ACCA - The global body for professional accountants

The Examination Review Board (ERB) met on 23 December 2010 to give immediate feedback on the December 2010 ACCA exams.

The terms of reference of the ERB are:
• To review the questions, answers and marking schemes after each exam session to ensure that the papers are a fair and reasonable test.
• To recommend changes to the syllabus and format of the papers.

A number of parties feed into the exam review including platinum publishers, platinum tuition providers, Oxford Brookes, and Candidate survey reports conducted immediately after the examination.

The following is a summary of the papers and areas of concern discussed by the panel.

Paper F4
This was a straightforward and interesting paper with some challenging questions and also a range of fairly straightforward ones, which should allow well prepared candidates to provide good answers.

Question 10 received a mixed response as it was felt by some that the order of repayment was outside the scope of the syllabus.

It was confirmed that the order of repayment in question 10 is within the syllabus (See D2e)) although perhaps covered less well in the textbooks than other topics.

Candidate feedback
74% of candidates found this to be a fair paper, set at the correct level
83% of candidates agreed that the questions were clear
80% found the syllabus was covered adequately.

Paper F5
Paper F5 was found to be a well balanced paper with good coverage of the five core syllabus areas.

Question 1 was a good variance question, although it was felt more emphasis could have been put on planning and operational variances.

The scenario style of question 2 may have surprised candidates as it awarded 20 marks to a single requirement.  This may have disadvantaged candidates who find planning and application difficult. However the guidance given in the note to the requirement was helpful.

Question 3 required a lot of work which was time consuming. It was felt there should have been some discussion on linear programming and the shadow price calculation should have been given more emphasis in part b).  ACCA responded that drawing a graph would be time consuming, therefore the examiner had opted to keep the rest of the requirements simple.

Question 5 was based on core areas but some candidates would have struggled with the application of part d) (ZBB re public sector).  The marking scheme allowed candidates at this level to gain most marks even if they did not relate their points to the public sector.

Candidate feedback
83% of candidates found the syllabus was covered well and the questions clear.  56% felt they had little time to complete the paper due to the length of questions. 

Paper F6 (UK)
Paper F6 (UK) was found to be a fair paper, although challenging, examining all traditional areas. 

Question 1 was a good question, although PAYE codes and forms may have caused problems for some candidates.

Question 2 was a decent question and should have been well attempted.

Question 4 was on comparison of company car versus extra salary.  Some felt this was unusual as it examined two tax areas within one question, where usually it would normally focus on one tax at a time.  This type of question would better prepare candidates for a P6 style question. 

Question 5 examined extended carry back loss relief, and candidates should have been ready for it.

Candidate feedback
79% of candidates felt the syllabus was covered adequately. Candidates struggled with PAYE forms in question 1b) and with the different style in question 4.  
70% agreed the exam questions were clear.

Paper F7 was found to be a consistent paper with excellent syllabus coverage, a few minor issues were raised: 

Question 1 and 2 required candidates to prepare more than one financial statement; this may have been quite time consuming.  Candidates are less familiar with the statement of changes in equity and so may have struggled a little with this.  ACCA responded that candidates, as usual, are performing better on questions 1 and 2 compared to the other questions within the paper.  A significant minority were not attempting the statement of equity requested in question 2, but those who did were scoring reasonably well, although not as well as the main statements requested.

Candidates would have probably preferred a requirement to prepare a statement of cash flows but should have been pleased that under the requirement it did state that up to 10 marks were available for ratios.  ACCA confirmed candidates appear to have appreciated the opportunity to calculate ratios although a significant number are not making good use of these and the other information presented in their written answer.

Question 4 may not have been popular with candidates as it was based on IAS 8.  This is an important standard so it was right that it was examined but it is not one of the main stream ones within learning materials. 

Question 5 was focused on a main stream F7 syllabus area and should have been fairly accessible to candidates.

Overall a well prepared candidate should be able to pass this paper, although it was noted from the marking of early scripts that candidates need to focus more on their writing skills and not rely wholly on computations to pass the paper.

Candidate feedback
62% of candidates commented paper F7 was difficult, especially due to the amount required within the time frame.
80% found the questions clear
83% agreed the syllabus was covered adequately. 
Many commented on the absence of cash flow calculations.

Paper F8
Paper F8 was found to be a good quality yet challenging paper with consistent style.  It was deemed to have excellent coverage of the syllabus.

Some candidates may have had difficulty interpreting the requirements of question 1a) and knowing whether a deficiency is significant.  ACCA responded question 1a) was a deliberate attempt to examine the brand new ISA 265 and introduce deficiencies and significant deficiencies and was worth only five marks. However, overall this was a fair scenario based question as expected. 

Question 2 was as expected a technical question on a fair range of topics.

In question 3a) it was felt that the term 'preconditions' may have thrown candidates.   ACCA replied that the examiner wished to examine new areas and following the clarity project preconditions was something new introduced by ISA 210, which has been examinable since June. This was added as a specific new outcome in the study guide and it was disappointing that candidates do not know what preconditions are. The question was however deliberately only for 3 marks.

Candidate feedback
74% of candidates found the syllabus was adequately covered.
63% felt the paper was set at the right level
54% agreed they had enough time to complete the paper. 
Candidates felt there was a large emphasis on internal audit.

Paper F9
Paper F9 was found to be a fair paper covering all core topics in detail.  It is an excellent build up to P4 and rewarding hard working students.

Some candidates may have struggled with question 2a) due to a lack of structure and guidance, however there was a further 10 marks available in parts b) and c) which candidates were attempting well.

Question 4 was considered a good question mixing business valuations with dividend policy, although the mark allocation for dividend policy was considered to be a bit high.

Candidate feedback
86% of candidates found the exam questions clear which thoroughly covered the syllabus
60% felt they had enough time to complete the paper.  

Paper P1
P1 was found to be a fair and balanced paper whilst the requirements were challenging. The paper was deemed to be weighted towards corporate governance which reflects the syllabus content. 

In question 1 there was a requirement to draft sections of a full speech which was found to be quite challenging.  The examiner has given guidance to the marking team as to how best to give credit for this.

It was commented that only a small percentage was dedicated to ethics, but ACCA responded that personal ethics was included in more than one question. 10 marks in question 1b) and in question 3a) in respect of conflicts of interest for 8 marks. Additionally, the syllabus section also contains CSR, and question 2 focused on environmental risk and environmental audit.

A comment was raised on the use of “best practice” in requirement  question 3c), but it was explained that in a global paper requirements often refer to best practice as specific laws and regulation cannot be explicitly assessed.

ACCA commented that P1 will be a challenging paper as it is the first Professional paper, but the standard and style has remained consistent over time.

P1 now has a new title Governance Risk and Ethics to reflect the increased content and emphasis on risk management within the syllabus with effect from June 2011.

Candidate feedback
Candidates’ feedback reported 70% found the questions clear
75% agreed the syllabus was covered adequately
49% of candidates felt they had too little time
There were some concerns around the length of question 1.

Paper P2
The paper received positive feedback from the ERB panel.  It covered mainstream areas and was balanced across the syllabus. 

Question 1 a)  was a fair consolidated cash flow with the exception of note (ii) as this focused on the issue of shares by a subsidiary which was deemed quite difficult but only worth a few marks.

Question 2 on share-based transactions was expected although part (b) may have come as a surprise to some candidates.  Part (a) based on IFRS2 and IAS39 was tough although something similar had been examined in a previous diet.  The feedback on the remaining two parts of the question was positive.  

Question 3 was a fair question. The 'industry ' question format was as expected.  It was felt by some panel members that it was a little unfair to examine share based payments again albeit it was only for 3 marks.  ACCA responded that is not uncommon for a single standard to appear across a number of questions.

Question 4 based on IFRS for SMEs should have been expected by candidates and they should have been able to prosper in this question.

Candidate feedback
45% of candidates felt there was too little time to complete the paper
44% felt the paper was too difficult. 
76% found the questions clear
74% felt the core areas of the syllabus were covered well.

Paper P3
Paper P3 was generally viewed as a clear and imaginative exam testing a wide spread of the syllabus.   Overall a reasonable exam which a well prepared and confident candidate should have coped with.  This exam was more model/framework driven than previous years.

It was remarked upon that project management played a prominent role in this paper and that there was less emphasis on numerical analysis.

In Question 1 candidates were expected to use models such as BCG or the Ashridge portfolio model. The question also examined change management and the cultural make-up of the business which required the application of Hope Hailey Balogun’s contextual factors model.

Board members commented that Question 2– addressing the pros and cons of an e-marketing approach for a business and also how it can adapt the marketing mix should have been well answered. 

Question 3 was a good question about the cultural web in part (a), but some members commented that candidates may not have used Mintzberg's structural stereotypes in (b). The response to this comment was that the examiner has explicitly stated that in some requirements the candidates will be guided to use a specific model, in other requirements the candidate must decide which model or models to use. Those who learn models will do well, but there were sufficient clues in the requirements and case material to help those who may not be familiar with specific models. 

Question 4 had some cross over with question 2 where an educational business should adopt an e-assessment mechanism.  Candidates were expected to understand the term benefits realisation - not a term commonly used in the study material.

The ERB was reminded that more numerical analyses are expected in June 2011 and in subsequent examination sessions, as a result of the syllabus changes to P3 at that time.

Candidate feedback
69% of candidates found syllabus coverage appropriate
57% found the difficulty level about right
55% felt there were few time management issues. 
Some concerns were raised regarding the length and mark allocation of question 1.

Paper P4
Paper P4 was seen as a big improvement on recent papers containing a good mix of questions covering all syllabus areas. The paper was found to be technically more straightforward. The scenarios were considered longer which may have posed time pressure issues but each were well structured with clear requirements.

Some candidates may have missed the use of APV in question 2 as the requirement was not clear. ACCA responded that there was enough information in the question to direct candidates to the use of APV. However if NPV was used, most marks will be obtainable in part a) but may struggle to get marks in part b).

Candidate feedback
58% of candidates found the questions clear
54% found the difficulty level too hard. 
64% agreed the paper covered the syllabus well.
Many felt the scenarios were too long and complex.

Paper P5
The Examiner for Paper P5 was praised for this well balanced exam.  The level of difficulty was consistent throughout the paper.  Questions were more precise and analytical. Candidates may have been surprised to see more marks on discussion and less on calculation but the examiner had stated this in his approach article.

Question 4 was particularly noted as a positive shift away from previous essay style questions.

Questions 5 on Z score, no calculations were required and this may have surprised many candidates. 

Candidate feedback
56% of candidates found the syllabus was covered well
40% felt time pressured. 
Many commented that the paper differs considerably from past papers. 
Question 1 proved difficult for many.

Paper P6
Paper P6 was found to be a very good exam.  Compulsory questions were long but well structured.  The requirements were reasonably clear.  A wide range of topics were covered. 

Candidates’ feedback indicated that the clarity of requirements was much better in this paper. 

Question 1included a good clear set of requirements with distinct syllabus areas tested.  Candidates should have scored well on this question.

Question 2 included inheritance tax the remittance basis.  Candidates may have struggled to get to the depth of detail required in the remittance basis part of the answer but should have been able to do enough in the calculations, with some narrative to score an acceptable mark. 

Question 3 covered key P6 topics.  Excellent guidance was given in the requirement.  Candidates should have done well on this. 

Question 4 may have caused difficulty for some candidates.  ACCA advised that if candidates were unaware of the relief available on the reinvestment, credit was awarded for consideration of other reliefs, and whether or not they would be available.

Question 5 was felt this was the trickiest question in section B.

The panel was surprised that taxation of trusts was not examined again, since the examiner continues to update his article on this area.  ACCA advised that trusts were examined in the June 2010 exam and the article is updated annually, but this does not indicate trusts will be examined annually.

ACCA further advised that the articles should not be used as an indication of topics coming up in exams, and these will continue to be updated, so that they remain relevant for when the topics are examined.  A suite of articles should be referred to for exams, and no reliance placed on any particular article.

Candidate feedback
77% of candidates felt the requirements were clear
73% felt there was adequate syllabus coverage
53% felt it was too time pressured
 Many candidates were surprised at the lack of calculations required.

Paper P7
Paper P7 was found to be a fair challenge and an excellent pitch for a final paper for those aspiring to join the audit profession.  It was felt this was the P7 Examiner’s best paper so far with good use of the core syllabus areas, drawing on real world auditing issues around retail, pharmaceutical and freight companies.  The paper was set at the right level and well balanced between application and knowledge.

Candidate feedback
90% of candidates found this paper to be fair and balanced
82% felt the paper was set at the right level

Last updated: 27 Feb 2012