February 2013

Will auditors become more like Tom Cruise in the future? Well, if I was to make a prediction…

Published on: 28 Feb 2013

Gone are the days when auditors were manually checking and ticking lots of pieces of paper. Today’s auditing techniques involve significant use of computers.

But how far can this computer use go? Will they be able to predict when accounting fraud is going to take place as opposed to tracking transactions that have already occurred?

The film Minority Report starring Tom Cruise was based around software that could predict when a crime was going to happen and the culprits would be arrested before they actually committed the crime. Although this film seemed well and truly within the realms of science fiction, two police forces in the UK have recently begun trials of a sophisticated computer software package which aims to predict where and when future crimes are likely to occur.

The software is known as Crush (Criminal Reduction Utilising Statistical History) and is used to identify potential crime hotspots based on a variety of data including crime reports, offender profiles and strangely enough even weather forecasts.

Once these upcoming crime hotspots have been identified then the police can allocate resources accordingly.

The system is produced by IBM and the UK tests are based on a successful roll out of the software in the US by the Memphis police force which resulted in a reduction of serious crime by 30%.

Back to auditing though and will the next step be predicting when a fraud is likely to occur using statistical analysis based on industry, profit movements, director’s personal life and spending habits (plus the weather of course)?

Given the reliability of some computers though, one thing for sure is that is if you happen to live in a town called “Syntax Error” then you may have a surprise visit from a Tom Cruise lookalike with a briefcase and a calculator.

It’s not until you qualify that you appreciate it.

Published on: 25 Feb 2013

ACCA P3 and CIMA E3 are great papers. Students often say to me that they love them but strangely enough they only realise this once they have qualified!

This may sound a bit confusing but the thing with these papers is that they are genuinely interesting. With the pressures of passing the exams as well as work and family life however it’s often the case that students cannot appreciate the interesting areas within the subject until they’ve got the exams out of the way.

Over the years one major area that has distinguished the good students from the not so good students is the ability to be aware of what is happening in the economy and the business world and to link this in to the exam subject matter.

This doesn’t have to be hard work. It’s not an ongoing test but rather the ability to look at everyday news and link it to the concept of strategy. For example, it was recently reported in that despite there being a recession in the UK  the cinemas were having the highest admissions for over 7 years. Year on year, the attendance at cinemas had increased by over 5%. It’s argued that the reasoning behind this is that it’s one of the cheaper forms of entertainment. People are therefore cutting back on certain more expensive forms of entertainment in favour of the less expensive versions.

Having read this in the news the good students would then ask themselves what other businesses could be doing well in the recession and what ones will suffer.  Linking this to the exam, is there an easy mark or two to make a note of the industry the case study company is involved in and how the recession will affect it? Will it be in a strong position when the recession comes to an end?

Showing an awareness of what is happening in the real world and linking it to the exam will go down well with the examiner.

Australia. Welcome to the land of sun, sand and intervention orders served via Facebook.

Published on: 20 Feb 2013

Police forces are classic Not-for-Profit Organisations and whilst they don’t have similar revenue streams to those which are found within commercial for-profit organisations they do have to balance the books between their funding (revenue) and their costs.

The Police force in the Australian state of Victoria came up with a novel approach to serving an intervention order that not only ensured that the offender received the order but also saved money.

An individual in Australia had allegedly been harassing and threatening his ex-partner. An order was made against him instructing him to cease this behavior and to stop contacting her.

It was however proving difficult for the police to track him down. They had tried actual visits, sending details by post as well as phone calls to serve the order on him but all to no avail.

They identified that he was an avid Facebook user and in a novel approach to matters the police transcribed all the court documents and sent them to his Facebook inbox.

Going one step further they also recorded the following video for him which was again delivered through the medium of Facebook.

After receiving everything via Facebook, the offender has now agreed to comply with the intervention order although it is not clear whether he clicked the “like” button on his Facebook page after he first viewed the video.

Professional exams and romance. A perfect match?

Published on: 15 Feb 2013

Yesterday was Valentine’s Day. The day first started becoming popular in the 19th century in Great Britain and it’s a day when couples celebrate their love for each other.

The shops have been full of Valentine cards and gifts for people to send to their partners. I have a nice story about Valentine’s Day and professional exams as a few years ago two of my students first met on one of my courses and then ended up getting married on Valentine’s Day a few years later.

They worked for different Big 4 companies and love started to blossom when they sat next to each other on my course and the guy Andy asked Liz (his future wife) at lunchtime on the first day of the course if she understood what was being taught in the morning as he was finding it quite difficult. Fast forward 3 years and they got married on Valentine’s Day.

He later claimed that he did understand what was being taught but simply wanted to start up a conversation!

The moral of the story though is that if you’re on a course or studying with some friends and you find one of your colleagues attractive then don’t be afraid to get talking and who knows you may end up getting married in a few years!

The ExP Group