Updated: Apr 21, 2020
ACCA December 2019 results and pass rates for all papers are published!
The focus in this attempt is on computer based exam and strategic CBE. Strong word processing and spreadsheet skills are proved critical in passing the exams.
ACCA executive director strategy and development said: ‘Examiners note that pass rates are very strong where students have developed the word processing and spreadsheet skills they already or will use in the workplace and apply these to their exams, thus integrating the world of work and exams.’
Starting from March 2020, ACCA will be offering its Strategic Professional as CBEs at specific centres in the UK, Ireland and Czech Republic and then wholly in those countries from June 2020.
Link to announcement:
In addition, ACCA will launch Strategic Professional CBE in 2020. Just check our analysis of the new Strategic Professional CBE for your benefits.
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 2020 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, FM, is a bit disappointed in December session while both TX and FR show strong pass rate in December exam session!
Lower pass rates papers, such as PM and AA, still maintain at the end of the queue and less than 40% of students passing them in this attempt.
ACCA AA – Most challenging paper in Applied Skills Module
38% of students pass ACCA AA in December 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 –
· Principles of assurance;
· Corporate Governance;
· Substantive procedures * including non-current assets; and
· Audit finalization and review*
*Areas are seen in September 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, knowledge of corporate governance guidelines and knowledge of ISA 570 Going Concern are highlighted.
In Section B, five areas are seen which are –
· Audit framework and regulation
· Planning and risk assessment
· Internal control (Mixed)
· Audit evidence (Disappointing)
· Review and reporting (Mixed)
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 the risks from a scenario and give an auditor’s response to address the risks.
A fundamental factor in planning and assessing the risks of an audit of an entity is an assessment of audit risk, and this remains a highly examinable area.
Four samples are suggested to you to prepare for next exam. If you are looking for scenario-based examples, “Peony Co” from March/June 2019 and “Harlem Co” from September/December 2019 are good on audit risks and responses to practice.
If you are looking for knowledge question on this topic, check “Blackberry Co” from March / June 2018 and “Cupid & Co” from September / December 2017.
Internal control question performance in December 2019 was mixed. However, it’s disappointing a lot of candidates failed to score many marks in knowledge-based questions, for example when asked to describe components of an entity’s internal control system.
The following areas are poorly performed:
· Not able to identify key controls
· Irrelevant controls/deficiencies being given or not clearly explain the implication of the deficiencies
· Able to provide recommendations to address deficiencies but poorly described
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, Camomile Co from September/December 2018 and Amberjack Co from September/December 2019.
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 differences arising in supplier statement reconciliations.
Good examples for reference in this topic are ‘Gooseberry Co’ from March/June 2018, ‘Jasmine Co’ from September/December 2018 and ‘Hyacinth Co’ from March/June 2019 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 mixed. Key areas to note are:
· Few candidates provided an adequate discussion in auditor’s reports questions;
· Some struggled to calculate the materiality of the error.
Questions in this area tend to be scenario based and a good example is ‘Spadefish & Co’ from September/December 2019.
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-d19.pdf
ACCA PM – Pass rate drops below 40%
ACCA PM pass rate in December 2019 is 38%, 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.
In December 2019, 2 areas in Section A are found difficult to a lot of students, they are –
· The calculation of the material yield variance;
· Understanding of information systems.
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 2019 exam, the following topics are seen in Section B –
· Throughput accounting*
· Activity-based costing (ABC)
· Cost volume profit (CVP) analysis
· Rolling budgets
· Learning curves
*Topics were found in ACCA PM September 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. Two common requirements, 1) prepare profit statements for two divisions and also for company as a whole (reference question The Portable Garage Company March/June 2018); 2) Impact on profits if a different transfer price is used. Questions for reference include Q4 May/June 2016, Q2 June 2015 and Q3b June 2014.
· Relevant costing. First of all, the question is very similar to Q3 December 2014 which you can check it. Students performed well in identifying relevant and non-relevant costs, however, it’s not the same for explaining why costs are included or excluded and using financial accounting principle to valuate inventory instead of relevant cost principles.
· Performance measurement ^. Many students cannot score many marks in this typical performance measurement question (Similar to Jungle Co December 2016). Common errors are: 1) Offering movement calculations in absolute $ terms instead of percentages; 2) Incorrect calculation of a percentage; 3) Making general comments without adding any value; 4) Too many calculations for the marks available; 5) Weak discussion on divisional performance measures like ROI and RI.
· Variance analysis. This diet had questions which focused on mix and yield and planning and operational variances. Past questions suggested are Kappa Co September / December 2018, The School Uniform Company in March / June 2017 and Glove Co from June 2016.
· Risk and uncertainty. It is an important area in PM and the requirements is to calculate profit values for a range of outcomes.
^ Topics were found in ACCA PM September 2019 exam.
Detailed examiner’s report can be found: https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f5/examinersreports/pm-examreport-d19.pdf
ACCA FM (was F9) – Slightly worse than before
ACCA FM December 2019 pass rate is 43% which is at the lower end of past 10 sittings.
Two difficult questions are highlighted in Section A which one of them is numerical and tests working capital knowledge.
Another question is testing knowledge of the efficient markets hypothesis.
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 assess whether given reasons why just in time manufacturing would be appropriate in the given scenario;
Business finance – Errors on sources of finance for SMEs, mistakenly use cum dividend share prices in dividend growth model (DGM) and incorrectly calculations of cost of equity with DGM;
Business valuation – Issues on questions related to valuation a company’s equity using discounted cash flows, P/E ratio and impact on share prices under various forms of market efficiency;
Risk management – Not strong on question about feature derivatives, e.g. comparison between futures contracts and forward 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.
Working capital management: The question requires an identification of the objectives of working capital management, discuss the conflict between them, explain and apply relevant accounting ratios on potential overtrading situation, preparing a cash flow forecast, financing of working capital and cash operating cycle.
Many candidates offered liquidity and profitability are two main objectives but not all of them can explain in great details. In addition, cash flow forecasts were prepared with some basic errors which should be avoided as it is a fundamental skill in Financial Management.
Most disappointing part is many answers confused the financing of working capital with other aspects of working capital such as working capital management, working capital policy or working capital objective.
Investment appraisal: It is usually found the calculation part is much better than other parts in this question. Computation of NPV and payback well performed but errors were found in the calculation of return on capital employed (accounting rate of return).
Regarding to NPV calculation, here are errors found in some candidates’ work which should be well aware for future students: 1) Treatment of inflation; 2) Timing of cash flows, such as cash flow relating to taxation; 3) Cash flow relevant to working capital, such as initial working capital, incremental working capital and working capital recovered by end of project; and 4) Differences between real and nominal terms on investment appraisal. Pinks Co from March/June 2019 is a good pas question to practice.
Other areas in investment appraisal tested include calculation of IRR, discuss the relative merits of NPV and IRR (example is Pelta Co from September/December 2017), difference between risk and uncertainty (example is Vyxyn Co part (a) from March/June 2017) and capital rationing (OAP Co from June 2014) were in exam.
Business Finance: There were three requirements highlighted in examiner’s report. 1) Calculation of WACC; 2) Relationship between a company’s average and marginal cost of capital; and 3) Capital structure theories.
The most commonly found problem is many students cannot give a good answer on company’s average and marginal cost of capital. Future students should be aware of it.
Recommended part questions are Corfe Co from March/June 2019 and Tufa Co from September/December 2017.
Detailed examiner’s report can be found:
ACCA FR (was F7) – Stable performance
ACCA FR pass rate was 46% in December attempt. It is within the range from past 10 attempts history.
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 2019 are shared –
· The provision of deferred tax on the revaluation of a non-current asset (IAS 12);
· The concept of control and can recognize when a subsidiary does not meet the definition of held-for-sale.
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 December 2019, the following topics were weak:
· Intangibles, impairment and government grants
· Leases *
· Events after the reporting period
· Financial instruments
· Deferred tax *
*Topics were found in ACCA FR September 2019 exam.
Candidates appeared to struggle with Leases, Events after the reporting period and deferred tax.
Section C questions are mainly drawn from the areas of:
· Preparation of individual company financial statements
· Preparation of consolidated financial statements
· Analysis of individual financial statements
· Analysis of consolidated financial statements
Preparation of individual company financial statements is asking students to prepare Statement of Profit or Loss (SOPL) and Other Comprehensive Income (OCI) using the trial balance (TB) supplied.
Few observations in this attempt need to be addressed for future students, 1) Most common mistake related to a change in use concerning property, moving from PPE to investment property; 2) Revenue adjustments relating to deferring income or contracts which are satisfied over time; 3) Produce a statement of adjusted profit; 4) Earnings per Share (EPS).
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.
In Preparation of consolidated financial statements, the following areas are needed to take note –
Though many candidates performed quite well in this question, there are several issues that future students need to take care of, the first one is about splitting profit between the parent’s shareholders and the non-controlling interests, such as foreign currency adjustments or lease accounting;
Goodwill calculations and share-for-share exchanges are another topic that are not done well; in addition, remember to put narrative/discussion in your answers.
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.
Performance in Analysis of individual company financial statements was mixed. Financial ratio calculations are generally good but the only weakness is answers are sometimes too brief.
There are two issues needed to be address on this area 1) Calculation of Earnings Per Share; 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.
The last part is Analysis of consolidated financial statements. In December 2019, students were required to discuss the inclusion of a subsidiary in the consolidated financial statements, the inclusion of a non-controlling interest, intra-group transactions versus non of these being accounted for in a single entity’s financial statements.
Two common errors were found: 1) Do not use the scenario in analysis or do not show workings; 2) Ignore group elements (such as intra-group trade, shared property arrangement) in the analysis of consolidated financial statements.
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:
Generally, December 2019 session pass rates in many papers are more or less the same as prior attempts.
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!
If you have any questions or comments, just send me email at firstname.lastname@example.org and I will answer you shortly.