO of M wants to useIS/IT to improve its valuechain. Which of the followingcan M use to improvesales and marketing? Select ALL that apply:

■ Order processing■ Customer databases –market segmentation,trends■ Electronic datainterchange■ CRM■ Search EngineOptimisation■ CAD

Question 10 – section E .Question type: single responseTrack-IT plc has recently spent a significant sum of money on asophisticated executive management system. The hardware and softwarechosen were reputable and have performed well, allowing Track-IT toproduce useful reports for board meetings.

However, the Finance Director of Track-IT has outlined serious concernsto the IT Director who was taking control of the design and control of thesystem, pointing out that while the new system has worked well, it has yetto provide any real benefits to Track-IT, as the business already had goodreporting systems and the shareholders were very happy with theinformation they receive about company performance.

Based on the Finance Director’s comments, which ONE level of Earl’s‘three levels of information strategy’ was not considered by Track-IT?A. Information management strategyB. Information storage strategyC. Information technology strategyD. Information systems strategy

• Jenny Hughes is a tutor at HTFT

PQ

NEED HELP?

Our professional tutors provide individual answers to

all your questions, online and free of charge!

http://opentuition.com/askthetutor

pq march 15 p14_Layout 1 13/02/2015 11:11 Page 31

Quality, Affordability, Employability

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015_PQ 0315_PQ 1209 000 02/02/2015 15:39 Page 7


PQ Awards 2015

A NIGHT TO London’s Café de Pariswas the venue for thisyear’s PQ Awards nightSenior management accountant at the Walton Centre,Stephanie Moonan, stole the show at the PQ Awards 2015recently. The ACCA PQ (she’s also AAT qualified) won thehotly contested PQ of the Year award. A credit to herprofession she knows how to work under pressure, but does itall with a smile.

CIMA picked up two awards on the night – one forAccountancy Body of the Year, and Dr Noel Tagoe was votedour ‘Accountancy Personality’. Tagoe’s appearance as the‘Grinch’ in the August issue of PQ did not hold him back!Anyone who saw him launch the CIMA new syllabus knowsthat we are talking about a real personality here. The onlything that almost did for him, however, was his love forManchester United football club!

CIMA was shortlisted this year for both its apprenticeshipscheme and its lead on Global Management AccountingPrinciples. CIMA’s openness over the introduction of the newsyllabus also showed this was a body prepared to listen. Itchanged the exam results day and is now allowing student totake their own calculators into the assessment centres.

Another big winner on the night was the AAT DistanceLearning Group on Facebook – shortlisted in two categories,winner in one. This small band of committed AAT studentsshowed the power an independent and unbiased group canachieve. They are our Student Body of the Year.

The Café de Paris was packed to therafters with over 250 party-goers

Get in! The Kaplan Financial team celebrate their double win

Top entertainment came courtesy of Paul Sinha

pq Mar 15 P16-17 copy CCM.qxp_Layout 1 13/02/2015 12:35 Page 2

PQ Magazine March 2015 17

Awards 2015 PQ

REMEMBER

Champions! PQ winner Stephanie Moonan with theNorth West Student Forum’s Jacqui Ruttter

Fun time at the ICAEW’s table

Zut alors! The JoJo Maman Bébé team

In the frame: Reed Business Schooland Reed Accountancy join forces

Cheers! Raising a glass to all the winners

pq Mar 15 P16-17 copy CCM.qxp_Layout 1 13/02/2015 12:35 Page 3


PQ Awards 2015

Student Body of the YearThe AAT Distance Learning Facebook Group

Accountancy Body of the YearCIMA

Accountancy College of the YearPrivate Sector: Kaplan Financial – Glasgow

Accountancy College of the YearPublic Sector: Rotherham College

Lecturer of the YearPrivate Sector: David Laws, LSBF

Lecturer of the YearPublic Sector: Stephen Field, Stockport College

Study Resource of the YearNHS North West Student Forum

Innovation in AccountancyACA intensive programme – BPP/KPMG

Training Manager of the Year Clement Keys’ Craig Bayley with his mum!

Accountancy Team of the YearFinance department, JoJo Maman Bébé

Accountancy Personality of the YearNoel Tagoe, CIMA

NQ of the YearKyle Tyrrell

Distance Learning Student of the Year Esther Alum

PQ of the Year Stephanie Moonan

Editor’s Special AwardJohn Moffat, Open Tuition

The Lifetime Achievement Award went to Tony Unett

pq mar 15 p18 CCM.qxp_Layout 1 13/02/2015 12:01 Page 2

019_PQ 0315.qxp_PQ 1209 000 09/02/2015 12:08 Page 7

The Financial Accounting andReporting (FAR) exam can be achallenging one. Not only does it

cover a large volume of material, but itscore purpose – to test your ability toprepare financial statements and yourunderstanding of reporting conceptsunderpinning these statements – is nomean aim. But with the right approachfrom the start a good passing grade ismore than manageable. Here’s a seriesof pointers that will enable ACA studentsto get the most out of their ICAEWlearning materials in the run up to theexam.

Six to eight weeks before the examAt this stage you will be starting yourstudies and should be working throughthe study manual chapters in order todevelop your understanding of the keyfinancial reporting standards. Make sureyou attempt the self-test questions as youcome to them in the ICAEW studymanual. It’s important to be able to applywhat you’ve learnt, and question practiseis the key to this. Some of thesequestions are exam standard and someare more intermediate. Developing yourexam technique is vital to passing FAR,but in these early days you should makesure you have the key concepts firmly inyour mind. This stage will take each ofyou different amounts of time, but as

there is a fair amount of material, youshould ensure you give yourself enoughtime to complete this.

Two to three weeks before the examThis stage could sensibly be termed therevision stage. By this time you should bemostly happy with the technical contentand the focus now should shift to theICAEW question bank and developingyour exam technique. The question bankis divided into four main areas: singleentity financial statements, single andmixed topics, statements of cash flows,consolidation questions and explanationof accounting treatments. Ensure youattempt questions from all these sectionsand it is key to attempt them to time.

Once you’ve attempted a question andtried all parts you should review youranswer in line with those in the back ofthe study manual. Pay particularattention to the layout as this is what youshould be attempting to replicate in theexam. For example, the written questionsare split into four distinct paragraphs:brief introduction, initial treatment,subsequent treatment and year endposition. Each paragraph clearly explainsthe stage you are at making it logical andeasy to mark.

For consolidation style questions youshould make sure your answer uses thefive standard workings laid out in the


PQ ICAEW focus

TALES FROM THE FAR SIDE

study manual: (W1) Group structure;(W2) Net assets of the subsidiary; (W3)Goodwill; (W4) Non-controlling interest;and (W5) Group retained earnings. Bylaying your answer out like this you willbe mirroring what the markers areexpecting. It will make your answer easierto mark and help you to understandwhere any adjustments would need to beprocessed.

When tackling both the single entityand cash flow questions you should writeout a blank pro-forma statement first,before you begin processing the extrainformation. This will allow you to createthe final statements as you go which willsave you time at the end of the question.All workings should be clearly laid outand referenced as you go so that themarker is able to follow your work andaward follow through marks where youhave made an initial error.

As mentioned before, the key here is topractise. The best way to understandwhat is likely to come up in the exam isby attempting the question bank andthen past papers. Be sure to visiticaew.com/examresources so that youcan go in to the exam room withconfidence.

Night before the examThe single most important piece of advicefor the night before is to make sure youget a good night’s sleep. You need to berefreshed and ready for the exam in themorning as this will make staying focusedin the exam much easier.

Don’t forget!Timing is key if you want the best chanceof passing. In the exam you will have 1.8mins per mark so a 20-mark questionshould take you about 36 minutes. Atfirst this probably won’t feel like enoughtime, but with enough practise you’ll soonget in to the swing of things. PQ

• Jason Bradley isan ACA tutor atKaplan Financial

Jason Bradleyoffers someadvice on

passing theFinancial

Accountingand

Reportingpaper

Some 340 people turned out for the ICAEW NCASS annual dinnerat the East Midlands Conference Centre in Nottingham in 16January, kindly sponsored by Macildowies. The evening was a greatsuccess and the raffle raised just under £2,000 for Maggie’sCancer Care in Nottingham. After dinner entertainment wasprovided by The Electric Band and there were an array of arcademachines for guests to amuse themselves on!

NCASS is always on the look-out for new committee memberswith ideas to help shape the future of the society. If you’re an ACAstudent and interested in becoming a committee member pleaseget in touch. Alternatively, if you have qualified and were involvedin NCASS in the past, each year we require a President and Vice-President to support us in an oversight role. We can be contactedvia firm reps, gmail ([email protected]), Twitter or Facebook.

NCASS night outgoes with a swing

pq mar 15 p20_Layout 1 09/02/2015 14:51 Page 23

21PQ Magazine March 2015

CIPFA spotlight PQ

HEALTHY LIVINGWe ask an accountancy trainee inthe NHS Programme who’sstudying CIPFA about theirworking life

Name: Amin ChoudhuryJob Title: Financial Management TraineeAccountant, NHS ProgrammeOrganisation: Great Ormond Street HospitalNHS Foundation TrustAge: 25Educational background: Graduate inEconomics at the University of Westminster

Following his graduation with aneconomics degree, Amin Choudhury isnow working in the finance department

at Great Ormond Street Hospital. Studying forthe CIPFA qualification, he let us in on what theprogramme is like…

Could you give a brief outline of your trainingprogramme? The finance programme is slightlylonger than the other specialisms at 31 months;this is mainly due to the exams for the CIPFAqualification. Successfully completing all 11exams (some get exemptions but I opted out)makes you a qualified Chartered Public FinanceAccountant and you are entitled to use the CPFAdesignation after your name.

Public finance accounting work consists ofseveral different elements. What kind of tasksdo you find yourself performing most often atthe moment? I am working on tasks that are inline with the earlier modules of the professionalqualification – a lot of financial accounting andreporting. This changes as you progress throughthe scheme and the work becomes moreoperational and strategic. The order in whichyou have the experience may differ to othertrainees as every trainee is in a differentorganisation. However, the training is structuredto achieve consistency and standards through alist of competencies that every trainee shouldattain and programme managers help to achievethis.

What do you find most interesting aboutworking in the NHS? What was the appeal of apublic finance role over private finance? TheNHS is going through a very interesting time aswe’ve had a major reorganisation of the structureof the industry, coupled with big financialchallenges. This would make for an interestingtime to join any organisation, but the NHS is solarge and far-reaching in England that it meanseveryone has a keen interest and I get to beinvolved in some of the decision-making whichhas a direct impact on a large population. TheNHS finance stream interested me not only forthe professional qualification it offers but alsothe training in leadership through the Mary

Seacole Postgraduate Certificate course andpractical training through Experiential Learning.Personally, the public sector appeals to mebecause I’ve always been involved in ‘givingback’ and it also because my efforts areexponentially rewarded through great feedbackfrom our end-users, the patients.

How closely do you work with more senioremployees/mentor type figures? Do you workon your own cases or do trainees start on anassisting basis? I often work with senior peopleand being part of the graduate scheme helpsme to get into meetings with them. However, it isalso important to learn your craft by engaging inthe daily operational activities by assisting othercolleagues and learning best practices.

Is your job high pressured? If so, how do youdeal with it? Yes, I think pressure is inevitable inany organisation, but more so when your end-users are patients that require you to do your jobwell so they may receive the care that they need.The scheme is set up into regions, and beingpart of the London region I’ve found my fellowtrainees to be extremely supportive at timeswhen I found that I am under pressure. Also, thesupport offered by the Leadership Academy (theorganisation that co-ordinates the GraduateScheme) is excellent and they are always readilyavailable, with buckets of experience fromprevious intakes.

What’s the biggest no-no for someone hopingto apply for this scheme? If you’re looking foran accounting role that requires you to be at a

desk all day then this is the wrong choice – thepublic sector is stretched and if you are part ofthe scheme you will find that you do more thanjust finance. For example, speaking with servicemanagers about re-designing how they deliverdermatology clinics.

Maths is of course crucial to get on in thisindustry, but what other skills have you foundimportant during your NHS Programme so far?Communication is an extremely important skillthat is very valuable not only when you are atrainee but also when you are a manager. Theindustry is going through challenges – thechange is continuous – and to keep ahead ofthis and to make sure everyone is on-boardneeds sound communication skills. They help toovercome these challenges.

Did any of your life experiences (such asjoining a society or sports club) enhance yourapplication for public finance accounting?Every life experience (providing it is legal andethical) will help your application as traineescome from all ages and backgrounds. But thecommon thread in all trainees is a strong desireto make a difference for patients – and theambition to go out there and do it.

Do you have an idea about the direction you’dlike your career to take when you’ve completedyour training? I am keen to learn fromhealthcare organisations in other countries in themedium-term future, but for the long term (10years) I aim to become a director at anorganisation I believe I can add value to. PQ


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corporate reporting PQ

The Financial Reporting Council’sClear & Concise initiative is a keymove towards higher quality

corporate reporting and part of itscontinuing efforts to address some of thecommon criticisms about the quality ofcommunication in annual reports. We aretalking about the use of boilerplate ordisclosure of immaterial information here.

What is it?Clear & Concise reporting is not a newreporting requirement – its aim is simple,to promote good communication incorporate reporting. It is all aboutensuring easy access to relevantinformation for investors.

The terms ‘clear’ and ‘concise’ are theprinciples of good communication, saysthe FRC, which is the overarchingprinciple that encompasses a number ofcharacteristics of high-quality corporatereporting. For example, the principle of

fair, balanced and understandableidentifies some characteristics of bestpractice annual reports.

Cutting clutterSome associate cutting clutter with takinga ‘red pen’ to annual reports or one-offactivity. Clear & Concise builds on theFRC’s cutting clutter agenda.

Calls to actionOne of the aims of the Clear & Conciseinitiative is to change behaviour relatingto financial reporting. The FRC calls foraction by all those involved in thefinancial reporting process to focus on:• Communication.• Placement of information.• Materiality.

The initiative brings together activitiesfrom across the FRC. These include:• Narrative reporting – the FRC’sGuidance on the Strategic Report was

CLEAR AND CONCISEthe first in the series of initiatives. Theguidance encourages companies to beinnovative when drafting their annualreports and reinforces the importance ofmateriality. This includes considering theplacement of information to facilitateeffective communication. This guidancewas published in June 2014.• Reports from the Financial ReportingLab – including a project on accountingpolicies, a report setting out observationson reporting during the last season, andcase studies.• Reporting by Corporate ReportingReview – on areas in financial statementswhere it commonly observes ‘clutter’,control to the principle.• Influencing – those setting disclosurerequirements in Europe andinternationally.

For further information go towww.frc.org.uk/Our-Work/Headline-projects/Clear-Concise.aspx PQ

A new FRC initiative aims to ensure that annual reports provide relevant information for investors

Remuneration reporting was oneof the key areas of increasinglength in companies’ annualreports. The Financial ReportingLab found that FTSE 100companies with December year-ends increased the average lengthof remuneration sections by 34%,equating to five pages.

The increase was a result ofcompanies implementing the newremuneration reportingrequirements. However, from this

year companies should considerwhether the directors’remuneration policy can beomitted from the annual report.This is permitted where thecompany does not intend to makea change to the remunerationpolicy, which requires a resolution(vote) to approve. If omitted, theregulations require that companiesmust include a reference to whenthe policy was last approved andwhere it can be found online.

Improving the quality ofremuneration reporting

1) A single story – the narrative in the front endis consistent with the back end accountinginformation. Significant points in the financialstatement have to be explained in the narrativereports so there are no surprises hidden in theaccounts.2) How the money is made – the strategic reportneed to give a clear and balanced account,which includes an explanation of the company’sbusiness model and the salient features of thecompany’s performance and position, good andbad.3) What worries the board – we are talkinggenuine risks and uncertainties here. Thedescriptions have to be sufficiently specific thatthe reader can understand why they areimportant to the company. You also need to seethe mitigating actions taken by the Board to

manage these.4) Consistency – highlighted or adjusted figuresand KPIs have to be clearly reconciled to theamounts in the accounts. Reasons for anyadjustments must also be provided.5) Cut the clutter – important messages mustnot be obscured by immaterial detail. Cross-referencing must be used effectively andrepetition avoided.6) Clarity – use precise language and explaincomplex accounting issues clearly = avoid jargonand boiler-plate.7) Summarise – support the accompanyingnarrative.8) Explain change – explain significant changesfrom the prior period.9) True and fair – the spirit and letter ofaccounting standards has to be followed.

Thinking about layoutAnnual reports that are logically laid out andpresent information with the minimum ofduplication are user friendly. So companies need tothink about:• There is no requirement to include a chairman’sCEO or finance director’s report. Duplication ofmessage can be a problem here.• You can reduce the overall length of the annualreport. Put current and comparative data side byside, rather than in separate tables. This helps showcomparability of information and provides clarity.• Use the inside covers of the report to displayuseful information.• Use white space on contents pages to highlightinformation such as key performance indicators.Contents pages are not clutter – they provide usefulnavigation for investors.

The nine characteristics of good corporate reporting


According to the examiner, Requirement1 can be the downfall for many studentssitting the Advanced Case Study exam.

This is not because it is too difficult but becausecandidates spend far too long on it. So how cancandidates prevent themselves falling into thistrap? Following effective analysis of theAdvanced Information, candidates should know‘the story’ behind the figures.

Rolling Stores (November 2014) Rolling Stores (RS) was in the logistics businessand had three revenue streams – haulage,warehousing and courier services. Haulage andwarehousing were relatively mature, while courierwas in a growth phase, having been launched inMay 2012.

The company was seeing growth in revenuebut falling margins; the industry demandedcontinual investment in new vehicles and therewas a need to invest in logistics IT to improveplanning and efficiency. RS financed the majorityof NCA additions via finance leases, but it wasalso carrying a £3.5m loan on the SOFP.

RS was reliant on a few customers. Kentree(household appliances brand) accounts for 25%of haulage work and 75% of warehousing.Buildwell (builders’ merchants/DIY products)accounts for 65% of courier services’ work. RSshould not upset these customers and work topreserve these relationships (easy marks forstudents); it also needs to be said in the examwhether the relationships are in jeopardy.

Wider context To make sense of this business information, acandidate needs to appreciate the wider contextin which this business is operating.

The economy in the UK was showing signs ofrecovery – and so logistics was seeing an uplift.With fuel prices falling (obviously important forhaulage/courier firms) the courier market wasexpected to grow significantly (due to increasedonline shopping activity), but the haulage andcourier markets were very competitive.

This context needs to be blended with thewritten analysis of the numbers, helping the userof the report understand why the numbers havemoved or not, and why your judgements andrecommendations are appropriate.

The exam itself The candidate now knows the story, and sowhen the numbers perform as expected thereasons are available to be added to the report.

The requirement asked candidates to analysePBT, analysing the main items on the statementof profit and loss. • Revenue: Total first (always) and drill down(namely, explanations as to why the total

revenue figure has changed) by stream (alwaysdo revenue mix as well – it’s a given). Couriersaw massive growth (main driver of total revenuegrowth); this was expected but needs stating.• GP: Absolute movements, but the story isalways in the margin (it continued to fall –expected – rising costs and inability to pass onin prices due to competitive nature of market).Drill down (max twice) – what cost of sales havea story? 1. Fuel (prices changing, key cost) and2. agency/subcontract labour (because of thecourier work).• OP: Margin continued to fall – expected. Noreal story behind the admin expenses from theAI so no where to drill, other than the allocationwas dubious (from the AI we were toldoverheads were allocated for ‘ease ofpreparation’!)• PBT: Margin falling – at 30 September 2014only 0.2%! Candidates need to get excited bythis – this is very critical and unsustainable. Drilldown – interest payable – highly geared andfinance leases.

The above problems then lend themselves tocandidates giving commercial advice(recommendations).

The examiner always throws in what he callsa “tutor proof twist” – something we are unableto prepare for fully. Nevertheless, as long ascandidates stay calm, the twist is never overlycomplex. The key to staying calm is being readyfor the numbers that you can foresee.

Understand the marking grid and play thegame by the examiner’s rules. Attempt pastpapers and then review thoroughly; two-thirds ofRequirement 1 is formulaic – candidates justneed to know the formula. • Matt Holden, Reed Business School

PQ

24

PQ ICAEW case study


Matt Holden explains how you canavoid the Requirement 1 pitfalls inthe ICAEW’s Advanced Case Study

IN FOR THE LONG HAUL

Question 6 answer

Giving staff an opportunity to Participation & influence the change involvement

Providing help to staff with CV Facilitation & supportpreparation and job searching

Getting staff to suggest a timetable Participation & for change involvement

Giving staff an opportunity to express their concerns Negotiation & and management genuinely trying to respond agreement

Offering staff training and counselling for their new roles Facilitation & support

Question 7 answerSales Growth: Assuming sales are profitable, this should increase cash flow.Working Capital investment rate: This should be minimised to reduce theamount of cash tied up in inventory and receivables.Fixed capital investment rate: If growth demands high levels of capitalinvestment, this will represent a large outflow of cash.

Question 9 answerCustomer databasesElectronic data interchangeCRM – customer relationship marketingSearch Engine Optimisation

Question 10 answer – DRationale: Track-IT has purchased the correct hardware and software forits new system, indicating that it has considered IT strategy. It has alsoidentified which members of staff are responsible for design and control ofthe system (IM strategy). However, it has purchased the systems withoutany real thought to the business needs. This shows a lack of alignmentbetween IT investment and its business strategy. Track-IT has thereforefailed to consider the organisation’s information systems strategy. Note thatinformation storage is not one of Earl’s three levels model.

Please note: answers are out of sequence

Financial Customers Innovation and learning Internal Processes

Operating Percentage of Investment in internet Average time takenprofit margin buses running access on-board to book tickets

on time online

Growth in Cleanliness Investment in revenue levels green buses

Average time takento fill absentee

slots withreplacement staff

Question 8 answer

E3: TICK THE RIGHT BOX – ANSWERS FROM PAGE 14


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025_PQ 0315_PQ 1209 000 09/02/2015 11:50 Page 7


PQ study tips

GIVE IT A REST!the brain that specialises in storing newprocedures and skills, not facts andfigures. TV off and the information will goto the hippocampus where it is organisedand categorised and easier to retrieve.

When it comes to reading, Levitinclaims that if you read a paper book youare more likely to take in more than if youread an e-book. There have been severalrecent studies reconfirming this theory.Levitin points out that the hippocampus(the seat of spatial memory) is whatallowed our ancestors find the same wellsand fruit trees time and time again. Thatplace memory also helps us whenreading. You associate different places inthe book with different thoughts. Youshould be able to read somethingimportant in a book and know roughlywhere it appeared, even down to whetherit was on a left or right side of the page,or at the top or bottom. You don’t havethese spatial cues with an e-book.

Another worry for Levitin withtechnology is that we don’t think deeplywhen using it because we don’t have to.

So what is his advice? Switch off yourphone when you start to study. If you arestudying on your laptop or iPad you haveto have the self-discpline not to react toanything – so no Facebook or Twitter. Youcan’t pass accountancy exams if youthink about a complicated theory forabout 30 seconds and then check youremail! PQ

How is your multi-tasking – is itsomething you are really goodat? So you can type away on

your keyboard and have a conversationwith a work colleague at the same time?Well, be very careful what you think,because top neuroscientist Earl Millersays you are deluding yourself. Why?Because there is no such thing as multi-tasking! All you are doing, Miller believes,is switching very quickly between tasksand often gadgets. And this delusionalbehaviour is coming at a big cost. Yourbrain needs to move between focusingand daydreaming to help it recalibrateand recuperate. So-called multi-taskingdoesn’t allow it to do this, explains Miller.

His thoughts were recently echoed byfellow neuroscientist Daniel Levitin. In hisbook ‘The Organized Mind: ThinkingStraight in the Age of InformationOverload’, he calls multi-tasking a“diabolical illusion”. Levitin is worriedthat information overload means your

brain can no longer tell what theimportant things are. Reacting to everybeep on your phone or never being ableto turn it all off risks denying your brainits resting state. You are overtaxing it!

Levitin goes on to explain why youcan’t study with the TV on (but you knowthat). Leave the TV on and your studygoes into your striatum – the region of

Are you overloading the onething that can ensure a passin those exams – your brain?

pq mar 15 p 26_Layout 1 09/02/2015 14:55

027_PQ 0315_PQ 1209 000 02/02/2015 15:38 Page 7

Iwas recently sitting in a rather nicerestaurant in France when I wasapproached by the waiter. “Voulez-

vous un peu de vin avec votre repas?” heasked. I stared at him in silence beforereplying: “Eh?” If only I had understoodthe language!

In one of my classes recently I asked afinal level student: “What’s the doubleentry for a cash sale?”. They stared at mein silence before replying: “Eh?” If onlythey had understood the language (theyhad clearly never learned the basics).

Double entry is the language ofaccountancy and it is critical to both yourstudies and your career that you becomefamiliar with its workings.

Categories of transaction .As a starting point it is important to befamiliar with the different types oftransaction that businesses canundertake. Most of the transactions thatyou see in your studies will fall into one ofsix basic categories:Income: this generally relates to therevenue generated by making sales tocustomers, but can also include interestreceived or dividends received.Expenses: these are operating costsincurred by the business such aspurchase costs, rent of premises orsalaries.Assets: these are things owned by thebusiness such as vehicles, computerequipment or even cash in the bank.Liabilities: these are things owed by thebusiness to other people and includebank loans and trade payables owed tocredit suppliers.Capital: this represents amounts owed tothe owner of the business (the soletrader) either for amounts invested in thebusiness or for the profits earned by thebusiness. Capital can be thought of as aspecific type of liability.Drawings: these are amounts withdrawnfrom the business by the owner andtherefore reduce the capital balance.

The dual effect .Before even worrying about the doubleentry for a transaction it is really useful toconsider the so-called ‘dual effect’ that ithas on our accounting records. The dualeffect says that any financial transactionwill impact upon two balances in ouraccounts. This is a little simplified, assome transactions will impact upon morethan two balances, but you can perhapsthink that the dual effect means that


PQ AAT exams

Gareth John explains theconcept of double entry – thelanguage of accountancy

LET’S GET TECHNICALDEAD

Debits increase:

Expenses

Assets

Drawings

CLIC

Credits increase:

Liabilities

Income

Captial

So for a cash sale to a customer we canfollow on from our dual effect above asfollows:1. Increasing the balance of cash willrequire a Debit entry to the cash accountsince cash is an asset and included inDEAD. 2. Increasing the value of sales made willrequire a Credit to the sales account assales are income and included in CLIC.

And that gives a balancing doubleentry of Debit Cash, Credit Sales.

Notice that DEAD CLIC reminds you ofhow to increase a category of transaction.To decrease them you do the opposite.So if you receive cash into your bankaccount (as shown above) you wouldDebit Cash, but if you pay cash out of thebank account you would need to CreditCash.

Let’s construct the double entry for acash purchase from a supplier:1. Decreasing the balance of cash willnow require a Credit entry to the cashaccount as we need to do the opposite ofDEAD.2. Increasing the value of purchases willrequire a Debit to the purchases accountas it is an expense and included inDEAD.

This gives the balancing double entryof Debit Purchases, Credit Cash.

Why don’t you have a go at this exampletask? When you have finished you can seeme talk through my solution atwww.firstintuition.co.uk/category/aat

Give the double entry for each of thefollowing transactions:1. A cash sale of £5002. A credit sale of £1,0003. A cash purchase of £8004. A credit purchase of £1,2005. Receiving £600 from a credit customer6. Paying £900 to a credit supplier7. Buying a motor vehicle for £2,0008. Taking out a loan of £5,000 from a

bank

PQ

every transaction impacts upon at leasttwo balances in our accounts.

For example, a cash sale to a customerhas the following dual effect:1. The balance of cash (an asset of thebusiness) will increase.2. The value of sales made in the period(income for the business) will increase.

A cash purchase from a supplier hasthe following impact: 1. The balance of cash (asset) will nowdecrease.2. The value of purchases made (anexpense of the business) will increase.

How about a transaction that does notaffect the balance of cash; perhaps acredit purchase where we have not yetpaid for the goods bought:1. The value of purchases made(expense) will increase just like for thecash purchase above. It does not matterif you have not paid yet, you have stillincurred a cost.2. We need to recognise a trade payablesbalance (a form of liability) for theamount still owed to the credit supplier.

Double entry .Using our knowledge of the dual effectwe can start to construct the double entryfor any given transaction. ‘Double entry’again suggests that each transactionimpacts upon at least two balances in ouraccounts (‘dual’ and ‘double’ have asimilar meaning here).

Double entry is a system of Debit andCredit entries to describe the dual effectof a transaction. Every double entry mustbalance, with equal values on the Debitand Credit sides.

A useful mnemonic to help youremember your double entry basics isDEAD CLIC.

• Gareth John is atutor/director withFirst Intuition andhelps to managetheir AAT distancelearningprogramme. Hewas PQ MagazineAccountancyLecturer of theYear in 2011

PQ mar 15 p28 CCM.qxp_Layout 1 13/02/2015 14:37 Page 23

In an article last year I ended withthe phrase: “And then there is‘recycling’. Don’t get me talking

about recycling.” But maybe you shouldget me talking about ‘recycling’, as it isan issue everyone else is talking about.There is a wonderful Peppa Pig episodecalled ‘Recycling’, with a lovely little tune.It is one of my son’s favourite episodesand the tune is looping around my headas I write this. Have a look on YouTube ifyou have a moment. But recycling incorporate reporting does not involvekeeping your plastic bottles in one binand the glass in another. And recycling incorporate reporting is most certainly not agood thing.

Recycling is the rerecognition of apreviously recognised gain. There you go:that is all there is to recycling, but what atechnical phrase this is. Gains and lossesare reported through a performancestatement called the Statement of Profitor Loss and Other ComprehensiveIncome, or SPLOCI for short. As the ‘and’tells us, the SPLOCI is a compoundreport with two components: the P/L andthe OCI (Other Comprehensive Income).And as was discussed in the SPLOCIarticle, most gains and losses go throughP/L, except the five listed below that gothrough the OCI:H: hedging – cash flow hedge gains.E: exchange on subs – forex gains on theretranslation of foreign subs.A: actuarial – remeasurement gains inpensions.P: ppe revaluations – gains on occupiedproperties.S: strategic equity – gains on financialassets classified FVOCI.

As discussed in my previous article(PQ, July 2014), there is no underlyinglogic to the gains that are banished fromthe P/L and languish in the OCI. It is justthe way it is. And, likewise, there is nologic with recycling. The top two (hedginggains and forex gains on foreign subs) dorecycle and the other three do not. Buthow does recycling work? As usual, thebest way to get a feel for the process iswith an example.

In year one, our imaginary entitymakes a forex gain of $60m on a newforeign sub measured in the homecurrency and a ppe revaluation gain of$60m on the rise in the value of the newhome factory.

Both these gains go through OCI in theperformance statement and both areaccumulated in OCE (Other Componentsof Equity) on the position statement.Then at the start of year two the foreignsub and the home factory are both soldfor $500m. Both the sub and the factoryhave an exit carrying value of $400m. Sothere is a profit on disposal of $100m tobe reported in the P/L for each. But hangon: there is an accumulated $120m ofgain in OCE related to these two solditems. You may know that there is aculture of interpreting the OCE as


international standards PQ

Recycling equalsdouble countingMartin Jonestackles theconcept ofrecycling andcorporatereporting

“unrealised” and “undistributable”because the gains in OCE are notrepresented by cash. But this $120m isrepresented by cash. Both the sub andthe factory have been sold. So the$120m must move to the retainedearnings (RE) where it is “realised” and“distributable”.

So the $60m gain on the factory issimply moved from the OCE to the RE.The gain goes from one equity bucket tothe other on the B/S with no fuss. Noneed to put the gain through this year’sperformance because the gain alreadywent through last year’s performance.And, of course, it made perfect sense torecognise the gain last year as it was lastyear that the factory rose in value. This isin perfect tune with sales. Sales arerecognised in the year of the sale and notwhen the cash flows. If a sale happensjust before the year end and the cash isreceived just after the new year start thenwe would not recognise the sale again inthe year of cash receipt. Rerecognitionwould just be plain silly. Exactly. Nowcomes the tricky bit.

We do rerecognise the $60m forexgain on the sale of the foreign sub. The$60m sitting in OCE representing the

accumulated forex gains on the foreignsub are dragged out of the OCE andadded to the actual profit on foreign subdisposal of $100m to give a reportedprofit on disposal of $160m in the P/L.The profit ends up in the RE, of course,which is fine. The problem is therecognition of the same gain twice. Oncein the year of the gain and again in theyear of the cash flow. The same $60mhas appeared in both this year’s SPLOCIand last year’s SPLOCI.

This rerecognition of gains and losseson foreign subs and cash flow hedges iscalled “recycling” and has been widelycriticised. There appears to be no logic tothe isolation of five gains that go throughOCI and there appears to be less logic tothe isolation of the two of those that latergo through P/L. But it appears this cultureis so entrenched that the InternationalAccounting Standards Board (IASB) ispowerless to reverse it. However, it hasresulted in the cumbersome division ofitems in the OCI between those that “willnot be reclassified to profit” and thosethat “may be reclassified to profit”. Youmay have seen these phrases in the OCIand wondered what that was all about.Now you know. PQ

• Martin Joneslectures at LSBF

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PQ CIMA pre-seen

Look is a diversified technologycompany, based on a successful,and dominant internet search

business. The mass market usage of itssearch business helps Look generateenormous advertising revenues, which ithas used to grow its business into areasincluding online storage, mapping,operating software, mobile phones, apps,internet-enabled contact lenses, andmusic and video sales.

All of these operations are carried outin separate business units under a listedparent company. As well as externalsales, each business unit buys and sellsservices internally via a transfer pricingpolicy.

The company’s mission statement‘Connecting people to the world’ isunderpinned by its unofficial policy to ‘Doonly good’. This in turn informs thecompany’s stated commitment to positiveCSR, as illustrated by its extensivepolicies in respect of its products, peopleand communities.

While the company as a whole isfinancially successful the performance ofits business units varies greatly. Forexample, while its search businessgenerates gross profits of $36bn, some ofits units, such as operating software and

lenses, do not generate any revenues.Overall, group sales are $62.5bn,generating gross profits of $40bn, andnet profits after interest and tax of$18bn. This has allowed Look toaccumulate cash reserves of $9bn andmarketable securities of $39bn, makingthe company highly liquid.

The company’s founders, Jay Bride,Martin Hong and Vijay Chatterjee, remainactively involved, mainly through focusingon continued innovation. Much of theday-to-day executive functions aredelegated to the other experienced boardmembers. Although Look is listed thefounders retain effective control of thecompany via ‘founder shares’ that carry20 times the normal voting rights. Thereare concerns that Vijay is looking to retirefrom Look (there’s a news report carriedin the pre-seen).

The major plank of Look’s strategy is tomaintain market dominance. The keystrengths of Look are its significant userbase and strong brand. Knownopportunities are to stretch its brand intoinnovative products, and to grow the useof its OS platform. The main weakness ofLook is a reliance on skilledprogrammers and specialists, somethingit attempts to offset by being a good and

Why you must get

the LookSteve Malpass takes a look at LOOK – the first Strategic Case Study pre-seen

generous employer. The main threats toLook are growing concerns about internetprivacy, increased regulation and the lowentry barriers in some of its markets.

Overall, the company is an undoubtedsuccess; however, it does face significantobstacles to continued growth in salesand profits, not least in view of thesaturation of the internet search market.Twinned with this is the rise of an largeindirect rival, Friendtime, a social mediasite. Given Look’s reliance on attractingcommercial advertising revenue it mustbe very careful to identify and combat arange of direct and indirect rivals.

So what does this mean in terms ofthinking about the pre-seen in moredetail?

From an E3 perspective, we should beaware of why and how Look is successfulfrom a business strategy viewpoint, bothin terms of the composition of its strategyas well as how this is implemented andcontrolled.

The most obvious strand of this is thecommitment to market dominance.Achieving a critical mass of users allowsLook to drive more revenue fromadvertisers than its rivals, which has thetwin advantages of driving more sales,and in turn funding its attempts toinnovate with new technologies. Thisallows it to dominate these from the start.

Identify the risks .From a P3 perspective, the overall aimhere is to identify the risks faced by Lookand then consider areas where more mayemerge. Look faces various challengesfrom its many divisions, including howthey are organised and how they perform(or in the case of Look Lens, don’t).Information systems and how they areoperating might also feature, as couldgovernance issues, ethics and corporatesocial responsibility (CSR) and financialrisks.

And from an F3 perspective, it is clearthat Look is in a position to consider anumber of financing issues:• Changes to capital structure –interestingly, many companies (Google,Apple) are starting to issue bonds to takeadvantage of low interest rates. • Changes to dividend policy – some techcompanies do not pay dividends andhave no plans to do so; this is becausethey believe that they can get a betterreturn for shareholders from investing thismoney in projects and in acquisitions.Others have recently bowed toshareholder pressure and haveintroduced a dividend and share buybackprogram to deal with their own cash‘stockpile’. • Evaluation of a possible takeover – youneed to be able to advise on the validity,the strengths and the weaknesses of allof the key valuation techniques as theyapply to Look. • Steve Malpass is head of the CIMAprogramme at BPP

PQ


• Pass rate: 53% (June 2014) • Technical difficulty: 7/10 • Weighting of calculations: 75 – 80% • Weighting of discursive elements:

20 – 25% • Exam technique: 7/10 (formerly 8/10

on old syllabus)

The new format . .The exam format for F6 is changing from June2015. It will now comprise two distinct sections:section A (15 multiple choice questions [MCQs]each worth two marks); and section B (two 15-mark questions and four 10-mark questions). Allquestions will be compulsory.

The syllabus . .The F6 Taxation syllabus is broken down into sixkey areas:

AThe UK tax system and its administration:This section introduces students to the

underlying fundamentals of UK tax including thepurpose of taxation, the structure of HMRC andthe self-assessment system. Historically this hasbeen tested for a few marks at the beginning orend of a written question and occasionally self-assessment has been the topic of a 15-markquestion. However, under the new format it ismore likely to be tested in MCQs, or could be thesubject of a 10-mark question in section B.

BIncome tax and NIC liabilities: Under theold format there was always an income tax

question (25 or 30 marks), and NationalInsurance Contributions (‘NIC’) were usuallyworth 5–10 marks on each paper. Income taxwill continue to be one of the key examinableareas under the new format: in a proportion ofthe MCQs, one guaranteed 15-mark questionand it is likely that at least one of the 10-markquestions will contain elements of income tax.There are no guaranteed marks for NICs, butthey are likely to feature in both sections of theexam, and usually represent easy marks.

CChargeable gains: This section requiresstudents to have knowledge of the taxation

of capital gains for individuals and companies.Under the old format there was always a 15-mark question on this area, but under the newformat there are no guaranteed marks.Nevertheless, it is highly likely to feature in

MCQs and also as the focus of a 10-marksection B question, so students will need tostudy this area in detail.

DInheritance tax: Inheritance tax is arelatively new area of the syllabus but has

been tested at every exam sitting since itsintroduction. There are no guaranteed marks oninheritance tax under the new format, butstudents can expect to encounter it in bothMCQs and in one of the 10-mark questions insection B.

ECorporation tax liabilities: Under the oldformat there was always either a 25-mark

or 30-mark question focused on corporation tax.Corporation tax will continue to be one of the keyexaminable areas under the new format: in aproportion of the MCQs, one guaranteed 15-mark question and it is likely that at least one ofthe 10-mark questions will contain elements ofcorporation tax.

FValue added tax: This final section wasguaranteed to be worth 10 marks under the

old syllabus and usually featured as part of acorporation tax question. Under the new syllabusthere are no guaranteed marks but value addedtax (VAT) is very likely to feature in both MCQsand as the subject of a 10-mark section Bquestion.

Sitting the F6 exam . Previously, the F6 exam was very much focusedon the first two questions, which predominantlytested income tax and corporation taxrespectively. Collectively, these two questionswere worth 55% of the total marks so a good (orpoor) answer here could very much determinewhether a student passed or failed.

Consequently, many students studied thesetwo taxes in preference to the remaining four,which were not worth proportionality as manymarks in the exam. The exam format changesare likely to have to following impacts on the F6exam:• Less emphasis on income tax and corporationtax with only 15 guaranteed marks on each. • The introduction of multiple choice questionsmeans that more topics can be tested at eachsitting in a high level of detail. This could meanthat previously fringe topics start to appear withgreater regularity. • As narrative-based multiple choice questionscan potentially be answered very quickly, theexam may become less time pressured than inrecent sittings. In summary, it is more importantthan ever that students study the whole syllabusthoroughly. A well-prepared PQ should feel asconfident of passing under the new exam formatas technically very little has changed. • Danielle Evans is Kaplan Financial’s F6Content Specialist

PQ

31

ACCA F6 paper PQ


Danielle Evans explains the ins and outs of the new-look F6 paper

It needn’t be taxing…

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pq mar 15 p31•_Layout 1 09/02/2015 15:00 Page 14


PQ careers

You are now at a stage whenyou will probably be looking atdeveloping your finance skills

in line with your studies. This maymean looking for a job and you need to preparefor your job search. Getting your CV – andyourself – ready for the interview stage is veryimportant right now. A key element to beingsuccessful with securing a new job is first of allunderstanding what you are good at, so you caneffectively sell yourself.

To give yourself the best possible chance ofbeing successful at interview you need toprepare for some questions employers are likelyto ask you. Most employers will ask you aboutyour strengths and weaknesses during aninterview. For example, “what are your keystrengths?” or “what skills can you bring to ourbusiness?” Despite this question having beenasked for many years it still catches people out –and quite frankly it should not do. Here aresome ways to identify your key strengths and beready to answer these questions:• Do your own SWOT analysis, looking at yourstrengths, weaknesses, opportunities andthreats. Think of attributes you might take forgranted or technical skills you might have.Consider your day-to-day responsibilities, readthrough appraisal documents and ask others in

order to candidly help you identify yourweaknesses so you can turn them around. Thekey with this is to be honest with yourself –listing what you would like to think are yourstrengths will not be useful. Look at your skillsand the areas that need improving, identify anyunderlying opportunities and threats that maycome out of your strengths and weaknesses andthen work on promoting your strengths andrectifying your weaknesses:

• Think about what you enjoy and equally whatyou do not. Typically, you enjoy what you aregood at, so this can be a simple but effectiveindicator.• Ask for regular feedback from your colleagues,friends and even your boss. Again, ask them tobe honest with you. You may be surprised bytheir answers.• Review past appraisals and one-to-ones. Don’tjust look at what they identified as strengths butalso areas of development. Have you improvedon these? Are they now strengths? Your appraisaldocuments could also contain strengths andweaknesses that you have overlooked so do takethe time to go back over them.

If you have effectively used the abovemethods you will be armed with a list ofstrengths that you can effectively sell to futureemployers. You will equally be aware of yourweaknesses and can take steps to developthese. Finally, you will be well prepared toanswer one of the most difficult questionspeople find they get asked during an interviewasking about your strengths and weaknesses.

Honesty is crucial with the above methods, sobe honest with yourself and you will excel inyour job search.

For more information and access to jobopportunities visit www.hays.co.uk/accountancy• Karen Young, Director at Hays Accountancy& Finance

PQ

Identifying your key strengthsKaren Young offers advice on how you can tell what you are good at

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careers PQ

The workplace: look them straight in the eyeRichard King, former managing partner of EY,revealed recently that he used Martin Johnson’s ‘eyetest’ to decide if his fellow partners were up for it andfully on board with his approach and ideas. Likeformer England rugby captain Johnson, King wouldlook into the eyes of each partner and ask them aseries of short questions to determine theirlevel of commitment to what he wasproposing.

At 6 foot 7 inches tall, Martin Johnson,widely regarded as one of the best RugbyUnion players of all time, captained theEngland Ruby Union team from 1999 toNovember 2011. According to King:“Martin… had a thing called the ‘eye test’.He’d go round a dressing room before agame and look each of his players in theeye and he could tell who was up for it –forget all the psychometric profiling(although we did all of that too). He’d lookthem in the eye and say we’re playing the All Blackstoday, are you up for it? And he knew the ones whowere up for it and who weren’t up for it from theirdemeanour.”

Although it’s surprising to think that this approachwould be as effective in the boardroom as it was inthe dressing room, King attributes this as one of thekey factors in his success during his time as

managing partner of EY.King started his career at EY as an articled clerk in

1976, and was made partner in 1981, aged just 29(the youngest ever partner at EY at the time). In1989, he went on to become partner of EY’s Lutonoffice, and within five years had turned the struggling

office into one of the mostprofitable in the country. Heretired in 2010 after servingas EY’s Managing Partner ofUK & Ireland (ExcludingLondon) since 2006.

Other factors Kingattributed to his successincluded being “dynamicand pretty uncompromising”,having “clarity for you andyour team in terms of whatyou’re doing” and “open,direct, robust conversation

with your partners”, which included transparency onhow much all partners were paid, so that they knew:“This is how much I value you.”

In an industry where the focus is on figures ratherthan emotion, is there room for a more direct,instinctive approach for leaders of accountancyfirms? King certainly seems to think so, and his longand highly successful career at EY speaks for itself.

33

The PQ Book ClubEVERY MONTH WE REVIEW THEBOOKS YOU SHOULD BE READING

HMRC: Her Majesty’s Roller Coasterby Daniel Dover and Tim Hindle(Profile Books, £7.99)The amount of tax people pay – or

don’t pay – hasbeen a politicalhot potato overthe past fewyears. In thisbook, Dover (aBDO partner) andHindle (businessauthor) explainwhat you – or aclient – shoulddo when subject

to an investigation. Like theHitchhiker’s Guide to the Galaxy, themantra here is ‘Don’t Panic!’ Thewriters pull no punches when theydescribe what a tough assignment itcan be to take on the taxman, butthey do so with warmth and wit, andthe relaxed prose style makes this avery easy read. And we loved thecartoons by the excellent Pugh,which litter the text. At the end is anappendix of ‘Our Top Ten Tips’, whichprovides a neat summary of thecontent – tip number 4 is emphaticin its advice: ‘Don’t lie to HMRC’. PQ rating: 5/5: A must-buy that tellsyou everything you need to know ifyou are facing a tax investigation

Dance with the Enemy by RobSinclair (Clink Street Publishing,

£7.99)Rob Sinclairstarted writing in2009 following apromise to hiswife, an avidreader, that hecould pen a ‘can’tput down’ thriller.His first novel‘Dance with the

Enemy’ lives up to that promise. Partof a trilogy of stories about enigmaticagent Carl Logan, we wondered howmuch was based on Sinclair himself!He has spent the past 12 yearsworking as an accountant specialisingin local and international fraud andcorruption investigations. Let’s hopehe doesn’t give too many of hisclient’s the Logan treatment.

This is a book for our time. Our‘hero’ is sent to Paris to track down aterrorist called Selim who haskidnapped the US Attorney General.But Logan is no 007; he is moreHarry Palmer, a bit more real. Youcare what happens to Logan eventhough he is very flawed.PQ rating: 4/5 This is gripping stuff,well written and great fun

Nine seconds to impressYou have created the perfect

CV – two pages long in Ariel fontand point size 11 – but then youdiscover employers spend justnine seconds on your work of art!A recent survey discovered thatbecause of the huge volume ofapplications for some vacanciesthe process has become

‘Tinderised’. For those not in theknow, Tinder is a dating apprenowned for the speed at whichusers scroll through to find theperfect profile!

Walk at work – not to itIf employees were allowed to

work while walking on a treadmillthey would be happier and

healthier than if they spent all daysitting at a desk. An IndianaUniversity study put peoplethrough four work tests – seated,standing, cycling and walking.They found that those working ata walking workstation had highersatisfaction and experienced lessboredom and stress than thosewho worked standing or sitting.

In brief

John Howarth, 28, is a senior accountant based in Darlington. He has a mastersdegree in experimental physics from the University of York. A qualified ACA, Johnrecently represented ICAEW and CAW at the One Young World Conference in Dublin

Life at Anderson Barrowcliff

What time does your alarmgo off on a working day? 7am– I’m not a morning person!What’s the first thing you dowhen you get to your desk?Make a cup of tea, check myemails and review my to-do list.What’s on your desk? A lot ofPost-it Notes, stationery, calculatorand my laptop.What’s the best thing aboutwhere you work? Working in atight-knit team and a great,supportive environment, with greatjob satisfaction.Where’s your favourite placeto go for lunch? A great littlecafé called Pier 22 near our office.What (or who) can you seewhen you sit at your desk? Audit department colleagues, afinancial advisor, the officemanager and managing partner.

Which websites are yourfavourites and why? The BBC’s– I’m a current affairs addict –and the webcomic XKCD for myinner geek.Which websites do you usefor work? AccountingWeb,ICAEW, Mercia, CharitiesCommission, LinkedIn.How many hours a week doyou spend in meetings? Fiveor six.What time do you leave theoffice? 5–5.30pm most days.How do you relax? I enjoysquash, reading, swimming and anight at the pub with friends.What’s your favourite tipple?A nice glass of single malt scotch.How often do you take workhome with you? If there’s animpending deadline I’ll take somehome, but not much more often

than a couple of times a month. Itry and keep evenings andweekends for relaxation andcareer development.What is your favourite TVshow? Game of Thrones.Summer or winter? Winter,particularly for skiing.Pub or club? Pub, much preferbeing able to hear people talk.Who is your hero? Socrates. Ican see the basis for the modernscientific method as well as a lotof modern skepticism in theSocratic method. If you had a time machine,where would you go? I’d love tovisit ancient Babylon, the Field ofthe Cloth of Gold or Carthage. If you hadn’t chosenaccountancy, where mightyou be right now? Working ingeneral management or science.

pq mar 15 p33_pq oct07-p31 09/02/2015 15:04 Page 31

www.walkerdendle.co.uk T: +44 (0)20 8408 9999 E: [email protected]

Financial Accountant

Global Manufacturing, Middlesex

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Switch to a brighter future!

034_PQ 0315_PQ 1209 000 05/02/2015 11:31 Page 7

RESULTS MATTERNOW MAKE THEM COUNT Congratulations, the wait is over and your results are here. Now’s the time to make the

most of your preparation and hard work and take the next step to achieve your career goals.

After a long hard year and with the exam season now behind you, now’s the perfect time to evolve

your career. Don’t leave it to chance by wishing for an opportunity to come along, talk to the experts.

Hays specialises in part and newly qualified recruitment, working with leading organisations to

ofer you access to a wide range of jobs across the UK. We currently have over 700 vacancies in

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Whatever your career aspiration may be, we can find you the most suitable jobs to advance your

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To find out about our latest roles, or discuss the opportunities we can ofer you,

contact Shahid Nawaz on 020 3465 0017 or email [email protected]

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© Copyright Hays Specialist Recruitment Limited 2015. 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-11481

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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 be received by Friday 13 March 2015. The main draw will take place on Monday 16 March 2015

TO ENTER THESE GIVEAWAYS EMAIL [email protected]

HIDE AND SEEKPQ magazine recently visited AIA’s HQ inNewcastle. We were waiting for ourmeeting to start when we came across a1995 novel by Eric Clarke, ‘Hide andSeek’. The hero of the book is MichaelKenyon. He’s ex-military, intelligence, policeman, accountant, company directorand failed husband. By page 122 Kenyonhas decided he needs to stop his brainrusting and to study accountancy with…the Association of InternationalAccountants. Back in the 1960s it wasthree exams and then, if successful, yougot the right to call yourself ‘InternationalAccountant (inc)’, and you could add theletters AAIA after your name. He checkedthe curriculum – accounts, company law,income tax, auditing – and the cost.Remember, this was the swinging Sixties!The first stage cost £16 16s. We find outlater that our hero studies 10 hours aweek for nearly two years and finallyreceives a buff envelope – success!

HOW NOT TO RECRUITSTUDENTS US prosecutors havealleged that a Floridacollege used exoticdancers asadmissions officers,falsified documentsand coached studentsto lie on financialforms so it couldfraudulently obtainmillions of dollars infederal money.

A BOYHOOD DREAMAccountants got a bad press recentlyover the funding of the award-winningfilm Boyhood. The film,started in 2002 andmade over 12 years,was financed by IFC, asmall New York-baseddistribution company.Each year it provided$200,000 to the formeroilrig worker RichardLinklater to producehis vision. IFC President JonathanSehring explained: “The finance guyswould kill me on it.” He had to fight theirneed to see an immediate return. Headmits he even argued that it wasn’t likehe was putting $5m on the balance sheetin one shot! But the accountants shouldfinally be happy as the film is set todeliver a fantastic return. It grossed$43m last year alone – but that is a longtime to wait for your bonus!

DOWN WITH THE KIDS Game Digital has risen like a phoenix from the ashes and, hatsoff to it for its annual report. It was released atthe tail-end of last year and well before it releaseda surprise profit warning. The ‘We are Gamers’report was a really well put together document.We loved the Board of Directors looking like theycame from the set of Grand Theft Auto. Itreminded us of our front cover from July 2008!

EAT SUSHI OFF ME!BBC 2 recently visited NeckerIsland, one of the world’s mostexclusive holiday destinations, sowe are told. During the TV showwe were introduced to head of

finance, Milly. She is one of half adozen accountants who look afterthe multi-million-pound businessand occasionally helps out on theisland itself. As she can countshe becomes a croupier onCasino nights – no problem there.

Then she was asked to come upwith a novel birthday treat for aguest and she came up with “eatsushi off someone”. Everyoneloved the idea but we are thentold she was the person they atetheir lunch off. How tacky is that!

TARDY YOUNGRecent analysis of who sends their taxreturns in on time discovered there are‘significant differences’ in the filingbehaviour between age ranges. The bestare those aged over 65, with just 155 outof every 10,000 people missing thedeadline. And the worst? It’s 18 to 20year olds of course – with 1,085 in every10,000 filing late. That is really high.Another interesting fact is that 219 out ofevery 10,000 accountants also file theirown accounts late – really!

AIA HAS THE POWER We have five power banks togiveaway this month, courtesyof the AIA. The portablechargers will make sure yourfavourite machine never runsout of juice and we are told onthe box it ‘applies to mostsmartphones’.

To enter this giveaway all we need is your name and address, emailed [email protected]. Head up your email ‘Power bank’ and we willdo the rest!

DON’T BEA MUG!This month we are giving you thechance to win a coveted ‘I Love PQ

mug’, along with an AATDLGroup Wyndoo and a First Intuition stickerbook. The Wyndoo is a bookmark/skim reader for students – it helpsyou remember it is debit left, credit right! We will even throw in someearplugs – the sort exam sitters will be given at Pearson Vue centres.To be in with a chance of winning prize send your name and addressto [email protected]. Head up you email ‘Wyndoo’

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ƞFBT Pass 1st Time Guarantee™ ensures that if you do not successfully pass your paper on the first sitting, you will be able to attend

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pq magazine, march 2015

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