Preparing For The Paper F5 And Performance Management Accounting Exams

When taking different types of exams you will find yourself faced with different types of challenges. Although the accountancy discipline is often driven by numeric factors, it is important to understand the importance of clearly responding to ‘wordy questions’. This exam advice comes from the challenging ACCA F5 syllabus – covering the necessities of performance management accounting.

If you struggle with your writing, then you will find the following advice very useful. You first need to master the basic skills of outlining, identifying, describing, suggesting and explaining in order to pass the test. After that you can work on improving your marks by practising the techniques used below. Using the Paper F5 exam as a model, the following guidelines will be important when being asked to establish understanding and knowledge of performance management:

If you want to boost your marks, it is important to …

Interpret

When you are asked to ‘interpret’ something, for example, the balanced scorecard approach, you are being asked to explain the approach in your own words and give your opinion about it. This is a much higher-level requirement, and as such will usually be reflected with higher marks.

Compare

When comparing you will be drawing comparisons between two or more subjects then formulating a conclusion. For example, if you are asked to compare product costs using activity-based costing as opposed to traditional costing, you need to say why the costs are different. This will involve looking in detail at the activity-based costs and ascertaining the reason why the overheads absorbed into one product are, for example, higher under activity-based costing than traditional absorption costing. With this type of question will require a degree of analysis.

Discuss

This is a higher-level skill and requires a candidate to give their own thoughts on a subject, supporting it with facts and logical reasoning. The opinions you give in any discussion must be sound and well-reasoned. It is no good saying that variances are de-motivational without explaining why. You are expected to acknowledge both sides of the story. Examiners will be able to get a sound feel for you understand through this instruction.

Evaluate

This requirement would not be expected to arise much in Paper F5. Most of the evaluation work is reserved for Paper P5. However if you are asked to evaluate something you need to decide the merits of it. This is most definitely a higher-level of skill.

Justify

In this requirement you need to defend the validity of your answer or position. For example, if you had to justify the use of backflush accounting within an organisation, you would have to mention the relative immateriality of inventory balances, presuming this was in fact the case (otherwise you would struggle to justify the use of backflush accounting in the first place).