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How is P5 different from F5?

F5 is at the skills level and tests the candidate's ability in the application and analysis of core management accounting techniques. P5 develops key aspects introduced at the F5 level, with more of a focus on the synthesis and evaluation of the key topics and techniques. P5 also introduces more specialised techniques and current issues in performance management.

Most candidates forget some of their F5 knowledge by the time that they get to P5. Are there any elements of F5 that will be re-tested in P5?

The whole of the F5 syllabus is assumed knowledge for a P5 candidate. It is unlikely that F5 topics will be retested in P5. However, a candidate that does not know the methods and techniques taught for F5 will struggle to complete the tasks in P5, which are to synthesise and evaluate those methods in business scenarios.

There have been some questions in the P5 exam that could easily have been set as part of the P3 exam. What is the boundary between P3 and P5?

The boundaries between P3 and P5 can be thought of in terms of scope or breadth.

P3 takes a much wider view of a business and involves various ways of analysing it such as looking at its environment, resources, capability, structure, culture and performance in a number of different ways.

P5 has more of an accounting focus and is more specifically concerned with the measurement, control and improvement of performance in the financial and quantitative sense. Any similarities in subject coverage should be seen in these different contexts.

Although some topics will continue to feature in both papers, the focus and contexts will usually be very different. For example, while in P3 candidates may be required to formulate a SWOT analysis in general business terms, in P5 they will only consider how SWOT analysis may help in the performance management process.


If any modern development in performance management that is not explicitly mentioned in the syllabus is examined, will an article be written or are candidates expected to do backfround reading to help prepare for the exam?

Technical articles will be used to bring candidates' attention to current topics covered by the syllabus but not mentioned specifically.

Therefore candidates are advised to read our technical articles on performance management in preparing for the paper. Please note that candidates should read technical articles from more than the last couple of years.

This is because performance management moves slowly than say, tax or financial accounting, with trends taking years to build.

In the context of transfer pricing, is optimal transfer pricing examinable?


Do the terms EIS (enterprise information system) and ERPS (enterprise resource planning system) mean the same thing?

EIS refers to the system that is used by the senior executive to plan and control the business. ERPS contains sub-systems with these functions but can also be used to cover the lower-level systems of an organisation.

ERPS is often associated with the move to a single database or data store for the organisation's needs. So, these topics are broadly similar but not exactly the same.

If the question is addressing strategic information needs, then preference would be to use EIS as it is more precise. 

Is Mendelow's matrix examinable in this paper?

In so far as stakeholder analysis may prove useful then yes, it is examinable.

Will I be provided with a formulae sheet and maths table in the exams?

Mathematical tables will be provided in the exams (and Annuity tables). Formulae sheet will not be provided with each exam paper but specific formula will be given where a question requires one.

Will students be given credit in the exam for incorporating some real-life examples in their solutions?

Yes, provided these are explained sufficiently in order to allow a marker to see their relevance to the question asked.

The examiners' approach article states that the paper will require less computational work. Will learning curves, data tables and joint-probability tables still be examinable?

Yes, as they are assumed knowledge from the F5 syllabus.

How much will knowledge of IT be tested?

This is a core area and we plan to focus on it more in the future. The exam may have IT examined with a 25-mark question (Section B) as in Question 3 from the December 2013 paper, or it could be covered as part of a question in Section A, from the June 2011 paper.


Will the exam paper be more closely linked to the study guide and study material for P5?

Yes, but it's the application of both F5 and P5 models that is most important. 



How is pricing covered in Papers P3 and P5?

The topic of strategic pricing is not examined in P5 as it is in P3. However, there are obvious price implications related to many questions on performance management and candidates would be expected to comment on these.

Lengthy discussion of, for example, market skimming and market penetration would not be required.

The solution to Question 2 part a) of the December 2010 Paper is a good example of what is expected of candidates.

Is EVA (economic value added) a core area and what level of adjustments are expected?

Yes, it is a core area.

There are two articles written by a member of the P5 examining team on this subject in Student Accountant. The articles address changes in financial reporting that have affected EVA calculations and will explain in detail what is expected of candidates as a result.

Both models are applicable and questions on this area may allow the use of either or may ask for the use of a  particular model.

To what extent will candidates have to evaluate the implications of a proposed strategy?

The implications of a proposed strategy are relevant for Paper P5 because of their impact on the management of performance of the organisation in question.

So a question may ask about how the proposed mission, values or strategies feed into success factors and the drivers of performance, and then how these are reflected in the KPIs that are used.

The key questions are about the coherence of these choices, their consistency and the subsequent impact on management activity in monitoring and controlling the organisation.

The paper does not have formulae sheet. Will some formulae be given in the exams such as weighted cost of capital for EVA (economic value added), learning curves, Z scores etc)?

Formula will only be given if the questions requires the use of one.  Formulae will be given for learning curves and Z scores (or any other credit-scoring formulae). WACC (Weighted Average Cost of Capital) formula will not be given as this is basic knowledge.  For EVA only the exam formula will be given.

Are any changes happening to the professional level exams in 2014?

There are no structural changes happening to the professional level exams in 2014. The P6 syllabus will be updated for the June 2014 sitting. The syllabus for the other professional level papers will be updated for the December 2014 session with quite a few changes in some cases. Make sure that you check the resources available for each paper on our website to stay abreast of these changes. There will also be information in Student Accountant:
P1 Governance, Risk and Ethics
P2 Corporate Reporting
P3 Business Analysis
P4 Advanced Financial Management
P5 Advanced Performance Management
P6 Advanced Taxation
P7 Advanced Audit and Assurance

Last updated: 14 Aug 2014