June 2011 The piano has been drinking, not me

PQmagazine

EXAMGUIDANCEWe’ve got stacks ofadvice and top tips forCIMAs and ACCAs

Time to get processedMCASSPARTY ONManchester studentsget entertained by‘The King’ himself!

IN THIS EXAM SPECIAL ISSUE

contents PQ

News06£1,000 for books ACCA PQs’

bill for recommended reading08ICAEW changes New syllabus

on cards for institute’s studentsFeatures, etc10Exam Surgery More basic

maths tips, plus news from theworld of international standards

12Great courses giveaway Yesit’s true – we’re giving awayloads of free courses. Simply fillin our survey and you’ll be inwith the chance of winning one

14ACCA exam advice Stacks oftips and top advice on what tolook for in the next set of exams

16Time management You mayknow the syllabus backwardsbut if you can’t organise yourtime in the exam you will fail

18CIMA exams Guidelines tohelp you tackle the May exams

20Examiners’ conference PQwas in attendance when CIMA’sF4 and P1 examiners outlinedwhat they are looking for

22ACCA examiner’s plea Tutorsneed to be honest with PQsabout the amount of work theymust do to get a pass

23Getting a pass Handy hintsand tips from Page Personnel

24Recruiters in the spotlightWe asked you how you thoughtconsultants could improve theirservice – and your suggestionsgive them food for thought

25CIPFA TPC NSF chair JaneCika has some advice on how topass those final two papers

26CIMA examiners We knowwhat the F2, P1, P2 and P3examiners expect of PQs

28Practical tax HMRC is set toget tough with tax cheats

29VAT update HMRC in disputeover tax on take-aways

30Exam technique Know yourverbs – it’ll help you pass!

32Lease accounting All youneed to know; plus the MCASSannual dinner – with ‘Elvis’!

34Careers Life at RBS Insurance;and we focus on the jobs market

38Fun time A girl about town;and our great prize sudoku

The columnistsRobert Bruce Kill the clutter 6Prem Sikka The ‘Big Society’ can’twork without democracy 8

Subscribe to PQ MagazineIt’s FREE – go to page 23 or see

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Publisher’s statement:We have adigital issue of the magazine whichis sent to 12,772 requested readers

Living in a changing worldI was sitting on the Underground on the way to work recentlywhen the person sitting next to me got out his revision folderand began to look at regulatory frameworks. There was a section

on the CCAB with all the usual suspects, but I noticed that CIMA were stillon the list as a member. I gently leant over and did that thing that no onedoes on the Underground – spoke to a stranger. Luckily the student was aPQ reader and admitted he had seen the CIMA news somewhere. Ireminded him it was in PQ magazine!

We are still the place to keep up-to-date. Last month’s issue looked at theLords’ report on auditors and the ASB’s push for clear, uncluttered annualreports. And with the sad demise of the print edition of Accountancy Age,we are now the only independent accountancy magazine out there deliveredfree to your door. We have invested a lot of time and money intopqmagazine.com, but we also understand that there is something differentabout a magazine you can hold and feel. We Tweet and Facebook with thebest of them, but it is producing the magazine that helps focus on the realissues rather than just throwing out stuff that is forgotten in a week’s time.With the magazine you also get history. How we receive information isincreasingly being decided by the cost-cutters rather than adhering to thedemands of the customer. Similar things are happening in accountancyeducation, but that is for another issue of PQ. As proof of this, how manyPQs do you think opt for the magazine through their letterbox rather thanthe Emag to their inbox? Well, some 80% of you still want it by post!

We all know why the ACCA stopped sending ‘Student Accountant’ to its400,000 readers. It saved it a fortune and in truth it couldn’t guaranteedelivery in some parts of the world. But what it didn’t do is ask readers whatthey wanted. Now they have a fancy online magazine that takes ages todownload and many students wish for the old magazine, which was printedon the equivalent of toilet paper! That didn’t make it a bad magazine.

You may notice something missing this month. Our letters page is takinga month off so we can concentrate on you and the exams. But it will beback in July and we need you to tell us what is ‘rocking your world’. Justemail me at the usual address.

Graham Hambly, PQ magazine editor

CONTENTS June 2011

Register for FREE today

www.kaplanfinancial.co.uk/emergencyservice

Discussion Forums

available for each paper

Dedicated Live Online Webinars

to answer your exam questions

Answers from Expert Tutors to your questions throughout the day

Boost your confi dence through our FREE

Exam Emergency Service, our interactive online

forum that gives advice and support in the

run up to your exams.

Key features include: Live for ACCAfrom 9th – 25th

May

Worried about your ACCA exams?

8 PQ Magazine June 2011

Which stream?ACCA students who want to

be UK auditors must sit the UKstream of P2 and P7. So whileeveryone else is going‘international’ for these papersstudents have to think moreseriously about their careeroptions. PQ magazine has beentold that this has caused someconfusion as in the past it was acase of ‘any stream will do’.

AAT into AfricaThe AAT qualification is

beginning to have a big impact onthe African continent. Theassociation now has just under10,000 students studying inAfrica. Botswana tops the leaguewith 3,843 PQs, followed by SouthAfrica with 3,322. In Swazilandthere are another 1,482 trainees.

Win a free course!To celebrate our 100th issue

(last month) we’re giving away aload of free courses. Find out howyou can be in with a chance towin one turn to page 12.

In brief

PQ news

The ‘Big Society’ is a flagship policyfor our government. The key idea isto enable ordinary people to shapedecisions and institutions. However,government has avoided the ‘D’word – democracy. We aresurrounded by monopolies treatingorganisations as their privatefiefdoms. The top 500 transnationalcorporations controls 70% of theworldwide trade, 80% of foreigninvestments, 30% of global GDP.Just 20 corporations control thecoffee trade; three account for over80% of the global cocoa trade andsix of them hold 70% of wheattrade; one controls 98% of theproduction of packed tea. Tenglobal corporations control 55% ofthe trade in pharmaceuticals; 67%of the trade in seed and fertilisers;55% of the pharmaceutical trade;and 66% of the biotechnologyindustry. The world of accounting isnot too dissimilar, where just fourfirms dominate global auditing.

Transnational corporations wieldconsiderable power, but peoplehave no say in their affairs.Employees are hired and fired atwill. Directors can cast thousandsof votes at AGMs. Shareholderresolutions are not binding. Localcommunities can raze mountains,divert rivers and cut down forests towelcome companies, but thesecorporations owe no commitmentto any locality, product or people.

‘Big society’ will remain a sloganuntil steps are taken to democratisebig business.

PREMSIKKA

Big Societyis notpossiblewithoutdemocracy

■ Prem Sikka is professorof accountancy at theUniversity of Essex

Final touches are being put on thenew-look ACA qualification, whichwill go before the ICAEW Council inJuly. PQ can reveal that ‘flexibility’ isthe new driving force. Althoughthere appears to be continuingsupport for the training contract, theeducationalists at the ICAEW believethat it makes less sense to thoseentering the profession with lots ofpractical experience or who come toaccountancy late.

PQ was told that there are noplans to introduce options and thesix/three exam structure will remainunchanged. “People are very happywith it,” said an insider.

However, he wanted to stress theimportance of creating more flexibletraining routes. “We need toliberalise the qualification withoutreducing standards. There will beno dumbing down of standards,” hepromised.

ACA syllabusset to change

‘Retrograde’step by ACCALeading tutors are calling on theACCA to scrap its proposedchanges to F1, F2 and F3.

The changes, due to be broughtin for December 2011, represent aretrograde step, said one leadingtutor. He felt the new syllabuses,particularly for F2 and F3, look verysimilar to the old 1.1 and 1.2papers. These syllabuses werecriticised at the time for being toobroad. Our expert said that thechanges now proposed represent areturn to the bad old days, acolleague from a rival college wasquick to agree.

The problem is the new papershave to satisfy two qualifications –Foundations in Accountancy andthe ACCA professional course. Ourtutor believes the ACCA should lookagain at the decision as there needsto be different papers and differentsyllabuses for the two streams. FIApapers 5, 6 and 7 need to bedifferent from ACCA professionalpapers F1, F2 and F3, he ventured.

CIMA’s official study texts will infuture be produced jointly byElsevier, the official publisher ofCIMA learning and revisionmaterial, and Kaplan Publishing.

The two in partnership will now

publish the official study text, exampractice kits and revision cards,explained Elsevier’s Mike Cash. Hebelieves the deal will meanstudents are the ultimate winners.“They will get the best of Elsevierand Kaplan content, written bytutors with classroom experienceand reviewed by CIMA’s examiningfaculty,” he said.

The plan is to have certificatelevel texts ready by May, with theprofessional texts available by June.• Texts will cost around £35 each,with exam kits priced at £20 andrevision cards £10.

New publishing partnership

ThePQExamEMERGENCYSERVICELast-minute help is at hand,as Kaplan and PQ magazinejoin forces to provide exam

candidates with a direct lineto free expert advice.

Yes, CIMA and ACCA studentscan again get help when they

need it most, thanks to the ExamEmergency Service. The CIMA

Exam Emergency Service isalready up and running, but it is

not too late to get answers toyour exam-related questions.The service is also availableright up until Friday 27 May.

The ACCA EES will open for business on Friday 27 Mayand remain online until Tuesday 14 June.

To access the service go towww.kaplanfinancial.co.uk/emergency

There is also a lot more on offer from Kaplan. It is, forinstance, also running masterclasses for F9 for this sitting.Three free online masterclasses are now available online,designed to increase your chances of passing the exam.

Mike Cash, far right, with theKaplan and Elsevier teams

PQ exam surgery

PQ Magazine June 2011

Most of you will now be coming tothe end of your tuition courses andpondering about what to do next.The answer: question practice,question practice, questionpractice! It is very important tocement your knowledge bypractising questions and identifyingyour areas of weakness.

Most students have issues withtiming in the real exam so makesure you practise questions to time.Don’t just practice the numbers –the written sections can be worthjust as many marks.

‘Debriefing’ a question is asimportant as answering it. Onceyou have completed your attemptmake sure you read the modelanswer thoroughly. Then comparethis to your answer and giveyourself a mark. If there are anyknowledge gaps note them.

There will be occasions whereyou have missed the point of thequestion. When this happens don’tpanic. Go through the answer andtry to understand where you wentwrong, so if you see therequirement again you would feelconfident about knowing exactlyhow to go about answering it.Finally, try to rework the question afew days later to see how much youhave actually taken in.

Make sure you download pastexam papers and attempt themcloser to the exam, looking at theexaminer’s comments and markingguides to see how the marks areactually allocated.■ Mike Pennington is a

partner at First Intuition

EXAMCORNER

The leases project is coming to ahead now, so it is probably worth arevisit. After all, Sir David Tweediedid memorably refer to this projectas his proudest achievement asChairman of the InternationalAccounting Standards Board in thisvery magazine, writes Martin Jones.

Let’s say you rent ‘Satisfaction’from The

Rolling Stones. I am not sure howthat would work, but it is a lot moreinteresting than talking about a caror a building. The song ‘Satisfaction’has been around since 1965 andlooks like continuing to get airtimeforever. So let’s say you rent the rightto the song for the next three years,at a figure of £1 million per year.

How would that work undercurrent financial reporting? Well,the current rules on leases wouldclassify that deal as an operating

lease. This is because thecurrent rules would say that

once the song is givenback to The Rolling

Stones afterthree years,

it would still have years and yearsof life in it. So the current ruleswould say the asset is not ours andrequire we ignore the whole story;except for the cash flow, which wewould throw into operating costseach year.

But that is utter nonsense. Assoon as we sign the contract wehave an obligation to pay £3 millionover three years. And as soon aswe sign the contract we have therights to one of the greatest popsongs ever written.

So how would the proposals dealwith the contract? The proposalswould tell us to measure theobligation by using a discountedcash flow and use this figure torepresent the liability (obligation tothe outflow) and the asset (right to

the inflow from airtimerevenues). Cool, eh? As anadded bonus, the proposalsdispense with all that junkabout classifying a lease aseither operating or financing.All leases will be treated thesame, as leases.

Even cooler, right?• Martin Jones, LSBF

News from the ivory tower

10

Know your basic mathsRuth Jenkins’ article explores an everyday mathematical tool, percentages, and itsuses, in the second in our series on basic maths. So go on – test yourselfWhat is a percentage? It is a measureof relative size or proportion. Thereare six cakes and you eat three ofthem: you have eaten 3/6 or 50% ofthem. 50% means 50/100 or the rateof 50 per 100; as a fraction it’s 1/2.

Percentages help to compareresults. Which test result is best,39/60 or 15/21? Hard to tell asfractions go, but easy as percentages!Answer: (39 x 100)/60 = 65%,(15 x 100)/21 = 71%I buy a widget for $12 and I sell itfor $15, then the profit per widget is$3. Easy so far!The profit can be expressed eitheras a percentage of the cost price orthe selling price.

Profit as a percentage of cost iscalled mark-up.

So ($3 x 100)/$12 = 25%Profit as a percentage of sellingprice is called margin.

So ($3 x 100)/$15 = 20%The same profit just expressed

differently: $12 x 25% = $3; $15 x20% = $3.

Mark-up goes with cost (CUP),

margin goes with sales (SIN).When cost is the starting point let

cost = 100%. So sales are 125%(100% + 25%)

When sales are the starting pointlet sales = 100%. So cost is 80%(100% – 20%)

We are told that cost is $12 andprofit margin is 20%. Now calculatesales and profit. How?

Easy!Cost = 80%; so 100% is($12 x 100)/80 $15.Profit is $15 - $12 = $3

We are told that sales are $15and profit mark-up is 25%. Nowcalculate cost and profit.Sales = 125% namely (cost100% + 25%). So cost is($15 x 100)/125 or £12 and profitagain is $3.

When the VAT-inclusive price is$75 and the rate of VAT is 17.5%what is VAT and the VAT-exclusiveprice?

Answer is $11.17 and $63.83respectively.

Basic maths tips1. Percentage (%) = fraction x 1002. Mark-up is profit on cost (CUP)3. Margin is profit on sales (SIN)

That’s it!• Ruth Jenkins is a CAMS’ ACCATutor and Course Leader

Go to the study zone onPQ magazine’s website

16 PQ Magazine June 2011

PQ reading time

There are far too few people wholisten to Tom Waits but thosewho do will know that in his

song ‘Time’ he is not singing about thereading time allocated to studentstaking accountancy exams. Had he beendoing so, I would have had no hesitationin urging you to listen closely to thelyrics and receive his wisdom on thematter. As it is, Tom Waits has missed atrick and it’s my job to give a fewpointers for using those valuableminutes before the start of youranswering time; thanks Tom.

First of all, let’s be sure that we knowwhat this extra time is all about. Duringreading time, we are allowed to:• Open and read the question paper.• Mark, highlight or annotate thequestion paper.

We are not allowed to:• Use our calculators.• Write in our answer books.

What we really shouldn’t do is:• Sit with our arms folded, enjoying the‘read’ that has been given to us,perhaps highlighting words we like thelook of.

You should think of it as ‘planningtime’. It has to be approached activelyand, at the end of your 15 or 20minutes you ought to have identifiedwhere you are going to earn your first40 marks or more.

Read the requirementsEffective analysis of a question paperstarts with a thorough review of allquestion requirements. They willindicate the topic being tested and,using carefully selected verbs, give clearinstruction as to the level to which youare expected to prepare an answer. Theywill give you a strong clue as to whatdata you ought to look for in anyquestion scenario and will also help youto form a plan of attack; the order inwhich you will work through thequestions, getting most marks first. (Ifyour paper includes objective testing, Iwould advise you to ignore them untilthe end of the exam. Students attachdisproportionate importance to OTsections and overrun, eating away atvaluable mark earning time. Think of itas a 20-mark question like any other,where you would be content to earn

If you don’t get your time management right you couldend up on the wrong side of the road, says Peter Stewart

12-15 marks in 36 minutes.)Reading and highlighting the

questions is pointless. You have toconsider how you will use or manipulatethe data from the question to constructyour answer. This involves writing keypoints and figures in the margins sothat, when it comes to answering thatquestion, you do not have to huntthrough to find the critical information.

For example, if I’m doing a questioninvolving decision making I know thatmy easiest marks will come fromexplaining which costs, given in thequestion, are sunk costs, and which aredirectly incremental cash flows(requiring little, if any, working). Myquestion paper will, therefore, have inclear letters ‘SUNK’ and ‘DIRECT’written in the margin so that, comewriting time, I make notes about thosestraight away.

Likewise, if I’m doing a questioninvolving a group of companies, mymargin notes will have a clear diagraminterpreting the given group structure,again so that, when I’m allowed to usemy calculator, I can make instantheadway into the marks.

Examiners often complain about thepoor structure of students’ answers. Soduring planning time we can thinkabout how we will lay out the answers.In a question with an ‘explain’ or‘discuss’ requirement, I can brainstormbullet points I want to expand upon inmy answer; I can review them and

prioritise based on which ones are mostdirectly relevant to the requirement andI am best able to explain.

I can also use planning time tosketch the layout of cost statements oranalyses thinking about the easiest wayto display my workings. The chances arethat there will be a similarity toquestions I have practised before so Iwill double check that this question hasgiven me the same type of data withwhich to work.

If I have numerical questions thatrequire the use of formulae, theplanning time will be used to copy theappropriate formula onto the questionpage and to assign the values given tothe appropriate variables. Again, when Istart to answer that question, there willbe no delay and I will calmly earn goodmarks.

Above all, what you must make sureof is that your exam day is not the firsttime you give 15 or 20 minutes ofplanning time to an entire paper.Download past papers from the CIMA orACCA websites and take an hour foreach to go through a timed planningexercise and complete an answer foryour chosen first question.

In the end, I don’t think that TomWaits would be much help to you withexam study advice. After all, he oncewrote, “I don’t wanna have to learn tocount”, a concept which is unthinkableamong PQ accountants – isn’t it?• Peter Stewart lectures at LSBF

PQ• Broughtto you inassociationwith LSBF

18 PQ Magazine June 2011

PQ CIMA May guidance

PUTTING IT INCONTEXTE1

• The political, social and economic context –identifying and explaining factors that determineinternational competitive advantage.• Operations management – explaining howdevelopments in organisational structure andquality management have helped businessesgain a competitive advantage.• Information systems – identifying the benefitsof information systems and explaining the valueof structured system implementation.• Marketing – applying key concepts such as themarketing mix to a scenario that could include anot-for-profit dimension.• HR – explaining the value of HR planning,recruitment/selection and training when dealingwith any of the above changes.

E2• Approaches to strategy – comparing andcontrasting the formulation/different levels ofstrategy.• The competitive environment – analysing theenvironment or assessing the value/benefit of theanalysis (could be extended to includestakeholders).• Business ethics and corporate governance(including CSR) – importance to the companyand analysing potential issues arising within abusiness context.• Management and leadership – in relation tomanagement styles and the importance ofmanaging groups (likely to incorporate conflict ifexamined in Section B).• Project management – tools and skills in aproject management context, including projectrisks/management of cross functional teams.• Culture – the theory and the impact it has onorganisational success.

E3• Strategic choice – applying Johnson, Scholesand Whittingham’s Suitable, Acceptable, Feasiblemodel to the selection of strategic options.• Strategic marketing decisions – whether anorganisation should adopt a customer or productfocused approach to strategy applyingtechniques such as customer accountprofitability and direct product profitability.• Change management – possibly in the contextof changing the organisation’s approach tomarketing.• Environmental uncertainty – describing the

problems that uncertain environments present,and evaluating techniques such as scenarioplanning and game theory in dealing withuncertainty.

P1• Working capital management – the calculationof the cycle, the impact of decisions on thecycle, EOQ calculation, cash flow forecast andcompound interest calculation.• Operating statement reconciling budgeted toactual profits including fixed overhead variancesand possibly mix and yield calculations.• NPV including tax and inflation and/orincremental revenue and costs.• Sensitivity calculations and yield to maturityusing the IRR.• Expected values, joint probabilities and riskbased decisions.• Decision trees requiring both appropriateconstruction and evaluation.• Activity based costing calculations anddiscussion of benefits and drawbacks.• Benefits of budgeting techniques for discursivemarks.

P2• Relevant costing – in a short-term decisionmaking context.

• Value chain – discussion of how the use of thevalue chain can help drive profit in a givenbusiness.• Pricing – discussion of pricing policies for newproducts incorporating the product life cycle.• Activity based costing – extending to DPP,discussion in a retail environment.• Responsibility accounting – controllability andimpacts on motivation/performancemeasurement.• Performance evaluation – via financial and nonfinancial measures.• Transfer pricing – discussion of differingpolicies and their consequences.

P3• Importance of the audit committee in corporategovernance including the relationship betweeninternal and external audit.• Different types of interest rate risk andtechniques for managing them.• Strategic risks facing an organisation andrecommendations of control measures.• Focus on risks around HR and how these canbe mitigated.• Risks relating to IT projects, including supplierselection and how they can be mitigated.• Ways of managing general financial riskincluding value at risk.

What follows is not a list of traditional ‘tips’ that you should rely on being examined for lots of marks in theexam. Instead, they are the most important syllabus areas as identified by BPP’s subject specialists, set in acontext in which they may be seen in your May exam, and should only form the core of your revision studies!

PQ Magazine June 2011 19

CIMA May guidance PQ

F1• Deferred tax calculations and the regulatoryframework will almost certainly feature insections A and/or B.• It is important that candidates know definitionsfor general principles of tax (eg hypothecation,underlying tax and withholding tax) and canperform basic calculations (eg sales tax) as it islikely that there will be a number of taxationquestions in section A.• Leases are likely to appear in section B or as asub-requirement in section C. Candidates mustbe able to identify the type of lease and carry outthe calculations involved for finance leases.• Construction contracts are also likely to appearin section B.• Accounts preparation requiring a statement ofcomprehensive income and a statement offinancial position is likely in section C.• A consolidated statement of financial positionfeaturing a parent, subsidiary and an associate islikely as the other section C question.• It is likely that statement of cash flows will betested for 10–15 marks as either two or threesection B questions or as a sub-requirement insection C.• Both audit and ethics, although smaller topics,will almost certainly be tested for 3-4 markseach, either as standalone section A questions oras sub-requirements in section B or C.

F2SECTION A• Written question, eg convergence between US

GAAP and IFRS, operating and financial review,environmental reporting or human assetaccounting.• Short consolidated statement of comprehensiveincome, statement of financial position orextracts from group financial statements.• Recognition, measurement and/or classificationof financial instruments – either an adjustment ina groups question and whole/part of a questionin its own right requiring explanation ofaccounting treatment and/or calculations and/orjournals.• Pension accounting – numerical question withnotes to financial statements or written questionexplaining accounting treatment for definedbenefit pension and/or defined contributionscheme.• Share-based payment – part or whole of aquestion requiring explanation of accountingtreatment and/or calculations and/or journalentries.• Interpretation of accounts – interpretation ofpre-calculated ratios or written/numerical EPSquestion or limitations of financial analysis.• Inflation accounting/asset valuationexplanation/comparison between or advantagesand disadvantages of historic cost accounting,current cost accounting and current purchasingpower.SECTION B• Group financial statements, eg consolidatedstatement of financial position or consolidatedstatement of comprehensive income orconsolidated statement of cash flow with a

foreign subsidiary, complex group or change ingroup structure (disposal and/or piecemealacquisition).• An interpretation scenario including ratiocalculations, segment analysis or the effect onratios of changes in accounting treatment and/orlimitations of financial analysis.

F3• Formulation of financial strategy – produce aforecast to assess whether objectives will beachieved. Discussion areas could includeanalysing the appropriate dividend policy and theinter-relationships between dividend, financingand investment policies.• Financial management – analysis of a sourceof finance, including cost of capital calculations/discussion of gearing levels.• Business valuations & acquisitions – as well asthe standard valuation techniques, could alsocover post merger valuation and discussion ofpost merger value enhancement strategies.• Make sure that you are able to explain theefficient markets hypothesis – recent stockmarket volatility casts doubt on the ability ofstock markets to price securities in a rationalway.• Investment decisions and project control in thecontext of overseas investment appraisal.• Capital rationing could be examined along witha discussion of how to deal with capital rationingproblems.• Post auditing is a project managementtechnique that is regularly examined. PQ

20 PQ Magazine June 2011

PQ ACCA examiners’ conference

Looking over past papers, examiner DavidCampbell said he had been asked to telldelegates what was done well by P1

candidates, but in truth he felt it would be easierto talk about what was not done well! His paperpass rate is 50%, plus or minus 3%. Overall,Campbell feels that this is “quite good”.

His Q1 cases are often thinly disguised realcases, because he’s trying to make his exam asrelevant as possible. “These things reallyhappen,” he stressed. In 2009, question 1 wason internal control failures at a global bank.

He felt that question spotting by tutors wasoften well meaning but, ultimately, unhealthy. InDecember he went online to see what the tutorshad tipped and one had just one thing right.

Overall, Campbell felt people are happy withthe core corporate governance themes. There isalso little evidence of PQs struggling for time.Most candidates also organise the material well.

Students now have seven live diets and onepilot to look at. You should be working all thesepast papers, said Campbell.

Candidates should also rehearse the use ofcommon P1 verbs and question types – wordslike ‘evaluate’, ‘construct’ and ‘assess’. He alsosuggested that students read each question andthe case itself. In P1 you get marks for analysingthe case.

It is vital PQs study real-life situations(FT/BBC) in which governance, risk and ethics

Lessons fromthe real worldGovernance, risk and ethics examiner David Campbell explains what hewants from P1 candidates – and he wants more than he’s getting now!

are prominent as part of placing the mainthemes into context. Reading Chris McDonald’sblog was one suggestion here.

Campbell pointed out that P1 has to remainrelevant; it is an important paper, more so nowthat the prophets (should that read profit?) ofdoom have been proved right.

The new name also reflects the newimportance of risk. That new content includesthe dynamic nature of risk assessment,management’s response to changing riskassessment and risk appetite. There is alsoALARP, risk and subjective risk perception andacceptable levels of risk.

Finally, candidates were reminded they should

take their calculators into the exam hall. “I mightuse numbers in an exam to explore analysis inthis paper,” he said.

P1 examiner David Campbell has been theexaminer since the paper’s inception inDecember 2007. A senior lecturer inaccounting at Newcastle University BusinessSchool, he has been an academic since1992. He teaches corporate governance,business ethics and research methods toboth undergraduates and post graduates.

PQ

THINGS NOT DONE WELL IN P1June 09Q1 Candidates had question-spotted that Kohlberg wouldn’t come up in this paper.Q2 Ethical reasoning not done well at all.Q3 Criticise the chairman’s performance – that’s what I wanted but didn’t get it.

December 09Q1 NEDs – information on controls and risks/quality of information.Q2 Role of chairman – I wanted them to tell me the chairman had misunderstood his

role.Q3 Criticise ethical behaviour – answers too descriptive. I don’t want people

describing the theory.

June 10Q1 Voluntary/involuntary stakeholders.Q2 Voluntary reduction in pension value. This question shows the value of reading the

FT and discussing stuff in class.Q4 On ‘happy and healthy’ – most parts done badly. Son stole money from parents.

December 10Q1 Sound corporate governance.Q2 (b) Despite a technical article in 2009.Q3 (c) On best practice corporate governance report.Q4 (d) on SR and the voluntary supplier payment policy.

THINGS DONE WELL IN P1June 09Q1 Global bank – internal failures on agency theory.Q3 Director leaving package.Q4 Roles of risk manager.

December 09Q1 Mary Jane – shipping accident – AAA&-step model

on internal control failures.Q2 Director’s induction programme.Q3 Integrity.Q4 Risk embeddedness.

June 10Q1 Nuclear complex (Sellafield) – on agency/social and

environmental footprint.Q2 Remuneration committee.Q3 Internal audit testing.

December 10Q1 Institutional investors.Q2 Strategic and operational risk.Q3 Conflict of interest.Q4 Liquidity risk.

F4 examiner David Kelly knowswhat he wants – do you? PQmagazine was at the examiners’conference to hear what Kellyhad to say about his corporateand business law paper

There are some remarkably good examcandidates sitting the corporate andbusiness law paper, the F4 examiner

was happy to tell conference. That said, thereare lots of not-so-good candidates too.

PQs simply have to have a wider knowledge,he stressed. Kelly also wondered why studentsdon’t use their general business knowledge andrelate this to legal issues. The examiner thengave his analysis of the past four sittings.

Looking back at June 2009, he said therewere two contract questions in the sevenknowledge-based questions. Tort was alsothere, as was a disguised company law and anemployment law question. For some reasoncandidates do well on employment law, saidKelly. “They seem to be able to get their headsaround this topic.”

In December 2009, students provided betteranswers to the statutory interpretation question.However, answers on the English law systemwere “disastrous”. There were two contractquestions on postal rules. Now this might be onits last legs, but it is on the syllabus, he

“Questions on internal control failures at aglobal bank? Do they mean me?” Yes, Sir FredGoodwin, ex-RBS cheif, they surely do!

PQ Magazine June 2011 21

ACCA examiners’ conference PQ

stressed. “I thought I would give them a treat,”he explained. There were also questions onlimited liability and type of companies, and theexaminer felt it was still remarkable the numberof candidates who don’t do well. Q6 was oncompulsory winding up and administration. Theexaminer was worried about this question as itwas the first time he had examined this topic. Byand large candidates knew the answer – whichpleased him.

June last year saw the best exam performancein some years – more than 50% passed – and

the examiner thought he was sailing into calmwaters. He had asked a question on theSupreme Court, contract law and tort. This wasthe first time knowledge of the 2006 CompaniesAct was needed and students seemed to knowthe act. Debentures and charges andemployment contract made up the other topics.

Then along came December 2010 and thepass rate dipped again, to 41%. “I am hopingthis is a blip,” said Kelly. So are students! Sittersdealt well with the English legal system question,directors’ duties and employment question.However, the three analysis questions were allpoorly done. Tort was a disaster. The question oncompany register and accounts was anotherproblem area. Why, asked Kelly, didn’tcandidates use any cross knowledge? They mustknow about company accounts, he said.

Kelly was in no doubt that the students who dowell in the exams are a product of goodteaching. Scripts show who has been to a goodprovider, he revealed. The syllabus is wide: “Weall know that,” he said, but the simple fact is thatstudents need to learn it.

For future exams the focus will remain as it is,said Kelly. There are no planned changes in the

Kelly’s heroes

KELLY’S TOP TIPS1) You can’t question spot to cut down whatyou need to learn.2) Read the question. Students too readilywant to force the answer on to the page.3) Practice past questions. But that doesn’tmean you learn the previous question andput it into the next exam paper. “We get lastJune’s answer every December,” he said.4) Analyse the question the examiner isasking. This gets more marks thanregurgitating parts of the syllabus.5) Think across the syllabus.

structure. He stressed that while there isnothing specifically new, PQs had to rememberthe law is always changing.

Kelly pleaded with candidates not to go intothe exam hall with the answer and look for thequestion to fit it. He felt question spotting wasgetting worse. Maybe this was down to timepressure, but students don’t just spot thequestion, they are letting certain words triggertheir answer.

He was worried that employers might becutting down the days students spend atcollege and this could adversely affect passrates even further.

David Kelly has been the F4 examiner for12 years, and before that he marked thispaper; he has over 25 years’ experience inthe sphere. His expertise is company law,business law and the English legal system.A former principal lecturer at theUniversity of Staffordshire, he now worksas an academic consultant and writer. Apublished author, he is best known for hisbook, English Legal System.

PQ

22 PQ Magazine June 2011

PQ ACCA examiners’ conference

Graham Holt, the P2 examiner,started his discussion of hispaper by explaining the pass

rates for P1 to P3 are all very similar. Hefelt students had good basic knowledgeof IFRS and were sound on the writtenaspects of topical issues (mostly).Computations relating to cash flows andcalculation of goodwill under the newIFRS 3 were also “what students dowell”. In the exam hall, time managementdoesn’t seem a big issue, either.

Looking at last December’s exam, Holtsaid he was “pleased with the wholeprocess”. Many students showed a verygood basic knowledge of accountingstandards. However, candidates’problems with the discursive elements inthe paper remains. The cash flowstatements question was well answeredand topical issues satisfactorily. All in allthis led to a pleasing pass rate for hisCorporate Reporting paper, said Holt.

What was not done well? Holt had a list:• Not answering the question.• Not answering all parts of the question.

Don’t leave it late!• Not using the scenario.• Poor layout and time management.• Application of knowledge.• Understanding of key principles.

He also has a list for areas ofimprovement:• Deeper understanding of IFRSs.• Application of knowledge.• Deeper understanding of principles.• Better preparation for exam.• Management of stress.• Not enough revision undertaken –poorly planned and too late.• Reliance solely on lecture notes andlecturer.• Poor essay techniques.• Not taking responsibility for your ownsuccess.

Holt told the lecturers present that theymust ensure students do not just auditthe answers. He wants them to actuallysit the questions under exam conditions.Tutors also have to impress on studentsthe degree of work involved. PQs have towiden their knowledge base, and hebelieves question-spotting, and revising

only a small number of topics just doesnot work.

So what is new? Although it won’t betested for the next two diets IFRS 9 willbe in the syllabus come 2012. However,the examiner stressed that even then hewon’t be setting complex questions onthe standard to start with.

Holt revealed that IFRS for SMEs maybe a part of a question. Then there’sreorganisation – both internal andexternal. Finally, he turned to IFRS 3 andits application and effect on the otherstandards.

Students should note that theintroduction of reorganisations may leadto a little more group accounting.

Graham Holt was a PQ at PriceWaterhouse (now PwC) afterobtaining a BCom at LiverpoolUniversity and MA Econ atManchester University. He left PW asthe training manager and joinedMMUBS, where he is now executivehead of accounting and finance.

PQ

Examiner Graham Holt believes that it’s time to start being honest with students about the amount of workneeded to pass P2. You don’t get something for nothing – especially when it comes to accountancy exams

No maths formaths’ sakeThe P4 examiner Shishir Maldeexplains where his paper is going.Go to our website for the fullversion of this article

Examiner Shishir Malde started off bygiving his top tips for success in P4.

Firstly, candidates have to adopt a systematicapproach. Answering all the parts of thequestion fully will help, as will having anorganised approach and good answerstructure. Good students also have good timemanagement, he stressed.

Looking at past papers, Malde revealed thatwholly written questions were generally welldone, achieving 55%–65% of their markshere.

He then turned to the things studentsaren’t good at. Unfortunately, many have anover reliance on past papers and intensivestudy programmes. “Students must studyaround the subjects. Four or five days in aclassroom is not enough to get you throughthe exam,” the examiner said.

Malde was also concerned about the basicerrors candidates make in…

A time toreflectThe F9 examiner explains that topass this paper students need tolearn how to reflect. Go to ourwebsite for the full version

Antony Head, the examiner for F9Financial management, was concerned

that too many students try to pass his paperon calculations alone. “You can’t get throughjust on the numbers,” he said.

Head, who has a marking team of 58, saidmany students also suffer from exam inertia –they love to take an answer from one examand put it in the next one. He said: “Eachexamination consists of new questions – mycontract says they have to be unique.”

Why, he asked, do students have so muchdifficulty in business finance? With long-termfinancing in each of the last four exams hewas hoping they would start to get better at it– but they aren’t.

The Past Examiner’s Reports are a key freeresource. They take Head ages to write anddissect each question. He stressed thatcandidates must study the whole syllabussection by section. You must also…

Go to the study zone on our website Go to the study zone on our website

A standardapproachExaminer Steve Scott explains howyou can improve your chances ofpassing F7. Go to our website forthe full version of this article

The Financial Reporting paper pass rateswere in a downward spiral until

December 2010, explained F7 examinerSteve Scott. The June pass rates are alsogenerally two or three percentage points lowerthan those achieved in December. Scottrevealed that candidates on their first attempthave the highest success rate and thosesitting at the third or more attempt have verylow pass rates – at some diets thesecandidates barely get into double figures, herevealed.

Now the December 2010 results weregenuinely better. Consolidated accounts (Q1)is still the best answered question, but beforeDecember the average mark was decliningslightly (by two marks). Students do well onthe techniques, he said, aided by tutors’standard workings.

Candidates score well on Q2 (financialstatements), although few gain…

Go to the study zone on our website

The fullversions ofthe articlesbelow areavailable onour website

CIMA exams PQ

TECHNIQUE ISEVERYTHINGquestions ahead of the exams as you can inorder to familiarise yourself with the territory, thiswill help you to recognise where you need tofocus your studies.• Manage your time The exams consist of a lotof written work, so try to get a thoroughunderstanding of how much time you shouldallow for an average question. One minute foreach mark the question is worth is a good rough

guide. Time yourself and aim to answer onepractice exam question in one hour.

• Use downtime when you can We allhave downtime, whether on publictransport or during work, when we canlook over and create study notes. Takeyour study notes to work with you so

you can take advantage of anyunexpected quiet periods.

• Look for support Try to get yourcompany or employer behind you.

They should besupportive as you

work towardsbetterment andwill hopefully bepleased torecognise your

efforts. Many of your employers will also havegone through the CIMA exams, so make sureyou make good use of their experience.• Plan for success Set yourself targets of whenyou need to finish studying for each exam andthen focus on practice exam questions.Remember to be realistic and allow yourselfenough time for breaks. You should also ensureyou have secured sufficient time off work to sityour exams.• Use your experience Relate your answers toreal-life situations wherever possible. Don’t beafraid to draw on your current and previous jobsin order to provide relevant examples to back upyour arguments.• Give CIMA your all The timeframe forcompleting all ten CIMA exams is relatively tightso be prepared to sacrifice weekends and daysoff to exam preparation.

Remember, Page Personnel Finance is here tohelp you take the next step in your careerwhatever your results. Visit our website atwww.pagepersonnel.co.uk for more informationand the latest roles. PQ

We at Page Personnel work closelywith CIMA candidates at all levels. Infact, many of our consultants have a

background in finance, so with exams looming,we understand that this will be a stressful timefor many of you. Like any professionallyrecognised qualification, CIMA exams require areasonable amount of technical preparation inorder to understand and answer the questionsset. However, it’s often your exam technique(how you cope with the pressure and manageyour time during the exam) that makes thedifference between pass and fail.

Here are some key pointers to assist with yourexam technique:• Rehearse the questions Do as many practice

• Thanks to PagePersonnel forthis article

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PQmagazineFor career accountants who want a magazine that is truly independent

24 PQ Magazine June 2011

PQ recruitment survey

Arecent PQ magazine surveydiscovered that over half of youare definitely going to look for a

new job in the next six months. Anotherone in five were thinking about it.

Now our readers understand how themarket works, and 90% of ourrespondents said they would be using aconsultant when looking for their newrole. However, there does appear to bean expectations gap between therecruiters and PQs. Top consultantsHowett Thorpe told us that they wantedto know how they can improve theirservices to trainee accountants, so weemailed our readers.

You responded by saying thatcommunication was the key. You alsowant consultants to spend timeunderstanding what you want. Anotherproblematic area is the timing of phonecalls. If you are working you do find itdifficult to talk openly when sat next tothe boss!

Many readers had specific ideas toimprove the relationship between theconsultant and student. Here are some ofthe responses that reflect your concerns:• “Take time to find out about me as anindividual – do I want to work for a multi-national company where there are strictcorporate policies and procedures, or willI be better suited to a small business withpersonality and a bit of flexibility to workyour own style?”

WHAT PQsWANT

• “Recruitment consultants should neverlose sight that they are dealing withunique individuals and not innate objects.I was a commodity sold and barteredwith, unsuccessfully.”

• “The worse thing about recruitmentconsultants is when they ignore yourmessages and phone calls – especiallywhen you are waiting for impendingnews! They shouldn’t hide behindreceptionists.”• “Recruitment consultants should behonest. The current trend with recruitersis initial contact in regards to a role, yousend your CV off – and then you neverspeak again. Calls will go unreturned,emails not replied to, and you are leftfeeling uncomfortable.”• “The most important part of the serviceis to neatly package our skills and bestqualities. If our CV is missing skills orexperience or they have had negativefeedback from interviews we are betteroff knowing.”• “They should ask PQs like me for anhonest self-appraisal of our strengths andweaknesses and discuss the differentniche areas of accountancy with us.”

One PQ even put togethera four-point plan for recruitersLISTEN Understand the expectationsand aspirations of the candidate. This willsave wasted consultancy/interview time.BE HONEST Don’t offer the world whenonly the UK is possible. Don’t makepromises that sound empty. “With yourqualifications and experience we’ll haveno problem finding you a job”. How manytimes have I heard that remark?OFFER ADVICE Be constructive in termsof what could/should be done while still aPQ. Additional reading/training/contactpoints.KEEP IN TOUCH Maintain regularcontact and feedback but don’t sound asthough you are ticking a box. PQ

What do you want from recruitment consultants? Here’s what our readers say

Adam Pearce, head of Part and Newly Qualifiedrecruitment at Howett Thorpe, writes...The response to this survey is interesting andhighlights two recurring areas for improvement.

Firstly, it is obvious that proper understandingof a candidate’s specific needs is critical. Thishas more to do with the environment thecandidate is looking for than with matchingspecific skills to a job specification.

Clearly it is important to assess an individual’sknowledge and expertise, as well as any areas fordevelopment, although of equal if not moreimportance is an understanding of a candidate’spreferences including type of business andculture. It is vitally important, therefore, to listento requirements, set realistic expectations andtreat candidates as individuals.

Secondly, communication is an area agenciesneed to improve upon. Candidates should expecta level of care from a consultant, including thereturning of calls and emails. In depth, honestfeedback from interviews should be provided,good and bad, towards the development ofinterview skills and to help with preparation forthe ongoing interview process.

At Howett Thorpe we have a team of highly

experienced consultants, all of whom have overfive years’ service within our business and westrive to exceed our candidates’ expectations interms of service levels. By doing the basicscorrectly long-term relationships can be forgedbetween consultant and candidate, and we prideourselves on the candidate network we havedeveloped. However, we acknowledge there arealways areas we can improve on. There has beena dramatic increase in candidate registrationsover the past two years owing to the downturn inthe market and it is all too easy to let standardsof service drop. As an industry we need toremind ourselves that our survival depends oncandidates wanting to use our services and sothe process must be a positive one.

The professional’s view

Pearce: long-termrelationships can be formed

PQ Magazine June 2011 25

CIPFA TPC PQ

Strategic BusinessManagement Paper

1Try not to panic. In terms of SBM theamount of research you have to do can be

overwhelming, but try to work in study groups. Atcollege, the lecturer suggested that we shouldwrite our names and email addresses on a sheetof A4 that then got copied and handed out so wecould communicate easily. It started off with oneperson sending a ‘where on earth do we start’email after our miserable progress test results,then we set up a Google group for the SBMclass. This had numerous discussion threads.

2Share every article you find on the Googlegroup. Don’t do what our group did and

share the work; we agreed that a week beforethe exam we would share our research. Instead,post the link to any article you have found; thiswill encourage others to do the same and youshould have access to far more articles than youwould have found on your own.

3Read the textbook. This may not beeveryone’s cup of tea but I took a week to

read that thing and some of the examples werereally easy to remember, and made memorisingthe theory a lot easier. Sometimes the textbookrepeats itself. Don’t skim over this, it’s tohammer home an important point or issue. Makesure you thoroughly understand it and don’t justthink it is a waste of your study time.

4Practice the A4 sheet well in advance of theexam. Don’t leave it until the morning of the

exams to print off your one and only copy of thesheet, because you just know you’re printer willbreak down. Have a few iterations of your sheet.As you get to know your articles and the syllabusbetter you will be able to increase the amount ofmaterial (while remaining legible).

5Attack it from a number of different angles.When doing your research you need to

ensure you have covered all the angles. Onceyou have got the Pre-seen material and know thefocus of the exam, you could break down the

NSF chair Jane Cika provides hintsand advice to fellow students onhow to pass those final two papers

All in thistogether

9PJI: Point, Justify, Illustrate. In your answersmake sure you make a point, justify it and

illustrate it with an example and article if youcan. Then make the next point, justify it andillustrate it. Then make the next point, justify itand illustrate it…

10Understand the marking scheme. Onceyou know the way the paper will be

marked, namely on the number of points made,you will know what to provide in your answers.

Finance & ManagementCase Study

1Practise, practise, practise – whatever you’renot comfortable with. I was happy with the

calculation side of things (make sure you havegone back and memorised those formulas anddone a few examples) so I concentrated onreport writing. Some people feel the opposite –whatever you feel you’re not comfortable doingunder pressure that’s what you’ll need to practise(sorry, stating the obvious I know).

2Split you time up. When I got into the examI would look at the mark allocation for

questions 2, 3 and 4 and pro rata the exam timeper question. In the morning, I would spend anhour reading the materials and then theremainder of the morning was split between 2, 3and 4 for calculations only. Once I came back inthe afternoon I would again have split the timeup between the questions, leaving a 30-minuteslot at the end for finishing off longer parts ofquestions. I would start off writing the reports orbriefing notes and would make assumptions ifnecessary under the time restrictions.

3Remember that if you’re writing a report tothe Director of Finance the difference

between overspending by £11,623,978.67 and£12m will not change the decision to cease aprogramme or stop funding a project.

4When reading the Pre-seen look at thedifferent data you’re given and try to find

ways to interpret the data with the formulas youhave learnt in your studies.

5Don’t underestimate question 4 – it’s veryeasy to get carried away doing the lengthy

questions 2 and 3. Don’t forget you have to scoreat least 15% in all questions or you will fail. Settime restrictions for all questions and stick to itas mentioned above.

6Sort the information given to you. In theexam, when you read the pack of materials

you are given you need to have a method ofhighlighting which parts of the materials relate towhich of the four questions. Different peopledevelop their favourite methods for this. Somepeople take out the staple and put the pages intoa pile for each of the questions; all very well untilyou find a page which has some information forQ2, Q3 and Q4, and possibly Q1. Some peopleuse coloured highlighters – all very well untilunder exam pressure you use the wrong colourhighlighter! I ended up using Post-It tabs – allpages are kept together and you can flickbetween them easily, and if you initially thought aparagraph related to question 4 but you changeyour mind then you can change the tab and stillread the information.

7Read a couple of reports at work. If you’renot in a job where you write these

frequently, get hold of a couple of high-level onesand become familiar with the writing style. PQ

Pre-seen into paragraphs and ensure you havean article for each paragraph; then you could doa mind map around the topic and find articlesrelating to each item on your map. Make sureyou don’t forget the smaller parts of the publicsector; if you can find an article related to thetopic add it to your research.

6See if you can find someone who knows thePre-seen topic well to talk to, as they may

give you a new angle to research.

7Don’t realise at 6am on the day of the examthat the exam starts at 10am and not 2pm

as you had assumed! Still can’t believe I did this.

8Book plenty of annual leave – even duringclosedown. Negotiate early and try to get as

much as you think you need – don’tunderestimate the amount of work required forthese exams. Your manager may tell you thatthey can’t do without you in this period but solong as you organise yourself well and ensureyou meet all your deadlines they shouldunderstand that you’re requiring their supportfor, fingers crossed, the last set of exams.

26 PQ Magazine June 2011

PQ CIMA examiners’ conference

The F2 examiner looks at theverbs and explains what needsto be done better

Examiner Luisa Robertson spent a lot oftime on her discussion of F2 FinancialManagement talking verbs. She went

through the various sections and pointed outwhat type of verbs students will see in herexam papers. For section A, candidates canexpect level 2 ‘explain’ and level 3 verbs‘prepare’, ‘demonstrate’ and ‘apply’. Forsection B, she will use level 4 ‘discuss’. Insection C, expect to see ‘explain’ again andlevel 4 verbs ‘produce’, ‘analyse’ and ‘discuss’.There might also be ‘evaluate’ from level 5.Finally, for section D you will need to ‘explain’and ‘discuss’.

With this in mind Robertson said it wastutors’ responsibility to equip students to beable to handle the level of verbs thrown atthem in the exam.

The use of language has an impact on howthese areas are tested. For example, she saidfor financial instruments candidates will haveto articulate accounting treatment, althoughthey are often given the numbers to helpillustrate the dilemma.

FINANCIAL MANAGMENT:MINDYOUR LANGUAGE

Robertson then went on to identify theproblems in the various sections. Here is whatshe saw as the areas that need improving – thenearest you will get to tips from the examiner:Section A – consolidation• NCI % x total group profit.• Preparing full income statement for associate.• Proportionately consolidating subsidiary.• Intra-group transactions – associate/sub/parent.• Preparing workings not required for question.Section B – complex transactions• Generally ‘explain’ poorly answered.• Pensions: no understanding of how reflectedin SOCI and SOFP.• Financial instruments: OMG!Section C – financial analysis• Improved but relevance still an issue.• Not reading the scenario.• Ratios for 8 marks.• Weighting: not prepared for 10 marker.Section D – developments• Standard answers being prepared.• Not being specific to required section.

Robertson felt there was no evidence of timepressure in the exam papers. She felt thatSection B (complex transactions) was an areawhere tutors can really add value, helpingstudents learn the five main technical topics

SYLLABUS WEIGHTINGS• Group financial statements – 35%• Issues in recognition and measurement –20%• Analysis and interpretation of financialaccounts – 35%• Developments in external reporting – 10%

LEARNING OBJECTIVESSection A• Prepare full set of group financialstatements.• Explain the principles of accounting forforeign exchange and capital schemes.Section B• Discuss accounting principles and relevanceto accounting issues of contemporary interest:

- Financial instruments.- Pensions.- Share-based payments.- Substance over form.- Valuation methods.

Section C• Produce a ratio analysis from financialstatements and supporting information.• Evaluate performance and position.Section D• Discuss contemporary developments infinancial and non-financial reporting.

WORDSCOUNTTOO!You can’t pass P1 by numbers, explains the examiner.Here’s why you need to be prepared to get writing

From the outset, P1examiner Mira Stevenemphasised that any of

the learning outcomes can beexamined in any section of thepaper. Material included in thesyllabus for any of the paperswithin the CIMA Certificate inBusiness Accounting Qualificationcan also be assessed in theoperational level of the syllabus.

Some 60% of the P1 syllabus isnew – from P2 and P7. Thismakes it a wide-ranging syllabus.Added to this is the fact that100% of the questions arecompulsory.

Steven said candidates have inthe past found managementaccounting ‘more difficult’. Thereis a clear balance of discursiveand computational marks. Thenumbers will range from 65% to70%. The rest is words.

Pass rates for the last threesittings have been 46%, 53% and52% in the UK and she admitsshe is disappointed in the rates.Her key concern is the poorperformance in key areas.

She is curious to know why somany candidates do not attempt

the discursive parts of the 25-markquestions. There is no evidence tosuggest that this was due to a lackof time, so she puts it down to poorbasic exam technique.

Steven wants to see better layoutof computational answers.

When is comes to the words bitof the paper, many sitters answer adifferent question. They also makegeneral rather than specific pointsshowing their lack of knowledge.Others are just not applying thecorrect verb.

The examiner then listed her‘areas for improvement’; here aresome from the 2010 exams:• Calculation of mix/yield varianceand planning/operational variance.

• Dealing with batch level costs(ABC).• Relevant/irrelevant costs.• Working capital.• Decision trees.• Regret tables.• Value of prefect information.• Calculation of market value andyield to maturity of bonds.• Working capital ratios.

On top of these are theunderstanding of verbs, a lack ofunderstanding of theoretical aspectsand poor answer layout.

Finally, she stressed it was vitalthat PQs don’t rely on passing theP1 exam based on computationalquestions alone. It won’t work, shepromised.

SYLLABUS WEIGHTINGS• Cost accounting systems – 30%• Project appraisal – 25%• Managing short-term finance –20%• Dealing with uncertainty inanalysis – 15%• Budgeting techniques – 10%

ASSESSMENT STRATEGYSection A (20 marks) – A varietyof compulsory OT questions, eachworth between two and fourmarks. Mini-scenarios may begiven, to which a group ofquestions relate.Section B (30 marks) – Sixcompulsory short answerquestions, each worth five marks.A short scenario may be given, towhich some or all questions relate.There is a mix of discursive andcalculation questions in thissection.Section C (50 marks) – One ortwo compulsory questions. Shortscenarios may be given, to whichquestions relate. There arenormally two 25-markers and theexaminer said she has nointention to include a 50-markquestion.

PQ Magazine June 2011 27

CIMA examiners’ conference PQ

THE EYES ANDEARS HAVE IT

The P2 examiner said it’s time you came to your senses and used your eyes and ears

Performance Management – P2 –continues the analytical theme of P1,said examiner Colin Wilks. He felt the

paper should help PQs “apply information inthe management processes of decision makingand control to optimise performance”.

Section A and B deal with the keycontributors to operational performance –revenue (decisions of what to produce at whatprice) and costs (how to manage them tomaximise profitability).

Sections C and D look at the role of controlin monitoring and improving performance,dealing with budgeting and principles andpractices in the use of responsibility centres.

The paper’s assessment is split evenlybetween section A and section B, both worth50 marks each.

Section A consists of five compulsorymedium answer questions, each worth 10marks. Short scenarios may be given here, to

which some or all questions relate. For section Bstudents can expect one or two compulsoryquestions. Again, short scenarios may be given,to which questions relate.

Wilks said what lets candidates down in theexam hall is poor knowledge of basic conceptsand poor calculations. He is also concerned thatPQs can’t see the bigger picture and how topicslink together in the larger questions.

When it comes to marking, he said marks areawarded for the correct calculations andapproach. Typically, it means half to two marksper valid point and markers use the ‘own figure’rule.

He pointed out that verb levels also go up inP2, so rather than explanation he is expecting adiscussion. He advised all CIMA PQs to read theDavid Harris article on Verb Hierarchy. It might benine pages long, but after you have read it youwill be in no doubt about what is being asked.

One thing students don’t seem to do is

practise questions, Wilks ventured. Sometimesit seems the first time they have sat one of hisquestions is in the exam hall. “Why aren’t theypractising?” he asked.

Wilks pointed out that managementaccounting is not as black and white asfinancial management. That means candidatesbiggest assets are their eyes and ears. Why is itcheaper to travel on the trains after 9.30am?Why would someone pay $12bn for Twitter?

His final parting piece of advice is to pay fora revision programme. That is, of course, if youare serious about passing.

SYLLABUS WEIGHTINGSA. Pricing and product decisions – 30%B. Cost planning & analysis for competitiveadvantage – 30%C. Budgeting and management control – 20%D. Control & performance measurement ofresponsibility centres – 20%

CALCULATINGSUCCESSMargaret Stewart explains how to manage the P3 syllabus – and get that pass

Understanding how theexaminer ticks when itcomes to management of

financial risk (MFR) is vital togetting a pass at P3. Theexaminer is Margaret Stewart andshe said MFR will always be in Q1and another question. Generallyspeaking, however, she was happywith what students were doing inthe exam hall – in November2010 candidates who did Q4 wereexcellent at the small calculationsand scored high marks. “Keep itup,” she said. Her only word ofwarning was for students to learnthose calculations.

The performance of studentswhen it comes to risk and internal

control can be more variable. Theyare good at the various models andcategories of risk but their answerslack structure, and Stewart pleadedwith candidates not to answerquestions that ask for a discussionwith bullet points.

Answers to the review and auditcontrol part of the syllabus can beweak and students have to thinkabout what the aims of an audit arehere. Knowledge of the interactionbetween internal and external auditis poor, as is the planning of varioustypes of audit based on scenarios.

A particularly weak area for manyPQs is the risk and control in IS.She didn’t even want to talk abouthow badly students did with

November 2010’s Q2b. What shewants is candidates to concentrateon issues that affect IS, not manualsystems.

When it comes to the smallestpart of the syllabus, managementcontrol systems, Stewart felt therewere no particular problems.

She then reiterated theimportance of management offinancial risk. “It is difficult to passthe exam if you are weak in thisarea,” she said. The risk here ismainly currency risk. Candidatesalso have to remember as it willalways be in Q1 and thereforecompulsory, candidates can nolonger avoid this topic.

Turning to the most recent main

exam she was perplexed aboutwhy candidates avoid calculations.They also seemed to have verypoor knowledge of economic risk.It comes up in most exams butcandidates do not know what it is.Not using the specifics of thescenario in their answers wasanother major failing.

Looking ahead, she stressed theexams will follow the same format.That means scenario-basedquestions. Most questions willrequire a discussion and sheagain said bullet points will notachieve high marks (please takethe hint!). She stressed that maincalculations will examine currencyrisk, which could be in Q1. And, ifcandidates do the calculationswell they can get very high marks.Expect them in most diets.

SYLLABUS WEIGHTINGS• Management of financial risk –35%• Risk & Internal control – 25%• Risk & control in informationsystems – 15%• Review and audit of controlsystems – 15%• Management controlsystems – 10%

28 PQ Magazine June 2011

PQ practical tax

Looking to further your tax knowledge or progress your career in tax?

The ATT has the answer with its new exam structure offering a choice of seven subjects.

Gain a Certificate of Competency or continue to full membership of the leading professional bodydealing with UK tax compliance.

The choice is yours!

For further details please visit the ATT website at www.att.org.uk or call the Association of Taxation Technicians on 020 7340 0551

Reached the top?

The Association of TaxaTT tion TechniciansTT

The vastmajorityof UK

citizens pay their taxes, leaving a minoritythat deliberately do not, and it is thesetax evaders who are taking money thatcould be spent on vital public services.

HMRC has launched a programmecalled Managing Deliberate Defaulters(MDD) in order to monitor the tax affairsof individuals and businesses who havedeliberately tried to evade tax. Theprogramme aims to ensure that thosewho have defaulted in the past changetheir behaviour and pay their fair share oftax. It also aims to reassure honest tax-payers that we will penalise tax evaders.

We’ve worked closely with the tax

Brian Redford of HMRC’sBusiness Customer Unitexplains its new hands-onapproach to tax evasion

HMRC gets ‘handson’ with tax cheats

agent community to develop thisprogramme. The message we want to getacross is: Play by the rules or facegreater scrutiny.

As of February this year, sole tradersand small businesses who havedeliberately tried to pay less tax than theyshould could find their businessessingled out for extra inspections byHMRC, for up to five years. Deliberateevaders identified since 6 April 2009 willalso face additional scrutiny.

The level of monitoring will depend onthe seriousness of the tax evasion. Wewill continue to check that returns arefiled on time and that any tax that is dueis paid on time. But there will also beregular reviews of a deliberate defaulter’stax affairs, to check that they have putright any errors or failings.

HMRC can monitor a deliberatedefaulter’s tax affairs in a range of ways,including by:• Announced or unannounced inspectionvisits to check business records.

• Requesting certain records.• Asking for additional information ordocuments to accompany a person’s taxreturns.• Conducting in-depth compliancechecks into any part of a person’s taxaffairs.• Observing or recording a person’sbusiness activities and cross-checkingdetails in their accounts. HMRC maymake test purchases or inspect therecords of suppliers or customers.

For VAT-registered customers HMRCmay also take the following action tomonitor compliance:• Require submission of quarterly ormonthly VAT returns.• Require the same accounting periodsfor VAT and income tax or corporationtax.• Withdraw the use of certain schemessuch as flat-rate scheme, cashaccounting, annual accounting or retailschemes, if it’s considered necessary toenforce compliance.

Evaders who fail to keep their taxaffairs in order will face increasinglyintrusive intervention from HMRC. Ifdeliberate evasion continues, HMRC maystart criminal proceedings. If a deliberatedefaulter starts a new business, this mayalso be monitored.For more information about managingdeliberate defaulters see www.hmrc.gov.uk/about/tax-defaulters.htm

PQ

PQ Magazine June 2011 29

practical tax PQ

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For VAT specialists one of the mostloved topics is the VAT liability offood and drinks, demonstrated by

the infamous Jaffa Cakes, teacakes,Pringles and Innocent Smoothiescases. Now a recent case of theEuropean Court of Justice (‘ECJ’) hasstirred up something of a hornets’ nest forHMRC yet again.

Under UK VAT legislation cold take-away food is zero-rated. However, iftake-away food is heated above‘ambient air temperature’ it no longerqualifies for zero-rating and 20% VAT mustbe charged. This is because the UKregards the supply of hot food as cateringservices rather than a supply of foodstuffs(which is a supply of goods). There havebeen numerous cases on whether foodhas been heated above the ambient airtemperature to enable it to be served hot,or whether it is heated to demonstrate thatit is freshly baked (see the recent

Takeaways aVAT hot potato

Deliverance case).However, the recent ECJ case of Bog

and Others has thrown considerable doubtover whether hot take-away food shouldbe standard-rated at all. In the appellants’case, hot food was prepared and supplied

to customers from premises that did notprovide tables from which food could beeaten. Specifically, the venues involvedwere stalls, mobile snack bars and cinemafoyers. The ECJ held that the provision ofhot foodstuffs without the supply of anyadditional support services cannot turn thesupply from one of goods into one ofservices. Therefore the supply of hot foodshould be taxable at the same VAT rate as

cold food.HMRC have already published their

interpretation and maintain that the UK(which has a special dispensation – or

derogation – to charge VAT at the zero rateon food) specifically excluded hot foodfrom its zero-rate and so there was neveran intention to allow it to be zero-rated.

The Bog case has therefore created alot of both anticipation and confusionamong interested parties in the UK, andsuppliers of hot food have already begunto submit claims for overpaid VAT. PQ

• Siân Beusch,associate VATdirector, BakerTilly

30 PQ Magazine June 2011

PQ exam technique

When you are studying for anexam most of your energy isgiven to understanding the

subject and getting the information intoyour head, which, of course, has to takepriority. However, as the exam getscloser you need to shift your attentionand begin to think about what you needto do to pass the exam itself. This iswhere exam skills help.

One key exam skill is the ability toread the question and understand whatthe examiner wants you to do. It soundsvery easy, yet on the day, with thepressure of the exam, the simplest oftasks can seem daunting and mistakescan be made.

CIMA, like many examining bodies,recognise that this is a problem and soto help students better understand whatto do in the exam they have developed averb hierarchy, a list of verbs (actions)that examiners use when setting examquestions. At the recent CIMAconference, examiners again stressedthe importance of understanding theverbs to help students improve chancesof passing.

Different verbs, different levels,different thinkingThe verbs are different dependent onthe level you are studying. What manystudents may not appreciate is that bychanging the verb you are not onlychanging what needs to be done, youalso change the level of thought

How verbs canhelp you passStuart Pedley-Smith can’t emphasise enough why it’s vitally importantyou identify the verb in the question, and tailor your answer accordingly

required to answer the question. Forexample, there is a different thoughtprocess behind a question that asks youto ‘define’ (to give the meaning ofsomething) compared to ‘recommend’(to advise a course of action). To definesomething you have to do little morethan memorise the definition andreproduce that definition in the exam,whereas to recommend you need toconsider all the information in a givencontext, possibly having undertakensome analysis and then advise on acourse of action. This requires a farhigher level of thought and as a resultyou will not have to deal with thesetypes of questions until you get to thefinal levels, Managerial and Strategic.

These verbs build, each supportingthe other and each requiring a different

thought process. When you get toStrategic level all of the verbs can beused, not just the ones at the higherlevels.

Some verbs are easier than othersCIMA even highlight the verbs to makethem stand out, see this extract from theMarch 2011 F3 exam.(c) Advise the directors of TM on anappropriate financing structure for netcurrent assets and explain the benefitsand potential problems of using eurodenominated finance. (7 marks)

But some verbs are easier tounderstand than others. Take the verb‘calculate’; this clearly requires you toproduce some numbers, a mathematicalsolution. But what about the verb‘describe’? CIMA suggest that thismeans to “communicate the keyfeatures”. But how do you go aboutdescribing something, how do youcommunicate key features? Well, whynot use your mind’s eye to visualize whatit is you are trying to describe. Imaginethat you are in that situation. What canyou see? Now just write it down.

Then there are the very difficult ones.In the question above you are asked to‘explain’. CIMA suggest that to explainyou should “make clear, or intelligible,state the meaning of”. To help explainsomething it is a good idea to definesome of the more technical words. So inthis question start by defining what eurodenominated finance is, then identifywhat the benefits and problems are ofusing euro denominated finance. And ifthat is not clear or if it requires a morein-depth answer, indicated by thenumber of marks, consider giving anexample to illustrate your point.

There are 25 verbs in total andalthough you don’t need to spend a lotof time looking at all of them, when younext attempt an exam questionunderline the verb and take a second tothink what the examiner is asking you todo, it could mean the differencebetween passing and failing. PQ

Knowledge

Comprehension

Application

Analysis

EvaluateHow you are expected to use

your learning to evaluate, makedecisions or recommendations

How you are expected toanalyse the detail of what you

have learned

How you are expected toapply what you have learned

What you are expected tounderstand

What you areexpected to know

THE VERB HIERARCHYA full list of the CIMA verbs can be found on the CIMA website

• Stuart Pedley-Smith is a seniortutor at KaplanFinancial andformerPQ magazineLecturer ofthe Year

to advertise call 020 7216 6444

on the

Hewitson Walker

www.hewitsonwalker.comHewitson Walker is a leading, UK-based, accounting and financerecruitment consultancy specialist.With in-depth recruitment experience,Hewitson Walker handles temporary,contract, temp to perm andpermanent jobs at all levels acrossall UK industry sectors. Search oursite at www.hewitsonwalker.com formore accounting and finance

positions including assistant accountants, part qualified, newlyqualified through to senior level and board appointments.Alternatively call us on 0845 603 4356.

Reed Accountancy

www.reed.co.ukReed Accountancy arethe UK’s leadingspecialist recruiter for allaccountancy roles up toand including part-qualified accountants,with Reed.co.uk beingthe UK’s leadingrecruitment site, offeringmore than twice thenumber of jobs of anyother UK job site.

For your next accountancy role go to www.reed.co.uk/accountancy.

Robert Walters

www.robertwalters.co.ukRobert Walters is one ofthe world’s leadingglobal, specialistprofessional recruitmentconsultancies.We specialise in findingjobs for part qualifiedaccountants in leadingcommercial companies,financial services and

the public sector. Our consultants offer expert advice and willwork hard to help you find your ideal job. Download our SalaryChecker App from the business section of itunes.apple.com

32 PQ Magazine June 2011

PQ ICAEW focus

PQ Manchester students

The IASB has issued an exposure draftthat will impact the current accountingof leases. The Exposure Draft ‘Leases’

proposes to replace the current Standard IAS17, which distinguishes between twoapproaches, finance leases and operatingleases. The result of the new standard will be asingle approach to lease accounting. So let’sexplore the why, how and implications of thenew approach.

Summary of current treatmentsFinance leases recognise a non-current assetand a liability in the lessee’s statement offinancial position due to considerations like risksand rewards having been transferred to thelessee. This results in the asset beingdepreciated and the liability being accounted forunder amortised cost. For operating leases,

however, the lessee does not show the asset orliability on the statement of financial position butsimply account for the lease payments as anexpense over the lease term.

Problems with the current systemFirstly, the accounting of an operating lease isconceptually flawed, since the entering into anoperating lease both meets the definition of anasset and liability. On entering into the lease thelessee obtains the right to use the asset andtherefore get the economic benefit. Additionally,the lessee assumes the obligation to transfereconomic benefit by way of contracted rentalpayments. Operating leases therefore result inoff-balance sheet finance that impacts ratiocalculations and comparability betweencompanies. This means that the users offinancial statements have to estimate the effect

A new lease of lifeof operating leases on financial leverage andearnings. Finally, the judgement required toclassify the asset correctly opens the door forfinancial statement fraud, where leases can bestructured and designed to achieve a particularaccounting outcome, (namely operating leaseshave no impact on gearing).

How would the new standardchange things?Since the lessee in an operating lease hasacquired the right to use the asset and pays forthat right over a lease term, the lessee wouldrecord an asset and liability (see table, left).

ImplicationsAlthough this new approach will rectify someproblems it also creates some new ones. Thecommercial implications of recognising allcurrent operating leases onto the statement offinancial position will substantially increase theassets and liabilities balances. This will have ahuge impact on key ratios such as gearing. Thisin turn could impact on bank covenants andloan agreements. It may also add to the cost ofpreparing the financial statements. The exposuredraft includes questions on the proposal and isavailable to read at www.ifrs.org. A new standardis set to be published later this year.• Ryan Hill, Financial Reporting and AuditTutor, First Intuition, Reading

PQ

Ryan Hill explores the implications of a new approach to lease accounting

A good time was had by all at the MCASS Annual Dinner – and the King put in an appearance, too!

It had to be a worthwhile occasion to getElvis along, but even ‘The King’ himselfknew that this event would be worth

attending. He came, he saw and he certainlyconquered.

No one could accuse the Manchester StudentAccountants of the age-old ‘boring’ stereotypewhen some 430 people attended the Las Vegasthemed MCASS Annual Dinner in March, toacknowledge and reward those leading the wayin the professional stage exams.

The iconic Midland Hotel received a touch ofVegas glamour as guests were greeted by the

famous Las Vegas Showgirls and a champagnereception. A magician mingled with the guests,displaying his astonishing trickery before dinnerwas called. Guests were seated at their famoushotel themed tables while the showgirlsperformed an opening dance routine, completewith high leg kicks. Elvis then provided theperfect backdrop as he crooned his way throughthe delicious starters and main courses.

During dessert the MCA President, Su Rai,presented prizes to those who obtained thehighest marks in the professional stage exams.During coffee the raffle was drawn, raising over

£1,200 for the NSPCC’s Child’s Voice Appeal,equal to answering over 300 calls.

Of course, no Vegas themed event would becomplete without casinos and so gamblingcommenced straight after dinner (with fakemoney, of course). However there was stilleverything to play for as a prize remained for theperson who turned their ‘£100’ starting money into the most. One lucky winner won a day trip toFrance, courtesy of Ace of Diamonds Casinos,for making over £5,000!

MCASS would like to thank everyone forattending and for the continued support of all thesponsors throughout the year. A special thankyou goes to the sponsors of the evening:Training-By-Eos, Evuna, Think GlobalRecruitment, Vertigo Restaurant and Bar andMichael Page Finance, as well as the generousraffle prize donors.

We look forward to seeing you at our nextevents! PQ

FUTURE EVENTSComing soon... the AGM – youropportunity to join the MCASS committee!For more information please visitwww.mcass.org

VIVA LAS VEGAS!

Asset

Liability

Initial recognition

At the present value of thelease payments discountedusing lessee incrementalborrowing rate

Initial recognition is thesame value as the asset

Subsequent recognition

The asset is depreciatedover the shorter of thelease term and economiclife

The liability is accountedfor under the amortisedcost approach

Presentation

Presented within PPEcategory but separatefrom assets that lesseeowns

Split between currentand non-currentliabilities

PQ Magazine June 2011

PQ careers

Khurrum Beg, 32, has worked as a decision support business analyst, based in Bromley,for nearly four years. He has an economics degreee and is our current NQ of the Year.His claim to fame is that he was once the victim of an Ant and Dec TV wind-up!

Life at RBS Insurance

What time does your alarmclock go off on a workingday? 6am.What’s the first thing you dowhen you get to your desk?Check my e-mail’s then get a fullEnglish breakfast.What’s on your desk? ChurchillInsurance dog.What’s the best thing aboutwhere you work? Working inthe central finance team allowsme to view the business from thebigger picture.Where’s your favourite placeto go for lunch? Local kebabshop.What (or who) can you seewhen you sit at your desk?Financial accountants, cupboardsand NCP car park.Which websites are your

favourites and why? BBC as itcontains latest news, economicupdates and sport.Which websites do you usefor work? CIMA, ACCA, BPP andPQ magazine (for my additionalrole as study coordinator).How many hours a week doyou spend in meetings? Two.What time doyou leave theoffice? Can be aslate as 10pmduring month-end;however, no laterthan 6pm outsideof month end.How do you relax? Lying downon the sofa watching football,boxing or cage fighting.What’s your favourite tipple?I don’t drink alcohol.

How often do you take workhome with you? Very rarely.What is your favourite TVprogramme? Only Fools andHorses.Summer or winter? Summer.Pub or club? Pub, as I’m toohumble to show off my dancingskills.

Who is your hero?Mike Tyson.If you had a timemachine, wherewould you go? Back to2005, as that’s the lasttime Arsenal won atrophy.

If you hadn’t chosenaccountancy, where mightyou be right now?Land surveyor (not as glamorousas accountancy).

Market report: retail on a rollJames Priestley, UK Head of PartQualified recruitment at HaysAccountancy and Finance, providescandidates with an update on PQdemand in the labour marketThe demand for PQ professionals across all sectorsis strong at present. Whereas vacancies declinedduring the recession, as businesses looked to cutcost, demand is picking up again asconfidence begins to returnto the majority of markets.

Retail, for example, hasshown increased interest inemploying PQs that canstrengthen their marketproposition in a new andchallenging trading world.Typical key skill areas thatare in demand at present are analytical, cost controland forecasting. This is because businesses want totake stock of what they have now and understandwhat budgets they have to work with in the future.PQs will need to be able to look at data, andinterpret and advise on future markets and budgets.

SMEs are well aware of the benefits a PQ can

bring to their organisation. As well as advising onfuture markets and looking at new ways of reporting,PQs also bring an element of commitment. Manyprofessionals will be keen to stay with an employerduring their studies, particularly if the organisationsupports them through to qualification.

Large companies are also keen to snap up toptalent and in a bid to attract the best many areoffering competitive packages, with study supportand commitment to support professionals qualify.This means many talented PQs are given time off to

revise for, and sit, exams and their employeralso supports associated costs such as buyingtextbooks and paying for training.

While the market is looking strongorganisations still prefer to wait until they findsomeone who has the right skills andexperience for the job role. To secure aposition professionals need to be able todemonstrate that they have the skills a

company needs, taking into account market changesand current trends. Gaining an understanding of howa company has fared during the recession, whatdecisions and cutbacks they made, including theirplans for the future, will help to demonstrate to theemployer that they are eager to understand theirmarket positioning and drive business forward.• See www.hays.co.uk/accountancy for more details.

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

• Whoops! Whyeveryone oweseveryone and no onecan pay, by JohnLanchester (Penguin,£9.99)RE-ISSUED lastOctober, this critiqueof modern bankingtackles a subject

that is hotting up again in 2011in the light of the recent Vickers reportinto UK banking. Sir John Vickers (asyou know) led the commission intobanking reform that reported in April.So while you wait with bated breath forthe full report in September, enjoy thissearing indictment of a sector thatmany believe exercises great powerwithout showing concomitantresponsibility. Lanchester is one, andhe argues his case with clarity and wit– and a dazzling array of statistics thatleave the reader shaking their head indisbelief. Here’s one: in April 2008,then chancellor Alistair Darlingthought the ‘projected deficit’ for thenext year would be £38bn; in April2009, it had grown to £175bn. Or: In2003 the size of the world economywas $49 trillion; the size of derivativesbeing traded was $85 trillion. Or: afterthe Icelandic banking crash, thecountry’s debt was equivilent to£116,000 per man, woman and child.Someone sneaked in the back doorand took all our savings while wesnoozed in our favourite armchairs.Have we forgotten to lock up again?★★★★★ Hugely enjoyable and funny,

it’s terrifying, too

• Capitalism 4.0: TheBirth of a NewEconomy, by AnatoleKaletsky(Bloomsbury, £20).YOU ARE at adinner party andsomeone says thatwe could go the

same way as the Greeks and becomenationally bankrupt. Well, Kalesky isquick to explain countries with theirown currencies do not go ‘bankrupt’.And financial markets do not have thepower to force them to reduce publicborrowing. However, voters do! He ispredicting Britain will cut publicspending and privatise parts of theNHS because voters will reject theenormous tax burdens implied by thepresent structure of the welfare state.Seek this out.★★★★ Easy to read, insightful andprovocative. Kalesky is prepared to sayfrom the off that markets are oftenwrong

34

Too much boozeThe average Briton hits the

bottle at 7.11pm on a weekdaynight, with the typical workingadult reaching for an alcoholicbeverage just an hour and 25minutes after arriving home, astudy by Benenden HealthcareSociety has found. The survey of3,000 people found that three-quarters conceded that they

needed a drink to ‘unwind’ andone in five admitting that theydrank ‘too much’. “Brits need toensure that they are not relianton alcoholic drinks as part of aday-to-day routine,” warnedLawrence Christensen, head ofcommunications.

Not networkingDespite what we hear about

social media’s role in recruitment,recent research suggests it is notbeing adopted by recruiters andjobseekers as widely as expected.According to figures from RobertHalf, around half of recruiters(52%) and jobseekers (49%)haven’t used social media as partof the recruitment process. Still,be careful what you post onFacebook just in case!

In brief

Business AnalystTwickenham, Middlesex Ref: HG1276/39

To £35,000

This highly reputable organisation is currently seeking a Business Analyst to provide detailed financial support and assistance to the company’s Standards division, under the direction of the Divisional Finance Manager. The Business Analyst will be responsible for the monthly management reporting and provide support to the quarterly forecasting process and annual budget process. The ideal candidate will be an ACA/ACCA/CIMA part qualified accountant with experience gained in a commercial environment.

Corporate AccountantWalton On Thames, Surrey Ref: HG66/24

£45,000 + Benefits

My client is seeking a Corporate Accountant. The Corporate Accountant will be responsible for preparing monthly management accounts for corporate companies including balance sheet reconciliations and analyses of key accounts as well as accounting for foreign exchange and treasury transactions. You will also be responsible for leading the forecast, budget and planning process for corporate companies. The ideal candidate will have a soundtechnical accounting competence including knowledge of accountingstandards and treasury activities including hedging.

Fund AccountantEpsom, Surrey Ref: HG880/16

To £38,000

My client is seeking a Fund Accountant, responsible for preparing annual and interim financial statements for a wide range of funds within the different legal status. This role will entail preparation of Board papers for the investment trusts; revenue forecasts and yields as well as production of quarterly VAT returns. The ideal candidate will have previous work experience in the Financial sector and an understanding and knowledge of the investment management business.

Business Support AccountantTeddington, Middlesex Ref: KB35/4

To £25,000

My client is seeking a Business Support Accountant. The primary role of the Business support function is to assist the business in the application and compliance of new and existing Accounting Policies. You will be responsible for administering and ensuring compliance with the current business controls projects, including accurate tracking of weekly cash performance, maintenance of a monthly controls pack and development. The position is a developmental role for a graduate or early studier who will learn systems, accounting methods and gain insight into the business model.

For more information please contact Hylton Gunter hyltongunter@walkerdendle.co.uk 020 8408 9982 or Kelsie Bufton kelsiebufton@walkerdendle.co.uk 020 8408 9983

To discuss current temporary/contract opportunities, please contact Charles Phipps charlesphipps@walkerdendle.co.uk 020 8408 9980

Walker Dendle Financial RecruitmentSwan House, 51 High Street, Kingston KT1 1LQT: 020 8408 9999 www.walkerdendle.co.uk

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Howett Thorpe Recruitment Consultants Ltd

The Courtyard, 16 West Street

Farnham, Surrey, GU9 7DR

Call us on 01252 718777

recruit@howett-thorpe.co.uk

Where Individuals Count

Financial Accountant - Woking£40-45,000

Full study support, pension, bonus

Due to continuous growth at this global market leader

the need has arisen to recruit a technically strong part

qualified accountant. Working within one of their

larger business units you will work closely with the

Financial Controller to provide timely financial

reporting and analysis and ensure the smooth running

of the month end process. The expectation is that you

will be in the role 18 months before moving on

internally within the business.

Management Accountant - Woking£32,000

Pension and full study support

A fantastic opportunity at an instantly recognised

business for a Part Qualified Accountant. This role will

give exposure to all aspects of the management

accounts process and enhance your commercial skills

as you will have extensive involvement with senior

non finance staff, influencing key business decisions.

You will also work closely with the Finance Manager

reviewing current controls and implementing change

when required.

Finance Manager - Guildford£40,000

Full study support and bonus

Bucking the trend and exceeding all expectations this

innovative SME now need a focused Finance

Manager. Supporting the Financial Director you will be

responsible for all aspects of the management

accounting process and statutory reporting

requirements for the company. This role will have

direct interaction with the business, suiting a part

qualified/finalist looking to develop and enhance their

commercial skills.

Assistant Accountant - Nr Farnham£27,000

Study support and free parking

With aggressive expansion plans in place this

innovative SME now need to recruit an additional

head within their finance team. You will have direct

involvement with the production of the management

accounts as well as working closely with the FC to

ensure that the right controls are in place to

accommodate the next phase of growth. It’s an

exciting time to join a business such as this as the

future career options are limitless!

“That some

achievegreat

success, is pr

oof

to all that oth

ers

can achieve it

as well.”

Abraham Lincoln

hays.co.uk/accountancy

ACCOUNTING OPPORTUNITIES INVEST IN YOUR FUTUREManagement Accountant Marlow, Buckinghamshire (moving to Victoria, London early 2012)To £30,000

Reply is one of the UK’s most successful and fast growing IT consultancies, with an organisational model that combines the capacities of a large entity with the flexibility and specialisation typical of small structures. As a key member of the finance function, you will be responsible for full monthly accounts preparation and review with company partners for three individual companies. You will be asked to manage ledgers, financial reporting including VAT and administration of payroll, pension and benefits schemes. Reply is seeking an ambitious individual to move forward with their organisation. Ref: 1401581

To discuss this role in more detail, contact Dean Williams at dean.williams@hays.com or call 0118 959 1751

Assistant Management Accountant Northallerton To £25,000

This leading waste management organisation is currently undertaking a transition of business improvement and is implementing strategies to ensure future growth. As a result, they require an experienced assistant management accountant to support the finance team. Daily duties may include preparing management accounts, assisting with cashflow and budgeting, reconciling cash accounts and cost centre management. Looking after specific business units, you will be responsible for the day to day duties that allow the management accounts to be effectively produced. Ideally studying CIMA or ACCA, you must have a commercial background within management accounting. Ref: 1369702

To discuss this role in more detail, contact Lisa Bird at lisa.bird2@hays.com or call 01642 226716

*

*

*Terms and conditions apply

**

Job opportunities for you..

What you win

Apply for positions now at WHY[�X\HSPÄLK'YLLKNSVIHS�JVT

National winner Regional winner

9LLK :WLJPHSPZ[ 9LJY\P[TLU[ 3[K� is an employment agency and employment business

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and the rewards are huge! (WWS`�UV^�H[�^^ �̂YLLKUV�WX�JV�\R

(ZZPZ[HU[�-PUHUJPHS�ControllerLondon - £40,000

� Analysis of P&L expense codes

and cost centres

� Multiple account reconciliations and

accrual reconciliations overview

� Monthly management accounts,

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� Reconciliation and Review of all

balance sheet accounts and

bank accounts

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leased assets register, calculate

depreciation

� Working closely with auditors

in preparing year end statutory

accounts

� Annual budget process

4HUHNLTLU[�(JJV\U[HU[Midlands - £32,000

� Preparation of monthly management

accounts, investigating variances

and providing commentary

� Financial analysis, budget setting,

forecasting and cost control

� Production and review of balance

sheet account reconciliations

� Undertake and support ad hoc

accounting projects

� 7YV]PKL�ÄUHUJPHS�HK]PJL�[V�

budget holders and assist in their

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� To assist in the investigation of and

completion of internal / external

audit requirements

� To assist and mentor the Assistant

Management Accountant

-PUHUJPHS�(JJV\U[HU[North East - £27,000

� Purchase / Sales Ledger

Management

� Managing control accounts

� Overseeing Payroll

� Assisting with budget preparation

& variance analysis

� Nominal Ledger set up &

maintenance

� Maintenance of all accounts systems

� Providing spend reports to

assist budget holders with the

management of their cost centres

� Financial year end and preparation

VM�H\KP[�ÄSL

� Advanced Excel and Systems

maintenance experience essential

PQ got a story, funny or serious, you want to share? Email graham@pqaccountant.com

ENTRY FORMName: ......................................................................................................

Address: ..........................................................................................................................................................................................................................................................................

Qualification/stage ............................

Congratulations toPaul Smith, a PQbased in London,who was the firstout of the PQ hatwith last month’scorrect solution.He wins a greatCarol Vordermanelectronic sudokupuzzle game –the one millionpuzzles itgenerates shouldkeep you busy,Paul! Next monthit could be you,so get that pencilsharpened andget on with it!

Prize Sudoku

May

’sso

lutio

n

1 7 6 4 2 5 9 3 8

4 3 8 9 6 7 1 5 2

5 9 2 1 3 8 6 4 7

8 1 3 7 5 9 4 2 6

2 4 7 8 1 6 5 9 3

9 6 5 3 4 2 8 7 1

7 8 4 6 9 3 2 1 5

6 5 9 2 7 1 3 8 4

3 2 1 5 8 4 7 6 9

6 3 7 1 5 2 9 8 45 4 2 9 6 8 1 7 38 9 1 3 7 4 6 2 52 8 9 4 1 3 5 6 77 5 3 8 9 6 2 4 11 6 4 7 2 5 8 3 94 2 6 5 3 9 7 1 83 7 5 2 8 1 4 9 69 1 8 6 4 7 3 5 2

Return to PQ Magazine, Sudoku Competition, 4th floor, Central House,142 Central Street, London EC1V 8AR. Deadline for entries is 06/07/11

PQ Magazine June 2011

FUN AND GAMESThe AAT 2011 conference was the place to discover, share andask! The AAT sets the standard for fun and this year’s eventlived up to its normal billing. Each table at the dinner wereasked to create a new country. PQ magazine’s Graham Hamblywas on Table 4 and to its surprise made it to the final ‘sing-off’,where it came an honourable second.

So what did we come up with, bearing in mind the CBAdebacle (see last month’s letters and news pages)?Name your country: WHAAT!National dish: Humble Pie – that’s what AAT people will bedoingDrink: Arsenic And Tonic – ‘an AAT’Country Motto: ‘Try, try, try again’, or ‘get it right first time’National Holiday: 1 April – CBA gone right dayFour-line national anthem:(To the tune of the US national anthem)‘Oh, AAT’‘What have you done?’‘I loved you once’‘But you never loved me.’Best joke of the evening: “One NVQ in the hand is worthtwo CBAs in the bush.”

Really, you had to be there.

OUR MAN IN CHICAGOKieran Maguire, our PQ magazine Public SectorLecturer of the Year, finally got his award (he sentus proof – left). He is also currently MMU’sLecture of the Year and was picking up anInnovation in Teaching and Learning prize inChicago when he should have been with us. Nowhe’s a bit of a media darling is our Kieran and haseven been on The One Show; he is also a regularon Radio 5 Live with Steve Nolan. However, he isprepared to admit that he is ‘the kiss of death’when it comes to TV. He was on ITV digital (gone),he was Channel M’s Mr Finance (gone), andstarred on Accountancy TV (where’s that now?).

GIRLS ONTHE TOWN

Back in 2003 PQ gottogether four PQs andsent them out on thetown in Bristol. Wewere contacted recentlyby one of the girls, MelHorne. She has movedfrom Swindon and now

lives and works in London’s Canary Wharffor HSBC. So how has her worldchanged? We’ll let you judge...

THEN (2003) & NOW (2011)LIVESNOW London.THEN Swindon.PERFECT NIGHT OUTNOW Free drinks and plenty of laughs.THEN Starting off at a girlfriend’s housefor a few drinks (and drinking games),then going into town and meeting up witheveryone.MUST HAVE MAGSNOW Look magazine.THEN Heat, for the gossip.ESSENTIAL WARDROBE ITEMNOW Leggings!THEN Jeans – for every occasion.IDEAL MANNOW Same as last time – professionalfootballer/Brad Pitt look-alike.FAVOURITE DRINKNOW White wine (as long as it’s notChardonnay).THEN Vodka and Red Bull.ENJOYSNOW Socialising with friends, visitingLondon’s parks and other attractions.THEN Meeting up with friends andshopping. I’ve got good intentions aboutkeeping fit but they never last.UMISSABLE TVNOW I have Sky Plus:-).THEN EastEnders and Friends.

WE ALLLOVETAXJemma Hill, pictured, was afinalist at the PQ awards earlierthis year. This Deloitte girl lovestax and to prove it she put onone of our t-shirts! Don’t forget,you too could be the proudowner of one of our ‘I Love Tax’t-shirts. They cost just £12.99including P&P. Just contactdom@pqaccountant.com andhe will tell you what you needto do.

OILING THE WHEELSOF ACCOUNTANCY

PwC has signed a dealfor the largest-everoffice supply ofrecycled chip fat,from restaurantsand bars across

London. It will be used to generate lowcarbon energy for the firm’s new HQ onthe South Bank. PwC will pick up 45,000litres every month for refining and, oncedelivered, it should help provide 25% ofthe electricity needed for the building.

A CRISP DEALSo how much would yousay the Pringles ‘brand’is worth?In truth itdoesn’tmatterwhat you thinkbecause someone(Diamond Foods) was prepared to payProcter & Gamble a cool £1.5bn for thename. Diamond can now add Pringles toits Kettle Chips, Emerald Nuts and PopSecret Microwave popcorn. Pepsi-co stillrules the crisp/snack world with Walkersand Doritos, but its 25% market share isunder threat.

Now all products made from potatoes(crisps) are VAT-able. It’s best you don’tknow how Pringles are made, just to saythey were ‘invented’ in 1968 and containless than 50% potato. That means theyonly became liable to VAT (in 2009) aftersome lengthy court cases.Pringe fact 1: P&G executives choosethe name of their new snack aftersearching the Cincinnati telephone bookand coming across Pringle Drive.Pringe fact 2: The designer of Pringle’sdistinctive hyperbolic paraboloid(cylinder) packaging was buried in hisinvention (well, his ashes were).

Do you ever wonder whathappened to Colin, the AAT’s‘superhero’? No, nor do we.However, we did hear that the‘star’ of the campaign is nowthe DJ in the Yellow Pages ads.

SUPERHERO TO DJ

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