*** P5 December 2012 Exam *** Instant Poll and comments***

Did anyone else write about how they should use non financial measures instead of net income in q1b? Or did I completely miss the point?!

@elliem said:
Did anyone else write about how they should use non financial measures instead of net income in q1b? Or did I completely miss the point?!

I was thinking the same, I wrote non financial performance measures, but no one seems to have mentioned about it all. Am I writing irrelevant points?

8th February
ACCA is trying improve in terms of getting out result quicker, But CIMA is still ahead waiting time only 6-7 weeks, besides you canretake the xam in CIMA within two months of your relust

Q1

Report format
Introduction
3-4 lines
Sections
1) Compared divisions performance
2) Mentioned about EVA, ROI, RI against Net Income. Mentioned Net Income can manipulated. In addition wrote about benefits of the alternative measures. But I now regret that I should have mentioned about Non-Financial Measures like quality and etc. Also I mented about that they do not have a control over Capital expenditure
3) Remuneration Policy. For directors Fixed salary is ok , but bonus being based on net come is dangerous as it leads to disfuntional decsions makings, short termism and etc. And mentioned about commissions (I think it was wrong). I should have mentioned about EVA which long term, or smth else. Fo buying and creative staff I thought based on piece work would be appropriate to reward them with commissions rather than bonus on total income, the reason for that they are more motivated for being recognized for individual work, (because of the nature of the business i.e. advertising company)
Conclusion
I mentioned that in general company is doing very well despite current economic conditions and stiff competitions from new entries, this may be due to this company have been established for long time and have got a good reputation.
I suggested they need to look at improvement of performance measuring choice . And Reward/remuneration policy should set up in a way that should be clear, have a motivation to retain the talented staff further with the company. And controllable for divisional managers (basically I thought of building blocks.

do you remeber if the questions has specific for on financial mesure or just asked other measure ?

pretty sure it just asked for other measures for each division .

google is confused ))

Now that the questions are out…

Question 3 – has anyone else interpreted that breaching roce would mean going above 6%??

As a critical utility it would surely make sense not to have a large roce?

If a lot of people read it that way do you think they may change marking? I based all my constraints on a low roce including no motivation for cost savings

05008967 – I did the same as you – I think this is correct it makes sense. The government are ssetting a level they think is an acceptable return for the company – if they go over they’re fined. Therefore no incentive to improve performance/efficincy as this would improve profitability and therefore ROCE.

msamelia – I think I sort of went down that route saying just using financial perf indicators doesn’t capture the whole picture so important to widen the range of indicators – didn’t actually say BSC, but I think what you’ve done sounds good

Q3 Stillwater Services was based on a really, really old Paper 3.3 Dec 2000 question written by Shane Johnson, so it shows that Alex Watt really loves digging up fossils and adapting it to current times by putting in value-based management using EVA.

Q5 was based on Burns and Scapens work on the changing role of management accountants, which was also pretty surprising given that it is quite a small scope in the syllabus (hence was completely omitted by any tips :p) But this question looks to be the easiest subjective ‘shotgun in the blind’ type of question and looks much more attemptable than the Q5 in my last previous June 2012 sitting where I couldn’t figure out what the requirement is asking for.

I hit the nail on the head when I predicted Argenti’s corporate failure model (fortunately, Altman was still put to slumber). Hope the explanation I gave on Argenti’s model in the OpenTuition forum helped you forummers in the previous weeks. 🙂

@Simmox, thanks for the highlight. Being open minded, it’s quite an interesting perspective using Six Sigma on the HS case, as Six Sigma relates to defining a problem and work towards solving and preventing it.

When I read the question requirement asking for measures on ‘internal business processes’ and ‘customers’, the Balanced Scorecard model comes to mind, and how each SBU can be responsible for each seperate measure like the customer service department, and quality inspection in the manufacturing side.

I recommend building block model in q1 too as the same I was thinking the company is providing service. But run out of time for conclusion… Still managed attempt all four questions although Eva let myself down as I knew what to add but not due to time again!! Should have answered the q4 first but left the last when time is so limited &felt my handwriting was flying in the end!! Hope the marker can understand &have patient with reading my flying handwriting! Overall fair paper but very time pressure! Only a pass mark is all I need.