“We’re half way there, Livin’ on a prayer...”

These classic Bon Jovi lyrics should provide pause for thoughtas candidates assess their progress through their FAE studies.

Candidates should now be ramping up their study efforts in preparation for the FAE examinations in August. However, it might be useful for candidates to take stock of where they are at this point in their studies.

It’s just over four months since candidates attempted the AAFRP and last month, candidates attempted the Interim Assessments for their chosen electives. Candidates are reminded that they shouldn’t adopt a silo approach to learning – in other words, candidates shouldn’t discard the knowledge acquired from the AAFRP or their chosen elective. The skills acquired in AAFRP will be required in answering the financial reporting indicators at FAE Core. Similarly, the topics examined at the Interim Assessment remain valid and examinable for the August examinations.

There’s nearly four months left to the exams themselves, or 16 weeks from 1 May to 20 August. Candidates may find it easier to break their study plan into weekly segments to allow for coverage and revision of material and most importantly, exam question practice. 

To help candidates frame their studies, we asked each examiner at FAE level to share their insights and observations from correcting previous papers. Although examiners have marked thousands of scripts, the same issues arise repeatedly. By sharing these insights with candidates at this point in the study cycle, candidates can use these insights to frame their study approach and develop a more robust exam technique.
But remember: there is no shortcut. FAE success comes from effective preparation. The insights provided below have been collated on a paper-by-paper basis, but the advice is relevant across all papers.

Core Comprehensive and Core Simulations

The following observations are relevant to both papers. 

Read twice and answer what is asked: errors due to misreading a sentence often send candidates on time-consuming tangents addressing something that hasn’t been asked.

Focus on the ask, not the indicator type: candidates spend a lot of energy trying to second guess which category of the super six the indicator belongs to. Starting to plan out the answer would be a better use of time. 

Allocate a number of minutes to each indicator and stick to it: credit is earned at a faster pace during the first few minutes of addressing an indicator (it is usually easier and quicker to get from NC to BC than from BC to C). A four-hour paper examining eight indicators would allow candidates 30 minutes per indicator. Move on if you’ve spent the allocated time on a specific indicator and leave space to return, but only if there’s surplus time after all indicators have been addressed.

Show your plan and rough work: quite often, credit is awarded for notes made in the rough work. This can be particularly beneficial if you’re forced to rush through part of your script. The markers always read all the rough work pages.

Crossing out: if you’ve spent time writing something and want to start again, one simple line through the original draft is sufficient. The examiner will know that you want to redraft, but will read what is crossed out anyway and will award credit if there is anything of substance, provided it can be read. There’s no negative marking, so hide nothing.

Quality over quantity: a few short, factual paragraphs are far more beneficial than pages of waffle. Some candidates write long introductions to indicators, but this doesn’t score any credit and reduces the opportunity to score. This typically comes from candidates who haven’t practised enough under exam conditions. Repeated practice under exam conditions will help you develop the salient facts.

Executive summaries: this is where candidates can get themselves into timing difficulties right from the off. An executive summary can be useful to highlight findings and show recommendations. However, brevity is key. An executive summary that’s longer than half a page is a waste of valuable time. There’s no benefit in writing about what you plan to do in the coming sections.

Recommendations: give them, but give them clearly. Don’t waste time addressing an indicator and then offering several alternatives, as this shows that you’re not confident in your answer. If a recommendation is wrong, it’s no worse than giving none (or several). Remember, there’s no negative marking.

Don’t rewrite the question: candidates often write half a page telling the examiner what has been asked in the exam paper as a means of introducing their answer. This is demonstrative of poor technique, which can be eliminated through repeated question practice under exam conditions.

Bullet paragraphs: if time is running out, resort to bullet paragraphs (not bullet points). A clear sentence of a dozen or so words can often give the examiners what they’re looking for.

Second guessing: examiners aren’t trying to catch you out, so don’t try to second guess what the examiner wants. The indicators will be clearly laid out and there’s no hidden agenda.

Advanced Auditing and Assurance

Read the requirements: candidates don’t read the question being asked. They instead answer what they wish they were asked! For example, you might be asked to specifically address the how you would assess the integrity of a new client under ISQC 1. However, there’s a tendency to then provide an answer that incorporates other areas of ISQC 1, which wasn’t required.

Follow-up on all parts of the requirement: candidates have a tendency to answer the first part of a requirement, but not deal adequately with other parts of the requirement. For example, identify audit risk and provide an explanation of how each of these audit risks should be tested.

Stating the obvious: candidates can be afraid to state the obvious. For example, sometimes the testing required is to “tot the listing, discuss with client, etc.”

Linking: linking every point made back to the case study is vital, particularly for questions relating to audit risks, audit opinions and so on.

Advanced Performance Measurement

The subtlety of the requirements: take extra care to read the requirements in their entirety. Candidates who only focus on key words in the indicator may miss the subtlety of the setting of the requirement. Brexit is highly topical, but it has been asked in two distinctly different ways in the last two APM examinations.

Use of boilerplate: the examiner at APM has no tolerance for generic points made by candidates. Every point made by a candidate should have some relevance to the facts of the case and indicator being examined.

Adopting the templates for appraisal-type questions: the examiner has written extensively about using the standard template for answering investment appraisal-type indicators. 

Advanced Taxation ROI

The basics: candidates should ensure that their computations include the basics. For example, you should always include the annual exemption of €1,270 and indexation in a capital gains tax computation, if they are appropriate to the facts of the case. Similarly, you should include the €3,000 small gift exemption from capital acquisitions tax, if it is available given the facts of the simulation.

Apply the conditions: if considering the availability of reliefs, always apply the conditions of the relief to the facts of the simulation. Candidates often waste vital time transcribing chunks of text that isn’t relevant. For example, there’s no point discussing the fact that retirement relief can apply to the sale of a sole trade business if the case presented surrounds the transfer of shares.

Always consider all tax heads for a transaction: in a gift situation, candidates will generally consider capital gains tax and capital acquisitions tax. Unfortunately, the stamp duty and VAT position may be overlooked. It’s not possible to achieve competency in this paper if you cannot advise adequately of all taxes that arise from a transaction.

Read each indicator carefully: if an indicator requires you to offer advice in the simulation – in relation to the timing of a transaction, for example – it will be essential to give clear advice in order to achieve competence in the indicator.

Advanced Taxation NI

Generic responses: it has been said before, but candidates often provide quite generic responses to indicators without providing clear advice and recommendations specific to the facts in the question.

Copy and paste: some candidates appear to have a tendency to copy extracts from textbooks in their responses (or, in some cases, to copy past paper solutions). This will be awarded limited credit because at FAE Advanced Taxation NI, more credit is awarded for applying the legislation to the specific case and identifying solutions and planning points where appropriate.