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26 DIRECTORY
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ALL YOU NEED TO KNOW
Articles on key examinable
topics to support your studies
TECHNICAL
28 CHANGES TO THE CAT
QUALIFICATION WITH THE
LAUNCH OF FOUNDATIONS
IN ACCOUNTANCY
Relevant to CAT
Qualication Papers 14
USING THE WORK OF AN
AUDITORS EXPERT
Relevant to CAT
Qualication Paper 8
PASSING THE
PROFESSIONAL
LEVEL PAPERS
Relevant to ACCA Qualication
Papers P1, P3, P4, P5, P6 and P7
ONLINE RESOURCES
Find online study resources for the CAT Qualication at
www.accaglobal.com/students/cat
Find online study resources for the ACCA Qualication at
www.accaglobal.com/students/acca
HOW TO TACKLE
EXAMS: A MARKERS
PERSPECTIVE
Relevant to ACCA
Qualication Papers P1,
P3, P4, P5, P6 and P7
THE EXPORT
INCENTIVES REGIME
IN MALAYSIA
Relevant to ACCA
Qualication Paper P6 (MYS)
CHANGES TO CAT QUALIFICATION
WITH THE LAUNCH OF
FOUNDATIONS IN ACCOUNTANCY
RELEVANT TO CAT
QUALIFICATION PAPERS 14
This article outlines the new Introductory
and Intermediate Certificates in Financial
and Management Accounting as part
of the Foundations in Accountancy
suite of qualifications, effective from
December 2011.
ACCESS RESOURCES RELEVANT TO
CAT QUALIFICATION PAPER 1
www.accaglobal.com/students/cat/
exams/t1/
exams/t2/
exams/t3/
exams/t4/
USING THE WORK OF AN
AUDITORS EXPERT
RELEVANT TO CAT
QUALIFICATION PAPER 8
This article considers when an auditor
may need to rely on the opinion of
experts to provide assurance in areas
of an entitys financial statements.
exams/t8/
PASSING THE PROFESSIONAL
LEVEL PAPERS
RELEVANT TO ACCA QUALIFICATION
PAPERS P1, P3, P4, P5, P6 AND P7
As well as identifying the key skills
required to pass Paper P3, Business
Analysis, this article also outlines
what candidates can do to ensure
they are well prepared for Professional
level exams.
ACCESS ACCA ONLINE
STUDY RESOURCES
www.accaglobal.com/students/
THE EXPORT INCENTIVES
REGIME IN MALAYSIA
RELEVANT TO ACCA
QUALIFICATION PAPER P6 (MYS)
Siew Chuen Yong, examiner for Paper
P6 (MYS), provides an overview of the
prevailing export incentives regime
in Malaysia.
ACCESS RESOURCES RELEVANT
TO ACCA QUALIFICATION PAPER P6
www.accaglobal.com/students/acca/
exams/p6/
HOW TO TACKLE EXAMS:
A MARKERS PERSPECTIVE
RELEVANT TO ACCA QUALIFICATION
PAPERS P1, P3, P4, P5, P6 AND P7
A lack of knowledge is not the only
thing that can lead to exam failure
poor technique could also let you
down. Sean Purcell, Paper P3 marker,
highlights some common errors all
ACCA students need to avoid.
ACCESS ACCA ONLINE
STUDY RESOURCES
www.accaglobal.com/students/
ACCA QUALIFICATION
TECHNICAL ARTICLES
PAPER F1
exams/f1/technical_articles/
PAPER F2
PAPER F3
PAPER F4
PAPER F5
PAPER F6
PAPER F7
9 MAY 2011 RELEVANT TO ALL STUDENTS
TECHNICAL ARTICLES
28 TECHNICAL
PAPER F8
PAPER F9
PAPER P1
exams/p1/technical_articles/
PAPER P2
PAPER P3
PAPER P4
PAPER P5
PAPER P6
PAPER P7
CAT QUALIFICATION
TECHNICAL ARTICLES
PAPER 1
exams/t1/tech_articles/
PAPER 2
PAPER 3
PAPER 4
PAPER 5
PAPER 6
PAPER 7
PAPER 8
PAPER 9
PAPER 10
STUDENT ACCOUNTANT
TECHNICAL ARTICLE ARCHIVE
Access the online and comprehensive
Student Accountant technical article
archive at www.accaglobal.com/
students/student_accountant/
archive/ to help with your ACCA or CAT
Qualification studies.
CHANGES TO THE ACCA
QUALIFICATION FROM
JUNE 2011
Read more at www.
accaglobal.com/students/
student_accountant/
archive/2010/108/3333957
FOUNDATIONS
IN ACCOUNTANCY
Learn more about ACCAs
suite of entry-level
qualications Foundations
in Accountancy at
www.accaglobal.
com/a
RESOURCES
www.acca
global.com/
students/acca
www.acca
global.com/
students/
cat
29
STUDENT ACCOUNTANT ISSUE 09/2011
ACCA is committed to providing
support to all its students. As part of
this support, a range of materials
in a variety of media to reach as many
students as possible is available
specifically to address the ACCA
Qualification exams. Information from
ACCAs examiners including examiner
reports, examiner interviews and a
wide variety of technical articles are
available in a range of different media
on the ACCA website.
The two sets of examiner interviews are
available on www.accaglobal.com
and are extremely valuable resources.
Each set of interviews can help
you prepare for your exams in
different ways and, when used in
conjunction with the paper resources
available, they can make a big
difference to your studies.
EXAMINERS APPROACH INTERVIEWS
The examiners approach interviews
are very useful when you are
undertaking a particular paper for
the first time, giving you a real insight
into what examiners are looking
for in terms of exam performance.
They cover the main themes of each
paper and give information on the
style of the exams and how they
are structured. They also advise on
exam technique, with tips on how to
succeed and potential pitfalls to avoid.
The examiners approach interviews
complement the examiners approach
articles, which were written to
give guidance on how to tackle each
exam paper. These resources contain
similar information but the difference
in delivery method can be a useful
advantage when studying and may
give you a better chance of absorbing
the examiners advice. The examiners
approach interviews also contain
useful links to other relevant resources
for your exam.
EXAMINERS ANALYSIS INTERVIEWS
The examiners analysis interviews build
on the examiners approach interviews.
They highlight where students
are performing well, where students are
performing less well, and give advice on
how students can improve performance
in problem areas.
Its never too soon to start listening
to the examiners analysis interviews,
but they would probably be most useful
once you have covered the syllabus and
are starting to think about the detail of
a paper and how to apply what you have
learned in the exam.
They are designed to give guidance
around which areas of the syllabus
students have been struggling with
in recent exam sittings and how
students can tackle the difficulties
others have been having. The analysis
interviews are closely related to
the examiners reports, which are
published after each exam session.
They bring together the examiners
reports from the first three sessions
of the ACCA Qualification, illustrating
that some mistakes are being repeated
consistently and highlighting critical
areas of the syllabus to focus on.
Remember, this does not mean one
of those areas will necessarily be
examinable in the next session. The
ACCA website will soon feature new
examiner interviews recently recorded
at this years Learning Providers
Conference look out for details in
upcoming issues of Student Accountant.
It is still very important to make use
of the individual examiners reports
available in Student Accountant and on
the ACCA website, as well as listening to
the analysis interviews. After you have
worked through a practice question,
refer to the relevant examiners report
and you will find an analysis of that
question, what the examiner is looking
for in a good answer, typical answers
given by students, why they might not
be relevant and so on.
All of these resources and others
such as the Syllabus and Study
Guide, past papers, examinable
documents and technical articles can
be accessed at www.accaglobal.com/
students/acca/exams/
EXAMINERS APPROACH AND EXAMINERS ANALYSIS INTERVIEWS
EXAM SUPPORT
30 TECHNICAL
ACCA IS COMMITTED TO PROVIDING SUPPORT TO
ALL ITS STUDENTS. EXAMINER REPORTS, EXAMINER
INTERVIEWS, EXAM NOTES (WHICH PROVIDE
GUIDANCE ON EXAMINABLE MATERIAL INCLUDING
RELEVANT ACCOUNTING AND AUDITING DOCUMENTS
FOR PAPERS F3, F7 AND P2) AND A WIDE VARIETY
OF TECHNICAL ARTICLES ARE AVAILABLE IN A RANGE
OF DIFFERENT MEDIA ON THE ACCA WEBSITE AT
WWW.ACCAGLOBAL.COM/STUDENTS/ACCA/EXAMS

RELEVANT TO CAT QUALIFICATION PAPERS 1 4

2011 ACCA

CHANGES TO THE CAT QUALIFICATION WITH THE LAUNCH OF
FOUNDATIONS IN ACCOUNTANCY: INTRODUCTORY AND
INTERMEDIATE CERTIFICATES IN FINANCIAL AND MANAGEMENT
ACCOUNTING
With effect from December 2011, new exams in Foundations in
Accountancy, leading to a range of new certificates, will be launched.

The first two levels, previously known as the CAT Introductory and CAT
Intermediate levels, will now lead to two ACCA certificates:
Introductory Certificate in Financial and Management Accounting
Intermediate Certificate in Financial and Management Accounting.

Introductory Certificate in Financial and Management Accounting
The Introductory Certificate in Financial and Management Accounting is
awarded on passing the Recording Financial Transactions (FA1) and
Management Information (MA1) exams and successful completion of the
Foundations in Professionalism module.

The Introductory Certificate is suitable for those aspiring to work, or
already working, in:
a junior accounts clerk/junior bookkeeping role in a small or
medium-sized entity (SME)
a range of junior accounting administration roles within an
accounting department of a larger organisation or financial shared
service centre.

The Introductory Certificate in Financial and Management Accounting is
broadly equivalent to GCSE/O-level.

Intermediate Certificate in Financial and Management Accounting
The Intermediate Certificate in Financial and Management Accounting is
awarded on passing the Maintaining Financial Records (FA2) and
Managing Costs and Finances (MA2) exams and successful completion of
the Foundations in Professionalism module.

The Intermediate Certificate is suitable for those aspiring to work, or
already working, in:
a bookkeeping or cost clerk role in an SME
a range of accounting administration roles within an accounting
department of a larger organisation or financial shared service
centre.
2

CHANGES TO CAT

MAY 2011

2011 ACCA

The Intermediate Certificate in Financial and Management Accounting is
broadly equivalent to A-level.

Changes to the syllabuses within the new Foundations in Accountancy
Certificates with effect from December 2011
These changes are relevant to students who have taken the equivalent CAT
exam and now need to re-sit under the new structure. They are also relevant
for tutors preparing to teach the new groups of students.

FA1, Recording Financial Transactions
This exam paper continues to be offered in both paper-based and
computer-based exam formats. The structure of the new FA1 exam is
exactly the same as the old Paper 1, Recording Financial Transactions in
that there are 50 objective test type questions, each worth two marks, to
make a total of 100. A key difference is that the pass mark for the exam
is now 50%, whereas it was previously 55%.

The syllabus has been slightly modified and streamlined so there is
greater concentration on the transactional fundamentals of
accounts preparation as these are key skills required for bookkeepers at
this level.

The syllabus also now requires candidates to be able to identify
the elements of financial statements and to have an awareness of the
format of the statements, before progressing to higher level papers.

The approach of the questions is very similar to those of Paper 1,
Recording Financial Transactions. However, the Study Guide contains a
number of requirements for the candidates to explain, which may seem
unfamiliar in this format of exams. In such questions, candidates may
see questions with two statements and would have to determine which
one is correct or incorrect, thus showing a sound understanding rather
than just rote learning.

MA1, Management Information
computer-based exam formats. The structure of the new MA1 exam is
exactly the same as the old Paper 2, Information and Management
Control, in that there are 50 objective testing type questions, each worth
two marks, to make a total of 100. A key difference is that the pass
mark for the exam is now 50%, whereas it was previously 55%.

However, there have been a number of changes to this syllabus. The
main addition is the new section (Section F) on spreadsheet systems
3

CHANGES TO CAT

MAY 2011

2011 ACCA

covering the general awareness of the role and use of spreadsheets in
management accounting.

Product costing, which was only covered in the old Paper 4, Accounting
for Costs, has now been included in the MA1 syllabus (Section D4) and
mainly covers the basic aspects of product costs such as the
characteristics of and some aspects of the job, batch and process
costing system. The more advanced aspects of product costs will
continue to be covered in the new MA2, Managing Costs and Finances
paper. For more details see MA2 below.

There have been a few additions to some areas already included in the
Paper 2 syllabus. Coding now includes different methods of coding data
(Section B2b). The cost of materials (Section D1d) now includes
methods of pricing materials from inventory.

Some areas have also been removed from MA1. The nature, safety, use,
confidentiality and security of computer systems, which used to be in
Study Guide Sections 1 and 2 in Paper 2, Information and Management
Control, are no longer examinable in the new paper as they are now
covered in the new Foundations in Professionalism module.

Marginal costing and decision making, which was previously in Paper 2
(Section 12), has also been removed and is now covered only in the new
MA2.

FA2, Maintaining Financial Records
computer-based exam formats. The structure of the new FA2 paper-
based exam is different to the old T3, Maintaining Financial Records
paper. Previously, Paper 3 consisted of two sections: Section A
contained 20 two-mark multiple-choice questions and Section B
contained four 15-mark questions, with all questions being compulsory.
In the new structure of FA2, there are 50 objective test-based questions,
each worth two marks, to make a total of 100 and the pass mark for the
exam remains at 50%.

Obviously, the change to 50 questions in the paper-based exam format
means that candidates must ensure that they study across the whole
syllabus, as there will no longer be questions that offer an opportunity to
pick up 15 marks by focusing on one part of the syllabus.

The differences between the old Paper 3, Maintaining Financial Records,
and the new FA2 Syllabus and Study Guide fall into two categories new
outcomes and revised outcomes.
4

CHANGES TO CAT

MAY 2011

2011 ACCA

All of the revisions are quite minor and therefore do not need to be
considered in detail. The new outcomes are included in Section D1 sales
and purchases, Section D4 tangible non-current assets and
depreciation, and Section H3 change in partnership.

Probably the most significant of these is in outcome H3, where the
admission of a new partner including the treatment (but NOT the
calculation) of goodwill has been included. An example of how this may
be tested is that candidates may be expected to outline the accounting
treatment required in relation to goodwill or allocate and/or eliminate
goodwill among the partners.

Section D1 includes a number of outcomes relating to sales tax. Any
questions on this section of the syllabus will require candidates to
demonstrate an understanding of the principles of sales tax but will not
require knowledge of practice in any specific country or region. In such
questions where calculation is required, candidates will be given the
sales tax rate appropriate to the question scenario.

Paper 3 always required candidates to be able to calculate and record
depreciation but a new addition for FA2 is included in Section D4, where
an outcome requiring the circumstances in which different methods of
calculating depreciation has been inserted. An illustration of the type of
question that could be asked would include outlining when it would be
appropriate to use reducing balance as compared to straight line.

MA2, Managing Costs and Finances
This paper continues to be offered in both paper-based and
computer-based exam formats. The structure of the new MA2 paper-
based exam is different to the old Paper 4, Accounting for Costs.
Previously, Paper 4 consisted of two sections; Section A contained 20
two-mark multiple-choice questions and Section B contained four
questions of variable marks adding up to 60 in total and all questions
were compulsory. In the new exam structure of MA2, there are 50
objective test-based questions, each worth two marks, to make a total of
100 and the pass mark for the exam remains at 50%.

The change to 50 questions in the paper-based exam format means that
candidates must ensure that they have studied across the whole
syllabus to prepare themselves adequately.

Two new sections have been added to the new MA2 syllabus. The first is
cash management (Section E), which introduces more financing aspects
of management accounting into this syllabus and reflects the new title of
5

CHANGES TO CAT

MAY 2011

2011 ACCA

the syllabus. The second section is spreadsheet systems (Section F),
which develops further the skills introduced in the new MA1.

To make room for these new areas, MA2 no longer covers the more
basic aspects of product costs as these are now being included in the
new MA1. (Therefore, some of the study outcomes within the Paper 4
Study Guide 11, 12 and 13 have now been removed and are not in the
new syllabus for MA2).

Transitional arrangements
The changes referred to in this article apply with effect from December
2011. Both computer-based exams and paper-based exams following
new syllabuses and structures will be available from early December.

Up until December 2011, existing CAT students and those who have
registered for Foundations in Accountancy exams may still take the
computer-based versions of Papers 1 4 from February until November.
Current CAT students may also take paper-based exams in the June
2011 sitting but this is not an option for students who have registered
since 1 January 2011 and are already on the FIA register.

Conversion arrangements for existing CAT students
In August 2011, when results and conversion notices are issued to
existing CAT students, anyone who has passed any or all of these four
exams will be given like-for-like exemptions when they convert to the
new Foundations in Accountancy register.

However, it is most important for students to be fully aware that if they
take any computer-based exams for Papers 1 4 between August and
November, they will be examined on the existing syllabuses despite
them being called FA1, MA1, FA2 and MA2. So, the changes referred to
in this article will NOT apply to any exams sat before December 2011.

RELEVANT TO CAT QUALIFICATION PAPER 8 AND
FOUNDATIONS IN ACCOUNTANCY PAPER FAU FOUNDATIONS IN AUDIT
2011 ACCA
Using the work of an auditors expert

ISA 300, Planning an Audit of Financial Statements sets out the matters that an
auditor should consider, prior to the identification and assessment of the risk
of material misstatements. One of these matters is the involvement of experts.
ISA 500, Audit Evidence confirms that if the information to be used as evidence
has been prepared using the work of a managements expert, then the auditor
should:
evaluate the competence, capabilities and objectivity of that expert
obtain an understanding of the work of that expert
evaluate the appropriateness of that experts work as audit evidence for
the relevant assertion.

Clearly, if the preparation of an entitys financial statement has required input
from an expert, then the competence of the expert and appropriateness of the
work carried out are important considerations when assessing the risk of
material misstatement. ISA 500 does not refer to the work of an auditors own
expert as there is no correlation between the work of that expert and the risk of
material misstatement in the financial statements.
ISA 620, Using the Work of an Auditors Expert defines an auditors expert as:
An individual or organisation possessing expertise in a field other than
accounting or auditing, whose work in that field is used by the auditor to assist
the auditor in obtaining sufficient appropriate audit evidence. An auditors
expert may be either an auditors internal expert (who is a partner or staff,
including temporary staff, of the auditors firm or a network firm), or an
auditors external expert.
Auditors are experts in accounting and auditing matters, but they are not
reasonably expected to be experts in any other field. However, candidates
should appreciate that, in certain situations, auditors do need to employ their
own expert in order to decrease the risk that material misstatement will not be
detected. Such expertise may be required in relation to such matters as:
The valuation of:
- land and buildings
- plant and machinery
- jewellery
- works of art
- antiques
- intangible assets for example, patents and trademarks
- environmental liabilities
- site clean up costs

2
USING THE WORK OF AN AUDITORS EXPERT
MAY 2011
2011 ACCA
The estimation of:
- oil reserves
- gas reserves
- mining reserves

The actuarial calculation of liabilities associated with:
- insurance contracts
- employee benefit plans

The interpretation of:
- contracts
- laws
- regulations

The analysis of complex or unusual tax compliance issues.
The majority of the matters listed are seldom referred to in auditing texts, and
most candidates will not have come across them in real-life audit situations.
However, in diverse economies, expert opinions from an array of disciplines are
often required by auditors in particular those involved in the audit of large
companies (for example, banks, insurance companies and mining and
exploration companies).
In this respect, candidates may wish to consider the issues faced by an auditor
when auditing the reported liabilities of a company that has made a provision
for costs arising as a consequence of an environmental disaster for which the
company is culpable. On a more basic level, where companies own expensive
jewellery, works of art or antiques either as trading or as investment assets
auditors may need to rely on the opinion of their own experts if they do not
have other sufficient appropriate evidence to support valuation assertions
made by management.
An auditors expert needs to be competent, capable and objective if their
services are to be deemed adequate for the audit purpose. Lets deal with each
of these attributes.
Competence relates to the nature and level of expertise of the expert.
Clearly, any expert employed should have widespread recognition of
their expertise in the stated discipline.
Capability relates to the experts ability to exercise that competence in
the circumstance of the audit engagement. For example, the expert must
have the time and resources available to perform the task in hand.
Objectivity relates to the possible effects that bias, conflict of interest
or the influence of others may have on the judgment of the expert. If an
expert has a vested interest in expressing anything other than objective
opinion with regard to the subject matter, then their opinion will be of no
value to the auditor.
3
MAY 2011
2011 ACCA
If an auditors expert does not fulfil the requirement in respect of each of the
above attributes, the risk of error or inaccuracy in the work carried out is
increased and, therefore, the objective of minimising the risk of not detecting
material misstatement may not be achieved. Consequently, the auditors
quality control procedures should ensure that internal experts (who are part of
the audit engagement team) are capable, competent and objective. Where an
audit firm is seeking to engage a new internal expert, or alternatively rely on
the services of an external expert, information about the competence,
capability and objectivity of the expert may be sought from various sources.
These include:
personal experience with previous work of the expert
discussion with the expert
discussion with other auditors who are familiar with the experts work
knowledge of the experts qualifications, membership of a professional
body or industry association, licence to practise, or other forms of
external recognition
published papers or books written by the expert.
Candidates should appreciate that these sources of information are the same
as those that an auditor may use to obtain information about the competence,
capability and objectivity of a managements expert.
When evaluating the findings and conclusions of the auditors expert for audit
purposes, the auditor may carry out various procedures, including:
inquiries of the auditors expert
reviewing the auditors experts working papers and reports
corroborative procedures such as:
- observing the auditors experts work
- examining reputable statistical reports and other authoritative
published data
- confirming relevant matters with third parties
- performing detailed analytical procedures, and
- reperforming calculations
discussion with another expert with relevant expertise
discussing the auditors experts report with management.
If the auditor concludes that the work of the auditors expert is not adequate
for the auditors purpose and the auditor cannot resolve the matter by either
agreeing that the expert should carry out further work or by the auditor
carrying out additional audit procedures as appropriate. With the permission of
the expert, it may be appropriate to refer to the auditors expert in the
auditors report. Conversely, unless there is a legal or regulatory requirement,
there should not be any reference to the work of the auditors expert in an
unmodified report.

4
MAY 2011
2011 ACCA
Finally, candidates are often unsure as to whether auditors should employ their
own experts to provide assurance in areas of an entitys financial statements,
where the management of an entity has relied on its own expert. Simply put,
auditors are free to do this. They should do so only after very careful
consideration of the risk of material misstatement in the relevant area of the
financial statements and scrutiny of the status and the work of the
managements expert. Any decision in this regard should be influenced by the
knowledge that, ultimately, the audit opinion is the sole responsibility of the
auditor, and that this responsibility is not reduced by reliance on the work of a
managements expert or an auditors expert.

Brian Pine is examiner for CAT Paper 8 and Foundations in Accountancy
Paper FAU Foundations in Audit

RELEVANT TO ACCA QUALIFICATION PAPERS P1, P3, P4, P5, P6 AND P7
2011 ACCA
Passing the Professional level papers

The purpose of this article is to highlight the key skills required to achieving a
pass in Paper P3, Business Analysis, and identifies the key skills required to
ensure that candidates are well prepared for the exam. Although it specifically
refers to Paper P3, the points made are relevant to most Professional level
papers.
What prompted this article is the disappointment felt by markers who see an
otherwise well-prepared candidate fail the exam. By this, I mean a candidate
who is well prepared in the sense that they have covered the study material,
but do not do themselves justice in the exam. This is usually due either to the
candidate lacking knowledge about how to approach the exam or, more
commonly, a failure to practise the skills required to achieve a comfortable
pass before they actually sit the exam.
The day of the exam is when candidates should be showing the sharpness of
their knowledge, exam technique and presentation skills. However, it is evident
that for many the day of the exam is also the first time that they have put
into effect their exam writing and presentation skills. This is not a good
strategic approach to a Professional level paper, hence the focus of this article.
Broadly speaking, the skills needed by candidates to secure a good grade in a
Professional level are:
technical knowledge a good understanding of the course material and,
more specifically, a good application of that knowledge to case-based
scenarios
exam technique showing their skill in question selection, timing,
scoring marks, and optimising the time available in the exam
presentation skills writing a paper that is legible, well structured,
professionally presented and maximises their chances of scoring marks
efficiently across the whole paper.

Now let us look at each of these elements in turn.
1. Technical knowledge
A Professional level paper requires candidates to have technical knowledge
across a range of topic areas as set out in the relational diagram in the Study
Guide. While technical knowledge is essential, it is insufficient to secure a pass.
What is important is an understanding of the skills the examiner is testing.
What the examiner is interested in is the application of knowledge and, hence,
how candidates use their technical knowledge and models in context so
adding value to the lower level skills of description, definitions and listing of
attributes.
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Papers at the Professional level are at the higher end of learning skills, and
require such skills as analysis, evaluation, assessment, decision making,
critical analysis and discussion. They require application of knowledge rather
than repetition of textbook material.
To put it succinctly, the examiner is more interested in what you can do rather
than how much you know. This is reflected in the fact that the examiner wants
candidates to apply technical knowledge that they have acquired during their
course of study, such as the application of tools and models to business
scenarios. This requires candidates being able to use models, for example in
Paper P3, such as PESTLE, SWOT, Porters Diamond and other models and
frameworks described in the Study Guide.
Furthermore, as many of the Professional level papers contain questions that
are case-based scenarios, textbooks cannot provide all of the answers. Like in
the work environment for which the exam is preparing candidates you have
to work with incomplete information and the information that is available may
be interpreted differently by different individuals depending on their experience
and requirements.
When answering case-based business scenarios candidates need the following
skills:
To identify key issues/defects (almost directly from the case material).
The ability to use analysis to make inferences from case material and to
delve deeper into case study problems.
To identify things noticeable by their absence. That is, things the firm
should be doing but is not doing at present.

It is the ability to add value to the scenario in this way that scores marks in the
exam repetition of case material or long introductions or descriptions score
very little, and is time wasting, but more of that later.
Typically, the Paper P3 exam has the following characteristics:
The examiner examines widely and will cover many sections of the Study
Guide in a single sitting, covering diverse areas with the capability of
integrating several topics.
Candidates are required to act in the role of consultant/adviser and,
hence, the paper is a test of competence.
Data will be presented in tabular format and typically some financial
data is provided. The examiner expects this information to be used,
giving greater insight into the issues described in the case study.
However, many candidates chose to their detriment to ignore this
information or to not explicitly use it in their answers.
The examiner expects candidates to show evidence of breadth and
depth of knowledge across the paper.
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The emphasis is on the higher learning skills of analysis, evaluation, etc.
It is a feature of past exam papers that less than 20% of the marks are
awarded for knowledge purely related to textbook material.

2. Exam technique
Having good exam technique is a vital skill for passing Professional level
papers and, like all other skills, it requires insight and practice. Good exam
technique entails three essential elements. These are as follows, and will be
dealt with in turn:
Things candidates must do/understand before they get to the exam hall.
Things candidates should do when given the paper in the exam hall.
Things candidates should do when starting to write that is,
presentation skills.
Things candidates must do/understand before they get to the exam hall
Before going to the exam, candidates should have covered the course, have
practised past paper questions and honed the skills outlined and discussed
below. In an ideal world, they would have also undertaken some structured
revision. But, as students for professional exams, it is likely they have a busy
life between working, studying and if they are lucky a bit of social life. If you
fall into this category, then you need to read on and before you go to the
exam follow my suggestions. Most of them are very simple but there is a
reason for them all.
Learn to multiply by 1.5 vital to good time management in the exam
So how hard can that be? Why 1.5? Well, that is the number of minutes
you have to get a mark on Paper P3 (180 mins/100 marks = 1.8, but
allowing 30 minutes to read the paper even after planning time leaves
150 mins/100 marks = 1.5 minutes per mark). This is recommended
because it is common for candidates to spend a disproportionate
amount of time on questions with few marks. It is not uncommon to see
three pages written for, say, six marks, and then to see two pages
written for 10 marks (or more). The examiner examines for breadth in the
paper (that is to cover a lot of topics) and for depth (to give greater detail
in certain topic areas). To do this, the examiner balances the marks by
weighting them against the appropriate areas of the syllabus.
For candidates this means that if there are six marks for a part question,
an answer should take nine minutes. A question worth 10 marks should
take 15 minutes to complete, and if the requirement is for 20 marks
then it should take 30 minutes, and so on. It should be evident that the
more marks there are, generally the more points candidates will have to
make and the more time it will take (and, indeed, a little extra planning
will also be needed but more on that later).

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Understand what you have to do to get just one mark
Students often ask how many points you need to make in the exam and
how much you need to write to score a mark.
A Section B part question may be worth 12 marks. In general, the
examiner allocates one mark for each appropriate point made in the
answer. The only general exception to this is for professional marks.
However, if you follow the advice of this article concerning presentation,
you should gain most of the available professional marks.
If you have 1.5 minutes to gain a mark then you should if all goes to
plan gain two marks every three minutes in the exam; that is 40 marks
per hour. As you will be writing for two and a half hours, you will score
100% if you keep this up.
So what do you have to do to get one mark? It is fairly simple. You have
to write two or three good sentences about the topic under consideration
more about this in presentation. If you practise writing to get one
mark, you could score 13 marks every 20 minutes in the exam. Even if
you only gained six marks every 20 minutes, you will still score 51% and
pass.
Say a little about a lot of things
You have to get into the habit of saying a little about a lot of things
(breadth), rather than saying a lot about a single point (depth). This is a
balancing act to some degree, but as a general rule if you identify a
point that is relevant and can state it in a clear heading or sentence, you
will gain one mark. If you elaborate and state why it is of importance and
explain, illustrated with relevance to the scenario, how it will solve a
problem (depth) in two more good sentences, you will gain two more
marks. And all this in 4.5 minutes but it can be done with a little
practice.
Realise that it is highly unlikely that you will bluff or waffle your way through
this exam
The markers for this exam are mostly lecturers in the subject matter,
with many years experience of teaching. Many of us are qualified
accountants too, so we know what it is like to undertake professional
exams. As professional educators, we take our subject seriously, are
committed to getting our students prepared for the exams, and are able
to spot bluffing and poor work from page one of your answer booklets.
Lacking adequate preparation is a recipe for failure. However, it is worth
noting that adequate preparation may not mean that you must have
covered 100% of the course to 100% proficiency. Indeed, it may be
better to have covered 60% of the course to 100% proficiency and know
something about the remaining 40%.

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Things candidates should do when given the paper in the exam hall
Doing an exam is essentially a strategic exercise. It concerns deciding how to
get organised, which questions to answer, in what order and, most importantly,
how to score the most marks out of the questions to ensure that candidates
reach the magic 50%. So how should you approach a Professional level paper
in the exam hall? I would make the following suggestions on how to proceed
once you have opened the exam paper.
Plan your time from the instant you receive the paper
How candidates approach time planning for the paper is crucial for
completing the exam and to ensure best use of the time available.
On opening the paper look at the rubric for every question and multiply
them all by 1.5, writing it in brackets to the right of the marks for a
question component this indicates the time you should be allowing for
each and every part of every question.
This will take you less than one minute and you will then know where the
examiner requires breadth and depth. It will indicate how many points
you have to make in each section of the paper and it will give you your
timing for each section. For example, if a part of a question is for 10
marks it should be capable of being completed in 15 minutes. When you
start this part of the question note the time, and after 15 minutes move
on to the next section whether you have finished or not. By doing this you
will have most likely scored the easy marks in the question and this will
also ensure that you finish the entire paper failure to complete all of
the questions is a common cause of failure.

Planning your answers
On receiving the paper in the exam hall, the 15 minutes before you start
writing is vital to exam success. Ask students what these 15 minutes are
for and invariably they say it is reading time. But it is not it is reading
and planning time and it is this second element that is critical planning.

Planning involves selecting the questions you intend to attempt.
Question 1 is compulsory, so your only choice is where to focus your
effort. Should you attempt Section A Question 1 first, or do the shorter
questions in Section B? This is a matter of personal preference. However,
I would always recommend attempting Section B questions first. My
reason for this is that the questions are shorter and more focused. There
is less to read in the narrative and they are rich in information, which will
help you with your answers. While Section A Question 1 is also
information rich, there is so much more to read to extract the required
information. If you do start on Question 1 and get bogged down it can
take up a disproportionate amount of time and, thus, affect your timing
for the whole exam. So, although it remains a matter of personal
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preference, it is my suggestion that you focus on Section B in the early
stages. I recommend the following:
Read the rubrics of Section B Questions 2, 3 and 4 very quickly and
decide which questions to attempt. This will allow you to eliminate the
question in this section that you will not attempt because it concerns a
topic area you arent keen on, have not practised, or requires a model
you do not know. You can now concentrate on the remaining two
questions.
Now select one of the Section B questions and plan an answer for this
on your exam paper. There is usually sufficient room at the end of each
question. This will involve reading the rubric carefully and identifying
exactly what the examiner wants you as a candidate to do. Great care
should be taken doing this as this is where many candidates stumble
often, they do not answer the question the examiner has asked, but the
one they thought the examiner has asked or worse still they answer
the one they wished that they had been asked. I have encountered many
disappointed students who have made this mistake. Having ensured that
you have read the rubric carefully, do the following:

i. Read the question scenario quickly to get a feel for it. Then
read it again this time more carefully to extract information
relevant to the rubric. The information given in the scenario is
key to successfully answering the question.
ii. Having read the question carefully, write down notes that will
assist in answering the first part of the question beside the
exam question there is usually plenty of space and a blank
page on the paper for this purpose. Having done this, do the
same for the other parts of the question.
iii. What you should have now is a rough plan of the answer. The
points are not in any order of priority but that is easily taken
care of when you start to write. However, you will have covered
the breadth required in the exam a good first step and you
can incorporate the depth when you write the answer.

It is also worth mentioning that it is not worth rewriting your plan once you
start the exam. This just wastes time and, as we now know, time equals marks.
Conversely, lack of time means lack of marks and the only occasion in which a
plan should be included in your answer is if you have managed your time
badly, which should not happen if you follow the advice given in this article.
While on this subject, if you manage your time badly the penalty can be quite
severe. Markers often observe candidates who have reached 46%, only to find
that the next page is blank and there is nothing left to mark. This is generally
the reason for marginal fails. If you manage your time badly your chances of
passing reduce dramatically how much tougher is it going to be to get 50
marks if you only answer 90, 80, 75 or 70 marks of the paper?
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Once you have made notes for the first question you intend to answer in
Section B, make notes for the other Section B question that you intend to
attempt in the 15 minutes reading time you will have two answer plans
completed. You might also have sufficient time to read the rubric to Section A
Question 1 and this would be a real bonus. You are ready, with two questions
fully planned when the invigilator gives you permission to start writing.
Once you are ready to write, I would suggest that you answer the Section B
question that is easiest for you because:
it will settle you into the exam and help you score marks early in a
question in which you have less content to read and for which you
already have a clear plan
you already have the plan and the key points stated. There will be a need
to prioritise points, but what you are going to write about is already
clearly identified
it facilitates sticking to the timing for the question and, if managed well,
will ensure you have adequate time to attempt Section A Question 1 with
good marks already under your belt. For example, were you to score say
32 out of a total 50 in Section B in 90 minutes, you would be an
unfortunate candidate indeed not to then gain 18 marks out of Question
1 to secure a solid pass.

Should you choose to do Section A Question 1 first you must strive to complete
it in one hour and 30 minutes. It is unlikely that you will be able to read the
whole paper and plan all the answers in the 15 minutes reading/planning time
available. However, you must use this time effectively, with at least 50% of the
paper thoroughly read and planned so that when the invigilator gives you
permission to start you are ready to score a mark for every 1.5 minutes you
are writing.
Things candidates should do when starting to write that is, presentation
skills
Presentation skills are a subset of good exam technique on which many
articles have been written. I will treat this as a separate topic, focusing on what
to do when you start to write, whereas the focus of good exam technique is
about what to do before you write.
As stated earlier, Paper P3 is a test of your knowledge of business analysis,
but it is also a test of candidates professional competence. When passing final
exams, many candidates will be reporting to senior managers and board level
indeed, some may be managers already and future board members. Good
presentation skills are a vital exam skill. Ironically, it may be something that
we, as markers, pay little attention to when it is present, but how it manifests
itself when it is absent may be the difference between passing and failing. That
is not to say that if you have good presentation techniques you will always pass
far from it. However, if your script is well presented, many benefits accrue in
a subtle way to both you (writing the exam) and to the marker marking it.
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Scripts are generally presented in three overall formats with a blend of content
and presentation. These are:
they have good content and are well presented these are easy to read
and mark
they have good content and are poorly presented (sometimes
frustratingly poorly presented) these are difficult to read and to mark
they have very good presentation but poor content.

Now which of the above would you say scores the passes? Which of the above
gets the marker on your side? Which of the above is likely to facilitate picking
up marks, achieving breadth and depth, facilitating good time management?
Which of the above will clearly indicate where one point starts and finishes?
Would you agree that the answers to all of the above questions are self-evident?
If so, why not strive to produce a paper with all the positive characteristics
required?
Good presentation involves many facets on which most people will agree.
These characteristics include legibility, use of appropriate language and clearly
signposted sections of answers both within a question and across the whole
paper. This is something that I have struggled with in writing this article
having plenty of time to write it but candidates have to achieve this almost
without thinking in a time-pressured exam. Indeed, to achieve good
presentation so that it comes naturally in the exam requires much practice, but
it is time well spent not just for the Paper P3 exam, but for all Professional
level exams and, indeed, for your entire professional career as an accountant.
As a marker, what you notice about presentation is as I have said before
nothing much when it is present, although it makes a paper much better in
every way and easier to allocate marks to. Hence, what I have chosen to do
below is not to point out what candidates should do, but to identify what they
do not do. My intention is to highlight the common defects that need to be
addressed.
Common defects in candidates presentation techniques
The key defects are as follows:
a) Defect 1 writing is virtually illegible.
Solution Make the writing legible. If we cannot read it, we cannot mark
it. Though we will strive to give you the benefit of doubt, it is very
difficult to mark what we find difficult to read. While it may be hard to
change years of bad habits, it is worth the effort. It may be better to
write less neatly, rather than write two booklets that are largely illegible.
b) Defect 2 A lack of professional style; failure to use proper layout,
headings, etc.
Solution Do the following for each question and part question:
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If asked, answer using an appropriate format and style for
example, in report format.
Write a very brief introduction to set the context for your answer
(no more than two sentences). This could be to state what you
have been asked to do, to explain a theory or model, to state what
the person in the scenario needs to do, or to highlight what exactly
you are doing in your answer for example, giving advantages and
disadvantages. Good professional style should be evident from the
opening paragraph of your exam script through to the very last
page. Good signposting for the marker may involve skills as simple
as:
i. entering the question number at the top of each page
ii. numbering answers and part answers appropriately
iii. indenting text to make points stand out from the narrative
iv. leaving space between points to clearly show where one has
finished and another begins
v. appropriate use of bullet points
vi. appropriate salutation and conclusions using appropriate
professional language.

c) Defect 3 Lack of priority in the answer; answers should address
strategic, functional and operational issues preferably in that order.
Solution Your answer plan will have identified key areas that you wish to
address in your answer. It is a valuable skill to be able to prioritise the
problems/issues within the scenario and to show the marker that you
are able to think strategically. Though it is not imperative that
candidates are able to do this, it will help you focus on key strategic
issues in the scenario and, by so doing, you are likely to score higher
marks. Consequently, prioritisation although not essential illustrates
to the marker your high level of preparation and competence.
d) Defect 4 Not making enough points to ensure you score sufficient
marks on each part of each question.
Solution Though some would argue making insufficient points is not a
presentation issue but a planning one, the fact is they are interrelated. If
you plan properly your chances of presenting the answer properly
improve. The golden rule of making enough points on a one-point one-
mark basis is that even if you do not write enough to make 12 points for
the 12 marks on offer, you are likely to make enough points to
comfortably pass.
e) Defect 5 Failure to lay out answers to allow candidates to give
breadth and depth and to answer in a professional style.
Solution A common mistake is that candidates will merely write a single
line of text or one very short sentence by way of making a point. As a
general rule this is insufficient as it is likely to lack depth and will only
score half marks at most, rather than the one mark on offer. This is very
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problematic when it is repeated throughout the whole question or, worse
still, throughout the entire paper. When it is repeated throughout the
whole paper, and the paper is a marginal fail, then the lack of breadth
and depth gives the marker and examiner no option but to leave the
paper as a marginal fail. When the same problem is evident within a
question usually the final question attempted it usually shows
evidence of bad time management.
A common mistake is that candidates will write a lot about a single point
on which they are very knowledgeable sometimes as many as 15 or
more lines of text with the following point being a single short
sentence. The balance of time and content should be about the same for
each point made. Once the marker is satisfied that you have made the
point, you will score the mark all writing thereafter is superfluous, as
the marks have been allocated. Writing more wastes your time and, as
stated earlier, time equals marks. This is true for marks gained and lost
how many times have you heard candidates say if only I had 10 more
minutes I would have achieved a pass?
f) Defect 6 Lack of balance between sections of questions.
Solution This problem is similar to Defect 5 and has equally devastating
consequences. This becomes evident to the marker when the candidate
appears to be relatively good but, due to excessive detail in a previous
question, the answer to the final question lacks depth and is worth very
few marks. Once again, this is down to time management and generally
taking too much time on questions that you can do well and are
comfortable with. It is better to start the next question on time (as per
your plan) and pick up easy early marks in this question.
The end result of this problem is the same as before the marker has
insufficient material to award you sufficient marks for a pass grade. This
is equivalent to the equally detrimental sin of not getting the paper
finished that is, trying to score 50 out of 90, 85 or 80, etc. The only
solution is to know when to quit in a question or section of a question
and move on to ensure evenness of answers throughout the whole paper.
Candidates should strive to achieve a good balance within a question
and within each section of a question.
g) Defect 7 Lack of effective language necessary to illustrate higher-
level application skills.
Solution Candidates must learn the difference between the lower-level
skill of making a statement and the higher-level skill of driving home the
point. Frequently candidates will calculate a ratio say GP% over two
time periods and show the results in a tabular format. They then fail to
give any insight into the significance of what they have calculated.
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Making the point (identifying the problem) will normally score one mark
as discussed earlier in this article. However, it is stating why it is a
problem and what needs to be done about it that scores the extra marks.
Driving home these points can be easily done with simple phrases such
as:
this indicates
the impact of this is
to address this problem management need to

This is a problem because it allows easy marks to slip away. It fails to
demonstrate the skills expected of a competent professional accountant.
Correcting these defects will score you more marks. However, to correct these
it is necessary for you to practise using past papers. If your tuition provider
offers a correction service (most do), or you have an approachable lecturer
(most are), it is worth having your practice answers corrected and getting
feedback on how you could improve. How can you correct defects in your style
if you assess your own skill? The answer is you cannot. So get some assistance
from your tutors the professionals.
Conclusion
Paper P3 is a challenging paper requiring practise of the application of
technical knowledge to diverse case scenario material, similar to the situation
experienced by practicing managers. It is a test of professional competence
that requires candidates to demonstrate not only technical skill but also
professional presentation in an exam environment where time management is
a crucial success factor.
Master the skills of application, presentation and time management and you
will be successful in passing a Professional level paper.
William Meaney is part of the Paper P3 marking team

RELEVANT TO ACCA QUALIFICATION PAPER P6 (MYS)
2011 ACCA
The export incentives regime in Malaysia

The Malaysian economy has long depended on exporting agricultural produce and
manufactured goods. With the maturation of the manufacturing sector, the export
sector has since expanded to include export of services.

Successive gazette orders have thus been introduced to reflect the policy of the day.
This article serves to collate and rationalise the various incentive measures. It aims to
provide a cogent and holistic view of the prevailing export incentives regime in
Malaysia.

Readers are encouraged to peruse the actual gazette orders for a proper
understanding and analysis. For this reason, the gazette order references are
provided.

Exports incentives are streamed as follows:

A. Export of manufactured goods and agricultural produce

1. Exemption of income for increased exports
(a). Malaysian International Trading Company
(b). Allowance for Increased Exports
(c). Exemption of income for significant increase in export, penetration of
new markets, and for Export Excellence Award
(d). Exemption of income for increase in export of manufactured motor
vehicles, automobile components or parts
2. Double deduction for promotion of exports.

B. Export of services

1. Exemption of income for increased exports of:
(a). 16 qualifying services
(b). Healthcare services provided in Malaysia to foreign clients
2. Double deduction for qualifying expenses in promoting export of:
(a). All services
(b). Professional services
(c). Higher education
3. Single deduction for hotel accommodation
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A. EXPORT OF MANUFACTURED GOODS AND AGRICULTURAL PRODUCE
At a glance, the incentives available for manufactured goods and agricultural produce
are as follows:
Person eligible Incentive Other details
Company incorporated in
Malaysia, at least 60%
Malaysian-owned approved
as Malaysian international
trading company (MITC)
Tax exemption of 20% of
value of increased exports by
an MITC

A resident company
engaged in manufacturing
or agriculture, is eligible for
allowance for increased
exports (AIE)
Tax exemption of 10% and
15% of the value of increased
exports of manufactured
goods depending on value
added; 10% for agricultural
produce
Local company, resident in
Malaysia, carrying on
activities in manufacturing
and agriculture obtaining:
i. significant increase in
exports
ii. penetration of new
markets, and
iii. export excellence award
Tax exemption of 30%, 50%
and 100% of value of
increased exports of
manufactured goods and
agricultural produce

Company incorporated and
resident in Malaysia,
carrying on manufacturing
of motor vehicles, auto
components and parts
Tax exemption of 30% and
50% of value of increased
exports depending on value
added

Amount
absorbed
against 70% of
statutory
income
Unutilised
amount may be
carried forward
Exempt account
and two-tier
exemption
Resident company is given
double deduction in respect
of approved outgoings and
expenses under the
Promotion of Investments
Act 1986, Schedule,
Income Tax (Promotion of
Exports) Rules 1986
Double deduction for
qualifying expenses for the
export of goods or
agricultural produce
manufactured, produced,
assembled, processed,
packed, graded or sorted in
Malaysia
A pioneer company
is eligible, but the
accumulated
deduction will be
allowed
immediately after
the tax relief period

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The measures are discussed in more detail below.
1. Exemption of income from increased exports
(a). MALAYSIAN INTERNATIONAL TRADING COMPANY
PU (A) 60 Income Tax (Exemption)(No.12) Order 2002 as amended by the Income
Tax (Exemption) (Amendment) Order 2003.
Objective
This incentive aims to encourage the development and growth of large Malaysian
trading companies to support the Malaysian export trade.
Malaysian International Trading Company
A company approved as a Malaysian International Trading Company (MITC) is
eligible for the tax incentive.
To qualify, the company must produce a letter from the Malaysian External Trade
Development Corporation (MATRADE) certifying the following:
The company is incorporated in Malaysia and at least 60% of the issued
share capital of the company is Malaysian-owned
The company has achieved annual sales of more than RM10m
Not more than 20% of its annual sales is derived from the trading of
commodities
The company uses local services for purposes of banking, finance and
insurance and uses local ports and airports.

Tax incentive: exemption
An MITC is eligible for a tax exemption of 20% of the value of increased exports
restricted to a maximum of 70% of statutory income for that year of assessment.
For the purpose of this incentive, export sales means sales derived from the export of
local and imported goods and commodities, but does not include trading
commissions and profits derived from trading at a commodity exchange and sales to
Free Industrial Zones and Licensed Manufacturing Warehouses.
Value of increased exports means the difference of free on board
1
value of goods and
commodities exported in a basis period and that of the immediately preceding basis
period.
Incentive period
An MITC is eligible for the tax exemption for five consecutive years, beginning from the
year of assessment in which the MITC first qualified for the exemption.
Carry forward
If any amount determined to be exempted is not absorbed because of the restriction
to 70% of statutory income or absence of statutory income, such amount may be
carried forward to be given to the MITC in the first subsequent year of assessment in
which there is statutory income from the business.
Two-tier exempt account and exempt dividend
Any amount exempted under this incentive may be credited to an exempt account
from which exempt dividend may be distributed. A corporate shareholder may credit
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the exempt dividend thus received into a second tier exempt account and on-
distributes the exempt dividend to its shareholder/s.
Comments
This incentive encourages companies presently engaged in trading of commodities to
diversify into international trading of goods as they would likely have the requisite
volume of exports to start with. However, such companies must be mindful that it
must keep the export of commodities to a maximum of 20% of total annual sales
revenue.
Note that there is no exclusion of specific agricultural produce for the MITC incentive.
The RM10m annual turnover threshold renders the MITC status within reach of many
companies.
A trading company set up within the group to export the goods manufactured by
related manufacturing companies is eligible for MITC status.
There is no mutual exclusion to other incentives.
Worked example
Facts
Bolih Sdn Bhd is owned as follows:
Bolih Holding Bhd: 65%
Foreign Pte Ltd: 35%

Comparative details of its income are as follows:

Year ended
31 March 2010
RM000
Year ended
31 March 2011
RM000
Domestic sales revenue 2,000 2,500
Export sales revenue
To ASEAN countries
To Europe
To China
To Free Industrial Zones and
Licenced Manufacturing Warehouses

3,600
2,400
nil

1,000

3,200
3,000
800

2,000
Total sales revenue 9,000 11,500
Trading commissions and gains from
Commodity Exchange 500 300
Statutory income from business 200 250
Statutory income from interest 12 10
Approved donations 5 5

Notes:
1. About 10% of export sales relate to sale of natural rubber and crude palm oil.
2. Sales revenue is stated at free on board value.
3. All exports are shipped through Port Klang and Johor Port.
4. Bolih Sdn Bhd transacts all trade through Malayan Banking Bhd and insures with
Malaysian insurance companies.

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Answer
Eligibility
In the year of assessment 2010, Bolih Sdn Bhd does not qualify as an MITC as its
annual sales revenue fell short of RM10m.
In the year of assessment 2011, Bolih Sdn Bhd qualifies as an MITC as it fulfils all
four of the conditions:
It is incorporated in Malaysia and more than 60% Malaysian-owned
For the year of assessment 2011, it has achieved annual sales of RM11.5m
(therefore more than RM10m)
Only 10% (ie not more than 20%) of its annual sales is derived from the trading
of commodities (natural rubber and crude palm oil), and
Malaysian ports, Malaysian bank and insurance companies are used in its
business.

Upon obtaining a letter from the Malaysian External Trade Development Corporation
confirming the above, Bolih Sdn Bhd is eligible for the MITC incentive in the year of
assessment 2011 as it recorded an increase in the export sales over its export sales in
the immediately preceding basis period for the year of assessment 2010.
Bolih Sdn Bhd will potentially qualify for the MITC incentive for five consecutive years
of assessment ie year of assessment 2011 until year of assessment 2015, provided
that it registers increase in export sales in each year of assessment over its
immediately preceding year of assessment.

Computation

RM000 RM000
Year of assessment
Statutory income 250
FOB value of exports in 2011: 3,200 + 3,000 + 800 7,000
FOB value of exports in 2010: 3,600 + 2,400 (6,000)
Value of increased exports 1,000
20% thereof 200
Restricted to 70% of statutory income (175)
Amount carried forward 25
MITC income exempted (175)
Statutory income (after MITC exemption) from
business
75
Statutory income from interest 10
Aggregate income 85
Approved donation (lower of 10% of aggregate
income or donation amount)
(5)
Total income 80

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(b). ALLOWANCE FOR INCREASED EXPORTS (AIE)
PU (A) 128 Income Tax (Allowance for Increased Exports) Rules 1999 as amended
by PU(A) 309 Income Tax (Allowance for Increased Exports) (Amendments) Rules
2003.
Objective
The above incentive was introduced to encourage an increase in exports. Resident
companies engaged in manufacturing or agriculture, exporting manufactured products
or agricultural produce
2
are eligible for this incentive.
Note that only the manufacturer that exports manufactured products qualifies for the
incentive.
Tax incentive
This incentive is given at the following rates:
(i) Exemption of statutory income equivalent to 10% of the value of increased
exports is given to manufacturers provided that the goods exported attain at
least 30% of value added.
(ii) Exemption of statutory income equivalent to 15% of the value of increased
exports is given to manufacturers provided that the goods exported attains at
least 50% of value added.
(iii) Exemption of statutory income equivalent to 10% of the value of increased
exports of agricultural produce by the company that exports agricultural
produce.
The above exemption of statutory income is restricted to a maximum of 70% of the
statutory income and subject to the respective rates given under (i), (ii) and (iii).
Any unutilised allowance may be carried forward.
The amount utilised is credited to a tax exempt account from which tax-free dividends
can be declared. For corporate shareholders, there is a second tier exempt account
from which exempt dividend may be distributed.
Mutually exclusive to other incentives
This incentive is mutually exclusive to other incentives (except for deduction for
promotion of exports):
in the Promotion of Investment Act 1986, and
under Schedule 7A ie reinvestment allowance.

Exclusion
The allowance does not apply to exports of certain products such as:
tin ingots or slabs, tin ore and concentrate
natural rubber sheet and slabs, Standard Malaysian Rubber, crepe natural
rubber, natural rubber latex and natural gums
crude palm kernel oil, palm kernel cakes and crude palm oil
copra, copra cakes and crude coconut oil
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logs, sawn timber (ungraded and non-kiln dry) and wood chips (except
briquettes)
petroleum oils (crude and other than crude) and petroleum gases, and other
gaseous hydrocarbons (liquefied or in gaseous state) hydrogen, nitrogen and
oxygen.

Incentive period
There is no finite period for AIE: a company may qualify for the incentive as long as
the requisite conditions are fulfilled.
Worked example
Facts
Kayu Sdn Bhd is a wood-based company resident in Malaysia. It produces plywood
slabs (an agricultural produce), manufactures chairs and high-grade paper for security
printing. It has been agreed with the tax authorities that sales revenue from all three
products constitute a single business source.
Kayu Sdn Bhd has been granted with pioneer status for the manufacturing of security
paper but the tax relief period had ended in YA20x0.
Relevant details are as follows:

YA20x1
RM000
YA20x2
RM000
YA20x3
RM000
Domestic sales revenue 1,000 1,500 1,200
Export sales revenue:
Chairs (35% of value added)
Security paper (60% of value added)
Plywood slabs

550
800
2,000

1,000
2,000
3,500

800
2,500
4,200
Sales to Free Industrial Zones and
Licenced Manufacturing Warehouse
600 900 800
Statutory income from the business 700 300 400

Answer
Eligibility
Kayu Sdn Bhd is eligible for the AIE in YA20x2 and YA20x3 because:
it is resident in Malaysia
it is directly involved in manufacturing chairs and security paper and producing
plywood (an agricultural produce)
for YA20x2 and YA20x3, it does not enjoy any tax incentive: its pioneer status
had ended two years earlier
it has recorded increase in exports of manufactured goods and agricultural
produce.

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The rate of AIE is:
10% for chairs as the value added is more than 30%
15% for security paper as the value added is more than 50%
10% for plywood being an agricultural produce.

Computation

YA20x2
RM000
YA20x3
RM000
Statutory income 300 400
Increase in exports
Chairs 450 x 10% 45 No increase
Security paper 1,200 x 15% 180 500 x 15% 75
Plywood 1,500 x 10% 150 700 x 10% 70
AIE b/f 165
AIE 375 AIE 310
Restricted to 70%
of SI
(210) (210) Restricted 70% (280) (280)
Unabsorbed c/f 165 Unabsorbed c/f 30
Statutory income
after AIE
90 Statutory income
after AIE
120

(c). EXEMPTION OF INCOME FOR SIGNIFICANT INCREASE IN EXPORTS,
PENETRATION OF NEW MARKETS AND EXPORT EXCELLENCE AWARD
PU (A) 158 Income Tax (Exemption) (No. 17) Order 2005.
Objective
To encourage Malaysian companies to further strive for not just increase but
significant increase in the export of manufacture of high-quality goods so as to be able
to penetrate new markets, locally owned resident manufacturing or agricultural
companies (ie incorporated in Malaysia and at least 60% Malaysian-owned) are
eligible for the special enhanced incentives for allowance for increased export.
Export sales
Export sales means direct export sales of manufactured products or agricultural
produce from Malaysia, but excludes sales to Free industrial Zones, Free Commercial
Zones, Licensed Manufacturing Warehouse, Labuan, Langkawi and Tioman Free
Zones.
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The incentive

(a) Achieve significant increase in exports ie where the
value of increased exports of the company in the basis
period for a year of assessment is at least 50%

Exemption of 30% of
value of increased
exports

(b) Succeeds in penetrating new markets. The list of export
markets is determined by the MATRADE. Countries not
considered as new market are as follows:
US
Canada
European Union countries
Hong Kong
Japan
Taiwan
Korea
Singapore
Australia
New Zealand

Exemption of 50% of
the value of increased
exports

(c) Achieves the highest increase in exports. Such
companies are given Export Excellence Award by the
Ministry of International Trade and Industry

Exemption of 100% of
the value of increased
exports

Important note
If a company is granted the incentive under (a) and (b), it
cannot avail itself of the incentive under (c) for the same
basis period

Restriction to 70% of statutory income and carry forward
The amount determined above is absorbed against 70% of statutory income. Any
amount unabsorbed may be carried forward to be set-off against the SI in future.
Exempt account and two-tier exemption
The amount absorbed is credited into an exempt account, from which exempt
dividend may be distributed. The corporate shareholder may credit such exempt
dividend received into a second-tier exempt account and distribute a second round of
exempt dividend.

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Separate records
The company that claims this incentive must maintain separate records for export
sales that qualify for exemption on the value of increased exports.
Exclusions
This incentive is not available to a company in the basis period that has been granted:
incentives under the Promotion of Investments Act
reinvestment allowance under Schedule 7A
allowance for increased exports
deduction under rules for deduction for cost on acquisition of a foreign-owned
company.

This incentive does not apply to exports of certain products such as:
tin ingots or slabs, tin ore and concentrate
natural rubber sheet and slabs, Standard Malaysian Rubber, crepe natural
rubber, natural rubber latex and natural gums
crude palm kernel oil, palm kernel cakes and crude palm oil
copra, copra cakes and crude coconut oil
logs, sawn timber (ungraded and non-kiln dry) and wood chips (except
briquettes)
petroleum oils (crude and other than crude) and petroleum gases and other
gaseous hydrocarbons (liquefied or in gaseous state) hydrogen, nitrogen and
oxygen.

(d). EXEMPTION OF INCOME FOR INCREASED EXPORTS IN MANUFACTURED
MOTOR VEHICLES, AUTOMOBILE COMPONENTS AND PARTS
PU (A) 44 of 2011 Income Tax (Exemption) Order 2011

This order was introduced on 2 February 2011 to encourage an increase in the direct
export of motor vehicles, automobile components and parts manufactured in
Malaysia.

The mechanism and provisions of the order are similarly worded as in item (c) above.
Candidates are encouraged to peruse this new gazette order for the details.

2. Double deduction for the promotion of exports
Section 41 and Schedule to the Promotion of Investments Act 1986.
PU (A) 14 Income Tax (Deduction for promotion of exports) Rules 2007.
Eligibility
Every company resident in Malaysia, including a pioneer company, is eligible for this
incentive. However, no deduction will be made during the tax relief period (TRP). The
deductions instead will be accumulated and allowed against the income of the post-
pioneer business immediately after the end of the TRP.
Qualifying expenses
A double deduction is given to eligible companies in respect of approved outgoings
and expenses that are incurred:
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primarily and principally for the purpose of seeking opportunities, or
in creating or increasing a demand for the export of goods or agricultural
produce, manufactured, produced, assembled, processed, packed, graded or
sorted in Malaysia.

The Income Tax (Promotion of Exports) Rules 1986 prescribes deductions in respect
of outgoings and expenses incurred for the promotion of exports. Only expenses that
are of a revenue nature and allowable under Section 33 of the ITA in computing the
adjusted income of the company will qualify for deductions.
The approved outgoings and expenses that qualify for these deductions are provided
in Paragraph 4(2) of the rules:
Publicity and advertisement in any media overseas.
Supply of samples to potential clients abroad, including sample delivery cost.
Preparation of tenders for the supply of goods or agricultural products for
potential clients overseas.
Fares with respect to travel overseas by company representatives for the
purpose of negotiations or signing of contracts, or for the purpose of
participating in trade or industrial exhibitions, additional deduction is limited to
RM300 per day for accommodation and RM150 per day for sustenance.
Supply of technical information to potential clients abroad related to the goods
or agricultural products that are offered for sale, not including expenses
relating to the supply of technical information after purchase.
Participation in trade or industrial exhibitions overseas approved by minister.
Cost of maintaining sales office overseas for the promotion of exports from
Malaysia.
Professional service fees for packaging design subject to conditions that the
product is of export quality and the company uses local professional services.

Double deduction incentive for the promotion of exports of goods and agricultural
produce is extended to the following expenses:
Participation in virtual trade shows.
Participation in trade portals for the promotion of local products.
Cost of maintaining warehouses overseas.
Cost of registering patent, trademark and product licensing.

B. EXPORT OF SERVICES
1. Exemption of income for increase in exports of services:
(a) 16 qualifying services
(b) Healthcare service provided in Malaysia to foreign clients

2. Double deduction for qualifying expenses in promoting export in services:
(a) General incentive
(b) Professional services
(c) Higher education

3. Single deduction for hotel accommodation
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Below is a closer look at the measures:
1 (a). Exemption of Income in Respect of Value of Increased Exports (Services)
PU (A) 57 Income Tax (Exemption) (No.9) Order 2002 as amended by PU (A) 275
Income Tax (Exemption) (Amendment) Order 2006.
The exemption incentive is available for persons
3
that export services. The qualifying
services are as follows:
1. Legal
2. Accounting
3. Architecture
4. Marketing
5. Business consultancy
6. Office services
7. Construction management
8. Building management
9. Plantation management
10. Private healthcare
11. Private education
12. Publishing services
13. Information technology and communication (ICT) services
14. Engineering services
15. Printing services
16. Local franchise services

Companies that export the above services to foreign clients are exempted from the
payment of income tax in respect of income equal to 50% of the value of increased
exports, but not exceeding 70% of the statutory income.
Value of increased exports means the difference of the value of the qualifying
services exported in the basis period and that of the immediately preceding basis
period.
Foreign client means a company, a partnership, an organisation or a cooperative
society that is incorporated or registered outside Malaysia, or an individual who is a
non-Malaysian citizen and does not hold a Malaysian work permit, or an individual
who is a non-resident Malaysian citizen living abroad.
The services must be provided from Malaysia. However, in relation to the provisions of
private healthcare and private education, the services can be provided either in
Malaysia, or provided from Malaysia eg foreign students studying in Malaysia.
Non-application
This incentive does not apply to a person who has been granted:
incentives (other than promotion of exports) under the Promotion of
Investments Act
investment allowance under Schedule 7B
exemption under Section 127 for an approved service project.

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1 (b). Exemption of income for a person resident in Malaysia from a healthcare
services business provided in Malaysia to foreign clients.
PU (A) 412 Income Tax (Exemption)(No.6) Order 2009.
Objective
This incentive is aimed at promoting healthcare services and health tourism by
providing enhanced exemption during the period of YA2010 YA2014. If a person
does not qualify for the enhanced incentive, but still qualifies under the general
incentive in item 1(a) above, the general incentive of 50% applies.
Incentive
Tax exemption is given to a person resident in Malaysia for healthcare services
provided in Malaysia to foreign clients, as defined.
100% of the value of increased exports is set off against a maximum of 70% of the
statutory income. In determining the statutory income, capital allowances are
compulsorily granted, whether or not a claim had been made.
A foreign client is:
a company, a partnership, an organisation or a cooperative society that is
incorporated or registered outside Malaysia, or
a non-Malaysian citizen individual.

A non-Malaysian citizen individual does not include:
a non-citizen participating in the Malaysia My Second Home (MM2H)
programme, and his dependants
a non-citizen holding a Malaysian student pass, and his dependants
a non-citizen holding a Malaysian work permit, and his dependants
a citizen who is a non-resident living abroad, and his dependants.

Set-off, exempt account and carry forward
Any amount absorbed may be credited to an exempt account from which an exempt
dividend may be distributed. A two-tier exemption applies to the corporate
shareholder.
Any amount unabsorbed may be carried forward to be similarly set-off against
statutory income in future.
Separate account
Separate accounts must be maintained in respect of healthcare services provided to
qualifying foreign clients.
Non-application
This enhanced incentive does not apply to a person who has been granted:
incentives (other than promotion of exports) under the Promotion of
Investments Act
investment allowance under Schedule 7B
exemption under Section 127 for an approved service project, or
exemption under the general incentive under PU (A) 57 [see item 1(a) above].
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Comments
Therefore during YA2010 2014, the incentive for increase export of healthcare
services is:
0% Citizen residents; non-citizens with Malaysian work permits.
50% Non-citizens under MM2H programme and dependants;
Non-citizens with student pass and dependants
Citizens living abroad & dependants.
100% Other non-citizens not cited above.

2. Double deductions for qualifying expenses
Up to and including YA 1995, the double deduction incentive on expenses incurred for
the promotion of exports was available to manufacturing companies, hotels and tour
operators. Since 1996, the double deduction incentive has been extended first to the
entire services sector, then to specific services follows:
(a). Deduction for Promotion of Export of Services generally
(b). Deduction for Promotion of Export of Professional Services
(c). Deduction for Promotion of Export of Education Services

(a). Export of services generally
PU (A) 193 Income Tax (Deductions for Promotion of Export of Services) Rules
1999.
PU (A) 114 Income Tax (Deduction for Promotion of Export of Services) Rules 2002.
PU (A) 262 Income Tax (Deductions for Promotion of Export of Services)
(Amendment) Rules 2003.

Eligibility
Every company resident in Malaysia is eligible for the incentive of double deduction
under these rules.
The expenses eligible for double deduction are as follows:
i. Market research.
ii. The cost of tender preparations.
iii. Preparing technical information.
iv. Fares in respect of travel to a country outside Malaysia by a representative of the
company for the promotion of export of services and actual expenses subject to a
maximum of RM300 per day for accommodation, and a maximum of RM150 per
day for sustenance.
v. Maintaining sales office overseas for the purpose of promoting the export of
services.
vi. Publicity and advertisement in any media outside Malaysia for the promotion of
the export of services.
vii. Feasibility studies for overseas projects identified for the purpose of tender.
viii. Participation in a trade or industrial exhibitions in Malaysia or overseas that is
approved by the Malaysia External Trade Development Corporation.
ix. Participation in exhibitions held in a Malaysian Permanent Trade and Exhibition
Centre overseas that is approved by the Malaysia External Trade Development
Corporation.
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x. Expenses incurred in preparing models for participating in competitions at
international level as verified by the Professional Service Development
Corporation Sdn Bhd.

Non-application
A company eligible to claim under the promotion of export of higher education rules
[PU (A) 185/2001] is precluded from claiming this incentive.
(b). Deduction for Promotion of Export of Professional Services
PU (A) 124 Income Tax (Deduction for Promotion of Export of Professional Services)
Rules 2003.
The above rules provide that every person resident in Malaysia who incurs expenditure
primarily and principally for the purpose of promoting the export of professional
services will be eligible for double deduction.
Professional service means:
legal
accounting (including taxation and management consultancy)
architectural (including town planing and landscaping)
engineering and integrated engineering services (including valuation and
quantity surveying)
medical and dental.

The expenses that qualify for double deduction are:
feasibility studies for overseas project identified for the purpose of tender
tender preparation, including preparation of models made by the person that is
used in the bidding of international contracts as verified by the Professional
Services Development Corporation Sdn Bhd
preparation of models for international competition
payments to Malaysian resident for models as above
market research
preparing technical information
participation in approved overseas or local trade or industrial exhibitions
participation in approved exhibitions held in Malaysian Permanent Trade and
Exhibition Centre overseas
necessary air fares
accommodation of maximum RM300 per day and sustenance of maximum
RM150 per day overseas
maintaining sales office overseas
publicity and advertisement in any media overseas.

Non-application
Companies that qualify for double deduction under this rule the general rule [the
Income Tax (Deduction for Promotion of Export of Services) Rules 1999] are not
eligible for deduction under this incentive.

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(c). Double deduction for promotion of export of higher education
PU (A) 185 Income Tax (Deduction for Promotion of Export of Higher Education)
Rules 2001
PU (A) 261 Income Tax (Deduction for Promotion of Export of Higher Education)
(Amendment) Rules 2003

Objective
In the year 2001, an incentive was introduced specifically for the higher education
sector through the above rules.
Exclusion
A company that is eligible for a deduction under these rules shall not be eligible for a
deduction under the promotion of export of services mentioned above.
Qualifying criteria
(a) The company is resident in Malaysia.
(b) The company is incorporated under the Companies Act 1965 with the primary
purpose of establishing, managing and owning a private higher educational
institution that is registered with the Ministry of Higher Education Malaysia.
(c) The company runs a business of providing higher education in Malaysia.
(d) The company has made an application to the Ministry of Higher Education
Malaysia to obtain approval to undertake programmes and activities in relation
to the promotion of export of higher education overseas.
(e) A company that uses the services of another company that is approved by the
Ministry of Higher Education Malaysia to undertake the promotion of export of
higher education overseas shall also qualify for this incentive. The company has
to obtain certification from the Ministry of Higher Education Malaysia confirming
that the payment made to that appointed company is for the purpose of
undertaking the promotion of export of higher education overseas.

Qualifying expenditure for further deduction
The expenses that qualify for double deduction are:
market research
tender preparations
preparing technical information
expenditure in relation to travelling to an overseas destination by a
representative of the company must be for the purpose of participation in
education fairs approved by the Ministry of Higher Education for the purpose of
export of higher education. Maximum of RM300 for accommodation and
RM150 for sustenance per day are allowed
expenditure directly incurred in relation to participation in education fairs
overseas approved by the Ministry of Higher Education for the purpose of
export of higher education
maintaining sales office overseas
publicity and advertisement in any media outside Malaysia.

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3. Single deduction
Single deduction is allowed in respect of expenses of hotel accommodation for a
maximum of three nights to companies providing hospitality to potential importers
invited to Malaysia as a follow-up to trade and investment missions organised by
government agencies or industrial and trade associations. These expenses are
otherwise disallowed under Section 39 as entertainment expenses.
Siew Chuen Yong is examiner for Paper P6 (MYS)

References

1. Free on board (FOB) means term of sale under which the price invoiced or quoted by a seller
includes all charges up to placing the goods on board a ship at the port of departure specified
by the buyer. This means the price does not include carriage, freight and insurance from the
port to the destination
2. Agricultural produce means fresh and dried fruits, fresh and dried flowers, ornamental
plants, ornamental fish, frozen raw prawn or shrimp, frozen cooked and peeled prawn and
frozen raw cuttle fish and squid.

3. Note that persons qualify for this incentive. It means that companies, individuals and other
persons are eligible

RELEVANT TO ACCA QUALIFICATION PAPERS P1, P3, P4, P5, P6 AND P7
2011 ACCA
How to tackle exams: a markers perspective

I have been lecturing students for more than 15 years (usually over 400 at
every sitting) preparing them for their final level strategic management paper,
and my advice echoes many of the points made in the examiners recent video
presentation. I decided to become a marker to help me understand why
apparently well-prepared students performed badly in the actual exam. I
wanted some insight because, whenever a student marginally failed, they
would insist that they did not understand why.
This article will hopefully show how the good advice given by your tutor and the
examiner often falls on deaf ears. In my marking experience I have seen how
students who marginally fail do so not as a result of lack of knowledge, but
because of very basic mistakes in technique many of which are mentioned in
the examiners presentation. The points considered in this the article are
highlighted in bold and address some of these basic mistakes. Where
appropriate, I have tried to back up these points from my experience as a
Paper P3 marker.
The examiner identified the following key points:
However you study, ensure that you cover the complete syllabus
Undertake practice scenario questions under realistic time constraints
Practice your handwriting in three-hour sessions
Read widely, keep up to date, be aware of global trends and issues
Revise properly and comprehensively. Dont question spot

I plan to use these points as a structure for the article showing how students
lose valuable marks by ignoring them.
Practise your handwriting, in three-hour sessions
I would stress that it is very difficult to perform well in the exam if you have not
been through the experience of writing for three hours on a number of
occasions before the big day. After all, would you take your driving test without
having practised a few times before the actual test? It would be crazy not to,
yet there are many students who do a three-hour exam for the first time in the
actual real exam. If you cannot get this experience through an organised
course, then why not hook up with a study buddy and mark each others
scripts? Your study buddy should also be able to provide you with feedback on
the clarity of your handwriting and effectiveness of your presentation.
Read widely, keep up to date, be aware of global trends and issues
Not only does reading widely help improve your awareness of business trends
but it is also of immense benefit to your business English. The exam consists
of many pages of business scenarios that have to be read and digested fairly
quickly, and someone who is used to reading business English regularly as
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presented in business journals and newspapers is much more capable of
quickly digesting this examination scenario information. Consider the Financial
Times and The Economist, both of which have good value subscription rates for
students.
Read questions before the scenario
Adopting such an approach will ensure that you read with purpose with a clear
agenda as opposed to just reading through without any clear direction.
Allocate your time properly
The exam is as much a project management exercise as a test of knowledge.
The main area where students get themselves into a muddle with Paper P3 is
on Question 1, based round a 50-mark case scenario. In many of the scripts I
marked it was obvious that a disproportionate amount of time had been spent
on this question. This resulted in candidates doing reasonably well and maybe
scoring 30 out of a possible 50 marks, but probably taking approximately two
hours to achieve this. They should have spent no more than 90 minutes on this
question. Candidates then chose a Section B question and passed again,
scoring perhaps 13 out of 25 and probably taking roughly the appropriate time
(ie 45 minutes) to answer the question. However, because they had overrun
with Question 1, they now had only minutes to deal with the second Section B
question and, consequently, scored only two or three marks. Their total score
was therefore 30 + 13 + 3 = 46 leading to a fail.
ACCA has invested considerable effort in assessing students performance in
examinations and it has shown that the marks scored per minute on a question
falls over time as you write the answer. For example, when starting a question,
a student might score 0.8 marks per minute, but 20 minutes in to the answer
the score rate will have fallen to as low as 0.1 marks per minute. Therefore, a
student who believes they should spend an extra five minutes getting a couple
more marks will actually score, on average, fewer marks than a student who
had left the question at the end of the allocated time and went on to start the
next one. This is not my opinion, but a fact that has been proven by ACCA.
I would recommend that you allow 15 to 20 minutes reading and planning your
answer to the Section A case study question, and a further 10 to 15 minutes
reading and planning Section B questions. This adds up to approximately 30
minutes more than the allocated reading time. You therefore have 150 minutes
left to gain 100 marks, which equates to 1.5 minutes per mark.
Can I insist that you treat the time in the exam like you treat your resources in
your workplace? Create a strict budget and stick to it. I would recommend that
you physically write down the start and finish times on your script. In the June
2010 Paper P3 exam, the first part question was worth 21 marks. Therefore,
the time allowed for this part question was 31.5 minutes (21 marks x 1.5). By
writing down start and finish times, there can be no ambiguity. When the time
is up you have to stop and move on to the next question. If you have not
finished you may want to leave some space so that you can return to it should
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you have any time left at the end of the paper. Adopting such a rigorous
approach makes it very difficult to go over time on any question.
Ironically, it is often the questions on which candidates feel most confident
that marks are lost. For example, there was a recent exam question on the
components of the value chain. This part question was worth five marks and
most students gained these five marks quite quickly, but then went on to write
another two pages for which they could gain no further marks as they had
already achieved full marks in the first half page of their answer.
In June 2010, one of my scripts presented a good answer to Section A, and
gained 34 marks out of 50 (68%). However, its overall total mark was only
40%.
Pay attention to the number of marks
A key thing students need to focus on is ensuring their average question marks
are above 50%. If you just decide that you cannot do a particular sub-section
of a question, and just leave it blank, then you massively damage your chances
of exam success. If a question is worth 12 marks and you are not comfortable
with it, you could simply ignore it and write nothing. However, to get over 50
marks you now need to get 50/88, which is not 50%, but is in fact 57%. By
ignoring the question, you have put yourself in a position whereby your grade
point average has now risen just because you did not attempt one part
question. Had you attempted to get even two or three marks for this part
question, your average would have remained closer to the overall pass mark.
I often mark scripts that contain quite a good answer to a question, suggesting
that the candidate is clearly capable. However, the answer is insufficiently
focused on the marks that are available and, as a result, the candidate does
not do justice to the knowledge that they obviously have. For example,
Question 3b in the Paper P3 June 2010 exam asked for the competencies that
a business analyst would require to undertake their proposed new role. The
answers I marked were generally good but usually only mentioned three
competencies at most. Although their observations were reasonable, it was
difficult for me to give more than three or four marks. This was a shame
because it seemed likely from their narrative style that the candidate could
have written more, but did not do so and therefore lost the opportunity to gain
a further three marks. This might only be three marks, but it was actually 43%
of the total marks available for that part question. Therefore, focus carefully on
the total marks available and make sure you deliver an answer for which the
full mark allocation could be given.
Read the question very carefully what is the requirement?
This is absolutely crucial in the exam. I have lost count of the number of good
answers that I have been presented with that are sadly to a different question
to the one that has been asked. You have to be very pedantic here, and I advise
all students to follow what they have learned from studying quality assurance.
From your studies you will know that to eliminate errors a quality assurance
4
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2011 ACCA
approach requires you to perform tasks in a certain way, regardless of how
familiar you are with them. Therefore, in an exam situation, to ensure that you
do not misread the question you should adopt the following approach. Read
the question once and then read it again, trying to be as objective in your
reading as possible. Then write a quick plan of what you are going to write
taking into account the mark allocation. Then, before actually writing your
answer, check for a third time whether the plan and the question correlate. It is
almost impossible to misinterpret the question when taking this approach.
Make sure the answers are easy to read and mark
It never ceases to amaze how students communicate with me in their scripts. If
you were going for a job interview for a very important job would you turn up in
a pair of scruffy shorts and an un-ironed t-shirt? You must empathise with the
marker; they have many scripts to mark in a time constrained few weeks. A
significant minority of candidates believe that it is appropriate to make the life
of the marker even harder than it should be.
As markers, we all genuinely want you to pass, but the harder you make it for
the marker to read your answer, the harder it is for us to give you marks. Like
most people, I do not have perfect symmetrical handwriting. If your writing is
poor then there are things you can do to make it better. For example, leave
space between points made and, if there are six marks for a part question,
clearly indicate those points by bullet points or sub-headings. It is of course
possible to write three comprehensive points and obtain six marks, but I just
think that six distinct clear points takes away all elements of ambiguity and
repetition in the answer.
Not explaining points in sufficient detail
There is nothing more frustrating than seeing a script from a candidate who
appears to be knowledgeable but does not give me the opportunity to give
them the marks they could probably achieve. Markers are required to give
marks to candidates who explain clearly what they mean. They are not allowed
to infer from a candidates scant explanation that the candidate actually knows
a lot more than they are indicating. In the Paper P3 June 2010 exam, many
candidates spent a lot of time working out calculations for Question 2a.
However, they did not follow up this effort with an explanation of the relevance
of the values that they had calculated. A few succinct intelligent comments on
these values would have helped gain almost full marks for this part question,
but with figures alone it would be difficult to even score half marks for this part
question.
Desire for success
A final point, not really referred to in the examiners article but which I think is
very important, is for every student to think WIIIFM (what is in it for me?). You
must be able to visualise a payoff. Think of the Olympic gold medallist who had
pictured himself on the podium three years before the actual race.

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2011 ACCA
As a trainee accountant I personally disliked my boss and my motivation was
to get qualified as quickly as possible so that I could leave him. Having a clear
tangible objective will help create a strong desire for success. To achieve this
objective you are going to pass this exam by communicating clearly with the
marker and no opportunity for marks is going to be missed. I do not
understand candidates who leave part of an answer blank and therefore let
those marks escape marks which a hungrier candidate would have captured
and scored.

Sean Purcell is part of the Paper P3 marking team

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