Friday, 13 November 2009

Fools P4radise

Many years ago I was involved as a marker and occasional question setter for the ICAEW Elements of Financial Decisions (final level). There was a lengthy debate about the appropriate standard and it was decided by the examiners that 2nd year undergraduate was about right. Now, most accounting bodies try to convince onlookers that their final level is of masters standard or M level. That is what the ACCA told me was the standard they expected. So the question I put is this. Have the professional papers really advanced that much or have degree standards deflated to the extent that a masters student of 2009 is only the equivalent of a 2nd year undergrad from 1975? So I thought I would do a little research.

Facts are always more interesting than fiction so I took two questions from the P4 June 09 and December 08 papers and reworked them so as to avoid any complaints about copyright. I then administered the questions to students at a 'good' UK university who were in their 2nd year of an accounting and finance degree. Both questions had identical academic 'payload' to those set in the professional examination but each had an additional 'discussion' sections where students were required to reflect on their answers. The two questions were chosen as they were labelled 'unfair' and 'unreasonable' by the many commentators on P4.

The students had all been given some introductory classes in finance in their first year and had completed approximately 6 weeks of their first term in the 2nd year. They had covered in outline the general approach to the solution of the questions but had not attempted a specific question in the area concerned. The result?

Over 80% of the students completed the questions without difficulty in approximately the time set for the questions in the original P4 papers. Their written answers were in the top quartile of performance using the normal professional marking scheme. Over 100 students were involved.

I leave you dear bloggees to come to your own conclusions.


Anonymous said...

Hi Bob, that's an interesting result and of course can be interpreted in many different way. I actually belong to one of those students would brand the June 2009 P4 exam as unreasonable due to the lack of examination of core topics, as outlined in the syllabus, and the time constraints. In addition, the recommended books are inadequate, as you have rightly pointed out yourself, and most students are working full-time and do self-study.

To put your experiment into context: A P4 student who writes a 3 hour exam for which he/she has invested a lot of time, and in some cases a lot of money, is a totally different kettle of fish than a student answering two exam-type questions and for which the result is not important to him/her. Many ACCA students, including myself, have already got master degrees in business from "good" universities, so I think it is unfair to suggest that we are somehow weaker than other students. There are webcasts of a good New York university masters degree in corporate finance and valuation which can be found online and I can assure you that the standard is not higher than the P4 standard expected by ACCA.

Having said that, I am actually grateful to you because I just missed out on passing P4 in June and am now studying "deeper" into the subject and am enjoying it. In addition I have learned a lot more since June. If the exam is fair (this can be very subjective of course), then I will pass and will thank you for this even though I was disappointed after the June exam.
Have a nice weekend.

Professor Bob Ryan said...

Excellent response - best of luck with your resit.

Anonymous said...

Sorry to interfere.. Wut u mean the master degree standard is not higher than the P4.. Please do a research before making a statement..

What i think is, both P4 and the master degree in any university are equivalent in the way they set their standard, but the focus might be slightly different, some focus on traditonal DCF, some focus on relative valuation, and what i see in P4 recently, they focus on risk management (derivatives) subject..

So, dont be proud too much on the P4 itself.. They are more to learn in this finance subject.. I am also taking a P4 this semester ( the 3rd time, i guess :) ) But this paper only a step stone for me to learn and discover new things in this finance world..

So, Good luck in your exam.. and thanks professor Bob, u do a great job in making student truly learn this subject.. TQ

Poh said...

The student were given general approach to solution and were not worked under exam condition, whether it is an open book exercise? Further the experimental student samples sufficient to warrant a conculsion here?

Having reviewed the June 09 P4 questions, the questions are not as difficult when I did the ACCA paper 14, Financial Strategy in year 1996! The questions only up to Level I CFA standard. Fact is there are always one or two difficult questions in prof. exam to differentiate against good, mid and bad students, further you are not disadvantaged by the one or two questions as everyone is studying the same recommended textbooks and marked relatively to each other. You only require 50 to pass! Even if you fail P4 paper, not need to retake 3 papers not like my scheme in year 1996!

Nevertheless, obtaining an undergraduate, MBA, ACCA or CFA is just a begining of your life long learning not end of it, unfortunately most people do not think that way, this is why there are people with a lot of acamedic or prof. titles but cannot perform fundamental work or with questionable prof. ethical behaviours!

Anonymous said...

Hi Bob

I am a professional tutor and have prepared students for P4 and its predecessor 3.7 for many years.

The debate about the standard of the paper is an interesting one. One aspect of this that is often confused is the difference between the standard of the question and the breadth and volume of examinable material and it is on this point that the problems have arisen with P4.

I would broadly agree that the June 2009 exam is technically at a 2nd year undergraduate level. In fact, having asked a class of part-time students to attempt question 1 immediately after having been taught the subject material (in general terms rather than taught to the question) the vast majority of students found getting 20+ marks out of 30 relatively straightforward.

Why then a worldwide pass rate of on 30% in June for P4?

The vast majority of ACCA students attempt P4 after only 3 months of tuition and during that time most are in full-time employment. This has always been the case, and will inevitably always be the case with professional accountancy exams.

Most students that I teach (and, I should add, my pass rates are consistently more than double the worldwide average)could comfortably cope with the standard of questions set (and almost certainly a higher standard of question - masters level even!) if there was much greater clarity of examinable areas and the boundaries of the syllabus.

For example - question 3 in the June exam on currency swaps (though really a forex swap) reuired students to prove a swap rate based on arbitrage. The syllabus section 2(b) implies that students need to be prepared to evaluate a swap for a given hedging requirement but does not mention the need to prove a rate. Similarly multi-period rationing is in the syllabus but single period is not.

I teach AS ICAEW and some of the finance elements to questions are technically more difficult than P4 but the syllabus and examinable material is very tightly controlled giving students a fairer opportunity to prepare.

I'm not sure whether the issue is with the ACCA of examiners interpretion of the syllabus (it is not just P4 but applies to other papers as well) but The ACCA should adopt the same approach as the ICAEW & then we can have masters level questions!

Professor Bob Ryan said...

This is a very interesting response and raises a number of interesting points. I think you are correct in that the syllabuses (which are not defined by the examiners) are much too broad and the level and scope too ambitious. The fact that many students attempt P4 just 3 months after passing F9 does partly explain the low pass rates - which were also a feature of 3.7. There are other dimensions to this as well - unless a student has access to an excellent tutor such as yourself, or is given a structured reading programme from high quality texts supporting the study manuals then their chances of passing the examination are pretty slim. Finance, even at the current P4 level, does need excellent pedagogy - in the broadest sense - or students become conceptually confused and their resulting ability to retain the simplest of underpinning concepts badly impaired.

These are points I have made at the tutor's conference and in the online presentations on more than one occasion.

shtudento said...

Well, you're all right, the level of the professional paper exam is equal to undergraduate level. I am using CFA Level I video materials to support some areas of P4 and noticed that CFA is probably more demanding than ACCA's P4.
Your relevations could undermine the aspiration of prof bodies, like ACCA who claim their qualification = masters degree level. If HO finds out about this, too bad for foreign students wishing to get Tier 1 visa for their ACCA qualification

Anonymous said...

Hi Bob

Professional tutor here again.

Interested in your response to my previous comments esp. regarding pedagogy which also ties in with on older blog about not letting a tutor kid you that P4 can be passed in 3 months.

If most ACCA students prepare in 3 months, and 30% pass, a good student with the aid of an excellent 'exam focused' tutor should get into the pass cohort (even if there are elements of questions that they simply cannot answer given the breadth of syllabus and limited study). Everything is relative.

An interesting aspect of this is that because the ICAEW syllabus is so tightly controlled and the examinable areas are so much narrower, the teaching, whilst not totally socratic can be much more open and challenging. This is necessary as the students will need to produce quality answers to every part of every question to be successful.

I think that there is a significant issue with both the ACCA syllabus breadth and examiners interpretation - both of which significantly reduce the quality of candidates answers. I do think that Q3 and Q5 in your June P4 paper, for example, were unfair to the extent that they covered material outside the scope of the syllabus. The majority of students would have 'had a go' at one of these questions without being properly prepared. Given that the syllabus itself is so wide I don't see the need to 'extend the syllabus' to the proof of swap rates or to include single period capital rationing from F9.

Having made that minor criticism - I am sorry that you are will not be examining P4 in the future - your attempt to modernise and open up finance for ACCA students, and encourage wider reading and thinking have been a breath of fresh air.

Anonymous said...

I must say that I really like your attitude

Professor Bob Ryan said...

It's a shame that this debate could not be opened up to a wider forum because again you are raising issues that the ACCA should be thinking about.

True, if you accept the proposition that only material at a given level should be examined then questions 3 and 5 could be deemed unfair. But if you assume that a syllabus plus all material subordinate to it is examinable then they were fair. My position is that as a test of professional competence if a student cannot handle a single period CR problem and, crucially, see the significance of the shadow price (the PI of the marginal project) then they do not understand CR. However, I do accept that there is a real difference of opinion here between the student body (and their tutors) and this and I suspect many of the other examiners.

Anonymous said...

I'm just wondering if you are implying that ACCA isn't worth taking?---as in it is better to go down the under grand-masters route.

I am taking my final 3 papers after starting the ACCA from scratch 3 years ago and I feel very disheartened at comments by yourself implying that the ACCA isn't up to the standard as outined by the ACCA itself.

I am studying P4 and having come across this blog I felt very grateful to you for giving students an insight into your way of thinking. You are a controversial examiner but throughout my studies its obvious your exam questions can be tackled if we students just open our minds and keep a clear head.

But to leave this blog less than a month before students take the P4 exam leaves me feeling what is the point?! Why am I doing these exams if the ACCA examiner is going to come out and imply that all my hard work over 3 years equates to the standard of a 2nd year under graduate?

Anonymous said...

professional tutor again

at the risk of taking over Bob's blog I want to reply to the last bloggee.

despite agreeing with the Bob about the standard of questions I want to add that it is much harder to pass all the ACCA exams than obtain a 2(i) or 2 (ii) in accounting and finance.

in my experience most a&f degrees allow students to choose questions from a wide range in their final exams based on predictable areas and therefore from an early stage students can focus on certain areas to study in depth and leave others completely. there is virtually no choice in acca exams.

also - most acca students combine studying with demanding jobs & the pressure to pass each exam is much greater than at degree level

don't lose heart - if you succeed in qualifying it is a great achievement

Anonymous said...

To Professional Tutor:

Thanks very much for your encouraging post.

I actually have a lot of time for the examiner as well but I feel Bob could have picked his time on this post.

I'm sure I am not the only one who may feel a bit disheartened by it.

Thanks again Professional Tutor!

Professor Bob Ryan said...

I too would not wish to discourage anyone from their studies - as 'professional tutor' rightly says you are doing this as part of your job based development. In common with the other professional bodies, the examinations represent the education bit of what should be a combined process of education and work based training. I am keen however to see a debate about what is the appropriate educational attainment required to support professional qualification. What I am also very concerned about is that students believe that they can succeed with just 3 months of study post F9. Now that may be possible in some subjects but it is not possible with this subject. However, one further point on this: ACCA is just one important step on the road to full professionalisation. That process may be extended with a suitable MBA, CFA, tax qualification, risk management qualification and so on.

Now there are people who are very uncomfortable about the discussions I conduct on this blog. Indeed some, I am sure, would love to see it closed down. However, I welcome criticism and debate. Provoking and listening to students and tutors has helped me to think about the issues and where I have made mistakes helped me to make sure I don't make them again.

Anonymous said...

Hi Bob! i am an ACCA student and i will be giving my P4 paper this december. When i enrolled for P4 in july i was informed by my seniors about how 'inconsiderate' you are about the students and how 'unsolvable' your papers are. naturally it worried me and i immediately bought your book at once and began reading it.
personally speaking i think the allegations against you are baseless. never before have i studied a subject as in depth as i have with P4. I have read the Kaplan book, your book and numerous articles online. I now have an extensive knowledge about the subject and even then i'm curious to learn more!
Although i do agree that your papers are somewhat difficult, I am of the opinion that this is a positive aspect and this makes attempting the P4 paper even more challenging and worthwhile! i am looking forward to attempting your paper (although you are no longer the examiner) and i want to score excellent marks on it! a mere 50% wont due for me!:p
before i paste my comment i want to thank you for helping me develop an interest in finance and i hope to one day become a cfa! i hope people will realise that you are in fact helping them by encouraging them to enhance their knowledge and not to stick to course books! i wish you the best of luck in your future plans.
Take care,,,,

oh and i also want to quote something which my tutor told me! 'finance is not a science but an art. it's principles and applications can not be fit into a single textbook and even after studying the subject for 25 years i still find that i have a lot to learn about this art'

Professor Bob Ryan said...

Thank you - that is what makes the struggle for standards all worthwhile.

registoni said...

totally agree the last anonimous.
The fear of failing of such difficult paper, made me to get and read at least dozen books on the specific topics in corporate finance, as well as multimedia sources of info (like online course webcasts, CFA video courses, news articles). I even subscribed to FT newspaper for £1 for 1 month :)
Still feel that I have not covered everything in detail. Finance is like an ocean, and clearly 2-3 months is not enough to swim it all over (taking into account your job, family commitments + other papers)
will see how this is going to repay me at the exam.
Anyway thank you prof Bob for your approach to making students to read more and deep. (I have to admit I did not buy your book, I substituted it with Damodaran's book and course)

Anonymous said...

But what u ask in the papers are not covered in the approved study text (book n KIT).
You are most welcome to ask such questions but do tell ACCA's approved media partner to prepare books according to your requirement. That will be fair

Professor Bob Ryan said...

Just have a think about that. If an examiner decides to set a question not explicitly covered in the manuals or the kit he should tell the approved manual writers of his intentions? They then update their manuals and every student on the planet knows what is coming up.

What the manual writers do is provide their best interpretation of the syllabus. They get advice from many sources about new directions and changes in emphasis but inevitably they must follow the examining process not lead it. This reinforces a point I have made many times and discussed in previous comments on the blog: you need to read more widely using the SM's and kit as a route map and revision aid.

Usman said...

hey Bob i don't know of this is in contradiction with the rules you've set out in your blog but will we expect a similar type of ppr for dec 09 as we did for june 09? meaning that some aspects will be examined which are not in the p4 syllabus but in the f9, like single period CR? i was wondering whether i should also go through my f9 book as revision for p4.
thank you

Anonymous said...

Usman-- you cannot possibly expect the examiner to answer that question!

I agree that Bob is fully entitled to ask topics from the F9 syllabus but with a different slant and also on topics that are outside the scope of the Kaplan/Bpp books. For example , correct me if i am wrong which I may be, the concept of duration is on the syllabus but isn't interpreted in any of the student manuals. This isnt the examiners fault.

The only area I disagree with him in is when he implies that P4/ACCA is on par with a 2nd year under graduate degree..

Anonymous said...

Hi Prof,

Out of topic..

I would like to know what the affect and how investors will cope with the changes in accounting standard to fair value which all the financial instrument will be marked to market at the end of the year. Did we still use the PBT (adjusted - mark to market) to calculate P/E ratio?

registoni said...

off-top prof Bob.
Re your articles on lenders' rates and equity valuation with option pricing in SA.
I found 2 sources which apparently link the ideas behind your two articles. As I understood, you are using Merton's Distance-to-Default (DtD) Model with some adjustments. My question, if in one source it is said that 1-N(d2)=N(-d2) = Probability of Default = 1- NormDist (DtD). That implies that [Va-Vd]/[*Va] = d2.
But in second source, they link N(d1) with D-t-D = N(d1)/Equity's they also devise credit spread on cost of debt as being = (Return-on-assets - Rf)*(1-N(d1)/Debt-Ratio.
I would appreciate if you could share your view on these revelations, if course you are not bound by the terms of agreement with your former employer to keep silence before the exam.
here is first source: Importance of d2 in Black-Scholes to Merton Model in Credit Risk []
and the second:
Expected Default Probability, Credit Spreads and Distance-from-Default by Heng-Chih Chou []

Anonymous said...

i would disagree with a reply by 'anonymous' to usman. u say that duration is in the course but not reflected in the study manuals. i cant say about bpp since i didnt use it but i can safely say that it is nowhere in the kaplan book. u said that it is not examiner's fault and i disagree with u here. because ACCA says that its recommned texts are reviewed by the examiners so if the p4 text of kaplan has been reviewed by mr. bob then i wonder why dosent he spots these obvious omissions from the text. not just duration but there are other things missing from the kaplan book as well. i wonder what mr. bob is doing if dosent has enough time to review the books properly.. i think he utilises that time to find some challenging stuff for the p4 paper.

Anonymous said...

Have a look at prof bob's last posted comment and figure it out!

Anonymous said...

the concept of duration re investment appraisal isnt in the study manuals ie kaplan but it is on the syllabus. it's not the examiner fault in that respect.

Bob- took you're paper on thursday. I feel I've failed because I panicked. Reasonable paper though. I dont think you can be criticised over this one.

Is this your last exam for the acca?

Anonymous said...

Hi Bob,

I took the P4 paper in this December exams. I must say it was fairer than I expected. Frankly, I dont know what is fair and what is not fair in an examination. I must say though that having had written by other degree level examinations in sciences where solutions manuals(to examinations questions)are a luxury. I find the ACCA examinations very friendly. I am just changing my career from a medical field to accounting and finance. I must confess though that I have never obtained very high marks in ACCA but I am proud that Iam completing it within 2.5 years if I pass both my last two papers. I work full time (not in finance)!

If the level expected is Masters, then let the questions be set at masters level. Again, the way the ACCA administers its examinations is very different to most masters level programmes. I went through a masters degree in my current field and I must say it is significantly different. But again, what do I know about finance

Anonymous said...

Hello Bob
Your blog makes interesting reading and I am particularly attracted to your comment that 3 months is not enough to prepare for such a paper as P4. Well I think 6 months is reasonable, however the break-neck speed at which tutors take students through lectures and exam preps suggests otherwise. Thus with this kind of prep there will be only one result for many students - failure.
I think you did not forward strong points as to why you disagree that P4 is of Masters standard and only based it on one experiment with a bunch of students working in a very different context.

Anonymous said...

Hi Bob,

It's great to see you have your own blog!

Although I cleared F9 reasonably comfortably, I do feel gaps exist in my knowledge. And this is after incorporating additional readings other than the recommended text in whatever spare time I had left.

So I began preparing for P4 last week, as with my other two core papers. And frankly there are quite a few students doing likewise, given the "eccentricity" of your paper in Jun09.

However I have decided not to write P4 next June but in Dec2010 with my other option paper (That's one year Bob!) as I fully intend to hurdle this beast in one attempt.

Most importantly I want clearing P4 to mean I have a sound and solid foundation for my further adventures ahead, be it professionally or academically.

Too bad, you will no longer be my adversarial examiner by then.

Before I end, I do have to thank you because reading your blog on the P4 issues have truly focused my direction. So thank you and Merry Christmas!

Anonymous said...

Dear Bob.

I am an MSc Accounting and finance student at Bath university, and have in the past had the priviledge of you lecturing me Financial Markets. I am at that stage now where I have to decide which accounting body to pursue and which career path to follow. What I and many others would like to know, is if in your opinion the ACA justifies its so called superiority over other accounting qualifications such as ACCA,CIPFA,CIMA amongst others.It continues to amaze me how at my univerisity very very few consider ACCA as a qualification even worth pursuing, and that ACA is the only route to success in accounting. It is becoming an increasingly common mindset amongst those from top 20 universities in the UK to follow ACA, and only ACA. Are the ACA exams significantly more difficult than the ACCA exams? Is ACAs hyped reputation valid?

Anonymous said...

Hi Bob,

Simple question to the professor. When you set the P4 ACCA exams at what level did you set them is it second year undergraduate or Masters?

Anonymous said...

Hi Bob,

I see nothing wrong with questions 3 and 5. Both questions came from topics examinable at F9( a direct junior paper to paper P4).According to the ACCA knowledge of F9 is assumed for P4. If that is the case, then F9 materials is examinable in a sense.In any case it just stands logical that a student sitting for a senior paper should be more versed in the basic principles of the lower paper. I think both were straight forward questions which shouldnt even raise any debate. Concerning cross currency exchange that is common sense which is even examoinable at GCE O Level Mathematics (Syllabus D).

I believe students should make an attempt to think outside the box and apply common sense to questions if success or indeed higher marks are to be obtained.

Professor Bob Ryan said...

To Bath MSc student - contact me though the university and I can advise.

Professor Bob Ryan said...

On the question of the standard I set when examining I follow the requirements of the institution I am working for. Enquiries about the standard of P4 should really be addressed to the ACCA if there is any confusion.

registoni said...

I have passed P4 at my first attempt. It only took me 2 month to prepare for it (not a whole year as suggested by prof. Bob - you undercounting the individual factor, not everyone is like your an average Brit student :)))
I got 58 and I am happy, as I did only home study, with full time work and own young family commitments.
But thanks to you, I read so much about Finance, Damodaran in Valuation + Hull in derivatives, and so many others! Finance is fun to read and read!
Good luck to you all,

Professor Bob Ryan said...

That is a brilliant result Registoni and I hope your learning has opened up a new chapter of interest in your life. I hope as you proceed one with your study of finance you will appreciate the quality of the learning experience you gained from those great books you mention and from the P4 syllabus and examination. Very well done.

Note to others: this is an exceptional result, please don't assume that you too can do it in 2 months. For us mere mortals it will not work.

registoni said...

thanks, prof. Bob.
I will indeed try to continue my finance studies further on next year (CFA or FRM - haven't decided yet)
But one thing amuses me as that you as a strong beliver of Market Efficiency Hypothesis, still pointing that for us to beat the market (pass the paper), we would need access to some superior information to which many other do not have (like those books and online materials). Poor those who only used bpp/kaplans textbook remind me those who would like to beat the market with the book everyone has access to and too "old" to be of any value?
My uni prof in Marketing use to do the same joke, in classes he used the prescribed textbook, but for exams different textbook. I probably was the only one to find out about that and got straight As.
Maybe I just got crazy after reading all these books, need rest for a while ...

Anonymous said...

hi professor bob! it's me that anonymous who said your paper inspired me to study hard! anyways i passed as well! and with 65 marks! now im an affiliate!! :D :D so thank you!

nayab said...

hi bob, the day u posted tht it takes a yr to get to p4 i cdnt frget ur post until the exam n here i m cleared it in 1st attempt wid 3 months of studies along wid 3 other first time papers.

Anonymous said...

Hi regiostoni, Pfof Bob Ryan is right. I too studied P4 in under 3 months along with with P6, first time sitting for both. I passed with 68 and 62 respectively. I read only Kaplan materials no any additional reading. I bought Bob's book later which Iam still reading. For me its success first and deep understanding later. I believe that learning doesnt end with the passing of examinations. Infact it is the beggining. Such an approach requires discipline and a consistent strategy. As Bob stated, its exceptional and not to be adopted by every student. My advise is weigh your capabilities and devise your study programme accordingly.

However, it was nice passing P4 with a relatively comfortable mark especially considering I work full time and I have a family as well.

Anonymous said...

51% - Thank you! The additional book that I read was the management of company finance- Samuels Wilkes & Brayshaw.
Really couldnt believe that I passed this paper. I'm now an affiliate and I am curious to find out what further education would you recommend for someone who is very interested in the finance field? A masters? CFA?

Anonymous said...

Bob, I am interested in your opinion of the ACA v ACCA brought up by a previous poster?
Obviously I am biased, having just finished my ACCA exams but I genuinely feel that ACCA is superior.
With Chartered, you are tied into working in a practice for 3.5 years. Where as with Certified, you can spread your experience over practice, financial services & industry sector.

What is your honest opinion on this debate?

Professor Bob Ryan said...

Well done to all who have passed their P4 - you see nothing is impossible! On the question of where next much depends on what you want to do. CFA is a highly regarded qualification - about the same level of difficulty as P4 but over a broader range. There has been a debate in the Accounting Review (see the November edition) on whether CFA's perform better than unqualified analysts. The evidence is mixed but it does appear that there is some cache in the qualification. For ACCA's wanting to move into senior management then the MBA route is the best in my view - joining the very best school that you can afford. The MBS, Warwick and Durham remote learning programmes are the best and of those I believe the Manchester programme has a substantial edge with its MBA for financial professionals.

On the debate about ACCA versus ICAEW the answer is more clear cut if you have a choice. ICAEW along with ICAS is fully recognised around the world (including crucially the US) as the premier qualification. The standards imposed on the training firms are very high indeed with firms like KPMG, PwC and EY leading the standards. Given the very restricted entry routes the leading firms cherry pick the most able students from the best universities and also look back at the A levels to ensure high grades. Salaries for qualified ICAEW's are very substantially more than for ACCA's on average. Now none of this in any way detracts from ACCA. It is a mass education provider (>2000000 students worldwide) and its standards are very high - but if you had a genuine choice then the ICAEW or ICAS are the qualifications to aspire to.

Anonymous said...

Bob, I envy your honest under the circumstances. I am also aware that you are ICAEW qualified but am definitely sure that you have trascended the boundaries of cheap ulogy and look at the qualifications in a much more sincere way. However, where I come from in the southern Africa the most popular accounting qualifications in that region are ACCA and CIMA. Infact, I just dont know of any training institution in Zambia, Zimbabwe, Botswana, Swaziland, Lesotho,Namibia, Malawi (not sure about South Africa) that tutors ICAEW or ICAS. Try to search for yourself.

Professor Bob Ryan said...

I think the only rout in would be the local KPMG, PwC or other international firm and you would need to gt a training contract. The best practical route is through ACCA and then if the opportunity comes to take the conversion into ICAEW. But by that stage you will almos certainly have started to make your way with the ACCA qualification and may look for another qualification to enhance your career opportunities in whatever way you want to go.

When I qualified to become a chartered accountant meant ICAEW/ICAS - the Association of Certified Corporate Accountants, as it was then, did not have chartered status. CIMA likewise was the Institute of Cost and Works Acountants. Times change but the rule is as always: go for the very best that circumstances and your resources permit - and then you will not have chosen the 2nd best.

MohammadAli said...

Now that the results have come out,in question 1(a),where the requirement is to calculate the FCFE,my question is the solution has not included the Tax Saving Availed on Debt.

This is also stated in t he FCFE format in the Bpp P4 book.
Kindly please explain the concept of FCFE as I am a little confused.
I usually calculate FCFE as follows:
Earnings before Interest and Tax
Less Tax
Add Deprecation
less Capital Expenditure
Less Working Capital increases

Less Net interest+Net Debt Repaid
Add Tax Benefit(Net Interest*Tax Rate)

Anonymous said...

Professor Ryan gives his apologies but queries of this type must be sent to the ACCA directly.