CASE STUDY

Facilitator:
Sayeed Ahmed
FCA, ACMA (CImA, UK), CGMA, MBA(IBA)
MCom(Acc), Bcom (Hons)
Executive Director
Financial Reporting Council

Pubali Bank Limited 1

Case Study Skills

• Reading;
Skills
• Writing;
• Process;
• Presentation;
• Time Management;

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Reading Skill

 Stage in Business Cycle;

 Strategic Direction; How Grow?
 Ethical Standard;
 Business Issues

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Learning
 Objective
 What is asked for?
 Your requirement
 Assimilating and Using Information
 Structuring problem and solution
 Applying judgment
 Conclusions and recommendations
 How to score/ How your script is assessed?
 Ethical requirements/issues
 Whether ethical issues exist?
 How to deal with ethical issues?
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Objective
Assess your understanding of more
complex interactions of business issues;

Ability to analyze financial and non-

financial data;
Ability to exercise judgment;
Develop conclusions;
Commercial recommendations

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4 Types of Issues: Reading Skill

• Financial; • Business:
• Strategic; 
 Client;
Client;
• Ethical 


Competitor
Competitor
Market/industry
 Market/industry

 Economy
Economy

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Key Differentiators
 Good quality, relevant financial analysis that makes
the number talk;
 A succinct Executive Summary;
 Absence irrelevant information;
 Skillful integration of information;
 Appropriate judgment to reasonable conclusion and
commercial recommendation;
 Inclusion of innovative but realistic ideas;
 Comprehensive coverage of all parts of the
requirement;
 Reference to economic and industry factors including
to ethical issues;
 Demonstration of professional skepticism;
 Application of common sense to ensure proposals are
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reasonable
 What is asked for?

Request for advice or assistance from either:

Your client; or
Your Boss

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 Your requirement
No new technical or ethical knowledge:
Only demonstrate “Professional Skills”
in 4 areas

4 ‘’Professional Skills”
Assimilating and using information (A &UI)
Structuring problems and solutions (SP& S)
Applying Judgment (AJ);
Conclusions and recommendations (C&R)

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 Assimilating and Using Information

 Define the situation;

 Extract relevant information from

irrelevant information;

 Wider context (real life situation,

economic condition)

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 Structuring problem and
solution

 Both numerical and non-numerical analysis;

 Breadth and depth of analysis;

 Integrate words and numbers

 Why this happened?

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 Applying judgment
 Evaluate key points and recognize linkages;

 Demonstrate professional skepticism;

 Prioritize issues;

 Evaluate options/bias

 How this happened? Implications

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Conclusions and recommendations

 Draw reasonable conclusions flow logically

from your analysis and judgment;

 Good range of practical and commercial

recommendations (more than one
recommendations for each issue)

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 6 areas, 3 requirements & 4 skills
Areas A & UI SP & S AJ C&R Total
Executive summary 1 2 1 2 6
Review of financial performance (Req 2 3 3 2 10
1)

Evaluation of proposal (Req.2) 2 3 3 2 10

Assessment of Proposal / 2 3 3 2 10
opportunities / issue/ethical issues
(Req 3)

Overall paper, structure, style, 2

language

Overall paper: Appendix, contents and 2

style

Total 40

CC: Clearly competent (6);

SC: (Sufficiently competent (4)
IC: Insufficiently competent (2)
ID: Insufficiently demonstrated (1);
NA: Not demonstrated (0)

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Criteria for a Pass

3 key criteria are looked for a Pass Script

1.In each of 3 requirements and the executive summary

at least 50% of the grades should be SC or CC;
2.There should be less than 5 NAs across the whole
paper;
3.Ideally, there should be more ICs than IDs overall.

If any script meets all of the above 3 criteria, the paper

will get definitely pass credential.

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Ethics: What is meant?

Issues of ‘Business ethics’ rather than

‘professional ethics’ i.e. you are being asked to
discuss how the subject entity should deal with
a particular dilemma that it faces, rather than
the implications for you as advisor in providing
advice.

It is a matter of degree of ‘professional

judgment’. So, it is assessed mainly under
‘applying judgment’.

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 Whether ethical issues exist?

4 way test

Is decision /action a truthful one;

Is decision /action fair to every one affected?
Will the decision /action build goodwill for
the organization?
Is the decision /action beneficial to all parties
who have vested interest in the outcome?

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 Ethical requirements/issues
4 categories (Lack, Conflict, Doubtful & inappropriate)

Lack of professional independence;

Conflicts of interest among stakeholders or
senior management;
Doubtful accounting or commercial practice;
Inappropriate pressure to achieve a reported
result

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Doubtful accounting or commercial practices:
example
• Breach of law or regulation; e.g. data protection act
• Aggressive attitude towards a supplier;
• Imposition of unfair contract terms;
• Misleading tax authorities by incomplete disclosure ( e.g.
of related party transactions);
• Inappropriate treatment of leases in financial
statements;
• Money laundering;
• Health and safety failing;
• Abuse of customer information ;
• Falsification of expense claim;
• Theft of commercial intelligence/ breach of copyright;
• Misleading advertising;

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Inappropriate pressure to achieve a reported
result
• Dubious revenue recognition policy in financial
statement;
• Keeping profits artificially low to ensure a low
valuation for corporate sale purposes;
• Manipulation of KPIs;
• Misclassification items in financial statements
to ensure compliance with bank covenants;
• Questionable bad debt provision policy;
• Abuse of cut-off;
• Potential bias in forecast/ business plan to
support application for loan

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Lack of Professional Independence: example

• Failure to ensure that your advice is directed at the

individual (s) or company that commissioned it;

• Being tactless when addressing issues that may be

sensitive to one or more audience members;

• Abusing confidentiality;

• If your role is one of a secondee, being not

compromising yourself;

• Offering to perform further work outside your sphere

of expertise

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Conflict of interest among stakeholders:
example
• Excessive corporate hospitality/entertaining of clients;
• Abuse of close personal contacts for commercial gain;
• Performance related pay (including commissions and
bonuses;
• Related party transactions ( e.g. employing relatives);
• Environmental responsibility in opposition to established
company practices ;
• Redundancies among employees so that the company
can maintain profit levels ;
• Cartel arrangements acting against consumers.

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How to deal with ethical issues?
Ensure full range of professional skills: 4 types

State facts and implications (A&UI);

Clearly analyze the ethical dilemma – stakeholders

impacted and their standpoint; (SP & S);

Apply judgment by thinking the alternative options

(AJ):

Reach a conclusion and give a recommendation on

what should be done (C & R)

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Follow SWOT while writing an ethical issue:

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Example:

Bys Limited (Byx) is a UK-based company which supplies and repairs by-cycles.
The majority of its business in the recent past has been arisen from the
replacement of stolen by-cycles paid by insurance companies. The company is in
transition and prepared a positive three-year forecast which is being submitted
to its bank in support of a 10-year loan to part-fund a change in strategic
direction, which says as

“ The main growth in our business will be achieved from our new revenue
streams. The target is for sales of GBP 50 per month throughout the year 2014. In
the year 2015 we would expect monthly revenue from these new streams to be
significantly higher and have estimated that monthly revenue to be GBP 100k,
again with an equivalent sales peak in December.

We will be using information from our current insurance customer database and
our good reputation to develop our customer base both locally and nationally.
Using this and our many personal contacts, we are confident that we can fully
develop these new income stream.”

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Strategic Analysis

SWOT

PEST

Porter’s 5 Forces

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 Writing Report

 Strategic Analysis
 Report structure & contents:
Executive Summary;
Report Body: Req 1, Req 2, Req 3
Appendix 1
Appendix 2

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Exam Hall Technique: Tasks sequence

Tasks Sequences

Executive Summary 3/4

Body of the Report 3
Appendices 2
Planning sheet 1

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Report Structure
 Report Cover: Title & Address;
1. Terms of Reference;
2. Executive Summary
2.1
2.2
2.3
Conclusions
Recommendations;
3. Req 1 subject

3.1
3.2
3.2
3.4
Conclusions
Recommendations

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Report Structure: Cont.

4. Req 2 subject

4.1
4.2
4.2
4.4
Conclusions
Recommendations

5. Req 3 subject
5.1
5,2
5.3
5.4
Conclusions
Recommendations
Appendices
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Req. 2: Internal Business Issue
•Prepare Appendix # 2 on Relevant Costing Approach, identify relevant revenues
and costs and find the result. calculation should be reasonably accurate

• Question on appropriateness of assumptions;

• Question the validity of data used for calculation;

•Link with practical considerations, internal e.g. staff issue, management issue,
impact on other segment of the business;

• Link with external considerations, competitors’ reaction;

• Discuss wider perspective, solving similar case by other organizations.

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Conclusions & Recommendations

Since it is related to the existing business issue, so, conclusions &

recommendations should directed towards:

• Consolidating present position; or

• regaining position; or

• Improving further

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Req 3: External Business Proposal & Ethical Issues

4 Parts of the requirement:

2 Parts for business proposal, eg strategic, operational, issues, /

Advantages or disadvantages / assumptions;

 2 ethical issues

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Conclusions & Recommendations
 In conclusion: specifically state whether proposal to accept or reject;
 State specifically not ethical the issues is for reasons as discussed
 Recommend for exploring further data or area or market;
 Discuss with the parties linked with ethical issues

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 Executive Summary
Introduction: 2 lines:

◦ Current position from AI;

◦ Strategic options available from EP

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Executive Summary: Req 1

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Executive Summary: Req.2

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Executive Summary: Req.3

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Exam Time Allocation

Reading Time: 15 Minutes

Appendix 1: 25 Minutes

Appendix 2: 15 Minutes

Plan Main Report Executive Summary

Requirement 1: 20 M 35 M 7M

Requirement 2: 20 M 35 M 7M

Requirement 3: 20 M 35 M 6M

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