by Amy Thompson
18 May 2010
The Paper P1 syllabus is designed to equip students with an understanding of the realities of corporate behaviour and the associated responsibilities of the accountant. A breakdown of examinable topics may give the impression of a rather dry (and large) amount of information for candidates to process and learn. For this reason, the initial challenge for tutors is to capture the interest of the class and stop them from viewing Paper P1 as a theoretical paper in which rote learning is the key to exam success. Of course, all candidates must have a robust knowledge of the theory content but it is the intelligent application of that theory to complex scenarios that students are required to demonstrate in order to achieve a pass at Paper P1.
A good start to tuition is to describe one or two real-life situations and tease out the Paper P1 issues for the class to consider. Recent events in the Gulf of Mexico and BP's reaction to them would be a good place to begin. A simple explanation of the issues or a summary hand out from a news website should be enough to stimulate ideas. Students are likely to possess diverse opinions and discussions can focus on the risk management in place at BP, control failures, ethics (both in terms of the cause of the incident and the actions of BP to remedy the disaster) and also the government's role. The influence of corporate governance regulations and how their existence affects corporate behaviour will also be relevant. Without the need for expert knowledge, candidates will hopefully begin to see the relevance of Paper P1 while assimilating the content of the syllabus.
Student opinion on whether BP's fortunes are likely to be affected in the long term by the disaster can also be canvassed leading to explanation of the concept of 'enlightened self interest'. Through the use of a very recent, relevant and newsworthy story, not only can the main examinable areas be introduced but students will become accustomed with the manner in which material is presented (in scenario form) in the exam itself.
The BP case study is by no means the only way of illustrating the four main areas of the syllabus (in bold above) and how they interlink. Enron is of course another useful and interesting story to tell and a search of internet news sites will throw up many instances of controversial corporate behaviour. There may be local stories which tutors can use. If students have an idea of practical scenario-based application from the outset, they are more likely to buy into the importance of the theory over the course.
The students may be comforted to hear that the exercise requiring analysis of a recent newsworthy story is a dissection of the kind of scenario the examiner will use in the exam, with requirements based on any area of the syllabus. A quick review of a past exam question at this point may serve to reassure the class in this regard before detailed study of the syllabus begins.
By encouraging student-led discussion (with appropriate tutor guidance) on the BP and Enron scenarios, elements of the syllabus can be delivered in an easier and more interesting fashion. For example, by establishing an appreciation of the circumstances surrounding these scenarios, candidates are more likely to accept that since corporate governance is often not enshrined in law, only good ethical standards will ensure that relevant disclosures are made by the directors (the agents) to shareholders (the principle). A discussion on whether it would be better to incorporate corporate governance into the law could lead on to Sarbanes-Oxley and, if resources allow, a look at an American set of accounts (or this could be a task to set as homework).
Wherever possible, practical scenarios should be continually integrated into Paper P1 tuition. A great start to the course, using Enron or BP, can be forgotten if each syllabus area is not similarly brought to life. For corporate governance, sets of accounts are easy to access and review. Directors' remuneration reports always provide plenty to talk about and the very fact that a tutor, in a room full of students, could be discussing IBM board compensation (for example), illustrates wonderfully what the aims of corporate governance in terms of affording power to stakeholders are about. Other board committees, their roles and responsibilities can be similarly illustrated.
If the tutor proves that the P1 syllabus is both contemporary and interesting, students will find the content easier to learn and confidence levels will increase in terms of writing competent answers to questions.
Throughout the course, it is important to keep revisiting the type of question which students will need to attempt on the day. While in other papers with technical content there may be a learning curve which rules out exam-standard work early on in the course, for Paper P1 this is not the case and the sooner students are exposed to exam-style questions the better. The use of a good textbook with practice questions throughout is essential as through exposure to questions students will learn to apply theories to specific circumstances.
The tutor's role in making the requirements of a question explicit to students is vital. For example, pointing out that 'evaluate' has a quite different meaning to 'explain' and going on to highlight that an 'explaining' answer will not score marks on an 'evaluate' question. Furthermore, the idea that candidates may be asked to 'argue from a perspective' needs to be introduced. This can be done in an entertaining way through role play. For example, a group of students could be assigned a 'pristine capitalist' agenda and asked to tell the rest of the class why it is acceptable to take over a company and immediately make employees redundant. This kind of exercise will also reinforce the idea that students are often asked to argue from a viewpoint which is not their own.
Finally, it is important to stress throughout the course the importance of presenting professional answers, with the relevant tone and language. This remains a significant challenge for many students. Section A requirements may be as diverse as writing a statement for the CEO to read out at a shareholders' meeting or drafting an internal memo from the CEO to senior management and so it makes sense for a tutor to ensure that tailoring written communication for a designated audience has been discussed in class. Again, this is illustrated most effectively by referencing candidates to specific real life examples.
Amy Thompson, tutor, Kaplan Financial