Sunday, January 30, 2005

ACCA exam feedback (paper 1.1-3.7)

LCA’s director of international operations at LCA Peter Keeling casts his eye over the December sitting

Examiners like students should be relevant, clear, to the point, on the syllabus and careful with their use of time – so let’s see how they performed at Christmas – who was the turkey, the cracker and the fairy at the top of the tree!

Paper 1.1 was an excellent exam paper. It held the right balance between computational and written elements. The questions were all on syllabus and relevant. The conventional question 5 however was not very relevant.

Paper 1.2 has improved since David Forster took over. If his last paper was a little tough this was a little too soft. The conventional questions are not that predictable so students must not use ‘question spotting’. Question 3 may have caused a few problems for the brighter students who might try to find a standard net profit per unit only to be worried about the long-term normal level of activity.

Paper 1.3 posed no real time constraints and the scenario question was as in the past ‘signposted’ in an article in the ACCA Student Accountant magazine – so keep up the reading of articles by John Ball. The section B questions were as always ‘textbook’ questions with little application of knowledge required – so keep up the reading of your textbook.

Paper 2.1 usually requires plenty of application rather than pure learning. This was an excellent examination paper. As always very fair – one of his best. I liked the mark allocations with plenty of short questions to give syllabus coverage but not expecting too much depth from accountants on an IT paper. Question 5 was however very weak since it required students to explain the notation of techniques to document systems rather than applying the techniques – brighter students will not like this.

Paper 2.2(UK) has rarely posed any problems for well-prepared students question 4 was time pressured but overall this paper was straightforward.

Paper 2.3 (UK) is always a more time-pressured paper but this time it was seen as a fair paper typical of examiner David Harrowven. There were a couple of items that were off-syllabus in question 7 – non-trading charges and Schedule A property tax on individuals – but overall a sensible paper.

Paper 2.4 was a paper that the well-prepared student should be able to pass. The problem with paper 2.4 is that the syllabus is just too big. Question 1 was badly worded in many places and may have caused problems for brighter students. Question 5 was probably avoided by many students who realised that they can skip certain topics in their studies to deal with this overburdened syllabus.

Paper 2.5 is always a paper with time pressure but probably less so this time – but beware in June. Question 3 gives twenty marks for churning out facts regarding the standard setting process and the bodies involved – boring in the extreme! Only 5 marks are given for commenting on the effectiveness or otherwise – do we want thinkers or word processors? Question 5 on purchase of own shares was excellent – but I imagine no one will agree with me – particularly not the students! At least it won’t come up next time – but don’t quote me on that!

Paper 2.6 rarely poses problems. The new examiner coming in next time has stated that he will follow along the lines of his predecessor – that is good news – so read his article in Student Accountant. This paper was well balanced with both knowledge and application. It is clear that students must know their standards well and be confident in internal control and basic audit procedures. Audit risk continues to feature more than once. Question 6 was rather open-ended asking students to explain and describe the main audit procedures at the interim and final audits – where do you start and where do you end?

Paper 3.1 Kim Smith sets good papers and apart from question 6 this was a fair and thorough paper. The issue with question six was that it was based on her article in Student Accountant that many students and tutors thought was rather difficult to read and also wondered why it had been written in the first place! We now know – it was written to enable students to answer an equally strange question! I hope I am not alone in making these comments – I just could not see the point of the question! But for other questions students must practice plenty of questions to pass this paper – it is an applied exam. Students must also remember that the examiners answers are longer than they are expected to produce.

Paper 3.2(UK) has been a problem for some time and this is the last paper of the current examiner. Students should read any articles by the new examiner for pointers to the future.

Paper 3.3 has an excellent examiner in Shane Johnson and this paper was fair and well balanced. Question 1 contained some ‘Mickey Mouse’ level calculations that used to be taught at Foundation level – profit maximisation and break-even level. Part (f) on the limitations and benefits of SWOT analysis was too much of a textbook question – better to get students to do the analysis based on the scenario and then make specific comments.
Question 3 was very weak and a lazy effort – why ask students to state how Business Process Reengineering (BPR) can enable ‘overall’ business performance to be improved without any context? Merely trotting out textbook points is not very demanding or thought provoking. Why not tell students about the industry, competition, systems in place and history of the business – essentially including some IT? Question 5 also lacked any context or scenario to make it relevant.

Paper 3.4 We are now getting used to George Bakehouse as an examiner. Question 1 was ultimately fair if a little vague in its requirement. Question 2 saw SWOT as a regular feature since it is a good way of working through the detail of a case study scenario. In question 3 students may have found it hard to produce an ethical analysis of a dilemma that appears not to be a significant ‘ethical’ issue. Not a good question since its real purpose was to churn back the model used in the article written recently by the examiner. Question 4 covered SSM again but I felt that part (b) was missing the whole point of SSM. The example of a bank processing bank transfers for payroll payments is about as hard and mechanistic as you can get. In question 6 I was pleased to see both Nolan and Parsons in the exam but felt that the examiner was out of date in his views. I found part (b) difficult, and so did the examiner judging from his very weak answer!

Paper 3.5 Rather as in paper 3.4 some of the theories and models being examined are now over twenty years old and beginning to show their age. The case study scenario did not encourage students to integrate financial and strategic analysis and the financial information given was rudimentary. Students may have been diverted from the main aspects of the case study question by the complexity of the business structure. Overall the paper would not have caused too many problems for students who have learned their theory but it does not really apply the theories and demand critical thinking.

Paper 3.6 was largely fair, clearly written, unambiguous and with fair mark allocations. Question 2 on group reconstructions would not have been popular and question 3 was tough covering both cash flow hedges and embedded derivatives. Students would have anticipated question 5 but would have found the issues rather wide-ranging. Overall this was a tough but fair paper.

Paper 3.7 Overall this was not a bad paper and students should have found it easier than last time. In question1 the examiner made it too lengthy by using 6 years of cash flows. Question 2 part (b) will have caused problems – in particular the fact that one of the two companies cannot borrow both types of loan more cheaply than the other. Question 4 was rather unfair in expecting students to value call options on the basis of the value of the puts and the put-call parity theorem.

So what is our conclusion? Is there a turkey, a cracker or a fairy on top of the tree? Not really this time – they were a fair set of exams.

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