With the ICAEW Scour Case Study exam paper published last week, we are pleased to see that the areas we covered in our progressive ACA Case Study Mock Exams were largely reflected in the live exam.
If you did your Case Study preparation with us, you should have been quietly confident but naturally a little nervous when you saw the requirements in Exhibit 14. You still had a job to do in the 4 hours, but you had covered all of the elements in the 4 Scour Mock Exams and the Additional Exercises:
- For Requirement 1, you commented on Scour’s Income Statement performance to Operating Profit and the performance of the 2 revenue streams in three of the mock exams, and cash flow in Mock Exam 3
- For Requirement 2, you evaluated a new supply agreement with Violetta in Mock Exam 4
- For Requirement 3, you evaluated a new franchisee that threatened to encroach on other territories in Mock Exam 4, and one with multiple territories in Additional Exercise 3.
As ever, the requirements in the ICAEW exam will not have mirrored those in any of the mock exams; in fact, Requirements 2 and 3 were reversed. However, you will have practised preparing your financial appendices and identifying your discussion points from the Exam Paper exhibits and the Advance Information for the specific topics, so that you should have been comfortable with your exam technique and ready to focus on your target skills assessment boxes.
As an ICAEW Partner in Learning, we are asked to provide feedback on the exam to ICAEW and you can read through these below.
Neil’s comments on the exam to ICAEW
At one level Requirement 1 was a conventional analysis of the Scour 2020 Income Statement down to Operating Profit for the whole business, and an analysis of revenue, cost of sales and Gross Profit for the two business streams. However, the requirement asked for “brief comments summarising the performance of the business as a whole”, and candidates had to decide whether to include a review of cash flow as well as there was no “twist”. The lack of “twist” should have reduced their decision making, simplified their Appendix 1, and minimised the risk of running over time, but weaker candidates may have spent time looking for a “traditional twist”.
In Requirement 2 candidates were asked to evaluate two proposals, from Thom and Violetta, for the supply of cleaning products. The calculation of cost of supply for each was straight forward, except that candidates had to decide on the gross value (before discounts) of the Violetta contract. One assumption is that the value is 40/70 of the projected value of Thom, as Violetta is only supplying 40 instead of 70 products. However, this means that the net value of contract is well below the minimum contract value of £2.0m, which may have resulted in weaker candidates questioning their calculation; stronger candidates will have covered this in their discussion. As the “next logical step”, candidates could have calculated the cost if the 15% efficiency is not achieved. The assumptions for discussion were basis for calculating the Violetta contract value, the Owned Operations and Franchised Operations purchases growth rates, and 15% forecast efficiency. The discussion covered the key contract terms set out in Exhibit 17a and possible ethical issues were the claims about eco-friendliness and false economies. This was a straight-forward requirement, with only the gross value of the Violetta contract a possible concern for candidates in terms of decision making.
Requirement 3 was the evaluation of the financial, operational and strategic issues (including business trust and ethical issues) relating to a new franchisee in Leicester, a strategic opportunity identified in the Advance Information. Appendix 3 only required the calculation of the Gross Profit on set-up and after continuing obligation costs. The lack of cleaning product purchases and sales may have created doubt in weaker candidates but, with the known mark-up of 20%, stronger candidates will have covered this in their discussion. Otherwise, there was nothing in the content that should have caused candidates concern, as the issues of multiple franchise areas and possible encroachment on another franchisee’s territory were identified in the Advance Information.
Overall, the content of the exam requirements was clear and not unexpected. There was detailed guidance to candidates on how to structure their answers to all three requirements. Those that had prepared well, and made use of all the information provided in the Exam Paper in their discussions, should have found this Case Study well within their capabilities.
So, what is next for you as a student? What should you be doing?
There is nothing you can do right now, except hope for the best and plan for the worst. With November Case Study Advance Information published on 22 September, and the Scour Case Study results not available until 2 October, if you are unsuccessful in your Scour attempt, you will need to take swift action. This starts with understanding what went wrong.
1. Send your Marks Feedback from ICAEW to us
The examiners say this document is "worth its weight in gold", and we agree. It will help show you where you are going wrong, giving you a starting point for your next phase of revision. It will be available on your ICAEW Training File; send yours to us immediately through our Scour Review Toolkit and we'll interpret it for you free of charge.
2. Complete our Scour Self Analysis Questionnaire.
We will use the Scour marking key to create a Scour Self Analysis Questionnaire. Use this checklist to see where you struggled or might have missed out on marks. Self-analysis can be hard, and it is important to be honest - if you ticked 'good enough' for everything then you don't understand what the examiners are looking for.
3. Decide whether you are resitting in November
We know that this will be a tough decision, preparing for the Case Study exam in 6 weeks is enough of a challenge – and now you only have 4 weeks.
The thing is – you can get a lot accomplished in 4 weeks with the correct planning, processes and support.
We have a tailored 4 week programme for the November Case Study exam, built for students that need to resit following the Scour exam. This fast track tuition programme includes the modules you need to help you understand where you dropped marks and how to push forward with your exam technique. You will be given 4 Mock Exams to help develop your technique and 2 of these Mock Exams will be marked to ICAEW to provide you with the feedback you need to gain the target boxes and that coveted ACA status.