FAE 2011 Where to begin

SL10

Im gonna bring in stuff that I have gone through and tabbed- probably my FR and SFMA folder from last year, tax books and then the ISA book & the combined code

Perkina3

I am bringing in everythin cuz haven't managed to sift through it and find out whats crap and whats not... Haven't used most of it in my questions to date so.. dunno like

Tis an awful lot to bring in though

Coldplayer

Anyone got the solution to last years mock?

Dell2009

I apologise if this seems like a stupid question but roughly how many indicators will/should appear in tomorrows Comprehensive case study?

SL10

Dell2009 wrote: »

I apologise if this seems like a stupid question but roughly how many indicators will/should appear in tomorrows Comprehensive case study?

I think about 8 or 9

Nom-IzZ

How did everyone get on today?

I thought the paper was very vague on the indicators and in particular what form was needed.

The indicators I can remember that I done are

1) Audit risk - going concern,audit commitee,asset valuations
2)Financial system - what they needed, bit about feasabitilty and benefits of the new system
3) Strenghts and Opportunties and growth fairly straight forward.
4)Cash or shares - few points on each - thought better to take cash
5)implications of selling co. didnt do anything on this
6)Note on first day of work? no idea what this was about??
7)Marketing - logo attributes? no idea what the were looking for, went on about product quality etc

Do you have to get competent in each indicator to pass?

daddydick

Thought it was pretty straight-forward and a very well written case so fair play to the Institute for that.

Had to get out for one to be home in time for Home and Away so rushed through the indicators. Nothing too difficult and the indicators were fairly easy to find.

I havnt been to any lectures and havnt looked at a case study before but found it to be just fine to be honest. Plenty of strategy, human resource, corporate governance etc it it. Another 2 months of study and should be fine for the finals.

Zero tax today though so expect 2/3 indicators tomorrow in the simulations.

Rickyroma

Nom-IzZ wrote: »

How did everyone get on today?

I thought the paper was very vague on the indicators and in particular what form was needed.

The indicators I can remember that I done are

1) Audit risk - going concern,audit commitee,asset valuations
2)Financial system - what they needed, bit about feasabitilty and benefits of the new system
3) Strenghts and Opportunties and growth fairly straight forward.
4)Cash or shares - few points on each - thought better to take cash
5)implications of selling co. didnt do anything on this
6)Note on first day of work? no idea what this was about??
7)Marketing - logo attributes? no idea what the were looking for, went on about product quality etc

Do you have to get competent in each indicator to pass?

Nope - you cannot fail FAEs on the basis of one indicator so you can actually miss an entire indicator and still pass.

Would be interested in how many indicators people thought there were.

I found the following -

1) Finance - Evaluation of the 2 offers - cash and shares

2) Perf Mgmt - Accounting System - why and how (some bleed in from IMP introduction and change mgmt required?)

3) Bus Leadership - Corp Govance r'quments for listing on Stock Exchange

4) Bus Leadership - Marketing advice re logo and promotion plan


5) Perf Mgmt - Accounting entries for GFL transaction

6) Bus Leadership - Strategy SWOT analysis

7) Audit - Risks


Thought there might be one more Perf Mgmt - on page 7 it looked like potentially we might need to discuss Standard Costing system and maybe a review of current structure re divisionalisation.

We seemed to be steered very clearly away from tackling Tax at all and there was no IMP that I could see.

What am I missing or what did people have differently?

kitten_k

It was ok. I am the same as daddydick I didn't do any study prior to the exam. I don't think I have passed but feel with some study the main exams will hopefully be ok.

I only seen 5 indicators though:

-the new accounts system
-the strengths, weaknesses and growth potential
-audit risks
-the purchase of GFL
-the new logo

Naoise123

Hi guys- do you know when they will put up the solution to today's mock papers- anybody know how soon they went up last year etc? Thanks

ManwitaPlan

Answered as follows:

1. Accounting system-weaknesses, standard costing and variances, noticed the general and admin overheads were not allocated so suggested ABC system. Wider range of KPI's (currently only using sales, gp, expenses)

2. Offer for GFL/Cash V shares, difficulties of listing on stock exchange

3. SWOT, brief overview of 5 year plan

4. New logo attributes/how it fits into plan/how it fits with packaging

5. Audit risks

6. Accounting implications of GFL transaction. Found this very vague and was not sure what to write

7. Corp governance issues-Audit committee, CEO becoming chairman, potential for aggressive earnings management

8. HR- Redundancies, searching for new COO, training for supplement


Found it very strange there was no tax...seems like the case was made for tax and then they just decided to leave tax out. Couldnt see IMP either although I see how that could come into the accounting system and I did mention ERP.

I find the hardest thing is too not go overboard. I feel like I have a scattergun approach and I do feel some of my indicators were pushing it.


All in all not bad but I feel these exams are deceptive and are trickier than they let on.

ahtfulal

Naoise123 wrote: »

Hi guys- do you know when they will put up the solution to today's mock papers- anybody know how soon they went up last year etc? Thanks

Took about three weeks last year if I remember correctly

ahtfulal

Anybody able to put up today's Core paper here?

hawai09

Hi Guys just trying to power through some cases before tomorrow does anyone haave the answers to these cases Ply4hire and newline I cant seen to find them anywhere. If anyone could post them Id appreciate it.

Cheers

Vaioer

Of the top of my head I had the following

Performance Measurement:
- Assessment of Managerial Performance, they were focusing on ST measures like profit, expenses sales. The new CEO mentioned that she might consider new managers, so I went on about changing the performance evaluation methods here to included some qualitative measure, KPIs etc
- Standard Costing & Variance Analysis: She mentioned putting in a standard costing system, I mentioned how that wouldn't really be appropriate for some of the divisions such as a the consultancy. Mentioned that the variance analysis could be useful for performance measurement, but that they could use flexed budget etc for areas where standard costing wasn't available

Information Systems:
- Need for a new accouting system: Bascially a load of bullet points about the benefits of a new system and how BBL would benefit from these. Also linked this to the over reliance on the spreadsheets. I thought this was basically the IMP indicator:eek:

Coporate Governance/Ethics: I dunno if I was right on this one, I mentioned this as a section in a report to Catherine, saying that yer man John had asked to prepare a report on audit risks and because of the corporate governance areas I was going to highlight it to her as well
- Role/Responsibility: If we were being employed as a Financial Analyst, why was the chairman asking me to devote 15% of my time to Internal audit?
-Corporate Code: Issues about the MD becoming the Chairman and the fact that the audit committee didn't have two independent non-execs.

Audit Risks: I said that this would form the basis of the report to John, but that I wanted to highlight them to Catherine as well.
-Poor Accounting System/Over-reliance on spreadsheet. Linked this back to the IT section, saying about the increasing risk of errors, the issues of getting info from multiple sources etc
-Lack of adequately qualified staff: 15 staff in the finance department but they still don't have the accounts ready, plus they had to second us in. Add to the fact that the company is turning over €33m and the FCs aren't qualified.
-Corporate Governance Issues: As mentioned above

Financial Reporting: This was definately my weakest section, I really didn't know where to go with this one.
- Balance sheet was wrong: Assets were understated
- Leases: It mentioned in the appendix about the firm having leases for land for the hives, I mentioned this may need to be sperately shown and the appropriate disclosures made
- Joint Venture: It mentioned that there were Joint Venture deals, but we got no more details on this. I said that we would need more information on this, may need a proportional consoldation
- Related Party transactions: Made a mention that if GFL sold goods to BBL then this may need a disclosure(we had no details as to this)
- Share Issue to Catherine: This didn't appear to be accounted for, so I put in journals for this
- Accounting for purchase of GFL: I just showed the journals for either the cash purchase or the share purchase

Strategy: Bizarrely I remember about the bee population being nearly wiped out in the last couple of years so I started throwing stuff in about this.

SWOT Analysis: I started getting lazy at this stage, though this was very sparse to be honest. On the day I could see myself going into a lot more detail here. Went with the health supplements as the area to try and grow in, fleshed it out with a few points

Logo: Complete waffle with this one, just basically went with a few things a logo should have(eye catching, suits the business, aligned with the strategy, different from competitors etc) and then related these to the business. I then threw in complete waffle about the way of promoting the new logo.

Finance: I then nearly had a separate note to myself(Peter Fox) as regards the valuation of the company and whether I should take the cash or not. I went with the cash, basically as my methods of valuing BBL was bollix. I was trying to go with an EBITDA multiple method but I didn't bring them notes, so I was just sticking figures in right left and centre.

I was panicking about not finding a tax indicator, so I mentioned about being taxed on the cash v the CG on the shares in terms of the "cash in hand" result of the transactions.

And I didn't think I wrote that much! No doubt half of it is wrong, but got it down on the page.

Finally, what a fiasco parking was. Crawling the whole way through the main grounds of the RDS, only to be directed to Simmonscourt. Nice one lads...

hawai09

Vaioer wrote: »

Of the top of my head I had the following

Performance Measurement:
- Assessment of Managerial Performance, they were focusing on ST measures like profit, expenses sales. The new CEO mentioned that she might consider new managers, so I went on about changing the performance evaluation methods here to included some qualitative measure, KPIs etc
- Standard Costing & Variance Analysis: She mentioned putting in a standard costing system, I mentioned how that wouldn't really be appropriate for some of the divisions such as a the consultancy. Mentioned that the variance analysis could be useful for performance measurement, but that they could use flexed budget etc for areas where standard costing wasn't available

Information Systems:
- Need for a new accouting system: Bascially a load of bullet points about the benefits of a new system and how BBL would benefit from these. Also linked this to the over reliance on the spreadsheets. I thought this was basically the IMP indicator:eek:

Coporate Governance/Ethics: I dunno if I was right on this one, I mentioned this as a section in a report to Catherine, saying that yer man John had asked to prepare a report on audit risks and because of the corporate governance areas I was going to highlight it to her as well
- Role/Responsibility: If we were being employed as a Financial Analyst, why was the chairman asking me to devote 15% of my time to Internal audit?
-Corporate Code: Issues about the MD becoming the Chairman and the fact that the audit committee didn't have two independent non-execs.

Audit Risks: I said that this would form the basis of the report to John, but that I wanted to highlight them to Catherine as well.
-Poor Accounting System/Over-reliance on spreadsheet. Linked this back to the IT section, saying about the increasing risk of errors, the issues of getting info from multiple sources etc
-Lack of adequately qualified staff: 15 staff in the finance department but they still don't have the accounts ready, plus they had to second us in. Add to the fact that the company is turning over €33m and the FCs aren't qualified.
-Corporate Governance Issues: As mentioned above

Financial Reporting: This was definately my weakest section, I really didn't know where to go with this one.
- Balance sheet was wrong: Assets were understated
- Leases: It mentioned in the appendix about the firm having leases for land for the hives, I mentioned this may need to be sperately shown and the appropriate disclosures made
- Joint Venture: It mentioned that there were Joint Venture deals, but we got no more details on this. I said that we would need more information on this, may need a proportional consoldation
- Related Party transactions: Made a mention that if GFL sold goods to BBL then this may need a disclosure(we had no details as to this)
- Share Issue to Catherine: This didn't appear to be accounted for, so I put in journals for this
- Accounting for purchase of GFL: I just showed the journals for either the cash purchase or the share purchase

Strategy: Bizarrely I remember about the bee population being nearly wiped out in the last couple of years so I started throwing stuff in about this.

SWOT Analysis: I started getting lazy at this stage, though this was very sparse to be honest. On the day I could see myself going into a lot more detail here. Went with the health supplements as the area to try and grow in, fleshed it out with a few points

Logo: Complete waffle with this one, just basically went with a few things a logo should have(eye catching, suits the business, aligned with the strategy, different from competitors etc) and then related these to the business. I then threw in complete waffle about the way of promoting the new logo.

Finance: I then nearly had a separate note to myself(Peter Fox) as regards the valuation of the company and whether I should take the cash or not. I went with the cash, basically as my methods of valuing BBL was bollix. I was trying to go with an EBITDA multiple method but I didn't bring them notes, so I was just sticking figures in right left and centre.

I was panicking about not finding a tax indicator, so I mentioned about being taxed on the cash v the CG on the shares in terms of the "cash in hand" result of the transactions.

And I didn't think I wrote that much! No doubt half of it is wrong, but got it down on the page.

Finally, what a fiasco parking was. Crawling the whole way through the main grounds of the RDS, only to be directed to Simmonscourt. Nice one lads...

Oh good lord agreed parking was an absolute disgrace I was there in plenty of time and was made park at the very back not a great move when people have boxes and bags that are seriously heavy to carry!!

LightningBolt

Think my indicators looked something like as follows for Catherine: I made sure not put anything down relating to Corporate Governance or Ethics as the exam script said something along the lines of being mindful of your own position and the implications.

1) PM - Whether to accept cash or shares.

I didn't bother valuing because the Heads of Agreement said that Peter and Catherine had already signed an agreement for the price to be paid...

I talked about IFRS 2 and IFRS 3 (i.e. share based payments and bus combos) and dealt with the goodwill and how to account for it.

Think inventory in GFL was valued at cost as opposed to NRV so I adjusted the goodwill for the difference.

Because I wasn't up to speed on IFRS 2 I just opted for a cash transaction and cited that it was better because for BBL as it wouldn't lead to a diluted shareholding for current owners.

2) PM - Balanced Scorecard

Talked about using this to measure performance although I was off the mark on reflection. Didn't bother doing anything on Standard Costing as I didn't have anything with me.

3) BL - SWOT/Brief outline of 5 year plan

Pretty straightforward I think.

4) Accounting System

Benefits to implementing a new system.

5) Branding/Marketing

Outlined some stuff I thought the logo should encompass and how they could build the brand up through sponsorship of health campaigns/fun runs/advertising etc.

6) Listing on Stock Exchange

Had this marked down but didn't answer as no material. Made an attempt but gave up as I was pretty tired and wanted to get out.


For the memo to John I listed the following:

1) Going concern - possibility bees may become extinct

2) Accounting system - out of date

3) Bad debts

4) Untrained staff

5) Delay in finalising draft accounts

6) Heavily emphasised the possibility of potential fraud by Catherine. Don't know why but I didn't like the way revenue increased 100% in one division within a year of her coming on board along with her desire to grow profits as much as possible. Also she was reluctant to spend on capital.

For each of the indicators I just outlined a quick synopsis of each problem bar #6 and then showed how I would mitigate these (some of them were already in the process of being mitigated such as Peter finishing off the draft accounts)

All in all a pretty fair case study and it seems to be put together quite well. No real complaints as I didn't study much bar a few days of audit. Feel a bit more comfortable having done that now. Expect to get hammered out of it on tax tomorrow!

Gametime

Would someone by any chance have a copy of the case "You look fantastic" question from the resource pack they could post up here? I've the solution but unfortunately not the question. Would really appreciate it

runnerbelly

Nom-IzZ wrote: »

How did everyone get on today?

I thought the paper was very vague on the indicators and in particular what form was needed.

The indicators I can remember that I done are

1) Audit risk - going concern,audit commitee,asset valuations
2)Financial system - what they needed, bit about feasabitilty and benefits of the new system
3) Strenghts and Opportunties and growth fairly straight forward.
4)Cash or shares - few points on each - thought better to take cash
5)implications of selling co. didnt do anything on this
6)Note on first day of work? no idea what this was about??
7)Marketing - logo attributes? no idea what the were looking for, went on about product quality etc

Do you have to get competent in each indicator to pass?

hi Nom ......could you please explain why there was a going concern issue in todays core? thanks!

Clanno

runnerbelly wrote: »

hi Nom ......could you please explain why there was a going concern issue in todays core? thanks!

Going Concern...??? but there was defo going concern on todays paper..! yea

ManwitaPlan

Clanno wrote: »

Going Concern...??? but there was defo going concern on todays paper..! yea

Yeah got going concern on Q1.

Thought it was a fair paper today...clear enough and well written.

Have a feeling I missed a few indicators and messed the tax up....financial reporting stuff was seriously lacking and I must've missed the IMP indicator because I thought that stuff was non-existent. Was a bit on the first simulation alright but did not seem enough to warrant a full indicator.

runnerbelly

so was there going concern on tuesday's core paper or not................. just wondering what i am missing if there was?!

MW2011

Where was the going concern issue in Q1 today??

Also have people heard that apparently there will be no indicators in the Appendixs?

SL10

runnerbelly wrote: »

so was there going concern on tuesday's core paper or not................. just wondering what i am missing if there was?!

I think I might have mentioned Going Concern very very briefly as part of audit risks yesterday. Think I could have mentioned it along with high bank loans but I cant really remember to be honest. It definitely didnt play a huge part in my answer.

MW2011 wrote: »

Where was the going concern issue in Q1 today??

Also have people heard that apparently there will be no indicators in the Appendixs?

Today I put going concern in along with the working capital managment/cashflow problems the company was experiencing in question 1.

I havent heard that there wont be indicators in the appendices. I have definitely been taking indicators out of the appendices in quite a few cases

runnerbelly

i think there has been indicators in appendices......... especially financial reporting ones.. i havent heard that there couldnt be...

Hackysack

I'd certainly think they could throw indicators in the appendixs. I don't see why they wouldn't.

I never specifically mentioned going concern today (dang) but I heavily implied it (i hope) when I was describing the overtrading.

All in all I thought they were fair mock papers. To be honest, I'd be very happy if something very similar to that came up in the real thing, but I'm skeptical. I've learned too much from the CAP2 mock papers to know that the real deal won't be anything like it

Blyn_87

Hackysack wrote: »

I'd certainly think they could throw indicators in the appendixs. I don't see why they wouldn't.

I never specifically mentioned going concern today (dang) but I heavily implied it (i hope) when I was describing the overtrading.

All in all I thought they were fair mock papers. To be honest, I'd be very happy if something very similar to that came up in the real thing, but I'm skeptical. I've learned too much from the CAP2 mock papers to know that the real deal won't be anything like it

I think I def failed but ya I'd still welcome something similar once I have actually done some study!! I thought I heard that the fae mocks last year were much tougher than the real exam? Was that not the case for cap2s? Are we getting false security......

Dell2009

Are the 2010 Mock Paper and solution upon the CAI website?

If not, is there any way of getting my hands on them?

SL10

Dell2009 wrote: »

Are the 2010 Mock Paper and solution upon the CAI website?

If not, is there any way of getting my hands on them?

They are attached to an email we got from the institute in the notices section

Dell2009

SL10 wrote: »

They are attached to an email we got from the institute in the notices section

Thanks, do you know the date and subject of this email, i can't seem to find it?