Home Articles Excellent Results for Thuthuka in the June ITC

Excellent Results for Thuthuka in the June ITC

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“The ITC assesses the core technical competence of prospective CA(SA)s at a standard set by SAICA and is not the final requirement for qualifying as a CA(SA).”

The newly introduced June ITC sitting doubles the number of successful African repeat candidates.

The Initial Test of Competence (ITC), previously known as Part I of the Qualifying Examination, is one of the prerequisites for prospective Chartered Accountants [CA(SA)s].

In June 2013 SAICA for the first time offered a second annual sitting of the ITC for repeat candidates. This additional ITC sitting was introduced to provide more opportunities for candidates to attempt the exam as soon as possible after their university studies. Candidates not succeeding in their first ITC attempt could now rewrite six months rather than a full year later.

The June 2013 ITC pass rate, comprising repeat candidates only, was 41% compared to a repeat pass rate in the January sitting of 42%. The January and June examinations of 2013 yielded a combined pass rate for all candidates of 66%, compared to the 2012 pass rate of 64%.

The combined first and second sitting of the ITC in 2013 resulted in 2 632 candidates passing the ITC in 2013 compared to 1987 passes in 2012. Of these passes, 802 were African candidates (2012: 483), providing a significant boost for the overall transformation of the profession.

The excellent June 2013 showing confirms the efficacy of two SAICA initiatives, the Thuthuka Bursary Fund (TBF) and the Thuthuka repeat programme, which the statistics show are delivering exceptional results. SAICA remains committed to playing a pivotal role in transforming the profession and in promoting skills development within the broader South African economy.

The TBF provides full funding and additional support for African and Coloured students from their first year at university.

The Thuthuka repeat programme is run for African and Coloured candidates who have previously failed the Qualifying Examination. This programme, which is funded by FASSET, involves a full-time lecture, tutorial and study progamme for a period of five weeks. Trainees who participated were given time off by their employers to attend this intense programme provided by the University of Johannesburg and University of Cape Town. It is evident that this approach has paid dividends, given the excellent pass rate achieved.

As depicted below, of all candidates who wrote the exam in June, those who participated in the Thuthuka repeat programme performed exceptionally well. The pass rate for African and Coloured candidates who participated in the Thuthuka repeat programme was an excellent 61%.

Thuthuka repeat programme candidates onlyPASSTOTAL% PASS
African9715662%
Coloured162955%
Indian1333%
11418861%

 

The pass rate of 61% from Thuthuka repeat programme candidates compares favourably to pass rates for African and Coloured candidates who did not participate in a repeat programme, as depicted in the table below.

Candidates who did NOT do a refresher courseAll candidates passes
RACEPASSTOTAL% PASSPASSTOTAL% PASS
African4413632%14129248%
Coloured165430%328339%
Candidates who did do a refresher courseAll candidates passes
RACEPASSTOTAL% PASSPASSTOTAL% PASS
African9715662%14129248%
Coloured162955%328339%

 

Overview of the ITC June 2013 results

Overall resultsJune 2013
RACEFAILPASSTOTAL% PASS
African15114129248%
Coloured51328339%
Indian1368121737%
White17710528237%
Other11250%
Grand Total51636087641%

 

Additional ITC statistics can be found on the SAICA website at www.saica.co.za

The ITC assesses the core technical competence of prospective CA(SA)s at a standard set by SAICA and is not the final requirement for qualifying as a CA(SA). Candidates can only qualify as CA(SA)s and become full members of SAICA once they have completed the following requirements:

  • Successfully passed the ITC
  • Completed the training contract requirements
  • Completed a specialist programme
  • Successfully passed the Part II exam, either the Financial Management Examination or the Public Practice Examination (Auditing)

GENERAL COMMENTS ON ITC

Objective

The primary objective of the ITC is to test the integrated application of cognitive knowledge. Candidates are accordingly tested on their ability to:

  • Apply the knowledge specified in the subject areas set out in the prescribed syllabus
  • Identify, define and rank problems and issues
  • Analyse information
  • Address problems in an integrative manner
  • Exercise professional judgement
  • Evaluate alternatives and propose practical solutions that respond to the users’ needs
  • Communicate clearly and effectively

 

Overall comments on the paper

Overall comments received from universities indicated that the papers were of an appropriate standard for the ITC.

  • The level of difficulty for accounting and external reporting questions was generally described as ‘moderate to difficult’ and of a good standard, as can be expected for this part of the examination. The questions required candidates to have a good knowledge of basic principles underlying the topics. Topics examined were relevant and of importance both in practice and in the academic syllabus.

However, a few general exam technique trends need to be highlighted and may be useful for candidates in future examinations:

  • Many candidates struggled to articulate the application of principles before arriving at a conclusion. This was most evident in discussion-type questions.
  • Candidates did not provide enough journal entries, which made it difficult to excel with the question.
  • The taxation questions were set at an appropriate level of difficulty. Many candidates were not up to date with the latest dividends tax developments and became confused between the Secondary Tax on Companies (STC) and Dividends Tax. In the discursive tax question, candidates lost marks by not using the required memo format and failed to discuss all elements of tax avoidance and the General Anti Abuse Rule (GAAR).
  • The strategy, risk management and governance question was set at a moderate level of difficulty. This was an excellent question which clearly identified stronger candidates. As in prior years, exam technique proved to be problematic. Many candidates did not read the requirements carefully, which resulted in generic ‘mind-dump’ answers outside the scope of the question.
  • The management decision-making and control question was a fair to moderate question. However, candidates failed to exhibit critical thinking and application of knowledge in the discussion type questioning. Candidates did, however, do well in the calculation aspects.
  • The audit question was moderate to difficult and candidates struggled to interpret the information in the scenario. The question was reasonably well answered by candidates. However, as highlighted in prior years, examination technique is a problem. Many candidates did not read and consider the information presented carefully, or its application in answering the question. This often resulted in generic or ‘mind-dump’ answers.
  • The financial management question was moderate in terms of difficulty and yet overall performance was most disappointing. Candidates struggled with the application of how hedging instruments are able to mitigate against foreign currency movements, and they were confused by estimating the impact of the introduction of a settlement discount on profits and cash flows. This strongly indicated an inability to interpret information and to perform relevant calculations.
  • Pervasive skills were also assessed more extensively in this exam, with communication skills given additional prominence by specifically stating requirements.

In conclusion, a message to those who were unfortunately not successful in the examination:

Please start preparing for next year’s examination in good time. Don’t give up – sufficient preparation and a review of the basics will stand you in good stead for next year’s exam! Best of luck!!

CHANGES TO PART II OF THE QUALIFYING EXAMINATION

SAICA will be changing the format of the Part II Qualifying Examination to a competence-based assessment. The revised assessment of professional competence will be called the Assessment of Professional Competence (APC), which replaces the two separate Auditing and Financial Management discipline exams. The APC will focus on the strategic and managerial aspects of the broader accountancy discipline, with its primary objective being to assess the professional competence developed during the academic, professional and training programmes. The APC will be written for the first time in November 2014.

The process of qualification as a CA(SA) remains unchanged, and only the nature of the assessment of professional competence will change. Herewith the key changes:

Old (Part II)New (APC)
Two exams (Part II Auditing  = Public Practice Examination, PPE) and Part II Financial Management)One exam (assessment) written by all and to be named the Assessment of Professional Competence (APC)
SAICA and Independent Regulatory Board for Auditors (IRBA) set examsOnly SAICA to set the APC
Case study primarily focused on either Auditing (PPE) or Financial ManagementMultidisciplinary case study
Philosophy of the old exam was to assess specific competence based on where the training contract was being undertaken (public practice versus commerce)Philosophy of the new exam is to assess professional competence irrespective of where the training experience is acquired
Little emphasis on professional skillsMuch greater emphasis on the assessment of the pervasive skills, namely ethical behaviour, professionalism, personal attributes and professional skills
Requirements to write the exam:

  • Candidates must have passed assed Part I and
  • Candidates must have completed 18 months of practical experience and
  • Candidates must have uccessfully passed the APT (Accounting Professional Training) course.
Requirements to write the APC:

  • Candidates must have passed the Initial Test of Competence (ITC) and
  • Candidates must have completed 20 months of a 36-month training contract by the beginning of the month in which the examination is written. Recognition of prior work experience (to count towards the 20 months) will be considered by referring to the extent to which the Training Requirements Committee gives recognition of prior learning within the training contract and
  • Candidates must have successfully completed the professional programme
Writing manuallyWriting electronically (that is, using basic Word and Excel functionality).This will be phased in commencing with a pilot group in 2015. Depending on the outcome, full or partial implementation will follow in 2016 and full implementation from no later than 2017
All information provided on the dayA pre-release of information (not all) will be provided in advance of the exam, candidates will have time to prepare and work through the material. Additional information and the required section will be provided on the day
Two papers 100 marks eachOne multidisciplinary paper (no marks allocated)
Allocating marks within each of the required sections (subsections of each paper)Assessing competence (no marks are awarded) based on candidates’ attempts:NA = No attempt

NC = Not competent

LC = Limited competence

BC = Borderline competent

C = Competent

HC = Highly competent

Marking manual scripts on manual mark plansElectronic marking (allows for better collation and  analysis of data)A full pilot of this process is planned for 2013
Marks (which often give an indicator as to time)Principles evaluated with more emphasis placed on evaluating overall competence
Time is limited (3 hours per paper with half an hour reading time) per 100 mark paperTime to be a constraint but not as severe as in ITC. A full day will be allocated (8 hours) to complete required tasks in line with what trainees would encounter in real life

For any queries relating to the APC please email us at apc@saica.co.za

Author: Mandi Olivier CA(SA) is Senior Executive: Professional Development, SAICA.