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dispatch

features

learning centre

06 GRAPHIC NEWS Hiring’s renewed optimism and risk threats08 NEWS ROUNDUP Global accounting and finance news

30 tHE bUSINESS Of RISk We take a look at the role of an internal auditor, and how to get into the internal audit area32 bEyOND NUmbERS Communication skills are vital for professional accountants, so we take a look at the ways to develop your speaking skills

10 3 tHINGS yOU SHOUlD kNOW AbOUt temping10 PROblEm SOlvED Restoring a reputation11 PER Setting and meeting performance objectives12 my WORkING lIfE Ebad Zaigham

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services directory Click here to find out about the services offered by ACCA Approved learning Partners and subscribers to the ACCA tuition Provider directory

14 fOOtbAll COmPEtItION Predict the winner of the 2010 fIfA World Cup

4 CONtENtS

brendan murtagh president

mark Gold deputy president

Dean WestcottVice president

Helen brandchief executive

editorial teamvictoria morganeditor

Jamie Amblereditorial consultant

Jackie Dollarart editor

Richard Goodingdesigner

Rhian lewiseditorial executive

www.accaglobal.comGlen Pattersononline editor

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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

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resources

foundations in accountancy ACCA’S NEW SUItE Of ENtRy-lEvEl AWARDS16 INtRODUCtION tO fIA 18 A flExIblE RANGE Of AWARDS20 lINkS tO tHE ACCA qUAlIfICAtION21 fOUNDAtIONS IN PROfESSIONAlISm22 CONvERSION ARRANGEmENtS24 kEy DAtES26 ADvANCED DIPlOmA IN ACCOUNtING AND bUSINESS28 SElf-CHECk mODUlES29 PRACtICAl ExPERIENCEStUDENt ACCOUNtANt tECHNICAl ARtIClE ARCHIvEvisit www.accaglobal.com/students/student_accountant/archive/

35 noticeboardESSENtIAl INfORmAtION AbOUt ACCA AND yOUR StUDIES ACCA Connect contact details, annual subscription and exam fees, exam timetables for December 2010 and June 2011, exam results and other important information

Please email studentaccountant@accaglobal.com with your feedback on this issue

what’s your story?Why did you want to become an accountant, and what do you hope to be in the future? Email your story to us at studentaccountant@accaglobal.com

Welcome to issue 13/2010 of StUDENt ACCOUNtANt

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risk threatsStrategic and business risks pose greater threats to share prices than operational, compliance, or financial ones, according to this year’s PwC state of the internal audit profession survey. But it shows many internal audit functions are still rooted in the past, relying on the methods of the earlier Sarbanes–Oxley period.

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Robert Half’s Q1 workplace survey shows there is renewed optimism about hiring in 2010. The survey, which was conducted between January and March this year, showed that companies are ramping up their hiring. The figures below are in local currencies.

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p01 iasb seeks investor inputThe International Accounting Standards Board’s (IASB’s) Standards Advisory Council has been reconstituted to increase investor involvement. It now includes representatives from eight leading investor organisations, with a new subgroup of these members. Three analysts sitting on the IASB – Patrick Finnegan, Patricia McConnell and Stephen Cooper – will publish updates on financial reporting for investors, called Investor Perspectives.

02 sustainability agreementThe International Federation of Accountants (IFAC) has signed a memorandum of understanding on sustainability with the Prince of Wales’s Accounting for Sustainability Project (A4S), supporting the global accountancy profession’s role in developing sustainable organisations. The memorandum specifies that sustainable reporting practices must be embedded. Measures to be adopted include the development of a community website for professional accountancy organisations to collaborate on sustainable practices; establishing an international integrated reporting committee to develop an improved reporting model; and incorporating accounting for sustainability within professional training and education.

03 deloitte acquires swiss firmDeloitte has continued its programme of strategic expansion with the acquisition of Swiss management consultancy Exsigno. The firm specialises in public sector and healthcare consultancy, employing more

access to financeA survey conducted by ACCA Russia and Finansoviy Director (Finance Director) magazine has revealed that access to finance for small and medium‑sized enterprises (SMEs) in Russia continues to be as difficult as it was two years ago. The research was carried out following claims made by Russia’s financial authorities in the second half of 2009 that the prospects for obtaining loans had improved significantly since the wake of the financial crisis in 2008. A total of 130 ACCA members, students or ACCA DipIFR qualification holders employed as either financial directors or specialists – 44% at firms with annual revenues below RUR500m – were polled. The survey findings revealed:¤ Most SMEs (55% of respondents) badly needed credits for their

working capital replenishment and 25% were seeking loans to cover their short‑term cash deficiency.

¤ Compared to 2008, all companies encountered more difficulty in obtaining working capital loans, investment credits or overdrafts. Larger companies, however, found their situation had improved.

¤ A total of 57% of respondents from SMEs and 48% from large enterprises believe that loans in the first half of 2009 became significantly less available.

¤ In the first six months of 2009, the volume of credits provided to SMEs in Russia fell by 36% compared to the same period in 2008. But in the third quarter of 2009, loans for SMEs had already shown a growth of 4%.

¤ Only 36% of respondents who applied for a short‑term bank loan in 2009 were able to receive financing in full.

¤ Almost 40% of SME respondents and 52% of respondents from large companies (over RUR500m annual revenue) believe that credits in 2010 will become more widely available.

Commenting on the findings, Dmitry Kouznetsov, ACCA Russia information specialist, said: ‘The results of the survey show that SMEs in Russia are in a disadvantageous position compared to large companies when it comes to bank loans. Through this research, ACCA Russia has tried to highlight the problems facing SMEs in Russia, which we hope will contribute to a greater accessibility of finance.’

8 dispatch

06 irish bank collapse reviewErnst & Young has been hired by Irish Nationwide to investigate events prior to the building society’s collapse. The society has been effectively nationalised as part of the Irish government’s rescue of the country’s financial system. A spokeswoman for Irish Nationwide said: ‘We can confirm that Ernst & Young is conducting some work for the Irish Nationwide Building Society, including undertaking specific investigations as and when required.’ A spokeswoman for Ireland’s Financial Regulator said it was aware of the appointment of E&Y, but ‘was not involved in their engagement’.

07 better advice neededIslamic banks should do more to support rich clients with wealth‑management and estate‑planning advice, according to a report from Bank Sarasin. Too often advice is given to wealthy clients that mimics conventional approaches, rather

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

student accountant issue13/2010 9

than being geared to Islamic principles, it warns. Islamic banks should also concentrate on ensuring the interests of clients and advisers are brought together. The report claims banks often generate income from transaction fees, without worrying whether they are serving clients’ interests in strengthening their financial position.

08 recovery gains momentumThe World Bank expects sub‑Saharan Africa to expand by 4.2% this year, following growth of 1.7% in 2009. Further accelerated growth is possible, believes the World Bank, if governments reform key areas of economic activity, including agriculture, energy, transport and financial services, and further deregulate economies. The World Bank will invest $1bn in sub‑Saharan Africa this year, down from $1.5bn last year.

than 150 staff. It will be integrated into Deloitte’s existing Swiss consulting practices, which will double in size and are expected to generate annual revenues of CHF85m.

04 ireland fails to complyThe European Court of Justice (ECJ) has declared that Ireland failed to comply with the Accounting Directive of 2006 by not fully implementing it within domestic legislation. The Directive required member states to harmonise high‑level statutory audit requirements. It also established the basis for mutual recognition of statutory auditors, a means of international cooperation for the regulation of auditors, fixed rules on professional ethics and independence, defined auditing standards, provided a basis for quality assurance and of systems for investigations, penalties and public supervision.

05 e&y opens africa centreErnst & Young has launched an Africa Business Centre, following publication of research by the firm that found 40% of companies were considering diversifying geographically and 18% were considering buying up weak competitors and expanding market share in new geographies. But, says E&Y, many global companies underestimate the challenge of Africa’s size, infrastructure underdevelopment, shortage of skilled resources and unreliable telephony and technology systems on their business models. The centre aims to assist making business in Africa more cost‑effective and provide a single point of contact for the firm for the whole continent.

greece crisis highlights tax avoidanceTax evasion of €31bn a year is the root cause of Greece’s fiscal crisis, claims prime minister George Papandreou (left). Greece’s tax revenues are 4.7% of GDP, compared with an EU average of 8%, with the difference reflecting a culture of tax refusal that is endemic. In the period of economic growth – from 2000 to 2007 – GDP rose by 29%, yet tax receipts fell by 2.5%. Some 95% of residents claim to earn less than €30,000pa. Tax increases designed to help plug the deficit have been disregarded by EU officials as unlikely to be collected.

fast facts€111bn – Support package for Greece

€295bn – Value of Greek government

€600bn – Value of EU government bonds due for issue in 2010