The first article in this series of two on Paper P7 case study questions discussed question style, what to look for in the requirements, how higher-level skills are tested, and the meaning of professional marks within a question requirement. This second article goes through part of a typical Section A case study question, applying the recommended approach described in the previous article. This approach comprises four stages.
STAGE 1 – UNDERSTANDING THE REQUIREMENT
The first thing to do is to read and fully understand the question requirement. Here is the requirement we will be looking at in this article:
‘Prepare a report, to be used by a partner in your firm, in which you identify and evaluate the professional, ethical, and other issues raised in deciding whether to accept the appointment as provider of an assurance opinion as requested by Petsupply Co.’ (12 marks)
Note: this requirement includes two professional marks.
Having read the requirement, break it down. You are asked to do two things:
- identify, ie state from the information provided
- evaluate, ie discuss from a critical point of view.
The requirement asks you to consider ‘professional, ethical, and other issues’. This could cover a wide range of considerations, such as:
- ethics: independence, competence, conflicts of interest, confidentiality, assessing integrity
- professional issues: the risk profile of the work requested, the fee – and whether it is sufficient to compensate for high risk, availability of staff, managing client expectations, logistical matters such as timing, legal and regulatory matters – such as money laundering, and (in some cases) obtaining professional clearance
- other issues: whether the work ‘fits’ with the commercial strategy of the audit firm, the potential knock-on effect of taking on the work – such as the impact on other clients, or on other work performed for this client.
You are asked to produce a report, so remember that the professional marks available will be awarded for using the correct format, the use of professional business language, and for presenting your comments as a logical flow culminating in a conclusion.
From reading the requirement, you know that the question scenario will be based on a potential assurance assignment and will be broadly based around acceptance issues.
STAGE 2 – READING THE SCENARIO
When reading through the detail of the scenario, you should now be alert to information relevant to this requirement. Highlight important points that you think are relevant to the scenario and remember to focus on issues that could affect your acceptance of a potential assurance assignment.
Now read the following extract from the scenario and highlight the salient points – remember to look out for any factors relevant to the ethical, professional, and other issues described above.
Extract: You are a senior manager in Dyke & Co, a small firm of Chartered Certified Accountants, which specialises in providing audits and financial statement reviews for small to medium-sized companies. You are responsible for evaluating potential assurance engagements, and for producing a brief report on each prospective piece of work to be used by the partners in your firm when deciding whether to accept or decline the engagement. Dyke & Co is keen to expand the assurance services offered, as a replacement for revenue lost from the many small‑company clients choosing not to have a statutory audit in recent years. It is currently May 2007.
Petsupply Co has been an audit client of Dyke & Co for the past three years. The company owns and operates a chain of retail outlets selling pet supplies. The finance director of Petsupply Co recently communicated with your firm to enquire about the provision of an assurance report on data provided in the Environmental Report published on the company’s website. The following is an extract from the e-mail sent to your firm from the finance director of Petsupply Co:
‘At the last board meeting, my fellow directors discussed the content of the Environmental Report. They are keen to ensure that the data contained in the report is credible, and they have asked whether your firm would be willing to provide some kind of opinion verifying the disclosures made. Petsupply Co is strongly committed to disclosing environmental data, and information gathered from our website indicates that our customers are very interested in environmental matters. It is therefore important to us that Petsupply Co reports positive information which should help to retain existing customers, and to attract new customers. I am keen to hear your views on this matter at your earliest convenience. We would like verification of the data as soon as possible.’
You have looked at Petsupply Co’s Environmental Report on the company website, and found a great deal of numerical data provided, some of which is shown below in Table 1.
I applied through college or university. I interviewed at Protiviti (New York, NY).
The interview was a very smooth process. I applied through my University's On-Campus recruitment. The initial interview was a one-hour appointment on my campus, split into two sessions. The first session was a discussion based on a case study provided by the Protiviti recruiter the evening before. Given a limited amount of time to analyze the case study, one is expected to be able to bring forward conversational points and notes of attention regarding the case. But don't be overly nervous, because my interviewer was actually very polite and walked me through the various points of analysis. It was actually quite informative yet not too convoluted, and his intention was for me to understand the approach that a person in the role of a Consultant would assume in observing a client's day-to-day business process. The second session after the case-study was more of a "behavioral study" which was a one-on-one with a manager from Protiviti. This was a bit less formal, and was more of a discussion of my personal experience through college as well as my prior internship/work experience. Overall, both sessions went fairly well, and the interviewers were genuinely engaged in the session, which helped me ease up and overcome any and all nerves I might have initially felt. The interviewers also shared their own experience with the firm and allowed me to gain a visual of what my life might be like while employed at a firm like Protiviti. Furthermore, they were successfully able to convey the mood, culture, and environment I could expect from Protiviti, and I must say that they gave me strong, positive impression. The recruiters were also very helpful, constantly giving a vibrant and genial vibe like they really cared about what they do and who they were considering for their firm. This, as I said, was only the first interview opportunity. A second opportunity, which presumably will be at the Protiviti office location, is completely contingent upon their evaluation of me after this interview session. As it stands, I have not received a follow-up response from this interview just yet, but I am infinitely optimistic nonetheless. I believe Protiviti is a great place to potentially work, and the people I met carried themselves with class and character, so I can't say enough of the impression I received from the firm. If a second interview date is planned in the near future, I will be sure to post another interview.
- Describe a challenge you faced in your college years, and explain why it was particularly difficult for you and also how you were able to overcome this challenge. 1 Answer