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To BPT or not to BPT?

The ICAEW is introducing two new papers this summer, covering banking and insurance. Martin Johnson explains all

March 2016

From June, the ICAEW ACA qualification will offer students two alternatives to the current Business Planning: Taxation (BPT) paper. The launch of the Business Planning: Banking (BPB) and Business Planning: Insurance (BPI) papers will provide the ACA with the greatest level of early-career sectoral specialisation of any UK accounting qualification.

It is not the hardest thing in the world to create an accountancy paper that is more exciting than a taxation paper. Even so, the ICAEW’s choice to offer specialisms in banking and insurance appears to be targeted at the ‘sexier’ end of the financial services market. Following the credit crunch there has, arguably, never been a greater need for qualified accountants possessing expert knowledge of the latest banking and insurance regulations.
The decision to target these specific markets rather than the many other sectors that could have been chosen (Business Planning: Farming or Business Planning: Manufacturing anyone?) is also probably part of a strategic ICAEW plan to appeal to a sector which (once fully recovered) will surely serve as one of the principal sources of industry demand for qualified accountants.
The option to study BPB and BPI will therefore be welcomed by ACA students: ICAEW has targeted markets that are set to grow, offering many job opportunities.
It will, however, take some time before employers and recruiters in these markets become fully aware of the way in which the ACA has become differentiated from the alternatives.
Different employers are likely to take different approaches, so we expect to see plenty of discussion within the student community once it becomes clearer whether employers will require specialised ACAs.

BPT has traditionally enjoyed a fearsome reputation among students, regularly achieving the lowest pass rate of any ACA professional level paper. The syllabus is long, difficult and often not of much relevance to the student’s day-to-day work (unless they work in tax, of course!).
Based on our review of the sample papers now available on the ICAEW website, both BPI and BPB will be much more focused on audit, financial reporting and strategic analysis than the BPT paper (which is obviously exclusively about tax).
This is crucial for students to bear in mind because audit, financial reporting and strategic analysis are the bread and butter of both the Corporate Reporting and Strategic Business Management advanced level papers – whereas UK taxation is not tested in any form after BPT.
Looking in particular at the strategic analysis questions in the BPB sample paper, one could almost be reading a Strategic Business Management question. The detailed review of IFRS rules on financial instruments in the BPB and BPI syllabuses will also be useful for the IAS39/IFRS13-style questions, which are a favoured area for the Corporate Reporting examiners.
Overall, if you have a free choice as to which paper to sit, and you also have no particular need for detailed tax planning knowledge, it may be worth considering whether you can study strategically by taking one of the new papers, thereby becoming familiar with question styles and technical content which, unlike BPT knowledge, can be ‘recycled’ in your next level of exams.

No one likes to be among the first group of students to sit a new paper: the first set of BPB and BPI ‘guinea pigs’ will have no past papers to guide them as to how to revise and answer the questions. The relative lack of provision of BPB and BPI courses by tuition providers in 2016 is also likely to be a concern for students.
We would expect this to lead to some unusual pass rates for the first three sittings in 2016, but it will be interesting to see how these compare with BPT over the longer run – with potentially easier syllabus content and the advantage of greater potential to ‘recycle’ knowledge and techniques for subsequent papers, a noticeably higher pass rate for BPB and BPI could see many tax tutors out of a job!
• Martin Johnson is the founder of ACA Simplified

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