What is TOPCIMA?

TOPCIMA (code name T4) stands for 'Test Of Professional Competence In Management Accounting'. This is the fifth and the final stage of the CIMA professional qualification offered by CIMA UK. 

To reach the TOPCIMA stage one had to come through four other stages, namely, Foundation Level, Operational Level, Managerial Level and Strategic Level. 

The Pre-seen 

TOPCIMA consists of one paper based on a pre-seen and an unseen case scenario. The pre-seen will be issued a few months before the standard exam dates (May and November). The pre-seen will consist of a fabricated business scenario, developed through real world and real business implications and situations. Usually the pre-seen will cover a wide array of the business and the industry in which the business operates. 

The pre-seen will start from usually the incorporation of the business or at least will give a few details about the incorporation, if the focus is on other aspects. Then the pre-seen will provide the background to some specific areas of the business, of which the unseen issues can be developed later. Such areas are, 

1. Issues with the incorporation
2. Issues with the management/BOD
3. Issues with the business performance
4. Issues with the business financials
5. Issues in relation to HR of the business
6. Issues in relation to technology of the business
7. Issues in relation to competition of the business
8. Issues in relation to new investments/divestment
9. Issues in relation to undertaking new projects
10. Issues in relation to expansion of the business
11. Issues in relation to business takeovers, partnerships, mergers and acquisitions
12. Issues in relation to opportunities and threats of the external environment
13. Issues in relation to business closure/liquidation.

Only a basic background story for such issues will be given in the pre-seen. Mostly they do provide some financial information relating to the current/past/future years in preparation to the unseen issues they will raise.

So it is highly advised that a student facing for the TOPCIMA exam has a thorough understanding of the operational, strategic and financial situation of the specific business and the industry given in the unseen. It will help to remember some critical information out of the pre-seen so that the student does not have to refer to the pre-seen again and again and waste time at the exam. 

The Unseen 

The unseen will be given at the exam and will have specific issues that have developed within the time. Usually 5 issues under five different topics/segments will be given in the unseen and they will not necessarily appear in any order of significance. 

The student is expected to prioritize (order the issues in a logical basis) the issues when they are presented in the report. Unlike Strategic level case study, TOPCIMA case study will require a great degree of integration between the pre-seen and the unseen. The student should be able to draw out information form the pre-seen to support the issues/recommendations for issues given in the unseen.

A 20 minute time slot will be allocated for reading the unseen and another 3 hours to write the full report. 

The unseen will usually focus on a maximum of three calculation based issues and an ethical issue. The financial analysis based issues should be supported by proper calculations shown in the separate booklet give, named 'Supplementary Booklet'. 

Rational Planning Model – Part III – Strategic Option Generation (Part 05)

So far four other strategies for businesses have been discussed in the previous articles. This will be the fifth and the last of the third area of the Rational Planning Model. Another matrix will be discussed under this final part.

Need-Provision Matrix

This matrix is specifically designed for the public sector organizations, which are rather into social welfare than profit maximization. However in the allocation of resources towards the best interests of the society, public sector organizations too do have to develop strategies, to ensure the effectiveness and the efficiency of the process.

The matrix consists of the need for a product (high and low) and provision of resources by the private sector (high and low).

                                     Need

               Low                             High

No Provision	Selected Provision
Encourage Others	Extensive Provision

High

                Provision By Others

Low

No Provision

This is where the need for the product is low yet the private sector is providing for the product highly. Entertainment industry can be taken as a close example. The ‘need’ for entertainment is low (the ‘want’ for entertainment is high), but the private sector is generating wants out of entertainment industry.

Selected Provision

This is where the need for the product is high and the private sector provision is high too. In such cases the public sector will only intervene if necessary. Health industry shows these characteristics. Public sector will only intervene when there is some massive capital expenditure.

Encourage Others

This is a situation where the need for the product and the provision by the private sector are both low. Public Sector will motivate the private sector to provide for any low demand for the product.

Extensive Provision

This is where the need for the product is high and for some reason the private sector provision is low. Mostly very expensive provisions fall into this category or completely social welfare motive businesses are found in this category. Examples include maintaining law and order, national security and infrastructure facilities. 

Efficient Market Hypothesis (EMH)

This is the age of information, where information is more powerful than any weapon. The markets are changing rapidly and information is the key to identifying such changes and reacting to them in the best possible way. Information gives us the business a path to follow, targets to achieve and a competitive advantage, if used correctly.

Efficient Market Hypothesis (EMH) defines three levels of information availability in a market (mainly financial markets).

1. Strong Market
2. Semi-Strong Market
3. Weak Market

Strong Market

EMH says that in a strong market perfect information exists and is highly efficient in information distribution. This means that, in a market, all past information, present information, all disclosed information and all undisclosed information are publicly available. In practice, this is highly unlikely and could be concluded that such markets do not exist. If such markets exist, everybody would be making unlimited and continuous profits within markets, and that is not practical.

The prices of financial instruments trading in these markets will instantly reflect the availability of undisclosed information (insider information). 

Semi-Strong Market

EMH defines a semi-strong market as one with all past information, present information and all disclosed information. Typically this is the type of market that exists most of the time. Businesses will do anything to prevent important information leaking out to the market  since that gives their competitors an enormous advantage. So undisclosed information stays undisclosed and publicly hidden.

The prices of financial instruments trading in these markets will instantly reflect the availability of public information. 

Weak Market

EMH says that Weak Markets only give out the past disclosed information to the public. Decision making can be tough and rigid in these types of markets.

In these markets prices of financial instruments will only reflect based on the past information.

Sources : http://en.wikipedia.org/wiki/Efficient-market_hypothesis