PERFORMANCE OBJECTIVE 1 – Demonstrate the

application of professional ethics, value and

judgement
03:29 ACCA Performance Objectives, PERFORMANCE OBJECTIVE 1
Describe an occasion on which you had to demonstrate ethical behaviour.
I have already mentioned in my profile that I have been working in an audit firm from last three years. While working
in such a field, you have to deal with such situations almost daily where one has to demonstrate the ethical
behaviour. I would like to highlight one event in this regard. In the initial days of my job, my firm assigned me to an
audit assignment in which my best friend was already finance manager. It was creating self-interest threat and I
disclosed the matter to the engagement manager. I was removed from that assignment and my ethical behavior was
well appreciated by the partners of the firm.

What did you learn from this experience and how will it influence your future behaviour in the workplace?
People are generally afraid in the audit firms that if you would deny any assignment in the initial phase of your job,
you would not get big audits. I was very lucky in this regard as the partners of my firm were ethically very strong. I
learned that if you do something correct, everyone encourages you professionally. So never be afraid of doing
anything which is ethically correct. I immediately became a bit more important after that for my firm.

Nothing happens to them who don’t disclose such information to the firm and go for such assignment if the matter
remains undetected. In our firm, we have to sign off and independence statement that we don’t have any relationship
with the company where we are going for the audit, they sign wrong statement. If such matter is detected by the firm,
firm takes serious actions. At least the worthiness of that employee is reduced in the eyes of managers and partners.

PERFORMANCE OBJECTIVE 2 – Contribute to the

effective governance of an organisation
03:30 ACCA Performance Objectives, PERFORMANCE OBJECTIVE 2
Describe how in your role you have contributed toward effective governance, provide at least two examples.

In Pakistan, along with signing the audit report, auditors have to report on the application of the
code of corporate governance in the listed companies. Where company is not following this code
completely or partially, we suggest the improvements in the companies’ system and internal
controls. Many a times I suggested improvements in the systems which were honored. I would
like to mention two such suggestions which were implemented and had positive impact on the
organizations.

1. In one audit, the policies of the management were less oriented to shareholders. In the
minutes of the meetings of board of directors, it was observed that some directors were
actively raising the issues for the benefit of the shareholders but ultimately their votes did not
have any affect on the final decision. The reason behind this was the imbalance between
Executive and Non Executive shareholders. Code of Corporate Governance of Pakistan
 requires the companies to have at least 25% non executive directors in the board. Company
was complying with this ratio but we suggested the audit committee to have an equal number
of executive and non executive directors to create a balance and have an equal participation of
all the stakeholders. Company altered the Articles of Association and included this clause in
it. Now, it has been running very efficiently.

2. When directors serve the company, they have every right to get benefits from it. But best
practices of corporate governance state that there should be some rules for the remuneration.
While auditing the director’s remuneration expense of a major banking company (I cannot
disclose the name), I came to know that major portion of the remuneration is based upon the
company’s performance which is in compliance with the code of corporate governance. But
the barometer selected for this purpose was the annual profit figure. Last year company
witnessed 133% profit growth and this year also the profit growth was about 80% of last year.
Profit figure is subject to manipulation and can easily be changed significantly by the change
of estimates about which is the auditor can do almost nothing. We suggested the audit
committee to change the packages of the directors in this regard. Agreements were revised
and now the major portion of the remuneration of the directors is based upon the total wealth
produced for the shareholders. Now directors are making policies which have better effects in
the long run rather than short term profitability.

In what ways did you make sure you acted in the best interests of all concerned?
I will describe it case by case;

1. In first case, we were feeling that the stake of shareholders and some other stakeholders was
not actively considered. Primary responsibility of the non executive directors is to overview
and monitors the decisions taken by the executive directors. This responsibility cannot be
fulfilled if they are not given powers. For example, company was planning to wipe out a
forest to build residential colonies for the employees. Non executive directors highlighted that
Green Pakistan community would actively react against it which will ultimately have bad
results in the stock market but they did not have enough votes in the BOD to veto this
decision. But maintenance of balance would result in the best interests of all concerned.
2. In second case, we also observed that since the remuneration packages were changed to
profitability based, the loan issue rate of the company was increased significantly. The bank
was honoring almost every second loan application while the industry rate in this regard is 1
out of 4 applications. There are chances that directors are issuing loans without proper
evaluation of the business plan for which the loans were issues. In the first few years,
company could earn a lot of profits but resultant there could be a problem of recoverability
which would result in the bad debts and liquidity problems. Liquidity problem is something
due to which every stakeholder from BOD to employees will be severally affected. Change in
the design of remuneration package would result in the less aggressive policies by the
management which is very beneficial for the long term growth of the company.

What negative impact(s) would have resulted if you had not acted in the way you did?
1. In first case, if this balance was not created, the decisions were not made by incorporating the
concerns of all shareholders which could result in lower profits, share value depreciation and
active resistance from the social groups such as Green Pakistan community.
2. In the second case, if the directors were continuing this policy, soon the company would have tons of profits
without having cash to pay-off even the basic expenses. In the long run, most of the profits would need to be
written off which could be a disaster for the banking company on such large scale.

PERFORMANCE OBJECTIVE 3 – Raise awareness of

non-financial risk
03:32 ACCA Performance Objectives, PERFORMANCE OBJECTIVE 3
What experience have you had in dealing with non-financial risk?

Audit firm provides services. In any audit firm of Pakistan, only Chartered Accountants who are the members of
Institute of Chartered Accountants of Pakistan can be the partners. They are normally financially strong and don’t
have to borrow the money from anyone. I won’t be wrong in stating that the 99% of the Audit firms in Pakistan are
working on zero borrowing. So the major risk which companies face is non-financial risk.

The major non-financial risk which the firms face is the noncompliance with ethical behaviour by the members of the
firm. If members of the firm don’t comply with the ethical standards, the credibility of the firm goes on stake; we go
against the auditing standards and the constitution of the country. Apparently it looks easy to minimize this risk but
actually it is very difficult because no one can know about all the events and circumstances of the life of every
member of the firm.

Using an experience in your workplace explain how have you ensured that the risk was correctly dealt with?

As I mentioned in my first objective, I disclosed the ethical matter to my engagement management so I was able to
secure a bit respect in the minds of managers and even partners of the firm. For the purpose of dealing with the
above mentioned risk, we started creating a culture of voluntary disclosure. Members of the firm were given detailed
instructions to keep alive in their minds what exactly creates a threat to independence and objectivity. They were also
encouraged to disclose this information to the firm. One who discloses the information is actually treated to be ethical
and receives appreciation from the partners of the firm.

How did your organization benefit from your actions?

The event of disclosure of self-interest threat by me was considered an example. Whenever somebody wanted to
promote the culture of voluntary disclosure, he used to give my example.

PERFORMANCE OBJECTIVE 4 – Manage self

03:33 ACCA Performance Objectives, PERFORMANCE OBJECTIVE 4
What have you learned about how you work as an individual?
When I started my job, I was a hard worker but not very punctual in my approach. In audits, one needs to comply with
stringent deadlines. I was good in meeting the deadlines but was not a good planner of my work. In the initial days of
audit, I used to work lesser than required. Reluctantly, in the last days, I had to do work late at night. But gradually I
improved this habit. Now I work evenly all the days of assignment which results in less pressure and burden on my
shoulder.

How have you changed your behavior or approach in the workplace as a result of what you have learned?
I learned good planning skills. Due to inexperience in the earlier days, I was not able to project the work properly. If
the estimation is not made as required, you cannot plan it appropriately. I realized that planning an audit is very
important. When I started planning and working properly, all the pressures and burdens went into air.

How has this helped improve work outputs or business results in your area?

Due to proper planning and implementation of those plans in the actual work scenario, I was able to meet the
deadlines easily. It used to give me enough free time to give to my studies. My managers and partners started relying
more on me and reluctantly I performed more external audits than any other guy recruited in my badge by the firm.

PERFORMANCE OBJECTIVE 5 – Communicate

effectively
03:33 ACCA Performance Objectives, PERFORMANCE OBJECTIVE 5
Describe situations where you have effectively demonstrated each of the forms of communication mentioned
In audits, you have to communicate with different people. Sometimes you are meeting with the directors, audit
committee, managers and lower level employees. Communication is an integral part of the audit and without good
communication skills you cannot fulfill your responsibilities. In audits, while dealing with the management you have to
use oral and written both ways of communication. People like accounts manager and his designated staff remains
with you all the time you stay in the company. You have to communicate with them orally and finally some matters
are intimated in the written form in shape of initial requirement letter, final requirement letter and management letter.
You have to communicate with audit committee through Board Letter. Sometimes you have to reach to a conclusion
by not just words but the facial expressions or body gestures of the person sitting in front of you. So in audit life, all
the possible communication methods are used.

What did you do to help communicate effectively?

Initially I worked on my English language. But this is something you learn when you start communication. You pick
the good words and styles from others while listening to them. You try to adopt the writing style of the person while
you are reading something. In the events of life, you actually meet with different people to analyze how they actually
react non-verbally in some events. So there are two things which assisted me to be a better communicator, one is
experience of communication and other is striving to be a better communicator.

How have your communication skills helped you to improve your performance elsewhere?

Your brilliance, talent and skills remain unveiled until you exhibit them. You cannot exhibit anything in an appropriate
way until you are a good communicator. After improving my communication skills to some extent, I started teaching
Audit to ACCA F8 and Pakistan Institute of Public Finance Accountants (PIPFA). I believe, I could never start
teaching without developing the communication skills in my audit life.

PERFORMANCE OBJECTIVE 6 – Use information and

communication technology
03:34 ACCA Performance Objectives, PERFORMANCE OBJECTIVE 6
Describe your experience of using information technology
This is the world of information technology. Now in every field the use of IT is very important. Especially if you talk
about the accounting and finance, we have to produce different reports for different users and different purposes. Use
of information technology is integral in all these activities. While working in audit firm, one has to go to different clients
and use their accounting system. Moreover, we also use different general and particularly designed audit software for
the accounting systems in the audit. I feel that the use of IT has reduced the audit work by a large extent. You can
identify problems and solve several issues in just mouse clicks for which you need efforts of several weeks if done
manually. Moreover, now we use emails as a basic method of communication. Emails are used to communicate with
the clients, for communication with the engagement managers and team members. We report on daily basis to the
manager about our day’s progress and send the working to him. He electronically signs off the working and sends it
back to us.

How have you applied your IT skills to improve your personal performance?

When I started my job, one of my senior told me that the only key to excel in this field is learning and getting
command in IT used for accounting purposes for example, getting full command on Excel and other accounting and
audit software. Excel is such dynamic software which has the limits of working as your imagination. If you know or
search the formulas on this application, work of several weeks can be done in some minutes. Moreover, getting full
command in the accounting and audit software also creates a difference between you and any other guy. I tried to
learn such things in whole of my job experience which resulted in meeting stringent audit deadlines and increased my
worth in front of my managers and partners.

How has your IT skills and associated improved performance benefited the wider organization?

In the audit firms of Pakistan, employee turnover is more than any other country. Reason is that they recruit students
for training purposes. A student serves them for 3.5 years and than they leave the firm and this cycle continues. I will
also leave the firm soon as my training contract is going to complete. I always tried to teach whatever I have learned
about IT in my professional life to my juniors who would ultimately be working in my capacity in the future. So
teaching anything to juniors is actually beneficial in the wider stake of the organization.
PERFORMANCE OBJECTIVE 7 – Manage on-going
activities in your area of responsibility
03:36 ACCA Performance Objectives, PERFORMANCE OBJECTIVE 7
Describe how you have managed the ongoing (business as usual) activities in your role

In audit firms, we go to different audits all over the year and our ultimate objective is to complete the audit within the
deadline by ensuring that the quality of the audit is not compromised. Meeting with deadline requires good projection
of the work you and your team has to do. If you cannot estimate the amount of efforts you need to put, you cannot
complete the task on timely basis. So in the initial days of my job, I realized the importance of planning and working
on daily basis in the audit. Now I plan every assignment and start working on it from very first day with full sincerity.
Reluctantly, I don’t have to sit till late night in the last days of audit and my managers, team members and client also
remains happy with my performance. I also get good time for my studies.

Explain where you have recommended your own approach to managing ongoing activities to others and
why?

The main complaint of the employees of the audit firm is always late sittings. This is too common in Pakistan and I
think it will be the main complaint in other parts of the world as well. Late sittings are the result of poor planning of
work. As I plan the work and distribute it in the available number of days and then complete the task on daily basis, it
resulted in less late sittings. I recommended this approach to all my juniors so that they manage their work, studies
and social responsibilities appropriately.

How does you approach to managing your activities contribute to organization performance?

In the audit firms of Pakistan, employee turnover is more than any other country. Reason is that they recruit students
for training purposes. A student serves them for 3.5 years and than they leave the firm and this cycle continues. I will
also leave the firm soon as my training contract is going to complete. I always tried to teach whatever I have learned
about time management to my juniors who would ultimately be working in my capacity in the future. So teaching
anything to juniors is actually beneficial in the wider stake of the organization.

PERFORMANCE OBJECTIVE 8 – Improve

departmental performance
03:36 ACCA Performance Objectives, PERFORMANCE OBJECTIVE 8
Describe an occasion when you have identified an opportunity to improve departmental performance.
There are different departments in the audit firm. I work for audit department for the most of my job tenure but also
got the opportunity to work in Tax and Secretarial department. Especially in September and December, all the seniors
of the audit department are transferred to tax department on provisional basis. September 30 is the deadline of filing
 income tax returns for the individuals and partnership businesses and the December 31 is the deadline for corporate
clients. Reason of such transfer is the work load in the last days of filing the income tax returns. I found that this
problem of overload in the last days can be sorted out.

How did you contribute to developing the opportunity for improvement?

When I started working in the income tax department in September, I realized that the work pressure in the last days
is due to the delay in receiving primary documentation from the clients. As these are individuals and small partnership
businesses, they don’t keep higher professional accountants for keeping their records up to date. A lot of time of our
people is spent in asking the clients to bring the required documents. They know that the deadline for filing income
tax return is September 30, so sometimes they bring the required documents on September 29 and even in the first
half of September 30. When most of the clients do it, staff of tax department is overloaded with work.

In order to counter this problem, I suggested the manager of the tax department to ask the individuals and small
businesses to bring the documents up to September 15. Follow their requirement with daily phone calls and emails.
Earlier, department starts calling and emailing the clients after 15 September, but I asked them to start this process
with the start of September. Moreover, I also suggested changing structure of the professional fee of filing income tax
returns. People who submit all their documents by the September 15 will get 20% discount, submission by
23rd September will charge them the normal fee but after this date, they will have to pay 50% additional fee. Both of
these suggestions were approved and implemented in the next year.

Was this opportunity fully successful, why was this? If not, why not?

Yes, it was very successful. Almost 60% of the clients submitted all their documents in order to get 20% discount.
30% submitted documents a week ago to avoid 50% plenty. In this way, all the work was managed properly and we
had to import only few members from the audit department.

PERFORMANCE OBJECTIVE 9 – Manage an

assignment
03:37 ACCA Performance Objectives, PERFORMANCE OBJECTIVE 9
Describe your role in managing a discrete assignment
Although all the audits are discreet assignments in their own capacity but I will describe my role
in a different assignment. It was a market research assignment performed in United Arab
Emirates for a meat processing company named in Pakistan. This is a subsidiary of a Malaysian
company which is going to install the largest meat processing plant in Pakistan. As they were
intended to export the meat (chicken, beef and mutton) to UAE, scope of our work was to

 Identify the major meat importers in the UAE and the terms at which they import.
 Identification of major laws and regulations which may impact the export of meat from
Pakistan and import of meat in UAE.
 Conducting meetings with the procurement managers of major hotels, chain restaurants and
chain of departmental stores e.g. Carrefour to know about the potential customers’
expectations from the client.
 Conduct research survey with the ultimate customers to identify their requirements and
preferences about different types of meats and different parts of each type.
 Analyze the impact of introducing a meat brand with Pakistani (A Muslim country) tag in
UAE where most of the chicken brands are Brazilian.
 Feasibility study of operating hatchery and meat processing unit in UAE

My role was limited to different customers and managers of hotels and hyper markets about the
trends of consumption of meat. For this purpose, our team stayed in UAE for almost two weeks.
After the return, I was given the responsibility to prepare the report for them which consisted
more than 300 pages.
How did you apply learning from your day-to-day role in this assignment?
I learned using different software for data processing in my job, my writing skills were improved
because of frequent communications with the clients, managers and team members through
emails, my speaking power had also been increased. All these things helped me a lot in
performing my role for this assignment.
What did you learn from the assignment that will help you in your day-to-day role?
Well there are so many things I learned from this assignment. The exposure to foreign country
boosted up confidence in me. Interviews with so many people helped me communicate
efficiently and effectively with employees and management of the client. I prepared this report
on behalf of my firm which helped me in drafting better management and board letters in the
future. Overall it was an assignment with lots of learning.

Performance Objective 10: Prepare Financial

Statements for External Purposes
03:38 ACCA Performance Objectives, Performance Objective 10
Explain your role in the preparation of the financial statements
Financial statements are prepared by the clients and then we start audit on it. But actually
financial statements and audit reports are printed by the audit firms on their own format.
So, we prepare the financial statements of the client from the trial balance provided to us
and then compare it to the financial statements prepared by the client. We make
appropriate adjustments in the financial statements prepared by us to reconcile it with the
financial statements prepared by the client. Keep in mind; it is one of the basic purposes of
the audit to check compliance with the accounting standards.
How have you ensured that the financial statements you have prepared meet all necessary requirements?
I remain up to date with all the new accounting standard requirements and legal and
regulatory requirements. Moreover, our firm conducts CPD seminars on regular intervals
to keep our knowledge up to date about new amendments and latest issues. So, I check the
financial statements as per my knowledge and past experience about the accounting
standards and legal and regulatory requirements. In order to comply by the legal and
regulatory requirements, checklists are provided by our firm.

How have you used supporting (possibly non-financial) information to make these
more easily understood by users?

All the accounting standards have detailed disclosure requirements. We ensure that the
management discloses all the information in the financial statements which is required by
the standards. Moreover, if the wordings used by the management are difficult to
understand by the general users and has some technical jargon in it, we request them to re-
write it in user friendly way. Financial statements are more of figure related work but by
using the non-financial information effectively, understanding of the financial statements
can be improved.

An Article was published in the ACCA website about ACCA PO 10 which can view or download
from here.