Have your say Why the latest reforms to audit just won’t work; thanks for the hacks; and a baffling move by AAT. Plus our social media round-up

Reforms won’t work

I just don’t see how the diluted audit reforms unveiled by the government will prevent another Carillion. Even the Financial Reporting Council think it is a missed opportunity. The reforms also can’t “restore trust in big business”, it’s just not that simple.

One of the measures is to take away the bonuses of directors who lie about their finances, but again I just don’t see that ever happening.

I did, however, notice you didn’t have any reaction to the news from any of the Big 4. So I went in search of it! PwC gave some bland comment about “it’s good to see progress on a package of legislative reforms to improve standards”. PwC’s Hemione Hudson said the firm has long maintained that holistic reform will deliver the best outcome and ensure the UK remains a leading place to do business. I’m not sure how holistic the final reforms are.

The CEO at KPMG, Jon Holt, is a bit more bold – saying there are “some areas where we had hoped to see this package go further”. He felt that the decision not to include a UK version of Sarbanes-Oxley in primary legislation leaves corporate Britain with no clearly defined framework for internal controls, and risks a ‘pick’n’mix’ approach to reporting and measurement. He added: “It will result in investors and stakeholders receiving inconsistent information across different companies unless ARGA provides clear guidance going forward.”

Speaking in tongues

I loved James Perry’s hacks in your social media round-up last month. In particular Hack #3, which said you should speak out loud while studying instead of simply reading. It is something I have always done and got a lot of stick from anyone I was living with at the time! James said: “You will be surprised how much more you can remember when you’ve said it out loud.” Well, I’m not but it isn’t a study tip I’ve ever read before and makes me feel so much better!

The Editor says: We agree, and we will be highlighting some more in next month’s issue, so watch this space, as they say.

Sticking with the old

Why is the AAT still allowing people to register for the old AQ2016 assessments until the end of August? It means some PQs will be sitting a 2016 syllabus (which was old then) in September 2023 – seven years after it was introduced. Surely AAT should be encouraging students to sit the more relevant 2022 syllabus? It is great to almost see the end of the synpotic – but I see it still hiding there in level 2.

I noticed too that AAT is removing the annual subscription fee from 1 September. Instead, we’ll pay a one-off registration fee per qualification. You still, of course, have to pay for exams. I was wondering if this will have a dramatic effect on AAT finances. I expect that will be answers in the annual report.

The Editor says: We are meeting the new CEO Sarah Beale in the next month or so and will take these thoughts to her.

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ATX Exam Structure The structure of the ATX exam is predictable. Section A consists of 60 marks (one question worth 35 marks and one question worth 25 marks). Section B consists of two 20-mark questions.

Breakdown of questions Section A and B are broken down into multiple parts to help you break the question down into bite-size pieces. There are always up to four Professional marks available in Question 1.

Professional marks Up to four professional marks are always given in Question 1 for: a. Problem solving. b. Clarity of explanations and calculations. c. Effectiveness of communication. d. Presentation and style.

These are ‘easy’ marks when you are shown where they are. If you can achieve four out of 35 you are already 23% of the way to a pass (17.5 marks) in Question 1!

Core areas that have been regularly examined in the past The whole syllabus is in scope and examinable. However, when analysing past ATX exam questions, the following areas were commonly tested:

Section A • Corporate, Groups, Overseas and Consortia • Capital Taxes • Business Change Scenarios

Section B • Unincorporated Businesses • Family Company Issues • Personal Finance, Business Finance, and

Investments • Multi Tax personal (Including Overseas)

Technical areas to be comfortable with In terms of how you get ready for the core areas above, in my experience here are some of the syllabus areas that are commonly not understood well enough by students. • Domicile – IHT, CGT. Understanding the status of an individual and the implications of this status. • Deemed domicile – recent change in definition. Make sure you know the most up to date definition. • Residence and Domicile – knowing the residence rules and how the residence and domicile status of an individual impacts the

Remittance basis versus the Arising basis. • Corporation Tax Losses – knowing the new rules regarding carrying forward of losses and how these interact with the old rules. • Groups/Consortia – knowing the definitions and the implications of: • Loss Groups • Gains Groups • Consortia • VAT Groups • Substantial Shareholding Exemption – know the definition - This has changed recently. • Reliefs – IHT/CGT – know the different conditions and what qualifies for the reliefs.

You can score very quickly by knowing and discussing which relief(s) are available to improve an individual’s tax position.

Ten tips to pass ACCA ATX Here are few things to remember to be successful in ATX: i. Time management – 1.8 minutes per mark (or 1.95 minutes per mark if you include the reading/planning time) must be applied to every question. NEVER overrun on time!

Learn to stop when time is up on a part or question. Fresh marks are available in new questions, so you must keep moving. ii. Presentation – your script must be tidy and well presented. Use three to four-line paragraphs and headings. Ask yourself,

‘Would I present this to someone at work?’ iii. Plan – do a brief (5-10 minute) answer plan for EVERY question. Sometimes it can feel like this is a waste of time, but it is not and will improve the structure and content of your answer. iv. Quality over quantity – you must write good points, not lots of points. Do not just repeat yourself. v. Read the requirements first – understand what is being asked, not what you want to be asked. Follow the instructions. vi. Calculations v Narrative – explain what you are doing. Calculations back this up. vii. State conditions and rules that you are following – sometimes it feels ‘too obvious’ to state the basics. What does ‘Base Cost’ mean to someone who does not work in tax every day? Explain your thought processes. viii. Remember that 49+1 = A Pass! – you must ‘Play the Game’ (See below). ix. Practise questions and read the examiner’s comments – this is key to understanding where student’s struggle.