17. KEY TRENDS SHAPING THE TRANSFORMATION
OF THE ACCOUNTING INDUSTRY AND ITS IMPACT
ON THE PROFESSION EDUCATION PROGRAM
by Ms Michelle Vassallo Pulis
30. THE RELEVANCE OF ETHICS TO
MANAGEMENT EDUCATION IN THE
by Ms Ariane Azzopardi
55. PEOPLE SKILLS FOR THE ACCOUNTANT
by Mr Patrick Psaila
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17. KEY TRENDS SHAPING THE TRANSFORMATION
OF THE ACCOUNTING INDUSTRY AND ITS IMPACT
ON THE PROFESSION EDUCATION PROGRAM
by Ms Michelle Vassallo Pulis
30. THE RELEVANCE OF ETHICS TO
MANAGEMENT EDUCATION IN THE
by Ms Ariane Azzopardi
55. PEOPLE SKILLS FOR THE ACCOUNTANT
by Ms Patrick Psaila
AUTUMN 2018 | theaccountant.org.mt p.03
THE ACCOUNTANCY PROFESSION IN AN AGE OF TRANSFORMATION
by Prof. Frank Bezzina
RECENT CHANGES IN THE MASTER IN ACCOUNTANCY COURSE OF THE UNIVERSITY OF MALTA
by Dr Peter Baldacchino
The Accountant is
MBR Publications Ltd
on behalf of
The Malta Institute of
IS OUR WORKFORCE READY FOR AN AGE OF ACCELERATION?
by Ms Lisa Pullicino
KEY TRENDS SHAPING THE TRANSFORMATION OF THE ACCOUNTING
INDUSTRY AND ITS IMPACT ON THE PROFESSION EDUCATION PROGRAM
by Ms Michelle Vassallo Pulis
LEARNING AND WORKING: A DIGITAL CHAIN REVOLUTION
by Prof Joachim James Calleja
CPE FOR ACCOUNTANTS - A NECESSARY BURDEN?
by Mr Matthew Scibberas
THE PROFESSIONAL ACCOUNTANT IN TODAY'S INDUSTRY
by Mr Stephen Muscat
The Editorial Board
All correspondence, articles for
publication and enquiries are to
be addressed to:
MIA Services Limited
Level 1, Tower Business Centre
Tower Street, Swatar
THE ROLE OF EDUCATION IN PROFESSIONAL SERVICES FIRMS (PSFS) AND THE ACCOUNTING PROFESSION
by Ms Caroline Reynolds
THE FUTURE OF TALENT IN THE ACCOUNTANCY PROFESSION
by Ms Josianne Avellino
PEOPLE SKILLS FOR THE ACCOUNTANTS
by Mr Patrick Psaila
CAN EDUCATION BENEFIT FROM BLOCKCHAIN TECHNOLOGY
by Mr Nicholas Warren
PRESCRIBING CREATIVITY AND HUMOUR IN OUR RELATIONSHIP
by Dr Joseph Agius
GENERATIONAL DIFFERENCES IN THE MODERN WORKPLACE AND HOW THESE CAN IMPACT THE BOTTOM LINE
by Mr Josef Gafa
THE COMPLEX WORLD OF FINANCIAL ANALYSIS
by Mr Julian Cardona
(+356) 9940 6743
The Institute does not necessarily concur
with the views expressed in the articles
published in this journal. Articles are
published without responsibility on the
part of the publishers or authors for
loss occasioned in any person acting or
refraining from action as a result of any
view expressed therein. The Accountant
can now be accessed from the website at
THE RELEVANCE OF ETHICS TO MANAGEMENT EDUCATION IN THE ACCOUNTING PROFESSION
by Ms Ariane Azzopardi
VAT TREATMENT OF VOUCHERS
by Mr Mirko Gulic & Mr Edward Apap Bologna
GETTING IT RIGHT - EXTRACT FROM MIA CPE REGULATIONS
by The Malta Institute of Accountants
ELECTRONIC PUBLIC PROCUREMENT IN THE MALTESE PUBLIC ADMINISTRATION
by Ms Lorraine Mangion Duca
CLOWN DOCTORS: NATURE OR NURTURE?
by Mr Maurice Sleypen
WILLIAM SPITERI BAILEY
WILLIAM SPITERI BAILEY
Dear Esteemed Members,
When thinking about education and the Accountancy
profession, many questions come to mind. Is
today's education designed to meet the challenges
of the future? What should be the common body
of knowledge prescribed for career aspirations in
professional accountancy? Can we define the skills
of the future accountant? How should we embed
professional scepticism in the education process? Is
the importance of CPD recognised or is it seen as a
The accounting profession will face significant changes
in the coming years, and professional organisations,
their members, and educational institutions must
respond accordingly. The evolving smart and digital
technology, continued globalization of reporting and
disclosure standards, and new forms of regulation are
also major challenges for the profession.
The future accountants will use increasingly
sophisticated and smart technologies to enhance their
traditional ways of working, and these technologies
might even replace the traditional approach.
Globalisation will create more opportunities and
challenges to the accounting profession. It encourages
the free flow of money from one capital market to
another, enhances overseas outsourcing activities, as
well as stimulate exchange of professional & technical
skills. That said it will also compromise and curtail the
ability to resolve local problems.
Increased regulation, and the associated disclosure
rules, will have the greatest impact on the profession
for years to come.
and the outsourcing of accounting services, evolving
regulations vis a vis tax regulation, adopting new forms
of corporate reporting as well as integrated reporting
Adoption of technology and digital competence are the
key areas creating the skills gap in the profession. At
present, accountants lack knowledge in transformation
of new disclosure regulations, new forms of disclosures,
and awareness of the interconnectedness of financial
and non-financial reporting. Professional accountants
will need the skills to provide all-inclusive and holistic
corporate reporting, which is less about the numbers
and more about the narrative of the organisation.
It cannot be stressed enough, that the future of the
accounting profession in our rapidly changing society
will be determined not only by the profession's
adaptability and utilisation of the expanded
opportunities, but also by the intellectual vigour,
calibre, and skill of its members.
There is no simple response to the various questions
put forward, however it is an opportunity to think
about the future and the role of education. In order to
assist current and future professional accountants to
retain their competitive edge, our aim as an Institute is
to guide students and our members, the accountants
in the right path, to achieve the required knowledge
and skills in this ongoing educational journey.
William Spiteri Bailey
Therefore, one cannot help but ask, do our current
teaching methodologies prepare the young generations
adequately for the skillset, which the future workforce
Education in digital technology has now become
imperative. The future skills will focus, amongst others,
on cloud computing, the use of big data, globalisation
04 Autumn 2018
270 New Members join the Mia
The Malta Institute of Accountants welcomed 270
New Members in a special ceremony held at
Mediterranean Conference Centre on Thursday
October 25. The new members were formally
received into the Institute after graduating in
accountancy programmes by the University of Malta,
ACCA, or ICAEW.
“The accounting profession in Malta is growing in
size and, more importantly, in stature,” said MIA
President William Spiteri Bailey in his address. “The
Institute is committed to keep raising the standards
of the profession and today we enjoy the respect of
other professionals both in Malta and abroad.”
The ceremony was attended by distinguished
international and local guests including ACCA
Global President Mr Leo Lee and Regional Head of
Policy Mr Nick Jeffrey, ICAEW Regional Director Dr
Martin Manuzi, FEMA Dean Prof. Frank Bezzina, and
former MIA President Mr Frederick Mifsud Bonnici.
High achievers in the three streams of study, were
presented with an award by the respective guests on
behalf of the University of Malta, ICAEW, and ACCA.
MIA CEO Maria Cauchi Delia said that the Institute
currently represents more than 3,000 accounting
professionals in Malta: “The Malta Institute of
Accountants is a force of change and development.
Through its work and strategic partnerships, the
accounting profession in Malta keeps ahead of the
curve in transformations affecting global business
During the New Members ceremony, the Kevin
Mahoney Award for Altruism was presented to
Malcom Custó by Ryan Mahoney, the son of the late
Kevin Mahoney, for his work with Puttinu Cares
Foundation. Now in its third year, the award gives
recognition to MIA members who demonstrate the
values of the Institute beyond their professional life.
celebrate ACA success
The Institute of Chartered Accountants in England
and Wales (ICAEW) ACA graduation ceremony took
place recently. The ceremony celebrated the
success of 7 graduates and welcomed one in to
MIA in touch with accounting professionals
Mazars Malta team Mr. William Spiteri Bailey
MIA Connect for Young Professionals
‘A Simple Hello Could Lead to a Million Things’
Visit to the Deloitte Malta centre in Mrieħel
The MIA Young Members Committee held its first event
targeting the young members of the Institute in October,
where the institute got closer to the young members of the
profession and heard their concerns and suggestions.
APPOINTMENT OF THREE PARTNERS
AND THREE DIRECTORS WITHIN KPMG
Marco Vassallo, Simon Xuereb and Jonathan Dingli have been appointed as Partners while
Adrienne McCarthy, Mark Curmi and Vanessa Borg have been appointed as Directors.
Marco joined KPMG in 1995 as a software
programmer and, has been a driver in the evolution of IT
Administration, IT Operations Management, IT Security
& IT Strategy. During his progression towards the role of
CIO, Marco planned and deployed numerous IT projects
locally and also lead a number of large-scale deployment
projects across other KPMG jurisdictions. Marco
spearheaded a number of IT due diligence projects and
lead the IT stream during the acquisition assignment of
one of the top software development companies in Malta,
followed by the establishment of their IT infrastructure
and the adoption of KPMG’s IT policies, procedures and
processes. Marco has now joined the advisory team
bringing to the table a new service offering to the market,
Custom Software Development via KPMG Software.
This tech company offers expertise within the software
development field across the whole project life cycle to
clients from across the globe.
Simon, a lawyer, specialised in International Taxation
and Law has led the ongoing development and broadening
06 Autumn 2018
Members are invited to inform the Institute about their appointments for due consideration, to be included in this section of the journal.
of KPMG in Malta’s Private Client and Global Mobility
Services offering and today leads a multi-disciplinary team
of professionals in this space. He is also actively involved in
the development of this service offering at a global level
for KPMG. He is a regular lecturer, examiner and supervisor
on various tax related courses in Malta and abroad and
has authored a number of papers in leading international
Jonathan leads the Accounting Advisory Services
(AAS) unit, a unit he helped set up. Jonathan assists local
and international clients across various industries with
respect to IFRS advice and IFRS adoption, including first
time adoption of IFRS and transitioning to new standards.
During a term of office with the MIA technical department,
he wrote a number of technical pronouncements on the
application of IFRS to specific local circumstances and
was responsible for the drafting of GAPSE. He has been
specialising in IFRS since 2008; he has lectured on IFRS in
various countries, ran various IFRS courses for KPMG and
the MIA and has given presentations at various events and
conferences. He lectures on advanced financial reporting
in the Master in Accountancy post-graduate degree at the
University of Malta.
Adrienne manages the firm’s internal HR team,
focusing on attracting talented people to the firm
and implementing important employee engagement
strategies, which have played a key role in achieving
the firms growth strategies. Since joining, Adrienne has
led numerous projects in areas such as recruitment,
engagement, management development and talent
management. Adrienne is MSc qualified in Organisational
Psychology with a BBS in Business Studies and has over 20
years global HR experience, having worked in 5 continents
in a combination of HR consultancy and in-house HR
roles. Adrienne’s personal drive and vision has been and
continues to be about building a firm of talented people
who enjoy working cohesively to achieve the Extraordinary.
acquisitions of Banks and Financial Institutions, licencing of
new Credit and Financial Institutions, ongoing regulatory
advice and assistance, and, more recently assignments
related to the emerging fields of financial technology, Coin
Offerings and Virtual Currencies.
Mark represents the local practice at KPMG’s ECB
Office in Frankfurt and forms part of KPMG’s Global DLT
Vanessa has taken up the role of Director, Strategy
Advisory having joined the organisation in September
2018. She has direct experience of the challenges based
by C-suite executives in growing their business and the
acumen to engage in board level discussions, supporting
them in their high level strategic decision making processes.
Vanessa has been engaged on a number of international
projects, as a Strategy Advisor within the Hospitality,
Manufacturing, Education, Tourism, Information
Technology, Communications, Retail, I-Gaming, Financial
Services and Public sectors.
She has been active within the international
management field for over 20 years, recently serving as
a Chief Executive Officer within the insurance industry.
During her tenure, the organisation transitioned back into
profitability. Besides being engaged to provide strategic
levels support, Vanessa has also assisted companies to
improve their operational business model, in areas such
as; planning, developing and implementing performance
management systems that feed into succession planning
and talent management, developing and assessing
standard operating procedures, Executive recruitment
and selection, coaching, employee engagement studies
and analyses, quality audits, setting up knowledge
management platforms, conducting training needs
analysis and delivering tailor made training programmes.
Mark is the industry specialist leading the Banking,
Financial Institutions and VFA Advisory services arm of the
Malta practice. He holds a Bachelors’ degree in Banking,
with Honours in Management from the University of Malta,
and has in excess of twelve years of local and international
banking experience. Mark joined KPMG in 2014, to drive
the Banking Service offering across Audit, Tax and Advisory
within the firm.
His role within the firm is one of an industry
specialist, which has seen him at the forefront of some
major engagements, including advice with disposals and
NEW ECONOMIC ADVISORY
SERVICES DIRECTOR FOR
GRANT THORNTON MALTA
Grant Thornton Malta is pleased to announce
the appointment of Daniel Gravino as Director
for Economic Advisory Services. Daniel has
joined the organisation in a newly created
position within the Transaction Advisory
Services division, as part of the firm’s efforts
to expand its service offering for its local and
foreign client base.
With extensive experience in economics and data
analysis Daniel has the skills necessary to address
pertinent issues facing business, government and
financial institutions. His work spans several sectors
including the public sector, financial services, real
estate, health, transport and telecoms. He holds
a Master of Science in Economics and Industrial
Organisation from the University of Warwick and an
MA in Economics from the University of Malta. Daniel
is also currently reading for a PhD in Economics from
Prior to joining Grant Thornton, Daniel was
a Director at the Office for Competition, Head
(Economic Research) at Malta Enterprise, and Senior
Economist at the Economic Policy Department,
Ministry for Finance. Daniel also occupied a number
of advisory and consultancy roles. He was a member
of the European Commission's Working Group
on the 'Methodology to assess Lisbon-related
structural reforms'; acted as advisor to the Office for
Competition on mergers and competition practices;
and served as consultant to the European Parliament
on matters related to corporate tax avoidance. He
is also a visiting assistant lecturer at the Economics
department of the University of Malta.
Thanks to Grant Thornton’s combination of
experienced people, sophisticated economic models,
and access to the right data, the firm offers its clients
an unbeatable problem-solving formula. On an
international level Grant Thornton International is
already broadly recognised as an undisputed leader
in economic and data analysis. By combining its local
team’s experience in economic advisory and access
to a 135-global office network, the Malta firm aims
to provide the most comprehensive economic and
financial analysis of countries, regions, industries and
APPOINTMENT OF DIRECTOR
In August 2018, Rosemary Amato took up the role of Director
within the Risk Advisory function at Deloitte Malta.
Rosemary joined Deloitte 21 years ago – having
previously occupied leadership roles in both the US
firm and the Netherlands firm. She also served as
the Managing Director of Deloitte’s Global Finance
organisation, where she occupied the role of
Controller for the EMEA region.
Throughout her years with Deloitte, Rosemary
specialised in client service in the Risk Advisory
practice across various industries – focusing mainly
on Security & Controls within ERP apps, Master
Data Management, IT audit, Internal Audit, GRC and
Regulatory compliance (particularly FDA and GMP).
Rosemary also held the role of Risk Advisory
Knowledge Management leader for two years,
where she focused on enabling a knowledge sharing
environment for the 12,000 Risk Advisory member
firm professionals located throughout the world.
08 Autumn 2018
THE ACCOUNTANCY PROFESSION IN
AN AGE OF TRANSFORMATION
PROF. FRANK BEZZINA
PROFESSOR FRANK BEZZINA
(PHD) IS THE DEAN OF THE
FACULTY OF THE ECONOMICS,
ACCOUNTANCY (UNIVERSITY OF
MALTA) AND DIRECTOR AT THE
CENTRAL BANK OF MALTA.
The Accountancy profession continues to flourish
and grow. The increasing request from students
wanting to embark on Accountancy programmes
(such as the Master in Accountancy offered by the Faculty
of Economics, Management and Accountancy) is also largely
due to Malta’s good performing economy and the increasing
demand for more qualified accountants. However, like all
professional careers, it is subject and conditioned by a rapidly
changing world. As Plato put it: “The price good men pay
for indifference to public affairs is to be ruled by evil men.”
We certainly cannot let this happen and we therefore need
to constantly think about the evolving profession. Indeed, to
put Plato’s dictum into our contextual reality, may I refer to
a study by Frey and Osborne (2013) entitled “The Future of
Employment: How susceptible are jobs to computerisation?”,
wherein accountants and auditors were reported to have
a 94% chance that computerisation will lead to job losses
within the next two decades for this group. Although this
piece of news may sound alarming or even depressing, there
is, from where I stand, light at the end of the tunnel if the
accountancy profession actively embraces change. Needless
to say, an accounting qualification today offers unparalleled
career opportunities and mobility, if only we ensure that
the evolution of the profession happens in line with the big
changes that are likely to occur. I will highlight a few ideas of
my own on how I see this important profession evolving:
First, top management today requires that accountants
contribute proactively to management decision-making and
business development, and not act merely as book-keepers
and regulatory overseers. They need to ‘make history’ with the
top management team and not merely ‘record history’, and
become critical players and partners in business management
and business development teams. There is a shift in focus
from financial accounting to management accounting – In
engaging CFOs, CEOs look as much for entrepreneurial flair,
commercial savvy and business understanding, as they do
for technical ability, competence in regulatory oversight and
understanding of financial management internal control.
Second, the advent of Business Intelligence, Big Data,
Artificial Intelligence and Fintech is a reality as we speak. Far
from being a threat, this is a huge opportunity and signals
exciting times ahead. It means that accountants are released
from mundane repetitive tasks that can be automated
and released to contribute more to intrapreneurial roles in
business development and optimisation.
Third, accountancy will not be simply a profession
dealing with numbers but accountants will be called to
safeguard good company ethics, set higher standards of
integrity, and to project the values of accuracy, honesty,
objectivity, transparency and reliability that stakeholders
expect in providing a service to them and to the greater good
Fourth, qualified accountants are nowadays occupying
more leadership roles in virtually every sector, from financial
services to banking, commerce and industry, NGOs,
institutions, charities and the public sector. This means that
the importance attached to people skills and leadership in
today’s organisations among accountants will become top
priority. In fact, many qualified accountants increasingly go on
to reach CEO positions – in the UK the FTSE 100 CEO tracker
reports that over half of Britain’s top bosses have a finance
background, while one in four CEOs of FTSE corporations are
Finally, we should see more accountants of the future
embracing a strong entrepreneurial spirit as we witness a
large number of qualified accountants end up opening their
own business earlier or later in their career.
These are only a few thoughts of how the accountancy
profession and the accountants’ repertoire of skills will
expand and change in the future. As the Faculty of Economics,
Management and Accountancy, University of Malta, we are
certainly doing our best to prepare our young graduates
in this direction. Our initiatives include industry outreach,
courses intended at brokering excellence, possibilities for
overseas visits and Erasmus exchanges, thereby offering our
students/graduates a truly holistic experience.
Indeed, the accountancy profession is not destined
to finish but it will certainly be transformed. Let us all work
together to ensure that the profession retains its critical
position in the life of tomorrow’s organisation.
Frey, C.B., & Osborne, M.A. (2013) “The Future of Employment:
How susceptible are jobs to computerisation?”, Technological
forecasting and social change, Vol. 114, pp. 254-280.
10 Autumn 2018
MAZARS, HOWEVER YOU
PRONOUNCE IT, WE ARE ALL
PART OF THE SAME FAMILY.
YOUR YEARS AT MAZARS
YEARS THAT COUNT.
MAZARS IS AN INTERNATIONAL, INTEGRATED AND INDEPENDENT ORGANISATION, SPECIALISING IN AUDIT,
ACCOUNTANCY, TAX, LEGAL AND ADVISORY SERVICES. AS OF 1ST JANUARY 2018, MAZARS OPERATES
THROUGHOUT THE 84 COUNTRIES THAT MAKE UP ITS INTEGRATED PARTNERSHIP. WE DRAW ON THE
EXPERTISE OF 20,000 PROFESSIONALS TO ASSIST MAJOR INTERNATIONAL GROUPS, SMEs, PRIVATE INVESTORS
AND PUBLIC BODIES AT EVERY STAGE OF THEIR DEVELOPMENT.
www.mazars.com.mt - #LookingForTalent
32, Sovereign Building,
Zaghfran Road, Attard ATD 9012,
Tel: +356 21345 760
Recent Changes in the Master in
Accountancy Course of the
University of Malta
DR PETER J. BALDACCHINO
HEAD OF THE DEPARTMENT OF
ACCOUNTANCY AND ADVISOR
TO RECTOR, UNIVERSITY OF
MALTA AND CHAIRMAN OF THE
As many accountants will be aware, the University
of Malta has been running a professional
accountancy course since 1978. Over the years, this
course has witnessed an ever increasing demand
by students, and it has proven to be very popular
In my view, one main reason
for this is that, beyond covering the minimum
academic requirements for students to attain the
CPA warrant, it consistently included additional
features, such as a dissertation requirement in the
final year of the course, and the taking up earlier on
(at Bachelor of Commerce level) of another stream
besides accountancy – currently out of economics,
management, marketing, public policy, banking or
insurance - such inclusions providing students with
an opportunity to begin to specialise.
In addition to this, in 2012, the University
restructured its Bachelor of Accountancy (Hons)
course, upgrading it to a Master in Accountancy. A
previous article in this Journal (Autumn 2016: 52-54)
has already explained in detail the significant changes
this upgrade brought to this mainstream course in
the Maltese professional accountancy education.
Among other changes, the course introduced the
choice of one elective study unit - out of international
taxation, international financial reporting, public
sector financial reporting, financial instruments and
risk, project management and entrepreneurship and
small entity financial reporting – to provide an even
bigger opportunity to students to branch out into
more specialist areas. Furthermore, new modules
were introduced or strengthened: these included
modules in corporate governance, internal auditing,
IT auditing, financial services legislation and research
The result over the past six years has been
that of rendering the course even more in demand
(currently having about 100 postgraduates in each
year) despite its rigorous entry requirements: a 65%
minimum average pass in key study units at B Com
Further refinements to the Masters in
Accountancy have just been launched in the current
(2018/19) academic year.
The main ones are the following:
For students to have more time and to develop
more skill in selecting their dissertation theme, the
advanced research methodology course (Research
Issues in Accountancy) has been relocated from the
second semester to the first semester of the first year
of the course.
On the other hand, the elective study units
referred to above have been relocated from the first
to the final year, so as to enable students to have more
time to decide on their choice of specialist elective
topic. This change, together with the preceding
one, is also aimed at students possibly aligning their
choice of elective with their dissertation area.
A number of study units have been rearranged
in such a way as to bring more balance in study
workload throughout the four-semester course.
This involves both the timing of such units and their
examination. At the same time, the fourth (and final)
semester has been retained solely for the writing up
of the dissertation and for a contemporary issues
course, this enabling students also to meet and
discuss current issues with experts/specialists (e.g.
visiting professors, practitioners) in the accountancy
and related professions just prior to entering the
market as graduate accountants.
In the meantime, the Department has continued
to encourage the upgrading of the competencies of
12 Autumn 2018
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its academic staff, requiring all its full-timers to attain
have already graduated in other non-University
0037-BH22 Shireburn Indigo A5 Ad 2.indd 1 12/11/2018 11:06
both a Ph.D. in an area of accountancy and a CPA accountancy professional courses, but who have as
warrant. This, together with the input of around 50 yet missing Maltese Law and/or Maltese Taxation for
part-time specialist accounting practitioners, ensures them to attain their CPA warrant. Such applicants are
that the right balance between theory and practice required to sit for the relevant examinations.
continues to be inputted in the teaching of this Each of the electives referred to earlier is now also
professional course. Publications in peered-reviewed open for Maltese Certified Public Accountant warrant
journals by members of the academic staff are also on holders who want to attend for them to fulfil their
the increase, and it is planned that the Department Continued Professional Education requirements. In
will be in a position to open up also for Ph.D. courses this case participants are not required to sit for any
in accountancy within the next five years.
assessment but to attend regularly.
One finally notes that:
Accountant woman returners are being given (and
some have already taken) the opportunity to attend,
without subjecting themselves to any assessment,
two of the indicated advanced major accountancy
study units in the Master in Accountancy course
so that they may catch up with their Continuing
Professional Education hours missed during their
years of absence from accountancy-related work.
As from the academic year 2018/19, at the
request of both the Accountancy Board and the
Malta Institute of Accountants, the Department
of Accountancy has made available the relevant
Master in Accountancy study units for those who
Applications for any of the above are normally
done each summer and for the following academic
year. For further enquiries, one may also contact the
Department of Accountancy on 2340 3357/2700.
Is our workforce ready
for an age of acceleration?
AN AUDITOR BY PROFESSION,
LISA IS A PARTNER AT PWC
MALTA WITH RESPONSIBILITY FOR
HUMAN CAPITAL AND FOR PWC’s
I have a son aged fourteen. As he embarks on what is
to be the start of a long student journey that should equip
him with what is required to join the workforce, my biggest
concern remains his future employability. My concern
does not emanate from a common concern that robots
might replace human activity but rather from a more basic
concern: whether our current teaching methodologies
are preparing him and our young generations adequately
for the skillset which the workforce of the not-so-far
future will need.
The world in which we operate is going through rapid
change - one where transformation is a reality - accelerated
among other things by the onset of the new digital era. As
a parent and as an employer, I often wonder whether, as a
country, we are equipped enough for this transformation;
and whether our education system is agile enough in the
face of these accelerated changes. How prepared are this
and future generations, how prepared is the country’s
current and future workforce, how prepared are our
current and future leaders for the agility and flexibility that
will, without doubt, be required of them?
Individuals’ preferences, behaviour and interactions
are evolving, and the way in which organisations operate
is also transforming. This shift poses important questions
about the skills which will be required in future, our
assumptions about careers and employment, and the
extent to which Artificial Intelligence (AI), machine
learning and robotic process automation will enhance,
lessen or replace human activity. Now, more than ever,
our educators, employers and business leaders need
to collaborate, to anticipate, to plan and implement a
fully-fledged strategy that will enable Malta to build the
workforce of the future. And we must act fast, if we want
to remain relevant and competitive.
The change that we require needs to start at the very
heart of our education system – it needs to focus on the
country’s vision for education, the quality of teaching and
the agility to transform and remain sustainable.
The quality of teaching, a sustainable approach
To achieve the success that other countries have
achieved within education, we need to study and analyse
their success factors in depth. Finland, for instance, is
without doubt a pioneer and a world leader in this area.
For starters, the teaching profession in Finland is highly
valued, it follows a school system based on equality and
trains teachers through science-based programmes.
Teachers are free to choose their methodologies. Their
aim is to equip students with a ‘can do’ attitude, a creative
mindset, a problem-solving outlook and agility to adapt –
all factors that are somewhat distinct from our country’s
exam focused culture.
The speed at which the world is changing and the
digital era within which we are operating must be planned
and catered for. Teaching methodologies cannot stagnate
when everything else around us is changing. Not only must
teaching content change but too must methodologies –
moving away from an individualistic class-based approach
into a team project-based approach, moving away from a
one-man, one-solution mindset to solving complex issues
together, moving away from a hand-holding culture to a
research-based, collaborative culture.
Learning skills rather than subjects
While businesses today are in need of highlydeveloped
talent in a wide array of specialized areas,
employers and graduates often realize that there is a
mismatch between what qualifications prepare our
graduates for and the career-relevant skills that the
modern workplace demands. The solution lies in the next
level of innovation in learning to address this skills gap.
Traditionally, teachers primarily teach and have
taught school subjects. We now need to move away from
teaching subjects and towards a future where teachers
will increasingly teach comprehensive learning skills.
We need to move away from learning mechanically and
move into a space that our children, our young adults and
our more mature audiences are active learners and fully
engaged. This will make teaching and training problem
and phenomenon based, developing learners’ analytical,
problem-solving and thinking skills. It will lead to a much-
14 Autumn 2018
awaited shift towards cross-disciplinary learning concepts,
methodologies and programmes in a technology-driven
learning environment. This approach enables learners to
learn how to learn, to be constantly learning new things
- an approach that will generate an agile and flexible
workforce. This ‘adaptive learner’ methodology is indeed
the sustainable approach in the face of the impact of
emerging technologies and changing work patterns.
Embracing technology, not resisting it
Embracing the digital era and managing the human
interface with technology is critical to educators and
employers. Our learning methodologies need to
incorporate technology and employers need to assess
not only the opportunities, but also the challenges of
leveraging exciting new technologies like AI and machine
learning to deliver value for customers. The key to
success lies in retaining human insight, skill, creativity
and oversight, while exploiting the analytical power,
personalisation, customer convenience, speed and reach
that technology offers.
Our schools, university and our higher education
institutions must support this fundamental change
by investing in continuous development, in learning
and in research-based teacher education. Hypersonic
accelerations of technology and data should stimulate
innovative educators to create new pedagogical systems
that empower students with the skills today to lead
At the corporate level, transformation in learning is
upon us. It is rapidly shifting into, virtual learning blending
in with classroom learning. I have personally witnessed this
evolution of service offering in our Academy. C-suite clients
and corporates are no longer looking for training sessions.
They expect a service offering that blends the use of oneto-one
coaching, with the use of online learning platforms
and the more traditional face-to-face classroom learning.
Although they may initially reach out to us to foster the
growth and development of skills gaps based on their
specific needs and industry requirements, demand quickly
evolves into a need to co-create strategies and to assist
them with innovating their businesses through advanced
techniques such as design thinking. The form and shape of
learning is indeed shifting, and it is doing so continuously.
“So, what should we tell our children? That to stay
ahead, you need to focus on your ability to continuously
adapt, engage with others in that process, and most
importantly retain your core sense of identity and values.
For students, it’s not just about acquiring knowledge,
but about how to learn. For the rest of us, we should
remember that intellectual complacency is not our friend
and that learning – not just new things but new ways of
thinking – is a life-long endeavour.” Blair Sheppard Global
Leader, Strategy and Leadership Development, PwC
I have purposely decided to focus this article on
learning and education across professions and not to
limit it to the accounting profession. I firmly believe
that the challenges and opportunities we are facing are
nation-wide and not profession-specific. They are indeed
a reflection of the megatrends and the pace of change
we are facing, indeed one which is accelerating. This
acceleration does not allow us time to sit back and wait
for events to unfold but it is a time to be prepared for
the future. In order to retain its competitive edge, Malta
must outline a nation-wide strategy that brings together
all stakeholders with the aim to be agile in the co-creation
of an education system that fully prepares the nation’s
workforce of the future.
Asonitou Sofia, 2015, The Evolution of Accounting Education
and the Development of Skills (Technological Educational Institute of
Azizul Islam, Muhammad,2017 , Future of Accounting Profession:
Three Major Changes and Implications for Teaching and Research
Mathews M.R. 2010, The way forward for accounting education?
A comment on Albrecht and Sack 'A Perilous Future'
16 Autumn 2018
Key trends shaping the transformation of the
accounting industry and its impact on the
profession education program
The global economy is changing at a very fast pace. This is bringing with it a number of changes and challenges
to the accounting profession, which must keep up with the pace of change. Accounting education, both at
universities and other higher education providers, must ensure that the newly qualified accountants develop
not only the technical expertise to help organisations sustain economic growth but they must supplement
this with highly developed personal skills and professional qualities.
Drivers for change
In its report, Professional accountants – the future: Drivers
of change and future skills (Accaglobal.com, 2016), ACCA
identified the main drivers for change that will impact the
accounting profession in the years to 2025 together with the
skills and competencies that will be required by professional
accountants in the future.
According to this report (Accaglobal.com, 2016, pg.
10), the drivers that will bring about major changes to the
accountancy profession are:
1. Regulation and governance
2. Digital technologies
3. Expectations on professional accountants
to look beyond the numbers
Regulation and governance
In the coming years, increased regulation and stronger
governance are expected to have the greatest impact on the
accounting profession. We have seen in recent years how
well-known frauds and scandals have led to an exceptionally
huge increase in the demand for forensic accounting services.
It is expected that tax specialists will experience the greatest
challenges following intergovernmental tax action to limit
base erosion and profit-sharing (Accaglobal.com, 2016, pg.
We are living in a world that is being driven by the quick
advancements in technology.
In their book, The Future of the Professions: How
Technology Will Transform the Work of Human Experts
(Susskind and Susskind, 2015), the authors forecast two
different futures for professions. First, professionals are
expected to use increasingly sophisticated technologies to
enhance their traditional ways of working. Second, intelligent
automated accounting systems (e.g. cloud-based accounting
systems) are being developed and these are expected to
displace the work of traditional professionals.
Blockchain and its related applications are expected to
make a huge change to the accounting profession. These
have the potential to enhance the accounting profession by
reducing the costs of maintaining and reconciling ledgers.
Accountants can gain clarity over the available resources and
obligations of their organisations (Icaew.com, 2017).
The large amount of data being collected, processed,
stored and communicated has transformed the way in
which business is being done. Big data and data analytics can
enhance the work that accountants do and the contributions
that they make to their organization. Expert use of analytics
will enhance financial reporting. Data analytics tools help
accounting professionals create more accurate and detailed
forecasts. These tools allow professionals to link financial and
non-financial performance and provide more comprehensive
reporting of their performance to shareholders and other
stakeholders (Cfoinnovation.com, 2017).
What will be expected of professional accountants?
Professional accountants will be required to look beyond the
numbers; they need to interpret and explain these numbers.
They will need to analyse a broader range of data, provide
forward-looking information and help organizations to
achieve their objectives. Professional accountants will need
to make professional judgements by acting with integrity and
exercising objectivity and professional skepticism.
More organisations are expanding across borders to
enhance further their long-term success. This creates more
opportunities and challenges to professional accountants
who have to develop the required interpersonal skills to work
successfully with people from different countries and culture.
Globalisation increases the importance of accountants
keeping abreast with global issues and adapting to any
changes that may occur. This issue of globalisation is foreseen
in the continuing harmonisation of accounting standards.
Impact on the professional education program
How will these changes affect accounting education?
Accounting graduates will need to have better developed
professional skills to succeed in the future ((Cpaaustralia.com.
MICHELLE VASSALLO PULIS
MICHELLE VASSALLO PULIS,
SENIOR MANAGER PWC'S
ACADEMY, HAS BEEN GUIDING
STUDENTS AND DELIVERING
ACCA LECTURES IN FINANCIAL
AND MANAGEMENT ACCOUNTING
In its 2016 report, ACCA has identified seven professional
quotients of success, i.e. seven future skills which professional
accountants of the future will need to develop:
“Technical skills and ethics: The skills and abilities
to perform activities consistently to a defined
standard while maintaining the highest standards of
integrity, independence and skepticism.
Intelligence: The ability to acquire and use
knowledge: thinking, reasoning and solving problems.
Creative: The ability to use existing knowledge
in a new situation, to make connections, explore
potential outcomes, and generate new ideas.
Digital: The awareness and application of existing
and emerging digital technologies, capabilities,
practices and strategies.
Emotional intelligence: The ability to identify
your own emotions and those of others, harness and
apply them to tasks, and regulate and manage them.
Vision: The ability to anticipate future trends
accurately by extrapolating existing trends and facts,
and filling the gaps by thinking innovatively.
Experience: The ability and skills to understand
customer expectations, meet desired outcomes and
create value.” (Accaglobal.com, 2016, pg. 26)
Universities and higher education providers must ensure that
accounting graduates will possess these professional skills
and knowledge. Lecturers need to broaden their own skills in
order to assist students to apply these skills in the real world.
How can this be achieved?
In a study carried out recently, Shaping the Future of
Accounting in Business Education in Australia ((Cpaaustralia.
com.au, 2015)), participants were asked to suggest strategies
for higher education providers to produce graduates who
possess the necessary skills and knowledge required for the
Some suggestions included:
To broaden the areas of studies, e.g. the need
to include study units on cloud computing, data
analytics, integrated reporting, digital technology;
To include work integrated learning initiatives
(internships) as part of the study program and use
related learning strategies (including integrated case
To involve organisations, firms and alumni more
in the classroom and even online;
To integrate the development of professional
skills across the whole curriculum;
To increase focus on the social, environmental
and ethical aspects of accounting.
The changing demands on the skill requirements for
accountants will reflect directly on the provision of education.
Recently, a number of accounting education providers have
introduced changes to their qualification to ensure that it
remains relevant and it develops professional accountants
with the skills and knowledge required. Integrated case
studies using real-world scenarios have been introduced
where the students are required to blend technical,
professional and ethics skills in evaluating the information
given and presenting their answer. Ethics modules have been
developed where the student needs to demonstrate that
he/she understands and can apply ethical and professional
behavior in real-world work situations.
The four drivers of change, regulation and governance,
digital technologies, expectations and globalisation, are
proving to be a major challenge to the accounting profession.
Accounting education providers must ensure that their
qualifications remain relevant: they must ensure that their
qualifications are equipping students with a unique blend of
professional skills and technical knowledge, which is required
in a rapidly changing business landscape.
Accaglobal.com. (2016). [online] Available at: https://www.accaglobal.com/content/
[Accessed 9 Oct. 2018].
Cfoinnovation.com. (2017). Are You Ready? Data Analytics Is Reshaping the Work
of Accountants | CFO Innovation. [online] Available at: https://www.cfoinnovation.
[Accessed 10 Oct. 2018].
Cpaaustralia.com.au. (2015). [online] Available at: https://www.cpaaustralia.com.
shaping-the-future-final-report.pdf?la=en [Accessed 9 Oct. 2018].
Icaew.com. (2017). Blockchain and the future of accountancy. [online] Available
blockchain-and-the-accounting-perspective [Accessed 9 Oct. 2018].
Icas.com. (2017). The end of the accounting profession as we know it? | News |
ICAS. [online] Available at: https://www.icas.com/ca-today-news/the-end-of-theaccounting-profession-as-we-know-it
[Accessed 9 Oct. 2018].
Ifac.org. (2017). Future of Accounting Profession: Three Major Changes and
Implications for Teaching and Research | IFAC. [online] Available at: https://www.ifac.
[Accessed 9 Oct. 2018].
Krepublishers.com. (2013). [online] Available at: http://krepublishers.com/02-
181-Fouche-J-P/IJES-05-2-137-13-181-Fouche-J-P-Tt.pdf [Accessed 9 Oct. 2018].
Susskind, D. and Susskind, R. (2015). The Future of the Professions: How Technology
Will Transform the Work of Human Experts. Oxford University Press.
18 Autumn 2018
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LEARNING AND WORKING –
PROF. JOACHIM JAMES CALLEJA
PROFESSOR JOACHIM JAMES
CALLEJA IS THE PRINCIPAL & CEO
OF THE MALTA COLLEGE OF ARTS,
SCIENCE AND TECHNOLOGY
AND FORMER DIRECTOR OF THE
EUROPEAN AGENCY CEDEFOP.
Technology has revolutionised the way we
learn and work. We already spend more time
attached to machines such as computers,
laptops and mobile phones than interacting
with human beings. Most of us feel lost without
inputting, sharing and receiving electronic data. We
are constantly searching for information and are
forever engaged in exchange of communication. We
expect immediate feedback and communicate ideas,
decisions and opinions in real time. All employment
sectors are deeply affected by this chain revolution.
Accountancy is no exception. The way accountants
work today is decidedly influenced by technology.
Reporting in accountancy is faster, more accurate,
contains substantial amounts of electronically
researched information and is becoming a more
reliable source for transparency, efficiency and
effectiveness of businesses all over the world.
There is clearly a chain effect to most operations
on places of work. Workers are becoming more
dependent on machines than on fellow colleagues.
At the same time employers lament that the skills
they look for in our young workers are insufficient
for the workplace. There is a widening gap between
the world of education and training, and the world
of employment. The claim from employers is that
relevancy of educational programmes does not
match the advancements in most work environments.
On the other hand, educational institutions argue
that because of shrinking resources their learning
environments lack the necessary infrastructure and
expertise to cope with developments in work places.
The truth is that no matter how many resources are
thrown into education and training for high-tech
work environments it is impossible to generate fully
prepared human capital.
In acknowledging these new realities, one would
have taken the first step towards work-based learning.
The field of accountancy is for instance known for
producing hands-on employees who can hit the
ground running. This is because the divide between
the world of education and training and employment
has been narrowed throughout the years and in
particular through a more professional approach by
the accountancy industry itself. The chain between a
learning and a working environment in accountancy
has not been broken.
Work-based learning is the future of education
and training. This implies that all learning designed
to make people employable must be based on two
overarching principles. The first is that qualifications
(or the evidence of what a person knows and is able
to do) must be industry driven. The second is that
we need more community lead curricula. The first
ensures preparedness, the second relevancy. The
link between learning outcomes and relevancy of
content to real work is the key to a sound education
and training environment. Young people need to
be attracted to learning environments that enable
them to endure a structured learning process in
formal settings. In fact, most learners leave school
earlier because a one size fits all approach in formal
education and training settings does not match
their mind-sets and the culture of learning in our
age of technology. Speed has truly penetrated into
20 Autumn 2018
a digital chain revolution
all spheres of our lives. Our attention span has been
severely dented by the immediacy of the acquisition
of information. Evidence of this is the way we flick
through a newspaper, scroll a document on internet,
watch television or listen to the radio. We impatiently
jump from one cluster of information, image and
sound to another in repeated behaviours which at
times are done unconsciously and unintentionally.
This same pattern of behaviour is reflected in the
way we learn and the way we work. Hence the need
that these two sectors work with each other in a
more structured and interchanging way. In this age of
technology educators and employers are increasingly
becoming shareholders (and not just stakeholders)
of the same process. A person learns while he
works and works while he learns. Technology has
built a new common ground which will make or
break working and learning environments. As a
result of this sequence of developments, educators
and employers in highly developed countries are
seeking partnerships more than ever before. These
are reflected on the one hand, in the increase of
apprenticeships and other forms of work-based
learning and on the other hand, in continuous
professional development programmes which are
now obligatory, after qualification.
In a world which is changing so fast, the
biggest error professions can make is to freeze
the development of their members or leave it
optional. Looking at the strength of the accountancy
profession, one of the key lessons to be learnt is that
being an accountant requires obligatory updating, retraining
and re-skilling. It is obvious that work in itself
is a learning experience much more than the formal
learning experience per se. However, formal learning
in educational institutions also has enormous added
value in that it enables learners to share experiences,
learn from each other, discover new methods of
enhancing their profession and becoming more
Businesses failure or success today largely hinges
on the ability to adapt, adopt and adjust to innovation
and sustainability. With the advancements of
technology, bridging the gaps between the world of
education and training and the world of employment
is not an option anymore. The accountancy
profession is a shining example of this trend and a
model on which other slow-developing disciplines
and professions should adopt to move towards
continued existence. Evidence shows that because
of technology thousands of jobs will be lost and
equally others created. The chain effect that workbased
learning creates is the adequate response to
these compelling developments. Moving away from
being stakeholders to becoming shareholders of each
other’s domain, educators and employers hold the
key to a country’s economic and social realisation, or
Malta has an educational system with strong
roots in academic and vocational education and
training. Public funding of education has been
increasing for many years. Learners who enrol at
University or at MCAST today have an open pathway
to a higher education qualification. This is particularly
important in a labour market where a degree is
the basic stepping stone towards a sustainable
career and a person’s quality of life. As a result of
technology, practically all jobs will sooner rather than
later become very professional.
Hence the importance of key competences
(in compulsory education) and a higher education
qualification as pre-requisites of employability; the
need for employers to engage more cogently in
education and training and, increased agility and
foresight in investing in the infrastructure of vocational
training by government and industry together.
CPE FOR ACCOUNTANTS:
A NECESSARY BURDEN?
It is all a matter of trust! For many years, accountants have been the foundation of business interactions; providing information
to managers, shareholders, and investors for decision-making. This responsibility imposes multiple duties on accountants,
one being to remain relevant and up-to-date with changes taking place in their professional environment.
GRADUATED WITH A MASTER IN
ACCOUNTANCY DEGREE FROM
THE UNIVERSITY OF MALTA. HE
IS CURRENTLY WORKING WITHIN
THE COMPANY ADMINISTRATION
AND ACCOUNTING SERVICES
TEAM AT PWC.
Working in a Dynamic Environment
In the last couple of years, the accountancy world has
been characterised by an endless wave of changes in
accounting principles, standards and regulations. These
changes have placed a huge burden on accountants,
resulting in a challenge for professional maintenance
which, if not dealt with leads to outdated skills and
knowledge. One should also keep in mind that
accountants are not only concerned with changes taking
place in accounting standards, but also in any change that
takes place within their clients’ industry. This inevitably
imposes a duty on accountants to continuously update
their skills and knowledge, which requires commitment
from the accountants’ side, together with openmindedness
Leaping the Hurdle of Professional Maintenance
With 90.7% of local accountants considering the duty to
maintain professional competence as a challenge in their
profession, there was a statistical significance indicating
that accountants need a proper professional maintenance
tool. Presuming that Continuing Professional Education
(CPE) fulfils its purpose in this regard, regulators adopted
CPE as a tool to equip practitioners for the dynamic
world out there. If CPE fulfils this purpose, the public
should benefit from peace of mind that accountants
are technically competent and up-to-date with changes
taking place in the profession. However, the question
arises; is CPE fulfilling this purpose?
The Undesired Reality
In reality, most accountants do not feel that the
mandatory CPE requirement is providing reasonable
assurance to the society that accountants are technically
competent. This lack of confidence in CPE among the
local accountancy profession can be blamed on the
common perception among practitioners that CPE has
become the hours one needs to secure his warrant,
rather than a means of professional development.
Although most professionals want CPE activities to confer
legitimacy on their learning, most of the practitioners
and their employers do not believe that compliance with
the current requirement could genuinely demonstrate
their competence. This issue relates to what is referred to
by most as the compliance mentality.
The main cause of this mentality was the shift
adopted by most regulators from voluntary to mandatory
CPE policies. The prevalent attitude among accountants
is that attendance at CPE sessions is happening just
for the sake of meeting the requirement. This shows
that in certain instances attendance at CPE activities is
not reflecting real competency, but rather regulatory
compliance. Besides this, accountants are highly sceptical
about the validity of course attendance certificates.
The majority believe that certificates of attendance
only indicate physical presence and not professional
development. Certificates of attendance are not a proof
that an individual has gained professional development
from a CPE activity; not even whether the individual has
even paid attention to the speaker.
Even though most practitioners blame the
mandatory nature of CPE as the cause for this mentality,
they still prefer and support mandatory policies. The
majority argue that without a mandatory requirement,
time and work pressures will suppress any motivation
for one to engage in CPE, which is the ultimate
drawback of a voluntary approach. Moreover, the
mandatory requirement strengthens the reputation of
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the accountancy profession, since it is one of the few
professions which has a compulsory CPE requirement.
So, what is to blame?
According to most accountants, it is the measurement
approach adopted by regulators to monitor CPE. How
can the learning that takes place in a classroom, on the
job, or through reading or studying, be measured? This
question is deemed by most CPE specialists as the reason
for CPE being considered as a complex concept for those
regulating it. Regulatory bodies in various professions
have long sought a measurement model which would
capture the benefit gained from CPE.
To date, regulatory and professional bodies have not
yet reached a consensus as to which approach is best
to measure CPE. The traditional approach used in most
jurisdictions; which is also the case in Malta, is the inputbased
approach which uses the number of hours as the
measurement unit. The other extreme which is adopted
by few jurisdictions is the output-based approach
whereby the regulator measures the level of professional
maintenance and development by means of assessment
after each CPE activity.
When presented with these options, most
practitioners agreed that a combination of both
approaches would provide a better way for regulators
to evaluate the effectiveness of CPE. An approach
which monitors CPE hours, while involving some form of
assessment, provides a better degree of assurance that
practitioners are gaining professional development from
CPE activities. The drawback of this approach lies in the
fact that only few people are ready to submit themselves
to regular assessment. Indeed, most practitioners are
aware that this is the ideal way of evaluating CPE, but they
are not willing to commit to further forms of assessment.
The Role of Employers
Apart from the measurement approach, accountants
feel that the perception held by their employer towards
professional maintenance and development can also act
as a motivator or a deterrent towards CPE. Fortunately,
most accounting firms are promoting a learning culture
among their personnel, with the aim of ensuring
proficient service to their clients. In fact, in Malta those
working with accountancy or audit firms, tend to find it
easier to meet the CPE requirement, when compared to
those working in the industry or as sole practitioners. The
difference among these employment categories relate
strongly to the employers’ support of CPE. Employers
in the industry are generally less interested in CPE since
their personnel need not be proficient in vast accounting
practices, other than their own specialised industry.
The Way Forward
It is all up to three key stakeholders; (i) regulatory bodies,
(ii) employers and (iii) accountants themselves.
In order to ensure that all CPE is of high quality,
regulators ought to impose more due diligence on
speakers of CPE activities. One should keep in mind that
although an individual may be an expert in a certain area
of accounting practice, it does not necessarily mean
that he/she is capable of effectively imparting his skills
to others. Secondly, online CPE should be given more
importance. For most practitioners, online CPE is an
attractive option which provides them with flexibility
that class-based activities lack. Finally, regulators should
encourage and incentivise employers to offer in-house
CPE or sponsor external CPE courses for their accounting
personnel. In line with this, employers should uphold a
learning culture which promotes continuous learning
and development. More value should be attached to this
activity, which may seem futile, but in reality, is adding
value to every organisation.
Lastly and most importantly is the approach adopted
by accountants themselves towards CPE. In order to
make CPE activities more interesting and interactive,
practitioners should be more participative. Through
discussions and questions, the speaker can delve
deeper in certain intricacies which may be of interest
to other practitioners attending the session. Moreover,
accountants should provide CPE service providers with
feedback and suggestions for improvement, together
with suggestions about new topics on which CPE
activities are rarely conducted. Being the ones facing the
industry, accountants are in the ideal position to identify
areas which require professional maintenance and
So, is CPE a necessary burden?
When accountants in the local industry were asked this
question, the majority held that CPE is a necessary
burden. This is an acknowledgement that CPE is
something accountants deem fundamental for their
professional status; however, due to certain instances,
such as hectic schedules and time constraints, it may also
be perceived as a burden.
24 Autumn 2018
The Complex World
of Financial Analysis
The financial world is a complex equation with hundreds of variables
that dictate what actions people will take in pursuit to generate
wealth from their savings. The majority of the world’s population
have little or no knowhow in managing their life savings, and thus
rely on the few who act as intermediaries between the savings of the
masses and the financial markets where wealth is generated.
Why do I need Math for Finance?
This is a very legitimate question, and I will walk you
through a real-life example and show how math
helps to answer key questions at each stage of
I will start with a simple hypothetical scenario
that I feel is not too far off from reality. Suppose you
find out that Apple Corp is releasing a new line of
consumer tech products that have been rumoured
to change the face of the tech industry in the years
to come. You’ve always been very attracted to their
products and with this news you are even more
excited than before. You also happen to have a small
but descent sum of money dormant in your bank
account and never really wrapped your head around
what to do with it.
MR JULIAN CARDONA
MR JULIAN CARDONA, A
STATISTICIAN AND A LECTURER
IN INVESTMENT MANAGEMENT,
CORPORATE FINANCE & RISK
MANAGEMENT AT SAINT MARTIN’s
INSTITUTE OF HIGHER EDUCATION
Is this perhaps the right time to invest in Apple stock?
just around the corner, enticing
you to jump ship into the new
A quick look at stock price chart above shows
you that, had you invested money two years ago, you
would have bought 1 unit of stock at roughly $96 and
today it would be worth roughly $184. That’s more
than a 100% increase, meaning your money would
have more than doubled in just two years! Which
bank, secure as it may be, can come even close to
these kinds of return?
It seems like a no brainer: you like the company’s
strategy, returns have been exceptional, and the
alternatives pale in comparison. Unfortunately, at
this point, many would simply phone their broker (or
log in their online platform) and order some Apple
stock without digging deeper into what’s beneath
the hood. And this is fine, because it is your money
after all. It could turn out great and you triple your
savings in a few years. But if you are fund manager,
you are managing other people’s savings, and
your profession requires that you look under the
hood — and thoroughly — else you may be liable to
misappropriation and mishandling with long years
Any stock climbing up a mountain might find
the route a bit choppy and the amateur may run
into a number of disappointments. Mathematics
will not completely avoid these disappointments,
but it will tell you how likely these disappointments
are going to be and if they can be so severe as to
wipe away a substantial share of your original savings
even before you actually start seeing some positive
results. You might tell me “that’s absolutely fine for
me: I am a patient person and can take a few hits on
the way to success.” My answer, having studied the
psychology behind investing money, is very simple:
Never, ever underestimate your potential to make
quick, irrational decisions; especially if things are not
going your way for a long period of time and there
are some super attractive alternative investments
It is clear that we need more
information than simply looking
at prices and reading about the
company’s plans for the future.
The second big question (and
by far the most important
one) is this: What is my risk?
Even though there are long
and technical answers to that
question, I am going to try and give you the gist of
what one can do with some very simple mathematical
tools learned during a sound degree in finance.
Normal Distribtution with Mean 30 and Standard Deviation 10
We need some forecasting tools: something
that will tell me “The return on your investment can
be in the range of x to y % with this likelihood. The
most important piece of machinery that you will be
learning about in this course is our dear old Normal
Distribution, pictured below.
Apple Daily Return Probabilities
This famous bell shaped can be found everywhere:
biology, economics, finance, physics etc. It tells you,
in a nutshell, that numbers around the average are
the most likely and everything else is symmetrical
Applying the normal distribution to my analysis of
Apple Corp stock, I could have a road map telling how
likely or unlikely certain gains and losses are in the
future, based on past performance. Quite neat! Let’s
26 Autumn 2018
see if our returns on Apple Corp stock (notice that
I apply it on returns and not to prices) are roughly
shaped in this manner.
Using some Excel tricks that you will learn, you
can see that the chart above could be called a distant
cousin to the Normal Distribution (nothing will ever
be perfectly Normal in practice) and, for the sake
of this discussion, we can assume that our returns
follow a Bell-Shaped curve with the peak being close
to 0% daily returns (not a surprise here because in
practice you should not expect any money within
the very short period of a day). In practice there are
various statistical tests that one can do but they are
beyond the scope of this exercise.
So now that we have assumed that our Apple returns
follow a normal distribution with average daily
return of 0% we can start thinking about doing some
forecasting. Can we create a tool which accepts an
input and gives us an output for expected return?
The answer to this is “yes!” and the technique (that
you will also learn in class) is called Regression.
Before going into the details of what Regression
is, I would like to discuss this question with you: Since
Apple is a company that is part of the Tech industry,
is it reasonable to think that what happens in the
tech industry in general can have a major effect on
Apple’s fortunes as a company? Intuitively we might
think that the answer is “yes”. This is because every
company out there is affected by both internal affairs
(profitability, efficiency of personnel, technological
breakthroughs, scandals and conflict etc) and also
system-wide affairs (economy, inflation, tourism,
media relations etc). It is, therefore, fair to ask by
“how much” the Tech industry effects the fortunes
of Apple. The Regression tool that you will learn in
this course tackles exactly this problem. If some
conditions on your data are satisfied (errors look like
a bell-shaped graph etc) you can safely apply this tool
and get some forecasts on future data points to a
reasonable degree of accuracy.
I will use this technique here and try to find
the strength of the relationship between the Tech
industry and Apple. To do this, I will use the NASDAQ
index, which is the Index following the top Tech
companies in the US, and measure the strength of
the linear relationship between NASDAQ index and
Apple stock. In a nutshell, what regression does is it
attempts to fit a straight line (called line of Best Fit)
to a scatter plot formed between Apple Returns and
NASDAQ Index Returns, just like the chart below:
Focusing only on the last 2 years of daily data and
applying the in-built Excel Regression function I get
the following relationship:
Apple Returns =
NASDAQ Returns * 1.05 + 0.000414
Notice that this has the classical Y = mX + C Straight
Line format that you learnt at school. This is because we are
fitting a line. The 1.05 is the gradient and the 0.000414 is the
y-intercept. Notice also that since NASDAQ returns are my
“X-Variable”, they are being used to predict the “Y-Variable”,
in this case Apple Returns.
The interpretation is that 1% increase in NASDAQ
returns leads to 1.05% increase in the returns of
Apple. It is to be kept in mind that this discussion
is very basic, and in practice things are more
complicated. However, this example should be a
good taste of the type of analytical tools that will
be applied in a finance degree to take a “Scientific
Approach” to the decision-making problem of
Investment. The Above indicates that if we could
find a trend for NASDAQ returns (being an index it is
easier to find such a trend) we could then apply the
above formula to forecast Apple Corp returns in the
next day. In practice you would want to apply such an
analysis to at least monthly or quarterly data to have
more predictive power.
Nasdaq Moving Avarage
How do we find a trend? Another tool that you will
be learning is known as the “Moving Average”. As its
name implies, applying this technique is just a matter
of finding a sequence of averages to your data,
moving through time. This will give you an average
that moves through time, and thus gives you an
indication of the trend. I have used here something a
little bit more sophisticated known as the Exponential
Moving Average, also very simple to apply. This
method allows me to fit a trend for NASDAQ Prices
as in adjoining graph.
Notice that this is just a seven-month Snippet.
Using this MA method I can calculate that the next
price in the daily series is going to be $7,549, even
though the price is currently $7,568 at the time of
writing (I am using an index that tracks the NASDAQ
called ^IXIC). This is because our moving average is
picking up some negative trend that is developing as
it is considering not just the current price, but the
current trend. I repeat that this would be much more
insightful if it were monthly or quarterly data, but
for the basis of this discussion it will suffice. If I know
the next price, I know the next return. If price drops
to $7,549 tomorrow, that’s a predicted 0.3% drop in
Using our regression equation above we get that
the predicted return for Apple Corp. tomorrow is
1.05*-0.3% + 0.000414 = -0.00274 or -0.3% as well. I
am sure you appreciate that this could be simply due
to daily random movements in the market and not
an actual trend, and this is why the numbers would
make much more sense if taken quarterly, so aspects
like seasonality (effects of seasons) can be captured.
Another important point to mention is that all of
these predictions (even if done on a quarterly basis)
are not infallible and are only correct up to a certain
probability level which, as you will later on learn, is
known as “Level of Significance”.
Worst Case Scenario
One final question that any self-respecting
investor should ask is “What is the worst-case
scenario?” Obviously, the answer is “You lose
everything,” but not investing because of such an illinspired
answer would be like never getting outside
of the house because you could get hit by a bolt
of lightning. Luckily, there is a more sophisticated
answer to that question and it involves a very
important concept known as VaR or Value at Risk. This
tool simply seeks to answer the following question:
“What is my maximum loss from an investment,
in a particular period of time and with a particular
probability?” If you look at Apple’s history, there was
one day during the dot com bubble of 2000 where
the stock lost 75%! Can you imagine that? Waking up
one day and losing 75% of your investment? Luckily
this was a one-off and is very unlikely to happen
often. So what is a realistic expectation of loss? To
answer this question we need to learn a statistical
tool known as Standard Deviation. This number gives
you an indication of how your losses and returns are
dispersed around the mean (which in our case for
Apple was 0%) and it is vital to calculating the Value
at Risk. So, for the sake of argument, let us say I want
to know my worst case scenario for a 1 day loss with
95% probability. Luckily, we know that our returns
are roughly Normally Distributed and we can the
following VaR formula:
Using the in-built Standard Deviation Excel
function I get that the 1 day Standard Deviation for
Apple Corp. is 2.9%. Plugging these numbers in the
above formula (let us say we invest $1000) we get:
1-day 95% Variance = Amount * 1 day Stdev*1.645
- Amount is the amount of money invested
- 1 day stdev is the Standard deviation for daily returns
- 1.645 is a number closely related to the Normal
Distribution (derivation of wich is beyond the scope of
1 day 95% VaR = 1000 * 0.029 * 1.645 which is
approximately $50. This means that I am 95% sure
that my losses in 1 day will be a maximum of $50,
which is a far cry from the 75% loss that happened
on that faithful day during the Dot Com Bubble crash
28 Autumn 2018
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You will also establish policies that promote company culture and vision and support in
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YOUR CAREER, OUR PROMISE.
THE RELEVANCE of ethics to management
education in the accounting profession.
ARIANE AZZOPARDI IS AN
ASSOCIATE DIRECTOR AT KPMG
MALTA WITHIN THE QUALITY &
RISK MANAGEMENT FUNCTION
It is sometimes questioned whether professional
judgment and ethics can be taught. Prior to the
major corporate scandals involving auditors and
accountants, the education model for accountants
focussed mainly on teaching the technical elements
of accounting. We have slowly seen a shift in more
recent years of including the ethical and moral aspect
of the profession and ethics which are being included
and discussed in the educational programmes and
curriculums for accountants.
The goal of including ethics within the curriculum
is to help individuals acquire skills to deal effectively
with ethical challenges they may come across during
the course of their work and provide them with the
necessary tools and guidance when they encounter
ambiguous situations in practice. This cannot be
achieved by solely studying the code of ethics and
professional conduct, but rather a process whereby
individuals become more consciously involved in making
ethical decisions and this is brought by including it in the
educational system for accountants and also through
mentoring programmes during the professional career.
Accounting is a profession demanding expertise
and accountants have clients who depend on the said
expertise. At the same time, accounting has an ethical
dimension. An accountant has the responsibility to act
in the public interest and not solely to satisfy the needs
of the employing organisation or client. In carrying
out their responsibilities as professionals, accountants
should exercise professional skeptiscm and moral
judgment in all the activities. Education of ethics should
be the teaching of the subject to students carrying
out the various courses available for the accountancy
profession and also a continuous education during
the professional career. Ethics education is not a list
of dos and don’ts, as this can give the misconception
that anything is acceptable if it’s not specifically
forbidden. Ethics education is a journey of sensitisation
and development where one becomes more aware
of the ethical dimensions of matters and challenges
encountered. Enriching ethics in accounting education
will change the mind-set and will assist the accountants
develop skills to assist them with actioning such critical
Ethics education can provide insights into how to
adjudicate between conflicting principles and show
why certain courses of action are more desirable than
others. Ethics education, as defined by Langenderfer
and Rockness, is more than studying the code of
professional conduct, but rather a process whereby
individuals become more consciously involved in
making ethical decisions.
The objectives of Ethics education are to
• Relate accounting education to moral issues
in a business context
• Provide the members of the profession
with the tools to take decisions that have ethical
• Develop a sense of moral obligation and
• Develop the skills required to deal with ethical
conflicts or dilemmas
• Develop the skills to deal with the ambiguities
of the accounting profession
The IESBA Code of Ethics which is applicable to the
professional accountants specifies that a professional
accountant's responsibility is not exclusively to satisfy
the needs of an individual client or employer, however
30 Autumn 2018
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also to act in the public interest and that a professional
accountant shall comply with the fundamental
• Professional Competence and Due Care
• Professional Behaviour
The above principles are the basis of ethics
education within the profession, they provide an ethical
framework, and therefore the professional judgment.
Demonstrating integrity means being straightforward
and honest in all business and professional relationships.
Maintaining integrity requires that accountants do not
knowingly associate themselves with information that
they suspect is false or misleading.
2. Independence and Objectivity
Ethics and independence go hand in hand in the
accounting profession. Independence is one of the
pillars and a critical component within the profession
as it provides the trust to the stakeholders for making
unbiased decisions and recommendations that benefit
the client. To remain objective and independent, it is
also necessary to ensure that recommendations are not
subject to outside influence.
The principle of confidentiality imposes an obligation
on all professional accountants to refrain certain
confidential information they are in possession of.
The principle of confidentiality is not only to keep
information confidential, but also to take all reasonable
steps to preserve confidentiality
4. Professional Competence
The maintenance of professional competence requires a
continuing awareness and an understanding of relevant
technical, professional and business development. As
technology, legislation, a professional accountant must
remain up to date.
5. Professional Behavior
Ethics require accounting professionals to comply with
the applicable laws and regulations, They shall conduct
themselves with courtesy and consideration towards all
with whom they come into contact when performing
These areas are of critical importance within
the accountancy profession. Knowledge of the said
principals and how to apply these in practice is therefore
fundamental. Providing the necessary examples and
having people with the relevant experience giving
guidance on the right behaviour and considerations
which should be made in ambiguous situations helps
develop a transparent approach to governance and
Integrity is doing the right thing when
no one is watching.
IFAC made available a study Assessing and
Improving Professional Accountants’ Ethical Capability
published by Dr Cristina Neesham which outlines the
ethical challenges accountants are faced with and also
proposes recommendations. Interestingly, the study
identified inter alia:
Education and training needs: mandatory ethics
training; the development of case study banks for
experience-based complex ethical situations; the design
and delivery of multi-media based ethics training
programs; the intensification of associated soft skills
training (such as critical thinking, ethical reasoning,
communication, and conflict management); and the
publication of anonymized real cases of ethical breaches,
as well as best ethical practice, with evaluations of
ethical issues involved and alternative solutions; and
Advice and mentoring needs: increased availability
of professional advice services, maintaining expert
ethics hotlines; and coordinating national, state, or
local mentoring networks and peer-to-peer resolution
Teaching ethics to the accountancy profession
comes with a number of challenges mainly because
ethics principles are different to the technical topics
which make up the study courses. One needs to have
the right resources to be able to teach ethics as they
require the necessary skills and experience. Locally, the
accountancy profession has already integrated ethics
in the accounting classes which sets the right tone
and the foundation. It is critical that this is not a one
off process during the qualification phase, but that it is
part of the continued development of the professional
accountants as it provides them with a sense of ethical
and moral responsibility throughout their careers.
32 Autumn 2018
VAT treatment of
The EU Council has deemed the provisions in the
current EU VAT Directive (Directive 2006/112/
EC) as applicable to vouchers are not clear
or anywhere near substantial enough to ensure
consistent VAT treatment between Member States.
As a result, distortions could appear in the market
between Member States and as well as potential
instances of double taxation or tax avoidance. This
could be the consequence, for example, of the difficulty
in identifying which transaction in the voucher process
triggers a tax point that establishes when VAT become
due – the issuing of the voucher or when the voucher
These shortcomings, coupled with other recent
developments – such as the updates relating to
electronically supplied services – prompted the Council
to consider introducing provisions for the common
treatment of vouchers across the EU. Consequently,
the Council adopted a Directive (Directive 2016/1065)
– the EU Vouchers Directive – which comes into force
on 1 January 2019 and thus applicable to vouchers
issued after 31 December 2018.
Needless to say, the underlying VAT principles will
apply to transaction involving vouchers. In fact, one can
say there should generally be no difference in ultimate
VAT charged on a given transaction – regardless if one
pays for that good or service using cash, credit cards
It must be pointed out that the EU Vouchers
Directive excludes any form of payment instruments
as well as discounts without right to claim a good
or service, admission or transport tickets, payment
instructions nor postage stamps.
What is captured by this Directive?
Firstly, given that the treatment depends on the
characteristics of the given voucher, it is important to
define a voucher. In terms of the EU Vouchers Directive,
a voucher, be it of a physical form or an electronic form,
represents an obligation on the part of the vendor “to
accept it as consideration or part consideration for a
supply of goods or services and where the goods or
services to be supplied or the identities of their potential
suppliers are either indicated on the instrument itself
or in related documentation, including the terms and
conditions of use of such instrument”.
“Vouchers”, in this context, include gift cards and in
practice include simple book tokens, gift vouchers and
even electronic vouchers purchased from specialist
Furthermore, the EU Vouchers Directive
distinguishes between two types of vouchers – (i)
a Single Purpose Voucher and (ii) a Multi Purpose
Single Purpose Voucher (SPV)
For the purposes of the new EU regulations
on vouchers, an SPV is characterised by a certainty
regarding its value and subsequent VAT charge as
well as place of supply of the underlying transaction.
Consequently, the VAT treatment for this type of
EDWARD APAP BOLOGNA
EDWARD HAS A B.COMM (HONS)
BANKING AND FINANCE AS WELL
AS ACCA. HE CURRENTLY FORMS
PART OF THE PWC MALTA VAT
MIRKO IS A MANAGER AT PWC
WHO ALSO LECTURES VAT AT
PWC ACADEMY BOTH IN MALTA
AND ABROAD. HE IS ALSO
INVOLVED IN A NUMBER OF VAT
voucher is determined by referring to the said place
and nature of the supply. Therefore, the issuing of
an SPV (and any subsequent transfer) is a taxable
transaction in itself.
This is because the Vouchers Directive regards the
issuing of an SPV as being the supply of the goods or
services to which the single-purpose voucher relates.
The ensuing redemption is, then, not regarded as an
independent transaction and therefore attracts no
further VAT obligations.
An example of an SPV is a service provider selling
vouchers (either directly or via an agent) which carry
an entitlement to a defined good (example furniture
or clothes) that is to be supplied to the holder of that
Alternatively, if the voucher is issued by a taxable
person acting on behalf of another taxable person,
the first taxable person – the intermediary – is not
considered as acting in the underlying supply. Also,
the consideration received by a person not acting is
his own name on the transfer of the voucher is not
subject to VAT. The only VAT obligation attributable to
this intermediary is that of intermediary, distribution
and/or marketing services.
Multi Purpose Voucher (MPV)
In terms of the EU Vouchers Directive, what is not
an SPV shall be deemed to be an MPV. Hence an MPV
entitles the holder to receive goods or services where
these goods or services (or the territory in which such
goods/services are to be supplied and taxed) are not
As a result, VAT cannot be determined with certainty
at the time the voucher is issued – as for example is
the case with prepaid credit vouchers which could be
used to purchase either a telecommunications service
(standard rated for VAT) or to pay for public transport
(where a reduced rate may apply).
Consequently, VAT can only be accounted for
when vouchers are redeemed and, therefore, when
the goods or services to which the voucher relates are
supplied. At this point, VAT is charged on the taxable
amount that is taken to be either;
a. if the redeemer knows how much was paid
for the voucher, that amount (net of any amount of
VAT due on the supply); or
b. if the redeemer does not know how much
was paid for the voucher, the face value (net of any
amount of VAT due on the supply), and proportionally
the same where the voucher is partly redeemed for
goods or services.
In the case of only partial use of an MPV, the value
considered as taxable is that of the consideration or
the monetary value, less the amount of VAT relating to
the goods or services supplied.
As with SPVs, the Directive contemplates the issue
relating to the distribution of the vouchers through a
chain of distributors before arriving in the hands of the
final consumer. Although the underlying transaction
is not to be taxed until the eventual supply of goods
or services takes place, the Directive once again
anticipates that the commercial distribution of an
MPV is, in itself, a supply of a taxable service which is
independent of the underlying supply.
Therefore, when an MPV changes hands in
a distribution chain, VAT will be due only on any
separate supply, for consideration, of intermediary /
distribution / promotion services incurred by the third
The Directive does not deal with non-redemption
of MPVs, where the issuer retains the consideration
paid for the MPV.
Applicability of vouchers to “utility tokens”
Certain tokens issued during token generating
events (including ICOs) grant holders the right to
redeem such tokens against goods/services at a future
date. Many times, at the point the tokens are granted,
it may not possible to determine the following:
• The type of goods/service to be utilised in
exchange for the tokens (specifically when the token
entitles the holder to redeem against various goods/
• The nature of the person to eventually
utilise the service (i.e. whether a taxable person or
• The jurisdiction where the person utilising
the token will be established for VAT purposes.
On this basis, it is anticipated that most utility
tokens should probably be considered asMPVs for VAT
Member States have until 31 December 2018 to
transpose the directive into national legislation, with
the revised rules coming into effect for vouchers
issued after that date. Malta has transposed the
implementation of the directive into national legislation
by way of legal notice 348 of 2017. Furthermore, by
31 December 2022, the EU Commission is to prepare
an assessment report on the implementation of the
34 Autumn 2018
Ensure AML compliance with real-time transaction monitoring
Identify, investigate, and react to suspicious behaviour in real-time,
while eliminating redundant manual work and unnecessary alerts.
Define scenarios and rules based
on any data source available
Process intensive checks with
Automate compliance procedures
to avoid manual work
Reduce systems by pushing
notifications to the KYC platform
www.computimesoftware.com +356 2149 0700 firstname.lastname@example.org
GETTING IT RIGHT
Continuing Professional Education
Extract from the Malta Institute of Accountants CPE Regulations
Effective as from January 2017
1. For an activity to qualify as structured CPE it needs to
meet the following three criteria:
Relevance: The CPE undertaken has to be relevant
to the individual’s circumstances and to the exercise
of the profession and increase his or her professional
Measurability: a defined number of hours (CPE units)
can be attributed to the activity; and
Verifiability: the learning can be objectively verified by a
If any of these three criteria is missing the activity will fall
under Unstructured CPE.
Activities that qualify as Structured CPE are included in
the following paragraphs.
Minimum CPE requirements
1. The CPE Regulations identify Core competency areas
and Professional Development competency areas, which
Members are required to satisfy in order to achieve the
desired level of professional competence.
2. On an annual basis Members shall obtain at least:
Twenty-five (25) hours of structured CPE
Fifteen (15) hours of unstructured CPE
3. At least ten (10) hours of structured CPE must be carried
out in those areas qualifying as Core competencies.
4. .The balance of fifteen (15) hours of structured CPE
must be carried out in those areas qualifying as either
Core or Professional Development competencies. The
Institute is a firm believer in a holistic approach to CPE.
It recommends Members to undertake training on
Professional Development competencies, which training
will vary depending on the exigencies of one’s roles and
5. The number of hours credited towards the 25 hours
requirement will be calculated on an hourto-hour basis.
For activities that fall under paragraph 7.2, only the
lecturing time can be claimed as structured CPE; thus
registration time and any break times are to be deducted.
2. Courses, conferences, seminars and organised
technical discussion meetings provided by:
(a) The Malta Institute of Accountants;
(b) Other professional associations;
(c) In-house within firms or companies;
(d) Independent providers of such activities; and
(e) The University of Malta.
Independent providers of courses, conferences and
seminars normally seek accreditation for an event to
qualify as structured CPE from the Accountancy Board,
following the Board’s CPE Accreditation Rules which are
the subject of a separate publication. However, the fact
that accreditation is not sought by the course provider
would not disqualify an event from being regarded as
structured. If an activity is relevant, measurable and
verifiable, a Member may still claim the hours spent on
that activity as structured CPE.
External quality reviews imposed on a Member by the
Accountancy Board following a QAU inspection visit
cannot be claimed as structured CPE.
3. Participation on technical committees or panels set up
by the Malta Institute of Accountants or other professional
associations, the Accountancy Board, accounting and
audit firms or governmental entities but only if:
(a) The committee or panel can demonstrate a tangible
output, such as a new standard, technical release or
other form of guidance, as a result of its work; and
36 Autumn 2018
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GETTING IT RIGHT
(b) The Member can demonstrate that he or she has
contributed to that tangible output.
Participation on committees which fail to meet the above
criteria will fall under unstructured CPE.
4. Web-based learning activities only if:
(a) The activity is measurable. Normally, web-based
activities would have an assigned amount of hours
however, when this is not the case, the Member shall
reasonably assess the amount of time spent on such
(b) The activity is verifiable, that is a certificate of
completion is issued upon completion of the online
Web-based learning activities that do not meet all of
the above criteria qualify as unstructured CPE.
5. Time spent on lecture preparation and lecturing only if:
(a) The Member is providing such an activity upon his
employer’s, the Institute’s, or the market’s demand and
the subject is relevant to the lecturer’s work;
(b) The knowledge gained increases the lecturer’s
technical or professional competence and achieves the
objectives of that form of CPE identified in Section 3 of
(c) The lecture must be supplemented with some form
of study material such as notes and/or presentations.
A Member may claim up to a maximum of thirteen (13)
hours of structured CPE spent on lecture preparation
and lecturing. Repeat lecturing of the same course
cannot be classified as structured CPE. One-to-one
lectures fall under unstructured CPE.
6. Reading for a relevant post-tertiary course only if the
level and depth of knowledge involved increases his or
her technical or professional competence and achieves
the objectives of CPE identified in Section 3 of this
1. Self-managed activities of an informal nature which
are relevant, can be measurable but cannot be verified.
(a) Individual research including: viewing of videos,
television programmes and audio recordings
(b) Reading technical and professional journals, the
financial and business press and accessing relevant
(c) Activities that fall under paragraphs 7.2 – 7.6 but do
not fulfil the criteria to qualify as structured CPE.
Entitlement to an Exemption from CPE and Monitoring
1. The Institute recognises circumstances where
Members are unable to fulfil their CPE requirements.
The following circumstances entitle the Member to an
exemption from CPE: maternity leave, serious illness,
pursuing full-time study, not in employment (neither
gainfully employed nor self-employed) and working
in a non-accountancy related position (not doing any
accountancy related work).
2. Members who are on maternity leave are entitled to a
reduction of 9 hours in their structured CPE requirements
in the year of confinement. The 9 hour CPE exemption
can be taken pro-rata over two years if maternity leave
extends from one year to the next.
3. For the other reasons, the Member is exempted in
whole or in part from any requirement to undertake
CPE depending on the period during which the Member
was out of the profession. In the case where a Member
was out of the profession for part of the year, a partial
exemption applies. In such case, CPE requirements
should be calculated on a pro-rata basis by taking into
account the months out of the profession and deduct
them from the mandatory requirements. This applies for
the total hours and the Core competency hours.
4. Members are required to self-assess the circumstances
giving rise to the CPE exemption and decide whether
such circumstances are a valid reason for an exemption.
Members are also required to self-assess the number of
hours of entitlement to a CPE exemption based on the
5. Members are required to declare their entitlement to
a CPE exemption and the reasons thereof at year-end in
their CPE return.
6. The Institute will carry out audits of CPE exemption
declarations to verify the relevance and validity of the
exemption. Thus, in all cases, Members should keep
documentary evidence in support of the exemption
in order to present it to the Institute, when requested.
38 Autumn 2018
GETTING IT RIGHT
Members are required to keep this documentary
evidence for a five-year period as this may be required as
part of the Institute’s monitoring process.
Re-entry into the profession following CPE Exemption
and Monitoring of Re-entry
1. When a Member’s circumstance changes such as he/
she will no longer be entitled for an exemption, it is the
onus of the Member to undertake action to satisfy the
requirements for reentry into the profession, as set out
The Re-entry into the profession regulations came into
force in 2012. The diagram below highlights the respective
actions required to re-enter back into the profession. For
transitional arrangement purposes year 1 is 2012.
Any hours spent on CPE activities during the period of a
CPE exemption will be reduced from the number of CPE
catch-up hours required to re-enter the profession.
4. Members who were exempt from CPE requirements
for five years or more are required to complete a refresher
course prior to re-entry as stated below:
A Member is required to attend the related final study
units over two semesters in two out of four of the following
subjects offered to professional-level accountancy
students by the University of Malta or equivalent courses
as approved by the Institute:
• Financial Accounting;
• Management Accounting;
Note: should the Member wish to practise in the field
of auditing, attendance to the auditing seminars is
Members are required to attend at least 80% of the study
units in the two subjects chosen (attendance at tutorials,
if any, is optional).
1 Calculation of pro-rata hours - take into account the months in which
you were not exercising the profession during the year. Example: - Re-entered
the profession on 15 April, therefore 3.5 months out of the profession
-Minimum hours per year: 25 hours (10 Core)
- 25 – (3.5 / 12 x 25) amounting to 18 hours (40% of which must be Core)
-Therefore the pro-rata hours for the year are 18 (7 of which must be Core)
5. Members are required to inform the Institute of their
re-entry into the profession at year end in their annual
2. Members who were exempt from CPE requirements
for a period of up to 2 years can re-enter the profession
and start practising immediately.
3. Members who were exempt from CPE requirements
for a period between two and five years are required to
go through a catch-up phase on CPE by undertaking the
required number of CPE hours. The catch-up depends
on the number of years in which the Member was out
of practice, as follows: a catch-up of 38 hours for those
exempted between 2 to 3 years, 50 hours for those
exempted between 3 to 4 years and 62 hours for those
exempted between 4 to 5 years. Half of the required
hours need to be completed before re-entering the
6. The Institute will carry out audits to verify whether
the Member who re-entered the profession met the
requirements for re-entry into the profession prior to
and/or following re-entry. Members who re-enter the
profession are therefore required to keep records and
evidence of action undertaken to satisfy the requirements
for re-entry into the profession. Members are required to
keep records and documentary evidence for a five-year
period as this may be required as part of the Institute’s
The full CPE Regulations can be downloaded from :-
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ELECTRONIC PUBLIC PROCUREMENT IN
THE MALTESE PUBLIC ADMINISTRATION
LORRAINE MANGION DUCA
LORRAINE MANGION DUCA
WAS INVOLVED IN PUBLIC
PROCUREMENT SINCE 2005.
CURRENTLY SHE HEADS THE
POLICY DIRECTORATE AT THE
DEPARTMENT OF CONTRACTS.
Digitisation of processes in general across its
member states’ Public Administrations has been
on the main agenda at the European Union (EU)
level for the past two decades. Public Procurement processes
were not the exception. Indeed, the EU Commission has
been pushing its member states towards the digitisation
of Public Procurement. The drive behind this move aims to
make public spending more transparent first and foremost,
but also to increase the cross-border accessibility of Public
Procurement, provide a more evidence-oriented culture
with a strong audit trail of the processes, optimisation of the
procedures and integrate both with market conditions while
keeping abreast of technological advances. These processes
foster better Public Procurement governance, lessen the risk
of fraud and corruption and, ultimately, widen the market
and the economy in general. Digitisation of Procurement
is viewed as supporting economic growth, increasing job
opportunities while facilitating access to Public Procurement
to small and medium-sized enterprises (SMEs). In fact,
according to the EU Commission, Public Procurement
accounts for around 14% of the Gross Domestic Product
(GDP) in the EU with over 250, 000 public authorities
purchasing on behalf of their government in the three
procurement categories: services, works and supplies 1 .
E-procurement involves public buyers procuring
through electronic means, from the beginning to the end
of the whole procurement cycle. This involves, primarily,
publishing contract notices online via e-notification and
publishing all procurement documents for a Call for Tenders
online giving e-access to tender documents. Furthermore,
Economic Operators submit their offers electronically
known as e-submission. The opening of offers is carried out
on a pre-set established date and time, and is then instantly
published for public view. The evaluation is also carried out
electronically and finally the results and award notices are
also published electronically. E-procurement can significantly
simplify the way procurement is conducted, as well as
reduce waste and deliver better procurement outcomes
such as lower prices for a better quality by stimulating
greater competition across the Single Market and beyond.
Across the EU, public buyers who have already made the
transition to e-procurement commonly report savings
which may vary between 5 and 20%. Given the size of the
total procurement market in the EU, each 5% saved could
return around €100 billion to the public purse which can be
spent on other projects for the public. The planned rollout of
e-procurement in the EU includes also e-invoicing which is to
be in place by November 2019. The deadline for Member
States to roll out e-Submission is October 2018. Malta is way
ahead of the mandatory deadlines established by the EU for
the rollout of eProcurement.
In fact the Maltese Government has always been at
the forefront of implementing a digitisation strategy that
also brought a thorough reform of the Public Procurement
sphere across its Public Administration. The Department of
Contracts, as the sole central government authority, was the
main catalyst of this ambitious reform. As early as 2011, the
Maltese Public Administration started a radical rethinking
of the public procurement process through procurement
digitisation in preparation of the imminent publication of a
set of new EU procurement directives. Directives 2014/24/
EU on Public Procurement, 2014/25/EU on Procurement by
entities operating in the water, energy, transport and postal
services sectors and 2014/23/EU on the award of concession
contracts were eventually published by the EU in 2014 and
transposed into Maltese legislation in October 2016.
42 Autumn 2018
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This perceived shift went beyond simply moving to
electronic Public Procurement procedures and tools. It
involved the re-evaluation of various pre-award and postaward
processes meant to simplify Public Procurement. It
also involved a massive effort towards the education about
such a shift. One of the most substantial investments toward
the success of this change were training initiatives involving
both the Public Administration procurers and the Economic
Operators. The shift towards electronic procurement never
intended to deliver a drastic change overnight but rather
to educate the people’s mindset, help them understand
the benefits of this change and most importantly induce
them to be proactive participants in this major milestone
for the Maltese Public Administration. Since the inception
of the ePPS, besides offering training opportunities to its
Government procurers, the Department of Contractshas
been delivering training sessions to Economic Operators,
in collaboration with the Institute for Public Services which
falls within the remit of the Office of the Prime Minister.
Economic Operators may register to these weekly sessions
to better familiarise themselves with Government’s
e-Procurement platform. These workshops have always and
are to date being held free of charge. So far, around 1400
Economic Operators have benefitted from this initiative.
The Maltese Electronic Public Procurement System
(ePPS) published its first open procedure in 2011. The ePPS
supports the whole procurement cycle from publication,
evaluation and award done completely through the same
portal. The introduction of the platform www.etenders.gov.
mt revolutionised Public Procurement.
The ePPS was designed to support all the requirements
within the EU Directives and is enhanced whenever required
to keep up with changes both at EU level and locally. Since
the publishing of the new Public Procurement Regulations,
in October 2016, all public procurement in Malta estimated
at €5,000 excluding VAT, was legally bound to be published
Figure 1 - Number of registered Economic Operators
Since 2013, the ePPS has experienced a strong uptake
and steady participation by Economic Operators. As
graphically depicted in Figure 1, the number of economic
operators has been on a solid increase hitting the 6300
registrations mark in May 2018. This number includes both
Maltese and foreign economic operators.
The number of Calls for Tenders (CfTs) published
through the ePPS, since its inception, has also been on the
increase, even if the numerical values flactuate according to
EU Funding seasonality. Figure 2 portrays clearly the gradual
increase in the number of CfTs published through the ePPS
by the Maltese Government since January 2013. By August
of the current year, a total of 4100 CfTs have already been
published on the ePPS.
Figure 2 - Number of published CfTs
Future ePPS developments include the integration
and inclusion of various public procurement processes and
documentation, within one single procedure. Forms and
processes which are currently submitted or undertaken
in electronic format, will now be fully digitalised and
integrated in the main public procurement procedure
through which Economic Operators submit their offers.
Such enhancements include the submission of the
European Single Procurement Document (ESPD) as part
of the selection criteria, the requirements stemming from
the Green Public Procurement (GPP) criteria and a National
Compliance Certificates Register, and the integration of
the e-CERTIS function, which is a guide to the different
documents and certificates required from companies
tendering for public contracts in any EU country,.
The ePPS can be described as a success story and Malta
established itself as a forerunner in this field. The success
story does not end here, though. The Department of
Contracts firmly believes that the progress in reforming this
field with the incessant support of the central Government,
will keep registering success for a better Public Procurement
experience for public procurers and economic operators
44 Autumn 2018
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Our strength lies in employing high-calibre human
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THE PROFESSIONAL ACCOUNTANT
IN TODAY’S INDUSTRY
STEPHEN L MUSCAT
STEPHEN L MUSCAT FIA CPA,
WHO CURRENTLY HOLDS
THE CHAIR OF THE MIA PAIB
COMMITTEE, AND ALSO SITS ON
THE IFAC PAIB COMMITTEE, HAS
BEEN WORKING IN BUSINESS FOR
OVER 30 YEARS.
Being a Professional Accountant working in Business
(PAIB) today is a very exciting and challenging career due to
the transformation that most businesses are undergoing as
a result of technological advances.
In today’s and tomorrow’s scenarios accountants are
increasingly being asked to provide information and analysis
to support decisions about all aspects of an organisation’s
business. Providing insights solely on financial performance
is no longer enough, more so because the financials only
tell a part of a performance story, and do not reveal what is
ultimately driving or destroying value across all areas of the
business. As a result, accountants in business MUST get
involved in the operations of the business organisation they
Digital and data transformation is taking over the way
businesses are run and transforming business models, while
reinventing customer value propositions has become a
prerogative of the finance function to improving operations
through end-to-end digitization of processes, connectivity,
automation, and real-time communication. Technology and
digitization enable PAIBs and their finance departments to
spend more time proactively helping their business to achieve
All types of organizations are disrupting or being
disrupted. IBM’s latest global C-suite study1 shows that threequarters
of CFOs cite existential threats of some kind to their
enterprises’ current business models. Six in ten CFOs point
to more innovative competitors delivering more compelling
value propositions. Three in ten indicate new entrants are
taking market share, and approximately one in six point to
some combination of product commoditization eroding
margins, or online and mobile channel threats.
The half-life of knowledge, which represents the amount
of time that elapses before half of the knowledge one has
acquired is superseded, is rapidly reducing. This therefore
means that new skills and ways of thinking must be taught in
professional education and training, even though much of this
learning is predominantly acquired over time in an ongoing
learning process, supported by different work experiences.
Moving jobs has become very common and today’s graduate
accountants are expected to change over 15 jobs during their
career. This will help create better accountants for the good
The accountant in business needs to be outwardlooking
and have a broader perspective and mindset to be
entrepreneurial and commercial; an able critical thinker
and problem solver. Accountants will also increasingly need
to work with colleagues from diverse disciplines across the
business, so good communication skills for discussing with
such multi-disciplinary teams is essential.
As a result of all this changing landscape, the accountancy
profession and professional accountants will need to maintain
their relevance. Many of their core professional values, skills
and knowledge remain relevant although the context in
which they are applied is radically different. Uncertainty
and ambiguity require a different mindset and approach.
Accounting for the business rather than the balance sheet
IS the starting point for relevance. This is bringing a shift
from accounting for the financial performance of a business
to accounting more holistically for the business. Boards and
46 Autumn 2018
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management need their business accountants to provide
a fuller and more candid picture of value creation, and
accountants will need to continue to demonstrate their
professionalism in line with their Code of Ethics in all aspects
of their contribution to business.
Public expectations on business has never been greater
and society is demanding that businesses do well, not only
form a profitability point of view but also by doing good.
This means that strong values of integrity and trust need to
align with the value created for investors and shareholders
as unprecedented levels of transparency and regulation
are being introduced. Accountants in Business are now the
custodians of this. Emerging and significant sources of risk such
as climate change, cyber, fraud and corruption, and modern
slavery, demand greater transparency as more uncertainty
and complexity is added to decision making.
Over recent years, IFAC’s Professional Accountants in
Business Committee2 has been exploring the future for
professional accountants as business partners and value
enablers. The committee’s discussions were based on
members’ experiences of business and finance function
leadership. The accountancy profession can adapt to its
changing environment and ultimately transform towards
improved capacity and sustained relevance. Several roles
were identified that are growing in importance for professional
accountants as well as the ones that will remain cornerstones,
namely growth, germination, conservation, and creative
The Growth areas that build on current areas of
Co-Pilot. As a member of the leadership team, the
accountant needs to think strategically to drive the growth and
development of the organization. This is achieved by inspiring
others, driving key values, developing overall vision, identifying
growth and value-creating opportunities, and executing major
change initiatives such as digital transformations.
Navigator. Steering the organization toward achieving
sustainable value creation and enabling integration and
connectivity across the organization to deliver objectives. This
is achieved by aligning strategy, managing risk, and connecting
the organization, that is, people, processes and systems, and
financial and non-financial information.
Brand Protector. Moving beyond stewardship of company
assets and financial performance to ensuring the protection of
all critical tangible and intangible assets. This involves fostering
business integrity and sound reputation through effective
governance, risk and control, stakeholder engagement, and
financial discipline, as well as ensuring decisions are based on
sound financial and sustainability criteria.
Influencer. Facilitating change by influencing people and
their actions. This is achieved by building strong relationships
across the business, and the ability to push ideas forward,
as well as supporting and motivating people and teams to
perform towards their objectives.
The Germination areas that are in their infancy but will
become a key part of the role in the future:
Storyteller. Enlightening internal and external
stakeholders on how the business is creating value over time,
and the opportunities and challenges it faces.
Technology and Digital Enabler. Enabling a data-driven
business that utilizes technology and automation, digital and
artificial intelligence, and data in ways that drive decisions and
The Conservation areas that will remain cornerstones:
Trusted Professional. The accountant must remain
professionally objective and sceptical, challenging the
organization and oneself when needed.
Analyst. Providing decision-relevant insight into
performance and decisions. In addition to traditional areas of
financial expertise, the insights provided need to also cover
various aspects of the business model, including data from
internal and external sources.
The Creative destruction that challenges the status quo:
Transaction and Process Expert. The accountant needs
to ensure efficient and effective end-to-end process and
work flows in and across the business. This needs to be done
through both manual processing and reconciliations, that is
data entry and reporting increasingly automated and unseen,
as well as by deploying technology such as robotic process
automation, artificial intelligence and blockchain to enable a
more effective and efficient finance function.
On a final note, the accountant in business should not fear
the issue of technology and the challenges this poses. The fear
that this will make accountants redundant is totally unfounded
and, on the contrary, technology should be embraced as it
makes the accountant ever more relevant in today’s world.
As aptly said by economist Philip Auerswald3, “Whenever
machines and tools substituted one type of human capability,
new human experiences and capabilities actually emerged”.
1. Source: IBM C-suite Study 2018
2. Source: Information for this part of the article was obtained, by kind
permission, from the working papers of the IFAC PAIB Committee
regarding the Future Fit Professional Accountant Profile.
3. Philip E. Auerswald is an American author, economist, and co-founder and
co-editor of Innovations. He currently leads the Global Entrepreneurship
Research Network, an initiative of the Kauffman Foundation.
48 Autumn 2018
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The role of Education
Services Firms (PSFs)
and the accounting
CAROLINE CASSAR REYNAUD
CAROLINE CASSAR REYNAUD
IS TALENT LEADER WITHIN
DELOITTE MALTA AND
RECENTLY COMPLETED HER
MSC IN LEADERSHIP AND
WITH DUBLIN CITY UNIVERSITY.
SHE ALSO FORMS PART OF THE
MIA EDUCATION COMMITTEE
With the visible shortage of dedicated qualified
talent in Malta’s labour supply, the importance
of ensuring an appropriate education journey
for the workforce of tomorrow is critical. In order to succeed,
a change in the skillset and competencies required today
is evident. It is necessary to shift from purely theoretical
frameworks and curriculum, to equipping tomorrow’s
workforce with the ability to be analytical, think critically,
and question and assess objectively, rather than accepting
the status quo. It is our duty to help the people who join the
profession to understand what their ultimate career goals
are and provide them with the right means, knowledge and
competencies to achieve them. It is only after providing
the required experience to develop these mandatory skills,
that we can effectively focus on building a resource pool
required to lead professional services firms into the future.
When graduates make the transition from the
classroom to the work place, they bring with them all they
have absorbed in their schooling and the readiness to apply
this knowledge to the real world. Yet, the reality that they
find is often far removed from what they have been taught.
The first years are actually the hardest for them to be able
to understand the dynamics of working in a professional
services firm, realise what they contribute and comprehend
how they can effectively grow.
Recent discussions and findings by the MIA Education
Committee, recognise that the current syllabus requires
adjusting to keep up with the realities of the profession
today. While it would be naïve to think that learning stops
the day somebody graduates from University or completes
their studies, it is clear that the present curriculum merits a
closer look. At a policy level it is necessary to ask whether
the curriculum is equipping our future workforce well
enough to be ready for the realities that we see emerging
Today we refer to lifelong learning and continuous
learning to encourage the workforce to remain agile and
adapt to the changing circumstances. I feel this begs the
question: at which point does education in the classroom
stop and what experience and skills must the profession
provide to allow this learning to continue? Essentially how
do the two work together to give the required all-round
experience needed to guarantee a successful outcome?
How do we equip our people to remain in charge of their
career and provide them with the right model for growth
in order to retain their skills and continue to build on them?
A career model that will retain the workforce of the
future must be one where continuous learning is ever
present. Those organisations that do not offer the ability
to be mentored or provide training programmes that allow
for personal development and growth are missing a key
component to help employees feel that they are growing
as individuals. It is imperative that in addition to learning on
the job, employees are able to develop personally through
rigorous training programmes and a clear journey designed
specifically for them.
In an age of innovation and automation, we see a
shift in the skillset required –methodical, repetitive tasks
are making way for the need for softer skills and a more
analytical mind-set. This is not something easily taught in
a classroom – nor is it something often inherent. Many
times, unless nurtured from an early age, such skills remain
undeveloped. How can the current education system
provide this skillset and how can professional services
firms compensate for this shortfall? How do we prepare
our people to deliver those difficult and challenging
presentations in a boardroom, to manage those demanding
clients, to challenge those ethical queries, to cope with the
ever-complex regulatory requirements and remain true to
the core values of the brand we represent?
There is no simple answer to these questions, but this
article is an opportunity to think about the future of work
and the role education plays. Organisations that are able
to provide this journey will ultimately succeed in engaging
and retaining their workforce within the realities of today’s
50 Autumn 2018
THE FUTURE OF
TALENT IN THE
WORKING WITH MISCO SINCE
2011. CURRENTLY A SENIOR
MANAGER LEADING THE
RECRUITMENT TEAM AT MISCO
When we speak of talent in business, we think of
different skills people have which allow them to
successfully achieve their goals in a company. Through
our experience and constant interaction with different
employers in the current market, we see a clear shift in
the skills that were required in the past to the skills that
will be required in the future.
Company requirements are changing, especially for the
accountancy profession. We are seeing a transition in
company requirement from skills that are more technical
in nature to what we call “the human touch”. We observe
that, today, focusing on the technical accounting skills
only, is simply not enough for someone to succeed in an
accounting career. While technical knowledge is essential
and someone who does not like to crunch some numbers
is unlikely to make it in this field, technical expertise on
its own might not allow an accountant to advance and
achieve the career they were expecting.
With advances in technology, the accounting profession
is also going through many changes as some duties are
being taken over by automated systems while others are
being enhanced through technology. With this going on,
it is of utmost importance for the accountancy profession
to develop the right soft skills that cannot be automated
or replicated by a machine. Artificial Intelligence (AI) and
automation should not be seen as a threat, but as an
opportunity to make us more efficient. We should use
this to our advantage and identify where the human
touch is essential for a role to be performed successfully.
Before, accountants had to take care of the coding,
data entry and repetitive tasks related to accounting in
order to be able to analyse data, but today, technology
is allowing accountants to focus on more value-added
services. This means that enhancing the soft skills is now
more important than ever before.
Due to changing regulations, a big chunk of the
accountants’ time is being spent on compliance work.
This is leaving little time for them to give advice, which,
is ultimately what benefits clients the most. In a study
on accounting firms in Australia, conducted by a global
research company, IPSOS, it was found that 62% of
accountants’ time was spent working on compliance
and only 38% of the time was focused on giving
advice. Compliance should not inhibit or take over the
relationship accountants create with clients. Accountants
need to embrace developments in technology as a
resource that will assist in the compliance and data
analysis aspect of accountancy. This will leave time and
space for more strategic development, decision-making
and building lasting relationships. Human intelligence
will be very difficult to be replaced by a machine and,
although automation has surely eliminated certain roles
in this field, other, more meaningful, positions have been
created in the process; enhancing the profession for
accountants who have the right skillset in place.
Developing the right soft skills for this profession to
succeed is essential. Soft skills essential for the future of
talent in the accountancy profession do not focus only on
attention to detail and organisational skills, which were
the most sought-after skills up till recent years. Together
52 Autumn 2018
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with these important criteria we need to see more of the
Communication – The accountant is no longer
that person who sits behind a computer working with
numbers. Being good with numbers is crucial, but more
important than that, is the ability to interpret these
numbers, provide insight to others and communicate
the figures in a way that is understandable to different
members of the company who are not necessarily
Communication also involves being confident enough
to chair a meeting and present the results to senior
management while giving meaningful advice which will
affect the future of the business.
Creativity – The accountancy profession cannot rely
on routine. With the impact of political, economic, sociocultural,
environmental and other external influences,
keeping up-to-date with changes taking place around
us is important. The accountant needs to be creative
in developing fresh ideas and finding new strategies to
resolve unique issues.
Adaptability – With accounting evolving in such a
fast-paced way, accountants need to be able to adapt
and show flexibility in their approach to succeed in
their profession. This means adapting to changing
environments, using new software and creating new
reporting strategies, amongst others.
Adaptability is also shown in the way accountants are
able to listen to others and understand the needs and
concerns of the clients, be it internal or external.
Leadership – Apart from leading teams, accountants
need to lead companies forward. As leaders, accountants
need to be accountable for their actions and have clearly
set goals. They need to be able to lead high-performance
teams as well as mentor and coach other members and
provide them with the help they need to improve on
Decision Making – Accounting provides insight
that enables management teams to take important
decisions for the future of a business. Being able to guide
companies in the right direction is key in accounting. Due
to the sensitivity of this role, being forthright when giving
advice is also essential.
When looking at accountants who managed to succeed in
this field, we see people who, apart from possessing these
soft skills, also demonstrate a general understanding of
other functions within the organisation. This includes a
good grasp of operations, marketing, communications
and human resources within the company. Accountants
and accounting managers will generally be dealing with
people coming from different backgrounds and working
within different departments. It is, therefore, crucial for
them to be able to relate and gain the trust and respect
of these individuals.
Talent is further developed through ongoing training.
Through our interaction with various companies we meet
professional accountants who can take a leap in their
career by developing and sharpening their soft skills. The
need to keep on learning in this continuously changing
profession is essential. Digital technologies are evolving,
and accountants need to be able to provide insight, not
only on the numbers themselves, but more importantly
on what these numbers mean to the company and the
implications they bring. Keeping up to date with both
the technical changes as well as developing the soft
skills further keeps accountants up to scratch with this
evolving market. Accountants who are ready to invest in
developing themselves will have a competitive advantage
in the future working environment.
54 Autumn 2018
Professionals who work in the areas of Finance,
IT and Engineering will often admit that they
would rather work with numbers, systems
and processes than with people! At the same
time, the work reality of these type of professions
often requires them to interact with people on a
regular basis, especially when they are promoted to
managerial grades. This reality is frequently a source
of frustration for professionals such as accountants,
financial controllers, CFO’s etc. They often complain
that dealing with people proves to be a distraction
from their “real” work. It is this perception or attitude
that I believe needs to be challenged. Professionals
in these areas need to appreciate that relational and
intrapersonal skills are essential to their success.
Relational skills are particularly important for
“technically” oriented professionals who also must
deal with clients, team members or manage a
department. These roles often involve competencies
such as delivering presentations, leading team
meetings, carrying out interviews and performance
appraisals, managing conflicts, engaging in
negotiations, influencing and persuading, motivating
and coaching, to mention a few. To be truly effective
and successful in these core activities, the necessary
competencies reach far beyond the technical skills
directly related directly to the profession, such as
accounting. In fact, the skillset related to dealing
effectively with oneself and others has, over the
last two decades, been established as a type of
intelligence called Emotional and Social Intelligence.
This is a measurable and quantifiable construct with
a sound body of research that correlates high scores
on emotional intelligence with career success across
professions, particularly those requiring leadership
Self-Awareness: This is considered a foundation
skill for all other intrapersonal and interpersonal
skills. Self-awareness consists of a person having an
accurate understanding of his/her personality traits,
core values and strengths and weaknesses. It also
includes a personal appreciation of one’s typical
behavioural and emotional patterns, especially when
under pressure and stress. Developing an accurate
picture of ourselves enables us to predict and
understand our reactions and responses to situations
and other people around us. Self-awareness can be
developed from three main sources. The first source
is through the elicitation of candid feedback from
the people we work and live with. By asking them
how we come across to them and how they perceive
our behaviour, competencies and weaknesses
we can achieve a degree of insight and objective
understanding about ourselves. The second source
is through engaging in personal reflection. This
includes thinking about our thoughts, feelings and
behaviours, and how these impact our own state
of mind and that of the people around us. The third
source is by taking psychometric personality tests.
These offer a structured profile of our personality
traits, motivations, stressors, behaviours under
pressure, etc. Combined with coaching, this can be
PATRICK PSAILA IS A REGISTERED
CONSULTANT AND COACH
SPECIALISING IN HUMAN
FACTORS IN LEADERSHIP. HE IS
DIRECTOR AND CO-OWNER OF
What do these competencies consist of and how can
we learn, develop and improve them? The following
are a few examples of core intrapersonal (within the
person) and relational skills that play a key role in
the success of any professional who frequently deals
with people but whose main background, training
and focus is not people oriented.
a very valuable method for gaining deep insights into
Active Listening and Understanding: One of the
essential social skills that is often underestimated is
the ability to listen effectively. This includes paying
attention to what other people are telling us,
observing their non-verbal behaviours and noting
their emotions. It also involves the ability to make
sure we really understand what the other person
is saying by paraphrasing, summarising and asking
the right questions that clarify, probe and elicit
elaboration. Effective listening makes other people
feel validated and valued. It also reassures them that
we are taking them seriously and are really focusing
on what they have to say.
Empathy: This is primarily an attitude of
understanding the points of view, feelings, opinions
and perception of others. However, it is also a
skill in that our empathic attitude needs to be
communicated to the other person. This is done by
accurately reflecting both the gist of what the other
person is saying, as well as the emotions that we pick
up from them. Of course, this is only possible if we
can give the other person our undivided attention
and listen deeply. Empathy has a strong impact on
others by making them feel understood and heard,
and often diffuses intense feelings of anger and
Giving Feedback: Another critical skill for career
success is the ability to give feedback in a
constructive non-threatening way. When people
receive candid, honest and sensitively-given
feedback, they feel that they know where they stand
in relation to their performance. This understanding
can then help them change, refine or maintain their
behaviour accordingly. Constructive feedback is
an essential motivational tool that leaders need to
master. It involves reinforcing and acknowledging
good performance and behaviour as well as having
courageous conversations that point out areas for
improvement and development.
strong emotions and then learn how to express those
Managing Conflict and Disagreement: Conflict and
disagreements are inevitable between people who
are working or living together. However, conflictridden
relationships can be a source of great distress
and frustration. The skill of resolving conflicts
between two people or within a group requires all
the skills mentioned so far. However, it also includes
the ability to help conflicting parties listen to each
other, find common ground, identify the real point
of divergence and come to a compromise, or a
synergised solution. People who feel it is safe to
disagree and engage in conflict without the fear of
it spiralling out of control and becoming personal,
are freer to express themselves and speak up. This
is critical for the growth and success of a business,
service or team as it allows new ideas can be proposed
more freely and creative systems or procedures to be
tried out and tested.
These are a few of the intrapersonal and relational
skills needed in leadership and when working with
people in general. They can be learned, practiced
and integrated into one’s behavioural repertoire
that becomes internalised and second nature to
us. This can be achieved through coaching, reading,
training and experimentation with new behaviours.
In the technical corporate world, the importance of
these competencies tends to be underestimated,
yet research repeatedly shows that they are critical
determinants of success and effectiveness in leading,
managing and dealing with people.
Assertiveness: This is a relational skill that strikes
that difficult balance between coming across as being
too forceful or too accommodating. Assertiveness is
important in responding to the multiple challenges
that present themselves to us in our work especially
when interacting with clients and colleagues. When
we communicate assertively people do not feel
intimidated or apprehensive as a result of their
interactions with us. They are also discouraged from
taking advantage and losing respect for us because
we are not overly accommodating. Assertiveness
is also a key Emotional Intelligence competency
as it requires, first, the ability to internally manage
56 Autumn 2018
Can Education benefit from
OVER 16 YEARS WORK
EXPERIENCE IN FINANCIAL
SERVICES REGULATION QUALIFIED
IN BANKING & FINANCE, ACCA,
AND MASTERS IN STRATEGIC
Uses of blockchain technology have been broadly
touted to be applied across a variety of day to day
activities, from financial services to transportation
to health. Blockchain has the potential to fundamentally
change the systems we are familiar with. Can it also be
applied to educational systems? If yes, what changes could
it potentially bring about?
While there are only a handful of organisations currently
utilising blockchain for educational purposes, educators,
students and professionals understand that education is
no longer provided in a brick and mortar environment.
We have moved away from the concept of having a period
in our lives dedicated to learning and another to working.
We now live in the age of continuous life-long learning
furthered by online courses, conferences and seminars as
well as workshops and bootcamps 1 .
We all have several certificates of attendance or
qualifications lying around at home. A common worry is
often that these may easily be lost. Obtaining a new copy
is not always as straightforward, particularly in cases where
an awarding institution ceases to exist.
The safe storage of educational records is one of the
main advantages with blockchain technology. Degree and
course certificates can be verified and securely kept by the
user who will be in control of the documentation without
the need of knocking on the institution’s door for such
A practical use of blockchain would apply to those
individuals who have had to flee their country due to a
natural disaster or war. Their certifications and records
kept within the blockchain would remain available and
verifiable where physical documents may be destroyed,
and there would be no need for institutions to initiate
resource-heavy processes to confirm their validity.
Within the educational system being either universities
as well as other education institutions, students need
to identify themselves with several parties, with each
containing information in isolated silos. This brings about
a large cyber security risk for the organisation which would
require significant investment in keeping information safe
Using a blockchain platform, such information can be
safely shared amongst the different parties while the
owner remains in control of such sensitive information.
Institutions benefit too, as efforts and resources to curb
breaches are no longer needed.
A further issue in education today is the transfer of course
credits from one university to another. Credit transfers in
the EU depends on the co-operation agreements between
learning institutions, which are not always recognised by
the institutions themselves. Through the use of smart
contracts, such discrepancies can be avoided since once
the conditions coded within the smart contract are
fulfilled, course credits are automatically transferred.
Earlier on we mentioned the shift in learning patterns.
Continuous learning, makes the need for blockchain
technology even more pressing, allowing learning
experiences to be safely stored and the records easily
available. Moreover, training is instantaneously verifiable
on the blockchain which allows employers to spend less
time authenticating CVs.
Blockchain technology and, more specifically,
cryptocurrencies have the potential to eliminate barriers
faced by students whose country of origin disqualifies
58 Autumn 2018
A short but very difficult training program that helps people become much better at doing something in a short period of time.
them from opening bank accounts. This does not mean
that anti-money laundering procedures are not to be
adhered to, but it would completely change the prospects
of genuine individuals who seek higher education outside
their countries. Governments, too, can issue scholarships
at universities and monies could be released either to
the student or the institution itself based on predefined
criteria using smart contracts.
What advantages does it offer to educators?
Blockchain technology can help academics to publish their
research on an open platform while keeping track of not
only viewership but use of such research material. In the
same way, educators can have quick access to information
and research produced by other colleagues. Through
blockchain, teachers can be rewarded based on the actual
use of training or research materials provided, through
the creation of a specific coin(s), which coin(s) could be
attributed a monetary value.
Platforms are being created to provide educators with a
flexible educational hub. Through these hubs, educators
can directly connect, plan and confirm courses. Meanwhile,
students will be able to place requests for specific courses
to which teachers can reply directly. This can be anything
from a short introductory course to a complete program
Another crucial theme for educators is Continuous
Professional Development (CPD), which is often
fragmented and rarely recorded in an adequate manner.
A blockchain system could collate information and record
attendance to CPD courses and other forms of learning
while teachers and other professionals would be able
to receive guidance from trusted providers. This would
create a further incentive to enhance, not only the quantity
of their CPD hours, but most importantly the quality.
Clearly, blockchain technology has application across the
whole education system. At the same time, however, the
reputation of the school, college or university will still play
an important part and students and educators need to go
beyond the trust that is provided by the technology.
The principal obstacle to the implementation of blockchain
technology not only in the educational system but in all
its applications is its scalability. Whilst there are several
benefits the technology does present areas of concern,
namely: GDPR loss of cryptocurrencies, as well as moneylaundering
issues, just to mention a few. Blockchain cannot
be considered in isolation and it requires a cultural shift in
the way we interact with technology before we can fully
embrace its potential and enjoy the benefits it brings to
the learning community.
PRESCRIBING CREATIVITY AND
HUMOUR IN OUR RELATIONSHIPS
Humour is universal, and it is considered the most creative
aspect of language. Humour is, therefore, one of the
most important topics in the study of communication.
The benefits of a healthy sense of humour has long been
recognized: our ability to laugh, feel joy and happiness
helps us appreciate the beauty in any loving relationship.
The sharing of humour and laughter, in fact, plays a
significant part in social bonding. Women are attracted
to men who make them laugh while men are attracted
to women who laugh at their humour (Martin, 2007).
It has also been shown that, in a long-term relationship,
women’s humour may be even more important for the
maintenance of a relationship.
The child in us
‘Falling in love’ is very often related to an uncontrollable
and crazy feeling. Similarly, creativity is also associated with
being free, crazy and uninhibited. Maintaining love means
maintaining this ‘falling in love’ syndrome throughout
your life. Both humour and creativity use spontaneity and
surprise to activate a smile and a feel-good factor. Both
sets of skills can bring out ‘the child in you’, which is one
of the keys for success in a relationship. An unexpected ‘I
love you’ note or a bunch of red roses, an impulsive hug,
a spontaneous kiss, a sudden invitation to swim with the
dolphins all contribute to a sincere and inspired smile. The
child in us triggers fun, relaxation and happiness. The child
in us also helps us use ‘self-deprecation’ in those moments
in which we need to be human. Being able to laugh and
share our imperfections and our embarrassing moments
can induce potential joy while also playing a significant part
in social bonding.Our quality of life is killed if we suffer from
a deficiency in humour dosage.
Stuttering, Creativity and Humour
What about humour and relationship to clients in the
therapeutic setting? In anything one does, passion is
essential. I, for example, ampassionate both in my work as a
speech language pathologist and fluency specialist, as well
as in my interest in humour research. It just happened that
DR JOSEPH AGIUS
DR. JOSEPH AGIUS IS
A EUROPEAN FLUENCY
SPECIALIST/ SPEECH LANGUAGE
PATHOLOGIST WITH SPECIAL
INTEREST IN HUMOUR RESEARCH.
both fields crossed paths, which led me to study attitude
changes towards communication when using creativity
and humour during intervention. Findings from the
research provided a framework for the ’Smart Intervention
Strategy (SIS)’ for school-age children who stutter (Agius,
2009; 2012; 2013; 2015) which includes components
of humour and creative expression through creative
thinking skills. Humour and creativity are frequently used
as effective catalysts for change. Simone might be a good
example. She had just graduated from Law School, and as
a person who stuttered, Simone perceived her condition
negatively. She wanted to apply for a job with a wellestablished,
renowned law firm in the United States. She
thought her chances were very slim. We worked on the
curriculum vitae and under the ‘languages section’ we
wrote ‘English Plus’ and ‘French Plus’. Obviously, the first
thing she was requested to clarify during the interview was
this ‘plus’ issue. With a smile, Simone confidently said that
she stuttered in English and that is a ‘plus’. Jokingly she
told them that she was sure that none of the interviewers
knew how to stutter as good as she did. Not only that,
but she also stuttered in French. The interviewers were
fascinated with the interesting information on stuttering,
on famous people who stutter and the different theories
on stuttering. They noticed that stuttering did not interfere
with Simone’s effective communication. She was smart,
creative, interesting, persuasive, caring and human.
Simone was recruited for the job and still works for this
‘celebrity lawyer’s firm’ in Los Angeles.
A new angle
Both creativity and humour were used to positively shift
Simone’s perception towards communication. Her selfworth
improved, and she was happier and more confident
in herself. The client-clinician relationship developed into
a very healthy and much essential therapeutic alliance:an
alliance based on respect and sincerity. When Simone
found her soul mate,I was honoured to be her ‘best man’
in their wedding.
Humour and creativity can provide a new insight about
a problem and allow for a wider degree of objectivity.
In creativity we say ‘ah-ha’ while in humour we use ‘haha’.
The therapeutic (creativity and humour) ‘ha-ah-ha’
techniques include activities leading to shifting perceptions
and activating the ‘real’ smile. By playing with words and
encouraging self- deprecation we can become capable of
taking ourselves lightly and our profession seriously (Agius,
2018). Humor can be used in a therapeutic relationship to
lubricate the therapy process. It builds solidarity, creates
a relaxed atmosphere and encourages communication
particularly on sensitive issues. Both humour and creativity
broaden perception and help us look at ourselves from a
new angle. The bottom line is that shared humour and
laughter plays a significant part in social bonding.
• Both humour and creativity use spontaneity and
surprise. They can bring out ‘the child in you’. This is
one of the keys for success in a relationship.
• Humour is as a catalyst for change.
Agius, J. (2009) School-Age Children who Stutter: Attitude Changes
following a Thinking Skills Program. The Journal of
Stuttering Therapy, Advocacy and Research, 3, 112-130.
Agius, J. (2012) The ‘Smart Intervention Strategy’ for School Age Children
who Stutter. Special Issue Logopedie: Speech Fluency, 2, 4-11.
Agius, J. (2013) Application: Fluency: Smart Intervention Strategy.
Category: Education, Language: English, Developer: Vioside,
Requirements: Compatible with iPad.
Agius, J. (2015) Fluency SIS: Smart Intervention Strategy. Procedia- Social
and Behavioural Sciences. 193, 7-12.
Agius, J. (2018) Shifting perceptions: Using creativity and humour in
fluency intervention. Forum Logopedyczne. 26, 49-61.
Martin, R. (2007) The Psychology of Humour. Academic Press.
60 Autumn 2018
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Generational Differences in the modern workplace
and how these can impact the bottom line
Generational differences can often lead to misunderstandings and
a lack of respect amongst co-workers. Over time, these disputes
can erode employee morale and even affect the bottom line.
JOSEF GAFA` IS ONE OF THE
DIRECTORS AT JUGS MALTA.
THE COMPANY SPECIALISES
IN PRODUCING EXCLUSIVE,
INNOVATIVE AND TAILORED
CONFERENCES AND EVENTS.
Gen X - 1966-1979
Xennials - 1980-1986
Millenials - Gen Y - 1987-1996
Gen Z - 1997 - Later
Source: Business Leaders Malta
Generational differences often manifest themselves in
differences in behavior, responses and reactions. Millennial
communication styles for example, often cause tension with
older generations at work. One in three millennials think they
are good, efficient, communicators and prefer to focus on the
process required in order to achieve a desired outcome. From
the other perspective, many baby boomers and those from
Generation X consider themselves personal communicators
who are focused on building human connections and
relationships. These differences in styles of communication
command the respective generation’s approach to
communications in the place of work. For example, about a
third of millennials use social media and instant messaging to
communicate daily with colleagues and clients, compared to
circa 1 in 10 of baby boomers. Apart from communication styles,
Millennials are typically much more focused on their life/work
balance when compared to baby boomers and Generation X
who are known to be the cut-throat hard-workers. This could
also create much antagonism. When it comes to technological
knowledge Millennials are extremely well-versed and ahead of
their predecessors and this is an important asset when hiring
millennials. Due to rapid technological progress, for Millennials,
modern technology is an extension of themselves, and thus, it
is not just a hobby, but the way they live.
How could these generational differences affect the bottom
Miscommunication and misunderstandings generate mutual
feelings of disconnection and potential friction at the place of
work which in turn affects employee morale and motivation.
As a consequence less engagement eventually takes its toll on
employee productivity and performance. This domino affect or
chain reaction inevitably bites a chunk out of the bottom line.
How You Can Address and Overcome Differences?
Firstly, recognise that these differences exist and that they
account for many instances of miscommunication, perceived
disrespect or friction between coworkers. Many of the older
generations are offended by Millennials’ casual approach to
authority, while Millennials may not understand the older
generations’ adherence to rules and regulations. However,
if the generations take some time to understand each
other’s backgrounds and values, they will recognize the
role of generational differences in their office behavior. It
ultimately all boils down to open communication and mutual
understanding. Putting yourself in the other generations shoes
so as to understand their perspective and reasoning.
An effective way of promoting cross generational engagement
is through synchronized teambuilding and training workshops
which really gives the differing generations the opportunity to
step on the other side, immerse themselves and come out
with a new found perspective and appreciation.
Working with teams from different client companies, the
different cross cultural or generational differences have
become evident and as has the need for better and more long
lasting cross-generational engagement at the place of work.
64 Autumn 2018
Clown Doctors: Nature or Nurture?
MAURICE SLEYPEN PRESIDENT
OF DR KLOWN SINCE 2013 IS AN
WHO WORKED FOR 20 YEARS AS
A HUMAN RESOURCES DIRECTOR
AND FOR 25 YEARS AS AN HR
HE WAS A PROFESSOR IN
LEADERSHIP STUDIES AT THE
MANAGEMENT SCHOOL OF THE
UNIVERSITY OF ANTWERP.
Clown Doctors, employed professionals or volunteers,
are at work in paediatric hospitals in over 750 hospital clown
organisations around the world. They practice clown care:
Through their comic presence they bring children relief from the
anxiety, pain and boredom they experience when admitted to
Clown doctors are a special breed of character with a
unique personality and name, such as Dr Cupcake in pastel
icing colours, Dr DoReMi who has an unstoppable urge to
sing, Dr Buttons, Dr OoPsiE, etc. Each wears a personalized and
decorated white medical lab coat to make the white coats of
the medical staff less scary.
The clowns often carry a variety of props but essentially,
any object or toy that is found in a patient’s room can be a tool
to clown with, using some imagination or magic, trying to find
that “one door” they can open for a child. Finally, all wear a red
nose, “the smallest mask in the world”, signalling: Here comes
Dr Klown in Malta started in 2011 as a 100% volunteer
association, counting today 45 volunteers, of which more than
half are Klown Doctors.
Can one be educated to become a Klown Doctor?
The volunteer Klown Doctors have no professional background
as clowns (neither are they medical doctors). They all pass
through a whole year of training in skills like mime, puppet play,
singing, music and dancing, magic, etc. Improvisation is probably
the most important skill of all, as they have to adapt to a different
situation in every room they visit and to the health of the child.
And of course, to apply all these skills in a paediatric ward
requires specific training, for which we have to call on the help of
specialists from abroad.
We believe that people can develop into a clown. There’s only
one major condition: The potential needs to be there! It is clear
that it helps to be “a natural clown”. They learn faster, are more
expressive and feel usually more at ease with changing from their
normal behaviour into clown mode.
Hospital clowns are strongly oriented towards the sick
child rather than towards their own performance. Success is
not to play out a good act, but whether the child has enjoyed a
moment of distraction, has been able to be a child again in an
Is being a hospital clown an educational experience?
To give a simple answer: Yes.
Becoming a hospital clown is a process of personal
development. The experience of visiting the wards is enriching.
One develops as well empathy skills as the ability to master one’s
own emotions. The constant need for improvising increases one’s
flexibility of thought and creativity. Seeing children experience
so much pain and how most of them manage to deal with it,
humbles one and makes one count his/her own blessings. This
positive personal development is in fact the only reward they get
for their work and dedication, besides the satisfaction of seeing
smiles on the kids’ faces.
But clowns are only human. The level of suffering and pain
that hospitalised children live with, silently and not so silently,
defies description. The clowns are not always successful, at
least not in the sense that most people would judge the work.
Sometimes they are unable to help because what’s going on
in the room is beyond the reach of these “magicians of the
soul”. They play soft tunes and leave. But most of the time they
succeed to spread smiles among the young patients and even
have them experience hilarious moments, forgetting all about
the sad environment they’re in, leaving them with only one
request: “Will you come back tomorrow? Please??”
66 Autumn 2018
You value uniqueness.
What impact will you make?
From concept to reality
As Artificial Intelligence and the Internet of Things move from concept to reality, today’s
businesses face multiple challenges and exciting opportunities.
To find out how we could work with you visit www.pwc.com/mt
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