Topic 1 guide and pointers

@eller I share your enthusiasm for costing as that and management accounting used to be one of my specialisms however when it comes to the RAP you need to go for one that will give you the best result. Unless you work in an organisation or have access to really good information sources in the context of an organisation you may find the evaluation part of 'Topic 1 An analysis and evaluation of an organisation’s budgetary control system and its links with performance management and decision making' fairly insurmountable when it comes to the RAP requirements.... You cannot just set out budgetary techniques, you need to be able to assess them, critique them and for a good grade, really delve deeply into the analysis side and this is no easy task unless you are working as a management accountant in the organisation you are investigating. If you just describe budgetary control systems without really assessing its effect on performance management and decision making objectively you will not meet the assessment criteria sufficiently well for a pass.

@Trephena thank you very much for your candid and quick response. My mentor is from the said organization and they are willing to give me all information I need internally. It being a government institution, almost everything is published/ accessible to the public.(Although this point might be debatable) I really want to pass and pass highly and I understand your point there. In your opinion, what other topics would you advise someone like me(I have done budgeting before while working in a small company in a non-accounting position, I love reading and I can do lots of research) to take? Generally, someone who is passionate about budgeting, variances, controls, communication and fraud but has only worked in a non-accounting role. That is apart from topic 8. (It's too common for my liking)Or am I at the best chance of passing highly with this topic 8?

@eller I don't think you should write-off Topic 1 just yet as you have some good data sources and given your background, however you do need to think about how you can do some objective original analysis and evaluation. (BTW I share your passion for research and have a Masters in Forensic Accounting so as well as the management accounting we have some things in common here!) To pass the RAP you must do something with your data and information - put your own ' stamp' on it by adding some original input and linking the budgetary control system etc to some form of objective analysis of whether it is effectively being used to improve decision-making and performance management or not. Are there National Audit Office or other public accounts committee reports available? You have to make something meaningful out of your research by analysing it and assessing it to form an opinion (The Conclusion Section) and making any relevant recommendations. What you can't do is just research and accept everything as 'read' without demonstrating the evaluation side. Like you I find Topic 8 'so vanilla' I yawn at the thought of reading yet another T8 RAP... :-( My ideal topic choice personally would be T16, (but as I did quite well when I did a marketing course many years ago I might also have been tempted to give T18 a whirl) otherwise the one Topic that seems to deliver the best grades currently is T17. Have a bit more of a think about T1 evaluation but if this is going to prove difficult take a look at the T 17 forum. I have been talking students through the approach to this and although if I am totally honest although at first sight Corporate Governance isn't exactly the most dynamic and exciting subject if you chose the right company it could be. I would definitely go for one of the banks* and play devil's advocate and tear their CG reports to shreds. But that's me I hate to be conventional in spite of the impression I may give as Forum Moderator! :-D *my hardest part would be finding the worst offender!!!

Hahahahaa! You have just made my day. We seem to have a LOT in common. I am planning to do a masters in forensic accounting too and hope to do a PHD in a related subject matter. Anyway, thank you so much for this. Was thinking of saving the banks for my masters project but seems I can get them out of my pocket for good use even now.*evil grin* Corporate Governance seems a tad boring from first sight and reminds me of my law class lectures in a way. Though its a major issue in companies in my country currently so that can be a good seller. I am also looking at topic 16 and liking it so very much. The good thing is, these topics are great for this parastatal. Yes we have a national audit report team and even reports from the highest body that govern this sector of the parastatal. Information is available on request. Since I have worked with media houses, I can get a lot of "independent" information from these people too. One of my lecturers in school is a certified fraud examiner and he has a lot of information too in corporate governance and he's always willing to share what can be shared. I have till Monday to look at all three and then will present my findings to my mentor so that we can choose one . I will look at all your forums to even get more ideas in planning and learn more. I will keep you posted.

@eller Well whatever you choose your sources sound great! You sound pretty fired up and that's good as you will probably enjoy doing your degree. Without trying to sound too patronising that's the right attitude, as that + your enthusiasm for research and the CFE on board as well (he should be able to make some constructive suggestions I would have thought with the evaluation element for any of the 3 topics under consideration)....so it all augers very well indeed.... Look forward to hearing what you decide and having updates on your progress :-)

@andyndombo You have to be a take a slightly more ‘creative’ approach with budgeting models. It probably is essential that you include a diagram that includes a feeback loop. Take a look at this (Fig 2) and you will know what I mean https://library.tmu.edu.tw/news/sample-BSC..pdf Adapt and apply this for your purpose and to your organisation (you may be able to include time scales in your version) – use a search to find someone who has done an article on the importance of feedback loops and put a bit in about how important a feedback loop is in any budgeting model! (to demonstrate understanding of the model) You may also briefly consider the different types of budgeting (zero based) and participative budgets or whatever but always bear in mind the second part of your topic title “its links with performance management and decision making” as this will form the basis of your evaluation section – and this for the most part will dictate your grade. Essentially in this respect you must not just assume that the budgetary system delivers, you need to review the process as objectively as possible perhaps suggesting areas where it isn’t effective and any improvements required. How you do this evaluation is up to you. Some students do questionnaires (but I am never a great fan of student questionnaires – if you look at the T17 forum you will see why) - but should you happen to be good at operational research and statistics in your particular case then a questionnaire would be an excellent evaluative tool for you to use of course as you will know what you are doing and understand the research protocols involved. I can only generalise because it depends what the organisation does. However I would suggest that you review how well variance reporting is acted on and how effective management reports are in this respect (perhaps looking at trends to see if the variances / costs reduce or increase) and whether there is evidence that better decisions are being made as a consequence of the budgeting (make or buy decisions or whether to discontinue an operation for example). Can you demonstrate that there is a definite relationship between variance reporting and increases in profit that is correlated and can be linked to the budget process? It doesn't matter if your organisation isn't using budgeting effectively - what counts is your evaluation of it and your subsequent conclusions and recommendations. Just for good measure on the subject of models throw in a SWOT or PESTLE as one RAP I reviewed that I thought was worth a B was actually failed and the marker told them to do a SWOT…. I was gobsmacked… but there you are - ever since I’ve told students to chuck one in just to keep the marker happy!

Hi guys I am doing my RAP using topic 1 budgetary control system, so can any one help me whether it can be done with UN agencies. I currently work with UNHCR and wanted to make it as my subject organization. Thank you

@muhdin Yes, it can be done on UN agencies subject to information availability and confidentiality related issues with it. As you work there so these problem can be catered. Please read below: “An analysis and evaluation of an organization’s budgetary control system and?its links with performance management and decision making” The Topic and its Significance: This Topic focus on four key issues: Analysis of budgetary control system of an organization. Evaluation of budgetary control system of an organization. Link of an organization’s budgetary control system with performance management. Link of an organization’s budgetary control system with?decision making. A budgetary control system is a method of monitoring and controlling income and expenditure, and for managing the demands of cash and to minimizing?borrowings. It can be applied in a business context or by an individual in relation to his or her personal finances. The subject of this topic is focused on budgetary control system and its impact and relationship with performance management and decision making of a company. This is a very topical issue of current business world due to new concepts such as Beyond Budgeting. In this topic you will be?analyzing?and evaluating the budgetary control system of your chosen company through use of knowledge you have gained in ACCA papers F2, F5, P1, P3 & P5 but other papers knowledge and knowledge provided by?THE MENTORS NETWORK – TMN?will also be valuable. Evaluation and analysis will be depending on the control system designed by the company and the framework used for its budgetary control purpose such as Zero Based Budgeting (ZBB) etc. You will also be analyzing and evaluating the implication, affect and relationship of company’s budgetary control system with its performance management system & policies and decision making phenomenon. In the topic, budgetary control system is a specific term however, performance management and decision making are very general terms. Should I choose this Topic? Decision of selection will be based on three things: Topic itself Organization Availability of Information Topic: Topic itself is suitable for a student who has a strong grip on ACCA Papers F2, F5 & P5. He/she must possess a reasonable knowledge of budgetary control system in general, of the organization as well. Secondly, student must be aware of organization’s performance management system, policies and its decision making policies and practices. ?This topic requires your own interest as well, so consider that factor carefully. Organization: Knowing your organization is important because topic 1 is different and the subject of the topic is very specific to the organization that you will be selecting. Budgetary?control system will be different for each organization as it will be designed based on the specification of that organization. Hence, you must have a clear and sound knowledge of that company’s budgetary control system, performance management system and decision making?mechanism. It would be difficult to choose an organization for this topic for which you have no access to its primary information sources. It is highly recommended to only select this topic if and only if, the company is the one in which you are employed or you have access to its all internal and external and primary and secondary information mostly, budgetary, performance management, performance measurement, decision making process and their policies, procedures and financial information regarding these matters. Information?availability: Information availability is a challenge?for this topic as the topic is very specific to the organization. Most of the information you will need would be internal. Information will only be available for this topic, if you have authority to access internal information of the company and there are no confidentiality issues for the use of required information for your RAP. As you have to write 7,500 words on this topic, large amount of data will be required for the thesis, Hence, you should have large amount of information?available on the?budgetary, performance management and decision making system of your company. The topic can be?summarized?as: “Choose if you are confident that information?availability?will be not an issue, while keeping in mind the confidentiality issue.” Regards, Hammad Ahmed Qureshi - OBU Registered Mentor.

Hey guys i choose this topic and i am doing retail company which i am also employed with this company that means information i will be able to get it. Basically i need assistance on how i can do it as in guidelines. Thank you for you assistance.

@ jacob1990 - Sorry your query is rather vague - you will need to be more specific in asking questions! Some general advice First read the Information Pack and then look at our forum on RAP objectives, aims and research questions: https://opentuition.com/topic/the-difference-between-ob-acca-bsc-rap-research-objectives-questions/ You will have to have a listed mentor in order to certify your work. Ensure with this topic you get a good one as Topic 1 does not have a particularly high pass rate. This is mainly because students write everything they know about budgeting, do not really analyse the budgeting process in their chosen organisation and then conclude on the basis of flimsy evidence / little or no proof that the budgetary process is functioning well. Instead you will need to follow the budgetary process from start to finish in your organisation and most importantly look at how effective the feedback and variance analysis is acted upon to be able to make any real conclusions. You will also need a letter of authorisation from your employer permitting you to use internal information.

Thanks boss my question was a bit vague sorry for that. I am now on part 3 and my issue is how i can start it. I facing challenges on how best i can do it such as applying the models, do i state the objective and answer it. If you can just guide me on how best i can write my part 3 (Your post has been edited - Sorry it is against our forum rules to allow any sharing of actual work as it is against the OBU student regulations and could result in a referral to the Academic Conduct Office for ALL parties involved. So PLEASE DO NOT ASK OTHER STUDENTS TO EMAIL THEIR WORK -Trephena).

Can I have anyone from this forum who passed topic 1. I am intending to submit a project on topic 1 and I need guidance on how to tackle the topic.

This can be a difficult topic to pass according to my marker contact unless you have access to the company's budget information and variance reports and can do a good analysis of them. (I always advise that where you do not have direct access to primary data or up to date company info then you should attempt Topic 17 as the information is more readily available ...and T17 has a much higher pass rate than T1). We already have a forum topic for T1 so I will merge your post with that as if you still want to do T1 as you may find some of the posts on it useful.

Thanks for the quick response. Of course I have direct access to the organization's information like the budgets and variance but what I mainly wanted was how to go about with the analysis and evaluation.

Hi Everyone, I am thinking of doing Topic 1 for the RAP, however I am a bit confused as to how to approach it. I work as a management accountant and have access to all the information needed, but is that enough, how do I choose a benchmark for my research and do I need to chose one for this topic as it is all internal information.Also preparing the management accounts it is mostly internal reporting and so managers are not so interested when the numbers are good but I cannot say in the report ''well our numbers are always good so no actions are taken at all''. Also the company I work for is part of a bigger entity and we are just the cost side of the hole entity meaning we do not budget or forecast sales as all our sales are internal. Will it be appropriate to talk about the overall strategy and how our budget links that strategy and how it support it through meeting our target which is effectively part of the our performance management and decision making as well. I will really appreciate any advice as I am a bit confused how should structure the analysis.

Apologies for the delay in responding. This topic is normally badly done because students do not have access to good, reliable and appropriate data, however if you work as a management accountant and your company is willing to allow you to use this then this should resolve that issue. The other thing required is that you need to have some idea of the overall business objectives and how your entity's budget links into it, so you seem to be OK on that front too. Consult the Info Pack for some guidance on structure. Keep Part 1 brief but in Part 2 you should look at the theory side of budgeting and you will see that it serves multi-purposes. (You may be able to bring in some aspects of how this applies to your entity in Part 3 the main analysis and evaluation section see below). It is a good idea if you can set out the stages of your company's budgetary process diagrammatically in Part 2 too. Take a look at Google Scholar and you may find some interesting articles and papers to give you some ideas and to help with Part 2 (look for links on the right to pdf documents as many articles on google scholar without these require a subscription). You might find this article useful in giving you some ideas for example: https://s3.amazonaws.com/academia.edu.documents/35820400/1987_SIMONS.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1494192258&Signature=NZDzv83gohVBD0UKA5UcscdazSU%3D&response-content-disposition=inline%3B%20filename%3DACCOUNTING_CONTROL_SYSTEMS_AND_BUSINESS.pdf Although quite an old study if you scroll down to about half way through 363 (the earlier part relates to a very academic study!) you will see 10 factors which can be used to help you rate your company and see also the questionnaire in the appendix at the end. In Part 3 you could examine the results for the last year or so (probably on a quarterly or maybe monthly basis) and perhaps you could use graphs for some of these (actual plotted against budgeted). I also suggest that you bring in some variance analysis on key areas - as you have to show some 'original analysis' in your work - I understand this might be difficult if the numbers 'are always good'. However you could turn this on its head e.g. is there any scope in suggesting that perhaps the budgets are not challenging enough and therefore do not motivate sufficiently (relating back to some of the theory)? If you feel really brave and understand operational research and statistics you could use the questionnaire from Simons to help you design your own questionnaire to use in your organisation to establish how some of the budgetary aspects and factors are perceived. Finally you will need to evaluate how effective the budgetary process in your company is and how it makes for improved decision making, demonstrating how it all fits into the overall company strategy. (You can conclude that it is ineffective and does not contribute to achieving company objectives provided you provide supporting evidence either way).

awesome

While every mentor have experience helping students with topic 8 and there is alot of helpful articles relating to topic 8. In my first meeting with my mentor he suggested that i should look for topics which are interesting to me. So i selected topic 1 and 10, I have worked in a multi national telecom industry and have a alot of friends in it hence access to all the information that i will require. I decided to go with topic 1 as my OBU research project but while researching and reading around i came across https://opentuition.com/topic/topic-1-guide-and-pointers/ this page. After reading all the comments there and realizing that this topic is very hard and with low passing percentage, i am deciding to just go with the boring topic 8 and get done with my OBU. Please advise if i should stick with topic 1 or switch to topic 8. Considering there won't be any shortage of information in topic 1.

Well done to you in attempting to choose an interesting topic and company for your RAP. However I would suggest that you possibly abandon Topic 1 as you really need to have good access to primary data to be able to do this well (and the same applies to Topic 10). If you can get this (i.e. you need up to date budget data and costing information including variance reports) then fine but trying to do either of these with just secondary data is almost impossible. As for Topic 8 - I wish OBU would scrap it completely as the only reason so many students end up doing it, is because for most mentors it is the easy option for them and they have no concern that it is boring for both the student and apparently for the markers too! I fear the pass rate for P35 for Topic 8 is really going to plummet as the sectors are fairly difficult to do a good RAP on (I would be hard pressed myself!) and most students are going to end up both disappointed and disillusioned, so perhaps for P36 many may be forced to reconsider their choice (and review in whose interest the mentor is really operating). Personally I would go for Topic 17 - the new idea of examining scandals and failures in CG really appeals to me as there is scope to do some good research and produce an interesting report around a particular company (most of the banks have skeletons in their cupboards so some comparisons can be made with each other for example) and although banking regulation has been tightened, few improvements within the banks themselves seem to have been made in reality. Just on the basis of these 2 articles you can see some of the issues still believed to be prevalent at HSBC (cited just as an example - it is not the only bank flouting ethical principles and failing to implement best practice): https://www.telegraph.co.uk/business/2017/02/21/hsbc-profits-slump-volatile-year/ https://www.theguardian.com/business/2016/jul/11/hsbc-us-money-laundering-george-osborne-report Topic 20 can also be interesting if you choose the right company and also the same applies to Topic 18. In fact there are many very suitable alternatives to Topic 8 which offer the student the chance to achieve a high grade (something that few Topic 8s manage). Alternatively if you understand operational research you could consider Topic 6 on Motivation. However you really need to gain a good appreciation of motivation theories first and be able to draw up a sensible questionnaire and sample. It is one of those topics that if the survey is poor it will fail. However on the plus side if you understand statistics, it is relatively easy (the issue being that most students don't!). I think the better Topics 6 also consider some modern aspects of motivation such as work-life balance, flexible working arrangements and job related stress and bringing in these approaches too can lead to A or B grades. If you have a mentor in Pakistan they will almost all inevitably direct you towards Topic 8 however if you have a UK mentor or one in Singapore or Malaysia they will respect and cater better to your choice of a different topic. The key to success is interest + information - you need both to do well - Good luck! :-D

Topic 8 is not all boring, it can be made interesting if you want. I learnt quite few things by conducting this topic, like KPI's of airlines, how they work, how they manage, and even politics behind rivals. New industries are also very interesting, if you skip old bookish approach and dive deep into the reasons behind the performance, you will learn a lot, and learn that its not all about the numbers on Financial Statements, it is a key skill in assessing a company if you become a investor one day for example. How one prideful decision made by management can plummet company performance and so on. Not stopping from exploring other topics, I recommend go for that topic for which you have a lot of information and interest. Just an opinion. Regards,

... although you are right @Ehsan that with KPIs it can be a bit more interesting - the sad fact is in most student and mentor's hands it is routine and uninteresting - and the current sectors are not very inspiring either, although aerospace and defence probably is the most exciting of the lot. ....and there are topics that are more stimulating. However again you are right: it is what interests you (rather than what the mentor tries to impose on you!) that should ultimately influence your choice.

Thanks alot @trephena for taking out time to reply this detailed, i really appreciate it. Please note that i will have all the primary information required for topic 1, i am just worried about the difficulty of the topic and its passing rate. Although topic 1 is my fav subject of management accounting and i will enjoy it none the less but what i am looking for here is a high passing chance of topic. However after taking into consideration your next reply and having meeting my mentor tomorrow, if i decide not to go for topic 1.. i will probably go for topic 8 or 17, most probably topic 8. Please advice.

If you are relying on high passing chances, then choose topic on which you have good secondary information, as both T8 and T17 requires that.

The issue for most people with Topic 1 is that they do not have the primary data. So they write about the theory and all the different types of budgets whether they are relevant to the company or not and do a questionnaire allegedly asking people simple questions about how efficient the budgeting system is. The result is some sort of wishy-washy unstructured report that is not very convincing as there is no real evidence on which to form an opinion of whether the budgetary system is contributing towards achieving company objectives and improved decision making or not. What they should be doing after a bit of appropriate theory, is setting out the stages in the budgeting process in their company and looking at the feedback loops. The markers are keen to see a model and I would suggest that a SWOT model can be applied to the process by looking at the strengths that budgeting offers and the opportunities various types of budget offer in terms of expansion plans, efficiency and the disadvantages (weaknesses and threats) e.g. a time consuming process that may be entered into half-heartedly and how without budgeting resource allocation may be compromised and the best use not made of capital and cash. Then there needs to be a comparison of the budgets with the actuals and looking at how variances are dealt with (budget revisions and decisions related to the adverse variances). When this has been done you are then in a position to assess how effectively the whole thing is in terms of improved decision making and helping the organisation achieve its objectives (usually profit maximisation and operating efficiently). There is also scope to make recommendations for improvement. If you can cope with that (and reference well) then you stand a good chance of passing :-)

Dear @trephena Thank for your guidance. I have finally decided that i will go through with topic 1. How you help is easily understandable and easy to grasp. I will keep asking questions from time to time in relation to topic 1 progress.

One more Important question ! do you think i will need access to budget itself ? I can get access to variance reports and everything. Get % increase in budgets and all but the company won't allow me to look at the budget itself ?

You need to get as much information as possible about the budgeting process so that you can set out the stages in Part 2 and to be able to help in Part 3 with the evaluation of whether it is effective for decision making. Ideally you should try to find out how frequently the budgets reviewed and revised; is corrective action taken and if so how frequently? Who is involved in the process - managers or are they imposed? Is there a budget manual? Budget committee?

Dear @Trefena, I am looking to start my OBU and I have chosen T1, T11andT16. I am currently doing internship in one of UN Agency and the unit I am based in is governing the extra- badget ( funds from donors). as there are two type of budget in The UN system (Regural budget and extra budget). I was thinking to go for T1, Please would be wise to use only extra budget in my research? Do you think this is the right company to take as a case study? Thank you for your time.

Hello All, I urgently need help with the part 3 of the RAP, i am writing on topic 1 and not sure how to apply the models selected. For instance is the SWOT model to be applied on the organisation as a whole (as in topic 8) or on the organisation's budgetary control system. Really looking forward to your responses. Thank you.

This is something you should be working on with your mentor. Topic 1 is notoriously difficult to pass so although you have opened a new post you are advised to use the search facility and read all of the posts on that thread as you need a lot of reliable advice to stand a chance of passing. (And in the interests of everyone this post will be amalgamated with the original thread and once again we ask students NOT to open a thread each time they have a question when there is already an existing relevant thread) Any SWOT for this topic needs to focus on the strengths and weaknesses of the budgeting process not the strategic position of the company