It's high time we knew
all about the CIMA Strategic Level Exams.
The three papers (E3, P3 and F3) all need to be taken at the same time on the first sitting, (not that I was planning otherwise).
There is a three hour written exam paper for the three exams, plus 20 minutes of pre-exam reading time, with two sections:
Section A: a maximum of four compulsory questions, totalling 50 marks all relating to pre-seen case study and new unseen case material provided in the exam.
Section B: two questions from a choice of three, based on short scenarios to which some or all questions relate, each worth 25 marks.
The pre-seen material in section A will be published online six weeks before the exam and is common to all three of the strategic level papers at each exam sitting.
That means that in case I have passed the managerial exams and will be attempting the strategic level exams in May 2011, the pre-seen material should be available by mid-April from: http://www.cimaglobal.com/Students/2010-professional-qualification/Strategic-level/Pre-seen-material/
However, pre-seen material is not directly examined and only helps build up to the unseen material in the exam. Remember, Section A of the exam only accounts for 50% of the marks. You will still have to complete two Section B questions that will be completely unseen.
This article provides information on what to do with pre-seen material in preparation for the exam:
The three papers (E3, P3 and F3) all need to be taken at the same time on the first sitting, (not that I was planning otherwise).
There is a three hour written exam paper for the three exams, plus 20 minutes of pre-exam reading time, with two sections:
Section A: a maximum of four compulsory questions, totalling 50 marks all relating to pre-seen case study and new unseen case material provided in the exam.
Section B: two questions from a choice of three, based on short scenarios to which some or all questions relate, each worth 25 marks.
The pre-seen material in section A will be published online six weeks before the exam and is common to all three of the strategic level papers at each exam sitting.
That means that in case I have passed the managerial exams and will be attempting the strategic level exams in May 2011, the pre-seen material should be available by mid-April from: http://www.cimaglobal.com/Students/2010-professional-qualification/Strategic-level/Pre-seen-material/
However, pre-seen material is not directly examined and only helps build up to the unseen material in the exam. Remember, Section A of the exam only accounts for 50% of the marks. You will still have to complete two Section B questions that will be completely unseen.
This article provides information on what to do with pre-seen material in preparation for the exam:
·
Complete a thorough
analysis of the pre-seen material.
·
Conduct a corporate
appraisal (SWOT) of the organisation, that is, a full internal and external
analysis.
·
Recognise the major
issues affecting the organisation from an E3, P3 and F3 perspective. A good appraisal
will identify potential strategic, risk and finance problems being faced by the
organisation. Pay particular attention to any numbers and what they may tell
you about the organisation’s performance and position.
·
You should avoid too
much emphasis on the research of industry information. Leave that for your T4
case study exam.
·
From your analysis, identify the related syllabus areas and
learn/review them in light of the position and problems of the organisation. This could be a springboard from which a more
detailed case can be developed in the unseen information.
·
You can now conduct
some scenario planning. Think of the different scenarios that could
appear in the unseen material and the requirements that could be asked by the
examiner. Remember that there are likely to be at least four separate requirements.
·
Practice
your approaches to answering the scenarios that you have identified.
·
Be warned, identifying
likely requirements can be a dangerous occupation. Only do it as a means to
start thinking more widely about the pre-seen material.Once in the exam room
you must focus
on the actual requirement in the question and avoid replicating an
answer to a different requirement that you might have prepared for.
·
Purchase a revision
kit from one of the big tuition providers that contain a number of mock exams (probably around six different
unseen scenarios) based upon the actual pre-seen material. Practise as many as you can to time.
Remember, the exam
questions will not directly examine the pre-seen material. The requirements
come from the unseen material in the exam paper. Although it is essential to
have a good knowledge of the pre-seen material before you enter the exam hall,
you must avoid forcing points from your pre-seen preparation into your answer
just because you have done the analysis.
Paper E3 concentrates on design, implementation and evaluation of organizational strategy in context to the external environment and stakeholders, as well as internal capabilities of the organization, including tools and techniques associated with change management.
Syllabus Structure for E3 is:
20% Interacting with the Competitive Environment
20% Change Management
30% Evaluation of Strategic Options
30% Implementation of Strategic Plans
E3 focuses on the role of the management accountant as a strategy driver, interweaving internal and external factors to produce a high quality corporate strategy. It uses contemporary thinking on the subject of management accounting and best practices for solutions, such as The Johnson and Scholes model of strategic management and Royal Dutch Shell's scenario planning in its learning system.
The examiner's article on the differences between E3 enterprise exam strategy and its predecessor, P6 provides insight to the paper, which is heavily dependent on the strategic models studied in E2, such as Porter’s generic competitive strategies – with the emphasis on the understanding of the subject and its application to the situation at hand.
So, for example, you might be asked to:
Paper E3 concentrates on design, implementation and evaluation of organizational strategy in context to the external environment and stakeholders, as well as internal capabilities of the organization, including tools and techniques associated with change management.
Syllabus Structure for E3 is:
20% Interacting with the Competitive Environment
20% Change Management
30% Evaluation of Strategic Options
30% Implementation of Strategic Plans
E3 focuses on the role of the management accountant as a strategy driver, interweaving internal and external factors to produce a high quality corporate strategy. It uses contemporary thinking on the subject of management accounting and best practices for solutions, such as The Johnson and Scholes model of strategic management and Royal Dutch Shell's scenario planning in its learning system.
The examiner's article on the differences between E3 enterprise exam strategy and its predecessor, P6 provides insight to the paper, which is heavily dependent on the strategic models studied in E2, such as Porter’s generic competitive strategies – with the emphasis on the understanding of the subject and its application to the situation at hand.
So, for example, you might be asked to:
·
Employ a model as an
analytical technique to help make a recommendation
·
Use a model’s
structure to satisfy a question’s requirement
·
Evaluate one model’s
applicability to a scenario
·
Compare one model’s
usefulness against that of another.
·
Explore the impact of
one model on another
·
Assess models’
strengths and weaknesses
Very little, if any,
credit will be given for simply describing a model. This is illustrated by the
use of high level verbs in the syllabus.
A typical question may appear as:
" Advise the partners of AA how they might best protect the strategic position of AA, using Porter’s ‘five forces’ model as a structure for your advice.
Note: You are not required to draw or explain the model itself (ten marks)."
Since the model concerned has five forces and there are ten marks allotted, this suggests that two marks are available per force. Taking the force exerted by suppliers, for example, candidates who answer with “AA must consider the bargaining power of suppliers” would receive no marks, because that constitutes a mere description.
They would score one mark if they were to write that “in a knowledge-based business such as AA, its predominant supplier is its staff”, because this relates the model to the case in question. And they would get the other mark if they were to advise AA to “improve its HRM practices and consider introducing restraint-of-trade clauses to employment contracts”, because this gives examples of how AA might protect its strategic position.
Two key issues underpin Paper P3 – what risk does the organisation face and how can those risks be managed and controlled?
The scope of the paper includes both financial and non-financial risks. The management strategies covered extend to the use of financial instruments, and more general strategies of risk identification and management, involving establishing and monitoring appropriate systems of internal control.
With the growing importance of ‘new’ sources of risk, the paper pays particular attention to risks arising from governance, ethical and social/environmental issues.
Syllabus Structure of P3
10% Management Control Systems
25% Risk and Internal Control
15% Review and Audit of Control Systems
35% Management of Financial Risk
15% Risk and Control in Information Systems
The P3 hints and tips from the examiner is a must-read article to explain the focus and scope of each part of the syllabus.
For example, management of financial risk is not simply computational questions as such questions won’t carry many marks. The emphasis will be on identifying risks and recommending appropriate responses.
The syllabus requires a knowledge of the nature and purpose of a range of financial instruments. You should be aware of the implications of issuing and/or holding such instruments. Questions will tend to focus on the practical situations in which they might be used, rather than on asking you to recall every instrument that might be used to control, say, currency risk.
Weak answers often focus too much on the selection of financial instruments, but it’s often more appropriate to consider simple ways to achieve natural hedges instead. For example, transaction risks from the sale of goods in a foreign currency might be reduced by importing materials priced in the customer’s currency. But you should note that some obvious solutions would simply pass the risk on to a third party, who may be unwilling to accept them.
The examiner's articles closes by saying that no matter what approach you have taken to studying for the paper, whether an online module, or simply working on your own through a textbook, you will need to supplement it by reading more widely.
All CIMA papers require some understanding of business, but this is particularly true of P3. The key is to developing a degree of commercial awareness is to find out what’s going on in the corporate world.
All candidates should aim to read the business press at least once a week. Consider the ways in which the firms in the news are responding to the real challenges facing them. Remember that risk management can be as much about exploiting upside risk as it is about mitigating the downside.
It should be possible to make this an interesting and enjoyable subject to study.
Paper F3 deals with designing and managing financial strategy, in the context of the organisation’s objectives within its external constraints, such as the general regulatory and investment environment.
The features and implications of the full range of major financing instruments are covered. A broad range of types of investment decision is also covered and it is recognised throughout that such decisions need to take account of broader strategic issues as well the financial analysis.
Syllabus structure of F3
25% Formulation of Financial Strategy
30% Financing Decisions
45% Investment Decisions and Project Control
The examiner's guide advises to make sure that you feel comfortable with the finance lease tax calculations shown in the specimen paper.
Although the actuarial method is probably more complex to understand and may not have been the method taught in F1, it’s probably quicker and easier to use than the sum-of-digits method. But you do need to ensure that you are confident in calculating the implied interest rate, because this will not necessarily be provided. The sum-of-digits method is also acceptable and you won’t lose any marks if you use this instead.
All or most of the learning outcomes involve high level verbs so plenty of practice will be required in applying the knowledge to different situations.
As the preamble to each syllabus states, material included in the syllabus for any of the papers at the management or operational levels may also be relevant for the purposes of assessment, so there should be no surprises.
Pre-requisite knowledge that I haven't gotten around to completely should be cleared ASAP. This includes having complete clarity of financial instruments from the managerial level and of financial leases from the operational level (the actuarial method should include arriving at the implied interest rate) .
Care should be taken with outdated question formats used for practice, especially if they are not up to the level of the current syllabus and learning outcomes and may not be as extensive due to ceilings on the marks allocated to certain parts of the syllabus, such as in F3 where questions on Section C - Investment Decisions and Project Control would not have been more than 25% but are now up to 45% of the total marks.
The way forward:
1. Complete the preliminary collection of documents to file and closely examine:
A typical question may appear as:
" Advise the partners of AA how they might best protect the strategic position of AA, using Porter’s ‘five forces’ model as a structure for your advice.
Note: You are not required to draw or explain the model itself (ten marks)."
Since the model concerned has five forces and there are ten marks allotted, this suggests that two marks are available per force. Taking the force exerted by suppliers, for example, candidates who answer with “AA must consider the bargaining power of suppliers” would receive no marks, because that constitutes a mere description.
They would score one mark if they were to write that “in a knowledge-based business such as AA, its predominant supplier is its staff”, because this relates the model to the case in question. And they would get the other mark if they were to advise AA to “improve its HRM practices and consider introducing restraint-of-trade clauses to employment contracts”, because this gives examples of how AA might protect its strategic position.
Two key issues underpin Paper P3 – what risk does the organisation face and how can those risks be managed and controlled?
The scope of the paper includes both financial and non-financial risks. The management strategies covered extend to the use of financial instruments, and more general strategies of risk identification and management, involving establishing and monitoring appropriate systems of internal control.
With the growing importance of ‘new’ sources of risk, the paper pays particular attention to risks arising from governance, ethical and social/environmental issues.
Syllabus Structure of P3
10% Management Control Systems
25% Risk and Internal Control
15% Review and Audit of Control Systems
35% Management of Financial Risk
15% Risk and Control in Information Systems
The P3 hints and tips from the examiner is a must-read article to explain the focus and scope of each part of the syllabus.
For example, management of financial risk is not simply computational questions as such questions won’t carry many marks. The emphasis will be on identifying risks and recommending appropriate responses.
The syllabus requires a knowledge of the nature and purpose of a range of financial instruments. You should be aware of the implications of issuing and/or holding such instruments. Questions will tend to focus on the practical situations in which they might be used, rather than on asking you to recall every instrument that might be used to control, say, currency risk.
Weak answers often focus too much on the selection of financial instruments, but it’s often more appropriate to consider simple ways to achieve natural hedges instead. For example, transaction risks from the sale of goods in a foreign currency might be reduced by importing materials priced in the customer’s currency. But you should note that some obvious solutions would simply pass the risk on to a third party, who may be unwilling to accept them.
The examiner's articles closes by saying that no matter what approach you have taken to studying for the paper, whether an online module, or simply working on your own through a textbook, you will need to supplement it by reading more widely.
All CIMA papers require some understanding of business, but this is particularly true of P3. The key is to developing a degree of commercial awareness is to find out what’s going on in the corporate world.
All candidates should aim to read the business press at least once a week. Consider the ways in which the firms in the news are responding to the real challenges facing them. Remember that risk management can be as much about exploiting upside risk as it is about mitigating the downside.
It should be possible to make this an interesting and enjoyable subject to study.
Paper F3 deals with designing and managing financial strategy, in the context of the organisation’s objectives within its external constraints, such as the general regulatory and investment environment.
The features and implications of the full range of major financing instruments are covered. A broad range of types of investment decision is also covered and it is recognised throughout that such decisions need to take account of broader strategic issues as well the financial analysis.
Syllabus structure of F3
25% Formulation of Financial Strategy
30% Financing Decisions
45% Investment Decisions and Project Control
The examiner's guide advises to make sure that you feel comfortable with the finance lease tax calculations shown in the specimen paper.
Although the actuarial method is probably more complex to understand and may not have been the method taught in F1, it’s probably quicker and easier to use than the sum-of-digits method. But you do need to ensure that you are confident in calculating the implied interest rate, because this will not necessarily be provided. The sum-of-digits method is also acceptable and you won’t lose any marks if you use this instead.
All or most of the learning outcomes involve high level verbs so plenty of practice will be required in applying the knowledge to different situations.
As the preamble to each syllabus states, material included in the syllabus for any of the papers at the management or operational levels may also be relevant for the purposes of assessment, so there should be no surprises.
Pre-requisite knowledge that I haven't gotten around to completely should be cleared ASAP. This includes having complete clarity of financial instruments from the managerial level and of financial leases from the operational level (the actuarial method should include arriving at the implied interest rate) .
Care should be taken with outdated question formats used for practice, especially if they are not up to the level of the current syllabus and learning outcomes and may not be as extensive due to ceilings on the marks allocated to certain parts of the syllabus, such as in F3 where questions on Section C - Investment Decisions and Project Control would not have been more than 25% but are now up to 45% of the total marks.
The way forward:
1. Complete the preliminary collection of documents to file and closely examine:
·
syllabus structure -
leads and components
·
examiner's articles -
to further develop understanding of syllabus
·
specimen papers and
answers - to understanding structure of the paper, types of questions etc.
2. Find out about the latest study materials available and have them on the shelf as soon as exam results come through positively by January 13. This will probably include:
·
CIMA revision cards
and practice kits
·
Find out about when
mock exam kits based on the pre-seen material will be available
·
CIMAstudy.com access
to strategic modules
3. Complete the
post-study collection of documents, including:
·
past papers, answers
and PEG s
·
pre-seen material from
previous digests
4. To walk in confidently for the exams and make a good attempt, I should plan my time accordingly:
·
January 01 to January
13 (2 weeks) to draw up schedules and fully understand the syllabus
·
January 13 to
end-March (12 weeks) to ensure full command of the syllabus and practice kits
·
March 31 to April 11
(12 days) to attempt specimen paper and May, November 2010 past papers (and
September if possible)
·
April 11 to end-May (3
weeks) for full understanding and analysis of pre-seen material in context of
syllabus and revision, with scenario planning for unseen material
·
May 1 to 21 (3 weeks)
for mock-ups
Of course, the study methodology needs to be a refined development over the previous attempts.
Learning methodology during the 12 week learning period should be structured as:
·
Listing of each lead
and component for each section of the syllabus and mapping to CIMAStudy.com
modules
·
Allocation of time as
per the actual weighting of the syllabus
·
Draw up a schedule to
keep track of syllabus coverage and important dates
·
Work-through and
thorough understanding of modules on CIMAStudy.com, compiling key learnings
into a separate notebook-journal or file for each chapter or group of chapters/
modules in each section of the syllabus
·
Solving end-of-module
review questions and forming a clear understanding of the model answers and
requirements
·
maintaining a revision
work-book in which key learnings, question types and answers are appended for
revision
·
Attempting practice
questions in practice kits for each section and compiling these into the
revision file. However, care should be taken in attempting out-dated questions
that may not extensively cover the material
·
On completion of each
segment of the syllabus, past paper Section B should be scanned for relevant
questions. These should be attempted and appended to the revision file.
·
Revision cards should
be referred to and annotated throughout the learning process: before, during
and after each learning
As a matter of policy:
·
All learning must be
clearly documented using easily readable text and illustrations for easy
reference at a later time as these will be 'for keeps'
·
Practice answers can
be maintained seperately and are most likely to be discarded
·
The revision workbook
will have the revision question, followed by a listing of possible requirements
(PEG-type), the first or best attempt at solving the question, and the
recommended answer script at the end of each question. Section B scripts from
the past year papers can be scanned for relevant questions and answers at the
end of each syllabus segment and appended to file, after an initial attempt is
made at solving the question.
·
Diagrams, lists etc.
can be appended to the file in a 'do and re-do' format for practice with the
actual answer available.
·
Once each learning
segment is completed, the revision cards can be referred and annotated
accordingly.
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