8 SEPTEMBER 2010

WORKING IN PROFESSIONAL SERVICES AND BUSINESS

NOT WORLDS APART

RED CARPET ACCOUNTANTS LIFESTYLE OF THE RICH AND FAMOUS CODE OF HONOUR KEY PERSONAL VALUES

4 CONTENTS
DISPATCH
06 GRAPHIC NEWS Chinas luxury goods brave the recession, quiet prot warnings and assets drip away 08 JOBS NEWS Career updates from around the world 10 NEWS ROUNDUP Global accounting and nance news

FEATURES
20 NOT WORLDS APART Your nance career doesnt have to be restricted to practice or commerce, as accountants who have worked in professional services and business explain to Student Accountant 24 RED CARPET ACCOUNTANTS Beth Holmes reveals how accountancy can provide the lifestyle of the rich and famous 26 OUTSOURCING ACCOUNTANTS When it comes to careers in accountancy, does outsourcing mean out of mind? 28 CODE OF HONOUR HSBC Singapores Anthony Kam FCCA cites honesty and integrity as the key personal values which can help chief nancial ofcers

LEARNING CENTRE
14 3 THINGS Managing up 15 HOW TO Boost your brand 16 ON ACHIEVING MEMBERSHIP Johanna Ledingham 17 STUDENT ENGAGE Ask the examiner special 18 PER SUPPORT Online links 19 SEVEN TOP TIPS Self-study

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Welcome to ISSUE 18/2010 of STUDENT ACCOUNTANT

Please email [email protected] with your feedback on this issue
Brendan Murtagh President Mark Gold Deputy President Dean Westcott Vice President

TECHNICAL
29 TECHNICAL ARTICLES 2010-11 BUDGET: TAX MEASURES Relevant to ACCA Qualiication Paper F6 (HKG) and P6 (HKG) FINANCE ACT 2010 Relevant to ACCA Qualiication Paper F6 (UK), P6 (UK) and CAT Qualiication Paper 9 (UK) REPORTING CHANGES Relevant to ACCA Qualiication Papers F7 and P2 INDUSTRY QUESTION Relevant to ACCA Qualiication Paper P2 ANALYTICAL PROCEDURES Relevant to ACCA Qualiication Paper P7 STUDENT ACCOUNTANT TECHNICAL ARTICLE ARCHIVE An archive of Student Accountant technical articles is available at www.accaglobal.com/ students/student_ accountant/archive/

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: [email protected] 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: [email protected]
Published by the Certiied 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

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6 DISPATCH
500 450 400 350 300

GRAPHIC NEWS

250

JEWELLERY

COSMETICS

FOOTWEAR

200 150 100 50

LIFES LUXURIES
Chinas luxury goods market has managed to brave the global recession, according to Refined Strategies: Luxury extends its reach across China, a report by KPMG and TNS. In it, 44% of respondents say they will spend as much as or more than they did before the crash. = Decrease = Keep the same = Increase = Never bought and not planning to buy = 10% 0 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10

QUIET LIFE
UK quoted companies have been making less of a noise about profit warnings, says Ernst & Youngs Analysis of Profit Warnings report. The number of profit warnings is falling as firms give a more realistic outlook and the economy slowly improves.

* * * * *

2004

2005

2006

2007

2008

2009

ASSETS DRIP AWAY

The liquid assets of the largest companies in the US and Europe have evaporated somewhat in the past decade. According to Ernst & Youngs All Tied Up; Working Capital Management report 2010, firms have reduced their levels of working capital by as much as 11% in the US and 13% in Europe since 2002.
INDEX COMPILED BY ERNST & YOUNG

WATCHES

CLOTHES

EUROPE

BAGS

US

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8 DISPATCH
01 REGULATORY CHANGE SET TO DRIVE BOOM TIMES FOR CONTRACTORS
According to a leading recruiter, changes in the way the UKs banking and financial systems are regulated will impact on the skills required by employers of finance professionals. Jobseekers may well look forward to levels of demand for talented interim accountants unheard of since the days of IFRS implementation, which gave rise to a feeding frenzy among employers and recruitment consultants. Tim Hedger, deputy managing director of recruiter WH Marks Sattin, said, Changes in regulation always mean an increase in demand for specialist skills. As that demand increases, so will the day rates of the finance professionals qualified to advise companies on new regulatory regimes. This is exactly what happened with MiFID and with SarbanesOxley experts in these fields commanded huge contract rates in the wake of the regulatory turmoil. Hedger says the latest reforms will be expensive for UK plc, adding, Expect professional services firms and management consultancies to have a field day. However, Hedger says the bigger issue is around timing, questioning the wisdom of introducing sweeping new powers for the Bank of England when the European economy is at breaking point. He continued, Since the crash of September 2008, the FSA had got its act together. Is the Chancellor just trying to kill off a New Labour creation? If the City is to keep competing with other established global finance centres and combat the threat posed by emerging centres such as Dubai, then he cant afford to play politics with banking regulation. Expectations are still climbing as candidates find it easier to obtain new positions. Indeed, offers are increasingly being turned down, such are the choices available to good people. Counter-offers when employers respond to resignations by attempting to beat the package or status offered to disgruntled employees by other organisations are responsible for some four in 10 (38 per cent) instances of accountants ultimately snubbing potential new employers.

02 ACCOUNTING CAREERS ADD UP FOR GRADUATES

Nearly two-thirds (63 per cent) of employers with plans to increase headcount favour junior employees over more experienced players, according to a survey by recruiter Robert Half. The news encouraging for graduates indicates that Generation Y (those jobseekers born during the 1980s and early 1990s) are becoming increasingly popular with employers, who value their skill sets. One in 10 chief financial officers (CFOs) and finance directors felt that Gen Y were more commercially aware an attribute that can make a key difference in demanding economic times than previous generations. Phil Sheridan, managing director of Robert Half UK, said, Graduates are having a tough time getting on the job ladder, with fewer opportunities and more competition in many sectors. However, for those who want to work as finance professionals, there are potential openings. Robert Halfs consultants are now advising their more junior candidates to step up their networking efforts and maintain an online, self-promoting profile to interact with other finance professionals, recruiters and potential employers. And while no-one should be complacent about their chances in the current job market, candidates should nevertheless identify their dream role and target employers accordingly. Companies are looking to hire candidates who are passionate about their business and committed to the role, advised Sheridan. If you can demonstrate these qualities in the interview, youre more likely to be successful.

JOBS NEWS

SINGAPOREAN EMPLOYERS MUST INCREASE SALARIES TO RETAIN KEY TALENT

One of the largest recruiters in the Asia Pacific region has urged employers to consider raising salaries to win an intensifying war for talent. More than nine out of 10 (96 per cent) employers are set to maintain or increase the size of their finance teams twice as many as this time last year. More than four in 10 (42 per cent) recognise they will need to re-visit original budgets for new-hire salaries to maximise the chances of offers being accepted by the most in-demand candidates. Georgie Chong, executive general manager for Hudson in Singapore, said,

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10 DISPATCH
01 FATHER AND SON CHARGED

NEWS ROUNDUP

A former Deloitte partner and his son have been charged by the US Securities and Exchange Commission with insider trading, regarding the securities of several Deloitte audit and consulting clients. Thomas P Flanagan and Patrick T Flanagan paid over $1.1m to settle the charges on the basis of neither admitting nor denying the charges. The SEC alleges that Thomas P Flanagan . provided privileged information about clients advance earning results and other data to his son to enable him to trade in the securities of Best Buy, Sears, Walgreens and Motorola.

ENVIRONMENTAL REPORTING 02 TOUGHER AUDIT STANDARDS

The US Public Company Accounting Oversight Board (PCAOB) has proposed tougher audit standards relating to the confirmation process. The proposed standard recognises the importance of audit evidence obtained from independent third parties and strengthens and extends the requirements for using confirmations in the audit process. The proposal would modernise the confirmation standard and strengthen its requirements to better protect investors, said PCAOB acting chairman Daniel L Goelzer. The proposed new standard would also more explicitly incorporate consideration of the risk of material misstatement due to error or fraud into the selection, design and performance of confirmation procedures. The UK government is considering requiring large companies to report carbon emissions in annual reports and accounts from 2011. A green paper says: Carbon disclosure by the UKs largest companies would act as a significant driver of emissions reduction and create a competitive advantage in the corporate sector by establishing a level playing field, allowing consumers and investors to make meaningful comparisons. partnership oversight board at Grant Thornton, has told an ICAS conference on the Future of Assurance. The greater transparency should include clearer disclosures about business models, related risks and management judgment and estimates. The reporting model should provide the clearer disclosures that investors need, and the role of external auditors should broaden to provide investors and others with further value from their independent examination, said Maslin. of the tax and welfare systems. This could enable employees to have the correct tax deducted when they move jobs and could potentially remove the need for the P45/P46 procedures.

05 E&Y BRINGS IN NON-EXECS

Ernst & Young is implementing the UK audit firm governance code across its global network, including the adoption of nonexecutive board members. Nonexecutive appointees will join E&Ys Global Advisory Council. Jim Turley, global chairman and chief executive, said: Although the code technically applies only to our UK business, we believe it is most appropriate for us to implement the codes provisions on a global basis also.

04 PAYE REVIEW 03 FUTURE OF ASSURANCE

Auditors and audit committees should be more willing to provide information to investors, Steve Maslin, chair of the The UKs HMRC has launched a review of the operations of PAYE, proposing that a system of real time information is introduced, designed to improve the accuracy

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12 DISPATCH
06 HANG SENG LAUNCHES SERIES 07 ADVISER URGES WATER FOCUS
Asia is in the grip of a water crisis that could set back the regions robust economic growth if left unresolved, according to a top Asian Development Bank (ADB) official. Arjun Thapan, special adviser to ADB president Haruhiko Kuroda on water and infrastructure issues, said governments must start managing the resource better to prevent the problem from worsening. We believe that the estimate recently made about Asia having a 40% gap between demand and supply by 2030 is a reasonable estimate, Thapan told AFP on the sidelines of the Singapore International Water Week conference.

08 PARTNERS LAX ON AUDITS

Partners at accounting firms in Singapore are not putting in enough time auditing entities like listed firms, while numbercrunchers doing the work are often too inexperienced to do a thorough job, according to findings from the Accounting and Corporate Regulatory Authoritys (ACRA) annual report on practices and standards. Julia Tay, director of ACRAs profession oversight division, said senior people should be engaged for at least 5% of the time on lowerrisk assignments and 10% on those of higher risk. She said partner involvement could be as low as 1% of total engagement time.

NEWS ROUNDUP

The Hang Seng Indexes Company, which manages the Hong Kong Stock Exchange indices, has introduced a new series to trace the performance of stocks which promote environmental protection and good corporate governance. The Hang Seng Corporate Sustainability Index Series has three indices, one covering Hong Konglisted companies, one for mainlandlisted firms and a third for those listed on both. According to the company, all constituent stocks will have their environmental protection measures and corporate governance assessed by an independent advisory firm.

HK CAN HELP MAKE YUAN THIRD MAJOR CURRENCY

Former Hong Kong Monetary Authority chief Joseph Yam says that Hong Kong can help the yuan become one of the worlds major currencies. The mainland currency has the potential to take its place after the US dollar and the euro in the global monetary system, says Yam who is now executive vice president of the China Society for Finance and Banking a Peoples Bank of China research unit. Yam told Xinhua that Hong Kongs position as a financial centre, and its free market environment, make it the ideal place for the yuan to be internationalised. A recent loss of confidence in the US dollar and euro makes it necessary for a third major currency to help stabilise the volatile global financial market, he said. The yuan would be more than suitable for this role, Yam added, as the mainland is emerging into a strong economic entity and has had stable economic growth over the past 20 years. However, Yam noted that there is still a long way to go for the yuan to become a major global currency, as several key conditions, including free yuan convertibility, have to be met first.