This is from the “Accounting Makes Cents” podcast episode #31 released on Monday, 16 January 2023.
In this episode, we’re going to discuss the value in using past exam papers for your CIMA case study preparation. Additionally, I’m going to try and show how you can use these past exam papers to practice questions and develop answers using the current CIMA case study pre-seen information.
Jump to show notes.
This is actually quite an interesting question I got asked by a student this past weekend while I was teaching one of my classes. The question was: “Is there value in going through past papers to prepare for the exams?” The simple answer to this is yes. Now this is not one of those questions where the simple answer is yes, but ultimately it’s a “no, you shouldn’t be doing it”. What I want to explore today is that the answer is yes, and explain why it’s a “definitely yes” answer.
Let’s get right into it.
Past paper questions have value in them in that there is a whole library of them available to students online, you just need to get your hands on them. They can normally be found on the CIMA website, if you just search for past papers, they should come up. Each session in the past always had 3 exam variants at a minimum. Each variant had 4 sections. And then each section had 2 requirements at the very least. So that would mean that for each exam session that you want to go through for the questions, you will have face 24 requirements or 12 questions and suggested answers. And you guys can imagine, CIMA has been running exams like these for a couple of years now so there is a lot of available questions and answers for you guys on the website. This is at minimum.
The general issue with using past paper questions is that the suggested answers that go with the past question do not always link back to the current pre-seen material and situation. This is a bigger issue especially if you can’t visualise how you can apply it to your current situation. Each session focuses on different pre-seen companies. The companies come with their own sets of background information, their strategies, strengths and weaknesses, etc. So with all this information available with regards to the companies, there will be no two companies that will be exactly alike or exactly the same. Hence, when you think about the answers for specific questions, the answers will not exactly be the same.
The trick is to read and face the questions on the past paper, but when you are thinking of the answers, you should use the current pre-seen backgrounder. You are actually, essentially putting your own suggested answers together for the past paper questions but just updating it to the company you are going to be examined on.
Now, in having done this, you may ask – well if we are just looking at the questions and not focusing too much on the suggested answers, then is it okay if we just disregard the suggested answers?
I’d say no, because there is still some value in those. Granted, like I said, they may not link back exactly with the pre-seen company that you have now, but you should still be able to follow the way CIMA suggests how you should put together your answers and just interchange some of the logic and reasoning behind those suggested answers. Another thing is that they give you points to consider, especially if you’re having trouble coming up with points for your current pre-seen. You may be able to use those suggested answers to come up with the points, or at least there is already pre-loaded points that you can think on and how you can relate it back to your pre-seen.
For me to show this, I’m going to have to grab a question from a past paper exam and use that as an example. The question I’m using today is on the May and August 2021 CIMA Management Case Study (MCS) Exam Variant 5 Section 3 Requirement B. I repeat May and August 2021 MCS Variant 5 Section 3 Requirement B. The question refers to a discussion of the “characteristics of debt and equity as potential sources of finance as a result of a Board’s decision”.
So for that particular session, the pre-seen company was a company called Trayyner, which was an unquoted company offering executive training courses. When thinking about a discussion on funding sources, we know that there is a difference between what is available to quoted and unquoted companies, especially ones related to equity.
The suggested answer on this particular requirement started off looking at specifics of the funding required for the venture. There are specific numbers that were shared on the suggested answers, which we could also look at and switch, using the numbers on our current pre-seen, where applicable.
A few paragraphs then of the suggested answer dealt with debt and what the gearing ratio of Trayyner was. This was then used to gauge how much it would affect Trayyner’s gearing ratio once the borrowing has been provided or obtained. In practical terms, we should also be able to use the gearing ratio of our current pre-seen and determine how much effect that would have if additional borrowings were obtained.
Now onto the equity side of things, and here is where it gets interesting. Since this question asked for a discussion of funding sources,, it’s always a good idea to present sides to the discussion. In this case, since we’ve already done a few paragraphs on debt, we should do a few on equity as well.
Trayyner was an unlisted company so one of the main things that was not available to it as a funding source was to offer the shares on the stock exchange, which would be a good idea or good way for a listed company to raise equity funding. The next few paragraphs of the suggested answer dealt with how we could gain equity funding as an unlisted company, so things like offering a rights issue came up in the discussion.
I highlight this part because you could end up having a listed company as a current pre-seen and this is not uncommon. Actually, most pre-seen companies in general are listed companies. So in which case, you could then add the discussion of offering shares on the stock exchange, how quick and easy it is or how difficult and cumbersome it is, and whether it’s a good idea or not to use such a way to fund your investments.
So you see, even if the suggested answers do not totally link back to your current scenario, there are still ways for you to be able to use those answers to help you formulate good ones or good points for your current pre-seen.
Please note that although I’ve used a Management Case Study past paper, that this practice of going through the past papers can also be done with the Operational Case Study and Strategic Case Study levels.
Show notes simplified
In this episode, MJ the tutor discusses the value in using past paper exams for the CIMA case study preparation. Additionally, she shows how a student can use past paper exams to practice questions and develop answers for the current CIMA case study pre-seen information.
Resources and links from this episode:
CIMA past paper example
“Ding Ding Small Bell” (https://freesound.org/s/173932/) by JohnsonBrandEditing (https://www.youtube.com/channel/UC1RImxnsbfngagfXd_GWCDQ) licensed under CC0 Licence.