Monthly Archives: June 2013

Go get back to real life for a few weeks!

Those who just finished SOA, congratulations!

Now go get back to real life for a while. Take some time off, get back to work, do whatever it is you want while waiting for the results. Just don’t think about the exam too much 🙂

Yeah, I know.. Look at me saying this silly stuff, easier said than done, of course!

Congratulations once again!

Best of luck friends – SOA Final tomorrow!

Quick thanks to everybody who has offered kind comments – I’m glad you’ve found the blog helpful.

SOA is a weird kind of shared experience, there is something sort of cool about everybody suffering through the same stuff together. My experience there certainly was memorable and despite the suffering part of it, I look back pretty fondly on the experience – I hope you will too.

You’re last piece of communal suffering is tomorrow and Wednesday – Warmest wishes and best of luck! Take it easy today and get lots of sleep.

Last piece of advice – avoid all mention of the exam on Tuesday. If you think you did poorly, duck out and go do your own thing for the rest of the day, stay away from SOA people. If you think you rocked it, be a good person and don’t go around telling everybody else about it since not everybody may feel that way and it’s easy to shake someone’s confidence. Many people feel as though they did poorly one of the days, it means little, treat each day individually and try to rock it!

Value of re-doing mock exams

With only a few days left, it’s important not to shake your confidence going into the final. A lot of people will choose to take the two days prior to the SOA final off while some will only take one and others just can’t seem to do it. All of these approaches can work depending on your style. I’m a fan of taking at least the day before off to recharge and get a good sleep.

What I do recommend though, is if you’re going to do any mocks in the last few days, is to redo an old one that you scored well on. A lot of people call these confidence builder multis because that’s the purpose. Nothing could be worse than scoring a bunch of NAs or NCs the day or two before the real exam and crushing your confidence. A great way to still keep your skills sharp and prevent the loss of confidence is to write exams which you know you’ll score well on.

The same advice was given for the UFE and it’s just a nice preventative measure. All these exams can get into your head so I always like to play it safe. Best of luck and enjoy the weekend – get rested and ready.

Be confident in Assurance and PMR – Part 2

PMR will make up 20-30% of the exam marks. It should go without saying that you should have some strength in this indicator in order to stay competitive and make the rest of the exam easier on yourself.

By now, you have probably encountered the majority of the types of situations you may encounter on your final and you’ll have some idea where you stand.

Within the PMR competency, here are some ways you might be able to stand out:

  • Quantify issues whenever possible – This doesn’t mean just in the quant questions but anywhere you get the numbers to work with is an opportunity to add some depth by giving numeric behind your qualitative response.
  • Ranking – Understand that material issues and numbers are more important while other more minor issues can be left behind when time is scarce. The real easy stuff is often in there to take up your time and doesn’t add a lot of value.
  • Using case facts to backup your discussion – By far, something that a lot of candidates struggle with at this point is not enough case facts. Whenever writing an issue, always do it in terms of the case fact. In PMR, I always wrote the criteria supported by the case fact in one sentence or bullet point.
  • Don’t be afraid to use that handbook – It’s an open-book test! I used the handbook like crazy for SOA and UFE. What an unbelievable source of technical. For specific issues, the technical is often already there.

What other PMR tips do you want to share?

Be confident in Assurance and PMR

While this advice is aimed at SOA candidates in Ontario, it does apply mostly to those writing only the UFE.

Assurance will make up 25-35% of the exam marks while PMR will make up 20-30% of the exam marks. It should go without saying that you should have some strength in these two indicators in order to stay competitive and make the rest of the exam easier on yourself.

By now, you have probably encountered the majority of the types of situations you may encounter on your final and you’ll have some idea where you stand.

Within the Assurance competency, here are some ways you might be able to stand out:

  • Strong procedures – It’s almost impossible that you won’t see at least one or two indicators where you’re required to write procedures. At this stage, a lot of candidates are still weaker with procedures so this might give you and edge if you can stand out. Remember that procedures cover off a risk area and be specific!
  • Know your special engagements – You should have these committed to memory. They come up often and it’ll go a lot quicker if you can remember them and what they’re about.
  • Understand the RAMP approach, especially the Risk – Understanding the different types of risk and how they work just makes your response easier to read and follow.
  • Link materiality to users – Materiality is related to users and not to risk so be clear why you’re setting materiality.
  • Control Weaknesses – The Weakess, Implication and Recommendation should be clear and specific.

Part 2 – PMR Tomorrow.

What other suggestions do you have to perform strongly in Assurance?

Don’t go over the top

As SOA begins to wrap up slowly it’s important to start watching for signs of burnout or too much stress in your life. SOA, almost by definition, is a stressful time that will take a lot out of people and it’s tempting to just try to get through another week at the same pace as before.

I never like to operate using definitive rules on UFE Blog and I think CA candidates have good judgments to ‘know thyself’ and do what’s best for you but in my experience, going overboard and not watching for burnout are common occurrences during the final week of SOA.

For the final exam you want to be in the Peak Performance sweet-spot. Going overboard on studying to the point where you just can’t stand to look at another case or read another handbook section might be considered going overboard and there’s a real chance your performance will suffer due to the added stress.

This might be the week to ease up a little and take extra care of yourself. Medidate, do Yoga, get some exercise, whatever it takes to keep your stress managed and the good kind of stress. Here’s some more tips we’ve shared in the past. My favourite has always been to do a lot of laughing – watch funny stuff on TV or just be around people where you’re laughing a lot. I was lucky I had good study partners and friends at SOA which made it easy.

Think about motivations

Built into many simulations, you have certain motivations that you need to consider which may play a real role in the simulations.

Motivations can lead to bias.

 

What’s the motivation of a company?

It can be many things.

Some are motivated to survive. If there are investors or bank covenants which could lead to the bank calling a loan, the company will be motivated to meet whatever conditions are set in the bank covenant and therefore may have a bias to overstate one thing or another. Almost with certainty, if there is a covenant mentioned in the case you need to do a calculation to determine if the company has breached its covenant.

Perhaps the company needs a clean audit opinion and this has led management to be less then honest about something.

 

People can also have motivations.

Perhaps an organization has stock options or a bonus program which pays out based on gross sales or net profit or some other measure. Management wants their bonus and this may create a bias to overstate sales or profit in order to gain the bonus, especially if the bonus is a percentage of sales or profit. Money motivates people, at least in UFE cases.

Other user needs could include tax issues, everyone wants to reduce taxes but is there a bias that’s resulting in tax evasion? Or maybe the sale price of a company is based on assets in which case there is a incentive to maximize the assets.

This sort of thing is best thought about during your analysis phase as this is the best times to look at the bigger picture and try to link all these things together and integrate it into your analysis and response.

 

While bias doesn’t always mean fraud, it’s certainly one element of the fraud triangle. Often, this is the stuff that UFE PQs are made of. A quick minute of thought in your analysis can add some overall depth and integration to your analysis.

SOA Mock Marks

Those of you attending SOA hopefully wrote your first communal SOA mock exam last Friday (I don’t count SOA1) which is the first time you’re getting a good comparison vs. the group.

The final SOA exam is two days, one comp (5 hours) and one day of multis (3 multis in 4 hours) and it’s scored in a similar way to these mocks so it’s a representation of where you might realistically be.

Things happen.

During SOA I scored 8th decile on SOA2 which caught me by surprise since I had been doing well previously and this was not the mark I expected. I screwed up and misunderstood one of the most important aspects of a case and as a result I got punished for it with a low score. If this happens to you, don’t panic. This situation doesn’t mean you’ve been doing it all wrong, it doesn’t mean that now you need to change your study plan and go twice as hard and it doesn’t mean you deserve to fail or will fail. Handling this kind of situation well is key to doing well going-forward.

What did I change?

Not that much, actually. I debriefed the case and figured out why I did badly. It turned out to be that I misinterpreted one of the key parts of the case. I learned my lesson from a good debrief and then I continued with my plan. I already had a reasonably busy schedule, I was doing on par with my other mocks, my study partner didn’t think the mock represented my normal performance and that was it. I had no reason to deviate from my plan based on this one (albeit important) data point.

What not to do

The lesson is that you shouldn’t make this decision too emotionally. At SOA, especially after seeing your first comparative mark, it’s easy to get upset when it’s not as high as you want. You’ll no doubt hear all the 1st decile kids bragging, too. Don’t panic, and don’t take yourself out of the game as a lot changes between this mock and the final. For every first decile you hear about, remember that there is someone in every other decile as well.

Figure out what went wrong and tackle it like you would any other mock.

How did the rest of SOA go for me?

The following week I scored really well on SOA3 and I did well on the SOA final as well. Based on my experience and that of some of the people who have shared their marks with me, performance bounces around. There will always be those that go 1st decile all the way through, but many are great game-day performers and will improve significantly during the final while others overstudy and/or panic on the final and score badly relative to where they were before. This leads to a mixup of all the scores in general, so like with CKE, you may be surprised where you land.

Keep at it. Or.. as all the kids are saying now a days, keep calm and write on.

When might I see my SOA2 results?

No doubt everybody is anxiously awaiting results. While as far as I’m aware, the ICAO doesn’t tell you when you’ll get them, while I was there we received both results the Tuesday following the exam in the afternoon. Just don’t hold me to it 🙂

Weekend Reading

I know some of you are dying for some additional (light) accounting reading over the weekend. For those, we have some good stuff below.

krupo’s blog A Counting School – Hardcore Chartered Accountancy has recently had some good stuff, discussed of course in his usual amusing way.

Kayla Switzer, from Western Canada also had an update recently encouraging candidates to start study slowly for the UFE. I’m sure many Ontario students are jealous right now. Tax week was light, right?

And another reminder, for those looking for a study partner or group, do check out the Study Buddy Search which has a bunch of people searching.

Have a great weekend!

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