happy talk

84 Pages·2013·32.36 MB·English

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HAPPY TALK
WHY MEASURING HAPPINESS IS IMPORTANT
INSIDE NESTLÉ
INTERVIEW: UK FINANCE CHIEF LIZ LEGGE
CFO PATHWAYS NEW ROUTES TO THE TOP
CPD TECHNICAL IMPAIRMENT OF ASSETS
AUDIT THE FIVE-YEAR FURORE

WELCOME 3
Welcome
ACCOUNTING
JOY DIVISION AND BUSINESS
How happy are you? It’s a difficult question to answer at The leading monthly magazine for
all, let alone objectively and precisely. Yet, on a national finance professionals, available
scale at any rate, your happiness is increasingly under in six different versions: China,
scrutiny by the government. Our cover feature this International, Ireland, Malaysia,
month takes a look at the growing interest in this area Singapore and UK.
from policymakers. It might all sound altruistic, but the
rationale is indeed sensible. If they can measure the
nation’s happiness against variables that something can There are different ways to
be done about – health, education, income, housing, social contact etc – then read AB. Find out more at
governments can work out how they can use their resources most effectively to www.accaglobal.com/ab
increase our sense of well-being. In other words, how much happiness they can
generate per pound by spending money on one thing rather than another. Turn to
page 18 to read more.
ON PAPER
Some finance professionals might dismiss such exercises as woolly and
imprecise, which of course they are. But that doesn’t mean they don’t have value. Free to ACCA
It might be easier to quantify our net worth as individuals, but most people would members. Annual
regard their happiness as more important than their wealth (although of course non-member
such measurements may simply reveal that money tends to buy happiness!). subscription £85
There are parallels here with developments in accountancy, as hard-to-measure
non-financial information is increasingly brought into corporate reporting – see
our integrated reporting feature on page 36. Again, the rationale is sensible.
ON IPAD
In today’s complex, connected world of ever larger global organisations, those
charged with allocating resources and decision-making need a fuller picture than Download searchable
just the hard numbers, so we as a profession need to work towards the best iPad editions from
possible ways of measuring and communicating non-financial factors. the iTunes App Store
Whether the extra challenges will increase or decrease the happiness levels of
CFOs, financial controllers and auditors remains to be seen, but at least we’ll be
able to have a stab at measuring by how much.
ON
Chris Quick, editor, [email protected] DESKTOP
The latest edition
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ACCOUNTING AND BUSINESS
4 CONTENTS
AB UK EDITION
OCTOBER 2013
VOLUME 16 ISSUE 9
Editor-in-chief Chris Quick
[email protected] [phone]
Asia editor Colette Steckel
[email protected] [phone]
International editor Lesley Bolton
[email protected] [phone]
Digital editor Jamie Ambler
[email protected] [phone]
Sub-editors Loveday Cuming, Dean Gurden
Peter Kernan, Jenny Mill, Eva Peaty, Vivienne Riddoch
Digital sub-editors Rhian Lewis, Eleni Perry
Design manager Jackie Dollar
[email protected] [phone]
NEWS
Designer Robert Mills
06 News in pictures
A different view of
Production manager Anthony Kay
[email protected] recent headlines
Advertising Richard McEvoy 08 News round-up
[email protected] [phone] A digest of all the latest
news and developments
Head of publishing Adam Williams
[email protected] [phone]
FOCUS
Printing Wyndeham Group 14 Interview: Liz Legge
Nestlé’s UK & Ireland CFO
Pictures Corbis
18 Reasons to be cheerful
ACCA
President Martin Turner FCCA Measuring progress
Deputy president Anthony Harbinson FCCA through happiness
Vice president Alexandra Chin FCCA
Chief executive Helen Brand OBE COMMENT
22 Robert Bruce Problems
ACCA Connect
with audit retendering
Tel [phone]
Fax [phone]
[email protected] 24 Peter Williams The
[email protected] collapse of RSM Tenon is
[email protected] a cautionary tale
27 Jane Fuller Business
models, facts and fantasy
Accounting and Business is published by ACCA 10 times per year. All views 28 Martin Turner The new
expressed within the title are those of the contributors. ACCA president looks
ahead to the coming year
The Council of ACCA and the publishers do not guarantee the accuracy of
statements by contributors or advertisers, or accept responsibility for any
statement that they may express in this publication. The publication of an CORPORATE
advertisement does not imply endorsement by ACCA of a product or service. 29 The view from
Copyright ACCA 2013 Suzanne Jones of Legal &
Accounting and Business. No part of this publication may be reproduced, General, plus snapshot on
stored or distributed without the express written permission of ACCA.
oil and gas
Accounting and Business is published by Certified Accountant
(Publications) Ltd, a subsidiary of the Association of Chartered Certified 30 Driving the future
Accountants.
What lies ahead for fleet
ISSN No: 1460-406X management?
29 Lincoln’s Inn Fields Audit period July INSIGHT
London, WC2A 3EE, UK 2011 to June 2012
[phone] 148,106 32 Business finance
www.accaglobal.com Unwrapping lending costs
ACCOUNTING AND BUSINESS
CONTENTS 5
CPD
Reading this magazine to keep
up to date contributes to your
non-verifiable CPD. Learning
something new and applying it
in some way contributes to your
verifiable CPD, as do the online
questions related to certain
articles on the technical pages,
provided that they are relevant
to your development needs.
35 Graphics Focus on how
entrepreneurs can kick- 60 Strategy for success
start economies How to enable competitive
advantage
36 Integrated reporting
Responses to the IIRC’s 62 Assembly line
discussion paper accountancy? The rise of
tax compliance centres
39 Tomorrow’s CFO How
to get to the top 64 Interview: Forum of
Firms chairman Bob
42 Careers Dr Rob Yeung, Dohrer on audit challenges
our resident talent doctor,
talks leadership PUBLIC
67 The view from John
44 Operations Lelliott of The Crown
management A look at the Estate, plus snapshot on
different approaches public service mutuals
46 Walking the talk 69 Strategic financial
Networking and leadership ACCA research
presentation tips for the examines the pressures
finance function
PEOPLE
TECHNICAL 72 The challenge Greg
47 IASB conceptual Lee on Accenture’s
framework business model
Understanding its value
ACCA
49 CPD: IAS 36, 76 New members
Impairment of Assets The
standard is scrutinised 78 Diary
52 Internal audit Getting 79 News ACCA publishes
priorities right is crucial integrated report; new
export competition; a
54 Technical update range of CPD learning
The latest on financial methods are available
reporting, auditing, tax
and law 80 Success story Welsh
TV production group
PRACTICE Tinopolis
59 The view from Paul
Westwood of Westwood 82 News ACCA online
& Co, plus snapshot on conference; new issue of
corporate finance Accountancy Futures out
ACCOUNTING AND BUSINESS
6 NEWS | PICTURES
▼ SHAREHOLDER PAYOUT CALLING
Vodafone sold its 45% stake in Verizon Wireless to US
telecoms group Verizon Communications. The £84bn
deal is one of the biggest in corporate history
▲ONE FOR THE ROAD
Personalised number plates – like this one
on the car driven by Prince William after his
wedding to Catherine Middleton – give the UK’s ▲ SECOND TIME LUCKY
net worth a £2.3bn lift, according to the Office Japanese sports fans celebrate after hearing that Tokyo had won the
for National Statistics. The DVLA has millions on bid to host the 2020 Olympics – it last hosted the Games in 1964
offer, and last year raised £67m in sales
ACCOUNTING AND BUSINESS
PICTURES | NEWS 7
◄ NO NAPPING FOR IKEA
A man rests in an IKEA branch
in Shanghai – a common
sight in the store. The
Swedish company is now the
largest foreign commercial
landowner in China
► GLARING ERROR
Curved London skyscraper the
‘Walkie Talkie’ was blamed
for reflecting light which
scorched property and cars
parked on a nearby street
▼ DRIVE INTO THE FUTURE
Jaguar Land Rover announced 1,700 new jobs at Solihull
plant. JLR recently unveiled the C-X17 concept vehicle – a
cross between a sports car and an SUV
▼ CONTROVERSIAL DELIVERY
The Royal Mail was due to be privatised
after commissioning a report from PwC that
forecast letter volumes falling by 4% a year
ACCOUNTING AND BUSINESS
8 NEWS | ROUND-UP
News round-up
This month’s stories include revenue growth for PwC and Deloitte, a rise in demand for
integrated reporting, fears of an accountant ‘brain drain’ and a surge in audit tenders
PwC REVENUES UP 3%
PwC has grown revenues
in the UK by 3% to £2.7bn
for the year ending June.
Revenues grew by 1% in
the assurance practice,
3% in the tax practice and
9% in consulting, while
remaining flat in mergers
and acquisitions. Profit rose
to £740m, up from £727m
in 2012.
DELOITTE GROWS BY 8%
Deloitte increased revenues
in the UK by 8% to £2.5bn
in the year ending May.
Revenues grew by 14% in
its consulting practice, 12% S INNOVATION DRIVES RANK 01 RANK 10
in audit, 6% in tax and 1% COMPETITIVENESS Switzerland UK
D
in corporate finance. Profit Excellent innovation
distribution to partners N and strong institutional RANK 04 RANK 23
rose slightly, from £569m environments are increasingly Germany France
in 2012 to £571m in 2013. key drivers of competitiveness
E
The firm is creating 1,750 for national economies, RANK 05 RANK 29
vacancies for school leavers, R according to the World US China
students and graduates. Economic Forum’s Global
T Competitiveness Report 2013- RANK 09 RANK 56
DEMAND FOR UK STAFF 14, which ranks 148 nations. Japan Brazil
British accountants are in
strong demand in Australia
and employers will pay for will enable small firms RSM TENON ACQUIRED provide us with new
relocation costs, according and individuals to resolve RSM Tenon has been opportunities for growth, as
to the Emigration Group, a disputes with HMRC acquired by Baker Tilly. The well as further strengthening
migrant advisory service. without having to go to a parent RSM Tenon business and expanding our offering
The highest demand tribunal. The adoption of entered administration after to the market.’ RSM Tenon
is in the major cities – the new service follows breaching banking covenants was the seventh largest
Sydney, Melbourne and a successful two-year and Lloyds Banking Group accountancy firm in the UK,
Brisbane – and ranges from trial and consultation declined to grant a covenant with about 2,500 employees
accountants who are newly with professional bodies. waiver. Baker Tilly bought in 38 offices.
qualified to those with Richard Summersgill, the profitable parts from
experience. Accountants HMRC’s director of local administrator Deloitte DELOITTE FINED £14m
who can grow practices compliance, said: ‘We without taking on any Deloitte has been fined
and attract clients will know that taxpayers like historic debts. Laurence £14m and given a ‘severe
be most attractive to the speed and flexibility Longe, Baker Tilly’s national reprimand’ for breaches
Australian employers. of Alternative Dispute managing partner, said: of professional standards
Resolution and evidence ‘Baker Tilly and RSM regarding its role as adviser
HMRC LAUNCHES ADR has shown that by using Tenon are businesses of a to the MG Rover Group.
HMRC has launched the simple service, comparable scale operating Former Deloitte partner
its Alternative Dispute many disputes can be in similar markets across Maghsoud Einollahi has
Resolution (ADR) service. significantly shortened the UK and internationally, been excluded from the
Using independent and resolved without and so combining our profession for three years.
»
facilitators, the service recourse to tribunal.’ strengths and skills will The Financial Reporting
ACCOUNTING AND BUSINESS
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10 NEWS | ROUND-UP
consultation on guidance the UK and listed in the
on strategic reporting. UK, it is not authorised to
Melanie McLaren, the audit public companies
FRC’s executive director such as Early Equity that
$4bn for codes and standards, are incorporated in the UK.
Loans originated on P2P said that investors want Clement Chan immediately
platforms since inception information to be clearer, resigned and was replaced
more forward looking and by Haysmacintyre.
$2bn more closely related to
Forecasted loan companies’ business model. RELOCATIONS ON RISE
origination on ‘Along with our project on There will be a 50% rise
P2P platforms for establishing a framework for in global relocations of
2013 alone disclosure, the guidance is accountants and other
aimed at “cutting clutter” professionals in the next
233% and improving relevance decade, as companies move
Annualised growth of corporate reporting to towards more flexibility in
of the largest investors,’ she said. locations in the search for
P2P platform growth, according to PwC
SMEs NEED FX ADVICE research. Future trends will
150% Many practitioners are include more movement
Annualised growth overlooking opportunities from East to West, long-
of UK P2P lending to help clients manage distance commuting, virtual
platforms their foreign exchange risk mobility and project-based
exposure, according to an assignments, says PwC.
Source: Liberum Capital ACCA report. Fewer than ‘Many companies are facing
a quarter of small and the reality that they don’t
S CROWDFUNDING TAKES OFF medium-sized practitioners have the right talent in the
A surge in peer-to-peer (P2P) lending (SMPs) play an active right places to fulfil their
D
– crowdfunding – has led the Financial role in helping SME clients global growth ambitions,’
Conduct Authority to pay closer attention manage foreign exchange explained Carol Stubbings,
N
to the sector, which is strengthening its risks, reports SMEs and PwC UK’s international
regulation from next year. foreign exchange risk: are assignment services leader.
E
According to research commissioned by small and medium-sized
R rebuildingsociety.com, one in four (26%) accountancy practices up to AMAZON GOES TO COURT
people in the UK would consider loaning speed? The international Amazon has petitioned the
T money to UK SMEs through peer-to-peer survey of 1,350 SMPs US Supreme Court to quash
lending after regulation is introduced. found that 71% had SME a move by New York state
clients with international to require the company to
activities. Fluctuating collect an online sales tax
Council has now published that have embarked on the exchange rates can cost on New York citizens buying
its final report of the integrated reporting journey SMEs money, so it makes goods from Amazon’s
disciplinary hearing, which view it as a change process sense for them to seek website. The demand
its executive director for that has enabled them to advice from financial reflects growing concern by
conduct, Paul George, think differently about their advisers in managing local governments and city-
urged all members of the businesses.’ Integrated that risk, said ACCA’s centre retailers that online
profession to read. reporting has enabled senior economic analyst retailers have an unfair
companies to strengthen Manos Schizas. Read the advantage by avoiding bricks
IR DEMAND ON RISE financial reporting report at www.accaglobal. and mortar taxes. Amazon
PwC reports growing across their business com/access declined to comment.
demand for integrated activities and improved
reporting from investors and internal collaboration and HK AUDITOR DROPPED VODAFONE SETTLES
companies. ‘Stakeholders communication, while some Early Equity, a UK plc, has Vodafone has paid £1.25bn
are increasingly considering have used the process to been instructed by the to HMRC to settle an
internal and external develop key performance Financial Reporting Council outstanding disagreement
non-financial factors, such indicators, says PwC. to drop its Hong Kong- concerning where royalties
as resource scarcity or based auditor. The FRC should be declared. The
demographic shifts, when FRC SUPPORTS IR told Early Equity that while settlement involved Vodafone
assessing companies’ long- The Financial Reporting the Hong Kong audit firm recovering €67m that
term prospects,’ says PwC Council is calling for greater Clement Chan is authorised had been paid in tax on
in the firm’s latest point of use of integrated reporting. to audit companies that the royalties to the Irish
view. It adds: ‘Companies It made the call in its are incorporated outside Revenue service. It is thought
ACCOUNTING AND BUSINESS