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What are the chances of passing the exam if you have partially attempted question 4 and not attempted question 5 or in terms of marks attempted 80%.
I also suggested not to sell. They could differentiate themselves in the market by focusing on incorporating a ‘total business solutions’ approach – accountancy services plus the management consultancy services
I reckon I’m probably going to get somewhere between 40% and 50% hahah. Good luck with results everybody. I can’t believe they chose an LLP!
In case it helps anyone, I had these questions and wrote these answers, I could be completely wrong about most of them tbh:
1. benefits/drawbacks of a change in governance structure to multi-tier – spat out theory here
2. sale of management consultancy subsidiary – used SAF for this, but I didn’t use it well
3a and b. ethical conduct of partner – scepticism about allegations, how to investigate and implementations which will help this in future. I said they should believe accuser but keep a questioning mind about it because the accuser had just been made redundant etc. Wrote some threats to independence, and used COPIP. Said they need to ask for evidence from accuser, maybe have confidential chats with staff who dealt with unethical partner, obtain prior years’ audit files. For implementation I said to rotate audit partner and I can’t remember what else.
4a and b. benefits and drawbacks of automation, benefits and drawbacks of establishing internal audit. Common sensed my way through this one!
5. slides about implications with competitors, external opportunities and recommendations for a culture change – this one was awful, I just churned out a couple of random things like becoming more collaborative and participative, using automation, establish core competences in non audit services if possible, some other stuff
i dont think i have a sale of subsidiary in my exam either. It is question 2 which asks about whether they should close some office
Is it possible to have two versions? I had a sale of subsidiary and nothing about closing the office. I even had no info to calculate these revenue per partner or anything other people listed.
I’m pretty sure it was about sale for 25 mln to a competitor…Yes robynemilie! They were my questions. Seriously, are there two variants of this paper?!
Good luck with your results!
In my last queestion there were three parts
Part 1 slide about main risk co faced
Part 2 implications for the development at competitive firm
Part 3 how the partner leadership in the firm can be used to deal with the risks and competition the firm faces
I wasnt asked to make any recommendations on the culture changeI’ve seen somewhere they were highliting that everyone will get the same questions – both paper and CBE versions. I guess goegraphically the principle should be the same.
But i mean if half of us are sure about sale and other half is sure about office closure, then we had 2 versions of Task 2 🙂
i sat the remote exam version this morning, i dont know whether that made the difference. Basically my paper asked if they should close some office that have a small number of partner. And it asked if the partners in the closed office could be transferred to bigger office to create a ‘centre of excellence’ something like that
Just checked with other students from my group, and we did have different Q2 – part selling subsidiary, part closing small offices
I found it slightly annoying that they mostly didn’t refer to most people by name. I had to write out “managing partner” “senior partner” etc throughout it. I find it a lot easier when they at least name them, because I can remember who each person is a lot better!
That was interesting, after I had read the exhibits I thought there was going to be a restructure and close offices but I had no question on that.
I was almost trying to cram my ideas into the questions LOLThey must use the one set of exhibits but have different questions.
Technique and discipline was important and I feel they were testing both. For a couple the questions there was so much to write you could have spent the whole 4 hours on it.
No idea if I understood the questions well. Probably a lot of mistakes as well.
Q1 Change in governance structure (18 marks)
New gov structure is more centralised
The previous structure had 12 partners (stated in the introduction exhibit) whereas the new one have 5 partners only with key roles.
As per the new gov structure, there were too many responsibilities such as remuneration, risk, internal controls and quality, and appointment of partners. So, there needed to be seperate committees for each.
Decisions would take longer to be made under new structure because too many responsiblities and lack of focus.
Slow decisions making evidenced by only 1 full partners meeting in the year (but this related to current gov structure) !?!?
Need for HR partner in gov body because higher number of staffs
Q2 Proposed sale of consultancy firm (17 marks)
Small offices has lower operating margins so it is ok to sell to improve total operating margins
Small offices represent 8% total revenue, so they must be able to cover lost revenue
Small offices more focused on tax compliance which is 15% total revenue, so they will lose more in this market.
Redundant employees joined competitors and shared trade secrets
Redundant disgruntled employees lead to reputational issues
Labour laws consideration for redundant employees
More resources to focus on medium and large offices (Barely talked about the positive points)
Q3 Email about conduct of Audit Partner (24 marks)
Ethical: self interest in property development, familiarity with Dominic, lack of prof competence due to poor review and lack of understanding of audit process by Senior partner, lack of integrity because deliberate attempt to provide only clean audit files to quality control reviewers.
Business problems: Affect audit planning because Senior Partner did not use centralised system, miss client deadline due to understaff, low quality work due to poor planning leading to reputation issues. Fail to comply with standards and regulations if no proper review is done leading to legal and reputational issues. If the three payments to property development are fraudulous, could lead to reputation issues
Recommendations: engage seperate team to investigate, check payment of holidays are not excessive gifts from Dominic, check that three payments to property are really consultancy services, quality control reviewers should select files at random.
Q4 Automation, Internal Audit (28 marks)
Pros: capitalise on growing market for data analytics, analyse huge amount of data, analyse complex transactions, better quality audit
Cons: may lack resources to implement for large operations like bigger firms,
may need to reallocate resources from other dept to implement data analytics,
difficulty implementing because lack of training?!?Q4(b) Audit approach: not compatible with smaller firms in Ray Farr. Need to change approach to accommodate small, medium, and large size firms
Q5 Slides about rival firms, opportunities and changing culture (13 marks)
Decreased profitability, increasing costs. Need for more effort
Need to implement data analytics to compete
Employees leaving to join competitors!?!?Well, I’m definitely panicking less now a few people have said they didn’t have the closure question! Thanks for saving my sanity 🙂
Q1 Change in governing board (18 marks). A section of a report to analyse the points of the new Board. I talked about lack of independence, lack of committees etc although the new one would help meet the strategic aims.
Q2 Closing the smaller offices (17 marks) looked at the financial implications, 8% of revenue is not much significant. But more split of the revenue for each of the small offices, could have been more helpful to analyse. Closing of those firms would help the bigger offices to take a strategic position, invest in technology and compete in the market. Thre bigger offices would be able to focus on more specialised services, better control, enhanced communication internally and externally, be more client focussed, cost reduction if the offices are closed, but should find ways to compensate those who will lose jobs. (I could have written more on how about automating some of the services of the small offices, however i did not have time).
Q3 Email about conduct of Audit Partner (24 marks).. fraudulent activities, concealing some frauds. Familiarity threat..not supportive to staff..not acting professional at work by not reviewing certain reports, autocratic style.
Q4 Data analytics. Pros and cons taken from the exhibit (3-4 of each and elaborated on) part 2 of the question was about how to implement the audit approach..i used the lewins model of unfreeze change and freeze (28 marks)
Q5 3 slides about risks, implication and improvement in leadership (13 marks)
– risks were loss of staff/partners.
– fierce competitionThe implication was loss of clients and going concern problem in the long run.
Leadership improvement: use a particpative style instead.
Make decisions faster to act ahead of competitors.
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