PQ magazine June 2018 www.pqmagazine.com / www.pqjobs.co.

uk

THE VOICE
OF ALL PQs

THOSE EXAM
RESULTS P6 & P10
We run the rule over the P23
latest CIMA and ACCA pass
rates – so what was good and REPORTS
what was bad? Who reads the
Contact us financial reports –
email: graham@pqaccountant
twitter: @pqmagazine and why
call 020 7216 6444
P14

TOP ACCA
CIPFA CASE P22
How you can best prepare
EXAM TIPS CAREER ADVICE
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PQ CAREER advice for PQs
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CONTENTS
News
06CIMA results The good and
the bad in the latest exams
08Career concern Is your path
to success being obscured?
10ACCA exams A tough F5, plus
all the other results from March
Features, etc
04Mind your Ps&Qs Young
finance professionals need to get
savvy about social media; and
brutal truths facing the FRC
12PQ conference Sign up now
for the PQ/LSBF one-day career
conference – check out the
details of how to book your place
13CIMA strategic case Why it
pays to take a tactical approach
14Career advice Top tips on how
to get ahead from someone
who’s been there and done it
15ACCA PER Getting the right
practical experience it vital to
becoming a full member
16ACCA top tips The subjects
our experts think will come up in
the imminent June exams
20Objective tests How to tackle
this different kind of challenge
22CIMA spotlight Coping with
the stress of taking exams
23Financial reports Who
actually uses them and what
information are they after?
24ACCA P4 paper Passing this is
all about the right technique
Gain vital insights to give your students
their best chance at exam time
Powerful analytics used
by awarding bodies
Compare classes,
partners, and client firms
Live statistics
Identify weak subject areas
Flag common mistakes
Improve grades and
test times
Track student demographics
Mention PQ Magazine for a FREE TRIAL
Visit getrogo.com or call 0203 151 1331
June 2018
26CIPFA case study Be
prepared – this is a tough one!
27ICAEW update What you need
know as the Advanced level
exams become computer-based
28ACCA Professional Two of
our experts explain changes to
some of the core exams
29Careers Life at Deutsche Bank;
and the best of social media
30Fun stuff – and our giveaways
The columnists
Robert Bruce It’s time we stopped
the lawyers from getting their way 6
Prem Sikka FRC’s recent woes
hint at deeper problems
Zoe Robinson Stephen Hawking –
a role model for us all 10
Subscribe to PQ magazine
It’s FREE – go to page 22 or see
www.pqmagazine.com
ABC July 2016 – June 2017
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Publisher’s statement: We send a
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comment PQ
Be global – it’s your career!
How’s the accountancy career going? All you expected it to
be? If you want to know how to future-proof your career, then
there is only one place to be – our free one-day London
‘Being Global’ conference. The date to put in your diary is 11 June, and
we have now added some more great names including Andrew
Williamson from the AAT and Adam Birt from the ICAEW. Maggie
McGhee will also be on hand to put a real-world spin on the extensive
research the ACCA has undertaken in the past couple of years on
‘Generation Next’. Along with digitalisation, we know that globalisation is
going to continue to be one of the industry’s big influencers in both the
short and medium-term. For the full list of speakers see page 12. And
remember, booking a place couldn’t be easier. Just go to www.being-
global.eventbrite.co.uk and sign up.
8
Pass rate heaven
This issue is a bit of a pass rate special. We have the ACCA and ICAEW
March exam results on our news pages, and we also have the latest
CIMA case study pass rates and all the OT rates. PQ has always
championed the need for transparency when it comes to pass rates,
and the magazine is unique in putting these all on show together.
ACCA’s new Strategic Professional exams
June will be the last sitting of ACCA’s P1 and P3 exams. From
September the exams will be replaced by an new case study – Strategic
Business Leader (see page 28 for more on this). A top tutor suggested
to us last month that it would be a really nice gesture from the ACCA if
it published the March exam papers in full. It usually publishes
question samples from the September/December and March/June
exams. But there will be no June test, so there’s no point in continuing
this for P1 and P3! Unfortunately, our request fell on deaf ears.
Graham Hambly, PQ magazine editor (graham@pqaccountant.com)
The
e-learning
platform
PQ have your say
Social media worries
I enjoyed your article ‘You are
being stalked!’ (PQ magazine, May
’18). It was a timely reminder of
how far social media has crept
into all our lives. I was a bit
surprised that, according to your
story, only one-third of recruiters
regularly use social media when
researching potential candidates. I
would have thought they all did!
I’m much more shocked,
however, at the naivety of many of
the respondents to the CV-Library
survey. Three-quarters of these
accountancy professionals “expect
to be ‘Googled’” by recruiters –
which means that one in four
Our star letter writer wins a fantastic PQ memory stick!
Thanks and farewell
Could I please cancel my PQ
magazine? After what seems like a
million years I have finally become
ACCA qualified. I registered for
ACCA many years ago and went full
steam to pass my exams as soon as
I finished my AAT studies. I
changed jobs a few times and
unfortunately my employers would
not support me in my studies (I
couldn’t afford it myself back then).
Fortunately, two ACCA exam
changes meant that I did not lose
the six exams I’d already passed.
My mum constantly asked me
when I was going to restart my
studies as I was so close. I
restarted my studies in 2014 and
kept it a secret from mum as I
wanted to surprise her.
Unfortunately, she passed away
in October 2014, which then meant
another delay to my studies as I
had to deal with her probate. My
greatest regret is that she never
saw me complete my studies.
After completing the final 3 P
papers I become fully qualified in
April 2017. ACCA took five months
to issue me with my certificate, but
I can now look at it with pride but
tinged with a bit of sadness.
Thank you again for your
wonderful magazine and I want to
wish you and all accounting
PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: graham@pqaccountant.com
Website: www.pqmagazine.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, Zoe Robinson,
Tony Kelly, Phil Gammon | 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
don’t. Incredible.
Surely this generation of young
finance professionals – which
includes me – should be really
I need
pqjobs.co.uk
students the best of luck for now
and the future.
Paula Kell, by email
FRC home truths
I read the lead story in last month’s
PQ, headlined ‘Carillion fallout:
FRC under threat’, with interest. It
Published by PQ Publishing © PQ Publishing 2018
email graham@pqaccountant.com
savvy when it comes to
technology in general, and
social media in particular.
These people should
understand that almost
everything they do on social
media could, one day, come
back to ‘haunt’ them. At least
set your ‘privacy’ settings so
you are protecting your data,
etc, as far as you possibly
can.
And most ridiculous of all?
The fact that (some) young
accountants think it’s
acceptable to send in a selfie
when they are putting themselves
forward for a new job. The mind
boggles!
Wise up, people. Thanks to
mentions LAPFF’s claims that the
regulator is just too cosy with the
Big 4 firms and the CBI. However,
you fail to mention that FRC’s Chair
Sir Winfried Bischoff wrote to
LAPFF (the Local Government
Pension Fund Forum) after its
corporate governance code
social media we are all public
property, our indiscretions
available to whoever can be
bothered to Google us.
Name and address supplied
The editor says: Lots of people get
a lot of pleasure out of social
media, but you are right, there are
inherent dangers. Your point about
privacy settings is a good one, we
must all protect ourselves as much
as we can. Enjoy it, but be aware
of the perils, too.
Whether we like it or not, social
media is here to stay – most
businesses today use social media
as a marketing tool so it pays to be
‘tech savvy’, as you say in your
letter. By the way, our social media
round-up is on page 29!
consultation submission. On the
matter of being in collaboration
with the CBI, the FRC says: “This is
an incorrect statement and
illustrates the dangers of drawing
arguments from historic
documents.” When the FRC was
established in 1990 the CCAB and
CBI presidents held representative
positions on the Board and
Council. Moreover, the FRC’s
governance changes in 2007
brought an end to any
representative seats on the Board
and abolished the
Council. Sir Winfried
also refuted the
claims of ‘internal
cultural problems’.
No organisation is
perfect and I think
the FRC is often
found between a
rock and a hard
place. How can it fulfil its role
without top accountants?
By the very nature of the market
many of the best will have worked
for the Big 6. To exclude these
means you lose a vital talent pool.
Or do you suppose many
accountants cannot act honourably
after coming into contact with these
firms? The days of the ‘Andersen
Androids’ is long gone, surely!
Adam Perkins, by email
ICAEW
COMPUTER-BASED EXAMS

ACA exams are changing

GUIDANCE AND SUPPORT FOR ACA STUDENTS

All ACA exams will eventually move from paper to Here is a summary of the exams moving to computer in 2018.
computer-based, so getting to know the new exam
format in advance of your exam is crucial to success. PROFESSIONAL LEVEL
March Business Planning: Taxation
&RPSOHWHWKHƓYHVWHSVEHORZWRHQVXUH\RXDUHIXOO\ Business Strategy and Technology
prepared and have everything you need for the day
of your exam. June Business Planning: Banking
Business Planning: Insurance
1 Read the exam guidance
ADVANCED LEVEL
2 Watch the exam webinars
July Corporate Reporting
3 Use the practice exam software Strategic Business Management
4 Review the sample exams
Guidance, support and resources are available to you at
5 Read the Instructions to Candidates icaew.com/cbe
PQ news
ROBERT
BRUCE
Time to
ignore what
the lawyers
demand
You can blame it all on US lawyers. It
is, after all, because of them that the
world doesn’t have a universal global
system of financial reporting
standards, a properly harmonized
system. It is just that the US doesn’t
subscribe to systems not invented at
home. But that is not what we need to
focus on today. We need to go back
to a point almost a 100 years ago.
Mervyn King, Chairman of the
International Integrated Reporting
Council, told the story in his recent
annual IIRC address. The Ford Motor
Company, the great pioneer of both
mass-production as a concept and
cars as the product, decided that to
keep its great assembly lines running
for longer hours they would increase
the pay of their workers. They were
making huge profits, equivalent to
$6bn today. So they decided to use
this surplus to increase wages. But
they reckoned without the Dodge
brothers, who would later go on to
become competitors, but at this point
were 20% shareholders in Ford. The
Dodge brothers argued that the super
profits were owed to shareholders
first and, if at all, workers second. So
in 1919 the two sides went to court.
Dodge won. The legal primacy of the
maximization of shareholder wealth
was cemented in the minds of US
lawyers and the business world for
generations to come. And that is why
the current revolution that instead
recognises the primacy of the
creation of long-term wealth for all
stakeholders is so important.
Overthrow lawyer-think.
Robert Bruce is an
award-winning writer on
accountancy for The Times
In brief
Fine for fly-tipping firm
London accountancy firm
Ommegas Services Limited has
been fined a record amount for
repeatedly fly-tipping bags of
rubbish. Magistrates fined the firm
more than £35,000 for dumping
waste that included shredded
paper and correspondence,
making it the largest ever handed
out by Brent Council. The court
heard that Ommegas had ignored
warnings from Brent’s enviro-crime
team, including a £400 fixed
penalty notice.
6 PQ Magazine June 2018
CIMA results in the bag
PQ magazine
EXCLUSIVE
CIMA has released the latest batch
of OT and case study pass rates,
and while ‘consistency’ has become on the 2017 figures.
the byword for the current figures
there does appear to be a bit of a
reoccurring ‘problem’ with P1.
The new stats show P1’s total
exams passed percentage remains
at 45%. At the same time, both P2
CIMA CASE STUDY FEBRUARY 2018 EXAM PASS RATES
Feb 18 Nov 17
Operational 51% 49%
Management 74% 56%
Strategic 63% 66%
FRC ups the ante
The Financial Reporting Council
has announced big plans to
enhance its monitoring of the six
largest audit firms. It could mean
senior audit appointments by the
firms could be vetted by the
industry watchdog for the first time.
The FRC said it needed to
change the rules to avoid systematic
deficiencies within firms’ networks,
disruption in the provision of
statutory audit services, and
instability in the financial sector.
ACCA/Trinity sign MoU
ACCA has signed a new
Memorandum of Understanding
(MOU) with Trinity College Dublin.
This will see the creation of a new
MBA entry pathway, coupled with
an MBA fee bursary for ACCA
members. Trinity will also be
supplying a range of CPD-approved
courses focused on the expanding
knowledge of emerging
technologies such as big data.
‘Shameful’ interest rates
A single mum with twin girls
and F2 saw a jump in their total CIMA OT PASS RATES
exams passed to 52%. The first-
First time Total Overall
time pass rate of P1 is also much
E1 79% 75% 88%
lower than P2 and F2, at 50%.
P1 50% 45% 69%
There are also some great pass
F1 73% 69% 84%
rates, too! E2 has a first-time
E2 88% 86% 95%
success rate of 88% and E3 is
P2 56% 52% 79%
70%. Even P3’s rate, at 62%, is up
F2 56% 52% 80%
E3 70% 71% 84%
The case study good news is the
P3 62% 54% 79%
February 74% pass rate for the
F3 60% 55% 80%
Management case study. The
Operational case study success rate
also crept over 50% – to 51%. given a clean bill of health. He
CIMA’s exam chief, Steve stressed this does not mean CIMA
Flatman, told PQ isn’t always looking for
that there has improvements. Flatman said CIMA
Aug 17 May 17
been a recent was also aware of the importance of
53% 47%
audit of the publishing pass rates: “People
68% 73%
whole case study spend over five minutes having a
62% 66%
exam and it was good old look at the data.”
Melaine
McLaren
FRC’s Melaine McLaren said:
“We will discuss with firms how well
candidates for key leadership and
governance roles such as
independent non-executives, heads
of audit and ethics partners meet
our expectations in terms of Big 4 dominance.
experience, skills and attributes.” The FRC has also gone on record
Meanwhile, McLaren and another as saying it welcomes the
senior executive, Paul George, are independent review of its role and
both understood to have recently powers (see last month’s PQ
stood down from the FRC’s main magazine for our story on the
board in the wake of criticism over possible demise of the FRC).
Brotherly love there were some interesting add-
ons! Among the list of charges –
You need your taxes done and your which added up to $2,893.42 –
brother is an accountant. It only were an ‘obnoxious fee’ of $210;
seems logical you would ask him to ‘interest on a $10 loaned in high
do it as a favour. Well, a great story school to go to the carnival’
popped up on thepoke.co.uk, where $678.42; an ‘extremely grumpy fee’
the brother’s accountancy bill went of $300; and ‘brother fee’ of $225.
viral. The brother in question got the Oh, and we forgot to mention the
preparation of accounts for free, but ‘high maintenance fee’ of $500…
(who both went to university) is unsecured personal loan. This
taking on the government over the currently stands at 3.81%, way
interest rate for student loans. lower than the 6.1% for student
Fiona Kirton has begun legal action loans (it goes up to 6.3% in
over the sky-high rates, as she September).
believes it breaches the small print
of the legislation. She says the Facebook Live for ACCAs
Teaching and Higher Education Act LSBF is again running its
of 1998 states that interest rates on award-winning Facebook Live
the loans must be “lower or no sessions for the June ACCA exams.
higher than those prevailing on the First up will be F8, P1 and P7 on 1
market”. An explanatory June. Watch out for timings – there
memorandum uses a benchmark are 5pm, 6pm and 7pm start times.
for this of a Bank of England These mentoring sessions are a big
published rate for a £10,000 hit with thousands of students.
 Study for your
final exam
before the ACCA
Professional
Level changes
If you’ve only passed one of the P1 or P3
papers, you’ll need to pass the other before
September 2018, otherwise you could be at
risk of ‘losing’ a paper.
Give yourself the best chance of passing your
remaining P1 or P3 paper by booking one of
BPP’s Revision and Exam Practice courses.
With a range of courses available towards
the June exam sitting, you can find a suitable
programme that works around you.
Alternatively, if you want to sit the new
Strategic Professional Level exams in
September, we have courses which are also
available to book now.
Get in touch for more information about any of
our ACCA courses.

For more information

 03331 224 093
 bpp.com/acca
PQ news

PREM
SIKKA
FRC woes
symptomatic
of deeper
problems
The government has announced its
review of the Financial Reporting
Council (FRC). The temptation will be
to make minimalist gestures. That
would be a wasted opportunity
because the FRC’s shortcomings are
symptomatic of deeper problems in the
UK regulatory architecture.
The UK is scarred by a ‘chummy’
regulatory system. The papers are full
of stories about money laundering, tax
avoidance and banks making vast
profits by rigging interest and foreign
exchange rates. The perpetrators face
little retribution. The regulatory bodies
are colonised by the very industries
they are supposed to be regulating and
are inevitably too sympathetic to the
elites. The FRC is one of 29 financial
sector regulators dealing with matters
such as money laundering. Do these
regulators even talk to each other? It
is hard to think of any action taken by
the FRC or accountancy bodies against
firms involved in money laundering.
Career paths are not clear
Too many young finance they thought it provided the Metcalfe, said: “Public sector
professionals in the pubic sector opportunity for them to learn and organisations are typically unable to
are being left in the dark about develop skills. Once there, many compete on remuneration for top
their potential career paths, says a are finding the talent, but must
new report from the ACCA. reality doesn’t instead communicate a
Worryingly, just one in four (26%) live up to the holistic offering to
of these young professionals believe promise. candidates that
that a clear career structure exists The long- includes clear career
in their current organisations. term concern paths and a positive
ACCA’s ‘Generation Next: is that the work environment.” He
managing talent in the public public sector went on to say that
sector’ showed that 92% of will lose out as attracting, developing
respondents were attracted to the talent goes elsewhere. ACCA’s and retaining staff in the public
public sector employers because head of public sector policy, Alex sector must now be the top priority.
Future-proof
your career
PQ magazine is joining forces with
LSBF to offer readers a fantastic
opportunity to find out what a
career in accountancy might look
like in the future.
We have CIMA’s Noel Tagoe,
International ACA prizegiving ceremony: The ICAEW recently celebrated all ACCA’s Maggie McGhee and
its 2017 exam prize winners. The PQs and NQs were welcomed by President ICAEW’s Andrew Birt opening our
Nick Parker and keynote speaker George Acquah. Read what advice Acquah, one-day conference. Even CIMA
CEO Andrew Harding wanted to get
the finance manager at Rolls-Royce plc, had for the guests on page 14.
involved, and he will be part of a

Student scores go higher

The FRC’s Corporate Governance
Code has a voluntarist approach to
governance. That does not give
enforceable rights to stakeholders and
enable them to shackle miscreants.
Indeed, the whole purpose of the Code
has been to prevent statutory
developments that could enhance
people’s rights. The UK lacks a central
enforcer of company law and in this
vacuum corporate governance abuses,
such as those at banks, BHS and
Carillion, continue to make headlines.
Tweaking the FRC alone can’t deal
with the failures. A bigger cultural and
institutional change is needed but is
not on the government’s agenda.
Prem Sikka is Emer itus
Professor of Accounting
at the University of Essex
panel discussion on road-mapping
your career. He will be joined by
among others Andrew Williamson of
ACA professional exams students Management on 80.4%. The paper the AAT.
scored highly in all March ACA with the worst pass rate was the There will be a real ‘global’ feel to
exams, according to the ICAEW. Business Planning: Taxation, which the day, hence the title: ‘Being
The Business Strategy and had a success rate of 68.3%. Global: Future-proof your career in
Technology paper had the highest Over 2,678 students sat the accountancy’. It’s a free conference,
pass rate at 88.2%, closely followed
March exams, with most opting to and we expect it to be over-
by Financial Accounting and sit just one paper. subscribed, so get on Eventbrite
Reporting at 86.3% and Financial Just over 1,000, some 72.3%, and sign up asap. Go to www.being-
ICAEW PROFESSIONAL LEVEL RESULTS passed the global.eventbite.co.uk and put 11
MARCH 2018 All First time paper they sat. June in your diary planner now!
Audit & Assurance 78.8% 82.3% However,
Financial Acc & Reporting (IFRS) 86.3% 88.3% 76.5% of those Check out our top ACCA exam
Financial Acc & Reporting (UK GAAP) 81.0% 80.6% sitting two
Tax Compliance 76.8% 81.7% papers passed tips – they are on pages 16-18.
Business Planning: Taxation 68.3% 70.3% both. Another And see our website for even
Business Strategy & Technology 88.2% 91.7% 15.9% past
Financial Management 80.4% 86.6% one of the two.
more tips for the June exams

Corruption rising
The scale of bribery and
corruption has shown no
improvement globally since
2012, despite the
unprecedented level of
enforcement activity and introduction of new
corporate criminal liability laws in that time.
This is, according to the 15th EY Global Fraud
Survey, which claimed the $11bn dished out in
financial penalties was having no effect on
behaviour. In the UK, some 34% of
respondents said that they believed bribery and
corruption happens widely in business, an
increase of 20% from the 2012 survey. This
level is also higher than the average of 21% in
Western Europe.
KPMG’s plastic pledge
KPMG has said it will stop using plastic water
cups across its 22 offices in the UK by the end
of this summer. Its staff use three million cups
every year. A successful pilot in the
Manchester office saw the plastic water cups
phased out during March, and the firm’s 1,100
employees given free metal water bottles.
KPMG’s environment manager, Sara Lindsay,
revealed the firm spends £60,000 on plastic
cups every year. “Even with supplying each of
our 15,000 employees with a free metal water
bottle, the scheme is projected to pay for itself
within 18 months,” she stressed. Plastic cups
from its hot drink vending machines will also
be phased out by August 2018, saving another
three million cups. These will be replaced by
either paper or compostable cups. Lindsay said
KPMG has removed the use of plastic straws
and will phase out plastic cutlery this year.
Premier League revenue rises
The Premier League clubs’ combined revenue
increased by nearly £1bn to a new record of
£4.5bn in the 2016/17 season, says the latest
report from Deloitte’s sport business group. It
discovered the collective pre-tax profit for all 20
clubs was £0.5bn, almost three times the
previous record of £0.2bn in 2013/14. All
clubs made an operating profit and 18 out of
20 recorded a pre-tax profit. Wages costs
across the league rose by 9% to £2.5bn, but
Deloitte said this was a significantly slower
growth than the 25% increase in overall

8 PQ Magazine June 2018

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PQ news

ZOE
F5 just got tougher
and stuck at 40%... jeez.”
The P7 pass rate wasn’t much
ROBINSON better at 30%. It is hardly surprising

for ACCA students

From
curiosity
to black
holes
The death of Stephen Hawking in
March was clearly a sad event and
yet his passing was met by many with
reflections on his achievements rather
than lamenting his loss. Was this
because he was a public figure who
had clearly been ill for some time? Or
maybe it was his brilliant academic
achievements, including the discovery
of Hawking radiation, that somehow
made his death a relatively small
The ACCA March exam results are
in and for many PQs they make
scary reading.
When PQ magazine put out its
post-March feedback we said it was
a hard F5, tough F7 and a lovely
F8! Well, F5 had a 39% pass rate
and so did F8, so where does that
leave us? F7, on the other hand,
had a pass rate of 48%.
The next question is why anyone
would sit P5 and P7! As one P5
March sitter said: “The likelihood is
most of us will have failed.” At
29%, the paper had the lowest
pass rate this Spring, and P5 had
the lowest pass rate in December,
too, when it was… 29% again!
Students need to start putting
pressure on tutors to explain why
they can’t help them pass. ACCA
also needs to put even more
resources into the optional papers.
How can two-thirds of sitters fail
when they are so close to becoming
affiliates? Students told us: “It’s an
awful paper”, and “I guess I better
switch to P4 then, 5 attempts at P5
that Tingz said: “OK – this is why
I’m as scared as hell.” And Perfect
Spice revealed: “Scared of sitting it
[P5] in June.”
The ACCA pointed out that over
100,000 PQs sat the March sitting
(100,487 to be precise). In all,
some 127,267 exams were taken
and 3,430 students became ‘exam
passed’ – affiliates, in other words.
That’s an average of 1.27 papers
per PQ.
ACCA MARCH 2018 PASS RATES
F1 78%; F2 67%; F3 71%; F4 81%; F5
39%; F6 46%; F7 48%; F8 39%; F9
46%; P1 51%; P2 49%; P3 52%; P4
41%; P5 29%, P6 37%; P7 30%

The robots have arrived

event in the grand scheme of the
universe and everything? But Hawking
had two other great qualities: a
cheerful dispossession and wicked
sense of humour, and an intense
curiosity. He once said: “I am just a
child who has never grown up. I still
keep asking these ‘how’ and ‘why’
questions. Occasionally, I find an
answer”.
And here is the good news:
curiosity can make learning enjoyable
and studying more effective. If you
take an active interest and genuinely
want to find out more, your brain will
reward you in a number of ways. First,
you will become highly motivated,
feeling that you want to study rather
than have to. Second, your ability to
retain information increases. Third,
you feel happier and more satisfied as
the brain, fired up by anticipation and
novelty, releases dopamine, the happy
hormone.
Maybe that’s why people
celebrated Hawking’s life; after all, he
spent most of it in a constant state of
curiosity, asking questions and
sometimes even finding the answers.
Zoe Robinson is Learning and
Programmes Director at
Kaplan Financial
of change of circumstances is also
one for the robots.
Meanwhile, the Serious Fraud
HMRC says it has now processed Office (SFO) has said it will use
over 10m transactions using robots robots to sift evidence 2,000 times
since 2015. And it is claiming AI is faster than a human lawyer! The
improving efficiency and the SFO confirmed it will begin
customer experience. managing all new cases with the
So where might you meet these technology and hopes OpenText’s
robots? HMRC uses automation to automatic document analysis will
process requests for tax rebates for reduce costs, allow investigations to
customers. The request is received move quicker, and achieve a lower
online and the form is processed error rate than the work of human
(mainly on the day they are lawyers. Its robots can process
received) and a letter is more than a million documents a
automatically sent by post. The job day.
Getting on the case
A media streaming couchpotato! The
Middle-class grab
Fears over a ‘middle-class grab’ of apprenticeships are
company, a luxury subscription model has a
valid, says skills minister Anne Milton.
leather goods brand and lot of similarities to
She told the inquiry into the economics of FHT
a transportation group Netflix, but as BPP’s
education she was now “watching and waiting” to see if
are the subjects of May’s Dave Halford reminds
there is any fall-out to all the changes that are being
CIMA case studies. sitters: “Don’t waste your
made, and will take appropriate action if it appears
It’s Couchweb that is time on external
apprenticeships are not working.
the focus for the research, which will be
She told the inquiry: “The majority of apprenticeships
Strategic case study. One of little or no value.”
are at Level 2 and 3. I think they still make up 90% of it.”
student wondered why • See more from Halford
Her worry, however, is apprenticeship degrees, although
CIMA hadn’t gone all the on the strategic case on
she said she wasn’t quite ready to react, there is a real
way and just called it page 13 of this issue.
concern these could distort the market.

In brief
A handy calculator Sustainable accounts can check out the guide by going Kaplan’s Eagle takeover
Want to check out your The Association of to https://tinyurl.com/yabpeo3c Kaplan has been on the
take-home pay after all International Certified Professional acquisition trail again. This time it
those student loan Accountants (CIMA and AICPA) New foundations has bought top AAT college Eagle
deductions? Then has launched new guidance on A new foundation Education & Training Limited. The
you need to visit how management apprenticeship in accountancy, AAT award-winning college, owned
SalaryBot, a accountants can help developed by Skills Development by Sonya Ashbarry, changed hands
handy salary companies achieve the Scotland in partnership with AAT, in late January. Based in Wrexham,
calculator that United Nations’ Sustainability has now been approved. The Eagle was formed in 2002. Kaplan
works out your Goals. These goals aim to apprenticeship is aimed at senior also bought Osborne Books in
take-home pay address world issues, including phase pupils making decisions February 2016 from Michael
from your gross poverty, hunger, health, about which subjects they will Fardon. Earlier this year, Osborne
wage. You can see just how education, climate change, gender study in S5 and S6, giving them an launched an innovative series of
much more that pay rise will mean! equality, water, sanitation, energy opportunity to take their first steps revision aids for ACCA PQs in the
Go to https://salarybot.co.uk environment and social justice. You into the finance industry. form of its ‘Osborne Revise’ series.

10 PQ Magazine June 2018

PQ one-day conference

Whole world in your hands be there to give a consultant’s view of

Make sure you understand what your options are when it comes to a career
what the current trends are. Just before
in accountancy. Sign up to our one-day London conference on 11 June lunch (which we will supply) other
employers will be talking about the real
world of work.
In the afternoon there’s a panel
discussion, with among others the CEO of
CIMA, Andrew Harding, and AAT’s
Andrew Williamson. We also have the
head of ACCA UK, Claire Bennison, and
AAT’s Lea Watson talking about
apprenticeships.

H
ere at PQ magazine we have
joined forces with LSBF to host
‘Being Global: future-proof your
career in accountancy’, a free one-day
conference looking at how you can
ensure career success in a global world.
Open to all, the conference is full of
big hitters from the world of accountancy.
ACCA’s Maggie McGee, director of
professional insight, will do what she
does best – give us an insight into the
future and explain how PQs can future-
proof their careers. ICAEW’s head of ACA
development and special projects, Adam
Birt, will also be on hand to look at the
globalisation of the profession and how
the qualification can give you wings.
We open the first session with CIMA’s
Dr Noel Tagoe, who will explain exactly
what employers want from today’s and
tomorrow’s PQs.
Pro-recruitment’s Tom Eagle will also
The day is a great chance to network
and see which accountancy body you like
best! It’s also a unique chance to talk to
the people who run the profession.
To book your FREE place just go to
www.being-global.eventbrite.co.uk and
we will do the rest.
You really need to put Monday 11 June
in your diary. Just so you know, we are
using the London Bloomsbury campus of
the University of Law, which is a short
walk from Goodge Street, Tottenham
Court Road, and Warren Street tube
stations.
The PQ team will also be on hand for a
chat, so we look forward to catching up
with you on 11 June.
See page 25 for more details. PQ

Embracing change,
shaping futures. Together.
Our new Ethics and Professional Skills module (EPSM)
is now LIVE, ensuring you have the vital ethical principles
for the evolving digital age.

The module:
• covers ethics and professionalism, personal effectiveness,
scepticism, leadership, communication and interpersonal skills

• teaches you via real-world business situations

• provides flexibility, allowing you to start alongside any applied
skills exams you are sitting

If you have completed our previous Professional Ethics module,

you are not required to sit EPSM but it gives an ideal grounding
to start the Strategic Professional exams.

For more information visit:

future.accaglobal.com/changes-to-the-qualification

12 PQ Magazine June 2018


You need to take a tactical approach
if you want to pass the strategic
level case study, says Dave Halford
T
o be sitting this exam you will likely have
some experience of the ICS cases at the
Operational and Managerial levels.
However, at the Strategic level you need to
prepare yourself for a very different exam.
Structure
Let’s start by taking a look at structure of the
exam. There are always three tasks, as follows:
• Task 1 – two sub-tasks worth 15 or 16 marks
each.
• Task 2 – two sub-tasks worth 15 or 16 marks
each.
• Task 3 – four sub-tasks worth seven or eight
marks each.
These will total 91 marks, supplemented by
the nine integration marks.
While CIMA release sample answers and
marking grids, they do not release a detailed
marking guide. However, comparing these it
seems clear that the marking team are applying
‘The Rule of Two’ – in other words, any valid
point you raise is potentially worth a minimum of
two marks, if properly explained and related.
Indeed, in Tasks 1 and 2 it may be that up to
three marks may be awarded for a properly
explained point in some cases. This is important
to know as it helps you plan your answers, as
we’ll show below.
A common requirement for one of the sub-
tasks in Task 1 is to ‘evaluate the strategy of…’
Applying the ‘Rule of Two’ means you should be
looking to make seven or eight comments, each
potentially attracting two marks, to get to the
maximum allocation of 15 or 16 marks.
Technical content
Unlike the other ICS exams, the strategic level is
very light on technical content. For starters,
despite the pre-seen containing the financial
statements of the featured organisation, and
often those of a direct industry rival, you won’t
be asked to performed any detailed calculations
based on them.
Similarly, you should not expect to be quizzed
on theories and models (such as Mendelow,
PQ Magazine June 2018
Rule of two
Porter, etc), as you’ve proved you understand
these theories in your OT exams.
At the strategic level, the examiners are
looking for you to be able to demonstrate that
you are able to give commercial analysis and
advice at the level of a senior financial manager
(for example financial controller). In the real
world, you may refer to the odd piece of theory
to support your analysis, but you would expect
to focus on what your organisation should
actually be doing, not explaining – for example –
the meaning of ‘HRM in the Value Chain’.
Common requirements
To date, there have been 13 sittings (meaning
65 exams) and analysis of past exams reveals
some commonly asked requirements. The most
notable of these are:
• Evaluate potential investments/proposals, eg
mergers, joint ventures, new products (F3/E3).
• Evaluate the strategic fit of a proposed
investment (E3).
• Evaluate strategic risks of potential
investments/proposals (P3).
• Explain how/why a share price may react to
unfolding events (F3).
• Explain how to value a business (F3).
• Assess the financial impact of a proposed
investment (F3).
• Identify potential merger synergies (F3).
• Discuss risks and how to manage them (P3).
• Advise on foreign exchange risk and hedging
(P3).
• Evaluate the ethical implications of a particular
course of action (F3/P3/E3).
• Advise how to deal with ethical dilemmas/
risks (F3/P3/E3).
• Discuss mentoring schemes (E3).
• Change management and team building (E3).
• How to motivate and retain staff, eg evaluate
bonus schemes (E3).
• Explain how to communicate a decision to
staff or the stock market (E3).
• How to manage negotiations – with a merger
partner/supplier (E3).
• Contents of a press briefing (E3).
CIMA strategic case PQ
• Advice on Corporate Governance – board
structures, remuneration and internal control
(P3).
• Advice on integrated reporting (F3).
• Identify and justify suitable CSFs and KPIs to
drive performance (E3).
Although the exam is assessed under the four
headings of Technical, Business, People and
Leadership skills, you should not concern
yourself with the distinction between these as
CIMA themselves appear to be flexible in how
they classify topics; for example, in November
2017 dealing with foreign exchange risk was
classified under ‘Technical’ in exam version 3,
and under ‘Business’ in version 2.
May 2018 Case
This case study concerns Couchweb, an internet
streaming company with a resemblance to
Netflix. Remember, however, the whole point of
the pre-seen is to ensure that all students enter
the exam with the same level of industry
knowledge, so external research will be of little
or no value. Based upon what we have seen in
past exams, possible exam topics could include:
• Merger/takeover talks – possibly with
HomeVideo or MovieMaster.
• How to finance a takeover – debt/equity/cash.
• How to deal with regulatory oversight of a
takeover/merger.
• Dealing with negative press – eg under 18s
accessing content with mature themes.
• Dealing with piracy.
• Review the price of subscriptions and/or
changing the number of log-ins.
• Sustaining growth via further overseas
expansion, or diversifying into music streaming.
• Dealing with a data breach – auditing systems,
dealing with publicity, impact on share price.
• Vertical integration – acquiring a content
provider, such as Majik Media.
• Retaining staff.
Remember, these are only possible scenarios.
As always, you should prepare yourself for
unexpected in the Strategic Case exam. PQ
• Dave Halford, Strategic Case Lead, BPP
13
PQ career advice

TENTOPTIPS
George Acquah was the star turn
to the ACA prize-giving ceremony,
where he gave the winners his ’10
things to leave you with’
1. Play to your strengths – you don’t see great
attacking footballers spending time developing
their defensive qualities! We all have our
strengths and we should know what they are
and play to them. It’s the way to succeed.
2. Share your knowledge – someone once said if
you are the smartest person in the room you are

G
eorge Acquah is the finance manager
for the central Marine HQ corporate
function at Rolls-Royce. Before joining
the firm he spent six years at PwC, working
mainly in audit, but he also spent a year on
secondment to Lehman Brothers Investment
Bank Administration. Oh, and he’s also a prize-
winner himself, landing the Howitt prize in 2013.
A London boy, he studied physics at university
and finally became an accountant. But, he told
the packed audience, he wasn’t always an
accountant. For a while he was a professional
musician, and he still loves playing (the piano)
and felt you don’t have to define yourself at a
particular time. However, while you may not be
defined by your profession you should, he
stressed, be defined by your values.
Acquah told the audience that he had 10
things he wanted to ‘leave you with’, which can
also be known as his common sense reminders,
and here they are:
in the wrong room! But, sharing is the way to
grow, stay motivated, and build a role in the
organisation. It also increases productivity.
3. Take risks – as president of the Nottingham,
Derby and Lincoln Society of Chartered
Accountants, Acquah is the youngest and first
ethnic minority president they have had. The
role has taught him new skills, such as how to
become more creative, and his confidence has
grown. But don’t go crazy! You need to weigh up
the chances of success and failure.
4. Dream big, dream small – nothing can stop a
dream whose idea has come.
5. Keep learning – in an environment where
everyone is learning it often means everyone is
teaching as well. If you have to keep doing the
same things just try to do them better.
6. Do what makes you happy – as long as it
doesn’t hurt anyone else. And being happy
certainly improves performance.
7. Harness your passion – passion motivates
Acquah: ‘stay
motivated and
build a role’
and drives commitment. It can also help you
find that extra level of performance.
8. Always do the right things – ethics is a thread
that goes through all the exams. You must
always remember you are representing the
institute and yourself at all time.
9. Own your future – do what you want, decide
what you want to do and then you will choose
your future.
10. There is no secret to success – just keep
doing what you are doing. Oh, and if you are a
prize-winner, it doesn’t do you any harm if you
put that on your CV. PQ

Need help preparing for

your exams in June?
Join the ACCA Exam Club Hub for a wide range of resources
and practical advice to help you get ahead in our qualification.

Register today for access to:

• live and on-demand webinars by our staff and members
• ACCA student profiles with tips and advice for exams
• past exam papers, study guides, retake guides
and other downloads

• information on and contact details of available tuition providers

• planning and booking your exams

Join today:
accaglobal.online-event.co/registration/acca-headstart-job-fair

14 PQ Magazine June 2018


Practical experience
essential to qualify
You can’t become an ACCA member just by sitting classes, says Linda Calder
W
hile you are working so hard
to pass the ACCA exams it is
difficult to think ahead to the
next stage. But exam success is just one
of the many milestones on the road to
achieving the ultimate goal of being a
finance professional. This is particularly
the case if you want ACCA or FCCA after
your name.
What is important for trainees to know
is that it is never too early to think about
their journey to becoming a fully-fledged
ACCA member. Trainees – students and
affiliates alike – will have to check off the
following three key steps in order to
become a fully qualified ACCA
professional. They are:
• Completing the ACCA exams.
• Completing the Ethics and Professional
Skills module.
• Finishing the practical experience
requirement (PER).
It is often the case ACCA students
complete their exams before achieving
their PER, but if they have been working
they may have already undertaken PER
without even realising.
What is PER?
So what is PER and why is it so
important? Passing the ACCA exams is a
huge achievement, but membership is
the final destination – it shows employers
you have completed all the necessary
components of the qualification. This
ultimately benefits your professional
growth and career potential by proving to
employers you can apply all the technical
knowledge you’ve acquired through exam
preparation in the workplace.’
ACCA’s practical experience
requirement enables trainees to develop
professional knowledge, values and
behaviours first-hand – vital to becoming
a professional accountant.
Employers also expect ACCA members
to show high levels of knowledge and
ability in the workplace, and to behave
PQ Magazine June 2018
ethically and PER enables students to
achieve this.
PER and its three components
There are three components to PER,
which are:
• Achieving the five Essentials and four
Technical performance objectives by
gaining the experience required to
achieve the necessary elements and
complete a statement for each
performance objective, which are signed
off by your practical experience
supervisor.
• Completing 36 months’ experience in
one or more accounting or finance-
related role, which is verified by a
practical experience supervisor.
• Regularly recording the PER journey in
the easy to use online My Experience
tool, which can be accessed via
myACCA.
A practical experience supervisor
supports and reviews trainees’
development and progress in the
workplace. It is a student’s responsibility
to find one. A supervisor must be a
qualified accountant, recognised by law
in their respective country or should be a
member of the body International
Federation of Accountants in order to
sign off a student’s progress report.
If a line manager is not qualified, a
ACCA PER PQ
student should ask another manager, a
consultant, or the organisation’s external
accountants or auditors to work with their
line manager to sign off their objectives.
Five ways to top it up
The following tips can help a student
make real progress with their PER and in
turn realise their ambition of ACCA
membership.
1. Secondments: these are a great way of
varying a trainee’s work experience.
Members of staff can transfer to other
posts or teams for a fixed amount of time.
This can be an excellent opportunity to
gain a different aspect of responsibility.
2. Project work: it is generally a good idea
for trainees to volunteer for project work
as it could lead to opportunities not
considered previously when originally
putting together their performance
objectives.
3. Shadowing: this can give a student
invaluable new insight. It involves
observing work practices of a more
experienced colleague. Students can
learn by listening to and observing fellow
employees, and many people respond
better to questions being asked to better
demonstrate their own specialist skills.
4. Job rotation: this involves swapping
roles temporarily with a colleague. After
receiving clear instructions, a job rotation
can allow trainees to perform new tasks
autonomously. People who have
undertaken rotations often develop fresh
ideas and feel a new enthusiasm when
they resume their original role.
5. Thinking creatively: this can help
students gain more practical experience.
It often pays to think creatively and be
proactive with a practical experience
supervisor and colleagues.
And remember…
ACCA’s PER policy is flexible, so if you’re
moving to a non-accounting role for a
while or taking a career break, don’t
worry!
Just remember to record and get
signed off all your progress to date. This
means when you’re ready to continue
with your PER you can carry on from
where you left off without having to go
back to past employers to get your
experience verified. PQ
• Linda Calder is ACCA’s professional
development manager
15
PQ ACCA exam tips
The June exams are
coming! Here’s some top
tips from top tutors…
BPP .
P1
Check out all new published
articles. Recent exams have tested
content from the examiner’s
technical articles, as with March
2018 and the transaction cost
theory. Expect to see:
• Use of stakeholder, ethical and
other CRS theories applied to
scenarios.
• Use of risk, control and
governance syllabus content,
especially relating to board
directors, remuneration and
reporting.
• Focus your past-paper practice on
dysfunctional behaviour in areas
such as bribery and corruption,
environmental risk or poor ethical
stance.
P2
Section A
• This will be a 50-mark case study,
including the preparation of a group
statement of financial position,
statement of profit of loss and other
comprehensive income or
statement of cash flows, which may
include discounted activities,
disposals and/or acquisitions or
foreign subsidiary. Expect other
accounting complications, such as
group adjustments, financial
instruments, pensions, share-based
payments and impairments.
• Discursive requirements on a
linked accounting adjustment, and
social/ethical/moral aspects of
corporate reporting.
Section B
• Could see fair value measurement
(see examiner’s article), revenue
recognition (article), deferred tax,
foreign currency transactions,
financial instruments, pensions,
share-based payment, non-current
assets (recognition and/or
impairment of tangible and
intangible assets), borrowing costs,
nature of business combinations,
the effect of accounting treatments
on earnings per share or ratios.
• Other question could be industry-
based testing range of standards –
accounting policies and framework,
leases, grants, IFRS for SMEs,
reorganisations, provisions, events
after the reporting periods and
related parties.
• Q4 looking at current
developments in corporate reporting
and problems with existing
standards. Think foreign exchange
(article), measurement and revision
of the conceptual framework
(article), classification in profit or
16
loss vs OCI (article), leasing, equity
accounting, integrated reporting
(article), performance
measurement, regulatory issues
over adoption and consistent
application of IFRSs.
• One of these questions could also
include elements of group
accounting, especially if Q1 is a
statement of cash flows.
P4
Q1
• Think core areas of the syllabus
here. So that’s project appraisal
(domestic or overseas), business
valuations and business/financial
reorganisations.
• These areas often include cost of
capital calculations.
• Risk management could feature in
a number of ways – value at risk,
real options, hedging and risk
mapping.
Q2-4
• Risk management (currency or
interest rate).
• Dividend policy and general
financing issues.
• Real options.
P5
Q1
• In recent exams this question has
often required a significant level of
data analysis using numerical
techniques such as KPIs, EVA.
• You need to have mastered the
numerical techniques such as
transfer pricing, ratios, analysis of
quality related cost, and ABC. But
remember the examiner wants the
data turned into information not a
lot of complicated numbers!
• Performance management
frameworks – building blocks,
performance pyramid or the
balanced scorecard.
Q2-4
• Quality management, information
reporting (CSF and KPIs), the
application of strategic models
(PEST, Porter’s 5 forces, the value
chain), HR frameworks (reward and
appraisal systems), risk
management and environmental
management accounting.
• Check out the recent articles on
complex business structures, big
data, integrated reporting and
performance management models
(BCG and 5 forces).
P6
Section A
• One of these questions will focus
on personal tax issues and the other
on corporate tax.
Section B
Expect to see quite a lot, including:
• Groups of companies involving
overseas aspects and losses.
• Unincorporated business
particularly loss relief or involving
partnership, basis period rules
should also be expected.
• Capital gains tax vs IHT, including
available reliefs.
• Overseas aspects of income tax,
capital gains tax, IHT or corporation
tax.
• Personal service company.
• Share schemes.
• Company purchase of own shares
or liquidations.
• Enterprise investment
schemes/seed EIS/venture capital
trusts.
• Takeovers.
• VAT – partial exemption or land
and buildings or transfer of a going
concern or overseas transactions.
• Transfer of trade vs sale of
subsidiary.
• Disincorporation relief.
• Pension contributions.
• Patent box, research and
development expenditure.
P7
Section A
• Typically, Q1 will test planning,
risk assessment, evidence gathering
and professional issues where
details of an audit client (remember
it could be a group) are presented,
often with financial statements
extracts for analysis.
• Topics covered by Q2 will be more
uncertain – possibly a non-audit
engagement, such as prospective
financial information (PFI) or due
diligence, or a Q testing quality
control.
• Don’t forget the professional
marks here.
Section B
• Expect the following syllabus
areas to be tested: audit evidence
and financial reporting issues,
practice management, including
ethics and reporting (completion
and communication).
• Recent exams have tested fresh
content. For example, the
evaluation of misstatements was
examined in December 2017. You
must read the three most recent
articles covering ethics, risk and
accounting issues.
FME Learn Online .
P1
Do not underestimate P1.
• Read the technical articles –
they’ve come up in the last few
papers.
P1 is smaller syllabus, but if I had
to I would focus on…
• Types of board, leaving, joining –
senior roles.
• Rules v principles – and code
application.
• Mandatory and voluntary
disclosure.
• Evaluate control systems.
• Internal controls and financial
reporting.
• Information for good control.
• Strategic/operational risks.
• External risk reporting.
• ALARP and risk perception.
• Risk manager, risk awareness and
TARA.
• Ethical theories – application.
• Public interest.
• Integrated reporting.
To pass:
• Answer the question asked!
• Focus on the verb – if it says
‘evaluate’ then evaluate! Don’t
discuss, explain, assess….
• Plan your answer before you write
anything.
• It’s never “tell me everything you
know about…?”
• Do not provide generic textbook
answers – are your points relevant
PQ Magazine June 2018

to the scenario?
• Don’t feel you have to write lots –
write to the marks available.
• Good layout and use headings.
• Manage your time… ruthlessly.
P3
• Do not simply learn lists of
models.
• To prepare, read the technical
articles and be able to calculate
ratios.
PQ Magazine June 2018
P3 is a large syllabus – so if you
have to focus on…
• Macro and competitive
environments – all models.
• Strategic capability and
organisational knowledge.
• International diversification.
• Strategy clock, generic strategies
and SFA.
• Organisational structure –
boundary-less and Mintzberg.
• Big data.
• Leadership styles.
• Emergent strategies.
• Buying generic vs bespoke
software.
• IT controls and all of e-business.
• Managing and controlling
projects.
• Strategic finance options.
To pass:
• Do not spend too long on Q1.
ACCA exam tips PQ
• The model itself is never the
answer.
• Justify your points.
• If you’re given data, use it – but
don’t get bogged down in the
calculations.
• Read March 18 post-exam guide.
• Imagine the marker is your boss
and has asked you for the question
requirements…
Continued on page 18
17
PQ ACCA exam tips

Top tips management, transfer pricing,

planning and operational variances,
and learning curves.
P5
HEALTH
WARNING
calculations.
Section C – two constructive
response questions. My educated
guess are:
Continued from page 17
Although the March 18 exam • Working capital management –
• Remember, quantity is not tested CSFs and KPIs, this is a key inventory, receivables and cash.
necessarily quality. area of the P5 syllabus, and so is • Investment appraisal – possibly
F5 likely to be examined again. including the asset replacement
• Section A objective test questions Applying any of the performance decision.
in the exam generally cover the full management models to the • Take care great care with the
syllabus. question-scenario i.e. balanced theory/written answers. They can
• Likely topics to feature in the scorecard, performance pyramid carry up to 10 marks and in the
section B objective test case and/or the building blocks model is These tips should past students have under-
questions could include mix and a strong possibility. There are only be used in conjunction performed on this style of question.
yield variances, budgeting, relevant plenty of past exam questions to with proper study. We cannot • Make sure you are comfortable
cost decision-making and practice on these models. Risk and guarantee that these topics with the ACCA software tools.
throughput accounting. uncertainty techniques and will appear in the actual P4
• The section C constructed corporate failure models are likely exam as we have not seen Expect the paper to cover the FIVE
response questions must be candidates, too. the exam papers. Examiners core topics:
practised on the ACCA website F9 are not predictable so it is • Cost of capital, long-term finance
using the software tools. These Section A will be the usual mix of vital that all core syllabus and dividend policy.
questions will be a mix of objective test questions covering areas are revised fully. • Advanced investment appraisal.
calculations and discussion the ENTIRE syllabus. Pay particular • Option pricing (BSOP).
questions on performance attention to the theory/‘wordy’ questions, as they need careful • Risk management.
reading. Also double check your • Business valuations and
ACCA Webinars calculations. corporate reconstructions.
There is a ton of great stuff on the ACCA website to help.
Section B’s case study-based Don’t forget to use our ‘football
Check out the revision session webinars for P1 and P3, run by Dr
objective test questions are likely to formation’ exam timing approach as
Dino Kiritsis, the founder of StudySmart.
cover: previously published in PQ
The P1 webinar runs over two days, on Thursday 24 May and
• Cost of capital and finance. (September 2017, page 33). PQ
Friday 25 May, and the P3 on Tuesday 29 May and Wednesday 30
• Risk management.
May. They both start at 12 noon British Summer Time. And GO TO THE PQ WEBSITE
• Ratios and valuation.
remember, if you can’t make the live sessions you can register and There are lots of tips for the ‘F’
Once gain, pay particular
attend on-demand at any time – just follow the live link. papers on our website. Go to
attention to the theory/‘wordy’
For a full listing go to http://accastudent.newsweaver.co.uk www.pqmagazine.com
questions and double check your

18 PQ Magazine June 2018

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PQ objective tests
Make the right choice
Tutor Tom Bulman explains
how best to tackle OT exam
questions, now the heart of
the ACCA exams
What is objective testing?
Objective testing (OT) is a method of
examination in which the answer is right
or wrong. It’s fact rather than opinion.
Consider this question:
What is a receivable?
A: money owed to you
B: money you owe to someone else
The answer is A. Marking is a simple
process, free from ambiguity, i.e. it’s
‘objective’.
Compare this to questions such as
‘describe a fixed asset’ or ‘calculate the
materials price variance’. Here the
marker must make a judgement about
how many marks to award a student,
based on the quality of their answer
compared to the marking guide and
model answer.
How objective testing is used
The ACCA has introduced objective
testing into all the ‘F’ papers. Students
often talk about ‘multiple choice’
questions in the exam and, while these
are a form of objective testing, there are
seven different types:
• Multiple choice: choose one option
from a choice of various answers (usually
three or four).
• Multiple response: choose more than
one option from a choice of various
answers (usually three or four).
• Fill in the blank: fill in a box, usually
with numbers but it could be text.
• Drag and drop: dragging an answer
and dropping it into the right part of a
response area.
• Drop down list: selecting the correct
entry from a drop-down menu.
• Hot spot: selecting a specific point on
an image as your answer.
• Hot area: selecting one or more areas
on an image as your answer.
Objective test questions can appear as
separate, individual questions, referred to
by the ACCA as ‘Objective Test (OT)
Questions’, or as a series of questions
based on a single scenario, referred to as
‘Objective Test Case Questions’.
Top tips for passing OT questions
A generally held view is that multiple
choice questions are easier than written
questions, but many students – and
tutors – would disagree! By using OTs,
the exam covers a greater breadth of the
syllabus and, unlike written questions,
there are no marks for workings! As good
20
OT technique can mean the difference
between a pass and a fail, here are my
top 10 tips:
1. Study the whole syllabus: Two to
three months before the exam put
together a study plan and stick to it. Aim
for 6-10 hours per week (on average),
but spread it out.
2. Practise questions: Do as many exam
standard OT questions as possible, so
you know what to expect in the exam
room. Remember, in OT cases there are
no dependencies between the individual
questions, so don’t worry if you get the
first question wrong, you can still score
on the other four. Also, with drag and
drop questions, not all answers need to
be used, so don’t waste time trying to
allocate the ‘spares’.
3. Practise using the ACCA computer
based exam (CBE) software: Make sure
you are comfortable with the
functionality, such as the navigation
menu and the scratch pad. With hot spot
questions, be as accurate as you can
when clicking on the image. They are set
so that as long as part of the X is
touching the line representing the correct
answer, it scores. If it is also touching
another possible answer, it won’t. Read
instructions thoroughly, regarding entry of
decimal places, minus signs, and so on.
Any unit of measurement will sit outside
the box and if there are specific rounding
requirements these will be displayed.
4. Do your best questions first: You
don’t have to do them in order, so ‘flag’
any questions that you are not
comfortable with and focus on those
questions that you feel more confident
about. Remember to return to the ones
that you’ve skipped before you finish the
exam.
5. Read the question: This is very hard
to do but crucial to success! Take your
time and be careful that you answer the
question set. Make sure you have
entered the correct number of responses
as dictated by the question.
6. Re-phrase difficult questions: For
example, ‘which of the following is NOT a
disadvantage can be rephrased as ‘which
of the following is an advantage…’.
7. Do rough workings on scrap paper:
Don’t worry about being neat, but do
label workings with the question number
so you can check them again later if
necessary. If you can’t get an answer,
check the question, check your workings,
have another go – but don’t get bogged
down.
8. Hedge your bets: When looking at
written questions I normally divide the
answers into three categories: correct,
incorrect and ‘not sure’. Take the
following example:
The following statements relate to the
participation of junior managers in setting
budgets:
1. It speeds up the setting of budgets.
2. It increases the motivation of junior
managers.
3. It reduces the level of budget padding.
Which of the above statements are
TRUE?
A. 1, 2 and 3
B. 2 only
C. 2 and 3 only
D. 1 only
I might feel certain that statement 1 is
false and that statement 2 is true. I’m
uncertain about statement 3. Looking at
the answers, I can eliminate options A
and D. I am guessing from two options
instead of four (the answer is B).
9. Answer every question: There is no
negative marking in ACCA exams so
wrong answers don’t reduce your mark.
At the end of the exam, have a guess for
any questions you have flagged to revisit.
Note that multiple response questions
might be marked as complete, even if
you haven’t entered the right number of
answers.
10. Keep track of time: Time
management is critical to exam success.
Make sure you leave enough time for
every part of the exam. Not all OT
questions take the same time to complete
so manage your time within a section
rather than per OT question.
Objective testing accounts for a
significant proportion of the marks in all
‘F’ level ACCA exams and good exam
technique can make all the difference. Of
course, in written ‘constructed response’
questions, exam technique can make all
the difference as well!
But you’ll have to wait for the next
instalment of our exam technique series
to find out about that! PQ
• Tom Bulman is an ACCA tutor at
AVADO Learning
PQ Magazine June 2018
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PQ CIMA spotlight

Be prepared for
exam stress
Jackie Durham explains why you should follow the example of the scouts

A
nyone who has been a boy or girl scout
in their youth – and many others who
have not – will know the motto: ‘Be
prepared’. For scouts, the aim of the motto is to
ensure that they are always physically and
mentally ready to do their duty.
Sitting your CIMA exams is not exactly a duty.
Nevertheless, it is a responsibility and one that
ultimately only you can deliver on. There is truth
in the Benjamin Franklin quote: “By failing to
prepare, you are preparing to fail.” On the
upside, however, being prepared is the single
easiest way to relieve your exam stress and
improve your chances of passing.
I have written many articles on how students
can avoid exam stress by using techniques such
as breathing, mindfulness and being an
‘organised learner’. I also believe that most exam
stress can be overcome through thorough pre-
exam preparation. The content of the exam is
always going to be a surprise, and may include
questions that throw you even if you are primed,
but knowing that you have prepared fully will
mean that you enter the exam room feeling
calm, positive and confident of a good outcome.
Recently, I was working with two small groups
of students who were preparing for their case
study exams (Operational Case Study and
Gateway). They had all had previously failed at
least once. I encouraged them to look at where
they may have gone wrong in previous attempts
by using a SWOT (strengths, weaknesses,
opportunities and threats) analysis. Here is an
example of a SWOT analysis for the Gateway
case study. Templates for all levels of the case
study can be found on CIMAconnect.
Some students had already considered where
they had gone wrong prior to undertaking the
SWOT analysis. For others, reflecting on past
performance using the SWOT was a real eye
opener and a number of students identified
some fundamental gaps in their preparation.
Once they understood some of the reasons why
they were failing, and developed strategies to
address them, they had a sound basis on which
to recommence their studies.
Next I put together a weekly planner for the
five to six weeks leading up to the exam. The
planner identified activities for each week and
flagged up useful resources, as well as any
events run by CIMA to support those activities.
These might be webinars analysing the pre-seen
material or ‘ask a tutor’ sessions. Students could
customise the basic plan depending on the
priority areas that they had identified in their
SWOT analysis, their personal study preferences
and their time constraints.
After the exam, I contacted the students who
had worked with me on the support programme
to ask whether they had (among other things):
• Felt more confident about sitting this exam
compared with the previous attempt(s).
• Felt that they were better prepared and that
the exam went better than with previous
attempts.
Almost without exception, the answer to both
questions was ‘yes’. Structured planning and
preparation did increase confidence and reduce
pre-exam stress. Furthermore, when the results
came out, there was a further reduction in stress
since the results were good. Everyone in both
groups increased their marks and many passed
the exam. PQ
• Jackie Durham, education and training
consultant, CIMA

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Why reports matter
Mark Clatworthy poses the
question: who actually uses
financial reports?
I
n the April edition of PQ, Philip
Dunn offered an explanation of the
importance of financial statements
and who they are of most use to
(‘Keeping it real’). In this article, he
identified the major user groups of
financial reports as:
• Potential investors/shareholders.
• Employees.
• Lenders.
• Suppliers.
• Other trade creditors.
• Customers.
• Government.
• The public.
This classification relies on the UK
GAAP Statement of Principles and the
2015 IASB Conceptual Framework for
Financial Reporting. The article notes
that the IASB Framework identifies
potential and existing investors, lenders
and other creditors as primary financial
statement users.
An interesting and important question
though is who actually uses financial
reports? Also, for what purposes are they
used? To address these questions, ICAS
and EFRAG commissioned an academic
literature review entitled ‘The use of
information by capital providers’. The
report is freely available on both ICAS
and EFRAG websites.
Intensive users
The literature review focuses deliberately
on capital providers, not on government,
the public or customers. Investors are
undoubtedly the primary users – not just
from the point of view of the designers of
financial statements (standard setters),
but also as the most intensive users in
practice.
Although the public and customers are
notionally users, you should ask yourself
the following question: when did any of
your many (non-accountant) friends and
relatives last read a company’s annual
report? Even the government will rely to a
limited degree on individual firms’
financial statements for tax purposes or
for economic modelling – and even when
they do this, they then make extensive
adjustments. Furthermore, suppliers and
trade creditors typically rely on financial
statements indirectly (e.g. through credit
rating agencies) rather than directly via
annual reports.
Some interesting findings emerge from
the academic literature on who uses
financial reports and how they are used.
PQ Magazine June 2018
First, despite many claims that
accounting information is backward
looking and lacks timeliness, many
capital providers find financial statements
useful for various decisions. For example,
important outputs of the accounting
system, such as earnings, form the basis
of valuation estimates. Consider how
widely used the price/earnings ratio is. It
is easy to forget the properties of
accounting information that contribute to
this usefulness. The literature review
concludes that financial statements ‘are
unique in being regulated, recurring,
standardised and independently verified
and thus enhance the utility of other
sources of information’.
The latter point is often overlooked:
many other sources of information about
company performance rely on
accounting information for their
usefulness. Take the case of a
management forecast of future
performance. It is of much less use
without a verified outcome, such as
audited earnings per share. Hence, even
though the forecast is forward looking,
having a historical verified outcome is still
useful for ex post assessment of how
accurate the forecast was, despite being
backward looking.
Second, financial reporting information
is useful in capital markets for
financial statements PQ
stewardship and contracting purposes.
This is a very important role for financial
statements that is often not as fully
discussed by standard setters as it is by
academics. Note, however, that in its
recently issued update of the Conceptual
Framework for Financial Reporting
(March 2018), the IASB acknowledges
that investors’ expectations about future
returns does depend on their
assessments of future cash flows and on
their assessments of management’s
stewardship of the entity’s economic
resources.
The ICAS/EFRAG report reveals that
the academic literature generally
recognises that the different roles for
financial reporting sometimes emphasise
different information properties. For
example, for stewardship and managerial
assessment purposes, investors are likely
to be more concerned about whether
changes in firm performance are
attributable to management actions.
Reliability of the information
Moreover, when accounting data is used
in contracts, such as in executive
compensation (e.g. where bonuses are
tied to earnings per share) or in lending
agreements (e.g. forming the basis for
financial covenants), it is likely that
investors prioritise the reliability of the
information. This is because of preparers’
incentives to supply information that
maximises their own welfare, rather than
to faithfully represent the financial
position and performance of the firm.
The academic literature attributes
many of the important characteristics of
financial statements, such as verifiability,
prudence and the fact that they are
audited, to this stewardship or
contracting role. It also illustrates that the
ability of financial statements to meet all
users’ needs is limited.
Impairments of financial assets are
forward looking and useful for firm
valuation purposes, but as the
Parliamentary enquiry into Carillion is
currently revealing, they are also
extremely difficult to verify. This makes
judging managers responsibility for the
firm’s failure difficult. On the positive
side, however, it is reassuring that despite
its limitations, accounting information has
unique strengths that make it more
valuable than most other sources of
information. PQ
• Mark Clatworthy is Professor of
Accounting at the University of Bristol.
He is a co-author of the ICAS/EFRAG
report ‘The use of Information by
capital providers’, which is available for
free on the ICAS and EFRAG websites
23
PQ ACCA P4
A technique tester
O
ne area that students always
struggle with when they reach
investment appraisal in the P4
exam is which technique they should
use. At this level we will not be asked
specifically to perform a named
technique such as Net Present Value
(NPV) instead the requirement will ask us
to “evaluate the financial acceptability of
the investment”.
The starting point in a question like this
is to prepare a schedule of the free cash
flows. Read the scenario carefully, pick
out each of the cash flows one at a time,
ensure you account for tax, inflation and
think carefully about the timing of these
cash flows. Furthermore, the forecasting
of free cash flows is the starting point for
many business valuation questions, so
being able to do this accurately will stand
you in a good position for the P4 exam.
Once we have the free cash flows we
then need to consider two types of risk,
business risk and financial risk. We need
to ask ourselves has the business risk
changed, is the company undertaking a
project in a new business area that is
different to its core operations?
For example, if a supermarket decides
to launch an airline this would be a
change of business risk. Following this
we need to consider whether the capital
structure of the business has changed,
has new finance been raised in relation to
the project such as a rights issue or
redeemable debt? If so, this is a change
in the financial risk. Once we know the
answer to these questions we will then
know the correct technique to apply. The
table below shows a summary of which
technique is to be used:
Constant
Constant Discount using Weighed Average
Cost of Capital (WACC)
Financial Risk
Change Adjusted Present Value (APV)
24
Passing P4
Investment
Appraisal is
all about
choosing
the right
technique,
says Karl
Ballard
If both risks are constant we can use
our existing WACC to discount the free
cash flows, by far the most straight
forward method of investment appraisal.
If the business risk has changed but
the capital structure remains the same
we need to calculate a risk adjusted
WACC. This will usually involve identifying
a company that operates in the same
business area as our new project; we
would call this company a proxy
company. We will need to take this
company’s equity beta (βe), de-gear
(remove the impact of the proxy
company’s financing), then re-gear
(apply our company’s financial structure).
We do this by using the formula for the
βe from the formula sheet, and also we
assume that the debt beta is zero. Once
we have the βe we then use this
alongside the risk free rate and the
average market return in the Capital
Asset Pricing Model (CAPM) formula to
calculate the cost of equity (ke). The final
step is to recalculate the WACC using the
ke and cost of debt
Business Risk and their respective
market values. So in
Change summary:
1. De-gear
Discount using risk 2. Re-gear
adjusted WACC 3. CAPM It
4. WACC It
and apply this risk
adjusted WACC to
APV discount the free
cash-flows.
If the financial risk has changed, even
if the business risk has remained
constant, we must apply APV. The
technique involves two steps, firstly
calculate the base case NPV and then
add to it the present value of the
financing side effects. The base case
NPV starts with the free cash-flows which
are then discounted at the ke for an
ungeared company. To calculate the ke
we again look to a proxy company, de-
gear its βe and then use the asset beta in
the CAPM. We do not re-gear the beta;
this is a common mistake that many
students make. The financing side
effects include issue costs of debt and
equity, tax relief on interest payments
and post-tax interest savings on
subsidised loans. For all of these side
effects we must calculate their present
value using the risk free rate. Once we
have both the base case NPV and the
present value of the financing side
effects, we add these together to
calculate the APV.
So if you meet an investment appraisal
question in the exam remember to take
the following approach:
1. Forecast the free cash-flows
2. Consider whether the business risk
has changed?
3. Has the financial risk changed?
4. Choose appropriate technique! PQ
• Karl Ballard is a tutor at Kaplan
Financial
PQ Magazine June 2018
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PQ CIPFA case study
Preparing for the SCS
T
he SCS exam acts as a ‘capstone’
subject, which can test any element of
the CIPFA professional qualification,
including the other strategic level exam
(Strategic Public Finance). The SCS exam is
fundamentally different to any of the other CIPFA
exams:
• There can be two or three questions, unlike
the other papers which have a set number.
• No single question can be worth more than
70% of the marks and must be at least 20% of
the marks.
• Each question will typically be made up of
between five and 10 components. Unlike
CIPFA’s earlier exams, no breakdown of marks
for this is given as the exam looks to test how
you will make judgements as to which parts are
more important.
The emphasis of the exam is evaluation and
professional judgement (EPJ). Between 75%
and 85% of the available marks are EPJ marks.
Students often struggle with this element, as
there is a tendency to repeat information from
the case – without providing any actual
evaluation. Instead of simply stating a fact like
“the net budget after adjustments will now be
£5,000k”, you need to explain the impact of
this. For example, “and this means that the
savings target is marginally met”.
The other 15% to 25% of the marks are
available for technical analysis (TA) and these
marks are based on the manipulation of
financial and other information, often using a
technique covered in an earlier module.
On the face of it, this would appear to be
rather a tall order. However, the SCS exam is
centred on advance material (AM) that students
have access to four weeks prior to the actual
exam. It covers some of the key information
students need to in order to answer the
questions.
Having the AM for four weeks allows students
to become very familiar with the case scenario
and the role they are playing in the examination.
This is usually a finance role that a newly
qualified accountant may have.
Students receive additional material on the
day, known as the exam day material (EDM).
This will be smaller than the AM and will
referenced to the individual questions, although
there may be some shared additional material.
The scenario is usually based in a country
with certain similarities to the UK and detailed
knowledge of a particular sector will not
advantage an individual student.
Tips for the exam
Familiarity with the AM is essential. Everyone
has their own preferred approach, but one
approach is to consider:
• The national (macro level) position. Ultimately,
all of your answers and most importantly your
recommendations will be in this overall context.
If money is tight then proposing a huge
spending programme (however desirable) might
not be realistic. Think about which party is
26
Ian Chafer explains how you can best gear
up for the CIPFA Strategic Case Study (SCS)
currently in power, what they believe in, and how
long will be it be until the next election.
• The local (micro level) position. What is
happening within our organisation? Who are the
key players, how long have they been in post
and are they new to the sector? If based on a
local authority, does local political control match
the national position?
• The SCS exam invariably involves a lot of
acronyms – make a list of these, know who they
are and how they link together. On exam day
you do not want to have to remind yourself what
these mean.
• Think about the deadlines/dates. These are
often very tight and can potentially be unrealistic
and your role in the exam may be at act as a
‘critical friend’ to challenge decisions.
Sometimes geography can be important – so
perhaps draw a map of how far places are apart
and the infrastructure.
• Do not try to question spot in detail, but try to
identify the main question themes. This will
place you in a strong position on the day,
regardless of whether the themes are
subsequently reflected in two or three questions.
• Think about the potential techniques that you
are likely to need to use from earlier modules.
These are often flagged up, so revise them.
• Make sure you are familiar with the key
individuals/bodies involved – you are likely to be
writing to these people/bodies. What level of
knowledge or expertise are they likely to have?
Your answer should reflect this.
During the exam read the EDM carefully – this
might take you around 30 minutes (you should
at this point not need to re-read the AM). Take a
couple of minutes to estimate the likely
weightings within each question to gauge the
time required to complete each part (you will not
get this spot on), but students who score highly
allocate their time well between and within
questions.
Read and follow the question requirement
carefully. ‘Briefly assess’ means fewer marks
than ‘critically evaluate’.
Look out for the ‘and’ word, if a question asks
you to do A and B then it wants you to do both.
Consider as well, the likely weighting between
the two components.
Remember the bad fail rule. You need to
score at least 25% in each question. The
question left to the end often suffers, especially
in three question exams.
Make a good attempt at the TA, but
remember that it will be worth circa 20% of the
available marks. Do not spend too much time on
this, if it is going nowhere – move on. Marks are
often available for the assumptions/caveats
behind the data supporting a decision, which
can be accessed whether you TA has been
completed or not.
Remember who you are, what your role is and
who you represent. Make sure that you use
professional language and do not get involved in
political decisions – your role will generally be
around implementation.
The final section often asks for conclusions
and recommendations. This should be a
straightforward section to complete, as it will be
based on your earlier analyses, so do not leave
this out. Remember that your recommendations
should reflect your conclusions. Do not be afraid
in your recommendations to say ‘no’ or ‘stop’,
and remember that these should be consistent
with the big picture (the overall context for the
decision).
The exam is four hours 30 minutes long so
have a hearty breakfast. If you have to travel
some distance to the exam centre it may well be
best to stay overnight close to the exam venue to
avoid any last-minute transport hiccups. Most
importantly, when the exam is over, try not to
dwell on it. Unlike other exams, where you can
sometimes guess at whether it went well enough
to pass or not, SCS is very hard to predict. PQ
• Ian Chafer is a Senior Trainer at CIPFA
PQ Magazine June 2018

From the page to the screen
ACA Advanced Level exams are
moving to computer. Here’s an
update of progress to date
A
s PQ magazine goes to press, over
20,000 ACA Professional Level exams
will have been taken on computer by
ICAEW students. All Professional Level exams
are now being taken in the new format, and
Advanced Level exams begin their migration
with Corporate Reporting and Strategic Business
Management this July.
With Case Study swiftly
following twelve months
later, it’s safe to say that
by July 2019 the paper-
based exam will be
relegated to the history
books alongside quills
and parchment, or the
dip pens and ledgers
the first ICAEW students
used to complete their
exams in 1892.
With subject pass-
rates comparable to
their paper-based equivalents, the results
suggest that, with the usual hard work and by
taking advantage of the resources offered by
ICAEW in preparation of the exam, the success
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of students hasn’t been altered by embracing a
format more representative of the working life of
PQs across the globe.
Amongst those offered on icaew.com, the top
ranking resources in a recent survey included
the exam-specific guidance webinars, the
sample question banks, and the Professional
and Advanced Level exam guide, which
illustrates the exam software and its functionality,
proving amongst the most useful for those
preparing for their exams.
Also, included within the exam guide are
answers to
students’ FAQs,
including these
helpful hints to
master the exam
software:
• Make sure you
use the practice
software, standard
keyboard shortcuts
are not supported
within the software.
• Show your
working-out within
the software.
• Remember to expand your cells – examiners
will only mark what they can see and will not
interrogate cells.
• If you insert a row or column, interrupting
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formula, you will need to reset your formula to
include the new cells.
• If you accidentally hit the ‘insert’ key on your
keyboard and write over your previous answer,
don’t worry. Copy your new text, hit the ‘undo’
button and then paste this to a new line.
Remember to hit the ‘insert’ key to take off the
insert function before typing again.
• Use sensible abbreviations in place of
currency symbols if they aren’t available,
for example, P or GBP = £, D or USD = $, or E
or EUR = €
• If you are easily distracted by noise, you can
use earplugs to help you concentrate in the
exam room.
• Remember, the exam is part of your
professional career, so present it as you would to
a report to a client.
With the exception of an ‘Exhibits’ button
added to the Corporate Reporting and Strategic
Business Management exams, the software will
remain the same for the Advanced Level as the
Professional Level. With this in mind, ICAEW
continue to recommend the 5-point checklist
approach which can be found at icaew.com/cbe
to prepare for a computer-based exam,
alongside your usual study to ensure success.
ACA students should visit icaew.com/cbe for
all the guidance, support and exam resources
you need for the Professional and Advanced
Level exams. PQ
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PQ Magazine June 2018 27

PQ ACCA Professional
The same – but different
T
he core ACCA Professional
exams are changing. The June
2018 sitting represents the last
outing for P1 Governance Risk and
Ethics, P2 Corporate Reporting and P3
Business Analysis. These three papers
will be replaced with two new papers in
the September 2018 sitting – Strategic
Business Reporting (SBR) and Strategic
Business Leader (SBL)
Tom Clendon of www.acowtancy.com on
SBR: The new SBR paper is almost the
same as the old P2, but there are some
crucial differences. Here are my top five:
1. No more preparation of group
accounts: Group accounts will still be
examined but not in the same way. The
question that students traditionally did
best in at P2 was the big 35-mark
number-cruncher at Q1 to prepare a set
of consolidated accounts. Well, under
SBR this type of question will just not be
set. Instead, there will be fewer marks for
groups and you will only be asked to
perform a couple of calculations, for
example goodwill, or profit on disposal.
However, you will also be required to
explain the calculations. The discussion
of the numbers will carry more marks
than the numbers. As a result it is going
to be so important to understand the
principles behind consolidation
adjustments as you will be writing about
them.
2. No more complex group structures:
In SBR, questions will not be set on
vertical group structures and the
consolidation of sub-subsidiaries. So no
more indirect holding adjustments!
3. A greater emphasis on ethics: In
SBR, we can expect up to 10 marks on
ethics in every exam. Ethics will be
examined in an applied way, in the
context of a case study against the back
drop of a number of different accounting
issues. Marks will not be awarded for the
repetition of the five pillars of the ethical
code (and never have been).
4. Additional performance measures:
This is an addition to the syllabus. You
will be expected to know why companies
produce measures such as EBITDA, free
cash flow and their own KPIs. This topic
Are you ready to go?
Are you exam-ready?
You need PQ-go.com
28
will be examined in every exam.
5. No more choice of questions: Every
question in the SBR will be compulsory.
After all, it can be argued that at work
you are given a choice of what work you
have to do!
Marty Windle, the founder of
www.accapass.com, on SBL: The new
SBL may look similar to P1 and P3 but
there are some important differences.
The five things you need to know about
ACCA’s new Strategic Business Planning
paper are:
1. Professional marks: In the old P1 and
P3 exam, there were four professional
marks. In the new SBL exam there will
be 20 marks allocated to professional
skills. Each question will highlight one
element of professional skills, so the
question will outline the technical content
required then include two marks for
demonstrating professional skills, such as
scepticism. So the exam will only have 80
marks for technical content and 20
marks for professional skils. If you are
going to pass the SBL you must have a
clear understanding of how these
professional marks can be obtained.
2. Reduced emphasis on models and
knowledge question: Those that have
studied P1 and P3 will be familiar with
the use of models and exam questions
being asked on a specific model such as
Porter’s 5 forces. These questions will no
longer be included in the exam and you
will no longer be asked questions asking
you to apply a model. In the pilot paper,
there were no models referenced in the
examiner's answer. In addition, there will
be no straight knowledge questions such
as define or explain the role of the
chairman.
3. No choice: In previous exams, there
was a section B in which the students
had some choice of optional questions.
This is no longer the case and the
students who sit the SBL exam will have
to answer all the questions on the paper.
4. Practical focus: The SBL exam has
adopted a more practical focus. The SBL
paper is a move away from the academic
style of the previous exams to a
workplace focus. The exam aims to
Two experts develop skills that can be used in the
workplace. When answering SBL
in the field questions, your answer should reflect
explain the something that you would prepare at
work, such as writing a report for a senior
changes to manager. Most questions will ask you to
the core take the role of organisational leader or
advisor to management.
ACCA exams
5. Reading time and exam length: The
length of the exam will be around 10-18
pages. The documents provided to
candidates can be in a number of
formats such as emails tables or
spreadsheets. In order to effectively
examine all this material the reading time
has been increased from 15 minutes to
one hour. PQ
PQ-Go
PQ Magazine June 2018

social media
ROUND-UP
We know how much you love your
spreadsheets, and our @pqmagazine
followers got tweeting when we started
a discussion about the problems at
Conviviality.
We had picked up the story about
Conviviality’s troubled wholesale
division; the company admitted that
human error and the complexity of
spreadsheets were to blame for a £5m
exaggeration of profits. Ryan Franklin
said: “The problem is in modern
business, they squeeze staff levels so
staff have to look for quicker ways to
do things. Automating a spreadsheet
is perfect for this, but people don’t do
the checks after. It’s about balance. It
will always be human error over a
spreadsheet.” Fiona McEwen simply
said: “Sounds familiar”. Graham
Elliot’s comment was: “Sense-check
good; spreadsheets bad.” And David
Lewis felt “the cost of an independent
review of business critical
#spreadsheets would be money well
spent”. Finally, Rebecca Pope said
“spreadsheet rages fo’sure here”.
Our ‘PQ awards 2018 – the movie’
was a real hit with everyone, too.
What’s not to like about a dance-off
between two accountants? It’s not
something you see every day! Vicky
Taylor was definitely the winner (sorry
David) and Lyndie Timms asked on
LinkedIn: “Can HTFT do online dance
classes too? Lol”. Well, over 1.6k
people have had a look, so thanks if
you were one. If not take a look at
https://www.facebook.com/pqmags/
videos/1779184072142498/
PQ went big on the ACCA March
results on social media, and put them
all over our website. Nidsyyy got in
touch to say: “Done and dusted with
the course. After a year and a half I
am an Affiliate. Thanks to PQ
magazine for the wonderful articles
and updates. Always found them
useful.” No,
thank you
Nidsyyy. We
also loved Lee
Moore’s
picture. He
told us: “Final
exam
passed…fully
qualified
Accountant!
Life changing!
Never give up
on your
dreams. Over the moon!” Great
balloons, Lee!
PQ Magazine June 2018
Life at Deutsche Bank
Harriet Baker, 24, has worked as an auditor for Deutsche Bank in London for three
years. She has a Classics degree from the University of Cambridge. She recently picked
up a brace of awards for coming first in two papers in the ICAEW exams
What time does your alarm
go off on a working day?
6.30am if I’m going to the gym or
7.15 otherwise.
What’s the first thing you do
when you get to your desk?
Chat with my colleagues.
What’s on your desk? Too
much! Notepads, lipsticks, sticky
notes, handcream, pens, mugs –
I’m usually a tidy person but my
desk is always crowded!
What’s the best thing about
where you work? The
autonomy I get given to run my
own parts of audits and the
support for my development from
my manager and the firm.
Where’s your favourite place
for lunch? Birley on London Wall
– they make my favourite salad.
What can you see when you
sit at your desk? A lovely view
of the river between Canary Wharf
and the Isle of Dogs.
Which websites are your
In brief
Top companies for women
All the Big 4 made it into
The Times’ ‘Top 50 employers for
women’ list. They joined the likes
of MI5, HMRC, Morgan Stanley,
BT and Royal Mail. KMPG said:
“In 2017, we launched our
Beliefs, Biases and Behaviours
workshops, achieved gender
targets in student recruitment
and kicked off our ‘empowering
parents’ to help those returning
from parental leave.” EY said it
was a #PressForProgress main
sponsor of International Women’s
Day, and Deloitte explained:
“Real change requires more than
initiatives. Our inclusive culture,
underpinned by respect, enables
The PQ Book Club: books you should read
The Little Book of Results by
Jamie Smart (Capstone, £9.99)
Do you ever feel that there’s so
much clutter in your mind that
you just can’t think straight? It
happens to all of us, of course,
but in this book the author
explains the steps you can take
to declutter, and thus improve
the quality of all aspects of your
life.
Using transformational
coaching techniques, examples,
favourites and why? The
usual – Instagram and Facebook,
although I don’t really spend that
much time on the internet.
Which websites do you use
for work? Just the DB network.
How many hours a week do
you spend in meetings? A lot
of our work is done in meetings so
probably 10-15 hours a week.
What time do you
leave the office?
6pm most days.
How do you
relax? I’m a big
extrovert so going
out with friends for
me is relaxing – I do
that about four times
a week! Other than that, I go to
the gym five times a week and
also read and spend time at home
with my family.
What’s your favourite tipple?
Red wine.
How often do you take work
all of our people to progress their
work and home commitments.
‘Eyewatering’ loan interest
Graduate discontent could
be on the rise after the
government waved through a rise
in their loan rate from September
to 6.3%. The retail price index
(RPI) stood at 3.3% in March (it
was 3.1% in March 2017), and
the loan rate is calculated as RPI
plus 3%. Concern over what the
students have called ‘eye-
watering’ borrowing rates had led
to speculation that ministers
might freeze the rate for the time
being. The 6.3% student loan
rate compares with a 3.8% rate
exercises and metaphors, the
author talks the reader through
the three key changes they need
to achieve the results they are
after and inspire others to do
the same. The reader will learn
how to think more clearly, make
better decisions and improve
performance – achieving the
‘flow’ state attributed to the
results of top-flight individuals.
Clearer thinking removes the
stress and anxiety from decision
careers PQ
home? Never – study dominates
my weekends, unfortunately.
What is your favourite TV
show? Silent Witness.
Summer or winter? Summer.
Pub or club? Club.
Who is your hero? Margaret
Anstee. She went to my school in
Essex, then to Cambridge and
became the first female Under-
Secretary General of the
UN. She spent her life
committed to social
development.
If you had a time
machine, where would
you go? Most likely to the
August and Julio-Claudian
Roman period to see if all
the scandalous stories are true.
If you hadn’t chosen
accountancy where might
you be right now? I would have
become a lawyer like my parents
and a lot of my friends, and would
be slaving away in a City law firm.
for an unsecured personal loan of
£50,000. The government points
to the decision to raise the
minimum repayment threshold
for student loans to £25,000,
which it says will save 600,000
graduates up to £360 a year.
Apprenticeship drop
A year on from the
introduction of the apprenticeship
levy figures show that there has
been a 31% decline in the take-
up of apprenticeships. In the six
months to January 2018,
206,100 people started training
schemes, compared with
269,600 in the same period the
previous year.
making and allows
you to focus on
your goals. Rather
than a step-by-step
process, the reader
is encouraged to form a deep
understanding of themselves to
awaken their inner potential and
improve their innate abilities
including better listening, more
motivation and greater
innovation and creativity.
PQ rating 4/5 A gem
29
PQ got a story, funny or serious, you want to share? Email graham@pqaccountant.com

WILD FOR KAKEIBO? There is a Japanese budgeting tradition

invented more than 100 years ago that is
proving a massive hit on social media –
Kakeibo. A simple translation is ‘budgeting
journal’, or ‘household account book’. It was
invented by Hani Motoko, Japan’s first woman
journalist. She saw Kakeibo as a way for
housewives to look after their finances,
documenting the difference spending categories and settings
saving goals. This is a system that avoids spreadsheets and
apps and is more about financial mindfulness. Some believe it
appeals to millennials who like the idea of writing a journal.
AI ‘COMMANDMENTS’
A new set of 10 ‘commandments’ to
govern artificial intelligence and protect
humankind has been issued by Church
of England Bishop, the Right Rev Steven
Croft. He wants the government and
technology companies to consider the
MARRED SYSTEM
Top journalist and TV presenter Andrew
Marr has joined the long list of
people who think our tax
system is too complex and
punishes honest people.
Writing in the Evening
Standard recently he said:
“Taxes should be three
things: unavoidable, fair
and dull.” He pointed out that
Hong Kong’s tax system is widely
admired and has a tax code that runs to
fewer than 300 pages. Britain’s, he

EXAM CHEATS IN SWEDEN ethical implications of advances in AI.

An exam invigilator was
among three people recently
arrested over an £830,000
exam scam to help students
cheat the Swedish university
entrance exam. In what was a
family affair, a father and his
two sons allegedly used
hidden earpieces to relay the
answer to hundreds of
students. Students could
choose between a perfect or
slightly less-than-perfect
grades to avoid suspicion.
Among his commandments are: “The
pointed out, runs to 17,000 pages. He
wants a radical clearing-out of the whole
primary purpose of AI should be to tax system. Good luck with that, Andy…
enhance and augment rather than
replace human labour and creativity.”
Another says: “Governments should
ensure that the best research and
application of AI is directed towards the
most urgent problems facing humanity.”

WHAT ARE YOU WEARING?

How would you like to be you lose? It’s one point for
judged by what you wear to loud socks, two points for
the exam hall? skirts above the knee.

NUMBER’S UP Apparently, that’s The real no-no is showing PASS THE just half a standard

CHOC
what happens to your bra or wearing boots size bar of 70%
Experts have worked out the most trainee barristers! For with the short skirt – cocoa chocolate.
expensive year in everyone’s life, and that their mock courtroom that’s a three point One study
is when you are 31. A wedding and assessments points deduction. We discover It is official: dark scanned the brains
honeymoon, buying a house and having are deducted for that at the University of chocolate, with its of people who had
a baby are the most likely events that having too much shirt the West of England high levels of eaten 48g of
help rack up the costs. According to the undone, short skirts for trainees lose two points for cocao, can chocolate after 30
survey, to cover all these costs will set women, and colourful socks unkempt hair and five points improve stress minutes and after
you back £43,000. for men! So, what points do for wearing trainers. levels, mood and two hours. It found
memory (I know, increased activity
TAX ON SUGARY DRINKS TO HIT PROFITS we have said this in the fast high-
The UK’s new sugar tax will hit Coca-Cola profits, the drinks maker has warned Wall Street. The tax, which before). A top frequency waves,
came into effect on 6 April, affects Coca-Cola Classic – its bestselling British drink. And it adds about 8p to team from the which are thought
an ordinary can of Coke. However, researchers now say that a tax on sugary snacks would be a more University of to improve
effective public health measure. Researchers from Cambridge and Oxford University estimate that a 10% California found memory. You don’t
rise in chocolate, confectionery, cakes and biscuits would reduce purchases by about 7%. It was pointed out that the benefits need any more
that sweet snacks provide twice as much sugar in diet as sugar-sweetened drinks. kick in after eating excuses…

’
WEV E GOT THE L OT
Art therapy Power of punctuation
We think you may need to doodle and colour your We gave Sunday Times best-selling author Caroline
stress away, so have three great Art Therapy Taggart’s book, The Accidental Apostrophe, a hefty four
colouring books to give away this month. We are out of five in our PQ Book Club review. The book will
constantly being told that creating beautiful art help clarify the rules about writing in English that do
can be a very positive and soothing experience. exist, and points out the options where the choice is
So if you have never given it a go, how do you yours. Taggart goes back to basic, we are talking full
know? Here’s a perfect chance to find out. stops, commas and even brackets here. It will also tell
Send your name and postal address to enter this you the difference between your colon and semicolon.
giveaway. Head up your email ‘Art Therapy’ and Send us your name and address to be entered for this lucky dip.
send to graham@pqaccountant.com. It really is Remember to head up your email ‘Accidental Apostrophe’ and send your
as easy as that. email to graham@pqaccountant.com
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 Friday 15 June. The main draw will take place on Monday 18 June 2018.

TO ENTER THESE GIVEAWAYS EMAIL GRAHAM@PQACCOUNTANT.COM

30 PQ Magazine June 2018
 THE DARK SIDE
OF ACCOUNTING:
ETHICAL DILEMMAS
AND SUSTAINABILITY
CHALLENGES
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