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Accounting Handbook
Accounting Handbook
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comment PQ
News
06ACCA changes New exam
formats will kick in in December
08CIPFA apprenticeships
Scheme is rolled out nationally
10CIMA growth Institute sees
strong growth across the globe
Features, etc
06Mind your Ps and Qs
held over for this month
12Profile We spoke to ICAEW
prize-winner Charlotte Wells
14CIMA syllabus Education
chief Noel Tagoe explains what
the syllabus changes will mean
16CIPFA spotlight More on the
growing apprenticeship scheme
18Say cheese! More fun photos
from accountancys top awards
20ACCA P4 How to get a pass on
this technically tough paper
21ACCA interview E-learning
chief Clare Minchington udates
us on the progress being made
23How to study Make the most of
your brain by taking a holistic
approach to your studies
25International standards How
the word policy can mean
different things to different folk
26Lets get technical Gareth
John tells you all you need to
know about time-series analysis
28Financial management The
final part in our series dealing
with various sources of finance
29Viewpoint Garry Carter of the
ICB explains why legislation on
late payments is a bad idea
31ICAEW conference Update
from the annual get-together of
ICAEW lecturers
32Salary survey Market update;
plus salaries for Wales and NI
33Careers Our PQ of the Year
answers our questions; job
prospects are improving for PQs;
and our Book Club review
38Fun time Our great giveaways
and the lighter side of life
The columnists
Robert Bruce Politicians should
mind their own business 6
Prem Sikka IFRS: there may be
trouble ahead 8
Carl Lygo Taiwan, a small country
with a big reputation 10
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ABC July 2012June 2013
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Change is the new black
It is always interesting to see how we cope with change.
Tutors at the recent CIMA Lecturers conference could be
seen going through all the emotions. Some were angry, some confused,
and others more resigned to embrace change. All will have to radically
change how they teach CIMA PQs, and many will have to learn new
skills if they want to get involved in the case studies now sitting over
each level. So CIMA has a bright, new 2015 all singing and dancing
syllabus replacing the now defunct 2010 syllabus. The immediate worry
for PQs is whether they will be viewed any differently if an employer
knows they qualified under the old syllabus. The answer is, of course,
no. That is because of the power of your CV, which shows just how
employable you are. This is why all the professional bodies put so
much emphasis on the practical experience requirements before you
can become a fully fledged member of their body.
Gaining a practical professional qualification
without this balance of work experience can make
you almost unemployable. Ask any recruitment
consultant.
Now, if you are interested in forging a career in
accountancy then you must bookmark Reed
Accountancy and Finances brand new PQHub. It is
a great resource for the PQ hungry for career advice
and guidance. See www.reedglobal.com/pqhub.
Finally well done Charlotte Wells, who recently
won a top ICAEW prize. She attended Reed Business School, who
themselves walked off with my first-ever Special Editors Award at this
years PQ awards. Charlotte was rewarded by a lovely bottle of bubbly
by Reeds top man Sir Alec Reed (see photo and page 12). Take a
look at Sir Alecs Wikipedia page to see what you can achieve with your
accountancy career. He really is an inspiration.
Graham Hambly, PQ magazine editor (graham@pqaccountant.com)
CONTENTS
April 2014
L 1he ccntent fcr 5 years feature is based cn ccurses purchased frcm }une 2013. 1his feature dces nct
apply retrcspectively. Ccntent frcm papers purchased previcusly will nct be available fcr a 5 year pericd.
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PQ news
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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, Phil Gammon, Jo Daley, Richard Heaton | Origination and print services by Classified Central Media
Published by PQ Publishing PQ Publishing 2014
If you have any problems with delivery, or if you want to change your delivery address, please email dom@pqaccountant.com
LSBF has opened a new institute in Singapore. This
sees LSBF stepping up its plans to create a hub for
professional education in South East Asia. The new
campus opening ceremony was attended by the
British High Commissioner to Singapore Anthony
John Phillipson. LSBF's Aaron Etingen explained
that over 6,000 students have come through LSBF
Singapore classrooms since 2011 and the new
base at Springleaf Tower will help accommodate
LSBF's fast-growing student base.
One PQhub to
rule them all
Did you know that some 89% of
recruiters check a candidates
social media profiles? Well, you
would if you read a fantastic new
resource that has been launched
for part qualified accountants
looking to access the latest jobs
and news the Reed Accountancy
and Finance PQHub.
The PQHub was launched this
month and includes news from PQ
magazine, along with interactive
salary guides, the latest hot jobs,
social media advice, consultant
chat and a PQ blog. This is much
more than just a website, and over
the coming months should
develop as a must have resource
for all PQs.
Take a look at the PQhub at
www.reedglobal.com/pqhub
The ACCA has begun to implement
some of the changes outlined at
recent conferences and during
consultations with tutors and PQs.
New exam formats in the
Fundamental Skills exams (F5, F7,
F8 and F9) will happen in
December. That means you have
one sitting of the old format left
this June!
The new paper format will have
two sections, one of multiple-
choice questions and one section
of longer, written questions.
Paper F6, due to the different
exam year, will follow in June 2015.
The F4 paper will also undergo
significant changes. The exam will
be reduced to two hours and be
available as a computer-based
exam (English and global papers)
from the end of 2014.
When it comes to fully on-
demand CBEs, the ACCA has said
that it will be working with target
markets to remove paper exams on
a market-by-market basis. The first
target markets are Oman, the
ACCA CHANGES COMING
LSBF looks to the east
There is one thing that seems to
drive politicians insane, and that is
an independent body. And, in
particular, one which refuses to give
ground when the politicians try to
bully it flagrantly and unmercifully.
The politicians then turn nasty they
have the power and use it sneakily.
A case in point is the International
Accounting Standards Board. It has
been firm over the years. If the
politicians tell it to do something
daft it invariably sticks to its guns.
But then the politicians start
inflicting collateral damage on
anyone else associated with it. Take
the shocking saga of the study into
the impact of International Financial
Reporting Standards across Europe.
This was a very sensible idea from
the European Commission. The study,
after an appropriately open, lengthy,
transparent and competitive
tendering process, was awarded to
the ICAEW, which has a long track
record of IFRS studies, and Mazars,
a truly pan-European accounting
firm. It was a sound and impeccable
decision. But the politicians were
furious. It looked to them as though
there was a chance the IASB and
IFRS might be treated fairly. They
werent having that. So they ranted
until the contract was cancelled.
The European Commission
apologised and told the ICAEW its
competency and independence were
not in question. It is time someone
commissioned a study into the
behaviour of politicians.
ROBERT
BRUCE
The curse
of the
meddling
politicians
Robert Bruce is an
award-winning writer on
accountancy for The Times
Czech Republic, Sri Lanka, Hong
Kong and Cambodia. The aim is
that from January 2015 these
countries will offer CBEs for
foundation level exams and F1-F3
assessments.
The ACCA is committed to
adding flexibility into the exam
schedule. First, it wants to
introduce additional paper-based
sessions for those exams not
available by on-demand CBE,
namely F5-F9 and papers P1-P7.
This is likely to be four exam
sessions a year March, June,
September and December. The
current target for this is late
2015/early 2016, but the ACCA
needs to progress the plans further
before it can provide an exact date.
Wheres me stuff?
Deloitte consultant Nilay Shroff
recently arrived home to his New
York pad to find everything gone
except his TV and PS3! His
apartment had been emptied by a
removal man who took his stuff to
the city dump. The consultant called
911. Then Shroff discovered the
removal man should have emptied
2B and not his flat, 2D. He is suing!
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PE) free of charge, two ACCA or CIMA papers 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/acca. To qualify for a further online Professional Development
Course with BPP PE of up to 500in value; two years must have lapsed since the you attended the tenth free PDcourse, all ten PDcourses must have been attended, you must have passed the two CIMAor ACCApapers 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 June 2014. See www.bpp.com/terms/l/bpp-career-development-guarantee for full terms and
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8
PQ Magazine April 2014
PQ news
CIPFA is rolling out its unique and
innovative apprenticeship scheme
across the country. The national
scheme was launched this month
after a successful pilot in the West
Midlands last year.
Designed to attract individuals to
a career in public finance, the one-
year apprenticeship is managed by
CIPFA, allowing employers to focus
on cultivating new talent within
their organisations. The apprentices
on the scheme gain valuable work
experience at the same time as
studying for the AAT Level 4
qualification.
CIPFAs Giles Orr said there was
a need for a more innovative
approach to engaging young people
and tackling youth unemployment.
Students who join the scheme
are, he stressed, part of the delivery
team, not just passengers. They
will end the year with an AAT
qualification and be on their way to
getting the CIPFA qualification, too.
The scheme will now be offered
out of CIPFAs Manchester, London
and Birmingham centres.
The hope is to grow the scheme
from the current 10 to 90 by next
year. Grant Thornton has already
agreed to take on five apprentices
in each centre. Coventry council is
taking on extra apprentices, too.
The GLAs Tom Middleton
confirmed on the launch night that
it will be taking on two or three
apprentices in London. There was
interest from other London public
service organisations.
See page 16 for more on this.
CIPFA goes national
with apprenticeships
There is turbulence ahead for the
IASB. The US Securities and Exchange
Commission is lukewarm about global
convergence around IFRSs as it has to
satisfy local constituencies.
Differences have emerged on the
accounting treatment of insurance
contracts. The US has opted for
additional disclosures, whereas the
IASBs preference is for changes to the
numbers in the financial statements by
discounting future cash flows.
The IASB wants convergence of
accounting around IFRSs, but that is a
long way off. We see modifications of
IFRSs rather than the wholesale
abandonment of local traditions. For
example, Japan supports IFRSs, but
uses last-in, first-out (LIFO) method for
valuing inventories rather than the
first-in, first-out (FIFO) method.
Supporters of convergence say that
numbers based on a single global
accounting standard would improve
comparability. Little supporting
evidence is presented. Comparability,
it may be argued, depends on theories
in our head rather than simply what is
placed in front of us. Everyone will
recognise a cow, but its significance
is contestable. To meat eaters, a cow
is a source of food, but orthodox
Hindus may regard a cow as a deity.
Thus established practices cannot
easily be standardised without doing
violence to some traditions and
values. Accounting is no different and
its meanings will continue to depend
on value systems rather than
accounting standards issued by a
private company based in London.
PREM
SIKKA
IRFS: there
may be
trouble
ahead
Prem Sikka is professor
of accountancy at the
University of Essex
Happy to be a part of it: Ian Barber, Grant Thornton, Tom Middleton, GLA,
and Neil Chamberlain, Coventry City Council at CIPFAs London HQ
Grant Thornton is transforming the way it selects
trainee talent. The firm says it no longer automatically
screens out applicants based on their academic
results. Instead, the firm now looks at this as just one
element among other factors that have been identified
as equally, of not more, importance. The firm has also
streamlined the application process, updated its
assessment tools, and created other tactics to help it
identify and prioritise.
Grant Thorntons Maria Floud explained the firm
wants to make a stand in the market to reflect its
values and culture. Early indicators are that around
10% of the trainees it has found through the new
process would have been excluded before.
The firm takes on around 350 trainees each year via
four main routes graduates, school leavers, its
pipeline programme and via 12-month placements.
Grant Thornton transforms recruitment
Does ACCA want new
seven-year time limit? Something happened to CIMA
students sitting P2 in November
their handwriting got better!
On top of that, there was also a
noticeable improvement in the
presentation of scripts and the
layout of answers. That all helped
push up the pass rate to 72% this
time around in the UK.
That said, the examiner said
PQs needed to understand the
depth of knowledge required for
P2. There is also a plea that
candidates clearly indicate if part
of the answer to a question
appears later in the answer
booklet. A warning also went out
about the knowledge gap in
students scripts exempt from
earlier papers. And no pencils or
red ink please, said the examiner.
At E2, the marks were varied.
Too many PQs were stuck between
42% and 46%. These candidates
did not write good enough
answers to Q6 (b), Q3 and Q2. Q6
(b) was all about McKinseys 7 S
model and worth 15 marks. Q3
covered organisational control.
The wrong focus in Q2 meant
many candidates received low
marks here too the examiner
wanted a discussion of trade-off
strategies.
Getting better
all the time
Is the ACCA looking to change the
current 10-year limit it has on
students completing their exams?
Many ACCA students recently
received an email asking them for
their views on the 10-year limit. The
new proposal is a seven-year time
limit that would only start ticking
once you pass your first P paper.
That means students could take
their time completing the F1-9
papers.
It has been suggested that under
the new seven-year rule an expiry
date would be introduced on PQs
papers. That is something that used
to happen many years ago, and in
effect would mean that students
might have to retake a paper they
have already passed.
One student PQ magazine spoke
to felt that this would be a positive
move. They felt the problem was
that everyone comes in at different
stages. Some students start at F1,
while others could get lots of
exemptions. Both still get the
current 10 years.
ACHIEVE MORE. BECOME MORE.
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10
PQ Magazine April 2014
So what are you worth?
What are you worth to your
accountancy body? The Financial
Reporting Council (FRC) has
compiled the average income per
member/student for each of the
professional bodies. So who is the
cheapest? Well, it is CIMA, which
generates 223.50 for each
member and student. Next comes
the ACCA at 279.20, followed by
CIPFA, which has income of
377.90 per member/student.
Then there is a big jump to the
ICAEWs 410.30 and the 670.40
for ICAS. But these both pale into
insignificance when you look at the
Irish chartered body (CAI), which
brings in 707.70 per member
and student.
Women need not apply
So how are the firms doing
when it comes to their female
partners? The latest survey from
Accountancy (published by Wolters
Kluwer) shows EY is leading the
way with 20% of its partners being
women. There are, however, still
some practices who seem to
struggle to attract top-flight women
to their firm. In several very big
firms fewer than 10% of their
partners are female. We will have
more on this in next months PQ.
AAT going Down Under
The AAT is partnering the
New Zealand Institute of Chartered
Accountants (NZICA) to offer the
AAT Diploma in Accounting. The
diploma is open to all and has
been designed to suit the New
Zealand market, with four of the
units being tailored for NZICA
students. Home Learning College
has been assigned as the training
provider for this qualification.
In brief
PQ news
Over 33,500 new students joined
CIMA last year, taking the total
member and student population to
just under 250,000, according to
latest figures from the institute.
Interestingly, the UK is among a
number of key countries that saw
record numbers of student
registrations in 2013.
CIMA MD Andrew Harding told
PQ magazine in an exclusive
interview that UK numbers grew by
an impressive 15% to 11,400. This
is a sure sign that businesses are
rebuilding their management
accountancy capacity. Harding
believes the need for good business
data is also driving recruitment of
CIMA PQs. Undergraduates
increasingly want real jobs in real
businesses, and the CIMA
qualification can give them that,
stressed Harding.
CIMA is having big successes in
Africa, India and central Europe.
Even China saw a 40% growth in
new members.
In Africa, Ghana saw a 56%
increase in student numbers. South
Africa also recorded record recruits.
CIMA recently opened a new office
in Nigeria and is hoping that this
will be a new pipeline of PQs.
India is another successful
recruiting area, with new
registrations up by 61%. Harding
admits that India is an extremely
challenging environment and this is
the first time in a number of years
that recruitment has really shot up.
Russia is the final area where the
CIMA qualification has caught more
students eyes. Its number there
rose by 30% in 2013.
CIMA is growing
across the globe
This month I visited Taiwan, Republic
of China, where I found what the locals
describe as the best kept secret in
Asia. The Big 4 firms are all present,
but more interesting is the fact that the
accounting profession is almost 75%
female.
Taiwan is a staging post for those
wanting to gain entry into China now
that rules on trade and travel between
the two have relaxed. Taiwan provides
the second-largest inward investment
into China. With little corruption and a
respect for the rule of law, it certainly
offers an attraction to British firms
wanting to develop in Asia. I was
impressed with the entrepreneurial
spirit, with seemingly every inch of
curb space used by budding
entrepreneurs.
I was awoken at 4am on my first
morning in Taipei by two earthquakes
that rocked my 23rd-floor hotel room.
The quakes, measuring 5.3 and 4.2 on
the Richter scale, did not have the
locals concerned, and as far as I could
see there was no damage caused. It
had me wondering if I had drunk too
much the night before, as the room
seemed to shake for a long time.
Taiwan is the leading manufacturer
of custom computer chips and brands
such as HTC and ACER started in
Taiwan. Walking around Taipei,
Kaohsiung and Taichung, I could see
that British manufacturing is strong,
with brands such as Dyson, Clarks,
Burberry and Hackett London all
having prominent positions. Not only
that, the Union Jack is worn as a
fashion accessory by locals who
welcome the British!
CARL
LYGO
A small
country that
has earned
a big
reputation
Professor Carl Lygo is
chief executive of BPP
CIMA has seen excellent growth worldwide, including in Africa
Write proper!
Computer based exams cannot
come soon enough for many ACCA
examiners and markers. It might
also help more PQs to pass!
Poor handwriting was an
important concern for many F7
markers last December. The
examiner stressed that if markers
cannot read what the candidate has
written no marks can be awarded.
Illegible handwriting and poor
formatting of answers was a key
concern of the F9 examiner as well.
This was also true for F5. The
examiner here explained that it is
an issue at every exam session, but
in December it was a particular
problem. The examiner said:
Markers try as hard as they can to
give any marks due on a paper, but
if they cant read the writing they
simply cannot give the marks.
On top of this the F8 examiner
complained about the poor layout
of answers.
One senior tutor said that the
ACCA should send a warning to
those who could be affecting their
chances of success.
He felt that some students might
think they have done a great job,
but if no one can read their
handwriting then all that hard work
is for nothing.
See next months issue for our
take on the Examiners feedback.
EY to close office
in Nottingham
Nottingham's status as a major
professional services centre has
suffered a big set-back with the
announcement that EY is to close
its office there and move staff to
Birmingham.
EY has said that there may be
redundancies as a result of the
move, which leaves just KPMG
and Deloitte in the city.
In a statement, EY explained
that the move to more flexible
working practices in the Midlands
and the ending of the lease at its
offices in City Gate were the main
drivers to the announcement.
The EY office will close on
1 July 2014.
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PQ Magazine April 2014
PQ student profile
What is your background? I have always loved
maths and studied it throughout school and
university. I work for Francis Clark LLP in the
corporate services department.
What made you choose your ICAEW career
path? At university I did an accounting module
in my first year and clicked with the material.
ICAEW appealed due to the range of topics
covered. It just so happened that the firm I
wanted to work for (Francis Clark) offered a
training contract for the ACA qualification.
What is it like to study ICAEW exams at Reed
Business School? All the staff are so friendly
and the tutors are second to none. I ask lots of
questions and they are always available to help.
Reed Business School is just brilliant like a
home away from home!
What were your thoughts on the new syllabus
FAR subject and how did you approach your
studies? I really liked the syllabus I think it
makes sense that FA and FR were merged. I
made sure I knew the syllabus before going to
Reed for the revision courses, so that this time
could be spent practising questions and
perfecting exam technique.
What was the hardest exam you have taken?
Definitely Financial Management (June 2013). It
was always going to be a time-pressured exam. I
took a minute to panic, then I pulled myself
together and got on with it.
What tips could you offer to other students
who are studying ICAEW? ICAEW is a huge
commitment, the exams are designed to test you
and you'll fall short if you don't put the work in.
Do you have any superstitions/lucky charms for
your exams? I was always told that you make
your own luck, I make sure I'm prepared for
every exam I sit.
Reed Business School courses are designed to
allow students to progress through their
studies and exams with the same group of
peers, how have you found working in this
way? I have made some amazing friends
through studying at Reed and I don't think I
would enjoy it as much if I was studying on my
own. When an exam is looming it's nice to chat
to others and be around people who are in the
same boat as you.
Other award winners from the December 2013 sitting
included Ross Bickerton, also of Francis Clark, and Mark
Johnstone (Thomas Westcott), who came in joint 8th place
and 11th place respectively in the 2013 Professional
Annual International Order of Merit.
PQ
Prepare for every paper
Meet Reed Business School PQ Charlotte Wells, first in the UK and
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14
PQ Magazine April 2014
PQ CIMA 2015 syllabus
C
IMAs director
of education,
Noel Tagoe, is
a man on a
mission. He wants to
create a professional qualification where
students know the theory but also learn
practically. In effect, that means you pass
an exam in a subject and can then walk
straight into the workplace and
implement what you have learnt you
can just do it.
His concern is that in the past learning
has been driven by teaching, and he sees
his role as reclaiming that learning. To do
this he needs the help of technology, and
in the past the technology hadnt been up
to the job. That, he believes, has
changed. The possibilities are now there
to re-couple learning and practice.
To achieve this goal, CIMA is focusing
on competences and what is needed at
every new level of the new syllabus
structure to make the PQ employable.
For Tagoe, employability of his PQs is
key and putting the classroom and
workplace together will give them the
boost they need.
What is new? .
Turning to the new syllabus, he said that
there has been some rationalisation of
topics, both across levels and within
papers.
After extensive consultation some key
new syllabus areas have been beefed up.
Transformation of the finance function is
a prime example here. Another is big
data, and what it means. You will see big
data in E1, and it will move through the
strategic areas and E2 and E3. The rest
of the syllabus will also be written with
awareness of big data, emphasised
Tagoe.
Then there is sustainability and
integrated reporting. A lot of work has
been done on that, he said.
Risk is a hot topic, and the economic
crisis only helped to show how the failure
of risk management can affect business.
Tagoe said CIMA PQs will see a more
streamlined view of risk in P3 the
renamed paper also gives a clue here.
However, he wants to stress that risk
needs to look beyond the financials. We
want to investigate enterprise risk as
well, he said. So you will see short-term
risk in P1 and longer-term, mainly
finance related risk in P2. P3 will take it
further. Watch out for it also appearing in
F3.
Cost transformation and cost
management is another key area. To an
extent CIMA is going back to its roots. All
businesses need to understand and
manage costs and do it effectively.
While these are some of the key
subjects, Tagoe is looking at an even
wider picture, and how CIMA PQs cope
with the digitalised world and the masses
of information out there. That means
being able to exercise judgment and look
beyond the mere financial. Internal
information is all well and good, but
businesses want accountants who can
look forward and out!
A learning machine .
Tagoe and his team were given the task
of finding out how an accountancy body
can create NQs who have the ability to
research and obtain information and
develop a perspective about the future. A
key element here will be gaining the
confidence to deal with uncertainty, and
that for him means moulding PQs into
learning machines, not just accounting
machines.
It will be a fight, as he has found
accountants often prefer to be precisely
wrong rather than broadly right. The
sustainability issue is a prime example
here. Finance measures have helped to
bring credibility, but it needed a mind
shift outside the figures alone to increase
the accountants relevance.
Assessment changes .
CIMA is being bold when it comes to
assessment, too. Pen and paper will be
gone after 2014 and everything will be
done at a computer terminal. Pearson
VUE and its 5,100 global centres is
where CIMA students will sit these new
computer-based exams
The nine current papers E1, E2, E3,
P1, P2, P3, F1, F2 and F3 will all
become CBTs, available to sit on
demand. Each will last 90 minutes and
use multiple-choice and other types of
integrated questions. The results will be
instant.
Sitting atop each level, operational,
managerial and strategic, is a case study
exam, which will be available four times a
year. Lasting three hours each, Tagoe
wants the case studies to help break the
silo mentality of learning. Students will
still receive a pre-seen paper, but it wont
be 16 pages long. Instead, it will be a
page-and-a-half and students will have to
do their own searching and shifting of
material just like in the real world.
The case study exam will also be very
different. Students will receive emails
from different people during the exam
and have to cope with their demands
just like a real working day! Tagoe also
envisages that during the four-exam week
windows for the case study students can
opt to sit on any day Monday through
to Friday. In effect, this will give 20
possible sitting days a year for the case
study. The results will be marked by a
real-live person and back with sitters in
just four weeks.
PQ magazine spoke to CIMAs director of
education about the new syllabus, which is
being introduced in 2015, and what the
changes mean to current students
WHAT NOEL WAN
PQmagazine
EXCLUSIVE
Noel Tagoe:
employability
is the key
PQ Magazine April 2014
15
CIMA 2010 syllabus PQ
NTS...
Tagoe is hoping to also use the new
assessment process to help fine-tune
feedback to students, so after they receive
their results they will be given guidance
on their weaker areas. CIMA will also be
using big data to discover the areas where
all students struggle.
Transitional arrangements .
The first CBT exams will start in January
2015, with pilot papers available in July
2014 for every paper.
When it comes to the transitional
arrangement, Tagoe said that the first
principle is that students will not be
disadvantaged. So if you have passed a
current level you will simply move onto
the next.
There will, however, be a choice for
students at the operational level if they
have passed two papers. They can
exercise a waiver and just sit the new
case study exam.
Tagoe felt that the risk of students
failing here is low. But the same waiver
will not apply at managerial level, as
missing a paper would affect the chances
of passing the case study here.
The new syllabus, modes of
assessment and general philosophy puts
CIMA at the forefront of accountancy
education globally. It will make other
bodies sit up and take note. Tagoe has
created a modern, dynamic qualification
for what has become an increasingly
volatile world. He also said CIMA wont
wait another four years to change the
syllabus again it will now be looked at
on a much more regular basis.
PQ
SMART
LEARNING
The CIMA lecturers conference provided real insight into challenges of the
current Strategic Level. See next months PQ for more in-depth analysis
T
here are now just three exam
sessions remaining for the
2010 syllabus. For the
Strategic Level papers it is, of
course, vital that candidates familiarise
themselves with the pre-seen material.
If you want to achieve success in the
exam hall the examiners have stressed
that you must give specific solutions and
not just generic advice. That means
knowing the appropriate application of
models and theories.
FINANCIAL STRATEGY
A quick look at the average marks
achieved by F3 sitters shows many PQs
dont do well on Q2. This question is
often taken from section B and you may
need to focus more time on this area.
There are also some recurring points
made in the post exam guides that
students must take note of if they want to
ensure success at the next diet. The
technical areas where students are
continually weak are WACC, cost of
equity, CAPM and rounding issues.
The examiner continually pleads for
answers that relate to the scenario. Other
problems are the poor use of Excel and
the inability of many candidates to
identify the correct data. Exam sitters also
dont seem to be able to drill down on
associated issues.
There are some positives. CIMA PQs
papers do not indicate problems with
time management, according to the
examiner. NPV is also a popular choice at
exams and done well, and in general
students appear to have a good
understanding of section A.
PERFORMANCE STRATEGY
The average pass rates at P3 seem to
show that sitters have problems with time
management with this paper. This is
leading to lower marks being achieved in
the optional questions. The examiner
pointed out that students struggle with
two key areas of the syllabus:
management of financial risks (35%) and
risk and control in information systems
(15%). That is half the syllabus!
There is also a worry about the lack of
structure in answers. You can add to this
poor time management, a lack of using
the scenario, and just vague answers.
PQs are good at some things, notably
risk and inter controls (25%) and review
of internal controls (15%).
The average marks appear to show
that students are ignoring Q1 and start
with an optional question, perhaps one
they are good at. However, poor time
management means they dont leave
enough time for Q1 when they finally get
around to it!
ENTERPRISE STRATEGY
Areas that E3 students need to improve
on are:
Information technology/information
systems.
Depth of the knowledge of the syllabus.
Bringing in knowledge from other
syllabus areas.
The examiner stressed that candidates
need to know their verbs, and answer the
question set rather than their own set of
questions. There is also evidence of time
pressure and that means students need
to practise exam questions under real
conditions.
PQ
FINANCIAL STRATEGY F3 AVERAGE MARKS
Marks All UK Africa
Question 1 50 49.1% 52.0% 45.9%
Question 2 25 37.0% 37.8% 34.8%
Question 3 25 43.0% 45.2% 38.2%
Question 4 25 48.2% 51.6% 45.0%
PERFORMANCE STRATEGY P3 AVERAGE MARKS
Marks All UK Africa
Question 1 50 44% 46.0% 42.0%
Question 2 25 54% 55.6% 51.0%
Question 3 25 40% 43.0% 38.6%
Question 4 25 41% 45.4% 39.6%
ENTERPRISE STRATEGY E3 AVERAGE MARKS
Marks All UK Africa
Question 1 50 40.2% 42.8% 36.6%
Question 2 25 40.0% 40.0% 38.4%
Question 3 25 43.6% 47.0% 47.4%
Question 4 25 42.4% 45.2% 39.8%
PQ CIPFA spotlight
I
n September 2013, CIPFA launched a pilot
in the West Midlands for its Finance
Apprenticeship scheme. The one-year
apprenticeship offers employers the opportunity
to nurture new talent within their organisations,
enabling their young apprentices to gain valuable
work experience while studying for the AAT Level
4 qualification.
Employers supporting the pilot included Grant
Thornton, Birmingham City Council, Coventry
City Council, Birmingham Womens NHS
Foundation Trust and Nuneaton & Bedworth
Borough Council.
Fast-forward six months to National
Apprenticeship Week (3 7 March 2014) and
CIPFA hosted a launch event at its London head
office. Following the huge success of the West
Midlands apprenticeship pilot, CIPFA is now
launching the scheme across England, focusing
on London, Manchester and Birmingham. Over
60 people from across the public sector
attended the events including representatives
from the careers industry and employers. This
unique recruitment and training solution has
certainly caught the industrys attention.
Sourcing future finance leaders
The recent figure for NEETs (young people Not
in Employment, Education or Training) remains
above one million. Half of those classified as
NEETs are actively looking for employment, and
through no fault of their own these young people
find themselves unable to start their career. This
is a massive call to action for CIPFA to do
something to address the issue and help launch
the careers of the finance leaders of tomorrow.
There has been a big push by the government
to raise awareness among young people (and
their parents) about the benefits of
apprenticeships. They give young people the
chance to learn and develop skills in the context
of the workplace and enable employers to grow
their own workforce and recruit from a more
diverse pool of talent.
Although many young people report that they
have had very little or no guidance at all about
apprenticeships, CIPFA has been working with
organisations such as Total Professions to try
and spread the word about the scheme and
encourage young people to consider an
alternative route to a professional career. The
message is this: you dont have to go to
university to start a vibrant career in public
financial management.
So what makes the CIPFA Finance
Apprenticeship scheme different?
Under the scheme, young people are employed
and trained by CIPFA while in post with partner
organisations. Unlike traditional government
funded apprenticeships, the CIPFA Finance
Apprenticeship is open to anyone who meets the
required entry criteria. Applicants need to have
good level 3 qualifications such as two relevant A
levels in business, finance, etc, or AAT Level 3
with minimum retakes, plus GCSE maths and
English at grade C or above.
The one-year apprenticeship is managed by
CIPFA. This includes all recruitment, selection,
payroll and training, allowing employers to focus
on nurturing new talent within their organisations
and apprentices on gaining valuable work
experience while studying for the AAT Level 4
qualification.
AGE OF THE
APPRENTICE
CIFPA to roll out its Finance Apprenticeship scheme after successful trials
As a minimum, apprentices will receive the
National Minimum Wage for their age (starting
from 5.03 per hour), with some of our
employer partners offering a higher rate of up to
7.45 per hour. At the end of the 12-month
contract the apprentice will be AAT Level 4
qualified and part CIPFA qualified.
At this time, CIPFA will encourage partner
employers to consider hiring apprentices who
have successfully completed the scheme. If
successful, the trainees would be expected to
continue their studies with CIPFA, becoming
qualified CPFAs with two more years of
successful study.
However, if the employer partner chooses not
to hire the apprentice, the apprentices will have
benefited from having gained a professional
accountancy qualification and having had work
experience, leaving them in a fantastic position
to continue their career path in accountancy, if
they wish.
Speaking at the launch event, CIPFAs CEO
Rob Whiteman said that apprentices were
essential to the economy. Grant Thorntons
James Cook commented on the quality and
calibre of apprentices within the firm saying
clients found it difficult to tell the difference
between their apprentices and graduates.
Next steps
If you know a young person who is looking to
start a fantastic career in public financial
management, then get them to apply to become
a CIPFA Finance Apprentice. For details visit
www.cipfa.org/apprenticeships, email
apprenticeships@cipfa.org, or call the Employer
Relations team on 020 7543 5757.
PQ
Sorted, thanks to
pqjobs.co.uk
PQ Awards 2014
The photo-booth at the PQ Awards proved a huge hit and gave our guests the chance to
behave in a very silly way. So did you make our final cut? If so, be afraid. Very afraid
SAY CHEESE!
THANKS AGAIN TO OUR FABULOUS SPONSORS
Success Stories
Nick Craggs - Premier Training Tutor
Premier Training Wins
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2014
PQmagazine
Pass Promise
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The Ofce
FOR ACCOUNTING TECHNICIANS
2nd EDITION
Study Manual
Alan Dawson
Pass rate: 42% (Dec 2013)
Technical difficulty: 10/10 (in common
with all the Professional level optional
papers this is the final level of a
prestigious professional qualification
after all!)
Weighting of calculations: discursive
elements is approximately 50:50
(although because there is a choice of
questions in Section B, it is possible to
choose questions to change this slightly
one way or the other).
Importance of exam technique: 10/10
(critically important!)
The syllabus . .
The ACCA P4 syllabus builds upon the core
financial management knowledge and skills
covered in F9 (Financial Management) at the
Fundamentals level. It prepares students to
advise management and/or clients on complex
strategic financial management issues facing an
organisation. P4 has seven syllabus sections:
A
Role and responsibility towards
stakeholders: This section of the syllabus
includes a number of relatively familiar areas,
such as conflicting stakeholder interests and
ethics. These discursive topics were introduced
earlier in the ACCA syllabus, and now have to be
applied in a financial management context.
B
Economic environment for multinational
organisations: This section of the syllabus
sets the tone for much of what is to follow.
Increasingly financial managers need to be
aware of the factors affecting their businesses in
a globalised economy. In common with syllabus
section A (above) the topics here are discursive
(rather than numerical) and most students cope
well with them.
C/D
Advanced investment appraisal (C)
and acquisitions and mergers (D):
These two syllabus areas are tested in great
detail in every exam, so it is vital that you get to
grips with the detailed numerical topics (such as
NPV, IRR, MIRR, business valuation).
However, given the likely split in exam
questions between calculations and discursive
elements, it is also important that you can
understand and describe the circumstances in
which each method should be used. Discussion
of strategic considerations is also often tested
alongside the calculations.
E
Corporate reconstruction and
re-organisation: The P4 exam looks at
financial management issues in a contemporary
way. Therefore, this syllabus section is
particularly important at the moment, as many
companies have had to reorganise to survive in
the deep recession following the credit crunch.
F
Treasury and advanced risk management
techniques: Many students find this section
to be the hardest in P4. It covers the topic of
hedging against the risk of currency rate and
interest rate changes. Youll have to practise lots
of past exam questions to ensure that you can
prepare the complex calculations accurately and
then comment on your methods.
G
Emerging issues in finance and financial
management: As mentioned above, the
examiners are always keen to test contemporary
(or emerging) financial management issues. This
is a very interesting and relevant syllabus area. It
has recently been expanded to incorporate the
increasingly important topic of Islamic financing.
Choosing the P4 exam .
P4 is an optional paper. Students who performed
well in the ACCA F9 paper, who have a strong
mathematical background and who have an
interest in working in a financial management
role tend to enjoy the P4 paper and perform well
at it. If maths is not one of your strengths, and if
you struggled with the F9 paper, then P4 is
definitely not for you.
Sitting the P4 exam .
The P4 exam is made up of two sections.
Section A comprises a single, compulsory
50-mark question. Section B contains three
25-mark questions of which students must
attempt two.
Exam technique is critical to success in P4. In
particular:
Use the 15 minutes of reading time
productively, to choose which section B
questions to attempt and to identify the parts in
each question that are likely to cause most
problems.
Allocate time carefully to the questions (90
minutes to section A and 45 minutes each to
section B) and stick to your allocations.
Within each question, dont necessarily start at
part (a) and work through sequentially. If one of
the later parts to the question looks easier than
part (a), start with that.
In section A there will be four professional
marks awarded for the format, structure and
presentation of your report. These are the easiest
marks on the whole exam, so make sure you get
them.
Although P4 has historically had a low pass
rate, and it is perceived as a problem paper by
many students, it is by no mean impossible to
pass. To maximise your chances of success,
practise plenty of past exam questions and look
out for new articles on the ACCA website. As well
as reading your textbooks to learn the key
syllabus topics, read good quality newspapers
and blogs too, in order to help you to understand
how the theoretical topics apply in a real world
context.
Andrew Howarth is a P4 Content Specialist
at Kaplan Financial
PQ
20
PQ ACCA P4 paper
PQ Magazine April 2014
FIGURE IT OUT
In the third article of its new series,
Kaplans Andrew Howarth tackles
the technically tough P4 paper
PQ magazine editor Graham
Hambly is updated on the progress
being made by ACCA e-learning
chief Clare Minchington
A
CCAs director of e-learning, Clare
Minchington, told PQ magazine
recently that the association is on
track with its plans to introduce extra
exam sessions, both paper-based and CBEs.
She stressed that the ACCA has always been
aiming to bring these in post-2014. So we are
talking 2015 and maybe even 2016 before PQs
get to sit ACCA exams four times a year.
Admittedly, Minchington says, she was not as
clear as she should have been on this point last
year.
The aim is to introduce additional paper-based
exam sessions first for those exams not available
via on-demand CBE F5F9 and P1P7 and
this is likely to be four exam sessions a year
(March, June, September and December).
She stressed that introducing paper-based
extra sessions required substantial changes to
ACCA processes and systems and will take it
some time to implement. So while the target is
late 2015/early 2016 she will need to progress
the plans further before an exact date is given. It
will be interesting to see if CIMAs
announcements mean the ACCA move faster.
The changes will have a significant impact on
learning providers, and Minchington feels that it
is incredibly important that it takes time to work
with its partners to ensure they can manage the
change. As we spoke, the ACCA was conducting
further consultations with providers, in addition
to detailed planning and analysis, to better firm
up dates as to when these new sessions will be
introduced. She promised to keep PQ magazine
readers well informed as she
progresses.
The format of the F1, F2 and
F3 exams will be the first to feel
the effect of the changes that
are coming.
The introduction of F4 as a CBE has been
moved back to November (from September).
This will ensure students have time to fully
prepare for the new exam format. The majority of
support materials will be published in August
2014 to avoid confusion with the June exams.
That has to be a good move. Minchington
explained: As this will be a change for students
we want to ensure they have time to adequately
prepare.
December 2014 is going to be a big time, as a
new exam format will be introduced. Exam
papers F4F9 (not F6) will
change in December 2014. Paper specimens for
the new format exams were made available for
students on the ACCA website in late January.
Minchington admits that the plan originally
was to only offer the extra exam sessions
March and September as CBEs. Having
consulted with employers and students this will
change. These stakeholders told the ACCA that
added flexibility was their number-one priority, so
the association wants to focus on getting four
paper-based exam sessions launched first
(F5F9 and P1P7) before moving to the next
phase of the vision of CBEs for F5F9. She
emphasised that this gradual change was
requested by providers, so they can continue to
offer quality tuition.
The ACCA new format for December
Acowtancy.coms Richard Clarke broke the news
that, come December 2014, F4F9 (except F6)
will be 40% multiple choice, with the remainder
10-15 mark questions. There was some concern
that this would be seen as a dumbing down of
the exams. Most PQs, though, seem more than
happy to embrace the change.
PQ
21
ACCA update PQ
PQ Magazine April 2014
ACCA: WHERE
ARE WE NOW?
PQmagazine
EXCLUSIVE
Minchington: wants to ensure students have time to prepare for change
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Whole body experience
The point of all this is awareness. Homo
sapiens have defined a new generation in their
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The same is true of education and learning.
Many of you reading this will be contemplating
sitting exams, or recovering from them, and
know (using some part of the available conscious
brain) that this process involves great chunks of
memory. It used to be considered that memory
was a structure, a single unit that existed
somewhere, which could be called upon when
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the name of the lead singer of Slade? What is
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What the team at Neil Taylor Insolvency most
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positive internal language and the programming
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Taking all the constituent parts of an exam
candidate and making a whole that can take
exams head-on with confidence and a sense of
empowerment.
Thanks to Neil Taylor Insolvency for this
article
PQ
23
PQ Magazine April 2014
how to study PQ
I
t was Emo Philips who said that he used to
think the brain was the most impressive
organ in the body, before realising what it
was that was telling him this. Since he first
deliberated this on British TV in the early 1980s
scientists have learnt a great deal more about
the human species most northerly organ.
For example, we now know that the average
human brain is made up of 1.4 kilos of the most
complex material discovered in the universe (says
the species who have made it as far as an orbiting
ball of rock 239,000 miles away). It consists of
hundreds of billions of cells, called neurons and
glia. Neuro-scientists use some of theirs to
postulate that each neuron is as complex as a city,
furiously busy making tens of thousands of inter-
connections every second by way of electrical
impulses to neighbouring neurons.
The average 19 to 24 year old uses about five
glia texting 63 times a day while slipping,
conscience free, into the 95% demographic who
do not pay for music downloads. They have
access (language permitting) to the one million
books published each year and to the one
thousand billion pages on the web. But for all
those interesting facts my absolute favourite is that
if you were to remove all of the empty space from
the atoms that make up every human on earth,
the entire world population could fit into an apple.
You must take a holistic approach
to study if you want to enhance
your chances of exam hall success
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25
PQ Magazine April 2014
international standards PQ
I
m in the mood to deliver a sermon. The
subject will be the same word can mean
different things to different people. The
word I am going to use to illustrate the point is
policy. The particular problem with the word
policy shows itself in stark relief when a student
asks this deceptively tricky question: I have
changed my depreciation policy from straight
line to reducing balance. Why does the text say
this is not a change in policy? It obviously is a
change in policy! Goodness, I can feel myself
quake. It is a horrible question with an even
more horrible answer.
The word policy comes to us from the mists of
time long before anyone had the bold idea of
inventing accounting standards and trying to
impose consistency. Back then, accountants
had a wide range of choices for their financial
reporting and the choices they made became
known as policies. For example, in the context
of leasing, there was a choice between ignoring
all finance resulting in pure operating lease
accounting and accommodating some finance
resulting in the mixed model of operating and
finance lease accounting like we do today. Back
before standards most companies chose pure
operating lease accounting and that was their
lease policy. But others chose the mixed model
and that was their lease policy.
Then, one-by-one, standards were issued and
choices were closed. To continue the leases
example, after IAS 17 a company previously
applying pure operating leases had to swap to
the mixed model and the policy choice
disappeared. As each standard was issued the
choice disappeared and companies had to align
their policies with the standard. The idea of a
policy as a choice has effectively gone. Policy
choice has disappeared.
But as this was going on, a new and different
meaning of policy sprang into use. This
meaning is nowhere in the standards and
everywhere in real life, and this conflict is the
root of the confusion.
This very different animal is all about volume,
compromise and materiality. It is true to say that
IAS 16 on depreciation contains no policy
choice. You must depreciate an asset on an
individual asset-by-asset basis over its life to
match the cost with use. And many companies
do just that. They simply look at each asset on
an individual basis and estimate its use, and
thereby derive depreciation for each asset. But
in big companies with lots of similar assets, a
little trick called a formula is used. Say there
are hundreds of machines that are similar and
all last roughly five years (some more and some
less). In that company the accountant might say:
I shall depreciate all of them over five years.
Now this is in direct contradiction to IAS 16,
which says that depreciation must be on an
asset-by-asset basis. But here is the trick. The
accountant comes back and says: I know that,
but if I do as I propose, the error will be
immaterial and therefore I can. Neat trick. Now
this becomes the big company formula. So the
big company policy is to match cost with use
and the formula is the five-year life compromise
used to deliver that policy.
Now say that same big company realises that
reducing balance would better reflect the
matching of cost with use. Well, then that
company will keep its policy of matching cost to
use and change its formula to reducing
balance.
Obviously, that is a change of formula and not
a change of policy. But, as you know,
accountants who routinely use these formula in
their accounting do not call them formula. They
call them policies. You can now see this
meaning is in direct contradiction to the
standards. But these formula are still called
policies just the same.
Hence the problem. The original meaning of
policies is in the context of choice. The newer
meaning of policies is in the context of
formula. So the standards have one meaning
and people in the real world have another
meaning for the same word. This is common. So
when someone uses a word and the context
seems skewed, then ask them to explain a little
more and you might find they are using that
word to mean something quite different to what
you understand by that word. You can now
understand them and save yourself a whole load
of heartache. Here endeth the lesson.
Martin Jones lectures at LSBF
PQ
WORD BLIND
Martin Jones brings
you his latest quarterly
update from the
IASBs headquarters
I N
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F
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C
IALR
E
P
O
R
T
I
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G
S
T
A
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A
R
D
S
Check it out now the all-new NQ!
NQ magazine is an e-mag for newly
qualifieds who want to get ahead
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
26
PQ Magazine April 2014
PQ time-series analysis
In the latest in his technical series, Gareth John tells you all you need to know about time-series analysis
LETS GET TECHNICAL
I
f I could correctly guess this weekends lottery numbers then the next
of these articles would be written in the Cayman Islands (I would still
write the article as not only am I a man of integrity, but I have
absolutely no doubt that Graham Hambly would hunt me down to my
beach-side villa).
The problem is that its virtually impossible to accurately predict the
future, so I suppose that I will have to make do with writing on my sofa in
Cambridge. In your studies you see a variety of numerical techniques that
allow us to improve our predictions, including linear regression, index
numbers, the high-low method and the one that I am interested in for this
article, time-series analysis.
Time-series analysis .
Time-series analysis involves looking at what has happened in the recent
past to help predict what will happen in the near future. A time-series is a
series of results over a period of time. Lets say that the monthly sales
made by a business over a period of are:
Seasonal variation .
A seasonal variation (SV) is a regularly repeating pattern over a fixed
number of months. If you look at our time-series you might notice that
sales rise from month 1 to month 3, and then similarly from month 4 to
month 6. There appears to be a SV repeating over a three-month period
where sales get higher each month for three months. We could expect this
pattern to repeat in the future so sales are likely to rise from month 7 to
month 9.
Trend .
A trend (T) is a long-term movement in a consistent direction. Trends can
be hard to spot because of the confusing impact of the SV. The easiest
way to spot the Trend is to look at the months that hold the same position
in each set of three periods. For example month 1 is the first month in the
pattern, as is month 4. The sales in month 4 are higher than in month 1,
indicating a trend of rising sales.
Identifying the trend .
To identify the T we need to smooth out the impact of the SV. We do this
by calculating what are known as three-period moving averages. This
involves averaging the sales for three months at a time and then moving
down to the next three months.
Identifying the seasonal variation .
Now that we know the trend we can identify the specific impact of the SV.
We do this by comparing the time-series to the trend to see whether it is
above or below what we would expect. In month 2, the time series of 80 is
20 below the trend giving a SV of -20. In month 3, 150 is 30 above the
trend giving a SV of +30.
Month Sales (the Three-period moving Seasonal variation
time-series) average (the trend)
1 70
2 80 100 -20
3 150 120 +30
4 130 140 -10
5 140 160 -20
6 210
Predicting the future .
We can now use our knowledge of T and SV to make a prediction of what
sales will be in month 7.
Extrapolating T: We would expect T to continue to rise by 20 each month
(remember it is a long-term movement in a consistent direction!). This
means that T in month 6 would rise to 180, and then in month 7 it will rise
to 200. This doesnt mean that we expect to sell 200 in month 7 as the
seasonal variations mean that any given month will be above or below T.
Incorporating SV: Given our repeating three-period SV month 7 will be the
first month of a new pattern of three months. This means that month 7s
SV can be expected to be the same as month 1 (for which we have no
figure) and month 4 where we have -10. This tells us that the result in
month 7 can be expected to be 10 below trend.
Our prediction for month 7 will therefore be 200 10 = 190! Bear in
mind that this is still ultimately an estimate and sales in month 7 are highly
unlikely to be exactly 190.
Now try this one .
Sales for months 1 to 6 were 105, 140, 190, 135, 170 and 200
respectively. Assuming a three-period seasonal variation identify the trend,
the seasonal variations and then predict sales for months 7 and 8.
Once you have had a go watch me work my answers at
www.firstintuition.co.uk/blog.html.
For plenty of other tips and advice, including links to useful study
resources follow @aattoptutor on Twitter.
Gareth John is a tutor/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
Month Sales
(the time-series)
1 70
2 80
3 150
4 130
5 140
6 210
A time series will consist of distinct
patterns and if we can identify these it
makes it far easier to predict what might
happen in the future. The two main
patterns you need to understand are:
1. Seasonal variations
2. Trends
Month Sales (the Three-period
time-series) moving average
(or Trend)
1 70
2 80 300/3 = 100
3 150 360/3 = 120
4 130 420/3 = 140
5 140 480/3 = 160
6 210
You can see that compared to the
original time-series, the three-
period moving average figures
show a much more consistent
increase; in fact it is increasing by
20 each month. We would expect
this trend to continue in the future.
(Notice that you cant work out
figures for the first or last month).
Gareth Johns luxury ocean-side villa possibly
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TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM
WORD UP
Mark Ellis has had over 30,000 downloads
of his Accounting Dictionary App. You can
opt for either the Lite or the Pro v2.0 on
your iPhone or Android. Both have the
same functionality with v2 adding the
ability to work offline no data connection
required. The Lite version is free but will
have discreet ads, or you can go the Pro
version, which is the cost of a cappuccino
and is ad free. The thing to do is install the
free Lite version and if you like it upgrade
to the ad free Pro version simple! So
what are the most popular terms people
are looking up? They are depreciable
amount, input cost, participating
interest, limiting factor and gross loss.
THE WORLD KNOWS
CIPFA is rightly very proud to be the
2014 PQ magazine Accountancy Body of
the Year, but its senior people were
shocked recently at our global reach. At a
high-level meeting with a Nigerian
accountancy body and the first thing the
Nigerians did was to congratulate them
for winning the PQ award!
SECOND
HAND
CAR
SALESMAN
What would you do
to avoid tax? DJ
Chris Moyles
pretended to be a
used-car salesman
in the hope of
avoiding tax on 1m
of earnings. The
aggressive tax
avoidance scheme,
called Working
Wheels, meant he
had to tell HMRC
that he had spent
time engaged in
self-employment as
a used-car trader.
On his tax claim he
explained he had
sold one car for
3,800 but had run
up 1m of losses. A
tax tribunal ruled
that Working Wheels
should be dissolved
and the
450
people
involved
needed
to pay
290m
in tax owed. What
we cant understand
is why HMRC is not
pursuing Moyles
and the others
surely it is a criminal
offence to lie on
your tax forms.
WHERES ME MONEY?
Pop diva Rihanna has been
offered a $10m settlement from
her accountants after she
claimed they had made her
financially vulnerable. She
took her accountants to
court, claiming they
made so many bad
decisions she
effectively became
bankrupt in 2009.
She started that year
with $11m in the bank
and by the end of it
had only $2m left!
Dont worry too much,
shes recovered and
now has $43m in her
coffers. Her accountants,
Berdon LLP, had claimed it was
RiRis own financial actions or
inaction, and those working for
her, that had caused the losses.
They were not, however,
prepared to test the case in the
courtroom.
AWARD
WINNER
Sara Braidwood
and her team at
the NHS North
West Student
Forum didnt win
our Student Body
of the Year award
recently. But she
wont be too
disheartened as
she walked off with
the Unsung
Heroine of
Womens Cycling
at the London Bike
Show. Wow, that
girl is a busy bee!
GOOD LUCK CHARM
Did you know that in Japan
iyokans are being marketed as
good-luck charms for students in
exams? More than one of your
five sides a day (a joke!), the
iyokan is a pentagon-shaped
citrus fruit. PQ isnt sure how easy it is to get this lucky orange-
like food, as it is produced in Yawatahama, Japan.
JAGUAR DRIVERS SEXIEST
Women believe men who drive Jaguars
win the sexy stakes. A poll by Illicit
Encounters put Audi and Mercedes
drivers in second and third place
respectively. So what are the least sexy
car manufacturers? Bottom of the list
came Nissan, followed by Volvo, Renault
and Toyota. We at PQ tweeted this story
but unfortunately got our sexiest and
sexist mixed up, saying Jaguar drivers
were the sexist. Many of our followers
were quick to agree!
A TEDIOUS
DEBATE
Dr Stuart Waiton,
writing in the
Evening Standard,
says the Scottish
independence
debate has been
tedious because
the issue has been
reduced to some-
thing that can be
decided by
accountants rather
than people with
passion and belief.
So accountants
dont have passion
or belief?
38
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We have three great books by Christopher
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City 2013/14, Commercial Awareness
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write well at work. These great books are
indispensible guides for any PQ with career
ambitions. We reviewed Get to the Point in
last months issue and gave it a whopping 5 out of 5!
All you need to do is email graham@pqaccountant.com (headed
Stoakes) and we will do the rest. Send your address too!
A Complete Learning Solution from
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Kaplan Publishing is giving away a FREE ACCA
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To be in with a chance of landing this prize, email
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