Updated: Apr 19, 2020
ACCA June 19 attempt results are just released.
First of all, congratulate to 4,923 ACCA students passed their final exam and become ACCA affiliates.
Link to announcement: https://www.accaglobal.com/hk/en/news/2019/july/Jun_19_results.html
Few observations from this attempt that I would like to highlight –
Significant improvement in SBL pass rate to 51% in June 2019, very closed to P1 and P3 in old syllabus;
SBR pass rate is only 48% and there is still room for improvement;
Two audit papers (AA and AAA) are very challenging to pass, as usual
ACCA will introduce innovative digital desktop CBEs for Strategic Professional exams next year, we will keep you posted for any news coming from the association.
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 September 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, are consistently as prior sessions.
Lower pass rates papers, such as PM and AA, still maintain at the end of the queue and PM is the worst with only 38% of students passing them in this attempt.
ACCA PM – Most challenging paper in Applied Skills Module
ACCA PM pass rate in June 2019 is 38%, lower than March 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 June session.
In June 2019, 2 areas in Section A are found difficult to a lot of students, they are –
The interpretation of linear programming graphs in limiting factor situations (i.e. profit maximization).
The calculation of activity-based costs.
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 June 2019 exam, the following topics are seen in Section B –
Cost-volume-profit analysis *
Activity based costing
Target costing *
Decision making under risk and uncertainty *
*Topics were found in ACCA PM March 2019 exam.
For Section C, six areas are presented in the questions –
Transfer pricing is not popular with candidates. In June 2019, the question required some calculations of transfer prices by different divisions and an optimal transfer price. If you are not familiar with this kind of question, go to read Question Portable Garage Company (PG Co) published in March/June 2018 for practice;
Short-term decisions question is challenging to some students in June 2019. It asks students to identify which costs are relevant when deciding whether it would be better to make a product internally or instead, buy it in from an external supplier. You can check the latest article published by ACCA about relevant costs on this topic.
Variance analysis in this session is about mix and yield variance while it is divided into calculations and discussions. Calculation parts are similar to Question Kappa Co in September/December 2018.
Performance measurement questions ask you to analyse business’s performance from financial and non-financial perspective and provide explanations. The questions can take a variety of different forms, such as balance scorecard, divisional performance measurement and traditional performance measurement. In this session, traditional performance measurement, i.e. discussing financial and non-financial performance, is not performed well. Suggested question to practice is Jungle Co from September 2016.
Budgeting is a hot topic in PM exam and you are required to focus on different budgeting techniques such as incremental, zero-based, rolling, flexed and activity based budgeting.
Detailed examiner’s report can be found: https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f5/examinersreports/pm-examreport-j19.pdf
ACCA AA – Still one of the hardest paper in Applied Skills Module
There are only 39% of students pass ACCA AA in June 2019 attempt which is considered one of most difficult papers in Applied Skills Module.
The paper is different from other Applied Skills Module paper while 70% of the total marks are from written questions.
Here we share with you 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 –
Substantive procedures * including analytical procedures, revenue, expenses, bank and cash and share capital
Written representations *
Auditor’s reports *
*Areas are seen in March 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, corporate governance responsibilities (such as audit committee) and 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 (Mix)
Audit evidence (Disappointing)
Review and reporting (Mix)
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 on practicing the skill of explaining ethical issues and ‘Freesia Co’ from the March/June 2019 is good scenario based question to attempt on corporate governance.
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.
Three samples are suggested to you to prepare for next exam, ‘Peony Co’ from March/June 2019, “Blackberry Co” from March / June 2018 and “Cupid & Co” from September / December 2017.
Internal control question performance in June 2019 was mixed. The following areas are poorly performed:
Unable to correctly identify the deficiency from the scenario, e.g. only stating ‘invoices have a unique number’ but the actual issue was that the numbers are not sequential.
Did not clearly explain the implication of deficiencies identified.
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 ‘Freesia Co’ from March/June 2019.
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 general substantive procedures to specific issues in the question or only concentrate on one type of test; examples can be referred to ‘Dashing & Co’ from September/December 2017 and ‘Hyacinth Co’ from March/June 2019;
Only a generic list of substantive tests known 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 mixed while June 2019 requirements are:
Discuss an accounting issue, assess whether the error is material, consider the type of modification;
Discuss the impact on the auditor’s report.
In addition, there was a question focusing on key audit matters (KAM) which the performance on this was very disappointing.
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-j19.pdf
ACCA FM (was F9) – Fair performance!
ACCA FM March 2019 pass rate is 46% which is on average in the past 10 sittings.
Students are usually doing better in those questions tested regularly such as performing the discounted cash flow appraisal of an investment project, but less prepared to demonstrate knowledge in other areas such as ‘Determining working capital needs and funding strategies” and ‘Estimating the cost of capital’.
Two difficult questions are highlighted in Section A which one of them is numerical and tests money market instruments.
Another question is testing knowledge of working capital.
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 identify the effects on the company of changing the working capital financing policy from aggressive to matching;
Business finance – Issues on portfolio theory and its relationship with capital asset pricing model, e.g. believing that portfolio diversification reduces systematic risk;
Business valuation – Issues on the uses and limitations of valuation models, and identifications what happens under various forms of market efficiency;
Risk management – Not strong on question about feature derivatives, e.g. characteristics of options and futures contracts and struggled the relationships under the four-way equivalence model.
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:
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) *
Specific investment decisions *
Sources of and raising business finance *
Estimating the cost of capital *
*Topics were found in ACCA FM March 2019 exam.
There are three areas that would be addressed here as many candidates performances were weak –
Investment appraisal techniques: Calculations tend to be done well but not in discussion part. It is found many students are not able to discuss the usefulness of an investment appraisal method, discuss the superiority of DCF methods over non-DCF methods and to discuss the relative merits of NPV and IRR.
Sources of and raising business finance: One problem is about the discussion why a company might prefer to lease rather than buy an asset and the comments are very generic that were not backed up by Financial Management knowledge.
Estimating the cost of capital: Unable to calculate correctly the cost of equity using the CAPM by ignoring the need to regear asset beta provided or unable to regear correctly.
Detailed examiner’s report can be found:
ACCA FR (was F7) – Stable performance
ACCA FR pass rate was 50% in June 2019 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 June 2019 are shared –
Test learning outcome B7(f) environmental provisions in FR syllabus;
Test an understanding of the concept of “control” in accordance with IFRS 10 which requires a group to prepare consolidated financial statements.
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 June 2019, the following topics were weak:
Intangible assets and fair value measurement
Non-current assets held for sale
Diluted earnings per share
Contracts that are for goods and services and the allocation of revenue *
*Topics were found in ACCA FR March 2019 exam.
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) Disposal alongside the calculation of depreciation; and 2) Calculations of impairement.
Examiner suggests three past paper questions in ACCA Financial Reporting are good for reference on single entity financial statements preparation: Vernon Co from March/June 2019, Duggan Co from September/December 2018, and, Haveford Co from March/June 2018.
Performance in Analysis of consolidated financial statements was mixed and particular poor where discussion is required. It is found weak candidate performance was apparent when they were required to adjust accounting numbers for consolidated items and then recalculate ratios.
There are two issues needed to be address on this area 1) Some candidates did not show their workings on ratio calculations; 2) Unable to discuss and explain an acquired subsidiary would have different margins.
Good examples on Analysis of consolidated financial statements for practice from past paper are Pirlo Co from March/June 2019, Duke Co from September/December 2018, Perkins from March/June 2018 and Gregory Co from September 2016.
In Preparation of consolidated financial statements, the following areas are needed to take note –
Struggled with interest on financial instruments and unwinding discounts;
Unable to split the total comprehensive income including the OCI;
Weak in discursive elements such as explaining different methods of valuing the non-controlling interest or the principles behind accounting for an associate.
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. Students generally performed well in ratio calculations with many of them scoring maximum marks.
Two common errors were found: 1) Calculation of revenue per employee; 2) Issue of a convertible loan note; 3) Produced vague, general answers or even no commentary to the analysis section.
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:
June 2019 session is the fourth 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? Link: ACCA Qualification: Guides in planning your exam to qualify faster!
If you have any questions or comments, just send me email at email@example.com and I will answer you shortly.