Tag Archives: Accountants

50 shades of Grade…..Measuring students worth

Posted on by

I don’t often write specifically about the market that I am most closely involved, that of accountancy training and education. But there does seem to be an anomaly in the way the accountancy world measure success that isn’t the case in many other professions and examinations.

To become a qualified accountant in the UK (ACCA, ICAEW,CIMA etc,  yes there are more) you have to pass a number of demanding examinations and submit evidence of practical experience. The exams are taken over 3 years and everything rests on a number of exams of 100 marks each, of which you need to get 50%. The pass rate for accountancy students varies from paper to paper but is around 60% In training and education terms these exams are often referred to as High stake exams. For some failure is not simply a setback in terms of time, it could result in a lost job.

50% good – 49% bad

The purpose of such exams (including the practical experience) is of course to ensure that those that pass are competent. But how competent….?  It seems that you are either competent or not, if you get 49% you are not competent, if you get 50% then you are. This makes the margin for error very high, many a career has taken a dramatic turn based on 1 mark. Now of course in any exam there has to be a point where someone succeeds and another fails but does competence not have many shades to it, is it not a continuous process rather than a discreet one.

Shades of Grade

You may be one of thousands of students (>300,000 actually) who have just had your A level results. But of course you don’t just pass or fail, in fact this has not been the case since 1963, even before then there was an indication of the mark. You are given a grade from A through to E and all are considered a pass, 98.1% passed their A levels this year.

And the grades refer to the marks e.g. E is 40%, a D is 50%, a C is 60%, a B is 70% and an A is 80%. A similar grading exists for Degrees, 2.1, 2.2 etc and for Law exams, Pass, Commendation, Distinction.

No pressure for excellence

So why is this not the case in accountancy? To be honest I am not sure. But by introducing grades above a pass you not only provide employers with a better indication of competency, you encourage colleges to teach to a higher and deeper level, motivated by the students who want to learn more. And that for me is the most important point; you create an incentive for students to try harder. At the moment if you are scoring 55% then why put in more work, a pass is a pass, but a distinction well that will make you stand out from the crowd.

Of course the market will adjust its perception of what a pass means, for example employers may only want students with a distinction rather than a simple pass, but they have always looked and will continue to look for differentiation, at least this is a meaningful one.

What it does not do is fix the 49% you fail problem, and careers will still hinge on 1 mark, but that unfortunately is the way with exams and the reason exam technique is so important.

So to all the accountancy examining bodies why not introduce grades – grey is good and isn’t it an accountants favourite colour?

Related articles

Return of the accountant

Posted on by

There was a time when people thought being an accountant was a particularly dull and boring profession. However the face of finance has changed, finance professionals are no longer required to simply crunch numbers or come up with reasons why projects won’t work. They are a key ingredient in the success of the company, required to develop ideas and look for new opportunities.  For this reason it is vital that both students and members look at the events around them in a more positive way, that is positive in the sense of what direction does this now take us and what opportunities do we know have rather than “I am sure this will work out fine”

Take an article written in the Sunday Times 7 June 2009 The video – Game Empire strikes back. In it Dominic Rushe reports on E3, the video games industry annual shin dig, where numbers have been falling and an industry that once thought to be immune from recession seems like an example of an industry living in its own virtual world and not the real one. 

In the article there are many lessons if only you look closely, for example, there is an implication that even though times are hard and yes the industry has had to make redundancies to cope with falling sales, if you continue to innovate and remain focused on your customers there is still much money to make. For students it is a great example of how the product life cycle operates – the gaming industry does seem to be moving into a mature market. It raises the issue that despite the confidence and great creativity in the industry, one of the main limitations is the industry’s ability to raise finance; games development can cost $30m. How many students whilst offering advice in their final level examinations put forward brilliant arguments as to why the company should do something yet forget to answer the very practical question of where will the money come from, we can’t have qualified accountants doing that.

And so to the point, we are living in changing times, with many challenges, companies need there finance team to be at their very best.  To be good, you still have to pay attention to the fundamentals, do we have the finance, will this add value, do our financial statements reflect our true position. But take inspiration from what you read and hear and think about it in the context of your objectives, be that to pass an exam or solve a particularly difficult business issue. Read with focus and direction and maybe one day you will be as good as Luke in return of the Jedi.

No more training do you require. Already know you, that which you need.

Yoda