Ask the examiner: advisory

Mar 01, 2019

How do you feel about the content changes that bring Advanced Performance Management (APM) to the new advisory module?

Examiner: I believe the changes were necessary and in response to the need to align Advisory to the activities firms are providing clients in their practices.  

Would you like to comment from your perspective on the changes to advisory?

Examiner: Calling out the strategic models on the Advisory Competency Statement is a candidate-friendly strategy. Candidates have struggled in the past to add meaningful discussion beyond merely repeating a model. Candidates can now see which models are in scope and there is no excuse for not applying parts of a model to an indicator. 

Topic areas 2.6 and 2.7 are a very exciting topic on mergers and acquisitions. The material is pitched at the right strategic level for FAE. The quantitative techniques involved have been taught earlier at CAP 2, so the challenge for candidates is to look at the reasons why. There is excellent guidance in the slides.

Topic 4.2: Big data is another exciting addition to advisory. Everyone hears about big data and what it means, but the syllabus team have done an excellent job in containing it to a succinct yet strategic overview. I’m sure this topic could go off on many tangents and get statistical or computer programming-heavy, but instead it provides candidates with a great jumping off point for future lessons in this area. Candidate’s careers will likely have a lot to do with big data in the future. 

The final new topic area introduced is Topic 5: Leadership and Soft-skills. I am glad this has been introduced at FAE. Chartered Accountants are expected to be leaders in their chosen role, so I am pleased that we are arming candidates with a wide variety of tools and concepts to give them a good grounding in leadership. The material is extremely practical and will serve candidates in their careers. 

Candidates may be apprehensive approaching these new topic areas. Any advice for tackling this new material?

Examiner: Apprehension is understandable and I empathise with all candidates. But, as written by the Exam and Syllabus Development Executive before, a methodical, regular approach to study is required for success at advisory. For example, candidates should go through each of the strategic models. The starting point for answering indicators is complete familiarity with the model. The indicator may lean towards one or more parts of a model so this is where practice will allow candidates to tailor the model to their required answer. 

A lot of the mergers and acquisitions material has been covered at CAP 2, so candidates should be familiar with the concepts. Candidates should be reading the Financial Times at least once a week; a lot of strategy is revealed in reporting on companies’ reasons for merging or acquiring. 

In big data, candidates should keep an open mind. This topic is similar to the concept of management accounting in so far they are both creating the conditions for future success. Using data as a means of developing future strategies is no different from using budgetary control to shape better future controlled outcomes. 

In leadership, candidates should try to understand the styles and techniques taught. A practical way to get to grips with them is to see if candidates can identify these behaviours in their colleagues and superiors. The more candidates can link this topic to relevant examples in their own workplace, the better the answers will be for indicators aimed at simulating real environments.

What do you see as the key lesson for advisory candidates?

Examiner: The key lesson in advisory is for candidates to simply add value to their responses. Merely regurgitating passages from their materials won’t do. It won’t work with their clients and it won’t work in their responses. 

Any advice proffered will have to be tailored to the specific facts of that situation. It is no different in the candidate’s advisory exam. If anything, we are preparing candidates for this value-adding mindset from the get-go.