ACCA Pass Rates September 2018 Exam: Part 1 Tips (Focus on PM, FR, AA & FM)

Updated: Aug 19, 2019

ACCA published September 2018 exam pass rates for each paper.

It is great to have 3,668 students are becoming ACCA affiliates after ACCA September 2018 exam.

Congratulations to all of them.

Link to announcement:

September 2018 exam unveils the new chapter of ACCA professional exam qualification. It consists of 3 major changes in Strategic Professional –

  • A new paper, Strategic Business Leader, introduced to replace two former professional module papers, P1 Governance, Risk and Ethics and P3 Business Analysis;

  • A new paper, Strategic Business Reporting, replaced P2 Corporate Reporting while the question design and requirements are changed even the syllabus doesn’t do;

  • All questions in all strategic professional papers are compulsory.

September 2018 pass rates for Applied Knowledge and Applied Skills module exam, the performance is similar to those papers in the past.

But for Strategic Professional exam, it is not very encouraging as we find the pass rates are a bit lower than the papers at similar content before (such as P2, P4 and P7).

ACCA Pass Rates September 2018

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 2018 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

ACCA Pass Rates (PM, TX, FR, AA, FM) September 2018

In terms of syllabus and exam format, the papers in Applied Skills Module (PM, TX, FR, AA and FM) have no significant change as compared to previous papers.

Therefore, the pass rates for all those papers maintain more or less the same as before.

PM (Performance Management, was F5) pass rate shows a significant improvement which is a good news to who will join the exam.

However, AA (Audit & Assurance, was F8) low pass rate is a sign for many of students joining the exam are struggling.

ACCA AA – Most challenging paper in Applied Skills Module

37% of students pass ACCA AA in September 2018 attempt which is the lowest among recent five sittings.

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 testing on tangible and intangible non-current assets and investments

  • Subsequent events

  • Audit finalization and the final review *; and

  • Auditor’s reports *

*Areas are seen in June 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, external auditor objectives and the difference between test of control and substantive procedures are highlighted.

In Section B, five areas are seen which are –

  • Audit framework and regulation

  • Planning and risk assessment

  • Internal control (Disappointing)

  • Audit evidence (Very disappointing)

  • Review and reporting (Disappointing)

In September 2018, Audit evidence is the worst done among all areas while internal control and review and reporting are disappointing areas.

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.

Examiner expects you can identify and explain 6 to 8 risks and exposures.

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 is disappointing while the following are areas are poorly performed in September 2018:

  • Lack of knowledge in internal controls. ‘Heraklion Co’ from September 2016 and ‘Raspberry Co’ from March / June 2018 are recommended for you to know what knowledge to master;

  • Not able to identify control deficiencies around cash cycle and payroll cycle from the scenario;

  • Not able to explain clearly the implication of deficiency. ‘Equestrian Co’ from March/June 2017 is suggested in this area;

  • Too brief in describing tests of controls that an auditor should perform.

Audit evidence is the most challenging area in ACCA Audit & Assurance exam and the following areas are highlighted in September 2018:

  • Many students are unable to apply their knowledge in substantive procedures to questions;

  • Confusion between substantive procedures and tests of controls;

  • Tests provided did not test specific financial statement assertions. Good example is ‘Dashing & Co’ from September/December 2017;

  • Not well understand on substantive procedures while you can read ‘Gooseberry Co’ from March/June 2018 questions.

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

The question is usually scenario based and the performance in September 2018 is disappointing in comparison to previous sessions. The following areas are highlighted:

  • Discuss an accounting issue;

  • Assess whether the error is material;

  • Consider the type of modification;

  • Discuss the impact on the auditor’s report.

To understand more on auditor report and ISAs, “Airsoft Co” from March / June 2017 is a good example.

Detailed examiner’s report can be found:

ACCA PM – Improvement in overall performance

ACCA PM pass rate in September is 43% which is significantly improved from F5 in June 2018!

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.

It seems Section C performance is improved so the overall pass rate improved as well.

In September 2018, 2 areas in Section A are found difficult to a lot of students, they are –

  • Calculation of a division’s return on investment;

  • Limitations of using externally generated 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 September 2018 exam, the following topics are seen in Section B –

  • Decision making under uncertainty

  • Target costing

  • Activity based costing

  • Learning curves

  • Pricing *

  • Rolling budget *

*Topics were found in ACCA F5 June 2018 exam.

For Section C, four areas are presented in the questions and their common problems in June 2018 session are –

  • Variances: Performance are strong.

  • Performance measurement: Requiring a discussion on business performance while many students do not address the requirement fully.

  • CVP analysis: Candidates can pick up easy calculation marks, e.g. Breakeven Revenue, but lack of detailed discussions and conceptual framework.

  • Limiting factor analysis: Performance is good.

You can refer the following published paper questions to have better preparation of ACCA PM exam in future –

  • Performance measurement – People’s Bank from March/June 2017.

Detailed examiner’s report can be found:

ACCA FM (was F9) – Stable performance

ACCA FM September 2018 pass rate is 47% which is at similar level as previous sittings.

Generally, numeric questions are usually scored higher marks while discursive questions are still challenging to some exam sitters.

In this attempt, examiner finds students well prepared in calculating nominal net present value of an investment project but less prepared in ‘Adjusting for risk and uncertainty in investment appraisal’ and ‘Specific investment decisions’.

Two difficult questions are highlighted in Section A which one of them is numerical and tests understanding of sensitivity analysis.

Another question is testing knowledge of strong form market efficiency, which is an area which seems to cause difficulty for a number of students.

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

The following 4 areas are highlighted in the report:

i) Working capital – Difficulty in questions about managing foreign accounts receivable and how to reduce risk associated with this;

ii) Business finance – Some issues in questions related to dividend policy;

iii) Business valuation – Price earnings ratio questions caused difficulties;

iv) Risk management – Not strong on question about feature derivatives, e.g. how an interest collar would be constructed. In addition, foreign currency exchange rates terms are not fully understood.

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, account receivables and accounts payable and cash

  • Determining working capital needs and funding strategies

  • Investment appraisal techniques

  • Allowing for inflation and taxation in DCF

  • Adjusting for risk and uncertainty in investment appraisal (Reference: Vyxyn Co March/June 2017)

  • Specific investment decisions

  • Sources of finance and their relative costs

  • Estimating the cost of capital (Reference: Tin Co March/June 2018; KQK Co September/December 2015)

Working capital, investment appraisal including adjusting for risk and uncertainty, specific investment decisions and estimating cost of capital are found a bit challenging to students.

In working capital question, it is noted many students are lack of knowledge in relation to working capital investment policies. Many answers showed they are confused working capital investment policy with working capital financing policy.

The problem in investment appraisal question in September 2018 is the discussion of the relative merits of NPV and IRR. Very few answers adopt a comparative approach so not discussing the superiority of NPV over IRR.

Adjusting for risk and uncertainty in investment appraisal is a difficult area to students. Responses were often too brief with only few words or bullet points. Not many students can clearly compare and contrast risk and uncertainty.

For specific investment decisions, examiner found 4 major weaknesses in September 2018 exam –

  • Wrongly included interest payments within computation of net cash flow;

  • Whether leasing or purchasing option should be chosen, failed to recognize factors to consider;

  • Failure to know how to derive at an EAC (Equivalent Annual Cost);

  • Failed to recognize capital rationing with a scenario highlighting a limit in terms of funds available.

Improvement is found in the discussion of estimating of cost of capital, including –

  • Why a project specific cost of equity needed to be used;

  • The relationship between systematic and unsystematic risk;

  • Assumptions made by CAPM.

Detailed examiner’s report can be found:

ACCA FR (was F7) – More than half of students passed!

ACCA FR pass rate surged to 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 September 2018 are shared –

  • Test candidates on unrealized profit in inventory of intra-group trading;

  • Test whether candidates can apply the recognition criteria for assets and liabilities.

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 September 2018, the following topics were weak:

  • Reversal of the impairment of an asset

  • Earnings per share

  • Financial instruments

The reversal of impairment of an asset is relatively new addition to the syllabus while the other two areas have been tested for many years. You are advised to pay more attention on them.

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) recording provisions correctly; 2) deferred tax where the temporary difference must be calculated; and 3) calculation of earnings per share (EPS) with reference to IAS 33.

Examiner suggests two past paper questions in ACCA F7 are good for reference: Haveford Co from March/June 2018, and, Triage Co from September 2016.

Good performance in Analysis of consolidated financial statements in September 2018 is found. Ratio calculations are generally good and a lot of marks gained.

There are two issues needed to be address on this area 1) Only vague and ‘textbook’ answers are provided for the ratios calculated; and 2) Many students are still not summarizing their thoughts in a well explained conclusion.

In Preparation of consolidated financial statements, goodwill calculation is well performed but the following areas are needed to take note –

  • Failure to discount the deferred consideration to present value when calculating cost of investment;

  • Contingent liability was often omitted or was added in as an adjustment to net assets;

  • Identify retained earnings at the acquisition date correctly often missing the current year profit up to the date of acquisition;

  • In convertible loan question, many failed to deduct the interest that had already been included within finance costs.

Examiner suggests three past paper questions in ACCA F7 are 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 2018, students generally performed well especially in preparing non-controlling interests, group retained earnings calculations and ratio calculations.

But two issues are important to address for those who would like to take the exam in future:

  • Most common mistake in disposal of company was found that the current year profit up to the disposal date when determining net assets was omitted;

  • Many students wrote very little on analysis part.

Two past paper questions are recommended for reference: Perkins Group from March/June 2018 and Gregory Co from September 2016.

Detailed examiner’s report can be found:


September 2018 session is a new chapter in 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 above my initial expectation, given it’s totally new with the longest syllabus among all ACCA papers.

However, I also worry SBR and other optional papers on their new format, especially all questions are compulsory to be answered.

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.

If you have any questions or comments, just send me email at and I will answer you shortly.

For exam tips on Strategic Professional papers, please click HERE.

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