APM frequently asked questions (FAQs)

Are there any changes happening to Advanced Performance Management (APM) from September 2018?

From September 2018 the following changes will apply to APM:

  • All questions will be compulsory; there will be no choice in Section B.
  • Section A will continue to be a 50 mark case study style question but will focus on topics from syllabus sections A, C and D.
  • Section B will contain two 25 mark questions; one of which will focus mainly on a topic from syllabus section E with a supporting topic from elsewhere in the syllabus and the other question can come from any syllabus section.
  • In terms of years, dates are now artificial – ie use of 20X5 etc. For consistency it has been decided that where necessary APM will attempt to always use a reporting year of 1 July 20X4 – 30 June 20X5. It will also state above the requirements the date that it is now and again for consistency APM will aim to always use 1 September 20X5.

How is Advanced Performance Management different from the Performance Management exam?

Performance Management (PM) is at the Applied Skills level and tests the candidate's ability in the application and analysis of core management accounting techniques. APM develops key aspects introduced at the PM level, with more of a focus on the synthesis and evaluation of the key topics and techniques. APM also introduces more specialised techniques and current issues in performance management.

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

The whole of the Performance Management syllabus is assumed knowledge for an Advanced Performance Management candidate. It is unlikely that Performance Management topics will be retested in Advanced Performance Management at the level of detail that is required to pass Performance Management. However, a candidate who does not know the methods and techniques taught for Performance Management will struggle to complete the tasks in Advanced Performance Management, which are to synthesise and evaluate those methods in business scenarios. Refer to the article Bringing forward Performance Management knowledge and skills into Advanced Performance Management. 

If any modern developments in performance management that are not explicitly mentioned in the syllabus are examined, will an article be written or are candidates expected to do background 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 exam. 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?

Yes.

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

EIS refers to the system that is used by the senior executives 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 the preference would be to use EIS as it is more precise. If the question is addressing bringing all functional areas into one system and looking at links to suppliers and customers then ERPS would be used.

Is Mendelow's matrix examinable in this exam?

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 but specific formula will be given where a question requires 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.

Will candidates 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 exam 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 Performance Management syllabus.

How much will knowledge of information technology be tested?

This is a core area and Advanced Performance Management will continue to increase its focus on technology, reflecting the impact this is having on the accounting profession and management accounting in particular. The exam may have IT examined in a Section B 25-mark question as in Q3 from the March/June 2017 sample questions, or it could be covered as part of a Section A question, as seen in the March/June 2018 sample questions. 

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 Advanced Performance Management examining team on this subject on the tehnical articles page. 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.

Candidates should be able to perform these adjustments in an EVA calculation and be able to explain why these adjustments are necessary. Q1 part a) in the sample questions published from the September and December 2015 exams is a good example of what is expected

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 Advanced Performance Management 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 critical 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 (ie choice of performance management and measurement systems) in monitoring and controlling the organisation.

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