Good and bad news for PwC…

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If you work for one of the top firms of accountants in the world and you’re an audit partner it must be [a refreshing change/really annoying – delete as appropriate] when you yourself are audited.

Well in the UK this has just happened for some of the major accounting companies.

The Professional Oversight Board is one of the bodies that works towards improving the quality of audit work and audit firms. They have just published their 2011/12 inspection reports and there were some interesting findings.

Their public report on their inspection of PwC for example commented on a number of items including PwC’s “audit transformation programme”.

The POB said that

“During the year, the firm launched its Audit Transformation programme, the stated objective of which is to enable audit teams to focus on key judgment areas, standardise the firm’s approach and improve audit quality. However, the guides issued to date under the programme appear to focus on improving audit efficiency by reducing audit hours.”

The Report then went on to say that

“The programme also includes increasing the use of the firm’s off-shoring capability, now through two overseas centres, one in India and the other in Poland. Work performed in 2011 by these centres accounted for about 4% of the firm’s core audit hours and is expected to increase to 6% in 2012.”

The POB work was quite thorough as they also looked at PwC’s “staff performance evaluation” forms where interestingly they found that “approximately a quarter of the appraisal forms and objectives for the following year were signed off after the due date.”

The good news for PwC was that the vast majority of the 14 audits that were examined by the POB were either performed to a “good standard” or an “acceptable overall standard”.

Unfortunately for them though there was one audit which was singled out as requiring “significant improvement”.

In case any of you are interested in reading the reports on PwC and some of the other major accounting companies, they can all be found here.

Somehow though I don’t think the partner responsible for the “significant improvement required audit” will be showing all his friends a copy of the report.

It doesn’t matter how good your answer is, if the markers can’t……

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It doesn’t matter how good your answer is, if the markers can’t read your handwriting you won’t get the marks. It’s as simple as that.

As well as having the requisite technical knowledge students must have the necessary exam technique to ensure a pass. One of the more common complaints from markers is that sometimes the handwriting on exam scripts is so bad that they simply cannot read the answers. If they cannot read the answers then they cannot give you any marks.

Whilst it’s probably a bit late now to radically change your handwriting style, there are some simple steps you can take to make your script more readable. An easy one is to leave a gap between each paragraph. This breaks up the text on the page so that it doesn’t look too cluttered and will be easier for the marker to read.

Another point is to practice writing answers under exam conditions. Some of the papers are “written style” papers rather than a numerical one so you must get used to writing under exam conditions. The last time you probably wrote for 3 hours was at the last exam session! Everybody tends to use computers more and more these days and it’s relatively unusual to be writing significant amounts by hand. Practice writing answers under exam conditions and then give your answer to a friend or family member and see if they can understand it!

This was brought home to me the other day when I was talking to my niece. When I mentioned that as a child I used to write notes to fellow students and pass them around the class, she looked at me as though I was a dinosaur. Nowadays they don’t handwrite them but instead send phone text messages to their fellow students. Writing by hand will soon become a thing of the past…

Is this the new face of Ernst & Young?

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I guess we’ve all done it at some time or another.

We’ve woken up one morning and due to too much work (or too much drink…) you look in the mirror and think “oh dear” (or some similar but slightly stronger words).

Well step forward Mr Ed Moyse and Mr Ross Harper who when they looked in the mirror recently saw the Ernst & Young logo staring back at them.

Now this wasn’t a drunken night out at an EY party that went wrong. No, it was a deliberate move.

The two entrepreneurial university students were thinking of ways to reduce the student debt that they had built up when they came up with the idea of using their faces as mobile advertising screens.

They set up their website – buymyface.com – and are selling their “advertising board” faces for one year.

One of their first clients was EY who paid them to display the EY logo on their faces during a skiing trip to the Alps so that EY could advertise to potential new recruits.

The idea seems to have caught on and according to their website as of today they have raised £34,000 from selling their unusual advertising boards.

Their going rate for a day’s advertising on their faces has also increased since they started their business.  They are now charging £600 for a day’s advertising.

EY seem to be so impressed with them that they have now become the main sponsor of the website.

Does this mean that at some stage in the future your accountants “uniform” of dark suit and white shirt will be accompanied by the corporate logo painted on your face?

Not the best way to start a presentation…

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The IT guys I’ve met in my career have all been very nice people. Admittedly they all seem to be slightly mad and do tend to talk in a strange language with lots of mentions of “coding this and coding that”.

To be fair though they all probably think I’m slightly mad when I talk to fellow finance people in my strange language about “SOCI this and SOFP that”.

If you talk to your IT colleagues though one thing that they tend to take very seriously is the level of security.

Now whilst there are lots of higher level security precautions present such as firewalls and anti-virus programmes there are also some more simple precautions that you should take.

Memory sticks (or USB or flash drives as they are sometime known) can all contain confidential documents and most memory sticks are not password protected.

It pays to double check what’s on the memory stick you’re carrying around with you in case it contains confidential documents and you lose it.

In a similar vein it’s always worth checking what other files are on your flash drive if you’re about to make a presentation.

Unfortunately for Father Martin McVeigh, a Catholic priest in Northern Ireland, he didn’t check what other files were on the flash drive he was going to use when he recently did a presentation to some parents of children at a local primary school.

According to media reports, whilst loading up his presentation for the parents, Father McVeigh inadvertently showed a slideshow of indecent pornographic images onto a screen.

The x-rated slideshow was on the memory stick that Father McVeigh had put into the computer to load up his intended presentation.

Father McVeigh was understandably a bit shocked at seeing the naked pictures on the screen (although to be fair probably not as shocked as the parents in the audience were) and according to the BBC website he was “visibly shaken” and “bolted out of the room”.

He later stated that he didn’t know how the images got onto the memory stick.

And the morale of the story?

Well, I guess that IT security is not just the higher level technical areas but also the more simple areas such as making sure you know what else is on your memory stick…

The Big 4 don’t appear to be happy about this…

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We blogged earlier this year about Michel Barnier, the EU internal market commissioner announcing plans to issue new laws which would dramatically impact the “Big 4” (namely Deloitte, Ernst & Young, KPMG and PwC.)

Well, these changes have now got a bit closer as the draft law has just been released.

In an attempt to reduce conflict of interest and to introduce more competition into the industry the main proposal of the draft law includes the requirement for the Big 4 firms to separate their auditing and consulting divisions in the EU.

This is a pretty big issue as in simple terms if the law becomes final it could prevent the Big 4 “audit firms” from providing any non audit related services such as consulting, providing tax advice or running training courses.

This could see a major restructuring of the audit profession.

Other provisions in the draft law include banks being banned from insisting that a company uses a Big 4 firm if they are to be lent money by the bank (at the moment a number of banks make it a requirement for a company to be audited by a Big 4 firm before they will release significant loans.)

There is also a proposed requirement for audit firms to be rotated every 6 to 12 years.

Perhaps unsurprisingly the Big 4 are reported to be against any changes to the current rules (after all as the saying goes, “how many turkeys would vote for Christmas?”).

I’m pretty sure though that the “mid tier group” of auditing firms that are below the Big 4 in terms of size such as BDO, Grant Thornton and Mazars would maybe take a different view to the Big 4 and be in favour of Mr Barnier’s views as this could open up a number of opportunities for them.

Before everyone that works at a Big 4 company starts rushing to rearrange the office furniture though it’s worth noting that the law at the moment is only draft and the EU states and the European Parliament have to provide the final sign off before the law becomes a reality.

Will passing your ACCA or CIMA exams make you slimmer?

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According to a report released yesterday by Eurostat, if you’re in the UK and you’re speaking to a woman then there is a 24% chance that she is obese (or to use less technical terminology, she is very fat).

At the other end of the “fat scale” are ladies from Romania who have the privilege of being the “slimmest nation” in the EU with only 7% of Romanian ladies being classified as obese.

So nearly 1 in 4 ladies in the UK are obese. From an environmental analysis point of view this increase in the number of fat people over recent years is a classic movement in the “Social” part of PESTEL analysis.

As well as having serious implications for the health of those individuals that are overweight the movement towards “fat nations” can have serious implications for businesses over the medium to long term.

In the private sector, Airlines for example will need to invest in bigger seats and spend more on fuel costs to move all this heavier weight around the world.

The public sector will also be impacted with for example hospitals needing to have stronger and bigger beds.

One interesting thing I noticed within the Eurostat report though was the following statement:

The share of obese persons also varies according to the educational level. For women, the pattern is again clear: the proportion of women who are obese falls as the educational level rises in all Member States.

Wow – this is interesting as surely it means that the cleverer you are, the less likely you are to be fat?

So does this means that all your hard work spent improving your educational levels by studying for ACCA and CIMA not only helps your career but also reduces your chances of being obese??

This must be an additional incentive for studying and it also provides a great excuse for any gentlemen that are reading this.

After all, if your wife or girlfriend happens to catch you looking at a slim lady then all you have to say is that you were simply “admiring her intellectual ability”…

ACCA exam tips released today but don’t do what this person did…

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There’s a saying that studying for professional exams is a marathon and not a sprint.

In other words, it’s a long hard journey to reach the exam finish line and not just a quick sprint to exam glory. Anyone that has qualified as an accountant will fully appreciate that it’s hard work and certainly feels more like a marathon than a sprint!

So qualifying as an accountant can be compared to a marathon race although one thing for sure is that you shouldn’t adopt the approach that Mr Rob Sloan took when he recently ran the Kielder Marathon in the UK.

Mr Sloan was 20 miles through the 26 mile race when he decided to give up because he was feeling tired. He then got on a bus and headed home.

As luck would have it though his bus home went near the finish line and he jumped off just before the finish line. He then hid behind some trees and came back to the course when he thought no one was looking and then sprinted to 3rd place.

Mr Sloan was awarded the medal for 3rd place but luckily for the honest runners in the race, his cheating was eventually found out and he was disqualified from the race and is now facing a ban from his running club.

It’s only the examiners that know for sure what’s in the December 2011 ACCA exams but we’ve put together a list of subject areas that we’d personally make sure we knew pretty well in the run up to the exams.

We launched our Facebook page yesterday and the December 2011 ACCA exam tips can be found at www.facebook.com/theexpgroup

We’ve also added to our free ACCA and CIMA courses by launching free online training courses on Facebook towards ACCA’s Foundations in Accountancy (FIA) qualifications and these courses can also be found at www.facebook.com/theexpgroup

Good luck to those of you that are studying for the exams and I hope the final sprint goes well and you’re not forced to “get on the bus” half way through…

Was this as easy as 1,2,… (now what was the next one)?

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There’s a well known technique in public speaking of batching topics in groups of three.

The general idea is that it helps with the flow of the presentation and it’s easier for the audience to remember.

Unfortunately for US presidential hopeful Rick Perry, three topics were one too many when he spoke last night at the live presidential nomination debate for the US Republican candidate.

The speakers at the debate were all candidates to lead the Republican Party in next year’s US Presidential election against President Obama.

Mr Perry was in the process of listing the three US government departments he would abolish if he was elected president when he forgot what the third one would be.

His exact words were:

“I will tell you: It’s three agencies of government, when I get there, that are gone: Commerce, Education and the….. what’s the third one there? Let’s see….. OK. So Commerce, Education and the…..the third agency of government I would…..I would do away with the Education, the….. Commerce and…..let’s see….. I can’t. The third one, I can’t. Sorry. Oops.”

Now, we all make mistakes at one stage or another when speaking in public so is this really something for Mr Perry to worry about?

After all, the debates are only seen as one of the key deciders in whether somebody will win the nomination or not and they were only seen live on primetime TV across America. The press and TV in American are also only talking about it all the time.

Now, any of you studying professional exams will appreciate that two out of three is 66.67% and I’m sure that if you got 67% in your exams you’d see that as a success.

A potential future president of America only being able to remember 2 out of 3 of his proposed policies though probably isn’t so good.

The video of Mr Perry’s performance can be found here and get ready to cringe with embarrassment.

Surely this is the best “out of office notification” ever?

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I recently visited Cardiff for a few days of work. Cardiff is the capital of Wales and one thing you notice as soon as you enter Wales is that the road signs are written in both English and Welsh.

This reminded me of a production error which was reported a while ago which to me must rank as one of the funniest results of an out of office notification.

If used properly the out of office notification is a great tool as it lets the sender of the message know if you’re away for a while and who to contact in your absence.

The error here though involved Swansea Council in Wales who required a road sign saying:

“No entry for heavy goods vehicles. Residential site only”

They emailed their in-house translation service with a request for a translation of this phrase into Welsh and a reply came back with:

“Nid wyf yn y swyddfa ar hyn o bryd. Anfonwch unrhyw waith i’w gyfieithu”

They then produced the sign with both the English and Welsh text on it and put it in the required place by the side of the road.

It was a while later that some Welsh speakers noticed the road sign and it turned out that instead of telling drivers of heavy goods vehicles that they couldn’t drive down that particular road the Welsh text on the road sign actually said:

“I am not in the office at the moment. Send any work to be translated”

It’s just not tennis to leave your phone on at work is it?

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We’ve all been there. Sat in a meeting when suddenly somebody’s mobile phone starts ringing and there’s a mad rush by that person to grab the ringing phone and turn it off.

It’s often the case that the person with the “cheesiest” ring tone is the one that forgets to put their phone on silent.

When the phone rings there’s usually a mumbled apology along with a slightly embarrassed look but then the meeting carries on.

Whilst half the people at the meeting may well be thinking something along the lines of “what an idiot”, the meeting will normally continue with the ring tone soon becoming a distant memory.

There are certain jobs though where it really isn’t advisable to take your phone with you to work. For example, I’m not sure that a surgeon or classical musician should really have their phone with them when they’re working.

The video below shoes an interesting situation when top tennis player Caroline Wozniacki is about to serve against her opponent, the French tennis player Alize Kornet.

As a professional tennis player you need to remain focussed and concentrated at all times. Miss Wozniacki’s concentration though is broken by the ring tone of a phone belonging to none other than her opponent…

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