This is from the “Accounting Makes Cents” podcast episode #57 released on Monday, 29 January 2024.
In today’s episode, we’re going to start off the year with something serious but I believe is a necessary In today’s episode, we’re going to look at the answer walkthroughs that CIMA has provided students on their website. I’ll include the website url for these walkthroughs on the show notes. The most recent walkthrough provided by CIMA at the time of this episode is based on the May-Aug 2020 exams. Now, CIMA doesn’t provide walkthroughs a whole lot. It comes once in a blue moon, that’s why we’re so excited. But jokes aside, I believe that these can prove invaluable to students and remove the myths and questions surrounding the case studies – things like: how long should a student answer be, whether knowing theories can assist in the answer or not, what constitutes a good answer, and many more.
Jump to show notes.
What are walkthroughs?
So first, what is an answer walkthrough? An answer walkthrough is a step-by-step explanation or demonstration of how to solve a problem or answer a question. It typically breaks down each part of the problem, providing clear explanations, examples, and reasoning behind each step. Answer walkthroughs are commonly used in educational contexts to help students understand the process of solving a problem or arriving at a solution. They can be particularly helpful in complex problems, like the case studies, where understanding the theory behind the application is as important as arriving at the correct answer.
So now that we know what an answer walkthrough is, let’s take an example of the management case study one that’s been provided. Now just to throw this out there. Even though I’m only doing the MCS one right now, this discussion and analysis would apply to the OCS and SCS walkthroughs as well.
Example excerpt from the MCS walkthrough
Failed answer
I’ll draw your attention to the answer portion of the walkthrough. This is on page 2. The particular sentence that I’m going to do the analysis on is the one on Net present value and IRR.
I’m now going to read what the student answers were on this particular point. I’ll start with the student that failed. The failed answer consisted of:
“Point 1 – Even though the the NPV of Swimming pool is slightly lower than Gym NPV by M$0.46mn the investment M$ term is less Mn 20MnthanGYM (sic).
Point 4 – IRR which the cost of capital at which our NPV become Zero the Swimming pools IRR shows at 29.6 % where as for GYM is 19.3%.”
So you’ll note that the failed answer did not really add anything to the conversation. Simply stating that this is not the same as that, will obviously not earn you a lot of marks. The whole point is to showcase what the story behind the movement is. So it’s lower or it’s higher, why did it happen? What does this mean for the business? How would it affect it? This is what markers and examiners describe as “not applying to scenario” because the student has simply repeated information that has been given to them.
Think about this when you get financial statements and you look at numbers from the current year vs the previous year. When you report this to your stakeholders, you don’t just tell them that this line went down or went up. Your duty should include stating “this line went down because of these various reasons, blah blah blah.”, right? That’s exactly what is lacking in this answer.
Good answer
Now, let’s take a look at how the good answer did it.
The good answer says: “Net present value (NPV) is the most commonly used method for project appraisals. It is preferred to IRR because it is an absolute measure so it allows for comparisons between different projects. For the pool and the gym projects at Alpaca, we can firstly see that both NPV’s are postive and so each project would be acceptable as the expected present value of cash inflows are greater than the present value of cash outflows. Secondly, we can see that the gym project has a higher NPV (M$8m) compared to the pool project (M$7.5m), therefore if we are restrictred with our capital investment funds for any reason (such as external limitations), then it is favourable to proceed with the gym project over the pool project, due to the higher NPV.”
Based on just length, you can see that more thought has been given here. The student lays out the answer wherein he/she introduces the theory, talks a little about the theory. You can see it’s not overdone, it doesn’t need to be extensive, just a brief overview of why we are using it here in this situation.
Next, the answer goes on to use the information given. So here is when you start the comparison of what went up, what went down. But then you also need to provide insights in getting this information. What does this information do for you? You’ll see that the good answer stated why one would be better than the other. If there is a capital restriction, it’s better that we go with a particular choice rather than the other one. You can see the train of thought that this student had. He actually took the information, obviously restated some to show that he’s going to use this information, and then proceeded to say what this information told him in terms of how it can help with the decision.
So that’s it in terms of the meat of the answer. That is how you’re going to present your answers. You want to make sure that you are not just simply restating information, that you are using the information to help you with your arguments.
Other differences
There are other differences between the good and failed answers that I want to point out briefly here while we’re doing this episode.
Length: The good answer is considerably longer than the failed answer. Now, generally, longer answers would mean more meat, more analysis, more discussion. Hence why they work better. But having said this, you have to understand too, that if you write longer answers just for the sake of fillers, you’re also not going to score well. So the actual answer also does matter. So when you’re putting together your answer, you shouldn’t really just be looking at putting as long of an answer as possible, but that you are addressing the requirements.
Spelling: You’ll note that both answers contained small spelling mistakes here and there, and you’ll note that the walkthroughs presented the answer as they are written. It’s not a big deal if you misspell words, the main thing is still that the answer is understandable.
Headings: Students may be surprised to see that using headings does make sense. I’ve had a blog post about using headings before and I want to reiterate this again, since a lot of students feel that this is something that doesn’t benefit them. You can see as you are reading the answers, you yourself benefit when you are reading the answer with headings. You can see that the student signifies with the heading that he/she is making a big point here.
Theory: The use of technical knowledge is demonstrated on the walkthrough. You can use it to help you structure your answers. You can use it to help you explain your point initially as a jumping point to show where you are going with your arguments. It doesn’t hurt to show that you have technical knowledge of a topic. In fact, I find that if a student is well supported by technical knowledge on a certain topic, it is a whole lot easier for that student to apply it into a particular scenario.
Anyway, that’s how you can use the walkthroughs to understand what types of answers CIMA deems as good answers at the case study exams.
Show notes simplified
In this episode, MJ the tutor explores how to use the walkthroughs that CIMA has provided students to learn how to put good answers together. Answer walkthroughs are commonly used in educational contexts to help students understand the process of solving a problem or arriving at a solution.
Resources and links from this episode:
CIMA Walkthroughs of Real Answers – https://hub.cimaglobal.com/resources/A-Walkthrough-of-Real-Exam-Answers
MJ THE TUTOR 