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INFLUENCE: POSITIONING THE NEW APC

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What does SAICA aim to achieve through the new CA(SA) qualification process? Mandi Olivier explains

As I have just been presented with my ten-year service award at SAICA, this coincides perfectly with the introduction of the latest and most significant change to the CA(SA) qualification process and presents an ideal opportunity to reflect on these changes.

THE SAICA VISION: TO DEVELOP RESPONSIBLE LEADERS

SAICA is widely regarded as the pre-eminent professional accounting body in South Africa and the CA(SA) as the top professional accounting designation. The excellence of the CA(SA) designation is known beyond the borders of South Africa and ranks among the most highly regarded in the world.

SAICA is accredited by the Independent Regulatory Board for Auditors (IRBA). This body is responsible for the registration of registered auditors (RAs). These are SAICA members who follow the appropriate auditing training route and are subject to completion of the Audit Development Programme.1

SAICA is also recognised as a professional body by the South African Revenue Service (SARS), which makes it possible for its members to be registered as tax practitioners.

HOW DOES SAICA MEET ITS VISION OF CAS(SA) AS RESPONSIBLE LEADERS?

SAICA’s objective is to retain and cement the pre-eminence of its qualification. In attending to this objective, SAICA has identified ‘responsible leadership’2 as one of the fundamental attributes of a CA(SA). SAICA believes that a CA(SA) should be capable of being a leader in any environment in which he or she functions.

SAICA’s vision of the CA(SA) as a responsible leader has important implications for the competencies included in the Competency Framework and for the qualification process itself. The Competency Framework sets out the competencies (knowledge, skills, values and attributes) of an entry-level CA(SA). The framework defines a CA(SA) as a responsible leader with a very specific background in professional accountancy. This implies that on entering the profession, a CA(SA) has the full range of technical competencies expected of a professional accountant and also those which will enable the further development of responsible leadership qualities.

It is recognised that growth and acquisition of competencies after qualifying as a CA(SA) is likely to occur in many different spheres of competence, depending on the specific role in which a particular CA(SA) finds him- or herself. Post-qualification competence will be :

  • Maintained (in other words, the CA(SA) will remain abreast of changes in existing competencies and technical areas and of changes in approach to core competency areas), and
  • Developed (the CA(SA) will either develop new competencies particular to a role or further develop, by reaching a higher level of proficiency, the competencies outlined in the Competency Framework)

CA(SA) AT ENTRY LEVEL

The technical ability of a CA(SA) is elevated to the strategic and executive level by positioning this ability within a sound understanding of the economic and competitive environment within which an entity operates, the competitive positioning of the entity within that environment and a thorough understanding of the entity’s operational, organisational, governance and reporting structures.

The CA(SA) has a unique perspective within this context: the ability to dentify and evaluate potential strategies for the entity,based on an understanding of the financial implications for the value of an entity simultaneously identifying and evaluating risk factors, and evaluating the ability of the entity to implement the course of action given the resource and control structure of the entity.

Financial literacy that enables an understanding of transactions is pervasive.

Further, the CA(SA) focuses on developing responsible leadership and acts ethically and applies principles of good corporate citizenship.

… in areas which relate to the particular field/role in which the CA(SA) is active after entering the profession.

In order for these competencies to be developed effectively it is important that the CA(SA) has the fundamental competencies that foster life-long learning. These fundamental competencies are primarily developed during the pre-qualification period.

Technical accounting and pervasive competencies, if elevated from the purely technical to directing and leading at the strategic level, enable the CA(SA) to develop and exercise responsible leadership with a unique perspective. The elevation of technical competencies to a level applicable at the strategic level requires that technical disciplines be taught and assessed with this objective in mind.

DIAGRAM 1: QUALIFICATION MODEL REVIEW

Graph PG43 (2)

HOW ARE THE COMPETENCIES DEVELOPED?

The competencies developed by an entry-level CA(SA) are instilled and perfected through the carefully thought out qualification process ( see Diagram 1 below).

WHAT DID WE CHANGE IN THE QUALIFICATION PROCESS AND WHY?

In 2007, SAICA revisited its delivery model (qualification process). As a result of the review, a number of changes were recommended. These include:

  • The adoption of a Competency Framework (see above)
  • Development of fundamental principles used in revising the different components of the qualification process
  • Revisions to the training programme
  • Revisions to Part I of the Qualifying Exam (now known as the Initial Test of Competence – ITC), and revisions to Part II of the Qualifying Exam (now known as the Assessment of Professional Competence – APC)

The format and nature of this new assessment (APC) was determined after significant research and benchmarking and the APC was established as a better means of assessing professional competence.

SAICA introduced the first Assessment of Professional Competence on 19 November 2014. This competency-based, multi-disciplinary exam replaced the old Part II Qualifying Exams in the separate disciplines of Auditing and Financial Management.

Features of the new assessment that differ from traditional examinations include:

  • Completion of a professional programme
  • The objective of the APC case study being to assess professional competence
  • Certain aspects of the case study being released five days prior to the exam being written (the pre-release period)
  • Additional information and the required sections (the ‘tasks’) being provided on the day of the assessment
  • Required sections being task-based, using roles commonly taken up by entry-level CAs(SA)
  • The assessment taking place over a full eight hours (representing a work day), and
  • Marking being based on competence

WHAT IS PROFESSIONAL COMPETENCE AND HOW IS IT DEVELOPED?

Professional competence is the ability to perform tasks in the real world. It also involves greater application and interpretation of the technical competence than is primarily developed by means of the academic programme.

  • Technical competence is developed primarily in the academic programme offered by universities (and assessed in the SAICA-set Initial Test of Competence).
  • Professional competence, on the other hand, is developed by a combination of the academic programme (albeit less so), the professional programme and the training programme. The APC is the common uniform assessment used to assess the professional competence of entry-level CAs(SA).

The APC aims, therefore, to assess the professional competence of a CA(SA) at the point of entry into the profession, to the extent possible within a written assessment.

WHAT IS THE ASSESSMENT OF PROFESSIONAL COMPETENCE?

The APC is a uniform written assessment aimed at offering candidates the opportunity to demonstrate their professional competence at a standard appropriate for entry into the profession.

The APC consists of a single integrated case study that is based on a comprehensive real-life scenario and is multi-disciplinary in nature, in that it covers multiple competency areas.

The case study is assessed within the context of a baseline of technical competence (as developed through the academic programme and as assessed in both the academic programme and the ITC). The case study may also be set within the context of any industry, including those that are specifically excluded from the ITC. When developing the case study scenario, careful attention is paid to every piece of information it contains. In addition, appropriate triggers/signals are provided to candidates to assist them to determine, and undertake, the research or further preparatory work they consider to be required during the pre-release period (during this five-day period candidates may currently only consult other exam candidates).

The APC relates specifically to assessing professional competence, which entails a different level of application and skill. For example, solving a complex consolidated question (number crunching) is more appropriate to ITC questions, whereas in the APC examiners may be more interested in how the information is used to make business decisions. In contrast with the ITC, the technical level at which the requireds will be pitched will not be the most important consideration. Rather, the APC entails an increased degree of decision-making, and a higher level of application of knowledge and advice offered. The APC simulates the completion of real-life tasks expected of an entry-level CA(SA). The aim is that candidates should contextualise and synthesise the information presented in the pre-release case study as well as additional information provided on the day, as opposed to listing (or dumping) all possible factors they may have identified.

WAS THE CHANGE WORTH IT?

Absolutely! Although only one assessment has been written to date, and it is probably too early to come to any meaningful conclusion about the success of the new format of the assessment, initial commentary received from various stakeholders has been extremely positive and encouraging.

I believe that the new format of the assessment further develops those skills which offer prospective CAs(SA) a greater opportunity to be appointed by employers who are looking for a combination of technical excellence (developed in the academic programme and assessed in the ITC) and professional competence (developed throughout the process, but more specifically focused on in the training and professional programmes, and is assessed in the APC).

The results of SAICA’s first assessment have shown that candidates who wrote this new assessment are better able to demonstrate their communication and higher-order thinking skills. The process also contributes towards better preparing CAs(SA) for the financial markets in which they will be operating once qualified. It was most pleasing to see the ability of most candidates to synthesise the pre-released information, perform real-life tasks, and apply their professional judgement. It would appear that candidates have enhanced their ability to think, process information and understand the context of simulated tasks.

SAICA will be making further changes to this assessment through the introduction of writing the exam electronically to further simulate the ability to perform ‘real-life’ tasks. This will be piloted in the 2015 APC.

Notes

1 See the IRBA website for more information on the Audit Development Programme.

2 See also Philip H Mirvis et al, Responsible leadership emerging: individual, organizational, and collective frontiers, available at http://web.up.ac.za/sitefiles/file/2013%20ALCRL%20Position%20paper.pdf.

Author:

Mandi Olivier CA(SA) is Senior Executive: Professional Development at SAICA