Latest ACCA Exam Pass Rates Analysis and Examiners Comments

Tommy Leung | 8 December 2019

ACCA September 2019 results and pass rates for all papers are published!

 

First of all, congratulate to 3,646 ACCA students passed their final exam and become ACCA affiliates. 

The focus in this attempt is SBR. SBR pass rate is 52% which is the highest since it's started in September 2018.

 

ACCA executive director strategy and development said: ‘We’re delighted with the September 2019 exam results. It’s very pleasing to have achieved the best results to date for the SBR exam, a year after its first introduction into the ACCA qualification."

Link to announcement:

https://www.accaglobal.com/gb/en/news/2019/october/Sept2019_results.html

In addition, ACCA will launch Strategic Professional CBE in 2020. Just check our analysis of the new Strategic Professional CBE for your benefits.

ACCA September 2019 Pass Rates

It is always important to review examiner comments as they are highly regarded as the exam tips directly from the authority. No matter you will attempt December 2019 or any future exam, they are the ‘tips’ to you.

 

Let’s start the sharing of what examiners tell you need to pay attention in next exam!

Applied Skills Module Pass Rates

Overall pass rates on Applied Skills Module paper are more or less the same as prior session.  Higher pass rates paper, FR, is a bit disappointed in September session while both TX and FM show very strong pass rate in September exam session!

Lower pass rates papers, such as PM and AA, still maintain at the end of the queue and AA is the worst by less than 40% of students passing them in this attempt.

ACCA September 2019 Applied Skills Paper Pass Rates
ACCA PM – Pass rate above 40% but still room to improve

ACCA PM pass rate in September 2019 is 41%, higher than June session but within the range of past 10 attempts! 

Similar to other Skills Module papers, ACCA PM has 3 sections while Section A is objective test questions, Section B is case based objective test questions and Section C is constructed response questions.

 

In September 2019, 2 areas in Section A are found difficult to a lot of students, they are –

  • The classification of costs to environment cost categories;

  • The calculation of relevant costs for a decision.

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In Section B, it tests your knowledge on a number of topics in more detail than Section A.

It covers the whole syllabus and you need to read the case scenario and requirements very careful.

 

In September 2019 exam, the following topics are seen in Section B –

  • Life-cycle costing

  • Pricing

  • Variance analysis *

  • Throughput accounting

  • Short-term decisions

 

*Topics were found in ACCA PM June 2019 exam.

 

For Section C, five areas are presented in the questions –

  • Transfer pricing. It is a very regularly examined topic and candidates scored well this sitting due to good exam technique, that is, picking up easy marks that were available for some relatively straightforward profit calculations. The Portable Garage Company (PG Co) in March/June 2018 sample questions is a good reference on this topic.

  • Limiting factor analysis which it centers on decision-making when one or more resources are limited. If only one resource is limited, key factor analysis should be used; if multiple limiting factors exist, which was less well answers, you need to undertake linear programming from start to finish.

  • Performance measurement. There are many different subtopics here such as financial/non-financial performance, divisional performance and not-for-profit business performance. However, the general principle to answer is the same which use the scenario information given to assess the performance as required.

  • The fourth topic is CVP analysis. Examiner found many candidates can do well in basic calculations, but not in interpretation elements of the requirements.

  • Another regularly examined topic is budgeting which is also in this attempt. It’s good to see many good answers showing the ability to explain pros and cons of different budgeting methods. The only area to improve is how to link this knowledge to the scenario in question.

 

Detailed examiner’s report can be found: https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f5/examinersreports/pm-examreport-s19.pdf

Click to read what resources provided to you to pass ACCA PM

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ACCA AA – Most challenging paper in Applied Skills Module

36% of students pass ACCA AA in September 2019 attempt which is still the lowest among all same level papers.

The paper is different from other Applied Skills Module paper while 70% of the total marks are from written questions.

 

It is the key to explain why its pass rates are usually at the bottom among all papers in the same module.

 

In Section A, the following areas are highlighted by examiner –

  • Professional ethics and application of ACCA’s Code of Ethics and Conduct;

  • Substantive procedures * including bank and cash, share capital and inventory;

  • Audit finalization and review; and

  • Auditor’s reports *

 

*Areas are seen in June 2019 examiner report.

 

Examiner usually highlights two questions in his report to show what kind of questions or areas are challenging to students. 

 

In this attempt, audit procedures relevant to bank and cash and audit review and reporting are highlighted.

Looking Out of a Skyscaper

In Section B, five areas are seen which are –

  • Audit framework and regulation

  • Planning and risk assessment

  • Internal control (Disappointing)

  • Audit evidence (Disappointing)

  • Review and reporting (Score well)

 

In Audit framework and regulation, you are expected to have a scenario-based ethics or corporate governance questions.  ‘Hurling Co’ from March/June 2017 and ‘Freesia Co’ from Sample March/June 2019 questions are recommended to you.

 

The most common question in Planning and risk assessment is to identify and explain an entity’s audit risk as well as auditor’s response to each risk identified.

 

To explain audit risk, examiner says it is a MUST to state the specific area of the financial statements impacted with an assertion.

 

Two samples are suggested to you to prepare for next exam, “Blackberry Co” from March / June 2018 and “Cupid & Co” from September / December 2017.

 

Internal control question performance in September 2019 was disappointing. The following areas are poorly performed:

  • Failed to score many marks across all questions including knowledge of control objectives, internal audit and internal control limitations.

Good example questions to practice on knowledge requirement are Comet Publishing Co from September/December 2017 and Raspberry Co from March/June 2018.

In addition, if you are looking for good internal control deficiencies and recommendations questions to practice, check out Equestrian Co from March/June 2017 and Camomile Co from September/December 2018.

Audit evidence requires you to describe relevant audit procedures for a particular class of transactions or event.  Key issues are:

  • Many candidates are unable to tailor their knowledge of general substantive procedures to the specific issues in the question requirement;

  • Unable to audit exceptions noted in receivables and payables circularisations.

Good examples for reference in this topic are ‘Dashing Co’ from September/December 2017 and ‘Gooseberry Co’ from March/June 2018 questions to know what are expected.

Review and reporting requires an understanding of subsequent events and going concern can inform the conclusion from audit work.

 

Generally, the overall performance in this session is good. Key areas to note are:

  • Auditor’s report questions on discussing an accounting issue, assess whether the error is material, consider the type of modification;

  • Going concern indicators and procedures.

To understand more on auditor report and ISAs, “Airsoft Co” from March / June 2017 and “Jasmine Co” from September / December 2018 are good examples.

 

Detailed examiner’s report can be found: https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f8/examinersreports/aa-examreport-s19.pdf

Click to read what resources provided to you to pass ACCA AA

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ACCA FM (was F9) – Good performance!

ACCA FM September 2019 pass rate is 50% which is at the top of past 10 sittings.

Two difficult questions are highlighted in Section A which one of them is numerical and tests the dividend growth model.

 

Another question is testing knowledge of interest rate risk.

 

Section B consists of 3 scenarios and 5 objective questions for each scenario.

 

The following 4 areas are highlighted in the report:

  • Working capital – Unable to calculate the cost of accounts receivable factoring or offering early settlement discount;

  • Business finance – Some issues in questions related to WACC calculations, dividend growth model and calculations of the cost of equity;

  • Business valuation – Issues on questions related to the uses and limitations of the valuation models, calculations of earnings yield and impact on share prices under various forms of market efficiency;

  • Risk management – Not strong on question about feature derivatives, e.g. characteristics of options and futures contracts.

 

Section C consists of 2 constructed response questions requiring students to display deeper knowledge of topics in working capital management, investment appraisal and business finance.

In general, students perform better in calculated-based questions than discursive questions.

 

Here are the highlights on the questions drawn mainly from the syllabus areas of:

  • The nature, elements and importance of working capital

  • Management of inventories, accounts receivable, accounts payable and cash *

  • Determining working capital needs and funding strategies *

  • Investment appraisal techniques *

  • Allowing for inflation and taxation in DCF (discounted cash flow) *

  • Adjusting for risk and uncertainty in investment appraisal

  • Specific investment decisions *

  • Sources of and raising business finance *

  • Sources of finance and their relative costs

  • Capital structure theories and practice considerations

  • Finance for small and medium sized entities (SMEs)

*Topics were found in ACCA FM June 2019 exam.

 

There are three areas that would be addressed here as many candidates performances were weak –

 

Working capital management: Unable to calculate financial effect of each option in managing inventory, too brief in explaining working capital needs and funding strategies.

 

Specific investment decisions: Incorrectly discounting the borrowing to buy cash flow with before-tax interest rate, mistiming the cash flows.

 

Sources of finance and their relative costs: The most common errors here were 1) Omitting retained earnings from the equity portion of the denominator for the gearing ratio; 2) Not using the financial gearing ratio as defined in the question.

 

Detailed examiner’s report can be found:

https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f9/examinersreports/fm-examreport-s19.pdf

More guidance & resources on ACCA Financial Management?

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ACCA FR (was F7) – Stable performance

ACCA FR pass rate was 46% in September 2019 attempt.  It is within the range from past 10 attempts history although it is lower than June 2019.

Section A consists of 15 objective questions while an approach suggested by examiner is where answer options are available, you should resist looking at these until you have fully worked the question.

 

Here 2 specific questions that caused difficulty in September 2019 are shared –

  • Discuss what is meant by understandability and verifiability in relation to the provision of financial information;

  • Describe and apply the requirements of relevant accounting standards to research and development expenditure.

 

Section B consists of three scenarios and 5 objective questions each are based.

 

General speaking, it tests your knowledge on a number of IFRS in more depth than in Section A.

 

In September 2019, the following topics were weak:

  • Deferred tax and revaluations of non-current assets

  • Accounting policies

  • Non-current assets and cash generating units

  • Revaluation of non-current assets and government grants

  • Leases

  • Revenue *

 

*Topics were found in ACCA FR June 2019 exam.

 

Section C questions are mainly drawn from the areas of:

  • Single entity accounts preparation

  • Analysis of single entity financial statements

  • Preparation of consolidated financial statements

  • Analysis of consolidated financial statements

 

Single entity accounts preparation is asking students to prepare financial statements from a trial balance and a set of adjustments.

 

The most technical areas found to be challenging to students are 1) Recognition of a provision from an onerous contract (IFRS 15); and 2) Recognition an impairment loss on reclassification of the manufacturing equipment as a held-for-sale asset.

 

Examiner suggests three past paper questions in ACCA Financial Reporting are good for reference: Vernon Co from March/June 2019, Duggan Co from September/December 2018, and, Haveford Co from March/June 2018.

 

Performance in Analysis of single entity financial statements was disappointing compared to previous diets.  Financial ratio calculations are generally good but a few number of candidates were unable to calculate the asset turnover ratios.

 

There are two issues needed to be address on this area 1) Appraisal part of the question were often disappointing; 2) Providing results from ratio calculations without providing the underlying working.

Good examples for practice from past paper are Mowair Co from September/December 2017 and Funject Co from March/June 2017.

In Preparation of consolidated financial statements, the following areas are needed to take note –

Difficulty in the adjustment of issue of a share exchange on the acquisition of an associate company;

Incorrectly recording the entire gain on subsidiary investment within group retained earnings, which should be referenced to IFRS 9 Financial  Instruments on how to recording.

Examiner suggests three past paper questions good for reference in this area: Party Co from September/December 2017, Dargent Co from March/June 2017, and, Bycomb Co from June 2015.

 

The last part is Analysis of consolidated financial statements.  In September 2019, students were either required to calculate the group gain or loss following the disposal of a subsidiary or to calculate non-controlling interests.

 

Two common errors were found: 1) Not including non-controlling interests in the disposal calculation; 2) The analysis section answers were scant or had little substance.

 

Four past paper questions are recommended for reference: Pirlo from March/June 2019, Duke Co from September/December 2018, Perkins from March/June 2018 and Gregroy Co from September 2016.

 

Detailed examiner’s report can be found:

https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f7/examinersreports/fr-examreport-s19.pdf

More guidance & resources on ACCA Financial Reporting?

Strategic Professional Module Pass Rates
ACCA September 2019 Strategic Professinal Pass Rates

The focus in this attempt is SBR. SBR pass rate is 52% which is the highest since it's started in September 2018.

ACCA executive director strategy and development said: ‘We’re delighted with the September 2019 exam results. It’s very pleasing to have achieved the best results to date for the SBR exam, a year after its first introduction into the ACCA qualification."

Strategic Professional Level papers ask you to write all of your answers. To pass the exam, you have to possess the ability to write concise but accurate and complete answers.

Writing with confidence_Writing beginner
Writing with confidence_Writing beginner
ACCA SBL – Reading and Planning is the key to pass

It is a 4-hour exam with a single compulsory section.

The marking scheme included 80 technical marks for the correct use and application of technical knowledge.

 

In addition, 20 marks are for professional skills and competencies.

 

Generally, you need to take note of the following in order to do well in SBL:

  • Spend sufficient time reading and assimilating the case study material before even contemplating answering the questions;

  • Spend sufficient time planning their answers to ensure they are structured logically, covering most important points, balanced in terms of depth and breadth of discussions, not padded out with superfluous waffle and avoiding unnecessary overlap and duplication;

  • It is recommended to answer the requirements in order especially examiner considers future exams may follow a timeline or have question requirements that progress in other ways.

 

Professional skills tested in this attempt include analysis, commercial acumen, scepticism, evaluation and communication.

 

General comments on this session SBL exam are –

  • Generally, all three questions are answered but the quality of some candidate’s answers tailed off towards the end of the exam with indications that they either mismanaged their time or had run out of stamina;

  • Mostly answered the questions in order although some of students leaving one question to answer at the end. Although this examination did not follow a timeline and therefore candidates should not have been disadvantaged by answering questions out of sequence, it is recommended that candidates answer the requirements in order.

There are two parts in question 1

 

Part a asks to produce a set of notes for a presentation on sales development strategies requiring a demonstration of commercial acumen skills. 

 

Part b requires an evaluation the financial and non-financial implications of prioritizing an order as well as making a recommendation.

 

Good answer in Part a included clear and well-structured presentation notes, focused on the impact of the

strategies proposed on the company’s strategic aims.

 

The overall standard of Part b answer was extremely disappointing especially the financial analysis. Many answers show they are not familiar with the financial techniques and methodologies required for SBL exam and future candidates have to bear in mind.

 

Question 2 is divided into two parts. 

 

Part a asks for an analysis on how the risks in the risk register could impact on both strategic aims and make recommendation to mitigate the risks.

 

Part b requires classifying and evaluating directors responses relating to the use of child labour.

 

Part a is well answered with well structure in an appropriate format.

 

Part b answer standard was a huge degree of variability while part b(i) and (ii) were well answer with correct application of TARA framework and proper explanation of ethical consequences. Part (iii) is poorly answered especially on the control measures.

 

Question 3 asked for evaluation on the company’s criteria to achieve performance excellence.

This task was the section of the exam paper where candidates performed worst.

The key problem in this question is many students did not demonstrate a sound knowledge of performance excellence or the Baldridge model. Therefore, very few answers can identify the areas which were being achieved by Dulce and those which were missing from the Baldridge model.

 

Detailed examiner’s report can be found:

https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/SBL/sbl-examreport-s19.pdf

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More guidance & resources on ACCA SBL?

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ACCA SBR – It is the best performed SBR exam ever

The purpose of SBR is to assess your professional competences within the corporate reporting environment. 

Its syllabus is not significantly different to the P2 syllabus but it requires more written answers rather than numerical ones.

The exam contains two sections, A and B.  Section A includes 2 questions which totaled 50 marks while Section B has 2 questions and 25 marks each.

 

General approaches to SBR examination are –

  • Students are examined on how they apply concepts and principles to life-like scenarios that reliance on a single textbook or revision course will not be sufficient to pass. Their readings are expected to expand beyond textbook including articles from IASB, the profession and ACCA.

  • Students are expected to synthesise and evaluate material, the key focus is on the application of knowledge.

  • The SBR exam also includes ethical aspects requiring students to show their understanding of the professional and moral judgments.

SBR September 2019 pass rate is 52%, it’s the highest since the SBR launched in 2018 which shows an improvement in the overall performance of this examination compared to previous SBR examinations.

Question 1 is divided into three parts. 

  • Part a asks i) calculation of goodwill on acquisition measuring the NCI and; ii) an explanatory note of how the fair value of a factory site is determined as part of a subsidiary acquisition.

  • 11 marks were available in Part b which required discussion and calculation of an impairment loss relating to the same subsidiary some years later.

  • Part C asks i) explanation of how consideration in the form of shares in acquisition and; ii) Share-based expense and a discussion of the vesting conditions.

 

Generally, Question 1 was well answered with well-argued points though area for improvement is found for explanation of impairment loss and vesting conditions.

 

2 parts in Question 2 while all parts were very well answered. The first part requires a discussion of three issues and their impact upon gearing. These issues included the treatment of a cash advance, the issuing of preference shares and the recording of a deferred tax asset. Second part is about discussion of ethical issues including an intimidation threat, an advocacy threat compromising objectivity, and reporting bias led by pressures of breaching debt covenant and overdraft limits.

 

Question 3 was not generally well answered. It is divided into three parts.  The first part related to income recognition from selling a licence in exchange for shares in a new start-up company and the royalties in future. Second part was about the investment contributions in a joint venture in the form of own intellectual property, cryptocurrency and a building. The final part related to a pension plan curtailment and the implications of IAS 19.

 

The final part about IAS 19 was the least well-answered.

 

Question 4 is divided into two parts and focus on accounting principles.  Part a required a discussion of why a reporting entity may choose a particular accounting policy where IFRS allows a choice, and the impact of faithful representation and comparability on the choice. Part b required i) a discussion on the usefulness of ROE and its components, and ii) a discussion of the impact of the accounting transactions on ROE and calculation of ROE.

 

Question 4 was well answered though some answers didn’t provide clear description of the components in ROE.

 

Detailed examiner’s report can be found:

https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/SBR/sbr-examreport-s19.pdf

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ACCA AFM (was P4) – Stable performance

Advanced Financial Management (AFM) pass rate is on the top among all optional papers in Strategic Professional module.  Even it drops from 38% in June 2019 attempt to 36% in September 2019 attempt, it is still well performed in optional papers.

This exam is in two sections. Section A consisted of a 50-mark compulsory question. Section B consisted of two compulsory questions of 25 marks each. All three questions in this examination contained a mixture of computational and discursive elements.

The main reasons for less well performance are –

  • Lack of detailed knowledge

  • Poor time management

  • Restating the materials in question

  • Failing to respond fully to the requirements

  • Poorly structured computational answers

  • Not adopting balanced approach in answering questions

Question 1 is a 50-mark compulsory question on evaluating and justifying the choice between two potential investment projects that a company wants to undertake.  Four parts are required as follows:

  a) Discuss why adjusted present value (APV) method is preferred rather than NPV method;

  b) Estimate the minimum amount of borrowing and estimate two projects’ APV and their duration;

  c) Discuss why a company exposed to economic risk and how it may be managed;

  d) Discuss how the risks categories may be managed.

Part c is poorly attempted while part a and d not well answered. Part b was well answered. Common problems found, for example, many were unclear what economic risk is, misconception in APV and not clear why APV is preferred to NPV, mixed up of the TARA model.

Question 2 is divided into three parts which are about dividend policy and the governance and ethical issues associated with dividend and remuneration policies. 

  • Part a asked to forecast a company’s dividend capacity.

  • Part b required to discuss with supporting calculations, the viability and financial impact of a company seeking to maintain its current dividend policy.

  • Part c asked to discuss the governance and ethical issues associated with a company’s dividend and remuneration policies.

 

Two areas are found difficult to students: 1) Unable to calculate ratios and trends that are associated with the company’s dividend policy; 2) Discussion about ethical issues was generally unsatisfactory.

Question 3 is divided into three parts which is relevant to synergies, mergers and acquisitions and the likely reaction of shareholders to cash and share-for-share offers.

Requirements for each part are –

  a) Discuss possible sources of financial synergy, why synergies may be overestimated and steps that a company may take to prevent it happening;

  b) Working a suitable share-for-share exchange offer and to calculate the impact of cash and the share-for-share exchange offer on the acquirer and target shareholders’ wealth;

  c) Discuss the likely reaction of the acquirer and target shareholders to the cash and share-for-share offers.

 

The answers to Part b were generally poor with not applying PE ratio valuation model correctly so that the impact of cash offer and share-for-share offer on shareholder wealth cannot be determined.

 

Detailed examiner’s report can be found:

https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/p4/examinersreports/afm-examreport-s19.pdf

London City
ACCA APM (was P5) – Improvement needed

In September 2019 attempt, Advanced Performance Management (APM) pass rate maintains at 31% which is the lowest among all optional papers in September 2019 session. 

Since September 2018 attempt, there have been no choice of questions in APM and the examiner found a number of students may have been caught out by this, having not prepared to answer questions across the whole syllabus.

 

In addition, some students showed MA or PM approach in attempting APM while they can only get very limited scores that cannot pass it.

 

There are three APM exam tips suggested by examiner, which are –

  1. Grasp all basic knowledge. At this diet, a lack of knowledge on value chain analysis and on risk and uncertainty;

  2. Professional-level answer will go beyond the mere repetition of how a technique works and focus on specific environment;

  3. Capable of analyzing and evaluating the whole situation in the scenario using their technical knowledge.

 

Question 1 required candidates to consider issues of performance reporting, measurement and management at a world-leading, listed manufacturer of production machinery. Overall, this question is fairly done well.

 

The parts are done well by many students are –

  • Evaluation of performance report of the company;

  • Calculation of economic-value added;

  • Describe and explain performance measurement at three different levels which are strategic, tactical and operational;

 

There were two weaker performed areas in Question 1. First is the benefits of replacing ROCE by EVA. Next, it’s the purpose of the value chain analysis and how it addresses the critical areas identified.

Question 2 dealt with issues around illustrative data set and balanced scorecard. Surprisingly, it was poorly done, particularly the part about balanced scorecard.

 

Part (a) of the question asked for an assessment of the difficulties in using and interpreting an illustrative data set of customer satisfaction data at the company which was fairly well done.

 

However, it’s not the same as part b. This part required advising the problems of implementing and using the
balanced scorecard (BSC) approach at the company.

 

Many answers did not focus on the actual requirement.

Question 3 examined the issues around risk and uncertainty in decision-making at a manufacturing of heavy steel items.

 

It is divided into three parts while part a was reasonably done. This part required an assessment for a venture capital investor of the given performance measures in relation to three key stakeholder groups.

 

Given you master the basic knowledge of the methods, part b was easily done well as it required an evaluation of which price the board would choose for new product based on attitude to risk.

 

The weakest one is part c which required an evaluation of the appropriateness of the numerical technique used.

 

Detailed examiner’s report can be found:

https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/p5/examinersreports/apm-examreport-s19.pdf

Bright Idea
ACCA AAA (was P7) – Improved significantly

ACCA AAA September 2019 pass rate is 36%, the highest in recent five attempts.

As pointed out by ACCA, the association has enhanced its support for this and other exams in strategic professional in order to improve the pass rate.

 

The exam is in two sections; Section A consisted of a 50-mark question, and Section B which consisted of two questions of 25-marks each.  All questions are compulsory.

 

In general, Question 1 is about evaluating risk at the planning stage of the audit alongside audit procedures. Question 2 focuses on completion and reporting. Question 3 covers acceptance of other assignments, ethics and procedures to be performed.

 

I always consider AAA is the most challenging paper in ACCA professional exam. The knowledge demanded is from Audit & Assurance (AA) to Strategic Business Reporting (SBR).

 

The majority of marks derive from the application and understanding of that knowledge rather than the knowledge itself.

In other words, you are required to answer the questions by addressing the scenario presented to pass.

 

To better prepare for the exam, you are not only studying text books and past exams but also need to read through a series of technical and exam articles on ACCA website.

 

Examiner highlights the most common weaknesses in AAA which should be studied well by future candidates taking this exam –

  • Lack of basic double entry skills, such as confusing assets and liabilities or assuming that if assets are overstated profit must be understated;

  • Lack of underlying knowledge of financial reporting;

  • Unable to make an appropriate materially judgement;

  • Failure to understand the impact of issues on the auditor’s report.

Question 1 is a 50-mark question on the planning stage of the audit for an existing client which consists 4 requirements as follows:

  a) Describe audit risks arising in relation to group audit;

  b) Plan the audit of a disposal;

  c) Audit procedures regarding a government grant and the classification of an investment in a joint venture;

  d) Apply ethics requirement to the scenario.

Generally, the first three parts were well answered and many students were weak on the 10-mark ethics question. Many of them simply listed the names of ethical threats without applying them to the specific scenario. In addition, they show insufficient knowledge of the IESBA.

 

Question 2 is a 25-mark question set at the completion stage of an audit and proved difficult for many students. It consists 2 parts which are –

a) Analyse the matters (materiality, accounting treatment and potential errors) on three property related issues which are sale and leaseback, an investment property and the reversal of an impairment;

b) The effect of misstatements in investment property and the reversal of the impairment on the auditor’s report.

 

Common problems are:

  • Very few students appeared to understand the concept of control underpinning the sale and leaseback;

  • Incorrectly assessed the significance of misstatement by reference to the entire asset value rather than the error amount;

  • Not well understand the concept of materiality so that unable to apply it.

 

Question 3 is a 25-mark question on acceptance of other non-audit assignments. It is divided into three parts which are –

  1. Acceptance criteria for an investigate forensic appointment in response to a fraud at a manufacturing company;

  2. Suggest the steps or procedures that could be used to quantify the fraud; and identify and explain the deficiencies in controls that allowed the fraud to occur and recommend improvements;

  3. Discussion of factors making fraud hard to identify.

 

Many students score good marks in this question except some answers to steps used to quantify the fraud were not applying to the scenario.

Detailed examiner’s report can be found:

https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/p7/examinersreports/aaa-examreport-s19.pdf

Conclusion

Generally, September 2019 session pass rates in many papers are better than prior attempts, in particular the Strategic Professional level such as SBR, SBL and AAA.

If you check ACCA published articles on those papers in Strategic Professional level, you would find the association now organized the articles and materials better in order to help you to pass the exam.

 

We do hope that the pass rates for those subjects can be improved gradually.

 

Given the focus in Strategic Professional Module is to apply your knowledge (both in this module or the basic knowledge from Applied Skills Module), you are suggested to better plan your schedule to take exam right after what you did in prior module.

 

It helps to improve your chance to pass. 

 

In Applied Skills Module, ACCA PM (Performance Management) and AA (Audit & Assurance) are still two challenging papers for pass. 

 

It is suggested to have an understanding of the relation between each papers so that you can prepare better in your next exam. For example, what are the required basic knowledge assumed before taking ACCA PM?  Link: ACCA Qualification: Guides in planning your exam to qualify faster!

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