Updated: Aug 19, 2019
ACCA published December 2018 pass rates for each paper.
First of all, congratulate to 5,470 ACCA students passed their final exam and become ACCA affiliates.
Two observations I would like to highlight before sharing each individual paper –
Number of students taken SBL and SBR exams are more than double those of the September session;
An increase in the uptake of on demand ACCA and Foundations exams shows the demand for ACCA qualification increase
These two news are really appreciating as it shows the professional qualification are more recognized and welcome by more new joiners.
Link to announcement:
In addition to more people joining the professional exams, it is also encouraging to see the overall pass rates are similar to or better than September session.
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 March 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 papers, such as FR and TX, show their stable performance by more than half of students passed December exam.
Lower pass rates papers, such as PM and AA, still maintain at the end of the queue by less than 40% of students passing them in this attempt.
I am a bit surprised that FM pass rate drops to 43% while I will try to find out why it happens in December 2018 session in the discussion below.
ACCA AA – Most challenging paper in Applied Skills Module
38% of students pass ACCA AA in December 2018 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 *
Corporate governance *
Substantive testing including analytical procedures, revenue, bank and cash and trade
Subsequent events *
Audit finalization and the final review *; and
Auditor’s reports *
*Areas are seen in September 2018 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, importance of disclosure and auditor’s reports are highlighted.
In Section B, five areas are seen which are –
Audit framework and regulation
Planning and risk assessment
Internal control (Mix)
Audit evidence (Disappointing)
Review and reporting (Disappointing)
In Audit framework and regulation, you are expected to have a scenario-based ethics or corporate governance questions. ‘Hurling Co’ from March/June 2017 is 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.
Audit risks and response questions can also be linked with a factual knowledge question.
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 December 2018 was mixed. The following areas are poorly performed:
Were not able to identify key controls, often identifying the existence of a control where in fact there was a deficiency.
Did not clearly explain the implication of deficiencies identified.
Past paper examples are Comet Publishing Co from September/December 2017 and Raspberry Co from March/June 2018.
Audit evidence requires you to describe relevant audit procedures for a particular class of transactions or event. Key issues are:
Many students are unable to tailor their knowledge of substantive testing to any area of the financial statements; examples can be referred to ‘Dashing & Co’ from September/December 2017;
Well understand substantive procedures while you can read ‘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.
The performance is disappointing while you are expected to:
State clearly your answers with the opinion to be issued and if the opinion is to be modified, the type of modified opinion which is appropriate;
Explain the effect of the item being incorrectly recorded, for example, if this results in assets/liabilities/profit being over/understated
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-d18.pdf
ACCA PM – Improvement in overall performance
ACCA PM pass rate in December is 39%, lower than September 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.
We find some areas seen in Section C pulled down its pass rates in December session.
In December 2018, 2 areas in Section A are found difficult to a lot of students, they are –
The calculation of financial performance indicators (FPI) for liquidity.
The identification of direct data capture costs of management accounting information.
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 December 2018 exam, the following topics are seen in Section B –
Cost volume profit analysis
Activity based costing *
Decision making under risk and uncertainty *
*Topics were found in ACCA PM September 2018 exam.
For Section C, five areas are presented in the questions –
Pricing: Many cannot calculate marginal cost and only know basic pricing strategies. Past paper TR Co from September/December 2017 is a good example;
Transfer pricing: Weak performed and not a very popular topic to students. You can refer to PG Co in March/June 2018.
Performance measurement in a private sector context, a public sector context and a divisional structure context: Performance is fair.
Rolling budgets: It is common to see lack of understanding of how rolling budgets work. You can check an example from December 2016 Static Co.
Flexed budgets: It is the core knowledge from MA but many candidates struggled in this question.
Detailed examiner’s report can be found: https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f5/examinersreports/pm-examreport-d18.pdf
ACCA FM (was F9) – Slightly disappointing
ACCA FM December 2018 pass rate is 43%, a bit lower than my expectation, which is at lower end range as compared to previous sittings.
Students are usually doing better in those questions tested regularly such as performing the discounted cash flow in relation to an investment project, but less able to demonstrate knowledge in others such as ‘Specific investment decisions’ and ‘Finance for small and medium sized entities (SMEs)’.
It happens in Section C which explains why pass rate is at the lower range.
Two difficult questions are highlighted in Section A which one of them is numerical and tests valuation of debt.
Another question is testing knowledge of value for money measures.
Section B consists of 3 scenarios and 5 objective questions for each scenario.
The following 4 areas are highlighted in the report:
Working capital – Difficulty in profitability and liquidity effect after changing working capital funding policy;
Business finance – Some issues in questions related to assumptions of dividend growth model;
Business valuation – Price earnings ratio questions caused difficulties;
Risk management – Not strong on question about feature derivatives, e.g. characteristics of futures and options.
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, account receivables and accounts payable and cash (Reference: Oscar Co September/December 2018, Pangli Co March/June 2017)
Determining working capital needs and funding strategies
Investment appraisal techniques (Reference: Pelta Co September/December 2017)
Allowing for inflation and taxation in DCF
Adjusting for risk and uncertainty in investment appraisal (Reference: Vyxyn Co March/June 2017)
Specific investment decisions (Reference: Melanie Co September/December 2018)
Sources of and raising business finance
Sources of finance and their relative costs
Finance for small and medium sized entities (SMEs)
Adjusting for risk and uncertainty in investment appraisal, specific investment decisions and sources of finance and their relative costs are found challenging to many students.
Adjusting for risk and uncertainty in investment appraisal is a difficult area to students. Responses were often too brief and not many students explain the difference between risk and uncertainty.
For specific investment decisions, the major problem is on leasing versus borrowing to purchase question and two common problems are –
The use of the WACC to discount cash flows instead of the project specific cost of capital presented in the question;
The inclusion of interest payments within the computation of net cash flow.
The common problem of sources of finance and their relative costs question is many incorrect calculation of contribution in finding operational gearing.
Detailed examiner’s report can be found:
ACCA FR (was F7) – More than half of students passed!
ACCA FR pass rate kept at 51% which means more than half of students attempting the exam passed!
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 December 2018 are shared –
Test candidates on the fair value consolidation adjustments required;
Test whether candidates can calculate total charge to the statement of profit or loss in respect of the right-to-use asset.
Section B consists of three scenarios and 5 objective questions each are based.
General speaking, the test on certain topic is in some depth as compared to Section A.
In December 2018, the following topics were weak:
Leases – IFRS 16
Research and development
Section C questions are mainly drawn from the areas of:
Preparation single entity financial statements
Analysis of consolidated financial statements
Preparation of consolidated financial statements
Analysis of single entity financial statements
Preparation single entity financial statements is asking students to produce financial statements from a trial balance incorporating a series of adjustments.
The most technical areas found to be challenging to students are 1) entries relating to a long-term contract; and 2) leases – IFRS 16.
Examiner suggests two past paper questions in ACCA Financial Reporting are good for reference: Duggan Co from September/December 2018, and, Haveford Co from March/June 2018.
Surprisingly, many students did not attempt all questions in Analysis of consolidated financial statements in December 2018. Ratio calculations are generally good and a lot of marks gained but more answers produced without detailed workings which is a worrying trend.
There are two issues needed to be address on this area 1) Calculation of gain/loss on disposal; and 2) Many students produce very limited or zero commentary or only generic statements which score very few marks.
In Preparation of consolidated financial statements, the following areas are needed to take note –
Not many students are able to correctly deal with the fair value adjustment of a contingent liability;
Forgetting to unwind the discount in relation to deferred consideration payable for a subsidiary;
Failing to deal with a government grant correctly;
A surprising number of candidates used proportionate consolidation in relation to the subsidiary.
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 single entity financial statements. In December 2018, students generally performed well especially in preparing ratios calculations and analysis of cash flow information.
But the discussion around profitability and interest cover was often of a lower quality.
Two past paper questions are recommended for reference: Mowair Co from September/December 2017 and Funject Co from March/June 2017.
Detailed examiner’s report can be found:
December 2018 session is the second exam on new ACCA professional qualification exam, especially in strategic professional module.
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?
In Strategic Professional Module, I am glad to see the pass rate of SBL is improving. However, I also worry SBR which has no significant improvement.
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.
Our relational diagram helps you a lot in planning your steps to be qualified as ACCA member/affiliate.
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