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ISSN 0268-6902 Managerial Auditing Journal Volume 17, Number 3, 2002 Critical perspectives on accounting and finance This issue is part of a comprehensive multiple access information service comprising: Paper format Managerial Auditing Journal includes nine issues in traditional paper format. The contents of this issue are detailed below. Contents 110 Access to Managerial Auditing Journal online 111 Abstracts & keywords 113 Accounting and auditing requirements of the Sudan Companies Act 1925: time for change John A. Brierley, Hussein M. El-Nafabi and David R. Gwilliam 117 Re-engineering recruitment to the accounting profession Malcolm Smith and Christopher Graves 122 A critical evaluation of the effect of participation in budget target setting on motivation Pamela Reid 130 An assessment of the newly defined internal audit function Albert L. Nagy and William J. Cenker 138 Auditing the indirect consequences of rework in construction: a case based approach Peter E.D. Love 147 Corporate governance: communications from internal and external auditors Janet L. Colbert 153 Slack in public administration: conceptual and methodological issues Tor Busch Internet Online Publishing with Archive, Active Reference Linking, Emerald WIRE, Key Readings, Institution-wide Licence, E-mail Alerting Service, and Usage Statistics. Access via the Emerald Web site: http://www.emeraldinsight.com/ft See overleaf for full details of subscriber entitlements. Managerial Auditing Journal online An advanced knowledge resource for the entire organization Access via the Emerald Web site – http://www.emeraldinsight.com/ft Subscribers to this journal benefit from access to a fully searchable knowledge resource stretching far beyond the current volume and issue. Managerial Auditing Journal online is enhanced with a wealth of features to meet the need for fast, effortless, and instant access to the core body of knowledge. 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For further information go to http://www.emeraldinsight. com/stats Key Readings Abstracts of articles, relating to keywords, are selected to provide readers with current awareness of interesting articles from other publications in the field. The abstracts are [ 110 ] How to access this journal through Emerald Organizations must first register for online access (instructions provided at http:// www.emeraldinsight.com/register), after which the content is available to everyone within the organization’s domain. To access this journal’s content, simply log on either from the journal homepage or direct through the Emerald Web site. Emerald Customer Support Services For customer service and technical help, contact: E-mail: support@emeraldinsight.com Telephone: (44) 1274 785278 Fax: (44) 1274 785204 Abstracts & keywords Accounting and auditing requirements of the Sudan Companies Act 1925: time for change John A. Brierley, Hussein M. El-Nafabi and David R. Gwilliam Keywords The Sudan, Legal matters, Balance sheets, Profit and loss, Accounting The Sudan Companies Act 1925 is outdated. There is a need for substantial revision to the Act either in accordance with, for example, current UK legislation, or a framework more directly suited to the economic and legal environment of the Sudan. At a general level this should include the preparation of a profit and loss account, specific formats for the profit and loss account and balance sheet, notes to the accounts and an auditor’s report stating whether or not the accounts give a true and fair view of the state of a company’s affairs. Re-engineering recruitment to the accounting profession Malcolm Smith and Christopher Graves Keywords Recruitment, Biodata, Forecasting, Performance, Modelling There can be few personnel techniques so lowly regarded as the recruitment interview. Yet we persevere with the use of the technique despite the overwhelming evidence of its deficiencies. The accountancy and auditing professions are as guilty as most in this regard, and suffer from rates of attrition and job turnover, which should be an embarrassment. But there are alternatives available, and this paper reports on the development of revolutionary techniques which might have a significant impact on recruitment to the accounting and auditing professions in the UK. A critical evaluation of the effect of participation in budget target setting on motivation Pamela Reid Keywords Accounting, Theory, Target setting, Participation, Performance Managerial Auditing Journal 17/3 [2002] Abstracts & keywords # MCB UP Limited [ISSN 0268-6902] This paper critically evaluates the effect of participation in budget target setting in an effort to increase the probability of an organisation’s goals being achieved and, in so doing, considers some of the numerous theories of motivation. Such theories include Maslow through to equity and expectancy theories. However, given that there are a multiplicity of variables at work here, the author concludes that the effect of participation is situation specific and dependent upon such variables: there is no ‘‘perfect’’ budgeting system. An assessment of the newly defined internal audit function Albert L. Nagy and William J. Cenker Keywords Internal audit, Committees, Risk management, Corporate governance, Competences The new definition of internal auditing defines the function as an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. The purpose of this paper is to summarize an assessment of this new definition obtained through structured interviews from 11 internal audit directors of large publicly traded companies. The responses from the directors indicate that there are wide differences in viewpoints and objectives; but a definite shift has occurred in the overall scope of internal audit towards operational activities. While most of the interviewees are in conceptual agreement with the new internal audit definition, an underlying warning is vocalized: ‘‘Don’t throw out the franchise’’. That is, the traditional role of the internal auditor should not be completely abandoned. These, along with other responses pertaining to related issues and suggestions for future research, are summarized throughout the paper. Auditing the indirect consequences of rework in construction: a case based approach Peter E.D. Love Keywords Construction industry, Indirect costs, Contract, Defective premises There is little known about the indirect consequences of rework in construction projects, especially the financial costs. Therefore, this paper uses examples from a case study to demonstrate the potential indirect consequences and costs that are associated with undertaking rework in building construction projects. A novel taxonomy for categorising the indirect consequences at an individual level, organisational level and project level is presented. Based on the findings from examples derived from the case study, it is suggested that the incidence of rework can have a multiplier effect of up to six times the actual (direct) cost of rectification. To reduce these costs it is concluded that design and construction organisations must improve their quality management systems by including a quality system for continuously auditing, analysing and presenting direct as well as indirect rework costs. [ 111 ] Abstracts & keywords Managerial Auditing Journal 17/3 [2002] 111–112 Corporate governance: communications from internal and external auditors Janet L. Colbert Keywords Corporate governance, Auditors, Communication, Finance International Standards on Auditing (ISAs) require external auditors to communicate with the client’s governance body regarding significant matters which came to the auditors’ attention during the engagement. Similarly, the authoritative Practice Advisories (PAs), issued by the Institute of Internal Auditors (IIA), mandate that internal auditors discuss certain items with the board. Thus, the governance body/board should be receiving information from two groups of auditors. Compares and contrasts the requirements of the ISAs and PAs with regard to communications with the governance body/board. The differences in the communications to the governance body/ board by the external and internal auditors derive mainly from the focus of each group. The external auditors serve those users external to the organization; in contrast, internal auditors serve the board, which is responsible for the internal aspects of the entity. Besides communication on financial issues, the board also desires information on operational and compliance matters. The comparison of the international external auditing and the internal auditing standards shows that some information received by the governance body/board is similar. However, much is unique. Both groups of auditors aid the governance body/board in achieving its objective of guiding the entity to carry out its mission effectively and efficiently [ 112 ] Slack in public administration: conceptual and methodological issues Tor Busch Keywords Costs, Management, Efficiency, Public administration Ever since its introduction, the concept of organisational slack has constituted the basis for a considerable body of research within behavioural science. A great deal of this research has concentrated on budgetary slack, and within the field of public administration the focus has been on the slack- or budget-maximising bureaucrat. As the reduction of slack is the purpose of many of the techniques which are part of the new public management, there is a need to focus on how to measure changes in the level of slack. The objective of this paper is to discuss the relationship between three central concepts within the research on slack: organizational slack, budgetary slack, and the discretionary budget; to assess whether these concepts are suitable for public organizations; and to discuss problems of measurement. Accounting and auditing requirements of the Sudan Companies Act 1925: time for change John A. Brierley Sheffield University Management School, The University of Sheffield, Sheffield, UK Hussein M. El-Nafabi Al-Madina Al-Munawarah College, Al-Madina Al-Munawarah, Saudi Arabia David R. Gwilliam School of Management and Business, University of Wales Aberystwyth, Aberystwyth, UK Keywords The Sudan, Legal matters, Balance sheets, Profit and loss, Accounting Abstract The Sudan Companies Act 1925 is outdated. There is a need for substantial revision to the Act either in accordance with, for example, current UK legislation, or a framework more directly suited to the economic and legal environment of the Sudan. At a general level this should include the preparation of a profit and loss account, specific formats for the profit and loss account and balance sheet, notes to the accounts and an auditor’s report stating whether or not the accounts give a true and fair view of the state of a company’s affairs. Managerial Auditing Journal 17/3 [2002] 113–116 # MCB UP Limited [ISSN 0268-6902] [DOI 10.1108/02686900210419886] Introduction The Sudan Companies Act 1925 (hereafter the Act) was modelled on the UK Companies Act 1908. Despite the Sudan gaining independence from the UK in 1956 it has not been amended. One of the reasons for this has been the distraction of the Sudanese civil war which broke out in 1955 and, except for ten years of peace following the 1972 Addis Ababa Agreement, has continued ever since. This has been exacerbated by seven different regimes (three civilian and three military) which have governed the country since independence. The common features shared by these regimes have been frequent changes of government, continuous cabinet reshuffles and high ministerial turnover. For example the Ministry of Economic Planning, which plays a major role in the management of the economy, has been led by 32 ministers since independence. The last multiparty democratic government, which came to office in 1986, saw four ministerial reshuffles in its three years in office with some ministerial offices changing hands on four occasions. These frequent cabinet reshuffles led to a lack of continuity in government which has been exacerbated by the lack of clear descriptions of ministerial posts, and of agreed policies or manifestos to be followed by the appointed ministers. Indeed, the lack of clear policies and strategies has made it the general norm in the Sudanese government’s history that every new minister starts his job by scrapping the policies adopted by his predecessor. This government instability affects the environment in which accounting and auditing operate and has contributed to the fact that no amendments have been made to the Act. Similarly, other acts established under British colonial rule have not been subsequently amended, these include the Bills of Exchange Act 1917 and the Insolvency Act 1929. Furthermore, it has been argued that the establishment of a professional accounting body in the Sudan was necessary to develop accounting and auditing practice. To this end individuals who were members of professional accounting bodies outside the Sudan, notably the Institute of Chartered Accountants in England and Wales and the Association of Chartered Certified Accountants in the UK, made several attempts in the early 1980s with the government to establish a professional accounting body in the Sudan. Due to the rapid changes in the political system during the 1980s these efforts did not come to fruition until the Certified Accountants Act 1988, which established the Sudanese Association of Certified Accountants (SACA). Article 4 of the 1988 Act sets out the functions of the council of the SACA, which includes the enhancement of the role of accounts in the commercial environment. This has not led, however, to any changes in the Act. Thus government instability and the lack of influence of the accounting profession has meant that the Companies Act 1925 has never been amended. The Act was introduced to assist the formation of private and public limited liability companies, and provide rules for the governance of their operations and financial affairs, but today it is out of date. The objective of this paper is to illustrate the outdated nature of the Act’s provisions relating to accounting and auditing and offer suggestions for updating the legislation. The paper is divided into three sections. The first section discusses the Act’s accounting provisions, the second section discusses the Act’s auditing provisions, and the third section provides a brief discussion of necessary changes to the Act. Accounting provisions The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0268-6902.htm Section 123(1) of the Act requires that every company shall keep proper books of account [ 113 ] John A. Brierley, Hussein M. El-Nafabi and David R. Gwilliam Accounting and auditing requirements of the Sudan Companies Act 1925: time for change Managerial Auditing Journal 17/3 [2002] 113–116 in which there shall be full, true and complete accounts of the transactions and affairs of the company. Section 124(1) states that every company has to prepare a balance sheet at least once a year and at intervals of not more than 15 months. Further, section 124(2) requires that the balance sheet has to be audited by the auditor of the company, and the auditor’s report should be attached to the balance sheet, or there should be inserted at the foot of the balance sheet a reference to the report. The auditor’s report should be read out at the general meeting and should be open to inspection by any member of the company. Section 125(1) requires that the balance sheet contains a summary of the property and assets, and the capital and liabilities of the company. Although no indication is provided as to the amount of disclosure, details should be provided of the ‘‘general nature’’ of assets and liabilities and ‘‘how the value of fixed assets has been arrived at’’. Details about the content of the balance sheet are stated in the Third Schedule Form C of the Act (see Appendix). There is no requirement to disclose comparative figures on the face of the balance sheet; hence it is not possible to make comparisons of amounts disclosed in the balance sheet with the previous year. The balance sheet does not require separate disclosure of the accounting policies used or further disclosure of items in the form of a note to the balance sheet. The balance sheet does not provide separate disclosure of a number of items, such as investments, like government securities, shares and debentures. Nor is there a requirement for a breakdown of stocks and work-in-progress and debtors (Tyagi, 1982). There is no detailed breakdown of liabilities, for example, Tyagi (1982) notes that disclosure is not required of proposed dividends and of the security for any loans received. There is no requirement to prepare a profit and loss account. The only requirement is to disclose the profit for the financial year on the face of the balance sheet, although this requirement does not apply if a separate profit and loss account is prepared. If a profit and loss account is prepared it does not have to follow any specific format, which may lead to difficulties when making comparisons between companies. Auditing provisions Section 138 of the Act specifies the powers and duties of auditors. Section 138(1) states that auditors have the right of access at all [ 114 ] times to the books, records and accounts of a company and are entitled to receive from the directors and officers of the company such information and explanations as may be necessary to carry out their work as auditors. Auditors are required to report on: . whether or not they have obtained all the information and explanations they require; . whether in their opinion the balance sheet has been drawn up in conformity with the law (presumably the Act); and . whether or not the balance sheet exhibits a ‘‘true and correct view of the state of the company’s affairs according to the best of their information and explanations given to them, and as shown by the books of the company’’ (emphasis added). The requirement to show a true and correct view is contrary to the concept of ‘‘true and fair view’’ in the UK. According to Tyagi (1982), the auditor is unable to certify whether the financial statements exhibit a ‘‘correct’’ view because the auditor is not connected with the management of the company. He argues that because the balance sheet is a summary statement of the activities of the whole company it is more appropriate for the auditor to assess whether the balance sheet shows a true and fair view. The Act does not require the auditor to state whether or not the profit and loss account, if prepared, gives a true and fair view of the profit (or loss) for the period, nor whether or not the accounts have been prepared properly in accordance with the provisions of the Act. Section 137 of the Act specifies the requirements regarding the qualifications and appointment of auditors. The Act does not specify the necessary qualifications of persons who are eligible to act as company auditors, although in order to preserve auditor independence section 137(5) does prevent certain persons from acting as auditors. These include: . a director or officer of the company; . a partner of such a director or officer; and . any person in the employment of a director or officer. Section 137(1) requires that an auditor should hold a certificate issued by the Minister of Finance and National Economy. Usually the auditor is appointed at the annual general meeting until the next such meeting. If for some reason an auditor is not appointed at the annual general meeting, section 137(4) states that the court may, following the application of any member of the company, appoint an auditor and fix their remuneration for the current year. John A. Brierley, Hussein M. El-Nafabi and David R. Gwilliam Accounting and auditing requirements of the Sudan Companies Act 1925: time for change Managerial Auditing Journal 17/3 [2002] 113–116 Discussion The 1925 Companies Act is outdated and does not reflect the changes and the worldwide developments in the areas of accounting and auditing practice. There is clearly a need for substantial revision of the Act either in accordance with, for example, current UK legislation or, perhaps more appropriately, in line with a framework more directly suited to the economic and legal environment of the Sudan. At a general level this should include the preparation of a profit and loss account, specific formats for the profit and loss account and balance sheet, notes to the accounts and an auditor’s report stating whether or not the accounts give a true and fair view of the state of a company’s affairs. Reference Tyagi, C.L. (1982), ‘‘Balance sheet reform needed’’, Sudanow, Vol. 7 No. 11, p. 29. Appendix. Third Schedule Form C of the Sudan Companies Act 1925 . . . . . . . . . . . Limited Balance-sheet As at . . . . . . . . 19 . . . . Capital and liabilities Capital LS. m/ms Authorized capital . . . . . . shares of LS . . . . . . each ........ Issued capital . . . . . . shares of LS . . . . . . each ........ Subscribed capital . . . . . . shares of LS. each ........ Amount called up at LS. per share ........ Less calls unpaid ........ Add – forfeited shares (amount paid-up) ........ Reserve fund or development fund ........ Any sinking fund ........ Any other fund created out of net profits ........ Any pension or insurance fund ........ Provision for bad and doubtful debts ........ Loans on mortgage or mortgage debenture bonds ........ Loans otherwise secured (stating the nature of security) ........ Loans unsecured ........ Interest ........ Accrued on mortgages, debentures of other secured loans ........ Unclaimed dividends ........ Liabilities For goods supplied ........ For expenses ........ For acceptances ........ For other finance ........ Advanced payments and unexpired discounts . . . . . . . . . . (For the portion of which value has still to be given, e.g. in the case of the the following classes of companies: Newspaper, fire insurance, theatre, club, banking, steamship companies, etc.) ........ [ 115 ] John A. Brierley, Hussein M. El-Nafabi and David R. Gwilliam Accounting and auditing requirements of the Sudan Companies Act 1925: time for change Profit and loss LS. m/ms Balance brought forward ........ Managerial Auditing Journal 17/3 [2002] 113–116 Profit since last balance-sheet ........ Balance as per previous balance-sheet ........ Less – appropriation thereof ........ (N.B. – These details need not to be given if the same be contained in a profit and loss account attached to the balance-sheet.) Contingent liabilities – claims against the company not acknowledged as debts ........ Money for which the company is contingently liable ........ Arrears of cumulative preference dividends ........ Property and assets Fixed capital expenditure ........ (Distinguishing as far as possible between expenditure upon goodwill, land, buildings, leaseholds, railway sidings, plant, machinery, furniture, development of property, patents, trade marks and designs, interest paid out of capital during construction, etc., and stating in every case the original cost and the total depreciation written off under each head). Preliminary expenses ........ Commission or brokerage ........ (Commission or brokerage paid for underwriting or placing shares or debentures until written off) ........ Stores and spare gear ........ Loose tools ........ Live stock ........ (Stating mode of valuation, e.g. cost or market value.) Bills of exchange ........ Book debts ........ (Distinguishing in the case of a bank between those considered good and in respect of which the bank holds no security other than the debtor’s personal security, and distinguishing in all cases between debts considered goods and debts considered doubtful or bad. Debts due by directors or other officers of the company or any of them either severally or jointly with any other persons to be separately stated in all cases.) Advances ........ (Recoverable in cash or in kind or for value to be received, e.g. rates, taxes, insurance, etc.) Investments ........ (Nature of investment and mode of valuation, e.g. cost or market value.) [ 116 ] Interest accrued on investments ........ Cash and other balances ........ Amount in hand ........ Balances with agents and bankers (in detail, showing whether on deposit or current etc.) ........ Profit and loss (giving in the case of a debit balance details as far as possible as in the case of a credit balance) ........ Re-engineering recruitment to the accounting profession Malcolm Smith School of Accounting and Information Systems, University of South Australia, Adelaide, Australia Christopher Graves School of Accounting and Information Systems, University of South Australia, Adelaide, Australia Keywords Recruitment, Biodata, Forecasting, Performance, Modelling Abstract There can be few personnel techniques so lowly regarded as the recruitment interview. Yet we persevere with the use of the technique despite the overwhelming evidence of its deficiencies. The accountancy and auditing professions are as guilty as most in this regard, and suffer from rates of attrition and job turnover, which should be an embarrassment. But there are alternatives available, and this paper reports on the development of revolutionary techniques which might have a significant impact on recruitment to the accounting and auditing professions in the UK. During this decade, dramatic changes have occurred in the business environment. In order to remain competitive, accountancy firms now need to provide a diverse range of services to their clients, at low cost. To meet these challenges, it is critical that accountancy firms select their employees carefully, as failure to select the right staff can be costly. Some of the costs associated with poor recruitment decisions include: lower productivity and competitiveness, potential loss of clients, training costs, advertising costs, recruitment fees and redundancy packages. The US Department of Labour estimates that a poor recruitment decision can cost the employer an amount equal to 30 percent of the employee’s first year’s potential earnings (Hacker, 1997). KPMG state that ‘‘the current estimate of investment per student is £100,000’’ (KPMG-UK, n.d.). Recruiters face a difficult task as they need to make a decision that predicts the contribution that an individual will make to the organisation in the future based on the factual and personal information available now. As a result, any recruitment selection procedure adopted by the accounting profession will be an imprecise selection tool. Essentially, there is no real substitute for observing the performance of individuals in the field, hence the popularity of intern relationships. However, these may not always be available. Practical tests conducted at interview may be a less than satisfactory alternative, but are still not universally adopted. Conventional approaches to recruitment Managerial Auditing Journal 17/3 [2002] 117–121 # MCB UP Limited [ISSN 0268-6902] [DOI 10.1108/02686900210419895] Most frequently, recruiters adopt a two-stage procedure: The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0268-6902.htm 1 Select (or not) candidates for interview based on the contents of their application form requiring biographical information (biodata). 2 Make a final employment decision based on a personal interview; this itself may be a two-stage procedure if applicants are first used to draw up a short-list of potential appointees. Dipboye et al. (1984) suggest that ‘‘no other personnel technique is held in such low esteem in the research literature as the interview’’, yet despite its demonstrable lack of reliability and validity, the unstructured interview remains the prime assessment mechanism in graduate recruitment. This is despite the fact that, before the interview, applicants complete a form containing historic and verifiable information about the individual which would permit the development of scoring systems and the construction of models with potentially high predictive ability of eventual success. In the UK, around 30 percent of graduates entering the profession ultimately fail to qualify as accountants, a statistic which Harvey-Cook and Taffler (1987) attribute to failures of recruitment procedures. Harvey-Cook et al. (1998) and Gammie (1999) demonstrate that selection models using biographical data have value to recruiters and outperform conventional approaches; they suggest that significant benefits can be accrued by the accountancy profession through the adoption of formal statistical procedures at the selection stage. Emerging recruitment techniques Harvey-Cook et al. (1998) Holland (1976) finds that people with similar background characteristics form six vocational types: realistic, social, investigative, creative, conventional and enterprising. Accountants are generally of the ‘‘conventional’’ type. Biographical data [ 117 ] Malcolm Smith and Christopher Graves Re-engineering recruitment to the accounting profession Managerial Auditing Journal 17/3 [2002] 117–121 on personal characteristics and previous academic performance have been shown to be the best predictor of employee turnover (Gable et al., 1989), job performance (Hunter and Hunter, 1984) and voluntary withdrawal during training (Drakeley et al., 1988). In the UK, the most common cause of withdrawal from the profession during training is examination failure. As a result, Harvey-Cook et al. (1998) first developed a model for success in the professional examinations (Model 1) and then a model for ‘‘success’’ which incorporated both progress in examinations and good work performance (Model 2). Both of these models were constructed based on applicants to the profession employed by second-tier accounting firms (i.e. not the then Big 6). The models The two models are described as follows: 1 Model 1: to predict examination success. Six significant variables were identified in trainee application forms that contributed to examination success. In descending order of importance: . number of grade As at ‘‘O’’ level; . a good first degree (first or upper second class); . number of arts or language ‘‘A’’ levels (a negative variable); . first degree in science or mathematics; . head boy or girl at school; . independent school background. The model’s overall probability of correct classification is 74 percent, with 78 percent of ‘‘pass’’ predictions correct and 69 percent of ‘‘fail’’ predictions correct in a sample of 229 applicants taking the professional examinations (see Table I). 2 Model 2: to predict good work performance. Again six significant variables were identified. In descending order of importance: . number of ‘‘A’’ levels in science subjects; . head boy or girl at school; . number of teams and societies at school; . exemption from the graduate conversion course specifically designed for non-accounting graduates; . degree class for first degree; Table I Model 1: to predict examination success Actual pass Actual fail Overall [ 118 ] Predicted pass Predicted fail Correct (%) Total 102 30 132 29 68 97 78 69 74 131 98 229 size of social interaction groups at university (a negative variable). The model’s overall probability of correct classification is 75 percent, with 75 percent of the ‘‘successful’’ predictions correct, and 76 percent of the ‘‘unsuccessful’’ predictions correct (see Table II). . These two models were confirmed by applying them to a second group of applicants three years later. Relevance to the accounting and auditing professions As both models are based on UK data, the important variables in each of the models provides a fair reflection of what might be important characteristics in a UK environment: . ‘‘O’’ level (now GCSE) grades are the most important feature in predicting examination success. These exams are undertaken at age 16 and provide the basic evidence of performance ability for university selection interviews in the following year. Although ‘‘A’’ levels are completed at age 18, in most cases these will only determine the particular university destination; with minimal performance at ‘‘A’’ levels, the ‘‘O’’ level performance may determine university entrance. . Students who choose electives in mathematics and science at school are likely to fare better than those choosing arts and languages. . Students who choose an accounting degree at university, and who are therefore not subjected to a graduate conversion course, or equivalent, should do better in the profession. . Interpersonal skills and social activities undertaken at school are important and positive – e.g. school dux, sports colours and team participation. The opposite appears to be true at university, where extra-curricula activities appear to have a negative effect. . The class of first degree awarded is significant, so the achievement of First Class Honours or a ranking in the top 5 percent of graduating students would be positively regarded. . This study showed that an independent school background was a positive factor, though one less important than the other factors. Gammie (1999) Gammie (1999) constructed similar models for predicting success in the professional examinations. However, this study extends