I was pleased to find out recently that I have passed my Professional Accountant exam. This was the first exam I had taken at the Professional level and to pass it has certainly boosted my confidence. The mark I got while being good was not as high as past pass marks. The professional exams are harder than those at the Fundamental level. More importantly they require much less demonstration of knowledge and are much more about ability to analyse the information.
A particular important part of this course is the understanding of Corporate Governance and the importance of stakeholders. To get to grips with this it is necessary to realise why legislation or voluntary corporate governance became important to companies. The need to have corporate governance due to the split of ownership and control of companies was recognised many years ago, not just post Enron. Over the years corporate governance has evolved to meet the ever growing complexities of business. Finally major scandals such as Enron led to much more formalisation of corporate governance, particularly in the US where Sarbanes Oxley Act was brought in.
No doubt recent failings in many financial companies in the US and UK will lead to corporate governance being reviewed to see if it is still adequate. It certainly appears in the UK that the banks were taking very high risks, for their own gain (large bonuses), rather than running the companies in the best interest of their shareholders and stakeholders (customers). These companies were supposedly following the voluntary combined Code on Corporate Governance which suggests it is either insufficient or compliance was tenuous. I’m not qualified to answer that question but regulators no doubt will be looking into it in detail.
Paper P1 also includes ethics. No doubt all accountants will at some time in their career be faced with ethical dilemmas. By understanding the ethics theories hopefully it will help to resolve ethical issues as they arise. Particularly useful is an understanding of professional codes of practice that exist. They are there to help us and to ensure the accounting profession is not brought into disrepute.
I found Paper P1 very interesting and it helped to explain a lot of the changes that have taken place in my own organisation. It is not however an easy paper to revise for. You can revise the theories but you need to understand the subject in the context of different types of organisation. Exam question practice is important, particularly as in your job you are unlikely to be dealing with these issues on a day to day basis. It is also important to realise that in some cases there are not wrong or right answers to the exam questions. My advice is that when answering questions is to remember to put forward arguments for and against. It is very easy just to make up your mind what the right answer is and just put forward arguments to support this. I suspect a more balanced answer will gain higher marks as it demonstrates your ability to analyse the case and recognise different courses of action.
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