Governance Accountability Internal control Corporate ethics Risk Professionalism

REVIEW OF PAST EXAMS

WHAT WAS DONE WELL?

June 2009

Q1 on Global Bank: (b) on internal control failures, (c) on agency theory. Q3(a)(i) on ways a director can leave service and (c) on criticise the CEOs reward package. Q4(a)(i) on roles of risk manager.

December 2009

Q1 was about the Mary Jane. (a) on AAA 7-step model, (b) on internal control failures. Q2 (Ding Co) (a) on content of a directors induction programme. Q3 (a) on integrity. Q4 (a) on risk embeddedness (although not on application to Saltoc)

June 2010

Q1 was on Hesket Nuclear. (b) on trade unions (after an article I wrote in Student Accountant), (c) on agency, (d)(i) on social and environmental footprint (but not on construct a case). Q2 (a) on criticising the remuneration committee, (b) components of rewards package. Less well on alignment with shareholders interests. Q3 (c) define internal audit testing.

December 2010

Q1(a)(i) on why institutional investors might intervene in company management. Q2(c) on strategic and operational risk. Q3(a) on conflict of interest and John Soria taking up a NED post at KK Limited. Q4(a) on liquidity risk.

Overall, things well done

Core CG themes done better than some other areas Knowledge marks and level 1 verbs Timekeeping little evidence of struggling for time Most organise material well in answer preparation Questions similar to those asked previously (such as describing internal control failures in a case)

WHAT WASNT DONE WELL?

June 2009

Q1(a) about the rogue trader at Global Bank: candidates had question spotted that Kohlberg wouldnt come up in this paper. (d) about narrow and wide stakeholders. (e) about the roles of the CEO in internal control. Q2 on assess the ethical threats and (d) on deep green perspective. Q3: (d) criticise the chairmans performance.

December 2009

Q1 on the Mary Jane. (c) on NEDs, (d)(i) on information on controls and risks and (d)(ii) on the qualities of information. Q2 (c) on Arif Zamans understanding of the role of chairman. Q3 (b) Criticise Potto Sinters ethical behaviour. Answers were too descriptive.

June 2010

Q1 (a) on voluntary and involuntary stakeholders. Q2 (c) on voluntary reduction in pension value Q4 on Happy and healthy mostly done poorly.

December 2010

Q1(c) all three parts. - (i) confusion over sound corporate governance - (iii) often not attempted Q2(b) despite a technical article on it in 2009. Q3(c) on best practice CG report. Q4(d) on SR and the voluntary supplier payment policy

Example of Q1(c)(i)
Explain the importance of sound corporate governance by assessing the consequences of the corporate governance failures at ZPT. Corporate governance is the system by which organisations are controlled Sound corporate governance includes having a committee structure such as remunerations committee It is important to split the roles of CEO and Chairman. ZPT should form an audit committee There is no mention in the case of a nominations committee so ZPT should set one up

Overall, things that werent done well

The second parts of two-task requirements (after the and) Questions using higher level verbs like evaluate, construct and assess Ethical reasoning tasks Professional marks in Q1

LESSONS LEARNED

WHERE CAN TUITION PROVIDERS HELP?

My thoughts after seven live P1 exams

Work through all past papers. Rehearse use of common P1 verbs and question types. Continually emphasise the necessity of properly reading each question and the case itself. Rehearse presentation of answers for professional marks in Q1. Study real life situations in which governance, risk and ethics are prominent as part of placing the main themes in context.

FOCUS ON FUTURE EXAMS

WHATS NEW?

New content on risk in study guide section C

C1c on dynamic nature of risk assessment C1d management responses to changing risk assessment C1e risk appetite C3f on ALARP C3g objective and subjective risk perception C3h related and correlated risk

New name
P1, Professional Accountant
Is now known as:

P1, Governance, Risk and Ethics

EXAMINERS TOP TIPS

Dont question spot revise the whole study guide and expect anything. Work through all previous papers. Concentrate on exam technique for level 2 and 3 verbs. Answer all tasks in a question (before and after the and) Read and study the case and each question before starting the answer.