Most candidates will have started at this point their final study period leading up to the UFE. UFE Blog will be covering more specific topics from here on in. Today’s post is not a comprehensive guide to case approach but just some tips in areas that candidates frequently struggle in.
Identifying Real Required and your Role
The Real Required is a direct link to a competency that is being evaluated and is what you are expected to do in your response. Your role defines the type of response you are going to present which can vary because your role determines who the “customer” of your response is. For example, if you are a CRA tax auditor you are concerned about the client following the tax rules and paying their share of tax, not about giving tax advice to the client on how to save tax. This necessarily changes the type of response you give.
UFE Cases will present you with information overload, particularly on Comps, but in the majority of cases the real required are actually clear. You’ll often find them on the first page or two in the scenario introduction section of the simulation but the odd one can also pop up later on in the simulation (particularly in comps) so keep your eyes open, especially if it seems like not enough have been shown in the introduction given the length of the case.
The real required are usually something the client or boss asks you to do directly (they need it) while sometimes you’ll have requests that don’t seem as urgent but would be helpful which are often just secondary indicators which you should leave alone.
You should write down each real required on your outline! Since these related directly to a competency that is being evaluated, responding to these is where your marks come from and you don’t want to chance missing them or misunderstanding them. The more clearly you can write them (word for word, even) the better.
Reading on UFE simulations must be active reading. Reading is where a lot of the hard work and analysis is done since when you read you’ll be
- identifying issues;
- finding case facts to support your analysis; and
- forming the structure of your response on your outline.
When reading, my suggestion is that you identify the issue in the simulation paper and reference to it on your outline using a page number. Write the issue on your outline but not case facts, only a reference to the case facts. Highlight the case facts of the issue on the simulation paper with a keyword or two so that when you move from your outline to the simulation paper you can find it quickly. At the end of your reading and outlining phase, which can take around 1/3 of your total time, you should end up with an outline that forms the structure of your response and where the outline refers to each case fact to support your response. Avoid knowledge dumps! If you don’t have a case fact to support a point it is not useful and wasting your time!
Using the Exhibits
A lot of advice you hear will tell you to take a few minutes, prior to reading your whole case in detail, to flip through the exhibits and get an idea of what kind of information is in each one and the purpose each one serves in the simulation.
Here’s a few things to think about while reading the exhibits related to PMR issues:
- Number of years presented – if more than just the previous comparative year is presented think about possible trends you need to look for and discuss
- Dates – think about issues around the date of the financial statement (are there cutoffs, audit report date issues, a date on which the company will be sold, etc.)
- Materiality – keep an eye on amounts which are material or above average as there may be issues around these that may need your attention
- Year over Year Changes – always compare both years and look for year over year changes that are abnormal or may need your attention
- Strange lines – if there is a line on the F/S that you don’t recognize consider whether is should be there or presented with something else
- Missing lines – if there is something missing but should be there in the simulation context then it should go on your list of potential issues, where is the financial information for this buried instead?
- Eyeball Financial Ratios – Most cases won’t actually ask your to calculate financial ratios but it’s a good idea to always eyeball or do a quick calculation of financial rations such as debt-to-equity, working capital and changes in net income and margin. This is one of those areas where you may discover something that’s a little more on the undirected side.
Thinking about these issues as you read the exhibit and analyzing them together with your simulation scenario should give you some good ground to walk on for your response.
Before starting a quant, always write down the purpose of the quant. What information will the quant provide you and how do you use it in your case? This will save you from having quants which you don’t need and badly wasting your time. This purpose should also be stated in your actual quant for the marker.
You’ve probably spent around 1/3 of your time reading the case and creating the structure of your response on your outline. At this point it’s a good idea to take a moment, think, and formulate a strategy for your response. A solid outline will likely give you too much to cover in your remaining time so you must rank and allocate time to respond adequately without going over. A solid outline will also help make the actual writing part of your case go smoothly.
This is a critical step and you’ll get better each case at estimating how long it will take to cover each issue but I do recommend you write down, on your outline, how long you are giving each issue and then monitor this while writing. This will prevent you from going over your allotted time by knowing when to stop discussing an issue and moving on to the next one. Remember, each indicator is worth the same amount of points on the UFE so it’s important not to drop one indicator in order to go from RC to C in another indicator. Although technically, if you score RC on the other indicator, you get the same amount of Level 1 points, you can increase the risk of not getting enough C/RC for level 2 and 3.
Conclude and Recommend
Try to leave yourself a little bit of time at the end of each simulation for an overall conclusion and recommendation. This will be the part where you can do integrate all of the case and provide some advice overall to your client/boss. This is a great place to make a conclusion about some fraud if it exists, invest or not decisions and other pervasive issues such as long-term viability of the company, trends in the industry, etc. This could take the form of a single part of the case (one paragraph) or you could do this after each sub-heading where you’ve tackled the real required and respond to that issue directly if you haven’t already. In comprehensive simulation, an executive summary that briefly goes over everything you’ve answered in detail is pretty much a must-have.
What other approach problems are you having in your simulations? Any advice on what has worked for you?