Find out what the ACCA examiners had to say at the
Paper 1.1
Preparing Financial Statements
Examiner: Neil Stein
December pass rate: 61%
He outlined his core areas of the syllabus:
* Preparation of financial statements for limited liability companies for internal purposes and for publication.
* Preparation of financial statements for partnerships and sole traders (including incomplete records).
* Basic group accounts – consolidated balance sheet for company with one subsidiary.
* Book-keeping and accounting procedure.
* Accounting conventions and concepts.
* Interpretation of financial statements.
* Cash flow statements.
* Relevant accounting standards.
PAPER 1.2
Financial Information for Management
Examiner: David Forster
December pass rate: 52%
The key areas of the syllabus are:
* Cost classification and behaviour.
* Material, labour and overhead costs.
* Absorption and marginal costing.
* Process costing.
* Standard costing.
* CVP analysis.
* Limiting factors.
* Relevant costs for decision making.
Forster's aim is to ensure that every study session is tested within every exam. He revealed that section B questions are set first. Section A questions (MCQ) are set to complement the section B questions.
Paper 1.3
Examiner John Ball kicked off his session explaining the five key topics of the 1.3 syllabus. They are, he said:
1) Management and team development.
2) Recruitment and selection.
3) Training and development.
4) Motivation and leadership.
5) Effective communication.
For the next three sittings the paper will continue to follow the existing format. Question 1 is a compulsory scenario-based question and can draw from any part(s) of the syllabus. Questions 2 to 6 follow the five topics in the order in which they appear in the syllabus. Students choose four.
When it comes to exam technique, or the lack of it, Ball said there were some serious issues. He emphasised that making the assumption that experience and/or guesswork will suffice in a paper of this kind was "just not good enough". If he had his way, on the front of every exam paper it would say in big bold letters: 'Read the damn question!'
Many candidates are not addressing the theory/practice of the exam topics and some simply do not understand the words.
Ball stressed that the questions are carefully worded. "They are deliberate, if I name a writer I want that writer back, not someone else," he said.
On far too many scripts students also don't put down what question they have answered. The examiner pointed out that candidates need to guide the markers to where your marks are.
Ball was disappointed with the December 42 per cent pass rate. "There is no excuse for this. There is a body of literature such as model answers and passed papers." He felt Question 2 (the management roles question) was a gift. He also wondered how students could struggle with a question asking them about the purpose of an application form and what information was expected on it.
Paper 2.1
Information Systems
Examiner: Steve Skidmore
December pass rate: 51%
Looking at the good and bad in December 2005
The good:
* Models and modelling.
* Opportunities for computerisation.
* Stages in the SDLC
* Project network charts.
* Software packages.
The bad:
* Models and modelling.
* Standards and quality assurance.
* Measurement and monitors.
* Feasibility report.
* Project quality plan.
Paper 2.4
Financial Management and Control
Examiner: Tony Head
December pass rate: 44%
Examiner Tony Head's key areas of the syllabus are:
* Financial management objectives.
* Sources of finance.
* Capital investment appraisal.
* Costing systems and techniques.
* Standard costing and variance analysis.
* Budgeting and budgetary control.
* Performance measurement.
Paper 2.5
Paper 2.5 has traditionally had one of the better exam pass rates and December was no exception. Examiner Steve Scott was pleased with the 2 per cent jump on June to 53 per cent. In fact he revealed that a number of his markers thought the exam too easy.
However, he said both students and the ACCA's own Exam Review Board had felt the December questions were fair and for the most part on core topics.
Scott revealed many exam centres produced very high pass rates and there were some high individual marks. He was happy that the basics of important topics such as groups, company reporting and cash flows were well understood.
When it comes to failure he was concerned that many candidates only appear to study 'expected topics' and have no breadth or depth to their knowledge. "This meant question 3 and 5 were poorly answered," he explained. There also appears to be no progression from paper 1.1. And, by adopting a mechanical approach, they send the signal to markers that they have no real understanding of what they have calculated.
Add to this poor layout, confused referenced workings and aggregation of figures without workings and you can see why the other 47 per cent of sitters failed!
When it came to the important areas of the syllabus Scott pointed out that there was always going to be a question on group accounting and one on the preparation of financial statements.
Future papers will also see a greater emphasis on examinable recent standards.
Accounting principles are one of Scott's key topics. That includes the statement of principles, revenue recognition and substance of transactions (FRS5).
Also on his core list is the ability of candidates to deal with equity, debt and convertible debt.
The treatment of finance costs income statements and classification, and carrying value in the balance sheet are also on his list. He said questions may also specify the category of a financial instrument. Candidates will then be expected to deal with the carrying amount and any gain or loss.
Scott said there was a problem that many items he examines now come under FRS 25/26. His main advice is that the level of knowledge for these items is unchanged. He emphasised it was unlikely that irredeemable preference shares will be examined, but redeemable will.
Paper 2.6
Alan Lewin started by telling delegates at the conference that students who have 'done an audit' will do better in his exam. He then outlined the key areas of the exam:
* Professional ethics.
* Understanding the nature of auditing.
* Risk assessment and internal controls.
* Practical application of audit techniques.
* Newer areas including corporate governance, ISAs, etc.
Without stating the obvious he said there are just three diets left for this paper and he promised no major changes.
Lewin said his question style will remain scenario based, sometimes with five mark intros. The whole syllabus will be examined, Lewin stressed. However, there are 27 syllabus areas and he only has 18 questions left.
Lewin pointed out that there were ways for candidates to improve their chances of passing. "They must practice clear and precise presentation," he said. Lewin went on by saying student have to practise answering questions in full.
When reading model answers in the revision phase, he suggested it will help to write down the points that you have missed. Lewin pleaded for candidates in June to write legibly and said that a clear heading does assist in making a point clearly.
Paper 3.1
Examiner Kim Smith is a passionate woman when it comes to auditing and she came to the Teachers' Conference desperate to understand why her paper pass rate was so low this time around. "We are now nine sessions on and I will keep on examining the same topic areas, I just wish I didn't have to see the same students sitting this paper again and again."
There are, she explained, lots of reasons why students are failing the paper, the most common one being not answering the question set. Students are also dealing with generalities instead of specifics.
Another problem is the 'auto pilot' candidate. This is the students who see a word and away they go. Regurgitation of the text book or simply copying out the question details gets you zero marks!
Smith's markers have adopted special acronyms for the reason pages and pages of a script have no mark on them!
There is what you don't want on your script:
* TV (too vague).
* CQ (contradicts question).
* X (wrong!) .
* So? (failure to conclude).
Smith was shocked with how poorly candidates were performing – she believes her paper is very predictable. She does want students to be better read. "They can't just rely on Student Accountant and a manual," she stressed. That is especially true when it comes to current issues.
She expects students to consolidate their 2.6 knowledge and expand on it. There is a problem here, however, as some students could actually be sitting papers 2.6 (the other auditing paper) and 3.1 at the same time.
Students also had to understand there aren't many rote learning marks available at 3.1.
Smith said to some extent her hands are tied by DTI regulations: "This is the last auditing exam a trainee sits and there are standards we have to maintain."
Paper 3.3
The key areas of Johnson's paper are:
* Management accounting systems.
* Performance indicators.
* Performance assessment.
* Process costing.
The examiner asked students to avoid question spotting. "Given that 60 marks are compulsory it is a risky strategy to question spot," he told delegates to the conference.
Johnson acknowledged that those three hours in the exam hall can be the fastest three hours of you life.
During the Q&A session he also said students should go back more than six months when looking for relevant articles in Student Accountant.
There have been some recent additions to the syllabus. From June 2006 students can be examined on:
* Ansoff's grwoth vecxtor matrix.
* Boston Consulting group matrix.
* Porter's five forces model.
Turning to the December exam he felt many candidates still entered the exam hall inadequately prepared. Johnson was concerned that many PQs lack the lower level (assumed) knowledge. The also had the sense of students playing the wrong options.
PAPER 3.4
Business Information Management
Examiner: George Bakehouse
December pass rate: 46%
Bakehouse provided the key areas of the paper:
* Organisational information requirements.
* Knowledge management and information systems.
* IS and the strategic planning process.
* Business systems, systems thinking and systems analysis.
* Gap analysis and business case development.
* IS and competitive position.
* Electronic commerce, internet as a strategic business tool.
* Implementing change.
* Impact of IT on work practices.
Paper 3.5
Examiner Ralph Bedrock set his first paper in December 2003. During that time the paper's structure has remained the same and pass rates have consistently remained above 50 per cent.
He said the key skills remain strategic analysis, choice and implementation. The problem for 3.5 sitters is centred round the candidates' ability (or inability) to choose and use appropriate models. He wanted students to take the opportunity to explore new areas and he couldn't hide his disappointment that students avoided new topics which they deemed 'difficult'.
Turning to the December sitting Bedrock the bulk of those who pass (80 per cent) achieve marks between 50 and 60 per cent.
He said that as a general rule of thumb candidates who don't 'pass' the compulsory question generally fail 3.5. His big complaint was question hopping, where students answer parts A and B of Question 1 and then go onto an option question. They then return and answer part 1C before moving onto another optional question. Finally part 1D is answered. This all becomes very complicated for markers - the people you really want to impress.
Paper 3.6
The average pass rates world wide for this paper is 50 per cent. However, Holt revealed that there are significant differences in centre pass rates.
A major factor which causes failure, he said, is the lack of understanding. For instance Holt is amazed at the number of students who don't know the difference between an associate and subsidiary.
Other reasons for failure were students not reading widely enough and poor study skills.
Holt said if he asks for a report then that's what he wants. He stressed that marks are even allocated for the layout.
He also warned students that if they perform poorly on a question they can expect that subject area to reappear! Deferred tax and pensions comes to mind here.
Holt explained that FRED 32 will keep popping up. FREESE is also important (he said that about 13 times). Even the OFR is still examinable. "There are lots of issues about its demise," he said.
Holt stressed that every marginal script was looked at (between 45 and 50 per cent) to see if students should pass.
Students simply don't help themselves here if they have only answered three out of four questions. Holt is concerned at the number of candidates who are not attempting the correct number of questions.
Paper 3.7
Examiner Scott Goddard is worried he is going soft in his old age. At 49 per cent this is the best performance of any cohort sitting a Goddard exam. Apparently, the only people who complained were the marking team, who had more marks to add up this time around.
Interestingly, the next three papers will be the last Goddard sets for the ACCA – he will not be an examiner for the new syllabus.
He stressed that this final ACCA paper was equivalent to a masters degree, which is not always realised by candidates. Too many exam papers are filled with superficial answers and low level analysis, he said. And he claimed that there was often poor use of information and data in the question. Another worry was the lack of evidence of reading or use of real-world examples. "Have students not heard of the Financial Times and The Economist?" he asked.
December saw a much better performance by candidates compared to June. Good marks were earned on the compulsory questions (which was felt to be more user-friendly). Question 1 was the best answered question, with students showing a good understanding of investment decisions. There were some problems with the timing of cash flows and some confusion about risk and the cost of capital. Goddard also pointed to the 12 marks available for discussion.
The key five areas of the syllabus are not going to change in the three exams left, and they are:
* Investment decisions.
* Risk analysis.
* Global financial management.
* Treasury management and financial forecasting.
* Strategy formulation.
Goddard promises a rough policy of covering all these every four sittings. His advice to students was to focus on past papers and solutions for guidance. He pleaded with them not to produce ridiculous answers, eg options prices in excess of the value of the underlying asset. Candidates also had to attempt all parts of questions and display analytical skills. Ultimately, he and his 31 markers want to be provided with evidence that you are capable of offering good professional advice.
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