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ACA SKILLS DEVELOPMENT GRIDS 2016 © ICAEW 2015
ACA SKILLS DEVELOPMENT GRIDS 2016 © ICAEW 2015 CONTENTS ACA OVERVIEW ............................................................................................................................ 3 Skills progression through the ACA qualification ............................................................................. 5 Professional Level........................................................................................................................... 6 Audit and Assurance ....................................................................................................................... 6 Business Strategy ........................................................................................................................... 9 Financial Accounting and Reporting .............................................................................................. 12 Financial Management .................................................................................................................. 14 Tax Compliance ............................................................................................................................ 16 Business Planning ........................................................................................................................ 19 Advanced Level ............................................................................................................................ 24 Corporate Reporting ..................................................................................................................... 24 Strategic Business Management................................................................................................... 28 Case Study ................................................................................................................................... 32 © ICAEW 2015 2 ACA OVERVIEW The ICAEW chartered accountancy qualification, the ACA, is one of the most advanced learning and professional development programmes available. Its integrated components provide an indepth understanding across accountancy, finance and business. Combined, they help build the technical knowledge, professional skills and practical experience needed to become an ICAEW Chartered Accountant. Each component is designed to complement each other, which means that students can put theory into practice and can understand and apply what they learn to their day-to-day work. The components are: Professional development ICAEW Chartered Accountants are known for their professionalism and expertise. Professional development prepares students to successfully handle a variety of different situations that they encounter throughout their career. The ACA qualification improves students’ ability and performance in seven key areas: adding value communication consideration decision making problem solving team working technical competence. Ethics and professional scepticism Ethics is more than just knowing the rules around confidentiality, integrity, objectivity and independence. It’s about identifying ethical dilemmas, understanding the implications and behaving appropriately. We integrate ethics throughout the ACA qualification to develop students’ ethical capabilities – so they will always know how to make the right decisions and justify them. Three to five years’ practical work experience Practical work experience is done as part of a training agreement with one of our authorised training employers around the world. Students need to complete 450 days, which normally takes between three and five years. The knowledge, skills and experience they gain as part of their training agreement are invaluable, giving them the opportunity to put what they’re learning into practice. 15 accountancy, finance and business modules Each of the ACA modules is directly relevant to the work that students do on a day-to-day basis. They will gain in-depth knowledge across a broad range of topics in accountancy, finance and business. There are 15 modules over three levels. These can be taken in any order with the exception of the Case Study which has to be attempted last. Students must pass every exam (or receive credit). © ICAEW 2015 3 Certificate Level There are six modules that introduce the fundamentals of accountancy, finance and business. They each have a 1.5 hour computer-based assessment, a 55% pass mark, and can be sat at any time. Students may be eligible for credit for some modules if they have studied accounting, finance, law or business at degree level or through another professional qualification. These six modules are also available as a stand-alone certificate, the ICAEW Certificate in Finance, Accounting and Business (ICAEW CFAB). Students studying for this certificate will only complete these six modules. On successful completion, the ICAEW CFAB can be used as a stepping stone to studying the ACA qualification. Professional Level The next six modules build on the fundamentals and test students’ understanding and ability to use technical knowledge in real-life scenarios. Each module has a 2.5–3 hour exam and has a 55% pass mark. The modules can be taken in March, June, September and December, except the Business Planning alternative modules for banking and insurance which are available in June, September and December. The Professional Level modules are flexible and can be taken in any order to fit with a student’s day-to-day work. The Business Planning and Business Strategy modules in particular help students to progress to the Advanced Level. Advanced Level The Corporate Reporting and Strategic Business Management modules test students’ understanding and strategic decision making at a senior level. They present real-life scenarios, with increased complexity and implications from the Professional Level modules. The Case Study tests all the knowledge, skills and experience gained so far. It presents a complex business issue which challenges students’ ability to problem solve, identify the ethical implications and provide an effective solution. The Corporate Reporting and Strategic Business Management modules are 3.5 hours long and the Case Study is 4 hours long; each has a 50% pass mark. The Advanced Level modules can be taken in July and November. They are fully open book, so they replicate a real-life scenario where all the resources are at their fingertips. Skills development grid This document presents the skills assessed alongside technical knowledge for Professional and Advanced Level modules. The skills should be read with the syllabus and learning outcomes, and the relevant technical knowledge grid for each module. The link between work experience and the exams will be made explicit through the professional development framework and the skills development grids. Students should use the professional development framework and skills development grids to ensure success in their exams and workplace. For each skills area, there is a description of the specific skills that are assessed, and how these skills are assessed. © ICAEW 2015 4 SKILLS PROGRESSION THROUGH THE ACA QUALIFICATION Advanced Level Assessed skills Certificate Level Professional Level Corporate Reporting and Strategic Business Management Case Study Assimilating and using information Understanding the subject matter and identifying issues Specific issues Simple scenarios Complex scenarios Unstructured complex business scenarios Accessing, evaluating and managing information Information/data as provided Single information source provided Multiple information sources provided Multiple information sources including own research Structured application of integrated and non-integrated knowledge and experience Unstructured application of integrated knowledge and experience Using technical knowledge and Highly structured application of Structured application of professional experience non-integrated knowledge integrated and non-integrated knowledge Structuring problems and solutions Using analytical tools Specified tools Specified tools Tools inferred by nature of problem Unspecified tools Analysing and evaluating problems Highly specified tasks Specified integrated and nonintegrated problems Specified integrated and nonintegrated problems Defined output but unspecified problems Assessing quality of information Objective testing Specified in simple scenario Specified in complex scenario Underlying requirement within complex scenario Assessing options and priorities including ethical issues Options given Options included in simple scenario Options included in complex scenario Balanced judgement of priorities and risks in unstructured scenario Possible alternative provided Alternative(s) provided Alternatives identified using professional experience Specified conclusions and recommendations in complex scenarios Conclusions and recommendations supported by own evidence Applying judgement Considering other perspectives Not assessed Conclusions, recommendations and communication Drawing conclusions and making recommendations Not assessed Specified conclusions and recommendations in simple scenarios Presenting data and written work Prescribed exam format Exam requirements, including Short written professional some professional presentation presentations © ICAEW 2015 Professional report with appendices and executive summary 5 PROFESSIONAL LEVEL AUDIT AND ASSURANCE Assimilating and using information Assessed skills Reading and understanding subject matter. Accessing, evaluating and managing information provided in a few defined sources. Framing questions that clarify information or identify gaps in knowledge. Operating to a brief in structured situations. Explaining the nature of ethics and its significance in the business environment. Understanding the public interest and social responsibility. Understanding the importance of contributing to the profession. Appreciating the ethos and culture of the accountancy profession. Understanding the role of the professional accountant within the public interest, practice and business contexts and the regulatory structure of the profession. Understanding the importance of ethical behaviour to a professional and the reasons for the adoption of ethical codes by professions acting in the public interest. Understanding the pressures on professional ethical behaviour, including the interaction between professional ethics and the law and other value systems. How skills are assessed Questions will contain both structured and unstructured detail that candidates have to understand. Requirements will include demonstrating an understanding of: the regulatory, professional and ethical issues relevant to accepting, carrying out and managing assurance engagements; and how quality assurance processes mitigate risks. Structuring problems and solutions Assessed skills Understanding data and information given: identifying and understanding issues arising in straightforward scenarios. Using the data and information given: understanding requirements, analysing data and information to support the requirement. Drawing upon technical and professional knowledge learnt to analyse issues. Understanding the workings of, and controls within, an organisational framework. Applying knowledge from different technical areas: analysing problems that combine technical skills in a single disciplinary environment. Using new concepts: evaluating new ideas and concepts. Appreciating the ethical dimensions of situations, problems and proposals. Identifying and selecting appropriate courses of action using an ethical framework. Financial data analysis: performing the required calculations; explaining or stating the issues. Financial statement analysis: performing the required analytical process, explaining or stating the issues. Identifying and explaining the consequence of unethical behaviour. Identifying and using relevant up to date content of International and ICAEW Code of Ethics and FRC Ethical Standards. Recognising ethical issues arising from situations likely to be encountered by chartered accountants; identifying possible courses of action to resolve them. © ICAEW 2015 6 How skills are assessed Requirements will include planning assurance engagements in accordance with the terms of engagement and appropriate standards, taking account of: managing audit and other assurance engagements; reliance on controls; reliance on the work of internal audit or other experts; reliance on the work of another auditor; extent of tests of control and of substantive procedures, including analytical procedures use of analytical procedures to identify the risk of misstatement; and number, timing, staffing and location of assurance visits. Applying judgement Assessed skills Applying discrimination: identifying the relevant/reasonable in data and evidence; recognising varying quality in data or evidence. Relating parts and wholes: discerning particular issues as part of wholes. Demonstrating an understanding of different perspectives (eg social, political, economic): analysing and interpreting problems and situations from a given stance. Change management (appreciating the impacts/effects of change): considering and evaluating the effects of a given future scenario. Assessing/applying materiality: understanding the concept of materiality. Applying a sceptical and critical approach in a given straightforward situation. Appreciating when more expert help is required in a given straightforward situation. Exercising ethical judgement in a given straightforward situation. Developing arguments, having first appreciated the perspective of all other parties. Conducting critiques: critically reviewing a statement, argument or position. How skills are assessed Candidates will be required to identify significant business or audit risks from a given scenario, explain their impact on the financial statements, and finally recommend audit procedures to mitigate the risk of a material error. Requirements will test the ability of candidates to filter those issues which are more relevant than others in a given scenario. Candidates' ability to distinguish the quality of data or evidence will be tested in two potential ways. (i) Candidates will need to distinguish between data generated from within an organisation and that generated by a third party, the latter being less susceptible to management bias; and (ii) candidates will need to appreciate the effect on the quality of evidence that bias caused by specific factors can have eg, where profits are used to determine a bonus payment to be made to the company’s management. Question requirements will include the need to identify the impact of specific economic and political factors on a set of financial statements eg, in the context of dealing with customers or suppliers from overseas that (i) political instability may cause problems which prevent the customer or supplier from trading, ultimately leading to going concern issues for the audited entity; and (ii) economic factors may cause exchange rate fluctuations leading to the risk of misstated balances in the financial statements. Candidates will be expected to evaluate the effect of uncertain future events when describing the procedures to be performed in carrying out an examination of a company’s financial forecasts. © ICAEW 2015 7 Question requirements will include the need to assess the materiality of a particular matter (eg, an unadjusted error) in the context of a set of financial statements. This assessment should then inform the candidate’s judgement as to whether or not to modify the opinion given in a statutory audit report. Candidates are required to exercise ethical judgement in a variety of different scenarios, including: judging the potential independence risks involved in accepting or continuing an audit engagement, and the procedures to mitigate those risks; and consideration of the required steps upon the discovery of fraud/money laundering. Candidates are expected to display the ability to present a structured argument to a client eg, in situations where management is questioning the extent of audit work performed. Conclusions, recommendations and communication Assessed skills Using technical knowledge to support reasoning and conclusions. Decision making: using relevant quantitative approaches in decision analysis. Identifying the best explanation, solution or steps against defined criteria in a given straightforward situation. Formulating opinions, reservations, advice, recommendations, plans, solutions, options and risks including business implications in a given straightforward situation. Preparing, describing, outlining the advice, report, notes required in a given straightforward situation. Presenting a basic or routine memorandum or briefing note in writing in a clear and concise style. How skills are assessed Requirements will include: advising on the regulatory, professional and ethical issues in carrying out an assurance engagement; concluding and reporting on assurance engagements, including determining whether to a modified report with or without a modified opinion/conclusion; and identifying weaknesses in financial information systems, their potential consequences and recommendations for improvement. © ICAEW 2015 8 BUSINESS STRATEGY Assimilating and using information Assessed skills Reading and understanding subject matter. Accessing, evaluating and managing information provided in a few defined sources. Framing questions that clarify information or identify gaps in knowledge. Operating to a brief in structured situations. Explaining the nature of ethics and its significance in the business environment. Understanding the public interest and social responsibility. Understanding the pressures on professional ethical behaviour, including the interaction between professional ethics and the law, regulations and other value systems. How skills are assessed The majority of written test questions will require candidates to absorb and understand both structured and unstructured material. Requirements will include: understanding key information from the scenario provided; understanding the context of the scenario in terms of type of business, industry and wider context; recognising key ethical issues for an accountant undertaking work in accounting and reporting; and recognising specific issues that may arise in the context of the situation described. Structuring problems and solutions Assessed skills Understanding data and information given: identifying and understanding issues arising in straightforward scenarios. Using the data and information given: understanding requirements, analysing data and information to support the requirement. Drawing upon technical and professional knowledge learnt to analyse issues. Understanding the workings of, and controls within, an organisational framework. Applying knowledge from different technical areas: analysing problems that combine technical skills in a single disciplinary environment. Using new concepts: evaluating new ideas and concepts. Appreciating the ethical dimensions of situations, problems and proposals. Identifying and selecting appropriate courses of action using an ethical framework. Financial data analysis: performing the required calculations; explaining or stating the issues. How skills are assessed Questions will be scenario-based (on occasions based on actual situations in the real world). These will require candidates to apply technical knowledge to practical situations and analyse information (including quantitative analysis) to support sound decision making Candidates will be required to: identify and use information to define key business issues; demonstrate understanding of the business, its strategy, industry and wider context. demonstrate the impact of ethics on the objectives and methods of an organisation; identify the ethical implications of strategic proposals; © ICAEW 2015 9 demonstrate relevant technical knowledge; perform appropriate analysis of numerical data and demonstrate an understanding of what is relevant; and use data analysis to develop and illustrate an answer. Applying Judgement Assessed skills Applying discrimination: identifying the relevant/reasonable in data and evidence; recognising varying quality in data or evidence. Relating parts and wholes: discerning particular issues as part of wholes. Sensitivity analysis: demonstrating an understanding of sensitivities to change: calculating a range of outputs for given inputs. Demonstrating an understanding of different perspectives (eg social, political, economic): analysing and interpreting problems and situations from a given stance. Change management (appreciating the impacts/effects of change): considering and evaluating the effects of a given future scenario. Applying a sceptical and critical approach in a given straightforward situation. Exercising ethical judgement in a given straightforward situation. Developing arguments, having first appreciated the perspective of all other parties. Conducting critiques: critically reviewing a statement, argument or position. How skills are assessed Questions will require candidates to use their understanding and interpretation of the information, together with the results of any analysis, to provide a reasoned argument and as a means of developing conclusions and recommendations. Candidates will be required to: evaluate the impact of a business proposal on an entity; assess the reliability, accuracy and limitations of any analysis performed; be able to produce arguments integrating numerical and descriptive analysis; prioritise the issues facing an entity; identify links and relationships between different issues affecting an entity and use these to establish priorities; evaluate options for an organisation, taking into account its stakeholders, objectives, priorities, available resources and ethical obligations; and provide reasons for the rejection of alternatives. Conclusions, recommendations, and communication Assessed Skills Using technical knowledge to support reasoning and conclusions. Decision making: using relevant quantitative approaches in decision analysis. Identifying the best explanation, solution or steps against defined criteria in a given straightforward situation. Formulating opinions, reservations, advice, recommendations, plans, solutions, options and risks including business implications in a given straightforward situation. Preparing, describing, outlining the advice, report or notes required in a given straightforward situation. Presenting a basic or routine memorandum or briefing note in writing in a clear and concise style. Combining cognitive and behavioural skills to communicate to specialists and non-specialists. © ICAEW 2015 10 How skills are assessed The provision of advice to managers and others will be central to most questions. Candidates may be required to: draw realistic conclusions from an analysis of data and the information provided; prepare a report or memorandum structured according to the requirements of the scenario, with appropriate context; provide reasoned advice based on an understanding of the business and the relevant scenario, including an assessment of possible alternatives; recommend suitable courses of action in a given situation; and identify risks and outline reservations about the advice. © ICAEW 2015 11 FINANCIAL ACCOUNTING AND REPORTING Assimilating and using information Assessed skills Reading and understanding subject matter. Accessing, evaluating and managing information provided in a few defined sources. Framing questions that clarify information or identify gaps in knowledge. Operating to a brief in structured situations. Explaining the nature of ethics and its significance in the business environment. Understanding the public interest and social responsibility. Appreciating the ethos and culture of the accountancy profession. Understanding the role of the professional accountant within the public interest, practice and business contexts and the regulatory structure of the profession. Understanding the pressures on professional ethical behaviour, including the interaction between professional ethics and the law and other value systems. How skills are assessed Questions will contain both structured and unstructured detail in scenarios that candidates have to read, assimilate and understand. Requirements will include: explaining the contribution and inherent limitations of financial statements; applying elements of the IASB conceptual framework for financial reporting; recognising key ethical issues for an accountant undertaking work in accounting and reporting; and recognising specific issues that may arise in the context of the situation described. Structuring problems and solutions Assessed skills Understanding data and information given: identifying and understanding issues arising in straightforward scenarios. Using the data and information given: understanding requirements, analysing data and information to support the requirement. Drawing upon technical and professional knowledge learnt to analyse issues. Applying knowledge from different technical areas: analysing problems that combine technical skills in a single disciplinary environment. Using new concepts: evaluating new ideas and concepts. Identifying and using relevant content of IFAC and ICAEW Code of Ethics. Recognising ethical issues arising from situations likely to be encountered by trainee chartered accountants; identifying possible courses of action to resolve them. How skills are assessed Requirements will include: applying elements of the IASB conceptual framework for financial reporting; applying knowledge of financial reporting standards; preparing and presenting financial statements from accounting data in conformity with IFRS for single entities, whether organised in corporate or in other forms and entities requiring consolidated financial statements; explaining the principal differences between IFRS and UK GAAP; and identifying ethical issues and use ethical codes to formulate solutions. © ICAEW 2015 12 Applying judgement Assessed skills Skills relating to applying judgement are not assessed in the Financial Accounting and Reporting module. Conclusions, recommendations and communication Assessed skills Preparing, describing, outlining the advice, report, notes required in a given straightforward situation. Presenting a basic or routine memorandum or briefing note in writing in a clear and concise style. Exercising ethical judgement in a given straightforward situation. How skills are assessed Candidates will be required to explain accounting and reporting concepts in non-technical language to non-financial managers. © ICAEW 2015 13 FINANCIAL MANAGEMENT Assimilating and using information Assessed skills Reading and understanding subject matter. Accessing, evaluating and managing information provided in a few defined sources. Framing questions that clarify information or identify gaps in knowledge. Operating to a brief in structured situations. How skills are assessed The majority of written test questions will require candidates to absorb and understand both structured and unstructured material. Candidates will often be required to give recommendations based on their understanding and interpretation of the information provided, supported by explanation of the reasoning behind and implications of their recommendations. Quantitative calculations will often form part of the analysis and be a means of supporting conclusions and recommendations. Structuring problems and solutions Assessed skills Understanding data and information given: identifying and understanding issues arising in straight forward scenarios. Using the data and information given: understanding requirements, analysing data and information to support the requirement. Drawing upon technical and professional knowledge learnt to analyse issues. Applying knowledge from different technical areas: analysing problems that combine technical skills in a single disciplinary environment. Using new concepts: evaluating new ideas and concepts. Financial data analysis: performing the required calculations; explaining or stating the issues. How skills are assessed The majority of written test questions will be scenario-based (on occasions based on actual situations in the real world), requiring candidates to assimilate significant amounts of information, to analyse it (including quantitative analysis) in a way that demonstrates relevant technical knowledge and to draw and support appropriate conclusions Quantitative analysis will form a major part of both written test and objective test questions requiring candidates to apply technical knowledge to practical situations in order to make accurate calculations and to support sound decision-making. Applying judgement Assessed skills Applying discrimination: identifying the relevant/reasonable in data and evidence; recognising varying quality in data or evidence. Relating parts and wholes: discerning particular issues as part of wholes. Sensitivity analysis: demonstrating an understanding of sensitivities to change: calculating a range of outputs for given inputs. Applying a sceptical and critical approach in a given straightforward situation. © ICAEW 2015 14 Appreciating when more expert help is required in a given straightforward situation. Developing arguments, having first appreciated the perspective of all other parties. Conducting critiques: critically reviewing a statement, argument or position. How skills are assessed In written test questions candidates will be required make sense of relatively large volumes of data, making judgments on the relevance of data for use in subsequent calculations and discussions. Even largely quantitative questions will invariably have elements in which candidates will be required to reflect on their calculations and the methodology employed and to identify and discuss the implications of calculations. Candidates will often be required to make and justify judgements based on earlier calculations. Conclusions, recommendations and communication Assessed skills Using technical knowledge to support reasoning and conclusions. Decision-making: using relevant quantitative approaches in decision analysis. Identifying the best explanation, solution or steps against defined criteria in a given straightforward situation. Formulating opinions, reservations, advice, recommendations, plans, solutions, options and risks including business implications in a given straightforward situation. Preparing, describing, outlining the advice, report, notes required in a given straightforward situation. Presenting a basic or routine memorandum or briefing note in writing in a clear and concise style. Combining cognitive and behavioural skills to communicate to specialists and non-specialists. How skills are assessed Candidates will often be required in written test questions to recommend suitable courses of action in a given situation (financing decisions, dividend decisions, investment appraisal decisions). Such advice has often to be incorporated within a ‘business report’ format, addressing both the strengths and weaknesses of any recommendations and/or reasons for the rejection of alternatives. The provision of advice to managers and others will be central to most written test questions. © ICAEW 2015 15 TAX COMPLIANCE Assimilating and using information Assessed skills Reading and understanding subject matter. Accessing, evaluating and managing information provided in a few defined sources. Framing questions that clarify information or identify gaps in knowledge. Operating to a brief in structured situations. How skills are assessed Questions will contain both structured and unstructured detail in scenarios that candidates have to read, assimilate and understand. The information will be presented in a business context, with varying technical complexity. Information may need to be assimilated from various sources within the question. Some issues may need to be deduced by inference or analysis. Candidates may be required to explain the implications of proposed transactions in any of the following ways: calculation of tax liabilities and reliefs available; written description of tax treatments; explanation of tax treatments in light of unstructured information relating to individuals, partnerships or companies; description of the availability and values of tax reliefs within the context of numerical questions; explanation of alternative tax treatments; and explanation of ethical issues within given scenarios. All of these skills will be assessed in the context of: ethics and law capital taxes income tax national insurance contributions corporation tax VAT and stamp taxes. Structuring problems and solutions Assessed skills Understanding data and information given: identifying and understanding issues arising in straightforward scenarios. Using the data and information given: understanding requirements, analysing data and information to support the requirement. Drawing upon technical and professional knowledge learnt to analyse issues. Applying knowledge from different technical areas: analysing problems that combine technical skills in a single disciplinary environment. Using new concepts: evaluating new ideas and concepts. Appreciating the ethical dimensions of situations, problems and proposals. Identifying and selecting appropriate courses of action using an ethical framework. Financial data analysis: performing the required calculations; explaining or stating the issues. Identifying and explaining the consequence of unethical behaviour. Identifying and using relevant up to date content of the IFAC and ICAEW Codes of Ethics. Recognising legal and ethical issues arising from situations likely to be encountered by trainee chartered accountants; identifying possible courses of action to resolve them. © ICAEW 2015 16 How skills are assessed Candidates may be required to: calculate tax liabilities from a given scenario; demonstrate relevant technical knowledge; perform relevant, accurate calculations in a logically structured way; identify different business entities and their tax status (eg, company, sole trader, partnerships), and understand the tax implications thereof; integrate verbal descriptions with calculations; use calculations to illustrate an answer; and provide relevant legal and ethical information in the context of a tax scenario. Applying judgement Assessed skills Applying discrimination: identifying the relevant/reasonable in data and evidence; recognising varying quality in data or evidence. Relating parts and wholes: discerning particular issues as part of wholes. Sensitivity analysis: demonstrating an understanding of sensitivities to change; calculating a range of outputs for given inputs. Appreciating when more expert help is required in a given straightforward situation. Exercising ethical judgement in a given straightforward situation. Conducting critiques: critically reviewing a statement, argument or position. How skills are assessed Candidates may be asked to critically evaluate the quality, completeness and integrity of information put forward by tax payers. Candidates may be required to assess the legality of options and the consequences of various courses of action with regard to: new client procedures; HMRC errors; money laundering; and tax avoidance and evasion. Conclusions, recommendations and communication Assessed skills Using technical knowledge to support reasoning and conclusions. Decision making: using relevant quantitative approaches in decision analysis. Identifying the best explanation, solution or steps against defined criteria in a given straightforward situation. Formulating opinions, reservations, advice, recommendations, plans, solutions, options and risks including business implications in a given straightforward situation. Preparing, describing and outlining clearly the advice, report notes required in a given straightforward situation. How skills are assessed Candidates may be asked to analyse the implications of various courses of action out of a limited set of prescribed options. © ICAEW 2015 17 Candidates may be required to: determine the tax implications of scenarios and proposals to provide alternative tax implications; take a given set of circumstances and reach a reasoned conclusion; and justify a conclusion made using knowledge of the existing tax regime. Illustrative examples of this would be to reach conclusions on: possible VAT treatments eg with regard to transactions involving land and buildings; inheritance tax implications of a proposed lifetime transfer or a transfer on death; the impact of residency status on income tax, capital gains tax or corporation tax; or whether an individual is trading by applying the badges of trade to reach a reasoned conclusion. This list is not exhaustive. © ICAEW 2015 18 BUSINESS PLANNING The Business Planning modules provide students with the opportunity to gain subject- and sectorspecific knowledge while studying for the ACA. The suite of Business Planning modules are based on the same syllabus structure and skills frameworks, and will provide students with the opportunity to demonstrate their learning and use this in the context of taxation, banking or insurance. Students will sit one of the Business Planning modules. There are three to choose from – Business Planning: Taxation, Business Planning: Banking and Business Planning: Insurance. Students are advised to speak to their employer to determine which Business Planning module to take. OR The suite of business planning alternative modules include taxation, banking and insurance. Assimilating and using information Assessed skills Reading and understanding subject matter in a given complex situation. Accessing, evaluating and managing information provided in multiple sources. Framing questions that clarify information or identify gaps in knowledge. Operating to a brief in structured situations. Explaining the nature of ethics and its significance in the business environment. Understanding the public interest and corporate and social responsibility. Understanding the importance of contributing to the profession. Appreciating the ethos and culture of the accountancy profession. Understanding the role of the professional accountant within the public interest, practice and business contexts and the regulatory structure of the profession. Understanding the importance of ethical behaviour to a professional and the reasons for the adoption of ethical codes by professions acting in the public interest. Understanding the pressures on professional ethical behaviour, including the interaction between professional ethics and the law and other value systems. How skills are assessed Questions will contain both structured and unstructured detail in scenarios that candidates have to read, assimilate and understand. The information will be presented in a business context, with varying technical complexity. Information may need to be assimilated from various sources within the question. Some issues may need to be deduced by inference or analysis. Scenarios may be based on both historic and future events. Candidates may be required to respond to instructions from different parties for example a line manager, a client request or from other senior personnel. The requests may be specific, or they may be more general requiring interpretation by the candidate. © ICAEW 2015 19 Candidates may be required to: Business Planning: Taxation assimilate information provided by internal and external sources; identify and evaluate inconsistencies in information provided from multiple sources; and recognise and explain key ethical issues for an accountant undertaking work in taxation. Business Planning: Banking recognise specific issues that may arise in the context of the situation described; identify and evaluate inconsistencies in information provided from multiple sources; and recognise and explain key ethical issues for an accountant undertaking work in banking. Business Planning: Insurance recognise specific issues that may arise in the context of the situation described; identify and evaluate inconsistencies in information provided from multiple sources; and recognise and explain key ethical issues for an accountant undertaking work in insurance. Structuring problems and solutions Assessed skills Understanding data and information given: identifying and understanding issues arising in given scenarios. Using the data and information given: understanding requirements, analysing data and information to support the requirement. Drawing upon technical and professional knowledge learnt to analyse issues. Applying knowledge from different technical areas: identifying a range of solutions from problem analysis in a defined situation. Using new concepts: evaluating new ideas and concepts. Appreciating the ethical dimensions of situations, problems and proposals. Identifying and selecting appropriate courses of action using an ethical framework. Financial data analysis: performing the required calculations; explaining or stating the issues Identifying and explaining the consequence of unethical behaviour. Identifying and using relevant up to date content of the IFAC and ICAEW codes of ethics. Recognising ethical issues arising from situations likely to be encountered by trainee chartered accountants; identifying and selecting appropriate resolutions to them in given complex situations. How skills are assessed: Candidates may be required to: Business Planning: Taxation consider and calculate a range of appropriate tax treatments; provide descriptive analysis and explanations; integrate different taxes and jurisdictions; evaluate taxation impact of a transaction; integrate descriptions with calculations in a form appropriate for the user; © ICAEW 2015 Business Planning: Banking formulate, evaluate and implement accounting and reporting policies; identify regulatory issues and requirements and consider appropriate responses where necessary; integrate requirements of various international regulatory bodies and jurisdictions; Business Planning: Insurance formulate, evaluate and implement accounting and reporting policies; identify regulatory issues and requirements and consider appropriate responses where necessary; integrate requirements of various international regulatory bodies and jurisdictions; 20 apply technical knowledge to perform relevant, accurate calculations in a logically structured way; identify further information or clarifying existing arrangements with a client; consider the impact of delaying or modifying future decisions; and identify and explain ethical and legal issues. identify audit issues for a banking client and suggest appropriate responses integrate descriptions with calculations in a form appropriate for the user; apply technical knowledge to perform relevant, accurate calculations in a logically structured way; identify further information needed; provide descriptive analysis and explanations; and identify and explain ethical and legal issues. identify audit issues for an insurance client and suggest appropriate responses integrate descriptions with calculations in a form appropriate for the user; apply technical knowledge to perform relevant, accurate calculations in a logically structured way; identify further information needed; provide descriptive analysis and explanations; and identify and explain ethical and legal issues. Applying judgement Assessed skills Applying discrimination: filtering information provided in complex problems to identify critical factors, understanding that not all issues are clear cut. Relating parts and wholes: discerning particular issues as part of wholes. Sensitivity analysis: demonstrating an understanding of sensitivities to change, calculating a range of outputs for given inputs. Demonstrating an understanding of different perspectives (eg, social, political, economic): analysing and interpreting problems and situations from alternative given stances. Applying a sceptical and critical approach in a given complex situation. Appreciating when more expert help is required in a given complex situation. Exercising ethical judgement in a given complex situation with a range of alternative actions. Developing arguments, having first appreciated the perspective of all other parties. Conducting critiques: critically reviewing situations and problems. . How skills are assessed: Candidates may be asked to evaluate critically the quality, completeness and integrity of information in a given scenario. Judgement will be applied in the context of scenarios of varying complexity, involving calculations and the drawing of inferences from information provided. Examples of how candidates may be required to apply their judgement include: Business Planning: Taxation applying scepticism to the integrity of information provided in the scenario having regard to its source; selecting between appropriate options; © ICAEW 2015 Business Planning: Banking applying scepticism to the integrity of information provided in the scenario having regard to its source; identifying omissions in the information; Business Planning: Insurance applying scepticism to the integrity of information provided in the scenario having regard to its source; identifying omissions in the information; 21 identifying omissions in the information; evaluating inconsistencies in information; evaluating the effects of future events; identifying key linkages between information provided in a scenario and possible tax treatments; comparing the effects of a range of estimates, outcomes or tax treatments; and exercising own ethical judgement in assessing the consequences of various courses of action. evaluating inconsistencies in information; exercising own ethical judgement in assessing the consequences of various courses of action; evaluating the effects of future events; assessing the materiality of errors; and selecting between appropriate options. evaluating inconsistencies in information; exercising own ethical judgement in assessing the consequences of various courses of action; evaluating the effects of future events; assessing the materiality of errors; and selecting between appropriate options. Conclusions, recommendations, and communication Assessed Skills Using technical knowledge and professional experience to support reasoning and conclusions. Decision making: assimilating data from different sources and data types in decision analysis. Identifying the best explanation, solution or steps against defined criteria in a given complex situation. Formulating opinions, reservations, advice, recommendations, plans, solutions, options and risks including business implications in a given complex situation. Preparing, describing, outlining the advice, report notes required in a given complex situation. Combining cognitive and behavioural skills to communicate clearly to a specialist or nonspecialist audience. How skills are assessed Candidates may be required to: Business Planning: Taxation Business Planning: Banking determine the tax implications of scenarios and proposals to provide alternative recommendations to meet a given individual or corporate objective or goal; formulate and recommend a reasoned conclusion from structured calculations; justify a conclusion made using knowledge of the existing tax regime; © ICAEW 2015 formulate and recommend a reasoned conclusion from data, facts, calculations, judgements and own analysis; advise on the ethical considerations; and draw conclusions from data, facts, calculations, judgements and own analysis; Business Planning: Insurance formulate and recommend a reasoned conclusion from data, facts, calculations, judgements and own analysis; draw conclusions from data, facts, calculations, judgements and own analysis; advise on the ethical considerations; and explain the limitations of conclusions or recommendations; 22 advise on the ethical considerations; and explain the limitations of conclusions or recommendations. explain the limitations of conclusions or recommendations; identify key linkages; and compare the effects of a range of estimates, and outcomes or financial treatments. identify key linkages; and compare the effects of a range of estimates, and outcomes or financial treatments. Examples of how candidates may be required to present their recommendations are: Business Planning: Taxation a report/memorandum in response to a specific technical or ethical issue and in accordance with client requirements; a review of advice or proposed tax strategies making recommendations supported by calculations or analysis of tax issues identified; and a justification of a specific recommended action when a variety of options are available. © ICAEW 2015 Business Planning: Banking a report/memorandum in response to a specific technical or ethical issue and in accordance with client requirements; reasoned, practicable advice that is clear and concise, supported by calculations or analysis of issues identified; and a justification of a specific recommended action when a variety of options are available. Business Planning: Insurance a report/memorandum in response to a specific technical or ethical issue and in accordance with client requirements; and reasoned, practicable advice that is clear and concise, supported by calculations or analysis of issues identified; and a justification of a specific recommended action when a variety of options are available. 23 ADVANCED LEVEL CORPORATE REPORTING Assimilating and using information Assessed skills Understanding the subject matter in a practical situation. Accessing, evaluating and managing information provided in multiple sources. Framing questions that clarify information or identify gaps in knowledge. Operating to a brief in structured situations. Identifying elements of risk and uncertainty. Explaining the nature of ethics and its significance in the business environment and understanding the importance of ethical behaviour in respect of the public interest, the accounting profession, the law and other value systems. Understanding the importance of contributing to the profession and appreciating the ethos and culture of the accountancy profession. Understanding the public interest and corporate responsibility. How skills are assessed Questions will contain both structured and unstructured details in scenarios of varying complexity with technical content and business context. Information may need to be assimilated from various sources within the question. Some issues may need to be deduced by inference or analysis. Different types of information may also need to be assimilated and synthesized to develop a coherent understanding. For example: qualitative and quantitative; market data and financial reporting information; internally generated and externally available information. Questions will require candidates to have a detailed knowledge and understanding of relevant regulations in financial reporting, auditing and ethics, which will need to be related to practical business scenarios and applied to any data provided. The data provided will focus on technical compliance and understanding. Candidates may be required to respond to instructions from a line manager, a client request or from other senior personnel. The requests may be specific, or they may be more general requiring interpretation and judgement to be applied by the candidate. Examples of issues and tasks that candidates may be required to consider include: evaluate the quality and relevance of information provided in the context of a particular assignment; evaluate inconsistencies in information provided from multiple sources; use different sources and types of evidence to confirm, or question, financial statement assertions applying professional scepticism; and evaluate the ethical implications of making information available including confidentiality and transparency. © ICAEW 2015 24 Structuring problems and solutions Assessed skills Understanding data and information given: identifying and understanding issues arising in given scenarios. Using the data and information given: analysing data and information to support requirement. Drawing upon technical and professional knowledge learnt to analyse issues. Applying knowledge from different technical areas: analysing problems that combine technical skills in a single disciplinary environment and identifying a range of solutions. Explaining, listing, drafting or stating briefly the issues or analysis. Financial statement analysis: performing the required calculations and comparing and contrasting more than one element of the financial statements; explaining or stating the issues. Using new concepts: evaluating new ideas and concepts. Recognising ethical issues arising from situations likely to be encountered by ICAEW Chartered Accountants; identifying possible courses of action to resolve them; and appreciating the ethical dimensions of situations, problems and proposals. Identifying and explaining the consequences of unethical behaviour. Identifying and using relevant up to date content of IESBA and ICAEW codes of ethics. Identifying and selecting appropriate courses of action using an ethical framework. How skills are assessed Candidates will be required to apply technical knowledge, analytical techniques and professional skills to resolve compliance and business issues that arise in the context of the preparation and evaluation of corporate reports and from providing audit services. Candidates will be required to structure problems and solutions in scenario based questions which may be presented in the following forms: Mini case – in the context of auditing but with significant corporate reporting emphasis. This may be technical, compliance or interpretive (for example including analytical procedures). Financial statement analysis – including technical aspects of corporate reporting. Technical question on aspects of audit and corporate reporting (which may include assurance, internal audit). Examples of the elements that candidates may be required to consider are: Audit and Assurance Business and inherent risks in complex scenarios. The control environment. Selective financial analysis in an auditing context. Risk and control evaluation in the context of IT or e-business. Design audit procedures as part of a structured response to assessed risks. Professional scepticism in relation to audit evidence. Consideration of appropriate corporate governance measures and structures. Ethics Ethical problems in reporting, assurance and business scenarios. Relevance, importance and consequences of ethical issues. Corporate reporting Formulation, evaluation and implementation of accounting and reporting policies. Measurement and recognition of assets and obligations on reported financial performance. Impact and interaction of applicable accounting principles, bases and standards. Appraisal of remuneration policies on reported performance. Evaluation of reporting issues in relation to group scenarios and overseas activities. © ICAEW 2015 25 Applying judgement Assessed skills Assessing arguments and considering evidence against set criteria. Applying discrimination: filtering information provided to identify critical factors. Relating parts and wholes: discerning particular issues within complex scenarios. Demonstrating an understanding of sensitivities to change (sensitivity analysis): flexing a range of inputs and assessing the outcomes. Demonstrating an understanding of different perspectives analysing and interpreting related problems and situations from alternative given stances. Change management (appreciating the impacts/effects of change): considering and evaluating the effects of given alternative future scenarios. Appreciating when more expert help is required. Applying a sceptical and critical approach. Conducting critiques: critically reviewing situations and problems. Seeking opportunities to add value: thinking imaginatively in a business context. Prioritising key issues. Applying the concept of materiality. Developing arguments, having first appreciated the perspective of other parties. Exercising ethical judgement. How skills are assessed Candidates will be required to use technical knowledge and professional judgement to identify, explain and evaluate alternatives and to determine the appropriate solutions to compliance issues, giving due consideration to the needs of clients and other stakeholders. The commercial context and impact of recommendations and ethical issues will also need to be considered in making such judgements. Judgement will be applied in the context of scenarios of varying complexity, involving calculations and the drawing of inferences from the information provided. Candidates may be required to demonstrate judgement in the following ways: selecting between technical choices; filtering data to identify critical elements; prioritising information, issues or tasks; identifying omissions in the information; evaluating inconsistencies in information; distinguishing between the various qualities of the data provided; evaluating the impact of economic and political factors; evaluating the effects of known events; evaluating the appropriateness of accounting policy choice and estimation selection; evaluating options; comparing the effects of a range of estimates, outcomes or financial treatments; assessing the materiality of errors; exercising ethical judgement; identifying key linkages; and drawing appropriate conclusions from data provided to satisfy specified objectives and assessing the materiality of errors and omissions. © ICAEW 2015 26 Conclusions, recommendations and communication Assessed skills Using technical knowledge and evidence to support reasoning and conclusions. Assimilating data from different sources, data types in making decisions. Identifying the best explanation, solution or steps against defined criteria considering risk. Identifying a range of solutions based on analysis and developing recommendations which combine different technical skills in a defined situation. Formulating opinions, advice, recommendations, plans, solutions, options and reservations based on valid evidence. Presenting analysis and recommendations in accordance with instructions. Providing specified responses to a specialist or non-specialist audience. How skills are assessed Candidates may be required to draw conclusions in the following ways: from data, facts, calculations, judgements and own analysis; on complex assurance engagements; by identifying weaknesses in financial information systems and their potential consequences; by distinguishing between the qualities of data provided or other evidence generated; and by developing risk management solutions in an audit and corporate reporting environment. Examples of how candidates may be required to present and communicate their recommendations include: A report/memorandum in response to a specific technical issue and in accordance with client requirements. Reasoned, practicable advice that is clear and concise, supported by calculations or analysis of technical/business issues identified. Use judgement to select the most appropriate audit procedures in the context of risks identified. Justifying a specific recommended action when a variety of options are available. Candidates may be required to explain the limitations of their conclusions or recommendations. © ICAEW 2015 27 STRATEGIC BUSINESS MANAGEMENT Assimilating and using information Assessed skills Understanding the subject matter in a practical situation. Accessing, evaluating and managing information provided from multiple sources. Framing questions that clarify information or identify gaps in knowledge. Operating to a brief in structured situations. Explaining the nature of ethics and its significance in the business environment and understanding the importance of ethical behaviour in respect of the public interest, the accounting profession, the law and other value systems. Understanding the importance of ethical behaviour to a professional accountant and the reasons for the adoption of ethical codes by professions acting in the public interest. Understanding the importance of contributing to the profession, appreciating the ethos and culture of the accountancy profession and understanding the role of the professional accountant within the public interest, practice and business contexts and the regulatory structure of the profession. Understanding the public interest and corporate responsibility. How skills are assessed Questions will contain both structured and unstructured details in scenarios of varying complexity and technical content. The scenarios will normally be forward looking, but past evidence and current circumstances will also be relevant. Information may need to be assimilated from various sources within the question. Some issues may embedded and need to be deduced by inference or analysis. Different types of information may also need to be assimilated and synthesized to develop a coherent understanding. For example: qualitative and quantitative; market data and financial reporting information; internally generated and externally available information. Questions will require candidates to have a detailed knowledge and understanding of relevant regulations, techniques and concepts in business management, finance, corporate reporting, assurance and ethics. This knowledge will need to be assimilated and applied in order to solve practical business problems, using any data and other information provided. The data provided may include both historic information and projections/forecasts. Candidates may be required to respond to instructions from a line manager, a client request or from other senior personnel. The requests may be specific, or they may be more general, requiring interpretation and judgement to be applied by the candidate. Examples of issues and tasks that candidates may be required to consider include: evaluate the quality and relevance of information provided in the context of a particular assignment; evaluate inconsistencies in information provided from multiple sources; use different sources and types of evidence to confirm, or question, financial statement assertions applying professional scepticism; extrapolate given information into the future based upon given or own assumptions; and evaluate the ethical implications of making information available including confidentiality and transparency. © ICAEW 2015 28 Structuring problems and solutions Assessed skills Understanding data and information given, structuring the information and identifying gaps. Assimilating raw data to produce more meaningful information relevant in resolving a particular problem. Explaining, listing, drafting or stating briefly the issues or analysis. Data analysis: structuring, transforming and analysing data provided (financial and non-financial) in order to enhance understanding of business issues and their underlying causes, and to enable conclusions to be drawn to support solutions to complex problems. Financial statement analysis: reviewing and evaluating a company’s financial statements by comparing and contrasting individual elements over time, or by comparison to a similar entity, in order to enhance understanding of the company’s performance and position, make projections and inform decision making. Analysing and evaluating new and complex ideas within a defined situation. Identifying the relevant technical knowledge and professional experience required to solve problems and generate solutions; including identification and evaluation of risks within the scenario. Recognising ethical issues arising from situations likely to be encountered by ICAEW Chartered Accountants; identifying possible courses of action to resolve them and appreciating the ethical dimensions of situations, problems and proposals. Approaching decision making using an ethical framework, including identifying and using IESBA and ICAEW Codes of Ethics. How skills are assessed Scenarios will be integrated to cover more than one technical discipline. Examples of issues and tasks that candidates may be required to consider include: Business management Undertaking a critical assessment of key business issues. Structuring market data and industry data from various sources. Explaining and evaluating the strengths and weaknesses of an organisation or segments of an organisation. Evaluating the impact of decisions on business strategy. Evaluating the impact of financial strategy on business strategy. Finance Undertaking valuations, where the information is incomplete, suspect or unsuitable. Undertaking financial risk analysis and considering the management of financial risks. Evaluating the impact of business strategy on financial strategy. Corporate reporting Considering relevance and reliability of unstructured information. Evaluating the impact and legitimacy of a range of financial reporting treatments. Dealing with complex financial reporting information. Impact of future events on financial statements. Impact on financial statements of delaying or modifying business and financial decisions. Evaluating business position, prospects and risks. © ICAEW 2015 29 Assurance Understanding business and inherent risks in complex scenarios. Evaluating the control environment. Undertaking selective financial analysis. Evaluating risk and control evaluation in the context of IT. Undertaking assurance to support specific transactions (eg, due diligence). Applying professional scepticism. Ethics The structured application of ethical codes and structured application. Identifying ethical problems in complex scenarios and structuring appropriate actions. Applying judgement Assessed skills Assessing arguments and considering evidence against set criteria. Applying discrimination: filtering information to identify critical factors. Relating parts and wholes: discerning particular issues within complex scenarios. Demonstrating an understanding of sensitivities to change (sensitivity analysis): flexing a range of inputs and assess the outcomes. Demonstrating an understanding of different perspectives, analysing and interpreting related problems and situations from alternative given stances. Change management (appreciating the impacts/effects of change): considering and evaluating the effects of given alternative future scenarios. Appreciating when more expert help is required. Applying professional scepticism and critical evaluation. Conducting critiques: critically reviewing situations and problems. Seeking opportunities to add value: thinking imaginatively in a business context. Prioritising key issues to solve business and financial problems, leading to creative and realistic solutions. Applying the concept of materiality, including drawing inferences about risk. Appreciating the needs and perspectives of a range of stakeholders, including issues of corporate responsibility and sustainability. Exercising ethical judgement. Identifying a range of choices, selecting and justifying the most appropriate. How skills are assessed Judgement will be applied in the context of scenarios of varying complexity, which require the drawing of inferences and conclusions from prior qualitative and quantitative analysis, and other information, in order to solve problems and developing a solution, or alternative solutions. Examples of how candidates may be required to apply their judgement include: selecting between technical choices; filtering data to identify critical elements; prioritising information, issues or tasks; identifying omissions in the information provided; evaluating inconsistencies in information; distinguishing between the various qualities of the data provided; evaluating the impact of business, financial and economic factors; evaluating the effects of future events; evaluating the appropriateness of accounting policy and estimation selection; comparing the effects of a range of estimates, outcomes or financial treatments; exercising ethical judgement; identifying key linkages; and © ICAEW 2015 30 drawing appropriate conclusions from data provided to satisfy specified objectives and assessing the materiality of errors and omissions. Conclusions, recommendations and communication Assessed skills Using technical knowledge, evidence and analysis to provide reasoned conclusions and advice. Making evidence-based recommendations which can be justified by reference to supporting data and other information. Identifying the best explanation, solution or steps against defined criteria, considering risk and other specified objectives and constraints. Identifying a range of solutions, based on analysis, and developing recommendations which combine different technical skills and business and financial awareness in a defined situation. Formulating opinions, advice, plans, options and reservations based on valid prior analysis. Presenting analysis and recommendations in accordance with instructions. Providing specified responses to a specialist audience. Communicating recommendations in a manner suitable for the intended recipients. How skills are assessed Examples of how candidates may be required to draw conclusions include: from data, facts, calculations, judgements and own analysis; on complex assurance engagements; by identify weaknesses in financial information systems and their potential consequences; by distinguishing between the qualities of data provided or other evidence generated; by developing risk management solutions; by making strategic decisions; and by valuing a company or a financial instrument. Examples of how candidates may be required to present their recommendations include: A report/memorandum in response to a specific technical or business issue and in accordance with client requirements. Reasoned, practicable advice that is clear and concise, supported by calculations or analysis of technical or business issues identified. Justifying a specific recommended action when a variety of options are available. Candidates may be required to explain the limitations of their conclusions or recommendations. © ICAEW 2015 31 CASE STUDY Assimilating and using information Assessed skills Understanding the subject matter. Accessing, evaluating and managing data and information provided in multiple sources (some pre-disclosed) and from independent research plans. Using technical knowledge and professional experience to assess interaction of information from different sources. Framing questions that clarify information or identify gaps in knowledge. Understanding an organisational framework: evaluating the strengths and weaknesses of an organisation and comparing with benchmarks. Planning, controlling and evaluating operations in a global context. Understanding the needs of customers/clients (internal and external). Demonstrating an understanding of the significance of ethics in the business environment, the importance of ethical behaviour and explaining the consequences of unethical behaviour. Using relevant content of the IESBA and ICAEW Codes of Ethics. Demonstrating an understanding of the regulatory structure of the profession, its ethos, culture, its role in corporate and social responsibility and the importance of ethics to a professional. Demonstrating an understanding of the public interest and corporate and social responsibility. Understanding the importance of contributing to the profession. How skills are assessed The Case Study will require candidates to identify and understand complex scenarios and issues within the wider business context. Candidates will be required to: use the advance information, exam paper, knowledge of ethical codes and professional experience to define the specific issue/situation; identify and use the key financial figures from the advance information and exam paper; use their own understanding of context and relevant findings from their own research; describe the wider context in which the business operates; identify relevant business issues showing: understanding of a business entity understanding of its position in the industry sector; recognise where a business is in its life cycle; identify any important parameters affecting an issue (eg, competitors, loss of clients); and demonstrate an awareness of ethical and business trust issues and situations. © ICAEW 2015 32 Structuring problems and solutions Assessed skills Using the information given: analysing and evaluating requirements, information, issues and business context. Analysing, evaluating and synthesising new and complex ideas. Displaying an enquiring and questioning mind. Identifying faults in arguments and gaps in evidence. Demonstrating understanding of the pressures on professional ethical behaviour, including the interaction between professional ethics, the law and other value systems in given scenarios. Within the two categories of financial analysis, the following specific skills are assessed: Financial statement analysis: Analysing and evaluating financial statements by selecting appropriate analytical and technical tools and applying technical knowledge and professional experience. Linking all elements of financial statements (including disclosure notes), evaluating and making comparisons where there are complex interactions. Evaluating financial statements in the context of other business information. Financial data analysis: Analysing and evaluating data by selecting appropriate analytical and technical tools and applying technical knowledge and professional experience. Demonstrating an understanding of sensitivities to change: flexing a range of inputs and evaluating potential outcomes. Evaluating, prioritising and trading off solutions to complex problems, considering various perspectives, including those of competitors and internal audiences. How skills are assessed The Case Study will require candidates to solve complex business problems and develop a range of business strategies. Candidates will be required to: identify and use key information; demonstrate technical knowledge; use professional experience; use relevant strategic analytical tools (SWOT, PESTLE, Porter’s 5 Forces); perform relevant analysis; produce quality analysis showing depth breadth logic reasonableness; use knowledge of ethical codes and professional experience to perform relevant analysis; and assess issues of business trust. Financial statement analysis: use appropriate analytical tools on information and data provided in the advance information and exam paper to measure financial performance, identify trends and make comparisons; perform relevant analysis on: financial statements; other information; make specific adjustments to align equivalent financial information for different factors; assess the causes and effects of both financial and non-financial factors on the business; assess the effect of external factors on business activities and financial results; and integrate numbers and words. © ICAEW 2014 33 Financial data analysis: prepare and explain relevant calculations based on financial information provided in the advance information and exam paper; use appropriate analytical tools (eg, valuation methodologies); perform relevant analysis on: numerical data; other information; determine specific outcomes from financial and non-financial information provided; comment on assumptions provided; consider and calculate possible alternative outcomes (flexing numbers, sensitivity analysis); integrate numbers and words. Applying judgement Assessed skills Using technical knowledge, professional experience and evidence to support reasoning. Applying discrimination: filtering information to identify key factors. Applying a sceptical and critical approach. Interpreting information from a range of stances and developing arguments, appreciating the perspective of other parties. Conducting critiques: considering alternative views in testing the validity of ideas in practice. Considering and evaluating the effects of a range of alternative future scenarios. Seeking opportunities to add value. Prioritising key issues. Applying the concept of materiality to interrelated situations. Appreciating the ethical dimensions of situations, exercising ethical judgement and explaining the consequence of unethical behaviour. Appreciating when more expert help is required. Identifying linkages, inconsistencies, and ambiguities. How skills are assessed The Case Study will require candidates to apply their judgement to their findings from their analytical work. Candidates may be required to: evaluate and build on implications of financial or strategic analysis or calculations; identify and use key financial information; recognise linkages; recognise gaps or shortcomings in the information provided; select and evaluate key points, such as strengths and weaknesses of a business proposal; question and evaluate the adequacy of any assumptions and quality of information provided; explain own assumptions; discuss output, such as pros/cons; demonstrate professional scepticism; demonstrate objectivity/balance; demonstrate an appreciation of more than one side/bias; evaluate and balance options; prioritise key points; assess weaknesses in decisions; reflect on the underlying analysis performed and what it means for the organisation; use knowledge of ethical codes and professional experience; identify risks and ethical issues within, and derived from, the scenario; identify key ethical issues for an accountant undertaking work in accounting, finance and assurance; and © ICAEW 2015 34 evaluate any specific business trust points relating to the issue under review. Conclusions, recommendations and communication Assessed skills Using technical knowledge, professional experience, evidence and analysis to support conclusions. Using valid and different technical skills to formulate opinions, advice, plans, solutions, options and reservations. Making decisions and recommendations in unstructured situations in which risks and uncertainty may exist. Specifying the criteria for the most appropriate proposal. Assessing the costs and benefits that may flow from a decision. Approaching decision-making using an ethical framework and a strong business awareness. How skills are assessed The Case Study will require candidates to draw conclusions, make recommendations and reach decisions based on their foregoing work and relevant to the organisation as described in the business scenario. Candidates may be required to: draw conclusions that: are realistic; flow from the analytical work and evaluation previously conducted; include the impact of any assumptions and any sensitivity analysis; form an opinion on the validity of information sources; and conclude on ethical issues. offer clear, practical, and commercial advice and recommendations that: follow logically from the analytical work, evaluations and conclusions; are backed up by reasoned argument; are realistic; help to improve the situation or mitigate any problems or uncertainties identified within the context of the business scenario and wider context; lie within the range of current business activity; identify any significant positive points or areas of concern relating to any decision(s) reached; identify any financial implications of action (or no action); identify additional work needed to support the decision(s); identify the next steps that the client should take to progress or reject an issue; identify where any specific additional advice may be required; and resolve any identified ethical dilemmas or issues of business trust. © ICAEW 2015 35 Integrative and multidisciplinary skills Assessed skills Time awareness: recognising time constraints and prioritising given tasks. Identifying a range of solutions from analysis of complex scenarios in a multidisciplinary environment. Relating parts and wholes: discerning interrelated issues as part of complex scenarios, employing a sense of perspective in over-viewing situations. Identifying and anticipating problems that may flow from a decision. Developing recommendations for a complex scenario, requiring multidisciplinary skills in a practical situation. Preparing, describing, outlining the advice, report, notes required in a clear and concise style. Providing a report to a specialist or non-specialist audience. How skills are assessed The Case Study will require candidates to generate and justify solutions for complex problems using information from multiple sources and from an independent research plan. Candidates may be required to: provide appropriate terms of reference (purpose, scope, disclaimer); provide a main report that: demonstrates appropriate balance between requirements; uses sufficient but not excessive sub-divisions; makes appropriate but not excessive use of notes and bullets; uses correct style and language for audience with appropriate tact; contains appropriate appendices; - calculations easy to follow - assumptions clearly set out - no excessive text - figures appropriately carried forward to main report presents a coherent answer to each requirement that: - covers the major elements; - makes suitable use of figures; - presents figures that are clearly derived; - flows logically; and - presents a structured discussion, not just a list of facts. provide an executive summary that: o is consistent with the main report; and o brings forward all the key analysis, judgement and conclusions from the main report. © ICAEW 2015 36