ACCA Strategic Business Leader (ACCA SBL) paper was launched in September 2018 to replace P1, Governance, Risk and Ethics and P3, Business Analysis.
The exam duration is now 3 hours ad 15 minutes, which was 4 hours before June 2023.
In short, ACCA SBL has 10 areas which are –
A. Leadership
B. Governance
C. Strategy
D. Risk
E. Technology and data analytics
F. Organisational control and audit
G. Finance in planning and decision making
H. Enabling success and change management
I. Professional skills
J. Other employability, and digital skills
Area I, Professional skills, is addressed in the ethics and professional skills module which will not be covered here.
ACCA exam team suggests more on using commercial judgement as to which may apply and understand how those knowledge may be used in the real business situations.
However, an emphasis on more practical and application of knowledge in the case based exam.
Apart from new knowledge, ACCA exam team suggests students to bring forward the knowledge from the Applied Knowledge and Applied Skills examinations.
Don’t worry on all detailed calculations or technique required to do at both Applied Knowledge and Applied Skills examinations, they are not tested in ACCA SBL.
But you need to know how to apply those knowledge in the cases presented in SBL exam.
In this article, I am glad to share with you what you need to bring forward from -
BT (Business and Technology, or F1)
PM (Performance Management, or F5)
FR (Financial Reporting, or F7)
AA (Audit and Assurance, or F8)
FM (Financial Management, or F9)
and with reference to ACCA SBL Specimen examinations, that help you to familiarize with the exam content and style quickly.
We find our FOUR areas are important from the subjects above–
Leadership
Risk
Financial in planning and decision making
Organisational control and audit
Leadership
In ACCA SBL, Leadership covers 3 topics –
Qualities of leadership
Leadership and organisational culture
Professionalism, ethical codes and the public interest
In addition to the content in ACCA SBL syllabus, you are advised to bring forward what you learnt in BT (Business and Technology, F1) for this section.
1 of sections in BT covers qualities of leadership including
Leadership, management and supervision
Recruitment and selection of employees
Individual and group behaviour in business organisations
Team formation, development and management
Motivating individuals and groups
Learning and training at work
Review and appraisal of individual performance
You no need to know every theories in BT, but you have to know how to apply the knowledge.
For example, if you are asked to design a reward scheme, as a business leader, you need to ensure the scheme is fair and it can motivate both individuals and groups to achieve better performance.
In ACCA SBL Specimen 2 examination, Q3b asks about talent management and how to ensure high performing people are developed.
Acknowledgement: Extract from ACCA SBL exhibit, for explanation only.
The knowledge can be found in BT (was F1).
Risk
It is a specific area under ACCA SBL syllabus.
2 topics are included in this area –
Identification, assessment and measurement of risk
Managing, monitoring and mitigating risk
Fundamental concepts of these topics have already been appeared in AA (Audit & Assurance, F8) and FM (Financial Management, F9).
Assessing audit risk and materiality in an entity and its environment is one of areas under AA.
Relevant questions in SBL may ask students a business leader needs to decide how risks should be managed, whether the risks should be accepted (not material) or transferred, avoided or reduced.
In addition to audit risk, financial risk are mentioned in FM, particularly from Section G, Risk Management.
An example is any material risk come from fluctuation of commodity prices, foreign exchange rate movements or interest rate changes to company financials.
From the published Specimen 1 Examinations, a question demonstrates how this knowledge to help you answering question.
Q2a in Specimen 1 Examination –
Acknowledgement: Extract from ACCA SBL exhibit, for explanation only.
In the question, background information shows that DCS Company is highly geared and its main markets currency is possibly devalued.
Financial risk is 1 of the main risks to be identified, while it is from currency devaluation and high gearing ratio.
With possible currency devaluation, DCS Company can reduce the risk by using foreign currency hedging instruments.
To eliminate the risk from high gearing ratio, the company can consider converting some of the debt into equity or issuing more equities.
Finance in planning and decision making
Section G of ACCA SBL syllabus is Finance in planning and decision-making. The following topics are included –
Finance function
Financial analysis and decision-making techniques
Cost and management accounting
Basic knowledge from PM (Performance Management) and FM (Financial Management) are crucial to develop here to solve the case questions.
You are suggested to bring forward the core knowledge in PM, such as break-even and cost volume profit (CVP) relationships.
In addition, time value of money, investment appraisal and probabilities and expected values from FM are also topics to be in SBL exam.
Q2b in Specimen 1 Examination asks –
Acknowledgement: Extract from ACCA SBL exhibit, for explanation only.
From the exhibit provided, only the payback is calculated and no NPV was performed.
Good answers should state clear that time value of money need to be considered and NPV should be done to show which option is preferred in Q2b (i).
In addition, good answers should also mention the NPV decision rule to support the arguments which of the two strategies should implement in Q2b (ii).
Discussion of finance in planning and decision-making cannot be completed without looking at financial ratios.
You can refer to the following topics in FR, Financial Reporting, on understanding of how to interpret financial reports as well as financial ratios.
C2 Calculation and interpretation of accounting ratios and trends to address users’ and stakeholders’ needs
C4 Specialised, not-for-profit and public sector entities
From Specimen 1 Examination Q1a (ii), it asks for an evaluation of company’s overall performance with reference to financial and non-financial information provided.
Acknowledgement: Extract from ACCA SBL exhibit, for explanation only.
It is expected to have financial ratios, such as gross margin ratio, net profit margin and interest cover ratio, to support the arguments.
Organisational control and audit
Section F of ACCA SBL is about control and audit. 3 topics are under this Section –
Management and internal control systems
Audit and compliance
Internal control and management reporting
Some of the contents in these topics are appeared in BT, Business and Technology, and AA, Audit and Assurance.
Section C of F1 is Accounting and Reporting Systems, Controls and Compliance. There are 7 topics under this Section in which I would like to highlight which are considered most relevant to ACCA SBL syllabus –
Accounting and finance functions within business organisations
Principles of law and regulation governing accounting and auditing
Financial systems, procedures and related IT applications
Internal controls, authorisation, security of data and compliance within business
An example is business leaders require to understand that the business can be under threat from dishonesty and fraud. You are required to identify weaknesses in internal controls, using skepticism, and using your commercial acumen to suggest solutions to prevent fraud and error to improve efficiency.
AA is the foundation on Audit and compliance in Section of F of ACCA SBL.
Many case situations will involve businesses that have problems in this area.
In Specimen 2 Examination, the company is suffering from serious ticket fraud. Q2b asks identification and evaluation of internal control weaknesses, with justification of evidence.
Acknowledgement: Extract from ACCA SBL exhibit, for explanation only.
Quality answers are not only identifying internal control weaknesses but also evaluating each of them with evidence in the case.
Mapping of key syllabus areas
There are more other areas assumed you could bring forward the basic principles and main learning gained at the previous levels for ACCA SBL.
For example, governance in ACCA SBL syllabus include agency, stakeholder analysis and social responsibility, reporting to stakeholders, governance scope and approaches, the board of directors and public sector governance.
Strategy is another syllabus area that previous level papers are relevant to this.
BT provides background knowledge of various business structures and their purpose.
FM considers that decision at different levels within an organization.
Conclusion
ACCA SBL has its own syllabus which should be your first priority to focus on during study.
Applied Knowledge and Applied Skills examinations knowledge are assumed to bring forward into this exam.
In our demonstration, it is easily noted you are not required to calculate or work through a technique in a way that you may have been required to do at previous level exams.
But, you are expected to be aware of those concepts and knowledge and when you could apply to help analyse, evaluate and support your answers required in SBL exam.
I strongly recommend you to revisit previous level papers for the following four key areas –
Leadership (BT)
Risk (AA & FM)
Financial in planning and decision making (PM, FR & FM)
Organisational control and audit (BT & AA)
As this paper is case based with stress on more practical, applying commercial judgement and acumen in various business situations, you are expected to decide which models, theories or calculation techniques is the best to apply in the question.
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