25 august 2010

youve got mail exam results advice making a difference wwf chinas meng lan fcca take your studies to a higher level

up in the air

4 CONTENTS
dispatch
06 GRAPHIC NEWS CFO career moves 08 JOBS NEWS Career updates from around the world 10 NEWS ROUNDUP Global accounting and finance news

features
20 YOUVE GOT MAIL Failing an ACCA exam isnt the end of the world even if it feels like it at the time. We talk to students who didnt get the results they were hoping for 24 MAKING A DIFFERENCE Meet WWF Chinas finance director Meng Lan FCCA 26 UP IN THE AIR Alex Miller checks in with the low-cost carriers

learning centre
14 3 THINGS Business and ethics 15 HOW TO Boost your brand 16 MY WORKING LIFE Mohamed Hassan Bangurai 17 STUDENT ENGAGE Ask the examiner special 18 PER SUPPORT

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Welcome to issue 17/2010 of STUDENT ACCOUNTANT

Please email studentaccountant@accaglobal.com with your feedback on this issue
Brendan Murtagh president Mark Gold deputy president Dean Westcott Vice president

technical
29 TECHNICAL ARTICLES CORPORATE REPORTING: CURRENT ISSUES Relevant to ACCA Qualification Paper P2 BUSINESS ANALYSIS SYLLABUS CHANGES Relevant to ACCA Qualification Paper P3 EXAMINERS APPROACH TO PAPER P4 Relevant to ACCA Qualification Paper P4 STUDENT ACCOUNTANT TECHNICAL ARTICLE ARCHIVE Visit www.accaglobal. com/students/ student_accountant/ archive/ All technical content is available at www. accaglobal.com/ students ADMINISTRATION www.accaglobal.com/ students/acca/ www.accaglobal.com/ students/cat/

Helen Brand chief executive editorial team Victoria Morgan editor Jamie Ambler editorial consultant Jackie Dollar art editor Richard Gooding designer Jane C Reid designer www.accaglobal.com Glen Patterson online editor 29 Lincolns Inn Fields London WC2A 3EE United Kingdom tel: +44 (0)20 7059 5700 email: info@accaglobal.com www.accaglobal.com publishing and adVertising Adam Williams head of publishing and commercial Anthony Kay production manager For all advertising-related matters please contact Lisa Peake: tel: +44 (0)20 7902 1224 email: lisa@educate-direct.com
Published by the Certified Accountants Educational Trust in cooperation with ACCA. The Council of ACCA and the publishers do not guarantee the accuracy of statements made by contributors or advertisers, or accept any responsibility for any statement which they may make in this publication. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without prior written permission of the publishers. CAET 2010 ISSN 1473-0979

resources
33 noticeboard ESSENTIAL INFORMATION ABOUT ACCA AND YOUR STUDIES ACCA Connect contact details, annual subscription and exam fees, exam timetables for December 2010 and June 2011, admin reviews and other important information

whats your story?

Why did you want to become an accountant, and what do you hope to be in the future? Email your story to us at studentaccountant@accaglobal.com

6 DISPATCH

GRAPHIC NEWS

37%

The DN idea A car of th that a eer e C ll CF In f act choice FO, ca Os w ant rri Th , 73 as Uni e rep % of one ed ou to be t, o or t res to b t fo C and Hap f 6 is b pon e c r E EOs py to. Afric 69 se ased dents elebr rnst & has b to s ww a. T nio tay on You een wa ated r w.e h in c y.co e top finan a surv nt to , not ng. In scotc urr rem jus h ent m par ce p ey, c pos ain t a it, re ed in Ab ro t of o t ig g the fessio nduct in a step t spond a sur er C gra nals ed b CFO o so ents vey, FO/ phi me y FD thin see t The c s in Eu the E role. role how rop g g heir con s ro e, th Chi rea o ef e les ter e M mist xec . I tha utiv t re iddle Entellig eo spo ast ence ffic nde , In er Hea d nts asp ia div d of isio bus ire tha in n

CFO CAR EER MO VES

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10% 6% 4%

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ef o per atio n

so Cha ffice irm r an No n dir -exec ect or utive

3% 1% 1%

Oth

er

2%

44%

38%

37% 27% 24% 24%

Manage a major project Work in another part of the company

Gain more experience in current role

Build trust with external stakeholders

HOW TO MAKE YOUR MARK

Build trust with internal stakeholders

15%

14%

14%

Gain global experience

The report says finance professionals hoping to make their next career step believe they need to make various moves to achieve their aims, especially gaining more experience in their current roles.

Work in emerging markets

Complete a qualification

Work in another firm in same industry

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8 dispatch
New skills will be needed by accountants to work in a tougher operating environment, according to a study published by Grant Thornton in the US. Expectations on accountants have risen, with growing pressure to understand constantly changing accounting standards and regulations, as well as tougher demands to improve the communication of financial data, understand risk management, and drive down costs. The study The evolving accounting talent profile suggests that it will prove increasingly difficult to recruit and retain the best accountants.

01 NEW SKILLS REQUIREd

Within the financial services industry, risk, compliance and product control candidate numbers have been declining since the end of last year, while demand for these skills and experience has increased. Tim Gilbert, managing director at Ambition, said, Businesses now demand more full and varied skill sets from candidates in order to maximise their value to the business. Any candidate that fits the bill is being snapped up and well-rewarded in order to retain them. This has left a very shallow talent pool. Were not expecting a

fall in the number of jobs available in London but even if job growth slows slightly, there wont be huge numbers of experienced candidates suddenly appearing on the market. This will leave businesses in a number of sectors fighting over talent. As a result, you can expect wage inflation particularly base salary inflation and more valuable counter-offers being made. Ambition says its already not uncommon for skilled candidates working for banks to enjoy generous increases of up to 15,000 on top of basic salary in order to keep them from leaving.

JOBS NEWS

02 SMEs PLAN HIRING dRIVE

EUROPEAN FINANCE TEAMS SET FOR SHAKE-UP

As global economies emerge from recession, nearly seven in 10 (68 percent) European employers now rely on their finance professionals to act as business partners instead of simply taking care of recording transactions and preparing accounts, according to a survey by recruiter Robert Half. Finance managers surveyed across 11 countries say the image and profile of todays ideal accountant have changed beyond recognition, reflecting their changing role. More than three in 10 (31 percent) say their accountants

About a quarter of small and medium-sized enterprises (SMEs) in Asia plan to recruit more staff in the next six months, according to a global survey of 6,346 interviewees by HSBC. Twenty-four per cent plan to recruit more staff and 39% plan to increase capital expenditure in the next six months. Globally, SMEs in Turkey, North America and the Middle East showed the strongest jump in confidence levels.

03 JOB GROWTH LEAVES LONdON WITH SKILL dROUGHT

According to Ambition Recruitment, there are currently 10 skilled accountancy and finance professionals for every nine vacancies in London, with the capital set to officially enter a candidate-short market by the end of the third quarter. And the agency warns employers to expect there to be 12 London vacancies for every 10 active and available finance candidates in London by the end of the year.

exert a stronger influence on business decisions than they did three years ago, while a similar proportion describing their accountants as company assets, not number-crunchers. The report also found that employers are stepping up training initiatives to help their existing accountants develop business-partner mindsets, with nearly six in 10 (56 percent) using internal training, three in 10 (33 percent) bringing in external trainers and 30 per cent turning to coaching. The role of accountants has undergone the greatest transformation in France, Switzerland, Ireland, Austria and Spain, with employers in Belgium and Italy perceiving the smallest changes. Nearly four in 10 (37 percent) European employers seek stronger IT skills in their accountants than they did five years ago, while more than three in 10 (32 per cent) want deeper regulatory knowledge and stronger analytical ability.

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10 dispatch
01 MAJor GrowTH ForeCAsT 04 nArrATIVe reporTInG

news roundup

Singapores economy is expected to grow as much as 15% in 2010 after record expansion in the second quarter. The city-states economy grew 18.1% compared with the same period last year, according to official data. In the second quarter, it posted growth of 19.3% year on year. Singapore increased its forecast this year to 13% to 15% from a projection of 7% to 9%, making it possibly the regions fastestgrowing economy, outstripping China and Indias growth.

02 AusTrALIA And nZ HArMonIse

The UK government has launched a consultation aimed at improving corporative narrative reporting. The consultation invites views on all options, non-regulatory and regulatory, to improve narrative reporting and will consider whether there is sufficient disclosure of directors pay. Business minister Edward Davey said: I want corporate narrative reporting to tell the companys story in a balanced and coherent way. It should give shareholders the information they need, so they can hold directors to account and be effective stewards for the business.

The Australian and New Zealand accounting boards have announced they are closer to achieving standards harmonisation, following the release of a batch of jointly agreed exposure drafts. These propose to eliminate many IFRS-related differences between the two countries and represent the first phase of a longer-term project to harmonise accounting requirements.

05 russIA reCoVers

InTeGrATed reporTInG

03 sA AudIT ConCerns

Thirty-six of South Africas 277 municipalities were not audited in 2008/9 because they failed to provide financial statements to the countrys auditor general, Terence Nombembe. The annual report by Nombembe recorded fruitless and wasteful spending by municipalities of R117m (10m), irregular spending of R2.3bn (201m) and losses of R5bn (437m) on municipality-provided services, including electricity and water. Municipalities spent over R200m (17m) to buy in accountancy support, as they did not have the expertise internally to prepare annual accounts.

Financial and sustainability reporting should be brought together using a clear and agreed framework, according to a powerful new body, the International Integrated Reporting Committee (IIRC). ACCA chief executive Helen Brand, a member of the steering committee, said: ACCA is passionate about ensuring the accountancy profession plays a key role in this vital area. We have long called for the need for a clear and consistent method for businesses to report on their impacts on society and the environment. The IIRC represents a considerable force for change. The project is led by the Global Reporting Initiative and the Prince of Wales Accounting for Sustainability Project.

Russias economy is recovering quickly, according to the latest ACCA global economic conditions survey, which includes the country for the first time. The report says that conditions in Russia are improving because of its limited size of sovereign debt, high commodity prices and liberalised financial policy. Three quarters of ACCA members who are Russian specialists believe that the economy either already is improving or is about to improve. But the report indicates that doubts persist about the global economy.

06 oFFICe oF TAX sIMpLIFICATIon

The UK Treasury has formed an Office of Tax Simplification, with former PricewaterhouseCoopers tax partner John Whiting appointed as tax director and former financial secretary to the Treasury Michael Jack as chairman. Whiting said: Ive long argued we need a simpler tax system in the UK, so Im delighted to be given the opportunity to take forward the governments commitment in that direction.

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12 dispatch
07 VAnTIs InTo AdMInIsTrATIon

news roundup

Listed accountancy firm Vantis has gone into administration, as a result of a severe cashflow crisis caused by its role as receiver of the Stanford Group. RSM Tenon and Begbies Traynor have acquired some parts of the firm, while Vantis partners have formed FRP Advisory and Evolution LLP to take over other operations. RSM Tenon paid 6.8m to acquire the main bulk of the accountancy operations, tax and business advice functions, and business restructuring services.

term. Professor Schilder initially took on the role in early 2009 and will continue to lead the IAASB in its work to set high-quality auditing and assurance standards and facilitate convergence to international standards. He said: I look forward to continuing the boards work to achieve global adoption of the clarified ISAs and to helping practitioners around the world successfully implement these high-quality international auditing standards.

10 ABu dHABI AudIT FAILure

08 ForMer KpMG MAn GuILTY

A former KPMG tax consultant has pleaded guilty to not filing a tax return for six years. John Venuti worked for KPMG in Maryland from 2002 until earlier this year and previously worked for the IRS. Venuti owed $790,000 in tax arrears. Sentencing was deferred, but he could be imprisoned for one year

09 sCHILder LeAds IAAsB AGAIn

Arnold Schilder has been reappointed by the board of IFAC to chair the International Auditing and Assurance Standards Board (IAASB) for a second three-year

Abu Dhabis Ministry of Finance has been accused of not auditing other ministries and publicly funded bodies and failing to prevent repeated violations of public spending rules. The comments were made by members of the Federal National Council (FNC). Obaid Humaid Al Tayer, minister of state for financial affairs, accepted that violations were being committed, but said these were of administrative procedure, not misappropriation. A report from an FNC committee warned that emirates other than Abu Dhabi and Dubai are not contributing to the federal budget. Abu Dhabi is expected to record a budget deficit this year of 84.9bn dirham.

Singapores new accounting rules could raise costs for some small and medium-sized enterprises (SMEs), according to ACCA Singapore country head Darryl Wee. He says that certain SMEs those on a strong growth trajectory, those preparing for public listing, or long-standing users of the full Singapore Financial Reporting Standard (SFRS) should think carefully about switching to the new SFRS for Small Entities, due to be applicable for accounting periods beginning on or after 1 January. Some firms may incur added costs as a result of having to revamp their own procedures for the new standard, retrain accountants, and then train them again, should the company switch to the full SFRS. Under the Accounting Standards Councils proposed criteria, qualifying SMEs will be allowed to choose the standard that they use.

11 sMes FACe HIGHer CosTs

12 AAdB InVesTIGATes e&Y

The Accountancy and Actuarial Discipline Board is investigating Ernst & Young over its audit of Lehman Brothers International Europe. The investigation is concentrating on the preparation of Lehmans accounts and their audits.

AudITors FACe TouGHer reGIMe

An investigation by the UKs Financial Reporting Council into the role of auditors in the global financial crisis could lead to tougher demands and sanctions on accountants. Stephen Haddrill, chief executive of the FRC, said: I am delighted that senior individuals from business and the accountancy profession have agreed to serve on this advisory group to help the FRC identify key lessons from the financial crisis and the way markets are now developing. Our aim is to apply these lessons to the issues within the FRCs remit and to consult on proposals for reform. It is time to get into the detail of the auditing, accounting and corporate reporting practices that need to be changed to enhance the relevance and value of information provided to the capital markets and the assurance given by audit.