F1/FAB Accountant in Business December 2011
General Comments The December 2011 examination was the first to be examined under the new syllabus and included questions on topics such as money laundering, micro-economics and business ethics that were previously not examinable. Understandably, there was a much wider divergence in performance across the 50 questions that in previous examination sessions. However, this was not entirely due to new material appearing in the syllabus and the examination. Candidates generally dealt with questions on ethics very well, except for a scenario question on conflict of interest, which had a pass rate of 34%. By contrast, a scenario asking candidates what actions an individual should take when she discovers that her manager is acting inappropriately had a pass rate of 78%. There was one question on micro-economics and one question on money laundering, and most candidates struggled with these. Of the topics that carry over from F1, there was a very mixed performance. Most candidates answered questions on Tuckman’s theory, organisational structure, training and performance appraisal successfully. Surprisingly, a relatively straightforward question on budgetary control caused difficulties (see below), as did questions on Elton Mayo’s Hawthorne experiments, communications, Mendelow’s stakeholder grid, organisational culture and leadership, However, it cannot be concluded that candidates find theories more difficult across the board, as there were strong performances on other theoretical questions. Candidates performed slightly better on scenario-based questions than shorter questions. However, there is evidence that spending longer on the former may affect the ability of candidates to complete all 50 questions, as a significant number of candidates did not answer all of the questions on the paper. SAMPLE QUESTIONS FOR DISCUSSION Question 22 required knowledge of the budgetary control process: VTP Company has introduced a new budgetary control system. Managers have been asked to prepare budgets for their areas of responsibility and have agreed these formally with senior executives. What is the next stage of the process? A Reviewing outcomes in order to plan for the next period B Measurement of actual business outcomes C Analysis of variances between actual and budgeted performance D Agreement on action to be taken on significant variances The correct answer is B. The distractors are all key stages of the budgetary process, which starts with setting objectives and moves through a sequence of preparation, action and review. Having prepared budgets for each area of responsibility, managers have to measure the outcomes in order for proper analysis and review to take place. It is not possible to analyse variances until actual outcomes are known, nor is it possible to review the outcomes and plan appropriate actions. Only 24% of candidates selected the correct answer.
Examiner’s report – F1/FAB December 2011
Question 25 was a scenario question that asked candidates to apply their knowledge macro-economic policy to identify the most appropriate policy to achieve long-term objectives: A recent report commissioned by the government of Arkana has concluded that the national birth rate has fallen from an average of 2·1 children per household to 1·7 children per household. This decline is expected to continue, as families face a period of prolonged financial pressure. The report also found that the life expectancy of the citizens of Arkana has increased from an average of 74 years to 79 years. Again, this trend is expected to continue as citizens choose healthier lifestyles. Numerous policy measures have been proposed by ministers to reduce the long-term pressure on national finances. Which of the following measures is most appropriate in order to achieve this objective? A A reduction in income tax rates and an increase in personal tax-free allowances B The provision of...