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The cost of qualifying as an accountant
with certain bodies has doubled in less
than 10 years, according to the latest
research from Natalie Sermon and
Sherridan Hughes.
In their book Working in Accountancy 2014
they estimate that to get an accountancy
qualification costs 20,000, which is, they say,
a lot, especially if you are already loaded down
with debt from your first degree.
Some accountancy bodies qualifications do
come in at less than 20,000 the cheapest
qualification to get is the ICAEWs, which at an
estimated 13,625 seems to offer best value for
money. Better still, employers have to pay the
costs, which means you have to be in a training
contract to start studying with the institute. The
drawback here is that you could lose your job if
you fail just one exam, particularly if you work
for a Big 4 chartered firm.
The costs were worked out over three years,
with the presumption that the student does not
have to resit any exams. The price of getting
CIPFA qualified was estimated at 14,500. The
average pass rate for CIPFA is a healthy 72%,
which the authors praise as the intake is not
selective. CIPFA, of course, provides most of the
education of its students through its own
education centres. Again, most students would
have employers paying some of the tuition fees.
What is surprising is the cost of getting CIMA
and ACCA qualified. CIMA will set you back an
estimated 19,000, and the ACCA a whopping
21,000 (if you have no exemptions).
With exam fees going up again this year you
can add some more to these costs.
Sermon and Hughes stress they have added
revision courses and practice exams to the costs
and these are clearly optional. But with pass
rates so low students risk added costs for failure
if they dont do it properly.
It is a harsh fact that many ACCA and CIMA
students who embark on their accountancy
studies often do not have the full support of a
benevolent employer. Fear of failure and the
costs involved could be adding incredible stress
on already stressed out PQs.
The ICAEWs top man, Mark Protherough,
said that tuition costs will vary based on how the
learning is delivered. That said, he thought the
figures show what fantastic value professional
accountancy qualifications represent for
students and employers alike particularly when
compared to a first degree or MBA.
As well as the ICAEW, CIPFA did get back to
us, but we were awaiting responses from the
other bodies as we went to press
Some 10 years ago PQ magazine undertook a
similar exercise, when we estimated the cost of
training at around 10,000.
February 2014
www.pqmagazine.co.uk / www.pqjobs.co.uk
HOW MUCH?
What will it cost you to get your accountancy qualification?
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Premier Training Centre Manager Jane Hasler said: We were so impressed
with the quality of applicants that we decided to offer three prizes instead of
one. The first prize has now been awarded, to 28-year-old Amy Scott, who put
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Amy, pictured, said: I am absolutely stunned to receive this chance to study
all levels of AAT. I intend to study as hard as I can and then hopefully use the
qualification to obtain a job in accountancy.
The other Premier Training winners were Louise Ball and Mat Elliot.
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comment PQ
News
08CIMA November results
What were the good and bad
papers this time around?
10Tutors roundtable Harness
the power of positive thinking
and improve your exam results
12ACCA widens syllabus
Integrated reporting to become
an examinable topic in 2014
Features, etc
06Mind your Ps and Qs ACCA
exam hall woes; why the gender
pay gap is embarrassing; and
our social media updates
14CIMA spotlight Big data has
generated its own jargon and
we explain what it all means
16Exam technique How to
bounce back from exam failure
18Roundtable discussion Top
lecturers discuss pass rates,
time management and more
22ACCA exam feedback Our
experts have plenty to say about
the December exam diet
25Indirect tax Ignore VAT at your
peril this is a key exam topic
27Financial management We
kick off a three-part series with
an article on sources of finance
28ICAEW focus Implications of
the 2013 Finance Act on the
institutes tax exams
30ACCA P6 Why knowledge of
the F6 syllabus is key to getting
a pass in the P6 optional paper
31ACCA F1 Kaplans experts
analyse this paper in detail
32Lets get technical Process
costing questions need faze you
no longer just read Gareth
Johns enlightening critique!
33CIPFA PEP How PEP can help
you to develop your career
34Careers Life at the ICAEW;the
red sneaker effect; and our
Book Club review
38Fun time The Google police;
10 great excuses; and our Great
Tax T-shirt Giveaway!
The columnists
Robert Bruce Audit changes could
have wide-ranging implications 8
Prem Sikka Economic recovery
should put people first 10
Carl Lygo Why Nigeria is the new
powerhouse in Africa 12
Subscribe to PQ magazine
Its FREE go to
www.pqmagazine.co.uk
ABC July 2012June 2013
32,463
Publishers statement: We have a
digital issue of the magazine which
is sent to 9,582 requested readers
Doing it by the book
Natalie Sermon and Sherridan Hughes book Working in
Accountancy 2014 is bound to cause a bit of a stir among
the professional bodies and top firms. On top of working out the cost of
qualifying (see our cover story) they have some insightful words to
impart about the Big 4 firms. Deloittte is said to have a friendly,
practical, work-hard-play-hard culture. However, arrogance is still a
common criticism levelled against the firm. PwC
comes in for even harsher words bureaucratic
and corporate is apparently how the firm is
described on the streets. Staff are also sometimes
called elite. We will do more on this next month.
The ACCA exams may seem an age away now but
8 February (results day) is moving ever nearer, so we
have lots of feedback about the winter diet. We cant
but help feel sorry for the poor Scottish students who
were again hit by adverse weather conditions.
Students trying to get to their F8 and P5 exams
woke up to the weather forecasters telling them to avoid travelling on
the roads. At the same time Network Rail shut down all train services
north of the border. So what would you do?
It is, of course, PQ magazine awards time. They take place on
27 January, and all the great and mostly good will be there. We had
four judges this year to pick our winners Professor Prem Sikka, CABA
CEO Kath Haines, CIMA Director of Learning Peter Stewart and last but
by no means least Nicky Burke from the AAT (see photo, above). They
certainly keep us on our toes and all have promised to be at the
awards. They decide who wins, so if you dont win talk to them and
they will explain why!
Good luck to all those shortlisted (the full list can be seen online),
and I will meet the winners on stage at Quaglinos.
Graham Hambly, PQ magazine editor (graham@pqaccountant.com)
CONTENTS
February 2014
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PQ have your say
ACCA F9 OMG!
Yes, I said OMG! I heard recent
comments from students saying
that the paper was considerably
shorter and there was far less to
read than in the past and they
were right. It was a Twitter paper!
I am not saying thats a bad
thing. The paper had good syllabus
coverage and the well prepared
student will pass easily. It had the
heart of an F9 paper.
However, I wonder why the
dramatic change to shorten the
length of F9. Possible reasons:
To allow students time to apply
their knowledge.
To improve pass rates.
To start the transition process to
the new exam format.
Students wont complain. Even
though the examiners dont want
students to use the text and social
media language in their answers,
they create a paper the equivalent
length of a tweet OMG and LOL!
Sunil Bhandari, freelance ACCA
lecturer, by email
The editor says: For loads more
feedback on the ACCA exams see
pages 2223.
Pay embarrassment
I have to agree with the writer of the
letter Pay gap is shameful (PQ,
January 2014). The problem,
however, is not just confined to
accountancy sexism affects every
sector, with women coming off
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PQ Magazine Fourth floor, Central House, 142 Central Street, London EC1V 8AR | Phone: 020 7216 6444 | Email: graham@pqaccountant.com
Website: www.pqmagazine.co.uk | Editor/publisher: Graham Hambly graham@pqaccountant.com | Advertising manager: Polly Thrasivoulou polly@pqaccountant.com
Associate editor: Adam Riches | Art editor: Tim Parker | Subscriptions: dom@pqaccountant.com | Contributors: Robert Bruce, Prem Sikka,
Tony Kelly, Ruhi Singha, 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 dom@pqaccountant.com
Published by PQ Publishing PQ Publishing 2014
I want exam flexibility
I have been watching the changes
at the ACCA with great interest
and find the idea of four sittings a
year a great one. However, the
exam centre locations cause me a
huge issue and I doubt I am the
only one.
On exam day I have to leave the
house by 7.30am for a 10am
exam this is to allow for traffic
and find somewhere to park,
along with staff from the local
businesses and all the other
student sitters. The
journey home normally
takes over an hour.
My husband takes
the kids to school and I have to
arrange childcare to pick them up
in case I get stuck in traffic.
A single exam therefore takes
five hours for travel, plus there is
the exam entry fee, loss of
earnings for that day and
childcare. However, this sitting,
my kids were ill and wanted me to
stay with them, so thats the exam
fee gone!
Four sittings a year may be a
step forward, so how about using
local ACCA accountancy firms or
universities as exam centres? I
would happily pay extra to stay
local it would save me money.
Name and address supplied
The writer of the star letter each month wins a fantastic I PQ mug!
Hot & Tweet
So 2013 year
ended on a low
note with one of our
tweets (sorry!): Accountancy
firms are closing at the rate of
one every three days as
regulation changes and the
recession continue to have an
effect. If you want to read
more on this then take a look at
the latest issue of our sister
publication, NQ magazine. Its
an e-mag, so you have to go
online, to www.issuu.com.
We were also busy tweeting
on Massive Monday (6 January).
It is, we are told, the most
popular day of the year for
people to go online to find a
new job and/or a new partner.
Now we can help you with the
job go to www.pqjobs.co.uk
but can do nothing about the
other (although we would always
encourage you to tell the truth
early in a relationship and
admit you are an accountant).
Then we all got into the PQ
magazine awards shortlist.
Armstrong Watson was all
#fingerscrossed for its
nomination for Accountancy
Team of the Year. There were
lots of other great tweets from
excited nominees. Weve started
following one of the shortlisted
PQs of the Year Kyle Tyrrell.
He describes himself on twitter
as: Est 1988, Insurance Rising
Star, Entrepreneur, Retired Chef
& Motorsport Fanatic, Stationery
Addict, Self-confessed
MacHead and LEGO Geek.
You can follow our tweets as
they happen @pqmagazine.
email graham@pqaccountant.com
We recently came
across a thread on
a CIMA LinkedIn
group questioning
how up-to-date
the CIMA college
list is. An Indian CIMA student
wanted to know how reliable the
CIMA Quality Approved College list
on its website actually is. He had
come across more than one
college in India claiming to be
CIMA approved but not on the
CIMA list. Interestingly, a number
of institutions were actually
named, along with claims that the
institutes accreditation process
was being used to mislead
students.
So are you on LinkedIn yet? We
recently had to tell an FD to get on
it. He knew he should be there, but
just hadnt bothered to get round to
it. Dont make the same mistake.
worse in the pay stakes every time
(with the possible exception of
modelling!). The current laws on
equal pay are not tight enough,
and unfortunately employees are all
too keen to exploit the situation.
As a male PQ, Im embarrassed
at the thought that some of my
extremely competent and hard-
working female colleagues are
ripped off in this way.
Name and address supplied
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*81%is the average pass rate for students that booked through BPPs Pass Ready Solution sitting Operational, Management and Strategic papers in the November 2012 exams. **See www.bpp.com/terms/l/bpp-payment-plan for details. *** To qualify for ten Professional Development Courses as part of the
Career Development Guarantee with BPP Professional Education Limited (BPP PE) free of charge, two ACCAor CIMApapers must be booked at the same time. This ofer does not apply to our Basics courses. Only certain online Professional Development Courses apply, the list is available at http://accountancy.
bppeloqua.com/cima. To qualify for a further online Professional Development Course with BPP PE of up to 500 in value; two years must have lapsed since the you attended the tenth free PD course, all ten PD courses must have been attended, you must have passed the two CIMA or ACCA papers purchased
as part of the ofer within that 2 year period and you will be required to demonstrate that your career has not developed in that 2 year period. Further conditions apply. The ACCA and CIMA Career Development Guarantee ofer will be available between 08.00amon 2 January 2014 and midnight of 1 May 2014.
See www.bpp.com/terms/l/bpp-career-development-guarantee for full terms and conditions Calls cost 3p per minute froma BT landline. Other networks and mobile costs may vary. +Based on a comparison of BPP students taking Taught, Revision and Question Day vs. Taught only for CIMAsitting Operational,
Management and Strategic papers in May 2013. BPP Pass Ready Solution is a package comprising Taught, Revision and ExamPractice courses for CIMA that allows the student a 70 discount fromthe list price and provides themwith Lifetime Pass Assurance. When making the booking, students can book
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for as long as they wish until they pass, again mixing and matching between UK centres and Online ClassroomLive. The ofer relates to all CIMApapers except C1-C5 and T4. BPP Pass Ready Solution will be available to purchase from08.00amon 6 December 2013 until midnight on 28 February 2014 for CIMA.
BPP Pass Ready Solution cannot be booked online but must be booked through BPP Customer Service Teamon 020 3131 6721. This ofer is made by BPP Professional Education Limited of BPP House, Aldine Place, 142 -144 Uxbridge Road, London W12 8AA. See www.bpp.com/terms/l/pass-assurance for details.
Te tutors were welcoming too and
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8
PQ Magazine February 2014
PQ news
The headlines are full of changes in
the audit sector. The professions
history is being up-ended. Audits
used to change hands only if a
particularly awkward chairman or
CFO took over at a company, or if
something really nasty happened.
And no one knew anything about the
facts behind these nasty events
because they would all be kept
secret.
Now there are changes being
reported all the time. Some people
think this very exciting, which for
audit it probably is. But the real
changes lie up ahead. Shifting an
audit from firm to firm, particularly
when it is only a few very large
firms that have the depth of resource
to do them, shakes things up. But,
overall, it actually doesnt change
too much.
What it does do, however, is
change perceptions. Audits are no
longer solid. They can move to and
fro. And people will start asking
questions about what more audits
can do. Moving them around the
large firms creates a much more
fluid market, and the protagonists,
both at the client companies and the
audit firms themselves, will be under
pressure to make more of what this
new market can offer.
It is a short jump then to the idea
that audit can become more
effective and more informative. The
pressure for audited information to
become a sort of continuous rolling
news from a company is bound to
grow and grow.
Social media charts continuous
change. So why not companies?
ROBERT
BRUCE
Changes to
audit will
have wide
implications
Robert Bruce is an
award-winning writer on
accountancy for The Times
The CIMA November results have
hit the streets, and P1 and P2
sitters will be pleasantly surprised
with the healthy rise in the success
rates for both papers.
The pass rate for P1 this time
around was 65%, up 13
percentage points on the May
results. The P2 pass rate was even
better, jumping to a whopping 72%
and rising from 47% just six
months before.
Our Exam Review Board had said
that compared with the last four
sittings this P2 paper was
straightforward (PQ, January 2014),
so we were hoping for improvement
pass rates. PQs had been worried
that the exam was deemed too
easy, with a lot of simple maths in
it. Feedback from P1 sitters was
also positive, with many feeling
extremely pleased with the paper.
I can finally show off all my hard
work, said one PQ.
All the other pass rates held
steady apart from F1, which is the
only paper with a pass rate below
50% 48% this time compared
with 57% last May.
The vagueness of questions
talked about by those sitting E2
may have played a part in its pass
rate of 51% this time around.
The good, bad and ugly
CIMA pass rates
on the up for P2

Get FM via an App
CIMA PQs will no longer
receive Financial Management
through the post (as reported in PQ,
November 2013). Instead, they can
download the monthly magazine via
an app. Members and exam-
complete students will still receive a
printed copy of FM magazine six
times a year. The app is available on
iOS and Android devices, and can
be downloaded from the Apple App
Store, Google Play and Amazon. The
promise is that FM will be updated
monthly with all regular content, plus
additional features including videos
and study material.

PQ CourseFinder
Dont forget before you sign
up for your next course to take a
look at our PQ CourseFinder. We
now have lots of cities and towns in
the UK covered. The list includes
Birmingham, Cheltenham, Leeds,
London, Manchester, Oxford,
Swindon and, slightly further afield,
Dubai and Gdansk (Poland). And
that list will get longer. It really is
the best place to find out how
much a course near you will cost!
Go to www.PQCourseFinder.com
ICAEW results in
Two Deloitte PQs (soon to be
NQs) from Birmingham dominated
the order of merit and prize list for
the November 2013 advance stage
ICAEW exams. Sam Roden and
Marc Kusicka walked off with three
of the top four prizes up for grabs.
Only Daniel Bush from Saffrey
Champness managed to gatecrash
the Deloitte party. Some 4,210
trainees took the November test.
As has proved the case on many
previous sittings, those who sat
more papers actually did better. So
PQs sitting all three advanced
papers achieved a 67% success
rate, while of those taking just the
business change paper, 47% will
have to sit it again.
In brief
The ACCA F5 was the best exam
in years and F7 the toughest for a
while, according feedback from
our exam review board tutors. The
other December papers the experts
highlighted as problematic were P2
and P3.
The disparity between the two
optional questions in P2 worried
our experts. One felt the P2 paper
covered some peripheral areas. The
tutors said P3 seemed a little more
difficult than recent exams. The
inclusion of more numerical areas
coupled with questions on fringe
syllabus areas would have made
this a difficult exam.
Feedback from PQs seems to
reflect these comments, particularly
for P2. Sitters said they were
Beauty and the
PQ accountant
Meet a possible Miss Black Country,
Amy Richardson. This PQ has
entered the regional heats for Miss
England and needs your votes. She
is aiming to promote beauty with a
purpose and feels being a PQ has
helped her get this far in the
competition. Amy (pictured) says she
entered for a bit of fun before
making it to the shortlist and then
being called for an audition. Now
she is in the grand final.
The event is being recorded for a
Channel 4 documentary, which is
due to be aired in June. The date of
the Miss Black Country final is 22
February at the Arena,
Wolverhampton. You can vote for her
later this month by going onto the
Miss England site.
Oh, and she asked us to tell you
she is also raising money for Variety
and you can help her at www.just
giving.com/Amy-Richardson92.
disappointed, and frustrated with
the P2 winter exam, and felt the
paper was messy. The worry is the
students dont seem to understand
what the examiner wants.
See pages 2223 for feedback on
all the papers. There is much much
more online in our study zone
where we have feedback from De
Montfort University, Manchester
Met, First Intuition and LSBF, and
there are also unabridged versions
from BPP, Kaplan and Becker.
CIMA NOVEMBER 2013 PASS RATES
NOV 13 MAY 13 NOV 12
UK GLOBAL UK GLOBAL UK GLOBAL
P1 Performance Operations 65% 57% 52% 46% 54% 49%
E1 Enterprise Operations 65% 55% 76% 63% 66% 55%
F1 Financial Operations 48% 48% 57% 54% 61% 59%
P2 Performance Management 72% 64% 47% 42% 53% 44%
E2 Enterprise Management 51% 43% 55% 51% 56% 47%
F2 Financial Management 63% 61% 73% 72% 59% 53%
P3 Performance Strategy 60% 48% 61% 51% 62% 54%
E3 Enterprise Strategy 58% 42% 46% 35% 64% 51%
F3 Financial Strategy 61% 50% 54% 48% 60% 52%
T4 Part B case study exam 64% 52% 60% 54% 54% 49%
ACCA and CIMA Open Days
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Feb, 10am 2pm
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Feb, 10am 2pm
10
PQ Magazine February 2014
PQ news
The government claims to see the
green shoots of economic recovery,
but is it sustainable? GDP is rising, but
it is the slowest recovery from a
recession. Nearly a million under-25s
are unemployed and most new jobs
are in low-paid sectors.
The recovery is predominantly
based on consumer spending, rather
than new investment or exports. After
years of wage freezes and disparities,
the top 1% of earners collects 10%
of all income paid in the UK and the
poorest 50% take home just 18%.
Faced with rising food, energy,
transport and house rental costs,
people have been raiding their
savings to maintain a desired living
standard. The UK household debt
stands at around 1.43 trillion and is
expected to rise to 2.12 trillion by
2015. This level of debt cannot be
serviced and provide a durable
economic recovery.
The UK public debt is 2.2 trillion,
so the prospects of a massive state
investment to boost the economy are
low. Companies will not invest unless
they are assured of profits.
So the state should boost peoples
purchasing power by reducing the
massive income and wealth
inequalities through progressive
taxation and redistribution policies.
Currently, the top 10% of the
population has wealth of 4.5 trillion
while the bottom 50% has only
1 trillion. However, the government
has shown no enthusiasm for
redistribution, and so the prospects
are for a faltering recovery.
PREM
SIKKA
Economic
recovery
should put
people first
Prem Sikka is professor
of accountancy at the
University of Essex
Two CIMA students have recently
come before the disciplinary
committee, with different outcomes.
Assel Balanafova was found guilty
of hiding notes in a handkerchief
during an exam. Balanafovas
student registration was cancelled
and she was ordered to pay 1,000
in costs. Kurukulasuriya Peries was
also found guilty of misconduct.
She was also caught with notes in
the exam hall. However, in this case
the committee accepted that she
had taken the notes in
inadvertently. Peries results were
annulled and her studentship only
continues after a gap year. She was
ordered to pay 500 in costs.
Harness the power
of positive thinking
Too many students become fixated
in the exam hall on what they cant
do. These bad bits seem to have
magnetic powers, said
top tutors at a recent
PQ magazine
roundtable. It was
suggested that
students cross out the
bad bits and
concentrate on what
they can do.
Our team of experts
were shocked at the
number of intelligent
and bright PQs who
forget all their exam technique skills
the minute they sit at the exam
desk.
They want students to sit more
exams under real exam conditions,
too. That means turning off the telly
and mobile (yes, turn it off), and
not using any textbooks. Oh, and
bullet point answers do not
mean you know your stuff
either.
Fear of testing
themselves also means
many students are not
finding out soon enough
they are not competent in
a subject, said one of our
tutors. In an ideal
situation, students would
know they would have a
reasonable chance of
passing as they would have
undertaken a series of assessments
and only sit the real thing when
they are totally ready.
For more see page 1819.
World Cup
draw relief
CIMA PQ duo
are disciplined
Musical chairs
Marks &
Spencer has
appointed
Deloitte as its
new auditors
after over 90 years with PwC. It
wasnt a great week for PwC as it
also lost the Unilever audit (to
KPMG), following on from losing
out to EY on the audits of BG
Group and Land Securities.
Record revenues for KPMG
KPMGs cost-cutting has paid off
as they help push UK profits up
by 27% this year to 455m. There
was a 3% fall in partner numbers
(602 to 583), and this pushed up
partner pay to 713,000. UK staff
will enjoy a 20% bigger bonus,
sharing the 72m pot. Audit saw
the largest increase in contribution
of the three functions (advisory,
tax and audit), rising by 16% to
178m.
New diversity guru
KPMG has recruited the man
behind making the London 2012
Olympic Games the most diverse
Olympics ever. Steve Frost
(pictured) was
head of diversity
and inclusion at
London games
organising
committee
LOCOG from
2008 and 2012.
The firm said
his appointment
underlined
KPMGs
determination to
drive its own diversity and
inclusion efforts forward, and
achieve a step-change in results.
EY sanctioned
The Financial Reporting Council
has reached a settlement with EY
and Alan Flintcroft, former
auditors to European Home
Retail plc and its subsidiaries,
including Farepak Food and Gifts
Ltd. Under the agreement, EY
and Flintcroft admitted that their
conduct fell below the standards
reasonably expected of both
ICAEW members and firms. EY
was fined 750,000 and
reprimanded. It was also ordered
to pay executive counsel costs of
425,000.
GET MARKERS ON SIDE
PQs beware your first task in
passing exams is to get the markers
on your side. PQ magazine met up
with a group of markers after the
recent exam sittings and they
admitted that after
being locked away in
a dark room with
400 scripts even tiny
things can set them
off. We do become
irrational creatures,
admitted one.
They had some
very sound advice.
For starters, keep
your paragraphs
short. You have to think
about how people read, and relate
that to the number of marks up for
grabs. Providing markers with a
natural break will help them think
about the marks they are awarding.
Dont write out the question
again, the markers pleaded, and
other bugbears include the
increasing use of text-speak. It is
definitely creeping in, said a top
marker. And handwriting is
getting worse. The markers
say they try their hardest to
read what is written but
some scripts just cant be
read.
They revealed that exam
sitters generally answer
question 1 first, when
perhaps it would be better
to start with a question that
plays to their strength.
What the markers all agreed
on is that marking exam papers
made them better tutors. We
understand what the examiner
wants and can try to put that over
to our students, said one.
Football mad ACCA students can
relax this summer as the World Cup
draw means matches start on
Thursday 12 June, immediately
after the exams. It is ICAEW
advanced level student who will
suffer most its a choice of football
versus revision for them!
One man to watch this summer
will be Uruguays (and Liverpools)
Luis Suarez. The scout who spotted
him recently revealed that Suarez is
really good at maths. In fact, Wilson
Pirez ventured that if football had
not worked he might have got his
teeth into becoming an accountant.
Expert tips: panellist
Dianne Ramdeen
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12
PQ Magazine February 2014
PQ news
The world of accountancy education
seems to be dominated by acronyms,
which to the uninitiated are mystical.
Think ACCA, CIMA, ICAEW, ICAS, AAT,
CIPFA to name but a few and that's
before we start referring to individual
exam papers (P1,P2, etc). So I was
pleased to visit Lagos just before
Christmas and add to my extensive list
of professional body acronyms.
I visited the Institute of Chartered
Accountants in Nigeria (ICAN), whose
acronym felt very empowering, and
they lost no opportunity in marketing
this Business in Nigeria is better
with an ICAN philosophy! I searched
to see if there was an accounting
technicians body in Nigeria with the
acronym ICANT, but that trap had been
avoided. I did get to meet with the
Society of Women Accountants of
Nigeria, SWAN fabulously apt, and
boasting 4,500 members. Obviously,
no trip would be complete without a
meeting with local employers PwC, EY
and KPMG. I was slightly alarmed to
hear that there is another BPP in
Nigeria, the Bureau for Public
Procurement (formed in 2007),
especially when I received an update
that BPP Nigeria was planning to
spend over $100 million on travel
expenses (thankfully not my BPP).
Nigerias was one of the fastest
growing world economies in 2013,
with GDP up around 7%. The national
debt burden is low at a debt-to-GDP
rate of 21%, compared with South
Africas 42.7%, the USs 106%, the
UKs 90% and Japans 225%. Foreign
reserves grew by over a third in 2013.
Nigeria is an economy on the up, but
with some infrastructure issues to sort
out. I received a very warm welcome
from all I met in Lagos people
certainly had that can-do attitude.
CARL
LYGO
Can-do
attitude is
helping
Nigeria to
blossom
Professor Carl Lygo is
chief executive of BPP
The ACCA has announced that
integrated reporting will become a
part of the exams from December
2014, making it the
first global body to
introduce this subject
into its qualification.
The move follows
the International
Integrated Reporting
Councils (IIRC) launch
of its new integrated
reporting framework at
the end of 2013. The
IIRC is the global
coalition of regulators,
investors, companies,
standard setters, the
profession and NGOs. Together
they have a shared interest in
encouraging value creation for the
long term, explained the ACCA.
The ACCAs director of learning,
Alan Hatfield, explained that the
ACCA has a history of innovation
and anticipating
trends. He pointed
out that the ACCA was
the first professional
accountancy body to
examine IFRSs and
the first in 2000 to
examine on the Global
Reporting Initiative.
Hatfield
emphasised that most
of the elements of
integrated reporting
are already included
in the syllabus, but
the ACCA has now taken the
opportunity to bring them together
and IR will form part of the
assessment going forward.
An integrated
qualification
TIME TO
BUDGET
Accountancy student Nicolas Rogers
has launched an app to help
students manage their money better.
Study Money allows students to
calculate their personal weekly
budget and keep a handle on their
ever-dwindling pile of money.
The UEA and ICAEW student
designed the app and put it on
crowd-funding site SellanApp,
receiving pledges from 19 investors
of $2,065.
Rogers explained: I kept hearing
stories from friends and my brother
about how difficult they found it to
stay out of their overdrafts at
university, as they received a large
loan at the start of the term. I came
up with the app idea when I was
using a spreadsheet on my phone to
manage my money. This was very
slow and difficult to use, so I thought
a dedicated app would be perfect.
Learn more about the app at
www.studymoneyapp.com.
Check out the
latest issue of NQ
e-magazine its
out now!
You can access it
online at
pqmagazine.co.uk
Sign up today to
receive your own
regular copy
HOW TO COPE WITH LIFE AFTER EXAMS
Karen Young, Director at
Hays Accountancy &
Finance offers advice on
career planning
AS WE PROGRESS into 2104, a
number of accountants will find
out this month whether they have
passed their exams. Passing these
exams is an important milestone
in a career in accountancy and
finance, but it is also vital that
professionals ensure they are
developing a range of skills and
experience to ensure successful
career progression in the future.
The start of a new year offers a
natural opportunity to consider the
next steps in your career and it is
useful to develop some specific
plans to support your continued
professional development. Even if
your exams results were not what
you hoped for, now is the time to
consider what you could do better
to achieve success next time. After
all, the decisions you make during
the early stages can have a direct
impact on your career later on.
Recruitment and competition for
talented professionals remains
high within the accountancy and
finance industry, so employers are
increasingly particular about the
kind of individuals they want to
hire. You will need to have the
right skills and experience to
match your qualifications, so it is
important that you try to gain
exposure to those opportunities
and functions that will help you
bridge the gap
between your
current and dream
role.
Having a role
model or a mentor
can be hugely
beneficial to
benchmark your
experience, and
a recruitment
consultant can
help you identify
any gaps in
your current
skills as they have a good
understanding of what employers
are looking for. Networking with
other industry experts and
following changes in the market
can give you further insights and
prove to be a valuable resource in
securing your future career.
Our recent research into the
DNA of a finance director found
that over two-thirds (68%) of FDs
would recommend getting
involved with operations, not just
the numbers. Some 36% also
cited commercial awareness to be
the most important attribute of a
successful FD. A vast majority
(93%) who had worked abroad
said that the experience had
benefited their careers. If you have
aspirations to get to the top of your
profession then it is never too
soon to start to build a portfolio of
skills that will
help you to
future proof your
career.
Most
employers now
incorporate
competency-
based questions
as part of their
interview process
and professionals
are expected to
demonstrate their
ability to work
across different business
departments. Focus on your
tangible achievements and think
of clear examples where you have
delivered value for your employer.
Be clear about what you want to
achieve and how, as this will
highlight your keen interest in the
role and the industry and ensure
you are a serious contender
whether it is for internal promotion
or to secure a new job.
For more information and
access to job opportunities visit
www.hays.co.uk/accountancy
Hatfield:
another
ACCA
innovation
Quality, Affordability, Employability
LCA Business School London, 19 Charterhouse Street, London EC1N 6RA
Tel: 020 7400 6772 Email: admissions@lca.anglia.ac.uk
ENJOY A SUPPORTIVE ACADEMIC TEAM
THAT CAN HELP YOU EVERY WEEK ON
CAMPUS ON A ONE TO ONE BASIS
Enrol now
and get ready for your JUNE 2014 exams!
Courses commencing: March 2014 & May 2014
ACCA Evening classes
ACCA Revision classes
O
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A
C
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C
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Lecturers Accessibility
Advice on Exam Techniques
ACCA - Manual included
Mock Exam with Feedback
Emphasis on Key Topics
ACCA

SPEAK TO YOUR
PERSONAL
COURSE ADVISOR
ON

020 7400 6772
or book online
www.lca.anglia.ac.uk
14
PQ Magazine February 2014
PQ CIMA spotlight
T
he volume and variety of data
available for analysis by
businesses is expanding
exponentially. Meanwhile, increasingly
powerful technologies have emerged to
enable more sophisticated data
management and analytics. These related
trends popularly summed up by the
term big data are combining to enable
accountants to unlock new sources of
insight and value.
However, along with these new
opportunities comes a plethora of
confusing buzzwords that can be a little
overwhelming! Getting to grips with these
terms will help boost your credibility and
enable you to discuss the topic with
confidence. To help with this, CIMA and
AICPA have put together a guide to key
terms to help when dealing with the world
of big data.
Data analytics .
This refers to advanced forms of analysis
that can be used to explore large volumes
of data and communicate insights. These
can be used to identify correlations and
develop algorithms to predict behaviours.
Data analytics with regard to structured
or enterprise data is well established. It is
used by many companies and
organisations to help make better
business decisions, and to test and
validate models or theories. There are
now high expectations of data analytics
with regard to new forms of unstructured
data.
Dashboards .
A data dashboard is a user interface that
organises and presents corporate
information in a way that is easy to read
and interpret. It can be used to aggregate
a range of data and KPIs, often visually,
BUSTING THE JARGON
for managers to monitor business
performance.
Data mining .
A set of techniques used to sift through
very large amounts of data. Data mining
uses artificial intelligence techniques and
advanced statistical tools (such as cluster
analysis and regressions) to reveal
trends, patterns and relationships.
Data visualisation .
Data visualisation is a general term used
to describe technology that enables
business managers to see trends and
data patterns. These tools often go
beyond the standard charts and graphs
used in Excel spreadsheets, using more
intuitive dials and gauges, geographic
maps, time-series charts, heat maps and
so on. Patterns, trends and correlations
that may otherwise be missed can be
spotted more easily with data
visualisation software.
In-memory processing .
In-memory processing enables
businesses to analyse large data sets
significantly faster than before, by
allowing data to be processed in the
systems memory instead of the slower,
traditional processing taking pace in the
hard drive.
Internet of things .
The internet of things describes the
connecting of everyday physical objects
to the internet, allowing them to provide
information or alerts as a node on the
network. This provides organisations with
a vast new source of information on every
aspect of their business, by connecting
and monitoring machinery, vehicles,
equipment, stock items and much more.
Predictive analysis .
Predictive analytics is the branch of data
mining concerned with forecasting
probabilities. It uses variables that can be
measured to predict the future behaviour
of a person or other entity.
Predictive analytics leverages an
organisations business knowledge by
applying sophisticated analysis
techniques to enterprise data. In
business, predictive analytics are often
used to answer questions about
customer behaviour and offer
suggestions on how best to target
resources for maximum return.
Unstructured data .
This term refers to any data that has no
pre-defined structure, and thus cannot
be easily stored within standard relational
databases. Examples include email, text-
based documents, images, videos and
call-centre recordings.
Peter Simons is a
technical specialist at
CIMA. For more see
http://www.cgma.org/data
PQ
Big data has brought with it
its own jargon. Peter Simons
supplies some definitions for
you to learn and impress your
colleagues with
16
PQ Magazine February 2014
PQ exam technique
I
f you fail an exam you will obviously
be disappointed. The fundamental
issue is what you do about it. If you
are not careful you will become negative
and try to ignore the result. You may use
displacement activities throwing
yourself into your social life, or working
harder in your job. In other words,
anything to avoid confronting the issue.
Then you re-sit in the vain hope that a
little extra work will get you through. This
is likely to lead to further disappointment
down the line. Difficult though it may be,
you have to take a failure as an
opportunity to look at the fundamentals
as to why you were unsuccessful and,
critically, what you would do differently
next time. Reasons for failing are many
and varied but they generally fall into a
few broad categories, including
commitment, time, understanding and
exam technique. My view is that for your
next attempt you must address all of
these and look at your study process.
By commitment I mean this: did you
really immerse yourself in the study
process the first time round? You have to
prioritise and to put your studies near the
top. Consider your other commitments,
such as work, sport, family and social life,
and decide how you are going to change
the balance for a couple of years to better
free up time and attention to your
studies.
Make sure that you involve others in
this process so that they understand how
important your studies are. If they are
true friends they will understand. Linked
to commitment is the amount of time you
devote to your studies and when this can
be carved out of your busy life. Keep a
diary and plan your study time week by
week, keeping a close eye on whether
you have kept up with the plan and, if
not, how you are going to revise matters.
It is possible that you did not truly
understand what you had studied and as
a result could not convert what you had
Failing exam is not the end of
the world, but if you dont
take lessons from it you are
doomed to repeat the same
mistakes, says Rob Sowerby
read or been taught in class into an exam
answer. I teach the sort of subjects where
there is a need to understand not just
what you are doing but also why you are
doing it. Many of my students say that
its easy when you do it, and so it
should be. The difficulty in these exams
is to be able to apply the underlying
techniques to a wide range of questions.
You will only be able to do this if you
practise exam standard questions and
fully debrief the answer with a view to
understanding why it is what it is.
Exam technique to me is a simple
process of converting knowledge and
understanding into marks. This is not
rocket science, but like everything, the
more you practise the better you will
become. Ensure that you practise at least
one whole mock exam and preferably
more than one. You need to have an
exam strategy where you know exactly
what you are doing in every minute of the
exam to best effect. Furthermore, look at
what you can do in the time limit you
are not looking to achieve perfection, you
are looking at a reasonable answer in the
limited time available.
In summary, you must use the setback
as an opportunity to change for the
better. It may be a blessing in disguise.
The key is to get the winning habit as
you pass you become more motivated,
leading to more commitment and a
virtuous circle of future success. You
know this makes sense so make it
happen!
Rob Sowerby lectures at LSBF
PQ
BOUNCE BACK
FROM FAILURE
Villain to hero:
David Beckham
was public enemy
number one when
he got sent off in
a vital World Cup
match. Now
Goldenballs can
do no wrong
Phillip Cyhan
AAT Levels 2, 3 & 4
Level 2 and 3 in 4
months!
Donna Smith
Completed levels 2, 3
and 4 in 8 months!
Levels 2 & 3 in just 8
weeks!
Kathryn Holden
PQ Distance Learning
Student of the Year
2013 Nominee!
Levels 2,3 & 4 in 10
months, despite major
eye surgery.
Rachel De Bose
London VQ Award
Winner 2012
Levels 2,3, & 4 in 8
Months!
Success Stories
Nick Craggs BKN Tutor of the year 2013!
We are particularly proud of one of our tutors who has just won the BKN Tutor of
the Year Award 2013. The response of his students was overwhelming and were
more than happy to vote for him, all them thanking him for his friendly support,
guidance and above all his patience, needless to say he won by a landslide!
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18
PQ Magazine February 2014
PQ roundtable
THEGREAT
RATEDEB
Are accountancy
exam pass rates too
low?
Paul Merison: I suppose you are asking if
I think the pass rates are at the wrong
level. I dont think the bodies are holding
the pass rates at artificial levels, it is all
about the quality of scripts. The ACCA
has open access and many students will
be self-studying. That means there are
lots of PQs out there who may have the
knowledge but just dont know how to
use it.
Kathy Rushton: That is such a difficult
one to answer. You have ICAEW pass
rates at one end and CAT at the other.
They are all so different. What is really
important is that the exams give
employers accountants who can do what
they want and need. I always thought the
AATs emphasis on competence was the
right way to go. There does seem to be a
volatility in the pass rates which worries
me. It suggests that some students who
would pass at one sitting may fail at the
next, that cant be right.
Dianne Ramdeen: I have looked at the
ACCA pass rates for 2007 to 2103. At F1
to F3 the pass rates are around 50%-
80%. At F4 to F9, the pass rates hover at
30%-50%. Then for the P papers they
go down again. I am worried there are
students who start out who will never
qualify. The professional bodies are
competing for students and their
exemption policies dont help here either.
Are the bodies simply setting students on
a treadmill of potential failure? Perhaps it
is time for the ACCA to provide more
detailed exam results. What about
providing first-time pass rates and
compare them to resitters. The ICAEW
provide that.
Tony Sharples: At the very basic level
pass rates are just the output. The input
comes from the student and his/her
ability and time spent studying and
rehearsing exam skills. You cant look at
pass rates in isolation. It is about student
engagement with the topic. Are they, for
example, spending sufficient time to get a
pass? I think they arent spending enough
time early enough so they can move from
the knowledge stage to the skills stage.
Mary Ofili: The pass rates do seem very
varied to me. The dilemma for students is
turning their knowledge, which can often
be very abstract, into what accountancy
examiners want. They are given too much
to learn and not enough time is spent on
how to apply these things in a practical
environment to help make it more real.
Look, students study hardcore and still
cant pass. Many of those studying full
time just dont have real experiences to
fall back on.
Do you think that
accountancy exams
are too long?
TS: Thats not the right question really. Is
there sufficient time to complete exams
in the time allocated, might be better. It is
true exams shouldnt be an obstacle
course and papers do differ. But I
genuinely believe that the examining
bodies are always vigilant on this
question. They do put more and more
material in to learn and then seem
reticent to take things out.
DR: I have to agree with Tony. The ACCA
papers are challenging but do-able, with
good preparation. The well-prepared
student will be OK and the clarity of what
is wanted is getting better.
MO: No, I dont think they are too long.
Students do, however, seem to struggle to
balance their time and control the
tension. How many over-burn their time
on Q1? It seems everyone does it at least
once!
KR: The physical thing, a three-hour
exam isnt a problem. Even four is OK,
and reflects what you have to do in life.
That said, the bodies all try to cram too
much into each exam. Then they say you
only have to get it half right (50%). My
preference would be for a more focused
three-hour exam with fairer requirements.
And that is what employers would want
too.
PM: Well, the ACCA paper I teach is
totally clear and repetitive. I dont see
how you can fail them! There is no
problem with the three-hour exam.
However, I would like to see two things.
The ACCA needs to provide a student
answer. I would also be happy to sit the
exam in real time and have my answer
(and mark) published by them too. They
need to show PQs what someone can do
in the time. The other thing I would like is
the introduction of continual assessment.
So instead of one exam every six months
you have more mini-exams on a more
regular basis. These would be sat online
and there would still be a final exam.
Time management
in the exam hall is
a key skill many
students say they cant
master. Any advice?
KR: Two things jump out here. Even
when students claim they are practising
they dont do it under exam conditions.
They do it with the TV still on and dont
PQ magazine brought together some of
the countrys leading tutors for a roundtable
debate centred on pass rates and time
management in the exam hall
Tony Sharples
BPP
Paul Merison
LSBF
Kathy Rushton
Kaplan Financial
Dianne Ramdeen
LCA
Mary Ofili
The Training Place
MEET THE TUTORS
Merison: PQs have
got to know how
to use their
knowledge
PQ Magazine February 2014
19
roundtable PQ
TPASS
BATE
replicate the exam hall conditions. They
tell me they made bullet points and fool
themselves thay they are prepared. In the
exam hall you have to learn that when
the time is up you must stop and move
on. Your mark hit rate at the back end of
a question is going to be low. Remember,
you can always go back to a question. If
you get nervous put your pen down and
give yourself as minute to regroup.
PM: Students seem to obsess about what
is in the paper they cant answer rather
than concentrate on what they can.
Everyone knows that 12 marks equals 20
minutes. But is it never about how much
you can write about a subject. True, you
arent going to get a perfect answer, but
remember, exams are not a test of
knowledge. It is how you use that
knowledge to answer the question set.
Time management is all part of the test
and is a key life skill.
DR: I often hear people say 1.8 minutes
per mark, but this is all wrong. You need
to set yourself up so you dont even have
to think in the exam. You have to pick out
the bits you know and tackle them
quickly, checking the mark allocation so
you dont spend 30 minutes on five
marks. Your overall strategy is vital and
you only get this through exam practice.
TS: The uncomfortable truth is there is
no magic formula here. No one can solve
this dilemma for you as these skills are
only developed through sweat and tears.
Ask any student to grade their knowledge
and they will say it is good. Ask them
about their exam skills and they often
cant give you a response. The real
judgement being asked is how much
content to deliver for each question.
Bodies are doing better here telling
students how many points are required.
MO: The exam environment is not a real
world and there is a disconnect here.
Dont underestimate the tension of
candidates. I know lots of competent
adults who have messed up on their time
allocation. They did all the practising but
it still just went out the window. You do
have to get into the exam environment at
home. That means no phone. But you
also have to accept that exam nerves
happen, however prepared you are.
If you could give
students one bit of
advice what would
it be?
DR: It is a marathon not a sprint. Train
hard, prepare and keep at it.
KR: Boring old question practice under
real exam conditions is what will get you
through. So why arent students doing
it?
MO: Go to all your lectures, do as many
past papers as you can you cant do
too many. Focus, dont get distracted by
life.
TS: Answer the key question, which is
WHY, and use the word because.
PM: Two things. Explain every point you
say. And repetition is the mother of
learning. It is a Russian proverb!
PQ
THE USUAL SUSPECTS
Paul Merison, Head of ACCA programmes, LSBF
Have you ever failed an exam? I sort of failed an exam but didnt! I failed the ICAEW tax exam by
3%, but because I had an average of above 65% in the other papers they shifted marks to the tax
paper and so I passed.
What is your claim to fame? I came third in a Daily Telegraph Sudoku challenge (all pre-Times). Bit
sad but I won nothing. I have also sang with one Mr Carreras.
Kathy Rushton, Head of Colleges outside London, Kaplan Financial
Have you ever failed an exam? No, but I was bang on one pass mark.
What is your claim to fame? Following on from Paul, I have also sang at the Albert Hall the Bolton
Albert Hall!
Dianne Ramdeen, Subject leader, LCA
Have you ever failed an exam? Not an ACCA one! I did have problems with the final level of the CFA
though. However, it wasnt a big thing and didnt seem as critical as it was when I was 21.
What is your claim to fame? I finished all my ACCA exams by the age of 19 and started lecturing at
20. Some 10 years on I am still doing it. I did also once start chatting to Katherine Zeta-Jones in
Bermuda thinking she was one of my ACCA students.
Tony Staples, Head of ICAEW, BPP
Have you ever failed an exam? I have a clean slate I was a good boy! Passing is good, but you have
to earn it.
What is your claim to fame? I will get back to you on that.
Mary Ofili, The Training Place, Director, The Training Place
Have you ever failed an exam? At university I was made to do a language course it is not one of my
strengths!
What is your claim to fame? Unfortunately, you have the pictures. I have spent some time in a photo
booth with the AAT President and Vice President dressed up in a silly hat.
Rushton (above
right): students
must practise
under exam
conditions
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Career Development Guarantee with BPP Professional Education Limited (BPP PE) free of charge, two ACCAor CIMApapers must be booked at the same time. This ofer does not apply to our Basics courses. Only certain online Professional Development Courses apply, the list is available at http://accountancy.
bppeloqua.com/cima. To qualify for a further online Professional Development Course with BPP PE of up to 500 in value; two years must have lapsed since the you attended the tenth free PD course, all ten PD courses must have been attended, you must have passed the two CIMA or ACCA papers purchased
as part of the ofer within that 2 year period and you will be required to demonstrate that your career has not developed in that 2 year period. Further conditions apply. The ACCA and CIMA Career Development Guarantee ofer will be available between 08.00amon 2 January 2014 and midnight of 1 May 2014.
See www.bpp.com/terms/l/bpp-career-development-guarantee for full terms and conditions Calls cost 3p per minute froma BT landline. Other networks and mobile costs may vary. +Based on a comparison of BPP students taking Taught, Revision and Question Day vs. Taught only for CIMAsitting Operational,
Management and Strategic papers in May 2013. BPP Pass Ready Solution is a package comprising Taught, Revision and ExamPractice courses for CIMA that allows the student a 70 discount fromthe list price and provides themwith Lifetime Pass Assurance. When making the booking, students can book
courses at any of BPPs UK Centres or via Online ClassroomLive or to mix and match between the two. When booking any followup courses through their Lifetime Pass Assurance students can return, free of charge, on any number of Taught and/or Revision and/or Exampractice courses for the particular paper
for as long as they wish until they pass, again mixing and matching between UK centres and Online ClassroomLive. The ofer relates to all CIMApapers except C1-C5 and T4. BPP Pass Ready Solution will be available to purchase from08.00amon 6 December 2013 until midnight on 28 February 2014 for CIMA.
BPP Pass Ready Solution cannot be booked online but must be booked through BPP Customer Service Teamon 020 3131 6721. This ofer is made by BPP Professional Education Limited of BPP House, Aldine Place, 142 -144 Uxbridge Road, London W12 8AA. See www.bpp.com/terms/l/pass-assurance for details.
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22
PQ Magazine February 2014
PQ ACCA Exam Review Board
Our panel of experts run the rule
over Decembers exams. So what
were the problems papers? Theres
loads more feedback online, too,
so check out our website
Becker Professional Education
The questions on F4-ENG and F4-GLO, of which
half were the same, had greater emphasis on
more peripheral academic topics than in recent
exams. The tenor of the papers seemed rather
picky at the expense of wider, commercially
relevant topics. Requirements were, however, very
clear, with more sub-division into parts that should
have assisted students. Properly prepared
candidates should have scored well.
F5 was the best exam in years. Questions were
challenging but fair. The absence of superfluous
information that confuses students should have
improved answers. Students are more likely to
have attempted all questions as the requirement
discuss was spread between them.
F7-INT was standard and a well-prepared
student should pass. The main concern was the
emphasis on IAS 17 Leases three questions (Q2,
Q4 and Q5) called for knowledge of this standard.
F8-INT was very straightforward and fair.
Although Q1 was in a different format to most past
exams the areas examined were core to the
syllabus. The change in approach to Q5 on the
auditors report was refreshing.
F9 was unchallenging and unbalanced; two
questions focused wholly on sources and costs of
finance, and there was nothing on business
valuation or risk management.
P1 continues to be a paper that a diligent
student who has worked through a good study
system and past exams, and read the examiners
reports, should have been able to pass easily.
P2-INT should have pleased question-spotters
prepared for the consolidated statement of cash
flows (35 marks). However, there was huge
disparity between two of the options questions; Q3
would have been very difficult for most students
whereas Q4 could have been tackled by a well-
prepared F7 student. However, as Q4 did not
concern a current issue or specific P2 topic
students are unlikely to have revised it.
P3 seemed a little more difficult than recent
exams. In particular, the case study required a
high level analysis of problems of project
management and culture. Section B questions
were more straightforward, although question-
spotters may not have been prepared for job
enrichment and Harmons matrix.
The P3 exam continues to be less about
strategy and more about analysis (as the paper
name suggests). Students should not have been
surprised by the 25 marks for analysis of
quantitative techniques, and those who had
studied the breadth of the syllabus and worked
the pilot paper and recent exams should have
found it fair. The absence of strategy models,
project management and PESTEL analysis is likely
to have been unpopular with resit candidates in
particular.
P4 students should have been delighted to see
just one page of scenario for section A this alone
should have improved what students can achieve
in the time available. However, 12 marks in Q4 for
a discussion of Musharaka vs Mudaraba is likely
to have made this question the least popular in
section B.
Although optional, the 25-mark question on
radio frequency identification devices in P5 was a
shocker! There is only one passing reference to
this topic in the syllabus (C3b). Although the rest
of the paper was fair, such an obscure question is
likely to have left even well-prepared candidates
with no real choice in section B.
At last, P7-INT contained questions that tested
candidates abilities to think outside the box, and
demonstrate the higher level skills that should be
expected to be associated with this paper. Q2 (due
diligence) should have been a great discriminator,
as inadequately prepared candidates would have
floundered completely on this.
BPP
F4 was a fair paper. Lots of the questions were
either very straightforward or had been tested
before (statutory interpretation, consideration,
duty of care, company types, statement of
capital, constructive and unfair dismissal,
exclusion clauses and charges). These were very
clearly worded and will have presented little
difficulty to students who had reviewed the past
two years F4 papers. To balance this, Q9 was
on a topic, authority of company secretaries, that
had not tested in an application scenario before.
This may have caused some severe difficulty.
F5 was a reasonable paper that should not
have presented too many problems for the well-
prepared student. All five areas of the syllabus
were represented in the five 20-mark questions.
About 50% of the marks were awarded for
discursive questions. However, there was a
mixture of discursive and calculation marks in
each question, a surprise as it was the first
paper by the current examiner that did not
contain one entirely written question.
F6 was fine, largely computational and in a
style expected, with some challenging aspects.
The F7 paper followed a similar format to the
one outlined by the examiner, and therefore was
largely as expected.
F9 was a fair paper overall, and well-prepared
students should pass. As expected, NPV, WACC
and working capital were tested, though as there
were two NPV calculations in the first question
totalling 19 marks and a further 10 marks for
lease vs buy in the fourth question, there
seemed to be more marks for discounting cash
flows/NPV analysis than in previous digests.
The second P1 paper of 2013 reflected the
first, with many similar themes examined in a
familiar and appropriate manner to this and
other past papers. Overall, scenarios and
requirements were consistent with previous
exams indeed, many requirements were close
to others set in past P1 exams, reinforcing the
need to review as many past paper questions as
possible when revising for this paper. Future P1
feedback
time
ACCA
PQ Magazine February 2014
23
ACCA Exam Review Board PQ
candidates should note that when testing ethics
the examining team can easily stray from the
familiar theories of Gray, Owen and Adams and
Kohlberg, to name but two. Traditionally, P1
exams have often seen all syllabus areas
examined in the compulsory section, then
focused on one of governance, risk and ethics in
each optional question. For this sitting, each
optional question included elements of at least
two parts of the syllabus, with governance
featuring in all four questions of the paper.
Candidates should note that success in this
exam will come from revising all parts of the
syllabus equally.
As always, P2 covered a number of topics
from this very large syllabus. The paper covered
some peripheral areas this time, mainly because
of the very technical areas covered in Q3 and
the lack of a mainstream current issues topic in
Q4. This was balanced by a straightforward Q1
and Q4 (although not a major current issue).
P3 was a reasonable paper with, as ever,
some tougher parts combined with more
straightforward sections. A well-prepared student
with good exam technique should have easily
picked up enough marks to pass comfortably.
This paper did, however, see a significant shift
back to calculations (after Junes paper which
had almost none). In addition, there were one or
two questions that required a very detailed
understanding of specific parts of the syllabus,
reinforcing the need for all students to have a
good grasp of the entire syllabus.
This was the second sitting of P4 under the
new exam structure. P4 is never an easy exam,
but now there is only one compulsory question it
does seem more manageable (especially when
the compulsory question is only one page long).
P6 was a reasonable exam that should have
posed few problems for the well prepared.
Finally, P7 again delivered a challenging but
familiar test of candidates abilities. Groups were
tested for the first time, and content on both due
diligence and internal audit was also tested,
having each appeared in articles written by the
examining team during the first half of 2013. UK
candidates sat a similar exam to their
international counterparts, although future P7
candidates should note that, in some cases,
background requirements and mark allocations
in the UK equivalent paper are going to look
different and make for a more challenging test.
Questions were presented in a similar fashion to
previous sittings and the syllabus was again
tested consistently. Time management and the
surprise factor of basing an entire question on
due diligence are likely to have been the major
issues for candidates here, although the balance
across both sections was still fair.
Kaplan Financial
F4 was a fair paper with good coverage of the
core syllabus. The questions were very clear in
their requirements. A well-prepared candidate
should have been able to pass this paper.
F5 was a very fair exam indeed. The
requirements were clear and the exam very
manageable in the time given. Questions were
set at an appropriate and consistent level of
intellectual demand and were consistent with
previous exams in style and content. All topics
examined are within the syllabus, and the exam
was balanced in terms of knowledge areas. Mark
allocations across the topics were appropriate. A
well-prepared student would pass this exam.
F6 was a challenging paper, which students
may have found time pressured, especially Q2
and Q3. Students may have felt that there was
an unusual emphasis on written elements,
especially as many of these involved more
planning or explanation rather than simply
stating a rule or date. It covered many
mainstream areas, although was somewhat
lacking on income tax, and also tested more
peripheral topics. A well-prepared student with
good exam technique should pass; a weaker
student may be thrown by Q3 and elements of
Q2 as well as the time pressure.
This session saw the toughest F7 paper for a
while. Q1 to Q3(a) were nice areas to score on,
but many would have struggled from there. This
highlights the importance of all-round knowledge
for F7, not just question spotting.
Students should have coped well with the first
half of the F8 paper, with mostly straightforward
and expected questions. Even well-prepared
students may have found the second half of the
paper challenging.
Overall, the F9 exam was fair in all respects,
with nothing too unexpected. It was time
pressured but not excessively so. There was a
good mix of core syllabus areas along with some
less commonly tested areas. The balance of
calculations and discussion was as expected.
A well-prepared candidate would have scored
well in the P1 paper this time. Some definitions
and application of key syllabus areas in
unfamiliar circumstances may have caused
some problems.
Q1 and 2 in P2 were fair and high marks
should have been scored here. Q4 was
unexpected and many students will have
avoided it. However, Q3 required extremely
detailed knowledge, which is difficult to achieve
when the P2 syllabus is so large. When
combined with the dense wording used by the
examiner, even the most well-prepared students
are likely to have struggled.
P3 moved toward an inclusion of more
numerical areas. This coupled with questions on
some fringe syllabus areas are likely to have
made this a difficult exam for many students.
This was the P4 paper that we have hoped for
for many years! Core topics covered in familiar
scenarios. Well-prepared students should have
had few problems with this exam.
P5 was a fair paper covering a broad range of
syllabus areas (many of which were tipped) and
was of a similar style and standard to recent
past exams. Well-prepared candidates should
have achieved a pass. However, some may have
struggled to keep their answers relevant to the
scenario or to keep their answers concise.
There was nothing unexpected in P6 in terms
of format and style of questions. Section A was
less time pressured than in previous exams.
There was more emphasis on CGT and IHT and
less on corporation tax, particularly groups, than
in previous exams. There was little on overseas
aspects of personal tax, which has been heavily
tested in the past.
PQ
Specific technical knowledge is key to you
having a successful career but these skills
alone are not enough. To create a difference
and gain that competitive edge you need to
possess soft skills, such as communication
and presentation skills. Whatever your role in
business your success will be directly related
to your ability to influence others. One of the
most important attributes for successful
people in business today is the ability to
present well.
Delivering accomplished presentations is a
vital skill in anyones armoury, whether you
are a student starting out or the head of a
large organisation. For accounting and finance
professionals you need to be able to bridge
the gap between the work of the finance
function and its impact on the wider
business. This is not always an easy task, the
technical nature of the subject matter may
make it hard for people to understand or keep
interest in. Your job is to deliver that
information in a compelling way that people
can interpret and will do something about
namely take action, give feedback,
communicate to wider teams, and so on.
Giving presentations is not something that
comes naturally to many
people, and as such this
requirement to do one
may create anxiety and
fear. Understanding how
to create compelling
presentations and deliver
them with impact is
something that people often need to work on
and craft their skills over time.
Taking a course in this area can help
greatly with these challenges and can help
you become a much more rounded
commercial accountant. These courses can
enhance your impact when you give a
presentation or speech, help lead a discussion
with colleagues or clients, or even enable you
to steer a conversation or interaction in a
specific way.
These dedicated presentation courses will
teach you the structure and basic theory for
delivering effective presentations. They will
help you develop confidence and overcome
nerves through learning the skills, tools
and techniques of presenting with power
through voice, body language, rapport,
timing and audience engagement. They
will also give you advice on the use and
creation of visual aids.
We at BPP Professional Education are
committed to going further for
students, and if you chose to study two
papers we will give you free access to 10
online Professional Development courses,
including Presentation Skills. This is all part
of our new Career Development Guarantee. To
see more details go to bpp.com/cimagofurther
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PQ Magazine February 2014
25
indirect tax PQ
Dont dodge the VAT!
Please dont neglect the key
examinable area of value
added tax, says Lisa Wakefield
S
ome students may consider VAT
to be less important than
income tax or corporation tax,
but it is one of the key taxes
that students need to understand to be
able to pass their exams. It is significant
for their studies, as well as being highly
examinable.
VAT is charged on business
transactions of a taxable person on the
transfer of taxable goods or services.
Taxable persons include sole traders,
partnerships and companies, and so a
VAT element could be included in any
computational question in a tax exam, or
could be a standalone question.
One of the key considerations for
students should be the implications of
not complying with the HMRC regulations
both in relation to submitting VAT returns,
and making payments within the required
timescale (usually one month and seven
days after the end of the VAT period).
If a taxable person submits their VAT
return late or makes a payment of VAT
later than the due date the person is
subject to a default surcharge. This is a
penalty based on the amount of unpaid
VAT.
The first time that this occurs the
person receives a notification of a default,
which is a warning and is known as a
surcharge notice. There is no penalty
charge at this point, but the notice lasts
for a period of 12 months from the last
time the person defaults. This is called a
surcharge liability.
While the notice is in force, each time
the person defaults (submits a return late
or makes a late payment), they will be
liable to a surcharge (penalty) and the
notice period will be extended to 12
months from the date of the most recent
default.
The level of penalties increases over
the period from 2% to 15%. If a business
is very small (turnover under 150,000)
HMRC will allow a support period of 12
months from the first offence.
In cases where the business has failed
to submit a return on three previous
occasions, and has no VAT payable or the
VAT assessment is negative (a VAT rebate
is due) there is a 30 minimum charge.
An example .
Jacquina Ltd is a VAT registered company
whose accountant decided to leave in
January 2013. Due to the change in
personnel, Jacquina Ltd has struggled to
submit their latest VAT returns and
payments on time.
The VAT return for the quarter ended
31 March 2013 for 7,200 was
submitted electronically on 14 June
2013. This late submission is the first
default for the company and is the point
at which the notification period
commences. Jacquina Ltds notification
period will run 12 months to 31 March
2014.
The subsequent return for the quarter
ended 30 June 2013 was also submitted
later than required, on 3 August 2013.
Jacquina Ltd paid the 8,105 VAT due
on the same day.
This is the second default (or the first
in the default period) and so a default
surcharge will be paid (see Figure 1).
HMRC do not collect amounts under
400 if they relate to first or second
surcharges. Although Jacquina Ltd will
not have to pay the 162.10 (it is under
the 400 limit) the surcharge notification
period will extend to 30 June 2014 (12
months from the most recent default).
A third return September 2013 was
also submitted late. This VAT return was
submitted on 8 November 2013 and the
payment of 8,140 was made on the
same day.
Although this payment is only one day
late it will still result in a default and
Jacquina Ltd will be required to pay a
surcharge for the late submission.
As this is the third default (or second
in the default period) the surcharge will
be charged at 5% of the unpaid VAT (see
Figure 2).
Jacquina Ltd will have to pay this
penalty as it is over the 400 minimum
limit. In addition the surcharge
notification period will be extend again to
12 months from the most recent default
(30 September 2014).
So we can see that VAT is one of the
areas where by not having sufficient
administration records in place that the
implications of not paying VAT are
significant to a business and that this
coupled with the common penalty
scheme would result in significant
financial consequences to a business
that could already be struggling.
Lisa Wakefield, De Montfort
University
PQ
31/03/2013
31/03/2013 30/06/2013 30/09/2013
31/03/2014 30/09/2014
30/06/2013
31/03/2014
30/06/2014
First default
Surcharge liability
notice issued
First default
Surcharge liability
notice issued
First default within a surcharge
period
Surcharge period extended to
30 June 2014
First default
within a
surcharge
period
Second default within
a surcharge period
Surcharge penalty
2% (first offence) x 8,105
= 162.10
Surcharge penalty
5% (second offence) x 8,140
= 407
Figure 1
Figure 2
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JIEBand CPI
T
he onset of the credit crisis in 2008
allowed sources of finance to take on
huge relevance for aspiring finance
professionals. For me, the credit crisis
transported the subject from the study manual to
every day life. I continue to derive great
enjoyment from lecturing on sources of finance.
Not out of some macabre enjoyment of failing
capitalism, but in the hope that our memories of
the disastrous financial decision making, by
those officials who simply should have known
better, are not too short! We shall see.
Despite the far-reaching implications of the
subject and individuals personal viewpoints,
there remains the need to be able to pass the
exam in front of you, in the time allowed. Being
accountancy exams, this inevitably involves some
use of numbers. Speaking to the examiners
themselves, you learn quickly that the
unsuccessful candidate is often the one that is
reticent to use the numbers given to them in the
question. This remains true for sources of
finance questions. When invited to comment on
the boards decision between debt and equity
finance, the examiner will, more often than not,
present you with an income statement and SOFP
the key to success is using them.
The most difficult issue I have found is where
to start? and then, once started, how far to go?.
The key, of course, is to keep it simple, but still
discover the main elements of the story that will
allow you to form an opinion. When faced with
sources of finance dilemmas, I believe it is
essential you are confident with the key ratios,
namely:
Financial gearing (debt/equity) as a % (high
gearing suggests high financial risk). The
examiner may expect you to use debt/(debt +
equity) and/or use market values rather than
SOFP values. They will indicate this either
explicitly or by how they calculate the
comparative.
Interest cover (PBIT/Interest) number of times
PBIT covers the current level of finance charges
(an indication of comfort with which interest
commitments can be met but also the link
between financial and business risk see
subsequent article in next issue).
Operational gearing (Operational fixed
costs/Total operational costs) as a % (high
gearing means high proportion of operating costs
(NB: not finance costs) that are fixed which
suggests high business risk. Indicates PBIT
sensitivity to changes in sales volume).
Key definitions . .
Youll also need to know key definitions, namely:
Financial risk: Variability of profit after tax
caused by the level of finance charges as a
result of the level of debt finance in the capital
structure (ultimately putting pressure on
shareholder dividends).
Business Risk: Variability of profit before interest
and tax (profit from operations) as a result of the
type of industry/sector/business we operate
within.
With regard to ratios, students need to
practice them so that in the exam itself, there is
no hesitation as to what numbers to look for.
Confidence in the calculation allows you to
demonstrate confidence in your opinion. You
must be sure of not only how to calculate ratios
but what they claim to demonstrate.
With definitions, learn them remember the
reader needs you to provide a context before
applying it to the specifics of the question. Look
at past papers and appreciate how the theory is
applied to the scenario given. Notice the
specifics that the examiner uses in the
suggested solutions this is where the high
marks are.
In the next issue of PQ magazine I will provide
illustrations of how these issues are typically
examined in practice.
Matt Holden, Reed Business School
PQ
27
financial management PQ
PQ Magazine February 2014
A RISKY
BUSINESS
In the first part of a new three-part series, Matt Holden outlines what
youll need to know for sources of finance decision making questions
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28
PQ Magazine February 2014
PQ ICAEW focus
be eligible for entrepreneurs relief. The
ownership period (required to be at least
one year) runs from the date of grant, not
exercise. In addition, there is no 5%
ownership requirement.
IHT spouse exemption ..
Where a UK-domiciled spouse makes a
transfer to a non-UK domiciled spouse
there has been an historic limit on the
intra-spouse exemption of 55,000. This
has now increased to 325,000 to match
the nil rate band. There is a new election
available for the non-domiciled spouse to
elect to be UK domiciled for IHT (not IT
or CGT) so that the limit no longer
applies (however, this means the person
concerned is then liable to IHT on
worldwide assets). A tax planning
scenario in the BP:T exam could be
based around this.
Cash basis small business s
An unincorporated business with
turnover below the VAT registration limit
can calculate taxable profits on a cash,
rather than accruals, basis. Even capital
expenditure (other than cars, where
capital allowances are available) is
deductible. Cash deficits (i.e. losses) are
carried forward against future cash
surpluses (i.e. profits).
Fixed rate deducxtion ..
All unincorporated businesses can take
advantage of fixed rate deduction for
expenses. In a similar way to the well-
known business mileage limits, there are
now statutory limits for using part of a
home for business purposes, or for
working from home.
Disincorporation relief ..
My students have been talking about this
for years. The problem is it didnt exist
until now! Where an incorporated
business is transferred to its
shareholder(s), assets are now
transferred at the lower of cost (or TWDV
in the case of goodwill) and MV. This
helps alleviate the problem of double
taxation, which occurs on the
distribution of assets.
R&D ..
A new relief called above-the-line R&D
relief is now available to large companies
to choose instead of the 30% enhanced
relief. Under this regime, the company
deducts R&D costs as normal, but adds
a 10% credit to their profits (above the
line) and deducts the same 10% credit
from their tax liability (below the line). For
a 23% company the net impact is an
overall 7.7% saving (23% of 10% minus
10%). This compares favourably to the
6.9% saving for the enhanced relief
(23% of 30%).
All in all, it was a relatively interesting
Finance Act with some juicy topics for
the examiners to get their teeth into.
Dont forget to review your rates and
allowances as well; in particular, look out
for a new top rate of IT, a new AIA limit,
reduced main rate of CT and some new
CO2 limits for cars.
Matt Dyson, First Intuition
PQ
IN WITH THE NEW
Matt Dyson outlines the key
changes to the ICAEWs tax
exams for 2014 in the light of
the Finance Act 2013
K
ey changes within the
Finance Act 2013 will
impact ICAEW tax exams in
2014. Rather than bore you
with a summary of all the new tax rates,
bands and allowances (which are easy to
find in your tax tables) I will concentrate
on those changes that are most likely to
get the examiners excited and therefore
are likely to feature in questions.
Overseas aspects ..
HMRC has been teasing us for years with
proposed changes to these rules. Watch
out, these rules are highly likely to be
tested in the Tax Compliance, Business
Planning: Taxation (BPT) and Advanced
Stage examinations.
New legislation replaces the old
residency tests. What follows is a
summary: you must refer to your ICAEW
learning materials for the nitty-gritty.
Automatic overseas tests: if an
individual meets one of these four tests
(e.g. spends fewer than 46 days in the
UK), he will be a non-resident.
Automatic UK tests: if the individual
meets one of these four tests (e.g. 183
days or more spent in the UK), he is
automatically resident in the UK.
Sufficient ties tests: if the individual
does not satisfy one of the two tests
above, it is necessary to consider whether
he has sufficient ties to the UK to render
him UK resident. There are four ties to
consider; the more days an individual
spends in the UK, the fewer of these he
needs to satisfy.
The good news is that the concept of
ordinary residence has been abolished!
EMI scheme ..
Good news too for those with EMI
(Enterprise Management Incentive
scheme) shares they are more likely to
Check it out now the all-new NQ!
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It's packed with articles from industry experts that will help you do your job better
Sign up today via the PQ magazine website www.pqmagazine.co.uk
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Mark Sadler, Reed ACCA student
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30
PQ Magazine February 2014
PQ ACCA exams
Yvonne Rennison explains the
ins and outs of choosing
ACCA Paper P6 Advanced
Taxation as an option
S
o, the December exams are out of
the way and you are on the final
hurdle. You have decided to
choose ACCA paper P6 Advanced
Taxation as one of your option papers.
As a lecturer of ACCA Paper P6 for
many years (16 in all!) my advice is that
you must refamiliarise yourself with the
ACCA F6 material (if you were exempt
from paper F6, you must familiarise
yourself with the syllabus). Why am I
suggesting this? Well, the P6 syllabus
includes the F6 syllabus and there are
some easier marks on the P6 exam paper
for F6 material. For example, in the past
few sittings of P6 the following areas have
been tested, all are straight from the
paper F6 syllabus:
VAT cash accounting scheme.
VAT annual accounting scheme.
Advantage and disadvantages of group
VAT registration.
F6 knowledge is P6 key
Balancing adjustments on cessation of an
unincorporated business.
Definition of furnished holiday letting
accommodation.
Inheritance tax payable on a lifetime gift as a
result of death.
These are just a few of the F6 syllabus areas
tested at P6, and allow students to score some
easier marks on a technically difficult paper.
So if you are choosing P6 I would advise that
between now and your studies beginning you revise
your F6 material. Do not forget that for the June
2014 exam you will be dealing with a new Finance
Act (FA 2013).
Look at the F6 examiners technical article on
FA2013 to get you started. Its at
http://www.accaglobal. co.uk/en/student/acca-qual-
student-journey/qual-resource/acca-qualification/
f6/technical-articles.html
Yvonne Rennison is Principal Lecturer (ACCA F6
And P6) at Manchester Metropolitan University
Business School
PQ
MMU paper F6 and P6 courses begin in February
2014. See the course brochure For details see
http://www.business.mmu.ac.uk/acca/index.php
ACCA F1
Pass rate: 72% (June 2013)
Technical difficulty: 4/10
Weighting of calculations: 0%
(though some basic calculations are
theoretically possible)
Weighting of discursive elements: 100%
Exam technique: 3/10
The syllabus . .
The ACCA F1 syllabus is designed to help
students understand key principles relating to
organisations that they will come across in their
accountancy career and which will be developed
in more detail throughout the rest of their ACCA
exams. Students who are in work may find this
exam easier than those just starting out as they
are likely to be more familiar with some of these
concepts. F1 has five key syllabus areas:
A
The business organisation, its
stakeholders and the external environment
This section of the syllabus includes a number of
relatively basic areas, such as types of
organisation and stakeholder analysis. However,
the largest section focuses on how organisations
analyse their environment. This includes a
relatively complex economics section that may
require significantly more work for many
students in particular micro-economics, which
includes issues such as price elasticity of
demand and types of market.
B
Business organisation structure, functions
and governance
This section of the syllabus includes detail on
organisational structure and culture. While these
are relatively straightforward topics, students may
need to spend a bit more time on the new
syllabus areas relating to boundaryless
organisations and shared service approaches (for
exams from February 2014 onwards).
The remainder of this part of the syllabus
covers committees and governance and these
are easier topics to study.
C
Accounting and reporting systems,
controls and compliance
Section C focuses on what accountants actually
do in the organisation including the accounting
function itself, as well as the rules and laws that
accountants have to follow. Internal controls are
included in this section and this is likely to be an
area students struggle with a little more,
especially if they need to apply it to a scenario in
the exam.
D
Leading and managing individuals and
teams
Here the syllabus examines how to manage staff
within the organisation looking at leadership,
motivation, training and appraisal of workers.
There arent too many complex issues here, but
students will have to learn a large number of
models and theories. Unfortunately, anything
can (and will) come up in the exam, so its
important to study this section carefully.
E
Personal effectiveness and
communication in business
This section looks at how individuals (whether
students or workers) can use their time
effectively and communicate clearly with others.
It includes issues such as time management,
conflict and types of communication. There are
fewer models to memorise in this part of the
syllabus and students may therefore find it an
easier one to learn.
F
Professional ethics in accounting and
business
As the name suggests, this looks at professional
ethics. It is a relatively compact section of the
syllabus, but is still likely to form several
questions in the exam, meaning its really
important for students to learn this topic. In
particular, its vital that students are able to show
their understanding of the IFAC code of ethics,
which is a fundamental concept.
Sitting the F1 exam .
The F1 exam is made up of two sections (for
exams after February 2014). Section A is a mix
of sixteen one-mark and 30 two-mark questions
(mainly multiple choice or multi-response
questions), while section B is made up of six
four-mark multi-task questions, which may be a
little more in-depth. Students have two hours to
complete the exam.
Most questions will be bookwork, to see
whether students have learnt the core models
and principles in the syllabus. However, there
will be a number of questions that include short
scenarios where students will have to show they
can apply their knowledge to real-world
situations.
While the majority of the concepts in the
syllabus are not technically difficult (and are not
examined in depth), there is a large amount of
theory that must be learnt.
The key to passing this exam is to have a
basic working knowledge of as many of the
models as possible you have to know your
Belbin from your Tuckman!
It is also extremely important that students
read the questions and answer options carefully
to ensure that they are not confused by similar
sounding answers.
Thanks to Kaplan for this article
PQ
31
ACCA F1 paper PQ
PQ Magazine February 2014
THE ATO FOF F1
In a new series of articles, Kaplans
experts run the rule over ACCA
exam papers, starting with F1
I
f I ran a factory making custard I would
probably put on a lot of weight (I dont really
understand people who put cream on their
crumble!), but I might also consider using process
costing as a way of recording the costs that I am
incurring. Process costing is useful for dealing with
continual production processes; situations where
rather than making separate units of production, a
large volume is produced at the same time. A
custard factory wont produce one litre of custard
at a time; they will produce many thousands of
litres in one go.
The process account .
The process account is a ledger account (or T account) that records the
costs involved in running the process for a period of time.
Inputs to the process are shown on the debit side. Inputs will include
costs incurred for raw materials used (milk, eggs and custard powder),
labour paid (the wages of the cooks mixing and stirring the custard) and
overheads (the electricity to heat the custard and the rent of the factory).
Outputs are shown on the credit side. Outputs will primarily include the
finished goods produced, so the litres of custard ready to sell. We need to
be able to identify a cost of each unit of output so that we can charge an
appropriate (and profitable!) selling price.
Normal losses .
Normal losses are what we expect to lose from the process. No process is
perfect. Spillage and evaporation will mean that if we input 1,000 litres of
ingredients we will not get 1,000 litres of finished custard out of the other
end.
Normal losses are often expressed as a percentage of the input
materials. So if our normal loss was 5% of the 1,000 litres of ingredients
we would expect to lose 50 litres (perhaps spilled on the floor).
Normal losses will be on the credit side of the process account as they
reduce the amount of finished goods that will be available to sell.
Normal losses are always valued at any scrap value they can be sold for.
If we can scrape the 50 litres up from the floor and sell it to the local fast
food restaurant for 0.50 per litre, then it would be valued at a total of
25. If no scrap value is given assume that it is nil.
Abnormal losses .
Sometimes we may lose more than we expected (maybe our
staff were clumsier than normal and spilled more than 50
litres of custard on the floor). If they actually spilled 70 litres
then they would have spilled 20 litres more than the 5% that
was expected so the abnormal loss would be 20 litres. Note
that the normal loss would still be the 50 litres expected.
Abnormal losses will also be on the credit side of the
process account as they also reduce the amount of finished
goods available.
Abnormal losses are valued at the same cost per unit as
finished goods (see below).
Abnormal gains .
If we are lucky our staff may work very carefully and we may lose less than
expected. If they only spilled 40 litres, this is 10 litres less than the 5% we
expected so the abnormal gain would be 10 litres. Note that the normal
loss would still be the 50 litres expected.
Abnormal gains will be on the debit side of the process account
because they effectively increase the amount of finished goods available.
Abnormal gains are valued in the same way as abnormal losses; at the
full cost per unit of finished goods (see below).
Calculating the cost per unit of finished goods .
To work out cost per unit of finished goods we use =
Cost of inputs scrap value of normal loss
Units of input normal loss units
So adding to the figures we used above, lets say that the total cost of
inputs was 1,200 then we could calculate the cost per unit as:
= 1.24 per unit to the nearest penny.
Remember that this cost per unit is used to value units of finished goods
and also any abnormal items (whether they are gains or losses).
Heres one for you to try:
Inputs to a process are as follows:
5,000 units of raw materials costing 10 per unit.
35,000 of direct labour.
15,000 of overheads.
Normal losses are expected to be 10% of input materials and can be sold for
5 per unit. The actual output from the process was 4,200 units. Calculate
the cost per unit of finished goods and complete the process account for this
situation. Round your cost per unit figures to the nearest penny.
Once you have had a go watch me work my answers at
www.firstintuition.co.uk/blog.html. For other tips and advice, including links
to useful study resources follow @aattoptutor on Twitter.
Gareth John is a tutor and director with First Intuition and helps to
manage their AAT online learning programme. He was PQ magazine
Accountancy Lecturer of the Year in 2011
PQ
32
PQ process costing
PQ Magazine February 2014
In the latest in his series of technical articles, Gareth John explains all you need to know about process costing
LETS GET TECHNICAL
INPUTS
Process account
Units Units
Raw materials
Direct labour
Overheads Finished goods
OUTPUTS
1,200 25
=
1,175
1,000 units 50 units 950 units
PQMAGAZINE
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F
rom our Professional Experience Portfolio
(PEP) to continuing professional
development (CPD) programmes, CIPFA
provides a focused and logical framework to
keep you learning as your career progresses.
Both PEP and CPD have been built with
flexibility in mind, so completing your workplace
log or your learning and development record
card shouldnt be a chore. So what exactly are
you required to do for your PEP and how will this
help you when it comes to completing CPD on a
yearly basis?
Getting into the habit of completing your PEP
as you progress through the CIPFA qualification
lends itself well for the completion of CPD. PEP
was introduced at the beginning of last year and
replaced the Initial Professional Development
Scheme (IPDS) scheme; it has been designed to
be a robust, practical scheme of workplace
experience, that encourages a focused approach
to ethical considerations encouraging students
to think about the wider implications of their
accounting decisions. CIPFA encourages all
students to begin the process of maintaining
their log of workplace experience the moment
they start their studies. Completing and updating
your workplace log as well as your CPD learning
and development record card on an on-going
basis allows you to identify any gaps in your
knowledge, and directs you to a range of
activities to help overcome them.
A good reminder . .
Maggie Donald from Grant Thornton reflected on
her portfolio: I found PEP a good reminder of all
the work I had undertaken during my training
contract; I really noticed how far I had come. Id
agree with everyone who told me to begin the
process of keeping my workplace log when I
started, and not leave it until the end. It didnt
actually take me too long to pull the whole
portfolio together. I felt it was quite an impressive
collection at the end and something I was proud
to have completed.
By recording your participation in these
activities, many of which you may already be
involved in, you will receive tangible proof of your
commitment to on-going development; proving to
your current and potential employers that you
are serious about your career in accountancy
and about maintaining your knowledge and
skills.
It also means that students who have passed
all their exams are just one step away from
becoming a fully-fledged CIPFA member, as you
can now submit your portfolio when it is ready,
receive feedback and then apply to become a
CPFA immediately after completing and passing
your final exams.
So what are the CIPFA examiners looking for
when they receive your PEP submission? Here
are some tips that should help:
Dont consider PEP a chore get into the habit
of keeping your log up-to-date as you progress
through your studies.
Read the student guide it is very clear and
will help you achieve your goal.
When choosing the activities to write about
remember the examiners are interested in
examples showing your growth and learning.
The learning you have been through and what
further learning you require this should flow
nicely into CPD.
Your PEP portfolios should include:
A log of 400 days of relevant work experience.
Written content on the completion of three
workplace activities.
A reflective statement of learning from the
whole training period, including future personal
learning and development goals.
Dont forget CPD . .
CPD is also essential to your continued
effectiveness as a chartered accountant. Beyond
this, it also drives recognition of the whole
industry, so if you do want to change the
direction your career is taking then CPD courses
are a step to progressing up the career ladder.
Whatever stage youre at in your career, were
here to ensure you can access the most up-to-
date knowledge, resources and opportunities
and support to keep you at the forefront of the
accountancy profession. The particular
knowledge and skills you include in your CPD
will be decided by you and will be influenced by
the sector you are employed in, where you are
on the career ladder and your future career
plans. It will also vary depending upon whether
you are employed in a traditional accountancy or
audit role, in a general management position or
one of the many other roles which CIPFA
members are employed in. The scheme has
been designed as a framework to aid
development regardless of employment sector.
Everything from external conferences to
internal development and mentoring can count
towards your learning and development record;
youre probably doing many activities already.
The programme enables you to remain
professional, effective and compliant by ensuring
you stay up to date in the fast-moving world of
accountancy.
It allows you to track your progress and
receive recognition for your achievements,
helping to increase confidence and giving you
additional credibility as a chartered accountant.
So its a great way of standing out from the
crowd in a competitive job market too.
To find out more about PEP and CPD visit
www.cipfa.org
Thanks to CIPFA for this article
PQ
33
CIPFA spotlight PQ
PQ Magazine February 2014
From PEP to CPD, taking control of
your development in your working
life can help take you to the top
PEP UP YOUR
CAREER
PQ Magazine February 2014
PQ careers
Hazel Rogers, 32, is the institutes Learning Delivery Manager, responsible for learning
materials and relationships with tuition providers. Based in Milton Keynes and London,
she has worked there since 2001. Hazel has a degree in Humanities from the OU
Life at the ICAEW
The workplace: the red sneaker effect
Accountants are known, rightly or wrongly, for their
conformity when it comes to business dress. For
many, nonconforming behaviour would be deemed
to be too risky what would the client think? Or,
perhaps more importantly,
what would the boss think?
Next time you are tying your
laces and straightening your
tie you might want to think
about the Harvard Business
School research, entitled The
Red Sneakers Effect. Authors
Silvia Bellezza, Francessca Gino
and Anat Keinan wanted to examine how people
reacted to nonconforming behaviour, such as
wearing red sneakers in a professional setting.
They found that wearing colourful trainers actually
led to positive inferences of status and competence
in the eyes of others the complete opposite of what
many might assume. When one of the researchers
wore those special red sneakers with her business
suit people presumed she charged higher fees and
had a bigger client base.
So, it would seem that people confer higher status
and competence to nonconforming individuals. The
conformers are just seen as the lackies.
Richard Branson and Mark Zuckerberg are two
individuals who rally against the suit-and-tie brigade.
The Washington Post recently pointed out that
Zuckerberg wore his trademark hoodie to investor
meetings before Facebook went public, and
many on Wall Street were not impressed.
They were worried that he was showing
disinterest and immaturity.
Lecturers may also have to start dressing
down. It appears college students are more
likely to think a professor is from a top-tier
university if they sport a T-shirt and a
beard, rather than those all clean-shaven
and wearing a tie. It really is a case of they
are such a high-status person that they dont need to
confirm to any rules.
The authors point out, however, that the casually
dressed professor only received great respect when it
was known that they were from a top institution.
The more formally dressed professor was seen as
having marginally more status when that fact was left
out. That means that only when a more formal code
of conduct is expected will violating it be seen as an
act of autonomy.
What does it all mean? Well, if you are the CEO
then you can wear what you want. Buy the red
trainers, but make sure you have a pair of black flats
to change into just in case.
34
What time does your alarm
clock go off? 6am7am
depending on whether Ive
decided to exercise or not!
Whats the first thing you do
when you get to your desk? I
get a coffee and talk to the team
while my netbook loads up.
Whats on your desk?
A surprising array of tacky items
colleagues have bought for me
from their holidays. People see
who can buy the tackiest gift.
Whats the best thing about
where you work? The variety of
work and the people I get to work
with both at ICAEW and our
students, tutors and employers.
Wheres your favourite place
for lunch? Strada although Im
upset that they have taken my
favourite pizza off the menu.
What (or who) can you see
when you sit at your desk?
Apart from my tat shelf an open
plan office full of people working
hard. Oh, and Argos head office.
Which websites are your
favourites and why? Social
media sites such as Facebook,
Pinterest and Twitter. And
dogshaming.com.
Which websites do you use
for work? All of the tuition
providers sites, the ICAEW
website, and Professions Week,
Professions for Good and the
National Apprenticeship Service.
How many hours a week do
you spend in meetings? Ten.
What time do you leave the
office? Around 5.30pm.
How do you relax? I love a good
drink and catch up with friends.
Whats your favourite tipple?
White wine and soda.
How often do you take work
home with you? Occasionally
if Im working on a big project with
a tight timeline.
What is your favourite TV
show? EastEnders is a must, and
Breaking Bad.
Summer or winter? Summer.
Pub or club? Pub or festival.
Who is your hero? Caitlin
Moran.
If you had a time machine,
where would you go? To Venice
during the Renaissance.
The PQ Book Club
EVERY MONTH WE REVIEW THE
BOOKS YOU SHOULD BE READING
Working in Accountancy 2014: A
guide to qualifying and starting a
successful career in accountancy by
Natalie Sermon and Sherridan
Hughes (Trotman, 14.99)
The bold claim on the jacket of the
this latest edition from authors
Sermon and Hughes is that if you are
thinking about a career in accounting
then Working in Accountancy 2014
will put you one
step ahead of the
other candidates.
Well, after
spending several
long train journeys
in its company, we
would have to
agree. Our one
slight complaint is
that while PQ magazine is there under
general accountancy information,
theres no mention of pqjobs.co.uk or
pqcoursefinder.co.uk. We will be
contacting the publishers to see how
the updating process works.
The first chapter starts with the
basics and there is some excellent
stuff in there that you dont get
anywhere else. The Big 4 feature
heavily, of course, and we are told
that PwC has the largest revenue
generation. The word on the street
also suggests that the firm is rather
bureaucratic and corporate! The
authors allege that the opportunity for
progression is limited and the
promotion structure affords little
flexibility until you have been there
more than four years.
Next up are the professional bodies
and their pass rates, along with the
cost of the training (see our news
pages for more on this). They ask the
right questions here too what it was
that attracted you to accountancy, as
it might help you choose the right
body, and there are a lot of them to
the uninitiated. We really liked the
look at the key differences in
qualifications; for instance: ACCA
provides versatility and is a globally
recognised qualification. You are not
committed to working for the same
employer while studying.
The book has a bit of everything,
from training contracts to study tips,
and there is even a chapter on what
next after qualification. So you are
really getting a complete guide.
PQ rating: 4/5 A must read for
anyone about to embark on a career
in accountancy.
WE HAVE FIVE COPIES OF THIS
BOOK TO GIVE AWAY. GO TO PAGE
38 TO SEE WHAT YOU NEED TO DO
TO WIN A COPY
Slow burning ambition
A man starting out on his
career with a large FTSE 100 UK
company is still 4.5 times more
likely to make it to the Executive
Committee than his female
counterpart. A KPMG study
found that men and women are
equally ambitious. However, a
womans ambition is a slow
burner, and they tend not to
show the same level of ambition
early in their careers. That means
companies need to consistently
reassess career options for
women employees.
Counter offers are back
Many in demand
accountancy professionals are
receiving multiple job offers and
counter offers, which in turn is
creating a war for talent among
businesses, says the 2014
Robert Half Salary Guide. The
guide also found that compliance
salaries continue to increase
most year-on-year.
Give me an incentive!
Financial incentives count
for accountants. Research by
one leading recruitment
consultancy found that 30% of
accountants say the lack of them
was the reason for leaving their
last role. Incentives are now the
second most common reason for
changing jobs, leapfrogging
seeking a new challenge (29%).
The most common reason for
moving posts is still for career
development (33%).
In brief
020 8408 9999
www.walkerdendle.co.uk
Find us on Facebook, Twitter and LinkedIn
SUITABILITY
Walker Dendle Financial Recruitment has become established as a leading
recruiter of professional permanent and temporary nance staff in Surrey and
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nance and accounting roles across nancial and management accountants to
commercial accounting and analysis to nance business partnering.
We continually focus on adapting and rening our service to suit you, offering sound and
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For more information about the range of career openings available though Walker Dendle
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Walker Dendle Financial Recruitment
Swan House, 51 High Street, Kingston Surrey KT1 1LQ
AT WALKER DENDLE WE HAVE MANY DIFFERENT ABILITIES.
THE SUITABILITY OF OUR JOBS SETS US APART.
One resolution we
can help you keep
New Year. New Job. New You.
Register today
reedglobal.com/accountancyjobs Reed Specialist Recruitment @ReedAccountancy Reed Accountancy
DO YOUR GENES FIT?
UNDRESSING THE DNA
OF A FINANCE DIRECTOR
Copyright Hays Specialist Recruitment Limited 2013. HAYS, the Corporate and Sector H devices, Recruiting experts worldwide, the HAYS Recruiting experts worldwide logo and Powering the World of Work
are trade marks of Hays plc. The Corporate and Sector H devices are original designs protected by registration in many countries. All rights are reserved.
hays.co.uk/dna/fd
Is it more important that a successful FD has commercial nous or people skills?
Is the secret to their success being hard-working or a strong inuencer?
How do they invest in their personal development?
Inside the DNA of a Finance Director report, based on our survey of more than
800 nance directors from around the UK, youll learn the key ndings of our
research and read the proles of successful FDs working in the UK today.
To request your copy, visit hays.co.uk/dna/fd
PQCourseFinder.com is the UKs only site dedicated to
helping you locate the perfect course for your accountancy
qualification. Search, find and compare training providers on a
city-by-city basis.
Find the course for you today, and get started on getting that
key qualification.
Search for the course that ticks
your boxes in 60 seconds
Select where you would like to study
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PQ Magazine February 2014
PQ got a story, funny or serious, you want to share? Email graham@pqaccountant.com
W E V E G O T T H E L O T

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be
received by Monday 10 February 2014. The main draw will take place on Wednesday 12 February 2014
TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM
The great I love tax
giveaway starts here!
Its the time of year every accountant loves! So to
cheer you up we are giving away not one but 25
I Love Tax t-shirts! They make an ideal gift for
staff whose bosses have put off their pre-
Christmas party and opted for a cheaper January
version we know it happens.
To be in with a chance of receiving one of our
25 t-shirts send an email headed up I love tax
to graham@pqaccountant.com. Remember, we
need a t-shirt size and your address, or we
wont know what to send and where to send it!
Working in accountancy?
Working in Accountancy 2014 is billed as the only
comprehensive annually updated guide to a career in
accountancy. It includes latest salary information,
applicant numbers and current industry news. For
anyone considering a career in accountancy this book
is a must-have guide, putting applicants one step
ahead in this competitive industry.
PQ magazine has five books to giveaway this
month. Email us and you will be put into the draw.
Head up your email working in accountancy and we
will do the rest. Remember, you have to give us an
address to post the book to!
THE GOOGLE POLICE
HMRC is increasingly using Google Street View as a monitoring tool to catch
suspected tax evaders. Inspectors are using the tool to try to prove people
have undeclared income and a lifestyle superior to that indicated by their tax
returns. The giveaways are major home improvements and numerous
expensive cars parked on the drive. In one case, Street View was even used
to provide clues as to whether a family was using a private school, thanks to
the practice of advertising school fetes on signs in parents gardens. And if
thats not enough, HMRC is also monitoring suspected tax evaders social
networking feeds, such as Twitter and Facebook, to glean further information
about their lifestyles.
THINK
3D
The stars of
popular US sitcom
Big Bang Theory
might use their 3D
printer to produce
whistles and
action figures of
themselves, but
there is more to
3D than this. BAE
recently revealed
that it is using
printed parts to
keep Tornado
fighters in the air.
It is estimated that
the parts will save
the RAF 300,000
a year in basic
maintenance
costs.
SWISS CAP DIDNT FIT
How much should a CEO earn when compared to, say, the
humble office cleaner? Well, Swiss voters were given the
chance to limit the pay of bosses to a ratio of 1:12. The
referendum was put forward by the countrys Young Socialists,
but some 65.3% of Swiss voters rejected the idea. The head of
investment bank UBS earns 194 times the pay of the lowest
paid employee. The next referendum is on a guaranteed
minimum wage of 1,700 a month for every worker.
THAT CHRISTMAS KISS
Day & Night Nurse had a big advertsing
push in late 2013, focusing on getting
people to think about keeping healthy.
One of its ads stressed the importance of
not missing the Christmas party because
Ill never kiss Bridget from accounting!
And that, of course, is something no one
would want to miss.
SNAIL ATE MY DISC
How do you avoid
paying a fine for a
missing car tax disc?
Well, just tell the
authorities you have snails! A
garage owner recently helped
a customer by supplying a
photograph of a snail
eating the disc and the
fine was rescinded.
TOP 10 EXCUSES!
With the January 31 tax filing deadline
just around the corner HMRC has
revealed the oddest excuses from
taxpayers for sending in a late return. All
the below received a 100 penalty for
filing late, and then appealed against the
decision using these excuses! Your pet
goldfish passing away isnt seen as an
unforeseen event, and all had to pay up.
1) Ive been too busy submitting my
clients tax returns a London
accountant!
2) Our business doesnt really do
anything Kent financial services
firm
3) My pet goldfish
died self-employed
builder
4) I had a run-in with
a cow Midland farmer
5) After seeing a volcanic eruption on
the news I couldnt concentrate on
anything else London woman
6) My wife wont give me my mail self-
employed trader
7) My husband told me the deadline
was 31 March, and I believed him
Leicester hairdresser
8) Ive been far too busy touring the
country with my one-man play
Coventry writer
9) My bad back means I cant go
upstairs. Thats where my tax
return is working taxi driver
10) Ive been cruising
around the world in my
yacht, and only picking up
post when Im on dry land
south-east man.
38
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The Microsoft Surface oer is available to eligible students on qualifying courses while
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