Case Study: Understand the Issue
Case Study: Understand the Issue Before contemplating attempting a case study exam (be it a mock or real exam) you have to understand why you have been asked to compile […]
Case Study: Understand the Issue
Before contemplating attempting a case study exam (be it a mock or real exam) you have to understand why you have been asked to compile the report. You will not know the exact requirements in the exam paper but you should have gleaned from the Advanced Information what the ‘issue’ is for the business in question. Try to appreciate the point and the case study will stop being an exam and will become something you are able to do because you know the reason why! (I am not naive enough to think you do case studies for the fun of it but if you can treat it as something with purpose – other than your eventual qualification – then the whole process will become a lot easier)
In reality clients have different needs and goals and the same is true of your ‘client’ (or occasionally employer) in the case study. In studying for case study you need to expose yourself to as many cases as possible and in doing so you will appreciate how the ‘issue’ transfers itself into what the examiner believes to be a reasonable answer.
The most common phrases I hear from students when going through individual scripts and marking grids are…’but that is so obvious’ or ‘I knew that’ or ‘none of this is difficult is it?’. All of these comments are true, so what do students need to do to ensure they get these relevant comments down on paper. I think the key is to understand the ‘issue’.
For those of you who have not yet studied for the case study, I do not want to give too much away from the real scenarios as the point of practice papers will be lost. The examples I am going to use are so obvious from the relevant Advanced Information of the particular cases that there is no risk of breaking ICAEW official secrets.
November 2013 Lighter Tread – Operating profit margins have been falling for the past two years. This is as a result of rising costs and a static sales price. Therefore, no surprise that costs and expense analysis formed a significant part of the financial analysis requirement.
November 2015 Cyclone Cycles – Cyclone are heavily dependent on their relationship with the bank and the flexibility of the short term financing. They have a £1.7m loan due for repayment in April 2017 which has an interest covenant attached to it. Therefore, no surprise that an accounting adjustment would be needed which if carried out prudently, would mean Cyclone breaching the interest cover threshold.
November 2016 True Taste – True Taste are having experiencing difficulties in importing grapes overland from Iran (and some certification problems have come to light). No surprise then that the exam offers True Taste an alternative which also allows them to address business trust issues identified in the AI as well.
It is very important that you state your opinion categorically (conclusions and recommendations).
When you review the marking grids after attempting a case study, it is really helpful to note how many times the ‘issue’ is referred to. It can feel like you are having to repeat yourself in your script but you have to remember that the context of your commentary changes with each requirement in the exam. As long as you reflect the relevant context in what you say, then you will get the credit for any conclusion you reach.
To reach this point, however, you have to present a balanced view to the Board. You have to present the Board with the pros and cons (even if you think the conclusion is so obviously for or against their plan). It is very easy to forget this and just run with a one sided argument – the Board (and as a consequence the examiner) will not reward you for this. They want your conclusion but you must remember the ultimate decision is theirs to make and so they need all the information to reach the correct decision.
Finally, the case allows you to show your potential to be the kind of business adviser that the ICAEW wants the modern day accountant to be. You are being asked to write a substantial report to the Board of Directors – it doesn’t get much more exciting than this in our world! Therefore, go into the exam feeling like an accountant – by that I mean don’t wear jogging bottoms and flip flops because they’re comfortable! Go in looking and feeling like you mean business. Dress smartly, want to be taken seriously, feel like you deserve the opportunity to tell this Board what you think!
Reed Business School