topcima pres for conference final 9mar06 · broadcasting, telecoms) she has been involved with cima...

CIMA Future

Paper P10 - TOPCIMA

CIMA LECTURERS’CONFERENCE 2006 Review | Learning | Future

Paper P10Test of Professional Competence in

Management Accounting

Presentation byHeather Barnwell and Graham Eaton

TOPCIMA

Heather has held senior roles in industry (Shipping, Broadcasting, Telecoms)

She has been involved with CIMA exams for over 20 years and has written 9 cases

TOPCIMA

1. Presentation byHeather Barnwell FCMA

What is TOPCIMA

Pre-seen material (12- 18 pages) sets the scene of the company or companies and the industry setting

There are now 2 different exams sittings - each with its own unseen material of 4/5 pages long -based on the same pre-seen material in March and May ……. or September and November each year

The March and September sittings are taken on computer by candidates and remain pilot projects in 2006

What is TOPCIMA

One question requirement that is worth 100 marks

It takes about 1 year to develop a case

Within the 1 year time-frame, the time taken to write/edit and finalise all of the case material is about 2 months (or 40 days)

How to pass TOPCIMA

Sounds obvious – but answer the question –which happens to be a 100 mark question

Generally the question asks candidates to do 3 things:

To prioritise the key issues

To discuss the key issues

To make appropriate recommendations on the key issues

So how can you pass

The sure way to pass is to identify the key issues and to prioritise, to discuss them and to make recommendations

Sounds too easy doesn’t it!

However, it is crucial for candidates on the exam day to read (and re-read) the unseen material given to them and to identify all of the new issues raised

How to identify the key issues

It is important to go through the unseen material and to make notes/exam plan of what issues have been raised. These issues may be entirely new, or may be developed from information given in the pre-seen material

Having noted down a list of issues, it is then up to the candidates to place them in priority order, and the top 5 or 6 are the real key issues

These will be issues that could have a substantial effect on the company’s future success or even its very survival!

Examples of issues

In the November 2005 case on Domusco, an international construction company, there were many issues including:

Re-organisation of the project planning team

Forecast cash shortfall of Z$2.5 billion

Resignation of the Finance Director

Which is the most important?

Of the 3 issues given (and in the case there were lots of other issues as well) I hope that you would agree that the re-organisation of the project planning team (to achieve best practice within the company) was not the most important

The recruitment of a new FD could be considered the top priority for a company going through difficult times

Or ….. how to overcome the forecast cash shortfall – so the company does not go into liquidation

Many candidates cannot see the “Big Picture”

To some extent that is what TOPCIMA is about

Not just discussing each of the many smaller issues

But identifying the main issues (top 5 or 6 priorities) and addressing them

The re-organisation of the project planning team was discussed by far too many candidates!

And the dire cash situation was not discussedat all by many candidates

That is why the pass rate is not higher!


CIMA is not trying to trick candidates nor trying to make passing harder

All that is required is for your students to identify the really crucial issues facing the company in the case from all of the material given to them

It can be done - and done well – the scripts that win prizes and earn 80+ marks are a delight to read and mark


Researching the industry

It is vital to assist your students in understanding the problems (and opportunities) facing the company in the pre-seen material, for them to research the industry setting

Researching the industry

There are lots of methods for research and many easy ways:

Read the financial pages of a good newspaper at least once a week

Set up a news “alert” on the Internet using one of the search engines, which then emails you all news stories on that industry .. …………. but a lot may not be relevant

The construction industry

The most crucial issue affecting this industry is working capital

There are many news reports on companies who “down tools” on particular projects because of cash flow problems

The September 2005 case had Domusco with a cash surplus – but many candidates simply did not know what to write about the principles of distributing cash - so many ignored cash entirely in their reports!

What could really happen to a cash rich company

The September 2005 unseen material stated that among various problems and investment opportunities facing Domusco, it had a cash surplus of Z$ 1 billion

If this was a real listed company with this level of cash in its Balance Sheet – it could be the target for a hostile take-over bid

What could really happen to a cash rich company

However, what was more worrying was that candidates did not state that cash should be either:

Invested in projects …. generating a + NPV project or

Returned to shareholders

As they did not know what to do – they chose not to discuss cash at all

The assessment matrix

The assessment matrix has 9 criteria

Technical … Application … Diversity … Focus … Prioritisation … Judgement … Integration …

Logic … Ethics

The criteria range from 5 to 20 marks and can change with each issue of the pre-seen material


Prioritisation – 10 marks – students can only earn these marks if issues are prioritised (top 5 or 6 priorities) Priorities should be justified as to why they have ranked each issue in that priority e.g. In Nov 2005 the cash shortfall could be 1 of the 2 top priorities as Domusco could become bankrupt if it continues to spend the forecast level on construction costs with such a low level of sales revenueFor every issue identified in the top 5 or 6 priorities, each should be thoroughly discussed

Focus – this is where marks are awarded for the discussion of the key issues

If many of the issues are not discussed, then low marks are earned here


Logic – worth 20 marks reflecting the importance of clear recommendationsRecommendations should be justified, giving the reasoning behind the recommendation and a timescale for implementing the recommendations (urgent/next 6 months/ over 1 year) should also be givenFor Domusco in November 2005, candidates should have recommended a slow down in construction, as well as possibly selling some of the company’s assets, as it could not issues more shares or take on more debt


Areas that have improved since May 2005

Better prioritisation of issues

Clearer report format and appendices

Better use of suitable techniques, especially SWOT analyses

Better discussion of ethical issues

Since the first TOPCIMA exam last May there has been a noticeable improvement in these areas:

Areas that have improved since May 2005

Improved recommendations

Some of these improvements were as a result of the guidance notes sent out to students last November

However ……. there is still much room for further improvements

Since the first TOPCIMA exam last May there has been a noticeable improvement in these areas:

Areas needing more improvement

Prioritisation – about 10% of candidates do not attempt any prioritisation of the key issues at all

Prioritisation – of the 90% who do prioritise the issues, they state … “top priority is cash, second priority is new FD, etc”. There is a need to discuss the reasoning behind why they have ranked the issues in a particular order

Therefore justification of the priority order is necessary to earn high marks in this assessment criteria

Application of knowledge – more discussion of relevant theories and analyses in the context of the case …… such as Porter 5 forces, PEST analysis, etc

Judgement – better display of commercial, professional judgement is required. This is the link between the discussion of the issues and how candidates have reached their recommendations


Logic – more comprehensive, justifiedrecommendations covering all areas of the company

Particularly recommendations on each of the top priorities!

Timescales for recommendations to be implemented – immediately, next 6 months, longer term


Ethical issues - candidates have been earning higher marks in this new assessment criteria over the last few examsHowever, to earn high marks, it is necessary to identify why the issues have an ethical dimension and to make recommendations on how the ethical dilemmas could be overcomeThe discussion should cover at least 2 ethical issues to earn the full 10 marks availableEach case contains many ethical dilemmas and some candidates only identify and discuss 1 ethical issue


TOPCIMA is a strategy paper

Students can pass TOPCIMA without doing any numbers at all – although relevant numbers will help them to earn some marks …. about 10 marks maximum

Students will not pass TOPCIMA if they spend about 1 hour producing detailed ratio analysis and lots of calculations that have used up 33% of the exam time

TOPCIMA is a strategy paper

TOPCIMA is a strategy paper to discuss how the company in the case can move forward from where it currently is – whether it is successful now (as in September 2005 exam) or facing major problems (as in November 2005 exam)

The company needs a clear, focussed report that has identified the key, critical issues and make appropriate well justified recommendations on its future strategic direction

Relevant data

Only relevant data should be included in the answer

Candidates can research and pre-prepare material but it should only be used if it is relevant to the new data in the unseen material

For example … in May 2005 the unseen material introduced Shard as a company considering acquiring either of the 2 companies in the pre-seen material. A SWOT of Shard was relevant not the pre-prepared SWOT’s on ReuseR and NOW

Advice for future exams

Like any exam – practise, practise and practise!

The best way to prepare is by working through about 2 or 3 past cases – not simply reading 8 or 9 cases.

Learn and understand the business strategies and techniques and learn how to apply them to the company in the case


Get your students to practise writing a full answer and get it marked to ensure that it covers all nine areas of the assessment matrix

Most important of all – teach them how to identify and understand the key issues given in the unseen material

Give your students the confidence to come into the exam hall and to be able to adapt (or discard) ideas and pre-prepared material if it is no longer relevant

Read the Post Exam Guidance reports on the CIMA website – see what others did wrong in the past and learn from their mistakes!

Sounds obvious – but there is a 100 mark requirement and many candidates write an excellent report – but they have not answered the requirement or discussed many of the key issues


On the exam day, tell your students to list the new topics and identify which are the really critical key issues and then to prioritise them, discuss them and make justified recommendations on them – then they should pass!

I will not wish your students good luck – but instead I will recommend good preparation - this is the key to passing TOPCIMA!


Graham is Head of Examinations and Assessment within the Education Directorate at CIMA

TOPCIMA

2. Presentation byGraham Eaton

Three PC-based TOPCIMA pilots have taken place so far

What are the advantages………?

For students

sitting the exam using business tools

rapid results turnaround

For markers

Elimination of all script transfer logistics

No more illegible handwriting!

TOPCIMA ….. the future

CIMA is looking for additional experienced people to get involved with a variety of aspects of TOPCIMA

CIMA is looking for people to write parts of a case – or even a full case

Also to get involved with marking of TOPCIMA exams


If you are interested in finding out more about becoming involved, speak to Graham Eaton during the conference or

Come and have a chat with us tonight at 5.30pm to find out more – we will be in the reception area adjacent to the display stands

We welcome your input into this important examination


Paper P10 - Conclusion

Any questions?

topcima pres for conference final 9mar06 · broadcasting, telecoms) she has been involved with cima...

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