pq december

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

After more than three years

of courting, CIMA and the

AICPA have announced they

are ready to take their

relationship to the nextstage!

The two bodies started their joint

venture way back in 2012, and

when they came together the pair

promised to keep things under

constant review. It would seem that

both parties are still talking and now

want to take the partnership further.

In an exclusive interview with PQ

magazine, CIMAs MD Andrew

Harding explained that in order to

take this next step with the

American Institute of CPAs it is

proposing the creation of a new

association.

Together, that means an

association representing 600,000

Do ACCA PQs need a student council to

represent the views of all students? That is just

one suggestion coming from the fall-out over the

announcement that the ACCA will no longer be

publishing the exam papers and examiners

answers after each sitting.

Some students feel they havent been properly

consulted about the move and liked the idea of

a more formal arrangement for feedback, such

as a student committee.

However, the ACCA does work hard to engage

with students through its active learning

community. It also has Learning Community

Champions, who advise it on the best ways of

improving the learning community.

The ACCA has upped its game considerably in

recent years to become more engaged with its

PQs, but the news that the paper Q&As were no

longer being published after each sitting just

didnt seem to filter through to students. When

PQ magazine announced the change students

asked: When is this happening? We had to tell

them it already had!

Students really dont like the move. With exam

practice such a major factor in preparing for the

real thing students just could not get their heads

around the fact that they were no longer

available.

As one ACCA said: As good as some books

are, theres no substitute for completing exam

questions against the clock.

Students also want to go over the actual test

they have sat, not an amalgamation of questions

from the last two sittings. That will mean

nothing to me and the experience I went

through, a disgruntled PQ pointed out.

SPECIAL RELATIONSHIP

MOVES TO NEXT LEVEL

TIME FOR AN ACCA STUDENT COUNCIL

HOT ACCAEXAM TIPS

Advice and guidancefrom the UKs top tutors

for the upcoming exams

AWARDSMATTER

Weve just won one and it could be

your turn next

LECTURERSCONFERENCE

PQ magazine attended this yearsCIMA event on your behalf. So

what are the examiners saying?

INSIDE THIS ISSUE

both will continue to operate as

separate membership bodies.

He felt students will be one of the

main beneficiaries of the move, with

better opportunities for employment

and career prospects. Harding

revealed that CIMAs global reach

was already seen a big attraction for

students some one in five new

recruits mention the institutesglobal influence as the key reason

for choosing to study with CIMA.

Members of both CIMA and the

AICPA are now being asked to

endorse this new commitment in

2016.

Harding said that CIMA members

were keen to keep hold of their

royal charter, council set-up and

mission, and have a strong affinity

to their own brand. So any

suggestion that this was a step on

the road to a full merger was wide

of the mark. There are no plans for

further integration after this so

they will live together, but arent

going to change their names!

AIAs ACCOUNTANCY MEDIA OF THE YEAR 2015

current and next-generation

professionals, creating what

Harding believes will be a hugely

influential, truly global body of

professional accountants.

Some 150,000 CIMA and AICPA

members have already taken up

the option to become Chartered

Global Management Accountants

(CGMA).

Harding stressed that CIMA

members and students would

continue to be served by CIMA.

What is being integrated are the

organisations strategies,

management and operations, but

PQmagazine

EXCLUSIVE


2/40

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comment PQ

News

08CIMA OT change Institute setto introduce scaled scores

10ICAEW professional levelPass rates hold up well

12ACCA exams All the resultsfrom the first September sitting

Features, etc

06Mind your Ps&Qs A heartfeltplea to the ACCA; trouble withgetting qualified; and the verybest of social media

14AAT case study Meet anEnglish international cricketerwho is studying with the AAT

16PQ Awards 2016 Stand outfrom the crowd win a PQaward! Best enter then

18CIMA F1 Top advice on how tobest approach this tricky paper

20ACCA exam tips The best tipsfrom the best tutors just for you

22ACCA P2 This is thecore ACCA

paper, says Clare Finch. So howdo you tame the beast?

23ICAEW spotlight Tacklingscenario-based questions

24CIMA pre-seen We take youby the hand and lead youthrough the Strategic level case

25CIMA conference All theaction from the recent CIMALecturers Conference andtheres more on page 26

27AAT focus How membershipcan help boost your career

28Lets get technical Chattels,and calculating capital gains tax

29CIPFA Student NetworkMeet new president KatieGoodall

30ACCA exam feedback Whatthe examiners want from you

31Careers #1 Prepare now foryour new job in 2016

32Careers #2 Life in the NHS;another PQ career issue dealtwith; and our Book Club

38Fun time A PQ marathon man;the kangaroo kid; Abbey Roadadventures; and great giveaways

The columnists

Robert Bruce The long and theshort of annual reports 8

Prem Sikka Can the big firms keeptheir audit monopoly? 10

Carl Lygo The devastating impactof the fall in oil prices 12

Subscribe to PQ magazineIts FREE see page 35 or go to

www.pqmagazine.co.uk

ABC July 2014June 2015

32,233

Publishers statement: We have a

digital issue of the magazine which

is sent to 8,248 requested readers

Another winning monthIt has been a great month for PQ magazine. We won a

major award and were acknowledged for helping

another major accountancy body listen to what their

PQs want. First up, PQ magazine won the Accountancy

Media of the Year Award 2015 (see photo!), courtesy of

the AIA in the wonderful surroundings of BAFTA. Thats

two years in a row PQ magazine has picked up

glassware! Thanks for everyone who voted for us.

We also got a big shout out from Dr Noel Tagoe at the CIMA 2015

Lecturers Conference. The Executive Director of Education went out of

his way to thank us for helping CIMA listen to its students. We pushed

for the institute to look at claims that the CBAs were failing good

students. PQ has also been asking CIMA to let students use their

calculators in the assessment centres. It may seem a small thing to

some, but we understood how important it was. CIMA saw sense in

both cases. OK, we didnt get our way on percentages, but we are

happy students will now receive their scaled scores.

The controversy over the ACCAs withdrawal of exam paper Q&As is

still rumbling on this month. Some PQs are really hoping the ACCA will

have a change of heart. It has given rise to a debate on how students

engender real change and influence policy in their body. Unlike

members, students appear to have little to no power, despite theirannual subscriptions and fees adding millions to the coffers of their

bodies. Without them and their money some of the bodies wouldnt be

able to function in the same way. Remember that the ACCA, for

example, has over 400,000 students. How does it, and any of the

others for that matter, ensure it is doing right by their fee-paying

students? It has been suggested that it is now time for proper student

representation. We have asked all the bodies how they engage with

their students and you will be able to see what they say in next months

PQ magazine. Bet you cant wait.

Graham Hambly, PQ magazine editor [email protected]

CONTENTS December 2015

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PQ have your say

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PQ Magazine Fourth floor, Central House, 142 Central Street, London EC1V 8AR | Phone: 020 7216 6444 | Email: [email protected]

Website: www.pqmagazine.co.uk | Editor/publisher: Graham Hambly [email protected] | Advertising manager: Polly Thrasivoulou [email protected]

Associate editor:Adam Riches | Art editor: Tim Parker | Subscriptions: [email protected] | Contributors: Robert Bruce, Prem Sikka, Carl Lygo,

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

Published by PQ Publishing PQ Publishing 2015

My plea to the ACCAI really think the ACCA needs to

rethink its new policy of not

publishing exam questions andanswers after each exam sitting

(PQ, November 2015).

At the very least it will need to

tell examiners to change their

advice to us all! I have just

looked at the ACCA P2 study

guide and it tells us to scan the

most recent past exam paper, as

this provides students with a

clear picture of how P2 will be

assessed and how the

exam is structured, as

well as the likely style

and range of

questions that you could see in

the real exam. Er we cant do

that because the ACCA doesnt

release them any more.It is already difficult enough for

students to trace back to where

they went wrong after spending

so much money on an exam

where you get no feedback and

now not even the exam paper.

I know we are supposed to be

moving to computer-based

exams next year, but isnt that

next year? We are still sitting the

same papers, just more

frequently. Why, then, am I and

my fellow students paying for a

system that isnt even here yet? I

can understand, sort of, why we

cant see the CBAs, but as the

PQ editor said in his commentary

last month we are only talking of16 section B questions a year in

most cases.

I was also wondering if the

examiners had perhaps said they

didnt want to/have the time to do

four answers a year. If that was

the case, couldnt the ACCA have

just paid someone to provide the

answers?

Please, ACCA, give us back

our wonderful free resource.

Name and address supplied

The editor says: Over to you,

ACCA

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

Hot & Tweet

email [email protected]

I just cant passI am writing to express my

dissatisfaction with my ACCA

results is there is anyone who

can help? I have done everything in

the book to pass my exams. I took

three weeks out of my holidays as

always, practised more past papers

than before, yet nothing seems to

work for me. I have two papers left,

but it feels like I am stuck at a

crossroads and dont know where

to turn. My marks for P7 and P5

have been 46% and 44%, and

44% and 30%. In my last exam I

sat just P7 and received 46%.

Does anyone have any

constructive advice that will help

me?

A worried student, by email

Thank you PQ!I am a PQ working in budgetary

control for a local NHS Trust and

recently won some e-books from

EW Publishing through PQmagazine. Thank you all for that.

The magazine is so user-friendly

and informative. All the articles are

digestible. Since I study P2 I track

Martin Jones articles on IAS and

IFRSs. Ive got three exams to go

P2, P6 and P7. Keep up the good

work.

Patrick Gallagher, by email

The editor says: Thanks for that,

Patrick. Just to give you and other

readers the heads up, we have a

piece from Martin in the next issue.

LinkedIn was red hot over the ACCAs move to no longer

publish the full exam papers and answers after each

sitting. Worryingly, quite a few students hadnt heard

about this. Most saw the Q&As as an invaluable

resource. One PQ felt that of all the things they do this

must be one of the most simple to administer. Another

said he thought the ACCA was trying to provide focus to help improve

pass rates. Some PQs were also worried that the move would have a

really big effect in developing countries where resources are scarce.

Tutors who mark papers will also have access to the questions, giving

them (and their students) an unfair advantage. Anything that creates a

two-tier system is not good in the long run, said one top tutor.

We have been very

busy tweeting away

@PQmagazine. We got the

ACCA September pass rates out

there first (on 19 October)

thanks for all the retweets.

One recent tweet that also

got you going was: Angry

women lose the ability to

influence people but angry men

can increase their power of

persuasion says research. That

makes me angry. No one knew

whether they should get angry

more or less often!

We have been tweeting from

a whole range of events this

month.

We were

at the

world-

famous

Abbey

RoadStudios

with the

CIOT, the ICBs bookkeepers

summit and CIMAs 2015

Lecturers Conference, and

collecting our Accountancy

Media of the Year award at

BAFTA, courtesy of AIA. There

is little doubt we get out and

about more than any other

accountancy magazine!

Follow us @PQmagazine.


7/40

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8/408 PQ Magazine December 2015

PQ news

Its that time of year, when surveys of

published accounts are produced andtheir findings dissected. The old

chestnuts have been discussed once

more. The length of annual reports is

still growing, despite valiant efforts tocut stuff out rather than pile it in.

Risk-averse lawyers are the main

reason for clutter in reports; secondto them come regulators. Not because

they keep asking for more, but

because preparers of accounts are

terrified of ditching something andthen getting a dressing-down from the

regulators for having done so.

Not that some of this is not richly

deserved. A report from the FinancialReporting Review Panel lambasts

companies anonymously (shame!) for

putting in accounting policies foritems or transactions that were

immaterial, no longer relevant or non-

existent. Quite hard, that last one.

They had a go at companies that hadput in accounting policies for hedges

that the companies did not enter into

then criticised firms that included the

translation of subsidiaries in foreign

currency where none existed. It is nowonder that some investors have said

that they really understand little of the

highly technical stuff that financialsector companies tend to stuff their

massive annual reports with.

Their suggestion was that firmscould happily print this stuff, but only

if they also provided one paragraph

up front that explained precisely what

it was all about. We are, sadly, backto the old clich of someone

apologising for writing such a long

letter because they had not had the

time to write a short one.

ROBERTBRUCE

The longand theshort ofannualreports

Robert Bruce is anaward-winning writer onaccountancy for The Times

ICAEW delays introductionof computer-based exams

Rise in studentsover-paying onstudent loans

The ICAEW has taken the sensible

decision of delaying the

introduction of the computer-based

exams following the news that a

rival is potentially acquiring its

preferred supplier.The ICAEW had chosen

learndirect as its partner, only to

discover that Pearson Vue wants to

now buy it. The Competition and

Markets Authority are reviewing the

proposed acquisition.

ICAEW executive director Mark

Protherough said: Our priority is to

maintain the rigour, structure and

quality of the ACA qualification to

ensure that our students continue

to develop the skills needed to

become ICAEW chartered

accountants.

He promised the institute would

keep students and training

providers updated when we know

more. Protherough also stressed

that work on the computer-based

exams delivery model will continue

unabated.

New figures from the Student

Loans Company show there has

been a 10% year-on-year rise in

student loan over-repayments,leaving more than 70,000

borrowers out of pocket by on

average 580. Figures obtained

via a Freedom of Information

request by accountancy firm RSM

show that borrowers over-repaid

more than 45.4m on income

contingent repayment (ICR)

student loans through their salary

deductions in 2013-14 a 10%

rise over the 41.4m recorded in

the previous year.

RSMs Lesley Fidler said: It

beggars belief that HMRC and theStudent Loan Company cant

develop a more efficient system

that takes the right amount of

money at the right time from

people wanting to repay their

student loans. Fidler felt for

some people monthly loan

deductions are a significant

proportion of their income, and

these overpayments could cause

real financial hardship.

The latest figures also show the

problem is getting worse rather

than better, she pointed out.

CIMA INTRODUCESOT SCALED SCORES

Stressed out

It seems accountants are

more vulnerable to emotional

problems than any other

profession. A study by AXA PPP

Healthcare found a third of

accountants had suffered

from a mental illness. A

sixth of chartered

accountants have taken

time off because of stress

and half said they felt they

were not supported to

manage their workload, with many

feeling isolated.

Goodbye Baker Tilly

Baker Tilly is no more, and

from the end of October staff at the

UK firm became part of one name

and one brand RSM. It has been

acknowledged that the

change will be full of

emotion, and as part of

the relaunch RSM has

announced its new

brand position The

Power of Being

Understood. The

rebrand coincided with RSM World

Day 2015, which is an annual

celebration. The new website can

be found at www.rsmuk.com.

New shared services body

CIMA and The Hackett Group

have joined forces to create a new

global professional body the

Association of Certified Global

Business Services Professionals.

Together they have also announced

a first-ever formal career

development programme for the

global business services and

shared services sector. This follows

the announcement of a strategic

collaboration between both

companies earlier this year.

CIPFA and PIPFA sign MoU

CIPFA and the Pakistan

Institute of Public Finance

Accountants (PIPFA) have signed a

memorandum of understanding

(MoU) to help advance high-quality

public financial management in

Pakistan. The MoU creates a basis

for collaboration between the two

bodies, who will explore

membership routes to give PIPFA

members the chance to join CIPFA.

Inbrief

CIMA has introduced scaled scores

into all its exam results, director of

examinations Steve Flatman told

the recent Lecturers Conference.From 1 November 2015, OT

results included a grade of pass or

fail, sectional performance

feedback and a scaled score.

Flatman said the OT scores will

range from 0 to 150, with a score

of 100 and above represents a

pass.

For the case study it is a little

more complicated. A scale score

will also range from 0 to 150, but

here a score of 80 and above

represents a pass. However, all

candidates also need to achieveone-third of available marks in each

competency (excluding leadership

at operational level).

The exams director felt that new

research showed that there wasnt

too much time pressure in theexams. Overall, 3.7% of OT exams

sat have more than one item

unanswered due to time constraints

(see page 25 for the percentages).

Another big announcement was

the change in calculator policy (see

page 25). There is not going to be a

ban on students taking their own

approved non-programmable

calculators into the Pearson Vue

assessment centres. At one time

there was a worry that students

would be forced to use the

onscreen version. See pages 25 and 26 for more

news from the recent conference.

A new suite of interactive self-study

guides to help PQs through the

ACCA qualification are now

available via the ACCAs website.

The association has launched the

guides for P1 to P7, completing the

full range of self-study support from

the Fundamentals Level through to

Professional level. The guides follow

other ACCA initiatives which include

live web-chat events, Q&A sessions

on Facebook and practice tests for

F1 to F4.

ACCA self-study guides


9/40

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PQ news

After the Enron scandal auditors came

under scrutiny for conflict of interests

arising out of the provision of

consultancy services to audit clients.

The increased fees dependency exerts

pressures to let the lying dogs sleep. It

creates the perception that auditors

are not sceptical enough and have

compromised their independence.

In the US, the Sarbanes-Oxley Act

2002 restricted the sale of some

consultancy services to audit clients.

The Big 4 mediated threats of furtheraction by divesting their consultancy

arms. Questions about conflict of

interests also arose after the 2007-08

banking crash. Banning the sale of

non-auditing services to audit clients

was resisted with claims that these

services were of lesser importance.

It has all changed again. The firms

have rebuilt their consultancy arms

and are pursuing new business. They

oppose a complete ban on the sale of

consultancy to audit clients and claim

that it does not impair auditor

independence. Little evidence is

provided to support such claims. Auditworking papers would shed some light

on auditor scepticism, but they are not

publicly available. If the provision of

other services does not impair auditor

independence then there is no reason

to restrict the delivery of audits to

accountancy firms. Tesco, Marks &

Spencer and others could employ

accountants and enter the auditing

market. The pursuit of consultancy

income is likely to be accompanied by

calls to end accountants monopoly of

the external audit function.

PREMSIKKA

Whatprice anindependentaudit?

Prem Sikka is professor

of accountancy at the

University of Essex

Blooming inBloomsbury

All ACCA P2 sitters have to look

beyond their study texts and

revision courses, says the examiner

in the September report.

A well-prepared student would

have reviewed relevant websites,including those of the standard

setters (IASB), the profession, and

ACCA to maintain their knowledge

and keep up-to-date with topical

issues. One question normally

focuses on a topical issue.

The examiner stressed that the P2

exam requires candidates to display

more than just rote knowledge of

accounting standards, and it was

emphasised that professional

accountants need to be able to

advise clients with both the correct

accounting treatment and also the

reasons for this treatment.

The P3 examiner ventured that

time pressure in the exam is not

caused by the paper itself butrather the result of the candidates

unfocused response. Too many

sitters provide lengthy explanations

of theoretical models. Time could

also be saved if PQs avoided

quoting lengthy detail from the case

study scenario.

For our take on the September

Examiners Report go to page 30.

Go to the PQ website for a

breakdown of what subjects were

covered in the September papers.

ACCA examiners report onfirst-ever September sitting

Bookkeepers should have no fear

JOB OF

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Top jobs like these dont come

around every day! So go on to

www.pqjobs.co.uk for all the

information you need to apply.

Double winner: PQ magazines reigning Distance Learning Student of the

Year Esther Alum recently picked up another award from her own body the AIA. The audit scholarship student was the star of the AIA awards

held at BAFTA in London. She is now their Student of the Year

Bookkeepers do not need to fear the rise of automation,

claims Michael Wood, co-founder of Receipt Bank.

He told a packed ICB Bookkeepers Summit that

bookkeepers have the best relationship with their clients,

and even when the software takes over some of the more

menial tasks there will still be a need for an administrator

and that will be the bookkeeper.

He told the 700 delegates they need to move all their

clients onto the cloud. Applications there are only going to

get better and better. You also have to embrace

automation and get yourself ahead of the curve. Wood

had two other nuggets of advice move to fixed fees and

get closer to your client, so you understand what they

need before they ask for it!Wood: bookkeepers shouldmove to fixed fees

ACCA PQs in London have a new

provider on the block, just around

the corner from Holborn tube. From

January 2016, Bloomsbury

Accountancy is planning to offer

part-time evenings classes in all 16

ACCA papers thats F1 to P7.

Classes will run from 6.15pm to

8.45pm on Mondays to Fridays atBloomsburys Southampton Place

HQ. See page 17 for more on this.

The pass rates for the September

ICAEW professional exams are in,

and the Business Strategy paper

sitters excelled themselves this time

around with a 92% pass rate.

Financial Management stood out,

but only because it was the only

paper that didnt have a pass rate

above 80% it came in at 79.7%.

In all, 3,440 students sat the

September 2015 session, with

6,548 papers being attempted.

Passing the professional testICAEW PROFESSIONAL EXAM RESULTS

Sep 15 Jun 15

Audit & Assurance 87.5% 82.0%

FA & Reporting 83.2% 81.6%

Tax Compliance 83.9% 81.7%

Business Planning Tax81.3%

78.9%

Business Strategy 92.0% 91.8%

Financial Management 79.7% 81.7%

Some 79.2% of PQs who sat three

papers passed them all. This

compares with 75.3% of sitters who

passed the one paper they

attempted. There were 451 PQs

who didnt pass any of the papers

they sat at this sitting.

PwC students dominated the

prizewinners list with top marks in

three of the six papers.

Social mobility worksfor Grant ThorntonOne in five of the 300 trainees taken

on by Grant Thornton in 2015 would

not have been considered prior to

the firm dropping its academic

barriers two years ago, according to

CEO Sacha Romanovitch. Unveiling

the firms results, she said Grant

Thornton remained committed to

the industry-wide social mobility

initiative Access Accountancy.

Revenue at the firm rose to 521m

with profits before tax standing at

82m. That gave a distributable

profit per partner of 398,00.


11/40



PQ news

ACCA EXAM RESULTS SEPTEMBER 2015 WORLDWIDE

Sep 15 Jun 15 Dec 14

F5 Performance Management 39% 37% 44%

F6 Taxation 47% 50% 43%

F7 Financial Reporting 44% 40% 43%

F8Audit & Assurance 42% 39% 45%

F9 Financial Managemt 35% 41% 40%

P1 Professional Accountant 48% 49% 52%

P2 Corporate Reporting 44% 48% 50%

P3 Business Analysis 45% 46% 48%

P4Adv Financial Managemt 36% 36% 33%

P5Adv Performance Managemt 30% 28% 30%

P6Adv Taxation 45% 34% 38%

P7Adv Audit & Assurance 29% 40% 40%

The impact of lower oil prices on the

world economy was brought home to

me recently when launching a new

initiative with the Malaysian Institute

of Accountants. An austerity drive in

Malaysia, brought about by oil price

falls, has led to a freeze in the intake

of public servants. The Malaysian

Employers Federation (MEF) has

expressed grave concern about the

plight of graduates entering the jobs

market; there are at least 200,000

who are unemployed and the numberis expected to rise. The decision to

freeze public servant openings means

that 15,000 fewer students will leave

university with a public sector job.

Members of the MEF have also cut

a further 10,000 graduate openings in

the first half of 2015. A big initiative

in the area is the development of the

ASEAN Economic Region, which

would result in free labour movement

between ASEAN nations. This is seen

as a major challenge and opportunity

for local graduates. At the same time,

the government in Malaysia estimates

an additional 60,000 accountants aregoing to be needed for the local

economy between now and 2020. Low

levels of English language proficiency

were said to be holding back many

graduates and leading bodies such as

the Malaysian Professional

Accountancy Centres have responded

by introducing English language

courses to help graduates undertaking

professional exams. While Malaysia

rebalances its economy towards the

private sector, it hopes for movement

in world oil prices.

CARLLYGO

Devastatingimpact ofthe falling

price of oil

Professor Carl Lygo ischief executive of BPP

The first-ever September ACCA

exams saw a mixed bag of pass

rates, but it is way too soon to see

any real trends developing.

What is clear is that the P7 and

F9 exam pass rates slumped in

September to 29% and 35%

respectively, when compared with

the June stats (see table).

Meanwhile, the P6 pass rate shot

up by 11 percentage points and F7

by four percentage points. The pass

rates of P1, P2 and P3 also dipped

slightly, and students and tutorsneed to keep an eye on these pass

rates over coming sittings.

Overall, when compared with the

summer exam sitting five paper

pass rates went up, six went down,

and one remained unchanged.

Some 40,704 students across 15

countries took the opportunity to use

September sitting

results are mixed

Smart drugs do work

FRC acts on

complaints

PwC and one of its former

accountants, Stephen

Harrison, are to be

investigated over their role in

the auditing of social housing maintenance

firm Connaught. The Financial Reporting

Council has also issued a formal complaint

against Stephen Hill, Connaughts group FD,

and David Wells, the deputy FD responsible for

treasury management. The complaint is that

their conduct fell significantly short of the

standards reasonably to be expected of a

member or member firm of the ICAEW. Hill

and Wells have also allegedly breached the

fundamental principles of integrity. Connaught

went into administration in 2010 owing more

than 200m to creditors. Meanwhile, PwC has

settled a 1.6bn auditor negligence claim by

subprime lender Cattles. The firm said PwC

should not have signed off the 2006 and 2007

financial statements of the group. Final terms

of the settlement have not been disclosed

Steel closures: the repercussions

Recent steel plant closures are a

crisis for the UK economy that

cannot be underestimated, says

KPMGs Stephen Cooper. He said

that the metals sector is facing a

bigger threat than in 2009 when

the global financial meltdown sent shockwaves

through the industry. News of up to 1,200 job

cuts in Scunthorpe and Scotland followed the

closure of the SSI steel site on Teesside

(pictured) with the loss of 2,200 jobs.

Simply the best

EYs school-leaver programme has been

named best in the UK in the 2015 Rate My

Apprenticeship (RMA) top employer ranking

(up from ninth last time around). EY offers a

five-year programme with a

hands-on client experience and

a starting salary of up to

21,500, plus the opportunity

to study for two professional

qualifications. Applications for

the 2016 EY School Leaver programme are

now open and school-leavers can apply online.

this new session, with many

opting to sit just one paper. The

ACCA had been forecasting for

30,000, so will be pleased with

the take-up.

ACCAs new director of learning,

Mary Bishop (pictured), said: We

are delighted with the response to

the first of our additional

exam sittings. The number of

candidates taking exams in

September far exceeded our

expectations, demonstrating

there is a real demand from

students and employers for our new

exam sittings.

Top cats: Institute of Legal Finance & Management award

winners smile for the camera. They are, from left, Wendy

Mayers, Marian Yates, Sally Siggers and Amie Lawrence

The drug Modafinil, which enables people to

function with less sleep, also works as a smart

drug, making the brain work better, say researchers.PQ magazine has highlighted the fact that

Modafinil is already used off-prescription by

students cramming for exams and by those working

long hours.

The study, by the University of Oxford and

Harvard Medical School, found the drug helped

non-sleep-deprived users to improve their decision-

making and planning. With minimum side-effects,

the study raises ethical question as to whether

society wants people to be able to enhance their

brain power with chemicals. Interestingly, Modafinil

is approved in the US for shift-work sleep disorder

as it helps reduce accidents.

One expert said that there could be issues around

the potential access to such drugs depending on

individual wealth.


13/40

FULLRECOGNITION.

Whether youve decided not to complete your

chartered studies, or youre just taking a break,

AAT will provide the recognition you deserve forthe hard work youve put in so far.

As a professional member of AAT you can use

the letters MAAT after your name - it says more

about you than PQ ever could.

PROFESSIONAL

MEMBERSHIP

Take the next step in your career:

+44 (0)20 3735 2401 aat.org.uk/joinusAAT is a registered charity. No.1050724

Make your hard work pay off with

AAT Professional Membership


14/40

We understand regular PQ contributor

Philip Dunn also had an influence on

you.

Philip is a friend and keen Yorkshire

cricket supporter, and I speak to him on

a regular basis. After Id explained how I

felt about my years after cricket, he

suggested that I should get back into

studying and think about the

accountancy courses the AAT offers to

get me on the accountancy ladder. All I

can say now is that I feel its the best

decision Ive made regarding my future.

Where are you with your studies? How

do you find time to study?

Im currently studying Level 2 AAT. Ive

completed all but one chapter of this

course (I should have it completed by the

time this article is published). I feel that

to get where I want to be in accountancy

I need to start here to grasp the basic

principles that will give me a solid

foundation to build on. The Kaplan Home

Learning course has allowed me to study

part-time in and among all my cricketing

commitments, and sit my exams when I

feel Im ready. No pressure! Ive found it

immensely stimulating and refreshing. I

also feel its brought an element of

14 PQ Magazine December 2015

PQ profile

Tell us a bit about your cricketing

achievements.

Im lucky enough to have been a

professional cricketer for the past 12

years, representing three county teams

Yorkshire, Nottinghamshire and currently

Sussex CCC. Ive also represented

England in all three formats of the game

and I was lucky enough to be part of a

T20 World Cup winning squad inBarbados (in 2010), an Ashes winning

squad in Australia 2010-2011, and to

have participated in the 50-over World

Cup competition that was held in India in

2011.

You had to choose between sport and

study when you were younger.

Cricket has been a huge part of life since

the age of 17, when I turned professional

and left my studies behind. But I have a

passion for studying and studied

pharmacology for a year at the University

of Bradford prior to being selected torepresent England.

Your father is an accountant. How much

influence has this had on you?

Yes, my father is an accountant. After

coming to this country and studying

accountancy he worked for a business

and soon after opened his own practice.

This is what allowed me to not only

receive the best education possible but to

also participate in sports and not worry

too much about the future.

What prompted you to start studying

accountancy?

I recently turned 30 and as an

experienced campaigner I know Im

coming towards the back end of my

cricket career. At best I may have six or

seven years. I had to start thinking about

plans for the future. Where would my

income come from? Id be naive to think

all will be OK. Hopefully, six years more

cricket will give me time to plan and

prepare for my future. My father came

over from Pakistan and built his business

from scratch, so it only feels right to be

able to continue to take it forward. I also

know this would make him immensely

proud. His hard work allowed me to

follow my dreams and play cricket

without fear of failure, and I feel I owe it

to him to study hard so he can enjoy his

retirement years.

Ajmal Shahzad was the first British-born Asian cricketer to play cricket for Yorkshire. Since then he has played

Test, one day and T20 cricket for England. But he has another preoccupation studying for his AAT exams

The more I study and progress,

the more I enjoy it

freshness to my cricketing game. It allows

me to switch off away from the game and

concentrate on other goals. Passing

assessments on the Level 2 AAT course, I

feel Im getting closer to my end goal and

that motivates me even more. The more I

study and progress, the more I seem to

enjoy it!

What does the future hold?

Times have changed 10 years ago

studying anything other than cricket was

seen as unnecessary energy expenditure!

When I was coming through the

cricketing system, school, college,

university was seen as a waste of time.

Cricket was everything. But as time has

gone on, and the financial climate has

changed, it seems we are getting paid

less and everything costs more! Playing

professional cricket is a wonderful

occupation, but if you dont have a plan

for your future after cricket, then life can

quickly become very difficult. A

cricketers wage doesnt come close to a

professional footballers. For that reason,

my peers in cricket not only appreciate

and support what Im doing, but are also

proud of me. Likewise my family and

friends. PQ

Howzat! Shazad in action for England

Playing

professionalcricket is a

wonderful

occupation, but if

you dont have a

plan for your

future then life

can quickly

become very

difficult


15/40

They say nothing in life is free, but to help you

get ahead with your studies, First Intuition are

offering new students a free* CIMA module.

Find out why FI is the only college to have wonPQ Magazine's College of the Year award

three times in the past five years.

*First Intuition is offering one free course to any student who has not previously studied with First Intuition. The course can be a classroom or online course

for any core CIMA module (Case Study courses not included). This offer applies to 2015 courses booked with the Bristol, Cambridge and London centres.

www.fi.co.uk

020 7323 9636

Birmingham Brighton Bristol Cambridge Chelmsford Dublin London Luton Maidstone Manchester Reading


16/40

Do you have that X factor? Perhaps

you are struggling to make your CV

stand out from the hundreds of other

CVs hitting employers inboxes? Well, one sure

way to get to base camp would be to become

the 2016 PQ of the Year!

We also understand that sometimes you need

to blow your own trumpet as no one else will, so

we actively encourage you to nominate yourself!

But, remember, there isnt just one award up

for grabs. How about nominating someone who

really helped you get to where you are now a

lecturer, or maybe your mentor/training

manager?

All we need is 250 words, plus any

supporting evidence, on why your nominee (or

you) should be shortlisted for one of our

categories. You can download our application

form directly from the website at

www.pqmagazine.co.uk just go to the pq

awards bar and click to download the form. Or

email us your entry directly, making it clear

which category you are nominating for.

Once you have it all ready send it to

[email protected], or you can post your

wise words to: The Editor, PQ magazine, 4th

Floor, Central House, 142 Central Street,

London EC1V 8AR. Deadline for nominations is

Friday 18 December 2015.

So come on all you PQs out there, we want to

see you at the Caf de Paris in February.

Remember, if you get on our shortlist we will

send you an invite to the best night out in

accountancy. PQ

16

PQ Awards 2016

PQ Magazine December 2015

Stand out from the crowd

THE CATEGORIES

PQ of the Year

NQ of the Year

Distance Learning Student

of the Year

Student Body of the Year

Training Manager/WorkplaceMentor of the Year

Accountancy Team of the Year

Accountancy College of the Year

Public Sector

Accountancy College of the Year

Private Sector

Lecturer of the Year

Public Sector

Lecturer of the Year

Private Sector

Innovation in Accountancy

Study Resource of the Year

Accountancy Body of the Year

Accountancy Personality of the Year

Editors Special Award

Online College of the Year NEW

Best Use of Social Media NEW

OUR SPONSORS

No awards night is possible without the sponsors. And we have only the best

Do you know someone who deserves one of our awards? Well get nominating then perhaps its you!

Who will it be in 2016? Some top names have graced the PQ awards, including (clockwise

from top) Paul The Sinnerman Sinha, who hosted in 2015; Shaun Barry from EastEnders

Williamson; Stephen K Find the Funny Amos; and Richard Donkey Blackwood


17/40PQ Magazine December 2015 17

Awards 2016 PQ

I

nnovation in Accountancy is one of the

more hotly contested categories at the PQawards, and 2015 was no different. The

winner was the ACA Intensive Programme

launched by BPP and KPMG.

We spoke to Sarah Mackey, who helps run the

programme at BPP. She described the scheme

as very different from anything out there at the

moment in accountancy. It works a bit like a law

course; students do three years at university,

followed by a years postgraduate study, all

before stepping into work full-time. The

programme allows KPMG PQs to complete most

of their ICAEW qualification within 10 months of

joining the firm. After that students have just the

case study to complete.A real innovation comes from replacing the

ICAEW professional level with a graduate

diploma in accounting (GDA), developed by BPP

University. The diploma includes a bespoke

theory in practice module to help trainees

bridge the gap between the classroom and the

workplace, although these fast-track students do

have two work placements in the business, in

February and August.

In the first year just 60 students went down

this route. Last year that figure grew to 100 and

this year it will be 155. And these numbers

could increase, suggested Mackey.

The course fits in well with the changing

resource demands at KPMG. It needs people to

be upskilled quickly because of the changing

nature of work we are talking automation and

shared services here.

Students, too, love the fact that they can just

focus on their exams.

KPMG has created a USP with this innovative

programme, of that there is no doubt, and our

judges agreed. What they really liked was how

well the programme was supported by BPP

tutors, who share their experience (they are all

qualified chartered accountants) with the PQs.

Each trainee is supported by a performance

coach, who provides proactive support for both

high performers and those that are struggling. It

is hardly surprising that the pass rates are

regularly 95%-plus. PQ

TIME TO INNOVATEWe take a look at last years winner of the Innovation in Accountancy category KPMG and BPP

KPMGs Michael Walby withICAEW director of learning

Mark Protherough and

BPPs MartinTaylor


18/40

Pass rate: 73%

Technical difficulty: 8/10

Weighting of calculations: 65% (approx)

Weighting of discursive

elements: 45% (approx)

Exam technique: 9/10

The syllabus .

The F1 exam builds on the knowledge acquired

in Certificate level, in particular C02. F1 covers

the regulation and preparation of financial

statements. F1 will provide the competencies

required to produce financial statements for

individual entities and for groups using

appropriate IFRS. This knowledge will be used as

a basis for more complex adjustments and group

structures as you go on to F2. In addition, F1gives insight into how to effectively manage cash

and working capital, with the final part of the

syllabus focusing on the basic principles of

business taxation and the application of these

principles.

The knowledge you gain in F1 will be

developed further in F2 and F3 and as such you

should ensure you have a good understanding of

all of the areas of the syllabus before moving on.

The syllabus is broken down into four areas:

ARegulatory environment for financial

reporting and corporate governance

(10%): This introduces students to the idea of

regulations for financial reporting and requiresstudents to explain and understand the need for

regulation in financial reporting when dealing

with incorporated entities. Students should be

able to demonstrate an understanding of the

roles and structures of key bodies such as the

IFRS foundation, the IASB, the IFRS Advisory

Council, the IFRS Interpretations Committee and

the IOSCO. This area also incorporates the duties

of the external auditor and the introduction of the

audit report. Students will also need to have a

good grasp of the key principles of corporate

governance and the need for corporate

governance regulation. They will be expected to

understand the approaches to corporate

governance in primary markets around the

world, in particular the US and UK.

BFinancial accounting and reporting

(45%): This part builds on your knowledge

from C02 and will be used as a base to build

upon when moving on to F2. An understanding

of this area of the syllabus is fundamental to

students when preparing for the F1 exam but

also when preparing for the case study.

Students will need to demonstrate a good

understanding of and be able to generate

appropriate accounting entries for each of the

examinable adjustment IFRS/IAS such as:

IFRS 5 Non-Current Assets Held for Sale and

Discontinued Operations.

IAS 21 The Effects of Changes in Foreign

Exchange Rates.

IAS 12 Income Tax.

IAS 19 Employee Benefits.

IAS 16 Property Plant and Equipment.

IAS 23 Borrowing Costs.

IAS 38 Intangible Assets.

IAS 40 Investment Property. IAS 20 Government Grants.

IAS 36 Impairment of Assets.

IAS 2 Inventories.

IAS 10 Events After the Reporting Period.

Students also need to be able to produce a

set of consolidated statements in accordance

with IFRS 10 and IAS 28.

Although they will not be asked to produce a

set of financial statements a working knowledge

is required of producing single company and

consolidated financial statements both for

individual elements being tested in OT and in

preparation for the case study.

CManagement of working capital, cash and

sources of short-term finance (20%):

F1 requires that students should be able to

describe the sources of short-term finance

available to an entity as well as opportunities for

cash investment to be made when available.

Students should also demonstrate an

understanding of how to evaluate the working

capital position of an entity with supporting

calculations such as analysis of trade receivable

days, trade payable days and inventory holding

period ratios. It is likely that the calculation of

these ratios will form part of the OT exam.

DFundamentals of business taxation

(25%): This area covers taxation both in

the theoretical and computational sense.

Students need to be able to discuss the types of

taxation that apply to an incorporated entity,

including the main features of direct and indirect

taxation. They should demonstrate an

understanding of the differences between tax

avoidance and tax evasion. PQs will also be

required to produce computations for corporateincome tax as well as for capital tax and should

ensure that they are able to do both.

Sitting the F1 exam .

The F1 exam, as with all objective test exams, is

a mixture of multiple choice, multiple response,

drag-and-drop style questions and selecting from

drop-down menus. Students will also be

required to type in numerical answers.

Before the exam: Practise as many questions as

you can prior to the exam. Practise them under

exam conditions, to time and without notes. Not

only will this ensure that you have learnt and

understood the syllabus and how different topicsmight be tested, it will give you the confidence to

tackle the questions on the day. As with so many

things in life, practise makes perfect! The OT

questions are notorious for having one word in

the question that will change your entire thought

process, so you must prepare yourself for the

way the questions will be asked.

Revise the whole syllabus: All of the syllabus

learning outcomes will be tested in the OT exam.

It is therefore imperative that you study the

whole syllabus and do not selectively learn.

During the exam: Read the question first and

read it carefully there are a range of different

types of questions and it is easy to assume thatthe question says something when it actually

requires the opposite. For example, you may

assume the question asks you to select the

statements that are true when it actually asks

you to select the statements that are false.

Timing: You have 90 minutes to answer 60

questions, 1.5 minutes per question. Some

questions will take a little longer but this should

balance out with those that can be answered

more quickly. However, it is important to make

sure that you keep on track throughout the

exam. Checking the clock to make sure that you

have answered another batch of 10 in no more

than 15 minutes is a way of doing this.

Flag for review: The software enables you to

flag questions for review at a later stage. As you

work through the questions and come across

ones that you are not entirely sure about or

perhaps you have lost your way in the

calculations and are wasting too much time, flag

them for review. You can then revisit these

questions quickly and easily at the end.

Particularly with calculation questions, try not to

erase the workings you have done previously

from your whiteboard notepad so that you dont

have to waste time re-doing them later.

Guess! There is no negative marking and so if

you are unsure of the answer at least guess. A

good way to do this with multi-choice questions

is to eliminate any answers that you know are

not correct and then make a choice from the

remaining two or three that you do have.

Lee-Anne Shema, F1 Content Specialist,

Kaplan Financial

PQ

18

PQ CIMA F1 paper


Lee-Anne Shema explains how

you can to pass the Financial

Reporting and Taxation paper

A NUMBERS GAME


19/40



PQ ACCA exam tips

P4

Investment appraisal using

adjusted present values/net present

values or capital rationing.

Valuation of business using free

cash flows and price-earnings ratio

methods, defensive tactics or cash

offer or share exchange.

Cost of capital using principles of

Modigliani & Miller prepositions or

geared and ungeared betas.

Hedging exchange rate risk usingforward contract, futures contract

and options contract.

Capital reconstruction schemes

designing a capital reconstruction

scheme or assessing the success of

a given scheme.

Real options option to abandon,

expand or delay using the Black-

Schole option pricing model.

P5

Balanced scorecard.

Non-financial indicators.

Assessing impact upon

performance management systems.

Value management systems.

Technology and the change of

PM systems.

P6

IHT with the death estate

including BPR and APR and

lifetime gifts into a trust and gifts

with reservation. Domicile including

deemed domicile.

Group question involving losses,

group relief and consortium relief.

Transfer pricing, overseas branch

vs overseas subsidiary.

Partnership with a partner joining/

leaving with opening year rules,

choice of accounting date and

conditions for a change of

accounting date.

Personal pension schemes versus

occupational pension schemes.

SEIS, EIS and VCT conditions and

tax advantages.

Capital gains tax including

entrepreneurs relief, shares

matching rules.

SEIS reinvestment relief.

Group registration for VAT and

overseas aspects of VAT.

Purchase of own shares.

Share options schemes taximplications.

Ethics.

P7

Audit risk/risk of material

misstatement.

Matters and evidence (accounting

issues and audit work on those

issues).

Audit report scenarios/

implications.

Discussion of benefits of new

style audit report.

Assurance on prospective

financial Info. If sitting International stream,

audit of public sector performance

information.

Threats to independence.

Advertising.

Reliance on work of internal

audit.

Know your ISAs, especially more

interesting ones such as 250, 402,

540, 550, 560, 600, 720.

If sitting UK Stream, insolvency.

First Intuition.

F5

Lifecycle costing.

Environmental accounting.

Limiting factors.

Relevant costing.

Flexed budget and budgeting

discussion.

Divisional performance.

Mix and yield variances.

F6

Employment/self-employment.

PAYE.

Opening years and change of

year-end for sole traders.

Capital allowances.

VAT default surcharge and VAT

invoice content and annual

accounting.

CGT: Entrepreneurs relief,

chattels.

IHT lifetime and death transfers.

F7

Extracts from single company

accounts, including non-current

assets, taxation and IFRS 15.

Interpretation of accounts

including a statement of cash flows.

Consolidated SFP and/or SPL with

associate, PUP and fair value

adjustments.

F8

Ethics.

Audit risk and auditor response

(including ratio calculations).

Internal control deficiencies,

F9

WACC, maybe with capital

structure theory thrown in.

Investment appraisal NPV with

working capital and tax, possibly

also asset replacement.

Risk with forward market hedge

and money market hedge and a bit

of yield curves.

Working capital management with

inventory and cash, overtrading.

Theory questions possibly onEMH, sources of finance (including

Islamic finance), economics.

P1

Rules vs principles.

Importance of stakeholders.

Internal control disclosure.

Risk diversification.

AAA model.

P2

Q1: There are only three

possibilities: p/l or b/s or cfs, so to

ignore one seems foolish. However,

given there was a p/l in September

it does seem reasonable to focus

less on that. Perhaps 20/40/40.

Q2 & 3: There are subtle

differences between these two. But

essentially both require a discussion

of key FR applied to a scenario.

Expect the usual suspects

goodwill, groups, NCA, revenue,

HFS, EARP, FI and so on.

Q4: Only in the last question does

tipping become meaningful. Here

are some hot current issues:

revenue, financial asset impairment,

equity accounting, changes, SMEs.

P3

Strategic analysis.

Strategic choice and financial

implications of a strategic choice.

Evaluating software and controls

over IT.

Project management.

Here are our tips,

courtesy of top tutors

from across the land, for

the December sitting of

the ACCA exams

LSBF.

F5 Lifecycle costing with

environmental accounting.

Relevant costing/decision trees.

Budgeting theory/flexed budgets.

Mix and yield/sales mix and

quantity variances.

Divisional performance (ROI, RI).

F6

Q1: Capital gain tax question with

shares including bonus/rights issue

and chattel rules or maybe

corporation tax with rollover and

holdover relief.

Q2: VAT deregistration due date,surcharges, accounting for VAT, the

annual accounting scheme and

contents of a VAT invoice.

Q3: Inheritance tax including

lifetime gifts into a trust, the

diminution in value principle and

the death estate.

Q4: Property business profits/

losses or maybe a sole trader, with

adjustment of the trading profits

and opening or closing year rules.

Q5: Income tax computing

income tax with employment

income with car benefit, fuel benefitand accommodation benefit,

interest income/dividend income.

Q6: Calculating corporation tax

possibly including a straddling CAP

or maybe a long period of account

with capital allowances and possibly

adjustment of a trading loss with

loss relief and group relief.

F7

Expect one of the 15 markers to

be on ratios and interpretations with

(possibly) adjustments to be

reflected before a valid comparison.

Expect the big 30-marker and the

15-marker to be on consolidations

and published accounts with

standards.

F8

Ethics, threats to independence.

Confidentiality, when to breach.

Audit risk and response, written

scenario.

Internal controls objectives/

procedures/tests on sales cycle.

Inventory and stocktaking

controls and substantive tests.

Substantive tests on receivables.

Advise company on improving its

governance.

Role/benefits of audit committees.

Roles of internal audit and

comparison with external audit.

Know your ISAs, especially 210,

250, 260, 450, 560, 570, 720.


21/40

implications and recommendations

(revenue and receivables or payroll

cycle).

Audit evidence and substantive

testing.

Subsequent events, written

representations and going concern.

Modified auditors reports.

F9

Discussion of the economicenvironment and the impact on

interest and exchange rates.

Working capital management

receivables and payables plus

operating cycle.

Investment appraisal and cost of

capital.

Business valuations.

Risk management (currency risk

calculations).

P1

50-mark scenario question to

include: ethics, governance, single

v. two-tier board structures, alsocorporate social responsibility.

Optional questions to include

internal controls, governance

committees and directors

remuneration, business risks,

integrated reporting and

environmental reporting.

P2

Q1: group question on foreign

subsidiary. Will contain a variety of

non-group topics, too.

Ethics.

Revenue recognition or leases

current issue. Deferred tax

Share based payments.

Pensions.

P3

Environmental analysis, people

with financial analysis.

Project management.

Strategic action.

Information technology pricing

strategy.

P4

International investment appraisal

techniques focusing on risk

management tools.

Impact on WACC following

hedging of interest rate risk.

Company valuation based

scenario, possible MBO finance to

structure.

Adjusted present value with link

to real options and Black Scholes

option pricing model.

P5

Critique an existing performance

management system and the

performance hierarchy.

Transfer pricing.

Activity based principles.

Performance management

models (performance pyramid or

building block model).

Value based approaches to

performance management.

Effective use of information

systems.

P6

Business property relief.

Use of second spouse nil rate

band.

Related property.

Groups of companies, trading

and capital losses.

Double tax relief for companies.

De-grouping charges. Incorporation relief.

Furnished holiday lets.

VAT partial exemption.

Appeals and the four-track

tribunal system.

Benefits in kind or extra salary,

income tax and national insurance

implications.

P7

Business risks in a scenario.

Identifying ethical and other

professional issues in a scenario.

Matters to be considered and

audit evidence for a couple of coreaccounting issues.

Money laundering.

Insolvency issues.

BPP.

The full unexpurgated guidance

from BPP for this Decembers

sitting can be found in the PQ

magazine study zone on our

website. Here are some highlights

F6

Employment benefits.

Property income.

Relief for pension contributions. Adjustments to profit to arrive at

trading income for both companies

and sole traders.

Capital allowance computations.

F7

Q1 & Q2: One likely to be an

interpretation or statement of

cashflows; the other may be a

consolidation question if Q3 is not a

consolidation.

Other possibilities conceptual

framework, intangible/tangible

assets and impairment, provisions

and contingencies, revenue and

grants, financial instruments

discontinued operations/assets held

for sale or earnings per share.

Q3: could be a single entity or a

consolidation (statement of profit

ort loss and other comprehensive

income and/or statement offinancial position).

Statement of changes in equity,

statement of cash flow extract,

earnings per share calculation or

linked written topic.

Consolidation question with

adjustments, eg fair values,

deferred/contingent consideration,

PUP on inventories/PPE, intragroup

trading and balances, goods/cash

in transit.

F8

Ethical threats and safeguards.

Corporate governance andinternal audit.

Audit planning.

Materiality.

Audit procedures (especially

substantive procedures).

Audit finalisation and audit

reports.

Audit risk.

Internal control and audit

procedures (both substantive

procedures and tests of controls).

F9

Calculations on improvements to

receivables management (eg earlysettlement discounts and factoring).

Weighted average cost of capital

calculations (including its

component parts).

Ratio analysis to support

financing decisions.

NPV calculations.

P1

Corporate social responsibility

strategy check out recently

published article.

Ethical and other CSR theories

apply them to the scenarios.

Use of risk and governance

board of directors, remuneration

and reporting.

P2

Preparation statement of financial

position and/or a group statement

of profit of loss and other

comprehensive income or

statement of cash flows including

a foreign subsidiary, discounted

activities, disposals and/or

acquisitions.

Linked accounting adjustment

and social/ethical/moral aspects of

corporate reporting.

Q2 &Q3: deferred tax, foreign

currency transactions, financial

instruments, pensions, share-based

payment, non-current assets

(recognition and/or impairment of

tangible and intangible assets),

borrowing costs, the effect of

accounting treatments on earnings

per share to ratios.

Other question will test a range of

standards such as accounting

policies and the framework, leases,

grants, IFRS for SMEs,

reorganisations, provisions, events

after the reporting period and

related parties. Q4: revenue recognition, revision

of the conceptual framework,

regulatory issues over adoption and

consistent application of IFRSs,

implementation issues, application

of the definition of control and

significant influence (equity

accounting) , improvements in

performance measurement,

classification in profit and loss vs

OCI, integrated reporting.

P3

Value chain.

Critical success factors and KPIs. Role of the corporate parent,

including BCG matrix/Ashridge.

Managing strategic change,

including force field analysis.

P4

Q1: expect core subjects such as

project appraisal (domestic or

overseas), business valuations (cost

of capital calculations), and risk

management (hedging).

Q2-4: risk management (currency

or interest rate), business

re-organisation, real options.

P5

Q1: performance management

frameworks (building blocks model

or the balanced scorecard). Also

need to master transfer pricing,

ratios, analysis of quality related

costs, ABC.

Q2-4: common tested areas

include quality management,

information reporting (CSFs and

KPIs), the application of strategic

models (such as PEST, Porters 5

forces, the Value Chain), HR

frameworks (reward & appraisal

systems), risk management and

environmental management

accounting.

P6

These are on the PQ magazine

website (www.pqmagazine.co.uk).

P7

Test planning.

Risk assessment.

Evidence gathering and practice

management.

Non-audit engagement, such as

prospective financial information

(PFI) or due diligence.

Audit completion.

Consolidated groups.

Audit evidence and financial

reporting issues.

Quality control and reporting,

including completion and

communication. PQ

PQ Magazine December 2015 21

ACCA exam tips PQ

These tips should

only be used in conjunction

with proper study. We cannot

guarantee that these topics

will appear in the actualexam as we have not seen

the exam papers. Examiners

are not predictable so it is

vital that all core syllabus

areas are revised fully.

HEALTH

WARNING


22/40

IAS 21 The Effect of Changes in

Foreign Exchange Rates.

Remember, each of the section B

mixed transactional questions can

involve up to six different transactions.

Too much time is spent making notes

and not enough on question practice

It is now time to stop reading through

files, highlighting and making notes. It is

essential to practise with past questions.

Hopefully, you have been working past

questions throughout tuition. On exam

day you will get an answer booklet

blank pieces of paper, the questions and

a ticking clock. You must practise try

to answer the questions on blank pieces

of paper. After you have given it your best

shot, and not before your time is up (1.8

minutes per available mark), then review

your answer. If you have found a

weakness go back to your file, review the

topic and try another question.

Only with question practise will you be

successful. Imagine you were training for

a marathon. Would you study books

about the route and read explanations of

how to run a marathon? No, you would

put your trainers on and get out there

22 PQ Magazine December 2015

PQ ACCA P2

Corporate Reporting is surely

considered to be thecore ACCA

paper. It is, after all, the paper

where we get asked for things likebalance sheets (statement of financial

position) and cash flow statements

(statement of cash flows). It is a paper

about accounting! So why did 66% of

entrants who are after all very near to

being qualified accountants manage to

fail the equivalent paper in September

2015? Why do students describe it as

the beast And what do you need to do to

pass it in December 2015?

Too much revision time is spent on the

topic of consolidation

It is true that there will be a compulsoryconsolidation on the paper. In section A

we are guaranteed either a statement of

financial position (balance sheet), an

income statement (profit and loss

account), a combined statement of

financial position and income statement,

or indeed a statement of cash flows (cash

flow statement). There is a but. In the

section A question, although the

requirement is to prepare the

consolidated x (for 35 marks), just over

half of the marks are usually for the

mechanics of consolidation. The other

marks are for knowing the accountingstandards!

Students try to pass without learning

their accounting standards

When putting your final revision plan

together, a big mistake is to focus only on

consolidation and cash flow you need

to learn your accounting standards. On

top of the section A issue, section B of

this exam is actually full of requirements

like discuss, advice and explain. You

will have to write stuff about accounting

and accounting standards (for around

50% of the marks).

Key to a pass at P2 is knowledge of

your accounting standards. It is essential

you know the basics of them all. First, go

for breadth there are key need to learn

parts.

However, for December 2015, there

are some three-star accounting

standards ones you really need in-

depth knowledge of:

IAS 24 Related Party Transactions.

IAS 38 Intangible Assets.

IFRS 15 Revenue from Contracts with

Customers.

IAS 19 Employee Benefits.

IFRS2 Share Based Payment.

IAS 36 Impairment of Assets.

IAS 12 Income Tax.

IAS 32 Financial Instruments:

Disclosure and Presentation.

IFRS 9 Financial Instruments.

Clare Finch explains how you can pass the P2 Corporate Reporting paper

and actually practise! Well, now is that

time you need to put on your trainers

and start to practise, practise, practise.

And then theres the current issue

Question 4, for 25 marks, can only be

prepared for by looking forward, not back

at previous papers. So even if you have

done all the past questions you will

usually not be prepared for the current

issue. Think about things that are very

current.

You must read, digest, learn and

understand the recent articles. If you

dont, ask your tutor to explain and

simplify, then read it again. Key articles

from students newsletters for December

sitters are Revenue revisited part 1 and

Revenue revisited part 2.

Remember, the syllabus just says

current issues, so it could be anything

really it will be a choice question

though. Ideally, you will always be able to

choose the other two if you know your

accounting standards that is!

Clare Finch teaches at HTFT

Partnership, where she is a partner.

She is the author of A Students Guide

to IFRS

PQ

TAMING THE BEAST


23/4023

ICAEW spotlight PQ


How can we make studying for the ACA

a more seamless experience? How can

exams be closer to your work

experience? Scenario-based questions are the

way. Until now, Principles of Taxation has

comprised 50 objective test questions in avariety of formats multiple choice, multi-part

multiple choice, multiple response and numeric

entry. However, from January 2016, there will be

42 questions to the exam. It will start with two

new scenario-based questions worth 10% each,

followed by 40 objective test questions worth

80% in the same format as previously.

The new scenario-based questions test two

main syllabus areas income tax and NIC, and

corporation tax. One of the main aims is to

replicate what you will find in the workplace as

your experience grows, namely computer-based

computations.

Complexity of the workings .

Lets use the corporation tax question as an

illustration. In the exam you will be asked to

prepare a standard corporation tax computation

using a pro forma template set up on screen.

Within the question you may need to calculate a

figure for, say, adjusted trading profits, capital

allowances and/or non-trading loan

relationships. These calculations may be worth

one, two or possibly even three marks

depending on the complexity of the workings

required. This will be a multi-part question using

the same set of facts.

But not everything is changing. The syllabus

and weightings are to stay the same. The pass

mark will stay at 55%. Sitting the exam and the

time it takes to receive results also stays the

same. There are many opportunities to practise

the new style of questions. Sample questions

that reflect the look and feel of the exam are

available at icaew.com/examresources. ICAEWs

learning materials have been revised to

incorporate the new scenario-based questions

and approved by the examiner. The study text

contains pro formas similar to the real exam,

and the question bank contains hundreds ofexam-standard questions including an

assortment of scenario-based questions.

A scenario style of question will also be

introduced to the Management Information

assessment from January 2016. One scenario-

based question will be worth 20% of the marks,

with 32 objective test questions worth the

remaining 80%. The scenario-based question

will have a series of requirements linked to a

single scenario and you will need to enter either

calculated data for example, a cost per unit, a

percentage mark-up or a variance or select

from a drop-down menu which requires you to

make a choice for example, whether a

calculated figure represents an under or over

absorption of overheads. Only certain areas of

the Management Information syllabus are

suitable for scenario based questions.

The scenario-based question will be drawn

from either:

Syllabus area 1 costing and pricing OR

Syllabus area 2 performance management

The exams remaining questions carry equal

marks. The style of objective test questions will

stay the same as those already used, namely

multiple choice, multi-part multiple choice and

multiple response questions. The study materials

have been fully updated to reflect the new

scenario-based questions. The study manual

chapters covering the detailed topics in syllabus

areas 1 and 3 have also been updated to

include examples. The question bank for 2016

has been updated with 15 scenario-based

questions. This, and three sample papers, will

give you plenty to prepare you for the exam.

Sample questions will also be available within

the Management Information exam resources at

icaew.com/examresources

As in the Accounting assessment, there are

rules to be followed when entering answers tothe new scenario-based questions. In particular:

only whole numbers can be entered

rounding up or down doesnt matter, as marking

allows for both;

commas may or may not be used as a

thousand separator, so 1000 and 1,000 are both

acceptable;

negative values can be entered using either a

minus sign or brackets; and

a zero or a dash must be used where no value

is required in a field.

Practise scenario questions .

A specific example of this final point arises when

entering cost, price or volume variances in a

scenario-based question. The numeric value for

a favourable variance is entered in the

appropriate data entry field in the favourable

variances column, and a zero or a dash in the

corresponding adverse variances column.

Practising the scenario based questions will

make this clear.

If you are planning to take Principles of

Taxation and/or Management Information, there

will be no parallel running of the assessments in

the current format. From 1 January 2016, there

will be only one assessment available for each,

which will include the new scenario-based

questions.

Access support and guidance is available at

icaew.com/examresources.Reproduced with the permission of ICAEW, this

article was first published in Vital (October 2015).

Vital is the quarterly magazine for ACA students.

ICAEW 2015 (icaew.com/vital)

PQ

Scenario-based exam questions have been gathering pace for two years. Here the ICAEW looks at how this

approach will work with the ACA Certificate Level Principles of Taxation and Management Information modules

IN WITH THE NEW

7/25/2019 Pq

pq december

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