Page power

For years, exponents of speed‑reading techniques have sought to persuade us that our ability to absorb and retain meaningful information is limited only by our own imagination – and that it’s our misconceptions about the brain’s capacity to take in vast amounts of data that stop us from learning how to read more effectively. ‘We stop refining our reading skills at a very young age,’ says Tony Buzan, one of the world’s leading authorities on innovative learning techniques. ‘Once children are taught how to read – for instance, using traditional phonic or look-say methods – they’re considered to be literate; after that, it’s simply a case of expanding vocabulary and comprehension. But this is missing a critical point – it’s like learning to walk without then going onto practise running or dancing.’

Buzan believes that we all have the ability to double or even triple our reading speeds – and that this ability need not diminish with age; in other words, it’s not too late to learn. So why do so many people regard speed-reading as a bit of a cop-out?

A common assumption is that by reading faster, students are more likely to miss key information. Rowan Hoskyns-Abrahall, co-founder of Solve IT With Science, which developed Really Easy Reader software, disagrees: ‘It’s just not the case,’ she says. ‘It’s true that you can learn to skim-read faster – and this is a useful skill for reviewing documents and books to see what they contain. But if you intend to absorb the contents properly, then you’ll need to read them properly. More importantly, when you’re properly focused and can drop  distracting thoughts, your concentration improves, so your comprehension increases. This is where truly faster reading can save a great deal of time and add value.’

Speed reading is one of the most effective ways of, in a sense, upgrading your brain-power, while unlocking your innate creativity, says Buzan: ‘And it’s far  from a quick fix – learn how to speed-read effectively and it can transform how you learn and work, with lasting results.’

Overcoming belief systems
Hoskyns-Abrahall adds that belief is a common barrier to many personal achievements, not just attaining faster, more effective reading speeds. ‘Most people have been reading at the same speed for years without any change – so they naturally find it hard to believe that it’s possible to read faster to the same effect, never mind even better results,’ she says.’ They’re therefore surprised when their reading skill improves dramatically and instantly. But it gives them great confidence.’

What advocates of speed reading say is that people must overcome ‘sub-vocalisation’ – the human trait where we hear the sound of our own voice as we read. Really Easy Reading’s software uses ‘rapid serial visual presentation’ (RSVP), which eliminates this trait but matches the average reader’s true ability to absorb information. And by utilising RSVP, reading speeds might typically multiply to over 600 words a minute – an increase of about 300%.’

‘Once readers have used easy reading techniques, they have to admit that they can seriously improve their reading skills,’ says Hoskyns-Abrahall. ‘Their pre-conceptions were integral to – and indeed, conflicted with – their previous educational experiences and perceptions.

Speed up your studies
The most popular use of speed-reading techniques amongst students is for revision. No matter how well-structured or bite-sized the chapters and sections, no matter how memorable the examples and box panels, there may be an enormous amount of ground to cover.

‘Revision is based on memory retention,’ says Hoskyns-Abrahall, who references the ‘Ebbinghaus Curve of Forgetting’. This theory holds that there are a certain number of times it’s necessary to revise a subject in order to commit it to memory.

‘Essentially, students would read the information, revising it, say, five times, with longer lengths between each reading,’ she continues. ‘In other words, they’d read the material now, read it again in an hour, then a day, a week, a month, six months and so on. According to the theory, this should result in 80% retention. So, obviously, as a crucial element of revision is the length of time it takes to re-read the material, speed-reading provides a great advantage.’

Buzan’s speed-reading techniques are highly focused on recall – he says it’s not enough to store information away in the brain; it’s the ability to retrieve key facts and figures when you need them that makes the key difference.

‘If you learn to speed-read properly, you will achieve far more than you can imagine,’ he says. ‘You’ll be able to communicate your knowledge when commanded to, in a way that’s relevant to the needs of the user. That’s why speed‑reading includes an essential element of preparation – you can’t simply steam in and absorb a whole chapter without first previewing the material, taking in factors such as structure, headings, sub-headings and key words – as well as applying your own knowledge of what you, as the reader, are looking for, and what the author is striving to impart. Speed-reading is not an abdication of the brain.’

At the office
But it’s not just for passing exams that speed-reading skills can be deployed profitably. In the knowledge economy, office workers must absorb, retain and recall enormous quantities of information.

‘Sifting through the large daily amounts of emails, reports and web pages really brings the need for speed-reading to the fore,’ says Hoskyns-Abrahall. ‘However, it’s not just about reading as such. Other knowledge techniques can help with managing and channelling information quickly and effectively – such as making fast notes from material, and then structuring documents for presentation or publication. Any speed-reading products worth their salt must also include elements that boost these complementary techniques.’

Looking forward
Speed reading, or simply reading faster, is likely to become more integral in business – and in society, where ‘knowledge is power’, and where the ability to manipulate information is a pre-requisite in today’s (and tomorrow’s) working environment.

‘The ability to save time, and compress both learning and knowledge management into shorter periods, will allow less stressed but more informed and productive lives,’ says Hoskyns-Abrahall.

‘In fact, in the same way that computing advances have allowed more to be done in the available time, speed reading will add further to this. Immediacy of information will become king!’

Work / study balance

Work / study balance: planning your study time

Studying while holding down a job is a whole new ball game, requiring a considerable amount of planning, including around factors you might not have much control over – such as workload pressure or the demands of your boss. Our advice - plan ahead:

1. Give yourself a break – accept that achieving the perfect balance between work, study and your personal life is a ‘big ask’; that doesn’t mean you shouldn’t try, but don’t beat yourself up about occasionally having to make compromises.
2. Develop the habit of good habits – no-one wants to be stuck in a rut, but having a structure that allows you to stay disciplined while allowing a degree of reasonable flexibility will help you get into the groove of your studies without feeling straitjacketed.
3. Identify when you’re at your most alert – optimise your studies by keeping this time free for your textbooks and homework; if that means finding a quiet room in the office during your lunch hour, or before or after work, so be it – and your diligence and dedication will be on display to the powers-that-be.
4. Maintain a study diary – and add your study schedule into your office diary; you’ll be far less likely to break the commitment you’ve made yourself if your sessions are written down in black and white.
5. Less is more – a two or three-hour study session might seem like a good idea when you’re bursting with energy  and enthusiasm, but loses its allure at the end of a long, gruelling day at work; by all means put aside evenings to study but take plenty of breaks, especially if you’re reading reams of text on a screen.
6. Just five minutes – it’s easy to convince yourself there’s little point in studying for much less than 15 or 30  minutes; but short bursts can pay huge dividends; try writing key points in colours on small filing cards to revise on  public transport or when waiting to meet friends.
7. Take physical breaks – crouching over a book or laptop and concentrating on taking in all you read will take a physical as well as mental toll; stretch, take short walks; even try breathing exercises to re-energise yourself and ensure you don’t give up because of discomfort.
8. Seize the day – everyone’s different but many of us are better at assimilating complex information during the daytime.
9. Brain food, but at the right time – certain foods boost our brain power and wellbeing, so ensure you have a balanced diet that includes protein-rich staples (such as fish, broccoli, nuts, dairy products) and sources of serotonin (such as pasta, starchy vegetables and cereals) but be careful not to load up immediately prior to a study session; let your body’s digestive system do its work before you settle down.
10. Don’t head to bed on your studies – you need quality sleep to be an effective student (and be fit for the office); allow yourself time to relax between studying and sleeping; read or do something to take your mind off the subject.

25 Corporate collapses – and the lessons learnt

There have been some high-profile corporate failures over the past year, and the evidence suggests that the bloodbath isn’t over. We take a look at 25 more prominent cases to draw salient lessons for every business.

It’s getting ugly out there. Credit agency Dun & Bradstreet believes one in nine companies could hit the wall this year, although some accountants and restructuring experts are privately worried that 30% of their clients are in danger of collapse.

In the last 12 months, around 8898 companies have been placed in administration, liquidation or receivership. But what’s most worrying is the number of big brands that have collapsed, including household names such as ABC Learning, Kleins, Strathfield and Midas.

Greg Hayes, director of accounting firm Hayes Knight and SME expert, says the collapse of iconic brands is a troubling sign. Not only does it indicate the wider economy is heading for a prolonged downturn, but the collapse of big-name companies can often have devastating knock-on effects.

Hayes gives the example of ABC Learning: “ABC over the past three or four years were growing at such a phenomenal rate. If you were a small or medium business that was supplying ABC, this has this huge multiplier effect.”

While SMEs are always warned not to become too reliant on any one customer, that sort of growth is hard to resist.

“Typically very few small businesses, if they had the tiger by the tail, would let it go,” Hayes says. “But if your ABC falls over, then the tiger in the tail can turn around and bite you. Then it’s a question of ‘can I adjust my cost base quickly enough to save my business?”

But you don’t need to be the supplier of a collapsed brand name company to run into problems.

Hayes gives the example of the collapse of Storm Financial, another group that had grown at a very fast rate and achieved large market coverage in a short space of time. The fallout from Storm’s collapse is being felt throughout the financial planning space.

“All of a sudden across the whole sector, people who are absolutely unrelated to this business are picking up some of those legacy issues,” Hayes says. “The flow-on impact is that a lot of people are saying to their financial adviser, ‘are you OK?’.

“I think we are in a marketplace where we are going to see a lot more of that ripple effect.”

To help you avoid the traps that cause companies to fall over, we’ve prepared a list of the 25 most prominent corporate collapses in the past 12 months. As the year goes on, the lessons from these disasters are likely to become even more important.

ABC Learning Centres

Date: November 2008
Sector: Childcare
Lesson: ABC Learning founder Eddy Groves had a pretty good little business going in Australia – profitable, fast growing and underpinned by government childcare subsidies. But his forays into the US and British markets distracted Groves from the day-to-day running of the Australian business, and without his scrutiny the low-margin operations started losing money. Eddy’s ambition of creating a global childcare giant was his undoing – had he stayed focused, ABC’s fate could have been very different.

Allco Finance Group

Date: November 2008
Sector: Financial services
Lesson: Like fellow fallen finance groups such as MFS, Allco’s problem was simple – too much debt. Add this to a business model that was insanely complex and you have a recipe for disaster.

Apollo Life Sciences

Date: October 2008
Sector: Biotechnology
Lesson: You have to feel sorry for companies in the biotechnology sector. It takes years of research, product development and trials for these companies to turn a profit, which means they must continuously raise cash to stay alive. The funding freeze has hit the sector particularly hard – no-one wants to be involved in companies with long-term risks. As always, cash is king.

Asset Loan Group

Date: September 2008
Sector: Financial services, property
Lesson: Another company that seemed to believe the good times would last forever. When the credit crisis hit, this small Queensland financier-turned-property-developer began frantically trying to sell assets to repay debt. But as the property market went into freefall, getting a sale across the line took too long, and Asset Loan Group went under. As administrator John Greig said, timing was the company’s biggest problem in the end.

Australian Discount Retail (Crazy Clark’s, Go-Lo, Sam’s Warehouse)

Date: January 2009
Sector: Retail
Lesson: The collapse of Australian Discount Retail’s three cheap-and-cheerful chains was a shock – discount stores generally do well in a recession. But the company’s private equity owners had loaded the company with $201 million of debt, giving ADR little room to move when retail spending slowed. As always, debt kills.

Bill Express

Date: July 2008
Sector: Financial services
Lesson: The collapse of electronics payment provider Bill Express hit the company’s customers – mainly newsagents and small telecommunications providers – very hard. In hindsight, the company’s financials were clearly a mess – despite reporting a profit in every year it was listed (since 2004) the company managed to rack up debts of $180 million by the time it collapsed.

Beechwood

Date: May 2008
Sector: Construction
Lesson: The collapse of New South Wales’s largest homebuilder sent shockwaves through the property sector. The company was squeezed from three angles; demand dried up as the economy tanked, the cost of contractors and tradesman continued to escalate, and the credit markets froze. But Beechwood and the other collapsed home builders were guilty of undercutting each other and destroying margins in the process.

CFK Childcare

Date: November 2008
Sector: Childcare
Lesson: The collapse of ABC Learning sealed CFK’s fate – its attempts to sell its assets became impossible when ABC went under. The lesson from the childcare sector collapses is that apparently cottage industries such as childcare (which had, until 10 years ago, been largely dominated by community groups and single operators) are not always as easy to corporatise as it may appear.

Commander Communications

Date: August 2008
Sector: Telecommunications
Lesson: Technology experts say Commander Communications treated its customers poorly, overcharging them for relatively old technology solutions. That was OK when the company had a strong position in the SME market, but as competition increased, customers turned away and revenue fell.

Destra

Date: November 2008
Sector: Digital media
Lesson: Digital media company Destra was always difficult to describe, mainly because it had so many different elements, from digital music businesses through to publishing through to marketing. The speed at which these diverse businesses were cobbled together proved to be the company’s undoing – Destra bought separate companies in the three years before its collapse, with most of the acquisitions funded by debt. In the end it was a case of too much, too fast.

EBS International

Date: July 2008
Sector: Online retail
Lesson: EBS International was better known as EBusiness Supplies and became one of the biggest traders on eBay until its collapse last year. The company’s grow-at-all-costs mentality seemed to have been its undoing – it kept selling more and more goods even as its problems with suppliers and delivery mounted, further compounding its problems and eventually leading to its demise.

Elderslie Finance

Date: July 2008
Sector: Financial services
Lesson: Former Liberal leader John Hewson resigned as chairman of Elderslie just weeks before the company was placed in receivership. The company’s problem was simple – it ran out of cash as investment markets tumbled and fee revenue shrunk. Another example of a business model built for good times but unable to weather the downturn.

Environinvest

Date: September 2008
Sector: Agribusiness
Lesson: Environinvest, which was founded by former Victorian state government minister Roger Prescott, was an unlisted public company that operated agricultural investment schemes, including tree plantations and cattle projects. While the company’s debt and poor cashflow forced it into administration, there were clear issues with management – in correspondence with the company, auditor David Nairn of HLB Mann Judd noted “ambiguous transactions with little documentation” and questioned the timeliness of financial reporting.

EzyDVD

Date: December 2009
Sector: Retail
Lesson: EzyDVD is one of those rare birds – a collapsed company that actually found a new buyer, the Franchise Entertainment Group. Poor management seems to be the big problem here. The company reportedly lost $3 million in its last few years of operation and founder Jim Zavos went through two CEOs in quick succession in 2008. Now that the company’s unprofitable stores, warehouse and headquarters have been shut, the new owner should be able to turn the business around.

Freightlink

Date: November 2008
Sector: Infrastructure
Lesson: The collapse of Freightlink, owners of the Adelaide-to-Darwin railway, surprised no-one in the transport and logistics sector. The sheer cost of building the line meant the company had to take on huge borrowings, but revenue never lived up to the company’s over-inflated expectations. Freightlink was doomed to fail.

GMC

Date: December 2008
Sector: Manufacturing
Lesson: The collapse of power tool maker Global Machinery Company was a shock, but the reason was clear – Bunnings. When the hardware giant took GMC’s products of its shelves in early 2008, GMC’s sales plummeted and its debt load became difficult to manage. The lesson? If you can’t get on the shelves of the dominant retailer in your sector, you are in trouble.

Herringbone

Date: December 2008
Sector: Retail
Lesson: Luxury shirt brand Herringbone revelled in its image as outfitter to the financial services whiz kids of Martin Place and Collins Street. But as the financial crisis swept through the office towers of Australia, Herringbone’s sales fell by 23% in two months. Luxury goods always struggle in a recession, but Herringbone’s position was made all the more precarious by its debt levels.

Kleins

Sector: Retail
Date: June 2008
Lesson: As well as the usual problems of mismanagement and too much debt, low-cost jewellery retailer Kleins was guilty of one of retail’s biggest sins – failing to keep up with its consumers. The arrival of costume jewellery chain Diva should have forced Kleins to freshen its product range and chase a younger consumer, but the company simply didn’t move quickly enough. Sales dried up, stock built up, and eventually the doors closed.

Lift Capital

Date: May 2008
Sector: Financial services
Lesson: It was no coincidence that stockbroker and margin lender Lift Capital collapsed shortly after Opes Prime. While the company was tottering because of market conditions, the ripple effects from Opes caused a run by clients, almost immediately condemning the company to administration. The lesson is clear – when one of your competitors goes down, be prepared to feel referred pain.

MFS (aka Octaviar)

Date: September 2008
Sector: Financial services, property, tourism
Lesson: It took MFS the best part of year to die, but the company’s fate was sealed in a few short weeks at the start of 2008 when a billion dollar pile of debt crushed the company as the credit crisis struck. Debt is bad enough, but when your entire business model is built around the idea of borrowing money to buy over-priced assets, you will almost always hit trouble when the business cycle turns.

Midas

Date: January 2009
Sector: Automotive retail
Lesson: Midas was put in administration early this year by its high-profiled shareholders, including former Coles boss John Fletcher, although the administrator is hopeful of finding a buyer. Midas’s ill-fated move into LPG conversions (which were suddenly less attractive because of falling petrol prices) didn’t help its cause, but its incredibly acrimonious relationships with franchisees was also a constant distraction for management.

Opes Prime

Date: April 2008
Sector: Financial services
Lesson: In hindsight, the collapse of margin lender Opes Prime was the moment the global financial crisis hit Australian investors. While the Opes mess will probably take years to sort out, at the heart of its problems was poor management. When a key client’s debts exploded, the company appears to have been unwilling or unable to act. But in the end, this brought the entire company – and about 1400 clients – down too.

Raptis Group

Date: February 2009
Sector: Property
Lesson: Jim Raptis was all but wiped in the property crash of the late 1980s and early 1990s, but the spectacular boom in Gold Coast property during the last decade allowed him to rebuild. Now, it’s all gone again. Not surprisingly, the problem was the same – Raptis Group was so heavily geared that when the apartment sales dried up, the company was simply unable to pay its financiers and subcontractors.

Storm Financial

Date: January 2009
Sector: Financial services
Lesson: The collapse of financial planning group Storm Financial has been covered in depth, but the key problem was the company’s inability to build a business that could last through a business cycle. The company’s model – and its advice to clients – was based around the bull market, and when financial markets crashed Storm was unable to cut its cost quicker than its revenue was falling. A business must be strong enough to make it through good times and bad.

Strathfield

Date: January 2009
Sector: Retail
Lesson: The management of mobile phone and car audio retailer Strathfield has been a problem for the last few years, with directors, executives and shareholders coming and going at an alarming rate. The revolving management door has not helped the company’s profitability and a disastrous Christmas trading proved to be the final straw. As any good manager knows, stability is crucial to business success.

Barclays sells $12bn of risky assets

• Barclays spins off troublesome loans to Cayman Islands fund

• Former Barclays Capital staff will manage the toxic assets

Two top bankers are leaving Barclays to manage a fund in the Cayman Islands that is buying $12.3bn (£7.47bn) of the bank's most troublesome assets.

The deal was criticised by analysts who questioned its complexity, but it will enable the British bank to report a more stable performance in future. Throughout the financial crisis, Barclays has been forced to defend the way it was pricing and accounting for these troublesome assets and is now hoping to smooth out the effect of the investments on its profits.

The assets will not actually be removed from the bank's balance sheet for regulatory purposes but the accounting treatment will be changed, allowing Barclays to avoid taking further big hits by no longer needing to price its assets at current market values through the convention known as "mark to market".

Under the deal terms , Stephen King and Michael Keeley will set up C12 Capital Management which, while based in New York, will manage the new Cayman Islands-registered fund Protium and buy the assets from Barclays.

The pair are leading a team of 45 traders who are leaving Barclays Capital, the investment banking arm of the bank, to join C12. It will receive an annual management fee of $40m from the bank to look after the loans, which have turned toxic since the credit crunch.

The complexity of the transaction surprised analysts at a time when the regulators had been calling for more clarity in the structure on banks. Others expressed astonishment that the Financial Services Authority had sanctioned such a deal.

Protium will be funded by $450m of working capital provided by two major investors in the US and other unnamed partners, as well as by a $12.6bn 10-year loan from Barclays itself. Analysts believe that the undisclosed backers of Protium should generate a lucrative return on their investment in the fund.

There was a sceptical response from analysts to a conference call with Barclays's finance director, Chris Lucas, who admitted that the bank might need to hold more capital as a result of the deal which in itself would not create a profit or a loss for the bank.

Credit Suisse analysts described the transaction as "a little strange" as Barclays appears to be giving up any benefit from the value of the assets. Ian Gordon, analyst at Exane BNP Paribas, said: "It's being presented as providing a more stable, certain outturn, but you could argue they are giving away the upside but not really being sheltered from much of the downside."

The $12.3bn of assets being sold to Protium forced Barclays to record a £1bn loss in 2008 and include residential mortgage assets, collateralised debt obligations and other complex financial instruments at the heart of the credit crunch.

Analysts had predicted the bank would incur further writedowns on the loans, two-thirds of which are insured by monoline insurers, which became well known during the credit crisis for having provided insurance to some of the complex instruments that are now under water.

The bank will remain exposed to the cash flow on the assets through the $12.3bn 10-year loan from which Barclays expects to make $3.9bn of profit on interest payments. The loan could become impaired if the cash flow of the assets is affected by any falls in value.

Lucas said: "We are not seeking through the transaction to effect a change to our underlying credit-risk profile. But we are restructuring a significant tranche of credit market exposures in a way that we expect will secure more stable risk-adjusted returns for shareholders over time. We also bring in investors with an appetite for the cash flows arising from the assets."

"For Barclays, this represents a good opportunity to create greater predictability of income and economic capital utilisation," Lucas said.

Barclays shares closed at 380p, up 3%.

Make accountants accountable

It is clear from the EU's G20 preparations that its neoliberal ideology perpetuates respect for those who oppose regulation

At a time when numerous EU figures are descending on Dublin as part of efforts to browbeat Irish voters into accepting the Lisbon treaty, one man has been conspicuous by his absence.

Charlie McCreevy, Ireland's representative in the European commission, has barely featured in the media coverage of the campaign ahead of the referendum on 2 October. His apparent willingness to be muzzled could be explained by how he unintentionally helped persuade his compatriots to reject the same treaty last year by admitting that he hadn't bothered to read the document.

McCreevy, whose portfolio covers financial services, has not displayed the same reticence about the global economy. Last weekend, he made the ludicrous suggestion that we shouldn't blame the financial crisis on unregulated capitalism but on the "failure of the education system which rarely encompasses sufficient emphasis on the life skills needed to understand, manage and mitigate personal financial risk".

If McCreevy really thinks that ordinary people should be blamed for Wall Street's woes because they haven't figured out how derivatives work, then it is fortunate that his stint as commissioner will soon come to an end. Sadly, the neoliberal ideology that he espouses (to extremes) won't be leaving Brussels with him, judging by the EU's preparations for the G20 summit in Pittsburgh.

Wrapping up an earlier G20 pow-wow in April this year, Gordon Brown announced the demise of the "Washington consensus", under which key international players had foisted market fundamentalism on the poor. Yet at the beginning of this month, the EU's finance ministers facilitated at least a partial return to the days when the west meddled in the economic and political affairs of Latin America with the sole intention of protecting the profits of multinational firms.

On 1 September, the International Monetary Fund allocated $150m to Honduras, despite the fact that the country's democratically elected government had been toppled in a rightwing coup. Rather than protesting at how the IMF was conferring legitimacy on an illegally installed regime, the EU agreed one day later to endow the fund with $178bn. (It took the IMF another week before it announced that the money wouldn't be released to Tegucigalpa until the fund had decided if it could recognise the new regime).

In his latest stunt, Nicolas Sarkozy has pledged to walk away from the Pittsburgh summit if he doesn't secure an agreement on limiting bankers' salaries. This threat will probably come to nothing, just as happened with a similar vow by the French president to leave London if the previous G20 summit didn't go his way. Of course, he's right to insist that the bonus culture is scrapped but this is only one of a range of measures that the EU should be seeking.

Sarkozy's finance minister, Christine Lagarde, is perturbed by a new blueprint for changing the way that assets held by banks are valued that has been drafted with the Pittsburgh summit in mind. Her anger would perhaps be better directed not at the detail of the proposal but at the body behind it: the International Accounting Standards Board. The IASB is a private firm dominated by the accounting industry, banks and multinational companies. Although it was only established in 2001, it sets the standards that listed companies in more than 100 countries must follow. Its activities may sound arcane, yet without clear accounting standards none of us can have any idea what major firms, some of which are more powerful than governments, are up to.

Lagarde's reservations notwithstanding, the EU has been generally supportive of the IASB. Am I the only one struggling to explain why such an untrustworthy and unaccountable group is treated with respect not only by governments but also by some anti-poverty campaigners? Christian Aid and a few like-minded organisations are calling for the G20 to demand that the IASB co-operates in efforts to secure a new system whereby large companies have to report how much tax they pay in each country where they operate.

I fully support the principle of country-by-country reporting and applaud the fight against tax swindling, which, according to Christian Aid, could be depriving poor countries of $160bn per year. But how can we have any confidence in a body like the IASB, stuffed with men (its 15-member board has only one woman) with a deep-rooted aversion to regulation?

In December last year, Prem Sikka, an accounting professor at the university of Essex, wrote: "Accounting has done grievous harm to too many innocent citizens and is central to the current financial crisis. Rather than allowing private interests to make public policies, accounting rules should be made by an independent body representing a plurality of interests."

If the standards of the IASB have been central to causing the crisis, why on earth is it still operating?

'We should be loving (Business) Angels instead', says ACCA small business committee

More support for equity finance and business angels needed

Equity, not debt, holds the key to financing the future of the UK’s small business sector, according to ACCA’s (the Association of Chartered Certified Accountants) Small and Medium Sized Enterprises (SME) Committee.

In the latest of its quarterly policy briefings, called “Improving SME access to equity finance”, ACCA’s Committee believes that the economic recovery could prove to be business angel's shining moment.

Professor Robin Jarvis, Head of SME Affairs at ACCA, explains: "For years, individual equity investors have been out of the limelight, first hit by the dotcoms bust, then crowded-out by easy credit and now discouraged by the economic climate."

Like the SME Committee, the Government knows that the UK will now have to build new industries without the benefit of easy credit. The Department for Business, Innovation and Skills (BIS) recently finished collecting evidence for the Rowlands review of growth finance, which was launched in June. But the SME Committee says this is unlikely to go far enough.

Professor Robin Jarvis adds:

“The Rowlands Review is looking into ways of supporting established, cash-positive businesses with solid growth potential. There may well be a case for that, but that’s not the kind of businesses that new, innovative industries are built on.”

Instead, the Committee has called for more support for equity finance in general and particularly business angels – the wealthy investors and business mentors popularised by Dragons’ Den. The Committee’s latest paper suggests four priority areas where the government and accountants can make a difference:

• Tax incentives. The Government’s Enterprise Investment Scheme (EIS) is helpful, but still limited in its potential. The Committee cites France’s solidarity tax exemption as an example of providing tax incentives without falling foul of EU State Aid rules.

• Support for networks. – Networks can help business angels identify investment-ready businesses and leverage the experience and capital of their peers. Subsidising the gate-keeping function of angels is one easy way for Government to make a real difference without spending much.

• Developing investment-readiness – Angel investors are constrained by a lack of opportunities rather than by a lack of funds – the Committee noted that accountants need to build demand for equity finance by helping SMEs understand the benefits of equity and signal their value to potential investors.

• Developing exit routes. – Equity investors don’t make any money from their investment unless a business is sold or goes public. Exits could become more attractive and more numerous if businesses were able to achieve fairer valuations (for instance, by better valuing intangible assets) and investors could be lured with lower levels of capital gains tax.

The Committee, however acknowledges that interventions into the angel investment market are no simple matter. Professor Jarvis adds: “The Committee is concerned that the government does not have enough information on Business Angels to inform policy in this area, so we’re working with BIS to correct that. Our members facilitate a great deal of this type of investment so if anyone knows how that market works, they do.”

Courtesy By ACCA

Copenhagen climate change summit: ACCA’s eight steps to success

Global economic instability could lead to a decline in direct environmental investments and reduce the rigour of future climate change legislation, asserts ACCA (the Association of Chartered Certified Accountants) today in a position paper about the UN Climate Change Conference 2009 - called COP 15.

The report from the global accoutancy body - which has championed sustainability issues in business since 1990 - offers eight recommendations for governments, policy makers and business ahead of the COP15 meeting in December 2009.

Mr Arif Masud Mirza, Head of ACCA Pakistan, says: “The dual challenges of climate and economy have led to a unique opportunity to re-build the global markets with systems sympathetic to climate change. And the trillion dollar bailout of the banking sector proves that governments and businesses around the world can work together quickly to avert disaster.”

ACCA’s report also recommends that governments should respond to the economic conditions by implementing measures that will encourage environmental investments and a more sustainable approach from business.

Mr Mirza adds: “Business has a massive role to play here in how they communicate their commitment to a low carbon economy. ACCA champions the extension of corporate reporting to include the social and environmental aspects of a business and has launched awards for sustainability reporting in Australia and New Zealand, Hong Kong, Malaysia, Pakistan, Singapore, South Africa, Sri Lanka, and the US and Canada.” ACCA is concerned that without a co-ordinated strategy to tackle the financial crisis in a sustainable way, the possibility still exists that the stimulus and recovery packages may lock us into the root causes of climate change. If we follow the model of the banking bailout, we can achieve a sustainable, low carbon, climate resilient future.

Courtesy By ACCA

Signs of recovery based on fragile evidence, says ACCA survey

Claims that the world’s economy is recovering is based on fragile evidence, according to the latest Global Economic Conditions Survey by ACCA (the Association of Chartered Certified Accountants).It has repeated its warning that world economic leaders should guard against complacency - and not confuse less panic over the crisis with strong evidence that the recession is over everywhere.ACCA’s third quarter survey of 1,200 finance professionals in 92 countries has shown that while more finance professionals now believe the downturn has ‘bottomed out’ they also believe that a reliable recovery is still unlikely to return before late 2010 - more than a year away. Although business confidence continued to recover in the third quarter of 2009, those who saw improvements in conditions (31%) were still outnumbered by those who had lost confidence (33%). While increasing percentage of members (34%) now believe that global economic conditions are either about to improve or already improving, the emerging consensus, expressed by 44% of respondents, appears to be that current conditions mark the bottom of the downturn and will persist for some time. Nearly 40% are reporting that their organisations’ income is unlikely to change over the next 3 months, with an equal number anticipating further losses of income, while only 22% have seen their prospects improve. The survey also shows that as business incomes continued to decrease in the third quarter of 2009, there was a rise in late payment as well as supplier and customer bankruptcies. Investment in staff fell at an accelerated rate in the third quarter and investment in capital projects, which had previously shown signs of stabilising, seems to be weakening further. The figures also revealed dramatic differences in how finance professionals thought government would react to the situation, with 77% of respondents in Africa and 60% in the Asia-Pacific region expecting increases in public spending, while 68% of Western European respondents expecting spending cuts. Western Europe was the only region in which public spending was, on balance, expected to fall over the next five years.

Small business and the financial crisis

 

Small and medium sized enterprises (SMEs) are an important part of developed and developing economies as they play a key role in creating jobs, innovation, supporting stability, macroeconomic growth and act as a growth engine. In OECD countries, SMEs represent 95% of all enterprises, accounting for two-thirds of employment and being the main source of new job creation (1). As such, SMEs in many countries around the world are the major source of economic recovery and assist the return to sustainable growth.

SMEs are particularly badly affected in times of financial crisis, due to the reduced demand for products and services, sudden rises in the prices of raw materials, energy and food, liquidity and credit related problems, variations in exchange rates, inflation, and still are subject to a relatively high cost of capital. Access to finance continues to be one of the most significant challenges for the creation, survival and growth of SMEs, especially those that are innovative. Start-ups in particular are most vulnerable, often lacking the resources to survive the downturn.

In addition, the uneven application of regulatory and legal frameworks that have primarily been designed for large-listed companies leads to market failure and requires governments to intervene to support these important contributors to the economic well-being of countries. SMEs will require effective short-term measures to address these financial and other aspects that are a part of their business environment. It is critical in these circumstances that regulators think small first. 

SMEs need more urgency on measures to help restore confidence, on issues such as late payments, access to finance and employment support measures. These will need, however, to be linked to structural improvements in the SME financial environment over the longer term in order to be successful and to restore growth.

The current economic context is a unique opportunity for governments around the world to find more far-reaching ways to collaborate and partner with business, civil society as well as between governments, to pool efforts to build infrastructure, build social capital and encourage institutional changes and help improve the operating environment for business.

Governments need to ensure that the SME interests are adequately represented within government. Separate agencies, with strong influence and links within government, that deal with small business policy and manage government intervention relating to business support may be needed in order to ensure adequately focused policy and a clear point of contact. Ensuring that small businesses have a strong voice within government is crucial to ensuring a small business-friendly environment. Regulation, for example, is a key area for creating the right environment both for entrepreneurship and for business to prosper. World Bank research has found that countries with burdensome regulation have larger informal sectors, higher unemployment, and slower economic growth (2).

Working collaboratively, governments can do more to support host governments in developing and emerging markets with the development of enabling frameworks that encourage responsible private sector investment. For example, by supporting efforts to put in place effective regulatory and voluntary standards; legal frameworks; funding and investment vehicles; policy consultation mechanisms; accountability structures; and civil society networks.

Governments can also support the creation and strengthening of local business associations, chambers of commerce – which are often weak or non-existent – as well as essential ‘institutional infrastructure’ (linkage programmes, skills/training programmes) for SME development.

Although, much of the emphasis is on governments to act 'locally' to the problems confronted by SMEs during this crisis, there are important issues that have a global dimension and need to be addressed to ensure the sustainability and growth of the SME community. For example, the level of SME cross-border activity is increasing year on year through the development of technology and communication.

It is important that SMEs are protected against external events that are out of their control such as fluctuations in exchange rates. SMEs around the world need special attention and support in the current financial crisis.

Green taxation is politically essential not just politically correct

 

ACCA paper advises on green tax policies -

Using environmental and green taxation to boost falling tax revenues needs careful planning by government and policy makers says ACCA (the Association of Chartered Certified Accountants) today as it publishes a position paper called Green taxation in a recession.

ACCA warns governments that carbon taxes will not be the panacea national governments are probably expecting.

Chas Roy-Chowdhury, global head of taxation at ACCA, says:

“We’re not advocating tax hypothecation – where a tax is explicitly raised to fund the development of a specific service. Green taxes need to be transparent and unambiguous so the public and business understand what benefits are going to result for the potential pain caused.”

“Public trust in green tax systems is vital; government and policy experts need to strike a balance between the need to raise revenues and the environmental objective underpinning the policy. The trouble is, they’ll hurt.”

Green taxation in a recession offers five clear recommendations:

1. Ensure green taxes are global, with global co-ordination of policies and ideas.

2. Design and implement green taxation policies carefully – and then measure and analyse the results.

3. Consult widely with electorate / business before introducing taxes so they understand what is happening and why.

4. Raise awareness of the need for this type of taxation - explain the benefits.

5. Make green taxes explicit and transparent, so they are understandable.

ACCA also asserts that global synchronisation in green taxation policy is a necessity. Chas Roy-Chowdhury says: “If environmental taxation lacks international co-ordination, it will not impact global pollution levels, as companies will simply relocate and move the pollution problem with them. If measures are implemented unevenly, in one country and not another, it leads to a loss of international competitiveness. Scrutiny of business’s environmental performance will only increase as we move to a low carbon economy. But business needs policies that are transparent, clear, credible and certain in order to achieve carbon reduction goals.”

Chas Roy-Chowdhury says: “Governments must use tax policy as an instrument of positive change - and that's the challenge for the future.”

Green taxation in a recession can be found at this link:

http://www.accaglobal.com/pubs/about/public_affairs/unit/global_briefings/green_tax.pdf

- ends -

Green tax around the world

- Sweden has taxes aimed at reducing energy consumption and additionally provides subsidies or exemptions for energy derived from sustainable or renewable sources.

- In 1990, Finland became the first country to introduce a carbon tax.

- The US has implemented tax measures to increase investment in renewable energy sources enacting tax credits for the expansion of wind, solar, biomass and other renewable energy technologies.

- China taxes the disposal of household and commercial waste and has a further tax on the disposal of waste water, while companies that reduce their water consumption are offered corporate income tax allowances.

- Germany has implemented taxation on emissions on transport, which are calculated directly on the level of emissions.

- Australia introduced a small levy on fertiliser as early as 1986. Although this does not raise significant amounts in tax revenues, it has had an impact on the type and amount of fertiliser used.

- In Denmark 5.9 percent of tax revenues are made up of environmental taxes, according to Eurostat, by far the highest proportion in the EU and arguably the highest in the world. 

- The UK has implemented a range of environmental taxes, including the Climate Change Levy, a tax on the end-use of ‘taxable commodities’ (principally electricity, gas and coal) by commercial customers, and the Landfill Tax, which taxes people and organisations when they discard waste in landfill sites.

Courtesy By ACCA

Habib Bank and MCB interested in buying RBS Pakistan

KARACHI  Habib Bank Ltd. KSE symbol (HBL) and MCB Bank (MCB) both have separately said they are interested in buying Royal Bank of Scotland’s (RBS) operations in Pakistan.

In a notice to the Karachi Stock Exchange (KSE), Habib Bank said it “will soon start due diligence of Royal Bank of Scotland’s operations after seeking regulatory approvals from the State Bank of Pakistan.”

Muslim Commercial Bank (MCB Bank) also told the KSE Karachi stock exchange that it will approach the central bank for approval.

Analysts said the successful bidder would get access to RBS’s clients in Pakistan, which are spread across 80 branches in 24 cities. RBS has taken over this clientel from ABN Amro Bank Pakistan which it took over last year.

“In case Habib Bank buys Royal Bank of Scotland’s operations, the entity will become the number one bank in terms of deposits and assets, surpassing National Bank of Pakistan,” said Mohammad Sohail, a Karachi-based independent economist.

Habib Bank is currently the second-largest Pakistani lender by assets, followed by MCB Bank.

As of December 2008, RBS had deposits worth PKR79 billion and outstanding loans worth PKR68 billion.

Royal Bank of Scotland (RBS)  had in February announced a three- to five-year plan to dispose of non-core assets. It had identified its Asia assets as well as a number of businesses related to the loss-making global banking and markets unit for sale.

Independent study highlights closeness of international convergence of auditing standards

The case for global convergence of auditing standards is strengthened, says ACCA as EC study is published

ACCA believes the case for the global convergence of auditing standards has been strengthened following the publication of an European Commission report comparing future EU and US standards.

The report, prepared independently by the Maastricht Accounting, Auditing and Information Management Research Center (MARC), evaluates the differences between International Standards in Auditing (ISAs) and the standards of the US Public Company Accounting Oversight Board (PCAOB).

The ISAs have been clarified by a recently-concluded modernisation and are currently the subject of an EC public consultation on their adoption in EU member states.

'This is an important study, and its independence is a key factor,' said David York, ACCA's head of auditing practice. 'Comparing the US system with that proposed for Europe is a timely exercise that also holds lessons for governments, regulators and investors.

'This is a valuable identification and understanding of the similarities and differences between the two systems. In the main, MARC concludes that there is little or no difference between audits under the clarified ISAs and PCAOB standards; this will increasingly be the case in future as the PCAOB is proposing to change its standards on the auditor's assessment of and response to risk, essentially to catch up with the risk-driven principles-based ISAs. There will remain significant differences because of the Sarbanes-Oxley need for separate reporting by auditors on internal control over financial reporting.

'The report confirms that investors are in favour of one set of auditing standards that are followed on a global basis; so it will be interesting to see the reaction to the study in the US. The report also makes the significant point that auditing standards are just one element. Audit quality depends on how they are applied by firms and enforced by regulators. By extension, investors should be in favour of consistent global standards of audit firm governance and transparency and consistent regimes of inspection and oversight.'

Courtesy By ACCA

ACCA Pakistan joins hands with BP

ACCA Pakistan awarded BP Pakistan Exploration with Platinum Approved Employer status in recognition of their commitment towards training and development of ACCA trainees. ACCA’s Approved Employer Scheme plays a pivotal role in the recruitment, development and retention of the ACCA qualified employees in the approved organisations. It allows organisations to reach global best practice in the provision of learning and development opportunities for ACCA trainees and members. The certificate was presented to Mr Farhan Sadiq- Head of Finance, BP by Mr Arif Masud Mirza, Head of ACCA Pakistan. During the ceremony Mr Farhan Sadiq emphasized BP’s commitment to professional excellence and the role of organisations such as ACCA Pakistan in supporting the industry to achieve the same. He stated, “BP looks forward to continuous engagement and co-operation with ACCA in achieving this objective”. Speaking at the occasion, Mr Arif Masud Mirza discussed potential areas of cooperation between BP Pakistan and ACCA Pakistan, including training of Cambridge ICFE, IFRS Diploma and Diploma in Financial Management for its employees. He also highlighted the launching of a Career Portal that would facilitate screening process for recruitment by ACCA Approved Employers in the future.

ACCA Pakistan joins hands with Adamjee Insurance

ACCA Pakistan awarded Adamjee Insurance Company Limited (AICL) with Silver Approved Employer status in recognition of their commitment towards training and development of ACCA trainees and members. The certificate was presented to Mr Mudassar Zubair, CFO, Adamjee Insurance by Mr Arif Masud Mirza, Head of ACCA Pakistan. During the ceremony Mr .Mudassar Zubair stated that, “It is a great pleasure in becoming an ACCA Approved Employer. Our vision is to explore, innovate and differentiate to become leaders to the Insurance Industry. We are constantly exploring new avenues and developing new methods to excel in our endeavors through teamwork and determination.’’ ACCA’s Approved Employer Scheme plays a pivotal role in the recruitment, development and retention of the ACCA trainees and members in the approved organisations. It allows organisations to reach global best practice in the provision of learning and development opportunities for finance and accounting professionals. Speaking at the occasion, Mr Arif Masud Mirza, Head of ACCA Pakistan said that awarding Approved Employer Status will open new vistas of mutual growth for ACCA Pakistan and Adamjee Insurance. He congratulated Adamjee’s entire team for joining the list of over three hundred high profile Approved Employers who are currently investing in ACCA Training programme.

Bearingpoint Signs Agreement For Sale Of EMEA Practice

BearingPoint, a global management and consulting service provider, has announced that it has signed a definitive agreement with the European management team of the company. The agreement was signed for the sale of the EMEA (Europe, Middle East and Africa) practice. It was done for an aggregate purchase price of around $69 million US dollar in total consideration.

The terms of this definitive agreement states that the EMEA practice of BearingPoint is now a legally-independent entity and is owned by EMEA management. Moreover, it will operate as one single partnership. Peter Mockler, BearingPoint EMEA’s executive vice president, and the existing management team will be providing leadership in order to facilitate the transition of the practice successfully. The practice will also continue to operate under the brand name of BearingPoint. Thus, it will benefit from existing brand awareness and equity.

Peter Mockler said that they are confident and that this is the best path for both their clients and employees. He further said “The EMEA leadership team and I are dedicated to the success of the practice and remain steadfast in our commitment to serving our clients”.

The sale of the EMEA practice will be completed either on or before August 31, 2009. However, the sale is subject to the fulfillment of some conditions as well as to the bankruptcy court approval. Moreover, the company has neither assured that the Court will approve the proposed sale nor claimed that this particular transaction will be completed.

Courtesy By Big4

Deloitte And Oracle Extend Alliance For IFRS Solutions

Deloitte, a leading multidisciplinary and professional service provider around the world, has extended its alliance with Oracle, the largest business software company of the world. They are extending their alliance to help the executives address organizational challenges that are associated with the conversion to IFRS (International Financial Reporting Standards). Jointly, Deloitte and Oracle will focus on the various industry-specific challenges that USA and other countries can face while adopting International Financial Reporting Standards.

International Financial Reporting Standards is a set of accounting principles, which focuses on principles and objectives. However, it is less dependent on detailed rules in comparison to U.S. GAAP (U.S. Generally Accepted Accounting Principles). Some of the benefits of IFRS are greater transparency, improved efficiency, reduced complexity and increased comparability. It’s due to these benefits that the investors, who want a clearer insight into corporate performance, have globally accepted IFRS. A roadmap was published by the U.S. Securities and Exchange Commission for adoption and transition of IFRS. This will run from 2011 to 2016. The transition to IFRS will impact the tax, financial regulatory reporting, systems and business processes of a company. However, this impact may vary depending upon the industry as well as the countries from where a company operates.

Deloitte believes that IFRS affects a number of aspects of a company. It may even create effects which may flow throughout the organization. Performance measurement implications and internal and external reporting can also be associated with IFRS. Jointly, Deloitte and Oracle will deliver guidance and innovative solutions to assist the leading Fortune 1000 companies so that they can plan for the transition of IFRS. The highly specialized financial management solutions and IFRS integration team of Oracle and the cross-functional service capabilities of Deloitte will provide an exceptional depth of industry experience. This will help the organizations to manage multiple accounting frameworks, improve business processes and information quality, capitalize on opportunities and enforce global standards.

Terrance Wampler, VP - Financials Product Strategy of Oracle said that “Over 100 countries already require or permit the use of IFRS today, and many organizations are already using Oracle solutions to comply with IFRS requirements”.

Courtesy By Big4

Green financial futures

 

With world leaders at the G20 summit earlier this year pledging $1.1 trillion to boost the economy while aiming to build an inclusive, green and sustainable recovery, the future looks bright for renewable energy.

Not only are renewable energy companies busy developing green technologies, such as wind, solar and geothermal, but traditional energy companies – the oil and gas behemoths – are also banking on a greener future, and basing their strategies around promised investment from government and fiscal incentives to up their game.

All of which is great news for accountants working in renewable energy, who tackle sector-specific financial issues against the backdrop of a dynamic commercial environment.

Challenges for accountants

One of the financial challenges particular to the renewable energy sector is explained by David Gray, finance director of independent energy consultancy McKinnon & Clarke: 'The main issues are balancing short-term and long-term goals,' he says. 'Prices for renewables will undoubtedly come down in the long term and are forecast to drop below traditional energy prices – but how do renewable companies balance the current needs of profits, cash flow, investment in R&D and investor needs against the longer-term potential benefits to be gained?'

An associated difficulty is that accountants have to rely on traditional financial modelling – such as return on investment – while dealing with a business model that usually presents an imbalance with traditional technology payback in terms of time and efficiency.

FDs working in renewable energy also face familiar problems shared by their counterparts in other industries amid the global economic crisis.

'Those who took on too much debt in the past few years are now working hard to make the interest payments or refinance the debt as it matures,' says Robin Griffiths, an interim CFO who has worked extensively in oil and gas, as well as mining. 'For those management teams that were more conservative, some great opportunities are materialising to pay good prices to purchase rivals or enterprising young companies who were less prudent. For accountants, those with good treasury or corporate finance experience are really feeling wanted right now.'

One benefit renewable energy has over some other sectors is that there is a government-supported drive to invest. But how are the promises to build an inclusive green and sustainable recovery likely to convert into real investment?

Griffiths is sceptical as to whether it will translate into hard cash in the short-term. 'Unfortunately, we are now seeing that the direct investment available from governments is minimal, as they are too indebted themselves to have much free cash.'

The next big thing?

The truth is that investors will gravitate towards the areas most ready for profitable expansion. Adrian Scholtz, who leads KPMG's renewable energy corporate finance activities in the UK and Germany, believes the most likely are 'directly linked to investment promises in the Budget'.

The first is wind power; Scholtz says that the UK's Budget announcement of £525m for the development of offshore wind projects directly led the Eon board to announce investment in building the first phase of a wind farm in the Thames Estuary which, once complete, will be the world's largest.

Scholtz also believes that carbon capture and storage is an area ready for expansion, where natural storage facilities such as old oil and gas fields are used to catch CO2 and store it.

Griffiths, though, warns, 'We will only start approaching profitability for the total product once there is sufficient demand to push down unit costs sufficiently – which for many green technologies seems years away, if not longer – and the most obvious hope for profitable renewables in the short-term is the mass production of some kind of clean car technology.

'On the back of commercial development, some of us hope that costs will come down enough to enable their deployment to somewhere with real pressing need and suitability such as mass solar energy to a developing part of Africa. And accountants can help be a part of that.'

Career prospects in renewable energy

For trainee accountants, what is the job market climate in renewable energy?

'Career prospects for trainees are strong,' says Roland Seddon, regional director at Hays Senior Finance. 'Jobs in renewable energy are likely to increase over the coming year.'

And those jobs can be found not only at the energy companies themselves but also at the professional services firms that advise them. They provide, says Scholtz, a 'big opportunity for people with financial skills to have more commercial roles'.

And as well as tax-related issues increasing in the future – such as organising tax-efficient structures for energy companies – he says that the majority of his work involves investment appraisals.

Working in industry is also attractive, partly because of the buzz surrounding renewable energy and its importance going forward, not to mention its worthy connotations.

'Blue chip energy companies are diverting more of their resources into this sector; we are seeing more and more small renewable energy start-ups,' says Seddon. 'The fact that it's a growing sector – one that's enjoying increased investment – makes it very attractive. Candidates are increasingly looking to work for companies that can demonstrate a social and moral conscience; and they are keen to display green credentials on their CVs.'

Although previous experience in renewable energy is valuable when looking for work, few finance professionals have long track records due to the relatively embryonic state of the sector. So which existing skills will stand you in good stead?

Those with experience in the mining, manufacturing and engineering sectors have an advantage, according to Seddon, who adds, 'Strong candidates will be able to demonstrate skills in investment appraisal, raising finance and corporate finance – skills attractive to a number of employers in renewables as they look to grow over the coming years.'

International opportunity for green thinkers

So if you want to do your bit for the world and move into renewables, which countries will serve you best as you forge an international career?

The answer may surprise you because, while the US fares poorly due primarily to its carbon emissions, Gray points out, 'Most of the largest international players are either based or have a presence in the US; it has companies covering all of the main renewable energy sources. For example, there are companies such as SunPower, who developed photovoltaic [solar] solutions with far greater efficiencies, while GE Energy is the world's leading turbine supplier.'

If you want to work in Europe, Germany is considered by many to be a leader in the development of green policies. 'Germany accounted for 50% of the world's photovoltaic installations in 2007,' says Gray. 'A large part of the reason for this is the system of feed-in tariffs, which rewards those who invest in renewables and export to the grid with high resale prices for the energy exported. This seriously reduces the payback times for renewables.'

As Gray concludes: 'Because of the conflict between traditional financial accounting methods and environmental concerns it certainly helps for accountants to be green thinkers, so that they can think outside the box and look at other returns, rather than just financial ones.'

CASE STUDY: HEENA PANESAR

Heena Panesar is studying for three of her final papers with Kaplan Financial and currently working at Switch2 Energy Solutions, which procures and sells energy to private wire networks. It uses combined heat and power (CHP) engines, which produce heat and electricity in the same process, consuming about 35% less fuel than if the energy is produced separately.

'I wasn't specifically looking to get into the energy sector; I had no idea what was involved, but two and a half years later, it has turned out to be a great area to be working in. When I started, I had no idea what a CHP engine was and how it was energy efficient,' says Heena.

Heena particularly likes working in the energy sector because it is so dynamic. 'It's a great field to work in – there's a growing need for renewable sources of energy, and new developments are moving more towards the use of CHP as an efficient and green way of producing energy. '

She has developed a sound knowledge of the sector through her work.

'On a monthly basis, I produce the financial accounts – but in line with that, there's a lot of investigative work to do on the inputs and outputs of the energy system. I get involved with everything from calculating the selling tariffs for our customers to producing models to monitor the efficiency of the system. I have meetings with clients to discuss any issues that have been identified as a result of the analysis; this can in turn save the company money.

'Now, I'm using the technical knowledge to contribute to the company on a profit level – and it's great working for something that's so important these days.'

Beth Holmes is a freelance journalist

Train the Trainer

ACCA Pakistan’s teacher training initiative

As part of ACCA’s continued efforts towards developing excellence in professional accounting education and establishment of best practices among tertiary accounting educators, a workshop - “Train The Trainer” was held today at a local hotel in Karachi led by Dr Afra Sajjad, Head of Education and Policy Development, ACCA Pakistan and Mr Wali Zahid, CEO, Skillcity. The participants appreciated ACCA’s innovative efforts at enhancing the capacity of accounting faculty. They felt that the workshop was very useful and relevant to their work as it enabled them to learn new teaching skills and methodologies.  Speaking at the event, Dr Afra stated that the “Through initiatives like Teach the Trainer ACCA aims to facilitate tutors to help young men and women of Pakistan to pursue their ambition of a successful career in finance, accounting and taxation and become world class professional accountants”. Mr Wali Zahid emphasised on achieving student excellence through motivation not only towards academic endeavours but also towards professional life.

Courtesy By ACCA

The training of tomorrow’s business professionals requires a radical overhaul

The speed of business in the 21^st century means that management training and development will have to alter drastically according to The future of professional development, the latest report in ACCA’s (the Association of Chartered Certified Accountants) Insight Series.

According to the report, if continuous professional development programmes are to be fit for purpose, keep up with regulatory change and provide acceptable returns on the hundreds of millions of dollars invested each year, then a radical overhaul is needed.

Tony Osude, acting director of professional development at ACCA said: “The set piece ‘talk and chalk’ lectures cannot survive. Business professionals need immediate access to good quality information, and they need to know how to apply it to their work.

Mr Arif Masud Mirza, Head of ACCA Paksitan said that “Accountants are operating in a very different environment and we believe all professional development programmes should reflect this. Although there will always be a place for traditional classroom learning, the way they are taught is going to fundamentally change. The generation entering the profession now is far more technologically adept, and the business benefits of using technology to teach are compelling – it’s really about organisations getting the training blend right.”

Courtesy By ACCA

ACCA Global Economic Confidence Survey

Latest findings reveal renewed optimism and confidence

According to ACCA's latest global survey of finance professionals, economic recovery should be possible within the next 18 months.

The ACCA Global Economic Confidence Conditions Survey for the second quarter of 2009 reveal tentative signs that panic is no longer a major driver of the economy.

Optimism continues to depend substantially on the actions of national governments, but the reliance on state assistance has dissipated since the survey for the first quarter of 2009, and business confidence is now more clearly linked to expectations of future growth. Morale in key regions such as Asia Pacific is much higher, with small and medium-sized enterprises and large financial firms in particular increasingly buoyant about the future. 

According to the survey, 64% of finance professionals feel the global economy has bottomed out – twice the number of those in the Q1 survey. More than a third even expect a recovery within the next 12 months.

However, 10% of respondents are far less optimistic, saying they expected the downturn to remain for three years or longer – a view that is twice as common among public sector accountants.

As far as regional expectations are concerned, the survey reveals that Western European financial professionals the least optimistic about a recovery, while those in Africa are more likely to believe conditions are improving. Respondents in Asia Pacific, however, are generally the most optimistic and consider that the worst is behind them, with expectations of a speedier recovery.

Despite this largely positive shift in perceptions, the survey of 546 ACCA members in 77 countries found only a marginal improvement in trading conditions in the three months to May 2009.

'While there is little evidence of economic recovery, there is renewed confidence and optimism,' said Dr Steve Priddy, ACCA director of technical policy and research. 'Our next quarterly survey will look for real changes in trading conditions which support that viewpoint and whether the private sector is backing its confidence by investing in people and capital – or whether public sector finance professionals are right to think that the global economy has some way to go before recovery begins.'

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Courtesy By ACCA