CGMA Exam - Case Study Guide

chapter 9 Unseen information for the practice exam

Chapter learning objectives

• When you have completed this chapter, you will have an understanding of the unseen material for the CGMA exam.

1 Practice exam—unseen materials

The practice exam contains the following scenarios and tasks.

Note that in the exam these are not labelled as ‘tasks’ or ‘scenarios or triggers’ but are presented simply as exhibits, emails, articles and so on. Similarly, exhibits are not numbered.

Exhibit 1—Scenario 1

Today is 16 May 2015.

You are a senior manager advising Judith, the new Group chief executive, on issues relating to shareholders.

The current position is as follows:

Cast is a private company and so its shares are not freely traded. The company was established as a family business, but there are now 40 shareholders. There are no close family ties holding the shareholders together. Over the years the shares have changed hands because of inheritance. The present shareholders are not closely related.

The only significant shareholder is Arnold, who is the great grandson of the shopkeeper who founded the business. Arnold owns 30 per cent of Cast’s shares.

Cast’s constitution forbids the sale of shares to anyone other than an existing shareholder. That creates two problems. First of all, shareholders cannot liquidate any of their shareholding unless they can find a willing buyer amongst the other shareholders. There is a feeling that the few sales that have occurred have tended to be for less than ...