Have you recently sat some accounting exams? Are you curious about what the examiners are looking for? Page Personnel bring you a break down of each of the main papers right here.
Your paper-by-paper guide to the December sitting
Paper 1.1 A typical paper. There were a couple of challenging areas: the need to calculate the profit figure for the cash flow statement which has not been tested before and a requirement to explain the B/S impact where the going concern assumption no longer applies.
Paper 1.2 A couple of tough MCQs - profit maximisation and flexible budgets. Some of section B was trickier than others. Remember: candidates who answer all parts of the questions do best.
Paper 1.3 Generally fair with the expected case study scenario on counselling. The twist was the question was based on an external counsellor.
Paper 2.1 No hidden surprises. The examiner included more questions requiring practical knowledge and experience than usual and section A was skewed towards designing information systems.
Paper 2.2 Again, the examiner set questions on specific areas of law in section A. Candidates should have been able to attempt six of eight questions.
Paper 2.3 A very fair and well-balanced paper. The surprise was to see two adjustments to profit calculations in the same exam and very little benefits.
Paper 2.4 FM was the focus of the compulsory section. Examination of efficient market hypothesis may have come as a surprise, but this has appeared before and should not have posed a problem.
Paper 2.5 An excellent paper from Steve Scott. A fair exam with a good spread of marks. However, again it was time-pressured, and could only have been completed within the allotted time by well-prepared students.
Paper 2.6 The expected standard for this paper. The compulsory question might have thrown a few PQs as it required the calculation of specific consolidation balance sheet figures as well as the preparation of a consolidated income statement.
Paper 3.1 Tough but fair. Candidates can't have been surprised by the financial statement risks, analytical review and audit evidence in question 1.
Paper 3.2 Less VAT than is the norm. To pass the paper required good basic knowledge. The first exam from new examiner Roy Fish, the main complaint is what was not examined rather than what was. Core topics such as IHT, death duty, income tax computations and property business profits were all omitted.
Paper 3.3 A better paper this time around - phew! The scenarios still seem a little too long. Some of the longer scenarios were broken down into sections with the recommendations inserted in the body of the text rather than at the end. This made it more difficult to read and plan.
Paper 3.4 A typical paper. Students should have been happy with this.
Paper 3.5 A challenging but well-balanced paper. Section A required an analysis of past performance of a business, followed by an evaluation of how it should be strategically developed. Section B questions covered all the bases on strategic management themes, with specific HRM, IS/IT, etc, topics conspicuous by their absence.
Paper 3.6 As easy/difficult as always. Core syllabus areas were tested. The main feature of the compulsory question was, you guessed it - group accounting. Preparation of a cash flow statement was also there. The examiner said he was going to examine financial instruments regularly so it should not have come as a surprise that it appeared twice.
Paper 3.7 No bombshells - the well-prepared candidate should not have to worry that there is only one sitting left of this as a core paper! Interest rate hedging and business valuations were both compulsory questions. It has been suggested that the standard and style of the exam were appreciably easier than in recent sittings.
A big thank-you to BPP and FTC for their in-depth feedback on the ACCA exams
Marks out of 10
We might not know all their names but let's check out how the CIMA examiners are performing. Here Tim Stewart of BPP gives them marks out of 10 for the recent papers
Paper 1 Management Accounting - Performance Evaluation
This was the first paper by the new paper 1 examiner. The style and content of the paper was very different to what we had seen previously but the standard of the exam was more in line with our initial expectations for the paper.
Paper 2 Management Accounting - Decision Management
The examiner focused on the main syllabus areas, although some questions needed knowledge brought forward from the certificate level. Areas featuring in recent articles were not examined (so don't believe all you read).
The three 10-mark compulsory questions will have been the problem area. Question 2 covered value chains/systems but lacked information about customers and suppliers. Question 3 covered product lifecycle cash flows and while this was not difficult, the length of the question text and the quantity of numerical workings would have made time management a challenge.
Paper 3 Management Accounting - Risk and Control Strategy
While this exam retained a challenging style of questioning that we have come to expect, there was a fair coverage of syllabus areas.
As ever skills for paper 3 include a breadth of knowledge of the syllabus, as well as a healthy dose of common sense and business experience. The difference between the level of complexity of the CIMA study system and that of the exam continues to confuse both tutors and students.
Paper 4 Organisational Management and Information Systems
This was a reasonable and straightforward paper which was of a consistent level of difficulty to the May sitting. Section A contained a straightforward set of multiple-choice questions with the inevitable one or two that would have challenged. Then five objective testing questions covering marketing and HR syllabus areas - the challenge would have been condensing answers into 50 words.
Paper 5 Integrated Management
The November 2006 paper was on the whole a reasonable paper and contained core syllabus areas for section A and B.
Section C included a question covering transaction cost theory and the flexible firm or Shamrock. Both of these are quite complex areas which students may have wished to avoid. Many would have found the other two optional questions more appealing, including a straightforward question on core areas of project management software and stakeholder analysis.
Paper 6 Management Accounting - Business Strategy
Overall this was a reasonable paper, being both accessible to weaker candidates and offering sufficient complexity to provide stronger candidates with opportunities to show what they could do.
Section A contained all the marks for calculations available in the exam (18 marks). While focused on strategic matters, the first two requirements were built around techniques relating to performance measurement (balanced scorecard, benchmarking) topics that have usually appeared in section B; this may have thrown some candidates. The third requirement covered the competitive advantage that could be achieved through knowledge management - this is a difficult concept and less well-prepared candidates could struggle with this requirement.
Paper 7 Financial Accounting and Tax Principles
This was a fair paper with many questions that a well prepared student should have felt comfortable with. There were no surprises in section A. In section B students who tackled the more straightforward requirements before dealing with the trickier areas
(eg question 2e - a consideration of risks attached to different methods of investing surplus funds followed by trickier calculations of return the company would achieve) should have picked up good marks. Section C was an accounts preparation question with typical adjustments, which students should have been pleased to see as this is an area they would have practised.
Furthermore, this area was not tested extensively in May 2006 and so students should have been expecting such a question.
Paper 8 Financial Analysis
This was a tricky paper, and an unusual approach to pensions was needed. The pass rate on this paper could easily go down - the 25-mark question on groups was particularly tough. You'd have to thoroughly know your stuff to do well on this one.
Paper 9 Management Accounting - Financial Strategy
A reasonably straightforward paper this time around as compared with recent sittings; as expected it contained a strong emphasis on investment appraisal. The first two requirements of the compulsory section A question asked the candidate to analyse eight different scenarios for 20 marks! Many candidates will initially have found this unsettling but after reading time had elapsed it should have been clear that most of these were straightforward and that the correct approach could quickly have been repeated. Section B included two standard questions covering valuations, funding and venture capitalists - these would have been good choices.
An unusual feature of this paper was the complete absence of any cost of capital calculations.
Paper 10 Test of Professional Competence in Management Accounting
Candidates were faced with fewer issues than in the September 2006 exam (and in many previous exams), which should have permitted them to discuss the issues more fully.
The central issue was the need to turn around Kadgee by shifting operations and much management overseas to China or to one of two other Asian countries. This carried with it implications for the downsizing of the existing operations over a year. There was also the need to ensure the overdraft did not exceed £2,500,000.
Paper 1: 8/10 What we expected
Paper 2: 6/10 Time management was tough
Paper 3: 7/10 Continues to confuse
Paper 4: 7/10 Reasonable and straightforward
Paper 5: 7/10 Contained core syllabus
Paper 6: 7/10 A struggle for some
Paper 7: 8/10 Fair and balanced
Paper 8: 4/10 Far too tough
Paper 9: 8/10 Clear and focused
Paper 10: 8/10 Better than previous sittings
Mark Protherough, head of operations and director of learning and professional development at the ICAEW, explains the updating of the ACA qualification and how it will affect those of you who are studying.
September 2007 will see the introduction of a substantially different and revised ACA qualification from the ICAEW. Although there have been yearly updates to the syllabus content to ensure the qualification maintains its relevance and technical accuracy, changes in the financial and business environment, coupled with feedback from students, trainers and employers, mean that more substantial modifications were required.
Among the enhancements we have made to the professional stage are measures to ensure that trainees are equipped with core technical knowledge and skills early on in the training contract. These will be reinforced and further developed throughout the professional stage. In addition, employers will have the flexibility to choose a route through the modules relevant to the work that a trainee will be undertaking, to better align trainees' exam study and the knowledge needed in the workplace.
Computer-based assessments for elements of the syllabus will also be introduced. These will enable trainees and employers to schedule their assessments at times and dates that are convenient for both parties. Lastly, a wider and improved range of tuition and study options will be facilitated.
These enhancements have also been reflected in the advanced stage where we will be making a clear distinction between the business topics and associated technical content covered in each of the two technical integration modules. This will allow a greater focus on the provision of technical advice, ensuring that trainees are continuing to demonstrate professional as well as technical skills. These changes will also enable a greater focus on the differences between IFRS and UK GAAP.
What hasn't changed is the commitment to ethics. Professional accountants have a responsibility not only to their employer but also to act in the public interest. A professional accountant should observe and comply with the highest ethical standards at all times. With the new syllabus, ethics are given greater prominence where it is integrated into eleven of the exams.
Overall, for those training under the existing syllabus, our recommended advice is that trainees should ideally complete the existing professional stage and then move over to the enhanced advanced stage.
In order to assist our existing ICAEW students, we will be running both the current and new examinations for a limited period of time.
In detailed terms, those trainees on the professional stage should try to finish the current accounting, audit and assurance, financial reporting and taxation exams before June 2008 in order to minimise the conversion process.
For those advanced stage students, the current advanced stage Test of Advanced Technical Competence (TATC) exams will be available in July 2008 and November 2008 but only for resit students. ACA trainees who have not attempted the TATC exams prior to 2008 will be required to transfer to the new advanced stage exams. This is an automatic process handled by the Institute. Students who have passed either business life cycle or business environment when the TATC exams are withdrawn after November 2008 will be awarded credit for business reporting and be required to pass business change.
For AAT-ACA Fast Track students, the current AAT-ACA Top-Up units are available until December 2007 and all other professional stage exams are available until June 2008. Students who pass any of the 'ICAEW Taxation' Top-Up units by December 2007 will have met the professional stage requirements for tax and those who pass the ICAEW 'Audit & Assurance' Top-Up unit by December 2007 will have met the professional stage requirements for Audit & Assurance.
Information on beyond December 2007/ June 2008 can be found on our website - go to www.icaew.co.uk/aca2007.
Students do not need to do anything as the conversion process will be handled by the ICAEW. There will also not be a dramatic change in the style of tutoring and we aim to have a seamless transition. Employers have also been kept up-to-date of the changes.
The qualification will continue to uphold the highest standards of our profession. The exams will be a tough and rigorous test of skills and knowledge to maintain the quality and reputation of the ACA. This is why the minimum entry requirements will remain the same, the interview process for training contracts will be as stringent as ever, and resources including mentor, client services, support materials and student societies continue as before.
The new ACA syllabus will enable the next generation of chartered accountants, as with current and previous generations, to challenge people and organisations to think and act differently, to provide clarity and rigour, and so help create and sustain prosperity.
Potential Careers Paths - examples of what people have gone onto once qualified