The global body for professional accountants

Why has ACCA changed the name of exam P1 from "Professional Accountant" to "Governance, Risk and Ethics"?

The name change, effective from June 2011, reflects the need for accountants to be fully trained in all aspects of governance, risk and ethics.

We have received feedback from employers in the professional services sector that finance employees must understand and be able to manage risk effectively, especially in the current economic climate. In light of their comments, the examination study guide now has an even greater emphasis on risk, particularly recognising, monitoring and mitigating risk.

The new title of the paper reflects this change in emphasis and highlights other areas of the syllabus that are dealt with in detail - corporate governance, internal control, and professional ethics.

As ethics could be a new area for many candidates, what is the best way of preparing for P1?

Candidates who are new to ethics are strongly recommended to take the professional ethics module in order to familiarise themselves with ethical theories and to develop ethical sensitivity.

Will there be any international versions of P1?

Yes, there will be an adapted paper for the Singapore market. Candidates in Singapore need to demonstrate ethical competence and professional values in the context of well-developed local professional codes of conduct, rules and governance.  

Line-by-line knowledge of codes and rule books is not required for the paper. However, candidates in Singapore should display knowledge of governance and ethics from their own local or regional perspective when answering questions.

Do candidates need to show understanding that there are different frameworks for corporate governance around the world?

Yes, to some extent but not in great detail.

Candidates can cite codes that apply to their own countries as well as codes that apply to other countries in answering questions.

For example, citing the UK Combined Code may be a good starting point when describing the main elements of an effective governance system. However, related codes exist in the UK and there are equivalent codes in other countries and regions of the world which students could mention. The study guide specifically mentions the Sarbanes-Oxley Act, as this rules-based legislation has international application.

Gaining a broad knowledge and understanding and developing the ability to critically evaluate the key principles of these codes is more important than learning the precise wording or a detailed knowledge of their content and clauses.

Should candidates cite examples when discussing for or against arguments?

Yes, markers will be looking for evidence of understanding and examples can provide them with this.

What is the difference between "ethical knowledge" and "ethical theory"?

Candidates are expected to know and to be able to reference "ethical theory". They should then be able to discuss the theory and build a case as to how it may be applied in practice; this is "ethical knowledge."

In studying the Professional ethics module, candidates may fully recognise for the first time that issues do not always have clear-cut solutions or answers.

It is difficult for some students to gain the marks in P1 because they are not used to presenting their answers in the way required. What would you advise?

Marks are awarded for presentation and the logical construction of an answer. It is important for students to become familiar with the formats and approaches (eg annual report, memo, letter) which they may need to utilise in the exam.

Candidates should also be aware of the types of answers required when questions use the verbs "assess", "analyse", "evaluate" and "criticise".

Sometimes candidates are asked to "critically evaluate" an approach - what does this mean?

This means to evaluate the approach of someone or something, but at the same time to criticise or find fault with it. This form of requirement is intended to test a candidate's ability to produce a cogent and coherent argument, with which they may or may not agree.

Do you have any advice about writing answers in the examination answer booklet?

It is important to clearly state the question number at the top of the page and indicate the question part near the margin. This will even more important when computerised marking comes in.

Will the Combined Code be assessed and shouldn't there be a list of examinable documents for P1 as with, for example, the accounting and audit papers?

An international perspective requires recognition that different jurisdictions require different (local) variants on documents. Examiners will look for local assumptions stated but not for the detail in any specific code or in country-specific legislation.

Codes are not examinable documents but they do provide important contextual background. Candidates should be aware that best practice may be developing in different parts of the world and codes may be a useful way of illustrating this awareness, but detailed knowledge of codes is not required.

Do candidates need to use examples of ethical dilemmas when explaining points to get good marks?

Getting candidates to learn how to apply aspects of the P1 syllabus to real situations is quite a challenge for tuition providers. Many P1 questions require the candidate to deconstruct a situation and examine the issues contained within them. It is therefore very good practice to examine current news stories which cover issues related to the P1 syllabus.

There are lots of good materials available in the media and on the internet, particularly at the moment when there are rapidly-changing economic conditions. The challenge for tuition providers is providing relevant, local examples which will capture their candidates' interest and stimulate them to discuss and think about issues covered in P1.

For many candidates, English is not their first language. Also, students from some parts of the world are not familiar with the concept of an environmental audit. Is this something that examiners should consider?

Examiners and markers are very aware that many candidates are writing in their second or third language. They are very sympathetic to this and are actively looking to award marks.  

With respect to environmental issues, though, part of the purpose of Paper P1 is to raise awareness of environmental audits. The syllabus covers the tension between issues of corporate governance and commercial pressures.

Will candidates be expected to produce industry-specific examples in the context of ALARP (as low as reasonably practicable)?

Specific examples can be useful to illustrate a certain level of understanding. Questions could be based on examples from specific industries.

To what extent is the paper assessing calculation? Do students need a calculator? Are computational questions likely?

Numbers may be used in an exam question to help enable the analysis of an issue. P1 is not a numerical paper but numerical information can be used as an example.  

Candidates might need a calculator. There is the option of including numerical content in an answer if it will help to demonstrate understanding of particular point. But there will be no complicated arithmetic.

In December 2010, the verb 'explore' was used in a question. This is not included in the syllabus's list of verbs. Could you elaborate on its meaning? Could other verbs be used in exam questions that are not on this list?

The list is not an exhaustive list and the verbs on it are intended to be examples.

The word 'explore' gives flexibility to the examiner and the markers since it implies that there are different approaches to answering the question.  We are not trying to trip up candidates and any appropriate approach here would be given credit. 

'Explore' is quite a forgiving word which gives the candidates a certain latitude in approaching the question. Markers are very keen to reward appropriate responses.

Last updated: 9 Jul 2014