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7/25/2019 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
7/25/2019 Pq December
2/40
Jakub StezalyKaplan student
ACCA early booking payment plan terms & conditions apply. Visit website for details.
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7/25/2019 Pq December
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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
Daniel HopkinsKaplan AAT student
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PQ have your say
ACCASTUDY MANUALS
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Available for all
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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,
Tony Kelly, Phil Gammon, Jo Daley | Origination and print services by Classified Central Media
If you have any problems with delivery, or if you want to change your delivery address, please email [email protected]
Published by PQ Publishing PQ Publishing 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.
7/25/2019 Pq December
7/40
Book your CIMA programme nowvisit bpp.com/cimastarterpack
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7/25/2019 Pq December
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
7/25/2019 Pq December
9/40
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7/25/2019 Pq December
10/4010 PQ Magazine December 2015
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
THE MONTH
Production/Manufacturing
For 200 years, James Purdey &
Sons has been synonymous with
the unrivalled craftsmanship of
the worlds best shotguns and
rifles. You must be actively
studying towards ACCA or CIMA
qualification (must be at least
part qualified). You will also
need a minimum three years in
a manufacturing/factory
environment. The salary is
37,000-40,000 and the role
is based in Hammersmith.
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.
7/25/2019 Pq December
11/40
7/25/2019 Pq December
12/4012 PQ Magazine December 2015
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.
7/25/2019 Pq December
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
7/25/2019 Pq December
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
7/25/2019 Pq December
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
7/25/2019 Pq December
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
7/25/2019 Pq December
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
7/25/2019 Pq December
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
PQ Magazine December 2015
Lee-Anne Shema explains how
you can to pass the Financial
Reporting and Taxation paper
A NUMBERS GAME
7/25/2019 Pq December
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7/25/2019 Pq December
20/4020 PQ Magazine December 2015
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.
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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
7/25/2019 Pq December
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
7/25/2019 Pq December
23/4023
ICAEW spotlight PQ
PQ Magazine December 2015
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
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