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PQ magazine April 2019 www.pqmagazine.com / www.pqjobs.co.uk
R DS 2 0 19 : M E ET T H E W IN N E RS
PQ AWA
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CONTENTS April 2019 Change is coming…
News assets and liabilities
I recently rocked up at the House of
06ACCA exam feedback Your 24CIMA 2019 syllabus Institute
views on the recent exams unveils changes as it prepares to Commons (not in this outfit) to see PQ
08Blockchain ICAS pioneering celebrate its 100th birthday columnist Professor Prem Sikka present two
new way of issuing certificates 26Brexit ACCA makes plea for reports he has written for the Labour Party. He
10CIMA OTs Don’t reschedule if clarity as ‘B-day’ approaches told a packed committee room that the audit
you want to get a pass 28IFRS 16 How Tesco is profession is ‘highly dysfunctional’ and
Features, etc embracing the new standard abolishing the FRC does not go far enough.
04Mind your Ps&Qs Are we 29Careers Life at LSBF; NAO Sikka is calling on the Big 4 to be structurally
creating a nation of zombies? why criticises the apprenticeship broken up into separate legal entities, where
people love our annual awards; scheme; and our book review audit firms just do audit. He wants audit rotation every five years and all
and the best of PQ’s social media
30Fun stuff – and our giveaways audit bids to be made public. Sikka was joined by the shadow
12Tech news An update on
what’s going on in the digital The columnists Chancellor John McDonnell and shadow Business Secretary Rebecca
world; plus our columnist, Xero’s Robert Bruce Auditors must learn Long Bailey. As we have said in our news story (see page 6),
Mike Day to stand up to their paymasters 6 McDonnell was adamant that “change is going to come” and that self-
14Exam advice Health and study Prem Sikka State will need to regulation of the profession was a historic hangover that needed
tips that will help you pass; and rebuild our post-Brexit economy 8 addressing. He also revealed that it had been a long-held tradition that
new benefits for ICAEW studiers Zoe Robinson The growing audit firms offered opposition parties their staff. That practice has been
16Making Tax Digital HMRC importance of lifelong learning 10
‘cleared out’, he said. The fear of corporate capture was a real concern.
initiative that’s coming very soon Subscribe to PQ magazine
17Audit by drone PwC leads way It’s FREE – see page 27 or go to
when it comes to stock takes www.pqmagazine.com And the winner is…
18PQ Awards 2019 It was It was also the PQ awards this month – the front cover may be a give
another great night at the Café APRIL 2019 ISSUE away here. We had nearly 300 people laughing (and crying) the night
de Paris – and now you can Total Distribution
away, including me! Compere for the evening was the wonderful Tom
meet the winners
30,552 Ward. He was hoping to pick out three great haircuts in the audience
20Intangible assets Everything Publisher’s statement: we send both (just check his hair on page 18 – he looks like a Lego man!). But there
you need to know about tangible a paper and digital issue to a
and intangible assets wasn’t anyone with dramatic hair, so he went for best dressed
controlled database each month.
21Social mobility We profile a The above figure is the combined accountant instead. People loved his act, and the winners revelled in
scheme to help people from all total of issues sent out this month. their glory – although I would have put Claudia and her pink ensemble
backgrounds to access the Free to subscribers who fulfil our first. You can check out our best dressed trio on page 30. Check out
accountancy profession terms of control the awards video on our Facebook page – @pqmags.
22Conceptual framework Part Annual subscription: £35 (£50
overseas) Graham Hambly, PQ magazine editor (graham@pqaccountant.com)
two of our series on measuring
Tutors, are you spending too much time checking “10” = “£10.00”?
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Learning platform built for accountancy
Understands 42 currency formats
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PQ email graham@pqaccountant.com
HAVE YOUR SAY social media
ROUND-UP
The living dead the workplace. This is one
I read your article headlined ‘A reason employees are The day after Valentine’s Day
Blinkered Approach’ that featured advised not to listen to loud LSBF tv went live with another set
a device that wraps around the music at work – just of great ‘programmes’ for AAT
head, both cutting out noise and imagine the sight and studiers. We really like this
obstructing peripheral vision (PQ sounds that are blocked initiative and so do many of you,
magazine, February 2019). with this device! You have to too!
The first thing that came to my be aware of what is going Maxine Feehely thanked us for
mind was, why not just work from on in your environment. the link. She said: “I have just
home or in a quiet zone? I am There can be more watched a couple of the old ones
afraid that we may become human ways of handling for some parts of MAC that hadn’t
zombies when we want to cut out office distractions and quite clicked. I feel far more
most/all human interaction and managing our time. confident about my exam on
connection, all in the name of Mustafa Yusuf-Adebola, by Tuesday now.” Neica-Louise
avoiding distractions. Isn’t it a email Morrow agreed, and said it made
coincidence that in the same The editor says: And you her feel confident that her exam
issue of PQ, on some emotion’? don’t even mention the price – was do-able now. There’s still
the previous page, The second thing that came to these sensory blockers will set you time to sign up for the last few
was an article my mind was the health and safety back £200! So are we becoming a shows. They will be taking place
headed ‘Show risk when such a device is worn at nation of zombies? Let us know. on Friday 22 March, Friday 29
March and Friday 5 April. Go to
Our star letter writer wins a fantastic PQ mug! https://web.lsbf.org.uk/lsbf-tv to
register.
What you said about Paula Rutter also has the right
the PQ awards 2019 idea of how to take a break from
I didn’t win but it was a marvellous the ardours of AAT study! As ‘blue
experience being nominated by the feet AATQB’ she says: “Time for a
prestigious PQ magazine that is break with @PQmagazine
read by thousands of part qualified #SaturdayAfternoon.”
accountants as student mentor for
2019.
So grateful to Graham Hambly,
PQ’s editor, for such a wonderful
event at the Café de Paris in
I need
Leicester Square. To all the pqjobs.co.uk
wonderful professionals from all the
accountancy bodies I met, ACCA,
ICAEW, CIMA and AAT, thank you.
Pan Fouli
… I was honoured to have been
nominated for #PQawards, but to
win was the best feeling and I am
truly ecstatic! Thanks you PQ There was a great chat about
magazine for this and such a how you choose a business name
brilliant night! And thank you my on Accounting & Bookkeeping
incredible team @elhtfinance for all Support (AAT, ICB, Students &
of your support #financefamily Qualified) too. Miranda Toppin
Rebecca Dixon was going to call the company
MJT Accountancy, but wasn’t
… Had a fantastic time last night 100% sure. Jenny Waller used
at the PQ magazine awards in everyone who was nominated and congratulations to all my team at the name of a street she used to
London Town. It was great to see won an award. Mindful Education – nearly three live in and Coral Rogers looked
so many familiar faces in the Natalie Adele years of determination and hard up her initials in the periodic
industry and new people also, and work to create the product we table and came up with Chromium
even meet colleagues at the ACCA. … Brilliant to win Study imagined – so this is absolutely Bookkeeping. Chromium is nice
To top it off, our ACCA distance Resource of the Year at last night’s fabulous! I could not be more and shiny and she likes shiny
learning Facebook group won the PQ magazine awards for our AAT proud. things!
Editor’s Award. Well done to Level 2 course. Huge Mark McKenna
PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: graham@pqaccountant.com
Website: www.pqmagazine.com | Editor/publisher: Graham Hambly graham@pqaccountant.com | Associate editor: Adam Riches | Art editor: Tim Parker |
Contributors: Robert Bruce, Prem Sikka, Zoe Robinson, Mike Day, Tony Kelly, Phil Gammon, Edward Netherton |
Subscriptions: dom@pqaccountant.com | 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 dom@pqaccountant.com
Published by PQ Publishing © PQ Publishing 2019
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PQ news
ROBERT
BRUCE ACCA feedback
‘A badboy’, ‘nasty’ and ‘horrible’ is were ‘fairer’ this sitting. These
Auditors how PQs described ATX this time papers had some of the worst pass
must once around. Several students admitted rates last time around, so students
again stand they didn’t manage to complete the and tutors will hope to see an
firm March exam, and were upset improvement on the 38% and 31%
because they had put so much December rates come 15 April.
time into their study. The APM December pass rate
Many found SBL ‘exhausting’ too, was 33%, and time was again the
One of the roots of unrest with auditing and one PQ just said ‘wow!' enemy for many. There were,
is the perceived lack of backbone
Students were genuinely worried however, few complaints about the
among auditors. It didn’t used to be
that they didn’t spend long enough Spring test. PM got a more mixed
like this. History tells a different story.
The villain who charmed his way reading, planning or even thinking. reaction. Parts A and B were mostly
through the business world over the As one said: “I feel like there was OK. It all depended on what
last 50 years of the last century was so much to do in this exam… I was questions you got in section C, and
Robert Maxwell. With hindsight it is writing continually for pretty much there was a lot of question envy on Cheers! Keith Windross told us he
hard to see how he pulled it off. But all the time.” the noticeboards. “had to find an innovative solution
he was a bully, and bullies manage to When it came to AA and AAA, • See www.pqmagazine.com for all to recover from ATX”. Seems to be
keep the critics at bay for much longer most March candidates felt they our exam feedback. working, he said!
than they should. When he got his
comeuppance in 1971 it was a
stinging one. Long before the scrutiny
‘Inconvenient’ news
disappointing news and would
of business by government became the like to apologise for any distress
feeble thing it is today there used to this may cause. In recognition of
be the feared Department of Trade and the inconvenience caused we
Industry reports. Sir Ronald Leach, What happens when an ACCA offered them a £30
have applied a further £30
senior chap at Peat Marwick (the accountancy body loses your goodwill gesture! They were told:
goodwill gesture to your MyACCA
forerunner KPMG), was the accountant exam script? Well, PQ magazine “Your exam answer responses
reporting on Maxwell. Leach’s words account.”
recently came across the case an have been reviewed and
defined the backbone that accountants We wondered if this was an
ACCA student whose Applied regrettably we are unable to issue
should bring to their role: “Mr Maxwell isolated incident and would love
Skills exam paper ‘went missing’ you with a result based on the
regarded his stewardship duties to hear from any students who
in December. information that has been
fulfilled by showing the maximum have suffered a similar fate.
The student, bizarrely, first received in relation to your
profits which any transaction could be Contact PQ in confidence – email
devised to show,” he said. He found out that they would not be exam.” The letter went on: “We
graham@pqaccountant.com with
concluded: “Notwithstanding Mr issued with a result when the realise that this will be
your story.
Maxwell’s acknowledged abilities and
energy, he is not in our opinion a
person who can be relied upon to
exercise proper stewardship of a
publicly quoted company.” Leach
stuck to his principles – Peats never
Training contracts on the increase
The number of trainees on 18% to 4,275, which represents
did any work for Maxwell again. It was contracts with the UK’s top 75 20% of the total for the top 75.
only 20 years later, after Maxwell’s accountancy firms is approaching PwC’s Louise Farra told
death, that further scandals broke over
20,000, says new research from Accountancy Daily: “Student
how he had plundered his workers’
Accountancy Daily. recruitment is the bread-and-butter
pensions. Coopers & Lybrand, now
PwC, got it in the neck that time. The survey found that there are of the firm. We will be taking on
There is a lot to be said for standing currently 19,887 trainees studying 1,300 graduates and 200 school
firm in the face of dubious behaviour. to become qualified accountants, leavers for this coming year, with
tax advisers or consultants at these about 60% of these roles outside
Robert Bruce is an top firms. This represents a 4% The Big 4 firms account for London. And we have seen large
award-winning writer on increase on the corresponding 12,884 of the total, with PwC growth in opportunities around
accountancy for The Times figures for last year. increasing its student numbers by technology.”
In brief
Change is coming Happy birthday CIMA Workload blamed for tragedy CIPFA forges US links
Shadow Chancellor On Friday 8 March, the The widow of an accountancy CIPFA and Rutgers University
John McDonnell (right) Chartered Institute of Management lecturer who killed himself has said Business School have signed a
has warned audit firms that change Accountants celebrated its 100th her husband, Malcolm Anderson, Memorandum of Understanding
is coming. At the launch of two birthday. CIMA President Steven was unable to cope with his (MoU) to create a pathway for the
policy-making reports on Swientozielskyj said: “In 1919, a workload. The deputy head of university’s students and graduates
accountancy he said the number of new breed of accountant was accounting at Cardiff University fell to practice government accounting
occasions where audits are created to help industry leaders to his death from a university outside the United States. Rugters’
undertaken by junior members of deal with the challenges of building in February students on the Master of
staff or even trainees is the early 20th century. last year. The inquest Accountancy in Government
‘staggering’. He felt there was an One hundred years later was told he left a note Accounting programme will have
element of exploitation here. He CIMA members and describing the the opportunity to qualify with
also promised legislation to reform students are at the cutting pressures he felt from CIPFA via its online platform. The
audit in a Labour government’s first edge of finance, driving his job and long first session will be open to the
Queen’s Speech. business transformation.” hours. September 2019 intake.
6 PQ Magazine April 2019
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PQ news
PREM
SIKKA Blockchain your certificates
ICAS has revealed it is trialing the involved in this trial can now take critical in today’s digital world and
use of blockchain technology to control of their personal data by the same is true of the qualifications
State needs issue digital certificates to its newly replacing the paper-based you hold.” He admitted that, like
to rebuild qualifieds, with the help of PwC certificate with a secure digital many others, he takes pride in the
post-Brexit and its Smart Credential platform. version. Not only this, but the certificate hanging on his wall – but
economy All staff who have qualified with technology allows instant verification you cannot take it down and share
ICAS at the Big 4 firm in the past of their credentials, putting an end it when you need to.
two years are being given access to to the back-and-forth involved in However, the demand for
a virtual wallet. This allows owners establishing good standing and verified, trusted and irrefutable
Whatever the outcome of Brexit, the
UK needs to change its economic complete control over sharing their ensuring our members can get on identities from many different types
path. The government policies of professional credentials digitally, with their jobs.” of organisations is rising. Potential
corporation tax cuts and low interest reducing the exposure to fraud. Steve Davies, global blockchain employers, in particular, want to
rates have not produced higher ICAS CEO Bruce Cartwright said: leader at PwC, explained: “The ensure that an applicant holds the
investment or productivity. “Our newly qualified members ability to prove your identity online is credentials listed on their CVs.
The UK invests 16.9% of its GDP in
productive assets, compared with the
average of 20.1% for the EU. UK R&D
expenditure is 1.5% – 1.7% of GDP,
compared with the EU average of 2%
You need stamina to get SBL pass
Do you have the stamina to pass exam requires. Students are also
(about half the level of Sweden).
The shareholder-centric model of
the ACCA SBL exam? In the most showing the examiner which
corporate governance encourages recent Examiner’s Report, the questions they are struggling with
obsession with short-term returns. In examiner said they were worried most. The examiner said: “Mostly,
1970, major UK firms paid about £10 there were ‘indications’ that sitters candidates answered the questions
of each £100 of profits in dividends. are running out of stamina during in order. Where they did not they
By 2015, it reached between £60 and the four-hour test. The examiner appeared to be leaving one
£70, often accompanied by a squeeze stressed it was also noticeable that question, which they liked least,
on labour and investment. UK the quality of answers tailed off until the end.” trialing The concern
companies pay a higher proportion of towards the end of the exam. here is that in future exams the
their earnings in dividends compared
The examiner is strongly examiner has said the questions
with their counterparts from the EU,
recommending that students take may follow a timeline or have
Japan and the US. A Bank of England
survey showed that around 25% of mock exams before the real thing, question requirements that progress
finance raised by companies is spent under exam conditions, to get used in other ways. That means you are
on investment, with the remainder split to the demands on concentration, getting a direct recommendation to
between purchasing financial assets, thinking and writing that the longer answer the requirements in order.
distribution to shareholders and
AAT software ‘issues’
keeping it as cash. Low investment
has resulted in low productivity. The
output per hour worked in the UK is
Code rejig
about 16% below the average for the The FRC is looking create a new
AAT students have been contacting once centres are accredited to
rest of the G7 advanced economies. Stewardship code, setting out
PQ magazine about software host exams by AAT, how
The private sector has shown little more rigorous requirements for
issues with their AAT exam often they are visited to
appetite for long-term investment and reporting. The code will refer to
risks. The state has to reform centres. ensure they are
environmental, social and
corporate governance and play a One told us that on providing a proper
governance (ESG) factors.
direct role in steering the economy by attending her local testing service and keeping
Signatories are also expected to
renewing social infrastructure and centre recently she was their software up-to-
take material issues into account
investing in manufacturing, green and faced with Sage software date.
when fulfilling their stewardship
new technologies. from 2014. It took the PQ would like to
responsibilities. And investors
centre over an hour to install hear from any other
Prem Sikka is Emeritus must report how their purpose,
Sage 50, which she was told was students who suffered a
Professor of Accounting at values and culture enable them
‘available’ at the time of booking. similar fate. Send your stories to
the University of Essex to meet their obligations.
The concern for students is that, graham@pqaccountant.com.
In brief
Darting ahead to boot. He added another £100k intended to be used for criminal whistleblowers had received
Former trainee accountant to his bank account with the UK purposes. The accounts are held $112m in awards, a rise of $33m
Nathan Aspinall (pictured) has Open prize money. mainly by overseas students on the previous year. One group of
found another way to use his studying in the UK, who may be whistleblowers who exposed
maths skills. ‘The Asp’, who has Bank accounts frozen unaware that operating a bank significant corporate tax evasion
exchanged his calculator for The bank accounts of 95 account in this manner is were awarded $62m.
arrows, recently won the Ladbrokes Chinese students containing an potentially illegal, said the NECC.
UK Open, and is now ranked 34th estimated £3.6m were recently CIMA 2019 syllabus
in the PDC order of merit. frozen in a day of action Whistleblowing heaven CIMA’s exam blueprints for
Aspinall started in 2018 at co-ordinated by the newly The US IRS collected a the 2019 OT and case study
Qualifiying School in order formed National Economic record-breaking $1.441bn in taxes, syllabus have now been released.
to win his tour card, and Crime Centre (NECC). The penalties and interest thanks to In a new timeline the next big
got to the semi-final on his money in the accounts is information provided by announcements will be the 2020
World Championship suspected to be either the whistleblowers. That’s up from exam timetable release on 29 April.
debut, earning £100,000 proceeds of crime or $190m in 2017. The IRS said that Check out more on page 24.
8 PQ Magazine April 2019
82%
Merits or
Distinctions
Award-winning AAT
courses and apprenticeships
“Doing my studies online and then coming to college
and practicing what I’ve learned and getting my
questions answered works perfectly for me.”
Kat, AAT Level 2 Student
To learn more call 0203 6060 365
or visit us at mindful-education.co.uk
PQ news
ZOE
ROBINSON
Don’t reschedule if
The growing
importance
you want to pass
Thinking of rescheduling your CIMA week six. The recommendation is
of lifelong
OTs? Well, be careful: new research that you sit the exam within three
learning shows students who reschedule weeks of finishing your course to
their CIMA exams are 16% less maximise your chances of passing.
likely to pass than those that book Students who attempted both
an exam date and stay with it. short tests and mock exams had
CIMA launched its 2019 Professional The study, by Kaplan and CIMA, 5% higher pass rates than those
Qualification Syllabus in January.
shows while the pass rate of who did neither. However, when
Although hosted by humans, their
students sticking to their original you sit exams has no affect on pass
special guest was Pepper the robot, a
social humanoid that can recognise exam date is 77%, this falls to 61% rates. Apparently, there isn’t a
faces and basic emotions. Its purpose for those who reschedule. ‘lucky time’ to sit exams. The
was to illustrate how far technology The stats also show a steady researchers also wondered if
has come, and to challenge a few decline in pass rates from the end exemptions influenced pass rates.
perceptions. If a robot can of the course to sitting the exam. Again, the short answer is no –
communicate with an audience, how Pass rates fell by 6% after the third exemptions of five or less make
long before it can do my job?
CIMA has placed digital skills at
the centre of the new competency
week and by a further 10% by little difference to pass rates.
LSBF moves
framework, with other skills remaining
effectively the same. While this is a
direct acknowledgment of the impact
Call for new charter into Vietnam
LSBF in Singapore has announced
technology is having, CIMA is not the
only one looking to the future; all the a new agreement with iBosses,
professional bodies recognise the Vietnam.
importance of digital skills and are The collaboration will start with
already engaged. ICAEW have Digital the launch of online ACCA
Essentials, a new corporate service programmes, and the long-term
that offers finance professionals the goal is for LSBF to offer both online
know-how to better understand AI, and on-campus ACCA programmes
blockchain and cyber security. ACCA to multiple countries in the region.
is running CPD sessions helping
Rathakrishnan Govind, LSBF
professionals get to grips with big
data and data analytics. Global CEO, said: “Vietnam is a key
There was a time when a newly destination for LSBF because of its
qualified accountant was up-to-date The time is right for a national executives is linked to delivery large youth population and keen
with the latest thinking and technical ‘Women in Business Charter’, says against internal targets on gender interest in quality education offered
skills. Not anymore. The workplace is the AAT. The Women in Finance diversity. by overseas providers. We believe it
moving at pace: drones conduct Charter was launched way back in AAT head of policy and public is the right time to introduce LSBF’s
stocktakes and AI conducts analysis 2016 and some 300 financial affairs, Phil Hall, said: “AAT was the delivery models, which are suited to
of non-traditional sources for audit services firms, including the AAT, first, and for a long time the only, the fast-paced and challenging
purposes. Accountancy practices are have signed up. The charter asks professional accountancy body to environment our students are
a world away from where they were
for a commitment to implement sign the Women in Finance Charter, experiencing.”
just a few years ago, and the need for
four industry actions: because it knows closing the gap As part of the agreement, LSBF
lifelong learning has never been
greater. We are all involved in a • To have a named senior executive leads to a more diverse and Singapore will provide all the ACCA
digital race that is getting faster. Don’t responsible and accountable for creative workforce, broadens the online content and study guides as
be left behind. gender diversity and inclusion. skills base and can increase well as international teaching
• To set internal targets for gender creativity and innovation – to say resources, while iBosses Vietnam
Zoe Robinson is Learning and diversity in senior management. nothing of the obvious issue of will provide the necessary resources
Programmes Director at
• To publish yearly progress reports. fairness and the financial and facilities for training projects
Kaplan Financial
• Ensure the pay of senior imperative for change.” and student management.
FRC widens inquiry adviser to Ineos, the petrochemical empire, respondents are worried about cyber attacks,
The FRC is extending its when its top three executives revealed they and a similar percentage was cautious over the
investigation into the wanted to move much of their wealth overseas. security of Internet of Things connectivity.
preparation, approval and The move could potentially deprive the UK
audit of the financial Treasury of £400m–£4bn as Sir Jim Ratcliffe Ethnicity pay gap rising
statements by KPMG of and chums moved to Monaco. It is believed Deloitte has ‘voluntarily’ reported its ethnicity
Carillion plc, to include certain matters relating that PwC’s management sought advice from its pay gap for the second year running. The
to the financial statements for the year ended public interest body, chaired by Lord Gus median hourly pay gap for Deloitte UK’s Black,
31 December 2013. The FRC is already O’Donnell, as to whether it should refuse to Asian and Minority Ethnic (BAME) employees
investigating KPMG’s audit for the years 2014, help or even resign as Ineos’ auditors. It is still stands at 7.9%, up on the 6.9% in 2017. The
2015 and 2016, and additional audit work auditor, so the advice must have been there mean ethnicity pay gap was 12.9%. The Big 4
carried out during 2017. Former Carillion group was no reason to resign! firm said the gap is due to the lower proportion
FDs Zafar Khan and Richard Adam are also of BAME employees holding the most senior
under investigation. Cyber attack risks for 5G positions in the firm, an issue it is working hard
Vulnerability to cyber attack is the biggest risk to address. While BAME people made up 22%
PwC worried by tax avoidance to businesses adopting 5G in the UK, of its overall workforce in April 2018, only 5%
PwC considered resigning as auditor and according to new EY research. Some 40% of of partners and 10% of directors are BAME.
10 PQ Magazine April 2019RI([FHOOHQFH
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New challengers
automating their financial
MIKE processes. They also think they will
DAY be able to gather data faster, and at
a lower cost, than external
Digital
accounting
skills are not
for audit work
Tech firms look set to challenge the
accounting firms.
Source’s Fiona Czerniawska said:
“When clients decide to split a
professional service it paves the way
optional traditional accountancy firms’ for change in the competitive
dominance of the audit market, landscape, and that’s what is
says new analysis from Source happening in audit at the moment.”
Global Research. So who could be the competition
Digital accounting skills are all about It is predicting that many FTSE in the future? The Accentures and
understanding the digital technologies
100 companies are looking to break IBMs of this world are in one group,
that are enabling accountancy today.
down their audit into different and even Amazon and Google have
Let’s start with accounting software.
Can you imagine a world where you component parts, and the tech been put in the frame.
could only use the apps on your firms are favourites to get a piece of One of the Big 4 firms seems to
phone if you were connected to your the action when this happens. be doing better than the others in
company’s wi-fi, but nowhere else? Source found a third of this area. Just over half (52%) of
The Cloud means working anytime, executives are already splitting their those surveyed felt Deloitte was the
anyplace, anywhere. Add to that the audit work to some extent, while best positioned to deliver when it
growing – and very impressive – 44% said they are weighing up comes to technology. That’s way
integrations with banking, the ability such options ‘right now’. The worry two-thirds of executives think tech ahead of KPMG (22%) and EY
to take a picture of a receipt and for accountancy firms is that nearly firms would do a better job of (18%).
interpret it, and the functionality to
bring in a huge invoice and do the
imposed,” he explained. That
‘Temporary’ tax fix
same – then you have the basis for AI
to take hold of that data. The brain means inevitably some companies
grows and grows, getting better and will be over-taxed and others under-
better at providing information. taxed.
This enables immediate knowledge The government’s digital services created by users. Fullelove said many companies
and decision making. Making best tax (DST) on digital companies The CIOT’s Glyn Fullelove said will not have the necessary
use of that is a skill in itself. should be a temporary measure given the nature of the tax a information to arrive at a precise
There is a growing number of and ideally last for no more than pragmatic approach is required in answer to how much DST they
business apps that surround five years, says the Chartered order for it to be implemented should pay. So, in practice, the
accounting software. There are Institute of Taxation (CIOT). effectively. “This is because government will have to rely on
hundreds of them, covering vertical
The institute wants the DST revenue taxes such as this are a companies to arrive at a ‘best
sectors like retail, construction,
catering, etc. We are also seeing that repealed as soon as there is a blunt instrument that cannot estimate’ of the amount of the DST
our accounting partners are becoming multilateral agreement through the accurately represent the tax on the payable based on a just and
experts in these businesses, because OECD on a global method to tax profits related to user based value reasonable estimate of the UK
that’s what the apps are for – to such companies on the value on all businesses on which it is revenues liable to DST.
provide effectiveness and efficiency.
So they are good at understanding the
needs of that retailer, architect, chef –
the list goes on.
And guess what? The accountant is
KPMG closes small business service
KPMG Enterprise is to close its businesses at affordable prices. based bookkeeping to small and
best placed to understand the
small business accounting service, It appears the firm has now micro-businesses.”
business and to implement a suite of
five years after it promised its written to all its current customers KPMG obviously doesn’t see this
technology that really helps that
client. In recent a survey, 83% of our cloud-based platform would to tell them they need to find as a growth area, and is re-focusing
partners said that understanding the “disrupt and dominate the SME ‘alternative arrangements’. the business on services that are
technology was as important as market”. A KPMG spokesman said: “We core to the firm.
understanding the accounting. The Big 4 firm invested £40m can confirm that we are proposing A small number of staff (there
into the technology platform, which to withdraw the provision of our were 200 working on this) will be
Mike Day, Director, UK
it pledged would deliver accounting small business accounting service used to manage the handover to
Education Sector, Xero
services to small and micro- in the UK, which offers cloud- alternative suppliers.
In brief
Digital news and VAT zero-rating to digital publications a growing number of online fashion five years. In comparison, Germany
Digital news products should will help support journalism. retailers to the wall. The perennial AI start-ups raised $300m and
be VAT-free, and treated in the problem is customers returning a French ones $400m. The news
same way as paper products, says Online sales on the rise high percentage of stock, often came as the UK government
a government commission. A total of 246 online-only 40% to 50%.” unveiled a national industry-funded
Newspapers are currently VAT- retail businesses went bust AI postgraduate courses.
exempt because of their (insolvent) in 2018. That’s a rise of AI funding rocketing
importance in 19% on 2017 and double Investment into the UK’s And the wallet was empty…
promoting the 120 that failed in artificial intelligence sector by When Canada’s largest crypto-
literacy and 2010, according to figures venture capital firms reached a currency exchange owner, Gerald
democratic complied by Price Bailey. record $1.3bn last year. That’s Cotton, died the password access
accountability. Partner Matt Howard said: almost as much as the rest of to his 115,000 accounts died with
The “Declining consumer Europe put together, says him. With the help of EY, however,
Cairncross demand, coupled with Dealroom. The new figures also the wallets have been opened and
Review has argued that extending aggressive discounting are driving represent a fourfold increase in just guess what – yes, they were empty!
12 PQ Magazine April 2019PQ exam advice
Bev Roberts shares her top
health and study tips for
exam success
A healthy mind an
will help you get
Exercise
“Mens sana in corpore sano” is a Latin
phrase, usually translated as “a healthy
mind in a healthy body” and has been
around since Roman times, but how
does this relate to exercise?
Exercise helps to oxygenate your brain enabling you to return refreshed to your
and helps to release tension. It has a studies.
calming effect, helping with mental
relaxation, and this in turn will help you Set a routine
to study more efficiently. “All work and no play….” is a well-known
proverb, and one that is often
Don’t cram undervalued! A well-balanced routine of
It’s widely accepted that you cannot work and play is so important during
revise effectively for prolonged periods of revision.
time. Some suggest a 50-minute revision You might find it difficult to maintain a
session with a 10-minute break, whereas regular exercise schedule, but doing so
some have suggested a 20-minute will almost certainly reap its rewards.
session with a 5-minute break. Ideally, try to get active at least every
Every person is individual, and as other day of the week.
such, each person retains information
differently; ultimately, taking regular Learn what works best for you
breaks is the key. Planning a routine will help to ensure you
This will ensure that you stay exercise during periods when you know
productive and ensure you have the best you won’t be studying. Some people
chance of retaining what you have just prefer to study (or have the time) in the
worked on. morning, whereas some are night owls.
A short walk around the block can be If you can plan some exercise around
sufficient to help you clear your head, your study schedule, then you won’t miss
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14 PQ Magazine April 2019exam advice PQ
nd body
caffeine can be detrimental. Not only will weak, try rewriting them in note form so
it dehydrate you, but in higher doses it that you understand them better. Tab
has been known to cause palpitations your books, highlight specific areas, etc.
and is likely to disturb your sleep. People On the big day, remember the four ‘P’s
with heart conditions, diabetes, epilepsy, – preparation prevents poor performance!
a pass
high blood pressure (to name just a few) • Ensure you have allotted a sufficient
should also be particularly careful when amount of uninterrupted time to complete
ingesting caffeine products. your exam.
Try to avoid so-called ‘energy’ drinks. • Turn off your TV and phone.
Additional to the above, drinks that are • Fully prepare yourself before accessing
loaded with sugar and/or caffeine might the exam link. Make sure your work-
out on valuable revision (or exercise) appear to give you a quick energy ‘hit’, space is clear of any clutter, have a glass
time. but this feeling rarely lasts for long. of water to hand, etc.
Generally speaking, these are a poor • Read the exam instructions fully prior to
Get walking! substitute for healthy, well balanced food clicking ‘Start’.
I know you’ve probably heard it a million and fluid. • Take a deep breath and don’t panic. If
times, but walking really is very you’re sitting your exam, you know you’re
beneficial. Not only for your health, but it Watch your alcohol intake fully prepared.
can also help you to relax, focus your Alcohol is a depressant, so drinking it is • Read every question carefully
thoughts, and leave you feeling refreshed likely to make you feel more relaxed, But and thoroughly.
and energised. as alcohol is also a diuretic, it will also • Be sure to check your
dehydrate you, disturb your sleep and figure work at least twice.
Eating would likely have a negative effect • If you get stuck on a
In order to perform at your best, you on your concentration levels the question, move on. You
need to consider how you are fuelling next day. We’re not saying never may have time at the
your body. Eat well-balanced meals, with have an alcoholic drink, but just be end to revisit any
slow release carbohydrates are a good mindful of when you have it! questions you have
option. skipped – this is better
Some examples are oats (porridge), Time management is key than not finishing the
fresh fruits, nuts, eggs, non-starchy Exercising, socialising with friends and paper.
vegetables, sweet potatoes, etc. family, as well as making time to study • Stay calm!
Try to avoid skipping meals; apart from are all equally as important as each other.
the obvious health implications, skipping You need to find a healthy balance, You’re an independent learner
meals can be counter-productive toward particularly when your exams are just Regardless of where you are studying, it
your learning, affecting concentration and around the corner. is important to know that you are not on
retention levels. your own; you will likely have a whole raft
Drink plenty of fluids to make sure you Understand your learning outcomes of different support networks at your
keep hydrated. The occasional diluted Do you know what you need to achieve disposal. That being said, it is worth
fruit juice or cordial is fine, but your best for each topic or assessment that you’re praising the independent learner!
option is nothing more complicated than undertaking? For example, most bodies You are proactive, reflective and self-
plain water. have a full breakdown of each course aware. You will try to find solutions to
Eat plenty of fruit and vegetables. and its corresponding syllabus, which problems, think about (and often
Instead of crisps, chocolates or fizzy can usually be found on their website. question) what you experience, hear, see
drinks, try to stick to fresh fruit and or learn, and you are more likely to know
vegetables as a healthy snack. Pineapple Continue to reflect (or be aware of) your strengths and
chunks and carrot sticks are a good, easy It’s important to reflect on what you learn; weaknesses. You’re also not afraid to ask
option. whether it be a new topic in your course for help if it’s needed. PQ
Watch your caffeine intake – caffeine is book, an article you’ve read in the press • Bev Roberts is exams officer for
a powerful stimulant, and although it has or even your own revision notes. Training Link. She is also the award-
been known to help with concentration in Reflecting can often help to cement those winning tutor for the Diploma in Payroll
small doses (one to two cups of regular points, ensuring they stay with you. Management and the L3 Self-
strength coffee or tea), having too much If there are any topics that you feel are Assessment Tax Returns course
ICAEW spotlight PQ
reports and learn about bills, purchase orders,
New benefit for ICAEW PQs quotes, invoices and much more! If you fancy
learning more after you have completed the Xero
certificate there is an extra six hours of free
eading cloud accounting software have completed the course you’ll get a certificate content to help progress your knowledge further.
L provider Xero is partnering with ICAEW
to offer all ACA, ICAEW CFAB and USS
students the chance to complete the Xero
from Xero to show you are Xero Certified. You
learn through real-life scenarios, client tasks and
simulations and there are knowledge checks to
Why gain the Xero Certification?
The Xero Certification shows that you have
Advisor Certification Equivalency Course – for help reinforce your learning. You need to register knowledge of the UK’s leading cloud accounting
free! It’s a great opportunity for students to gain for the course (see below) and complete it within software. This can benefit your career as there
highly prized accounting and tech skills. three months. are thousands of businesses and practices in
the UK and around the world that use Xero’s
What’s involved? What will you learn? software, so demand for these skills have never
There are 12 short modules covering all the The completion of this Xero certificate will show been higher!
essentials of cloud accounting. The e-learning you how to set up and run Xero on a day-to-day To get started head to icaew.com/student
course takes about six hours in total, so you can basis, understand the differences and benefits benefits and click on ‘Xero cloud accounting
complete it in your spare time and stop and start of cloud accounting versus traditional methods, programme’. PQ
as you progress through the course. Once you review month-end and generate the relevant • Thanks to ICAEW for this article
PQ Magazine April 2019 15PQ Making Tax Digital
MTD explained
figures directly from the spreadsheet into Xero
where you can submit clients’ MTD VAT returns
securely and in real-time to HMRC. But then,
when there is a little more time, it’s time to move
off that spreadsheet!
A radical change to the tax system How does Xero help?
As an HMRC-recognised VAT software provider, What additional help is there?
is imminent. Here Xero explains all Xero can easily publish VAT returns, submit It’s important to get your internal team, and in
directly to HMRC and pay VAT online. We have particular your fee earners, up to speed on the
M
aking Tax Digital (MTD) is an HMRC also taken the opportunity to make additional implications of the new mandate. And everyone
initiative designed to make sure the improvements to our VAT module including needs to be kept up-to-date with the latest news.
UK tax system is effective, efficient tracking and managing VAT. Some useful resources include HMRC and
and easier for taxpayers. But with more than a million businesses ICAEW, but don’t forget to look out for updates
MTD for business (MTDfb) begins on 1 April on the Xero MTD resource centre.
2019 with MTD for VAT. From that date, VAT- As you gear up your team think
registered businesses above the threshold of about setting up an MTD ‘taskforce’ in
£85,000 will have to keep digital records and your firm. This group can identify
submit VAT returns using compatible software. who’s responsible for onboarding,
Other components of MTD, such as income tax training and providing ongoing
and corporation tax, have been placed on hold support to clients. Depending on the
until April 2020 at the earliest. size of your firm, consider formal
project management and have a
When does it all happen? sponsor or decision maker, plus a
There was a public beta programme in October project manager.
2018, leading to MTD for VAT going live in April If you are a Xero Partner, as part of
2019. your preparation for MTD, join us on
affected by the new scheme, and with our MTD learning journey. We offer a suite of
What is Xero’s role in MTD? spreadsheets still being prolific, many education that lets you upskill and prepare for
Preparing for digital tax starts with managing accountants are struggling to convert clients to future compliance. Once you’ve completed the
business accounts online – it makes the MTD-compatible software in time. So we will learning journey you’ll be recognised as an
transition smoother and business more efficient. make bridging software available soon, too, so MTD-ready firm in Xero’s adviser directory.
Having consulted with HMRC on MTD, Xero is clients will still be able to use a spreadsheet to Here’s how: https://www.xero.com/uk/partner-
committed to supporting small businesses and calculate VAT and keep digital records. Our programs/ partners/get-mtd-ready/ PQ
their advisers through the transition. bridging software will allow them to upload VAT • Thanks to Xero for this article
The Future ACCA’s Future Talent Academy can
help you improve your chances of
Talent Academy career success. Get ahead of your
– the free peers today and join the platform
developed by students for students.
online platform
for students Join today: accaglobal.com/fta
16 PQ Magazine April 2019audit by drone PQ
Taking stock – by air
PwC has completed its first
stock count audit using drone
technology. Here’s how
n a global first for the firm, PwC UK
I has undertaken a stock count audit
using a drone.
This is all part of PwC’s wider drive to
harness emerging technologies to
enhance audit quality and efficiency and
transform the audit process.
The drone, which was manufactured
and operated by QuestUAV, was used to
capture over 300 images of the coal
reserves at one the UK’s last remaining
coal-fired power stations, Aberthaw in
South Wales.
The images from the drone were used and logistical benefits of using drones • More efficient monitoring and
to create a ‘digital twin’ of the coal pile in when compared with traditional surveying management of the Aberthaw site, which
order to measure its volume, The value of methods. Initial findings from the project covers a total area of 200 hectares (for
the coal was then calculated to within concluded that: example how to best store the coal to free
99% accuracy based on that volume • The traditional method of manually up the most space).
measurement. traversing the coal pile can take around • Improved knowledge on the landscape
PwC audit partner Richard French four hours, whereas using a drone it can around the site using aerial images, for
said: “Coal stock has a material value on be done in half-an-hour – a reduction of example for vegetation management.
RWE’s balance sheet, so we carry out an 85%. • Providing valuable insights on the
annual stock observation and evaluation • The drone captured some 900 data health and maintenance of the wider
as part of our audit process. We observe points per cubic metre, obtaining power station assets.
the manual coal count carried out by impressive overall accuracy levels of While on site the multi-rotor drone was
RWE’s external surveyor, then assess the 2cm. This compares with the 1,200 used to take photos of the wider site,
resulting data, which feeds into the readings taken across the whole site allowing RWE to inspect the condition of
financial statements. The traditional stock using the traditional method. That means assets that are high up and otherwise
method involves climbing over the coal the drone enhances accuracy by difficult to access. This, says PwC, is just
pile and using a two-metre GPS tracking providing a true, continuous one other use to demonstrate the benefits
pole to measure the area and elevation representation of the coal pile. drones can have for businesses.
from the ground at various points. The • The preparation for the drone flight PwC’s UK drone leader, Elaine Whyte,
data is then used to build a contour of requires access to only a limited area of added: “Sectors with large assets in hard
the reserves and estimate its volume.” the coal pile and therefore poses less of to reach areas are the most obvious
French explained that while the a health and a safety risk, particularly starting points for expanding this kind of
traditional method remains reliable and when parts of the coal pile are unstable. work further – from mining to agriculture
will still be used for RWE’s formal year- • The flight does not interrupt normal and forestry.”
end financial statements, the drone trial operations on the coal pile, for example She pointed out that a recent PwC
was conducted to explore ways of movement of machinery, and so is a less report showed that drones have the
challenging the traditional method of disruptive method. potential to not only improve UK
stock counting. “It was a classic example The team viewed the drone data via productivity, but to offer significant net
of new technology challenging the old – PwC’s Geospatial app, a visualization tool cost savings for businesses to the tune of
and based on our results, the potential is that helps the audit team interrogate data £16bn by 2030. PQ
groundbreaking,” he pointed out. about the inventory on site. It found the • Check out PwC’s report, entitled ‘Skies
The main objective of the drone flight operational benefits of using the drone the limit: the impact of drone on the UK
was to assess the accuracy, efficiency included: economy’.
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*(7$//PQ Awards 2019
LAUGHTER & TEARS
We blow a raspberry at
the Oscars and blow the
Brits out of the water! Yes,
it’s the PQ awards 2019…
The Café de Paris was filled with laugher – and a few tears –
as the winners of the PQ magazine Awards 2019 were
unveiled to the sound of Freddie Mercury and Queen. The
coveted PQ magazine trophies have now wound their way
home and are adorning mantelpieces around the world
(Canada, at least).
The queue to get into the Café de Paris started early this
year, but it wasn’t long before the crowd discovered who had
walked off with the top prizes. Our new PQ of the Year is
Rebecca Dixon, an AAT trainee with the East Lancashire
Hospital NHS Trust. Apprentice Zane Salmon was also on
hand to pick up his award. He is on the Leadership Through
Business programme with Grant Thornton and studies at And so the 2019 awards are about to begin…
Kaplan Financial. NQ of the Year went to CIPFA’s Sophie
Medwell, who had to follow the awards on twitter, as she’s on
secondment in Canada.
PQ editor Graham Hambly chooses the Accountancy Body
of the Year, and that went to the AAT this time around.
CIMA’s Human Intelligence series, which has over 2.25m
watches, won the Best Use of Social Media award.
Among the editor’s other special awards winners were the
UK (Only) ACCA Distance Learning (Independent Study
Group) Facebook Group, and Avado for its work with Xero. A
very special award was also presented on the night to Polly
Thrasivoulou, after a few tears on both sides.
The top lecturer spots went to MMU’s Yasar Zahid and
Brigita Petrova, of LSBF, while the college awards went to All
Inclusive Advice and Training, the University of Liverpool and
Training Link.
Comedian Tom Ward brought the house down as he hunted
the room for the best dressed accountants (see page 30 for
the pics). Luckily for all of us the top three were more than
ready to give the packed house a twirl!
THE INDEPENDENT JUDGING PANEL
Rachel Kellet, AAT’s Head of Product Development
Sharon Machado, Head of Qualification development & All smiles at the world-famous awards venue, London’s Café de Paris
Content, ACCA
Shaun Robertson, ICAEW Director of Qualifications
Polly Thrasivoulou, ICB’s Head of Learning & Community
Engagement
Paul Turner, Regional Vice President, UK & Ireland at the
Association of International Certified Professional Accountants
Rebecca Dixon, our PQ of the Year, celebrates with friends Comedian Tom Ward knocks ’em dead!
18 PQ Magazine April 2019You can also read
