YOUR JUNE EXAM TIPS

YOUR JUNE EXAM TIPS

The June exams are almost upon us. We take a look at the tips for passing four problem papers at the Applied Skills and Strategic levels – we are talking PM, AA, APM & AAA!

Performance Management (PM)

March pass rate 42%

Section A will have 15 two-mark OTQs on a wide range of topics. Expect a mix of calculation- and discussion-based questions, but please note that there are no marks for workings in this section. Good time management is essential as it is easy to get caught up in a tough calculation, which ultimately will only be worth two marks. Never be tempted to spend more than five minutes on any question in this section.

For section B there are three separate scenarios with five objective test questions on each scenario; each question is worth two marks. Questions are not dependant on each other and can be answered in any order. Each scenario could be a mix of topic areas or focused on one topic and will usually consist of two/three calculations and two/three narratives.

In section C there are two 20-mark questions, which could be from but not limited to: budgetary systems, planning and operational variances, mix and yield variances, and evaluation of the company performance (either as a whole basis or on a divisional basis).

Familiarity with the CBE software is important as you may be expected to use both a word processing and spreadsheet format for your answer. Learn standardised layouts for calculations such as variances, learning curves and limiting factors. This will save you time in the exam and mean that you are less likely to make mistakes.

The split of marks tends to be approximately 40% calculations and 60% discussion, so don’t neglect the written elements of this paper. Make sure that you always fully explain your ideas, too. Interpretation and application are important skills that are tested in this paper so make sure you make full use of the scenarios that you are given in the exam.

Audit & Assurance (AA)

March pass rate 47%

In section A there will be three mini-case style scenarios, each with five two-mark questions based on the scenario (total 30 marks). Each mini-case question will test single topic areas of the syllabus and so will test syllabus areas A, B, C, D or E. Expect questions in section A to focus on areas A and E.

All three questions (one 30-mark and two 20-mark questions) in section B will be broken down into sub-requirements and be scenariobased. Most marks in each question will test syllabus areas B, C and/or D.

Areas expected to be tested in questions 16 to 18 include:

• Audit planning.

• Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk).

• Internal audit.

• Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls, and identification and explanation of direct controls and description of test of control).

• Audit procedures (substantive procedures and tests of controls).

General advice: Where questions are based on a scenario it is essential that you use the information in the scenario to score the identification marks and then develop this to score the explanation marks.

The exam often provides a table for you to complete your answer. For example, audit risk questions will have a table with two columns, one for ‘audit risk’ and one for ‘auditor’s response’, with each properly explained point being worth one mark.

Advanced Performance Management (APM)

Mark pass rate 39%

Q1 section A: Q1 of the APM exam will focus on a range of issues from syllabus section A (strategic planning and control), section B (performance measurement systems and design) and section C (strategic performance measurement).

Section A (50 marks) contains one question broken down into sub requirements. You will often be required to link a business’s mission to its performance objectives using the concept of CSFs and KPIs. You may well also have to critique and recommend improvements to performance reports and the balanced scorecard and/or information systems could well be tested in this context.

Assessing the performance of an organisation is likely to be tested and this could include benchmarking as a theme.

Financial performance measures (ROCE/RI/EVA etc) are also likely to be examined in this context, but don't neglect non-financial issues from syllabus section C such as quality management, value for management and reward systems.

Q2-3 section B: ACCA has said that one of two section B questions will come from syllabus section D (performance evaluation). This means you need to have sound knowledge of the balance scorecard, building block and performance pyramid models. You will also need to have a good working knowledge of activity based management (ABM) and value based management (VBM).

The other question can be sourced from a variety of syllabus areas including quality management, information reporting (e.g. big data, lean information), HR frameworks (e.g. reward & appraisal systems), transfer pricing and environmental management accounting.

General advice: APM is primarily a skills-based exam that tests the ability to apply knowledge to practical problems. This is now even more important as 20% of the marks are awarded for professional skills. Make sure you aware what these skills are and that you are confident in your ability to integrate these into your answer to the technical requirements of a question.

However, application of knowledge is only possible if you have a good range of technical skills in place. So, even though APM is not about reciting technical knowledge, it is vital that you ensure that you have a good broad knowledge of core technical areas.

Advanced Audit & Assurance (AAA)

pass rate 39%

Recent AAA exams have contained no real surprises, although you should be prepared for the look and feel of the embedded email and supporting exhibits and the split of both technical and professional skills marks.

Section A will comprise a case study, worth 50 marks, split into 40 technical marks and 10 professional skills marks, and will be set at the planning stage of the audit, for a single company, a group of companies or potentially several audit clients.

Candidates will be provided with detailed information, which will vary between examinations, but is likely to include extracts of financial information, strategic, operational, and other relevant information for a client, as well as extracts from audit working papers, which could include the results of analytical procedures.

The date will be set as 1 July 20X5 unless you are told otherwise.

Candidates will be required to address a range of requirements, from syllabus sections A, B, C and D, thereby tackling a real-world situation where candidates may have to manage a range of issues simultaneously in relation to planning, risk assessment, evidence gathering and ethical and professional considerations.

Ten professional marks will be available in section A and will be awarded based on the demonstration of professional skill within a candidate’s answer, including communication, analysis and evaluation, professional scepticism and judgement, and commercial acumen.

Section B will contain two compulsory 25-mark questions, with each being predominately based around a short scenario. The marks will be split into 20 technical marks and five professional skills marks. There are no optional questions in AAA.

One question will always test syllabus section E, and candidates should therefore always be prepared to answer a question relating to completion, review, and reporting. There are a number of formats this question could adopt including, but not limited to, matters to be considered and evidence expected to be on file, a going concern assessment, the impact of subsequent events, evaluating identified misstatements and any corresponding effects on the auditor’s report. Candidates may also be asked to critique an auditor’s report or a report that is to be provided to management or those charged with governance.

The second section B question can be drawn from any other part of the syllabus, including sections A, B, C, D and F. Syllabus section G on current issues is unlikely to form the basis of a question on its own, but instead will be incorporated into the case study or either of the section B questions depending on question content and the topical issues affecting the profession at the time of sitting the exam.

Five professional marks will be available in each Section B question for demonstrating professional skill in analysis and evaluation, plus at least one of professional scepticism and judgement and commercial acumen.

This is a technically demanding exam which tests auditing knowledge from both AA and AAA. All three exam questions will require you to apply this knowledge to the scenarios given: the professional marks will be awarded on the strength of your application of knowledge to the situation presented in each of the exhibits. Apart from poor auditing knowledge, lack of success usually comes from poor analytical skills, poor application, poor judgement. and poor timekeeping.

This subject can also test topical issues which have been covered by the AAA examination team’s technical articles (e.g. quality management in September 2022, and the impact of data analytics in September/December 2020).

You should even be prepared for a requirement where you will not need to refer to an exhibit at all (in other words, a knowledge-based requirement) which was seen in in 2024: for example, when candidates were asked to: ‘Discuss the challenges associated with the use of data analytics in performing external company audits’. This is most likely to be seen in Section B.

Check out the examining teams two articles on quality management, two articles on planning questions and risk, plus another two articles that discuss recent developments in social, environmental and sustainability reporting. There are also ‘Topic explainer’ videos on areas such as quality management, audit procedures and prospective financial information (forecasts) that you may find of use.

The examining team has advised that certain less-frequently examined topics such as audit committees, money laundering, internal auditing and outsourcing could make an appearance, so you should make sure you have covered a good breadth of subjects in your revision. Note that for the syllabus examinable from September 2024, there has also been an increased focus on sustainability assurance following the issue of the IAASB’s exposure draft of ISSA 5000.

• For all the June tips for TX, FR, FM, SBL, SBR, AFM and ATX go to www.pqmagazine.com