Case Analysis Approach for PA1.PA2 CGA Exams.

1. Skim the Case (Quickly understand the case) What is required of me and what is my role What are the main issues and why those are important to the organization. What industry does the organization operate in, what is state of economy What are key organization factors which can affect behavior - goals, control systems, incentive systems, critical business functions, etc Who are stakeholders eg. investors, employees, creditors, customers, public Who are readers of the report PA1.PA2 Prep Course PrepCourse.BalbirCGA.com 1

2. Analyze the case Identify the cause of the problem, not effect. Connect all factors in the case. Use these techniques to identify the problem – qualitative, quantitative, ratio, financial statement analysis, etc. Prioritize the issues Determine the appropriate tool for analysis, eg accounting or business tool. Use both qualitative and quantitative analysis PA1.PA2 Prep Course PrepCourse.BalbirCGA.com 2

3. Generate alternatives (You have to understand what options are available to you) Generate as many alternative as possible All alternatives should address the cause identified above Only consider alternatives which support the facts given in the question. PA1.PA2 Prep Course PrepCourse.BalbirCGA.com 3

4. Decision criteria (before you can take decision, you have to understand what is important for you) Key success factors of the organization (This depends on corporate strategy) Weigh the criteria eg safety of the personnel are weighted more heavily than others, such as cost Consider constraints - eg GAAP, Cost, Finance, cash flow, market share, etc. Ethical Issues : Due Diligence, Public Interest and Privacy Standards, Confidentiality , etc Qualitative factors - customer satisfaction, competitive advantage, corporate image, employee moral, etc Quantitative factors - profit, cost, return on investment, market share, capacity, etc Tailor your decision criteria for each case PA1.PA2 Prep Course PrepCourse.BalbirCGA.com 4

5. Analyze and evaluate the alternatives (Evaluate the alternatives against the decision criteria above) Determine GAAP/GAAS requirements for each alternative. Also consider fair presentation and financial statement users Use appropriate accounting procedure or business tool egAnalytical or Substantive procedure, capital investment decision, net present value, sensitivity analysis, etc Determine ethical, moral and financial consequences of each alternative. Consider how each alternative affects various stakeholders, if there is tie, consider how you prioritize PA1.PA2 Prep Course PrepCourse.BalbirCGA.com 5

6. Make recommendation Check if you have to make a DECISION or a RECOMMENDATION. If you are a manager, you take a decision. In most of the cases, you make recommendation. Double check decision using the decision criteria decided above . Decision should follow logically from your analysis Accept responsibility for the decision as it is based on facts In exams, your recommendation will be judged against logic. There could be more than one recommendation. Whatever recommendation you give, support it with facts and logic. PA1.PA2 Prep Course PrepCourse.BalbirCGA.com 6

7. Action and implementation plan Check question if action plan is required Determine the next logical steps to implement the decision Action plan will answer - who, what, where, and how of the implementation phase Include a budget timeline for each step of implementation PA1.PA2 Prep Course PrepCourse.BalbirCGA.com 7