Mortar board and a graduation diploma

Brief Overview of ACCA

The Association of Chartered Certified Accountants (ACCA) is a global body that offers one of the most prestigious certifications for accountants – Chartered Certified Accountants or ACCA. As of 2017, there are more than 700,000 ACCA members and students spread across 178 countries worldwide.

ACCA Syllabus and Papers

The ACCA syllabus includes 13 papers which are broadly categorized into Fundamental level (9 papers F1 – F9) and Strategic Professional level (4 out of 6 papers P1 – P7). Further, the 13 papers in the ACCA syllabus are sub-divided into the following four levels:

  • Knowledge (includes 3 papers F1 – F3)
  • Skills (includes 6 papers F4 – F9)
  • Essentials (includes 2 papers P1/P3 & P2)
  • Options (includes 4 papers P4 – P7 out of which appear for any 2)

Knowledge level

This section is the starting point for you in the pursuit of becoming an ACCA qualified accountant and as such provides you the basic knowledge of accounting in business.

F1 – Accountant in Business (AB): This paper teaches you how to effectively manage a business by understanding the current business environment and comprehend its influence on the activities of an organization. It also emphasizes on your role as an accountant and the expected contribution from you in the development of the organization in an effective and ethical way. The following topics are primarily covered in this paper:

  • Structure, governance, and management of an organization
  • Influences and constraints of key environmental factors on business and accounting
  • Role of accountants in a business
  • Specific functions of internal financial control and accounting
  • Individual and team management

F2 – Management Accounting (MA): This paper provides you the knowledge of preparing and processing basic quantitative information, which can be eventually used to support the decision-making processes at the management level. The following topics are primarily covered in this paper:

  • Nature and purpose of management and cost accounting
  • Classification of cost and study of its behavior and purpose
  • Computer spreadsheets and business mathematics
  • Standard costing and budgeting
  • Cost accounting techniques
  • Various decision-making techniques

F3 – Financial Accounting (FA): This paper teaches you the underlying concepts and the core principles that govern financial accounting activities. It will also help you develop technical expertise in double-entry accounting, which is the foundation for preparing and interpreting all the basic financial statements. The following topics are primarily covered in this paper:

  • Background and purpose of financial reporting
  • Interpretation of qualitative financial information
  • Fundamentals of accounting
  • Application of double-entry accounting
  • Recording of accounting transactions and events
  • Preparation of trial balance
  • Preparation of the basic financial statements

Skills level

This module helps you to develop technical expertise in some of the important subjects, which include taxation, law, auditing and financial management, performance management and financial reporting. In fact, as an ACCA member you are expected to have an advanced understanding of these subjects.

F4 – Corporate and Business Law (LW): This paper helps you to understand the wider legal framework by introducing you to the specific legal issues that are related to the business. It also teaches you to identify those situations where you should straightaway seek the advice of a specialist legal advisor. The following topics are primarily covered in this paper:

  • Fundamentals of the corporate legal system
  • Employment law
  • Constitution of a business organization
  • Management, administration, and regulation of a company
  • Legal implications for a company in stress
  • Ethical and governance issues of a business

F5 – Performance Management (PM): This paper helps you in developing your skills and learn different management accounting techniques. The objective is to teach you how to use the available quantitative and qualitative information in the process of planning, decision-making and performance evaluation. The following topics are primarily covered in this paper:

  • Cost accounting methods
  • Budgeting and forecasting
  • Performance measurement techniques
  • Standard costing and variance analysis

F6 – Taxation (TX): The objective of this paper is to provide you more detailed knowledge of the business tax system and help you understand how it impacts both individuals and companies. The following topics are primarily covered in this paper:

  • Capital allowances and profits earned from property business
  • Employment income, investment income and trading profits
  • Personal tax, corporate tax, capital gains tax and value-added tax
  • National insurance

F7 – Financial Reporting (FR): The objective of this paper is to develop your skills to understand the underlying principles of accounting standards and financial reporting. It also lays emphasis on the theoretical principles on which the financial statements are built, which will eventually help you analyze and interpret the financial statements better. The following topics are primarily covered in this paper:

  • Regulatory and conceptual framework of financial reporting
  • Financial statement preparation
  • Analysis and interpretation of financial statements

F8 – Audit and Assurance (AA): This paper will provide you the knowledge required to carry out assurance engagement ensuring that you understand all the related professional regulatory frameworks for the same. The following topics are primarily covered in this paper:

  • The regulatory framework for audits
  • Planning and risk assessment
  • Knowledge of internal control
  • Recording audit evidence
  • Reviewing and reporting audit outcomes

F9 – Financial Management (FM): This paper teaches you how the financial managers use their knowledge and expertise for making investments, financing and various other decisions. The following topics are primarily covered in this paper:

  • Functions of a financial manager
  • Financial management environment
  • Investment appraisal and business valuation
  • Management of cost of capital and business finance
  • Working capital management
  • Business risk assessment

Essentials level

This module provides you with some of the most essential and specialized skills that are required to become an excellent accountant. In fact, such skills will open doors for you to opportunities such as high-level advisory roles or consultancy.

P1/ P3 – Strategic Business Leader (SBL): This paper intends to concentrate on things that you will be required to dwell upon as a part of the Board of Directors of an organization. Basically, you will be taught how to take a big picture approach for deciding on strategies and corporate governance issues on one hand, and take a more meticulous approach for developing policies on internal controls and audits on the other. The following topics are primarily covered in this paper:

  • Role and function of governance in the management of an organization
  • Role of an accountant in risk assessment
  • Ethical framework for professional values and judgment

P2 – Strategic Business Reporting (SBR): This paper aims to leverage your  existing knowledge of basic financial reporting to develop understanding of more complex financial reporting issues. The following topics are primarily covered in this paper:

  • Professional and ethical duties of an accountant
  • Framework for financial reporting
  • Preparation of financial statements for group entities
  • Study probable financial reporting issues
  • Implications of changes in accounting regulation
  • Evaluation of current developments

Options

This module allows you the choice to select 2 papers out of the available 4 papers. The objective of this module is to provide you the subjects that are best suited to your field of interest and career aspirations.

P4 – Advanced Financial Management (AFM): This paper provides you an in-depth understanding of the financial world. It also helps you to develop your theoretical skills so that you become more suited for the roles of senior financial advisors and executives. The following topics are primarily covered in this paper:

  • Stakeholder management
  • Advanced investment appraisal
  • Corporate re-organization, acquisitions and mergers
  • Advanced risk management techniques
  • Emerging issues in the world of finance

P5 – Advanced Performance Management (APM): This paper aims to hone your skills by teaching advanced management accounting techniques. It helps you to develop your ability to assess the performance and development of global organizations more accurately. The following topics are primarily covered in this paper:

  • Assessment of strategic development and performance of an organization
  • Evaluation of external factors
  • Performance systems and design
  • Current global developments

P6 – Advanced Taxation (ATX): The objective of this paper is to provide you the knowledge required for understanding the impact of large-scale taxation on financial decision-making. The following topics are primarily covered in this paper:

  • UK tax system and its impacts
  • Tax planning methods
  •  Client communication

P7 – Advanced Audit and Assurance (AAA): This paper helps you to improve your analysis and evaluation techniques. It also develops your assurance engagement reporting and other audit and assurance related issues. The following topics are primarily covered in this paper:

  • Conceptual and regulatory framework for audit
  • Preparation of financial statements
  • Analysis and interpretation techniques

The time required to prepare each paper

The time required to prepare each paper depends on the skill level of each individual and hence it is an absolutely subjective thing. However, based on various opinions, it can be said that each paper from the fundamental level takes approximately 1 month, while each strategic professional-level paper takes approximately 2.5 months.

Difficulty level of each paper

The level of difficulty of each paper can vary from person to person as it is a subjective matter which depends a lot on your skill level, area of interest and perception. However, one of the most effective ways to decide on the level of difficulty is the historical pass rate. The historical pass rate shows how many people could pass the exam and typically a lower pass rate indicates that the paper is relatively more difficult. As such, from the below table, it can be inferred that F1 (Accountant in Business) is the easiest paper with highest pass rate of 85% in June 2019, while P7 (Advanced Audit and Assurance) is the toughest paper with lowest pass rate of 30% in March 2019. However, please note that this is just an opinion. 

Table: Historical pass rates of ACCA papers

Read more: A Day In the Life of a Financial Analyst