Study Zone

Keep your balance

There's a big difference between knowing your theory and applying it

Nick Best explains why it's important to identify exactly what the examiner is asking you so you can tailor your answer accordingly

When you are answering exam questions, it can be hard at times to get the right balance between the description of a theory and the application of that theory. In the lower level exams, knowing the theory counts for a large part of your success. However, as you progress to more advanced papers, explaining theory earns fewer marks, with the application of theory where most marks are gained.
In my experience, ACCA exams typically put a greater emphasis on theory and you are more likely to be asked for a direct explanation of one. Although it is a new exam, in the new P1 paper 'The Professional Accountant', the two exams so far have already demonstrated the need to know theory well. Questions have regularly been structured so that the first part asks for the theory, and the second about the application of that theory. Where there is this clear distinction in the requirement, you can happily focus on these two individual elements separately.
This structure is not used in all ACCA questions, and on advanced CIMA papers it is rare. The most similar paper to ACCA P1 on CIMA is Risk and Control Strategy. In the syllabus there is a reasonable amount of theory, but rarely is a specific theory asked for in questions. In a risk question, you are often asked simply to identify risks in a scenario, along with how to deal with those risks. In these questions, theory should not be ignored. The best answers use the theory to help answer the question. This enables markers to give credit for both, and so maximise marks scored.
The key in using theory in these questions is to use it to structure your answer. In a risk question, for example, you might use the common risk classifications as headings in the risk identification, and the risk profiling matrix to help you understand them and decide on an appropriate risk response.
Another challenge in these questions is to choose the right theory. You must clearly understand what each theory does, and then look for key words in the question to indicate that theory is suitable. Let's use the business strategy model, Porter's Five Forces, as an example. This is a model used to understand the specific industry an organisation is operating within. If the question asks for an analysis of the 'industry' or 'market' then this is the model to use. If it's the 'broad environment' the company is operating within, then a PEST analysis is right.
For the subject you are studying, I suggest that you create a list of models and the key words that you'll be looking for in requirements which indicate that that's the right model to use. Then, review the requirements of the last few years of past exam papers and choose which models you would use on each question. Check this against the solution to see if you were right. If not, aim to understand why, and adapt your key words list accordingly. This type of practice is not something students commonly do, but it could make all the difference in the exam, since using the wrong theory could mean scoring no marks in that section of the paper.
* Nick Best is tutoring CIMA papers 3, 5 and TOPCIMA, and ACCA F1 and P1 at Reed Business School

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