The Department of Trade and Industry recently gazetted a revised draft of the chartered accountancy profession sector code to grow the number of black people in the CA profession. However, the November 2018 exam results written by South African Chartered Accounting hopefuls showed a concerning trend that could stand in the way of transformation. Pass rates for first time writers had fallen from 91% in 2016 to 71% in 2018. For African students, the picture is even more troubling. The 2016 African pass rate for first time writers was 81% and fell dramatically to 48% in 2018.
According to the South African Institute of Chartered Accountants (SAICA) the Assessment of Professional Competence (APC) is the second part of the qualifying examination, which assesses professional competence. Without passing the exam, you’re unable to register.
Some have tried to explain the falling pass rates by saying that the exam may have simply been more difficult. Maybe, but unlikely. The exam setting process is rigorous and goes through stages of review to ensure it’s challenging but still reasonably achievable. The grading process also makes amendments for any questions that may have been too difficult.
Others point to the fact that the exam is not available in any African languages and this places these students at a disadvantage. However, this has also been the reality in previous years and the chart below dispels this notion.
A possible reason for the decline is potentially in the note placed in SAICA’s results press release.
“SAICA introduced an e-writing pilot to a select number of candidates for APC November 2015. The participation in the pilot was voluntary. For APC November 2016 and November 2017, e-writing was optional and November 2018 it was compulsory with exception of those that applied to write manually with valid reasons.”
Based on this information, November 2018 was the first exam where e-writing was compulsory. E-writing is short for electronic writing and refers to the practice of taking exams on a computer. Looking at the chart below, it's possible that the introduction of e-writing could have significantly impacted the pass rate of first-time writers.
It may just be coincidental and the sample is too small to draw definite conclusions, but the data raises an interesting question. The exam process may now indirectly be testing students’ computer literacy. Some students have an advantage over others if they have significant experience using a computer and/or own one themselves. This is a reality for a larger proportion of white students than it is for African students.
The chart below could hint at this showing the pass rate for white first timers somewhat maintaining its strength whilst that of Africans tanks after digital migration.
SAICA needs to consider if computer literacy is something they want to be indirectly testing during the APC. While the ability to work with a computer forms an integral part of an auditor’s workplace requirements, it is something that many learn on the job.
Dhanyal Davidson, founder of Digest a daily newsletter that helps readers stay on top of the world of finance explains, “Having gone through articles myself, I saw many of my peers work very uncomfortably on computers in their first year. However, like anything else, with time and exposure, their work rate picked up in step with their increased digital literacy.”
Unfortunately for the 2018 first-time candidates who have failed, their professional journey has already been made harder. The pass rate for repeat candidates falls to 55%, largely attributed to becoming out of touch with academic content and study behaviour.
Interrogating the data should be a key next step for SAICA. If further investigation confirms the impact of digital literacy, SAICA and training institutions across the country need to consider digital literacy courses to help correct this issue. Otherwise, SAICA needs to bring back the manual option to avoid failing students on a skill that isn't meant to be tested. It may be a significant barrier to African hopefuls. ENDS
Dhanyal Davidson is the founder of Digest, a daily newsletter that helps readers stay on top of the world of finance and economics in SA. Sign-up is free and you get one short email each weekday morning - a great addition to breakfast.