Study Zone

ACCA Teachers' Conference

In yet another PQ magazine exclusive, ACCA examiners outline what they want from exam sitters. So do yourself a favour and read on

F3 Financial Accounting
The F3 examiner Nicola Ventress said that as students have seen three of her papers now, they should have a good idea about what she wants. A review of the papers shows her paper pass rates fell from 67% to 48%, before recovering slightly to 50%. "Preparation and exam technique is an issue," Ventress revealed, and she believes paper 1.1 resits helped push up the first sitting percentage.

Candidates' strengths
– Double entry book-keeping.
– Transactions.
– Preparation of control accounts.
– Non-current asset transactions.
– Recording and valuation of inventory.
– Accounting concepts.

Candidates' weaknesses
– Suspense accounts and errors. Students just don't like them.
– Partnership accounts and statements of cash flows. Both of these key areas were answered badly in all three sittings.
– Intangible assets: only a small part, but again not done very well and overlooked in preparation.
– Provisions: can do basics, but once they start looking at the scenario they have difficulty.
– As a general point, she also felt that application of topics is a continual problem.
So what are the lessons to be learnt? Students must study the breadth of the syllabus and practise exam questions. When it comes to practising an accounts preparation, partnerships, or statement of cash flow, then you have to do a full question, not just a MCQ. This will help your understanding.
She pleaded, as someone has done at every conference since time began, for students to read the relevant Examiner's Report.
To improve pass rates students have to ensure they review all the accounting standards in the syllabus, especially changes in accounting policy, intangible assets, non-current assets and provisions. PQs also have to concentrate on the trickier areas such as errors and suspense accounts.
Ventress concluded by saying that too many candidates don't finish the question they are answering. Be careful, she said, not to select the distracter that represents the penultimate stage of the calculation. And pay attention to the number of years and months in a calculation, don't always assume the financial year ends in December. However, the clue is in the question – it always states the year end! The examiner also wants you to check the dates of revaluations to assess whether the asset needs to be depreciated first or not.
There is not much new being added to this exam. A recent change was the inclusion of IAS1 and some terminology in the INT paper. However, she pointed out that UK students must know the treatment of revaluation gains in the statement of total recognised gains and losses.
Interestingly, Ventress revealed that the CBE pass rate (59%) is slightly better than the paper-based exam. In future, the plan is to publish these rates together.

P2 Corporate Reporting
The examiner of this paper is the impressive Graham Holt. He explained his paper is divided into one 50-mark question and the choice of two from three 25-mark questions. Under this new syllabus that means there are just 100 marks up for grabs. (In the past there were many more marks available in each paper.)

Candidates' strengths
– Students are good at rote learning standards – unfortunately.
– Good knowledge of cash flow statement preparation and basic knowledge of group accounting.
– Good at discussing topical issues (so long as the information required is not too specific).

Candidates' weaknesses
– Too much time is spent on question 1, the 50-mark key question.
– Detailed discussion of standard given where they were not required.
– Workings are not always shown.
– Application of knowledge to the scenario in the question.
– Conceptualisation of ethic issues is poor. Ethics isn't a bunch of codes, it's about morality.
Holt explained that the main reason why students fail his paper is that they omit whole parts of the question in their answers. "Why can't they answer the requirements of the question?" he asked. Another worry was the lack of basic knowledge of IFRIC's. PQs knowledge of financial instruments is also poor and overall technical knowledge could be better. "It's as simple as that," he said.
Average marks per question per sitting
Dec 07 Jun 08 Dec 08
Q1 24 25 26/50
Q2 12 11 11/25
Q3 9 9 9/25
Q4 10 10 11/25

The stats reveal that the Q3 case study question is answered dreadfully. This must be a lack of application, said Holt, because the technical content was straightforward.
With the vast majority of students in the 48-54 mark range, a two- or three-mark increase could raise pass rates significantly.
He revealed that one P2 candidate really did write: "Accounting standards are a bunch of numbers running around looking for an argument." Holt used this example to show that PQs don't seem to understand standards, how to apply them or have the ability to argue issues.
Holt also said students need to develop their understanding of group accounting techniques and other broader technical understanding. Time management skills and the attitude of candidates also needs improving, stressed Holt.
He wants PQs to do past exam questions in a time-constrained environment. Then they must complete the question understanding the mistakes. Knowledge has to be built up over a period not crammed in a matter of weeks, Holt stressed. A broader reading base will also help exam success, along with reading the technical articles in the ACCA's magazines and journals.
So what is new in his paper?
– The ethical part is more generic.
– Accounting for business combinations and ethical issues.
– Computational elements in the current issue question.
– IFRICs – basic knowledge.
– Current issues based on recent events/IASB work programme.
Holt felt that in future there will be more emphasis on technical issues. The focus of the paper will also develop with the accounting standards.

[«all Studies]