Home Articles Special Feature – ITC Results

Special Feature – ITC Results

The South African Institute of Chartered Accountants (SAICA) is delighted with the excellent results of the Initial Test of Competence Exam (ITC) released on Friday 28 March 2014


The ITC (previously known as Part I of the Qualifying Examination, QE) is one of the prerequisites for registration as a prospective chartered accountant [CA(SA)]. The examination was aligned in 2013 to the recently adopted competency framework for CAs(SA). The adoption of the competency framework has resulted in several changes to the qualification process, the last of which is to be introduced later this year with a new Part II exam – the Assessment of Professional Competence (APC).

The number of candidates writing the January 2014 exam dropped from 3 117 in 2013 –when it was known as QE I – to 2 618 in the current year. The overall pass rate in 2014 was 74 per cent, up from 73 per cent in 2013: 1 948 candidates passed the January 2014 ITC, a decrease of 14 per cent from the January 2013 exam (with 2 272 candidates). The decrease in numbers is due to the introduction, for the first time in 2013, of a second sitting in June each year. This has assisted significantly in reducing the number of repeat candidates in the January exam sitting. The introduction of the second sitting resulted in a record number of candidates passing this examination in 2013 (January and June 2013 passes were a combined 2 632 candidates compared to 1 947 candidates passing in 2012).

The first-time pass rate decreased marginally from 86 per cent in 2013 to 81 per cent in 2014, while first-time enrolments remained consistent year on year. First-time passes are the best indicator of success in the exam as candidates are best prepared as soon as they have completed their Certificate in the Theory of Accounting (CTA) or equivalent. Mandi Olivier, SAICA’s Senior Executive: Professional Development, says: “The ongoing improvement in pass rates is underpinned by a high-quality examination and this increase can be attributed to the high calibre of candidates emanating from universities, where they underwent rigorous preparation prior to writing this standard-setting examination.”

Olivier added: “One of the factors contributing towards the improved results is the increased emphasis CA(SA) accredited programmes are placing on the development of both technical and professional skills, stemming from changes introduced to the competency framework in 2009. Universities have been introducing the competency framework over the last few years by placing increased emphasis on professional skills such as analytical skills, integration and communication, and by making changes to their teaching and learning approaches to accommodate the required outcomes of the competency framework. This is very much in line with the drive at many universities to incorporate such skills to enhance graduates’ employability.

“In addition, through the SAICA accreditation process, we have seen universities really stepping up their game when it comes to the quality of the accredited programme. Accredited CA(SA) programmes typically take in high numbers of students, not all of whom are necessarily CA(SA) prospects. Consequently, many students drop out of the CA(SA) programme along the way, with a sizeable number changing to other programmes. The biggest drop in numbers is between the end of their initial degree and going on to the CTA honours year, partly as a result of the high requirements set by universities for entry into the postgraduate programme. This rigorous selection process results in candidates of an extremely high calibre entering the ITC,” Olivier said.

“We have also seen a steady decline in the number of repeat candidates over the last few years. In 2014, repeat candidates constituted only 16 per cent of the total exam population, which is a marked shift from the 52 per cent in 2007. The most significant drop in the ratio of first-time candidates to repeat candidates has been in 2014 because a number of repeat candidates passed the second sitting of the ITC, which was offered in June 2013 for the first time.”


The Top 10 candidates are those who achieved a mark of at least 70 per cent (limited to a maximum of ten candidates). Honours is awarded to candidates who achieved a score of 75 per cent or higher in the exam. It is encouraging that all the Top 10 candidates achieved honours in the examination and that a further two candidates also achieved honours.

There continues to be significant growth in the number of African candidates with these candidates now representing 32 per cent (835 candidates) of the total January 2014 exam population (30 per cent in January 2013). Most of them (698 out of the 825) were first timers. The increase in the number of African candidates can be largely attributed to the success of SAICA’s Thuthuka programme, which aims to build the African and Coloured pipeline of prospective CAs(SA) and boost the overall transformation of the profession.

SAICA has undertaken two initiatives to help African and Coloured candidates qualify as CAs(SA). These projects – the Thuthuka Bursary Fund (TBF) which is aimed at first-time candidates and the Thuthuka Repeat Programme aimed at repeat candidates – have both delivered 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 support for African and Coloured students from their first year at university, while the Thuthuka Repeat Programme is aimed at African candidates who have previously failed the Qualifying Examination. The results of repeat candidates who have completed the repeat programme (48 per cent pass rate) compares favourably to the 35 per cent pass rate of candidates who have not followed the programme.

Chantyl Mulder, SAICA’s Senior Executive: Professional Development, Transformation and Growth, explained that the pass rate of African repeat candidates who undertook the FASSET-funded programme exceeded that of candidates who did not follow the programme.


SAICA’s Examinations Committee (Examco) constantly strives to improve its ability to determine whether candidates demonstrate a readiness to continue with their accounting education and training. This is done by means of an ongoing process of evaluation and improvement of the way in which it selects questions for inclusion in the examination and decides on the final mark plans. Further details of how the questions are sourced and set, independently reviewed, marked and adjudicated can be found in the examiners’ comments which are published on the website each year. The entire process is a very rigorous one which includes significant attention being paid to the security and confidentiality of examination papers each year. In view of the above stringent marking process no request for re-marking will be entertained.


Objective of the ITC

In view of the primary objective of ITC, namely to test the integrated application of technical competence, candidates are 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, and
  • Communicate clearly and effectively

Overall comments on the papers

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

  • The accounting and external reporting question’s level of difficulty was generally described as “moderate” or “fair” and of a good standard. The questions (there were two accounting and external reporting questions) required a demonstration of technical knowledge, but also the competencies of critically analysing information and applying principles in an integrated manner to different settings. On the whole, both questions were relatively well answered.
  • The tax question was a moderate to difficult discussion question. The question was well balanced with an increased focus on the application of principles rather than being a purely a calculation-based approach. Many candidates identified and discussed most of the key issues.
  • The strategy, risk management and governance questions were moderate to difficult. The one question dealt with to labour unrest and the impact of increasing costs, a weak exchange rate, decreasing demand for the end product and decreasing selling prices. In identifying strategies to address these issues, candidates were required to draw on their financial management knowledge (such as hedging, financing and working capital management) as well as management decision-making (such as costing, decision-making and performance management). The question tested the candidates’ depth and breadth of knowledge and their ability to integrate these various topics in developing a solution for the company concerned.
  • The financial management question (which included a few marks of financial management) was an easy to moderate question which was limited to management accounting principles and required little to no integration with other subject areas. Despite this, candidates performed extremely poorly in this question. The question included identification of business risks, ratio calculation and meaningful interpretations of the company’s performance and testing critical thinking and calculations to separate the management accounts into fixed and variable components and determine the break-even point.
  • The management decision-making and control question (which included some financial management and strategy risk management and governance marks) was difficult and candidates in some instances fell short as they were unable to display the depth of knowledge needed to assess risks and decision-making regarding the attractiveness of the market. Neither did they apply the calculations to come to a conclusion on whether a subsidiary should be discontinued at the beginning or the end of the year. Candidates could have made up marks with the relatively easy fixed overhead absorption rate calculation, but also came up short here.
  • The audit question was relatively straightforward, testing basic principles of external auditing. The question was reasonably well answered by candidates, but as in prior years’ examinations, we highlight again that exam technique remains problematic. Many candidates did not read and consider the information of the question carefully, or apply this in answering of the question. This was evident in one of the sections in which candidates were asked to discuss the control risk for each of the assertions of occurrence, accuracy and completeness of the sale of cement. Many candidates totally ignored the information given in the scenario, as well as the specifics of the required and did not apply the information of the scenario to the required and their answers either, and merely gave a generic answer or mind dump of standard theory. It was also clear that candidates are still battling with the pervasive skills requirement as per the competency framework, as aspects were often only identified or listed instead of discussed or described.
  • Pervasive skills were also assessed extensively in this exam, and marks for communication skills were given additional prominence in that such marks were awarded for specific skills, and in specific sections of the required of questions, where relevant.


From a review of candidates’ answers to the six questions (seven required sections) for the ITC January 2014 examination, the general deficiencies set out below were identified. These problems affected the overall performance of candidates, and it is a matter of concern that candidates make the same mistakes year after year. Although these aspects seem like common sense, candidates who pay attention to them are likely to obtain better marks, and it may even turn a low mark into a pass.

Application of knowledge

A serious problem experienced throughout the examination was that candidates were unable to apply their knowledge to the scenarios described in the questions. Many responses by candidates were a “shopping list” of items in the form of a pure regurgitation of what candidates may have learnt about the theory at university, but with no real relevance to the question in hand. Candidates also do not appear to be able to identify the correct issues in the scenario provided.

This is a major concern, because by the time candidates qualify for entry to these examinations, one would expect them to have assimilated the knowledge, at least to the extent of being able to apply it to simplified facts as set out in an examination question. Obviously, candidates who are unable to identify the correct issues did not do well in the examination.


It is essential that candidates show their workings and supply detailed computations to support the figures in their answers. Marks are reserved for methodology, but can only be awarded for what is shown. Workings should, like the rest of the paper, be done in blue or black ink to ensure legibility. In many instances workings were performed by candidates but not cross-referenced to the final solution. Markers could not award marks as they were unable to follow which working related to which part of the final solution. Candidates must ensure they show their workings and that these are properly and neatly cross-referenced to the final solution.


Candidates fared better in questions requiring calculations than in discursive questions. This is a disturbing trend as the ITC is a stepping stone in the qualification process where the final Assessment of Professional Competence (APC) requires that significantly more focus and attention be given to these important skills. It is important that candidates bear in mind that written answers are a large component of the Qualifying Examination, because written communication is a key competency required in the workplace. Candidates should learn to answer discursive questions properly. This can be done by practising exam-type answers under exam conditions in preparation for the examination.

In addition markers found that candidates used their own abbreviations (SMS messaging style) in their answers. Marks could not be awarded here as it is not up to the markers to interpret abbreviations that are not commonly used. Candidates should pay specific attention to the way in which they write their answers and bear in mind that this is a professional examination for which communication and presentation marks are awarded.

Journal entries

A fundamental part of financial accounting is an understanding of debits and credits. A means of assessing whether a candidate understands these fundamental principles is to require the candidate to prepare the relevant journal entries. Candidates often do not understand what journal entries they need to process. In many instances basic journal entries are processed the wrong way around. In addition, account descriptions are poor and abbreviations are used.

This is inexcusable and candidates must ensure that they understand what impact transactions would have on specific account balances, by showing that they know which account in the income statement or balance sheet has to be debited or credited. It is not sufficient for a candidate with Accounts IV to be a technocrat – understanding of the fundamental principles of accounting is critical to the success of a candidate at the ITC level.

Time management

Candidates are advised to use their time wisely and budget time for each question. The marks allocated to each question are an indication of the relative importance the examiners attach to that question and thus the time that should be spent on it. Candidates should beware of the tendency to spend too much time on the first question attempted and too little time on the last. They should never overrun on time on any question, but rather return to it after attempting all other questions.

Layout and presentation

Candidates should allocate time to planning the layout and presentation of their answers before committing thought to paper. Very often, candidates start to write without having read the question properly, which invariably leads to, for example, parts of the same question being answered in several places or restatement of facts in different parts. Marks are awarded for appropriate presentation and candidates should answer questions in the required format, that is, in the form of a letter, memorandum or a report, if this is what is required.

The quality of handwriting is also an ongoing problem and was of particular concern in this year’s examination. The onus is on the candidate to produce legible answers.

Separate books are used to answer each question of the ITC. Each book is clearly marked and colour coded. Candidates are given explicit instructions to write the correct answer in the correct book. Despite this some candidates did not write the correct answer in the correct book, the secretariat did ensure that candidates who wrote answers in the incorrect book were marked by the correct mark team.


Marks are awarded for quality, not quantity. Verbosity is no substitute for clear, concise, logical thinking and good presentation. Candidates should bear in mind that a display of irrelevant knowledge, however sound, will gain no marks.

Drilling down

Responses, particularly in the financial management, management decision-making and control and the strategy, risk management and governance areas, are often provided by simply repeating the information given in the question. Candidates are unable to drill down to assess what the underlying problem areas are and do not put any effort into going beyond what is stated in the question. Candidates need to draw on their entire knowledge base in order to provide more deep and meaningful insight, particularly in analysis type questions.


Responses to these requirements are generally poor, either because candidates are unable to explain principles that they can apply numerically or because they are reluctant to commit themselves to one course of action. It is essential to make a recommendation when a question calls for it, and to support it with reasons. Not only the direction of the recommendation (that is, to do or not to do something) is important, but particularly the quality of the arguments – in other words, whether they are relevant to the actual case and whether the final recommendation is consistent with those arguments. Unnecessary time is wasted by stating all the alternatives.

Examination technique

Examination technique remains the key distinguishing feature between candidates who pass and those that fail. Many candidates did not address what was required by the questions and, for example, provided a discussion where calculations were required or presented financial statements where a discussion of the appropriate disclosure was required.

Open-book examination

  • Candidates are reminded that they MUST familiarise themselves with SAICA’s open-book policy and be aware that this may differ from that of their CTA university. Candidates are also reminded that only SAICA has the authority to interpret its own open-book policy. To this end candidates are advised of the following:
  • No loose pages (of any kind) may be brought into the exam.
  • Writing on flags: As per section 4.4 of the SAICA examination regulations: “Candidates are only be allowed to highlight, underline, sideline and flag in the permitted texts. Writing on flags is permitted for reference and cross-referencing purposes only, that is, writing may only refer to the name or number of the relevant discipline, standard, statement or section in the legislation.”
  • Any contravention of regulation 4 will be considered to be misconduct.
  • Candidates are advised to familiarise themselves with SAICA’s exam rules prior to writing the examination.

Another problem relating to the open-book examination was that candidates did not state the relevant theory and/or definitions in their answers. One cannot build a logical argument without using the theory as a base and starting point. Reference to theory and definitions is essential to create the perspective from which the question is answered and is required to enable markers to follow the argument. However, since candidates have this information at hand, marks are not awarded for stating detailed definitions only. This type of examination does affect the answer that is expected and application and demonstration of insight into the use of the definition have gained in importance.

Candidates should also remember that one has to be very well prepared for an open-book examination. There is not enough time in the examination to look up all information from the texts. With regard to certain aspects one would be expected to offer an immediate response based on embedded knowledge. Complex information needs to be fully understood before the examination. Candidates who enter the examination hoping to look up data that they have not processed in advance will be at a disadvantage as they are unlikely to finish the papers.

Paying equal attention to all the competency areas

It is disappointing to note that candidates still appear to be most prepared to respond to accounting and external report questions and do considerably poorer in some of the other disciplines – most notably financial management and management decision-making and control. Candidates are reminded that the accountancy discipline is a broad one and the other disciplines are equally important. We draw your attention to the following regulation:

  • 4.2 A minimum of 200 marks (thus 50%) are required to pass the ITC.
  • 4.3 Candidates need to demonstrate an appropriate level of competence in ALL areas and disciplines, and therefore the overall pass mark of 50% shall be subject to the candidate achieving a sub-minimum of 40% in at least three of the four professional papers.

For the first time this year we were in a position where we had to fail a candidate who did not achieve the 40 per cent subminimum in two of the four papers. This is really unfortunate and candidates are advised to pay equal attention to all the competency areas in order to obtain an overall pass in the ITC.

Detailed statistics can be found on the SAICA website at www.saica.co.za. ❐