The GAAPweb blog

So, you want to work for a ‘Superbrand’

Companies that carry the titles Big 4, blue chip, FTSE or more recently ‘Superbrand’; aren’t these just different words for the same thing?

And how are such labels acquired? Scale? Delivery? World domination? Or is it just simply a measurement of annual turnover and profit?

The exact criteria remain a bit of an enigma. The Business Superbrands survey defines a ‘Superbrand’ as follows:

“A Business Superbrand has established the finest reputation in its field. It offers customers significant emotional and/or tangible advantages over its competitors, which customers want and recognise.”

With the ranking of PricewaterhouseCoopers (PwC) as one of 2010’s top ten Business Superbrands last month (in addition to its Big 4 status), what does it actually mean to work for such a company?

The most obvious (but still valid) answer is the weight it adds to your CV. Prestigious companies attract fierce competition, so if you manage to get offered a job, you’re likely to be the top of the candidate pack.

However, don’t miss out on smaller businesses just because they don’t pack the same ‘celebrity’ punch. There are plenty of opportunities at smaller accountancy firms and SMEs. You’re likely to encounter a greater variety of work and the opportunity to get to know people rather than masses of faceless names and email addresses.

Equally, you can dip a toe into other facets of business by working as an accountant for a company rather than a practice. Read about more career options on the GAAPweb blog.

Whether or not you decide to actively pursue a career with a prestigious company, you should always keep your options open. After all, a ‘Superbrand’ organisation is only as good as its employees.

Predicting our financial future

There’s no denying it: 2009 has been a difficult year for finance and accounting professionals.

This year, we’ve watched the banking crisis unfold on a global scale. Nowhere has remained immune; even Dubai has had to curb the spending of its monopoly money. But as countries including Germany, France, China and even the US start to show strong signs of recovery, it’s only natural for us to wonder: is it the UK’s turn next?

Another common theme this year has been the UK’s changeable financial forecast. We’ve heard varying stories about the state of business, employment and housing markets and whether or not we’re bouncing back to economic health or plummeting further into debt.

On a local level, CFOs everywhere are making predictions for what 2010 holds for their company. If anything, I think this year has taught us to expect the unexpected. I’d hazard a guess that the term ‘cautious optimism’ is flying around boardrooms everywhere.

Most of us are putting our faith in the latest industry news, with positive predictions for both accountancy graduates and Financial Directors.

As a very wise man once said (and I’ll take the liberty to paraphrase), it’s probably not the beginning of the end of the UK’s financial rollercoaster ride, merely the end of the beginning. At least we’re all better prepared for what next year will bring.

January is a great opportunity to start afresh and bring your ideas to a new role. From all of us here at GAAPweb, we’d like to wish everyone a Merry Christmas and a prosperous New Year.

Has the ex-pat dream dissolved?

Leaving your home country for a job opportunity abroad is not a decision to be made lightly. Will the job and the company be all that you expect? What about the people and the place? If, however, you’ve been offered a position in a country perceived as one of the most prosperous in the world, it softens the decision-making process somewhat.

Over the past decade, Dubai has established itself as the crowning jewel in the Middle East’s crown, with some of the most opulent property developments and exciting job opportunities going.

However, this past week Dubai’s debt problems were made public as its shares plunged in the FTSE 100, highlighting the fragility of its once stable finances.

Most significantly, construction company Dubai World has accrued debts to the tune of £36 billion and is having to be rescued by Deloitte.

Dubai World – the company behind the manmade islands Palm Jumeirah and ‘The World’ – is state-owned, although the government is currently trying to distance itself from the company’s debts.

Apart from causing shockwaves around global financial markets, I can’t help but think about those British ex-pats out there at the moment. Is the bubble really bursting? Is a one-way trip back to the UK on the cards? The phrase ‘job security’ has always been a bit of a paradox during a recession, but it’s only really now that Dubai ex-pats are beginning to feel their collars tighten and their ‘secure’ positions slipping away.

The embers of this recession have settled far and wide, and anyone who thinks that their country is recession-proof or if this downturn hasn’t been global, is truly mistaken.

If you are considering accepting a role abroad, remember to exercise due diligence. No job is secure; the last thing you want is to arrive in a new country only to find that your job, or worse, the company is no longer there.

Pay now, avoid debt later

Personal debt. National debt. Upcoming ghost-of-Christmas-future debt. Gen Y is almost completely unfamiliar to the concept of a debt-free society, and I’m pretty sure this will perpetrate for generations to come unless something drastically changes.

Everyone seems to have an opinion on who got us here and who’s responsible for getting us out. The latest establishment offering their (somewhat more than) two-cents’ worth is the National Institute for Economic and Social Research (NIESR), whose recent report predicted that income tax might have to be increased by 7p if the UK’s economy is to stand a chance at full revival.

The report stated: “The UK faces a structural budget deficit of 6 per cent of GDP. The build-up of government debt, which may reach 93 per cent of GDP by 2015, will leave a burden for our descendants.”

A rise in income tax has never been a particularly popular option historically (particularly around election time), and it’s unlikely to be now. Nobody likes the thought of more money deducted from their payslip each month without any tangible proof of where it’s going.

Even the BBC’s highest earners are setting up their own companies to avoid paying hefty taxes on their burgeoning salaries as they take on ‘freelance engagements’. I’m not condoning this, but I do think it’s representative of the general public’s view towards income tax: if there’s a legal way we can pay less of it, we’ll take it.

So putting income tax up? Yes, it might help to alleviate national debt and result in fewer years of suffering for future generations. Will it be popular now? Er, no.

Banks on board … but is it a bonus?

The decidedly chillier onslaught of October brings with it the somewhat warmer news that, at last, five of the UK’s largest banks are setting the standard by agreeing to rein in excessive bonus payouts.

Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered have signed up to the proposals, following pressure from Chancellor Alistair Darling and suggested reforms at the G20 meeting in Pittsburgh.

The Financial Services Authority (FSA) has been keen on remuneration reforms for some time, but with five key banks on board, surely it’s only a matter of time before the others follow suit. I’m just not holding my breath that any of this will happen before Christmas.

Neither, it seems, are bankers, who are monumentally unconcerned that it will affect this year’s payouts, but who agreed that pay needed to come down. Opinion in the city is still divided as to whether these reforms will have any real impact.

Unsurprisingly, the Treasury is yet to persuade Goldman Sachs and JP Morgan to cap bonuses. And since the FSA’s planned code of practice for January 2010 is not compulsory, it could still be quite some time before we see a balanced and unified bonus culture on a national, let alone a global scale. The only logical way forward from here is compulsory legislation that holds all banks and other financial institutions to accountability.

It’s impossible to say whether or not financial stability really can be achieved through these measures. However, with the backing of the banks and cooperation from financial institutions at all levels, it’s one more step in the right direction … or at least it will be from 2010.

Don’t let any of this put you off pursuing a financial career; you’re still like to earn a healthy living, just without the wild compensation that was once available.

GAAPweb scoops nominations for two awards events

If you needed further proof that you’ve been looking for your next finance and accounting role in the right place, here it is.

This year’s National Online Recruitment Awards nominees have been announced, and it’s with great pleasure that I can reveal that GAAPweb has been shortlisted in the Best Specialist (Niche) Job Board category.

NORAs defines this category as: ‘A purely online job board, advertising vacancies within a defined range of disciplines. These sites must operate independently of recruitment firms or publications’. If you’re familiar with GAAPweb (which I’m sure you are if you’re reading this), you’ll know that we’ve been the UK’s leading specialist accounting and finance jobsite for over 11 years.

On a shortlist of eight contenders, GAAPweb is the only finance and accounting niche site nominated. Overall, there were 654 contenders for the Awards, resulting in 25,000 nominations.

As further testament to the success of GAAPweb over the past year, the IFA (The Institute of Financial Accountants) has also nominated GAAPweb in their recruitment category as part of their Achievement Awards.

Industry recognition and accolades are undoubtedly nice to have, but here at GAAPweb we’re more interested in giving you the latest news, highest quality jobs and access to the best recruiters.

Consumers indifferent to VAT cut

It’s actually quite easy to believe it’s been nearly been a year since VAT was trimmed down from 17.5% to 15% in an effort to stimulate consumer spending. It was a change intended to improve the economy that somehow passed by under most people’s radars.

So did it work?

Not according to Big 4 firm PricewaterhouseCoopers (PwC). Almost nine out of ten of people surveyed were unaffected by the change, and certainly weren’t inclined to increase their spending habits because of it. A relatively high 5% of the 2,000 consumers polled didn’t even notice a difference. But then again, they probably had more pressing concerns.

If, like me, you’re a regular consumer whose main focus over the past year has been watching the pennies whilst trying to secure employment or safeguard your job, it’s unlikely you’ll have been persuaded to spend more because things are suddenly marginally cheaper.

The only change that you might have noticed is an item or service costing a slightly more arbitrary figure, rather than say your standard x pounds and ninety-nine pence.

Retailers have felt the change more significantly, since changing price points, hard-coded finance spreadsheets and IT systems have all had to be manually modified to accommodate the VAT drop.

Implemented as part of Alistair Darling’s pre-budget report, and estimated as costing £1bn a month thus far, it seems like a rather expensive way to rejuvenate the flailing economy.

However, it was always designed to be a temporary measure; it’s due to go back up to 17.5% in January 2010.

The big bonus clampdown

The Financial Services Authority (FSA) has made a brave move by becoming the first regulatory body to publish a code of practice concerning remuneration and bonus schemes at banks and other financial institutions. This is scheduled to be introduced in January 2010.

With further news of plans to implement a ‘High Pay Commission’ scheme that restricts excessive rewards, it seems like the end might be near for uncapped and unmodified bonus schemes.

I’m not saying there’s anything greatly wrong with a bonus culture – at its most basic level it’s a financial incentive to improve performance. However, it needs to be monitored in an appropriate way, which it obviously hasn’t been over the past few years. In fact, it’s been grossly neglected.

So who’s accountable for the public outcry when it comes to bonuses? Should it be the ‘fat cat’ banks who hand them out? Or should the FSA bear the brunt of it? Not according to Hector Sants, FSA Chief Executive, who terms the issue a ‘moral’ one rather than a ‘regulatory’ one. He believes that politicians should implement taxation policies rather than point the finger at the FSA.

Guaranteed rolling bonuses that are paid regardless of performance need to be curbed. According to the code of practice, the maximum term that firms should guarantee a bonus for is one year. It makes sense that any remuneration that follows should then be performance-based.

Mr Sants also commented on a ‘general international agreement’ on this issue, but indicated that it was important that the FSA make the first move, which has, in general, been met with praise.

With a question mark still dangling over who should answer to past mistakes, there’s still a certain element of ‘too little, too late’. However, it’s great that the rules are finally in place…they just need to be followed.

An international stage for financial reporting

Following on from last week’s blog, I’d like to mention how significant it is that the improvement of financial standard-setting is being recognised outside the UK.

The most recent call for International Financial Reporting Standards (IFRS) came from Ian Ball, chief executive of the International Federation of Accountants (IFAC). Writing to the G20 Secretariat, Mr Ball expressed the need to address “problems of accountability and transparency” when it comes to financial standards, and pitched it as a key driver in combating the global crisis.
   
Over the past few months, the IFAC has been outspoken about the necessity for IFRS, encouraging accountants to be open and honest and calling for road maps to be put in place by standard-setting bodies.

With UK financial reporting currently in a “good” state according to the Financial Reporting Review Panel (FRRP), it makes sense for the G20 nations to look to the UK as a successful model and follow its example. That would certainly make a refreshing change!

It might take a while to fully implement industry standards on an international scale, but at least it’s a move towards a healthier economy.

I look forward to reading the next snippet of positive news surrounding financial reporting; it seems to be coming in thick and fast.

Financial reporting sets the standard

The economy’s getting better. Oh no wait, it’s getting worse. Anyone else finding it difficult keeping up with the endless stream of projections, forecasts and reports? With opinion on the state of the financial market continually changing, you’ll find it comforting to know that financial reporting standards are on the up.

Companies’ financial reports are used in setting industry standards and providing benchmarks. For this reason, it’s necessary that regulators ensure that these reports retain high levels of impartiality, accountability and integrity. And so far, things are looking good.

GAAPweb news recently showed that the current state of UK financial reporting is indeed “good”, according to the Financial Reporting Review Panel (FRRP).

However, there are still certain areas that need to be improved. The FRRP suggests that companies’ financial reports should provide more information on risk assessment, projections and policies. In addition the chairman of the FRRP, Bill Knight, encouraged reports to detail how the recession is directly affecting company performance rather than just providing “generic descriptions of the economy” (I think we’ve all had enough of those).

The Financial Crisis Advisory Group (FCAG) recently explained that standard-setting and accurate reporting will be a major factor in helping the finance sector through the recession. I couldn’t agree with this more; the last thing we need is more inaccuracy and uncertainty.

Furthermore, if companies use financial reporting to set clear targets, then they’ll be better prepared for the upturn as and when it happens. From a business perspective, surely it’s much easier to manage the impact of the recession at a ‘local’ level, rather than getting swamped by broad economic forecasts?

By making sure that standards are up to par, accurate financial reporting is sure to instil a sense of confidence and improved stability…which is what we all need in times like these.