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SPECIAL REPORT QE1

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Pass rate of prospective chartered accountants rises dramatically

South Africa’s all-too-small pool of qualified chartered accountants [CAs(SA)] is poised for a welcome boost following the release of a set of vital examination results on 26 June 2009.

The pass statistics are especially encouraging in view of the quest to increase the population of the relatively small number of African CAs(SA).

Results from Part One of the Qualifying Examination (QE1) – a critical milestone on the path to becoming a CA(SA) – reflect a rise in the pass rate which now stands at 58% compared to last year’s 54%.

A total of 3 373 candidates sat for the 2009 examination – a number 14% lower than 2008’s 3 902. “While ostensibly a negative statistic, it is in fact highly encouraging, since it reflects a significant decline in the number of repeat candidates, itself a reflection of higher pass rates acheived by repeat candidates in 2008,” explains Mandi Olivier, SAICA’s Project Director for Education.

A significant highlight of this year’s results is the increase in the successes achieved by African first-time candidates. From 204 passes in 2008, 258 African candidates passed in 2009 – a dramatic 26% increase, which Olivier ascribes to SAICA’s Thuthuka Bursary programme. The very same Thuthuka Bursary programme was responsible for the number of Coloured candidates increasing from 64 to 76 in 2009.

This programme is specifically designed to enhance the pass rates of aspiring black (African and Coloured) chartered accountants in South Africa. Such students, who were fully funded by the Thuthuka Bursary programme over the past four years, achieved a remarkable 89% pass rate. This compares extremely favourably with the overall first time pass rate for all candidates of 79%. Also, Thuthuka-inspired was the 72% pass rate for first time African candidates for 2009, well up on the 63% achieved in 2008. The respective figures for first time Coloured candidates were 75% and 68%.

“Most encouragingly, the combined African and Coloured pass rates reflect – for the first time ever – a close alignment with those of their white counterparts,” says Olivier, who points out that two years ago there was a significant gap between the pass rates of African and Coloured candidates compared to their white counterparts – a difference of over 32%.
A further Thuthuka initiative was the FASSET-funded repeat programme mounted for African and Coloured candidates. Olivier says that this programme, run for the first time in 2007, achieved extraordinary results in the 2008 QE and although the 2009 numbers are not as promising, “they still reflect well and indicate the need for such a programme”.

Only 86 African repeat candidates passed the QE in 2009, 58 (67%) of who completed the Thuthuka repeat programme, which has resulted in a significantly higher number of African repeat candidates passing. As Olivier points out, the pass rate for such students is 30% compared to only 10% of remaining African repeat candidates (candidates who did not participate in the Thuthuka funded initiative).

“SAICA continues to look for ways to support such repeat candidates through Thuthuka and other funding,” says Olivier.

Other highlights of the results include:
• First-time candidates achieved a 79% pass rate.
• All the top 10 qualifiers passed with honours (75% or higher);
• Twenty eight candidates including the top “10”, passed with honours;
• Two black candidates (Indian) in the top 10;

Matsobane Matlwa, SAICA’s Executive President, is highly gratified by the overall increase in the pass rate, especially among African candidates. He emphasises that SAICA constantly monitors the extraordinarily high standards of the qualification process.

“We shall not under any circumstances compromise our world class standards. We continually look at the qualifying process in the context of the requirement that we never allow standards to decline. This highlights the world class quality of the qualification process toward the CA(SA) designation.”

This year’s first position was shared jointly by Melanie Cope from the University of Pretoria and Craig Tudhope from the Nelson Mandela Metropolitan University. Both are trainees at audit firm Deloitte.

SAICA would like to pay tribute to two special people who inspired us this year over exam period.

The first is Eulanie Gouws who despite having an advanced form of cancer and having been through extensive chemotherapy just prior to writing the Part I exam, managed to successfully write and pass the Part I exam this year. Such commitment to becoming a CA(SA) cannot be matched. Eugenia unfortunately passed away shortly after having written the exam and we are extremely saddened that she did not live to see that her hard work and commitment paid off.

The second is a gentleman by the name of Charles Wooberg whose life ambition was to become a CA(SA) after his late father. Charles recently underwent a liver transplant and was exceptionally ill at the time of preparing for and writing the Part I exam. Despite this, Charles never lost sight of his goal and was committed to his studies despite his severe illness. We take our hat off to Charles who despite not completing both papers still had the courage and determination to go after what he wanted. Charles unfortunately passed away at the beginning of June.

Such courage, tenacity and commitment is an inspiration to us, prospective CAs(SA) and failed candidates. This should be an encouragement to those people still studying towards becoming CAs(SA).

Mandi Olivier notes that passing QE1 is not the final requirement before qualifying as a CA(SA).

“Successful candidates will still have to complete a specialist diploma, successfully pass the final examinations (either the Part II Financial Management exam or the Public Practice Exam), and complete the remaining period of their practical experience/registered training contract requirement. Candidates can only qualify as chartered accountants and become full members of SAICA once they have completed all three requirements.”

Olivier says the Part I examination assesses the core technical competencies of students at a standard considered appropriate by SAICA. “The Part I examination ensures that SAICA assesses the core competence of students independently of the universities. This process not only assesses the core competence of each individual, but also provides a valuable tool for the accreditation process of universities.”

 

SPECIAL REPORT QE1

Top 10 Statistics

The top ten:

The Top 10 Part 1 candidates for 2009 are:

PLACENAME&SURNAMEUNIVERSITYACADEMICACHIEVEMENT
1 (joint)Melanie Roslyn CopeUniversity of PretoriaHonours
1 (joint)Craig TudhopeNelson Mandela Metropolitan UniversityHonours
3Wynand Jacobus VisserUniversity of PretoriaHonours
4Kamal GovanUniversity of the WitwatersrandHonours
5Andrew van der BurghUniversity of PretoriaHonours
6Amar NaikRhodes UniversityHonours
7Andre van der ZwanUniversity of PretoriaHonours
8Warren Robert KemperUNISAHonours
9Jared Gidon OssipUniversity of PretoriaHonours
10Alexa Leigh JoubertUniversity of Cape TownHonours

 

PART I OF THE QUALIFYING EXAM: 2009
% PASS FOR FIRST TIME, REPEAT AND ALL CANDIDATES
2008FailPassTotal% Pass
First time candidates4031 5361 93979%
Repeat candidates9984361 43430%
All candidates1 4011 9723 37358%
2008FailPassTotal% Pass
First time candidates4991 4691 96875%
Repeat candidates1307627193432%
All candidates1 8062 0963 90254%
2007
First time candidates6701 3151 98566%
Repeat candidates1 6005842 18427%
All candidates2 2701 8994 16946%
2006
First time candidates8891 3432 23260%
Repeat candidates1 6264412 06721%
All candidates25151784429941%
PART I OF THE QUALIFYING EXAM: 2008
% PASS BY RACE – FIRST TIME WRITERS
RACE GROUP20092008
PASSTOTAL% PASSPASSTOTAL% PASS
African25836072%20437545%
Coloured7610275%6411254%
Indian23331474%22332446%
White9691 16383%9781 42168%
TOTAL1 5361 93979%1 4692 23260%

For further statistics see www.saica.co.za.

 

 

SPECIAL REPORT QE1

Top 3 Candidate Profiles

Craig Tudhope (Joint No: 1)
Why did you decide on the CA(SA) profession?
I have always been fascinated by the inner workings of business and its ability to sustain itself in diverse cultural and geographic circumstances. I believe that the CA(SA) profession is probably the most versatile career option available, and it allows for a virtually unhindered transition into any sector of the market.

However, one aspect cannot be refuted – this profession prides itself in maintaining high ethical standards no matter what the circumstances, and integrity is the cornerstone of the designation. Who wouldn’t want to be a part of a profession such as this?
QE1 – Good, bad or ugly?
Good. Although the paper did not conform to the prior year’s “patters and structures”, it required a high level of technical knowledge to detect the intricacies of the questions, but also it required a broad vision in order not to miss the big picture.
What are your expectations for QE2?
Another high standard and extremely testing step in the process of my development. An opportunity not only to remember some auditing procedures, but rather to learn a lot more about how much I don’t know, and how intricate actually the subject is.
Being one of the top three students means …
That I have many people to thank. I know for a fact that I was only capable of what I have achieved by thanking God for the talents and giftings He has given me, and the opportunities that I’ve had to use them. It also means I have the unique opportunity to help others that are in the same position I was, and enable them to overcome the areas where I was not strong.
Your general views on the standard of the chartered accountancy route as set by SAICA:
I believe that the standards set by SAICA with regard to the required curricula for post graduate studies, as well as the syllabus for the qualifying exam, is of a very high standard and at times, extremely overwhelming, however, it is capable of being overcome with the correct level of application.

Melanie Cope (Joint No: 1)
Why did you decide on the CA(SA) profession?
The CA(SA) profession is well recognised both locally and internationally as providing excellent career opportunities in many fields in the business environment. It is also one of the best business qualifications in South Africa.
QE1 – Good, bad or ugly?
It was good due to the excellent preparation provided by the university and the assistance given by my firm.
What are your expectations for QE2?
I expect it to be more practically based with its focus changing from accounting to auditing but, hopefully, with practical auditing experience, this should not be a problem.
Being one of the top three students means …
Passing QE1 has been the main focus of four years of studying, and I am just grateful to have accomplished this and I am honoured to have done so well.
Your general views on the standard of the chartered accountancy route as set by SAICA:
The standard is very high resulting in CAs(SA) being very technically proficient. Due to this there is a high demand for CAs(SA) in South Africa.
Tell us about your traineeship
I am currently busy with academic articles at the University of Pretoria at a third year accounting level. It is extremely interesting to see the academic world from the other perspective of giving lectures rather than attending them. I am also looking forward to beginning my auditing traineeship with Deloitte next year.
What are you most looking forward to once you qualify?
Hopefully going on an international secondment and being able to travel during this time. Also, the career opportunities that will now be available both locally and internationally.

Wynand Visser (No: 3)
Why did you decide on the CA(SA) profession?
This profession provides a qualified member with endless possibilities and potential. It provides the best basis from which to build a successful career in finance, and gives qualified members an advantage over others. It also exposes the professional to a variety of specialised fields in which to build your career. The CA(SA) profession is a respected profession and known for its high standards throughout the world. An important characteristic of the profession is that it is dynamic and therefore keeps you on your toes, not allowing you to settle in a comfort zone.

QE1 – Good, bad or ugly?
I definitely experienced all three, the good was the feeling when you’re finished, as well as knowing that you’ve lived up to the challenge of the exams. The bad was the stress before the exam and the ugly has to be the sleepless night before the first day, knowing this is what you have been preparing for during the past four years of study. In hindsight, it was an experience I will never forget and it will provide a topic of hours of conversations for years to come.
Being one of the top three students means …
That a great honour has been bestowed upon me and that I’ve really been blessed. I want to thank God, without Him it would have been impossible. This achievement provides me with a challenge, as it is a measure to live up to and a level of knowledge and skill to uphold.
Your general views on the standard of the chartered accountancy route as set by SAICA:
The route to become a CA(SA) is challenging. It takes a lot of commitment and self-discipline. I think that the standards are high, which is necessary to ensure that all qualified members uphold the reputation of the profession, which it is not impossible. There are very few obstacles in life that can’t be overcome with hard work. The route changes you for the best and does not only provide you with technical financial knowledge and skills, but also with tools that can be used in your everyday life.

For the rest of the top 10 profiles, please log onto www.accountancysa.org.za.

 

SPECIAL REPORT QE1

General comments on QE1 2009

1 Objective
In view of the primary objective of Part I of the Qualifying Examination, namely to test the integrated application of cognitive knowledge, 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.

2 Overall comments on the paper
Overall comments received from universities indicated that the papers were of an appropriate standard for Part I of the Qualifying Examination.

• The accounting questions were of a good standard as can be expected for Part I of the Qualifying Examination. The questions were not exceptionally difficult but required candidates to have a good knowledge of and solid foundation regarding the basic principles underlying the topics. Topics examined were relevant and of importance both in practice as well as in the academic syllabus.

• The tax questions were of an easy standard and most candidates passed the tax questions. Despite this, candidates did not score as well as expected and markers continue to comment on the lack of candidate’s basic and current tax knowledge.

• The standard of the management accounting and financial management questions was also considered appropriate for Part I of the Qualifying Examination. Despite this both questions were answered poorly by most candidates and lack of appropriate basic knowledge and examination technique was evident. Many candidates spent valuable time writing information that was given in the question, an endeavour that achieved no marks.

• The standard of the audit question was moderate and considered appropriate for Part I of the Qualifying Examination. The auditing tested basic theoretical knowledge which is appropriate for Part I of the Qualifying Examination. Candidates did not fare well in this question mainly due to the fact that they were unable to apply their theoretical knowledge to the facts presented in the question. Examiners are increasingly concerned about candidates’ inability to score well in auditing questions at a QE Part I level. Candidates who regurgitated “shopping lists” of information did not score marks.

3 Specific comments
From a review of candidates’ answers to the seven examination questions for the March 2009 examination the following deficiencies were identified. These problems affected the overall performance of candidates, and it is a matter of concern that candidates annually make the same mistakes. 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.

3.1 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 pure regurgitation of what candidates may have learnt about the theory at university, but of no real relevance to the question in hand. Candidates also do not appear to identify the correct issues in the scenario provided.

This is a major concern, because by the time candidates qualify for sitting for 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.

3.2 Workings
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. In many instances workings were performed by candidates but not cross referenced to the final solution. Once again, 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 these must be properly and neatly cross referenced to the final solution.

3.3 Communication
Candidates fared better in questions requiring calculations than in discursive questions. It is important that candidates note that written answers are a large component of the Qualifying Examination as written communication is a key competency required in the work place. Candidates should learn to answer discursive questions properly.

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.

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

This is inexcusable and candidates must ensure they understand the impact transactions would have on specific account balances by knowing which account in the income statement or balance sheet to debit or credit.

3.5 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 relevant 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.

3.6 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, i.e. in the form of a letter, memorandum or a report.

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.

3.7 Irrelevancy
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.

3.8 Recommendations/interpretations
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 (i.e. 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.

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

3.10 Open-book examination
Candidates are reminded of the following:
• No loose pages (of any kind) may be brought into the exam.
• Candidates are also advised that from 2010 SAICA will no longer allow NOTES of any kind in the prescribed books allowed to be brought into the exam.
• Candidates are advised to familiarize themselves with SAICA exam rules prior to writing the examination.

A particular 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 essential 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. In 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 before, will be disadvantaged as they are unlikely to finish the paper.

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!

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