This article is intended to give you some real insight into the mind of the marker and to understand what they are looking for when they mark P1 scripts, but the general advice on technique in this article could equally apply to all Professional level exams
A candidate who wants to understand what the examiner, and more precisely, what the marker is looking for needs to know what goes through their minds when they are marking a candidate’s script.
This article will introduce you to a sample exam script from P1.
One member of the P1 examining team has marked a sample script and annotated the script with marks, indicating how many and where precisely marks have been awarded and has also provided explanatory notes justifying why the marks were given or withheld as appropriate.
This exercise is designed to give you, the candidate, an insight into the thinking process of the marker, explaining what they are looking for, what they award marks for and giving reasons why marks may not be awarded.
While the guidance given in the following script is fairly specific to the exam and the particular requirements of the questions, the marker of these scripts also makes general points about exam technique and some of the points also relate to demonstrating professionalism to gain professional marks where appropriate, but may also be relevant to those candidates that may have to sit the new Strategic Business Leader exam in September 2018 or later.
The P1 script is an example script for a typical candidate attempting Questions 2 and 3 of the September and December 2016 hybrid P1 exam.
The requirements for Q2 and Q3 are given below:
(a) Discuss the extent to which the main objectives of an internal control system were not achieved at Fortune Investments, and criticise how the behaviour of Stefan Krank resulted in a clear breach in his duty to his clients as their fund manager. (12 marks)
(b) Explain the importance of good quality information both for the effective management of funds, and their monitoring by investors. (7 marks)
Stefan Krank had told Mr Reynolds that ‘he always aimed to maximise returns on his clients’ investments even if this meant bending the rules occasionally’ to achieve this.
(c) Explain ethical relativism, and examine how Stefan Krank cannot justify his actions using relativist arguments. (6 marks)
(Total 25 marks)
(a) Describe environmental risk, and evaluate the sources of environmental risk which are likely to be identified during Oskal’s forthcoming assessment, and suggest ways the company could reduce their impact. (9 marks)
(b) Describe a framework which could be utilised by the board of Oskal for the management of risk. (8 marks)
(c) Explain the concept of integrated reporting <IR>, and explore how an integrated report covering the six capitals provides insights for the shareholders and other stakeholders of Oskal Petroleum. (8 marks)
(Total 25 marks)
Notes to accompany the marked questions from the P1 September/December 2016 hybrid exam
Q2a) asked the candidate to discuss the extent to which the main objectives of an internal control system were not achieved at Fortune Investments and criticise how the behaviour of Stefan Krank resulted in a clear breach in his duty to his clients as their fund manager. The 'and' in the question therefore requires two parts to a candidates answer.
A good answer to the first part of the question requires a candidate to have the technical knowledge to identify the objectives of internal control and to give a brief description of what each objective is trying to achieve. The candidate should then use evidence from the case scenario to explain why the objective has not been achieved at Fortune Investments. (½ mark for identification, and a ½ mark for description, giving a total of 1 mark per point made for why the objective was not achieved at Fortune Investments).
Note 1: The candidate has identified two objectives in the opening paragraph and has been given half a mark for each.
A better approach would be to take each objective in turn and cover all requirements relating to each objective before moving onto the next.
Note 2: This is a sentence that adds no value as it is not saying anything specific related to the question asked. It does not get any credit and is an example of poor time management.
Note 3: The candidate has attempted to justify why the objective failed and so has been given a mark. The candidate could have used more specific evidence from the case and the point is not well articulated, but this highlights the importance of making an attempt which could potentially gain the candidate marks.
Note 4: The candidate has not given the text book answer for the objective of internal control (the text book answer would be 'complete and accurate accounting records'). The candidate shows an understanding that it is about reliable information on which effective decisions can be made.
Note 5: The candidate does not give the most obvious evidence from the case scenario (which would be that the statements of investors have little resemblance to the reality of their investment fund). The candidate has given a logical, sensible explanation which has been evidenced from the case so is given the mark available.
It is important that candidates recognise that as long as their answer has been justified using the case evidence, they will be given credit.
Note 6: The point made has not been related to any objective of internal control (although does appear to be suggesting that this is about the safeguard of assets, so it is important that points are explicit in order to gain the full marks available). The candidate does then explain that there were no checks which caused the failure, so overall the candidate does deserve some credit.
This point only needs a small adjustment in order to gain the full two marks available for each point. (Suggested point on safeguarding assets is given below).
General comment – The P1 exam requires candidates to have technical knowledge and be able to apply the knowledge to the case. A good approach to this question would be to use headings that identify the objective, give a brief description of what the objective is trying to achieve and then use evidence from the case on why the objective failed to be achieved. So taking the last point in the candidate’s answer it would be presented as below:
The assets of the clients should be protected by Fortune Investments and the value should be protected by considering the risk of the investment decisions taken. (Then the candidate could state the point made in their own answer). The fund manager has a duty to protect the funding of the client and there was no check on the fund manager and so he was able to incur losses and reduced the value of the funds in his control.
Note 7: The candidate identified that the behaviour of failing to protect the investment was identified as a breach of trust.
Note 8: The candidate identified that the behaviour of acting in own interest was a breach of transparency and openness.
This part of the question was well answered. However exam technique in the presentation could be improved. The question asked for criticism of behaviour and how that resulted in a breach, so when presenting your answer it is useful to re-iterate the question requirement (underlined below) so that it is clear that you have indeed answered the question asked. So for this candidate the presentation could be improved:
'Stefan’s behaviour should be criticised because he failed to protect his client’s investment this resulted in a breach of trust which the client relationship should be based on. Stefan’s behaviour should be criticised because he acted in his own self-interest in order to maintain his lavish lifestyle this resulted in concealment and therefore a breach of transparency and openness in regard to his clients’ wishes.'
Overall this part question was worth 12 marks. The marked answer is worth 8½ marks.
Q2b) asked the candidate to explain the importance of good quality information both for the effective management of funds, and their monitoring by investors. To gain any marks a candidate needs to explain 'why' quality information is needed and not just state the characteristics of quality information and to gain full marks the 'why' also needs to be related to fund management and monitoring.
Note 9: This is just reiterating the requirement in the question and is not adding any value – so gains no marks.
Note 10: The candidate is just stating the characteristics of useful information with no detail or explanation and so gains no marks.
Note 11: The candidate has not attempted to explain why time saved is important and has not applied their answer to fund management or monitoring so only ½ a mark is available.
The candidate needs to explain how it is important to save time when returns are diminishing so that funds can be transferred quickly thereby minimising any losses. This would generate the application marks. (The candidate makes this point later and gains a mark – see note 15).
Note 12: The candidate has not attempted to explain why it is important to understand information and has not applied their answer to fund management or monitoring so only ½ mark available.
The candidate needs to explain that if information is understood then effective decisions on the right investments in the future can be made.
Note 13: The candidate has not attempted to explain why it is important to have accurate information and has not applied their answer to fund management or monitoring so only ½ a mark is available.
The candidate needs to explain that accurate information allows them to understand whether the investment is still performing within the agreed parameters.
Note 14: This is repetition of the point on time not being wasted and so cannot gain any additional marks
Note 15: This is the only point that has been applied so has gained a full mark.
Overall this part question was worth seven marks. The marked answer is worth 2½ marks.
Q2c) There was a statement from Stefan that 'he always aimed to maximise returns on his clients’ investments even if this meant bending the rules occasionally' to achieve this. The question then asked the candidate to explain ethical relativism, and examine how Stefan Krank cannot justify his actions using relative arguments.
Note 16: This is a good explanation of ethical relativism and has gained the two marks available for the explanation.
Note 17: The candidate states the action taken and justifies that the pre-determined set of rules in all circumstances is not ethical relativism.
Overall this part question was worth six marks. The marked answer is worth four marks.
This candidate delivered a good answer to part c) and stayed focused on ethical relativism. Many candidates compared relativism to absolutism and there were no marks for absolutism, but the question requirement did not require any references to absolutism.
Q2a) 8½ marks, Q2b) 2½ marks, Q2c) four marks
Total 15 out of a total of 25 marks
Q3a) required a description of environmental risk, an evaluation of the sources of environmental risk from the case and suggestions on how the company could reduce their impact.
Having described environmental risk, a good approach would be to identify and assess the first risk and suggest a way to reduce the impact and then move onto the next risk and follow the same approach until the time allocation for this part of the question had been utilised.
Note 1: A good description of environmental risk explaining the environmental effect of the organisation’s operations (company assets contaminating) and the liability (costs) and loss (fall in shareholder’s wealth) that could arise from the additional costs.
Note 2: The candidate has been given the mark for identification of a source of risk, but there is no explanation of the impact, so they have failed to gain the evaluation mark.
Note 3: Training is the suggestion for reduction and has been given credit.
Note 4: The next point has been marked holistically in that the whole paragraph does deserve marks, but the order of the answer is dis-jointed making it harder to identify whether the requirements have been addressed. The new regulations are stated in the first sentence of the paragraph, but with no explanation of why and then this is supported by the final sentence on costs of compliance and potential legal costs (which has been given credit as the candidate has been given the benefit of the doubt in trying to identify the risk of non-compliance). If the candidate had been specific about the costs and discussed high financial penalties the full two marks would have been achieved for source and impact, but the answer is not clear and explicit so only one mark has been given overall for source and impact. There are no marks given for the suggestion to transfer, as it is not related to when it would be used (ie low likelihood/high impact) or what form the transfer would take (ie insurance). This is too vague and not clearly answering the question.
Note 5: Again this answer is too general and not related to a specific source of risk.
Note 6: Again this question does not answer the question asked. Had the auditing been justified – ie that audit could highlight areas of weakness and remedial action suggested, then a mark would be given.
This highlights the need for candidates to plan and consider what the question is asking. This is a question where using the requirement in the question to structure your answer would make sure that all parts are covered. That means using the words source, evaluate and reduction of impact in your answer. So taking the candidate’s first point on spillages, a suggested approach might be:
'The first source of environmental risk is that extraction could lead to spillage due to faulty or mishandling of the equipment. The impact could be substantial in terms of the destruction of plants and the marine environment. The reduction of the impact could be prevented by undertaking planned maintenance of all equipment which would give early warning of any issues.'
Overall this part of the question was worth nine marks. The marked answer is worth five marks.
Q3b) asked for a framework which could be utilised by the board of Oskal for the management of risk. Any points made in a candidate’s answer needs to be related to Oskal.
Note 1: Not adding any value so no marks were given.
Note 2: Risk identification as part of the framework has been given a mark. Using the name of the company is not enough to get the additional mark for relating to Oskal. If the candidate had given an example of a specific risk faced by Oskal, then the second mark would have been given.
Note 3: Risk profiling as part of the framework has been given a mark but the diagram is not correct so not adding any value to the candidate’s answer. Had the diagram been correctly labelled (see below) marks could be given.
Note 4: Risk management as part of the framework has been given a mark had the various strategies been discussed in relation to Oskal, this would have generated marks.
Many candidates used the TARA framework to answer this part of the question. As no definitive framework was required, a detailed answer using TARA and applied to Oskal meant that candidates gained the full eight marks.
Note 5: Risk monitoring as part of the framework has been given a mark, but has not been applied to Oskal. The candidate needed to explain the importance of regular monitoring for Oskal because of the dynamic nature of the environment and the potential for the risk profile to change regularly.
General comment: The candidate started numbering the points in their answer and then gave up. There is no requirement here to number the points and a better approach would be to make each stage the heading and then explain underneath the heading what the stage requires and what that means for Oskal.
Overall this part of the question was worth eight marks. The marked answer is worth four marks.
Q3c) asked for an explanation of the concept of integrated reporting and how the report covering the six capitals provides insights for the shareholders and other stakeholders of Oskal Petroleum.
Note 1: The candidate demonstrates a limited understanding of integrated reporting and its communication of the links between financial performance and its wider social, environmental and economic context. There is no recognition that it is about illustrating an organisation’s ability to create value from their activities over the short, medium and long-term. A ½ mark has been given for the recognition of profit, planet and people, but it is not explained in the context of links and value creation, so it is difficult to be more generous. The answer focuses on how the accounting approaches that might be used and is not explaining the concept.
The second part of the question required a candidate to take each capital and explain its meaning and then relate these to Oskal. There is no mark for identification only. There is a ½ mark if the capital is identified and the meaning is explained and then a ½ mark for any application to Oskal.
Note 2: Financial capital is identified and explained, but not related to Oskal.
Note 3: Human capital is identified and briefly explained, but not related to Oskal.
Note 4: Intellectual is identified and briefly explained, but not related to Oskal.
Note 5: Natural is identified and briefly explained, but not related to Oskal.
Note 6: Manufactured is only identified.
It is disappointing that this part of the question was not always well answered given the prominence of integrated reporting in the syllabus and in the wider business press.
Overall this part of the question is worth eight marks. The marked script is worth 2½ marks.
Overall the question was worth 25 marks. The marked answer is worth 11½ marks.
Overall section B is worth 50 marks. The marked script is worth 26½ marks.
Q3a) five marks, Q3b) four marks, Q3c) 2½ marks
Total: 11½ out of a total of 25 marks.
Total marks for section B 26½ marks out of 50 marks.
The candidate has scored 26½ marks for section B which is a marginal pass on this section. It shows how candidates must be fully prepared in terms of technical knowledge of the syllabus and exam technique in the ability to apply the technical knowledge to the case scenario. Any gaps in knowledge or ability to apply could harm your chances of passing.