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For the sale of the subsidiary I used mostly the analytical information from the recommended exhibit. However, I noticed on a separate exhibit, I think the newspaper article about medium sized firms, there was a subheading about management subsidiaries of audit firms, stating they’re hard to manage and the differing client bases make it impossible to cross-sell with audit firms. This swung it for me, I mentioned the Ashbridge portfolio display stating it was incompatible (alien territory).
I wasn’t sure if I was limited to just the exhibit mentioned in the question, but this extra information in another exhibit seemed too influential not to affect my decision to sell. I recommended the $25m could be used to invest in the new markets the large firms are diversifying to with high margins to get a share before saturation.
Otherwise as others have said, from the main exhibit, the 4 years total is less than $25m without considering time-value. Furthermore, the previous year actuals, the margin fell 8.5%, whereas the forecast stated margins would only fall 2% across the whole of the 4 years! This could be realistic, but seemed overoptimistic to me given recent actuals.
I’m hoping the ethical question was as straight forward as I interpreted. I thought it was especially generous that they gave marks for scepticism for this question.
The slides felt week for me, I really had to dig for relevant information and some answers were a big stretch, i.e. the last slide for culture, I mentioned organisational and power structures due to the changing management style. I stated rituals would be changed along with the use of technology day to day as well.
I figured q5 was only 13 (I think) marks over 3 slides so not much content was required.For q1 on changing structures, I felt I neglected two-tier boards in my studies as most mock and revision material focused on NEDs in a single tier board, so I’m hoping my observations weren’t too vague.
The more I think about this exam the more I don’t think the remote format suits it as it was set up.
This exam is always time consuming but on this sitting there were 8 exhibits to read if I recall correctly. Previous exams have mainly had 5-6 exhibits I think so seemed there was a lot more information to digest.
I am thinking there was additional information to allow for differing variants of questions that were asked, does anyone know are there normally variants of questions in the written paper for SBL?
The idea of pushing more information into an already time limited exam seems quite harsh and not well thought through. I know myself I was looking at information in the exhibits and wondering where it fitted in in the questions I had but just couldn’t see what relevance it had and only became clear after I learnt the alternative questions. Appreciate that it is an exam but providing additional information that is only going to confuse doesn’t seem appropriate.
Any thoughts or am I just moaning!?
For the first question the benefits and drawbacks of corporate structures, the benefits that I wrote for 1)The board was able to take long term decisions and due to neds working in the board it would ensure that the independence won’t be threatened 2) it is used to ensure that fair remuneration is given to the staff 3) the members who hasn’t worked for this board gets staffed this would be beneficial as oversees knowledge would come within the firm leading to more ideas and skills. 1) it is used to ensure that internal controls and working effectively and ensure that quality control procedures are in place with voluntary disclosures to ensure everything is running smoothly2) it is used to implement risk management policies and identify risk and to mitigate it 3) the member of the board is elected due to voting this would be beneficial as fair and independent member would be elected with the Satisfaction of other board members etc.4) to ensure that constructive relationship with the clients and other stakeholders are built. This could be done by ensuring that proper social and environmental auditing is conducted which ensures that the company is working in a fair and environmental friendly way. This would allow investors and other stakeholders to invest in the company leading to increased market share. The drawbacks which I mentioned was that these two boards are working separately so there is no unity of one leader but rather separation of two leaders and if both combines them there would be more ideas and knowledge which isn’t happened. Hope this is correct as well ?
Guys I don’t remember about sale of subsidiary. Is there a second variant as well?
Hello,
I’m looking for a Study buddy for the SBL exam if you are interested then reach out to me at ar300825@gmail.comThanks pal. I’m preparing for the March exam was getting too into the models which seems like a bad idea. Did you use any of the models in your exam at all?
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