NOVEMBER 2009

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FIT FOR
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4 CONTENTS

DISPATCH
06 GRAPHIC NEWS PwC revenues drop, corporate
governance in Africa survey and the shape of recessions
08 DISPATCH News round up and jobs news from
around the world

FEATURES
22 RUNAWAY SUCCESS ACCA trainee Graeme
Oudney is a London 2012 Olympic hopeful
26 CONSTRUCTING NUMBERS Project
accountants have exposure to a range
of business areas not normally open to
accountants
30 NETWORK FOR SUCCESS
Everything you needed to know
about developing your networking
skills
35 EVOLUTION REVOLUTION
Accountants need to
develop the skills needed
bybusiness
40 99% SATISFACTION
What you think of the
Professional Ethics module

LEARNING CENTRE
12 HOW TO Study at the last minute
13 TALKING TECHNOLOGY Searching for answers
14 CV CLINIC Avoid the most common CV-writing mistakes
16 STUDENT AMBITIONS Mahesh Amrarasinghe
17 WORK-STUDY BALANCE Working with fellow students

SERVICES DIRECTORY

Click here to find out about the services offered

by ACCA Approved Learning Partners and
subscribers to the ACCA Tuition Provider directory

18 WHAT ITS LIKE TO WORK AT Nationwide, UK

20 STUDENT IN 60 SECONDS Sopha Min

DOWNLOAD ARTICLE PDFS

Wherever you see the download icon

, click on it
to download a PDF file of the article which can be
read offline and printed off to help you with your studies

Welcome to the NOVEMBER 2009 issue 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
45 TECHNICAL
ARTICLES
ADJUSTMENT OF
PROFIT QUESTIONS
PapersF6 (UK), F6
(MYS), F6 (SGP) and
F6 (VNM) and CAT
Papers 9 (LSO), 9 (MYS)
and 9 (SGP)
AUDIT RISK Papers
F8 and P7, and CAT
Paper8
COST OF CAPITAL,
GEARING AND CAPM:
PART 2 Papers F9 andP4
CONVERGENCE
BETWEEN IFRS AND
US GAAP Paper P2
APPLICATION OF
OPTION PRICING TO
VALUATION OF FIRMS
Paper P4
REMITTANCE BASIS
Paper P6 (UK)
REINVESTMENT
ALLOWANCES
UPDATES FROM THE
2009 BUDGET
Paper P6 (MYS)
47 EXAMINABLE
DOCUMENTS All
ACCA and CAT papers
48 TECHNICAL
ARTICLE ARCHIVE All
ACCA and CAT papers

RESOURCES

INTERACTIVE

Send us your top pre-exam tips, and give us

your thoughts on the current accountancy and
business issues that affect you

52 ACCA NEWS
The latest Student
Engage webcast,
The Copenhagen
Communiqu, business
angels and more
56 NOTICEBOARD
Essential exam dates and
rules, and information
on completing your PER

Helen Brand
Chief Executive

NOVEMBER 2009

OLYMPIC HOPEFUL
GOING THE DISTANCE
PROJECT ACCOUNTANT
MANAGE THE NUMBERS
JOINED UP THINKING
NETWORKING
KNOW-HOW

ENHANCE YOUR SKILLS

FIT FOR
THE FUTURE?

EDITORIAL TEAM
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Editor
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Published by the Certified Accountants
Educational Trust in cooperation
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permission of the publishers. CAET 2009
ISSN14730979

2008

2005

$23.3BN

$22BN

$28.2BN

$26.2BN

2006

The worlds largest accountancy

firm, PricewaterhouseCoopers,
last month unveiled the first fall
in global revenues since its
twopredecessor firms Price
Waterhouse and Coopers &
Lybrand merged. Year end is
30June and Deloitte is
snapping at PwCs heels.

2004

$16BN

GRAPHIC NEWS

PwC
REVENUEDROP

2007

$25.2BN

6 DISPATCH

2009

AFRICA:
CORPORATEGOVERNANCE

An ACCA survey of 200 members in East Africa

paints a mixed picture of corporate governance.
Thegraphic shows responses to two of a number of
questions which, although heartening in some
areas, show many businesses lag in adopting
bestpractice.

How often are the corporate governance codes in your organisation reviewed and changes communicated to
theorganisation?

21%

7%

30%

Over 2 years

Bienially Annually

3% 4% 1
Biannually Quarterly Monthly

34%
Never

When did you last read your organisations policies on corporate governance?

25%
Never

3% 2
Over 2 years In the past 2 years

34%
last year

22%
last month

34%
last week

U AND V

Depicts the classic shape of recessions where

economies fall and then recover relatively quickly.
The main difference is how long the economy bumps
along the bottom. Governments desperately looked
for a V to symbolise their victory over the forces of
economic evil. Sadly this now looks unlikely.

THE BATH TUB

An extension of the U idea: economies slide along

the bottom towards the tap end and hope they dont
disappear down the plug hole. Has since been adapted
into a coffin analogy, perhaps more appropriately
symbolising a chronic situation.
(Source: Darryl R Schoon, The Market Oracle)

THE SAXOPHONE
W

An economy that recovers and turns down again. A

current favourite there have been signs of economic
green shoots, coupled with health warnings from
central bankers. The US recession of the 1980s is a
popular example.

A perfect picture of economic

blues, Doug McWilliams of the
Centre for Economic and Business
Research describes it as follows:
The line describing the progress
of gross domestic product goes up,
then sharply down, then comes back
up sharply initially before levelling
off. Billionaire George Soros prefers an
inverted square root.

THE NIKE SWOOSH

L

A fall, followed by a flat or stagnating economy.

Japan in the 1990s is a good example. Favoured by
Nouriel Roubini, the New York-based expert
known as Dr Doom for his consistently
bearish predictions.

THE SHAPE OF THINGS TO COME

An all-but-vertical plunge followed by a much slower,

shallower recovery. A description appropriately favoured
by, among others, the CEO of the sports clothing giant
itself, Mark Parker.

Economists the world over have a reputation of not being able to agree on anything, as amply demonstrated by their
predictions over the shape of impending economic recovery. While most draw examples from the alphabet, others are
becoming more imaginative in the way they describe how the upturn might look. So will the bath tub become the new V,
or will a double-dip be replaced with a Nike swoosh?

8 DISPATCH

NEWS ROUNDUP

01 NON-AUDIT
QUESTIONED

The UK Auditing Practices Board

(APB) is consulting on whether
additional limits should be
placed on audit firms ability to
provide non-audit services. This
follows concerns expressed by
the House of Commons Treasury
Select Committee on the extent
to which audit firms provided
non-audit services and whether
this undermined their objectivity
towards audit clients.The APB is
seeking viewsfrom investors and
others on whether there is broad
support for the Treasury
Committees opinion that a ban
would improve confidence in
auditreports.

02 BDO
INTEGRATIONMOVE

BDOs global member firms

are moving towards closer
integration, with a single trading
style. All the firms in 110
countries will now adopt the
BDO name. The firms will also
share a common IT platform,
integrating networkwide tools
and applications, and improve
document and knowledge-sharing.
Jeremy Newman, CEO of BDO,
said: This is the culmination
of many years of strategic and
operationalinvestment.

03 FAIR VALUE CHANGES

Valuation of financial instruments

should be permitted to be

SINGAPORE
WASHESWHITER

Singapore has now signed

nine of the 12 tax treaties
that it needs to get off the
grey list of the Organisation
for Economic Co-operation
and Development and onto
the white one. However, it
has yet to sign a double
tax agreement with the US.
Though not considered a
traditional tax haven, being on
the list means Singapore has
agreed to the international
tax standard, but has yet
to substantially implement
the measures required. The
necessary legislative changes
for the signed amendments
to take effect are expected
to be passed before the end
of this year. Measures have
been included in the draft
legislation to help ensure that
foreign authorities cannot
come to Singapore on a
fishingexpedition. However,
for nearly all reviewed firms,
ACRA identified a need
forimportantimprovements.

switched between fair value and

amortised cost when the business
model changes, concluded a UK
Accounting Standards Board
(ASB) meeting that brought
together preparers, users
and auditors of UK company
accounts. The International
Accounting Standards Board
(IASB) is against allowing
reclassification under proposals
that would replace IAS39,
Financial Instruments. Peter Elwin,
head of research accounting
and valuation atCazenove, a UK
ASB board member, said:
you would expect the accounting
to show that something really
fundamental was going on.

04 ACCOUNTANTS
MUSTLEAD

Accountants must take a

leadership role in steering the
world out of recession, says
Robert Bunting, president of
the International Federation of
Accountants. At this crossroad
for the world economy, this
means raising our voice about
what we know best, including
capital markets, government
accountability and SMEs, he
told the third annual conference
of CReCER (Accounting and
Accountability for Regional
Economic Growth) inBrazil.

05 KHAZANAH
MAKESALLIANCE

In Malaysia, Khazanah Nasional

Bhd has teamed up with other
sovereign investment bodies
including Brunei Investment
Agency, Abu Dhabi Investment
Council and the private
Saudibased firm MASIC, a
member of the Al Subeaei Group,
to form a new Islamic investment
firm. The new firm, Fajr Capital
Ltd, which has an initial funding
of about RM2.06bn (US$611m)
and access to further capital, will
focus on financial services and

STUDENT ACCOUNTANT 11/2009

The latest on the global economy
www.accaglobal.com/economy

EU TAKES UK
TO COURT
FACTS AND
FIGURES

complementary opportunities
in the broader economy in key
Islamic markets.

06 FOCUS ON
TRANSFERPRICING

99m
M&S claimed
losses from
overseas
subsidiaries

Governments around the world

are taking a tougher approach
to transfer pricing, according
to the2009 Ernst & Young
survey on multinationals tax
challenges. More countries
have increased documentation
requirements and penalty
rules. As a result, the pressure
on international businesses
toget transfer pricing practices
correcthasintensified.

30m
Reduction
in M&S
taxliability

07 CHINA HUNGRY
FORSOLAR

China will become the largest

consumer of solar energy
within two years, Applied
Materials solar unit head Mark
Pinto has told The Wall Street
Journal, pointing to significant
opportunities for solar panel
manufacturers. Although China
made around 40% of the
worlds solar panels last year,
its domestic consumption was
low. But Pinto believes that
with the Chinese authorities
commitment to sustainable
energy, the country is set to
overtake Germany as the largest
consumer of solar power in the
world by 2011.

08 ET FLAKE IS ODDEST
EBAY ITEM

A piece of Nutri-Grain that

looked like ET is the weirdest
item ever sold on eBay Australia.
The online auction site, which
marked its 10th anniversary in
October, says the solitary piece
of breakfast cereal changed
hands for A$1,035 (US$959.4)
in December 2004. Someone
once tried to sell New Zealand,
with a starting price of one cent,
but that auction was pulled.

EU TAKES UK TO COURT
The UK is being challenged
by the European Commission
over its alleged improper
implementation of a
European Court of Justice
ruling on cross-border loss
relief. The referral relates to
an earlier ECJ judgment
regarding Marks & Spencer.
According to the EC, UK
legislation imposes
conditions on cross-border
loss relief that makes it
virtually impossible for
taxpayers to benefit from
such relief. In the M&S
case, the court ruled that it
is disproportionate to
prohibit a UK parent
company from deducting the
losses of its non-resident
subsidiary when the latter
has exhausted all
possibilities for relief in its
state of establishment.
Compliance with the ECs
requirements could cost the
UK Treasury hundreds of
millions of pounds.

?m
The unknown
cost to the UK
Exchequer of
further claims
using the
M&Sprecedent

09 EU
TACKLES
EMISSIONS
FRAUD

The European Commission has

introduced VAT reverse-charging
on carbon trading permits to
combat the high level of fraud.
Several EU member states have
recently reported high-value cases
on carousel fraud on greenhouse
gas emission allowances, believed
to be organised by criminal gangs.
Reverse-charging may be applied
by member states on five
categories of goods and services,
the others being mobile phones,
computer chips, precious metals
and perfumes.

10 IAS 19 REFORM

Adoption of proposed reforms

to IAS 19, Employee benefits,
which would lead to immediate
recognition of the volatility of
pension fund surpluses and deficits
in the profit and loss accounts of
sponsoring companies, would lead
to pension funds shedding riskier
assets, according to a report by
business school EDHEC. This
would be potentially detrimental
to the long-term management of
funds assets. Yield-smoothing
should be used when reporting
pension fund surpluses and
deficits in sponsoring companies
accounts, suggests the report.

11 PROSPECTS
MOTIVATECHINESE

Professionals in China are more

motivated by prospects than pay
when considering a contract role,
according to The Robert Walters
Employee Insights Survey (Asia).
In China, 25% cited a premium
salary, compared to 30% in Hong
Kong, 31% in Singapore, 50% in
Malaysia and 54% in Thailand.
The Chinese respondents were
more concerned about getting a
foot in the door of their preferred
industry orcompany.

10 DISPATCH

JOBS NEWS

01 UK OPPORTUNITIES FOR
STUDENT ACCOUNTANTS

A UK recruiter says things

are looking up for jobseeking
accountants. We have seen
an increase in the variety of
accounting and finance positions.
While there is still demand
for candidates with audit, risk
and controls skills, there is a
notable increase in demand for
commercial finance roles such as
commercial analysis, says Lynne
Hardman, executive director of
Badenoch & Clark. Hardman says
some employers may even be
missing out on top accounting
talent through continuing to be
too rigorous and taking too much
time over their recruitment, as
other employers start to move
more quickly. And because more
part-qualified and qualified
accountants from Australia,
New Zealand and South Africa
are heading home to pick up
work there, candidate shortages
are expected in the UKs major

US AND CANADA SALARIES

UNLIKELY TO INCREASE
IN 2010

Starting salaries in accounting

and finance are expected to
remain relatively flat or even
see modest declines next
year, according to the latest
salary survey by recruiters
Robert Half. A focus on cost
control will continue to shape
the hiring landscape next year,
and starting salaries clearly
are being influenced by that
trend, said Max Messmer, the
companys chairman and CEO.
At the same time, companies
recognise the need to invest
in staff members with
specific expertise
who can help them
capitalise on emerging
opportunities.

cities where employers have

traditionally relied on these
candidates on working holidays.
ACCA students and members
with IFRS credentials may find
opportunities in the public
sector, as the April 2010
deadline for implementation
looms. Local and central
government organisations
continue to require accountants
with IFRS experience, says
Hardman. Those in smaller and
older government organisations
have the greatest demand.
The NHS, in particular, needs
accountants with reporting skills,
not just for IFRS conversions
but to help drive financial
performance and achieve
cost savings.

02 AUSSIE EMPLOYERS
FOCUS ON VALUE

The latest forecast on accountancy

recruitment in Australia by
recruiters Hays Accountancy &
Finance reflects a continued focus

on value-improvement among
employers. Cost accountants are
sought by companies to ensure
they get the best possible price
on commodities and services
in the current market, while a
desire to invest resources into
areas that will increase sales and
add value has created demand
for financial and commercial
analysts with a strong background
in new product development,
process improvement and
profitability analysis. Internal
auditors remain in demand,
as Australian companies strive
to improve efficiencies in
preparation for an expected
upturn in business activity, as
well as to tighten controls and
minimise risk. Hays says demand
is up for hands-on financial and
management accountants.

03 ACCOUNTANTS IN
DEMAND IN SOUTH AFRICA

South Africas comparative

shielding from the worst effects
of the global recession mean
that sectors that might have been
expected to be turning away
staff are hiring. According to
Mike Atter, manager of recruiters
Robert Walters in Johannesburg,
the financial services sector
continues to seek finance talent:
Retail and investment banks
have been hiring especially in
risk and operations as have
fund management and asset
management companies, he
says. And outside financial
services, employers in media,
leisure, telecoms and technology
companies are also looking for
good people.
The countrys number one
recruitment sector has been
construction, largely due to
South Africas successful bid to
stage the 2010 FIFA World Cup.
Johannesburg and Pretoria have
a massive amount of building
going on, says Atter. As well

STUDENT ACCOUNTANT 11/2009

Realise your career ambitions at ACCA Careers
www.accaglobal.com/careers/

FACTS AND
FIGURES
57.9%
Gen Y in Asia
Pacific expect
to stay with
an employer
for three to
fouryears
42.8% expect
to change
careers more
than three
times

KEN LAO ZU GENERATION

QUESTIONED IN
ASIAPACIFIC

Whatever label you use

Generation Y or the ken lao
zu generation those born
between 1982 and 2001 are
reckoned to be the leaders
of tomorrow. But a survey by
Hays Accountancy & Finance
reveals that in the workforce,
Generation Y are not too
dissimilar to the remainder
of the working population.
However, there are big
differences around loyalty.
Loyalty within Generation
Y is best achieved through
career progression
opportunities, while for
Generation X born 1962
and 1981 its achieved
through ongoing learning
opportunities, says Emma
Charnock, the companys
regional director for China
and Hong Kong. Another
difference surrounds average
expected tenure, which
increases with age, and
whilea companys reputation
is essential for GenerationX,
the survey found this
was not as important
afactor to candidates from
GenerationY.

66.7%
say a job thats
enjoyable and
meaningful
is more
important
than one thats
exciting or
pays well

as highways and new train

routes, there are new offices
and shopping centres under
construction. Building projects
are also underway in Durban,
which will see a new stadium and
airport, as well as Cape Town
and Port Elizabeth. Government
and private investment in
infrastructure development is
generating more opportunities
for finance professionals,
says Atter. People with project
finance skills are particularly
sought-after; and construction
companies are also building
their risk teams.
Skill shortages mean South
African accountants who have
sought their fortunes overseas
are being encouraged to return.
Those who have built up a
portfolio of skills in the UK
especially often want to do
something completely different
when they come home, as
finance roles here tend to be
more varied than in the UK
says Atter. But its a good
idea to gain leverage from the
experience theyve acquired in
the UK, in order to maximise
their earnings.

04 SINGAPORE JOB MARKET

SET TO RECOVER IN 2010

Just over half (53%) of

employers in Singapore
say financial services and
accountancy recruitment
will start to increase before
the end of 2009, with one in
three (34%) saying it will be in
2010, according to a survey by
accountancy recruiters Morgan
McKinley. Almost nine out of
10 employers believe there
will be an increase in demand
for financial services and
accountancy professionals within
the next 18 months. Jeremy
Canning, managing director of
Morgan McKinley Singapore,
says, While this does provide

11

some
optimism
for Singapores
hiring market, given
business current focus on
cost-savings and efficiency, it
is likely to be a steady rise over
several months rather than an
overnight surge in hiring activity.

05 FAR EAST JOB HOTSPOTS

The latest quarterly report from

Hays Accountancy & Finance
in Hong Kong shows that hiring
intentions are improving and
a greater variety of skills are
in demand than earlier in the
year. Pockets of demand have
certainly existed this year, but
they were often centred on
managing the effects of the
financial crisis, says Emma
Charnock, regional director for
Hong Kong and China. Audit,
compliance and risk specialists,
for example, were all in demand.
Now, employers are also turning
their focus to preparing for the
expected upturn in business
activity. Caution remains, but
confidence is returning. They are
recruiting staff to drive revenue,
minimise risk and improve
processes as well as rebuilding
teams which have been coping
with an increased workload due
to past redundancies. Headcount
approval is attained more easily
and some headcount freezes
arelifting.
Pressure to adhere to
governance in addition to
changing reporting requirements
has created a demand for
financial reporting skills in Hong
Kong, while taxation skills are
sought by Chinese employers to
manage changing tax regulations.
Good news for readers of Student
Accountant is that Hays says
candidates with professional
qualifications most notably
ACCA and CPA are highly
sought-after.