Management Governance and Ethics is a key paper in the ICAN Skill level. It is an exciting, challenging, and innovative paper that aims to enrich students’ understanding of a number of important issues as they prepare to take their place as members of the professional accounting community.
In terms of syllabus content, these themes are handled in the context of Strategy, corporate governance, internal control, risk, and professional and business ethics. These areas form the basis of MGE
The syllabus for MGE, possibly more than any of the other papers, is eclectic in nature and draws on material from a number of different disciplines. Students are strongly encouraged to read around the subject area, especially those students new to the content of the syllabus.
SYLLABUS AND RELATIONAL DIAGRAM
Although the syllabus contains five areas (refer to the ‘relational diagram’ in the Syllabus), it is important to understand that all of these, taken together, comprise a logical ‘whole’. All areas are interconnected and, in total, the syllabus represents a set of issues essential to the understanding of how accounting – especially in a business context – contributes to, and is underpinned by, governance and ethics. Although these have always been important to the accountancy profession, a number of well-publicised recent corporate failures and scandals have highlighted the need for sound governance and ethical behaviour. Society invests a great deal of trust in its professions and it is crucial that accounting professionals repay that trust and maintain the level of respect and regard in which they have been traditionally held.
Accordingly, accountants need to be aware of their responsibilities to investors, to society, and to the highest standards of professional probity and competence. The content of the MGE will help students explore and develop these themes.
Part A of the syllabus focuses on Strategy which talk about potter’s force, SWOT analysis etc while B and C focuses on corporate governance, responsibility, and accountability. This means exploring aspects of, for example, the agency relationship between directors and shareholders, the meaning of governance, the role and types of directors, issues of responsibility, and the meaning and limits of accountability. Furthermore, these also include internal control, the identification and assessment of risk, and controlling and mitigating risk. MGE syllabus singles these out for separate consideration because, although they are integral to corporate governance as a whole, they play a crucial part in an accountant’s responsibility to act in the public interest and in the interests of shareholders.
Part D of the syllabus. Ethical assumptions underpin and ‘surround’ any profession and system of governance. The accountancy profession, just as in medicine or law, is governed by certain ethical frameworks that inform practice and guide practitioners.
EXAM FORMAT
The exam will contain two sections. Section A will contain Question 1, which will be worth a total of 30 marks and which will be compulsory. It will be based on a case study scenario of several hundred words. The requirements will include several distinct tasks (listed as (a), (b), (c), etc) and will sample the syllabus quite broadly. Question 1 contain elements of Strategy, governance, risk, internal control, and will include some aspect of ethics.
One of the features of the Professional level exam papers is the awarding of ‘professional marks’. These are marks allocated not for the content of an answer, but for the degree of professionalism with which certain parts of the answer are presented. They will usually be awarded in Section A (the compulsory part of the exam paper) and will total 4 to 6 marks.
It may be, for example, that one requirement asks you to present your answer in the form of, say, a letter, a presentation, a memo, a report, briefing notes, or similar. Some marks may be awarded for the form of the answer in addition to the content of the answer. This might be for the structure, content, style and layout, or the logical flow of arguments in your answer.
Section B will contain three questions (Questions 2, 3 and 4) and students will be invited to attempt two from the three questions set. Each question in Section B will, accordingly, be worth a total of 40 marks. All of the three questions in Section B will be based on a short scenario.
Section C will contain three questions (Questions 5, 6 and 7) and students will be invited to attempt two from the three questions set. Each question in Section B will, accordingly, be worth a total of 30 marks.