ACCA EXAM TIPS - December 2008

The aim of the syllabus is to develop knowledge and understanding of the application of management accounting techniques to support the management processes of planning, decision making, control, and performance measurement. The paper builds upon the knowledge of cost accounting acquired at Intermediate Level Paper 4.

Syllabus objectives

To successfully pass the examination, candidates are required to:

• identify valid, relevant data from internal and external sources
• present cost information using appropriate methods
• prepare forecasts of income and expenditure
• monitor and analyse actual costs against forecasts and trends
• compare actual costs with standard costs and analyse and explain any variances
• prepare draft budget proposals
• prepare and present reports comparing actual performance with planned performance for the organisation or for responsibility centres and analyse any variances for management control purposes
• prepare and monitor relevant performance indicators, interpret the results and recommend how to reduce costs and enhance value
• make short-term decisions to enhance business performance.

Examiner’s Approach

All areas of the syllabus, and each area outlined in the Study Guide, are important and are expected to be tested at sometime over a three-year cycle. In examining the syllabus I will seek to test candidates’ understanding of concepts as well as their ability to perform calculations. It is unlikely that candidates who only attempt calculation sections or who simply rote learn material will pass the paper.

Much of the syllabus is common to the old scheme Paper C2 and past examination questions from this paper will provide an excellent basis for revision. Some new areas are however included, in particular in the area of performance measurement. Where possible I will seek to relate new areas to traditional management accounting principles, methods and techniques, for example the impact of costing principles on performance measurement.

Paper format

The format of Paper 7 will comprise four compulsory questions. Question 1 on each paper will be for 40 marks, with three further questions of 20 marks. Questions may be entirely narrative or entirely computational, Normally, questions will contain an element of both – with the balance across the paper being as described above.

Conclusion

In order to pass this examination, candidates should:

• clearly understand the objectives of the exam as explained in the Syllabus and Study Guide
• thoroughly study a Planning, Control and Performance Management manual or textbook
• understand the strengths and weaknesses of the management accounting principles methods and techniques covered by the syllabus
• read relevant articles in student accountant
• practise examination standard questions on a regular basis
• be able to apply and communicate their understanding in an examination context.

Steve Jay is examiner for Paper 7