Saturday, 1 May 2010



I’ve been asked for tips to pass Paper E3. Well, there are two things I think are important:

- You need to understand how to use the pre-seen material. This is covered by an earlier post, and one of my Learning Bursts. There is also a useful article on CIMA’s website, which talks about the ‘clues’ in the pre-seen, relating to each of the three papers.
- You need to understand how scenario-based questions work. Once again, there’s a presentation about this on my presentations page. You need to recognise that there are ‘hints’ in the scenario, which should lead you to the ‘points’ that the examiner wants you to mention in your answer.

The examiner wrote an article in Financial Management magazine, explaining the differences between E3 and P6, and there’s also a very useful transition guide on CIMA’s website. Together these will be of great help to those of you who are sitting E3, whether for the first time, or as a result of failing P6.

E3 isn’t a difficult paper, but the verbs used are at a very high level. When you are revising the theories in the E3 syllabus, you need to recognise that this exam really only looks at the application of those theories, and at their weaknesses and limitations. You shouldn’t expect to get marks for simple explanations and diagrams – these are more appropriate to the Operational Level. Concentrate on how the models work (or don’t), and recognise that solving real-life problems is generally about using ‘a bit of this, and a bit of that’, rather than applying one model in its entirety. Be prepared to ‘assemble’ a unique solution to a unique problem (as all real-life problems are).


  1. We hear a lot about APPLICATION of models, but is there a SYSTEMATIC APPROACH to achieving this for the E3 paper?

  2. Hi Bhavesh. I assume that by a 'systematic approach' to application, you mean a standardised method that can be learned and practised? Well, yes and no.

    No, because every situation in the E3 exam (as in real life) will be unique, as it's determined by the precise facts that you're given in the scenario. That's the point of the so-called 'higher skills' (application, analysis and evaluation) - you can't learn the answers in advance.

    Yes, because there's a very simple 3-step process you can go through when deciding which model(s) to apply:

    1. Does the question requirement actually mention a model? If so, apply it. If not...

    2. Does the scenario contain facts that clearly point to a particular theory? If so, use that model. If not...

    3. Feel free to use any model(s) that might improve your analysis of the situation, and your advice.

    Quite often, application of a model or theory is evidenced by your use of the language of that model. You don't need to explain or describe the model, or even to mention it by name. For example, if I talk about the bargaining power of X Ltd's customers and suppliers, I'm obviously using the 5 forces model. If I talk about X Ltd needing to improve the way their technology supports inbound logistics, I'm using the value chain. You can also use a series of sub-headings in your answer, taking those headings from the appropriate model.

    I hope that helps.